10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FORM 10-K

(Mark One)

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended: December 31, 2002

OR

[    ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                      to

COMMISSION FILE NUMBER: 0-02517

Toreador Resources Corporation
(Exact name of registrant as specified in its charter)

DELAWARE	75-0991164
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4809 COLE AVENUE SUITE 108 DALLAS, TEXAS	75205
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (214) 559-3933

Securities registered pursuant to Section 12(b) of the Act:
NONE

Securities registered pursuant to Section 12(g) of the Act:

Title of each Class:	Name of each exchange on which registered:
COMMON STOCK, PAR VALUE $.15625 PER SHARE	NASDAQ NATIONAL MARKET SYSTEM

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X   NO

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [    ].

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Securities Exchange Act Rule 12b-2) YES     NO X

     The aggregate market value of the voting common equity of the registrant held by non-affiliates, computed by reference to the closing sales price of such stock, as of June 28, 2002 was $15,297,502. (For purposes of determination of the aggregate market value, only directors, executive officers and 10% or greater stockholders have been deemed affiliates.)

     The number of shares outstanding of the registrant’s common stock, par value $.15625, as of April 10, 2003, was 9,337,517 shares.

DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the registrant’s Proxy Statement for the 2003 Annual Meeting of Stockholders, expected to be filed on or prior to April 30, 2003, are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

PART I
	ITEM 1. BUSINESS.
	ITEM 2. PROPERTIES.
	ITEM 3. LEGAL PROCEEDINGS.
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
PART II
	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
	ITEM 6. SELECTED FINANCIAL DATA.
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
PART III
	ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
	ITEM 11. EXECUTIVE COMPENSATION.
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
	ITEM 14. CONTROLS AND PROCEDURES.
PART IV
	ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
SIGNATURES
CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER
INDEX TO EXHIBITS
EX-4.5 Registration Rights Agreement
EX-10.24 Securities Purchase Agreement
EX-10.25 Shareholders Agreement
EX-10.26 Consulting Agreement
EX-10.27 Waiver Letter dated March 21, 2002
EX-10.28 Waiver Letter dated December 31, 2002
EX-10.27 Waiver Letter dated March 25, 2002
EX-10.30 Warrant Letter dated March 25, 2003
EX-10.31 Amendment to Settlement Agreement
EX-10.32 Waiver Letter
EX-21.1 Subsidiaries
EX-23.1 Consent of Ernst & Young LLP
EX-23.2 Consent of LaRoche Petroleum Consultants
EX-99.1 Certification of Chief Executive Officer
EX-99.2 Certification of Chief Financial Officer

TABLE OF CONTENTS

			Page
PART I				1
	ITEM 1.	BUSINESS		1
	ITEM 2.	PROPERTIES		12
	ITEM 3.	LEGAL PROCEEDINGS		19
	ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		20
PART II				21
	ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS		21
	ITEM 6.	SELECTED FINANCIAL DATA		23
	ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		24
	ITEM 7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		32
	ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		33
	ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		33
PART III				34
	ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT		34
	ITEM 11.	EXECUTIVE COMPENSATION		34
	ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		34
	ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		34
	ITEM 14.	CONTROLS AND PROCEDURES		34
PART IV				35
	ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K		35

PART I

ITEM 1. BUSINESS.

GENERAL

     Toreador Resources Corporation, a Delaware corporation, is an independent international energy company engaged in oil and gas exploration, development, production, leasing and acquisition activities. We principally conduct our business through: (i) the exploration for, and the acquisition and development of, oil and natural gas reserves, and (ii) our ownership of perpetual mineral and royalty interests in approximately 2,643,000 gross (1,368,000 net) acres. We currently hold interests in foreign developed and undeveloped oil and gas properties in the Paris Basin, France, the Cendere and Zeynel Fields in Turkey and the Bonasse Field and Southwest Cedros Peninsula License in Trinidad, West Indies. Our domestic properties include 766,000 gross (461,000 net) acres located in the Texas Panhandle and West Texas. In Alabama, Mississippi and Louisiana, we own 1,775,000 gross (876,000 net) acres. We also own various royalty interests in Arkansas, California, Kansas and Michigan covering 102,000 gross (31,000 net) acres. We also own various working interest properties in Texas, Kansas, New Mexico and Oklahoma. For a more detailed description of our properties please see “Item 2. Properties.”

     We were incorporated in 1951 and were formerly known as Toreador Royalty Corporation.

     On December 31, 2001, we completed the acquisition of Madison Oil Company, an independent international exploration and production company, that is now a wholly owned subsidiary. Madison holds interests in approximately 5,043,000 gross acres (3,317,000 net acres) of developed and undeveloped oil and gas properties in the Paris Basin, France, several fields in Turkey, Romania and the Bonasse Field and Southwest Cedros Peninsula License in Trinidad, West Indies.

     See “Glossary of Selected Oil and Gas Oil Terms” at the end of this Item 1 for a definition of certain terms used in this annual report.

BUSINESS STRATEGY

     Our strategic focus during 2002 centered on strengthening our balance sheet through the aggressive repayment of debt, increasing proved reserves, increasing product sales and the disposition of non-strategic assets. The principal elements of the 2002 strategy were:

•  Reduce the debt owed on our two senior credit facilities through the application of the majority of our free cash flow.

• Increase proved reserves with exploration and development drilling.

• Increase product sales with improved operating techniques in the Paris Basin.

• Disposal of under performing non-strategic assets.

DEVELOPMENTS DURING 2002

     ACQUISITIONS AND MERGERS

     In 2002, we acquired Wilco Turkey Ltd (“WTL”) from Wilco Properties, Inc. (“WPI”). WTL’s primary asset is an interest (ranging from 52.5% to 87.5%) in exploration licenses covering 2.2 million acres in the Thrace Basin and in the central and southeast areas of Turkey. We also acquired from F-Co Holdings Kandamis (“F-Co”) additional interests (ranging from 7.5% to 12.5%) in the same exploration licenses. The purpose of the acquisition was to obtain, explore and possibly develop the acreage covered by the licenses. The acreage in the Thrace Basin is adjacent to or near the acreage we held prior to the acquisition of WTL. In exchange for all of the outstanding common stock of WTL, we have agreed to give WPI an overriding royalty interest in any successful wells we drill on the acreage covered by the exploration licenses we acquired. We have also agreed to give F-Co, in exchange for its interest in the acreage, an overriding royalty interest in any successful wells we drill on the acreage. As of the acquisition date, there were no outstanding liabilities associated with WTL. We did not convey value to WPI or F-Co on the acquisition date, or assume any liabilities; therefore, the fair value of the transaction was zero. We have allocated no value to the assets acquired from WTL and F-Co. WPI is controlled by William I. Lee, a director and shareholder, and F-Co is owned by Peter L. Falb, a director and shareholder.

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     DISPOSAL OF UNDER PERFORMING NON-STRATEGIC ASSETS

     In 2002, we sold several non-strategic oil and gas assets for approximately $4.6 million. Of that amount, approximately 40 percent (40%) of the funds received were captured through the use of the auction Internet site (www.energynet.com) owned by EnergyNet.com, Inc. (a 35%-owned affiliate). The remaining funds were obtained through private negotiated sales.

     ISSUANCE OF SERIES A-1 CONVERTIBLE PREFERRED STOCK

     On November 1, 2002, pursuant to a private placement we issued $925,000 of Series A-1 Convertible Preferred Stock to certain of our directors or entities controlled by certain of our directors.

     The Series A-1 Convertible Preferred Stock is governed by a certificate of designation. The Series A-1 Convertible Preferred Stock was sold for a face value of $25.00 per share, and pays an annual cash dividend of $2.25 per share that results in an annual yield of 9.0%. At the option of the holder, the Series A-1 Convertible Preferred Stock may be converted into common shares at a price of $4.00 per common share. The $4.00 conversion price was higher than the market price of our common stock at the time of issuance. The Series A-1 Convertible Preferred Stock is redeemable at our option, in whole or in part, at any time on or after November 1, 2007. The optional redemption price per share is the sum of (1) $25.00 per share of the Series A-1 Convertible Preferred Stock plus (2) any accrued unpaid dividends, and such sum is multiplied by a declining multiplier. The multiplier is 105% until October 31, 2008, 104% until October 31, 2009, 103% until October 31, 2010, 102% until October 31, 2011, 101% until October 31, 2012, and 100% thereafter. In connection with the securities purchase agreement, the parties entered into a registration rights agreement effective November 1, 2002, among Toreador and the persons party thereto which provides for the registration of the common stock issuable upon conversion of the Series A-1 Convertible Preferred Stock.

     EXPLORATION ACTIVITIES

     TURKEY

     Turkish Permits. We hold 35 exploration licenses on 2.7 million net acres. A number of producing fields in Iran and Iraq trend in a north by northwesterly direction and wrap into southern Turkey through the area encompassing many of our exploration permits. Overall, our net exploration permit position increased 35% in terms of total net acres from December 31, 2001.

     Black Sea Permits. During 2002, we completed a 2D seismic study covering 1,250 kilometers on four of our eight contiguous permits in the Black Sea. Based on the interpretation of the data we have identified at least six gas prospects in the shallow-water western Black Sea. We are operator and hold a 49% working interest in the eight permits.

     Thrace Basin Permits. We drilled two wells on our Thrace Basin permits during 2002. The first well was dry, and the second awaits completion of testing. We own a 100% working interest in the well awaiting completion and we held a 50% working interest in the dry hole.

     ROMANIA

     In early 2003, we expanded our international portfolio when the Romanian government awarded the company a concession for the Viperesti Block in exchange for a staged work commitment. We are a 100% owner and operator of the block that lies in an oil-rich region in east-central Romania in the southeastern foothills of the Carpathian Mountains. Viperesti, which spans 324,000 acres, is surrounded by and on trend with many sizable oil fields to the southwest and northeast. The block is prospective in the Tertiary formations at depths ranging from 4,500-6,000 feet.

     FRANCE

     Nangis and Courtenay Permits. We were awarded two new exploration permits in 2002. The Nangis permit expires in 2005, and the Courtenay permit expires in 2006. The French exploration permits have minimum financial requirements that must be met during their terms. If such obligations are not met, the permits could be subject to forfeiture.

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     UNITED STATES

     West Texas San Andres Oil Recovery Project. We are participating with a 16.67% working interest in this project utilizing horizontal drilling techniques in the San Andres formation at a true vertical depth of 5,000 feet. The project, covering approximately 6,000 acres, is in its early stage of evaluation with one well completed and the second well currently being drilled.

     Bethel Dome Prospect. We participated in the drilling of the second exploratory well drilled on this prospect with a 5.86% working interest. The well is currently being completed in the Travis Peak formation at a depth of 10,100 feet.

MARKETS AND COMPETITION

     In France, we currently sell all of our production to Elf Antar France S.A., the largest purchaser in the area. This production is shipped by truck to Elf’s refinery. Alternative markets are available by pipeline to refineries on the north coast of France. Production in Turkey is sold to refineries in the southern part of the country.

     Our domestic oil and gas production is sold to various purchasers typically in the areas where the oil or gas is produced. Revenues from the sale of oil and gas production accounted for 116%, 89% and 98% of our consolidated revenues for the three years ended December 31, 2002, 2001 and 2000, respectively. Generally, we do not refine or process any of the oil and gas we produce. We are currently able to sell, under contract or in the spot market through the operator, substantially all of the oil and the gas we are capable of producing at current market prices. Substantially all of our oil and gas is sold under short-term contracts or contracts providing for periodic adjustments or in the spot market; therefore, our revenue streams are highly sensitive to changes in current market prices. Our gas is sold to pipeline companies as opposed to end users.

     The oil and gas industry is highly competitive. We encounter strong competition from other independent operators and from major oil companies in acquiring properties, contracting for drilling equipment and securing trained personnel. Many of these competitors have financial and technical resources and staffs substantially larger than those available to us. As a result, our competitors may be able to pay more for desirable leases, and they may pay more to evaluate, bid for and purchase a greater number of properties or prospects than our financial or personnel resources will permit us to do.

     We are also affected by competition for drilling rigs and the availability of tubular goods and certain other equipment. While the oil and gas industry has experienced shortages of drilling rigs and equipment, pipe and personnel in the past, we are not presently experiencing any shortages and do not foresee any such shortages in the near future; however, we are unable to predict how long current market conditions will continue.

     Competition for attractive oil and gas producing properties, undeveloped leases and drilling rights is also strong, and we can give no assurance we will be able to compete satisfactorily in acquiring properties. Many major oil companies have publicly indicated their decision to focus on overseas activities and have been actively marketing certain producing properties for sale to independent oil and gas producers. We cannot ensure we will be successful in acquiring any such properties.

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REGULATION

     INTERNATIONAL

     General. Our current international exploration activities are conducted in France, Turkey, Romania and Trinidad. Such activities are affected in varying degrees by political stability and government regulations relating to foreign investment and the oil and gas industry. Changes in these regulations or shifts in political attitudes are beyond our control and may adversely affect our businesses. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property, environmental legislation and mine safety.

     Government Regulation. Our current or future operations, including exploration and development activities on our properties, require permits from various governmental authorities, and such operations are and will be governed by laws and regulations governing prospecting, development, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection and other matters. Compliance with these requirements may prove to be difficult and expensive. See “Item 1. Business – Risk Factors – Company Risks” for further information regarding international government regulation.

     Permits and Licenses. In order to carry out exploration and development of mineral interests or to place these into commercial production, we may require certain licenses and permits from various governmental authorities. There can be no guarantee that we will be able to obtain all necessary licenses and permits that may be required. In addition, such licenses and permits are subject to change and there can be no assurances that any application to renew any existing licenses or permits will be approved. See “Item 1. Business – Risk Factors – Company Risks” for further information regarding our foreign permits and licenses.

     Repatriation of Earnings. Currently, there are no restrictions on the repatriation from France or Turkey of earnings or capital to foreign entities. However, there can be no assurance that any such restrictions or repatriation of earnings or capital from France, Turkey or any other country where we may invest will not be imposed in the future.

     Environmental. The oil and gas industry is subject to extensive and varying environmental regulations in each of the jurisdictions in that we may operate. Environmental regulations establish standards respecting health, safety and environmental matters and place restrictions and prohibitions on emissions of various substances projected concurrently with oil and natural gas. These regulations can have an impact on the selection of drilling locations and facilities, potentially resulting in increased capital expenditures. In addition, environmental legislation may require those wells and production facilities be abandoned and sites reclaimed to the satisfaction of local authorities. We are committed to complying with environmental and operation legislation wherever we operate.

     DOMESTIC

     General. The availability of a ready market for oil and gas production depends upon numerous factors beyond our control. These factors include state and federal regulation of oil and gas production and transportation, as well as regulations governing environmental quality and pollution control, state limits on allowable rates of production by a well or proration unit, the amount of oil and gas available for sale, the availability of adequate pipeline and other transportation and processing facilities and the marketing of competitive fuels. For example, a productive gas well may be “shut-in” due to an oversupply of gas or lack of an available gas pipeline in the areas in which we conduct operations. State and federal regulations generally are intended to prevent waste of oil and gas, protect rights to produce oil and gas between owners in a common reservoir, control the amount of oil and gas produced by assigning allowable rates of production, and control contamination of the environment. Pipelines and gas plants also are subject to the jurisdiction of various federal, state and local agencies.

     Our sales of natural gas are affected by the availability, terms and costs of transportation. The rates, terms and conditions applicable to the interstate transportation of gas by pipelines are regulated by the Federal Energy Regulatory Commission (“FERC”) under the Natural Gas Act (“NGA”), as well as under Section 311 of the Natural Gas Policy Act (“NGPA”). Since 1985, FERC has implemented regulations intended to increase competition within the gas industry by making gas transportation more accessible to gas buyers and sellers on an open-access, non-discriminatory basis.

     Our sales of oil are also affected by the availability, terms and costs of transportation. The rates, terms, and conditions applicable to the interstate transportation of oil by pipelines are regulated by FERC under the Interstate Commerce Act. FERC has implemented a simplified and generally applicable rate-making methodology for interstate oil pipelines to fulfill the requirements of Title VIII of the Energy Policy Act of 1992 comprised of an indexing system to establish ceilings on interstate oil pipeline rates. The FERC has

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announced several important transportation-related policy statements and rule changes, including a statement of policy and final rule issued February 25, 2000 concerning alternatives to its traditional cost-of-service rate-making methodology to establish the rates interstate pipelines may charge for their services. The final rule revises FERC’s pricing policy and current regulatory framework to improve the efficiency of the market and further enhance competition in natural gas markets.

     With respect to transportation of natural gas on or across the Outer Continental Shelf (“OCS”), FERC requires, as a part of its regulation under the Outer Continental Shelf Lands Act (“OCSLA”) that all pipelines provide open and non-discriminatory access to both owner and non-owner shippers. Although to date FERC has imposed lenient regulation on offshore gathering facilities, it has the authority to exercise jurisdiction under the OCSLA over such gathering facilities, if necessary, to require non-discriminatory access to service. For those facilities transporting natural gas across the OCS that are not considered to be gathering facilities, the rates, terms and conditions applicable to this transportation are regulated by FERC under the NGA and NGPA, as well as the OCSLA. With respect to the transportation of oil and condensate on or across the OCS, FERC requires, as part of its regulation under the OCSLA, that all pipelines provide open and non-discriminatory access to both owner and non-owner shippers. Accordingly, FERC has the authority to exercise jurisdiction under the OCSLA, if necessary, to require non-discriminatory access by shippers to service.

     We conduct operations on federal, state or Indian oil and gas leases. Such operations must comply with numerous regulatory restrictions, including various nondiscrimination statutes, royalty and related valuation requirements, and certain of such operations must be conducted pursuant to certain on-site security regulations and other appropriate permits issued by the Bureau of Land Management (“BLM”), Minerals Management Service (“MMS”), or other appropriate federal or state agencies.

     Our OCS leases in federal waters are administered by the MMS and require compliance with detailed MMS regulations and orders. The MMS has promulgated regulations implementing restrictions on various production-related activities, including restricting the flaring or venting of natural gas. Under certain circumstances, the MMS may require any operations on federal leases to be suspended or terminated. Any such suspension or termination could materially and adversely affect our financial condition and operations. On March 15, 2000, the MMS issued a final rule effective June 1, 2000, that amends its regulations governing the calculation of royalties and the valuation of crude oil produced from federal leases. Among other matters, this rule amends the valuation procedure for the sale of federal royalty oil by eliminating posted prices as a measure of value and relying instead on arm’s length sales prices and spot market prices as market value indicators. Because we generally sell our production to third parties and royalties on production from federal leases are paid on the basis of these sales, it is not anticipated that this final rule will have any substantial impact on us.

     The Mineral Leasing Act of 1920 (“Mineral Act”) prohibits direct or indirect ownership of any interest in federal onshore oil and gas leases by a foreign citizen of a country that denies “similar or like privileges” to citizens of the United States. Such restrictions on citizens of a “non-reciprocal” country include ownership or holding or controlling stock in a corporation that holds a federal onshore oil and gas lease. If this restriction is violated, the corporation’s lease can be canceled in a proceeding instituted by the United States Attorney General. Although the regulations of the BLM (which administers the Mineral Act) provide for agency designations of non-reciprocal countries, there are presently no such designations in effect. We own interest in federal onshore oil and gas leases. It is possible that our stockholders may be citizens of foreign countries, which at some time in the future might be determined to be non-reciprocal under the Mineral Act.

     Federal and State Taxation. Federal and state governments may propose tax initiatives that affect us. We are unable to determine what effect, if any, future proposals would have on product demand or our results of operations.

     Environmental Regulation. Exploration, development and production of oil and gas, including operation of saltwater injection and disposal wells, are subject to various federal, state and local environmental laws and regulations. Such laws and regulations can increase the costs of planning, designing, installing and operating oil and gas wells. Our domestic activities are subject to a variety of environmental laws and regulations, including, but not limited to:

• Oil Pollution Act of 1990 (OPA);

• Clean Water Act (CWA);

• Comprehensive Environmental Response, Compensation and Liability Act (CERCLA);

• Resource Conservation and Recovery Act (RCRA);

• Clean Air Act (CAA); and

• Safe Drinking Water Act (SDWA).

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     Our domestic activities are also controlled by state regulations promulgated under comparable state statutes. We also are subject to regulations governing the handling, transportation, storage and disposal of naturally occurring radioactive materials that are found in our oil and natural gas operations. Civil and criminal fines and penalties may be imposed for non-compliance with these environmental laws and regulations. Additionally, these laws and regulations require the acquisition of permits or other governmental authorizations before undertaking certain activities, limit or prohibit other activities due to protected areas or species, can impose certain substantial liabilities for the cleanup of pollution, impose certain reporting requirements, and can require substantial expenditures for compliance.

     Under OPA and CWA, our release of oil and hazardous substances into or upon waters of the United States, adjoining shore lines and wetlands, and offshore areas could result in our being held responsible for the (1) costs of remediating a release, (2) administrative and civil penalties and/or criminal fines, (3) OPA specified damages such as loss of use, and for natural resource damages. The extent of liability could be extensive depending upon the circumstances of the release. Liability can be joint and several and without regard to fault. The CWA also may impose permitting obligations for certain discharges of pollutants and requirements to develop Spill Prevention Control and Countermeasure Plans and Facility Response Plans to address potential discharges of oil into or upon waters of the United States and adjoining shorelines.

     CERCLA and comparable state statutes, also known as Superfund laws, can impose joint, several and retroactive liability, without regard to fault or the legality of the original conduct, on specified classes of persons for the release of a “hazardous substance” into the environment. In practice, cleanup costs are usually allocated among various responsible parties. Liability can arise from conditions on properties where operations are conducted and/or from conditions at third-party disposal facilities where wastes from operations were sent. Although CERCLA, as amended, currently exempts petroleum (including oil, natural gas and NGLs) from the definition of hazardous substance, some similar state statutes do not provide such an exemption. Additionally, our operations may involve the use or handling of other materials that may be classified as hazardous substances under CERCLA and similar state statutes. We cannot assure you that the exemption will be preserved in any future amendments of the act.

     RCRA and comparable state and local programs impose requirements on the management, including treatment, storage and disposal, of hazardous and nonhazardous solid wastes. Although we believe we have utilized operating and waste disposal practices that were standard in the industry at the time, hydrocarbons or other solid wastes may have been disposed or released on or under the properties owned or leased by us or on or under locations where such wastes have been taken for disposal. In addition, many of these properties have been owned or operated by third parties. We had no control over such parties’ treatment of hydrocarbons or other solid wastes and the manner in which such substances may have been disposed or released. We generate hazardous and nonhazardous solid waste in our routine operations. From time to time, proposals have been made that would reclassify certain oil and natural gas wastes, including wastes generated during pipeline, drilling and production operations, as “hazardous wastes” under RCRA, which would make these solid wastes subject to much more stringent handling, transportation, storage, disposal and clean-up requirements. This development could have a significant impact on our operating costs. While state laws vary on this issue, state initiatives to further regulate oil and natural gas wastes could have a similar impact on our operations.

     Oil and natural gas exploration and production, and possibly other activities, have been conducted at the majority of our properties by previous owners and operators. Materials from these operations remain on some of the properties and in some instances require remediation. In some instances we have agreed to indemnify the sellers of producing properties from whom we have acquired reserves against certain liabilities for environmental claims associated with the properties. We do not believe the costs to be incurred by us for compliance and remediating previously or currently owned or operated properties will be material, but we cannot guarantee that potential costs would not result in material expenditures.

     If in the course of our routine oil and natural gas operations, surface spills and leaks, including casing leaks of oil or other materials occur, we may incur penalties and costs for waste handling, remediation and third-party actions for damages. Notwithstanding our lack of control over wells owned by us but operated by others, the failure of the operator to comply with applicable environmental regulations may, in certain circumstances, be attributable to us and may create legal liabilities for us.

     We do not anticipate that we will be required in the near future to expend amounts that are material in relation to our total capital expenditures program by reason of environmental laws and regulations, but inasmuch as these laws and regulations are frequently changed and interpreted, we are unable to predict the ultimate cost of compliance. We cannot assure you that more stringent laws and regulations protecting the environment will not be adopted or that we will not incur material expenses in complying with environmental laws and regulations in the future. If substantial liabilities to third parties or governmental entities were incurred, the payment of such claims may reduce or eliminate the funds available for project investment or result in loss of our properties. Although we maintain insurance coverage we consider to be customary in the industry, we are not fully insured against all of these risks, either because

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insurance is not available or because of high premium costs. Accordingly, we may be subject to liability or may lose substantial portions of properties due to hazards that cannot be insured against or have not been insured against due to prohibitive premium costs or for other reasons. The imposition of any of these liabilities on us may have a material adverse effect on our financial condition and results of operations.

     OSHA and Other Regulations. We are subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”) and comparable state statutes. The OSHA hazard communication standard, the EPA community right-to-know regulations under the Title III of CERCLA and similar state statutes require us to organize and/or disclose information about hazardous materials used or produced in our operations. We believe that we are in substantial compliance with these applicable requirements and with other OSHA and comparable requirements.

EMPLOYEES

     As of April 10, 2003, we employed approximately 40 full-time employees. None of our employees are represented by unions or covered by collective bargaining agreements. To date, we have not experienced any strikes or work stoppages due to labor problems, and we consider our relations with our employees to be good. As needed, we also utilize the services of independent consultants on a contract basis.

RISK FACTORS

     There are various risks involved in owning our common stock, including those described below.

Industry Risks

Continued Financial Success Depends on Our Ability to Acquire Additional Reserves in the Future

     Our future success as an oil and gas producer depends upon our ability to find, develop and acquire additional oil and gas reserves that are profitable. If we are unable to conduct successful development activities or acquire properties containing proved reserves, our proved reserves will generally decline as reserves are produced.

We Face Numerous Drilling Risks in Finding Commercially Productive Oil and Gas Reservoirs

     Our drilling will involve numerous risks, including the risk that no commercially productive oil or gas reservoirs will be encountered. We may incur significant expenditures for the identification and acquisition of properties and for the drilling and completion of wells. The cost of drilling, completing and operating wells is often uncertain, and drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including unexpected drilling conditions, pressure or irregularities in formations, equipment failures or accidents, weather conditions and shortages or delays in the delivery of equipment. In addition, any use by us of 3D seismic and other advanced technology to explore for oil and gas requires greater pre-drilling expenditures than traditional drilling methodologies.

Company Risks

Our High Levels of Indebtedness May Limit Our Financial and Operating Flexibility and We May Not Be Able to Repay Our Indebtedness

     At December 31, 2002, our debt-to-equity ratio was 1.89:1.00. We may incur additional indebtedness in the future as we continue to execute our acquisition and exploration strategy and as a means of refinancing our existing capital structure.

     Our long-term debt as of December 31, 2002, was $26.9 million. The level of indebtedness will have important effects on our future operations, including:

• A substantial portion of our cash flow will be used to pay interest and principal on debt and will not be available for other purposes.

• Covenants contained in our revolving credit facility with Bank of Texas, N.A. (the “Texas Facility”) will require us to meet certain financial tests (including a debt coverage ratio of 1.25 to 1.0 and a current ratio of 1.0 to 1.0) and other

7

	restrictive covenants, such as an inability to sell properties mortgaged to our lender if the sale of such properties exceeds 10% of our borrowing base or an inability to incur any indebtedness in an amount greater than $1,000,000 other than indebtedness incurred in the ordinary course of business, may affect our flexibility in planning for, and reaction to, changes in our business, including possible acquisition activities.
•	A default under either of our current credit facilities would permit the lender to accelerate repayments of the loan and to foreclose on the collateral securing the loan, including a substantial portion of our oil and gas properties.
•	Our ability to refinance existing debt or to obtain additional financing for capital expenditures and other purposes may be limited.
•	We may be more leveraged than our competitors, which may place us at a competitive disadvantage.
•	We may be unable to adjust rapidly to changing market conditions.

      Additionally, under one of our credit facilities, due to a change in direction by the lender and various technical defaults, we have agreed, among other items, to make principal payments of at least $400,000 on a monthly basis in subsequent months until the facility is paid in full. We are seeking to refinance this facility. However, no assurance can be given that we will be able to refinance this facility and if we are unable to do so, our cash flow will be impacted, along with our ability to fund our capital requirements and acquisitions of additional oil and gas interests. In addition, to the extent we are unable to refinance the facility, we may be required to sell our French properties to discharge this facility. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" for further information.

     These considerations may make us more vulnerable than a less-leveraged competitor in the event of a downturn in our business or general economic conditions.

A Large Percentage of Our Common Stock Is Owned by Our Officers and Directors and Such Stockholders May Control Our Business and Affairs

     At December 31, 2002, our officers and directors, as a group, held a beneficial interest in approximately 52% of our common stock (including shares issuable upon exercise of stock options for common stock, conversion of our Series A and A-1 Convertible Preferred Stock held by affiliates of certain directors and conversion of Madison’s amended and restated convertible debenture). The officers and directors control our business and affairs; due to their large ownership percentage, they may remain entrenched in their positions.

A Significant Portion of Our Operations is Conducted in France and Turkey and We Also Own Interests in Romania and Trinidad. Therefore, We Are Subject to Political, Economic Risks and other Uncertainties

     We have international operations and are subject to the following foreign issues and uncertainties that may adversely affect our operations:

• The risk of expropriation, nationalization, war, revolution, border disputes, renegotiation or modification of existing contracts, and import, export and transportation regulations and tariffs;

• Taxation policies, including royalty and tax increases and retroactive tax claims;

• Exchange controls, currency fluctuations and other uncertainties arising out of foreign government sovereignty over international operations;

• Laws and policies of the United States affecting foreign trade, taxation and investment;

• The possibility of being subjected to the exclusive jurisdiction of foreign courts in connection with legal disputes and the possible inability to subject foreign persons to the jurisdiction of courts in the United States; and

• The possibility of restrictions on repatriation of earnings or capital from foreign countries.

Our Growth Depends on our Ability to Obtain Additional Capital under Satisfactory Terms and Conditions

     Our growth requires substantial capital on a continuing basis. We may be unable to obtain additional capital under satisfactory terms and conditions. Thus, we may lose opportunities to acquire oil and gas properties and businesses. In addition, our pursuit of additional capital could result in incurring additional indebtedness or issuing and adding potentially dilutive equity securities. We also may utilize the capital currently expected to be available for our present operations. The amount and timing of our future capital requirements, if any, will depend upon a number of factors, including:

• Drilling costs;

• Transportation costs;

• Equipment costs;

• Marketing expenses;

• Oil and gas prices;

• Staffing levels and competitive conditions; and

• Any purchases or dispositions of assets.

     Our failure to obtain any required additional financing could materially and adversely affect our growth, cash flow and earnings.

8

Our Marketing of Oil and Gas Production Principally Depends upon Facilities Operated by Others, and These Operations May Change and Have a Material Adverse Effect on our Marketing

     Our marketing of oil and gas production principally depends upon facilities operated by others. The operations of those facilities may change and have a material adverse effect on our marketing of oil and gas production. In addition, we rely upon third parties to operate many of our properties and may have no control over the timing, extent and cost of development and operations. As a result of these third-party operations, we cannot control the timing and volumes of production.

We May Not Be Able to Renew Our Permits

     We do not hold title to properties in France, Turkey or Romania, but have exploration and production permits granted by the respective governments. There can be no assurances that we will be able to renew any of these permits that expire.

We May Not Have Production to Offset Hedges and We May Not Benefit From Price Increases by Hedging

     We may, from time to time, reduce our exposure to the volatility of oil and gas prices by hedging a portion of our production. In a typical hedge transaction, we will have the right to receive from the counterparty to the hedge the excess of the fixed price specified in the hedge over a floating price based on a market index, multiplied by the quantity hedged. If the floating price exceeds the fixed price, we will be required to pay the counterparty this difference multiplied by the quantity hedged. In such case, we will be required to pay the difference regardless of whether we have sufficient production to cover the quantities specified in the hedge. Significant reductions in production at times when the floating price exceeds the fixed price could require us to make payments under the hedge agreements even though such payments are not offset by sales of production. Hedging also could prevent us from receiving the full advantage of increases in oil or gas prices above the fixed amount specified in the hedge.

Investment Risks

Due to the Restrictions Placed on Us by Our Credit Facility and our Outstanding Shares of Preferred Stock, We Do Not Expect to Pay Cash Dividends in the Near Future

     From time to time, we have paid cash dividends on our common stock. However, we do not anticipate paying cash dividends on our common stock in the foreseeable future. Our credit facilities and our outstanding shares of preferred stock restrict our ability to pay dividends on our common stock. Therefore, our common stock is not a suitable investment for persons requiring current income.

GLOSSARY OF SELECTED OIL AND GAS TERMS

     “2D” or “2D Seismic.” An exploration method of sending energy waves or sound waves into the earth and recording the wave reflections to indicate the type, size, shape, and depth of subsurface rock formations. 2D seismic provides two-dimensional pictures.

     “3D” or “3D Seismic.” An exploration method of sending energy waves or sound waves into the earth and recording the wave reflections to indicate the type, size, shape, and depth of subsurface rock formations. 3D seismic provides three-dimensional pictures.

     “Bbl.” One stock tank barrel, or 42 U.S. gallons liquid volume, used herein in reference to crude oil or other liquid hydrocarbons.

     “BBL/D.” Barrels per day.

     “Bcf.” One billion cubic feet of natural gas.

     “BOE.” Barrel of oil equivalent converting six Mcf of natural gas to one barrel of oil.

     “DEVELOPMENT WELL.” A well drilled within the proved boundaries of an oil or natural gas reservoir with the intention of completing the stratigraphic horizon known to be productive.

     “DISCOUNTED PRESENT VALUE (PRETAX).” The present value of proved reserves is an estimate of the discounted future net cash flows from each property at December 31, 2002, or as otherwise indicated. Net cash flow is defined as net revenues less, after

9

deducting production and ad valorem taxes, future capital costs and operating expenses, but before deducting federal income taxes. The future net cash flows have been discounted at an annual rate of 10% to determine their “present value.” The present value is shown to indicate the effect of time on the value of the revenue stream and should not be construed as being the fair market value of the properties. In accordance with Securities and Exchange Commission rules, estimates have been made using constant oil and natural gas prices and operating costs at December 31, 2002, or as otherwise indicated.

     “DRY HOLE.” A development or exploratory well found to be incapable of producing either oil or natural gas in sufficient quantities to justify completion as an oil or natural gas well.

     “EXPLORATORY WELL.” A well drilled to find and produce oil or natural gas in an unproved area, to find a new reservoir in a field previously found to be productive of oil or natural gas in another reservoir, or to extend a known reservoir.

     “GROSS ACRES” or “GROSS WELLS.” The total number of acres or wells, as the case may be, in which a working or any type of royalty interest is owned.

     “KMS.” Kilometers.

     “MBbl.” One thousand Bbls.

     “MBOE.” One thousand BOE.

     “Mcf.” One thousand cubic feet of natural gas.

     “MMBl.” One million Bbls of oil and other liquid hydrocarbons.

     “MMBOE.” One million BOE.

     “NET ACRES.” The sum of the fractional working or any type of royalty interests owned in gross acres.

     “PRODUCING WELL” or “PRODUCTIVE WELL.” A well that is producing oil or natural gas or that is capable of production.

     “PROVED DEVELOPED RESERVES.” The oil and natural gas reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Additional oil and natural gas expected to be obtained through the application of fluid injection or other improved recovery techniques for supplementing the natural forces and mechanisms of primary recovery should be included as “proved developed reserves” only after testing by a pilot project or after the operation of an installed program has confirmed through production response that increased recovery will be achieved.

     “PROVED RESERVES.” The estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

     “PROVED UNDEVELOPED RESERVES.” The oil and natural gas reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage are limited to those drilling units offsetting productive units that are reasonably certain of production when drilled. Proved reserves for other undrilled units can be claimed only where it can be demonstrated with certainty that there is continuity of production from the existing productive formation. Under no circumstances should estimates for proved undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery techniques is contemplated, unless such techniques have been proved effective by actual tests in the area and in the same reservoir.

     “ROYALTY INTEREST.” An interest in an oil and natural gas property entitling the owner to a share of oil and natural gas production free of production costs.

     “STANDARDIZED MEASURE.” Under the Standardized Measure, future cash flows are estimated by applying year-end prices, adjusted for fixed and determinable escalations, to the estimated future production of year-end proved reserves. Future cash inflows are reduced by estimated future production and development costs based on period-end costs to determine pretax cash inflows. Future

10

income taxes are computed by applying the statutory tax rate to the excess inflows over a company’s tax basis in the associated properties.

     Tax credits, net operating loss carryforwards and permanent differences also are considered in the future tax calculation. Future net cash inflows after income taxes are discounted using a 10% annual discount rate to arrive at the Standardized Measure.

     “UNDEVELOPED ACREAGE.” Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.

     “WORKING INTEREST.” The operating interest that gives the owner the right to drill, produce and conduct operating activities on the property and a share of production, subject to all royalties, overriding royalties and other burdens, and to all exploration, development and operational costs including all risks in connection therewith.

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ITEM 2. PROPERTIES.

INTERNATIONAL

     FRANCE

     We own and operate five producing oil fields in the Paris Basin, France. Four of those are located within the Neocomian Field complex and one in the Charmottes area.

     NEOCOMIAN FIELDS

     Pursuant to two production permits, we own a 100% working interest in the Neocomian Fields, a group of four oil accumulations located approximately 120 kilometers southeast of Paris. The Chateau Renard Field was discovered in 1958, Chuelles and St. Firmin-des-Bois in 1961 and Courtenay in 1964. The property currently has 78 producing oil wells. As of December 31, 2002, the Neocomian Fields had net proved reserves of 9,847 MBbl.

     CHARMOTTES

     We own a 100% working interest in the Charmottes Field, located 60 kilometers southeast of Paris. The property has nine oil wells of which eight are currently producing. The Charmottes Field was initially developed following the discovery well drilled in 1984. As of December 31, 2002, the Charmottes Field had net proved reserves of 1,396 MBbl.

     TURKEY

     In Turkey, we have interests in the Zeynel and Cendere Fields. We also hold interests in 35 exploration licenses in four other geographic regions of Turkey totaling 4.1 million gross acres (2.7 million net).

     ZEYNEL

     We have an 8.5% royalty interest in the Zeynel Field, located in south-central Turkey, with net proved reserves of 70 MBbl at December 31, 2002. The Zeynel #15 development well was drilled and completed in 2002. In late 2002, the East Hasancik-1 well was drilled by the operator on a new field in the Zeynel permit. The well was an oil discovery and is expected be deepened to other objectives in 2003. We hold a 6.75% royalty interest in the new field.

     CENDERE

     We have an approximate 19.6% working interest in the Cendere Field, that is located in central Turkey. The property has 16 oil wells currently producing. We had net proved reserves of 902 MBbl in the Cendere Field as of December 31, 2002. The Cendere 19 well was drilled and completed as a producer in 2002. A 3D seismic survey is planned for this field in 2003 to identify new drilling locations.

     BLACK SEA PERMITS

     We are operator and hold a 49% working interest in eight permits covering 962,000 gross acres (471,000 net). During 2002, we completed a seismic study covering 1,275 KMS of 2D Seismic data over our exploration licenses in the Black Sea. Based on the interpretation of the seismic data, we plan to drill two wells during early 2004.

     CENTRAL AND SOUTHEAST EXPLORATION PERMITS

     We hold 26 exploration licenses in the central and southeast portions of Turkey. A number of producing fields in Iran and Iraq trend in a north by northwesterly direction and wrap into southern Turkey through the area encompassing many of our exploration permits. As of December 31, 2002, there were no net reserves for the land covered by the Central and Southeast Exploration Permits.

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     THRACE BASIN PERMITS

     In the Thrace Basin, located in the European portion of Turkey, we have a 50% interest in three exploration permits and a 25% interest in one permit. The Thrace Basin has shown potential for natural gas. In this part of the country, gas is productive from shallow depths. With a pipeline through the region from Bulgaria to Istanbul and gas-fired power plants on the coast along the Marmara Sea, we could benefit from the area’s existing infrastructure. Based on the interpretation of the data from a previous seismic survey, we drilled two wells during 2002. The first well was dry, and the second awaits completion of testing. As of December 31, 2002, there were no net reserves for the land covered by the Thrace Basin Permits.

     ROMANIA

     In early 2003, we expanded our international portfolio when the Romanian government awarded the company a concession for the Viperesti Block in exchange for a staged work commitment. We are a 100% owner and operator of the block that lies in an oil-rich region in east-central Romania in the southeastern foothills of the Carpathian Mountains. Viperesti, which spans 324,000 acres, is surrounded by and on trend with many sizable oil fields to the southwest and northeast. The block is prospective in the Tertiary formations at depths ranging from 4,500-6,000 feet.

     During a five-year exploration period, we plan to acquire and assimilate geological and geophysical data, analyze seismic information and re-enter one of several previously drilled wells on the block. Subsequently, we could drill one or more exploration wells.

     TRINIDAD, WEST INDIES

     In Trinidad, all of our operations are conducted by and licenses are held through Trinidad Exploration and Development, Ltd. (“TED”), of which we are now a 11.28% owner. During late 2002, TED drilled the Rapso-1 well on Trinidad’s Southwest Peninsula Block, exploring the sands in the Tertiary Morne L’Enfer, Forest and Cruse formations. Work on the Rapso-1 well has been suspended and is waiting for further testing. Toreador has determined not to participate in future exploration on the block. Consequently, Toreador’s interest in TED has been diluted to 11.28% and will be diminished further as TED pursues its drilling program.

     The Rapso-1 is an oil prospect that explored the sands in the Tertiary Morne L’Enfer, Forest, and Middle and Lower Cruse formations. Work on the Rapso-1 has been suspended, and the well awaits testing. Additional drilling on the block is under evaluation.

     The Southwest Peninsula Block comprises about 45,000 prospective acres onshore and offshore southwest Trinidad. It is about nine miles from the Venezuelan coast and on trend with sizable oil fields in Venezuela and onshore Trinidad. TED is operator of the license area and holds a 72.5% working interest in the block. The Petroleum Company of Trinidad & Tobago Ltd., the Trinidadian national oil company, holds the remaining 27.5% interest.

DOMESTIC

     We own perpetual oil and gas mineral and royalty interests in approximately 2,643,000 gross (1,368,000 net) acres primarily located in Alabama, Arkansas, California, Kansas, Michigan, Louisiana, Mississippi and Texas. The majority of mineral leasing activity occurs on the acreage we own in Mississippi and Texas.

     We also hold working interests in 927 gross wells (53 net) primarily in Texas, Oklahoma, New Mexico, Kansas, Louisiana, and Arkansas.

     We are participating in the completion of the Walton Gas Unit 2-2 well located on the 1,000-acre Walton Gas Unit prospect. Part of the larger Bethel Dome Project in Anderson County in east Texas, the exploratory well has been drilled to a total depth of 10,100 feet and producing casing set to total depth. Completion operations, including flow testing, continue. Toreador has a 5.86% interest in the well and any subsequent offset development-well locations.

     We continued our participation in the development of the Silver Spur (Tannehill) Field located in Dickens County, Texas on company owned minerals. The Hollis R. Sullivan Inc. Pitchfork-Toreador “22” No. 6 well was successfully drilled and completed as an oil well. Early in 2003 we also participated in the drilling and completion of the Hollis R. Sullivan Inc. Pitchfork-Toreador “22” No. 7 well. This brings the number of producing wells in field to nine. Toreador maintains a 9.375% working interest with a combined 16.875% revenue interest in the field.

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     In Oktibbeha County, Mississippi, there has been increased mineral-leasing activity on in the Black Warrior Basin’s Deep Knox gas play. Since the Maben Field was discovered in 1976, only one well was producing until additional wells were drilled in the late 1990’s. Now there are 11 producing wells in the Maben Field, the result of new seismic and drilling technology. Recent geologic studies show the Deep Knox play extends in a northwest/southeast trend, covering 11 additional counties in Mississippi and three counties in Alabama.

     In Jefferson Davis County, Mississippi, operators completed 13 wells on our mineral holdings in the Selma Chalk formation using new fracturing techniques, improving production from the Gwinville Field in 2002. We anticipate additional activity and higher production levels continuing in 2003 in this area where Toreador holds significant mineral interests.

     In West Texas, Toreador owns a 16.6% working interest on 6,000 gross acres where one well was successfully completed and a second well is being completed. The operator is using horizontal multi-lateral drilling techniques in the San Andres formation to expose more of the reservoir and increase total fluid recovery.

TITLE TO OIL AND GAS PROPERTIES

     INTERNATIONAL

     FRANCE

     We do not hold title to properties in France but have been granted exploration and production permits by the French government. We have two French exploration permits, Nangis and Courtenay. There are no proved reserves associated with these permits. The Nangis permit expires in 2005, and the Courtenay permit expires in 2006. The French exploration permits have minimum financial requirements that must be met during their terms. If such obligations are not met, the permits could be subject to forfeiture.

     The French production permits covering five producing oil fields in the Paris Basin follow:

					Post-Expiration		Percent of Proved
	Permit Expiration		Total Proved		Proved Reserves		Reserves
PROPERTY	Year		Reserves (MBbls)		(MBbls)		Post-Expiration
Neocomian Fields		2011		9,848		6,061		61.55	%
Charmottes Field		2013		1,396		348		24.93	%

     Although the French government has the option to renew production permits, we believe it will renew such production permits so long as we, the license holder, demonstrate financial and technical capabilities and establish the studies used in defining the work schedule. However, there can be no assurance that we will be able to renew any permits that expire.

     TURKEY

     We do not hold title to properties in Turkey but have been granted exploitation leases and exploration licenses by the Turkish government:

						Post-Expiration		Percent of Proved
		Permit Expiration		Total Proved		Proved Reserves		Reserves
PROPERTY		Year		Reserves (MBbls)		(MBbls)		Post-Expiration
Exploitation leases
	Zeynel		2010		70		6		8.57	%
	Cendere		2011		902		181		20.09	%
Exploration licenses
	Central and Southeast Exploration	2005 & 2006			–		–		N/A
	Black Sea	2005			–		–		N/A
	Thrace Basin	2003 & 2004			–		–		N/A

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     Under Turkish law, “exploitation leases” are generally granted for a period of 20 years and may be renewed upon application for two additional ten-year periods. “Exploration licenses” are generally granted for four-year terms and may be extended for two additional two-year terms, provided that drilling obligations stipulated under Turkish law are satisfied. If an exploration license is extended for development as an exploitation lease, the period of the exploration license(s) is counted towards the 20-year exploitation lease.

     ROMANIA

     In early 2003, we expanded our international portfolio when the Romanian government awarded the company a concession for the Viperesti Block in exchange for a staged work commitment. We are a 100% owner and operator of the block that lies in an oil-rich region in east-central Romania in the southeastern foothills of the Carpathian Mountains. Viperesti, which spans 324,000 acres, is surrounded by and on trend with many sizable oil fields to the southwest and northeast. The block is prospective in the Tertiary formations at depths ranging from 4,500-6,000 feet.

     During a five-year exploration period, we plan to acquire and assimilate geological and geophysical data, analyze seismic information and re-enter one of several previously drilled wells on the block. Subsequently, we could drill one or more exploration wells.

     DOMESTIC

     We have acquired interests in producing and non-producing acreage in the form of working interests, perpetual fee mineral interests, royalty interests and overriding royalty interests. Substantially all of our property interests are leased to third parties. The leases grant the lessee the right to explore for and extract oil and gas from specified areas. Consideration for a lease usually consists of a lump-sum payment (i.e., bonus) and a fixed annual charge (i.e., delay rental) prior to production (unless the lease is paid up) and, once production has been established, a royalty based generally upon the proceeds from the sale of oil and gas. Once wells are drilled, a lease generally continues so long as production of oil and gas continues. In some cases, leases may be acquired in exchange for a commitment to drill or finance the drilling of a specified number of wells to predetermined depths. We receive annual delay rentals from lessees of certain properties in order to prevent the leases from being terminated. Title to leasehold properties is subject to royalty, overriding royalty, carried, net profits and other similar interests and contractual arrangements customary in the oil and gas industry, and to liens incident to operating agreements, liens relating to amounts owed to the operator, liens for current taxes not yet due and other encumbrances.

     As is common industry practice, we conduct little or no investigation of title at the time we acquire undeveloped properties, other than a preliminary review of local mineral records. However, we do conduct title investigations and, in most cases, obtain a title opinion of local counsel before commencement of drilling operations. We believe that the methods we utilize for investigating title prior to acquiring any property are consistent with practices customary in the oil and gas industry and that such practices are adequately designed to enable us to acquire good title to such properties. Some title risks, however, cannot be avoided, despite the use of customary industry practices.

     We own oil and gas mineral and royalty interests in approximately 16,000 gross acres in Louisiana. Unlike the other states where we own perpetual minerals, the laws in Louisiana are such that the minerals prescribe to the surface owner after 10 years have passed without any production or drilling on said lands. Because we do not own the surface rights in any of the properties that were acquired in December 1998, we do not maintain many of our mineral rights if production ceases for 10 years.

     Our properties are generally subject to:

• Customary royalty and overriding royalty interests;

• Liens incident to operating agreements and

• Liens for current taxes and other burdens and minor encumbrances, easements and restrictions.

     We believe that none of these burdens either materially detracts from the value of our properties or materially interfere with their use in the operation of our business. Substantially all of our domestic properties are pledged as collateral under the Texas Facility.

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OIL AND GAS RESERVES

     The following table sets forth information about our estimated net proved reserves at December 31, 2002 and 2001. LaRoche Petroleum Consultants, Ltd., an independent petroleum engineering firm in Dallas, Texas, prepared the estimates of proved developed reserves, proved undeveloped reserves and discounted present value (pretax). We prepared the estimate of standardized measure of proved reserves in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 69, “Disclosures about Oil and Gas Producing Activities.” No reserve reports have been provided to any governmental agency.

			December 31,
			2002		2001
US
Proved developed:
	Oil (MBbls)			1,749		1,965
	Gas (MMcf)			11,987		12,923
		Total (MBOE)		3,747		4,119
Proved undeveloped:
	Oil (MBbls)			138		41
	Gas (MMcf)			135		–
		Total (MBOE)		161		41
Discounted present value at 10% (pretax) (in thousands)			$	45,939	$	28,658
Standardized measure of proved reserves (in thousands)			$	34,618	$	25,759
FRANCE
Proved developed:
	Oil (MBbls)			7,388		5,426
Proved undeveloped:
	Oil (MBbls)			11,243		2,846
Discounted present value at 10% (pretax) (in thousands)			$	73,435	$	23,727
Standardized measure of proved reserves (in thousands)			$	52,843	$	20,887
TURKEY
Proved developed:
	Oil (MBbls)			766		652
Proved undeveloped:
	Oil (MBbls)			972		284
Discounted present value at 10% (pretax) (in thousands)			$	11,230	$	4,248
Standardized measure of proved reserves (in thousands)			$	7,583	$	2,928
COMBINED
Proved developed:
	Oil (MBbls)			9,903		8,043
	Gas (MMcf)			11,987		12,923
		Total (MBOE)		11,901		10,197
Proved undeveloped:
	Oil (MBbls)			12,353		3,171
	Gas (MMcf)			135		–
		Total (MBOE)		12,376		3,171
Discounted present value at 10% (pretax) (in thousands)			$	130,604	$	56,633
Standardized measure of proved reserves (in thousands)			$	95,044	$	49,574

     Reserves were estimated using oil and gas prices and production and development costs in effect on December 31, 2002 and 2001, without escalation. The reserves were determined using both volumetric and production performance methods. France and Turkey have oil reserves only. Proved reserves are those estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. THE VALUES REPORTED MAY NOT NECESSARILY REFLECT THE FAIR MARKET VALUE OF THE RESERVES.

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     For additional information concerning our oil and gas reserves and estimates of future net revenues attributable thereto, see Note 18 of the Notes to the Consolidated Financial Statements.

PRODUCTIVE WELLS

     The following table sets forth our gross and net interests in productive oil and gas wells as of December 31, 2002. Productive wells include wells currently producing or currently capable of production.

	Gross (1)						Net (2)
	OIL		GAS		TOTAL		OIL		GAS		TOTAL
United States		648		279		927		22.41		30.36		52.77
France		87		–		87		87.00		–		87.00
Turkey		15		–		15		2.64		–		2.64

(1)	“Gross” refers to all wells in which we have a working interest.
(2)	“Net” refers to the aggregate of our percentage working interest in gross wells before royalties, before or after payout, as appropriate.

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ACREAGE

     The following table sets forth the developed and undeveloped acreage attributable to our ownership as of December 31, 2002.

	Developed Acreage				Undeveloped Acreage				Total Acreage
	Gross		Net		Gross		Net		Gross		Net
United States		259,479		37,702		69,352		33,235		328,831		70,937
France		60,689		60,689		283,923		283,923		344,612		344,612
Turkey		61,387		30,854		4,022,047		2,633,971		4,083,434		2,664,825
Romania		–		–		324,000		324,000		324,000		324,000

     Undeveloped acreage includes only those leased acres on which wells have not been drilled or completed to permit the production of commercial quantities of oil and gas regardless of whether or not the acreage contains proved reserves.

DRILLING ACTIVITIES

				Year ended December 31,
				2002				2001				2000
				Gross (1)		Net (2)		Gross (1)		Net (2)		Gross (1)		Net (2)
UNITED STATES Development:
		Gas (3)			–		–		6		0.96		5		0.29
		Oil (4)			1		0.09		4		0.48		–		–
		Abandoned (5)			1		0.20		4		0.85		2		0.19
			Total		2		0.29		14		2.29		7		0.48
	Exploratory
		Gas (3)			1		0.11		6		1.19		3		0.38
		Oil (4)			1		0.25		2		0.45		2		0.45
		Abandoned (5)			2		0.33		13		1.96		3		0.45
			Total		4		0.69		21		3.60		8		1.28
TURKEY (6)(7) Development:
		Oil (4)			1		0.20		–		–		–		–
		Abandoned (5)			–		–		–		–		–		–
			Total		1		0.20		–		–		–		–
	Exploratory
		Oil (4)			–		–		–		–		–		–
		Abandoned (5)			1		0.50		–		–		–		–
			Total		1		0.50		–		–		–		–

(1)	“Gross” is the number of wells in which we have a working interest.
(2)	“Net” is the aggregate obtained by multiplying each gross well by our after payout percentage working interest.
(3)	“Gas” means gas wells that are either currently producing or are capable of production.
(4)	“Oil” means producing oil wells.
(5)	“Abandoned” means wells that were dry when drilled and were abandoned without production casing being run.
(6)	We drilled no wells in France during 2002.
(7)	Only oil wells were drilled in Turkey.

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NET PRODUCTION, UNIT PRICES AND COSTS

     The following table summarizes our oil, natural gas and natural gas liquids production, net of royalties, for the periods indicated. It also summarizes calculations of our total average unit sales prices and unit costs. Because we consummated our acquisition of Madison on December 31, 2001, the table excludes information related to Madison’s operations for 2001 and 2000.

			Year ended December 31,
			2002								2001		2000
			United States		France		Turkey		Total
Production:
	Oil (Bbls)			238,210		415,165		113,799		767,174		295,902		273,706
	Daily average (Bbls/Day)			653		1,137		312		2,102		811		750
	Gas (Mcf)			1,812,203		—		—		1,812,203		1,781,460		1,318,714
	Daily average (Mcf/Day)			4,965		—		—		4,965		4,881		3,613
	Daily average (BOE/Day)			1,480		1,137		312		2,929		1,624		1,352
Unit prices:
	Average oil price ($/Bbl)		$	22.59	$	22.14	$	20.85	$	22.08	$	23.39	$	28.45
	Average gas price ($/Mcf)			3.10		—		—		3.10		3.76		3.94
	Average equivalent price ($/BOE)		$	20.34	$	22.14	$	20.85	$	21.09	$	22.97	$	26.67
Unit costs ($/BOE):
	Lease operating		$	4.79	$	7.80	$	7.52	$	6.25	$	5.53	$	4.71
	Exploration and acquisition			4.14		—		—		2.09		4.42		0.63
	Depreciation, depletion and amortization			5.88		3.14		4.86		4.70		8.28		4.94
	Impairment of oil and gas properties			0.98		—		—		0.49		2.21		–
	General and administrative			10.00		2.76		10.28		7.22		4.74		4.61
	Interest and other			8.62		3.02		0.66		5.59		2.15		2.86
		Total	$	34.41	$	16.72	$	23.32	$	26.34	$	27.33	$	17.75

PRESENT ACTIVITIES

     For the period January 1, 2003 through April 10, 2003, we did not participate in drilling any exploratory wells.

OFFICE LEASE

     We occupy approximately 18,746 square feet of office space at 4809 Cole Avenue, Suite 108, Dallas, Texas 75205 under a lease from Chalk Stream Properties, L.P. We also occupy approximately 1,377 square feet of office space at 13/15 Boulevard de la Madeleine, 75001 Paris, France leased from Societe la Madeleine, and approximately 621 square feet of office space at 9400 N. Central Expressway, Suite 1209, Dallas, Texas 75231. Total rental expense for 2002 was approximately $362,000.

INTERNET ADDRESS

     We make available electronically, free of charge through our Internet website address (www.toreador.net), our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed with the Securities and Exchange Commission (the "SEC") pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file such material with the SEC. These reports are directly accessible on the Internet at www.sec.gov/edgar/searchedgar/webusers.htm.

ITEM 3. LEGAL PROCEEDINGS.

     Karak Petroleum. Madison and its wholly-owned subsidiary, Trans-Dominion Holdings Ltd., were named as defendants in a complaint filed in Alberta, Canada, in 1999. The complaint arose from a dispute between Karak Petroleum, a subsidiary of Trans-Dominion Holdings, and the operator of an exploratory well in Pakistan in 1994 in which Karak was a joint interest partner. The plaintiffs alleged that they were owed approximately $500,000. On August 7, 2002, we reached an agreement with the plaintiffs in this matter. Under the terms of the agreement, we agreed to pay the plaintiffs $400,000 for full release of liability. Written documentation reflecting the foregoing was finalized on August 29, 2002. The agreement required that we remit the $400,000 in two installments. The first installment of $50,000 was paid on August 29, 2002, and the remaining $350,000 was recorded as a liability and was to be paid by February 3, 2003. In February 2003, the plaintiffs agreed to accept the $350,000 in monthly installments payable at the beginning of each month beginning February 2003.

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     Turkish Registered Capital. Under the existing Petroleum Law of Turkey, capital which is invested by foreign companies for projects such as oil and gas exploration can be registered with the General Directorate of Petroleum Affairs, thereby qualifying for protection against adverse changes in the exchange rate between the time of the initial investment and the time such capital is repatriated out of Turkey. Since 1997 the Turkish government has suspended such protection for repatriated capital. As holder of more than $50 million of registered capital, we have filed suit in Turkey to attempt to restore the exchange rate protections afforded under the law. No amounts are accrued related to this contingency. Pursuant to the terms of the acquisition agreement, holders of Madison common stock have the right to receive, in cash or our common stock, 30% of certain potential payments that may be received from the Turkish government for the protection of repatriated capital. In March 2002 a lower level court ruled in favor of Madison. The ruling was subject to automatic appeal that was heard in December 2002. We are currently awaiting the ruling on the appeal. However, we cannot predict the outcome of this matter.

     Trinidad Arbitration. At December 31, 2001, we held a 25% interest in Trinidad Exploration and Development, Ltd. (“TED”), a Trinidad company engaged in oil and gas exploration. Until August 2000, TED was a wholly-owned subsidiary of Madison, at which time Madison sold a 75% interest to another company. Under the terms of the sale, the buyer was required to fund $4.0 million in costs of drilling and exploration before Madison was required to contribute additional amounts in accordance with its 25% shareholding. During 2001, TED was primarily engaged in a seismic program to conduct exploration on a license interest in the Southwest Peninsula of Trinidad. In late August, Madison received an initial billing for capital contributions to fund the ongoing exploration. The operator claimed, however, that Madison did not make timely payments and that Madison’s interest in TED should be reduced from 25% to 12.5%. On September 18, 2002, we received a ruling from the American Arbitration Association related to this matter. The arbitrator ruled that certain payments by Toreador’s subsidiary were delinquent, and, according to the terms of the shareholders agreement, Toreador’s interest in TED has been reduced from 25% to 16.33%. Since the ruling, our interest has been further reduced to 11.28%, the result of our non-participation in certain capital and operating costs incurred by TED.

     From time to time, we are named as a defendant in other legal proceedings arising in the normal course of business. In our opinion, the final judgment or settlement, if any, that may be awarded with any suit or claim would not have a material adverse effect on our financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     None

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

     Our shares of common stock, par value $.15625 per share, are traded on the Nasdaq National Market System under the trading symbol “TRGL” and are traded on the Toronto Stock Exchange under the symbol “TRX”. The following table sets forth the high and low sale prices per share for the common stock for each quarterly period during the past two fiscal years as reported by Nasdaq based upon quotations that reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

2002	High		Low
First Quarter		4.69		3.75
Second Quarter		4.20		3.85
Third Quarter		4.04		3.00
Fourth Quarter		3.40		2.19

2001	High		Low
First Quarter		7.63		5.25
Second Quarter		6.62		5.47
Third Quarter		6.01		5.40
Fourth Quarter		5.75		3.65

HOLDERS AND CLOSING PRICE

     As of April 10, 2003, there were 9,337,517 shares of common stock outstanding and held of record by approximately 890 holders (inclusive of those brokerage firms, clearing houses, banks and other nominee holders, holding common stock for clients, with all such nominees being considered as one holder).

     The closing price of the common stock on the Nasdaq National Market System on April 10, 2003 was $2.85. The closing price on the Toronto Stock Exchange on April 10, 2003 was Canadian $4.17.

DIVIDENDS

     Dividends on the common stock may be declared and paid out of funds legally available when and as determined by our board of directors. We paid cash dividends totaling $52,000 during 2000. Our board of directors plans to continue our policy of holding and investing corporate funds on a conservative basis, and thus we do not anticipate paying cash dividends on our common stock in the foreseeable future. In addition, under the terms of the Texas Facility described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources,” we are prohibited from paying dividends on the common stock without prior consent from Bank of Texas, National Association (other than dividends payable in shares of common stock). The terms of our Series A Convertible Preferred Stock and our Series A-1 Convertible Preferred Stock prohibit us from paying dividends on the common stock without the approval of the holders of a majority of the then outstanding shares of the Series A Convertible Preferred Stock and the Series A-1 Convertible Preferred Stock.

     Dividends on our Series A Convertible Preferred Stock and our Series A-1 Convertible Preferred Stock are paid on a quarterly basis per the terms of each series. Cash dividends totaling $374,000, $360,000 and $360,000 were declared, and $270,000, $360,000 and $360,000 were paid for the years ended December 31, 2002, 2001 and 2000, respectively, on the Series A Convertible Preferred Stock. Cash dividends totaling $14,000 were declared for the year ended December 31, 2002 on the Series A-1 Convertible Preferred Stock. Future dividends will be paid in cash only at a rate of $110,813 per calendar quarter. We are prohibited from paying dividends over $100,000 on the preferred stock without the consent from Bank of Texas, National Association.

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SALES OF UNREGISTERED SECURITIES

     In the fourth quarter of 2002, we issued the following equity securities that were not registered under the Securities Act of 1933, as amended:

     On November 1, 2002, pursuant to a private placement we issued $925,000 of Series A-1 Convertible Preferred Stock to certain of our directors and entities controlled by certain of our directors.

     The Series A-1 Convertible Preferred Stock is governed by a certificate of designation. The Series A-1 Convertible Preferred Stock was sold for a face value of $25.00 per share, and pays an annual cash dividend of $2.25 per share that results in an annual yield of 9.0%. At the option of the holder, the Series A-1 Convertible Preferred Stock may be converted into common shares at a price of $4.00 per common share. The $4.00 conversion price was higher than the market price of our common stock at the time of issuance. The Series A-1 Convertible Preferred Stock is redeemable at our option, in whole or in part, at any time on or after November 1, 2007. The optional redemption price per share is the sum of (1) $25.00 per share of the Series A Convertible Preferred Stock plus (2) any accrued unpaid dividends, and such sum is multiplied by a declining multiplier. The multiplier is 105% until October 31, 2008, 104% until October 31, 2009, 103% until October 31, 2010, 102% until October 31, 2011, 101% until October 31, 2012, and 100% thereafter. In connection with the securities purchase agreement, the parties entered into a registration rights agreement effective November 1, 2002, among Toreador and the persons party thereto which provides for the registration of the common stock issuable upon conversion of the Series A-1 Convertible Preferred Stock.

     The sale of the Series A-1 Convertible Preferred Stock was effected in reliance upon the exemption from securities registration afforded by the provisions of Section 4(2) of the Securities Act of 1933, as amended, and Regulation D as promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended.

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ITEM 6. SELECTED FINANCIAL DATA.

     The following table summarizes certain selected financial data with respect to our financial condition and results of operations for the periods indicated. The selected financial data should be read in conjunction with the financial statements and related notes set forth in “Item 8. Financial Statements and Supplementary Data” of this Part II.

				Year ended December 31,
				1998			1999			2000			2001			2002
				(in thousands, except per share data)
INCOME STATEMENT DATA:
	Revenues:
		Oil and gas sales		$	1,969		$	4,259		$	13,164		$	13,952		$	23,069
		Gain (loss) on commodity derivatives			—			—			(135	)		1,143			(4,044	)
		Lease bonuses and rentals			168			463			472			596			812
			Total revenues		2,137			4,722			13,501			15,691			19,837
	Costs and expenses:
		Lease operating			583			699			2,325			3,280			6,680
		Exploration and acquisition			651			405			309			2,619			2,234
		Depreciation, depletion and amortization			514			1,262			2,439			4,908			5,034
		Impairment of oil and gas properties			—			14			—			1,309			529
		General and administrative			1,000			1,584			2,273			2,808			7,722
			Total costs and expenses		2,748			3,964			7,346			14,924			22,199
	Operating income (loss)				(611	)		758			6,155			767			(2,362	)
	Other income (expense)
		Equity in earnings of unconsolidated investments			—			—			(54	)		(206	)		(1,186	)
		Gain (loss) on sale of properties and other assets			—			852			408			(487	)		(2,129	)
		Loss on sale of marketable securities			—			(80	)		(54	)		(23	)		(14	)
		Interest and other income (expense)			171			109			71			163			(184	)
		Interest expense			(36	)		(794	)		(1,409	)		(1,277	)		(2,467	)
			Total other income (expense)		135			87			(1,038	)		(1,830	)		(5,980	)
	Net income (loss) before income taxes				(476	)		845			5,117			(1,063	)		(8,342	)
	Provision (benefit) for income taxes				(234	)		337			1,764			421			(2,235	)
	Net income (loss)				(242	)		508			3,353			(642	)		(6,107	)
	Dividend on preferred shares				20			360			360			360			374
	Income (loss) attributable to common shares			$	(262	)	$	148		$	2,993		$	(1,002	)	$	(6,481	)
	Basic income (loss) per share			$	(0.05	)	$	0.03		$	0.54		$	(0.16	)	$	(0.69	)
	Diluted income (loss) per share			$	(0.05	)	$	0.03		$	0.50		$	(0.16	)	$	(0.69	)
	Weighted average shares outstanding
		Basic			5,125			5,186			5,522			6,319			9,343
		Diluted			5,125			5,251			6,691			6,319			9,343
CASH FLOW DATA:
	Net cash provided by operating activities			$	277		$	763		$	6,144		$	8,856		$	6,362
	Capital expenditures for oil and gas property and equipment				(13,952	)		(9,208	)		(2,353	)		(11,979	)		(6,178	)
BALANCE SHEET DATA:
	Working capital (deficit)				1,988			439			3,178			(879	)		(7,569	)
	Oil and gas properties, net				16,210			24,424			34,630			78,028			71,872
	Total assets				19,782			26,456			40,325			94,454			86,853
	Long-term debt				7,880			14,667			15,244			36,874			26,860
	Stockholders’ equity				10,595			10,650			20,261			33,555			30,021

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     Certain of the matters discussed under the captions “Business,” “Properties,” “Legal Proceedings,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this annual report may constitute “forward-looking” statements for purposes of the 1933 Act, and the Securities Exchange Act of 1934 and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of us to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. When used in this report, the words “anticipates,” “estimates,” “plans,” “believes,” “continues,” “expects,” “projections,” “forecasts,” “intends,” “may,” “might,” “could,” “should,” and similar expressions are intended to be among the statements that identify forward-looking statements. Various factors that could cause the actual results, performance or achievements of us to differ materially from our expectations are disclosed in this report (“Cautionary Statements”), including, without limitation, those statements made in conjunction with the forward-looking statements included under the captions identified above and otherwise herein. All written and oral forward-looking statements attributable to us are expressly qualified in their entirety by the Cautionary Statements.

INTRODUCTION

     In Management’s Discussion and Analysis, we explain our general financial condition and the results of operations including:

• What factors affect our business;

• What our earnings and costs were in 2002, 2001, and 2000;

• Why those earnings and costs were different from the year before;

• Where our earnings came from;

• How all of this affects our overall financial condition;

• What our expenditures for capital projects were in 2000 through 2002 and what we expect them to be in 2003; and

• Where cash will come from to pay for future capital expenditures.

     As you read Management’s Discussion and Analysis, it may be helpful to refer to our Consolidated Statements of Operations on page F-4. These financial statements present the results of our operations for 2002, 2001 and 2000. In Management’s Discussion and Analysis, we analyze and explain the annual changes in the specific line items in the Consolidated Statements of Operations.

CRITICAL ACCOUNTING POLICIES

     The process of preparing financial statements in conformity with accounting principles generally accepted in the United States requires us to use estimates and assumptions to determine certain of our assets, liabilities, revenues and expenses. We base these estimates and assumptions upon the best information available to us at the time of the estimates or assumptions. Our estimates and assumptions could change materially as conditions within and beyond our control change. Accordingly, our actual results could differ materially from our estimates. The most significant estimates made by our management include future net cash flow for purposes of evaluating oil and gas properties for impairment, unrealized gains and losses on commodity derivatives, oil and gas sales receivable, and valuation of goodwill. The following is a discussion of our critical accounting policies and the related management estimates and assumptions necessary in determining the value of related assets or liabilities. A full description of all of our significant accounting policies is included in Note 2 to our Consolidated Financial Statements included in this annual report.

     We follow the successful efforts method of accounting for our oil and gas properties. Under this method, we capitalize the costs of successful wells and expense the costs of dry holes. Accordingly, our operations can be materially impacted if our drilling efforts are unsuccessful. Dry hole costs amounted to $1.1 million in 2002, $1.8 million in 2001 and $51,000 in 2000. Under the successful efforts method, we must also evaluate our investments in each producing field. If such investments are greater than our estimates of undiscounted future net cash flow, then we must record a charge to impairment for the difference between our investment and the discounted future net cash flow. Accordingly, any year in which oil and/or gas prices decline, our operations and financial position could be materially impacted by a charge to impairment. Such charges amounted to $0.5 million in 2002, $1.3 million in 2001 and zero in 2000.

24

     Because our primary operations are oil and gas sales, we are exposed to fluctuations in oil and gas commodity prices. We employ a policy of hedging well-defined price risks with oil and gas swaps and options, but we do not designate such instruments as hedges for accounting purposes. Because we do not designate our derivatives as hedges, we record them at fair value based on the current price of either the option or swap as quoted on the New York Mercantile Exchange, and recognize changes in their fair values in earnings as they occur. Accordingly, our operations and financial position could be materially impacted by changes in the fair values of our hedging instruments. Such changes in the fair values of our hedging instruments are driven by commodity prices. The following summarizes the results of our hedging program (amounts in thousands):

	2000			2001		2002
Changes in fair value	$	(135	)	$	447	$	(2,029	)
Realized gain (loss)		—			696		(2,015	)
Net	$	(135	)	$	1,143	$	(4,044	)

     We estimate our accrual for oil and gas sales receivable by first predicting the volumes we will produce based on recent production trends and, if available, production information provided by our operators. Then we multiply those volumes by the average posted commodity prices for the periods of production, less a differential. The product is our oil and gas sales receivable accrual. Our estimates of quantity production or average price could vary from actual quantities produced and prices realized, causing material variations in our financial position and results of operations.

     As a result of our acquisition of Madison, we recorded approximately $5.0 million of goodwill. This goodwill was allocated between reporting units based on the relative value of each units proved reserves. We periodically review the value of goodwill by comparing it with future net cash flow realizable from the properties we acquired in the acquisition of Madison. To the extent that the recorded amount of goodwill plus the carrying value of the oil and gas properties is greater than the future net cash flow related to the oil and gas properties acquired, we record a charge to goodwill impairment for the difference in the recorded value and our estimate of discounted net cash flow. We noted no impairment indicators related to goodwill for the year ended December 31, 2002.

     Statement of Financial Accounting Standards No. 123 (“SFAS 123”), “Accounting for Stock-Based Compensation,” encourages, but does not require, the adoption of a fair value-based method of accounting for employee stock-based compensation transactions. We have elected to apply the provisions of Accounting Principles Board Opinion No. 25 (“Opinion 25”), “Accounting for Stock Issued to Employees,” and related interpretations, in accounting for our stock-based compensation plans. Under Opinion 25, compensation cost is measured using an intrinsic value method and is calculated as the excess, if any, of the quoted market price of the Company’s stock at the date of the grant above the amount an employee must pay to acquire the stock. Had compensation costs for employees under our two stock-based compensation plans been determined using the fair value method proscribed by SFAS No. 123, our net income (loss) and earnings (loss) per share would have been affected as follows (in thousands, except per share data):

	2002			2001			2000
Income (loss) applicable to common shares, as reported	$	(6,481	)	$	(1,002	)	$	2,993
Basic earnings (loss) per share reported		(0.69	)		(0.16	)		0.54
Diluted earnings (loss) per share reported		(0.69	)		(0.16	)		0.50
Stock-based compensation costs under the intrinsic value method included in net income (loss) reported, net of related tax		—			—			—
Pro-forma stock-based compensation costs under the fair value method, net of related tax		432			395			559
Pro-forma income (loss) applicable to common shares under the fair-value method		(6,913	)		(1,397	)		2,434
Pro-forma basic earnings (loss) per share under the fair value method		(0.74	)		(0.22	)		0.44
Pro-forma diluted earnings (loss) per share under the fair value method		(0.74	)		(0.22	)		0.42

25

LIQUIDITY AND CAPITAL RESOURCES

     During 2002, cash flow from operations before working capital changes and including proceeds from the sale of properties and other assets was $8.5 million, compared with $10.3 million for 2001. Cash flow from operations before working capital changes and not including proceeds from the sale of properties and other assets during 2002 was $3.9 million, versus $8.1 million for 2001. We continually review the operating results of each of our properties. If there are under-performing properties, we attempt to liquidate them. During 2002, we received $4.6 million in proceeds from sales of property and equipment. We anticipate that cash flow from operations during 2003 will be approximately $11.3 million that will be used for budgeted capital expenditures and the retirement of debt.

     On November 1, 2002, we issued $925,000 of Series A-1 Convertible Preferred Stock. The Series A-1 Convertible Preferred Stock is governed by a certificate of designation. The Series A-1 Convertible Preferred Stock was sold for a face value of $25.00 per share, and pays an annual cash dividend of $2.25 per share that results in an annual yield of 9.0%. At the option of the holder, the Series A-1 Convertible Preferred Stock may be converted into common shares at a price of $4.00 per common share. The $4.00 conversion price was higher than the market price of our common stock at the time of issuance. The Series A-1 Convertible Preferred Stock is redeemable at our option, in whole or in part, at any time on or after November 1, 2007. The optional redemption price per share is the sum of (1) $25.00 per share of the Series A Convertible Preferred Stock plus (2) any accrued unpaid dividends, and such sum is multiplied by a declining multiplier. The multiplier is 105% until October 31, 2008, 104% until October 31, 2009, 103% until October 31, 2010, 102% until October 31, 2011, 101% until October 31, 2012, and 100% thereafter. In connection with the securities purchase agreement, the parties entered into a registration rights agreement which provides for the registration of the common stock issuable upon conversion of the Series A-1 Convertible Preferred Stock. We have used the net proceeds from the private placement to fund portions of our exploration and development program and for other general corporate purposes.

     We currently have two senior borrowing facilities. First, we have a revolving credit facility with Bank of Texas (the “Texas Facility”), which had permitted borrowings of $19.4 million at December 31, 2002. At December 31, 2002, we had borrowings outstanding under the Texas Facility of approximately $18.8 million. We are required to make monthly principal payments of $150,000 under the Texas Facility until all outstanding amounts are repaid, and accordingly, we have included $1,800,000 in the current portion of long-term debt on the balance sheet related to this revolving credit facility. On September 23, 2002, we entered into an amendment with Bank of Texas that reestablished the amount of permitted borrowings and the portion that we are required to pay monthly. The required payments will be made out of cash flow from operations. During 2002, we used $1.6 million of our available cash flow to reduce the amounts outstanding under the Texas Facility.

      We also have another revolving credit facility with Barclays Bank, Plc (the "Barclays Facility"). Under the Barclays Facility, we had $14.6 million outstanding at December 31, 2002. During 2002, we used $4.5 million of our available cash flow to reduce the amounts outstanding under the Barclays Facility.

      During 2002, Barclays advised us that it intended to withdraw from the reserve-based lending business and to transfer the balance of its reserve-based loans to one or more third-party banking institutions. As a result of this change in direction and the existence of various technical defaults under the Barclays Facility, we entered into various waiver agreements with Barclays in 2002 and 2003 pursuant to which we agreed to make a principal payment of $300,000 in January 2003 and to make monthly principal payments of at least $400,000 until the entire outstanding balance is repaid. Accordingly, we have included $4.7 million (representing our required payments for 2003) in the current portion of long-term debt on the balance sheet. In addition, we are not allowed to borrow any additional funds under the Barclays Facility. Pursuant to the terms of the waiver agreements, we have issued to Barclays warrants that are currently exerciable to purchase an aggregate of 400,000 shares of our Common Stock at an exercise price of $3.50 per share and have agreed to issue an additional warrant to purchase 100,000 shares of our Common Stock at an exercise price of $3.52 per share. These warrants have certain registration rights. We have also agreed, among other items, to apply certain amounts that may be received by Toreador for asset sales and the Turkish capital repatriation to the repayment of the Barclays Facility.

     We diligently have explored alternatives to refinance all or part of our existing capital structure, including the Barclays Facility. We have received a commitment to provide funds necessary for the extinguishment of the Barclays Facility. The form of the commitment is based on a third party institution providing a structured financing of up to $45 million in a combination of fixed term, floating rate senior debt, subordinated, fixed term, fixed rate debt, and equity. However, no assurance can be given that this structured financing will occur. If the third party institution is unable to provide a commitment for the financing on or before April 30, 2003, we have received a binding commitment to provide up to $15 million to refinance the Barclays Facility which would be based on a five-year amortization payable in equal monthly installments of $250,000 at an interest rate to be determined. In addition, we are pursuing other alternatives, including other refinancing options and the possible sale of our French properties as a means of discharging the Barclays Facility and providing additional working capital.

     We anticipate that our 2003 capital expenditures budget, excluding any acquisitions we may make, will be approximately $4.0 million. We intend to fund our capital expenditures budget from operating cash flow, the proceeds of any financing we are able to secure, in excess of the payoff amount of the Barclays Facility, or a combination thereof. We will continue to spend most of our 2003 capital budget on prospects in our inventory as a result of the acquisition of Madison. We will limit our activity in France to development drilling on our existing properties. In Turkey, we

26

anticipate that exploration work will continue on several projects, including the interpretation of seismic data recently acquired in the Black Sea.

     We may reinvest proceeds from option and lease bonuses by taking a working interest in 3D seismic projects or in wells. To the extent cash flow from operations does not significantly increase and external sources of capital are limited or unavailable, our ability to make the capital investment to participate in 3D seismic surveys and increase our interest in projects on our acreage will be limited. We expect to receive future funds through production from existing producing properties and new producing properties that may be discovered through exploration of our acreage by third parties or by us. In addition to the properties described above, we also may acquire other producing oil and gas assets, which could require the use of debt, including the Texas Facility or other forms of financing.

     We maintain our excess cash funds in interest-bearing deposits and in marketable securities.

     We believe that sufficient funds will be available from operating cash flow or borrowings under the Texas Facility or new financings to meet anticipated capital requirements for fiscal 2003. The following table sets forth our contractual obligations at the end of 2002 for the periods shown (dollars in thousands):

		Less Than		One to		Three to		More Than
		One Year		Three Years		Five Years		Five Years		Total
Long-Term Debt (including any current portion)		$	6,500	$	13,200	$	6,060	$	9,760	$	35,520
Operating Leases			410		815		653		—		1,878
	Total	$	6,910	$	14,015	$	6,713	$	9,760	$	37,398

     Through December 31, 2002, we have used $2,534,000 of our cash reserves to purchase 721,027 shares of our common stock including 40,000 that were repurchased during 2002 for $180,000. Based on market conditions and cash availability, we intend to repurchase shares of our common stock when we deem appropriate. Such repurchases will be funded from available operating cash flows.

     Dividends on our common stock may be declared and paid out of funds legally available when and as determined by our board of directors. Our policy is to hold and invest corporate funds on a conservative basis, and thus we do not anticipate paying cash dividends on our common stock in the foreseeable future. In addition, under the terms of the Texas Facility we are prohibited from paying dividends over $100,000 without prior consent from Bank of Texas, National Association (other than dividends payable in shares of common stock). The terms of our Series A Convertible Preferred Stock and our Series A-1 Convertible Preferred Stock prohibit us from paying dividends on the common stock without the approval of the holders of a majority of the then outstanding shares of the Series A Convertible Preferred Stock and the Series A-1 Convertible Preferred Stock.

     Dividends on our Series A Convertible Preferred Stock and our Series A-1 Convertible Preferred Stock are paid on a quarterly basis. Cash dividends totaling $374,000 were declared ($270,000 were paid) for the year ended December 31, 2002. Cash dividends of $360,000 were declared and paid in 2001 and 2000. Future dividends will be paid in cash only at a rate of $110,813 per calendar quarter. We are prohibited from paying dividends over $100,000 without the consent from Bank of Texas, National Association. Thus, approval will be required prior to the payment of the dividends.

     No stock options were exercised during 2002. During 2001, we received a total of $256,000 as a result of the exercise of stock options to purchase our common stock by a director and former employees of a company acquired in 2000. Those options related to 10,000 shares of common stock with an exercise price of $3.625 per share and 70,400 shares of common stock with an exercise price of $3.12, respectively.

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RESULTS OF OPERATIONS

     COMPARISON OF YEARS ENDED DECEMBER 31, 2002 AND 2001

     REVENUES

     Oil and gas sales. Oil and gas sales revenues increased by approximately $9.1 million, or 65%, from $14.0 million to $23.1 million for the years ended December 2001 and 2002, respectively. This was due to revenues from the operations of the properties acquired in the Madison acquisition, offset by a decrease in United States revenues. Oil and gas sales revenues from the properties acquired in the Madison acquisition amounted to $11.6 million, while United States revenues decreased by $2.4 million, or 18%. The decrease in United States revenues was the result of decreases in both production and price. United States production decreased 53,000 BOE, or 9%, as a result of the natural decline of our existing properties along with the sale of miscellaneous under-performing properties during 2002. Additionally, the average prices we received for oil and natural gas sales decreased from $23.39 per barrel to $22.08 per barrel, and $3.76 per Mcf in 2001 from $3.10 per Mcf in 2002.

     Gain (loss) on commodity derivatives. We utilize commodity derivative instruments as part of our risk management program and to comply with the requirements of our senior credit facilities. These transactions are generally structured as either swaps or collar contracts. A swap has the effect of an outright sale at a specific price. A collar has the effect of creating a sale only if a floor or ceiling price is exceeded. These instruments (i) reduce the effect of the price fluctuations of the commodities we produce and sell; (ii) support our annual capital budgeting and expenditure plans; (iii) protect the amounts required for servicing outstanding debt; and (iv) maximize the funds available under our existing credit facilities. The trading party that represents the other side of each of these transactions is known as a “counterparty.” The counterparty of our United States transactions is Coral Energy Holdings, L.P., an affiliate of Royal Dutch/Shell. The counterparty of our French transactions is Barclays Capital. The following table summarizes the results of our risk-management efforts during 2002 and 2001 (in thousands):

	2002			2001		Variance
Changes in fair value	$	(2,029	)	$	447	$	(2,476	)
Realized gain (loss)		(2,015	)		696		(2,711	)
Net	$	(4,044	)	$	1,143	$	(5,187	)

     As noted above, we have structured our commodity derivatives to reduce the effect of price fluctuations of the commodities we produce and sell. As a result, those derivatives decline in value as the underlying commodity prices rise. Any losses incurred on derivatives are offset by higher oil and gas sales revenues due to increases in underlying commodity prices. However, under the requirements of Statement of Financial Accounting Standards No. 133 and because we chose not to designate our derivatives as hedges, mark to market loss on the derivatives is generally accrued through earnings prior to the recognition of higher sales prices. See Note 7 in the Notes to Consolidated Financial Statements included in this filing for more details.

     Lease bonuses and rentals. Lease bonuses and rentals increased $216,000, or 36%, due to increases in leasing activity as a result of several wildcat discoveries in and around the minerals we own in Mississippi.

EXPENSES

     Lease operating. Lease operating expenses increased $3.4 million, or 104%, due to the operations of the properties we acquired in the Madison acquisition and are commensurate with the increase in operating revenue from the Madison properties. Higher lease operating expenses were offset by decreases in U.S. production taxes, the result of the decline in oil and gas sales prices discussed above. Operating expenses in 2002 associated with the properties in the Madison acquisition amounted to $4.1 million.

     Exploration and acquisition. Exploration and acquisition expense decreased $385,000, or 15%, due to a reduction in drilling activity, compared with 2001.

     Depreciation, depletion and amortization. DD&A remained relatively unchanged from 2001 at approximately $5.0 million. An increase due to depletion of costs allocated to properties acquired in the Madison acquisition of approximately $1.9 million was offset by a decrease in U.S. depletion of $1.7 million. The decrease in U.S. depletion was the result of higher reserve quantities. We provide depletion on our oil and gas properties on the units-of-production method, which is calculated as current-year production divided by beginning reserves multiplied by the net value of the properties. Production decreased by 9% from 2001, resulting in a lower depletion rate.

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     Impairment of oil and gas properties. Impairment charged in 2002 amounted to $529,000, compared with $1.3 million in 2001, both of which related to US properties only. The decrease in the charge to impairment is the result of an increase in the value of our reserves commensurate with the increase in year-end pricing. Oil and gas prices used to evaluate our reserves at December 31, 2001, were $17.52 per barrel and $2.71 per Mcf, compared with $28.00 and $4.74 at December 31, 2002.

     General and administrative. General and administrative expenses increased $4.9 million, or 175%. The majority of this increase was the result of the acquisition of Madison; however, a significant portion of these expenses consists of nonrecurring items that are either transaction and transition costs or other expenses of a one-time nature. General and administrative expense of approximately $2.3 million is directly attributable to the operation of our new French and Turkish properties. The balance represents the ongoing expenses of the support staff that joined us as a result of the Madison acquisition.

     OTHER INCOME AND EXPENSE

     Other income and expense resulted in a net expense of $6.0 million during 2002 versus $1.8 million for 2001. Net expense increased $4.2 million, primarily due to a decline in the value of our investment in Trinidad Exploration and Development, Ltd. (“TED”), losses on property sales and increased interest expense. During 2002, our interest in TED was reduced from 25.0% to 16.33%. Accordingly, we have recorded a charge to equity in earnings of unconsolidated entities of $1.2 million reflecting the valuation of the ultimate amount estimated to be recovered from our investment.

     In addition to the decline in value of our investment in TED, we incurred losses on property sales of $2.1 million during 2002, compared with $0.5 million in 2001. As part of our ongoing program to high grade our property portfolio, we elected to proceed with the sale of several non-economic, non-strategic properties that were under-performing rather than sustain continued operating losses on those properties. Interest expense increased as a result of the revolving credit balances and the convertible debenture assumed in the Madison acquisition.

     NET INCOME (LOSS) AVAILABLE TO COMMON SHARES

     During 2002, we incurred a net loss of $6.5 million, compared with $1.0 million for 2001. Lower results for 2002 were due to losses on commodity derivatives (oil and gas hedges), one-time transaction and transition costs related to the Madison acquisition, higher operating costs of the newly combined company after the addition of the Madison exploration staff, the decline in value of our investment in TED and losses on the sales of under-performing properties.

     OTHER COMPREHENSIVE INCOME

     The most significant element of comprehensive income, other than net income (loss), is foreign currency translation. The functional currency of our operations in France is the Eurodollar, and in Turkey the functional currency is the Turkish Lira. The exchange rates used to translate the financial position of those operations at December 31, 2002, were approximately US$ 1.05 per Euro and US$ 0.62 per million Turkish Lira. The Euro rate at December 31, 2001, was US$ 0.87 per Euro and US$ 0.69 per million Turkish Lira. These fluctuations caused an unrealized translation gain of $2.2 million for 2002. No such charges existed during 2001 because we had no foreign operations during that period.

     COMPARISON OF YEARS ENDED DECEMBER 31, 2001 AND 2000

     REVENUES

     Oil and gas sales. Oil and natural gas sales revenues increased by approximately $800,000, or 6% from $13.2 million to $14.0 million for the years ended December 2001 and 2000, respectively. The increase was the result an increase in oil and natural gas production brought about by recent acquisitions. We received $23.39 per Bbl for its oil production during the year ended December 31, 2001, which is 18% less than the $28.45 received in the same period of 2000. We sold our gas production during the year ended December 31, 2001 for $3.76 per Mcf, which is 5% lower than the $3.94 per Mcf received during the same period of 2000. Natural gas volumes sold increased 35% from 1,319 MMcf during the year ended December 31, 2000 to 1,781 MMcf during the year ended December 31, 2001, while oil volumes increased 8% from 274 MBbls to 296 MBbls over the same period. The increase in oil and natural gas production is due primarily from production on the properties acquired in the acquisition of Texona Petroleum Corporation, and the Razorhawk acquisition in Kansas. Additionally, we had gains on natural gas commodity derivatives of approximately $1.1 million for the year ended December 31, 2001, that were not present in 2000.

     Lease bonuses and rentals. Lease bonuses and rentals increased by $124,000 or 26% from $472,000 to $596,000, primarily due to our efforts to optimize our mineral holdings.

     Total revenues increased $2.2 million, or 16%, $13.5 to $15.7 million for the year ended December 31, 2000 and 2001, respectively.

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     EXPENSES

     Lease operating expenses. Lease operating expenses increased by approximately $1.0 million or 43%, to $3.3 million for the year ended December 31, 2001 from $2.3 million for the same period in 2000. This increase was principally the result of adding working interest properties through the acquisition of Texona Petroleum Corporation in September 2000 and working interest properties acquired in the Razorhawk acquisition in Kansas in April 2001.

     Exploration and acquisition. Exploration and acquisition expenses increased from $309,000 to $2.6 million for the year ended December 31, 2000 and 2001, respectively. This increase is commensurate with the increase in our drilling activity between the two periods. We drilled 14 developmental and 21 exploration wells during the year ended December 31, 2001, of that 17 were dry holes. The total dry hole expense included in this category is $553,000 during the year ended December 31, 2001.

     Depreciation, depletion and amortization. Depreciation, depletion and amortization increased by $2.5 million, or 104%, to $4.9 million for the year ended December 31, 2001 from $2.4 million for the same period in 2000. A portion of this increase relates to increased oil and gas production during 2001. The primary reason for the large increase is the significant loss of reserves due to lower oil and gas prices at December 31, 2001 as compared to the unusually high prices at December 31, 2000. The downward revision of oil and gas reserves forces the 2001 production to represent a much higher percentage of overall reserves, resulting in a higher depletion rate.

     General and administrative. General and administrative expenses increased by $500,000, or 22%, to $2.8 million from $2.3 million for the year ended December 31, 2001 and 2000, respectively. The increase is due primarily to increased payroll related costs from added personnel required to manage growth, and expenditures related to increased stockholder relations activities.

     Compared to the year ended December 31, 2000, we significantly increased our operations for the year ended December 31, 2001 through the acquisition of Texona and the Razorhawk and Anderson acquisitions. We also incurred unusually high depletion in 2001 as previously mentioned. Additionally, we strongly focused on our exploration program during that time. As a result, total costs and expenses increased $6.3 million or 86% from $7.3 million in the year ended December 31, 2000 to $13.6 million for the same period in 2001.

     OTHER INCOME AND EXPENSE

     Equity in the earnings of unconsolidated entities consists primarily of our portion of EnergyNet’s operations. During the year ended December 31, 2001, EnergyNet incurred a net loss of approximately $651,000 ($228,000 net to our interest). For the same period in 2000, EnergyNet incurred a loss of approximately $464,000 ($64,000 net to our interest).

     We recognized loss on sale of properties and other assets of $487,000 during the year ended December 31, 2001, compared to a gain of $408,000 for the same period in 2000. The loss in 2001 was the result of selling two large working interest properties that had encountered operational problems during the year and were losing money.

     Interest and other income increased from $71,000 in 2000 to $163,000 in 2001 due primarily to new revenues from saltwater disposal and gathering system activities brought about by the acquisition of Texona in September 2000.

     Interest expense decreased by approximately $100,000 between the years ended December 31, 2001 and 2000, from $1.4 to $1.3 million. This is due to a decrease in the average rate of interest on our revolving line of credit.

     NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS

     The loss applicable to common shares amounted to $1.0 million, or $0.16 per basic and diluted share versus income of $3.0 million, or $0.54 per basic share and $0.50 per diluted share for the year ended December 31, 2001 and 2000, respectively.

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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

     We derived the selected historical financial data in the table below from our unaudited interim consolidated financial statements. The sum of net income per share by quarter may not equal the net income per share for the year due to variations in the weighted average shares outstanding used in computing such amounts. The historical data presented here are only a summary, and should be read in conjunction with the consolidated financial statements, related notes, and other financial information included elsewhere in this annual report.

	Three Months Ended
	December 31,			September 30,			June 30,			March 31,
	(in thousands, except per share data)
Year ended December 31, 2002:
Total revenues	$	5,413		$	4,792		$	6,187		$	3,445
Impairment of oil and gas properties		529			—			—			—
Total costs and expenses		5,926			5,253			5,705			5,315
Net loss		(2,594	)		(1,166	)		(491	)		(1,856	)
Loss attributable to common shares		(2,698	)		(1,256	)		(581	)		(1,946	)
Basic loss per share		(0.29	)		(0.13	)		(0.06	)		(0.21	)
Diluted loss per share		(0.29	)		(0.13	)		(0.06	)		(0.21	)
Year ended December 31, 2001:
Total revenues	$	2,614		$	3,335		$	4,548		$	5,194
Impairment of oil and gas properties		1,309			—			—			—
Total costs and expenses		7,357			2,572			2,675			2,320
Net income (loss)		(3,654	)		385			1,018			1,609
Income (loss) attributable to common shares		(3,744	)		295			928			1,519
Basic income (loss) per share		(0.59	)		0.05			0.15			0.24
Diluted income (loss) per share		(0.59	)		0.04			0.13			0.21

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     The risks inherent in our market-sensitive instruments are the potential loss arising from adverse changes in oil and gas commodity prices, interest rates and foreign currency exchange rates as discussed below. The sensitivity analysis does not, however, consider the effects that such adverse changes may have on overall economic activity nor do they consider additional actions we may take to mitigate our exposure to such changes. Actual results may differ.

     The following quantitative and qualitative information is provided about financial instruments to which we are a party as of December 31, 2002, and from which we may incur future earnings gains or losses from changes in commodity prices. We do not designate our derivatives as hedges; however, we do not enter into derivative or other financial instruments for trading purposes.

     Oil And Gas Prices. We market our oil and gas production primarily on a spot market basis. As a result, our earnings could be affected by changes in the prices for these commodities, regulatory matters or demand for the commodities. As market conditions dictate, from time to time, we will lock in future oil and gas prices using various hedging techniques. We do not use such financial instruments for trading purposes, and we are not a party to any leveraged derivatives. Market risk is estimated as a 10% decrease in the prices of oil and gas. Based on our projections for 2003 sales volumes at fixed prices, such a decrease would result in a reduction to oil and gas sales revenue of approximately $2.0 million before considering the effect of the gas hedging agreements discussed below.

     Interest Rates. Our earnings are affected by changes in short-term interest rates related to our line of credit. Market risk is estimated as a hypothetical increase in short-term interest rates of 100 basis points. Based on our projections of outstanding borrowings for fiscal 2003, such an increase could result in an addition to interest expense of approximately $300,000.

     Foreign Currency Exchange Rates. The functional currency of our French operations is the Eurodollar, and the functional currency of our Turkish operations is the Turkish Lira. While our oil sales are calculated on a United States dollar basis, we are exposed to the risk that the values of our French and Turkish assets will decrease and that the amounts of our French and Turkish liabilities will increase. Market risk is estimated as a 10% decrease in the exchange rate for Eurodollars and Turkish Lira to United States dollars. Based on the net assets in our French and Turkish operations at December 31, 2002, such a decrease would result in an unrealized loss of approximately $0.8 million due to foreign currency exchange rates.

     Derivative Financial Instruments. We utilize commodity derivative instruments as part of our risk management program. These transactions are generally structured as either swaps or collar contracts. A swap has the effect of an outright sale at a specific price. A collar has the effect of creating a sale only if a floor or ceiling price is exceeded. These instruments (i) reduce the effect of the price fluctuations of the commodities we produce and sell; (ii) support our annual capital budgeting and expenditure plans; (iii) protect the amounts required for servicing outstanding debt; and (iv) maximize the funds available under our existing credit facilities. The trading party that represents the other side of each of these transactions is known as a “counterparty.” The counterparty of our United States transactions is Coral Energy Holdings, L.P., an affiliate of Royal Dutch/Shell. The counterparty of our French transactions is Barclays Capital.

     The following table lists our open natural gas derivative contracts as of December 31, 2002. All contracts are based on NYMEX pricing. We estimated the fair value of the option agreement at December 31, 2002, from quotes by the counterparty representing the amounts we would expect to receive or pay to terminate the agreements on that date. We estimated the fair value of the swap agreement based on the difference between the strike prices and the forward NYMEX discounted prices for each determination period multiplied by the notional volume for each period.

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				Notional						Fair Value –
				Volume per		Aggregate				Gain/(Loss)
Contract		Effective	Termination	Month		Volume		Strike Price		December 31,
Type		Date	Date	(MMBtu)(1)		(MMBtu)(1)		per MMBtu		2002
	Swap	February 2003	December 2003		30,000		330,000	$	3.900	$	(210,960	)
		January 2004	December 2004		50,000		600,000	$	3.920	$	(198,950	)
Put Option		February 2003	December 2003		80,000		880,000	$	3.250	$	52,959
		January 2004	December 2004		50,000		600,000	$	3.250	$	113,257
Call Option		January 2003	December 2003		80,000		880,000	$	4.850	$	(346,012	)
		January 2004	December 2004		50,000		600,000	$	5.275	$	(205,272	)

(1) MMBtu — Million British thermal units.

     The following table lists our open crude oil derivative contracts as of December 31, 2002. We estimated the fair value of the agreement based on the difference between the strike prices and the forward index discounted prices for each determination period multiplied by the notional volume for each period.

								Fair Value –
			Notional		Aggregate			Gain/(Loss)
Contract	Effective	Termination	Volume per		Volume		Strike Price	December 31,
Type	Date	Date	Month (Bbls)		(Bbls)		per Bbl	2002
Brent Crude							$21.00 Floor
Collar	January 2003	December 2003		20,000		240,000	$26.00 Ceiling	$	(241,000	)

     See Note 2 of Notes to Consolidated Financial Statements for a description of our accounting procedures followed relative to hedge derivative financial instruments and for specific information regarding the terms of our derivative financial instruments that are sensitive to changes in crude oil and gas commodity prices.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The Report of Independent Accountants and Consolidated Financial Statements are set forth beginning on page F-1 of this annual report on Form 10-K and are incorporated herein.

     The financial statement schedules have been omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or the Notes to the Consolidated Financial Statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

     None.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Information relating to our directors, nominees for directors and executive officers will be set forth under the heading “Election of Directors” and “Executive Officers” in our Proxy Statement relating to the 2003 Annual Meeting of Stockholders, that will be filed with the Securities and Exchange Commission on or prior to April 30, 2003, and which is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

     Information relating to executive compensation will be set forth under the heading “Executive Compensation and Other Transactions” in our Proxy Statement relating to the 2003 Annual Meeting of Stockholders, that will be filed with the Securities and Exchange Commission on or prior to April 30, 2003, and that is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Information required by Item 403 of Regulation S-K will be set forth under the heading “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement relating to the 2003 Annual Meeting of Stockholders, that will be filed with the Securities and Exchange Commission on or prior to April 30, 2003, and that is incorporated herein by reference.

     Equity Compensation Plan Information. The following table sets forth information as of December 31, 2002 with respect to compensation plans under which shares of our common stock may be issued.

					Number of
					securities
					remaining available
	Number of				for future issuance
	securities to be				under equity
	issued upon		Weighted-average		compensation plans
	exercise of		exercise price of		(excluding
	outstanding		outstanding		securities
	options, warrants		options, warrants		reflected in the
Plan Category	and rights		and rights		first column)
Equity compensation plans approved by security holders		1,434,106	$	4.57		565,894
Equity compensation plans not approved by security holders		—		—		—
Total		1,434,106	$	4.57		565,894

(i) Pursuant to the Agreement and Plan of Merger dated as of October 3, 2001 relating to the acquisition of Madison Oil Company, certain warrants of Madison Oil Company became warrants to acquire common stock of Toreador. As of December 31, 2002, there were warrants outstanding exercisable into 23,010 shares of Toreador common stock with a weighted-average exercise price of $5.52.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Information relating to certain relationships and related transactions will be set forth under the heading “Certain Relationships and Related Transactions” in our Proxy Statement relating to the 2003 Annual Meeting of Stockholders, that will be filed with the Securities and Exchange Commission on or prior to April 30, 2003, and that is incorporated herein by reference.

ITEM 14. CONTROLS AND PROCEDURES.

     (a)  Evaluation of Disclosure Controls and Procedures. The term “disclosure controls and procedures” is defined in Rule 13a-14(c) of the Securities Exchange Act of 1934, as amended. This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports it files under the Securities Exchange Act of

34

1934, as amended, is recorded, processed, summarized and reported within required time periods. Our Chief Executive Officer and our Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of a date within 90 days before the filing of this annual report, and they have concluded that as of that date, our disclosure controls and procedures were effective at ensuring that required information will be disclosed on a timely basis in our reports filed under the Securities Exchange Act of 1934, as amended.

     (b)  Changes in Internal Controls. There were no significant changes to our internal controls or in other factors that could significantly affect our internal controls subsequent to the date of their evaluation by our Chief Executive Officer and our Chief Financial Officer, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

     (a)  The following documents are filed as part of this report:

1.	Index to Consolidated Financial Statements Report of Independent Auditors, Consolidated Balance Sheets as of December 31, 2002 and 2001, Consolidated Statements of Operations for the three years ended December 31, 2002, Consolidated Statements of Changes in Stockholders’ Equity for the three years ended December 31, 2002, Consolidated Statements of Cash Flows for the three years ended December 31, 2002, and Notes to Consolidated Financial Statements
2.	The financial statement schedules have been omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or the Notes to Consolidated Financial Statements.
3.	Exhibits:

2.1	- -	Certificate of Ownership and Merger merging Toreador Resources Corporation into Toreador Royalty Corporation, effective June 5, 2000 (previously filed as Exhibit 2.1 to Toreador Resources Corporation Current Report on Form 8-K filed on June 5, 2000, File No. 0-2517, and incorporated herein by reference).
2.2	- -	Agreement and Plan of Merger, dated as of October 3, 2001, between Toreador Resources Corporation and Madison Oil Company (previously filed as Exhibit 2.1 to Toreador Resources Corporation Registration Statement on Form S-4, No. 333-72314, filed on October 26, 2001, and incorporated herein by reference).
2.3	- -	Voting Agreement, dated as of October 3, 2001, by Herbert L. Brewer, David M. Brewer and PHD Partners, LP for the benefit of Toreador Resources Corporation (previously filed as Exhibit 2.4 to Toreador Resources Corporation Registration Statement on Form S-4, No. 333-72314, filed on October 26, 2001, and incorporated herein by reference).
3.1	- -	Amended and Restated Certificate of Incorporation, of Toreador Resources Corporation (previously filed as Exhibit 3.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
3.2	- -	Second Amended and Restated Bylaws of Toreador Resources Corporation (previously filed as Exhibit 3.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
3.3	- -	Certificate of Designation of Series A-1 Convertible Preferred Stock of Toreador Resources Corporation, dated October 30, 2002 (previously filed as Exhibit 3.1 to Toreador Resources

35

		Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-2517, and incorporated herein by reference).
4.1	- -	Registration Rights Agreement, effective December 16, 1998, among Toreador Royalty Corporation and persons party thereto (previously filed as Exhibit 10.2 to Toreador Royalty Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on December 31, 1998, File No. 0-2517, and incorporated herein by reference).
4.2	- -	Settlement Agreement dated June 25, 1998, among the Gralee Persons, the Dane Falb Persons and Toreador Royalty Corporation (previously filed as Exhibit 10.1 to Toreador Royalty Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on July 1, 1998, File No. 0-2517, and incorporated herein by reference).
4.3	- -	Registration Rights Agreement, effective July 31, 2000, among Toreador Royalty Corporation and persons party thereto (previously filed as Exhibit 4.5 to Toreador Resources Corporation Registration Statement on Form S-3, No. 333-52522 filed with the Securities and Exchange Commission on December 22, 2000, and incorporated herein by reference).
4.4	- -	Registration Rights Agreement, effective September 11, 2000, among Toreador Resources Corporation and Earl E. Rossman, Jr., Representative of the Holders (previously filed as Exhibit 4.6 to Toreador Resources Corporation Registration Statement on Form S-3, No. 333-52522, filed with the Securities and Exchange Commission on December 22, 2000, and incorporated herein by reference).
4.5*	- -	Registration Rights Agreement, effective November 1, 2002, among Toreador Resources Corporation and persons party thereto.
10.1+	- -	Employment Agreement, dated as of May 1, 1997 between Toreador Royalty Corporation and Edward C. Marhanka (previously filed as Exhibit 10.5 to Toreador Royalty Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, File No. 0-2517, and incorporated herein by reference).
10.2+	- -	Employment letter agreement between Madison Oil Company and Michael J. FitzGerald dated September 10, 2001 (previously filed as Exhibit 10.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, File No. 0-2517, and incorporated herein by reference).
10.3+	- -	Toreador Royalty Corporation 1990 Stock Option Plan (previously filed as Exhibit 10.7 to Toreador Royalty Corporation Annual Report on Form 10-K for the year ended December 31, 1994, File No. 0-2517, and incorporated herein by reference).
10.4+	- -	Amendment to Toreador Royalty Corporation 1990 Stock Option Plan, effective as of May 15, 1997 (previously filed as Exhibit 10.14 to Toreador Royalty Corporation Annual Report on Form 10-K for the year ended December 31, 1997, File No. 0-2517, and incorporated herein by reference).
10.5+	- -	Toreador Royalty Corporation Amended and Restated 1990 Stock Option Plan, effective as of September 24, 1998 (previously filed as Exhibit A to Toreador Royalty Corporation Preliminary Proxy Statement filed with the Securities and Exchange Commission on March 12, 1999, File No. 0-2517, and incorporated herein by reference).
10.6+	- -	Amendment Number One to Toreador Resources Corporation Amended and Restated 1990 Stock Option Plan (previously filed as Exhibit 10.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).

36

10.7+	- -	Amendment Number Two to Toreador Resources Corporation Amended and Restated 1990 Stock Option Plan (previously filed as Exhibit 10.4 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.8+	- -	Toreador Royalty Corporation 1994 Non-Employee Director Stock Option Plan, as amended (previously filed as Exhibit 10.12 to Toreador Royalty Corporation Annual Report on Form 10-K for the year ended December 31, 1995 File No. 0-2517, and incorporated herein by reference).
10.9+	- -	Toreador Resources Corporation Amended and Restated 1994 Non-employee Director Stock Option Plan (previously filed as Exhibit 10.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.10+	- -	Toreador Resources Corporation 2002 Stock Option Plan (previously filed as Exhibit 10.16 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-2517, and incorporated herein by reference).
10.11+	- -	Amendment Number One to the Toreador Resources Corporation 2002 Stock Option Plan (previously filed as Exhibit 10.5 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.12+	- -	Form of Indemnification Agreement, dated as of April 25, 1995, between Toreador Royalty Corporation and each of the members of our Board of Directors (previously filed as Exhibit 10 to Toreador Royalty Corporation Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995, File No. 0-2517, and incorporated herein by reference).
10.13	- -	Loan Agreement, effective February 16, 2001, between Toreador Resources Corporation, Toreador Exploration & Production Inc., Toreador Acquisition Corporation and Tormin, Inc. and Bank of Texas, National Association (previously filed as Exhibit 10.9 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2000, File No. 0-2517, and incorporated herein by reference).
10.14	- -	First Amendment to Loan Agreement dated November 8, 2001 between Toreador Resources Corporation, Toreador Exploration & Production Inc., Toreador Acquisition Corporation and Tormin, Inc. and Bank of Texas, National Association Plan (previously filed as Exhibit 10.12 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-2517, and incorporated herein by reference).
10.15	- -	Second Amendment to Loan Agreement dated May 9, 2002 between Toreador Resources Corporation, Toreador Exploration & Production Inc., Toreador Acquisition Corporation and Tormin, Inc. and Bank of Texas, National Association (previously filed as Exhibit 10.3 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.16	- -	Third Amendment to Loan Agreement dated August 7, 2002 between Toreador Resources Corporation, Toreador Exploration & Production Inc., Toreador Acquisition Corporation and Tormin, Inc. and Bank of Texas, National Association (previously filed as Exhibit 10.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-2517, and incorporated herein by reference).

37

10.17	- -	Fourth Amendment to Loan Agreement dated September 30, 2002 between Toreador Resources Corporation, Toreador Exploration & Production Inc., Toreador Acquisition Corporation and Tormin, Inc. and Bank of Texas, National Association (previously filed as Exhibit 10.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.18	- -	Revolving Credit Facility Agreement dated March 30, 2001, between Madison Oil Company Europe, Madison Oil France S.A., Madison/Chart Energy SCS (n/k/a Madison Energy France), and Barclays Capital (previously filed as Exhibit 10.13 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-2517, and incorporated herein by reference).
10.19	- -	Contract for the Supply of Crude Oil from the Parisian Basin, effective January 1, 1997, between Elf Antwar France and Midland Madison Petroleum Company (n/k/a Madison Energy France) (previously filed as Exhibit 10.14 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-2517, and incorporated herein by reference).
10.20	- -	Amended and Restated Convertible Debenture, dated December 31, 2001, between Madison Oil Company and PHD Partners LP. (previously filed as Exhibit 10.15 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-2517, and incorporated herein by reference).
10.21	- -	Settlement Agreement dated June 28, 2002, and executed August 29, 2002, between Tullow Pakistan (Developments) Limited and Toreador Resources Corporation (previously filed as Exhibit 10.3 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.22	- -	Subordinated Revolving Credit Agreement, dated as of October 3, 2001, between Madison Oil Company and Toreador Resources Corporation (previously filed as Exhibit 2.2 to Toreador Resources Corporation Registration Statement on Form S-4, No. 333-72314, filed on October 26, 2001, and incorporated herein by reference).
10.23	- -	Subordinated Revolving Credit Note, dated as of October 3, 2001, between Toreador Resources Corporation and Madison Oil Company (previously filed as Exhibit 2.3 to Toreador Resources Corporation Registration Statement on Form S-4, No. 333-72314, filed on October 26, 2001, and incorporated herein by reference).
10.24*	- -	Securities Purchase Agreement, effective November 1, 2002, among Toreador Resources Corporation and persons party thereto.
10.25*	- -	Shareholders Agreement between Anglo-African Energy, Inc. and Trans-Dominion Holdings Limited, dated August 1, 2000.
10.26*	- -	Consulting Agreement between Toreador Resources Corporation and Richard D. Preston, effective June 1, 2002.
10.27*	- -	Waiver Letter between Madison Energy France S.C.S. (formerly Madison/Chart Energy S.C.S.), Madison Oil Company Europe, Madison Oil France S.A., Madison Oil Company, Madison Petroleum Inc., Madison (Turkey) Inc., Madison Oil Turkey Inc. and Toreador Resources Corporation and Barclays Bank PLC dated March 21, 2002.

38

10.28*	- -	Waiver Letter between Madison Energy France S.C.S. (formerly Madison/Chart Energy S.C.S.), Madison Oil Company Europe, Madison Oil France S.A., Madison Oil Company, Madison Petroleum Inc., Madison (Turkey) Inc., Madison Oil Turkey Inc. and Toreador Resources Corporation and Barclays Bank PLC dated December 31, 2002.
10.29*	- -	Waiver Letter between Madison Energy France S.C.S. (formerly Madison/Chart Energy S.C.S.), Madison Oil Company Europe, Madison Oil France S.A., Madison Oil Company, Madison Petroleum Inc., Madison (Turkey) Inc., Madison Oil Turkey Inc. and Toreador Resources Corporation and Barclays Bank PLC dated March 25, 2003.
10.30*	- -	Warrant Letter between Toreador Resources Corporation and Barclays Capital dated March 25, 2003.
10.31*	- -	Amendment to Settlement Agreement dated as of February 3, 2003, between Tullow Pakistan (Developments) Limited and Toreador Resources Corporation.
10.32*	- -	Waiver Letter between Madison Energy France S.C.S. (formerly Madison Chart/Energy S.C.S.), Madison Oil Company Europe, Madison Oil France S.A., Madison Oil Company, Madison Petroleum Inc., Madison (Turkey) Inc., Madison Oil Turkey Inc. and Toreador Resources Corporation and Barclays Bank PLC dated April 11, 2003.
16.1	- -	Letter on Change in Certifying Accountant from PricewaterhouseCoopers LLP, dated June 30, 1999 (previously filed as Exhibit 16 to Amendment No. 2 to Toreador Royalty Corporation Current Report on Form 8-K/A filed on June 30, 1999, File No. 0-2517, and incorporated herein by reference).
21.1*	- -	Subsidiaries of Toreador Resources Corporation.
23.1*	- -	Consent of Ernst & Young LLP.
23.2*	- -	Consent of LaRoche Petroleum Consultants, Ltd.
24.1*	- -	Power of Attorney (See Signatures in Part IV)
99.1*	- -	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2*	- -	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Filed herewith.
+	Management contract or compensatory plan

     (b)  Reports on Form 8-K:

     On November 8, 2002, we filed a Current Report on Form 8-K dated November 8, 2002, with the Securities and Exchange Commission to report a press release containing financial information.

     On November 14, 2002, we filed a Current Report on Form 8-K dated November 13, 2002, with the Securities and Exchange Commission under Item 9. Regulation FD Disclosure to report certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Toreador’s Chief Executive and Financial Officers of the financial statements included in our Form 10-Q for the periods ended September 30, 2002.

39

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 15, 2003		TOREADOR RESOURCES CORPORATION
	By:	/s/ G. Thomas Graves III G. Thomas Graves III, President and Chief Executive Officer

40

     KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and directors of Toreador Resources Corporation hereby constitutes and appoints G. Thomas Graves III and Douglas W. Weir, or either of them (with full power to each of them to act alone), his true and lawful attorneys-in-fact and agents, with full power of substitution, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, execute and file any and all amendments (including post-effective amendments) to this Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as full to all intents and purposes as he himself might or could do if personally present, thereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, or their or his substitute or substitutes, may lawfully do or cause to be done.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates as indicated therein.

SIGNATURE	CAPACITY IN WHICH SIGNED	DATE
/s/ G. Thomas Graves III G. Thomas Graves III	President, Chief Executive Officer and Director	April 15, 2003
/s/ David M. Brewer David M. Brewer	Director	April 15, 2003
/s/ Herbert L. Brewer Herbert L. Brewer	Director	April 15, 2003
/s/ Edward Nathan Dane Edward Nathan Dane	Director	April 15, 2003
/s/ Peter L. Falb Peter L. Falb	Director	April 15, 2003
/s/ Thomas P. Kellogg, Jr. Thomas P. Kellogg, Jr.	Director	April 15, 2003
/s/ William I. Lee William I. Lee	Director	April 15, 2003
/s/ H. R. Sanders, Jr. H. R. Sanders, Jr.	Director	April 15, 2003
/s/ Joseph Simons Joseph Simons	Director	April 15, 2003
/s/ John Mark McLaughlin John Mark McLaughlin	Chairman and Director	April 15, 2003
/s/ Douglas W. Weir Douglas W. Weir	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	April 15, 2003

41

CERTIFICATION OF PRESIDENT AND
CHIEF EXECUTIVE OFFICER

I, G. Thomas Graves III, President and Chief Executive Officer of Toreador Resources Corporation certify that:

(1)	I have reviewed this annual report on Form 10-K of Toreador Resources Corporation;
(2)	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
(3)	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operation and cash flows of the registrant as of, and for, the periods represented in this annual report;
(4)	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a)	Designed such disclosure controls and procedures to ensure that material information relating to the registrant including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing of this annual report (the “Evaluation Date”); and
(c)	Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

(5) The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function);

(a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

(6) The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 15, 2003
	/s/ G. Thomas Graves III   G. Thomas Graves III President and Chief Executive Officer (Principal Executive Officer)

42

CERTIFICATION OF
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER

     I, Douglas W. Weir, Senior Vice President and Chief Financial Officer of Toreador Resources Corporation certify that:

(1)	I have reviewed this annual report on Form 10-K of Toreador Resources Corporation;
(2)	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
(3)	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operation and cash flows of the registrant as of, and for, the periods represented in this annual report;
(4)	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a)	Designed such disclosure controls and procedures to ensure that material information relating to the registrant including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing of this annual report (the “Evaluation Date”); and
(c)	Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

(5) The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function);

(a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

(6) The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:   April 15, 2003
	/s/ Douglas W. Weir   Douglas W. Weir Senior Vice President and Chief Financial Officer (Principal Financial Officer)

43

TOREADOR RESOURCES CORPORATION

ITEM 8

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
Report of Independent Auditors			F-2
Financial Statements
	Consolidated Balance Sheets as of December 31, 2002 and 2001		F-3
	Consolidated Statements of Operations for each of the three years in the period ended December 31, 2002		F-4
	Consolidated Statements of Changes in Stockholders’ Equity for each of the three years in the period ended December 31, 2002		F-5
	Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2002		F-6
	Notes to Consolidated Financial Statements		F-8

F-1

TOREADOR RESOURCES CORPORATION

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders Toreador Resources Corporation:

     We have audited the accompanying consolidated balance sheets of Toreador Resources Corporation as of December 31, 2002 and 2001, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

     We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Toreador Resources Corporation at December 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

Dallas, Texas
April 11, 2003

F-2

TOREADOR RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEETS

				December 31,
				2002			2001
				(in thousands, except share data)
ASSETS
Current assets:
	Cash and cash equivalents			$	976		$	2,155
	Accounts and notes receivable				3,855			3,456
		Income taxes receivable			512			—
	Unrealized gains on commodity derivatives				—			993
	Marketable securities, at fair value				45			348
	Other				1,444			1,151
			Total current assets		6,832			8,103
Oil and gas properties, net, using the successful efforts method of accounting					71,872			78,028
Investments in unconsolidated entities					2,239			2,855
Goodwill					5,467			5,076
Other assets					443			392
				$	86,853		$	94,454
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable and accrued liabilities			$	6,865		$	5,302
	Unrealized losses on commodity derivatives				1,036			—
	Current portion of long-term debt				6,500			2,625
	Income taxes payable				—			279
			Total current liabilities		14,401			8,206
Long-term debt					26,860			36,874
Long-term accrued liabilities					880			776
Deferred tax liability					12,531			12,883
Convertible debenture					2,160			2,160
			Total liabilities		56,832			60,899
Commitments and contingencies					—			—
Stockholders’ equity:
	Preferred stock, Series A & A-1, $1.00 par value, 4,000,000 shares authorized; 197,000 and 160,000 issued				197			160
	Common stock, $0.15625 par value, 30,000,000 shares authorized; 10,058,544 shares issued				1,572			1,572
	Capital in excess of par value				30,510			29,593
	Retained earnings (deficit)				(1,864	)		4,617
	Accumulated other comprehensive income (loss)				2,140			(33	)
					32,555			35,909
	Treasury stock at cost:
			721,027 and 681,027 shares		(2,534	)		(2,354	)
			Total stockholders’ equity		30,021			33,555
				$	86,853		$	94,454

F-3

TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

			Year ended December 31,
			2002			2001			2000
			(in thousands, except per share data)
Revenues:
	Oil and gas sales		$	23,069		$	13,952		$	13,164
	Gain (loss) on commodity derivatives			(4,044	)		1,143			(135	)
	Lease bonuses and rentals			812			596			472
		Total revenues		19,837			15,691			13,501
Costs and expenses:
	Lease operating			6,680			3,280			2,325
	Exploration and acquisition			2,234			2,619			309
	Depreciation, depletion and amortization			5,034			4,908			2,439
	Impairment of oil and gas properties			529			1,309			—
	General and administrative			7,722			2,808			2,273
		Total costs and expenses		22,199			14,924			7,346
Operating income (loss)				(2,362	)		767			6,155
Other income (expense) Equity in earnings of unconsolidated investments				(1,186	)		(206	)		(54	)
	Gain (loss) on sale of properties and other assets			(2,129	)		(487	)		408
	Loss on sale of marketable securities			(14	)		(23	)		(54	)
	Interest and other income (expense)			(184	)		163			71
	Interest expense			(2,467	)		(1,277	)		(1,409	)
		Total other income (expense)		(5,980	)		(1,830	)		(1,038	)
Net income (loss) before income taxes				(8,342	)		(1,063	)		5,117
Provision (benefit) for income taxes				(2,235	)		(421	)		1,764
Net income (loss)				(6,107	)		(642	)		3,353
Dividends on preferred shares				374			360			360
Income (loss) applicable to common shares			$	(6,481	)	$	(1,002	)	$	2,993
Basic income (loss) per share			$	(0.69	)	$	(0.16	)	$	0.54
Diluted income (loss) per share			$	(0.69	)	$	(0.16	)	$	0.50
Weighted average shares outstanding
Basic				9,343			6,319			5,522
Diluted				9,343			6,319			6,691

See accompanying notes to the consolidated financial statements.

F-4

TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

												Accumulated
							Capital in		Retained			Other						Total
			Preferred		Common		Excess		Earnings			Comprehensive			Treasury			Stockholders'
			Stock		Stock		of Par Value		(Deficit)			Income (Loss)			Stock			Equity
Balance at December 31, 1999			$	160	$	883	$	8,235	$	2,678		$	(36	)	$	(1,269	)	$	10,651
Issuance of common stock				—		177		6,241		—			—			—			6,418
Issuance of stock options				—		—		430		—			—			—			430
Payment of preferred and common dividends				—		—		—		(412	)		—			—			(412	)
Purchase of treasury stock				—		—		—		—			—			(269	)		(269	)
Comprehensive income:
	Net income			—		—		—		3,353			—			—			3,353
	Change in fair value of available- for-sale securities, net of tax			—		—		—		—			54			—			54
	Gains reclassified to net income, net of tax			—		—		—		—			36			—			36
		Total comprehensive income																	3,443
Balance at December 31, 2000				160		1,060		14,906		5,619			54			(1,538	)		20,261
Issuance of common stock				—		13		218		—			—			—			231
Issuance of Texona Deferred Shares				—		14		503		—			—			—			517
Issuance of common stock for merger with Madison Oil Company				—		485		13,966		—			—			—			14,451
Payment of preferred dividends				—		—		—		(360	)		—			—			(360	)
Purchase of treasury stock				—		—		—		—			—			(816	)		(816	)
Comprehensive loss:
	Net loss			—		—		—		(642	)		—			—			(642	)
	Change in fair value of available- for-sale securities, net of tax			—		—		—		—			(31	)		—			(31	)
	Losses reclassified to net loss, net of tax			—		—		—		—			(56	)		—			(56	)
		Total comprehensive loss																	(729	)
Balance at December 31, 2001				160		1,572		29,593		4,617			(33	)		(2,354	)		33,555
Issuance of preferred stock				37		—		854		—			—			—			891
Payment of preferred dividends				—		—		—		(374	)		—			—			(374	)
Purchase of treasury stock				—		—		—		—			—			(180	)		(180	)
Other				—		—		63		—			—			—			63
Comprehensive loss:
	Net loss			—		—		—		(6,107	)		—			—			(6,107	)
	Foreign currency translation Adjustment			—		—		—		—			2,228			—			2,228
	Change in fair value of available- for-sale securities, net of tax			—		—		—		—			(62	)		—			(62	)
	Losses reclassified to net loss, net of tax			—		—		—		—			7			—			7
		Total comprehensive loss																	(3,934	)
Balance at December 31, 2002			$	197	$	1,572	$	30,510	$	(1,864	)	$	2,140		$	(2,534	)	$	30,021

See accompanying notes to the consolidated financial statements.

F-5

TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

					Year ended December 31,
					2002			2001			2000
					(in thousands)
Cash flows from operating activities:
	Net income (loss)				$	(6,107	)	$	(642	)	$	3,353
	Adjustments to reconcile net income (loss) to net cash provided by operating activities:
			Depreciation, depletion and amortization			5,034			4,908			2,439
			Impairment of oil and gas properties			529			1,309			—
			Loss (gain) on sale of properties			2,129			487			(408	)
			Dry holes and abandonments			1,084			1,809			51
			Amortization of undeveloped minerals			51			40			43
			Loss on sale of marketable securities			14			23			54
			Unrealized losses on commodity derivatives			2,029			—			—
			Equity in loss of unconsolidated investments			1,186			206			54
		Decrease (increase) in operating assets:
			Accounts and notes receivable			(266	)		1,177			(1,053	)
			Income taxes receivable			(512	)		—			—
			Other current assets			(13	)		(639	)		(24	)
			Other assets			124			199			619
		Increase (decrease) in operating liabilities:
			Accounts payable and accrued liabilities			2,615			1,309			95
			Income taxes payable			(279	)		(526	)		73
			Deferred tax liabilities			(1,319	)		(759	)		793
			Other			63			(45	)		55
				Net cash provided by operating activities		6,362			8,856			6,144
Cash flows from investing activities:
	Expenditures for oil and gas properties					(6,178	)		(11,979	)		(2,353	)
	Merger costs, net of cash acquired					—			(2,156	)		(129	)
	Proceeds from the sale of oil and gas properties					4,628			2,157			901
	Investment in unconsolidated entities, net					(320	)		(100	)		(156	)
	Purchase of marketable securities					(51	)		(684	)		(174	)
	Proceeds from sale of marketable securities					253			431			50
				Net cash used in investing activities		(1,668	)		(12,331	)		(1,861	)

See accompanying notes to the consolidated financial statements.

F-6

TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Cash flows from financing activities:
	Payment for debt issuance costs				(175	)		(369	)		(45	)
	Borrowings under revolving credit arrangements				4,686			11,880			2,494
	Repayments under revolving credit arrangements				(10,825	)		(6,750	)		(4,661	)
	Proceeds from issuance of stock, net				891			289			25
	Payment of preferred and common dividends				(270	)		(360	)		(412	)
	Purchase of treasury stock				(180	)		(816	)		(269	)
			Net cash provided by (used in) financing activities		(5,873	)		3,874			(2,868	)
Net increase (decrease) in cash and cash equivalents					(1,179	)		399			1,415
Cash and cash equivalents, beginning of period					2,155			1,756			341
Cash and cash equivalents, end of period				$	976		$	2,155		$	1,756
Supplemental disclosure of cash flow information:
		Income taxes paid (received)		$	(128	)	$	864		$	875
		Interest paid		$	2,089		$	1,080		$	1,234

See accompanying notes to the consolidated financial statements.

F-7

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

     Toreador Resources Corporation (“Toreador,” “we,” “us,” “our,” or the “Company”) is an independent oil and gas company engaged in foreign and domestic oil and gas exploration, development, production, leasing and acquisition activities. The accompanying consolidated financial statements are presented in U.S. dollars and in accordance with accounting principles generally accepted in the United States.

     ACQUISITION OF MADISON OIL COMPANY

     Toreador, MOC Acquisition Corporation, a wholly owned subsidiary of Toreador (“MOC”), and Madison Oil Company (“Madison”) entered into an Agreement and Plan of Merger dated October 3, 2001 (“Merger Agreement”). The transaction was consummated on December 31, 2001 by the merger of MOC with and into Madison with Madison being the surviving corporation of such merger (the “Merger”) and becoming a wholly owned subsidiary of Toreador. Pursuant to the Merger Agreement, the issued and outstanding shares of the common stock of Madison were converted into an aggregate of 3,101,573 shares of Toreador’s $0.15625 par value common stock (“Common Stock”), based on an exchange ratio of 0.118 shares of Toreador Common Stock for each issued and outstanding share of Madison common stock. Holders of Madison common stock were also given the right to receive, in cash or our common stock, 30% of certain potential payments that may be received from the Turkish government for the protection of repatriated capital based on a formula specified in the Merger Agreement under the section entitled “Conversion of Shares.” In addition, certain stock options to acquire Madison common stock became Toreador stock options exercisable for 41,300 shares of Common Stock, warrants to acquire Madison common stock became Toreador warrants exercisable for 111,509 shares of Common Stock and a Madison debenture convertible into Madison common stock has been amended and is now convertible into 319,962 shares of Common Stock. (See further discussion in Note 9).

     BASIS OF PRESENTATION

     The accompanying consolidated financial statements and related footnotes are presented in U.S. dollars and in accordance with accounting principles generally accepted in the United States. Certain prior-year amounts have been reclassified to conform to the 2002 presentation.

2.     SIGNIFICANT ACCOUNTING POLICIES

     USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

     BASIS OF CONSOLIDATION

     Toreador consolidates all of its majority-owned subsidiaries. We account for our interest in other joint ventures using the equity method. All material intercompany accounts and transactions are eliminated in consolidation. We account for our investments in entities in which we hold less than a majority interest under the equity method.

     CASH AND CASH EQUIVALENTS

     Cash and cash equivalents include cash on hand, amounts due from banks and all highly liquid investments with original maturities of three months or less. We maintain our cash in bank deposit accounts, which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts and believe we are not exposed to any significant risk on cash.

F-8

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

     CONCENTRATION OF CREDIT RISK AND ACCOUNTS RECEIVABLE

     Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash, accounts receivable, and our hedging and derivative financial instruments. We place our cash with high credit quality financial institutions. We sell oil and natural gas to various customers. Historically, we have not experienced any losses related to accounts receivable, and accordingly, we do not believe an allowance for doubtful accounts is warranted either at December 31, 2002 or 2001. Substantially all of our accounts receivable are due from purchasers of oil and gas. We place our hedging and derivative financial instruments with financial institutions and other firms that we believe have high credit ratings. For a discussion of the credit risks associated with our hedging activities, please see “Derivative Financial Instruments” below.

     MARKETABLE SECURITIES

     Toreador’s marketable securities, consisting primarily of common shares of publicly traded companies, are classified as available-for-sale. Unrealized holding gains and losses on securities available-for-sale are recorded as a component of other comprehensive income, net of tax effect. The fair values for marketable securities are based on quoted market prices. Realized gains and losses and declines in value judged to be other than temporary on available-for-sale securities are included in current earnings.

     FINANCIAL INSTRUMENTS

     The carrying amounts of financial instruments including cash and cash equivalents, short-term investments, accounts receivable, marketable securities, accounts payable and accrued liabilities, long-term debt, and the convertible debenture approximate fair value, unless otherwise stated, as of December 31, 2002 and 2001.

     DERIVATIVE FINANCIAL INSTRUMENTS

     We use various swap and option contracts to (i) reduce the effect of the volatility of price changes on the commodities we produce and sell, (ii) support our annual capital budgeting and expenditure plans and (iii) protect the amounts required for servicing outstanding debt and (iv) maximize the funds available under our existing credit facilities. In order to accomplish this objective, we enter into oil and gas swap and option agreements that fix the price of oil and gas sales within ranges determined acceptable at the time we execute the contracts.

     We are exposed to credit losses in the event of nonperformance by the counterparties to our financial instruments. We anticipate, however, that such counterparties will be able to fully satisfy its obligations under the contracts. We do not obtain collateral or other security to support financial instruments subject to credit risk but we monitor the credit standing of the counterparties. At December 31, 2002, we had no amounts receivable from our counterparties. At December 31, 2001, we had gross receivables from our counterparty of $331,000, of which $19,000 related to amounts receivable from settled trades and $312,000 related to unrealized gains on the contracts.

     We have elected not to designate the derivative financial instruments to which we are a party as hedges, and accordingly, we record such contracts at fair value and recognize changes in such fair value in current earnings as they occur.

     INVENTORIES

     At December 31, 2002 and 2001, other current assets included $891,000 and $530,000 of inventory, respectively. Those amounts consist of technical equipment and crude oil held in storage tanks. We record such inventories at the lower of actual cost or market.

     OIL AND GAS PROPERTIES

     We follow the successful efforts method of accounting for oil and gas exploration and development expenditures. Under this method, costs of successful exploratory wells and all development wells are capitalized. Costs to drill exploratory wells that do not find proved reserves are expensed. In the absence of a determination as to whether the reserves that have been found can be classified as proved, the Company carries the costs of drilling such exploratory wells as an asset for no more than one year following completion of drilling. If, after that year has passed, a determination that proved reserves have been found cannot be made, Toreador

F-9

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

will assume that the well is impaired, and charges the cost to expense. Significant costs associated with the acquisition of oil and gas properties are capitalized. Upon sale or abandonment of units of property or the disposition of miscellaneous equipment, the cost is removed from the asset account, the related reserves relieved of the accumulated depreciation or depletion and the gain or loss is credited to or charged against operations.

     Maintenance and repairs are charged to expense; betterments of property are capitalized and depreciated as described below.

     DEPRECIATION, DEPLETION AND AMORTIZATION

     We provide depreciation, depletion and amortization of our investment in producing oil and gas properties on the units-of-production method, based upon independent reserve engineers’ estimates of recoverable oil and gas reserves from the property. Depreciation expense for fixed assets is generally calculated on a straight-line basis based upon estimated useful lives of three to seven years.

     IMPAIRMENT OF ASSETS

     We evaluate producing property costs for impairment and reduce such costs to fair value if the sum of expected undiscounted future cash flows is less than net book value pursuant to Statement of Financial Accounting Standard No. 144 (Statement 144) “Accounting for the Impairment or Disposal of Long-Lived Assets.” On January 1, 2002 we adopted Statement No. 144. Because we had no properties held for sale at December 31, 2002 or 2001, adopting Statement 144 did not have a material impact on our financial position. We assess impairment of non-producing leasehold costs and undeveloped mineral and royalty interests periodically on a property-by-property basis. We charge any impairment in value to expense in the period incurred. We incurred impairment losses on our United States oil and gas producing properties of $529,000 in 2002, $1,309,000 in 2001, and zero in 2000. The impairments in 2002 were the result of several properties depleting faster than expected. There were no properties with individually significant impairments, nor was there any particular group of properties that were impaired. The impairment in 2001 was the result of overall decreases in the quantity of reserves and decreases in price, and was not concentrated on any particular group of properties.

     ASSET RETIREMENT OBLIGATIONS

     On August 15, 2001, the FASB issued Statement No. 143, Accounting for Asset Retirement Obligations. Initiated in 1994 as a project to account for the costs of nuclear decommissioning, the FASB expanded the scope to include similar closure or removal-type costs in other industries that are incurred at any time during the life of an asset. That standard requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The standard is effective for fiscal years beginning after June 15, 2002, with earlier application encouraged. We adopted Statement 143 on January 1, 2003. Upon adoption of Statement 143, we recorded asset retirement obligations totaling approximately $341,000 discounted to present value. Additionally, we recorded the cumulative effect of change in accounting principle amounting to approximately $64,000, net of related tax. We do not expect the effects of adopting Statement 143 to have a material impact on our financial position or results of operations in future years.

     GOODWILL

     On January 1, 2002, we adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (Statement 142). Under Statement 142, goodwill and indefinite-lived intangible assets are no longer amortized but are reviewed annually (or more frequently if impairment indicators arise) for impairment. Separable intangible assets that are not deemed to have an indefinite life will continue to be amortized over their useful lives (but with no maximum life). Prior to our Merger with Madison, we had no goodwill, so the adoption of this standard will have no impact on our financial position or results of operations. As the result of adopting Statement 142, we will review annually the value of goodwill recorded as a result of the Merger with Madison, or more frequently if impairment indicators arise. We recognized no goodwill impairment during 2002.

F-10

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     SIGNIFICANT ACCOUNTING POLICES (continued)

     REVENUE RECOGNITION

     We account for gas revenues using the sales method. Under this method, sales are recorded on all production sold by the Company regardless of the Company’s ownership interest in the respective property. Imbalances result when sales differ from the seller’s net revenue interest in the particular property’s reserves and are tracked to reflect the Company’s balancing position. At December 31, 2002 and 2001, the imbalance and related value were immaterial.

     STOCK-BASED COMPENSATION

     Statement of Financial Accounting Standards No. 123, (“SFAS 123”) “Accounting for Stock-Based Compensation,” encourages, but does not require, the adoption of a fair value-based method of accounting for employee stock-based compensation transactions. The Company has elected to apply the provisions of Accounting Principles Board Opinion No. 25 (“Opinion 25”), “Accounting for Stock Issued to Employees,” and related interpretations, in accounting for its employee stock-based compensation plans. Under Opinion 25, compensation cost is measured as the excess, if any, of the quoted market price of the Company’s stock at the date of the grant above the amount an employee must pay to acquire the stock.

     Had compensation costs for employees under our two stock-based compensation plans been determined based on the fair value at the grant dates under those plans consistent with the method proscribed by SFAS No. 123, our pro forma net income and earnings per share would have been reduced to the pro forma amounts listed below (in thousands):

	2002			2001			2000
Income (loss), applicable to common shares, as reported	$	(6,481	)	$	(1,002	)	$	2,993
Basic earnings (loss) per share reported		(0.69	)		(0.16	)		0.54
Diluted earnings (loss) per share reported		(0.69	)		(0.16	)		0.50
Stock-based compensation costs under the intrinsic value method included in net income (loss) reported, net of related tax		—			—			—
Pro-forma stock-based compensation costs under the fair value method, net of related tax		432			395			559
Pro-forma income (loss) applicable to common shares, as under the fair-value method		(6,913	)		(1,397	)		2,434
Pro-forma basic earnings (loss) per share under the fair value method		(0.74	)		(0.22	)		0.44
Pro-forma diluted earnings (loss) per share under the fair value method		(0.74	)		(0.22	)		0.42

     FOREIGN CURRENCY TRANSLATION

     The functional currency of the countries in which the Company operates is the U.S. dollar in the US, the Eurodollar in France and the Turkish Lira in Turkey. Gains and losses resulting from the translations of local currencies into U.S. dollars are included in other comprehensive income for the current period. The Company periodically reviews the operations of its entities to ensure the functional currency of each entity is the currency of the primary economic environment in which it operates.

     INCOME TAXES

     Toreador is subject to income taxes in the United States, France, and Turkey. The current provision for taxes on income consists primarily of income taxes based on the tax laws and rates of the countries in which operations were conducted during the periods presented. Toreador computes its provision for deferred income taxes using the liability method. Under the liability method, deferred income tax assets and liabilities are determined based on differences between financial reporting and income tax bases of assets and liabilities and are measured using the enacted tax rates and laws. The measurement of deferred tax assets is adjusted by a valuation allowance, if necessary, to recognize the future tax benefits to the extent, based on available evidence, it is more likely than not they will be realized.

F-11

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

     NEW ACCOUNTING PRONOUNCEMENTS

     In April 2002, the FASB issued Statement No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections (“Statement 145”), related to accounting for debt extinguishments, leases and intangible assets of motor carriers. The provisions of Statement 145 are effective for fiscal years beginning after May 15, 2002, with earlier adoption encouraged. Because we do not have, and we do not anticipate having, debt extinguishments or the type of lease transactions mentioned in Statement 145, we believe that adopting Statement 145 will not have a material impact on our financial position or results of operations.

     In July 2002, the FASB issued Statement No, 146, Accounting for Costs Associated with Exit or Disposal Activities (“Statement 146”). Statement 146 requires that a liability for costs associated with an exit or disposal activity should be initially recognized when it is incurred. Statement 146 differs from existing standards in that under existing standards, such costs are recognized in the period in which an entity commits to a plan of disposal. Under Statement 146, the costs will be recognized in the period when an actual disposal is under way. Examples of costs included under Statement 146 include one-time termination benefits, costs to consolidate or close facilities and to relocate employees. Statement 146 is effective for exit or disposal activities initiated after December 31, 2002. Because we currently have not committed to any disposal or exit plans that would be covered under Statement 146, adopting Statement 146 will not have a material impact on our financial position or results of operations.

     In October 2002, the FASB issued Statement No. 147, Acquisitions of Certain Financial Institutions — an Amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9 (“Statement 147”). Statement 147 is not applicable to our business.

     In December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure (“Statement 148”). Statement 148 provides alternative methods of transition to the fair value method of accounting proscribed by FASB Statement No. 123, Accounting for Stock-Based Compensation (“Statement 123”). Statement 148 also amends the disclosure provisions of Statement 123 and Accounting Principles Board Opinion No. 28, Interim Financial Reporting, to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements. Statement 148 does not require companies to account for employee stock options under the fair value method. We do not anticipate adopting the fair value method of accounting for stock-based compensation; however, we have adopted the disclosure provisions of Statement 148 in this filing.

3.     MARKETABLE SECURITIES

     Marketable securities at December 31, 2002 and 2001 consist of several issues of common and preferred stock with an aggregate fair market value of $45,000 and $348,000, respectively. We have designated these investments as “securities available for sale” pursuant to Statement of Financial Accounting Standards No. 115. The net unrealized loss related to these securities is $143,000 ($90,000 net of tax) at December 31, 2002 and $56,000 ($33,000 net of tax) at December 31, 2001. During 2002, securities with historical cost of $256,000 were sold for $242,000, resulting in a net loss of $14,000 ($9,000 net of tax). During 2001, securities with historical cost of $454,000 were sold for $431,000, resulting in a net loss of $23,000 ($14,000 net of tax). The $14,000 net loss in 2002 includes unrealized losses of $7,000 which were reclassified from accumulated other comprehensive income. The $23,000 net loss in 2001 reflects unrealized gains of $56,000 which were reclassified from accumulated other comprehensive income.

F-12

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.     ACCOUNTS AND NOTES RECEIVABLE

Accounts and notes receivable consist of the following:

	December 31,
	2002		2001
	(in thousands)
Accrued oil and gas sales receivable	$	3,485	$	2,721
Receivable from unconsolidated subsidiary		250		500
Proceeds receivable from property sales		48		66
Other receivables		72		169
	$	3,855	$	3,456

F-13

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.     PROPERTIES AND EQUIPMENT

     Oil and Gas Properties consist of the following:

	December 31,
	2002			2001
	(in thousands)
Undeveloped mineral and royalty interests	$	7,270		$	7,322
Licenses and concessions		3,000			3,000
Non-producing leaseholds		1,697			870
Producing leaseholds and intangible drilling costs		57,371			61,398
Producing royalty interests		12,338			13,496
Lease and well equipment		1,632			3,191
Furniture, fixtures and office equipment		1,082			757
		84,390			90,034
Accumulated depreciation, depletion and amortization		(12,518	)		(12,006	)
	$	71,872		$	78,028

     During 2002, the Company sold various properties and equipment for $4,628,000 (net of closing costs) resulting in a loss of $2,129,000 before tax.

6.     INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES

     In July 2000, we acquired 35% of EnergyNet.com, Inc. (“EnergyNet”), an Internet based oil and gas property auction company. At December 31, 2002 and 2001, our investment in EnergyNet amounted to $400,000 and $464,000, respectively. During 2002, 2001 and 2000, we recorded equity in the loss of EnergyNet of $64,000, $227,000 and $64,000 respectively.

     In April 2000, we acquired a 50% interest in Capstone Royalty, LLC (“Capstone”), a joint venture formed to acquire mineral interests at county auctions in west Texas and develop those interests. Our investment in Capstone amounted to $108,000 and $133,000 at December 31, 2002 and 2001, respectively. We recorded equity in the earnings of Capstone amounting to zero in 2002, $8,000 in 2001 and $10,000 in 2000. In 2002, we received a distribution of $25,000 from Capstone.

     As part of our Merger with Madison (see Note 9), we acquired a 25% interest in Trinidad Exploration and Development, Ltd. (“TED”). TED is involved in oil exploration in the Southwest Cedros Peninsula of Trinidad. Our investment in TED amounts to $2,652,000 at December 31, 2002 before any impairment. In addition to our investment in TED, we also have a note receivable of $500,000 from TED. During 2002, we were unsuccessful in our arbitration case against TED’s majority shareholder, and our interest was diluted from 25% to 16.33%. Due to the reduction in our ownership, we recorded a charge of approximately $920,000 as equity in earnings of unconsolidated investments, reflecting the diminished valuation of the ultimate amount estimated to be recovered from our investment. Additionally, we have evaluated our ability to collect our receivable from TED and have reserved 50% of the receivable, or $250,000.

7.     DERIVATIVE FINANCIAL INSTRUMENTS

     We utilize commodity derivative instruments as part of our risk management program. These transactions are generally structured as either swaps or collar contracts. A swap can be described as having the effect of an outright sale at a specific price. A collar has the effect of creating a sale only if a floor or ceiling price is exceeded. These instruments (i) reduce the effect of the price fluctuations of the commodities we produce and sell; (ii) support our annual capital budgeting and expenditure plans; (iii) protect the amounts required for servicing outstanding debt; and (iv) maximize the funds available under our existing credit facilities. The trading party that represents the other side of each of these transactions is known as a “counterparty.” The counterparty of our United States transactions is Coral Energy Holdings, L.P., an affiliate of Royal Dutch/Shell. The counterparty of our French transactions is Barclays Capital.

     The following table lists our open natural gas derivative contracts as of December 31, 2002. All contracts are based on NYMEX pricing. We estimated the fair value of the option agreement at December 31, 2002, from quotes by the counterparty representing the amounts we would expect to receive or pay to terminate the agreements on that date. We estimated the fair value of the swap

F-14

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.     DERIVATIVE FINANCIAL INSTRUMENTS (continued)

agreement based on the difference between the strike prices and the forward NYMEX prices for each determination period multiplied by the notional volume for each period.

									Fair Value -
			Notional Volume per		Aggregate Volume		Strike Price per		Gain/(Loss)
Contract Type	Effective Date	Termination Date	Month (MMBtu)(1)		(MMBtu)(1)		MMBtu		December 31, 2002
Swap	February 2003	December 2003		30,000		330,000	$	3.900	$	(210,960	)
	January 2004	December 2004		50,000		600,000	$	3.920	$	(198,950	)
Put Option	February 2003	December 2003		80,000		880,000	$	3.250	$	52,959
	January 2004	December 2004		50,000		600,000	$	3.250	$	113,257
Call Option	January 2003	December 2003		80,000		880,000	$	4.850	$	(346,012	)
	January 2004	December 2004		50,000		600,000	$	5.275	$	(205,272	)

(1)  MMBtu — Million British thermal units.

     The following table lists our open crude oil derivative contracts as of December 31, 2002. We estimated the fair value of the agreement based on the difference between the strike prices and the forward index prices for each determination period multiplied by the notional volume for each period.

								Fair Value -
			Notional Volume per		Aggregate Volume			Gain/(Loss)
Contract Type	Effective Date	Termination Date	Month (Bbls)		(Bbls)		Strike Price per Bbl	December 31, 2002
							$21.00 Floor
Brent Crude Collar	January 2003	December 2003		20,000		240,000	$26.00 Ceiling	$	(241,000	)

     See “Note 2. Accounting Policies” for more information.

8.     LONG-TERM DEBT

     Long-term debt consists of the following:

	December 31,
	2002		2001
	(in thousands)
Revolving line of credit with Bank of Texas, N.A	$	18,760	$	20,374
Revolving line of credit with Barclays Bank, PLC		14,600		19,125
		33,360		39,499
Less: current portion		6,500		2,625
	$	26,860	$	36,874

F-15

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.     LONG-TERM DEBT (continued)

     REVOLVING LINE OF CREDIT WITH BANK OF TEXAS, N.A.

     On February 16, 2001, the Company entered into a $75 million credit agreement with Bank of Texas, National Association (the “Texas Facility”) that matures on February 16, 2006. The majority of the Company’s United States oil and gas properties are pledged as collateral under the Texas Facility.

     On November 8, 2001, the Texas Facility was amended to bifurcate the amounts outstanding into two tranches. Tranche A represents all amounts outstanding up to $18,024,750, and Tranche B represents all amounts outstanding in excess of that amount. On May 9, 2002, the Texas Facility was further amended to specify that all amounts under Tranche B be repaid by July 2002. On August 1, 2002, the Texas Facility was amended extending the due date for Tranche B to November 2002 and increasing Tranche A to $20,000,000. On September 23, 2002, the Texas Facility was amended for the fourth time. The fourth amendment sets the borrowing base at $19,375,000 and calls for monthly commitment reductions of $150,000 until February 16, 2006, at which time all outstanding principal and interest must be repaid. Accordingly, we have included $1.8 million in current portion of long-term debt on the balance sheet.

     Amounts outstanding under Tranche A bear interest at the Stated Rate, defined as: the lesser of (i) the difference between the prime rate of interest on corporate loans (4.25% at December 31, 2002) less the Applicable Margin, as defined below; or (ii) the sum of the LIBOR rate (1.38% at December 31, 2002) plus the LIBOR spread as defined below:

% of Borrowing Base Outstanding	Applicable Margin			LIBOR Spread
Greater than or equal to 85%		0.25	%		2.75	%
Between 75% and 85%		1.00	%		2.00	%
Less than 75%		1.25	%		1.75	%

     Amounts due under Tranche B were repaid in full during 2002. As of December 31, 2002 the total amount outstanding of $18,760,000 fell under Tranche A. The Texas Facility contains various affirmative and negative covenants. These covenants, among other things, limit additional indebtedness, the sale of assets and the payment of dividends on common stock, change of control and management and require us to meet certain financial requirements. Specifically, we must maintain a current ratio of 1.00 to 1.00 (exclusive of amounts due under revolving credit arrangements) and a debt service coverage ratio of not less than 1.25 to 1.00. As of December 31, 2002, we were in compliance with all covenants.

     REVOLVING LINE OF CREDIT WITH BARCLAYS BANK, PLC

     As part of our Merger with Madison (see Note 9), we assumed a revolving credit facility with Barclays Bank, Plc (the “Barclays Facility”) that matures on December 31, 2005 and is secured by the production from our French properties. The Barclays Facility is structured in three separate tranches with interest rates based on LIBOR plus 2.5% to 3%. Total borrowings are limited to the lesser of the nominal facility amount or a semi-annual borrowing base. Barclays previously advised us that it intended to withdraw from the reserve-based lending business and to transfer the balance of its reserve-based loans to one or more third-party banking institutions Until a third-party lender assumes the facility, we will not be allowed to borrow any additional funds under the Barclays Facility. In the interim, we are required to repay $300,000 in January 2003 and to make monthly principal payments subsequent to January 2003 of $400,000 until December 31, 2005, at which time all outstanding principal and interest is due. Accordingly, we have included $4.7 million in the current portion of long-term debt on the balance sheet.

     We diligently have explored alternatives to refinance all or part of our existing capital structure, including the Barclays Facility. We have received a commitment to provide funds necessary for the extinguishment of the Barclays Facility. The form of the commitment is based on a third party institution providing a structured financing of up to $45 million in a combination of fixed term, floating rate senior debt, subordinated, fixed term, fixed rate debt, and equity. However, no assurance can be given that this structured financing will occur. If the third party institution is unable to provide a commitment for the financing on or before April 30, 2003, we have received a binding commitment to provide up to $15 million to refinance the Barclays Facility which would be based on a five-year amortization payable in equal monthly installments of $250,000 at an interest rate to be determined. In addition, we are pursuing other alternatives, including other refinancing options and the possible sale of our French properties as a means of discharging the Barclays Facility and providing additional working capital.

     Annual principal maturities under the Texas and Barclays Facilities are as follows (in thousands):

2003	$	6,500
2004		6,600
2005		6,900
2006		13,360
Total	$	33,360

F-16

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.     MERGER WITH MADISON OIL COMPANY

     As discussed in Note 1, we completed the Merger with Madison Oil Company on December 31, 2001. Madison is an independent producer of oil and gas with interests in undeveloped acreage and producing oil properties in France and Turkey, and held a 25% interest in Trinidad Exploration and Development, Ltd. (“Trinidad”). The interest in Trinidad has subsequently been reduced to 11.28%. We acquired all of the outstanding shares of Madison’s common stock in exchange for the consideration discussed in Note 1. The primary reasons for the merger were to (i) expand the diversity of Toreador’s portfolio of oil and gas assets to include international activities (ii) to offer a larger, more diverse company to our current and potential investors, and (iii) to combine the talents of both companies’ management to strengthen Toreador’s pre-existing exploration, operating and exploitation capacity. As the Merger was effective on December 31, 2001, no results of Madison’s operations are included in Toreador’s results of operations for the years ended December 31, 2000 and 2001.

     CONTINGENT TURKISH PAYMENT

     Two of Madison’s subsidiaries that operate in Turkey may be owed cash by the Turkish government pursuant to Section 116 of the Turkish Petroleum Regulations for prior investments made by such subsidiaries in Turkey for petroleum operations prior to the effective date of the Merger. Under the existing Petroleum Law of Turkey, capital which is invested by foreign companies for projects such as oil and gas exploration can be registered with the General Directorate of Petroleum Affairs, thereby qualifying for protection against adverse changes in the exchange rate between the time of the initial investment and the time such capital is repatriated out of Turkey. Since 1997, the Turkish government has suspended such protection for repatriated capital. As holder of approximately $50 million of registered capital, during the second quarter of 2001, Madison filed suit in an administrative court in Turkey to attempt to restore the exchange rate protections afforded under the law. Numerous other non-Turkish oil and gas companies have filed similar claims. In March 2002 a lower level court ruled in favor of Madison. The ruling was subject to an automatic appeal that was heard in December 2002. We are currently awaiting the written ruling from the court before any further action can be taken and understand that we may not have been successful in this appeal.

     Toreador has agreed to (i) apply for such money on or prior to the second anniversary date of the Merger becoming effective and (ii) attempt to receive such money on or prior to the third anniversary date of the Merger becoming effective. If on or prior to the third anniversary date of the Merger Toreador receives any such payments for which an application is made on or prior to the second anniversary date of the Merger, the holders of Madison common stock on the effective date of the Merger will receive in cash or in shares of Toreador common stock, an amount equal to 30% of the amount received, minus certain expenses, such as all costs and expenses that are incurred by Toreador in connection with processing the application for such money. If any shares of Toreador common stock are issued to satisfy this contingent obligation, the shares will be priced based on the weighted average trading prices of Toreador common stock for the 20 consecutive trading days ending at least three business days prior to the date such shares are delivered for mailing to the Madison stockholders.

     The maximum Turkish payment has been estimated at $30,000,000 (approximately 60% of Madison’s registered capital). This number was estimated based on Madison’s then existing registered capital and a reasonable estimate as determined by Toreador’s management in consultation with Madison’s management and Madison’s Turkish legal advisors of the amount of such registered capital that could be recovered on or prior to the second anniversary date of the Merger becoming effective given the anticipated process in Turkey and the timing of the filing of the claim and the registration process. The former Madison stockholders are entitled to receive 30% of such $30,000,000 or $9,000,000 (less certain expenses which are to be paid out of this amount and which are not currently estimable). If Toreador common stock then has a weighted trading value (as specified above) of $3.00 per share, 3,000,000 shares of Toreador common stock would be issuable to former Madison stockholders. However, the number of such shares issued may vary materially depending on the amount received, the market price of Toreador’s common stock and the total expenses.

     PURCHASE PRICE VALUATION AND ALLOCATION

     The following table shows the value of the consideration given to former Madison shareholders plus the cash costs of completing the merger, and the allocation of that amount to the assets acquired and the liabilities assumed. We made our purchase price allocation based on the best estimates available at the time of preparation of these financial statements. We will continue to evaluate such evidence and adjust our purchase price allocation if warranted. Due to the uncertainty of the collection of the Contingent Turkish Payment, we have not allocated any value to a receivable for such money.

F-17

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.     MERGER WITH MADISON OIL COMPANY (continued)

PURCHASE PRICE VALUATION (in thousands)
	3,101,573 Toreador common shares at $4.60			$	14,267	(1)
	Fair value of options and warrants				184	(2)
	Cash costs of merger, net of cash acquired				2,156
				$	16,607
PURCHASE PRICE ALLOCATION (in thousands)
	Assets acquired:
		Accounts and notes receivable		$	1,955
		Other current assets			1,403
		Properties and equipment			41,307
		Investments in unconsolidated entities			2,259
		Goodwill			5,076	(3)
		Other assets			35
	Liabilities assumed:
		Accounts payable and accrued liabilities			3,420
		Current portion of long-term debt			2,625
		Income taxes payable			539
		Deferred tax liabilities			10,184
		Long-term debt			16,500
		Convertible debenture			2,160
			Net assets acquired	$	16,607

(1)	$4.60 represents the closing price of Toreador common stock on December 31, 2001, the effective date of the merger.
(2)	We estimated the fair value of the options and warrants using the Black Scholes model, using historic volatility measured over periods similar to the expected lives of the options and warrants.
(3)	Goodwill represents the net purchase price plus the liabilities we assumed minus the fair value of the assets acquired.

     As part of our Merger with Madison, we assumed and amended a convertible debenture (“Debenture”) payable to PHD Partners LP. The general partner of PHD Partners LP is a corporation wholly owned by David M. Brewer, a director and significant shareholder of Toreador. The debenture bears interest at 10% per annum and is due on March 31, 2006. At the holders’ option, the debenture can be converted into common stock at a ratio of $6.75 per share. We have 319,962 common shares reserved for issuance related to the conversion of the convertible debenture.

10. CAPITAL

     Toreador has 160,000 shares of nonvoting Series A Preferred Stock outstanding at December 31, 2002 and 2001. At the option of the holder, the Series A Preferred Stock may be converted into common shares at a price of $4.00 per common share (conversion would amount to 1,000,000 Toreador common shares). The Series A Preferred Stock accrues dividends at an annual rate of $2.25 per share payable quarterly in cash. At any time after December 31, 2004, we may elect to redeem for cash any or all shares of Series A Convertible Preferred Stock. The optional redemption price per share is the sum of (1) $25.00 per share of the Series A Convertible Preferred Stock plus (2) any accrued unpaid dividends, and such sum is multiplied by a declining multiplier. The multiplier is 105% until November 30, 2005, 104% until November 30, 2006, 103% until November 30, 2007, 102% until November 30, 2008, 101% until November 30, 2009, and 100% thereafter.

     In November 2002, we issued 37,000 shares of Series A-1 Preferred Stock. At the option of the holder, the Series A-1 Preferred Stock may be converted into common shares at a price of $4.00 per common share (conversion would amount to 231,250 Toreador common shares). The Series A-1 Preferred Stock accrues dividends at an annual rate of $2.25 per share payable quarterly in cash. At

F-18

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. CAPITAL (continued)

any time on or after November 1, 2007, we may elect to redeem for cash any or all shares of Series A-1 Convertible Preferred Stock. The optional redemption price per share is the sum of (1) $25.00 per share of the Series A Convertible Preferred Stock plus (2) any accrued unpaid dividends, and such sum is multiplied by a declining multiplier. The multiplier is 105% until October 31, 2008, 104% until October 31, 2009, 103% until October 31, 2010, 102% until October 31, 2011, 101% until October 31, 2012, and 100% thereafter.

     On September 19, 2000, we completed a merger with Texona Petroleum Corporation (“Texona”). We exchanged a total of 1,115,000 of our common shares for all of Texona’s outstanding shares. We issued 1,025,000 of those shares to Texona stockholders during 2000. In April 2001, we received approval from a majority of our stockholders, via written consent, to issue the remaining 90,000 shares (the “Deferred Shares”). We issued the Deferred Shares during May 2001. We recorded the fair value of the Deferred Shares as an addition to properties and equipment, together with an increase to deferred tax liabilities, which represents the difference between book and income tax bases of the related assets.

     As part of our Merger with Madison (see Note 9), we issued warrants for the purchase of 111,509 shares of our common stock. The warrants have exercise prices ranging from $4.30 to $9.23 and expire from May 25, 2002 to November 6, 2010. In 2002, 88,499 warrants with a price of $9.23 expired without being exercised. There are 4,130 warrants at $8.05 that expire in July 2010, 11,800 warrants at $5.37 that expire in August 2010 and 7,080 warrants at $4.30 that expire in November 2010.

11. INCOME TAXES

     The Company’s provision (benefit) for income taxes consists of the following:

		Year ended December 31,
		2002			2001			2000
		(in thousands)
Current:
	U.S. Federal	$	(425	)	$	248		$	875
	U.S. State		48			90			96
	Foreign		1,912			—			—
Deferred:
	U.S. Federal		(1,871	)		(696	)		729
	U.S. State		(170	)		(63	)		64
	Foreign		(1,729	)		—			—
Provision (benefit) for income taxes		$	(2,235	)	$	(421	)	$	1,764

F-19

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.     INCOME TAXES (continued)

     The primary reasons for the difference between tax expense at the statutory federal income tax rate and the Company’s provision for income taxes were:

	Year ended December 31,
	2002			2001			2000
	(in thousands)
Statutory tax at 34%	$	(2,836	)	$	(361	)	$	1,740
Rate differential on foreign operations		8			—			—
Statutory depletion in excess of basis		—			(129	)		(148	)
State income tax, net		(81	)		18			160
Adjustments to valuation allowance		553			—			—
Other		121			51			12
Provision (benefit) for income taxes	$	(2,235	)	$	(421	)	$	1,764

     The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2002 and 2001 were as follows:

			December 31,
			2002			2001
			(in thousands)
Deferred tax assets:
	Net operating loss carryforward — United States		$	1,888		$	188
	Net operating loss carryforward — Foreign			3,924			3,636
	Equity method investments			—			101
	Unrealized loss on marketable securities			53			21
	Unrealized loss on derivative financial instruments			294			—
	Other			152			—
	Gross deferred tax assets			6,311			3,946
	Valuation allowance			(3,338	)		(2,785	)
		Net deferred tax assets		2,973			1,161
Deferred tax liabilities:
	Leasehold costs — United States			(580	)		(1,830	)
	Leasehold costs — Foreign			(10,428	)		(8,810	)
	Intangible drilling and development costs			(420	)		(734	)
	Lease and well equipment			(30	)		(117	)
	Unrealized gain on derivative financial instruments			—			(115	)
	Investments in foreign subsidiaries			(2,279	)		(2,415	)
	Unrealized foreign currency translation gains			(1,147	)		—
	Other			(620	)		(23	)
	Gross deferred tax liabilities			(15,504	)		(14,044	)
		Net deferred tax liabilities	$	(12,531	)	$	(12,883	)

     Our Merger with Madison resulted in a net deferred tax liability of $10.2 million due to the difference between the book and tax bases of the assets acquired and the benefit of net operating loss carryforwards. The following table summarizes our net operating loss by country and their respective expiration dates. We have recorded a valuation allowance based on the difference between the available net operating loss carryforwards and our estimates of the amount of such carryforwards we will be able to use to offset taxable income prior to the expiration of such carryforwards (in thousands).

F-20

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. INCOME TAXES (continued)

			United States		France		Turkey		Total
Expiring in:
	2003		$	—	$	—	$	—	$	—
	2004			5,103		736		4,927		10,766
	2005			—		—		224		224
	2006			—		745		199		944
	2007			—		—		21		21
	Non-expiring loss carryforward			—		4,623		—		4,623
		Total	$	5,103	$	6,104	$	5,371	$	16,578

12. EARNINGS PER SHARE

     In accordance with the provisions of FASB Statement of Financial Accounting Standards No. 128, “Earnings per Share,” basic earnings per share is computed on the basis of the weighted-average number of common shares outstanding during the periods. Diluted earnings per share is computed based upon the weighted-average number of common shares plus the assumed issuance of common shares for all potentially dilutive securities.

				Year ended December 31,
				2002			2001			2000
				(in thousands, except per share data)
Basic earnings per share:
	Numerator
		Net income (loss)		$	(6,107	)	$	(642	)	$	3,353
		Less: dividends on preferred shares			374			360			360
		Net income (loss) applicable to common shares		$	(6,481	)	$	(1,002	)	$	2,993
	Denominator
			Common shares outstanding		9,343			6,319			5,522
			Basic earnings per share	$	(0.69	)	$	(0.16	)	$	0.54
Diluted earnings per share:
	Numerator
		Net income (loss)		$	(6,107	)	$	(642	)	$	3,353
		Less: dividends on preferred shares			374			360			N/A	(2)
		Net income (loss) applicable to commons share		$	(6,481	)	$	(1,002	)	$	3,353
	Denominator
		Common shares outstanding			9,343			6,319			5,522
		Common stock options and warrants			N/A	(1)		N/A	(1)		169
		Conversion of preferred shares			N/A	(1)		N/A	(1)		1,000
		Conversion of debentures			N/A	(1)		N/A	(1)		—
			Diluted shares outstanding		9,343			6,319			6,691
			Diluted earnings (loss) per share	$	(0.69	)	$	(0.16	)	$	0.50

(1)	Due to the net loss for the years ended December 31, 2002 and 2001, there are no dilutive shares.
(2)	Since we assume that the preferred shares were converted into common shares, there would have been no preferred dividends paid.

F-21

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. BENEFIT PLANS

     The Company had a noncontributory defined benefit pension plan that was cancelled effective January 1, 2000. The benefits were based on years of service and the employee’s compensation. A full distribution was made to each eligible employee during 2000. At the time of the cancellation of the defined benefit plan, Toreador established a 401(k) retirement savings plan. Employees are eligible to defer portions of their salaries, limited by Internal Revenue Service regulations. Employer matches are discretionary, and are determined annually by the board of directors. Such discretionary matches amounted to $34,000 in 2002, $25,000 in 2001, and $15,000 in 2000.

14. STOCK COMPENSATION PLANS

     We have granted stock options to key employees and directors of Toreador as described below.

     In May 1990, we adopted the 1990 Stock Option Plan (“the 1990 Plan”). The 1990 Plan, as amended, provides for grants of up to 500,000 stock options to employees and directors at exercise prices greater than or equal to market on the date of the grant. On May 30, 2002, we amended the 1990 Plan increasing the grants available to 1,000,000.

     In December 2001, we adopted the 2002 Stock Option Plan (“2002 Plan”). The 2002 Plan provides for grants of up to 500,000 stock options to employees and directors at exercise prices greater than or equal to market on the date of the grant.

     In September 1994, we adopted the 1994 Nonemployee Director Stock Option Plan (“Nonemployee Director Plan”). The Nonemployee Director Plan provides for grants of up to 200,000 stock options to Nonemployee directors of Toreador at exercise prices greater than or equal to market on the date of the grant. On May 30, 2002, we amended the Nonemployee Director Plan increasing the grants available to 500,000

     The Board of Directors grants options under our plans periodically. Generally, option grants are exercisable in equal increments over a three-year period, and have a maximum term of 10 years.

     A summary of stock option transactions is as follows:

	2002					2001					2000
				WEIGHTED AVERAGE					WEIGHTED AVERAGE					WEIGHTED AVERAGE
	SHARES			EXERCISE PRICE		SHARES			EXERCISE PRICE		SHARES			EXERCISE PRICE
Outstanding at January 1		1,143,440		$	4.56		1,012,540		$	4.27		745,000		$	4.24
Granted		361,000			4.63		231,300			5.23		277,540			4.50
Exercised		—			—		(80,400	)		3.18		(10,000	)		2.50
Forfeited		(70,334	)		5.13		(20,000	)		3.44		—			—
Outstanding at December 31		1,434,106		$	4.57		1,143,440		$	4.56		1,012,540		$	4.27
Exercisable at December 31		936,410		$	4.42		725,800		$	4.23		571,341		$	3.88

     For stock options granted during 2002 the following represents the weighted-average exercise prices and the weighted-average fair value based upon whether or not the exercise price of the option was greater than, less than or equal to the market price of the stock on the grant date:

	WEIGHTED-AVERAGE		WEIGHTED-AVERAGE
OPTION TYPE	EXERCISE PRICE		FAIR VALUE
Exercise price greater than market price	$	4.96	$	1.51
Exercise price equal to market price		4.08		1.93

F-22

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. STOCK COMPENSATION PLANS (continued)

     The following table summarizes information about the fixed price stock options outstanding at December 31, 2002:

						Weighted Average
						Remaining
						Contractual Life in
Exercise Price		Number Outstanding		Number Exercisable		Years
$	2.270		14,750		4,917		8.67
	2.450		26,550		8,850		8.55
	2.500		55,000		55,000		5.04
	2.750		60,000		60,000		5.74
	3.000		25,000		25,000		6.42
	3.120		72,640		72,640		7.72
	3.250		10,000		10,000		1.69
	3.500		20,000		20,000		1.69
	3.625		10,000		10,000		1.13
	3.875		25,000		25,000		6.83
	4.000		50,000		50,000		6.83
	4.120		120,000		—		9.42
	4.510		20,000		—		9.13
	5.000		636,000		455,000		6.97
	5.500		122,500		81,670		7.38
	5.750		81,666		31,666		7.56
	5.950		85,000		26,667		8.42
$	4.610		1,434,106		936,410		7.13

     At December 31, 2002, there were 565,894 shares available for grant under existing plans.

F-23

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. STOCK COMPENSATION PLANS (continued)

     The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	2002			2001			2000
Dividend yield per share		—			—			—
Volatility		34	%		46	%		59	%
Risk-free interest rate		2.8	%		4.1% - 5.1	%		5.9% - 6.6	%
Expected lives	10 years			5 years			3-5 years

15. COMMITMENTS AND CONTINGENCIES

     We lease our office space under non-cancelable operating leases, expiring during 2006 and 2007. We also sublease portions of the leased space to one related party and two unrelated parties under non-cancelable sub-leases that expire on June 30, 2006. The following is a schedule of minimum future rentals under the our non-cancelable operating leases, giving effect to the non-cancelable sub-leases, as of December 31, 2002 (in thousands):

2003	$	410
2004		406
2005		409
2006		414
2007		239
		1,878
Less: minimum rents from subleases		312
	$	1,566

     Net rent expense totaled $362,000 in 2002, $128,000 in 2001, and $86,000 in 2000.

     Karak Petroleum. Madison and its wholly-owned subsidiary Trans-Dominion Holdings Ltd. were named as defendants in a complaint filed in Alberta, Canada, in 1999. The complaint arose from a dispute between Karak Petroleum, a subsidiary of Trans-Dominion Holdings, and the operator of an exploratory well in Pakistan in 1994 in which Karak was a joint interest partner. The plaintiffs alleged that they were owed approximately $500,000. On August 7, 2002, we reached an agreement with the plaintiffs in this matter. Under the terms of the agreement, we agreed to pay the plaintiffs $400,000 for full release of liability. Written documentation reflecting the foregoing was finalized on August 29, 2002. The agreement required that we remit the $400,000 in two installments. The first installment of $50,000 was paid on August 29, 2002, and the remaining $350,000 was to be paid by February 3, 2003. This liability was recorded in 2002. In February 2003, the plaintiffs agreed to accept the $350,000 in monthly installments payable at the beginning of each month beginning February 2003.

     Turkish Registered Capital. Under the existing Petroleum Law of Turkey, capital which is invested by foreign companies for projects such as oil and gas exploration can be registered with the General Directorate of Petroleum Affairs, thereby qualifying for protection against adverse changes in the exchange rate between the time of the initial investment and the time such capital is repatriated out of Turkey. Since 1997 the Turkish government has suspended such protection for repatriated capital. As holder of more than $50 million of registered capital, we have filed suit in Turkey to attempt to restore the exchange rate protections afforded under the law. No amounts are accrued related to this contingency. Holders of Madison common stock have the right to receive, in cash or our common stock, 30% of certain potential payments that may be received from the Turkish government for the protection of repatriated capital. In March 2002 a lower level court ruled in favor of Madison. The ruling was subject to automatic appeal that was heard in December 2002. We are currently awaiting their ruling. We cannot predict the outcome of this matter.

     Trinidad Arbitration. At December 31, 2001, we held a 25% interest in Trinidad Exploration and Development, Ltd. (“TED”), a Trinidad company engaged in oil and gas exploration. Until August 2000, TED was a wholly-owned subsidiary of Madison, at which time Madison sold a 75% interest to another company. Under the terms of the sale, the buyer was required to fund $4.0 million in costs of drilling and exploration before Madison was required to contribute additional amounts in accordance with its 25% shareholding. During 2001, TED was primarily engaged in a seismic program to conduct exploration on a license interest in the Southwest Peninsula of Trinidad. In late August, Madison received an initial billing for capital contributions to fund the ongoing exploration. The operator

F-24

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. COMMITMENTS AND CONTINGENCIES (continued)

claimed, however, that Madison did not make timely payments and that Madison’s interest in TED should be reduced from 25% to 12.5%. On September 18, 2002, we received a ruling from the American Arbitration Association related to this matter. The arbitrator ruled that certain payments by Toreador’s subsidiary were delinquent, and, according to the terms of the shareholder agreement, Toreador’s interest in TED has been reduced from 25% to 16.33%. Since the ruling, our interest has been further reduced to 11.28%, the result of our non-participation in certain capital and operating costs incurred by TED.

     From time to time, we are named as a defendant in other legal proceedings arising in the normal course of business. In our opinion, the final judgment or settlement, if any, which may be awarded with any suit or claim would not have a material adverse effect on our financial position.

16. RELATED PARTY TRANSACTIONS

     William I. Lee, a director of the Company also owns Wilco Properties, Inc. We entered into a technical services agreement with Wilco Properties, Inc. (“Wilco”) effective February 1, 1999 whereby we provided accounting and geological management services for a monthly fee of $7,250. On June 1, 2002, we terminated the agreement, but continued to provide limited services to Wilco during the transition and charged Wilco a reduced monthly fee through the end of 2002. We recorded reductions to general and administrative expense of $47,250 in 2002, and $87,000 in both 2001 and 2000 related to this agreement. We had receivables from Wilco related to this arrangement amounting to $11,000 at December 31, 2002, $29,000 at December 31, 2001, and $21,750 at December 31, 2000. The Company also subleases office space to Wilco pursuant to a sub-lease agreement. We recorded reductions to rent expense totaling $40,000 in 2002, $29,000 in 2001, and $15,000 in 2000 related to the sublease with Wilco. We have an informal agreement with Wilco under which one of the two companies incurs, on behalf of the other, certain miscellaneous expenses that are subsequently reimbursed by the other company. We had amounts receivable related to this arrangement of $5,000 and $27,000 at December 31, 2002 and 2001, respectively. There were no amounts due to or from Wilco at December 31, 2000 under this arrangement.

     On November 1, 2002, pursuant to a private placement we issued $925,000 of Series A-1 Convertible Preferred Stock to certain of our directors or entities controlled by certain of our directors. The Series A-1 Convertible Preferred Stock is governed by a certificate of designation. The Series A-1 Convertible Preferred Stock was sold for a face value of $25.00 per share, and pays an annual cash dividend of $2.25 per share that results in an annual yield of 9.0%. At the option of the holder, the Series A-1 Convertible Preferred Stock may be converted into common shares at a price of $4.00 per common share. The $4.00 conversion price was higher than the market price of our common stock at the time of issuance. The Series A-1 Convertible Preferred Stock is redeemable at our option, in whole or in part, at any time on or after November 1, 2007. The optional redemption price per share is the sum of (1) $25.00 per share of the Series A Convertible Preferred Stock plus (2) any accrued unpaid dividends, and such sum is multiplied by a declining multiplier. The multiplier is 105% until October 31, 2008, 104% until October 31, 2009, 103% until October 31, 2010, 102% until October 31, 2011, 101% until October 31, 2012, and 100% thereafter. In connection with the securities purchase agreement, the parties entered into a registration rights agreement effective November 1, 2002, among Toreador and the persons party thereto which provides for the registration of the common stock issuable upon conversion of the Series A-1 Convertible Preferred Stock.

     The sale of the Series A-1 Convertible Preferred Stock was effected in reliance upon the exemption from securities registration afforded by the provisions of Section 4(2) of the Securities Act of 1933, as amended, and Regulation D as promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended.

     In 2002, we acquired Wilco Turkey Ltd (“WTL”) from Wilco Properties, Inc. (“WPI”). WTL’s primary asset is an interest (ranging from 52.5% to 87.5%) in exploration licenses covering 2.2 million acres in the Thrace Basin and in the central and southeast areas of Turkey. We also acquired from F-Co Holdings Kandamis (“F-Co”) additional interests (ranging from 7.5% to 12.5%) in the same exploration licenses. The purpose of the acquisition was to obtain, explore and possibly develop the acreage covered by the licenses. The acreage in the Thrace Basin is adjacent to or near the acreage we held prior to the acquisition of WTL. In exchange for all of the outstanding common stock of WTL, we have agreed to give WPI an overriding royalty interest in any successful wells we drill on the acreage covered by the exploration licenses we acquired. We have also agreed to give F-Co, in exchange for its interest in the acreage, an overriding royalty interest in any successful wells we drill on the acreage. As of the acquisition date, there were no outstanding liabilities associated with WTL. We did not convey value to WPI or F-Co on the acquisition date, or assume any liabilities; therefore, the fair value of the transaction was zero. We have allocated no value to the assets acquired from WTL and F-Co. WPI is controlled by William I. Lee, a director and shareholder, and F-Co is owned by Peter L. Falb, a director and shareholder.

F-25

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. RELATED PARTY TRANSACTIONS (continued)

     We own a 35% interest in EnergyNet.com, Inc., an Internet based oil and gas property auction company. We paid commissions on property sales to EnergyNet totaling approximately $369,000 during 2002, $187,000 during 2001, and $25,000 during 2000.

     The Company entered into a consulting agreement with Earl Rossman, Jr. effective October 1, 2000, whereby Mr. Rossman provides consulting services for the Company for a monthly fee of $13,000. Mr. Rossman was President of Texona Petroleum Corporation immediately prior to the execution of the Merger Agreement. The consulting agreement expired on September 30, 2001. The Company paid fees totaling $117,000 during 2001 and $39,000 during 2000.

17. INFORMATION ABOUT OIL AND GAS PRODUCING ACTIVITIES AND OPERATING SEGMENTS

     We have operations in only one industry segment, the oil and gas exploration and production industry. We have structured the Company along geographic operating segments or regions. As a result, we have reportable operations in the United States, France and Turkey. Geographic operating segment income tax expenses have been determined based on statutory rates existing in the various tax jurisdictions where we have oil and natural gas producing activities.

     The following tables provide the geographic operating segment data required by Statement of Financial Accounting Standards No. 131, Disclosure about Segments of an Enterprise and Related Information. Operations in France and Turkey began when we completed our Merger with Madison on December 31, 2001. Accordingly, we had operations in only the U.S. segment during the three- and nine-month periods ended September 30, 2001. Subsequent to December 31, 2001, we combined the “United States” and “Headquarters and Other” segments to more accurately reflect the way we analyze our operations.

F-26

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17.     INFORMATION ABOUT OIL AND GAS PRODUCING ACTIVITIES AND OPERATING SEGMENTS (continued)

			United States			France			Turkey			Total
As of and for the year ended December 31, 2002			(in thousands)
Revenues:
	Oil and gas sales		$	11,506		$	9,190		$	2,373		$	23,069
	Loss on commodity derivatives			(2,226	)		(1,818	)		—			(4,044	)
	Lease bonuses and rentals			812			—			—			812
		Total revenues		10,092			7,372			2,373			19,837
Costs and expenses:
	Lease operating			2,586			3,237			857			6,680
	Exploration and acquisition			2,234			—			—			2,234
	Depreciation, depletion and amortization			3,179			1,302			553			5,034
	Impairment of oil and gas properties			529			—			—			529
	General and administrative			5,403			1,147			1,172			7,722
		Total costs and expenses		13,931			5,686			2,582			22,199
Operating income (loss)				(3,839	)		1,686			(209	)		(2,362	)
Other income (expense)  Equity in earnings of unconsolidated investments				(1,186	)		—			—			(1,186	)
	Loss on sale of properties and other assets			(2,129	)		—			—			(2,129	)
	Loss on sale of marketable securities			(14	)		—			—			(14	)
	Interest and other income (expense)			63			(247	)		—			(184	)
	Interest expense			(1,387	)		(1,005	)		(75	)		(2,467	)
		Total other expense		(4,653	)		(1,252	)		(75	)		(5,980	)
Net income (loss) before income taxes				(8,492	)		434			(284	)		(8,342	)
Provision (benefit) for income taxes				(2,418	)		183			—			(2,235	)
Net income (loss)			$	(6,074	)	$	251		$	(284	)	$	(6,107	)
Assets:
	Oil and natural gas properties		$	37,031		$	36,568		$	10,791		$	84,390
	Accumulated depreciation, depletion, and amortization			(10,663	)		(1,302	)		(553	)		(12,518	)
		Oil and natural gas properties, net	$	26,368		$	35,266		$	10,238		$	71,872
	Investments in unconsolidated entities		$	2,239		$	—		$	—		$	2,239
	Goodwill		$	3,342		$	1,213		$	912		$	5,467
		Total Assets	$	89,579		$	39,702		$	11,724		$	141,005
Expenditures for additions to long-lived assets:
	Property acquisition costs		$	—		$	—		$	—		$	—
	Development costs			291			1,882			—			2,173
	Exploration costs			583			—			3,102			3,685
	Other			320			—			—			320
		Total expenditures for long lived assets	$	1,194		$	1,882		$	3,102		$	6,178

F-27

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. INFORMATION ABOUT OIL AND GAS PRODUCING ACTIVITIES AND OPERATING SEGMENTS
(continued)

			United States			France (1)		Turkey (1)		Total
As of and for the year ended December 31, 2001			(in thousands)
Revenues:
	Oil and gas sales		$	13,952		$	—	$	—	$	13,952
	Gain on commodity derivatives			1,143			—		—		1,143
	Lease bonuses and rentals			596			—		—		596
		Total revenues		15,691			—		—		15,691
Costs and expenses:
	Lease operating			3,280			—		—		3,280
	Exploration and acquisition			2,619			—		—		2,619
	Depreciation, depletion and amortization			4,908			—		—		4,908
	Impairment of oil and gas properties			1,309			—				1,309
	General and administrative			2,808			—		—		2,808
		Total costs and expenses		14,924			—		—		14,924
Operating income				767			—		—		767
Other income (expense)
	Equity in earnings of unconsolidated investments			(206	)		—		—		(206	)
	Loss on sale of properties and other assets			(487	)		—		—		(487	)
	Loss on sale of marketable securities			(23	)		—		—		(23	)
	Interest and other income			163			—		—		163
	Interest expense			(1,277	)		—		—		(1,277	)
		Total other expense		(1,830	)		—		—		(1,830	)
Net loss before income taxes				(1,063	)		—		—		(1,063	)
Benefit for income taxes				(421	)		—		—		(421	)
Net loss			$	(642	)	$	—	$	—	$	(642	)
Assets:
	Oil and natural gas properties		$	48,023		$	33,386	$	7,867	$	89,276
	Accumulated depreciation, depletion, and amortization			(11,760	)		—		—		(11,760	)
		Oil and natural gas properties, net	$	36,263		$	33,386	$	7,867	$	77,516
	Investments in unconsolidated entities		$	2,855		$	—	$	—	$	2,855
	Goodwill		$	2,951		$	1,213	$	912	$	5,076
		Total Assets	$	85,481		$	36,931	$	9,536	$	131,948
Expenditures for additions to long-lived assets:
	Property acquisition costs		$	8,046		$	33,386	$	7,867	$	49,299
	Development costs			2,572			—		—		2,572
	Exploration costs			1,809			—		—		1,809
	Other			373			—		—		373
		Total expenditures for long lived assets	$	12,800		$	33,386	$	7,867	$	54,053

(1) Our Merger with Madison was effective on December 31, 2001. Accordingly, there were no operations in France or Turkey to report for the year then ended.

F-28

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17.     INFORMATION ABOUT OIL AND GAS PRODUCING ACTIVITIES AND OPERATING SEGMENTS (continued)

			United States			France (1)		Turkey (1)		Total
As of and for the year ended December 31, 2000			(in thousands)
Revenues:
	Oil and gas sales		$	13,164		$	—	$	—	$	13,164
	Loss on commodity derivatives			(135	)		—		—		(135	)
	Lease bonuses and rentals			472			—		—		472
		Total revenues		13,501			—		—		13,501
Costs and expenses:
	Lease operating			2,325			—		—		2,325
	Exploration and acquisition			309			—		—		309
	Depreciation, depletion and amortization			2,439			—		—		2,439
	General and administrative			2,273			—		—		2,273
		Total costs and expenses		7,346			—		—		7,346
Operating income				6,155			—		—		6,155
Other income (expense)
	Equity in earnings of unconsolidated investments			(54	)		—		—		(54	)
	Gain (loss) on sale of properties and other assets			408			—		—		408
	Loss on sale of marketable securities			(54	)		—		—		(54	)
	Interest and other income			71			—		—		71
	Interest expense			(1,409	)		—		—		(1,409	)
		Total other expense		(1,038	)		—		—		(1,038	)
Net income before income taxes				5,117			—		—		5,117
Provision for income taxes				1,764			—		—		1,764
Net income			$	3,353		$	—	$	—	$	3,353

(1) Our Merger with Madison was effective on December 31, 2001. Accordingly, there were no operations, assets, or expenditures in France or Turkey to report for the year ended December 31, 2000.

     The following table reconciles the total assets for reportable segments to consolidated assets.

	December 31,
	2002			2001
	(in thousands)
Total assets for reportable segments		141,005			131,948
Elimination of intersegment receivables and investments		(54,152	)		(37,494	)
Total consolidated assets	$	86,853		$	94,454

F-29

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18.     SUPPLEMENTAL OIL AND GAS RESERVES AND STANDARDIZED MEASURE INFORMATION (UNAUDITED)

     We retain an independent engineering firm to provide annual year-end estimates of our future net recoverable oil and gas reserves. Estimated proved net recoverable reserves we have shown below include only those quantities that we can expect to be commercially recoverable at prices and costs in effect at the balance sheet dates under existing regulatory practices and with conventional equipment and operating methods. Proved developed reserves represent only those reserves that we may recover through existing wells. Proved undeveloped reserves include those reserves that we may recover from new wells on undrilled acreage or from existing wells on which we must make a relatively major expenditure for recompletion or secondary recovery operations.

     Discounted future cash flow estimates like those shown below are not intended to represent estimates of the fair value of oil and gas properties. Estimates of fair value should also consider probable reserves, anticipated future oil and gas prices, interest rates, changes in development and production costs and risks associated with future production. Because of these and other considerations, any estimate of fair value is necessarily subjective and imprecise.

	United States						France					Turkey					Total
	Oil (MBbl)			Gas (MMcf)			Oil (MBbl)			Gas (MMcf)		Oil (MBbl)			Gas (MMcf)		Oil (MBbl)			Gas (MMcf)
PROVED RESERVES
December 31, 1999		2,197			8,211			—			—		—			—		2,197			8,211
Purchase of reserves		454			6,922			—			—		—			—		454			6,922
Revisions of previous estimates		60			(1,205	)		—			—		—			—		60			(1,205	)
Extensions, discoveries, and other additions		102			1,075			—			—		—			—		102			1,075
Sale of reserves		(16	)		—													(16	)		—
Production		(274	)		(1,319	)		—			—		—			—		(274	)		(1,319	)
December 31, 2000		2,523			13,684			—			—		—			—		2,523			13,684
Purchase of reserves		137			3,971			8,272			—		936			—		9,345			3,971
Revisions of previous estimates		(301	)		(2,295	)		—			—		—			—		(301	)		(2,295	)
Extensions, discoveries, and other additions		34			1,486			—			—		—			—		34			1,486
Sale of reserves		(91	)		(2,142	)		—			—		—			—		(91	)		(2,142	)
Production		(296	)		(1,781	)		—			—		—			—		(296	)		(1,781	)
December 31, 2001		2,006			12,923			8,272			—		936			—		11,214			12,923
Revisions of previous estimates		450			1,531			3,136			—		149			—		3,735			1,531
Extensions, discoveries, and other additions		84			1,300			250			—		1			—		335			1,300
Sale of reserves		(415	)		(1,811	)		—			—		—			—		(415	)		(1,811	)
Production		(238	)		(1,822	)		(415	)		—		(114	)		—		(767	)		(1,822	)
December 31, 2002		1,887			12,121			11,243			—		972			—		14,102			12,121
PROVED DEVELOPED RESERVES
December 31, 2000		2,445			13,666			—			—		—			—		2,445			13,666
December 31, 2001		1,965			12,923			5,426			—		652			—		8,043			12,923
December 31, 2002		1,749			11,987			7,388			—		766			—		9,903			11,987

F-30

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18.     SUPPLEMENTAL OIL AND GAS RESERVES AND STANDARDIZED MEASURE INFORMATION (UNAUDITED) (continued)

STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS RELATING TO PROVED OIL AND GAS RESERVES

     We have summarized the standardized measure of discounted net cash flows related to our proved oil and natural gas reserves. We have based the following summary on a valuation of proved reserves using discounted cash flows based on year-end prices, costs and economic conditions and a 10% discount rate. The additions to proved reserves from purchase of reserves in place and new discoveries and extensions could vary significantly from year to year; additionally, the impact of changes to reflect current prices and costs of reserves proved in prior years could also be significant. Accordingly, you should not view the information presented below as an estimate of the fair value of our oil and natural gas properties, nor should you consider the information indicative of any trends.

	United States		France		Turkey		Total
As of December 31, 2000
Future cash inflows	$	191,275	$	—	$	—	$	191,275
Future production costs		38,244		—		—		38,244
Future development costs		330		—		—		330
Future income tax expense		50,284		—		—		50,284
Future net cash flows		102,417		—		—		102,417
10% annual discount for estimated timing of cash flows		44,761		—		—		44,761
Standardized measure of discounted future net cash flows related to proved reserves	$	57,656	$	—	$	—	$	57,656
As of December 31, 2001
Future cash inflows	$	70,528	$	139,656	$	15,315	$	225,499
Future production costs		22,574		78,326		7,337		108,237
Future development costs		186		10,444		1,960		12,590
Future income tax expense		9,970		12,427		1,910		24,307
Future net cash flows		37,798		38,459		4,108		80,365
10% annual discount for estimated timing of cash flows		12,039		17,572		1,180		30,791
Standardized measure of discounted future net cash flows related to proved reserves	$	25,759	$	20,887	$	2,928	$	49,574
As of December 31, 2002
Future cash inflows	$	109,720	$	331,739	$	28,143	$	469,602
Future production costs		25,933		135,706		10,132		171,771
Future development costs		353		14,595		1,470		16,418
Future income tax expense		25,194		58,717		5,417		89,328
Future net cash flows		58,240		122,721		11,124		192,085
10% annual discount for estimated timing of cash flows		23,622		69,878		3,541		97,041
Standardized measure of discounted future net cash flows related to proved reserves	$	34,618	$	52,843	$	7,583	$	95,044

     The prices of oil and natural gas at December 31, 2002, 2001, and 2000 used in the above table, were $29.30, $16.95, and $25.21 per Bbl of oil, respectively, and $4.62, $2.71, and $9.21 per Mcf of natural gas, respectively.

F-31

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18.     SUPPLEMENTAL OIL AND GAS RESERVES AND STANDARDIZED MEASURE INFORMATION (UNAUDITED) (continued)

CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH RELATING TO PROVED OIL AND GAS RESERVES

     The following are the principal sources of change in the standardized measure:

	United States			France			Turkey			Total
	(in thousands)
Balance at January 1, 2000	$	25,508		$	—		$	—		$	25,508
Sales of oil and gas, net		(10,839	)		—			—			(10,839	)
Net change in prices and production costs		23,723			—			—			23,723
Extensions and discoveries		6,832			—			—			6,832
Revisions of previous quantity estimates		(684	)		—			—			(684	)
Net change in income taxes		(18,922	)		—			—			(18,922	)
Accretion of discount		2,551			—			—			2,551
Purchase of reserves		28,597			—			—			28,597
Sale of reserves		(206	)		—			—			(206	)
Other		1,096			—			—			1,096
Balance at December 31, 2000		57,656			—			—			57,656
Sales of oil and gas, net		(10,672	)		—			—			(10,672	)
Net change in prices and production costs		(49,970	)		—			—			(49,970	)
Extensions and discoveries		2,696			—			—			2,696
Revisions of previous quantity estimates		(3,627	)		—			—			(3,627	)
Net change in income taxes		21,866			—			—			21,866
Accretion of discount		5,766			—			—			5,766
Purchase of reserves		4,198			20,887			2,928			28,013
Sale of reserves		(2,019	)		—			—			(2,019	)
Other		(135	)		—			—			(135	)
Balance at December 31, 2001		25,759			20,887			2,928			49,574
Sales of oil and gas, net		(8,920	)		(5,953	)		(1,516	)		(16,389	)
Net change in prices and production costs		22,575			33,426			6,733			62,734
Extensions and discoveries		3,770			1,479			26			5,275
Revisions of previous quantity estimates		8,174			20,698			1,746			30,618
Net change in income taxes		(8,422	)		(17,752	)		(2,327	)		(28,501	)
Accretion of discount		2,576			2,089			293			4,958
Sale of reserves		(6,441	)		—			—			(6,441	)
Other		(4,453	)		(2,030	)		(301	)		(6,784	)
Balance at December 31, 2002	$	34,618		$	52,844		$	7,582		$	95,044

F-32

INDEX TO EXHIBITS

Exhibit
Number		Description
2.1	- -	Certificate of Ownership and Merger merging Toreador Resources Corporation into Toreador Royalty Corporation, effective June 5, 2000 (previously filed as Exhibit 2.1 to Toreador Resources Corporation Current Report on Form 8-K filed on June 5, 2000, File No. 0-2517, and incorporated herein by reference).
2.2	- -	Agreement and Plan of Merger, dated as of October 3, 2001, between Toreador Resources Corporation and Madison Oil Company (previously filed as Exhibit 2.1 to Toreador Resources Corporation Registration Statement on Form S-4, No. 333-72314, filed on October 26, 2001, and incorporated herein by reference).
2.3	- -	Voting Agreement, dated as of October 3, 2001, by Herbert L. Brewer, David M. Brewer and PHD Partners, LP for the benefit of Toreador Resources Corporation (previously filed as Exhibit 2.4 to Toreador Resources Corporation Registration Statement on Form S-4, No. 333-72314, filed on October 26, 2001, and incorporated herein by reference).
3.1	- -	Amended and Restated Certificate of Incorporation, of Toreador Resources Corporation (previously filed as Exhibit 3.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
3.2	- -	Second Amended and Restated Bylaws of Toreador Resources Corporation (previously filed as Exhibit 3.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
3.3	- -	Certificate of Designation of Series A-1 Convertible Preferred Stock of Toreador Resources Corporation, dated October 30, 2002 (previously filed as Exhibit 3.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-2517, and incorporated herein by reference).
4.1	- -	Registration Rights Agreement, effective December 16, 1998, among Toreador Royalty Corporation and persons party thereto (previously filed as Exhibit 10.2 to Toreador Royalty Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on December 31, 1998, File No. 0-2517, and incorporated herein by reference).
4.2	- -	Settlement Agreement dated June 25, 1998, among the Gralee Persons, the Dane Falb Persons and Toreador Royalty Corporation (previously filed as Exhibit 10.1 to Toreador Royalty Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on July 1, 1998, File No. 0-2517, and incorporated herein by reference).
4.3	- -	Registration Rights Agreement, effective July 31, 2000, among Toreador Royalty Corporation and persons party thereto (previously filed as Exhibit 4.5 to Toreador Resources Corporation Registration Statement on Form S-3, No. 333-52522 filed with the Securities and Exchange Commission on December 22, 2000, and incorporated herein by reference).
4.4	- -	Registration Rights Agreement, effective September 11, 2000, among Toreador Resources Corporation and Earl E. Rossman, Jr., Representative of the Holders (previously filed as Exhibit 4.6 to Toreador Resources Corporation Registration Statement on Form S-3, No. 333-52522, filed with the Securities and Exchange Commission on December 22, 2000, and incorporated herein by reference).
4.5*	- -	Registration Rights Agreement, effective November 1, 2002, among Toreador Resources Corporation and persons party thereto.

Exhibit
Number		Description
10.1+	- -	Employment Agreement, dated as of May 1, 1997 between Toreador Royalty Corporation and Edward C. Marhanka (previously filed as Exhibit 10.5 to Toreador Royalty Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, File No. 0-2517, and incorporated herein by reference).
10.2+	- -	Employment letter agreement between Madison Oil Company and Michael J. FitzGerald dated September 10, 2001 (previously filed as Exhibit 10.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, File No. 0-2517, and incorporated herein by reference).
10.3+	- -	Toreador Royalty Corporation 1990 Stock Option Plan (previously filed as Exhibit 10.7 to Toreador Royalty Corporation Annual Report on Form 10-K for the year ended December 31, 1994, File No. 0-2517, and incorporated herein by reference).
10.4+	- -	Amendment to Toreador Royalty Corporation 1990 Stock Option Plan, effective as of May 15, 1997 (previously filed as Exhibit 10.14 to Toreador Royalty Corporation Annual Report on Form 10-K for the year ended December 31, 1997, File No. 0-2517, and incorporated herein by reference).
10.5+	- -	Toreador Royalty Corporation Amended and Restated 1990 Stock Option Plan, effective as of September 24, 1998 (previously filed as Exhibit A to Toreador Royalty Corporation Preliminary Proxy Statement filed with the Securities and Exchange Commission on March 12, 1999, File No. 0-2517, and incorporated herein by reference).
10.6+	- -	Amendment Number One to Toreador Resources Corporation Amended and Restated 1990 Stock Option Plan (previously filed as Exhibit 10.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.7+	- -	Amendment Number Two to Toreador Resources Corporation Amended and Restated 1990 Stock Option Plan (previously filed as Exhibit 10.4 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.8+	- -	Toreador Royalty Corporation 1994 Non-Employee Director Stock Option Plan, as amended (previously filed as Exhibit 10.12 to Toreador Royalty Corporation Annual Report on Form 10-K for the year ended December 31, 1995 File No. 0-2517, and incorporated herein by reference).
10.9+	- -	Toreador Resources Corporation Amended and Restated 1994 Non-employee Director Stock Option Plan (previously filed as Exhibit 10.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.10+	- -	Toreador Resources Corporation 2002 Stock Option Plan (previously filed as Exhibit 10.16 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-2517, and incorporated herein by reference).
10.11+	- -	Amendment Number One to the Toreador Resources Corporation 2002 Stock Option Plan (previously filed as Exhibit 10.5 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).

Exhibit
Number		Description
10.12+	- -	Form of Indemnification Agreement, dated as of April 25, 1995, between Toreador Royalty Corporation and each of the members of our Board of Directors (previously filed as Exhibit 10 to Toreador Royalty Corporation Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995, File No. 0-2517, and incorporated herein by reference).
10.13	- -	Loan Agreement, effective February 16, 2001, between Toreador Resources Corporation, Toreador Exploration & Production Inc., Toreador Acquisition Corporation and Tormin, Inc. and Bank of Texas, National Association (previously filed as Exhibit 10.9 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2000, File No. 0-2517, and incorporated herein by reference).
10.14	- -	First Amendment to Loan Agreement dated November 8, 2001 between Toreador Resources Corporation, Toreador Exploration & Production Inc., Toreador Acquisition Corporation and Tormin, Inc. and Bank of Texas, National Association Plan (previously filed as Exhibit 10.12 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-2517, and incorporated herein by reference).
10.15	- -	Second Amendment to Loan Agreement dated May 9, 2002 between Toreador Resources Corporation, Toreador Exploration & Production Inc., Toreador Acquisition Corporation and Tormin, Inc. and Bank of Texas, National Association (previously filed as Exhibit 10.3 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.16	- -	Third Amendment to Loan Agreement dated August 7, 2002 between Toreador Resources Corporation, Toreador Exploration & Production Inc., Toreador Acquisition Corporation and Tormin, Inc. and Bank of Texas, National Association (previously filed as Exhibit 10.1 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.17	- -	Fourth Amendment to Loan Agreement dated September 30, 2002 between Toreador Resources Corporation, Toreador Exploration & Production Inc., Toreador Acquisition Corporation and Tormin, Inc. and Bank of Texas, National Association (previously filed as Exhibit 10.2 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.18	- -	Revolving Credit Facility Agreement dated March 30, 2001, between Madison Oil Company Europe, Madison Oil France S.A., Madison/Chart Energy SCS (n/k/a Madison Energy France), and Barclays Capital (previously filed as Exhibit 10.13 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-2517, and incorporated herein by reference).
10.19	- -	Contract for the Supply of Crude Oil from the Parisian Basin, effective January 1, 1997, between Elf Antwar France and Midland Madison Petroleum Company (n/k/a Madison Energy France) (previously filed as Exhibit 10.14 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-2517, and incorporated herein by reference).
10.20	- -	Amended and Restated Convertible Debenture, dated December 31, 2001, between Madison Oil Company and PHD Partners LP. (previously filed as Exhibit 10.15 to Toreador Resources Corporation Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-2517, and incorporated herein by reference).

Exhibit
Number		Description
10.21	- -	Settlement Agreement dated June 28, 2002, and executed August 29, 2002, between Tullow Pakistan (Developments) Limited and Toreador Resources Corporation (previously filed as Exhibit 10.3 to Toreador Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-2517, and incorporated herein by reference).
10.22	- -	Subordinated Revolving Credit Agreement, dated as of October 3, 2001, between Madison Oil Company and Toreador Resources Corporation (previously filed as Exhibit 2.2 to Toreador Resources Corporation Registration Statement on Form S-4, No. 333-72314, filed on October 26, 2001, and incorporated herein by reference).
10.23	- -	Subordinated Revolving Credit Note, dated as of October 3, 2001, between Toreador Resources Corporation and Madison Oil Company (previously filed as Exhibit 2.3 to Toreador Resources Corporation Registration Statement on Form S-4, No. 333-72314, filed on October 26, 2001, and incorporated herein by reference).
10.24*	- -	Securities Purchase Agreement, effective November 1, 2002, among Toreador Resources Corporation and persons party thereto.
10.25*	- -	Shareholders Agreement between Anglo-African Energy, Inc. and Trans-Dominion Holdings Limited, dated August 1, 2000.
10.26*	- -	Consulting Agreement between Toreador Resources Corporation and Richard D. Preston, effective June 1, 2002.
10.27*	- -	Waiver Letter between Madison Energy France S.C.S. (formerly Madison/Chart Energy S.C.S.), Madison Oil Company Europe, Madison Oil France S.A., Madison Oil Company, Madison Petroleum Inc., Madison (Turkey) Inc., Madison Oil Turkey Inc. and Toreador Resources Corporation and Barclays Bank PLC dated March 21, 2002.
10.28*	- -	Waiver Letter between Madison Energy France S.C.S. (formerly Madison/Chart Energy S.C.S.), Madison Oil Company Europe, Madison Oil France S.A., Madison Oil Company, Madison Petroleum Inc., Madison (Turkey) Inc., Madison Oil Turkey Inc. and Toreador Resources Corporation and Barclays Bank PLC dated December 31, 2002.
10.29*	- -	Waiver Letter between Madison Energy France S.C.S. (formerly Madison/Chart Energy S.C.S.), Madison Oil Company Europe, Madison Oil France S.A., Madison Oil Company, Madison Petroleum Inc., Madison (Turkey) Inc., Madison Oil Turkey Inc. and Toreador Resources Corporation and Barclays Bank PLC dated March 25, 2003.
10.30*	- -	Warrant Letter between Toreador Resources Corporation and Barclays Capital dated March 25, 2003.
10.31*	- -	Amendment to Settlement Agreement dated as of February 3, 2003, between Tullow Pakistan (Developments) Limited and Toreador Resources Corporation.
10.32*	- -	Waiver Letter between Madison Energy France S.C.S. (formerly Madison Chart/Energy S.C.S.), Madison Oil Company Europe, Madison Oil France S.A., Madison Oil Company, Madison Petroleum Inc., Madison (Turkey) Inc., Madison Oil Turkey Inc. and Toreador Resources Corporation and Barclays Bank PLC dated April 11, 2003.
16.1	- -	Letter on Change in Certifying Accountant from PricewaterhouseCoopers LLP, dated June 30, 1999 (previously filed as Exhibit 16 to Amendment No. 2 to Toreador Royalty Corporation Current Report on Form 8-K/A filed on June 30, 1999, File No. 0-2517, and incorporated herein by reference).
21.1*	- -	Subsidiaries of Toreador Resources Corporation.
23.1*	- -	Consent of Ernst & Young LLP.

Exhibit
Number		Description
23.2*	- -	Consent of LaRoche Petroleum Consultants, Ltd.
24.1*	- -	Power of Attorney (See Signatures in Part IV)
99.1*	- -	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2*	- -	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Filed herewith.
+	Management contract or compensatory plan

EX-4.5 3 d04484exv4w5.txt EX-4.5 REGISTRATION RIGHTS AGREEMENT EXHIBIT 4.5 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (this "Agreement") by and among Toreador Resources Corporation, a Delaware corporation (the "Company"), and each of the persons listed on the Schedule of Purchasers attached hereto (each referred to herein as a "Purchaser" and, collectively, as the "Purchasers"). The Company has agreed, on the terms and subject to the conditions set forth in the Securities Purchase Agreement of even date herewith (the "Securities Purchase Agreement"), to issue and sell to each Purchaser 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 Company's Certificate of Designation (the "Certificate of Designation") into shares (the "Conversion Shares") of the Company's Common Stock, par value $0.15625 per share (the "Common Stock"). In order to induce the Purchasers to enter into the Securities Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended (the "Securities Act"), and under applicable state securities laws. Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Securities Purchase Agreement. In consideration of each Purchaser entering into the Securities Purchase Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. DEFINITIONS. For purposes of this Agreement, the following terms shall have the meanings specified: (a) "Final Closing" shall have the meaning set forth in the Securities Purchase Agreement; (b) "Holder" means any person owning or having the right to acquire Registrable Securities, including initially each Purchaser and thereafter any permitted assignee thereof; (c) "Register", "registered" and "registration" refer to a registration effected by preparing and filing a registration statement or statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act ("Rule 415") or any successor rule providing for the offering of securities on a continuous or delayed basis ("Registration Statement"), and the declaration or ordering of effectiveness of the Registration Statement by the Securities and Exchange Commission (the "Commission"); and (d) "Registrable Securities" means the Preferred Shares, Conversion Shares, and any other Preferred Shares or shares of Common Stock issuable pursuant to the terms of the Preferred Stock, whether as a dividend, payment of a redemption price or otherwise, and any shares of capital stock issued or issuable from time to time (with any adjustments) in replacement of, in exchange for or otherwise in respect of the Preferred Shares or the Conversion Shares, including without limitation any securities received by a Holder in connection with an Exchange Transaction (as defined in the Certificate of Designation). 2. REGISTRATION. (a) After the Final Closing, the Company shall promptly file under the Securities Act of 1933, as amended (the "Securities Act"), the Registration Statement so that the Registrable Securities may be sold in such manner as the Holders thereof shall determine. In addition, the Company may elect to register on the Registration Statement for resale shares of Common Stock and preferred stock held by other holders. The Registration Statement shall state, to the extent permitted by Rule 416 under the Securities Act, that it also covers such indeterminate number of shares of Common Stock or preferred stock as may be required to effect conversion of the Preferred Shares, to prevent dilution resulting from stock splits, stock dividends or similar events, or by reason of changes in the Conversion Price in accordance with the terms of the Certificate of Designation. (b) The Company shall take all reasonable action necessary to cause the Registration Statement to be declared effective as soon as practicable after filing, but in no event later than 270 days after the initial filing and shall maintain the effectiveness of the Registration Statement until the earlier to occur of (i) the date on which all of the Registrable Securities have been sold pursuant to the Registration Statement and (ii) the date on which all of the remaining Registrable Securities (in the reasonable opinion of counsel to the Company) may be immediately sold to the public without registration and without regard to the amount of Registrable Securities which may be sold by a Holder thereof at a given time (the "Registration Period"). 3. OBLIGATIONS OF THE COMPANY. In addition to performing its obligations hereunder, including those pursuant to Sections 2(a) and 2(b) above, the Company shall: (a) prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to comply with the provisions of the Securities Act or to maintain the effectiveness of the Registration Statement during the Registration Period, or as may be reasonably requested by a Holder in order to incorporate information concerning such Holder or such Holder's intended method of distribution; (b) furnish to each Holder such number of copies of the prospectus included in such Registration Statement, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as such Holder may reasonably request in order to facilitate the disposition of such Holder's Registrable Securities; (c) use all commercially reasonable efforts to register or qualify the Registrable Securities under the securities or "blue sky" laws of such jurisdictions within the United States as shall be reasonably requested from time to time by a Holder, and do any and all other acts or things which may be necessary or advisable to enable such Holder to consummate the public sale or other disposition of the Registrable Securities in such jurisdictions; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdiction; (d) notify each Holder immediately upon the occurrence of any event as a result of which the prospectus included in such Registration Statement, as then in effect, contains an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and (except during a Blackout Period) as promptly as practicable, prepare, file and furnish to each Holder a reasonable number -2- of copies of a supplement or an amendment to such prospectus as may be necessary so that such prospectus does 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 not misleading in light of the circumstances then existing. For purposes hereof, "Blackout Period" means such day or days, not to exceed an aggregate of thirty (30) days during any period of twelve (12) consecutive months, with respect to which the Board of Directors of the Company determines in good faith (A) that an amendment or supplement to the Registration Statement or prospectus contained therein is necessary, in light of subsequent events, in order to correct a material misstatement made therein or to include information the absence of which would render the Registration Statement or such prospectus materially misleading and (B) that the filing of such amendment or supplement would result in the disclosure of information which the Company has a bona fide business purpose for preserving as confidential; provided that the Company shall be entitled to impose no more than three (3) Blackout Periods during any period of twelve (12) consecutive months; (e) use all commercially reasonable efforts to prevent the issuance of any stop order or other order suspending the effectiveness of such Registration Statement and, if such an order is issued, to obtain the withdrawal thereof at the earliest possible time and to notify each Holder of the issuance of such order and the resolution thereof; (f) furnish to each Holder, on the date that such Registration Statement becomes effective, a letter, dated such date, of outside counsel representing the Company (and reasonably acceptable to such Holder) addressed to such Holder, confirming the effectiveness of the Registration Statement and, to the knowledge of such counsel, the absence of any stop order; (g) provide each Holder and its representatives the opportunity to conduct a reasonable inquiry of the Company's financial and other records during normal business hours and make available its officers, directors and employees for questions regarding information which such Holder may reasonably request in order to fulfill any due diligence obligation on its part; and (h) permit counsel for each Holder (at such Holder's expense) to review such Registration Statement and all amendments and supplements thereto a reasonable period of time prior to the filing thereof with the Commission. 4. OBLIGATIONS OF EACH HOLDER. In connection with the registration of the Registrable Securities pursuant to the Registration Statement, each Holder shall: (a) furnish to the Company such information regarding itself and the intended method of disposition of Registrable Securities as the Company shall reasonably request in order to effect the registration thereof; (b) upon receipt of any notice from the Company of the happening of any event of the kind described in Sections 3(d) or 3(e), immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement until the filing of an amendment or supplement as described in Section 3(f) or withdrawal of the stop order referred to in Section 3(e); (c) to the extent required by applicable law, deliver a prospectus to each purchaser of Registrable Securities; and -3- (d) notify the Company when it has sold all of the Registrable Securities theretofore held by it. 5. INDEMNIFICATION. In the event that any Registrable Securities are included in a Registration Statement under this Agreement: (a) To the extent permitted by law, the Company shall indemnify and hold harmless each Holder, the officers, directors, employees, agents and representatives of such Holder, and each person, if any, who controls such Holder within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), against any losses, claims, damages, liabilities or reasonable out-of-pocket expenses (whether joint or several) (collectively, including legal or other expenses reasonably incurred in connection with investigating or defending same, "Losses"), insofar as any such Losses arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, or (ii) the omission or alleged omission to state therein 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. The Company will reimburse such Holder, and each such officer, director, employee, agent, representative or controlling person for any legal or other expenses as reasonably incurred by any such entity or person in connection with investigating or defending any Loss; provided, however, that the foregoing indemnity shall not apply to amounts paid in settlement of any Loss if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be obligated to indemnify any person for any Loss to the extent that such Loss arises out of or is based upon and in conformity with written information furnished by such person expressly for use in such Registration Statement; and provided, further, that the Company shall not be required to indemnify any person to the extent that any Loss results from such person selling Registrable Securities (i) to a person to whom there was not sent or given, at or prior to the written confirmation of the sale of such shares, a copy of the prospectus, as most recently amended or supplemented, if the Company has previously furnished or made available copies thereof or (ii) during any period following written notice by the Company to such Holder of an event described in Section 3(d) or 3(e). (b) To the extent permitted by law, each Holder, acting severally and not jointly, shall indemnify and hold harmless the Company, the officers, directors, employees, agents and representatives of the Company, and each person, if any, who controls the Company within the meaning of the Securities Act or the 1934 Act, against any Losses to the extent (and only to the extent) that any such Losses arise out of or are based upon and in conformity with written information furnished by such Holder expressly for use in such Registration Statement; and such Holder will reimburse any legal or other expenses as reasonably incurred by the Company and any such officer, director, employee, agent, representative, or controlling person, in connection with investigating or defending any such Loss; provided, however, that the foregoing indemnity shall not apply to amounts paid in settlement of any such Loss if such settlement is effected without the consent of such Holder, which consent shall not be unreasonably withheld; provided, that, in no event shall any indemnity under this Section 5(b) exceed the net purchase price of securities sold by such Holder under the Registration Statement. (c) Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 5, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have -4- the right to participate in and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the reasonably incurred fees and expenses of one such counsel to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate under applicable standards of professional conduct due to actual or potential conflicting interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, to the extent prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 5 with respect to such action, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5 or with respect to any other action. (d) In the event that the indemnity provided in subsection (a) or (b) of this Section 5 is unavailable or insufficient to hold harmless an indemnified party for any reason, the Company and each Holder agree, severally and not jointly, to contribute to the aggregate Losses to which the Company or such Holder may be subject in such proportion as is appropriate to reflect the relative fault of the Company and such Holder in connection with the statements or omissions which resulted in such Losses; provided, however, that in no case shall such Holder be responsible for any amount in excess of the net purchase price of securities sold by it under the Registration Statement. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company or by such Holder. The Company and each Holder agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. For purposes of this Section 5, each person who controls a Holder within the meaning of either the Securities Act or the Exchange Act and each officer, director, employee, agent or representative of such Holder shall have the same rights to contribution as such Holder, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act and each officer, director, employee, agent or representative of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this subsection (d). (e) The obligations of the Company and each Holder under this Section 5 shall survive the conversion or redemption, if any, of the Preferred Shares, the completion of any offering of Registrable Securities pursuant to a Registration Statement under this Agreement, or otherwise. 6. REPORTS. With a view to making available to each Holder the benefits of Rule 144 under the Securities Act ("Rule 144") and any other similar rule or regulation of the Commission that may at any time permit such Holder to sell securities of the Company to the public without registration, the Company agrees to: (a) make and keep public information available, as those terms are understood and defined in Rule 144; (b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the 1934 Act; and -5- (c) furnish to such Holder, so long as such Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the Securities Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing such Holder of any rule or regulation of the Commission which permits the selling of any such securities without registration. 7. MISCELLANEOUS. (a) Expenses of Registration. All expenses, other than underwriting discounts and commissions and fees and expenses of counsel to each Holder, incurred in connection with the registrations, filings or qualifications described herein, including (without limitation) all registration, filing and qualification fees, printers' and accounting fees and the fees and disbursements of counsel for the Company shall be borne by the Company. (b) Amendment; Waiver. Any provision of this Agreement may be amended only pursuant to a written instrument executed by the Company and Holders of at least two thirds (2/3) of the Registrable Securities then issued or issuable. Any waiver of the provisions of this Agreement may be made only pursuant to a written instrument executed by the party against whom enforcement is sought. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Holder, each future Holder, and the Company. The failure of any party to exercise any right or remedy under this Agreement or otherwise, or the delay by any party in exercising such right or remedy, shall not operate as a waiver thereof. Provided, however, that upon the issuance of additional shares of Series A-1 Preferred Stock subsequent to the date hereof and in accordance with the Securities Purchase Agreement, without any further consent or acknowledgment of the Holders party hereto, the Company may add additional holders of Series A-1 Preferred Stock to this Agreement from time to time. Any such additional holders joining this Agreement shall execute a signature page to this Agreement, which signature page shall be countersigned by the Company and the original appended to this Agreement. A photocopy of such appended signature page shall be sent to each prior Holder party to this Agreement as soon as practicable following the Final Closing. (c) 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 4809 Cole Avenue, Suite 108 Dallas, Texas 75205 Attn.: Chief Executive Officer Fax: 214-559-3933 -6- with a copy to: Haynes and Boone, LLP 901 Main Street, Suite 3100 Dallas, Texas 75202 Attn.: Janice V. Sharry Tel: 214-651-5562 Fax: 214-651-5940 and if to any Holder, to such address as shall be designated by such Holder in writing to the Company. (d) Termination. This Agreement shall terminate on the earlier to occur of (a) the end of the Registration Period and (b) the date on which all of the Registrable Securities have been publicly distributed; but any such termination shall be without prejudice to (i) the parties' rights and obligations arising from breaches of this Agreement occurring prior to such termination and (ii) the indemnification and contribution obligations under this Agreement. (e) Assignment. The rights of a Holder hereunder shall be assigned automatically to any transferee of the Preferred Shares or Registrable Securities from such Holder as long as: (i) the Company is, within a reasonable period of time following such transfer, furnished with written notice of the name and address of such transferee, (ii) the transferee agrees in writing with the Company to be bound by all of the provisions hereof and (iii) such transfer is made in accordance with the applicable requirements of the Securities Purchase Agreement. (f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which together shall be deemed one and the same instrument. This Agreement, once executed by a party, may be delivered to any other party hereto by facsimile transmission. (g) Governing Law. This Agreement shall be governed by and construed in accordance with 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. -7- SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date indicated by their signature. PURCHASER NAME: H. R. Sanders, Jr. Dated: October 28, 2002 --------------------------- ---- By: /s/ H. R. Sanders, Jr. ---------------------------------------------- Name: H. R. Sanders, Jr. Title: Address: 390 CR 1526 Morgan, TX 76671 Facsimile: 254-622-2636 Accepted this 1st day of November, 2002. TOREADOR RESOURCES CORPORATION By: /s/ G. Thomas Graves III ---------------------------------------------- Name: G. Thomas Graves III Title: President and Chief Executive Officer -8- SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date indicated by their signature. PURCHASER NAME: John Mark McLaughlin Dated: October 29, 2002 --------------------------- ---- By: /s/ John Mark McLaughlin ---------------------------------------------- Name: John Mark McLaughlin Title: Address: 2201 Sherwood Way #201 San Angelo, Texas 76901 Facsimile: 915-947-4859 Accepted this 1st day of November, 2002. TOREADOR RESOURCES CORPORATION By: /s/ G. Thomas Graves III ---------------------------------------------- Name: G. Thomas Graves III Title: President and Chief Executive Officer -9- SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date indicated by their signature. PURCHASER NAME: William I. Lee Dated: October 29, 2002 --------------------------- ---- By: /s/ William I. Lee ---------------------------------------------- Name: William I. Lee Title: Address: 4809 Cole Ave. Dallas, Texas 75205 Facsimile: Accepted this 1st day of November, 2002. TOREADOR RESOURCES CORPORATION By: /s/ G. Thomas Graves III ---------------------------------------------- Name: G. Thomas Graves III Title: President and Chief Executive Officer -10- SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date indicated by their signature. PURCHASER NAME: Herbert and Paulyne Brewer 1992 Trust Dated: October 25, 2002 --------------------------- ---- By: /s/ Herbert L. Brewer ---------------------------------------------- Name: Herbert L. Brewer Title: Trustee Address: Facsimile: Accepted this 1st day of November, 2002. TOREADOR RESOURCES CORPORATION By: /s/ G. Thomas Graves III ---------------------------------------------- Name: G. Thomas Graves III Title: President and Chief Executive Officer -11- SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date indicated by their signature. PURCHASER NAME: Herbert L. Brewer Dated: October 25, 2002 --------------------------- ---- By: /s/ Herbert L. Brewer ---------------------------------------------- Name: Herbert L. Brewer Title: Address: Facsimile: Accepted this 1st day of November, 2002. TOREADOR RESOURCES CORPORATION By: /s/ G. Thomas Graves III ---------------------------------------------- Name: G. Thomas Graves III Title: President and Chief Executive Officer -12- EX-10.24 4 d04484exv10w24.txt EX-10.24 SECURITIES PURCHASE AGREEMENT EXHIBIT 10.24 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 each of the persons listed on the Schedule of Purchasers attached hereto. Such entities or persons (and any other persons who become a party to this Agreement subsequent to the date of this Agreement pursuant to Section 1.1) are each referred to herein as a "Purchaser" and, collectively, as the "Purchasers". The Company wishes to sell to each Purchaser, and each 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 Company has agreed to take all reasonable action necessary to affect the registration covering the resale of the Preferred Shares and the Conversion Shares under the Securities Act of 1933, as amended (the "Securities Act") pursuant to a Registration Rights Agreement of even date herewith by and among the Company and the Purchasers (the "Registration Rights Agreement"). The sale of the Preferred Shares by the Company to the Purchasers 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. The Company and the Purchasers 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 each Purchaser agrees to purchase, the number of Preferred Shares set forth below such Purchaser's name on the signature pages hereof and at a purchase price equal to Twenty-Five Dollars ($25.00) times the number of Preferred Shares purchased by such Purchaser (the "Purchase Price"). The Company may sell from time to time up to a maximum of $4,000,000 of Preferred Shares, provided, however, that at least $925,000 of Preferred Shares shall have been purchased as of the date of the first sale of Preferred Shares pursuant to this Agreement. Notwithstanding any provision of this Agreement to the contrary, the Company may from time to time after the date of this Agreement sell, without any consent or acknowledgment of the Purchasers signatory hereto, additional Preferred Shares (not to exceed the $4,000,000 limitation set forth in the preceding sentence) pursuant to the terms of this Agreement or otherwise. Such additional sales of Preferred Shares shall be accomplished through execution by such Purchaser of a signature page to this Agreement and countersignature thereof by the Company. Photocopies of such additional signature pages shall be delivered to each other Purchaser as soon as practicable following the last such sale (the "Final Closing"); it being understood that the Final Closing shall occur on or prior to December 31, 2002. Each closing of the purchase and sale of the Preferred Shares will be deemed to occur when this Agreement and 1 the other Transaction Documents (as defined below) have been executed and delivered by the Company and each Purchaser at such closing (which delivery may be effected by facsimile transmission), and full payment of the Purchase Price has been made by each such Purchaser by wire transfer or immediately available funds against physical delivery by the Company of duly executed certificates representing the Preferred Shares purchased by such Purchaser hereunder. 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 PURCHASERS. Each Purchaser, solely with respect to him, her or it, 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. If an entity, such Purchaser is duly and validly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization with full power and authority to purchase the Preferred Shares and to execute and deliver this Agreement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered by or on behalf of such Purchaser. This Agreement constitutes such Purchaser's valid and legally binding obligation, enforceable in accordance with its terms. 2.2 Accredited Investor; Investment Intent. Such 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 his, her or its 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, such 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 such Purchaser with information regarding the business, operations and financial condition of the Company, and has granted to such 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. Such Purchaser understands that his, her or its investment in the Preferred Shares involves a high degree of risk. Such Purchaser has sought such accounting, legal and tax advice as he, she or it has considered necessary to make an informed investment decision with respect to his, her or its acquisition of the Preferred Shares. 2.4 Limitations on Disposition. Such Purchaser acknowledges that, except as provided in the Registration Rights Agreement, the Securities have not been and are not being 2 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. Such 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 Purchasers signatory thereto (collectively, the "Purchasers") and (iii) a Registration Rights Agreement by and among the Company and the Purchasers." 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 such 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. Such 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. Such 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 each Purchaser and agrees with such 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 3 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 and/or the Preferred 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 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, 2001, (ii) Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002 and June 30, 2002, (iii) all Current Reports on Form 8-K required to be filed with the Commission since December 31, 2001 and (iv) the Company's definitive Proxy Statement for its 2002 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). 4 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. 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, (ii) execution and filing of the Certificate of Designation, and (iii) 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 any Purchaser or any affiliate of such 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 each 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 such 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 5 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 any Purchaser or any affiliate of such 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 Final 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. The Company shall also contemporaneously with the qualification, designation and listing of the Conversion Shares seek to have the Preferred Shares listed on the Nasdaq National Market System, subject to the Preferred Shares meeting the listing requirements of the Nasdaq National Market System. If such Preferred Shares are listed, the Company shall use its best efforts to maintain the designation and quotation so long as the Preferred Shares are determined to meet any such quotation or listing requirements. 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, 6 obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Purchaser may assign its 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 Independent Nature of Purchasers' Obligations and Rights. The obligations of each Purchaser hereunder are several and not joint with the obligations of the other Purchasers hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser hereunder. Nothing contained herein or in any other agreement or document delivered herewith, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser shall be entitled to protect and enforce its rights, including without limitation the rights arising out of the Certificate of Designation, this Agreement or the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. 5.4 No Reliance; Representations by Purchasers. 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. 5.5 Injunctive Relief. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to each 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. 5.6 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. 7 5.7 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. 5.8 Headings. The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 5.9 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 4809 Cole Avenue, Suite 108 Dallas, Texas 75205 Attn.: Chief Executive Officer Fax: 214-559-3933 with a copy to: Haynes and Boone, LLP 901 Main Street, Suite 3100 Dallas, Texas 75202 Attn: Janice V. Sharry Tel: 214-651-5562 Fax: 214-651-5940 and if to any Purchaser, to such address for such Purchaser as shall appear on the signature page hereof executed by such Purchaser, or as shall be designated by such Purchaser in writing to the Company. 5.10 Expenses. The Company and each Purchaser shall pay all costs and expenses that it incurs in connection with the negotiation, execution, delivery and performance of this Agreement. 5.11 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 holders of at least two-thirds (2/3) of the Preferred Shares then outstanding, 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. 8 SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement. PURCHASER NAME: Herbert L. Brewer ----------------------------- By: /s/ Herbert L. Brewer Dated October 25, 2002 ------------------------------------ --- Name: Herbert L. Brewer Title: ADDRESS: ------------------------------------ ------------------------------------ Tel: -------------------------------- Fax: -------------------------------- Dollar Amount of Series A-1 Preferred Stock to be Purchased: $250,000 ----------- Accepted this 1st day of November, 2002. TOREADOR RESOURCES CORPORATION By: /s/ G. Thomas Graves III -------------------------------------------- Name: G. Thomas Graves III Title: President and Chief Executive Officer 9 SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement. PURCHASER NAME: Herbert and Paulyne Brewer 1992 Trust --------------------------------------- By: /s/ Herbert L. Brewer Dated October 25, 2002 ------------------------------------ --- Name: Herbert L. Brewer Title: Trustee ADDRESS: ------------------------------------ ------------------------------------ Tel: -------------------------------- Fax: -------------------------------- Dollar Amount of Series A-1 Preferred Stock to be Purchased: $250,000 ----------- Accepted this 1st day of November, 2002. TOREADOR RESOURCES CORPORATION By: /s/ G. Thomas Graves III -------------------------------------------- Name: G. Thomas Graves III Title: President and Chief Executive Officer 10 SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement. PURCHASER NAME: William I. Lee ----------------------------- By: /s/ William I. Lee Dated October 29, 2002 ------------------------------------ --- Name: William I. Lee Title: ADDRESS: 4809 Cole Ave ------------------------------------ Dallas, Texas 75205 ------------------------------------ Tel: -------------------------------- Fax: -------------------------------- Dollar Amount of Series A-1 Preferred Stock to be Purchased: $250,000 ----------- Accepted this 1st day of November, 2002. TOREADOR RESOURCES CORPORATION By: /s/ G. Thomas Graves III -------------------------------------------- Name: G. Thomas Graves III Title: President and Chief Executive Officer 11 SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement. PURCHASER NAME: John Mark McLaughlin ----------------------------- By: /s/ John Mark McLaughlin Dated October 29, 2002 ------------------------------------ --- Name: John Mark McLaughlin Title: ADDRESS: 2201 Sherwood Way, #201 ------------------------------------ San Angelo, Texas 76901 ------------------------------------ Tel: 915-942-0401 -------------------------------- Fax: 915-947-4859 -------------------------------- Dollar Amount of Series A-1 Preferred Stock to be Purchased: $150,000 ----------- Accepted this 1st day of November, 2002. TOREADOR RESOURCES CORPORATION By: /s/ G. Thomas Graves III -------------------------------------------- Name: G. Thomas Graves III Title: President and Chief Executive Officer 12 SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement. PURCHASER NAME: H. R. Sanders, Jr. ----------------------------- By: /s/ H. R. Sanders, Jr. Dated October 28, 2002 ------------------------------------ --- Name: H. R. Sanders, Jr. Title: ADDRESS: 390 CR 1526 ------------------------------------ Morgan, Texas 76871 ------------------------------------ Tel: (254) 622-3132 -------------------------------- Fax: (254) 622-2636 -------------------------------- Dollar Amount of Series A-1 Preferred Stock to be Purchased: $25,000 ---------- Accepted this 1st day of November, 2002. TOREADOR RESOURCES CORPORATION By: /s/ G. Thomas Graves III -------------------------------------------- Name: G. Thomas Graves III Title: President and Chief Executive Officer 13 SCHEDULE OF PURCHASERS

PURCHASE PRICE OF PURCHASER NAME ADDRESS SERIES A-1 PREFERRED STOCK -------------- ------- -------------------------- Herbert L. Brewer 2 Cedro Place $250,000 Dallas, TX 75230 Herbert and Paulyne Brewer 2 Cedro Place $250,000 1992 Trust Dallas, TX 75230 William L. Lee 4809 Cole Ave. $250,000 Dallas, TX 75205 John Mark McLaughlin 2201 Sherwood Way $150,000 #201 San Angelo, TX 76901 H.R. Sanders, Jr. 390 CR 1526 $ 25,000 Morgan, TX 76671

EX-10.25 5 d04484exv10w25.txt EX-10.25 SHAREHOLDERS AGREEMENT EXHIBIT 10.25 SHAREHOLDERS AGREEMENT BETWEEN ANGLO-AFRICAN ENERGY, INC. AND TRANS-DOMINION HOLDINGS LIMITED THIS AGREEMENT is made and entered into as of this 1st day of August, 2000 ("Effective Date") by and between Anglo-African Energy, Inc., a corporation organized and existing under the laws of Delaware ("AAE") and Trans-Dominion Holdings Limited, a corporation organized and existing under the laws of the Island of Jersey, Channel Islands, United Kingdom ("TDH"). AAE and TDH are individually referred to as "Party" and collectively as the "Parties". WHEREAS, AAE and its Affiliates hold seventy-five percent (75%) and TDH holds twenty-five percent (25%) of the issued and outstanding common stock ("TED Shares") of Trinidad Exploration and Development Ltd. ("TED"); and WHEREAS, the Parties to this Agreement, together with those persons or entities who shall acquire TED Shares after the date hereof and agree to be bound by the terms hereof, desire to define their respective rights and obligations as shareholders in TED. NOW THEREFORE, in consideration of the foregoing and of the mutual premises, covenants and agreements contained herein, the parties hereto agree as follows: Article 1. Definitions As used in this Agreement, the terms described below shall have the following meanings: 1.1 Affiliate means a company, partnership or other legal entity which controls, or is controlled by or which is controlled by an entity which controls, a Party. Control means the ownership directly or indirectly of more than fifty (50) percent of the voting rights in a company, partnership or legal entity. 1.2 Agreed Interest Rate means interest compounded on a monthly basis, at the rate per annum equal to the one (1) month term, London Interbank Offered Rate (LIBOR rate) for U.S. dollar deposits, as published by The Wall Street Journal or if not published, then by the Financial Times of London, plus five (5) percentage points, applicable on the first Business Day prior to the due date of payment and thereafter on the first Business Day of each succeeding calendar month. If the aforesaid rate is contrary to any applicable usury law, the rate of interest to be charged shall be the maximum rate permitted by such applicable law. 1.3 Agreement means this agreement, together with the Exhibits attached to this agreement, and any extension, renewal or amendment hereof agreed to in writing by the Parties. 1.4 Business Day means a day on which the banks in New York, NY and London, England are open for business. 1.5 Contracts means the Farmout Agreements, the Joint Operating Agreement between Petrotrin and TED dated October , 1999, the Licenses and related Deeds of Assignment and any similar agreements for the exploitation of petroleum in the Republic of Trinidad and Tobago entered into by TED during the term of this Agreement. 1.6 Dollars means dollars of the United States of America. 1.7 Farmout Agreements means the Farmout Agreements for Petrotrin's Contract Area and TED's Contract Area dated October , 1999. 1.8 Government means the government of the Republic of Trinidad and Tobago and any political subdivision or agency or instrumentality thereof. 1.9 License or Licenses means the Exploration and Production (Public Petroleum Rights) Licenses No. 9610 of 1970 and No. _____ of 1999 for the Southwest Peninsula granted to Petrotrin and the Exploration and Production (Private Petroleum Rights) License dated 16 February 1996 granted to TED by the Government entitling them to explore and exploit the License Area and any future Exploration and Production Licenses obtained by the Company during the term of this Agreement. 1.8 License Area means the surface area that is described in each of the Licenses as such area may vary from time to time in accordance with and during the term of each such License. 1.9 Petrotrin means the Petroleum Company of Trinidad and Tobago, Ltd. 1.10 Transfer shall mean to sell, assign, convey, donate, transfer or otherwise dispose of or to contract to do any of the foregoing. 2 Article 2. Board of Directors 2.1 The Board of Directors of the Company shall consist of four directors. AAE shall be entitled to nominate three directors, and TDH shall be entitled to nominate one director. All corporate action shall be taken by a majority vote of the Board of Directors. 2.2 It is agreed that the initial directors shall be Peter G. Dilling, Duncan A. Lee, Christopher J. Ball and Joe Ciavarra. 2.3 Each Party agrees to use its best efforts to take all action necessary to cause the election of the directors nominated pursuant to Article 2.1. Article 3. Restrictions on Transfer or Encumbrance 3.1 Except as necessary to implement the provisions of Articles 10.3 and 10.4, no Party shall Transfer any TED Shares or any right, title or interest therein or thereto and no purported Transfer shall be effective, except as provided in this Article 3. 3.2 The certificates representing the TED Shares shall have the following endorsement written, printed or stamped upon the face thereof: "This certificate is issued subject to all the terms and conditions of a Stockholders Agreement, dated as of August 1, 2000 by and between the Company and all of its Stockholders as of such date and this certificate shall not be transferred except in compliance with all of the terms and provisions of said agreement, a copy of which is on file with the Company, and this certificate shall, at all times, remain subject to the terms and conditions thereof." 3.3 Nothing contained herein shall prohibit any Party from Transferring TED Shares to an Affiliate, provided such transferee agrees in writing to be bound by the terms of this Agreement. 3.4 Any Transfer by a Party of all or a portion of its TED Shares, whether directly or indirectly by assignment, merger, consolidation, or sale of stock, or other conveyance, other than with or to an Affiliate, shall be subject to the following procedure: (A) Once the transferor Party and a proposed transferee have fully negotiated the final terms and conditions of a Transfer of all or a portion of its TED Shares, such final terms and conditions shall be disclosed in detail to the other Party in a notice from the transferor. The other Party shall have the right to acquire the TED Shares 3 from the transferor on the same terms and conditions agreed to by the proposed transferee it within thirty (30) days of the transferor's notice, such Party delivers to all other Parties a counter-notification that it accepts the agreed upon terms and conditions of the transfer without reservations or conditions. If the other Party does not deliver such counter-notification, the transfer to the proposed transferee may be made, subject to the other provisions of this Article III, under terms and conditions no more favorable to the transferee than those set forth in the notice to the other Party, provided that the transfer shall be concluded within one hundred eighty (180) days from the date of the notice plus such reasonable additional period as may be required to secure Governmental approvals. (B) In the event that a Party's proposed Transfer of part or all of its TED Shares involves consideration other than cash or involves other properties included in a wider transaction (package deal) then the TED Shares (or part thereof) shall be allocated a reasonable and justifiable cash value by the transferor in any notification to the other Party. Article 4. Voting of TED Shares 4.1 Each Party agrees to vote its respective TED Shares so as to carry out and make effective all of the terms and provisions of this Agreement. 4.2 All shareholder action may be taken by majority vote of the shareholders except for the disposition of all of the assets of TED, the liquidation of TED or any transactions between TED and a Party or any Affiliate of a Party, other than in the ordinary course of business. As used herein, the term "ordinary course of business" means any activity that is related to the exploration, production, storage, transportation and sale of petroleum, including without limitation, the acquisition of additional petroleum rights licenses or producing properties. For purposes of the foregoing sentence, it is understood and agreed by the Parties that the acquisition of petroleum rights or licenses from a Party or its Affiliate is not a transaction in the ordinary course of business. In the event of a sale of petroleum to a Party, such sale shall be at the current market value f.o.b. the delivery point. In the event that TDH disagrees with a decision of the majority of the shareholders, and as a result of such disagreement decides to exercise its rights under Article 10.3, the Parties agree that, to the extent practicable, TDH's beneficial interest in the Licenses and the Contracts shall be recognized as of the date it gives notice of its desire to exercise its rights under Article 10.3, adjusted in accordance with Article 6 for any subsequent loans or investments in the Company made by the Parties. 4.3 In lieu of a meeting, any Party may submit any proposal to the other Party for a vote by notice. Each Party shall communicate its vote by notice to the other parties within five (5) Business Days. Any Party failing to communicate its vote within the prescribed time period shall be deemed to have voted in favor of such proposal. 4 Article 5. Indemnity 5.1 In the event that the Parties guarantee any loans on behalf of TED and such guarantee is joint or joint and several, then the Parties hereby agree to indemnity any Party who is required to make payments pursuant to the guarantee to the extent that it makes payments in excess of its proportionate share of the guaranteed amount. 5.2 It is the intent of the Parties that the participation and liability of any guaranteed amount as between the Parties themselves shall be in proportion to the respective number of issued and outstanding TED Shares owned by the Party. 5.3 As used herein, the term "guaranteed amount" shall mean the principal amount of the loan, including any interest thereon, which is jointly or jointly and severally guaranteed by the Parties. Article 6. Additional Capital Contributions or Loans to TED 6.1 For purposes of this Article 6, each Party has contributed or has been deemed to contribute to TED the amount set forth in Exhibit A hereto. 6.2 From and after the Effective Date of this Agreement, AAE agrees to lend to TED such amounts and at such times as may be necessary to fund the work programs required under the License and the Contracts as well as to fund other operating expenses of TED in an aggregate amount not to exceed four million Dollars ($4,000,000). This loan will bear interest at the rate of eight percent (8%) per annum and will be repayable out of the proceeds of oil sales in accordance with the terms of the Loan Agreement attached hereto as Exhibit B. 6.3 Any additional funding that is required by TED in excess of the $4,000,000 referred to in Article 6.2 above shall be contributed by the Parties pro rata to their shareholding in TED. If one of the Parties fails to pay, when due, its pro rata share of the required amounts, such Party shall be in default under this Agreement ("Defaulting Party"). The non-Defaulting Party shall promptly give notice of such default to the Defaulting Party (the "Default Notice"). The amount not paid by the Defaulting Party shall bear interest from the date due until paid in full at the Agreed Interest Rate. [REST OF PAGE INTENTIONALLY LEFT BLANK] 5 6.4 If the Defaulting Party fails to remedy its default by the fifteenth (15th) day following the date of the Default Notice, then without prejudice to any other rights available to the non-Defaulting Party to recover amounts owing to it under this Agreement, the non-Defaulting Party shall have the option, exercisable at anytime thereafter, to have its percentage shareholding in TED recalculated as follows: The Defaulting Party's percentage shareholding will be reduced to that percentage resulting from dividing such Defaulting Party's net capital contributions by the aggregate net capital contributions of both the Defaulting and Non-Defaulting Parties. For purposes of this calculation, the term "net capital contributions" shall mean that amount shown on Exhibit A plus any additional amounts in excess of the $4,000,000 referred to in Article 6.2 contributed to the capital of TED as either loans or as equity, less the amount of any such loans which are repaid or the amount of any such equity which is redeemed. The percentage shareholding of the non-Defaulting Party shall be increased by a like amount. 6.5 The Parties agree that the non-Defaulting Party shall be issued such additional number of TED Shares as may be necessary to reflect the change in such non-Defaulting Party's percentage interest in the ownership of TED resulting from the application of the foregoing formula. The Defaulting Party shall, without delay, following any request from the non-Defaulting Party, do any and all acts required to be done and execute any and all documents and take such other actions as may be necessary in order to effect a prompt and valid issuance of such additional TED Shares to the non-Defaulting Party. The acceptance by non-Defaulting Party of any such additional TED Shares shall not limit any rights or remedies that the non-Defaulting Party has to recover any other amounts (including interest) that may be owing under this Agreement, the Stock Purchase Agreement executed by the Parties and others as of date hereof, or any of the Contracts by the Defaulting Party. Article 7. Term 7.1 Except as otherwise provided in Article 7.2 below, this Agreement shall continue for as long as both Parties remain as shareholders in TED. 7.2 This Agreement shall automatically terminate upon the happening of any of the following contingencies: (A) Dissolution of TED; (B) The consummation of any merger or consolidation to which TED is a party, unless immediately following such merger or consolidation, the Parties shall own all of the voting power of the outstanding capital stock of the surviving or resulting company; (C) The unanimous written consent of both Parties to the termination of this Agreement; (D) Commencement by TED of a voluntary bankruptcy which proceeding results in the Parties being required to relinquish control over the day to day affairs and/or operations of TED; 6 (E) The granting of relief against TED in an involuntary bankruptcy proceeding; or (F) An assignment for the benefit of creditors made by TED which results in the Parties being required to relinquish control over the day to day affairs and/or operations of TED. (G) If one or both Parties take title to their interests in the Contracts and Licenses directly. Article 8. Notices 8.1 Except as otherwise specifically provided, all notices authorized or required between the Parties by any of the provisions of this Agreement, shall be in writing, in English and delivered in person or by courier service or by any electronic means of transmitting written communications which provides written confirmation of complete transmission, and addressed to such Parties as designated below. Oral communication does not constitute notice for purposes of this Agreement, and telephone numbers for the Parties are listed below as a matter of convenience only. The originating notice given under any provision of this Agreement shall be deemed delivered only when received by the Party to whom such notice is directed, and the time for such Party to deliver any notice in response to such originating notice shall run from the date the originating notice is received. Each Party shall have the right to change its address at any time and/or designate that copies of all such notices be directed to another person at another address, by giving written notice thereof to the other Party. If to Anglo-African Energy, Inc.: Anglo-African Energy, Inc. 29 Queens Park West Port of Spain Trinidad, W.I. Attention: Peter G. Dilling Telephone: To be advised Telecopier: To be advised With a copy to: Aitken Irvin Berlin & Vrooman, LLP 2 Gannett Drive White Plains, NY 10604 Telephone: 914-694-5717 Telecopier: 914-694-1647 Attention: Alan D. Berlin, Esq. 7 If to Trans Dominion Holdings Limited: Trans Dominion Holdings Limited: Piermont House 33/35 Pier Road St. Helier Jersey Channel Islands JE4 8QZ Fax: +44-1534-33536 Attn: Jeremy Johnson With a copy to: Madison Oil Company 9400 North Central Expressway Suite 1209 Dallas, Texas 75231 Attention: J. Ciavarra Tel: 214-373-6000 Fax: 214-373-6071 With a further copy to: Meighen Demers 200 King Street W, Suite 1100 Toronto, Canada M5H 3T4 Attention: Rick Sutin Tel: 416-340-6021 Fax: 416-977-5239 Article 9. Applicable Law and Dispute Resolution 9.1 This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of New York. 9.2 Any dispute, controversy or claim arising out of or in relation to or in connection with this Agreement including without limitation any dispute as to the construction, validity, interpretation, enforceability or breach of this Agreement that is not otherwise resolved through negotiation shall be exclusively and finally settled by arbitration, and any Party may submit such a dispute, controversy or claim to arbitration. If the claims giving rise to the arbitration is the direct result of and/or is based on the identical claims submitted for adjudication in an arbitration arising out of an agreement to which one of the Parties is a party, then the claims arising under this 8 Agreement shall be submitted for adjudication in such other arbitration proceeding. If such is not the case, or if the arbitrators in the other arbitration proceeding can not or will not take jurisdiction of such claims, then the following provisions shall apply to any arbitration proceeding instituted under this Agreement. 9.3 A single arbitrator shall be appointed by unanimous consent of the Parties. If the Parties cannot reach agreement on an arbitrator within thirty (30) days of the submission of a Notice of Arbitration, the appointing authority shall be the American Arbitration Association, which shall appoint an independent arbitrator who does not have any financial interest in the dispute, controversy or claim. 9.4 Unless otherwise expressly agreed to in writing by the parties to the arbitration proceedings: (A) The arbitration proceedings shall be held in New York, New York; (B) The arbitrator shall be and remain at all times wholly independent and impartial; (C) The arbitration proceedings shall be governed by the U.S. Arbitration Act, 9 U.S.C. Sections 1-16, and be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect; (D) Any procedural issues not determined under the arbitral rules selected pursuant to this Agreement shall be determined by the law of the place of arbitration, other than those laws which would refer the matter to another jurisdiction; (E) Each party shall be responsible for its own costs of the arbitration proceedings (including attorneys fees and costs); and (F) Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Article 10. Miscellaneous 10.1 Unless otherwise unanimously agreed by the Parties, TED will engage only in exploration and production activities, including related storage and transportation functions. 10.2 AAE and TDH will each have the right, but not the obligation, to enter into other petroleum activities in Trinidad and Tobago in addition to the Licenses as well as non-petroleum related projects and activities, all exclusive of TED. 10.3 If one or both Parties wish to hold all of their interests in the Licenses and the Contracts directly rather than through TED, the Parties agree to cooperate with each other and to execute all necessary documentation in a timely manner to achieve such result in an appropriate manner consistent with applicable laws and 9 regulations, the terms of the Licenses and all necessary Government approvals, including without limitation, the approval of Petrotrin. 10.4. In the event that the Parties wish to transfer an interest in TED to a third party (or if they hold their interests in the Licenses directly, an interest in the Licenses), then each Party shall reduce its interest either in TED or in the Licenses, as the case may be, pro-rata. 10.5 Headings and titles are for convenience or reference only and shall not control the construction or interpretation of any provision hereof. 10.6 The Parties agree that the management costs of TED and charges made to TED by the Parties or their Affiliates shall be fair and reasonable. All such charges shall be subject to audit by either Party at such Party's sole expense. If there is a disagreement with regard to the charges being made by one of the Parties, then the provisions of the Accounting Procedure of the Joint Operating Agreement shall govern. 10.7 TDH shall on request, be entitled to copies of all data of TED including, but not limited to, financial and accounting information, seismic data and interpretations, well logs and reports and any other technical data or reports, contracts and agreements. The Parties agree that the confidentiality provisions of the Joint Operating Agreement shall govern the use of all such information and data. The cost of copying any such information hereunder, shall be at the sole expense of TDH. 10.8 All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the identity of the person or persons or entity or entities may require. Each defined term herein may be used in either the singular or plural form whether or not so defined. 10.9 This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and no interpretation, change, termination or waiver of, or extension of time for performance under, any provision of the Agreement shall be binding upon any party unless in writing and signed by the party intended to be bound thereby. 10.10 No waiver of or failure to exercise any right under, or default or extension of time for performance under, any provision of this Agreement shall affect the right of any party to exercise any subsequent right under or otherwise enforce said provision or any other provision hereof or to exercise any right or remedy in the event of any other default whether or not similar. 10.11 In case any one or more of the provisions contained in this Agreement shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired 10 thereby and the parties will attempt to agree upon a valid and enforceable provision which shall be a reasonable substitute for such invalid or unenforceable provision in light of the tenor of this Agreement, and, upon so agreeing, shall incorporate such substitute provision in this Agreement. 10.12 This Agreement may be executed in one or more counterparts, all of which together shall constitute a single instrument. Each counterpart shall constitute an original, any one of which may be introduced in evidence or used for any other purposes without production of its duplicate counterpart. 10.13 The Parties shall execute and deliver all such future instruments and take such other and further action as may be reasonably necessary or appropriate to carry out the provisions of this Agreement and the intention of the Parties as expressed herein. [REST OF PAGE INTENTIONALLY LEFT BLANK] 11 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written. Anglo-African Energy, Inc. Trans-Dominion Holdings Limited By: /s/ PETER G. DILLING By: /s/ J. JOSEPH CIAVARRA ------------------------------- --------------------------------- Peter G. Dilling J. Joseph Ciavarra President Pres & CEO LIST OF EXHIBITS Exhibit A Shareholdings and Initial Capital Contributions Exhibit B Loan Agreements 12 EXHIBIT A SHAREHOLDERS AGREEMENT BETWEEN ANGLO-AFRICAN ENERGY, INC. AND TRANS-DOMINION HOLDING LIMITED

Capital Contribution For Shareholder TED Shares Owned Purposes of Article 6 - ----------- ---------------- ------------------------ Anglo-African Energy, Inc. 7,500 US$3,000,000 Trans-Dominion Holdings Limited 2,500 US$1,000,000

13 EX-10.26 6 d04484exv10w26.txt EX-10.26 CONSULTING AGREEMENT EXHIBIT 10.26 CONSULTING AGREEMENT This Consulting Agreement (the "Agreement") is entered into by and between Toreador Resources Corp. ("Toreador") and Richard D. Preston ("Preston"). In consideration of the mutual promises and agreements contained herein, the parties agree as follows: 1. Termination of Employment. Preston's employment with Toreador shall terminate effective June 30, 2002. By executing this Consulting Agreement, Toreador and Preston hereby waive and release each other from any and all rights and obligations under the employment agreement between Madison Oil Co. and Preston dated September 10, 2001. Preston shall have no right to further compensation from Toreador following the termination of his employment, except as provided in this Agreement. 2. Consulting Services. On June 1, 2002, Toreador shall retain Preston's services as a consultant for an initial period of six (6) months, beginning on June 1, 2002 and ending on November 30, 2002. Following the initial term, this Agreement shall automatically renew for successive one-month terms unless, no later than ten (10) days prior to the expiration of the current term, either party gives written notice to the other party of intent to terminate the Agreement. During the term of this Agreement, Preston shall be available to perform and shall perform consulting services as requested by Toreador, including but not limited to, services related to commercial -1- evaluations, strategic planning, mergers and acquisitions, and international business practices and business support. 3. Compensation. As compensation for his services as a consultant, Toreador shall pay Preston the following: A. Monthly Retainer. Preston shall receive a monthly retainer of Five Thousand Dollars ($5,000.00), which shall constitute Preston's full compensation for services rendered up to twenty-five (25) hours per month. B. Additional Compensation. For hours worked by Preston in excess of twenty-five (25) per month, Toreador shall pay Preston an additional Two Hundred Dollars ($200.00) per hour. C. Stock Options. Toreador shall grant Preston options to purchase twenty-five thousand (25,000) shares of Toreador common stock, at an exercise price of Five Dollars ($5.00) per share. The stock options shall be fully vested as of the date of the grant. Any unexercised options shall expire ten (10) years after the date of the grant. D. Insurance. Upon the termination of his employment on June 30, 2002, Preston will continue to participate in Toreador's group insurance programs at Toreador's expense during the term of this Agreement. Such insurance coverage will include health, dental, disability, life, travel and/or other insurance afforded Toreador employees. Upon termination of this Agreement, Preston may elect to continue his insurance coverage benefits through COBRA at the then-current level of coverage. If Preston elects COBRA continuation -2- coverage, Toreador shall pay the monthly COBRA premium to maintain Preston's insurance coverage until (a) Preston requests discontinuance of the coverage, (b) Preston secures other insurance coverage elsewhere or (c) eighteen (18) months following the termination of this Agreement, whichever is less. E. Reimbursement Of Expenses. Toreador shall reimburse Preston for reasonable business expenses incurred by Preston in the performance of services under this Agreement, in accordance with Toreador's normal policies and procedures regarding reimbursement of expenses. F. Computer And Printer. Upon the termination of his employment, Preston shall be entitled to retain the computer and printer provided to Preston by Toreador. G. Severance Pay. Preston shall be entitled to receive severance pay from Toreador in the amount of One Hundred Eighty Thousand Dollars ($180,000.00). At Preston's option, the severance shall be paid in either one lump sum payable within 10 days after the termination of employment, or in installments payable over a time period designated by Preston. At Preston's option, the severance payment(s) may also be deferred until the year 2003. -3- 4. Independent Contractor. In performing services under this Agreement, Preston shall be acting as an independent contractor, and not an employee of the Company. Preston shall be solely responsible for any taxes due as a result of his compensation for services rendered under the terms of this Agreement. Executed to be effective for all purposes as of 24 June, 2002. RICHARD D. PRESTON /s/ Richard D. Preston ----------------------------------------- Date: 24 June 2002 ------------------------------------ TOREADOR RESOURCES CORP. By: /s/ G. Thomas Graves III -------------------------------------- Title: President ----------------------------------- Date: June 24, 2002 ------------------------------------ -4- EX-10.27 7 d04484exv10w27.txt EX-10.27 WAIVER LETTER DATED MARCH 21, 2002 EXHIBIT 10.27 To: Madison Energy France S.C.S. (formerly Madison/Chart Energy S.C.S.) ("MEF") (the "BORROWERS' AGENT") To: Madison Oil Company Europe Madison Oil France S.A. Madison Energy France S.C.S. (the "BORROWERS") To: Madison Oil Company ("MOC") Madison Petroleum Inc. Madison Oil Company Europe Madison Oil France S.A. Madison Energy France S.C.S. Madison (Turkey) Inc Madison Oil Turkey Inc (the "GUARANTORS") To: Toreador Resources Corporation (the "TOREADOR") 21 March, 2002 WAIVER AND CONSENT - VARIOUS ISSUES We refer to the Revolving Credit Facility Agreement dated 30th March, 2001 between the Borrowers, the Guarantors, Barclays Capital as Arranger, the Banks (as defined therein) and Barclays Bank PLC as Facility Agent, Technical Agent, Ancillary Bank and US Security Trustee as amended (the "CREDIT AGREEMENT"). We also refer to a waiver and consent letter dated November, 2001 relating to the merger of MOC with Toreador (the "MERGER WAIVER LETTER"). All of the Banks, the Ancillary Bank and the Hedging Bank, have authorised the Facility Agent to enter into this letter on their behalf. 1. In this letter, unless otherwise defined or the context otherwise requires: (a) terms defined or used in the Credit Agreement have the same meaning in this letter; (b) references to specific numbered clauses are clauses of the Credit Agreement; (c) references to paragraphs are, unless stated otherwise, references to paragraphs of this letter; (d) references to the Merger Agreement, the Voting Agreement, the Toreador Subordinated Revolving Credit Agreement, the Toreador Subordinated Revolving Credit Note and the Subordination and Support Agreement are as each of those terms are defined in the Merger Waiver Letter; (e) "EQUITY ISSUE PROCEEDS" means the proceeds (whether in cash or in kind) of any equity or capital issue (to include, without limitation, share placement, the issue of preferred stock or subordinated loan stock or any other similar instrument) (the "EQUITY ISSUE"); (f) "EQUITY ISSUE PROCEEDS RECEIPT DATE" means the date on which Toreador or any of its subsidiaries has, since the date of this letter, received Equity Issue Proceeds which in aggregate equal or exceed $5,000,000; (g) "FRENCH PERMITTED PAYMENTS" means: (i) the costs referred to in paragraphs (a)(i) and (b) of the definition of "Permitted Payment" in the Credit Agreement; and (ii) any general and administrative expenditure relating to any Borrowing Base Interest, Borrowing Base Petroleum or Borrowing Base Asset. (h) "TRINIDADIAN PERMITTED PAYMENTS" means (i) the costs referred to in paragraph (a)(i) of the definition of "Permitted Payment" in the Credit Agreement except that reference to Borrower Borrowing Asset, Borrowing Base Petroleum or Borrowing Base Interest in that definition shall be construed as a reference to Trinidadian Interest, Trinidadian Petroleum and Trinidadian Asset); (ii) any taxes payable by Trans Dominion Holdings Ltd; and (iii) any general and administrative expenditure relating to any Trinidadian Interest, Trinidadian Petroleum and Trinidadian Asset. (i) "TURKISH PERMITTED PAYMENTS" means: (i) the costs referred to in paragraph (a)(i) of the definition of "Permitted Payment" in the Credit Agreement except that reference to Borrower Borrowing Asset, Borrowing Base Petroleum or Borrowing Base Interest in that definition shall be construed as a reference to Turkish Interest, Turkish Petroleum and Turkish Asset); (ii) any taxes payable by MOTI and Madison Turkey; and (iii) any general and administrative expenditure relating to any Turkish Interest, Turkish Petroleum and Turkish Asset. (j) "TURKISH/TRINIDADIAN ASSET" means: (i) (A) the Cendere oil field in Turkey; (B) the Zeynel oil field in Turkey; (C) the Boyabet oil field in Turkey; and (D) the Thrace Basin in Turkey, 2 (each a "TURKISH ASSET"); and (ii) the Bonasse oil field in Trinidad and Tobago and the related Southwest Cedros Peninsular Exploration Licence (the "TRINIDADIAN ASSET"); (k) "TURKISH/TRINIDADIAN INTEREST" means: (i) all of the Obligors' present and future interest in a Turkish Asset and all agreements, facilities or insurances relative to that Turkish Asset or to Turkish Petroleum (the "TURKISH INTEREST"); and (ii) all of the Obligors' present and future interest in a Trinidadian Asset and all agreements, facilities or insurances relative to that Trinidadian Asset or to Trinidadian Petroleum (the "TRINIDADIAN INTEREST"); (l) "TURKISH/TRINIDADIAN PETROLEUM" means: (i) in respect of a Turkish Asset, all petroleum won and saved from that Turkish Asset that accrues to the Turkish Interest in that Turkish Asset (including, without limitation, any such petroleum that is royalty petroleum) ("TURKISH PETROLEUM"); and (ii) in respect of a Trinidadian Asset, all petroleum won and saved from that Trinidadian Asset that accrues to the Trinidadian Interest in that Trinidadian Asset (including, without limitation, any such petroleum that is royalty petroleum) ("TRINIDADIAN PETROLEUM"); and (m) "WARRANT" means the warrants to be issued pursuant to the Warrant Letter; and (n) "WARRANT LETTER" means the warrant letter dated on or about the date hereof between Toreador and the Arranger. 2. Subject to the terms and conditions of this letter, Barclays Bank PLC, as Facility Agent confirms its consent to the merger of Toreador and MOC detailed in paragraph 2 of the Merger Waiver Letter and confirms that the Banks have agreed to waive the following Events of Default: (a) the Events of Default detailed in paragraph 2 of the Merger Waiver Letter; (b) under paragraphs 12(f) and 12(C) of the Merger Waiver Letter constituted by: (i) failure by the Obligors to deliver, in accordance with paragraph 3(b) of the Merger Waiver Letter, evidence satisfactory to the Facility Agent that the agreements referred to in paragraph 3(b)(i) of the Merger Waiver Letter have been duly executed by each party (other than the Finance Parties) to the relevant agreement, and a legal opinion in a form and substance satisfactory to the Facility Agent in relation to each of those agreements, on or before 15th January, 2002; and (ii) failure by MOC to deliver, in accordance with paragraph 9(a) of the Merger Waiver Letter, a certified copy of each of the documents referred to that paragraph within 2 Business Days of the date of the Merger Waiver Letter; 3 (c) the Event of Default detailed in paragraph 10(a) of the Merger Waiver Letter; and (d) under paragraph 13(b) of the Merger Waiver Letter, constituted by failure by MOCE to procure, in accordance with paragraph 10(b) of the Merger Waiver Letter, that Madison Turkey has transferred all of its assets, liabilities, business and undertakings to MOTI, and that Madison Turkey has been wound up and dissolved, by 15th January, 2002. 3. The Obligors undertake to deliver to the Facility Agent, on or before 31st March 2002: (a) evidence satisfactory to the Facility Agent that the Merger Agreement, the Voting Agreement, the Toreador Subordinated Revolving Credit Agreement, the Toreador Subordinated Revolving Credit Note and the Subordination and Support Agreement have each been duly executed by each party (other than the Finance Parties) to the relevant agreement; and (b) a legal opinion from a reputable law firm in a form and substance satisfactory to the Facility Agent in relation to each of the agreements mentioned in paragraph (a) above. 4. MOC undertakes to deliver to the Facility Agent, on or before 31st March 2002, a certified copy of each of the Merger Agreement, the Voting Agreement, the Toreador Subordinated Revolving Credit Agreement and the Toreador Subordinated Revolving Credit Note. 5. MOCE undertakes to procure that, by no later than 31st October, 2002: (a) Madison Turkey shall have transferred all of its assets, liabilities, business and undertakings to MOTI and shall be wound up and dissolved; and (b) that MOTI shall have discharged in full all of the consideration for that transfer. 6. The Calculation Dates due to occur (in accordance with paragraph 6(a) of the Merger Waiver Letter) on 28th February, 2002 and (in accordance with the Credit Agreement) on 30th June, 2002 shall be consolidated and amended to be the earlier of: (a) the date which is 21 days after the Facility Agent notifies the Borrower's Agent that there has been an Event of Default and that it requires a new Forecast to be prepared; (b) the date which is 21 days after the date on which Toreador fails to pay an amount in accordance with paragraph 12(b) below; (c) the date which is 21 days after the Equity Issue Proceeds Receipt Date; and (d) if by 10th October, 2002, none of the events in paragraphs (a), (b) or (c) above have occurred, 31st October, 2002. 7. The Repayment Dates due to occur (in accordance with paragraph 6(b)(i) of the Merger Waiver Letter) on 7th March, 2002 and (in accordance with Clause 6.1) on 7th July, 2002 shall be consolidated and amended to be: (a) if paragraph 6(a), (b) or (c) above applies, 7 days after the Calculation Date as determined in accordance with paragraph 6(a), (b) or (c) above (as the case may be); and 4 (b) if paragraph 6(d) above applies, 7th November, 2002. 8. If paragraph 6(a), (b) or (c) above apply, the Credit Agreement shall be deemed to be amended for that Calculation Date only as follows: (i) the reference to "45 days" in Clause 16.2(a) (Preparation and approval of Forecasts) shall be deemed to be a reference to "21 days"; (ii) the reference to "28 days" in Clause 16.2(b) (Preparation and approval of Forecasts) shall be deemed to be a reference to "12 days"; (iii) in Clause 16.2(c) (Preparation and approval of Forecasts), the words "7 days after the notification" shall be deleted and the following words inserted in their place: "5 days after the notification"; and (iv) in Clause 16.2(c) (Preparation and approval of Forecasts), the words "7 days after receipt of the draft Forecast" shall be deleted and the following words inserted in their place: "4 days after receipt of the draft Forecast". 9. (a) For the Repayment Date arising after a Calculation Date determined in accordance with paragraph 6(a), (b) and (d) above only, the Credit Agreement shall be deemed to be amended as follows in Clause 6.1(a)(ii)(B) (Repayment), the words "the 6-months' period ending on the last Calculation Date before that Repayment Date" shall be deleted and the following words inserted in their place: "the period beginning on 31st July, 2001 and ending on the last Calculation Date before that Repayment Date"; and (b) If, from the date of this letter until the next Calculation Date, any amounts are received as contemplated under Clause 7.2(c) then Clause 7.2(d)(iii) (Mandatory prepayment), shall be amended so that the words "the 6 months' period ending on the next Calculation Date" shall be deleted and the following words inserted in their place: "the period beginning on 31st July, 2001 and ending on the next Calculation Date". (c) For the Calculation Date determined in accordance with paragraph 6(c) above only, Clause 6.1 of the Credit Agreement shall be deemed to be amended so that the amount the Borrowers are required to repay pursuant to that Clause is the amount required (if any) to ensure that Total Indebtedness does not exceed the Borrowing Base Amount for the time being ("EQUITY PREPAYMENT AMOUNT"). 10. (a) Toreador undertakes in favour of the Banks and MOC to pay to MOC (and for the avoidance of doubt MOC undertakes to pay to the Facility Agent) and the Banks an amount equal to the Equity Prepayment Amount so that the Obligors may comply with their repayment obligations under the Credit Agreement (as amended by this letter and in particular paragraph 9(c) above). 5 (b) Toreador agrees that any payment made to MOC pursuant to paragraphs 10(a) above and 14(g) below shall be "Junior Debt" for the purposes of the Subordination and Support Agreement. MOC agrees that any payment made pursuant to paragraphs 10(a) above and 14(g) below shall be "Junior Debt" for the purposes of the Subordination Agreement dated 30th March, 2001 between members of the Madison group as debtors, the Facility Agent and MOF, MOC, MOCE and MPI. 11. Paragraph 7 of the Merger Waiver Letter shall not apply on and from the date of this letter. 12. (a) Subject to paragraphs (c) and (d) below, MOC agrees not to deliver a Notice of Borrowing (as that term is defined in the Toreador Subordinated Revolving Credit Agreement) to Toreador for an Advance (as that term is defined in the Toreador Subordinated Revolving Credit Agreement) under Clauses 2.1(a) and (c) of the Toreador Subordinated Revolving Credit Agreement of an amount which would cause the aggregate of all Advances (as that term is defined in the Toreador Subordinated Revolving Credit Agreement) then outstanding to Toreador under Clause 2.1(c) to exceed $2,000,000. (b) Subject to paragraphs (c) and (d) below, Toreador agrees to pay to the Facility Agent on each date set out in Part A of Schedule 1 to this letter (each a "PAYMENT DATE") an amount equal to or exceeding the amount set out opposite the relevant Payment Date in Part A of Schedule 1 to this letter (each a "REQUIRED PAYMENT"). (c) Paragraphs (a) and (b) above shall not apply after the date on which a Calculation Date determined in accordance with paragraph 6(a), (b), (c) or (d) above has occurred and if on the Repayment Date after that Calculation Date Total Indebtedness (after any payments to be made under the Finance Documents on that Repayment Date have been made) does not exceed the Borrowing Base Amount for the time being. (d) Paragraphs (a) and (b) above shall not apply after the date on which the aggregate of all amounts paid to the Facility Agent in accordance with paragraph (b) above exceeds $3,000,000 less amounts received by the Facility Agent up till the date of this letter under the Toreador Subordinated Revolving Credit Facility. (e) Toreador and MOC agree that no Notice of Borrowing (as that term is defined in the Toreador Subordinated Revolving Credit Agreement) shall be required in respect of Required Payments. (f) An amount equal to each Required Payment paid by Toreador to the Facility Agent in accordance with paragraph (b) above shall be deemed to be: (i) an Advance (as that term is defined in the Toreador Subordinated Revolving Credit Agreement) by Toreador to MOC under Clauses 2.1(a) and (b) of the Toreador Subordinated Revolving Credit Agreement; and (ii) a non-interest bearing loan repayable (subject to the Subordination Agreement dated 30th March, 2001 between the Borrowers (as Debtors), Barclays Bank PLC (as Facility Agent) and MOC, Madison Oil Company Europe, Madison Petroleum Inc and Madison Oil France S.A. (as Junior Creditors)) on demand shall be deemed to have been made by MOC to the Borrowers (or a loan on such other as are terms agreed by MOC and the Borrowers (in any case subject to the Subordination Agreement dated 30th March, 2001 referred to above). 6 (g) Notwithstanding Clause 7.7(e) (Miscellaneous provisions), payment of each Required Payment shall be deemed to be a prepayment of Loans by the Borrowers in an aggregate principal amount equal to the relevant Required Payment, to be applied against firstly Tranche B Loans and secondly Tranche A Loans (and Clauses 7.7(b) and (c) (Miscellaneous provisions) shall apply to any such prepayment). 13. The Credit Agreement is deemed to be amended as follows: (a) if the Borrowers repay or prepay any loan outstanding under Tranche A or Tranche B, then the Total Commitments shall, immediately upon that repayment or prepayment being made, automatically be reduced by an amount equal to the principal so repaid or prepaid; (b) Clause 6.2 shall be amended so the words "Tranche A" is inserted before "Tranche B" and the words ", but any amount repaid under Tranche A may subsequently be re-borrowed on and subject to the provisions of the Agreement" are deleted; and (c) Clause 7.7(c) shall be amended so that the words "Any amount prepaid under Tranche A may subsequently be re-borrowed on an subject to the terms of this Agreement but" are deleted and the words "Tranche A," are inserted before "Tranche B". 14. (a) Without prejudice to the Obligors obligations under the Credit Agreement, MOTI, Madison Turkey, Madison Oil Company Inc and MCE shall pay, and Toreador shall procure that MOTI, Madison Turkey, Madison Oil Company Inc and MCE pay: (i) the gross proceeds (without any deductions whatsoever) of any disposal of Turkish/Trinidadian Petroleum and Borrowing Base Petroleum; (ii) any sales tax payable on the amount referred to in paragraph (i) above; and (iii) any other amount payable to MOTI, Madison Turkey, Madison Oil Company Inc and MCE in respect of any Turkish/Trinidadian Petroleum or any Borrowing Base Petroleum, Turkish/Trinidadian Interest or Borrowing Base Interest or Turkish/Trinidadian Asset or Borrowing Base Asset except to the extent it is payable under insurances in respect of liabilities to third parties, seepage, pollution or the cost of control of wells, (the amounts being attributable to Borrowing Base Petroleum, Borrowing Base Interest or Borrowing Base Asset being "French Revenue", Turkish Petroleum, Turkish Interest and Turkish Asset being "Turkish Revenue" and the amounts being attributable to Trinidadian Petroleum, Trinidadian Interest and Trinidadian Asset being "Trinidadian Revenue", LESS (A) in the case of Trinidadian Revenue, Trinidadian Permitted Payments for that month ("NET TRINIDADIAN REVENUE"); and 7 (B) in the case of Turkish Revenue, Turkish Permitted Payments for that month ("NET TURKISH REVENUE"), directly to the Dollar Revenue Account, unless any such amount is received in another currency, in which case (where applicable) MOTI, Madison Turkey, MCE and Madison Oil Company Inc shall, and Toreador shall procure that MOTI, Madison Turkey, MCE or Madison Oil Company Inc. shall, immediately upon receipt convert that amount to Dollars and pay them directly to the Dollar Revenue Account; (b) The Borrowers shall on the last day of each month apply an amount equal to the aggregate of French Revenue less French Permitted Payments, Net Trinidadian Revenue and Net Turkish Revenue received during that month paid during that month in prepayment of the Loans (to be applied against first, Tranche B Loans and secondly, against Tranche A Loans); (c) It shall constitute an Event of Default if in any Quarter Period (as specified in Schedule 3) the amounts applied in prepayment of the Loans under this paragraph 14 is less than the amount specified in Schedule 3 for that Quarter Period; (d) The Borrowers obligations to prepay the Loans under this paragraph 14 shall cease on the later to occur of the date on which (i) an amount equal to the Total Minimum Cashflow Amount (as referred to in Schedule 3) is applied in prepayment of the Loans under and in accordance with this paragraph 14 and (ii) Total Indebtedness does not exceed the Borrowing Base Amount for the time being; (e) paragraph (i) of Clause 19.22 (Capital expenditure), shall not apply; (f) the Obligors shall procure that no Obligor shall make, nor incur any obligation or liability for or in respect of any capital expenditure except for capital expenditure detailed in Schedule 2 to this letter and then only to the extent that amounts are received from Toreador to fund such expenditure in accordance with paragraph (g) below; (g) Toreador agrees to pay to MOC in each of the periods permitted for payment referred to in Schedule 2 an amount equal to that specified for such period permitted for payment. MOC shall and shall procure that an amount equal to those amounts so received shall be applied towards the item of expenditure to which such amount relates. MOC shall provide to the Facility Agent all information that it may request to verify such application. MOC may request that the Facility Agent agree to an amendment to the period permitted for payment if it provides reasonable evidence demonstrating that an amount relating an item of expenditure is not required in the specified period permitted for payment; (h) without limiting the Facility Agent's rights under Clause 19.3(d) (Borrowing Base Asset and similar information), the Borrower's Agent shall supply to the Facility Agent (in sufficient copies for all of the Banks unless the Facility Agent agrees otherwise): (i) the information described in Clause 19.3(a)(i), (ii) and (iii) (Borrowing Base Asset and similar information), provided that the wording of that Clause shall be deemed amended for these purposes such that each reference to "Borrowing Base Asset" shall be deemed to be a reference to Turkish/Trinidadian Asset; and 8 (ii) any other information relating to a Turkish/Trinidadian Asset that could change the expected capital expenditures detailed in Schedule 2 to this letter or impose any additional material liability on the Obligors; and. (i) promptly deliver to the Facility Agent such information and evidence as it may from time to time require in order to check and verify the amount of any Turkish Revenue, Trinidadian Revenue, Trinidadian Permitted Payment or Turkish Permitted Payment. 15. The Obligors agree to procure that Trans Dominion Holdings Ltd: (a) promptly notifies the Facility Agent when Trans Dominion Holdings Ltd enters into any agreement relating to the Trinidadian Asset, the Trinidadian Interest or any Trinidadian Petroleum ("RELEVANT AGREEMENT"); (b) after notice by the Facility Agent to the Borrower's Agent that the Facility Agent requires security to be granted to it for the benefit of the Finance Parties, enters into an agreement granting a Security Interest over that Relevant Agreement above in form and substance satisfactory to the Facility Agent ("SECURITY DOCUMENT"); and (c) delivers a legal opinion from a reputable law firm in respect of all relevant jurisdictions in a form and substance satisfactory to the Facility Agent in relation to each of the Security Documents, and each Obligor shall do all things reasonably required by the Facility Agent for the granting, perfecting or protecting of any security intended to be granted under a Security Document. 16. (a) Each Guarantor agrees, and represents and warrants to each Finance Party as at the date it executes this letter: (i) that the arrangements contemplated by this letter do not in any way affect the guarantee and undertakings given by it under Clause 15 (Guarantee); and (ii) that the guarantee given by it under Clause 15 (Guarantee) is a continuing guarantee, in full force and effect, and will extend to the ultimate balance of all sums payable by the Obligors under the Finance Documents, regardless of the arrangements contemplated by this letter and any intermediate payments or discharge in whole or in part (including, without limitation, the prepayments deemed under paragraph 12(h) above). (b) MOC agrees, and represents and warrants to each Finance Party as at the date it executes this letter: (i) that the arrangements contemplated by this letter do not in any way affect any of the Finance Documents; and (ii) that its obligations under the Finance Documents are in full force and effect and are binding on, and enforceable against, MOC regardless of the arrangements contemplated by this letter. (c) Each Obligor makes the following representations and warranties to each Finance Party in respect of this letter: 9 (i) that it has the power to enter into and perform this letter and it has taken all necessary action to authorise the entry into, performance and deliver of this letter; and (ii) that this letter constitutes its legal, valid and binding obligation enforceable in accordance with its terms. (d) (i) Toreador represents and warrants as at the date it executes this letter, the Warrant Letter and each time it issues a Warrant, that: (A) that it has the power to enter into and perform this letter, the Warrants and the Warrant Letter and it has taken all necessary action to authorise the issue, performance and delivery of those Warrants; and (B) this letter, the Warrants and the Warrant Letter will, when issued, constitutes its legal, valid and binding obligation enforceable in accordance with its terms; and (ii) (A) Toreador undertakes to and shall procure that is subsidiaries shall, in connection with any Equity Issue, make full and proper disclosure in accordance with all applicable laws and/or requirements of any regulatory authority; and (B) Toreador shall not incur any expenditure in connection with the Black Sea Seismic Project without the Arranger's prior written consent. (iii) The obligations of Toreador to make payments under and in connection with this letter are absolute, irrevocable and unconditional and shall not be affected by: (A) the existence of any dispute, claim, counter-claim, set-off, defence or other right which Toreador may have at any time against any Finance Party or MOC, whether in connection herewith or otherwise; (B) the bankruptcy, insolvency, reorganisation, winding up, dissolution or liquidation, or any change in the status, function, control or ownership of any Obligor or Toreador or the occurrence of any other proceeding as a result of such bankruptcy; (C) any sale, transfer or other disposition by Toreador of any direct or indirect interest it may have in any Obligor; and (D) any of the obligations of Toreador under or in connection with this letter being or becoming illegal, invalid or unenforceable in any respect. 17. (a) The Borrowers shall ensure that the last day of an Interest Period for one or more Loans coincides with repayments or prepayments to be made under this letter, and shall select Interest Periods accordingly and for this purpose (but not otherwise) the Borrower may select an Interest Period of less than one month; and 10 (b) Notwithstanding any provision of this Waiver Letter and without prejudice to the obligations of any Obligor to repay or prepay any amount in accordance with the Credit Agreement or this letter, the Borrowers may not prepay or repay any Loan without the prior written consent of the Agent (acting on the instructions of the Banks) if, as a result of such prepayment or repayment the aggregate amount of all Loans outstanding at that time would be less than $5,000,000. 18. (a) For the avoidance of doubt, MEF acknowledges and agrees that the Facility Agent's costs and expenses incurred in connection with this letter and the agreements referred to in paragraph 15 above fall within Clause 23.1 (Initial and special costs), and as such, MEF shall immediately on demand pay those costs and expenses. (b) The Facility Agent confirms that the payment of the legal fees of Allen & Overy (the Facility Agent's legal adviser) incurred in relation to this letter or in connection with the arrangements contemplated by it shall constitute a Permitted Payment. (c) The Obligors shall pay the Permitted Payment referred to in paragraph (b) above as soon as possible after execution of this letter from Gross Revenues to the extent any such amount is available after the payment of any other Permitted Payments have been paid (other than any referred to in paragraph (c)(i) of the definition of Permitted Payment in Clause 1.1 (Definitions)). (d) Any breach of Clause 16.2(b) (Preparation and approval of Forecasts) constituted by failure of the Technical Agent to notify the Borrower's Agent, not later than 28 days before the Redetermination Date determined in accordance with paragraph 6(a) of the Merger Waiver Letter, of the Assumptions to be used in the preparation of the Forecast is hereby waived. 19. If: (a) any of the provisions of this letter are not complied with; (b) any shares are not issued in accordance with the Warrants issued and delivered under paragraph 16 above; (c) Toreador does not agree the form of warrants or pay the Cash Sum as that term is defined in the Warrant Letter) on or before 17th May 2002; or (d) any representation and warranty in paragraph 17 above is incorrect when made or repeated, then: (A) the consent to the merger of Toreador and MOC detailed in paragraph 2 of the Merger Waiver Letter shall be revoked; (B) the Events of Default detailed in paragraph 2 above shall no longer be waived; and (C) that event shall constitute an Event of Default under Clause 20 (Default), and the Finance Parties may thereafter exercise all of their rights in respect thereof under the Finance Documents. 11 20. This letter, each of the Warrants and the Warrant Letter are a Finance Document (and each are hereby designated as such by the Facility Agent and the Borrowers' Agent). 21. The letter and the waivers set out herein shall only take effect on the date of receipt by the Agent of each of the following documents (in form and substance satisfactory to the Facility Agent): (a) duly executed original of the amended and restated supplemental Fee Letter; (b) duly executed original of the Warrant Letter; and (c) an original of this letter duly executed copy of this letter by all parties hereto. 22. Nothing in this letter shall affect any right of any Finance Party, or any obligation of any Obligor, except as expressly stated above, and each Obligor expressly confirms that all such rights and obligations shall continue in full force and effect except to the extent so stated. 23. This letter does not create any right under the Contracts (Rights of Third Parties) Act 1999 which is enforceable by any person who is not a party to this letter. 24. If a provision of this letter is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect: (a) the legality, validity or enforceability in that jurisdiction or any other provision of this letter; or (b) the legality, validity or enforceability, in other jurisdictions of that or any other provision of this letter. 25. Clauses 1.2 (Construction), 28.1 (Transfers by Obligors) and 32-37 (inclusive) shall apply to this letter as though set out in full in this letter, except that: (a) references in those Clauses to the Credit Agreement are to be construed as references to this letter; (b) each reference to "Obligor" in Clauses 1.2 (Construction), 28.1 (Transfers by Obligors), 35 (Jurisdiction) and 37 (Waiver of Jury Trial) shall be deemed to include Toreador; and (c) the reference to "the Guarantor" in Clause 35.2(f) (Service of Process) shall be deemed to include Toreador. Please countersign this letter (or a copy of it) where marked below to confirm your agreement to its terms. Yours faithfully, /s/ STEVEN FUNNELL - -------------------------------- ON BEHALF OF BARCLAYS BANK PLC AS FACILITY AGENT 12 We agree with the above. BORROWERS' AGENT /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: 4/4/02 BORROWERS /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON OIL COMPANY EUROPE Date: 4/4/02 /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON OIL FRANCE S.A. Date: 4/4/02 /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: 4/4/02 GUARANTORS /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON OIL COMPANY Date: 4/4/02 /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON PETROLEUM INC Date: 4/4/02 13 /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON OIL COMPANY EUROPE Date: 4/4/02 /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON OIL FRANCE S.A. Date: 4/4/02 /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: 4/4/02 /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON (TURKEY) INC Date: 4/4/02 /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF MADISON OIL TURKEY INC Date: 4/4/02 TOREADOR /s/ DOUGLAS W. WEIR - ---------------------------------------------- ON BEHALF OF TOREADOR RESOURCES CORPORATION Date: 4/4/02 14 SCHEDULE 1 PART A MINIMUM PAYMENT SCHEDULE

PAYMENT DATE REQUIRED PAYMENT 1. 28th March, 2002 $300,000 2. On the 28th day of each of April, May, $200,000 July and August, 2002 3. On the 28th Day of each of October and $75,000 November, 2002 4. On the 28th day of each of June, An amount calculated as September and December, 2002 follows: TQP - A where: TQP = the total quarterly payment for that month (as set out in Part B of this Schedule); and A = the aggregate of the amounts paid in accordance with 2 and 3 above.

15 PART B TOTAL QUARTERLY PAYMENTS

MONTH TOTAL QUARTERLY PAYMENT June, 2002 $650,000 September, 2002 $600,000 December, 2002 $250,000

16 SCHEDULE 2 AUTHORISED CAPITAL EXPENDITURE

PERIOD PERMITTED FOR PAYMENT ITEM OF From date of 1st April - 1st July - 30th 1st October - EXPENDITURE this letter to 30th June, September, 31st December, 31st March, 2002 2002 2002 2002 Trinidad capital expenditure Nil $ 650,000 Nil Nil Zeynel 15 and Cendere 19 Nil $ 670,000 $ 150,000 $ 20,000 capital expenditure and seismic studies Thrace Basin capital Nil $ 400,000 $ 660,000 $ 500,000 expenditure Boyabat capital expenditure Nil Nil $ 225,000 $ 225,000 French capital expenditure* $ 282,875 $ 602,928 $ 346,667 Nil

* = Courtney 58 new drill, CR17 re-entry, SF119 re-entry, SF47B re-drill, CHUR39 re-entry and CR56 re-entry. 17 SCHEDULE 3 MINIMUM CASHFLOW QUARTER PERIOD

1st Feb - 31st 1st April - 1st July - 30th 1st October - March, 2002 30th June, September, 31st December, 2002 2002 2002 FRENCH CASHFLOW $ 300,000 $ 900,000 $ 900,000 $ 825,000 TURKISH CASHFLOW $ 450,000 $ 450,000 $ 450,000 $ 600,000 AGGREGATE AMOUNTS $ 750,000 $ 1,350,000 $ 1,350,000 $ 1,425,000 TOTAL MINIMUM CASHFLOW AMOUNT $ 4,875,000

18 EX-10.28 8 d04484exv10w28.txt EX-10.28 WAIVER LETTER DATED DECEMBER 31, 2002 EXHIBIT 10.28 [On Barclays' letterhead] To: Madison Energy France S.C.S. (formerly Madison/Chart Energy S.C.S.) ("MEF") (the "BORROWERS' AGENT") To: Madison Oil Company Europe ("MOCE") Madison Oil France S.A. ("MOF") Madison Energy France S.C.S. (the "BORROWERS") To: Madison Oil Company ("MOC") Madison Petroleum Inc. ("MPI") Madison Oil Company Europe Madison Oil France S.A. Madison Energy France S.C.S. Madison (Turkey) Inc ("MADISON TURKEY") Madison Oil Turkey Inc ("MOTI") (the "GUARANTORS") To: Toreador Resources Corporation (the "TOREADOR") [ ] December, 2002 WAIVER AND CONSENT - VARIOUS ISSUES We refer to the Revolving Credit Facility Agreement dated 30th March, 2001 between the Borrowers, the Guarantors, Barclays Capital as Arranger, the Banks (as defined therein) and Barclays Bank PLC as Facility Agent, Technical Agent, Ancillary Bank and US Security Trustee as amended (the "CREDIT AGREEMENT"). We also refer to a waiver and consent letter dated 8th November, 2001 relating to the merger of MOC with Toreador (the "MERGER WAIVER LETTER") and to a waiver and consent letter dated 21 March, 2002 relating to various issues (the "MARCH WAIVER LETTER"). All of the Banks, the Ancillary Bank and the Hedging Bank, have authorised the Facility Agent to enter into this letter on their behalf. 1. INTERPRETATION In this letter, unless otherwise defined or the context otherwise requires: (a) terms defined or used in the Credit Agreement have the same meaning in this letter; (b) references to specific numbered clauses are clauses of the Credit Agreement; (c) references to paragraphs are, unless stated otherwise, references to paragraphs of this letter; (d) "EQUITY ISSUE PROCEEDS" means the proceeds (whether in cash or in kind) of any equity or capital issue (to include, without limitation, share placement, the issue of 2 preferred stock or subordinated loan stock or any other similar instrument) (the "EQUITY ISSUE"); (e) "FRENCH PERMITTED PAYMENTS" means: (i) the costs referred to in paragraphs (a)(i) and (b) of the definition of "Permitted Payment" in the Credit Agreement; and (ii) any general and administrative expenditure relating to any Borrowing Base Interest, Borrowing Base Petroleum or Borrowing Base Asset; (f) "MERGER AGREEMENT" means the merger agreement dated as of 3rd October, 2001 between MOC, Toreador and MOC Acquisition Corporation (a wholly-owned subsidiary of Toreador) pursuant to which, subject to the satisfaction of certain conditions, MOC and MOC Acquisition Corporation will merge and MOC shall be the surviving corporation; (g) "STRATEGIC PLAN" means the strategic plan submitted to the Facility Agent by Toreador on 12th December, 2002; (h) "SUBORDINATION AGREEMENT" means the Subordination Agreement dated 30th March, 2001 between members of the Madison Group as debtors, the Facility Agent and MOF, MOC, MOCE and MPI. (i) "SUBORDINATION AND SUPPORT AGREEMENT" means the subordination and support agreement between Toreador, MOC and the Facility Agent dated November, 2001 entered into in connection with the Merger Waiver Letter; (j) "SURPLUS SALES PROCEEDS" means, in relation to any US asset of the Toreador Group, the net sale proceeds paid to or to the order of any member of the Toreador Group from the sale of that asset after deduction of any amounts thereof required by the Bank of Texas to be paid to them in repayment of outstanding loans to Toreador; (k) "TOREADOR GROUP" means, at any time Toreador and all of its Subsidiaries for the time being; (l) "TOREADOR GUARANTEE" means a Toreador subordinated guarantee of all of the obligations of the Obligors under the Finance Documents; (m) "TOREADOR SUBORDINATED REVOLVING CREDIT AGREEMENT" means the subordinated revolving credit agreement dated as of 3rd October, 2001 between MOC and Toreador pursuant to which Toreador agrees to advance by way of loan certain monies to MOC; (n) "TOREADOR SUBORDINATED REVOLVING CREDIT NOTE" means the subordinated revolving credit note dated as of 3rd October, 2001 between MOC and Toreador; (o) "TRINIDADIAN PERMITTED PAYMENTS" means (i) the costs referred to in paragraph (a)(i) of the definition of "Permitted Payment" in the Credit Agreement except that reference to Borrower Borrowing Asset, Borrowing Base Petroleum or Borrowing Base Interest in 3 that definition shall be construed as a reference to Trinidadian Interest, Trinidadian Petroleum and Trinidadian Asset); (ii) any taxes that are attributable to the Trinidadian Asset and are payable by Trans Dominion Holdings Limited or any other member of the Toreador Group; and (iii) any general and administrative expenditure relating to any Trinidadian Interest, Trinidadian Petroleum and Trinidadian Asset; (p) "TURKISH CAPITAL REPATRIATION" means any amounts paid to Toreador or any Obligor in relation to the repatriation of the registered capital of any member of the Toreador Group in Turkey; (q) "TURKISH PERMITTED PAYMENTS" means: (i) the costs referred to in paragraph (a)(i) of the definition of "Permitted Payment" in the Credit Agreement except that reference to Borrower Borrowing Asset, Borrowing Base Petroleum or Borrowing Base Interest in that definition shall be construed as a reference to Turkish Interest, Turkish Petroleum and Turkish Asset); (ii) any taxes payable by MOTI and Madison Turkey; and (iii) any general and administrative expenditure relating to any Turkish Interest, Turkish Petroleum and Turkish Asset; (r) "TURKISH/TRINIDADIAN ASSET" means: (i) (A) the Cendere oil field in Turkey; (B) the Zeynel oil field in Turkey; (C) the Boyabet oil field in Turkey; and (D) the Thrace Basin in Turkey, (each a "TURKISH ASSET"); and (ii) the Bonasse oil field in Trinidad and Tobago and the related Southwest Cedros Peninsular Exploration Licence (the "TRINIDADIAN ASSET"); (s) "TURKISH/TRINIDADIAN INTEREST" means: (i) all of the Obligors' present and future interest in a Turkish Asset and all agreements, facilities or insurances relative to that Turkish Asset or to Turkish Petroleum (the "TURKISH INTEREST"); and (ii) all of the Obligors' present and future interest in a Trinidadian Asset and all agreements, facilities or insurances relative to that Trinidadian Asset or to Trinidadian Petroleum (the "TRINIDADIAN INTEREST"); (t) "TURKISH/TRINIDADIAN PETROLEUM" means: 4 (i) in respect of a Turkish Asset, all petroleum won and saved from that Turkish Asset that accrues to the Turkish Interest in that Turkish Asset (including, without limitation, any such petroleum that is royalty petroleum) ("TURKISH PETROLEUM"); and (ii) in respect of a Trinidadian Asset, all petroleum won and saved from that Trinidadian Asset that accrues to the Trinidadian Interest in that Trinidadian Asset (including, without limitation, any such petroleum that is royalty petroleum) ("TRINIDADIAN PETROLEUM"); (u) "VOTING AGREEMENT" means the voting agreement dated as of 3rd October, 2001 between Toreador, Herbert L. Brewer, David M. Brewer and PHD Partners, LP; (v) "WARRANT" means the warrants to be issued pursuant to the Warrant Letter; and (w) "WARRANT LETTER" means the warrant letter dated 21st March, 2002 between Toreador and the Arranger, as amended. 2. WAIVERS AND CONSENTS 2.1 WAIVER OF BREACHES OF FINANCE DOCUMENTS Subject to the terms and conditions of this letter, Barclays Bank PLC, as Facility Agent confirms that the Banks have agreed to waive the following breaches of the Finance Documents: (a) all currently outstanding breaches of Clause 6.1 (Repayment), as amended by the March Waiver Letter; (b) all currently outstanding breaches of Clause 16 (Forecasts), as amended by the March Waiver Letter; (c) all currently outstanding breaches of Clause 19.4 (Notification of Default); (d) all currently outstanding breaches of Clause 19.5 (Compliance Certificates); and (e) failure by Toreador to issue and deliver Warrants to Barclays Nominees (Branches) Limited in accordance with the Warrant Letter. 2.2 MERGER WAIVER AND CONSENT Barclays Bank PLC, as Facility Agent, consents to the merger of Toreador and MOC and confirms that the Banks have agreed to waive the following Events of Default: (a) under Clauses 19.12(a) (Mergers and acquisitions) and 20.3 (Breach of other obligations) and Clause 20.20(d) (Change of control) constituted by MOC entering into and performing the Merger Agreement and the Voting Agreement and by the occurrence of the Effective Time (as that term is defined in the Merger Agreement); (b) under Clauses 19.13 (Other Financial Indebtedness) and 20.3 (Breach of other obligations) constituted by MOC incurring any of the indebtedness referred to in paragraph 8 (Characterisation of Toreador Payments) below; 5 (c) under Clauses 19.14 (Loans) and 20.3 (Breach of other obligations) constituted by MOC making loans to the Borrower referred to in paragraph 8 (Characterisation of Toreador Payments) below; and (d) under Clauses 19.13 (Other Financial Indebtedness) and 20.3 (Breach of other obligations) constituted by the Borrowers being deemed to have borrowed from MOC as referred to in paragraph 8 (Characterisation of Toreador Payments) below. 3. CONSOLIDATION OF WAIVER LETTERS Subject to the terms and conditions of this letter, Barclays Bank PLC, as Facility Agent, confirms that the Banks have agreed to permanently waive any and all Events of Default that have arisen under the Merger Waiver Letter and the March Waiver Letter and all the parties to this letter agree that the Merger Waiver Letter and the March Waiver Letter shall be terminated and of no further effect (save in relation to the waivers granted under those letters). 4. REPAYMENT 4.1 REPAYMENT Clause 6.1 (Repayment) shall be suspended in accordance with paragraph 4.2 (Term of Suspension) below and, during the term of suspension, shall be replaced with the following provisions: (a) the Borrowers shall on the last Business Day of each month commencing on 31st December, 2002 repay an amount of the Loans equal to the greater of: (i) $300,000 (in the case of 31st December, 2002), $150,000 (in the case of 31st January, 2003), $400,000 (in the case of any other month); and (ii) the aggregate of French Revenue, Turkish Revenue and Trinidadian Revenue received during that month less French Permitted Payments, Turkish Permitted Payments and Trinidadian Permitted Payments (as such terms are defined in paragraph 7.5 (Turkish and Trinidadian Revenue)) . (b) Toreador agrees to pay to the Facility Agent on the last day of each month an amount sufficient to ensure that the Borrowers have sufficient funds to comply with their repayment obligations under sub paragraph (a) above. (c) Toreador and each Obligor agrees to use best endeavours to procure that further amounts are applied in repayment of the Loans so as to ensure that the Loans are repaid by a minimum of $400,000 on the last Business Day of January, 2003, $500,000 on the last Business Day of February, 2003 and March, 2003 and $400,000 on the last Business Day of any other month (the "TARGET REPAYMENT"). (d) Toreador and each Obligor agrees to use best endeavours to procure that, in addition to the repayments referred to in sub paragraphs (a) and (c) above, the Loans are repaid as soon as reasonably practicable by a further amount equal to $300,000 (in relation to the November, 2002 and December, 2002 repayments) plus any subsequent shortfalls in the Target Repayment in any months. 4.2 TERM OF SUSPENSION 6 Clause 6.1 (Repayment) shall be suspended until such time as (i) the then applicable Forecast prepared after the date of this letter in accordance with Clause 16 (Forecasts) of the Credit Agreement and paragraph 5 (Forecasts) of this letter indicates a Relevant NPV to Total Indebtedness of not less than 1.5:1; and (ii) the outstanding Loans do not exceed the Total Commitments. 4.3 TURKISH CAPITAL REPATRIATION PREPAYMENT If, during the suspension of Clause 6.1 (Repayment) in accordance with paragraph 4.2 (Term of Suspension) above, any Obligor receives any Turkish Capital Repatriation, the Borrowers shall apply an amount equal to that Turkish Capital Repatriation (less any amount thereof that is reinvested in Turkey solely for the purposes of maximising future Turkish Capital Repatriations as detailed in the Strategic Plan) in prepayment of the Loans (and Clause 7.7(b) (Miscellaneous provisions) shall apply to any such prepayment). 4.4 ASSET SALE PROCEEDS PREPAYMENT If, during the suspension of Clause 6.1 of the Credit Agreement in accordance with paragraph 4.2 (Term of Suspension) above, any member of the Toreador Group sells any of its US assets, Toreador agrees to pay to the Facility Agent an amount equal to the Surplus Sale Proceeds and such payment shall be deemed to be a prepayment of Loans by the Borrowers in an aggregate principal amount equal to the Surplus Sale Proceeds (and Clause 7.7(b) (Miscellaneous provisions) shall apply to any such prepayment). 4.5 TRINIDADIAN ASSET SALES PREPAYMENT (a) Subject to sub paragraph (b) below, if any member of the Toreador Group sells or transfer any of its interest in the Trinidadian Assets (either directly or indirectly, including by way of share sale), Toreador agrees to pay to the Facility Agent an amount equal to the net sale proceeds of such sale and such payment shall be deemed to be a prepayment of Loans by the Borrowers in an aggregate principal amount equal to the net sale proceeds (and Clause 7.7(b) (Miscellaneous provisions) shall apply to any such prepayment). (b) No member of the Toreador Group will sell or transfer (either directly or indirectly, including by way of share sale or intra group transfer) any of its interest in the Trinidadian Assets without the prior written consent of the Facility Agent. 4.6 MISCELLANEOUS (a) The following amendments to the Credit Agreement effected by paragraph 4 of the Merger Waiver Letter and paragraph 13 of the March Waiver Letter remain effective and are restated as follows: (i) if the Borrowers repay or prepay any outstanding Loan, then the Total Commitments shall, immediately upon that repayment or prepayment being made, automatically be reduced by an amount equal to the principal so repaid or prepaid; (ii) Clause 6.2 shall be amended so the words "Tranche A" is inserted before "Tranche B" and the words ", but any amount repaid under Tranche A may 7 subsequently be re-borrowed on and subject to the provisions of the Agreement" are deleted; and (iii) Clause 7.7(c) shall be amended so that the words "Any amount prepaid under Tranche A may subsequently be re-borrowed on and subject to the terms of this Agreement but" are deleted and the words "Tranche A," are inserted before "Tranche B"; (b) The Borrowers shall ensure that the last day of an Interest Period for one or more Loans coincides with the date repayments or prepayments are to be made under this letter, and shall select Interest Periods accordingly and for this purpose (but not otherwise) the Borrowers may select an Interest Period of less than one month. (c) Amounts prepaid in accordance with paragraphs 4.3 (Turkish Capital Repatriation Prepayment) to 4.5 (Trinidadian Asset Sales Prepayment) shall not be applied against or reduce the repayment obligations under paragraph 4.1 (Repayment). 5. FORECASTS The calculation of the Relevant NPV on each Calculation Date in accordance with Clause 16.1(d)(i) (General) shall be suspended for the duration of the suspension of Clause 6.1 (Repayment) in accordance with paragraph 4 (Repayment) above. 6. INFORMATION COVENANTS 6.1 STRATEGIC PLAN (a) Toreador shall by no later than 31st January, 2003 provide to the Facility Agent an update of the Strategic Plan incorporating the following information in reasonable detail: (i) details of the progress achieved in relation to each of the four options outlined in the Strategic Plan; (ii) Toreador's assessment of the likelihood of each option referred to above coming to fruition by 31st March, 2003; and (iii) details of any other option being pursued by Toreador with a view to restoring a Relevant NPV to Total Indebtedness of not less than 1.5:1 by 31st March, 2003. (b) Toreador shall immediately notify the Facility Agent if it becomes aware that any of the four options outlined in the Strategic Plan is no longer being pursued by Toreador or the proposed counterparty or, as a result of any other event or circumstance, is unlikely to come to fruition by 31st March, 2003, providing reasonable detail of the particular event or circumstances and (without prejudice to sub paragraph (a) above), within seven days of such notification, an updated Strategic Plan. 6.2 CASHFLOW FORECASTS (a) On or before 31st December, 2002, Toreador shall provide to the Facility Agent a detailed cashflow forecast for all of the Toreador Group's operations for 2003 and shall notify the Facility Agent of any events or circumstances that are likely to cause 8 a deviation from the forecast cashflow to the extent that it is likely to prevent the Borrowers complying with the repayment schedule in paragraph 4.1 (Repayment) or cause liquidity problems in the Toreador Group, providing details of the particular events or circumstances and a revised forecast. (b) Toreador shall provide to the Facility Agent, on a weekly basis, a certificate signed by the Chief Financial Officer of Toreador certifying that that the Toreador Group has sufficient working capital to continue trading and that the Toreador Group's cashflow situation is manageable. 6.3 OTHER INFORMATION Toreador shall promptly notify the Facility Agent: (a) of the receipt by any member of the Toreador Group of any Turkish Capital Repatriation (and the amount thereof that is to be reinvested in Turkey solely for the purposes of maximising future Turkish Capital Repatriations) or Surplus Sale Proceeds; and (b) if any creditor of any member of the Toreador Group takes any enforcement action, or notifies any member of the Toreador Group of its intention to take enforcement action, in relation to any amounts owing to it. 7. COVENANTS 7.1 CAPITAL EXPENDITURE RESTRICTIONS (a) The Obligors shall procure that no Obligor shall make, nor incur any obligation or liability for or in respect of any capital expenditure outside of the United States except for (i) capital expenditure that a prudent operator would expend to maintain (rather than develop) the relevant assets; or (ii) capital expenditure that is funded from free cash that is available to the Toreador Group after making all of the repayments to the Finance Parties contemplated under paragraph 4 (Repayment) of this letter and all other payments required to be made to Bank of Texas. (b) Toreador shall by no later than 10th January, 2003 provide to the Facility Agent a capital expenditure budget for the first half of 2003 for all of the Toreador Group's operations that is in form and substance satisfactory to the Facility Agent. (c) Toreador shall within ten days of the end of each month provide to the Facility Agent a cashflow reconciliation for that month for all of the members of the Toreador Group (in the form of the Schedule to this letter), reconciling the sources of funds and uses of funds and including details of that month's capital expenditures. (e) Paragraph (i) of Clause 19.22 (Capital expenditure), shall not apply. 7.2 TURKISH CAPITAL REPATRIATION Toreador and the Obligors shall use best endeavours to maximise Turkish Capital Repatriation proceeds within as short a time frame as is reasonably practicable. 7.3 TOREADOR EQUITY ISSUES 9 (a) Toreador shall use best endeavours to maximise Equity Issue Proceeds in the period to 31st March, 2003 and shall consult with the Facility Agent regarding the proportion of those proceeds that are to be applied in prepayment of the Loans. (b) Toreador undertakes to and shall procure that its subsidiaries shall, in connection with any Equity Issue, make full and proper disclosure in accordance with all applicable laws and/or requirements of any regulatory authority 7.4 TOREADOR GUARANTEE Toreador shall, by 17th January, 2003, enter into the Toreador Guarantee in form and substance satisfactory to the Facility Agent and procure that by the same date a legal opinion relating thereto is delivered to the Facility Agent from a reputable law firm in form and substance satisfactory to the Facility Agent. 7.5 TURKISH AND TRINIDADIAN CASHFLOW (a) Without prejudice to the Obligors obligations under the Credit Agreement, MOTI, Madison Turkey, MOC and MCE shall pay, and Toreador shall procure that MOTI, Madison Turkey, MOC and MCE pay: (i) the gross proceeds (without any deductions whatsoever) of any disposal of Turkish/Trinidadian Petroleum and Borrowing Base Petroleum; (ii) any sales tax payable on the amount referred to in paragraph (i) above; and (iii) any other amount payable to MOTI, Madison Turkey, MOC and MCE in respect of any Turkish/Trinidadian Petroleum or any Borrowing Base Petroleum, Turkish/Trinidadian Interest or Borrowing Base Interest or Turkish/Trinidadian Asset or Borrowing Base Asset except to the extent it is payable under insurances in respect of liabilities to third parties, seepage, pollution or the cost of control of wells, (the amounts being attributable to Borrowing Base Petroleum, Borrowing Base Interest or Borrowing Base Asset being "FRENCH REVENUE", Turkish Petroleum, Turkish Interest and Turkish Asset being "TURKISH REVENUE" and the amounts being attributable to Trinidadian Petroleum, Trinidadian Interest and Trinidadian Asset being "TRINIDADIAN REVENUE"), LESS (A) in the case of Trinidadian Revenue, Trinidadian Permitted Payments for that month ("NET TRINIDADIAN REVENUE"); and (B) in the case of Turkish Revenue, Turkish Permitted Payments for that month ("NET TURKISH REVENUE"), directly to the Dollar Revenue Account, unless any such amount is received in another currency, in which case (where applicable) MOTI, Madison Turkey, MCE and MOC shall, and Toreador shall procure that MOTI, Madison Turkey, MCE or MOC shall, immediately upon receipt convert that amount to Dollars and pay them directly to the Dollar Revenue Account. 10 (b) Without limiting the Facility Agent's rights under Clause 19.3(d) (Borrowing Base Asset and similar information), the Borrower's Agent shall supply to the Facility Agent (in sufficient copies for all of the Banks unless the Facility Agent agrees otherwise): (i) the information described in Clause 19.3(a)(i), (ii) and (iii) (Borrowing Base Asset and similar information), provided that the wording of that Clause shall be deemed amended for these purposes such that each reference to "Borrowing Base Asset" shall be deemed to be a reference to Turkish/Trinidadian Asset; and (ii) any other information relating to a Turkish/Trinidadian Asset that could change the expected capital expenditures detailed in Schedule 2 to this letter or impose any additional material liability on the Obligors; and. (c) promptly deliver to the Facility Agent such information and evidence as it may from time to time require in order to check and verify the amount of any Turkish Revenue, Trinidadian Revenue, Trinidadian Permitted Payment or Turkish Permitted Payment. 7.6 TRANS DOMINION HOLDINGS LIMITED (a) Toreador and the Obligors agree to procure that, by 31st January, 2003, all of the Toreador Group's shares in Trinidad Exploration and Development Limited and Trans Dominion Holdings Limited are pledged to the Facility Agent on behalf of the Finance Parties by way of a security agreement in form and substance satisfactory to the Facility Agent and that by the same date legal opinions relating thereto are delivered to the Facility Agent from reputable law firms in all relevant jurisdictions in each case in form and substance satisfactory to the Facility Agent. (b) Toreador and the Obligors agree to procure that Trans Dominion Holdings Limited: (i) promptly notifies the Facility Agent when Trans Dominion Holdings Limited enters into any agreement relating to the Trinidadian Asset, the Trinidadian Interest or any Trinidadian Petroleum ("RELEVANT AGREEMENT"); (ii) after notice by the Facility Agent to the Borrower's Agent that the Facility Agent requires security to be granted to it for the benefit of the Finance Parties, enters into an agreement granting a Security Interest over that Relevant Agreement above in form and substance satisfactory to the Facility Agent ("SECURITY Document"); and (iii) delivers a legal opinion from a reputable law firm in respect of all relevant jurisdictions in a form and substance satisfactory to the Facility Agent in relation to each of the Security Documents, and each Obligor shall do all things reasonably required by the Facility Agent for the granting, perfecting or protecting of any security intended to be granted under a Security Document. 7.7 THE MERGER AGREEMENT (a) MOC undertakes not to agree to any waiver, amendment, termination or cancellation of, or of any term of, the Merger Agreement or the Voting Agreement. 11 (b) Toreador agrees to waive any default, event of default or breach of representation or warranty under the Merger Agreement, the Voting Agreement, the Toreador Subordinated Revolving Credit Agreement and the Toreador Subordinated Revolving Credit Note constituted by MOC issuing shares to Barclays Nominees (Branches) Limited, and the Obligors undertaking to deliver shares, in accordance with paragraph 3(a)(ii) of the Merger Waiver Letter. 7.8 TURKEY Toreador and MOCE undertake to procure that, by no later than forty five days after Madison Turkey has received all Turkish Capital Repatriations that it is entitled to: (a) Madison Turkey shall have transferred all of its assets, liabilities, business and undertakings to MOTI and shall be wound up and dissolved; and (b) that MOTI shall have discharged in full all of the consideration for that transfer. 8. CHARACTERISATION OF TOREADOR PAYMENTS (a) Toreador agrees that any payment made or deemed made to MOC by Toreador pursuant to this letter, the March Waiver Letter or the Merger Waiver letter shall be "Junior Debt" for the purposes of the Subordination and Support Agreement. MOC agrees that any payment made or deemed made by MOC to any of the Borrowers pursuant to this letter, the March Waiver Letter or the Merger Waiver Letter shall be "Junior Debt" for the purposes of the Subordination Agreement. (b) An amount equal to each payment made by Toreador to the Facility Agent in accordance with this letter and for the avoidance of doubt, any amounts previously paid by Toreador under paragraph 7(b) of the Merger Waiver Letter or 12(b) of the March Waiver Letter shall be deemed to be (i) a non-interest bearing loan made by Toreador to MOC repayable (subject to the Subordination and Support Agreement on demand (or a loan on such other terms as are agreed by MOC and Toreador (in any case subject to the Subordination and Support Agreement)); and (ii) a non-interest bearing loan made by MOC to the Borrowers repayable (subject to the Subordination Agreement on demand (or a loan on such other terms as are agreed by MOC and the Borrowers (in any case subject to the Subordination Agreement)). (c) The obligations of Toreador to make payments under and in connection with this letter are absolute, irrevocable and unconditional and shall not be affected by: (i) the existence of any dispute, claim, counter-claim, set-off, defence or other right which Toreador may have at any time against any Finance Party or MOC, whether in connection herewith or otherwise; (ii) the bankruptcy, insolvency, reorganisation, winding up, dissolution or liquidation, or any change in the status, function, control or ownership of any 12 Obligor or Toreador or the occurrence of any other proceeding as a result of such bankruptcy; (iii) any sale, transfer or other disposition by Toreador of any direct or indirect interest it may have in any Obligor; and (iv) any of the obligations of Toreador under or in connection with this letter being or becoming illegal, invalid or unenforceable in any respect. 9. AMENDMENT TO THE CREDIT AGREEMENT The amendments to the Credit Agreement effected by paragraph 4 of the Merger Waiver Letter and paragraph 13 of the March Waiver Letter remain effective and are restated as follows: (a) paragraph (d) in the definition of "Permitted Payment" in Clause 1.1 (Definitions) shall be deleted and shall be replaced with: "(d) [Not used];"; (b) Clause 19.25(a)(iii) (Turkish business) shall be deleted and shall be replaced with: "(iii) in any event, does not make any payment to any other member of the Toreador Group except for payment of the kind contemplated by paragraph (ii)(B) above;"; (c) for the purposes of 20.3 (Breach of other obligations), 20.4 (Misrepresentation), 20.12 (Unlawfulness), 20.13 (Effectiveness of Security), 20.22 (U.S. Bankruptcy Laws) and 20.23 (ERISA) the word "Obligor" shall be deemed to include Toreador; (d) for the purposes of Clauses 20.5 (Cross-default), 20.6 (Insolvency), 20.7 (Insolvency proceedings), 20.8 (Appointment of receivers and managers), 20.9 (Creditor's processes), 20.10 (Analogous proceedings), 20.11 (Cessation of business) and 20.17 (Litigation) the phrase "member of the Group" shall be deemed to include Toreador; (e) Clause 20.20(d) (Change of Control) shall be deleted and shall be replaced with: "(d) MOC is not, or ceases to be, a wholly-owned subsidiary of Toreador Resources Corporation; or"; and (f) a new Clause 20.20(e) (Change of Control) of the Credit Agreement shall be inserted as follows: "(e) any single person, or group of persons acting in consort (as defined in the City Code on Takeovers and Mergers) acquires control (as defined in Section 416 of the Income and Corporation Taxes Act 1998) of Toreador Resources Corporation.". 10. CONFIRMATIONS 10.1 GUARANTEES 13 Each Guarantor agrees, and represents and warrants to each Finance Party as at the date it executes this letter: (a) that the arrangements contemplated by this letter, the Merger Agreement and the Voting Agreement and the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement) do not in any way affect the guarantee and undertakings given by it under Clause 15 (Guarantee); and (b) that the guarantee given by it under Clause 15 (Guarantee) is a continuing guarantee, in full force and effect, and will extend to the ultimate balance of all sums payable by the Obligors under the Finance Documents, regardless of the arrangements contemplated by this letter, the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement) and any intermediate payments or discharge in whole or in part (including, without limitation, the prepayments contemplated by this letter). 10.2 MOC MOC agrees, and represents and warrants to each Finance Party as at the date it executes this letter: (a) that the arrangements contemplated by this letter and the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement) do not in any way affect any of the Finance Documents; and (b) that its obligations under the Finance Documents are in full force and effect and are binding on, and enforceable against, MOC regardless of the arrangements contemplated by this letter or the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement)). 11. REPRESENTATIONS AND WARRANTIES (a) Toreador and each Obligor makes the following representations and warranties to each Finance Party in respect of those of this letter, the Merger Agreement and the Voting Agreement to which it is a party: (i) that it has the power to enter into and perform this letter, the Merger Agreement and the Voting Agreement and it has taken all necessary action to authorise the entry into, performance and delivery of this letter, the Merger Agreement and the Voting Agreement; and (ii) that this letter, the Merger Agreement and the Voting Agreement constitutes its legal, valid and binding obligation enforceable in accordance with its terms. (b) Toreador represents and warrants as at the date it executes this letter, the Toreador Guarantee and each time it issues a Warrant, that: (i) that it has the power to enter into and perform this letter, the Toreador Guarantee, the Warrants and the Warrant Letter and it has taken all necessary action to authorise the issue, performance and delivery of those Warrants; and 14 (ii) this letter, the Toreador Guarantee, the Warrants and the Warrant Letter will, when issued, constitutes its legal, valid and binding obligation enforceable in accordance with its terms. 12. WARRANTS Toreador and the Arranger confirms and agrees that: (a) the Warrant Letter shall be amended such that the date for delivery and issue of the Warrants under paragraphs 1 and 2 of the Warrant Letter shall be 31st December, 2002 and Toreador shall issue the warrant to Barclays Nominees (Branches) Limited or such other person or persons as the Facility Agent may require; (b) each Warrant shall be in such form as the Facility Agent may require (acting reasonably); (c) as amended by sub paragraph (a) above, the Warrant Letter remains in full force and effect. 13. LEGAL FEES (a) For the avoidance of doubt, MEF acknowledges and agrees that the Facility Agent's costs and expenses incurred in connection with this letter, the Warrant Letter, the Toreador Guarantee and any other arrangement, new agreement or document contemplated by this letter fall within Clause 23.1 (Initial and special costs), and as such, MEF shall immediately on demand pay those costs and expenses. (b) The Facility Agent confirms that the payment of the legal fees of Allen & Overy (the Facility Agent's legal adviser) incurred in relation to this letter, the Warrant Letter, the Toreador Guarantee and any other arrangement, new agreement or document contemplated by this letter shall constitute a Permitted Payment. (c) The Obligors shall pay the Permitted Payment referred to in paragraph (b) above as soon as possible after execution of this letter from Gross Revenues to the extent any such amount is available after the payment of any other Permitted Payments (other than any referred to in paragraph (c)(i) of the definition of Permitted Payment in Clause 1.1 (Definitions)). 14. EVENT OF DEFAULT If: (a) any of the provisions of this letter are not complied with; (b) any shares are not issued in accordance with the Warrants issued and delivered in accordance with the Warrant Letter; (c) Toreador does not issue and deliver any of the Warrants on or before 20th December, 2002; (d) the Merger Agreement or the Toreador Subordinated Revolving Credit Agreement is terminated; 15 (e) the Voting Agreement is breached; (f) the Facility Agent is not satisfied with the substance of any update or notification provided to it under paragraph 6.1 (Strategic Plan); (g) Clause 6.1 of the Credit Agreement is not reinstated by 31st March, 2003 in accordance with paragraph 4.2 (Term of Suspension); (h) any representation and warranty in this letter is incorrect when made or repeated; or (i) there is any breach of the repayment schedule in paragraph 4 (Repayment) of this letter, then that event shall constitute an Event of Default under Clause 20 (Default) and the Finance Parties may thereafter exercise all of their rights in respect thereof under the Finance Documents. 15. DESIGNATION OF FINANCE DOCUMENTS This letter, the Toreador Guarantee, the Subordination and Support Agreement, each of the Warrants and the Warrant Letter are a Finance Document (and each is hereby designated as such by the Facility Agent and the Borrowers' Agent). 16. CONDITIONS PRECEDENT (a) The letter and the waivers set out herein shall only take effect on the date on which the Agent has received an original of this letter duly executed by all parties and has received (or waived receipt of): (i) board resolutions of each of the Obligors and Toreador authorising the transactions contemplated by and execution of this letter; and (ii) specimen signatures of the persons authorised to sign this letter and any other documents connected to the Finance Documents on behalf of the Obligors, (all in form and substance satisfactory to the Facility Agent) (such date being the "EFFECTIVE DATE"). (b) Toreador and each Obligor represents and warrants as at the Effective Date that there is no Default outstanding. 17. OTHER PROVISIONS (a) Nothing in this letter shall affect any right of any Finance Party, or any obligation of any Obligor, except as expressly stated above, and each Obligor expressly confirms that all such rights and obligations shall continue in full force and effect except to the extent so stated. (b) This letter does not create any right under the Contracts (Rights of Third Parties) Act 1999 which is enforceable by any person who is not a party to this letter. 16 (c) Toreador acknowledges and agrees to the provisions of Clause 28 (Changes to the Parties) and irrevocably authorises the Facility Agent to execute any duly completed Novation Certificate on its behalf. (d) If a provision of this letter is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect: (i) the legality, validity or enforceability in that jurisdiction of any other provision of this letter; or (ii) the legality, validity or enforceability, in other jurisdictions of that or any other provision of this letter. (e) Clauses 1.2 (Construction), 28.1 (Transfers by Obligors) and 32-37 (inclusive) shall apply to this letter as though set out in full in this letter, except that: (i) references in those Clauses to the Credit Agreement are to be construed as references to this letter; (ii) each reference to "Obligor" in Clauses 1.2 (Construction), 28.1 (Transfers by Obligors), 35 (Jurisdiction) and 37 (Waiver of Jury Trial) shall be deemed to include Toreador; and (iii) the reference to "the Guarantor" in Clause 35.2(f) (Service of Process) shall be deemed to include Toreador. Please countersign this letter (or a copy of it) where marked below to confirm your agreement to its terms. Yours faithfully, /s/ Ashley Jay - ------------------------------ ON BEHALF OF BARCLAYS BANK PLC AS FACILITY AGENT We agree with the above. BORROWERS' AGENT /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: 12/31/02 17 BORROWERS /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF MADISON OIL COMPANY EUROPE Date: 12/31/02 /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF MADISON OIL FRANCE S.A. Date: 12/31/02 /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: 12/31/02 GUARANTORS /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF MADISON OIL COMPANY Date: 12/31/02 /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF MADISON PETROLEUM INC Date: 12/31/02 /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF MADISON OIL COMPANY EUROPE Date: 12/31/02 /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF MADISON OIL FRANCE S.A. Date: 12/31/02 18 /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: 12/31/02 /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF MADISON (TURKEY) INC Date: 12/31/02 /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF MADISON OIL TURKEY INC Date: 12/31/02 TOREADOR /s/ Douglas W. Weir - ----------------------------------- ON BEHALF OF TOREADOR RESOURCES CORPORATION Date: 12/31/02 19 SCHEDULE 1 - FORM OF CASHFLOW RECONCILIATION SOURCES OF FUNDS DESCRIPTION French Operations Turkish Operations Trinidadian Operations US (Toreador) Operations Other ================= Total USES OF FUNDS FRENCH OPEX CAPEX G&A Madison Loan Other ======================================= TOTAL FRANCE TURKISH OPEX CAPEX G&A Madison Loan Other ======================================= TOTAL TURKEY TRINIDADIAN OPEX CAPEX G&A Madison Loan Other ======================================= TOTAL TRINIDAD US OPEX CAPEX G&A Madison Loan Other ======================================= Total US (Toreador) ============================= TOTAL USES OF FUNDS EX-10.29 9 d04484exv10w29.txt EX-10.27 WAIVER LETTER DATED MARCH 25, 2002 EXHIBIT 10.29 [On Barclays' letterhead] To: Madison Energy France S.C.S. (formerly Madison/Chart Energy S.C.S.) ("MEF") (the "BORROWERS' AGENT") To: Madison Oil Company Europe ("MOCE") Madison Oil France S.A. ("MOF") Madison Energy France S.C.S. (the "BORROWERS") To: Madison Oil Company ("MOC") Madison Petroleum Inc. ("MPI") Madison Oil Company Europe Madison Oil France S.A. Madison Energy France S.C.S. Madison (Turkey) Inc ("MADISON TURKEY") Madison Oil Turkey Inc ("MOTI") (the "GUARANTORS") To: Toreador Resources Corporation (the "TOREADOR") 25 March, 2003 WAIVER AND CONSENT - VARIOUS ISSUES We refer to the Revolving Credit Facility Agreement dated 30th March, 2001 between the Borrowers, the Guarantors, Barclays Capital as Arranger, the Banks (as defined therein) and Barclays Bank PLC as Facility Agent, Technical Agent, Ancillary Bank and US Security Trustee as amended (the "CREDIT AGREEMENT"). We also refer to a waiver and consent letter dated 8th November, 2001 relating to the merger of MOC with Toreador (the "MERGER WAIVER LETTER"), to a waiver and consent letter dated 21st March, 2002 relating to various issues (the "MARCH WAIVER LETTER") and a waiver and consent letter dated 31st December, 2002 relating to various issues (the "DECEMBER WAIVER LETTER"). All of the Banks, the Ancillary Bank and the Hedging Bank, have authorised the Facility Agent to enter into this letter on their behalf. 1. INTERPRETATION In this letter, unless otherwise defined or the context otherwise requires: (a) terms defined or used in the Credit Agreement have the same meaning in this letter; (b) references to specific numbered clauses are clauses of the Credit Agreement; (c) references to paragraphs are, unless stated otherwise, references to paragraphs of this letter; (d) "ALLEN & OVERY INVOICE" means the invoice for Pound Sterling 44,768.52 delivered by Allen & Overy to Barclays Capital dated 29th January, 2003 in respect of work done in 2 connection with the December Waiver Letter, the First Warrant Letter, the Toreador Guarantee and the related subordination agreement. (e) "BANK OF TEXAS LOAN AGREEMENT" means the loan agreement dated 16th February, 2001 between Toreador Resources Corporation, Toreador Exploration and Production Inc, Toreador Acquisition Corporation, Tormin Inc and the Bank of Texas National Association, as amended from time to time. (f) "EQUITY ISSUE PROCEEDS" means the proceeds (whether in cash or in kind) of any equity or capital issue (to include, without limitation, share placement, the issue of preferred stock or subordinated loan stock or any other similar instrument) (the "EQUITY ISSUE"); (g) "FIRST WARRANT LETTER" means the warrant letter dated 21st March, 2002 between Toreador and the Arranger, as amended. (h) "JANUARY NPV" means $9,882,016, as determined in the forecast dated 30th January, 2003 (i) "MERGER AGREEMENT" means the merger agreement dated as of 3rd October, 2001 between MOC, Toreador and MOC Acquisition Corporation (a wholly-owned subsidiary of Toreador) pursuant to which, subject to the satisfaction of certain conditions, MOC and MOC Acquisition Corporation will merge and MOC shall be the surviving corporation; (j) "MOC GROUP" means MOC and all of its subsidiaries. (k) "SECOND WARRANT LETTER" means the warrant letter dated on or about the date of this letter between Toreador and the Arranger. (l) "STRATEGIC PLAN" means the strategic plan submitted to the Facility Agent by Toreador on 12th December, 2002; (m) "SUBORDINATION AGREEMENT" means the Subordination Agreement dated 30th March, 2001 between members of the Madison Group as debtors, the Facility Agent and MOF, MOC, MOCE and MPI. (n) "SUBORDINATION AND SUPPORT AGREEMENT" means the subordination and support agreement between Toreador, MOC and the Facility Agent dated November, 2001 entered into in connection with the Merger Waiver Letter; (o) "SURPLUS SALE PROCEEDS" means, in relation to any US asset of the Toreador Group, the net sale proceeds paid to or to the order of any member of the Toreador Group from the sale of that asset after deduction of any amounts thereof required by the Bank of Texas to be paid to them in repayment of outstanding loans to Toreador; (p) "TOREADOR GROUP" means, at any time Toreador and all of its Subsidiaries for the time being; (q) "TOREADOR GUARANTEE" means a Toreador subordinated guarantee of all of the obligations of the Obligors under the Finance Documents; 3 (r) "TOREADOR SUBORDINATED REVOLVING CREDIT AGREEMENT" means the subordinated revolving credit agreement dated as of 3rd October, 2001 between MOC and Toreador pursuant to which Toreador agrees to advance by way of loan certain monies to MOC; (s) "TOREADOR SUBORDINATED REVOLVING CREDIT NOTE" means the subordinated revolving credit note dated as of 3rd October, 2001 between MOC and Toreador; (t) "TRINIDADIAN PERMITTED PAYMENTS" means (i) the costs referred to in paragraph (a)(i) and (a)(ii) of the definition of "Permitted Payment" in the Credit Agreement except that reference to Borrower Borrowing Asset, Borrowing Base Petroleum or Borrowing Base Interest in that definition shall be construed as a reference to Trinidadian Interest, Trinidadian Petroleum and Trinidadian Asset); (ii) any taxes that are attributable to the Trinidadian Asset and are payable by Trans Dominion Holdings Limited or any other member of the Toreador Group; and (iii) any: (a) exploration and appraisal expenditure; (b) general and administrative expenditure; or (c) capital expenditure not falling within paragraph (i) above, payable by Trans Dominion Holdings Limited, as applicable, to the extent the Majority Banks expressly agree or require in writing (but not further or otherwise) (iv) any other expenditure that the Majority Banks agree may be a Trinidadian Permitted Payment; (u) "TRINIDADIAN REVENUE" means (i) the gross proceeds (without any deductions whatsoever) of any disposal of Trinidadian Petroleum; (ii) any sales tax payable on the amount referred to in paragraph (i) above; (iii) any other amount payable to Trans Dominion Holdings Limited and MOC in respect of any Trinidadian Petroleum, Trinidadian Interest or Trinidadian Asset. (v) "TRINIDADIAN REVENUE ACCOUNTS" means the revenue accounts to be opened with the Account Bank in London and maintained by Trans Dominion Holdings Limited which shall be maintained in accordance with the directions of the Facility Agent; (w) "TURKISH CAPITAL REPATRIATION" means any amounts paid to Toreador or any Obligor in relation to the repatriation of the registered capital of any member of the Toreador Group in Turkey; 4 (x) "TURKISH PERMITTED PAYMENTS" means: (i) the costs referred to in paragraphs (a)(i) and (a)(ii) of the definition of "Permitted Payment" in the Credit Agreement except that reference to Borrower Borrowing Asset, Borrowing Base Petroleum or Borrowing Base Interest in that definition shall be construed as a reference to Turkish Interest, Turkish Petroleum and Turkish Asset); (ii) any taxes payable by MOTI and Madison Turkey; and (iii) any: (a) exploration and appraisal expenditure; (b) general and administrative expenditure; or (c) capital expenditure not falling within paragraph (i) above, payable by MOTI and Madison Turkey, as applicable, to the extent the Majority Banks expressly agree or require in writing (but not further or otherwise) (iv) any other expenditure that the Majority Banks agree may be a Turkish Permitted Payment; (y) "TURKISH REVENUE" means: (i) the gross proceeds (without any deductions whatsoever) of any disposal of Turkish Petroleum; (ii) any sales tax payable on the amount referred to in paragraph (i) above; (iii) any other amount payable to MOTI, Madison Turkey and MOC in respect of any Turkish Petroleum, Turkish Interest or Turkish Asset. (z) "TURKISH REVENUE ACCOUNTS" means the revenue accounts to be opened with the Account Bank in London which shall be maintained in accordance with the directions of the Facility Agent; (aa) "TURKISH/TRINIDADIAN ASSET" means: (i) (A) the Cendere oil field in Turkey; (B) the Zeynel oil field in Turkey; (C) the Boyabet oil field in Turkey; and (D) the Thrace Basin in Turkey, (each a "TURKISH ASSET"); and 5 (ii) the Bonasse oil field in Trinidad and Tobago and the related Southwest Cedros Peninsular Exploration Licence (the "TRINIDADIAN ASSET"); (bb) "TURKISH/TRINIDADIAN INTEREST" means: (i) all of the Obligors' present and future interest in a Turkish Asset and all agreements, facilities or insurances relative to that Turkish Asset or to Turkish Petroleum (the "TURKISH INTEREST"); and (ii) all of the Obligors' present and future interest in a Trinidadian Asset and all agreements, facilities or insurances relative to that Trinidadian Asset or to Trinidadian Petroleum (the "TRINIDADIAN INTEREST"); (cc) "TURKISH/TRINIDADIAN PETROLEUM" means: (i) in respect of a Turkish Asset, all petroleum won and saved from that Turkish Asset that accrues to the Turkish Interest in that Turkish Asset (including, without limitation, any such petroleum that is royalty petroleum) ("TURKISH PETROLEUM"); and (ii) in respect of a Trinidadian Asset, all petroleum won and saved from that Trinidadian Asset that accrues to the Trinidadian Interest in that Trinidadian Asset (including, without limitation, any such petroleum that is royalty petroleum) ("TRINIDADIAN PETROLEUM"); (dd) "VOTING AGREEMENT" means the voting agreement dated as of 3rd October, 2001 between Toreador, Herbert L. Brewer, David M. Brewer and PHD Partners, LP; (ee) "WARRANT" means the warrants issued or to be issued pursuant to the Warrant Letters; and (ff) "WARRANT LETTER" means the First Warrant Letter or the Second Warrant Letter. 2. WAIVERS AND CONSENTS 2.1 WAIVER OF BREACHES OF FINANCE DOCUMENTS Subject to the terms and conditions of this letter, Barclays Bank PLC, as Facility Agent confirms that the Banks have agreed to waive the following breaches of the Finance Documents: (a) all currently outstanding breaches of Clause 6.1 (Repayment), as amended by the December Waiver Letter; (b) failure by Toreador to provide the Toreador Guarantee in accordance with Clause 7.4 of the December Waiver Letter; and (c) failure by Toreador and the Obligors to procure that, by 31st January, 2003, all of the Toreador Group's shares in Trinidad Exploration and Development Limited and Trans Dominion Holdings Limited are pledged to the Facility Agent in accordance with Clause 7.6 of the December Waiver Letter. 2.2 MERGER WAIVER AND CONSENT 6 Barclays Bank PLC, as Facility Agent, consents to the merger of Toreador and MOC and confirms that the Banks have agreed to waive the following Events of Default: (a) under Clauses 19.12(a) (Mergers and acquisitions) and 20.3 (Breach of other obligations) and Clause 20.20(d) (Change of control) constituted by MOC entering into and performing the Merger Agreement and the Voting Agreement and by the occurrence of the Effective Time (as that term is defined in the Merger Agreement); (b) under Clauses 19.13 (Other Financial Indebtedness) and 20.3 (Breach of other obligations) constituted by MOC incurring any of the indebtedness referred to in paragraph 8 (Characterisation of Toreador Payments) below; (c) under Clauses 19.14 (Loans) and 20.3 (Breach of other obligations) constituted by MOC making loans to the Borrower referred to in paragraph 8 (Characterisation of Toreador Payments) below; and (d) under Clauses 19.13 (Other Financial Indebtedness) and 20.3 (Breach of other obligations) constituted by the Borrowers being deemed to have borrowed from MOC as referred to in paragraph 8 (Characterisation of Toreador Payments) below. 3. CONSOLIDATION OF WAIVER LETTERS Subject to the terms and conditions of this letter, Barclays Bank PLC, as Facility Agent, confirms that the Banks have agreed to permanently waive any and all Events of Default that have arisen under the Merger Waiver Letter, the March Waiver Letter and the December Waiver Letter and all the parties to this letter agree that the Merger Waiver Letter, the March Waiver Letter and the December Waiver Letter shall be terminated and of no further effect (save in relation to the waivers granted under those letters). 4. REPAYMENT 4.1 REPAYMENT Clause 6.1 (Repayment) shall be suspended in accordance with paragraph 4.2 (Term of Suspension) below and, during the term of suspension, shall be replaced with the following provisions: (a) the Borrowers shall, on the last Business Day of each of March 2003 and April, 2003, repay an amount of the Loans equal to the greater of: (i) $400,000; and (ii) the aggregate of: (A) French Revenue, less any Permitted Payments; and (B) Turkish Revenue and Trinidadian Revenue, less Turkish Permitted Payments and Trinidadian Permitted Payments, as determined in accordance with the terms of this Waiver Letter. 4.2 TERM OF SUSPENSION 7 Clause 6.1 (Repayment) shall be suspended until the earlier of: (a) the first Business Day of May, 2003; or (b) such time as (i) the ratio of the January 2003 NPV to Total Indebtedness is not less than 1.5:1; and (ii) the outstanding Loans do not exceed the Total Commitments. 4.3 TURKISH CAPITAL REPATRIATION PREPAYMENT If, during the suspension of Clause 6.1 (Repayment) in accordance with paragraph 4.2 (Term of Suspension) above, either of Madison Turkey, MOTI or any other Obligor receives any Turkish Capital Repatriation (the relevant company that receives such monies being referred to in this paragraph 4.3 as the "recipient"): (i) the recipient shall immediately notify the Facility Agent of all amounts of Turkish Capital Repatriation received; (ii) the recipient shall ensure that no money received as Turkish Capital Repatriation is transferred to any other member of the Toreador Group; and (iii) on demand by the Facility Agent the recipient shall immediately pay to the Facility Agent the balance of the Turkish Capital Repatriation (less any amount thereof that is reinvested in Turkey solely for the purposes of maximising future Turkish Capital Repatriations as detailed in the Strategic Plan) in performance of the prepayment obligation (if the recipient is a Borrower) or in performance of that Guarantor's guarantee of the prepayment obligation (if the recipient is a Guarantor) (and Clause 7.7(b) (Miscellaneous provisions) shall apply to any such prepayment). 4.4 ASSET SALE PROCEEDS PREPAYMENT Subject to paragraph 7.8(a)(iii) (Restrictions under Bank of Texas Loan Agreement), if, during the suspension of Clause 6.1 of the Credit Agreement in accordance with paragraph 4.2 (Term of Suspension) above, any member of the Toreador Group sells any of its US assets, Toreador agrees to pay to the Facility Agent an amount equal to the Surplus Sale Proceeds and such payment shall be deemed to be a prepayment of Loans by the Borrowers in an aggregate principal amount equal to the Surplus Sale Proceeds (and Clause 7.7(b) (Miscellaneous provisions) shall apply to any such prepayment). 4.5 TRINIDADIAN ASSET SALES PREPAYMENT (a) Subject to sub paragraph (b) below and to paragraph 7.8(a)(iv) (Restrictions under Bank of Texas Loan Agreement), if MOC or any Obligor sells or transfers any of its interest in the Trinidadian Assets (either directly or indirectly, including by way of share sale)(the relevant company that receives such monies being referred to in this paragraph 4.5 as the "recipient") : (i) the recipient shall immediately notify the Facility Agent of all amounts realised from such sale or transfer; (ii) the recipient shall ensure that no money received from such sale or transfer is transferred to any other member of the Toreador Group; and 8 (iii) on demand by the Facility Agent, the recipient shall immediately pay to the Facility Agent the net sale proceeds of such sale in performance of the prepayment obligation (if the recipient is a Borrower) or in performance of that Guarantor's guarantee of the prepayment obligation (if the recipient is a Guarantor) (and Clause 7.7(b) (Miscellaneous provisions) shall apply to any such prepayment). (b) No member of the Toreador Group will sell or transfer (either directly or indirectly, including by way of share sale or intra group transfer) any of its interest in the Trinidadian Assets without the prior written consent of the Facility Agent. 4.6 MISCELLANEOUS (a) The following amendments to the Credit Agreement effected by paragraph 4 of the Merger Waiver Letter and paragraph 13 of the March Waiver Letter remain effective and are restated as follows: (i) if the Borrowers repay or prepay any outstanding Loan, then the Total Commitments shall, immediately upon that repayment or prepayment being made, automatically be reduced by an amount equal to the principal so repaid or prepaid; (ii) Clause 6.2 shall be amended so the words "Tranche A" is inserted before "Tranche B" and the words ", but any amount repaid under Tranche A may subsequently be re-borrowed on and subject to the provisions of the Agreement" are deleted; and (iii) Clause 7.7(c) shall be amended so that the words "Any amount prepaid under Tranche A may subsequently be re-borrowed on and subject to the terms of this Agreement but" are deleted and the words "Tranche A," are inserted before "Tranche B". (b) The Borrowers shall ensure that the last day of an Interest Period for one or more Loans coincides with the date repayments or prepayments are to be made under this letter, and shall select Interest Periods accordingly and for this purpose (but not otherwise) the Borrowers may select an Interest Period of less than one month. (c) Amounts prepaid in accordance with paragraphs 4.3 (Turkish Capital Repatriation Prepayment) to 4.5 (Trinidadian Asset Sales Prepayment) shall not be applied against or reduce the repayment obligations under paragraph 4.1 (Repayment). 5. FORECASTS The calculation of the Relevant NPV on each Calculation Date in accordance with Clause 16.1(d)(i) (General) shall be suspended for the duration of the suspension of Clause 6.1 (Repayment) in accordance with paragraph 4 (Repayment) above. 6. INFORMATION COVENANTS 6.1 STRATEGIC PLAN 9 (a) On 15th March, 2003 and on the 15th and 30th of each month thereafter, Toreador shall provide to the Facility Agent an update of the Strategic Plan incorporating the following information in reasonable detail: (i) details of the progress achieved in relation to each of the options outlined in the Strategic Plan and the updates thereto; (ii) Toreador's assessment of the likelihood of each option referred to above coming to fruition by 30th April, 2003; (iii) details of any other option being pursued by Toreador with a view to restoring the January 2003 NPV to Total Indebtedness to not less than 1.5:1 by 30th April, 2003; and (iv) full details of any tax advice received by Toreador in relation to the sale of any Obligor or any of the Borrowing Base Assets. (b) Toreador shall immediately notify the Facility Agent if it becomes aware that any of the options outlined in the Strategic Plan is no longer being pursued by Toreador or the proposed counterparty or, as a result of any other event or circumstance, is unlikely to come to fruition by 30th April, 2003, providing reasonable detail of the particular event or circumstances. 6.2 CASHFLOW FORECASTS (a) Toreador shall immediately notify the Facility Agent of any events or circumstances that are likely to cause a deviation from the cashflow forecast provided by Toreador to the Facility Agent on 5th January, 2003 to the extent that it is likely to prevent the Borrowers complying with the repayment schedule in paragraph 4.1 (Repayment) or cause liquidity problems in the Toreador Group, providing details of the particular events or circumstances and a revised forecast. (b) Toreador shall provide to the Facility Agent, on a weekly basis, a certificate signed by the Chief Financial Officer of Toreador certifying that that the Toreador Group has sufficient working capital to continue trading and that the Toreador Group's cashflow situation is manageable. 6.3 OTHER INFORMATION Toreador shall promptly notify the Facility Agent: (a) of the receipt by any member of the Toreador Group of any Surplus Sale Proceeds; and (b) if any creditor of any member of the Toreador Group takes any enforcement action, or notifies any member of the Toreador Group of its intention to take enforcement action, in relation to any amounts owing to it. 7. COVENANTS 7.1 CAPITAL EXPENDITURE RESTRICTIONS 10 (a) The Obligors shall procure that no Obligor shall make, nor incur any obligation or liability for or in respect of any capital expenditure except for (i) capital expenditure that a prudent operator would expend to maintain (rather than develop) the relevant assets; or (ii) (with the consent of the Facility Agent and any necessary consent from the Bank of Texas) capital expenditure that is funded from free cash that is available to Toreador after making all of the repayments to the Finance Parties contemplated by paragraph 7.8(b) of this letter and any payment required to be made to Bank of Texas. (b) Toreador shall within ten days of the end of each month provide to the Facility Agent a cashflow reconciliation for that month for all of the members of the Toreador Group (in the form of the Schedule 1 to this letter) , reconciling the sources of funds and uses of funds and including details of that month's capital expenditures. (c) Paragraph (i) of Clause 19.22 (Capital expenditure), shall not apply. (d) Toreador shall, within ten days of the end of each month, provide to the Facility Agent a translation and cashflow reconciliation of the account statements for that month in relation to the Turkish Assets with full details of all income and expenditure items. 7.2 TURKISH CAPITAL REPATRIATION Toreador and the Obligors shall use best endeavours to maximise Turkish Capital Repatriation proceeds within as short a time frame as is reasonably practicable. 7.3 TOREADOR EQUITY ISSUES (a) Toreador shall use best endeavours to maximise Equity Issue Proceeds in the period to 30th April, 2003 and shall consult with the Facility Agent regarding the proportion of those proceeds that are to be applied in prepayment of the Loans. (b) Toreador undertakes to and shall procure that its subsidiaries shall, in connection with any Equity Issue, make full and proper disclosure in accordance with all applicable laws and/or requirements of any regulatory authority 7.4 TURKISH AND TRINIDADIAN CASHFLOW (a) Without prejudice to the Obligors' obligations under the Credit Agreement and subject to the following provisions of this paragraph 7.4 (Turkish and Trinidadian Cashflow), MOTI, Madison Turkey and MOC shall pay, and Toreador shall procure that MOTI, Madison Turkey and MOC pay all Turkish Revenue, less Turkish Permitted Payments, and all Trinidadian Revenue, less Trinidadian Permitted Payments, directly to the Facility Agent, to be applied in repayment of the Loans, unless any such amount is received in another currency, in which case (where applicable) MOTI, Madison Turkey and MOC shall, and Toreador shall procure that MOTI, Madison Turkey or MOC shall, immediately upon receipt convert that amount to Dollars and pay them directly to the Facility Agent, to be applied in repayment of the Loans as contemplated in 4.1(a)(ii). (b) (i) Toreador shall procure that, by no later than 30th April, 2003, Madison Turkey and MOTI shall open the Turkish Revenue Accounts and Trans Dominion Holdings Limited shall open the Trinidadian Revenue Accounts. 11 (ii) Subject to the opening of the Turkish Revenue Accounts and the Trinidadian Revenue Accounts in accordance with sub-paragraph (b)(i) above, Toreador shall procure that, from the first Business Day of May, 2003, all Turkish Revenue is paid into the Turkish Revenue Accounts and all Trinidadian Revenue is paid into the Trinidadian Revenue Accounts. (iii) MOTI, Madison Turkey and Trans Dominion Holdings Limited shall be permitted to make such Turkish Permitted Payments from the Turkish Revenue Accounts and such Trinidadian Permitted Payments from the Trinidadian Revenue Accounts, as applicable, as approved in writing by the Facility Agent. (c) Subject to paragraph 7.8(a)(v) (Restrictions under Bank of Texas Loan Agreement), Toreador shall no later than 30th April, 2003: (i) procure that the Facility Agent is granted a Security Interest over the Turkish Revenue Accounts by way of agreements in form and substance satisfactory to the Facility Agent (the "TURKISH REVENUE ACCOUNTS SECURITY DOCUMENTS"); and (ii) deliver a legal opinion from a reputable law firm in respect of all relevant jurisdictions in a form and substance satisfactory to the Facility Agent in relation to the Turkish Revenue Accounts Security Documents. (d) Subject to paragraph 7.8(a)(v) (Restrictions under Bank of Texas Loan Agreement), Toreador shall no later than 30th April, 2003: (i) procure that the Facility Agent is granted a Security Interest over the Trinidadian Revenue Accounts by way of agreements in form and substance satisfactory to the Facility Agent (the "TRINIDADIAN REVENUE ACCOUNTS SECURITY DOCUMENTS"); and [ (ii) deliver a legal opinion from a reputable law firm in respect of all relevant jurisdictions in a form and substance satisfactory to the Facility Agent in relation to the Trinidadian Revenue Accounts Security Documents. (e) Without limiting the Facility Agent's rights under Clause 19.3(d) (Borrowing Base Asset and similar information), the Borrower's Agent shall supply to the Facility Agent (in sufficient copies for all of the Banks unless the Facility Agent agrees otherwise) the information described in Clause 19.3(a)(i), (ii) and (iii) (Borrowing Base Asset and similar information), provided that the wording of that Clause shall be deemed amended for these purposes such that each reference to "Borrowing Base Asset" shall be deemed to be a reference to Turkish/Trinidadian Asset. (f) Toreador undertakes to deliver promptly to the Facility Agent such information and evidence as it may from time to time require in order to check and verify the amount of any Turkish Revenue, Trinidadian Revenue, Trinidadian Permitted Payment or Turkish Permitted Payment. (g) Each Obligor shall do all things required by the Facility Agent for the granting, perfecting or protecting of any security intended to be granted under the Turkish Revenue Accounts Security Document and the Trinidadian Revenue Accounts Security Document. 12 7.5 TRANS DOMINION HOLDINGS LIMITED Subject in each case to paragraph 7.8(a)(vi) (Restrictions under Bank of Texas Loan Agreement), Toreador and the Obligors agree: (a) to procure that, by 30th April, 2003, all of the Toreador Group's shares in Trinidad Exploration and Development Limited and Trans Dominion Holdings Limited are pledged to the Facility Agent on behalf of the Finance Parties by way of a security agreement in form and substance satisfactory to the Facility Agent and that by the same date legal opinions relating thereto are delivered to the Facility Agent from reputable law firms in all relevant jurisdictions in each case in form and substance satisfactory to the Facility Agent; and [subject to TED approval] (b) to procure that Trans Dominion Holdings Limited: (i) promptly notifies the Facility Agent when Trans Dominion Holdings Limited enters into any agreement relating to the Trinidadian Asset, the Trinidadian Interest or any Trinidadian Petroleum ("RELEVANT AGREEMENT"); (ii) after notice by the Facility Agent to the Borrower's Agent that the Facility Agent requires security to be granted to it for the benefit of the Finance Parties, enters into an agreement granting a Security Interest over that Relevant Agreement above in form and substance satisfactory to the Facility Agent ("SECURITY DOCUMENT"); and [subject to (iii) delivers a legal opinion from a reputable law firm in respect of all relevant jurisdictions in a form and substance satisfactory to the Facility Agent in relation to each of the Security Documents, and each Obligor shall do all things reasonably required by the Facility Agent for the granting, perfecting or protecting of any security intended to be granted under a Security Document. 7.6 THE MERGER AGREEMENT [?] (a) MOC undertakes not to agree to any waiver, amendment, termination or cancellation of, or of any term of, the Merger Agreement or the Voting Agreement. (b) Toreador agrees to waive any default, event of default or breach of representation or warranty under the Merger Agreement, the Voting Agreement, the Toreador Subordinated Revolving Credit Agreement and the Toreador Subordinated Revolving Credit Note constituted by MOC issuing shares to Barclays Nominees (Branches) Limited, and the Obligors undertaking to deliver shares, in accordance with paragraph 3(a)(ii) of the Merger Waiver Letter. 7.7 TURKEY Toreador and MOCE undertake to procure that, by no later than forty five days after Madison Turkey has received all Turkish Capital Repatriations that it is entitled to: (a) Madison Turkey shall have transferred all of its assets, liabilities, business and undertakings to MOTI and shall be wound up and dissolved; and 13 (b) that MOTI shall have discharged in full all of the consideration for that transfer. 7.8 RESTRICTIONS UNDER BANK OF TEXAS LOAN AGREEMENT (a) Toreador undertakes to use its best endeavours to obtain any necessary waiver of or amendment (if any) to the provisions of the Bank of Texas Loan Agreement so as to enable: (i) Toreador and the other borrowers under the Bank of Texas Loan Agreement to provide financial support to the MOC Group as set out in Schedule 2; (ii) Toreador to enter into the Toreador Guarantee; (iii) Toreador to make any payments to the Facility Agent that may arise in accordance with paragraph 4.4 (Asset Sales Proceeds Prepayment); (iv) Toreador to make any payments to the Facility Agent that may arise in accordance with paragraph 4.5 (Trinidadian Asset Sales Prepayment); (v) Toreador to grant to the Facility Agent a Security Interest over each of the Turkish Revenue Account and the Trinidadian Revenue Account in accordance with paragraphs 7.4(b) and (d) (Turkish and Trinidadian Cashflow) respectively; and (vi) Toreador Group's shares in Trinidad Exploration and Development Limited and Trans Dominion Holdings Limited to be pledged to the Facility Agent in accordance with paragraph 7.5. (b) On obtaining such waiver to, or amendment of, the provisions of the Bank of Texas Loan Agreement as is required to enable Toreador and the other borrowers under that agreement to provide financial support to the MOC Group in accordance with paragraph 7.8(a)(i) above, Toreador shall use its best endeavours to procure that the Outstanding Target Repayments of the Loans, as defined and set out in Schedule 2 to this letter, are promptly paid to the Facility Agent. (c) On obtaining such waivers to, or amendments of, the provisions of the Bank of Texas Loan Agreement as are required to enable Toreador to enter into the Toreador Guarantee in accordance with paragraph 7.8(a)(ii) above, Toreador shall immediately: (i) enter into the Toreador Guarantee; and (ii) deliver a legal opinion from a reputable law firm in respect of all relevant jurisdictions in a form and substance satisfactory to the Facility Agent in relation to its entry into the Toreador Guarantee. 7.9 TURKISH CAPITAL REPATRIATION Toreador shall procure that the Obligors obligations under paragraph 4.3 (Turkish Capital Repatriation Prepayment). [?] 8. CHARACTERISATION OF TOREADOR PAYMENTS 14 (a) Toreador agrees that any payment made or deemed made to MOC by Toreador pursuant to this letter, the December Waiver Letter, the March Waiver Letter or the Merger Waiver letter shall be "Junior Debt" for the purposes of the Subordination and Support Agreement. MOC agrees that any payment made or deemed made by MOC to any of the Borrowers pursuant to this letter, the December Waiver Letter, the March Waiver Letter or the Merger Waiver Letter shall be "Junior Debt" for the purposes of the Subordination Agreement. (b) An amount equal to each payment made by Toreador to the Facility Agent in accordance with this letter or the December Waiver Letter and for the avoidance of doubt, any amounts previously paid by Toreador under paragraph 7(b) of the Merger Waiver Letter or 12(b) of the March Waiver Letter shall be deemed to be (i) a non-interest bearing loan made by Toreador to MOC repayable (subject to the Subordination and Support Agreement on demand (or a loan on such other terms as are agreed by MOC and Toreador (in any case subject to the Subordination and Support Agreement)); and (ii) a non-interest bearing loan made by MOC to the Borrowers repayable (subject to the Subordination Agreement on demand (or a loan on such other terms as are agreed by MOC and the Borrowers (in any case subject to the Subordination Agreement)). (c) Without prejudice to any obligation to obtain the consent of the Bank of Texas, the obligations of Toreador to make payments under and in connection with this letter are absolute, irrevocable and unconditional and shall not be affected by: [this won't work] (i) the existence of any dispute, claim, counter-claim, set-off, defence or other right which Toreador may have at any time against any Finance Party or MOC, whether in connection herewith or otherwise; (ii) the bankruptcy, insolvency, reorganisation, winding up, dissolution or liquidation, or any change in the status, function, control or ownership of any Obligor or Toreador or the occurrence of any other proceeding as a result of such bankruptcy; (iii) any sale, transfer or other disposition by Toreador of any direct or indirect interest it may have in any Obligor; and (iv) any of the obligations of Toreador under or in connection with this letter being or becoming illegal, invalid or unenforceable in any respect. 9. AMENDMENT TO THE CREDIT AGREEMENT The amendments to the Credit Agreement effected by paragraph 4 of the Merger Waiver Letter and paragraph 13 of the March Waiver Letter remain effective and are restated as follows: (a) paragraph (d) in the definition of "Permitted Payment" in Clause 1.1 (Definitions) shall be deleted and shall be replaced with: "(d) [Not used];"; 15 (b) Clause 19.25(a)(iii) (Turkish business) shall be deleted and shall be replaced with: "(iii) in any event, does not make any payment to any other member of the Toreador Group except for payment of the kind contemplated by paragraph (ii)(B) above;"; (c) for the purposes of 20.3 (Breach of other obligations), 20.4 (Misrepresentation), 20.12 (Unlawfulness), 20.13 (Effectiveness of Security), 20.22 (U.S. Bankruptcy Laws) and 20.23 (ERISA) the word "Obligor" shall be deemed to include Toreador; (d) for the purposes of Clauses 20.5 (Cross-default), 20.6 (Insolvency), 20.7 (Insolvency proceedings), 20.8 (Appointment of receivers and managers), 20.9 (Creditor's processes), 20.10 (Analogous proceedings), 20.11 (Cessation of business) and 20.17 (Litigation) the phrase "member of the Group" shall be deemed to include Toreador; (e) Clause 20.20(d) (Change of Control) shall be deleted and shall be replaced with: "(d) MOC is not, or ceases to be, a wholly-owned subsidiary of Toreador Resources Corporation; or"; and (f) a new Clause 20.20(e) (Change of Control) of the Credit Agreement shall be inserted as follows: "(e) any single person, or group of persons acting in consort (as defined in the City Code on Takeovers and Mergers) acquires control (as defined in Section 416 of the Income and Corporation Taxes Act 1998) of Toreador Resources Corporation.". 10. CONFIRMATIONS 10.1 GUARANTEES Each Guarantor agrees, and represents and warrants to each Finance Party as at the date it executes this letter: (a) that the arrangements contemplated by this letter, the Merger Agreement and the Voting Agreement and the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement) do not in any way affect the guarantee and undertakings given by it under Clause 15 (Guarantee); and (b) that the guarantee given by it under Clause 15 (Guarantee) is a continuing guarantee, in full force and effect, and will extend to the ultimate balance of all sums payable by the Obligors under the Finance Documents, regardless of the arrangements contemplated by this letter, the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement) and any intermediate payments or discharge in whole or in part (including, without limitation, the prepayments contemplated by this letter). 10.2 MOC 16 MOC agrees, and represents and warrants to each Finance Party as at the date it executes this letter: (a) that the arrangements contemplated by this letter and the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement) do not in any way affect any of the Finance Documents; and (b) that its obligations under the Finance Documents are in full force and effect and are binding on, and enforceable against, MOC regardless of the arrangements contemplated by this letter or the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement)). 11. REPRESENTATIONS AND WARRANTIES (a) Toreador and each Obligor makes the following representations and warranties to each Finance Party in respect of those of this letter, the Merger Agreement and the Voting Agreement to which it is a party: (i) that it has the power to enter into and perform this letter, the Merger Agreement and the Voting Agreement and it has taken all necessary action to authorise the entry into, performance and delivery of this letter, the Merger Agreement and the Voting Agreement; and (ii) that this letter, the Merger Agreement and the Voting Agreement constitutes its legal, valid and binding obligation enforceable in accordance with its terms. (b) Toreador represents and warrants as at the date it executes this letter and each time it issues a Warrant, that: (i) that it has the power to enter into and perform this letter, the Warrants and the Warrant Letters and it has taken all necessary action to authorise the issue, performance and delivery of those Warrants; and (ii) this letter, the Warrants and the Warrant Letters will, when issued, constitutes its legal, valid and binding obligation enforceable in accordance with its terms. 12. LEGAL FEES (a) For the avoidance of doubt, MEF acknowledges and agrees that the Facility Agent's costs and expenses incurred in connection with this letter, the Warrant Letters and any other arrangement, new agreement or document contemplated by this letter fall within Clause 23.1 (Initial and special costs), and as such, MEF shall immediately on demand pay those costs and expenses. (b) The Facility Agent confirms that the payment of the legal fees of Allen & Overy (the Facility Agent's legal adviser) incurred in relation to this letter, the Warrant Letters and any other arrangement, new agreement or document contemplated by this letter shall constitute a Permitted Payment. 17 (c) The Obligors shall pay the Permitted Payment referred to in paragraph (b) above as soon as possible after execution of this letter from Gross Revenues to the extent any such amount is available after the payment of any other Permitted Payments (other than any referred to in paragraph (c)(i) of the definition of Permitted Payment in Clause 1.1 (Definitions)). (d) Toreador undertakes to pay the Allen & Overy Invoice by 15th March, 2003 at the latest. 13. EVENT OF DEFAULT If: (a) any of the provisions of this letter are not complied with; (b) any shares are not issued in accordance with the Warrants issued and delivered in accordance with the Warrant Letters; (c) Toreador does not issue, deliver and amend the strike price of any of the Warrants in accordance with the Warrant Letters; (d) the Merger Agreement or the Toreador Subordinated Revolving Credit Agreement is terminated; (e) the Voting Agreement is breached; (f) the Facility Agent is not satisfied with the substance of any update or notification provided to it under paragraph 6.1 (Strategic Plan); (g) Clause 6.1 of the Credit Agreement is not reinstated by 30th April, 2003 in accordance with paragraph 4.2 (Term of Suspension); (h) any representation and warranty in this letter is incorrect when made or repeated; or (i) there is any breach of the repayment schedule in paragraph 4 (Repayment) of this letter, (j) the Turkish Revenue Accounts and the Trinidadian Revenue Accounts are not opened and/or Security Interests are not granted over those accounts in favour of the Facility Agent by 30th April, 2003 in accordance with the provisions of paragraph 7.4 (Turkish and Trinidadian Cashflow); or (k) the Toreador Guarantee has not been executed and delivered, together with the accompanying legal opinion, as outlined in paragraph 7.8(c) by 30th April, 2003, then that event shall constitute an Event of Default under Clause 20 (Default) and the Finance Parties may thereafter exercise all of their rights in respect thereof under the Finance Documents. 14. DESIGNATION OF FINANCE DOCUMENTS 18 This letter, the Toreador Guarantee, the Subordination and Support Agreement, each of the Warrants and the Warrant Letters are a Finance Document (and each is hereby designated as such by the Facility Agent and the Borrowers' Agent). 15. CONDITIONS PRECEDENT (a) The letter and the waivers set out herein shall only take effect on the date on which the Agent has received an original of this letter and the Second Warrant Letter duly executed by all parties and has received (or waived receipt of): (i) board resolutions of each of the Obligors and Toreador authorising the transactions contemplated by and execution of this letter and the Second Warrant Letter; and (ii) specimen signatures of the persons authorised to sign this letter, the Second Warrant Letter and any other documents connected to the Finance Documents on behalf of the Obligors, (all in form and substance satisfactory to the Facility Agent) (such date being the "EFFECTIVE DATE"). (b) Toreador and each Obligor represents and warrants as at the Effective Date that there is no Default outstanding. 16. OTHER PROVISIONS (a) Nothing in this letter shall affect any right of any Finance Party, or any obligation of any Obligor, except as expressly stated above, and each Obligor expressly confirms that all such rights and obligations shall continue in full force and effect except to the extent so stated. (b) This letter does not create any right under the Contracts (Rights of Third Parties) Act 1999 which is enforceable by any person who is not a party to this letter. (c) Toreador acknowledges and agrees to the provisions of Clause 28 (Changes to the Parties) and irrevocably authorises the Facility Agent to execute any duly completed Novation Certificate on its behalf. (d) If a provision of this letter is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect: (i) the legality, validity or enforceability in that jurisdiction of any other provision of this letter; or (ii) the legality, validity or enforceability, in other jurisdictions of that or any other provision of this letter. (e) Clauses 1.2 (Construction), 28.1 (Transfers by Obligors) and 32-37 (inclusive) shall apply to this letter as though set out in full in this letter, except that: (i) references in those Clauses to the Credit Agreement are to be construed as references to this letter; 19 (ii) each reference to "Obligor" in Clauses 1.2 (Construction), 28.1 (Transfers by Obligors), 35 (Jurisdiction) and 37 (Waiver of Jury Trial) shall be deemed to include Toreador; and (iii) the reference to "the Guarantor" in Clause 35.2(f) (Service of Process) shall be deemed to include Toreador. Please countersign this letter (or a copy of it) where marked below to confirm your agreement to its terms. Yours faithfully, /s/ Steven Funnell - ---------------------------- ON BEHALF OF BARCLAYS BANK PLC AS FACILITY AGENT We agree with the above. BORROWERS' AGENT /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: 3/25/03 BORROWERS /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON OIL COMPANY EUROPE Date: 3/25/03 /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON OIL FRANCE S.A. Date: 3/25/03 /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: 3/25/03 20 GUARANTORS /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON OIL COMPANY Date: 3/25/03 /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON PETROLEUM INC Date: 3/25/03 /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON OIL COMPANY EUROPE Date: 3/25/03 /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON OIL FRANCE S.A. Date: 3/25/03 /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: 3/25/03 /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON (TURKEY) INC Date: 3/25/03 /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF MADISON OIL TURKEY INC Date: 3/25/03 21 TOREADOR /s/ Douglas W. Weir - ---------------------------- ON BEHALF OF TOREADOR RESOURCES CORPORATION Date: 3/25/03 22 SCHEDULE 1 - FORM OF CASHFLOW RECONCILIATION SOURCES OF FUNDS DESCRIPTION French Operations Turkish Operations Trinidadian Operations US (Toreador) Operations Other ============== Total USES OF FUNDS FRENCH OPEX CAPEX G&A Madison Loan Other ===================================== TOTAL FRANCE TURKISH OPEX CAPEX G&A Madison Loan Other ===================================== TOTAL TURKEY TRINIDADIAN OPEX CAPEX G&A Madison Loan Other ===================================== TOTAL TRINIDAD US OPEX CAPEX G&A Madison Loan Other ===================================== Total US (Toreador) ========================== TOTAL USES OF FUNDS 23 SCHEDULE 2 TOREADOR PAYMENT OBLIGATIONS

MONTH TARGET REPAYMENT ACTUAL REPAYMENT OUTSTANDING (USD) (USD) TARGET REPAYMENTS (USD) - ------------------------ --------------------------- ----------------------- ----------------------- November 2002 450,000 300,000 150,000 - ------------------------ --------------------------- ----------------------- ----------------------- December 2002 450,000 150,000 300,000 - ------------------------ --------------------------- ----------------------- ----------------------- January 2003 400,000 150,000 250,000 - ------------------------ --------------------------- ----------------------- ----------------------- February 2003 500,000 400,000 100,000 - ------------------------ --------------------------- ----------------------- -----------------------

EX-10.30 10 d04484exv10w30.txt EX-10.30 WARRANT LETTER DATED MARCH 25, 2003 EXHIBIT 10.30 [ON THE LETTERHEAD OF TOREADOR RESOURCES CORPORATION] To: Barclays Capital 5 The North Colonnade Canary Wharf London E14 4BB Attention: Steven Funnell 25th March, 2003 Dears Sirs, We refer to the waiver letter dated on or about today's date (the "WAIVER LETTER"). Capitalised terms defined or used in the Waiver Letter have the same meaning in this letter. In consideration of your agreement to the terms of the Waiver Letter we agree: 1. On or before 31st March, 2003, to issue and deliver to Barclays Bank PLC 1 warrant for up to 50,000 Shares at the Strike Price with an Expiration Date (as that term is defined in the warrant) of 14th March, 2008. 2. On or before 31st March, 2003, to reissue the warrants granted under the First Warrant Letter, reducing the strike price, as detailed in the First Warrant Letter, to the Strike Price. 3. Subject to paragraph 4 below, on 7th April, 2003, issue and deliver to Barclays Bank PLC 1 warrant for the purchase of up to 100,000 Shares at the Second Strike Price with an Expiration Date (as that term is defined in the warrant) of 7th April, 2008. 4. Paragraph 3 above shall not apply if as at 31st March, 2003 the ratio of the January 2003 NPV, as defined in the Waiver Letter, to Total Indebtedness is more than 1.5:1. 5. The form of warrants to be issued pursuant to this letter shall be in such form as the Arranger may reasonably require. 6. This letter may be executed in any number of counterparts. 7. This letter is governed by and shall be construed in accordance with English law. 8. Please countersign this letter (or a copy of it) where marked below to confirm your agreement to its terms. 9. If a provision of this letter is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect; (a) the legality, validity or enforceability, in that jurisdiction or any other provision of this letter; or (b) the legality, validity or enforceability, in other jurisdictions of that or any other provision of this letter. 10. In this letter: "SECOND STRIKE PRICE" means the price US$1 above the closing price of the Shares on 31st March, 2003. "SHARES" means fully paid and non-assessable shares of common stock of Toreador; and "STRIKE PRICE" means US$3.50. Yours faithfully /s/ Douglas W. Weir - ------------------------ For and on behalf of TOREADOR RESOURCES CORPORATION We agree with the above. /s/ Steven Funnell - ------------------------ BARCLAYS CAPITAL (the investment banking division of Barclays Bank PLC) Date: EX-10.31 11 d04484exv10w31.txt EX-10.31 AMENDMENT TO SETTLEMENT AGREEMENT EXHIBIT 10.31 From: Graham Martin Sent: Monday, February 03, 2003, 9:13 A.M. To: Frederic Auberty cc: Robertson, Andy; Geraldine Eden Subject: Re: Karak/Trans-Dominion Dear Frederic, I confirm our agreement to the payments as scheduled in your e-mail below. As regards interest, my understanding is that each payment after the first (assuming it is made today) will also include an amount of interest at a rate of 7% per annum on the outstanding balance for the period from 3rd February (or previous payment date) to the date of payment. Regards, Graham Martin From: Frederic Auberty Sent: 30 January 2003, 17:34 To: Graham Martin Subject: Karak/Trans-Dominion Dear Mr. Martin: In reference to our phone conversation of today, I am glad that we have been able to reach an agreement regarding the repayment of US$ 350,000 due on or before February 3rd 2003 which is as follows: Toreador will transfer US$ 35,000 on February 3, 2003. Toreador will make US$ 25,000 monthly payment until May 2003. Toreador will pay the balance by the end of May 2003. If not able to pay the balance by the end of May 2003: the monthly payment will be increase to US$ 50,000. 7% interest rate per year is included in each payment. Please confirm the above, and provide me with wiring instructions. Thank you again for your understanding and cooperation. Best regards, Frederic Auberty V.P. International Phone +1 214 559-3933 Fax +1 214 559-3945 EX-10.32 12 d04484exv10w32.txt EX-10.32 WAIVER LETTER EXHIBIT 10.32 To: Madison Energy France S.C.S. (formerly Madison/Chart Energy S.C.S.) ("MEF") (the "BORROWERS' AGENT") To: Madison Oil Company Europe ("MOCE") Madison Oil France S.A. ("MOF") Madison Energy France S.C.S. (the "BORROWERS") To: Madison Oil Company ("MOC") Madison Petroleum Inc. ("MPI") Madison Oil Company Europe Madison Oil France S.A. Madison Energy France S.C.S. Madison (Turkey) Inc ("MADISON TURKEY") Madison Oil Turkey Inc ("MOTI") (the "GUARANTORS") To: Toreador Resources Corporation ("TOREADOR") 11th April 2003 WAIVER AND CONSENT - VARIOUS ISSUES We refer to the Revolving Credit Facility Agreement dated 30th March, 2001 between the Borrowers, the Guarantors, Barclays Capital as Arranger, the Banks (as defined therein) and Barclays Bank PLC as Facility Agent, Technical Agent, Ancillary Bank and US Security Trustee as amended (the "CREDIT AGREEMENT"). We also refer to a waiver and consent letter dated 8th November, 2001 relating to the merger of MOC with Toreador (the "MERGER WAIVER LETTER"), to a waiver and consent letter dated 21st March, 2002 relating to various issues (the "MARCH WAIVER LETTER") and a waiver and consent letter dated 31st December, 2002 relating to various issues (the "DECEMBER WAIVER LETTER"). All of the Banks, the Ancillary Bank and the Hedging Bank, have authorised the Facility Agent to enter into this letter on their behalf. 1. INTERPRETATION In this letter, unless otherwise defined or the context otherwise requires: (a) terms defined or used in the Credit Agreement have the same meaning in this letter; (b) references to specific numbered clauses are clauses of the Credit Agreement; (c) references to paragraphs are, unless stated otherwise, references to paragraphs of this letter; (d) "ALLEN & OVERY INVOICE" means the invoice for L 44,768.52 delivered by Allen & Overy to Barclays Capital dated 29th January, 2003 in respect of work done in 2 connection with the December Waiver Letter, the First Warrant Letter, the Toreador Guarantee and the related subordination agreement. (e) "BANK OF TEXAS LOAN AGREEMENT" means the loan agreement dated 16th February, 2001 between Toreador Resources Corporation, Toreador Exploration and Production Inc, Toreador Acquisition Corporation, Tormin Inc and the Bank of Texas National Association, as amended from time to time. (f) "BEST ENDEAVOURS" means, promptly at the written request of the Facility Agent, Toreador shall make a written request of the Bank of Texas N.A.; (g) "EQUITY ISSUE PROCEEDS" means the proceeds (whether in cash or in kind) of any equity or capital issue (to include, without limitation, share placement, the issue of preferred stock or subordinated loan stock or any other similar instrument) (the "EQUITY ISSUE"); (h) "FIRST WARRANT LETTER" means the warrant letter dated 21st March, 2002 between Toreador and the Arranger, as amended. (i) "MERGER AGREEMENT" means the merger agreement dated as of 3rd October, 2001 between MOC, Toreador and MOC Acquisition Corporation (a wholly-owned subsidiary of Toreador) pursuant to which, subject to the satisfaction of certain conditions, MOC and MOC Acquisition Corporation will merge and MOC shall be the surviving corporation; (j) "MOC GROUP" means MOC and all of its subsidiaries. (k) "SECOND WARRANT LETTER" means the warrant letter dated on or about the date of this letter between Toreador and the Arranger. (l) "STRATEGIC PLAN" means the strategic plan submitted to the Facility Agent by Toreador on 12th December, 2002; (m) "SUBORDINATION AGREEMENT" means the Subordination Agreement dated 30th March, 2001 between members of the Madison Group as debtors, the Facility Agent and MOF, MOC, MOCE and MPI. (n) "SUBORDINATION AND SUPPORT AGREEMENT" means the subordination and support agreement between Toreador, MOC and the Facility Agent dated November, 2001 entered into in connection with the Merger Waiver Letter; (o) "SURPLUS SALE PROCEEDS" means, in relation to any US asset of the Toreador Group, the net sale proceeds paid to or to the order of any member of the Toreador Group from the sale of that asset which Bank of Texas, N.A., in its sole and absolute discretion, permits to be paid to the Facility Agent; (p) "TOREADOR GROUP" means, at any time Toreador and all of its Subsidiaries for the time being; (q) "TOREADOR GUARANTEE" means a Toreador subordinated guarantee of all of the obligations of the Obligors under the Finance Documents; 3 (r) "TOREADOR SUBORDINATED REVOLVING CREDIT AGREEMENT" means the subordinated revolving credit agreement dated as of 3rd October, 2001 between MOC and Toreador pursuant to which Toreador agrees to advance by way of loan certain monies to MOC; (s) "TOREADOR SUBORDINATED REVOLVING CREDIT NOTE" means the subordinated revolving credit note dated as of 3rd October, 2001 between MOC and Toreador; (t) "TRINIDADIAN ASSETS" means: (i) all of the shares in Trans Dominion Holdings Limited; (ii) all of Trans Dominion Holdings Limited's present and future shares in Trinidad Exploration and Development Ltd; and (iii) any present and future interest of Trans Dominion Holdings Limited in the Bonasse oil field in Trinidad and Tobago and the related Southwest Cedros Peninsular Exploration Licence; (u) "TRINIDADIAN REVENUE" means all monies arising, received from and in relation to the Trinidadian Assets to be applied in accordance with Clause 7.4, except for monies received from the sale of all, or part of the Trinidadian Assets, which shall be applied in accordance with Clause 4.5. (v) "TRINIDADIAN REVENUE ACCOUNTS" means the revenue accounts to be opened with the Account Bank in London and maintained by Trans Dominion Holdings Limited, which shall be maintained in accordance with the directions of the Facility Agent; (w) "TURKISH CAPITAL REPATRIATION" means any amounts paid to Toreador or any Obligor in relation to the repatriation of the registered capital of any member of the Toreador Group in Turkey; (x) "TURKISH PERMITTED PAYMENTS" means: (i) the costs referred to in paragraphs (a)(i) and (a)(ii) of the definition of "Permitted Payment" in the Credit Agreement except that reference to Borrower Borrowing Asset, Borrowing Base Petroleum or Borrowing Base Interest in that definition shall be construed as a reference to Turkish Interest, Turkish Petroleum and Turkish Asset); (ii) any taxes payable by MOTI and Madison Turkey; (iii) any: (a) exploration and appraisal expenditure; (b) general and administrative expenditure; or (c) capital expenditure not falling within paragraph (i) above, payable by MOTI and Madison Turkey, as applicable, to the extent the Majority Banks expressly agree or require in writing (but not further or otherwise); and 4 (iv) any other expenditure that the Majority Banks agree may be a Turkish Permitted Payment; (y) "TURKISH REVENUE" means: (i) the gross proceeds (without any deductions whatsoever) of any disposal of Turkish Petroleum; (ii) any sales tax payable on the amount referred to in paragraph (i) above; (iii) any other amount payable to MOTI, Madison Turkey and MOC in respect of any Turkish Petroleum, Turkish Interest or Turkish Asset. (z) "TURKISH REVENUE ACCOUNTS" means the revenue accounts to be opened with the Account Bank in London, which shall be maintained in accordance with the directions of the Facility Agent; (aa) "TURKISH ASSET" means: (A) the Cendere oil field in Turkey; (B) the Zeynel oil field in Turkey; (C) the Boyabet oil field in Turkey; and (D) the Thrace Basin in Turkey; (bb) "TURKISH INTEREST" means: all of the Obligors' present and future interest in a Turkish Asset and all agreements, facilities or insurances relative to that Turkish Asset or to Turkish Petroleum; (cc) "TURKISH PETROLEUM" means in respect of a Turkish Asset, all petroleum won and saved from that Turkish Asset that accrues to the Turkish Interest in that Turkish Asset (including, without limitation, any such petroleum that is royalty petroleum); (dd) "VOTING AGREEMENT" means the voting agreement dated as of 3rd October, 2001 between Toreador, Herbert L. Brewer, David M. Brewer and PHD Partners, LP; (ee) "WARRANT" means the warrants issued or to be issued pursuant to the Warrant Letters; and (ff) "WARRANT LETTER" means the First Warrant Letter or the Second Warrant Letter. 2. WAIVERS AND CONSENTS 2.1 WAIVER OF BREACHES OF FINANCE DOCUMENTS Subject to the terms and conditions of this letter, Barclays Bank PLC, as Facility Agent confirms that the Banks have agreed to waive the following breaches of the Finance Documents: 5 (a) all currently outstanding breaches of Clause 6.1 (Repayment), as amended by the December Waiver Letter; (b) failure by Toreador to provide the Toreador Guarantee in accordance with Clause 7.4 of the December Waiver Letter; (c) any breach of Clause 20.14 (Cover Ratios) as a consequence of the Forecast re-determination dated 30th January, 2003; (d) failure by Toreador and the Obligors to procure that, by 31st January, 2003, all of the Toreador Group's shares in Trinidad Exploration and Development Limited and Trans Dominion Holdings Limited are pledged to the Facility Agent in accordance with Clause 7.6 of the December Waiver Letter. 2.2 MERGER WAIVER AND CONSENT Barclays Bank PLC, as Facility Agent, consents to the merger of Toreador and MOC and confirms that the Banks have agreed to waive the following Events of Default: (a) under Clauses 19.12(a) (Mergers and acquisitions) and 20.3 (Breach of other obligations) and Clause 20.20(d) (Change of control) constituted by MOC entering into and performing the Merger Agreement and the Voting Agreement and by the occurrence of the Effective Time (as that term is defined in the Merger Agreement); (b) under Clauses 19.13 (Other Financial Indebtedness) and 20.3 (Breach of other obligations) constituted by MOC incurring any of the indebtedness referred to in paragraph 8 (Characterisation of Toreador Payments) below; (c) under Clauses 19.14 (Loans) and 20.3 (Breach of other obligations) constituted by MOC making loans to the Borrower referred to in paragraph 8 (Characterisation of Toreador Payments) below; and (d) under Clauses 19.13 (Other Financial Indebtedness) and 20.3 (Breach of other obligations) constituted by the Borrowers being deemed to have borrowed from MOC as referred to in paragraph 8 (Characterisation of Toreador Payments) below. 3. CONSOLIDATION OF WAIVER LETTERS Subject to the terms and conditions of this letter, Barclays Bank PLC, as Facility Agent, confirms that the Banks have agreed to permanently waive any and all Events of Default that have arisen under the Merger Waiver Letter, the March Waiver Letter and the December Waiver Letter and all the parties to this letter agree that the Merger Waiver Letter, the March Waiver Letter and the December Waiver Letter shall be terminated and of no further effect (save in relation to the waivers granted under those letters). 6 4. REPAYMENT 4.1 REPAYMENT Clause 6.1 (Repayment) shall be suspended in accordance with paragraph 4.2 (Term of Suspension) below and, during the term of suspension, shall be replaced with the following provisions: The Borrowers shall, on the last Business Day of each of month until (and including) December 2003, repay an amount of the Loans equal to the greater of: (i) $400,000; and (ii) the aggregate of: (A) French Revenue, less any Permitted Payments; and (B) Turkish Revenue, less Turkish Permitted Payments, and Trinidadian Revenue as determined in accordance with the terms of this Waiver Letter. 4.2 TERM OF SUSPENSION Clause 6.1 (Repayment) shall be suspended until the earlier of: (a) the first Business Day of January, 2004; or (b) such time as (i) the ratio of the Relevant NPV derived from the Forecast prepared as of 30th April, 2003 in accordance with paragraph 5 (Forecasts) of this letter to Total Indebtedness is not less than 1.5:1; and (ii) the outstanding Loans do not exceed the Total Commitments. 4.3 TURKISH CAPITAL REPATRIATION PREPAYMENT If, during the suspension of Clause 6.1 (Repayment) in accordance with paragraph 4.2 (Term of Suspension) above, either of Madison Turkey, MOTI or any other Obligor receives any Turkish Capital Repatriation (the relevant company that receives such monies being referred to in this paragraph 4.3 as the "recipient"): (i) the recipient shall immediately notify the Facility Agent of all amounts of Turkish Capital Repatriation received; (ii) the recipient shall ensure that no money received as Turkish Capital Repatriation is transferred to any other member of the Toreador Group; and (iii) on demand by the Facility Agent the recipient shall immediately pay to the Facility Agent the balance of the Turkish Capital Repatriation (less any amount thereof that is reinvested in Turkey solely for the purposes of maximising future Turkish Capital Repatriations as detailed in the Strategic Plan) in performance of the prepayment obligation (if the recipient is a Borrower) or in performance of that Guarantor's guarantee of the prepayment obligation (if the recipient is a Guarantor) (and Clause 7.7(b) (Miscellaneous provisions) shall apply to any such prepayment). 7 4.4 ASSET SALE PROCEEDS PREPAYMENT Subject to paragraph 7.8(a)(iii) (Restrictions under Bank of Texas Loan Agreement), if, during the suspension of Clause 6.1 of the Credit Agreement in accordance with paragraph 4.2 (Term of Suspension) above, any member of the Toreador Group sells any of its US assets, Toreador agrees to pay to the Facility Agent an amount equal to the Surplus Sale Proceeds, but only if Bank of Texas N.A. expressly consents, in its sole and absolute discretion, and such payment shall be deemed to be a prepayment of Loans by the Borrowers in an aggregate principal amount equal to the Surplus Sale Proceeds (and Clause 7.7(b) (Miscellaneous provisions) shall apply to any such prepayment). 4.5 TRINIDADIAN ASSET SALES PREPAYMENT (a) Subject to sub paragraph (b) below and subject to any relevant consents required under Trinidadian laws and (if required) the consent of the Trinidad Exploration and Development Ltd. Shareholders (which consents the Obligors undertake to use their best endeavours to obtain), if MOC or any Obligor sells or transfers any of its interest in the Trinidadian Assets (either directly or indirectly, including by way of share sale) (the relevant company that receives such monies being referred to in this paragraph 4.5 as the "recipient"): (i) the recipient shall immediately notify the Facility Agent of all amounts realised from such sale or transfer; (ii) the recipient shall ensure that no money received from such sale or transfer is transferred to any other member of the Toreador Group; and (iii) on demand by the Facility Agent, the recipient shall immediately pay to the Facility Agent the net sale proceeds of such sale in performance of the prepayment obligation (if the recipient is a Borrower) or in performance of that Guarantor's guarantee of the prepayment obligation (if the recipient is a Guarantor) (and Clause 7.7(b) (Miscellaneous provisions) shall apply to any such prepayment). (b) No member of the MOC Group will sell or transfer (either directly or indirectly, including by way of share sale or intra group transfer) any of its interest in the Trinidadian Assets without the prior written consent of the Facility Agent, except in the event of dilution pursuant to the Shareholders Agreement between Anglo-African Energy, Inc. and Trans-Dominion Holdings Limited. 4.6 MISCELLANEOUS (a) The following amendments to the Credit Agreement effected by paragraph 4 of the Merger Waiver Letter and paragraph 13 of the March Waiver Letter remain effective and are restated as follows: (i) if the Borrowers repay or prepay any outstanding Loan, then the Total Commitments shall, immediately upon that repayment or prepayment being made, automatically be reduced by an amount equal to the principal so repaid or prepaid; (ii) Clause 6.2 shall be amended so the words "Tranche A" is inserted before "Tranche B" and the words ", but any amount repaid under Tranche A may 8 subsequently be re-borrowed on and subject to the provisions of the Agreement" are deleted; and (iii) Clause 7.7(c) shall be amended so that the words "Any amount prepaid under Tranche A may subsequently be re-borrowed on and subject to the terms of this Agreement but" are deleted and the words "Tranche A," are inserted before "Tranche B". (b) The Borrowers shall ensure that the last day of an Interest Period for one or more Loans coincides with the date repayments or prepayments are to be made under this letter, and shall select Interest Periods accordingly and for this purpose (but not otherwise) the Borrowers may select an Interest Period of less than one month. (c) Amounts prepaid in accordance with paragraphs 4.3 (Turkish Capital Repatriation Prepayment) to 4.5 (Trinidadian Asset Sales Prepayment) shall not be applied against or reduce the repayment obligations under paragraph 4.1 (Repayment). 5. FORECASTS The calculation of the Relevant NPV on each Calculation Date in accordance with Clause 16.1(d)(i) (General) shall be suspended for the duration of the suspension of Clause 6.1 (Repayment) in accordance with paragraph 4 (Repayment) above, except that the Relevant NPV shall be calculated as of a 30th April, 2003 Calculation Date in accordance with the provisions of Clause 16 (Forecasts), subject to the following revisions: (i) references to 45 days in Clause 16.2(a) shall be to 16 days; (ii) references to 28 days in Clause 16.2(b) shall be to 9 days; (iii) references to 7 days in Clause 16.2(c) shall be to 5 days. 6. INFORMATION COVENANTS 6.1 STRATEGIC PLAN (a) On 30th March, 2003 and on the 15th and 30th of each month thereafter, Toreador shall provide to the Facility Agent an update of the Strategic Plan incorporating the following information in reasonable detail: (i) details of the progress achieved in relation to each of the options outlined in the Strategic Plan and the updates thereto; (ii) Toreador's assessment of the likelihood of each option referred to above coming to fruition by 30th April, 2003; (iii) details of any other option being pursued by Toreador with a view to restoring the January 2003 NPV to Total Indebtedness to not less than 1.5:1 by 30th April, 2003; and (iv) full details of any tax advice received by Toreador in relation to the sale of any Obligor or any of the Borrowing Base Assets. 9 (b) Toreador shall immediately notify the Facility Agent if it becomes aware that any of the options outlined in the Strategic Plan is no longer being pursued by Toreador or the proposed counterparty or, as a result of any other event or circumstance, is unlikely to come to fruition by 30th April, 2003, providing reasonable detail of the particular event or circumstances. 6.2 CASHFLOW FORECASTS (a) Toreador shall immediately notify the Facility Agent of any events or circumstances that are likely to cause a deviation from the cashflow forecast provided by Toreador to the Facility Agent on 5th January, 2003 to the extent that it is likely to prevent the Borrowers complying with the repayment schedule in paragraph 4.1 (Repayment) or cause liquidity problems in the Toreador Group, providing details of the particular events or circumstances and a revised forecast. (b) Toreador shall provide to the Facility Agent, on a weekly basis, a certificate signed by the Chief Financial Officer of Toreador certifying that that the Toreador Group has sufficient working capital to continue trading and that the Toreador Group's cashflow situation is manageable. 6.3 OTHER INFORMATION Toreador shall promptly notify the Facility Agent: (a) of the receipt by any member of the Toreador Group of any Surplus Sale Proceeds; and (b) if any creditor of any member of the Toreador Group takes any enforcement action, or notifies any member of the Toreador Group of its intention to take enforcement action, in relation to any amounts owing to it. 7. COVENANTS 7.1 CAPITAL EXPENDITURE RESTRICTIONS (a) The Obligors shall procure that no Obligor (excluding Toreador and any other borrower under the Bank of Texas Loan Agreement) shall make, nor incur any obligation or liability for or in respect of any capital expenditure except for any capital expenditure that a prudent operator would expend to maintain (rather than develop) the relevant assets. (b) Toreador shall within fifteen days of the end of each month provide to the Facility Agent a cashflow reconciliation for that month for all of the members of the Toreador Group (in the form of the Schedule 1 to this letter), reconciling the sources of funds and uses of funds and including details of that month's capital expenditures. (c) Paragraph (i) of Clause 19.22 (Capital expenditure), shall not apply. (d) Toreador shall, within fifteen days of the end of each month, provide to the Facility Agent a translation and cashflow reconciliation of the account statements for that month in relation to the Turkish Assets with full details of all income and expenditure items. 10 7.2 TURKISH CAPITAL REPATRIATION Toreador and the Obligors shall use best endeavours to maximise Turkish Capital Repatriation proceeds within as short a time frame as is reasonably practicable. 7.3 TOREADOR EQUITY ISSUES (a) Toreador shall use best endeavours to maximise Equity Issue Proceeds in the period to 30th April, 2003 and shall pay such portion of such Equity Issue Proceeds to the Facility Agent to the extent consented to by Bank of Texas, N.A. in its sole and absolute discretion. (b) Toreador undertakes to and shall procure that its subsidiaries shall, in connection with any Equity Issue, make full and proper disclosure in accordance with all applicable laws and/or requirements of any regulatory authority 7.4 TURKISH AND TRINIDADIAN CASHFLOW (a) Without prejudice to the Obligors' obligations under the Credit Agreement and subject to the following provisions of this paragraph 7.4 (Turkish and Trinidadian Cashflow), MOTI and Madison Turkey and MOC shall pay, and MOC shall procure that MOTI and Madison Turkey pay all Turkish Revenue (to the extent permitted by Turkish law), less Turkish Permitted Payments, and all Trinidadian Revenue directly to the Facility Agent, unless any such amount is received in another currency, in which case (where applicable) MOTI, Madison Turkey and MOC shall, and MOC shall procure that MOTI and Madison Turkey shall, immediately upon receipt convert that amount to Dollars and pay them directly to the Facility Agent, in both cases to be applied in repayment of the Loans and in performance of that Guarantor's guarantee of the repayment obligation as contemplated in Clause 4.1(a)(ii). (b) Subject in each case with regard to the Turkish Revenue Accounts to the extent permitted by Turkish law; (i) MOC shall procure that, by no later than 30th April, 2003, Madison Turkey and MOTI shall open the Turkish Revenue Accounts and Trans Dominion Holdings Limited shall open the Trinidadian Revenue Accounts. (ii) Subject to the opening of the Turkish Revenue Accounts and the Trinidadian Revenue Accounts in accordance with sub-paragraph (b)(i) above, MOC shall procure that, from the first Business Day of May, 2003, all Turkish Revenue is paid into the Turkish Revenue Accounts and all Trinidadian Revenue is paid into the Trinidadian Revenue Accounts. (iii) MOTI and Madison Turkey shall be permitted to make such Turkish Permitted Payments from the Turkish Revenue Accounts as approved in writing by the Facility Agent. (c) To the extent permitted by Turkish law, MOC shall no later than 30th April, 2003: (i) procure that the Facility Agent is granted a Security Interest over the Turkish Revenue Accounts by way of agreements in form and substance satisfactory to the Facility Agent (the "TURKISH REVENUE ACCOUNTS SECURITY DOCUMENTS"); and 11 (ii) deliver a legal opinion from a reputable law firm in respect of all relevant jurisdictions in a form and substance satisfactory to the Facility Agent in relation to the Turkish Revenue Accounts Security Documents. (d) MOC shall no later than 30th April, 2003: (i) procure that the Facility Agent is granted a Security Interest over the Trinidadian Revenue Accounts by way of agreements in form and substance satisfactory to the Facility Agent (the "TRINIDADIAN REVENUE ACCOUNTS SECURITY DOCUMENTS"); and (ii) deliver a legal opinion from a reputable law firm in respect of all relevant jurisdictions in a form and substance satisfactory to the Facility Agent in relation to the Trinidadian Revenue Accounts Security Documents. (e) Without limiting the Facility Agent's rights under Clause 19.3(d) (Borrowing Base Asset and similar information), the Borrower's Agent shall supply to the Facility Agent (in sufficient copies for all of the Banks unless the Facility Agent agrees otherwise) the information described in Clause 19.3(a)(i), (ii) and (iii) (Borrowing Base Asset and similar information), provided that the wording of that Clause shall be deemed amended for these purposes such that each reference to "Borrowing Base Asset" shall be deemed to be a reference to Turkish Asset. (f) Toreador undertakes to deliver promptly to the Facility Agent such information and evidence as it may from time to time require in order to check and verify the amount of any Turkish Revenue, Trinidadian Revenue, or Turkish Permitted Payment. (g) Each Obligor shall do all things required by the Facility Agent for the granting, perfecting or protecting of any security intended to be granted under the Turkish Revenue Accounts Security Document and the Trinidadian Revenue Accounts Security Document. 7.5 TRANS DOMINION HOLDINGS LIMITED Subject to obtaining any relevant consents under Trinidadian laws and (if required) the consent of the Trinidad Exploration and Development Ltd. Shareholders, and (if required) the consent of Petroleum Company of Trinidad and Tobago Limited (which consents MOC and the Obligors agree to use best endeavours to obtain): (a) to procure that, by 30th April, 2003, (i) all of the MOC Group's shares in Trans Dominion Holdings Limited and (ii) all of Trans Dominion Holdings Limited's shares in Trinidad Exploration and Development Ltd. are pledged to the Facility Agent on behalf of the Finance Parties by way of a security agreement in form and substance satisfactory to the Facility Agent and that by the same date legal opinions relating thereto are delivered to the Facility Agent from reputable law firms in all relevant jurisdictions in each case in form and substance satisfactory to the Facility Agent; and (b) to procure that Trans Dominion Holdings Limited: (i) promptly notifies the Facility Agent when Trans Dominion Holdings Limited enters into any agreement relating to the Trinidadian Assets ("RELEVANT AGREEMENT"); 12 (ii) after notice by the Facility Agent to the Borrower's Agent that the Facility Agent requires security to be granted to it for the benefit of the Finance Parties, enters into an agreement granting a Security Interest over that Relevant Agreement above in form and substance satisfactory to the Facility Agent ("SECURITY DOCUMENT"); and (iii) delivers a legal opinion from a reputable law firm in respect of all relevant jurisdictions in a form and substance satisfactory to the Facility Agent in relation to each of the Security Documents, and each Obligor shall do all things reasonably required by the Facility Agent for the granting, perfecting or protecting of any security intended to be granted under a Security Document. 7.6 THE MERGER AGREEMENT (a) MOC undertakes not to agree to any waiver, amendment, termination or cancellation of, or of any term of, the Merger Agreement or the Voting Agreement. (b) Toreador agrees to waive any default, event of default or breach of representation or warranty under the Merger Agreement, the Voting Agreement, the Toreador Subordinated Revolving Credit Agreement and the Toreador Subordinated Revolving Credit Note constituted by MOC issuing shares to Barclays Nominees (Branches) Limited, and the Obligors undertaking to deliver shares, in accordance with paragraph 3(a)(ii) of the Merger Waiver Letter. 7.7 TURKEY Toreador and MOCE undertake to procure that, by no later than forty-five days after Madison Turkey has received all Turkish Capital Repatriations that it is entitled to: (a) Madison Turkey shall have transferred all of its assets, liabilities, business and undertakings to MOTI and shall be wound up and dissolved; and (b) that MOTI shall have discharged in full all of the consideration for that transfer. 7.8 RESTRICTIONS UNDER BANK OF TEXAS LOAN AGREEMENT (a) Toreador undertakes to use Best Endeavours to obtain any necessary waiver of or amendment (if any) to the provisions of the Bank of Texas Loan Agreement so as to enable: (i) Toreador and the other borrowers under the Bank of Texas Loan Agreement to provide financial support to the MOC Group as set out in Schedule 2; (ii) Toreador to enter into the Toreador Guarantee; and (iii) Toreador to make any payments to the Facility Agent that may arise in accordance with paragraph 4.4 (Asset Sales Proceeds Prepayment). 13 and in the absence of such express amendment, waiver or consent of Bank of Texas, N.A., neither Toreador nor any member of the Toreador Group shall take any of these actions. (b) On obtaining such waiver to, or amendment of, the provisions of the Bank of Texas Loan Agreement as is required to enable Toreador and the other borrowers under that agreement to provide financial support to the MOC Group in accordance with paragraph 7.8(a)(i) above, Toreador shall use its best endeavours to procure that the Outstanding Target Repayments of the Loans, as defined and set out in Schedule 2 to this letter, are promptly paid to the Facility Agent. (c) On obtaining such waivers to, or amendments of, the provisions of the Bank of Texas Loan Agreement as are required to enable Toreador to enter into the Toreador Guarantee in accordance with paragraph 7.8(a)(ii) above, Toreador shall immediately: (i) enter into the Toreador Guarantee; and (ii) deliver a legal opinion from a reputable law firm in respect of all relevant jurisdictions in a form and substance satisfactory to the Facility Agent in relation to its entry into the Toreador Guarantee. (d) Except for such further consent as is required in paragraphs 4.4, 7.3 and 7.8(a), Toreador expressly confirms that the performance of its obligations under this letter does not require the consent of Bank of Texas, N.A. or, if required, such consent has been obtained. 7.9 TURKISH CAPITAL REPATRIATION MOC shall procure that the Obligors comply with their obligations under paragraph 4.3 (Turkish Capital Repatriation Prepayment). 7.10 BANK OF TEXAS LOAN AGREEMENT (a) Subject to sub-paragraph (b) below, in the event that the Bank of Texas Loan Agreement is repaid, immediately prior to such repayment Toreador agrees to notify the Facility Agent and immediately after such repayment, Toreador agrees to provide such guarantees and financial support as required by the Facility Agent. (b) Sub-paragraph (a) above will not apply in the event that Bank of Texas N.A. transfers or novates any of its interest in the Bank of Texas Loan Agreement to another entity. 8. CHARACTERISATION OF TOREADOR PAYMENTS (a) Toreador agrees that any payment made or deemed made to MOC by Toreador pursuant to this letter, the December Waiver Letter, the March Waiver Letter or the Merger Waiver letter shall be "Junior Debt" for the purposes of the Subordination and Support Agreement. MOC agrees that any payment made or deemed made by MOC to any of the Borrowers pursuant to this letter, the December Waiver Letter, the March Waiver Letter or the Merger Waiver Letter shall be "Junior Debt" for the purposes of the Subordination Agreement. (b) An amount equal to each payment made by Toreador to the Facility Agent in accordance with this letter or the December Waiver Letter and for the avoidance of 14 doubt, any amounts previously paid by Toreador under paragraph 7(b) of the Merger Waiver Letter or 12(b) of the March Waiver Letter shall be deemed to be: (i) a non-interest bearing loan made by Toreador to MOC repayable (subject to the Subordination and Support Agreement on demand (or a loan on such other terms as are agreed by MOC and Toreador (in any case subject to the Subordination and Support Agreement)); and (ii) a non-interest bearing loan made by MOC to the Borrowers repayable (subject to the Subordination Agreement on demand (or a loan on such other terms as are agreed by MOC and the Borrowers (in any case subject to the Subordination Agreement)). 9. AMENDMENT TO THE CREDIT AGREEMENT The amendments to the Credit Agreement effected by paragraph 4 of the Merger Waiver Letter and paragraph 13 of the March Waiver Letter remain effective and are restated as follows: (a) paragraph (d) in the definition of "Permitted Payment" in Clause 1.1 (Definitions) shall be deleted and shall be replaced with: "(d) [Not used];"; (b) Clause 19.25(a)(iii) (Turkish business) shall be deleted and shall be replaced with: "(iii) in any event, does not make any payment to any other member of the Toreador Group except for payment of the kind contemplated by paragraph (ii)(B) above;"; (c) for the purposes of 20.3 (Breach of other obligations), 20.4 (Misrepresentation), 20.12 (Unlawfulness), 20.13 (Effectiveness of Security), 20.22 (U.S. Bankruptcy Laws) and 20.23 (ERISA) the word "Obligor" shall be deemed to include Toreador; (d) for the purposes of Clauses 20.5 (Cross-default), 20.6 (Insolvency), 20.7 (Insolvency proceedings), 20.8 (Appointment of receivers and managers), 20.9 (Creditor's processes), 20.10 (Analogous proceedings), 20.11 (Cessation of business) and 20.17 (Litigation) the phrase "member of the Group" shall be deemed to include Toreador; (e) Clause 20.20(d) (Change of Control) shall be deleted and shall be replaced with: "(d) MOC is not, or ceases to be, a wholly-owned subsidiary of Toreador Resources Corporation; or"; and (f) a new Clause 20.20(e) (Change of Control) of the Credit Agreement shall be inserted as follows: "(e) any single person, or group of persons acting in consort (as defined in the City Code on Takeovers and Mergers) acquires control (as defined in Section 416 of the Income and Corporation Taxes Act 1998) of Toreador Resources Corporation.". 15 10. CONFIRMATIONS 10.1 GUARANTEES Each Guarantor agrees, and represents and warrants to each Finance Party as at the date it executes this letter: (a) that the arrangements contemplated by this letter, the Merger Agreement and the Voting Agreement and the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement) do not in any way affect the guarantee and undertakings given by it under Clause 15 (Guarantee); and (b) that the guarantee given by it under Clause 15 (Guarantee) is a continuing guarantee, in full force and effect, and will extend to the ultimate balance of all sums payable by the Obligors under the Finance Documents, regardless of the arrangements contemplated by this letter, the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement) and any intermediate payments or discharge in whole or in part (including, without limitation, the prepayments contemplated by this letter). 10.2 MOC MOC agrees, and represents and warrants to each Finance Party as at the date it executes this letter: (a) that the arrangements contemplated by this letter and the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement) do not in any way affect any of the Finance Documents; and (b) that its obligations under the Finance Documents are in full force and effect and are binding on, and enforceable against, MOC regardless of the arrangements contemplated by this letter or the entry into and performance of the Merger Agreement and the occurrence of the Effective Time (as defined in the Merger Agreement)). 11. REPRESENTATIONS AND WARRANTIES (a) Toreador and each Obligor makes the following representations and warranties to each Finance Party in respect of those of this letter, the Merger Agreement and the Voting Agreement to which it is a party: (i) that it has the power to enter into and perform this letter, the Merger Agreement and the Voting Agreement and it has taken all necessary action to authorise the entry into, performance and delivery of this letter, the Merger Agreement and the Voting Agreement; and (ii) that this letter, the Merger Agreement and the Voting Agreement constitutes its legal, valid and binding obligation enforceable in accordance with its terms. (b) Toreador represents and warrants as at the date it executes this letter and each time it issues a Warrant, that: 16 (i) that it has the power to enter into and perform this letter, the Warrants and the Warrant Letters and it has taken all necessary action to authorise the issue, performance and delivery of those Warrants; and (ii) this letter, the Warrants and the Warrant Letters will, when issued, constitutes its legal, valid and binding obligation enforceable in accordance with its terms. (c) Toreador and each Obligor represents and warrants that Trans-Dominion Holdings Limited, Madison (Turkey) Inc. and Madison Oil Turkey Inc. are the legal and beneficial owners of the Trinidadian Assets and the Turkish Assets respectively. 12. LEGAL FEES (a) For the avoidance of doubt, MEF acknowledges and agrees that the Facility Agent's costs and expenses incurred in connection with this letter, the Warrant Letters and any other arrangement, new agreement or document contemplated by this letter fall within Clause 23.1 (Initial and special costs), and as such, MEF shall immediately on demand pay those costs and expenses. (b) The Facility Agent confirms that the payment of the legal fees of Allen & Overy (the Facility Agent's legal adviser) incurred in relation to this letter, the Warrant Letters and any other arrangement, new agreement or document contemplated by this letter shall constitute a Permitted Payment. (c) The Obligors shall pay the Permitted Payment referred to in paragraph (b) above as soon as possible after execution of this letter from Gross Revenues to the extent any such amount is available after the payment of any other Permitted Payments (other than any referred to in paragraph (c)(i) of the definition of Permitted Payment in Clause 1.1 (Definitions)). (d) Toreador undertakes to pay the Allen & Overy Invoice by 31st March, 2003 at the latest. 13. EVENT OF DEFAULT If: (a) any of the provisions of this letter are not complied with; (b) any shares are not issued in accordance with the Warrants issued and delivered in accordance with the Warrant Letters; (c) Toreador does not issue, deliver and amend the strike price of any of the Warrants in accordance with the Warrant Letters; (d) the Merger Agreement or the Toreador Subordinated Revolving Credit Agreement is terminated; (e) the Voting Agreement is breached; 17 (f) the Forecast prepared as of 30th April, 2003 in accordance with paragraph 5 (Forecasts) of this letter indicates that the ratio of Relevant NPV to Total Indebtedness is less than 1.5:1; (g) any representation and warranty in this letter is incorrect when made or repeated; or (h) there is any breach of the repayment schedule in paragraph 4 (Repayment) of this letter; or (i) the Turkish Revenue Accounts (to the extent permitted by Turkish law) and the Trinidadian Revenue Accounts are not opened and/or Security Interests are not granted over those accounts (to the extent permitted by Turkish law with regard to the Turkish Revenue Accounts) in favour of the Facility Agent by 30th April, 2003 in accordance with the provisions of paragraph 7.4 (Turkish and Trinidadian Cashflow); then that event shall constitute an Event of Default under Clause 20 (Default) and the Finance Parties may thereafter exercise all of their rights in respect thereof under the Finance Documents. 14. DESIGNATION OF FINANCE DOCUMENTS Each of this letter, the Subordination and Support Agreement, each of the Warrants, the Warrant Letters and, if entered into in accordance with paragraph 7.8(c), the Toreador Guarantee is a Finance Document (and each is hereby designated as such by the Facility Agent and the Borrowers' Agent). 15. CONDITIONS PRECEDENT (a) The letter and the waivers set out herein shall only take effect on the date on which the Agent has received an original of this letter and the Second Warrant Letter duly executed by all parties and has received (or waived receipt of): (i) board resolutions of each of the Obligors and Toreador authorising the transactions contemplated by and execution of this letter and the Second Warrant Letter; and (ii) specimen signatures of the persons authorised to sign this letter, the Second Warrant Letter and any other documents connected to the Finance Documents on behalf of the Obligors, (all in form and substance satisfactory to the Facility Agent) (such date being the "EFFECTIVE DATE"). (b) Toreador and each Obligor represents and warrants as at the Effective Date that there is no Default outstanding. 16. OTHER PROVISIONS (a) Nothing in this letter shall affect any right of any Finance Party, or any obligation of any Obligor, except as expressly stated above, and each Obligor expressly confirms that all such rights and obligations shall continue in full force and effect except to the extent so stated. 18 (b) This letter does not create any right under the Contracts (Rights of Third Parties) Act 1999 which is enforceable by any person who is not a party to this letter. (c) The Facility Agent acknowledges that Bank of Texas, N.A. has the right to withhold any consents or approvals requested of it by Toreador in its sole discretion for any or no reason and on any or no grounds and that there is no third party beneficiary relationship between the Facility Agent and Bank of Texas, N.A. (c) Toreador acknowledges and agrees to the provisions of Clause 28.3(b) (Changes to the Parties) - Procedures for Novations) and irrevocably authorises the Facility Agent to execute any duly completed Novation Certificate on its behalf. (d) If a provision of this letter is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect: (i) the legality, validity or enforceability in that jurisdiction of any other provision of this letter; or (ii) the legality, validity or enforceability, in other jurisdictions of that or any other provision of this letter. [(e) Clauses 1.2 (Construction), 28.1 (Transfers by Obligors) and 32-37 (inclusive) shall apply to this letter as though set out in full in this letter, except that: (i) references in those Clauses to the Credit Agreement are to be construed as references to this letter; (ii) each reference to "Obligor" in Clauses 1.2 (Construction), 28.1 (Transfers by Obligors), 35 (Jurisdiction) and 37 (Waiver of Jury Trial) shall be deemed to include Toreador; and (iii) the reference to "the Guarantor" in Clause 35.2(f) (Service of Process) shall be deemed to include Toreador. Please countersign this letter (or a copy of it) where marked below to confirm your agreement to its terms. Yours faithfully, /s/ Steven Funnell - ------------------------------ ON BEHALF OF BARCLAYS BANK PLC AS FACILITY AGENT We agree with the above. 19 BORROWERS' AGENT /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: April 11, 2003 BORROWERS /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON OIL COMPANY EUROPE Date: April 11, 2003 /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON OIL FRANCE S.A. Date: April 11, 2003 /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: April 11, 2003 GUARANTORS /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON OIL COMPANY Date: April 11, 2003 /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON PETROLEUM INC Date: April 11, 2003 20 /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON OIL COMPANY EUROPE Date: April 11, 2003 /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON OIL FRANCE S.A. Date: April 11, 2003 /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON ENERGY FRANCE S.C.S. Date: April 11, 2003 /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON (TURKEY) INC Date: April 11, 2003 /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF MADISON OIL TURKEY INC Date: April 11, 2003 TOREADOR /s/ Douglas W. Weir - ----------------------------------------- ON BEHALF OF TOREADOR RESOURCES CORPORATION Date: April 11, 2003 21 SCHEDULE 1 - FORM OF CASHFLOW RECONCILIATION SOURCES OF FUNDS DESCRIPTION French Operations Turkish Operations Trinidadian Operations US (Toreador) Operations Other ============= Total USES OF FUNDS FRENCH OPEX CAPEX G&A Madison Loan Other TOTAL FRANCE TURKISH OPEX CAPEX G&A Madison Loan Other TOTAL TURKEY TRINIDADIAN OPEX CAPEX G&A Madison Loan Other TOTAL TRINIDAD US OPEX CAPEX G&A Madison Loan Other Total US (Toreador) TOTAL USES OF FUNDS 22 SCHEDULE 2 OUTSTANDING TARGET REPAYMENTS

OUTSTANDING TARGET ACTUAL TARGET REPAYMENT REPAYMENT REPAYMENTS MONTH (USD) (USD) (USD) - ----- --------- --------- ----------- November 2002 450,000 300,000 150,000 December 2002 450,000 150,000 300,000 January 2003 400,000 150,000 250,000 February 2003 500,000 400,000 100,000

EX-21.1 13 d04484exv21w1.txt EX-21.1 SUBSIDIARIES . . . EXHIBIT 21.1 TOREADOR RESOURCES CORPORATION AND SUBSIDIARIES AS OF APRIL 2002

Company Jurisdiction ------- ------------ Toreador Resources Corporation Delaware Toreador Exploration & Production Inc. Texas Tormin, Inc. Delaware Toreador Acquisition Corporation. Delaware EnergyNet.com, Inc. Texas Madison Oil Company Delaware Madison (Turkey), Inc. Delaware Madison Oil Turkey, Inc. Liberia Trinidad Exploration and Development Ltd. Trinidad Madison Petroleum, Inc. Delaware Madison Oil Company Europe Delaware Madison Oil France, S.A. France Madison Energy France SCS France Toreador Holdings International SRL Barbados Toreador Trinidad Exploration & Production Unlimited Trinidad Wilco Turkey Limited Jersey

EX-23.1 14 d04484exv23w1.txt EX-23.1 CONSENT OF ERNST & YOUNG LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITOR We consent to the incorporation by reference in the Registration Statements (Form S-8 No. 33-88475; Form S-8 No. 333-39309; Form S-8 No. 333-14145; Form S-8 No. 333-53632; Form S-8 No. 333-99959; Form S-3 No. 333-52522 and Form S-3 No. 333-65720) of Toreador Resources Corporation and of our report dated April 11, 2003, with respect to the consolidated financial statements of Toreador Resources Corporation included in this Annual Report (Form 10-K) for the year ended December 31, 2002. /s/ ERNST & YOUNG LLP Dallas, Texas April 11, 2003 EX-23.2 15 d04484exv23w2.txt EX-23.2 CONSENT OF LAROCHE PETROLEUM CONSULTANTS EXHIBIT 23.2 CONSENT OF INDEPENDENT PETROLEUM ENGINEERS As independent petroleum engineers, we hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-14145, 333-39309, 333-88475, 333-53632 and 333-99959) and on Form S-3 (Nos. 333-52522 and 333-65720) of Toreador Resources Corporation of our estimates of reserves, included in this Annual Report on Form 10-K, and to all references to our firm included in this Annual Report. /s/ EDWARD P. TRAVIS - ------------------------------------ LaRoche Petroleum Consultants, Ltd. Dallas, Texas April 15, 2003 EX-99.1 16 d04484exv99w1.txt EX-99.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, and accompanies the annual report on Form 10-K (the "Form 10-K") for the fiscal year ended December 31, 2002 of Toreador Resources Corporation (the "Issuer"). I, G. Thomas Graves III, President and Chief Executive Officer of the Issuer, certify that to my knowledge: (1) The Form 10-K fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and (2) The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Issuer at the dates and for the periods indicated. /s/ G. Thomas Graves III - ------------------------------------- G. Thomas Graves III President and Chief Executive Officer Dated: April 15, 2003 A signed original of this written statement required by Section 906 has been provided to Toreador Resources Corporation and will be retained by Toreador Resources Corporation and furnished to the Securities and Exchange Commission or its staff upon request. EX-99.2 17 d04484exv99w2.txt EX-99.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, and accompanies the annual report on Form 10-K (the "Form 10-K") for the fiscal year ended December 31, 2002 of Toreador Resources Corporation (the "Issuer"). I, Douglas W. Weir, Chief Financial Officer of the Issuer, certify that to my Knowledge: (1) The Form 10-K fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and (2) The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Issuer at the dates and for the periods indicated. /s/ Douglas W. Weir - --------------------------- Douglas W. Weir Chief Financial Officer Dated: April 15, 2003 A signed original of this written statement required by Section 906 has been provided to Toreador Resources Corporation and will be retained by Toreador Resources Corporation and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----

EX-4.5

                                                                     EXHIBIT 4.5


                          REGISTRATION RIGHTS AGREEMENT


         REGISTRATION RIGHTS AGREEMENT (this "Agreement") by and among Toreador
Resources Corporation, a Delaware corporation (the "Company"), and each of the
persons listed on the Schedule of Purchasers attached hereto (each referred to
herein as a "Purchaser" and, collectively, as the "Purchasers").

         The Company has agreed, on the terms and subject to the conditions set
forth in the Securities Purchase Agreement of even date herewith (the
"Securities Purchase Agreement"), to issue and sell to each Purchaser 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 Company's Certificate of Designation (the
"Certificate of Designation") into shares (the "Conversion Shares") of the
Company's Common Stock, par value $0.15625 per share (the "Common Stock"). In
order to induce the Purchasers to enter into the Securities Purchase Agreement,
the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended (the "Securities Act"), and under applicable
state securities laws. Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Securities Purchase
Agreement.

         In consideration of each Purchaser entering into the Securities
Purchase Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1. DEFINITIONS.

         For purposes of this Agreement, the following terms shall have the
meanings specified:

         (a) "Final Closing" shall have the meaning set forth in the Securities
Purchase Agreement;

         (b) "Holder" means any person owning or having the right to acquire
Registrable Securities, including initially each Purchaser and thereafter any
permitted assignee thereof;

         (c) "Register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement or statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act ("Rule 415") or any successor rule providing for the offering of securities
on a continuous or delayed basis ("Registration Statement"), and the declaration
or ordering of effectiveness of the Registration Statement by the Securities and
Exchange Commission (the "Commission"); and

         (d) "Registrable Securities" means the Preferred Shares, Conversion
Shares, and any other Preferred Shares or shares of Common Stock issuable
pursuant to the terms of the Preferred Stock, whether as a dividend, payment of
a redemption price or otherwise, and any shares of capital stock issued or
issuable from time to time (with any adjustments) in replacement of, in exchange
for or otherwise in respect of the Preferred Shares or the Conversion Shares,
including without limitation any securities received by a Holder in connection
with an Exchange Transaction (as defined in the Certificate of Designation).





2. REGISTRATION.

         (a) After the Final Closing, the Company shall promptly file under the
Securities Act of 1933, as amended (the "Securities Act"), the Registration
Statement so that the Registrable Securities may be sold in such manner as the
Holders thereof shall determine. In addition, the Company may elect to register
on the Registration Statement for resale shares of Common Stock and preferred
stock held by other holders. The Registration Statement shall state, to the
extent permitted by Rule 416 under the Securities Act, that it also covers such
indeterminate number of shares of Common Stock or preferred stock as may be
required to effect conversion of the Preferred Shares, to prevent dilution
resulting from stock splits, stock dividends or similar events, or by reason of
changes in the Conversion Price in accordance with the terms of the Certificate
of Designation.

         (b) The Company shall take all reasonable action necessary to cause the
Registration Statement to be declared effective as soon as practicable after
filing, but in no event later than 270 days after the initial filing and shall
maintain the effectiveness of the Registration Statement until the earlier to
occur of (i) the date on which all of the Registrable Securities have been sold
pursuant to the Registration Statement and (ii) the date on which all of the
remaining Registrable Securities (in the reasonable opinion of counsel to the
Company) may be immediately sold to the public without registration and without
regard to the amount of Registrable Securities which may be sold by a Holder
thereof at a given time (the "Registration Period").

3. OBLIGATIONS OF THE COMPANY.

         In addition to performing its obligations hereunder, including those
pursuant to Sections 2(a) and 2(b) above, the Company shall:

         (a) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to comply with the
provisions of the Securities Act or to maintain the effectiveness of the
Registration Statement during the Registration Period, or as may be reasonably
requested by a Holder in order to incorporate information concerning such Holder
or such Holder's intended method of distribution;

         (b) furnish to each Holder such number of copies of the prospectus
included in such Registration Statement, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such Holder may reasonably request in order to facilitate the disposition of
such Holder's Registrable Securities;

         (c) use all commercially reasonable efforts to register or qualify the
Registrable Securities under the securities or "blue sky" laws of such
jurisdictions within the United States as shall be reasonably requested from
time to time by a Holder, and do any and all other acts or things which may be
necessary or advisable to enable such Holder to consummate the public sale or
other disposition of the Registrable Securities in such jurisdictions; provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such jurisdiction;

         (d) notify each Holder immediately upon the occurrence of any event as
a result of which the prospectus included in such Registration Statement, as
then in effect, contains an untrue statement of material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and (except during a Blackout Period) as promptly as practicable, prepare, file
and furnish to each Holder a reasonable number



                                      -2-


of copies of a supplement or an amendment to such prospectus as may be necessary
so that such prospectus does 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 not misleading in light of the circumstances then
existing. For purposes hereof, "Blackout Period" means such day or days, not to
exceed an aggregate of thirty (30) days during any period of twelve (12)
consecutive months, with respect to which the Board of Directors of the Company
determines in good faith (A) that an amendment or supplement to the Registration
Statement or prospectus contained therein is necessary, in light of subsequent
events, in order to correct a material misstatement made therein or to include
information the absence of which would render the Registration Statement or such
prospectus materially misleading and (B) that the filing of such amendment or
supplement would result in the disclosure of information which the Company has a
bona fide business purpose for preserving as confidential; provided that the
Company shall be entitled to impose no more than three (3) Blackout Periods
during any period of twelve (12) consecutive months;

         (e) use all commercially reasonable efforts to prevent the issuance of
any stop order or other order suspending the effectiveness of such Registration
Statement and, if such an order is issued, to obtain the withdrawal thereof at
the earliest possible time and to notify each Holder of the issuance of such
order and the resolution thereof;

         (f) furnish to each Holder, on the date that such Registration
Statement becomes effective, a letter, dated such date, of outside counsel
representing the Company (and reasonably acceptable to such Holder) addressed to
such Holder, confirming the effectiveness of the Registration Statement and, to
the knowledge of such counsel, the absence of any stop order;

         (g) provide each Holder and its representatives the opportunity to
conduct a reasonable inquiry of the Company's financial and other records during
normal business hours and make available its officers, directors and employees
for questions regarding information which such Holder may reasonably request in
order to fulfill any due diligence obligation on its part; and

         (h) permit counsel for each Holder (at such Holder's expense) to review
such Registration Statement and all amendments and supplements thereto a
reasonable period of time prior to the filing thereof with the Commission.

4. OBLIGATIONS OF EACH HOLDER.

         In connection with the registration of the Registrable Securities
pursuant to the Registration Statement, each Holder shall:

         (a) furnish to the Company such information regarding itself and the
intended method of disposition of Registrable Securities as the Company shall
reasonably request in order to effect the registration thereof;

         (b) upon receipt of any notice from the Company of the happening of any
event of the kind described in Sections 3(d) or 3(e), immediately discontinue
disposition of Registrable Securities pursuant to the Registration Statement
until the filing of an amendment or supplement as described in Section 3(f) or
withdrawal of the stop order referred to in Section 3(e);

         (c) to the extent required by applicable law, deliver a prospectus to
each purchaser of Registrable Securities; and



                                      -3-


         (d) notify the Company when it has sold all of the Registrable
Securities theretofore held by it.

5. INDEMNIFICATION.

         In the event that any Registrable Securities are included in a
Registration Statement under this Agreement:

         (a) To the extent permitted by law, the Company shall indemnify and
hold harmless each Holder, the officers, directors, employees, agents and
representatives of such Holder, and each person, if any, who controls such
Holder within the meaning of the Securities Act or the Securities Exchange Act
of 1934, as amended (the "1934 Act"), against any losses, claims, damages,
liabilities or reasonable out-of-pocket expenses (whether joint or several)
(collectively, including legal or other expenses reasonably incurred in
connection with investigating or defending same, "Losses"), insofar as any such
Losses arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or (ii) the omission or alleged omission to
state therein 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. The Company will reimburse such Holder, and each such
officer, director, employee, agent, representative or controlling person for any
legal or other expenses as reasonably incurred by any such entity or person in
connection with investigating or defending any Loss; provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any Loss if
such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be obligated to
indemnify any person for any Loss to the extent that such Loss arises out of or
is based upon and in conformity with written information furnished by such
person expressly for use in such Registration Statement; and provided, further,
that the Company shall not be required to indemnify any person to the extent
that any Loss results from such person selling Registrable Securities (i) to a
person to whom there was not sent or given, at or prior to the written
confirmation of the sale of such shares, a copy of the prospectus, as most
recently amended or supplemented, if the Company has previously furnished or
made available copies thereof or (ii) during any period following written notice
by the Company to such Holder of an event described in Section 3(d) or 3(e).

         (b) To the extent permitted by law, each Holder, acting severally and
not jointly, shall indemnify and hold harmless the Company, the officers,
directors, employees, agents and representatives of the Company, and each
person, if any, who controls the Company within the meaning of the Securities
Act or the 1934 Act, against any Losses to the extent (and only to the extent)
that any such Losses arise out of or are based upon and in conformity with
written information furnished by such Holder expressly for use in such
Registration Statement; and such Holder will reimburse any legal or other
expenses as reasonably incurred by the Company and any such officer, director,
employee, agent, representative, or controlling person, in connection with
investigating or defending any such Loss; provided, however, that the foregoing
indemnity shall not apply to amounts paid in settlement of any such Loss if such
settlement is effected without the consent of such Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this Section 5(b) exceed the net purchase price of securities sold by such
Holder under the Registration Statement.

         (c) Promptly after receipt by an indemnified party under this Section 5
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 5, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have



                                      -4-


the right to participate in and to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the reasonably
incurred fees and expenses of one such counsel to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate under applicable standards of
professional conduct due to actual or potential conflicting interests between
such indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, to the extent
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
5 with respect to such action, but the omission so to deliver written notice to
the indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 5 or with respect to any
other action.

         (d) In the event that the indemnity provided in subsection (a) or (b)
of this Section 5 is unavailable or insufficient to hold harmless an indemnified
party for any reason, the Company and each Holder agree, severally and not
jointly, to contribute to the aggregate Losses to which the Company or such
Holder may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and such Holder in connection with the statements
or omissions which resulted in such Losses; provided, however, that in no case
shall such Holder be responsible for any amount in excess of the net purchase
price of securities sold by it under the Registration Statement. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by the Company or by such Holder. The
Company and each Holder agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. For purposes of this Section 5,
each person who controls a Holder within the meaning of either the Securities
Act or the Exchange Act and each officer, director, employee, agent or
representative of such Holder shall have the same rights to contribution as such
Holder, and each person who controls the Company within the meaning of either
the Securities Act or the Exchange Act and each officer, director, employee,
agent or representative of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this subsection (d).

         (e) The obligations of the Company and each Holder under this Section 5
shall survive the conversion or redemption, if any, of the Preferred Shares, the
completion of any offering of Registrable Securities pursuant to a Registration
Statement under this Agreement, or otherwise.

6. REPORTS.

         With a view to making available to each Holder the benefits of Rule 144
under the Securities Act ("Rule 144") and any other similar rule or regulation
of the Commission that may at any time permit such Holder to sell securities of
the Company to the public without registration, the Company agrees to:

         (a) make and keep public information available, as those terms are
understood and defined in Rule 144;

         (b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the 1934 Act; and



                                      -5-


         (c) furnish to such Holder, so long as such Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of Rule 144, the
Securities Act and the 1934 Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing such Holder of any rule or regulation of the Commission which permits
the selling of any such securities without registration.

7. MISCELLANEOUS.

         (a) Expenses of Registration. All expenses, other than underwriting
discounts and commissions and fees and expenses of counsel to each Holder,
incurred in connection with the registrations, filings or qualifications
described herein, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees and the fees and disbursements
of counsel for the Company shall be borne by the Company.

         (b) Amendment; Waiver. Any provision of this Agreement may be amended
only pursuant to a written instrument executed by the Company and Holders of at
least two thirds (2/3) of the Registrable Securities then issued or issuable.
Any waiver of the provisions of this Agreement may be made only pursuant to a
written instrument executed by the party against whom enforcement is sought. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each Holder, each future Holder, and the Company. The failure of any party
to exercise any right or remedy under this Agreement or otherwise, or the delay
by any party in exercising such right or remedy, shall not operate as a waiver
thereof. Provided, however, that upon the issuance of additional shares of
Series A-1 Preferred Stock subsequent to the date hereof and in accordance with
the Securities Purchase Agreement, without any further consent or acknowledgment
of the Holders party hereto, the Company may add additional holders of Series
A-1 Preferred Stock to this Agreement from time to time. Any such additional
holders joining this Agreement shall execute a signature page to this Agreement,
which signature page shall be countersigned by the Company and the original
appended to this Agreement. A photocopy of such appended signature page shall be
sent to each prior Holder party to this Agreement as soon as practicable
following the Final Closing.

         (c) 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
                  4809 Cole Avenue, Suite 108
                  Dallas, Texas 75205
                  Attn.: Chief Executive Officer
                  Fax: 214-559-3933



                                      -6-


                  with a copy to:

                  Haynes and Boone, LLP
                  901 Main Street, Suite 3100
                  Dallas, Texas 75202
                  Attn.: Janice V. Sharry
                  Tel: 214-651-5562
                  Fax: 214-651-5940

and if to any Holder, to such address as shall be designated by such Holder in
writing to the Company.

         (d) Termination. This Agreement shall terminate on the earlier to occur
of (a) the end of the Registration Period and (b) the date on which all of the
Registrable Securities have been publicly distributed; but any such termination
shall be without prejudice to (i) the parties' rights and obligations arising
from breaches of this Agreement occurring prior to such termination and (ii) the
indemnification and contribution obligations under this Agreement.

         (e) Assignment. The rights of a Holder hereunder shall be assigned
automatically to any transferee of the Preferred Shares or Registrable
Securities from such Holder as long as: (i) the Company is, within a reasonable
period of time following such transfer, furnished with written notice of the
name and address of such transferee, (ii) the transferee agrees in writing with
the Company to be bound by all of the provisions hereof and (iii) such transfer
is made in accordance with the applicable requirements of the Securities
Purchase Agreement.

         (f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed one and the same instrument. This Agreement, once
executed by a party, may be delivered to any other party hereto by facsimile
transmission.

         (g) Governing Law. This Agreement shall be governed by and construed in
accordance with 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.



                                      -7-


                 SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date indicated by their signature.


PURCHASER NAME:  H. R. Sanders, Jr.                  Dated: October 28, 2002
               ---------------------------                         ----



By: /s/ H. R. Sanders, Jr.
   ----------------------------------------------
   Name: H. R. Sanders, Jr.
   Title:
   Address: 390 CR 1526
            Morgan, TX 76671
   Facsimile: 254-622-2636



Accepted this 1st day of November, 2002.

TOREADOR RESOURCES CORPORATION



By: /s/ G. Thomas Graves III
   ----------------------------------------------
   Name:  G. Thomas Graves III
   Title: President and Chief Executive Officer



                                      -8-


                 SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date indicated by their signature.


PURCHASER NAME:  John Mark McLaughlin                Dated: October 29, 2002
               ---------------------------                         ----



By: /s/ John Mark McLaughlin
   ----------------------------------------------
   Name: John Mark McLaughlin
   Title:
   Address: 2201 Sherwood Way #201
            San Angelo, Texas 76901
   Facsimile: 915-947-4859



Accepted this 1st day of November, 2002.

TOREADOR RESOURCES CORPORATION



By: /s/ G. Thomas Graves III
   ----------------------------------------------
   Name:  G. Thomas Graves III
   Title: President and Chief Executive Officer



                                      -9-


                 SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date indicated by their signature.


PURCHASER NAME:  William I. Lee                      Dated: October 29, 2002
               ---------------------------                         ----



By: /s/ William I. Lee
   ----------------------------------------------
   Name: William I. Lee
   Title:
   Address: 4809 Cole Ave.
            Dallas, Texas 75205
   Facsimile:



Accepted this 1st day of November, 2002.

TOREADOR RESOURCES CORPORATION



By: /s/ G. Thomas Graves III
   ----------------------------------------------
   Name:  G. Thomas Graves III
   Title: President and Chief Executive Officer



                                      -10-


                 SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date indicated by their signature.


PURCHASER NAME: Herbert and Paulyne Brewer 1992 Trust    Dated: October 25, 2002
               ---------------------------                             ----



By: /s/ Herbert L. Brewer
   ----------------------------------------------
   Name: Herbert L. Brewer
   Title: Trustee
   Address:

   Facsimile:



Accepted this 1st day of November, 2002.

TOREADOR RESOURCES CORPORATION



By: /s/ G. Thomas Graves III
   ----------------------------------------------
   Name:  G. Thomas Graves III
   Title: President and Chief Executive Officer



                                      -11-


                 SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date indicated by their signature.


PURCHASER NAME:  Herbert L. Brewer                   Dated: October 25, 2002
               ---------------------------                         ----



By: /s/ Herbert L. Brewer
   ----------------------------------------------
   Name: Herbert L. Brewer
   Title:
   Address:

   Facsimile:



Accepted this 1st day of November, 2002.

TOREADOR RESOURCES CORPORATION



By: /s/ G. Thomas Graves III
   ----------------------------------------------
   Name:  G. Thomas Graves III
   Title: President and Chief Executive Officer



                                      -12-

EX-10.24

                                                                   EXHIBIT 10.24


                          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 each of the
persons listed on the Schedule of Purchasers attached hereto. Such entities or
persons (and any other persons who become a party to this Agreement subsequent
to the date of this Agreement pursuant to Section 1.1) are each referred to
herein as a "Purchaser" and, collectively, as the "Purchasers".

         The Company wishes to sell to each Purchaser, and each 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 Company has agreed to take all reasonable action necessary to
affect the registration covering the resale of the Preferred Shares and the
Conversion Shares under the Securities Act of 1933, as amended (the "Securities
Act") pursuant to a Registration Rights Agreement of even date herewith by and
among the Company and the Purchasers (the "Registration Rights Agreement"). The
sale of the Preferred Shares by the Company to the Purchasers 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.

         The Company and the Purchasers 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 each Purchaser agrees to purchase, the number of
Preferred Shares set forth below such Purchaser's name on the signature pages
hereof and at a purchase price equal to Twenty-Five Dollars ($25.00) times the
number of Preferred Shares purchased by such Purchaser (the "Purchase Price").
The Company may sell from time to time up to a maximum of $4,000,000 of
Preferred Shares, provided, however, that at least $925,000 of Preferred Shares
shall have been purchased as of the date of the first sale of Preferred Shares
pursuant to this Agreement. Notwithstanding any provision of this Agreement to
the contrary, the Company may from time to time after the date of this Agreement
sell, without any consent or acknowledgment of the Purchasers signatory hereto,
additional Preferred Shares (not to exceed the $4,000,000 limitation set forth
in the preceding sentence) pursuant to the terms of this Agreement or otherwise.
Such additional sales of Preferred Shares shall be accomplished through
execution by such Purchaser of a signature page to this Agreement and
countersignature thereof by the Company. Photocopies of such additional
signature pages shall be delivered to each other Purchaser as soon as
practicable following the last such sale (the "Final Closing"); it being
understood that the Final Closing shall occur on or prior to December 31, 2002.
Each closing of the purchase and sale of the Preferred Shares will be deemed to
occur when this Agreement and



                                       1


the other Transaction Documents (as defined below) have been executed and
delivered by the Company and each Purchaser at such closing (which delivery may
be effected by facsimile transmission), and full payment of the Purchase Price
has been made by each such Purchaser by wire transfer or immediately available
funds against physical delivery by the Company of duly executed certificates
representing the Preferred Shares purchased by such Purchaser hereunder.

         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 PURCHASERS.

         Each Purchaser, solely with respect to him, her or it, 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. If an entity, such Purchaser is duly
and validly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization with full power and
authority to purchase the Preferred Shares and to execute and deliver this
Agreement. This Agreement and the Registration Rights Agreement have been duly
and validly authorized, executed and delivered by or on behalf of such
Purchaser. This Agreement constitutes such Purchaser's valid and legally binding
obligation, enforceable in accordance with its terms.

         2.2 Accredited Investor; Investment Intent. Such 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 his, her or its 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, such 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 such Purchaser with
information regarding the business, operations and financial condition of the
Company, and has granted to such 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. Such Purchaser understands that his, her or its investment in the
Preferred Shares involves a high degree of risk. Such Purchaser has sought such
accounting, legal and tax advice as he, she or it has considered necessary to
make an informed investment decision with respect to his, her or its acquisition
of the Preferred Shares.

         2.4 Limitations on Disposition. Such Purchaser acknowledges that,
except as provided in the Registration Rights Agreement, the Securities have not
been and are not being



                                       2


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. Such 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 Purchasers
                  signatory thereto (collectively, the "Purchasers") and (iii) a
                  Registration Rights Agreement by and among the Company and the
                  Purchasers."

         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 such 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. Such 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. Such 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 each Purchaser and agrees with such 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



                                       3


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 and/or the Preferred 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 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, 2001, (ii) Quarterly Reports
on Form 10-Q for the quarters ended March 31, 2002 and June 30, 2002, (iii) all
Current Reports on Form 8-K required to be filed with the Commission since
December 31, 2001 and (iv) the Company's definitive Proxy Statement for its 2002
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).



                                       4


         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.

         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, (ii)
execution and filing of the Certificate of Designation, and (iii) 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 any Purchaser or
any affiliate of such 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 each 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 such 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



                                       5


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 any Purchaser or any affiliate of such
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
Final 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. The Company shall also
contemporaneously with the qualification, designation and listing of the
Conversion Shares seek to have the Preferred Shares listed on the Nasdaq
National Market System, subject to the Preferred Shares meeting the listing
requirements of the Nasdaq National Market System. If such Preferred Shares are
listed, the Company shall use its best efforts to maintain the designation and
quotation so long as the Preferred Shares are determined to meet any such
quotation or listing requirements.

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,



                                       6


obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. The Purchaser may assign its 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 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder are several and not joint with the
obligations of the other Purchasers hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered herewith, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of the Certificate of Designation,
this Agreement or the other Transaction Documents, and it shall not be necessary
for any other Purchaser to be joined as an additional party in any proceeding
for such purpose.

         5.4 No Reliance; Representations by Purchasers. 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.

         5.5 Injunctive Relief. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to each 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.

         5.6 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.



                                       7


         5.7 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.

         5.8 Headings. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.

         5.9 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
                  4809 Cole Avenue, Suite 108
                  Dallas, Texas 75205
                  Attn.: Chief Executive Officer
                  Fax:   214-559-3933

                  with a copy to:

                  Haynes and Boone, LLP
                  901 Main Street, Suite 3100
                  Dallas, Texas 75202
                  Attn: Janice V. Sharry
                  Tel:  214-651-5562
                  Fax:  214-651-5940

and if to any Purchaser, to such address for such Purchaser as shall appear on
the signature page hereof executed by such Purchaser, or as shall be designated
by such Purchaser in writing to the Company.

         5.10 Expenses. The Company and each Purchaser shall pay all costs and
expenses that it incurs in connection with the negotiation, execution, delivery
and performance of this Agreement.

         5.11 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 holders of at least two-thirds (2/3) of the Preferred Shares
then outstanding, 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.



                                       8


SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

         IN WITNESS WHEREOF, the undersigned have executed this Agreement.

PURCHASER NAME: Herbert L. Brewer
               -----------------------------



By:  /s/ Herbert L. Brewer                       Dated October 25, 2002
   ------------------------------------                        ---
   Name: Herbert L. Brewer
   Title:


ADDRESS:

   ------------------------------------

   ------------------------------------

   Tel:
       --------------------------------

   Fax:
       --------------------------------


Dollar Amount of Series A-1 Preferred Stock to be Purchased: $250,000
                                                              -----------



Accepted this 1st day of November, 2002.

TOREADOR RESOURCES CORPORATION



By: /s/ G. Thomas Graves III
   --------------------------------------------
   Name:  G. Thomas Graves III
   Title: President and Chief Executive Officer



                                       9


SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

         IN WITNESS WHEREOF, the undersigned have executed this Agreement.

PURCHASER NAME: Herbert and Paulyne Brewer 1992 Trust
               ---------------------------------------



By:  /s/ Herbert L. Brewer                       Dated October 25, 2002
   ------------------------------------                        ---
   Name: Herbert L. Brewer
   Title: Trustee


ADDRESS:

   ------------------------------------

   ------------------------------------

   Tel:
       --------------------------------

   Fax:
       --------------------------------


Dollar Amount of Series A-1 Preferred Stock to be Purchased: $250,000
                                                              -----------



Accepted this 1st day of November, 2002.

TOREADOR RESOURCES CORPORATION



By: /s/ G. Thomas Graves III
   --------------------------------------------
   Name:  G. Thomas Graves III
   Title: President and Chief Executive Officer



                                       10


SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

         IN WITNESS WHEREOF, the undersigned have executed this Agreement.

PURCHASER NAME: William I. Lee
               -----------------------------



By:  /s/ William I. Lee                          Dated October 29, 2002
   ------------------------------------                        ---
   Name: William I. Lee
   Title:


ADDRESS:

   4809 Cole Ave
   ------------------------------------
   Dallas, Texas 75205
   ------------------------------------

   Tel:
       --------------------------------

   Fax:
       --------------------------------


Dollar Amount of Series A-1 Preferred Stock to be Purchased: $250,000
                                                              -----------



Accepted this 1st day of November, 2002.

TOREADOR RESOURCES CORPORATION



By: /s/ G. Thomas Graves III
   --------------------------------------------
   Name:  G. Thomas Graves III
   Title: President and Chief Executive Officer



                                       11


SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

         IN WITNESS WHEREOF, the undersigned have executed this Agreement.

PURCHASER NAME: John Mark McLaughlin
               -----------------------------



By:  /s/ John Mark McLaughlin                    Dated October 29, 2002
   ------------------------------------                        ---
   Name: John Mark McLaughlin
   Title:


ADDRESS:
   2201 Sherwood Way, #201
   ------------------------------------
   San Angelo, Texas 76901
   ------------------------------------

   Tel: 915-942-0401
       --------------------------------

   Fax: 915-947-4859
       --------------------------------


Dollar Amount of Series A-1 Preferred Stock to be Purchased: $150,000
                                                              -----------



Accepted this 1st day of November, 2002.

TOREADOR RESOURCES CORPORATION



By: /s/ G. Thomas Graves III
   --------------------------------------------
   Name:  G. Thomas Graves III
   Title: President and Chief Executive Officer



                                       12


SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

         IN WITNESS WHEREOF, the undersigned have executed this Agreement.

PURCHASER NAME: H. R. Sanders, Jr.
               -----------------------------



By:  /s/ H. R. Sanders, Jr.                      Dated October 28, 2002
   ------------------------------------                        ---
   Name: H. R. Sanders, Jr.
   Title:


ADDRESS:

   390 CR 1526
   ------------------------------------
   Morgan, Texas 76871
   ------------------------------------

   Tel: (254) 622-3132
       --------------------------------

   Fax: (254) 622-2636
       --------------------------------


Dollar Amount of Series A-1 Preferred Stock to be Purchased: $25,000
                                                              ----------



Accepted this 1st day of November, 2002.

TOREADOR RESOURCES CORPORATION



By: /s/ G. Thomas Graves III
   --------------------------------------------
   Name:  G. Thomas Graves III
   Title: President and Chief Executive Officer



                                       13


                             SCHEDULE OF PURCHASERS




                                                                                        PURCHASE PRICE OF
            PURCHASER NAME                             ADDRESS                      SERIES A-1 PREFERRED STOCK
            --------------                             -------                      --------------------------
                                                                              
Herbert L. Brewer                                      2 Cedro Place                $250,000
                                                       Dallas, TX 75230

Herbert and Paulyne Brewer                             2 Cedro Place                $250,000
1992 Trust                                             Dallas, TX 75230

William L. Lee                                         4809 Cole Ave.               $250,000
                                                       Dallas, TX 75205

John Mark McLaughlin                                   2201 Sherwood Way            $150,000
                                                       #201
                                                       San Angelo, TX 76901

H.R. Sanders, Jr.                                      390 CR 1526                  $ 25,000
                                                       Morgan, TX 76671

EX-10.25

                                                                   EXHIBIT 10.25


                             SHAREHOLDERS AGREEMENT

                                     BETWEEN

                           ANGLO-AFRICAN ENERGY, INC.

                                       AND

                         TRANS-DOMINION HOLDINGS LIMITED



         THIS AGREEMENT is made and entered into as of this 1st day of August,
2000 ("Effective Date") by and between Anglo-African Energy, Inc., a corporation
organized and existing under the laws of Delaware ("AAE") and Trans-Dominion
Holdings Limited, a corporation organized and existing under the laws of the
Island of Jersey, Channel Islands, United Kingdom ("TDH"). AAE and TDH are
individually referred to as "Party" and collectively as the "Parties".

         WHEREAS, AAE and its Affiliates hold seventy-five percent (75%) and TDH
holds twenty-five percent (25%) of the issued and outstanding common stock ("TED
Shares") of Trinidad Exploration and Development Ltd. ("TED"); and

         WHEREAS, the Parties to this Agreement, together with those persons or
entities who shall acquire TED Shares after the date hereof and agree to be
bound by the terms hereof, desire to define their respective rights and
obligations as shareholders in TED.

         NOW THEREFORE, in consideration of the foregoing and of the mutual
premises, covenants and agreements contained herein, the parties hereto agree as
follows:

Article 1. Definitions

As used in this Agreement, the terms described below shall have the following
meanings:

1.1      Affiliate means a company, partnership or other legal entity which
         controls, or is controlled by or which is controlled by an entity which
         controls, a Party. Control means the ownership directly or indirectly
         of more than fifty (50) percent of the voting rights in a company,
         partnership or legal entity.

1.2      Agreed Interest Rate means interest compounded on a monthly basis, at
         the rate per annum equal to the one (1) month term, London Interbank
         Offered Rate (LIBOR rate) for U.S. dollar deposits, as published by The
         Wall Street Journal or if not published, then by the Financial Times of
         London, plus five (5) percentage points, applicable on




         the first Business Day prior to the due date of payment and thereafter
         on the first Business Day of each succeeding calendar month. If the
         aforesaid rate is contrary to any applicable usury law, the rate of
         interest to be charged shall be the maximum rate permitted by such
         applicable law.

1.3      Agreement means this agreement, together with the Exhibits attached to
         this agreement, and any extension, renewal or amendment hereof agreed
         to in writing by the Parties.

1.4      Business Day means a day on which the banks in New York, NY and London,
         England are open for business.

1.5      Contracts means the Farmout Agreements, the Joint Operating Agreement
         between Petrotrin and TED dated October   , 1999, the Licenses and
         related Deeds of Assignment and any similar agreements for the
         exploitation of petroleum in the Republic of Trinidad and Tobago
         entered into by TED during the term of this Agreement.

1.6      Dollars means dollars of the United States of America.

1.7      Farmout Agreements means the Farmout Agreements for Petrotrin's
         Contract Area and TED's Contract Area dated October   , 1999.

1.8      Government means the government of the Republic of Trinidad and Tobago
         and any political subdivision or agency or instrumentality thereof.

1.9      License or Licenses means the Exploration and Production (Public
         Petroleum Rights) Licenses No. 9610 of 1970 and No. _____ of 1999 for
         the Southwest Peninsula granted to Petrotrin and the Exploration and
         Production (Private Petroleum Rights) License dated 16 February 1996
         granted to TED by the Government entitling them to explore and exploit
         the License Area and any future Exploration and Production Licenses
         obtained by the Company during the term of this Agreement.

1.8      License Area means the surface area that is described in each of the
         Licenses as such area may vary from time to time in accordance with and
         during the term of each such License.

1.9      Petrotrin means the Petroleum Company of Trinidad and Tobago, Ltd.

1.10     Transfer shall mean to sell, assign, convey, donate, transfer or
         otherwise dispose of or to contract to do any of the foregoing.



                                       2

Article 2. Board of Directors

2.1      The Board of Directors of the Company shall consist of four directors.
         AAE shall be entitled to nominate three directors, and TDH shall be
         entitled to nominate one director. All corporate action shall be taken
         by a majority vote of the Board of Directors.

2.2      It is agreed that the initial directors shall be Peter G. Dilling,
         Duncan A. Lee, Christopher J. Ball and Joe Ciavarra.

2.3      Each Party agrees to use its best efforts to take all action necessary
         to cause the election of the directors nominated pursuant to Article
         2.1.

Article 3. Restrictions on Transfer or Encumbrance

3.1      Except as necessary to implement the provisions of Articles 10.3 and
         10.4, no Party shall Transfer any TED Shares or any right, title or
         interest therein or thereto and no purported Transfer shall be
         effective, except as provided in this Article 3.

3.2      The certificates representing the TED Shares shall have the following
         endorsement written, printed or stamped upon the face thereof:

                           "This certificate is issued subject to all the terms
                           and conditions of a Stockholders Agreement, dated as
                           of August 1, 2000 by and between the Company and all
                           of its Stockholders as of such date and this
                           certificate shall not be transferred except in
                           compliance with all of the terms and provisions of
                           said agreement, a copy of which is on file with the
                           Company, and this certificate shall, at all times,
                           remain subject to the terms and conditions thereof."

3.3      Nothing contained herein shall prohibit any Party from Transferring TED
         Shares to an Affiliate, provided such transferee agrees in writing to
         be bound by the terms of this Agreement.


3.4      Any Transfer by a Party of all or a portion of its TED Shares, whether
         directly or indirectly by assignment, merger, consolidation, or sale of
         stock, or other conveyance, other than with or to an Affiliate, shall
         be subject to the following procedure:

         (A) Once the transferor Party and a proposed transferee have fully
         negotiated the final terms and conditions of a Transfer of all or a
         portion of its TED Shares, such final terms and conditions shall be
         disclosed in detail to the other Party in a notice from the transferor.
         The other Party shall have the right to acquire the TED Shares



                                       3

         from the transferor on the same terms and conditions agreed to by the
         proposed transferee it within thirty (30) days of the transferor's
         notice, such Party delivers to all other Parties a counter-notification
         that it accepts the agreed upon terms and conditions of the transfer
         without reservations or conditions. If the other Party does not deliver
         such counter-notification, the transfer to the proposed transferee may
         be made, subject to the other provisions of this Article III, under
         terms and conditions no more favorable to the transferee than those set
         forth in the notice to the other Party, provided that the transfer
         shall be concluded within one hundred eighty (180) days from the date
         of the notice plus such reasonable additional period as may be required
         to secure Governmental approvals.

         (B) In the event that a Party's proposed Transfer of part or all of its
         TED Shares involves consideration other than cash or involves other
         properties included in a wider transaction (package deal) then the TED
         Shares (or part thereof) shall be allocated a reasonable and
         justifiable cash value by the transferor in any notification to the
         other Party.

Article 4. Voting of TED Shares

4.1      Each Party agrees to vote its respective TED Shares so as to carry out
         and make effective all of the terms and provisions of this Agreement.

4.2      All shareholder action may be taken by majority vote of the
         shareholders except for the disposition of all of the assets of TED,
         the liquidation of TED or any transactions between TED and a Party or
         any Affiliate of a Party, other than in the ordinary course of
         business. As used herein, the term "ordinary course of business" means
         any activity that is related to the exploration, production, storage,
         transportation and sale of petroleum, including without limitation, the
         acquisition of additional petroleum rights licenses or producing
         properties. For purposes of the foregoing sentence, it is understood
         and agreed by the Parties that the acquisition of petroleum rights or
         licenses from a Party or its Affiliate is not a transaction in the
         ordinary course of business. In the event of a sale of petroleum to a
         Party, such sale shall be at the current market value f.o.b. the
         delivery point. In the event that TDH disagrees with a decision of the
         majority of the shareholders, and as a result of such disagreement
         decides to exercise its rights under Article 10.3, the Parties agree
         that, to the extent practicable, TDH's beneficial interest in the
         Licenses and the Contracts shall be recognized as of the date it gives
         notice of its desire to exercise its rights under Article 10.3,
         adjusted in accordance with Article 6 for any subsequent loans or
         investments in the Company made by the Parties.

4.3      In lieu of a meeting, any Party may submit any proposal to the other
         Party for a vote by notice. Each Party shall communicate its vote by
         notice to the other parties within five (5) Business Days. Any Party
         failing to communicate its vote within the prescribed time period shall
         be deemed to have voted in favor of such proposal.



                                       4

Article 5. Indemnity

5.1      In the event that the Parties guarantee any loans on behalf of TED and
         such guarantee is joint or joint and several, then the Parties hereby
         agree to indemnity any Party who is required to make payments pursuant
         to the guarantee to the extent that it makes payments in excess of its
         proportionate share of the guaranteed amount.

5.2      It is the intent of the Parties that the participation and liability of
         any guaranteed amount as between the Parties themselves shall be in
         proportion to the respective number of issued and outstanding TED
         Shares owned by the Party.

5.3      As used herein, the term "guaranteed amount" shall mean the principal
         amount of the loan, including any interest thereon, which is jointly or
         jointly and severally guaranteed by the Parties.

Article 6. Additional Capital Contributions or Loans to TED

6.1      For purposes of this Article 6, each Party has contributed or has been
         deemed to contribute to TED the amount set forth in Exhibit A hereto.

6.2      From and after the Effective Date of this Agreement, AAE agrees to lend
         to TED such amounts and at such times as may be necessary to fund the
         work programs required under the License and the Contracts as well as
         to fund other operating expenses of TED in an aggregate amount not to
         exceed four million Dollars ($4,000,000). This loan will bear interest
         at the rate of eight percent (8%) per annum and will be repayable out
         of the proceeds of oil sales in accordance with the terms of the Loan
         Agreement attached hereto as Exhibit B.

6.3      Any additional funding that is required by TED in excess of the
         $4,000,000 referred to in Article 6.2 above shall be contributed by the
         Parties pro rata to their shareholding in TED. If one of the Parties
         fails to pay, when due, its pro rata share of the required amounts,
         such Party shall be in default under this Agreement ("Defaulting
         Party"). The non-Defaulting Party shall promptly give notice of such
         default to the Defaulting Party (the "Default Notice"). The amount not
         paid by the Defaulting Party shall bear interest from the date due
         until paid in full at the Agreed Interest Rate.

                     [REST OF PAGE INTENTIONALLY LEFT BLANK]



                                       5

6.4      If the Defaulting Party fails to remedy its default by the fifteenth
         (15th) day following the date of the Default Notice, then without
         prejudice to any other rights available to the non-Defaulting Party to
         recover amounts owing to it under this Agreement, the non-Defaulting
         Party shall have the option, exercisable at anytime thereafter, to have
         its percentage shareholding in TED recalculated as follows: The
         Defaulting Party's percentage shareholding will be reduced to that
         percentage resulting from dividing such Defaulting Party's net capital
         contributions by the aggregate net capital contributions of both the
         Defaulting and Non-Defaulting Parties. For purposes of this
         calculation, the term "net capital contributions" shall mean that
         amount shown on Exhibit A plus any additional amounts in excess of the
         $4,000,000 referred to in Article 6.2 contributed to the capital of TED
         as either loans or as equity, less the amount of any such loans which
         are repaid or the amount of any such equity which is redeemed. The
         percentage shareholding of the non-Defaulting Party shall be increased
         by a like amount.

6.5      The Parties agree that the non-Defaulting Party shall be issued such
         additional number of TED Shares as may be necessary to reflect the
         change in such non-Defaulting Party's percentage interest in the
         ownership of TED resulting from the application of the foregoing
         formula. The Defaulting Party shall, without delay, following any
         request from the non-Defaulting Party, do any and all acts required to
         be done and execute any and all documents and take such other actions
         as may be necessary in order to effect a prompt and valid issuance of
         such additional TED Shares to the non-Defaulting Party. The acceptance
         by non-Defaulting Party of any such additional TED Shares shall not
         limit any rights or remedies that the non-Defaulting Party has to
         recover any other amounts (including interest) that may be owing under
         this Agreement, the Stock Purchase Agreement executed by the Parties
         and others as of date hereof, or any of the Contracts by the Defaulting
         Party.

Article 7. Term

7.1      Except as otherwise provided in Article 7.2 below, this Agreement shall
         continue for as long as both Parties remain as shareholders in TED.

7.2      This Agreement shall automatically terminate upon the happening of any
         of the following contingencies:

         (A)      Dissolution of TED;

         (B)      The consummation of any merger or consolidation to which TED
                  is a party, unless immediately following such merger or
                  consolidation, the Parties shall own all of the voting power
                  of the outstanding capital stock of the surviving or resulting
                  company;

         (C)      The unanimous written consent of both Parties to the
                  termination of this Agreement;

         (D)      Commencement by TED of a voluntary bankruptcy which proceeding
                  results in the Parties being required to relinquish control
                  over the day to day affairs and/or operations of TED;



                                       6

         (E)      The granting of relief against TED in an involuntary
                  bankruptcy proceeding; or

         (F)      An assignment for the benefit of creditors made by TED which
                  results in the Parties being required to relinquish control
                  over the day to day affairs and/or operations of TED.

         (G)      If one or both Parties take title to their interests in the
                  Contracts and Licenses directly.

Article 8. Notices

8.1      Except as otherwise specifically provided, all notices authorized or
         required between the Parties by any of the provisions of this
         Agreement, shall be in writing, in English and delivered in person or
         by courier service or by any electronic means of transmitting written
         communications which provides written confirmation of complete
         transmission, and addressed to such Parties as designated below. Oral
         communication does not constitute notice for purposes of this
         Agreement, and telephone numbers for the Parties are listed below as a
         matter of convenience only. The originating notice given under any
         provision of this Agreement shall be deemed delivered only when
         received by the Party to whom such notice is directed, and the time for
         such Party to deliver any notice in response to such originating notice
         shall run from the date the originating notice is received. Each Party
         shall have the right to change its address at any time and/or designate
         that copies of all such notices be directed to another person at
         another address, by giving written notice thereof to the other Party.

If to Anglo-African Energy, Inc.:

         Anglo-African Energy, Inc.
         29 Queens Park West
         Port of Spain
         Trinidad, W.I.
         Attention: Peter G. Dilling
         Telephone: To be advised
         Telecopier: To be advised

With a copy to:

         Aitken Irvin Berlin & Vrooman, LLP
         2 Gannett Drive
         White Plains, NY 10604
         Telephone: 914-694-5717
         Telecopier: 914-694-1647
         Attention: Alan D. Berlin, Esq.




                                       7


If to Trans Dominion Holdings Limited:

         Trans Dominion Holdings Limited:
         Piermont House
         33/35 Pier Road
         St. Helier
         Jersey
         Channel Islands
         JE4 8QZ
         Fax: +44-1534-33536
         Attn: Jeremy Johnson

With a copy to:

         Madison Oil Company
         9400 North Central Expressway
         Suite 1209
         Dallas, Texas 75231
         Attention: J. Ciavarra
         Tel: 214-373-6000
         Fax: 214-373-6071

With a further copy to:

         Meighen Demers
         200 King Street W, Suite 1100
         Toronto, Canada M5H 3T4
         Attention: Rick Sutin
         Tel: 416-340-6021
         Fax: 416-977-5239

Article 9. Applicable Law and Dispute Resolution

9.1      This Agreement shall be governed by and construed in accordance with
         the domestic laws of the State of New York without giving effect to any
         choice or conflict of law provision or rule that would cause the
         application of the laws of any jurisdiction other than the State of New
         York.

9.2      Any dispute, controversy or claim arising out of or in relation to or
         in connection with this Agreement including without limitation any
         dispute as to the construction, validity, interpretation,
         enforceability or breach of this Agreement that is not otherwise
         resolved through negotiation shall be exclusively and finally settled
         by arbitration, and any Party may submit such a dispute, controversy or
         claim to arbitration. If the claims giving rise to the arbitration is
         the direct result of and/or is based on the identical claims submitted
         for adjudication in an arbitration arising out of an agreement to which
         one of the Parties is a party, then the claims arising under this



                                       8


         Agreement shall be submitted for adjudication in such other arbitration
         proceeding. If such is not the case, or if the arbitrators in the other
         arbitration proceeding can not or will not take jurisdiction of such
         claims, then the following provisions shall apply to any arbitration
         proceeding instituted under this Agreement.

9.3      A single arbitrator shall be appointed by unanimous consent of the
         Parties. If the Parties cannot reach agreement on an arbitrator within
         thirty (30) days of the submission of a Notice of Arbitration, the
         appointing authority shall be the American Arbitration Association,
         which shall appoint an independent arbitrator who does not have any
         financial interest in the dispute, controversy or claim.

9.4      Unless otherwise expressly agreed to in writing by the parties to the
         arbitration proceedings:

         (A) The arbitration proceedings shall be held in New York, New York;

         (B) The arbitrator shall be and remain at all times wholly independent
         and impartial;

         (C) The arbitration proceedings shall be governed by the U.S.
         Arbitration Act, 9 U.S.C. Sections 1-16, and be conducted in accordance
         with the Commercial Arbitration Rules of the American Arbitration
         Association then in effect;

         (D) Any procedural issues not determined under the arbitral rules
         selected pursuant to this Agreement shall be determined by the law of
         the place of arbitration, other than those laws which would refer the
         matter to another jurisdiction;

         (E) Each party shall be responsible for its own costs of the
         arbitration proceedings (including attorneys fees and costs); and

         (F) Judgment upon the award rendered by the arbitrator may be entered
         in any court having jurisdiction thereof.

Article 10. Miscellaneous

10.1     Unless otherwise unanimously agreed by the Parties, TED will engage
         only in exploration and production activities, including related
         storage and transportation functions.

10.2     AAE and TDH will each have the right, but not the obligation, to enter
         into other petroleum activities in Trinidad and Tobago in addition to
         the Licenses as well as non-petroleum related projects and activities,
         all exclusive of TED.

10.3     If one or both Parties wish to hold all of their interests in the
         Licenses and the Contracts directly rather than through TED, the
         Parties agree to cooperate with each other and to execute all necessary
         documentation in a timely manner to achieve such result in an
         appropriate manner consistent with applicable laws and



                                       9

         regulations, the terms of the Licenses and all necessary Government
         approvals, including without limitation, the approval of Petrotrin.

10.4.    In the event that the Parties wish to transfer an interest in TED to a
         third party (or if they hold their interests in the Licenses directly,
         an interest in the Licenses), then each Party shall reduce its interest
         either in TED or in the Licenses, as the case may be, pro-rata.

10.5     Headings and titles are for convenience or reference only and shall not
         control the construction or interpretation of any provision hereof.

10.6     The Parties agree that the management costs of TED and charges made to
         TED by the Parties or their Affiliates shall be fair and reasonable.
         All such charges shall be subject to audit by either Party at such
         Party's sole expense. If there is a disagreement with regard to the
         charges being made by one of the Parties, then the provisions of the
         Accounting Procedure of the Joint Operating Agreement shall govern.

10.7     TDH shall on request, be entitled to copies of all data of TED
         including, but not limited to, financial and accounting information,
         seismic data and interpretations, well logs and reports and any other
         technical data or reports, contracts and agreements. The Parties agree
         that the confidentiality provisions of the Joint Operating Agreement
         shall govern the use of all such information and data. The cost of
         copying any such information hereunder, shall be at the sole expense of
         TDH.

10.8     All pronouns and any variations thereof shall be deemed to refer to the
         masculine, feminine, or neuter, singular or plural, as the identity of
         the person or persons or entity or entities may require. Each defined
         term herein may be used in either the singular or plural form whether
         or not so defined.

10.9     This Agreement contains the entire agreement of the parties with
         respect to the subject matter hereof and no interpretation, change,
         termination or waiver of, or extension of time for performance under,
         any provision of the Agreement shall be binding upon any party unless
         in writing and signed by the party intended to be bound thereby.

10.10    No waiver of or failure to exercise any right under, or default or
         extension of time for performance under, any provision of this
         Agreement shall affect the right of any party to exercise any
         subsequent right under or otherwise enforce said provision or any other
         provision hereof or to exercise any right or remedy in the event of any
         other default whether or not similar.

10.11    In case any one or more of the provisions contained in this Agreement
         shall be invalid or unenforceable in any respect, the validity and
         enforceability of the remaining provisions contained herein shall not
         in any way be affected or impaired



                                       10


         thereby and the parties will attempt to agree upon a valid and
         enforceable provision which shall be a reasonable substitute for such
         invalid or unenforceable provision in light of the tenor of this
         Agreement, and, upon so agreeing, shall incorporate such substitute
         provision in this Agreement.

10.12    This Agreement may be executed in one or more counterparts, all of
         which together shall constitute a single instrument. Each counterpart
         shall constitute an original, any one of which may be introduced in
         evidence or used for any other purposes without production of its
         duplicate counterpart.

10.13    The Parties shall execute and deliver all such future instruments and
         take such other and further action as may be reasonably necessary or
         appropriate to carry out the provisions of this Agreement and the
         intention of the Parties as expressed herein.


                     [REST OF PAGE INTENTIONALLY LEFT BLANK]



                                       11


IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.


Anglo-African Energy, Inc.                  Trans-Dominion Holdings Limited


By: /s/ PETER G. DILLING                    By: /s/ J. JOSEPH CIAVARRA
   -------------------------------             ---------------------------------
Peter G. Dilling                            J. Joseph Ciavarra
President                                   Pres & CEO


LIST OF EXHIBITS

Exhibit A                     Shareholdings and Initial Capital Contributions
Exhibit B                     Loan Agreements



                                       12


                                    EXHIBIT A

                             SHAREHOLDERS AGREEMENT
                                     BETWEEN
                           ANGLO-AFRICAN ENERGY, INC.
                                       AND
                         TRANS-DOMINION HOLDING LIMITED



                                                                                         Capital Contribution For
Shareholder                                       TED Shares Owned                       Purposes of Article 6
- -----------                                       ----------------                       ------------------------
                                                                                   
Anglo-African Energy, Inc.                        7,500                                  US$3,000,000
Trans-Dominion Holdings Limited                   2,500                                  US$1,000,000




                                       13

EX-10.26

                                                                   EXHIBIT 10.26

                              CONSULTING AGREEMENT


         This Consulting Agreement (the "Agreement") is entered into by and
between Toreador Resources Corp. ("Toreador") and Richard D. Preston
("Preston"). In consideration of the mutual promises and agreements contained
herein, the parties agree as follows:

         1. Termination of Employment. Preston's employment with Toreador shall
terminate effective June 30, 2002. By executing this Consulting Agreement,
Toreador and Preston hereby waive and release each other from any and all rights
and obligations under the employment agreement between Madison Oil Co. and
Preston dated September 10, 2001. Preston shall have no right to further
compensation from Toreador following the termination of his employment, except
as provided in this Agreement.

         2. Consulting Services. On June 1, 2002, Toreador shall retain
Preston's services as a consultant for an initial period of six (6) months,
beginning on June 1, 2002 and ending on November 30, 2002. Following the initial
term, this Agreement shall automatically renew for successive one-month terms
unless, no later than ten (10) days prior to the expiration of the current term,
either party gives written notice to the other party of intent to terminate the
Agreement. During the term of this Agreement, Preston shall be available to
perform and shall perform consulting services as requested by Toreador,
including but not limited to, services related to commercial



                                      -1-


evaluations, strategic planning, mergers and acquisitions, and international
business practices and business support.

         3. Compensation. As compensation for his services as a consultant,
Toreador shall pay Preston the following:

                  A. Monthly Retainer. Preston shall receive a monthly retainer
         of Five Thousand Dollars ($5,000.00), which shall constitute Preston's
         full compensation for services rendered up to twenty-five (25) hours
         per month.

                  B. Additional Compensation. For hours worked by Preston in
         excess of twenty-five (25) per month, Toreador shall pay Preston an
         additional Two Hundred Dollars ($200.00) per hour.

                  C. Stock Options. Toreador shall grant Preston options to
         purchase twenty-five thousand (25,000) shares of Toreador common stock,
         at an exercise price of Five Dollars ($5.00) per share. The stock
         options shall be fully vested as of the date of the grant. Any
         unexercised options shall expire ten (10) years after the date of the
         grant.

                  D. Insurance. Upon the termination of his employment on June
         30, 2002, Preston will continue to participate in Toreador's group
         insurance programs at Toreador's expense during the term of this
         Agreement. Such insurance coverage will include health, dental,
         disability, life, travel and/or other insurance afforded Toreador
         employees. Upon termination of this Agreement, Preston may elect to
         continue his insurance coverage benefits through COBRA at the
         then-current level of coverage. If Preston elects COBRA continuation



                                      -2-


         coverage, Toreador shall pay the monthly COBRA premium to maintain
         Preston's insurance coverage until (a) Preston requests discontinuance
         of the coverage, (b) Preston secures other insurance coverage elsewhere
         or (c) eighteen (18) months following the termination of this
         Agreement, whichever is less.

                  E. Reimbursement Of Expenses. Toreador shall reimburse Preston
         for reasonable business expenses incurred by Preston in the performance
         of services under this Agreement, in accordance with Toreador's normal
         policies and procedures regarding reimbursement of expenses.

                  F. Computer And Printer. Upon the termination of his
         employment, Preston shall be entitled to retain the computer and
         printer provided to Preston by Toreador.

                  G. Severance Pay. Preston shall be entitled to receive
         severance pay from Toreador in the amount of One Hundred Eighty
         Thousand Dollars ($180,000.00). At Preston's option, the severance
         shall be paid in either one lump sum payable within 10 days after the
         termination of employment, or in installments payable over a time
         period designated by Preston. At Preston's option, the severance
         payment(s) may also be deferred until the year 2003.



                                      -3-


         4. Independent Contractor. In performing services under this Agreement,
Preston shall be acting as an independent contractor, and not an employee of the
Company. Preston shall be solely responsible for any taxes due as a result of
his compensation for services rendered under the terms of this Agreement.

         Executed to be effective for all purposes as of 24 June, 2002.

                                       RICHARD D. PRESTON

                                       /s/ Richard D. Preston
                                       -----------------------------------------

                                       Date: 24 June 2002
                                            ------------------------------------


                                       TOREADOR RESOURCES CORP.


                                       By: /s/ G. Thomas Graves III
                                          --------------------------------------

                                       Title: President
                                             -----------------------------------

                                       Date: June 24, 2002
                                            ------------------------------------



                                      -4-

EX-10.27

                                                                   EXHIBIT 10.27


To:      Madison Energy France S.C.S.
         (formerly Madison/Chart Energy S.C.S.) ("MEF")
         (the "BORROWERS' AGENT")

To:      Madison Oil Company Europe
         Madison Oil France S.A.
         Madison Energy France S.C.S.
         (the "BORROWERS")

To:      Madison Oil Company ("MOC")
         Madison Petroleum Inc.
         Madison Oil Company Europe
         Madison Oil France S.A.
         Madison Energy France S.C.S.
         Madison (Turkey) Inc
         Madison Oil Turkey Inc
         (the "GUARANTORS")

To:      Toreador Resources Corporation
         (the "TOREADOR")

                                                                  21 March, 2002


WAIVER AND CONSENT - VARIOUS ISSUES

We refer to the Revolving Credit Facility Agreement dated 30th March, 2001
between the Borrowers, the Guarantors, Barclays Capital as Arranger, the Banks
(as defined therein) and Barclays Bank PLC as Facility Agent, Technical Agent,
Ancillary Bank and US Security Trustee as amended (the "CREDIT AGREEMENT"). We
also refer to a waiver and consent letter dated November, 2001 relating to the
merger of MOC with Toreador (the "MERGER WAIVER LETTER").

All of the Banks, the Ancillary Bank and the Hedging Bank, have authorised the
Facility Agent to enter into this letter on their behalf.

1.       In this letter, unless otherwise defined or the context otherwise
         requires:

         (a)      terms defined or used in the Credit Agreement have the same
                  meaning in this letter;

         (b)      references to specific numbered clauses are clauses of the
                  Credit Agreement;

         (c)      references to paragraphs are, unless stated otherwise,
                  references to paragraphs of this letter;

         (d)      references to the Merger Agreement, the Voting Agreement, the
                  Toreador Subordinated Revolving Credit Agreement, the Toreador
                  Subordinated Revolving Credit Note and the Subordination and
                  Support Agreement are as each of those terms are defined in
                  the Merger Waiver Letter;




         (e)      "EQUITY ISSUE PROCEEDS" means the proceeds (whether in cash or
                  in kind) of any equity or capital issue (to include, without
                  limitation, share placement, the issue of preferred stock or
                  subordinated loan stock or any other similar instrument) (the
                  "EQUITY ISSUE");

         (f)      "EQUITY ISSUE PROCEEDS RECEIPT DATE" means the date on which
                  Toreador or any of its subsidiaries has, since the date of
                  this letter, received Equity Issue Proceeds which in aggregate
                  equal or exceed $5,000,000;

         (g)      "FRENCH PERMITTED PAYMENTS" means:

                  (i)      the costs referred to in paragraphs (a)(i) and (b) of
                           the definition of "Permitted Payment" in the Credit
                           Agreement; and

                  (ii)    any general and administrative expenditure relating to
                          any Borrowing Base Interest, Borrowing Base Petroleum
                          or Borrowing Base Asset.

          (h)     "TRINIDADIAN PERMITTED PAYMENTS" means

                  (i)      the costs referred to in paragraph (a)(i) of the
                           definition of "Permitted Payment" in the Credit
                           Agreement except that reference to Borrower Borrowing
                           Asset, Borrowing Base Petroleum or Borrowing Base
                           Interest in that definition shall be construed as a
                           reference to Trinidadian Interest, Trinidadian
                           Petroleum and Trinidadian Asset);

                  (ii)     any taxes payable by Trans Dominion Holdings Ltd; and

                  (iii)    any general and administrative expenditure relating
                           to any Trinidadian Interest, Trinidadian Petroleum
                           and Trinidadian Asset.

         (i)      "TURKISH PERMITTED PAYMENTS" means:

                  (i)      the costs referred to in paragraph (a)(i) of the
                           definition of "Permitted Payment" in the Credit
                           Agreement except that reference to Borrower Borrowing
                           Asset, Borrowing Base Petroleum or Borrowing Base
                           Interest in that definition shall be construed as a
                           reference to Turkish Interest, Turkish Petroleum and
                           Turkish Asset);

                  (ii)     any taxes payable by MOTI and Madison Turkey; and

                  (iii)    any general and administrative expenditure relating
                           to any Turkish Interest, Turkish Petroleum and
                           Turkish Asset.

         (j)      "TURKISH/TRINIDADIAN ASSET" means:

                  (i)     (A)      the Cendere oil field in Turkey;

                          (B)      the Zeynel oil field in Turkey;

                          (C)      the Boyabet oil field in Turkey; and

                          (D)      the Thrace Basin in Turkey,


                                       2




                          (each a "TURKISH ASSET"); and

                  (ii)    the Bonasse oil field in Trinidad and Tobago and the
                          related Southwest Cedros Peninsular Exploration
                          Licence (the "TRINIDADIAN ASSET");

         (k)      "TURKISH/TRINIDADIAN INTEREST" means:

                  (i)     all of the Obligors' present and future interest in a
                          Turkish Asset and all agreements, facilities or
                          insurances relative to that Turkish Asset or to
                          Turkish Petroleum (the "TURKISH INTEREST"); and

                  (ii)    all of the Obligors' present and future interest in a
                          Trinidadian Asset and all agreements, facilities or
                          insurances relative to that Trinidadian Asset or to
                          Trinidadian Petroleum (the "TRINIDADIAN INTEREST");

         (l)      "TURKISH/TRINIDADIAN PETROLEUM" means:

                  (i)     in respect of a Turkish Asset, all petroleum won and
                          saved from that Turkish Asset that accrues to the
                          Turkish Interest in that Turkish Asset (including,
                          without limitation, any such petroleum that is royalty
                          petroleum) ("TURKISH PETROLEUM"); and

                  (ii)    in respect of a Trinidadian Asset, all petroleum won
                          and saved from that Trinidadian Asset that accrues to
                          the Trinidadian Interest in that Trinidadian Asset
                          (including, without limitation, any such petroleum
                          that is royalty petroleum) ("TRINIDADIAN PETROLEUM");
                          and

         (m)      "WARRANT" means the warrants to be issued pursuant to the
                  Warrant Letter; and

         (n)      "WARRANT LETTER" means the warrant letter dated on or about
                  the date hereof between Toreador and the Arranger.

2.       Subject to the terms and conditions of this letter, Barclays Bank PLC,
         as Facility Agent confirms its consent to the merger of Toreador and
         MOC detailed in paragraph 2 of the Merger Waiver Letter and confirms
         that the Banks have agreed to waive the following Events of Default:

         (a)      the Events of Default detailed in paragraph 2 of the Merger
                  Waiver Letter;

         (b)      under paragraphs 12(f) and 12(C) of the Merger Waiver Letter
                  constituted by:

                  (i)     failure by the Obligors to deliver, in accordance with
                          paragraph 3(b) of the Merger Waiver Letter, evidence
                          satisfactory to the Facility Agent that the agreements
                          referred to in paragraph 3(b)(i) of the Merger Waiver
                          Letter have been duly executed by each party (other
                          than the Finance Parties) to the relevant agreement,
                          and a legal opinion in a form and substance
                          satisfactory to the Facility Agent in relation to each
                          of those agreements, on or before 15th January, 2002;
                          and

                  (ii)    failure by MOC to deliver, in accordance with
                          paragraph 9(a) of the Merger Waiver Letter, a
                          certified copy of each of the documents referred to
                          that paragraph within 2 Business Days of the date of
                          the Merger Waiver Letter;


                                       3




         (c)      the Event of Default detailed in paragraph 10(a) of the Merger
                  Waiver Letter; and

         (d)      under paragraph 13(b) of the Merger Waiver Letter, constituted
                  by failure by MOCE to procure, in accordance with paragraph
                  10(b) of the Merger Waiver Letter, that Madison Turkey has
                  transferred all of its assets, liabilities, business and
                  undertakings to MOTI, and that Madison Turkey has been wound
                  up and dissolved, by 15th January, 2002.

3.       The Obligors undertake to deliver to the Facility Agent, on or before
         31st March 2002:

         (a)      evidence satisfactory to the Facility Agent that the Merger
                  Agreement, the Voting Agreement, the Toreador Subordinated
                  Revolving Credit Agreement, the Toreador Subordinated
                  Revolving Credit Note and the Subordination and Support
                  Agreement have each been duly executed by each party (other
                  than the Finance Parties) to the relevant agreement; and

         (b)      a legal opinion from a reputable law firm in a form and
                  substance satisfactory to the Facility Agent in relation to
                  each of the agreements mentioned in paragraph (a) above.

4.       MOC undertakes to deliver to the Facility Agent, on or before 31st
         March 2002, a certified copy of each of the Merger Agreement, the
         Voting Agreement, the Toreador Subordinated Revolving Credit Agreement
         and the Toreador Subordinated Revolving Credit Note.

5.       MOCE undertakes to procure that, by no later than 31st October, 2002:

         (a)      Madison Turkey shall have transferred all of its assets,
                  liabilities, business and undertakings to MOTI and shall be
                  wound up and dissolved; and

         (b)      that MOTI shall have discharged in full all of the
                  consideration for that transfer.

6.       The Calculation Dates due to occur (in accordance with paragraph 6(a)
         of the Merger Waiver Letter) on 28th February, 2002 and (in accordance
         with the Credit Agreement) on 30th June, 2002 shall be consolidated and
         amended to be the earlier of:

         (a)      the date which is 21 days after the Facility Agent notifies
                  the Borrower's Agent that there has been an Event of Default
                  and that it requires a new Forecast to be prepared;

         (b)      the date which is 21 days after the date on which Toreador
                  fails to pay an amount in accordance with paragraph 12(b)
                  below;

         (c)      the date which is 21 days after the Equity Issue Proceeds
                  Receipt Date; and

         (d)      if by 10th October, 2002, none of the events in paragraphs
                  (a), (b) or (c) above have occurred, 31st October, 2002.

7.       The Repayment Dates due to occur (in accordance with paragraph 6(b)(i)
         of the Merger Waiver Letter) on 7th March, 2002 and (in accordance with
         Clause 6.1) on 7th July, 2002 shall be consolidated and amended to be:

         (a)      if paragraph 6(a), (b) or (c) above applies, 7 days after the
                  Calculation Date as determined in accordance with paragraph
                  6(a), (b) or (c) above (as the case may be); and


                                       4





         (b)      if paragraph 6(d) above applies, 7th November, 2002.

8.       If paragraph 6(a), (b) or (c) above apply, the Credit Agreement shall
         be deemed to be amended for that Calculation Date only as follows:

         (i)      the reference to "45 days" in Clause 16.2(a) (Preparation and
                  approval of Forecasts) shall be deemed to be a reference to
                  "21 days";

         (ii)     the reference to "28 days" in Clause 16.2(b) (Preparation and
                  approval of Forecasts) shall be deemed to be a reference to
                  "12 days";

         (iii)    in Clause 16.2(c) (Preparation and approval of Forecasts), the
                  words "7 days after the notification" shall be deleted and the
                  following words inserted in their place:

                  "5 days after the notification"; and

          (iv)    in Clause 16.2(c) (Preparation and approval of Forecasts), the
                  words "7 days after receipt of the draft Forecast" shall be
                  deleted and the following words inserted in their place:

                  "4 days after receipt of the draft Forecast".

 9.       (a)     For the Repayment Date arising after a Calculation Date
                  determined in accordance with paragraph 6(a), (b) and (d)
                  above only, the Credit Agreement shall be deemed to be amended
                  as follows in Clause 6.1(a)(ii)(B) (Repayment), the words "the
                  6-months' period ending on the last Calculation Date before
                  that Repayment Date" shall be deleted and the following words
                  inserted in their place:

                           "the period beginning on 31st July, 2001 and ending
                           on the last Calculation Date before that Repayment
                           Date"; and

         (b)      If, from the date of this letter until the next Calculation
                  Date, any amounts are received as contemplated under Clause
                  7.2(c) then Clause 7.2(d)(iii) (Mandatory prepayment), shall
                  be amended so that the words "the 6 months' period ending on
                  the next Calculation Date" shall be deleted and the following
                  words inserted in their place:

                           "the period beginning on 31st July, 2001 and ending
                           on the next Calculation Date".

         (c)      For the Calculation Date determined in accordance with
                  paragraph 6(c) above only, Clause 6.1 of the Credit Agreement
                  shall be deemed to be amended so that the amount the Borrowers
                  are required to repay pursuant to that Clause is the amount
                  required (if any) to ensure that Total Indebtedness does not
                  exceed the Borrowing Base Amount for the time being ("EQUITY
                  PREPAYMENT AMOUNT").

10.      (a)      Toreador undertakes in favour of the Banks and MOC to pay to
                  MOC (and for the avoidance of doubt MOC undertakes to pay to
                  the Facility Agent) and the Banks an amount equal to the
                  Equity Prepayment Amount so that the Obligors may comply with
                  their repayment obligations under the Credit Agreement (as
                  amended by this letter and in particular paragraph 9(c)
                  above).


                                       5




         (b)      Toreador agrees that any payment made to MOC pursuant to
                  paragraphs 10(a) above and 14(g) below shall be "Junior Debt"
                  for the purposes of the Subordination and Support Agreement.
                  MOC agrees that any payment made pursuant to paragraphs 10(a)
                  above and 14(g) below shall be "Junior Debt" for the purposes
                  of the Subordination Agreement dated 30th March, 2001 between
                  members of the Madison group as debtors, the Facility Agent
                  and MOF, MOC, MOCE and MPI.

11.      Paragraph 7 of the Merger Waiver Letter shall not apply on and from the
         date of this letter.

12.      (a)      Subject to paragraphs (c) and (d) below, MOC agrees not to
                  deliver a Notice of Borrowing (as that term is defined in the
                  Toreador Subordinated Revolving Credit Agreement) to Toreador
                  for an Advance (as that term is defined in the Toreador
                  Subordinated Revolving Credit Agreement) under Clauses 2.1(a)
                  and (c) of the Toreador Subordinated Revolving Credit
                  Agreement of an amount which would cause the aggregate of all
                  Advances (as that term is defined in the Toreador Subordinated
                  Revolving Credit Agreement) then outstanding to Toreador under
                  Clause 2.1(c) to exceed $2,000,000.

         (b)      Subject to paragraphs (c) and (d) below, Toreador agrees to
                  pay to the Facility Agent on each date set out in Part A of
                  Schedule 1 to this letter (each a "PAYMENT DATE") an amount
                  equal to or exceeding the amount set out opposite the relevant
                  Payment Date in Part A of Schedule 1 to this letter (each a
                  "REQUIRED PAYMENT").

         (c)      Paragraphs (a) and (b) above shall not apply after the date on
                  which a Calculation Date determined in accordance with
                  paragraph 6(a), (b), (c) or (d) above has occurred and if on
                  the Repayment Date after that Calculation Date Total
                  Indebtedness (after any payments to be made under the Finance
                  Documents on that Repayment Date have been made) does not
                  exceed the Borrowing Base Amount for the time being.

         (d)      Paragraphs (a) and (b) above shall not apply after the date on
                  which the aggregate of all amounts paid to the Facility Agent
                  in accordance with paragraph (b) above exceeds $3,000,000 less
                  amounts received by the Facility Agent up till the date of
                  this letter under the Toreador Subordinated Revolving Credit
                  Facility.

         (e)      Toreador and MOC agree that no Notice of Borrowing (as that
                  term is defined in the Toreador Subordinated Revolving Credit
                  Agreement) shall be required in respect of Required Payments.

         (f)      An amount equal to each Required Payment paid by Toreador to
                  the Facility Agent in accordance with paragraph (b) above
                  shall be deemed to be:

                  (i)      an Advance (as that term is defined in the Toreador
                           Subordinated Revolving Credit Agreement) by Toreador
                           to MOC under Clauses 2.1(a) and (b) of the Toreador
                           Subordinated Revolving Credit Agreement; and

                  (ii)     a non-interest bearing loan repayable (subject to the
                           Subordination Agreement dated 30th March, 2001
                           between the Borrowers (as Debtors), Barclays Bank PLC
                           (as Facility Agent) and MOC, Madison Oil Company
                           Europe, Madison Petroleum Inc and Madison Oil France
                           S.A. (as Junior Creditors)) on demand shall be deemed
                           to have been made by MOC to the Borrowers (or a loan
                           on such other as are terms agreed by MOC and the
                           Borrowers (in any case subject to the Subordination
                           Agreement dated 30th March, 2001 referred to above).


                                       6





         (g)      Notwithstanding Clause 7.7(e) (Miscellaneous provisions),
                  payment of each Required Payment shall be deemed to be a
                  prepayment of Loans by the Borrowers in an aggregate principal
                  amount equal to the relevant Required Payment, to be applied
                  against firstly Tranche B Loans and secondly Tranche A Loans
                  (and Clauses 7.7(b) and (c) (Miscellaneous provisions) shall
                  apply to any such prepayment).

13.      The Credit Agreement is deemed to be amended as follows:

         (a)      if the Borrowers repay or prepay any loan outstanding under
                  Tranche A or Tranche B, then the Total Commitments shall,
                  immediately upon that repayment or prepayment being made,
                  automatically be reduced by an amount equal to the principal
                  so repaid or prepaid;

         (b)      Clause 6.2 shall be amended so the words "Tranche A" is
                  inserted before "Tranche B" and the words ", but any amount
                  repaid under Tranche A may subsequently be re-borrowed on and
                  subject to the provisions of the Agreement" are deleted; and

         (c)      Clause 7.7(c) shall be amended so that the words "Any amount
                  prepaid under Tranche A may subsequently be re-borrowed on an
                  subject to the terms of this Agreement but" are deleted and
                  the words "Tranche A," are inserted before "Tranche B".

14.

         (a)      Without prejudice to the Obligors obligations under the Credit
                  Agreement, MOTI, Madison Turkey, Madison Oil Company Inc and
                  MCE shall pay, and Toreador shall procure that MOTI, Madison
                  Turkey, Madison Oil Company Inc and MCE pay:

                  (i)      the gross proceeds (without any deductions
                           whatsoever) of any disposal of Turkish/Trinidadian
                           Petroleum and Borrowing Base Petroleum;

                  (ii)     any sales tax payable on the amount referred to in
                           paragraph (i) above; and

                  (iii)   any other amount payable to MOTI, Madison Turkey,
                          Madison Oil Company Inc and MCE in respect of any
                          Turkish/Trinidadian Petroleum or any Borrowing Base
                          Petroleum, Turkish/Trinidadian Interest or Borrowing
                          Base Interest or Turkish/Trinidadian Asset or
                          Borrowing Base Asset except to the extent it is
                          payable under insurances in respect of liabilities to
                          third parties, seepage, pollution or the cost of
                          control of wells,

                  (the amounts being attributable to Borrowing Base Petroleum,
                  Borrowing Base Interest or Borrowing Base Asset being "French
                  Revenue", Turkish Petroleum, Turkish Interest and Turkish
                  Asset being "Turkish Revenue" and the amounts being
                  attributable to Trinidadian Petroleum, Trinidadian Interest
                  and Trinidadian Asset being "Trinidadian Revenue",

                  LESS

                  (A) in the case of Trinidadian Revenue, Trinidadian Permitted
                  Payments for that month ("NET TRINIDADIAN REVENUE"); and


                                       7





                  (B) in the case of Turkish Revenue, Turkish Permitted Payments
                  for that month ("NET TURKISH REVENUE"),

                  directly to the Dollar Revenue Account, unless any such amount
                  is received in another currency, in which case (where
                  applicable) MOTI, Madison Turkey, MCE and Madison Oil Company
                  Inc shall, and Toreador shall procure that MOTI, Madison
                  Turkey, MCE or Madison Oil Company Inc. shall, immediately
                  upon receipt convert that amount to Dollars and pay them
                  directly to the Dollar Revenue Account;

         (b)      The Borrowers shall on the last day of each month apply an
                  amount equal to the aggregate of French Revenue less French
                  Permitted Payments, Net Trinidadian Revenue and Net Turkish
                  Revenue received during that month paid during that month in
                  prepayment of the Loans (to be applied against first, Tranche
                  B Loans and secondly, against Tranche A Loans);

         (c)      It shall constitute an Event of Default if in any Quarter
                  Period (as specified in Schedule 3) the amounts applied in
                  prepayment of the Loans under this paragraph 14 is less than
                  the amount specified in Schedule 3 for that Quarter Period;

         (d)      The Borrowers obligations to prepay the Loans under this
                  paragraph 14 shall cease on the later to occur of the date on
                  which (i) an amount equal to the Total Minimum Cashflow Amount
                  (as referred to in Schedule 3) is applied in prepayment of the
                  Loans under and in accordance with this paragraph 14 and (ii)
                  Total Indebtedness does not exceed the Borrowing Base Amount
                  for the time being;

         (e)      paragraph (i) of Clause 19.22 (Capital expenditure), shall not
                  apply;

         (f)      the Obligors shall procure that no Obligor shall make, nor
                  incur any obligation or liability for or in respect of any
                  capital expenditure except for capital expenditure detailed in
                  Schedule 2 to this letter and then only to the extent that
                  amounts are received from Toreador to fund such expenditure in
                  accordance with paragraph (g) below;

         (g)      Toreador agrees to pay to MOC in each of the periods permitted
                  for payment referred to in Schedule 2 an amount equal to that
                  specified for such period permitted for payment. MOC shall and
                  shall procure that an amount equal to those amounts so
                  received shall be applied towards the item of expenditure to
                  which such amount relates. MOC shall provide to the Facility
                  Agent all information that it may request to verify such
                  application. MOC may request that the Facility Agent agree to
                  an amendment to the period permitted for payment if it
                  provides reasonable evidence demonstrating that an amount
                  relating an item of expenditure is not required in the
                  specified period permitted for payment;

         (h)      without limiting the Facility Agent's rights under Clause
                  19.3(d) (Borrowing Base Asset and similar information), the
                  Borrower's Agent shall supply to the Facility Agent (in
                  sufficient copies for all of the Banks unless the Facility
                  Agent agrees otherwise):

                  (i)     the information described in Clause 19.3(a)(i), (ii)
                          and (iii) (Borrowing Base Asset and similar
                          information), provided that the wording of that Clause
                          shall be deemed amended for these purposes such that
                          each reference to "Borrowing Base Asset" shall be
                          deemed to be a reference to Turkish/Trinidadian Asset;
                          and


                                       8




                  (ii)    any other information relating to a
                          Turkish/Trinidadian Asset that could change the
                          expected capital expenditures detailed in Schedule 2
                          to this letter or impose any additional material
                          liability on the Obligors; and.

         (i)      promptly deliver to the Facility Agent such information and
                  evidence as it may from time to time require in order to check
                  and verify the amount of any Turkish Revenue, Trinidadian
                  Revenue, Trinidadian Permitted Payment or Turkish Permitted
                  Payment.

15.      The Obligors agree to procure that Trans Dominion Holdings Ltd:

         (a)      promptly notifies the Facility Agent when Trans Dominion
                  Holdings Ltd enters into any agreement relating to the
                  Trinidadian Asset, the Trinidadian Interest or any Trinidadian
                  Petroleum ("RELEVANT AGREEMENT");

         (b)      after notice by the Facility Agent to the Borrower's Agent
                  that the Facility Agent requires security to be granted to it
                  for the benefit of the Finance Parties, enters into an
                  agreement granting a Security Interest over that Relevant
                  Agreement above in form and substance satisfactory to the
                  Facility Agent ("SECURITY DOCUMENT"); and

         (c)      delivers a legal opinion from a reputable law firm in respect
                  of all relevant jurisdictions in a form and substance
                  satisfactory to the Facility Agent in relation to each of the
                  Security Documents,

         and each Obligor shall do all things reasonably required by the
         Facility Agent for the granting, perfecting or protecting of any
         security intended to be granted under a Security Document.

16.      (a)      Each Guarantor agrees, and represents and warrants to each
                  Finance Party as at the date it executes this letter:

                  (i)      that the arrangements contemplated by this letter do
                           not in any way affect the guarantee and undertakings
                           given by it under Clause 15 (Guarantee); and

                  (ii)     that the guarantee given by it under Clause 15
                           (Guarantee) is a continuing guarantee, in full force
                           and effect, and will extend to the ultimate balance
                           of all sums payable by the Obligors under the Finance
                           Documents, regardless of the arrangements
                           contemplated by this letter and any intermediate
                           payments or discharge in whole or in part (including,
                           without limitation, the prepayments deemed under
                           paragraph 12(h) above).

         (b)      MOC agrees, and represents and warrants to each Finance Party
                  as at the date it executes this letter:

                  (i)      that the arrangements contemplated by this letter do
                           not in any way affect any of the Finance Documents;
                           and

                  (ii)     that its obligations under the Finance Documents are
                           in full force and effect and are binding on, and
                           enforceable against, MOC regardless of the
                           arrangements contemplated by this letter.

         (c)      Each Obligor makes the following representations and
                  warranties to each Finance Party in respect of this letter:


                                       9





                  (i)      that it has the power to enter into and perform this
                           letter and it has taken all necessary action to
                           authorise the entry into, performance and deliver of
                           this letter; and

                  (ii)     that this letter constitutes its legal, valid and
                           binding obligation enforceable in accordance with its
                           terms.

         (d)

         (i)      Toreador represents and warrants as at the date it executes
                  this letter, the Warrant Letter and each time it issues a
                  Warrant, that:

                  (A)      that it has the power to enter into and perform this
                           letter, the Warrants and the Warrant Letter and it
                           has taken all necessary action to authorise the
                           issue, performance and delivery of those Warrants;
                           and

                  (B)      this letter, the Warrants and the Warrant Letter
                           will, when issued, constitutes its legal, valid and
                           binding obligation enforceable in accordance with its
                           terms; and

         (ii)     (A)      Toreador undertakes to and shall procure that is
                           subsidiaries shall, in connection with any Equity
                           Issue, make full and proper disclosure in accordance
                           with all applicable laws and/or requirements of any
                           regulatory authority; and

                  (B)      Toreador shall not incur any expenditure in
                           connection with the Black Sea Seismic Project without
                           the Arranger's prior written consent.

         (iii)    The obligations of Toreador to make payments under and in
                  connection with this letter are absolute, irrevocable and
                  unconditional and shall not be affected by:

                  (A)      the existence of any dispute, claim, counter-claim,
                           set-off, defence or other right which Toreador may
                           have at any time against any Finance Party or MOC,
                           whether in connection herewith or otherwise;

                  (B)      the bankruptcy, insolvency, reorganisation, winding
                           up, dissolution or liquidation, or any change in the
                           status, function, control or ownership of any Obligor
                           or Toreador or the occurrence of any other proceeding
                           as a result of such bankruptcy;

                  (C)      any sale, transfer or other disposition by Toreador
                           of any direct or indirect interest it may have in any
                           Obligor; and

                  (D)      any of the obligations of Toreador under or in
                           connection with this letter being or becoming
                           illegal, invalid or unenforceable in any respect.

17.      (a)      The Borrowers shall ensure that the last day of an Interest
                  Period for one or more Loans coincides with repayments or
                  prepayments to be made under this letter, and shall select
                  Interest Periods accordingly and for this purpose (but not
                  otherwise) the Borrower may select an Interest Period of less
                  than one month; and


                                       10




         (b)      Notwithstanding any provision of this Waiver Letter and
                  without prejudice to the obligations of any Obligor to repay
                  or prepay any amount in accordance with the Credit Agreement
                  or this letter, the Borrowers may not prepay or repay any Loan
                  without the prior written consent of the Agent (acting on the
                  instructions of the Banks) if, as a result of such prepayment
                  or repayment the aggregate amount of all Loans outstanding at
                  that time would be less than $5,000,000.

18.      (a)      For the avoidance of doubt, MEF acknowledges and agrees that
                  the Facility Agent's costs and expenses incurred in connection
                  with this letter and the agreements referred to in paragraph
                  15 above fall within Clause 23.1 (Initial and special costs),
                  and as such, MEF shall immediately on demand pay those costs
                  and expenses.

         (b)      The Facility Agent confirms that the payment of the legal fees
                  of Allen & Overy (the Facility Agent's legal adviser) incurred
                  in relation to this letter or in connection with the
                  arrangements contemplated by it shall constitute a Permitted
                  Payment.

         (c)      The Obligors shall pay the Permitted Payment referred to in
                  paragraph (b) above as soon as possible after execution of
                  this letter from Gross Revenues to the extent any such amount
                  is available after the payment of any other Permitted Payments
                  have been paid (other than any referred to in paragraph (c)(i)
                  of the definition of Permitted Payment in Clause 1.1
                  (Definitions)).

         (d)      Any breach of Clause 16.2(b) (Preparation and approval of
                  Forecasts) constituted by failure of the Technical Agent to
                  notify the Borrower's Agent, not later than 28 days before the
                  Redetermination Date determined in accordance with paragraph
                  6(a) of the Merger Waiver Letter, of the Assumptions to be
                  used in the preparation of the Forecast is hereby waived.

19.      If:

         (a)      any of the provisions of this letter are not complied with;

         (b)      any shares are not issued in accordance with the Warrants
                  issued and delivered under paragraph 16 above;

         (c)      Toreador does not agree the form of warrants or pay the Cash
                  Sum as that term is defined in the Warrant Letter) on or
                  before 17th May 2002; or

         (d)      any representation and warranty in paragraph 17 above is
                  incorrect when made or repeated,

         then:

         (A)      the consent to the merger of Toreador and MOC detailed in
                  paragraph 2 of the Merger Waiver Letter shall be revoked;

         (B)      the Events of Default detailed in paragraph 2 above shall no
                  longer be waived; and

         (C)      that event shall constitute an Event of Default under Clause
                  20 (Default),

         and the Finance Parties may thereafter exercise all of their rights in
         respect thereof under the Finance Documents.

                                       11




20.      This letter, each of the Warrants and the Warrant Letter are a Finance
         Document (and each are hereby designated as such by the Facility Agent
         and the Borrowers' Agent).

21.      The letter and the waivers set out herein shall only take effect on the
         date of receipt by the Agent of each of the following documents (in
         form and substance satisfactory to the Facility Agent):

         (a)      duly executed original of the amended and restated
                  supplemental Fee Letter;

         (b)      duly executed original of the Warrant Letter; and

         (c)      an original of this letter duly executed copy of this letter
                  by all parties hereto.

22.      Nothing in this letter shall affect any right of any Finance Party, or
         any obligation of any Obligor, except as expressly stated above, and
         each Obligor expressly confirms that all such rights and obligations
         shall continue in full force and effect except to the extent so stated.

23.      This letter does not create any right under the Contracts (Rights of
         Third Parties) Act 1999 which is enforceable by any person who is not a
         party to this letter.

24.      If a provision of this letter is or becomes illegal, invalid or
         unenforceable in any jurisdiction, that shall not affect:

         (a)      the legality, validity or enforceability in that jurisdiction
                  or any other provision of this letter; or

         (b)      the legality, validity or enforceability, in other
                  jurisdictions of that or any other provision of this letter.

25.      Clauses 1.2 (Construction), 28.1 (Transfers by Obligors) and 32-37
         (inclusive) shall apply to this letter as though set out in full in
         this letter, except that:

         (a)      references in those Clauses to the Credit Agreement are to be
                  construed as references to this letter;

         (b)      each reference to "Obligor" in Clauses 1.2 (Construction),
                  28.1 (Transfers by Obligors), 35 (Jurisdiction) and 37 (Waiver
                  of Jury Trial) shall be deemed to include Toreador; and

         (c)      the reference to "the Guarantor" in Clause 35.2(f) (Service of
                  Process) shall be deemed to include Toreador.

Please countersign this letter (or a copy of it) where marked below to confirm
your agreement to its terms.

Yours faithfully,


/s/ STEVEN FUNNELL
- --------------------------------
ON BEHALF OF BARCLAYS BANK PLC
AS FACILITY AGENT


                                       12




We agree with the above.

BORROWERS' AGENT

 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date:  4/4/02



BORROWERS

 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON OIL COMPANY EUROPE
Date:  4/4/02

 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON OIL FRANCE S.A.
Date:  4/4/02

 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date:  4/4/02



GUARANTORS

 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON OIL COMPANY
Date:  4/4/02

 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON PETROLEUM INC
Date:  4/4/02


                                       13




 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON OIL COMPANY EUROPE
Date:  4/4/02


 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON OIL FRANCE S.A.
Date:  4/4/02


 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date:  4/4/02


 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON (TURKEY) INC
Date:  4/4/02


 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF MADISON OIL TURKEY INC
Date:  4/4/02



TOREADOR

 /s/ DOUGLAS W. WEIR
- ----------------------------------------------
ON BEHALF OF TOREADOR RESOURCES CORPORATION
Date:  4/4/02


                                       14





                                   SCHEDULE 1

                                     PART A

                            MINIMUM PAYMENT SCHEDULE





   PAYMENT DATE                               REQUIRED PAYMENT

                                           
   1. 28th March, 2002                        $300,000

   2. On the 28th day of each of April, May,  $200,000
      July and August, 2002

   3. On the 28th Day of each of October and  $75,000
      November, 2002

   4. On the 28th day of each of June,        An amount calculated as
      September and December, 2002            follows:

                                              TQP - A

                                              where:

                                              TQP = the total quarterly payment
                                                    for that month (as  set out
                                                    in Part B of this
                                                    Schedule); and

                                              A =   the aggregate of the amounts
                                                    paid in accordance with 2
                                                    and 3 above.



                                       15





                                     PART B

                            TOTAL QUARTERLY PAYMENTS





        MONTH                                       TOTAL QUARTERLY PAYMENT
                                                 
        June, 2002                                  $650,000

        September, 2002                             $600,000

        December, 2002                              $250,000



                                       16





                                   SCHEDULE 2

                         AUTHORISED CAPITAL EXPENDITURE




                                       PERIOD PERMITTED FOR PAYMENT

        ITEM OF                        From date of         1st April -      1st July - 30th     1st October -
        EXPENDITURE                    this letter to       30th June,       September,          31st December,
                                       31st March, 2002     2002             2002                2002
                                                                                     
        Trinidad capital expenditure         Nil            $ 650,000               Nil                 Nil

        Zeynel 15 and Cendere 19             Nil            $ 670,000         $ 150,000           $  20,000
        capital expenditure and
        seismic studies

        Thrace Basin capital                 Nil            $ 400,000         $ 660,000           $ 500,000
        expenditure

        Boyabat capital expenditure          Nil                  Nil         $ 225,000           $ 225,000

        French capital expenditure*    $ 282,875            $ 602,928         $ 346,667                 Nil



         * =  Courtney 58 new drill, CR17 re-entry, SF119 re-entry, SF47B
              re-drill, CHUR39 re-entry and CR56 re-entry.


                                       17




                                   SCHEDULE 3

                                MINIMUM CASHFLOW

                                 QUARTER PERIOD




                            1st Feb - 31st     1st April -     1st July - 30th      1st October -
                            March, 2002        30th June,      September,           31st December,
                                               2002            2002                 2002
                                                                        
        FRENCH CASHFLOW      $ 300,000         $   900,000      $   900,000         $   825,000

        TURKISH CASHFLOW     $ 450,000         $   450,000      $   450,000         $   600,000

        AGGREGATE AMOUNTS    $ 750,000         $ 1,350,000      $ 1,350,000         $ 1,425,000

        TOTAL MINIMUM
        CASHFLOW AMOUNT                                                             $ 4,875,000




                                       18

EX-10.28

                                                                   EXHIBIT 10.28

                            [On Barclays' letterhead]


To:      Madison Energy France S.C.S.
         (formerly Madison/Chart Energy S.C.S.) ("MEF")
         (the "BORROWERS' AGENT")

To:      Madison Oil Company Europe ("MOCE")
         Madison Oil France S.A. ("MOF")
         Madison Energy France S.C.S.
         (the "BORROWERS")

To:      Madison Oil Company ("MOC")
         Madison Petroleum Inc. ("MPI")
         Madison Oil Company Europe
         Madison Oil France S.A.
         Madison Energy France S.C.S.
         Madison (Turkey) Inc ("MADISON TURKEY")
         Madison Oil Turkey Inc ("MOTI")
         (the "GUARANTORS")

To:      Toreador Resources Corporation
         (the "TOREADOR")

                                                              [ ] December, 2002


WAIVER AND CONSENT - VARIOUS ISSUES

We refer to the Revolving Credit Facility Agreement dated 30th March, 2001
between the Borrowers, the Guarantors, Barclays Capital as Arranger, the Banks
(as defined therein) and Barclays Bank PLC as Facility Agent, Technical Agent,
Ancillary Bank and US Security Trustee as amended (the "CREDIT AGREEMENT"). We
also refer to a waiver and consent letter dated 8th November, 2001 relating to
the merger of MOC with Toreador (the "MERGER WAIVER LETTER") and to a waiver and
consent letter dated 21 March, 2002 relating to various issues (the "MARCH
WAIVER LETTER").

All of the Banks, the Ancillary Bank and the Hedging Bank, have authorised the
Facility Agent to enter into this letter on their behalf.

1.       INTERPRETATION

         In this letter, unless otherwise defined or the context otherwise
requires:

         (a)      terms defined or used in the Credit Agreement have the same
                  meaning in this letter;

         (b)      references to specific numbered clauses are clauses of the
                  Credit Agreement;

         (c)      references to paragraphs are, unless stated otherwise,
                  references to paragraphs of this letter;

         (d)      "EQUITY ISSUE PROCEEDS" means the proceeds (whether in cash or
                  in kind) of any equity or capital issue (to include, without
                  limitation, share placement, the issue of



                                       2


                  preferred stock or subordinated loan stock or any other
                  similar instrument) (the "EQUITY ISSUE");

         (e)      "FRENCH PERMITTED PAYMENTS" means:

                  (i)      the costs referred to in paragraphs (a)(i) and (b) of
                           the definition of "Permitted Payment" in the Credit
                           Agreement; and

                  (ii)     any general and administrative expenditure relating
                           to any Borrowing Base Interest, Borrowing Base
                           Petroleum or Borrowing Base Asset;

         (f)      "MERGER AGREEMENT" means the merger agreement dated as of 3rd
                  October, 2001 between MOC, Toreador and MOC Acquisition
                  Corporation (a wholly-owned subsidiary of Toreador) pursuant
                  to which, subject to the satisfaction of certain conditions,
                  MOC and MOC Acquisition Corporation will merge and MOC shall
                  be the surviving corporation;

         (g)      "STRATEGIC PLAN" means the strategic plan submitted to the
                  Facility Agent by Toreador on 12th December, 2002;

         (h)      "SUBORDINATION AGREEMENT" means the Subordination Agreement
                  dated 30th March, 2001 between members of the Madison Group as
                  debtors, the Facility Agent and MOF, MOC, MOCE and MPI.

         (i)      "SUBORDINATION AND SUPPORT AGREEMENT" means the subordination
                  and support agreement between Toreador, MOC and the Facility
                  Agent dated November, 2001 entered into in connection with the
                  Merger Waiver Letter;

         (j)      "SURPLUS SALES PROCEEDS" means, in relation to any US asset of
                  the Toreador Group, the net sale proceeds paid to or to the
                  order of any member of the Toreador Group from the sale of
                  that asset after deduction of any amounts thereof required by
                  the Bank of Texas to be paid to them in repayment of
                  outstanding loans to Toreador;

         (k)      "TOREADOR GROUP" means, at any time Toreador and all of its
                  Subsidiaries for the time being;

         (l)      "TOREADOR GUARANTEE" means a Toreador subordinated guarantee
                  of all of the obligations of the Obligors under the Finance
                  Documents;

         (m)      "TOREADOR SUBORDINATED REVOLVING CREDIT AGREEMENT" means the
                  subordinated revolving credit agreement dated as of 3rd
                  October, 2001 between MOC and Toreador pursuant to which
                  Toreador agrees to advance by way of loan certain monies to
                  MOC;

         (n)      "TOREADOR SUBORDINATED REVOLVING CREDIT NOTE" means the
                  subordinated revolving credit note dated as of 3rd October,
                  2001 between MOC and Toreador;

         (o)      "TRINIDADIAN PERMITTED PAYMENTS" means

                  (i)      the costs referred to in paragraph (a)(i) of the
                           definition of "Permitted Payment" in the Credit
                           Agreement except that reference to Borrower Borrowing
                           Asset, Borrowing Base Petroleum or Borrowing Base
                           Interest in



                                       3


                           that definition shall be construed as a reference to
                           Trinidadian Interest, Trinidadian Petroleum and
                           Trinidadian Asset);

                  (ii)     any taxes that are attributable to the Trinidadian
                           Asset and are payable by Trans Dominion Holdings
                           Limited or any other member of the Toreador Group;
                           and

                  (iii)    any general and administrative expenditure relating
                           to any Trinidadian Interest, Trinidadian Petroleum
                           and Trinidadian Asset;

         (p)      "TURKISH CAPITAL REPATRIATION" means any amounts paid to
                  Toreador or any Obligor in relation to the repatriation of the
                  registered capital of any member of the Toreador Group in
                  Turkey;

         (q)      "TURKISH PERMITTED PAYMENTS" means:

                  (i)      the costs referred to in paragraph (a)(i) of the
                           definition of "Permitted Payment" in the Credit
                           Agreement except that reference to Borrower Borrowing
                           Asset, Borrowing Base Petroleum or Borrowing Base
                           Interest in that definition shall be construed as a
                           reference to Turkish Interest, Turkish Petroleum and
                           Turkish Asset);

                  (ii)     any taxes payable by MOTI and Madison Turkey; and

                  (iii)    any general and administrative expenditure relating
                           to any Turkish Interest, Turkish Petroleum and
                           Turkish Asset;

         (r)      "TURKISH/TRINIDADIAN ASSET" means:

                  (i)      (A)  the Cendere oil field in Turkey;

                           (B)  the Zeynel oil field in Turkey;

                           (C)  the Boyabet oil field in Turkey; and

                           (D)  the Thrace Basin in Turkey,

                           (each a "TURKISH ASSET"); and

                  (ii)     the Bonasse oil field in Trinidad and Tobago and the
                           related Southwest Cedros Peninsular Exploration
                           Licence (the "TRINIDADIAN ASSET");

         (s)      "TURKISH/TRINIDADIAN INTEREST" means:

                  (i)      all of the Obligors' present and future interest in a
                           Turkish Asset and all agreements, facilities or
                           insurances relative to that Turkish Asset or to
                           Turkish Petroleum (the "TURKISH INTEREST"); and

                  (ii)     all of the Obligors' present and future interest in a
                           Trinidadian Asset and all agreements, facilities or
                           insurances relative to that Trinidadian Asset or to
                           Trinidadian Petroleum (the "TRINIDADIAN INTEREST");

         (t)      "TURKISH/TRINIDADIAN PETROLEUM" means:



                                       4


                  (i)      in respect of a Turkish Asset, all petroleum won and
                           saved from that Turkish Asset that accrues to the
                           Turkish Interest in that Turkish Asset (including,
                           without limitation, any such petroleum that is
                           royalty petroleum) ("TURKISH PETROLEUM"); and

                  (ii)     in respect of a Trinidadian Asset, all petroleum won
                           and saved from that Trinidadian Asset that accrues to
                           the Trinidadian Interest in that Trinidadian Asset
                           (including, without limitation, any such petroleum
                           that is royalty petroleum) ("TRINIDADIAN PETROLEUM");

         (u)      "VOTING AGREEMENT" means the voting agreement dated as of 3rd
                  October, 2001 between Toreador, Herbert L. Brewer, David M.
                  Brewer and PHD Partners, LP;

         (v)      "WARRANT" means the warrants to be issued pursuant to the
                  Warrant Letter; and

         (w)      "WARRANT LETTER" means the warrant letter dated 21st March,
                  2002 between Toreador and the Arranger, as amended.

2.       WAIVERS AND CONSENTS

2.1      WAIVER OF BREACHES OF FINANCE DOCUMENTS

         Subject to the terms and conditions of this letter, Barclays Bank PLC,
         as Facility Agent confirms that the Banks have agreed to waive the
         following breaches of the Finance Documents:

         (a)      all currently outstanding breaches of Clause 6.1 (Repayment),
                  as amended by the March Waiver Letter;

         (b)      all currently outstanding breaches of Clause 16 (Forecasts),
                  as amended by the March Waiver Letter;

         (c)      all currently outstanding breaches of Clause 19.4
                  (Notification of Default);

         (d)      all currently outstanding breaches of Clause 19.5 (Compliance
                  Certificates); and

         (e)      failure by Toreador to issue and deliver Warrants to Barclays
                  Nominees (Branches) Limited in accordance with the Warrant
                  Letter.

2.2      MERGER WAIVER AND CONSENT

         Barclays Bank PLC, as Facility Agent, consents to the merger of
         Toreador and MOC and confirms that the Banks have agreed to waive the
         following Events of Default:

         (a)      under Clauses 19.12(a) (Mergers and acquisitions) and 20.3
                  (Breach of other obligations) and Clause 20.20(d) (Change of
                  control) constituted by MOC entering into and performing the
                  Merger Agreement and the Voting Agreement and by the
                  occurrence of the Effective Time (as that term is defined in
                  the Merger Agreement);

         (b)      under Clauses 19.13 (Other Financial Indebtedness) and 20.3
                  (Breach of other obligations) constituted by MOC incurring any
                  of the indebtedness referred to in paragraph 8
                  (Characterisation of Toreador Payments) below;



                                       5


         (c)      under Clauses 19.14 (Loans) and 20.3 (Breach of other
                  obligations) constituted by MOC making loans to the Borrower
                  referred to in paragraph 8 (Characterisation of Toreador
                  Payments) below; and

         (d)      under Clauses 19.13 (Other Financial Indebtedness) and 20.3
                  (Breach of other obligations) constituted by the Borrowers
                  being deemed to have borrowed from MOC as referred to in
                  paragraph 8 (Characterisation of Toreador Payments) below.

3.       CONSOLIDATION OF WAIVER LETTERS

         Subject to the terms and conditions of this letter, Barclays Bank PLC,
         as Facility Agent, confirms that the Banks have agreed to permanently
         waive any and all Events of Default that have arisen under the Merger
         Waiver Letter and the March Waiver Letter and all the parties to this
         letter agree that the Merger Waiver Letter and the March Waiver Letter
         shall be terminated and of no further effect (save in relation to the
         waivers granted under those letters).

4.       REPAYMENT

4.1      REPAYMENT

         Clause 6.1 (Repayment) shall be suspended in accordance with paragraph
         4.2 (Term of Suspension) below and, during the term of suspension,
         shall be replaced with the following provisions:

         (a)      the Borrowers shall on the last Business Day of each month
                  commencing on 31st December, 2002 repay an amount of the Loans
                  equal to the greater of:

                  (i)      $300,000 (in the case of 31st December, 2002),
                           $150,000 (in the case of 31st January, 2003),
                           $400,000 (in the case of any other month); and

                  (ii)     the aggregate of French Revenue, Turkish Revenue and
                           Trinidadian Revenue received during that month less
                           French Permitted Payments, Turkish Permitted Payments
                           and Trinidadian Permitted Payments (as such terms are
                           defined in paragraph 7.5 (Turkish and Trinidadian
                           Revenue)) .

         (b)      Toreador agrees to pay to the Facility Agent on the last day
                  of each month an amount sufficient to ensure that the
                  Borrowers have sufficient funds to comply with their repayment
                  obligations under sub paragraph (a) above.

         (c)      Toreador and each Obligor agrees to use best endeavours to
                  procure that further amounts are applied in repayment of the
                  Loans so as to ensure that the Loans are repaid by a minimum
                  of $400,000 on the last Business Day of January, 2003,
                  $500,000 on the last Business Day of February, 2003 and March,
                  2003 and $400,000 on the last Business Day of any other month
                  (the "TARGET REPAYMENT").

         (d)      Toreador and each Obligor agrees to use best endeavours to
                  procure that, in addition to the repayments referred to in sub
                  paragraphs (a) and (c) above, the Loans are repaid as soon as
                  reasonably practicable by a further amount equal to $300,000
                  (in relation to the November, 2002 and December, 2002
                  repayments) plus any subsequent shortfalls in the Target
                  Repayment in any months.

4.2      TERM OF SUSPENSION



                                       6


         Clause 6.1 (Repayment) shall be suspended until such time as (i) the
         then applicable Forecast prepared after the date of this letter in
         accordance with Clause 16 (Forecasts) of the Credit Agreement and
         paragraph 5 (Forecasts) of this letter indicates a Relevant NPV to
         Total Indebtedness of not less than 1.5:1; and (ii) the outstanding
         Loans do not exceed the Total Commitments.

4.3      TURKISH CAPITAL REPATRIATION PREPAYMENT

         If, during the suspension of Clause 6.1 (Repayment) in accordance with
         paragraph 4.2 (Term of Suspension) above, any Obligor receives any
         Turkish Capital Repatriation, the Borrowers shall apply an amount equal
         to that Turkish Capital Repatriation (less any amount thereof that is
         reinvested in Turkey solely for the purposes of maximising future
         Turkish Capital Repatriations as detailed in the Strategic Plan) in
         prepayment of the Loans (and Clause 7.7(b) (Miscellaneous provisions)
         shall apply to any such prepayment).

4.4      ASSET SALE PROCEEDS PREPAYMENT

         If, during the suspension of Clause 6.1 of the Credit Agreement in
         accordance with paragraph 4.2 (Term of Suspension) above, any member of
         the Toreador Group sells any of its US assets, Toreador agrees to pay
         to the Facility Agent an amount equal to the Surplus Sale Proceeds and
         such payment shall be deemed to be a prepayment of Loans by the
         Borrowers in an aggregate principal amount equal to the Surplus Sale
         Proceeds (and Clause 7.7(b) (Miscellaneous provisions) shall apply to
         any such prepayment).

4.5      TRINIDADIAN ASSET SALES PREPAYMENT

         (a)      Subject to sub paragraph (b) below, if any member of the
                  Toreador Group sells or transfer any of its interest in the
                  Trinidadian Assets (either directly or indirectly, including
                  by way of share sale), Toreador agrees to pay to the Facility
                  Agent an amount equal to the net sale proceeds of such sale
                  and such payment shall be deemed to be a prepayment of Loans
                  by the Borrowers in an aggregate principal amount equal to the
                  net sale proceeds (and Clause 7.7(b) (Miscellaneous
                  provisions) shall apply to any such prepayment).

         (b)      No member of the Toreador Group will sell or transfer (either
                  directly or indirectly, including by way of share sale or
                  intra group transfer) any of its interest in the Trinidadian
                  Assets without the prior written consent of the Facility
                  Agent.

4.6      MISCELLANEOUS

         (a)      The following amendments to the Credit Agreement effected by
                  paragraph 4 of the Merger Waiver Letter and paragraph 13 of
                  the March Waiver Letter remain effective and are restated as
                  follows:

                  (i)      if the Borrowers repay or prepay any outstanding
                           Loan, then the Total Commitments shall, immediately
                           upon that repayment or prepayment being made,
                           automatically be reduced by an amount equal to the
                           principal so repaid or prepaid;

                  (ii)     Clause 6.2 shall be amended so the words "Tranche A"
                           is inserted before "Tranche B" and the words ", but
                           any amount repaid under Tranche A may



                                       7


                           subsequently be re-borrowed on and subject to the
                           provisions of the Agreement" are deleted; and

                  (iii)    Clause 7.7(c) shall be amended so that the words "Any
                           amount prepaid under Tranche A may subsequently be
                           re-borrowed on and subject to the terms of this
                           Agreement but" are deleted and the words "Tranche A,"
                           are inserted before "Tranche B";

         (b)      The Borrowers shall ensure that the last day of an Interest
                  Period for one or more Loans coincides with the date
                  repayments or prepayments are to be made under this letter,
                  and shall select Interest Periods accordingly and for this
                  purpose (but not otherwise) the Borrowers may select an
                  Interest Period of less than one month.

         (c)      Amounts prepaid in accordance with paragraphs 4.3 (Turkish
                  Capital Repatriation Prepayment) to 4.5 (Trinidadian Asset
                  Sales Prepayment) shall not be applied against or reduce the
                  repayment obligations under paragraph 4.1 (Repayment).

5.       FORECASTS

         The calculation of the Relevant NPV on each Calculation Date in
         accordance with Clause 16.1(d)(i) (General) shall be suspended for the
         duration of the suspension of Clause 6.1 (Repayment) in accordance with
         paragraph 4 (Repayment) above.

6.       INFORMATION COVENANTS

6.1      STRATEGIC PLAN

         (a)      Toreador shall by no later than 31st January, 2003 provide to
                  the Facility Agent an update of the Strategic Plan
                  incorporating the following information in reasonable detail:

                  (i)      details of the progress achieved in relation to each
                           of the four options outlined in the Strategic Plan;

                  (ii)     Toreador's assessment of the likelihood of each
                           option referred to above coming to fruition by 31st
                           March, 2003; and

                  (iii)    details of any other option being pursued by Toreador
                           with a view to restoring a Relevant NPV to Total
                           Indebtedness of not less than 1.5:1 by 31st March,
                           2003.

         (b)      Toreador shall immediately notify the Facility Agent if it
                  becomes aware that any of the four options outlined in the
                  Strategic Plan is no longer being pursued by Toreador or the
                  proposed counterparty or, as a result of any other event or
                  circumstance, is unlikely to come to fruition by 31st March,
                  2003, providing reasonable detail of the particular event or
                  circumstances and (without prejudice to sub paragraph (a)
                  above), within seven days of such notification, an updated
                  Strategic Plan.

6.2      CASHFLOW FORECASTS

         (a)      On or before 31st December, 2002, Toreador shall provide to
                  the Facility Agent a detailed cashflow forecast for all of the
                  Toreador Group's operations for 2003 and shall notify the
                  Facility Agent of any events or circumstances that are likely
                  to cause



                                       8


                  a deviation from the forecast cashflow to the extent that it
                  is likely to prevent the Borrowers complying with the
                  repayment schedule in paragraph 4.1 (Repayment) or cause
                  liquidity problems in the Toreador Group, providing details of
                  the particular events or circumstances and a revised forecast.

         (b)      Toreador shall provide to the Facility Agent, on a weekly
                  basis, a certificate signed by the Chief Financial Officer of
                  Toreador certifying that that the Toreador Group has
                  sufficient working capital to continue trading and that the
                  Toreador Group's cashflow situation is manageable.

6.3      OTHER INFORMATION

         Toreador shall promptly notify the Facility Agent:

         (a)      of the receipt by any member of the Toreador Group of any
                  Turkish Capital Repatriation (and the amount thereof that is
                  to be reinvested in Turkey solely for the purposes of
                  maximising future Turkish Capital Repatriations) or Surplus
                  Sale Proceeds; and

         (b)      if any creditor of any member of the Toreador Group takes any
                  enforcement action, or notifies any member of the Toreador
                  Group of its intention to take enforcement action, in relation
                  to any amounts owing to it.

7.       COVENANTS

7.1      CAPITAL EXPENDITURE RESTRICTIONS

         (a)      The Obligors shall procure that no Obligor shall make, nor
                  incur any obligation or liability for or in respect of any
                  capital expenditure outside of the United States except for
                  (i) capital expenditure that a prudent operator would expend
                  to maintain (rather than develop) the relevant assets; or (ii)
                  capital expenditure that is funded from free cash that is
                  available to the Toreador Group after making all of the
                  repayments to the Finance Parties contemplated under paragraph
                  4 (Repayment) of this letter and all other payments required
                  to be made to Bank of Texas.

         (b)      Toreador shall by no later than 10th January, 2003 provide to
                  the Facility Agent a capital expenditure budget for the first
                  half of 2003 for all of the Toreador Group's operations that
                  is in form and substance satisfactory to the Facility Agent.

         (c)      Toreador shall within ten days of the end of each month
                  provide to the Facility Agent a cashflow reconciliation for
                  that month for all of the members of the Toreador Group (in
                  the form of the Schedule to this letter), reconciling the
                  sources of funds and uses of funds and including details of
                  that month's capital expenditures.

         (e)      Paragraph (i) of Clause 19.22 (Capital expenditure), shall not
                  apply.

7.2      TURKISH CAPITAL REPATRIATION

         Toreador and the Obligors shall use best endeavours to maximise Turkish
         Capital Repatriation proceeds within as short a time frame as is
         reasonably practicable.

7.3      TOREADOR EQUITY ISSUES



                                       9


         (a)      Toreador shall use best endeavours to maximise Equity Issue
                  Proceeds in the period to 31st March, 2003 and shall consult
                  with the Facility Agent regarding the proportion of those
                  proceeds that are to be applied in prepayment of the Loans.

         (b)      Toreador undertakes to and shall procure that its subsidiaries
                  shall, in connection with any Equity Issue, make full and
                  proper disclosure in accordance with all applicable laws
                  and/or requirements of any regulatory authority

7.4      TOREADOR GUARANTEE

         Toreador shall, by 17th January, 2003, enter into the Toreador
         Guarantee in form and substance satisfactory to the Facility Agent and
         procure that by the same date a legal opinion relating thereto is
         delivered to the Facility Agent from a reputable law firm in form and
         substance satisfactory to the Facility Agent.

7.5      TURKISH AND TRINIDADIAN CASHFLOW

         (a)      Without prejudice to the Obligors obligations under the Credit
                  Agreement, MOTI, Madison Turkey, MOC and MCE shall pay, and
                  Toreador shall procure that MOTI, Madison Turkey, MOC and MCE
                  pay:

                  (i)      the gross proceeds (without any deductions
                           whatsoever) of any disposal of Turkish/Trinidadian
                           Petroleum and Borrowing Base Petroleum;

                  (ii)     any sales tax payable on the amount referred to in
                           paragraph (i) above; and

                  (iii)    any other amount payable to MOTI, Madison Turkey, MOC
                           and MCE in respect of any Turkish/Trinidadian
                           Petroleum or any Borrowing Base Petroleum,
                           Turkish/Trinidadian Interest or Borrowing Base
                           Interest or Turkish/Trinidadian Asset or Borrowing
                           Base Asset except to the extent it is payable under
                           insurances in respect of liabilities to third
                           parties, seepage, pollution or the cost of control of
                           wells,

                  (the amounts being attributable to Borrowing Base Petroleum,
                  Borrowing Base Interest or Borrowing Base Asset being "FRENCH
                  REVENUE", Turkish Petroleum, Turkish Interest and Turkish
                  Asset being "TURKISH REVENUE" and the amounts being
                  attributable to Trinidadian Petroleum, Trinidadian Interest
                  and Trinidadian Asset being "TRINIDADIAN REVENUE"),

                  LESS

                  (A) in the case of Trinidadian Revenue, Trinidadian Permitted
                  Payments for that month ("NET TRINIDADIAN REVENUE"); and

                  (B) in the case of Turkish Revenue, Turkish Permitted Payments
                  for that month ("NET TURKISH REVENUE"),

                  directly to the Dollar Revenue Account, unless any such amount
                  is received in another currency, in which case (where
                  applicable) MOTI, Madison Turkey, MCE and MOC shall, and
                  Toreador shall procure that MOTI, Madison Turkey, MCE or MOC
                  shall, immediately upon receipt convert that amount to Dollars
                  and pay them directly to the Dollar Revenue Account.



                                       10


         (b)      Without limiting the Facility Agent's rights under Clause
                  19.3(d) (Borrowing Base Asset and similar information), the
                  Borrower's Agent shall supply to the Facility Agent (in
                  sufficient copies for all of the Banks unless the Facility
                  Agent agrees otherwise):

                  (i)      the information described in Clause 19.3(a)(i), (ii)
                           and (iii) (Borrowing Base Asset and similar
                           information), provided that the wording of that
                           Clause shall be deemed amended for these purposes
                           such that each reference to "Borrowing Base Asset"
                           shall be deemed to be a reference to
                           Turkish/Trinidadian Asset; and

                  (ii)     any other information relating to a
                           Turkish/Trinidadian Asset that could change the
                           expected capital expenditures detailed in Schedule 2
                           to this letter or impose any additional material
                           liability on the Obligors; and.

         (c)      promptly deliver to the Facility Agent such information and
                  evidence as it may from time to time require in order to check
                  and verify the amount of any Turkish Revenue, Trinidadian
                  Revenue, Trinidadian Permitted Payment or Turkish Permitted
                  Payment.

7.6      TRANS DOMINION HOLDINGS LIMITED

         (a)      Toreador and the Obligors agree to procure that, by 31st
                  January, 2003, all of the Toreador Group's shares in Trinidad
                  Exploration and Development Limited and Trans Dominion
                  Holdings Limited are pledged to the Facility Agent on behalf
                  of the Finance Parties by way of a security agreement in form
                  and substance satisfactory to the Facility Agent and that by
                  the same date legal opinions relating thereto are delivered to
                  the Facility Agent from reputable law firms in all relevant
                  jurisdictions in each case in form and substance satisfactory
                  to the Facility Agent.

         (b)      Toreador and the Obligors agree to procure that Trans Dominion
                  Holdings Limited:

                  (i)      promptly notifies the Facility Agent when Trans
                           Dominion Holdings Limited enters into any agreement
                           relating to the Trinidadian Asset, the Trinidadian
                           Interest or any Trinidadian Petroleum ("RELEVANT
                           AGREEMENT");

                  (ii)     after notice by the Facility Agent to the Borrower's
                           Agent that the Facility Agent requires security to be
                           granted to it for the benefit of the Finance Parties,
                           enters into an agreement granting a Security Interest
                           over that Relevant Agreement above in form and
                           substance satisfactory to the Facility Agent
                           ("SECURITY Document"); and

                  (iii)    delivers a legal opinion from a reputable law firm in
                           respect of all relevant jurisdictions in a form and
                           substance satisfactory to the Facility Agent in
                           relation to each of the Security Documents,

                  and each Obligor shall do all things reasonably required by
                  the Facility Agent for the granting, perfecting or protecting
                  of any security intended to be granted under a Security
                  Document.

7.7      THE MERGER AGREEMENT

         (a)      MOC undertakes not to agree to any waiver, amendment,
                  termination or cancellation of, or of any term of, the Merger
                  Agreement or the Voting Agreement.



                                       11


(b)               Toreador agrees to waive any default, event of default or
                  breach of representation or warranty under the Merger
                  Agreement, the Voting Agreement, the Toreador Subordinated
                  Revolving Credit Agreement and the Toreador Subordinated
                  Revolving Credit Note constituted by MOC issuing shares to
                  Barclays Nominees (Branches) Limited, and the Obligors
                  undertaking to deliver shares, in accordance with paragraph
                  3(a)(ii) of the Merger Waiver Letter.

7.8      TURKEY

         Toreador and MOCE undertake to procure that, by no later than forty
         five days after Madison Turkey has received all Turkish Capital
         Repatriations that it is entitled to:

         (a)      Madison Turkey shall have transferred all of its assets,
                  liabilities, business and undertakings to MOTI and shall be
                  wound up and dissolved; and

         (b)      that MOTI shall have discharged in full all of the
                  consideration for that transfer.

8.       CHARACTERISATION OF TOREADOR PAYMENTS

         (a)      Toreador agrees that any payment made or deemed made to MOC by
                  Toreador pursuant to this letter, the March Waiver Letter or
                  the Merger Waiver letter shall be "Junior Debt" for the
                  purposes of the Subordination and Support Agreement. MOC
                  agrees that any payment made or deemed made by MOC to any of
                  the Borrowers pursuant to this letter, the March Waiver Letter
                  or the Merger Waiver Letter shall be "Junior Debt" for the
                  purposes of the Subordination Agreement.

         (b)      An amount equal to each payment made by Toreador to the
                  Facility Agent in accordance with this letter and for the
                  avoidance of doubt, any amounts previously paid by Toreador
                  under paragraph 7(b) of the Merger Waiver Letter or 12(b) of
                  the March Waiver Letter shall be deemed to be

                  (i)      a non-interest bearing loan made by Toreador to MOC
                           repayable (subject to the Subordination and Support
                           Agreement on demand (or a loan on such other terms as
                           are agreed by MOC and Toreador (in any case subject
                           to the Subordination and Support Agreement)); and

                  (ii)     a non-interest bearing loan made by MOC to the
                           Borrowers repayable (subject to the Subordination
                           Agreement on demand (or a loan on such other terms as
                           are agreed by MOC and the Borrowers (in any case
                           subject to the Subordination Agreement)).

         (c)      The obligations of Toreador to make payments under and in
                  connection with this letter are absolute, irrevocable and
                  unconditional and shall not be affected by:

                  (i)      the existence of any dispute, claim, counter-claim,
                           set-off, defence or other right which Toreador may
                           have at any time against any Finance Party or MOC,
                           whether in connection herewith or otherwise;

                  (ii)     the bankruptcy, insolvency, reorganisation, winding
                           up, dissolution or liquidation, or any change in the
                           status, function, control or ownership of any



                                       12



                           Obligor or Toreador or the occurrence of any other
                           proceeding as a result of such bankruptcy;

                  (iii)    any sale, transfer or other disposition by Toreador
                           of any direct or indirect interest it may have in any
                           Obligor; and

                  (iv)     any of the obligations of Toreador under or in
                           connection with this letter being or becoming
                           illegal, invalid or unenforceable in any respect.

9.       AMENDMENT TO THE CREDIT AGREEMENT

         The amendments to the Credit Agreement effected by paragraph 4 of the
         Merger Waiver Letter and paragraph 13 of the March Waiver Letter remain
         effective and are restated as follows:

         (a)      paragraph (d) in the definition of "Permitted Payment" in
                  Clause 1.1 (Definitions) shall be deleted and shall be
                  replaced with:

                  "(d)     [Not used];";

         (b)      Clause 19.25(a)(iii) (Turkish business) shall be deleted and
                  shall be replaced with:

                  "(iii)   in any event, does not make any payment to any other
                           member of the Toreador Group except for payment of
                           the kind contemplated by paragraph (ii)(B) above;";

         (c)      for the purposes of 20.3 (Breach of other obligations), 20.4
                  (Misrepresentation), 20.12 (Unlawfulness), 20.13
                  (Effectiveness of Security), 20.22 (U.S. Bankruptcy Laws) and
                  20.23 (ERISA) the word "Obligor" shall be deemed to include
                  Toreador;

         (d)      for the purposes of Clauses 20.5 (Cross-default), 20.6
                  (Insolvency), 20.7 (Insolvency proceedings), 20.8 (Appointment
                  of receivers and managers), 20.9 (Creditor's processes), 20.10
                  (Analogous proceedings), 20.11 (Cessation of business) and
                  20.17 (Litigation) the phrase "member of the Group" shall be
                  deemed to include Toreador;

         (e)      Clause 20.20(d) (Change of Control) shall be deleted and shall
                  be replaced with:

                  "(d)     MOC is not, or ceases to be, a wholly-owned
                           subsidiary of Toreador Resources Corporation; or";
                           and

         (f)      a new Clause 20.20(e) (Change of Control) of the Credit
                  Agreement shall be inserted as follows:

                  "(e)     any single person, or group of persons acting in
                           consort (as defined in the City Code on Takeovers and
                           Mergers) acquires control (as defined in Section 416
                           of the Income and Corporation Taxes Act 1998) of
                           Toreador Resources Corporation.".

10.      CONFIRMATIONS

10.1     GUARANTEES



                                       13


         Each Guarantor agrees, and represents and warrants to each Finance
         Party as at the date it executes this letter:

         (a)      that the arrangements contemplated by this letter, the Merger
                  Agreement and the Voting Agreement and the entry into and
                  performance of the Merger Agreement and the occurrence of the
                  Effective Time (as defined in the Merger Agreement) do not in
                  any way affect the guarantee and undertakings given by it
                  under Clause 15 (Guarantee); and

         (b)      that the guarantee given by it under Clause 15 (Guarantee) is
                  a continuing guarantee, in full force and effect, and will
                  extend to the ultimate balance of all sums payable by the
                  Obligors under the Finance Documents, regardless of the
                  arrangements contemplated by this letter, the entry into and
                  performance of the Merger Agreement and the occurrence of the
                  Effective Time (as defined in the Merger Agreement) and any
                  intermediate payments or discharge in whole or in part
                  (including, without limitation, the prepayments contemplated
                  by this letter).

10.2     MOC

         MOC agrees, and represents and warrants to each Finance Party as at the
         date it executes this letter:

         (a)      that the arrangements contemplated by this letter and the
                  entry into and performance of the Merger Agreement and the
                  occurrence of the Effective Time (as defined in the Merger
                  Agreement) do not in any way affect any of the Finance
                  Documents; and

         (b)      that its obligations under the Finance Documents are in full
                  force and effect and are binding on, and enforceable against,
                  MOC regardless of the arrangements contemplated by this letter
                  or the entry into and performance of the Merger Agreement and
                  the occurrence of the Effective Time (as defined in the Merger
                  Agreement)).

11.      REPRESENTATIONS AND WARRANTIES

         (a)      Toreador and each Obligor makes the following representations
                  and warranties to each Finance Party in respect of those of
                  this letter, the Merger Agreement and the Voting Agreement to
                  which it is a party:

                  (i)      that it has the power to enter into and perform this
                           letter, the Merger Agreement and the Voting Agreement
                           and it has taken all necessary action to authorise
                           the entry into, performance and delivery of this
                           letter, the Merger Agreement and the Voting
                           Agreement; and

                  (ii)     that this letter, the Merger Agreement and the Voting
                           Agreement constitutes its legal, valid and binding
                           obligation enforceable in accordance with its terms.

         (b)      Toreador represents and warrants as at the date it executes
                  this letter, the Toreador Guarantee and each time it issues a
                  Warrant, that:

                  (i)      that it has the power to enter into and perform this
                           letter, the Toreador Guarantee, the Warrants and the
                           Warrant Letter and it has taken all necessary action
                           to authorise the issue, performance and delivery of
                           those Warrants; and



                                       14


                  (ii)     this letter, the Toreador Guarantee, the Warrants and
                           the Warrant Letter will, when issued, constitutes its
                           legal, valid and binding obligation enforceable in
                           accordance with its terms.

12.      WARRANTS

         Toreador and the Arranger confirms and agrees that:

         (a)      the Warrant Letter shall be amended such that the date for
                  delivery and issue of the Warrants under paragraphs 1 and 2 of
                  the Warrant Letter shall be 31st December, 2002 and Toreador
                  shall issue the warrant to Barclays Nominees (Branches)
                  Limited or such other person or persons as the Facility Agent
                  may require;

         (b)      each Warrant shall be in such form as the Facility Agent may
                  require (acting reasonably);

         (c)      as amended by sub paragraph (a) above, the Warrant Letter
                  remains in full force and effect.

13.      LEGAL FEES

         (a)      For the avoidance of doubt, MEF acknowledges and agrees that
                  the Facility Agent's costs and expenses incurred in connection
                  with this letter, the Warrant Letter, the Toreador Guarantee
                  and any other arrangement, new agreement or document
                  contemplated by this letter fall within Clause 23.1 (Initial
                  and special costs), and as such, MEF shall immediately on
                  demand pay those costs and expenses.

         (b)      The Facility Agent confirms that the payment of the legal fees
                  of Allen & Overy (the Facility Agent's legal adviser) incurred
                  in relation to this letter, the Warrant Letter, the Toreador
                  Guarantee and any other arrangement, new agreement or document
                  contemplated by this letter shall constitute a Permitted
                  Payment.

         (c)      The Obligors shall pay the Permitted Payment referred to in
                  paragraph (b) above as soon as possible after execution of
                  this letter from Gross Revenues to the extent any such amount
                  is available after the payment of any other Permitted Payments
                  (other than any referred to in paragraph (c)(i) of the
                  definition of Permitted Payment in Clause 1.1 (Definitions)).

14.      EVENT OF DEFAULT

         If:

         (a)      any of the provisions of this letter are not complied with;

         (b)      any shares are not issued in accordance with the Warrants
                  issued and delivered in accordance with the Warrant Letter;

         (c)      Toreador does not issue and deliver any of the Warrants on or
                  before 20th December, 2002;

         (d)      the Merger Agreement or the Toreador Subordinated Revolving
                  Credit Agreement is terminated;



                                       15


         (e)      the Voting Agreement is breached;

         (f)      the Facility Agent is not satisfied with the substance of any
                  update or notification provided to it under paragraph 6.1
                  (Strategic Plan);

         (g)      Clause 6.1 of the Credit Agreement is not reinstated by 31st
                  March, 2003 in accordance with paragraph 4.2 (Term of
                  Suspension);

         (h)      any representation and warranty in this letter is incorrect
                  when made or repeated; or

         (i)      there is any breach of the repayment schedule in paragraph 4
                  (Repayment) of this letter,

         then that event shall constitute an Event of Default under Clause 20
         (Default) and the Finance Parties may thereafter exercise all of their
         rights in respect thereof under the Finance Documents.

15.      DESIGNATION OF FINANCE DOCUMENTS

         This letter, the Toreador Guarantee, the Subordination and Support
         Agreement, each of the Warrants and the Warrant Letter are a Finance
         Document (and each is hereby designated as such by the Facility Agent
         and the Borrowers' Agent).

16.      CONDITIONS PRECEDENT

         (a)      The letter and the waivers set out herein shall only take
                  effect on the date on which the Agent has received an original
                  of this letter duly executed by all parties and has received
                  (or waived receipt of):

                  (i)      board resolutions of each of the Obligors and
                           Toreador authorising the transactions contemplated by
                           and execution of this letter; and

                  (ii)     specimen signatures of the persons authorised to sign
                           this letter and any other documents connected to the
                           Finance Documents on behalf of the Obligors,

                  (all in form and substance satisfactory to the Facility Agent)
                  (such date being the "EFFECTIVE DATE").

         (b)      Toreador and each Obligor represents and warrants as at the
                  Effective Date that there is no Default outstanding.

17.      OTHER PROVISIONS

         (a)      Nothing in this letter shall affect any right of any Finance
                  Party, or any obligation of any Obligor, except as expressly
                  stated above, and each Obligor expressly confirms that all
                  such rights and obligations shall continue in full force and
                  effect except to the extent so stated.

         (b)      This letter does not create any right under the Contracts
                  (Rights of Third Parties) Act 1999 which is enforceable by any
                  person who is not a party to this letter.



                                       16


         (c)      Toreador acknowledges and agrees to the provisions of Clause
                  28 (Changes to the Parties) and irrevocably authorises the
                  Facility Agent to execute any duly completed Novation
                  Certificate on its behalf.

         (d)      If a provision of this letter is or becomes illegal, invalid
                  or unenforceable in any jurisdiction, that shall not affect:

                  (i)      the legality, validity or enforceability in that
                           jurisdiction of any other provision of this letter;
                           or

                  (ii)     the legality, validity or enforceability, in other
                           jurisdictions of that or any other provision of this
                           letter.

         (e)      Clauses 1.2 (Construction), 28.1 (Transfers by Obligors) and
                  32-37 (inclusive) shall apply to this letter as though set out
                  in full in this letter, except that:

                  (i)      references in those Clauses to the Credit Agreement
                           are to be construed as references to this letter;

                  (ii)     each reference to "Obligor" in Clauses 1.2
                           (Construction), 28.1 (Transfers by Obligors), 35
                           (Jurisdiction) and 37 (Waiver of Jury Trial) shall be
                           deemed to include Toreador; and

                  (iii)    the reference to "the Guarantor" in Clause 35.2(f)
                           (Service of Process) shall be deemed to include
                           Toreador.

Please countersign this letter (or a copy of it) where marked below to confirm
your agreement to its terms.

Yours faithfully,


/s/ Ashley Jay
- ------------------------------
ON BEHALF OF BARCLAYS BANK PLC
AS FACILITY AGENT



We agree with the above.

BORROWERS' AGENT


/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date: 12/31/02





                                       17


BORROWERS



/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF MADISON OIL COMPANY EUROPE
Date: 12/31/02


/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF MADISON OIL FRANCE S.A.
Date: 12/31/02



/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date: 12/31/02


GUARANTORS


/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF MADISON OIL COMPANY
Date: 12/31/02



/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF MADISON PETROLEUM INC
Date: 12/31/02



/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF MADISON OIL COMPANY EUROPE
Date: 12/31/02



/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF MADISON OIL FRANCE S.A.
Date: 12/31/02






                                       18



/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date: 12/31/02



/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF MADISON (TURKEY) INC
Date: 12/31/02


/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF MADISON OIL TURKEY INC
Date: 12/31/02



TOREADOR

/s/ Douglas W. Weir
- -----------------------------------
ON BEHALF OF TOREADOR RESOURCES CORPORATION
Date: 12/31/02




                                       19



                  SCHEDULE 1 - FORM OF CASHFLOW RECONCILIATION


   SOURCES OF FUNDS                                                 DESCRIPTION

          French Operations

          Turkish Operations

          Trinidadian Operations

          US (Toreador) Operations

          Other                            =================

          Total

   USES OF FUNDS

          FRENCH           OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other
          =======================================
          TOTAL FRANCE

          TURKISH          OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other
          =======================================
          TOTAL TURKEY

          TRINIDADIAN      OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other
          =======================================
          TOTAL TRINIDAD

          US               OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other
          =======================================
          Total US (Toreador)

                               =============================
          TOTAL USES OF FUNDS

EX-10.29

                                                                   EXHIBIT 10.29

                            [On Barclays' letterhead]


To:      Madison Energy France S.C.S.
         (formerly Madison/Chart Energy S.C.S.) ("MEF")
         (the "BORROWERS' AGENT")

To:      Madison Oil Company Europe ("MOCE")
         Madison Oil France S.A. ("MOF")
         Madison Energy France S.C.S.
         (the "BORROWERS")

To:      Madison Oil Company ("MOC")
         Madison Petroleum Inc. ("MPI")
         Madison Oil Company Europe
         Madison Oil France S.A.
         Madison Energy France S.C.S.
         Madison (Turkey) Inc ("MADISON TURKEY")
         Madison Oil Turkey Inc ("MOTI")
         (the "GUARANTORS")

To:      Toreador Resources Corporation
         (the "TOREADOR")

                                                                  25 March, 2003


WAIVER AND CONSENT - VARIOUS ISSUES

We refer to the Revolving Credit Facility Agreement dated 30th March, 2001
between the Borrowers, the Guarantors, Barclays Capital as Arranger, the Banks
(as defined therein) and Barclays Bank PLC as Facility Agent, Technical Agent,
Ancillary Bank and US Security Trustee as amended (the "CREDIT AGREEMENT"). We
also refer to a waiver and consent letter dated 8th November, 2001 relating to
the merger of MOC with Toreador (the "MERGER WAIVER LETTER"), to a waiver and
consent letter dated 21st March, 2002 relating to various issues (the "MARCH
WAIVER LETTER") and a waiver and consent letter dated 31st December, 2002
relating to various issues (the "DECEMBER WAIVER LETTER").

All of the Banks, the Ancillary Bank and the Hedging Bank, have authorised the
Facility Agent to enter into this letter on their behalf.

1.       INTERPRETATION

         In this letter, unless otherwise defined or the context otherwise
requires:

         (a)      terms defined or used in the Credit Agreement have the same
                  meaning in this letter;

         (b)      references to specific numbered clauses are clauses of the
                  Credit Agreement;

         (c)      references to paragraphs are, unless stated otherwise,
                  references to paragraphs of this letter;

         (d)      "ALLEN & OVERY INVOICE" means the invoice for Pound
                  Sterling 44,768.52 delivered by Allen & Overy to Barclays
                  Capital dated 29th January, 2003 in respect of work done in


                                       2


                  connection with the December Waiver Letter, the First Warrant
                  Letter, the Toreador Guarantee and the related subordination
                  agreement.

         (e)      "BANK OF TEXAS LOAN AGREEMENT" means the loan agreement dated
                  16th February, 2001 between Toreador Resources Corporation,
                  Toreador Exploration and Production Inc, Toreador Acquisition
                  Corporation, Tormin Inc and the Bank of Texas National
                  Association, as amended from time to time.

         (f)      "EQUITY ISSUE PROCEEDS" means the proceeds (whether in cash or
                  in kind) of any equity or capital issue (to include, without
                  limitation, share placement, the issue of preferred stock or
                  subordinated loan stock or any other similar instrument) (the
                  "EQUITY ISSUE");

         (g)      "FIRST WARRANT LETTER" means the warrant letter dated 21st
                  March, 2002 between Toreador and the Arranger, as amended.

         (h)      "JANUARY NPV" means $9,882,016, as determined in the forecast
                  dated 30th January, 2003

         (i)      "MERGER AGREEMENT" means the merger agreement dated as of 3rd
                  October, 2001 between MOC, Toreador and MOC Acquisition
                  Corporation (a wholly-owned subsidiary of Toreador) pursuant
                  to which, subject to the satisfaction of certain conditions,
                  MOC and MOC Acquisition Corporation will merge and MOC shall
                  be the surviving corporation;

         (j)      "MOC GROUP" means MOC and all of its subsidiaries.

         (k)      "SECOND WARRANT LETTER" means the warrant letter dated on or
                  about the date of this letter between Toreador and the
                  Arranger.

         (l)      "STRATEGIC PLAN" means the strategic plan submitted to the
                  Facility Agent by Toreador on 12th December, 2002;

         (m)      "SUBORDINATION AGREEMENT" means the Subordination Agreement
                  dated 30th March, 2001 between members of the Madison Group as
                  debtors, the Facility Agent and MOF, MOC, MOCE and MPI.

         (n)      "SUBORDINATION AND SUPPORT AGREEMENT" means the subordination
                  and support agreement between Toreador, MOC and the Facility
                  Agent dated November, 2001 entered into in connection with the
                  Merger Waiver Letter;

         (o)      "SURPLUS SALE PROCEEDS" means, in relation to any US asset of
                  the Toreador Group, the net sale proceeds paid to or to the
                  order of any member of the Toreador Group from the sale of
                  that asset after deduction of any amounts thereof required by
                  the Bank of Texas to be paid to them in repayment of
                  outstanding loans to Toreador;

         (p)      "TOREADOR GROUP" means, at any time Toreador and all of its
                  Subsidiaries for the time being;

         (q)      "TOREADOR GUARANTEE" means a Toreador subordinated guarantee
                  of all of the obligations of the Obligors under the Finance
                  Documents;



                                       3


         (r)      "TOREADOR SUBORDINATED REVOLVING CREDIT AGREEMENT" means the
                  subordinated revolving credit agreement dated as of 3rd
                  October, 2001 between MOC and Toreador pursuant to which
                  Toreador agrees to advance by way of loan certain monies to
                  MOC;

         (s)      "TOREADOR SUBORDINATED REVOLVING CREDIT NOTE" means the
                  subordinated revolving credit note dated as of 3rd October,
                  2001 between MOC and Toreador;

         (t)      "TRINIDADIAN PERMITTED PAYMENTS" means

                  (i)      the costs referred to in paragraph (a)(i) and (a)(ii)
                           of the definition of "Permitted Payment" in the
                           Credit Agreement except that reference to Borrower
                           Borrowing Asset, Borrowing Base Petroleum or
                           Borrowing Base Interest in that definition shall be
                           construed as a reference to Trinidadian Interest,
                           Trinidadian Petroleum and Trinidadian Asset);

                  (ii)     any taxes that are attributable to the Trinidadian
                           Asset and are payable by Trans Dominion Holdings
                           Limited or any other member of the Toreador Group;
                           and

                  (iii)    any:

                           (a)  exploration and appraisal expenditure;

                           (b)  general and administrative expenditure; or

                           (c)  capital expenditure not falling within
                                paragraph (i) above,

                           payable by Trans Dominion Holdings Limited, as
                           applicable, to the extent the Majority Banks
                           expressly agree or require in writing (but not
                           further or otherwise)

                  (iv)     any other expenditure that the Majority Banks agree
                           may be a Trinidadian Permitted Payment;

         (u)      "TRINIDADIAN REVENUE" means

                  (i)      the gross proceeds (without any deductions
                           whatsoever) of any disposal of Trinidadian Petroleum;

                  (ii)     any sales tax payable on the amount referred to in
                           paragraph (i) above;

                  (iii)    any other amount payable to Trans Dominion Holdings
                           Limited and MOC in respect of any Trinidadian
                           Petroleum, Trinidadian Interest or Trinidadian Asset.

         (v)      "TRINIDADIAN REVENUE ACCOUNTS" means the revenue accounts to
                  be opened with the Account Bank in London and maintained by
                  Trans Dominion Holdings Limited which shall be maintained in
                  accordance with the directions of the Facility Agent;

         (w)      "TURKISH CAPITAL REPATRIATION" means any amounts paid to
                  Toreador or any Obligor in relation to the repatriation of the
                  registered capital of any member of the Toreador Group in
                  Turkey;



                                       4


         (x)      "TURKISH PERMITTED PAYMENTS" means:

                  (i)      the costs referred to in paragraphs (a)(i) and
                           (a)(ii) of the definition of "Permitted Payment" in
                           the Credit Agreement except that reference to
                           Borrower Borrowing Asset, Borrowing Base Petroleum or
                           Borrowing Base Interest in that definition shall be
                           construed as a reference to Turkish Interest, Turkish
                           Petroleum and Turkish Asset);

                  (ii)     any taxes payable by MOTI and Madison Turkey; and

                  (iii)    any:

                           (a)      exploration and appraisal expenditure;

                           (b)      general and administrative expenditure; or

                           (c)      capital expenditure not falling within
                                    paragraph (i) above,

                           payable by MOTI and Madison Turkey, as applicable, to
                           the extent the Majority Banks expressly agree or
                           require in writing (but not further or otherwise)

                  (iv)     any other expenditure that the Majority Banks agree
                           may be a Turkish Permitted Payment;

         (y)      "TURKISH REVENUE" means:

                  (i)      the gross proceeds (without any deductions
                           whatsoever) of any disposal of Turkish Petroleum;

                  (ii)     any sales tax payable on the amount referred to in
                           paragraph (i) above;

                  (iii)    any other amount payable to MOTI, Madison Turkey and
                           MOC in respect of any Turkish Petroleum, Turkish
                           Interest or Turkish Asset.

         (z)      "TURKISH REVENUE ACCOUNTS" means the revenue accounts to be
                  opened with the Account Bank in London which shall be
                  maintained in accordance with the directions of the Facility
                  Agent;

         (aa)     "TURKISH/TRINIDADIAN ASSET" means:

                  (i)      (A)      the Cendere oil field in Turkey;

                           (B)      the Zeynel oil field in Turkey;

                           (C)      the Boyabet oil field in Turkey; and

                           (D)      the Thrace Basin in Turkey,

                           (each a "TURKISH ASSET"); and



                                       5


                  (ii)     the Bonasse oil field in Trinidad and Tobago and the
                           related Southwest Cedros Peninsular Exploration
                           Licence (the "TRINIDADIAN ASSET");

         (bb)     "TURKISH/TRINIDADIAN INTEREST" means:

                  (i)      all of the Obligors' present and future interest in a
                           Turkish Asset and all agreements, facilities or
                           insurances relative to that Turkish Asset or to
                           Turkish Petroleum (the "TURKISH INTEREST"); and

                  (ii)     all of the Obligors' present and future interest in a
                           Trinidadian Asset and all agreements, facilities or
                           insurances relative to that Trinidadian Asset or to
                           Trinidadian Petroleum (the "TRINIDADIAN INTEREST");

         (cc)     "TURKISH/TRINIDADIAN PETROLEUM" means:

                  (i)      in respect of a Turkish Asset, all petroleum won and
                           saved from that Turkish Asset that accrues to the
                           Turkish Interest in that Turkish Asset (including,
                           without limitation, any such petroleum that is
                           royalty petroleum) ("TURKISH PETROLEUM"); and

                  (ii)     in respect of a Trinidadian Asset, all petroleum won
                           and saved from that Trinidadian Asset that accrues to
                           the Trinidadian Interest in that Trinidadian Asset
                           (including, without limitation, any such petroleum
                           that is royalty petroleum) ("TRINIDADIAN PETROLEUM");

         (dd)     "VOTING AGREEMENT" means the voting agreement dated as of 3rd
                  October, 2001 between Toreador, Herbert L. Brewer, David M.
                  Brewer and PHD Partners, LP;

         (ee)     "WARRANT" means the warrants issued or to be issued pursuant
                  to the Warrant Letters; and

         (ff)     "WARRANT LETTER" means the First Warrant Letter or the Second
                  Warrant Letter.

2.       WAIVERS AND CONSENTS

2.1      WAIVER OF BREACHES OF FINANCE DOCUMENTS

         Subject to the terms and conditions of this letter, Barclays Bank PLC,
         as Facility Agent confirms that the Banks have agreed to waive the
         following breaches of the Finance Documents:

         (a)      all currently outstanding breaches of Clause 6.1 (Repayment),
                  as amended by the December Waiver Letter;

         (b)      failure by Toreador to provide the Toreador Guarantee in
                  accordance with Clause 7.4 of the December Waiver Letter; and

         (c)      failure by Toreador and the Obligors to procure that, by 31st
                  January, 2003, all of the Toreador Group's shares in Trinidad
                  Exploration and Development Limited and Trans Dominion
                  Holdings Limited are pledged to the Facility Agent in
                  accordance with Clause 7.6 of the December Waiver Letter.

2.2      MERGER WAIVER AND CONSENT



                                       6


         Barclays Bank PLC, as Facility Agent, consents to the merger of
         Toreador and MOC and confirms that the Banks have agreed to waive the
         following Events of Default:

         (a)      under Clauses 19.12(a) (Mergers and acquisitions) and 20.3
                  (Breach of other obligations) and Clause 20.20(d) (Change of
                  control) constituted by MOC entering into and performing the
                  Merger Agreement and the Voting Agreement and by the
                  occurrence of the Effective Time (as that term is defined in
                  the Merger Agreement);

         (b)      under Clauses 19.13 (Other Financial Indebtedness) and 20.3
                  (Breach of other obligations) constituted by MOC incurring any
                  of the indebtedness referred to in paragraph 8
                  (Characterisation of Toreador Payments) below;

         (c)      under Clauses 19.14 (Loans) and 20.3 (Breach of other
                  obligations) constituted by MOC making loans to the Borrower
                  referred to in paragraph 8 (Characterisation of Toreador
                  Payments) below; and

         (d)      under Clauses 19.13 (Other Financial Indebtedness) and 20.3
                  (Breach of other obligations) constituted by the Borrowers
                  being deemed to have borrowed from MOC as referred to in
                  paragraph 8 (Characterisation of Toreador Payments) below.

3.       CONSOLIDATION OF WAIVER LETTERS

         Subject to the terms and conditions of this letter, Barclays Bank PLC,
         as Facility Agent, confirms that the Banks have agreed to permanently
         waive any and all Events of Default that have arisen under the Merger
         Waiver Letter, the March Waiver Letter and the December Waiver Letter
         and all the parties to this letter agree that the Merger Waiver Letter,
         the March Waiver Letter and the December Waiver Letter shall be
         terminated and of no further effect (save in relation to the waivers
         granted under those letters).

4.       REPAYMENT

4.1      REPAYMENT

         Clause 6.1 (Repayment) shall be suspended in accordance with paragraph
         4.2 (Term of Suspension) below and, during the term of suspension,
         shall be replaced with the following provisions:

         (a)      the Borrowers shall, on the last Business Day of each of March
                  2003 and April, 2003, repay an amount of the Loans equal to
                  the greater of:

                  (i)      $400,000; and

                  (ii)     the aggregate of:

                           (A)      French Revenue, less any Permitted Payments;
                                    and

                           (B)      Turkish Revenue and Trinidadian Revenue,
                                    less Turkish Permitted Payments and
                                    Trinidadian Permitted Payments, as
                                    determined in accordance with the terms of
                                    this Waiver Letter.

4.2      TERM OF SUSPENSION



                                       7


         Clause 6.1 (Repayment) shall be suspended until the earlier of:

         (a)      the first Business Day of May, 2003; or

         (b)      such time as (i) the ratio of the January 2003 NPV to Total
                  Indebtedness is not less than 1.5:1; and (ii) the outstanding
                  Loans do not exceed the Total Commitments.

4.3      TURKISH CAPITAL REPATRIATION PREPAYMENT

         If, during the suspension of Clause 6.1 (Repayment) in accordance with
         paragraph 4.2 (Term of Suspension) above, either of Madison Turkey,
         MOTI or any other Obligor receives any Turkish Capital Repatriation
         (the relevant company that receives such monies being referred to in
         this paragraph 4.3 as the "recipient"):

         (i)      the recipient shall immediately notify the Facility Agent of
                  all amounts of Turkish Capital Repatriation received;

         (ii)     the recipient shall ensure that no money received as Turkish
                  Capital Repatriation is transferred to any other member of the
                  Toreador Group; and

         (iii)    on demand by the Facility Agent the recipient shall
                  immediately pay to the Facility Agent the balance of the
                  Turkish Capital Repatriation (less any amount thereof that is
                  reinvested in Turkey solely for the purposes of maximising
                  future Turkish Capital Repatriations as detailed in the
                  Strategic Plan) in performance of the prepayment obligation
                  (if the recipient is a Borrower) or in performance of that
                  Guarantor's guarantee of the prepayment obligation (if the
                  recipient is a Guarantor) (and Clause 7.7(b) (Miscellaneous
                  provisions) shall apply to any such prepayment).

4.4      ASSET SALE PROCEEDS PREPAYMENT

         Subject to paragraph 7.8(a)(iii) (Restrictions under Bank of Texas Loan
         Agreement), if, during the suspension of Clause 6.1 of the Credit
         Agreement in accordance with paragraph 4.2 (Term of Suspension) above,
         any member of the Toreador Group sells any of its US assets, Toreador
         agrees to pay to the Facility Agent an amount equal to the Surplus Sale
         Proceeds and such payment shall be deemed to be a prepayment of Loans
         by the Borrowers in an aggregate principal amount equal to the Surplus
         Sale Proceeds (and Clause 7.7(b) (Miscellaneous provisions) shall apply
         to any such prepayment).

4.5      TRINIDADIAN ASSET SALES PREPAYMENT

         (a)      Subject to sub paragraph (b) below and to paragraph 7.8(a)(iv)
                  (Restrictions under Bank of Texas Loan Agreement), if MOC or
                  any Obligor sells or transfers any of its interest in the
                  Trinidadian Assets (either directly or indirectly, including
                  by way of share sale)(the relevant company that receives such
                  monies being referred to in this paragraph 4.5 as the
                  "recipient") :

                  (i)      the recipient shall immediately notify the Facility
                           Agent of all amounts realised from such sale or
                           transfer;

                  (ii)     the recipient shall ensure that no money received
                           from such sale or transfer is transferred to any
                           other member of the Toreador Group; and



                                       8



                  (iii)    on demand by the Facility Agent, the recipient shall
                           immediately pay to the Facility Agent the net sale
                           proceeds of such sale in performance of the
                           prepayment obligation (if the recipient is a
                           Borrower) or in performance of that Guarantor's
                           guarantee of the prepayment obligation (if the
                           recipient is a Guarantor) (and Clause 7.7(b)
                           (Miscellaneous provisions) shall apply to any such
                           prepayment).

         (b)      No member of the Toreador Group will sell or transfer (either
                  directly or indirectly, including by way of share sale or
                  intra group transfer) any of its interest in the Trinidadian
                  Assets without the prior written consent of the Facility
                  Agent.

4.6      MISCELLANEOUS

         (a)      The following amendments to the Credit Agreement effected by
                  paragraph 4 of the Merger Waiver Letter and paragraph 13 of
                  the March Waiver Letter remain effective and are restated as
                  follows:

                  (i)      if the Borrowers repay or prepay any outstanding
                           Loan, then the Total Commitments shall, immediately
                           upon that repayment or prepayment being made,
                           automatically be reduced by an amount equal to the
                           principal so repaid or prepaid;

                  (ii)     Clause 6.2 shall be amended so the words "Tranche A"
                           is inserted before "Tranche B" and the words ", but
                           any amount repaid under Tranche A may subsequently be
                           re-borrowed on and subject to the provisions of the
                           Agreement" are deleted; and

                  (iii)    Clause 7.7(c) shall be amended so that the words "Any
                           amount prepaid under Tranche A may subsequently be
                           re-borrowed on and subject to the terms of this
                           Agreement but" are deleted and the words "Tranche A,"
                           are inserted before "Tranche B".

         (b)      The Borrowers shall ensure that the last day of an Interest
                  Period for one or more Loans coincides with the date
                  repayments or prepayments are to be made under this letter,
                  and shall select Interest Periods accordingly and for this
                  purpose (but not otherwise) the Borrowers may select an
                  Interest Period of less than one month.

         (c)      Amounts prepaid in accordance with paragraphs 4.3 (Turkish
                  Capital Repatriation Prepayment) to 4.5 (Trinidadian Asset
                  Sales Prepayment) shall not be applied against or reduce the
                  repayment obligations under paragraph 4.1 (Repayment).

5.       FORECASTS

         The calculation of the Relevant NPV on each Calculation Date in
         accordance with Clause 16.1(d)(i) (General) shall be suspended for the
         duration of the suspension of Clause 6.1 (Repayment) in accordance with
         paragraph 4 (Repayment) above.

6.       INFORMATION COVENANTS

6.1      STRATEGIC PLAN



                                       9


         (a)      On 15th March, 2003 and on the 15th and 30th of each month
                  thereafter, Toreador shall provide to the Facility Agent an
                  update of the Strategic Plan incorporating the following
                  information in reasonable detail:

                  (i)      details of the progress achieved in relation to each
                           of the options outlined in the Strategic Plan and the
                           updates thereto;

                  (ii)     Toreador's assessment of the likelihood of each
                           option referred to above coming to fruition by 30th
                           April, 2003;

                  (iii)    details of any other option being pursued by Toreador
                           with a view to restoring the January 2003 NPV to
                           Total Indebtedness to not less than 1.5:1 by 30th
                           April, 2003; and

                  (iv)     full details of any tax advice received by Toreador
                           in relation to the sale of any Obligor or any of the
                           Borrowing Base Assets.

         (b)      Toreador shall immediately notify the Facility Agent if it
                  becomes aware that any of the options outlined in the
                  Strategic Plan is no longer being pursued by Toreador or the
                  proposed counterparty or, as a result of any other event or
                  circumstance, is unlikely to come to fruition by 30th April,
                  2003, providing reasonable detail of the particular event or
                  circumstances.

6.2      CASHFLOW FORECASTS

         (a)      Toreador shall immediately notify the Facility Agent of any
                  events or circumstances that are likely to cause a deviation
                  from the cashflow forecast provided by Toreador to the
                  Facility Agent on 5th January, 2003 to the extent that it is
                  likely to prevent the Borrowers complying with the repayment
                  schedule in paragraph 4.1 (Repayment) or cause liquidity
                  problems in the Toreador Group, providing details of the
                  particular events or circumstances and a revised forecast.

         (b)      Toreador shall provide to the Facility Agent, on a weekly
                  basis, a certificate signed by the Chief Financial Officer of
                  Toreador certifying that that the Toreador Group has
                  sufficient working capital to continue trading and that the
                  Toreador Group's cashflow situation is manageable.

6.3      OTHER INFORMATION

         Toreador shall promptly notify the Facility Agent:

         (a)      of the receipt by any member of the Toreador Group of any
                  Surplus Sale Proceeds; and

         (b)      if any creditor of any member of the Toreador Group takes any
                  enforcement action, or notifies any member of the Toreador
                  Group of its intention to take enforcement action, in relation
                  to any amounts owing to it.

7.       COVENANTS

7.1      CAPITAL EXPENDITURE RESTRICTIONS



                                       10



         (a)      The Obligors shall procure that no Obligor shall make, nor
                  incur any obligation or liability for or in respect of any
                  capital expenditure except for (i) capital expenditure that a
                  prudent operator would expend to maintain (rather than
                  develop) the relevant assets; or (ii) (with the consent of the
                  Facility Agent and any necessary consent from the Bank of
                  Texas) capital expenditure that is funded from free cash that
                  is available to Toreador after making all of the repayments to
                  the Finance Parties contemplated by paragraph 7.8(b) of this
                  letter and any payment required to be made to Bank of Texas.

         (b)      Toreador shall within ten days of the end of each month
                  provide to the Facility Agent a cashflow reconciliation for
                  that month for all of the members of the Toreador Group (in
                  the form of the Schedule 1 to this letter) , reconciling the
                  sources of funds and uses of funds and including details of
                  that month's capital expenditures.

         (c)      Paragraph (i) of Clause 19.22 (Capital expenditure), shall not
                  apply.

         (d)      Toreador shall, within ten days of the end of each month,
                  provide to the Facility Agent a translation and cashflow
                  reconciliation of the account statements for that month in
                  relation to the Turkish Assets with full details of all income
                  and expenditure items.

7.2      TURKISH CAPITAL REPATRIATION

         Toreador and the Obligors shall use best endeavours to maximise Turkish
         Capital Repatriation proceeds within as short a time frame as is
         reasonably practicable.

7.3      TOREADOR EQUITY ISSUES

         (a)      Toreador shall use best endeavours to maximise Equity Issue
                  Proceeds in the period to 30th April, 2003 and shall consult
                  with the Facility Agent regarding the proportion of those
                  proceeds that are to be applied in prepayment of the Loans.

         (b)      Toreador undertakes to and shall procure that its subsidiaries
                  shall, in connection with any Equity Issue, make full and
                  proper disclosure in accordance with all applicable laws
                  and/or requirements of any regulatory authority

7.4      TURKISH AND TRINIDADIAN CASHFLOW

         (a)      Without prejudice to the Obligors' obligations under the
                  Credit Agreement and subject to the following provisions of
                  this paragraph 7.4 (Turkish and Trinidadian Cashflow), MOTI,
                  Madison Turkey and MOC shall pay, and Toreador shall procure
                  that MOTI, Madison Turkey and MOC pay all Turkish Revenue,
                  less Turkish Permitted Payments, and all Trinidadian Revenue,
                  less Trinidadian Permitted Payments, directly to the Facility
                  Agent, to be applied in repayment of the Loans, unless any
                  such amount is received in another currency, in which case
                  (where applicable) MOTI, Madison Turkey and MOC shall, and
                  Toreador shall procure that MOTI, Madison Turkey or MOC shall,
                  immediately upon receipt convert that amount to Dollars and
                  pay them directly to the Facility Agent, to be applied in
                  repayment of the Loans as contemplated in 4.1(a)(ii).

         (b)      (i) Toreador shall procure that, by no later than 30th April,
                      2003, Madison Turkey and MOTI shall open the Turkish
                      Revenue Accounts and Trans Dominion Holdings Limited shall
                      open the Trinidadian Revenue Accounts.



                                       11


                  (ii)     Subject to the opening of the Turkish Revenue
                           Accounts and the Trinidadian Revenue Accounts in
                           accordance with sub-paragraph (b)(i) above, Toreador
                           shall procure that, from the first Business Day of
                           May, 2003, all Turkish Revenue is paid into the
                           Turkish Revenue Accounts and all Trinidadian Revenue
                           is paid into the Trinidadian Revenue Accounts.

                  (iii)    MOTI, Madison Turkey and Trans Dominion Holdings
                           Limited shall be permitted to make such Turkish
                           Permitted Payments from the Turkish Revenue Accounts
                           and such Trinidadian Permitted Payments from the
                           Trinidadian Revenue Accounts, as applicable, as
                           approved in writing by the Facility Agent.

         (c)      Subject to paragraph 7.8(a)(v) (Restrictions under Bank of
                  Texas Loan Agreement), Toreador shall no later than 30th
                  April, 2003:

                  (i)      procure that the Facility Agent is granted a Security
                           Interest over the Turkish Revenue Accounts by way of
                           agreements in form and substance satisfactory to the
                           Facility Agent (the "TURKISH REVENUE ACCOUNTS
                           SECURITY DOCUMENTS"); and

                  (ii)     deliver a legal opinion from a reputable law firm in
                           respect of all relevant jurisdictions in a form and
                           substance satisfactory to the Facility Agent in
                           relation to the Turkish Revenue Accounts Security
                           Documents.

         (d)      Subject to paragraph 7.8(a)(v) (Restrictions under Bank of
                  Texas Loan Agreement), Toreador shall no later than 30th
                  April, 2003:

                  (i)      procure that the Facility Agent is granted a Security
                           Interest over the Trinidadian Revenue Accounts by way
                           of agreements in form and substance satisfactory to
                           the Facility Agent (the "TRINIDADIAN REVENUE ACCOUNTS
                           SECURITY DOCUMENTS"); and [

                  (ii)     deliver a legal opinion from a reputable law firm in
                           respect of all relevant jurisdictions in a form and
                           substance satisfactory to the Facility Agent in
                           relation to the Trinidadian Revenue Accounts Security
                           Documents.

         (e)      Without limiting the Facility Agent's rights under Clause
                  19.3(d) (Borrowing Base Asset and similar information), the
                  Borrower's Agent shall supply to the Facility Agent (in
                  sufficient copies for all of the Banks unless the Facility
                  Agent agrees otherwise) the information described in Clause
                  19.3(a)(i), (ii) and (iii) (Borrowing Base Asset and similar
                  information), provided that the wording of that Clause shall
                  be deemed amended for these purposes such that each reference
                  to "Borrowing Base Asset" shall be deemed to be a reference to
                  Turkish/Trinidadian Asset.

         (f)      Toreador undertakes to deliver promptly to the Facility Agent
                  such information and evidence as it may from time to time
                  require in order to check and verify the amount of any Turkish
                  Revenue, Trinidadian Revenue, Trinidadian Permitted Payment or
                  Turkish Permitted Payment.

         (g)      Each Obligor shall do all things required by the Facility
                  Agent for the granting, perfecting or protecting of any
                  security intended to be granted under the Turkish Revenue
                  Accounts Security Document and the Trinidadian Revenue
                  Accounts Security Document.



                                       12



7.5      TRANS DOMINION HOLDINGS LIMITED

         Subject in each case to paragraph 7.8(a)(vi) (Restrictions under Bank
         of Texas Loan Agreement), Toreador and the Obligors agree:

         (a)      to procure that, by 30th April, 2003, all of the Toreador
                  Group's shares in Trinidad Exploration and Development Limited
                  and Trans Dominion Holdings Limited are pledged to the
                  Facility Agent on behalf of the Finance Parties by way of a
                  security agreement in form and substance satisfactory to the
                  Facility Agent and that by the same date legal opinions
                  relating thereto are delivered to the Facility Agent from
                  reputable law firms in all relevant jurisdictions in each case
                  in form and substance satisfactory to the Facility Agent; and
                  [subject to TED approval]

         (b)      to procure that Trans Dominion Holdings Limited:

                  (i)      promptly notifies the Facility Agent when Trans
                           Dominion Holdings Limited enters into any agreement
                           relating to the Trinidadian Asset, the Trinidadian
                           Interest or any Trinidadian Petroleum ("RELEVANT
                           AGREEMENT");

                  (ii)     after notice by the Facility Agent to the Borrower's
                           Agent that the Facility Agent requires security to be
                           granted to it for the benefit of the Finance Parties,
                           enters into an agreement granting a Security Interest
                           over that Relevant Agreement above in form and
                           substance satisfactory to the Facility Agent
                           ("SECURITY DOCUMENT"); and [subject to

                  (iii)    delivers a legal opinion from a reputable law firm in
                           respect of all relevant jurisdictions in a form and
                           substance satisfactory to the Facility Agent in
                           relation to each of the Security Documents,

                  and each Obligor shall do all things reasonably required by
                  the Facility Agent for the granting, perfecting or protecting
                  of any security intended to be granted under a Security
                  Document.

7.6      THE MERGER AGREEMENT [?]

         (a)      MOC undertakes not to agree to any waiver, amendment,
                  termination or cancellation of, or of any term of, the Merger
                  Agreement or the Voting Agreement.

         (b)      Toreador agrees to waive any default, event of default or
                  breach of representation or warranty under the Merger
                  Agreement, the Voting Agreement, the Toreador Subordinated
                  Revolving Credit Agreement and the Toreador Subordinated
                  Revolving Credit Note constituted by MOC issuing shares to
                  Barclays Nominees (Branches) Limited, and the Obligors
                  undertaking to deliver shares, in accordance with paragraph
                  3(a)(ii) of the Merger Waiver Letter.

7.7      TURKEY

         Toreador and MOCE undertake to procure that, by no later than forty
         five days after Madison Turkey has received all Turkish Capital
         Repatriations that it is entitled to:

         (a)      Madison Turkey shall have transferred all of its assets,
                  liabilities, business and undertakings to MOTI and shall be
                  wound up and dissolved; and



                                       13


         (b)      that MOTI shall have discharged in full all of the
                  consideration for that transfer.

7.8      RESTRICTIONS UNDER BANK OF TEXAS LOAN AGREEMENT

         (a)      Toreador undertakes to use its best endeavours to obtain any
                  necessary waiver of or amendment (if any) to the provisions of
                  the Bank of Texas Loan Agreement so as to enable:

                  (i)      Toreador and the other borrowers under the Bank of
                           Texas Loan Agreement to provide financial support to
                           the MOC Group as set out in Schedule 2;

                  (ii)     Toreador to enter into the Toreador Guarantee;

                  (iii)    Toreador to make any payments to the Facility Agent
                           that may arise in accordance with paragraph 4.4
                           (Asset Sales Proceeds Prepayment);

                  (iv)     Toreador to make any payments to the Facility Agent
                           that may arise in accordance with paragraph 4.5
                           (Trinidadian Asset Sales Prepayment);

                  (v)      Toreador to grant to the Facility Agent a Security
                           Interest over each of the Turkish Revenue Account and
                           the Trinidadian Revenue Account in accordance with
                           paragraphs 7.4(b) and (d) (Turkish and Trinidadian
                           Cashflow) respectively; and

                  (vi)     Toreador Group's shares in Trinidad Exploration and
                           Development Limited and Trans Dominion Holdings
                           Limited to be pledged to the Facility Agent in
                           accordance with paragraph 7.5.

         (b)      On obtaining such waiver to, or amendment of, the provisions
                  of the Bank of Texas Loan Agreement as is required to enable
                  Toreador and the other borrowers under that agreement to
                  provide financial support to the MOC Group in accordance with
                  paragraph 7.8(a)(i) above, Toreador shall use its best
                  endeavours to procure that the Outstanding Target Repayments
                  of the Loans, as defined and set out in Schedule 2 to this
                  letter, are promptly paid to the Facility Agent.

         (c)      On obtaining such waivers to, or amendments of, the provisions
                  of the Bank of Texas Loan Agreement as are required to enable
                  Toreador to enter into the Toreador Guarantee in accordance
                  with paragraph 7.8(a)(ii) above, Toreador shall immediately:

                  (i)      enter into the Toreador Guarantee; and

                  (ii)     deliver a legal opinion from a reputable law firm in
                           respect of all relevant jurisdictions in a form and
                           substance satisfactory to the Facility Agent in
                           relation to its entry into the Toreador Guarantee.

7.9      TURKISH CAPITAL REPATRIATION

         Toreador shall procure that the Obligors obligations under paragraph
         4.3 (Turkish Capital Repatriation Prepayment). [?]

8.       CHARACTERISATION OF TOREADOR PAYMENTS



                                       14



         (a)      Toreador agrees that any payment made or deemed made to MOC by
                  Toreador pursuant to this letter, the December Waiver Letter,
                  the March Waiver Letter or the Merger Waiver letter shall be
                  "Junior Debt" for the purposes of the Subordination and
                  Support Agreement. MOC agrees that any payment made or deemed
                  made by MOC to any of the Borrowers pursuant to this letter,
                  the December Waiver Letter, the March Waiver Letter or the
                  Merger Waiver Letter shall be "Junior Debt" for the purposes
                  of the Subordination Agreement.

         (b)      An amount equal to each payment made by Toreador to the
                  Facility Agent in accordance with this letter or the December
                  Waiver Letter and for the avoidance of doubt, any amounts
                  previously paid by Toreador under paragraph 7(b) of the Merger
                  Waiver Letter or 12(b) of the March Waiver Letter shall be
                  deemed to be

                  (i)      a non-interest bearing loan made by Toreador to MOC
                           repayable (subject to the Subordination and Support
                           Agreement on demand (or a loan on such other terms as
                           are agreed by MOC and Toreador (in any case subject
                           to the Subordination and Support Agreement)); and

                  (ii)     a non-interest bearing loan made by MOC to the
                           Borrowers repayable (subject to the Subordination
                           Agreement on demand (or a loan on such other terms as
                           are agreed by MOC and the Borrowers (in any case
                           subject to the Subordination Agreement)).

         (c)      Without prejudice to any obligation to obtain the consent of
                  the Bank of Texas, the obligations of Toreador to make
                  payments under and in connection with this letter are
                  absolute, irrevocable and unconditional and shall not be
                  affected by: [this won't work]

                  (i)      the existence of any dispute, claim, counter-claim,
                           set-off, defence or other right which Toreador may
                           have at any time against any Finance Party or MOC,
                           whether in connection herewith or otherwise;

                  (ii)     the bankruptcy, insolvency, reorganisation, winding
                           up, dissolution or liquidation, or any change in the
                           status, function, control or ownership of any Obligor
                           or Toreador or the occurrence of any other proceeding
                           as a result of such bankruptcy;

                  (iii)    any sale, transfer or other disposition by Toreador
                           of any direct or indirect interest it may have in any
                           Obligor; and

                  (iv)     any of the obligations of Toreador under or in
                           connection with this letter being or becoming
                           illegal, invalid or unenforceable in any respect.

9.       AMENDMENT TO THE CREDIT AGREEMENT

         The amendments to the Credit Agreement effected by paragraph 4 of the
         Merger Waiver Letter and paragraph 13 of the March Waiver Letter remain
         effective and are restated as follows:

         (a)      paragraph (d) in the definition of "Permitted Payment" in
                  Clause 1.1 (Definitions) shall be deleted and shall be
                  replaced with:

                  "(d)     [Not used];";



                                       15


         (b)      Clause 19.25(a)(iii) (Turkish business) shall be deleted and
                  shall be replaced with:

                  "(iii)   in any event, does not make any payment to any other
                           member of the Toreador Group except for payment of
                           the kind contemplated by paragraph (ii)(B) above;";

         (c)      for the purposes of 20.3 (Breach of other obligations), 20.4
                  (Misrepresentation), 20.12 (Unlawfulness), 20.13
                  (Effectiveness of Security), 20.22 (U.S. Bankruptcy Laws) and
                  20.23 (ERISA) the word "Obligor" shall be deemed to include
                  Toreador;

         (d)      for the purposes of Clauses 20.5 (Cross-default), 20.6
                  (Insolvency), 20.7 (Insolvency proceedings), 20.8 (Appointment
                  of receivers and managers), 20.9 (Creditor's processes), 20.10
                  (Analogous proceedings), 20.11 (Cessation of business) and
                  20.17 (Litigation) the phrase "member of the Group" shall be
                  deemed to include Toreador;

         (e)      Clause 20.20(d) (Change of Control) shall be deleted and shall
                  be replaced with:

                  "(d)     MOC is not, or ceases to be, a wholly-owned
                           subsidiary of Toreador Resources Corporation; or";
                           and

         (f)      a new Clause 20.20(e) (Change of Control) of the Credit
                  Agreement shall be inserted as follows:

                  "(e)     any single person, or group of persons acting in
                           consort (as defined in the City Code on Takeovers and
                           Mergers) acquires control (as defined in Section 416
                           of the Income and Corporation Taxes Act 1998) of
                           Toreador Resources Corporation.".

10.      CONFIRMATIONS

10.1     GUARANTEES

         Each Guarantor agrees, and represents and warrants to each Finance
         Party as at the date it executes this letter:

         (a)      that the arrangements contemplated by this letter, the Merger
                  Agreement and the Voting Agreement and the entry into and
                  performance of the Merger Agreement and the occurrence of the
                  Effective Time (as defined in the Merger Agreement) do not in
                  any way affect the guarantee and undertakings given by it
                  under Clause 15 (Guarantee); and

         (b)      that the guarantee given by it under Clause 15 (Guarantee) is
                  a continuing guarantee, in full force and effect, and will
                  extend to the ultimate balance of all sums payable by the
                  Obligors under the Finance Documents, regardless of the
                  arrangements contemplated by this letter, the entry into and
                  performance of the Merger Agreement and the occurrence of the
                  Effective Time (as defined in the Merger Agreement) and any
                  intermediate payments or discharge in whole or in part
                  (including, without limitation, the prepayments contemplated
                  by this letter).

10.2     MOC



                                       16


         MOC agrees, and represents and warrants to each Finance Party as at the
         date it executes this letter:

         (a)      that the arrangements contemplated by this letter and the
                  entry into and performance of the Merger Agreement and the
                  occurrence of the Effective Time (as defined in the Merger
                  Agreement) do not in any way affect any of the Finance
                  Documents; and

         (b)      that its obligations under the Finance Documents are in full
                  force and effect and are binding on, and enforceable against,
                  MOC regardless of the arrangements contemplated by this letter
                  or the entry into and performance of the Merger Agreement and
                  the occurrence of the Effective Time (as defined in the Merger
                  Agreement)).

11.      REPRESENTATIONS AND WARRANTIES

         (a)      Toreador and each Obligor makes the following representations
                  and warranties to each Finance Party in respect of those of
                  this letter, the Merger Agreement and the Voting Agreement to
                  which it is a party:

                  (i)      that it has the power to enter into and perform this
                           letter, the Merger Agreement and the Voting Agreement
                           and it has taken all necessary action to authorise
                           the entry into, performance and delivery of this
                           letter, the Merger Agreement and the Voting
                           Agreement; and

                  (ii)     that this letter, the Merger Agreement and the Voting
                           Agreement constitutes its legal, valid and binding
                           obligation enforceable in accordance with its terms.

         (b)      Toreador represents and warrants as at the date it executes
                  this letter and each time it issues a Warrant, that:

                  (i)      that it has the power to enter into and perform this
                           letter, the Warrants and the Warrant Letters and it
                           has taken all necessary action to authorise the
                           issue, performance and delivery of those Warrants;
                           and

                  (ii)     this letter, the Warrants and the Warrant Letters
                           will, when issued, constitutes its legal, valid and
                           binding obligation enforceable in accordance with its
                           terms.

12.      LEGAL FEES

         (a)      For the avoidance of doubt, MEF acknowledges and agrees that
                  the Facility Agent's costs and expenses incurred in connection
                  with this letter, the Warrant Letters and any other
                  arrangement, new agreement or document contemplated by this
                  letter fall within Clause 23.1 (Initial and special costs),
                  and as such, MEF shall immediately on demand pay those costs
                  and expenses.

         (b)      The Facility Agent confirms that the payment of the legal fees
                  of Allen & Overy (the Facility Agent's legal adviser) incurred
                  in relation to this letter, the Warrant Letters and any other
                  arrangement, new agreement or document contemplated by this
                  letter shall constitute a Permitted Payment.



                                       17


         (c)      The Obligors shall pay the Permitted Payment referred to in
                  paragraph (b) above as soon as possible after execution of
                  this letter from Gross Revenues to the extent any such amount
                  is available after the payment of any other Permitted Payments
                  (other than any referred to in paragraph (c)(i) of the
                  definition of Permitted Payment in Clause 1.1 (Definitions)).

         (d)      Toreador undertakes to pay the Allen & Overy Invoice by 15th
                  March, 2003 at the latest.

13.      EVENT OF DEFAULT

         If:

         (a)      any of the provisions of this letter are not complied with;

         (b)      any shares are not issued in accordance with the Warrants
                  issued and delivered in accordance with the Warrant Letters;

         (c)      Toreador does not issue, deliver and amend the strike price of
                  any of the Warrants in accordance with the Warrant Letters;

         (d)      the Merger Agreement or the Toreador Subordinated Revolving
                  Credit Agreement is terminated;

         (e)      the Voting Agreement is breached;

         (f)      the Facility Agent is not satisfied with the substance of any
                  update or notification provided to it under paragraph 6.1
                  (Strategic Plan);

         (g)      Clause 6.1 of the Credit Agreement is not reinstated by 30th
                  April, 2003 in accordance with paragraph 4.2 (Term of
                  Suspension);

         (h)      any representation and warranty in this letter is incorrect
                  when made or repeated; or

         (i)      there is any breach of the repayment schedule in paragraph 4
                  (Repayment) of this letter,

         (j)      the Turkish Revenue Accounts and the Trinidadian Revenue
                  Accounts are not opened and/or Security Interests are not
                  granted over those accounts in favour of the Facility Agent by
                  30th April, 2003 in accordance with the provisions of
                  paragraph 7.4 (Turkish and Trinidadian Cashflow); or

         (k)      the Toreador Guarantee has not been executed and delivered,
                  together with the accompanying legal opinion, as outlined in
                  paragraph 7.8(c) by 30th April, 2003,

         then that event shall constitute an Event of Default under Clause 20
         (Default) and the Finance Parties may thereafter exercise all of their
         rights in respect thereof under the Finance Documents.

14.      DESIGNATION OF FINANCE DOCUMENTS



                                       18


         This letter, the Toreador Guarantee, the Subordination and Support
         Agreement, each of the Warrants and the Warrant Letters are a Finance
         Document (and each is hereby designated as such by the Facility Agent
         and the Borrowers' Agent).

15.      CONDITIONS PRECEDENT

         (a)      The letter and the waivers set out herein shall only take
                  effect on the date on which the Agent has received an original
                  of this letter and the Second Warrant Letter duly executed by
                  all parties and has received (or waived receipt of):

                  (i)      board resolutions of each of the Obligors and
                           Toreador authorising the transactions contemplated by
                           and execution of this letter and the Second Warrant
                           Letter; and

                  (ii)     specimen signatures of the persons authorised to sign
                           this letter, the Second Warrant Letter and any other
                           documents connected to the Finance Documents on
                           behalf of the Obligors,

                  (all in form and substance satisfactory to the Facility Agent)
                  (such date being the "EFFECTIVE DATE").

         (b)      Toreador and each Obligor represents and warrants as at the
                  Effective Date that there is no Default outstanding.

16.      OTHER PROVISIONS

         (a)      Nothing in this letter shall affect any right of any Finance
                  Party, or any obligation of any Obligor, except as expressly
                  stated above, and each Obligor expressly confirms that all
                  such rights and obligations shall continue in full force and
                  effect except to the extent so stated.

         (b)      This letter does not create any right under the Contracts
                  (Rights of Third Parties) Act 1999 which is enforceable by any
                  person who is not a party to this letter.

         (c)      Toreador acknowledges and agrees to the provisions of Clause
                  28 (Changes to the Parties) and irrevocably authorises the
                  Facility Agent to execute any duly completed Novation
                  Certificate on its behalf.

         (d)      If a provision of this letter is or becomes illegal, invalid
                  or unenforceable in any jurisdiction, that shall not affect:

                  (i)      the legality, validity or enforceability in that
                           jurisdiction of any other provision of this letter;
                           or

                  (ii)     the legality, validity or enforceability, in other
                           jurisdictions of that or any other provision of this
                           letter.

         (e)      Clauses 1.2 (Construction), 28.1 (Transfers by Obligors) and
                  32-37 (inclusive) shall apply to this letter as though set out
                  in full in this letter, except that:

                  (i)      references in those Clauses to the Credit Agreement
                           are to be construed as references to this letter;



                                       19


                  (ii)     each reference to "Obligor" in Clauses 1.2
                           (Construction), 28.1 (Transfers by Obligors), 35
                           (Jurisdiction) and 37 (Waiver of Jury Trial) shall be
                           deemed to include Toreador; and

                  (iii)    the reference to "the Guarantor" in Clause 35.2(f)
                           (Service of Process) shall be deemed to include
                           Toreador.

Please countersign this letter (or a copy of it) where marked below to confirm
your agreement to its terms.

Yours faithfully,


/s/ Steven Funnell
- ----------------------------
ON BEHALF OF BARCLAYS BANK PLC
AS FACILITY AGENT



We agree with the above.

BORROWERS' AGENT


/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date: 3/25/03



BORROWERS



/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON OIL COMPANY EUROPE
Date: 3/25/03


/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON OIL FRANCE S.A.
Date: 3/25/03



/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date: 3/25/03




                                       20


GUARANTORS


/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON OIL COMPANY
Date: 3/25/03



/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON PETROLEUM INC
Date: 3/25/03



/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON OIL COMPANY EUROPE
Date: 3/25/03



/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON OIL FRANCE S.A.
Date: 3/25/03



/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date: 3/25/03



/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON (TURKEY) INC
Date: 3/25/03



/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF MADISON OIL TURKEY INC
Date: 3/25/03





                                       21


TOREADOR

/s/ Douglas W. Weir
- ----------------------------
ON BEHALF OF TOREADOR RESOURCES CORPORATION
Date: 3/25/03

































                                       22



                  SCHEDULE 1 - FORM OF CASHFLOW RECONCILIATION


SOURCES OF FUNDS                                                    DESCRIPTION

          French Operations

          Turkish Operations

          Trinidadian Operations

          US (Toreador) Operations

          Other
                                              ==============
          Total

USES OF FUNDS

          FRENCH           OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other
          =====================================
          TOTAL FRANCE

          TURKISH          OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other
          =====================================
          TOTAL TURKEY

          TRINIDADIAN      OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other
          =====================================
          TOTAL TRINIDAD

          US               OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other
          =====================================
          Total US (Toreador)

                                  ==========================
          TOTAL USES OF FUNDS




                                       23



                                   SCHEDULE 2

TOREADOR PAYMENT OBLIGATIONS




MONTH                      TARGET REPAYMENT              ACTUAL REPAYMENT        OUTSTANDING
                           (USD)                         (USD)                   TARGET
                                                                                 REPAYMENTS
                                                                                 (USD)
- ------------------------   ---------------------------   ----------------------- -----------------------
                                                                        
November 2002                 450,000                      300,000                 150,000
- ------------------------   ---------------------------   ----------------------- -----------------------
December 2002                 450,000                      150,000                 300,000
- ------------------------   ---------------------------   ----------------------- -----------------------
January 2003                  400,000                      150,000                 250,000
- ------------------------   ---------------------------   ----------------------- -----------------------
February 2003                 500,000                      400,000                 100,000
- ------------------------   ---------------------------   ----------------------- -----------------------

EX-10.30

                                                                   EXHIBIT 10.30

             [ON THE LETTERHEAD OF TOREADOR RESOURCES CORPORATION]

To:               Barclays Capital
                  5 The North Colonnade
                  Canary Wharf
                  London
                  E14 4BB


Attention:        Steven Funnell

                                                                25th March, 2003

Dears Sirs,

We refer to the waiver letter dated on or about today's date (the "WAIVER
LETTER"). Capitalised terms defined or used in the Waiver Letter have the same
meaning in this letter.

In consideration of your agreement to the terms of the Waiver Letter we agree:

1.       On or before 31st March, 2003, to issue and deliver to Barclays Bank
         PLC 1 warrant for up to 50,000 Shares at the Strike Price with an
         Expiration Date (as that term is defined in the warrant) of 14th March,
         2008.

2.       On or before 31st March, 2003, to reissue the warrants granted under
         the First Warrant Letter, reducing the strike price, as detailed in the
         First Warrant Letter, to the Strike Price.

3.       Subject to paragraph 4 below, on 7th April, 2003, issue and deliver to
         Barclays Bank PLC 1 warrant for the purchase of up to 100,000 Shares at
         the Second Strike Price with an Expiration Date (as that term is
         defined in the warrant) of 7th April, 2008.

4.       Paragraph 3 above shall not apply if as at 31st March, 2003 the ratio
         of the January 2003 NPV, as defined in the Waiver Letter, to Total
         Indebtedness is more than 1.5:1.

5.       The form of warrants to be issued pursuant to this letter shall be in
         such form as the Arranger may reasonably require.

6.       This letter may be executed in any number of counterparts.

7.       This letter is governed by and shall be construed in accordance with
         English law.

8.       Please countersign this letter (or a copy of it) where marked below to
         confirm your agreement to its terms.

9.       If a provision of this letter is or becomes illegal, invalid or
         unenforceable in any jurisdiction, that shall not affect;

         (a)      the legality, validity or enforceability, in that jurisdiction
                  or any other provision of this letter; or

         (b)      the legality, validity or enforceability, in other
                  jurisdictions of that or any other provision of this letter.




10.      In this letter:

         "SECOND STRIKE PRICE" means the price US$1 above the closing price of
         the Shares on 31st March, 2003.

         "SHARES" means fully paid and non-assessable shares of common stock of
         Toreador; and

         "STRIKE PRICE" means US$3.50.


Yours faithfully


/s/ Douglas W. Weir
- ------------------------
For and on behalf of
TOREADOR RESOURCES CORPORATION





We agree with the above.

/s/ Steven Funnell
- ------------------------
BARCLAYS CAPITAL
(the investment banking division of Barclays Bank PLC)

Date:

EX-10.31

                                                                   EXHIBIT 10.31


From:             Graham Martin
Sent:             Monday, February 03, 2003, 9:13 A.M.
To:               Frederic Auberty
cc:               Robertson, Andy; Geraldine Eden

Subject:          Re:  Karak/Trans-Dominion

Dear Frederic,

I confirm our agreement to the payments as scheduled in your e-mail below. As
regards interest, my understanding is that each payment after the first
(assuming it is made today) will also include an amount of interest at a rate of
7% per annum on the outstanding balance for the period from 3rd February (or
previous payment date) to the date of payment.


Regards,
Graham Martin





From:             Frederic Auberty
Sent:             30 January 2003, 17:34
To:               Graham Martin
Subject:          Karak/Trans-Dominion


Dear Mr. Martin:

In reference to our phone conversation of today, I am glad that we have been
able to reach an agreement regarding the repayment of US$ 350,000 due on or
before February 3rd 2003 which is as follows:

         Toreador will transfer US$ 35,000 on February 3, 2003.

         Toreador will make US$ 25,000 monthly payment until May 2003.

         Toreador will pay the balance by the end of May 2003.

         If not able to pay the balance by the end of May 2003: the monthly
payment will be increase to US$ 50,000.

         7% interest rate per year is included in each payment.

Please confirm the above, and provide me with wiring instructions. Thank you
again for your understanding and cooperation.

Best regards,

Frederic Auberty
V.P. International
Phone    +1 214 559-3933
Fax      +1 214 559-3945

EX-10.32

                                                                   EXHIBIT 10.32


To:      Madison Energy France S.C.S.
         (formerly Madison/Chart Energy S.C.S.) ("MEF")
         (the "BORROWERS' AGENT")

To:      Madison Oil Company Europe ("MOCE")
         Madison Oil France S.A. ("MOF")
         Madison Energy France S.C.S.
         (the "BORROWERS")

To:      Madison Oil Company ("MOC")
         Madison Petroleum Inc. ("MPI")
         Madison Oil Company Europe
         Madison Oil France S.A.
         Madison Energy France S.C.S.
         Madison (Turkey) Inc ("MADISON TURKEY")
         Madison Oil Turkey Inc ("MOTI")
         (the "GUARANTORS")

To:      Toreador Resources Corporation
         ("TOREADOR")

                                                                 11th April 2003


WAIVER AND CONSENT - VARIOUS ISSUES

We refer to the Revolving Credit Facility Agreement dated 30th March, 2001
between the Borrowers, the Guarantors, Barclays Capital as Arranger, the Banks
(as defined therein) and Barclays Bank PLC as Facility Agent, Technical Agent,
Ancillary Bank and US Security Trustee as amended (the "CREDIT AGREEMENT"). We
also refer to a waiver and consent letter dated 8th November, 2001 relating to
the merger of MOC with Toreador (the "MERGER WAIVER LETTER"), to a waiver and
consent letter dated 21st March, 2002 relating to various issues (the "MARCH
WAIVER LETTER") and a waiver and consent letter dated 31st December, 2002
relating to various issues (the "DECEMBER WAIVER LETTER").

All of the Banks, the Ancillary Bank and the Hedging Bank, have authorised the
Facility Agent to enter into this letter on their behalf.

1.       INTERPRETATION

         In this letter, unless otherwise defined or the context otherwise
         requires:

         (a)      terms defined or used in the Credit Agreement have the same
                  meaning in this letter;

         (b)      references to specific numbered clauses are clauses of the
                  Credit Agreement;

         (c)      references to paragraphs are, unless stated otherwise,
                  references to paragraphs of this letter;

         (d)      "ALLEN & OVERY INVOICE" means the invoice for L 44,768.52
                  delivered by Allen & Overy to Barclays Capital dated 29th
                  January, 2003 in respect of work done in


                                       2


                  connection with the December Waiver Letter, the First Warrant
                  Letter, the Toreador Guarantee and the related subordination
                  agreement.

         (e)      "BANK OF TEXAS LOAN AGREEMENT" means the loan agreement dated
                  16th February, 2001 between Toreador Resources Corporation,
                  Toreador Exploration and Production Inc, Toreador Acquisition
                  Corporation, Tormin Inc and the Bank of Texas National
                  Association, as amended from time to time.

         (f)      "BEST ENDEAVOURS" means, promptly at the written request of
                  the Facility Agent, Toreador shall make a written request of
                  the Bank of Texas N.A.;

         (g)      "EQUITY ISSUE PROCEEDS" means the proceeds (whether in cash or
                  in kind) of any equity or capital issue (to include, without
                  limitation, share placement, the issue of preferred stock or
                  subordinated loan stock or any other similar instrument) (the
                  "EQUITY ISSUE");

         (h)      "FIRST WARRANT LETTER" means the warrant letter dated 21st
                  March, 2002 between Toreador and the Arranger, as amended.


         (i)      "MERGER AGREEMENT" means the merger agreement dated as of 3rd
                  October, 2001 between MOC, Toreador and MOC Acquisition
                  Corporation (a wholly-owned subsidiary of Toreador) pursuant
                  to which, subject to the satisfaction of certain conditions,
                  MOC and MOC Acquisition Corporation will merge and MOC shall
                  be the surviving corporation;

         (j)      "MOC GROUP" means MOC and all of its subsidiaries.

         (k)      "SECOND WARRANT LETTER" means the warrant letter dated on or
                  about the date of this letter between Toreador and the
                  Arranger.

         (l)      "STRATEGIC PLAN" means the strategic plan submitted to the
                  Facility Agent by Toreador on 12th December, 2002;

         (m)      "SUBORDINATION AGREEMENT" means the Subordination Agreement
                  dated 30th March, 2001 between members of the Madison Group as
                  debtors, the Facility Agent and MOF, MOC, MOCE and MPI.

         (n)      "SUBORDINATION AND SUPPORT AGREEMENT" means the subordination
                  and support agreement between Toreador, MOC and the Facility
                  Agent dated November, 2001 entered into in connection with the
                  Merger Waiver Letter;

         (o)      "SURPLUS SALE PROCEEDS" means, in relation to any US asset of
                  the Toreador Group, the net sale proceeds paid to or to the
                  order of any member of the Toreador Group from the sale of
                  that asset which Bank of Texas, N.A., in its sole and absolute
                  discretion, permits to be paid to the Facility Agent;

         (p)      "TOREADOR GROUP" means, at any time Toreador and all of its
                  Subsidiaries for the time being;

         (q)      "TOREADOR GUARANTEE" means a Toreador subordinated guarantee
                  of all of the obligations of the Obligors under the Finance
                  Documents;


                                       3


         (r)      "TOREADOR SUBORDINATED REVOLVING CREDIT AGREEMENT" means the
                  subordinated revolving credit agreement dated as of 3rd
                  October, 2001 between MOC and Toreador pursuant to which
                  Toreador agrees to advance by way of loan certain monies to
                  MOC;

         (s)      "TOREADOR SUBORDINATED REVOLVING CREDIT NOTE" means the
                  subordinated revolving credit note dated as of 3rd October,
                  2001 between MOC and Toreador;

         (t)      "TRINIDADIAN ASSETS" means:

                  (i)      all of the shares in Trans Dominion Holdings Limited;

                  (ii)     all of Trans Dominion Holdings Limited's present and
                           future shares in Trinidad Exploration and Development
                           Ltd; and

                  (iii)    any present and future interest of Trans Dominion
                           Holdings Limited in the Bonasse oil field in Trinidad
                           and Tobago and the related Southwest Cedros
                           Peninsular Exploration Licence;

         (u)      "TRINIDADIAN REVENUE" means all monies arising, received from
                  and in relation to the Trinidadian Assets to be applied in
                  accordance with Clause 7.4, except for monies received from
                  the sale of all, or part of the Trinidadian Assets, which
                  shall be applied in accordance with Clause 4.5.

         (v)      "TRINIDADIAN REVENUE ACCOUNTS" means the revenue accounts to
                  be opened with the Account Bank in London and maintained by
                  Trans Dominion Holdings Limited, which shall be maintained in
                  accordance with the directions of the Facility Agent;

         (w)      "TURKISH CAPITAL REPATRIATION" means any amounts paid to
                  Toreador or any Obligor in relation to the repatriation of the
                  registered capital of any member of the Toreador Group in
                  Turkey;

         (x)      "TURKISH PERMITTED PAYMENTS" means:

                  (i)      the costs referred to in paragraphs (a)(i) and
                           (a)(ii) of the definition of "Permitted Payment" in
                           the Credit Agreement except that reference to
                           Borrower Borrowing Asset, Borrowing Base Petroleum or
                           Borrowing Base Interest in that definition shall be
                           construed as a reference to Turkish Interest, Turkish
                           Petroleum and Turkish Asset);

                  (ii)     any taxes payable by MOTI and Madison Turkey;

                  (iii)    any:

                           (a)      exploration and appraisal expenditure;

                           (b)      general and administrative expenditure; or

                           (c)      capital expenditure not falling within
                                    paragraph (i) above,

                           payable by MOTI and Madison Turkey, as applicable, to
                           the extent the Majority Banks expressly agree or
                           require in writing (but not further or otherwise);
                           and


                                       4


                  (iv)     any other expenditure that the Majority Banks agree
                           may be a Turkish Permitted Payment;

         (y)      "TURKISH REVENUE" means:

                  (i)      the gross proceeds (without any deductions
                           whatsoever) of any disposal of Turkish Petroleum;

                  (ii)     any sales tax payable on the amount referred to in
                           paragraph (i) above;

                  (iii)    any other amount payable to MOTI, Madison Turkey and
                           MOC in respect of any Turkish Petroleum, Turkish
                           Interest or Turkish Asset.

         (z)      "TURKISH REVENUE ACCOUNTS" means the revenue accounts to be
                  opened with the Account Bank in London, which shall be
                  maintained in accordance with the directions of the Facility
                  Agent;

         (aa)     "TURKISH ASSET" means:

                  (A)      the Cendere oil field in Turkey;

                  (B)      the Zeynel oil field in Turkey;

                  (C)      the Boyabet oil field in Turkey; and

                  (D)      the Thrace Basin in Turkey;

         (bb)     "TURKISH INTEREST" means: all of the Obligors' present and
                  future interest in a Turkish Asset and all agreements,
                  facilities or insurances relative to that Turkish Asset or to
                  Turkish Petroleum;

         (cc)     "TURKISH PETROLEUM" means in respect of a Turkish Asset, all
                  petroleum won and saved from that Turkish Asset that accrues
                  to the Turkish Interest in that Turkish Asset (including,
                  without limitation, any such petroleum that is royalty
                  petroleum);

         (dd)     "VOTING AGREEMENT" means the voting agreement dated as of 3rd
                  October, 2001 between Toreador, Herbert L. Brewer, David M.
                  Brewer and PHD Partners, LP;

         (ee)     "WARRANT" means the warrants issued or to be issued pursuant
                  to the Warrant Letters; and

         (ff)     "WARRANT LETTER" means the First Warrant Letter or the Second
                  Warrant Letter.

2.       WAIVERS AND CONSENTS

2.1      WAIVER OF BREACHES OF FINANCE DOCUMENTS

         Subject to the terms and conditions of this letter, Barclays Bank PLC,
         as Facility Agent confirms that the Banks have agreed to waive the
         following breaches of the Finance Documents:


                                       5


         (a)      all currently outstanding breaches of Clause 6.1 (Repayment),
                  as amended by the December Waiver Letter;

         (b)      failure by Toreador to provide the Toreador Guarantee in
                  accordance with Clause 7.4 of the December Waiver Letter;

         (c)      any breach of Clause 20.14 (Cover Ratios) as a consequence of
                  the Forecast re-determination dated 30th January, 2003;

         (d)      failure by Toreador and the Obligors to procure that, by 31st
                  January, 2003, all of the Toreador Group's shares in Trinidad
                  Exploration and Development Limited and Trans Dominion
                  Holdings Limited are pledged to the Facility Agent in
                  accordance with Clause 7.6 of the December Waiver Letter.

2.2      MERGER WAIVER AND CONSENT

         Barclays Bank PLC, as Facility Agent, consents to the merger of
         Toreador and MOC and confirms that the Banks have agreed to waive the
         following Events of Default:

         (a)      under Clauses 19.12(a) (Mergers and acquisitions) and 20.3
                  (Breach of other obligations) and Clause 20.20(d) (Change of
                  control) constituted by MOC entering into and performing the
                  Merger Agreement and the Voting Agreement and by the
                  occurrence of the Effective Time (as that term is defined in
                  the Merger Agreement);

         (b)      under Clauses 19.13 (Other Financial Indebtedness) and 20.3
                  (Breach of other obligations) constituted by MOC incurring any
                  of the indebtedness referred to in paragraph 8
                  (Characterisation of Toreador Payments) below;

         (c)      under Clauses 19.14 (Loans) and 20.3 (Breach of other
                  obligations) constituted by MOC making loans to the Borrower
                  referred to in paragraph 8 (Characterisation of Toreador
                  Payments) below; and

         (d)      under Clauses 19.13 (Other Financial Indebtedness) and 20.3
                  (Breach of other obligations) constituted by the Borrowers
                  being deemed to have borrowed from MOC as referred to in
                  paragraph 8 (Characterisation of Toreador Payments) below.

3.       CONSOLIDATION OF WAIVER LETTERS

         Subject to the terms and conditions of this letter, Barclays Bank PLC,
         as Facility Agent, confirms that the Banks have agreed to permanently
         waive any and all Events of Default that have arisen under the Merger
         Waiver Letter, the March Waiver Letter and the December Waiver Letter
         and all the parties to this letter agree that the Merger Waiver Letter,
         the March Waiver Letter and the December Waiver Letter shall be
         terminated and of no further effect (save in relation to the waivers
         granted under those letters).


                                       6


4.       REPAYMENT

4.1      REPAYMENT

         Clause 6.1 (Repayment) shall be suspended in accordance with paragraph
         4.2 (Term of Suspension) below and, during the term of suspension,
         shall be replaced with the following provisions:

         The Borrowers shall, on the last Business Day of each of month until
         (and including) December 2003, repay an amount of the Loans equal to
         the greater of:

                  (i)      $400,000; and

                  (ii)     the aggregate of:

                           (A)      French Revenue, less any Permitted Payments;
                                    and

                           (B)      Turkish Revenue, less Turkish Permitted
                                    Payments, and Trinidadian Revenue as
                                    determined in accordance with the terms of
                                    this Waiver Letter.

4.2      TERM OF SUSPENSION

         Clause 6.1 (Repayment) shall be suspended until the earlier of:

         (a)      the first Business Day of January, 2004; or

         (b)      such time as (i) the ratio of the Relevant NPV derived from
                  the Forecast prepared as of 30th April, 2003 in accordance
                  with paragraph 5 (Forecasts) of this letter to Total
                  Indebtedness is not less than 1.5:1; and (ii) the outstanding
                  Loans do not exceed the Total Commitments.

4.3      TURKISH CAPITAL REPATRIATION PREPAYMENT

         If, during the suspension of Clause 6.1 (Repayment) in accordance with
         paragraph 4.2 (Term of Suspension) above, either of Madison Turkey,
         MOTI or any other Obligor receives any Turkish Capital Repatriation
         (the relevant company that receives such monies being referred to in
         this paragraph 4.3 as the "recipient"):

         (i)      the recipient shall immediately notify the Facility Agent of
                  all amounts of Turkish Capital Repatriation received;

         (ii)     the recipient shall ensure that no money received as Turkish
                  Capital Repatriation is transferred to any other member of the
                  Toreador Group; and

         (iii)    on demand by the Facility Agent the recipient shall
                  immediately pay to the Facility Agent the balance of the
                  Turkish Capital Repatriation (less any amount thereof that is
                  reinvested in Turkey solely for the purposes of maximising
                  future Turkish Capital Repatriations as detailed in the
                  Strategic Plan) in performance of the prepayment obligation
                  (if the recipient is a Borrower) or in performance of that
                  Guarantor's guarantee of the prepayment obligation (if the
                  recipient is a Guarantor) (and Clause 7.7(b) (Miscellaneous
                  provisions) shall apply to any such prepayment).


                                       7



4.4      ASSET SALE PROCEEDS PREPAYMENT

         Subject to paragraph 7.8(a)(iii) (Restrictions under Bank of Texas Loan
         Agreement), if, during the suspension of Clause 6.1 of the Credit
         Agreement in accordance with paragraph 4.2 (Term of Suspension) above,
         any member of the Toreador Group sells any of its US assets, Toreador
         agrees to pay to the Facility Agent an amount equal to the Surplus Sale
         Proceeds, but only if Bank of Texas N.A. expressly consents, in its
         sole and absolute discretion, and such payment shall be deemed to be a
         prepayment of Loans by the Borrowers in an aggregate principal amount
         equal to the Surplus Sale Proceeds (and Clause 7.7(b) (Miscellaneous
         provisions) shall apply to any such prepayment).

4.5      TRINIDADIAN ASSET SALES PREPAYMENT

         (a)      Subject to sub paragraph (b) below and subject to any relevant
                  consents required under Trinidadian laws and (if required) the
                  consent of the Trinidad Exploration and Development Ltd.
                  Shareholders (which consents the Obligors undertake to use
                  their best endeavours to obtain), if MOC or any Obligor sells
                  or transfers any of its interest in the Trinidadian Assets
                  (either directly or indirectly, including by way of share
                  sale) (the relevant company that receives such monies being
                  referred to in this paragraph 4.5 as the "recipient"):

                  (i)      the recipient shall immediately notify the Facility
                           Agent of all amounts realised from such sale or
                           transfer;

                  (ii)     the recipient shall ensure that no money received
                           from such sale or transfer is transferred to any
                           other member of the Toreador Group; and

                  (iii)    on demand by the Facility Agent, the recipient shall
                           immediately pay to the Facility Agent the net sale
                           proceeds of such sale in performance of the
                           prepayment obligation (if the recipient is a
                           Borrower) or in performance of that Guarantor's
                           guarantee of the prepayment obligation (if the
                           recipient is a Guarantor) (and Clause 7.7(b)
                           (Miscellaneous provisions) shall apply to any such
                           prepayment).

         (b)      No member of the MOC Group will sell or transfer (either
                  directly or indirectly, including by way of share sale or
                  intra group transfer) any of its interest in the Trinidadian
                  Assets without the prior written consent of the Facility
                  Agent, except in the event of dilution pursuant to the
                  Shareholders Agreement between Anglo-African Energy, Inc. and
                  Trans-Dominion Holdings Limited.

4.6      MISCELLANEOUS

         (a)      The following amendments to the Credit Agreement effected by
                  paragraph 4 of the Merger Waiver Letter and paragraph 13 of
                  the March Waiver Letter remain effective and are restated as
                  follows:

                  (i)      if the Borrowers repay or prepay any outstanding
                           Loan, then the Total Commitments shall, immediately
                           upon that repayment or prepayment being made,
                           automatically be reduced by an amount equal to the
                           principal so repaid or prepaid;

                  (ii)     Clause 6.2 shall be amended so the words "Tranche A"
                           is inserted before "Tranche B" and the words ", but
                           any amount repaid under Tranche A may


                                       8


                           subsequently be re-borrowed on and subject to the
                           provisions of the Agreement" are deleted; and

                  (iii)    Clause 7.7(c) shall be amended so that the words "Any
                           amount prepaid under Tranche A may subsequently be
                           re-borrowed on and subject to the terms of this
                           Agreement but" are deleted and the words "Tranche A,"
                           are inserted before "Tranche B".

         (b)      The Borrowers shall ensure that the last day of an Interest
                  Period for one or more Loans coincides with the date
                  repayments or prepayments are to be made under this letter,
                  and shall select Interest Periods accordingly and for this
                  purpose (but not otherwise) the Borrowers may select an
                  Interest Period of less than one month.

         (c)      Amounts prepaid in accordance with paragraphs 4.3 (Turkish
                  Capital Repatriation Prepayment) to 4.5 (Trinidadian Asset
                  Sales Prepayment) shall not be applied against or reduce the
                  repayment obligations under paragraph 4.1 (Repayment).

5.       FORECASTS

         The calculation of the Relevant NPV on each Calculation Date in
         accordance with Clause 16.1(d)(i) (General) shall be suspended for the
         duration of the suspension of Clause 6.1 (Repayment) in accordance with
         paragraph 4 (Repayment) above, except that the Relevant NPV shall be
         calculated as of a 30th April, 2003 Calculation Date in accordance with
         the provisions of Clause 16 (Forecasts), subject to the following
         revisions:

         (i)      references to 45 days in Clause 16.2(a) shall be to 16 days;

         (ii)     references to 28 days in Clause 16.2(b) shall be to 9 days;

         (iii)    references to 7 days in Clause 16.2(c) shall be to 5 days.

6.       INFORMATION COVENANTS

6.1      STRATEGIC PLAN

         (a)      On 30th March, 2003 and on the 15th and 30th of each month
                  thereafter, Toreador shall provide to the Facility Agent an
                  update of the Strategic Plan incorporating the following
                  information in reasonable detail:

                  (i)      details of the progress achieved in relation to each
                           of the options outlined in the Strategic Plan and the
                           updates thereto;

                  (ii)     Toreador's assessment of the likelihood of each
                           option referred to above coming to fruition by 30th
                           April, 2003;

                  (iii)    details of any other option being pursued by Toreador
                           with a view to restoring the January 2003 NPV to
                           Total Indebtedness to not less than 1.5:1 by 30th
                           April, 2003; and

                  (iv)     full details of any tax advice received by Toreador
                           in relation to the sale of any Obligor or any of the
                           Borrowing Base Assets.


                                       9


         (b)      Toreador shall immediately notify the Facility Agent if it
                  becomes aware that any of the options outlined in the
                  Strategic Plan is no longer being pursued by Toreador or the
                  proposed counterparty or, as a result of any other event or
                  circumstance, is unlikely to come to fruition by 30th April,
                  2003, providing reasonable detail of the particular event or
                  circumstances.

6.2      CASHFLOW FORECASTS

         (a)      Toreador shall immediately notify the Facility Agent of any
                  events or circumstances that are likely to cause a deviation
                  from the cashflow forecast provided by Toreador to the
                  Facility Agent on 5th January, 2003 to the extent that it is
                  likely to prevent the Borrowers complying with the repayment
                  schedule in paragraph 4.1 (Repayment) or cause liquidity
                  problems in the Toreador Group, providing details of the
                  particular events or circumstances and a revised forecast.

         (b)      Toreador shall provide to the Facility Agent, on a weekly
                  basis, a certificate signed by the Chief Financial Officer of
                  Toreador certifying that that the Toreador Group has
                  sufficient working capital to continue trading and that the
                  Toreador Group's cashflow situation is manageable.

6.3      OTHER INFORMATION

         Toreador shall promptly notify the Facility Agent:

         (a)      of the receipt by any member of the Toreador Group of any
                  Surplus Sale Proceeds; and

         (b)      if any creditor of any member of the Toreador Group takes any
                  enforcement action, or notifies any member of the Toreador
                  Group of its intention to take enforcement action, in relation
                  to any amounts owing to it.

7.       COVENANTS

7.1      CAPITAL EXPENDITURE RESTRICTIONS

         (a)      The Obligors shall procure that no Obligor (excluding Toreador
                  and any other borrower under the Bank of Texas Loan Agreement)
                  shall make, nor incur any obligation or liability for or in
                  respect of any capital expenditure except for any capital
                  expenditure that a prudent operator would expend to maintain
                  (rather than develop) the relevant assets.

         (b)      Toreador shall within fifteen days of the end of each month
                  provide to the Facility Agent a cashflow reconciliation for
                  that month for all of the members of the Toreador Group (in
                  the form of the Schedule 1 to this letter), reconciling the
                  sources of funds and uses of funds and including details of
                  that month's capital expenditures.

         (c)      Paragraph (i) of Clause 19.22 (Capital expenditure), shall not
                  apply.

         (d)      Toreador shall, within fifteen days of the end of each month,
                  provide to the Facility Agent a translation and cashflow
                  reconciliation of the account statements for that month in
                  relation to the Turkish Assets with full details of all income
                  and expenditure items.


                                       10


7.2      TURKISH CAPITAL REPATRIATION

         Toreador and the Obligors shall use best endeavours to maximise Turkish
         Capital Repatriation proceeds within as short a time frame as is
         reasonably practicable.

7.3      TOREADOR EQUITY ISSUES

         (a)      Toreador shall use best endeavours to maximise Equity Issue
                  Proceeds in the period to 30th April, 2003 and shall pay such
                  portion of such Equity Issue Proceeds to the Facility Agent to
                  the extent consented to by Bank of Texas, N.A. in its sole and
                  absolute discretion.

         (b)      Toreador undertakes to and shall procure that its subsidiaries
                  shall, in connection with any Equity Issue, make full and
                  proper disclosure in accordance with all applicable laws
                  and/or requirements of any regulatory authority

7.4      TURKISH AND TRINIDADIAN CASHFLOW

         (a)      Without prejudice to the Obligors' obligations under the
                  Credit Agreement and subject to the following provisions of
                  this paragraph 7.4 (Turkish and Trinidadian Cashflow), MOTI
                  and Madison Turkey and MOC shall pay, and MOC shall procure
                  that MOTI and Madison Turkey pay all Turkish Revenue (to the
                  extent permitted by Turkish law), less Turkish Permitted
                  Payments, and all Trinidadian Revenue directly to the Facility
                  Agent, unless any such amount is received in another currency,
                  in which case (where applicable) MOTI, Madison Turkey and MOC
                  shall, and MOC shall procure that MOTI and Madison Turkey
                  shall, immediately upon receipt convert that amount to Dollars
                  and pay them directly to the Facility Agent, in both cases to
                  be applied in repayment of the Loans and in performance of
                  that Guarantor's guarantee of the repayment obligation as
                  contemplated in Clause 4.1(a)(ii).

         (b)      Subject in each case with regard to the Turkish Revenue
                  Accounts to the extent permitted by Turkish law;

                  (i)     MOC shall procure that, by no later than 30th April,
                          2003, Madison Turkey and MOTI shall open the Turkish
                          Revenue Accounts and Trans Dominion Holdings Limited
                          shall open the Trinidadian Revenue Accounts.

                  (ii)    Subject to the opening of the Turkish Revenue Accounts
                          and the Trinidadian Revenue Accounts in accordance
                          with sub-paragraph (b)(i) above, MOC shall procure
                          that, from the first Business Day of May, 2003, all
                          Turkish Revenue is paid into the Turkish Revenue
                          Accounts and all Trinidadian Revenue is paid into the
                          Trinidadian Revenue Accounts.

                  (iii)   MOTI and Madison Turkey shall be permitted to make
                          such Turkish Permitted Payments from the Turkish
                          Revenue Accounts as approved in writing by the
                          Facility Agent.

         (c)      To the extent permitted by Turkish law, MOC shall no later
                  than 30th April, 2003:

                  (i)      procure that the Facility Agent is granted a Security
                           Interest over the Turkish Revenue Accounts by way of
                           agreements in form and substance satisfactory to the
                           Facility Agent (the "TURKISH REVENUE ACCOUNTS
                           SECURITY DOCUMENTS"); and


                                       11


                  (ii)     deliver a legal opinion from a reputable law firm in
                           respect of all relevant jurisdictions in a form and
                           substance satisfactory to the Facility Agent in
                           relation to the Turkish Revenue Accounts Security
                           Documents.

         (d)      MOC shall no later than 30th April, 2003:

                  (i)      procure that the Facility Agent is granted a Security
                           Interest over the Trinidadian Revenue Accounts by way
                           of agreements in form and substance satisfactory to
                           the Facility Agent (the "TRINIDADIAN REVENUE ACCOUNTS
                           SECURITY DOCUMENTS"); and

                  (ii)     deliver a legal opinion from a reputable law firm in
                           respect of all relevant jurisdictions in a form and
                           substance satisfactory to the Facility Agent in
                           relation to the Trinidadian Revenue Accounts Security
                           Documents.

         (e)      Without limiting the Facility Agent's rights under Clause
                  19.3(d) (Borrowing Base Asset and similar information), the
                  Borrower's Agent shall supply to the Facility Agent (in
                  sufficient copies for all of the Banks unless the Facility
                  Agent agrees otherwise) the information described in Clause
                  19.3(a)(i), (ii) and (iii) (Borrowing Base Asset and similar
                  information), provided that the wording of that Clause shall
                  be deemed amended for these purposes such that each reference
                  to "Borrowing Base Asset" shall be deemed to be a reference to
                  Turkish Asset.

         (f)      Toreador undertakes to deliver promptly to the Facility Agent
                  such information and evidence as it may from time to time
                  require in order to check and verify the amount of any Turkish
                  Revenue, Trinidadian Revenue, or Turkish Permitted Payment.

         (g)      Each Obligor shall do all things required by the Facility
                  Agent for the granting, perfecting or protecting of any
                  security intended to be granted under the Turkish Revenue
                  Accounts Security Document and the Trinidadian Revenue
                  Accounts Security Document.

7.5      TRANS DOMINION HOLDINGS LIMITED

         Subject to obtaining any relevant consents under Trinidadian laws and
         (if required) the consent of the Trinidad Exploration and Development
         Ltd. Shareholders, and (if required) the consent of Petroleum Company
         of Trinidad and Tobago Limited (which consents MOC and the Obligors
         agree to use best endeavours to obtain):

         (a)      to procure that, by 30th April, 2003, (i) all of the MOC
                  Group's shares in Trans Dominion Holdings Limited and (ii) all
                  of Trans Dominion Holdings Limited's shares in Trinidad
                  Exploration and Development Ltd. are pledged to the Facility
                  Agent on behalf of the Finance Parties by way of a security
                  agreement in form and substance satisfactory to the Facility
                  Agent and that by the same date legal opinions relating
                  thereto are delivered to the Facility Agent from reputable law
                  firms in all relevant jurisdictions in each case in form and
                  substance satisfactory to the Facility Agent; and

         (b)      to procure that Trans Dominion Holdings Limited:

                  (i)      promptly notifies the Facility Agent when Trans
                           Dominion Holdings Limited enters into any agreement
                           relating to the Trinidadian Assets ("RELEVANT
                           AGREEMENT");


                                       12


                  (ii)     after notice by the Facility Agent to the Borrower's
                           Agent that the Facility Agent requires security to be
                           granted to it for the benefit of the Finance Parties,
                           enters into an agreement granting a Security Interest
                           over that Relevant Agreement above in form and
                           substance satisfactory to the Facility Agent
                           ("SECURITY DOCUMENT"); and

                  (iii)    delivers a legal opinion from a reputable law firm in
                           respect of all relevant jurisdictions in a form and
                           substance satisfactory to the Facility Agent in
                           relation to each of the Security Documents,

                  and each Obligor shall do all things reasonably required by
                  the Facility Agent for the granting, perfecting or protecting
                  of any security intended to be granted under a Security
                  Document.

7.6      THE MERGER AGREEMENT

         (a)      MOC undertakes not to agree to any waiver, amendment,
                  termination or cancellation of, or of any term of, the Merger
                  Agreement or the Voting Agreement.

         (b)      Toreador agrees to waive any default, event of default or
                  breach of representation or warranty under the Merger
                  Agreement, the Voting Agreement, the Toreador Subordinated
                  Revolving Credit Agreement and the Toreador Subordinated
                  Revolving Credit Note constituted by MOC issuing shares to
                  Barclays Nominees (Branches) Limited, and the Obligors
                  undertaking to deliver shares, in accordance with paragraph
                  3(a)(ii) of the Merger Waiver Letter.

7.7      TURKEY

         Toreador and MOCE undertake to procure that, by no later than
         forty-five days after Madison Turkey has received all Turkish Capital
         Repatriations that it is entitled to:

         (a)      Madison Turkey shall have transferred all of its assets,
                  liabilities, business and undertakings to MOTI and shall be
                  wound up and dissolved; and

         (b)      that MOTI shall have discharged in full all of the
                  consideration for that transfer.

7.8      RESTRICTIONS UNDER BANK OF TEXAS LOAN AGREEMENT

         (a)      Toreador undertakes to use Best Endeavours to obtain any
                  necessary waiver of or amendment (if any) to the provisions of
                  the Bank of Texas Loan Agreement so as to enable:

                  (i)      Toreador and the other borrowers under the Bank of
                           Texas Loan Agreement to provide financial support to
                           the MOC Group as set out in Schedule 2;

                  (ii)     Toreador to enter into the Toreador Guarantee; and

                  (iii)    Toreador to make any payments to the Facility Agent
                           that may arise in accordance with paragraph 4.4
                           (Asset Sales Proceeds Prepayment).


                                       13


                  and in the absence of such express amendment, waiver or
                  consent of Bank of Texas, N.A., neither Toreador nor any
                  member of the Toreador Group shall take any of these actions.

         (b)      On obtaining such waiver to, or amendment of, the provisions
                  of the Bank of Texas Loan Agreement as is required to enable
                  Toreador and the other borrowers under that agreement to
                  provide financial support to the MOC Group in accordance with
                  paragraph 7.8(a)(i) above, Toreador shall use its best
                  endeavours to procure that the Outstanding Target Repayments
                  of the Loans, as defined and set out in Schedule 2 to this
                  letter, are promptly paid to the Facility Agent.

         (c)      On obtaining such waivers to, or amendments of, the provisions
                  of the Bank of Texas Loan Agreement as are required to enable
                  Toreador to enter into the Toreador Guarantee in accordance
                  with paragraph 7.8(a)(ii) above, Toreador shall immediately:

                  (i)      enter into the Toreador Guarantee; and

                  (ii)     deliver a legal opinion from a reputable law firm in
                           respect of all relevant jurisdictions in a form and
                           substance satisfactory to the Facility Agent in
                           relation to its entry into the Toreador Guarantee.

         (d)      Except for such further consent as is required in paragraphs
                  4.4, 7.3 and 7.8(a), Toreador expressly confirms that the
                  performance of its obligations under this letter does not
                  require the consent of Bank of Texas, N.A. or, if required,
                  such consent has been obtained.

7.9      TURKISH CAPITAL REPATRIATION

         MOC shall procure that the Obligors comply with their obligations under
         paragraph 4.3 (Turkish Capital Repatriation Prepayment).

7.10     BANK OF TEXAS LOAN AGREEMENT

         (a)      Subject to sub-paragraph (b) below, in the event that the Bank
                  of Texas Loan Agreement is repaid, immediately prior to such
                  repayment Toreador agrees to notify the Facility Agent and
                  immediately after such repayment, Toreador agrees to provide
                  such guarantees and financial support as required by the
                  Facility Agent.

         (b)      Sub-paragraph (a) above will not apply in the event that Bank
                  of Texas N.A. transfers or novates any of its interest in the
                  Bank of Texas Loan Agreement to another entity.

8.       CHARACTERISATION OF TOREADOR PAYMENTS

         (a)      Toreador agrees that any payment made or deemed made to MOC by
                  Toreador pursuant to this letter, the December Waiver Letter,
                  the March Waiver Letter or the Merger Waiver letter shall be
                  "Junior Debt" for the purposes of the Subordination and
                  Support Agreement. MOC agrees that any payment made or deemed
                  made by MOC to any of the Borrowers pursuant to this letter,
                  the December Waiver Letter, the March Waiver Letter or the
                  Merger Waiver Letter shall be "Junior Debt" for the purposes
                  of the Subordination Agreement.

         (b)      An amount equal to each payment made by Toreador to the
                  Facility Agent in accordance with this letter or the December
                  Waiver Letter and for the avoidance of


                                       14


                  doubt, any amounts previously paid by Toreador under paragraph
                  7(b) of the Merger Waiver Letter or 12(b) of the March Waiver
                  Letter shall be deemed to be:

                  (i)      a non-interest bearing loan made by Toreador to MOC
                           repayable (subject to the Subordination and Support
                           Agreement on demand (or a loan on such other terms as
                           are agreed by MOC and Toreador (in any case subject
                           to the Subordination and Support Agreement)); and

                  (ii)     a non-interest bearing loan made by MOC to the
                           Borrowers repayable (subject to the Subordination
                           Agreement on demand (or a loan on such other terms as
                           are agreed by MOC and the Borrowers (in any case
                           subject to the Subordination Agreement)).

9.       AMENDMENT TO THE CREDIT AGREEMENT

         The amendments to the Credit Agreement effected by paragraph 4 of the
         Merger Waiver Letter and paragraph 13 of the March Waiver Letter remain
         effective and are restated as follows:

         (a)      paragraph (d) in the definition of "Permitted Payment" in
                  Clause 1.1 (Definitions) shall be deleted and shall be
                  replaced with:

                  "(d)     [Not used];";

         (b)      Clause 19.25(a)(iii) (Turkish business) shall be deleted and
                  shall be replaced with:

                  "(iii)   in any event, does not make any payment to any other
                           member of the Toreador Group except for payment of
                           the kind contemplated by paragraph (ii)(B) above;";

         (c)      for the purposes of 20.3 (Breach of other obligations), 20.4
                  (Misrepresentation), 20.12 (Unlawfulness), 20.13
                  (Effectiveness of Security), 20.22 (U.S. Bankruptcy Laws) and
                  20.23 (ERISA) the word "Obligor" shall be deemed to include
                  Toreador;

         (d)      for the purposes of Clauses 20.5 (Cross-default), 20.6
                  (Insolvency), 20.7 (Insolvency proceedings), 20.8 (Appointment
                  of receivers and managers), 20.9 (Creditor's processes), 20.10
                  (Analogous proceedings), 20.11 (Cessation of business) and
                  20.17 (Litigation) the phrase "member of the Group" shall be
                  deemed to include Toreador;

         (e)      Clause 20.20(d) (Change of Control) shall be deleted and shall
                  be replaced with:

                  "(d)     MOC is not, or ceases to be, a wholly-owned
                           subsidiary of Toreador Resources Corporation; or";
                           and

         (f)      a new Clause 20.20(e) (Change of Control) of the Credit
                  Agreement shall be inserted as follows:

                  "(e)     any single person, or group of persons acting in
                           consort (as defined in the City Code on Takeovers and
                           Mergers) acquires control (as defined in Section 416
                           of the Income and Corporation Taxes Act 1998) of
                           Toreador Resources Corporation.".


                                       15


10.      CONFIRMATIONS

10.1     GUARANTEES

         Each Guarantor agrees, and represents and warrants to each Finance
         Party as at the date it executes this letter:

         (a)      that the arrangements contemplated by this letter, the Merger
                  Agreement and the Voting Agreement and the entry into and
                  performance of the Merger Agreement and the occurrence of the
                  Effective Time (as defined in the Merger Agreement) do not in
                  any way affect the guarantee and undertakings given by it
                  under Clause 15 (Guarantee); and

         (b)      that the guarantee given by it under Clause 15 (Guarantee) is
                  a continuing guarantee, in full force and effect, and will
                  extend to the ultimate balance of all sums payable by the
                  Obligors under the Finance Documents, regardless of the
                  arrangements contemplated by this letter, the entry into and
                  performance of the Merger Agreement and the occurrence of the
                  Effective Time (as defined in the Merger Agreement) and any
                  intermediate payments or discharge in whole or in part
                  (including, without limitation, the prepayments contemplated
                  by this letter).

10.2     MOC

         MOC agrees, and represents and warrants to each Finance Party as at the
         date it executes this letter:

         (a)      that the arrangements contemplated by this letter and the
                  entry into and performance of the Merger Agreement and the
                  occurrence of the Effective Time (as defined in the Merger
                  Agreement) do not in any way affect any of the Finance
                  Documents; and

         (b)      that its obligations under the Finance Documents are in full
                  force and effect and are binding on, and enforceable against,
                  MOC regardless of the arrangements contemplated by this letter
                  or the entry into and performance of the Merger Agreement and
                  the occurrence of the Effective Time (as defined in the Merger
                  Agreement)).

11.      REPRESENTATIONS AND WARRANTIES

         (a)      Toreador and each Obligor makes the following representations
                  and warranties to each Finance Party in respect of those of
                  this letter, the Merger Agreement and the Voting Agreement to
                  which it is a party:

                  (i)      that it has the power to enter into and perform this
                           letter, the Merger Agreement and the Voting Agreement
                           and it has taken all necessary action to authorise
                           the entry into, performance and delivery of this
                           letter, the Merger Agreement and the Voting
                           Agreement; and

                  (ii)     that this letter, the Merger Agreement and the Voting
                           Agreement constitutes its legal, valid and binding
                           obligation enforceable in accordance with its terms.

         (b)      Toreador represents and warrants as at the date it executes
                  this letter and each time it issues a Warrant, that:


                                       16


                  (i)     that it has the power to enter into and perform this
                          letter, the Warrants and the Warrant Letters and it
                          has taken all necessary action to authorise the issue,
                          performance and delivery of those Warrants; and

                  (ii)    this letter, the Warrants and the Warrant Letters
                          will, when issued, constitutes its legal, valid and
                          binding obligation enforceable in accordance with its
                          terms.

         (c)      Toreador and each Obligor represents and warrants that
                  Trans-Dominion Holdings Limited, Madison (Turkey) Inc. and
                  Madison Oil Turkey Inc. are the legal and beneficial owners of
                  the Trinidadian Assets and the Turkish Assets respectively.

12.      LEGAL FEES

         (a)      For the avoidance of doubt, MEF acknowledges and agrees that
                  the Facility Agent's costs and expenses incurred in connection
                  with this letter, the Warrant Letters and any other
                  arrangement, new agreement or document contemplated by this
                  letter fall within Clause 23.1 (Initial and special costs),
                  and as such, MEF shall immediately on demand pay those costs
                  and expenses.

         (b)      The Facility Agent confirms that the payment of the legal fees
                  of Allen & Overy (the Facility Agent's legal adviser) incurred
                  in relation to this letter, the Warrant Letters and any other
                  arrangement, new agreement or document contemplated by this
                  letter shall constitute a Permitted Payment.

         (c)      The Obligors shall pay the Permitted Payment referred to in
                  paragraph (b) above as soon as possible after execution of
                  this letter from Gross Revenues to the extent any such amount
                  is available after the payment of any other Permitted Payments
                  (other than any referred to in paragraph (c)(i) of the
                  definition of Permitted Payment in Clause 1.1 (Definitions)).

         (d)      Toreador undertakes to pay the Allen & Overy Invoice by 31st
                  March, 2003 at the latest.

13.      EVENT OF DEFAULT

         If:

         (a)      any of the provisions of this letter are not complied with;

         (b)      any shares are not issued in accordance with the Warrants
                  issued and delivered in accordance with the Warrant Letters;

         (c)      Toreador does not issue, deliver and amend the strike price of
                  any of the Warrants in accordance with the Warrant Letters;

         (d)      the Merger Agreement or the Toreador Subordinated Revolving
                  Credit Agreement is terminated;

         (e)      the Voting Agreement is breached;


                                       17


         (f)      the Forecast prepared as of 30th April, 2003 in accordance
                  with paragraph 5 (Forecasts) of this letter indicates that the
                  ratio of Relevant NPV to Total Indebtedness is less than
                  1.5:1;

         (g)      any representation and warranty in this letter is incorrect
                  when made or repeated; or

         (h)      there is any breach of the repayment schedule in paragraph 4
                  (Repayment) of this letter; or

         (i)      the Turkish Revenue Accounts (to the extent permitted by
                  Turkish law) and the Trinidadian Revenue Accounts are not
                  opened and/or Security Interests are not granted over those
                  accounts (to the extent permitted by Turkish law with regard
                  to the Turkish Revenue Accounts) in favour of the Facility
                  Agent by 30th April, 2003 in accordance with the provisions of
                  paragraph 7.4 (Turkish and Trinidadian Cashflow);

         then that event shall constitute an Event of Default under Clause 20
         (Default) and the Finance Parties may thereafter exercise all of their
         rights in respect thereof under the Finance Documents.

14.      DESIGNATION OF FINANCE DOCUMENTS

         Each of this letter, the Subordination and Support Agreement, each of
         the Warrants, the Warrant Letters and, if entered into in accordance
         with paragraph 7.8(c), the Toreador Guarantee is a Finance Document
         (and each is hereby designated as such by the Facility Agent and the
         Borrowers' Agent).

15.      CONDITIONS PRECEDENT

         (a)      The letter and the waivers set out herein shall only take
                  effect on the date on which the Agent has received an original
                  of this letter and the Second Warrant Letter duly executed by
                  all parties and has received (or waived receipt of):

                  (i)      board resolutions of each of the Obligors and
                           Toreador authorising the transactions contemplated by
                           and execution of this letter and the Second Warrant
                           Letter; and

                  (ii)     specimen signatures of the persons authorised to sign
                           this letter, the Second Warrant Letter and any other
                           documents connected to the Finance Documents on
                           behalf of the Obligors,

                  (all in form and substance satisfactory to the Facility Agent)
                  (such date being the "EFFECTIVE DATE").

         (b)      Toreador and each Obligor represents and warrants as at the
                  Effective Date that there is no Default outstanding.

16.      OTHER PROVISIONS

         (a)      Nothing in this letter shall affect any right of any Finance
                  Party, or any obligation of any Obligor, except as expressly
                  stated above, and each Obligor expressly confirms that all
                  such rights and obligations shall continue in full force and
                  effect except to the extent so stated.


                                       18


         (b)      This letter does not create any right under the Contracts
                  (Rights of Third Parties) Act 1999 which is enforceable by any
                  person who is not a party to this letter.

         (c)      The Facility Agent acknowledges that Bank of Texas, N.A. has
                  the right to withhold any consents or approvals requested of
                  it by Toreador in its sole discretion for any or no reason and
                  on any or no grounds and that there is no third party
                  beneficiary relationship between the Facility Agent and Bank
                  of Texas, N.A.

         (c)      Toreador acknowledges and agrees to the provisions of Clause
                  28.3(b) (Changes to the Parties) - Procedures for Novations)
                  and irrevocably authorises the Facility Agent to execute any
                  duly completed Novation Certificate on its behalf.

         (d)      If a provision of this letter is or becomes illegal, invalid
                  or unenforceable in any jurisdiction, that shall not affect:

                  (i)      the legality, validity or enforceability in that
                           jurisdiction of any other provision of this letter;
                           or

                  (ii)     the legality, validity or enforceability, in other
                           jurisdictions of that or any other provision of this
                           letter.

         [(e)     Clauses 1.2 (Construction), 28.1 (Transfers by Obligors) and
                  32-37 (inclusive) shall apply to this letter as though set out
                  in full in this letter, except that:

                  (i)      references in those Clauses to the Credit Agreement
                           are to be construed as references to this letter;

                  (ii)     each reference to "Obligor" in Clauses 1.2
                           (Construction), 28.1 (Transfers by Obligors), 35
                           (Jurisdiction) and 37 (Waiver of Jury Trial) shall be
                           deemed to include Toreador; and

                  (iii)    the reference to "the Guarantor" in Clause 35.2(f)
                           (Service of Process) shall be deemed to include
                           Toreador.

Please countersign this letter (or a copy of it) where marked below to confirm
your agreement to its terms.

Yours faithfully,



/s/ Steven Funnell
- ------------------------------
ON BEHALF OF BARCLAYS BANK PLC
AS FACILITY AGENT



We agree with the above.



                                       19




BORROWERS' AGENT



/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date:  April 11, 2003



BORROWERS




/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON OIL COMPANY EUROPE
Date:  April 11, 2003



/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON OIL FRANCE S.A.
Date:  April 11, 2003




/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date:  April 11, 2003


GUARANTORS



/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON OIL COMPANY
Date:  April 11, 2003




/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON PETROLEUM INC
Date:  April 11, 2003



                                       20


/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON OIL COMPANY EUROPE
Date:  April 11, 2003




/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON OIL FRANCE S.A.
Date:  April 11, 2003




/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date:  April 11, 2003




/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON (TURKEY) INC
Date:  April 11, 2003




/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF MADISON OIL TURKEY INC
Date:  April 11, 2003



TOREADOR


/s/ Douglas W. Weir
- -----------------------------------------
ON BEHALF OF TOREADOR RESOURCES CORPORATION
Date:  April 11, 2003



                                       21



                  SCHEDULE 1 - FORM OF CASHFLOW RECONCILIATION


SOURCES OF FUNDS                                                     DESCRIPTION
          French Operations
          Turkish Operations
          Trinidadian Operations
          US (Toreador) Operations
          Other
                                                            =============

          Total

USES OF FUNDS

          FRENCH           OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other

          TOTAL FRANCE

          TURKISH          OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other

          TOTAL TURKEY

          TRINIDADIAN      OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other

          TOTAL TRINIDAD

          US               OPEX

                           CAPEX

                           G&A

                           Madison Loan

                           Other

          Total US (Toreador)

          TOTAL USES OF FUNDS




                                       22


                                   SCHEDULE 2

OUTSTANDING TARGET REPAYMENTS




                                                                OUTSTANDING
                               TARGET           ACTUAL             TARGET
                              REPAYMENT        REPAYMENT         REPAYMENTS
MONTH                           (USD)            (USD)             (USD)
- -----                         ---------        ---------        -----------
                                                       

November 2002                  450,000          300,000           150,000

December 2002                  450,000          150,000           300,000

January 2003                   400,000          150,000           250,000

February 2003                  500,000          400,000           100,000

EX-21.1

                                                                               .
                                                                               .
                                                                               .
                                                                    EXHIBIT 21.1

                         TOREADOR RESOURCES CORPORATION
                        AND SUBSIDIARIES AS OF APRIL 2002





                   Company                                     Jurisdiction
                   -------                                     ------------
                                                            
Toreador Resources Corporation                                    Delaware
Toreador Exploration & Production Inc.                             Texas
Tormin, Inc.                                                      Delaware
Toreador Acquisition Corporation.                                 Delaware
EnergyNet.com, Inc.                                                Texas
Madison Oil Company                                               Delaware
Madison (Turkey), Inc.                                            Delaware
Madison Oil Turkey, Inc.                                          Liberia
Trinidad Exploration and Development Ltd.                         Trinidad
Madison Petroleum, Inc.                                           Delaware
Madison Oil Company Europe                                        Delaware
Madison Oil France, S.A.                                           France
Madison Energy France SCS                                          France
Toreador Holdings International SRL                               Barbados
Toreador Trinidad Exploration & Production Unlimited              Trinidad
Wilco Turkey Limited                                               Jersey

EX-23.1

                                                                    EXHIBIT 23.1

                         CONSENT OF INDEPENDENT AUDITOR

We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 33-88475; Form S-8 No. 333-39309; Form S-8 No. 333-14145; Form S-8
No. 333-53632; Form S-8 No. 333-99959; Form S-3 No. 333-52522 and Form S-3 No.
333-65720) of Toreador Resources Corporation and of our report dated April 11,
2003, with respect to the consolidated financial statements of Toreador
Resources Corporation included in this Annual Report (Form 10-K) for the year
ended December 31, 2002.



                                               /s/ ERNST & YOUNG LLP


Dallas, Texas
April 11, 2003

EX-23.2

                                                                    EXHIBIT 23.2


                   CONSENT OF INDEPENDENT PETROLEUM ENGINEERS


As independent petroleum engineers, we hereby consent to the incorporation by
reference in the Registration Statements on Form S-8 (Nos. 333-14145, 333-39309,
333-88475, 333-53632 and 333-99959) and on Form S-3 (Nos. 333-52522 and
333-65720) of Toreador Resources Corporation of our estimates of reserves,
included in this Annual Report on Form 10-K, and to all references to our firm
included in this Annual Report.


/s/ EDWARD P. TRAVIS
- ------------------------------------
LaRoche Petroleum Consultants, Ltd.


Dallas, Texas
April 15, 2003

EX-99.1

                                                                    EXHIBIT 99.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, 18 U.S.C. Section 1350, and accompanies the annual report on Form 10-K
(the "Form 10-K") for the fiscal year ended December 31, 2002 of Toreador
Resources Corporation (the "Issuer").

I, G. Thomas Graves III, President and Chief Executive Officer of the Issuer,
certify that to my knowledge:

         (1) The Form 10-K fully complies with the requirements of Section 13(a)
or 15(d), as applicable, of the Securities Exchange Act of 1934; and

         (2) The information contained in the Form 10-K fairly presents, in all
material respects, the financial condition and results of operations of the
Issuer at the dates and for the periods indicated.



/s/ G. Thomas Graves III
- -------------------------------------
G. Thomas Graves III
President and Chief Executive Officer

Dated:  April 15, 2003


A signed original of this written statement required by Section 906 has been
provided to Toreador Resources Corporation and will be retained by Toreador
Resources Corporation and furnished to the Securities and Exchange Commission or
its staff upon request.

EX-99.2

                                                                    EXHIBIT 99.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, 18 U.S.C. Section 1350, and accompanies the annual report on Form 10-K
(the "Form 10-K") for the fiscal year ended December 31, 2002 of Toreador
Resources Corporation (the "Issuer").

I, Douglas W. Weir, Chief Financial Officer of the Issuer, certify that to my
Knowledge:

         (1) The Form 10-K fully complies with the requirements of Section 13(a)
or 15(d), as applicable, of the Securities Exchange Act of 1934; and

         (2) The information contained in the Form 10-K fairly presents, in all
material respects, the financial condition and results of operations of the
Issuer at the dates and for the periods indicated.



/s/ Douglas W. Weir
- ---------------------------
Douglas W. Weir
Chief Financial Officer

Dated:  April 15, 2003


A signed original of this written statement required by Section 906 has been
provided to Toreador Resources Corporation and will be retained by Toreador
Resources Corporation and furnished to the Securities and Exchange Commission or
its staff upon request.