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EXHIBIT 10.1




SECURITIES PURCHASE AGREEMENT




     SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of March 21, 2007, by and among
Toreador Resources Corporation, a Delaware corporation, with headquarters located at 4809 Cole
Avenue, Suite 108, Dallas, Texas 75205 (the “Company”), and the investors listed on the Schedule of
Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”).



WHEREAS:




     A.       The Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of
1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by
the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.



     B.       Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, that aggregate number of shares of the Common Stock, par value
$0.15625 per share, of the Company (the “Common Stock”), set forth opposite such Buyer’s name in
column (3) on the Schedule of Buyers (which aggregate amount for all Buyers together shall be
2,710,843 shares of Common Stock and shall collectively be referred to herein as the “Common
Shares”) and (ii) warrants, in substantially the form attached hereto as Exhibit A (the
"Warrants”), to acquire that number of shares of Common Stock set forth opposite such Buyer’s name
in column (4) on the Schedule of Buyers (as exercised, collectively, the “Warrant Shares”).



     C.       Contemporaneously with the execution and delivery of this Agreement, the parties
hereto are executing and delivering a Registration Rights Agreement, substantially in the form
attached hereto as Exhibit A (the “Registration Rights Agreement”) pursuant to which the
Company has agreed to provide certain registration rights with respect to the Common Shares and the
Warrant Shares under the 1933 Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.



     D.       The Common Shares, the Warrants and the Warrant Shares collectively are referred
to herein as the “Securities”.



     NOW, THEREFORE, the Company and each Buyer hereby agree as follows:



     1.       PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.



               (a) Purchase of Common Shares and Warrants. Subject to the satisfaction (or waiver)
of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell to each
Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the
Closing Date (as defined below), the number of Common Shares as is set forth opposite such Buyer’s
name in column (3) on the Schedule of Buyers, along with Warrants to acquire up to that number of
Warrant Shares as is set forth opposite such Buyer’s name in column (4) on the



 









 







Schedule of Buyers (the “Closing”). The Closing shall occur on the Closing Date at the
offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022.



               (b)       Purchase Price. The purchase price for the Common Shares and related Warrants to
be purchased by each Buyer at the Closing shall be the amount set forth opposite such Buyer’s name
in column (5) of the Schedule of Buyers (the “Purchase Price”) which shall be equal to the amount
of $16.60 per Common Share.



               (c)       Closing Date. The date and time of the Closing (the “Closing Date”) shall be
10:00 a.m., New York City Time, on the date hereof (or such other date and time as is mutually
agreed to by the Company and each Buyer).



               (d)       Form of Payment. On the Closing Date, (i) each Buyer shall pay its respective
Purchase Price to the Company for the Common Shares and Warrants to be issued and sold to such
Buyer at the Closing, by wire transfer of immediately available funds in accordance with the
Company’s written wire instructions, and (ii) the Company shall deliver to each Buyer (A) one or
more stock certificates, free and clear of all restrictive and other legends (except as expressly
provided in Section 2(h) hereof), evidencing the number of Common Shares such Buyer is purchasing
as is set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers and (B) a
Warrant pursuant to which such Buyer shall have the right to acquire such number of Warrant Shares
as is set forth opposite such Buyer’s name in column (4) of the Schedule of Buyers, in each case
duly executed on behalf of the Company and registered in the name of such Buyer.



     2.       BUYER’S REPRESENTATIONS AND WARRANTIES.



               Each Buyer represents and warrants with respect to only itself that:



               (a) Organization; Authority. Such Buyer is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization with the requisite
power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents (as defined below) to which it is a party and otherwise to carry out its
obligations hereunder and thereunder.



               (b) No Public Sale or Distribution. Such Buyer is (i) acquiring the Common Shares and
the Warrants and (ii) upon exercise of the Warrants will acquire the Warrant Shares issuable upon
exercise thereof, in the ordinary course of business for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution thereof, except pursuant
to sales registered or exempted under the 1933 Act and such Buyer does not have a present
arrangement to effect any distribution of the Securities to or through any person or entity;
provided, however, that by making the representations herein, such Buyer does not
agree to hold any of the Securities for any minimum or other specific term and reserves the right
to dispose of the Securities at any time in accordance with or pursuant to a registration statement
or an exemption under the 1933 Act. Such Buyer is acquiring the Securities hereunder in the
ordinary course of its business. Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the Securities.



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               (c)       Accredited Investor Status. Such Buyer is an “accredited investor” as that term
is defined in Rule 501(a) of Regulation D.



               (d)       Reliance on Exemptions. Such Buyer understands that the Securities are being
offered and sold to it in reliance on specific exemptions from the registration requirements of
United States federal and state securities laws and that the Company is relying in part upon the
truth and accuracy of, and such Buyer’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine
the availability of such exemptions and the eligibility of such Buyer to acquire the Securities.



               (e)       Information. Such Buyer and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities which have been requested by such Buyer. Such Buyer and
its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither
such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors,
if any, or its representatives shall modify, amend or affect such Buyer’s right to rely on the
Company’s representations and warranties contained herein. Such Buyer understands that its
investment in the Securities involves a high degree of risk and is able to afford a complete loss
of such investment. Such Buyer has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its acquisition of the
Securities.



               (f)       No Governmental Review. Such Buyer 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.



               (g)       Transfer or Resale. Such Buyer understands that except as provided in the
Registration Rights Agreement: (i) the Securities have not been and are not being registered under
the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder and sold pursuant to an effective
registration statement, (B) such Buyer shall have delivered to the Company an opinion of counsel,
in a generally acceptable form, to the effect that such Securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from such registration,
or (C) such Buyer provides the Company with reasonable assurance that such Securities can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as
amended (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities
made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further,
if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller
(or the Person (as defined in Section 3(r)) through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither
the Company nor any other Person is under any obligation to register the Securities under the 1933
Act or any state securities laws or to comply with the terms and conditions of any exemption
thereunder. Notwithstanding the foregoing, the Securities may be



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pledged in connection with a bona fide margin account or other loan secured by the Securities
and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide
the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document (as defined below), including, without limitation, this
Section 2(g); provided, that in order to make any sale, transfer or assignment of Securities, such
Buyer and its pledgee shall make such disposition in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.



               (h)       Legends. Such Buyer understands that the certificates or other instruments
representing the Common Shares and the Warrants Shares shall bear, until such time as the resale of
the Common Shares and the Warrant Shares have been registered under the 1933 Act as contemplated by
the Registration Rights Agreement, and except as set forth below, any legend as required by the
“blue sky” laws of any state and a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such stock certificates):



[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
THE SECURITIES INTO WHICH THESE SECURITIES ARE [EXERCISABLE] HAVE BEEN][THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


The legend set forth above shall be removed and the Company shall, at such Buyer’s election either
(x) issue a certificate without such legend to the holder of the Common Shares or Warrant Shares
upon which it is stamped or (y) issue to such holder by electronic delivery at the applicable
balance account at The Depository Trust Company (“DTC”), if, unless otherwise required by state
securities laws, (i) such Common Shares or Warrant Shares are registered for resale under the 1933
Act, (ii) in connection with a sale, assignment or other transfer, such holder provides the Company
with an opinion of counsel, in a generally acceptable form, to the effect that such sale,
assignment or transfer of the Common Shares or Warrant Shares may be made without registration
under the applicable requirements of the 1933 Act and that such legend is no longer required, or
(iii) such holder provides the Company with reasonable assurance that the Common Shares or Warrant
Shares can be sold, assigned or transferred pursuant to Rule 144(k).




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               (i)       Validity; Enforcement. This Agreement and the Registration Rights Agreement have
been duly and validly authorized, executed and delivered on behalf of such Buyer and shall
constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in
accordance with their respective terms, except as such enforceability may be limited by general
principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.



               (j)       No Conflicts. The execution, delivery and performance by such Buyer of this
Agreement and the Registration Rights Agreement and the consummation by such Buyer of the
transactions contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to
such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of such Buyer to perform its obligations hereunder.



               (k)       Residency. Such Buyer is a resident of that jurisdiction specified below its
address on the Schedule of Buyers.



               (l)       Certain Trading Activities. Such Buyer acknowledges that it is aware, and it will
advise any Affiliate (as defined in Rule 405 promulgated pursuant to the 1933 Act) of such Buyer
which (x) has knowledge of the transactions contemplated hereby, (y) has or shares discretion
relating to such Buyer’s investments or trading or information concerning such Buyer’s investments
and (z) is subject to such Buyer’s review or input concerning such Affiliate’s investments or
trading (collectively, “Trading Affiliates”) who is unaware, that, subject to certain limited
exceptions, the U.S. federal and state securities laws prohibit any person who has material,
non-public information about a company from purchasing or selling securities of such company or
from communicating such information to any other person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell such securities.



     3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.



               The Company represents and warrants to each of the Buyers that:



               (a)       Organization and Qualification. Each of the Company and its “U.S. Subsidiaries”
(which for purposes of this Agreement means any entity in which the Company, directly or
indirectly, owns capital stock or holds an equity or similar interest that is organized in the
United States) is a corporation duly organized and validly existing in good standing under the laws
of the jurisdiction in which it is organized, and has the requisite corporate power and
authorization to own its properties and to carry on its business as now being conducted. Each of
the Company and its U.S. Subsidiaries is duly qualified as a foreign corporation to do business and
is in good standing in every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the extent that the



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failure to be so qualified or be in good standing would not reasonably be expected to have a
Material Adverse Effect. Each of the Company’s “Foreign Subsidiaries” (which for purposes of this
Agreement means any entity in which the Company, directly or indirectly, owns capital stock or
holds an equity or similar interest that is organized in a country other than the United States),
is duly organized or formed and is validly existing in good standing under the laws of the
jurisdiction in which it is organized or formed and has the requisite power and authorization to
own its properties and to carry on its business as now being conducted. Each of the Foreign
Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business conducted by it makes
such qualification necessary, except to the extent that the failure to be so qualified or be in
good standing would not reasonably be expected to have a Material Adverse Effect. As used in this
Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties,
assets, operations, results of operations or condition (financial or otherwise) of the Company and
its U.S. Subsidiaries and Foreign Subsidiaries (each, a “Subsidiary” and collectively, the
“Subsidiaries”), taken as a whole, or on the transactions contemplated hereby and the other
Transaction Documents or by the agreements and instruments to be entered into in connection
herewith or therewith, or on the authority or ability of the Company to perform its obligations
under the Transaction Documents. The Company has no Subsidiaries except as set forth on
Schedule 3(a).



               (b)       Authorization; Enforcement; Validity. The Company has the requisite corporate
power and authority to enter into and perform its obligations under this Agreement, the
Registration Rights Agreement, the Irrevocable Transfer Agent Instructions (as defined in Section
5), the Warrants and each of the other agreements entered into by the parties hereto in connection
with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”)
and to issue the Securities in accordance with the terms hereof and thereof. The execution and
delivery of the Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby, including, without limitation, the issuance of the
Common Shares and the Warrants and the reservation for issuance and the issuance of the Warrant
Shares issuable upon exercise of the Warrant have been duly authorized by the Company’s Board of
Directors and no further consent or authorization is required by the Company, its Board of
Directors or its stockholders. This Agreement and the other Transaction Documents have been duly
executed and delivered by the Company, and constitute the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their respective terms, except as
such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and remedies.



               (c)       Issuance of Securities. The Common Shares and the Warrants are duly authorized
and, upon issuance in accordance with the terms hereof, shall be validly issued and free from all
taxes, liens and charges with respect to the issue thereof and the Common Shares shall be fully
paid and nonassessable with the holders being entitled to all rights accorded to a holder of Common
Stock. As of the Closing Date, the Company shall have duly authorized and reserved for issuance a
number of shares of Common Stock which equals the number of Warrant Shares. The Company shall, so
long as any of the Warrants are outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued Capital Stock, solely



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for the purpose of effecting the exercise of the Warrants, the number of shares of Common
Stock issuable upon exercise of the Warrants. Upon exercise in accordance with the Warrants, the
Warrant Shares will be validly issued, fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. The offer and issuance by the Company of the Securities is
exempt from registration under the 1933 Act.



               (d)       No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Common Shares and the
Warrants and the reservation for issuance and issuance of the Warrant Shares) will not (i) result
in a violation of the Certificate of Incorporation (as defined below) or Bylaws (as defined below)
of the Company or any of its Subsidiaries or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of The NASDAQ Global Market (the
"Principal Market”)) applicable to the Company or any of its Subsidiaries or by which any property
or asset of the Company or any of its Subsidiaries is bound or affected, except with regard to (ii)
and (iii) where such conflict, default, rights of termination, amendment, acceleration or
cancellation, violation of law, rule, regulation, order, judgment or decree would not be reasonably
expected to have a Material Adverse Effect.



               (e)       Consents. Except as set forth on Schedule 3(e), the Company is not
required to obtain any consent, authorization or order, or make any filing or registration with,
any court, governmental agency or any regulatory or self-regulatory agency or any other Person in
order for it to execute, deliver or perform any of its obligations under or contemplated by the
Transaction Documents, in each case in accordance with the terms hereof or thereof, except where
the failure to obtain any consent, authorization or order of, or make any filing or registration
would not be reasonably likely to result in a Material Adverse Effect. Except as set forth on
Schedule 3(e), all consents, authorizations, orders, filings and registrations which the
Company is required to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the Closing Date, except where the failure to obtain any consent, authorization or
order, or make any filing or registration would not be reasonably likely to result in a Material
Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances that
might prevent the Company from obtaining or effecting any of the registration, application or
filings pursuant to the preceding sentence. The Company is not in violation of the listing
requirements of the Principal Market and has no knowledge of any facts that would reasonably lead
to delisting or suspension of the Common Stock in the foreseeable future.



               (f)       Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges
and agrees that each Buyer is acting solely in the capacity of arm’s length purchaser with respect
to the Transaction Documents to which such Buyer is a party and the transactions contemplated
hereby and thereby and that no Buyer is (i) an officer or director of the Company, (ii) an
Affiliate of the Company or any of its Subsidiaries or (iii) to the Knowledge of the Company, a
“beneficial owner” of more than 10% of the shares of Common Stock (as



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defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
"1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or
fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to
the Transaction Documents and the transactions contemplated hereby and thereby, and any advice
given by a Buyer or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s
purchase of the Securities. The Company further represents to each Buyer that the Company’s
decision to enter into the Transaction Documents has been based solely on the independent
evaluation by the Company and its representatives. “Knowledge” or any derivation thereof with
respect to the Company or any of its Subsidiaries means the conscious awareness of Nigel Lovett,
Michael FitzGerald, Doug Weir or Charles Campise of a particular fact or other matter.



               (g)       No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of
its Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Securities. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commissions (other than for persons engaged by
any Buyer or its investment advisor) relating to or arising out of the transactions contemplated
hereby. The Company shall pay, and hold each Buyer harmless against, any liability, loss or
expense (including, without limitation, attorney’s fees and out-of-pocket expenses) arising in
connection with any such claim. The Company acknowledges that it has engaged Merrill Lynch & Co.,
Inc. as placement agent (the “Agent”) in connection with the sale of the Securities. Other than
the Agent, the Company has not engaged any placement agent or other agent in connection with the
sale of the Securities.



               (h)       No Integrated Offering. None of the Company, its Subsidiaries, any of their
Affiliates, and any Person acting on their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under circumstances that would
require registration of any of the Securities under the 1933 Act or cause the purchase and sale of
the Securities contemplated hereby to be integrated with prior offerings by the Company for
purposes of the 1933 Act or any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of the Principal Market. None of the Company, its
Subsidiaries, their Affiliates and any Person acting on their behalf will take any action or steps
referred to in the preceding sentence that would require registration of any of the Securities
under the 1933 Act or cause the purchase and sale of the Securities contemplated hereby to be
integrated with other offerings.



               (i)       Application of Takeover Protections; Rights Agreement. Except as set forth in
Schedule 3(i), the Company and its board of directors have taken all necessary action, if
any, in order to render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar anti-takeover provision
under the Certificate of Incorporation or the laws of the State of Delaware which is or could
become applicable to any Buyer as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company’s issuance of the Securities and any Buyer’s ownership
of the Securities. The Company has not adopted a stockholder rights plan or similar



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arrangement relating to accumulations of beneficial ownership of Securities or a change in
control of the Company.



               (j)       SEC Documents; Financial Statements. Except as set forth in Schedule
3(j), during the two (2) years prior to the date hereof, the Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed by it with the SEC
pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the
date hereof or prior to the date of the Closing, and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference therein being hereinafter
referred to as the “SEC Documents”). The Company has delivered to the Buyers or their respective
representatives true, correct and complete copies of the SEC Documents not available on the EDGAR
system. As of their respective dates, the SEC Documents complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with
the SEC, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. Except as set forth in Schedule
3(j), as of their respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto. Except as set forth in
Schedule 3(j), such financial statements have been prepared in accordance with generally
accepted accounting principles, consistently applied, 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 audit adjustments).
No other information provided by or on behalf of the Company to the Buyers which is not included in
the SEC Documents, including, without limitation, information referred to in Section 2(e) of this
Agreement, contains any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the circumstance under which
they are or were made, not misleading.



               (k)       Absence of Certain Changes. Except as disclosed in Schedule 3(k), since
December 31, 2005, there has been no change or development that would reasonably be expected to
result in a Material Adverse Effect. Except as disclosed in Schedule 3(k), since December
31, 2005, the Company has not (i) declared or paid any dividends, (ii) sold any assets outside of
the ordinary course of business or (iii) had capital expenditures outside of the ordinary course of
business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection
pursuant to any bankruptcy law nor does the Company have any Knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any
fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries,
individually and on a consolidated basis, are not as of the date hereof, and after giving effect to
the transactions contemplated hereby to occur at the Closing, will not be Insolvent (as defined
below). For purposes of this Section 3(k), “Insolvent” means, with respect to any Person (as
defined in Section 3(r)) (i) the present fair saleable value of such Person’s assets is less than
the



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amount required to pay such Person’s total Indebtedness (as defined in Section 3(r)), (ii)
such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured, (iii) such Person intends to incur or
believes that it will incur debts that would be beyond its ability to pay as such debts mature or
(iv) such Person has unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted.



               (l)       No Undisclosed Events, Liabilities, Developments or Circumstances. No event,
liability, development or circumstance has occurred or exists, or is contemplated to occur, with
respect to the Company or its Subsidiaries or their respective business, properties, prospects,
operations or financial condition, that would be required to be disclosed by the Company under
applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to
an issuance and sale by the Company of its Common Stock and which has not been publicly announced.



               (m)       Conduct of Business; Regulatory Permits. Neither the Company nor its Subsidiaries
is in violation of any term of or in default under their respective Certificate of Incorporation or
Bylaws. Neither the Company nor any of its Subsidiaries is in violation of any federal, state,
local or foreign judgment, decree or order or any statute, ordinance, rule or regulation
(collectively, “Laws”) applicable to the Company or its Subsidiaries, and neither the Company nor
any of its Subsidiaries will conduct its business in violation of any Laws, in both cases, except
for possible violations which would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. Without limiting the generality of the foregoing, the Company
is not in violation of any of the rules, regulations or requirements of the Principal Market and
has no knowledge of any facts or circumstances that would reasonably lead to delisting or
suspension of the Common Stock by the Principal Market in the foreseeable future. Except as set
forth on Schedule 3(m), since December 31, 2005, (i) the Common Stock has been designated
for quotation or listed on the Principal Market, (ii) trading in the Common Stock has not been
suspended by the SEC or the Principal Market and (iii) the Company has received no communication,
written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the
Common Stock from the Principal Market. The Company and its Subsidiaries possess all certificates,
authorizations, permits and other approvals (“Permits”) issued by the appropriate federal, state or
foreign regulatory authorities necessary under Laws to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect, and to the Knowledge
of the Company or any Subsidiary, neither the Company nor any such Subsidiary has received any
written notice of proceedings relating to the revocation or modification of any such Permits.



               (n)       Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor
any director, officer, agent, employee or other Person acting on behalf of the Company or any of
its Subsidiaries has, in the course of its actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (iii) violated or is in violation of
any provision of the U.S. Foreign Corrupt Practices Act of 1977, as



10









 







amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.



               (o)       Sarbanes-Oxley Act. The Company is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any
and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of
the date hereof.



               (p)       Transactions With Affiliates. Except as set forth on Schedule 3(p), none
of the officers, directors or employees of the Company is presently a party to any transaction with
the Company or any of its Subsidiaries (other than for ordinary course services as employees,
officers or directors), including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any such officer, director or employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director, trustee or partner.



               (q)       Equity Capitalization. As of the date hereof, the authorized capital stock of the
Company consists of (y) 30,000,000 shares of Common Stock, of which as of the date hereof,
16,215,829 shares are issued and outstanding, 1,156,368 shares are reserved for issuance pursuant
to the Company’s employee incentive plan and other options and warrants outstanding and 2,464,766
shares are reserved for issuance pursuant to securities exercisable or exchangeable for, or
convertible into, shares of Common Stock and (z) 4,000,000 shares of preferred stock, par value
$1.00 per share, of which as of the date hereof, 72,000 shares are issued and outstanding. All of
such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and
nonassessable. Except as set forth on Schedule 3(q): (i) no shares of the Company’s
capital stock are subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company or any of its Subsidiaries; (iii) there are no outstanding debt securities,
notes, credit agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness (as defined in Section 3(s)) of the Company or any of its Subsidiaries or
by which the Company or any of its Subsidiaries is or may become bound; (iv) there are no financing
statements securing obligations in any material amounts, either singly or in the aggregate, filed
in connection with the Company or any of its Subsidiaries; (v) there are no agreements or
arrangements under which the Company or any of its Subsidiaries is obligated to register the sale
of any of their securities under the 1933 Act (except the Registration Rights Agreement); (vi)
there are no outstanding securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or



11









 







any of its Subsidiaries is or may become bound to redeem a security of the Company or any of
its Subsidiaries; (vii) there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities; (viii) the Company does not
have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or
agreement; and (ix) the Company and its Subsidiaries have no material liabilities or material
obligations required to be disclosed in the SEC Documents (as defined herein) but not so disclosed
in the SEC Documents, other than those incurred in the ordinary course of the Company’s or any
Subsidiary’s respective businesses. The Company has furnished or made available to the Buyer upon
such Buyer’s request, true, correct and complete copies of the Company’s Certificate of
Incorporation, as amended and as in effect on the date hereof and the certificate or articles of
incorporation or other organizational documents of the Subsidiaries (collectively, the “Certificate
of Incorporation”), and the Company’s Bylaws and the bylaws or other similar documents of the
Subsidiaries, as amended and as in effect on the date hereof (collectively, the “Bylaws”), and the
terms of all securities convertible into, or exercisable or exchangeable for, shares of Common
Stock and the material rights of the holders thereof in respect thereto.



               (r)       Indebtedness and Other Contracts. Except as disclosed in Schedule 3(r),
neither the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness (as defined
below), (ii) is in violation of any term of or in default under any contract, agreement or
instrument relating to any Indebtedness, except where such violations and defaults would not
reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect,
or (iii) is a party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company’s officers, has or is reasonably expected to
have a Material Adverse Effect. Schedule 3(r) provides a detailed description of the
material terms of any such outstanding Indebtedness. For purposes of this Agreement: (x)
"Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money,
(B) all obligations issued, undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary course of business) (including,
without limitation, “capital leases” in accordance with generally accepted accounting principles),
(C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and
other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses, (E) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either case with respect to any
property or assets acquired with the proceeds of such indebtedness (even though the rights and
remedies of the seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any leasing or similar
arrangement which, in connection with generally accepted accounting principles, consistently
applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness
referred to in clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien,
pledge, charge, security interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which owns such assets or
property has not assumed or become liable for the payment of such indebtedness, and (H) all
Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to
in clauses (A) through (G) above; (y) “Contingent Obligation”



12









 







means, as to any Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to any indebtedness, lease, dividend or other obligation of another Person if
the primary purpose or intent of the Person incurring such liability, or the primary effect
thereof, is to provide assurance to the obligee of such liability that such liability will be paid
or discharged, or that any agreements relating thereto will be complied with, or that the holders
of such liability will be protected (in whole or in part) against loss with respect thereto; and
(z) “Person” means an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any department or agency
thereof.



               (s)       Absence of Litigation. Except as set forth on Schedule 3(s), there is no
action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court,
public board, government agency, self-regulatory organization or body pending or, to the Knowledge
of the Company, threatened against or affecting the Company, the Common Stock or any of its
Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors, whether
of a civil or criminal nature or otherwise. The matters set forth on Schedule 3(s) would
not have a Material Adverse Effect.



               (t)       Insurance. The Company and each of its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as management
of the Company believes to be prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Except as set forth on Schedule 3(t), neither the
Company nor any Subsidiary has been refused any insurance coverage sought or applied for. Neither
the Company nor any Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.



               (u)       Employee Relations. (i) Neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement or employs any member of a union. The Company and its
Subsidiaries believe that their relations with their employees are good. No executive officer (as
defined in Rule 501(f) of the 1933 Act) of the Company or any of its Subsidiaries has notified the
Company or any such Subsidiary that such officer intends to leave the Company or any such
Subsidiary or otherwise terminate such officer’s employment with the Company or any such
Subsidiary. No executive officer of the Company or any of its Subsidiaries is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other contract or agreement or
any restrictive covenant, and the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to any of the
foregoing matters.



                         (ii)       The Company and its Subsidiaries are in compliance with all federal, state, local and
foreign laws and regulations respecting labor, employment and employment practices and benefits,
terms and conditions of employment and wages and hours, except where failure to be in compliance
would not, either individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.



13









 





               (v)       Title. Except as set forth on Schedule 3(v), the Company and its
Subsidiaries have good and defensible title to all properties and assets owned by them, in each
case free and clear of any security interests, mortgages, liens, encumbrances, claims or other
defects, except (i) such as would not materially and adversely affect the value of such property
and (ii) such as would not materially interfere with the current use of such property by the
Company or its Subsidiaries. The real property, improvements, equipment and personal property held
under lease by the Company or Subsidiaries are held under valid and enforceable leases, with such
exceptions as would not materially interfere with the current use of such real property,
improvements, equipment or personal property by the Company or Subsidiaries. As used herein, the
term “lease” shall not include any exploration, exploitation or rehabilitation permit held by the
Company or its Subsidiaries.



               (w)       Intellectual Property Rights. The Company and its Subsidiaries own or possess
adequate rights or licenses to use all trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, original works of authorship, trade secrets and other intellectual
property rights and all applications related thereto (“Intellectual Property Rights”) necessary to
conduct their respective businesses as now conducted. None of the Company’s or its Subsidiaries’
Intellectual Property Rights have expired, terminated or been abandoned, or are expected to expire,
terminate or be abandoned, within three years from the date of this Agreement. The Company does
not have any Knowledge of any infringement by the Company or any of its Subsidiaries of
Intellectual Property Rights of others. There is no claim, action or proceeding made or brought,
or to the Knowledge of the Company, threatened, against the Company or any of its Subsidiaries
regarding its Intellectual Property Rights. To the Knowledge of the Company, there are no facts or
circumstances which might give rise to any of the foregoing infringements or claims, actions or
proceedings. The Company and its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their Intellectual Property Rights.



               (x)       Environmental Laws. The Company and its Subsidiaries (i) are in compliance with
any and all Environmental Laws (as hereinafter defined), (ii) have received all Permits necessary
under applicable Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such Permits where, in each case, the failure to so
comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse
Effect. The term “Environmental Laws” means all Laws relating to pollution or protection of human
health and the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or
otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees,
demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations issued, entered, promulgated or approved thereunder.



               (y)       Subsidiary Rights. Except as set forth on Schedule 3(y), the Company or
one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by



14









 







applicable law) to receive dividends and distributions on, all capital securities of its
Subsidiaries as owned by the Company or such Subsidiary.



               (z)       Tax Status. The Company and each of its Subsidiaries (i) has made or filed all
federal, foreign and state income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set aside on its books
provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.



               (aa)       Internal Accounting and Disclosure Controls. Except as set forth on Schedule
3(aa), the Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets and liabilities is compared with the
existing assets and liabilities at reasonable intervals and appropriate action is taken with
respect to any difference. Except as set forth on Schedule 3(aa), the Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 under the 1934 Act) that are
effective in ensuring that information required to be disclosed by the Company in the reports that
it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the SEC, including, without limitation, controls
and procedures designed to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the 1934 Act is accumulated and communicated to the
Company’s management, including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions regarding required
disclosure. Except as set forth on Schedule 3(aa), during the twelve months prior to the
date hereof neither the Company nor any of its Subsidiaries have received any notice or
correspondence from any accountant relating to any potential material weakness in any part of the
system of internal accounting controls of the Company or any of its Subsidiaries.



               (bb)       Form S-1 Eligibility. The Company is eligible to register the Common Shares and
the Warrant Shares for resale by the Buyers using Form S-1 promulgated under the 1933 Act.



               (cc)       Off Balance Sheet Arrangements. There is no transaction, arrangement, or other
relationship between the Company and an unconsolidated or other off balance sheet entity that is
required to be disclosed by the Company in its Exchange Act filings and is not so disclosed or that
otherwise would be reasonably likely to have a Material Adverse Effect.



               (dd)       Manipulation of Price. The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to



15









 







result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) other than the Agent, sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii)
other than the Agent paid or agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.



               (ee)       Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other
than income or similar taxes) which are required to be paid in connection with the sale and
transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully
paid or provided for by the Company, and all laws imposing such taxes will be or will have been
complied with.



               (ff)       Investment Company Status. The Company is not, and upon consummation of the sale
of the Securities will not be, an “investment company,” a company controlled by an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended.



               (gg)       Acknowledgement Regarding Buyers’ Trading Activity. It is understood and
acknowledged by the Company (i) that none of the Buyers have been asked by the Company or its
Subsidiaries to agree, nor has any Buyer agreed with the Company or its Subsidiaries, to desist
from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities for any specified
term; (ii) that any Buyer, and counterparties in “derivative” transactions to which any such Buyer
is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and
(iii) that each Buyer shall not be deemed to have any affiliation with or control over any arm’s
length counterparty in any “derivative” transaction. The Company further understands and
acknowledges that (a) one or more Buyers may engage in hedging and/or trading activities at various
times during the period that the Securities are outstanding and (b) such hedging and/or trading
activities, if any, can reduce the value of the existing stockholders’ equity interest in the
Company both at and after the time the hedging and/or trading activities are being conducted. The
Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a
breach of this Agreement or any of the documents executed in connection herewith.



               (hh)       U.S. Real Property Holding Corporation. The Company is not, has never been, and
so long as any Securities remain outstanding, shall not become, a U.S. real property holding
corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and
the Company shall so certify upon Buyer’s request.



               (ii) Disclosure. Other than with respect to the occurrence of the purchase and sale
contemplated hereby, the Company confirms that neither it nor any other Person acting on its behalf
has provided any of the Buyers or their respective agents or counsel with any information that
currently constitutes or could reasonably be expected to constitute material, nonpublic
information. The Company understands and confirms that each of the Buyers will rely on the
foregoing representations in effecting transactions in securities of the Company. All disclosure
provided to the Buyers regarding the Company, its business and the transactions contemplated
hereby, including the Schedules to this Agreement, furnished by or on behalf of the Company are



16









 







true and correct and do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. Each press release issued by the Company
during the twelve (12) months preceding the date of this Agreement did not at the time of release
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. No event or circumstance has occurred or
information exists with respect to the Company or any Subsidiary or either of its or their
respective business, properties, prospects, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s
reports filed under the 1934 Act are being incorporated into an effective registration statement
filed by the Company under the 1933 Act). The Company acknowledges and agrees that no Buyer makes
or has made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 2.



     4.       COVENANTS.



               (a)       Reasonable Best Efforts. Each party shall use its reasonable best efforts timely
to satisfy each of the covenants and the conditions to be satisfied by it as provided in Sections
5, 6 and 7 of this Agreement.



               (b)       Form D and Blue Sky. The Company agrees to file a Form D with respect to the
Securities as required under Regulation D and to provide a copy thereof to each Buyer promptly
after such filing. The Company, on or before the Closing Date, shall take such action as the
Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify
the Securities for sale to the Buyers at the Closing pursuant to this Agreement under applicable
securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from
such qualification), and shall provide evidence of any such action so taken to the Buyers on or
prior to the Closing Date. The Company shall make all filings and reports relating to the offer
and sale of the Securities required under applicable securities or “Blue Sky” laws of the states of
the United States following the Closing Date.



               (c)       Reporting Status. Until the date on which the Investors (as defined in the
Registration Rights Agreement) shall have sold all the Common Shares and Warrant Shares and none of
the Warrants are outstanding (the “Reporting Period”), the Company shall timely file all reports
required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would otherwise permit such termination.



               (d)       Use of Proceeds. The Company will use the proceeds from the sale of the
Securities for general corporate purposes, including general and administrative expenses and not
for (i) the repayment of any outstanding Indebtedness of the Company or any of its Subsidiaries, or
(ii) the redemption or repurchase of any of its or its Subsidiaries’ equity securities.



               (e)       Financial Information. The Company agrees to send the following to each Investor
during the Reporting Period (i) unless the following are filed with the SEC through



17









 







EDGAR and are available to the public through the EDGAR system, within one (1) Business Day
after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly
Reports on Form 10-Q, any Current Reports on Form 8-K and any registration statements (other than
on Form S-8) or amendments filed pursuant to the 1933 Act, and (ii) copies of any notices and other
information made available or given to the stockholders of the Company generally, contemporaneously
with the making available or giving thereof to the stockholders. As used herein, “Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed.



               (f)       Listing. The Company shall promptly secure the listing of all of the Registrable
Securities (as defined in the Registration Rights Agreement) upon each national securities exchange
and automated quotation system, if any, upon which the Common Stock is then listed (subject to
official notice of issuance) and shall maintain such listing of all Registrable Securities from
time to time issuable under the terms of the Transaction Documents. The Company shall maintain the
Common Stock’s authorization for listing on the Principal Market. Neither the Company nor any of
its Subsidiaries shall take any action which would be reasonably expected to result in the
delisting or suspension of the Common Stock on the Principal Market. The Company shall pay all fees
and expenses in connection with satisfying its obligations under this Section 4(f).



               (g)       Fees. Subject to Section 8 below, at Closing, the Company shall pay an expense
allowance to Capital Ventures International LP (a Buyer) or its designee(s) (in addition to any
other expense amounts paid to any Buyer prior to the date of this Agreement) for all reasonable
costs and expenses incurred in connection with the transactions contemplated by the Transaction
Documents (including all reasonable legal fees and disbursements in connection therewith,
documentation and implementation of the transactions contemplated by the Transaction Documents and
due diligence in connection therewith), in an amount not to exceed $30,000 (in addition to any
other expense amounts paid to any Buyer prior to the date of this Agreement), which amount shall be
withheld by such Buyer from its Purchase Price at the Closing. The Company shall be responsible
for the payment of any placement agent’s fees, financial advisory fees, or broker’s commissions
relating to or arising out of the transactions contemplated hereby and incurred by the Company,
including, without limitation, any fees payable to the Agent. The Company shall pay, and hold each
Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable
attorney’s fees and out-of-pocket expenses) arising in connection with any claim relating to any
such payment.



               (h)       Pledge of Securities. The Company acknowledges and agrees that the Securities may
be pledged by an Investor (as defined in the Registration Rights Agreement) in connection with a
bona fide margin agreement or other loan or financing arrangement that is secured by the
Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of
the Securities hereunder, and no Investor effecting a pledge of Securities shall be required to
provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant
to this Agreement or any other Transaction Document, including, without limitation, Section 2(g) of
this Agreement; provided that an Investor and its pledgee shall be required to comply with the
provisions of Section 2(g) of this Agreement in order to effect a sale, transfer or assignment of
Securities to such pledgee. The Company hereby agrees to execute and



18









 







deliver such documentation as a pledgee of the Securities may reasonably request in connection
with a pledge of the Securities to such pledgee by an Investor.



               (i)       Disclosure of Transactions and Other Material Information. On or before 8:30
a.m., New York City time, on the first Business Day following the date of this Agreement, the
Company shall issue a press release and file a Current Report on Form 8-K describing the terms of
the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and
attaching the material Transaction Documents (including, without limitation, this Agreement (and
all schedules to this Agreement) and the form of the Registration Rights Agreement) as exhibits to
such filing (including all attachments, the “8-K Filing”). From and after the filing of the 8-K
Filing with the SEC, no Buyer shall be in possession of any material, nonpublic information
received from the Company, any of its Subsidiaries or any of its respective officers, directors,
employees or agents, that is not disclosed in the 8-K Filing. The Company shall not, and shall
cause each of its Subsidiaries and its and each of their respective officers, directors, employees
and agents, not to, provide any Buyer with any material, nonpublic information regarding the
Company or any of its Subsidiaries from and after the filing of the 8-K Filing with the SEC without
the express written consent of such Buyer or as may be required under the terms of the Transaction
Documents. If a Buyer has, or believes it has, received any such material, nonpublic information
regarding the Company or any of its Subsidiaries, it may provide the Company with written notice
thereof. The Company shall, within five (5) Trading Days of receipt of such notice, make public
disclosure of such material, nonpublic information. In the event of a breach of the foregoing
covenant by the Company, any of its Subsidiaries, or any of its or their respective officers,
directors, employees and agents, in addition to any other remedy provided herein or in the
Transaction Documents, a Buyer shall have the right to make a public disclosure, in the form of a
press release, public advertisement or otherwise, of such material, nonpublic information without
the prior approval by the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. No Buyer shall have any liability to the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees, stockholders or
agents for any such disclosure. Subject to the foregoing, neither the Company, its Subsidiaries
nor any Buyer shall issue any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of any Buyer, to make any press release or other public
disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law and regulations (provided
that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any
such press release or other public disclosure prior to its release). Without the prior written
consent of any applicable Buyer, neither the Company nor any of its Subsidiaries or affiliates
shall disclose the name of such Buyer in any filing, announcement, release or otherwise, unless
such disclosure is required by law, regulation or the Principal Market.



               (j)       Additional Registration Statements. Until the date that is 90 calendar days from
the Effective Date (as defined in the Registration Rights Agreement), the Company will not file a
new registration statement under the 1933 Act relating to securities that are not the Securities
other than a Form S-8 or Form S-4; for the avoidance of doubt, the foregoing shall not restrict the
Company’s ability to amend a registration statement of the Company already on file with the SEC (an
"Existing Registration Statement”) (or supplement the prospectus contained



19









 







therein) provided that neither the amendment nor the prospectus supplement increases the
aggregate number of shares of Common Stock registered pursuant to such Existing Registration
Statement.



               (k)       Corporate Existence. So long as any Buyer beneficially owns any Securities, the
Company shall maintain its corporate existence and shall not sell all or substantially all of the
Company’s assets, except in the event of a merger or consolidation or sale of all or substantially
all of the Company’s assets, where the surviving or successor entity in such transaction (i)
assumes the Company’s obligations hereunder and under the agreements and instruments entered into
in connection herewith and (ii) is a publicly traded corporation whose common stock is quoted on or
listed for trading on the Principal Market, the NASDAQ Capital Market, The NASDAQ Global Select
Market, the New York Stock Exchange or the American Stock Exchange.



               (l)       Additional Issuances of Securities.



                         (i)       For purposes of this Section 4(l), the following definitions shall apply.




                           (1)       “Approved Stock Plan” means any employee benefit plan which has been approved by
the Board of Directors of the Company, pursuant to which the Company’s securities may be
issued to any employee, officer, consultant or director for services provided to the
Company.




                           (2)       “Common Stock Equivalents” means, collectively, Options and Convertible Securities.




                           (3)       “Convertible Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for Common Stock.




                           (4)       “Excluded Securities” means Common Stock issued or issuable: (i) in connection with
any Approved Stock Plan, (ii) upon exercise of the Warrants, (iii) upon exercise or
conversion of any Options or Convertible Securities which are outstanding on the day
immediately preceding the Closing Date, provided that the terms of such Options or
Convertible Securities are not materially amended, modified or changed on or after the
Closing Date, including, without limitation any amendment, modification or change to
decrease the exercise or conversion price, increase the term of, or increase the number of
shares issuable upon conversion or exercise of such Option or Convertible Security and (iv)
in connection with any strategic acquisition or strategic transaction by the Company,
whether through an acquisition of stock or a merger of any business, assets or technologies
the primary purpose of which is not to raise equity capital.




                           (5)       “Options” means any rights, warrants or options to subscribe for or purchase Common
Stock or Convertible Securities.




                           (6)       “Trading Day” means any day on which the Common Stock is traded on the Principal
Market, or, if the Principal Market is not the principal



20









 







trading market for the Common Stock, then on the principal securities exchange or
securities market on which the Common Stock is then traded; provided that “Trading Day”
shall not include any day on which the Common Stock is scheduled to trade on such exchange
or market for less than 4.5 hours or any day that the Common Stock is suspended from trading
during the final hour of trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such exchange or market, then
during the hour ending at 4:00 p.m., New York City time).



                         (ii)       From the date hereof until the Effective Date (the “Trigger Date”), the Company will not,
directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or
announce any offer, sale, grant or any option to purchase or other disposition of) any of its or
its Subsidiaries’ equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of Common Stock or Common
Stock Equivalents (any such offer, sale, grant, disposition or announcement being referred to as a
"Subsequent Placement”); provided that the foregoing shall not apply to any Subsequent Placement
which does not have the right to be registered for resale prior to the three (3) month anniversary
of the Effective Date.



                         (iii)       The restrictions contained in subsections (ii) of this Section 4(l) shall not apply in
connection with the issuance of any Excluded Securities.



               (m)       Variable Securities. For so long as any Securities remain outstanding, the
Company shall not, in any manner, issue or sell any rights, warrants or options to subscribe for or
purchase Common Stock or directly or indirectly convertible into or exchangeable or exercisable for
Common Stock at a price which varies or may vary with the market price of the Common Stock,
including by way of one or more reset(s) to any fixed price.



               (n)       Conduct of Business. The business of the Company and its Subsidiaries shall not
be conducted in violation of any law, ordinance or regulation of any governmental entity, except
where such violations would not reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect.



     5.       REGISTER; TRANSFER AGENT INSTRUCTIONS.



               (a)       Register. The Company shall maintain at its principal executive offices (or such
other office or agency of the Company as it may designate by notice to each holder of Securities),
a register for the Common Shares and the Warrants, in which the Company shall record the name and
address of the Person in whose name the Common Shares and the Warrants have been issued (including
the name and address of each transferee), the number of Common Shares held by such Person and the
number of Warrant Shares issuable upon exercise of the Warrants held by such Person. The Company
shall keep the register open and available at all times during business hours for inspection of any
Buyer or its legal representatives.



               (b)       Transfer Agent Instructions. The Company shall issue irrevocable instructions to
its transfer agent, and any subsequent transfer agent, to issue certificates or credit shares to
the applicable balance accounts at DTC, registered in the name of each Buyer or its



21









 







respective nominee(s), for the Common Shares, and the Warrant Shares issued at the Closing or
upon exercise of the Warrants in such amounts as specified from time to time by each Buyer to the
Company upon exercise of the Warrants in the form of Exhibit C attached hereto (the
"Irrevocable Transfer Agent Instructions”). The Company warrants that no instruction other than
the Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop transfer
instructions to give effect to Section 2(h) hereof, will be given by the Company to its transfer
agent, and that the Securities shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the other Transaction Documents.
If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(h)
and the other Transaction Documents, the Company shall permit the transfer and shall promptly
instruct its transfer agent to issue one or more certificates or credit shares to the applicable
balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect
such sale, transfer or assignment. In the event that such sale, assignment or transfer involves
Common Shares or Warrant Shares sold, assigned or transferred pursuant to an effective registration
statement or pursuant to Rule 144, the transfer agent shall issue such Common Shares or Warrant
Shares to the Buyer, assignee or transferee, as the case may be, without any restrictive legend.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be
entitled, in addition to all other available remedies, to an order and/or injunction restraining
any breach and requiring immediate issuance and transfer, without the necessity of showing economic
loss and without any bond or other security being required.



               (c)       Additional Relief. If the Company shall fail for any reason or for no reason to
issue to the Buyer unlegended certificates or issue such Common Shares or Warrant Shares to such
Buyer by electronic delivery at the applicable balance account at DTC within three (3) Trading Days
(as defined below) after the receipt of documents necessary for the removal of the legend set forth
in Section 2(h) above (the “Deadline Date”), then in addition to all other remedies available to
the Buyer, if on or after the Trading Day immediately following such three Trading Day period, the
Buyer purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Buyer of such Common Shares or Warrant Shares that the Buyer
anticipated receiving without legend from the Company (a “Buy-In"), then the Company shall, within
three (3) Business Days after the Buyer’s request and in the Buyer’s discretion, either (i) pay
cash to the Buyer in an amount equal to the Buyer’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price"), at which
point the Company’s obligation to deliver such unlegended Common Shares or Warrant Shares shall
terminate, or (ii) promptly honor its obligation to deliver to the Buyer such unlegended Common
Shares or Warrant Shares as provided above and pay cash to the Buyer in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price on the Removal Date. For purposes hereof, “Closing Bid Price”
means, for any security as of any date, the last closing bid price for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price then the last bid price of such
security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal
Market is not the principal securities exchange or trading market for such security, the last
closing bid price of



22









 







such security on the principal securities exchange or trading market where such security is
listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid
price of such security in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no closing bid price or is reported for such security by
Bloomberg, the average of the bid prices of any market makers for such security as reported in the
“pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing
Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases,
the Closing Bid Price of such security on such date shall be the fair market value as mutually
determined by the Company and the holder of Securities. If the Company and the holder of
Securities are unable to agree upon the fair market value of such security, then such dispute shall
be resolved pursuant to Section 9(p). All such determinations to be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction during the applicable
calculation period.



     6.       CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.



               The obligation of the Company hereunder to issue and sell the Common Shares and the related
Warrants to each Buyer at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing each
Buyer with prior written notice thereof:



                         (i)       Such Buyer shall have executed each of the Transaction Documents to which it is a party
and delivered the same to the Company.



                         (ii)       Such Buyer shall have delivered to the Company the Purchase Price (less, in the case of
Capital Ventures International LP, the amounts withheld pursuant to Section 4(g)) for the Common
Shares and the related Warrants being purchased by such Buyer and each other Buyer at the Closing
by wire transfer of immediately available funds pursuant to the wire instructions provided by the
Company.



                         (iii)       The representations and warranties of such Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date which shall be true and
correct as of such specified date), and such Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by this Agreement to
be performed, satisfied or complied with by such Buyer at or prior to the Closing Date.



     7.       CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.



               The obligation of each Buyer hereunder to purchase the Common Shares and the related Warrants
at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for each Buyer’s sole benefit and may be
waived by such Buyer at any time in its sole discretion by providing the Company with prior written
notice thereof:



23









 





                         (i)       The Company shall have executed and delivered to such Buyer (i) each of the Transaction
Documents and (ii) the Common Shares (in such amounts as is set forth across from such Buyer’s name
in column (3) of the Schedule of Buyers) and the related Warrants (in such amounts as is set forth
across from such Buyer’s name in column (4) of the Schedule of Buyers) being purchased by such
Buyer at the Closing pursuant to this Agreement.



                         (ii)       Such Buyer shall have received the opinion of Haynes and Boone, LLP, the Company’s
outside counsel (“Company Counsel”), dated as of the Closing Date, in substantially the form of
Exhibit D attached hereto.



                         (iii)       The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent
Instructions, in the form of Exhibit C attached hereto, which instructions shall have been
delivered to and acknowledged in writing by the Company’s transfer agent.



                         (iv)       The Company shall have delivered to such Buyer a certificate evidencing the incorporation
and good standing of the Company and each of its U.S. Subsidiaries in such corporation’s state of
incorporation issued by the Secretary of State of such state of incorporation as of a date within
10 days of the Closing Date.



                         (v)       The Company shall have delivered to such Buyer a certificate evidencing the Company’s
qualification as a foreign corporation and good standing issued by the Secretary of State (or
comparable office) of each jurisdiction in which the Company conducts business and is required to
so qualify, as of a date within 10 days of the Closing Date.



                         (vi) The Common Stock (I) shall be listed on the Principal Market and (II) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal
Market nor shall suspension by the SEC or the Principal Market have been threatened, as of the
Closing Date, either (A) in writing by the SEC or the Principal Market or (B) by falling below the
minimum listing maintenance requirements of the Principal Market.



                         (vii)       The Company shall have delivered to such Buyer a certified copy of the Certificate of
Incorporation as certified by the Secretary of State of the State of Delaware within 10 days of the
Closing Date.



                         (viii)       The Company shall have delivered to such Buyer a certificate, executed by the Secretary
of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section
3(b) as adopted by the Company’s Board of Directors in a form reasonably acceptable to such Buyer,
(ii) the Certificate of Incorporation and (iii) the Bylaws, each as in effect at the Closing, in
the form attached hereto as Exhibit D.



                         (ix)       (i) The representations and warranties of the Company, to the extent not qualified by
materiality or Material Adverse Effect, shall have been true and correct in all material respects
as of the date when made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date which shall be true and correct in
all material respects as of such specified date), (ii) the representations and warranties of the
Company, to the extent qualified by materiality or Material Adverse Effect,



24









 







shall have been true and correct as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a specific date which
shall be true and correct as of such specified date), and (iii) the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by the Company at
or prior to the Closing Date. Such Buyer shall have received a certificate, executed by the Senior
Vice President and Chief Financial Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the
form attached hereto as Exhibit E.



                         (x)       The Company shall have delivered to such Buyer a letter from the Company’s transfer agent
certifying the number of shares of Common Stock outstanding as of a date within five days of the
Closing Date.



                         (xi)       The Company shall have obtained all governmental, regulatory or third party consents and
approvals, if any, necessary for the sale of the Securities.



                         (xii)       The Company shall have delivered to such Buyer such other documents relating to the
transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.



     8.       TERMINATION. In the event that the Closing shall not have occurred with respect to
a Buyer on or before five (5) Business Days from the date hereof due to the Company’s or such
Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above (and the nonbreaching
party’s failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the
option to terminate this Agreement with respect to such breaching party at the close of business on
such date without liability of any party to any other party; provided, however,
this if this Agreement is terminated pursuant to this Section 8 by Capital Ventures International,
LP, the Company shall remain obligated to reimburse Capital Ventures International, LP for the
expenses described in Section 4(g) above.



     9.       MISCELLANEOUS.



               (a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of New York. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, Borough of Manhattan 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. Each party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy thereof to such party
at the address for such notices to it under this Agreement and agrees that such



25









 







service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.



               (b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an original, not a
facsimile signature.



               (c) Headings. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.



               (d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity
or enforceability of any provision of this Agreement in any other jurisdiction.



               (e)       Entire Agreement; Amendments. This Agreement and the other Transaction Documents
supersede all other prior oral or written agreements between the Buyers, the Company, their
Affiliates and Persons acting on their behalf with respect to the matters discussed herein, and
this Agreement, the other Transaction Documents and the instruments referenced herein contain the
entire understanding of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor any Buyer makes any
representation, warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be amended other than by an instrument in writing signed by the Company and the
holders of Securities representing at least a majority of the amount of the Common Shares, or, if
prior to the Closing Date, the Buyers listed on the Schedule of Buyers as being obligated to
purchase at least a majority of the amount of the Common Shares, and any amendment to this
Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all
Buyers, holders of Common Shares and holders of the Warrants, as applicable. No provision hereof
may be waived other than by an instrument in writing signed by the party against whom enforcement
is sought. No such amendment shall be effective to the extent that it applies to less than all of
the holders of the Common Shares then outstanding. No consideration shall be offered or paid to
any Person to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration also is offered to all of the parties to the
Transaction Documents, holders of Common Shares or holders of Warrants, as the case may be. The
Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms
or conditions of the transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as
set forth in



26









 







this Agreement, no Buyer has made any commitment or promise or has any other obligation to
provide any financing to the Company or otherwise.



               (f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:



     If to the Company:


Toreador Resources Corporation

4809 Cole Avenue

Suite 108

Dallas, Texas 75205

Telephone: (214) 559-3933

Facsimile: (214) 559-3945

Attention: Doug Weir




     with a copy (for informational purposes only) to:


Haynes and Boone, LLP

901 Main St., Suite 3100

Dallas, TX 75202

Telephone: (214) 651-5562

Facsimile: (214) 200-0676

Attention: Janice V. Sharry, Esq.




     If to the Transfer Agent:


American Stock Transfer & Trust Company

59 Maiden Lane — Plaza Level

New York, NY 10038

Telephone: (718) 921-8293

Facsimile: (718) 921-8334

Attention: Issac Kagan



If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers, with copies
to such Buyer’s representatives as set forth on the Schedule of Buyers,




     with a copy (for informational purposes only) to:


Schulte Roth & Zabel LLP

919 Third Avenue





27









 







New York, New York 10022

Telephone: (212) 756-2000

Facsimile: (212) 593-5955

Attention: Eleazer N. Klein, Esq.



or to such other address and/or facsimile number and/or to the attention of such other Person as
the recipient party has specified by written notice given to each other party five (5) days prior
to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or electronically generated
by the sender’s facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above, respectively.




               (g) Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including any purchasers of the
Common Shares. The Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the holders of Common Shares representing at least a majority
of the number of the Common Shares, including by merger or consolidation. A Buyer may assign some
or all of its rights hereunder without the consent of the Company, in which event such assignee
shall be deemed to be a Buyer hereunder with respect to such assigned rights.



               (h) No Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person.



               (i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in Sections 2 and 3, the
agreements and covenants set forth in Sections 4, 5 and 9 shall survive the Closing and the
delivery and exercise of Securities, as applicable. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.



               (j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.



               (k) Indemnification. In consideration of each Buyer’s execution and delivery of the
Transaction Documents and acquiring the Securities thereunder and in addition to all of the
Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless each Buyer and each other holder of the Securities and all of their
stockholders, partners, members, officers, directors, employees and direct or indirect investors
and any of the foregoing Persons’ agents or other representatives (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively,
the “Indemnitees”) from and against any and all actions, causes of action, suits,



28









 







claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (other than incidental or consequential damages, losses, liabilities and expenses)
(irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the Company in the
Transaction Documents or any other certificate, instrument or document contemplated hereby or
thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the
Transaction Documents or any other certificate, instrument or document contemplated hereby or
thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee by a
third party (including for these purposes a derivative action brought on behalf of the Company) and
arising out of or resulting from the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document contemplated hereby or
thereby. To the extent that the foregoing undertaking by the Company may be unenforceable for any
reason, the Company shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and obligations under this
Section 9(k) shall be the same as those set forth in Section 6 of the Registration Rights
Agreement.



               (l)       No Strict Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.



               (m)       Remedies. Each Buyer and each holder of the Securities shall have all rights and
remedies set forth in the Transaction Documents and all rights and remedies which such holders have
been granted at any time under any other agreement or contract and all of the rights which such
holders have under any law. Any Person having any rights under any provision of this Agreement
shall be entitled to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law. Furthermore, the Company recognizes that in the event that it fails
to perform, observe, or discharge any or all of its obligations under the Transaction Documents,
any remedy at law may prove to be inadequate relief to the Buyers. The Company therefore agrees
that the Buyers shall be entitled to seek temporary and permanent injunctive relief in any such
case without the necessity of proving actual damages and without posting a bond or other security.



               (n)       Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction Documents, whenever
any Buyer exercises a right, election, demand or option under a Transaction Document and the
Company does not timely perform its related obligations within the periods therein provided, then
such Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to
the Company, any relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights.



               (o)       Payment Set Aside. To the extent that the Company makes a payment or payments to
the Buyers hereunder or pursuant to any of the other Transaction Documents or the



29









 







Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments
or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other
Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement or setoff had not
occurred.



               (p)       Dispute Resolution. In the case of a dispute as to the determination of the
Closing Bid Price, the Company shall submit the disputed determinations via facsimile within two
Business Days of receipt of the notice giving rise to such dispute to the Buyer. If the Buyer and
the Company are unable to agree upon such determination of the Closing Bid Price within three
Business Days of such disputed determination being submitted to the Buyer, then the Company shall,
within two Business Days submit via facsimile the disputed determination of the Closing Bid Price
to an independent, reputable investment bank selected by the Company and approved by the Buyer.
The Company shall cause at its expense the investment bank to perform the determinations and notify
the Company and the Buyer of the results no later than ten Business Days from the time it receives
the disputed determinations. Such investment bank’s determination shall be binding upon all
parties absent demonstrable error.



               (q)       Independent Nature of Buyers’ Obligations and Rights. The obligations of each
Buyer under any Transaction Document are several and not joint with the obligations of any other
Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any
other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Buyers are in any way acting in concert or as a group, and
the Company will not assert any such claim, with respect to such obligations or the transactions
contemplated by the Transaction Documents and the Company acknowledges that the Buyers are not
acting in concert or as a group with respect to such obligations or the transactions contemplated
by the Transaction Documents. Each Buyer confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors.
Each Buyer shall be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and
it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding
for such purpose.



[Signature Page Follows]





30










 





     IN WITNESS WHEREOF, each Buyer and the Company have caused its respective signature page
to this Securities Purchase Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	COMPANY:





TOREADOR RESOURCES CORPORATION

 	 
	 	By:  	/s/ Douglas Weir
 	 
	 	 	Name:  	Douglas Weir 	 
	 	 	Title:  	Senior VP & CFO 	 
	 



[Signature Page to Securities Purchase Agreement]




 









 









     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



CAPITAL VENTURES INTERNATIONAL

 	 
	 	By:  	Heights Capital Management, Inc., its authorized agent
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/ Martin Kobinger
 	 
	 	 	Name:  	Martin Kobinger 	 
	 	 	Title:  	Investment Manager 	 
	 



[Signature Page to Securities Purchase Agreement]






 









 









     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



GOLDMAN SACHS & CO.

 	 
	 	By:  	/s/ Albert Dombrowski
 	 
	 	 	Name:  	Albert Dombrowski 	 
	 	 	Title:  	Authorized Signatory 	 
	 



[Signature Page to Securities Purchase Agreement]





 









 









     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



SF CAPITAL PARTNERS LTD.

 	 
	 	By:  	/s/ Brian H. Davidson
 	 
	 	 	Name:  	Brian H. Davidson 	 
	 	 	Title:  	Managing Director 	 
	 



[Signature Page to Securities Purchase Agreement]





 









 









     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



OLD LANE, LP ON BEHALF OF OLD

LANE CAYMAN MASTER FUND, LP

 	 
	 	By:  	/s/ Jonathan Barton
 	 
	 	 	Name:  	Jonathan Barton 	 
	 	 	Title:  	Managing Director 	 
	 



[Signature Page to Securities Purchase Agreement]





 









 









     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



OLD LANE, LP ON BEHALF OF OLD

LANE HMA MASTER FUND, LP

 	 
	 	By:  	/s/ Jonathan Barton
 	 
	 	 	Name:  	Jonathan Barton 	 
	 	 	Title:  	Managing Director 	 
	 



[Signature Page to Securities Purchase Agreement]





 









 









     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



OLD LANE, LP ON BEHALF OF OLD

LANE US MASTER FUND, LP

 	 
	 	By:  	/s/ Jonathan Barton
 	 
	 	 	Name:  	Jonathan Barton 	 
	 	 	Title:  	Managing Director 	 
	 



[Signature Page to Securities Purchase Agreement]





 










 






SCHEDULE OF BUYERS




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(1)	 	(2)	 	(3)	 	(4)	 	(5)	 	(6)
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Number of	 	Number of	 	 	 	Legal Representative’s
	Buyer	 	Address and Facsimile Number	 	Common Shares	 	Warrant Shares	 	Purchase Price	 	Address and Facsimile Number
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Capital Ventures International LP

	 	c/o Heights Capital Management, Inc.
	 	 	903,614	 	 	 	163,052	 	 	$	15,000,000	 	 	Schulte Roth & Zabel LLP
	 

	 	101 California Street, Suite 3250

San Francisco, CA 94111

Attention: Martin Kobinger

Facsimile: (415) 403-6525

Telephone: (415) 403-6500

Residence: Cayman Islands
	 	 	 	 	 	 	 	 	 	 	 	 	 	919 Third Avenue

New York, New York 10022

Attention: Eleazer Klein, Esq.

Facsimile: (212) 593-5955

Telephone: (212) 756-2376
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Goldman Sachs & Co.

	 	85 Broad Street

New York, NY 10004-2456

Attention: Daniel Oneglia 

Tel: 212-902-8212

daniel.oneglia@gs.com
	 	 	903,614	 	 	 	163,052	 	 	$	15,000,000	 	 	Cravath, Swaine & Moore LLP

825 Eighth Avenue 

New York, New York 10019

Attention: Erik Tavzel 

Facsimile: (212) 474-3700

Telephone: (212) 474-1796






 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(1)	 	(2)	 	(3)	 	(4)	 	(5)	 	(6)
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Number of	 	Number of	 	 	 	Legal Representative’s
	Buyer	 	Address and Facsimile Number	 	Common Shares	 	Warrant Shares	 	Purchase Price	 	Address and Facsimile Number
	SF Capital Partners Ltd.

	 	c/o Stark Offshore Management LLC
	 	 	602,410	 	 	 	108,701	 	 	$	10,000,000	 	 	 
	 

	 	3600 South Lake Drive

St. Francis, WI 53235

Attention: Brian Davidson

Tel: 414-294-7016

Fax: 414-294-7700

bdavidson@starkinvestments.com	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Old Lane Cayman Master Fund, LP

	 	Old Lane, LP
	 	 	179,518	 	 	 	32,393	 	 	$	2,980,000	 	 	 
	 

	 	500 Park Avenue, 2nd Floor

New York, NY 10022

Attention: Jonathan Barton

Chief Financial Officer

Tel: 212-572-3260

jonathan.barton@oldlane.com	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Old Lane HMA Master Fund, LP

	 	Old Lane, LP
	 	 	50,904	 	 	 	9,185	 	 	$	845,000	 	 	 
	 

	 	500 Park Avenue, 2nd Floor

New York, NY 10022

Attention: Jonathan Barton

Chief Financial Officer 

Tel: 212-572-3260

jonathan.barton@oldlane.com	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Old Lane US Master Fund, LP

	 	Old Lane, LP
	 	 	70,783	 	 	 	12,772	 	 	$	1,175,000	 	 	 
	 

	 	500 Park Avenue, 2nd Floor

New York, NY 10022

Attention: Jonathan Barton

Chief Financial Officer

Tel: 212-572-3260

jonathan.barton@oldlane.com	 	 	 	 	 	 	 	 	 	 	 	 	 	 






[Signature Page to Securities Purchase Agreement]





 









 







[Signature Page to Securities Purchase Agreement]





 









 





EXHIBITS




	 	 	 
	Exhibit A

	 	Form of Warrant
	Exhibit B

	 	Form of Registration Rights Agreement
	Exhibit C

	 	Form of Irrevocable Transfer Agent Instructions
	Exhibit D

	 	Form of Company Counsel Opinion
	Exhibit E

	 	Form of Secretary’s Certificate
	Exhibit F

	 	Form of Officer’s Certificate






 









 






SCHEDULES




	 	 	 	 	 
	Schedule 3(a)

	 	-
	 	List of Subsidiaries
	Schedule 3(e)

	 	-
	 	Consents
	Schedule 3(i)

	 	-
	 	Application of Takeover Protections
	Schedule 3(j)

	 	-
	 	SEC Documents
	Schedule 3(k)

	 	-
	 	Absence of Certain Changes
	Schedule 3(m)

	 	-
	 	Conduct of Business
	Schedule 3(p)

	 	-
	 	Transactions with Affiliates
	Schedule 3(q)

	 	-
	 	Equity Capitalization
	Schedule 3(r)

	 	-
	 	Indebtedness and Other Contracts
	Schedule 3(s)

	 	-
	 	Absence of Litigation
	Schedule 3(t)

	 	-
	 	Insurance
	Schedule 3(v)

	 	-
	 	Title
	Schedule 3(y)

	 	 	 	Subsidiary Rights
	Schedule 3(aa)

	 	-
	 	Internal Accounting and Disclosure Controls






-42-









 






EXHIBIT A




[FORM OF WARRANT]



NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH
COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.




TOREADOR RESOURCES CORPORATION




Warrant To Purchase Common Stock




Warrant No.:           

Number of Shares:           

March 23, 2007 (“Issuance Date”)




          Toreador Resources Corporation, a Delaware corporation (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
[CAPITAL VENTURES INTERNATIONAL LP] [GOLDMAN SACHS & CO.] [SF CAPITAL PARTNERS LTD.] [OLD LANE
CAYMAN MASTER FUND, LP] [OLD LANE HMA MASTER FUND, LP] [OLD LANE US MASTER FUND, LP], the
registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in
effect, upon surrender of this Warrant to Purchase Common Stock (including any Warrants to Purchase
Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or
times on or after the date hereof, but not after 11:59 p.m., New York time, on the Expiration Date
(as defined below), ___(___)1 fully paid nonassessable shares of
Common Stock (as defined below) (the “Warrant Shares”). To the extent any holder of SPA Warrants
(as defined below) has not exercised its SPA Warrants in full (such unexercised number of Warrant
Shares, collectively, the “Remaining Shares”) on






 




			
	 	 	1Insert a number of shares equal to such
Holder’s pro rata portion of 489,155 shares.




-43-









 









or prior to 11:59 p.m., New York time, on the Expiration Date, the number of Warrant Shares
for which the SPA Warrants of each other holder of SPA Warrants who has exercised its SPA Warrants
in full on such date (the “Fully Exercised Holders”) shall be increased by such Fully Exercised
Holder’s pro rata portion of the Remaining Shares and the Expiration Date of the SPA Warrants held
by the Fully Exercised Holders shall be extended by five Trading Days (as defined in the Securities
Purchase Agreement). Except as otherwise defined herein, capitalized terms in this Warrant shall
have the meanings set forth in Section 12. This Warrant is one of the Warrants to purchase Common
Stock (the “SPA Warrants”) issued pursuant to Section 1 of that certain Securities Purchase
Agreement, dated as of March 21, 2007 (the “Subscription Date”), by and among the Company and the
investors (the “Buyers”) referred to therein (the “Securities Purchase Agreement”).




     10. EXERCISE OF WARRANT.



          Mechanics of Exercise. Subject to the terms and conditions hereof, this Warrant may
be exercised by the Holder on any day on or after the date hereof, in whole or in part, by (i)
delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant and (ii) payment to the Company of an
amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to
which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash or by wire transfer
of immediately available funds. The Holder shall not be required to deliver the original Warrant
in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with
respect to less than all of the Warrant Shares shall have the same effect as cancellation of the
original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining
number of Warrant Shares. On or before the first (1st) Business Day following the date
on which the Company has received each of the Exercise Notice and the Aggregate Exercise Price (the
"Exercise Delivery Documents”), the Company shall transmit by facsimile an acknowledgment of
confirmation of receipt of the Exercise Delivery Documents to the Holder and the Company’s transfer
agent (the “Transfer Agent”). On or before the third (3rd) Business Day following the
date on which the Company has received all of the Exercise Delivery Documents (the “Share Delivery
Date”), the Company shall issue and dispatch by overnight courier to the address as specified in
the Exercise Notice, a certificate, registered in the Company’s share register in the name of the
Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise. Upon delivery of the Exercise Notice and Aggregate Exercise Price
referred to in clause (ii) above, the Holder shall be deemed for all corporate purposes to have
become the holder of record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares.
If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the
number of Warrant Shares represented by this Warrant submitted for exercise is greater than the
number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as
practicable and in no event later than three Business Days after any exercise and at its own
expense, issue a new Warrant (in accordance with Section 5(d)) representing the right to purchase
the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant,
less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional
shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of
shares of Common Stock to be

-44-









 








issued shall be rounded up to the nearest whole number. The Company
shall pay any and all
taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant.




          Exercise Price. For purposes of this Warrant, “Exercise Price” means $16.60, subject
to adjustment as provided herein.




          Disputes. In the case of a dispute as to the determination of the Exercise Price or
the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder
the number of Warrant Shares that are not disputed and resolve such dispute in accordance with
Section 9(p) of the Securities Purchase Agreement.




     11. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. THE EXERCISE PRICE AND
THE NUMBER OF WARRANT SHARES SHALL BE ADJUSTED FROM TIME TO TIME AS FOLLOWS:



          Adjustment upon Subdivision or Combination of Common Stock. If the Company at any
time on or after the Subscription Date subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such subdivision will
be proportionately reduced and the number of Warrant Shares will be proportionately increased. If
the Company at any time on or after the Subscription Date combines (by combination, reverse stock
split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such combination will be
proportionately increased and the number of Warrant Shares will be proportionately decreased. Any
adjustment under this Section 2(a) shall become effective at the close of business on the date the
subdivision or combination becomes effective.




     12. NONCIRCUMVENTION. THE COMPANY HEREBY COVENANTS AND AGREES THAT THE COMPANY WILL
NOT, BY AMENDMENT OF ITS CERTIFICATE OF INCORPORATION, BYLAWS OR THROUGH ANY REORGANIZATION,
TRANSFER OF ASSETS, CONSOLIDATION, MERGER, SCHEME OF ARRANGEMENT, DISSOLUTION, ISSUE OR SALE OF
SECURITIES, OR ANY OTHER VOLUNTARY ACTION, AVOID OR SEEK TO AVOID THE OBSERVANCE OR PERFORMANCE OF
ANY OF THE TERMS OF THIS WARRANT, AND WILL AT ALL TIMES IN GOOD FAITH CARRY OUT ALL THE PROVISIONS
OF THIS WARRANT AND TAKE ALL ACTION AS MAY BE REQUIRED TO PROTECT THE RIGHTS OF THE HOLDER.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE COMPANY (I) SHALL NOT INCREASE THE PAR VALUE
OF ANY SHARES OF COMMON STOCK RECEIVABLE UPON THE EXERCISE OF THIS WARRANT ABOVE THE EXERCISE PRICE
THEN IN EFFECT, (II) SHALL TAKE ALL SUCH ACTIONS AS MAY BE NECESSARY OR APPROPRIATE IN ORDER THAT
THE COMPANY MAY VALIDLY AND LEGALLY ISSUE FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK UPON
THE EXERCISE OF THIS WARRANT, AND (III) SHALL, SO LONG AS ANY OF THE SPA WARRANTS ARE OUTSTANDING,
TAKE ALL ACTION NECESSARY TO RESERVE



-45-









 







AND KEEP AVAILABLE OUT OF ITS AUTHORIZED AND UNISSUED SHARES
OF COMMON STOCK, SOLELY FOR THE PURPOSE OF EFFECTING THE EXERCISE OF
THE SPA WARRANTS, THE NUMBER OF SHARES OF COMMON STOCK AS SHALL FROM TIME TO TIME BE NECESSARY
TO EFFECT THE EXERCISE OF THE SPA WARRANTS THEN OUTSTANDING (WITHOUT REGARD TO ANY LIMITATIONS ON
EXERCISE).



     13. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
HEREIN, THE HOLDER, SOLELY IN SUCH PERSON’S CAPACITY AS A HOLDER OF THIS WARRANT, SHALL NOT BE
ENTITLED TO VOTE OR RECEIVE DIVIDENDS OR BE DEEMED THE HOLDER OF SHARE CAPITAL OF THE COMPANY FOR
ANY PURPOSE, NOR SHALL ANYTHING CONTAINED IN THIS WARRANT BE CONSTRUED TO CONFER UPON THE HOLDER,
SOLELY IN SUCH PERSON’S CAPACITY AS THE HOLDER OF THIS WARRANT, ANY OF THE RIGHTS OF A STOCKHOLDER
OF THE COMPANY OR ANY RIGHT TO VOTE, GIVE OR WITHHOLD CONSENT TO ANY CORPORATE ACTION (WHETHER ANY
REORGANIZATION, ISSUE OF STOCK, RECLASSIFICATION OF STOCK, CONSOLIDATION, MERGER, CONVEYANCE OR
OTHERWISE), RECEIVE NOTICE OF MEETINGS, RECEIVE DIVIDENDS OR SUBSCRIPTION RIGHTS, OR OTHERWISE,
PRIOR TO THE ISSUANCE TO THE HOLDER OF THE WARRANT SHARES WHICH SUCH PERSON IS THEN ENTITLED TO
RECEIVE UPON THE DUE EXERCISE OF THIS WARRANT. IN ADDITION, NOTHING CONTAINED IN THIS WARRANT
SHALL BE CONSTRUED AS IMPOSING ANY LIABILITIES ON THE HOLDER TO PURCHASE ANY SECURITIES (UPON
EXERCISE OF THIS WARRANT OR OTHERWISE) OR AS A STOCKHOLDER OF THE COMPANY, WHETHER SUCH LIABILITIES
ARE ASSERTED BY THE COMPANY OR BY CREDITORS OF THE COMPANY. NOTWITHSTANDING THIS SECTION 4, THE
COMPANY SHALL PROVIDE THE HOLDER WITH COPIES OF THE SAME NOTICES AND OTHER INFORMATION GIVEN TO THE
STOCKHOLDERS OF THE COMPANY GENERALLY, CONTEMPORANEOUSLY WITH THE GIVING THEREOF TO THE
STOCKHOLDERS.



     14. REISSUANCE OF WARRANTS.



          Transfer of Warrant. If this Warrant is to be transferred in accordance with Section
11, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 5(d)),
registered as the Holder may request, representing the right to purchase the number of Warrant
Shares being transferred by the Holder and, if less then the total number of Warrant Shares then
underlying this Warrant is being transferred, a new Warrant (in accordance with Section 5(d)) to
the Holder representing the right to purchase the number of Warrant Shares not being transferred.




          Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in
the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the
Company in customary form and, in the case of mutilation, upon surrender and

-46-









 








cancellation of this
Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with
Section 5(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.




          Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in
accordance with Section 5(d)) representing in the aggregate the right to purchase the number of
Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to
purchase such portion of such Warrant Shares as is designated by the Holder at the time of such
surrender; provided, however, that no Warrants for fractional shares of Common Stock shall be
given.




          Issuance of New Warrants. Whenever the Company is required to issue a new Warrant
pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this
Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase
the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 5(a) or Section 5(c), the Warrant Shares designated by the Holder which, when
added to the number of shares of Common Stock underlying the other new Warrants issued in
connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is
the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.




-47-









 








     15. NOTICES. WHENEVER NOTICE IS REQUIRED TO BE GIVEN UNDER THIS WARRANT, UNLESS
OTHERWISE PROVIDED HEREIN, SUCH NOTICE SHALL BE GIVEN IN ACCORDANCE WITH SECTION 9(F) OF THE
SECURITIES PURCHASE AGREEMENT. THE COMPANY SHALL PROVIDE THE HOLDER WITH PROMPT WRITTEN NOTICE OF
ALL ACTIONS TAKEN PURSUANT TO THIS WARRANT, INCLUDING IN REASONABLE DETAIL A DESCRIPTION OF SUCH
ACTION AND THE REASON THEREFORE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE COMPANY
WILL GIVE WRITTEN NOTICE TO THE HOLDER (I) IMMEDIATELY UPON ANY ADJUSTMENT OF THE EXERCISE PRICE,
SETTING FORTH IN REASONABLE DETAIL, AND CERTIFYING, THE CALCULATION OF SUCH ADJUSTMENT AND (II) AT
LEAST FIFTEEN DAYS PRIOR TO THE DATE ON WHICH THE COMPANY CLOSES ITS BOOKS OR TAKES A RECORD (A)
WITH RESPECT TO ANY DIVIDEND OR DISTRIBUTION UPON THE SHARES OF COMMON STOCK, (B) WITH RESPECT TO
ANY GRANTS, ISSUANCES OR SALES OF ANY OPTIONS, CONVERTIBLE SECURITIES OR RIGHTS TO PURCHASE STOCK,
WARRANTS, SECURITIES OR OTHER PROPERTY TO HOLDERS OF SHARES OF COMMON STOCK, AS A WHOLE, OR (C) FOR
DETERMINING RIGHTS TO VOTE WITH RESPECT TO ANY FUNDAMENTAL TRANSACTION, DISSOLUTION OR LIQUIDATION,
PROVIDED IN EACH CASE THAT SUCH INFORMATION SHALL BE MADE KNOWN TO THE PUBLIC PRIOR TO OR IN
CONJUNCTION WITH SUCH NOTICE BEING PROVIDED TO THE HOLDER.



     16. AMENDMENT AND WAIVER. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE PROVISIONS OF THIS
WARRANT MAY BE AMENDED AND THE COMPANY MAY TAKE ANY ACTION HEREIN PROHIBITED, OR OMIT TO PERFORM
ANY ACT HEREIN REQUIRED TO BE PERFORMED BY IT, ONLY IF THE COMPANY HAS OBTAINED THE WRITTEN CONSENT
OF THE REQUIRED HOLDERS; PROVIDED THAT NO SUCH ACTION MAY INCREASE THE EXERCISE PRICE OF ANY SPA
WARRANT OR DECREASE THE NUMBER OF SHARES OR CLASS OF STOCK OBTAINABLE UPON EXERCISE OF ANY SPA
WARRANT WITHOUT THE WRITTEN CONSENT OF THE HOLDER. NO SUCH AMENDMENT SHALL BE EFFECTIVE TO THE
EXTENT THAT IT APPLIES TO LESS THAN ALL OF THE HOLDERS OF THE SPA WARRANTS THEN OUTSTANDING.



     17. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND
PERFORMANCE OF THIS WARRANT SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTIONS) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTIONS OTHER THAN THE STATE OF NEW YORK.



     18. CONSTRUCTION; HEADINGS. THIS WARRANT SHALL BE DEEMED TO BE JOINTLY DRAFTED BY THE
COMPANY AND ALL THE BUYERS AND SHALL



-48-









 







NOT BE CONSTRUED AGAINST ANY PERSON AS THE DRAFTER HEREOF.
THE HEADINGS OF THIS WARRANT ARE FOR CONVENIENCE OF REFERENCE AND SHALL NOT FORM PART OF, OR AFFECT
THE INTERPRETATION OF, THIS WARRANT.



     19. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. THE REMEDIES
PROVIDED IN THIS WARRANT SHALL BE CUMULATIVE AND IN ADDITION TO ALL OTHER REMEDIES AVAILABLE UNDER
THIS WARRANT AND THE OTHER TRANSACTION DOCUMENTS, AT LAW OR IN EQUITY (INCLUDING A DECREE OF
SPECIFIC PERFORMANCE AND/OR OTHER INJUNCTIVE RELIEF), AND NOTHING HEREIN SHALL LIMIT THE RIGHT OF
THE HOLDER RIGHT TO PURSUE ACTUAL DAMAGES FOR ANY FAILURE BY THE COMPANY TO COMPLY WITH THE TERMS
OF THIS WARRANT. THE COMPANY ACKNOWLEDGES THAT A BREACH BY IT OF ITS OBLIGATIONS HEREUNDER WILL
CAUSE IRREPARABLE HARM TO THE HOLDER AND THAT THE REMEDY AT LAW FOR ANY SUCH BREACH MAY BE
INADEQUATE. THE COMPANY THEREFORE AGREES THAT, IN THE EVENT OF ANY SUCH BREACH OR THREATENED
BREACH, THE HOLDER OF THIS WARRANT SHALL BE ENTITLED, IN ADDITION TO ALL OTHER AVAILABLE REMEDIES,
TO AN INJUNCTION RESTRAINING ANY BREACH, WITHOUT THE NECESSITY OF SHOWING ECONOMIC LOSS AND WITHOUT
ANY BOND OR OTHER SECURITY BEING REQUIRED.



     20. TRANSFER. THIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
WITHOUT THE CONSENT OF THE COMPANY.



     21. CERTAIN DEFINITIONS. FOR PURPOSES OF THIS WARRANT, THE FOLLOWING TERMS SHALL HAVE
THE FOLLOWING MEANINGS:



          "Business Day” means any day other than Saturday, Sunday or other day on which commercial
banks in the City of New York are authorized or required by law to remain closed.




          "Common Stock” means (i) the Company’s shares of Common Stock, par value $0.15625 per share,
and (ii) any share capital into which such Common Stock shall have been changed or any share
capital resulting from a reclassification of such Common Stock.




          "Convertible Securities” means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for shares of Common Stock.




          "Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., the American
Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Capital Market.




          "Expiration Date” means the date thirty (30) days after the Issuance Date or, if such date
falls on a day other than a Business Day or on which trading does not take place on the Principal
Market (a “Holiday”), the next date that is not a Holiday.




-49-









 








          "Fundamental Transaction” means that the Company shall, directly or indirectly, in one or more
related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose
of all or substantially all of the properties or assets of the Company to another Person, or (iii)
allow another Person to make a purchase, tender or exchange offer that is accepted by the holders
of more than the 50% of the outstanding shares of Common Stock (not including any shares of Common
Stock held by the Person or Persons making or party to, or associated or affiliated with the
Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock
purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than the 50% of the outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock purchase agreement or other
business combination), (v) reorganize, recapitalize or reclassify its Common Stock, or (vi) any
“person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by
issued and outstanding Common Stock.




          "Options” means any rights, warrants or options to subscribe for or purchase shares of Common
Stock or Convertible Securities.




          "Person” means an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.




          "Principal Market” means The NASDAQ Global Market.




          "Registration Rights Agreement” means that certain registration rights agreement by and among
the Company and the Buyers.




          "Required Holders” means the holders of the SPA Warrants representing at least two-thirds of
shares of Common Stock underlying the SPA Warrants then outstanding.




[Signature Page Follows]




-50-









 








     IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above.



	 	 	 	 	 
	 	TOREADOR RESOURCES CORPORATION 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 









 





EXHIBIT A




EXERCISE NOTICE




TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK




TOREADOR RESOURCES CORPORATION




     The undersigned holder hereby exercises the right to purchase                      of the shares
of Common Stock (“Warrant Shares”) of Toreador Resources Corporation, a Delaware corporation (the
“Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.



     1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be
made as a “Cash Exercise” with respect to                      Warrant Shares.



     2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with
respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the
Aggregate Exercise Price in the sum of $                     to the Company in accordance with the
terms of the Warrant.



     3. Delivery of Warrant Shares. The Company shall deliver to the holder                      Warrant
Shares in accordance with the terms of the Warrant.


Date:                           ,           




	 	 	 	 	 
	 	 	 
	Name of Registered Holder
	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 






 









 






ACKNOWLEDGMENT




     The Company hereby acknowledges this Exercise Notice and hereby directs American Stock
Transfer & Trust Company to issue the above indicated number of shares of Common Stock in
accordance with the Transfer Agent Instructions dated March ___, 2007 from the Company and
acknowledged and agreed to by American Stock Transfer & Trust Company.



	 	 	 	 	 
	 	TOREADOR RESOURCES CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



2









 






	 	 	 	 	 



EXHIBIT B




REGISTRATION RIGHTS AGREEMENT




          REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of March 21, 2007, by and among
Toreador Resources Corporation, a Delaware corporation, with headquarters located at 4809 Cole
Avenue, Suite 108, Dallas, Texas 75205 (the “Company”), and the investors listed on the Schedule
of Buyers attached hereto (each, a “Buyer” and collectively, the “Buyers”).




          WHEREAS:




          A. In connection with the Securities Purchase Agreement by and among the parties hereto of
even date herewith (the “Securities Purchase Agreement”), the Company has agreed, upon the terms
and subject to the conditions of the Securities Purchase Agreement, to issue and sell to each Buyer
(i) shares (the “Common Shares”) of the Company’s common stock, par value $0.15625 per share (the
“Common Stock”) and (ii) warrants (the “Warrants”) which will be exercisable to purchase shares of
Common Stock (as exercised, the “Warrant Shares”) in accordance with the terms of the Warrants.




          B. In accordance with the terms of the Securities Purchase Agreement, the Company has agreed
to provide certain registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and
applicable state securities laws.




          NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and each of the Buyers hereby agree as follows:




          1. Definitions.




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





               (a) “Business Day” means any day other than Saturday, Sunday or any other day on which
commercial banks in The City of New York are authorized or required by law to remain closed.



               (b) “Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.



               (c) “Effective
Date” means the date the Registration Statement is first declared effective by
the SEC.


               (d) “Effectiveness
Deadline” means the date which is 150 calendar days after the Closing Date.



3









 






               (e) “Filing Deadline” means 60 calendar days after the Closing Date.



               (f) “Investor” means a Buyer, any transferee or assignee thereof to whom a Buyer assigns its
rights under this Agreement and who agrees to become bound by the provisions of this Agreement in
accordance with Section 10 and any transferee or assignee thereof to whom a transferee or assignee
assigns its rights under this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 10.



               (g) “Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and governmental or any department or
agency thereof.



               (h) “One Month Anniversary” means the one month anniversary of a Filing Failure, Effectiveness
Failure and Maintenance Failure, as applicable.



               (h) “register,” “registered,” and “registration” refer to a registration effected by preparing
and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act
and pursuant to Rule 415, and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.



               (i) “Registrable Securities” means (i) the Common Shares, (ii) the Warrant Shares issued or
issuable upon exercise of the Warrants and (iii) any capital stock of the Company issued or
issuable with respect to the Common Shares, the Warrant Shares or the Warrants as a result of any
stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without
regard to any limitations on exercise of the Warrants.



               (j) “Registration Statement” means a registration statement or registration statements of the
Company filed under the 1933 Act covering the Registrable Securities.



               (k) “Required Holders” means the holders of at least two thirds of the Registrable Securities.



               (l) “Required
Registration Amount” means the number of Common Shares issued, subject to
adjustment as provided in Section 2(e).



               (m) “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis.



               (n) “SEC” means the United States Securities and Exchange Commission.



          Capitalized terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement.




4









 








          2. Registration.




               (a) Mandatory Registration. The Company shall prepare, and, as soon as practicable
but in no event later than the Filing Deadline, file with the SEC the Registration Statement on
Form S-1 covering the resale of all of the Registrable Securities (the date of such filing, the
“Filing Date”). In the event that Form S-1 is unavailable for such a registration, the Company
shall use such other form as is available for such a registration on another appropriate form
reasonably acceptable to the Required Holders, subject to the provisions of Section 2(d). The
Registration Statement prepared pursuant hereto shall register for resale at least the number of
shares of Common Stock equal to the Required Registration Amount as of the Filing Date, subject to
adjustment as provided in Section 2(e), and shall contain the “Selling Stockholders” section and
“Plan of Distribution” attached hereto as Annex I. The Company shall use its best efforts
to have the Registration Statement declared effective by the SEC as soon as practicable, but in no
event later than the Effectiveness Deadline. By 9:30 am New York City time on the date following
the Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933
Act the final prospectus to be used in connection with sales pursuant to such Registration
Statement.



               (b) Allocation of Registrable Securities. The initial number of Registrable
Securities included in any Registration Statement and each increase in the number of Registrable
Securities included therein shall be allocated pro rata among the Investors based on the number of
Registrable Securities held by each Investor at the time the Registration Statement covering such
initial number of Registrable Securities or increase thereof is declared effective by the SEC. In
the event that an Investor sells or otherwise transfers any of such Investor’s Registrable
Securities, each transferee shall be allocated a pro rata portion of the then remaining number of
Registrable Securities included in such Registration Statement for such transferor to the extent
such shares are still required to be registered on a registration statement. Any shares of Common
Stock included in a Registration Statement and which remain allocated to any Person which ceases to
hold any Registrable Securities covered by such Registration Statement shall be allocated to the
remaining Investors, pro rata based on the number of Registrable Securities then held by such
Investors which are covered by such Registration Statement. In no event shall the Company include
any securities other than Registrable Securities on any Registration Statement without the prior
written consent of Buyers holding at least a majority of the Registrable Securities.



               (c) Legal Counsel. Subject to Section 5 hereof, the Required Holders shall have the
right to select one legal counsel to review and oversee any registration pursuant to this Section 2
(“Legal Counsel”), which shall be Schulte Roth & Zabel LLP or such other counsel as thereafter
designated by the Required Holders. The Company and Legal Counsel shall reasonably cooperate with
each other in performing the Company’s obligations under this Agreement.



               (d) Form S-3. The Company shall undertake to register the Registrable Securities on
Form S-3 as soon as such form is available for use by the Company, provided that the Company shall
maintain the effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form S-3 covering the Registrable Securities has been declared effective
by the SEC.



5









 





               (e) Sufficient Number of Shares Registered. In the event the number of shares
available under a Registration Statement filed pursuant to Section 2(a) is insufficient to cover
all of the Registrable Securities required to be covered by such Registration Statement or an
Investor’s allocated portion of the Registrable Securities pursuant to Section 2(b), the Company
shall amend the applicable Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover at least the Required
Registration Amount as of the trading day immediately preceding the date of the filing of such
amendment or new Registration Statement, in each case, as soon as practicable, but in any event not
later than fifteen (15) days after the Company becomes aware of the necessity therefore unless
audited year end financial statements would be required for such amendment or new Registration
Statement, then the time period shall be 5 Business Days after the filing of the audited year end
financial statements with the SEC. The Company shall use its reasonable best efforts to cause such
amendment and/or new Registration Statement to become effective as soon as practicable following
the filing thereof. For purposes of the foregoing provision, the number of shares available under
a Registration Statement shall be deemed “insufficient to cover all of the Registrable Securities”
if at any time the number of shares of Common Stock available for resale under such Registration
Statement is less than the number of Registrable Securities that are required to be sold pursuant
to a registration statement. The calculation set forth in the foregoing sentence shall be made
without regard to any limitations on the exercise of the Warrants and such calculation shall assume
that the Warrants are then exercisable into shares of Common Stock.



               (f) Effect of Failure to File and Obtain and Maintain Effectiveness of Registration
Statement. If (i) a Registration Statement covering all the Registrable Securities required to
be covered thereby and required to be filed by the Company pursuant to this Agreement is (A) not
filed with the SEC on or before the Filing Deadline (a “Filing Failure”) or (B) not declared
effective by the SEC on or before the Effectiveness Deadline (an “Effectiveness Failure”) or (ii)
on any day after the Effective Date sales of all the Registrable Securities required to be included
on such Registration Statement cannot be made (other than during an Allowable Grace Period (as
defined in Section 3(r)) pursuant to such Registration Statement (including, without limitation,
because of a failure to keep such Registration Statement effective, to disclose such information as
is necessary for sales to be made pursuant to such Registration Statement, to register a sufficient
number of shares of Common Stock or to maintain the listing of the Common Stock) (a “Maintenance
Failure”) then, as partial relief for the damages to any holder by reason of any such delay in or
reduction of its ability to sell the underlying shares of Common Stock (which remedy shall not be
exclusive of any other remedies available at law or in equity), (A) the Company shall pay to each
holder of Registrable Securities relating to such Registration Statement an amount in cash equal to
one percent (1.0%) of the aggregate Purchase Price (as such term is defined in the Securities
Purchase Agreement) of such Investor’s Registrable Securities included in such Registration
Statement on each of the following dates: (i) the day of a Filing Failure and the One Month
Anniversary of such Filing Failure (pro rated for periods totaling less than thirty days); (ii) the
day of an Effectiveness Failure and on the One Month Anniversary of such Effectiveness Failure (pro
rated for periods totaling less than thirty days); (iii) the initial day of a Maintenance Failure
and the One Month Anniversary of such Maintenance Failure (pro rated for periods totaling less than
thirty days); and (B) the Company shall pay to each holder of Registrable Securities relating to
such Registration Statement an amount in cash equal to



6









 







two percent (2.0%) of the aggregate Purchase Price of such Investor’s Registrable Securities
included in such Registration Statement on each of the following dates: (i) on the thirtieth day
after the One Month Anniversary of a Filing Failure and on every thirtieth day thereafter (pro
rated for periods totaling less than thirty days) until such Filing Failure is cured; (ii) on every
thirtieth day after the One Month Anniversary of an Effectiveness Failure and on every thirtieth
day thereafter (pro rated for periods totaling less than thirty days) until such Effectiveness
Failure is cured; and (iii) on every thirtieth day after the One Month Anniversary of a Maintenance
Failure and on every thirtieth day thereafter (pro rated for periods totaling less than thirty
days) until such Maintenance Failure is cured. The payments to which a holder shall be entitled
pursuant to this Section 2(g) are referred to herein as “Registration Delay Payments.”
Registration Delay Payments shall be paid on the earlier of (I) the dates set forth above and (II)
the third Business Day after the event or failure giving rise to the Registration Delay Payments is
cured. In the event the Company fails to make Registration Delay Payments in a timely manner, such
Registration Delay Payments shall bear interest at the rate of one and one-half percent (1.5%) per
month (prorated for partial months) until paid in full.



               3. Related Obligations.



          At such time as the Company is obligated to file a Registration Statement with the SEC
pursuant to Section 2(a), 2(d) or 2(e), the Company will use its reasonable best efforts to effect
the registration of the Registrable Securities in accordance with the intended method of
disposition thereof and, pursuant thereto, the Company shall have the following obligations:




               (a) The Company shall submit to the SEC, within five (5) Business Days after the Company
learns that no review of a particular Registration Statement will be made by the staff of the SEC
or that the staff of the SEC has no further comments on a particular Registration Statement, as the
case may be, a request for acceleration of effectiveness of such Registration Statement to a time
and date not later than 48 hours after the submission of such request. The Company shall keep each
Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i) the
date as of which the Investors may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Rule 144(k) (or any successor thereto)
promulgated under the 1933 Act or (ii) the date on which the Investors shall have sold all the
Registrable Securities covered by such Registration Statement (the “Registration Period”). The
Company shall ensure that each Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein, or necessary to make the
statements therein (in the case of prospectuses, in the light of the circumstances in which they
were made) not misleading.



               (b) The Company shall prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the prospectus used in connection with
such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under
the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during
the Registration Period, and, during such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as



7









 







all of such Registrable Securities shall have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement which are
required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason
of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under
the Securities Exchange Act of 1934, as amended (the “1934 Act”), the Company shall have
incorporated such report by reference into such Registration Statement, if applicable, or shall
file such amendments or supplements with the SEC within one Business Day after the 1934 Act report
is filed which created the requirement for the Company to amend or supplement such Registration
Statement.



               (c) The Company shall (A) permit Legal Counsel and each Investor to review and comment upon
(i) a Registration Statement at least five (5) Business Days prior to its initial filing with the
SEC and (ii) all pre and post effective amendments and supplements to all Registration Statements
(except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K and any similar or successor reports) within a reasonable number of days prior to their filing
with the SEC, and (B) not file any Registration Statement or pre or post effective amendment or
supplement thereto in a form to which Legal Counsel or any Investor reasonably objects. The
Company shall not submit a request for acceleration of the effectiveness of a Registration
Statement or any amendment or supplement thereto without the prior approval of Legal Counsel, which
consent shall not be unreasonably withheld. The Company shall furnish to Legal Counsel and each
Investor, without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to
the Company or its representatives relating to any Registration Statement, (ii) promptly after the
same is prepared and filed with the SEC, one copy of any Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all documents incorporated
therein by reference, if requested by an Investor and not otherwise available on the EDGAR system,
and all exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the
prospectus included in such Registration Statement and all amendments and supplements thereto. The
Company shall reasonably cooperate with Legal Counsel and any Investor in performing the Company’s
obligations pursuant to this Section 3.



               (d) The Company shall furnish to each Investor whose Registrable Securities are included in
any Registration Statement, without charge, (i) promptly after the same is prepared and filed with
the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by reference, if requested
by an Investor and not otherwise available on the EDGAR system, all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the
prospectus included in such Registration Statement and all amendments and supplements thereto (or
such other number of copies as such Investor may reasonably request) and (iii) such other
documents, including copies of any preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of the Registrable Securities
owned by such Investor.



               (e) The Company shall use its reasonable best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by Investors of the Registrable
Securities covered by a Registration Statement under such other



8









 







securities or “blue sky” laws of all applicable jurisdictions in the United States, (ii)
prepare and file in those jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify
the Registrable Securities for sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to (x) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify but for this
Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities of the receipt by the Company of
any notification with respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the
United States or its receipt of actual notice of the initiation or threatening of any proceeding
for such purpose.



               (f) The Company shall notify Legal Counsel and each Investor in writing of the happening of
any event, as promptly as practicable after becoming aware of such event, as a result of which the
prospectus included in a Registration Statement, as then in effect, includes an untrue statement of
a material fact or omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material, nonpublic
information), and, subject to Section 3(r), promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of
such supplement or amendment to Legal Counsel and each Investor (or such other number of copies as
Legal Counsel or such Investor may reasonably request). The Company shall also promptly notify
Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or
related prospectus or related information, and (iii) of the Company’s reasonable determination that
a post-effective amendment to a Registration Statement would be appropriate.



               (g) The Company shall use its reasonable best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a Registration Statement, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an
order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify Legal Counsel and each Investor who holds Registrable Securities
being sold of the issuance of such order and the resolution thereof or its receipt of actual notice
of the initiation or threat of any proceeding for such purpose.



               (h) If any Investor is required under applicable securities law to be described in the
Registration Statement as an underwriter, at the reasonable request of such Investor, the Company
shall furnish to such Investor, on the date of the effectiveness of the



9









 







Registration Statement and thereafter from time to time on such dates as an Investor may
reasonably request (i) a letter, dated such date, from the Company’s independent certified public
accountants in form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the Investors, and
(ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in an underwritten
public offering, addressed to the Investors.



               (i) Upon the written request of any Investor in connection with any Investor’s due diligence
requirements, if any, the Company shall make available for inspection by (i) any Investor, (ii)
Legal Counsel and (iii) one firm of accountants or other agents retained by the Investors
(collectively, the “Inspectors”), all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the “Records”), as shall be
reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and
employees to supply all information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree in writing to hold in strict confidence and shall not make any
disclosure (except to an Investor) or use of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a
court or government body of competent jurisdiction, or (c) the information in such Records has been
made generally available to the public other than by disclosure in violation of this or any other
agreement of which the Inspector has knowledge. Each Investor agrees that it shall, upon learning
that disclosure of such Records is required or is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and any Investor) shall be deemed to limit the
Investors’ ability to sell Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.



               (j) The Company shall hold in confidence and not make any disclosure of information concerning
an Investor provided to the Company unless (i) disclosure of such information is necessary to
comply with federal or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final, non-appealable order from a
court or governmental body of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in violation of this Agreement or any
other agreement. The Company agrees that it shall, upon learning that disclosure of such
information concerning an Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt written notice to such Investor and allow such
Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, such information.



               (k) The Company shall use its reasonable best efforts either to (i) cause all the Registrable
Securities covered by a Registration Statement to be listed on each



10









 







securities exchange on which securities of the same class or series issued by the Company are
then listed, if any, if the listing of such Registrable Securities is then permitted under the
rules of such exchange, or (ii) secure designation and quotation of all the Registrable Securities
covered by a Registration Statement on The NASDAQ Global Market, The NASDAQ Capital Market, The
NASDAQ Global Select Market, the New York Stock Exchange, the American Stock Exchange or any
successors thereto and, without limiting the generality of the foregoing, to use its best efforts
to arrange for at least two market makers to register with the National Association of Securities
Dealers, Inc. (“NASD”) as such with respect to such Registrable Securities. The Company shall pay
all fees and expenses in connection with satisfying its obligation under this Section 3(k).



               (l) The Company shall cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable and pursuant to the terms set forth in the Securities
Purchase Agreement, at the Investor’s option either (i) facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the Registrable
Securities or (ii) promptly issue to such holder by electronic delivery at the applicable balance
account at The Depository Trust Company the Registrable Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such denominations or amounts, as the
case may be, as the Investors may reasonably request and registered in such names as the Investors
may request.



               (m) If requested by an Investor, the Company shall (i) as soon as practicable incorporate in a
prospectus supplement or post-effective amendment such information as an Investor reasonably
requests to be included therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other terms of the offering
of the Registrable Securities to be sold in such offering; (ii) as soon as practicable make all
required filings of such prospectus supplement or post-effective amendment after being notified of
the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii)
as soon as practicable, supplement or make amendments to any Registration Statement if reasonably
requested by an Investor holding any Registrable Securities.



               (n) The Company shall use its best efforts to cause the Registrable Securities covered by a
Registration Statement to be registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of such Registrable Securities.



               (o) The Company shall make generally available to its security holders as soon as practical,
but not later than ninety (90) days after the close of the period covered thereby, an earnings
statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under
the 1933 Act) covering a twelve-month period beginning not later than the first day of the
Company’s fiscal quarter next following the effective date of a Registration Statement.



11









 





               (p) The Company shall otherwise use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC in connection with any registration hereunder.



               (q) Within two (2) Business Days after a Registration Statement which covers Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal
counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Investors whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the SEC in the form
attached hereto as Exhibit A.



               (r) Notwithstanding anything to the contrary herein, at any time after the Effective Date, the
Company may delay the disclosure of material, non-public information concerning the Company the
disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the
Company and its counsel, in the best interest of the Company and, in the opinion of counsel to the
Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly (i)
notify the Investors in writing of the existence of a Grace Period in conformity with the
provisions of this Section 3(r) (provided that in each notice the Company will not disclose the
content of such material, non-public information to the Investors) and the date on which the Grace
Period will begin, and (ii) notify the Investors in writing of the date on which the Grace Period
ends; and, provided further, that no Grace Period shall exceed thirty (30) consecutive days and
during any three hundred sixty five (365) day period such Grace Periods shall not exceed an
aggregate of sixty (60) days and the first day of any Grace Period must be at least five (5)
trading days after the last day of any prior Grace Period (each, an “Allowable Grace Period”). For
purposes of determining the length of a Grace Period above, the Grace Period shall begin on and
include the date the Investors receive the notice referred to in clause (i) and shall end on and
include the later of the date the Investors receive the notice referred to in clause (ii) and the
date referred to in such notice. The provisions of Section 3(g) hereof shall not be applicable
during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company
shall again be bound by the first sentence of Section 3(f) with respect to the information giving
rise thereto unless such material, non-public information is no longer applicable. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares
of Common Stock to a transferee of an Investor in accordance with the terms of the Securities
Purchase Agreement in connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale, and delivered a copy of the prospectus included as
part of the applicable Registration Statement, prior to the Investor’s receipt of the notice of a
Grace Period and for which the Investor has not yet settled.



          4. Obligations of the Investors.




               (a) At least five (5) Business Days prior to the first anticipated filing date of a
Registration Statement, the Company shall notify each Investor in writing of the information the
Company requires from each such Investor if such Investor elects to have any of such Investor’s
Registrable Securities included in such Registration Statement. It shall be a condition precedent
to the obligations of the Company to complete the registration pursuant to this Agreement with
respect to the Registrable Securities of a particular Investor that such Investor shall furnish to
the Company such information regarding itself, the Registrable



12









 







Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall be reasonably
required to effect the effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may reasonably request.



               (b) Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection with the
preparation and filing of any Registration Statement hereunder, unless such Investor has notified
the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable
Securities from such Registration Statement.



               (c) Each Investor agrees that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 3(g) or the first sentence of 3(f), such Investor will
immediately discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of
the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of 3(f)
or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the
contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock
to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an Investor has entered
into a contract for sale prior to the Investor’s receipt of a notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first sentence of 3(f) and for
which the Investor has not yet settled.



               (d) Each Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales
of Registrable Securities pursuant to the Registration Statement.



          5. Expenses of Registration.




          All reasonable expenses, other than underwriting discounts and commissions, incurred in
connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including,
without limitation, all registration, listing and qualifications fees, printers and accounting
fees, and fees and disbursements of counsel for the Company shall be paid by the Company. The
Company shall also reimburse the Investors for the fees and disbursements of Legal Counsel in
connection with registration, filing or qualification pursuant to Sections 2 and 3 of this
Agreement which amount shall be limited to $20,000.




          6. Indemnification.




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




               (a) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold
harmless and defend each Investor, the directors, officers, partners, members, employees, agents,
representatives of, and each Person, if any, who controls any Investor within the meaning of the
1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs,



13









 







reasonable attorneys’ fees, amounts paid
in settlement or expenses, joint or several , but excluding incidental and consequential damages,
losses, liabilities and expenses) (collectively, “Claims”), incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other regulatory agency, body
or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement
or any post-effective amendment thereto or in any filing made in connection with the qualification
of the offering under the securities or other “blue sky” laws of any jurisdiction in which
Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the statements therein not
misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such Registration Statement, or
contained in the final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein
any material fact necessary to make the statements made therein, in the light of the circumstances
under which the statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder relating to the offer or
sale of the Registrable Securities pursuant to a Registration Statement or (iv) any material
violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified
Persons, promptly as such expenses are incurred and are due and payable, for any reasonable legal
fees or other reasonable expenses incurred by them in connection with investigating or defending
any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person
arising out of or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person for such Indemnified
Person expressly for use in connection with the preparation of the Registration Statement or any
such amendment thereof or supplement thereto, if such prospectus was timely made available by the
Company pursuant to Section 3(d); (ii) shall not be available to the extent such Claim is based on
a failure of the Investor to deliver or to cause to be delivered the prospectus made available by
the Company, including a corrected prospectus, if such prospectus or corrected prospectus was
timely made available by the Company pursuant to Section 3(d); and (iii) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 10.



               (b) In connection with any Registration Statement in which an Investor is participating, each
such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934



14









 







Act (each, an “Indemnified Party”), against
any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the
1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon
any Violation, in each case to the extent, and only to the extent, that such Violation occurs in
reliance upon and in conformity with written information furnished to the Company by such Investor
expressly for use in connection with
such Registration Statement; and, subject to Section 6(c), such Investor will reimburse any
legal or other expenses reasonably incurred by an Indemnified Party in connection with
investigating or defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution contained in Section
7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Investor, which consent shall not be unreasonably withheld or
delayed; provided, further, however, that an Investor shall be liable under this Section 6(b) for
only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement.
Such indemnity shall remain in full force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by
the Investors pursuant to Section 10. Notwithstanding anything to the contrary contained herein,
the indemnification agreement contained in this Section 6(b) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected on a timely basis
in the prospectus, as then amended or supplemented.



               (c) Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6
of notice of the commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the defense thereof with
counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the
Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel with the reasonable fees and expenses of not
more than one counsel for such Indemnified Person or Indemnified Party to be paid by the
indemnifying party, if, in the reasonable opinion of the Indemnified Person or the Indemnified
Party, as the case may be, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any other party
represented by such counsel in such proceeding. In the case of an Indemnified Person, legal
counsel referred to in the immediately preceding sentence shall be selected by the Investors
holding at least a majority in interest of the Registrable Securities included in the Registration
Statement to which the Claim relates. The Indemnified Party or Indemnified Person shall cooperate
fully with the indemnifying party in connection with any negotiation or defense of any such action
or Claim by the indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which relates to such action or
Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully
apprized at all times as to the status of the defense or any settlement negotiations with respect
thereto. No



15









 







indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to
entry of any judgment or enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party
or Indemnified Person of a release from all liability in respect to such Claim or litigation.
Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to
all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party
is prejudiced in its ability to defend such action.



               (d) The indemnification required by this Section 6 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and when bills are received or
Indemnified Damages are incurred.



               (e) The indemnity agreements contained herein shall be in addition to (i) any cause of action
or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or
others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.



          7. Contribution.




          To the extent any indemnification by an indemnifying party is prohibited or limited by law,
the indemnifying party agrees to make the maximum contribution with respect to any amounts for
which it would otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person
is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in
connection with such sale shall be entitled to contribution from any Person involved in such sale
of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution
by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to such Registration
Statement.




          8. Piggy-Back Registrations. If at any time during the Registration Period there is
not an effective Registration Statement covering all of the Registrable Securities and the Company
shall determine to prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or
their then equivalents relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in connection with the stock
option or other employee benefit plans, then the Company shall send to each Investor a written
notice of such determination and, if within fifteen days after the date of such notice, any such
Investor shall so request in writing, the Company shall include in such




16









 







registration statement all
or any part of such Registrable Securities such Investor requests to be registered.




          9. Reports Under the 1934 Act.




          With a view to making available to the Investors the benefits of Rule 144 promulgated under
the 1933 Act or any other similar rule or regulation of the SEC that may at
any time permit the Investors to sell securities of the Company to the public without
registration (“Rule 144”), 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 SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such
requirements and the filing of such reports and other documents is required for the applicable
provisions of Rule 144; and



               (c) furnish to each Investor so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the 1933 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 to permit the Investors to
sell such securities pursuant to Rule 144 without registration.



          10. Assignment of Registration Rights.




          The rights under this Agreement shall be automatically assignable by the Investors to any
transferee of all or any portion of such Investor’s Registrable Securities if: (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such assignment; (ii) the
Company is, within a reasonable time after such transfer or assignment, furnished with written
notice of (a) the name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned; (iii) immediately
following such transfer or assignment the further disposition of such securities by the transferee
or assignee is restricted under the 1933 Act and applicable state securities laws; (iv) at or
before the time the Company receives the written notice contemplated by clause (ii) of this
sentence the transferee or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein; and (v) such transfer shall have been made in accordance with the
applicable requirements of the Securities Purchase Agreement.




          11. Amendment of Registration Rights.




          Provisions of this Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Required Holders. Any amendment or waiver effected in
accordance with this Section 11 shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of




17









 







the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.




          12. Miscellaneous.




               (a) A Person is deemed to be a holder of Registrable Securities whenever such Person owns or
is deemed to own of record such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or election received from
the such record owner of such Registrable Securities.



               (b) Any notices, consents, waivers or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to have been delivered:
(i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:



               If to the Company:


Toreador Resources Corporation

4809 Cole Avenue, Suite 108

Dallas, Texas 75205



Telephone: (214) 559-3933



Facsimile: (214) 559-3945

Attention: Doug Weir




          With a copy (which shall not constitute notice), to



Haynes and Boone, LLP

901 Main St., Suite 3100

Dallas, TX 75202

Telephone: (214) 651-5562

Facsimile: (214) 200-0676

Attention: Janice V. Sharry, Esq.




               If to Legal Counsel:


Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022




18









 







Telephone: (212) 756-2000

Facsimile: (212) 593-5955

Attention: Eleazer Klein, Esq.



If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers attached
hereto, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to
such other address and/or facsimile number and/or to the attention of such other Person as the
recipient party has specified by written notice given to each other party five (5) days prior to
the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or electronically generated
by the sender’s facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii)
above, respectively.




               (c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or
delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.



               (d) All questions concerning the construction, validity, enforcement and interpretation of
this Agreement shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of New York
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other
than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in The City of New York, Borough of Manhattan, 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. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity
or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.



               (e) This Agreement, the other Transaction Documents (as defined in the Securities Purchase
Agreement) and the instruments referenced herein and therein constitute



19









 




the entire agreement among the parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement, the other Transaction Documents and the
instruments referenced herein and therein supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof.




               (f) Subject to the requirements of Section 10, this Agreement shall inure to the benefit of
and be binding upon the permitted successors and assigns of each of the parties hereto.



               (g) The headings in this Agreement are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof.



               (h) This Agreement may be executed in identical counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this Agreement.



               (i) Each party shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements, certificates, instruments and
documents, as any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.



               (j) All consents and other determinations required to be made by the Investors pursuant to
this Agreement shall be made, unless otherwise specified in this Agreement, by the Required
Holders, determined as if all of the Warrants held by Investors then outstanding have been
exercised for Registrable Securities without regard to any limitations on exercise of the Warrants.



               (k) The language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent and no rules of strict construction will be applied against
any party.



               (l) This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.



               (m) The obligations of each Buyer hereunder are several and not joint with the obligations of
any other Buyer, and no provision of this Agreement is intended to confer any obligations on any
Buyer vis-à-vis any other Buyer. Nothing contained herein, and no action taken by any Buyer
pursuant hereto, shall be deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are in any way acting
in concert or as a group with respect to such obligations or the transactions contemplated herein.



* * * * * *




20









 








     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	COMPANY:



Toreador Resources Corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 




     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



CAPITAL VENTURES INTERNATIONAL

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Signature Page to Registration Rights Agreement]





 









 









     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



GOLDMAN SACHS & CO.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Signature Page to Registration Rights Agreement]




 









 









     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



SF CAPITAL PARTNERS LTD.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



[Signature Page to Registration Rights Agreement]



 









 






	 	 	 	 	 




     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



OLD LANE CAYMAN MASTER FUND, LP

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Signature Page to Registration Rights Agreement]




 









 









     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



OLD LANE HMA MASTER FUND, LP

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Signature Page to Registration Rights Agreement]





 









 









     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	BUYERS:



OLD LANE US MASTER FUND, LP

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Signature Page to Registration Rights Agreement]





 









 








SCHEDULE OF BUYERS




	 	 	 	 	 
	 	 	Buyer Address	 	Buyer’s Representative’s Address
	Buyer	 	and Facsimile Number	 	and Facsimile Number
		 		 	
	Capital Ventures International

	 	c/o Heights Capital Management, Inc.
	 	Schulte Roth & Zabel LLP
	 

	 	101 California Street, Suite 3250
	 	919 Third Avenue
	 

	 	San Francisco, CA 94111
	 	New York, New York 10022
	 

	 	Attention: Martin Kobinger
	 	Attention: Eleazer Klein, Esq.
	 

	 	Facsimile: (415) 403-6525
	 	Facsimile: (212) 593-5955
	 

	 	Telephone: (415) 403-6500
	 	Telephone: (212) 756-2376
	 

	 	Residence: Cayman Islands	 	 
	 
	 	 	 	 
	Goldman Sachs & Co.

	 	85 Broad Street
	 	Cravath, Swaine & Moore LLP
	 

	 	New York, NY 10004-2456
	 	825 Eighth Avenue
	 

	 	Attention: Daniel Oneglia
	 	New York, New York 10019
	 

	 	Tel: 212-902-8212
	 	Attention: Erik Tavzel
	 

	 	daniel.oneglia@gs.com
	 	Facsimile: (212) 474-3700
	 

	 	 	 	Telephone: (212) 474-1796
	 
	 	 	 	 
	SF Capital Partners Ltd.

	 	c/o Stark Offshore Management LLC	 	 
	 

	 	3600 South Lake Drive	 	 
	 

	 	St. Francis, WI 53235	 	 
	 

	 	Attention: Brian Davidson	 	 
	 

	 	Tel: 414-294-7016	 	 
	 

	 	Fax: 414-294-7700	 	 
	 

	 	bdavidson@starkinvestments.com	 	 
	Old Lane Cayman Master Fund, LP

	 	Old Lane, LP	 	 
	 

	 	500 Park Avenue, 2nd Floor	 	 
	 

	 	New York, NY 10022	 	 
	 

	 	Attention: Jonathan Barton	 	 
	 

	 	Chief Financial Officer	 	 
	 

	 	Tel: 212-572-3260	 	 
	 

	 	jonathan.barton@oldlane.com	 	 
	 
	 	 	 	 
	Old Lane HMA Master Fund, LP

	 	Old Lane, LP	 	 
	 

	 	500 Park Avenue, 2nd Floor	 	 
	 

	 	New York, NY 10022	 	 
	 

	 	Attention: Jonathan Barton	 	 
	 

	 	Chief Financial Officer	 	 
	 

	 	Tel: 212-572-3260	 	 
	 

	 	jonathan.barton@oldlane.com	 	 
	 
	 	 	 	 
	Old Lane US Master Fund, LP

	 	Old Lane, LP	 	 
	 

	 	500 Park Avenue, 2nd Floor	 	 
	 

	 	New York, NY 10022	 	 
	 

	 	Attention: Jonathan Barton	 	 
	 

	 	Chief Financial Officer	 	 
	 

	 	Tel: 212-572-3260	 	 
	 

	 	jonathan.barton@oldlane.com	 	 







 









 






EXHIBIT A




FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT




American Stock Transfer & Trust Company

59 Maiden Lane – Plaza Level

New York, NY 10038




	 	 	 	 	 
	Attention:	 	Issac Kagan
	 
	 	 	 	 
	 

	 	Re:
	 	Toreador Resources Corporation





Ladies and Gentlemen:




          [We
are][I am] counsel to Toreador Resources Corporation, a Delaware corporation
(the “Company”), and have represented the Company in connection with that certain Securities
Purchase Agreement, dated as of March 21, 2007 (the “Securities Purchase Agreement”), entered into
by and among the Company and the buyers named therein (collectively, the “Holders”) pursuant to
which the Company issued to the Holders its shares of the Company’s Common Stock, par value
$$0.15625 per share (the “Common Stock”) and warrants exercisable for shares of Common
Stock (the “Warrants”). Pursuant to the Securities Purchase Agreement, the Company also has
entered into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”)
pursuant to which the Company agreed, among other things, to register the resale of the Registrable
Securities (as defined in the Registration Rights Agreement), including the shares of Common Stock
issuable upon exercise of the Warrants under the Securities Act of 1933, as amended under the
Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations
under the Registration Rights Agreement, on                                          , 2007, the Company filed a
Registration Statement on Form S-1 (File No. 333-                    ) (the “Registration Statement”) with
the Securities and Exchange Commission (the “SEC”) relating to the Registrable Securities which
names each of the Holders as a selling stockholder thereunder.




          In connection with the foregoing, [we][I] advise you that a member of the SEC’s staff has
advised [us][me] by telephone that the SEC has entered an order declaring the Registration
Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF
EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of the SEC’s staff,
that any stop order suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable Securities are available
for resale under the 1933 Act pursuant to the Registration Statement.




          Subject to the specific prohibitions contained in the Registration Rights Agreement
regarding the inability to use the Registration Statement under specific circumstances (the
“Registration Statement Limitations”) and in reliance upon the Holders’ representations and
covenants in Section 2(g) of the Securities Purchase Agreement, this letter shall serve as our
standing instruction to you that the shares of Common Stock are freely transferable by the Holders
pursuant to the Registration Statement provided that the prospectus delivery requirements, if any,
are complied with. Subject to the Registration Statement Limitations, you need not require further
letters from us to effect any future legend-free issuance or reissuance of shares of Common Stock
to the Holders as contemplated by the Company’s Transfer Agent


 









 







           Instructions dated March                    , 2007. This letter shall serve as our standing instruction
with regard to this matter.




	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	[ISSUER’S COUNSEL]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	CC: [LIST NAMES OF HOLDERS]
	 	 	 	 






 









 





ANNEX I




SELLING STOCKHOLDERS




     The shares of common stock being offered by the selling stockholders are those previously
issued to the Selling Stockholders and those issuable to the Selling Stockholders upon exercise of
the warrants. For additional information regarding the issuances of common stock and the warrants,
see “Private Placement of Common Shares and Warrants” above. We are registering the shares of
common stock in order to permit the selling stockholders to offer the shares for resale from time
to time. Except for the ownership of the shares of common stock and the warrants, the selling
stockholders have not had any material relationship with us within the past three years.



     The table below lists the selling stockholders and other information regarding the beneficial
ownership of the shares of common stock by each of the selling stockholders. The second column
lists the number of shares of common stock beneficially owned by each selling shareholder, based on
its ownership of the shares of common stock and the warrants, as of                     , 2007, assuming
exercise of the warrants held by the selling stockholders on that date, without regard to any
limitations on exercise.



     The third column lists the shares of common stock being offered by this prospectus by the
selling stockholders.



     In accordance with the terms of registration rights agreements with the holders of the shares
of common stock and the warrants, this prospectus generally covers the resale of at least the sum
of (i) the number of shares of common stock issued and (ii) the shares of common stock issued and
issuable upon exercise of the related warrants, determined as if the outstanding warrants were
exercised, as applicable, in full, as of the trading day immediately preceding the date this
registration statement was initially filed with the SEC. The fourth column assumes the sale of all
of the shares offered by the selling stockholders pursuant to this prospectus.



 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Maximum Number of	 	 	 	 
	 	 	 	 	 	 	Shares of Common	 	 	 	 
	 	 	Number of Shares of	 	 	Stock to be Sold	 	 	Number of Shares of	 
	 	 	Common Stock Owned	 	 	Pursuant to this	 	 	Common Stock Owned	 
	Name of Selling Stockholder	 	Prior to Offering	 	 	Prospectus	 	 	After Offering	 
	Capital Ventures International (1)
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Goldman Sachs & Co.
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SF Capital Partners Ltd.
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Old Lane Cayman Master Fund, LP
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Old Lane HMA Master Fund, LP
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Old Lane US Master Fund, LP
	 	 	 	 	 	 	 	 	 	 	 	 








 




			
	(1)	 	Heights Capital Management, Inc., the authorized agent of Capital Ventures
International (“CVI”), has discretionary authority to vote and dispose of the shares held by CVI
and may be deemed to be the beneficial owner of these shares. Martin Kobinger, in his capacity as
Investment Manager of Heights Capital Management, Inc., may also be deemed to have investment
discretion and voting power over the shares held by CVI. Mr. Kobinger disclaims any such
beneficial ownership of the shares. CVI is affiliated with one or more registered broker-dealers.
CVI purchased the shares being registered hereunder in the ordinary course of business and at the
time of purchase, had no agreements or understandings, directly or indirectly, with any other
person to distribute such shares.




 









 










PLAN OF DISTRIBUTION




     We are registering the shares of common stock previously issued and the shares of common stock
issuable upon exercise of the warrants to permit the resale of these shares of common stock by the
holders of the common stock and warrants from time to time after the date of this prospectus. We
will not receive any of the proceeds from the sale by the selling stockholders of the shares of
common stock. We will bear all fees and expenses incident to our obligation to register the shares
of common stock.



     The selling stockholders may sell all or a portion of the shares of common stock beneficially
owned by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of common stock are sold through underwriters or
broker-dealers, the selling stockholders will be responsible for underwriting discounts or
commissions or agent’s commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the sale, at varying
prices determined at the time of sale, or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions,




	 	•	 	on any national securities exchange or quotation service on which the securities may
be listed or quoted at the time of sale;
	 
	 	•	 	in the over-the-counter market;
	 
	 	•	 	in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
	 
	 	•	 	through the writing of options, whether such options are listed on an options
exchange or otherwise;
	 
	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers;
	 
	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;
	 
	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for its
account;
	 
	 	•	 	an exchange distribution in accordance with the rules of the applicable exchange;
	 
	 	•	 	privately negotiated transactions;
	 
	 	•	 	short sales;
	 
	 	•	 	sales pursuant to Rule 144;
	 
	 	•	 	broker-dealers may agree with the selling securityholders to sell a specified number
of such shares at a stipulated price per share;




 









 






	 	•	 	a combination of any such methods of sale; and
	 
	 	•	 	any other method permitted pursuant to applicable law.





     If the selling stockholders effect such transactions by selling shares of common stock to or
through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from the selling
stockholders or commissions from purchasers of the shares of common stock for whom they may act as
agent or to whom they may sell as principal (which discounts, concessions or commissions as to
particular underwriters, broker-dealers or agents may be in excess of those customary in the types
of transactions involved). In connection with sales of the shares of common stock or otherwise,
the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of common stock in the course of hedging in positions they
assume. The selling stockholders may also sell shares of common stock short and deliver shares of
common stock covered by this prospectus to close out short positions and to return borrowed shares
in connection with such short sales. The selling stockholders may also loan or pledge shares of
common stock to broker-dealers that in turn may sell such shares.



     The selling stockholders may pledge or grant a security interest in some or all of the
warrants or shares of common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares of common stock
from time to time pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if
necessary, the list of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus. The selling stockholders also may
transfer and donate the shares of common stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.



     The selling stockholders and any broker-dealer participating in the distribution of the shares
of common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and
any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be
deemed to be underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of common stock is made, a prospectus supplement, if required,
will be distributed which will set forth the aggregate amount of shares of common stock being
offered and the terms of the offering, including the name or names of any broker-dealers or agents,
any discounts, commissions and other terms constituting compensation from the selling stockholders
and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.



     Under the securities laws of some states, the shares of common stock may be sold in such
states only through registered or licensed brokers or dealers. In addition, in some states the
shares of common stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied
with.



 









 





     There can be no assurance that any selling stockholder will sell any or all of the shares of
common stock registered pursuant to the shelf registration statement, of which this prospectus
forms a part.



     The selling stockholders and any other person participating in such distribution will be
subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. Regulation M may also restrict the ability of any
person engaged in the distribution of the shares of common stock to engage in market-making
activities with respect to the shares of common stock. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any person or entity to engage in
market-making activities with respect to the shares of common stock.



     We will pay all expenses of the registration of the shares of common stock pursuant to the
registration rights agreement, estimated to be $[ ] in total, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with state securities or
“blue sky” laws; provided, however, that a selling stockholder will pay all underwriting discounts
and selling commissions, if any. We will indemnify the selling stockholders against liabilities,
including some liabilities under the Securities Act, in accordance with the registration rights
agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under the Securities Act,
that may arise from any written information furnished to us by the selling stockholder specifically
for use in this prospectus, in accordance with the related registration rights agreements, or we
may be entitled to contribution.



          Once sold under the shelf registration statement, of which this prospectus forms a part, the
shares of common stock will be freely tradable in the hands of persons other than our affiliates.




 









 










EXHIBIT C




TRANSFER AGENT INSTRUCTIONS




TOREADOR RESOURCES CORPORATION




March                     , 2007




American Stock Transfer & Trust Company

59 Maiden Lane – Plaza Level

New York, NY 10038




Attention: Issac Kagan



Ladies and Gentlemen:




          Reference is made to that certain Securities Purchase Agreement, dated as of March 21, 2007
(the “Agreement”), by and among Toreador Resources Corporation, a Delaware corporation (the
“Company”), and the investors named on the Schedule of Buyers attached thereto (collectively, the “Holders”), pursuant to which the Company is issuing to the Holders shares (the “Common Shares”) of
Common Stock of the Company, par value $0.15625 per share (the “Common Stock”) and (ii) warrants
(the “Warrants”), which are exercisable to purchase shares of Common Stock.




          As required by the Agreement and pursuant to the Holders’ representations and covenants
contained inn Section 2(g) of the Agreement, this letter shall serve as our irrevocable
authorization and direction to you (provided that you are the transfer agent of the Company at such
time), subject to any stop transfer instructions that we may issue to you from time to time, if at
all:




          (I) To
issue shares of common stock upon transfer or resale of the common
shares; and




          (II) To issue shares of common stock upon the exercise of the warrants (the “warrant
shares”) to or upon the order of a holder from time to time upon delivery to you of a properly
completed and duly executed exercise notice, in the form attached
hereto as Exhibit I,
which has been acknowledged by the company as indicated by the signature of a duly authorized
officer of the company thereon.




          You acknowledge and agree that so long as you have previously received (a) written
confirmation from the Company’s legal counsel that either (i) a registration statement covering
resales of the Common Shares and the Warrant Shares has been declared effective by the Securities
and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”)
and you have not received a notice from the Company that resale of the Common Shares and Warrant
Shares under a registration statement are not permitted at that time (a “No Registered Resale
Notice”) pursuant to the terms of the Registration Rights


 









 







           Agreement dated as of March 21, 2007 by and among the Company and the Holders, or (ii) sales
of the Common Shares and/or Warrant Shares may be made in conformity with Rule 144 under the 1933
Act (“Rule 144”) and (b) if applicable, a copy of such registration statement and you have not
received a No Registered Resale Notice, then within three (3) business days after your receipt of a
notice of transfer, you shall issue the certificates representing the Common Shares and the Warrant
Shares registered in the names of such transferees, and such certificates shall not bear
any legend restricting transfer of the Common Shares thereby and should not be subject to any
stop-transfer restriction; provided, however, that if such Common Shares and
Warrant Shares are not registered for resale under the 1933 Act or not able to be sold under Rule
144, then the certificates for such Common Shares and/or Warrant Shares shall bear the following
legend:





THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.



          A form of written confirmation from the Company’s outside legal counsel that a registration
statement covering resales of the Common Shares and the Warrant Shares has been declared effective
by the SEC under the 1933 Act is attached hereto as Exhibit II.




 









 









          Please execute this letter in the space indicated to acknowledge your agreement to act in
accordance with these instructions. Should you have any questions concerning this matter, please
contact me at                     .




	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	TOREADOR RESOURCES CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 
	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	THE FOREGOING INSTRUCTIONS ARE
	 	 	 	 	 	 
	ACKNOWLEDGED AND AGREED TO
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	this                      day of March 2007
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	AMERICAN STOCK TRANSFER & TRUST COMPANY
	 	 	 	 	 	 






	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





	 	 	 
	Enclosures
	 
	 	 
	cc:

	 	Capital Ventures International LP
	 

	 	[Other Buyers]
	 

	 	Eleazer Klein, Esq.







 










 





EXHIBIT I




EXERCISE NOTICE




TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK




TOREADOR RESOURCES CORPORATION




     The undersigned holder hereby exercises the right to purchase                                          of the shares
of Common Stock (“Warrant Shares”) of Toreador Resources Corporation, a Delaware corporation (the
“Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.



     1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be
made as a “Cash Exercise” with respect to                                          Warrant Shares.



     2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with
respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the
Aggregate Exercise Price in the sum of $                                         to the Company in accordance with the
terms of the Warrant.



     3. Delivery of Warrant Shares. The Company shall deliver to the holder                      Warrant
Shares in accordance with the terms of the Warrant.



	 	 	 	 	 
	Date:                                          __, ______	 	 
	 
	 	 	 	 
	 	 	 
	Name of Registered Holder	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 






 









 






ACKNOWLEDGMENT




     The Company hereby acknowledges this Exercise Notice and hereby directs American Stock
Transfer & Trust Company to issue the above indicated number of shares of Common Stock in
accordance with the Transfer Agent Instructions dated March ___, 2007 from the Company and
acknowledged and agreed to by American Stock Transfer & Trust Company.



	 	 	 	 	 
	 	TOREADOR RESOURCES CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



EXHIBIT II




FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT




American Stock Transfer & Trust Company

59 Maiden Lane – Plaza Level

New York, NY 10038




Attn: Issac Kagan





     Re:     Toreador
Resources Corporation



Ladies and Gentlemen:




          We are counsel to Toreador Resources Corporation, a Delaware corporation (the “Company”), and
have represented the Company in connection with that certain Securities Purchase Agreement, dated
as of March 21, 2007 (the “Securities Purchase Agreement”), entered into by and among the Company
and the buyers named therein (collectively, the “Holders”) pursuant to which the Company issued to
the Holders its shares of the Company’s Common Stock, par value $0.15625 per share (the “Common
Stock”) and warrants exerciable for shares of Common Stock (the “Warrants”). Pursuant to the
Securities Purchase Agreement, the Company also has entered into a Registration Rights Agreement
with the Holders (the “Registration Rights Agreement”) pursuant to which the Company agreed, among
other things, to register the resale of the Registrable Securities (as defined in the Registration
Rights Agreement) under the Securities Act of 1933, as amended (the “1933 Act”). In connection
with the Company’s obligations under the Registration Rights Agreement, on                      ___, 2007,
the Company filed a Registration Statement on Form S-1 (File No. 333-                    ) (the
“Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating to the
Registrable Securities which names each of the Holders as a selling stockholder thereunder.




          In connection with the foregoing, we advise you that a member of the SEC’s staff has advised
us by telephone that the SEC has entered an order declaring the Registration Statement effective
under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no
knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending
its effectiveness has been issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act
pursuant to the Registration Statement.




A-1









 








          Subject to the specific prohibitions contained in the Registration Rights Agreement regarding
the inability to use the Registration Statement under specific circumstances (the “Registration
Statement Limitations”) and in reliance upon the Holders’ representations and covenants in Section
2(g) of the Securities Purchase Agreement, this letter shall serve as our standing instruction to
you that the shares of Common Stock are freely transferable by the Holders pursuant to the
Registration Statement provided that the prospectus delivery requirements, if any, are complied
with. Subject to the Registration Statement Limitations, you need not require further letters from
us to effect any future legend-free issuance or reissuance of shares of Common Stock to the Holders
as contemplated by the Company’s Transfer Agent Instructions dated March ___, 2007.




	 	 	 	 	 
	 	Very truly yours,
 

HAYNES AND BOONE, LLP

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 



CC:     [LIST NAMES OF HOLDERS]




 









 





EXHIBIT D




March ___, 2007




Each of the Investors set forth on the Schedule of Buyers

to the Purchase Agreement (defined below)

at the respective addresses set forth in the Schedule of Buyers




Ladies and Gentlemen:





     We have acted as special counsel to Toreador Resources Corporation, a Delaware corporation
(the “Company”) in connection with the transactions contemplated by the Securities Purchase
Agreement (the “Purchase Agreement”), dated as of March ___, 2007, by and among the Company and
each person set forth under the column “Buyer” on the Schedule of Buyers thereto (each a “Buyer”
and, collectively, the “Buyers”). Pursuant to the Purchase Agreement, the Company is to issue and
the Buyers are to purchase an aggregate
of                   shares of the Company’s common stock, par
value $0.15625 per share (the “Common Stock”) and the warrants (the “Warrants”) exercisable into an
aggregate maximum number of ___ shares of Common Stock (the “Warrant Shares”) . The opinions
expressed below are being delivered to the Buyers in accordance with Section 7(ii) of the Purchase
Agreement. Capitalized terms used herein, unless otherwise defined herein, have the respective
meanings set forth in the Purchase Agreement.



Scope of Examination and

Certain Assumptions, Qualifications, Limitations, and Exceptions




     In rendering the opinions expressed below, we have reviewed copies of the following documents
(collectively, the “Transaction Documents”):




     (a) the Purchase Agreement;




     (b) the Registration Rights Agreement, dated as of March ___, 2007, by and among
the Company and the Buyers; and




     (c) the Warrant Agreements dated as of the date hereof, by and among the Company
and the Buyers (the “Warrant Agreements”) setting forth the terms of the Warrants (as
defined in the Warrant Agreements).



     In addition to the Transaction Documents, we have reviewed and relied upon the following
documents in rendering our opinions:



 









 






     (a) the Certificate of Incorporation of the Company, as certified by the
Secretary of State of the State of Delaware on March 19, 2007 (the “Certificate of
Incorporation”);




     (b) the Bylaws of the Company, as certified to us by the Secretary of the Company
on March ___, 2007 (the “Bylaws”);




     (c) Resolutions of the Board of Directors of the Company, certified to us by the
Secretary of the Company;




     (d) a Certificate of Existence and Good Standing, dated March 19, 2007 for the
Company issued by the Secretary of State of the State of Delaware;




     (e) the certificates of formation, certificates of existence and good standing of
the subsidiaries (the “Subsidiaries”) described on Schedule A attached hereto
(collectively, the “Subsidiary Certificates”);




     (f) an Officer’s Certificate of the Company, dated March ___, 2007 (the
“Officer’s Certificate”); and




     (g) such other instruments and documents as we have deemed necessary as a basis
for expressing our opinions hereinafter set forth.



     The documents described in clauses (a) through (e) immediately above are collectively
referred to herein as the “Organizational Documents.”



     As to various questions of fact material to the opinions expressed below, we have relied in
part, and to the extent we deem reasonably necessary, on the correctness and accuracy of the
representations and warranties and other information contained in the Transaction Documents, the
Organizational Documents and the Officer’s Certificate, without independent check or verification
of the accuracy thereof.



     In rendering the opinions expressed below, we have assumed, with your consent and without
independent verification, (a) the authenticity and genuineness of all signatures on all documents
that we have reviewed, (b) the authenticity of all documents submitted to us as originals, (c) the
conformity to original documents of all documents submitted to us as certified, photostatic, or
facsimile copies, (d) the authenticity of the originals of the documents referred to in the
immediately preceding clause (c), (e) that all persons (other than the Company) executing the
Transaction Documents have full power (corporate or otherwise), authority, capacity, and legal
right to execute, enter into, deliver, and perform the obligations of such person(s) under the
Transaction Documents to which they are a party and that the Transaction Documents have been duly
authorized, executed, and delivered by all persons (other than the Company), (f) that the
Transaction Documents constitute the legal, valid, binding, and enforceable agreements of all the
parties thereto (other than the Company),



 









 







and (g) the correctness and accuracy of all the facts set forth in all documents, minutes,
certificates, and reports identified in this letter or reviewed by us.



     Our opinions expressed herein are limited to the laws of the State of New York (with respect
to our opinion paragraphs 2(b), 3 and 7 below), the law of the State of Texas (with respect to
opinion paragraph 1 below relating to Toreador Exploration & Production, Inc.), the General
Corporation Law of the State of Delaware (the “DGCL”) (with respect to our opinion paragraphs 1,
2(a), 3, 4 and 5), and the federal laws of the United States (with respect to our opinion
paragraphs 6 and 8, below), and we express no opinion herein with respect to the laws of any other
jurisdiction. For the purposes of those opinions expressed below which address matters
prospectively, we have assumed, with your consent, that the facts and law governing the performance
by the parties of their prospective obligations under the Transaction Documents will be identical
to the facts and latest compilations of law governing such performance as of the date of this
letter.



     We have assumed, with your consent and without independent check or verification, for purposes
of the opinions expressed below, that no mutual mistake, misunderstanding, or fraud exists with
respect to any of the matters relevant to such opinions. We have also assumed, with your consent,
that the parties to the Transaction Documents, and the agents of such parties, have acted in good
faith and that consummation of the transactions contemplated by the Transaction Documents have
complied or will comply with any requirement of good faith, fair dealing, and conscionability.



     As used in the opinions expressed below, the phrase “our Actual Knowledge” means the conscious
awareness of facts or other information by the attorneys currently with our firm that are
principally responsible for and have given substantial attention to the preparation and review of
the Transaction Documents. We have not undertaken any investigation of the knowledge of other
attorneys of this firm or any investigation to determine the existence of any other documents or
facts. No inference as to our knowledge or investigation shall be drawn from the fact of our
representation of any other party or otherwise.



Specific Assumptions and Qualifications on

Opinions Regarding Incorporation, Existence, and Good Standing




     In rendering the opinions expressed in Paragraph 1 below with respect to the existence and
good standing of the Company, we have relied on certifications from the Secretary of State of
Delaware attesting to the valid existence and good standing of such entity and express our opinions
as of the dates of such certifications. In rendering the opinions expressed in Paragraph 1 below
with respect to the Company being a corporation, we have relied on certifications from the
Secretary of State of Delaware and express our opinions as of the dates of such certifications. In
connection with our opinion in Paragraph 1 below concerning the Subsidiaries being corporations and
the existence and good standing of the Subsidiaries, we have relied on the Subsidiary Certificates
and express our opinions as of the dates of such certifications.



 









 





Specific Assumptions, Qualifications, Limitations, 

and Exceptions Concerning Enforceability




     Our opinion in Paragraph 2 below is subject to the following:



     1. The enforceability of the Transaction Documents is subject to (a) the effects of (i)
applicable bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium, rearrangement,
liquidation, conservatorship, or similar laws of general application now or hereafter in effect
relating to or affecting the rights of creditors generally, (ii) general equity principles, and
(iii) statutory provisions of the federal Bankruptcy Code and the Uniform Fraudulent Conveyance Act
as adopted by the State of New York (and related court decisions) pertaining to the voidability of
preferential or fraudulent transfers, conveyances, and obligations and (b) the application of an
implied covenant of good faith and fair dealing under New York law.



     2. We express no opinion as to: (a) the enforceability of provisions of the Transaction
Documents to the extent that such provisions: (i) purport to waive or affect any rights to notices
required by law and that are not subject to waiver; (ii) purport to waive trial by jury; (iii)
state that any Buyer’s failure or delay in exercising rights, powers, privileges or remedies under
the Transaction Documents shall not operate as a waiver thereof; (iv) purport to indemnify any
Buyer for violations of federal or state securities laws or environmental laws, or any obligation
to the extent such obligation arises from or is a result of any Buyer’s own fraud, negligence, or
willful misconduct or to the extent that such indemnification is inconsistent with public policy;
(v) purport to establish or satisfy certain factual standards or conditions; (vi) purport to sever
unenforceable provisions from the Transaction Documents, to the extent that the enforcement of
remaining provisions would frustrate the fundamental intent of the parties to such documents; (vii)
purport to restrict access to legal or equitable remedies; (viii) purport to waive any claim of the
Company against any Buyer arising out of, or in any way related to, the Transaction Documents; or
(ix) provide that decisions by a party are conclusive or may be made in its sole discretion; (b)
whether a court would grant specific performance or any other equitable remedy with respect to
enforcement of any provision contained in the Transaction Documents; (c) the enforceability of any
provision in the Transaction Documents that purports to appoint an agent for service of process or
establish or otherwise affect jurisdiction, venue, evidentiary standards, or limitation periods, or
procedural rights in any suit or other proceeding; or (d) the enforceability of any provision in
the Transaction Documents that purports to waive, subordinate, or otherwise restrict or deny access
to rights, benefits, claims, causes of action, or remedies that cannot be waived, subordinated, or
otherwise restricted or denied.



     3. We express no opinion regarding the enforceability of any documents or agreements
referenced in the Transaction Documents (other than the Transaction Documents).



     4. We express no opinion as to any provision relating to choice of governing law contained in
the Transaction Documents to the extent the application of such provision may be subject to
constitutional limitations.



Specific Limitations and Qualifications on




 









 








Opinions Regarding Violation of Laws




     With respect to our opinions in Paragraph 3 below with respect to no violation of any
applicable law and our opinions in Paragraph 7 below as to the lack of any required consents,
approvals, or authorizations of governmental authorities, our opinions are expressed only with
respect to statutes or regulations that a lawyer in New York exercising reasonable and customary
professional diligence would reasonably recognize as being applicable to the parties to or the
transactions contemplated by the Transaction Documents. In addition, we express no opinion as to
the following: (a) federal securities laws and regulations administered by the Securities and
Exchange Commission (except to the extent stated in Paragraph 6 below), New York or any other state
“Blue Sky” laws and regulations (except to the extent stated in Paragraph 7 below), and laws and
regulations relating to commodity (and other) futures and indices and other similar instruments;
(b) pension and employee benefit laws and regulations; (c) antitrust and unfair competition laws
and regulations; (d) compliance with any fiduciary duty or similar requirements; (e) fraudulent
transfer and fraudulent conveyance laws; (f) environmental laws and regulations; (g) land use and
subdivision laws and regulations; (h) tax laws and regulations; (i) racketeering laws and
regulations (e.g., RICO); (j) laws, regulations, and policies concerning: i) national and local
emergency; ii) possible judicial deference to acts of sovereign states; and iii) criminal and civil
forfeiture laws; (k) other statutes of general application to the extent they provide for criminal
prosecution (e.g., mail fraud and wire fraud statutes); or (l) the statutes and ordinances, the
administrative decisions, and the rules and regulations of counties, towns, municipalities, and
special political subdivisions (whether created or enabled through legislative action at the
federal, state, or regional level), and any judicial decisions to the extent they deal with any of
the foregoing.



 









 





Other Specific Assumptions, Qualifications, Limitations and Exceptions




     In rendering the opinion(s) expressed in Paragraph 3 below with respect to the absence of a
breach, default or violation with or under any of the agreements set forth on Schedule B
attached hereto (the “Reviewed Agreements”), which have been certified to us by an officer of the
Company in the Officer’s Certificate as the only material agreements of the Company, we (i) have
made no examination of, and express no opinion with respect to, any financial or accounting
provisions or matters contained in any Reviewed Agreement, and (ii) limit our opinion to only
matters readily ascertainable from the face of such Reviewed Agreements.



     In rendering the opinion(s) expressed in Paragraph 5 below regarding the number of shares of
authorized capital stock of the Company, we have relied on our review of the Certificate of
Incorporation. In rendering the opinion(s) expressed in Paragraph 5 below regarding the number of
outstanding shares of capital stock of the Company, we have relied on the Officer’s Certificate as
to the number of outstanding shares on such date. In rendering the opinion(s) expressed in
Paragraph 5 below regarding the number of shares reserved for issuance, in addition to the Purchase
Agreement and the Warrant Agreements, we have relied upon the ability of the board of directors as
of March 21, 2007 to reserve for issuance the number of shares issuable upon currently outstanding
equity incentive plans and stock options agreements, conversion of the currently outstanding Series
A-1 Convertible Preferred Stock, the exercise of currently outstanding warrants, and the conversion
of the currently outstanding 5% Convertible Senior Notes due 2025.



Specific Limitations and Qualifications

on Opinions Regarding the Securities Act




     In rendering the opinions expressed in Paragraph 6 below, we advise you that, with respect to
our opinions regarding the registration exemption applicable to the offer and sale of the
Securities under the Purchase Agreement, we have, with your consent, assumed and relied upon the
accuracy of the representations and warranties and the compliance with the covenants of the Company
and the Buyers contained in the Purchase Agreement.



Opinions




     Based upon the foregoing and in reliance thereon and subject to the assumptions,
qualifications, limitations, and exceptions set forth herein, we are of the opinion that:



     1. The Company is a corporation validly existing and in good standing under the laws of the
State of Delaware. The Company has the requisite corporate power to own, lease and operate its
properties and to conduct its business as described in the Form 10-K for the year-ended December
31, 2006. Each of the Subsidiaries is a corporation validly existing under the laws of the state
of its formation.



     2. (a)The Company has the requisite corporate power and authority to execute, deliver and
perform all of its obligations under the Transaction Documents, including the issuance of the



 









 







Common Shares, the Warrants and the Warrant Shares, in accordance with the terms thereof. The
execution and delivery of the Transaction Documents by the Company and the consummation of the
transactions contemplated therein have been duly authorized by the Company’s Board of Directors,
and no further consent or authorization of the Company, its Board of Directors or its stockholders
is required therefore.



     (b) The Transaction Documents have been duly executed and delivered by the Company. The
Transaction Documents constitute valid and binding agreements of the Company, enforceable against
the Company in accordance with their respective terms.



     3. The execution, delivery and performance by the Company of the Transaction Documents, the
consummation by the Company of the transactions contemplated by the Transaction Documents and the
compliance by the Company with the terms thereof (a) do not violate or constitute a default (or an
event which, with the giving of notice or lapse of time or both, constitutes or would constitute a
default) under, or give rise to any right of termination, cancellation or acceleration under, for
which a waiver or consent has not been obtained (i) the Certificate of Incorporation or Bylaws of
the Company; (ii) the Reviewed Agreements; or (iii) any statute, law, rule or regulation applicable
to the Company; and (b) pursuant to the Reviewed Agreements, do not and will not result in or
require the creation of any lien, security interest or other charge or encumbrance upon or with
respect to any of the Company’s properties.



     4. When issued in accordance with the terms of the Purchase Agreement, the Common Shares will
be duly authorized and validly issued, fully paid and nonassessable, and free of any and all liens
or charges and free of any preemptive or similar rights to the extent contained in the Company’s
Certificate of Incorporation or Bylaws. When issued in accordance with the Warrant Agreement, the
Warrant Shares will be duly authorized and validly issued, fully paid and nonassessable and free
from any and all liens or charges and free of preemptive or similar rights to the extent contained
in the Company’s Certificate of Incorporation or Bylaws. The Warrant Shares have been duly and
validly authorized and reserved for issuance by all requisite corporate action.



     5. As of the date hereof and immediately after the consummation of the transactions
contemplated by the Transaction Documents, the authorized capital stock of the Company consists of
(i) 30,000,000 shares of Common Stock, of which as of the date hereof, 16,215,829 shares will be
issued and outstanding, and 3,621,134 shares have been reserved for issuance pursuant to the
Company’s equity incentive plans and stock option agreements, conversion of the outstanding Series
A-1 Convertible Preferred Stock, 5% Convertible Senior Notes due 2025, the exercise of outstanding
warrants and the exercise of the Warrants into Warrant Shares and no additional shares are reserved
for issuance pursuant to any currently outstanding securities, and (ii) 4,000,000 shares of
preferred stock, of which 72,000 shares are currently issued and outstanding shares of Series A-1
Convertible Preferred Stock. None of such Common Stock is subject to preemptive rights or other
similar rights pursuant to the Certificate of Incorporation or the Bylaws or under the DGCL or
pursuant to any Reviewed Agreement.



 









 





     6. The offer and sale of the Common Shares and Warrants in accordance with the Purchase
Agreement and the issuance of the Common Shares and Warrant Shares in accordance with the
Transaction Documents constitute transactions exempt from the registration requirements of the
Securities Act of 1933, as amended.



     7. No authorization, approval, consent, filing, or other order of any federal or state
governmental body, regulatory agency, self-regulatory organization or stock exchange or market, or
the stockholders of the Company, or any court, or to our Actual Knowledge, any third party is
required to be obtained by the Company to enter into and perform its obligations under the
Transaction Documents or for the issuance and sale of the Common Shares, the Warrants and Warrant
Shares in accordance with the Transaction Documents, or for the exercise of any rights and remedies
under any Transaction Documents that has not already been obtained or is contemplated pursuant to
the terms thereof except (i) the filing of a Form D under Regulation D of the Securities Act of
1933, as amended, (ii) the filing of a Form 8-K pursuant to the Securities Exchange Act of 1934, as
amended, (iii) the filing of a notification of the issuance of shares with The NASDAQ Stock Market
and (iv) the filing of a Form 99 with the State of New York.



     8. The Company is not an “investment company” or any entity controlled by an “investment
company,” as such term is defined in the Investment Company Act of 1940, as amended.



     This opinion (i) has been furnished to you at your request, and we consider it to be a
confidential communication that may not be furnished, reproduced, distributed or disclosed to
anyone without our prior written consent, (ii) is rendered solely in connection with the
transactions contemplated by the Transaction Documents, and may not be relied upon by any other
person or for any other purpose without our prior written consent, (iii) is rendered as of the date
hereof, and we undertake no, and hereby disclaim any kind of, obligation to advise you of any
changes or any new developments that might affect any matters or opinions set forth herein and (iv)
is limited to the matters stated herein, and no opinions may be inferred or implied beyond the
matters expressly stated herein.



Very truly yours,




HAYNES AND BOONE, LLP




 









 





SCHEDULE A




Subsidiaries




	 	 	 	 	 	 	 
	 	 	 	 	 	 	Certificates of
	 	 	Jurisdiction of	 	Type of	 	Existence and
	Name of Subsidiary	 	Formation	 	Organization	 	Good Standing
	Toreador Exploration
& Production Inc.

	 	Texas
	 	Corporation
	 	Articles of
Incorporation from
the Secretary of
State of Texas
dated March 19,
2007.

Certificate of
Existence from the
Secretary of State
of Texas dated
March 20, 2007.
Certificate of Good
Standing from the
Comptroller of
Public Accounts of
the State of Texas
dated March 19,
2007.
	 
	 	 	 	 	 	 
	Tormin, Inc.

	 	Delaware
	 	Corporation
	 	Certificate of
Incorporation from
the Secretary of
State of Delaware
dated March 19,
2007.
	 

	 	 	 	 	 	Certificate of
Existence from the
Secretary of State
of Delaware dated
March 19, 2007.
Certificate of
Incorporation from
the Secretary of
State of Delaware
dated March 19,
2007.
	 
	 	 	 	 	 	 
	Toreador Acquisition 

Corporation

	 	Delaware
	 	Corporation
	 	Certificate of
Existence from the
Secretary of State
of Delaware dated
March 19, 2007.
	 
	 	 	 	 	 	Certificate of
Incorporation from
the Secretary of
State of Delaware
dated March 16,
2007.
	 

	 	 	 	 	 	
	Madison (Turkey, Inc.)

	 	Delaware
	 	Corporation
	 	Certificate of
Existence from the
Secretary of State
of Delaware dated
March 16, 2007.







A-1









 





SCHEDULE B




Reviewed Agreements




Settlement Agreement, dated June 25, 1998, among the Gralee Persons, the Dane Falb Persons and
Toreador Royalty Corporation



Warrant, dated July 22, 2004, issued by Toreador Resources Corporation to Nigel Lovett.



Warrant No. 30, issued by Toreador Resources Corporation to Rich Brand amending and replacing
Warrant dated July 22, 2004



Registration Rights Agreement, effective November 1, 2002, among Toreador Resources Corporation and
persons party thereto



Registration Rights Agreement, dated October 20, 2003, between Toreador Resources Corporation and
William I. Lee and Wilco Properties, Inc.



Registration Rights Agreement, dated December 22, 2003, between Toreador Resources Corporation and
Wilco Properties Inc



Registration Rights Agreement, dated July 22, 2004, between Toreador Resources Corporation and the
Investors party thereto.



Registration Rights Agreement, dated July 22, 2004, between Toreador Resources Corporation and the
Investors party thereto



Registration Rights Agreement dated September 27, 2005 by and between Toreador Resources
Corporation and UBS Securities LLC and the other initial purchasers named in the purchase
agreement.



Indenture dated as of September 27, 2005 by and between Toreador Resources Corporation and The Bank
of New York Trust Company, N.A.



Employment letter agreement between Madison Oil Company and Michael J. FitzGerald dated September
10, 2001



Toreador Royalty Corporation 1990 Stock Option Plan



Amendment to Toreador Royalty Corporation 1990 Stock Option Plan, effective as of May 15, 1997



Toreador Royalty Corporation Amended and Restated 1990 Stock Option Plan, effective as of September
24, 1998



 









 





Amendment Number One to Toreador Resources Corporation Amended and Restated 1990 Stock Option Plan



Amendment Number Two to Toreador Resources Corporation Amended and Restated 1990 Stock Option Plan



Toreador Royalty Corporation 1994 Non-Employee Director Stock Option Plan, as amended



Toreador Resources Corporation Amended and Restated 1994 Non-employee Director Stock Option Plan



Toreador Resources Corporation 2002 Stock Option Plan



Amendment Number One to the Toreador Resources Corporation 2002 Stock Option Plan



Toreador Resources Corporation 2005 Long-Term Incentive Plan



Amendment to Toreador Resources Corporation 2005 Long-Term Incentive Plan



Form of Employee Restricted Stock Award



Form of 2005 Outside Director Restricted Stock Award



Form of 2006 Outside Director Restricted Stock Award



Summary Sheet: 2006 Executive Officer Annual Base Salaries



Summary Sheet: 2006 Short Term Incentive Compensation Plan



Summary of Amendment to Restricted Stock Award Agreement of Thomas P. Kellogg, dated April 6, 2006



Summary Sheet: 2005 Director Compensation



Summary Sheet: 2006 Non-Employee Director Equity Compensation



Summary Sheet: 2007 Director Compensation.



Michael FitzGerald Employee Restricted Stock Award Agreement dated May 30, 2006



Ed Ramirez Employee Restricted Stock Award Agreement dated May 30, 2006



Michael J. FitzGerald Change in Control Agreement dated November 8, 2006



Herbert C. Williamson III Restricted Stock Award Agreement dated November 8, 2006



 









 





Nigel Lovett Restricted Stock Award Agreement dated November 8, 2006



Nicholas Rostow Restricted Stock Award Agreement dated November 8, 2006



Letter Agreement by and between Toreador Resources Corporation and G. Thomas Graves III, dated
January 25, 2007



Summary Sheet: 2007 Nigel Lovett’s Annual Base Salary



Summary Sheet: 2007 Executive Officer Base Salaries



G. Thomas Graves III Stock Award Agreement dated January 25, 2007



Summary Sheet: 2007 Short-Term Incentive Compensation Plan



Form of Indemnification Agreement, dated as of April 25, 1995, between Toreador Royalty Corporation
and each of the members of our Board of Directors



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)



Subordinated Revolving Credit Agreement, dated as of October 3, 2001, between Madison Oil Company
and Toreador Resources Corporation



Subordinated Revolving Credit Note, dated as of October 3, 2001, between Toreador Resources
Corporation and Madison Oil Company



Credit Agreement, dated December 30, 2004, by and among Toreador Resources Corporation, Toreador
Acquisition Corporation, Toreador Exploration and Production, Inc. and Texas Capital Bank, N.A.



Guaranty, dated December 30, 2004, executed by Toreador Resources Corporation in favor of Texas
Capital Bank, N.A.



Warrant to Purchase Common Stock of Toreador Resources Corporation dated July 11, 2005, by and
between Toreador Resources Corporation and Natexis Banques Popularis



Form of Subscription Agreement for September 16, 2005 Private Placement.



Purchase Agreement dated November 22, 2005 by and among Toreador Resources Corporation, UBS
Securities LLC and the other initial Purchasers named in Exhibit A attached thereto



Loan and Guarantee Agreement dated December 28, 2006 by and among Toreador Resources Corporation,
as Guarantor, Toreador Turkey Ltd. as Borrower and Guarantor, Toreador Romania Ltd, a Borrower and
Guarantor, Madison Oil France SAS, as Borrower and Guarantor, Toreador



 









 







Energy France S.C.S., as Borrower and Guarantor, Toreador International Holding L.L.C., as
Guarantor, and International Finance Corporation



Security Agreement dated February 21, 2007 (signed by Toreador Resources on February 27, 2007) by
and between Toreador Resources Corporation, as Assignor, and International Finance Corporation, as
Assignee



Quota Charge Agreement dated February 28, 2007 by and between Toreador Resources Corporation, as
Charger, and International Finance Corporation, as Chargee.



 









 






EXHIBIT E




TOREADOR RESOURCES CORPORATION




SECRETARY’S CERTIFICATE




The undersigned hereby certifies that she is the duly elected, qualified and acting Secretary of
Toreador Resources Corporation, a Delaware corporation (the “Company”), and that as such she is
authorized to execute and deliver this certificate in the name and on behalf of the Company and in
connection with the Securities Purchase Agreement, dated as of March 21, 2007, by and among the
Company and the investors listed on the Schedule of Buyers attached thereto (the “Securities
Purchase Agreement”), and further certifies in his official capacity, in the name and on behalf of
the Company, the items set forth below. Capitalized terms used but not otherwise defined herein
shall have the meaning set forth in the Securities Purchase Agreement.



Attached hereto as Exhibit A is a true, correct and complete copy of the unanimous written
consent of the Board of Directors of the Company, dated March ___, 2007. The resolutions
contained in Exhibit A have not in any way been amended, modified, revoked or rescinded, have
been in full force and effect since their adoption to and including the date hereof and are
now in full force and effect.



Attached hereto as Exhibit B is a true, correct and complete copy of the Certificate of
Incorporation of the Company, together with any and all amendments thereto, and no action has
been taken to further amend, modify or repeal such Certificate of Incorporation, the same
being in full force and effect in the attached form as of the date hereof.



Attached hereto as Exhibit C is a true, correct and complete copy of the Amended and
Restated Bylaws of the Company and any and all amendments thereto, and no action has been
taken to further amend, modify or repeal such Bylaws, the same being in full force and effect
in the attached form as of the date hereof.



Each person listed below has been duly elected or appointed to the position(s) indicated opposite
his name and is duly authorized to sign the Securities Purchase Agreement and each of the
Transaction Documents on behalf of the Company, and the signature appearing opposite such
person’s name below is such person’s genuine signature.



	 	 	 	 	 
	Name	 	Position	 	Signature
	 
	 	 	 	 
	Douglas W. Weir 

	 	Senior Vice President
and Chief Financial
Officer 
	 	 






 









 






IN WITNESS
WHEREOF, the undersigned has hereunto set his hand as of this ___ day of March, 2007.



	 	 	 	 	 
	 

	 	 

Shirley Anderson
	 	 
	 

	 	Secretary	 	 






I, Douglas W. Weir, Senior Vice President and Chief Financial Officer of the Company, hereby
certify that Shirley Anderson is the duly elected, qualified and acting Secretary of the Company
and that the signature set forth above is her true signature.



	 	 	 	 	 
	 

	 	 

Douglas W. Weir
	 	 
	 

	 	Senior Vice President and Chief
Financial Officer	 	 
	 

	 	          	 	 






 









 






EXHIBIT F




TOREADOR RESOURCES CORPORATION




OFFICER’S CERTIFICATE




     The undersigned Senior Vice President and Chief Financial Officer of Toreador Resources
Corporation, a Delaware corporation (the “Company”), hereby represents, warrants and certifies to
the Buyers (as defined below), pursuant to Section 7(ix) of the Agreement (as defined below), as
follows:




	 	1.	 	The representations and warranties made by the Company set
forth in Section 3 of the Securities Purchase Agreement, dated as of March 21,
2007 (the “Agreement”), among the Company and the investors identified on the
Schedule of Buyers attached to the Agreement (the “Buyers”), (i) to the extent
not qualified by materiality or Material Adverse Effect, are true and correct
in all material respects as of the date hereof (except for representations and
warranties that speak as of a specific date, which shall be true and correct in
all material respects as of such specified date) and (ii) to the extent
qualified by materiality or Material Adverse Effect, are true and correct as of
the date hereof (except for representations and warranties that speak as of a
specific date, which shall be true and correct as of such specified date).
	 
	 	2.	 	The Company has, in all material respects, performed, satisfied
and complied with all covenants, agreements and conditions required to be
performed, satisfied or complied with by it under the Transaction Documents as
of the date hereof.




Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the
Agreement.




     IN
WITNESS WHEREOF, the undersigned has executed this certificate this ___ day of March, 2007.



	 	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title: Senior Vice President and Chief	 	 
	 

	 	Financial Officer	 	 






 









 






Schedule 3(a)

List of Subsidiaries




Toreador Exploration & Production, Inc.

Tormin, Inc.

Toreador Acquisition Corporation

Toreador Energy France SCS

Toreador Hungary Ltd.

Toreador Exploration Ltd.

Toreador Romania Ltd.

Toreador Resources Corp. USA Sucursaia Bucuresti (Branch Office)

Toreador International Holdings Ltd.

Toreador Turkey Ltd.

Madison (Turkey), Inc.

Toreador France, S.A.S.

Capstone Royalty of Texas, LLC (50% owner)

EnergyNet.com, Inc.(38.23% owner)

ePsolutions (36.36% owner)




Toreador Acquisition Corporation is not in good standing in New Mexico because its Annual Report
was filed late. Toreador Acquisition Corporation expects to have the Annual Report processed in
the near future and to be in good standing.



 









 





Schedule 3(e)

Consents




File Form D with the SEC and state securities commissioners

File Form 99 with New York State

File Form 8-K

File Notification Form: Change in the Number of Shares Outstanding with NASDAQ




Pursuant to Registration Rights Agreements, Mr. William I. Lee and Wilco Properties, Inc., Mr.
Lee, Wilco Properties, Inc., Nigel Lovett and Rich Brand have the right to include certain of
the shares of common stock underlying their Series A-1 Convertible Preferred Stock included in
the registration statement. Mr. Lee, Wilco Properties, Inc., Mr. Lovett and Mr. Brand have
waived this right.



 









 





Schedule 3(i)

Application of Takeover Protections




The Company is subject to §203 of the Delaware General Corporation Law.



 









 





Schedule 3(j)

SEC Documents




On January 16, 2007, the Company filed Amendment No. 1 to its Annual Report on Form 10-K to restate
previously issued financial statements for the fiscal years ended December 31, 2005, 2004 and 2003.
The Company also filed Amendments to its Quarterly Reports on Form 10-Q to restate previously
issued financial statements for the quarterly periods ended March 31, 2006 and June 30, 2006. The
restatements were made in order to (i) reverse a non-cash loss contingency and (ii) to capitalize
interest that previously had been expensed.



Due to restatements of its financial statements, the Company was late in filing its Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2006, which was filed on January
16, 2007.



 









 





Schedule 3(k)

Absence of Certain Changes




See Schedule 3(j).



Toreador has entered into a Letter Agreement to sell its interest in EnergyNet subject to both
EnergyNet and NASD approval.



 









 





Schedule 3(m)

Conduct of Business




In connection with the late filing of its Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2006, the Company received a written Staff Determination Letter from the NASDAQ
Stock Market on November 14, 2006, stating that the Company’s securities are subject to delisting.
A hearing before the NASDAQ Listing Qualifications Panel was held on January 11, 2007, and the
Company filed its Form 10-Q on January 16, 2007. On February 15, 2007, NASDAQ notified the Company
that the Company had cured its filing deficiency and regained compliance with the continued listing
standards on the NASDAQ Stock Market.



 









 





Schedule 3(p)

Transactions with Affiliates




William I. Lee, a director of the Company, is also Chairman of the Board of Directors and majority
owner of Wilco Properties, Inc. (“Wilco”), to which the Company subleases office space pursuant to
a sub-lease agreement. The Company has 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.



Frederic Auberty is Toreador’s Vice President-International Operations and is the stepson of
William I. Lee, a Toreador director.



Herschel Sanders is Toreador’s Vice President-Land and is the son of H.R. Sanders, Jr., a Toreador
director.



 









 





Schedule 3(q)

Equity Capitalization




Pursuant to certain warrant agreements exercisable into 36,400 shares, from after July 22, 2008
until July 22, 2009 or a Change of Control, the holders of the warrants can force Toreador to pay
the difference between the closing price on the date of surrender and the exercise price of the
warrant.



See the first sentence of Section 3(q)



See Schedule 3(r)



See Schedule 3(e) regarding the waiver of the right of Mr. Lee and Wilco Properties, Inc. to
include shares in the registration statement.



There are options exercisable into 501,170 shares of Common Stock.



There are warrants exercisable into 98,760 shares of Common Stock.



There are 72,000 shares of Series A-1 Convertible Preferred Stock outstanding which are convertible
into 450,000 shares of Common Stock.



There is $82,250,000 of 5% Convertible Senior Notes due 2025 which are convertible into 2,014,766
shares of Common Stock.



 









 





Schedule 3(r)




Indebtedness and Other Contracts




Credit Facility with Texas Capital Bank, N.A.




Toreador is a party to a five-year $25 million reserve-based borrowing facility with Texas Capital
Bank, N.A. The facility bears interest at a rate of prime less 0.5% and is collateralized by
Toreador’s domestic working interests. The borrowers under this facility are two of Toreador’s
domestic subsidiaries, and Toreador has guaranteed the obligations. The Texas Capital facility
requires monthly interest payments until January 1, 2009 at which time all unpaid principal and
interest are due. The Texas Capital facility contains various affirmative and negative covenants.
These covenants, among other things, limit additional indebtedness, the sale of assets, change of
control and management and require the Company to meet certain financial requirements.



Credit Facility with International Finance Corporation




Toreador is a party to a loan and guarantee agreement with International Finance Corporation, which
provides for a $25 million secured revolving facility. The current maximum facility amount is $25
million which maximum facility amount will increase to $40 million when the projected total
borrowing base amount exceeds $50 million. The loan and guarantee agreement also provides for an
unsecured $10 million facility. Interest accrues on any loans under the $25 million facility at a
rate of 2% over the six month LIBOR rate. Interest accrues at a rate of 0.5% over the six month
LIBOR rate under the $10 million facility.



On December 31, 2011, the maximum amount available under the $25 million facility begins to
decrease by $5 million every six months from $40 million (assuming the projected borrowing base
amount exceeds $50 million) until the final portion of the $25 million facility is due on December
15, 2014. On December 15, 2014, $5 million of the $10 million facility is to be repaid with the
remaining $5 million being due on June 15, 2015.



The Company is to meet the following ratios on a consolidated basis: (i) the life of loan coverage
ratio of not less than: (a) 1.2:1.0 in 2006 and 2007; (b) 1.3:1.0 in 2008; and (c) 1.4:1.0 in 2009
and each subsequent year thereafter; (ii) reserve tail ratio of not less than 25%; (iii) adjusted
financed debt to EBITDA ratio of not more than 3.0:1.0; (iv) liabilities to tangible net worth
ratio of not more than 60:40; and (v) interest coverage ratio of not less than 3.0:1.0.



Toreador is subject to certain negative covenants, including, but not limited to, the following:
(i) except as required by law or to pay the dividends on the Series A-1 Convertible Preferred
Stock, paying dividends; (ii) subject to certain exceptions, incurring debt, making guarantees or
creating or permitting to exist any liens, (iii) subject to certain exceptions, making or
permitting to exist loans or advances to, or deposits, with other persons or investments in any
person or enterprise; (iv) subject to certain exceptions, selling, transferring, leasing or
otherwise disposing of all or a material part of its borrowing base assets; and (v) subject to
certain exceptions, undertaking or permitting any merger, spin-off, consolidation or
reorganization.



 









 





International Finance Corporation has a first ranking security interest (a) in certain proceeds,
receivables and contract rights relating to and from the sale of oil or gas production in France,
Turkey and Romania and (b) in funds held in certain bank accounts. International Finance
Corporation has an assignment of all rights and claims to any compensation or other special
payments in respect of all concessions other than those arising in the normal course of operations
payable by the government of Turkey and Romania. International Finance Corporation has a first
ranking pledge (a) by Toreador International of all its shares in the borrowers; (b) by Madison Oil
of all its shares in Toreador France; and (c) by Toreador of all its shares in Toreador
International.



5% Convertible Senior Notes Due 2025




     On September 27, 2005, Toreador sold $75 million of Convertible Senior Notes due October 1,
2025 to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933.
Toreador also granted the initial purchasers the option to purchase an additional $11.25 million
aggregate principal amount of Convertible Senior Notes to cover over-allotments. The option was
exercised on September 30, 2005. The total principal amount of Convertible Senior Notes issued was
$86.25 million and total net proceeds were approximately $82.2 million.



     The Convertible Senior Notes bear interest at a rate of 5% per annum and can be converted into
common stock at an initial conversion rate of 23.3596 shares of common stock per $1,000 principal
amount of Convertible Senior Notes , subject to adjustment (equivalent to a conversion price of
approximately $42.81 per share). Toreador may redeem the Convertible Senior Notes, in whole or in
part, on or after October 6, 2008, and prior to October 1, 2010, for cash at a redemption price
equal to 100% of the principal amount of Convertible Senior Notes to be redeemed, plus any accrued
and unpaid interest, if the closing price of its common stock exceeds 130% of the conversion price
over a specified period. On or after October 1, 2010, Toreador may redeem the Convertible Senior
Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of
Convertible Senior Notes to be redeemed, plus any accrued and unpaid interest, irrespective of the
price of its common stock. Holders may convert their Convertible Senior Notes at any time prior to
the close of business on the business day immediately preceding their stated maturity, and holders
may, upon the occurrence of certain fundamental changes, and on October 1, 2010, October 1, 2015,
and October 1, 2020, require Toreador to repurchase all or a portion of their Convertible Senior
Notes for cash in an amount equal to 100% of the principal amount of such Convertible Senior Notes,
plus any accrued and unpaid interest.



 









 





Schedule 3(s)

Absence of Litigation




The Company and its co-venturers have made a claim in respect of the cost of re-drilling and
repeating flow-testing of two wells that were damaged by a vessel owned by Micoperi. In addition,
the Company and its co-venturers have claimed to recover back from Micoperi a sum of about $8.7
million paid to Micoperi under the contract between the Company, its co-venturers and Micoperi.
Micoperi has made a cross-claim for about $6.8 million in respect of sums allegedly due to Micoperi
under the contract between the Company, its co-venturers and Micoperi. Micoperi has also asserted a
claim that the arrest of the vessel “MICOPERI 30” at Palermo, Italy was wrongful and have asserted
a claim for damages in respect of such allegedly wrongful arrest. The Company and its co-ventures
have received security from Micoperi by way of a letter of undertaking from their insurers, and
have provided security to Micoperi in respect of their cross-claims by way of a bank guarantee of
$7.8 million. The claims and cross-claims are subject to the jurisdiction of the English Court;
however, neither side has yet commenced any court proceedings.



 









 





Schedule 3(t)

Insurance




None



 









 





Schedule 3(v)

Title




Texas Capital Facility




The credit facility with Texas Capital Bank, N.A. is secured by mortgages on oil and gas properties
owned by Toreador Exploration and Production Inc. (“TEP”) and Toreador Acquisition Corporation
(“TAC”), subsidiaries of the Company, along with pledges of the Company’s ownership interests of
TEP and TAC.



International Finance Corporation Facility




International Finance Corporation has a first ranking security interest (a) in certain proceeds,
receivables and contract rights relating to and from the sale of oil or gas production in France,
Turkey and Romania and (b) in funds held in certain bank accounts. International Finance
Corporation has an assignment of all rights and claims to any compensation or other special
payments in respect of all concessions other than those arising in the normal course of operations
payable by the government of Turkey and Romania. International Finance Corporation has a first
ranking pledge (a) by Toreador International of all its shares in the borrowers; (b) by Madison Oil
of all its shares in Toreador France; and (c) by Toreador of all its shares in Toreador
International.



 









 





Schedule 3(y)

Subsidiary Rights




Certain subsidiaries of the Company which are parties to either the Texas Capital Bank credit
facility or the International Finance Corporation credit facilities cannot make a Restricted
Payment as defined in such credit facility agreement if there is a default under the credit
facility



 









 





Schedule 3(aa)

Internal Accounting and Disclosure Controls




As noted in the Annual Report on Form 10-K for the year ended December 31, 2006, Toreador’s
management concluded, and Grant Thornton issued an audit report confirming, that the Company’s
internal control over financial reporting was not effective as of December 31, 2006 to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external reporting purposes in accordance with generally accepted
accounting principles.



Toreador’s management identified the following material weaknesses as of December 31, 2006:




	 	•	 	Toreador did not maintain an effective control environment and Toreador’s
financial and accounting organization was not adequate to support Toreador’s financial
reporting requirements. The involvement of corporate personnel in the reporting of
foreign transactions and operations was not sufficient to accurately capture and
record such activity and Toreador did not maintain a sufficient complement of
personnel with an appropriate level of accounting knowledge, experience and training
in the application of generally accepted accounting principles consistent with the
level and complexity of Toreador’s operations. Toreador also did not have an adequate
review and approval process for recorded journal entries and changes made to the
general ledger.
	 
	 	•	 	Toreador’s accounting and financial reporting systems and procedures were
not sufficiently designed to ensure consistent and complete application of Toreador’s
accounting policies and to prepare financial statements in accordance with generally
accepted accounting principles. This includes not only the sufficiency of Toreador’s
review of sensitive calculations, reconciliations and spreadsheets but also the
preparation and processing of financial accounting information.





Toreador’s management is currently evaluating the implementation of procedures that may be
necessary to fully remediate the material weaknesses described above. Toreador’s management is in
the process of making the following changes to its system of internal controls:




	 	•	 	Improving the computerized integrated financial reporting system. This
will automate the manual processes that are causing errors in spreadsheets and
sensitive calculations.
	 
	 	•	 	Hiring additional experienced accounting staff to allow for improved
segregation of duties and a more thorough review, by senior financial personnel, of
the financial statements and underlying supporting documentation.
	 
	 	•	 	Providing additional training to Toreador’s accounting staff and
acquiring other accounting resources to improve Toreador’s financial reporting.




 









 






	 	•	 	Formally documenting Toreador’s accounting policies and procedures.





As noted in the Form 10-K/A for the year-ended December 31, 2005, the Forms 10-Q and 10-Q/A for the
quarters ended March 31, 2006 and June 30, 2006 and the Form 10-Q for the quarter ended September
30, 2006, there were material weaknesses in internal accounting controls.



In the Form 10-K for the year-ended December 31, 2005, Toreador’s independent auditor’s at the
time, Hein & Associates, Inc., found material weaknesses in Toreador’s internal accounting
controls.