1
EXHIBIT 10.22
FINANCIAL CONSULTING AGREEMENT
THIS FINANCIAL CONSULTING AGREEMENT (the "Agreement"), made and
entered into as of the 31st day of December, 1996, by and between THE HALLWOOD
GROUP INCORPORATED, a Delaware corporation ("Hallwood Group") and HSC FINANCIAL
CORPORATION, a Liberian corporation (the "Consultant").
RECITALS
Hallwood Group is engaged in numerous international activities and
shall from time to time require the financial knowledge and expertise of the
Consultant or its agents in regard to various transactions between Hallwood
Group and its affiliates, and any third parties (Hallwood Group and its
affiliated entities are sometimes referred to in this Agreement as the
"Hallwood Companies");and
The Hallwood Companies desire to draw upon and benefit from the
financial knowledge and expertise of Consultant or its agents, and the
Consultant desires to consult with the Hallwood Companies and be available
therefor and the Consultant is willing to undertake and to perform various
duties for the Hallwood Companies.
AGREEMENT
In consideration of the mutual undertakings and agreements contained
in this Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Appointment. Hallwood Group agrees to appoint the Consultant
and the Consultant agrees to accept such appointment and undertakes to advise
and consult with Hallwood Group upon the terms and conditions set forth in this
Agreement.
2. Duties of the Consultant.
2.1 General Duties. The Consultant shall furnish and
perform international consulting and advisory services to the Hallwood
Companies to enable such entities to: (i) render assistance in strategic
planning; and (ii) effect acquisitions by the Hallwood Companies of assets or
mergers of the Hallwood Companies with other entities and shall perform such
services in or from Monaco, Antigua, or such other jurisdictions as Consultant
or its agents may, in their sole discretion, deem appropriate, and neither
Consultant nor any agent of Consultant shall be obligated to provide any such
services, or otherwise engage in any business of any nature whatsoever, in the
United States or the United Kingdom. In particular, the Consultant's duties
and obligations hereunder shall include: (a) performing such duties at such
times and in such manner as shall be mutually agreeable to Hallwood Group and
the Consultant, although at all times the Consultant will retain control over
how such services are performed and who the Consultant will hire to
2
perform such services; (b) reporting to Hallwood Group and any other entity
designated by Hallwood Group, as needed, to fulfill its obligations regarding
the rendition of international strategic and consulting advice; and (c)
observing and complying with all resolutions, regulations and directions from
time to time made or given by Hallwood Group as long as such resolutions,
regulations and directions do not interfere with the manner in which Consultant
performs its duties.
2.2 Relationship of the Parties. In performing its
services under this Agreement, the Consultant shall be an independent
contractor and, as between Hallwood Group and the Consultant, neither Hallwood
Group nor any other of the Hallwood Companies shall be responsible for
withholding, collection or payment of income taxes or for other taxes of any
nature on behalf of the Consultant or any agent of Consultant. Nothing
contained in this Agreement shall make the Consultant the agent, employee,
joint venturer or partner of the Hallwood Companies or provide the Consultant
with the power or authority to bind the Hallwood Companies to any contract,
agreement or arrangement with any individual or entity except with the prior
written approval of such entities.
3. Nondisclosure and Confidentiality. The Consultant understands
that it has developed and been exposed to, or may develop or be exposed to
highly confidential information and trade secrets of the Hallwood Companies,
including, without limitation, geological and geophysical data and analysis,
discoveries, well logs, drilling techniques, drilling locations, drilling
results, acquisitions, technical studies, appraisals, future plans and
strategies, tenants, rent rolls, business procedures, agreements, financial
data and records (collectively, "Confidential Information"), and that
maintenance by the Hallwood Companies of their proprietary Confidential
Information to the fullest extent possible is extremely important.
Accordingly, the Consultant covenants that, except with the prior written
consent of Hallwood Group, it shall at all times keep confidential and not
divulge, furnish or make accessible to anyone (except Hallwood Group's
authorized representatives), any confidential information to which the
Consultant has been or shall become privy relating to the business of Hallwood
Group, or any of its affiliates. The provisions of this Section 3 shall not
apply to any information to the extent (i) it is or shall become generally
known to the public or the trade (without the commission of a tortious act),
(ii) it is or shall become available in trade or other publications, (iii) the
Consultant is required by law to disclose such information to any person, or
(iv) that agents of Consultant need such information to assist Consultant with
the performance of its duties hereunder. With respect to clause (iv), however,
Consultant agrees to indemnify the Energy Companies to the extent any agent of
Consultant violates any provision contained in this Section 3. Upon
termination of the Consultant's appointment for any reason, or if earlier
required by the Hallwood Companies, the Consultant agrees to return to the
Hallwood Companies all copies of any documents or items previously provided to
Consultant and/or its agents containing any Confidential Information.
4. Certain Payments. The Consultant acknowledges that it is
aware of the provision of United States law relating to prohibitions of any
person representing a United States company from, directly or indirectly,
giving anything of value to any foreign official to influence the foreign
official in directing or agreeing to do business with the United States firm.
In addition, the Consultant acknowledges that it has read the Statement of
Company Policy of the Hallwood
2
3
Entities regarding payment of gifts to foreign officials that has previously
been supplied to the Consultant. The Consultant hereby undertakes to abide by
such laws and policy and will not use any part of the amounts paid under this
Agreement or any payments that are prohibited under such laws or policy.
5. Term. The services of the Consultant under this Agreement
shall commence on the date of execution of this Agreement (the "Commencement
Date") and shall continue thereafter until July 31, 1998, unless earlier
terminated as provided in this Agreement (the "Term"); provided, however, that
this Agreement shall automatically renew for an additional one (1) year period
(the "Renewal Term") commencing on the expiration of the Term or any Renewal
Term, as the case may be, on the same terms and conditions provided for in this
Agreement, except as may otherwise be agreed upon in writing by the parties,
until this Agreement is terminated pursuant to its terms. Either party may
give written notice to the other of its election not to renew this Agreement,
which written election must be given not less than 30 days prior to the
expiration of the Term or any Renewal Term, as the case may be.
6. Compensation.
A. As compensation for the Consultant's services, Hallwood Group
agrees to pay to the Consultant an annual fee of Eight Hundred Twenty Five
Thousand Dollars ($825,000), payable in monthly installments of Sixty Eight
Thousand Seven Hundred Fifty Dollars ($68,750) on the first day of each month.
B. The amounts paid pursuant to paragraph A of this section shall
be a nonrefundable advance against any fees, commissions or other payments
payable to Consultant in the future for services rendered by Consultant in
connection with any transactions between the Hallwood Companies and any third
party.
X. Xxxxxxxx Group and the Consultant hereby acknowledge and agree
that all amounts payable pursuant to paragraph A of this section are to be paid
as a retainer to secure, for the benefit of the Hallwood Companies, the
availability of the Consultant to perform the services referred to in Section 3
of this Agreement. Consequently, all amounts so payable shall be so payable,
without offset, withholding or any deduction of any nature whatsoever, whether
or not any services are performed at any time, except as provided in paragraph
B of this section.
X. Xxxxxxxx Group shall reimburse Consultant for all reasonable
and ordinary out-of-pocket business expenses Consultant reasonably incurs in
the performance of its duties under this Agreement.
7. Termination. Either party may terminate this Agreement at any
time upon the following events: (i) any act of dishonesty on the part of one
party resulting or intended to result directly or indirectly in personal gain
or benefit at the expense of the other party or material damage of or to
property of the other party; (ii) any act of fraud, misappropriation,
embezzlement or willful misconduct by either party or (iii) the willful breach
or repeated, habitual neglect by
3
4
either party of its duties under this Agreement. In all other events, this
Agreement may not be terminated at the will of either party until the projects
assigned under this Agreement have been completed.
8. Assignment. Neither party hereto may assign, without the
other party's prior written consent, this Agreement, or any right or obligation
hereunder, and any and all assignments without such prior written consent shall
be null and void, except that with the consent of Hallwood Group the Consultant
may designate agents to perform its obligations under this Agreement.
9. Miscellaneous.
(a) Notices. Any notice to be given hereunder is to be given in
writing by either party to the other and delivered or sent by prepaid airmail
post or facsimile transmission addressed to the address of the addresses set
forth opposite each party's name below or such other address as may be notified
by one party to the other for such purposes and shall be deemed to be served in
the case of airmail post three days after posting and in the case of facsimile
transmission immediately upon successful transmission.
(b) Headings; Pronouns. The headings of the paragraphs of this
Agreement are for convenience of reference only and are not to be considered
and construed in this Agreement. When the context so requires in this
Agreement, the masculine gender includes the feminine and neuter, and the
singular number includes the plural, and vice versa.
(c) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.
(d) Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of Texas and the parties agree to submit
themselves to the jurisdiction of Texas.
(e) Counterparts. This Agreement may be executed in multiple
counterparts, all of which shall be deemed originals, but which counterparts
shall constitute one and the same instrument.
(f) Binding Agreement. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective successors and assigns.
Whenever a reference to any party is made herein, such reference shall be
deemed to include a reference to the heirs, executors, legal representatives,
successors and assigns of such party.
4
5
(g) Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof.
No variations, modifications or changes herein or hereof shall be binded upon
any party unless set forth in a document duly executed by or on behalf of such
party.
(h) Amendments. This Agreement may not be modified, altered,
amended, waived or terminated orally, unless in writing signed by the parties
hereto.
* * * * *
5
6
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first above written.
HALLWOOD GROUP:
Address: THE HALLWOOD GROUP INCORPORATED
0000 Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000 By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------------
Title: Vice-President
----------------------------------
CONSULTANT:
Address: HSC FINANCIAL CORPORATION
00, Xxxxxx Xxxxxxxxx Xxxxx
Xxxxx-Xxxxx XX00000
Principality of Monaco By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-----------------------------------
Title: President
----------------------------------
6
