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EXHIBIT 10.23
FINANCIAL CONSULTING AGREEMENT
This Financial Consulting Agreement ("Agreement"), is made and entered
into as of December 31, 1996 by and between Hallwood Petroleum, Inc. ("HPI"),
and The Hallwood Group Incorporated ("Consultant").
RECITALS
HPI 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 Energy Partners,
L.P., a Delaware limited partnership (the "Partnership"), HEPGP Ltd.("HEPGP"),
the general partner of the Partnership, Hallwood Consolidated Resources
Corporation, a Delaware corporation ("HCRC"), or their affiliates, and any
third parties (collectively, the "Energy Companies"); and
The Energy Companies desire to draw upon and benefit from the
international financial knowledge and expertise of Consultant or its agents,
the Consultant desires to consult with the Energy Companies and be available
therefor, and the Consultant is willing to undertake and to perform various
duties for HPI.
AGREEMENT
In consideration of the mutual benefits to be derived from this
Agreement and the covenants and agreements set forth herein, the receipt and
sufficiency of which are acknowledged by the execution and delivery hereof, the
parties agree as follows:
1. Appointment. HPI agrees to appoint the Consultant and the
Consultant agrees to accept such appointment and undertakes to advise and
consult with HPI 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 Energy
Companies to enable such entities to: (i) render assistance in
strategic planning; and (ii) effect acquisitions by the Energy
Companies of oil and gas interests or mergers of the Energy Companies
with other entities and shall perform such services in or from Monaco
or Antigua, or such other jurisdiction(s) 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 HPI and the Consultant, although at
all times the Consultant
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will retain control over how such services are performed and who the
Consultant will hire to perform such services; (b) reporting to HPI
and any other entity designated by HPI, 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 HPI 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 HPI and the Consultant, neither HPI nor any
other of the Energy 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 Energy Companies or provide
the Consultant with the power or authority to bind the Energy
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 HPI and the other Energy
Companies and, including, without limitation, geological and geophysical data
and analysis, discoveries, well logs, drilling techniques, drilling locations,
drilling results, land acquisitions, technical studies, future plans and
strategies (collectively, "Confidential Information"), and that maintenance by
HPI and the other Energy Companies of their proprietary Confidential
Information to the fullest extent possible is extremely important.
Accordingly, the Consultant covenants that, (a) except with the prior written
consent of the Partnership, it shall at all times keep confidential and not
divulge, furnish or make accessible to anyone (except HEPGP's or the
Partnership's authorized representatives), any confidential information to
which the Consultant has been or shall become privy relating to the business of
the Partnership, the Partnership or any of its affiliates and, (b) except with
the prior written consent of HCRC, it shall at all times keep confidential and
not divulge, furnish or make accessible to anyone (except HCRC's authorized
representatives), any confidential information to which the Consultant has been
or shall become privy relating to the business of HCRC 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 HPI, the
Consultant agrees to return to HPI 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
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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 HPI 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 June 30, 2000, unless earlier
terminated as provided in this Agreement (the "Term"); provided, however, that
this Agreement shall automatically renew for successive additional three (3)
year periods (each, a "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 services rendered by the Consultant
hereunder, HPI shall pay to the Consultant an annual fee of Five Hundred Fifty
Thousand Dollars ($550,000), due and payable in installments of Forty Five
Thousand Eight Hundred Thirty Three Dollars and Thirty Three Cents 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 HPI and any third party.
C. HPI 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.
D. HPI 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
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or willful misconduct by either party or (iii) the willful breach or repeated,
habitual neglect by 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.
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(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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and date above first written.
CONSULTANT:
Address: THE HALLWOOD GROUP INCORPORATED
0000 Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000 By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Vice President
HPI:
Address: HALLWOOD PETROLEUM, INC.
0000 X. Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000 By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
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