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EXHIBIT 10.14
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:
i. 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.
ii. 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
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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 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.
iii. 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
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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 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 2 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.
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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 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.
(i) 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.
(ii) 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.
(iii) 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.
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(iv) 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.
(v) 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.
(vi) 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.
(vii) 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.
(viii) Amendments. This Agreement may not be modified, altered,
amended, waived or terminated orally, unless in writing signed by the parties
hereto.
* * * * *
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and date above first written.
CONSULTANT:
Address: THE HALLWOOD GROUP INCORPORATED
3710 Rawlins
Suite 1500
Dallas, Texas 75219 By: /s/Melvin J. Melle
Melvin J. Melle, Vice President
HPI:
Address: HALLWOOD PETROLEUM, INC.
4582 S. Ulster Street Parkway
Suite 1700
Denver, Colorado 80237 By: /s/William L. Guzzetti
William L. Guzzetti, President
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