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EXHIBIT 10.61
THE HALLWOOD GROUP INCORPORATED
FINANCIAL CONSULTING AGREEMENT
THIS FINANCIAL CONSULTING AGREEMENT (the "Agreement"), made and entered
into as of the 30th day of June, 1994, by and between THE HALLWOOD GROUP
INCORPORATED, a Delaware corporation (the "Consultant") and HALLWOOD PETROLEUM,
INC., a Delaware corporation ("HPI").
WITNESSETH:
WHEREAS, HPI, on behalf of its affiliates, 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 CORPORATION, a Texas corporation ("HEC"),
HALLWOOD ENERGY PARTNERS, L.P., a Delaware limited partnership (the
"Partnership"), HALLWOOD CONSOLIDATED RESOURCES CORPORATION, a Delaware
corporation ("HCRC"), or their affiliates, and any third parties (HPI, HEC, HEP
and HCRC and their affiliated entities are sometimes referred to in this
Agreement as the "Energy Companies");
WHEREAS, the Energy Companies desire to draw upon and benefit from the
financial knowledge and expertise of Consultant or its agents and Consultant
desires to consult with the Energy Companies and be available therefor.
NOW, THEREFORE, for and 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:
Section 1. Appointment. HPI hereby appoints and employs the Consultant to
act as its financial advisor and consultant upon and subject to the terms and
conditions hereinafter set forth, and Consultant hereby accepts such
appointment and undertakes to advise and consult with HPI during the term of
this Agreement upon and subject to the terms and conditions hereinafter set
forth.
Section 2. Term. The services of the Consultant under this Agreement shall
be for a term commencing on the date of execution of this Agreement and
expiring June 30, 1997 (the "Expiration Date") unless earlier terminated by the
Consultant for any reason upon thirty (30) days' written notice to HPI.
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Section 3. Duties of the Consultant. The Consultant shall furnish and
perform international consulting and advisory services to the Energy Companies
to enable such entities to: (i) render assistance in the implementation of
plans of financial restructuring of unrelated companies; (ii) effect
acquisitions by the Energy Companies of oil or gas interests or mergers of the
Energy Companies with other entities; and (iii) assist and consult with the
Energy Companies in structuring and obtaining financing for their activities,
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 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 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 financial 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.
Section 4. Compensation.
A. As compensation for the Consultant's services, HPI agrees to pay to
the Consultant a total of Nine Hundred Thousand Dollars ($900,000), due and
payable in Three Hundred Thousand Dollar ($300,000) installments on June 30 of
each of 1994, 1995 and 1996.
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 Energy Companies 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 Energy 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.
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Section 5. 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.
Section 6. Confidentiality. The Consultant recognizes and acknowledges
that confidential information of various kinds may exist, from time to time,
with respect to the business of the Energy Companies. Accordingly, the
Consultant covenants on behalf of itself and its agents, if any, that, (a)
except with the prior written consent of HEC, they shall at all times keep
confidential and not divulge, furnish or make accessible to anyone (except
HEC's or the Partnership's authorized representatives), any confidential
information to which the Consultant or its agents have been or shall become
privy relating to the business of HEC, the Partnership or any of their
affiliates and, (b) except with the prior written consent of HCRC, they 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 or its agents have been or shall become privy relating
to the business of HCRC or any of its affiliates. The provisions of this
Section 6 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, or (iii) Consultant or its agents are required by law to disclose
such information to any person.
Section 7. 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 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.
Section 8. Assignment. Neither party hereto may assign, without the other
party's prior written consent, this Agreement, or any fight or obligation
hereunder, and any and all assignments without such prior written consent shall
be null and void, except that with the consent of HPI the Consultant may
designate agents to perform its obligations under this Agreement.
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Section 9. Miscellaneous.
A. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas, other than the conflicts of
laws provisions of such laws.
B. Headings. The descriptive headings for the several sections of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
C. Severability. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained in this Agreement.
D. Entire Contract. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto and contains
all of the covenants and agreements between the parties. In particular, this
Agreement supersedes the Financial Consulting Agreement between the parties
dated June 30, 1993, which Agreement is no longer in effect.
E. Amendments. This Agreement may not be modified, altered, amended,
waived or terminated orally, unless in writing signed by the parties hereto.
F. Notices. All communications to be given or made pursuant to this
Agreement shall be in writing and shall be deemed to have been duly given or
made if mailed by registered or certified mail, postage prepaid, addressed to
the address set forth opposite each party's name below, or in such other
reasonable manner as HPI or the Consultant, as the case may be, shall have
previously designated in writing to the other.
G. Execution in Counterparts. This Agreement may be executed in
counterparts, each to constitute an original, but both in the aggregate to
constitute one agreement as executed.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
CONSULTANT:
Address: THE HALLWOOD GROUP INCORPORATED
3710 Rawlins
Suite 1500
Dallas, Texas 75219 By:/s/ WILLIAM L. GUZZETTI
Name: William L. Guzzetti
Title: Executive Vice President
HPI:
Address: HALLWOOD PETROLEUM, INC.
4582 S. Ulster Street Parkway
Suite 1700
Denver, Colorado 80237 By: /s/ RUSSELL P. MEDUNA
Name: Russell P. Meduna
Title: Executive Vice President
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