Strategic Consulting Agreement
This Consulting Agreement (the "Agreement") is made and entered into by and
between Colmena Corp. , a publicly held Delaware corporation with a class of
equity securities registered under Section 12(g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and currently trading on the over the
counter bulletin board operated by but not a part of NASDAQ (the "Client"); and,
The Yankee Companies, Inc., a Florida corporation ("Yankees"; the Client and
Yankees being hereinafter collectively referred to as the "Parties" and
generically as a "Party").
Preamble :
WHEREAS, the Client desires to enter into a new strategic consulting
agreement with Yankees, replacing the agreement in place since January 5, 1999
(the "Old Agreements"); and
WHEREAS, Yankees is agreeable to such change, provided that its rights to
Colmena Class A Warrants are not negatively affected thereby :
NOW, THEREFORE, in consideration for Yankees's agreement to render the
hereinafter described services as well as of the premises, the sum of TEN ($10)
DOLLARS, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the Parties, intending to be legally bound, hereby
agree as follows:
Witnesseth:
ARTICLE ONE
OBLIGATIONS OF THE PARTIES
1.1 Description of Services
(A) Yankees's areas of expertise include corporate structure, organization and
reorganization; mergers, acquisitions and divestitures; strategic corporate
development; corporate financial and equity analysis; market strategy
planning and implementation; corporate communication, financial public
relations and stockholder relations consulting; business plan development
and implementation; negotiation and implementation of acquisitions and
mergers; marketing sales and analysis; executive and professional
recruitment; coordination and supervision of professional services;
development and implementation of regulatory compliance procedures (the
"Services").
(B) During the Term of this Agreement (as hereinafter defined), Yankees shall
provide the Client with the Services, on a reasonable, as required basis,
consistent with Yankees's other business activities.
(C) Because of the Client's status under federal securities laws, in any
circumstances where Yankees is describing the securities of the Client to a
third Party, Yankees shall disclose to such person the compensation
received from the Client to the extent required under any applicable laws,
including, without limitation, Section 17(b) of the Securities Act of 1933,
as amended; however, the Parties acknowledge they do not contemplate that
Yankees shall be involved in any activities on behalf of the Client
requiring such descriptions or disclosures, or that the Services involve
any activities subject to regulation under federal or state securities laws
other than the prohibitions of the Foreign Corrupt Practices Act, except
for the introduction of the Client and its principals to licensed broker
dealers in securities, securities analysts and appropriate corporate
information and stockholder relations specialists.
1.2 Fiduciary Obligation to The Client
In rendering its services, Yankees shall not disclose to any third party
any confidential non_public information furnished by the Client or otherwise
obtained by it with respect to the Client.
Page 49
1.3 Limitations on Services
(A) The Parties recognize that certain responsibilities and obligations are
imposed by federal and state securities laws and by the applicable rules
and regulations of stock exchanges, the National Association of Securities
Dealers, Inc. (collectively with its subsidiaries being hereinafter
referred to as the "NASD"), in_house "due diligence" or "compliance"
departments of licensed securities firms, etc.; accordingly, Yankees agrees
that it will not release any information or data about the Client to any
selected or limited person(s), entity, or group if the Consultant is aware
that such information or data has not been generally released or
promulgated.
(B) Yankees shall restrict or cease, as directed by the Client, all efforts on
behalf of the Client, including all dissemination of information regarding
the Client, immediately upon receipt of instructions (in writing by fax or
letter) to that effect from the Client.
1.4 Consultant's Compensation
(A) Yankees will xxxx at its standard hourly rates for all work as to which a
prior written arrangement with different terms has not been entered into,
however, no hourly billable services will be provided except at the
Client's specific request and, the service of Yankees' directors, Messrs.
Xxxxxxx X. Xxxxx, III, and Xxxxxxx Xxxxx Xxxxxx, will be provided at the
fixed rate of $10,000 per month, in the aggregate, payment for which will
be deferred and accrued until adequate funds become available or this
Agreement is terminated, whichever shall first occur.
(B) In addition to the compensation described above with reference to services
during the Initial Term of this Agreement and whether or not the following
services are rendered during such Initial Term:
(1) In the event that Yankees arranges or provides funding for the Client
on terms more beneficial than those reflected in the Client's current
principal financing agreements, copies of which are included among the
Client's records available through the SEC's XXXXX web site, the
subject Consultant shall be entitled, at its election, to either:
(a) A fee equal to 25% of such savings, on a continuing basis; or
(b) If equity funding is provided though Yankees or any affiliates
thereof, a discount of 10% from the lowest price at which such
securities are offered to any other person for the subject equity
securities, if they are issuable as free trading securities, or,
a discount of 50% from the lowest price at which such securities
are offered to any other person for the subject equity
securities, if they are issuable as restricted securities (as the
term restricted is used for purposes of SEC Rule 144); and
(2) In the event that Yankees generates business for the Client, then, on
any sales resulting therefrom, Yankees shall be entitled to a
commission equal to 10% of the gross income derived by the Client
therefrom, on a continuing basis.
(3) In the event that Yankees or any affiliate thereof arranges for an
acquisition by the Client, then Yankees shall be entitled to
compensation equal to 10% of the compensation paid for such
acquisition, in addition to any compensation negotiated and received
from the acquired entity or its affiliates.
(C) The Client will assure that its legal counsel promptly prepares all reports
which then existing holders of the Client's securities (including Yankees,
its affiliates and successors in interest) are required to file with the
Securities and Exchange Commission as a result of the Client's reporting
status, including Securities and Exchange Commission Forms 3, 4 and 5,
Schedules 13(d) and Schedules 13(g), and shall submit all such reports to
the subject stockholders for prompt execution and timely filing with the
Securities and Exchange Commission.
Page 50
(D) (1) In addition to payment of fees, the Client will be responsible for
payment of all costs and disbursements associated with Yankees's
services either:
(a) Involving less than $50 per item and $200 in the aggregate during
the preceding 30 day period; or
(b) Reflected in an operating budget approved by the Client; or
(c) Approved in writing by the Client; provided, however, that the
refusal by the Client to approve expenditures required for the
proper performance of Yankees's services will excuse performance
of such services.
(2) All of Yankees's statements will be paid within 10 days after receipt.
(3) In the event additional time for payment is required, Yankees will
have the option of selling the account receivable and the Client
agrees to pay interest thereon at the monthly rate of 1%.
(4) In the event collection activities are required, the Client agrees to
pay all of Yankees's out of pocket costs associated therewith.
(5) There will be no change or waiver of the provisions contained herein,
unless such charge is in writing and signed by the Client and Yankees.
(E) (1) The rights to Class A Warrants, as well as rights to all other accrued
but unpaid compensation under the Old Agreements, shall survive the
entry into this Agreement and are hereby ratified and confirmed, in
accordance with their terms immediately prior to execution of this
Agreement.
(2) The Client hereby confirms and acknowledges that Yankees has fully
complied with its obligations under the Old Agreements, that all of
Yankees rights thereunder are fully vested, and that all compensation
payable thereunder has been fully earned.
1.5 Client's Commitments
(A) (1) All work requiring legal review will be submitted for approval by the
Client to the Client's legal counsel prior to its use.
(2) Final drafts of any matters prepared for use by Yankees in conjunction
with the provision of the Services will be reviewed by the Client and,
if legally required, by the Client's legal counsel, to assure that:
(a) All required information has been provided;
(b) All materials are presented accurately; and,
(c) That no materials required to render information provided "not
misleading" are omitted. (2) Only after such review and approval
by the Client and, if required, the Client's legal counsel, will
any documents be filed with regulatory agencies or provided to
Yankees or third parties.
(3) (a) Financial data will be reviewed by competent, independent,
certified public accountants to be separately retained by the
Client.
(b) Such accountants will be required to review and approve all
financially related filings, prior to release to Yankees, other
third parties or submission to the appropriate regulatory
authorities.
Page 51
(B) (1) The Client shall supply Yankees on a regular and timely basis with all
approved data and information about the Client, its management, its
products, and its operations and the Client shall be responsible for
advising Yankees of any fact which would affect the accuracy of any
prior data and information supplied to Yankees.
(2) The Client shall use its best efforts to promptly supply Yankees with
full and complete copies of all filings with all federal and state
securities agencies; with full and complete copies of all shareholder
reports and communications whether or not prepared with Yankees's
assistance, with all data and information supplied to any analyst,
broker_dealer, market maker, or other member of the financial
community; and with all product/services brochures, sales materials,
etc.
(3) The Client shall promptly notify Yankees of the filing of any
registration statement for the sale of securities and/or of any other
event which triggers any restrictions on publicity.
(4) The Client shall be deemed to make a continuing representation of the
accuracy of any and all material facts, material, information, and
data which it supplies to Yankees and the Client acknowledges its
awareness that Yankees will rely on such continuing representation in
performing its functions under this Agreement.
(5) Yankees, in the absence of notice in writing from the Client, may rely
on the continuing accuracy of material, information and data supplied
by the Client.
ARTICLE TWO
TERM, RENEWALS & EARLIER TERMINATION
2.1 Term
This Agreement shall be for an initial term of 365 days, commencing on the
date of its complete execution by all Parties, as evinced in the execution page
hereof (the "Initial Term").
2.2 Renewals
This Agreement shall be renewed automatically, after expiration of the
original term, on a continuing annual basis, unless the Party wishing not to
renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before the 30th day
prior to termination of the then current term.
2.3 Final Settlement
(A) Upon termination of this Agreement and payment to Yankees of all amounts
due it hereunder, Yankees or its representative shall execute and deliver
to the Client a receipt for such sums and a release of all claims, except
such claims as may have been submitted pursuant to the terms of this
Agreement and which remain unpaid, and, shall forthwith tender to the
Client all records, manuals and written procedures, as may be desired by
the Client for the continued conduct of its business; and
(B) The Client or its representative shall execute and deliver to Yankees a
receipt for all materials returned and a release of all claims, except such
claims as may have been submitted pursuant to the terms of this Agreement
and which remain unpaid, and, shall forthwith tender to Yankees all
records, manuals and written procedures, as may be desired by Yankees for
the continued conduct of its business.
ARTICLE THREE
CONSULTANT'S CONFIDENTIALITY & COMPETITION COVENANTS
3.1 General Provisions
(A) Yankees acknowledges that, in and as a result of its entry into this
Agreement, it will be making use of confidential information of special and
unique nature and value relating to such matters as the Client's trade
secrets, systems, procedures, manuals, confidential reports; consequently,
as material inducement to the entry into this Agreement by the Client,
Yankees hereby covenants and agrees that it shall not, at anytime during
the term of this Agreement, any renewals thereof and for two years
following the terms of this Agreement, directly or indirectly, use, divulge
or disclose, for any purpose whatsoever, any of such confidential
information which has been obtained by or disclosed to it as a result of
its entry into this Agreement or provision of services hereunder.
Page 52
(B) In the event of a breach or threatened breach by Yankees of any of the
provisions of this Article Three, the Client, in addition to and not in
limitation of any other rights, remedies or damages available to the
Client, whether at law or in equity, shall be entitled to a permanent
injunction in order to prevent or to restrain any such breach by such
Consultant, or by its partners, directors, officers, stockholders, agents,
representatives, servants, employers, employees, affiliates and/or any and
all persons directly or indirectly acting for or with it.
3.2 Special Remedies
In view of the irreparable harm and damage which would undoubtedly occur to
the Client and its clients as a result of a breach by Yankees of the covenants
or agreements contained in this Article Three, and in view of the lack of an
adequate remedy at law to protect the Client's interests, Yankees hereby
covenants and agrees that the Client shall have the following additional rights
and remedies in the event of a breach hereof:
(A) Yankees hereby consents to the issuance of a permanent injunction enjoining
it from any violations of the covenants set forth in this Article Three;
and
(B) Because it is impossible to ascertain or estimate the entire or exact cost,
damage or injury which the Client or its clients may sustain prior to the
effective enforcement of such injunction, Yankees hereby covenants and
agrees to pay over to the Client, in the event it violates the covenants
and agreements contained in this Article Three, the greater of:
(1) Any payment or compensation of any kind received by it because of such
violation before the issuance of such injunction, or
(2) The sum of One Thousand Dollars per violation, which sum shall be
liquidated damages, and not a penalty, for the injuries suffered by
the Client or its clients as a result of such violation, the Parties
hereto agreeing that such liquidated damages are not intended as the
exclusive remedy available to the Client for any breach of the
covenants and agreements contained in this Article Three, prior to the
issuance of such injunction, the Parties recognizing that the only
adequate remedy to protect the Client and its clients from the injury
caused by such breaches would be injunctive relief.
3.3 Cumulative Remedies
Yankees hereby irrevocably agrees that the remedies described in this
Article Three shall be in addition to, and not in limitation of, any of the
rights or remedies to which the Client and its clients are or may be entitled
to, whether at law or in equity, under or pursuant to this Agreement.
3.4 Acknowledgment of Reasonableness
(A) Yankees hereby represents, warrants and acknowledges that its members or
officers and directors have carefully read and considered the provisions of
this Article Three and, having done so, agrees that the restrictions set
forth herein are fair and reasonable and are reasonably required for the
protection of the interests of the Client, its members, officers,
directors, consultants, agents and employees; consequently, in the event
that any of the above_described restrictions shall be held unenforceable by
any court of competent jurisdiction, Yankees hereby covenants, agrees and
directs such court to substitute a reasonable judicially enforceable
limitation in place of any limitation deemed unenforceable and, Yankees
hereby covenants and agrees that if so modified, the covenants contained in
this Article Three shall be as fully enforceable as if they had been set
forth herein directly by the Parties.
(B) In determining the nature of this limitation, Yankees hereby acknowledges,
covenants and agrees that it is the intent of the Parties that a court
adjudicating a dispute arising hereunder recognize that the Parties desire
that these covenants not to compete or circumvent be imposed and maintained
to the greatest extent possible.
3.5 Exclusivity
Yankees shall not be required to devote all of its business time to the
affairs of the Client, rather it shall devote such time as it is reasonably
necessary in light of its other business commitments.
Page 53
ARTICLE FOUR
CLIENT'S CONFIDENTIALITY & COMPETITION COVENANTS
4.1 General Prohibitions
(A) The Client acknowledges that, in and as a result of its engagement of
Yankees, the Client will be making use of confidential information of
special and unique nature and value relating to such matters as Yankees's
business contacts, professional advisors, trade secrets, systems,
procedures, manuals, confidential reports, lists of clients, potential
customers and funders; consequently, as material inducement to the entry
into this Agreement by Yankees, the Client hereby covenants and agrees that
it shall not, at anytime during the term of this Agreement, any renewals
thereof an for two years following the terms of this Agreement, directly or
indirectly, use, divulge or disclose, for any purpose whatsoever, any of
such confidential information which has been obtained by or disclosed to it
as a result of its employment of Yankees, or Yankees's affiliates.
(B) In the event of a breach or threatened breach by the Client of any of the
provisions of this Article Four, Yankees, in addition to and not in
limitation of any other rights, remedies or damages available to Yankees,
whether at law or in equity, shall be entitled to a permanent injunction in
order to prevent or to restrain any such breach by the Client, or by the
Client's partners, directors, officers, stockholders, agents,
representatives, servants, employers, employees, affiliates and/or any and
all persons directly or indirectly acting for or with it.
4.2 Special Remedies
In view of the irreparable harm and damage which would undoubtedly occur to
Yankees as a result of a breach by the Client of the covenants or agreements
contained in this Article Four, and in view of the lack of an adequate remedy at
law to protect Yankees's interests, the Client hereby covenants and agrees that
Yankees shall have the following additional rights and remedies in the event of
a breach hereof:
(A) The Client hereby consents to the issuance of a permanent injunction
enjoining it from any violations of the covenants set forth in this Article
Four is; and
(B) Because it is impossible to ascertain or estimate the entire or exact cost,
damage or injury which Yankees may sustain prior to the effective
enforcement of such injunction, the Client hereby covenants and agrees to
pay over to Yankees, in the event it violates the covenants and agreements
contained in this Article Four, the greater of:
(1) Any payment or compensation of any kind received by it because of such
violation before the issuance of such injunction, or
(2) The sum of One Thousand Dollars per violation, which sum shall be
liquidated damages, and not a penalty, for the injuries suffered by
Yankees as a result of such violation, the Parties hereto agreeing
that such liquidated damages are not intended as the exclusive remedy
available to Yankees for any breach of the covenants and agreements
contained in this Article Four, prior to the issuance of such
injunction, the Parties recognizing that the only adequate remedy to
protect Yankees from the injury caused by such breaches would be
injunctive relief.
4.3 Cumulative Remedies
The Client hereby irrevocably agrees that the remedies described in this
Article Four shall be in addition to, and not in limitation of, any of the
rights or remedies to which Yankees is or may be entitled to, whether at law or
in equity, under or pursuant to this Agreement.
4.4 Acknowledgment of Reasonableness
(A) The Client hereby represents, warrants and acknowledges that its officers
and directors have carefully read and considered the provisions of this
Article Four and, having done so, agree that the restrictions set forth
herein are fair and reasonable and are reasonably required for the
protection of the interests of Yankees, its members, officers, directors,
consultants, agents and employees; consequently, in the event that any of
the above_described restrictions shall be held unenforceable by any court
of competent jurisdiction, the Client hereby covenants, agrees and directs
such court to substitute a reasonable judicially enforceable limitation in
place of any limitation deemed unenforceable and, the Client hereby
covenants and agrees that if so modified, the covenants contained in this
Article Four shall be as fully enforceable as if they had been set forth
herein directly by the Parties.
Page 54
(B) In determining the nature of this limitation, the Client hereby
acknowledges, covenants and agrees that it is the intent of the Parties
that a court adjudicating a dispute hereunder recognize that the Parties
desire that these covenants not to compete or circumvent be imposed and
maintained to the greatest extent possible.
ARTICLE FIVE
MISCELLANEOUS
5.1 Notices
All notices, demands or other written communications hereunder shall be in
writing, and unless otherwise provided, shall be deemed to have been duly given
on the first business day after mailing by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
To Yankees:2500 Xxxxx Xxxxxxxx Xxxxx,
Xxxxx 000;
Xxxx Xxxxx, Xxxxxxx 00000
Telephone (000) 000-0000; Fax (000) 000-0000
Attention: Xxxxxxx Xxxxx Xxxxxx, President
and
0000 Xxxxxxxxx 00xx Xxxxxxx;
Xxxxx, Xxxxxxx 00000
Telephone (000) 000-0000; Fax (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Chief Administrative Officer
To the Client:
Colmena Corp.
At such address, telephone and fax numbers
as are reflected on the SEC's XXXXX Internet site;
Attention: Xxxxxxx X. Xxxxx, President & Chief Executive Officer
in each case, with copies to such other address or to such other persons as any
Party shall designate to the others for such purposes in the manner herein above
set forth.
5.2 Amendment
No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is in writing and signed by Parties.
5.3 Merger
(A) This instrument, together with the instruments referred to herein, contains
all of the understandings and agreements of the Parties with respect to the
subject matter discussed herein.
(B) All prior agreements whether written or oral are merged herein and shall be
of no force or effect.
5.4 Survival
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and shall be effective
regardless of any investigation that may have been made or may be made by or on
behalf of any Party.
5.5 Severability
If any provision or any portion of any provision of this Agreement, other
than a conditions precedent, if any, or the application of such provision or any
portion thereof to any person or circumstance shall be held invalid or
unenforceable, the remaining portions of such provision and the remaining
provisions of this Agreement or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those to which it is held invalid or unenforceable, shall not be
affected thereby.
Page 55
5.6 Governing Law and Venue
This Agreement shall be construed in accordance with the laws of the State
of Florida and any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in Palm Beach County, Florida.
5.7 Dispute Resolution in lieu of Litigation
(A) In the event of any dispute arising under this Agreement, or the
negotiation thereof or inducements to enter into the Agreement, the dispute
shall, at the request of any Party, be exclusively resolved through the
following procedures:
(1) (a) First, the issue shall be submitted to mediation before a
mediation service in Palm Beach County, Florida to be selected by
lot from six alternatives to be provided, three by Yankees and
three by the Client.
(b) The mediation efforts shall be concluded within ten business days
after their initiation unless the Parties unanimously agree to an
extended mediation period;
(2) In the event that mediation does not lead to a resolution of the
dispute then at the request of any Party, the Parties shall submit the
dispute to binding arbitration before an arbitration service located
in Palm Beach County, Florida, to be selected by lot, from six
alternatives to be provided, in the manner set forth above for
selection of a mediator;
(3) (A) Expenses of mediation shall be borne by the Parties equally if
successful but if unsuccessful, expenses of mediation and of
arbitration shall be borne by the Party or Parties against whom
the arbitration decision is rendered.
(B) If the terms of the arbitral award do not establish a prevailing
Party, then the expenses of unsuccessful mediation and
arbitration shall be borne 1/2 by the Client and 1/2 by Yankees.
(B) Judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
(C) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, the prevailing
Party shall be entitled to recover its costs and expenses, including
reasonable attorneys' fees up to and including all negotiations, trials and
appeals, whether or not litigation is initiated.
5.8 Benefit of Agreement
The terms and provisions of this Agreement shall be binding upon and inure
to the benefit of the Parties, jointly and severally, their successors, assigns,
personal representatives, estate, heirs and legatees.
5.9 Captions
The captions in this Agreement are for convenience and reference only and
in no way define, describe, extend or limit the scope of this Agreement or the
intent of any provisions hereof.
5.10 Number and Gender
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the Party or
Parties, or their personal representatives, successors and assigns may require.
5.11 Further Assurances
The Parties hereby agree to do, execute, acknowledge and deliver or cause
to be done, executed, acknowledged or delivered and to perform all such acts and
deliver all such deeds, assignments, transfers, conveyances, powers of attorney,
assurances, stock certificates and other documents, as may, from time to time,
be required herein to effect the intent and purpose of this Agreement.
Page 56
5.12 Status
(A) Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, employer_employee relationship, lessor_lessee
relationship, or principal_agent relationship.
(B) Throughout the term of this Agreement, Yankees shall serve an independent
contractor, as that term is defined by the United States Internal Revenue
Service, and in conjunction therewith, shall be responsible for all of his
own tax reporting and payment obligations.
(C) In amplification of the foregoing, Yankees shall, subject to reasonable
reimbursement on a pre_approved budgetary basis, be responsible for
providing its own office facilities and supporting personnel.
5.13 Counterparts
(A) This Agreement may be executed in any number of counterparts delivered
through facsimile transmission.
(B) All executed counterparts shall constitute one Agreement notwithstanding
that all signatories are not signatories to the original or the same
counterpart.
5.14 License
(A) (1) This Agreement is the property of Yankees.
(2) The use hereof by the Parties is authorized hereby solely for purposes
of this transaction and, the use of this form of agreement or of any
derivation thereof without Yankees' prior written permission is
prohibited.
(3) This Agreement shall not be construed more stringently or interpreted
less favorably against Yankees' based on authorship.
(B) Each of the Parties hereby acknowledge that Yankees is not a law firm and
has not provided it with any advice, legal or otherwise, in conjunction
with this Agreement, but rather, has suggested that it rely solely on its
own experience and advisors in evaluating or interpreting this Agreement.
In Witness Whereof, the Parties have executed this Agreement, effective
as of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
Colmena Corp.
/s/ Xxxxxxx X. Xxxxx /s/
By:
/s/ Xxxxxxx X. Xxxxx /s/
Xxxxxxx X. Xxxxx, President
Dated: January 4,2001
The Yankee Companies, Inc.
/s/ Xxxxxxx Xxxxx Xxxxxx
By:
/s/ Xxxxxxx Xxxxx Xxxxxx /s/
Xxxxxxx Xxxxx Xxxxxx, President
Dated: January 4, 2001
Page 57
