Second Amendment to Consulting Agreement
This Second Amendment to Consulting Agreement (the "2nd Amendment") is
made and entered into by and between Colmena Corp., a publicly held Delaware
corporation with a classes 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 National Quotation Bureau, LLC's Electronic Pink
Sheets" ("Colmena"); and, The Yankee Companies, Inc., a Florida corporation
("Yankees"; Colmena and Yankees being hereinafter collectively referred to as
the "Parties" and generically as a "Party").
Preamble :
WHEREAS, the Parties entered into a consulting agreement on or about
January 5, 1999, a copy of which is annexed hereto and made a part
hereof as exhibit 0.1 (the "Agreement"), supplemented and amended on or
about October 15, 1999 by a supplemental services agreement, a copy of
which is annexed hereto and made a part hereof as exhibit 0.2 (the "1st
Amendment;" the Agreement, as amended by the 1st Amendment being
hereinafter referred to as the "Amended Agreement"), pursuant to which
Yankees has provided substantial services to Colmena; and
WHEREAS, pursuant to the terms of the Amended Agreement Colmena will be
required, on and after January 4, 2000, to pay Yankees for its services
based on Yankees' standard hourly rates (currently $350 per hour for
Messrs. Tucker and Calvo, $200 per hour for its general counsel; $100
per hour for other corporate officers; $75 per hour for paralegal
personnel, $35 per hour for secretarial and clerical personnel) and its
standard document licensing fees, but Colmena will not have the cash
resources to make such payments during the foreseeable future; and
WHEREAS, Colmena requires substantial continuing assistance from
Yankees in order to complete the termination of all prior business
activities, settlement of its debts, liquidation of its assets;
reconstruction of its corporate and business records; completion of
financial statements required pursuant to Sections 12, 13 and 15(d) of
the Exchange Act; recruitment and retention of officers, directors,
employees, consultants and advisors; recruitment and coordination of
professional advisors, including, without limitation, auditors,
attorneys and transfer agents; development and effectuation of an
acquisition program designed to provide Colmena with a new business
purpose and profitable operations; and, development of relationships
providing Colmena with access to required capital; and
WHEREAS, Colmena desires to induce Yankees to continue providing
services under the Amended Agreement without payment of cash
compensation until after December 31, 2000; and
WHEREAS, Colmena desires to induce Yankees to lend it $40,000 which it
must obtain in order to pay for auditors and other expenses required to
correct its current deficiencies in filings with the United States
Securities and Exchange Commission (the "Commission"); and
WHEREAS, Colmena has offered Yankees the additional consideration set
forth below as an inducement to continue its activities on behalf of
Colmena and make the $40,000 loan; and
WHEREAS, Yankees has indicated that such proposal is acceptable,
provided that Colmena additionally pays: for Yankees' out of pocket
costs, as described in the Amended Agreement, for the services of
Yankees general counsel as general counsel to Colmena; and, for
paralegal, bookkeeping, secretarial and clerical services provided by
Yankees' personnel to and for the benefit of Colmena or for the costs
of subscriptions to periodicals and purchases of software used to
assist Colmena to comply with legal obligations, including, without
limitation, reorganization, corporate, employee benefit, securities or
tax laws; and
WHEREAS, Colmena finds such conditions acceptable:
NOW, THEREFORE, in consideration for the Parties' agreements set forth
herein and of 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:
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Witnesseth:
1. Yankees' Concession
(A) Yankees hereby agrees to waive its rights to hourly fee payments and
document licensing under the Amended Agreement until and including
December 31, 1999; provided that such waiver shall not pertain to:
(1) Yankees' out of pocket costs, as described in the Amended
Agreement;
(2) The services of Yankees general counsel as general counsel to
Colmena;
(3) Costs of subscriptions to periodicals and purchases of
software used to assist Colmena to comply with legal
obligations, including, without limitation, reorganization,
corporate, employee benefit, securities and tax laws; and
(4) Paralegal, bookkeeping, secretarial and clerical services
provided by Yankees' personnel to or for the benefit of
Colmena.
(B) To the extent that Colmena is unable to make payments for the expenses
excepted from Yankees' waiver in Section 1(A) of this 2nd Amendment,
Colmena hereby agrees that Yankees or its designees may, at their
election, accept payment therefor in Colmena securities of its choice
valued at 50% of the price last paid therefor prior to Yankees
election; provided that the determination as to price will take into
account whether or not the securities were freely tradeable under
applicable federal and state securities laws and pricing comparisons
will be based on securities with comparable trading status.
(C) Yankees hereby agrees to lend Colmena the sum of $40,000 at 8% interest
per annum, repayable within 30 days after demand therefor by Yankees,
secured by assets of Colmena selected by Yankees, and evinced by one or
more negotiable promissory notes executed by Colmena on a form of note
selected by Yankees, when and as required by Colmena, for the sole
purpose of paying expenses required to bring Colmena into compliance
with its reporting obligations under the Exchange Act, and expenses
incidental thereto which will not compromise Colmena's ability to pay
for expenses required to attain such compliance.
2. Compensation & Reimbursement
Colmena hereby agrees that in consideration for Yankees concessions and
agreements reflected in Section 1 above:
(A) The common stock purchase options granted to Yankees under Section
1.4(B) of the Amended Agreement are hereby amended as follows:
(1) The options will henceforth be extended to cover every class
of Colmena Capital Stock (the term "Capital Stock" being
defined for purposes of this Agreement as all equity
securities or securities convertible into equity securities or
exchangeable therefor, including, without limitation, common
stock, preferred stock, convertible debentures, options,
warrants, etc.) outstanding or Reserved (the term "Reserved,
as used in the Amended Agreement, as further amended by this
2nd Amendment, being defined as securities allocated under an
agreement, option, warrant or obligation for future issuance
pursuant to an obligation binding on Colmena under normal
circumstances);
(2) The quantity of Colmena's Capital Stock subject to the Yankees
Warrant is hereby increased from 51% of all of Colmena's
outstanding or Reserved common stock at the time exercise is
completed to 75% of all of Colmena's outstanding or Reserved
Capital Stock at the time exercise is completed, subject to
anti-dilutive rights for a period of three fiscal months
thereafter pursuant to which additional securities shall be
issued to the order of Yankees in such amounts as may be
required so that the securities issued under the Yankees
Warrant equal 75% of Colmena's Capital Stock outstanding or
Reserved at the end of the first three fiscal months following
issuance of the last unit of securities paid for by Yankees
under the Yankees Warrant;
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(3) The aggregate exercise price for the Yankees Warrant is hereby
increased from $40,000 to $80,000, the Parties acknowledging
that the Yankees Warrant has, as of the date of this 2nd
Amendment, been exercised by Yankees as to 6,000,000 shares of
Colmena's common stock for which it has paid $30,000, the
balance of the $50,000 exercise price being allocated to the
remaining securities issuable thereunder;
(4) The term of the Yankees Warrant is hereby extended until the
latter of December 31, 2002, or the 100th day after Colmena
registers the securities remaining unissued under the Yankees
Warrant in a manner permitting their resale to the public as
free trading securities in compliance with federal and state
securities laws to which they, Yankees and the purchasers may
be subject in conjunction therewith.
(B) Yankees shall have the preferential right to subscribe for Colmena
securities, in addition to those exercisable under the Yankees Warrant,
at a price equal to 50% of the price paid by any other subscribers to a
specific offering, limited offering or private placement, for any
securities that have not been subscribed for by other persons,
including Colmena's officers, directors or other stockholders, within
ten days before the end of a designated subscription period.
2.1 Survival of Non-amended Provisions; Interpretations
(A) Except as amended hereby or as required to fully implement the intent
of the amendments effected hereby, the Amended Agreement shall remain
in full force and effect.
(B) The Parties hereby agree that to the extent possible under generally
accepted accounting principals and the auditing rules of the Securities
and Exchange Commission, the compensation granted to Yankees under the
Amended Agreement, as amended hereby, shall not be interpreted to
require Colmena to treat non-cash compensation as though it had been
paid in cash, as an expense, and then the cash received had been
contributed by Yankees to Colmena as a capital contribution, and if
such interpretation cannot be legally avoided, the Parties agree to
negotiate in good faith to modify the terms of the Amended Agreement,
as amended hereby, so as to provide the compensation called for in a
manner that avoids such accounting treatment.
3. Miscellaneous
3.1 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:
The Yankee Companies, Inc.
2500 North Military Trail, Suite 225; Boca Raton, Florida 33431
Telephone (561) 998-2025; Fax (561) 998-3425
Attention: Leonard Miles Tucker, President
and
The Yankee Companies, Inc.
1941 Southeast 51st Terrace; Ocala, Florida 34471
Telephone (352) 694-9179; Fax (352) 694-9178
Attention: Vanessa H. Mitchem, Chief Administrative Officer
To Colmena:
Colmena Corp.
2500 North Military Trail, Suite 225-D; Boca
Raton, Florida 33487 Telephone (561)
226-2504; Fax (561) 998-3425 or at such
address, telephone and fax numbers
as are reflected on the SEC's EDGAR Internet site; and
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Colmena Corp.
3896 North Federal Highway; Lighthouse Point; Florida 33064
Telephone (954) 941-2280; Fax (954) 941-2013
Attention: Anthony Q. Joffe, 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 hereinabove
set forth.
3.2 Amendment.
No modification, waiver, amendment, discharge or change of the Amended
Agreement, as further amended by this 2nd Amendment, shall be valid unless the
same is in writing and signed by Parties.
3.3 Merger.
Solely to the extent inconsistent with the requirements of this 2nd
Amendment:
(A) All prior agreements whether written or oral are merged herein and
shall be of no force or effect except as provided hereby.
(B) Notwithstanding the foregoing, nothing in this 2nd Amendment is
intended by the Parties to affect the provisions of the 1st Amendment
pertaining to the Associate.
3.4 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.
3.5 Severability.
If any provision or any portion of any provision of the Amended
Agreement, as further amended by this 2nd Amendment, 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, at the
election of Yankees, the remaining portions of such provision and the remaining
provisions of the Amended Agreement, as further amended by this 2nd Amendment,
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.
3.6 Governing Law and Venue.
The Amended Agreement, as further amended by this 2nd Amendment, shall
be construed in accordance with the laws of the State of Delaware (both
substantive and procedural, other than choice of law provisions) but any proceed
ing arising between the Parties in any matter pertaining or related to the
Amended Agreement, as further amended by this 2nd Amendment, shall, to the
extent permitted by law, be held in Broward County, Florida.
3.7 Dispute Resolution in lieu of Litigation.
(A) In the event of any dispute arising under the Amended Agreement, as
further amended by this 2nd Amendment, 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:
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(1) (a) First, the issue shall be submitted to mediation
before a mediation service in Broward County, Florida
to be selected by lot from six alternatives to be
provided, three by Yankees and three by Colmena.
(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 Broward 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 equally by
the Parties involved.
(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 the
Amended Agreement, as further amended by this 2nd Amendment, or any
other matter arising from the Amended Agreement, as further amended by
this 2nd Amendment, 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 formal
proceedings are initiated.
3.8 Benefit of Agreement.
The terms and provisions of the Amended Agreement, as further amended
by this 2nd Amendment, shall be binding upon and inure to the benefit of the
Parties, jointly and severally, their successors, assigns, personal
representatives, estate, heirs and legatees.
3.9 Captions.
The captions in the Amended Agreement, as further amended by this 2nd
Amendment, are for convenience and reference only and in no way define,
describe, extend or limit the scope of the Amended Agreement, as further amended
by this 2nd Amendment, or the intent of any provisions hereof.
3.10 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.
3.11 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 the Amended
Agreement, as further amended by this 2nd Amendment.
3.12 Status.
Nothing in the Amended Agreement, as further amended by this 2nd
Amendment, shall be construed or shall constitute a partnership, joint venture,
employer-employee relationship, lessor-lessee relationship, or principal-agent
relationship.
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3.13 Counterparts.
(A) This 2nd Amendment 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.
3.14 License.
(A) (1) The Amended Agreement, as further amended by this 2nd
Amendment, 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) The Amended Agreement, as further amended by this 2nd
Amendment, shall not be construed more stringently or
interpreted less favorably against Yankees' based on
authorship.
(B) Colmena hereby acknowledges that Yankees is not a law firm and has not
provided it with any advice, legal or otherwise, in conjunction with
the Amended Agreement, as further amended by this 2nd Amendment, but
rather, has suggested that it rely solely on its own independent
officers, directors and advisors (other than Yankees) in evaluating or
interpreting the Amended Agreement, as further amended by this 2nd
Amendment.
In Witness Whereof, the Parties have executed this 2nd Amendment,
effective as of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
Colmena Corp.
----------------------------
____________________________ By: /s/ Anthony Q. Joffe
Anthony Q. Joffe, President
Dated: January 2, 2000
Attest: /s/ Vanessa H. Lindsey
Vanessa H. Lindsey, Secretary
The Yankee Companies, Inc.
----------------------------
____________________________ By: /s/ Leonard Tucker
Leonard Miles Tucker, President
Dated: January 2, 2000
Attest: /s/ William A. Calvo, III
William A. Calvo, III, Secretary
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