<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 13, 1998
HARVARD SCIENTIFIC CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 0-28392 88-0226455
(STATE OR OTHER (COMMISSION FILE (I.R.S. EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION NO.)
INCORPORATION)
100 NORTH ARLINGTON AVENUE, SUITE 380, RENO, NEVADA 89501
- --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (702) 796-1173
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
1
<PAGE>
Item 5. Other Events
On January 13, 1998, Dr. Jackie R. See and Mr. Thomas E. Waite
("Investors") entered into an agreement ("Agreement", a copy of which is an
exhibit hereto) to provide equity financing to registrant, Harvard Scientific
Corp. ("Harvard") prior to January 1, 1999 that may aggregate $10,000,000. This
investment in common stock ("Common") of Harvard is to be made in tranches of
$500,000 to $2,000,000 each. Dr. See and Mr. Waite constitute all the directors
of Harvard, Dr. See being a consultant to Harvard and its Director of Research,
and Mr. Waite being Harvard's President and Chief Executive Officer.
Under the Agreement, the Investors are to invest an initial tranche when
the maximum number of shares of Common issuable under the Agreement have been
registered under the Securities Act of 1933 and have been qualified or
registered under the laws of any other jurisdiction as to which the Investors my
reasonably request. Subsequent tranche purchases are at the sole option of the
Investors. The price per share for the initial investment of up to $5,000,000
(only $500,000 of which the Investors are required to make) is $0.3164 per share
("Acquisition Price"), which is the average closing bid price of a share of
Common on the NASD OTC Electronic Bulletin Board for the 10 trading days ending
January 12, 1998, the day before the Agreement was executed by the parties. The
price for the next investment of up to $2,500,000 (none of which the Investors
are required to make) is $200% of the Acquisition Price, or $0.6328 per share,
and the price of the last investment of up to $2,500,000 (none of which the
Investors are required to make) is $1.2656 per share. The results of the
possible investments may be summarized as follows:
<TABLE>
<CAPTION>
Required Investment of Investment of Investment of
Investor Investment of $5,000,000 $7,500,000 $10,000,000
- -------- $500,000 ---------- ---------- -----------
--------
Average Average Average Average
Price Price Price Price
Per Number Per Number Per Number of Per Number of
Share of Shares Share of Shares Share Shares Share Shares
----- --------- ----- --------- ----- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dr. See $0.3164 790,139 $0.3164 7,901,391 $0.3797 9,876,738 $0.4602 10,864,412
Mr. Waite $0.3164 790,139 $0.3164 7,901,391 $0.3797 9,876,738 $0.4602 10,864,412
------- --------- --------- ----------
Total $0.3164 1,580,278 $0.3164 15,802,782 $0.3797 19,753,477 $0.4602 21,728,824
========= ========== ========== ==========
</TABLE>
Dr. See currently owns 3,150,000 shares of Common and may be deemed to own
beneficially 11,717,500 shares of Common, including 7,467,500 shares owned by
Bio-Sphere Technologies, Inc., of which Dr. See is a controlling person, and
1,100,000 shares owned by the Wassgren Anita See Trust (Anita See being Dr.
See's wife), of which trust Dr. See disclaims beneficial ownership. Such
11,717,500 shares excludes 2,750,000 shares owned by his adult children who do
not reside with him and 4,000,000 shares owned by Mr. Waite, over which Dr. See
has no control, although he and Mr. Waite may be considered to be a group as a
2
<PAGE>
result of the acquisition of shares pursuant to the Agreement. Mr. Waite
currently owns 4,000,000 shares of Common, excluding the 11,717,500 shares owned
by Dr. See, Bio-Sphere Technologies, Inc. and the Wassgren Anita See Trust, over
which Mr. Waite has no control, even though he and Dr. See may be considered to
be a group, as noted above. Harvard currently has 34,477,437 shares of Common
outstanding, and additional shares are issuable upon conversion of Harvard's 6%
Convertible Debentures currently outstanding in the principal amount of
$2,550,000 (with accrued interest of $129,107 as at January 23, 1998), which
number of shares would be 4,153,645 shares if such Debentures were converted
in full as of January 23, 1998.
The following table summarizes these current holdings of Dr. See and Mr.
Waite and indicates their holdings on a pro forma basis, assuming a minimum
required investment of $500,000 by the Investors, in the first instance, and a
maximum possible investment of $10,000,000 by the Investors, in the second
instance. The number of shares of Common held, and the percentage thereof of the
total outstanding, are set forth on the assumption that the Investors sell no
Common owned by them, although, as noted below the Investors may well effect
sales of Common in connection with the equity financing contemplated by the
Agreement:
<TABLE>
<CAPTION>
Stock Assuming Minimum Assuming Maximum
Control Current Holdings $500,000 Investment $10,000,000 Investment
------- ---------------- ------------------- ----------------------
No. of Percentage No. of Percentage No. of Percentage
Shares ---------- Shares Shares ----------
------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Dr. See 11,717,500 33.99% 12,507,639 34.69% 22,581,912 40.18%
Mr. Waite 4,000,000 11.60% 4,790,139 13.28% 14,864,412 26.45%
========= ====== ========= ====== ========== ======
See & Waite 15,717,500 45.27% 17,297,778 47.97% 37,446,324 66.62%
========== ====== ========== ====== ========== ======
Total Stock 34,477,437 100.00% 36,057,715 100.00% 56,206,261 100.00%
========== ======= ========== ======= ========== =======
</TABLE>
It is contemplated that Dr. See and Mr. Waite will participate equally in
each purchase of shares under the Agreement, but it is possible that one of them
may advance funds on a short term basis to the other in connection with any such
purchase. Any shares acquired by Dr. See or Mr. Waite under the Agreement (as
well as any other shares of Harvard they may own) may be disposed of, or used as
collateral for borrowings, by Dr. See or Mr. Waite at any time for purposes
unrelated to the purchase of shares under the Agreement.
In purchasing shares under the Agreement, Dr. See and Mr. Waite may use
their personal funds, borrow funds from third parties, dispose of assets they
own to realize funds, or any combination of such methods. Any borrowing may be
secured by assets of Dr. See and Mr. Waite, including shares of Harvard common
stock now owned by them and, after the initial tranche, shares acquired pursuant
to the Agreement. There can be no assurance that any such borrowing or sale of
assets will be successful in producing adequate funds to complete the full
$10,000,000 financing or any part thereof (other than the initial $500,000, for
which the Investors have adequate independent assets, although they may engage
in sales or borrowings, as set forth above, in connection therewith.)
Among the assets that may be disposed of to produce funds to acquire shares
under the Agreement are shares of Harvard owned by Dr. See and Mr. Waite
including, after the initial tranche, shares acquired pursuant to the Agreement.
In this regard, shares of Common now owned directly by Dr. See and Mr. Waite
(excluding shares of Common otherwise attributable to them), or 3,150,000 shares
owned by Dr. See and 4,000,000 shares owned by Mr. Waite, are subject to
registration rights under the consulting agreement with Dr. See and the
employment agreement with Mr. Waite, respectively. Both Dr. See and Mr. Waite
3
<PAGE>
have exercised these rights, so that Harvard has commenced the preparation of a
registration statement under the Securities Act of 1933 covering such shares,
which statement, if it becomes effective, will allow the sale or pledge of such
shares without restriction, subject to applicable securities laws of the states
and other jurisdictions.
Because the Investors comprise the Board of Directors of Harvard, Harvard
is seeking a fairness opinion as to the transaction contemplated by the
Agreement. Harvard has retained H D Brous & Co., Inc., a New York Stock Exchange
firm, to render such an opinion. If for any reason the transaction contemplated
by the Agreement is not confirmed as fair to Harvard, the parties will
restructure the transaction in a manner so that a fairness opinion can be given.
In addition, Harvard plans to submit the Agreement and the transaction
contemplated therein to its shareholders at a meeting called for that purpose
(and, possibly, other purposes). In view of the number of shares of Common
controlled by the Investors, both of whom have indicated that they will vote in
favor of the transaction, it is expected that the Agreement and the transactions
contemplated therein will be approved by the shareholders.
Harvard estimates that the Phase 2 and Phase 3 trials necessary to gain
approval from the Food and Drug Administration of its principal product under
development, PaGE-1, a therapeutic treatment for male erectile dysfunction, will
require approximately $10,000,000. There is no assurance that such approval will
be forthcoming, although Harvard believes that it will be successful in
obtaining approval. The funds raised pursuant to the Agreement well may not be
sufficient, with the other costs of Harvard's operations and the possible
redemption of Harvard's 6% Convertible Debentures referred to above, to complete
the Phase 2 and Phase 3 trials. In such a case, additional investment into
Harvard would be required if the trials are to be completed. There can be no
assurance that any such additional investment will be forthcoming or, if
additional investment is forthcoming, that it will be on terms acceptable to
Harvard.
4
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following is an index of the exhibits filed herewith:
99.1 Financing Agreement dated January 13, 1998 between Harvard
Scientific Corp. and Dr. Jackie R. See and Mr. Thomas E. Waite.
99.2 Consulting Agreement dated April 19, 1996 between Jackie R. See and
Harvard Scientific Corp. (Incorporated by reference to Exhibit 10.1 to
Harvard's Registration Statement on Form SB-2 filed on April 21, 1997,
registration number 333-25647).
99.2a Memorandum of Agreement, dated May 15, 1997, amending Consulting
Agreement between Harvard and Dr. See (Incorporated by reference to
Exhibit 10.1a to Harvard's Registration Statement on Form SB-2, filed
with Amendment No. 1 thereto filed June 24, 1997, registration number
333-25647).
99.2b Memorandum to Consulting Agreement dated January 21, 1998 as of
January 4, 1998 between Dr. Jackie R. See and Harvard.
99.3 Employment Agreement dated January 5, 1998 between Thomas E. Waite
and Harvard.
SIGNATURES
----------
HARVARD SCIENTIFIC CORP.
/s/ THOMAS E. WAITE
-------------------
Thomas E. Waite, President
5
<PAGE>
Harvard Scientific Corp.
FINANCING AGREEMENT
JANUARY 13, 1998
Harvard Scientific Corp. ("Harvard") has requested that Dr. Jackie R. See
and Mr. Thomas E. Waite ("Investors") provide equity financing of up to
$10,000,000 to be made in tranches ("Tranches") of $500,000 to $2,000,000. The
Investors have agreed to do so on the following terms:
Initial Funding: An initial Tranche to be made upon the effectiveness of the
registration statement referred to below to purchase shares of Harvard's Common
Stock ("Common") at $0.3164 per share ("Acquisition Price"), which is the
average closing bid price of a share of Common for the 10 trading days ending
January 12, 1998.
Subsequent Funding: The Investors will have the option, acting in their sole
discretion and from time to time as they see fit, to purchase additional Common
in Tranches up to an aggregate of $10,000,000 purchase price (including the
Initial Funding), prior to January 1, 1999. The price for the first $5,000,000
of funding (Including the Initial Funding) will be at the Acquisition Price, the
price for the next $2,500,000 of funding will be at 200% of the Acquisition
Price, or $0.6328 per share, and the price for the next $2,500,000 of funding
will be at 400% of the Acquisition Price, or $1.2656 per share.
Registration: Harvard will cause all Shares acquirable by the Investors as
provided herein to be registered as promptly as practicable under the Securities
Act of 1933 and to be qualified or registered under the laws of any other
jurisdiction as to which the Investors may reasonably request. As part of the
consideration to the Investors hereunder (to the extent the Investors do not
otherwise have registration rights), Harvard will also cause all Shares
otherwise owned by the Investors to be registered under the Securities Act of
1933 and to be qualified or registered under the laws of any other jurisdiction
as to which the Investors may reasonably request.
Fairness Opinion: Because the Investors comprise the Board of Directors that
must approve the transaction, Harvard will seek a fairness opinion as to the
transaction from an established banker, investment banker or accounting firm,
which opinion will be based on all the reasonably available facts of the
situation including Harvard's lack of income, positive cash flow or marketable
products and the lack of additional funding from Springrange Investment Group,
Ltd. If for any reason this transaction is not confirmed as fair to Harvard by
such a fairness opinion, the parties hereto will restructure the transaction in
a manner so that a fairness opinion can be obtained.
Further Agreement: This document is an agreement between the parties
hereto, effective upon its execution and delivery by Harvard and the Investors.
The parties will
<PAGE>
consult as to whether or not a more extensive agreement is desired covering the
matters herein, and if Harvard and the Investors determine that such an
agreement is desirable, then it will be prepared, but until such a further
agreement is executed and delivered by Harvard and the Investors, this Agreement
shall remain in full force and effect.
Costs and Expenses: As additional consideration for the Investors hereunder,
Harvard will bear all costs and expenses relating to this Agreement, including
those of registration and including fees and expenses of counsel to the
Investors.
Counterparts: This Agreement may be signed in counterparts, each of which
will be an original and all together will constitute one agreement.
IN WITNESS HEREOF, the parties hereto have executed this Agreement this 13th
day of January 1998.
HARVARD SCIENTIFIC CORP. INVESTORS
/s/ JACKIE R. SEE 1/13/98
Jackie R. See
By: /s/ THOMAS E. WAITE
Its: President, CEO
/s/ THOMAS E. WAITE 1/13/98
Thomas E. Waite
ADDENDUM TO CONSULTING AGREEMENT
This is an Addendum to the Consultant Agreement dated April 19th , 1996,
commencing April 1st, 1996, by and between HARVARD SCIENTIFIC CORP., NEVADA
Corporation (hereinafter referred to as "HARVARD" OR THE "company"), having
its principal place of business at 100 No. Arlington, suite 380, Reno, Nevada
89501; and DR. JACKIE R. SEE, M.D. (hereinafter referred to as "EXECUTIVE").
REGISTRATION RIGHTS.
--------------------
(i) DEMAND: During the period from the date of issuance until five (5)
years from the date if issuance, the EXECUTIVE may demand, as many times as
requested by EXECUTIVE, that at HARVARD'S Expense, promptly file a
Registration Statement under the Securities Act of 1933, as amended (the
"Act"), to permit a public offering of the shares of Common Stock issued to
the EXECUTIVE. The COMPANY shall keep such Registration Statement current
for a period of one (1) year. If, after a Registration Statement becomes
effective, the COMPANY advises the EXECUTIVE that the COMPANY considers it
appropriate for the registration Statement to be amended, the EXECUTIVE
shall suspend any further sales of his registered shares until the COMPANY
advises him that the Registration Statement has been amended. The one (1)
year period referred to herein during which the Registration Statement must
be kept current after its effective date shall be extended for an
additional number of business days equal to the number of business days
during which the rights to sell shares was suspended pursuant to the
preceding sentence, but in no event will the COMPANY be required to update
the Registration Statement after the second anniversary of the effective
date.
(ii) PIGGY-BACK: If at any time after the date of issuance of the
Common Stock and expiring five (5) years thereafter, the COMPANY proposes
to register any of its equity securities under the Securities Act (other
than in connection with a merger, acquisition or exchange offer on Form S-4
or pursuant to Form S-8 or successor forms), it will give written notice by
registered mail, at least thirty (30) days prior to the filing of each such
Registration Statement, to the EXECUTIVE, of its intention to do so. Upon
the written request of the EXECUTIVE, given within ten (10) days after
receipt of any such notice of his desire to include any Common Stock in
such proposed Registration Statement, the COMPANY shall afford the
EXECUTIVE the opportunity to have any such Common Stock registered under
such Registration Statement.
1
<PAGE>
Notwithstanding the provisions of this Section, the COMPANY shall have
the right any time after it shall have given written notice pursuant to
this section (irrespective of whether a written request for inclusion of
any such securities shall have been made) to elect not to file any such
proposed Registration Statement, or to withdraw the same after the filing
but prior to the effective date thereof.
If any registration pursuant to this section shall be underwritten in
whole of in part, the COMPANY may require that the Common Stock requested
for inclusion pursuant to this section be included in the underwriting on
the same terms and conditions as the securities otherwise being sold
through the underwriter(s).
Notwithstanding the provisions of this section, if the managing
underwriter in an underwritten public offering of securities shall advise
the COMPANY in writing that inclusion of some or all of the Common Stock
would, in such managing underwriter's opinion, materially interfere with
the proposed distribution of the securities to be offered by the COMPANY,
in respect of which registration was originally to be effected, then the
number of shares of Common Stock to be included in the registration
statement may be reduced or excluded in their entirety if so required by
the underwriter from the Registration Statement. Notwithstanding the
provisions of this section, it shall be a condition precedent to the
obligations of the COMPANY to take any action pursuant to this section with
respect to the Common Stock that the EXECUTIVE Shall furnish to the COMPANY
such information regarding himself, the Common Stock held by him, and the
intended method of disposition of such securities as shall be required to
effect the registration of the EXECUTIVE'S Common Stock.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
HARVARD SCIENTIFIC CORP.
By:/S/ THOMAS E WAITE
-------------- ------------------------------
Dated Thomas E. Waite, President and
Chairman of the Board
/S/ JACKIE R. SEE
-------------- ------------------------------
Dated Dr. Jackie R. See, M.D., Executive
3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 14th
day of November, 1997 by and between:
HARVARD SCIENTIFIC CORP.,
NEVADA Corporation (hereinafter
referred to as "HARVARD" OR THE "COMPANY"),
having its principal place of business at
100 No. Arlington, suite 380,
Reno, Nevada 89501; and
THOMAS E. WAITE, (hereinafter
referred to as "EXECUTIVE"), residing at
106 Ridge Road, Lake Mary, Florida 32746.
WHEREAS, HARVARD desires to have the benefits of EXECUTIVE'S
knowledge and expertise as a full-time employee without the distraction
of employment related uncertainties and considers such employment in the
best interest of the COMPANY and its shareholders, and Executive desires
to be employed full time by the COMPANY; and
WHEREAS, HARVARD and EXECUTIVE desires to enter into an agreement
reflecting the terms under which EXECUTIVE will be employed by the COMPANY
for a one 1 year period which shall commence on November 14, 1997.
NOW, THEREFORE, in consideration of the agreements, convenants
and promises herein contained, the parties hereto agree as follows:
1. [TERM] This Agreement will remain in effect for a period of
one (1) year commencing November 14, 1997 and ending November 14, 1998,
unless previously terminated by the parties as provided herein.
1
<PAGE>
2. [NATURE OF EMPLOYMENT] EXECUTIVE shall be employed as the
President and Chief Executive Officer of HARVARD with full power and
authority as determined by the Board of Directors of HARVARD (the
"Board"). EXECUTIVE agrees to diligently and faithfully perform such
reasonable duties and serve in such capacities as the Board of Directors
of the COMPANY shall determine from time to time. Executive agrees to
devote his full time and efforts to obligations and duties herein.
3. [COMPENSATION FOR SERVICES] As consideration to EXECUTIVE
under this Agreement, HARVARD shall compensate EXECUTIVE as follows:
(a)(i) BASE SALARY. EXECUTIVE shall receive a base salary
of Two Hundred and Forty Thousand Dollars ($240,000) per year,
but at minimum, paid monthly, however, should be paid when the
company's payroll is customarily paid (biweekly or bimonthly).
(b) SIGNING BONUS. The EXECUTIVE acknowledges receipt of
4,000,000 shares of the COMPANY'S Common Stock as a signing bonus.
Such shares shall in no event be refundable due to the nature of the
EXECUTIVE'S current employment opportunities, regardless of whether
EXECUTIVE is subsequently terminated for cause, without cause or in
any way ceases to be employed by HARVARD.
(c) REGISTRATION RIGHTS.
(i) DEMAND: During the period from the date of issuance
until five (5) years from the date if issuance, the
2
<PAGE>
EXECUTIVE may demand, as many times as requested by EXECUTIVE,
that at HARVARD'S Expense, promptly file a Registration Statement
under the Securities Act of 1933, as amended (the "Act"), to
permit a public offering of the shares of Common Stock issued to
the EXECUTIVE. The COMPANY shall keep such Registration Statement
current for a period of one (1) year. If, after a Registration
Statement becomes effective, the COMPANY advises the EXECUTIVE
that the COMPANY considers it appropriate for the registration
Statement to be amended, the EXECUTIVE shall suspend any
further sales of his registered shares until the COMPANY
advises him that the Registration Statement has been amended.
The one (1) year period referred to herein during which the
Registration Statement must be kept current after its effective
date shall be extended for an additional number of business days
equal to the number of business days during which the rights to
sell shares was suspended pursuant to the preceding sentence,
but in no event will the COMPANY be required to update the
Registration Statement after the second anniversary of the
effective date.
(ii) PIGGY-BACK: If at any time after the date of issuance
of the Common Stock and expiring five (5) years thereafter,
the COMPANY proposes to register any of its equity securities
under the Securities Act (other than in connection with a merger,
acquisition or exchange offer on Form S-4 or pursuant to Form
S-8 or successor forms), it will give written notice by
registered mail, at least thirty (30) days prior to the filing of
3
<PAGE>
each such Registration Statement, to the EXECUTIVE, of its
intention to do so. Upon the written request of the EXECUTIVE,
given within ten (10) days after receipt of any such notice of
his desire to include any Common Stock in such proposed
Registration Statement, the COMPANY shall afford the EXECUTIVE
the opportunity to have any such Common Stock registered under
such Registration Statement.
Notwithstanding the provisions of this Section, the COMPANY
shall have the right any time after it shall have given written
notice pursuant to this section (irrespective of whether a written
request for inclusion of any such securities shall have been made)
to elect not to file any such proposed Registration Statement, or to
withdraw the same after the filing but prior to the effective date
thereof.
If any registration pursuant to this section shall be
underwritten in whole of in part, the COMPANY may require that the
Common Stock requested for inclusion pursuant to this section be
included in the underwriting on the same terms and conditions as the
securities otherwise being sold through the underwriter(s).
Notwithstanding the provisions of this section, if the
managing underwriter in an underwritten public offering of
securities shall advise the COMPANY in writing that inclusion of
some or all of the Common Stock would, in such managing
underwriter's opinion, materially interfere with the proposed
distribution of the securities to be offered by the COMPANY, in
respect of which registration was originally to be effected, then
4
<PAGE>
the number of shares of Common Stock to be included in the
registration statement may be reduced or excluded in their entirety
if so required by the underwriter from the Registration Statement.
Notwithstanding the provisions of this section, it shall be a
condition precedent to the obligations of the COMPANY to take any
action pursuant to this section with respect to the Common Stock
that the EXECUTIVE Shall furnish to the COMPANY such information
regarding himself, the Common Stock held by him, and the intended
method of disposition of such securities as shall be required to
effect the registration of the EXECUTIVE'S Common Stock.
(d) BENEFITS. EXECUTIVE shall be entitled to all other
benefits including such bonuses, prescription, life insurance,
medical insurance for EXECUTIVE and EXECUTIVE'S family, holidays and
expense accounts as are consistent for other key senior management
personnel of other similar corporations.
EXECUTIVE shall be entitled to four (4) weeks paid vacation
per year. No more than two (2) weeks shall be taken consecutively
without the prior written approval of the Board of Directors of
HARVARD.
EXECUTIVE shall be entitled to a company paid all health and
sick leave as is accorded to other key senior management personnel,
which shall in no event be less than ten (10) no more than thirty
(30) days per annum.
5
<PAGE>
(e) REIMBURSEMENT. EXECUTIVE shall be reimbursed within
fifteen (15) days for all properly documented HARVARD business
expenses incurred by the EXECUTIVE. These expenses shall include
parking expenses, travel and entertainment, mileage and cellular
phone expenses.
(f) OFFICER AND DIRECTOR INSURANCE. The COMPANY shall at all
times during the term of this agreement maintain through a
nationally recognized carrier Officer and Director Insurance in the
amount that is customarily maintained by companies similarly
situated, or as EXECUTIVE may reasonably form time to time request.
4. [RESPONSIBILITY OF EXECUTIVE] The responsibilities of the
EXECUTIVE under this Agreement are as follows:
(a) EXECUTIVE agrees to devote his full time efforts to
serve HARVARD for the term of employment specified in Section 1 above.
EXECUTIVE agrees to (i) use his best efforts to promote the interest of
HARVARD, and (ii) perform faithfully and efficiently the
responsibilities assigned to him by the board.
(b) During the term of the Agreement, EXECUTIVE
shall not perform services for any person or entity that competes
directly or indirectly with the COMPANY.
6
<PAGE>
(c) EXECUTIVE agrees to abide by general COMPANY policies
as the same are duly adopted by the Board from time to time, so long as
such policies do not conflict with the terms and conditions of this
Agreement.
(d) EXECUTIVE agrees not to enter into any agreement,
contract or other obligation, which would involve the issuance of the
Company's shares without the approval of the Board as evidenced by a
resolution of the Board. Further, the EXECUTIVE agrees not to enter into
any contract, agreement or other obligation on the COMPANY'S behalf
which would obligate the COMPANY for a term which exceeds the term of
any employment agreement the EXECUTIVE may have with the COMPANY without
written approval of the Board of Directors as evidenced by a
resolution of the Board. Also, the EXECUTIVE shall not enter into any
agreement, contract or other obligation on the COMPANY'S behalf which
would involve the payment by the COMPANY of a consideration of a value
exceeding $100,000 without the consent of the Board as evidenced by a
resolution of the Board.
5. [CONFIDENTIALITY AND NON-DISCLOSURE OF INFORMATION]
EXECUTIVE recognizes and acknowledges that HARVARD'S trade secrets and
proprietary information and processes, as they may exist from time to
time, are valuable, special and unique assets of HARVARD'S business,
access to and knowledge of which are essential to the performance of
Executive duties hereunder. EXECUTIVE will not, during or after the term
of his employment with HARVARD, in whole or in part, disclose such
7
<PAGE>
secrets, information or processes to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever, nor
shall EXECUTIVE make use of any such property for his own purpose or for
the benefit of any person, firm, corporation or other entity (except
HARVARD) under any circumstances during or after the term of his
employment provided that after the term of his employment, these
restrictions shall not apply to such secrets, information and processes
which are then in the public domain (provided that EXECUTIVE was not
responsible, directly or indirectly, for such secrets, information or
processes entering the public domain without HARVARD'S consent).
EXECUTIVE agrees to hold as HARVARD'S property, all memoranda, books,
papers, letters, formulas and other data and all copies thereof and
therefrom, in any way relating to HARVARD'S business and affairs,
whether made by him or otherwise coming into his possession, and on
termination of his employment or in demand of HARVARD, at any time, to
deliver the same to HARVARD.
6. [INVENTIONS] EXECUTIVE hereby sells, transfers and assigns to
HARVARD, or to any person or entity designated by HARVARD, all of the
entire right, title and interest of EXECUTIVE in and to all inventions,
ideas, disclosures and improvements, whether patented or unpatented, and
copyrightable material made or conceived by EXECUTIVE, solely or
jointly, or in whole or in part, during the term hereof which (i)
relates to methods, apparatus designs, products, processes or devices
sold, leased, used or under construction or development by HARVARD, or
any subsidiary; or (ii) otherwise relates to or pertains to the
business, functions or operations of HARVARD of any subsidiary; or (iii)
8
<PAGE>
arise, wholly or partly, from the efforts of EXECUTIVE during the term
hereof. EXECUTIVE shall communicate promptly and disclose to HARVARD in
such form as HARVARD requests, all information, details and data
pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and, whether during the term hereof or thereafter,
EXECUTIVE shall execute and deliver to HARVARD such formal transfers and
assignments and such other papers and documents as may be required of
EXECUTIVE to permit HARVARD, or any person or entity designated by
HARVARD, to file and prosecute the patent applications and, as to
copyrightable material, to obtain a copyright thereon. Any invention by
EXECUTIVE within one (1) year following the termination of the AGREEMENT
shall be deemed to fall within the provisions of this paragraph, unless
proved by EXECUTIVE to have been first conceived and made following such
termination.
7. [COVENANT NOT TO COMPETE] During the term hereof and, unless
this AGREEMENT is terminated pursuant to Section 8(b) hereof, for a
period of one (1) year thereafter, EXECUTIVE shall not compete, directly
or indirectly, with HARVARD; interfere with, disrupt or attempt to
disrupt the relationship, contractual or otherwise, between HARVARD and
any customer, client, supplier, consultant or employee of HARVARD,
including, without limitation, knowingly employing or being an investor
(representing more than a five percent (5%) equity interest) in, or
officer, director or consultant to any person or entity which employs
any former key or technical employee whose employment with HARVARD was
9
<PAGE>
terminated after the date which is one (1) year prior to the date of
termination of EXECUTIVE' employment therewith. An activity competitive
with an activity engaged in by HARVARD shall mean performing services
(whether an employee, officer, consultant, director, partner or sole
proprietor) for any person or entity engaged in the business then
engaged in by HARVARD, which services involve as described above.
(a) It is the desire and intent of the parties that the
provisions of Section 9 shall be enforced to the fullest extent
permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any
particular portion of this Section 9 shall be adjudicated to be
invalid or unenforceable, this Section 9 shall be deemed amended
to delete therefrom the portion adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the
operation of this section in the particular jurisdiction in which
such adjudication is made.
(b) Nothing in this Section 7 shall reduce or abrogate
EXECUTIVE' obligations during the term of this AGREEMENT under
Sections 4 and 5 hereof.
8. [TERMINATION BY THE COMPANY] The Board may terminate the
employment of EXECUTIVE at any time with cause. In the event of
termination by HARVARD "for cause", all salary and other benefits paid
or provided to EXECUTIVE hereunder shall cease as of the date of
termination, and the COMPANY shall have no further obligations to
10
<PAGE>
EXECUTIVE. For the purpose of this Section 8(a), termination "for
cause" shall be defined as:
( i ) any willful and material breach or violation of any
of EXECUTIVE'S covenants, duties or obligations under this
Agreement (including EXECUTIVE'S resignation without
cause) or any willful or material neglect of or failure or
refusal to perform any of such covenants, duties or
obligations;
(ii) Any willful or material misconduct which is
reasonably deemed to be injurious to the COMPANY,
including without limitation, misconduct involving fraud
or dishonesty in the performance of such covenants, duties
or obligations; and
(iii) Any willful violation or willful refusal to obey the
reasonable lawful directives and instructions of the Board
of Directors.
For the purposes of this definition, no act or omission of
EXECUTIVE shall be considered "willful" unless EXECUTIVE was not acting
in good faith and did not have a reasonable belief that such action or
omission was in the best interests of the COMPANY. For the purposes of
this Section 8(a), HARVARD shall be entitles to terminate this Agreement
upon finding of failures or willful violations discussed in this Section
8(a), provided that the Board has first notified EXECUTIVE on two (2)
11
<PAGE>
separate occasions of such failure and has given EXECUTIVE at least
thirty (30) days after each such occasion to remedy such willful breach
of duty.
(b)In the event of termination by HARVARD without cause, the COMPANY
agrees to provide EXECUTIVE with the following:
(i) EXECUTIVE shall receive an amount equal to the one (1) year's
base salary plus the value of his benefits accrued at the time of
termination that the EXECUTIVE would have received under this
Agreement but for such termination. Such amount shall be payable
to EXECUTIVE in full at the time of termination; and
(ii) The definition of termination without cause shall include,
but not be limited to, any termination relating to a continuous
disability or incapacity of EXECUTIVE which prevents him from
performing his duties for a period of not less than three (3)
months as determined by an independent, licensed medical doctor.
9. [RESIGNATION BY EXECUTIVE] EXECUTIVE may terminate this
Agreement and his employment with HARVARD for cause, in which event
EXECUTIVE and HARVARD shall have such rights and obligations as would
apply if this Agreement had been terminated under Section 8(b). For
purposes of this Section 9, EXECUTIVE'S termination "for cause" shall be
defined as termination for HARVARD'S willful or permanent breach of its
obligations under this Agreement. If, however, EXECUTIVE terminates this
Agreement and his employment with the COMPANY without cause, resignation
shall be deemed termination for cause under Section 8(a) and all such
rights and obligations thereunder shall apply.
12
<PAGE>
10. [LEGAL FEES] The COMPANY agrees to pay all of EXECUTIVE'S
legal fees and any monetary judgement against EXECUTIVE, arising from,
related to or in connection with any litigation that arises during or
subsequent to the termination of EXECUTIVE'S employment relationship
with the COMPANY involving this Agreement or any matter arising out of
EXECUTIVE'S employment relationship with the COMPANY involving this
Agreement or any matter arising out of EXECUTIVE'S performance pursuant
to this Agreement.
11. [ACCESS TO BOARD OF DIRECTORS] The COMPANY'S Board of
Directors agrees to meet to consider any recommendations from EXECUTIVE
that requires Board approval within forty-eight (48) hours of the
circulation of Notice by the EXECUTIVE.
12. [ORAL MODIFICATIONS NOT BINDING] This Agreement supersedes
all prior agreements and understandings between the parties and may not
be changed or terminated orally, and no change, termination or attempted
waiver of any of the provisions hereof shall be binding unless in
writing and signed by the EXECUTIVE and an Officer or Director of the
Company, other than oneself; provided, however, that EXECUTIVE
13
<PAGE>
compensation may be increased at any time by HARVARD without in any way
affecting any of the other terms and conditions of this Agreement, which
in all other respects shall remain in full force and effect.
13. [NOTICE] Any notice required or permitted to be given under
this Agreement shall be deemed sufficiently given if given upon personal
delivery, or by recognized courier (such as Federal Express), or three
(3) business days after deposit in the United States Mail, by registered
or certified mail, addressed to a party at the address shown
hereinabove, or to such other address or addresses as either party may
hereafter designate by notice given in the same manner.
14. [WAIVER OF BREACH] A waiver by HARVARD or EXECUTIVE of a
breach of any provision of this AGREEMENT by the other party shall not
operate or be construed as a waiver of any subsequent breach by the
other party.
15. [ENTIRE AGREEMENT] This instrument contains the entire
agreement of the parties. It may be changed only by an agreement in
writing signed by the EXECUTIVE and an Officer or Director of the
company, other than oneself, before any waiver, change, modification,
extension or discharge is sought.
16. [GOVERNING LAW] This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, the
domicile of the COMPANY, and the exclusive venue for any litigation
14
<PAGE>
arising out of this Agreement, whether initiated by HARVARD or
EXECUTIVE, shall be Washoe County, State of Nevada. All parties
specifically agree to waive jurisdiction to venue rights that may
otherwise exist.
17. [SEVERABILITY] If any court of competent jurisdiction should
find any provision of this Agreement invalid or unenforceable, for any
reason, the remaining portion or portions hereof shall nevertheless be
valid, enforceable and carried into effect, unless to do so would
clearly violate the present legal and valid intention of the parties
hereto.
18. [ASSIGNMENT] HARVARD shall have the right to assign its
rights under this Agreement, whether in whole or in part, to any parent,
affiliate, successor or subsidiary organization or company or HARVARD or
corporation with which HARVARD may merge or consolidate or which
acquired by purchase or otherwise all or substantially all of HARVARD'S
assets, but such assignment shall not release HARVARD from its
obligations under this Agreement.
19. [SUCCESSORS AND ASSIGNS] This Agreement shall inure to the
benefit of and be binding upon the heirs, administrators, executors,
successors and assigns of each of the parties hereto.
20. [GOOD FAITH] The parties will deal with each other in good
faith with respect to this Agreement.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
HARVARD SCIENTIFIC CORP.
BY:/S/ BARBARA L. KRILICH
____________________________
Barbara L. Krilich, Secretary
/S/ THOMAS E. WAITE
------------------------------
Thomas E. Waite, Executive
