SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: April 5, 1999
WASATCH PHARMACEUTICAL, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
UTAH 000-22899 84-0854009
- ---------------------------- ------------------------ ---------------------
(State or other jurisdiction (Commission File Number) (IRS Employer ID No.)
of incorporation)
714 East 7200 South, Midvale, Utah 84047
---------------------------------------------------
(Address of principal executive office)
Registrant's telephone number, including area code: (801) 566-9688
----------------
N/A
------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
Summary
On March 3, 1999, Wasatch Pharmaceutical, Inc., a Utah corporation (the
"Company") entered into a Financial Consulting Agreement with The Vector Group,
LLC, a California Limited Liability Company, ( "Vector"), wherein Vector has
agreed to perform investment banking services including:
Creating and executing plans for the financing of the expansion and
growth of the operations of the Company, including public or private offerings
of the Company's securities.
The Vector Group will receive 1,500,000 shares of common stock as
compensation.
<PAGE>
(c) (1) Exhibits. The following exhibits are included as part of this report:
SEC
Exhibit Reference
Number Number Title of Document Location
- ------- ------ -------------------------------------------- --------
10.01 10 Agreement between The Vector Group This filing
and Wasatch Pharmaceutical, Inc. dated
March 3, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunder duly authorized.
WASATCH PHARMACEUTICAL, INC.
Date: April 5, 1999 /s/ David K. Giles
-----------------------
David K. Giles, Secretary
FINANCIAL CONSULTING AGREEMENT
THIS AGREEMENT is made and entered into as of this 3 day of March,
1999, and is made by and between The Vector Group, LLC, and California Limited
Liability Company, (hereinafter referred to as the "Consultant") and, Wasatch
Pharmaceutical, a Utah Corporation, (hereinafter referred to as the "Company").
WITNESSETH:
WHEREAS, the Company is desirous of obtaining for Consultant financial
advice and consulting services (hereinafter referred to as the "Services"), and;
WHEREAS, Consultant is experienced in providing financial advisory and
consulting services such as the Services desired by the Company, and;
WHEREAS, the Company desires to retain Consultant to provide the
Services and Consultant desires to be retained to provide the Services to the
Company, and;
WHEREAS, Consultant will devote substantial time and incur substantial
expense in connection with the provision of the Services to the Company, under
and pursuant to the terms of this Agreement, and;
WHEREAS, in consideration for Consultant agreeing to devote the time
and incur the expense in performing the Services under and pursuant to the terms
of this Agreement, the Company agrees to pay Consultant the considerations
called for in this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth, the Company and Consultant hereby agree as follows:
AGREEMENT
Section 1. CONSULTING SERVICES. Consultant shall provide to the
Company, when and as requested by the Company, from time to time and during
normal business hours, financial and business consultation services and advice
concerning, nut not limited to:
(i) creating and executing plans for the financing of the
expansion and growth of the operations of the Company,
including public or private offering of the Company's
securities;
(ii) acting as the liaison for the Company with respect to any
broker-dealers utilized for any such financing, including the
coordination of all selling efforts of the Company's
securities and the creation of a selling group and/or a
selling syndicate;
<PAGE>
(iii) engaging market makers for the Company's publicly traded
securities;
(iv) determining the structure of and evaluating any proposals
for financing of the Company's operation;
(v) establishing escrow arrangements;
(vi) arranging the printing of any documents required for any
offering of the Company's securities and overseeing such
printing;
(vii) participating in the selection and supervision of legal
counsel and auditors for the Company which counsel and
auditors must be deemed qualified by Consultant to perform the
services required of them;
(viii) supervising shareholder and investor relations,
including hiring of a financial public relations firm and
participating in the preparation of annual reports and other
press or public releases of information;
(ix) providing long term business, managerial and financial
planning;
(x) analyzing corporate reorganization an expansion and
investigating merger and/or acquisition opportunities;
(xi) determining the Company's capital structure; and,
(xii) assisting in borrowings and other method of financing
required by the Company;
Section 2. ADDITIONAL SERVICES. In connection with the services to be
provided by Consultant, Consultant shall compile all due diligence related to
and required by the performance of the services hereunder. Consultant shall
assist the Company in the accumulation of any due diligence material and in the
preparation of any and all on behalf of the Company as deemed necessary and
appropriate in connection with the Services to be rendered by Consultant.
Notwithstanding the foregoing, Consultant shall be under no obligation to
provide Services for any minimum number of hours per month during the term
hereof. Any services, if requested, such as rendering opinions on specific
transactions, will be the subject of separate agreements between the Company and
Consultant if not otherwise covered hereunder.
Section 3. TERM OF AGREEMENT. This Agreement shall become effective as
of the date first written above and shall continue for a period of one (1) year,
(hereinafter, the "Term"). This Agreement shall automatically renew for
consecutive additional terms unless either party hereto terminates this
Agreement by written notice at least 30 days prior to the expiration of a Term
or as per other terms and conditions stated herein.
<PAGE>
Section 4. SCOPE OF RETENTION. The Company hereby retains Consultant as
its exclusive financial advisor during the Term of this Agreement. In the event
that the Company does not call upon Consultant to perform Services during the
Term of this Agreement, the Company shall nonetheless remain liable to pay the
fee set forth in Section 5, infra.
Section 5. COMPENSATION. As compensation for the Services, the Company
shall pay Consultant upon execution of this Agreement the sum of Seventy Five
Thousand Dollars ($75,000.00). Which sum shall be treated as a non-refundable
retainer (the "Retainer"). Consultant has elected to receive payment of the
Retainer in a non-cash transaction in which the fee set forth in this Section 5
shall be considered paid in full by delivery to Consultant the amount of One
Million Five Hundred Thousand (1,500,000) shares of the Company's common
non-restricted and free trading stock (hereinafter, the "Shares").
Section 6. PAYMENT OF REASONABLE COSTS. Company shall pay for all
Consultant's reasonable out-of-pocket expenses, including its travel and
entertainment, incurred by Consultant in connection with performance of the
Services pursuant hereunder. However, any expenses above ONE THOUSAND DOLLARS
Consultant shall notify Company prior to incurring such expense.
Section 7. NON-CIRCUMVENTION. This Agreement requires the services of
third parties such as market makers, broker-dealers or financial institutions
(hereinafter, collectively referred to as "Sources") doing business with
Consultant concerning this Agreement. As soon as practicable after the date
first written above the Company which listed Sources shall be excluded from the
provisions of this Section 7. Notwithstanding the foregoing, prior to engaging
on behalf of the Company any Source not listed, Consultant will identify such
unlisted Source in writing to the Company, and the Company shall have Five (5)
business days to provide proof to the satisfaction of Consultant that such
unlisted Source is, in fact, already known to the Company.
With respect to any Source determined not to be already known to the Company,
the Company warrants that it shall not, and shall use reasonable efforts to
cause its partners, officers, employees, affiliates or associates not to, during
the Term and for a period of Two (2) years following the termination or
expiration of this Agreement:
(i) disclose to any other party the identity of any such not
already known Source; and,
(ii) make any contact, or otherwise become involved with any
such not already known Source in any transaction for or, on
behalf of, the Company.
The Company agrees that any such unauthorized disclosure and/or contact will
cause irreparable harm and significant financial injury to Consultant and that,
should legal action be required by Consultant to remedy any harm and/or
financial injury, the financial burden of costs and remedies shall be borne by
the Company.
<PAGE>
Section 8. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 9. EXPERT TESTIMONY. Should Consultant or any of its employees,
contractors or affiliates be required to testify in the event of any litigation
relating to matters with respect to which Consultant has expertise, such as, for
example, matters similar to the Services pursuant hereunder, the Company agrees
to pay Consultant or its designee, the per diem rate customary for experts
providing such expert testimony in the jurisdiction where such testimony is to
be provided, plus reasonable out of pocket expenses, for all time required for
such testimony.
Section 10. INDEMNIFICATION. The Company and Consultant agree to
indemnify and hold the other party and all of the other party's officers,
directors, employees, affiliates and agents harmless from and against any and
all manner of actions, causes of action, claims, demands, costs, damages,
liabilities, losses, obligation and expenses, (including actual attorneys' fees)
arising or resulting from or related to Consultant's performance of the Services
pursuant hereunder.
Section 11. INDEPENDENT CONTRACTOR. Consultant and the Company hereby
acknowledge and agree that Consultant is an independent contractor and is not a
licensed broker-dealer. Consultant shall not hold itself out as, not shall it
take any action from which others might infer that it is a partner or agent of,
or a joint venture with the Company. In addition, Consultant shall take no
action which binds, or purports to bind the Company.
Section 13. LAW; FORUM AND JURISDICTION. This Agreement shall be
construed and interpreted in accordance with the laws of the State of
California. The parties agree that any dispute arising under or with respect to
or in connection with this Agreement, whether during the Term of this Agreement
or at any subsequent time, shall be resolved fully and exclusively by binding
arbitration in accordance with the commercial rules then in force of the
American Arbitration Association and the proceedings taking place in Los
Angeles, California.
Section 14. NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered, or sent
by express mail or telegram, or transmitted by fax addressed as set forth herein
below.
If to Consultant:
The Vector Group, LLC
6320 Canoga Ave.
15th Floor
Woodland Hills, California 91367
Tel: (818) 980-8300
Fax: (818) 227-5099
Attn: Richard Dorfman, President
<PAGE>
If to Company:
Wasatch Pharmaceutical Inc.
714 East 7200 South
Midvale, Utah 84047
Tel: (801) 566-9688
Fax: (801) 566-9680
Attn: Gary V. Heesch, CEO
The parties may change their address to any other address as shall be furnishes
by written notice from any party changing address to the other party in the
manner for giving notices as set forth in this Section 14. Any notice or
communication given pursuant hereunder shall be deemed to have been given as of
the date so delivered, sent, or transmitted.
Section 15. ATTORNEY'S FEES. In the event that any party institutes any
action to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the prevailing party shall be entitled to reimbursement from
the non-prevailing party for all costs, including reasonable attorneys' fees
incurred in connection therewith and in enforcing or collecting any judgment
rendered therein.
Section 16. CONFIDENTIALITY. Each party hereto agrees with the other
party hereto that, unless and until mutually agreed upon, they and their
representatives will hold in strict confidence all data and information obtained
with respect to the other party or any subsidiary thereof from any
representative, officer, director, or employee, or from any books or records or
from personal inspection, of such other party, and shall not use such data or
information or disclose the same to others, except:
(i) to the extent such data or information are matter of
public knowledge or are required by law to be published; and,
(ii) to the extent that such data or information must be used
or disclosed in order to consummate the transactions
contemplated by this Agreement.
Section 17. TERMINATION. This Agreement may be terminated by Consultant
during the Term hereof by notice to the Company in the event that the Company
shall have provided inaccurate or misleading information, of any type or nature,
to the Consultant, or failed or been unable to comply with any of the terms,
conditions or provisions of this Agreement on the part of the Company to be
performed, complied with or fulfilled within the respective times, if any,
herein provided for, unless compliance therewith or the performance or
satisfaction thereof shall have been expressly waived by Consultant in writing.
Any termination of this Agreement pursuant to this Section 16 shall be without
liability of any character (including, but not limited to, loss of anticipated
profits or consequential damages) on the part of the Company, except that the
Company shall remain obligated to pay the fees, other compensation and costs
otherwise to be paid, as set forth in Section 5 and 6 hereof.
<PAGE>
Section 18. THIRD PARTY BENEFICIARIES. This Agreement is solely among
and between Consultant and the Company and, except as specifically provided
herein, no creditor, director, officer, stockholder, employee, agent,
independent contractor or any other person or entity shall be deemed to be a
third party beneficiary of this Agreement.
Section 19. SURVIVAL, TERMINATION. The representations, warranties and
covenants of the respective parties shall survive the consummation of the
transactions herein contemplated.
Section 20. AMENDMENT OR WAIVER. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other party shall be
construed as a waiver of the same or any other obligation or default then,
theretofore, or thereafter occurring or existing. At any time during the Term
this Agreement may be amended by a written amendment executed by the parties,
hereto, with respect to any of the terms contained herein, and any term or
condition of this Agreement may be waived or the time for performance hereof may
be extended by a written notice executed by the waiving or extending party.
Section 21. INCORPORATION OF RECITALS. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
Section 22. HEADINGS; CONTEXT. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only, do
not form a part hereof, and in no way modify or construe the meaning of this
Agreement.
Section 23. BENEFIT. This Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto, and their assigns permitted
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 24. SEVERABILITY. In the event that any particular provision or
provisions of this Agreement shall for any reason hereafter by determined to be
unenforceable, or in violation of any law, governmental order or regulation,
such unenforceability or violation shall not affect the remaining provisions of
this Agreement, which shall continue in full force and effect and be binding
upon the respective parties hereto.
Section 25. NOT STRICT CONSTRUCTION. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intent, and not
strictly for or against either party hereto, regardless of who drafted or was
principally responsible for drafting the Agreement or the terms or conditions
hereof.
Section 26. EXECUTION KNOWING AND VOLUNTARY. In executing this
Agreement, the parties severally acknowledge and represent that each:
(i) has fully and carefully read and considered this
Agreement;
<PAGE>
(ii) has been or has had the opportunity to be fully apprised
by its attorneys of the legal effect and meaning of this
Agreement and all terms and conditions hereof;
(iii) has been afforded the opportunity to negotiate as to any
and all terms hereof; and,
(iv) is executing this Agreement voluntarily, free from any
influence, coercion or duress of any kind.
Section 27. ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties hereto relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof and there are no other courses of dealing,
understandings, representations or warranties, written or oral, except as set
forth herein. This Agreement may not be amended or modified, except by a written
agreement signed by all parties hereto.
IN WITNESS HEREOF, the parties hereto have executed or caused this Agreement to
be executed as of the date first above written.
"Consultant"
The Vector Group, LLC
By: /s/ Richard Dorfman
-------------------------------
Richard Dorfman, President
"Company"
Wasatch Pharmaceutical, Inc.
By: /s/ Gary V. Heesch
-------------------------------
Gary V. Heesch, CEO
