SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934
May 10, 1999
------------------------------------------------
Date of Report (date of earliest event reported)
SMLX TECHNOLOGIES, INC.
----------------------------------------------------
Exact name of Registrant as Specified in its Charter
Colorado 0-28154 84-1337504
- --------------------------- --------------- ---------------------------
State or Other Jurisdiction Commission File IRS Employer Identification
of Incorporation Number Number
376 Ansin Boulevard, Hallandale, Florida 33009
----------------------------------------------------------
Address of Principal Executive Offices, Including Zip Code
(954) 455-0110
--------------------------------------------------
Registrant's Telephone Number, Including Area Code
ITEM 5. OTHER EVENTS
Effective May 10, 1999, SMLX Technologies, Inc. (the "Company") entered
into a Joint Venture Agreement with HelveStar S.A., a Swiss corporation based
in Fribourg, Switzerland. The Agreement provides that the Company will
jointly form a new Swiss corporation to be named "BioStar, S.A." to be owned
60% by HelveStar and 40% by the Company. HelveStar will contribute the
initial capital of 100,000 Swiss Francs for BioStar and will advance working
capital to BioStar for the first 24 months or until BioStar achieves positive
cash flow from operating revenues, whichever first occurs. The Company will
contribute to BioStar three license agreements for its core technologies,
namely its Bioven, Saliva Test and Airbrator products. In addition, the
Company will sell its rights to certain non-core technologies to BioStar in
exchange for $2,400,000 payable in monthly installments of $100,000.
Under the terms of the Agreement, the Company will be responsible for all
research and development, new product evaluations and new product training for
BioStar, HelveStar and their affiliates. The Company will cease all marketing
activities for products covered by the joint venture except for existing
agreements with distributors.
HelveStar will assign individuals to serve as officers, employees and
representatives of BioStar. The Board of Directors of BioStar will consist of
six members, of which four will be designated by HelveStar and two will be
designated by the Company. In addition, the Company has agreed to allow
HelveStar to designate two persons to become Directors of the Company and
support their election.
In connection with the Joint Venture Agreement, the Company has agreed to
grant HelveStar options to purchase 900,000 shares of its Common Stock at
$1.58 per share. In addition, HelveStar has the right to purchase 2,250,000
shares of the Company's Common Stock at 50% of the market price on the last day
prior to purchase that at least 5,000 shares were traded until May 3, 2001.
The 3,150,000 shares which HelveStar has the right to acquire gives it
beneficial ownership of approximately 22.2% of the Company's Common Stock if
exercised and based on today's outstanding stock.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) EXHIBITS.
Exhibit 10.1 Joint Venture Agreement Filed herewith
with HelveStar S.A. electronically
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.
SMLX TECHNOLOGIES, INC.
Dated: May 26, 1999 By:/s/ Colin N. Jones
Colin N. Jones, President
3
Joint Venture Agreement dated this third day of May, 1999 by and between
(1) SMLX Technologies, Inc. (formerly Simplex Medical Systems, Inc., a
Colorado corporation having its office and principal place of business at 376
Ansin Blvd., Hallendale, Florida 33009 (hereinafter referred to as "SMLX");
(2) HelveStar S.A., a Swiss corporation having its office and principal place
of business at 56 Gand Rue, CH-1700 Fribourg, Switzerland (hereinafter
referred to as "HelveStar"); and
(3) BioStar Life Sciences S.A., a Swiss corporation to be formed by SMLX and
HelveStar and to have its principal office and place of business at 56 Gand
Rue, CH-1700 Fribourg, Switzerland (hereinafter referred to as "BioStar").
Whereas, SMLX, a bioengineering problem solving company owning Products,
Intellectual Property Rights, Proprietary Materials and Proprietary
Technologies, and HelveStar, a technology commercialization, financial,
financial and holding company have agreed to form and capitalize BioStar for
the purposes of commercializing, manufacturing, developing, marketing and
selling SMLX's present and future technologies and products; and
Whereas, SMLX and HelveStar have agreed to incorporate, organize and
capitalize BioStar for said purposes;
SMLX, HelveStar and BioStar hereby agree as follows:
1. Incorporation, Organization and Capitalization of BioStar
1.1 HelveStar shall forthwith incorporate BioStar as BioStar S.A. under the
laws of Switzerland and shall provide the statutory minimum capital of 100,000
Swiss francs required for authorization of 1,000 shares of common stock of
BioStar ("BioStar Shares" or "Shares"). Articles of Incorporation and Bylaws
of BioStar shall be in standard form for S.A. incorporation in Switzerland
with changes as expressly provided in this JVA.
1.2 Original issuance of BioStar Shares shall be in the ratio of 60% to
HelveStar and 40% to SMLX and shall be in consideration of the various
transfers, licenses, equity and set forth in this JVA. SMLX and HelveStar
hereby agree to vote said shares during said period for the election for
directors as set forth below.
1.3 BioStar shall have an initial board of at least six directors two of whom
will be designated by SMLX. In addition to the foregoing, SMLX hereby agrees
to nominate and support the election to the SMLX board of two directors
designated by HelveStar.
1.4 All corporate action by the board of directors or shareholders shall be
taken by a majority of the directors and by a majority of the shares present
in person or by proxy at any duly called meeting of shareholders at which a
quorum is present.
<PAGE>
1.5 HelveStar shall assign and second individuals to BioStar to serve as
officers, employees and representatives of BioStar and, based on monthly
operating budgets approved by the BioStar board of directors, shall advance
operating working capital until, and whenever in any of the first 24 calendar
months of the term hereof there is positive Net Cash Flow derived from
operating revenues reduced by operating expenses paid in cash in such month.
At such time and in any event, at the end of said 24 calendar month period all
obligations of HelveStar under this Section 1.5 shall terminate. Such
advances by HelveStar of operating working capital to BioStar shall be without
recourse to SMLX but may be recouped from BioStar without interest out of
subsequent monthly Net Cash Flows prior to any distribution of profits to
HelveStar and SMLX.
1.6 SMLX agrees to provide director and officer liability insurance coverage
for HelveStar nominees to SMLX board without cost to HelveStar and BioStar.
1.7 Each of SMLX, BioStar, and HelveStar shall incorporate in their respective
certificates or articles of incorporation and bylaws (to the extent not
already provided) provisions for indemnifying its officers and directors to
the full extent permitted by law and for payment of all reasonable legal
expenses of defending claims (whether asserted by the Parties (and Affiliates
of each) hereto or third parties including governments, product liability
claims, etc.).
2. Transfer, Licensing and Assignment of Products, Proprietary Materials,
Proprietary Technologies and Additional Products.
2.1 Within 5 business day of the execution of this JVA, SMLX and BioStar
shall execute the three license agreements relating to certain core
technologies and Products (Bioven, Saliva Test and Airburator) heretofore
developed by SMLX thereby granting to BioStar exclusive, irrevocable and
perpetual rights to make, have made, use and sell Products covered by said
Licenses in all areas of the world with full right to sublicense or assign.
2.2 In exchange for a total of $2,400,000 (US), payable to SMLX by BioStar at
a rate of $100,000 per month for 24 months commencing with the calendar month
of May, 1999, SMLX hereby transfers, assigns and conveys all of its rights,
title and interests, and within 5 business days of the execution of this JVA,
shall execute documents, bills of sale, transfers of registrations and such
other documents to evidence transfer of good and marketable title (free and
clear of all liens, claims, encumbrances and licenses) in certain non-core
technology, Intellectual Property Rights, Proprietary Materials and
Proprietary Technology for use in making, having made, and selling SMLX
Products heretofore developed by SMLX.
2.3 SMLX hereby further agrees with HelveStar that all reseach and development
projects, or Product improvements requested and funded by BioStar shall be the
property of BioStar. As such technologies and products are developed
("Additional Products"), SMLX shall transfer, assign and convey to BioStar all
of its rights, title and interest therein, and shall execute assignments,
bills of sale, licenses, transfers and such other documents to evidence
transfer of good and marketable title (free and clear of all liens, charges,
encumbrances and licenses) for use in making, having made and selling
Additional Products.
2.4 SMLX will have exclusive responsibility for all research and development,
new product evaluation and new product training for BioStar, HelveStar and
their Affiliates.
2
<PAGE>
2.5 BioStar will have exclusive responsibility for commercialization,
marketing, and production of all SMLX Products, worldwide.
2.6 BioStar will have sole authority for BioStar operations and SMLX will have
sole authority for SMLX operations hereunder.
2.7 This JVA, the License Agreements, the asset transfer of non-core
technology Products under Section 2 shall become effective on the date (the
"Effective Date") on which the License Agreement of the three core technology
Products are signed by SMLX and BioStar.
2.8 In the event BioStar fails to make its payments in connection with the
transfer under Section 2.2 above, such failure to make payments shall not
constitute a default hereunder until such time as SMLX notifies BioStar in
writing of the Failure to receive payment and the expiration of twenty days
from the giving of said notice. If within said twenty days BioStar cures to
non-payment or institutes arbitration to resolve any dispute on the amount due
and fails to pay the amount awarded, all non-core technologies not paid for
shall revert to SMLX.
Non-core technologies for specific products will be set forth in a separate
Agreement with allocation of purchase price set forth for each. In
determining non-core technologies not paid for, BioStar reserves the right to
assign amounts paid to the purchase of specific items listed at the price
indicated for each product. To the extent there is shortfall or overage the
parties agree to make appropriate cash adjustment.
3. Financing SMLX Participation in Joint Venture
3.1 HelveStar shall provide the entire statutory capital of 100,000 Swiss
francs necessary for the incorporation of BioStar and for all additional
operating working capital of BioStar as determined by the BioStar board of
directors.
3.2 After establishing a working capital reserve and recovery thereof, the
BioStar board of directors shall establish a dividend payment policy from Net
Cash Flows 40% to SMLX and 60% to HelveStar.
4. Business Transactions between Related Companies and Affiliates.
4.1 BioStar shall during the period prior to having production facilities
available to it arrange for manufacture of Products by production facilities
currently available to SMLX and production facilities available to HelveStar
and its Affiliates. Terms for production shall be agreed at arm's length with
Affiliates in order to maximize profits from commercialization and sale in
BioStar for the pro rata benefit of its shareholders, (SMLX and HelveStar) and
shall require good faith approval of any related party transactions by a
majority vote of the BioStar board of directors.
4.2 Subject to SMLX performance of obligations and responsibilities hereunder,
BioStar will assume full responsibility to SMLX for fulfilling current SMLX
Agreements as set forth in Exhibit C attached and for honoring all terms and
conditions of said Distribution Agreements and will transfer all payments
received from these Distributors, less a 5% processing fee. Each such
Distribution Agreement shall become the sole property of BioStar if it is
renewed, amended in any way or renegotiated.
4.3 On the Effective Date, SMLX agrees with HelveStar and BioStar
3
<PAGE>
(a) to cease all activities pertaining to the marketing of the Products and
Additional Products covered by this JVA and its technologies including the
sale of products made for third parties, except any products involved in (i)
contracts with Vector Technologies and (ii) contracts with Louden Far East
(Kyowa), copies of which are attached. and
(b) to turn over to BioStar all leads or commercialization opportunities that
may arise from third party research contracts.
5. Representations, Warranties and Disclaimers.
5.1 SMLX shall make available to BioStar all rights available to SMLX with
respect to any obligation of indemnity by any other entity, but shall have no
further liability to BioStar with respect to the validity, enforceability, or
non-infringement of the Property Rights licensed or transferred hereunder.
Each party will promptly notify the other of any infringement of Intellectual
Property Rights of which it becomes aware.
5.2 Each party hereto hereby represents and warrants that: (a) it has full
power to execute and perform its obligations under this Agreement; (b) all
corporate action on the part of such party, its officers and directors
necessary for the authorization, execution and delivery of this Agreement and
the performance of all obligations of such party hereunder have been taken;
(c) the execution, delivery, and performance of this Agreement by such party
does not violate the terms of or constitute a breach under any agreement to
which it is a party; and (d) no SMLX stockholder approval is required.
5.3 EXCEPT AS PROVIDED UNDER SECTION 5.1 AND SECTION 5.2, NEITHER PARTY MAKES
ANY EXPRESS OR IMPLIED WARRANTY, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR NON-INFRINGEMENT WITH
RESPECT TO ANY RIGHT, LICENSE OR TECHNOLOGY TO BE PROVIDED HEREUNDER.
5.4 Each party hereto agrees, covenants, represents and warrants that (a) it
has complied or will comply with all applicable laws relating to transferee
liability or sale or transfer of assets; (b) that it has not filed any
voluntary bankruptcy petition nor has any such petition been filed by
claimants or creditors; and (c) that no transfer made under or contemplated by
this JVA shall constitute a preference under applicable bankruptcy or
insolvency laws.
6. Distribution, Support and Record Keeping Obligations.
6.1 BioStar shall be responsible for all customer and technical support of
customers and shall provide reasonable support. As part of its efforts in
this regard, BioStar shall keep records appropriate to properly administer any
recall of Products or Additional Products.
6.2 Each party agrees that its conduct under this Agreement shall conform to
all applicable laws and regulations of the United States, Switzerland and
foreign governments (and political subdivisions thereof), general and local
industry standards, rules and regulations and good commercial practices.
BioStar shall be responsible for assuring that Products distributed by it to
third parties and labeling and documentation therefor conform to applicable
standards.
4
<PAGE>
6.3 BioStar will prepare, collect and maintain for four years after
preparation, sales and account books and other records including an internal
audit appropriate for determining Net Cash Flows and other matters relevant to
determining rights hereunder. BioStar shall submit to SMLX, at the time for
each payment hereunder, a summary of such records which shall be sufficient to
allow the other to calculate amounts then due. SMLX may, no more than once in
any twelve month period, arrange to have an independent certified public
accounting firm (which shall not be SMLX's auditor) audit BioStar's sales and
accounting books and other records to ensure compliance with the terms of this
Agreement; provided that such accountant shall be bound in writing to hold
such information in confidence and not to disclose it except to the extent
necessary to communicate evidence of non-compliance. The costs of audit shall
be borne by SMLX. Any such audit shall occur during regular business hours at
BioStar's offices and shall not interfere unreasonably with the Licensee's
business activities.
7. Confidential Information.
7.1 Except as otherwise expressly provided herein, each Party shall hold in
confidence and not use or disclose to any third party (other than Affiliates,
employees and permitted sublicensees and assignees similarly bound in writing,
provided such disclosure is in furtherance of this JVA) any product,
technical, manufacturing, process, marketing, financial, business or other
information, ideas, or know-how (Proprietary Information") or Intellectual
Property Rights of or used by the other; provided, however, that Proprietary
Information or Intellectual Property Rights of a party shall not include:
(a) Items which at the time of disclosure are published or otherwise
generally available to the public;
(b) Items which, after disclosure by the other party, are published or become
generally available to the public through no breach of this JVA by the other
or the other's employees or agents; or
(c) Items which the other can document were or are (i) in its possession at
the time of disclosure and were not acquired directly or indirectly from
such Party or (ii) independently developed.
7.2 A party may disclose Proprietary Information or Intellectual Property
Rights of the other:
(a) In connection with the order of a court of law or in compliance with
governmental regulations relating to product registrations or financial
reporting requirements provided (i) the other party is notified and given the
opportunity to discuss the issue prior to disclosure and (ii) such party takes
all appropriate action to avoid or limit disclosure to the minimum disclosure
consistent with legal obligations; or
(b) If such information is also rightfully acquired from a third party who,
to the best of such party's knowledge and belief, is entitled to rightfully
make such disclosure, but only to the extent such party complies with any
restrictions imposed by the third party.
8. Export Regulation. Each party shall comply with all export laws and
restrictions and regulations of the Department of Commerce or other United
States, Swiss or foreign agency or authority, and not export, or allow the
export or re-export of any Products or any technical data or Proprietary
5
<PAGE>
Information or Intellectual Property Rights supplied or licensed to it
hereunder or any direct product thereof in violation of any such restrictions,
laws or regulations.
9. Publicity and Press Releases. Except to the extent necessary under the
applicable laws or for ordinary marketing purposes, the parties agree that no
press releases or other publicity relating to the substance of the matters
contained herein will be made without joint approval. SMLX shall provide any
information which it proposes to include in any 10-K or 10-Q to BioStar at
least 15 days prior to submission to permit BioStar to request confidential
treatment thereof.
10. Relationship of the Parties. Notwithstanding any provision hereof, for
all purposes of this Agreement each party shall be and act as an independent
contractor and not as partner, joint venturer, or agent of the other and shall
not bind nor attempt to bind the other to any contract. Upon such request
SMLX shall exercise all reasonable efforts to have business sensitive or
confidential information redacted from documents filed with the SEC which are
available to the public under provisions of law relating to freedom of
information.
11. Assignability. With mutual consent, this JVA shall inure to the benefit
of, and be binding upon, each of the parties and their respective successor
and assigns.
12. Miscellaneous
12.1 The failure of either Party to enforce its rights under this JVA at any
time for any period shall not be construed as a waiver of such rights.
12.2 This JVA shall be governed by and construed in accordance with the laws
of the State of Florida without giving effect to principles of conflicts of
law.
12.3 The rights and remedies of a party set forth herein with respect to
failure of the other to comply with the terms of this JVA (including, without
limitation, rights of full or partial termination of this JVA) are not
exclusive, the exercise thereof shall not constitute an election of remedies
and the aggrieved party shall in all events be entitled to seek whatever
additional remedies may be available in law or in equity.
12.4 Any dispute that arises with respect to the subject matter of this JVA
shall be settled by arbitration.
If any claim, dispute or disagreement between the parties shall arise, such
claim, dispute or disagreement shall be submitted to arbitration (1) in
Florida if the party initiating the arbitration is BioStar (according to the
rules of the American Arbitration Association) or (2) in Switzerland if the
party initiating the arbitration is SMLX (according to the Commercial
Arbitration Rules of the International Chamber of Commerce); and decided by a
panel of three (3) arbitrators. The arbitration shall be conducted, to the
extent possible, in English. The parties agree to abide by all decisions
rendered in such proceedings. Each party shall bear its own costs and
attorneys' fees. Costs of the arbitration panel shall be shared equally by
the parties. Decisions of the arbitration panel shall be final and binding on
all parties. There shall be no appeal therefrom other than for fraud or
misconduct that substantially prejudices the right of the appealing party, or
on the ground that the arbitrators exceeded their powers and the award cannot
6
<PAGE>
be corrected without affecting the merits of the decision. Any award or
decision made in such arbitration proceeding shall be final, binding upon the
parties and enforceable through application to any court of competent
jurisdiction. Nothing in this subsection shall be deemed to prevent the
arbitration panel from exercising authority to permit exercise by a party of
rights to obtain pre-judgment remedies through judicial action. Nothing in
this Section is intended to be a waiver of a party's right to any pre-judgment
remedy which may be enforced through arbitration, specifically including, but
not limited to, injunctive relief or specific performance.
12.5 This agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof, and no modification or amendment
hereof shall be valid or binding upon the parties unless made in writing and
duly executed on behalf of each of the parties.
12.6 If one or more provisions of this Agreement (other than provision of
Section 2 hereof relating to transfer and licensing Products, additional
Products, Intellectual Property Rights, etc.) are held unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
12.7 This JVA may be terminated by either party upon the occurrence of any
bankruptcy, insolvency, reorganization or other proceeding in any applicable
jurisdiction or upon material breach not remedied within sixty days of notice.
Such termination shall not affect free standing License Agreements or
transfers hereunder made prior to such events providing grounds for
termination. No Party shall be liable to any other party hereto for claims of
consequential, incidental or punitive damages.
13. Notices. Any notice or other communication required or permitted to be
given to the other party pursuant to this JVA shall be sufficiently given if
personally delivered, if sent via overnight courier, or if sent to such party
by certified mail, return receipt requested, postage prepaid, addressed to it
at its address set forth below or to such other addresses as it shall
designate by written notice given to the other party, or by facsimile, telex
or telegraph service, with prompt confirmation of such facsimile, telex or
telegram by certified mail. Time of notice or other communication shall be
deemed to be the date of postmark or of facsimile, telex or telegraph
transmission.
In the case of a notice or other communication to HelveStar:
H.E. Khundkar Khalid Ahmed Hossain
HelveStar S.A.
56 Grand Rue
CH-1700 Fribourg
Switzerland
Tel: 011-41-26-341-8000
Fax: 011-41-26-341-8001
In the case of a notice or other communication to SMLX.
Colin Jones
376 Ansin Blvd.
Hallendale, Florida 33009
Tel: 954-455-0110
Fax: 954-455-9008
7
<PAGE>
<PAGE>
In the case of BioStar:
H.E. Khundkar Khalid Ahmed Hossain
BioStar S.A.
56 Grand Rue
CH-1700 Fribourg
Switzerland
Tel: 011-41-26-341-8000
Fax: 011-41-26-341-8001
14. Separate Agreements. This JVA may be executed in any number of
counterparts, each of which shall be an original, but such counterparts
together constitute but one and the same instrument. License Agreements, any
stock option or stock warrant agreements and any asset transfer documents
executed pursuant to this JVA shall constitute free standing agreements and no
termination or breach or amendment of any one or more of them shall be deemed
termination or breach or amendment of this JVA.
Executed the day, month and year set forth above.
SMLX Technologies, Inc.
By: /s/ Colin N. Jones
Chairman and CEO
HelveStar S.A.
By: /s/ Khalid Hossain
Chairman and CEO
BioStar S.A.
By: /s/ Khalid Hossain
Khalid Hossain on behalf of
HelveStar
By: /s/ Colin Jones
Colin Jones on behalf of
SMLX
Upon incorporation and organization of BioStar, the duly elected and
authorized chairman and CEO of BioStar shall re-execute below confirming
agreement of BioStar as Party to this Agreement.
BioStar S.A.
By: _________________________
Chairman and CEO.
8
