UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
HEARx Ltd.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
422360107
(CUSIP Number)
Kenneth G. Langone
375 Park Avenue
New York, New York 10152
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
May 7, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or
(4), check the following box [ ].
Check the following box if a fee is being paid with the statement.
(A fee is not required only if the reporting person: (1) has a
previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1;
and (2) has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such class.) (See
Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kenneth G. Langone
___________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ] (b) [ ]
___________________________________________________________________
3 SEC USE ONLY
___________________________________________________________________
4 SOURCE OF FUNDS*
PF
___________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or (e) [ ]
___________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
___________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 3,224,332 shares of Common Stock underlying
currently exercisable warrants.
SHARES ____________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY - 0 - shares
EACH ____________________________________________________
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 3,224,332 shares of Common Stock underlying
WITH currently exercisable warrants.
___________________________________________________________________
10 SHARED DISPOSITIVE POWER
- 0 - shares
___________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,224,332 shares of Common Stock underlying currently
exercisable warrants.
________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
___________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.66%
___________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
___________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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Reference is made to the Schedule 13D previously filed
under date of February 5, 1996 (the "Schedule 13D") by Kenneth G.
Langone (the "Filing Person"), relating to the Common Stock, $.10
par value (the "Common Stock") of HEARx Ltd., a Delaware
Corporation (the "Issuer"). Capitalized terms used and not defined
herein will have the meanings given to them in the Schedule 13D
Item 4. Purpose of the Transaction.
On May 7, 1996, holders of a majority of the Issuer's
1996 Senior Preferred Stock ("1996 Preferred"), including the
Filing Person, delivered their written consent (the "Consent") to
the issuance by the Issuer of one or more newly designated series
of convertible preferred stock in offerings under Regulation D and
Regulation S under the Securities Act of 1933, as amended, in an
aggregate amount not to exceed $30,000,000 (the "Permitted
Offerings"). The Consent was conditioned on the occurrence of the
following immediately upon the first closing relating to any of the
Permitted Offerings: (i) the Issuer applying $6,000,000 from the
proceeds of the Permitted Offerings and/or otherwise available
funds to redeem all outstanding 1996 Preferred; (ii) the payment by
the Issuer of certain legal fees and (iii) the delivery by the
Issuer of its agreement (the "Issuer Agreement") that: (a) it
shall, within ten days of the date of the Consent, issue to the
holders of the Issuer's Class A Warrants additional warrants (the
"Additional Class A Warrants") to purchase an aggregate of 161,390
shares of Common Stock, which shall have terms identical to the
Class A Warrants; (b) it shall, within ten days of the date of the
Consent, issue and deliver to the holders of the $.63 Warrants
additional warrants (the "Additional $.63 Warrants") to purchase a
total of 33,278 shares of Common Stock, which shall have terms
identical to the $.63 Warrants and (iii) Invemed shall have no
obligation to transfer the $.63 Director Warrants to the Company.
In accordance with the terms of the Consent, on May 7,
1996, the Company redeemed all 1996 Preferred at the redemption
price of $1,000 per share, and delivered the Issuer Agreement. In
connection with the redemption of the Senior Preferred, the Class B
Warrants were also redeemed at a redemption price of $.01 per
share. As a result, the Filing Person received $1,000,000 for the
redemption of his 1,000 shares of 1996 Preferred, and $6,666.67 for
the redemption of Class B Warrants to purchase 666,667 shares of
Common Stock. In addition, pursuant to the Issuer Agreement, the
Filing Person received 26,898 Additional Class A Warrants and
20,102 Additional $.63 Warrants.
The Filing Person and other Investors consented to
certain changes in the terms of the Registration Rights Agreement
for the benefit of purchasers of the Company's 1996 Convertible
Preferred Stock, Series B-1 and Series B-2 (the "Registration
Rights Consent"). The Consent and the Registration Rights Consent
are filed as exhibits hereto. The form of Issuer Agreement is
included as Attachment A to the Consent.
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Item 5. Interest in Securities of the Issuer.
(a) The Filing Person beneficially owns 3,224,332 shares
of Issuer Common Stock, which includes 1,818,182 shares underlying
the Class A Warrants, 26,898 shares underlying the Additional Class
A Warrants, 1,359,150 shares underlying the $.63 Warrants and
20,102 shares underlying the Additional $.63 Warrants. The shares
beneficially owned by the Filing Person constitute 4.66% of the
Company's outstanding Common Stock, assuming exercise of all of the
Issuer's warrants held by the Filing Person. Including the Filing
Person's holdings, upon the initial issuance of Issuer securities
under the SPA, 1,117 shares of 1996 Preferred, 2,030,909 Class A
Warrants, 774,667 Class B Warrants and 1,950,000 $.63 Warrants were
beneficially owned in the aggregate by the executive officers and
directors of Invemed and the stockholders of Invemed's parent
corporation. As a result of the transactions described in Item 4
above, these persons beneficially own 2,030,909 Class A Warrants,
30,045 Additional Class A Warrants, 1,950,000 $.63 Warrants and
28,841 Additional $.63 Warrants. Following the Company's agreement
that the $.63 Director Warrants need not be returned to the Issuer,
Invemed transferred the $.63 Director Warrants and $.63 Additional
Warrants to purchase 3,698 shares of Common Stock (issued in
respect of the $.63 Director Warrants in accordance with the terms
of the Issuer Agreement) to an unaffiliated third party to whom it
undertook to transfer the $.63 Director Warrants in connection with
the initial investment by the Investors in the Issuer's securities.
(b) The Filing Person has sole power to vote or to direct
the vote, and sole power to dispose or direct the disposition, of
the reported shares.
(c) See Item 4 for information as to the Filing Person's
transactions in Issuer securities on May 7, 1996.
(e) The Filing Person ceased to be beneficial owner of
more than five percent of the Common Stock on March 15, 1996 as a
result of the conversion of all of the Issuer's then outstanding
Preferred Stock (other than the 1996 Preferred) into Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
See Item 4.
Item 7. Material to Be Filed as Exhibits.
a) Consent, dated May 7, 1996 of the holders of a
majority of the 1996 Preferred.
b) Consent letter, dated May 7, 1996, relating to the
Registration Rights Agreement.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.
May 23, 1996
(Date)
/s/Kenneth G. Langone
(Signature)
Kenneth G. Langone
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Exhibit (a)
Written Consent of Holders of a Majority of the Shares of 1996
Senior Preferred Stock, par value $1.00 per share, of HEARx Ltd.
The undersigned, as holders of a majority of the outstanding
shares of 1996 Senior Preferred Stock, $1.00 par value (the "1996
Senior Preferred Stock"), of HEARx, Ltd. (the "Company"), hereby
consent to the issuance by the Company of one or more newly
designated series of convertible Preferred Stock in offerings made
pursuant to Regulation S and Regulation D promulgated under the
Securities Act of 1933, as amended (the "Offerings"), in an
aggregate amount not to exceed $30,000,000, provided that
immediately upon the first closing relating to any of the
Offerings, (i) the Company shall apply $6,000,000 from the proceeds
of the Offering and/or otherwise available funds to redeem, and
shall redeem, all outstanding 1996 Senior Preferred Stock in
accordance with the Certificate of Designations, Preferences and
Rights of the 1996 Senior Preferred Stock (the "Certificate") filed
with the Secretary of State of the State of Delaware on January 26,
1996; (ii) the Company shall pay all unpaid legal fees of Morgan,
Lewis & Bockius LLP (a) payable pursuant to Section 8.6 of the
Stock Purchase Agreement, dated January 26, 1996, between the
Company and the Investors (as defined therein) (the "Stock Purchase
Agreement") and (b) in connection with their review and preparation
of documentation with respect to this consent and related matters;
and (iii) the Company shall deliver to the Investors (as defined in
the Stock Purchase Agreement) its agreement in the form attached
hereto as Attachment A that: (x) it shall, within 10 days of the
date hereof, issue and deliver to the holders of the Class A
Warrants sold pursuant to the Stock Purchase Agreement (the "Class
A Warrants") additional warrants to purchase a total of 161,390
shares of Common Stock of the Company, $.10 par value (the
"Additional Class A Warrants"), which shall have terms identical to
the Class A Warrants (the number of shares underlying the
Additional Class A Warrants to be issued and delivered to each such
holder shall be in the same proportion as the number of shares
underlying Class A Warrants currently held by such holder bears to
the total number of shares underlying all Class A Warrants
currently outstanding); (y) it shall, within 10 days of the date
hereof, issue and deliver to the holders of the Invemed Warrants
(as defined in the Stock Purchase Agreement), additional warrants
to purchase a total of 32,278 shares of Common Stock of the
Company, $.10 par value (the "Additional Invemed Warrants"), which
shall have terms identical to the Invemed Warrants (the number of
shares underlying the Additional Invemed Warrants to be issued and
delivered to each such holder shall be in the same proportion as
the number of shares underlying Invemed Warrants currently held by
such holder bears to the total number of shares underlying all
Invemed Warrants currently outstanding); and (z) Invemed has no
obligation to return any Invemed Warrants to the Company pursuant
to Section 6.1 of the Stock Purchase Agreement (with respect to
Clauses (x) and (y) above, the number of shares underlying of
warrants issued to each holder shall be subject to adjustment by
Invemed Associates, Inc. to eliminate fractions).
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We hereby waive the requirement in the Certificate that notice
of redemption of the 1996 Senior Preferred Stock be given 10 days
prior to the date fixed for redemption.
This consent may be executed in one or more counterparts, and
shall be effective when at least one counterpart has been executed
by each of the undersigned.
IN WITNESS WHEREOF, the undersigned have executed this Consent
as of May 7, 1996.
No. of Shares: 1,000 /s/ Stanley Druckenmiller
Stanley Druckenmiller
No. of Shares: 1,000 /s/ Kenneth G. Langone
Kenneth G. Langone
No. of Shares: 1,540 /s/ George Soros
George Soros
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Attachment A
To the Investors listed on Schedule A (the "Investors") of the
Stock Purchase Agreement by and among HEARx Ltd. (the "Company"),
Invemed Associates, Inc. ("Invemed") and the Investors, dated
January 26, 1996 (the "Stock Purchase Agreement"):
We have asked the holders of a majority of the outstanding 1996
Preferred Stock, par value $1.00 per share, to consent to certain
offerings of Preferred Stock of the Company pursuant to Regulations
D and S promulgated under the Securities Act of 1933, as amended.
In consideration of the delivery of such consent, the receipt of
which is hereby acknowledged, we hereby agree as follows:
1. The Company shall, within 10 days of the date hereof,
issue and deliver to the holders of the Class A Warrants sold
pursuant to the Stock Purchase Agreement (the "Class A Warrants")
additional warrants to purchase a total of 161,390 shares of Common
Stock of the Company, $.10 par value (the "Additional Class A
Warrants"), which shall have terms identical to the Class A
Warrants (the number of shares underlying the Additional Class A
Warrants to be issued and delivered to each such holder shall be in
the same proportion as the number of shares underlying Class A
Warrants currently held by such holder bears to the total number of
shares underlying all Class A Warrants currently outstanding). The
number of shares underlying warrants issued to each holder shall be
subject to adjustment by Invemed Associates, Inc. to eliminate
fractions.
2. The Company shall, within 10 days of the date hereof,
issue and deliver to the holders of the Invemed Warrants (as
defined in the Stock Purchase Agreement), additional warrants to
purchase a total of 33,278 shares of Common Stock of the Company,
$.10 par value (the "Additional Invemed Warrants"), which shall
have terms identical to the Invemed Warrants (the number of shares
underlying the Additional Invemed Warrants to be issued and
delivered to each such holder shall be in the same proportion as
the number of shares underlying Invemed Warrants currently held by
such holder bears to the total number of shares underlying all
Invemed Warrants currently outstanding). The number of shares
underlying warrants issued to each holder shall be subject to
adjustment by Invemed Associates, Inc. to eliminate fractions.
3. Invemed Associates, Inc. has no obligation to return any
Invemed Warrants to the Company pursuant to Section 6.1 of the
Stock Purchase Agreement.
Very truly yours,
HEARx, Ltd.
Dated: May __, 1996
By: Paul A. Brown, M.D., President
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Exhibit (b)
HEARx Ltd.
471 Spencer Drive
West Palm Beach, FL 33049
Ladies and Gentlemen:
In order to induce those potential investors in the proposed equity
financing by HEARx Ltd. (the "Company") involving the issuance of
1996 Convertible Preferred Stock, Series B-1 and Series B-2 (the
"Financing"), to proceed with their investment, the undersigned
holders of at least 66 2/3% of the "Registrable Securities," as
such term is defined in the Registration Rights Agreement, dated
January 26, 1996, by and among the Company, Invemed Associates,
Inc. ("Invemed") and the Investors (the "Investors") listed therein
(the "January Registration Rights Agreement") hereby agree as
follows, provided that (i) all of the Company's 1996 Preferred
Stock, par value $1.00 per share, has been redeemed by the Company
in accordance with the Certificate of Designations, Preferences and
Rights of the 1996 Preferred Stock, par value $1.00 per share, of
the Company, filed with the Secretary of State of the State of
Delaware on January 26, 1996 and (ii) the Company shall deliver to
Invemed and the Investors its agreement, in the form attached as
Attachment A to the Written Consent of Holders of a Majority of the
Shares of 1996 Senior Preferred Stock, par value $1.00 per share,
of the Company, of even date herewith, that: (x) it shall, within
10 days of the date hereof, issue and deliver to the holders of the
Class A Warrants (the "Class A Warrants") sold pursuant to the
Stock Purchase Agreement, dated January 26, 1996, among the
Company, Invemed and the Investors (the "Stock Purchase Agreement")
additional warrants to purchase a total of 161,390 shares of Common
Stock of the Company, $.10 par value (the "Additional Class A
Warrants"), which shall have terms identical to the Class A
Warrants (the number of shares underlying the Additional Class A
Warrants to be issued and delivered to each such holder shall be in
the same proportion as the number of shares underlying Class A
Warrants currently held by such holder bears to the total number of
shares underlying all Class A Warrants currently outstanding); (y)
it shall, within 10 days of the date hereof, issue and deliver to
the holders of the Invemed Warrants (as defined in the Stock
Purchase Agreement), additional warrants to purchase a total of
32,278 shares of Common Stock of the Company, $.10 par value (the
"Additional Invemed Warrants"), which shall have terms identical to
the Invemed Warrants (the number of shares underlying the
Additional Invemed Warrants to be issued and delivered to each such
holder shall be in the same proportion as the number of shares
underlying Invemed Warrants currently held by such holder bears to
the total number of shares underlying all Invemed Warrants
currently outstanding); and (z) Invemed has no obligation to return
any Invemed Warrants to the Company pursuant to Section 6.1 of the
Stock Purchase Agreement (with respect to Clauses (x) and (y)
above, the number of shares underlying warrants issued to each
holder shall be subject to adjustment by Invemed to eliminate
fractions):
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1. The holders of registration rights pursuant to a
Registration Rights Agreement to be executed in connection with the
Financing (the "Financing Holders") may exercise one demand
registration right that excludes any securities that holders of
Registrable Securities could otherwise include in such registration
by virtue of "piggyback" registration rights that holders of
Registrable Securities now hold, provided, that the holders of
Registrable Securities may exclude from a demand registration
initiated by holders of Registrable Securities, securities the
Financing Holders may otherwise include by virtue of their
"piggyback" registration rights.
2. The holders of the 1996 Convertible Preferred Stock,
Series B-1 and Series B-2 shall not be subject to the limitation
set forth in paragraph 4(b) of the January Registration Rights
Agreement so long as any public sale or distribution of Common
Stock by such holders is (a) pursuant to the Form S-3 registration
statement contemplated by paragraph 2(a) of the Registration Rights
Agreement attached hereto as Exhibit A (but the attachment of such
agreement hereto shall not constitute our approval of any of the
terms set forth therein); or (b) pursuant to Rule 144 under the
Securities Act of 1933.
This letter may be executed in one or more counterparts, and shall
be effective when at least one counterpart has been executed by
holders of 66 2/3% of the Registrable Securities
The undersigned have executed this consent letter as of the 7th day
of May, 1996.
Very truly yours,
No. of Registrable
Securities
/s/ George Soros 3,826,666
George Soros
/s/ Stanley Druckenmiller 2,484,849
Stanley Druckenmiller
/s/ Gary Gladstein 621,213
Gary Gladstein
/s/ Elizabeth Larson 745,455
Elizabeth Larson
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/s/ Kenneth G. Langone 3,844,999
Kenneth G. Langone
248,485
Bruce M. Langone
/s/ Cristina H. Kepner 583,227
Cristina H. Kepner
/s/ Carlisle Jones 174,242
Carlisle Jones
/s/ Harris Berenholz 174,242
Harris Berenholz
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