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As filed with the Securities and Exchange Commission on August 31, 1999.
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
RENEX CORP.
(Exact name of registrant as specified in its charter)
Florida
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
201 Alhambra Circle, Suite 800
Coral Gables, Florida 33314
(305) 448-2044
(Address including zip code, and telephone number, including area
code, of registrant's principal executive offices)
-----------------------------
JAMES P. SHEA
President/Chief Executive Officer
Renex Corp.
201 Alhambra Circle, Suite 800
Coral Gables, Florida 33314
(305) 448-2044
(Name and address, including zip code, and telephone number,
including area code, of agents for service)
With a Copy to:
BRYAN W. BAUMAN, ESQ.
Wallace, Bauman, Legon, Fodiman & Shannon, P.A.
1200 Brickell Avenue, Suite 1720
Miami, Florida 33131
(305) 444-9991
-----------------------------
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement has become effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Proposed
Proposed Maximum
Title of Each Class of Maximum Aggregate Amount of
Securities to be Amount to be Offering Price Offering Registration
Registered Registered Per Share(1) Price(1) Fee(1)
- ------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Common Stock, par value
$0.001 per share 495,420 $5.44 $2,695,085 $750
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------
(1) Pursuant to Rule 457(c), the fee is calculated on the basis of the
average of the bid and asked prices on August 25, 1999 on the NASDAQ
National Market for the Common Stock
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR
THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IS NOT A SOLICITATION OF AN OFFER TO BUY THESES SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, dated August 31, 1999
PROSPECTUS
495,420 Shares
RENEX CORP.
Common Stock
The shareholders named in the table included in the "Selling
Shareholders" section of this prospectus, which begins on page 10, are offering
all of the shares of common stock covered by this prospectus. The shares being
offered by these Selling Shareholders are issuable upon exercise of warrants
that they own.
The Selling Shareholders will sell their shares as described in the
"Plan of Distribution" section, which begins on page 13. We will not receive
any of the proceeds from the sale of shares of common stock by the Selling
Shareholders. However, in order for any Selling Shareholder to be able to sell
his shares of common stock, he will have to exercise his warrants and pay the
exercise price of such warrants. In such event, we will receive aggregate
proceeds from the exercise of the warrants totaling $3,390,513. We will pay the
costs, expenses and fees incurred in registering the shares. We estimate that
such costs will be around $15,000. The selling shareholder will be responsible
for its own selling and other expenses it may incur.
Our common stock is listed on the NASDAQ National Market System under
the symbol "RENX." The last reported sale price of the common stock on August
25, 1999 was $5.375 per share.
INVESTING IN RENEX COMMON STOCK INVOLVES CERTAIN RISKS. YOU SHOULD
CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR
DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ____________, 1999.
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WHERE YOU CAN FIND MORE INFORMATION
Renex Corp. ("Renex") files annual and special reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). You can inspect and copy the Registration Statement on Form
S-3 of which this Prospectus is a part, as well as reports, proxy statements
and other information filed by Renex, at the public reference facilities
maintained by the Commission at 450 Fifth Street, N. W., Washington, D.C. 20549
and at the following regional offices of the Commission: Seven World Trade
Center, Suite 1300, New York, New York, 10048, and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of these materials can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N. W.,
Washington, D.C. 20549 upon payment of the prescribed fees. Please call the
Commission at 1-800-SEC-0330 for further information regarding the operations
of its public reference rooms. The Commission also maintains a World Wide Web
site at http:\\www.sec.gov that contains reports, proxy and information
statements, and other information regarding registrants (like Renex) that file
electronically with the Commission.
Renex has filed with the Commission a Registration Statement (which
term shall include all amendments, exhibits and schedules thereto) on Form S-3
under the Securities Act of 1933, as amended (the "Securities Act"), which this
prospectus is a part. This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and to which
reference is hereby made. Statements made in this Prospectus as to the contents
of any document referred to are not necessarily complete. With respect to each
such document filed as an exhibit to the Registration Statement, reference is
made to the exhibit for a more complete description of the matter involved, and
each such statement shall be deemed qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows this Prospectus to "incorporate by reference"
certain other information that Renex files with the Commission, which means
that we can disclose important information to you by referring to those
documents. The information incorporated by reference is an important part of
this Prospectus, and information that we file later with the Commission will
automatically update and replace this information. We incorporate by reference
the documents listed below and any future filings made by us with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until
we have sold all of the securities that we have registered.
(1) Our Annual Report on Form 10-K for the fiscal year ended December
31, 1998.
(2) Our Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1999.
(3) Our Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1999.
(4) Our Proxy Statement dated May 7, 1999 for our Annual Meeting of
Shareholders which was held on June 30, 1999.
If you make a request for such information in writing or by telephone,
we will provide you without charge, a copy of any or all of the information
incorporated by reference in the registration statement of which this
Prospectus is a part. Requests for such information should be in writing
addressed to JAMES P. SHEA, PRESIDENT/CHIEF EXECUTIVE OFFICER, 201 ALHAMBRA
CIRCLE, SUITE 800, CORAL GABLES, FLORIDA 33134 (TELEPHONE: (305) 448-2044).
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FORWARD-LOOKING STATEMENTS
We have made-forward-looking statements in this Prospectus (and in the
documents that are incorporated by reference) that are subject to risks and
uncertainties. Forward-looking statements include information concerning
possible or assumed future results of our operations. Also, when we use such
words as "believes," "expects," "anticipates" or similar expressions, we are
making forward-looking statements. You should note that an investment in our
securities involves certain risks and uncertainties that could affect our
future financial results. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth in "Risk Factors" and elsewhere in this Prospectus.
THE COMPANY
We provide dialysis and ancillary services to patients suffering from
chronic kidney failure, generally referred to as end stage renal disease
("ESRD"). As of June 30, 1999, we provided dialysis and ancillary services to
approximately 1,200 patients through 20 outpatient dialysis facilities and one
staff-assisted home dialysis program in eight states. In addition to outpatient
dialysis facilities, we provide inpatient dialysis services at 20 hospitals.
ESRD is the state of advanced chronic kidney disease characterized by
the irreversible loss of kidney function. A normal human kidney removes waste
products and excess water from the blood, preventing water overload, toxin
buildup and eventual poisoning of the body. Chronic kidney disease can be
caused by a number of conditions, including inherited diseases, diabetes,
hypertension and other illnesses. Patients suffering from ESRD require routine
dialysis treatments or kidney transplantation to sustain life.
Patients with ESRD generally receive dialysis treatments through a
dialysis facility, which may be a free-standing or a hospital-based outpatient
facility. The primary function of dialysis facilities is to provide ESRD
patients with life sustaining kidney dialysis, including both hemodialysis and
peritoneal dialysis. Our dialysis facilities are designed specifically for
outpatient hemodialysis and for the training of peritoneal dialysis and home
hemodialysis patients. We also provide a full range of ancillary services to
ESRD patients.
We were formed in July 1993 as a Florida corporation and opened our
first dialysis facility in March 1994. We maintain our executive offices at 201
Alhambra Circle, Suite 800, Coral Gables, Florida 33134. Our telephone number
at our corporate headquarters is (305) 448-2044.
RISK FACTORS
You should carefully consider the risks described below before making
an investment decision. The risks and uncertainties described below are not the
only ones facing Renex. Additional risks and uncertainties not presently known
to us or that we currently deem immaterial may also impair our business
operations. If any of the following risks actually occur, our business,
financial condition or results of operations could be materially and adversely
affected. In such case, the trading price of our common stock could decline,
and you may lose all or part of your investment.
DEPENDENCE ON MEDICARE AND MEDICAID -- If Medicare or Medicaid change
their reimbursement rates for dialysis, our revenue and earnings could
decrease.
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We are reimbursed for dialysis services primarily at fixed rates
established in advance under the Medicare ESRD program. If the government
changes the Medicare, Medicaid or similar government programs or reduces the
rates paid by those programs for our services, our revenues and earnings would
be materially reduced. Approximately 67% of our net revenue for 1998, 74% of
our net revenue for 1997 and 67% of our net revenues for 1996 consisted of
reimbursement from Medicare and Medicaid, including the administration of EPO
to treat anemia. EPO is a commonly used name for the drug erythropoietin, which
is sold under the brand name Epogen7. The U. S. Congress establishes the
maximum allowable charge Medicare can pay for dialysis treatment of Medicare
patients. We receive 80% of this charge from Medicare and attempt to collect
the balance from the patient, Medicaid or insurance companies, if any. The
initial rate for outpatient dialysis treatments was established in 1972 and
remained unchanged until 1983, when it was reduced from $138 per treatment to
$127 per treatment, on average. The rate was reduced again in 1986 to $125 per
treatment on average. The rate was increased to $126 per treatment on average
in 1991, which is the current rate. We cannot predict whether future rates
changes will be made. Any of the following actions, in addition to a rate
reduction, could cause our revenue and earnings to materially decline:
- An increase in operating costs that are subject to inflation,
such as labor and supply costs, without a corresponding increase
in reimbursement rates;
- The inclusion of some or all ancillary services, for which we
are now reimbursed separately in the flat reimbursement rate for
a standard dialysis treatment;
- Changes in laws, or the interpretations of laws which would
require us to modify our operations.
DEPENDENCE ON REIMBURSEMENT FOR EPO - If reimbursement for EPO
decreases, its costs increases or it becomes in short supply, then we could be
less profitable.
Approximately 22% of our net operating revenues in 1998 was generated
from EPO reimbursement. We receive a substantial majority of EPO reimbursement
through the Medicare and Medicaid programs. Any reduction in the rate of EPO
reimbursement through the Medicare and Medicaid programs could materially
reduce our revenues and earnings. From time to time, EPO reimbursement programs
have been, and in the future may be, subject to various legislative or
administrative proposals to reduce the EPO reimbursement rates. For example,
the U. S. Department of Health and Human Services, which operates the Medicare
program, and the Clinton Administration have endorsed a 10% decrease in the
Medicare reimbursement rates for EPO. Because we are unable to predict
accurately the possible effect the proposed reduction would have on the cost of
EPO or private reimbursement rates, we are unable to determine the net effect
these actions would have on our revenue and earnings. In addition, EPO is
produced by only one manufacturer. If the manufacturer, or other factors
interrupt the supply of EPO or the manufacturer raises prices, then our
revenues and earnings could decline.
DEPENDENCE ON REIMBURSEMENT FROM PRIVATE INSURERS - If payments by
private insurers, hospitals or managed care organizations decrease, our
revenues and earnings could decrease.
Approximately 33% of our net revenue in 1998 were from sources other
than Medicare and Medicaid. These sources include payments from private
insurers, managed care organizations and hospitals at rates that generally
exceed Medicare and Medicaid rates. If these private payors reduce their rates
or we experience a significant shift in our revenue mix toward additional
Medicare or Medicaid reimbursement, then our revenues and earnings would
decline. Any of the following events could have a material adverse effect on
our revenue and earnings:
- An increase in dialysis procedures reimbursed by private
insurers, managed care organizations or hospitals could cause
these organizations to reduce the rates they pay us;
- A portion of our business that is currently reimbursed by
private insurers or hospitals may become reimbursed by managed
care organizations, which currently have lower reimbursement
rates for our services;
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- The scope of coverage by Medicare or Medicaid under their
reimbursement rate could expand and, as a result, reduce the
extent of our services being reimbursed at the higher private
insurance rates.
OPERATIONS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION - If our
business is alleged or found to violate health care or other applicable laws,
our revenue and earnings could materially decrease.
Our business is subject to extensive, frequently changing, federal,
state and local regulation regarding the following:
- fraud and abuse prohibitions under Medicare and other health
care reimbursement laws;
- prohibitions and limitations on patient referrals;
- false claims prohibitions under health care reimbursement
programs;
- facility licensure requirements;
- health and safety requirements;
- environmental including medical waste disposal requirements.
Some of these laws may restrict or prohibit our business in certain
states. Much of this regulation, particularly in the areas of fraud and abuse
and patient referral, is complex and open to differing interpretations. Due to
the broad application of the statutory provisions and the absence in many
instances of regulations or court decisions addressing the specific
arrangements by which we conduct our business, including our medical director
and physician stockholder arrangements, governmental agencies could challenge
some of our practices under these laws. If any of our operations are found to
violate these laws, we may be subject to severe sanctions or be required to
alter or discontinue the challenged conduct. If we are required to alter our
practices, we may not be able to do so successfully. The occurrence of any of
these events could cause our revenue and earnings to decline.
RAPIDLY CHANGING HEALTH CARE INDUSTRY - Changes in the health care
delivery, financing or reimbursement systems could adversely affect our
business.
The health care industry in the United States is subject to changing
political, economic and regulatory influences that may impact our operations
and profitability. Health care organizations, public or private, may
dramatically change the way they operate and pay for services. Our business is
designed to function within the current health care financing and reimbursement
system. During the past several years, the health care industry has been
subject to increasing levels of government regulation of, among other things
reimbursement rates and levels of capital expenditures. In addition proposals
to reform the health care industry have been considered by the federal
government. It is uncertain what legislation or health care reform will
ultimately be implemented, or whether other changes in the administration or
interpretation of government health care programs will occur.
RISKS INHERENT IN GROWTH STRATEGY - The acquisition and development of
additional dialysis facilities may strain our existing resources and present
integration problems.
Much of our historical growth has come from acquisitions and we expect
to continue to pursue growth through the acquisition and development of
dialysis facilities. Much of our success in implementing our growth strategy
depends, in part, on the following:
- the continued availability of suitable acquisition candidates;
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- identifying suitable locations and medical directors for de novo
facilities; and
- successfully integrating and managing the operations of any
acquired companies and developed facilities.
Competition for acquisitions in the dialysis industry is intense, making the
cost of acquiring dialysis facilities more expensive. Many of these competitors
have significantly greater financial and management resources. Even if we are
able to acquire facilities on favorable terms, such businesses may not perform
well enough to justify the initial investment. Acquisitions involve a number of
special risks related to their integration into our operating system. Our
inability to integrate these acquisitions could have possible adverse effects
on our operating results. This may be caused due to diversion of management's
attention, our failure to retain key personnel of the acquired companies, the
amortization of acquired intangible assets or lack of available resources. We
may then not be able to achieve the anticipated benefits from an acquisition in
a timely manner, which could lead to substantial costs and delays or other
operational, technical or financial problems.
POSSIBLE DILUTIVE EFFECT OF ACQUISITIONS ON SHAREHOLDERS - We may
dilute the ownership of our existing shareholders if we complete acquisitions
by the issuance of common stock or by incurring additional goodwill.
We may issue equity securities in future acquisitions that could be
dilutive to our shareholders. We also may incur additional debt and
amortization expense related to goodwill and other intangible assets in future
acquisitions. All of our acquisitions have utilized the "purchase" accounting
method in acquisitions. In all such cases, we have recorded goodwill (the
excess of acquisition cost over identifiable tangible and intangible assets)
and other intangible assets, which are then amortized yearly against our
earnings at a blended average life of 22 years. We had approximately $8.0
million of goodwill and other intangibles, net as of June 30, 1999.
Opportunities may be available in the future to use the "pooling of interests"
accounting method for acquisitions, which does not result in recording
goodwill. However, accounting policy makers have announced that they are
considering substantially or completely curtailing the pooling of interests
method, which would result in more goodwill and associated amortization expense
for future acquisitions. Further, accounting policy makers have also announced
that they may reduce the allowable life over which goodwill may be amortized,
which would thereby increase amortization expense in each year. Interest
expense on additional debt and amortization expense from acquisitions may
significantly reduce our profitability.
DEPENDENCE UPON PHYSICIAN REFERRALS - The loss of key referring
physicians could reduce our patient base, revenues and earnings.
Our success is highly dependent on referrals of ESRD patients by
nephrologists who practice in the communities served by our dialysis
facilities. It is customary in the dialysis industry that one or a few
physicians account for all or a significant portion of a facility's patient
referral base. The loss of one or more key referring physicians at a particular
facility could materially reduce the revenues of that facility and could
adversely affect that facility=s profitability Financial relationships with
physicians and other referral sources are highly regulated. In the event that
any of our relationships with referring nephrologists are determined to violate
any of these applicable laws, we could be subject to criminal and civil fines,
as well as expulsion or suspension from the Medicare and Medicaid programs.
INTENSE COMPETITION WITHIN INDUSTRY - If we are unable to effectively
compete in our markets, we could lose market share and our ability to be
profitable will suffer.
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The dialysis industry is fragmented, rapidly consolidating and highly
competitive. We compete within the dialysis industry for the acquisition of
existing facilities, for relationships with referring physicians and for
relationships with nephrologists to serve as medical directors for de novo
facilities. There are several large dialysis companies that are part of larger
companies that also manufacture dialysis equipment, which allows them to lower
equipment costs and be more profitable. Several of our competitors, including
the equipment manufacturers, are larger and have significantly greater
financial and marketing resources than us. We also experience competition from
local independent facilities owned by community physicians, hospitals and other
entities that provide dialysis services. There can be no assurance that we will
be able to compete effectively with any such providers. Competition has
increased the cost of acquiring existing facilities and there can be no
assurance that these costs will not continue to increase as a result of future
industry consolidation, or that we will be able to compete effectively for such
acquisitions.
DEPENDENCE UPON KEY PERSONNEL - If we lose any of our executive
officers, or are unable to attract and retain qualified management personnel
and medical directors, our ability to run our business could be adversely
affected and our revenue and earnings could decline.
We are dependent upon the services and management skills of our
executive officers, James P. Shea, President/Chief Executive Officer and
Orestes L. Lugo, Senior Vice President/Chief Financial Officer. Mr. Shea has
been with us since our formation. Mr. Lugo has served in his capacity since
August 1995. Although we have entered into employment agreements with Messrs.
Shea and Lugo and the employment agreements contain restrictive covenants
following termination, the services of these individuals would be difficult to
replace. We do not maintain key man life insurance on either officer. Further,
our growth strategy will depend, in part, on our ability to attract and retain
additional key management, marketing and operating personnel, as well as
medical directors for our dialysis facilities. Such persons are in high demand
and are often subject to offers from competitors.
ANTI-TAKEOVER PROVISIONS - Provisions in our charter may deter a
change of control which our shareholders may otherwise determine to be in their
best interests.
Our certificate of incorporation and bylaws and Florida law include
provisions which may deter hostile takeovers, delay or prevent changes in
control or changes in our management, or limit the ability of our stockholders
to approve transactions that they may otherwise determine to be in their best
interests. These provisions include:
- A staggered Board of Directors which provides that each elected
director serves for a term of three years. The staggered board
requires two annual meetings to replace a majority of the Board
of Directors.
- A provision requiring that our stockholders may take action only
at a duly called annual or special meeting of our stockholders
and not by written consent;
- A provision requiring a stockholder to give at least 90 days'
advance notice of a proposal or director nomination that the
stockholder desires to present at any annual or special meeting
of stockholders;
- A provision granting our board of directors the authority to
issue up to five million shares of preferred stock and to
determine the rights and preferences of the preferred stock
without the need for further stockholder approval. The existence
of this "blank-check" preferred stock could discourage an
attempt to obtain control of us by means of a tender offer,
merger, proxy contest or otherwise. Furthermore, this
"blank-check" preferred stock may have other rights, including
economic rights, senior to our common stock. Therefore, issuance
of the preferred stock could have an adverse effect on the
market price of our common stock.
- A shareholder rights plan which would substantially dilute the
interest sought by an acquiror and make such an acquisition more
expensive.
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Each of these factors may have the effect of delaying, deferring or
preventing an unsolicited takeover, even if such a change in control were at a
premium price or favored by a majority of unaffiliated stockholders.
In addition, Florida has enacted legislation that may deter or inhibit
our takeover by another company. The Florida Control Share Act generally
provides that in certain circumstances, shares acquired in excess of certain
specified thresholds, starting at 20%, will not possess any voting rights
unless such voting rights are approved by a majority vote of a corporation's
disinterested shareholders. The Florida Affiliated Transactions Act generally
requires super-majority approval by disinterested directors or shareholders of
certain specified transactions between a corporation and holders of more than
10% of the outstanding shares of the corporation or their affiliates.
CONTROL BY EXISTING MANAGEMENT - Certain members of our board of
Directors own a significant portion of our outstanding common stock.
Our Board of Directors, officers and their respective affiliates
beneficially own 36% of our outstanding common stock. Although these persons do
not have any agreements or understandings to act or vote in concert, any such
agreement, understanding or acting in concert would make it difficult for
others to elect the entire Board of Directors, or to control the disposition of
any matter submitted to a vote of shareholders.
YEAR 2000 ISSUES - Our inability or the inability of our vendors to be
Year 2000 computer compliant may result in the loss of revenue or increase in
costs.
Many existing computer programs use only two digits to identify a year
in the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century and, if not
corrected, could fail or create erroneous results by or at the Year 2000. Our
Year 2000 issues could reside in our own systems and in the systems of third
parties with whom we have relationships that are material to our operations,
such as reimbursement to us from fiscal intermediaries, governmental agencies
and private payors along with utility companies, suppliers and other service
providers to our facilities. We have undertaken, but not completed, an
assessment of our Year 2000 issues. The assessment included testing of our
internal systems and contacting third party vendors and payors regarding their
systems. Such assessment indicates that there should not be any material
operational issues associated with our internal computer systems facilities or
equipment for Year 2000. However, until we have completed our assessment, we
cannot be sure that our efforts to address our Year 2000 issues are appropriate,
adequate or complete. Further, due to the overall complexity of the Year 2000
issues and the uncertainty surrounding third party responses to Year 2000
issues, undetected errors or non-compliance of third party systems or our
failure to prepare adequately for the results of those errors or defects could
cause us material unanticipated problems or costs. The extent and magnitude of
the Year 2000 problem as it will affect us, both before, and for some period
after January 1, 2000, are difficult to predict or quantify for a number of
reasons. Among the most important are:
- our lack of control over third party systems that are critical
to our operations, including those of telecommunications and
utility companies and governmental and non-governmental payors.
- the complexity of testing interconnected networks and
applications that depend on third party networks, and
- the uncertainty surrounding how others will deal with liability
issues raised by Year 2000 related failures.
Year 2000 issues could cause significant disruptions in our cash flow and
operations, which could cause our costs to increase and our revenue and
earnings to decline.
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FORWARD LOOKING STATEMENTS
Some of the information in this prospectus contains forward-looking
statements that involve substantial risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "intend," "estimate" and "continue" or similar words.
You should read statements that contain these words carefully for the following
reasons:
- the statements discuss our future expectations;
- the statements contain projections of our future earnings or of
our financial condition; and
- the statements state other "forward-looking" information.
We believe it is important to communicate our expectations to our
investors. There may be events in the future, however, that we are not
accurately able to predict or over which we have no control. The risk factors
listed above, as well as any cautionary language in or incorporated by
reference into this prospectus, provide examples of risks, uncertainties and
events that may cause our actual results to differ materially from the
expectations we describe in our forward-looking statements. The SEC allows us
to "incorporate by reference" the information we file with them, which means we
can disclose important information to you by referring you to those documents.
Before you invest in our common stock, you should be aware that the occurrence
of any of the events described in the above risk factors, elsewhere in or
incorporated by reference into this prospectus and other events that we have
not predicted or assessed could have a material adverse effect on our earnings,
financial condition and business. If the events described above or other
unpredicted events occur, then the trading price of our common stock could
decline and you may lose all or part of your investment.
USE OF PROCEEDS
We will not receive any proceeds from the sale of Common Stock by the
Selling Shareholders. However, in order for any Selling Shareholder to sell his
shares, he will be required to exercise the warrants which entitle him to
purchase such shares. We will receive $3,390,513 in the aggregate if all
Selling Shareholders exercise their warrants.
SELLING SHAREHOLDERS
The following table lists (a) the name of the Selling Shareholders (b)
the number of shares of common stock beneficially owned by each Selling
Shareholder prior to the offering (c) the number of shares being offered under
this prospectus by such Selling Shareholders; and (d) the number of shares of
common stock beneficially owned by each Selling Shareholder after the
completion of the offering. The table assumes that the Selling Shareholders
will sell all shares they are offering under this prospectus, and that the
Selling Shareholders will not acquire additional shares of our common stock
prior to completion of this offering. The shares are being registered to permit
secondary trading of the Shares, and the Selling Shareholders may offer such
shares for resale from time to time. See "Plan of Distribution."
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares to be Beneficially
Prior to Offering(1) Owned After Offering
--------------------------- Shares Being -------------------------
Name and Address of Selling Shareholder Shares Percent(2) Offered Number Percent(3)
--------------------------------------- ----------- ----------- ------------ ------ ---------
<S> <C> <C> <C> <C> <C>
JEFFREY APPEL 38,334(4) * 38,334 --- ---
530 East 76th Street
New York, N. Y. 10021
</TABLE>
-9-
<PAGE> 12
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares to be Beneficially
Prior to Offering(1) Owned After Offering
--------------------------- Shares Being -------------------------
Name and Address of Selling Shareholder Shares Percent(2) Offered Number Percent(3)
--------------------------------------- ----------- ----------- ------------ ------ ---------
<S> <C> <C> <C> <C> <C>
BISCAYNE NATIONAL CORP. 106,122(5) 1.54 1,988 104,134 1.41
1200 Brickell Avenue, Suite 1720
Miami, Florida 33131
BMW INVESTMENTS 6,667(4) * 6,667 --- ---
100 Jericho Quadrangle, Suite 230
Jericho, N. Y. 11753
BRIAN BRILLE 10,000(6) * 5,000 5,000 *
330 West 58th Street, Apt. 16-A
New York, N. Y. 10019
CALIZDAS, LTD. 37,651(7) * 3,750 33,901 *
P.O. Box 1350, Georgetown
Grand Cayman, Cayman Island
British West Indies
TODD A. FODIMAN, ESQ. 750(8) * 750 --- ---
1200 Brickell Avenue, Suite 1720
Miami, Florida 33131
BRUCE GALLOWAY 25,000(4) * 25,000 --- ---
216 East 47th Street, Apt. 2A
New York, N. Y. 10017
IRA GREENSPAN 38,334(4) * 38,334 --- ---
1675 York Avenue, Apt 10K
New York, N. Y. 10128
JOHN E. HUNT, SR. 85,659(9) 1.21 3,750 81,909 1.08
P.O. Box 14015
Tallahassee, FL 32317-1015
KENNETH H. KLINE AND CYNTHIA E. KLINE, 3,750(8) * 3,750 --- ---
Ten/ent.
644 Altara
Coral Gables, FL 33143
ORESTES L. LUGO 164,555(10) 2.35 3,750 160,805 2.14
1900 Sunset Harbor Drive, Unit 1102
Miami Beach, FL 33140
NEEDHAM & COMPANY, INC. 150,000(11) 2.13 150,000 --- ---
445 Park Avenue
New York, N. Y. 10022
JOEL C. NEWMAN 3,334(4) * 3,334 --- ---
245 East 58th Street, PH-A
New York, N. Y. 10022
</TABLE>
-10-
<PAGE> 13
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares to be Beneficially
Prior to Offering(1) Owned After Offering
--------------------------- Shares Being -------------------------
Name and Address of Selling Shareholder Shares Percent(2) Offered Number Percent(3)
--------------------------------------- ----------- ----------- ------------ ------ ---------
<S> <C> <C> <C> <C> <C>
WILLIAM P. O'CONNOR 5,666(12) * 1,013 4,653 *
117 Abingdon Court
Cary, NC 26513-3243
ALAN S. PAREIRA & BARBARA PAREIRA, JOINT 24,734(13) * 7,500 17,234 *
TENANTS BY THE ENTIRETY
12440 S. W. 63 Avenue
Miami, FL 33156
GEORGE PEDRAZA 20,417(8) * 3,750 16,668 *
66 W. Flagler Street, Suite 600
Miami, FL 33130
MERRILL, LYNCH, PIERCE, 50,600(14) * 15,000 35,600 *
FENNER & SMITH CUST
FPO Milton J. Wallace, IRRA
8840 S.W. 136th Street
Miami, Florida
THE ESTATE OF 21,734(15) * 3,750 17,984 *
IMRE J. ROSENTHAL
1370 Broadway
New York, N. Y. 10018
ARTHUR SHAPIRO AND 771,338(16) 11.07 3,750 761,850(16) 10.21
RIVKA SHAPIRO, TEN/ENT.
3141 Royal Palm Avenue
Miami Beach, FL 33140
JAMES P. SHEA AND JULIE D. SHEA, JTWROS 410,113(17) 5.73 15,000 395,113 5.17
10295 Collins Avenue, Unit #1420
Bal Harbour, FL 33154
CHARLES J. SIMONS 61,549(18) * 7,500 54,049 *
3646 S. W. 57th Avenue
Miami, FL 33133
SMITH BARNEY, INC. AS IRA ROLLOVER 20,984(19) * 3,750 17,234 *
CUSTODIAN FOR ARTHUR SHAPIRO
1000 E. Hallandale Beach Blvd.
Hallandale, FL 33009
VECTOR SECURITIES INTERNATIONAL, INC. 150,000(11) 2.13 150,000 --- ---
1751 Lake Cook Road, Suite 350
Deerfield, IL 60015
</TABLE>
- -----------------------
* Less than one (1%) percent.
-11-
<PAGE> 14
(1) Except as set forth herein, all securities are directly owned and the
sole investment and voting power are held by the person named. A
person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days of July 31, 1999 upon the
exercise of options or warrants.
(2) Based upon 6,879,466 shares of Common Stock issued and outstanding.
Each beneficial owner's percentage is determined by assuming that all
such exercisable options or warrants that are held by such person (but
not those held by any other person) have been exercised.
(3) Based upon 7,374,886 shares of Common Stock issued and outstanding
assuming all warrants held by the Selling Shareholders are exercised.
(4) All such shares of common stock are issuable upon exercise of warrants
at an exercise price of $3.00 until November 15, 1999.
(5) Includes (i) 1,988 shares of common stock issuable upon exercise of
Series B Warrants at an exercise price of $6.00 per share until July
31, 2000 and which are being offered pursuant to this prospectus; and
(ii) 6,667 shares of common stock issuable upon the exercise of other
warrants. Milton J. Wallace, Chairman of the Board of the Company, is
an officer , director and controlling stockholder of Biscayne National
Corp.
(6) Includes (i) 5,000 shares of common stock issuable upon exercise of
warrants at an exercise price of $3.00 until November 15, 1999 which
are being offered pursuant to this prospectus; and (ii) 5,000 shares
of common stock issuable upon the exercise of other warrants.
(7) Includes (i) 3,750 shares of common stock issuable upon exercise of
Series B Warrants at an exercise price of $6.00 per share until July
31, 2000 and which are being offered pursuant to this prospectus; and
(ii) 8,334 shares of common stock issuable upon the exercise of other
warrants.
(8) All such shares of common stock are issuable upon exercise of Series B
Warrants.
(9) Includes: (i) 3,750 shares of common stock issuable upon exercise of
Series B Warrants; (ii) 8,341 shares of common stock issuable upon
exercise of stock options; (iii) 6,667 shares of common stock issuable
upon exercise of other warrants; (iv) 11,667 shares of common stock
owned by Mr. Hunt's spouse; and (v) 1,667 shares of common stock
issuable upon exercise of warrants owned by his spouse. Mr. Hunt
disclaims beneficial ownership of the shares owned by his spouse. Mr.
Hunt is a director of the Company.
(10) Includes: (i) 3,750 shares of common Stock issuable upon exercise of
Series B Warrants; (ii) 3,334 shares of common stock issuable upon
exercise of warrants; and (iii) 116,904 shares of common stock
issuable upon exercise of stock options. Mr. Lugo is the Senior Vice
President/Chief Financial Officer of the Company.
(11) All such shares of common stock are issuable upon exercise of warrants
at an exercise price of $8.56 until October 7, 2002 (the
"Representatives Warrants").
(12) Includes 1,013 shares of common stock issuable upon exercise of Series
B Warrants.
(13) Includes 7,500 shares of common stock issuable upon exercise of Series
B Warrants.
(14) Does not include the following securities owned by Mr. Wallace, the
beneficiary of the individual retirement account: (i) 556,000 shares
owned by Mr. Wallace and his wife (ii) 12,000 shares of Common Stock
owned by Mr. Wallace and his wife as custodian for a child; (iii)
106,122 shares of Common Stock (including 8,655 of Common Stock
issuable upon exercise of warrants and Series B Warrants) owned by a
corporation, of which Mr. Wallace is an officer, director and
controlling stockholder, and (iv) 88,091 shares of Common Stock
issuable upon exercise of stock options. Except as set forth herein,
all shares of Common Stock are owned jointly by Mr. Wallace and his
wife. Mr. Wallace is the Chairman of the Board of the Company.
(15) Includes 3,750 shares of common stock issuable upon exercise of Series
B Warrants.
-12-
<PAGE> 15
(16) Except as set forth herein, all shares of Common Stock are owned
jointly by Dr. Shapiro and his wife. Includes: (i) 17,234 shares of
Common Stock owned by Dr. Shapiro's Individual Retirement Account;
(ii) 39,876 shares of Common Stock issuable upon exercise of Stock
options; (iii)106,122 shares of Common Stock (including 8,655 shares
of Common Stock issuable upon exercise of warrants and Series B
Warrants) owned by a corporation, of which Dr. Shapiro is an officer
and director; (iv) 3,750 shares of Common Stock issuable upon exercise
of Series B Warrants; and (v) 3,750 shares of Common Stock issuable
upon exercise of Series B Warrants owned by Dr. Shapiro's Individual
Retirement Account. Dr. Shapiro is the Vice Chairman of the Board of
the Company. Shares to be Beneficially Owned After Offering assumes
the sale of the shares offered herein by Biscayne National Corp. and
Dr. Shapiro's Individual Retirement Account
(17) Except as set forth herein all shares of Common Stock and warrants are
owned jointly by Mr. Shea and his wife. Includes: (i) 225,513 shares
of Common Stock issuable upon exercise of Stock options; (ii) 33,334
shares of Common Stock issuable upon exercise of warrants; and (iii)
15,000 shares of Common Stock issuable upon exercise of Series B
Warrants. Mr. Shea is the President/Chief Executive Officer and a
Director of the Company.
(18) Includes: (i) 12,346 shares of Common Stock issuable upon exercise of
Stock options; (ii) 1,667 shares of Common Stock issuable upon
exercise of warrants; and (iii) 7,500 shares of Common Stock issuable
upon exercise of Series B Warrants. Mr. Simons is a director of the
Company.
(19) Includes 3,750 shares of common stock issuable upon exercise of Series
B Warrants. Does not include the securities owned by Dr. Shapiro, the
beneficiary of the individual retirement account which are listed in
footnote 16 above unless indicated that they are owned by the
individual retirement account.
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Shareholders that they
intend to sell all or a portion of their Shares offered by this prospectus from
time to time. These sales may be made:
- in transactions (which may include block sales) on the NASDAQ
national market (or any other exchange or automated quotation
system in which our Common Stock may then be listed),
- in privately negotiated transactions or
- through a combination of the above methods, and that sales will
be made at fixed prices that may be changed, at market prices
prevailing at the times of such sales, at prices related to such
market prices or at negotiated prices.
The Selling Shareholders may also make private sales directly or
through a broker or brokers, who may act as agent or as principal. In
connection with any sales, such Selling Shareholders and any brokers
participating in such sales may be deemed to be underwriters within the meaning
of the Securities Act and any compensation received by them might be deemed to
be underwriting discounts and commissions under the Securities Act.
Any broker-dealer participating in such transactions as agent may
receive commissions from the Selling Shareholders (and, if they act as agent
for the purchaser of such Shares, from such purchaser). Brokerage fees may be
paid by the Selling Shareholder, which may be in excess of usual and customary
brokerage fees. Broker-dealers may agree with the Selling Shareholders to sell
a specified number of Shares at a stipulated price, and, to the extent such a
broker-dealer is unable to do so acting as agent for any Selling Shareholder,
to purchase as principal any unsold Shares at the price required to fulfill the
broker-dealer's commitment to such Selling Shareholder. Broker-dealers who
acquire Shares as principal may thereafter resell such Shares from time to time
in transactions (which may involve crosses and block transactions and which may
involve sales to and through other broker-dealers, including transactions of
the nature described above) on the NASDAQ National Market, in negotiated
transactions or otherwise at market prices prevailing at the time of sale or at
negotiated prices, and in connection with such resales may pay to or receive
from the purchasers of such Shares commissions computed as described above.
Any Shares covered by this Prospectus which qualify for sale pursuant
to Rule 144 under the Securities Act may be sold under that Rule rather than
pursuant to this Prospectus.
The Selling Shareholders will be subject to the applicable provisions
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, including without limitation Regulation M, which
provisions may limit the timing of purchases and sales of any of the Common
Stock by the Selling Shareholders. All of the foregoing may affect the
marketability of the Common Stock.
-13-
<PAGE> 16
We will pay substantially all the expenses incident to this offering
of Shares by the Selling Shareholders, other than brokerage and selling fees.
The Selling Shareholders will pay all applicable stock transfer taxes, transfer
fees and brokerage commissions or underwriting or other discounts. We have
agreed to indemnify the selling shareholders against certain liabilities,
including liabilities under the Securities Act.
In order to comply with certain states' securities laws, if
applicable, the common stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
common stock may not be sold unless the common stock has been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and we or Selling Shareholders comply with the
applicable requirements.
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 30,000,000 shares of common
stock, $.001 par value, and 5,000,000 shares of preferred stock, $.01 par
value. As of the date of this Prospectus, we had 6,879,466 shares of common
stock presently issued and outstanding, held of record by approximately 200
shareholders. All of the shares being offered by the Selling Shareholders are
issuable upon exercise of warrants. Assuming exercise of all such warrants,
there will be 7,374,886 shares of Common Stock issued and outstanding. No
shares of preferred stock are outstanding.
COMMON STOCK
Each outstanding share of common stock is entitled to one vote, either
in person or by proxy, in all matters that can be voted upon by the owners
thereof at meetings of shareholders. The holders of common stock: (i) have
equal ratable rights to dividends from funds legally available therefore when,
as and if declared by our board of directors; (ii) are entitled to share
ratably in all of our assets available for distribution to holders of common
stock upon our liquidation, dissolution or winding up of our affairs; (iii) do
not have preemptive, subscription or conversion rights, or redemption or
sinking fund provisions; and (iv) are entitled to one non-cumulative vote per
share in all matters on which our shareholders may vote at all meetings of
shareholders.
PREFERRED STOCK
Our Board of Directors is authorized by our Articles of Incorporation,
without any action of our shareholders, to issue one or more class or series of
preferred stock and to determine the dividend rights, dividend rates,
conversion rights, voting rights, redemption rights and terms, liquidation
preferences, sinking fund provisions and designations of such class or series.
We have no present intention to issue any shares of preferred stock, except as
indicated below.
Our Board of Directors could issue a series of preferred stock, the
terms of which, subject to certain limitations imposed by securities laws, may
impede the completion of a merger, tender offer or other takeover attempt. Our
Board of Directors will make any determination to issue such shares based on
its judgment as to our best interest and the best interest of our shareholders
at the time of issuance. The Board of Directors, in so acting, could issue
preferred stock having terms which could discourage an acquisition attempt or
other transaction that some, or a majority, of our shareholders might believe
to be in their best interests or in which shareholders might receive a premium
for their stock over the then market price of such stock.
-14-
<PAGE> 17
Our Board of Directors has authorized a new class of preferred stock
consisting of 200,000 shares designated as Series A Junior Participating
Preferred Stock. The Series A Junior Participating Preferred Stock are issuable
upon the exercise of rights (a "Right") granted to each outstanding share of
common stock in connection with the adoption by the Board of Directors of a
Shareholder Rights Plan (the "Plan"). The Plan provided for a dividend
distribution of one Right for each outstanding share of our common stock. Under
the Plan, in specified circumstances when the Rights can be exercised, each
Right will entitle shareholders to purchase one one-hundredth of a share of the
Series A Junior Participating Preferred Stock at an exercise price of $25.00.
The Rights will be exercisable only under certain circumstances relating to our
possible acquisition, or tender offer from another company. Matters related to
our Rights Plan issues are discussed in further detail in our current report on
Form 8-K filed with the SEC on November 6, 1998.
WARRANTS
The shares being sold pursuant to this prospectus are issuable upon
the exercise of the following three classes of warrants: (a) warrants to
purchase 78,751 shares of common stock exercisable until July 31, 2000 at an
exercise price of $6.00 per share (the "Series B Warrants"); (b) warrants to
purchase 116,669 shares of common stock exercisable until November 15, 1999 at
an exercise price of $3.00 per share (the "Advisor Warrants"); and (c) warrants
to purchase 300,000 shares of common stock exercisable until October 7, 2002 at
an exercise price of $8.56 issued to the representatives of the underwriters of
our initial public offering (the "Representatives' Warrants").
We are not required to issue fractional shares upon exercise of any
warrants, but may make cash payments for such fractional shares based on the
then market price of our common stock. No holder of any warrants will be
entitled to vote, receive dividends, or be deemed the holder of the common
stock until such time as the warrants shall have been duly exercised and
payment of the purchase price shall have been made. Shares of common stock
issued upon the exercise of the warrants and on payment of the purchase price
will be legally issued, fully paid and non-assessable.
ANTI-TAKEOVER PROVISIONS
Certain portions of our Articles of Incorporation and By-laws may make
more difficult the acquisition of control of us by various means, such as a
tender offer, a proxy contest or otherwise. These provisions encourage persons
seeking to acquire control to consult first with our Board of Directors to
negotiate the terms of any proposed business combination or offer. The
provisions are designed to reduce our vulnerability to an unsolicited proposal
for a takeover that does not contemplate the acquisition of all outstanding
shares of our capital stock or which is otherwise unfair to our shareholders.
CLASSIFIED BOARD OF DIRECTORS. Our Articles of Incorporation provide
for our Board of Directors to be divided into three classes, as nearly equal in
number as is reasonably possible, serving three year staggered terms.
ADVANCE NOTICE. Our By-laws contain provisions relating to notice of
shareholder meetings, which would prohibit a shareholder from nominating a
person to the Board of Directors or proposing certain actions relating to our
business without advance written notice to us. Such written notice must be
received by us a minimum of 90 days prior to a shareholders' meeting and must
contain specific information about the nominee and the shareholder who makes
such nomination or proposal.
BLANK CHECK PREFERRED STOCK. Our Articles of Incorporation provide our
board of directors the authority to issue up to five million shares of
preferred stock and to determine the rights and preferences of the preferred
stock without the need for further stockholder approval.
SHAREHOLDER RIGHTS PLAN. Our Board of directors adopted a Shareholder
rights Plan in connection with the designation of Series A Junior Participating
Preferred Stock described above.
-15-
<PAGE> 18
ANTI-TAKEOVER PROVISIONS OF FLORIDA LAW. As a Florida corporation, we
are subject to the anti-takeover provisions of Section 607.0901 of the Florida
Business Corporation Act (the "Affiliated Transaction Statute"). In general,
the Affiliated Transaction Statute requires the approval of the holders of
two-thirds of the voting shares of a corporation, other than shares owned by an
"interested shareholder," in order to effect an "affiliated transaction," such
as a merger, sale of assets, or sale of shares, between a corporation and an
interested shareholder. An "interested shareholder" is defined as a beneficial
owner of 10% or more of the outstanding voting securities of the corporation.
Such approval is not required where: (i) the affiliated transaction is approved
by a majority of the disinterested directors; (ii) the interested shareholder
owns 90% or more of the corporation's outstanding voting stock, or has owned
80% or more for five years; or (iii) the consideration paid in connection with
the affiliated transaction satisfies the statutory "fair price" formula and the
transaction meets certain other requirements. A corporation may elect, by the
vote of a majority of the outstanding voting securities of the corporation (not
including shares held by an interested shareholder), or by amendment to the
articles or by-laws of the corporation, not to be subject to the provisions of
the Affiliated Transaction Statute. The election will not be effective until 18
months after it is made, and will not apply to any affiliated transaction
between the corporation and someone who was an interested shareholder prior to
the effective date of the election.
We may also be subject to the provisions of Section 607.0902 of the
Florida Business Corporation Act (the "Control Share Acquisition Statute").
Under such statute, "control shares" of certain corporations acquired in a
"control share acquisition," with certain exceptions, have no voting rights
unless such rights are granted pursuant to a vote of the holders of a majority
of the corporation's voting securities (excluding all "interested shares").
"Control shares" are shares that, when added to all other shares which a person
owns or has the power to vote, would give that person any of the following
grants of voting power: (i) one-fifth or more but less than one-third of the
voting power; (ii) one-third or more but less than a majority of the voting
power; and (iii) more than a majority of the voting power. A "control share
acquisition" is the acquisition of ownership of, or the power to vote,
outstanding control shares. Shares acquired within 90 days, or as part of a
plan to effect a control share acquisition, are deemed to have been acquired in
the same transaction. "Interested shares" include shares held by the person
attempting to effect the control share acquisition, and shares held by
employee-directors or officers of the corporation. A corporation may elect not
to be subject to the Control Share Acquisition Statute by amendment to its
articles or by-laws.
TRANSFER AGENT
The Transfer Agent for our common stock is Continental Stock Transfer
and Trust Company, New York, New York.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Florida Law permits a corporation to indemnify a director, officer,
employee, or agent who is, or is threatened to be, made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative by reason of the fact that he is or
was a director, officer, employee, or agent of the corporation or is, or was,
serving at the request of the corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise (including an employee benefit plan), against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlements actually and
reasonably incurred by him in connection with such action, suit, or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Our Articles of Incorporation and Bylaws require us to indemnify
our directors and officers to the fullest extent permitted by Florida law,
including circumstances in which indemnification is otherwise discretionary
under Florida law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions or otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
-16-
<PAGE> 19
LEGAL MATTERS
Our counsel, Wallace, Bauman, Legon, Fodiman & Shannon, P.A., Miami,
Florida will pass upon the validity of the issuance of the shares of common
stock offered hereby and certain other legal matters. Milton J. Wallace, a
shareholder of the law firm, beneficially owns 812,813 shares of common stock
and is a Selling Shareholder. Todd A. Fodiman, a shareholder of the law firm is
also a Selling Shareholder. Other shareholders of such law firm beneficially
own an aggregate of 12,000 shares of common stock.
EXPERTS
The consolidated financial statements and the related financial
statement schedules incorporated in this prospectus by reference from the
Companys Annual Report on Form 10-K for the Year ended December 31, 1998 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing as stated in their report.
-17-
<PAGE> 20
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------------------------------- -------------------------------------------
We have not authorized any dealer, salesman
or other person to give any information or represent
anything not contained or incorporated by
reference in this Prospectus. You must not rely on
any unauthorized information. This Prospectus
does not offer to sell any shares in any jurisdiction
where it is unlawful. The information in this
prospectus is current only as of its date. RENEX CORP.
--------------------------------
PROSPECTUS
---------------------------------
495,420
Shares of
COMMON STOCK
($.001 par value)
TABLE OF CONTENTS
Page
WHERE YOU CAN FIND MORE INFORMATION.................2
DOCUMENTS INCORPORATED BY REFERENCE.................2
FORWARD-LOOKING STATEMENTS..........................3
THE COMPANY.........................................3
RISK FACTORS........................................3
USE OF PROCEEDS.....................................8
SELLING STOCKHOLDERS...............................10
DESCRIPTION OF SECURITIES..........................12
PLAN OF DISTRIBUTION...............................13
INDEMNIFICATION....................................14
LEGAL MATTERS......................................15
EXPERTS............................................15
_________________, 1998
- ------------------------------------------------------- -------------------------------------------
</TABLE>
<PAGE> 21
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF INSURANCE AND DISTRIBUTION
The following sets forth the estimated expenses and costs in
connection with the issuance and distribution of securities being registered
hereby. All such expenses will be borne by the Company.
Securities and Exchange Commission Registration Fee...... $ 750.00
Accounting Fees and Expenses............................. 2,000.00*
Legal Fees and Expenses.................................. 8,000.00*
Printing expenses........................................ 2,000.00
Miscellaneous............................................ 1,250.00*
----------
Total.................................................... $14,000.00
==========
- ---------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Florida Business Corporation Act. Section 607.0850(1) of the Florida
Business Corporation Act (the "FBCA") provides that a Florida corporation, such
as the Company, shall have the power to indemnify any person who was or is a
party to any proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
liability incurred in connection with such proceeding, including any appeal
thereof, if he acted in good faith and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 607.0850(2) of the FBCA provides that a Florida corporation
shall have the power to indemnify any person, who was or is a party to any
proceeding by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee, or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses and amounts paid in
settlement not exceeding, in the judgment of the board of directors, the
estimated expense of litigating the proceeding to conclusion, actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof. Such indemnification shall be
authorized if such person acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the corporation,
except that no indemnification shall be made under this subsection in respect
of any claim, issue, or matter as to which such person shall have been adjudged
to be liable unless, and only to the extent that, the court in which such
proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
II-1
<PAGE> 22
Section 607.850 of the FBCA further provides that: (i) to the extent
that a director, officer, employee or agent of a corporation has been
successful on the merits or otherwise in defense of any proceeding referred to
in subsection (1) or subsection (2), or in defense of any claim, issue, or
matter therein, he shall be indemnified against expense actually and reasonably
incurred by him in connection therewith; (ii) indemnification provided pursuant
to Section 607.0850 is not exclusive; and (iii) the corporation may purchase
and maintain insurance on behalf of a director or officer of the corporation
against any liability asserted against him or incurred by him in any such
capacity or arising out of his status as such whether or not the corporation
would have the power to indemnify him against such liabilities under Section
607.0850.
Notwithstanding the foregoing, Section 607.0850 of the FBCA provides
that indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee or agent if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material
to the cause of action so adjudicated and constitute: (i) a violation of the
criminal law, unless the director, officer, employee or agent had reasonable
cause to believe his conduct was lawful or had no reasonable cause to believe
his conduct was unlawful; (ii) a transaction from which the director, officer,
employee or agent derived an improper personal benefit; (iii) in the case of a
director, a circumstance under which the liability provisions regarding
unlawful distributions are applicable; or (iv) willful misconduct or a
conscious disregard for the best interests of the corporation in a proceeding
by or in the right of the corporation to procure a judgment in its favor or in
a proceeding by or in the right of a shareholder.
Section 607.0831 of the FBCA provides that a director of a Florida
corporation is not personally liable for monetary damages to the corporation or
any other person for any statement, vote, decision, or failure to act,
regarding corporate management or policy, by a director, unless: (i) the
director breached or failed to perform his duties as a director; and (ii) the
director's breach of, or failure to perform, those duties constitutes: (A) a
violation of criminal law, unless the director had reasonable cause to believe
his conduct was lawful or had no reasonable cause to believe his conduct was
unlawful; (B) a transaction from which the director derived an improper
personal benefit, either directly or indirectly; (C) a circumstance under which
the liability provisions regarding unlawful distributions are applicable; (D)
in a proceeding by or in the right of the corporation to procure a judgment in
its favor or by or in the right of a shareholder, conscious disregard for the
best interest of the corporation, or willful misconduct; or (E) in a proceeding
by or in the right of someone other than the corporation or a shareholder,
recklessness or an act or omission which was committed in bad faith or with
malicious purpose or in a manner exhibiting wanton and willful disregard of
human rights, safety, or property.
ARTICLES AND BYLAWS. The Company's Articles of Incorporation and the
Company's Bylaws provide that the Company shall, to the fullest extent
permitted by law, indemnify all directors of the Company, as well as any
officers or employees of the Company to whom the Company has agreed to grant
indemnification.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Certain of the following exhibits are filed as part of this
registration statement.
EXHIBIT NO. DESCRIPTION
3.1 Articles of Incorporation of the Registrant [incorporated by reference
to Exhibit No. 3.1 to the Registration Statement on Form S-1
(Registration No. 333-32611)].
3.2 Certificate of Designation, Preferences, and Rights of Series A Junior
Participating Preferred Stock of Renex Corp. [Incorporated herein by
reference to Exhibit 4.1 of the Registrant's Current Report on Form
8-K (File No. 0-23165) filed with the Securities and Exchange
Commission on November 6, 1998].
3.3 By-Laws of the Registrant [incorporated herein by reference to Exhibit
No. 3.2 to the Registration Statement on Form S-1 (Registration No.
333-32611)].
4.1 Specimen Certificate of the Registrant=s common stock [incorporated by
reference to Exhibit No. 4.1 to the Registration Statement on Form S-1
(Registration No. 333-32611)].
4.2 Form of Series B Warrant Certificate
II-2
<PAGE> 23
4.3 Form of Advisor Warrant Certificate
4.4 Form of Representatives Warrant [incorporated by reference to Exhibit
No. 1.2 to the Registration Statement on Form S-1 (Registration No.
333-32611].
5.1 Opinion of Wallace, Bauman, Legon, Fodiman & Shannon, P.A., regarding
the legality of the Common Stock.
23.1 Consent of Deloitte & Touche, LLP
23.2 Consent of Wallace, Bauman, Legon, Fodiman & Shannon, P.A. (included
in Exhibit 5.1 above).
24 Power of Attorney (included on signature page of registration
statement).
ITEM 17. UNDERTAKINGS.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
Provided, however, that Paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to the included in a post-effective amendment by
those Paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act of
1934, as amended (the AExchange Act=), that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability
under the Act, each such post-effective amendment
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable, each filing of
an employee benefit plan=s annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in
the registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 24
(c) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons
of the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
II-4
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Coral Gables, State of
Florida, on the 26th day of August, 1999.
RENEX CORP., a Florida corporation
By: /s/ JAMES P. SHEA
----------------------------------
JAMES P. SHEA
President/Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following person in the capacities and
on the dates indicated.
POWER OF ATTORNEY
We, the undersigned, do hereby severally constitute and appoint
JAMES P. SHEA and ORESTES L. LUGO, and each or either of time, our true and
lawful attorneys and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments or post-effective amendments to this
Registration Statement (including post-effective amendments or any abbreviated
registration statement, and any amendments thereto, filed pursuant to Rule
462(b) increasing the amount of securities for which registration is being
sought), and to file the same with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of either of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys and
agents, and each of them, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/S/ MILTON J. WALLACE Chairman of the Board August 26, 1999
- ---------------------------------
MILTON J. WALLACE
/S/ JAMES P. SHEA Director, President and Chief Executive August 26, 1999
- --------------------------------- Officer
JAMES P. SHEA
/S/ ORESTES L. LUGO Senior Vice President and Chief August 26, 1999
- --------------------------------- Financial Officer
ORESTES L. LUGO
/S/ EUGENE P. CONESE, SR. Director August 26, 1999
- ---------------------------------
EUGENE P. CONESE, SR.
Director August __, 1999
- ---------------------------------
MARK D. WALLACE
Director August __, 1999
- ---------------------------------
C. DAVID FINCH, M.D.
/S/ ARTHUR G. SHAPIRO, M.D. Director August 26, 1999
- ---------------------------------
ARTHUR G. SHAPIRO, M.D.
/S/ JOHN E. HUNT, SR. Director August 26, 1999
- ---------------------------------
JOHN E. HUNT, SR
Director August __, 1999
- ---------------------------------
JEFFREY H. WATSON
/S/ CHARLES J. SIMONS Director August 26, 1999
- ---------------------------------
CHARLES J. SIMONS
</TABLE>
II-5
<PAGE> 1
Exhibit 4.2
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, NOR THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE
SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS A REGISTRATION STATEMENT IS
EFFECTIVE PERTAINING TO SAID SECURITIES OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
VOID AFTER 5:00 P.M. JULY 31, 1999
Warrants CLASS B WARRANT NO. FIELD(8)
[REXEX CORP. LOGO]
CLASS B WARRANT CERTIFICATE
THIS CERTIFIES THAT, for value received, FIELD(3), or any
registered assigns (the "Holder"), is the owner of the number of warrants (the
"Warrants") specified above of RENEX CORP., a Florida corporation (the
"Company"). Each Warrant entitles the holder hereof to purchase, subject to the
terms and conditions set forth in this certificate one fully paid and
non-assessable share of the Company's Common Stock, $.001 par value (the
"Shares") commencing on the date hereof and continuing through July 31, 1999
(the "Exercise Period") upon the presentation and surrender of this Warrant
Certificate, with the form of election to purchase attached hereto, duly
executed, to the Company at its principal office, accompanied by payment of
$2.00 for every share of Common Stock so purchased hereunder (the "Exercise
Price").
Each Warrant represented hereby is exercisable at the option of
the registered Holder, but no fractional shares of Common Stock will be issued
and the Holder may exercise only a whole number of Warrants. In lieu of
fractional shares of Common Stock, the Company shall pay to the holder hereof
an amount equal to the current value of such fraction computed (a) if the
Shares shall then be listed or admitted to trading on any national securities
exchange, on the basis of the last reported sale price of the Shares on such
exchange prior to the date of exercise, (b) if the Shares shall not then be so
listed or admitted, on the basis of the average of the high and low bid prices
of the shares in the over-the-counter market, as reported by NASDAQ or any
successor thereto, on the last business day prior to the date of exercise, or
(c) if there is no market for the Shares, the fair market value as determined
in good faith by the Company's Board of Directors. In the cash of the exercise
of less than all of the Warrants represented by this Warrant Certificate, the
Company will cancel this Certificate upon surrender thereof and shall execute
and deliver a new Warrant Certificate for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 P.M. Eastern Standard
Time on July 25, 1999. If such date shall be a holiday or a day in which banks
are authorized to close, then the Expiration Date shall mean 5:00 P.M. Eastern
Standard Time, on the next following day which is not a holiday or a day on
which banks are authorized to close.
Prior to due presentment for transfer of this Warrant Certificate,
the Company may deem and treat the person in whose name this Warrant
Certificate is registered on the books of the Company as the absolute owner
hereof for all purposes and that the Company shall not be affected by any
notice to the contrary.
ADDITIONAL PROVISIONS OF THIS WARRANT FOLLOW
DATED this 31st day of July, 1996.
RENEX CORP., a Florida corporation
Attest: By:
----------------------------- -------------------------------
BRYAN W. BAUMAN, JAMES P. SHEA, President
Assistant Secretary
<PAGE> 2
1. ANTI-DILUTION ADJUSTMENTS.
(a) In case the Company shall at any time prior to the Exercise
of the Warrants declare a dividend or any distribution payable in any class of
the Company's Shares now outstanding or to be outstanding to which the Exercise
of the Warrants pertains, then the holder hereof, upon the Exercise of the
Warrants after the record date for the determination of holders of Shares
entitled to receive such dividend or distribution, shall be entitled to receive
upon Exercise of the Warrants, in addition to the number of Shares as to which
this Warrant Certificate is exercised, such additional Shares as such holder
would have received had the Warrants been exercised immediately prior to such
record date.
(b) In case the Company shall at any time prior to the Exercise
of the Warrants effect a recapitalization or reclassification of such character
that the Shares shall be changed into or become exchangeable for a larger or
smaller number of Shares, then upon the effective date thereof, the number of
Shares which the holder hereof shall be entitled to purchase upon Exercise of
the Warrants shall be increased or decreased, as the case may be, in direct
proportion to the increase or decrease in the number of Shares by reason of
such recapitalization or reclassification, and the Purchase Price Per Share of
such recapitalized or reclassified Shares be proportionately decreased and in
the case of a decrease in the number of Shares, be proportionately increased.
(c) Subject to the provisions contained in Paragraph 1(g) herein,
in case the Company shall at any time prior to the Exercise of the Warrants
issue or sell any Shares or any other securities convertible into Shares or any
options or warrants to purchase Shares (except as provided in subsection (a) of
this Paragraph 1, pursuant to incentive compensation plans, pursuant to options
to officers or employees or issuance of any shares upon the conversion of
warrants, or other rights or options now outstanding for a consideration per
Share less than $1.00, then forthwith upon such issue or sale the Purchase
Price Per Share (until another such issue or sale) shall be reduced to a price
(calculated to the nearest full cent) determined by dividing (i) an amount
equal to the sum of (A) the product obtained by multiplying (x) the total
number of Shares outstanding immediately prior to such issue or sale, by (y)
the Purchase Price Per Share in effect immediately prior to such issue or sale
plus (B) the aggregate amount of any consideration in connection with such
issue or sale, by (ii) the total number of Shares outstanding immediately after
such issue or sale. Simultaneously with such reduction in the Purchase Price
Per Share, the number of Shares issuable upon Exercise of the Warrants shall be
increased (to the nearest full Share) to the number obtained by multiplying the
Purchase Price Per Share in effective immediately prior to such reduction by
the number of Shares then issuable upon Exercise of the Warrants and dividing
the product so obtained by the reduced Purchase Price Per Share. For purposes
of this subsection 1(c) the consideration in connection with any such issue or
sale shall be the initial offering price for the sale of such shares or other
securities, options or warrants before deducting therefrom any commissions or
other expenses paid or incurred by the Company in connection with the issue or
sale of such securities, options or warrants plus any additional cash
receivable by the Company upon conversion or exercise of such other securities,
options or warrants, except that in the event that any portion of such
consideration is a consideration other than cash, the amount of such
consideration other than cash shall be the value thereof as determined in good
faith by the Board of Directors of the Company. In the event that the
conversion price or exercise price of any securities convertible into Shares or
options or warrants to purchase Shares is not specified at the time of the
issue or sale of such securities, options or warrants, the amount thereof, for
purposes only of this subsection 1(c), shall be as determined in good faith by
the Board of Directors of the Company. In the event of the issuance or sale by
the Company of any securities convertible into Shares or any options or
warrants to purchase Shares (except as provided in subsection (a) of this
Paragraph 1 or pursuant to incentive compensation plans or options to officers
or employees) the Company shall be deemed to have issued the maximum number of
Shares into which such convertible securities may be converted or the maximum
number of Shares deliverable upon the exercise of such options or warrants, as
the case may be. On the expiration of such options or warrants or the
termination of such right to convert, the Purchase Price Per Share shall be
readjusted based upon the number of Shares actually delivered upon the exercise
of such options or warrants or upon the conversion of such securities. Except
as provided in the preceding sentence, no further adjustment of the Purchase
Price Per Share shall be made as a result of the actual issuance of Shares upon
the exercise of such options or warrants or the conversion of such securities.
-2-
<PAGE> 3
(d) In case the Company shall at any time prior to the Exercise
of the Warrants consolidate or merge with any other corporation or transfer all
or substantially all of its assets to any other corporation preparatory to a
dissolution, then the Company shall, as a condition precedent to such
transaction, cause effective provision to be made so that the holder hereof
upon the Exercise of the Warrants after the effective date of such transaction
shall be entitled to receive the kind and amount of shares, evidences of
indebtedness and/or other securities or property receivable on such transaction
by a holder of the number of Shares as to which this Warrant were exercisable
immediately prior to such transaction (without giving effect to any restriction
upon such exercise); and, in any such case, appropriate provision shall be made
with respect to the rights and interests of the holder hereof to the end that
the provisions of this Warrant shall thereafter be applicable (as nearly as may
be practicable) with respect to any Shares, evidences of indebtedness or other
securities or assets thereafter deliverable upon Exercise of the Warrants.
(e) The term "Purchase Price Per Share" as used in this Paragraph
1 shall mean the exercise price specified in this Warrant Certificate until the
occurrence of an event stated in subsection (b) or (c) of this Paragraph 3 and
thereafter shall mean said price as adjusted from time to time in accordance
with the provisions of said subsections. No such adjustment shall be made
unless such adjustment would change the then Purchase Price Per Share by $.01
or more; provided, however, that all adjustments not so made shall be deferred
and made when the aggregate thereof would change the then Purchase Price Per
Share by $.01 or more. No adjustment made pursuant to any provision of this
Paragraph 3 shall have the effect of increasing the total consideration payable
upon Exercise of the Warrants in respect of all the Shares purchasable
hereunder.
(f) In the event that at any time, as a result of an adjustment
made pursuant to this Paragraph 3, the holder of this Warrant Certificate shall
become entitled to purchase upon Exercise of the Warrants, shares, evidences of
indebtedness or other securities or assets (other than Shares) then, wherever
appropriate, all references herein to Shares shall be deemed to refer to and
include such shares, evidences of indebtedness or other securities or assets;
and thereafter the number of such shares, evidences of indebtedness or other
securities or assets shall be subject to adjustment from time to time in a
manner and upon terms as nearly equivalent as practicable to the provisions of
this Paragraph 3.
(g) Notwithstanding anything herein to the contrary, no
adjustment shall be made to the Purchase Price Per Share or the number of
shares issuable upon exercise of this Warrant upon the issuance of any
securities issued in connection with any of the following (i) incentive
compensation plans, (ii) upon grant of options under any stock option plans
approved by the corporation's shareholders or the exercise and issuance of
Common Stock thereunder, (iii) upon conversion of any shares of Series A
Preferred Stock and the issuance of Common Stock pursuant thereto, (iv)
exercise of any warrants, rights or options now outstanding (v) the sale and
issuance of common stock for a purchase price of $1.00 or more or (vi) the sale
of securities convertible or exercisable into common stock which securities
conversion or exercise price is $1.00 or greater.
2. NOTICES TO WARRANT HOLDER. If, at any time prior to the expiration
or Exercise of the Warrants, any of the following events shall occur:
(a) the Company shall declare any dividend payable in securities
upon its Shares or make any distribution (other than a cash dividend payable
out of earned surplus to the holders of its Shares; or
(b) the Company shall offer to the holders of its Shares any
additional shares of the Company or securities convertible into shares of the
Company or any right to subscribe therefor; or
(c) a dissolution, liquidation or winding-up of the Company
(other than in connection with a consolidation or merger) or a transfer of all
or substantially all of its assets shall be proposed;
then in any one or more of said events, the Company shall give to the holder of
this Warrant, by first-class mail, postage prepaid, at the address of such
holder as shown on the books of the Company, not less than twenty (20) days'
prior notice of the date on which:
(i) The books of the Company shall be closed or a record
taken for determination of the shareholders entitled to such dividend,
distribution or subscription rights; or
(ii) the books of the Company shall be closed or record
taken for determination of the shareholders entitled to vote on such proposed
dissolution, liquidation, winding-up or transfer.
-3-
<PAGE> 4
3. RESERVATION OF SHARES. The Company shall at all times reserve for
issuance such number of authorized and unissued Shares (or other securities
substituted therefor as hereinabove provided) as shall be sufficient for
exercise of the Warrants.
4. BENEFITS OF THIS WARRANT. Nothing in this Warrant Certificate shall
be construed to confer upon any person other than the Company and the holder of
this Warrant Certificate any legal or equitable right, remedy or claim under
this Warrant Certificate and this Warrant Certificate shall be for the sole and
exclusive benefit of the Company and the holder of this Warrant Certificate.
5. UNREGISTERED SECURITIES. The Holder of this Warrant may not exercise
the Warrant if such exercise would be in violation of the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"Act"). Any subsequent resale of the Shares may be made only upon proof by the
Holder to the satisfaction of counsel for the Company that the resale will not
result in a violation of the Act. The Holder shall make such representations
and supply such information as may, in the opinion of counsel for the Company,
be appropriate or advisable in view of the then existence or nonexistence of an
effective registration statement under the Act covering the issuance of the
Shares of the Company. The Holder hereby agrees that the Company may place a
stop order covering the transfer of any Shares issued pursuant to the exercise
of the Warrant with the Transfer Agent of such shares and may place upon the
certificates representing such shares a legend indicating such restrictions.
6. PIGGY-BACK REGISTRATION RIGHTS. If the Company shall at any time
file a new registration statement under the Securities Act relating to shares
of its Common Stock (other than on Forms S-4 or S-8), then it shall give thirty
days' prior written notice of its intention to do so to the Holder and, if
requested in writing by the Holder hereof not more than twenty days after his
receipt of such notice, the Company shall include in said registration
statement the Shares issuable or theretofore issued upon exercise of the
Warrant as the Holder hereof shall request; provided, however, that if there is
an underwriter selected by the Company for such offering and sale, and it
advises that, in its professional opinion the number of shares of Common Stock
proposed to be sold by the Company and the holder of the Warrant is greater
than the number of shares of Common Stock which it believes may be sold, then
the number of shares of Common Stock to be sold shall first be allocated to the
Company and any balance thereafter shall be allocated to the Holder. If the
Company includes the Shares in such registration statement, and if the Company
shall so request, the Holder shall agree in writing not to sell any other
shares of Common Stock owned by the Holder for a period specified by the
Company, but not exceeding 180 days from the effective date of such
registration statement if the underwriter of the Shares then being registered
so requests. The Company shall bear all costs and expenses of the registration
statement (and all amendments and supplements thereto) relating to the
registration of the Shares, including printing, legal and accounting expenses,
and SEC filing fees, expenses and transfer agency fees, but the Company shall
have no obligation to pay or otherwise bear (i) any portion of the fees or
disbursements of any counsel which any Holder may retain in connection with the
registration of the Shares, (ii) any portion of the underwriter's commission,
discounts and expenses attributable to such Shares being offered and sold by
the Warrant Holder or (iii) any applicable stock transfer taxes. Prior to the
effective date of any registration statement filed hereunder, the Company and
the persons requesting the registration will execute an agreement providing for
indemnification of each other in form satisfactory to the Company.
7. LOSS OR DESTRUCTION OF WARRANT CERTIFICATE. If this Warrant
Certificate shall be surrendered mutilated to the Company, or if the Company
shall have received evidence to its satisfaction of its destruction, loss or
theft, and there be delivered to the Company such security or indemnity as may
be reasonably required by it to hold it harmless, then the Company shall
execute and deliver in lieu of this Warrant Certificate, or in substitution for
the mutilated Warrant Certificate (upon surrender of such Warrant Certificate)
a new Warrant Certificate.
8. MODIFICATIONS. The Company shall be entitled to modify the terms and
conditions of the Warrants without the consent of the holders of Warrants;
provided, however, that such modifications shall be uniform for all Warrants of
the same class and will not increase the exercise price or decrease (i) the
number of Shares issuable upon exercise or (ii) the exercise periods of such
Warrant Certificate.
9. APPLICABLE LAW. This Warrant Certificate is issued under, and shall
for all purposes be governed by, and construed in accordance with the laws of
the State of Florida. This Warrant Certificate is binding upon the Company and
its successors and assigns.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be executed, sealed and delivered in its name by its duly authorized officers.
-4-
LAW OFFICES WALLACE, BAUMAN, LEGON, FODIMAN & SHANNON, P.A.
1200 BRICKELL AVENUE, SUITE 1720, MIAMI, FLORIDA 33131 * TEL. (305) 444-9991
<PAGE> 5
ELECTION TO PURCHASE
(To be executed by the registered holder if he desires to exercise the Warrant)
TO: RENEX CORP.
The undersigned hereby exercises the right to purchase ___________
Shares of the Common Stock of RENEX CORP. evidenced by the attached Warrant
Certificate and herewith makes payment of the purchase price of such Shares in
full, all in accordance with the conditions and provisions thereof.
The undersigned requests that certificates for such Shares be
issued pursuant to the Warrant in the name of:
_______________________________________________________________________________
Name
_______________________________________________________________________________
Address
Dated:_____________________ Signature:_____________________________
___________________________ Signature:_____________________________
Social Security Number (Signature must conform in
all respects to name of
holder and specified on the
face of the Warrant)
ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Warrant Certificate)
FOR VALUE RECEIVED_________________________ hereby sells, assigns
and transfers unto______________________________________________________________
(Please print name, address and Social Security No. of Transferee)
________________ warrants represented by this Warrant Certificate together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint _________________________________ attorney to transfer the warrants
on the books of the within named company, with full power of substitution.
Dated:_____________________ Signature:_____________________________
___________________________ Signature:_____________________________
Social Security Number (Signature must conform in
all respects to name of
holder and specified on the
face of the Warrant)
-5-
LAW OFFICES WALLACE, BAUMAN, LEGON, FODIMAN & SHANNON, P.A.
1200 BRICKELL AVENUE, SUITE 1720, MIAMI, FLORIDA 33131 * TEL. (305) 444-9991
<PAGE> 1
Exhibit 4.3
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, NOR THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE
SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS A REGISTRATION STATEMENT IS
EFFECTIVE PERTAINING TO SAID SECURITIES OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
VOID AFTER 5:00 P.M. NOVEMBER 15, 1999
FIELD (Amount) Warrants
WARRANT CERTIFICATE
THIS CERTIFIES THAT, for value received, FIELD (NAME), or any
registered assigns (the "Holder"), is the owner of the number of warrants (the
"Warrants") specified above of RENEX CORP., a Florida corporation (the
"Company"). Each Warrant entitles the holder hereof to purchase, subject to the
terms and conditions set forth in this certificate one fully paid and
non-assessable share of the Company's Common Stock, $.001 par value (the
"Shares") commencing on the date hereof and continuing through November 15, 1999
(the "Exercise Period") upon the presentation and surrender of this Warrant
Certificate, with the form of election to purchase attached hereto, duly
executed, to the Company at its principal office, accompanied by payment of
$1.00 for every share of Common Stock so purchased hereunder (the "Exercise
Price"). The Exercise Price shall be payable in accordance with the provisions
of Section 2 herein.
Each Warrant represented hereby is exercisable at the option of
the registered Holder, but no fractional shares of Common Stock will be issued
and the Holder may exercise only a whole number of Warrants. In lieu of
fractional shares of Common Stock, the Company shall pay to the holder hereof
an amount equal to the current value of such fraction computed (a) if the
Shares shall then be listed or admitted to trading on any national securities
exchange, on the basis of the last reported sale price of the Shares on such
exchange prior to the date of exercise, (b) if the Shares shall not then be so
listed or admitted, on the basis of the high bid price of the shares in the
over-the-counter market, as reported by NASDAQ or any successor thereto, on the
last business day prior to the date of exercise, or (c) if there is no market
for the Shares, the fair market value as determined in good faith by the
Company's Board of Directors. In the cash of the exercise of less than all of
the Warrants represented by this Warrant Certificate, the Company will cancel
this Certificate upon surrender thereof and shall execute and deliver a new
Warrant Certificate for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 P.M. Eastern Standard
Time on November 15, 1999. If such date shall be a holiday or a day in which
banks are authorized to close, then the Expiration Date shall mean 5:00 P.M.
Eastern Standard Time, on the next following day which is not a holiday or a
day on which banks are authorized to close.
Prior to due presentment for transfer of this Warrant Certificate,
the Company may deem and treat the person in whose name this Warrant
Certificate is registered on the books of the Company as the absolute owner
hereof for all purposes and that the Company shall not be affected by any
notice to the contrary.
1. ANTI-DILUTION ADJUSTMENTS.
(a) In case the Company shall at any time prior to the
Exercise of the Warrants declare a dividend or any distribution payable in any
class of the Company's Shares now outstanding or to be outstanding to which the
Exercise of the Warrants pertains, then the holder hereof, upon the Exercise of
the Warrants after the record date for the determination of holders of Shares
entitled to receive such dividend or distribution, shall be entitled to receive
upon Exercise of the Warrants, in addition to the number of Shares as to which
this Warrant Certificate is exercised, such additional Shares as such holder
would have received had the Warrants been exercised immediately prior to such
record date.
<PAGE> 2
(b) In case the Company shall at any time prior to the
Exercise of the Warrants effect a recapitalization or reclassification of such
character that the Shares shall be changed into or become exchangeable for a
larger or smaller number of Shares, then upon the effective date thereof, the
number of Shares which the holder hereof shall be entitled to purchase upon
Exercise of the Warrants shall be increased or decreased, as the case may be,
in direct proportion to the increase or decrease in the number of Shares by
reason of such recapitalization or reclassification, and the Purchase Price Per
Share of such recapitalized or reclassified Shares be proportionately decreased
and in the case of a decrease in the number of Shares, be proportionately
increased.
(c) Subject to the provisions contained in Paragraph 1(g)
herein, in case the Company shall at any time prior to the Exercise of the
Warrants issue or sell any Shares or any other securities convertible into
Shares or any options or warrants to purchase Shares (except as provided in
subsection (a) of this Paragraph 1) for a consideration per Share less than the
then current Purchase Price Per Share then forthwith upon such issue or sale
the Purchase Price Per Share (until another such issue or sale) shall be
reduced to a price (calculated to the nearest full cent) determined by dividing
(i) an amount equal to the sum of (A) the product obtained by multiplying (x)
the total number of Shares outstanding immediately prior to such issue or sale,
by (y) the Purchase Price Per Share in effect immediately prior to such issue
or sale plus (B) the aggregate amount of any consideration in connection with
such issue or sale, by (ii) the total number of Shares outstanding immediately
after such issue or sale. Simultaneously with such reduction in the Purchase
Price Per Share, the number of Shares issuable upon Exercise of the Warrants
shall be increased (to the nearest full Share) to the number obtained by
multiplying the Purchase Price Per Share in effective immediately prior to such
reduction by the number of Shares then issuable upon Exercise of the Warrants
and dividing the product so obtained by the reduced Purchase Price Per Share.
For purposes of this subsection 1(c) the consideration in connection with any
such issue or sale shall be the initial offering price for the sale of such
shares or other securities, options or warrants before deducting therefrom any
commissions or other expenses paid or incurred by the Company in connection
with the issue or sale of such securities, options or warrants plus any
additional cash receivable by the Company upon conversion or exercise of such
other securities, options or warrants, except that in the event that any
portion of such consideration is a consideration other than cash, the amount of
such consideration other than cash shall be the value thereof as determined in
good faith by the Board of Directors of the Company. In the event that the
conversion price or exercise price of any securities convertible into Shares or
options or warrants to purchase Shares is not specified at the time of the
issue or sale of such securities, options or warrants, the amount thereof, for
purposes only of this subsection 1(c), shall be as determined in good faith by
the Board of Directors of the Company. In the event of the issuance or sale by
the Company of any securities convertible into Shares or any options or
warrants to purchase Shares (except as provided in subsection (a) of this
Paragraph 1) the Company shall be deemed to have issued the maximum number of
Shares into which such convertible securities may be converted or the maximum
number of Shares deliverable upon the exercise of such options or warrants, as
the case may be. On the expiration of such options or warrants or the
termination of such right to convert, the Purchase Price Per Share shall be
readjusted based upon the number of Shares actually delivered upon the exercise
of such options or warrants or upon the conversion of such securities. Except
as provided in the preceding sentence, no further adjustment of the Purchase
Price Per Share shall be made as a result of the actual issuance of Shares upon
the exercise of such options or warrants or the conversion of such securities.
(d) In case the Company shall at any time prior to the
Exercise of the Warrants consolidate or merge with any other corporation or
transfer all or substantially all of its assets to any other corporation
preparatory to a dissolution, then the Company shall, as a condition precedent
to such transaction, cause effective provision to be made so that the holder
hereof upon the Exercise of the Warrants after the effective date of such
transaction shall be entitled to receive the kind and amount of shares,
evidences of indebtedness and/or other securities or property receivable on
such transaction by a holder of the number of Shares as to which this Warrant
were exercisable immediately prior to such transaction (without giving effect
to any restriction upon such exercise); and, in any such case, appropriate
provision shall be made with respect to the rights and interests of the holder
hereof to the end that the provisions of this Warrant shall thereafter be
applicable (as nearly as may be practicable) with respect to any Shares,
evidences of indebtedness or other securities or assets thereafter deliverable
upon Exercise of the Warrants.
-2-
<PAGE> 3
(e) The term "Purchase Price Per Share" as used in this
Paragraph 1 shall mean the exercise price specified in this Warrant Certificate
until the occurrence of an event stated in subsection (b) or (c) of this
Paragraph 1 and thereafter shall mean said price as adjusted from time to time
in accordance with the provisions of said subsections. No such adjustment shall
be made unless such adjustment would change the then Purchase Price Per Share
by $.01 or more; provided, however, that all adjustments not so made shall be
deferred and made when the aggregate thereof would change the then Purchase
Price Per Share by $.01 or more. No adjustment made pursuant to any provision
of this Paragraph 1 shall have the effect of increasing the total consideration
payable upon Exercise of the Warrants in respect of all the Shares purchasable
hereunder.
(f) In the event that at any time, as a result of an
adjustment made pursuant to this Paragraph 1, the holder of this Warrant
Certificate shall become entitled to purchase upon Exercise of the Warrants,
shares, evidences of indebtedness or other securities or assets (other than
Shares) then, wherever appropriate, all references herein to Shares shall be
deemed to refer to and include such shares, evidences of indebtedness or other
securities or assets; and thereafter the number of such shares, evidences of
indebtedness or other securities or assets shall be subject to adjustment from
time to time in a manner and upon terms as nearly equivalent as practicable to
the provisions of this Paragraph 1.
(g) Notwithstanding anything herein to the contrary, no
adjustment shall be made to the Purchase Price Per Share or the number of
shares issuable upon Exercise of this Warrant upon the issuance of any
securities issued in connection with any of the following (i) incentive
compensation plans approved by the Company=s shareholders, (ii) upon grant of
options under any stock option plans approved by the corporation's shareholders
or the exercise and issuance of Common Stock thereunder, (iii) upon conversion
of any shares of preferred stock outstanding as of the date hereof and the
issuance of Common Stock pursuant thereto, (iv) exercise of any warrants,
rights or options outstanding as of the date hereof, (v) the sale and issuance
of common stock for a purchase price of not less than the then current Purchase
Price Per Share, or (vi) the sale or issuance of securities (including
preferred stock, options or warrants) convertible or exercisable into common
stock which securities conversion or exercise price is not less than the then
current Purchase Price Per Share .
2. PAYMENT OF EXERCISE PRICE. The Exercise Price pursuant to this
Warrant or portion thereof, may be paid:
(i) in United States dollars, in cash or by check, bank
draft or money order payable to the Company; or
(ii) by delivery of shares of Common Stock owned by a
holder which has an aggregate fair Market Value on the date of exercise equal
to the aggregate Exercise Price; or
(iii) by delivery of irrevocable instructions to a broker
to sell shares of Common Stock to be issued upon exercise of the Warrants,
provided such shares of Common Stock are transferable pursuant to applicable
federal and state law and such broker agrees to immediately deliver the amount
of sales proceeds necessary to pay the aggregate Exercise price; or
(iv) by any combination of the above methods of payment.
3. NOTICES TO WARRANT HOLDER. If, at any time prior to the
expiration or Exercise of the Warrants, any of the following events shall
occur:
(a) the Company shall declare any dividend payable in
securities upon its Shares or make any distribution (other than a cash dividend
payable out of earned surplus to the holders of its Shares; or
-3-
<PAGE> 4
(b) the Company shall offer to the holders of its Shares
any additional shares of the Company or securities convertible into shares of
the Company or any right to subscribe therefor; or
(c) a dissolution, liquidation or winding-up of the Company
(other than in connection with a consolidation or merger) or a transfer of all
or substantially all of its assets shall be proposed; then in any one or more
of said events, the Company shall give to the holder of this Warrant, by
first-class mail, postage prepaid, at the address of such holder as shown on
the books of the Company, not less than twenty (20) days' prior notice of the
date on which:
(i) The books of the Company shall be closed or a
record taken for determination of the shareholders entitled to such dividend,
distribution or subscription rights; or
(ii) the books of the Company shall be closed or
record taken for determination of the shareholders entitled to vote on such
proposed dissolution, liquidation, winding-up or transfer.
4. RESERVATION OF SHARES. The Company shall at all times reserve
for issuance such number of authorized and unissued Shares (or other securities
substituted therefor as hereinabove provided) as shall be sufficient for
exercise of the Warrants.
5. BENEFITS OF THIS WARRANT. Nothing in this Warrant Certificate
shall be construed to confer upon any person other than the Company and the
holder of this Warrant Certificate any legal or equitable right, remedy or
claim under this Warrant Certificate and this Warrant Certificate shall be for
the sole and exclusive benefit of the Company and the holder of this Warrant
Certificate.
6. UNREGISTERED SECURITIES. The Holder of this Warrant may not
exercise the Warrant if such exercise would be in violation of the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder
(the "Act"). Any subsequent resale of the Shares may be made only upon proof by
the Holder to the satisfaction of counsel for the Company that the resale will
not result in a violation of the Act. The Holder shall make such
representations and supply such information as may, in the opinion of counsel
for the Company, be appropriate or advisable in view of the then existence or
nonexistence of an effective registration statement under the Act covering the
issuance of the Shares of the Company. The Holder hereby agrees that the
Company may place a stop order covering the transfer of any Shares issued
pursuant to the exercise of the Warrant with the Transfer Agent of such shares
and may place upon the certificates representing such shares a legend
indicating such restrictions.
7. DEMAND REGISTRATION.
(a) Request for Registration. Subject to the restrictions
contained in this Agreement, if at any time following six months after the
closing the Company's initial public offering of its Common Stock or other
transaction or event that results in the Company becoming a public company, the
Company receives from Holders who own at least a majority of the Common Stock
underlying the Warrants (which for the purpose herein shall include, the
underlying common stock of Warrants not then exercised), the written request
that the Company effect the registration of each such Holder=s Common Stock
(either for exercise and/or resale of the underlying Common Stock at the
Holders= option), the Company shall promptly, but in any event within fifteen
(15) days thereafter: (i) give written notice of the proposed registration to
all other Holders; and (ii) as soon as practicable, but in any event within
ninety (90) days after receipt of the request of the Holders, effect such
registration of the Common Stock of such requesting Holders, together with all
or such portion of the Common Stock of any other Holders who have given written
notice to the Company within twenty (20) days after receiving such written
notice from the Company pursuant to clause (i) above. Such obligation of the
Company shall include, without limitation, the execution of an undertaking to
file post-effective amendments and to effect appropriate registrations or
qualifications under a reasonable number of blue sky or other state securities
laws. The Company may request, subject to the Holders= approval, to delay the
effectiveness of such registration of the Holders (which shall toll the running
of the ninety (90) day period above) after delivery of the demand, except that
any such delay shall automatically extend the Expiration Period equal to the
period of the agreed upon registration deferral. If the registration of the
Common Stock of the Holders is not effected within ninety (90) days after the
demand, without limitation as to any other remedies that the Holders may have.
The Expiration Period shall be extended for a period equal to the delay beyond
ninety (90) days. The Holders making the registration request may withdraw the
request during such delay, in which event such Holder shall not be deemed to
have made the request.
-4-
<PAGE> 5
(b) Underwriting. If the Holders demand registration
pursuant to this Section 7 and the Holders intend to use an underwriter to
distribute the Common Stock covered by such request, they shall so advise the
Company in such request and the Company shall include such information in its
written notice to the other Holders. In such event, the right of any Holder to
registration pursuant to this Section shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of all or part of such
Holder's Common Stock in the underwriting. The Company shall enter into an
underwriting agreement with an underwriter selected by the Holders, subject to
the approval of the Company of the content thereof, which shall not be
unreasonably withheld. In no event shall the Company be responsible for any
expenses of such underwriters or their attorney's fees (except with respect to
Blue Sky compliance), other than reasonably accountable travel and distribution
expenses. The underwriting agreement may contain reasonable provisions
regarding indemnification and contribution from the Company.
(c) One Demand Registration. The Company shall be obligated
to prepare, file and cause to become effective only one registration statement
pursuant to this Section 7 and to pay the costs and expenses associated with
such registration. Any Holders who own Common Stock, who do not participate in
a registration effected in accordance with this Section 7 shall not have any
further right to demand registration of such Holder's Common Stock.
8. PIGGY-BACK REGISTRATION RIGHTS. If the Company shall at any
time file a new registration statement under the Securities Act relating to
shares of its Common Stock (other than on Forms S-4 or S-8), then it shall give
thirty days' prior written notice of its intention to do so to the Holder and,
if requested in writing by the Holder hereof not more than twenty days after
his receipt of such notice, the Company shall include in said registration
statement the shares issuable and if desired by the Holders, the resale
thereof, or theretofore issued upon exercise of the Warrant as the Holder
hereof shall request; provided, however, that if there is an underwriter
selected by the Company for such offering and sale, and it advises that, in its
professional opinion the number of shares of Common Stock proposed to be sold
by the Company and the holder of the Warrant is greater than the number of
shares of Common Stock which it believes may be sold, then the number of shares
of Common Stock to be sold shall first be allocated to the Company and any
balance thereafter shall be allocated to the Holder. If the Company includes
the Shares in such registration statement, and if the Company shall so request,
the Holder shall agree in writing not to sell any other shares of Common Stock
owned by the Holder for a period specified by the underwriter, but not
exceeding 180 days from the effective date of such registration statement or
such shorter period as may be applicable to officers and directors of the
Company, if the underwriter of the shares then being registered so requests.
The Company shall bear all costs and expenses of the registration statement
(and all amendments and supplements thereto) relating to the registration of
the Shares, including printing, legal and accounting expenses, and SEC filing
fees, expenses and transfer agency fees, but the Company shall have no
obligation to pay or otherwise bear (i) any portion of the fees or
disbursements of any counsel which any Holder may retain in connection with the
registration of the shares, (ii) any portion of the underwriter's commission,
discounts and expenses attributable to such shares being offered and sold by
the Warrant Holder or (iii) any applicable stock transfer taxes. Prior to the
effective date of any registration statement filed hereunder, the Company and
the persons requesting the registration will execute an agreement providing for
indemnification of each other in form satisfactory to the Company.
9. LOSS OR DESTRUCTION OF WARRANT CERTIFICATE. If this Warrant
Certificate shall be surrendered mutilated to the Company, or if the Company
shall have received evidence to its satisfaction of its destruction, loss or
theft, and there be delivered to the Company such security or indemnity as may
be reasonably required by it to hold it harmless, then the Company shall
execute and deliver in lieu of this Warrant Certificate, or in substitution for
the mutilated Warrant Certificate (upon surrender of such Warrant Certificate)
a new Warrant Certificate.
-5-
<PAGE> 6
10. TRANSFERABILITY. Subject to compliance with applicable Federal
and State securities laws, this Warrant is transferable in whole or in part by
the Holder hereof. Upon such transfer, the Holder shall provide to the Company
an opinion of counsel satisfactory to the Company to the effect that such
transfer is in compliance with Federal and State securities laws.
11. APPLICABLE LAW. This Warrant Certificate is issued under, and
shall for all purposes be governed by, and construed in accordance with the
laws of the State of Florida. This Warrant Certificate is binding upon the
Company and its successors and assigns.
DATED this ___ day of November, 1996.
RENEX CORP., a Florida corporation
Attest: By:
------------------------------ -----------------------------------
BRYAN W. BAUMAN, JAMES P. SHEA, President
Assistant Secretary
-6-
<PAGE> 7
ELECTION TO PURCHASE
(To be executed by the registered holder if he desires to exercise the Warrant)
TO: RENEX CORP.
The undersigned hereby exercises the right to purchase ___________
Shares of the Common Stock of RENEX CORP. evidenced by the attached Warrant
Certificate and herewith makes payment of the purchase price of such Shares in
full, all in accordance with the conditions and provisions thereof.
The undersigned requests that certificates for such Shares be
issued pursuant to the Warrant in the name of:
_______________________________________________________________________________
Name
_______________________________________________________________________________
Address
Dated:_____________________ Signature:_____________________________
___________________________ Signature:_____________________________
Social Security Number (Signature must conform in
all respects to name of
holder and specified on the
face of the Warrant)
ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Warrant Certificate)
FOR VALUE RECEIVED_________________________ hereby sells, assigns
and transfers unto______________________________________________________________
(Please print name, address and Social Security No. of Transferee)
________________ warrants represented by this Warrant Certificate together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint __________________________________attorney to transfer the warrants
on the books of the within named company, with full power of substitution.
Dated:_____________________ Signature:_____________________________
___________________________ Signature:_____________________________
Social Security Number (Signature must conform in
all respects to name of
holder and specified on the
face of the Warrant)
-7-
<PAGE> 1
Exhibit 5.1
[LETTERHEAD OF WALLACE, BAUMAN, LEGON, FODIMAN & SHANNON, P.A.]
August 25, 1999
Renex Corp.
201 Alhambra Circle, Suite 800
Coral Gables, Florida 33134
Re: RENEX CORP.
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as counsel to Renex Corp., a Florida corporation
(the "Company"), in connection with the preparation and filing of the
registration statement on Form S-3 (the "Registration Statement"), with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act") and the prospectus contained therein with
respect to the public offering of up to 495,420 shares of the Company's common
stock, par value $0.001 (the "Shares"). All of the Shares are being offered on
behalf of certain selling stockholders (the "Selling Stockholders"). In
connection with the registration of the Shares, you have requested our opinion
with respect to the matters set forth below.
For purposes of this opinion, we have reviewed the Registration
Statement. In addition, we have examined the originals or copies certified or
otherwise identified to our satisfaction of: (i) the Company's Certificate of
Incorporation, as amended to date; (ii) the By-laws of the Company, as amended
to date; (iii) records of the corporate proceedings of the Company as we deemed
necessary or appropriate as a basis for the opinions set forth herein; and (iv)
those matters of law as we have deemed necessary or appropriate as a basis for
the opinions set forth herein. We have not made any independent review or
investigation of the organization, existence, good standing, assets, business
or affairs of the Company, or of any other matters. In rendering our opinion,
we have assumed without inquiry the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of these documents submitted to us as copies.
We have not undertaken any independent investigation to
determine facts bearing on this opinion, and no inference as to the best of our
knowledge of facts based on an independent investigation should be drawn from
this representation. Further, our opinions, as hereinafter expressed, are
subject to the following exceptions, limitations and qualifications: (i) the
effect of bankruptcy, insolvency, fraudulent conveyance, reorganization,
arrangement, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights and remedies of creditors; and (ii) the
effect of general principles of equity, whether enforcement is considered in a
proceeding in equity or at law and the discretion of the court before which any
proceeding therefore may be brought.
We are admitted to the practice of law only in the State of
Florida and, accordingly, we do not purport to be experts on the laws of any
other jurisdiction nor do we express an opinion as to the laws of jurisdictions
other than the laws of the State of Florida .
<PAGE> 2
Renex Corp.
August 25, 1999
Page 2
On the basis of, and in reliance upon, the foregoing, and
subject to the qualifications contained herein, we are of the opinion that the
shares of common stock being sold by the selling shareholders upon exercise of
the warrants, as more fully described in the Registration Statement will be
duly authorized, legally issued, fully paid and none assessable when the
warrants are exercised and are paid to the Company.
We hereby consent to your filing this opinion as an exhibit to
the Registration Statement and to the reference to our firm contained under the
heading "Legal Matters."
This opinion is rendered only to you and is solely for your
benefit in connection with the transactions covered hereby. This opinion may
not be relied upon by you for any other purpose or furnished, or quoted to, or
relied upon by any other person, firm or corporation for any purpose without
our prior express written consent.
Respectfully submitted,
WALLACE, BAUMAN, LEGON,
FODIMAN & SHANNON, P.A.
BRYAN W. BAUMAN
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by refence in this Registration Statement of
Renex Corp. on Form S-3 of our report dated March 4, 1999, appearing in the
Annual Report on Form 10-K of Renex Corp. for the year ended December 31, 1998,
and to the refence to us under the heading "Experts" in the Prospectus, which
is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Miami, Florida
August 27, 1999
