Exhibit 4.3
STOCK PURCHASE WARRANT AGREEMENT
TO SUBSCRIBE FOR AND PURCHASE SHARES OF
COVALENT GROUP, INC.
THIS CERTIFIES THAT, for value received, S&F Consulting, Inc.
(hereinafter called "Holder") or registered assign(s), is entitled to subscribe
for and purchase from Covalent Group Inc., incorporated under the laws of the
State of Nevada (hereinafter called the "Company") at the price of $5.25 per
share at any time from the issuance of this Warrant to and including the date
five (5) years from said date up to One Hundred Thousand (100,000) fully paid
and non-assessable shares of the Company's Common Stock, subject however, to the
provisions and upon the terms and conditions hereinafter set forth.
THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 OR THE SECURITIES LAWS OF NEVADA OR ANY OTHER STATE AND MAY BE
OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT
PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF AN EXEMPTION FROM
SUCH REGISTRATION OR QUALIFICATION IS APPLICABLE.
1. Warrant. The rights represented by this Warrant may be exercised
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by the Holder hereof, in whole or in part (but not as to a fractional share of
Common Stock), by the surrender of the Warrant Certificate or Certificates with
the Form of Election to Purchase duly executed, at the principal office of the
Company and upon payment to it, for the account of the Company, by cash, check,
certified check or bank draft, of the purchase price for such shares of Common
Stock. The Company agrees that the shares of Common Stock shall be and be
deemed to be issued to the Holder hereof as the record owner of such Shares, as
of the close of business on the date on which the Warrant Certificate shall have
been surrendered and payment made for such Shares, as aforesaid. Certificates
for the Shares shall be delivered to the Holder hereof within a reasonable time,
not exceeding ten days, after the rights represented by this Warrant shall have
been so exercised, and, unless this Warrant has expired, a new Warrant
Certificate, representing the number of shares of Common Stock, if any, with
respect to which this Warrant shall not then have been exercised, shall also be
issued to the Holder hereof within such time. The Company shall have no right to
call the Warrant or the shares of Common Stock issued upon the exercise hereof.
2. Transferability. The Holder of this Warrant, by acceptance
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hereof, agrees that, prior to the disposition of the Warrant or shares of Common
Stock purchased on the exercise thereof under circumstances which might require
registration of such securities under the Securities Act of 1933, as then in
force, or any similar federal statute then in force, such
Holder will give written notice to the Company, expressing such Holder's
intention of effecting as to the disposition to be made of the securities
theretofore issued upon exercise hereof. If, in the written opinion of Holder's
counsel, subject to the written approval of Company's counsel the proposed
disposition does not require registration under the Securities Act of 1933, as
then in force, or any similar federal statute then in force, of the Warrant or
securities issuable or issued upon the exercise of this Warrant, the Holder,
subject to the company's counsel's written approval, shall, as promptly as
practicable, notify the Company hereof of such opinion, whereupon such Holder
shall be entitled to dispose of the Warrant or such securities theretofore
issued upon the exercise hereof, all in accordance with the terms of the notice
delivered by such Holder to the Company.
3. Shares Issuable Upon Exercise. The Company covenants and agrees
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that all securities that may be issued upon the exercise of the rights,
represented by this Warrant will, upon issuance, be validly issued, fully paid
and non-assessable, and free from all taxes, liens, and
charges with respect to the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue). The Company further
covenants and agrees that, during the period within which the rights represented
by this Warrant may be exercised, the Company will at all times have authorized,
and reserved, a sufficient number of shares of its Common Stock to provide for
the exercise of rights presented by this Warrant.
4. Certain Events. In the case, at any time during the period this
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Warrant shall be exercisable, (i) the Company shall pay any dividend payable in
stock on its Common Stock, or make any distribution (other than cash dividends
paid at established annual or quarterly rates) to the Holders of its Common
Stock; (ii) the Company shall offer for subscription pro rata to the Holders of
its Common Stock any additional shares of stock of any class, or other rights;
(iii) there shall be any capital reorganization, or reclassification of the
capital stock of the Company, or consolidation or merger of the Company with, or
sale of all or substantially all, its assets to another corporation; or (iv)
there shall be a voluntary or involuntary dissolution, liquidation or winding-up
of the Company, then, in any one or more of such cases, the Company shall give
to the Holder of this Warrant (i) at least twenty days prior written notice of
the date on which the books of the Company shall close or a record shall be
taken for such dividend, distribution or subscription rights, or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, and (ii) in
the case of any such reorganization, liquidation or winding-up, at least twenty
days prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (i) shall also specify, in the
case of any such dividend, distribution or subscription rights, the date on
which the Holders of Common Stock shall be entitled thereto, and such notice in
accordance with the foregoing clause (ii) shall also specify when the holders of
Common Stock shall be entitled to exchange their Common Stock for securities or
the property deliverable upon such reorganization, liquidation or winding-up, as
the case may be. Each such written notice shall be given by first class mail,
postage prepaid, addressed to the Holder of the Warrant at the address of such
Holder as shown on the books of the Company.
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5. Common Stock. As use herein, the term "Common Stock" shall mean
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and include the Company's Common Stock authorized on the date of the original
issue of any class of the Company thereafter authorized that shall not be
limited to a fixed sum or percentage in respect to the rights of the Holders
thereof to participate in dividends and in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding-up of the Company,
provided, that the shares purchasable pursuant to this Warrant shall include
only shares of such class referred to in the first paragraph hereof designated
in the Company's Articles of Incorporation as Common Stock on the date of the
original issue or Warrant, or, in case of any reorganization, reclassification,
consolidation, merger or sale of assets of the character referred to in
paragraph 4 hereof, the stock, securities or assets provided for in such
paragraph.
6. Exchange of Warrant Certificate. The Warrant Certificate is
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exchangeable, upon its surrender by the registered Holder at such office or
agency of the Company, for a new Warrant Certificate of like tenor,
representing, in the aggregate, the right to subscribe for and purchase
hereunder each of such new Warrant to represent the right to subscribe for and
purchase such number of shares and warrants as shall be designated by the
registered Holder at the time of such surrender. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Warrant Certificate, and, in case of any such loss, theft or destruction, upon
delivery of a bond of indemnity satisfactory to the Company, or, in the case of
any such mutilation, upon surrender or cancellation of the Warrant Certificate,
the Company will issue to the registered Holder a new Warrant Certificate of
like tenor, in lieu of the Warrant Certificate, representing the right to
subscribe for and purchase the number of shares that may be subscribed for and
purchased at that time.
7. Registration Rights. The Company covenants and agrees as
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follows:
A. Piggy-Back Registration. If (but without any obligation to
do so) the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the Holder(s))
any of its stock or other securities under the Act in connection with the public
offering of such securities solely for cash (other than a registration relating
solely to the sale of securities to participants in a Company stock plan, a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities or a registration in which the
only Common Stock being registered is Common Stock issuable upon conversion of
debt securities which are also being registered), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty (20) days after mailing of
such notice by the Company the Company shall cause to be registered under the
Act all of the Registrable Securities that each such Holder has requested to be
registered.
B. Obligations of the Company. Whenever required under this
paragraph 1 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
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i. Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for a period of up to one hundred twenty
(120) days or until the distribution contemplated in the Registration Statement
has been completed; provided, however, that (i) such 120-day period shall be
extended for a period of time equal to the period the Holder refrains from
selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities which are intended to be
offered on a continuous or delayed basis, such 120-day period shall be extended,
if necessary, to keep the registration statement effective until all such
Registrable Securities are sold.
ii. Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
iii Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request.
iv. Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders (no more than 5 states).
v. In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
vi. Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
vii. Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange or over-the-counter
market on which similar securities issued by the Company are then listed.
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viii. Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration.
C. Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this paragraph 1
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
D. Expenses of Piggy-Back Registration. The Company shall bear
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to subparagraph B for each Holder including fees and disbursements of
counsel for the Company in its capacity as counsel to the selling Holders
hereunder; if Company counsel does not make itself available for this purpose,
the Company will pay the reasonable fees and disbursements of one counsel for
the selling Holders selected by them, but excluding underwriting discounts and
commissions relating to Registrable Securities.
E. Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under subparagraph B to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters).
H. Indemnification. In the event any Registrable Securities are included in a
registration statement under this paragraph 8:
i. To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, any underwriter (as defined in the Act)
for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Act or the 1934 Act, against any losses, claims,
damages, or liabilities joint or several) to which they may become subject under
the Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, or the 1934 Act or any state
securities law; and the Company will pay to each such Holder, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them
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in connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, this the indemnity agreement shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.
ii. To the extent permitted by law, each selling Holder
will indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities joint or several) to which any of the foregoing persons
may become subject, under the Act, or the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified hereunder, in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that this
indemnity agreement shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this subdivision ii exceed
the gross proceeds from the offering received by such Holder.
iii. Promptly after receipt by an indemnified party under
this subparagraph E of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this subparagraph E, deliver
to the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any
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liability to the indemnified party under this subparagraph E, but the omission
so to deliver written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than under
this subparagraph E.
iv. If the indemnification provided for in this
subparagraph E is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
v. The obligations of the Company and Holders under this
subparagraph E shall survive the completion of any offering of Registrable
Securities in a registration statement under this paragraph 8, and otherwise.
F. Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this paragraph 8 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities provided: (a) the Company is, within a reasonable
time after such transfer, furnished with written notice of the name and address
of such transferee or assignee and the securities with respect to which such
registration rights are being assigned; (b) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement; and (c) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act.
8. Notices. Notices pursuant to this Agreement shall be given by
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first-class mail, postage prepaid, addressed to the registered Holder of each
Warrant at the address of such Holder appearing in the records of the Company,
if to the Holder, and to the Company's principal executive office, if to the
Company.
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IN WITNESS WHEREOF, Covalent Group, Inc. has caused this Warrant to be
signed by its duly authorized officers under its corporate seal, to be dated,
May 8, 1996.
COVALENT GROUP, INC.
By: /s/ Xxxxx XxXxxx
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Xxxxx XxXxxx
President
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