-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DiArZKc2auMYvMuFJ3aF6JdOHtWOYFPuoQ+ywQIlMGpICLMUjl6FBRHxRBMCtH4w fDzcbrfycfOvn0ZdSq7jbQ== /in/edgar/work/20000828/0001036050-00-001608/0001036050-00-001608.txt : 20000922 0001036050-00-001608.hdr.sgml : 20000922 ACCESSION NUMBER: 0001036050-00-001608 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20000828 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: COVALENT GROUP INC CENTRAL INDEX KEY: 0000856569 STANDARD INDUSTRIAL CLASSIFICATION: [3826 ] IRS NUMBER: 561668867 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-54209 FILM NUMBER: 711483 BUSINESS ADDRESS: STREET 1: ONE GLENHARDIE CORPORATE CENTER STREET 2: 1275 DRUMMERS LANE STE 100 CITY: WAYNE STATE: PA ZIP: 19087 BUSINESS PHONE: 6109759533 MAIL ADDRESS: STREET 1: ONE GLENHARDIE CORPORATE CENTER STREET 2: 1275 DRUMMERS LANE, SUITE 100 CITY: WAYNE STATE: PA ZIP: 19087 FORMER COMPANY: FORMER CONFORMED NAME: FUTURE MEDICAL TECHNOLOGIES INTERNATIONAL INC DATE OF NAME CHANGE: 19950801 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BOROW KENNETH M MD CENTRAL INDEX KEY: 0001057768 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 407 WYNTRELEA DRIVE CITY: BRYN MAWR STATE: PA ZIP: 19010 BUSINESS PHONE: 6109759533 MAIL ADDRESS: STREET 1: 407 WYNTRELEA DRIVE CITY: BRYN MAWR STATE: PA ZIP: 19010 SC 13D 1 0001.txt SCHEDULE 13-D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Covalent Group, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $.001 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 222815 10 2 ----------- (CUSIP Number) Kenneth M. Borow, M.D. Covalent Group, Inc. One Glenhardie Center, Suite 100 1275 Drummers Lane Wayne, Pennsylvania 19087 (610) 975-9533 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 6, 2000 - -------------------------------------------------------------------------------- (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. [_] Note: Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. - ---------------------------- ------------------------------ CUSIP No. 222815 10 2 Page 2 of 6 Pages ----------- - ---------------------------- ------------------------------ - -------------------------------------------------------------------------------- 1. NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Kenneth M. Borow, M.D. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A GROUP* (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS PF, OO - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [_] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - ------------------------------------------------------------------------------ NUMBER OF 7. SOLE VOTING POWER 1,132,104 SHARES (INCLUDES OPTIONS TO PURCHASE 611,104 SHARES) ------------------------------------------------------------ BENEFICIALLY 8. SHARED VOTING POWER 39,000 OWNED BY ------------------------------------------------------------ EACH 9. SOLE DISPOSITIVE POWER 1,132,104 REPORTING (INCLUDES OPTIONS TO PURCHASE 611,104 SHARES) ------------------------------------------------------------ PERSON WITH 10. SHARED DISPOSITIVE POWER 39,000 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,171,104 (INCLUDES OPTIONS TO PURCHASE 611,104 SHARES) - -------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES * [_] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.2% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT! Item 1. Security and Issuer. (a) Title of the Security: Common Stock, $.001 par value per share. (b) Name of the Issuer: Covalent Group, Inc., a Nevada corporation. (c) The Issuer's address of its principal executive office: One Glenhardie Corporate Center 1275 Drummers Lane, Suite 100 Wayne, Pennsylvania 19087 Item 2. Identity and Background. (a) Name: Kenneth M. Borow, M.D. (b) Business Address: One Glenhardie Corporate Center 1275 Drummers Lane, Suite 100 Wayne, Pennsylvania 19087 (c) Present principal occupation and name and address of such principal occupation: Dr. Borow is the Chief Executive Officer and a Director of the Issuer. The address of the Issuer is One Glenhardie Corporate Center, 1275 Drummers Lane, Suite 100, Wayne, Pennsylvania, 19087. (d) Criminal Convictions within the past five years: Dr. Borow has not been the subject of any criminal proceeding resulting in his conviction in the previous five years from the date of the statement. (e) Party to a Civil Proceeding in the past five years: During the past five years, Dr. Borow has not been a party to any civil proceeding of a judicial or administrative body with said proceeding resulting in judgement, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Citizenship: United States of America. Item 3. Source and Amount of Funds or Other Consideration. Dr. Borow is the beneficial owner of 611,104 shares of common stock underlying two option grants by the Issuer which are currently exercisable or exercisable within 60 days of the date of this statement. The Issuer granted Dr. Borow the right to purchase 500,000 shares of common stock on August 6, 1998 at an exercise price of $.6875 per share which are fully vested as of the date of this statement. On January 31, 2000, the Issuer granted Dr. Borow the right to purchase 500,000 shares of common stock exercisable at $4.00 per share which one-thirty-sixth of the shares vest per month beginning on February 28, 2000. Pursuant to the terms of the Issuer's 1996 Stock Incentive Plan, Dr. Borow can exercise these options by tendering full purchase price either by certified or bank check, or, in the sole discretion of the Board of Directors of the Issuer, Dr. Borow and the Issuer may cooperate in a "cashless exercise" of the options. Dr. Borow used his personal funds to purchase 100,000 shares of common stock at various times between January 1997 and May 2000 and borrowed $1,380,000 from Covalent Partners, LLC to purchase 460,000 shares of common stock on August 20, 2000. Dr. Borow signed a promissory note in favor of Covalent Partners, LLC in principal amount of $1,380,000 which accrues interest at 7% per annum and is payable on August 21, 2005. Item 4. Purpose of Transaction. Dr. Borow is the Chief Executive Officer and a Director of the Issuer and may buy and sell shares of common stock from time to time. In addition, he is eligible to participate in the Issuer's employee benefit plans, pursuant to which he may purchase common stock or receive grants of common stock or derivative securities and thereby become the beneficial owner of common stock. Dr. Borow acquired his shares of common stock for investment purposes and not with a purpose or effect of changing or influencing control of the Issuer or as a participant in any transaction having that purpose or effect. Except as set forth above, Dr. Borow has no plans or proposals with respect to any of the matters set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. (a) Aggregate Number of Shares Beneficially Owned: 1,171,104 shares of common stock of which 611,104 represents shares of common stock which may be acquired upon the exercise of stock options or may acquired upon the exercise of options with 60 days of the date of this statement. Percentage of Securities Beneficially Owned: 9.2% (b) Dr. Borrow has sole voting power and sole dispositive power over 1,132,104 shares of common stock reported or beneficially owned by Dr. Borow and shares dispositive power over 39,000 shares of common stock with his wife and children. (c) On August 20, 2000, Dr. Borow purchased 460,000 shares of common stock from Covalent Partners, LLC for a total purchase price of $1,380,000. Dr. Borow borrowed $1,380,000 from Covalent Partners, LLC in order to pay the full purchase price of the shares. Dr. Borow signed a promissory note in favor of Covalent Partners, LLC in principal amount of $1,380,000 which accrues interest at 7% per annum and is payable on August 21, 2005. (d) Not Applicable. (e) Not Applicable. Item 6 Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer. Dr. Borow is the beneficial owner of 611,104 shares of common stock underlying two option grants by the Issuer which are currently exercisable or exercisable within 60 days of the date of this statement. The Issuer granted Dr. Borow the right to purchase 500,000 shares of common stock on August 6, 1998 at an exercise price of $.6875 per share which are fully vested as of the date of this statement. On January 31, 2000, the Issuer granted Dr. Borow the right to purchase 500,000 shares of common stock exercisable at $4.00 per share which one-thirty-sixth of the shares vest per month beginning on February 28, 2000. Pursuant to the terms of the Issuer's 1996 Stock Incentive Plan, Dr. Borow can exercise these options by tendering full purchase price either by certified or bank check, or, in the sole discretion of the Board of Directors of the Issuer, Dr. Borow and the Issuer may cooperate in a "cashless exercise" of the options. Dr. Borow used his personal funds to purchase 100,000 shares of common stock of the Issuer at various times between January 1997 and May 2000 and borrowed $1,380,000 from Covalent Partners, LLC to purchase 460,000 shares of common stock on August 20, 2000. Dr. Borow signed a promissory note in favor of Covalent Partners, LLC in principal amount of $1,380,000 which accrues interest at 7% per annum and is payable on August 21, 2000. EXHIBIT INDEX Item 7. Material to Be Filed as Exhibits Exhibit No. Description of Exhibit 99.1 Amended and Restated Covalent Group, Inc. 1996 Stock Incentive Plan (incorporated by reference to Annex A of the Issuer's definitive proxy statement filed on May 1, 2000). 99.2 Secured Promissory Note. 99.3 Agreement for Sale of Stock. SIGNATURE --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 28, 2000 /s/ Kenneth M. Borow, M.D. -------------------------- Kenneth M. Borow, M.D. Chief Executive Officer EX-99.2 2 0002.txt SECURED PROMISSORY NOTE EXHIBIT 99.2 August 20, 2000 $1,380,0000 SECURED PROMISSORY NOTE FOR VALUE RECEIVED, the undersigned, Kenneth Borow, M.D. (Borrower), promises to pay to Covalent Partners, LLC (Lender), the aggregate sum of One Million Three Hundred Eighty Thousand Dollars ($1,380,000.00), subject to the following terms and conditions. 1. Due Date. Payment in full is due no later than August 21, 2005. 2. Interest. Interest shall accrue at the rate of 7% per annum, commencing on August 21, 2000, and shall accumulate and be due and payable, together with the principal, on August 21, 2005. 3. Security Interest. In order to secure payment of the sums due Lender hereunder, Borrower grants to Lender a security interest in Four Hundred Sixty Thousand (460,000) shares of the Common Stock of Covalent Group, Inc. (the "Stock"), and has delivered to Lender herewith the certificate(s) representing the Stock, together with an assignment separate from certificate executed by Borrower directing Covalent Group, Inc. or its transfer agent to transfer the Stock to Lender. Lender is entitled to direct such transfer in the event of any default hereunder. 4. Expenses of Collection. In the event that Borrower shall be in default under this note he shall be liable for any expenses incurred by Lender in connection with efforts to collect any amount due to Lender hereunder, including reasonable attorney's fees. 5. Nature of Transaction. Borrower agrees and affirms that this note is entered into for commercial purposes and is not made in connection with a personal or consumer transaction. 6. Governing Law. This note shall be governed by the laws of the State of California, without regard to its conflict of laws principles. IN WITNESS WHEREOF, the parties hereto have set their hands and seals this 20th day of August 2000 Kenneth Borow, M.D. COVALENT PARTNERS, LLC /s/ Kenneth Borrow, M.D. Richard D. Propper - ------------------------ ------------------ Richard D. Propper, Its Manager EX-99.3 3 0003.txt AGREEMENT FOR SALE OF STOCK AGREEMENT FOR SALE OF STOCK This agreement is made and entered into this 20th day of August, 2000, by and between Covalent Partners, LLC, a Delaware limited liability company (Seller) and Kenneth Borow, M.D. (Buyer). WHEREAS, Seller is the owner of Four Hundred Sixty Thousand (460,000) shares of the common stock (the Stock) of Covalent Group, Inc. (Covalent) that Seller wishes to sell; and WHEREAS, Buyer wishes to purchase the Stock from Seller, and Seller wishes to sell the Stock to Buyer on the terms set forth in this Agreement; NOW, THEREFORE, Buyer and Seller agree as follows: 1. Seller shall sell the Stock to Buyer at a purchase price of $3.00 per share, for a total purchase price of $1,380,000. 2. Payment for the Stock shall be in the form of a secured note in the amount of $1,380,000 from Buyer to Seller in the form attached hereto as Appendix A. 3. Upon transfer to Buyer, the Stock shall be subject to the same restrictions as applied to the Stock when held by Seller, and Buyer shall execute and deliver to Seller or to the law firm of Pepper Hamilton, LLP the Investment Representation Letter that is attached to this Agreement as Appendix B. 4. Buyer represents and warrants that he is an accredited investor within the meaning of that term under the securities laws of the United States, and represents specifically that he either: (a) has a net worth of at least $1,000,000 or (b) has had individual income of $200,000 (or $300,000 jointly with his spouse) during 1998 and 1999 and reasonably expects to have individual income of $200,000 (or $300,000 jointly with his spouse) in 2000. Buyer agrees to allow Covalent to rely on this representation. 5. This Agreement may be executed in counterparts by the respective parties. The Agreement shall take effect upon the mutual exchange of faxed signature pages, to be followed by an exchange of originals of the entire Agreement and its Appendices, all of which are completed and executed. IN WITNESS WHEREOF, the parties have set their hands and seals as of the date first above written. BUYER SELLER KENNETH BOROW, M.D. COVALENT PARTNERS, LLC /S/ Kenneth Borrow, M.D. /s/ Richard D. Propper, M.D. - --------------------------- ------------------------------------ Richard D. Propper, MD, Its Manager Appendix A ---------- August 20, 2000 $1,380,0000 SECURED PROMISSORY NOTE FOR VALUE RECEIVED, the undersigned, Kenneth Borow, M.D. (Borrower), promises to pay to Covalent Partners, LLC (Lender), the aggregate sum of One Million Three Hundred Eighty Thousand Dollars ($1,380,000.00), subject to the following terms and conditions. 1. Due Date. Payment in full is due no later than August 21, 2005. 2. Interest. Interest shall accrue at the rate of 7% per annum, commencing on August 21, 2000, and shall accumulate and be due and payable, together with the principal, on August 21, 2005. 3. Security Interest. In order to secure payment of the sums due Lender hereunder, Borrower grants to Lender a security interest in Four Hundred Sixty Thousand (460,000) shares of the Common Stock of Covalent Group, Inc. (the "Stock"), and has delivered to Lender herewith the certificate(s) representing the Stock, together with an assignment separate from certificate executed by Borrower directing Covalent Group, Inc. or its transfer agent to transfer the Stock to Lender. Lender is entitled to direct such transfer in the event of any default hereunder. 4. Expenses of Collection. In the event that Borrower shall be in default under this note he shall be liable for any expenses incurred by Lender in connection with efforts to collect any amount due to Lender hereunder, including reasonable attorney's fees. 5. Nature of Transaction. Borrower agrees and affirms that this note is entered into for commercial purposes and is not made in connection with a personal or consumer transaction. 6. Governing Law. This note shall be governed by the laws of the State of California, without regard to its conflict of laws principles. IN WITNESS WHEREOF, the parties hereto have set their hands and seals this 20th day of August 2000 Kenneth Borow, M.D. COVALENT PARTNERS, LLC /s/ Kenneth Borrow, M.D. Richard D. Propper - ------------------------ ------------------ Richard D. Propper, Its Manager Appendix B ---------- August 21, 2000 Covalent Group, Inc. 1275 Drummers Lane, Suite 1000 Wayne, PA 19087 Re: The purchase of shares of Covalent Group Common Stock from Covalent Partners, LLC Gentlemen: The undersigned hereby makes the following acknowledgments with respect to the transfer to him of Four Hundred Sixty Thousand (460,000) shares of the Common Stock of Covalent Group, Inc. (the "Company") from Covalent Partners, LLC (the "Transferor"). The undersigned understands that the shares have not been registered under the Securities Act of 1933, as amended (the "Act"), on the basis that no distribution or public offering of the shares is to be effected. The undersigned recognizes that the shares being acquired by the undersigned must be held indefinitely unless they are subsequently registered under the Act or an exemption from such registration is available. The undersigned recognizes that the Company has no obligation to register the shares or to comply with any exemption from such registration. The undersigned agrees to be bound by all restrictions and obligations with respect to the shares he/she is acquiring to which the Transferor was bound, including any restrictions with respect to the transfer or sale of such shares. The undersigned is aware that the shares may not be sold pursuant to Rule 144 adopted under the Act unless certain conditions are met and until the undersigned has held the shares for the applicable holding period under Rule 144. Among the conditions for use of the Rule is the availability of current information to the public about the Company. The undersigned understands that the Company has not made such information available and has no present plans to do so. The undersigned further agrees not to make any disposition of all or any part of the shares being acquired in any event unless and until: 1. The Company shall have received a letter secured by the undersigned from the Securities and Exchange Commission stating that no action will be recommended to the Commission with respect to the proposed disposition; or 2. There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with said registration statement; or 3. (i) The undersigned shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, (ii) the undersigned shall have furnished the Company with an opinion of counsel for the undersigned to the effect that such disposition will not require registration of such shares under the Act, and (iii) such opinion of counsel for the undersigned shall have been concurred in by the Company's counsel and the Company shall have advised the undersigned of such concurrence. The undersigned understands and agrees that all certificates evidencing the shares to be issued to the undersigned shall bear the following legends: THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER ANY STATE OF FEDERAL SECURITIES LAWS AND IS BEING SOLD PURSUANT TO APPLICABLE EXEMPTIONS FROM REGISTRATION OR QUALIFICATION. THE TRANSFER OF THIS SECURITY IS RESTRICTED. SEE THE ARTICLES OF INCORPORATION, BYLAWS OR SHAREHOLDER AGREEMENT FOR DETAILS. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A VOTING AGREEMENT WHICH PLACES CERTAIN RESTRICIONS ON THE VOTING OF THE SHARES REPRESENTED HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH VOTING AGREEMENT WILL BE FUNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS. In addition to the representations and acknowledgements set forth above, the undersigned further represents that he is an accredited investor within the meaning of United States Securities laws. Very truly yours, /s/ Kenneth Borow, M.D. - ----------------------- Kenneth Borow, M.D. -----END PRIVACY-ENHANCED MESSAGE-----