<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
SCHEDULE 13D
AMENDMENT NO. 1
UNDER THE SECURITIES EXCHANGE ACT OF 1934
COVALENT GROUP, INC.
- --------------------------------------------------------------------------------
(NAME OF THE ISSUER)
COMMON STOCK, $0.001 PAR VALUE PER SHARE
- --------------------------------------------------------------------------------
(TITLE OF CLASS OF SECURITIES)
222815 10 2
- --------------------------------------------------------------------------------
(CUSIP NUMBER)
BRUCE LAMONT
COVALENT GROUP, INC.
ONE GLENHARDIE CORP. CENTER
1275 DRUMMERS LANE, SUITE 100
WAYNE, PA 19087
(610) 975-9533
- --------------------------------------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
NOVEMBER 27, 1999
- --------------------------------------------------------------------------------
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Page 1 of 13 Pages)
(Continued on following pages)
1.
<PAGE> 2
CUSIP NO. 222815 10 2 SCHEDULE 13D Page 2 of 13 Pages
--------------------- -------- --------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
COVALENT PARTNERS, LLC
33-08-78998
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS
WC, 00
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF -0-
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 204,000
REPORTING --------------------------------------------------------
PERSON WITH (9) SOLE DISPOSITIVE POWER
-0-
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
1,454,000
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,219,500 - SEE ITEM 5
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [X]
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.6% - SEE ITEM 5
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
CO
---------------------------------------------------------------------
* Calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as
amended. Includes any rights to acquire beneficial ownership of securities of
the Issuer within 60 days of the date of the filing of this Schedule 13D.
** Based upon 12,059,693 shares of Common Stock issued and outstanding as
reported on the Issuer's Quarterly Report filed on Form 10-QSB for the
quarter ended September 30, 1999.
2.
<PAGE> 3
CUSIP NO. 222815 10 2 SCHEDULE 13D Page 3 of 13 Pages
--------------------- -------- --------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
RICHARD D. PROPPER
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS
PF
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [X]
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF 310,000
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 204,000
REPORTING --------------------------------------------------------
PERSON WITH (9) SOLE DISPOSITIVE POWER
310,000
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
1,454,000
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,529,500 - SEE ITEM 5
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [X]
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.1% - SEE ITEM 5
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
IN
---------------------------------------------------------------------
* Calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as
amended. Includes any rights to acquire beneficial ownership of securities of
the Issuer within 60 days of the date of the filing of this Schedule 13D.
** Based upon 12,059,693 shares of Common Stock issued and outstanding as
reported on the Issuer's Quarterly Report filed on Form 10-QSB for the
quarter ended September 30, 1999.
3.
<PAGE> 4
CUSIP NO. 222815 10 2 SCHEDULE 13D Page 4 of 13 Pages
--------------------- -------- --------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
MICHAEL D. CHERMAK
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS
PF
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF 43,000
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 204,000
REPORTING --------------------------------------------------------
PERSON WITH (9) SOLE DISPOSITIVE POWER
43,000
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
1,454,000
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,262,500 - SEE ITEM 5
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [X]
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.9% - SEE ITEM 5
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
IN
---------------------------------------------------------------------
* Calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as
amended. Includes any rights to acquire beneficial ownership of securities of
the Issuer within 60 days of the date of the filing of this Schedule 13D.
** Based upon 12,059,693 shares of Common Stock issued and outstanding as
reported on the Issuer's Quarterly Report filed on Form 10-QSB for the
quarter ended September 30, 1999.
4.
<PAGE> 5
CUSIP NO. 222815 10 2 SCHEDULE 13D Page 5 of 13 Pages
--------------------- -------- --------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
SALMAN J. CHAUDHRY
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS
PF
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [X]
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
PAKISTAN
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF 16,700
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY -0-
REPORTING --------------------------------------------------------
PERSON WITH (9) SOLE DISPOSITIVE POWER
16,700
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
-0-
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,700 - SEE ITEM 5
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [X]
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 1% - SEE ITEM 5
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
IN
---------------------------------------------------------------------
* Calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as
amended. Includes any rights to acquire beneficial ownership of securities of
the Issuer within 60 days of the date of the filing of this Schedule 13D.
** Based upon 12,059,693 shares of Common Stock issued and outstanding as
reported on the Issuer's Quarterly Report filed on Form 10-QSB for the
quarter ended September 30, 1999.
5.
<PAGE> 6
This Amendment No. 1 amends and restates the Schedule 13D filed by the Reporting
Persons (as defined in Item 2) on November 10, 1999.
ITEM 1. SECURITY AND THE ISSUER
(a) TITLE OF SECURITY:
Common Stock, $0.001 par value per share.
(b) NAME OF THE ISSUER:
Covalent Group, Inc., a Nevada corporation.
(c) THE ISSUER'S PRINCIPAL EXECUTIVE OFFICE:
One Glenhardie Corp. Center
1275 Drummers Lane, Suite 100
Wayne, PA 19087
ITEM 2. IDENTITY AND BACKGROUND
(a) This statement is being filed jointly (collectively,
the "Reporting Persons") on behalf of (i) Covalent Partners, LLC,
a Delaware limited liability company ("Covalent Partners"), (ii)
Richard D. Propper ("Propper"), (iii) Michael D. Chermak
("Chermak") and (iv) Salman J. Chaudhry ("Chaudhry").
Covalent Partners is principally in the business of
acquiring equity securities of the Issuer, including without
limitation, the right to vote and dispose of such securities.
(b)-(c) Set forth in Schedule I to this Schedule 13D is
information concerning the Reporting Persons as required to be
disclosed in response to this Item 2.
(d) To the best knowledge of the Reporting Persons, during
the last five years, there have been no criminal proceedings
against the Reporting Persons.
(e) On June 24, 1996, the SEC initiated an administrative
proceeding against Propper and others alleging that Propper
violated Sections 13(d), 13(g) and 16(a) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and Rules
13d-1, 13d-2; 16a-2, 16a-3 and former Rule 16a-1 promulgated
thereunder, by untimely filing Schedules 13D and 13G, and Forms
3, 4 and 5 with respect to certain transactions relating to the
beneficial ownership of securities held by Montgomery Medical
Ventures, L.P., Montgomery Medical Ventures II, L.P., Montgomery
Medical Partners, L.P. and Montgomery Medical Partners II, L.P.
The Commission accepted an offer of settlement submitted by
Propper whereby Propper agreed to the Commission's order to cease
and desist from committing or causing any violation or future
violation of, Sections 13(d), 13(g) and 16(a) of the Exchange Act
and Rules 13d-1, 13d-2, 16a-2 and 16a-3 promulgated thereunder.
6.
<PAGE> 7
Other than described in the foregoing paragraph, during
the last five years, to the best knowledge of the Reporting
Persons none of the Reporting Persons has been a party to any
civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in a judgment, 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) Propper and Chermak are citizens of the United States.
Chaudhry is a citizen of Pakistan.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to an Option Agreement, dated as of November 1,
1999, by and between Bruce LaMont ("LaMont") and Covalent
Partners (the "Option Agreement"), LaMont granted Covalent
Partners the option to purchase 6,015,500 shares of the
outstanding stock of the Issuer held by LaMont (the "Shares") at
a per share price of $2.00 (the "Option"). On November 1, 1999,
pursuant to the terms of the Option Agreement, Covalent Partners
elected to purchase 1,000,000 Shares of the Issuer for an
aggregate purchase price of $2,000,000. On November 27, 1999,
pursuant to the terms of the Option Agreement, Covalent Partners
elected to purchase 250,000 Shares of the Issuer for an aggregate
purchase price of $500,000.
Covalent Partners obtained funds to make the purchase
described in the foregoing paragraph through loan agreements with
its members. Chermak, through capital contributions and personal
funds, made a loan to Covalent Partners in the amount of
$1,000,000. Propper made a loan to Covalent Partners in the
amount of $1,000,000. Propper obtained such funds through a loan
agreement with California Bank & Trust whereby interest accrues
monthly at a prime rate plus .5% and principal and interest is
due and payable on April 15, 2000.
The foregoing summary of the source of the funds used by
Covalent Partners to purchase the shares of Common Stock of the
Issuer is qualified in its entirety by reference to a copy of (i)
the Promissory Note between Chermak and Covalent Partners
included as Exhibit 99.1 and incorporated herein in its entirety
by reference, (ii) the Promissory Note between Propper and
Covalent Partners included as Exhibit 99.2 and incorporated
herein in its entirety by reference and (iii) the loan agreement
between Propper and California Bank and Trust included as Exhibit
99.3 and incorporated herein in its entirety by reference.
Covalent Partners purchased 204,000 shares of the Issuer
in open market, transactions for an aggregate approximate amount
of $505,871. Covalent Partners obtained funds to make such
purchases through capital contributions from its non-controlling
members.
Propper purchased, through personal funds, 310,000 shares
of Common Stock of the Issuer in open market transactions for an
aggregate approximate amount of $616,795.
7.
<PAGE> 8
Chermak purchased, through personal funds, 43,000 shares
of Common Stock of the Issuer in open market transactions for an
aggregate approximate amount of $90,093.
Chaudhry purchased, through personal funds, 16,700 shares
of Common Stock of the Issuer in open market transactions for an
aggregate approximate amount of $32,838.
ITEM 4. PURPOSE OF THE TRANSACTION
Propper, Chermak and Chaudhry originally acquired shares
of the Issuer for general investment purposes.
Propper initiated discussions with LaMont regarding an
extraordinary transaction involving the acquisition of all of the
outstanding Common Stock of the Issuer held by LaMont. On
September 1, 1999, LaMont entered into a No-Shop Agreement with
Propper through his related investment firm, RP Associates, LLC.
A copy of the No-Shop Agreement is attached hereto as Exhibit
99.4. In connection with such discussions, Covalent Partners was
formed for the purpose of acquiring the shares of the Issuer in
order to change the management and Board of Directors of the
Issuer (the "Board").
Pursuant to the Option Agreement, and subject to the
conditions set forth therein, LaMont granted Covalent Partners
the Option. On November 1, 1999, pursuant to the terms of the
Option Agreement, Covalent Partners elected to purchase 1,000,000
shares of the Issuer held by LaMont for an aggregate purchase
price of $2,000,000. On November 27, 1999, Covalent Partners
elected to exercise its rights to purchase 250,000 additional
Shares. Covalent Partners has the option to purchase, on the
terms and subject to the conditions set forth in the Option
Agreement, the remaining Shares on or prior to January 15, 2000.
If Covalent Partners exercises the Option in full and acquires
6,015,500 shares of Common Stock of the Issuer from LaMont, a
substantial majority of the outstanding shares of Common Stock of
the Issuer would be exchanged for cash at a per share price of
$2.00. Covalent Partners, Propper, Chermak, affiliates of one or
both, or some combination thereof, would hold a majority of the
outstanding shares of Common Stock of the Issuer upon exercise of
the Option in full. In furtherance of Covalent Partners'
acquisition of the Common Stock of the Issuer, Covalent Partners
purchased 204,000 shares of Common Stock of the Issuer in open
market transactions. See Item 3.
Until January 15, 2000, LaMont is required to invite
Propper to all Board meetings of the Issuer. In the event that
Covalent Partners fails to exercise the option in full by January
15, 2000, LaMont is required to use his best efforts in his
capacity as a member of the Board and a stockholder of the Issuer
to appoint one additional member, as designated by Propper, to
the Board. In addition, upon Covalent Partners' exercise of the
8.
<PAGE> 9
Option in full on or before January 15, 2000, LaMont must
immediately resign as a Board member, Chief Executive Officer,
President and employee of the Issuer.
The foregoing summary of the Option Agreement is qualified
in its entirety by reference to the copy of the Option Agreement
included as Exhibit 99.5 to this Schedule 13D and incorporated
herein in its entirety by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a)-(b) Based on the Issuer's Quarterly Report on Form
10-QSB for the quarter ended September 30, 1999, there were
12,059,693 shares of Common Stock outstanding. The following
summarizes the shares of the Issuer beneficially owned by the
Reporting Persons:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF NUMBER OF SHARES OF
STOCK (BUT FOR STOCK BENEFICIALLY PERCENTAGE OF CLASS
INVESTOR RULE 13D-5(b)(1) OWNED BENEFICIALLY OWNED
- ---------------------- -------------------- ------------------- -------------------
<S> <C> <C> <C>
Covalent Partners, LLC 6,219,500 6,219,500 51.6%
Richard D. Propper 310,000 6,529,500 54.1%
Michael D. Chermak 43,000 6,262,500 51.9%
Salman J. Chaudhry 16,700 16,700 Less than 1%
</TABLE>
Beneficial ownership of 6,219,500 shares of Common Stock
of the Issuer otherwise beneficially owned by Covalent Partners
is attributed to Propper and Chermak by virtue of Rule
13d-5(b)(1) of the Exchange Act. Pursuant to Rule 13d-4 of the
Exchange Act, Covalent Partners disclaims beneficial ownership of
310,000 shares of Common Stock of the Issuer beneficially owned
by Propper, 36,000 shares beneficially owned by Chermak and
16,700 shares beneficially owned by Chaudhry; Propper disclaims
beneficial ownership of 43,000 shares of Common Stock of the
Issuer beneficially owned by Chermak and 16,700 shares held by
Chaudhry; Chermak disclaims beneficial ownership of 310,000
shares of Common Stock of the Issuer beneficially owned by
Propper and 16,700 shares beneficially owned by Chaudhry;
Chaudhry disclaims beneficial ownership of 6,219,500 shares of
Common Stock of the Issuer beneficially owned by Covalent
Partners, 6,529,500 shares beneficially owned by Propper and
6,262,500 shares beneficially owned by Chermak.
Propper has sole voting and dispositive power with respect
to 310,000 shares of Common Stock of the Issuer. Chermak has sole
voting and dispositive power with respect to 43,000 shares of
Common Stock of the Issuer. Chaudhry has sole voting and
dispositive power with respect to 16,700 shares of Common Stock
of the Issuer. Covalent Partners shares voting power with its
managing members with respect to 204,000 shares of Common Stock
of the Issuer and shares dispositive power with its managing
members with respect to 1,454,000 shares of Common Stock of the
Issuer.
9.
<PAGE> 10
Pursuant to Section 6(b) of the Option Agreement, until
the earlier of (i) January 31, 2000 or (ii) the date Covalent
Partners exercises the Option in full, Covalent Partners agreed
to grant voting rights to LaMont with respect to all of the
shares of Common Stock of the Issuer purchased by Covalent
Partners, including 1,250,000 shares purchased by Covalent
Partners pursuant to the Option Agreement. The grant of such
voting rights terminates immediately prior to a lawful sale of
the shares purchased by Covalent Partners in the public market.
In addition, if Covalent Partners fails to exercise the option in
full by January 15, 2000, LaMont has the right to buy back from
Covalent Partners, on or before January 31, 1999, any and all the
Shares acquired by Covalent Partners' exercise of the Option at a
price of $2.00 per share.
Set forth in Schedule II to this Schedule 13D is the name
of and certain information regarding the individual with whom
Covalent Partners shares the power to vote or to direct the vote
or to dispose or direct the disposition of Common Stock of
Issuer.
During the past five years, to the Reporting Persons'
knowledge, no person named in Schedule II to this Schedule 13D,
has been convicted in a criminal proceeding.
During the past five years, to the Reporting Persons'
knowledge, no person named in Schedule II to this Schedule 13D
was a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which such person
was or is subject to a judgment, decree or final order enjoining
future violations of or prohibiting or mandating activity subject
to federal or state securities laws or finding any violation with
respect to such laws.
To Covalent Partners' knowledge, all persons named in
Schedule II to this Schedule 13D are citizens of the United
States.
(c) Set forth in Schedule III to this Schedule 13D are the
transactions, other than the Option Agreement as described in
this Schedule, involving the Common Stock of the Issuer, entered
into by the Reporting Persons since September 10, 1999. All such
transactions were made for cash in open market transactions.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
In connection with the Option Agreement, Kenneth M. Borow
("Borow") and Covalent Partners entered into a Letter Agreement
dated November 1, 1999 (the "Letter Agreement"). Pursuant to the
Letter Agreement, Borow has agreed to remain employed as the
President, Chief Operating Officer and Chief Medical
10.
<PAGE> 11
Office of the Issuer until the earlier of Covalent Partners'
exercise of the Option in full and January 15, 2000. In addition,
upon Covalent Partners' exercise of the Option in full and
subject to the approval of the Issuer's Board, Borow will enter
into an employment agreement with the Issuer in the form attached
hereto as Exhibit 99.6. In consideration of the above, Covalent
Partners is required to grant an option to acquire from Covalent
Partners 460,000 shares of the Issuer's Common Stock at a price
of $2.00 per share to Borow upon Covalent Partners' exercise of
the Option in full.
The foregoing summary of the Letter Agreement is qualified
in its entirety by reference to a copy of the Letter Agreement
included as Exhibit 99.7 to this Schedule 13D and incorporated
herein in its entirety by reference.
Other than as described in the foregoing paragraphs and in
Item 4 above, to Covalent Partners' knowledge, there are no
contracts, arrangements, understandings or relationships (legal
or otherwise) among the persons named in Item 2 and between such
persons and any person with respect to any securities, finder's
fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
*99.1 Promissory Note dated October 29, 1999 by and between
Michael D. Chermak and Covalent Partners, LLC.
*99.2 Promissory Note dated October 29, 1999 by and between
Richard D. Propper and Covalent Partners, LLC.
*99.3 Business Loan Agreement dated October 26, 1999 by and
between Richard D. Propper and California Bank & Trust.
*99.4 No-Shop Agreement dated September 1, 1999 by and between
Bruce LaMont and RP Associates, LLC.
*99.5 Option Agreement dated November 1, 1999 by and between
Bruce LaMont and Covalent Partners, LLC.
*99.6 Form of Employment Agreement to be entered into by and
between Kenneth M. Borow and the Issuer.
*99.7 Letter Agreement dated November 1, 1999 by and between
Kenneth M. Borow and Covalent Partners, LLC.
- ------------
* Previously filed by the Reporting Persons with the Schedule 13D on November
10, 1999.
11.
<PAGE> 12
SIGNATURES
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.
December 3, 1999
COVALENT PARTNERS, LLC,
a Delaware limited liability company
By: /s/ Richard D. Propper
-----------------------------------------
Dr. Richard D. Propper
Managing Member
/s/ Richard D. Propper
--------------------------------------------
RICHARD D. PROPPER
/s/ Michael D. Chermak
--------------------------------------------
MICHAEL D. CHERMAK
/s/ Salman Chaudhry
--------------------------------------------
SALMAN J. CHAUDHRY
12.
<PAGE> 13
SCHEDULE I
REPORTING PERSONS,
CONTROLLING MEMBERS AND MANAGERS OF
COVALENT PARTNERS, LLC
<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS PRINCIPAL OCCUPATION OR EMPLOYMENT
- ------------------------- ----------------------------------
<S> <C>
Covalent Partners, LLC N/A
4350 La Jolla Village Drive, Suite 970
San Diego, CA 92121
Dr. Richard D. Propper Member and Manager of Covalent Partners, LLC
2890 Moon Ridge Drive
La Jolla, CA 92037
Michael D. Chermak Member and Manager of Covalent Partners, LLC
14 Sandpiper Strand
Coronado, CA 92118
Salman Chaudhry Financial Consultant
8503A Villa La Jolla Drive
San Diego, CA 92037
</TABLE>
<PAGE> 14
SCHEDULE II
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION OR EMPLOYMENT
- ---- ----------------------------------
<S> <C>
Bruce LaMont Chairman of the Board, President and Chief Executive
Covalent Group, Inc. Officer of Covalent Group, Inc.
One Glenhardie Corp. Center
1275 Drummers Lane, Suite 100
Wayne, PA 19087
</TABLE>
<PAGE> 15
SCHEDULE III
<TABLE>
<CAPTION>
AMOUNT OF PRICE PER
DATE OF THE COMMON STOCK SHARE
INVESTOR TRANSACTION OF ISSUER ($) TYPE OF TRADE BROKER
-------- ----------- --------- --------- ------------- -------
<S> <C> <C> <C> <C> <C>
Propper 09/10/99 6,000 1.875 Purchase BLC*
09/13/99 4,500 1.75 Purchase BLC
09/14/99 5,000 1.75 Purchase BLC
09/16/99 5,000 1.75 Purchase BLC
09/16/99 5,000 1.75 Purchase BOA**
09/17/99 16,500 1.8523 Purchase BLC
09/17/99 10,000 1.9906 Purchase BOA
09/21/99 3,500 2.1027 Purchase BLC
09/22/99 3,000 2.00 Purchase BLC
09/22/99 5,000 2.03125 Purchase BLC
09/22/99 3,000 2.125 Purchase BOA
09/23/99 5,000 2.00 Purchase BLC
09/27/99 2,000 1.875 Purchase BOA
09/27/99 3,000 1.9896 Purchase BLC
10/05/99 14,000 1.9464 Purchase BOA
10/06/99 5,000 2.0625 Purchase BLC
10/07/99 3,000 2.125 Purchase BOA
10/14/99 10,000 1.9031 Purchase BLC
10/14/99 5,000 2.00 Purchase BOA
10/20/99 5,000 2.25 Purchase BLC
11/11/99 10,000 2.4844 Purchase BLC
11/12/99 7,000 2.8571 Purchase BOA
11/19/99 16,000 2.6914 Purchase BLC
11/19/99 10,000 2.7125 Purchase BOA
11/22/99 5,000 2.3125 Purchase BOA
11/24/99 5,000 2.6094 Purchase BOA
Chermak 11/19/99 6,000 2.50 Purchase RJA***
11/19/99 1,000 2.5625 Purchase RJA
Chaudhry 09/23/99 3,700 2.00 Purchase ML****
09/24/99 4,000 1.9375 Purchase ML
09/27/99 5,000 1.9375 Purchase ML
10/08/99 4,000 2.00 Purchase ML
Covalent Partners 10/27/99 20,000 2.025 Purchase BLC
10/28/99 49,300 2.419 Purchase BLC
10/29/99 45,000 2.5313 Purchase BLC
11/01/99 41,000 2.6509 Purchase BLC
11/02/99 2,000 2.5625 Purchase BLC
11/03/99 16,000 2.4883 Purchase BLC
11/04/99 11,500 2.5924 Purchase BLC
11/05/99 15,200 2.5341 Purchase BLC
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
AMOUNT OF PRICE PER
DATE OF THE COMMON STOCK SHARE
INVESTOR TRANSACTION OF ISSUER ($) TYPE OF TRADE BROKER
-------- ----------- --------- --------- ------------- -------
<S> <C> <C> <C> <C> <C>
11/09/99 4,000 2.5625 Purchase BLC
</TABLE>
* Balis, Lewittes & Coleman Inc. ("BLC")
** Bank of America ("BOA")
*** Raymond James & Associates ("RJA")
**** Merrill Lynch ("ML")
<PAGE> 17
JOINT FILING AGREEMENT
In accordance with Rule 13d-(1)(k) under the Securities Exchange Act of
1934, as amended, each of the persons named below agrees to the joint filing of
a Statement on Schedule 13D (including amendments thereto) with respect to the
acquisition of Common Stock, par value $0.001, of Covalent Group, Inc., a
Delaware corporation, and further agrees that this Joint Filing Agreement be
included as an exhibit to such filings provided that, as contemplated by Section
13d-1(k)(ii), no person shall be responsible for the completeness or accuracy of
the information concerning the other persons making the filing, unless such
person knows or has reason to believe that such information is inaccurate. This
Joint Filing may be executed in any number of counterparts, all of which
together shall constitute one and the same instrument.
December 3, 1999
COVALENT PARTNERS, LLC,
a Delaware limited liability company
By: /s/ Dr. Richard D. Propper
----------------------------------------
Dr. Richard D. Propper
Managing Member
/s/ Richard D. Propper
-------------------------------------------
RICHARD D. PROPPER
/s/ Michael D. Chermak
-------------------------------------------
MICHAEL D. CHERMAK
/s/ Salman J. Chaudhry
-------------------------------------------
SALMAN J. CHAUDHRY
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF DOCUMENT
- ------- -----------------------
<S> <C>
*99.1 Promissory Note dated October 29, 1999 by and between Michael D.
Chermak and Covalent Partners, LLC.
*99.2 Promissory Note dated October 29, 1999 by and between Richard D.
Propper and Covalent Partners, LLC.
*99.3 Business Loan Agreement dated October 26, 1999 by and between
Richard D. Propper and California Bank & Trust.
*99.4 No-Shop Agreement dated September 1, 1999 by and between Bruce
LaMont and RP Associates, LLC.
*99.5 Option Agreement dated November 1, 1999 by and between Bruce
LaMont and Covalent Partners, LLC.
*99.6 Form of Employment Agreement to be entered into by and between
Kenneth M. Borow and the Issuer.
*99.7 Letter Agreement dated November 1, 1999 by and between Kenneth M.
Borow and Covalent Partners, LLC.
</TABLE>
- ------------
* Previously filed by the Reporting Persons with the Schedule 13D on November
10, 1999.
