EXHIBIT 99.9
COVALENT PARTNERS, LLC
STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT (the "Agreement") is made and entered into as of
January __, 2000, by and among COVALENT PARTNERS, LLC, a Delaware limited
liability company (the "Covalent Partners"), and each of the persons and
entities listed on EXHIBIT A hereto (each referred to herein as a "Purchaser"
and collectively as the "Purchasers").
RECITALS
WHEREAS, Covalent Partners is the beneficial owner of Common Stock of Covalent
Group, Inc. (the "Company");
WHEREAS, Covalent Partners has executed a promissory note (the "Promissory
Note") in favor of each of the Purchasers, that provides that, if Covalent
Partners elects to exercise the option to purchase all of the shares of Common
Stock of Covalent Group, Inc. (the "Company") subject to exercise under the
Option Agreement by and between Covalent Partners and Bruce LaMont, dated
November 1, 1999 (the "Option Agreement"), then Covalent Partners shall deliver
in full payment of the Promissory Note the number of shares of Common Stock of
the Company (individually and collectively, the "Shares") set forth opposite
such Purchasers' name on EXHIBIT A attached hereto (the "Transaction");
WHEREAS, in connection with the consummation of the Transaction, the parties
desire to enter into this Agreement in order to grant registration, drag along
and co-sale rights to the Purchasers and to agree to a lock-up and voting of
their Shares;
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree hereto as follows:
1. DEFINITIONS.
(a) "Change of Control" shall mean (a) the acquisition of all or
substantially all of the assets of the Company or (b) an acquisition of
the Company by another corporation or entity by consolidation, merger
or other reorganization, in either case, in which the holders of the
Company's outstanding voting stock immediately prior to such
transaction own, immediately after such transaction, securities
representing less than fifty percent (50%) of the voting power of the
corporation or other entity acquiring such assets or surviving such
transaction.
(b) "Co-Sale Stock" shall mean shares of the Company's Common Stock now
beneficially owned or subsequently acquired by Covalent Partners or the
Purchasers by gift, purchase, dividend, option exercise or any other
means.
(c) "Common Stock" shall mean the Company's Common Stock and shares of
Common Stock issued or issuable upon exercise of any option, warrant or
other security or right of any kind convertible into or exchangeable
for Common Stock.
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(d) For the purpose of this Agreement, the term "Transfer" shall
include any sale, assignment, encumbrance, hypothecation, pledge,
conveyance in trust, gift, transfer by request, devise or descent, or
other transfer or disposition of any kind, including, but not limited
to, transfers to receivers, levying creditors, trustees or receivers in
bankruptcy proceedings or general assignees for the benefit of
creditors, whether voluntary or by operation of law, directly or
indirectly, of any of the Co-Sale Stock prior to May 15, 2000.
2. TRANSFERS BY COVALENT PARTNERS. If Covalent Partners proposes to Transfer any
shares of Co-Sale Stock then Covalent Partners shall promptly give written
notice (the "Notice") simultaneously to each of the Purchasers at least fifteen
(15) days prior to the closing of such Transfer. The Notice shall describe in
reasonable detail the proposed Transfer including, without limitation, the
number of shares of Co-Sale Stock to be transferred, the nature of such
Transfer, the consideration to be paid, and the name and address of each
prospective purchaser or transferee. In the event that the Transfer is being
made pursuant to the provisions of Section 4(a), the Notice shall state under
which section the Transfer is being made.
3. PURCHASERS' CO-SALE RIGHTS.
(a) Each Purchaser shall have the right, exercisable upon written
notice to Covalent Partners within seven (7) days after the Notice, to
participate in such Transfer of Co-Sale Stock on the same terms and
conditions. Such notice shall indicate the number of shares of Common
Stock such Purchaser wishes to sell under his or her right to
participate. To the extent one of more of Purchasers exercises such
right of participation in accordance with the terms and conditions set
forth below, the number of shares of Co-Sale Stock that Covalent
Partners may sell in the transaction shall be correspondingly reduced.
(b) Each Purchaser may sell all or any part of that number of shares
equal to the product obtained by multiplying (i) the aggregate number
of shares of Co-Sale Stock covered by the Notice by (ii) a fraction the
numerator of which is the number of shares of Co-Sale Stock owned by
such Purchaser at the time of the Transfer and the denominator of which
is the total number of shares of Co-Sale Stock owned by Covalent
Partners and the Purchasers at the time of the Transfer.
(c) Each Purchaser who elects to participate in the Transfer pursuant
to this Section 3 (a "Participant") shall effect its participation in
the Transfer by promptly delivering to Covalent Partners for transfer
to the prospective purchaser one or more certificates, properly
endorsed for transfer, which represent the type and number of shares of
Common Stock which such Participant elects to sell.
(d) The stock certificate or certificates that the Participant delivers
to Covalent Partners pursuant to Section 3(c) shall be transferred to
the prospective purchaser in consummation of the sale of the Common
Stock pursuant to the terms and conditions specified in the Notice, and
Covalent Partners shall concurrently therewith remit to such
Participant that portion of the sale proceeds to which such Participant
is entitled by reason of its participation in such sale. To the extent
that any prospective purchaser or purchasers prohibits such assignment
or otherwise refuses to purchase shares or other securities from a
Participant exercising its rights of co-sale hereunder, Covalent
Partners shall not sell to such prospective purchaser or purchasers
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any Co-Sale Stock unless and until, simultaneously with such sale,
Covalent Partners shall purchase such shares or other securities from
such Participant on the same terms and conditions specified in the
Notice.
(e) The exercise or non-exercise of the rights of the Purchasers
hereunder to participate in one or more Transfers of Co-Sale Stock made
by Covalent Partners shall not adversely affect their rights to
participate in subsequent Transfers of Co-Sale Stock subject to this
Section 3.
(f) If none of the Purchasers elect to participate in the sale of the
Co-Sale Stock subject to the Notice, Covalent Partners may, not later
than sixty (60) days following delivery of the Notice, enter into an
agreement providing for the closing of the Transfer of the Co-Sale
Stock covered by the Notice within thirty (30) days of such agreement
on terms and conditions not materially more favorable to the transferor
than those described in the Notice. Any proposed transfer on terms and
conditions materially more favorable than those described in the
Notice, as well as any subsequent proposed transfer of any of the
Co-Sale Stock by Covalent Partners, shall again be subject to the
co-sale rights of the Purchasers and shall require compliance by
Covalent Partners with the procedures described in this Section 3.
4. TRANSFERS BY A PURCHASER. If a Purchaser (other than a member of the Bedford
Oak Group) (the "Transferring Purchaser") proposes to Transfer any shares of
Co-Sale Stock then the Transferring Purchaser shall promptly give written notice
(the "Notice") simultaneously to Covalent Partners and the other Purchasers at
least fifteen (15) days prior to the closing of such Transfer. The Notice shall
describe in reasonable detail the proposed Transfer including, without
limitation, the number of shares of Co-Sale Stock to be transferred, the nature
of such Transfer, the consideration to be paid, and the name and address of each
prospective purchaser or transferee. In the event that the Transfer is being
made pursuant to the provisions of Section 6(a), the Notice shall state under
which section the Transfer is being made.
5. COVALENT PARTNERS' AND OTHER PURCHASERS' CO-SALE RIGHTS.
(a) Covalent Partners and the other Purchasers shall have the right,
exercisable upon written notice to the Transferring Purchaser within
seven (7) days after the Notice, to participate in such Transfer of
Co-Sale Stock on the same terms and conditions. Such notice shall
indicate the number of shares of Co-Sale Stock Covalent Partners and
such other Purchaser's wish to sell under their respective rights to
participate. To the extent Covalent Partners and the other Purchasers
exercise their rights of participation in accordance with the terms and
conditions set forth below, the number of shares of Co-Sale Stock that
such Transferring Purchaser may sell in the transaction shall be
correspondingly reduced.
(b) Each of Covalent Partners and the other Purchasers, respectively,
may sell all or any part of that number of shares equal to the product
obtained by multiplying (i) the aggregate number of shares of Co-Sale
Stock covered by the Notice by (ii) a fraction, the numerator of which
is the number of shares of Co-Sale Stock owned by such party at the
time of the Transfer and the denominator of which is the total number
of shares of Co-Sale Stock owned by Covalent Partners and the
Purchasers at the time of the Transfer.
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(c) If any of Covalent Partners and the other Purchasers elects to
participate in the Transfer pursuant to this Section 5 (a
"Participant"), such Participant or Participants shall effect their
participation in the Transfer by promptly delivering to such
Transferring Purchaser for transfer to the prospective purchaser one or
more certificates, properly endorsed for transfer, which represent the
type and number of shares of Co-Sale Stock which such Participant has
elected to sell.
(d) The stock certificate or certificates that the Participant or
Participants delivers to such Transferring Purchaser pursuant to
Section 5(c) shall be transferred to the prospective purchaser in
consummation of the sale of the Common Stock pursuant to the terms and
conditions specified in the Notice, and the Purchaser shall
concurrently therewith remit to such Participant or Participants that
portion of the sale proceeds to which each such Participant is entitled
by reason of its participation in such sale. To the extent that any
prospective purchaser or purchasers prohibits such assignment or
otherwise refuses to purchase shares or other securities from a
Participant exercising its rights of co-sale hereunder, such
Transferring Purchaser shall not sell to such prospective purchaser or
purchasers any Co-Sale Stock unless and until, simultaneously with such
sale, such Transferring Purchaser shall purchase such shares or other
securities from each Participant whose shares the prospective purchaser
refused on the same terms and conditions specified in the Notice.
(e) The exercise or non-exercise of the rights of Covalent Partners or
any Purchaser hereunder to participate in one or more Transfers of
Co-Sale Stock made by a Purchaser shall not adversely affect the rights
of Covalent Partners or such Purchaser that did not participate to
participate in subsequent Transfers of Co-Sale Stock subject to this
Section 2.
(f) If Covalent Partners does not elect to participate in the sale of
the Co-Sale Stock subject to the Notice, such Transferring Purchaser
may, not later than sixty (60) days following delivery to the Company
of the Notice, enter into an agreement providing for the closing of the
Transfer of the Co-Sale Stock covered by the Notice within thirty (30)
days of such agreement on terms and conditions not more materially
favorable to the transferor than those described in the Notice. Any
proposed transfer on terms and conditions materially more favorable
than those described in the Notice, as well as any subsequent proposed
transfer of any of the Co-Sale Stock by a Transferring Purchaser, shall
again be subject to the co-sale rights of the Purchasers and shall
require compliance by a Purchaser with the procedures described in this
Section 3.
6. EXEMPT TRANSFERS.
(a) Notwithstanding the foregoing, the co-sale rights of the Purchasers
and Covalent Partners shall not apply to (i) any transfer or transfers
which, in the aggregate, over the term of this Agreement, amount to not
more than twenty percent (20%) of the shares of Co-Sale Stock held by
such transferring stockholder as of the date hereof (as adjusted for
stock splits, dividends and the like), (ii) any transfer to a
stockholder partner or member of, or any entity that controls, is
controlled by or under common control with, Covalent Partners or a
Purchaser, (iii) any pledge of Co-Sale Stock made pursuant to a bona
fide loan transaction that creates a mere security interest, or (iv)
any bona fide gift; provided that in the event of any transfer made
pursuant to one of the exemptions provided by clauses (ii), (iii) and
(iv), (A) Covalent Partners or the Purchaser shall inform the party
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holding the co-sale rights of such pledge, transfer or gift prior to
effecting it and (B) the pledgee, transferee or donee shall furnish the
Purchasers or Covalent Partners, as applicable, with a written
agreement to be bound by and comply with all provisions of this
Agreement. Except with respect to Co-Sale Stock transferred under
clause (i) above (which Co-Sale Stock shall no longer be subject to the
co-sale rights), such transferred Co-Sale Stock shall remain "Co-Sale
Stock" hereunder, and such pledgee, transferee or donee shall be
treated as a "Purchaser" or "Covalent Partners", as applicable, for
purposes of this Agreement.
(b) Notwithstanding the foregoing, the provisions of Section 3 and
Section 5 shall not apply to the sale of any Co-Sale Stock to the
public pursuant to a registration statement filed with, and declared
effective by, the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act").
7. DRAG-ALONG RIGHTS
(a) At any time prior to May 15, 2000, Covalent Partners will have the
right (the "First Drag-Along Right") to require each Purchaser to sell
or exchange, pursuant to an agreement entered into between Covalent
Partners and any person or entity (the "Buyer"), up to forty percent
(40%) of such Purchaser's total number of shares of Co-Sale Stock (the
"Drag-Along Shares"), provided that the Purchaser receives a cash sum
at least equal to the aggregate purchase price that it paid to acquire
the total number of shares of Co-Sale Stock that it acquired (the
"Purchase Price"); and
(b) If Covalent Partners exercises the First Drag-Along Right, as
described in Section 7(a), then at any time prior to May 15, 2000,
Covalent Partners will have the right (the "Second Drag-Along Right")
to require each Purchaser to sell or exchange, pursuant to an agreement
entered into between Covalent Partners and the Buyer, up to the
remainder of the Co-Sale Stock that it acquired (the "Remainder
Shares"), provided that the agreement requires the Buyer to complete
the purchase of the Remainder Shares within three (3) years from the
date of the agreement at a purchase price of at least $6.00 per share
as a floor within two (2) years from the date hereof, increasing at the
rate $3.00 per share per year thereafter.
(c) The exercise of the First Drag-Along Right and the purchase and
sale of the shares resulting from the exercise of the First Drag-Along
Right shall take place at the principal offices of Covalent Partners on
the thirtieth (30th) business day following the date of delivery of the
notice of exercise of the First Drag-Along Right, or at such other
place, on such other date, or both, as Covalent Partners and the Buyer
shall agree upon in writing (the "Closing Date"). On or before the
Closing Date, the Purchaser shall deliver the certificate(s)
representing that number of its shares being sold to the Buyer in
proper form for transfer in exchange for payment of the purchase price
therefor, either by a wire transfer of immediately available funds to
the respective bank accounts designated by the Purchasers or by
certified or official bank check or checks, and shall take such other
actions in their capacity as stockholders of the Company (including
without limitation the voting of their shares in favor of any such
transaction) necessary to effect such transaction. By delivering such
certificate(s), the Purchaser shall be deemed to represent that the
Buyer will receive good title to the securities transferred by them,
free and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders' agreements and voting trusts.
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(d) The exercise of the Second Drag-Along Right and the option or
warrant to purchase the shares resulting from the exercise of the
Second Drag-Along Right shall take place at the principal offices of
Covalent Partners on the thirtieth (30th) business day following the
date of delivery of the notice of exercise of the Second Drag-Along
Right, or at such other place, on such other date, or both, as Covalent
Partners and the Buyer shall agree upon in writing (the "Option Date").
On or before the Option Date, the Purchaser shall deliver the Remainder
Shares to an escrow agent, as agreed upon in writing by Covalent
Partners and the Buyer, along with a form of stock assignment separate
from certificate executed in blank and joint escrow instructions duly
executed by the escrow agent, Purchaser and Buyer.
(e) The First Drag-Along Right and Second Drag-Along Right established
by Sections 7(a) and 7(b) shall terminate upon the earlier of (i) May
15, 2000, or (ii) a Change in Control.
8. PROHIBITED TRANSFERS.
(a) In the event that a Purchaser or Covalent Partners should Transfer
any Co-Sale Stock in contravention of the co-sale rights (the
"Violating Party") under this Agreement (a "Prohibited Transfer"), each
holder of the co-sale rights, in addition to such other remedies as may
be available at law, in equity or hereunder, shall have the put option
provided below, and the Violating Party shall be bound by the
applicable provisions of such option.
(b) In the event of a Prohibited Transfer, each holder of the co-sale
rights shall have the right to sell to the Violating Party the type and
number of shares of Common Stock equal to the number of shares the
holder of the co-sale rights would have been entitled to transfer to
the purchaser under Section 3(b) or Section 5(b), as applicable, hereof
had the Prohibited Transfer been effected pursuant to and in compliance
with the terms hereof. Such sale shall be made on the following terms
and conditions:
(i) The price per share at which the shares are to be sold to
the Violating Party shall be equal to the price per share paid
by the purchaser to the Violating Party in such Prohibited
Transfer. The Violating Party shall also reimburse each holder
of the co-sale rights for any and all fees and expenses,
including legal fees and expenses, incurred pursuant to the
exercise or the attempted exercise of such holder's rights
under Section 3 and Section 5.
(ii) Within ninety (90) days after the date on which the
holder of the co-sale rights received notice of the Prohibited
Transfer or otherwise became aware of the Prohibited Transfer,
such holder of the co-sale rights shall, if exercising the
option created hereby, deliver to the Violating Party the
certificate or certificates representing shares to be sold,
each certificate to be properly endorsed for transfer.
(iii) The Violating Party shall, upon receipt of the
certificate or certificates for the shares to be sold by the
holder of the co-sale rights, pursuant to this Section 6(b),
pay the aggregate purchase price therefor and the amount of
reimbursable fees and expenses, as specified in Section
8(b)(i), in cash or by other means acceptable to the
Purchaser.
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9. REGISTRATION RIGHTS.
(a) REGISTRATION OF THE SHARES. Promptly following its election of a
controlling number of directors to the Board of Covalent, but no later
than February 29, 2000 (the "Registration Date") Covalent Partners or
any of its current managing members will cause the Company to file a
registration statement under the Securities Act covering the
registration of the re-sale of the Shares held by the Purchasers. All
registration expenses incurred in connection with any registration
pursuant to this Section 9(a) hereof shall be borne by the Company. All
selling expenses relating to securities so registered shall be borne by
the Purchasers of such securities pro rata each on the basis of the
number of Common Stock so registered on their behalf.
10. AGREEMENT TO VOTE.
(a) AGREEMENT TO VOTE. On all matters submitted to a vote of the
holders of capital stock of the Company, the Purchasers agree to vote
all Shares held by them (i) in accordance with those voted by Covalent
Partners and/or any of its managing members on behalf of Covalent
Partners and (ii) to elect Harvey Eisen or his designee to the Board of
Directors of the Company at each annual or special meeting of the
stockholders and each written consent of stockholders after the date
hereof. If Covalent Partners ceases to operate as an entity during the
term of this Agreement, the Purchasers agree to vote all Purchaser
shares held by them in accordance with those voted by Dr. Richard D.
Propper.
(b) SUCCESSORS. The provisions of this Section 10 shall be binding upon
the successors in interest to any of the Shares. The Purchasers shall
not transfer any of the Shares unless and until the person to whom such
security is to be transferred shall have executed a written agreement,
substantially in the form of this Agreement, pursuant to which such
person becomes a party to this Agreement and agrees to be bound by all
the provisions hereof as if such person were a Purchaser, as
applicable.
(c) OTHER RIGHTS. Except as provided by this Agreement or any other
agreement entered into in connection with the Transaction, each
Purchaser shall exercise the full rights of a holder of capital stock
of the Company with respect to the Purchaser Shares, respectively.
(d) LEGEND.
(i) Concurrently with the execution of this Agreement, there
shall be imprinted or otherwise placed, on certificates
representing the Purchaser Shares the following restrictive
legend (the "Legend"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A VOTING AGREEMENT WHICH PLACES
CERTAIN RESTRICTIONS 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 FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE
WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS
PRINCIPAL PLACE OF BUSINESS."
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(ii) The Company agrees that, during the term of this
Agreement, it will not remove, and will not permit to be
removed (upon registration of transfer, reissuance of
otherwise), the Legend from any such certificate and will
place or cause to be placed the Legend on any new certificate
issued to represent Purchaser Shares theretofore represented
by a certificate carrying the Legend.
(e) TERM. The provisions of this Section 10 shall continue in full
force and effect from the date hereof through the earliest of the
following dates, on which date it shall terminate in its entirety:
(i) Immediately prior to a lawful sale of the Common Stock by
the Purchaser in the public market (NASDAQ);
(ii) the occurrence of a Change in Control; provided that this
Section 10(d)(ii) shall not apply to a merger effected
exclusively for the purpose of changing the domicile of the
Company;
(iii) the date as of which the parties hereto terminate this
Agreement by written consent of a majority in interest of the
Purchasers and Covalent Partners; or
(iv) ten (10) years from the date of this Agreement.
11. MISCELLANEOUS.
(a) SPECIFIC PERFORMANCE. The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party
hereto or to their heirs, personal representatives, or assigns by
reason of a failure to perform any of the obligations under this
Agreement and agree that the terms of this Agreement shall be
specifically enforceable. If any party hereto or his heirs, personal
representatives, or assigns institutes any action or proceeding to
specifically enforce the provisions hereof, any person against whom
such action or proceeding is brought hereby waives the claim or defense
therein that such party or such personal representative has an adequate
remedy at law, and such person shall not offer in any such action or
proceeding the claim or defense that such remedy at law exists.
(b) APPLICABLE LAW, JURISDICTION AND VENUE. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California without reference to conflict of laws principles. Any
disputes under this Agreement shall be subject to the exclusive
jurisdiction and venue of the California state courts and the Federal
courts located in San Diego County, California, and the parties hereby
consent to the personal and exclusive jurisdiction and venue of these
courts.
(c) AMENDMENT. Any provision of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only by the
written consent of (i) Covalent Partners and (ii) the Purchaser.
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(d) TERM. This Agreement shall continue in full force and effect from
the date hereof through the earliest of the following dates, on which
date it shall terminate in its entirety:
(i) the date of the closing of a registration statement filed
with the Securities and Exchange Commission, and declared
effective under the Securities Act of 1933, as amended,
pursuant to Section 9(a) hereof;
(ii) the occurrence of a Change in Control; or
(iii) the date as of which the parties hereto terminate this
Agreement by written consent of a majority in interest of the
Purchasers and Covalent Partners.
(e) LEGEND.
(i) Each certificate representing shares of Co-Sale Stock now
or hereafter owned by the Purchasers and Covalent Partners or
issued to any person in connection with a transfer pursuant to
Section 6(a) hereof shall be endorsed with the following
legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN CO-SALE AGREEMENT BY AND BETWEEN
COVALENT PARTNERS, LLC AND CERTAIN HOLDERS OF STOCK OF THE
COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN
REQUEST TO THE SECRETARY OF THE COMPANY."
(ii) The Purchasers and Covalent Partners agree that the
Company may instruct its transfer agent to impose transfer
restrictions on the shares represented by certificates bearing
the legend referred to in Section 11(e)(i) above to enforce
the provisions of this Agreement and the Company agrees to
promptly do so. The legend shall be removed upon termination
of this Agreement
(f) ASSIGNMENT OF RIGHTS. This Agreement constitutes the entire
agreement between the parties relative to the specific subject matter
hereof. Any previous agreement among the parties relative to the
specific subject matter hereof is superseded by this Agreement. This
Agreement and the rights and obligations of the parties hereunder shall
inure to the benefit of, and be binding upon, their respective
successors, assigns and legal representatives.
(g) NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified, (ii) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of
the recipient; if not, then on the next business day, (iii) five (5)
days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications
shall be sent to the party to be notified at the address as set forth
on the signature page hereof or at such other address as such party may
designate by ten (10) days advance written notice to the other parties
hereto.
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(h) SEVERABILITY. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
(i) ATTORNEYS' FEES. In the event that any suit or action is instituted
to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all
fees, costs and expenses of enforcing any right of such prevailing
party under or with respect to this Agreement, including without
limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs
and expenses of appeals.
(j) ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, along
with the Promissory Note, constitute the full and entire understanding
and agreement between the parties with regard to the subjects hereof
and thereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
(k) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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The foregoing STOCKHOLDER AGREEMENT is hereby executed as of the date first
above written.
COVALENT PARTNERS: PURCHASERS:
COVALENT PARTNERS, LLC
By: BY:
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Name: NAME:
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Title: TITLE:
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SIGNATURE PAGE TO STOCKHOLDER AGREEMENT
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EXHIBIT A
LIST OF PURCHASERS
2.
