FORM OF NOTE PURCHASE
AGREEMENT
THIS NOTE PURCHASE AGREEMENT
(“Agreement”) is made as of January __, 2006, by and
among Health Partnership Inc., a Colorado corporation, (the
“Company”), and the lenders (each individually a
“Lender,” and collectively the “Lenders”)
named on the Schedule of Lenders attached hereto (the
“Schedule of Lenders”). Capitalized terms not otherwise
defined in this Agreement shall have the meanings ascribed to them
in Section 1 below.
WHEREAS, each of the Lenders intends to provide
certain Consideration to the Company as described for each Lender
on the Schedule of Lenders;
WHEREAS, the parties wish to provide for the
sale and issuance of the Notes in return for the provision by the
Lenders of the Consideration to the Company on the terms and
subject to the conditions set forth in this Agreement;
and
WHEREAS, the Company has obtained the written
consent of Gerard Jacobs in connection with the sale and issuance
of the Notes pursuant to that certain Note Purchase Agreement,
dated October 31, 2005 by the Company and each lender named
therein, a copy of which consent is attached hereto as Exhibit
A.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS
FOLLOWS:
(a) “Common Stock” shall mean the common
stock, par value $.0001, of the Company.
(b) “Consideration” shall mean the
amount of money paid by each Lender pursuant to this Agreement as
shown on the Schedule of Lenders.
(c) “Equity Securities” shall mean the
Company’s Common Stock or Preferred Stock or any securities
conferring the right to purchase the Company’s Preferred
Stock or securities convertible into, or exchangeable for (with or
without additional consideration), the Company’s Common Stock
or Preferred Stock, except any security granted, issued and/or sold
by the Company to any director, officer, employee or consultant of
the Company in such capacity for the primary purpose of soliciting
or retaining their services.
(d) “Knowledge” shall mean the actual
knowledge of any officer of the Company.
(e) “Majority Note Holders” shall mean
the holders of a majority in interest of the aggregate principal
amount of Notes.
(f) “Maturity Date” shall mean the
earlier of October 31, 2006 or the initial closing on Company
issuance of equity.
(g) “Notes” shall mean the one or more
unsecured promissory notes issued to each Lender pursuant to
Section 2.1 below, the form of which is attached hereto as Exhibit
B.
(h) “Preferred Stock” shall mean the
preferred stock, par value $0.10, of the Company.
(i) “Securities” shall have the meaning
set forth in Section 5.2 below.
2.1
Issuance of Notes
. In return for the Consideration
paid by each Lender, the Company shall sell and issue to such
Lender one or more unsecured Notes in the aggregate amount up to
$1,000,000 (or such increased amount as determined by the
Company’s board of directors). Each Note shall have a
principal balance equal to that portion of the Consideration paid
by such Lender for the Note, as set forth in the Schedule of
Lenders. Notwithstanding anything to the contrary herein, there
shall be no minimum aggregate principal amount of the Notes which
must be sold by the Company to any one or more Lenders before the
Company can consummate the First Closing (as defined herein) or
utilize the proceeds of the respective Consideration received by
the Company at the First Closing or any Subsequent Closing (as
defined herein).
3.
Closing . The initial closing (the “First
Closing”) of the purchase of the Notes in the amounts set
forth opposite each Lender’s name on the Schedule of Lenders
shall take place at the offices of the Company at 12:00 p.m., on
____________, 2006, or at such other time and place as the Company
and Lenders purchasing the aggregate principal amount of the Notes
to be sold at the First Closing agree upon orally or in writing.
Any subsequent closing of the purchase of the Notes (a
“Subsequent Closing”) in the amounts set forth opposite
each Lender’s name on the Schedule of Lenders shall take
place at such locations and at such times as shall be mutually
agreed upon orally or in writing by the Company and Lenders
purchasing the aggregate principal amount of the Notes to be sold
at such Subsequent Closing. At each Closing, each Lender shall
deliver the Consideration to the Company and the Company shall
deliver to each Lender one or more executed Notes in return for the
respective Consideration provided to the Company.
4.
Representations and Warranties of
the Company . In
connection with the transactions provided for herein, the Company
hereby represents and warrants to the Lenders that:
4.1
Organization, Good Standing and
Qualification . The
Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Colorado and has all
requisite corporate power and authority to carry on its business as
now conducted. The Company is duly qualified to transact business
and is in good standing in each jurisdiction in which the failure
to so qualify would have a material adverse effect on its business
or properties.
4.2
Authorization
. All corporate action has been
taken on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution, delivery
and performance, of this Agreement and the Notes. Except as may be
limited by applicable bankruptcy, insolvency, reorganization, or
similar laws relating to or affecting the enforcement of
creditors’ rights, the Company has taken all corporate action
required to make all of the obligations of the Company reflected in
the provisions of this Agreement and the Notes the valid and
enforceable obligations they purport to be.
4.3
Compliance with Other
Instruments . Neither the
authorization, execution and delivery of this Agreement or the
Notes, nor the issuance and delivery of the Notes, will constitute
or result in a default or violation of any law or regulation
applicable to the Company or any term or provision of the
Company’s current Articles or Bylaws or any material
agreement or instrument by which it is bound or to which its
properties or assets are subject.
4.4
Valid Issuance
. The Notes when issued, will be
duly and validly issued, fully paid and nonassessable and, based in
part upon the representations and warranties of the Lenders in this
Agreement, and will be issued in compliance with all applicable
federal and state securities laws.
4.5
No Violation
. The Company is not in violation of
any order of any court, arbitrator or governmental body, material
laws, ordinances or governmental rules or regulations (domestic or
foreign) to which it is subject, or with respect to any material
loan agreement, debt instrument or contract with a supplier or
customer of the Company or other agreement to which it is a party
and has not failed to obtain or apply for any licenses, permits,
franchises or other governmental authorizations necessary to the
ownership of its property or to the conduct of its
business.
4.6
No Litigation
. There are no suits or proceedings
pending or, to the Knowledge of the Company, threatened in any
court or before any regulatory commission, board or other
governmental administrative agency against or affecting the Company
which if determined adversely to the Company could result in a
material adverse effect on the Company’s business as
presently conducted or its ability to perform its obligations
hereunder or under the Notes.
4.7
Arms’ Length
Transactions . The
transactions evidenced by this Agreement and the Notes and the
other documents and instruments delivered in connection herewith or
therewith (a) are the result of arms’ length negotiations
among the parties hereto, (b) are made on commercially reasonable
terms, and (c) are undertaken by the Company without any intent to
hinder, delay or defraud any entity to which the Company is or may
become indebted.
5.
Representations and Warranties of
the Lenders . In
connection with the transactions provided for herein, each Lender
hereby represents and warrants to the Company that:
5.1
Authorization
. This Agreement constitutes such
Lender’s valid and legally binding obligation, enforceable in
accordance with its terms, except as may be limited by (a)
applicable bankruptcy, insolvency, reorganization, or similar laws
relating to or affecting the enforcement of creditors’
rights, and (c) laws relating to the availability of specific
performance, injunctive relief or other equitable remedies. Each
Lender represents that the execution, delivery and performance of
this Agreement has been duly authorized and approved by such
Lender.
5.2
Purchase Entirely for Own
Account . Each Lender
acknowledges that this Agreement is made with Lender in reliance
upon such Lender’s representation to the Company that the
Notes (collectively, the “Securities”) will be acquired
for investment for Lender’s own account, as principal and not
as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that such Lender has no
present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, each
Lender further represents that such Lender does not have any
contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any
third person, with respect to the Securities.
5.3
Disclosure of
Information . Each Lender
acknowledges that it has received all the information, documents
and materials it considers necessary or appropriate for deciding
whether to acquire the Securities. Each Lender confirms that it has
made such further investigation of the Company as was deemed
appropriate to evaluate the merits and risks of this investment.
Each Lender further represents that it has had an opportunity to
ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Securities.
5.4
Investment Experience
. Each Lender is an investor in
securities of companies in the development stage and acknowledges
that it is able to fend for itself, can bear the economic risk of
its investment and has such knowledge and experience in financial
or business matters that it is capable of evaluating the merits and
risks of the investment in the Securities. If other than an
individual, each Lender also represents it has not been organized
solely for the purpose of acquiring the Securities.
5.5
Accredited Investor
. Each Lender is an
“accredited investor” within the meaning of Rule 501 of
Regulation D of the Securities Act of 1933, as presently in effect
(the “Securities Act”).
5.6
Restricted Securities
. Each Lender understands that the
Securities are characterized as “restricted securities”
under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations such
securities may not be resold except through a valid registration
statement or pursuant to a valid exemption from the registration
requirements under the Securities Act and applicable state
securities laws. Each Lender represents that it is familiar with
Rule 144 of the Securities Act, and understands the resale
limitations imposed thereby and by the Securities Act and
applicable state securities laws.
5.7
Further Limitations on
Disposition . Without in
any way limiting the representations and warranties set forth
above, each Lender further agrees not to make any disposition of
all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to
be bound by this Section 5 and:
(a) There is then in effect a registration statement
under the Securities Act covering such proposed disposition and
such disposition is made in accordance with such registration
statement;
(b) (i)Lender has notified the Company of the
proposed disposition and has furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition
and (ii) if reasonably requested by the Company, Lender shall have
furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require
registration of such shares under the Securities Act; or
(c) All transferees agree in writing to be subject
to the terms hereof, and any other agreements to which such
Securities may be subject, to the same extent as if they were
Lenders hereunder.
