SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report: October 31, 2005
(Date of earliest event reported)
HEALTH PARTNERSHIP INC.
(Exact name of registrant as specified in its charter)
Colorado 000-28711 84-136134
(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation) Identification No.)
3111 N. Seminary, Suite 1 N, Chicago, Illinois 60657
(Address of Principal Executive Offices)
(312) 952-7100
(Registrant's telephone number including area code)
875 N. Michigan Ave., Suite 3335, Chicago, IL 60611
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
On October 31, 2005, Health Partnership Inc. (the "Company," "we,"
"us," or "our") entered into a Note Purchase Agreement (the "Purchase
Agreement") with certain lenders party thereto. Pursuant to the terms of the
Purchase Agreement, on October 31, 2005, we issued promissory notes in the
aggregate principal amount of $500,000 (the "Notes"). The Notes bear interest at
a rate of 7% and are due and payable in full on October 31, 2006 (the "Maturity
Date"). See Item 2.03 of the Current Report for additional information regarding
the Notes and the Purchase Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement
On October 31, 2005, the Company entered into a Note Purchase
Agreement (the "Purchase Agreement") with certain lenders party thereto.
Pursuant to the terms of the Purchase Agreement, on October 31, 2005, we issued
promissory notes in the aggregate principal amount of $500,000 (the "Notes").
The Notes bear interest at a rate of 7% and are due and payable in full on
October 31, 2006 (the "Maturity Date").
The principal and unpaid accrued interest of each Note shall
automatically be converted into equity securities in like kind upon the closing
of our Next Equity Financing. "Next Equity Financing" shall mean the next sale
(or series of related sales) by the Company of its equity securities following
the date of the Purchase Agreement from which the Company receives gross
proceeds of not less than $3,000,000 including the aggregate amount of debt
securities converted there into. The number of equity securities to be issued
upon such conversion shall be equal to the quotient obtained by dividing the
outstanding principal and unpaid accrued interest on each Note to be converted,
on the date of conversion, by the Conversion Price. "Conversion Price" shall
mean a price per share equal to seventy five percent (75%) of the price paid per
share for equity securities by the investors in the Next Equity Financing.
The following events shall be considered events of default with
respect to each Note:
The Company shall default in the payment of any part of
the principal or unpaid accrued interest on any Note for more than
thirty (30) days after the Maturity Date or at a date fixed by
acceleration or otherwise;
The Company shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts
as they become due, or shall file a voluntary petition for
bankruptcy, or shall file any petition or answer seeking for itself
any reorganization, arrangement, composition, readjustment,
dissolution or similar relief under any present or future statute,
law or regulation, or shall file any answer admitting the material
allegations of a petition filed against the Company in any such
proceeding, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of the Company, or
of all or any substantial part of the properties of the Company, or
the Company or its respective directors or majority stockholders
shall take any action looking to the dissolution or liquidation of
the Company;
Within sixty (60) days after the commencement of any
proceeding against the Company seeking any bankruptcy reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any present or future statute, law or
regulation, such proceeding shall not have been dismissed, or within
sixty (60) days after the appointment without the consent or
acquiescence of the Company of any trustee, receiver or liquidator of
the Company or of all or any substantial part of the properties of
the Company, such appointment shall not have been vacated; or
The Company shall fail to observe or perform any other
obligation to be observed or performed by it under the Purchase
Agreement or the Notes within thirty (30) days after written notice
from the majority Note holders to perform or observe the obligation,
or any representation or warranty made by the Company thereunder
shall be false in any material respect as of the date made and such
representation or warranty is not cured, if susceptible to cure,
within thirty (30) days after the Company's knowledge of such
failure.
Until the later of the Maturity Date or repayment of any Note, the
Company will not take any action regarding the prepayment or conversion of any
Note, issuance of debt of more than $100,000, issuance of equity securities in
any amount, or acquisitions of other companies or assets of more than $1 million
in purchase price without the express written approval of Gerard Jacobs, or, in
the event of his death or incapacity, the trustee of the Roberti Jacobs Family
Trust u/a/d 11-11-99.
The proceeds of the Notes were used in part to pay all principal and
interest outstanding pursuant to that certain note outstanding to M2M
Acquisition, LLC, an Illinois limited liability company ("M2M") in the original
principal amount of $434,800.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 7, 2005
HEALTH PARTNERSHIP INC.
By: /s/ Douglas Stukel
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Its: President