Unassociated Document


    


     

    EXHIBIT
10.5

     

    HEALTHWAREHOUSE.COM,
INC.

    


    CONVERTIBLE
NOTE

    SUBSCRIPTION
AGREEMENT

    


    This
Agreement, dated as of April __, 2009, is made and entered into between
HealthWarehouse.com, Inc., a Delaware corporation (the “Company”), and
[___________________] (the “Investor”). This Agreement is entered into in
contemplation of the consummation of a share exchange transaction (the “Exchange
Transaction”) as a result of which (i) the Company will become a wholly-owned
subsidiary of a publicly-traded shell company (“Pubco”), and (ii) the
outstanding shares of capital stock of the Company will be exchanged for
outstanding shares of common stock of Pubco (the “Post-Exchange Common Stock”).
It is contemplated that as a result of the Exchange Transaction, the former
stockholders of the Company will own approximately 85% of Pubco’s Post-Exchange
Common Stock on a fully-diluted basis (and including the shares which may be
issued to the Investor pursuant to the “Securities” as hereafter defined). This
Agreement sets forth the terms under which the Investor will purchase from the
Company a Convertible Promissory Note in the principal amount of $[_________] in
the form attached hereto (the “Note” or the “Securities”) for a purchase price
of $[__________] (the “Purchase Price”) as set forth below.  Upon
closing of the Exchange Transaction (the “Exchange Date”), Pubco (as successor
to the Company) will assume the Company’s rights and obligations under this
Agreement.

    


    NOTICE
TO INVESTOR: THE SECURITIES PURCHASED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES
MAY BE NOT OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
A REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES
LAWS OR EXEMPTION THEREFROM. FURTHER RESTRICTIONS ON TRANSFERABILITY OF THE
SECURITES ARE CONTAINED IN THIS AGREEMENT.

    


    1.           Subscription.  Subject
to the terms of this Agreement, the Investor hereby subscribes for the
Securities, and will tender the Purchase Price in the form of a certified check
or bank check or wired funds payable to “HealthWarehouse.com, Inc.” as set forth
in Section 1.1 below:

    


    1.1           On
or before the date hereof, the Investor will pay the $[___________] Purchase
Price, which will be deposited into a segregated account at JP Morgan Chase
Bank, ABA# 044000037 Account #2918186699 (the “Segregated Account”), and will be
issued the Note. The Company agrees that such funds will be held by the Company
in the Segregated Account and will not be used by the Company for any purpose
until the Exchange Transaction is consummated. If the Exchange Transaction is
consummated, the funds in the Segregated Account will be automatically and
immediately released to the Company for use. If the Exchange Transaction is not
consummated by May 15, 2009, the Company will return such funds to Investor with
interest within five (5) business days after May 15, 2009, and this Agreement
shall be automatically terminated and cancelled.

    


    
      
         

      

      
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    1.2           The
Company agrees, not later than ninety (90) days after the Exchange Date, to file
a registration statement (the “Registration Statement”) covering the public
resale of all the shares of Post-Exchange Common Stock issuable pursuant to
conversion of the Note (the “Conversion Shares” or the “Registrable Shares”),
and to use its best efforts to cause the Registration Statement to be declared
effective by the U.S. Securities and Exchange Commission as soon as practicable
thereafter. The Company will use its best efforts to keep the Registration
Statement continuously effective under the Securities Act of 1933, as amended
(the “1933 Act”), until the one year anniversary of the date Pubco files a
“jumbo” current report on Form 8-K describing the Exchange Transaction (which is
to be filed within four (4) business days of the Exchange Date).  Upon
the effectiveness of the Registration Statement and conversion of the Note, the
Investor may request that the Company remove the restrictive legend from the
Registrable Shares; provided such Registrable Shares are registered and sold
pursuant to an effective registration statement.

    


    1.3           If
the Registration Statement is not filed within ninety (90) days after the
Exchange Date, as the Investor’s exclusive remedy, the Company shall pay to the
Investor an amount in cash, as liquidated damages and not as a penalty, equal to
1% of the Purchase Price paid by the Investor for the Securites. The parties to
this Agreement have agreed that the precise amount of damages in such
circumstances would be extremely difficult to calculate accurately and believe
that such amount is a reasonable estimate under the circumstances existing at
this time. Notwithstanding anything herein to the contrary, if the Regisration
Statement is not filed or filed later than (90) days after the Exchange Date as
a result of a material act or omission by the Investor, the Company shall not be
liable to pay liquidated damages to the Investor that otherwise would result on
account of such non-filing or delayed filing.

    


    2.           Representations and
Warranties of Investor. The Investor is making the following
representations, warranties and agreements with the intent that they be relied
upon in determining his suitability to purchase the Securities, and the Investor
agrees that such representations, warranties and agreements shall survive the
date of this Agreement and his purchase of the Securities. Investor hereby
represents and warrants to, and agrees with, the Company, and each of its
officers, directors, persons who control the Company and affiliates of the
foregoing, as follows:

    


    2.1           The
Investor has signed and properly and fully completed the Investor Qualification
Statement attached to this Agreement. All of the answers, statements and
information set forth in the Investor Qualification Statement are true and
correct.

    


    2.2           The
Investor is (i) if a natural person, at least twenty-one (21) years of age, and
(ii) a bona fide permanent resident of and is domiciled in the state shown in
the address line of the Investor’s signature page to this Agreement, and has no
present intention of becoming a resident of any other state or
jurisdiction.

    


    
      
         

      

      
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    2.3           The
Investor has read and fully considered the sections entitled “Risk Factors” and
“Notices to Investors” in the Company’s Confidential Private Placement
Memorandum dated March 26, 2009 (which, together with the exhibits to such
memorandum, and all supplements to such memorandum, is referred to as the
“Memorandum” in this Agreement).

    


    2.4           The
Investor has such knowledge and experience in financial and business matters
that the Investor is capable of evaluating the merits and risks of an investment
in the Securities and of making an informed investment decision, and is not
utilizing any other person to be the Investor’s representative in connection
with evaluating such merits and risks.

    


    2.5           The
Investor is acquiring the Securities for his own account, for investment
purposes only, and not with a view toward the resale, resyndication,
distribution, subdivision or fractionalization thereof, and has no present
intention of selling or transferring or otherwise distributing the same. The
Investor has no need for liquidity in this investment, has the ability to bear
the economic risk of this investment, at the present time and in the foreseeable
future, can afford a complete loss of this investment, and this investment
constitutes an appropriate investment for and is not in violation of any
investment restrictions (whether by statute, contract or otherwise) binding upon
the Investor.

    


    2.6           In
making an investment in the Securities, the Investor acknowledges that no oral
representations or warranties have been made to the Investor. The Investor has
received and carefully read a copy of the Memorandum. In making the decision to
invest in the Securities, the Investor has relied solely on the information in
the Memorandum. The Investor has been advised that no person is authorized to
give any information or make any statement not contained in the Memorandum, and
that any information or statement not contained therein must not be relied upon
as having been authorized by the Company, its officers, directors, affiliates or
persons who control the Company.

    


    2.7           The
Investor is aware that all documents, records and books pertaining to this
investment are available at the offices of the Company at 100 Commerce Blvd.,
Cincinnati, OH 45140, and acknowledges that all documents, records and books
pertaining to this investment requested by the Investor have been made available
to the Investor and the persons the Investor has retained, if any, to advise him
with respect to this investment, and the Investor and such persons have been
supplied with such additional information concerning this investment as has been
requested.

    


    2.8           The
Investor has been given the opportunity to discuss his investment in, and the
operation of, the Company with the Company’s management and has been given all
information that the Investor has requested and which the Investor deems
relevant to his decision to invest in the Company. The Investor has consulted
such legal, financial and tax advisers as have been necessary to evaluate the
merits and risks of this investment. The Investor acknowledges and is aware that
the Company has a limited financial and operating history.

    


    2.9           The
Investor agrees that the Securities (including any interest therein) will not be
sold or otherwise disposed of by the Investor unless either (i) the sale or
other disposition will be pursuant to a registration statement under 1933 Act,
and any applicable securities laws of any state or other jurisdiction; or (ii)
the Investor shall have notified the Company in writing of any desire on the
part of the Investor to sell or dispose of all or part of the such Securities
and of the manner and terms of the proposed transaction, and the Company shall
have been advised in writing by counsel acceptable to it that no registration of
such Securities under the 1933 Act, or the rules and regulations then in effect
thereunder, or any applicable state securities laws, is required in connection
with the proposed sale or other disposition. Except as provided in Section 1.3,
the Investor acknowledges that the Company is under no obligation whatsoever in
connection with any such registration or exemption. The Investor acknowledges
that all certificates evidencing ownership of the Securities, or any replacement
thereof, shall bear an appropriate legend to the effect that the securities
evidenced by such certificate or instruments are subject to these
terms.

    


    
      
         

      

      
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    2.10           All
information provided by the Investor to the Company is true and correct in all
respects as of the date hereof, and if there should be any material change in
such information either prior to the Company accepting the Investor’s
subscription or thereafter, the Investor will immediately furnish such revised
or corrected information to the Company.

    


    2.11           The
Investor understands that no federal or state agency has passed on or made any
recommendation or endorsement of the Securities and that the Company is relying
on the truth and accuracy of the representations warranties and agreements made
by him in offering the Securities for sale to him without having first
registered the same under the 1933 Act.

    


    2.12           The
Investor represents that he has not distributed the Memorandum to anyone other
than his personal advisers for their review on his behalf, and that no one other
than his personal advisers have used the Memorandum for any
purpose.

    


    2.13           The
Investor acknowledges that there have been no representations, guarantees or
warranties made to him by the Company, its officers, directors, controlling
persons, agents or employees or any other person, expressly or by implication,
with respect to the amount of or type of consideration, profit or loss
(including tax benefits) to be realized, if any, as a result of his
investment.

    


    3.           Indemnification. The
Investor agrees to indemnify and hold harmless the Company and its directors and
officers, their affiliates or anyone acting on behalf of the Company from and
against any and all damages, losses, costs and expenses (including reasonable
attorneys, fees) which they may incur by reason of the failure of Investor to
fulfill any of the terms or conditions of this Agreement, or by reason of any
breach of the representations and warranties made by the Investor herein, or in
any document provided by the Investor to the Company.

    


    4.           Transferability. The
Investor agrees that he shall not transfer or assign this Agreement or any
interest herein, and any such transfer or assignment purported to be made shall
be null and void and of no effect. Pursuant to the Exchange Transaction, the
Company will transfer and assign this Agreement and any interest herein to
Pubco.

    


    
      
         

      

      
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    5.           General
Provisions.

    


    5.1           This
Agreement constitutes the entire agreement between the parties and supersedes
and cancels any other agreement, or representation or communication other than
the Memorandum, whether oral or written, between the parties relating to the
transactions contemplated herein or the subject matter hereof.

    


    5.2           This
Agreement may be executed in more than one counterpart which shall, in the
aggregate, be deemed to be the original instrument and agreement between the
parties, and copies signed and transmitted electronically in a form readable by
the recipient or by facsimile are as binding as if the original was signed in
person.

    


    5.3           Any
and all notices or other communications required or permitted by this Agreement
or by law to be served on or given to any party hereto by any other party hereto
shall be, unless otherwise required by law, in writing and deemed duly served
and given when actually received either (i) in an electronic form readable by
the recipient, or (ii) when delivered by facsimile, or (iii) when delivered by
hand, by recognized express delivery services or via the United States mail,
certified or registered, return, receipt requested, postage prepaid, addressed
to the Company at its principal offices at 100 Commerce Blvd., Cincinnati, OH
45140, and to the Investor at its address as set forth on the signature page to
this Agreement or otherwise transmitted to the Company from time to
time.

    


    5.4           No
term hereof may be changed, waived, discharged or terminate orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.

    


    5.5           The
headings in this Agreement are for the purposes and convenience of reference
only and shall not be deemed to constitute a part hereof.

    


    5.6           This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of Delaware, without reference to its principles of conflict
of laws. Any action to enforce the terms of this Agreement shall be brought in a
court of competent jurisdiction located in Hamilton County, Ohio.

    


    5.7           The
benefits of this Agreement shall inure, and the obligations of this Agreement
shall be binding upon, the personal representatives, heirs, legatees, permitted
successors and assigns of the parties hereto.

    


    5.8           The
Investor agrees that the Investor may not cancel, terminate, or revoke this
Agreement or any agreement of the Investor made hereunder.

    


    5.9           Except
as otherwise provided in this Agreement, each party to this Agreement shall pay
any and all fees and expenses that such party may incur in connection with the
negotiation, execution and closing of the transactions contemplated by this
Agreement.

    


    (Signatures
start on next page)

     

    
      
         

      

      
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    HEALTHWAREHOUSE.COM,
INC.

    SUBSCRIPTION
AGREEMENT

    SIGNATURE
PAGE

    


    IN
WITNESS WHEREOF, the Investor has executed this Subscription Agreement on the
date indicated below.

     

    
      
        	 	 	 	 	 
	 	 	 	 	 
	
                      
                  NAME
      of Subscriber  (print/type)

                

              	 	 	
                      
                  NAME
      of Subscriber  (print/type)

                

              	 
	
                 

              	 	 	
                 

              	 
	 	 	 	 	 
	 	 	 	 	 
	      
                Authorized
      SIGNATURE of Subscriber

              	 	 	      
                Authorized
      SIGNATURE of Subscriber

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	      
                Address

              	 	 	      
                Address

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	      
                City    State    Zip

              	 	 	      
                City    State    Zip

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	      
                Home
      Telephone

              	 	 	      
                Home
      Telephone

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	      
                Business
      Telephone

              	 	 	      
                Business
      Telephone

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Social
      Security Number	 	 	Social
      Security Number	 
	 	 	 	 	 
	 	 	 	 	 
	      
                Date
      Signed: ________________________

              	 	 	      
                Date
      Signed: ________________________

              	 


      

    

     

     

    If the
Investor is a corporation, partnership, trust or other entity, or is otherwise
acting as a fiduciary, the name and capacity (title) of the individual executing
this Agreement on the Investor’s behalf should be printed or typed below the
signature.

     

    
      
         

      

      
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    PLEASE
SUPPLY THE FOLLOWING INFORMATION:

    


    Manner in
which title is to be held; (Check one)

    


    
      
        	      
                ___  Individual
      Ownership

              	 	 	      
                ___ 
      Partnership*

              	 
	 	 	 	 	 
	
                      
                  ___ 
      Individual Retirement Account

                

              	 	 	
                ___ 
      Trust *

              	 
	
                 

              	 	 	 	 
	      
                ___ 
      Qualified Retirement Plan

              	 	 	      
                ___ 
      Corporation*

              	 
	 	 	 	 	 
	___ 
      Other:	 	 	      
                ___ 
      Limited Liability Company*

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	      
                (Please
      indicate)

              	 	 	 	 


      

    

     

     

    
      	
              *

            	
              In
      the case of a partnership, state names of all partners and attach a copy
      of the partnership agreement. In the case of a corporation, attach a copy
      of the articles of incorporation together with the resolution of the board
      of directors authorizing this investment. In the case of a limited
      liability company, attach a copy of the articles of organization and
      operating agreement and a copy of any required member or manager
      resolutions authorizing this investment. In the case of a trust, attach a
      copy of the trust agreement.

            


    

     

    
      
         

      

      
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    ACCEPTANCE

    


    HealthWarehouse.com,
Inc. hereby accepts and agrees to be bound by the foregoing subscription subject
to the terms and conditions hereof as of the date indicated below.

     

    
      
        	 	 	 
	 	HEALTHWAREHOUSE.COM,
      INC.	 
	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	 	 
	 	Name:	 	 
	 	 	 	 
	 	Title:	 	 
	 	 	 	 
	 	Date
      Signed:	 	 


      

    

    


    
      
         

      

      
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