Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
DOCUMENT SPA-09192016
This Securities Purchase Agreement (this "Agreement") is dated as of September 19, 2016, between ActiveCare, Inc., a Delaware corporation (the "Issuer") and JMJ Financial (the "Investor") (referred to collectively herein as the "Parties").
WHEREAS, the Issuer filed an S-1 registration statement with the SEC on July 19, 2016 with a file number of 333-212589 (the "Registration Statement") pursuant to which the Issuer intends to conduct a public offering of its securities to raise net proceeds to the Issuer of at least $10,000,000 (the "Public Offering");
WHEREAS, the Issuer's Board of Directors and a majority of the outstanding voting securities of the Issuer have voted in favor of a resolution permitting the Issuer's Board of Directors to conduct a reverse split of the Issuer's common stock in a ratio to be determined by the Issuer's Board of Directors (the "Reverse Split");
WHEREAS, the Issuer will be applying to NASDAQ to uplist its common stock for trading on The NASDAQ Capital Market.
WHEREAS, the Issuer has engaged Joseph Gunnar & Co., LLC as the investment bank to conduct the Public Offering;
WHEREAS, the Issuer anticipates closing the Public Offering prior to November 30, 2016; WHEREAS, the Issuer is seeking financing as a bridge until completion of the Public Offering; and
WHEREAS, the Issuer desires to sell and the Investor desires to purchase a Promissory Note, issued by the Issuer to the Investor, in the form of Exhibit A attached hereto (the "Note"), a Warrant to purchase 10,000,000 shares of the Issuer's common stock for a period of five (5) years from the date hereof, issued by the Issuer to the Investor, in the form of Exhibit B attached hereto (the "Warrant"), and $200,000 worth of shares of common stock of the Issuer (the "Origination Shares," and together with the Note and the Warrant, the "Securities") as set forth below.
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Issuer and the Investor agree as follows:
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2.1 Recitals. The Issuer represents and warrants to the Investor that the first six recitals set forth above are true as of the date of this Agreement.
2.2. Investor Participation. The Issuer and the Investor may mutually agree to restructure the Securities as part of the Public Offering.
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3.6 | Governing Law, Legal Proceedings, and Arbitration. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. THE PARTIES HEREBY WARRANT AND REPRESENT THAT THE SELECTION OF NEVADA LAW AS GOVERNING UNDER THIS AGREEMENT (I) HAS A REASONABLE NEXUS TO EACH OF THE PARTIES AND TO THE TRANSACTIONS CONTEMPLATED BY THE AGREEMENT; AND (II) DOES NOT OFFEND ANY PUBLIC POLICY OF NEVADA, FLORIDA, OR OF ANY OTHER STATE, FEDERAL, OR OTHER JURISDICTION. |
ANY ACTION BROUGHT BY EITHER PARTY AGAINST THE OTHER ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR ANY OTHER AGREEMENTS BETWEEN THE PARTIES, SHALL BE COMMENCED ONLY IN THE STATE OR FEDERAL COURTS OF GENERAL JURISDICTION LOCATED IN MIAMI-DADE COUNTY, IN THE STATE OF FLORIDA, EXCEPT THAT ALL SUCH DISPUTES BETWEEN THE PARTIES SHALL BE SUBJECT TO ALTERNATIVE DISPUTE RESOLUTION THROUGH BINDING ARBITRATION AT THE INVESTOR'S SOLE DISCRETION AND ELECTION (REGARDLESS OF WHICH PARTY INITIATES THE LEGAL PROCEEDINGS). The parties agree that, in connection with any such arbitration proceeding, each shall submit or file any claim which would constitute a compulsory counterclaim within the same proceeding as the claim to which it relates. Any such claim that is not submitted or filed in such proceeding shall be waived and such party will forever be barred from asserting such a claim. Both parties and the individuals signing this Note agree to submit to the jurisdiction of such courts or to such arbitration panel, as the case may be.
If the Investor elects alternative dispute resolution by arbitration, the arbitration proceedings shall be conducted in Miami-Dade County and administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and Mediation Procedures in effect on the date of this Agreement, except as modified by this Agreement. The Investor's demand for arbitration shall be made in writing, delivered to the other party, and filed with the American Arbitration Association. The American Arbitration Association must receive the demand for arbitration prior to the date when the institution of legal or equitable proceedings would be barred by the applicable statute of limitations, unless legal or equitable proceedings between the parties have already commenced, and the receipt by the American Arbitration Association of a written demand for arbitration also shall constitute the institution of legal or equitable proceedings for statute of limitations purposes. The parties shall be entitled to limited discovery at the discretion of the arbitrator(s) who may, but are not required to, allow depositions. The parties acknowledge that the arbitrators' subpoena power is not subject to geographic limitations. The arbitrator(s) shall have the right to award individual relief which he or she deems proper under the evidence presented and applicable law and consistent with the parties' rights to, and limitations on, damages and other relief as expressly set forth in this Agreement. The award and decision of the arbitrator(s) shall be conclusive and binding on all parties, and judgment upon the award may be entered in any court of competent jurisdiction. The Investor reserves the right, but shall have no obligation, to advance the Issuer's share of the costs, fees and expenses of any arbitration proceeding, including any arbitrator fees, in order for such arbitration proceeding to take place, and by doing so will not be deemed to have waived or relinquished its right to seek the recovery of those amounts from the arbitrator, who shall provide for such relief in the final award, in addition to the costs, fees, and expenses that are otherwise recoverable. The foregoing agreement to arbitrate shall be specifically enforceable under applicable law in any court having jurisdiction thereof.
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