FORM OF BRIDGE DEBENTURE AGREEMENT

 

This Bridge Debenture Agreement (this “Agreement”), dated as of June 24, 2019,
is made by and among Rennova Health, Inc. (the “Company”) and each of the
purchasers signatory hereto (the “Purchasers”). Reference is made to that
certain Securities Purchase Agreement, dated as of August 31, 2017 (the
“Purchase Agreement”), as amended, by and among the Company and each purchaser
identified on the signature pages thereto. Capitalized terms used and not
otherwise defined herein that are defined in the Purchase Agreement shall have
the meanings given such terms in the Purchase Agreement.

 

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

 

1. Issuance of Bridge Debenture. The Company hereby agrees to issue, jointly and
severally with Christopher Diamantis, to the Purchasers, and the Purchasers
hereby agree to purchase debentures of the Company, the aggregate principal
amount of $1,020,000 of debentures, which debenture shall be in the form of the
debenture attached hereto as Exhibit A (the “Bridge Debentures”). The total
aggregate purchase price to the Purchasers for the purchase of the Bridge
Debentures is $1,020,000. The Company shall promptly deliver to each Purchaser
the applicable Bridge Debentures.

 

2. Security Interest and Mortgage. Company hereby acknowledges and agrees that
(a) the security interests granted to the holders of the outstanding convertible
debentures (“Existing Debentures”) pursuant to the Security Agreement, dated May
20, 2017 applies to and covers the obligations of the Company to the Purchasers
evidenced by the Bridge Debentures, (b) upon the filing of an amendment to the
Existing Mortgage (as defined in the Purchase Agreement), the liens granted to
the Purchasers pursuant to the Existing Mortgage applies to and covers the
obligations of the Company to the Purchasers evidenced by the Bridge Debentures
and (c) the Bridge Debentures rank pari passu to the Existing Debentures.

 

3. Subsidiary Guarantee. The Bridge Debenture constitutes an “Obligation” under
the Subsidiary Guarantee (as defined in the Purchase Agreement) as if the Bridge
Debentures were Existing Debentures issued pursuant to the Purchase Agreement.

 

4. Subordination Agreement. The Company shall have received confirmations and
acknowledgments from the signatories thereto that the Bridge Debentures are
subject to the subordination agreements required pursuant to the Purchase
Agreement.

 

5. Exchange Right. Reference is made to that certain Exchange Agreement, dated
October 30, 2017, by and between the Company and the Purchaser (“Exchange
Agreement”) and the Series I-2 Convertible Preferred Stock (“Preferred Stock”)
issuable upon exchange of the Existing Securities (as defined thereunder). Each
Purchaser shall have the right, in its sole discretion, to exchange, from time
to time and all or in part, any principal amount of the Bridge Debentures
pursuant to the Exchange Agreement as if such Bridge Debentures were Existing
Debentures. The issuance of Exchange Securities in exchange for Bridge
Debentures shall be on the same terms and conditions as the exchange for
Existing Securities. The Exchange Agreement is hereby amended to include in the
definition of Existing Securities the Bridge Debentures in all respects.

 

   

 

 

6. [RESERVED]

 

7. Representations and Warranties of the Company. The Company hereby makes to
the Purchasers the following representations and warranties:

 

(a) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, its board of directors or its
stockholders in connection therewith. This Agreement has been duly executed by
the Company and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

(b) No Conflicts. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
hereby do not and will not: (i) conflict with or violate any provision of the
Company’s certificate or articles of incorporation, bylaws or other
organizational or charter documents; or (ii) subject to the Required Approvals,
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
(except as contemplated by the Security Documents) upon any of the properties or
assets of the Company in connection with, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any material agreement, credit facility, debt or
other material instrument (evidencing Company debt or otherwise) or other
material understanding to which such Company is a party or by which any property
or asset of the Company is bound or affected; or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company is bound or affected, except, in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material
Adverse Effect.

 

(c) Issuance of the Bridge Debenture. The Bridge Debentures are duly authorized
and, upon the execution and delivery by the Company and the execution of this
Agreement by a Purchaser, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents.

 

 2 

 

 

(d) Affirmation of Prior Representations and Warranties. Except as set forth on
Schedule 3(e) hereto, the Company hereby represents and warrants to each
Purchaser that the Company’s representations and warranties listed in Section
3.1 of the Purchase Agreement are true and correct as of the date hereof.

 

8. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants as of the date hereof to the Company as follows:

 

(a) Authority. The execution, delivery and performance by such Purchaser of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate or similar action on the part of such Purchaser. This
Agreement has been duly executed by such Purchaser and, when delivered by such
Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

(b) Purchaser Status. Such Purchaser is an “accredited investor” as defined in
Rule 501 under the Securities Act.

 

(c) General Solicitation. Such Purchaser is not purchasing the Bridge Debenture
as a result of any advertisement, article, notice or other communication
regarding the Bridge Debenture published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or any
other general solicitation or general advertisement.

 

9. Form 8-K. The Company shall by 9:00 a.m. ET on June 25, 2019 file a Current
Report on Form 8-K, including the Transaction Documents as exhibits thereto,
with the Commission. From and after the filing of such Form 8-K, the Company
represents to the Purchasers that it shall have publicly disclosed all material,
non-public information delivered to any of the Purchasers by the Company or any
of its Subsidiaries, or any of their respective officers, directors, employees
or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon the filing of such Form 8-K, the Company
acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its
Subsidiaries or any of their respective officers, directors, agents, employees
or Affiliates on the one hand, and any of the Purchasers or any of their
Affiliates on the other hand, shall terminate.

 

 3 

 

 

10. Effect on Transaction Documents. Except as expressly set forth above, all of
the terms and conditions of the Transaction Documents shall continue in full
force and effect after the execution of this Agreement and shall not be in any
way changed, modified or superseded by the terms set forth herein, including,
but not limited to, any other obligations the Company may have to the Purchaser
under the Transaction Documents. Notwithstanding the foregoing, this Agreement
shall be deemed for all purposes as an amendment to any Transaction Document as
required to serve the purposes hereof, and in the event of any conflict between
the terms and provisions of the Debentures or any other Transaction Document, on
the one hand, and the terms and provisions of this Agreement, on the other hand,
the terms and provisions of this Agreement shall prevail.

 

11. Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and each
Purchaser.

 

12. Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be delivered as set forth in the
Purchase Agreement.

 

13. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Purchaser. The Company may not assign (except
by merger) its rights or obligations hereunder without the prior written consent
of the Purchaser of the then-outstanding Securities. The Purchaser may assign
their rights hereunder in the manner and to the Persons as permitted under the
Purchase Agreement.

 

14. Execution and Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

15. Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Purchase Agreement.

 

16. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

17. Headings. The headings in this Agreement are for convenience only, do not
constitute a part of the Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

 

18. Personal Guarantee. Christopher Diamantis hereby, jointly and severally,
unconditionally and irrevocably, guarantees to each Purchaser the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) in indefeasible payment in full of the March
Debentures and the June Debentures.

 

19. Fees and Expenses. At the closing, the Company has agreed to reimburse the
Purchasers $20,000 for their fees and expenses.

 

[SIGNATURE PAGE FOLLOWS]

 

 4 

 

 

Executed as of the first date written above by the undersigned duly authorized
representatives of the Company and the Purchaser:

 

RENNOVA HEALTH, INC.

 

By:     Name:      Title:    

 

Name of Purchaser:

 

Signature of Authorized Signatory: Sabby Healthcare Master Fund, Ltd.

 

Name of Authorized Signatory: Robert Grundstein

 

Title of Authorized Signatory: COO of Investment Manager

 

Purchase Price: $510,000.00

 

Name of Purchaser:

 

Signature of Authorized Signatory: Sabby Volatility Warrant Master Fund, Ltd.

 

Name of Authorized Signatory: Robert Grundstein

 

Title of Authorized Signatory: COO of Investment Manager

 

Purchase Price: $510,000.00

 

 5 

 

 

[RNVA BRIDGE DEBENTURE AGREEMENT – SECTION 18]

 

Solely with respect to the personal guarantee obligations under Section 18:

 

    Christopher Diamantis  

 

 6