Exhibit 10.1

 

FORM OF
EXCHANGE, REDEMPTION AND FORBEARANCE AGREEMENT

 

EXCHANGE, REDEMPTION AND FORBEARANCE AGREEMENT (the “Agreement”) is made as of
the ___ day of August 2020, by and between Rennova Health, Inc., a Delaware
corporation (the “Company”) and the investor signatory hereto (the “Investor”).

 

WHEREAS, the Investor holds certain debt and equity securities of the Company as
set forth on Annex I attached hereto (“Existing Securities”);

 

WHEREAS, the Company and Christopher Diamantis are currently in breach and
default of their respective obligations in respect of the Existing Securities
(“Existing Defaults”) and continue to accrue liquidated damages, late fees and
other amounts as a result of such Existing Defaults (“Late Fees”);

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and in reliance on Section 3(a)(9) of the Securities Act, the
Company desires to exchange with the Investor, and the Investor desires to
exchange with the Company, certain of the Existing Securities for the Company’s
Series N Convertible Redeemable Preferred Stock (“Preferred Stock”), which shall
have the rights and preferences sent forth in the Certificate of Designation for
the Preferred Stock in the form of Exhibit A attached hereto;

 

WHEREAS, the Company wishes to redeem, and the Investor wishes to consent to the
redemption of, $[___] million of certain of the Existing Securities within 90
days of the date hereof and subject to receipt of such payment the Investor is
willing to forbear on collecting any Late Fees after the date hereof; and

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in consideration of the premises and the
mutual agreements, representations and warranties, provisions and covenants
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:

 

1. Exchange. On the Closing Date (as defined below), subject to the terms and
conditions of this Agreement, the Investor shall, and the Company shall,
pursuant to Section 3(a)(9) of the Securities Act, exchange (the “Exchange”) the
Existing Securities set forth in Group A on Annex A attached hereto for _______
shares of Preferred Stock. Subject to the conditions set forth below, the
Exchange shall take place at the offices of Ellenoff Grossman & Schole LLP, on
the second Trading Day (as defined below) after the date hereof, or at such
other time and place as the Company and the Investor mutually agree (the
“Closing” and the “Closing Date”). On the Closing Date, the Company shall
deliver the shares of Preferred Stock to the Investor or its designee in
accordance with the Investor’s delivery instructions set forth on the Investor
signature page hereto. Upon receipt of the shares of Preferred Stock in
accordance with this Section 1, all of the Investor’s rights under the Existing
Securities set forth in Group A on Annex A shall be extinguished. The Investor
shall tender to the Company such Existing Securities within three Trading Days
(as defined below) of the Closing Date. As used herein, “Trading Day” means any
day on which the Common Stock is traded or quoted on the principal trading
market for the Common Stock. The Company and the Investor shall execute and/or
deliver such other documents and agreements as are customary and reasonably
necessary to effectuate the Exchange.

 

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2. Redemption. In consideration for the Exchange, as soon as possible following
the date hereof and in any event within 90 days of the date hereof (“Redemption
Deadline”), the Company shall redeem (“Redemption”) $10,000,000 (less any
redemption amounts paid to any affiliate of the Holder pursuant to identical
terms hereunder) (“Redemption Amount”) of the Existing Securities set forth in
Group B of Annex A. The Redemption may occur in one or more Redemptions prior to
the Redemption Deadline. The Company shall provide the Investor with prior
written notice of a Redemption and within 2 Trading Days of such notice shall
pay the amount indicated in such notice in United States dollars and in
immediately available funds to the account specified on the Investor’s signature
page hereto. The order of redemption of the Existing Securities set forth in
Group B shall be set forth in Annex A and shall not be reordered without the
prior written consent of the Investor. Upon receipt of the Redemption payment,
all of the Investor’s rights under the Existing Securities subject to such
Redemption, as set forth in Group B on Annex A, shall be extinguished. In the
event that the Redemption occurred in full on or before the earlier of (i)
Redemption Deadline and the Termination Date (as defined below), any Late Fees
that accrued and were otherwise payable from the date hereof until the
Redemption Deadline shall be waived by the Investor. Additionally, until the
earlier of the Redemption Deadline and the Termination Date, the Investor agrees
not to sell, dispose of, transfer, convert or exercise any of the Existing
Securities set forth in Group B on Annex A without the prior written consent of
the Company.

 

3. Forbearance. The Company hereby requests, and the Investor hereby agrees
that, prior to the Redemption Deadline, the Investor shall forbear from
enforcing the remedies available to the Investor under the Existing Securities
and in respect of the Existing Defaults, including but not limited to demand for
Late Fees (“Forbearance”). The Forbearance shall terminate and be of no further
force or effect on the earliest to occur of the following (the earliest such
date being referred to herein as the “Termination Date”): (i) the date, if any,
on which a petition for relief under the United States Bankruptcy Code or any
similar state law is filed by or against the Company or Mr. Chris Diamantis,
(ii) the date that the Company or Mr. Diamantis defaults (following the
provision of written notice and the expiration of any applicable period of cure)
on any obligations under the Existing Securities other than the Existing
Defaults, (iii) The Redemption Deadline if the Redemption has not occurred in
full by such date and (iv) the Company is no longer current with its periodic
reports filed with the Commission. Following the Termination Date, the
Investor’s agreement hereunder to forbear shall automatically and without
further notice or action terminate and be of no force and effect, it being
understood and agreed that the effect of the occurrence of the Termination Date
will be to permit the Investor to exercise such rights and remedies hereunder,
under the Existing Securities, or applicable law, immediately without any
further notice, passage of time or forbearance of any kind, including but not
limited to the collection of any Late Fees that accrued prior to the Termination
Date. The Company and Mr. Diamantis agree, severally and jointly (to the extent
Mr. Diamantis is liable on such Obligations), that all of the Obligations (as
defined in the Security Agreement pursuant to which the Existing Securities were
issued shall, if not sooner paid, be absolutely and unconditionally due and
payable in full in cash or other immediately available funds by the Company and
Mr. Diamantis, severally and jointly (to the extent Mr. Diamantis is liable on
such Obligations), on the Termination Date. Except as expressly modified by this
Agreement, the Company and Mr. Diamantis hereby acknowledge, confirm and ratify
all of the terms and conditions set forth in, and all of its obligations under,
the Existing Securities, which agreements are valid, binding and in full force
and effect. The Company and Mr. Diamantis each represent and agree that neither
the Company nor Mr. Diamantis has any offset, defense, counterclaim, dispute or
disagreement of any kind or nature whatsoever with respect to the liability or
amount of the Obligations.

 

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4. Contingent Exchange. In the event that the Redemption of the full Redemption
Amount of the Existing Securities set forth in Group B set forth on Annex I
attached hereto occurs on or before the Redemption Deadline, subject to the
terms and conditions of this Agreement, the Investor shall, and the Company
shall, pursuant to Section 3(a)(9) of the Securities Act, exchange (the
“Contingent Exchange”) the Existing Securities set forth in Group B on Annex A
attached hereto that are not redeemed pursuant to Section 2 for a number of
shares of Preferred Stock equal to the principal amount outstanding of such
Existing Securities divided by $1,000. Subject to the conditions set forth
below, the Exchange shall take place at the offices of Ellenoff Grossman &
Schole LLP, on the second Trading Day after the date that the Redemption of the
full Redemption Amount of the Existing Securities set forth in Group B is
completed, or at such other time and place as the Company and the Investor
mutually agree (the “Contingent Closing” and the “Contingent Closing Date”). On
the Contingent Closing Date, the Company shall deliver the shares of Preferred
Stock to the Investor or its designee in accordance with the Investor’s delivery
instructions set forth on the Investor signature page hereto. Upon receipt of
the shares of Preferred Stock in accordance with this Section 4, all of the
Investor’s rights under the Existing Securities set forth in Group B and
exchanged hereunder shall be extinguished. The Investor shall tender to the
Company such Existing Securities within three Trading Days of the Contingent
Closing Date.

 

5. Representations and Warranties of the Company. The Company hereby represents
and warrants to Investor that:

 

5.1 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 Delaware. 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.

 

5.2 Authorization. Other than the Shareholder Approval, all corporate action on
the part of the Company, its officers, directors and stockholders necessary for
the authorization, execution and delivery of this Agreement and the performance
of all obligations of the Company hereunder, and the authorization (or
reservation for issuance of), the Exchange, and the issuance of the shares of
Preferred Stock and the shares of Common Stock issuable upon conversion or
exercise of the shares of Preferred Stock have been taken on or prior to the
date hereof.

 

5.3 Valid Issuance of the Securities. The Preferred Stock and shares of Common
Stock issuable upon conversion thereof, as applicable (collectively, the
“Securities”), when issued and delivered in accordance with the terms of this
Agreement, for the consideration expressed herein, will be duly and validly
issued, fully paid and non-assessable.

 

5.4 Offering. Subject to the truth and accuracy of the Investor’s
representations set forth in Section 6 of this Agreement, the offer and issuance
of the Securities as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act. Neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemptions.

 

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6. Representations and Warranties of the Investor. The Investor hereby
represents, warrants and covenants that:

 

6.1 Authorization. The Investor has full power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby and has taken all action necessary to authorize
the execution and delivery of this Agreement, the performance of its obligations
hereunder and the consummation of the transactions contemplated hereby.

 

6.2 Accredited Investor Status; Investment Experience. The Investor is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D.
The Investor can bear the economic risk of its investment in the Securities, and
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in the Securities.

 

6.3 Reliance on Exemptions. The Investor understands that the Securities are
being offered and issued to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Investor’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Investor to acquire the Securities.

 

7. Additional Covenants.

 

7.1 Disclosure. The Company shall, on or before 9:30 a.m., New York City time,
on the first business day after the date of this Agreement, issue a Current
Report on Form 8-K (collectively, the “8-K Filing”) disclosing all material
terms of the transactions contemplated hereby. From and after the issuance of
the 8-K Filing, the Investor shall not be in possession of any material,
nonpublic information received from the Company or any of its respective
officers, directors, employees or agents, that is not disclosed in the 8-K
Filing. The Company shall not, and shall cause its officers, directors,
employees and agents, not to, provide the Investor with any material, nonpublic
information regarding the Company from and after the filing of the 8-K Filing
without the express written consent of the Investor. The Company shall not
disclose the name of the Investor in any filing, announcement, release or
otherwise, unless such disclosure is required by law or regulation. In addition,
effective upon the filing of the 8-K Filing, 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, affiliates, employees or agents, on the
one hand, and the Investor or any of its affiliates, on the other hand, shall
terminate.

 

7.2 Listing. The Company shall use its best efforts to maintain the listing or
designation for quotation (as applicable) of all of the shares of Common Stock
underlying the Preferred Stock upon each national securities exchange and
automated quotation system on which the Common Stock is currently listed or
designated while such securities are outstanding. The Company shall pay all fees
and expenses in connection with satisfying its obligations under this Section
7.2.

 

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7.3 Tacking. Subject to the truth and accuracy of the Investor’s representations
set forth in Section 6 of this Agreement, the parties acknowledge and agree that
in accordance with Section 3(a)(9) of the Securities Act, the shares of
Preferred Stock issued in Exchange for the Existing Securities will tack back to
the original issue dates of each such Existing Securities pursuant to Rule 144
and the Company agrees not to take a position to the contrary.

 

7.4 Survival of Covenants. Sections 4.1, 4.3, 4.5, 4.6, 4.8, 4.10, 4.11, 4.12
(subject to the limitations set forth in that certain Securities Purchase
Agreement dated as of the August 31, 2017, with the Company, the Investor and
certain other investors signatory thereto), 4.13(b) and 4.15 of the Purchase
Agreement shall survive and be incorporated by reference into this Agreement and
Preferred Stock and the shares underlying the Preferred Stock issuable hereunder
shall for all such purposes be deemed “Preferred Stock”, “Securities”,
“Conversion Shares” and “Underlying Shares” as applicable and as used under such
Securities Purchase Agreement as if the Preferred Stock were issued pursuant to
such agreement.

 

7.5 Blue Sky. The Company shall make all filings and reports relating to the
Exchange required under applicable securities or “Blue Sky” laws of the states
of the United States following the date hereof, if any.

 

7.6 Fees and Expenses. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.

 

8. Miscellaneous.

 

8.1 Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto and the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party, other than the parties hereto or their respective successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

 

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8.2 Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state or federal courts
sitting in The City of New York, Borough of Manhattan, for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

8.3 Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

 

8.4 Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party) or by electronic mail; or (iii) one Business Day after deposit
with an overnight courier service, in each case properly addressed to the party
to receive the same. The addresses, facsimile numbers and email addresses for
such communications shall be:

 

If to the Company:

 

Rennova Health, Inc.

931 Village Boulevard, Suite 905

West Palm Beach, Florida 33409

Attention: Chief Executive Officer

Telephone: (561) 855-1626

Facsimile: (561) 282-3417

E-mail: slagan@rennovahealth.com

 

With a copy to:

 

Shutts & Bowen LLP

200 South Biscayne Boulevard, Suite 4100

Miami, FL 33131

Telephone: (305) 379-9141

Facsimile: (305) 347-7767

Email: TCookson@shutts.com

 

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If to the Investor, to its address, facsimile number and email address set forth
on its signature page hereto,

 

or to such other address, facsimile number and/or email address and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine or email containing
the time, date, recipient facsimile number and an image of the first page of
such transmission or (C) provided by an overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from an
overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

 

8.5 Finder’s Fees. Each party represents that it neither is nor will be
obligated for any finders’ fee or commission in connection with this
transaction.

 

8.6 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investor. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon Investor and
the Company, provided that no such amendment shall be binding on a holder that
does not consent thereto to the extent such amendment treats such party
differently than any party that does consent thereto.

 

8.7 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

 

8.8 Entire Agreement. This Agreement represents the entire agreement and
understanding between the parties concerning the Exchange and the other matters
described herein and therein and supersedes and replaces any and all prior
agreements and understandings solely with respect to the subject matter hereof
and thereof.

 

8.9 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

8.10 Interpretation. Unless the context of this Agreement clearly requires
otherwise, (a) references to the plural include the singular, the singular the
plural, the part the whole, (b) references to any gender include all genders,
(c) “including” has the inclusive meaning frequently identified with the phrase
“but not limited to” and (d) references to “hereunder” or “herein” relate to
this Agreement.

 

8.11 No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

 

8.12 Survival. The representations, warranties and covenants of the Company and
the Investor contained herein shall survive the each of the Closing and
Contingent Closing and delivery of the Securities.

 

8.13 Further Assurances. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

8.14 No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

[SIGNATURES ON THE FOLLOWING PAGES]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of the date provided above.

 

  THE COMPANY       RENNOVA HEALTH, INC.                 By:     Name:    
Title:               Chris Diamantis

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of the date provided above.

 

INVESTOR

 

Name of Investor: ________________________________________________________

 

Signature of Authorized Signatory of Investor:
__________________________________

 

Name of Authorized Signatory:
____________________________________________________

 

Title of Authorized Signatory:
_____________________________________________________

 

Email Address of Authorized Signatory:
_____________________________________________

 

Facsimile Number of Authorized Signatory:
__________________________________________

 

Address for Notice to Investor:

 

Address for Delivery of Securities to Investor (if not same as address for
notice):

 

[SIGNATURE PAGES CONTINUE]

 

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