Item
1.01. Entry into a Material Definitive Agreement.
THE
ACQUISITION
Asset
Purchase Agreement
On
July 15, 2019, Interpace Diagnostics Group, Inc. (the “
Company
”), Interpace BioPharma, Inc., a newly formed
and wholly owned subsidiary of the Company (“
Buyer
”), Cancer Genetics, Inc. (“
CGI
”), Gentris,
LLC, a wholly owned subsidiary of CGI (“
Gentris
”) and Partners for Growth IV, L.P., a secured creditor of CGI
(
“PFG”
or “
Seller
”), entered into and closed on a Secured Creditor Asset Purchase Agreement
(the “
Asset Purchase Agreement
”). The Asset Purchase Agreement contains the terms and conditions of the acquisition
of assets and assumption of certain liabilities (the “
Acquisition
”
)
relating to CGI’s and Gentris’
biopharma services business (the “
BioPharma Business
”). The BioPharma Business provides pharmaceutical and
biotech companies and non-profit entities performing clinical trials with lab testing services for patient stratification and
treatment selection through an extensive suite of molecular- and biomarker-based testing services, DNA- and RNA- extraction and
customized assay development and trial design consultation.
Under
the Asset Purchase Agreement, Buyer acquired assets comprising the BioPharma Business from Seller, through a private foreclosure
sale under § 9-610 of the Uniform Commercial Code as enacted in all relevant jurisdictions (the “
UCC
”).
Concurrently with the execution of the Asset Purchase Agreement, the Company entered into a financing arrangement with Ampersand
2018 Limited Partnership (the “
Investor
”), a fund managed by Ampersand Capital Partners, pursuant to which
the Investor agreed to provide specified financing to the Company in connection with the Acquisition (the “
Investment
”),
subject to the terms and conditions of such financing documents, as further discussed below.
At
the closing, Seller irrevocably sold and transferred to Buyer all of its interests in CGI, free and clear of Seller’s security
interest and any other lien, in all of the properties and assets of CGI used or held for use in connection with the BioPharma
Business (collectively, the “
Purchased Assets
”). To the extent any assets owned by CGI or Gentris and relating
to the BioPharma Business were not subject to Seller’s perfected and valid security interest, those assets were transferred
directly to Buyer by CGI and Gentris. At closing, Seller delivered to CGI a release of all liens held by the first lien secured
lender, Silicon Valley Bank (“
SVB”
), on CGI’s assets through UCC-3 termination statements for all liens
of PFG and SVB.
Buyer
paid $23,500,000, less certain closing adjustments totaling $1,978,240 (the “
Base Purchase Price
”), as consideration
for the Purchased Assets, of which $7,692,300 was in the form of a subordinated seller note (the “
Excess Consideration
Note
”, as further described below) issued by Buyer to CGI, and the remainder was paid in cash to or on behalf of Seller
on the closing date. In addition, Buyer is assuming certain liabilities of CGI related to the BioPharma Business in the aggregate
sum of approximately $5,000,000. Seller utilized the cash proceeds of approximately $13,829,000 to satisfy the outstanding balance
of approximately $2,910,000 due to SVB under that certain loan and security agreement by and among CGI and SVB, as amended, to
satisfy the outstanding balance of approximately $6,340,000 due to Seller under that certain loan and security agreement by and
among CGI and Seller, as amended, and to satisfy certain transaction expenses. The balance of approximately $2,260,000, net of
payment of transaction expenses, was delivered to CGI along with the Excess Consideration Note. The Base Purchase Price is subject
to two additional adjustments following the closing: for the finalized net worth (assets less liabilities) of the BioPharma Business
as of June 30, 2019 (the “
NWA
”), subject to a cap of $775,000, and for certain older accounts receivable, in
the aggregate amount of approximately $830,000, still uncollected as of December 31, 2019 (the “
ARA
”). Any
amounts due to Buyer under the NWA will be set off against the Excess Consideration Note, and any amounts due to Buyer under the
ARA will be either set off against the Excess Consideration Note or, if it is no longer outstanding, satisfied through an AR Holdback
(as defined in the Asset Purchase Agreement) mechanism, in each case as further set forth in the Asset Purchase Agreement.
The
Asset Purchase Agreement contains certain representations and warranties, which are made solely for purposes of the Asset Purchase
Agreement and, in some cases, are subject to qualifications and limitations agreed to by the parties thereto in connection with
the negotiated terms of the Asset Purchase Agreement, and which are qualified by certain disclosures that were made in connection
with the parties’ entry into such agreement. The Asset Purchase Agreement provides for indemnification by CGI for limited
breaches of representations and warranties, covenants and specified line-items, subject to agreed upon caps and baskets and survival
periods. Indemnification payments due to Buyer may be (x) set off against the Excess Consideration Note, (y) if it is no longer
outstanding, funded by a $735,000 holdback from payout to CGI under the Excess Consideration Note, subject to an additional retained
AR Holdback if applicable, or (z) required to be paid directly by CGI, depending on the agreed upon limitations.
Excess
Consideration Note
Under
the terms of the Excess Consideration Note, the principal amount plus any accrued and unpaid interest thereon will be reduced
or increased, subject to certain caps, by the amount of any NWA payment, any ARA payment and/or the amount of certain indemnification
payments, in each case due and payable under and subject to the terms of the Asset Purchase Agreement. The Excess Consideration
Note, accruing interest at 6% per annum, matures upon the earlier of three years from issuance or consummation of the Second Closing
(as defined in the Securities Purchase Agreement) by the Investor after approval by the Company’s shareholders.
The
Excess Consideration Note is subordinate and junior in right of payment to the prior payment in full of the indebtedness of Buyer
in favor of SVB, as the Company’s senior lender, under the Loan and Security Agreement, dated as of November 13, 2018, by
and among SVB, the Company, Interpace Diagnostics Corporation, and Interpace Diagnostics, LLC, as it may be amended, restated,
replaced or otherwise modified from time to time, subject to certain exceptions set forth therein.
Transition
Services Agreement
On
the closing date, CGI and Buyer also entered into a Transition Services Agreement (the “
Transition Services Agreement
”)
in connection with the Asset Purchase Agreement. Under the Transition Services Agreement, following the closing and for a limited
period, each party provides to the other party certain services described in exhibits thereto, for the purpose of accommodating
the transition of the BioPharma Business to Buyer. In particular, CGI agreed to provide to Buyer, among other things, certain
personnel services, payroll processing, administration services and benefit administration services described in an exhibit thereto,
for a period not to exceed six months from the closing date, subject to the terms and conditions of the Transition Services Agreement,
in exchange for payment or reimbursement, as applicable, by Buyer for the costs related thereto, including salaries and benefits
for certain of CGI’s BioPharma Business employees during the transition period.
THE
INVESTMENT
Securities
Purchase Agreement
On
July 15, 2019 the Company entered into a Securities Purchase Agreement (the “
Securities Purchase Agreement
”)
with the Investor pursuant to which the Company agreed to sell to the Investor, in a private placement pursuant to Regulation
D and Section 4(a)(2) under the Securities Act of 1933, as amended (the “
Securities Act
”), up to an aggregate
of $27,000,000 in convertible preferred stock, par value $0.01 per share, of the Company consisting of two series, Series A (“
Series
A
”) and Series A-1 (“
Series A-1
” and together with the Series A, the “
Preferred Stock
”),
both at an issuance price per share of $100,000 (the “
Stated Value
”). At the Initial Closing (as defined in
the Securities Purchase Agreement), effected concurrently with the closing of the Acquisition, the Company issued to the Investor
60 newly created shares of Series A at an aggregate purchase price of $6,000,000.00, and 80 newly created shares of Series A-1
at an aggregate purchase price of $8,000,000.00. The terms of the Preferred Stock are described below under “
Certificate
of Designation
”. The Securities Purchase Agreement contemplates a Second Closing, which will only be effected following
the fulfillment to the Investor’s satisfaction of customary conditions, including, among others, the approval by the stockholders
of the Company (the “
Stockholder Approval
”), as required under the rules of the Nasdaq Stock Market LLC (the
“
Nasdaq Listing Rules
”), of the issuance of shares of common stock, par value $0.01 per share, (the “
Common
Stock
”) upon conversion of the Preferred Stock (the “
Conversion Issuances
”) in excess of the aggregate
number of shares of Common Stock that the Company may issue upon conversion of the Preferred Stock without breaching its obligations
under the Nasdaq Listing Rules, unless the Company obtains the Stockholder Approval, and certain related rights of the Investor.
If the Second Closing occurs, the Company would issue an additional 130 shares of Series A to the Investor at an aggregate purchase
price of $13,000,000 and each share of Series A-1 issued to the Investor at the Initial Closing would automatically convert into
one share of Series A. Pursuant to the Certificate of Designation, the Company is obligated to seek the Stockholder Approval
at an annual or special meeting of the stockholders (the “Next Meeting”) within six (6) months of the date of the
Initial Closing, and will in connection therewith file proxy materials with the U.S. Securities and Exchange Commission (the “
Commission
”).
The Investor represented in the Securities Purchase Agreement that it was, on the date of entry into the Securities Purchase Agreement,
an “accredited investor” as defined in Rule 501(a) under the Securities Act.
Certificate
of Designation
On
July
15
, 2019, the Company filed
a Certificate of Designation
of Preferences, Rights and Limitations of Series A Convertible Preferred Stock and Series
A-1 Convertible Preferred Stock (the “
Certificate of Designation
”)
with the Secretary
of State of the State of Delaware, which designated 270 shares of the Company’s preferred stock as Series A and 80 shares
of the Company’s preferred stock as Series A-1.
Conversion
From
and after July 15, 2019 (the “Issuance Date”) until the earlier to occur of: (a) the day after the Next Meeting; and
(b) six months following the Initial Closing (the “
Voting Date
”), the Series A is not convertible into shares
of Common Stock. From and after the Voting Date, the Series A issued at the Initial Closing will be convertible into 7,500,000
shares of the Company’s Common Stock based on an initial conversion price (the “
Conversion Price
”) of
$0.80
per share. The Conversion Price, however, is subject to a downward adjustment if a
2020 revenue target of $34,000,000 related to the Company’s historical business (without giving effect to the acquisition)
is not satisfied, subject to a Conversion Price floor of $0.59. The downward adjustment in Conversion Price is $0.03 per $1,000,000
of revenue shortfall but limited to no more than $0.21 or a potential adjustment of the initial conversion price of up to 26%.
Each share of Series A will be convertible, from and after the Voting Date, whether or not such vote is positive, and from time
to time, at the option of the holder thereof, into a number of shares of Common Stock equal to the Stated Value divided by the
then current Conversion Price and then multiplied by the number of shares of Series A to be converted. As described in the Certificate
of Designation, the Company will not issue any shares of Common Stock upon conversion of the Series A if the issuance would exceed
the aggregate number of shares of Common Stock that the Company may issue without breaching its obligations under the Nasdaq Listing
Rules, unless the Company obtains the Stockholder Approval (the number of shares of Common Stock which may be issued without violating
such Nasdaq Listing Rules, the “
Exchange Cap
”).
If
the Company obtains the Stockholder Approval at any time prior to January 15, 2021, each share of Series A-1 will automatically
be converted into one share of Series A on such date. Shares of Series A-1 are not convertible into shares of Common Stock. Shares
of Series A-1 are only convertible into shares of Series A automatically upon receipt of the Stockholder Approval.
Mandatory
Conversion
If
at any time after the Stockholder Approval, the Company consummates the sale of shares of Common Stock to the public in a firm-commitment
underwritten public offering pursuant to an effective registration statement under the Securities Act pursuant to which the price
of the Common Stock in such offering is at least equal to the Series A Mandatory Conversion Price, as defined in the Certificate
of Designation (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar
recapitalization affecting such shares) and such offering does not include warrants (or any other convertible security) and results
in at least $25,000,000.00 in proceeds, net of the underwriting discount and commissions, to the Company and the Common Stock
continues to be listed for trading on the Nasdaq Capital Market or another exchange, all outstanding shares of Series A will automatically
be converted into shares of Common Stock, at the then effective Series A Conversion Ratio (as defined in the Certificate of Designation).
Dividends
From
and after the Issuance Date, including the date of conversion of any shares of Series A-1 into Series A, each such share of Series
A will accrue dividends at the rate per annum of six percent (6%) of its Stated Value, plus the amount of previously declared
or accrued, and not previously paid dividends (subject to appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such shares). From and after the third (3
rd
) anniversary of
its issuance (if not earlier converted into Series A following the Stockholder Approval
)
,
each share of Series A-1 will accrue dividends at the rate per annum of twelve percent (12%) of its Stated Value plus the amount
of previously declared or accrued, and not previously paid dividends (subject to appropriate adjustment in the event of any stock
dividend, stock split, combination or other similar recapitalization affecting such shares). Prior to the Stockholder Approval,
no dividend may be paid in Common Stock on either the Series A or Series A-1.
Voting
The
Series A-1 has no voting rights and the Series A has no voting rights prior to the Voting Date. At such time as the Series A is
eligible to vote, on any matter presented to the stockholders of the Company for their action or consideration after the Voting
Date, each holder of outstanding shares of Series A will be entitled to cast the number of votes equal to the lesser of: (a) the
number of whole shares of Common Stock into which the shares of Series A held by such holder are convertible as of the record
date for determining stockholders entitled to vote on such matter; and (b) the number of whole shares of Common Stock equal to
the Stated Value of the Series A divided by $0.80 and then multiplied by the number of shares of Series A held by such holder
as of the record date for determining stockholders entitled to vote on such matter; provided, however, that at any meeting of
stockholders of the Company (or by written consent of stockholders in lieu of meeting) pursuant to which the record date for determining
the stockholders entitled to vote at such meeting (or by written consent) occurs prior to the Company obtaining the Stockholder
Approval, each share of Series A that exceeds the Exchange Cap shall have no voting rights (the “
Voting Cap
”).
Except as provided by law or by the other provisions of this Certificate of Designation, holders of Series A will vote together
with the holders of Common Stock as a single class and on an as-converted to Common Stock basis.
Protective
Provisions
For
so long as any shares of Preferred Stock are outstanding, the written consent of the holders of a majority of the then outstanding
shares of Preferred Stock is required for the Company or its subsidiaries to amend, waive, alter or repeal the preferences, rights,
privileges or powers of the holders of Preferred Stock, authorize, create or issue any equity securities senior to or pari passu
with either series of Preferred Stock; or increase or decrease the number of directors constituting the Board.
For
so long as either: (i) at least 105 shares of Preferred Stock originally issued remain outstanding; or (ii) at least 28 shares
of Series A-1 originally issued remain outstanding; each subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization affecting such shares,
the written consent
of the holders of a majority of the then outstanding shares of Preferred Stock is required for the Company or its subsidiaries
to: (A)
authorize, create or issue any debt securities for borrowed money or funded debt (1) pursuant to which the Company
or any of its direct or indirect subsidiaries issues shares, warrants or any other convertible security, or (2) in excess of $4,500,000.00
initially, with such amount to be increased in connection with an aggregate consolidated revenue milestone, but excluding certain
specified permitted transactions; (B) merge with or acquire all or substantially all of the assets of one or more other companies
or entities with a value in excess of $20,000,000.00, to be increased in connection with an aggregate consolidated revenue milestone;
(C) materially change the nature of the business of the Company; (D) consummate any Liquidation (as defined in the Certificate
of Designation); (E) transfer material intellectual property rights other than in the ordinary course of business; (F) declare
or pay any cash dividend or make any cash distribution on any equity interests of the Company other than Preferred Stock; (G)
repurchase or redeem any shares of capital stock of the Company, except for the redemption of Preferred Stock pursuant to the
terms of the Certificate of Designation, or repurchases of Common Stock under agreements previously approved by the Board with
employees, consultants, advisors or others who performed services for the Company or any subsidiary in connection with the cessation
of such employment or service; (H) incur any additional individual debt, indebtedness for borrowed money or other additional liabilities
pursuant to which the Company or any of its subsidiaries issues shares, warrants or any other convertible security, or incur any
individual debt, indebtedness for borrowed money or other liabilities pursuant to which the Company or any of its subsidiaries
does not issue shares, warrants or any other convertible security exceeding $4,500,000.00 million initially, with such amount
to be increased in connection with an aggregate consolidated revenue milestone, but excluding certain specified permitted transactions;
or (I) change any accounting methods of the Company or any of its subsidiaries, except for those changes required by GAAP or
applicable
regulatory agencies or authorities.
In addition, the Company will not be restricted from adopting an at-the-market offering
of Common Stock or other public offering for up to $5,000,000 of Common Stock.
Liquidation
Upon
any Liquidation (including mergers and consolidations and sales of all or substantially all of the Company’s assets), the
holders of shares of Series A-1 then outstanding will be entitled to be paid out of the assets of the Company available for distribution
to its stockholders and before any payment will be made to the holders of Series A, Common Stock or any other class or series
of preferred stock ranking on liquidation junior to the Series A-1 by reason of their ownership thereof, the greater of (i) (A)
until two years after issuance, an amount per share two times (2x) the Stated Value, (B) between two and three years after issuance,
an amount per share two and one-half times (2½ x) the Stated Value, or (C) after three years after issuance, three times
(3x) the Stated Value of such share of Series A-1, plus any dividends accrued but unpaid thereon, or (ii) such amount per share
as would have been payable in respect of such share had such share been converted into Series A and each such share of Series
A had been subsequently converted to Common Stock (the “Series A-1 Liquidation Value”). The holders of shares of Series
A then outstanding will be entitled to be paid out of the assets of the Company available for distribution to its stockholders
(on a pari passu basis with the holders of any class or series of preferred stock ranking on liquidation on a parity with the
Series A), and before any payment will be made to the holders of Common Stock or any other class or series of preferred stock
ranking on liquidation junior to the Series A by reason of their ownership thereof, an amount per share of Series A equal to the
greater of (i) the Stated Value of such share of Series A, plus any dividends accrued but unpaid thereon, whether or not declared,
together with any other dividends declared but unpaid thereon, or (ii) such amount per share as would have been payable had each
such share been converted into Common Stock immediately prior to such Liquidation.
Redemption
In
the event the Stockholder Approval has not been obtained by July 15, 2022, the Investor shall have the right (the “Redemption
Right”) beginning on July 16, 2022 to require the Company to redeem all of the shares of Series A, if any, then held by
Investor that are convertible into a number of shares of Common Stock that exceeds the Exchange Cap and all of the shares of Series
A-1 Preferred Stock then held by Investor. Each of the shares of Preferred Stock subject to redemption shall be redeemed by the
Company at a price equal to the Series A-1 Liquidation Value or Series A Liquidation Value, as applicable.
If
the Company is unable to redeem for cash in compliance with Section 6 of the Certificate of Designation all of the shares of Preferred
Stock subject to a redemption notice in compliance with applicable law, the Investor, exclusively and as a separate class, shall
be entitled to elect a majority of the directors of the Company then in-office.
Director
Designation Rights
The
Certificate of Designation also provides for the following designation rights: after the Stockholder Approval, (i) for as long
as at least 135 shares of Series A remain outstanding that are not subject to the Voting Cap (subject to appropriate adjustment
in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares) or if the
Investor obtains an exemption to the Voting Cap from the Nasdaq Capital Market with respect to the right to appoint directors
of the Company, the holders of record of the shares of Series A, exclusively and as a separate class, will be entitled to designate
three (3) directors to the Board (including any committee thereof); (ii) for as long as at least 90 shares of Series A remain
outstanding that are not subject to the Voting Cap (subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting such shares) or if the Investor obtains an exemption to the Voting
Cap from the Nasdaq Capital Market with respect to the right to appoint directors of the Company, the holders of record of the
shares of Series A, exclusively and as a separate class, will be entitled to designate two (2) directors to the Board (including
any committee thereof); and (iii) for as long as at least 45 shares of Series A remain outstanding (subject to appropriate adjustment
in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares), the holders
of record of the shares of Series A, exclusively and as a separate class, will be entitled to designate one (1) director to the
Board (including any committee thereof). Any director so designated to the Board’s Audit Committee will be independent within
the meaning of the Nasdaq Listing Rules. Any director elected pursuant to the terms of the Certificate of Designation may be removed
without cause by, and only by, the affirmative vote of the holders of the shares of the class or series of capital stock entitled
to elect such director or directors. A vacancy in any directorship filled by the holders of any class or series may be filled
only by the holders of such class or series or by any remaining director or directors elected by the holders of such class or
series.
Anti-Dilution
Rights
If
the Company issues additional shares of Common Stock without consideration or for a consideration per share less than the Series
A Conversion Price (as defined in the Certificate of Designation) in effect immediately prior to such issuance, the Series
A Conversion Price will be reduced pursuant to a broad-based weighted average formula.
Investor
Rights Agreement
In
connection with the sale of the Preferred Stock and entry into the Securities Purchase Agreement,
on
July
15
, 2019,
the Company entered into an Investor Rights Agreement with the Investor
(the “
Investor Rights Agreement
”). Pursuant to the Investor Rights Agreement, the Company and the Investor
established certain terms and conditions concerning the rights of and restrictions on the Investor with respect to the ownership
of the Preferred Stock and other capital stock of the Company.
The
Investor will have certain consent rights, including with respect to those set forth under “
Protective Provisions
”
above. The Investor will have the pro rata pre-emptive right to purchase securities newly offered by the Company, based upon its
then current ownership of Preferred Stock. The Investor Rights Agreement also provides the Investor with the right to demand shelf
and piggy-back registration with respect to Common Stock issued as a result of the conversion of Preferred Stock, commencing one
year after the issuance of the Preferred Stock, subject to certain limitations. The Investor Rights Agreement requires the Company
to include in its proxy statement for its next annual meeting the proposal to approve the Conversion Issuances.
For
so long as the Investor owns at least 45 shares of Series A that are not subject to the Voting Cap (as equitably adjusted for
any stock split, reverse stock split, recapitalization or similar event with respect to the Common Stock), in addition to the
right the Investor has to nominate one member of the Company’s Board of Directors (the “
Board
”) as discussed
above, it will also have the right to designate one representative to attend all meetings of the Board and any committees or sub-committees
thereof in a nonvoting observer capacity, subject to certain exclusion rights. If the Investors acquire the full amount of additional
Preferred Stock contemplated in the Second Closing, they will have the ability to nominate up to three directors, one of which
will be an independent director who will be a member of all committees of the Board. The Investors have agreed, for so long as
they hold at least 45 shares of Series A that are not subject to the Voting Cap (as equitably adjusted for any stock split, reverse
stock split, recapitalization or similar event with respect to the Common Stock), to vote for the election of members to the Board
for which the Investors do not have nomination rights in accordance with the recommendation of the majority of the members of
the Board who were members of the Board before the date of the Investor Rights Agreement and their successors.
The
Investors are prohibited from transferring any Common Stock issuable upon conversion of the Series A for a period of 180 days
and from acquiring beneficial ownership of additional Company securities without the prior approval of the Company during the
two year period following the date of the Securities Purchase Agreement.
The
Investor agreed that from July 15, 2019 until July 15, 2021 (the “
Standstill Period
”), without the prior written
approval of the Company or the Company’s Board of Directors, or as otherwise expressly permitted or contemplated by the
Investor Rights Agreement (including pursuant to the exercise of Investor’s pre-emptive rights under the Investor Rights
Agreement) or the Certificate of Designation, the Investor will not and will cause its affiliates not to acquire beneficial ownership
of any securities (including in derivative form) of the Company, in each case excluding (x) the Series A, purchased either directly
from the Company or pursuant to a conversion of Series A-1, the Series A-1 or Common Stock issuable upon conversion of the Series
A, and (y) any capital stock or other equity securities of the Company pursuant to or in accordance with the Certificate of Designation
or pursuant to the exercise of Investor’s pre-emptive rights under the Investor Rights Agreement.
The
Investor agreed not to engage, directly or indirectly, in specified transactions in the Company’s securities (including,
without limitation, any short sales involving the Company’s securities) during the period from July 15, 2019 until the earlier
of (i) the consummation of a Deemed Liquidation (as defined in the Certificate of Designation); and (ii) the date that Investor
and certain of its affiliates do not own any Series, Series A-1 or Common Stock issuable upon conversion of the Series A, including
Series A issuable upon conversion of the Series A-1.
The
Investor also agreed that during the period from July 15, 2019 until January 15, 2020, the Investor shall not transfer any Common
Stock issuable upon conversion of the Series A, except as part of a pledge by Investor of the equity securities it acquires in
any portfolio company that is made to secure indebtedness existing as of July 15, 2019 for borrowed money incurred in connection
with on-call commitments of Investor’s limited partners or to any affiliate of Investor.
Voting
Agreement
The
Company’s directors and executive officers, who collectively hold, as of March 31, 2019, 3.3% of the Company’s outstanding
voting power, entered into Voting Agreements, dated July 15, 2019, (the “
Voting Agreements
”), pursuant to which
they agreed to vote in favor of any resolution presented to the stockholders of the Company to approve or facilitate the Conversion
Issuances or any exercise of pre-emptive rights of under the terms of the Investor Rights Agreement and agreed until the earlier
to occur of the termination of the Voting Agreement or January 15, 2020, not to transfer any shares of Common Stock held by such
directors and executive officers.
Qualified
By the Documents
The
foregoing description of the Asset Purchase Agreement, Certificate of Designation, Excess Consideration Note, Transition Services
Agreement, Securities Purchase Agreement, Investor Rights Agreement, and Voting Agreement (collectively, the “
Documents
”)
is qualified in its entirety by reference to the full text of the Documents, which are filed as Exhibits 2.1, 3.1, 4.1, 10.1,
10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K and incorporated herein by reference in their entirety.