Exhibit 10.1

 

PROMISSORY NOTE

 

$6,000,000.00 October 1, 2018

 

FOR VALUE RECEIVED, the undersigned, CTL Medical Corporation, a Delaware
corporation (“Maker”), promises to pay to the order of AMEDICA CORPORATION, a
Delaware corporation (“Payee”), the principal sum of SIX MILLION AND NO/100
DOLLARS ($6,000,000.00) or so much thereof as shall be advanced, on demand, or
if no demand is sooner made, then at the maturity of this Promissory Note (as
may be amended, modified or supplemented, this “Note”), with interest on the
unpaid balance thereof from the date of this Note until maturity at the rate or
rates specified below, both principal and interest payable as provided below in
lawful money of the United States of America at the address of Payee set forth
below or at such other place as from time to time may be designated by the
holder of this Note.

 

I. Asset Purchase Agreement

 

This Note is executed and delivered in accordance with Section 2.1(b) of that
certain Asset Purchase Agreement dated as of September 5, 2018, by and among
Maker, as buyer, and Payee and US SPINE, INC., a Delaware corporation,
collectively, as seller (the “Agreement”). Capitalized terms not defined herein
shall have the meanings assigned to them in the Agreement.

 

II. Interest Rates and Payments

 

Provided no Event of Default occurs and continues beyond any applicable notice
and cure periods, the unpaid principal of this Note from time to time
outstanding shall bear no interest prior to maturity. As used in this Note,
“Event of Default” means the occurrence and continuance of any one or more of
the following events:

 

(a) Any representation or warranty made or deemed made by or on behalf of the
Maker to the Payee under this Note, any other Loan Document (as hereinafter
defined), or any certificate delivered in connection with this Note or any other
Loan Document shall be materially false on the date made or confirmed;

 

(b) Maker shall default in the payment of any amounts due hereunder and such
default remains uncured for ten (10) days following written notice thereof to
Maker, provided, however, that if Maker has received one (1) such written notice
within the preceding twelve (12) months, Maker shall not be entitled to any
additional notice and cure periods for payment defaults occurring within said
twelve-month period;

 

(c) The material breach by the Maker of any of the other terms or provisions of
this Note and such breach continues for fifteen (15) calendar days after Maker’s
receipt of written notice thereof;

 

PROMISSORY NOTE – Page 1 

 

 

(d) The Maker or any guarantor of the obligations of the Maker to the Payee
under this Note or any other Loan Documents (each, a “Guarantor”) shall (i) have
an order for relief entered with respect to it under the federal bankruptcy laws
as now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in the appointment of
a receiver, custodian, trustee, examiner, liquidator, or similar official for it
or substantially all of its property, (iv) institute any proceeding seeking an
order for relief under the federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment, or composition
of it or its debts under any law relating to bankruptcy, insolvency, or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate, action to authorize or effect any of the foregoing actions,
(vi) fail to contest in good faith any appointment or proceeding described in
subsection (d) below, or (vii) not pay, or admit in writing its inability to
pay, its debts generally as they become due;

 

(e) Without the application, approval, or consent of the Maker or Guarantor, as
applicable, a receiver, trustee, examiner, liquidator, or similar official shall
be appointed for the Maker, any Guarantor, or any substantial portion of its
property, or a proceeding described in subsection (c) above shall be instituted
against the Maker or any Guarantor and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of thirty (30)
consecutive days;

 

(f) The occurrence of any “default,” as defined in the Security Agreement (as
hereinafter defined), or the breach of any of the terms or provisions of the
Security Agreement, which default or breach continues beyond any period of grace
therein provided; or

 

(g) Daniel Chon (a “Guarantor”) fails to comply with any of the terms or
provisions of the guaranty to which he is a party and which guarantees the
Maker’s obligations under this Note (the “Guaranty”), or Guarantor repudiates or
purports to revoke his Guaranty, or Guarantor denies that he has any further
liability under the Guaranty during the term thereof or gives notice to such
effect.

 

Monthly payments equal to One Hundred Thirty-Eight Thousand Eight Hundred
Eighty-Eight and 88/100 Dollars ($138,888.88) covering the unpaid principal
balance of this Note shall be due and payable in arrears commencing on November
1, 2018, and on the same day of each succeeding calendar month until April 1,
2020. Monthly payments equal to One Hundred Ninety-Four Thousand Four Hundred
Forty-Four and 44/100 Dollars ($194,444.44) covering the unpaid principal
balance of this Note shall be due and payable in arrears commencing on May 1,
2020, and on the same day of each succeeding calendar month until October 1,
2021, on which date all unpaid principal of and accrued interest on this Note,
if any, shall be due and payable.

 

If any payment shall not be paid when due and shall remain unpaid for ten (10)
calendar days, Maker shall pay an additional charge equal to five percent (5%)
of the delinquent payment, or the Maximum Rate, whichever is less. Maker agrees
to pay a returned check charge of $30.00 for any loan payment (whether by check
or automatic payment) returned for insufficient funds or returned as unpaid.

 

PROMISSORY NOTE – Page 2 

 

 

All principal payments which are past due under this Note shall bear interest
from maturity or upon acceleration at the lesser of eighteen percent (18%) per
annum or the applicable Maximum Rate.

 

“Business Day” means a day on which the office of the holder of this Note at
which payments under this Note are to be made is open for business. Payments
received after the cut-off times established by the holder of this Note from
time to time or on weekends or bank holidays will be credited as of the next
Business Day.

 

The term “Maximum Rate”, as used herein, shall mean, with respect to each holder
hereof, the maximum nonusurious interest rate, if any, that at any time, or from
time to time, may under applicable law be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by this Note under the laws
which are presently in effect of the United States and the State of Utah
applicable to such holder and such indebtedness or, to the extent allowed by law
under such applicable laws of the United States of America and State of Utah
which may hereafter be in effect, which allow a higher maximum non-usurious
interest rate than applicable laws now allow; provided, that in determining the
Maximum Rate, due regard shall be given, to the extent required by applicable
law, to any and all relevant payments, fees, charges, deposits, balances,
agreements and calculations which may constitute or be deemed to constitute
interest, or be deducted from principal to calculate the interest rate or
otherwise affect interest rate determinations, so that in no event shall the
Payee contract for, charge, receive, take, collect, reserve or apply, on the
Note, any amount in excess of the maximum non-usurious rate of interest
permitted by applicable law. The Maximum Rate shall not be limited to the
applicable rate ceiling in Utah state law if Federal laws or other state laws
now or hereafter in effect and applicable to this Note (and the interest
contracted for, charged and collected hereunder) shall permit a higher rate of
interest.

 

Maker shall have the right to prepay, without penalty, at any time and from time
to time prior to maturity, all or any part of the unpaid principal balance of
this Note. Any partial prepayments of principal shall be applied to installments
thereof in the inverse order of maturity.

 

III. Security

 

This Note is secured by a Security Agreement (as amended, modified, or
supplemented, the “Security Agreement”) of even date herewith to which reference
is made for a description of the collateral covered thereby (the “Collateral”)
and the nature and extent of the rights and powers of the holder of this Note in
respect of Collateral.

 

IV. Right to Accelerate Upon Default

 

The holder of this Note shall have the right of declaring the principal balance
hereof and the interest accrued hereon to be immediately due and payable upon
the occurrence of an Event of Default or a similar event of default defined in
the Security Agreement or Guaranty (which default remains uncured beyond any
applicable notice, grace, and/or cure period, if any). This Note, the Security
Agreement, and the Guaranty are sometimes referred to herein collectively as the
“Loan Documents.”

 

PROMISSORY NOTE – Page 3 

 

 

V. Usury Savings Provision

 

In no event shall interest contracted for, charged, or received hereunder, if
any, plus any other charges in connection herewith which constitute interest,
exceed the Maximum Rate. The amounts of such interest or other charges
previously paid to the holder of the Note in excess of the Maximum Rate shall be
applied by the holder of the Note to reduce the unpaid Principal Balance
evidenced by the Note, or, at the option of the holder of the Note, be refunded.
To the extent permitted by applicable law, determination of the legal maximum
amount of interest shall at all times be made by amortizing, prorating,
allocating, and spreading in equal parts during the period of the full stated
term of the loan and indebtedness, all interest for any time contracted for,
charged, or received from Maker in connection with this Note and indebtedness
evidenced hereby, so that the actual rate of interest on account of such
indebtedness is uniform throughout the term hereof.

 

VI. Set-Off Permitted

 

Notwithstanding anything to the contrary in this Note or any other Loan
Document, and without prejudice to any other right or remedy it has or may have,
Maker may set off, deduct, or recoup any amounts it owes to Payee hereunder
against any amounts Payee owes to Maker or its affiliates under the Agreement,
in accordance with Article 8 of the Agreement.

 

VII. Miscellaneous

 

Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity or through any bankruptcy, receivership, probate,
or other court proceedings or if this Note is placed in the hands of attorneys
for collection after default, Maker and all endorsers, guarantors, and sureties
of this Note jointly and severally agree to pay to the holder of this Note in
addition to the principal and interest due and payable hereon, all the costs and
expenses of the holder in enforcing this Note including, without limitation,
reasonable attorneys’ fees and legal expenses.

 

This Note and the rights, duties, and liabilities of the parties hereunder or
arising from or relating in any way to the indebtedness evidenced by this Note
or the transaction of which such indebtedness is a part shall be governed by and
construed in accordance with the law of the State of Utah and the law of the
United States applicable to transactions within such State.

 

No amendment of this Note shall be binding unless expressed in a writing
executed by Maker and the holder of this Note.

 

MAKER IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT SITTING IN SALT LAKE COUNTY, UTAH OVER ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, AND MAKER
HEREBY AGREES AND CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF
PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN ANY STATE OR FEDERAL COURT SITTING IN SALT LAKE
COUNTY, UTAH MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO MAKER AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE
SHALL BE COMPLETE FIVE DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

 

MAKER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT
BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS NOTE, THE SECURITY
AGREEMENT AND/OR ANY OTHER LOAN DOCUMENT, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
GIVEN KNOWINGLY AND VOLUNTARILY BY MAKER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. PAYEE IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY MAKER.

 

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PROMISSORY NOTE – Page 4 

 

 

This Note has been executed by Maker and is effective for all purposes as of the
date set forth above.

 

Maker’s Address: MAKER:       CTL Medical CTL MEDICAL CORPORATION 4550 Excel
Parkway A Delaware corporation Suite 300     Addison, Texas 75001            
By: /s/ Daniel Chon     Daniel Chon     President       Payee’s Address:        
  Amedica Corporation     1885 West 2100 South     Salt Lake City, Utah 84119  
  Attention: David O’Brien    

 

PROMISSORY NOTE – Signature Page