Item
14. Indemnification of Directors and Officers.
Our
restated certificate of incorporation and restated bylaws provide that each person who was or is made a party or is threatened
to be made a party to or is otherwise involved (including, without limitation, as a witness) in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was one of our directors
or officers or is or was serving at our request as a director, officer, member, manager or trustee of another corporation, or
of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether
the basis of such proceeding is alleged action in an official capacity as a director, officer or trustee or in any other capacity
while serving as a director, officer or trustee, shall be indemnified and held harmless by us to the fullest extent authorized
by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits us to provide broader indemnification rights than such law permitted us to provide
prior to such amendment) against all expense, liability and loss (including attorneys’ fees, judgments, fines, Employee
Retirement Income Security Act excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such
indemnitee in connection therewith. These provisions limit the liability of our directors and officers to the fullest extent permitted
under Delaware law. A director will not receive indemnification if he or she is found not to have acted in good faith.
Section
145 of the Delaware General Corporation Law permits a corporation to indemnify any director or officer of the corporation against
expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in
connection with any action, suit or proceeding brought by reason of the fact that such person is or was a director or officer
of the corporation, if such person acted in good faith and in a manner that he reasonably believed to be in, or not opposed to,
the best interests of the corporation, and, with respect to any criminal action or proceeding, if he or she had no reasonable
cause to believe his or her conduct was unlawful. In a derivative action (i.e., one brought by or on behalf of the corporation),
indemnification may be provided only for expenses actually and reasonably incurred by any director or officer in connection with
the defense or settlement of such an action or suit if such person acted in good faith and in a manner that he or she reasonably
believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be provided
if such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which
the action or suit was brought shall determine that such person is fairly and reasonably entitled to indemnity for such expenses
despite such adjudication of liability.
Pursuant
to Section 102(b)(7) of the Delaware General Corporation Law, Article Eighth of our restated certificate of incorporation eliminates
the liability of a director to us or our stockholders for monetary damages for such a breach of fiduciary duty as a director,
except for liabilities arising:
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from
any breach of the director’s duty of loyalty to us or our stockholders;
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from
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
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under
Section 174 of the Delaware General Corporation Law; or
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from
any transaction from which the director derived an improper personal benefit.
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We
carry insurance policies insuring our directors and officers against certain liabilities that they may incur in their capacity
as directors and officers. We have entered into indemnification agreements with certain of our executive officers and directors.
These agreements, among other things, indemnify and advance expenses to our directors and officers for certain expenses, including
attorney’s fees, judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including
any action by us arising out of such person’s services as our director or officer, or any other company or enterprise to
which the person provides services at our request. We believe that these provisions and agreements are necessary to attract and
retain qualified persons as directors and officers. We have entered into agreements to indemnify all of our directors and officers.
Item
15. Recent Sales of Unregistered Securities
Since
March 1, 2015, we have sold the following securities that were not registered under the Securities Act. All share numbers and
prices set forth below have been adjusted to reflect a reverse stock split effective as of January 25, 2016 whereby each 15 shares
of common stock were replaced with one share of common stock (with no fractional shares issued) and the subsequent reverse stock
split effective November 10, 2017 whereby each 12 shares of common stock were replaced with one share of common stock (with no
fractional shares issued).
The
sale and issuance of the securities set forth below were deemed to be exempt from registration under the Securities Act by virtue
of Section 4(2) or Rule 506 promulgated under Regulation D promulgated thereunder and Section 3(a)(9). Each of the recipients
of securities in these transactions was an accredited investor within the meaning of Rule 501 of Regulation D under the Securities
Act and had adequate access, through employment, business or other relationships, to information about us. No underwriters were
involved in these transactions.
On
September 8, 2015, we issued to investors Series A Warrants and Series C Warrants, each exercisable for 72,908 shares of our common
stock.
On
October 19, 2015, we issued 1,334 shares of our common stock to a service provider for services with respect to certain corporate
development activities.
On
January 28, 2016, we issued a warrant to purchase 6,250 shares of our common stock to a financial advisor.
On
April 4, 2016 and again on April 27, 2016, in connection with a debt exchange agreement we issued to the lender warrants to purchase
8,334 shares of common stock of the Company.
On
July 28, 2017, we closed on a $2.5 million term loan (the Loan”) with North Stadium Investments, LLC (“North Stadium”),
a company owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board, Dr. Sonny Bal. In connection
with the Loan, the Company issued to North Stadium, a Secured Promissory Note in the amount of $2.5 million (the “Note”).
The Note bears interest at the rate of 10% per annum, requires the Company to make monthly interest only payments for a period
of 12 months, and principal and any unpaid accrued interest are due and payable 12 months from the effective date of the Note,
July 28, 2017. The Note is secured by substantially all of the assets of the Company pursuant to a security agreement between
the Company and North Stadium dated July 28, 2017 (the “Security Agreement”), and is junior to the already existing
security interest in such assets of the Company held by Hercules Capital, Inc. In connection with the Loan and as additional consideration
for the Loan, the Company issued to North Stadium a warrant to acquire up to 55,000 common shares with a purchase price set at
$5.04 per share and a five-year term (the “Warrant”).
On
January 3, 2018, Amedica Corporation (the “Company”) and its wholly owned subsidiary US Spine, Inc. entered into an
Assignment Agreement (the “Assignment Agreement”) with certain accredited investors (collectively the “Assignees”
and each an “Assignee”), Hercules Technology III, L.P. (“HT III”) and Hercules Capital, Inc. (“HC”
and, together with HT III, “Hercules”), pursuant to which Hercules assigned to the Assignees all amounts remaining
due under the Loan and Security Agreement, dated June 30, 2014, as amended, between the Company and Hercules (the “Loan
and Security Agreement”) and (2) the note (the “Hercules Note”) between the Company and Hercules evidencing
the amounts due under the Loan and Security Agreement. The total amount assigned by Hercules to the Assignees equals in the aggregate
$2,264,623, which is secured by the same collateral underlying the Loan and Security Agreement. The Company entered into an exchange
agreement (the “Exchange Agreement”) with the Assignees, pursuant to which the Company agreed to exchange (the “Exchange”)
the Hercules Note held by the Assignees for senior secured convertible promissory notes each in the principal amount of $1,132,311
for an aggregate principal amount of $2,264,623 (the “Exchange Notes”). The Exchange Notes will mature on February
3, 2019.
On
January 31, 2018, we entered into a securities purchase agreement (the “Purchase Agreement”) with L2 Capital LLC.
Pursuant to the Purchase Agreement, we agreed to sell an original issue discount promissory note in the aggregate principal amount
of up to $840,000 (the “Note”) for an aggregate purchase price of up to $750,000 and warrants to purchase up to an
aggregate of 68,257 shares of Common Stock.
On
March 6, 2018, in connection with the Amendment Agreement described above in Description of Securities – Description of
Other Outstanding Securities of the Company – March 2018 Warrant Amendment, the Company issued to the Series E Investors
warrants to purchase up to 668,335 shares of Common Stock at an exercise price per share equal to $2.00 per share, the closing
bid price for our Common Stock on March 5, 2018 (the “New Warrants”). In addition, the Company is in the process of
granting to the underwriter securities purchase warrants to purchase up to 10,025 shares of Common Stock at an exercise price
per share equal to $2.00 per share.