Exhibit 10.11

THIRD AMENDMENT

TO

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS THIRD AMENDMENT to Second Amended and Restated Loan and Security Agreement
(this “Amendment”) is entered into as of December 16, 2011, by and between
SILICON VALLEY BANK (“Bank”) and ALPHATEC SPINE, INC., a California corporation
(“Alphatec”) and ALPHATEC HOLDINGS, INC., a Delaware corporation (“Parent” and
together with Alphatec, each a “Borrower” and collectively, “Borrowers”) whose
address is 5818 El Camino Real, Carlsbad, California 92008.

RECITALS

A. Bank and Borrowers have entered into that certain Second Amended and Restated
Loan and Security Agreement dated as of October 29, 2010, as amended by that
certain First Amendment to Second Amended and Restated Loan and Security
Agreement dated as of January 31, 2011 and certain Second Amendment to Second
Amended and Restated Loan and Security Agreement dated as of August 5, 2011 (as
the same may from time to time be further amended, modified, supplemented or
restated, the “Loan Agreement”).

B. Bank has extended credit to Borrowers for the purposes permitted in the Loan
Agreement.

C. Borrowers have requested that Bank amend the Loan Agreement to make certain
revisions to the Loan Agreement as more fully set forth herein.

D. Bank has agreed to so amend certain provisions of the Loan Agreement, but
only to the extent, in accordance with the terms, subject to the conditions and
in reliance upon the representations and warranties set forth below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

1. Definitions. Capitalized terms used but not defined in this Amendment shall
have the meanings given to them in the Loan Agreement.

2. Amendments to Loan Agreement.

2.1 Section 2.1.1 (Term Loan). Section 2.1.1 of the Loan Agreement hereby is
amended and restated in its entirety to read as follows:

“2.1.1 Term Loan.

(a) Availability. As of the Third Amendment Effective Date, Bank shall be deemed
to have made a term loan (the “Term Loan”) to Borrower in the amount of Ten
Million Dollars ($10,000,000), which Term Loan shall refinance a portion of the
Revolving Line outstanding as of the day immediately preceding the Third
Amendment Effective Date.

(b) Repayment. Borrower shall repay the Term Loan in (i) equal quarterly

 

Portions of this Exhibit were omitted, as indicated by [***], and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment under Rule 24b-2 of
the Securities Exchange Act of 1934, as amended.

 

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installments of principal beginning January 1, 2012 and continuing on the first
day of each April, July, October and January thereafter, plus (ii) monthly
payments of accrued interest beginning on January 1, 2012 and continuing on the
same day of each month thereafter. Borrower’s final Term Loan payment, due on
the Term Loan Maturity Date, shall include all outstanding principal and accrued
and unpaid interest under the Term Loan. Once repaid, the Term Loan may not be
reborrowed.

(c) Prepayment. So long as no Event of Default has occurred and is continuing,
Borrower shall have the option to prepay all, but not less than all, of the Term
Loan, provided Borrower (i) delivers written notice to Bank of its election to
prepay the Term Loan at least ten (10) days prior to such prepayment, and
(ii) pays, on the date of such prepayment (A) all outstanding principal plus
accrued and unpaid interest, (B) the Make-Whole Premium, and (C) all other sums,
if any, that shall have become due and payable, including interest at the
Default Rate with respect to any past due amounts.”

2.2 Section 2.1.3 (Letters of Credit Sublimit). Section 2.1.3 of the Loan
Agreement hereby is amended and restated in its entirety to read as follows:

“2.1.3 Letters of Credit.

(a) Bank shall issue or have issued Letters of Credit denominated in Dollars or
a Foreign Currency for Borrower’s account. The aggregate Dollar Equivalent of
the face amount of outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed
Five Hundred Thousand Dollars ($500,000), minus (i) the sum of all amounts used
for Cash Management Services, and minus (ii) the FX Reduction Amount.

(b) If, on the Revolving Line Maturity Date (or the effective date of any
termination of this Agreement), there are any outstanding Letters of Credit,
then on such date Borrower shall provide to Bank cash collateral in an amount
equal to 105% of the Dollar Equivalent of the face amount of all such Letters of
Credit plus all interest, fees, and costs due or to become due in connection
therewith (as estimated by Bank in its good faith business judgment), to secure
all of the Obligations relating to such Letters of Credit. All Letters of Credit
shall be in form and substance acceptable to Bank in its sole discretion and
shall be subject to the terms and conditions of Bank’s standard Application and
Letter of Credit Agreement (the “Letter of Credit Application”). Borrower agrees
to execute any further documentation in connection with the Letters of Credit as
Bank may reasonably request. Borrower further agrees to be bound by the
regulations and interpretations of the issuer of any Letters of Credit
guarantied by Bank and opened for Borrower’s account or by Bank’s
interpretations of any Letter of Credit issued by Bank for Borrower’s account,
and Borrower understands and agrees that Bank shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrower’s instructions or those contained in the Letters of Credit or any
modifications, amendments, or supplements thereto.

(c) The obligation of Borrower to immediately reimburse Bank for drawings made
under Letters of Credit shall be absolute, unconditional, and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement, such
Letters of Credit, and the Letter of Credit Application.

(d) Borrower may request that Bank issue a Letter of Credit payable in a Foreign
Currency. If a demand for payment is made under any such Letter of Credit, Bank
shall treat such demand as an Advance to Borrower of the Dollar Equivalent of
the amount thereof (plus fees and charges in connection therewith such as wire,
cable, SWIFT or similar charges).

(e) To guard against fluctuations in currency exchange rates, upon the issuance
of any Letter of Credit payable in a Foreign Currency, Bank shall create a
reserve (the “Letter of Credit Reserve”) under the Revolving Line in an amount
equal to ten percent (10%) of the face amount of such Letter of Credit. The
amount of the Letter of Credit Reserve may be adjusted by Bank from time to time
to account for fluctuations in the exchange rate. The availability of funds
under the Revolving Line shall be reduced by the

 

Portions of this Exhibit were omitted, as indicated by [***], and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment under Rule 24b-2 of
the Securities Exchange Act of 1934, as amended.

 

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amount of such Letter of Credit Reserve for as long as such Letter of Credit
remains outstanding.”

2.3 Section 2.1.4 (Foreign Exchange Sublimit). Section 2.1.4 of the Loan
Agreement hereby is amended and restated in its entirety to read as follows:

“2.1.4 Foreign Exchange. Borrower may enter into foreign exchange contracts with
Bank under which Borrower commits to purchase from or sell to Bank a specific
amount of Foreign Currency (each, a “FX Forward Contract”) on a specified date
(the “Settlement Date”). FX Forward Contracts shall have a Settlement Date of at
least one (1) FX Business Day after the contract date and shall be subject to a
reserve of ten percent (10%) of each outstanding FX Forward Contract. The
aggregate amount of FX Forward Contracts at any one time may not exceed ten
(10) times Five Hundred Thousand Dollars ($500,000), minus (i) the sum of all
amounts used for Cash Management Services, and minus (ii) the Dollar Equivalent
of the face amount of any outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit and any Letter of Credit Reserve). The amount
otherwise available shall be reduced by an amount equal to ten percent (10%) of
each outstanding FX Forward Contract (the “FX Reduction Amount”). Any amounts
needed to fully reimburse Bank for any amounts not paid by Borrower in
connection with FX Forward Contracts will accrue interest at the interest rate
applicable to Advances.”

2.4 Section 2.1.5 (Cash Management Services Sublimit). Section 2.1.5 of the Loan
Agreement hereby is amended and restated in its entirety to read as follows:

“2.1.5 Cash Management Services. Cash Management Services. Borrower may use an
aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000), minus
(a) the Dollar Equivalent of the face amount of any outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve), and minus (b) the FX Reduction Amount, for Bank’s cash
management services, which may include merchant services, direct deposit of
payroll, business credit card, and check cashing services identified in Bank’s
various cash management services agreements (collectively, the “Cash Management
Services”). Any amounts Bank pays on behalf of Borrower for any Cash Management
Services will accrue interest at the interest rate applicable to Advances.”

2.5 Section 2.2 (Overadvances). Section 2.2 of the Loan Agreement hereby is
amended and restated in its entirety to read as follows:

“2.2 Overadvances. If, at any time, the outstanding principal amount of any
Revolving Advances exceeds the Availability Amount (such amount being an
“Overadvance”), Borrowers shall immediately pay to Bank in cash the amount of
such Overadvance. Without limiting Borrowers’ obligation to repay Bank any
amount of the Overadvance, Borrowers agree to pay Bank interest on the
outstanding amount of any Overadvance, on demand, at the Default Rate.”

2.6 Section 2.4(a) (Payment of Interest on the Credit Extensions).
Section 2.4(a) of the Loan Agreement hereby is amended and restated in its
entirety to read as follows:

“(a) Interest Rates.

(i) Revolving Advances. Subject to Section 2.4(b), the principal amount
outstanding under the Revolving Line shall accrue interest at a per annum rate
equal to (i) during the period from the Third Amendment Effective Date until the
Tier 1 AQR is in effect, [***]; (ii) during the period when the Tier 1 AQR is in
effect, [***]; (iii) during the period when the Tier 2 AQR is in effect, [***];
and (iv) during the period when the Tier 3 AQR is in effect, [***]; in each
case, which interest shall be payable monthly.

 

Portions of this Exhibit were omitted, as indicated by [***], and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment under Rule 24b-2 of
the Securities Exchange Act of 1934, as amended.

 

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(ii) Term Loan. Subject to Section 2.4(b), the principal amount outstanding
under the Term Loan shall accrue interest at a fixed per annum rate equal to the
greater of [***], which interest shall be payable monthly.”

2.7 Section 2.4(f) (Minimum Monthly Interest). Section 2.4(f) of the Loan
Agreement hereby is amended and restated in its entirety to read as follows:

“(f) Minimum Monthly Interest. In the event the aggregate amount of interest
earned by Bank in any month on account of the Revolving Line (exclusive of any
unused line fees, or any other fees and charges hereunder) is less than the
product of (x) Eighteen Million Five Hundred Thousand Dollars ($18,500,000)
multiplied by (y) the quotient derived by dividing (a) the applicable interest
rate (as of any date of determination) determined in accordance with
Section 2.4(a)(i), by (3) 30/360 (the “Minimum Monthly Interest”), Borrowers
shall pay Bank an amount, payable on the last day of such month, in an amount
equal to the (i) Minimum Monthly Interest minus (ii) the aggregate amount of all
interest earned by Bank on account of the Revolving Line (exclusive of any
unused line fees, or any other fees and charges hereunder) in such month.
Without limiting the foregoing, in the event this Agreement is terminated,
and/or the Obligations are accelerated, before the Revolving Line Maturity Date,
Borrowers shall pay to Bank, in addition to all other amounts due under this
Agreement, all Minimum Monthly Interest payments owed through such date of
termination and/or acceleration and from such date through the Revolving Line
Maturity Date, calculated based upon the interest rate in effect at the time of
termination or acceleration.”

2.8 Section 2.4(h) (Make-Whole Premium). Section 2.4(h) hereby is added to the
Loan Agreement to read as follows:

“(h) Make-Whole Premium. The Make-Whole Premium when due pursuant to the terms
of Sections 2.1.1(c).”

2.9 Section 6.9 (Financial Covenants). Section 6.9 of the Loan Agreement hereby
is amended and restated in its entirety to read as follows:

“6.9 Financial Covenants. Maintain at all times, on a consolidated basis with
respect to Borrowers and their Subsidiaries:

(a) Adjusted Quick Ratio. An Adjusted Quick Ratio, measured monthly, of at least
[***].

(b) EBITDA. Minimum EBITDA, measured quarterly commencing with the quarter
ending December 31, 2011, of at least [***].

(c) Capital Expenditures. Maximum annual capital expenditures (for property,
plant and equipment, and instrumentation investments), measured annually
commencing with calendar year 2012, not to exceed [***] per year.”

2.10 Section 12.1 (Termination of Revolving Line Prior to Revolving Line
Maturity Date). Section 12.1 of the Loan Agreement hereby is amended and
restated in its entirety to read as follows:

“12.1 Termination of Revolving Line Prior to Revolving Line Maturity Date. The
Revolving Line may be terminated prior to the Revolving Line Maturity Date by
Borrowers (or any of them), effective two (2) Business Days after written notice
of termination is given to Bank. Notwithstanding any such termination, Bank’s
liens and security interests in the Collateral shall continue until each
Borrower fully satisfies its Obligations under the Loan Documents. If such
termination is at a Borrower’s election, or at Bank’s election due to the
occurrence and continuance of an Event of Default, Borrowers shall pay to Bank,
in addition to the payment of

 

Portions of this Exhibit were omitted, as indicated by [***], and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment under Rule 24b-2 of
the Securities Exchange Act of 1934, as amended.

 

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any other expenses or fees then-owing, a termination fee (the “Revolving Line
Termination Fee”) in an amount equal to (i) Fifty-Five Thousand Dollars
($55,000), if such termination occurs after the first anniversary of the
Effective Date but on or prior to the second anniversary of the Effective Date;
and (iii) zero Dollars ($0.00) if such termination occurs thereafter.”

2.11 Section 13 (Definitions). The following terms and their respective
definitions hereby are amended in, or added to, Section 13.1 of the Loan
Agreement:

“Adjusted Quick Ratio” means a ratio of (a) the sum of (i) Borrowers’ foreign
and domestic cash; (ii) domestic Cash Equivalents held at Bank or Bank’s
Affiliates (subject to a control agreement in form and content acceptable to
Bank); and (iii) eighty percent (80%) of Eligible Accounts as of any date of
determination, to (b) the outstanding Obligations as of such date.

“Availability Amount” is (a) the lesser of (i) the Revolving Line or
(ii) (x) the amount available under the Borrowing Base, plus (y) the Non-Formula
Amount, minus (b) the outstanding principal balance of any Revolving Advances.

“Borrowing Base” is the sum of (a) eighty percent (80%) of Eligible Accounts
(which includes domestically billed foreign Accounts receivable, provided that
such Accounts are otherwise Eligible Accounts); plus (b) the lesser of
(i) thirty percent (30%) of the value of Alphatec’s Eligible Inventory (valued
at the lower of cost or wholesale fair market value); (ii) Seven Million Dollars
($7,000,000); or (iii) thirty percent (30%) of total borrowing availability; in
each case, as determined by Bank from Borrowers’ most recent Transaction Report;
provided, however, that Bank may decrease the foregoing percentages in its good
faith business judgment based on events, conditions, contingencies, or risks
which, as determined by Bank, may adversely affect Collateral.

“Make-Whole Premium” is an amount equal to four percent (4.00%) of the
outstanding Term Loan if the prepayment is made on or before the first
anniversary of the date hereof; three percent (3.00%) of the outstanding Term
Loan if the prepayment is made on or after the first anniversary hereof but
before the second anniversary hereof; two percent (2.00%) of outstanding Term
Loan if the prepayment is made on or after the second anniversary hereof but
before the third anniversary hereof; one percent (1.00%) of the outstanding Term
Loan if the prepayment is made on or after the third anniversary hereof but
before the Term Loan Maturity Date.

“Non-Formula Amount” means Revolving Advances made without regard to the
Borrowing Base, in an aggregate amount not to exceed Two Million Five Hundred
Thousand Dollars ($2,500,000); provided that (i) the Non-Formula Amount may only
be requested one (1) time during each of the quarters ending December 31, 2011
and March 31, 2012; (ii) in each case, must be repaid within five (5) Business
Days of the respective Funding Dates thereof; and (iii) shall no longer be
available after April 5, 2012. For sake of clarity, the Non-Formula Amount may
not be repaid and reborrowed, except as expressly set forth in the preceding
sentence.

“Revolving Line” is a Revolving Advance or Revolving Advances in an amount equal
to Twenty Two Million Dollars ($22,000,000).

“Term Loan” is a loan made by Bank pursuant to the terms of Section 2.1.1
hereof.

“Term Loan Maturity Date” is October 1, 2015.

“Third Amendment Effective Date” means December 16, 2011.

 

Portions of this Exhibit were omitted, as indicated by [***], and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment under Rule 24b-2 of
the Securities Exchange Act of 1934, as amended.

 

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“Tier 1 AQR” means the period when Borrower’s Adjusted Quick Ratio is greater
than [***], but less than or equal to [***].

“Tier 2 AQR” means the period when Borrower’s Adjusted Quick Ratio is greater
than or equal to [***], but less than or equal to [***].

“Tier 3 AQR” means the period when Borrower’s Adjusted Quick Ratio is greater
than or equal to [***].

2.12 Exhibit D attached to the Loan Agreement hereby is replaced with Exhibit D
attached hereto.

2.13 Bank hereby waives the Events of Default that occurred due to Borrowers’
failure to comply with the requirements of (x) Section 6.9(a) of the Loan
Agreement as in effect prior to the Third Amendment Effective Date, solely for
the periods ended July 31, 2011, September 30, 2011 and October 31, 2011; and
(y) Section 6.9(b) of the Loan Agreement as in effect prior to the Third
Amendment Effective Date, solely for the period ended September 30, 2011.

3. Limitation of Amendments.

3.1 The amendments set forth in Section 2, above, are effective for the purposes
set forth herein and shall be limited precisely as written and shall not be
deemed to (a) be a consent to any amendment, waiver or modification of any other
term or condition of any Loan Document, or (b) otherwise prejudice any right or
remedy which Bank may now have or may have in the future under or in connection
with any Loan Document.

3.2 This Amendment shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein amended, are hereby
ratified and confirmed and shall remain in full force and effect.

4. Representations and Warranties. To induce Bank to enter into this Amendment,
each Borrower hereby represents and warrants to Bank as follows:

4.1 Immediately after giving effect to this Amendment (a) the representations
and warranties contained in the Loan Documents are true, accurate and complete
in all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;

4.2 Each Borrower has the power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Agreement, as amended by
this Amendment;

4.3 The organizational documents of each Borrower delivered to Bank on the
Effective Date remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and effect;

4.4 The execution and delivery by each Borrower of this Amendment and the
performance by each Borrower of its obligations under the Loan Agreement, as
amended by this Amendment, have been duly authorized;

4.5 The execution and delivery by each Borrower of this Amendment and the
performance by each Borrower of its obligations under the Loan Agreement, as
amended by this Amendment, do not and will not contravene (a) any law or
regulation binding on or affecting such Borrower, (b) any contractual
restriction with a

 

Portions of this Exhibit were omitted, as indicated by [***], and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment under Rule 24b-2 of
the Securities Exchange Act of 1934, as amended.

 

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Person binding on such Borrower, (c) any order, judgment or decree of any court
or other governmental or public body or authority, or subdivision thereof,
binding on such Borrower, or (d) the organizational documents of such Borrower;

4.6 The execution and delivery by each Borrower of this Amendment and the
performance by each Borrower of its obligations under the Loan Agreement, as
amended by this Amendment, do not require any order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by any governmental or public body or authority, or subdivision
thereof, binding on either Borrower, except as already has been obtained or
made; and

4.7 This Amendment has been duly executed and delivered by each Borrower and is
the binding obligation of each Borrower, enforceable against such Borrower in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar
laws of general application and equitable principles relating to or affecting
creditors’ rights.

5. Counterparts. This Amendment may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.

6. Effectiveness. This Amendment shall be deemed effective upon (i) the due
execution and delivery to Bank of this Amendment by each party hereto; (ii) the
due execution and delivery to Bank of updated Corporate Borrowing Resolutions by
each Borrower; (iii) delivery to Bank of a Warrant to Purchase Stock, in form
and content reasonably acceptable to Bank; (iv) Borrowers’ payment of all Bank
Expenses, which may be debited from any of Borrowers’ accounts with Bank; and
(v) such other and further matters as Bank may reasonably request.

[Balance of Page Intentionally Left Blank]

 

Portions of this Exhibit were omitted, as indicated by [***], and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment under Rule 24b-2 of
the Securities Exchange Act of 1934, as amended.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

 

BANK:     BORROWERS: SILICON VALLEY BANK     ALPHATEC SPINE, INC. By:  

/s/ Derek Brunelle

    By:  

/s/ Dirk Kuyper

Name:   Derek Brunelle     Name:   Dirk Kuyper Title:   Dev. Team Leader    
Title:   President and CEO       ALPHATEC HOLDINGS, INC.       By:  

/s/ Dirk Kuyper

      Name:   Dirk Kuyper       Title:   President and CEO