Exhibit
10.18


 


CONTINUING GUARANTY


 


For value received and in consideration of the
extension of credit by BANK OF THE WEST (the “Bank”) to ALPHATEC SPINE,
INC.  (the “Debtor”) or the
benefits to the undersigned derived therefrom, the undersigned (each, a “Guarantor”), guarantees and
promises to pay to the Bank any and all Indebtedness (as defined in Subsection
1 below) and agrees as follows:


 


1.                                       Indebtedness.  The
term “Indebtedness” is used herein in its most comprehensive sense and
includes any and all advances, debts, obligations, guaranties and liabilities
of the Debtor, or any one or more of them, heretofore, now, or hereafter made,
incurred or created, whether voluntary or involuntary and however arising,
whether direct or acquired by the Bank by assignment, succession, or otherwise,
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, secured or unsecured, whether on original, renewed,
extended or revised terms, and whether the Debtor may be liable individually or
jointly with others, or whether recovery upon any Indebtedness may be or
hereafter becomes barred by any statute of limitations or whether any
Indebtedness may be or hereafter becomes otherwise unenforceable.


 


2.                                       Guaranty.  The
Guarantor unconditionally agrees to pay to the Bank or its order, on demand, in
lawful money of the United States of America, an amount equal to the amount of
the Indebtedness and to otherwise perform any obligation of the Debtor
undertaken pursuant to any indebtedness.  The Guarantor agrees to (a) bear the expenses
enumerated in Subsection 19 hereof and (b) pay interest on the Indebtedness at
the rate(s) applicable thereto


 


3.                                       Right to Amend or Modify
Indebtedness and/or Collateral.  The Guarantor authorizes the Bank, at its
sole discretion, with or without notice and without affecting the Guarantor’s
liability hereunder, from time to time to: (a) change the time or manner of
payment of any Indebtedness by renewal, extension, modification, acceleration
or otherwise; (b) alter or change any provision of any Indebtedness including,
but not limited to, the rate of interest thereon, and any document, instrument
or agreement (other than this Guaranty) evidencing, guaranteeing, securing or
related to any Indebtedness; (c) release,  discharge, exonerate, substitute or add one or
more parties liable on any Indebtedness or one or more endorsers, cosigners or
guarantors for any Indebtedness; (d) obtain collateral for the payment of any
Indebtedness or any guaranty thereof; (e) release existing or after-acquired
collateral on such terms as the Bank, in its sole discretion, shall determine;
(f) apply any sums received from the Debtor, any endorser, cosigner, other
guarantor or other person liable on any Indebtedness or from the sale or collection
of collateral or its proceeds to any indebtedness whatsoever owed or to be owed
to the Bank by the Debtor in any order or amount and regardless of whether or
not such indebtedness is guaranteed hereby, is secured by collateral or is due
and payable; (g) apply any sums received from the Guarantor or from the sale of
collateral granted by the Guarantor to any Indebtedness in any order or amount
regardless of whether such Indebtedness is secured by collateral or is due and
payable


 


4.                                       Waivers.  The Guarantor
hereby unconditionally and irrevocably acknowledges and agrees to the matters
set forth below:


 


(a) Deficiency   In the event that any Indebtedness is now or
hereafter secured by a deed of trust, the Guarantor waives any defense and all
rights and benefits of those laws purporting to state that no deficiency
judgment may be recovered on certain real property purchase money obligations
(as presently contained in Section 580b of the California Code of Civil
Procedure and as it may be amended or superseded in the future) and those laws
purporting to state that no deficiency judgment may be recovered after a
trustee’s sale under a deed of trust (as presently contained in Section 580d of
the California Code of Civil Procedure and as it may be amended or superseded
in the future).  THE GUARANTOR
ACKNOWLEDGES THAT A FORECLOSURE BY A TRUSTEE’S SALE UNDER A DEED OF TRUST MAY
RESULT IN THE DESTRUCTION OF THE GUARANTOR’S SUBROGATION RIGHTS THAT MAY
OTHERWISE EXIST


 


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AND THAT A DESTRUCTION OF THOSE RIGHTS MAY
CREATE A DEFENSE TO A DEFICIENCY JUDGMENT AGAINST THE DEBTOR AND/OR THE
GUARANTOR.


 


THE GUARANTOR WAIVES ALL RIGHTS AND DEFENSES
THAT GUARANTOR MAY HAVE BECAUSE THE INDEBTEDNESS OR ANY PORTION THEREOF IS SECURED
BY REAL PROPERTY.  THIS MEANS, AMONG
OTHER THINGS,


 


(1)         BANK MAY COLLECT FROM THE GUARANTOR WITHOUT FIRST FORECLOSING ON ANY
REAL OR PERSONAL PROPERTY PLEDGED BY THE DEBTOR


 


(2)         IF THE BANK FORECLOSES ON ANY REAL PROPERTY COLLATERAL PLEDGED BY THE DEBTOR,


 


A                                      THE AMOUNT OF THE INDEBTEDNESS MAY BE REDUCED ONLY
BY THE PRICE FOR WHICH THAT COLLATERAL IS SOLD AT THE FORECLOSURE SALE, EVEN IF
THE COLLATERAL IS WORTH MORE THAN THE SALE PRICE


 


B.                                     BANK MAY COLLECT FROM THE GUARANTOR EVEN IF
THE CREDITOR, BY FORECLOSING ON THE REAL PROPERTY COLLATERAL, HAS DESTROYED ANY
RIGHT THE GUARANTOR MAY HAVE TO COLLECT FROM THE DEBTOR


 


THIS IS AN UNCONDITIONAL AND IRREVOCABLE
WAIVER OF ANY RIGHTS AND DEFENSES THE GUARANTOR MAY HAVE BECAUSE THE
INDEBTEDNESS IS SECURED BY REAL PROPERTY. 
THESE RIGHTS AND DEFENSES INCLUDE, BUT ARE NOT LIMITED TO, ANY RIGHTS
AND DEFENSES BASED ON SECTION 580a, 580b, 580D, OR 726 OF THE CALIFORNIA CODE
OF CIVIL PROCEDURE


 


(b)          Election of Remedies.  Guarantor waives any defense based upon the Guarantor’s
loss of a right against the Debtor arising from the Bank’s election of a remedy
on any Indebtedness under bankruptcy or other debtor relief laws or under any
other laws, including, but not limited to, those purporting to reduce the
Bank’s right against the Guarantor in proportion to the principal obligation of
any Indebtedness (as presently contained in Section 2809 of the California
Civil Code and as it may be amended or superseded in the future).


 


Without limiting the generality of the foregoing,
Guarantor waives all rights and defenses arising out of an election of remedies
by the Bank, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
the Guarantor’s rights of subrogation and reimbursement against the Debtor
(principal) by operation of Section 580d of the Code of Civil Procedure or
otherwise.


 


(c)           Statute of Limitations   To the maximum extent permitted by law, the
Guarantor waives the benefit of the statute of limitations affecting the
Guarantor’s liability hereunder or the enforcement hereof


 


(d)          Action Against the Debtor and Collateral (and Other Remedies)   The
Guarantor waives all right to require the Bank to: (i) proceed against the
Debtor, any endorser, cosigner, other guarantor or other person liable on any
Indebtedness; (ii) join the Debtor or any endorser, cosigner, other guarantor
or other person liable on any Indebtedness in any action or actions that may be
brought and prosecuted by the Bank solely and separately against the Guarantor
on any Indebtedness; (iii) proceed against any item or items of collateral
securing any Indebtedness or any guaranty thereof; or (iv) pursue or refrain
from


 


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pursuing any other remedy
whatsoever in the Bank’s power.


 


(e)           Debtor’s Defenses.  The Guarantor waives any defense arising by
reason of any disability or other defense of the Debtor, the Debtor’s successor
or any endorser, cosigner, other guarantor or other person liable on any
Indebtedness including, without limitation, any statute of limitation defense
that may be available to Debtor or such other person.  Until all Indebtedness has been paid in full,
even though it may be in excess of the liability incurred hereby and Bank has
no further commitment to lend or extend financial accommodations to Debtor, the
Guarantor shall not have any right of subrogation and the Guarantor waives any
benefit of and right to participate in any collateral now or hereafter held by
the Bank.  The Guarantor waives all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, notices of sale of any collateral
securing any Indebtedness or any guaranty thereof, and notice of the existence,
creation or incurring of new or additional Indebtedness.


 


(f)             Debtor’s Financial Condition.  The Guarantor hereby
recognizes, acknowledges and agrees that advances may be made from time to time
with respect to any Indebtedness without authorization from or notice to the
Guarantor even though the financial condition of the Debtor, any endorser,
cosigner, other guarantor or other person liable on any Indebtedness may have
deteriorated since the date of this Guaranty. 
The Guarantor waives all right to require the Bank to disclose any
information with respect to: any Indebtedness; the financial condition, credit
or character of the Debtor, any endorser, cosigner, other guarantor or other
person liable on any Indebtedness; any collateral securing any Indebtedness or
any guaranty thereof; or any action or inaction on the part of the Bank, the
Debtor or any endorser, cosigner, other guarantor or other person liable on any
Indebtedness.  The Guarantor hereby
assumes the responsibility for being informed of the financial condition,
credit and character of the Debtor and of all circumstances bearing upon the
risk of non-payment of any Indebtedness which diligent inquiry would reveal


 


5.                                       Right of Set-off; Grant of
Security Interest.  In addition to all liens upon and rights of
set-off against any monies, securities or other property of the Guarantor given
to the Bank by law, the Bank shall have a security interest in and a right to
set off against all monies, securities and other property of the Guarantor now
or hereafter in the possession of or on deposit with the Bank, the Bank’s
agents or any one or more of them, whether held in general or special account
or deposit or for safekeeping or otherwise; and each such security interest and
right of set-off may be exercised without demand upon or notice to the
Guarantor.  No action or Inaction by the
Bank with respect to any security interest or right of set-off shall be deemed
a waiver thereof and every, right of set-off and security interest shall
continue in full force and effect until specifically released by the Bank in
writing.  The security interest created
hereby shall secure all of the Guarantor’s obligations under this Guaranty.


 


6.                                       Right of Foreclosure.  The
Bank may foreclose, either by judicial foreclosure or by exercise of power of
sale, any deed of trust securing any Indebtedness even though such foreclosure
may destroy or diminish the Guarantor’s rights against the Debtor. The
Guarantor shall be liable to the Bank for any part of any Indebtedness remaining
unpaid after any such foreclosure whether or not such foreclosure was for fair
market value.


 


7.                                       Subordination.  Any
Indebtedness of the Debtor or any endorser, cosigner, other guarantor or other
person liable on any Indebtedness now or hereafter owed to the Guarantor is
hereby subordinated to the Indebtedness.  Such indebtedness owed to the Guarantor shall,
if the Bank so requests, be collected, enforced and received by the Guarantor
as trustee for the Bank and be paid over to the Bank on account of the
Indebtedness but without reducing or affecting in any manner the liability of
the Guarantor set forth herein.  Should
the Guarantor fail to collect the proceeds of any such indebtedness owed to it
and pay the proceeds to the Bank, the Bank, as the Guarantor’s
attorney-in-tact, may do such acts and sign such documents in the Guarantor’s
name as the Bank considers necessary to effect such collection, and Guarantor
hereby appoints Bank as Guarantor’s attorney-in-fact


 


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for such purposes.


 


8.                                       Invalid, Fraudulent or
Preferential Payments.  The Guarantor agrees that, to the extent the
Debtor or any endorser, cosigner,  other
guarantor or other person liable on any Indebtedness makes a payment or
payments to, or is credited for any payment or payments made for or on behalf
of the Debtor to the Bank, which payment or payments, or any part thereof, is
subsequently invalidated, determined to be fraudulent or preferential, set
aside or required to be repaid to any trustee, receiver, assignee or any other
party whether under any bankruptcy, state or federal law or under any common
law or equitable cause or otherwise, then, to the extent thereof, the
obligation or part thereof intended to be satisfied thereby shall be revived,
reinstated and continued in full force and effect as if such payment or
payments had not originally been made or credited.


 


9.                                Joint and Several Obligations; Independent Obligations.  If
more than one Guarantor signs this Guaranty, the obligations hereunder are
joint and several.  The Guarantor’s
obligations hereunder are independent of the obligations of the Debtor or any
endorser, cosigner, other guarantor or other person liable on any Indebtedness
and a separate action or actions may be brought and prosecuted against the
Guarantor on any Indebtedness.


 


10.                          Acknowledgment of Receipt.  Receipt
of a true copy of this Guaranty is hereby acknowledged by the Guarantor.  The Guarantor understands and agrees that
this Guaranty shall not constitute a commitment of any nature whatsoever by the
Bank to renew or hereafter extend credit to the Debtor. The Guarantor agrees
that this Guaranty shall be effective with or without notice from the Bank of
the Bank’s acceptance hereof.


 


11.                          Continuing Guaranty.  This
Guaranty is a continuing guaranty.  Revocation
of this Guaranty shall be effective only after written notice thereof is
personally received by an officer of the Bank at the originating office
indicated below or actually received at the originating office by United States
certified or registered mail, return receipt requested and postage prepaid.  Notice shall be effective at any office of
the Bank should the originating office no longer be in existence.  Revocation shall be effective at the close of
the Bank’s business day when such notice is actually received.  Any revocation shall be effective only as to
the revoking party and shall not affect that party’s obligation with respect to
any Indebtedness existing before such revocation is effective


 


12.                           Non-Reliance.  In
executing this Guaranty, the Guarantor is not relying, and has not relied, upon
any statement or representation made by the Bank, or any employee, agent or
representative of the Bank, with respect to the status, financial condition or
other matters related to the Debtor or the relationship between the Debtor and
the Bank


 


13.                           Multiple Guaranties.  If the
Guarantor has executed or does execute more than one guaranty of any
indebtedness of the Debtor to the Bank, the limits of liability thereunder and
hereunder shall be cumulative.


 


14                               Severability.  Should any one or more provisions of this
Guaranty be determined to be illegal or unenforceable, all other provisions
shall remain effective.


 


15.                            Corporate, Limited Liability or
Partnership Authority.  If the Debtor is a corporation, limited
liability partnership or company or partnership, the Bank need not inquire into
the power of the Debtor or the authority of its officers, directors, partners
or agents acting or purporting to act in its behalf and any credit granted in
reliance upon the purported exercise of such power or authority is guarantied
hereunder


 


16.                            Separate Property.  Any
married person who signs this Guaranty expressly agrees that recourse may be
had against such person’s separate property for all obligations hereunder


 


17.                               Interpretation.  If there is more than one Debtor named herein
or more than one Guarantor


 


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executing this Guaranty, the words “Debtor”
and “Guarantor” shall respectively mean all and any one or more of them.  As used in this Guaranty, neuter terms
include the masculine and feminine, and vice versa


 


18.                             Assignment.  The
Bank may, with or without notice, assign this Guaranty in whole or in part.  This Guaranty shall inure to the benefit of
the Bank, its successors and assigns, and shall bind the Guarantor and the
Guarantor’s heirs, executors, administrators, successors and assigns


 


19.                             Attorney’s Fees.  Guarantor
shall pay to Bank all costs and expenses, including, but not limited to
reasonable attorney fees, incurred by Bank in connection with the
administration, enforcement, including any bankruptcy, at trial and on appeal,
or the enforcement of any judgment or any refinancing or restructuring of the
Guarantor’s obligations under this Guaranty or any document, instrument of
agreement executed with respect to, evidencing or securing the indebtedness
hereunder


 


20.                             Governing Law. This Guaranty shall be governed by and
construed according to the internal laws of the State of California without
regard to conflict of law principles, and the Guarantor hereby submits to the
jurisdiction of the courts of the State of California.


 


21.                             Headings. The headings used herein are solely for the
purpose of identification and have no legal significance.


 


22.                           Address of the Bank.  The Bank’s originating office under this
Guaranty is:


 


San Diego Office (CBC)


1280 4th Avenue


San Diego, CA 92101


 


23.                             Indebtedness to Bank
Subsidiaries, Affiliates and Assigns: The definition of “Bank” as used herein includes BANK OF THE WEST, Its
subsidiaries, affiliates and assigns


 


24.                             Maximum Principal Liability.  THE MAXIMUM PRINCIPAL LIABILITY UNDER THIS GUARANTY IS the amount of
$14,000,000 00, plus interest at the rate(s) applicable to any Indebtedness as
set forth in Subsection 1 hereof and the expenses enumerated in Subsection 19
hereof


 


This Guaranty is made as of 1/24, 2006 (which
shall be the date of this Guaranty)


 


Executed by the undersigned Guarantor(s) as of
the date set forth above


 


	
   

  	
   

  	
  GUARANTOR(S):

  
	
  ADDRESS:

  	
   

  	
   

  
	
   

  	
   

  	
  ALPHATEC HOLDINGS, INC.

  
	
  2051
  Palomar Airport Road, Suite 100

  	
   

  	
   

  
	
  Carlsbad,
  CA 92011

  	
   

  	
  BY:

  	
  /s/
  Scott Palka

  	
   

  
	
   

  	
   

  	
  NAME:
  Scott Palka, CFO and Treasurer

  



 


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