EXHIBIT 10.30 ALPHATEC SPINE, INC. SALES AGENCY AGREEMENT

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Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 406 of the Securities Act. Asterisks denote omissions.

Exhibit 10.30

ALPHATEC SPINE, INC. SALES AGENCY AGREEMENT

        This Sales Agency Agreement (the "Agreement") is between Alphatec Spine, Inc., a California corporation (the "Company") and Spinal Alliance, LLC (hereinafter referred to as "Sales Agent") is made as of October 1, 2005 (the "Effective Date").

        WHEREAS Sales Agent has established and maintained a business office staffed with professional sales personnel in the Territory (as hereinafter defined); and

        WHEREAS the Company wishes to retain Sales Agent to sell its Products (as hereinafter defined) and Sales Agent wishes to act as the Company's exclusive Sales Agent within the Territory.

        NOW THEREFORE, in consideration of the mutual covenants and provisions herein contained, the parties agree as follows:

1.    APPOINTMENT OF SALES AGENT    

        Subject to the provisions of the Agreement, the Company hereby appoints Sales Agent and Sales Agent hereby accepts appointment as the Sales Agent for the products described in Exhibit A (hereinafter the "Products") with responsibility for the geographical areas listed on Exhibit B (hereinafter the "Territory"). Sales Agent shall have the right to solicit orders for Products only from persons and entities having their places of business within the Territory and intending to use the Products so ordered within the Territory.

2.    SALES AGENTS' OBLIGATIONS    

        In addition to any and all covenants, duties and obligations of Sales Agent set forth elsewhere in this Agreement, Sales Agent agrees:

        2.1.  To use its best efforts to promote the sale of the Products throughout the Territory;

        2.2.  To use its best efforts to meet the sales quotas set forth on Exhibit D;

        2.3.  To bear all costs and liabilities relating to the cost and expense of providing and maintaining its place of business, the wages of its employees, the payment of commissions or other compensation to its agents or independent contractors, and its expenses incurred for or in connection with its performance under this Agreement;

        2.4.  To refrain from making any representations or warranties in respect of the Products, except: (i) those representations and warranties authorized in writing by the Company, in the form of brochures, memorandums, press releases, advertisements, specification sheets, or correspondences, and (ii) verbal technical assistance that Sales Agent received from the Company which was subsequently confirmed in writing by Sales Agent;

        2.5.  To promote the Products in strict adherence to regulatory and professional requirements, and all applicable laws, rules and regulations including, but not limited to, the Federal Food, Drug and Cosmetic Act of 1938, as amended, and the regulations promulgated thereunder (the "Act");

        2.6.  To render reasonable assistance to the Company, on the Company's request, and at the Company's expense, in the defense of any and all Liabilities (as defined below);

        2.7.  To refrain from disparaging the Company and its subsidiaries or its Products, or from otherwise injuring the reputation and good standing of the Company and its subsidiaries;

 

        2.8.  To not, directly or indirectly, solicit any sale of the Products or establish any branch or distribution depot for the sale of the Products outside the Territory without the prior written approval of the Company;

        2.9.  To assist the Company, on request, in ascertaining the credit standing of and in collecting receivables from any customer;

        2.10. To attend, at its own expense, all sales meetings, training sessions, seminars, trade shows and the like for which the Company reasonably requests attendance by Sales Agent; and

        2.11. To immediately notify the Company prior to any person who prescribes the Company's Products ("the "Prescriber") acquiring an equity interest in the Sales Agent, and upon such instance to provide in writing a listing, by percentage of equity interest owned, of all Prescribers that have an equity interest in the Sales Agent at the time of each disclosure. A breach of this Section 2.11 shall constitute a material breach of this Agreement.

3.    ALPHATEC'S DUTIES AND OBLIGATIONS    

        In order to assist Sales Agent in fostering the promotion and sale of the Company's Products, the Company agrees:

        3.1.  To assist Sales Agent with advertising material, sales promotion aids, displays, catalogues, literature and convention assistance;

        3.2.  To provide Sales Agent with new Product information and assist Sales Agent in promotional activities;

        3.3.  To provide Sales Agent with technical assistance, through sales seminars, meetings and training programs; and

        3.4.  To use commercially reasonable efforts to make Products available to the Sales Agent to be used by customers.

4.    QUOTATIONS, ORDERS AND PAYMENT BY CUSTOMERS    

        4.1.  Sales Agent will make quotations in respect to the sales of the Products only in accordance with the Company's then current policies and procedures and on prices established by the Company and the Company's terms and conditions of sale, including the terms of payment specified by the Company. The Sales Agent will assist the Company in obtaining the appropriate documentation needed for customers (credit reports, sales tax exemptions, etc.).

        4.2.  Sales orders generated by Sales Agent will be submitted directly to the Company by the customer. If Sales Agent receives any order for Products, it will promptly forward it to the Company. The Company will establish and promulgate the criteria for sales orders to be generated by Sales Agent and Sales Agent will use its best efforts to secure sales orders that meet the Company's criteria. The Company will have the right at anytime to reject any order in whole or in part. If the Company reasonably rejects any sales order generated by Sales Agent, then Sales Agent shall be notified and given the opportunity to inform its customer or potential customer of said rejection in an attempt to preserve Sales Agent's business goodwill. On request of the Company, Sales Agent will not supply Product to customers put on credit hold until released by the Company.

        4.3.  The Company will bill the customer for the purchased Products. Sales Agent will not bill customers for the Product unless expressly requested to do so by the Company in writing. Payments against invoices are to be made directly to the Company, without intervention by Sales Agent unless expressly requested in writing by the Company in each instance. If Sales Agent receives any payment from a customer, then Sales Agent will immediately forward the entire amount of such payment to the Company.

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        4.4.  The Company will have the right to issue credits, make discounts and allowances, and/or accept returns of the Products. Sales Agent in an effort to be competitive with the orthopedic market or to develop new customers will have the right to request the Company to issue credits, make discounts and allowances and/or accept returns of the Products. The Company shall use its sole discretion in determining whether to grant Sales Agent's request.

5.    COMMISSIONS    

        5.1.  Except as set forth in this Agreement, during the term of this Agreement the Company will pay to Sales Agent a commission at the rate specified in Exhibit C on the Company's Net Sales (as defined below) of Products in the Territory during the term of this Agreement. For purposes of this Agreement, the terms "Net Sales" shall mean, for any period, the gross amount properly recorded on an invoice by Sales Agent related to the sale to customers of Product, less deductions for: (i) normal and customary quantity and/or cash discounts, including, without limitation, those granted on account of price adjustments, rebates actually allowed and taken, administrative or other fees or reimbursements or similar payments to buying groups, pharmacy benefit management organizations, health care insurance carriers or other institutions, fees paid to other distributors and chargebacks; (ii) freight, postage, shipping, and related insurance expenses; (iii) customs or excise duties or other duties directly imposed and related to the sales making up the gross invoice amount; (iv) any rebates or similar payments made with respect to sales paid for by any governmental or regulatory authority such as, by way of illustration and not in limitation of the parties' rights hereunder, Federal or state Medicaid, Medicare or similar state program or equivalent foreign governmental program; (v) sales and other taxes and duties directly related to the sale of Products, if applicable, to the extent that such items are included in the gross invoice price (but not including taxes assessed against the income derived from such sale); and (vi) any such invoiced amounts that are not collected by the Company which are over 90 days past due and are recorded on the books of the Company as bad debt in accordance with generally accepted accounting principles. For purposes of determining Net Sales, the Product shall be deemed to be sold when properly invoiced, and a "sale" shall not include transfers or dispositions for charitable, promotional, pre-clinical, clinical, regulatory, or governmental purposes.

        5.2.  If new product lines are added to the Product list the commission rate related to such new Product shall be set forth on Exhibit C attached hereto. The parties agree and acknowledge that the Company shall have sole decision making authority in connection with establishing commission rates for product lines added to the Product list after the Effective Date.

        5.3.  The Sales Agent agrees that all invoices for payment shall include a listing of all lot numbers of the Products that were sold in connection with such invoice.

        5.4.  Commissions will be released to the Sales Agent on the 30th day after the close of the month in which the applicable sales are made, or in the event that such day is not a business day, on the next business day. Any commissions paid on outstanding accounts receivable at the close of the month that exceed the payment terms of net 90 days will be deducted from Sales Agent's commission. Upon collection of past due accounts commissions will be re-posted to the commission.

        5.5.  The Company will keep and maintain accurate, complete and current books and records relating to commissions earned by Sales Agent. Upon payment of commission to Sales Agent by the Company, the Company shall provide Sales Agent with a detailed breakdown of the customer sales used to calculate the commission as well as any credit, discount, allowance or set-off taken by the Company or applied against Sales Agent commission. Any discrepancies must be reported to the Company within 30 days of the receipt of the detailed statement. Once per calendar year, on written request from Sales Agent, the Company will permit an independent certified public accountant designated by and at the expense of Sales Agent, to audit the Company's books and records pertaining to commissions earned by Sales Agent, such audit to be conducted on the Company's premises during normal business hours.

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        5.6.  In the event that the Company has previously paid Sales Agent commissions on sales to a customer whose account is subsequently entitled to a credit, for returns or otherwise, and sufficient commission is not available to deduct the credit within the period, the Company will submit an invoice and a written explanation containing the reasons why the Company is entitled to reimbursement by Sales Agent of any portion or all of the commission previously paid to Sales Agent. Sales Agent agrees to pay all properly invoiced amounts within 30 days of receipt of said invoice.

        5.7.  The Company will have no liability whatsoever to Sales Agent for commission payments for the Company's rejection of all or part of any order.

6.    SALES OBJECTIVE    

        6.1.  For each calendar year, during the term of this Agreement, including extensions, the Company will establish sales objectives for Products to be sold by the Sales Agent within the Territory as measured in dollar volume. Such sales quotas shall be set forth on Exhibit D attached hereto.

        6.2.  If new product lines are added to the Product list an additional quota will be established for such new Product and such quota shall be set forth on Exhibit D.

7.    SAMPLES, PROMOTIONAL MATERIALS AND INSTRUMENTS    

        7.1.  From time to time the Company may deliver to Sales Agent such items as samples, models, literature, promotional materials (the "Samples") for use in promoting and selling the Products. Except for items actually purchased by Sales Agent or delivered by Sales Agent as unrestricted no-charge samples according to the Company's specific instructions, the Company will retain all right, title and interest in and to the Samples and Sales Agent will hold them in a fiduciary capacity.

        7.2.  Sales Agent will prepare and maintain accurate, complete and current books and records pertaining to the Samples that are owned by the Company, including but not limited to type and quantity of each item and disposition thereof.

        7.3.  The Company shall establish for Sales Agent a Products inventory account. Except for the Products actually purchased by Sales Agent, the Company will retain all right, title and interest in and to such Products and related instrumentation (the "Consigned Inventory"). Sales Agent will hold said Products and related instrumentation in a fiduciary capacity under a separate account titled "Consigned Inventory".

        7.4.  The Company may request a physical inventory of its property held as Consigned Inventory by Sales Agent. The Company, at its expense, may review books and records of Sales Agent as they relate to Consigned Inventory as well as to physically audit the Consigned Inventory, and Sales Agent agrees to cooperate with such review.

        7.5.  The level of Consigned Inventory for Sales Agent shall be established upon mutual agreement between the Company and Sales Agent.

        7.6.  The level of total Consigned Inventory for Sales Agent will be reviewed each quarter. Except to the extent that such Consigned Inventory has been consigned to a hospital in accordance with Section 7.7, if any Consigned Inventory is returned damaged, then the Company, to the extent possible, will repair or refurbish the Consigned Inventory and invoice Sales Agent for the cost of said repairs and handling. Except to the extent that such Consigned Inventory has been consigned to a hospital in accordance with Section 7.7, if any Consigned Inventory is lost, missing, stolen, or cannot be repaired, then the Company shall invoice Sales Agent for 100% of the list price of such Consigned Inventory

        7.7.  Sales Agent will prepare and maintain complete and accurate books and records pertaining to all Consigned Inventory, including but not limited to the type and quantity of each Product as well as the disposition thereof. Sales Agent will supply the Company with a copy of each agreement, the form of which is attached hereto as Exhibit E, where Consignment Inventory is stocked by a hospital, on

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Sales Agent's premises or other mutually acceptable place during normal business hours following ten days' prior written notice to Sales Agent.

        7.8.  Upon the termination or expiration of this Agreement, the Sales Agent shall immediately, and at its own expense, return all Consignment Inventory in its possession or control to the Company.

8.    SALES ACTIVITY BY ALPHATEC    

        8.1.  The Company reserves the right, at any time and from time to time, throughout the term of this Agreement, to use its employees to engage in selling, promoting and/or other related activities concerning the Products in the Territory in the event that the Company reasonably determines that the Sales Agent is not actively pursuing sales activities in the Territory (notwithstanding the fact that Sales Agent may be achieving its sales quotas). Any such sales by the Company's employees will not be credited to Sales Agent's account for purposes of determining the achievement of sales quotas and calculating commissions. At least thirty days prior to the commencement of any sales activity related to Products in the Territory by the Company's employees, the Company shall notify the Sales Agent of its intention to begin such activities.

        8.2.  The Company reserves the right to sell the Products within the Territory to any person or entity offering to purchase and resell the Products as private label products so long as such person or entity is not at such time a company or person to whom Sales Agent is actually selling the Products. In the event that private labeling occurs, if any, within the Territory, the Company shall modify Sales Agent's sales quotas to reflect the competitive impact of private labeling.

        8.3.  The Company also reserves the right to sell the Products within the Territory to any Company-designated national, regional, or government person or entity, and Sales Agent shall service such account within the Territory in return for the applicable commission set forth in Exhibit C. If Sales Agent declines to service any such account, the Company shall service such account itself and at its own expense, and Sales Agent shall receive no commission with respect to such account and such sales shall not be credited to the Sales Agent for purposes of determining the achievement of sales quotas.

The parties agree and acknowledge that under certain circumstances, the Company may find it necessary to establish certain customers as house accounts. Justification for designation of a customer as a house account includes, without limitation, any customer having sales, service, marketing or technical service requirements beyond the facilities and abilities of Sales Agent, or any customer that indicated an unwillingness to the Company to use the services of the Sales Agent. The Company reserves the right to deal directly with such house accounts for sale of the Products, which may include delivery of the Products within the Territory, and in such instances no commission shall be paid on sales to house accounts and such sales shall not be credited to the Sales Agent for purposes of determining the achievement of sales quotas. The Company shall pay Sales Agent such commissions as are agreed upon between the Company and the Sales Agent for the services, if any, rendered by Sales Agent at the request of the Company in connection with sales of the Products to such house accounts that are delivered within the Territory.

        8.4.  The Company reserves the right to negotiate and establish clinical investigators and/or clinical centers to conduct clinical evaluations of the Products within the Territory. The Company may find it necessary to implement certain remuneration programs to the clinical investigators/clinical centers as compensation for sales of the Products, which may include delivery of the Products within the Territory. The Company shall pay such commissions to Sales Agent as are agreed upon between the Company and the Sales Agent for services, if any, rendered by Sales Agent at the request of the Company in connection with sales of Products obtained from these clinical investigators/clinical centers located within the Territory. If no services are rendered by Sales Agent, then no commission shall be payable to Sales Agent and such sales shall not be credited to the Sales Agent for purposes of determining the achievement of sales quotas.

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        8.5.  The Company reserves the right to work with any surgeon or medical center in the design and development of new products. The Company may find it necessary to provide special remuneration programs to the surgeon inventors/medical centers as compensation for their assistance and expertise in new product development. The Company reserves the right to deal directly with such surgeon inventors/medical centers for the sale of Products. The Company shall pay to Sales Agent such commissions as are agreed upon between the Company and the Sales Agent for services, if any, rendered by Sales Agent at the request of the Company in connection with sales of the Products to such surgeons/inventors/medical centers located within the Territory. If no services are rendered by Sales Agent, then no commission shall be payable to Sales Agent and such sales shall not be credited to the Sales Agent for purposes of determining the achievement of sales quotas.

9.    RELATIONSHIP OF PARTIES    

        Sales Agent is an independent contractor having only such authority to act for the Company as is expressly set forth in this Agreement. Sales Agent is not authorized to enter into any commitment or contract of any kind on behalf of the Company. The Company will not incur any liability whatsoever to any third party by reason of Sales Agent having exceeded its authority under the appointment granted by the Company herein or by reason of any misrepresentation by Sales Agent of its relationship to the Company or of the Company's products, warranties, policies, practices or procedures. Nothing contained in this Agreement is intended to be construed as creating or implying a relationship of principal and agent or employer and employee between the Company and Sales Agent or between the Company and Sales Agent's employees or agents, or a joint venture or partnership between the Company and Sales Agent.

10.    COMPLIANCE WITH LAWS AND REGULATIONS    

        Nothing in this Agreement shall require either party to take any action which would violate any governmental regulation or law to which either of them is subject. Sales Agent shall, at its sole cost and expense, obtain in the Territory such governmental approvals, licenses or permits as may be necessary to effectuate the purposes of this Agreement, and shall comply with all federal, state and local laws, regulations and rulings of governmental bodies having jurisdiction over Sales Agent's business, in respect of the sale of the Products, including, without limitation, the Act.

11.    REPORTS    

        Sales Agent may be requested from time to time to submit to the Company written reports of Sales Agent's activities performed under this Agreement. Such reports will include a listing, by name and location, of customers contacted by Sales Agent, major opportunities being pursued, inquiries and/or problems reported by customers, physicians and/or users of the Products, Sales Agent's recommendations respecting actions to be taken by the Company to secure sales, and any other pertinent matters requested by the Company to be included in such reports, for the relevant period to which the report applies.

12.    INDEMNIFICATION &nb