EMPLOYMENT AGREEMENT

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Exhibit 10.8

EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of the 13th day of July, 2005, is entered into among Scott V. Palka ("Employee"), Alphatec Manufacturing, Inc., a California corporation (the "Company"), and Alphatec Holdings, Inc., a Delaware corporation ("Parent").

        1.      Employment . Employee's employment with the Company shall commence on April 18, 2005 (the "Commencement Date") and shall continue upon the terms set forth in this Agreement for the period set forth in Section 2 hereof.

        2.      Term of Employment .

        (a)   Until such time as either the Employee or the Company terminates the employment as set forth herein, the term of the Employee's employment shall be three years from the Commencement Date (the "Initial Term").

        (b)   The Initial Term shall be automatically renewed as of each anniversary of the Commencement Date for an additional twelve-month period unless the Company or the Employee delivers to the other, at least 30 days prior to each anniversary date, written notice specifying that the Employee's employment will not be renewed at the end of the then-applicable term of the Agreement.

        3.      Title; Capacity; Office .

        (a)   The Company shall employ Employee, and Employee agrees to work for the Company as its Chief Financial Officer and Vice President. Employee shall perform the duties and responsibilities inherent in the position in which he serves and such other duties and responsibilities as the President and Chief Executive Officer (or, presently, the President and Chief Operating Officer) (the "CEO") shall from time to time reasonably assign to him. Employee shall report to the CEO.

        (b)   Employee's office shall be located at the Company's headquarters in Carlsbad, California, or at such other corporate headquarters approved by the Board of Directors (the "Board").

        4.      Compensation and Benefits . While employed by the Company, Employee shall be entitled to the following (it being agreed, for the avoidance of doubt, that, except as provided in Section 6.2, amounts payable on the happening of any specified event will not be payable if the Employee is not employed by the Company upon the happening of such event):

        4.1    Salary . The Company shall pay Employee an annual base salary of $300,000.00, less applicable payroll withholdings, payable in accordance with the Company's customary payroll practices, with salary increases, if any, to be determined by the CEO on an annual basis beginning January, 2006.

        4.2    Performance Bonus . Employee will be eligible to receive a cash performance bonus each fiscal year, payable within 30 days after the end of the Company's fiscal year, in an amount of up to 50% of the base salary received by Employee for such fiscal year.    In the fiscal year ended December 31, 2005 ("FY 2005"), Employee will be entitled to his full performance bonus (which will be 50% of base salary paid from the Commencement Date through December 31, 2005) if the Company's Net Sales (as that term is used in the Company's audited financial statements), exclusive of sales by businesses acquired from and after the Commencement Date and subject to the provisions of Schedule II ("Same Store Sales") equal or exceed $50 million. In the event that Same Store Sales in FY 2005 are $33 million, Employee will receive 25% of his full performance bonus. In the event that Same Store Sales in FY 2005 are $40 million, Employee will receive 50% of his full performance bonus. In the event that Same Store Sales in FY 2005 are between $33 million and $40 million, the percentage of Employee's full performance bonus shall be prorated between 25% and 50%, and in the event that Same Store Sales for FY 2005 are between

$40 million and $50 million, such percentage shall be prorated between 50% and 100%. After FY 2005, performance bonuses shall be based upon the achievement of objectives established by the CEO prior to the commencement of the fiscal year.

        4.3    Sale of the Company . Upon the Sale of the Company, Employee shall receive a special cash bonus of not less than $200,000, less applicable payroll withholdings. A "Sale of the Company" shall be deemed to occur upon the purchase by one person or a group of persons for cash or other consideration of more than 80% of the capital stock or assets of the Parent; provided that a "Sale of the Company" shall not be deemed to have occurred in the event of the transfer of stock or assets in a transaction that would not result in a Change in Control (as hereinafter defined).

        4.4    Fringe Benefits . Employee will be entitled to participate in all benefit programs that the Company establishes and makes available to its management Employees. Employee will also be entitled to take fully paid vacation in accordance with Company policy, which shall be not less than four (4) weeks per calendar year, with no forfeiture for unused vacation days.

        4.5    Reimbursement of Expenses . Subject to the Company's standard policies and procedures, as determined by the CEO or the Board from time to time, Employee shall be entitled to prompt reimbursement for reasonable expenses set forth on Schedule I incurred or paid by him in connection with, or related to the performance of, his duties, responsibilities or services under this Agreement, upon presentation by Employee of documentation, expense statements, vouchers and/or such other supporting information as the Company may reasonably request.

        4.6    Equity . Upon the Commencement Date, Employee shall be granted restricted shares of Series A-1 Common Stock (the "Restricted Shares") of Parent representing approximately 0.834% of Parent's outstanding common stock. The Company agrees that any additional investment in equity capital by non-employee investors will be made at fair market value. Upon the termination of Employee's employment, all restricted outstanding common stock shares that have not vested shall be repurchased by the Company for an aggregate of $1.00. One hundred percent of such restricted shares will vest over a 5-year period in equal amounts beginning on the first anniversary of the Commencement Date, and will vest immediately upon a Change in Control. All of such restricted shares that have not previously vested shall vest upon a Sale of the Company. For purposes of this Agreement, a "Change in Control" shall occur on the date after the Commencement Date that: (i) any one person, entity or group acquires ownership of capital stock of the Company that, together with the capital stock of the Company already held by such person, entity or group, constitutes more than 50% of the total fair market value or total voting power of the capital stock of the Company; provided, however, if any one person, entity or group is considered to own more than 50% of the total fair market value or total voting power of the capital stock of the Company, the acquisition of additional capital stock by the same person, entity or group shall not be deemed to be a Change in Control; (ii) a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or (iii) any one person, entity or group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person, entity or group) assets from the Company that have a total gross fair market value at least equal to 80% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, a transfer of assets by the Company shall not deemed to be a Change in Control if the assets are transferred to (A) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its capital stock in the Company, (B) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (C) a person, entity or group that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding capital stock of the Company, or

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(D) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person, entity or group described in subparagraph (C) above. In all respects, the definition of "Change in Control" shall be interpreted to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the provisions of Treasury Notice 2005-1, and any successor statute, regulation and guidance thereto (provided, however, that the Company does not guarantee any tax treatment of any payment or benefit in this Agreement). The restricted shares shall also be subject to the terms of the Shareholders' Agreement entered into by the Company and the holders of the other shares of Series A-1 Common Stock.

        5.      Termination of Employment Period . The Agreement shall terminate upon the occurrence of any of the following:

        5.1    Termination for Cause . At the election of the Company, for Cause. For the purposes of this Section 5.1, "Cause" for termination shall be deemed to exist upon the occurrence of any of the following:

        (a)   a written finding by the CEO made after reasonable investigatio