EX-10.5 EMPLOYMENT AGREEMENT

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Exhibit 10.5

EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 7th day of June, 2005, is entered into among Ronald G. Hiscock ("Employee"), Alphatec Manufacturing, Inc., a California corporation (the "Company"), and AMI Acquisition I Corp., a Delaware corporation ("Parent").

        1.      Employment . Employee's employment with the Company shall commence on June 5, 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, initially as its President and Chief Operating Officer. It is presently contemplated that upon the recommendation of the Company's Chairman and current Chief Executive Officer and subject to the approval of the Board of Directors (the "Board"), the Employee will become the Company's President and Chief Executive Officer. The target date for Employee to become Chief Executive Officer is approximately 90 days from the date hereof, but the determination as to when and whether this will occur shall be exclusively in the discretion of the Chairman and the Board. The Employee shall perform the duties and responsibilities inherent in the positions in which he serves and such other duties and responsibilities as the Board shall from time to time reasonably assign to him. As Chief Operating Officer, Employee shall report to the Chairman. As Chief Executive Officer, Employee would report to the Board. During the term of his employment hereunder, Employee shall also serve as a member of the Board.

        (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. Employee agrees that, while he will retain his residence in the Philadelphia area, he will not be, and will act in a way that he will not be perceived as, a commuter executive.

        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 $400,000.00, less applicable payroll withholdings, commencing on the Commencement Date, payable in accordance with the Company's customary payroll practices, with salary increases, if any, to be determined by the Board 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 annual base salary 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) to customers within the United States, exclusive of sales by businesses acquired from and after the Commencement Date and exclusive of any sales for export outside the United States ("Same Store Domestic Sales") equal or exceed $50 million. In the event that Same Store Domestic Sales in FY 2005 are less than $40 million, Employee will receive no performance bonus. In the event that Same Store Domestic Sales in FY 2005 are between $40 million and $50 million, Employee will receive a percentage of his full performance bonus equal to (x) the excess of Same Store Domestic Sales over $30 million divided by (y) $10 million. Thereafter, performance bonuses shall be based upon the achievement of objectives established by the Board prior to the commencement of the fiscal year.

        4.3    IPO Bonus . Upon the closing of an underwritten initial public offering by the Company, Employee shall receive a special bonus of $300,000.00, less applicable payroll withholdings.

        4.4    Sale of the Company . Upon the Sale of the Company, Employee shall receive a special cash bonus of not less than $500,000, 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).

        4.5    Fringe Benefits . Subject to the provisions of paragraph (f) of Schedule I, 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.

        4.6    Reimbursement of Expenses . 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.

        4.7    Equity . Upon the Commencement Date, Employee shall be granted restricted shares of Series A-1 Common Stock (the "Restricted Shares") of Parent representing approximately 2% 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. Fifty 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. Twenty-five percent of such restricted shares shall vest upon an IPO, if such IPO occurs on or before December 31, 2005, provided, however , that if in the reasonable judgment of the Board any delay of the offering is attributable to market conditions or other factors not related to the Company and its operations, then such vesting date shall be extended at the discretion of the Board. 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,

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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 (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 Board of Directors made after reasonable investigation that Employee has engaged in dishonesty, gross negligence or gross misconduct that is injurious to the Company, and notice to such Employee of such written finding;

        (b)   Employee's conviction or entry of nolo contendere to any felony or crime involving moral turpitude, fraud or embezzlement of Company property; and

        (c)   a written finding by the Board of Directors that Employee has engaged in a material breach of this Agreement, and that, after written notice of the right to cure within sixty (60) days, has not cured such material breach.

        5.2    Termination by the Company Without Cause . At the election of the Company, without Cause, at any time, upon thirty (30) days written notice to Employee. Except as provided in Section 3(a) hereof, any material change in the duties or reporting responsibilities of Employee shall be treated, at the election of Employee, as a termination without cause.

        5.3    Voluntary Termination —At the election of the Employee, for any reason, upon thirty (30) days notice to the Company.

        6.      Effect of Termination .

        6.1    Termination for Cause or at the Election of Employee . In the event that Employee's employment is terminated for Cause pursuant to Section 5.1 or at the Election of the Employee pursuant to Section 5.3, the Company shall have no further obligations under this Agreement other than to pay to Employee the compensation and benefits, including payment for accrued but

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untaken vacation days, otherwise payable to him under Section 4 through the last day of his actual employment by the Company.

        6.2    Termination by the Company Without Cause . In the event that Employee's employment is terminated pursuant to Section 5.2, the Company shall continue for a period of 12 months, or 24 months if such termination following a Change in Control, ("Severance Period") to pay to Employee his annual base salary then in effect in the manner set forth in Section 4.1 and payment for accrued but untaken vacation days, and to provide benefits as set forth in section 4.5. Employee shall also continue to be eligible for bonuses pursuant to Sections 4.2, 4.3 and 4.4 hereof, despite Employee's termination, for such 12-month (or 24-month) period; provided, however , that in the event Employee is terminated pursuant to Section 5.2 after a Change in Control, the Employee's bonus pursuant to Section 4.2 for the fiscal year in which Employee is terminated shall be paid upon termination, and shall not be less than 100% of his target bonus (i.e., target bonus defined as 50% of then base salary), prorated by multiplying the target bonus by the number of full or partial weeks Employee was employed during such fiscal year divided by 52 and the Employee shall continue to vest in his restricted shares granted pursuant to section 4.7 during the Severance Period.

        7.      Non-disclosure and Non-competition .

        7.1    Proprietary Information .

        (a)   Employee agrees that all information and know-how, whether or not in writing, of a private, secret or confidential nature concerning the Company's business or financial affairs (collectively, "Proprietary Information") is and shall be the exclusive property of the Company. By way of illustration, but not limitation, Proprietary Information may include inventions, products, processes, methods, techniques, formulas, compositions, compounds, projects, developments, plans, research data, clinical data, financial data, personnel data, computer programs, and customer and supplier lists. Employee will not disclose any Proprietary Information to others outside the Company or use the same for any unauthorized purposes without written approval by an officer of the Company, either during or after his employment, unless and until such Proprietary Information has become public knowledge without fault by Employee.

        (b)   Employee agrees