Exhibit 10.26

CONFIDENTIAL TREATMENT REQUESTED

ALPHATEC SPINE, INC. SALES AGENCY AGREEMENT

This Sales Agency Agreement (the “Agreement”) is between Alphatec Spine, Inc., a
California corporation (the “Company”) and Fusion Medical, Inc. (Employer
Identification Number                     ) (hereinafter referred to as “Sales
Agent”) is made as of January 4, 2007 (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, and other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the parties hereto 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 that
agree 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 conduct of its business,
including but not limited 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 or breach of 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;

CONFIDENTIAL TREATMENT REQUESTED

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CONFIDENTIAL TREATMENT REQUESTED

 

2.5. To promote the Products in strict adherence to (i) regulatory and
professional requirements, and all applicable laws, rules, guidelines 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”);
and (ii) those portions of the Company’s Code of Conduct that address
interactions with healthcare professionals (available at
http://atec.client.shareholder.com/documentdisplay.cfm?DocumentID=900);

2.6. To render reasonable assistance to the Company, at the Company’s request,
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. Take full responsibility for the actions of any Sales Agent Indemnitee (as
defined below);

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

2.11. 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.

2.12. 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 2.12 shall
constitute a material breach of this Agreement.

2.13. To deliver all Products using documented procedures for handling, storage,
packing, preservation, and delivery of such Products.

2.14. To promptly notify the Company in writing of the following: (i) any
serious regulatory action relating to the Products; (ii) any material complaints
regarding the Products or the related instrumentation; or (iii) any adverse
incidents that may be subject to FDA’s (as hereinafter defined) Medical Device
Reporting regulation.

2.15. To comply with recalls or general corrective actions initiated by the
Company.

 

CONFIDENTIAL TREATMENT REQUESTED

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CONFIDENTIAL TREATMENT REQUESTED

 

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 reasonably 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 reasonably assist
Sales Agent in promotional activities;

3.3. To provide Sales Agent with reasonable 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 any time 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 placed 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 purchase orders 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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CONFIDENTIAL TREATMENT REQUESTED

 

4.4. The Company will have the right, in its sole discretion, 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 that were generated by the Sales Agent in accordance with this
Agreement. For purposes of this Agreement, the terms “Net Sales” shall mean, for
any period, the gross amount properly set forth on a purchase order received by
the Company from the customer in connection with such customer’s purchase 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 purchase order
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,
to the extent that such items are included in the gross purchase order price
(but not including taxes assessed against the income derived from such sale);
and (vi) any such amounts included in the purchase order 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 commissions, the Product shall be deemed
to be sold when a properly executed purchase order is received by the Company
from the customer in connection with such sale, 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 to promptly submit an invoice to the Company in
connection with each sale and that all such invoices for payment shall include a
listing of all lot numbers of the Products that were sold in connection with
such invoice.

 

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CONFIDENTIAL TREATMENT REQUESTED

 

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 the Sales Agent’s outstanding
commission or invoiced to Sales Agent pursuant to Section 5.6. Upon collection
of past due accounts commissions will be re-posted to the Sales Agent.

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, upon 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.

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. 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. To the extent that a sales
quota is not included in Exhibit D, the Company shall have the right to modify
such Exhibit D to include a reasonable sales quota.

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

 

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CONFIDENTIAL TREATMENT REQUESTED

 

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 and only use
such Samples as permitted in this Agreement. Upon the termination or expiration
of this Agreement or upon the request of the Company, the Sales Agent shall
return all Samples to the Company.

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 [***]% 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 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, or upon the request
of the Company, the Sales Agent shall immediately, and at its own expense,
return all Consignment Inventory in its possession or control to the Company.

 

CONFIDENTIAL TREATMENT REQUESTED

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CONFIDENTIAL TREATMENT REQUESTED

 

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. 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 may, but is
not obligated to, 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.

8.4. 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 to the Company an unwillingness 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.

8.5. 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

 

CONFIDENTIAL TREATMENT REQUESTED

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CONFIDENTIAL TREATMENT REQUESTED

 

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.

8.6. 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; NO CONFLICTS; DUE AUTHORIZATION

10.1 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.

 

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CONFIDENTIAL TREATMENT REQUESTED

 

10.2 The Sales Agent hereby represents and warrants to the Company that neither
the execution of this Agreement by the Sales Agent nor the performance of this
Agreement by the Sales Agent or any Sales Agent Indemnitee (as defined below)
will (i) violate any order, judgment or injunction applicable to the Sales Agent
or any Sales Agent Indemnitee, or (ii) conflict with or breach any agreement to
which the Sales Agent or any Sales Agent Indemnitee are a party or by which the
Sales Agent or any Sales Agent Indemnitee are bound.

10.3 Each party represents and warrants to the other party: (i) that such party
is duly organized and validly existing under the laws of the state of its
organization and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof; (ii) such party is duly
authorized to execute and deliver this Agreement and to perform its obligations
hereunder; (iii) the person executing this Agreement on such party’s behalf has
been duly authorized to do so by all requisite corporate action; and (iv) this
Agreement is a legal and valid obligation binding upon the parties and
enforceable in accordance with its terms.

 

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

12.1. Sales Agent shall indemnify, defend and hold harmless the Company, and its
officers, directors, employees, affiliates and agents (the “Company
Indemnitees”) from all claims, damages, losses, costs and expenses (including
reasonable attorneys’ fees) (the “Liabilities”) which any Company Indemnitee may
incur to the extent that such Liabilities arise out of or result from: (i) any
representation or warranty given by Sales Agent with respect to the Products
(other than the labeling of the Products as approved by the United States Food
and Drug Administration (the “FDA”), (ii) the manufacture, use or sale of any
product which is not supplied by Company and which is sold or combined with a
Product, (iii) the breach of any representation, warranty, or covenant of the
Sales Agent contained in this Agreement; or (iv) the negligence, recklessness,
gross negligence, or willful misconduct of Sales Agent or any Sales Agent
Indemnitee.

12.2. Company shall indemnify and hold harmless Sales Agent and its officers,
directors, employees, affiliates and agents (the “Sales Agent Indemnitees”) from
all Liabilities which any Sales Agent Indemnitee may incur by reason of any
Products sold or furnished by Company which result in injury, illness or death
to the extent that such Liabilities arise out of or result from the failure of
the Products to meet the Product warranty set forth in Section 17 or the
recklessness, gross negligence, or willful misconduct of any Company Indemnitee.

 

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CONFIDENTIAL TREATMENT REQUESTED

 

12.3. The party seeking indemnification hereunder (the “Indemnified Party”)
shall: (i) give the other party (the “Indemnifying Party”) notice of the
relevant claim, (ii) cooperate with the Indemnifying Party, at the Indemnifying
Party’s expense, in the defense of such claim and (iii) give the Indemnifying
Party the right to control the defense and settlement of any such claim, except
that the Indemnifying Party shall not enter into any settlement that affects the
Indemnified Party’s rights or interest without the Indemnified Party’s prior
written approval. The Indemnified Party shall have no authority to settle any
claim on behalf of the Indemnifying Party.

 

13. CONFLICTS OF INTEREST

During the term of this Agreement, Sales Agent covenants that neither it nor any
Sales Agent Indemnitee will engage directly or indirectly in any activity which
materially conflicts with Sales Agent’s faithful performance of the services
covenants, commitments and obligations undertaken to be performed pursuant to
this Agreement.

 

14. CONFIDENTIAL INFORMATION

14.1. Sales Agent acknowledges that it will have access to certain Confidential
Information (as defined below) relating to the Company or its business,
including, but not limited to the internal organization of the Company; the
names and responsibilities of its management, supervisory and technical
employees, operating plans, Inventions (as defined below), research and
development activities, plans for acquisitions and mergers, manufacturing and/or
sales activities, technical information concerning Products and related
instrumentation, trade secrets, specifications, procedures, techniques, ideas,
methods, Patents (as defined below) and the names of customers and suppliers
(the “Confidential Information”).

14.2. Sales Agent covenants that it will hold all Confidential Information
confidential and shall only use such Confidential Information to satisfy its
obligations under this Agreement. During the term of this Agreement Sales Agent
will be permitted, however, to disclose such part of the Confidential
Information to those of its employees and/or agents as is necessary to be known
by them to assist or enable Sales Agent to perform its services and obligations
under this Agreement, provided that such employee or agent has entered into a
written agreement of confidentiality, the terms of which are no less rigorous
than the terms set forth in this Section 14.

14.3. The restrictions on use and disclosure of Confidential Information set
forth in this Section 14 shall not apply: (i) to the extent that the
Confidential Information is in the public domain without fault on the part of
Sales Agent or any third party not bound by an obligation of confidentiality; or
(ii) disclosures that are mandated by court of competent jurisdiction, provided
that Sales Agent notifies the Company prior to such disclosure and takes
reasonable actions to limit the disclosure of such Confidential Information.

 

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CONFIDENTIAL TREATMENT REQUESTED

 

14.4. Upon the Company’s written demand or upon expiration or termination of
this Agreement, Sales Agent, at its own cost and expense, will promptly return
all Confidential Information to the Company to the extent held or controlled by
Sales Agent in written, graphic or other tangible form, and all copies,
summaries, notes and other write-ups thereof made by Sales Agent, or its
employees and agents.

14.5. The obligations set forth in this Section 14 shall survive the termination
or expiration of this Agreement.

 

15. TERM AND TERMINATION

15.1. This Agreement will become effective on the Effective Date and will
continue until the [***] anniversary of the Effective Date. Upon the written
agreement of the parties, this agreement may be extended for additional one-year
terms.

15.2. This Agreement may be terminated by the Company as follows: (i) at any
time upon [***] days’ written notice from the Company to the Sales Agent;
(ii) at any time during the term of this Agreement if Sales Agent fails to meet
its sales quotas; (iii) at any time if Sales Agent engages in behavior that, in
the Company’s reasonable determination, is materially detrimental to the Company
or its business reputation, including without limitation, a determination in the
Company’s sole reasonable discretion that Prescribers have acquired too large of
a percentage of the Sales Agent’s equity securities; (iv) at any time if Sales
Agent becomes insolvent or bankrupt, or files a voluntary petition in
bankruptcy, or has filed for an involuntary petition in bankruptcy; or (v) at
any time following the end of a 15-day cure period if Sales Agent fails to cure
any breach of a covenant, commitment or obligation under this Agreement within
15 days after receipt of written notice from the Company of such breach.

15.3. This Agreement may be terminated by Sales Agent as follows: (i) at any
time if the Company becomes insolvent or bankrupt, or files a voluntary petition
in bankruptcy, or has filed for an involuntary petition in bankruptcy; or
(ii) at any time following the end of a 15-day cure period if the Company fails
to cure any breach of a covenant, commitment or obligation under this Agreement
within 15 days after receipt of written notice from the Company of such breach.

15.4. Following the termination or expiration of this Agreement: (i) Sales Agent
shall discontinue all promotion and distribution of the Products in the
Territory; (ii) Sales Agent will not be entitled to any commissions on sales of
the Products that are invoiced in the Territory after the effective date of
expiration or termination of this Agreement; (iii) the Company and Sales Agent
will undertake to reconcile all matters pertaining to commission and other
amounts, if any, owed by either party to the other up to the effective date of
expiration or termination, as promptly as practicable thereafter, and will
settle accounts between them (including without limitation the return of all
Consigned Inventory in accordance with this Agreement) in good faith not later
than 60 days after the effective date of expiration or termination of this
Agreement.

 

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CONFIDENTIAL TREATMENT REQUESTED

 

16. INTELLECTUAL PROPERTY

16.1. Except as granted in this Agreement, Sales Agent has no rights in or to
the Company’s trademarks, or any other trademarks, trade names or copyrights
owned or used by Company (the “Trademarks”) and Sales Agent agrees that it shall
not in any way infringe upon, harm, contest or otherwise impair the rights of
Company to the Trademarks. All material containing Trademarks, including all
Samples, shall be used solely in connection with promoting the sale of Products,
and distinguishing and identifying them. Sales Agent may not use any Trademarks
in its corporate title or the corporate title of any entity it controls. If it
becomes necessary, because of conflicts with trademarks or trade names used by
third parties, to develop non-conflicting marks and names for certain parts of
the Territory, Sales Agent shall so inform Company, and such new marks and names
shall be developed by Company, and shall belong to Company, subject to Sales
Agent’s license to use them pursuant to the terms of this Section 16. The
Company, on behalf of itself and its subsidiaries, hereby grants to Sales Agent
a non-exclusive, non-transferable limited license to use the Trademarks solely
in connection with its promotion, marketing and sales of the Products in the
Territory pursuant to the terms of this Agreement. Sales Agent shall have no
further rights or interest in any such Trademarks.

16.2. Sales Agent acknowledges and agrees that any patent on the Products
acquired by the Company or any of its subsidiaries and any patent applications
on the Products filed by the Company or any of its subsidiaries (the “Patents”)
are the sole and exclusive property of the Company and that throughout the term
of this Agreement and following its termination or expiration, Sales Agent will
not do anything inconsistent with such ownership, will not directly or
indirectly challenge the title of the Company or any of its subsidiaries to the
same and will not attack the validity of such Patents.

16.3. Sales Agent agrees to promptly notify the Company of any unauthorized use
of the Trademarks or infringement of the Patents by others as it comes to Sales
Agent’s attention.

16.4. Sales Agent shall submit to the Company all inventions, discoveries and
ideas concerning any modifications and improvements relating to the Products and
related instrumentation (the “Inventions”). Further, all such Inventions are,
and shall remain, the sole property of the Company. Sales Agent hereby assigns
to the Company all of its rights, title and interest to Inventions, and shall
take such actions as is necessary to vest such rights and interests in the
Company and shall require its employees and agents to take similar actions to
vest ownership of such Inventions in the Company.

 

17. LIMITED WARRANTY.

The Company warrants that, under normal use and service and when used in
accordance with specifications supplied by Company, the Products will be of
merchantable quality. If any Products do not comply with such warranty, Company
will, at its option and expense, correct, repair, or replace any defective
Products provided, that, in all such cases that sufficient evidence is produced
by Sales Agent to establish that the Products are defective. THE COMPANY

 

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CONFIDENTIAL TREATMENT REQUESTED

 

MAKES NO OTHER WARRANTIES, EXPRESSED OR IMPLIED, WITH RESPECT TO THE PRODUCTS
AND ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE ARE
EXPRESSLY AND SPECIFICALLY EXCLUDED AND DISCLAIMED.

 

18. LIMITATION OF LIABILITY.

THE COMPANY’S LIABILITY UNDER THE WARRANTY SET FORTH IN SECTION 17 OR OTHERWISE
WITH RESPECT TO THE PRODUCTS OR THEIR USE (INCLUDING LIABILITY FOR CONTRACT,
NEGLIGENCE OR OTHERWISE IN TORT) IS LIMITED EXCLUSIVELY TO THE REMEDY PROVIDED
IN SECTION 12, AND NO OTHER RIGHT OR REMEDY WILL BE AVAILABLE TO ANY PERSON. IN
NO EVENT WILL THE COMPANY BE LIABLE TO THE SALES AGENT OR ANY OTHER PERSON OR
ENTITY FOR ANY SPECIAL, INDIRECT, EXEMPLARY, PUNITIVE, INCIDENTAL OR
CONSEQUENTIAL DAMAGES TO PERSON OR PROPERTY OR LOSS OF PROFITS OF ANY PERSON
RESULTING FROM ANY CAUSE WHATSOEVER, EVEN IF COMPANY HAS BEEN ADVISED, KNEW OR
SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES OR LOSS OF PROFITS. SOME
STATES AND JURISDICTIONS OUTSIDE OF THE UNITED STATES DO NOT ALLOW A LIMITATION
OR EXCLUSION OF IMPLIED WARRANTIES, OR LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL
DAMAGES, SO THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY. SALES AGENT
ACKNOWLEDGES THAT THE ALLOCATION OF RISKS AND BENEFITS UNDER THIS AGREEMENT IS
BASED ON, AND THE AMOUNTS PAID UNDER THIS AGREEMENT WOULD BE GREATER IN THE
ABSENCE OF, THE LIMITATIONS DESCRIBED ABOVE.

 

19. MISCELLANEOUS PROVISIONS

19.1. This Agreement contains the entire agreement and understanding between the
parties respecting the subject matter hereof, and supersedes all prior and
collateral agreements and understandings, regardless of form or nature between
the parties respecting that subject matter.

19.2. Other than as explicitly set forth in this Agreement, no extension,
modification or supplement to this Agreement will be effective unless made in
writing and signed by a duly authorized officer of each party.

19.3. This Agreement will be binding upon Sales Agent, the Company and their
respective successors and permitted assigns.

19.4. Any notice required, permitted or contemplated by this Agreement must be
in writing, sent by facsimile, or nationally recognized overnight carrier,
addressed to the other party as set forth below, or to such other address as may
from time to time be substituted therefore by notice, or delivered in person to
such other party. Except as otherwise provided in this Agreement, notices sent
by facsimile will be effective on the date that written confirmation of the

 

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CONFIDENTIAL TREATMENT REQUESTED

 

transmission of the facsimile is received by the sender and notices sent by
overnight carrier shall be effective on the business day following written
confirmation of delivery of the notice to such carrier. For purposes of notices,
the addresses of the parties will be:

 

If to the Company:      Alphatec Spine, Inc.        
2051 Palomar Airport Road, Ste 100         Carlsbad, CA 92011         Attention:
Vice President, Sales         Phone: 760 431 9286         Facsimile: 760 431
1624    If to Sales Agent:      Fusion Medical, Inc.         309 North Sea Lake
Lane         Ponte Vedra Beach, FL 32082         Attn: Greg Smith         Phone:
904 509-6030         Facsmile: 904 273-9133   

19.5. Except as provided for within this Agreement, no delay or failure by
either party to enforce or take advantage of any provision of this Agreement for
non-performance or breach of any obligation hereunder by the other party, or to
exercise any right hereunder, will constitute a waiver of the right of such
party subsequently to enforce or take advantage of such provision or any other
provisions hereof (unless performance has been resumed or the breach has been
cured by the other party) or to exercise such right or any other right
hereunder, unless such waiver is in writing signed by a duly authorized officer
of the party against whom the waiver is claimed to apply, or unless the
respective period for enforcement, taking advantage or exercise, as the case may
be, has expired by the express terms of this Agreement.

19.6. This Agreement may not be assigned by Sales Agent except with the written
consent of the Company and any assignment that occurs without proper consent
shall be deemed to be null and void. For the purposes of this Section 19.6, a
merger of the Sales Agent with or into another entity, the sale of more than
fifty percent (50%) of the Sales Agent’s equity securities in one or a series of
transactions, or the sale of substantially all of the Sales Agent’s assets shall
be deemed to be an assignment. The Company may assign this Agreement by giving
written notification to the Sales Agent.

19.7. The parties agree that the breach of this Agreement may cause irreparable
harm to a party. Therefore, in addition to the other remedies specified herein,
either party may enforce its rights hereunder by all available equitable
remedies, including, without limitation, the right to obtain an injunction or
specific performance.

19.8. The Company shall not be responsible for any failure or delay in
performance of its obligations under this Agreement because of circumstances
beyond its reasonable control, including, without limitation, acts of God,
fires, floods, wars, civil disturbances, sabotage,

 

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CONFIDENTIAL TREATMENT REQUESTED

 

accidents, labor disputes (whether or not the employees’ demands are reasonable
and within the Company’s power to satisfy), governmental actions or inability to
obtain labor, material, equipment or transportation, nor shall any such failure
or delay give the Sales Agent any right to terminate this Agreement. If any
delivery or shipment of Products is delayed because of any such circumstance, it
shall be made as soon as possible.

19.9. This Agreement may be executed in multiple counterparts, each of which
will constitute an original, but all of which together will constitute one and
the same Agreement.

19.10. Notwithstanding the expiration or termination of this Agreement for any
reason, rights and obligations which by the nature should survive will remain in
full force and effect. In particular the following sections shall survive the
expiration or termination of this Agreement: Section 2.3, Section 2.4,
Section 2.6, Section 2.7, Section 7.8, Section 12, Section 14, Section 15.4,
Section 16, Section 17, Section 18, Section 19.4, Section 19.7, Section 19.10,
Section 19.11 and Section 19.12.

19.11. The validity, construction and enforcement of this Agreement and all
matters related thereto or in connection therewith all be governed by the laws
of the state of California and the venue of any action brought shall be in San
Diego County, California.

19.12. If any provision of this Agreement is rendered or declared unlawful by
reason of any existing or subsequently enacted law or by decree or order of a
court of last resort, the remaining provisions of this Agreement will continue
in full force and effect.

* * *

 

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CONFIDENTIAL TREATMENT REQUESTED

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

ALPHATEC SPINE, INC. By:  

/s/ M. Ross Simmonds

Name:   M. Ross Simmonds Title:  
Senior Vice President and Chief Operating Officer FUSION MEDICAL, INC.

/s/ Greg Smith

Name:   Greg Smith Title:   President

 

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT A

PRODUCTS

[***]

 

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT B

LIST OF SALES AGENT’S TERRITORY

[***]

 

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT C

COMMISSION RATE

[***]

 

CONFIDENTIAL TREATMENT REQUESTED

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT D

SALES QUOTAS

[***]

 

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT E

FORM OF HOSPITAL CONSIGNMENT AGREEMENT

Alphatec Spine, Inc. Inventory Consignment Agreement

This Inventory Consignment Agreement (the “Agreement”) is between Alphatec
Spine, Inc., a California corporation (the “Company”) and the medical
institution listed on the signature page below (the “Institution”) is made as of
                         , 200     (the “Effective Date”).

WHEREAS the Company and the Institution have agreed to have certain of the
Company’s inventory (including all related instrumentation) (the “Consigned
Inventory”) stocked at the Institution pursuant to the terms of this Agreement.

NOW THEREFORE, in consideration of the mutual covenants and provisions herein
contained, the adequacy of which is hereby satisfied, the parties agree as
follows:

1. Listed below is all of the Consignment Inventory:

 

Item Description

  

Quantity

                             

2. Institution will hold said Consigned Inventory in a fiduciary capacity under
a separate account titled “Consigned Inventory”.

3. Institution shall not use the Consigned Inventory for any other purpose other
than with the consent of the Company or its authorized employees or agents.

4. At any time during the term of this Agreement, the Company may request a
physical inventory of the Consigned Inventory by the Institution and the
Institution shall promptly respond to such request.

 

CONFIDENTIAL TREATMENT REQUESTED

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CONFIDENTIAL TREATMENT REQUESTED

 

5. If any Consigned Inventory is returned damaged, then the Company, to the
extent possible, will repair or refurbish the Consigned Inventory and invoice
the Institution for the cost of said repairs and handling. If the damaged
Consigned Inventory cannot be repaired, then the Company shall invoice the
Institution for 100% of the list price of such Consigned Inventory. If any
Consigned Inventory is lost, missing or stolen, then the Company shall invoice
the Institution for 100% of the list price of such Consigned Inventory. In each
of the instances set forth in this Section 5, upon receipt of such invoice,
Institution shall promptly remit payment to the Company.

6. Either party may terminate this agreement at any time by providing written
notice to the other party; provided that Section 5 and Section 7 shall survive
the termination of this Agreement.

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

*        *        *

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

COMPANY: ALPHATEC SPINE, INC. By:  

 

Name:   Title:  

INSTITUTION:   (print name of Institution)  

 

By:  

 

Name (please print): Title:  

 

CONFIDENTIAL TREATMENT REQUESTED