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Exhibit 10.26  



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.


 
 

LICENSE AGREEMENT    
    


        This License Agreement (the "Agreement") is entered into by and between CROSS MEDICAL PRODUCTS, INC., a Delaware corporation ("Cross"), on the one hand,
and Alphatec Manufacturing, Inc. ("Licensee") on the other hand (collectively, the "Parties"), effective as of April 24, 2003 (the "Effective Date"). 


 
 

RECITALS    
    


        A.    Cross
is the owner of all rights, title, and interest in and to United States Patent Nos. 5,466,237 and 5,474,555; and 



        B.    The
Parties hereby agree to enter into this License Agreement regarding the '237 Patent and the '555 Patent. 


 
 

ARTICLE 1.
  DEFINITIONS    
    


        1.1    "'555
Patent" shall mean U.S. Patent No. 5,474,555; all patents issued from any divisions, reissues, and continuations of U.S. Patent No. 5,474,555 or from
any application on which U.S. Patent No. 5,474,555 is based or from which it claims priority; and all foreign patents or patent applications that correspond to or claim priority from U.S.
Patent No. 5,474,555 or any application on which it is based or from which it claims priority. 


        1.2    "'237
Patent" shall mean U.S. Patent No. 5,466,237; all patents issued from any divisions, reissues, and continuations of U.S. Patent No. 5,466,237 or from
any application on which U.S. Patent No. 5,466,237 is based or from which it claims priority; and all foreign patents or patent applications that correspond to or claim priority from U.S.
Patent No. 5,466,237 or any application on which it is based or from which it claims priority. 



        1.3    "Licensed
Product" shall refer to the polyaxial screw component of any spinal implant products, devices or solutions that stabilize the spine during spinal fusions
including, without limitation, the products and devices described in Exhibit A. 


 
 

ARTICLE 2.
  LICENSE GRANT    
    


        2.1    Cross
hereby grants to Licensee a non-exclusive, non-transferable (except as set forth in Article 6), right and license, under the '237
Patent and under the '555 Patent to make, have made, use, sell, offer for sale, and import the Licensed Products. 


        2.2    Licensee
shall not have any right to sublicense any of the rights granted in Article 2.1 to any third party without the prior written consent of Cross. 


 
 

ARTICLE 3.
  ROYALTY AND PAYMENTS    
    



        3.1    Licensee
agrees to pay Cross a continuing royalty, through the term of this Agreement, equal to $[***] per Licensed Product sold, imported, or
used anywhere in the world, which amount shall increase by [***]% each year. Accordingly, for the period between [***] and [***]
years from the Effective Date of this Agreement, the royalty shall be $[***] per Licensed Product, for the period 







 

between
[***] and [***] years from the Effective Date of this Agreement, the royalty shall be $[***] per Licensed Product, and
so on. 


        3.2    Licensee
agrees to make payments [***] times per year for royalties accrued in each calendar quarterly period. Payments shall be made on or
before thirty (30) days following the end of each calendar quarter. 


        3.3    Concurrently
with the payments set forth in Article 3.2, Licensee shall provide to Cross a statement of the most recent quarterly worldwide sales, imports, and
uses of the Licensed Products. Licensee shall maintain records of all worldwide sales, imports, and uses of the Licensed Products for at least [***] years from the date of such
sales, imports and uses. 


        3.4    [***],
Cross shall have the right to have an independent third party accounting firm audit, at Cross' expense, Licensee's compliance with
Articles 3.1, 3.2, and 3.3. The auditor shall maintain in confidence any prices, costs, profits, or other financial information obtained during the course of the audit. Upon completion of the audit,
the auditor shall notify Cross whether Licensee complied with Articles 3.1, 3.2, and 3.3, and, if not, what the correct royalty should have been. Licensee shall remedy any failure to pay the correct
royalty within ten business days. In the event that any such audit reveals an underpayment of [***]% or more, Licensee shall reimburse Cross for all expenses associated with
the audit. 


        3.5    To
the extent an exchange rate between a foreign currency and U.S. currency is required for any obligation hereunder, the rate shall be the exchange rate on the last
business day of the quarterly period in which the obligation is due as determined by that day's Wall Street Journal, Western Edition. 


        3.6    In
the event that any statement and payment are not made by Licensee by the date provided under this Agreement, interest shall be payable on the past due amounts at the
rate equal to the prime lending rate, as published in the Wall Street Journal, Western Edition, plus [***]%, compounded monthly,
from the date payment was due until the date of actual payment. Licensee shall also pay any collection costs incurred by Cross including, without limitation, reasonable attorneys' fees. 


        3.7    All
payments required under this Agreement shall be paid in United States currency, without deduction of taxes or any other costs of any kind, and shall be wired to the
bank account of Cross Medical Products using the following wiring instructions: 


        [***]



        Cross
may, from time to time, change these payment instructions by giving Licensee 10 days' notice pursuant to Article 7. 



        3.8    These
payments are being made as part of a compromise of a dispute and to avoid litigation regarding the '237 Patent and the '555 Patent and shall be nonrefundable,
regardless of any ruling by any court regarding the scope, validity, or enforceability of the '237 Patent or the '555 Patent. In addition, this Agreement-and the royalty required to be
paid in the future pursuant to this Agreement-shall remain in full force and effect without modification regardless of any ruling by any court regarding the scope, validity, or enforceability of the
'237 Patent or the '555 Patent. 


        3.9    Licensee
shall mark all Licensed Products with the "237 Patent and the "555 Patent numbers in compliance with the requirements of 35 U.S.C. § 287(a). 


 
 

ARTICLE 4.
  REPRESENTATIONS AND WARRANTES    
    


        4.1    Cross
represents, warrants, and covenants that (i) it has the full right and authority to enter into this Agreement and grant the rights and licenses granted
herein, and (ii) it has not previously granted and will not grant any rights or licenses in conflict with the rights and licenses granted herein. 


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        4.2    Licensee
represents, warrants, and covenants that it has not and will not take any steps to invalidate, reexamine, or otherwise challenge the '237 Patent or the '555
Patent. 


 
 

ARTICLE 5.
  TERM AND TERMINATION    
    


        5.1    This
Agreement shall remain in effect until the later of the expiration of the last remaining patent among the '237 Patent and the '555 Patent, unless terminated earlier
pursuant to this Article. 


        5.2    Cross
may terminate this Agreement upon providing 30 days' notice and an opportunity to cure if any of the following occur: 



        5.2.1    Licensee
fails to make any payment required under this Agreement within thirty days after payment is due; or 


        5.2.2    Licensee
materially breaches this Agreement. 




        5.3    Licensee
may terminate this Agreement upon providing 30 days' notice and an opportunity to cure if Cross materially breaches this Agreement. 


        5.4    Cross
may terminate this Agreement without notice if a receiver is appointed for Licensee or proceedings are commenced by, for, or against Licensee under any bankruptcy,
insolvency, or debtor's relief law. 


        5.5    A
termination of this Agreement shall not relieve Licensee of liability for any payments accrued or owing at the time of termination. 


 
 

ARTICLE 6.
  ASSIGNMENTS    
    



        6.1    The
Parties may assign any or all of their rights or delegate any or all of their duties under this Agreement only upon the prior written consent of the other party. But
such content shall not be unreasonably withheld in the event a party wishes to assign this Agreement to a purchaser of all or substantially all of its assets relating to the '237 Patent, the '555
Patent, or the Licensed Product. 


 
 

ARTICLE 7.
  NOTICES    
    



        7.1    Any
and all notices, demands or requests required or permitted to be given under this Agreement shall be given in writing and served by facsimile, hand, U.S. first class
mail, or overnight courier, addressed to: 




If to Cross:


President

Interpore Cross International, Inc.

181 Technology Drive

Irvine, California 92618

Fax: (949) 453-3225 


with
a copy to: 


Bruce
D. Kuyper, Esq.

Latham & Watkins LLP

633 West Fifth Street, Suite 4000

Los Angeles, California 90071-2007

Fax: (213) 891-8763 




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If to Licensee:


CEO

Shunshiro Yoshimi

6100 Corte del Cedro

Carlsbad, CA 92009

Fax (760) 431-1573 





        Any
notice given in the manner herein provided shall be effective on the date the notice is (i) faxed and acknowledged, (ii) personally served, or (iii) sent by
first class mail or overnight carrier, postage prepaid and properly addressed. 


 
 

ARTICLE 8.
  GENERAL PROVISIONS    
    


        8.1    The
Parties agree that this Agreement shall inure to the benefit of and be binding upon each of their respective agents, representatives, shareholders, officers,
directors, attorneys, employees, permitted assigns, subsidiaries, insurers, and predecessor or successor companies. 


        8.2    The
Parties agree that any action to enforce or interpret this Agreement must be filed in the Superior Court of Orange County or in the United States District Court for
the Central District of California, and that personal jurisdiction and venue is appropriate in those courts. This Agreement shall be deemed executed and delivered in the State of California, and shall
be construed and governed by the internal laws of the State of California, without regard to California's conflict of law provisions. 



        8.3    It
is the belief of the Parties that this Agreement does not contain any provision contrary to law. However, if any part of this Agreement shall be determined to be
illegal, invalid, or unenforceable, that part shall be replaced with an enforceable provision that is closest in intent and economic effect to the severed provision, so long as the revised Agreement
continues to fulfill the original intent of the Parties. 


        8.4    No
delay or omission by any party to exercise any right or power occurring upon any default by another party with respect to any of the terms of this Agreement shall
impair any such right or power or be construed to be a waiver thereof. A waiver by any party of any of the covenants, conditions, or agreements to be performed by another party shall not be construed
to be a waiver of any succeeding breach thereof or of any covenant, condition, or agreement herein contained. 


        8.5    This
Agreement may be executed in counterparts and transmitted by facsimile, each of which shall constitute a duplicate original. 


        8.6    This
Agreement constitutes the entire agreement between the Parties, and supersedes any and all prior agreements or understandings, written or oral, between them
relating to the subject matter of this Agreement. No other promises or agreements shall be binding upon the Parties with respect to this subject matter unless contained in or attached to this
Agreement, or separately agreed to in writing and signed by an authorized representative of each of the Parties. 


        8.7    The
undersigned represent and warrant that they have authority to execute this Agreement on behalf of the respective Parties and to carry out all obligations imposed
hereunder. The undersigned have read, understand, and agree to the terms of this Agreement and have had the opportunity to consult with counsel regarding this Agreement. 



        8.8    The
Parties acknowledge that the terms of this Agreement are contractual and are the result of negotiations between the Parties and their counsel. Each party and its
counsel cooperated in the drafting and preparation of this Agreement. This Agreement shall not be construed against any party as if that party had drafted it. 


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        8.9    In
the event any litigation is commenced to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled, in addition to any other available
remedies, to reasonable attorneys' fees and costs. 


        Cross
and Licensee hereby enter into this Agreement as of the Effective Date. 



	

 	
 	

 	
 	

CROSS MEDICAL PRODUCTS, INC.
	

DATED:	
 	

April 24, 2003
	
 	

/s/ JOSEPH A. MUSSEY
 By: Joseph A. Mussey

Its: President
	

 	
 	

 	
 	

LICENSEE
	

DATED:	
 	

April 24, 2003
	
 	

/s/ SHUNSHIRO YOSHIMI
 By: Shunshiro Yoshimi

Its: CEO






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LICENSE AGREEMENT

RECITALS

ARTICLE 1. DEFINITIONS

ARTICLE 2. LICENSE GRANT

ARTICLE 3. ROYALTY AND PAYMENTS

ARTICLE 4. REPRESENTATIONS AND WARRANTES

ARTICLE 5. TERM AND TERMINATION

ARTICLE 6. ASSIGNMENTS

ARTICLE 7. NOTICES

ARTICLE 8. GENERAL PROVISIONS