EXHIBIT 10.26 LICENSE AGREEMENT

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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 Agreemen