Document:

EX-10.30 Supply Agreement w/Encore Medical, L.P.

 

EXHIBIT 10.30

EXECUTION COPY

SUPPLY AGREEMENT

     This Supply Agreement (along with all schedules and exhibits hereto, the “Agreement”),
is made and entered into as of the last date of execution appearing on the signature page hereto
(the “Effective Date”), by and between Encore Medical, L.P., a Delaware limited
partnership, having its principal place of business in Austin, Texas (“ENCORE”) and MAKO
Surgical Corp., a Delaware corporation, having its principal place of business in Hollywood,,
Florida (“MAKO”). ENCORE and MAKO are sometimes referred to herein individually as a
“Party” and collectively as the “Parties.”

Recitals

     WHEREAS, ENCORE has developed a certain Implant and System (each as defined below);

     WHEREAS, ENCORE and MAKO entered into that certain Letter of Intent, dated December 11, 2006
(“LOI”) in which ENCORE agreed to grant to MAKO an exclusive, worldwide license to certain
rights relating to the System when used in connection with the MAKO Haptic Guidance
SystemTM (“HGS”) (the System when used in connection with the HGS, being used
in the “MAKO Field”);

     WHEREAS, ENCORE and MAKO have concurrently entered into that certain License Agreement
(“License Agreement,” the terms of which are expressly incorporated herein by reference),
by which ENCORE licenses to MAKO the rights relating to the System so that MAKO may use, offer for
sale, sell, and import the System and ultimately make, have made, use, offer for sale, sell, and
import independently of ENCORE; and

     WHEREAS, during a Supply Period (as defined below) MAKO desires to purchase from ENCORE, and
ENCORE is willing to supply, certain Products (as defined below) for use with the HGS as either an
ENCORE or MAKO private labeled product under ENCORE’s Premarket Notification 510(k) (the
“Encore 510(k)”), under the terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and undertakings
set forth herein, and other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:

ARTICLE I

Definitions

          The terms of the recitals and preamble are incorporated herein by reference.

     1.1 An “Affiliate” of a party means an entity directly or indirectly controlling,
controlled by or under common control with that Party, where control means the ownership or
control, directly or indirectly, of more than fifty percent of all of the voting power of the
shares (or other securities or rights) entitled to vote for the election of directors or other
governing authority, as of the date of this Agreement or hereafter during the Effective Period of
this Agreement. However, the entity will be considered an Affiliate only for the time during which
such control exists.

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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     1.2 “Agreement” means this Supply Agreement, as it may be amended from time to time.

     1.3 “CGMP Regulations” means the current good manufacturing practices (“CGMP”)
promulgated by the FDA, as amended, including those currently set out in Parts 210 and 211 of Title
21 of the Code of Federal Regulations.

     1.4 “Effective Date” has the meaning given in the preamble.

     1.5 “Effective Period” has the meaning given to in Section 6.1.

     1.6 “FDA” means the United States Food and Drug Administration.

     1.7 “Implant” as used in both a singular and plural context, means the E.P.I.K.
Unicondylar Knee System and all components thereof, including the femoral component, tibia base
plate and poly inserts (manufactured according to all Specifications), and all the related medical
instruments and surgical techniques, developed by ENCORE and used for a single procedure.

     1.8 “Law” means any United States or non-United States federal, national,
supranational, state, provincial, local or similar law, ordinance, regulation, rule, code, order,
or requirement.

     1.9 “License Agreement” has the meaning given to it in the recitals.

     1.10 “Licensed IP Rights” means all patents, copyrights, proprietary rights in
technical information and similar industrial and intellectual property rights throughout the world
that pertain to the existing System design as of the Effective Date, and that are owned by ENCORE
or that ENCORE has the right to license as of the Effective Date.

     1.11 “Product,” as used in both a singular and plural context, means the System or
any one or more components thereof.

     1.12 “Product Price” regarding each component of the Product and the System as a
whole is in each case the price set forth in Schedule 1 hereto.

     1.13 “Specifications” means the description and specification for the Implant
contained in the specifications and technical documents relating to the manufacture, operation, use
and implantation of the Implant (including all prior versions and the most current version of it)
that are in the possession of ENCORE or its employees, representatives or agents on or before the
Effective Date including, without limitation, FDA design control documents DHF, DMR (design
requirement and criteria, specified requirements, V&V, design transfer), clinical data and implant
follow-ups and manufacturing specifications and know-how.

     1.14 “System” means the Implant and related instrumentation, the Specifications and
related know-how.

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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     1.15 “Supply Period” means the period between the Effective Date and the date on
which MAKO is able and ready to make and sell the System independently, under its own label and a
MAKO 510(k) (as defined below), but in any case ending the later of (a) thirty six (36) months
after the Effective Date (the “Initial Term”); and (b) at the discretion of MAKO, any one
(1) year extensions in addition to said Initial Term; provided, however, that ENCORE may terminate
the Supply Period (i) at any time after ENCORE ceases to manufacture the System based on bona fide
product safety, efficacy, or regulatory concerns (described in written detail to MAKO), in
ENCORE’s sole and absolute discretion; and (ii) with six (6) months written notice following
ENCORE’s decision to cease manufacturing the System for any other reason.

ARTICLE II

Sale and Purchase of Product

     2.1 Sale and Purchase.

     (a) During the Supply Period, (i) ENCORE, within the limitations contained in this Article,
agrees to use its reasonable best efforts to sell to MAKO such quantities of Product as MAKO may
order in accordance herewith; (ii) MAKO shall have the right to provide ENCORE with one or more
written purchase commitments for the manufacture by ENCORE of the System bearing the MAKO name and
logo; and ENCORE shall use its reasonable best efforts to assist MAKO in over-labeling of the
System to carry MAKO’s name and labeling, any such labeling being at MAKO’s reasonable expense;
and (iii) ENCORE shall, at no additional cost, maintain an adequate Implant inventory to
accommodate MAKO’s business requirements as periodically communicated to ENCORE in a written
quarterly forecast pursuant to the procedures outlined below.

     (b) Notwithstanding the foregoing (i) MAKO expressly reserves, in its sole discretion, the
right to choose the manufacturer of the System other than ENCORE at any time based on MAKO’s
production needs; (ii) MAKO shall have the rights to manufacture the System for use with the HGS
when MAKO obtains a 510(k) Notification (a “MAKO 510(k)”) using MAKO’s preferred suppliers
as a MAKO product as further detailed below; and (iii) for the term of this Agreement and all
times thereafter, ENCORE shall be prohibited from selling or supplying the System in the MAKO
Field.

     (c) During the Supply Period, ENCORE shall manufacture the System for MAKO, and MAKO shall
initially sell the System under the Encore 510(k).

     (d) In the event (i) ENCORE becomes subject to an order of a regulatory authority with
competent jurisdiction prohibiting the distribution of the Products, (ii) the results of any FDA
inspection or inspection by any other applicable regulatory body or quality systems auditing body
directly impact the marketing and/or distribution of the Products or indicate a material safety
concern with respect to the Products that could have a significant effect on the safety or
efficacy of such Products, or (iii) ENCORE receives written notice from a third party that
indicates a material concern with respect to the safety or efficacy of the Products and that is
reasonably likely to indicate a material concern with respect to the safety or efficacy of the
Products, ENCORE shall all provide MAKO immediate notice thereof and ENCORE shall have

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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no further obligation to supply the Products to MAKO, and MAKO shall immediately cease
supplying the Products to MAKO’s customers until further notice by ENCORE.

     2.2 Quantity; Forecasts.

     (a) MAKO shall have the right to purchase from ENCORE an unlimited number of complete Systems
and, for so long as MAKO has not chosen another manufacturer for any of the components of the
System, individual System components and Products from ENCORE, all of which shall be purchased
pursuant to the Product Pricing, but in no event shall ENCORE be required to supply more than the
amount of Products provided in any quarterly forecast covering the time period of any written
purchase commitment.

     (b) All Products delivered to MAKO will be F.O.B. MAKO’s destination. ENCORE will use its
reasonable best efforts to deliver Product within five (5) days of the applicable date for which
delivery of Product is properly requested in a purchase order, and assist MAKO in arranging any
desired insurance (in amounts that MAKO shall determine) and transportation, via air freight unless
otherwise specified in writing, to any destinations specified in writing from time to time by MAKO.
All customs, duties, costs, taxes, insurance premiums, and other expenses relating to such
transportation and delivery will be at MAKO’s expense.

     (c) ENCORE will include with each shipment copies of all applicable inspection records.

     2.3 Rejection of Product in Case of Nonconformity.

     (a) MAKO may reject any portion of any shipment of Product that (i) does not conform to the
description or Specifications, (ii) is adulterated or misbranded within the meaning of the Federal
Food, Drug and Cosmetic Act (the “Act”), (iii) does not comply with an order for the
Products, or (iv) does not comply with the CGMP Regulations.

     (b) In order to reject a shipment, MAKO must (i) give notice to ENCORE of MAKO’s intent to
reject the shipment within thirty (30) days of receipt (the “Inspection Period”) together with a
written indication of the reasons for such possible rejection; (ii) return such Product to ENCORE,
if so requested; and (iii) as promptly as reasonably possible thereafter, provide ENCORE with
notice of final rejection and the full basis therefore. After notice of intent to reject is given,
MAKO shall cooperate with ENCORE in determining whether rejection is necessary or justified. If no
such notice of intent to reject is timely received, MAKO shall be deemed to have accepted such
delivery of Product; provided, however, that, following the Inspection Period, in the event any
Product (i) has a latent or unknown defect, (ii) MAKO made a diligent examination of the Product,
commercially reasonable under the circumstances, within the Inspection Period and did not discover
such latent or unknown defect, and (iii) the latent or unknown defect is not caused by MAKO or any
of MAKO’s representatives, MAKO may reject such Product as though the defect were discovered during
the Inspection Period, and the parties shall follow the same procedures as herein described.

     (c) In any event, MAKO must pay for the shipment as otherwise provided herein and will be
entitled to a refund of the purchase price (together with insurance and freight charges) of
properly rejected Products at the time they are ultimately rejected, provided that if ENCORE

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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disputes the rejection, refund shall be made, if at all, at the time the dispute is finally
resolved. ENCORE shall notify MAKO as promptly as reasonably possible whether it accepts MAKO’s
basis for any rejection.

     (d) Whether or not ENCORE accepts MAKO’s basis for rejection, promptly on receipt of a notice
of rejection, ENCORE shall use its reasonable efforts, at MAKO’s request, to provide replacement
Product which shall be purchased by MAKO as provided in this Agreement.

     (e) Unless ENCORE requests the return to it of rejected Products within sixty (60) days of
receipt of MAKO’s notice of rejection, MAKO shall destroy such Products promptly and provide ENCORE
with certification of such destruction. MAKO shall, upon receipt of ENCORE’s request for return,
promptly dispatch said Products to ENCORE, at ENCORE’s cost.

     2.4 MAKO’s Obligations.

     (a) MAKO agrees to ascertain and comply with all applicable Laws and regulations and standards
of industry or professional conduct in connection with the use, distribution or promotion of the
Products, including without limitation, those applicable to product claims, labeling, approvals,
registrations and notifications. The termination or expiration of this Agreement shall not relieve
either party of its responsibility to comply in all material respects with all applicable Laws and
regulations and standards of industry.

     (b) MAKO will work diligently to establish an independent product source for Products,
including obtaining necessary FDA approvals for Products made under its authority.

     (c) MAKO shall not make any material misrepresentation about the System, the Products, or
ENCORE or otherwise disparage the System, the Products, or ENCORE. For the avoidance of doubt, the
Parties agree and recognize that factual statements made by MAKO concerning competitive advantages
of implant systems offered by MAKO other than the System, including, without limitation, the
Stelkast Unicondylar Knee System and the total modular knee system currently under development by
MAKO, shall not be deemed to have violated this Section 6.2(d).

     (d) For so long as MAKO shall sell the System under the Encore 510(k), MAKO shall not
utilize any promotional material prepared by it with respect to any of the System or the Products
without obtaining the prior written approval thereof from ENCORE, which shall not be unreasonably
delayed or withheld. If at any time MAKO shall sell the System under a MAKO 510(k), MAKO shall not
utilize any promotional materials prepared by it containing any ENCORE trade names, trademarks,
service marks, or copyrighted material without obtaining the prior written approval thereof from
ENCORE which shall not be unreasonably delayed or withheld.

     (e) For so long as MAKO shall sell the System under the Encore 510(k), MAKO shall not
make any claims related to the efficacy of the Products or the System other than those claims made
by ENCORE.

     (f) For the avoidance of any doubt, MAKO has no obligation to purchase Products from ENCORE.

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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ARTICLE III

Price and Payments

     3.1 Price. MAKO shall pay to ENCORE the Product Price for Product purchased under
this Agreement. Provided, however, the Product Price does not include the reasonable cost of
labeling Product as required by MAKO, and which shall be separately charged to MAKO.

     3.2 Method of Payment. All payments due hereunder to ENCORE shall be paid to ENCORE
in United States dollars in the United States not later than 30 days following the date of the
applicable invoice.

ARTICLE IV

Branding

     4.1 Labeling. MAKO may specify, at the time of ordering, whether Products will bear
an ENCORE label or a MAKO label. If MAKO orders Products with MAKO labels, MAKO must first have
provided to ENCORE either labels suitable for placing on ENCORE’s packaging for the Products or
packaging suitable for the Products. ENCORE shall not be required to label any product with a
MAKO label if ENCORE has a good faith belief that such MAKO label would be inconsistent with
ENCORE or MAKO’s regulatory obligations; provided, however, that ENCORE will work with MAKO in
good faith in correcting any labeling or packaging deficiency.

     4.2 Limited License. ENCORE grants to MAKO a limited, non-exclusive license to use
the mark “ENCORE.” and any other trade names, trademarks and trade dress used on or in connection
with Products purchased by MAKO from ENCORE pursuant to this Agreement, to refer to the Products
and to ENCORE in connection with the marketing, advertising, distribution, sale and use of the
Products. ENCORE further grants to MAKO the right to create, reproduce, publish, and distribute
images and renderings (including photographs and video) of the Products and packaging and any
accompanying documentation. MAKO shall follow ENCORE’s instructions at all times as to the use or
discontinuance of such trade names, trademarks and trade dress. Use of such trade names,
trademarks and trade dress shall not give MAKO a right thereto.

ARTICLE V

Regulatory Matters and Recalls

     5.1 FDA Regulatory Matters

     (a) Each party shall cooperate fully with the other patty in dealing with customer complaints
concerning the Products and shall take reasonable action to promptly resolve and follow up with
regard to such complaints.

     (b) Each of the Parties shall be responsible for complying with the Medical Device Reporting
requirements set forth in 21 C.F.R. Part 803, as may be amended from time to time (“MDR”), for the
Products. Each of the Parties shall promptly provide to the other Patty copies of such filings
and reports that could affect the safety or efficacy of the System. For the

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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avoidance of doubt, ENCORE shall be responsible for all MDR requirements for Products
manufactured by ENCORE, and MAKO shall be responsible for all MDR requirements for Products
manufactured by or for MAKO, other than those manufactured by ENCORE.

     (c) Each of the Parties shall provide such assistance and information as reasonably requested
by the other Party to fulfill such Party’s MDR obligations for the Products. Without limiting the
generality of the foregoing, the Parties shall: (1) keep and maintain a record of all customer
complaints received by them relating to the Products that are required to be maintained by them
pursuant to 21 C.F.R. § 820.198; (2) notify the other Party upon receipt of any information that
indicates a material safety concern with respect to the Products that could have a significant
effect on the safety or efficacy of the Products; and (3) otherwise cooperatively undertake
investigations, provide information and analysis, and conduct such follow-up activities as
reasonably requested in fulfillment of their obligations under this Agreement.

     (d) Each Party agrees and covenants that it will inform the other Party within forty-eight
hours of any corrective/preventive action related to the System. This notice will include the
corrective action plan to address the root cause.

     (e) Each Party agrees and covenants to provide to the other, within twenty-four hours of the
initial receipt, any report of any serious adverse experience with respect to the System. Serious
adverse experience means any experience that suggests a significant hazard, contraindication, side
effect or precaution, or any experience that is fatal or life threatening, is permanently
disabling, or requires or prolongs inpatient hospitalization.

     (f) For so long as the Supply Agreement remains in force between the Parties, any Party
receiving a communication of any kind pertaining to the System from a regulatory authority will
promptly provide to the other Party copies of any such communication. Each Party agrees and
covenants that it shall promptly notify the other Party of the receipt of any FDA Form 483 Report
on Inspectional Observations or equivalent notice from any regulatory authority which affects the
System. Such notice will include the corrective action plan to remedy the deficiency.

     5.2 Removals and Corrections (Recalls)

     (a) If either Party, in good faith, determines that a removal, correction or other field
action involving the System, or any party thereof, is warranted, such Party shall immediately
notify the other Party in writing and shall advise such other Party of the reasons underlying its
determination that a removal, correction or other field action is warranted. The Parties shall
consult with each other as to any action to be taken in regard to such removal, correction or other
field action. If, after consultations, either Party, in good faith, believes that such a removal,
correction or field action should be undertaken, the Parties shall cooperate in carrying out the
same.

     (b) MAKO shall track the Product in accordance with all applicable Laws and as reasonable
requested by ENCORE.

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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     (c) For any Products manufactured by ENCORE, ENCORE shall submit to the FDA any necessary
reports of removals, corrections or other field actions, as required under 21 C.F.R. Part 806, and
shall be responsible for drafting any notifications of removals and corrections with respect
thereto. For any Products manufactured by MAKO under a MAKO 510(k), MAKO shall submit to the FDA
any necessary reports of removals, corrections or other field actions, as required under 21 C.F.R.
Part 806, and shall be responsible for drafting any notifications of removals and corrections with
respect thereto. Each Party shall within a reasonable time thereafter provide the other Party with
a copy of all such reports as filed with the FDA, with the exception of any confidential, trade
secret or proprietary information. Each Party shall maintain records of all corrections or
removals as required by Law, and shall promptly provide the other Party with a copy of such
records, with the exception of any confidential, trade secret or proprietary information.

     (d) For any Products manufactured by ENCORE, ENCORE shall be responsible for all costs and
expenses of any removals or corrections to the extent such removal or correction is exclusively
caused by: (1) the failure of ENCORE to comply with any requirement or directive of the FDA; or (2)
the failure of the Products to comply with any material specification. For any Products
manufactured by ENCORE and sold to MAKO, MAKO shall also be responsible for all costs and expenses
of any removals or corrects to the extent such removal or correction is caused by MAKO’s failure to
comply with any requirement or directive of the FDA or any alteration of the Product by MAKO. For
any Products manufactured by MAKO under a MAKO 510(k), MAKO shall be responsible for all costs and
expenses of any removals or corrections.

ARTICLE VI

Termination, Rights And Obligations Upon Termination

     6.1 Term. This Agreement shall continue in effect until the end of the Supply Period
unless earlier terminated (the “Effective Period”).

     6.2
Termination by Mutual Agreement. This Agreement may be terminated upon mutual written agreement of the Parties.

     6.3 Termination for Default. If either Party materially defaults in the performance
of any material agreement, condition or covenant of this Agreement and such default or
noncompliance shall not have been remedied, or steps initiated to remedy the same to the other
Party’s reasonable satisfaction, within sixty (60) days (or 30 days in the case of non-payment)
after receipt by the defaulting Party of a written notice thereof from the other Party, the Party
not in default may terminate this Agreement.

     6.4 Termination of License. This Agreement will terminate automatically upon termination of the License Agreement.

     6.5 Termination by ENCORE. ENCORE may immediately terminate this
Agreement in the event of:

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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     (a) any material misrepresentation or disparagement by MAKO of the System or ENCORE as
described in Section 2.4(c), of materially adverse effect to Encore and/or the market for the
System, which cannot be cured, in Encore’s reasonable discretion;

     (b) any assignment for the benefit of creditors or offer to make an extension to creditors by
MAKO; the insolvency (as “insolvent” is defined in Section 1-201 of the Texas Uniform Commercial
Code) of MAKO; the commencement of any proceeding under any bankruptcy laws by MAKO or against
MAKO’s business; or any transfer (either voluntary or involuntary) of a substantial part of MAKO’s
property or assets other than in the ordinary course of business; or

     (c) (1) the imposition of any sanctions against MAKO within the meaning of Social Security
Act Section 1128A or any amendments thereof, (2) actions by MAKO, or any of MAKO’s employees,
agents, representatives, owners, or contractors, that result in a violation the federal Stark Law,
federal False Claims Act, federal Anti-Kickback Statute, federal Health Insurance and Portability
Act provisions, federal Civil Money Penalties Statute, or similar state laws; or (3) any
debarment, exclusion or suspension of MAKO or any of MAKO’s employees, agents, representatives,
owners, or contractors from participation in any federal or state health care program.

     6.6 Rights and Obligations on Expiration or Termination. Except to the extent
expressly provided to the contrary, any provision of this Agreement, which by its terms would
survive termination of the Agreement, shall survive. For the avoidance of doubt, provisions that
shall survive the termination of this Agreement include: Section 2.1(b)(iii) and Articles VI, VII
and VIII. Any rights of ENCORE to payments accrued through termination as well as obligations of
the Parties under firm orders for purchase and delivery of Products at the time of such
termination shall remain in effect, except that in the case of termination under Section 6.,3, the
terminating Party may elect whether obligations under firm orders will remain in effect.

ARTICLE VII

Representation and Warranties

     7.1 ENCORE represents, warrants and covenants to MAKO as to the following as of the Effective
Date:

     (a) When shipped to MAKO by ENCORE, the Products (i) will conform in all material respects to
the Specifications; (ii) will not be adulterated or misbranded within the meaning of the Act; (iii)
will be manufactured in accordance with CGMP Regulations; and (iv) that ENCORE has obtained the
Encore 510(k) allowing for the sale of Products and has the legal and regulatory right to permit
MAKO to sell the Products under the Encore 510(k). ENCORE further represents and warrants to MAKO
that of the Products which shall be shipped to MAKO (y) the Products and their sale, marketing and
use in their intended manner will not infringe any patent or copyright, or misappropriate any trade
secrets, of any third party, and (z) any branding or trade dress appearing on the Products, other
than MAKO’s marks and trade dress, will not cause infringement of any trademark, trade name,
service mark, or trade dress of any third party, or constitute unfair competition or violate any
rights of publicity or privacy when sold or advertised.

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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     (b) ENCORE has the requisite institutional knowledge and commercially adequate expertise to
meet its obligations under this Agreement. ENCORE is the entity possessing the rights to
manufacture Products and supply Products to MAKO under the terms of this Agreement.

     (c) ENCORE maintains adequate product liability insurance covering the Products as would be
acquired and maintained by a reasonable and prudent company carrying on a similar line of business,
but in no case for an amount of less than Four Million Dollars ($4,000,000) per claim and/or Five
Million Dollars ($5,000,000) in the aggregate (“Adequate Insurance”). Such Adequate
Insurance shall at all times during the Effective Period and for not less than three (3) years
thereafter include all vendors of the Products.

     (d) The undersigned signatory, executing on behalf of ENCORE, hereby represents and warrants
that (i) the execution and delivery of, and compliance with, this Agreement has been duly
authorized by ENCORE, (ii) such signatory has actual necessary legal authority to bind ENCORE to
the terms of this Agreement, and (iii) this Agreement shall, by its terms, bind ENCORE to the terms
and provisions set forth herein.

     7.2 MAKO represents, warrants and covenants to ENCORE that as of and following the Effective
Date:

     (a) MAKO shall maintain Adequate Insurance. Such Adequate Insurance shall at all times during
the Effective Period and for not less than three (3) years thereafter insure ENCORE, its Board of
Directors, officers, employees, agents and consultants as insured parties.

     (b) The undersigned signatory, executing on behalf of MAKO, hereby represents and warrants
that (i) the execution and delivery of, and compliance with, this Agreement has been duly
authorized by MAKO, (ii) such signatory has actual necessary legal authority to bind MAKO to the
terms of this Agreement, and (iii) this Agreement shall, by its terms, bind MAKO to the terms and
provisions set forth herein.

     7.3 Disclaimers.

     (a) Other than the representations, warranties and covenants expressly made in this Agreement,
neither Party, nor any of its Affiliates, make any representations or extend any warranties of any
kind, express or implied. ENCORE and MAKO each disclaim all implied warranties including, without
limitation, warranties of merchantability, and fitness for a particular purpose.

     (b) EXCEPT IN CONNECTION WITH INDEMNIFICATION FOR DAMAGES AWARDED FOR THIRD PARTY CLAIMS OF
PERSONAL INJURY PURSUANT TO THIS ARTICLE, INFRINGEMENT CLAIMS, OR AS EXPRESSLY PROVIDED ELSEWHERE
IN THIS AGREEMENT, IN NO EVENT WILL MAKO OR ENCORE BE LIABLE FOR ANY PUNITIVE, INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT UNDER ANY THEORY, INCLUDING CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY, EVEN IF EITHER PARTY IS NOTIFIED

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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OF THE POSSIBILITY, LIKELIHOOD OR CERTAINTY THAT SUCH DAMAGES WOULD BE INCURRED

ARTICLE VIII

Indemnification

     8.1 ENCORE Indemnification. ENCORE agrees to indemnify in respect of, and hold MAKO
and its officers, directors, employees and agents (the “MAKO Indemnified Patties”) harmless
against any and all damages, claims, deficiencies, losses, including taxes, and all expenses
(including, without limitation, interest, penalties, and reasonable attorneys’ and accountants’
fees and disbursements but reduced by any tax savings, benefits or offsets to which the
indemnified party shall be entitled directly or indirectly by reason thereof) (collectively
“Damages”) resulting from (a) any misrepresentation, breach of warranty, or failure to
perform any covenant or agreement on the part of ENCORE or its employees, agents or
representatives under this Agreement; (b) personal injuries and/or deaths from the use of products
manufactured, produced, sold or marketed by ENCORE or its employees, agents or representatives,
except if sold to MAKO unless such products, when delivered to MAKO, failed to meet the
Specifications, as defined in the Supply Agreement (in each such case, a “Non-Conforming
Product”); or (c) any negligent or fraudulent act or willful misconduct of ENCORE or its
employees, agents or representatives. ENCORE’s liability under this Section 8.1 shall
be reduced to the extent that any such Damages were caused by (i) the negligence or culpability or
willful misconduct of the MAKO Indemnified Patties, (ii) the failure of MAKO or its employees,
agents or representatives to perform their duties under this Agreement, or (iii) a change made to
any such products after having been manufactured by ENCORE.

     8.2 MAKO Indemnification. MAKO agrees to indemnify in respect of, and hold, ENCORE
and its officers, directors, employees and agents (the “ENCORE Indemnified Parties”) harmless
against any and all Damages resulting from (a) any misrepresentation, breach of warranty, or
failure to perform any covenant or agreement on the part of MAKO or its employees, agents or
representatives under this Agreement; (b) personal injuries and/or deaths from the use of products
manufactured, produced, sold or marketed by MAKO or its employees, agents or representatives,
except for use of Non-Conforming Product, unless MAKO knew or should have known, though reasonable
diligence, that a product causing such personal injuries and/or deaths was a Non-Conforming
Product; or (c) any negligent or fraudulent act or willful misconduct of MAKO or its employees,
agents or representatives. MAKO’s liability under this Section 8.2 shall be reduced to the extent
that any such Damages were caused by (i) the negligence or culpability or willful misconduct of the
ENCORE Indemnified Parties, or (ii) the failure of ENCORE or its employees, agents or
representatives to perform their duties under this Agreement.

 
 

			
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ARTICLE IX

Miscellaneous Provisions

     9.1 Confidentiality of Agreement. The terms, but not the existence, of this Agreement
will be treated as Proprietary Information (as such term is defined in the NDA) by the Parties, and
neither Party may disclose such terms to any third party without the prior written consent of’ the
other Party, except as follows:

     (a) MAKO may represent to third parties that it is possesses a commitment to supply
Products as provided by this Agreement.

     (b) Each Party may (i) disclose this Agreement and its terms to potential acquirers of,
investors in or lenders to such Party (including any representatives of the Parties in such
transaction), or disclosures reasonably necessary in connection with the divestiture,
merger, transfer or sale of all or any portion of a Party’s respective businesses, but only
if such disclosure is made pursuant to a written confidentiality agreement binding upon such
potential acquirer, investor, lender or other party, which obligates such party not to
disclose and to take reasonable precautions against unauthorized disclosure of the Agreement
and its terms; (ii) disclose this Agreement and its terms in any arbitration, mediation or
other official dispute resolution procedure pursuant to a written confidentiality agreement
binding upon the parties, which obligates such parties not to disclose and to take
reasonable precautions against unauthorized disclosure of the Agreement and its terms; (iii)
disclose this Agreement and its terms to its professional advisors who are under an ethical
obligation of confidentiality in order to comply with, or determine compliance with, any
law, rule, regulation, or accounting or similar requirement; and (iv) disclose this
Agreement and its terms, in response to a judicial or governmental request, requirement or
order, or as required by law, including any securities laws, on the condition that such
Party provides the other Party with sufficient prior notice in order to contest such
request, requirement or order or seek protective measures.

     9.2 Assignment. Neither Party may assign or delegate its obligations under this
Agreement absent the written consent of the other Party, except that no such consent will be
required for succession by merger, consolidation, sale of all or substantially all of the assets,
or change of control, but only if the assignee, successor or surviving entity agrees to be bound
in writing to all of its terms and conditions. This Agreement will be binding on successors in
interest and permitted assigns. An assignment other than as expressly permitted by this Section
9.2 will be void and shall constitute a breach of this Agreement.

     9.3 Notices. All notices and other communications which are required or which may be
given under the provisions of this Agreement will be in writing and may be delivered (a)
personally, (b) expedited delivery service with proof of delivery or (c) sent by United States
Mail, postage prepaid, registered or certified, return receipt requested, addressed as follows:

	 	 	 	 	 
	 

	 	If to ENCORE:
	 	Encore Medical, L.P.
	 

	 	 	 	9800 Metric Boulevard

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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	 	 	 	Austin, Texas 78758
	 

	 	 	 	Attention: General Counsel
	 
	 	 	 	 
	 

	 	If to MAKO:
	 	MAKO Surgical Corp.
	 

	 	 	 	2555 Davie Road
	 

	 	 	 	Ft. Lauderdale, FL 33319
	 

	 	 	 	Attention: General Counsel

or to such other address designated by the Parties as provided above. Any such notice will be
deemed to have been given either at the time of personal delivery or, in the case of delivery
service or mail, as of the date of fast attempted delivery at the address and in the manner
provided herein.

     9.4 Choice of Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, EXCLUSIVE OF ITS CONFLICTS OF LAW PRINCIPLES.

     9.5 Captions. The captions, headings, and arrangements used in this Agreement are
for convenience only and do not in any way affect, limit, amplify, or modify its terms and
provisions.

     9.6 No Strict Construction. This Agreement is the result of substantial negotiations
among the Parties and their counsel and has been prepared by their joint efforts. Accordingly,
the fact that counsel to one Party or another may have drafted this Agreement or any portion of
this Agreement is immaterial and this Agreement will not be strictly construed against any Party.

     9.7 Severability and Reformation. Wherever possible, each provision of this
Agreement will be interpreted in such manner as to be effective. If any provision of this
Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provision will be fully severable and this Agreement will
be construed and enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this Agreement will remain in
full force and effect. Furthermore, in lieu of each such illegal, invalid, or unenforceable
provision, there will be added automatically as a part of this Agreement a provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid,
and enforceable; provided, however, that, if any such change will materially diminish the
practical realization of the benefits intended to be conferred to any Party to this Agreement,
such Party may terminate this Agreement upon written notice to each other Party within 30 days
after learning such change has been effected.

     9.8 Consents; Waivers. Any consent or approval required as a condition to an action
under this Agreement will be effective only (a) if in writing and signed by the Party whose consent
is sought, (b) with respect to the specific matter made the subject to such consent or approval
(and no other matter), and (c) for the specific instance(s) expressly set forth in such consent or
approval (and no earlier or subsequent instances). Any Party may waive any condition, covenant,
term, or provision of this Agreement, but any such waiver will be effective

 
 

			
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only (a) if in writing and signed by the Party sought to be bound by such waiver, (b) with
respect to the specific condition, covenant, term, or provision expressly made the subject to such
waiver (and no other condition, covenant, term, or provision), and (c) for the specific stance(s)
expressly set forth in such waiver (and no earlier or subsequent instances). Without limiting the
foregoing sentence, none of the following will constitute a waiver of the rights of a Party to this
Agreement to demand exact compliance with the conditions, covenants, terms, and provisions of this
Agreement: (a) a failure of such Party to exercise any power reserved to it in this Agreement; (b)
a failure of such Party to insist upon compliance by any other Party to this Agreement with any
condition, covenant, term, or provision in this Agreement; (c) a delay, forbearance, or omission of
such Party to exercise any power; or (d) any custom or practice of the Parties at variance with the
terms of this Agreement. The consent or approval of any Party to this Agreement with respect to
the act of any other Party to this Agreement will not be deemed to waive or render unnecessary
consent to or approval of any subsequent similar act. Subsequent acceptance by a Party to this
Agreement of any performance due to it under this Agreement will not be deemed to be a waiver by
such first Party of any preceding breach by any other Party of any terms, provisions, covenants, or
conditions of this Agreement. No act or conduct of or by MAKO under this Agreement, including any
payment of a royalty, shall be evidence, or deemed an admission or suggestion, that any product
manufactured, licensed, or distributed by MAKO infringes the Licensed IP Rights or any other
intellectual property right.

     9.9 Force Majeure. Neither Party will be in default or otherwise liable for any
delay in or failure of its performance under this Agreement if such delay or failure arises by any
reason beyond its reasonable control, including any act of God, any acts of the common enemy, the
elements, earthquakes, floods, fires, epidemics, riots, failures or delay in transportation or
communications, or any act or failure to act by the other Party or such other Party’s employees,
agents, or independent contractors or representatives; provided, however, that lack of funds will
not be deemed to be a reason beyond a Party’s reasonable control. The Parties will promptly
inform and consult with each other as to any of the above causes that in their judgment may or
could be the cause of a delay in the performance of this Agreement.

     9.10 Legal Costs. Each of the Parties will be responsible for its own expenses,
including legal and accounting fees of advisors, incurred in connection with the negotiation and
preparation of this Agreement If any action is brought to enforce or interpret the terms of this
Agreement (including through arbitration), the prevailing Party will be entitled to reasonable
legal fees, costs, and disbursements in addition to any other relief to which such Party may be
entitled.

     9.11 Dispute Resolution.

     (a) ENCORE and MAKO will attempt to settle any claim or controversy arising out of
this Agreement through consultation and negotiation in good faith and in a spirit of mutual
cooperation.

     (b) In the event that, after reasonable consultation, but within 30 days, the Parties
are unable to reach agreement, any claim or controversy shall be settled by arbitration
administered by the American Arbitration Association under its then current Commercial
Arbitration Rules in New York, New York, before a single arbitrator and

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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judgment on any award rendered by or finding of the arbitrator may be entered in any
court having jurisdiction thereof. The arbitrator shall have the authority to award actual
money damages (with interest on unpaid amounts from the date due), temporary injunctive
relief, and reasonable attorney’s fees and expenses, but the arbitrator shall not have the
authority to award exemplary or punitive damages, and the Parties expressly waive any
claimed right to such damages. The costs of arbitration shall be borne by the Parties in
accordance with the award of the arbitrator. If a Party fails to proceed with arbitration,
unsuccessfully challenges the arbitration award, or fails to comply with the arbitration
award, the other Party is entitled to costs, including reasonable attorney’s fees, for
having to compel arbitration or defend or enforce the award. Except as otherwise required
by law, the Parties agree to maintain and agree to cause the arbitrator to maintain as
Proprietary Information (as such term is defined in that certain mutual Nondisclosure
Agreement, by and between the Parties, dated December 11, 2006), all information, documents
and other data of any kind or nature whatsoever obtained during the arbitration process,
including the fact that such arbitration is being undertaken and the final award of the
arbitrator.

     9.12 Integration. This Agreement sets forth the entire agreement and understanding
between the Parties as to the subject matter hereof and merges all prior discussions between them
including, without limitation, the LOI; provided, however, that for the avoidance of doubt, this
Agreement shall not affect the Parties’ obligations under the License Agreement. Neither of the
Parties shall be bound by any warranties, understandings or representations with respect to such
subject matter other than as expressly provided herein or in a writing signed with or subsequent
to execution hereof by an authorized representative of the Party to be bound thereby.

     9.13 No Partnership. Neither this Agreement, nor any terms and conditions contained
herein, will be deemed or construed to create a partnership, joint venture, other form of business
enterprise or association or cooperative arrangement, agency relationship, or franchise
relationship between the Parties or otherwise to create any liability for either Party whatsoever
with respect to the indebtedness, liabilities, and obligations of the other Party.

     9.14 Counterparts. This Agreement may be executed in any number of counterparts and
will be effective when each Party to this Agreement has executed at least one counterpart, with
the same effect as if all signing Parties had signed the same document. All counterparts will be
construed together and evidence only one agreement, which, notwithstanding the actual date of
execution of any counterpart, will be deemed to be dated the day and year first written above. In
making proof of this Agreement, it will not be necessary to account for a counterpart executed by
any Party other than the Party against whom enforcement is sought or to account for more than one
counterpart executed by the Party against whom enforcement is sought.

     9.15 Facsimile Signatures. The manual signature of any Party to this Agreement that
is transmitted to any other Party or counsel to any other Party by facsimile will be deemed for
all purposes to be an original signature.

     9.16 BASIS OF BARGAIN. EACH PARTY RECOGNIZES AND AGREES THAT THE WARRANTY
DISCLAIMERS AND LIABILITY AND REMEDY LIMITATIONS IN THIS AGREEMENT ARE MATERIAL, BARGAINED FOR
BASES OF THIS AGREEMENT

 
 

			
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AND THAT THEY HAVE BEEN TAKEN INTO ACCOUNT AND REFLECTED IN DETERMINING THE CONSIDERATION TO
BE GIVEN BY EACH PARTY UNDER THIS AGREEMENT AND IN THE DECISION BY EACH PARTY TO ENTER INTO THIS
AGREEMENT.

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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     IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed in
duplicate originals by its duly authorized representatives on the respective dates entered below.

	 	 	 	 	 	 	 
	 	 	ENCORE MEDICAL,
L.P.

By: Encore Medical GP, Inc., its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Harry L. Zimmerman	 	 
	 

	 	 	 	 

Harry L. Zimmerman
	 	 
	 

	 	 	 	Executive Vice-President—General Counsel	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:
	 	2/28/07	 	 
	 
	 	 	 	 	 	 
	 	 	MAKO SURGICAL CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Maurice R. Ferré	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Maurice R. Ferré, MD	 	 
	 

	 	 	 	President & Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:
	 	 2/28/07	 	 

 
 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***].
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Schedule 1

     E.P.I.K.TM Component Price Breakdown

Price per component for 0 to [***] implants per twelve month period

	 	 	 	 	 	 	 
	Onlay

	 	 	 	Inlay	 	 
	Femur

	 	$[***]
	 	Femur
	 	$[***]
	Tibia Baseplate

	 	$[***]
	 	Tibia Inlay
	 	$[***]
	Tibia Insert

	 	$[***]	 	 	 	 
	Total

	 	$[***]
	 	Total
	 	$[***]
	 
	 	 	 	 	 	 
	Price per component for [***] plus implants per twelve month period
	 
	 	 	 	 	 	 
	Onlay

	 	 	 	Inlay	 	 
	Femur

	 	$[***]
	 	Femur
	 	$[***]
	Tibia Baseplate

	 	$[***]
	 	Tibia Inlay
	 	$[***]
	Tibia Insert

	 	$[***]	 	 	 	 
	Total

	 	$[***]
	 	Total
	 	$[***]

A complete set of System instrumentation shall be sold by ENCORE to MAKO at a fixed price of
$[***].

ENCORE shall have the right to change the prices in this Schedule 1 at any time following the
first anniversary of this Agreement.

 
 

			
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A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

Page 18EX-10.31 License Agreement w/Encore Medical, L.P.

 

EXHIBIT 10.31

EXECUTION COPY

LICENSE AGREEMENT

     This License Agreement (along with all schedules and exhibits hereto, the “Agreement”)
is made and entered into as of the last date of execution appearing on the signature page hereto
(the “Effective Date”), by and between Encore Medical, L.P., a Delaware limited
partnership, having its principal place of business in Austin, Texas (“ENCORE”) and MAKO
Surgical Corp., a Delaware corporation, having its principal place of business in Ft. Lauderdale,
Florida (“MAKO”). ENCORE and MAKO are sometimes referred to herein individually as a
“Party” and collectively as the “Parties.”

Recitals

     WHEREAS, ENCORE has developed a certain Implant and System (each as defined below) to which
MAKO seeks certain rights;

     WHEREAS, ENCORE and MAKO entered into (a) that certain Letter of Intent, dated December 11,
2006 (“LOI”) in which ENCORE agreed to grant to MAKO an exclusive, worldwide license to
certain rights relating to the System when used in connection with the HGS (defined herein) (the
“MAKO Field”), and (b) that certain mutual Nondisclosure Agreement, by and between the
Parties, dated December 11, 2006 (the “NDA,” attached hereto as Exhibit A and
incorporated herein by reference);

     WHEREAS, MAKO desires to be the exclusive licensee of the rights relating to the System in the
MAKO Field and ENCORE is willing to license MAKO those rights under the terms and conditions of
this Agreement;

     WHEREAS, ENCORE and MAKO have concurrently entered into that certain Supply Agreement
(“Supply Agreement”), by which ENCORE agrees to supply to MAKO commercial quantities of the
System for resale during the Transition Period (as defined below) for use with the MAKO Haptic
Guidance SystemTM (“HGS”) as either an ENCORE or MAKO private labeled product
under ENCORE’s Premarket Notification 510(k) (the “Encore 510(k)”), under the terms and
conditions of the Supply Agreement;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and undertakings
set forth herein, and other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

ARTICLE I.

Definitions

     The terms of the recitals and preamble are incorporated herein by reference.

     1.1 An “Affiliate” of a Party means an entity directly or indirectly Controlling,
Controlled by or under common Control with that Party, for the time during which such Control
exists.

 

			
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     1.2 “Control” means the ownership or control, directly or indirectly, of more than
fifty percent of all of the voting power of the shares (or other securities or rights) entitled to
vote for the election of directors or other governing authority, as of the date of this Agreement
or hereafter during the Effective Period of this Agreement.

     1.3 “Effective Date” has the meaning given in the preamble.

     1.4 “Effective Period” has the meaning given to in Section 8 1.

     1.5 “Implant” as used in both a singular and plural context, means the E.P.I.K.
Unicondylar Knee System and all components thereof, including the femoral component, tibia base
plate and poly inserts developed by ENCORE and used for a single procedure.

     1.6 “Licensed Implant Methods” means surgical techniques and processes for implanting
the Implant and using associated medical instruments and equipment.

     1.7 “Licensed Technical Information” means specifications and technical documents
relating to the manufacture, operation, use and implantation of the Implant (including all prior
versions and the most current version of it) that are in the possession of ENCORE or its employees,
representatives or agents on or before the Effective Date including, without limitation, FDA design
control documents DHF, DMR (design requirement and criteria, specified requirements, V&V, design
transfer), clinical data and implant follow-ups and manufacturing specifications and know-how.

     1.8 “Licensed IP Rights” means all patents, copyrights, proprietary rights in the
Licensed Technical Information and similar industrial and intellectual property rights throughout
the world that pertain to the existing System design as of the Effective Date and that are owned by
ENCORE or that ENCORE has the right to license as of the Effective Date.

     1.9 “Licensed Product” shall mean the System or any 510(k) unicondylar knee system
developed by MAKO under the License, or any part thereof.

     1.10 “Net Sales” shall mean the amount invoiced on sales (regardless of uncollectible
accounts) of Licensed Product and/or services using Licensed Processes after deducting, if not
already deducted in the amount invoiced (a) trade and/or quantity discounts; (b) credits on
returns, recalls, allowances; (c) commissions paid (but not in excess of amounts that are usual and
customary in medical device industry); (d) taxes, excises and other governmental charges, and (d)
outbound transportation, shipping, and handling costs.

     1.11 “System” means the Implant and related instrumentation, the Licensed Technical
Information and related know-how.

     1.12 “Transition Period” means the period outlined in Section 3.1.

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
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ARTICLE II.

Grant of License

     2.1 Grant of License to MAKO. Subject to all of the terms and conditions of this
Agreement, ENCORE grants to MAKO a non-transferable (except as expressly permitted under Section
9.1), exclusive (even as to ENCORE), royalty-bearing, non-terminable and irrevocable (except as
expressly provided in this Agreement) worldwide license to certain rights relating to the Licensed
IP Rights in connection with the HGS,

     (a) to make, have made, use, offer for sale, sell, and import the System in connection with
the use of the HGS as either an ENCORE or MAKO private labeled product under the Encore 510(k),
under the terms and conditions of this Agreement including, without limitation, the implant
instruments, surgical techniques, production knowledge and know-how and access to production
processes (until such time as MAKO has developed the capabilities to produce the System
independently); provided, however, that MAKO shall not make or have made the System under the
Encore 510(k);

     (b) to use, disclose, reproduce, distribute, display, perform, and prepare derivatives
of Licensed Technical Information in connection with developing and manufacturing the
System, and to authorize others to do so on behalf of MAKO or its Affiliates for the System
to be sold by MAKO or its Affiliates;

     (c) to use, disclose, reproduce, distribute, display, perform, and prepare derivatives
of and improvements to the Licensed Technical Information in connection with selling,
distributing, implanting, testing and using the System, and to authorize others to do so;
and

     (d) to use the Licensed Implant Methods and to authorize others to use the Licensed
Implant Methods, in connection with the System.

Certain of the Licensed Technical Information and the Licensed Implant Methods are proprietary and
confidential information of ENCORE. The rights granted MAKO in Sections 2.1(b), (c) and (d),
above, shall be used solely in exercising MAKO’s rights under Section 2.1(a) and MAKO shall
continue to protect ENCORE’s proprietary and confidential information in accordance with the NDA,
which shall apply to all Licensed Technical Information and Licensed Implant Methods.

     2.2 Sublicensing. The license granted to MAKO under Section 2.1 does not include any
right of MAKO to grant sublicenses without the consent of ENCORE, except that, without limiting the
scope of Section 2.1, MAKO may grant limited, non-transferable sublicenses, under the Licensed IP
Rights: (i) to its vendors or manufacturers for the sole and limited purposes of having components
made, and/or the System assembled on behalf of MAKO; (ii) to its sales representatives,
distributors and other sales agents to market and sell the System; (iii) to medical and
professional organizations and support staff to use the System in connection with implanting the
Implant and patient care; and (iv) to Affiliates, provided, however, that should any such Affiliate
have a then-available product directly competitive to the System, other than the Stelkast
Unicondylar Knee System or the total modular knee system currently under development by

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
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MAKO, either Party may provide the other with written notice of its decision to terminate this
Agreement nine (9) months from the date of delivery of such notice. For the avoidance of doubt, a
total knee system consisting of two unicondylar implants used for total knee replacement shall not
be considered directly competitive to the System.

     2.3 No Other Licenses; No Assignments. Other than the license expressly set forth
above, neither Party is granting to the other any license or sublicense, whether by implication,
estoppel or otherwise. Except as otherwise expressly stated, nothing in this Agreement is intended
to transfer title to or other ownership interest in any intellectual property tight.

     2.4 Right to Manufacture. At any time following MAKO’s receipt of its own Premarket
Notification 510(k) (a “MAKO 510(k)”), MAKO shall have the right (a) in its sole discretion, to
choose the manufacturer of the System other than ENCORE at any time based on MAKO’s production
needs and (b) to manufacture the System itself for use with the HGS using MAKO’s preferred
suppliers as a MAKO product.

ARTICLE III.

Transfer of Information, Assistance and Ownership

     3.1 Technical Assistance. ENCORE will provide MAKO, on a commercially reasonable
basis and in accordance with Schedule I, technical support during the period from the Effective
Date until the date on which MAKO is able to make or have made the Implant without the assistance
of ENCORE and sell the System independently, under its own label, with all necessary regulatory
approvals in the United States (the “Transition Period”).

     3.2 Clinical Training, Data and Support. During the Transition Period, ENCORE will
use commercially reasonable efforts to provide MAKO or its designees, at MAKO’s reasonable expense
and in accordance with Schedule I, necessary initial training by qualified ENCORE personnel,
concerning the System in the areas of engineering, sales, marketing, clinical and regulatory, and
manufacturing (the “Necessary Training”). The Necessary Training shall include, without
limitation, training in technical areas (design and manufacturing), clinical training, and
marketing training, and shall include the transfer of all documentation and literature associated
with the same. ENCORE shall provide MAKO with reasonable opportunity to observe on five (5)
separate occasions (at no charge) the current System surgical technique as practiced in clinical
cases. During the Transition Period, ENCORE will provide MAKO with any new clinical data and
follow-ups on the use of the System as are available to ENCORE and not previously provided to MAKO.

     3.3 Regulatory Matters.

     (a) FDA Approval. MAKO may sell the System under the ENCORE 510(k) until MAKO
receives a MAKO 510(k). ENCORE will use commercially reasonable efforts to assist MAKO in
applying for and obtaining a MAKO 510(k) and a corresponding CE marking for the System by
providing MAKO with all the required technical information and appropriate documentation
including, without limitation, Licensed Technical Information, clinical data, a complete
copy of any regulatory filing for the System created by ENCORE and existing as of the
Effective Date, and all

 

			
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specifications which are in ENCORE’s possession. Any other relevant assistance shall
be provided to MAKO by ENCORE on a commercially reasonable basis and in accordance with
Schedule I. In addition, ENCORE shall transfer to MAKO electronic CAD data and electronic
editable copies of all regulatory submissions and technical files existing as of the date of
the Closing of the latest System that could be then transferred to production or be used for
the purpose of design changes and future improvements by MAKO. CAD files existing as of the
Closing shall be transferred in a mutually agreed upon format.

     (b) Complaints. Each Party agrees and covenants to notify and forward to the
other within forty-eight hours of initial receipt any Complaint (as such term is defined in
such Complaint-receiving Party’s quality system) received related to the System. ENCORE
agrees and covenants that it shall inform MAKO immediately of any potential MDR noted during
any complaint investigation and that ENCORE shall be solely responsible for System advisory
notices, recalls, EC vigilance, end-user customer complaints, MDR determinations, and
post-production monitoring.

     (c) Corrective/Preventive Action. Each Party agrees and covenants that it will
inform the other Party within forty-eight hours of any corrective/preventive action related
to the System. This notice will include the corrective action plan to address the root
cause.

     (d) Adverse Experience Reports. Each Party agrees and covenants to provide to
the other, within twenty-four hours of the initial receipt, any report of any serious
adverse experience with respect to the System. Serious adverse experience means any
experience that suggests a significant hazard, contraindication, side effect or precaution,
or any experience that is fatal or life threatening, is permanently disabling, or requires
or prolongs inpatient hospitalization.

     (e) Communications. For so long as the Supply Agreement remains in force
between the Parties, any Party receiving a communication of any kind pertaining to the
System from a regulatory authority will promptly provide to the other Party copies of any
such communication. Each Party agrees and covenants that it shall promptly notify the other
Party of the receipt of any FDA Form 483 Report on Inspectional Observations or equivalent
notice from any regulatory authority which affects the System. Such notice will include the
corrective action plan to remedy the deficiency.

     3.4 Ownership of System IP and Other Intellectual Property. ENCORE does and shall own
all right, interest and title in the intellectual property embodied in the System (collectively,
“System IP”) existing as of the date of the Effective Date. MAKO shall own all right,
interest and title to any improvements made by MAKO to the System IP, which shall be, and hereby
is, licensed back to ENCORE on a royalty-free, world-wide, non-exclusive basis for use outside of
the MAKO Field. MAKO shall own all rights, interests and title to any intellectual property (a)
generated during the integration of the System for use with the HGS (other than any improvement to
System IP) and (b) owned by MAKO and existing prior to the Effective Date. MAKO’s technology in
the surgical robotics, image guidance, and software is owned by MAKO and shall be expressly
excluded from the terms of this Agreement.

 

			
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ARTICLE IV.

Publicity and Confidentiality

     4.1 Confidentiality of Agreement. The terms, but not the existence, of this Agreement
and the licenses granted herein will be treated as Proprietary Information (as such term is defined
in the NDA) by the Parties, and neither Party may disclose such terms to any third party without
the prior written consent of the other Party, except as follows:

     (a) Each Party may represent to third parties that MAKO has been granted a license to
the System as provided by this Agreement

     (b) Each Party may (i) disclose this Agreement and its terms to potential acquirers of,
investors in or lenders to such Party (including any representatives of the Parties in such
transaction), or disclosures reasonably necessary in connection with the divestiture,
merger, transfer or sale of all or any portion of a Party’s respective businesses, but only
if such disclosure is made pursuant to a written confidentiality agreement binding upon such
potential acquirer, investor, lender or other party, which obligates such party not to
disclose and to take reasonable precautions against unauthorized disclosure of the Agreement
and its terms; (ii) disclose this Agreement and its terms in any arbitration, mediation or
other official dispute resolution procedure pursuant to a written confidentiality agreement
binding upon the parties, which obligates such parties not to disclose and to take
reasonable precautions against unauthorized disclosure of the Agreement and its terms; (iii)
disclose this Agreement and its terms to its professional advisors who are under an ethical
obligation of confidentiality in order to comply with, or determine compliance with, any
law, rule, regulation, or accounting or similar requirement; and (iv) disclose this
Agreement and its terms, in response to a judicial or governmental request, requirement or
order, or as required by law, including any securities laws, on the condition that such
Party provides the other Party with sufficient prior notice in order to contest such
request, requirement or order or seek protective measures.

     4.2 Publicity and Trademarks. Nothing in this Agreement is intended nor shall be
construed as conferring upon either Party or its Affiliates any right to include in advertising,
packaging or other commercial activities related to the Implant, any reference to the other Party
(or any of its Affiliates), its trade names, trademarks or service marks in a manner which would be
likely to cause confusion or to indicate that the Implant is in any way certified by the other
Party hereto or its Affiliates.

ARTICLE V.

Payments

     5.1 License Fee. In full consideration for the license granted by ENCORE to MAKO and
the transfer of Licensed Technical Information, MAKO shall pay to ENCORE the following:

     (a) a $[***] License Fee upon execution by both Parties of this Agreement;

 

			
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(b) a running royalty of [***] percent ([***]%) (“Running Royalty”) of the Net
Sales of any Licensed Product sold in the MAKO Field during any calendar quarter, payable
quarterly in arrears, within thirty (30) days following the end of each quarter in which
such Running Royalty is earned; and

     (c) during the Effective Period, within thirty (30) days of each of the three
consecutive anniversaries following the Effective Date of the Agreement (each a “Minimum
Royalty Payment Date”), the following amounts (each a “Minimum Royalty”) less
all Running Royalties accrued during the prior 365-day period:

	 	(i)	 	First Minimum Royalty Payment
Date:          $[***]
	 
	 	(ii)	 	Second Minimum Royalty Payment
Date:     $[***]
	 
	 	(iii)	 	Third Minimum Royalty Payment Date:         $[***]

     5.2 Audit Rights. MAKO shall maintain accurate books and records with respect to the
Licensed Products such that the payments due and payable set forth in Section 5.1 can be
ascertained. Such books and records shall be maintained at MAKO’s principal place of business for
a period of at least three (3) years; and, such portions as are relevant to the subject matter of
this Agreement, shall be available for inspection by ENCORE or its representative(s) during the
normal business day upon not less than ten (10) days’ prior written notice, provided that ENCORE or
its representatives) agree to protect any confidential information of MAKO and not unduly interfere
with MAKO’S business. Any such inspection shall not be more frequent than annually. In the event
that such inspection determines that the amount of payments paid to ENCORE was in error by more
than five percent (5%), MAKO shall pay the costs of the inspection.

ARTICLE VI.

Representations, Warranties and Covenants

     6.1 ENCORE Representations. ENCORE represents, warrants and covenants to MAKO as to
the following as of the Effective Date:

     (a) The execution, delivery and performance by ENCORE of this Agreement does not breach
any term or provision of or constitute a default under any material indenture, mortgage,
deed of trust, contract, agreement, lease or other commitment or instrument to which ENCORE
is a party or by which ENCORE or its assets or properties are bound, do not conflict with
any provision of the articles of incorporation or bylaws of ENCORE and do not constitute an
event which, with the lapse of time or action by a third party, could result in any default
under any of the foregoing.

     (b) ENCORE has full power, authority and legal right to enter into this Agreement and
grant the licenses and rights set forth in this Agreement and has not made, and will not
make, any commitments to others inconsistent with or in derogation of such rights. Upon
execution and delivery by ENCORE of this Agreement it will be a valid and binding obligation
of ENCORE, enforceable in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization or similar laws

 

			
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affecting the rights of creditors generally. Notwithstanding the foregoing, no
representation or warranty is made regarding the availability of equitable remedies.

     (c) The manufacture, sale and use of the System and the use of Licensed Technical
Information as permitted by this Agreement, will not infringe the patents or copyrights of,
or misappropriated information of, a third party.

     (d) ENCORE has the requisite institutional knowledge and commercially adequate
expertise to provide the Necessary Training it is offering and/or pledging to provide to
MAKO under this Agreement.

     (e) ENCORE has obtained the Encore 510(k) and the CE mark to sell the System and hereby
permits MAKO to sell the System under the Encore 501(k) and the CE mark.

     (f) ENCORE maintains adequate product liability insurance covering the System, as would
be acquired and maintained by a reasonable and prudent businessperson carrying on a similar
line of business, but in no case for an amount of less than Four Million Dollars
($4,000,000) per claim and/or Five Million Dollars ($5,000,000) in the aggregate
(“Adequate Insurance”). Such Adequate Insurance shall at all times during the
Effective Period and for not less than three (3) years thereafter include all vendors of the
System.

     6.2 MAKO Representations and Warranties. MAKO represents and warrants the following:

     (a) The execution, delivery and performance by MAKO of this Agreement does not breach
any term or provision of or constitute a default under any material indenture, mortgage,
deed of trust, contract, agreement, lease or other commitment or instrument to which MAKO is
a party or by which MAKO or its assets or properties are bound, do not conflict with any
provision of the articles of incorporation or bylaws of MAKO and do not constitute an event
which, with the lapse of time or action by a third party, could result in any default under
any of the foregoing.

     (b) MAKO has full power, authority and legal right to enter into this Agreement. Upon
execution and delivery by MAKO of this Agreement it will be a valid and binding obligation
of MAKO, enforceable in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors
generally. Notwithstanding the foregoing, no representation or warranty is made regarding
the availability of equitable remedies.

     (c) MAKO maintains Adequate Insurance. Such Adequate Insurance shall at all times
during the Effective Period and for not less than three (3) years thereafter insure ENCORE,
its Board of Directors, officers, employees, agents and consultants as additional insureds.

     (d) MAKO shall not make any material misrepresentation about the System or ENCORE or
otherwise disparage the System or ENCORE. For the avoidance of doubt,

 

			
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the Parties agree and recognize that factual statements made by MAKO concerning
competitive advantages of implant systems offered by MAKO other than the System, including,
without limitation, the Stelkast Unicondylar Knee System or the total modular knee system
currently under development by MAKO shall not be deemed to have violated this Section
6.2(d).

     (e) For so long as MAKO shall sell the System under the Encore 510(k), MAKO
shall not utilize any promotional material prepared by it with respect to any of the System
or the Products without obtaining the prior written approval thereof’ from ENCORE which
shall not be unreasonably delayed or withheld. If at any time MAKO shall sell the System
under a MAKO 510(k), MAKO shall not utilize any promotional materials prepared by it
containing any ENCORE trade names, trademarks, service marks, or copyrighted material
without obtaining the prior written approval thereof from ENCORE which shall not be
unreasonably delayed or withheld.

     6.3 Disclaimers.

     (a) Other than the representations, warranties and covenants expressly made in this
Agreement, neither Party, nor any of its Affiliates, make any representations or extend any
warranties of any kind, express or implied. ENCORE and MAKO each disclaim all implied
warranties including without limitation warranties of merchantability, fitness for a
particular purpose, and non-infringement.

     (b) EXCEPT IN CONNECTION WITH INDEMNIFICATION FOR DAMAGES AWARDED FOR THIRD PARTY
CLAIMS OF PERSONAL INJURY PURSUANT TO ARTICLE VII, INFRINGEMENT ACTIONS, OR AS EXPRESSLY
PROVIDED ELSEWHERE IN THIS AGREEMENT, IN NO EVENT WILL MAKO OR ENCORE BE LIABLE FOR ANY
PUNITIVE, INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND WITH RESPECT TO
ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY THEORY, INCLUDING CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY.

ARTICLE VII.

Indemnification

     7.1 ENCORE Indemnification. ENCORE agrees to indemnify in respect of, and hold MAKO
and its officers, directors, employees and agents (the “MAKO Indemnified Parties”) harmless against
any and all damages, claims, deficiencies, losses, including taxes, and all expenses (including,
without limitation, interest, penalties, and reasonable attorneys’ and accountants’ fees and
disbursements but reduced by any tax savings, benefits or offsets to which the indemnified party
shall be entitled directly or indirectly by reason thereof) (collectively “Damages”)
resulting from (a) any misrepresentation, breach of warranty, or failure to perform any covenant or
agreement on the part of ENCORE or its employees, agents or representatives under this Agreement;
(b) personal injuries and/or deaths from the use of products manufactured, produced, sold or
marketed by ENCORE or its employees, agents or representatives, except if sold to MAKO unless such
products, when delivered to MAKO, failed to meet the Specifications,

 

			
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as defined in the Supply Agreement (in each such case, a “Non-Conforming Product”); or (c) any
negligent or fraudulent act or willful misconduct of ENCORE or its employees, agents or
representatives. ENCORE’s liability under this Section 7.1 shall be reduced to the extent that any
such Damages were caused by (i) the negligence or culpability or willful misconduct of the MAKO
Indemnified Parties, (ii) the failure of MAKO or its employees, agents or representatives to
perform their duties under this Agreement, or (iii) a change made to any such products after having
been manufactured by ENCORE.

     7.2 MAKO Indemnification. MAKO agrees to indemnify in respect of, and hold, ENCORE
and its officers, directors, employees and agents (the “ENCORE Indemnified Parties”) harmless
against any and all Damages resulting from (a) any misrepresentation, breach of warranty, or
failure to perform any covenant or agreement on the part of MAKO or its employees, agents or
representatives under this Agreement; (b) personal injuries and/or deaths from the use of products
manufactured, produced, sold or marketed by MAKO or its employees, agents or representatives,
except for use of a Non-Conforming Product, unless MAKO knew or should have known, through
reasonable diligence, that a product causing such personal injuries and/or deaths was a
Non-Conforming Product; or (c) any negligent or fraudulent act or willful misconduct of ENCORE or
its employees, agents or representatives. MAKO’s liability under this Section 7.2 shall be reduced
to the extent that any such Damages were caused by (i) the negligence or culpability or willful
misconduct of the ENCORE Indemnified Parties; or (ii) the failure of ENCORE or its employees,
agents or representatives to perform their duties under this Agreement.

ARTICLE VIII.

Term, Termination and Expiration

     8.1 Term. This Agreement will become effective as of the Effective Date and will
continue until terminated (the “Effective Period”) according to its terms or until
expiration of all Licensed IP Rights.

     8.2 Termination.

     (a) MAKO may voluntarily terminate this Agreement upon thirty (30) days written notice
to ENCORE;

     (b) In the event of any breach or default by one Party in any of the terms or
conditions of this Agreement, and such defaulting Patty has not cured such default within
thirty (30) days after written notice from the non-defaulting Party of such default, the
non-defaulting Party may immediately terminate this Agreement by giving written notice to
the defaulting Party.

     (c) At any time following closing of any transaction or series of transactions
resulting in Control of MAKO by an entity with a then-available product directly competitive
to the System, either Party may provide the other with written notice of its decision to
terminate this Agreement nine (9) months from the date of delivery of such notice.

     (d) ENCORE may immediately terminate this Agreement in the event of:

 

			
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     (i) any material misrepresentation or disparagement by MAKO of the System or
ENCORE as described in Section 6.2(d), of materially adverse effect to Encore and/or
the market for the System, which cannot be cured, in Encore’s reasonable discretion;

     (ii) Any assignment for the benefit of creditors or offer to make an extension
to creditors by MAKO; the insolvency (as “insolvent” is defined in Section 1-201 of
the Texas Uniform Commercial Code) of MAKO; the commencement of any proceeding under
any bankruptcy laws by MAKO or against MAKO’s business; or any transfer (either
voluntary or involuntary) of a substantial part of MAKO’s property or assets other
than in the ordinary course of business; or

     (iii) (1) The imposition of any sanctions against MAKO within the meaning of
Social Security Act Section 1128A or any amendments thereof; (2) actions by MAKO, or
any of MAKO’s employees, agents, representatives, owners, or contractors, that
result in a violation the federal Stark Law, federal False Claims Act, federal
Anti-Kickback Statute, federal Health Insurance and Portability Act provisions,
federal Civil Money Penalties Statute, or similar state laws; or (3) any debarment,
exclusion or suspension of MAKO or any of MAKO’s employees, agents, representatives,
owners, or contractors from participation in any federal or state health care
program.

     8.3 Rights under Termination. In the event of termination under this Section 8, MAKO
shall pay ENCORE within thirty (30) days of the termination for all sums under Sections 5.1(a) and
(b), whether such sums are due before, on or after the effective date of such termination. In the
event of a termination of this Agreement other than by MAKO pursuant to Section 8.2(b), the Minimum
Royalty that would have been due following the period during which such termination occurred, if
any, shall be payable on a pro-rated basis for that number of days from the prior Minimum Royalty
Payment Date to the termination date, less all Running Royalties accrued for that same period. In
such a case, payment of the Minimum Royalty, if any, shall be made within thirty (30) days of the
termination date. MAKO will also (a) return all Licensed Technical Information transferred from
ENCORE, and will erase any copies or files existing in the MAKO system and (b) be prohibited from
using any of the Licensed Technical Information disclosed by ENCORE for any purpose whatsoever.

     8.4 Survival. Any provisions of this Agreement, which by their nature extend beyond
the Effective Period, shall survive any termination of the Agreement.

ARTICLE IX.

Miscellaneous Provisions

     9.1 Assignment. This Agreement shall not be assignable by either Party absent the
written consent of the other Party, except that no such consent will be required for succession by
merger, consolidation, sale of all or substantially all of the assets, or change of control of a
Party, but only if the assignee, successor or surviving entity agrees to be bound in writing to all
of its terms and conditions. This Agreement will be binding on successors in interest and
permitted

 

			
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assigns. An assignment other than as expressly permitted by this Section 9.1 will be void and
shall constitute a breach of this Agreement.

     9.2 Notices. All notices and other communications which are required or which may be
given under the provisions of this Agreement will be in writing and may be delivered (a)
personally, (b) expedited delivery service with proof of delivery or (c) sent by United States
Mail, postage prepaid, registered or certified, return receipt requested, addressed as follows:

	 	 	 	 	 
	 

	 	If to ENCORE:
	 	Encore Medical, L.P.
	 

	 	 	 	9800 Metric Boulevard
	 

	 	 	 	Austin, Texas 78758
	 

	 	 	 	Attention: General Counsel
	 
	 	 	 	 
	 

	 	If to MAKO:
	 	MAKO Surgical Corp.
	 

	 	 	 	2555 Davie Road
	 

	 	 	 	Ft. Lauderdale, FL 33317
	 

	 	 	 	Attention: General Counsel

or to such other address designated by the Parties as provided above. Any such notice will be
deemed to have been given either at the time of personal delivery or, in the case of delivery
service or mail, as of the date of first attempted delivery at the address and in the manner
provided herein.

     9.3 Choice of Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, EXCLUSIVE OF ITS CONFLICTS OF LAW PRINCIPLES.

     9.4 Captions. The captions, headings, and arrangements used in this Agreement are for
convenience only and do not in any way affect, limit, amplify, or modify its terms and provisions.

     9.5 No Strict Construction. This Agreement is the result of substantial negotiations
among the Parties and their counsel and has been prepared by their joint efforts. Accordingly, the
fact that counsel to one Party or another may have drafted this Agreement, or any portion of this
Agreement, is immaterial and this Agreement will not be strictly construed against any Party.

     9.6 Severability and Reformation. Wherever possible, each provision of this Agreement
will be interpreted in such manner as to be effective. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under present or future laws effective during the term of
this Agreement, such provision will be fully severable and this Agreement will be construed and
enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this
Agreement, and the remaining provisions of this Agreement will remain in full force and effect.
Furthermore, in lieu of each such illegal, invalid, or unenforceable provision, there will be added
automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid,
or unenforceable provision as may be possible and be legal, valid, and enforceable; provided,
however, that, if any such change will materially diminish the practical realization of the
benefits intended to be conferred to any Party to this Agreement, such

 

			
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Party may terminate this Agreement upon written notice to the other Party within 30 days after
learning such change has been effected.

     9.7 Consents; Waivers. Any consent or approval required as a condition to an action
under this Agreement will be effective only (a) if in writing and signed by the Party whose consent
is sought, (b) with respect to the specific matter made the subject to such consent or approval
(and no other matter), and (c) for the specific instances) expressly set forth in such consent or
approval (and no earlier or subsequent instance(s). Any Party may waive any condition, covenant,
term, or provision of this Agreement, but any such waiver will be effective only (a) if in writing
and signed by the Party sought to be bound by such waiver, (b) with respect to the specific
condition, covenant, term, or provision expressly made the subject to such waiver (and no other
condition, covenant, term, or provision), and (c) for the specific instance(s) expressly set forth
in such waiver (and no earlier or subsequent instances). Without limiting the foregoing sentence,
none of the following will constitute a waiver of the rights of a Party to this Agreement to demand
exact compliance with the conditions, covenants, terms, and provisions of this Agreement: (a) a
failure of such Party to exercise any power reserved to it in this Agreement; (b) a failure of such
Party to insist upon compliance by any other Party to this Agreement with any condition, covenant,
term, or provision in this Agreement; (c) a delay, forbearance, or omission of such Party to
exercise any power; or (d) any custom or practice of the Parties at variance with the terms of this
Agreement. The consent or approval of any Party to this Agreement with respect to the act of any
other Party to this Agreement will not be deemed to waive or render unnecessary consent to or
approval of any subsequent similar act. Subsequent acceptance by a Party to this Agreement of any
performance due to it under this Agreement will not be deemed to be a waiver by such first Party of
any preceding breach by any other Party of any terms, provisions, covenants, or conditions of this
Agreement. No act or conduct of or by MAKO under this Agreement, including any payment of a
royalty, shall be evidence, or deemed an admission or suggestion, that any product manufactured,
licensed, or distributed by MAKO infringes the Licensed IP Rights or any other intellectual
property right.

     9.8 Force Majeure. Neither Party will be in default or otherwise liable for any delay
in or failure of its performance under this Agreement if such delay or failure arises by
any reason beyond its reasonable control, including any act of God, any acts of the common enemy,
the elements, earthquakes, floods, fires, epidemics, riots, failures or delay in transportation or
communications, or any act or failure to act by the other Party or such other Party’s employees,
agents, or independent contractors or representatives; provided, however, that lack of funds will
not be deemed to be a reason beyond a Party’s reasonable control. The Parties will promptly inform
and consult with each other as to any of the above causes that, in their judgment, may or could be
the cause of a delay in the performance of this Agreement.

     9.9 Legal Costs. Each of the Parties will be responsible for its own expenses,
including legal and accounting fees of advisors, incurred in connection with the negotiation and
preparation of this Agreement.

 

			
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     9.10 Dispute Resolution.

     (a) ENCORE and MAKO will attempt to settle any claim or controversy arising out of this
Agreement through consultation and negotiation in good faith and in a spirit of mutual
cooperation.

     (b) In the event that, after reasonable consultation, but within 30 days, the Parties
are unable to reach agreement, any claim or controversy shall be settled by arbitration
administered by the American Arbitration Association under its then current Commercial
Arbitration Rules in New York, New York, before a single arbitrator and ,judgment
on any award rendered by or finding of the arbitrator may be entered in any court having
jurisdiction thereof. The arbitrator shall have the authority to award actual money damages
(with interest on unpaid amounts from the date due), temporary injunctive relief, and
reasonable attorney’s fees and expenses, but, the arbitrator shall not have the authority to
award exemplary or punitive damages, and the Parties expressly waive any claimed right to
such damages. The costs of arbitration shall be borne by the Parties in accordance with the
award of the arbitrator. If a Party fails to proceed with arbitration, unsuccessfully
challenges the arbitration award, or fails to comply with the arbitration award, the other
Party is entitled to costs, including reasonable attorney’s fees, for having to compel
arbitration or defend or enforce the award. Except as otherwise required by law, the
Parties agree to maintain and to cause the arbitrator to maintain as Proprietary
Information, all information, documents and other data of any kind or nature whatsoever
obtained during the arbitration process, including the fact that such arbitration is being
undertaken and the final award of the arbitrator.

     9.11 Integration. This Agreement sets forth the entire agreement and understanding
between the Parties as to the subject matter hereof and merges all prior discussions between them
including, without limitation, the LOI; provided, however, that for the avoidance of doubt, this
Agreement shall not affect the Patties’ obligations under the Supply Agreement. Neither of the
Patties shall be bound by any warranties, understandings or representations with respect to such
subject matter other than as expressly provided herein or in a writing signed with or subsequent to
execution hereof by an authorized representative of the Party to be bound thereby.

     9.12 No Partnership. Neither this Agreement, not any terms and conditions contained
herein, will be deemed or construed to create a partnership, joint venture, other form of business
enterprise or association or cooperative arrangement, agency relationship, or franchise
relationship between the Parties or otherwise to create any liability for either Party whatsoever
with respect to the indebtedness, liabilities, and obligations of the other Party.

     9.13 Counterparts. This Agreement may be executed in any number of counterparts and
will be effective when each Party to this Agreement has executed at least one counterpart, with the
same effect as if all signing Parties had signed the same document. All counterparts will be
construed together and evidence only one agreement, which, notwithstanding the actual date of
execution of any counterpart, will be deemed to be dated the day and year first written above. In
making proof of this Agreement, it will not be necessary to account for a counterpart executed by
any Party other than the Party against whom enforcement is sought or to account for more than one
counterpart executed by the Party against whom enforcement is sought.

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

Page 14

 

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     9.14 Facsimile Signatures. The manual signature of any Party to this Agreement that
is transmitted to any other Party or counsel to any other Party by facsimile will be
deemed for all purposes to be an original signature.

     9.15 BASIS OF BARGAIN. EACH PARTY RECOGNIZES AND AGREES THAT THE WARRANTY DISCLAIMERS
AND LIABILITY AND REMEDY LIMITATIONS IN THIS AGREEMENT ARE MATERIAL, BARGAINED FOR BASES OF THIS
AGREEMENT AND THAT THEY HAVE BEEN TAKEN INTO ACCOUNT AND REFLECTED N DETERMINING THE CONSIDERATION
TO BE GIVEN BY EACH PARTY UNDER THIS AGREEMENT AND IN THE DECISION BY EACH PARTY TO ENTER INTO THIS
AGREEMENT.

[signature page follows]

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

Page 15

 

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     IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed in duplicate
originals by its duly authorized representatives on the respective dates entered below

	 	 	 	 	 	 	 
	 	 	ENCORE MEDICAL, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Encore Medical GP, Inc., its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Harry L. Zimmerman
 

Harry L. Zimmerman

Executive Vice-President—General Counsel
	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:
	 	2/28/07
 

	 	 
	 	 	MAKO SURGICAL CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Maurice R. Ferré
 

	 	 
	 

	 	 	 	Maurice R. Ferré, MD	 	 
	 

	 	 	 	President & Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:
	 	2/28/07
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	EXHIBITS	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Exhibit
	 	A: Non-Disclosure Agreement	 	 

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

Page 16

 

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Exhibit A

Non-Disclosure Agreement

[as attached]

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

Page 17

 

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December 11, 2006

Exhibit A

CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT

     THIS CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT (“Agreement”) is made to be effective as of
August 17, 2006, by and between (i) Encore Medical L.P., a Delaware limited partnership, which has
a place of business at 9800 Metric Blvd., Austin, Texas 78758 (“COMPANY”), and (ii) MAKO Surgical
Corp. a Delaware corporation which has a place of business at 2555 Davie Road, Ft. Lauderdale,
Florida 33317 (“MAKO”) who, intending to be legally bound, hereby agree as follows:

RECITALS

     WHEREAS, representatives of MAKO and COMPANY wish to communicate for the propose of evaluating
the prospect for future cooperation, subject to the parties’ agreement to hold the existence and
substance of such communications in confidence in accordance with this Agreement; and

     WHEREAS, each party agrees to hold the substance and existence of communications between their
representatives in confidence;

     NOW,
THERE FORE, in consideration of the mutual promises contained herein, the parties agree as follows:

     1. This .Agreement shall apply to all information: (i) which the disclosing party
designates as confidential, (ii) the receiving party should reasonably have known would be
confidential from its nature or from the circumstances surrounding its disclosure, and (iii)
disclosed by the parties to each other, including without limitation information related to product
designs, capabilities, specifications, program code, data bases (business forms and documents), and
information regarding regulatory and financial affairs, personnel, sales, commercial files, future
technical business and marketing plans and product strategies, the identity of actual and potential
partners, customers and suppliers, and other intellectual property (hereinafter referred to as
“Proprietary Information”). Proprietary Information may be owned by MAKO or any affiliate thereof,
COMPANY or any affiliate thereof, or by any third party which has disclosed such information to any
of the foregoing subject to a nondisclosure obligation. Proprietary Information shall
not include information which (a) was already known to the receiving party prior to disclosure by
the other party, (b) is in or has entered the public domain through no breach of this Agreement or
other wrongful act by the receiving party, (c) has been rightly received in good faith from a third
party who is not under any obligation of confidentiality with respect to such information, (d) has
been approved for release by written authorization of the disclosing party, or (e) is independently
developed by a party without use of the other party’s Proprietary Information. MAKO and COMPANY
hereby agree that any information which fails within the definition of Proprietary Information and
which was disclosed prior to the signing of this Agreement shall be deemed to be
included in and covered by the terms and conditions of this Agreement.

     2. MAKO and COMPANY understand and agree that each will be deemed to be in a fiduciary
relationship of confidence with the other party regarding the confidentiality of the

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

LOI-MAKO
& Encore

Page 18

 

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December 11, 2006

Proprietary Information. Each party acknowledges that the disclosure of the Proprietary
Information, including but not limited to the existence of communications between the parties, or
use of the Proprietary Information for any purpose other than the purposes identified herein could
result in irreparable injury to the business and goodwill of the other party whether such
disclosure occurs during the course of such communications or after their completion or
abandonment. Accordingly, each party agrees that it will keep the Proprietary Information in
strictest confidence and will not disclose the Proprietary Information to any third party. In
addition, each party shall take all steps necessary to protect the Proprietary Information from
unauthorized or inadvertent disclosure, including without limitation all steps such party takes to
protect the confidentiality of its own proprietary information, but in no event less than ordinary
degree of care. Notwithstanding the foregoing, the receiving party may disclose and grant access
to the Proprietary Information only to those of its employees, agents and consultants, or the
employees, agents and consultants of its affiliates or subsidiaries, who have a legitimate need to
know the Proprietary Information for the purposes of this Agreement and who shall have agreed to
abide by the terms and provisions of this Agreement.

     3. Except with the written consent of the disclosing party, neither party shall:

     (a) modify the disclosing party’s Proprietary Information;

     (b) disclose any part of the disclosing party’s Proprietary Information;

     (c) make any notes, sketches, drawings or photocopies, or other written or photographic
records of the disclosing party’s Proprietary Information, except for such copies as may be
reasonably required for the purpose of this Agreement; or

     (d) use or allow the use of the disclosing party’s Proprietary Information for any purpose
other than those of this Agreement, including but not limited to developing, directly or
indirectly, any product competing with or similar in functionality to any product marketed or
developed by the disclosing party.

     4. In the event the receiving party is required by law, regulation, or court order to disclose
any of the disclosing party’s Proprietary Information, the receiving party will promptly notify the
disclosing party in writing prior to making any such disclosure in order to facilitate the
disclosing party seeking a protective order or other appropriate remedy.

     5. Upon the completion or abandonment of the communications contemplated hereby, and in any
event upon the written request of the disclosing party at any time, whether during the course of
communications or after their completion or abandonment, each party shall immediately return to the
other party all items of Proprietary Information and all copies thereof and shall destroy any notes
or personal memoranda which include or make reference to the Proprietary Information.

     6. Each party shall be deemed the owner of all Proprietary Information disclosed by it to the
other party hereunder; including without limitation all patent, copyright, trademark, trade secret
and other proprietary rights and interests therein, and each party recognizes and agrees that

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

LOI-MAKO & Encore

Page 19

 

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December 11, 2006

nothing in this Agreement shall be construed as granting any rights, by license or otherwise,
in or to any Proprietary Information. The disclosing party provides Proprietary Information
without warranty of any kind, other than a warranty that it has the right to disclose the
Proprietary Information and that the Proprietary Information is disclosed in good faith. Neither
party makes, and each party hereby expressly disclaims, any warranty regarding the accuracy or
completeness of the Proprietary Information.

     7. Each party hereby acknowledges that unauthorized disclosure, use or disposition of any
Proprietary information would cause irreparable harm and significant
injury to the other party
which would be difficult to ascertain. Accordingly, each party agrees that the other party shall
have the right to seek an immediate injunction against any breach, threatened breach or attempted
breach of this Agreement, in addition to any other remedies that may be available at law or in
equity. Each party agrees to promptly notify the other party in writing of any unauthorized use or
disclosure of the other party’s Proprietary Information of which such party becomes aware and will
provide reasonable assistance to the other party to bring about the cessation of such unauthorized
use or disclosure.

     8. Each party further acknowledges and agrees that:

     (a) The termination of its communications with the other party shall not in any way affect the
obligations set forth herein;

     (b) This Agreement and the obligations set forth herein shall expire five (5) years after the
.date of last disclosure of Proprietary Information, provided however, that to the
extent the Proprietary Information are trade secrets, the obligations will survive until such
information is no longer treated as a trade secret by the disclosing party.

     (c) This Agreement constitutes the entire agreement between the parties in connection with the
subject matter hereof and supersedes all prior and .contemporaneous agreements,
understandings, negotiations and discussions between the parties, whether oral or written.

     (d) The validity, construction and performance of this Agreement shall be governed by and
construed in accordance with the substantive law of the State of Delaware, without regard to
conflicts of law provisions and any action or claims by or between any of the parties hereto
concerning the Proprietary Information, whether asserted on the basis of contract, tort (including
negligence and strict liability) or otherwise, shall be resolved exclusively under the law of such
jurisdiction. If any provision of this Agreement. or the application of any such
provision shall be held by a tribunal of competent jurisdiction to be contrary to law, the
remaining provisions of this Agreement shall remain in full force and effect to the maximum extent
permissible.

     (e) This Agreement is not assignable or transferable in whole or in part without written
consent of the other party. Any attempted assignment without such written consent shall be void
and shall constitute a breach of this Agreement.

     (f) This Agreement may be signed in original or by fax in counterparts, each of which will be
deemed to be an original, and the counterparts will together constitute one complete document.

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

LOI-MAKO & Encore

Page 20

 

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December 11, 2006

     (g) Each of the undersigned signatories, executing on behalf of the respective party, hereby
represents and warrants that (i) the execution and delivery of, and compliance with, this Agreement
has been duly authorized by such party, (ii) such signatory has actual necessary legal authority to
bind such party to the terrors of this Agreement, and (iii) this Agreement shall, by its terms,
bind such party to the covenants set forth herein.

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

LOI-MAKO & Encore

Page 21

 

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December 11, 2006

     IN WITNESS WHEREOF, the parties hereto have executed this Confidentiality Agreement be
effective as of the date first written above.

	 	 	 	 	 	 	 	 	 
	MAKO SURGICAL CORP.	 	 	 	ENCORE MEDICAL L.P.
	 	 	 	 	 	 	BY: ENCORE MEDICAL GP, INC.
	 	 	 	 	 	 	                     its general partner
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Maurice R. Ferré
	 	 	 	By:
	 	/s/ Jack Cahill
	Name:

	 	Maurice R. Ferré
	 	 	 	Name:
	 	Jack Cahill
	Title:

	 	President/CEO
	 	 	 	Title:
	 	President, Surgical Implant Div.
	Date:

	 	12-12-2006
	 	 	 	Date:
	 	12-14-06

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

LOI-MAKO & Encore

Page 22

 

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Schedule I

     Except for third-party expenses, during the first thirty days following the Effective Date, no
charges shall be due and owing to ENCORE from MAKO for support or training up to a maximum of [***]
([***]) hours. Thereafter, ENCORE shall bill MAKO at a rate of [***] Dollars ($[***]) for each
hour of support or training provided by ENCORE pursuant to the terms of the Agreement. Any
third-party expenses, such as consulting surgeon services, shall be borne by MAKO at [***]% of the
cost to ENCORE .

 

			
	[***]	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

Page 23

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