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Manufacturing Supply Agreement

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Sectors: Health Products and Services
Governing Law: United States
Effective Date: July 26, 2007
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EXHIBIT 10.32 EXECUTION COPY MANUFACTURING SUPPLY AGREEMENT This MANUFACTURING SUPPLY AGREEMENT (this " Agreement" ), effective as of July 26, 2007 (the " Effective Date" ), is made by and between MAKO SURGICAL, INC., having a place of business at 2555 Davie Road Ft. Lauderdale, FL 33317 (" MAKO Surgical" ), and SYMMETRY MEDICAL, having a place of business at 220 West Market Street, Warsaw IN 46580-2827 (" Service Provider" ). BACKGROUND A. MAKO Surgical is engaged in the business of development and commercialization of medical device products including interactive, surgeon-based guidance systems focused on minimally invasive, orthopedic procedures that will assist in early stage degenerative joint diseases. B. Service Provider is engaged in, among other things, the manufacture, development and supply of products for the medical device industry; and C. MAKO Surgical desires to engage, and Service Provider desires to perform, services for MAKO Surgical relating to: (i) the implementation, validation, and manufacture of certain MAKO Surgical products; and (ii) the supply of such products pursuant to any Purchase Orders from MAKO Surgical in accordance with the terms and conditions hereof and the Exhibits attached hereto. NOW, THEREFORE, for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, it is agreed by and between the Parties as follows: ARTICLE 1
DEFINITIONS As used in this Agreement, the following terms shall have the meanings indicated below: 1.1 " Applicable Laws" means all laws, ordinances, rules, and regulations of any governmental or regulatory authority that apply to the Services or this Agreement, including without limitation (a) all applicable federal, state, and local laws and regulations; (b) the U.S. Federal Food, Drug and Cosmetic Act (" FDCA" ), (c) regulations and guidelines of the FDA and other Regulatory Agencies, and (d) GMP. 1.2 " FDA" means the United States Food and Drug Administration, or any successor agency thereto. 1.3 " GMP" means current good manufacturing practice and standards as provided for (and as amended from time to time) in the " Current Good Manufacturing Practice Regulations" of the U.S. Code of Federal Regulations Title 21 (21 CFR a7a7 820) and in European Community Council Directive 93/42/EEC concerning medical devices, any U.S., European, or other applicable laws, regulations or respective guidance documents now or subsequently established by a governmental or regulatory authority, and any arrangements, additions, or clarifications [***] 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.

agreed from time to time between the Parties. 1.4 " Products" means the medical device products manufactured by Service Provider for MAKO Surgical pursuant hereto. 1.5 " Purchase Order" means any of MAKO Surgical' s written orders to purchase Products from Service Provider, as MAKO Surgical may deliver to Service Provider from time to time. 1.6 " Regulatory Agency" means any governmental regulatory authority involved in regulating any aspect of the conduct, development, manufacture, market approval, sale, distribution, packaging, or use of the Services or the products resulting therefrom, including the FDA and similar regulatory agencies. 1.7 " Services" means the manufacturing services to be provided by Service Provider pursuant hereto. 1.8 " Specifications" means any specifications provided by MAKO Surgical that set forth design and functional specifications and other requirements for Services Provider' s performance of the Services and manufacture and pricing of the Products, which may be modified from time to time by MAKO Surgical. Whether or not expressly set forth therein, the Specifications shall be deemed to include compliance with all Applicable laws. The Specifications, as amended from time to time, shall be attached hereto as Exhibit A incorporated herein by reference. The Specifications shall be deemed to include the " Quality Assurance & Regulatory Affairs Guidelines" attached hereto as Exhibit B incorporated herein by reference. ARTICLE 2
DEVELOPMENT SERVICES 2.1 Standards of Performance . Service Provider shall perform Services and deliver upon request by MAKO Surgical all results, data, records, and reports created or generated in connection with such performance. Service Provider shall perform the Services in compliance with GMP and all other Applicable Laws, and in accordance with applicable Specifications 2.2 Performance of Services MAKO Surgical may, at any time and from time to time, submit to Service Provider a request for changes to the Specifications or any component of the Services or Products, whether applicable to Service' s Provider' s past, present, or future performance hereunder (each, a " Change Order" ). If, upon review of a Change Order, Service Provider determines that the requests set forth in the Change Order can be implemented without resulting in material increases in Service Provider' s time or cost, and without materially affecting Service Provider' s ability to provide Services or Products, Service Provider shall inform MAKO Surgical thereof, the Change Order shall thereupon become part of the Specifications hereunder, and Service Provider shall implement such Change Order at no additional cost to MAKO Surgical. Otherwise, Service Provider shall inform MAKO Surgical of the commercially reasonable fee and scheduling changes that would be required for Service Provider to implement the Change Order. If MAKO Surgical agrees to such fee and scheduling changes in a signed writing within a reasonable time thereafter, the Change Order shall thereupon become part of the Specifications hereunder, and Service Provider shall implement such Change Order in [***] 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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accordance with the terms and conditions so agreed to by MAKO Surgical. Service Provider shall at all times use its commercially reasonable efforts to comply with all Change Orders requested by MAKO Surgical, and to minimize the time, delays, and additional charges required as a result of such changes. 2.3 Records . Service Provider shall maintain all technical, scientific, accounting, and other records in good scientific manner, as applicable, and in sufficient detail (to reflect all material work done, results achieved, and intellectual property developed in the course of performing the Services, including all data in the form required by Applicable Law. 2.4 Inspections . Upon reasonable prior written notice given by MAKO Surgical to Service Provider, Service Provider shall permit MAKO Surgical or its representatives to inspect and audit Service Provider and/or, in collaboration with Service Provider, any third-party provider to Service Provider, during normal business hours, including performance of the Services hereunder, the facilities used, and the relevant books and records in order to monitor compliance with Applicable Laws and this Agreement. Notwithstanding the foregoing, such compliance shall at all times remain Service Provider' s sole and absolute responsibility, and MAKO Surgical' s failure to inform Service Provider of any noncompliance shall not be construed to imply MAKO Surgical' s approval thereof or to relieve Service Provider from any obligation to remediate any noncompliance. ARTICLE 3
SUPPLY OF PRODUCTS 3.1 Supply . Service Provider' s shall complete all Services in accordance with applicable Specifications and shall supply the resulting Products in accordance with applicable Specifications and any supplemental provisions set forth on MAKO Surgical' s Purchase Orders agreed to or ratified by Service Provider either in a signed writing or by full or partial fulfillment thereof. Any provisions amended to or excised from any Purchase Order by Service Provider will be null and void and of no force or effect unless and to the extent that the same are agreed to in a writing signed by MAKO Surgical. 3.2 Delivery . At such times and locations, and in such manner and means, as may be set forth in the Specifications of applicable Purchase Order for such purpose, Service Provider shall deliver Products to MAKO Surgical, F.O.B. MAKO Surgical' s receiving facilities. Risk of loss shall pass to MAKO Surgical' s only upon MAKO Surgical' s knowing receipt thereof. Service Provider shall suitably pack Products for shipment in accordance with Service Provider' s validated internal packaging and shipping procedures. 3.3 Acceptance . Within 30 days after Service Provider' s delivery of each Product, or at such other time(s) as may be set forth in the Purchase Order (the " Acceptance Period" ), MAKO Surgical shall verify that such Product reasonably conforms to applicable Specifications and applicable provisions of the Purchase Order. MAKO Surgical shall notify Service Provider in writing of any nonconformities exhibited by such Product (a " Rejection Notice" ), and Service Provider shall thereupon immediately remedy such nonconformities, and re-deliver any Products, as appropriate with documentation as to how such non-conformity was addressed, whereupon the provisions of this Section 3.3 shall iterate with respect thereto. Should MAKO Surgical inform Service Provider of its acceptance or fail to deliver a Rejection Notice during an Acceptance [***] 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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Period, then applicable delivered Products shall be deemed accepted. 3.4 Quality Control . Notwithstanding the provisions of Section 3.3, MAKO Surgical may engage in customary quality control inspection techniques to ascertain the likelihood that particular shipments of Products contain an overabundance of nonconforming units, and MAKO Surgical may reject any shipment of Licensed Products reasonably so shown to be nonconforming. ARTICLE 4
PAYMENTS AND PRICING 4.1 Services . In consideration for the Services performed by Service Provider, within 30 days after MAKO Surgical' s acceptance of Product hereunder, MAKO Surgical shall pay Service Provider for the purchase of all accepted Products in accordance with the respective pricing provisions of the Specifications and the Purchase Order (the most recent of which, to the extent that the differ, will supersede the older), by check or other negotiable instrument drawn on U.S. funds, or by wire transfer to such account as Service Provider may specify for such purpose. 4.2 Pricing Service Provider shall maintain and honor the per part pricing as set forth in Exhibit " A" for a period of two years from execution of this agreement. However, notwithstanding the foregoing, Service Provider shall maintain the right to submit new pricing to MAKO in the following circumstances: a. Where raw material prices rise greater than [***]% and negatively effect the ability of Service Provider to provide products at agreed upon costs set forth in Exhibit A b. Where, as set forth in Section 2.2, MAKO shall request engineering or specification changes to the manufacturing process. 4.3 Notice for a Requested Pricing Increase Should Service Provider request a price increase in accordance with section 4.2, such request shall be submitted to MAKO in writing and provide 60 days notice prior to the effective date of such increase. 4.4. Currency . All amounts payable by MAKO Surgical hereunder will be made in United States Dollars. 4.5 Accounting Records . Service Provider shall maintain complete and accurate accounting records related to this agreement in accordance with generally accepted accounting principles in the United States. Service Provider shall make such records available for inspection, review, and audit at reasonable times by MAKO Surgical or its duly authorized representative, at MAKO Surgical' s expense, for three (3) years following the end of the calendar year to which such records pertain. ARTICLE 5
QUALITY AND REGULATORY MATTERS 5.1 Regulatory Actions . Service Provider shall permit the FDA and other Regulatory Agencies to conduct inspections of Service Provider' s facilities as they may request, including pre-approval inspections, and shall cooperate with Regulatory Agencies with respect to [***] 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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the inspections and any related matters. Service Provider shall give MAKO Surgical prior notice, to the extent practicable, of any such inspections related to the Services, the Products, or otherwise effecting MAKO Surgical hereunder, and shall keep MAKO Surgical informed about the results and conclusions of each regulatory inspection, including actions taken by Service Provider to remedy conditions cited in the inspections. Service Provider shall permit MAKO Surgical or its representative to be present at such inspections. Service Provider shall provide MAKO Surgical with copies of any written inspection reports issued by a Regulatory Agency and all correspondence between Service Provider and the Regulatory Agency, including, but not limited to, FDA Form 483, Notice of Observation, and all related correspondence, in each case relating to the Services, Products, or general manufacturing concerns (i.e., facility compliance or the like). Service Provider shall promptly notify and provide MAKO Surgical copies of any request, directive, or other communication of the FDA or other Regulatory Agency relating to the Services or Products and shall cooperate with MAKO Surgical in responding to such requests, directives, and communications. 5.2 Information . Service Provider shall provide upon request from MAKO Surgical, at a reasonable cost, all available information in Service Provider' s control necessary or useful for MAI O Surgical to apply for, obtain, and maintain regulatory approvals for Products in any country, including without limitation information relating to the facilities, process, methodology, raw materials, and intermediates used in the manufacture, processing, and packaging of Products. 5.3 Manufacturing Changes . Service Provider shall proceed in accordance with all specifications and manufacturing procedures as provided by MAKO and validated by Service Provider' s internal quality system. Service provider shall make no changes in such procedures or processes without prior approval by MAKO. Any and all such changes shall be properly documented in accordance with industry quality standards, GMP' s, and any Applicable Laws. ARTICLE 6
INTELLECTUAL PROPERTY 6.1 Intellectual Property . All inventions, works of authorship, improvements, discoveries, modifications, methods, processes, technology, materials, trade secrets, know-how, data, and information of every kind or description conceived, developed, generated, made, fixed in a tangible medium of expression, or reduced to practice by Service Provider, either alone or jointly with others, in connection with the Services, the Products, or the performance of this Agreement, including all worldwide patent, copyright, trademark, trade secret, and all other intellectual property rights therein and thereto shall be the sole and exclusive property of MAKO Surgical, including without limitation the right to apply for and renew the same in MAKO Surgical' s name alone, all of the foregoing being hereby deemed under Applicable Law to be specially commissioned works made for hire, as applicable. Notwithstanding the foregoing, should Service Provider discover, adapt or improve a technology or method of manufacture used under this contract nothing herein shall prevent Service Provider from using such method, process or invention on other Symmetry products provided activities in no way compete with MAKO' s business interests. 6.2 Exception; License . The provisions of Section 6.1 shall not apply to Service Providers proprietary inventions, works, and technology conceived or developed by Service Provider prior to the Effective Date, title to which shall remain with Service provider. However, [***] 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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Service Provider hereby grants to MAKO Surgical the nonexclusive, perpetual, irrevocable, fully paid-up right and license to make, use, sell, reproduce, make derivative works of, and otherwise commercially practice in every way, and sublicense the same to third parties, any and all of Service Provider' s pre-existing works that are included in or required for the operation of any Products. ARTICLE 7
REPRESENTATIONS AND WARRANTIES 7.1 General . Each party hereby represents and warrants to the other that: (a) it is a corporation in good standing under the laws of its state of incorporation; (b) it has full corporate power to enter into this Agreement and to grant to the other party the rights so granted hereunder; and (c) it has obtained all necessary corporate approvals to enter into, execute, and perform its obligations under this Agreement. 7.2 Services . Service Provider represents and warrants that: (a) it shall perform all Services in a timely, professional, and workmanlike manner, with due care and in accordance with prevailing industry standards, including without limitation GMP; (b) it shall perform and document each Service in accordance herewith, with MAKO' s requests, and with all Applicable Laws; (c) that the Services and Products, as delivered, shall conform to all applicable and agreed-upon Specifications and Purchase Orders; and (d) that the Services and the Products will not infringe the intellectual property rights of any third party. 7.3 Personnel . Service Provider represents and warrants to MAKO Surgical that neither Service Provider nor any of its employees have been " debarred" by the FDA, or subject to a similar sanction from another Regulatory Agency, nor have debarment proceedings against Service Provider or any of its employees been commenced or reasonably threatened. 7.4 Disclaimer . EXCEPT AS PROVIDED IN THIS Article 7, NEITHER PARTY MAKES ANY WARRANTIES OR CONDITIONS (EXPRESS, IMPLIED, STATUTORY OR OTHERWISE) WITH RESPECT TO THE SUBJECT MATTER HEREOF AND EACH PARTY EXPRESSLY DISCLAIMS ANY SUCH ADDITIONAL WARRANTIES. ARTICLE 8
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