Quality Agreement

Stryker and the Distributor shall be referred to individually as a “Party” and collectively as the “Parties. This Quality Agreement (the “Quality Agreement”) becomes binding and effective as of the "Effective Date" (as determined by Paragraph 14 below).

Recitals

A. The Parties are aware of the fact that as of May 26, 2021 the Regulation on Medical Devices (EU) 2017/745 ("MDR") becomes applicable, replacing Directive 93/42/EEC and introducing a significantly revised regulatory regime governing medical devices. In anticipation of this date, the Stryker group has made substantial efforts and investments to accommodate its products and processes to the requirements imposed by the MDR. Particularly, the Stryker group is prepared to switch certain of its medical devices ("Early MDR-ready Products") to MDR already prior to the official application date of May 26, 2021 (which impacts the Effective Data set forth by paragraph. 14 below). Concurrently, still after May 26, 2021 Stryker may place certain "Transitional MDD Products" on the market (to be understood as medical devices still compliant with the Medical Devices Directive 93/42/EEC and taking advantage of a transition period pursuant to Art. 120 MDR).

B. The revised regulatory framework under the MDR also impacts the distribution of the products (medical devices) subject to the Distribution Agreement, whose the present Quality Agreement is an Exhibit of, and necessitates a substantial revision of the terms and delineation of responsibilities regarding the quality, regulatory and vigilance obligations incumbent on the Parties to perform the Distribution Agreement in an MDR-complaint manner. 

Now, therefore, the Parties agree to the following terms:

1. Definitions

General definitions

1.1 "Contract Product" means all those Products listed on the Distribution Agreement, which are manufactured and/ or distributed by Stryker (as the same may be modified from time to time) and any improvements, changes or additions thereto as defined in the Distribution Agreement.

1.2 "Territory" means regions and/ or countries listed on the Distribution Agreement.

1.3 "Applicable Laws" means the MDR including any delegated acts adopted under the MDR, any national legislation related to the MDR in effect in the Territory, as well as applicable laws on data privacy, environmental protection, consumer protection, advertisement, promotion, import and distribution of the Contract Products.

1.4 "Competent Authorities" means the governmental authorities and regulators on federal, state or communal level with jurisdiction in the country of residence of the Distributor and/or elsewhere in the Territory and competent for the supervision and control of the commercialization of the Contract Products including the enforcement of the Applicable Laws.
Economic operators

1.5 "Legal Manufacturer" means the natural or legal person who manufactures or fully refurbishes a medical device or has it designed, manufactured or fully refurbished, and markets that device under its name or trademark, which with respect to the Contract Products may be a Stryker affiliate or a third-party entity. 

1.6 "Authorized Representative" means a natural or legal person established in the EU who has received and accepted a written mandate from a Legal Manufacturer which is located outside of the EU, to act on behalf of the Legal Manufacturer in relation to specified tasks with regard to the latter's obligations under the MDR.

1.7 "Importer" means any natural or legal person established in the EU that places medical devices from a third country on the EU market.

1.8 "Distributor" means a legal entity in the supply chain, other than the Legal Manufacturer or the Importer, that makes a Devices available on the market, up until the point of putting into service.
Terms related to device safety

1.9 "Field" means the marketplace for the Contract Products including any of its stakeholders who are a source of information about safety, performance or compliance of the Contract Products, including without limitation customers and business associates of the Distributor, users of the Contract Products such as healthcare professionals or health institutions, was well as patients, technical experts, media representatives, Regulatory Authorities, legal counsels, advocacy groups etc.

1.10 "Complaint" means any written, electronic or oral communication obtained from or observed in the Field that alleges deficiencies or inadequacies related to the identity, quality, durability, reliability, usability, safety or performance of a medical device, or that is related to a service (particularly a medical procedure) which affects the device's performance.

1.11 "Device Non-conformity" means a suspected deviation of any characteristics or safety features of a medical device which may particularly, without limitation, present as a condition giving raise to a "Complaint" (as defined above). Note: A Device Non-Conformity may occur and be ascertained after, but also prior to, making available a concerned Contract Product on the market, i.e. also while the device is still on stock.

1.12 "Incident" means any malfunction or deterioration in the characteristics or performance of a medical device made available on the market, including use-error due to ergonomic features, as well as any inadequacy in the information supplied by the Legal Manufacturer and any undesirable side-effect.

1.13 "Serious Incident" means any Incident that directly or indirectly led, might have led or might lead to any of the following: (a) the death of a patient, user or other person, (b) the temporary or permanent serious deterioration of a patient's, user's or other person's state of health, (c) a serious public health threat (the latter defined  by Art. 2(66) of the MDR).

1.14 "Serious Risk" means a Device Non-Conformity which is suspected to have resulted or may result in an injury or impairment of a human requiring professional medical intervention. 

1.15 "Falsified Device" means any medical device with a false presentation of its identity and/or of its source and/or its CE marking certificates or documents relating to CE marking procedures.

1.16 "Withdrawal" means any measure aimed at preventing a medical device in the supply chain from being further made available on the market.

1.17 "Recall" means any measure aimed at achieving the return of a medical device that has already been made available to the end user.

1.18 "FSCA" means field safety corrective action, i.e. a corrective action taken by or on behalf of a Legal Manufacturer for technical or medical reasons to prevent or reduce the risk of a (Serious) Incident in relation to a medical device made available on the market, which may include a Recall or a Withdrawal or the issuance and distribution of an FSN.

1.19 "FSN" means field safety notice, i.e. a communication issued by a Legal Manufacturer to users or customers in relation to an FSCA.
Terms related to information accompanying devices

1.20 "Declaration of Conformity" means the EU declaration of conformity within the meaning of Art. 19 of the MDR.

1.21 "Label" means the written, printed or graphic information appearing either on the device itself, or on the packaging of each unit or on the packaging of multiple medical devices showing the content as determined by sec. 23.2 (information on the label) and, as the case may be, also sec. 23.3 (information on sterile packaging), of Annex I to the MDR. 

1.22 "IFU" means the information provided by the Legal Manufacturer to inform the user of a medical device's intended purpose and proper use and of any precautions to be taken.

2. Collection and registration of information about Events observed in the Field

2.1 Distributor shall implement and maintain, as a part of its quality system, a systematic process ensuring that all reports or information received from, or observed in, the Field or otherwise coming to Distributor's knowledge which relate to or suggest any of the following events related to any Contract Products (collectively "Events"), are being immediately recorded and entered into a register or log maintained electronically or in writing ("Event Register"): cases, situations occurrences or episodes involving any (i) Device Non-conformity, (ii) Complaints, (iii) Incidents including Serious Incidents and cases of Serious Risks and/or (iv) Falsified Devices . 

2.2 In maintaining the Event Register, Distributor shall immediately:

2.2.1 assign each Event to one or more of the above stated categories (i) to (iv), it being understood that more than one category may be selected; and

2.2.2 record the following factual particulars of the affected Contract Product(s) for each Event: 
- Date of gaining knowledge- Product/item code(s) and lot/serial number(s) - Unique device identifier(s) "UDI(s)" if applicable- Quantity- Name and contact details of reporter or other source identification data in the Field- Name and contact details of Consignee (as defined in paragraph 3.1) supplied with the affected Contract Product(s)- Type of Event following aforementioned categories (i) to (iv)

2.3 In the event of any Recalls or Withdrawals of Contract Products initiated or instructed by the Legal Manufacturer or by Stryker on its behalf, or by a Regulatory Authority (as further addressed in paragraph 8), Distributor shall likewise record any of those occurrences in the Event Register.

3. Traceability, tracking and recall system 

Distributor shall implement and maintain, as a part of its quality system, a system and an according documentation whereby Distributor is capable of, and engages in, the following activities:

3.1 Recording of the following data which allows for tracking each Contract Product received from Stryker, whether still on stock or already shipped onwards to Distributor's customers such as end-users, wholesalers, retailers or other dealers ("Consignees"):
- Product/item code(s) and lot/serial number(s) - UDI(s) if applicable- Labelled expiry date(s) ('shelf life')- Quantity- Date(s) or receipt from Stryker - Date(s) of shipment to Consignee (item leaves Distributor's warehouse)- Name(s) and contact details of Consignee- Cop(y)(ies) of corresponding invoice and delivery note

3.2 Tracking the exact location and whereabouts of any Contract Product received from Stryker without undue delay, at the latest within 3 days upon an according request (obtained from Stryker or a Regulatory Authority). For Contract Product already shipped onwards to Consignees, this obligation is deemed fulfilled by producing the data stated in last three-line items of paragraph 3.1 above.

3.3 Immediately implementing an FSCA requested by the Legal Manufacturer and/or Stryker on its behalf, including the identification of Consignees which are affected. 

4. Retention of Event Register and Traceability Documentation

4.1 Distributor shall retain and hold available for any audit (by Stryker) or inspection (by a Regulatory Authority) the Event Record (addressed in paragraph 2) as well as the traceability, tracking and FSCA documentation (addressed in paragraph 3) for a minimum period of "X" years after the labelled expiry date of each Contract Product. For implantable Contract Products "X" amounts to 15 (fifteen) years, and for and for non-implantable to 10 (ten) years.

5. Notification and Information to be provided to Stryker

5.1 Without prejudice to Distributor's obligations pursuant to paragraph 2 above, Distributor shall notify Stryker of all Events related to Contract Products coming to Distributor's knowledge. It is the responsibility of all Stryker distributors/agents appointed by Stryker, especially those who have customer facing roles to communicate product complaint information by the appropriate method within 1 business day of awareness. 

5.2 Distributor shall specify the following details for each Event notified:
- Categor(y)(ies) of Event (one or more boxes may be checked)- Date of gaining knowledge- Contract Products involved by brand name, article code(s) and lot/serial number(s) - UDI(s) of Contract Products, if applicable- Quantity Contract Products involved- Current localization of affected Contract Products- (Alleged) reasons for Event (e.g. malfunction, Label inadequacy, contamination etc.)- (Alleged) harm inflicted (e.g. death, injury or deterioration state of health of patients), if applicable- Monetary damages claimed (€ amount), if applicable- Name and contact details of reporter in the Field; or alternatively a pseudonymization code in the absence proper data privacy legitimization for transmission to Stryker- Copies of collected source documentation (e.g. complaint letter, claim letter), with personal identifiers redacted

5.3 Initial notifications shall be made by email or fax (address and fax number to be shared separately) and followed by delivery of a more in-depth report (e.g. source documentation) once available. If required details allowing for a sufficient understanding of the Event are missing, Distributor shall further investigate the Event and/or duly assist Stryker in its investigations.

5.4 In case of doubt about whether a specific matter, occurrence, situation or episode and the pertaining set of facts constitute an Event, and/or what precise category or categories apply, Distributor shall nevertheless make a notification to Stryker (following the principle to err on the side of caution). This does not relieve Distributor from using utmost efforts to accurately categorize each Event. 

5.5 If and to the extent Stryker is neither the Legal Manufacturer of a Contract Product nor its Authorized Representative or Importer, it falls within Stryker's responsibility to forward the above stated information, when obtained from Distributor, to any of those economic operators which are applicable. This notwithstanding, Distributor is not prevented from additionally making notifications to economic operators (Legal Manufacturer, Authorized Representative, Importer, as the case may be) other than Stryker, in accordance with Art. 14 of the MDR (information on Non-conforming Devices, Complaints and suspected Incidents).

5.6 Distributor further undertakes to provide Stryker with any information prescribed the applicable PMS Plan in support of Legal Manufacturer’s obligation to pro-actively collect relevant feedback from users.

6. Making Contract Products available on the market and suspension thereof

6.1 When making Contract Products available on the market in the Territory, Distributors shall act with due care in relation to the requirements applicable.

6.2 Distributor shall hold and maintain all establishment licenses or distribution permits in case such are required to sell and/or supply Contracts Products in the Territory, and upon request provide Stryker with copies thereof. To the extent that Distributor, under national laws applicable in the Territory, is under any obligation to register itself and/or any Contract Products with a national authority, Distributor shall comply with such obligation and, upon Stryker's request, present evidence of such registration having been duly performed. 

6.3 To the extent the Distributor is under a statutory obligation to refrain from making Contract Products available on the market (i.e. to suspend distribution) because Distributors considers or has reason to believe (i.e. makes a "Reasonably Assumption") that Contract Products are affected by a Device Non-Conformity not yet remedied or reversed, concurrently with making such Reasonable Assumption Distributor shall duly cooperate with Stryker to resolve the issue, particularly by way of:
- complying with the notification obligation pursuant to paragraph 5.1 above; and in addition, by- providing a concise (written) assessment laying out the reasons for Distributor's Reasonable Assumption in a substantiated way;- using best efforts to seek alignment on the suspension of distribution. 

7. Interactions with Regulatory Authorities

7.1 To the extent the Distributor is under a statutory obligation to inform Competent Authorities because Distributors considers or has reason to believe (i.e. makes a "Reasonably Assumption") that Contract Products present a Serious Risk or constitute Falsified Devices, concurrently with making such Reasonable Assumption Distributor shall duly cooperate with Stryker to resolve the issue, particularly by way of:
- complying with the notification obligation pursuant to paragraph 5.1 above; and in addition- providing a concise (written) assessment laying out the reasons for Distributor's Reasonable Assumption in a substantiated way;- using best efforts to seek alignment on the notification to the Competent Authorities. 

7.2 Distributor shall forthwith inform Stryker of any request, order or notice Distributor receives from Competent Authorities, which may relate to the safety of Contract Products or their compliance with Applicable Laws, and shall keep Stryker apprised of any follow-up correspondence. The same applies to any requests for samples from Competent Authorities.

7.3 To the extent any request, order or notice Distributor received from Competent Authorities specifically requires the Distributor to provide the Competent Authorities with information or documentation demonstrating MDR-conformity of Contract Products, upon duly notifying Stryker thereof, Stryker may elect to assume, and  relieve distributor of, the responsibility for responding to Competent Authorities. In such case Stryker will keep Distributor informed about the matter.

8. Cooperation in case of FSCAs

8.1 Distributor shall duly cooperate with Stryker with respect to post-market surveillance activities, and particularly in the event of an FSCA related to Contract Products being initiated by or on behalf of the Legal Manufacturer. Particularly, Distributor shall support the tracking of the affected Contract Products (based on the systems and documentation to be maintained pursuant to paragraph 3 above). If requested in connection with a Withdrawal or a Recall, Distributor shall quarantine all affected Contract Product on stock, and (following any specific instructions given by or on behalf of the Legal Manufacturer) immediately escalate and forward any according information and notices downstream in the supply chain to prevent affected Contract Products from entering the market or procuring that they be returned. The same applies to any FSNs to be disseminated in conjunction with an FSCA.

8.2 In the event Competent Authorities order the implementation of any FSCA concerning Contract Products, Distributor shall seek alignment with Stryker (provided Stryker carries out the responsibilities of the Legal Manufacturer or is authorized to act on its behalf) and coordinate its actions with Stryker in the interest of device safety. 

9. Storage and handling

9.1 As a part of its quality system, Distributor shall ensure that, while the Contract Products are under its responsibility, storage or transport conditions comply with the conditions set by the Legal Manufacturer which may be restated by Stryker on behalf of and authorized by the Legal Manufacturer. This shall include a monitoring of expiry dates and a shelf-removal of expired Contract Products.

9.2 Particularly, Distributor shall ensure that the Contract Products and spare parts are stored in warehouses which meet Stryker’s specifications, as advised from time to time but which, at a minimum, must:  (i) protect against environmental and other external factors which could affect the quality and function of the Products and spare parts such as, but not limited to: lighting, humidity, airborne particulate and microbial contamination; (ii) comply with all fire safety regulations. Distributor shall refrain from changing, amending, deleting, removing or translating any labels or IFUs and/or repackage any Contract Product. Distributor shall further refrain from modifying, amending, adulterating, reprocessing or otherwise interfering with Contract Products' material integrity.

9.3 Distributor shall further implement a documented preventive pest control system, designed to prevent contamination of the Contract Products and any related materials (including spare parts), which shall include regular inspections and routine bait laying and/or insecticide spraying.

9.4 Particularly, Distributor must establish and maintain procedures for control of storage areas and stock rooms for Contract Products to prevent damage, deterioration, contamination, or other adverse effects pending distribution to the end user in accordance with the storage requirements of the Product set out on the Labels or in the IFUs. In any event, Distributor shall ensure the following conditions:

9.4.1 Non-conforming products shall be segregated from the other products to avoid any error in shipping non-conforming products to customers.

9.4.2 Temperature control. Where labelled storage requirements indicate storage at specific temperature ranges, Distributor must control the temperature at the area where Product is stored minimum one (1) time per day. Record and evidence of temperature control must be kept and be readily available for inspection or audit. 

9.4.3 Ambient or temperature-controlled Product Shipment. Distributor must use double wall corrugated shippers when distributing Stryker Products.

9.4.4 Distributor may not under any circumstances re-label any Stryker products, nor modify the manufacturer's original Product packaging or labelling. In particular, but not exclusive to:i. Sterile product packaging.ii. Multiple units packaging. iii. Furthermore, it is strictly forbidden that any units shipped as a multiple unit be sold as singular entities.

10. Verification of visible MDR compliance features

10.1 Stryker undertakes to ensure that all Contract Products supplied to Distributor are appropriately CE marked, bear appropriate Labels, are accompanied by proper IFUs (provided either in the form of package inserts or electronically), and are covered by a pertaining Declaration of Conformity, a copy of which (physical or electronic, most recent versions) Stryker shall make available to Distributor. Moreover, if applicable Stryker will ensure that Contract Products show on the Label or in a separate document the company name and address of the EU Importer, and if applicable have been assigned with an UDI.

10.2 Distributor shall verify that the Contract Products received: - are CE marked - are accompanied by a Label and IFU meeting local language requirements to the extent applicable - are covered by a Declaration of Conformity - if applicable, indicate the company name and address of the importer- if applicable, carry a UDI

10.3 For conducting the aforementioned verifications, Distributor may employ sampling methods, which are representative for the batches or deliveries of Contract Products received.

10.4 Distributor shall record and retain the outcomes and data resulting from the aforementioned verifications, including a documentation of the sampling algorithms if such were applied. The retention periods stated in paragraph 4 above shall likewise apply.  

10.5 The obligations set out by this paragraph 10 shall:- apply to all Contract Products including Early MDR-ready Products (as referred to in Recital A) only as of May 26, 2021 (in derogation of paragraph. 14.2, 2nd sentence, hereof);- not apply at all to Transitional MDD Products (as referred to in Recital A).

11. Kit process, cleaning, disinfection

11.1 Distributor must have the infrastructure and the process/system in place according to local law in country to clean and disinfect all flying kits. 

11.2 Distributor must implement a process/system using a disinfection solution that is recommended in the instructions for use.

11.3 All information/data relating to the effectiveness of the disinfection process must be verified and documented by the Distributor. 

11.4 In the event that no disinfection equipment/process is available, the following is accepted: (i) A disinfection or sterilization certificate for the flying kit from the hospital post-surgery.

11.5 All flying kits must be returned to the Distributor before it is utilized by the hospital and be inspected/processed for the following:
i. Cleaning & disinfection.ii. Visual & functional inspection.iii. Verification of traceability for used and replenished implants.

11.6 Inspection process must be properly documented into an adequate procedure.

11.7 Transfer of any device/equipment directly between end users (hospitals) is strictly forbidden.

12. Outsourcing, Subcontracting

12.1 To the extent Distributor outsources or subcontracts any activities relevant for or otherwise impacting Distributor's compliance with the terms of this Quality Agreement (e.g. retention of warehousing, logistics or data processing services), Distributor shall ensure, through the conclusion of according contracts, that the retained service providers adhere by the same requirements and standards as set out in this Quality Agreement. 

12.2 To the extent Distributor supplies or commercializes any Contract Products to other distributors (wholesalers, retailers, sub-distributors) rather than to end-users, Distributor shall ensure, through the conclusion of according contracts, that such other distributors meet and satisfy equivalent regulatory and quality requirements and standards as set forth by this Quality Agreement. 

12.3 Upon Stryker's request Distributor has to present a copy of the aforementioned contracts for an audit by Stryker (with confidential commercial terms redacted).

13. Contacts, notices, information channels, Audits 

13.1 Each Party shall appoint a key contact person in charge of the overall management and supervision of the interactions and exchanges of information resulting from this Quality Agreement. 

13.2 Distributor agrees to grant access to its premises, records and critical personnel related to the performance of this Quality Agreement to the following parties for purposes of conducting audits with the objective of inspecting Distributor's compliance with the MDR and with this Quality Agreement: designated representatives of Stryker and/or of the Legal Manufacturer of Contracts Products including Notified Bodies of the latter, as well as Competent Authorities. With the exception of potential unannounced audits permitted by Applicable Laws, Distributor shall be given adequate advance notice of requested audits. In case Distributor is audited or inspected by a Notified Body or a Competent Authority without prior involvement of Stryker or any of Stryker’s affiliates, Distributor shall inform Stryker without undue delay about the outcome and any findings resulting from such audit or inspection, and remedy all potential deficiencies ascertained by the Notified Body or Competent Authority, if any.

14. Term and termination

14.1 This Quality Agreement enters into force at the date the Distribution Agreement is signed (the “Effective Date”) and terminates "X" years after the last making available on the market of a Contract Product by Distributor. For implantable Contract Products "X" amounts to 15 (fifteen) years, and for and for non-implantable Contract Products to 10 (ten) years.

14.2 By default the Effective Date is May 26, 2021, except for Contract Products which are Early MDR-ready Products (referred to in Recital A) for which Stryker had indicated to Distributor premature MDR compliance prior to May 26, 2021 (by way of notifying Distributor of the applicable batch or lot numbers). For Early MDR-ready products the Effective Date is identical with the date when Distributor is supplied with, and gains possession of, the respective medical devices. 14.3 For either party the right to termination for good cause by written notice remains unaffected.

15. Remuneration, expenses

15.1 For the avoidance of doubt, neither Party shall be entitled to claim from the other Party any compensation, remuneration or reimbursement of costs in connection with the performance of this Quality Agreement. 

16. Final Provisions

16.1 This agreement constitutes the entire agreement between the Parties with respect of the subject matter hereof and supersedes all previous agreements between the Parties with respect of the subject matter hereof. Amendments to this agreement must be made in writing; this also applies to this written form clause.

16.2 If any term or provision or any part thereof contained in this agreement shall be declared or become unenforceable, invalid or illegal in any respect, the validity of the other provisions of this agreement shall remain unaffected thereby. In such case the Parties replace the unenforceable, invalid or illegal provision by a provision which comes closest commercially to the will of the Parties as expressed by the replaced provision.

16.3 This agreement shall be subject to the laws and the place of jurisdiction governing the Distribution Agreement.