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))MAGNA PHARMACIA< d.o.o.

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DISTRIBUTION AGREEMENT

THIS TRIPARTITE DISTRIBUTION AGREEMENT ("Agreement") is effective as of

November 2015 ("Effective Date") by and between:

Zimmer GmbH, a company duly organized and existing under the laws of
Switzerland with its registered office at Sulzerallee 8, 8404 Winterthur,
Switzerland;

"Zimmer"
and

Biomet Global Supply Chain Center 8.V., a company organized and


existing under the laws of the Netherlands, with its registered office at
Toermalijnring 600, 3316LC Dordrecht, the Netherlands.

"Biomet"
Zimmer and Biomet will be referred to jointly as "Sellers"

and

Magna Pharmacia d.o.o. Beograd, a legal entity duly organized and


existing under the laws of the Republic of Serbia having its legal address and
offrces in Milutina Milankovia 7b, 11070 Belgrade, Serbia (hereinafter the
"Distributor").

"Distributor"
Sellers and Distributor will be referred to collectively as the "Parties" and
individually as a "Partr".

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Zimmerbiomet / Magna/ Distribution Agreement

Preliminary remarks

(A)

Sellers are member companies of the Zimmer-Biomet group (hereinafter referred to as


'oZimmer-Biomet"), headquartered in Warsaw, Indiana, USA, which are dedicated to
develop, manufacture and market orthopaedic reconstructive, spinal and trauma devices,
dental implants, and related medical devices.

(B)

Notwithstanding the above, Sellers operate as separate legal entities which each sell and
deliver the Products (as defined below) to Distributor separately.

(C)

Distributor is in the business of, and has experience in, marketing and selling products
similar to the Products. Distributor desires to market and distribute Sellers' Products in
the Tenitory (as defined below).

(D)

Sellers desire to have the Products marketed and distributed by Distributor in the
Territory. The sale and delivery of the Products from Sellers will be conducted separately
between Distributor and Zimmer on the one hand and between Distributor and Biomet on
the other hand. Despite this separation, the terms and conditions of the sale and delivery
from Sellers to Distributor shall be carried out on the basis of this Agreement.

(E)

This Agreement amends and replaces the Distribution Agreement by and between
Distributor andZimmer in force as of 1 February 2015.

NOW THEREFORE, in consideration of the mutual undertakings and covenants contained


herein, the Parties agree as follows:

Terms and conditions

l.

Definitions

1.1

Unless the context clearly requires otherwise, as used herein, the following capitalized
terms shall have the following meanings:

Affiliate(s)

means with respect to a specified Party to this Agreement,


any individual, association or other entity that directly or
indirectly controls, is directly or indirectly controlled by, or
is directly or indirectly under common control with such
specified Party, For purposes of this definition, "control"

(including "controlling," "controlled by," and "under


common control with") means owning fifty percent (50%) or
more of the outstanding voting securities of an entity, or
otherwise possessing, directly or indirectly, the power to

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direct or cause the direction of the management and policies

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Zimmerbiomet / Magna/ Distribution Agreement

of an individual, association, or other entity, whether


through the ownership of voting securities, by contract or
otherwise;

Agreement

means this Exclusive Tripartite Distribution Agreement, as


the same may be amended or supplemented from time to
time in accordance with its terms and conditions;

BIS

means the U.S. Bureau of Industry and Security;

Bribery Act

is defined in Section

Change of Control

(i) a direct or indirect change in ownership of more


than 20% of the voting (common) shares directly or
indirectly held in the share capital of Distributor, or (ii) a

I3 of Annex D of this Agreement;

means

sale of the majority of the operating assets of Distributor;

CMR

to in Section 4.8 means the "Convention relative


au contrat de transport international de Marchandises par
route", a standardized document for cross-border transport of
as referred

cargo by road;

Condition

is defined in Section 15.1 of this Agreement;

Distributor

means the party as defined

in the first page of

the

Agreement;

EU

means European Union;

FCPA

is defined in Section I 3 of Annex D of this Agreement;

FSCA

means a Field Safety Correction Action as defined in Section

8.4 of this Agreement;

FSN

means Field Safety Notice as defined in Section 8.4 of this


Agreement;

HSC

is defined in Section 14.2 of this Agreement;

Initial Term

is defined in Section

Instruments

is defined in Section 5.1 of this Agreement

Intellectual Property

is defined in Section 12.1 of this Agreement

ISO

me an s

Italian Law 231

shall have the meaning as defined in Section I 3 of Annex D ,"ro "*,il:.ir|


of this Agreement

Minimum Purchase

is defined in Section 4.1 of this Agreement

1.1 of this Agreement

the Internati onal Or gan ization for S tandar dization

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Zimmerbiomet / Magna/ Distribution Agreement

Requirements

I3

of Annex D of this Agreement

OECD Bribery Convention

is defined in Section

OFAC

means the U.S. Treasury Department's Office


Assets Control

Products

is defined in Section 2.1 (a) of this Agreement

Relevant Agents

is defined in Section

Renewal Term

is defined in Section 11.2 of this Agreement;

Reporting Incident

is defined in Section 8.1 of this Agreement;

Restricted Party Lists

is defined in Section II c of Annex D of this Agreement;

Sellers

means Zimmer GmbH and Biomet Global Supply Chain


Center B.V.;

Termination

is defined in Section 14.1 of this Agreement;

Territory

means the region as set out


Agreement;

Trade Control Laws

shall have the meaning as defined in Section


of this Agreement;

Trademarks (Product and


Corporate Trademarks)

is defined in Section I2.2 of this Agreement;

VAT

means value added tax; and

Zimmer-Biomet

is defined in Preliminary Remark A.

I 1 of Annex D of this

in

of Foreign

Agreement

Section 2.1 (a)

of

this

II of Annex

1.2

Headings. Headings are used herein to facilitate the reading and do not define or affect in
any way the meaning and interpretation of this Agreement.

1.3

References. Unless the contrary intention appears, a reference to an article, section or


schedule is a reference to an article, section or schedule of or to this Agreement.

t.4

Conflict of Terms. In case of a conflict or inconsistency between a provision in the main


part of this Agreement and a term in any of the schedules or other documents referred to
or otherwise incorporated into this Agreement, the provision in the main part of this
Agreement shall take precedence, unless the schedule or other document which is
incorporated into this Agreement expressly states the contrary.

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Zimmerbiomet / Magna/ Distribution Agreement

2.

Purpose and Right of Sale

2.1

Grant of distribution rights and license to Intellectual Property rights. As of the


Effective Date, Sellers grant to Distributor and Distributor hereby accepts:

(a) an exclusive right to market and sell in the territory of Republic of Serbia hereinafter
the "Territory") the products as set out in detail in Annex A1 with respect to Zimmer
and Annex A2 with respect to Biomet hereto (hereinafter the "Products") which are
supplied by Sellers in accordance with the terms and conditions of this Agreement;
and

(b) an exclusive license to use in connection with the marketing and sale of such Products
within the Tenitory the Intellectual Property in accordance with Section 12 of this
Agreement.
2.2

Variation of Product lines. Sellers, at their sole discretion, may, on a 60 (sixty) days
prior notice to Distributor, cease to sell any of the Products, provided that (i) the orders
received and accepted before the effective date of such notice shall be filled, and (ii)
Sellers shall continue to supply to the Distributor any such Products necessary to fulfill
obligations of the Distributor related to on-going, already awarded tenders or supply
contracts, to the extent such Products are available in Sellers product portfolio and
available in sufficient quantities. In case the Sellers would intend to cease with sale of
any of the Products pursuant to this Section 2.2, they will in advance request from the
Distributor information on its expected requirements for any such Products in the next 12
months period and upon receiving such information the Sellers undertake to ensure
sufficient quantities of any such Products to satisff notified expected requirements of the
Distributor.
By way of exception, Sellers shall have the right to cease to sell any of the Products
immediately, if requested to do so by a regulatory authority or mandated by applicable
laws, rules or regulations, including but not limited to a product recall according to
Clause 8.3.

Likewise Sellers may from time to time add new products to their product lines for the
sale and delivery in the Territory and Distributor agrees to actively solicit sales for such
new products in the Tenitory in accordance with the terms and conditions of this
Agreement. Any such notice is as a modification to Annex A1 or Annex A2, provided
that Zimmer or Biomet provide Distributor with an updated version of Annex A1 or
Annex A2 concurrently with such notice.

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Zimmerbiomet / Magna/ Distribution Agreement

3.

Distributorfs Obligations

3.1

General obligations. Without prejudice to any other obligations under this Agreement,
Distributor hereby undertakes:
(a) to distribute the Products in the Territory under their original brand names and in their
original condition and packaging;
(b)

to import, purchase and resell the Products under its own name and for its own
account and consistently use its best efforts to sell the maximum amount of Products
in the Territory;

(c) to assign a minimum of 5 (five) fully trained Product sales representatives who shall
devote themselves exclusively for the performance of Distributor's obligations
hereunder with regard to the Products. Distributor shall bear all costs and expenses,
including all salaries and other benefits costs of its employees related to the
performance of such efforts. Distributor specifically acknowledges and agrees that the
continued manning of a dedicated sales force as specified above is a fundamental
element of this Agreement;
(d) to participate in compliance with any relevant industry code and instructions of Seller
at its own costs in any local trade shows for orthopaedic products and to prominently
display and market the Products during such events;
(e) to submit to Sellers for prior written approval all marketing materials, including but
not limited to local labelling to accompany the sales of Products , and, when required,
ensure that such materials are adequately translated by a certified translator;

( to submit to Sellers information relating to Distributor's inventory level of Products,


sales reports including sales forecasts and general market conditions, all in a format
acceptable to Sellers and at reasonable intervals in order to assist Sellers in the
worldwide statistical analysis and production planning. Distributor shall submit
detailed inventory forecasts by product grouping to Sellers on a quarterly basis.
Distributor further agrees to inform Sellers of its planning and budgeting for matters
relating to Sellers' Products;

(g) to submit to Sellers information relating to the hospital sales data including sales in
LC and units per brand by month and versus prior year, monthly reporting on market
and competitor activities, marketing activities, opportunities and threats to the
business as well as new & lost accounts specifications, all in a format acceptable to
Sellers and on a monthly basis in order to assist Sellers in the worldwide statistical
analysis and production planning. Representatives of Distributor and Sellers shall
meet on a half year basis to discuss such analysis;
(h) to provide to Sellers, if requested, upon demand and on a quarterly basis for a period
to be communicated by Sellers, information on the respective volume of identifiedl
Products sold directly or indirectly to specific hospitals, which names will befl

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Zimmerbiomet / Magna/ Distribution Agreement

provided by Sellers to the Distributor in a form of a report. Said report is necessary


for Sellers in order to record the sales to hospitals in the Territory where surgeons are
employed and who have development and license agreements with Zimmer or Biomet
on identified Products. Under said agreements, royalties are due based on sales
calculations which should exclude the sales to the above mentioned specific hospitals
on the identified Products. Therefore, Distributor agrees, in case specifically
requested by Zimmer or Biomet, to complete and retum to Zimmer an electronic
reporting form with the above mentioned requested information, within a time line
defined by Zimmer or Biomet.

(i) to advise

Zimmer or Biomet, in writing, of each bid which Distributor proposes to


submit in response to an invitation to bid for the purchase, when that bid requires the
purchase by Distributor from Zimmer or Biomet of at least USD 25,000.00 worth of
products and requires a delivery date for the Products by Distributor in less than
ninety (90) days from the date of the award of the contract. Sellers respectively shall
promptly notify Distributor, in writing, whether or not it or they will undertake to
supply Products under said bid should said bid be accepted;

0) to handle and store the Products in strict

compliance with instructions given by


Zimmer and Biomet, avoiding contamination (from or of other products) and
deterioration by light, moisture, temperature or other environmental influence and in
any event to comply with the guidelines and recommendations issued by the health
authorities, as well as in accordance with the requirement for storage of medical
devices, applicable in the Territory. Distributor shall strictly observe the first-in-firstout principle in relation to the Products unless important reasons warrant a deviation
from the principle;

(k) to strictly comply with any and all special storage conditions required for a Product as
stated in the package insert andlor product label. Records of monitoring activities
demonstrating compliance to the specified conditions will be maintained throughout
the storage and distribution process;

(l) to maintain, during

and after the termination or expiration of this Agreement, an


accurate system of record keeping that will make it possible to trace precisely the
Products from placement of order with Zimmer and Biomet up and until delivery to
the end-customer, including all significant events which may occur during the
purchase, delivery, storage and distribution of the Products. Zimmer and Biomet's
representatives are authorized to have access to these records upon simple notification
to Distributor and to receive a copy of these records. In the event Distributor sells to a
third party who is not an end-customer, Distributor shall use its best efforts to impose
the same obligation on such third party. In case such third party refuses to accept
such obligations, Distributor shall document and record the reasons for such
deviations and obtain Sellers'written approval prior to deliver Products to such third
pafty. Distributor shall locate, retrieve and return Products in the event of a product
recall. Any costs and expenses arising out of such corrective action shall be bome

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Zimmerbiomet / Magna/ Distribution Agreement

Zimmer and Biomet, unless and to the extent the FSCA is attributable or caused by
Distributor.

(m)to maintain in strict confidence and not use except for the purpose of this Agreement
any confidential information furnished by Zimmer or Biomet hereunder, and shall
impose the same obligation upon its employees, sub-contractors and sub-distributors
during the present Agreement and 7 (seven) years after its termination or expiration,
unless and until the said information has entered the public domain, by no fault of the
Distributor, or in case Distributor is obliged under any law or public authority ruling,
decision and/or resolution to disclose such information;
(n) to diligently provide, under its own responsibility and expense, for delivery and
installation of the Products and, if customers so request, maintenance of the Products,
according to Zimmer and Biomet's regulatory and quality policies as cotmunicated
to Distributor by Zimmer and Biomet. Distributor shall not undertake, either
intemally or by third parties, any servicing or repair of Products of Sellers without
prior written approval from Zimmer or Biomet;
(o) to comply with the general concepts of quality management and quality systems as
described in ISO 13485. Distributor shall support quality audit activities carried out
by Sellers and their notified body, if appropriate. This may include on-site auditing
during normal business hours and following a notice, delivered to Distributor no less
than 5 (five) business days in advance;

(p) to fulfill all orders of its customers in a way that ordered Products are dispatched and
invoiced to customers as soon as possible after receipt of the respective order from
Zimmer or Biomet;
(q) to inform customers within the Territory about the Products available for sale and to
receive and process orders from customers within the Territory for Products as per the
terms and conditions of this Agreement. Distributor hereby accepts such appointment
and undertakes to use every reasonable effort to create and maintain a market for and
to increase the sale of Products in the Territory but in doing so to comply with the
policies and procedures notifiedby Zimmer and Biomet to Distributor from time to
time as well as with any applicable law. Distributor should endeavor to respect the
rights of and deal fairly with Sellers' customers, suppliers, competitors and
employees. Distributor should not take unfair advantage of anyone through
manipulation, concealment, abuse of privileged information, misrepresentation of
material facts, or any other intentional unfair dealing practice;

(r) to prepare together with the Sellers a filing for the individual

exemption
from the competent competition authority of the Territory, if applicable, and in
event to strictly abide by any competition laws and regulations applicable in
Territory; and

(s) to offer all practicable and administrative assistance in the collection of Zimmer and
Biomet receivables outstanding in the Territory at the time this Agreement was

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Zimmerbiomet / Magna/ Distribution Agreement

entered into and, if applicable, to transfer any monies collected


Biomet without delay upon receipt.

to Zimmer

and

3.2

Obligations to discharge tax and duties. Distributor shall have the complete and sole
responsibility for the payment of any tax obligations resulting from this Agreement,
including for import taxes, unless otherwise provided for in conformity with the product
supply terms set out in Section 4. Further, it will have no recourse to Zimmer or Biomet
in the event of failure to comply with any relevant tax regulations.

3.3

Appointment of sub-distributors. Distributor may only appoint any sub-distributors


with the prior written approval of Sellers, which approval may be given or withheld in
Sellers' sole discretion. In case of an appointment of a sub-distributor by Distributor,
Distributor shall ensure that the sub-distributor complies with all applicable regulations
and laws as well as with the terms and conditions of this Agreement. An individual or
entity shall only be eligible to become a sub-distributor for the Products if such person or
entity has been approved by Sellers and such person or entity has complied with any
requirements that Sellers may have established from time to time for sub-distributors.
Throughout sub-distributor's engagement, Distributor must ensure that such subdistributor does not violate any terms and conditions of this Agreement. Distributor and
sub-distributor shall have joint and several liability to Zimmer and Biomet for their
performance under this Agreement. All approved sub-distributors shall be entered on
Annex F.

3.4

Appointment of sub-contractors. Should Distributor engage any sub-contractors for


performance under this Agreement, Distributor will be solely liable for the activities of
any sub-contractors.

3.5

Compliance with Law. Distributor agrees that in performing its obligations under this
Agreement, it shall comply at all times to comply, with all applicable laws, regulations
and govemmental orders of the government of the Territory and of any jurisdiction in
which Distributor performs its obligations under this Agreement or that could otherwise
be applicable. Distributor's obligation regarding compliance with law and trade
compliance as well as with customs and import laws and regulations of the Tenitory is
specified in more detail in Annex D.

4.

Products Purchase Requirements, Prices and Sales Conditionso Product Resale


Conditions

4.1

Minimum purchase requirements. Non-binding target products purchases for 2016


(January 1s1,2016 to December 31st, 2016) are stated in Annex Bl with regard to
Zimmer and Annex 82 with regard to Biomet ("Target Purchases"). Minimum Products
purchases requirements are for the purposes of this Agreement set to 60Yo of the Target
Purchases

("Minimum Purchase Requirements"). The Target

Purchases and Minimum

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Zimmerbiomet / Magna/ Distribution Agreement

of initial start-up inventory


of Products (Section 10.1) and Instruments supplied. However, for the avoidance doubt,
the Target Purchases and Minimum Purchase Requirements for the year 2016 shall
include all Products ordered by Distributor under the Distribution Agreement concluded
by and between Distributor and Zimmer that was in force as of 1 February 2015. For the
contract period 2017 and thereafter, Distributor together with Zimmer and Biomet shall
establish annually before 15 October of each year, the annual Minimum Purchase
Requirements for the succeeding year for the Products including the amount of sales in
the market and distribution coverage. In the event the Parties fail to agree in respect of
Minimum Purchase Requirements levels for any succeeding year, the Minimum Purchase
Requirements for the preceding year plus 10% (ten percent) will become the Minimum
Purchase Requirements for that year. If Distributor fails to meet the Minimum Purchase
Requirements, Sellers shall be entitled to (i) change Distributor's exclusive status into a
non-exclusive Distributor's status, after a written notice thereof has been provided to
Distributor, or (ii) to reduce the Territory provided for herein, or (iii) to terminate the
Agreement in accordance with the terms and provisions of this Agreement
Purchase Requirements do not include any Product purchase

4.2

Orders fulfillment terms. In the absence of an event of force majeure, including without
limitation, strike or reasons beyond the reasonable control of Zimmer or Biomet or their
designees, Zimmer or Biomet or their designees undertake to fulfrll Distributor's orders
for Products within a reasonable time. If a delivery time is agreed upon with reference to
one or more specific orders, such delivery times shall be deemed indicative only and not
ofthe essence.

4.3

Product labels language. Zimmer and Biomet agree to provide the Products and related
instructions with labels in any required language(s) necessary in the Territory for
handling and delivering the Products.

4.4

Product sales support by Sellers. Sellers further agree to furnish Distributor with such
technical assistance as Distributor may reasonably request and that Sellers are capable of
fulfilling including without limitation sending one of their employees to Distributor.
Zimmer and Biomet will supply the Distributor with, among other things, technical
support the Distributor may reasonably require for the sales, after-sales service and
maintenance of Products sold in the Territory pursuant to this Agreement. Sellers shall in
particular assist Distributor in conducting and organizing sales meetings and clinics to
train Distributor's sales personnel free of charge. Such meetings and clinics must be
scheduled in advance by mutual agreement between Distributor andZimmer or Biomet.

4.5

Products price. The sales price for Products charged to Distributorby Zimmer or Biomet
will not change in2015, whereby they may change in2016, as a function of the cost of
the Products, economic developments and improvements of the Products. Zimmer and/or
Biomet will sell Products to Distributor at prices exclusive Value Added Tax FCA
(INCOTERMS 2010) point of shipment shown on the Zimmer Europe Export and
q

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Zimmerbiomet / Magna/ Distribution Agreement

Distributor Price List. Zimmer reserves the right, on 90 (ninety) days notice prior to any
shipment, to modi$ the prices of the Products. Zimmer and Biomet will supply annually
to Distributor estimates of Distributor net cost increases by the end of October.
4.6

Payment terms. Distributor agrees to pay Zimmer or Biomet or their designees the full
sales price of the Products as stated on the invoice of Zimmer or Biomet for each
shipment within 150 (one hundred fifty) days from the invoice date. Distributor agrees to
pay interest at the rate of one and a half percent (1.5%) per month on all overdue
invoices. Zimme.r and Biomet issue their invoices upon shipment of the Products. If
invoices are overdue for more than thirty (30) days, Sellers, at their sole discretion, may
(i) withhold all subsequent deliveries until the overdue account of Distributor is settled;
(ii) unilaterally modify all agreed credit and payment terms; and/or (iii) terminate this
Agreement as such default constitutes a material breach. Acceptance by Sellers of less
than full payment shall not be a waiver of any of their rights.

4.7

Debt collection. Distributor must pay all costs of collection, including, but not limited to,
reasonable attorneys' fees, court costs and collection agency fees involved in the
collection of (a) past due accounts; (b) amounts owed to Sellers by reason of Distributor's
breach of this Agreement; and (c) any and all amounts owed by Distributor to Seller for
any reason whatsoever.

4.8

Delivery terms. All deliveries of Biomet and Zimmer Products shall be FCA, GSCC
HAZELDONK, The Netherlands ICC 2010 FCA, Zimmer International Logistics
Eschbach, Germany ICC 2010, unless agreed otherwise. Distributor shall - at its own risk
and expense - affange for insurance for the Products to be transported from Sellers'
respective facility to their destination, with a reputable insurer, in line with the current
market practice in the industry. Upon request of Zimmer or Biomet, Distributor shall
provide Zimmer or Biomet, as soon as possible, but in any event before the Products are
offered for transport, with a copy of the insurance certificate. Upon request of Distributor,
Sellers can offer transport with Sellers' nominated carrier, for the risk and expense of
Distributor. If Distributor nominates and contracts a carrier, Distributor must send for
each shipment immediately, without the request of Sellers, sufficient proof of cross
border transport of the Products out of the country of delivery. Such proof can be in the
form of, but not limited to, standard shipping documentation, CMR Cargo letters signed
for receipt in the country of arrival, copies of freight invoices that specify the shipment,
export customs documentation, etc. which can be traced back to Sellers. If such proof
cannot be provided, Sellers are authorized to retrospectively (and with future shipments
that are transported in a similar fashion) add the applicable VAT rate to the deliveries to
Distributor for the Products including potential fines that may be levied by the relevant
tax authorities due to the incorrect application of the applicable VAT rate.

4.9

General provision on costs, duties and taxes relating

to the Products. All

transportation costs, forwarding agents' fees, port, dock and handling charges, insurances,

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Zimmerbiomet / Magna/ Distribution Agreement

tariffs, customs duties, and all applicable taxes, and any other costs of exportation after
leaving point of origin, including all costs of importation into the Tenitory, shall be
regulated by the INCOTERMS 2010 as provided within this Agreement.

4.10

Product resale price. Distributor is free to determine the resale price for the Products,
provided that in doing so, Distributor will respect any relevant and applicable price
regulations in the Territory.

4.ll

Credit limit allowed to Distributor. It is agreed that Zimmer and Biomet will authorize
Distributor for a credit [to be agreed upon credit limit]. Zimmer and Biomet have the
right not to satisfy Distributor's orders if the amount of Distributor's credit limit exceeds
the then agreed upon limits.

4.12

Maintenance of appropriate inventory assortments. Zimmer and Biomet agree to


assist in the balance and appropriateness of Distributor's inventory of Products by rotating
Products to a maximum value of ten percent (10%) of annual net sales each to Distributor

or USD 150,000.00 each whichever is less by issuing credit notes for the returned stock
and invoicing the replacement stock selected by Distributor, provided (i) that the
replacement stock is equal in value to the stock returned pursuant to this Section; (ii) that
the returned stock has a minimum of two (2) years shelf-life remaining at the time of
return; (iii) that the returned stock was purchased by Distributor in the previous two (2)
years; (iv) and that the returned Products are current, global Products, are in good
conditions and in their original packaging. Zimmer and Biomet shall charge Distributor a
restocking charge of ten percent (10%) of the net sales price.

4.13

Retention of title. The Parties agree that the Products sold by Sellers to the Distributor in
the Tenitory are sold with a clause providing expressly transfer of their title from
Zimmer or Biomet to the Distributor subject to total payment of the respective price, both
principal and accessory to Zimmer or Biomet. The foregoing provisions shall not prevent,
on delivery of the Products transfer to the Distributor of the risks of loss or deterioration
of the Products subject to the title reservation, as well as any damage that might be
caused. The Distributor must take out adequate insurance to cover such risks from the
moment of delivery of the Products. The Distributor shall not pledge the Products as
security or transfer their ownership as guarantee.

4.14 Marketing and medical

education contribution. Zimmer undertakes, during 2015, to


support the Distributor's expenses for Marketing and Medical Education with USD
100,000 (one hundred thousand US dollars) divided as follows:

Zimmer agrees to support or reimburse the Distributor, at a fair market value and only on
a presentation of supporting invoices from the organizing committees, with USD 25,000
(twenty five thousand US dollars) for national orthopedic congress, exhibition space,
similar congress and associated cost which take place in the Territory. Distributor shall
advise Zimmer in the prior quarter the date of the event.

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Zimmerbiomet / Magna/ Distribution Agreement

The further USD 75,000 (seventy five thousand US dollars) will be held by Zimmer to be
offset for Training & Education costs at Zimmer Institutes courses. The support shall be
comprehensive of registration costs, courses costs, accommodation and subsistence costs.
The airfares costs to the venue shall be for the Distributor's account.

5.

Conditions for the Supply of Loaned Instruments

5.1

Defnition of Instruments. For the purposes of this Agreement, Instruments means all
tools designed, manufactured and/or supplied by Zimmer or Biomet and are necessary for
the correct usage and implant of the Products by the authorized end users.

5.2

Supply of Instruments. Zimmer shall continue to provide, on a free loan basis, FOC
instrumentation for a value of USD 130,000 (one hundred thirty thousand US dollars) to
the Distributor. For the instruments delivered by Zimmer to Distributor (at Distributor's
request) in excess of this amount, Distributor shall pay to Zimmer remuneration in the
amount of 50o/o of manufacturing cost of any such instrumentation. From time to time the
Parties may agree to share the cost of instrumentation.

5.3

Unless otherwise agreed, the Instruments will be made available to Distributor by


Zimmer and Biomet on a free loan basis, subject to all terms and conditions herein set
out. To this end, Zimmer and Biomet will notify Distributor on the quantity and types of
Instruments they wish to consign to Distributor. Distributor may request that the
Instruments' assortment be adjusted by Sellers to reflect actual and documented market
needs. Otherwise the Distributor may not object to Zimmer's or Biomet's stated amount
of deliverable Instruments.

5.4

Instruments' value. Sellers upon supplying the Instruments shall, if they so elect, notify
Distributor of the Instruments landed value. Instruments' depreciation shall likewise be
accounted for, if at all applicable. If a value for the Instruments has been identified by
Zimmer or Biomet, Distributor shall be debited the Instruments' value in the event that
due to Distributor's fault they perish andlor are destroyed and/or are lost or otherwise
become no longer marketable for any reason.

5.5

Delivery of the Instruments and custody. The Instruments shall be delivered by


Zimmer or Biomet at their cost pursuant to DDP INCOTERMS 2010, Distributor's
warehouse, unless otherwise agreed in writing. Upon delivery, Distributor shall be
responsible for the Instruments' preservation and secure storage, until delivered to end
customers. To this effect, Distributor shall enter into and maintain throughout the
duration of this Agreement a proper all risks insurance policy with a minimum coverage
equivalent to the total landed value of the Instruments loaned. A copy of such an
insurance policy shall be provided to Zimmer and Biomet upon request.

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13t4

Zimmerbiomet / Magna/ Distribution Agreement

5.6

Sellers' retention of title. Sellers' title over the Instruments shall at all times be duly
acknowledged and signaled. To this effect, while at the Distributor's warehouse(s),
Distributor shall affix signs to identify the Instruments as Zimmer's or Biomet's property
and shall segregate the Instruments from other products in storage, including the
Products. Likewise Zimmer's and Biomet's title over the Instruments shall be duly
acknowledged in the contracts with hospitals, to which Distributor undertakes not to sell
but deliver the Instruments on a free loan basis. In the contracts with hospitals,
Distributor shall use its best efforts to insert clauses obliging hospitals to properly mark
the Instruments as Zimmer's or Biomet's property while in storage or use at the hospitals'
sites. Distributor shall at all times be forbidden from, pledging, selling or otherwise
dispose of the Instruments if not within the limits expressly provided hereunder.

5.7

Instrumentso tracking. Distributor on the fifth (5th) business day of each month shall
provide Zimmer and Biomet with an updated monthly tracking list detailing for each
Instrument the current location and actual usage. Each monthly tracking list shall be
drawn up in accordance with the format requested by Sellers, if any, and shall in any
event reflect the location and usage status of the Instruments at the given date, regardless
of any redundancy (i.e. each tracking list shall repeat for the Instruments the same
tracking details as set out in the previous monthly list if these have not changed).

5.8

Restitution of the Instruments. Upon Zimmer's or Biomet's request, the Instruments


must be returned by Distributor by making them available at Distributor's costs for pick
up at the Distributor's warehouse or at the hospitals' site no later than 10 days after
receipt of such request. Distributor shall ensure that the sub-loan agreements for the
Instruments with hospitals specifically provide for Zimmer's and Biomet's right to claim
the Instruments back. For the avoidance of doubt the Instruments may be claimed back by
Zimmer or Biomet if (i) Zimmer or Biomet wish to replace the Instruments with other
Instruments of equivalent or higher performance and features and (ii) if the Distributor's
Product supply contract with a specific hospital is terminated or expired and the hospital
has used up the Products' stock supplied by Distributor so that the hospital is no longer
entitled to use the Instruments. Likewise the Instruments shall be returned (or the
Distributor undertakes to have them returned by the hospitals) upon this Agreement's
termination, subject to point (ii) above. To the extent practically possible, the Instruments
must be returned by Distributor in the same condition they were upon delivery, save for
normal wear and tear.

6.

Further restrictions on Distributoros Activities - Distributor's Warranties and


Representations

6.1

Further restrictions. Throughout the duration of the present Agreement the Distributor
is forbidden to do any of the following either directly or indirectly, in person or through
any appointed sub-distributor, ager., intermediary or Affiliates:

14t41

Zimmerbiomet / Magna/ Distribution Agreement

(a) to actively solicit sales of the Products outside the Teruitory. Distributor shall refrain
from advertising, maintaining a sales office offering Products of Sellers or keeping a
stock of Sellers' Products outside the Tenitory;
(b) to engage without prior written authorization of Sellers in the Territory directly or
indirectly or through its Affiliates, sub-distributors, agents, managers or employees,
in the manufacture, sale, promotion or distribution of similar or analogous products
which may be competitive with the Products in any manner whatsoever during the
term of this Agreement;

(c)

to purport, in its correspondence or

communications conceming the sale


Products, to be Zimmer's or Biomet's proxy, agent or representative;

of

the

(d) to give any explicit or implicit guarantee or declaration or promise in relation to the
Products, or to undertake any other such obligation on Zimmer's or Biomet's behalf,
save as expressly authorized in writing;
(e) to knowingly sell or deliver defective Products;

( to sell or make the Products available to customers or other end users who are not
authorized to use them under applicable law;

(g) to use or to disseminate information or promotional material mentioning the Products


or any information on intellectual property or on Products, without obtaining
Zimmer's or Biomet's written approval of that material beforehand;
(h) to describe the Products otherwise than as indicated by Zimmer or Biomet; and

(i) to disclose information

on Zimmer's or Biomet's marketing strategies, activities or


initiatives, or anticipate in any way the launch of new Products, without obtaining
Zimmer's or Biomet's prior written approval.

6.2

Distributor's representations, warranties, undertakings and acknowledgments.


Distributor hereby represents, warrants, undertakes andlor acknowledges to Sellers:
(a) that it is a company duly formed and still incorporated under the applicable laws and
has obtained all authorizations, licenses, and permits necessary to carry on the
activities required under this Agreement;
(b) that is shall at all times conduct its activities under this Agreement in strict
compliance with all applicable rules, regulations and laws now or hereafter in effect
in the Territory;

(c) that the person signing and executing this Agreement is duly empowered to legally
represent the Distributor and duly commit the Distributor to all obligations provided
for herein;

(d) that neither the signing nor the execution of the present Agreement constitutes a
breach of any other contract to which the Distributor is party;

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15t41

Zimmerbiomet / Magna/ Distribution Agreement

(e) that it is not in a state of insolvency, subject to bankruptcy, agreements with creditors
or other insolvency proceedings, and that, as of today, no applications for the
institutions of such proceedings have been filed;

(f) that it has adequate

management, sales force and facilities (including warehouse


facilities, business offices and clerical staff) to acquire and maintain a reasonable
stock of Products as required under Section 10 below and to sell and promote the sale
of Products as herein provided and generally to perform all of its obligations under
this Agreement. Zimmer and Biomet shall have the right during business hours to
inspect said Distributor's facilities including its warehouse and offices, subject to
advance notice of3 (three) business days; and

(g) that it is not entitled to any compensation and Zimmer or Biomet are not liable for
any loss of sales resulting from any sales, active or passive, made by any other nonSerbian distributor or agent of the Sellers in the Territory.

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16t41

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Zimmerbiomet / Magna/ Distribution Agreement

6.3

Sellers' entitlement to audit and inspection. Zimmer and Biomet and their agents shall
have the right during Distributor's standard business hours, to inspect the matters listed in
this Agreement and examine the databases, data, records and books of Distributor, upon a
request submitted three (3) business days in advance to do so, where Zimmer's or
Biomet's inspection request relates to the inspection of materials which Zimmer or
Biomet reasonably believe are needed to enable them to assess Distributor's compliance
with all of its obligations, representations, warranties, acknowledgments and
undertakings set forth in this Agreement andlor to respond to an inquiry of any regulatory
or any other governmental authority. The written request for inspection shall state with
full details of the reason for the inspection. The inspection shall be limited to information,
databases, data, records and books relevant to Zimmer's or Biomet's legitimate purpose.
Distributor shall designate in writing immediately after having received Zimmer's or
Biomet's audit request an employee to serve as Zimmer's or Biomet's contact person in
connection with the request for and the conduct of such inspection. Distributor shall
permit Zimmer and Biomet to conduct the audit and inspection pursuant to this Section
during the term of this Agreement and after this Agreement's expiration, non-renewal or
early termination, for that time period which is mandated by the statute of limitations
under the applicable laws in respect of that matter.

7.

Products' Registration and Promotion

7.1

Providing product documentation and registration reports. Zimmer and Biomet will
transfer to Distributor necessary documentation for registrations of the Products with
health authorities in the Territory, if such registration is required. Further, Zimmer and
Biomet shall make available, free of charge, such data and registration reports to the
extent that they are available and required and will facilitate registration in the Territory.
The Distributor is obligated to order only products that are registered in compliance with
local registration requirements.

7.2

Registration of Products. Distributor shall arrange any local registrations, approvals,


licenses or other official measures concerning the Products that are required or will be
required in the future within the Tenitory. Any costs or expenses in connection with
obtaining such registration shall be for the account of Zimmer and Biomet, unless
otherwise agreed to by Distributor. Such registration shall be solely in the name of
Zimmer or Biomet (depending of the Product), unless prohibited by applicable law, in
which case they shall be held in trust for Zimmer and Biomet by Distributor and shall be
subject to transfer or cancellation at Zimmer's or Biomet's direction. Zimmer and Biomet
will hold responsibility for the Products as required by the Medical Device Directive
(EECl93l42). Distributor shall promptly inform Sellers and send copies of any
correspondence with the competent registration authority, including any approval records,

17141

Zimmerbiomet / Magna/ Distribution Agreement

submissions, local labels and package inserts. Upon request of Zimmer or Biomet, such
documentation shall be translated at the cost of Zimme or Biomet, as the case may be.
7.3

Consequences of expiry or termination on registrations. At the expiration or


termination of the Agreement, Distributor shall take all necessary steps in order to assist
and support with the transfer of such registrations to Zimmer or Biomet or at Zimmer's or
Biomet's direction to a third party.In addition, Distributor shall turn over to Zimmer and
Biomet all files relevant to Product registration.

7.4

Principles applicable to the Products promotion in the Territory. Without prejudice


to any other provisions of this Agreement relevant to the Products' promotion in the
Territory, the following specific provisions shall also apply:

(a) Zimmer and Biomet shall from time to time furnish to Distributor, free of charge, and
in reasonable quantities, literature, catalogues and technical brochures with respect to
the Products. Distributor will bear the cost of additional and specific advertising
conducted by it within the Territory. Advertising will be carried out in accordance
with the relevant requirements detailed in this Section and Section 3.1;
(b) Distributor shall also establish each calendar year for the following year and inform
Zimmer and Biomet thereof no later than 15 October a promotion program,
separating salesmen cycles and location, journal advertising, brochures, mailings and
conventions;

(c) Distributor shall be free to utilize all methods it deems desirable to promote the sales
of the Products in the Territory, provided however, that any advertising or
promotional material, regardless of format, generated by Distributor with regard to
the Products shall be done with prior agreement from Zimmer or Biomet and in
compliance with Territory regulation, and Sellers compliance policies as referred to in
Section 3.5 above;

(d) Distributor agrees to furnish to Zimmer or Biomet in advance, for prior approval
pu{poses, copies of any new brochures it may issue including any matters related to
the product claims. Zimmer and Biomet may decide that modifications are necessary
and should be made to these brochures if the wording used is capable of increasing
the liability or obligations of Zimmer or Biomet or their suppliers to third parties, and
in particular to towards Distributor's customers, or of otherwise adversely affecting
Sellers' interests;

(e) Distributor shall provide instruction to customers in the use of the Products and field
service for minor replacement of such Products.
8.

Incident reportso Products' Complaint, Recall Procedures and Field Safety


Corrective Action Procedures

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18t41

Zimmerbiomet / Magna/ Distribution Agreement

8.1

Reporting incidents. Distributor shall notify Zimmer or Biomet immediately (in any
case no later than one (1) business day of:

(i)

o'incident" or "death / unanticipated serious deterioration in state of health


or, serious health threat" as defined in the Guidelines on a Medical Device
Vigilance System (MEDDEV 2-l2ll rev 5 as may be amended or revised
from time to time) involving Products in the Tenitory; reported to Distributor
or that Distributor learns about regardless of the fact whether the product
involved was originally sold by Distributor.

(ii)

any complaints from users concerning the Products, packaging or Product


information complying with the reporting requirements of any applicable law

any

and

(iii)

any medically related claims


Territory

it is aware of concerning the Products in the

(hereinafter: "Reporting Incidents")

In so doing, Distributor shall follow the procedure set forth in Annex E.


8.2

Distributor's system for complaint collections. Distributor shall establish and maintain
an appropriate system for collecting complaints from users concerning the Products,
packaging or Product information complying with the reporting requirements of any
applicable law. In addition to the reporting requirement set out in Section 8.1 Distributor
shall, when required, facilitate product recalls and corrective actions as set out below in
Sections 8.3 and 8.4.

8.3

Requests for a recall by Zimmer or Biomet. A product recall can be requested by


Zimmer, Biomet or Distributor in the event that there is a reasonable basis for safety
concems relating to Products or as a result of other conditions mandated by applicable
laws, rules or regulations. The nature and urgency of any recall will be determined by
Zimmer or Biomet in consultation with Distributor. Once the decision to recall has been
taken, the recall witl be coordinated by Zimmer or Biomet and facilitated by the
Distributor. Distributor shall not submit any submission or report or other information to
any competent authority without the prior written consent of Zimmer or Biomet. Zimmer
or Biomet (as the case may be) shall bear the costs of any corrective actions and product
recalls, unless and to the extent that such FSCA or product recall was initiated for a
reasons attributable to or caused by the Distributor, in which case the costs attributable to
the Distributor shall be borne by Distributor.

8.4

Requests for a Field Safety Corrective Action by Zimmer or Biomet. A Field Safety
Corrective Action ("FSCA") can be requested by Zimmer and Biomet or the Distributor
in the event that there is a reasonable basis for safety concerns relating to Products or as a
result of other conditions mandated by applicable laws, rules or regulations. The nature
and urgency of a FSCA will be determined by Zimmer and Biomet in consultation with

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Zimmerbiomet / Magna/ Distribution Agreement

the Distributor. Once the decision to proceed with a FSCA has been taken, the FSCA will
be coordinated by Zimmer or Biomet and facilitated by Distributor. In particular,
Distributor shall inform all parties concerned by a Field Safety Notice (ooFSN"), and as
appropriate, assist in withdrawing Products from the market, as specified in the FSN.
Distributor shall further assist in communicating to Zimmer and Biomet the status of FSN
reconciliation. The status of FSN reconciliation shall be communicated to:
per.export@zimmerbiomet.com. Distributor shall bear its own costs and expenses of
any FSCA.
'Where

8.5

Coordination with Health Authorities.


required by local regulations, Distributor
must use best efforts to coordinate required activities, related to FSCA and complaint
reporting, with the local health authorities.

9.

Sellers'\ilarranty and Limitation of Liability

9.1

Sellers's Warranty. The warranty and liability of Zimmer and Biomet are separate and
limited to the Products delivered. For the avoidance of doubt, Zimmer does not warrant
or is liable for Products delivered by Biomet and vice versa. Zimmer and Biomet and
their designees shall warrant the Products against any manufacturing defects or defective
parts in accordance with the warranty forms then in effect for each type of Product and
under the conditions specified in such warranty. The remedies laid out in the warranty
form constitute the Distributor's exclusive remedy in case of non-conforming or defective
Products. Distributor undertakes to send Zimmer and Biomet a monthly statement
indicating the types and quantities of Products sold to its customers within the Territory
during the previous month and showing the serial number of the Products, if any, and all
other useful information, in order to permit Zimmer's or Biomet's warranty to be honored
where necessary. Distributor shall furnish to Zimmer and Biomet any and all assistance
reasonably required by it for the fulfillment of its warranty obligations for Products sold
by Distributor in the Territory.

9.2

Sellers' Liability. Regardless of the cause of action, whether in tort, contract or


otherwise, in no event will Zimmer or Biomet be liable for any direct, indirect or
consequential damages, for loss of profit or similar caused by any act or failure to act of
the Distributor or of persons for whom Distributor is responsible.

10.

Inventory and Aftersales Service

Minimum inventory. Beginning as of the effective date of this Agreement, Distributor


shall further continue to maintain a minimum inventory of not less than twenty-five
percent (25%) of the Minimum Purchase Amount with regard to Products of Zimmer
Biomet. Distributor undertakes to maintain consignment inventory with all relevant
further customers.

20t41

Zimmerbiomet / Magna/ Distribution Agreement

11.

Term and Termination

11.1 Term.

This Agreement is effective starting from January 1,2016 and is concluded for an
initial term of three (3) years ending on January 2019 ("Initial Term") This
Agreement will automatically expire without any further notice being necessary upon the
end of the Initial Term.

l,

ll.2

Renewal. This Agreement may be renewed in writing by both Parties before the end of
the Initial Term ("Renewal Term"), which renewal shall be for a maximum of two (2)
years. Distributor acknowledges and agrees that it will only be eligible for a potential
Renewal Term (which, in any event, shall be subject to Sellers' express written consent) if
Distributor has achieved the Minimum Purchase Requirements during the Initial Term of
the Agreement. Upon each Renewal Term, the Target Purchases and Minimum Purchase
Requirements as specified in Annex B shall be reconsidered by the Parties.

11.3

Sellers' termination rights for material breach. This Agreement may be terminated by
Zimmer and Biomet in the event of a material breach caused by Distributor.

V/ithout in any way limiting the foregoing, for pu{poses of this Section 11.3, Sellers are
entitled to terminate this Agreement with immediate effect by providing notice to
Distributor in the event that:
(a) there is a Change of Control at Distributor; or
(b) Distributor fails, with respect to any year during the Initial Term or the Renewal Term
of the Agreement, to meet the Minimum Purchase Requirements provided for in this
Agreement; or

(c) Distributor has failed, thirty (30) days after being requested to do so, to reapply for
renewal under Sellers'due diligence program; or

(d) Distributor fails to comply with Sections 3.3 through 3.5, Section 6.1 or noncompliance with applicable laws and regulations promulgated by any governmental
or regulatory agency of any country with respect to the performance of its obligations,
including but not limited compliance with the laws and regulations as outlined in
Section 3 and Annex D.

ll.4

Legal consequences of termination by Sellers. In the event of termination of this


Agreement, Zimmer and Biomet shall have the obligation to repurchase from Distributor
the latter's inventory of Products, accessories and spare parts. Zimmer andlor Biomet (as
the case may be) shall within sixty (60) days following the Distributor's request to that
respect repurchase or cause to be repurchased by a third party appointed by Zimmer
and/or Biomet at the invoice price excluding VAT from Distributor, all or a portion of ,
Distributor's inventory of Products, accessories and spare parts (at the choice of the I
Distributor), provided that such Products are in good condition, not obsolete, and wherel *o
delivered to Distributor less than twenty-four (24) months prior thereto. In such case, tne'

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Zimmerbiomet / Magna/ Distribution Agreement

Products and parts to be repurchased shall be made available to Zimmer and/or Biomet
within one (1) month after Distributor has informed Zimmer and/or Biomet (as the case
may be) of its decision to request repurchase of all or a portion of such Products or parts.
For the avoidance of doubts, if the Parties have agreed that certain Products be supplied
to Distributor on consignment, then those Products still in Distributor's stock at the time
of termination shall not be repurchasedby Zimmer or Biomet and shall nevertheless be
returned to the latter as soon as practical after termination.

11.5

Parties' termination rights. This Agreement may also be terminated immediately at the
option of either Party (i) in the event of the commencement of proceedings in
receivership, bankruptcy, or insolvency by or against the other Party or (ii) upon the
execution by the other Party of an assignment for the benefit of the creditors or
dissolution or liquidation of its business, whether voluntarily or by a third Party or (iii)
upon default in performance by the other Party which is not cured within thirty (30) days
after receipt of a formal notice of such default from the non-defaulting party by registered
letter or (iv) in the event the other Party engages in illegal transactions and behaves in a
manner to harm its own commercial reputation andlor that of the other Party.

11.6 General legal consequences of termination.

Upon termination of this Agreement for

any reason (including for expiration):

(a) all relevant files and records concerning the Products shall be handed over to Zimmer
or Biomet by Distributor without charge,
(b) Distributor shall immediately cease any activity howsoever connected or instrumental
to the Products' distribution in the Territory. Inter alia, and without any limitation
thereto, Distributor without Zimmer's or Biomet's written consent, shall not submit
bids in response to any hospitals' calls for tenders, including where at the time of
termination the relevant bid documentation has been already prepared by Distributor
and Zimmer or Biomet have contributed to it. Nevertheless, all available information
and details on any pending calls for tenders published by hospitals at the time of
termination shall be provided to Zimmer or Biomet without undue delay.

12.

Intellectual Property

l2.l

Intellectual property rights remain with Sellers. Distributor acknowledges that


Zimmer and Biomet, its Affiliates or its suppliers are and shall remain the owner of the
formulae, designs, symbols, trademarks, trade names, trading names, commercial names,
corporate names, divisional names, trivial names, inventors' names, Internet domain
names (whether registered as of the date of this agreement or that are registered thereafter
on the basis of the aforesaid trademarks and names) copyrights, package dress, package
and product colors, patents and all other copyrightable material such as but not limited to
product literature, engineering or architectural drawings, catalogues, packaging designs,
labeling, advertising material, audio-visual material, and computer programs (hereinafter r,

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Zimmerbiomet / Magna/ Distribution Agreement

jointly with the Trademarks as below defined collectively referred to as "Intellectual


Property") relating to the Products or otherwise entitled to make commercial use of the
Intellectual Property. Distributor acknowledges that it neither has nor shall secure by this
Agreement any right to any of Sellers', their Affiliates' or suppliers Intellectual Property.
Distributor agrees that the title to and the right to use all such Intellectual Property shall
at all times remain vested in Zimmer or Biomet, its Affiliates or its suppliers whether or
not such Intellectual Property is registered or recorded with the appropriate government
agencies.

12.2 Limited grant of intellectual property rights to Distribttor.

Zimmer and Biomet


hereby grant to Distributor, subject to all terms herein set out, a limited non-exclusive,
non-transferable, non-assignable, royalty-free license to use the trademarks of Zimmer
and Biomet relating to the Products (hereinafter the "Product Trademarks") or to their
businesses (the "Corporate Trademarks" and jointly the "Trademarks") solely in
connection with the performance by Distributor under this Agreement in the Territory
during the term and pursuant to the terms and conditions of this Agreement. This license
(i) is granted only to the extent that Distributor is reasonably required to use the
Trademarks for the sale and marketing in the normal course of business under this
Agreement; and (ii) shall automatically terminate (A) upon revocation by Zimmer or
Biomet of Distributor's right to use the Trademarks pursuant to the license granted herein,
andlor (B) upon termination of this Agreement, and in the event of any of the foregoing,
Distributor shall immediately upon the relevant date cease using the Trademarks and the
name of Zimmer or Biomet in any manner whatsoever.

12.3

Obligations of Distributor regarding licenses. The licenses under Section 12.2 above
are granted to Distributor subject to the following additional and not exhaustive express
limitations and undertakings by Distributor:

(a) not to alter the Trademarks nor in any way use them in combination with other
trademarks, symbols or marks apart from the Distributor's own company name,
provided that such a usage shall comply with all other provisions hereunder;
(b) not to use the Trademarks in any way liable to harm them or the associated goodwill
and in particular their reputation and recognition or their validity andlor distinctive
character and suitability (for instance through deceitful use of the Trademarks or use
of the brand nme as a generic term);

(c) not to use the Trademarks or signs confusingly similar with them beyond

the strict

provisions hereunder set out;

(d) to obey all Zimmer's and Biomet's instructions concerning the use and representation
of the Products andlor Trademarks, including any instructions given when material
and information for supporting distribution are provided under the present
Agreement;

(e)

not to alter the Products' packaging or labels;

23t41

Zimmerbiomet / Magna/ Distribution Agreement

(f) not to register or use the Trademarks

in its own name, nor any sign confusingly


similar therewith or other distinctive signs which may be linked to Zimmer or

Biomet, as a trademark, domain name, component of a complex or device trade mark


or in any other way, anywhere in the world, whether or not the Trademarks have
already been registered by Zimmer or Biomet or are de facto trademarks or qualify as
atypical distinctive sign (i.e. product packaging); and

(g) whenever using the Trademarks under Zimmer's

or

Biomet's authorization

hereunder, always to portray the mark along with the symbols indicating the nature
its registered status and the relevant owner.

of

12.4

(Potential) violation of Sellers' intellectual property rights. If Distributor believes that


third parties are infringing any of said Intellectual Property or are passing-off their
products as products of Zimmer or Biomet through the use of names, labels or packaging
similar to Zimmer's or Biomet's, their Affiliates' or its suppliers' Intellectual Property,
Distributor shall notify Zimmer and Biomet immediately but shall not, without the prior
written consent of Zimmer or Biomet, notify others or bring any legal proceedings or
enter into any administrative proceedings or take any other action against any such
infringement or passing-off. Distributor shall cooperate fully with Zimmer and Biomet,
their Affrliates or suppliers in the preparation or prosecution of any legal proceeding or
administrative proceeding.

12.5

Use of intellectual property rights after any expiration or termination. Following any
expiration or termination of this Agreement, Distributor shall not make use of the
Intellectual Property in any way. If any of such Intellectual Property then forms a part of
a Company Name of Distributor, or of any company owned or controlled by or in
common with Distributor then (whether or not this circumstance has been with the
consent of Zimmr.lr or Biomet or otherwise), Distributor shall immediately cause all
necessary steps to be taken to change such Company Name. Further, Distributor shall
remove the reference to Zimmer or Biomet or to any other Intellectual Property that is
owned by Zimmer or Biomet from the Company Name, if requested by Zimmer or
Biomet as a precondition to its authorization for Distributor to sell products in addition to
the Products.

12.6

Assignment of intellectual property rights. Upon request by Zimme.r or Biomet at any


time during the term of this Agreement or following its expiration or termination,
Distributor hereby assigns fo Zimmer and Biomet or their designees, all rights, titles, and
interests in and to all Intellectual Property including, but not limited to, material prepared
by Distributor, relating to the Products which would not be liable to copyright protection
which Distributor may have obtained inadvertently or otherwise, and Distributor agrees
to take all necessary steps and to execute any all documents upon request of Zimmer ofi
Biomet to effect this assignment to Zimmer and Biomet, their Affiliates or supplier. )
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Immediately upon termination of this Agreement, Distributor shall
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Zimmerbiomet / Magna/ Distribution Agreement

Distributor shall remove all references to Zimmer and Biomet or their trademarks and
trade names or those of its Affiliates or suppliers from its stationary, catalogues and
advertising.

13.

Indemnification

13.1 Distributor

agrees to indemnifu and hold harmless Zimmer and Biomet, their Affrliates
and suppliers, and their respective directors, officers and employees against any and all
claims, demands, proceedings, losses, reasonable costs and expenses which may be
brought against, suffered or incurred by any of them in consequence of any error, mistake
or negligence on the part of Distributor or any of its employees, agents, sub-distributors
or sub-contractors, in storing, selling or distributing any of the Products.

13.2

Each of the Parties agrees to indemnify and hold harmless the other Party against any and
all claims, demands, proceedings, losses, reasonable costs and expenses which may be
brought against, suffered or incurred by any ofthem in consequence ofany breach ofthis
Agreement on the part of the breaching Party.

14.

Mitigating actions in the event of hospital contracts' duration exceeding this


Agreement's termination or expiration.

l4.l

General safe harbor principles for existing contracts. The Parties acknowledge that
upon termination or expiration of this Agreement (hereinafter "Termination") there may
be Product supply contracts which, although awarded by hospitals to Distributor prior to
Termination, are in force and due to continue to apply for a given period of time over
termination. Considering the need for Distributor to secure that the Products may be
continued to be sourced from Zimmer or Biomet and supplied to hospitals up to the end
of the supply contracts with the same, and of the concurrent need to safeguard Sellers'
and Distributor's interests and rights, the Parties agree that they will take the mitigating
actions set out in this Section 14.

14.2 Mitigation plan. Within ten (10) business

days of this Agreement's termination,


Distributor shall provide Zimmer andlor Biomet with the following information: (a) a
complete list of all existing hospital supply contracts which as of the date of termination
have been awarded to Distributor and are still in force (hereinafter the "HSC"), detailing
the residual duration of each HSC and type of Products which are the object thereof (b)
details of all Distributor's account receivables towards hospitals as of the date of the
above mentioned list, including the relevant payment terms or overdue dates. Upon
submission of this information, the Parties shall meet and agree on a mitigation plan to
enable, where possible, the smooth handover to Zimmer or Biomet or Zimmer's or
Biomet's new distributor of the existing HSCs or, if this is not legally possible or
practical, to secure Zimmer's or Biomet's credit rights in respect of the Products and

.o.

25t

Eo,

Zimmerbiomet / Magna/ Distribution Agreement

Instruments supplied to Distributor. In particular, the mitigation plan shall contemplate


and regulate each of the following actions:

(a) Transfer of the HSCs to Zimmer or Biomet or their designated persons or entities in
the Tenitory at Zimmer's or Biomet's discretion; identification of all actions
necessary to achieve this objective; implementation plan with allocation of
responsibilities;
(b) If and to the extent that action under (a)above is not feasible, Zimmer or Biomet will
agree to continue to supply the Products and provide the Instruments to Distributor
under all terms and conditions of this Agreement and subject to the following
additional covenants:

Distributor within 30 (thirty) calendar days of Termination, shall inform all


hospitals to which the HSCs refer of this Agreement's termination and that in
spite of such termination Distributor will continue to supply the Products and
Instruments sets as well as any related services up to the HSCs' termination.
V/ith the same letter, Distributor shall invite hospitals to revert directly to
Zimmer and/or Biomet or their designated persons or entities for any other
inquiries not concerned with the HSCs. The contents of this letter shall be
agreed with Zimmer or Biomet prior to circulation;

(i

Distributor on the fifth (5t business day of each calendar month shall
provide Zmmer and Biomet with an updated list of information set out in
Section I4.2 above, with particular regard to the new Receivables accrued as
to the date of the updated list;

(ii

Distributor within thirty (30) calendar days of Termination shall enter with
Sellers into a framework agreement for the assignment by way of security of
all Receivables.

14.3

Post Termination award of HSC. The same mitigation plan shall be implemented in
respect of HSC which are awarded to Distributor after termination, if the relevant bid
offers were submitted by Distributor prior to termination.

14.4

Damages. In the event that Distributor fails to comply with any of its obligations set out
in Sections I4.2 and 14.3 within the prescribed deadlines, Zimmer and Biomet shall be
entitled to damages from Distributor up to an overall total aggregate amount of 150.000
Euro.

15.

Miscellaneous

15.1 Condition Precedent for Validity of

Agreement. This Agreement shall only


effective under the condition that Distributor has successfully completed the
diligence process of Sellers and has been approved by Sellers as a distributor (the

26t41

b.

Zimmerbiomet / Magna/ Distribution Agreement

"Condition"). Until the Condition is fulfilled by Distributor or waived by Sellers, this


Agreement shall not come into full force and effect. Neither Party shall be liable to the
other in any way for compensation or damages of any kind in connection with the nonfulfillment of the Condition.

15.2

Severability. If any provision of this Agreement is found by any competent authority to


be void, invalid or unenforceable, such provision shall be deemed to be deleted from this
Agreement and the remaining provisions of this Agreement shall continue in full force. In
this event, the Agreement shall be construed, and, if necessary, amended in a way to give
effect to, or to approximate, or to achieve a result which is as close as legally possible to
the result intended by the provision hereof determined to be void, illegal or
unenforceable.

15.3 \ilaivers. The failure by either Party at any time to enforce,

in whole or in part, one or


more provisions hereof shall in no way be construed as a waiver of its rights to enforce
such provision at any later time or to require the performance.

15.4

Relationship between Sellers and Distributor. The relationship between Sellers and
Distributor established by this Agreement are those of suppliers and a purchaser, neither
party acting as the legal representative of the other. Distributor may not consider itself, or
hold itself out to be the agent of Zimmer or Biomet. In the performance of this
Agreement, Distributor shall at all times act as an independent contractor.

15.5 Assignment.

This Agreement will be deemed to require the performance of personal


services by Distributor and may therefore not be assigned or transferred by Distributor.
Zimmer and Biomet may freely assign to any of their Affiliates all or any of the rights
andlor obligations and delegate all or parts of its duties hereunder upon giving notice

thereof to Distributor.

15.6 Entire

Agreement. This Agreement amends and replaces the Distribution Agreement by


and between Distributor and Zimmer effective as of 1 February 2015, togetherwith its
Annexes constitutes the entire agreement between the parties hereto. The Parties
represent that, in entering in this Agreement, they do not rely upon any previous
representation, whether express or implied, oral or written, or any previous inducement or
agreement of any kind or nature. All prior negotiations, representations, discussions,
contracts or agreements concerning the subject matter hereof are cancelled or merged
herein. No amendments or modifications of the terms and provisions of this Agreement
shall be binding on the Parties unless and until reduced to writing and duly signed by an
officer of the Party to be bound.

15.7 Amendments and Modifications. This Agreement may not be modified, amended,
altered or supplemented, in whole or in part, except by a written agreement signed by the
Parties.

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27t41

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Zimmerbiomet / Magna/ Distribution Agreement

15.8 This Agreement shall enter into force and become applicable on the date of its signature
by the authorized representatives of both Zimmer and Distributor. However, the
following clauses and rights and obligations of the Parties envisaged thereunder shall
start to apply as of the moment of obtaining of the decision on individual exemption of
this Agreement by the Commission for Protection of Competition of the Republic of
Serbia, as follows:

(i)

Exclusive right of distributorship conferred to the Distributor under clause 2.1


of this Agreement - but without affecting the Distributo's right to act as nonexclusive distributor of Zimmer and Biomet in the Territory, in accordance
with provisions of this Agreement, as of the day of execution of this
Agreement by the Parties,

(i

Clause 4.1 of this Agreement and Annex

(ii

Clauses 6.1 a) and 6.1 b) of this Agreement,

(iv)

Clause 10.1 of this Agreement.

81 and Annex B2to this Agreement,

The Parties shall mutually agree and cooperate to submit the request for individual
exemption of the above mentioned provisions of this Agreement by the Commission for
Protection of Competition of the Republic of Serbia. The above mentioned clauses shall
stay applicable for as long as individual exemption issued by the Commission for
Protection of Competition of the Republic of Serbia is valid and applicable.

15.9

Governing law. This Agreement shall be govemed by and interpreted in accordance with
the substantive laws of Switzerland, excluding its conflict of laws norTns.

15.10 Jurisdiction. All disputes or claims arising out of or in connection with this Agreement
including disputes relating to its validity, breach, termination or nullity shall be finally
settled under the Rules of Arbitration of the International Arbitral Centre of the Austrian
Federal Economic Chamber in Vienna (Vienna Rules) by one or three arbitrators
appointed in accordance with the said Rules. Place of arbitration shall be in Vienna,
Austria. The number of arbitrators shall be three. The substantive law of Switzerland
shall be applicable, excluding its conflict of laws norrns. The language to be used in the
arbitration shall be English. The emergency arbitrator provisions shall not apply.
[Signatures of Partes follow on the next page. Remander of page ntentonally left blank.J

28t41

Zimmerbiomet / Magna/ Distribution Agreement

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29t41

Zimmerbiomet / Magna/ Distribution Agreement

Annex A

Annex A1

List of products of Zimmer:


All Zimmer Products, excluded

the product lines: Dental

Distributor s entitled to plce orders for the product "Zmmer Uncompartmentl Knee
System" (*ZUK") only to the extent necessary to fulfill its obligations related to on-going,
already awarded tenders or supply contracts and to order only the quantities of ZUK strictly
needed to fulfill its obligations related to on-going, already awarded tenders or supply contracts.
Starting from the Execution Date, Distributor shall not commit or participate to, any agreement,
tender advice, or tender publication for the supply of the product ZUKinthe Tenitory.

Annex A2

List of products of Biomet:

All Biomet Products lines, with exclusion of the Products lines: Dental and Microfixation

30t41

Zimmerbiomet / Magna/ Distribution Agreement

Annex

Bl

and B2

Target Purchases for Products of Zimmer and Biomet:


Year 2016 (January 1,2016 - December 31,2016) - 3 Million USD (three million US Dollars)
in total cumulatively for both Zimmer and Biomet

Minimum Purchase Requirements for Products of Zimmer and of Biomet:


60Yo

of the Target Purchases

Q,

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31 l4 1-

Zimmerbiomet / Magna/ Distribution Agreement

Axunx

Annex

Cl

Prices for Products of Zimmer:

The price list will be communicated by Zimmer to Distributor on a yearly basis

Annex C2
Prices for Products of Biomet:

The price list will be communicated by Biomet to Distributor on a yearly basis

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32t .,,V

Zimmerbiomet / Magna/ Distribution Agreement

Annex D

COMPLIANCE \ilITH

LA\il

In Section 3.5 Distributor agrees that in performing its obligations under this Agreement, it shall
comply at all times, with all applicable laws, regulations and governmental orders of the
govemment of the Territory and of any jurisdiction in which Distributor performs its obligations
under this Agreement or that could otherwise be applicable.

I.
1

General Compliance with Law

Distributor will cause all Affiliates, sub-distributors and agents, or the respective
directors, officers, employees, agents or representatives of such entities, or any other
person or entity acting on behalf of Distributor or any of its subsidiaries in connection
with Distributor's performance of its obligations hereunder (hereinafter the "Relevant
Agents") to comply, with all applicable laws, regulations and govemmental orders of the
government of the Territory and of any jurisdiction in which Distributor performs its
obligations under this Agreement or that could otherwise be applicable.

Distributor also agrees to advise Sellers of any material change, modification or new law
which may affect the performance of Distributor or Sellers with respect to the Parties'
obligations hereunder.

The laws that Distributor and its Relevant Agents must abide by and comply with
include, but are not limited to the Organization for Economic Co-operation and
Development Convention on Combating Bribery of Foreign Public Offrcials in
International Business Transactions ("OECD Bribery Convention") and its national
country enabling legislation; the U.S. Foreign Comrpt Practices Act ("FCPA"); the
Italian Legislative Decree 231 of 8 June 200I ("ltalian Law 231"); the U.K. Bribery Act
2010 ("Bribery Act"); and any other law that may govern its activities from time to time,
including, but not limited to, any law or regulation prohibiting bribery in any form.

In addition, in performing under this Agreement, Distributor and its Relevant Agents will
comply with all policies of Sellers, including but not limited to the Sellers Code of
Business Conduct and Ethics, Sellers's Anticorruption Policy, Sellers's International
Distributor Compliance Manual and any and all corporate policies or procedures issued
from time to time by the Zimmer group. Distributor hereby specifically acknowledges
that it has received a copy of the Zimmer Code of Business Conduct and Ethics, has read
and understood the same and advised relevant personnel of its content. Distributor
that it will abide by, and will cause all of its Relevant Agents to comply with these
By way of example and not limitation, Distributor must not offer, pay, or promise to Y,
any money, advantage, or item of value, directly or indirectly, to any person, including
any govenment ofhcial, to perform improperly, or to reward a person for the improper
performance of, or to obtain a business advantage, a relevant function related to this
Agreement or its obligations. For these purposes, a "government official" will include

33t41

Zimmerbiomet / Magna/ Distribution Agreement

any employee of any govemmental entity or in which the government owns an interest, a
political party, or a public international organization, ot any political party official, or any
candidate for public office in any jurisdiction, and will include, but not be limited to, any
health care professional in a state sponsored health care system andlor facility. A
"relevant function" will include any function of a public nature, any activity connected
with a business, any activity performed in the course of a person's employment, and any
activity performed by or on behalf of Distributor, Sellers, or any other entity.
5

Distributor also will not make any kind of payments or make offers of any other kind of
benefits to any health care professionals in connection with the sale or implantation of the
Products. Further, Distributor will not enter into any consulting agreement or other
agreements with health care professionals for any services related to Zimmer or Biomet
Products without Sellers' prior written approval.

Distributor represents that it has fully disclosed, and will continue to fully disclose, to
Sellers if any person employed by or connected with it or with any of its Relevant
Agents, during the term of this Agreement, becomes a Government Official of any
governmental agency or corporation owned by or organized under the laws of any
government of the Territory or of any jurisdiction in which Distributor's obligations
under this Agreement are performed. Distributor further represents that no part of the
proceeds of the sale of the Products or any, if any, paid hereunder will inure to or for the
benefit of any person, including any Government Offrcial, if such payment is in violation
of any applicable law or regulation, including but not limited to the FCPA, the Bribery
Act, Italian Law 231, or the OECD Bribery Convention.

Distributor agrees that it will maintain accurate books, records and accounts and it will
not make, or cause to be made, any entries in the books, records, and accounts of
Distributor or its Relevant Agents that do not accurately and fairly reflect transactions
and the distribution of Distributor's or the Relevant Agent's assets.

If and when requested to do so by one or both

Distributor agrees that should it become aware of any behavior by itself or its Relevant
Agent(s) that violates or is likely to violate any applicable law andlor regulation,
including, but not limited to, the FCPA, the Bribery Act, the OECD Bribery Convention,
and any other applicable law or regulation prohibiting bribery in any form, Distributor

Sellers, Distributor will certify in writing


in a manner prescribed by Sellers, its compliance with the terms and conditions of this
Agreement.

will immediately notify Sellers through Sellers' compliance

website
www.ethicspoint.com, which provides global reporting telephone numbers or on-line
reporting options.

10

Distributor will adopt an effective anti-corruption policy, supporting the compliance of its
personnel with the principles inherent in this Annex within three (3) months after signing
this Agreement and will provide a copy of that anti-comrption policy to Sellers upon first
request of Zimmer or Biomet.

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34t 4P

Zimmerbiomet / Magna/ Distribution Agreement

Distributor and its Relevant Agents agree to participate in anti-comrption training as


reasonably requested by Zimmer or Biomet, which will include at a minimum on-line
training.

11

t2

Zimmer and Biomet may on an annual basis audit the activities and records of Distributor
or its Relevant Agents as those records pertain to the Products or other items subject to
this Agreement. Distributor acknowledges that should Zimmer or Biomet be made or
become aware of any allegations, suspicions or evidence of improper or unethical
conduct that would raise questions concerning compliance with this Annex, then Sellers
are entitled to fully investigate such allegations, in which event Distributor shall fully
cooperate in a timely manner and cause its Relevant Agents to cooperate fully with such
investigation by Sellers or any third party appointed by Zimmer or Biomet to perform
such investigation.

13

In the event Zimmer or Biomet, directly or indirectly, initiate an investigation, Sellers


will not be liable to Distributor for any claims, losses or damages whatsoever related to
its decision to withhold payments or suspend the shipment of Product under this Annex.

If

pursuant to an investigation conducted by Zimmer or Biomet or otherwise, Sellers


conclude, based on a good faith belief, that Distributor or any of its Relevant Agents have
violated the representations made by Distributor under this Annex, Sellers are entitled to
terminate, with immediate effect, this Agreement and any other agreement Distributor or
any of its Relevant Agents may have entered into with Sellers or any of their Affiliates
(termination hereunder constituting an event of default under any such other agreement),
and no damages will accrue to Distributor or any Relevant Agent on account of such
termination.

14

Furthermore, Distributor, without limiting Sellers' right to further recourse, must


immediately pay Zimmer or Biomet an amount equal to the value of the advantage gained
by Distributor or any Relevant Agent as a result of the conduct breaching this Annex and
shall further indemnify and hold Sellers and their Affiliates harmless against any and all
claims, losses and damages arising from or related to such breach or termination of the

15

Agreement, or both.

Distributor agrees to comply with any additional reasonable compliance requests of

t6

Sellers.

il.
-

Trade Compliance and Trade Controls


This Agreement is subject to and valid only as permitted under applicable export control
and sanctions legislation. Applicable legislation includes, but is not limited to, certain
rules and policies that have been issued by the United States' and European Union's
authorities or those of the country whose laws govern this Agreement or in which this
Agreement is performed which strictly control the export, re-export, service, support and
other activities with certain countries. Among those rules and regulations, the BIS and
OFAC have issued several prohibitions to trade with specific countries or with specific
persons, restrictions which, in the case of this Agreement, cover customers to whom
Distributor may sell the Products (collectively the oTrade Control Laws"). Distributor

3514

Zimmerbiomet / Magna/ Distribution Agreement

and will cause any sub-distributors which may be appointed from time to time in
accordance with the terms of this Agreement to, comply at all times with the Trade
Control Laws included the Switzerland SECO sanctions and embargoes. By entering into

will,

this Agreement, Distributor further:

a.

Agrees that under no circumstances will Distributor sell Products to a customer of


whom it has reason to believe that such customer will attempt to or actually
circumvent any applicable laws in purchasing the Products.

b.

In the event that any documentation within the control of Sellers is required under
applicable law, such as a license, Distributor will provide Sellers with such
documentation upon Zimmer's or Biomet's first written request.

c. Acknowledges and confirms that neither Distributor nor any of its directots, offtcers,
customers or end users for the Products, services and technology covered by the
Agreement are included on any of the Restricted Party Lists. 'oRestricted Party Lists"
means the lists maintained by the U.S. Government or European Union, including,
but not limited to, the Specially Designated Nationals List administered by OFAC;
the Denied Persons List, Unverified List or Entity List maintained by BIS or the List
of Statutorily Debarred Parties maintained by the U.S. State Department's Directorate
of Defense Trade Controls.

d.

Commits to, before selling the Products, screening each of Distributor's customers
against the Restricted Party Lists, as updated from time to time on the website) to
check whether such customer is listed therein. Such list for the United States is
available at http://www.export.govlecrleg_main_023148.asp. The restrictions
imposed in the European Union ca be found on
ht://eeas.europa.eu/cfsp/sanctions/index_en.htm. If any customer appears on the
Restricted Party Lists, Distributor will not sell Products to such customer.

e.

Acknowledges and agrees that each Product (together with any software, technology,
documents, and other material that may be embedded therein or provided therewith),
may be subject to Trade Control Laws which may restrict the export of products from
those regions and their re-export from other countries. Distributor will comply with
the Trade Control Laws and all other applicable laws in the performance of this
Agreement and in the import, export, re-export, shipment, transfer, sale, use,
operation, service, support, maintenance, or repair of Products and any related
technology and services. Distributors outside of the EU acknowledge and agree to be
authorized pursuant to the terms and conditions of this Agreement to distribute
Products for civilian end-use only within the Territory and for the civilian end-use
covered by the scope of this Agreement.

f.

Acknowledges and confirms that it will not sell Products or engage in the provision
of technical support or other services, directly or indirectly through third parties or
otherwise, to Cuba, Iran, North Korea, Sudan, or Syria or, if determined by Sellers
and notified to Distributor from time to time, any additional country. Distributor

36

t4

Zimmerbiomet / Magna/ Distribution Agreement

further acknowledges and agrees that under no circumstances the Products will be reexported or diverted, whole or in part, against any relevant export control regulations,
or of any related country of origin.

g.

In case Distributor is outside of the EU, acknowledges and agrees that upon request
from Zimmer or Biomet, Distributor is required to provide in writing a list of
customers or end users to which Distributor has provided, or may provide Products,
services andlor technology covered by this Agreement. The Parties specifically agree
that Distributor's making available such names will not create a right to
indemnification in Sellers upon expiration or termination of this Agreement. In case
Distributor is within the EU, upon request from Zimmer or Biomet, Distributor is
required to provide to a custodian third pa.rty a list of customers or end users to which
Distributor has provided, or might provide Products, services and/or technology
covered by this Agreement for the sole purpose of checking that such persons or
entities do not appear on any Restricted Party Lists or otherwise restricted under
applicable Trade Control Laws. The Parties specifically agree that Distributor's
making available such names will not create a right to indemnification in Sellers upon
expiration or termination of this Agreement. Under this Agreement, Sellers have the
right to inspect the books and records of Distributor to confirm compliance with the
Trade Control Laws by Distributor with respect to Products, services and/or
technology covered by this Agreement.

h.

Confirms that Distributor fully understands the scope of the prohibition(s) stated
above and further acknowledges that Distributor will be fully responsible for
controlling and making sure that no Product is being sold to a person in violation of
Trade Control laws. Distributor will take no action that would cause Sellers to be in
violation of any laws including Trade Control Laws. Despite anything to the contrary
in this Agreement, Sellers are not required to act in any way that is prohibited by
Trade Control Laws. Nothing in this Agreement shall be construed as obliging Sellers
to violate at any time applicable Trade Control Laws and Sellers will be free to
refrain from being directly or indirectly involved in the provision of goods, services
andlor technology in such case.

i. If at any time during the term of this Agreement, applicable

Trade Control Laws


prohibits the sale of Products; all rights of Distributor granted under this Agreement
are automatically suspended for the estimated term of application of such applicable

Trade Control Laws. Alternatively, at Zimmer's or Biomet's sole reasonable


discretion, Sellers shall be entitled to terminate the Agreement for good cause after

\}

,.1" I

written notice, with immediate effect.

j.

Will indemni$' and hold harmless Sellers from and against, and will pay to Sellers
the amount of, any loss, liability, claim, civil penalty, criminal fee, damage (including
incidental damages), expense (including costs of investigation and defense and
reasonable outside attorneys' fees), arising, directly or indirectly, from or in

z
37

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Zimmerbiomet / Magna/ Distribution Agreement

connection with any obligation or liability arising out of or relating to any obligation
or requirement of Trade Control Laws.

Notwithstanding any other provisions of this Agreement, violation by Distributor of the


Trade Control Laws, including but not limited to violation of any terms or conditions of
authorizations issued by the U.S. Government under the Trade Control Laws, Switzerland

SECO

sanctions

and

embargoes (http://www.seco.admin.ch/themen/0O513/00620/index.html?lang:de) will


render this Agreement immediately terminable in Zimmer's or Biomet's sole discretion
upon noticeby Zimmer or Biomet.

III.
1

Customs and Import Laws and Regulations of the Territory.

Unless otherwise specifically permitted by Zimmer or Biomet, Distributor will be the


importer of record in the Territory for all importations of Products and must comply with
and bear sole legal and financial responsibility for complying with all applicable laws
relating to the shipment, transport and, as applicable, the importation of Products
delivered to Distributor.

Distributor must, at its sole cost and expense, obtain all required licenses, permits,
authorizations, consents and approvals necessary for Distributor to import Products into
the Territory.

Distributor will be solely responsible for any and all import duties, taxes, fees, fines,
penalties and similar charges, including those resulting from non-compliance with
customs and import laws and regulations of the Territory including, but not limited, to
tariff classification, valuation, country of origin marking, labeling, import permits or
licenses, quota or other restrictions or requirements required by the Territory or if the
Products have not been transported or imported in accordance with applicable law.

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38t41

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Zimmerbiomet / Magna/ Distribution Agreement

ANNnx E
Notification Procedure for Incidents

1.

Distributor agrees to notifu Zimmer and Biomet within one (1) business day of all
Reporting Incidents as in defined in Section 8.1 of this Agreement.

2. Notification shall be made by sending the product experience report form attached
hereby to:

a.

USA Manufacturer/Representative

Manager of Regulatory Compliance

Zimmer,Inc.
P.O. Box 708
Warsaw, IN 46581-0708
E-mail address : per.export@zimmerbiomet.com
Fax : 001 219 372 4265

b)

European Manufacturer/Representatives

Manager of Product Surveillance


Zimmer GmbH
Postfach
CH-8404 Winterthur
Switzerland
E-mail address: per.export@zimmerbiomet.com
Fax:00 41 5224435 16

Biomet Global Supply Chain Center B.V.


Toermalijnring 600, 33l6LC, Dordrecht, the Netherlands
E-mail address : per.export@zimmerbiomet.com
Fax: 00 31 78 629 2889

)/

39t41

Zimmerbiomet / Magna/ Distribution Agreement

3.

Distributor's initial notification shall contain:

.
o
o
o

the date of occuffence of the Reporting Incident


the Product and lot numbers of the Product involved
(where relevant) the name of the hospital

4.

In the event not all required details are available immediately, Distributor shall provide

a description of the Reporting Incident

available information immediately after becoming available of any such information.

5.

Zimmer or Biomet shall send acknowledgement of the receipt of the information on the
Reporting Incident and may request further details.

6. In case of a complaint, Zimmer or Biomet will assess the validity of the complaint

and

the need for vigilance or incident reporting based on accumulated data held by
Zimmer or Biomet. Zimmer or Biomet will investigate the complaint and provide the
Distributor with a final report detailing corrective actions where relevant.
assess

7.

In the event authorities or complainants direct questions and request for information to
Distributor concerning a Reporting Incident, Distributor shall forward such request to
Zimmer and Biomet at the address listed above. At the request of Zimmer or Biomet,
Distributor shall assist in responding to such questions or requests. Zimmer shall file the
initial and final report with the appropriate authorities within required time frames and
will send Distributor a copy of such reports.

4
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40t41

Zimmerbiomet / Magna/ Distribution Agreement

Annex F

APPROVED SUB.DISTRIBUTORS

Innova MD Group D.O.O., a company duly organized under the laws of Serbi4 with domicile
in Militina Milankovic a 7b, ll 000, Belgrade.

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41t41

Zimmer Biomet
Code of Business Conduct and Ethics
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rrMMER BToMET
Your progress.

,,,

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Your progress. Our promise.'


At Zimmer Biomet,
we don't just make medical devices,
we help millions of people
live better lives.

.{E{t

Purpose. Mission. Values.

Our Purpose
Restore mobility, alleviate pain and improve the quality of life for patients around the world

Our Mission
Lead the industry in delivering value to healthcare providers, patents and stockholders, while embracing our broader

social responsibilities.

Our Values
Customers First

Dothe RightThing

We actively pursue ways


to earn trust and exceed expectations
in every Customer interaction.

We hold ourselves to the highest


standard of qualityand integrity
in everything we do.

Win Through Results

lnnovate and lmprove

We are accountable for delivering


on our commitments and recognize
that success requires a winning attitude,
discipline and a sense of urgency.

We are driven to develop innovative


solutions that make a difference

PositiveCulture

One Zimmer Bomet

We are optimistic, curious


and committed in our

We collaborate forthe greater good


in a global company that is united

interactions with others.

by Our Purpose.

and to continuously improve

performance.

A Message

from Our President & CEO

Dear Team Member,


Zimmer Biomet was created from the combination of two global leaders in
musculoskeletal healthcare that the world respects and trusts. By coming together,
we help all Zimmer Biomet stakeholders-patients, healthcare professionals, Team
Members and the communities in which we operate-redefine what is possible and
progress to the next level. Simply put, we are in the business of changing people's
lives. We are humbled by that fact and take our responsibility seriously.
Because of this, the way we conduct our business is critically important. The Zimmer
Biomet Code of Business Conduct ond Ethics was established to reflect our shared
values and help guide our approach to our work. Each and every one of us, regardless
of our position, business unit or geography, has a responsibility to read the Code and
to follow its principles in our everyday behavior. That means we will comply with all
applicable laws and regulations, adhere to the highest ethical standards and act as a
responsible member of our communities.

encourage you to ask questions ifyou have a concern or are unsure ofwhat to do in a
specific circu mstance. lt is always better to ask if you have any dou bts about any cou rse
of conduct. Contact your manager or refer to the resources within this document.
I

Thank you for taking time to read and understand the Code. ln conducting yourself
according to its principles, you are helping make Zimmer Biomet the most respected
company in the industry.
Sincerely,

t;
)"

I *

David C. Dvorak
President and Chief Executive Officer

Table of Contents

lntroduction
Section

1:

CommitmenttoOurTeam Members... 8

Section 4: Regulatoryand Quality Excellence... 2O


Our Commitment to

ng and Deve1opment............................................ 9

Diversity in the Workplace

.............

........9

Conduct in the Workplace


and Workplace Harassment.....................................
Health, Safetyand

Environment

...........

11

................21

nternational Trade Restrictions ............ ...................

21

Government lnspections and I nvestigations ............

21

H iri

Quality

Section 5: External Communications


and Engagement..........
Corporate Communications..............
Advertising and Marketing Practices...

Section 2: Expectations
of OurTeam Members

,...12

Proprietary or Confidential lnformation.

Business Courtesies (e.g., Gifts and Meals)......

....

Public Disclosures.........,....

Conflicts of lnterest

.... l3

Charitable,

Corporate Opportunities ..................

....

Political Process and Contributions...................

Corporate Records

....14

Use of

Corporate Assets...

Copyrighted Materials and Computer Software

....

13

13

15

....15

Section 3: Acting with lntegrity ....................

16

lmproper Payments.....

17

Competition, Fair Dealing and Antitrust

17

nteractions with Healthcare Professionals..........,

18

lnsider TradinS .................

18

Purchasing Practices

18

Ed

ucational or

umanitarian Efforts

Section 6: Using the Code.................


Reporting a Potential or Known Violation
Non-Retaliation ............ -...
Conflicts......
Waivers

l7
Introduction

Zimmer Biomet has an important role as

a worldwide leader in

the

musculoskeletal healthcare industry. We are dedicated to restoring mobility,


alleviating pain and improving the quality of life for patients around the world.
TheZimmer BiometCode ofBusiness Conductond Ethics(the "Code") reflects our
shared values and serves as the foundation for the Zimmer Biomet policies and
procedures. The Code applies to Timmer Biomet Holdings, lnc., its subsidiaries
and affiliates and all of its officers, directors and employees (including full-time,
part-time, temporary and contract employees) worldwide (collectively, "Team

Members").
Zimmer Biomet also expects its distributors, sales agents and other third-party
agents and representatives to follow the Code when acting on our behalf or
for our benefit (collectively, "Business Partners"). lt is important for all Team
Members and Business Partners to read, understand and follow the Code.

The lmportance of Asking Questions

lf you are unsure whether a certain activity would comply with the Code,
ask yourself:
"

Would this activty reflect positively on Zimmer Biomet? "

"Would I be comfortable if ths octivity become publicly known?"


lf the answer is "no" or "l don't know" to either of these questions, please ask
for guidance from your manager or from Zimmer Biomet Compliance, Legal
or Human Resources.

Your commitment
to the core prncples
and ethicalstandards
outlined in the Code

willensure Zimmer
Biomet contnues to act
as a trusted leader
in the industry.
To report a known or

suspected issue, contact

+1.877.593.4582
(Zimmer) or
+1.888.469.1566
(Biomet).

Bl

Section

Commitment to Our Team Members

Our Team Members are our most important asset.


to maintain
open lines of communication internally so that Team Members have a better
understanding of our business and mission, and can move forward with a
winning attitude, discipline and a sense of urgency. We are committed to
complying with all laws for a healthy, safe, fair and harassment-free workplace.
ln doing so, we will help maintain our strong reputation in the musculoskeletal
healthcare industry and remain an employer of choice.

To create a culture of respect at Zimmer Biomet, we work hard

le
Section

Commitment to Our Team Members

Hiring and Development


We are dedicated to attracting and retaining the best talent and helping
people achieve their full potential. We hire, compensate and promote based
on qualifications, experience and skills. We provide Team Members with the
necessary support and training to meet their identified goals. We review our
Team Members' performance periodically for compensation, promotion and

retention decisions to ensure that mutual expectations are met.

Zimmer Biomet also provides opportunities for Team Member growth and
development through continuing education. We encourage you to speak to
your manager or supervisor about your specific opportunities.

We promote a fair and competitive work environment. Zimmer Biomet


complies with wage and hour laws. Managers and supervisors must ensure
their Team Members follow these laws and adjust workloads to individual
Team Member's capacities.

Zimmer Biomet is committed to respecting the human rights, dignity and


privacy of the individual. We follow applicable labor laws and do not allow
child labor, forced labor or trafficking by Zimmer Biomet or its Business
Partners. Zimmer Biomet respects the rights of our Team Members to
freedom of association, freedom of expression and the rightto be heard.

Diversity in the Workplace


Diversity is much more than a category of persons; it is about embracing
those individuals' ideas and thinking. This is what will continue to drive our
success in the future.

Zimmer Biomet respects and welcomes diversity among its Team Members.
We are committed to providing equal employment opportunities for all of
our Team Members without regard to race, color, creed, religion, national
origin, citizenship, gender, gender identity, sexual orientation, marital status,
pregnancy, age, medical condition, disability or military or veteran status.

To

We are committed

to providing equal
employment
opportunties for all
of ourTeam Members.

report a known or suspected issue, contact +1.877.593.4582 (Zimmer) or +1.888.469.1566 (Biomet).

101

Section

Commitment to Our Team Members

ffi

Conduct in the Workplace and Workplace Harassment


Our Team Members are fundamental to our success. Zimmer Biomet values

We will not tolerate

and appreciates each Team Member's individual diversity and unique

discrimination
or harassment
of any kind.

contributions. We will not tolerate discrimination or harassment of any kind,


including any unwelcome or unwanted attention or discriminatory conduct
based on an individual's race, color, creed, religion, nationalorigin, citizenship,
gender, gender identity, sexual orientation, marital status, pregnancy, age,
medical condition, disability or military or veteran status.
Harassment can include verbal, non-verbal, physical or sexual conduct.
What one individual may think is harmless may be perceived by another
individual as harassing, hostile, intimidating or humiliating. Remember:
intention and perception may vary. lt is not the intent that is relevant to what
is

considered an act of harassment; instead, it is the perception of the person

who is targeted by the activity that is relevant. ln daily work activities and
interactions with others, Team Members should act with respect, courtesy
and consideration. Team Members should not engage in:
Rociol, relgious or other stereotyping;

Derogotory jokes or gestures;


Physical or verbol conduct of q sexuafi rocist or defomatory nture;
I

ntimdating or oggressive octs;

lnappropriote humor; or
Communicotng or disploying offensive material in the workplace,
As Team Members, we each have a role to play in the creation of a positive

As Team Members,

work environment. Our managers and supervisors are vital in establishing


a culture of appreciation, respect, fairness and trust that contributes to
our eam Members' physical and emotional well-being. Managers and

we each have a role


to play in the creaton
of a positive work

supervisors also set an example for Team Members through their verbal and
non-verbal behavior. Similarly, Team Members should always support and
help each other and consider their own verbal and non-verbal behavior.

lf workplace harassment occurs, Team Members should report incidents


as soon as possible to

Resources.

their managet supervisor or Zimmer Biomet Human

envronment.

Section

Commitment to Our Team Members

Health, Safety and Environment

Zimmer Biomet is committed

to

protecting the health and safety of its

Customers, Team Members, the public and the environment.

Zimmer Biomet is dedicated to providing its Team Members with a safe and
healthy workplace. Team Members have a shared responsibility to maintain
such a workplace by following Zimmer Biomet's health and safety rules and
practices. These include reporting accidents, injuries and unsafe equipment,
practices or conditions.
Regardless of the situation, certain behaviors are unacceptable. Violence and
threatening behavior will not be tolerated. The use, possession, manufacture,
sale or distribution of drugs is prohibited on company premises and,/or on the
job. Zimmer Biomet expects Team Members to report for work in a condition
to perform their duties unimpaired by drugs or alcohol.

Zimmer Biomet
is committed
to protecting the health
and safety
of its Customers,
Team Members,
the public
and the envronment.

Zimmer Biomet conducts its activities in an environmentally sustainable


manner and minimizes any negative impact on the environment. We comply
with allapplicable environmental laws, including those affecting air emissions,
water purity and waste disposal.

To

report a known or suspected issue, contact +7.877.593.4582 (Zimmer) or +1.888.469.1566 (Biomet).

i1

121

Section 2
Expectations of Our Team Members

Team Members are expected to do the right thing


and follow the Code and the company's policies and
procedures in their work on behalf of the company.
Our eam Members directly contribute to Zimmer Biomet's success and
reputation by applying their unique skills, sense of responsibility and sound
judgment. Timmer Biomet expects its Team Members to maintain a standard
of honesty, taking responsibility for their jobs, accountability for their work
and being

good steward of company resources.

{
\

Section 2
Expectations of Our Team Members

Business Courtesies (e.9., Gifts and Meals)


Business courtesies-such as gifts, entertainment, meals and travel-are an

accepted business practice and may be provided or accepted in accordance


with the company's policies and procedures. Zimmer Biomet believes that
decisions about products and services should be made in the best interests
of patients. We do not try to earn business by offering or accepting business
courtesies as improper inducements to decision makers.

Conflicts of lnterest

We do not try to earn


business by offering
or acceptng
business courteses
as mproper
inducements to
decision makers.

A conflict of interest arises when a person's private interests are in a position

to influence or interfere-or even appear to interfere-in any way with


Timmer Biomet's interests, the Team Member's performance of duties and
responsibilities or loyalties to Zimmer Biomet. The existence of a conflict
of interest depends upon the circumstances, including the nature and
relative importance of the interests involved. Conflicts of interest are strictly
prohibited unless they are disclosed and approved by Zimmer Biomet Human
Resources, in consultation with Zimmer Biomet Compliance and Legal.
Team Members who are not sure whether a certain activity or situation might

be an actual or potential conflict of interest should contact Zimmer Biomet


Human Resources, Compliance or Legal.

Corporate Opportunities
Without the consent of Zimmer Biomet's Board of Directors, Team Members
are prohibited from taking for themselves a business opportunity that is
discovered through the use of Zimmer Biomet property, information or
position. Team Members may not use Zimmer Biomet property, information

or position for personal gain, nor may they compete with Zimmer Biomet
directly or indirectly. Team Members owe a duty to Zimmer Biomet to advance
the company's business interests whenever the opportunity to do so arises.

To

report a known or suspected issue, contact +1.877.593.4582 (Zimmer) or +1.888.469.1565 (Biomet).

13

141

.:' .-{\,g,.

Section 2

t '}

Expectations of Our Team Members

Corporate Records
Allof Zimmer Biomet's books, records, accountsand financialstatements must
be maintained in reasonable detail, must accurately reflect our transactions
and must conform both to legal requirements and to our system of internal
controls. For example, Team Members must:
moke sure thdt monufocturing documents m eet internal and externql
requirements ond support Zimmer Biomet's product s afety efforts.

maintqn clnicol dota thot meet regulotons


d co r p o r ate co nf i d e ntiolity stondords.

on

occurtely document and record business expenses.


Unrecorded or "off the books" funds or assets are strictly prohibited. Zimmer
Biomet requires honestand accurate recording and reporting of information to
help control our processes, to detect and close gaps and to make responsible
business decisions. Records should always be kept or destroyed according to
Zimmer Biomet's record retention policies.
lf you are not sure whether a certain expense is legitimate, ask your manager
or other supervisor. Rules and guidelines also are available from Finance.

Team Members
are responsble

for maintaining
the accuracy,
confidentiality
and securty
of all records.

Section 2
Expectations of Our Team Members

Use of Corporate Assets

Zimmer Biomet has an ethical responsibility to our stockholders to operate


cost efficiently. Similarly, Team Members have an ethical responsibility to
protect and ensure the efficient use of Zimmer Biomet's assets and property.
Generally, Zimmer Biomet property, such as office supplies, production

equipment, products and buildings, may not be used for private or non
Timmer Biomet business. Zimmer Biomet permits the use of computers or
the telephone for occasional and appropriate personal use as long as such
use does not:

impoct your performonce ot work;


a

result in signiJcont cost to Zimmer Biomet; or


couse other domages to Zmmer Bomet.

Theft, carelessness and waste have a direct impact on our profitability,


which in turn could impact the company's ability to reinvest in new product
development, provide training and enhance Team Member benefit and
compensation packages.

When representing Zimmer Biomet, or traveling for the company, please


spend responsibly and moderately.

Copyrighted Materials and Computer Software


From time to time, Team Members may be required to photocopy copyrighted

work for business purposes. Team Members must ensure that such
photocopies comply with applicable copyright law.
Similarly, Team Members may duplicate and use any licensed software only in
accordance with the applicable software licensing agreement.

Team Members should contact Zimmer Biomet Legal with any questions
regarding this issue.

To

report a known or suspected issue, contact +1.877.593.45a2 (Zimmer) or +1.888.469.1566 (Biomet).

15

16

Section 3
Acting with lntegrity

We work hard to earn the trust of healthcare professionals,


patients, and government and industry regulators by going
the extra mile in everything we do.
We maintain that trust by holding ourselves to the highest ethical standards, conducting

our business with integrity and complying with all applicable laws and regulations.
Obeying the law, both in letter and in spirit, is the foundation upon which Zimmer Biomet's
ethical standards are built. All Team Members must respect and obey all applicable laws,
regulations and rules, as well as Zimmer Biomet's policies and procedures.

t.J

I
\

117

Section 3
Acting with lntegrity

lmproper Payments
Zimmer Biomet is committed to complying with applicable anti-kickback,
anti-bribery and anti-corruption laws in all countries in which we operate
and do business. Team Members must not offer, promise, authorize or pay a
kickback, bribe or anything of value (directly or indirectly) to any individual
in order to improperly obtain or reward favorable treatment in a business
transaction. Zimmer Biomet does not provide, offer or accept improper
payments under any circumstances, even if that would result in losing or
walking away from business.

Zimmer Biomet does


not provide, offer
or accept improper
payments under any
circumstances, even
if that would result
in losing or walkng
away from business.

Competition, Fair Dealing and Antitrust


Zimmer Biomet seeks to outperform our competition fairly and honestly.
We strive for competitive advantages through superior performance,
never through unethical or illegal business practices. Stealing or otherwise
improperly obtaining proprietary information from another company,
possessing trade secret information that was obtained without the owner's

Zimmer Biomet
seeks to outperform
our competition
fairly and honestly.

consent or inducing such disclosures by past or present Team Members


of other companies is strictly prohibited. Timmer Biomet expects Team
Members to deal fairly with Customers, su ppliers, com petitors and other Team
Members. We do not take unfair advantage of anyone through manipulation,

concealment, abuse of privileged information, misrepresentation of material


facts or any other intentional unfair dealing practice.

eam Members are also prohibited from collaborating with a competitor or


from taking any action that could have an improper anti-competitive effect,
without pre-approval from Zimmer Biomet Legal.

To

report a known or suspected issue, contact +1.877.593.45A2(Zimmer) or +1.888.469.1566 (Biomet).

18

Section 3
Acting with lntegrity

lnteractions with Healthcare Professionals

Zimmer Biomet is committed to ethical interactions with healthcare


professionals. Strong working relationships with healthcare professionals are
essential to Zimmer Biomet's success and to continued improvement and
innovation in patient care.

Zimmer Biomet regularly consults with experienced healthcare professionals

who render services to Zimmer Biomet in various fields that may include
product development, clinical research and training and education on the
safe and effective use of our products. Many of these healthcare professionals
are also Customers who recommend and use our products and services.

Our collaborations with healthcare professionals are closely regulated by


government authorities and subject to additional scrutiny because of the
different roles and financial relationships healthcare professionals may have
with Zimmer Biomet. As such, we must strictly adhere to the following rules:
Zimmer Biomet does not u se interoctions with heolthcare professionols
to improperly influence product, purchasing or coverage decisions.
All product decsions shou ld be mqde in the best interests of the potient,

ond notin returnfor any kind ofpaymentor other advontagefrom


thecompany.
Zimmer Biomet selects ond engages heatthcore professionols for
consulting se rvices solely bosed on their qualificotont experences,
skills ond expertiseto oddress onidentified need, notbosed on any
octuol or potentiol Zmmer Biomet business.
Zmmer Biomet compensates heolthcare professionols for legitimote
services provided based on fair morket value principles.
a

All orrongements with heolthcore professionols m ustbe properly

opproved and oppropriotely documented.

Zimmer Biomet never conditions or rewards o finoncial orrangement


with o heolthcore professonal.We do not providefree products,
servicesor gronts to o heo,lthcareprofessionolin exchangefor an
explict or implicit ogreementto use, purchose, order or recommend
Zimmer Biomet products.

Zimmer Biomet
never condtons or
rewards a financial
arrangement
with a healthcare
professonal.

lls
Section 3
Acting with lntegrity

lnsider Trading
All countries have adopted laws prohibiting stock trading based on material,
non-public "insider information." Team Members may encou nter such insider
information in the cou rse of their work, including information about potential'

acquisitions, earnings, new products or discoveries, product approvals,


major management changes, upcoming litigation or regulatory proceedings
and joint ventures. A Team Member who has access to insider information is
not permitted to use or share that information ("tipping") for stock trading
purposes, eitherfortheirown personal benefitorforthe benefitof another, or
for any other purposes except the conduct of Zimmer Biomet business.
This prohibition includes trading in the stocks and securities
information related to, Zimmer Biomet as well as;

ol

and tipping

Current or prospective Customers or Busness Portners

lndividuals who violate


insidertrading laws

bytrading ortipping
may be subject
to severe civiland
criminal penaltes,
even f they
did not engage
in the transaction
or personally benefit
from the trading.

of ZimmerBiomet;ond

Compo nes negotiatng dn ogreement with Zi mmer Biomet,

ln addition to insider trading prohibitions, Team Members must be alert to


how internal information about Zimmer Biomet is communicated outside the
company. Communicating information prematurely, incorrectly or without

proper clearance-no matter how insignificant, harmless or innocent that


communication may seem-could have a serious impact on Zimmer Biomet's
competitive position, stock price, pending litigation or stockholder value.

Purchasing Practices
Zimmer Biomet sources its supplies and services solely on the basis of quality,
price and value. We treat our Business Partners fairly, openly and honestly.

We treat our
Business Partners

ln our efforts to support the international community of which we are

fairly, openly
and honestly.

part, Zimmer Biomet follows the applicable laws and regulations governing
disclosure and conduct related to conflict minerals. weengage in a reasonable
due diligence process with our suppliers on the origin, source and chain of
custody of conflict minerals.

To

report a known or suspected issue, contact +1.877.593.4582 (Zimmer) or +1.888.469.1566 (Biomet).

201

Section 4
Regulatory and Quality Excellencc

Zimmer Biomet is dedicated to manufacturing


products of the highest quality that are both safe
and effective.
We respect the laws and regulations of all countries in which we do business
and recognize the importance of our relationships with regulators to promote
the smooth operation of our business.

i
a

121

Section 4

i.

Regulatory and Quality Excellence

i>

Our Commitment to Quality


Both patients and healthcare professionals rely upon our commitment to the
quality of our products, instruments and services. At Zimmer Biomet, we have
adopted and implemented regulatory compliant systems and processes to
ensure the highest standards of quality and safety. All Team Members play a
key role in continually improving Zimmer Biomet's quality assurance systems
and processes. We count on our Team Members to follow applicable laws,
regulations and policies and procedures. Team Members should also raise
questions and voice concerns about issues that may affect the quality or safety
of our products, instruments and services.

Zimmer Biomet
has systems and
processes to ensure
the highest standards
of quality and safety.

lnternational Trade Restrictions


As a global company, Zimmer Biomet regularly sells and ships our products
internationally. We are committed to following applicable import and export

control laws and regulations in the United States and in other countries
in which we conduct business.

Zimmer Biomet does not participate in trade with sanctioned countries


or prohibited boycotts.

Government lnspections and lnvestigations


From time to time, we may be contacted by, or receive requests forinformation
from, government investigators. lt is Zimmer Biomet's policy to cooperate
fully with government inspections and investigations. Team Members must

never destroy or alter any Zimmer Biomet documents, lie or make misleading

statements to a government investigator, attempt to cause another Team


Member to provide inaccurate information and/or obstruct, mislead or
delay the communication of information or documents to any governmental
authority. Tea m Mem bers must fully cooperate with Zimmer Biomet regardi ng
inspections and investigations.
lf a Team Member is contacted by, or receives a request for information from,
a government investigator, he or she should immediately notify his or her
manager as well as Zimmer Biomet's Chief Compliance Officer or General
Counsel. eam Members may not provide any documents to any government
investigators without written pre-approval from the Chief Compliance Officer

or General Counsel.

To

reporta known orsuspected issue, contact+1.877.593.45A2(Zimmer)or+1.888.469.1566(Biomet).

tr

221

Section 5
External Communications and Errgager-rrent

Zimmer Biomet recognzes the importance


of engaging with key stakeholders in the communtes
in which we operate and do business.
As a publicly traded company, as well as a musculoskeletal healthcare company,

Zimmer Biomet follows specific guidelines in advertising, marketing, issuing


communications to the public and engaging in the political process. ln addition,
safeguarding Team Member, Customer and other data is imperative to maintain
the trust of Zimmer Biomet's internal and external stakeholders. As a good
corporate citizen, we encourage participation in and regularly support charitable,
educational and humanitarian organizations around the world.

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123

Section 5
External Communications and Engagement

Corporate Commu nications


ln the course of doing business, we communicate with Customers, healthcare
professionals, government officials, financial analysts and others in the public

domain. Communicating with these audiences in a thoughtful, careful and


appropriate manner is vital to safeguarding our reputation.

All written and oral communications intended for external audiencesincluding speeches, press releases and presentations-must be reviewed
by Zimmer Biomet Corporate Communications, and potentially others,
before issuance. lf the communication is geared toward the investment/
analyst community, Zimmer Biomet lnvestor Relations must review the
communication as well. This policy also applies to any information about
Zimmer BiometthatTeam Members may postonline orshare via social media.

Advertising and Marketing Practices

Advertising and marketing are important tools that contribute

to

our

success. Timmer Biomet follows local, regional and country-specific laws and
regulations governing advertising and marketing practices. Advertising and

promotion of Zimmer Biomet products are subject to internal pre-approval

We market our
products only for their
approved uses.

processes, including approval by Zimmer Biomet Legal.

It is Zimmer Biomet's policy to promote and market its products in a


lawful and truthful manner. Team Members must be careful to offer an
accurate representation of product and service capabilities and benefits.
All promotional presentations, including product claims and comparisons,
should be accurate, balanced, fair, objective, unambiguous and consistent
with product labeling.
Similarly, comparisons of Zimmer Biomet products to a competitor's products
should be fair, substantiated and in compliance with all laws and regulations.

Zimmer Biomet products should not be labeled or marketed in ways that


could confuse them with those of its competitors. We should not disparage
competitors' products, services or employees.

We market our products only for their approved uses as determined by


regulators and governmental agencies.
Generally, Timmer Biomet does not engage in activities to build or market
healthcare professionals or their institutions. Any activities related to
healthcare professionals must comply with applicable legal and regional
practices and meet fair market value requirements.

To report a known or suspected issue, contact

+1.877.593.45A2 (Zimmer) or +1.888.469.1566 (Biomet).

241

Section 5
External Communications and Engagement

ffi

Proprietary or Confidential I nformation


Team Members must use their judgment when disclosing proprietary or
confidential information regardng Zimmer Biomet or its Customers to other
Team Members, and do so only on a legitimate "need to know" basis. Team
Members must not disclose or permit the disclosure of any proprietary or
confidential information to non-Team Members, except when such disclosure
is pre-approved by Zimmer Biomet Legalor is legally mandated by applicable
laws or regulations.

lf confidential or proprietary information gets into the wrong hands, either


accidentally or on purpose, Zimmer Biomet or its Customers may suffer
damages. Team Members' obligation to maintan the confidentiality of Zimmer

Biomet's proprietary information continues even after their employment


ceases.

Every Team Member has the right to confidentiality of certain employment

records and personal information, such as their name, address, date of


birth, government identifcation number, compensation, employment status
and performance, consistent with local laws. Zimmer Biomet collects and
maintains this personal information in compliance with applicable laws
and regulations. We restrict access to this information as appropriate and
use it only as necessary for legitimate business purposes, including the
administration of

hu

man resources.

All uses of Zimmer Biomet's trademarks and trade names should conform
to our policies and procedures. Zimmer Biomet respects the intellectual
property of others and will not knowingly infringe others' valid patents,
trademarks and copyrights. lf any Team Member believes that another
company is infringing a Zimmer Biomet patent, trademark or copyright, he or
she should contact Zimmer Biomet Legal.

What is proprietary or confdential information?


. Proprietary information: intellectual property such as trade secrets,
patents, trademarks and copyrights, as well as business, marketing
and service plans, engineering and manufacturing ideas, designs,
databases, records, salary information and any unpublished

financial data and reports.

. Confidentialinformation:

all non-public information that mlght be

of use to competitors, or harmful to Zimmer Biomet or its Customers,


if disclosed; confidential information also includes all information
that may be used to identify patients who use Zimmer Biomet products.

Zimmer Biomettakes
confidential ity seriously.

l2s

Section 5
External Communcations and Engagement

Public Disclosures
As a public company, Zimmer Biomet is held to certain standards with respect

to public disclosures and announcements. All disclosures and announcements


made by Zimmer Biomet to stockholders or the investment community must
be accurate and complete, fairly present the subject matter of the disclosure
(whether Zimmer Biomet's financial condition, results of operations, cash
flows, liquidity or otherwise) and be shared on a timely basis as required by

applicable law and stock exchange requirements.


Team Members may be called upon to provide or review information that will
be included in Zimmer Biomet's filings with the United States Securities and
Exchange Commission ('SEC") or other government agencies or otherwise

disclosed to the public.Zimmer Biomet expects all Team Members to take


this responsibility very seriously and to provide information that is relevant,
objective, accurate and complete to promote full, fair, accurate, timely and
u nderstandable disclosu res.

Charitable, Educational or

umanitarian Efforts

Zimmer Biomet is committed to the communities in which it operates and


does business by encouraging participation in and supporting charitable,
educational and humanitarian organizations and activities. These efforts
may never be contingent upon, or related to, the recommendation, use or
purchase of Zimmer Biomet products.

Political Process and Contributions


Government officials often need timely, valid information upon which to
base their decisions. At times, through designated spokespersons, Zimmer
Biomet will offer opinions on legislation that may affect the interests of
Zimmer Biomet's business, Team Members or Customers. We complywith all
applicable laws and regulations related to lobbying or attemptlng to influence
government officials. Nevertheless, Zimmer Biomet does not make any
corporate pol itical contributions.

To

report a known or suspected issue, contact +1.877.593.458,2(Zimmer) or +1.888.469.1566 (Biomet)

261

Section 6
Usinc

thc Codc

The Code outlines core principles and ethical


standards that apply to all Team Members.
to conduct yourself according to the legal and ethical
standards outlined in the Code and Zimmer Biomet policies and
procedures. eam Members should seek to avoid even the perception
of improper behavior. Zimmer Biomet expects all Team Members
to read, understand and follow the Code. Periodically, in addition to
completing training requirements, Team Members are expected to sign
a written acknowledgment that they have read, understand and agree

You are expected

to follow the Code.

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.:

127

Section 6
Using the Code

Reporting a Potentialor Known Violation


From time to time, Team Members may learn or suspect that other Team
Members or Business Partners may have violated the company's policies
and procedures, or even applicable laws, regulations and industry codes.
Team Members are required to report any known or suspected concerns
or violations either in person to their managet supervisor, Zimmer Biomet
Compliance or through one of the company's Compliance Hotlines. Known
or suspected activities that must be reported include the following;
Volations of opplicoble laws, regulations or ndustry codes;

Zimmer Biomet's
Compliance Hotlines
are operated by a thirdparty service provder,
and are available
24 hours a day,
7 days a week.

Volations of U.S. federol heolthcore progrom requirements ;


Volotions of ths Code;
Violotions of our polices ond procedures; ond
Concerns ob out Zimmer Biomett occo unting, internal accountng

control or oudting reloted motters.

It is in our collective best interest to report such violations immediately, as


doing so may help Zimmer Biomet prevent illegal or unethical conduct from
occurring or continuing, and may also prevent a situation from escalating.

All reports submitted are confidential and will be investigated. Team


Members may choose to make an anonymous report, unless otherwise
required by law. While we strive to maintain confidentiality of the reporting
person, a government or court order may compel Zimmer Biomet to disclose
the identity of the reporting person.

Failure to report known or potential violations can have significant


consequences. Depending upon the seriousness of the violation and
applicable laws, Team Members who violate the Code, fail to report a
potentialcompliance issue, withhold information aboutan actual orsuspected
compliance or legal issue or otherwise fail to cooperate in an investigation
will face appropriate disciplinary action, which may include termination of
employment or service. ln addition, Team Members who violate the laws and
government regulations could expose themselves and Zimmer Biomet to
substantial fines, penalties and damages.

To

report a known or suspected issue, e1f +1.877.593.45A2 (Zimmer) or +1.888.469.1566 (Biomet).

281

Section 6
Using the Code

ffiKIffi

To report a known or suspected issue regardng:


Legacy Zimmer Team Members, Business Partners, or business activities:

call+1.877.593.4582 (toll-free in the United States)

Email zimmer-compliance-hotline@zimmer.com

Visit httos://www.compliance-helpline.com/Zimmer. isp

Legacy Biomet Team Members, Business Partners, or business activities:

Call+1.888.469.1566 (toll-free in the United States & Canada)

Visit http://www.ethicsooi nt.com


(select "File a New Report" and enter "Biomet" as the organization name)

Zimmer Biomet Team Members, Business Partners, or business activities:


Call +1.888.469.1566 (toll-free in the United States & Canada)

Vist htto://www.ethicspoint.com
(select "File a New Report" and enter "Zimmer Biomet" as the organization name)

129

Section 6
Using the Code

Non-Retaliation
Zimmer Biomet prohibits retaliation against any Team Member who makes a
good faith report of a known or suspected compliance or legal issue. "Good

faith" does not mean that the Team Member has to be right, but it does mean
that the Team Member believes they are providing truthful information.
lf a Team Member feels they are the subject of retaliation, that individual
can report the situation to the Compliance Hotlines or Zimmer Biomet
Compliance or Legal.

eam Members may bring any questions or concerns to Zimmer Biomet's


attention through one of the available channels. Team Members must never
be discouraged from using any of the available channels within Zimmer
Biomet. Even simple questioning of a person reporting a violation can
lead to unintentional retaliation, as it may make the person feel that they
did something wrong by choosing one method over another. Any person
reporting

violation under the Code must be able to freely choose whichever

method they are most comfortable with to communicate the concern to


Zimmer Biomet.
Any Team Member who retaliates against anotherTeam Member for reporting

known or suspected violations of our legal or ethical obligations will be in


violation of the Code and subject to disciplinary action, up to and including
dismissal. Retaliation may also be a violation of the law and could subject both
the individual offender and Zimmer Biomet to legal liability.

To

report a known or suspected issue, contact +1.877.593.4582 (Zimmer) or +1.888.469.1566 (Biomet).

30

Section 6
Using the Code

Conflicts
The Code provides guidance regarding applicable laws and regulations where
Zimmer Biomet operates; however, such laws and regulations are often complex
and vary from country to country. lf a conflict exists between the Code and a
law or regulation, the most restrictive applies. Team Members who believe a

conflict exists between the Code and a law or regulation and/or are unsure how
to proceed should contact Zimmer Biomet Compliance or Legal.

Waivers
It may be appropriate for a provision of the Code to be waived in a particular
circumstance. AnyTeam Member seeking a waiver must speak to his manager
or supervisor, who will then need to contact Zimmer Biomet Compliance.
Unless pre-approved in writing by Zimmer Biomet's Chief Compliance Officer,
all provisions of this Code apply.
Any waiver of the Code for Zimmer Biomet's executive officers or directors

may only be made by Zimmer Biomet's Board of Directors and will be


disclosed promptly according to the applicable requirements of the SEC.
Zimmer Biomet reserves the rightto periodically reviewthe Codeto determine
if revisions are appropriate and to then make any necessary revisions.

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ZIMMER BIOMET
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345 East Main Street


Warsaw, lN 4658'1-0708

zimmerbiomet.com

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