Exhibit 10.1


 


QUALITY AGREEMENT


 


This QUALITY
AGREEMENT (this “Agreement”), is entered into as of [•], 2014 (the “Effective Date”) between Symmetry
Medical Inc., a Delaware corporation (the “Company”), and Racecar SpinCo, Inc., a Delaware corporation (“SpinCo”).
Company and SpinCo are referred to herein collectively as the “Parties,” and each individually as a “Party”.


 


WHEREAS,
the Parties have entered into that certain Supply Agreement, dated as of    [•], 2014 (the “Supply
Agreement”); and


 


WHEREAS, pursuant
to the terms of the Supply Agreement, the Parties intend to supply to each other certain Products; and


 


WHEREAS, the Parties
desire to enter into this Agreement in order to provide for the agreement of quality and regulatory issues related to the supply
of Products under the Supply Agreement;


 


NOW, THEREFORE, in
consideration of the mutual promises, covenants and agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledge, and intending to be legally bound hereby, the Parties hereby agree
as follows:


 


		1.0	DEFINITIONS. Capitalized
                                         terms used herein but not otherwise defined shall have the meanings set forth in the
                                         Separation Agreement.



 


		2.0	PURPOSE



 


		2.1	This Agreement addresses the
                                         quality system requirements for the Products and is intended to ensure that the Products
                                         and all other products affected by the Product, if any, will be safe and effective, will
                                         have the proper identity, quality, purity, and potency, and will be in compliance with:
                                         (i) the Federal Food, Drug, and Cosmetic Act, as amended, 21 US.C. 321-394, (the “FD&C
                                         Act”); (ii) current good manufacturing practice requirements (“cGMP”)
                                         as set forth in the Food and Drug Administration (“FDA”) quality system (“QS”)
                                         regulations, as amended, 21 CFR 820.1, et seq. (“QS Regulations”);
                                         (iii) Directive 93/42/EEC concerning General Medical Devices (MDD) and, (iv) Receiving
                                         Party’s requirements and/or specifications (if any) (hereinafter collectively referred
                                         to as the “Product Specifications”).



 


		2.2	In the event that quality issues
                                         not otherwise addressed in this Agreement arise during Product manufacture, quality evaluations,
                                         and/or performance of Supplying Party’s services, then Supplying Party agrees to
                                         implement mutually agreed upon continual improvement
                                         activities (including, without limitation, performance enhancements and corrective actions)
                                         that Receiving Party and Supplying Party mutually agree are necessary or appropriate
                                         to improve, assure, or otherwise maintain the quality of the Product, with neither Party’s
                                         agreement being unreasonably withheld, conditioned or delayed.



 


		3.0	SCOPE AND EFFECT



 


		3.1	Product Registration. Supplying
                                         Party shall be responsible for registering Supplying Party’s facilities with the
                                         appropriate Regulatory Agency or Agencies and for maintaining any such registrations
                                         and/or licenses in accordance with 21 CFR 807.20, 21 CFR 807.40 and Directive 93/42/EEC
                                         concerning General Medical Devices (MDD).



 


		3.2	Regulatory Filings. The Party
                                         that is considered the legal manufacturer is responsible for maintaining and keeping
                                         readily available all documentation, correspondence and forms related to 510K, Pre-Market
                                         Approvals (“PMA”), and CE Marking.






  




    	 



    	 



    

  


		3.3	The terms of this Agreement are
                                         intended to be consistent with and supplement the terms of any Supply Agreement. Notwithstanding
                                         the foregoing, in the event of any conflict between terms in this Agreement and any Supply
                                         Agreement or any purchase order, then the documents shall govern in this order: (i) the
                                         Supply Agreement; (ii) this Agreement; and, (iii) purchase order.



 


		3.4	Duration of Agreement.  This
                                         Agreement’s term is coterminous with the Supply Agreement in every respect (the
                                         “Term”), and shall at all times apply to the Product(s) provided by Supplying
                                         Party to Receiving Party under the Supply Agreement. Notwithstanding the foregoing, any
                                         section of this Agreement which has a predefined retention, survival or maintenance retention
                                         shall survive the termination of this Agreement for no less than five (5) years, at which
                                         time these obligations shall be reviewed in good faith for an extension of time if appropriate.



 


		3.5	Responsibilities of the Parties. Appendix I sets forth
                                         the respective rights and obligations of the Receiving Party and Supplying Party
                                         hereunder.



 


		4.0	COMMUNICATION AND DESIGNATION OF QUALITY REPRESENTATIVE
                                         



 


		4.1	Each Party shall designate the
                                         appropriate person(s) from its respective quality unit (the “Quality Representative”)
                                         to be responsible for maintaining communication about quality assurance for the Product
                                         and this Agreement, including sending and receiving any notice(s) described or required
                                         herein.



 


		4.2	Exhibit A: Specifications,
                                         Products and Materials, provides an initial and/or brief description of the Product(s).



 


		5.0	SUPPLYING PARTY QUALITY MANAGEMENT SYSTEM REQUIREMENTS
                                         



 


		5.1	The Supplying Party shall implement
                                         and maintain a quality management system in accordance with cGMP/QS requirements (21
                                         CFR 820) and ISO 13485:2008: Medical devices-Quality management systems-requirements
                                         for regulatory purposes.



 


		6.0	INTERNAL QUALITY SYSTEM AUDITS AND CORRECTIVE ACTION



 


		6.1	Each Party will establish procedures
                                         for Quality System audits and conduct such audits to ensure that the Quality System is
                                         in compliance with the established Quality System requirements and to determine the effectiveness
                                         for the Quality System as set forth in 21 CFR 820.22 (Internal Audit).



 


		6.2	Each party shall establish and
                                         maintain procedures for implementing corrective and preventive action as set forth in
                                         21 CFR 820.100 (a) and to maintain such corrective and preventive action system in accordance
                                         with ISO 13485 8.5.2 (Corrective Action) and 8.5.3 (Preventive Action).



 


		7.0	TRAINING AND EDUCATION



 


		7.1	The Supplying Party shall determine the necessary education
                                         and training requirements for all employees, including temporary employees, entrusted
                                         with any work affecting quality to ensure that all personnel are trained to adequately
                                         perform their assigned responsibilities per 21 CFR 820.25 (b)(1)(2). Supplying Party
                                         shall keep records of training in accordance with record retention requirements identified
                                         in Appendix I.



 


		8.0	DESIGN CONTROLS (see Appendix I)
	 	 	 



		8.1	Design Controls Generally. Supplying Party acknowledges
                                         and agrees that design and development planning is necessary and established to ensure
                                         that the design process for the Product is appropriately controlled and that Product
                                         Specifications and quality objectives are met.
	 	 	 





    	 



    	 



    

  


		8.2	Design Controls Developed By Receiving Party. Unless otherwise
                                         agreed to in a written document signed by the Parties and incorporated herein by reference,
                                         the Parties acknowledge and agree that Receiving Party is responsible for the design
                                         and development requirements for the Product in accordance with 21 CFR 820.30 and owns
                                         all design documents (including the design history file (DHF)) and specifications. Further,
                                         the Supplying Party shall be responsible for translating all design materials provided
                                         by Receiving Party and implement and perform the designated manufacturing activities
                                         in compliance with: (i) the procedures, drawings, requirements, and/or other design materials
                                         provided by Receiving Party; and, (ii) the requirements of the QS Regulations/cGMPs including,
                                         without limitation, the design transfer requirements set forth in 21 CFR 820.30(h).



 


		9.0	PROCESS CONTROL (see Appendix I)



 


		9.1	Production and Process Controls.
                                         Supplying Party shall develop, conduct, control, validate (where process results cannot
                                         be fully verified by inspection and testing) in accordance with 21 CFR 820.75 (Process
                                         Validation) and 820.70 (g) (Equipment Qualification) and conduct a documented risk analysis
                                         for the complete process of manufacturing (such as Process Failure Modes and Effects
                                         Analysis (“pFMEA”) or Control Plans, and monitor production processes to
                                         ensure that the Product conforms to Product Specifications.



 


		9.2.	Supplying Party shall, more specifically,
                                         assure that production equipment and quality measurement equipment, including mechanical,
                                         electronic, automated, chemical, or other equipment, are: (i) suitable for the intended
                                         use; (ii) capable of producing valid results; (iii) operated by trained personnel; and,
                                         (iv) properly calibrated to the appropriate standard



 


		9.4	Equipment Controls. All equipment
                                         used to manufacture the Product shall be appropriately designed, constructed, placed,
                                         and installed to facilitate maintenance, adjustment, cleaning and use in accordance with
                                         QS Regulations, including, without limitation, 21 CFR 820.70(g).



 


		9.4.1	Supplying Party shall establish
                                         and maintain written maintenance procedures and schedules and shall specifically document
                                         the performance of all maintenance activities.



 


		9.4.2	Supplying Party shall conduct and
                                         document completion of periodic inspections and/or audits to ensure Supplying Party’s
                                         adherence to equipment maintenance procedures and schedules.



 


		10.0	DOCUMENT CONTROLS AND RETENTION (see Appendix
I)



 


		10.1	Product Records.



 


		10.1.1	Supplying Party shall possess
                                         and retain detailed written records of all Supplying Party activities relating to the
                                         Product, including but not limited to documents concerning the design, development, composition,
                                         manufacture, testing, quality, validation, traceability, remanufacture, packaging, labeling,
                                         inspection, and shipping activities relating to the Product (collectively referred to
                                         as the “Product Records”).



 


		10.1.2	Product Records also include
                                         all documents required by this Agreement, the Supply Agreement and applicable QS Regulations/cGMPs,
                                         including, but not limited to, the compilation of documents comprising a design history
                                         file (“DHF”), device history record (“DHR”) and device master
                                         record (“DMR”) as those terms are defined in 21 CFR 820.3.



 


		10.2	Document Controls. Supplying
                                         Party shall establish and maintain an up-to-date written document control system for
                                         controlling the Product Records in accordance with the requirements set forth in this
                                         Agreement, the Supply Agreement, and the document control provisions in the QS Regulations,
                                         including, without limitation, 21 CFR 820.40.



 




    	 



    	 



    

  


		10.3	Document Changes. Supplying
                                         Party shall maintain records of changes to documents. Change records shall include a
                                         description of the change, identification of the affected documents, the signature of
                                         the approving individual(s), the approval date, and when the change becomes effective.



 


		10.4	Record Retention. Supplying
                                         Party shall retain all Product Records for a period of time equivalent to the design
                                         and expected life of the Product or the medical device in which the Product is intended
                                         to be included. Notwithstanding the foregoing, Supplying Party shall not alter, destroy,
                                         or otherwise dispose of any Product Records without Receiving Party Corporation’s
                                         prior written authorization.



 


		10.5	Access to Product Records. Supplying
                                         Party shall provide copies of any or all Product Records to Receiving Party within a
                                         reasonable period of time following the request.



 


		11.0	CHANGE CONTROL (see Appendix I)



 


		11.1	Significance of Change Control.
                                         Supplying Party acknowledges and agrees that changes to any process, system, or activity
                                         (including, without limitation, designs, specifications, procurement, Supplying Party’s
                                         raw materials, manufacturing, shipping, labeling, packaging, tests, testing methods,
                                         calibration standards, standard operating procedures, equipment, software, maintenance,
                                         contamination controls, quality systems, and documents containing the procedures and
                                         specifications for the Product) relating to the Product can impact the safety, identity,
                                         quality, effectiveness, purity and/or potency of the Product. Supplying Party further
                                         acknowledges and agrees that certain manufacturing changes may require regulatory filings
                                         and/or regulatory approval prior to implementing any such change.









  


		11.2	Supplying Party’s Change
                                         Control System. Supplying Party shall establish and maintain an up-to-date change control
                                         system with written policies and procedures for identifying, addressing, documenting,
                                         and implementing changes to any specification, method, process, or procedure (from design
                                         to delivery) relating to the Product. Such changes shall be verified, or where appropriate
                                         validated according to 21 CFR 820.75, before implementation and these activities shall
                                         be documented. Any such changes shall be approved by appropriate personnel and in accordance
                                         with the document change procedures set forth in 21 CFR 820.40. Such changes shall be
                                         verified, or where appropriate validated according to 21 CFR 820.75, (Validation of processes
                                         for production and service provision), before implementation and these activities shall
                                         be documented. Such changes shall be approved by appropriate personnel and in accordance
                                         with the document change procedures set forth in 21 CFR 820.40 .



 


		11.3	Notice of Proposed Changes.
                                         In the event that Supplying Party identifies or is made aware of a potential change to
                                         any process, system, or activity relating to the Product, then Supplying Party shall
                                         promptly, and in no event later than three (3) business days after becoming aware of
                                         the potential change, notify Receiving Party of the proposed change using the current
                                         change request form (“SCR”). Each SCR shall, at a minimum, set forth a narrative
                                         description of the proposed change, identification of any documents affected by the proposed
                                         change, Supplying Party’s plan for addressing and implementing the proposed change,
                                         and when the proposed change would become effective.



 


		11.4	Change Approval. Supplying
                                         Party shall not implement any changes to any process, system, or activity relating to
                                         the Product without prior written approval from an authorized member of Receiving Party’s
                                         quality assurance department. Supplying Party assumes all financial responsibility for
                                         changes made by Supplying Party without the required prior written approval from Receiving
                                         Party.



 


		12.0	SUPPLYING PARTY’S PURCHASING AND ACCEPTANCE
ACTIVITIES (see Appendix I)



 


		12.1	Supplying Party’s Purchasing Controls. Supplying Party
                                         shall establish and maintain written requirements and procedures to ensure that all services
                                         or product(s) purchased or otherwise received by Supplying Party are acceptable for their
                                         intended use and conform to all Product Specifications.
	 	 	 





    	 



    	 



    

  


		13.0	MATERIAL USE, STORAGE, IDENTIFICATION AND TRACEABILITY
(see Appendix I)



 


		13.1	Storage of Materials. Supplying
                                         Party shall establish and maintain procedures for control of storage areas and stock
                                         rooms for product to prevent mix-ups, damage, deterioration, contamination, or other
                                         adverse effects pending distribution. Where Receiving Party provides raw material, Supplying
                                         Party shall maintain its traceability.



 


		13.2	Identification. Supplying Party
                                         shall establish and maintain procedures for identifying product during all stages of
                                         receipt, production, distribution, and installation to prevent mixing of materials.



 


		13.3	Traceability Controls. Supplying
                                         Party shall establish and maintain procedures to trace any material or component that
                                         relates to or is otherwise part of the Product via a unit, lot or batch control number
                                         in accordance with cGMPs/QS Regulations, including 21 CFR 820.65, and Product Specifications.
                                         Supplying Party shall document such traceability controls in order to facilitate corrective
                                         action.



 


		14.0	LABELING AND PACKAGING
                                         (see Appendix I)



 


		14.1	Labeling. The appearance and text
                                         of any labeling and packaging used in connection with the Product or any finished product
                                         containing or contained in the Product shall be identical to that utilized in the six
                                         (6) months prior to the Effective Date unless otherwise agreed to by the parties in good
                                         faith.



 


		14.2	Packaging. The Party that is
                                         considered the legal manufacturer shall ensure that Product packaging is designed, validated,
                                         and constructed to protect the Product from alteration, contamination, mix-up, or damage
                                         during all processing, storage, handling and distribution activities. Bulk Product packaging
                                         is designed based on historical experience and/or accepted industry standards, relative
                                         to protecting the Product in transit. Supplying Party shall examine packaging related
                                         to the Product to assure that such containers and packaging: (i) are in accordance with
                                         Product Specifications; and, (ii) are not damaged or misbranded. Furthermore, Product
                                         shall be packed in such a way as to prevent the inadvertent mixing of multiple lots of
                                         parts.



 


		16.0	PRODUCT RELEASE



 


		16.1	Delivery Documentation. Supplying Party shall provide the
                                         following information with each delivery to Receiving Party:



 


		·	Part
                                         Number;



		·	Receiving
                                         Party PO Number



		·	Lot
                                         Number



		·	Quantity



		·	Certificate
                                         of Analysis and/or Certificate of Conformance (see 18.1.3)



 


		16.2	Certificate of Conformance. Supplying
                                         Party shall include with each shipment a Certificate of Conformance (“Certificate
                                         of Conformance”) stating the following: 



 


		·	Supplying
                                         Party Name



		·	Receiving
                                         Party Part Name



		·	Receiving
                                         Party Part # and Revision Level



		·	Receiving
                                         Party Purchase Order #



		·	Supplying
                                         Party Lot#



		·	Quantity
                                         Shipped



		·	Date
                                         Manufactured
	 	 	 





    	 



    	 



    

  


		17.0	COMPLAINT FILES



 


		17.1	Complaint. The term “Complaint”
                                         means any indication of the failure of the Product to meet customer or user expectations
                                         for quality or to meet performance specifications, including, without limitation, any
                                         written, electronic, or oral communication that alleges deficiencies related to the identity,
                                         quality, durability, reliability, safety, effectiveness, or performance of the Product
                                         after it is released for distribution.



 


		17.2	Complaint Handling System.
                                         Supplying Party must establish and maintain written procedures for receiving, reviewing,
                                         and evaluating Complaints in accordance with cGMPs/QS Regulations, including 21 CFR 820.198.



 


		17.3	Complaint Files. Supplying
                                         Party will maintain written records of Complaints in accordance with cGMPs/QS Regulations,
                                         including 21 CFR 820.198, that provide, at a minimum, written records of any investigation
                                         and the reasoning used by Supplying Party to determine whether an investigation is, or
                                         is not, necessary.



 


		17.4	Notice. Supplying Party shall
                                         immediately notify Receiving Party in writing of any Complaint or Adverse Event involving
                                         the possible failure of the Product, including labeling or packaging, to meet any Product
                                         specifications. This Section shall survive Termination of the Agreement.



 


		17.5	Complaint Investigation.



 


		17.5.1	The Party that is considered the
                                         legal manufacturer is responsible for the initial assessment and, if appropriate, initial
                                         investigation of Complaints alleging an event that could be reportable to the FDA under
                                         FDA medical device reporting regulations, 21 CFR Part 803, as amended, and/or other Regulatory
                                         Agency as required.



 


		17.5.2	Supplying Party Investigation.
                                         Notwithstanding the foregoing provision, Supplying Party will investigate Complaints
                                         if requested to do so by Receiving Party. Supplying Party will provide an investigation
                                         report to Receiving Party within ten (10) business days after Receiving Party’s
                                         request for a Supplying Party investigation. Supplying Party’s investigation shall
                                         be completed and documented in accordance with cGMPs/QS Regulations, including 21 CFR
                                         820.198.



 


		17.6	Medical Device Reporting. The
                                         Party that is considered the legal manufacturer shall be responsible for reporting to
                                         the relevant Regulatory Agency and/or FDA all Complaints and Adverse Events relating
                                         to the Product that are required to be reported under FDA medical device reporting regulations,
                                         21 CFR Part 803, as amended.



 


		18.0	QUALITY & MANUFACTURING AUDIT



 


		18.1	Quality Audit. The term “Quality
                                         Audit” and “Manufacturing Audit” means an on-site systematic, independent,
                                         and documented examination of Supplying Party’s quality and process systems to
                                         determine whether Supplying Party is in compliance with quality and process system procedures,
                                         that the procedures are implemented effectively, that adequate controls are in-place,
                                         that the procedures are suitable to achieving quality objectives and product requirements,
                                         and that the systems are in accordance with applicable cGMPs/QS Regulations.



 


		18.2	Quality Audit Procedure. Supplying
                                         Party shall provide Receiving Party with access to Supplying Party’s facilities,
                                         Product Records, and/or operations to conduct the Quality Audit during normal business
                                         hours and in a manner, as reasonably practicable under the circumstances, not to interfere
                                         with Supplying Party’s normal and ordinary operations. Receiving Party’s
                                         representative(s) or agent(s) conducting a Quality Audit will be qualified to conduct
                                         such audits, shall comply with Supplying Party’s safety and security rules, and
                                         will execute a commercially reasonable confidentiality agreement respecting the information
                                         obtained during the Manufacturing Audit. Each Party’s respective Quality Representative
                                         shall work together to coordinate and effectuate the Quality Audit; provided, however,
                                         that Supplying Party shall not in any manner unreasonably delay, condition, or otherwise
                                         interfere with Receiving Party’s right to conduct the Quality Audit.





    	 



    	 



    

  


		18.3	Corrective Action Plan.



 


		18.3.1	In the event that a Quality
                                         Audit finds or identifies any condition(s) that are not in compliance with this Agreement,
                                         Product Specifications, or cGMPs/QS Regulations (hereinafter a “Finding”),
                                         and are not cured within thirty (30) days of written notice from Receiving Party to Supplying
                                         Party, then: (i) Supplying Party may be placed on a no future business or restricted
                                         procurement status with Receiving Party; and, (ii) Supplying Party shall be responsible
                                         to provide Receiving Party with a written corrective action plan within thirty (30) business
                                         days thereafter.



 


The corrective action plan shall,
at a minimum, set forth a narrative description detailing Supplying Party’s steps for addressing each Finding and implementing
proposed containment, corrective and as applicable-preventive actions, and when such corrective and preventive actions would be
implemented.


 


		18.3.2	In the event that Supplying
                                         Party fails to provide an acceptable corrective and preventive action plan to Receiving
                                         Party within the requisite thirty (30) business day period, then Supplying Party shall
                                         remain on no future business or restricted procurement with Receiving Party.



 


		19.0	REGULATORY INSPECTION



 


		19.1	Regulatory Agency. The term
                                         “Regulatory Agency” means any local, state, regional, U.S. federal, or non-U.S.,
                                         governmental or regulatory agency, relevant Competent Authority including, without limitation,
                                         the FDA.



 


		19.2	Supplying Party Registration.
                                         Supplying Party shall be responsible for registering Supplying Party’s operations
                                         and/or facilities with the appropriate Regulatory Agency (ies) and for maintaining any
                                         such respective registrations and/or licenses. Supplying Party shall maintain, and keep
                                         readily available, all documentation and forms relating to such registrations and/or
                                         licenses.



 


		19.3	Regulatory Communications. Supplying Party will notify Receiving
                                         Party within five (5) business days of Supplying Party’s receipt of any warning
                                         letter, untitled letter, or any observations from a Regulatory Agency (e.g. Form FDA-483)
                                         that identify or impact the Product and/or Receiving Party.



 


		19.4	Cooperation. To the extent that any inspection or action
                                         by a Regulatory Agency directly affects the Product and/or Receiving Party, Supplying
                                         Party agrees to cooperate and confer with Receiving Party prior to Supplying Party submitting
                                         any response to a Regulatory Agency. Supplying Party further agrees to obtain Receiving
                                         Party’s consent, which will not be unreasonably withheld or delayed, before Supplying
                                         Party makes any commitment to a Regulatory Agency that would affect the Product and/or
                                         Receiving Party.



 


[SIGNATURE PAGE FOLLOWS]


 




    	 



    	 



    

 


IN WITNESS THEREOF, the Parties
enter into this Agreement and sign below to indicate their review, acceptance, and agreement to the terms and conditions set forth
herein.


 


	 	Symmetry Medical Inc.
	 	 	 
	 	By:	
	 	 	Name: Thomas J. Sullivan
	 	 	Title: President and Chief Executive Officer
	 	 	 
	 	 	Racecar SpinCo, Inc.
	 	 	 
	 	By:	
	 	 	Name: Thomas J. Sullivan
	 	 	Title: President and Chief Executive Officer


 





[Signature Page to Quality Agreement]