MANUFACTURING AGREEMENT This Agreement dated as of the 25 day of January, 2005
This Agreement dated as of the 25 day of January, 2005
BETWEEN:
Med-Tech Solutions Inc.,
a company duly incorporated pursuant to the laws of the State of Nevada
and having its office at Suite 2200 – 0000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxx, X.X., X0X 0X0 |
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(the "Company") |
AND:
MDMI TECHNOLOGIES INC. (FORMERLY
M.D.M.I. MANUFACTURING CANADA LTD.), a company duly
incorporated pursuant to the laws of Canada and having its office at 000-00000
Xxxxxxxxx Xxx Xxxxxxxx, XX, X0X 0X0 |
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(the "Manufacturer") |
WHEREAS:
A. | The Manufacturer has agreed to manufacture a certain
urinary incontinence apparatus described in Schedule “A” attached
hereto on behalf of the Company, for use in the women’s health care
industry, according to the quality standards of the Company; and the Company
has agreed to purchase such products from the Manufacturer, on the terms
of this Agreement. |
B. | The Company originally acquired the rights to the
aforesaid urinary incontinence apparatus pursuant to an exclusive license
agreement dated October 29, 2004 (the “Technology Acquisition Agreement”).
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THEREFORE in consideration of the mutual covenants in this Agreement and other good and valuable consideration, receipt of which is acknowledged, the parties hereto agree as follows: | |
1.0 | DEFINITIONS |
In this Agreement: |
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1.1 | "Documentation" means any technical or user
manuals or documentation related to or necessary for the use of the Products,
in English and in various foreign-language versions; |
1.2 | "MDMI Document Control System" means the
document control system implemented by the Manufacturer. |
1.3 | "Products" means the products described in
Schedule "A" attached to and forming part of this Agreement, which
pursuant to this Agreement will be manufactured by the Manufacturer on
behalf of the Company. |
1.4 | "Specifications" means the Product manufacturing
specifications originally given to the Company by the Manufacturer pursuant
to the Technology Acquisition Agreement, and referred to in Schedule "A",
as amended from time to time by the Company. |
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1.5 | The following schedules
are attached to and form part of this Agreement: |
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(1) |
Schedule "A" Products and Specifications |
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(2) |
Schedule "B" Price List |
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2.0 |
PRODUCTS AND PRICE |
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2.1 | Products: The Manufacturer
will manufacture the Products in Canada exclusively for the Company, according
to the Specifications, during the Term of this Agreement. The Company
will purchase the Products from the Manufacturer for the price and in
the manner set out in this Agreement. The Manufacturer will sell the Products
only to the Company and to no other person or entity. |
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2.2 | Price: The price
of the Products will be the price set out in Schedule "B" to this
Agreement (the "Price"), as amended pursuant to this Agreement.
All prices and amounts set out in this Agreement are expressed in United
States dollars. |
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2.3 | First 180 Days: For
the first 180 days of production pursuant to this Agreement (the "180-Day
Period"), the parties will monitor the costs of manufacturing the
Products. Within 2 weeks of the conclusion of the 180-Day Period, the
parties may renegotiate the Price. In the event of a failure to agree
on a renegotiated Price, either: |
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(1) |
the Price set out in Schedule "B"
will continue; or |
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(2) |
the Agreement may be terminated by
mutual consent. |
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2.4 | Price Changes: After
the 180-Day Period, Manufacturer will not change the Price unless: |
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(1) |
The Manufacturer demonstrates that
its costs to manufacture the Products have changed proportionately to
the proposed change; |
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(2) |
The Company and the Manufacturer agree
to evenly split cost savings due to part or process improvements; |
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(3) |
The Manufacturer provides a written
request for such a proposed change more than 90 days prior to the proposed
effective date of such change; |
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(4) |
The Company approves such change in
writing; |
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(5) |
A new Schedule "B" reflecting the price
change is issued for this Agreement. |
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2.5 | New Products: The
Company will provide advance written notice to the Manufacturer of any
products which are to be added to this Agreement. By consent of both parties,
all relevant Schedules will be amended or if necessary new Schedules will
be added in respect of specifications, price, materials and equipment,
etc. related to any new products. The terms of this Agreement will apply
to such new products, which will be deemed to fall under the definition
of "Products". |
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3.0 | SPECIFICATIONS &
QUALITY CONTROL |
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3.1 | Obligations of the Manufacturer: The Manufacturer will: |
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(1) | manufacture and test the Products to
the uniform, high quality standards established by the Company, which
meet or exceed all the Specifications; |
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(2) | manufacture the Products in quantities
sufficient to meet the demand for the Product; |
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(3) | maintain by itself, or through its
agents, an adequate stock of the materials and parts required to manufacture
the Products in accordance with this Agreement; |
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(4) | employ sufficient competent and experienced
personnel, who are skilled and trained in the manufacture of the Products; |
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(5) | provide appropriate manufacturing facilities
in Canada for the manufacture of the Products; |
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(6) | provide standard hand tools and equipment
listed in Schedule "B"; |
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(7) | maintain a quality system in accordance
with ISO13485 and provide the Company with documentation to support
quality system status; |
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(8) | notify the Company immediately in writing
in the event: |
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(1) |
the Manufacturer is unable to maintain quality system
certification in accordance with ISO Standards, or, |
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(2) |
of any non-conformities specifically relating to
the Specifications or Products. |
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(9) | if the Manufacturer fails to meet the obligations
set out above then the Company may holdback 15% of all unpaid invoices
until a satisfactory resolution is obtained. |
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3.2 | Samples: The Manufacturer
will provide the Company with sample units of the Products at time of
its first shipment of the Products. If the Company requests, the Manufacturer
will provide the Company with further "control" samples of the Products
at any time. |
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3.3 | Changes to Specifications:
The Manufacturer may not vary or change the Specifications without prior
written approval from the Company. The Company may vary, change, update
or amend the Specifications from time to time by advance written notice
to the Manufacturer. Changes to Price resulting from changes to Specifications
must be mutually agreed upon in writing. |
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3.4 | MDMI Document Control
System: The Manufacturer will document all changes to the Specifications
within the MDMI Document Control System. |
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3.5 | Records: The Manufacturer
will maintain all related manufacturing and employment records for a period
not less than 7 years following production of the Product. At any time
during business hours, the Company may conduct a comprehensive audit of
the Manufacturer's manufacturing, packaging and storage facilities, as
well as reviewing standard operating procedures, manufacturing and employment
records, and any other relevant information pertaining to the Products.
The Company may appoint representatives from an independent organization
to conduct these audits on its behalf. The Manufacturer will provide appropriate
records to any authority (including any Notified Body or Competent Authority
of the European Community) responsible for ensuring compliance with ISO
standard certification. The Manufacturer will, at the Company's request,
provide any quality control testing documentation. The Company will maintain
all distribution and post-marketing monitoring records. |
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3.6 | Quality Control: The Manufacturer
will ensure that all quality control measures and applicable federal and
provincial legislation and regulations are complied with, and will conduct
ongoing quality assurance testing. |
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4.0 | PACKAGING |
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4.1 | Packaging: The Manufacturer will
pack the Products according to the Specifications, or as specified on
the Purchase Order. If the Company develops unique packaging and/or delivery
systems for the Products, the Manufacturer will not use such unique packaging
and/or delivery systems with any other person, firm or entity in any country
where the Company sells Products during the term of this Agreement and
for twelve (12) months after the termination of this Agreement. For greater
certainty all packaging materials shall be supplied by the Manufacturer
and shall be included in the price described in Schedule “B”.
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4.2 | Packing Slip: Each shipment of
Product will contain a packing slip complete with a lot number. |
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4.3 | Certificate of Conformance: Each
shipment of Product will contain a certificate of conformance which certifies
that every Product in the shipment meets the Specifications. |
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5.0 | REPRESENTATIONS AND WARRANTIES
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5.1 | Manufacturer's Representations and
Warranties: Manufacturer warrants, represents and covenants to the
Company that: |
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(1) |
Authority: The Manufacturer has the necessary
corporate authority and capacity to enter into this Agreement; |
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(2) |
Ability: The Manufacturer has the necessary
skill, ability and expertise to perform its obligations under this Agreement; |
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(3) |
Defects: The Manufacturer warrants that each
shipment of Product will be manufactured and tested to the Specifications
and will be free of defects. The Manufacturer warrants that if defects
in the Products which prevent substantial conformance to the Specifications
occur during the term of this Agreement then, provided that the Company
provides prompt notice and full and complete disclosure of such defects
to the Manufacturer; the Manufacturer will use its best efforts to either
correct such errors or replace the defective Products within 60 days following
receipt of notice from the Company of such defects, failing which any
monies paid by the Company in respect of the purchase of such Products
will be refunded. |
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6.0 | TRADEMARKS |
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6.1 | Ownership: The Manufacturer acknowledges
and agrees that Med-Tech Solutions, Inc. ("the Company) owns the trademarks,
trade names and service marks “Gynecone”, as amended from
time to time in the sole discretion of the Company, subject in any event
to the terms of the Technology Acquisition Agreement.. |
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6.2 | Restriction: The Manufacturer
will not use any trademark or trade name belonging to the Company on any
Products or Packaging or otherwise, other than as set out in this Agreement.
The Manufacturer will not sell any Products bearing any of the Trademarks
to any person or entity other than the Company. The Manufacturer will
not manufacture any Products bearing any of the Trademarks for any person
or entity other than the Company. The Manufacturer will not use the trade
name of “Gynecone” without prior written consent from the
Company. |
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6.3 | Competing Products: During the
term of this Agreement and for a period of twelve months thereafter the
Manufacturer will neither manufacture, distribute or sell any other products
which are similar to or competitive to the Products. |
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7.0 | INTELLECTUAL PROPERTY, CONFIDENTIALITY
& USE RESTRICTIONS |
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7.1 | Technology: The Manufacturer
acknowledges and agrees that, except for the limited manufacturing rights
granted in this Agreement, the Company exclusively owns and retains any
and all right, title and interest to the Specifications, including but
not limited to all intellectual property, trade secrets, and know-how
whether or not subject to patent protection or copyright, associated with
the Specification, design and manufacture of the Products (the "Technology"),
subject in any event to the Terms of the Technology Acquisition Agreement.
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7.2 | Patents: In the event the Company
applies for a patent or other intellectual property protection in respect
of the Technology or Products, the Manufacturer will continue to have
the right to manufacture the Products as provided herein. |
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7.3 | Confidential Information: The
Manufacturer agrees that the Company has a proprietary interest in any
information provided to the Manufacturer by the Company in connection
with this Agreement whether in written or oral form, which is: |
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(1) |
a trade secret, confidential or proprietary information
relating to the Products or the Technology, |
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(2) |
not publicly known, and |
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(3) |
communicated with an expectation of confidentiality
or marked as confidential or proprietary information (the "Confidential
Information"). |
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7.4 | Exceptions: The Manufacturer
will not be liable for a disclosure of the Confidential Information if
the information so disclosed: |
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(1) |
was in the public domain at the time of disclosure
without breach of this Agreement; or |
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(2) |
was known to or contained in the records of the
Manufacturer from a source other than the Company at the time of disclosure
by the Company to the Manufacturer and can be so demonstrated; or |
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(3) |
was independently developed and is so demonstrated
promptly upon receipt of the documentation and technology by the Manufacturer;
or |
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(4) |
becomes known to the Manufacturer from a source other
than the Company without breach of this Agreement by the Manufacturer
and can be so demonstrated; or |
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(5) |
was disclosed pursuant to court order. |
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The exclusions in clauses
(2), (3) and (4) above will not apply to Confidential Information which
relates to the Technology originally acquired by the Company pursuant
to the Technology Acquisition Agreement. |
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7.5 | Restrictions: The
Manufacturer will disclose the Confidential Information only to those
of its agents and employees to whom it is necessary in order to properly
carry out their duties as limited by the terms and conditions of this
Agreement. Both during and after the term of this Agreement, all disclosures
by the Manufacturer to its agents and employees will be held in strict
confidence by such agents and employees. During and after the term of
this Agreement, the Manufacturer, its agents and employees will not use
the Confidential Information for any purpose other than in connection
with the Manufacturer's manufacture of the Product pursuant to this Agreement.
The Manufacturer will, at its expense, return the Confidential Information
to the Company as soon as practicable after the termination or expiration
of this Agreement. All such Confidential Information will remain the exclusive
property of the Company during the term of this |
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Agreement and thereafter. This Section will also
apply to any consultants or subcontractors that the Manufacturer may engage
in connection with its obligations under this Agreement. |
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7.6 | Non-Disclosure by Manufacturer: The Manufacturer
will not disclose any Confidential Information regarding any aspect of
Technology, or its manufacturing processes, or any aspect of its business
dealings with the Company to any person firm or entity, without the prior
written permission of the Company, including but not limited to the Specifications
and any other information related to the manufacturing, packaging, marketing,
or selling of the Products. |
7.7 | Non-Disclosure by Med-Tech Solutions, Inc.:
Except as required by applicable securities laws, the Company will not
disclose any information regarding any aspect of its business dealings
with the Manufacturer to any person, firm, or entity without the prior
written permission of the Manufacturer. |
7.8 | Restriction: The Manufacturer will not disassemble
or decompile the Products or any part thereof for any purpose other than
the purpose of manufacturing the Products pursuant to this Agreement.
The Manufacturer will not customize, modify or have customized or modified
any Products unless it obtains the prior written consent of the Company.
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8.0 | ORDERS AND DELIVERY |
8.1 | Purchase Order: Each order by the Company
will be made with a Purchase Order to specify quantity, price, and delivery
dates, as well as any other requirements. The Manufacturer is required
to return signed acknowledgement of the Purchase Order to the Company.
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8.2 | Order Fulfullment: The Manufacturer will use
its reasonable efforts to fill all orders placed by the Company for the
Products in accordance with the delivery dates requested by the Company.
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8.3 | Risk: Title to and risk of loss of any shipment
of the Products remains with the Manufacturer until such shipment is received
by the Company. |
8.4 | Returned Stock: The Manufacturer will accept
returned Products from the Company with respect to any stock that is non-conforming
to Specifications, or is received damaged, mislabeled, mispackaged or
in otherwise unusable condition, at 100% of current acquisition cost plus
any applicable handling and shipping fees. |
8.5 | Payment: The Company will pay the Manufacturer
for the Products within 15 days (Net 15) of receipt of invoice, with billing
to occur on the 15th and 30th of each month for
shipments delivered within each period. |
9.0 | TERM |
9.1 | Term: This Agreement commences on the date
first written on page one and continues for an indefinite period thereafter
(the "Term") until terminated according to Section 2.3 above or
Section 10.0 below. This Agreement may be renewed by mutual consent of
the parties. |
10.0 | TERMINATION |
10.1 | Termination: Either the Company or the Manufacturer
may terminate this Agreement by giving three months written notice to
the other party including a defined date of termination, or immediately
by mutual written agreement. |
10.2 | Rights over Inventory: If the Company terminates
this Agreement pursuant to Paragraph 10.1, then: |
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(1) |
the Company will purchase all of the Manufacturer's
inventory of any Finished Products that have been manufactured
pursuant to a purchase order from the Company; |
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(2) |
the Company will purchase at cost any materials,
Component Parts or Raw Goods, less the cost of materials supplied
by the Company, on hand up to (but not exceeding) the amount of such materials
required to manufacture that number of Products which were manufactured
in the three months preceding the date of termination; and h Products
to the Company. |
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(3) |
provided the Manufacturer has any finished inventory
of Products in excess of the Products referred to in 10.2(1), then the
Manufacturer will without charge deliver suc |
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10.3 | Events of Default:
Notwithstanding the above, the Company may terminate this agreement immediately
and without liability if: |
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(1) |
the Manufacturer declares bankruptcy or becomes
insolvent or enters into receivership; |
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(2) |
any Product of the Manufacturer fails to meet the
Specifications, which failure is not remedied or corrected within 15 days
of receiving written notice of such failure; or |
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(3) |
the Manufacturer does not remedy a breach of this
Agreement (other than any failure of any Product to meet the Specifications)
within 30 days of receiving written notice of such breach. |
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10.4 | Rights on Termination:
On termination of this Agreement, the Manufacturer will, without charge
and at the option of the Company, destroy or deliver to the Company all
finished inventory of Packaging and packaging material bearing the Company
trademarks, in excess of three (3) months regular inventory. On termination
of this Agreement, the Manufacturer will cease using the Technology and
the Trademarks for any purpose. |
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11.0 | INSURANCE AND INDEMNITY
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11.1 | Insurance: The Manufacturer
will obtain comprehensive general liability insurance, including product
liability coverage with respect to the Products, in the amount of not
less than one million dollars ($1,000,000.00) per occurrence,
with the Company as a named insured. |
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11.2 | Insurance Information:
The Manufacturer will provide the Company with current information with
respect to its insurance coverage on an ongoing basis, and will forward
any new information to the Company within ten (10) working days of receipt
of such new information. |
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11.3 | Legal Requirements:
The Manufacturer will ensure compliance with all legal requirements, whether
imposed by statute, regulation, or otherwise, related to the manufacturing
of the Products, and will be solely responsible for the consequences of
any failure to meet such legal requirements. |
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11.4 | Indemnity: The Manufacturer
will indemnify and hold harmless the Company and its respective directors,
officers, employees and agents from and against: |
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(1) |
any and all liabilities, whether accrued,
absolute, contingent or otherwise, with respect to any failure on the
part of the Manufacturer under paragraph 11.3; |
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(2) |
any and all damages or deficiencies
resulting from any misrepresentation, breach of warranty or non-fulfillment
of any covenant on the part of the Manufacturer under this Agreement;
and |
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(3) | any and all actions, suits, proceedings, demands,
assessments, judgments, costs, including product recall costs and legal
costs on a full- indemnity basis, and other expenses incidental to the
foregoing. |
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11.5 | Indemnity: the Company will indemnify and hold harmless the Manufacturer and its respective directors, officers, employees and agents from and against: | |
(1) | any and all damages, actions, suits, proceedings,
demands, assessments, judgments, costs, including product recall costs
and legal costs on a full- indemnity basis, and other expenses suffered
by the Manufacturer arising out of an error or defect in the Specifications
provided to the Manufacturer by the Company, but only if and to the extent
that such Specifications were amended by the Company after being initially
acquired from the Manufacturer pursuant to the Technology Acquisition
Agreement, and for greater certainty the Manufacturer will provide the
same indemnity to the Company for any damages, actions, et cetera, arising
out of an error or defect in the Specifications which were originally
provided to the Company by the Manufacturer. |
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(2) | a claim by a third party that its intellectual property
rights are infringed by one of the Products, including by the manufacture,
use, or sale of one of the Products, but only to the extent that the claim
arises by reason of changes made to the Specifications after being initially
acquired from the Manufacturer pursuant to the Technology Acquisition
Agreement |
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12.0 | GENERAL | |
12.1 | It is specifically understood
and agreed that the Manufacturer, in entering into and carrying out its
duties under this Agreement, has the status of an independent contractor.
Under no circumstances shall Manufacturer, or its agents or employees,
be deemed to be, or represent themselves as, the agents or employees of
the Company. Additionally, it is specifically agreed that this Agreement
shall not create any partnership, joint venture or similar relationship
between the parties hereto, and no representations to the contrary shall
be made by either party. Neither of the parties hereto, nor their agents
or employees shall have any authority to act for or on behalf of, or to
bind the other party in any fashion, and no representations to the contrary
shall be made by either party hereto or their agents or employees. |
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12.2 | Neither the Company nor
the Manufacturer will be responsible for delays or defaults in respect
of this Agreement that result from war (whether or not declared), riot,
terrorism, earthquake, fire, flood, or other acts of God, or acts of the
Queen or Her enemies, but the party claiming relief under this paragraph
will notify the other party within 48 hours when such a delay or default
is anticipated. If any delay in performance due to an event of force majeure
continues for a period of twelve months (12) from the date the said event
occurs or commences, this Agreement shall automatically terminate without
further obligation of any kind of either party to the other. |
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12.3 | The Manufacturer will not,
without the prior written consent of the Company, assign any of its rights
under this Agreement, which consent may be unreasonably withheld. |
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12.4 | This Agreement may be executed
in any number of counterparts, or by facsimile, each of which when delivered
will be deemed to be an original, for all purposes and will constitute
one and the same instrument, binding on the parties, notwithstanding that
all the parties are not signatories of the same counterpart or facsimile.
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12.5 | This Agreement enures to
the benefit of and is binding upon the parties and their respective successors
and permitted assigns. |
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12.6 | Each of the parties hereby covenants
and agrees to execute any further and other documents and instruments
and to do any further and other things that may be necessary to implement
and carry out the intent of this Agreement. |
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12.7 | This Agreement will be governed by and
construed in accordance with the law of the Province of British Columbia,
without regard to its conflicts of laws principles, which law will be
deemed to be the proper law of this Agreement, and the Courts of British
Columbia will have exclusive jurisdiction to entertain and determine all
claims for injunctive relief at law or in equity, arising out of or in
any way connected with the construction, breach, or alleged, threatened,
or anticipated breach of this Agreement. |
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12.8 | The captions appearing in this Agreement
are for reference and as a matter of convenience only and in no way affect
the meaning of the provisions of this Agreement. |
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12.9 | No consent or waiver, express or implied,
of any party in respect of any breach or default by the other party of
its obligations under this Agreement will constitute a consent or waiver
in respect of any other breach or default of such obligations or any other
obligation of that party. |
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12.10 | All notices or other communications
provided for in this Agreement will be deemed to have been given, delivered
or made if they are in writing and either mailed by certified mail, return
receipt requested, faxed with answer-back confirmation, or actually delivered
to the applicable party to the addresses below. All notices, requests,
demands, directions and other communications will be deemed to have been
received: when faxed, on transmission; when mailed, on the 7th calendar
day after being mailed, addressed as described above. |
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If to MDMI: . |
The Manager Business Development MDMI Technologies Inc 000-00000 Xxxxxxxxx Xxx Xxxxxxxx, XX, Xxxxxx X0X 0X0 FAX: (000) 000-0000 TEL: (000) 000-0000 |
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If to the Company: |
Med-Tech Solutions, Inc. 2200 – 0000 Xxxx Xxxxxxxx Xxxxxx Xxxxxxxxx, X.X, X0X 0X0 TEL: (000) 000-0000 FAX: (000) 000-0000 |
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12.11 | This Agreement will be read with such
changes in number and gender as the context or the reference may require.
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12.12 | If any provision in this Agreement is
invalid, illegal or unenforceable in any respect in any jurisdiction,
the validity, legality and enforceability of such provision will not be
affected or impaired in any other jurisdiction and the validity, legality
and enforceability of the remaining provisions in this Agreement will
not in any way be affected or impaired thereby, unless in either case
as a result of such determination this Agreement would fail in its essential
purpose. |
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12.13 | All disputes between the parties arising
in connection with this Agreement shall be finally settled by arbitration,
but subject to the right of parties to seek injunctive relief pursuant
to paragraph 12.7. The arbitration shall be held in a mutually agreeable
location, and shall be |
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conducted in accordance with the British Columbia
International Commercial Arbitration Center Rules of the International
Chamber of Commerce. Judgment upon the award rendered may be entered in
any court having jurisdiction or application may be made to such court
for a judicial acceptance of the award and an order of enforcement, as
the case may be. In any arbitration proceeding, the arbitrator(s) shall
have the right and authority to award to the prevailing party the costs,
including attorney fees, incurred by such party in connection with such
arbitration. |
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12.14 | Time will be of the essence of this Agreement. |
12.15 | This Agreement, including all Schedules, constitutes
the entire agreement between the parties and supersedes all previous communications,
representations, understandings and agreements whether verbal or written
between the parties with respect to the subject matter of this Agreement.
This Agreement may only be amended by a document signed by both parties.
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IN WITNESS WHEREOF the parties have hereunto set
their hands and seals as of the day and year first above written. |
MED-TECH SOLUTIONS, INC. by its authorized signatory(ies):
/s/ Xxxx X. XxXxxxx Authorized Signatory |
Name: Xxxx X. XxXxxxx |
MDMI TECHNOLOGIES INC. by its |
authorized signatory(ies): |
/s/ Xxxxx Xxxxx Authorized Signatory |
Name: Xxxxx Xxxxx |
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SCHEDULE "A"
PRODUCTS & SPECIFICATIONS | |
Silicone Elastomer MED-6010 (Body) Silicone Elastomer MED-6010 (Coating) Silicone Elastomer XXXXX 2 (Tab) Primer CF1-135 Silicone Adhesive MED-1011 Silicone ink marking R-1008-6 Colorings - Liquitex Acrylic Color Fly Line Scientific Anglers Magnetic Weight Xxxx or Ball Sinker Tungsten Powder Weight Option Heat Shrink Tube o3/32" Stainless Steel Wire o.032" Type 304 |
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SCHEDULE "B"
PRICING & QUOTATION |
The price of each urinary incontinence apparatus, including materials, labour and packaging, shall be US$10.00 per unit.
For greater certainty the price shall be the same for all differing sizes of the apparatus.