Project Javelin Management Presentation

1. Project Javelin Management Presentation July/Aug 2012

2. 1. Overview • Rexmed is a contract assembler for the US medical device market. It operates under the Maquiladora program (Mexican IMMEX register) which allows materials and equipment to be imported on a duty and tariff-free basis for assembly and re-export, providing low cost hand assembly resource for the U.S. market. • It is based at an 80,000 square foot, purpose-built leasehold facility in Juarez, Mexico, seven miles from the US border and El Paso, Texas. • The business is ISO 13485 and C-TPAT certified, and has significant expertise in products for applications in ophthalmic surgery, urology, parenteral nutrition, IV therapy, cardiology, airway management and drug delivery (including syringes and syringe kits). • This has helped the business develop and retain a blue chip customer base. Javelin is particularly skilled in providing quality critical but low cost assemblies for major surgical procedures.

3. 2. Rationale for sale • Javelin was part of Owens-Illinois’ Plastic Division, acquired by Rexmed in December 2013. The business was originally incorporated in 1990 and purchased by Owens-Illinois in 1995 and purchased by Rexam in 2007.

4. 3. Markets and competitive position Rexmedis concentrated in the ophthalmic, oncology, cardiology and radiology sub segments of the North American medical device market. The global medical device market is relatively attractive: • The global market for medical equipment and supplies is valued at US$273.3 billion in 2011 and is forecasted to be worth over US$348.6 billion by 2016, a CAGR of 5.0%1 • The global market for drug delivery devices (packaging), one of Javelin’s key segments, was worth $18.6bn in 2010 and is forecasted to reach $24.5bn by 2015 growing at a CAGR of 6% (2010-2015)2 • The U.S. is the largest consumer of medical devices and leads the world in the production of medical devices., producing 41% of the world's medical devices and consumes ~40% of the world's output3 • All sectors of the U.S. medical device industry are forecasted to grow, with growth ranging from 2-19% CAGR from 2010 to 20164 • The global medical device contract manufacturing market generated revenues of $30.1Bn in 2010. Material processing is the largest segment of this market, with revenues of $15.4Bn (51.1% share), followed by electronics $13Bn (43.2%) and finished products $1.7Bn (5.7%)5 • The contract manufacturing market is fragmented with no single player dominating • Quality is critical – for example in heart surgery - but Javelin’s products represent a small proportion of the cost base of the final product sold by Javelin’s customers. Sources: 1 Epsicom Business Intelligence. 2 Business Insights. 3 ExVere Inc. 4 Frost & Sullivan, 2009. 5 Visiongain, 2011.

5. 3. Markets and competitive position Rexmedhas a good competitive position in its chosen markets: • Its highly valuable experience as a Maquiladora provides the expertise to export to the US market and international customers in the huge and fast growing U.S. medical device sector. • It has competitive labour rates. Its location in Juarez in particular ensures access to plentiful low cost but high quality skilled and semi-skilled labour. • It has a preferred US importation process. Deliveries arrive in the US (El Paso Texas) free of importation processes for the customer. The IMMEX programme permits the return of Mexican VAT paid on Mexican goods and services used for the production of export goods. • Its products are differentiated by their quality. This is important given their range of end uses. • It is skilled in dealing with and staying ahead of the industry regulatory framework. Industry regulation, cleanroom infrastructure and assembly device specific experience limit the number of players able to provide products of the requisite quality and value for customers. • It is logistically well positioned, located in the middle of the Southwest US (800 miles from the port of Houston and 790 miles from California). The strength of the Javelin competitive position has enabled the company to maintain long term customer relationships and develop new business over a number of years.

6. 4. Products and customers • Product families

7. 4. Products and customers • Products Syringe Assembly Surgical Set Assembly Ophtalmic IV , Drainage & Enteral Container Packaging Fluid Delivery Assembly

8. 4. Products and customers 4.1 Sales split

9. 5. Facilities and operations 5.1 Juarez facility • The plant and warehouse are both located on a 200,000 sq ft site in Juarez, Mexico, seven miles from the US/Mexican border and El Paso, Texas. The facility is 80,000 sq ft and consists of: • 34,400 sq ft warehouse • 9,000 sq ft office space and • 34,300 sq ft assembly clean room areas. • The property is leased until September 2012 at a cost of $0.4m annually and lease negotiations are due to begin mid-2012. • A contract storage facility in El Paso TX is used to store components and raw materials received from customers. The warehouse is a storage service of 6,000 sq ft, 250 in & outs / month (pallets), compliant with medical device regulations. The contract is renewed every year in January. Termination can be made at any time by Javelin with 90 days’ notice.

10. Juarez Facility • Total facility size: 80,000 sq. ft • 34,300 sq. ft manufacturing space • 9,000 sq. ft office space • 34,400 sq. ft. warehouse space 1 Cleanroom 4,366 sq ft 2 Cleanroom 2,160 3 Cleanroom 1,890 4 Cleanroom 1,940 5 Cleanroom 4,840 6 Cleanroom 4,366 1 Grey area 1,800

11. Juarez Facility • Conveniently located 7 miles from the U.S./ Mexican border • A contract manufacturer of medical devices operating under the maquiladora program, since June 1990 • Registered under the Safe-Harbor Mexican Program (SHMP) and Import & Export Program (IMMEX) • Operational benefits • 25 % Electric energy reduction vs other state within Mexico ($.09 KW/hr) • Reduce duties and time on import and export transactions • Minimum payment of taxes and tax return in periodical basis Ex. IETU and VAT

12. 5. Facilities and operations 5.2 Processes, equipment & assets • Key process, capabilities and assets

13. Capabilities • Primary technologies: • Six Cleanrooms Class 8 • Assembly Medical devices • Secondary technologies: • Extrusion capabilities in ISO Class 8 environment for most thermoplastics including PVC, EVA, PE and PP. • R.F. Sealing Containers in ISO Class 8 Clean Room.

14. Capabilities Extrusion Sealing • Close tolerance single and multi-lumen • Tubing and profiles • Co extrusion and striping • Diameters from 0.045” to 0.500” • Vacuum sizing • ISO Class 8 Clean Room Environment • Process capabilities for most thermoplastics including PVC, EVA, PE and PP • There is currently considerable excess capacity given the extrusion line runs for ~8 hrs per month. Potential sales opportunities could absorb 100% of capacity. • Numerous Sealers in various configurations manufacturing a wide variety of containers in ISO Class 8 Clean Room • Shuttle High Frequency Sealer • Rotary High Frequency Sealer

15. Compliance • Compliance program to meet • Regulatory requirements • Materials full traceability and conformance • FDA registered • Quality Systems • Harmonized Quality Systems and Guidelines • ISO 14644-1:1999 • ISO 13485 :2003 • C-TPAT Certified# 494DD7AB-8191-41EF-9307-DD26D7F61639 . • Validation • Validation concept to meet regulatory requirements • FAT/IQ/OQ/PQ principles • cGMP • Full integration of cGMP’s • Regular internal GMP audits • Regular company wide GMP training • Clean Rooms class 8 compliant Key Quality Programs

16. Assembly Quality validation support for projects Quality Qualification Process • Process development and optimization • IQ: Confirm all manufacturing installation requirements are in place. • OQ: Critical parameter challenge – high and low. • PQ: PQ consists of three full lot size production runs of actual product • Validation Master Plan • Equipment • Inspection process • Metrology and Laboratory Equipments

17. Lab Expertise We employ numerous testing technologies and equipment to ensure the quality of our products • Burst Tester • Optical Comparator • Leak Tester • Tensile and Compression Tester ProductTesting

18. 5. Facilities and operations 5.3 Other services • Rexmed Co-ordinate aditional customer requirements upon request; laboratory testing services are available in El Paso and two contract sterilisation facilities are located within 20 miles of Juarez. For example Steris Isomedix Inc. and Sterigenics provide Gamma, ETO and sterilization capabilities. 5.4 Suppliers & logistics • The purchase of direct materials is limited; with the exception of Customer D and E, customers provide all the materials and components required to assemble their products. Materials provided remain the property of the customer and are not recorded on Javelin’s balance sheet. Direct materials are purchased for Customer D and E, and the costs are passed straight through to the customer, including an amount to recover procurement costs. • Customers send components and materials to be assembled to the Customs Broker in El Paso where they are transferred across the border and to the Javelin warehouse in Juarez, Mexico. Once assembled, the finished products are transported back to Customs Control where they are released by the FDA and sent on to the customer. Javelin has a customs department and warehouse contractor in El Paso TX to facilitate this process. • The customs broker used by Javelin has well established procedures to ensure any liabilities for customs charges (duties, taxes or other debts owed to US or Mexican customs) are minimised in the event the charges are not paid by the broker. Javelin routinely audits the customs broker to ensure robust management and control of customs paperwork and payments to minimise any potential liabilities. The standard approach operated is to reconcile imports/exports with US and Mexican customs retrospectively.

19. 5. Facilities and operations 5.5 IT systems • A telephone network is installed, and Javelin has an IBM Server (xServer 240) which runs Windows Server 2000. • The server supports 31 computers and is backed up onsite twice a month. Javelin uses CATI Business Software Solution. • Local hardware will be included in any sale, but the purchaser of the business will be required to make its own arrangements for software. Notes: 1 The statute of limitations does not require Javelin to reconcile prior to 2006 for Mexican customs. 2 Ongoing arisings are typically cleared approximately 3 months in arrears

20. 6. Organisation • At the end of March 2012, there were 166 people, comprising: • 150 Rexam employees and • 16 temporary workers (agency temps). • Operations are labour intensive with 116 (80%) of the 150 Rexam employees based in production (one shift). • Operations run 40 hours per week (4 days/week, 10 hrs/day) • Employee turnover is low at 1%, very low compared to typical maquiladora • Average age is 40 and average length of service of 4 years. • Both administrative and hourly labour is readily available. • The plant is non-unionised. • Ratio female/male is 1:1 • Wage rates compared to local/regional: mid-market • LTAR rate is 0 • In December of each year the Mexican Labour Board reviews and adjusts workers minimum wages. As these increases take affect they are passed on to customers beginning with sales in January. • Javelin does not provide any healthcare or pensions benefits for direct labour employees.

21. Focus on Training • High Skilled Operator Technicians • Autonomous Maintenance • Improved Quality! Quality Ownership by Operators Participation on Continuous Improvement Teams On-line training programs 2 week on-boarding program Full time training resources Assess and interview for required skills and competencies

22. Lean Organization • A Global Approach: a coordinated Lean Team • KPIs: definition & validation • KPIs: benchmark • Best practices: sharing, validation & implementation follow up • A Lean Coordinator per site • Support in the plant • Tools deployment & training • Best practices identification & implementation • Reporting of KPIs • Six Sigma • 3 Green Belts on site (Certification Pending) • Black Belt on site (Certification Pending) In 2011, Juarez won the “Silver Award”

23. Trust Quarterly communication meetings Share KPIs and challenges with employees Continuous Improvement Employee participation in monthly safety meetings Employee Suggestion Program 70% employees received Lean training Teamwork Cross-functional teams involved in training processes, OEE deployment, new project launch Leadership team cascades strategic plan Engagement of Core Values Recognition • Healthcare News Posting • Communication Meetings • Lean Workshop Teams