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EXHIBIT 10.34.1
AMENDMENT TO THE FACILITY SET-UP AND CONTRACT MANUFACTURING
AGREEMENT AND THE LICENSE AGREEMENT
between
RMS Medical Systems Inc.
hereafter "RMS"
located at 13700 Alton Parkway, Suite 160,
in Irvine, California, 92618, USA
and
BEBIG Isotopentechnik und Umweltdiagnostik GmbH,
hereafter "BEBIG"
located at Robert-Rossle-Str.10,
in D-13125 Berlin, Germany
BACKGROUND
RMS and BEBIG have signed a FACILITY SET-UP AND CONTRACT MANUFACTURING AGREEMENT
including the ADDENDUM TO FACILITY SET-UP AND CONTRACT MANUFACTURING AGREEMENT
AND A LICENSE AGREEMENT to cooperate in the production of radioactive balloon
catheters in July 28, 1999.
In the mean time the originally designed manufacturing process and its
production capacity, being the basis for the above mentioned agreements, has
changed. Additional research and development work has been and will be necessary
as well, that has not been provided for in the above mentioned agreements.
In light of the above, both parties desire to amend the existing FACILITY SET-UP
AND CONTRACT MANUFACTURING AGREEMENT including the ADDENDUM TO FACILITY SET-UP
AND CONTRACT MANUFACTURING AGREEMENT and the LICENSE AGREEMENT.
1. NEW RESOURCE REQUIREMENTS FOR HIGH PRODUCTION CAPACITY PROCESS.
BEBIG will use its best efforts to install a new high production capacity
line with a maximum of 200 activity carriers per week at its Berlin
facility in accordance with the tasks and timetable set forth in Schedule A
and Appendix 1 to this amendment. Such activity will require NEW RESOURCE
REQUIREMENTS consisting of the items "Additional Equipment", "Development
Component", and "Validation". A further breakdown of these items is shown
in Appendix 1 of this amendment.
Both parties agree that for the new resource requirements RMS will
compensate BEBIG or its affiliates per Schedule A with an investment
contribution of US $ 686,000 excluding taxes if any.
Schedule A of this amendment shows payments that are still due to BEBIG by
RMS for the completion of this project. These include original payments
from the FACILITY SET-UP AND CONTRACT MANUFACTURING AGREEMENT, the payments
for the NEW
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RESOURCE REQUIREMENTS, and the payment for the LOW CAPACITY PRODUCTION
PROCESS. This shall not be interpreted as a waiver for any other costs and
payments the parties agreed to in the above mentioned agreements including
but not limited to payments that have already been transferred from RMS to
BEBIG, rent of laboratory space, license fees, royalties, etc.
2. LOW CAPACITY PRODUCTION PROCESS
In order to be able to commence production already in the last quarter of
the year 2000 BEBIG will use its best efforts to establish a low capacity
production line with a maximum capacity of 20 activity carriers per week in
parallel to the high volume capacity production at BEBIG in accordance with
the tasks and timetable set forth in Schedule A and Appendix 1 to this
amendment.
Both parties agree that for these additional costs RMS will compensate
BEBIG or its affiliates per Schedule A with an investment contribution of
US $ 36,000 excluding taxes if any.
3. ADDITIONAL RESEARCH AND DEVELOPMENT WORK.
For the technique of radiolabeling with radioactive P-32, additional R&D
work was necessary. For this R&D work RMS has compensated BEBIG's
affiliate, IPL, with US $98,000. The parties acknowledge that the scope of
this work was completed under the joint collaboration of BEBIG's California
affiliate, IPL and RMS and funded exclusively by RMS. Therefore, the
parties agree that any inventions, improvements, discoveries or other
intellectual property developed by BEBIG or its affiliates in the course of
such work shall be jointly owned. Both parties are unencumbered in the use
and rights of this technology. Furthermore, BEBIG and/or its affiliates
will assist RMS in its filing for the patent rights of the technology. The
patent shall include the appropriate inventors from RMS and BEBIG in
accordance with applicable patent law and designate RMS and BEBIG as
assignees.
4. COMPENSATIONS.
(a) RMS will compensate BEBIG for the FACILITY SET-UP AND CONTRACT
MANUFACTURING AGREEMENT, the NEW RESOURCE REQUIREMENTS, and the LOW
CAPACITY PRODUCTION PROCESS per Schedule A.
5. LICENSE FEE OFFSETS.
Both parties agree, that the US$ 686,000, US$ 36,000, and US$ 98,000 in
sections 1, 2, and 3 in this amendment are not subject to offsetting of the
license fee or royalties as provided by the LICENSE AGREEMENT, Section 4.
2
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6. MAINTENANCE COST OF EQUIPMENT.
Both parties agree, that RMS covers all maintenance cost of the equipment
delivered by RMS during the rental term. Maintenance cost on the before
mentioned equipment is billed back to RMS at cost.
Except as specifically modified by this amendment, all terms and conditions
of the FACILITY SET-UP AND CONTRACT MANUFACTURING AGREEMENT and the LICENSE
AGREEMENT shall continue unchanged.
Date: Date:
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BEBIG GmbH RMS
3
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Schedule A
<TABLE>
<CAPTION>
<S> <C> <C>
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Milestone Target Date for Completion Amount in US$
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Upon Execution for Delivery of 585,000
Components from Radiance
Upon Execution For Additional 147,000
Resources per the Amendment
Completion of Low Volume P(32) September 11, 2000 30,000
Labeling Cell
Completion of Assembly Platform September 15, 2000 205,000
Containment Cells
Upon Operational Readiness Following
Completion of Hot Product Validations
at Low Volumes November 27, 2000 190,000
Upon Delivery of the First RDX
Catheter Meeting Radiance's
Specifications November 27, 2000 90,000
Upon Operational Readiness Following
Completion of Hot Product Validations
at High Volumes First Quarter 2001 150,000
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</TABLE>
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Appendix I: Detailed Breakdown of Cost
ADDITIONAL EQUIPMENT (US $ 255,000). These cost cover necessary additional
equipment. In detail:
<TABLE>
<CAPTION>
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<S> <C>
Box 0: procedure and equipment for waste reduction, storage US $ 55,000
and handling
Box 3: storage of foils (to be assembled within week) US $ 50,000
Two additional assembly platforms: Leak-tight boxes, airlocks US $ 70,000
with pneumatic gates, filters, gloves, maintenance covers with
gloves (rear side, control for gates, improved feeding of
capsulate, filters, particle monitoring)
Additional personnel cost US $ 80,000
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Development Component Total US $ 255,000
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</TABLE>
DEVELOPMENT COMPONENT (US $ 191,000). These cost cover the change of capacity
from 40 to 200 activity carriers per week. In detail:
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Box 0 Waste storage and handling
Doubling the capacity of box 2
Separate containment for acetone handling
Setting up measurement equipment to measure the active foils
Setting up measurement equipment to measure the geometric
activity distribution and its homogeneity
Introduction of a 4th assembly platform
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Development Component Total US $ 191,000
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VALIDATION (US $ 240,000). These cost cover the validation of the chemical and
the manufacturing process as well as the validation/overhead costs. In detail:
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Validation of the chemical process
Further optimization and reproducibility of high yield
Waste reduction
Stability of the labeling process
Reproducibility of the homogenous dose distribution of the
activity carrier
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Subtotal US $ 90,000
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Validation of the manufacturing process
Manufacturing test catheters for validation
Manufacturing under a higher degree of automation at the higher
capacity of 200 catheters per week
Clean room environment, bio-burden control, monitoring
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Subtotal US $ 90,000
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Validation/overhead costs
Procurement of raw materials
Procurement of packaging
Sterilization
Logistics for delivery of raw material to BEBIG and
distribution of catheters to users
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Subtotal US $ 60,000
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Validation Total US $240,000
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