EXHIBIT 10.1

SECOND AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

THIS SECOND AMENDMENT to Loan and Security Agreement (this “Amendment”) is
entered into on October 31, 2006, by and between
 
SILICON VALLEY BANK (“Bank”)
 
and the following (collectively, jointly and severally, the "Borrower") whose
address is 20200 Sunburst Street, Chatsworth, California 91311:
 
NORTH AMERICAN SCIENTIFIC, INC., a Delaware corporation (“NASI”);
 
NORTH AMERICAN SCIENTIFIC, INC., a California corporation (“NASI-CA”); and
 
NOMOS CORPORATION, a Delaware corporation (“NOMOS”).
 
.
 
Recitals
 
A. Bank and Borrower have entered into that certain Loan and Security Agreement,
with an Effective Date of October 5, 2005 (as the same has been, and may
hereafter from time to time be amended, modified, supplemented or restated, the
“Loan Agreement”). The Loan Agreement was amended by that certain First
Amendment to Loan and Security Agreement dated January 12, 2006 (the “First
Amendment”).
 
B. Bank has extended credit to Borrower for the purposes permitted in the Loan
Agreement.
 
C. The parties desire to amend the Loan Agreement as herein set forth.
 
Agreement
 
Now, Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
 
1.  Definitions. Capitalized terms used but not defined in this Amendment shall
have the meanings given to them in the Loan Agreement.
 
2.  Amendments to Loan Agreement. The Loan Agreement is hereby amended as
follows, effective on October 31, 2006:
 
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2.1  Amended and Restated Schedule 2. Schedule 2 to the Loan Agreement is
amended and restated to read as set forth in the Amended and Restated Schedule 2
to Loan and Security Agreement, which is being signed by Borrower and Bank
concurrently herewith.
 
2.2  Certain Definitions. The following definitions are added to Section 13.1 of
the Loan Agreement, in alphabetical order:
 
“‘Quick Ratio Test’. As used herein, the ‘Quick Ratio Test’ will be deemed to be
met if Borrower’s Adjusted Quick Ratio at the end of August, 2006 and at the end
of each subsequent month is at least 1.00 to 1.00. If at the end of any such
subsequent month Borrower’s Adjusted Quick Ratio is not at least 1.00 to 1.00,
then Borrower shall not thereafter be deemed to meet the Quick Ratio Test,
unless Borrower’s Adjusted Quick Ratio is at least 1.00 to 1.00 for a subsequent
continuous period, continuous to the date of determination, and such continuous
period is at least three calendar months. As used herein, “Adjusted Quick Ratio”
means the ratio of (i) Borrower’s unrestricted cash plus Borrower’s net Accounts
to (ii) the total of Borrower’s current liabilities (including all of the
Obligations to Bank).”
 
“ ‘Reduced Borrowing Test’. As used herein, the ‘Reduced Borrowing Test’ will be
deemed to be met on a day if, on such day, the total of (i) the outstanding
Advances, plus the outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit), plus the FX Reserve, plus the outstanding
Obligations relating to Cash Management Services, is less than (ii) 50% of the
Borrowing Base (without regard to the Revolving Line Credit Amount).”
 
2.3  Audits. Section 6.2(d) of the Loan Agreement, which presently reads as
follows
 

 
“(d)   Allow Bank to audit Borrower's Collateral at Borrower's expense, with the
first of such audits to be completed, with results satisfactory to Bank prior to
the making of any Advances hereunder (it being understood that Bank has
heretofore conducted an audit of Borrower’s Collateral). After the initial
audit, such audits will be conducted no more often than every 6 months, unless
an Event of Default or Default has occurred and is continuing and in such event
there shall be no limitation as to the frequency of audit conducted. Further,
upon the effectiveness of the Asset Based Terms, an audit shall be conducted
within 90 days of the effectiveness thereof and subsequent audits shall be
conducted on a quarterly basis or at such other frequency as the conditions
warrant as Bank shall determine in its good faith business judgment (unless
there are no Credit Extensions outstanding and Borrower has not requested that
Bank extend any Credit Extensions hereunder and in such case audits shall be
conducted not more frequently than quarterly, or as Bank shall reasonably
determine as conditions warrant). In connection with Bank’s field audits,
Borrower shall pay to Bank the sum of $750 per day during such audit, plus
Bank’s reasonable out of pocket expenses incurred in connection therewith.”
 

 
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is amended to read as follows:
 

 
“(d)   Allow Bank to audit Borrower's Collateral at Borrower's expense. Such
audits will be conducted no more often than every 6 months, provided that (i) if
the Quick Ratio Test is not met, such audits will be conducted no more often
than every 3 months, and (ii) if an Event of Default or Default has occurred and
is continuing there shall be no limitation as to the frequency of audit
conducted. In connection with Bank’s field audits, Borrower shall pay to Bank
the sum of $750 per day during such audit, plus Bank’s reasonable out of pocket
expenses incurred in connection therewith.”
 

 
2.4  Collection of Accounts. The portion of Section 2 of Exhibit E to the Loan
Agreement, which presently reads as follows:
 

 
“(2)   Collection of Accounts. Borrower shall hold all payments on, and proceeds
of, Accounts and all other Collateral in trust for Bank, and Borrower shall
immediately deliver all such payments and proceeds to Bank in their original
form, duly endorsed, to be applied to the Obligations in such order as Bank
shall determine. Borrower agrees that it will not commingle such payments and
proceeds with any of Borrower's other funds or property, but will hold such
payments and proceeds separate and apart from such other funds and property and
in an express trust for Bank. Bank may, in its discretion, require that all
proceeds of Collateral be deposited by Borrower into a lockbox account, or such
other "blocked account" as Bank may specify, pursuant to a blocked account
agreement in such form as Bank may specify.”
 

 
is amended to read as follows:
 

 
“(2)   Collection of Accounts. Borrower shall direct all Account Debtors to make
payment of all Accounts directly to a lockbox established with Bank (the
‘Lockbox’). Borrower shall hold all payments on, and proceeds of, Accounts and
all other Collateral in trust for Bank, and Borrower shall immediately deposit
all such payments and proceeds in the Lockbox. All sums received in the Lockbox
shall be transferred by Bank to Borrower’s operating account at Bank, provided
that if, at any time, the Quick Ratio Test is not met and the Reduced Borrowing
Test is not met, then all sums received in the Lockbox shall be applied by Bank
to the Obligations in such order as Bank shall determine, and any excess shall
be transferred by Bank to Borrower’s operating account at Bank.”
 

 
2.5  “Float”. The portion of Section 3 of Exhibit E to the Loan Agreement, which
presently reads as follows
 

 
“(3)   Interest Computation. In computing interest on the Obligations, all
checks, wire transfers and other items of payment received by Bank (including
proceeds of Accounts shall be deemed applied by Bank on account of the
Obligations two Business Days after receipt by Bank of immediately available
funds, and, for purposes of the foregoing, any such funds received after 12:00
Noon (Pacific Time) on any day shall be deemed received on the next Business
Day.”
 

 
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is amended to read as follows:
 

 
“(3)   Interest Computation. In computing interest on the Obligations, all
checks, wire transfers and other items of payment received by Bank (including
proceeds of Accounts) shall be deemed applied by Bank on account of the
Obligations on receipt by Bank of immediately available funds, and, for purposes
of the foregoing, any such funds received after 12:00 Noon (Pacific Time) on any
day shall be deemed received on the next Business Day, provided that if, at any
time, the Quick Ratio Test is not met, and the Reduced Borrowing Test is not
met, then in computing interest on the Obligations, all checks, wire transfers
and other items of payment received by Bank (including proceeds of Accounts)
shall be deemed applied by Bank on account of the Obligations two Business Days
after receipt by Bank of immediately available funds, and, for purposes of the
foregoing, any such funds received after 12:00 Noon (Pacific Time) on any day
shall be deemed received on the next Business Day.
 

 
2.6  Other Reporting Requirements. The following is hereby added to Exhibit E to
the Loan Agreement at the end of Section (7) thereof, following subparagraph 8:
 
“9. Annual financial projections for each fiscal year, approved by Borrower’s
Board of Directors (including income statement, balance sheet and cash flow) no
later than 30 days after the beginning of such fiscal year and interim updates
thereto as requested by Bank.
 

 
10.   If, at the time, the Quick Ratio Test is met or the Reduced Borrowing Test
is met, a Transaction Report within 30 days after the end of each month.
 

 
2.7  Transaction Reports. The following is hereby added at the end of Exhibit E
to the Loan Agreement:
 
“(8) Transaction Reports. Notwithstanding the foregoing, Transaction Reports
will not be required weekly, if, at the time, the Quick Ratio Test is met or the
Reduced Borrowing Test is met. Even if weekly Transaction Reports are not
required, a Transaction Report will be required at the time of a request for an
Advance.”
 
2.8  Exhibit E Continues Effective. As provided in the First Amendment, Exhibit
E to the Loan Agreement (as modified by this Amendment) continues to be
effective and operative.
 
2.9  Exhibit D. Exhibit D to the Loan Agreement, the form of Compliance
Certificate, is hereby replaced by Exhibit D hereto.
 
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2.10  Subsidiary. The portion of the definition of “Permitted Investments” in
Section 13.1 of the Loan Agreement, which presently reads: “Theseus Imaging
Corporation, a current domestic subsidiary of NASI which Borrower represents to
Bank will be dissolved no later than October 31, 2006,” is amended to read:
 
“Theseus Imaging Corporation, a current domestic subsidiary of NASI which
Borrower represents to Bank will be dissolved no later than July 31, 2007,”
 

3.  Limitation of Amendments.
 
3.1  The amendments set forth in Section 2, above, are effective for the
purposes set forth herein and shall be limited precisely as written and shall
not be deemed to (a) be a consent to any amendment, waiver or modification of
any other term or condition of any Loan Document, or (b) otherwise prejudice any
right or remedy which Bank may now have or may have in the future under or in
connection with any Loan Document.
 
3.2  This Amendment shall be construed in connection with and as part of the
Loan Documents and all terms, conditions, representations, warranties, covenants
and agreements set forth in the Loan Documents, except as herein amended, are
hereby ratified and confirmed and shall remain in full force and effect.
 
4.  Representations and Warranties. To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:
 
4.1  Immediately after giving effect to this Amendment (a) the representations
and warranties contained in the Loan Documents are true, accurate and complete
in all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;
 
4.2  Borrower has the corporate power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Agreement, as amended by
this Amendment;
 
4.3  The organizational documents of Borrower delivered to Bank on the Effective
Date remain accurate and complete and have not been amended, supplemented or
restated since the Effective Date and are, and continue to be, in full force and
effect;
 
4.4  The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment, have been duly authorized;
 
4.5  The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment, do not and will not contravene (a) any law or regulation
binding on or affecting Borrower, (b) any material agreement by which Borrower
or its property is bound, (c) any order, judgment or decree of any court or
other governmental or public body or authority, or subdivision thereof, binding
on Borrower, or (d) the organizational documents of Borrower;
 
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4.6  The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment, do not require any order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by any governmental or public body or authority, or subdivision
thereof, binding on either Borrower, except as already has been obtained or
made; and
 
4.7  This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of
general application and equitable principles relating to or affecting creditors’
rights.
 
4.8  The written report as to the status of certain litigation, which was
provided by Borrower to Bank in connection with this Amendment, shall be deemed
part of the Perfection Certificate dated September 25, 2006 provided by Borrower
to Bank.
 
5.  Counterparts. This Amendment may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
 
6.  Effectiveness. This Amendment shall be deemed effective upon the due
execution and delivery of this Amendment by each party hereto.
 
 
[Signature page follows.]
 
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In Witness Whereof, the parties hereto have caused this First Amendment to be
duly executed and delivered as of the date first written above.

“Borrower”:
 
NORTH AMERICAN SCIENTIFIC, INC.
A Delaware corporation
 
 
By       /s/L.Michael Cutrer             
President or Vice President
 
 
“Bank”:
 
SILICON VALLEY BANK
 
 
 
By       /s/Kurt Miklinski                       
Title     Vice President                         
“Borrower”:
 
NORTH AMERICAN SCIENTIFIC, INC.
A California corporation
 
 
By  /s/L.Michael Cutrer     
President or Vice President
 
 
“Borrower”:
 
NOMOS CORPORATION
 
 
By       /s/L.Michael Cutrer              
President or Vice President
 

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EXHIBIT D
COMPLIANCE CERTIFICATE

TO:
SILICON VALLEY BANK

38 Technology Drive, Suite 150
Irvine, CA 92618

FROM:
North American Scientific, Inc., a Delaware corporation

North American Scientific, Inc., a California corporation; and
NOMOS Corporation, a Delaware corporation

The undersigned authorized officers of each of North American Scientific, Inc.,
a Delaware corporation, North American Scientific, Inc., a California
corporation, and NOMOS Corporation (collectively “Borrower”) certifies that
under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for
the period ending _______________ with all required covenants except as noted
below and (ii) all representations and warranties in the Agreement are true and
correct in all material respects on this date, provided that any representations
and warranties expressly referring to another date are true and correct in all
material respects as of such other date. In addition, the undersigned certifies
that (1) Borrower has timely filed all required tax returns and paid, or made
adequate provision to pay, all material taxes, except those being contested in
good faith with adequate reserves under GAAP and (2) no liens have been levied
or claims made against Borrower relating to unpaid employee payroll or benefits
which Borrower has not previously notified in writing to Bank. Attached are the
required documents supporting the certification. The Officer certifies that
these are prepared in accordance with Generally Accepted Accounting Principles
(GAAP) consistently applied from one period to the next except as explained in
an accompanying letter or footnotes. The Officer acknowledges that no borrowings
may be requested at any time or date of determination that Borrower is not in
compliance with any of the terms of the Agreement, and that compliance is
determined not just at the date this certificate is delivered.

Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenant
 
Required
 
Complies
Monthly financial statements + CC
 
Monthly within 30 days
 
Yes
No N/A
Quarterly Reports on Form 10-Q
 
Within 5 days of filing to the SEC
 
Yes
No N/A
Annual Report on Form 10-K (Audited)
 
FYE within 5 days of filing with the SEC
 
Yes
No N/A
A/R & A/P Agings
 
Monthly w/in 15 days
 
Yes
No N/A
Weekly transactions reports and schedules of collections (when required under
Loan Agreement)
 
Weekly
 
Yes
No N/A
Monthly reconciliations of A/R agings, Transaction Reports and general ledger
 
Monthly within 30 days
 
Yes
No N/A              
Financial Covenant
 
Required
Actual
Complies
             
Maintain at all times and measured on a monthly basis: Minimum Tangible Net
Worth
 
$5,000,000
$______________
 
Yes 
No N/A

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Borrower only has deposit accounts located at the following institutions:
___________________. 

Has Borrower filed any new Trademark, Patent or Copyright applications? Yes / No
(If “yes”, please list below and complete the attached Addendum to Intellectual
Property Security Agreement)

Trademarks: ___________________________________________________

Patents: _______________________________________________________

Copyrights: ______________________________________________________

Comments Regarding Exceptions: See Attached.

 

   
 BANK USE ONLY
North American Scientific, Inc.   Received
by:                                                          A Delaware
corporation  
AUTHORIZED SIGNER
      By:       
Date:                                                                     
Authorized Signer
             
Verified:                                                                North
American Scientific, Inc.  
AUTHORIZED SIGNER
 A California corporation        
Date:                                                                           
By:         Compliance Status:    Yes          No
Authorized Signer
   

 
 
 
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NOMOS Corporation
A Delaware corporation

By:     
Authorized Signer
 
 
                                                            
Date

CH1 11133629.1

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  Amended and Restated Schedule 2
  to
  Loan and Security Agreement
   
Borrower:
 North American Scientific, Inc., a Delaware Corporation
 
 North American Scientific, Inc., a California Corporation
 
 NOMOS Corporation, a Delaware corporation
   
Date:
 October 31, 2006

This Amended and Restated Schedule 2 amends and restates in its entirety the
Amended and Restated Schedule 2 dated January 12, 2006 to the Loan and Security
Agreement dated October 5, 2005 (as amended, the “Loan Agreement”) between
Silicon Valley Bank (“Bank”) and the above-borrowers (collectively, jointly and
severally, the “Borrower”), and forms an integral part of the same. (Capitalized
terms used herein, which are not defined, shall have the meanings set forth in
the Loan Agreement.)

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1
.
CREDIT LIMIT
         
(Section 2.1.1):
 An amount not to exceed:
     
 (a)
 the lesser of (1) $4,000,000 at any one time outstanding
       
 (the “Revolving Line Credit Amount”) or (2) the sum
       
 of the following (the “Borrowing Base”):
                 
 (i)
 up to 80% (an “Advance Rate”) of the amount
         
 of NASI Eligible Accounts, plus
       
 (ii)
 up to 80% (an “Advance Rate”) of the amount
         
 of NASI-CA Eligible Accounts, plus
       
 (iii)
 up to 75% (an “Advance Rate”) of the amount
         
 of NOMOS Eligible Accounts;
               
minus
         
(b)
 the sum of the following:
       
 (i)
 the amount of all outstanding Letters of Credit
         
 (including drawn but unreimbursed Letters of
         
 Credit); plus
       
 (ii)
 the FX Reserve; and plus
       
 (iii)
 the aggregate amount of Cash Management
         
 Services utilizations.
     
 provided, however, that Bank shall have the right, in Bank’s
     
 discretion, to modify the above Advance Rates based upon the
     
 results of field audits conducted by Bank.

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Letter of Credit Sublimit
     
(Section 2.1.2):
$500,000.
   
Foreign Exchange Sublimit
     
(Section 2.1.3):
$500,000.
   
Cash Management Services Sublimit:
     
(Section 2.1.4):
$500,000.
               
2
.
INTEREST.
     
   Interest Rate
     
   (Section 2.3(a)):
 A per annum rate equal to the “Prime Rate” in effect from time        to time;
provided that if the Quick Ratio Test is not met, the        interest rate
applicable to the Obligations shall be a per annum        rate equal to the
“Prime Rate” in effect from time to time, plus        1.50% per annum. Changes
in the interest rate based on        whether or not the Quick Ratio Test is met
shall go into effect        as of the first day of the month closest to the date
Borrower’s        financial statements, which show whether or not the Quick    
   Ratio Test is met, are due, even if the delivery of the financial      
 statements is delayed.

3
.
FEES (Section 2.4(a)):
             
   Facility Fee:
$20,000 payable on the date hereof. If at any date the Quick
     
Ratio Test is not met, Borrower shall pay Bank an additional
     
Facility Fee of $20,000 on the date Bank receives financial
     
statements showing the Quick Ratio Test was not met.
           
   Collateral Handling Fee:
None, provided that if the Quick Ratio Test is not met,
     
Borrower shall pay Bank a collateral handling fee in an amount
     
equal to $2,000 per month, payable in arrears on the first day
     
of each month with respect to the prior month. Changes in
     
whether or not the collateral handling fee is charged, based on
     
whether or not the Quick Ratio Test is met shall go into effect
     
as of the first day of the month closest to the date Borrower’s
     
financial statements, which show whether or not the Quick
     
Ratio Test is met, are due, even if the delivery of the financial
     
statements is delayed.
           
 Unused Line Fee:
None, provided that if the Quick Ratio Test is not met,
     
Borrower shall pay to Bank an unused line fee equal to the rate
     
of one-half of one percentage point (.50%) per annum
               

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 multiplied by the amount by which the Revolving Line Credit
 
 Amount exceeds the average daily principal balance of the
 
 outstanding aggregate amount of the sum, without duplication,
 
 of Advances, Letters of Credit, FX Reserve and Cash
 
 Management Services utilizations during the immediately
 
 preceding calendar month (or part thereof), which fee shall be
 
 payable monthly in arrears on the first day of each month.
 
 Changes in whether or not the unusued line fee is charged,
 
 based on whether or not the Quick Ratio Test is met shall go
 
 into effect as of the first day of the month closest to the date
 
 Borrower’s financial statements, which show whether or not
 
 the Quick Ratio Test is met, are due, even if the delivery of the
 
 financial statements is delayed.
   
    Termination Fee:
 The "Termination Fee" that is payable as set forth in Section
 
 2.1.1(d) shall be equal to one percent (1%) of the Revolving
 
 Line Credit Amount in effect from time to time, providedthat
 
 no termination fee shall be charged if the credit facility
 
 hereunder is replaced with a new facility from another division
 
 of Bank.

    None of the fees provided for in this Agreement are refundable.
 

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4
.
MATURITY
         
DATE
         
(Section 13.1):
 
October 3, 2007.
             
5
.
FINANCIAL COVENANTS
         
    (Section 6.7):
 
Borrower shall comply with the following financial covenant
         
at all times during the term of this Agreement, measured at the
         
end of each month, and, Borrower shall provide evidence of
         
compliance therewith to Bank monthly and otherwise at the
         
request of Bank from time to time.
     
    Minimum Tangible
         
    Net Worth:
 
Borrower shall maintain a Tangible Net Worth of not less than
       
 
$5,000,000
.
       
“Tangible Net Worth” shall mean the excess of total assets less
         
total liabilities, determined in accordance with GAAP, with the
         
following adjustments:
                     
    (A) there shall be excluded from assets: (i) notes,
         
    accounts receivable and other obligations owing to
         
    Borrower from its officers or other Affiliates, and (ii) all
         
    assets which would be classified as intangible assets under
         
    GAAP, including without limitation goodwill, licenses,
         
    patents, trademarks, trade names, copyrights, capitalized software 
         
    and organizational costs, licenses and franchises, and (iii) minority
         
            investments in other Persons.  
 
 
 
 
 
    (B) there shall be excluded from liabilities: all indebtedness which is  
         
    subordinated to the Obligations under a subordination agreement in form
         
    specified by Bank or by language in the instrument evidencing the
indebtedness
         
    which Bank agrees in writing is acceptable to Bank in its good faith
business judgment.
             

 
Signatures on Next Page
 
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     IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Schedule 2 to Loan and Security Agreement as of the date first above written.

“Borrower”:
 “Bank”:
   
 NORTH AMERICAN SCIENTIFIC, INC.
 SILICON VALLEY BANK
 A Delaware corporation
     
 By /s/L.Michael Cutrer
 By /s/Kurt Miklinski
       President or Vice President
 Title Vice President

NORTH AMERICAN SCIENTIFIC, INC.
A California corporation
 
By/s/L.Michael Cutrer
President or Vice President
 
NOMOS CORPORATION
 
By  /s/L.Michael Cutrer
President or Vice President
 
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