EXHIBIT 10.25


 


FIRST AMENDMENT


 


TO


 


LOAN AND SECURITY AGREEMENT


 


THIS FIRST AMENDMENT to Loan and Security
Agreement
(this “Amendment”) is entered into on January 12,
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 may from time to time be further
amended, modified, supplemented or restated, the “Loan Agreement”).


 


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.


 


2.1                               Amended
and Restated Schedule 2.  Schedule 2 to the Loan Agreement is
amended and restated to read as set forth in Schedule 2 hereto, which is
being signed by Borrower and Bank concurrently herewith.


 


2.2                               Asset
Based Terms Effective.


 


(a)                                  The Asset Based
Terms (as defined in the Loan Agreement) shall be fully effective on the date
hereof and shall continue in full force and effect at all times hereafter,


 





















 


notwithstanding anything in the Loan
Agreement to the contrary.  Without
limiting the generality of the foregoing, all provisions in the Loan Agreement
which state that they are effective “while the Asset Based Terms are in effect”
or words of similar effect shall be fully effective on the date hereof and
shall continue in full force and effect at all times hereafter.


 


(b)                                  Without
limiting Section 2.2(a) above, Section 9.8 of the Loan Agreement
is amended in its entirety to read as follows:


 


“9.8.                        Asset Based
Terms. The provisions of Exhibit E hereto (the “Asset Based Terms”) and
the applicable Asset Based Terms as otherwise set forth herein, are fully
effective on the date hereof and shall continue in full force and effect
hereafter.


 


2.3                               Other
Defaults. Without limiting Section 2.2(a) above, Section 8.3,
which presently reads as follows:


 


“8.3.                        Other Defaults.  If Borrower fails to perform or comply with
any other term, condition or covenant in this Agreement (other than as set
forth in Section 8.1 or 8.2 above or, while the Asset Based Terms are not
in effect, the Financial Covenants set forth in Schedule 2 hereto), and
such failure is not cured within 30 days after the date it occurs.”


 


is amended to read as follows:


 


“8.3.                        Financial
Covenant Default.  If Borrower
fails to comply with the Financial Covenants set forth in Schedule 2
hereto.


 


“8.3A.              Officers.  The persons presently serving in the
capacities of Chief Executive Officer or Chief Financial Officer shall cease
serving in such capacities for any reason, and shall not be replaced with a
person satisfactory to Bank in its good faith business judgment within 60 days
thereafter.


 


 “8.3B.             Other Defaults.  If Borrower fails to perform or comply with
any other term, condition or covenant in this Agreement (other than as set
forth in Section 8.1, 8.2,8.3, or 8.3A above), and such failure is not
cured within five days after the date it occurs.”


 


2.4                               Definitions.  The definition of “Permitted Liens” in Section 13.1
of the Loan Agreement is amended by (i) deleting the period at the end of
clause (g) thereof and inserting in its place “; and” and (ii) adding
a new clause (h) which shall read as follows:  “(h) Liens in favor of any holder of
Subordinated Debt which are subordinated to the Liens in favor of Bank arising
under this Agreement pursuant to a written subordination agreement between Bank
and the holder of Subordinated Debt, on Bank’s standard form and otherwise
acceptable to Bank in its good faith business judgment.


 


2.5                               Exhibits.


 


(a)                                  Exhibit C
to the Loan Agreement, the form of Borrowing Base Certificate, and all
references thereto are hereby deleted from the Loan Agreement.  In lieu of a Borrowing Base Certificate, the
Borrower shall provide Transactions Reports as provided in the Loan Agreement,
on a weekly basis and at each date an Advance is requested.


 





















 


(b)                                  Exhibit D
to the Loan Agreement, the form of Compliance Certificate, is hereby replaced
by Exhibit D hereto.


 


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;


 


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.


 


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
(a) the due execution and delivery of this Amendment by each party hereto,
and (b) Borrower’s payment of the fees set forth in the Amended and
Restated Schedule 2 hereto.


 


 [Signature page follows.]


 





















 


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”:

  	
  “Bank”:

  
	
   

  	
   

  
	
   

  	
   

  
	
  NORTH
  AMERICAN SCIENTIFIC,

  INC.

  A Delaware corporation

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/BOB MULLER

  	
   

  
	
  By

  	
  /s/L. MICHAEL CUTRER

  	
   

  	
  Title

  	
  Senior Relationship Manager

  	
   

  
	
   

  	
  President or 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

  	
   

  	
   

  
							



 





















 


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:

  	
   

  	
  January 12, 2006

  



 


This Amended and Restated Schedule 2 amends and restates in its
entirety Schedule 2 to the Loan and Security Agreement (as amended, the “Loan
Agreement”) between Silicon Valley Bank (“Bank”) and the above-borrowers
(collectively, jointly and severally, the “Borrower”) dated October 5,
2005, 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.)


 


	
  1.   CREDIT LIMIT

  	
   

  
	
  (Section 2.1.1):

  	
  An amount not to exceed:

  
	
   

  	
   

  
	
   

  	
  (a)          the lesser of
  (1) $5,000,000 at any one time
  outstanding (the “Revolving Line Credit Amount”) or (2) the sum
  of the following:

  
	
   

  	
   

  
	
   

  	
  (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 65% (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.

  



 





















 


	
  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, plus 1.50% per annum.

  
	
   

  	
   

  
	
  3.   FEES
  (Section 2.4(a)):

  	
   

  
	
   

  	
   

  
	
  Facility Fee:

  	
  In addition to the fees previously paid,
  Borrower shall pay to Bank an additional facility fee of $25,000, plus a loan
  fee of $5,000, concurrently herewith.

  
	
   

  	
   

  
	
  Collateral Handling Fee:

  	
  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.

  
	
   

  	
   

  
	
  Unused Line Fee:

  	
  Borrower shall pay to Bank an unused line
  fee equal to the rate of one-half of one percentage point (.50%) per annum
  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, beginning on the first day of the
  month following the date hereof.

  
	
   

  	
   

  
	
  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,
  provided that no termination fee shall be charged if the credit
  facility hereunder is replaced with a new facility from another division of
  Silicon Valley Bank.

  
	
   

  	
   

  
	
   

  	
   

  
	
  4.    MATURITY DATE

  	
   

  
	
  (Section 13.1):

  	
  October 4, 2006.

  



 





















 


	
  5.  FINANCIAL COVENANTS

  	
   

  
	
  (Section 6.7):

  	
  Borrower shall comply with the following
  financial covenant at all times during the term of this Agreement, measured
  on a monthly basis, and, monthly and otherwise at the request of Bank from
  time to time, Borrower shall provide evidence of compliance therewith.

  
	
   

  	
   

  
	
  Minimum Tangible

  	
   

  
	
  Net Worth:

  	
  Borrower shall maintain a Tangible Net
  Worth of not less than $1,500,000 plus
  (i) 50% of Borrower’s net quarterly income, realized after
  October 31, 2005, plus
  (ii) 50% of all consideration received by Borrower for the issuance of
  equity securities after October 31, 2005.

  
	
   

  	
  Increases in the Minimum Tangible Net Worth Covenant based on
  consideration received for equity securities of Borrower shall be effective
  as of the end of the month in which such consideration is received, and shall
  continue effective thereafter. Increases in the Minimum Tangible Net Worth
  Covenant based on net income shall be effective on the last day of the fiscal
  quarter in which said net income is realized, and shall continue effective
  thereafter. In no event shall the
  Minimum Tangible Net Worth Covenant be decreased.

  
	
  “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.

  
	
   

  	
   

  
	
  6.  ADDITIONAL PROVISIONS

  	
   

  
	
   

  	
  (a)                                  Collections of
  Accounts.  As provided in the Loan
  Agreement, all collections of Accounts shall be remitted to the Bank.
  Promptly following receipt by Bank of such collections in immediately
  available funds, Bank shall apply the same to the Obligations 

  



 





















 


	
   

  	
  in such order as Bank shall determine, provided that Bank shall
  instead deposit the same into Borrower’s operating account at Bank, if
  (i) no Default or an Event of Default has occurred and is continuing,
  and (ii) Borrower has Advances available to it under the formulas and
  provisions of this Loan Agreement of at least $1,000,000, as confirmed by the
  latest Transaction Report received by the Bank.

  
	
   

  	
   

  
	
   

  	
  (b)                                 Warrant.  Borrower shall concurrently with the
  execution hereof issue to Bank a Warrant to Purchase Shares of Borrower’s
  Common Stock in the form being executed and delivered concurrently herewith.

  



 


Signatures on Next Page


 





















 


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/BOB MULLER

  	
   

  
	
   

  	
  President or Vice President

  	
   

  	
  Title

  	
  Senior Relationship Manager

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  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

  	
   

  	
   

  
							



 





















 


THIS WARRANT
AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND,
EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE
OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
EXEMPT FROM REGISTRATION.


 


WARRANT TO PURCHASE STOCK


 


Company: NORTH AMERICAN SCIENTIFIC, INC., a
Delaware corporation.


Number of Shares: As provided below.


Class of Stock: Common Stock.


Warrant Price: As provided below.


Issue Date:  January 12,
2006


Expiration Date:  January 12,
2011


 


THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, SILICON VALLEY BANK (“Holder”) is
entitled to purchase the number of fully paid and nonassessable shares of the
common stock, $0.01 par value per share (the “Shares”) of the company (the “Company”)
at the Warrant Price, all as set forth above and as adjusted pursuant to Article 2
of this Warrant, subject to the provisions and upon the terms and conditions
set forth in this Warrant.


 


ARTICLE A.                            NUMBER OF SHARES AND
PRICE.


 


A.1                             Number of Shares. 
The number of Shares subject to this Warrant shall be equal to $75,000
divided by the Warrant Price.


 


A.2.                          Warrant Price. 
The Warrant Price shall be an amount equal to the lowest of (i) $1.99
per Share; or (ii) the average closing price of the Shares on the five
trading days immediately preceding the Issue Date; or (iii) the lowest
closing price of the Shares during the ten trading days immediately following
the release of the Company’s 2005 earnings report (which release is presently
anticipated on or about January 9, 2006).


 


ARTICLE 1. EXERCISE.


 


1.1                                 Method of Exercise.  Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form
attached as Appendix 1 to the principal office of the Company.  Unless Holder is exercising the conversion
right set forth in Article 1.2, Holder shall also deliver to the Company a
check, wire transfer (to an account designated by the Company), or other form
of payment acceptable to the Company for the aggregate Warrant Price for the
Shares being purchased.


 





















 


1.2                                 Conversion Right.  In lieu of exercising this Warrant as
specified in Article 1.1, Holder may from time to time convert this
Warrant, in whole or in part, into a number of Shares determined by dividing (a) the
aggregate fair market value of the Shares or other securities otherwise
issuable upon exercise of this Warrant minus the aggregate Warrant Price of
such Shares by (b) the fair market value of one Share.  The fair market value of the Shares shall be
determined pursuant to Article 1.3.


 


1.3                                 Fair Market Value.  If the Company’s common stock is traded in a
public market and the Shares are common stock, the fair market value of each
Share shall be the closing price of a Share reported for the business day
immediately before Holder delivers its Notice of Exercise to the Company.
..  If the Company’s common stock is not
traded in a public market, the Board of Directors of the Company shall
determine fair market value in its reasonable good faith judgment.


 


1.4                                 Delivery of
Certificate and New Warrant. 
Promptly after Holder exercises or converts this Warrant and, if
applicable, the Company receives payment of the aggregate Warrant Price, the
Company shall deliver to Holder certificates for the Shares acquired and, if
this Warrant has not been fully exercised or converted and has not expired, a
new Warrant representing the Shares not so acquired.


 


1.5                                 Replacement of
Warrants.  On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company or, in the case of mutilation on surrender and cancellation of
this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.


 


1.6                                 Treatment of
Warrant Upon Acquisition of Company.


 


1.6.1                        “Acquisition”.  For the purpose of this Warrant, “Acquisition”
means any sale, license, or other disposition of all or substantially all of
the assets of the Company, or any reorganization, consolidation, or merger of
the Company where the holders of the Company’s securities before the
transaction beneficially own less than 50% of the outstanding voting securities
of the surviving entity after the transaction.


 


1.6.2                        Treatment of Warrant at
Acquisition.


 


A)                                  Upon
the written request of the Company, Holder agrees that, in the event of an
Acquisition that is not an asset sale and in which the sole consideration is
cash, either (a) Holder shall exercise its conversion or purchase right
under this Warrant and such exercise will be deemed effective immediately prior
to the consummation of such Acquisition or (b) if Holder elects not to
exercise the Warrant, this Warrant will expire upon the consummation of such
Acquisition.  The Company shall provide
the Holder with written notice of its request relating to the foregoing
(together with such reasonable information as the Holder may request in
connection with such contemplated Acquisition giving rise to such notice),
which is to be delivered to Holder not less than ten (10) days prior to
the closing of the proposed Acquisition.


 





















 


B)                                    Upon
the written request of the Company, Holder agrees that, in the event of an
Acquisition that is an “arms length” sale of all or substantially all of the
Company’s assets (and only its assets) to a third party that is not an
Affiliate (as defined below) of the Company (a “True Asset Sale”), either (a) Holder
shall exercise its conversion or purchase right under this Warrant and such
exercise will be deemed effective immediately prior to the consummation of such
Acquisition or (b) if Holder elects not to exercise the Warrant, this
Warrant will continue until the Expiration Date if the Company continues as a
going concern following the closing of any such True Asset Sale.  The Company shall provide the Holder with
written notice of its request relating to the foregoing (together with such
reasonable information as the Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to be delivered
to Holder not less than ten (10) days prior to the closing of the proposed
Acquisition.


 


C)                                    Upon
the closing of any Acquisition other than those particularly described in
subsections (A) and (B) above, the successor entity shall assume the
obligations of this Warrant, and this Warrant shall be exercisable for the same
securities, cash, and property as would be payable for the Shares issuable upon
exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing.  The Warrant Price and/or number of Shares
shall be adjusted accordingly.


 


As used herein “Affiliate” shall mean any person or entity that
owns or controls directly or indirectly ten (10) percent or more of the
stock of Company, any person or entity that controls or is controlled by or is
under common control with such persons or entities, and each of such person’s
or entity’s officers, directors, joint venturers or partners, as applicable.


 


ARTICLE 2. ADJUSTMENTS TO THE SHARES.


 


2.1                                 Stock Dividends, Splits,
Etc.  If the Company declares or pays
a dividend on the Shares payable in common stock, or other securities, then
upon exercise of this Warrant, for each Share acquired, Holder shall receive,
without cost to Holder, the total number and kind of securities to which Holder
would have been entitled had Holder owned the Shares of record as of the date
the dividend occurred.  If the Company
subdivides the Shares by reclassification or otherwise into a greater number of
shares or takes any other action which increase the amount of stock into which
the Shares are convertible, the number of shares purchasable hereunder shall be
proportionately increased and the Warrant Price shall be proportionately
decreased, but the aggregate purchase price payable for the total number of
shares purchasable under this Warrant (as adjusted) shall remain the same.  If the outstanding shares are combined or
consolidated, by reclassification or otherwise, into a lesser number of shares,
the Warrant Price shall be proportionately increased (but the aggregate
purchase price payable for the total number of Shares purchasable under this
Warrant, as adjusted, shall remain the same), and the number of Shares shall be
proportionately decreased.


 


2.2                                 Reclassification,
Exchange, Combinations or Substitution. 
Upon any reclassification, exchange, substitution, or other event that
results in a change of the number and/or class of the securities issuable upon
exercise or conversion of this


 





















 


Warrant, Holder shall be entitled to receive,
upon exercise or conversion of this Warrant, the number and kind of securities
and property that Holder would have received for the Shares if this Warrant had
been exercised immediately before such reclassification, exchange,
substitution, or other event. The Company or its successor shall promptly issue
to Holder an amendment to this Warrant setting forth the number and kind of
such new securities or other property issuable upon exercise or conversion of
this Warrant as a result of such reclassification, exchange, substitution or
other event that results in a change of the number and/or class of securities
issuable upon exercise or conversion of this Warrant.  The amendment to this Warrant shall provide
for adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article 2 including, without
limitation, adjustments to the Warrant Price (but not to the aggregate purchase
price payable for the total number of Shares purchasable under this Warrant (as
adjusted), which shall remain the same) and to the number of securities or
property issuable upon exercise of the new Warrant.  The provisions of this Article 2.2 shall
similarly apply to successive reclassifications, exchanges, substitutions, or
other events.


 


2.3                                 Adjustments
for Diluting Issuances.  The Warrant
Price and the number of Shares issuable upon exercise of this Warrant shall be
subject to adjustment, from time to time in the manner set forth in the Company’s
Certificate of Incorporation as if the Shares were issued and outstanding on
and as of the date of any such required adjustment.  The provisions set forth for the Shares in
the Company’s Certificate of Incorporation relating to the above in effect as
of the Issue Date may not be amended, modified or waived, without the prior
written consent of Holder unless such amendment, modification or waiver affects
the rights associated with the Shares in the same manner as such amendment,
modification or waiver affects the rights associated with all other shares of
the same series and class as the Shares granted to the Holder.


 


2.4                                 No Impairment.  The Company shall not, by amendment of its
Certificate of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions
of this Article 2 and in taking all such action as may be necessary or
appropriate to protect Holder’s rights under this Article against
impairment.


 


2.5                                 Fractional Shares.  No fractional Shares shall be issuable upon
exercise or conversion of this Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share.  If a fractional share interest arises upon
any exercise or conversion of the Warrant, the Company shall eliminate such
fractional share interest by paying Holder the amount computed by multiplying
the fractional interest by the fair market value of a full Share.


 


2.6                                 Certificate as to
Adjustments.  Upon each adjustment of
the Warrant Price, the Company shall promptly notify Holder in writing, and, at
the Company’s expense, promptly compute such adjustment, and furnish Holder
with a certificate of its Chief Financial Officer setting forth such adjustment
and the facts upon which such adjustment is based.  The Company shall, upon written request,
furnish


 





















 


Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.


 


ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.


 


3.1                                 Representations and
Warranties.  The Company represents
and warrants to the Holder as follows: All Shares which may be issued upon the
exercise of the purchase right represented by this Warrant, and all securities,
if any, issuable upon conversion of the Shares, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.


 


3.2                                 Notice
of Certain Events.  If the Company
proposes at any time (a) to declare any dividend or distribution upon any
of its stock, whether in cash, property, stock, or other securities and whether
or not a regular cash dividend; (b) to offer for sale any shares of the
Company’s capital stock (or other securities convertible into such capital
stock), other than (i) pursuant to the Company’s stock option or other
compensatory plans, (ii) in connection with commercial credit arrangements
or equipment financings, or (iii) in connection with strategic
transactions for purposes other than capital raising; (c) to effect any
reclassification or recapitalization of any of its stock; (d) to merge or
consolidate with or into any other corporation, or sell, lease, license, or
convey all or substantially all of its assets, or to liquidate, dissolve or
wind up; or (e) offer holders of registration rights the opportunity to
participate in an underwritten public offering of the Company’s securities for
cash, then, in connection with each such event, the Company shall give Holder: (1) at
least 10 days prior written notice of the date on which a record will be taken
for such dividend, distribution, or subscription rights (and specifying the
date on which the holders of common stock will be entitled thereto) or for
determining rights to vote, if any, in respect of the matters referred to in (a) and
(b) above; (2) in the case of the matters referred to in (c) and
(d) above at least 10 days prior written notice of the date when the same
will take place (and specifying the date on which the holders of common stock
will be entitled to exchange their common stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the
case of the matter referred to in (e) above, the same notice as is given
to the holders of such registration rights.


 


3.3                                 Registration
Under Securities Act of 1933, as amended. 
The Company represents and warrants that no shareholders or warrant
holders of the Company have contractual rights to cause the Company to register
their shares under the Securities Act of 1933, as amended, and accordingly no
such rights are being granted to Holder with respect to the Shares.


 


3.4                                 No
Shareholder Rights.  Except as
provided in this Warrant, the Holder will not have any rights as a shareholder
of the Company until the exercise of this Warrant.


 


ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER.  The Holder represents and warrants to the
Company as follows:


 


4.1                                 Purchase
for Own Account.  This Warrant and
the securities to be


 





















 


acquired upon exercise of this Warrant by the Holder will be acquired
for investment for the Holder’s account, not as a nominee or agent, and not
with a view to the public resale or distribution within the meaning of the
Act.  Holder also represents that the
Holder has not been formed for the specific purpose of acquiring this Warrant
or the Shares.


 


4.2                                 Disclosure
of Information.  The Holder has
received or has had full access to all the information it considers necessary
or appropriate to make an informed investment decision with respect to the
acquisition of this Warrant and its underlying securities.  The Holder further has had an opportunity to
ask questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Holder or to which the
Holder has access.


 


4.3                                 Investment
Experience.  The Holder understands
that the purchase of this Warrant and its underlying securities involves
substantial risk.  The Holder has
experience as an investor in securities of companies in the development stage
and acknowledges that the Holder can bear the economic risk of such Holder’s
investment in this Warrant and its underlying securities and has such knowledge
and experience in financial or business matters that the Holder is capable of
evaluating the merits and risks of its investment in this Warrant and its
underlying securities and/or has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables the Holder to be
aware of the character, business acumen and financial circumstances of such
persons.


 


4.4                                 Accredited
Investor Status.  The Holder is an “accredited
investor” within the meaning of Regulation D promulgated under the Act.


 


4.5                                 The
Act.  The Holder understands that
this Warrant and the Shares issuable upon exercise or conversion hereof have
not been registered under the Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of the Holder’s investment intent as expressed herein.  The Holder understands that this Warrant and
the Shares issued upon any exercise or conversion hereof must be held
indefinitely unless subsequently registered under the Act and qualified under
applicable state securities laws, or unless exemption from such registration
and qualification are otherwise available.


 


ARTICLE 5. MISCELLANEOUS.


 


5.1                                 Term:  This Warrant is exercisable in whole or in
part at any time and from time to time on or before the Expiration Date. 


 


5.2                                 Legends.   This
Warrant and the Shares (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) shall be imprinted with a legend in
substantially the following form:


 


THIS WARRANT AND THE SHARES
ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS


 





















 


AMENDED (THE “ACT”), OR THE
SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5
BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.


 


5.3                                 Compliance with
Securities Laws on Transfer.  This
Warrant and the Shares issuable upon exercise of this Warrant (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if
any) may not be transferred or assigned in whole or in part without compliance
with applicable federal and state securities laws by the transferor and the
transferee (including, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, as reasonably requested by the Company).  The Company shall not require Holder to
provide an opinion of counsel if the transfer is to Holder’s parent company,
SVB Financial Group (formerly Silicon Valley Bancshares), or any other
affiliate of Holder.  Additionally, the
Company shall also not require an opinion of counsel, so long as Rule 144
remains in effect in relevant part in substantially its current form, if (a) in
the reasonable judgment of the Company, based in part upon reasonably detailed
representations by the Holder or the selling broker, as appropriate, there is
no material question as to the availability of current information as
referenced in Rule 144(c), Holder has complied with Rule 144(d) and
the selling broker has complied with Rule 144(f), and (b) the Company
is provided with a copy of Holder’s notice of proposed sale.


 


5.4                                 Transfer
Procedure.  Upon receipt by Holder of
the executed Warrant, Holder may transfer all of this Warrant to Holder’s
parent company, SVB Financial Group, by execution of an Assignment
substantially in the form of Appendix 2. 
Subject to the provisions of Article 5.3 and upon providing Company
with written notice, SVB Financial Group and any subsequent Holder may transfer
all or part of this Warrant or the Shares issuable upon exercise of this
Warrant (or the Shares issuable directly or indirectly, upon conversion of the
Shares, if any) to any transferee, provided, however, in connection with any
such transfer, SVB Financial Group or any subsequent Holder will give the
Company notice of the portion of the Warrant being transferred with the name,
address and taxpayer identification number of the transferee and Holder will
surrender this Warrant to the Company for reissuance to the transferee(s) (and
Holder if applicable).  The Company may
refuse to transfer this Warrant or the Shares to any person who directly
competes with the Company, unless, in either case, the stock of the Company is
publicly traded.


 


5.5                                 Notices.  All notices and other communications from the
Company to the Holder, or vice versa, shall be deemed delivered and effective
when given personally or mailed by first-class registered or certified mail,
postage prepaid, at such address as may have been furnished to the Company or
the Holder, as the case may  (or on the
first business day after transmission by facsimile) be, in writing by the
Company or such Holder from time to time. 
Effective upon receipt of the fully executed Warrant and the initial
transfer described in Article 5.4 above, all notices to the Holder shall
be addressed as follows until the Company receives notice of a change of
address


 





















 


in connection with a transfer or otherwise:


SVB Financial Group


Attn: Treasury Department


3003 Tasman Drive, HA 200


Santa Clara, CA 95054


Telephone: 408-654-7400


Facsimile: 408-496-2405


 


Notice to the Company shall be addressed
as follows until the Holder receives notice of a change in address:


NORTH AMERICAN SCIENTIFIC, INC.


20200 Sunburst Street


Chatsworth, California 91311


Telephone: 
(818) 734-8600


Facsimile: 
(818) 734-5223


 


5.6                                 Waiver.  This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.


 


5.7                                 Attorney’s Fees.  In the event of any dispute between the
parties concerning the terms and provisions of this Warrant, the party
prevailing in such dispute shall be entitled to collect from the other party
all costs incurred in such dispute, including reasonable attorney’s fees.


 


5.8                                 Automatic
Conversion upon Expiration.  In the
event that, upon the Expiration Date, the fair market value of one Share (or
other security issuable upon the exercise hereof) as determined in accordance
with Section 1.3 above is greater than the Exercise Price in effect on
such date, then this Warrant shall automatically be deemed on and as of such
date to be converted pursuant to Section 1.2 above as to all Shares (or
such other securities) for which it shall not previously have been exercised or
converted, and the Company shall promptly deliver a certificate representing
the Shares (or such other securities) issued upon such conversion to the
Holder.


 


5.9                                 Counterparts.  This Warrant may be executed in counterparts,
all of which together shall constitute one and the same agreement.


 


5.10                           Governing Law.  This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to its principles regarding conflicts of law.


 





















 


	
  “COMPANY”

  	
   

  
	
   

  	
   

  
	
  NORTH AMERICAN SCIENTIFIC, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/L.
  MICHAEL CUTRER

  	
   

  	
  By:

  	
  /s/JAMES W.
  KLINGLER

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  L. Michael
  Cutrer

  	
   

  	
  Name:

  	
  James W.
  Klingler

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  President &
  Chief Executive Officer

  	
  Title:Sr. VP & Chief Financial Officer

  
	
   

  	
   

  
	
  “HOLDER”

  	
   

  
	
   

  	
   

  
	
  SILICON VALLEY BANK

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/BOB
  MULLER

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Bob Muller

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Senior
  Relationship Manager

  	
   

  	
   

  
											



 





















 


APPENDIX 1


 


NOTICE OF EXERCISE


 


1.                                       Holder elects to purchase               
shares of the Common/Series         
Preferred [strike one] Stock of                   
pursuant to the terms of the attached Warrant, and tenders payment of the
purchase price of the shares in full.


 


[or]


 


1.                                       Holder elects to
convert the attached Warrant into Shares/cash [strike one] in the manner specified
in the Warrant.  This conversion is
exercised for                        
of the Shares covered by the Warrant.


 


[Strike paragraph that does not apply.]


 


2.                                       Please issue a
certificate or certificates representing the shares in the name specified below:


 


	
   

  	
   

  	
   

  
	
   

  	
  Holders Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  



 


3.                                       By
its execution below and for the benefit of the Company, Holder hereby restates
each of the representations and warranties in Article 4 of the Warrant as
the date hereof.


 


	
   

  	
  HOLDER:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Date):

  	
   

  
	
   

  	
   

  	
   

  
						



 





















 


APPENDIX 2


 


ASSIGNMENT


 


For value received, Silicon Valley Bank hereby sells,
assigns and transfers unto


	
   

  	
  Name:

  	
  SVB Financial Group

  
	
   

  	
  Address:

  	
  3003 Tasman Drive (HA-200)

  
	
   

  	
   

  	
  Santa Clara, CA 95054

  
	
   

  	
   

  	
   

  
	
   

  	
  Tax ID:

  	
  91-1962278

  
	
   

  	
   

  	
   

  



 


that certain Warrant to Purchase Stock issued by                                    (the
“Company”), on               ,
200     (the “Warrant”) together with all rights, title and
interest therein.


 


	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
							



 


 


By its
execution below, and for the benefit of the Company, SVB Financial Group makes
each of the representations and warranties set forth in Article 4 of the
Warrant and agrees to all other provisions of the Warrant as of the date
hereof.


 


	
   

  	
  SVB
  FINANCIAL GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: