Prepared by MERRILL CORPORATION




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Exhibit 10.11  


 
 

2,500,000 Shares
  
    NORTH AMERICAN SCIENTIFIC, INC.
  
    Common Stock
  
    UNDERWRITING AGREEMENT    
  


        December 13,
2000 



	

CIBC WORLD MARKETS CORP.

UBS WARBURG LLC

LEERINK SWANN & COMPANY
	 	 	on behalf of the Several

Underwriters named on

Schedule I attached hereto
	

c/o CIBC World Markets Corp.

One World Financial Center

New York, New York 10281





Ladies and Gentlemen: 


        North
American Scientific, Inc., a Delaware corporation (the "Company") and the Selling Stockholders listed on Schedule II attached hereto (the "Selling Stockholders"),
propose, subject to the terms and conditions contained herein, to sell to you and the other underwriters named on Schedule I attached hereto (the "Underwriters"), for whom you are acting as
Representatives (the "Representatives"), an aggregate of 2,500,000 shares (the "Firm Shares") of the Company's Common Stock, $0.01 par value (the "Common Stock"). Of the 2,500,000 Firm Shares,
2,320,000 shares are to be issued and sold by the Company and 180,000 shares are to be sold by the Selling Stockholders. The respective amounts of the Firm Shares to be purchased by each of the
several Underwriters are set forth opposite their names on Schedule I attached hereto. In addition, the Company proposes to grant to the Underwriters an option to purchase up to an additional
375,000 shares (the "Option Shares") of Common Stock from the Company for the purpose of covering over-allotments in connection with the sale of the Firm Shares. The Firm Shares and the
Option Shares are together called the "Shares." 


1.    Sale and Purchase of the Shares. 


        On
the basis of the representations, warranties and agreements contained in, and subject to the terms and conditions of, this Agreement: 



        (a)  The
Company agrees to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a price of
$17.875 per share (the "Initial Price"), the number of Firm Shares set forth opposite the name of such Underwriter under the column "Number of Firm Shares to be Purchased from the Company" on
Schedule I to this Agreement, subject to adjustment in accordance with Section 11 hereof. Each of the Selling Stockholders agrees, severally and not jointly, to sell to the Underwriters,
at the Initial Price, the number of Firm Shares set forth opposite the name of such Selling Stockholder under the Column "Number of Firm Shares to be Sold
By Each Selling Stockholder" on Schedule II attached hereto, and each of the Underwriters agrees, severally and not jointly, to purchase from the Selling Stockholders, at the Initial Price, the
number of Firm Shares set forth opposite the name of such Underwriter under the column "Number of Firm Shares to be Purchased from the Selling Stockholders" on Schedule II attached hereto,
subject to adjustment in accordance with Section 11 hereof. 


        (b)  The
Company grants to the several Underwriters an option to purchase, severally and not jointly, all or any part of the Option Shares at the Initial Price. The number of
Option Shares to 






 





be
purchased by each Underwriter shall be the same percentage (adjusted by the Representatives to eliminate fractions) of the total number of Option Shares to be purchased by the Underwriters as such
Underwriter is purchasing of the Firm Shares. Such option may be exercised only to cover over-allotments in the sales of the Firm Shares by the Underwriters and may be exercised in whole
or in part at any time on or before 12:00 noon, New York City time, on the business day before the Firm Shares Closing Date (as defined below), and from time to time thereafter within 30 days
after the date of this Agreement, in each case upon written, facsimile or telegraphic notice, or verbal or telephonic notice confirmed by written, facsimile or telegraphic notice, by the
Representatives to the Company no later than 12:00 noon, New York City time, on the business day before the Firm Shares Closing Date or at least two business days before the Option Shares Closing Date
(as defined below), as the case may be, setting forth the number of Option Shares to be purchased and the time and date (if other than the Firm Shares Closing Date) of such purchase. 


2.    Delivery and Payment. Delivery by the Company and the Selling Stockholders of the Firm Shares to the Representatives for the respective
accounts of the Underwriters, and payment of the purchase price by wire transfer payable in New York Clearing House (same day) funds drawn to the order of the Company for the shares purchased from the
Company and to the Selling Stockholders for the shares purchased from the Selling Stockholders, against delivery of the respective certificates therefor to the Representatives, shall take place at the
offices of CIBC World Markets Corp., One World Financial Center, New York, New York 10281, at 10:00 a.m., New York City time, on the third business day following the date of this Agreement, or
at such time on such other date, not later than 10 business days after the date of this Agreement, as shall be agreed upon by the Company and the Representatives (such time and date of delivery and
payment are called the "Firm Shares Closing Date"). 


        In
the event the option with respect to the Option Shares is exercised in whole or in part on one or more occasions, delivery by the Company of the Option Shares to the Representatives
for the respective accounts of the Underwriters and payment of the purchase price thereof in immediately available funds by wire transfer payable in New York Clearing House (same day) funds to the
Company
shall take place at the offices of CIBC World Markets Corp. specified above at the time and on the date (which may be the same date as, but in no event shall be earlier than, the Firm Shares Closing
Date) specified in the notice referred to in Section 1(b) (such time and date of delivery and payment are called the "Option Shares Closing Date"). The Firm Shares Closing Date and the Option
Shares Closing Date are called, individually, a "Closing Date" and, together, the "Closing Dates." 


        Certificates
evidencing the Shares shall be registered in such names and shall be in such denominations as the Representatives shall request at least two full business days before the
Firm Shares Closing Date or, in the case of Option Shares, on the day of notice of exercise of the option as described in Section l(b) and shall be made available to the Representatives for
checking and packaging, at such place as is designated by the Representatives, on the full business day before the Firm Shares Closing Date (or the Option Shares Closing Date in the case of the Option
Shares). 


3.    Registration Statement and Prospectus; Public Offering. The Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published rules and regulations thereunder (the "Rules") adopted by the Securities and Exchange Commission (the "Commission") a
Registration Statement (as hereinafter defined) on Form S-3 (No. 333-48192), including a preliminary prospectus relating to the Shares, and such amendments
thereof as may have been required to the date of this Agreement. Copies of such Registration Statement (including all amendments thereof) and of the related Preliminary Prospectus (as hereinafter
defined) have heretofore been delivered by the Company to you. The term "Preliminary Prospectus" means any preliminary prospectus (as described in Rule 430 of the Rules) included at any time as
a part of the Registration Statement or filed with the Commission by the Company with the consent of 


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the Representatives pursuant to Rule 424(a) of the Rules. The term "Registration Statement" as used in this Agreement means the initial registration statement (including all exhibits,
financial schedules and information deemed to be a part of the Registration Statement through incorporation by reference or otherwise), as amended at the time and on the date it becomes effective (the
"Effective Date") including the information (if any) deemed to be part thereof at the time of effectiveness pursuant to Rule 430A of the Rules. If the Company has filed an abbreviated
registration statement to register additional Shares pursuant to Rule 462(b) under the Rules (the "462(b) Registration Statement") then any reference herein to the Registration Statement shall
also be deemed to include such 462(b) Registration Statement. The term "Prospectus" as used in this Agreement means the prospectus in the form included in the Registration Statement at the time of
effectiveness or, if Rule 430A of the Rules is relied on, the term Prospectus shall also include the final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules. 



        The
Company and the Selling Stockholders understand that the Underwriters propose to make a public offering of the Shares, as set forth in and pursuant to the Prospectus, as soon after
the Effective Date and the date of this Agreement as the Representatives deem advisable. The Company and the Selling Stockholders hereby confirm that the Underwriters and dealers have been authorized
to distribute or cause to be distributed each Preliminary Prospectus and are authorized to distribute the Prospectus (as from time to time amended or supplemented if the Company furnishes amendments
or supplements thereto to the Underwriters). 


4.    Representations and Warranties of the Company. The Company hereby represents and warrants to each Underwriter as follows: 



        (a)  On
the Effective Date, the Registration Statement complied, and on the date of the Prospectus, the date any post-effective amendment to the Registration
Statement becomes effective, the date any supplement or amendment to the Prospectus is filed with the Commission and each Closing Date, the Registration Statement and the Prospectus (and any amendment
thereof or supplement thereto) will comply, in all material respects, with the applicable provisions of the Securities Act and the Rules and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder. The Registration Statement did not, as of the Effective Date, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and on the Effective Date and the other dates referred to above neither the
Registration Statement nor the Prospectus, nor any amendment thereof or supplement thereto, will contain any untrue statement of a material fact or will omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not misleading. When any related preliminary prospectus was first filed with the Commission (whether filed as part of the
Registration Statement or any amendment thereto or pursuant to Rule 424(a) of the Rules) and when any amendment thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus as amended or supplemented complied in all material respects with the applicable provisions of the Securities Act and the Rules and did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. Notwithstanding the foregoing, none of the
representations and warranties in this paragraph 4(a) shall apply to statements in, or omissions from, the Registration Statement or the Prospectus made in reliance upon, and in conformity
with, information herein or otherwise furnished in writing by the Representatives on behalf of the several Underwriters for use in the Registration Statement or the Prospectus. With respect to the
preceding sentence, the Company acknowledges that the only information furnished in writing by the Representatives on behalf of the several Underwriters for use in the Registration Statement or the
Prospectus is the paragraph with respect to stabilization on the inside front cover page of the Prospectus and the statements contained under the caption "Underwriting" in the Prospectus. 



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        (b)  The
Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending
or preventing the use of the Prospectus has been issued and no proceedings for that purpose have been instituted or are threatened under the Securities Act. Any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Rules has been or will be made in the manner and within the time period required by such Rule 424(b). 


        (c)  The
documents incorporated by reference in the Registration Statement and the Prospectus, at the time they were filed with the Commission, complied in all material
respects with the requirements of the Exchange Act and, when read together and with the other information in the Registration Statement and the Prospectus, do not contain an untrue statement of a
material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 



        (d)  The
financial statements of the Company (including all notes and schedules thereto) included or incorporated by reference in the Registration Statement and Prospectus
present fairly the financial position, the results of operations, the statements of cash flows and the statements of stockholders' equity and the other information purported to be shown therein of the
Company and its Subsidiaries (as hereinafter defined) at the respective dates and for the respective periods to which they apply; and such financial statements and related schedules and notes have
been prepared in conformity with generally accepted accounting principles, consistently applied throughout the periods involved, and all adjustments necessary for a fair presentation of the results
for such periods have been made. The summary and selected financial data included in the Prospectus present fairly the information shown therein as at the respective dates and for the respective
periods specified and the summary and selected financial data have been presented on a basis consistent with the consolidated financial statements so set forth in the Prospectus and other financial
information. 


        (e)  To
the best of the Company's knowledge, PricewaterhouseCoopers, LLP, whose reports are filed with the Commission as a part of the Registration Statement, are and, during
the periods covered by their reports, were independent public accountants as required by the Securities Act and the Rules. 



        (f)    The
Company and each of its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the state of the jurisdiction of its
incorporation. The Company and each such subsidiary or other entity controlled directly or indirectly by the Company (collectively, "Subsidiaries") is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of the business conducted by it or location of the assets or properties owned, leased or licensed by it requires such
qualification, except for such jurisdictions where the failure to so qualify would not have a material adverse effect on the assets or properties, business, results of operations or financial
condition of the Company (a "Material Adverse Effect"). The Company does not own, lease or license any asset or property or conduct any business outside the United States of America. The Company and
each of its Subsidiaries has all requisite corporate power and authority, and all necessary authorizations, approvals, consents, orders, licenses, certificates and permits of and from all governmental
or regulatory bodies or any other person or entity (collectively, the "Permits"), to own, lease and license its assets and properties and conduct its business, all of which are valid and in full force
and effect, as described in the Registration Statement and the Prospectus, except where the lack of such Permits, individually or in the aggregate, would not have a Material Adverse Effect. The
Company and each of its Subsidiaries has fulfilled and performed in all material respects all of its material obligations with respect to such Permits and no event has occurred that allows, or after
notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the Company thereunder. Except as may be required under the 



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Securities Act and state and foreign Blue Sky laws, no other Permits are required to enter into, deliver and perform this Agreement and to issue and sell the Shares. 


        (g)  The
Company and each of its Subsidiaries own or possess adequate and enforceable rights to use all patents, patent applications, trademarks, trademark applications,
trade names, service marks, copyrights, copyright applications, licenses, know-how and other similar rights and proprietary knowledge (collectively, "Intangibles") described in the
Prospectus as being owned by them necessary for the conduct of their businesses. Neither the Company nor any of its Subsidiaries has received any notice of, or is not aware of, any infringement of or
conflict with asserted rights of others with respect to any Intangibles. 


        (h)  The
Company and each of its Subsidiaries have good and marketable title in fee simple to all items of real property and good and marketable title to all personal
property described in the Prospectuses as being owned by them. Any real property and buildings described in the Prospectuses as being held under lease by the Company and each of its Subsidiaries is
held by them under valid, existing and enforceable leases, free and clear of all liens, encumbrances, claims, security interests and defects, except such as are described in the Registration Statement
and the Prospectus or would not have a Material Adverse Effect. 


        (i)    There
are no litigation or governmental proceedings to which the Company or its Subsidiaries is subject or which is pending or, to the knowledge of the Company,
threatened, against the Company or any of its Subsidiaries, which, individually or in the aggregate, might have a Material Adverse Effect, affect the consummation of this Agreement or which is
required to be disclosed in the Registration Statement and the Prospectus that is not so disclosed. 



        (j)    Subsequent
to the respective dates as of which information is given in the Registration Statement and the Prospectus, except as described therein, (a) there has
not been any material adverse change with regard to the assets or properties, business, results of operations or financial condition of the Company; (b) neither the Company nor any of its
Subsidiaries has sustained any loss or interference with its assets, businesses or properties (whether owned or leased) from fire, explosion, earthquake, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or any court or legislative or other governmental action, order or decree which would have a Material Adverse Effect; and (c) since the date of
the latest balance sheet included in the Registration Statement and the Prospectus, except as reflected therein, neither the Company nor any of its Subsidiaries has (i) issued any securities or
incurred any liability or obligation, direct or contingent, for borrowed money, except such liabilities or obligations incurred in the ordinary course of business, (ii) entered into any
transaction not in the ordinary course of business or (iii) declared or paid any dividend or made any distribution on any shares of its stock or redeemed, purchased or otherwise acquired or
agreed to redeem, purchase or otherwise acquire any shares of its stock. 


        (k)  There
is no document, contract or other agreement of a character required to be described in the Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required by the Securities Act or Rules. Each description of a contract, document or other agreement in the Registration Statement and the
Prospectus accurately reflects in all material respects the terms of the underlying document, contract or agreement. Each agreement described in the Registration Statement and Prospectus or listed in
the Exhibits to the Registration Statement or incorporated by reference is in full force and effect and is valid and enforceable by and against the Company or a Subsidiary, as the case may be, in
accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles. Neither the Company nor any Subsidiary, if such Subsidiary is a party, nor to the
Company's knowledge, any other party is in 



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default in the observance or performance of any term or obligation to be performed by it under any such agreement, and no event has occurred which with notice or lapse of time or both would
constitute such a default, in any such case which default or event, individually or in the aggregate, would have a Material Adverse Effect. No default exists, and no event has occurred which with
notice or lapse of time or both would constitute a default, in the due performance and observance of any term, covenant or condition, by the Company or any Subsidiary, if such Subsidiary is a party
thereto, of any other agreement or instrument to which the Company or any Subsidiary is a party or by which it or its the Company, any Subsidiary or their respective properties or business may be
bound or affected which default or event, individually or in the aggregate, would have a Material Adverse Effect. 


        (l)    Neither
the Company nor any of its Subsidiaries is in violation of any term or provision of its charter or by-laws or of any franchise, license, permit,
judgment, decree, order, statute, rule or regulation, where the consequences of such violation, individually or in the aggregate, would have a Material Adverse Effect. 



        (m)  Neither
the execution, delivery and performance of this Agreement by the Company nor the consummation of any of the transactions contemplated hereby (including, without
limitation, the issuance and sale by the Company of the Shares) will give rise to a right to terminate or accelerate the due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, or require any consent or waiver under, or result in the
execution or imposition of any lien, charge or encumbrance upon any properties or assets of the Company or any of its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which either the Company or any of its Subsidiaries or any of their properties or businesses is bound, or
any franchise, license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or any of its Subsidiaries or violate any provision of the charter or by-laws
of the Company or any of its Subsidiaries, except for such consents or waivers which have already been obtained and are in full force and effect. 


        (n)  The
Company has authorized and outstanding capital stock as set forth under the caption "Capitalization" in the Prospectus. The certificates evidencing the Shares are in
due and proper legal form and have been duly authorized for issuance by the Company. All of the issued and outstanding shares of Common Stock have been duly and validly issued and are fully paid and
nonassessable. There are no statutory preemptive or other similar rights to subscribe for or to purchase or acquire any shares of Common Stock of the Company or any of its Subsidiaries or any such
rights pursuant to their respective Certificates of Incorporation or by-laws or any agreement or instrument to or by which the Company or any of its Subsidiaries is a party or bound. The
Shares, when issued and sold pursuant to this Agreement, will be duly and validly issued, fully paid and nonassessable and none of them will be issued in violation of any preemptive or other similar
right. Except as disclosed in the Registration Statement and the Prospectus, there is no outstanding option, warrant or other right calling for the issuance of, and there is no commitment, plan or
arrangement to issue, any share of stock of the Company or its Subsidiaries or any security convertible into, or exercisable or exchangeable for, such
stock. The Common Stock and the Shares conform in all material respects to all statements in relation thereto contained in the Registration Statement and the Prospectus. All outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly issued, and are fully paid and nonassessable and are owned directly by the Company or by another wholly-owned subsidiary of the
Company free and clear of any security interests, liens, encumbrances, equities or claims, other than those described in the Prospectus. 



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        (o)  Other
than the Selling Stockholders, no holder of any security of the Company has the right to have any security owned by such holder included in the Registration
Statement or to demand registration of any security owned by such holder during the period ending 90 days after the date of this Agreement. Each five percent stockholder, director and executive
officer of the Company have delivered to the Representatives such person's enforceable written lock-up agreement. 


        (p)  All
necessary corporate action has been duly and validly taken by the Company to authorize the execution, delivery and performance of this Agreement and the issuance and
sale of the Shares by the Company. This Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes and will constitute the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles. 


        (q)  Neither
the Company nor any of its Subsidiaries is involved in any labor dispute nor, to the knowledge of the Company, is any such dispute threatened, which dispute
would have a Material Adverse Effect. The Company is not aware of any existing or imminent labor disturbance by the employees of any of its principal suppliers or contractors which would have a
Material Adverse Effect. The Company is not aware of any threatened or pending litigation between the Company or any of its Subsidiaries and any of its executive officers which, if adversely
determined, could have a Material Adverse Effect and has no reason to believe that such officers will not remain in the employment of the Company. 


        (r)  No
transaction has occurred between or among the Company and any of its officers, directors or five percent stockholders or any affiliate or affiliates of any such
officer, director or five percent stockholders that is required to be described in and is not described in the Registration Statement and the Prospectus. 



        (s)  The
Company has not taken, nor will it take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of any of the Shares. 


        (t)    The
Company and its Subsidiaries have filed all Federal, state, local and foreign tax returns which are required to be filed through the date hereof, or has received
extensions thereof, and has paid all taxes shown on such returns and all assessments received by it to the extent that the same are material and have become due. There are no tax audits or
investigations pending, which if adversely determined would have a Material Adverse Effect; nor are there any material proposed additional tax assessments against the Company or any of its
Subsidiaries. 


        (u)  The
Shares have been duly authorized for quotation on the National Association of Securities Dealers Automated Quotation ("Nasdaq") National Market System, subject to
official Notice of Issuance. 


        (v)  Intentionally
omitted. 


        (w)  The
books, records and accounts of the Company and each of its Subsidiaries accurately and fairly reflect, in reasonable detail, the transactions in, and dispositions
of, the assets of, and the results of operations of, the Company and each of its Subsidiaries. The Company and each of its Subsidiaries maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles and to maintain asset 



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accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 


        (x)  The
Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are
customary in the businesses in which they are engaged or propose to engage after giving effect to the transactions described in the Prospectus; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its Subsidiaries or the Company's or its Subsidiaries' respective businesses, assets, employees, officers and directors are in full force and effect; the Company and
each of its Subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and neither the Company nor any Subsidiary of the Company has reason to believe
that it will be able to renew its existing insurance coverage as and when such coverage expires or obtain similar coverage from similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect. Neither the Company nor any Subsidiary has been denied any insurance coverage which it has sought or for which it has applied. 


        (y)  Each
approval, consent, order, authorization, designation, declaration or filing of, by or with any regulatory, administrative or other governmental body necessary in
connection with the execution and
delivery by the Company of this Agreement and the consummation of the transactions herein contemplated required to be obtained or performed by the Company (except such additional steps as may be
required by the National Association of Securities Dealers, Inc. (the "NASD") or may be necessary to qualify the Shares for public offering by the Underwriters under the state securities or
Blue Sky laws) has been obtained or made and is in full force and effect. 


        (z)  There
are no affiliations with the NASD among the Company's officers, directors or, to the knowledge of the Company, any five percent or greater stockholder of the
Company, except as set forth in the Registration Statement or otherwise disclosed in writing to the Representatives. 



        (aa)(i) Each
of the Company and its Subsidiaries are in compliance in all material respects with all rules, laws and regulation relating to the development,
testing, manufacturing, sale and distribution of products regulated by the U.S. Food and Drug Administration, or similar state or foreign government agency, the use, treatment, storage and disposal of
toxic substances and protection of health or the environment ("Environmental Law") which are applicable to its business; (ii) neither the Company nor its Subsidiaries has received any notice
from any governmental authority or third party of an asserted claim under Environmental Laws; (iii) each of the Company and its Subsidiaries have received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its business and is in compliance with all terms and conditions of any such permit, license or approval; (iv) to the
Company's knowledge, no facts currently exist that will require the Company or its Subsidiaries to make future material capital expenditures to comply with Environmental Laws; and (v) no
property which is or has been owned, leased or occupied by the Company or its Subsidiaries has been designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation of
Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.) or otherwise designated as a contaminated site under applicable state or local law. Neither the Company nor any of its
Subsidiaries has been named as a "potentially responsible party" under the CERCLA 1980. 


        (bb)In
the ordinary course of its business, the Company periodically reviews the effect of Environmental Laws on the business, operations and properties of the Company and
its Subsidiaries, to identify and evaluate associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating 



8





 





activities and any potential liabilities to third parties). On the basis of such review, the Company has no reason to believe that such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect. 


        (cc)The
Company is not and, after giving effect to the offering and sale of the Shares and the application of proceeds thereof as described in the Prospectus, will not be
an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"). 


        (dd)The
Company, its Subsidiaries or any other person associated with or acting on behalf of the Company or its Subsidiaries including, without limitation, any director,
officer, agent or employee of the Company or any of its Subsidiaries has not, directly or indirectly, while acting on behalf of the Company or any of its Subsidiaries (i) used any corporate
funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or
(iv) made any other unlawful payment. 


        (ee)The
Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (1) transactions are
executed in accordance with management's general or specific authorization; (2) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3) access to assets is permitted only in accordance with management's general or specific authorization; and
(4) recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 




5.    Representations and Warranties of the Selling Stockholders. Each of the Selling Stockholders hereby represents and warrants to each
Underwriter as follows: 



        (a)  Such
Selling Stockholder has caused certificates for the number of Shares to be sold by such Selling Stockholder hereunder to be delivered to North American
Scientific, Inc. as custodian (the "Custodian"), endorsed in blank or with blank stock powers duly executed, with a signature appropriately guaranteed, such certificates to be held in custody
by the Custodian for delivery, pursuant to the provisions of this Agreement and agreements dated December    , 2000, among the Custodian and each of the Selling Stockholders (the "Custody
Agreements"). 


        (b)  Each
Selling Stockholder has granted an irrevocable power of attorney (the "Power of Attorney") to the person named therein, on behalf of such Selling Stockholder, to
execute and deliver this Agreement and any other document necessary or desirable in connection with the transactions contemplated hereby and to deliver the shares to be sold by such Selling
Stockholder pursuant hereto. 


        (c)  This
Agreement, the Custody Agreements, the Powers of Attorney and the Lock-Up Agreements have each been duly authorized, executed and delivered by or on
behalf of each Selling Stockholder and, assuming due authorization, execution and delivery by the other parties hereto, constitutes the valid and legally binding agreement of such Selling Stockholder,
enforceable against such Selling Stockholder in accordance with its terms. 


        (d)  The
execution and delivery by each Selling Stockholder of this Agreement and the performance by such Selling Stockholder of its obligations under this Agreement
(i) will not contravene any provision of applicable law, statute, regulation or filing or any agreement or other instrument binding upon such Selling Stockholder or any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over such Selling Stockholder, (ii) does not require any consent, approval, authorization or order of or registration or filing with any court or 



9





 





governmental agency or body having jurisdiction over it, except such as may be required by the Blue Sky laws of the various states in connection with the offer and sale of the Shares which have been
or will be effected in accordance with this Agreement, (iii) does not and will not violate any statute, law, regulation or filing or judgment, injunction, order or decree applicable to such
Selling Stockholder or (iv) will not result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of such Selling Stockholder pursuant to the terms of any
agreement or instrument to which such Selling Stockholder is a party or by which such Selling Stockholder may be bound or to which any of the property or assets of such Selling Stockholder is subject. 


        (e)  Each
Selling Stockholder has, and on the Firm Shares Closing Date will have, valid and marketable title to the Shares to be sold by such Selling Stockholder free and
clear of any lien, claim, security interest or other encumbrance, including, without limitation, any restriction on transfer, except as otherwise described in the Registration Statement and
Prospectus. 


        (f)    Each
Selling Stockholder has, and on the Firm Shares Closing Date will have, full legal right, power and authorization, and any approval required by law, to sell,
assign, transfer and deliver the Shares to be sold by such Selling Stockholder in the manner provided by this Agreement. 


        (g)  Upon
delivery of and payment for the Shares to be sold by each Selling Stockholder pursuant to this Agreement, the several Underwriters will receive valid and marketable
title to such Shares free and clear of any lien, claim, security interest or other encumbrance. 



        (h)  All
information relating to each Selling Stockholder furnished in writing by such Selling Stockholder expressly for use in the Registration Statement and Prospectus is,
and on each Closing Date will be, true, correct, and complete, and does not, and on each Closing Date will not, contain any untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading. 


        (i)    Each
Selling Stockholder has reviewed the Registration Statement and Prospectus and, although such Selling Stockholder has not independently verified the accuracy or
completeness of all the information contained therein, nothing has come to the attention of such Selling Stockholder that would lead such Selling Stockholder to believe that (i) on the
Effective Date, the Registration Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein in order to make the statements made
therein not misleading and (ii) on the Effective Date the Prospectus contained and, on each Closing Date contains, no untrue statement of a material fact or omitted or omits to state any
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, misleading. 


        (j)    The
sale of Shares by each Selling Stockholder pursuant to this Agreement is not prompted by such Selling Stockholder's knowledge of any material information concerning
the Company or any of its Subsidiaries which is not set forth in the Prospectus. 



        (k)  Each
Selling Stockholder has not taken and will not take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares. 


        (l)    Each
Selling Stockholder has no actual knowledge that any representation or warranty of the Company set forth in Section 4 above is untrue or inaccurate in any
material respect. 


        (m)  The
representations and warranties of each Selling Stockholder in the applicable Custody Agreement are, and on each Closing Date will be, true and correct. 



10





 





6.    Conditions of the Underwriters' Obligations. The obligations of the Underwriters under this Agreement are several and not joint. The
respective obligations of the Underwriters to purchase the Shares are subject to each of the following terms and conditions: 



        (a)  Notification
that the Registration Statement has become effective shall have been received by the Representatives and the Prospectus shall have been timely filed with
the Commission in accordance with Section 7(a) of this Agreement. 


        (b)  No
order preventing or suspending the use of any preliminary prospectus or the Prospectus shall have been or shall be in effect and no order suspending the effectiveness
of the Registration Statement shall be in effect and no proceedings for such purpose shall be pending before or threatened by the Commission, and any requests for additional information on the part of
the Commission (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the satisfaction of the Commission and the Representatives. 


        (c)  The
representations and warranties of the Company and the Selling Stockholders contained in this Agreement and in the certificates delivered pursuant to
Section 6(d) shall be true and correct when made and on and as of each Closing Date as if made on such date. The Company and the Selling Stockholders shall have performed all covenants and
agreements and satisfied all the conditions contained in this Agreement required to be performed or satisfied by them at or before such Closing Date. 



        (d)  The
Representatives shall have received on each Closing Date a certificate, addressed to the Representatives and dated such Closing Date, of the chief executive or chief
operating officer and the chief financial officer or chief accounting officer of the Company to the effect that (i) the signers of such certificate have carefully examined the Registration
Statement, the Prospectus and this Agreement and that the representations and warranties of the Company in this Agreement are true and correct on and as of such Closing Date with the same effect as if
made on such Closing Date and the Company has performed all covenants and agreements and satisfied all conditions contained in this Agreement required to be performed or satisfied by it at or prior to
such Closing Date, and (ii) no stop order suspending the effectiveness of the Registration Statement has been issued and to the best of their knowledge, no proceedings for that purpose have
been instituted or are pending under the Securities Act. 


        (e)  The
Representatives shall have received on each Closing Date a certificate, addressed to the Representatives and dated such Closing Date, of each of the Selling
Stockholders, to the effect that each such Selling Stockholder has carefully examined the Registration Statement, the Prospectus and this Agreement and that the representations and warranties of such
Selling Stockholder in this Agreement are true and correct on and as of such Closing Date with the same effect as if made on such Closing Date and such Selling Stockholder has performed all covenants
and agreements and satisfied all conditions contained in this Agreement required to be performed or satisfied by it at or prior to such Closing Date. 


        (f)    The
Representatives shall have received, at the time this Agreement is executed and on each Closing Date a signed letter from PricewaterhouseCoopers LLP addressed to the
Representatives and dated, respectively, the date of this Agreement and each such Closing Date, in form and substance reasonably satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Securities Act and the Rules, that the response to Item 10 of the Registration Statement is correct insofar as it relates to them and stating in
effect that: 



        (i)    in
their opinion the audited financial statements and financial statement schedules included or incorporated by reference in the Registration Statement and the
Prospectus and 




11





 



reported on by them comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Rules; 


        (ii)  on
the basis of a reading of the amounts included in the Registration Statement and the Prospectus under the headings "Summary Consolidated Financial Data" and
"Selected Consolidated Financial Data," carrying out certain procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter, a reading of the minutes of the meetings of the stockholders and directors of the Company, and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters of the Company as to transactions and events subsequent to the date
of the latest audited financial statements, except as disclosed in the Registration Statement and the Prospectus, nothing came to their attention which caused them to believe that: 



        (A)  the
amounts in "Summary Consolidated Financial Data," and "Selected Consolidated Financial Data" included in the Registration Statement and the Prospectus do not agree
with the corresponding amounts in the audited and unaudited financial statements from which such amounts were derived; or 


        (B)  with
respect to the Company, there were, at a specified date not more than three business days prior to the date of the letter, any increases in the current liabilities
and long-term liabilities of the Company or any decreases in net income or in working capital or the stockholders' equity in the Company, as compared with the amounts shown on the
Company's audited balance sheet for the fiscal year ended October 31, 1999 and the fiscal year ended October 31, 1998 included in the Registration Statement; 




        (iii)  they
have performed certain other procedures as may be permitted under Generally Acceptable Auditing Standards as a result of which they determined that certain
information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company) set
forth in the Registration Statement and the Prospectus and reasonably specified by the Representatives agrees with the accounting records of the Company; and 



        (iv)  based
upon the procedures set forth in clauses (ii) and (iii) above and a reading of the amounts included in the Registration Statement under the headings
"Summary Financial Data" and "Selected Financial Data" included in the Registration Statement and Prospectus and a reading of the financial statements from which certain of such data were derived,
nothing has come to their attention that gives them reason to believe that the "Summary Financial Data" and "Selected Financial Data" included in the Registration Statement and Prospectus do not
comply as to the form in all material respects with the applicable accounting requirements of the Securities Act and the Rules or that the information set forth therein is not fairly stated in
relation to the financial statements included in the Registration Statement or Prospectus from which certain of such data were derived are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the audited financial statements included in the Registration Statement and Prospectus. 





        References
to the Registration Statement and the Prospectus in this paragraph (f) are to such documents as amended and supplemented at the date of the letter. 



        (g)  The
Representatives shall have received on each Closing Date from D'Ancona & Pflaum, LLC, counsel for the Company, an opinion, addressed to the Representatives
and dated such Closing Date, and stating in effect that: 



        (i)    Each
of the Company and its Subsidiaries have been duly organized and is validly existing as a corporation in good standing under the laws of the state of the
jurisdiction of its 




12





 



incorporation. Each of the Company and its Subsidiaries is duly qualified and in good standing as a foreign corporation in each jurisdiction in which the character or location of its assets or
properties (owned, leased or licensed) or the nature of its businesses makes such qualification necessary, except for such jurisdictions where the failure to so qualify, individually or in the
aggregate, would not have a Material Adverse Effect. 


        (ii)  Each
of the Company and its Subsidiaries has all requisite corporate power and authority to own, lease or license its assets and its properties and conduct its business
as now being conducted and as described in the Registration Statement and the Prospectus and, with respect to the Company, to enter into, deliver and perform this Agreement and to issue and sell the
Shares. 


        (iii)  The
Company has authorized and issued capital stock as set forth in the Registration Statement and the Prospectus under the caption "Capitalization"; the certificates
evidencing the Shares are in due and proper legal form and have been duly authorized for issuance by the Company; all of the outstanding shares of Common Stock of the Company have been duly and
validly authorized and issued and are fully paid and nonassessable and none of them was issued in violation of any preemptive or other similar right. The Shares when issued and sold pursuant to this
Agreement will be duly and validly issued, outstanding, fully paid and nonassessable and none of them will have been issued in violation of any preemptive or other similar right. To the best of such
counsel's knowledge, except as disclosed in the Registration Statement and the Prospectus, there are no preemptive or other rights to subscribe for or to purchase or any restriction upon the voting or
transfer of any securities of the Company pursuant to the Company's Certificate of Incorporation or by-laws or other governing documents or any agreements or other instruments to which the
Company is a party or by which it is bound. To the best of such counsel's knowledge, except as disclosed in the Registration Statement and the Prospectus, there is no outstanding option, warrant or
other right calling for the issuance of, and no commitment, plan or arrangement to issue, any share of stock of the Company or any security convertible into, exercisable for, or exchangeable for stock
of the Company. The Common Stock, the Shares and the Warrants conform in all material respects to the descriptions thereof contained in the Registration Statement and the Prospectus. The issued and
outstanding shares of capital stock of each of the Company's Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and, to the best of such counsel's knowledge,
are owned by the Company or by another wholly-owned subsidiary of the Company, free and clear of any perfected security interest or any other security interests, liens, encumbrances, equities or
claims, other than those contained in the Registration Statement and the Prospectus. 


        (iv)  Each
of the Lock-Up Agreements executed by the Company's stockholders, directors and officers has been duly and validly delivered by such persons and
constitutes the legal, valid and binding obligation of each such person enforceable against each such person in accordance with its terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles. 


        (v)  All
necessary corporate action has been duly and validly taken by the Company to authorize the execution, delivery and performance of this Agreement and the issuance and
sale of the Shares. This Agreement has been duly and validly authorized, executed and delivered by the Company and this Agreement constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles. 




13





 


        (vi)  Neither
the execution, delivery and performance of this Agreement by the Company nor the consummation of any of the transactions contemplated hereby (including, without
limitation, the issuance and sale by the Company of the Shares) will give rise to a right to terminate or accelerate the due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or any event which with notice or lapse of time, or both, would constitute a default) under, or require consent or waiver under, or result in the
execution or imposition of any lien, charge, claim, security interest or encumbrance upon any properties or assets of the Company or the Subsidiary pursuant to the terms of any indenture, mortgage,
deed trust, note or other agreement or instrument of which such counsel is aware and to which the Company or the Subsidiary is a party or by which either the Company or the Subsidiary or any of their
respective properties or businesses is bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulation of which such counsel is aware or violate any provision of the
charter or by-laws of the Company or the Subsidiary. 


        (vii)To
the best of such counsel's knowledge, no default exists, and no event has occurred which with notice or lapse of time, or both, would constitute a default, in the
due performance and observance of any term, covenant or condition by the Company of any indenture, mortgage, deed of trust, note or any other agreement or instrument to which the Company is a party or
by which it or any of its assets or properties or businesses may be bound or affected, where the consequences of such default, individually or in the aggregate, would have a Material Adverse Effect. 



        (viii)To
the best of such counsel's knowledge, the Company and its Subsidiaries are not in violation of any term or provision of their respective charters or
by-laws or any franchise, license, permit, judgment, decree, order, statute, rule or regulation, where the consequences of such violation, individually or in the aggregate, would have a
Material Adverse Effect. 


        (ix)  No
consent, approval, authorization or order of any court or governmental agency or regulatory body is required for the execution, delivery or performance of this
Agreement by the Company or the consummation of the transactions contemplated hereby or thereby, except such as have been obtained under the Securities Act and such as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters. 


        (x)  To
the best of such counsel's knowledge, there is no litigation or governmental or other proceeding or investigation, before any court or before or by any public body or
board pending or threatened against, or involving the assets, properties or businesses of, the Company which would have a Material Adverse Effect. 


        (xi)  The
statements in the Prospectus under the captions "Description of Capital Stock," "Business" and "Related Party Transactions," insofar as such statements constitute a
summary of documents referred to therein or matters of law, are fair summaries in all material respects and accurately present the information called for with respect to such documents and matters.
Accurate copies of all contracts and other documents required to be filed as exhibits to, or described in, the Registration Statement have been so filed with the Commission or are fairly described in
the Registration Statement, as the case may be. 


        (xii)The
Registration Statement, all preliminary prospectuses and the Prospectus and each amendment or supplement thereto (except for the financial statements and schedules
and other financial and statistical data included therein, as to which such counsel expresses no opinion) comply as to form in all material respects with the requirements of the Securities Act and the
Rules. 




14





 





        (xiii)The
Registration Statement is effective under the Securities Act, and no stop order suspending the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are threatened, pending or contemplated. Any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period required by such Rule 424(b). 


        (xiv)The
Shares have been approved for listing on the Nasdaq National Market. 


        (xv)The
capital stock of the Company conforms in all material respects to the description thereof contained in the Prospectus under the caption "Description of Capital
Stock." 


        (xvi)The
Company is not an "investment company" or an entity controlled by an "investment company" as such terms are defined in the Investment Company Act of 1940, as
amended. 





        To
the extent deemed advisable by such counsel, such counsel may rely as to matters of fact on certificates of responsible officers of the Company and public officials and on the
opinions of other counsel satisfactory to the Representatives as to matters which are governed by laws other than the
laws of the State of Illinois, the General Corporation Law of the State of Delaware and the Federal laws of the United States; provided that such counsel shall state that in their opinion the
Underwriters and they are justified in relying on such other opinions. Copies of such certificates and other opinions shall be furnished to the Representatives and counsel for the Underwriters. 


        In
addition, such counsel shall state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the Representatives and
representatives of the independent certified public accountants of the Company, at which conferences the contents of the Registration Statement and the Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and the
Prospectus (except as specified in the foregoing opinion), on the basis of the foregoing, no facts have come to the attention of such counsel which lead such counsel to believe that the Registration
Statement at the time it became effective (except with respect to the financial statements and notes and schedules thereto and other financial data, as to which such counsel need express no belief)
contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus
as amended or supplemented (except with respect to the financial statements, notes and schedules thereto and other financial data, as to which such counsel need make no statement) on the date thereof
contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. 



        (h)  The
Representatives shall have received on each Closing Date from Pillsbury, Madison & Sutro, L.P., special patent counsel for the Company and its Subsidiaries,
an opinion, addressed to the Representatives and dated such Closing Date, and stating in effect that: 




        We
have acted as patent counsel to the Company and its Subsidiaries with respect to the patent matters reflected on Schedule A attached hereto (the "Relevant Patent Matters"). 



        We
have read the Registration Statement and the Prospectus, including in particular the portions of the Registration Statement and the Prospectus under the captions "Risk Factors" and
"Business" (such portions being referred to herein, collectively, as the "Technology Portions"). 


15







   
OPINIONS: 


1.    The
statements in the Technology Portions are accurate and fairly present the matters of law and legal conclusions stated therein. 


2.    Nothing
has come to our attention which has caused us to believe that the Technology Portions contain any untrue statement of a material fact with respect to the patent position of the
Company or its Subsidiaries, or omit to state any material fact relating to the patent position of the Company or its Subsidiaries. 



3.    Nothing
has come to our attention which has caused us to believe that (a) any patent application referred to in the Relevant Patent Matters was not properly prepared and filed,
in accordance with all applicable legal and procedural requirements, or is not in good standing, (b) the issued patents (the "Issued Patents") referred to in the Relevant Patent Matters was not
properly obtained, in accordance with all applicable legal and procedural requirements, or is not in good standing, (c) that any invention described in any patent application or the issued
patent is not held by the Company or its Subsidiaries, as applicable, or (d) any relevant prior art has not been disclosed promptly to the appropriate governmental agency. 



4.    To
our knowledge, the Company and its Subsidiaries have not received any notice asserting any ownership rights contrary to those of the Company or its Subsidiaries in any of the
Relevant Patent Matters. 


5.    To
our knowledge, the Company and its Subsidiaries have not received any notice challenging the validity or enforceability of any Relevant Patent Matter. 


6.    To
our knowledge, the Company and its Subsidiaries have not received any notice of infringement of, or conflict with, rights or claims of others with respect to any patent, trademark,
service mark, trade name, copyright or know-how. 


7.    To
our knowledge, other than proceedings (except re-examination, reissue or interference proceedings) of the various patent and trademark offices, there are no legal or
governmental proceedings pending relating to any patent, patent application, trade secret, trademark, service mark or other proprietary information or materials of the Company or its Subsidiaries and,
to our knowledge, no such proceedings are threatened or contemplated by governmental authorities or others. 


        In
addition, such counsel shall state that such counsel has participated in conferences with officers and other representatives of the Company and its Subsidiaries, representatives of
the Representatives and representatives of the independent public accountants of the Company, at which conferences the contents of the Registration Statement and the Prospectus as they related to the
matters set forth in the foregoing opinion were discussed. While such counsel has not undertaken to independently verify and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the Prospectus (except as specified in the foregoing opinion), on the basis of the foregoing, no facts have come to the attention
of such counsel with respect to the matters set forth in the foregoing opinion which lead such counsel to believe that the Registration Statement at the time it became effective (except with respect
to the financial statements and notes and schedules thereto and other financial data, as to which such counsel need express no belief) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus as amended or supplemented (except with respect to the financial
statements, notes and schedules thereto and other financial data, as to which such counsel need make no statement) on the date thereof and the date of such opinion contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 


16





 



        (i)    The
Representatives shall have received on each Closing Date from Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., special regulatory counsel for the Company
and its Subsidiaries, an opinion, addressed to the Representatives and dated such Closing Date, and stating in effect that: 



        (i)    The
statements under the captions "Risk Factors" and "Business" in the Registration Statement and the Prospectus are in all material respects accurate summaries of
applicable U.S. federal law and regulation under the Federal Food, Drug and Cosmetic Act, as amended, as applied by the U.S Food and Drug Administration, subject to the qualifications set forth
therein. 


        (ii)  No
facts have come to our attention that have caused us to believe that the information contained under the captions "Risk Factors" and "Business" in the Registration
Statement at the time the Registration Statement became effective contained any untrue statement of a material fact, or omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which they were made, not misleading. 


        (iii)  We
have no knowledge of any action, suit or proceeding threatened by the U.S. Food and Drug Administration against the Company or any of its Subsidiaries seeking
limitation, suspension or revocation of any license, permit, approval or authorization required by the Company or any Subsidiary to conduct its business as described in the Registration Statement and
Prospectus. 




        (j)    The
Representatives shall have received on the Firm Shares Closing Date from D'Ancona & Pflaum, LLC, counsel for the Selling Stockholders, an opinion, addressed
to the Representatives and dated such Closing Date, and stating in effect that: 



        (i)    This
Agreement has been duly and validly executed and delivered by or on behalf of each of the Selling Stockholders. 


        (ii)  This
Agreement, the Custody Agreement, the Power of Attorney and the Lock-Up Agreement each constitute the legal, valid and binding obligation of each of
the Selling Stockholders enforceable against each such Selling Stockholder in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles; and each of the Selling Stockholders have full legal
right and authority to enter into this Agreement and to sell, transfer and deliver in the manner provided in this Agreement, the respective Shares to be sold by each such Selling Stockholder
hereunder. 


        (iii)  The
transfer and sale by each of the Selling Stockholders of the Shares to be sold by each such Selling Stockholder as contemplated by this Agreement will not conflict
with, result in a breach of, or constitute a default under any agreement or instrument known to such counsel to which such Selling Stockholder is a party or by which such Selling Stockholder or any of
its properties may be bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulation. 


        (iv)  All
of the Selling Stockholders' rights in the Shares to be sold by each Selling Stockholder pursuant to this Agreement, have been transferred to the Underwriters who
have severally purchased such Shares pursuant to this Agreement, free and clear of adverse claims, assuming for purposes of this opinion that the Underwriters purchased the same in good faith without
notice of any adverse claims. 


        (v)  No
consent, approval, authorization, license, certificate, permit or order of any court, governmental or regulatory agency, authority or body or financial institution is
required in 




17





 






connection with the performance of this Agreement by the Selling Stockholders or the consummation of the transactions contemplated hereby, including the delivery and sale of the Shares to be
delivered and sold by the Selling Stockholders, except such as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Shares by the several
Underwriters. 





        To
the extent deemed advisable by such counsel, they may rely as to matters of fact on certificates of the Selling Stockholders and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of the State of the State of Delaware or the Federal laws of the United States; provided that such counsel shall state that
in their opinion the Underwriters and they are justified in relying on such other opinions. Copies of such certificates and other opinions shall be furnished to the Representatives and counsel for the
Underwriters. 


        In
addition, such counsel shall state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the Representatives and
representatives of the independent public accountants of the Company, at which conferences the contents of the Registration Statement and the Prospectus and related matters were discussed. While such
counsel has not undertaken to independently verify and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and the
Prospectus (except as specified in the foregoing opinion), on the basis of the foregoing, no facts have come to the attention of such counsel which lead such counsel to believe that the Registration
Statement at the time it became effective (except with respect to the financial statements, notes and schedules thereto and other financial data, as to which such counsel need express no belief)
contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus
as amended or supplemented (except with respect to the financial statements, notes and schedules thereto and other financial data, as to which such counsel need make no statement) on the date thereof
and the date of such opinion contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. 



        (k)  All
proceedings taken in connection with the sale of the Firm Shares and the Option Shares as herein contemplated shall be reasonably satisfactory in form and substance
to the Representatives, and their counsel and the Underwriters shall have received from McDermott, Will & Emery a favorable opinion, addressed to the Representatives and dated such Closing
Date, with respect to the Shares, the Registration Statement and the Prospectus, and such other related matters, as the Representatives may reasonably request, and the Company shall have furnished to
McDermott, Will & Emery such documents as they may reasonably request for the purpose of enabling them to pass upon such matters. 



        (l)    The
Representatives shall have received copies of the Lock-up Agreements executed by each entity or person described in Section 4(n). 


        (m)  The
Company and the Selling Stockholders shall have furnished or caused to be furnished to the Representatives such further certificates or documents as the
Representatives shall have reasonably requested. 




7.    Covenants of the Company. 



        (a)  The
Company covenants and agrees as follows: 



        (i)    The
Company will use its best efforts to cause the Registration Statement, if not effective at the time of execution of this Agreement, and any amendments thereto, to
become effective as promptly as possible. The Company shall prepare the Prospectus in a form approved by the Representatives and file such Prospectus pursuant to Rule 424(b) under the 




18





 



Securities Act not later than the Commission's close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Securities Act. 


        (ii)  The
Company shall promptly advise the Representatives in writing (i) when any amendment to the Registration Statement shall have become effective, (ii) of
any request by the Commission for any amendment of the Registration Statement or the Prospectus or for any additional information, (iii) of the prevention or suspension of the use of any
preliminary prospectus or the Prospectus or of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any
proceeding for that purpose and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Company shall not file any amendment of the Registration Statement or supplement to the Prospectus unless the Company has furnished
the Representatives a copy for its review prior to filing and shall not file any such proposed amendment or supplement to which the Representatives reasonably object. The Company shall use its best
efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. 


        (iii)  If,
at any time when a prospectus relating to the Shares is required to be delivered under the Securities Act and the Rules, any event occurs as a result of which the
Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be necessary to amend or supplement the Prospectus to comply with the Securities Act or the Rules, the Company promptly shall
prepare and file with the Commission, subject to the second sentence of paragraph (ii) of this Section 7(a), an amendment or supplement which shall correct such statement or omission or
an amendment which shall effect such compliance. 


        (iv)  The
Company shall make generally available to its security holders and to the Representatives as soon as practicable, but not later than 45 days after the end of
the 12-month period beginning at the end of the fiscal quarter of the Company during which the Effective Date occurs (or 90 days if such 12-month period coincides with
the Company's fiscal year), an earning statement (which need not be audited) of the Company, covering such 12-month period, which shall satisfy the provisions of Section 11(a) of
the Securities Act or Rule 158 of the Rules. 


        (v)  The
Company shall furnish to the Representatives and counsel for the Underwriters, without charge, signed copies of the Registration Statement (including all exhibits
thereto and amendments thereof) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and all amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Securities Act or the Rules, as many copies of any preliminary prospectus and the Prospectus and any amendments thereof and supplements thereto as the
Representatives may reasonably request. 


        (vi)  The
Company shall cooperate with the Representatives and their counsel in endeavoring to qualify the Shares for offer and sale in connection with the offering under the
laws of such jurisdictions as the Representatives may designate and shall maintain such qualifications in effect so long as required for the distribution of the Shares; provided, however, that the
Company shall not be required in connection therewith, as a condition thereof, to qualify as a foreign corporation or to execute a general consent to service of process in any jurisdiction or subject
itself to taxation as doing business in any jurisdiction. 




19





 





        (vii)Without
the prior written consent of CIBC World Markets Corp., for a period of 180 days after the date of this Agreement, the Company and each of its individual
directors and executive officers shall not issue, sell or register with the Commission (other than on Form S-8 or on any successor form), or otherwise dispose of, directly or
indirectly, any equity securities of the Company (or any securities convertible into, exercisable for or exchangeable for equity securities of the Company), except for the issuance of the Shares
pursuant to the Registration Statement and the issuance of shares pursuant to the Company's existing stock option plan or bonus plan as described in the Registration Statement and the Prospectus. In
the event that during this period, (i) any shares are issued pursuant to the Company's existing stock option plan or bonus plan that are exercisable during such 180 day period or
(ii) any registration is effected on Form S-8 or on any successor form relating to shares that are exercisable during such 180 period, the Company shall obtain the written
agreement of such grantee or purchaser or holder of such registered securities that, for a period of 180 days after the date of this Agreement, such person will not, without the prior written
consent of CIBC World Markets Corp., offer for sale, sell, distribute, grant any option for the sale of, or otherwise dispose of, directly or indirectly, or exercise any registration rights with
respect to, any shares of Common Stock (or any securities convertible into, exercisable for, or exchangeable for any shares of Common Stock) owned by such person. 


        (viii)On
or before completion of the offering of the Shares, the Company shall make all filings required under applicable securities laws and by the Nasdaq National Market
(including any required registration under the Exchange Act). 


        (ix)  The
Company will apply the net proceeds from the offering of the Shares in the manner set forth under "Use of Proceeds" in the Prospectus. 




        (b)  The
Company agrees to pay, or reimburse if paid by the Representatives, whether or not the transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the public offering of the Shares and the performance of the obligations of the Company under this Agreement including those relating to: (i) the
preparation, printing, filing and distribution of the Registration Statement including all exhibits thereto, each preliminary prospectus, the Prospectus, all amendments and supplements to the
Registration Statement and the Prospectus, and the printing, filing and distribution of this Agreement; (ii) the preparation and delivery of certificates for the Shares to the Underwriters;
(iii) the registration or qualification of the Shares for offer and sale under the securities or Blue Sky laws of the various jurisdictions referred to in Section 7(a)(vi), including the
reasonable fees and disbursements of counsel for the Underwriters in connection with such registration and qualification and the preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs of shipping and mailing) to the Representatives and to the Underwriters of copies of each preliminary prospectus, the
Prospectus and all amendments or supplements to the Prospectus, and of the several documents required by this Section to be so furnished, as may be reasonably requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to whom Shares may be sold; (v) the filing fees of the NASD in connection with its review of the terms of the public offering
and reasonable fees and disbursements of counsel for the Underwriters in connection with such review; (vi) inclusion of the Shares for quotation on the Nasdaq National Market; and
(vii) all transfer taxes, if any, with respect to the sale and delivery of the Shares by the Company to the Underwriters. Subject to the provisions of Section 10, the Underwriters agree
to pay, whether or not the transactions contemplated hereby are consummated or this Agreement is terminated, all costs and expenses incident to the performance of the obligations of the Underwriters
under this Agreement not payable by the Company pursuant to the preceding sentence, including, without limitation, the fees and disbursements of counsel for the Underwriters. 



20





 

8.    Indemnification. 



        (a)  The
Company and the Selling Stockholders agree, jointly and severally, to indemnify and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all losses, claims, damages and liabilities, joint or several
(including any reasonable investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Securities Act, the Exchange Act or other Federal or state law or regulation, at common law or otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto, or in any Blue Sky application or other information or other documents executed by the Company filed in any state or other jurisdiction to
qualify any or all of the Shares under the securities laws thereof (any such application, document or information being hereinafter referred to as a "Blue Sky Application") or arise out of or are
based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) in whole or in part
upon any breach of the representations and warranties set forth in Section 4 hereof, or (iii) in whole or in part upon any failure of the Company to perform any of its obligations
hereunder or under law; provided, however, that such indemnity shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) on account of any losses, claims, damages
or liabilities arising from the sale of the Shares to any person by such Underwriter if such untrue statement or omission or alleged untrue statement or omission was made in such preliminary
prospectus, the Registration Statement or the Prospectus, or such amendment or supplement thereto, or in any Blue Sky Application in reliance upon and in conformity with information furnished in
writing to the Company by the Representatives on behalf of any Underwriter specifically for use therein. Notwithstanding the foregoing, the liability of the Selling Stockholders pursuant to the
provisions of Section 8(a) shall be limited to an amount equal to the aggregate net proceeds received by each Selling Stockholder from the sale of the Shares sold by each such Selling
Stockholder hereunder. This indemnity agreement will be in addition to any liability which the Company and Selling Stockholders may otherwise have. 


        (b)  Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, the Selling Stockholders and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, each director of the Company, and each officer of the Company who signs the Registration
Statement, to the same extent as the foregoing indemnity from the Company and the Selling Stockholders to each Underwriter, but only insofar as such losses, claims, damages or liabilities arise out of
or are based upon any untrue statement or omission or alleged untrue statement or omission which was made in any preliminary prospectus, the Registration Statement or the Prospectus, or any amendment
thereof or supplement thereto, contained in the (i) concession and reallowance figures appearing under the caption "Underwriting" and (ii) the stabilization information contained under
the caption "Underwriting" in the Prospectus; provided, however, that the obligation of each Underwriter to indemnify the Company or the Selling Stockholders (including any controlling person,
director or officer thereof) shall be limited to the net proceeds received by the Company from such Underwriter. 



        (c)  Any
party that proposes to assert the right to be indemnified under this Section will, promptly after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section, notify each such indemnifying party of the commencement of such action, suit
or 



21





 





proceeding, enclosing a copy of all papers served. No indemnification provided for in Section 8(a) or 8(b) shall be available to any party who shall fail to give notice as provided in this
Section 8(c) if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was prejudiced by the failure to give such notice but the
omission so to notify such indemnifying party of any such action, suit or proceeding shall not relieve it from any liability that it may have to any indemnified party for contribution or otherwise
than under this Section. In case any such action, suit or proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses, except as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in connection with the defense thereof. The indemnified party shall have the right to employ its counsel in any such action, but the fees
and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the employment of counsel by such indemnified party has been authorized in writing by the indemnifying parties, (ii) the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it which are different from or in addition to those available to the indemnifying party (in which case the indemnifying parties shall
not have the right to direct the defense of such action on behalf of the indemnified party) or (iii) the indemnifying parties shall not have employed counsel to assume the defense of such
action within a reasonable time after notice of the commencement thereof, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying parties. An indemnifying
party shall not be liable for any settlement of any action, suit, proceeding or claim effected without its written consent, which consent shall not be unreasonably withheld or delayed. 




9.    Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in
Section 8(a) or 8(b) is due in accordance with its terms but for any reason is held to be unavailable to or insufficient to hold harmless an indemnified party under Section 8(a) or 8(b),
then each indemnifying party shall contribute to the aggregate losses, claims, damages and liabilities (including any investigation, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting any contribution received by any person entitled hereunder to contribution from any
person who may be liable for contribution including, without limitation, persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and directors of the Company) to which the indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company, the Selling Stockholders and the Underwriters from the offering of the Shares or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not having received notice as provided in Section 8 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company, the Selling Stockholders and the Underwriters in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company, the Selling Stockholders and the Underwriters
shall be deemed to be in the same proportion as (x) the total proceeds from the offering (net of underwriting discounts but before deducting expenses) received by the Company or the Selling
Stockholders, as set forth in the table on the cover page of the Prospectus, bear to (y) the underwriting discounts received by the Underwriters, as set forth in the table on the cover page of
the Prospectus. The relative fault of the Company, the Selling Stockholders or the 


22





 


Underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact related to information supplied by the Company, the Selling
Stockholders or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this
Section 9, (i) in no case shall any Underwriter (except as may be provided in the Agreement Among Underwriters) be liable or responsible for any amount in excess of the underwriting
discount applicable to the Shares purchased by such Underwriter hereunder; (ii) the Company shall be liable and responsible for any amount in excess of such underwriting discount; and
(iii) in no case shall any Selling Stockholder be liable and responsible for any amount in excess of the aggregate net proceeds of the sale of Shares received by such Selling Stockholder;
provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9, each person, if any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights to contribution as such Underwriter, and each person, if any, who controls the Company within the meaning of the
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to clauses (i) and (ii) in the immediately preceding sentence of this Section 9. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party
or parties under this Section, notify such party or parties from whom contribution may be sought, but the omission so to notify such party or parties from whom contribution may be sought shall not
relieve the party or parties from whom contribution may be sought from any other obligation it or they may have hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled without its written consent. The Underwriter's obligations to contribute pursuant to this Section 9 are several in
proportion to their respective underwriting commitments and not joint. 


10.    Termination. This Agreement may be terminated with respect to the Shares to be purchased on a Closing Date by the Representatives by
notifying the Company and the Selling Stockholders at any time: 



        (a)  in
the absolute discretion of the Representatives at or before any Closing Date: (i) if on or prior to such date, any domestic or international event or act or
occurrence has materially disrupted, or in the opinion of the Representatives will in the future materially disrupt, the securities markets; (ii) if there has occurred any new outbreak or
material escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in the judgment of the Representatives,
inadvisable to proceed with the offering; (iii) if there shall be such a material adverse change in general financial, political or economic conditions or the effect of international conditions
on the financial markets in the United States is such as to make it, in the judgment of the Representatives, inadvisable or impracticable to market the Shares; (iv) if trading in the Shares has
been suspended by the Commission or trading generally on the New York Stock Exchange, Inc., on the American Stock Exchange, Inc. or the Nasdaq National Market has been suspended or
limited, or minimum or maximum ranges for prices for securities shall have been fixed, or maximum ranges for prices for securities have been required, by said exchanges or by order of the Commission,
the National Association of Securities Dealers, Inc., or any other governmental or regulatory authority; or (v) if a banking moratorium 



23





 


has been declared by any state or Federal authority; or (vi) if, in the judgment of the Representatives, there has occurred a Material Adverse Effect, or 


        (b)  at
or before any Closing Date, that any of the conditions specified in Section 6 shall not have been fulfilled when and as required by this Agreement. 




        If
this Agreement is terminated pursuant to any of its provisions, neither the Company nor the Selling Stockholders shall be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (y) if this Agreement is terminated by the Representatives or the Underwriters because of any failure, refusal or inability on the part
of the Company or the Selling Stockholders to comply with the terms or to fulfill any of the conditions of this Agreement, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including the reasonable fees and disbursements of their counsel) incurred by them in connection with the proposed purchase and sale of the Shares or in
contemplation of performing their obligations hereunder and (z) no Underwriter who shall have failed or refused to purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its obligations under this Agreement, shall be relieved of liability to the Company, the Selling Stockholders or to the other
Underwriters for damages occasioned by its failure or refusal. 


11.    Substitution of Underwriters. If one or more of the Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 10) to purchase on any Closing Date the Shares agreed to be purchased on such Closing Date by such Underwriter or Underwriters, the
Representatives may find one or more substitute underwriters to purchase such Shares or make such other arrangements as the Representatives may deem advisable or one or more of the remaining
Underwriters may agree to purchase such Shares in such proportions as may be approved by the Representatives, in each case upon the terms set forth in this Agreement. If no such arrangements have been
made by the close of business on the business day following such Closing Date, 



        (a)  if
the number of Shares to be purchased by the defaulting Underwriters on such Closing Date shall not exceed 10% of the Shares that all the Underwriters are obligated to
purchase on such Closing Date, then each of the nondefaulting Underwriters shall be obligated to purchase such Shares on the terms herein set forth in proportion to their respective obligations
hereunder; provided, that in no event shall the maximum number of Shares that any Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant to this Section 11 by
more than one-ninth of such number of Shares without the written consent of such Underwriter, or 


        (b)  if
the number of Shares to be purchased by the defaulting Underwriters on such Closing Date shall exceed 10% of the Shares that all the Underwriters are obligated to
purchase on such Closing Date, then the Company shall be entitled to one additional business day within which it may, but is not obligated to, find one or more substitute underwriters reasonably
satisfactory to the Representatives to purchase such Shares upon the terms set forth in this Agreement. 




        In
any such case, either the Representatives or the Company shall have the right to postpone the applicable Closing Date for a period of not more than five business days in order that
necessary changes and arrangements (including any necessary amendments or supplements to the Registration Statement or Prospectus) may be effected by the Representatives and the Company. If the number
of Shares to be purchased on such Closing Date by such defaulting Underwriter or Underwriters shall exceed 10% of the Shares that all the Underwriters are obligated to purchase on such Closing Date,
and none of the nondefaulting Underwriters or the Company shall make arrangements pursuant to this Section within the period stated for the purchase of the Shares that the defaulting Underwriters
agreed to purchase, this Agreement shall terminate with respect to the Shares to be purchased on such Closing
Date without liability on the part of any nondefaulting Underwriter to the Company or the Selling Stockholders and without liability on the part of the Company, except in both cases as provided in 


24





 


Sections 7(b), 8, 9 and 10. The provisions of this Section shall not in any way affect the liability of any defaulting Underwriter to the Company or the nondefaulting Underwriters arising out of such
default. A substitute underwriter hereunder shall become an Underwriter for all purposes of this Agreement. 



12.    Miscellaneous. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers,
of the Selling Stockholders and of the Underwriters set forth in or made pursuant to this Agreement shall remain in full force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or the Selling Stockholders or any of the officers, directors or controlling persons referred to in Sections 8 and 9 hereof, and shall survive delivery of and payment for
the Shares. The provisions of Sections 7(b), 8, 9 and 10 shall survive the termination or cancellation of this Agreement. 


        This
Agreement has been and is made for the benefit of the Underwriters, the Company and the Selling Stockholders and their respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling any of the Underwriters, or the Company, and directors and officers of the Company, and their respective successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement. The term "successors and assigns" shall not include any purchaser of Shares from any Underwriter merely because of such
purchase. 


        All
notices and communications hereunder shall be in writing and mailed or delivered or by telephone or telegraph if subsequently confirmed in writing, (a) if to the
Representatives, c/o CIBC World Markets Corp., One World Financial Center, New York, New York 10281 Attention: Michael Fekete, with a copy to McDermott, Will & Emery, 2049 Century Park East,
Suite 3400, Los Angeles, California 90067, Attention: Mark J. Mihanovic, Esq., (b) if to the Company, to its agent for service as such agent's address appears on the cover page of the
Registration Statement with a copy to D'Ancona & Pflaum, 111 East Wacker Drive, Suite 2800, Chicago, Illinois 60601, Attention: Allan J. Reich, Esq., and (c) if to the Selling
Stockholders to                        ,
Attention:                                        
        , with a copy to                        ,
Attention:                        , Esq.
 


        This
Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of laws. 


        This
Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument. 


SIGNATURES
ON NEXT PAGE 


25







   
        Please confirm that the foregoing correctly sets forth the agreement among us. 



	 	 	Very truly yours,
	

 	
 	

NORTH AMERICAN SCIENTIFIC, INC.
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	

 	
 	

SELLING STOCKHOLDER
	



	
 	

        Print Name of Selling Stockholder
	



	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	 	 	

	 	 	 	 	Title:
	 	 	 	 	 	 	

	 	 	 	 	 	 	(if applicable)
	

 	
 	

SELLING STOCKHOLDER
	



	
 	

        Print Name of Selling Stockholder
	



	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	 	 	

	 	 	 	 	Title:
	 	 	 	 	 	 	

	 	 	 	 	 	 	(if applicable)
	

 	
 	

SELLING STOCKHOLDER
	



	
 	

        Print Name of Selling Stockholder





26





 

	



	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	 	 	

	 	 	 	 	Title:
	 	 	 	 	 	 	

	 	 	 	 	 	 	(if applicable)
	

 	
 	

SELLING STOCKHOLDER
	



	
 	

        Print Name of Selling Stockholder
	



	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	 	 	

	 	 	 	 	Title:
	 	 	 	 	 	 	

	 	 	 	 	 	 	(if applicable)





	

Confirmed:	
 	

 
	



CIBC WORLD MARKETS CORP.

UBS WARBURG LLC

LEERINK SWANN & COMPANY



 Acting severally on behalf of itself

and as representative of the several

Underwriters named in Schedule I annexed

hereto.	

 	



 
	

 	
 	

By:	
 	

CIBC WORLD MARKETS CORP.	
 	

 
	



	
 	

 	
 	

By:	
 	

 	
 	

 	
 	

 
	 	 	 	 	 	 	
	 	 
	 	 	 	 	 	 	Title:	 	 	 	 
	 	 	 	 	 	 	 	 	
	 	 




27






SCHEDULE I  



	Name
 
	 	Number of

Firm Shares to

Be Purchased

From the Company

	CIBC World Markets Corp.	 	1,112,500
	UBS Warburg LLC	 	822,500
	Leerink Swann & Company	 	235,000
	Adams, Harkness & Hill, Inc.	 	75,000
	A.G. Edwards & Sons, Inc.	 	75,000
	 	 	

	TOTAL	 	2,320,000








SCHEDULE II  



	Selling Stockholder
 
	 	Number of

Firm Shares to

Be Sold

By Each of the

Selling Stockholders

	L. Michael Cutrer	 	60,000
	Alan I. Edrick	 	30,000
	Dr. Allen M. Green	 	30,000
	Irwin J. Gruverman	 	50,000
	Michael C. Lee	 	10,000
	 	 	

	Total	 	180,000





	Underwriters
 
	 	Number of

Firm Shares to

Be Purchased

From the

Selling Stockholders

	

CIBC World Markets Corp.	
 	

180,000
	 	 	

	Total	 	180,000











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2,500,000 Shares NORTH AMERICAN SCIENTIFIC, INC. Common Stock UNDERWRITING AGREEMENT