**Exihibit 10.22**

 

**SECUREDLOAN AGREEMENT AND PROMISSORY NOTE**

** **

This Loan Agreement andPromissory Note (this “Agreement”), dated as of October 15, 2003 (the “ClosingDate”), is entered into by Prostate Centers of America, LLC, a Georgia limited liability company(collectively, the “Borrower”), in favor of North American Scientific,Inc., a Delaware corporation (“Lender”), in order to permit Borrower toobtain certain loans (individually, a “Loan” and collectively, the “Loans”)from Lender from time to time on the terms and subject to the conditions setforth in this Agreement.  Accordingly,Borrower and Lender, intending to be legally bound, agree as follows:

 

1.                                       Principaland Interest.

 

(a)                                  Forvalue received, Borrower hereby promises to pay to the order of Lender theprincipal sum of up to One Million Two Hundred Thousand Dollars ($1,200,000)(the “Maximum Loan Amount”) or such lesser amount as may be disbursedhereunder.  All Loans hereunder shallbear interest at the Note Rate until such Loan is repaid in full.  The “Note Rate” shall mean a per annumrate equal to six percent (6%).

 

(b)                                 On the terms and subject to the conditionsset forth in this Agreement, Lender shall make a Loan to Borrower as follows:(i) $350,000 shall be disbursed to Borrower on October 15, 2003; (ii) $350,000shall be disbursed on February 1, 2004; (iii) $250,000 shall be disbursed onMay 1, 2004; and (iv) $250,000 shall be disbursed on August 1, 2004. Anydisbursement of a Loan shall be made subject to Borrower achieving each of thosecertain milestones set forth on Schedule A attached hereto.  In the event Borrower does not meet anymilestone or condition set forth on Schedule A, Lender shall not beobligated to make any further disbursements of the Loan.  If any date so scheduled or requested fordisbursement falls on a day other than a day on which the Lender’s bankinginstitution is open for banking business (a “Business Day”), then suchdisbursement shall be made on the next Business Day.

 

(c)                                  The Borrower covenants and agrees that theLoan proceeds shall be used solely to fund those operating expenses as setforth on Schedule B attached hereto.

 

(d)                                 Borrower shall repay the Loans as follows:

 

(i)                                     Commencingon April 1, 2004, Borrower shall make quarterly interest payments of all unpaidinterest accrued on the Loans.  Borrowershall make all such quarterly interest payments on the first day of eachcalendar quarter up to the Maturity Date (as defined below) with all unpaid,accrued interest hereunder due on the Maturity Date.

 

(ii)                                  Commencing on December 1, 2004, Borrowershall make four (4) equal quarterly repayments of all unpaid principaloutstanding on the Loans.  The last ofsuch quarterly principal payments shall be made on the

 

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Maturity Date, unless earlier accelerated hereunder orunder any of the Loan Documents (as defined below).

 

(iii)                               The full unpaid principal balance of allLoans and all accrued and unpaid interest, fees and charges thereon, if notsooner declared to be due in accordance with the terms hereof, shall be due andpayable, if not previously paid, on September 1, 2005 (the “Maturity Date”).

 

(e)                                  Borrower furtheragrees to pay on demand all reasonable costs and expenses incurred by Lender,including, without limitation, court costs and reasonable attorneys’ fees anddisbursements, incurred by Lender in endeavoring to enforce this Agreement orany other Loan Document, including, without limitation, those incurred indefending any action or claim threatened or brought against Lender by Borroweror any other person or entity (each, an “Obligor”) now or hereafterobligated to Lender with respect to any Liabilities or obligation to Lenderunder any Loan Document, or any of their respective successors, legalrepresentatives or assigns, or any creditor, stockholder, member or owner ofBorrower or any other Obligor (all such principal, costs, fees, expenses andall other amounts now or hereafter owing under or in connection with thisAgreement from time to time, including any interest thereon, are referred toherein, collectively, as the “Liabilities”).

 

2.                                       Conditionsto Loans.  This Agreement evidencesthe Loans in an aggregate principal amount outstanding at any time not toexceed the Maximum Loan Amount which shall be made by Lender to Borrower,subject to the following terms and conditions: (i) delivery to Lender of theLoan Documents and such other documents and instruments as Lender shallrequire, in each case, duly executed by the respective Obligors and in form andsubstance satisfactory to Lender, (ii) delivery to Lender of a personalguaranty of the Liabilities by Randy Tibitts (the “Guaranty”), (iii)delivery to Lender of that certain Pledge and Security Agreement by and betweenBorrower and Lender (the “Pledge and Security Agreement”), whichBorrower is executing as collateral security for the Liabilities, and (iv) theabsence of any Event of Default (as defined below).  Borrower shall not be entitled to reborrowany Loan that is repaid.

 

3.                                       DefaultRate; Payments.  Notwithstanding theforegoing, any Liabilities that are not paid to Lender when due shall accrueinterest, from the date due until paid, at a rate per annum equal to twelvepercent (12%) (the “Default Rate”). All interest under this Agreement shall be calculated on the basis of a365-day year and shall be paid in accordance with the actual number of dayselapsed.  All payments hereunder shall bemade to Lender in lawful currency of the United States of America inimmediately available funds at 20200 Sunburst Street, Chatsworth, CA  91311, or at such other place(s), or in suchother manner, as Lender shall notify Borrower from time to time.  Borrower may pay any amounts owing under thisAgreement at any time prior to their due date without premium or penalty.  Any payments received by Lender in payment ofthe Liabilities shall be applied by Lender (i) first, to any Liabilities thendue in such order as Lender shall determine, and (ii) second, to anyLiabilities not then due in such order as Lender shall determine.

 

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4.                                       Loan Documents.  ThisAgreement and each other agreement, document and instrument from time to timefurnished to Lender in connection with this Agreement, in each case, as amendedfrom time to time, are referred to herein collectively as the “LoanDocuments,” and shall include, without limitation, the following: (i) theGuaranty; and (ii) the Pledge and Security Agreement.

 

5.                                       Representations,Warranties and Covenants.  In orderto induce Lender to accept this Agreement and make Loans from time to time,Borrower hereby represents and warrants to, and covenants with, Lender asfollows:

 

(a)                                  Organization.  Borrower is a limited liability company dulyorganized, validly existing and in good standing under the laws of the State ofGeorgia, as applicable, and has the requisite power and authority to enter intoand perform its obligations under each of the Loan Documents to which it is aparty, and to enter into the borrowings and other transactions contemplatedthereby. Borrower has delivered to Lender true, correct and complete copies, ineach case, as amended, supplemented and otherwise modified and in effect on thedate thereof, of (i) the Articles of Organization and the Operating Agreementof Borrower, and (ii) the written consent of the directors of Borrower dulyauthorizing the execution and delivery of the Loan Documents to which it is aparty, the performance of its obligations thereunder and the consummation ofthe transactions contemplated thereby (including the borrowings evidenced hereby)(all of the foregoing being collectively referred to as Borrower’s “OrganizationalDocuments”).

 

(b)                                 Authorization;Binding Obligations.  The executionand delivery of each Loan Document, the transactions contemplated thereby(including, in the case of this Agreement, the borrowings evidenced hereby),and the performance by Borrower of its obligations under such Loan Document,have been, or when entered into will be, duly authorized by all necessarycorporate or other action, as the case may be, on the part of Borrower.  Each Loan Document has been, or when executedwill be, duly executed and delivered by Borrower and constitutes, or whenexecuted will constitute, the legal, valid and binding obligations of Borrower,enforceable against it in accordance with its terms.

 

(c)                                  Non-Contravention.  The execution and delivery by Borrower of theLoan Documents to which it is a party are not (or when executed will not be),and the consummation of the transactions contemplated thereby and theperformance by Borrower of its obligations under such Loan Documents will notbe, in contravention of the Organizational Documents, or any law, rule,regulation, judgment, order or decree of any governmental authority bindingupon or applicable to Borrower or its properties, and do not and will notcontravene any provision of, or constitute a default under, any otheragreement, indenture, mortgage or other instrument to which Borrower is a partyor by which it or its property is bound, or require any consent or approval of,or filing or registration with, any governmental authority or other person orentity.

 

(d)                                 Litigation.  There is no action, suit, investigation orproceeding pending or, to Borrower’s best knowledge, threatened, by or beforeany court, governmental agency or arbitrator, nor has any order, judgment ordecree been issued, or,

 

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to Borrower’s bestknowledge, threatened, by any court, governmental agency or arbitrator whichcould materially adversely affect the business, condition (financial orotherwise), operations or properties of Borrower or its ability to enter intoor fulfill any of its obligations under the Loan Documents.

 

(e)                                  FinancialStatements.  All financial statementsrelating to Borrower furnished to Lender, and all such financial statementshereafter furnished to Lender will be prepared in accordance with generallyaccepted accounting principles consistently applied on a consolidated andconsolidating basis, respectively (“GAAP”) and fairly present the financialcondition of Borrower as at the dates thereof and the results of operations forthe periods covered thereby.

 

(f)                                    Taxes.  Borrower has filed and will file when due,all tax returns and reports required by law to be filed by it and has paid, andwill pay when due, all taxes and governmental charges thereby shown to beowing, except any such taxes or charges which are being diligently contested ingood faith by appropriate proceedings and for which adequate reserves inaccordance with GAAP shall have been set aside on its books and which havebeen, or in the case of contests arising in the future will be when they arise,disclosed in writing to Lender.

 

(g)                                 Accuracy; Survival.  All factual information heretofore orcontemporaneously furnished by or on behalf of any of the Obligors to Lenderfor purposes of or in connection with any of the Loan Documents is, and allsuch factual information hereafter furnished by or on behalf of any of theObligors to Lender shall be, true and accurate in every material respect on oras of the date such information is furnished, and such information does not, orwhen furnished shall not, omit to state any material fact necessary to makesuch information not misleading.  Therepresentations, warranties and covenants of Borrower under this Agreementshall survive execution and delivery of this Agreement, shall be in addition toand not in limitation of any other representations, warranties or covenantsunder any other Loan Documents, and shall be deemed to be continuously remadeuntil all of the Liabilities and all other liabilities and obligations ofBorrower to Lender, whether now or hereafter arising, have been fully andfinally paid and satisfied.

 

6.                                       AdditionalAffirmative Covenants.  In order toinduce Lender to accept this Agreement and make Loans from time to time,Borrower hereby further covenants with Lender as follows:

 

(a)                                  Use of Loans.  Borrower will use the proceeds of Loanssolely for those certain operating expenses as set forth on Schedule Battached hereto.

 

(b)                                 Continuation ofBusiness.  Borrower will maintain itsexistence and business operations as presently in effect in accordance with allapplicable laws and regulations, pay its debts and obligations as they becomedue in the ordinary course of business under normal trade terms (except as maybe otherwise prohibited by Lender under the Loan Documents), and pay on orbefore the date they are last payable without

 

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penalty, all taxes, assessments, fees and othergovernmental monetary obligations, except as they may be contested in goodfaith by appropriate proceedings if they are properly reflected on its books inaccordance with GAAP and, at Lender’s request, adequate funds or security hasbeen pledged to insure payment.

 

(c)                                  Officers.  Borrower shall cause its officers to devotetheir full time and attention to the operation of Borrower.

 

(d)                                 Books of Record andAccount.  Borrower will maintainproper books, records and accounts in accordance with GAAP and consistent withthe highest standards of its industry.

 

(e)                                  Reporting.  Within thirty (30) days after the close ofeach calendar month after the Closing Date, Borrower and PCA shall furnish toLender monthly consolidated and consolidating financial statements, including,without limitation, balance sheets, income statements and other financialstatements of Borrower and PCA, each certified by an appropriate officer ofBorrower and PCA and whatever other information, books and records Lender mayreasonably request.  Within sixty (60)days after the close of each calendar year, Borrower and PCA shall furnish toLender year end financial statements.

 

(f)                                    Notice of Eventof Default.  Borrower shall notifyLender at any time that Borrower is, or reasonably expects to be, in default ofany of the provisions hereof or if any other Event of Default occurs.

 

7.                                       AdditionalNegative Covenants.  Without theprior written consent of Lender, so long as this Agreement remains outstanding:

 

(a)                                  Use of Loans.  Borrower shall not use, directly orindirectly, any proceeds of the Loan in violation of any law.

 

(b)                                 Payments.  Borrower will not declare or make anydividend, distribution or other payment to any equity holder of Borrower (otherthan reasonable employment compensation for services actually performed anddistributions for taxes as permitted under Borrower’s Operating Agreement),without the prior written consent of Lender.

 

(c)                                  AffiliateTransactions.  Borrower will notenter into any transaction, arrangement or agreement with any of its Affiliates(as defined below) which is not on terms at least as favorable to Borrower as aprudent person in a substantially similar position to Borrower would be able toobtain in a substantially similar transaction, arrangement or agreement with aperson which is not one of its Affiliates and is otherwise at arm’s length toBorrower, without the prior written consent of Lender.  For purposes hereof, “Affiliate” ofBorrower means any other person or entity which, directly or indirectly, controls,is controlled by or is under common control with Borrower, including, withoutlimitation, any director, officer or stockholder of Borrower. Borrower

 

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shall be deemed to be “controlled by” any other personor entity if such person or entity possesses, directly or indirectly, the power(i) to vote 10% or more of the securities (on a fully diluted basis) havingordinary voting power for the election of directors, or (ii) to direct or causethe direction of the management and policies of Borrower whether by contract orotherwise.

 

(d)                                 Debt. Borrowershall not, without Lender’s prior written consent, incur, or permit to remainoutstanding, any debt for borrowed money or installment obligations, except (i)Liabilities and debt to Lender, (ii) unsecured subordinated loans from equityholders of Borrower, (iii) unsecured trade debt incurred in the ordinary courseof business under normal trade terms, and (iv) unsecured or subordinated debtincurred with respect to any leases entered into in the ordinary course ofbusiness under customary terms.

 

(e)                                  Merger;Consolidation. Borrower shall not consolidate with or merge into anycorporation or other entity, or permit any corporation or other entity to mergeinto it.  Borrower shall not, except inthe ordinary course of business, convey, lease, sell or otherwise dispose ofall or a material portion of its assets or business.

 

(f)                                    Guarantees.  Borrower will not guarantee or otherwisebecome or remain secondarily liable on the undertaking of another, except inthe case of Affiliates (as defined above) or on endorsement for deposit andcollection in the ordinary course of business.

 

(g)                                 Compensation.  Borrower will not use anyof the proceeds of the Loans to purchase or acquire any securities of, or makeany loans or advances to, or investment in, any person or entity.

 

8.                                       Eventsof Default.  Each of the followingevents or occurrences shall constitute an “Event of Default”:  (a) Borrower shall fail to pay any Liabilitywhen due (whether at maturity, upon demand or otherwise); (b) anyrepresentation or warranty of Borrower made under any Loan Document or in anycertificate furnished to Lender is or shall be incorrect, violated ormisleading in any material respect, when made or deemed made; (c) Borrowershall fail to comply with any of the covenants contained in this Agreement; (d)Borrower or any Obligor shall fail to duly perform when due any of itsobligations under any Loan Document; (e) a default shall occur in (i) thepayment when due, whether by acceleration or otherwise, of any indebtedness inexcess of $100,000 (other than indebtedness described in clause (a) above) ofBorrower or (ii) the performance or observance of any obligation, covenant orcondition with respect to such indebtedness, if the effect of such default isto accelerate, or to permit the acceleration of, the maturity of suchindebtedness; (f) any judgment or order for the payment of money in excess of$100,000 shall be rendered against Borrower which is not discharged, stayed orindemnified against to the satisfaction of Lender within thirty (30) days; (g)the termination, dissolution or liquidation (by operation of law or otherwise)of Borrower or any Obligor; (h) Borrower or any Obligor shall become insolvent,a receiver, trustee or custodian shall be appointed for either or any part ofits or his property, or any proceeding shall be commenced by or against eitherunder any bankruptcy, reorganization, debt arrangement or insolvency law, and,

 

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in the case of any such proceeding commenced against either, suchproceeding shall not be dismissed within forty-five (45) days thereafter; (i) adefault by Borrower or any other Obligor (subject to applicable grace or cureperiods) or an “Event of Default” shall occur under any other agreement orinstrument between Borrower and Lender; (j) a material adverse change shalloccur after the date hereof in the business, condition (financial orotherwise), operations, properties or prospects of Borrower; or (k) the termination of key contracts ofBorrower or Borrower’s material default under such key contracts, which wererelied on by Lender to induce the Loan, including, without limitation, theRadioactive Sources Supply Agreement dated August 28, 2003 between TC2B andNorth American Scientific, Inc. (attached hereto as Attachment A).

 

9.                                       Remedies.  Following an Event of Default, Lender at itsoption, shall have all rights and remedies available under applicable law andunder any Loan Document.  In addition tothe foregoing rights and remedies, following an Event of Default, Lender shallhave the right to declare all or any Liabilities to be immediately due andpayable, whereupon all such Liabilities shall become immediately due andpayable, without further notice, demand, declaration or presentment of any kind(provided that, upon an Event of Default described in clause (h) of Section 9,all Liabilities automatically shall become due and payable, withoutdeclaration, notice, demand or presentment of any kind).

 

All rights andremedies of Lender after a Event of Default shall be cumulative andconcurrent.  No waiver by Lender of anyEvent of Default shall constitute a waiver of any other Event of Default or thesame Event of Default on a different occasion. The rights of Lender following an Event of Default are withoutlimitation to its right to demand payment of any and all Liabilities at anytime.

 

10.                                 Notices.  Unless otherwise set forth in this Agreement,all notices and other communications in connection with this Agreement shall besent in writing to Lender at its address set forth in Section 3 above, or toBorrower at 212 Jackson Square, Suite B, Dublin, GA 31021 (or to such other address as either party shall notifythe other party in writing), and any such notice or other communication shallbe deemed delivered one (1) day after being sent by nationally-recognizedprivate courier or by facsimile, three (3) days after being sent by certifiedU.S. mail, postage prepaid, return receipt requested, or upon actual receiptwhen sent by any other means.

 

11.                                 JURISDICTION;WAIVER OF JURY TRIAL. IN CONNECTION WITH ANY MATTER OR DISPUTE ARISING OUTOF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, BORROWER HEREBY (A)CONSENTS, AT LENDER’S ELECTION AND WITHOUT LIMITING LENDER’S RIGHT TO COMMENCEAN ACTION IN ANY OTHER JURISDICTION, TO THE JURISDICTION AND VENUE OF COURTS FOTHE STATE OF CALIFORNIA OR IN THE UNITED STATES DISTRICT COURT FOR THE CENTRALDISTRICT OF CALIFORNIA, (B) WAIVES ANY OBJECTION TO IMPROPER VENUE AND FORUMNON CONVENIENS, AND (C) CONSENTS TO SERVICE OF PROCESS BY CERTIFIED MAIL,POSTAGE PREPAID, ADDRESSED TO BORROWER AT ITS ADDRESS FOR NOTICES PROVIDEDABOVE.  BORROWER HEREBY WAIVES TRIAL BYJURY IN ALL PROCEEDINGS ARISING IN

 

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CONNECTION WITH THIS AGREEMENT, ANY OTHER LOAN DOCUMENT AND THETRANSACTIONS CONTEMPLATED HEREBY.

 

12.                                 Waiver of Notices.  Borrower irrevocably waives diligence incollection or protection, presentment, protest, notice of protest, demand,dishonor, default, non-payment, creation and existence of any Liabilities andany security or collateral for any Liabilities, and all other matters or thingsrelating to the Liabilities, this Agreement or any other Loan Document,including any extension before, at or after the Maturity Date.  Lendershall not be deemed, by any act or omission, to have waived any of its rightsor remedies hereunder unless such waiver is in writing and signed by Lender andthen only to the extent specifically set forth in such writing.  A waiver with reference to one event shallnot be construed as continuing or as a bar to or waiver of any right or remedyas to a subsequent event.  No delay oromission of Lender to exercise any right, whether before or after an Eventof  Default hereunder, shall impair anysuch right or shall be construed to be a waiver of any right or Event ofDefault, and the acceptance at any time by Lender of any past-due amount shallnot be deemed to be a waiver of the right to require prompt payment when due ofany other amounts then or thereafter due and payable.

 

13.                                 Governing Law;Binding Effect.  If any provision ofthis Agreement is prohibited by or invalid under applicable law, that provisionshall be ineffective to the extent of the prohibition or invalidity, withoutinvalidating the rest of that provision or the remaining provisions of thisAgreement.  This Agreement shall begoverned and construed in accordance with the internal laws of the State ofCalifornia applicable to agreements made and to be performed entirely withinCalifornia, without regard to the conflict of laws principles ofCalifornia.  This Agreement shall bindBorrower and Borrower’s successors, legal representatives and assigns, andshall inure to the benefit of Lender and its successors, legal representativesand assigns.  Borrower shall not assignor transfer any right or obligation under this Agreement without prior writtenconsent of Lender.  No provision of this Agreementmay be waived, amended, released or otherwise changed, except by a writingsigned by the party against which enforcement is sought.

 

14.                                 Time.  Time is of the essence hereof.  Upon any Event of Default hereunder, Lendermay exercise all rights and remedies provided herein or in any Loan Documents.

 

15.                                 Lostor Destroyed Agreement.  Upon receipt by Borrower of notice by theLender of the loss, theft, destruction or mutilation of this Agreement, and inthe case of any such loss, theft or destruction, delivery of an indemnityreasonably satisfactory to the Borrower or, in case of any such mutilation,upon surrender and cancellation of this Agreement, Borrower will issue areplacement Agreement of like tenor in lieu of this Agreement.

 

16.                                 UCC Instrument.  ThisAgreement may be executed in multiple counterparts, each of which shall bedeemed an original, but all of which together shall constitute one and the sameagreement, and a facsimile signature hereon may be relied upon as an originalfor all purposes; provided that only the counterpart executed by Borrower anddelivered to Lender shall be deemed to be an original to the extent this is an “instrument”within the meaning of such term under Article 9 of the Uniform Commercial Codeof the State of California in effect

 

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from time to time (and Lender shall be entitled to mark any othercounterpart as a copy or duplicate).

 

17.                                 FraudulentConveyance.  If any Notwithstanding anything contained in thisAgreement to the contrary, Borrower agrees that if, but for the application ofthis Section, the Liabilities or any security interest granted hereunder wouldconstitute a preferential transfer under 11 U.S.C. § 547, a fraudulentconveyance under 11 U.S.C. § 548 (or any successor section) or a fraudulentconveyance or transfer under any state fraudulent conveyance or fraudulenttransfer law or similar law in effect from time to time (each a “FraudulentConveyance”), then the Liabilities and each affected security interest will beenforceable to the maximum extent possible without causing the Liabilities orany security interest to be a Fraudulent Conveyance, and shall be deemed tohave been automatically amended to carry out the intent of this Section.

 

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IN WITNESS WHEREOF, Borrower has executed thisAgreement as of the day and year written first above.

 

 
|                                          | **PROSTATE CENTERS OF AMERICA,  LLC** |
|-----------------------------------------------|---------------------------------------|
|                                          |                                  |   |
|                                          |                                  |   |
|                                          | By:                                   | /s/ J. Randall Tibitts |   |
|                                          |                                  |   |
|                                          | Its:                                  |  President |   |
|                                          |                                  |   |
|                                          |                                  |   |
| Accepted as of the date first  written above: |                                  |   |
|                                          |                                  |   |
| **NORTH AMERICAN SCIENTIFIC, INC.**           |                                  |   |
|                                          |                                  |   |
|                                          |                                  |   |
| By:                                           | /s/ L. Michael Cutrer                 |   |   |   |
|                                          |                                  |   |
| Its:                                          | Chief Executive Officer               |   |   |   |
|                                               |                                       |  |  |  |  |  |  |  |  |  |

 

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**SCHEDULE A**

 

Milestones

 
| ** **       | ** ** | ** **              | ** ** | **Milestones Requirements Prior To Distribution** | ** ** |
|------------------|------------|-------------------------|------------|---------------------------------------------------|------------|
| **Timeframe**    | ** ** | **$ Distribution** | ** ** | **# of ASCs****(1)**                              | ** ** | **Active ASCs****(2)** | ** ** | **Cumulative Cases****(3)** | ** ** |
|             |       |                    |       |                                              |       |   |   |   |   |
| Upon execution   |       | $                       | 350,000    |                                              | —     |   | — |   | — |   |
| January 15, 2004 |       | $                       | 350,000    |                                              | 6          |   | 2 |   | 30 |   |
| April 15, 2004   |       | $                       | 250,000    |                                              | 6          |   | 8 |   | 120 |   |
| July 15, 2004    |       | $                       | 250,000    |                                              | 6          |   | 14 |   | 350 |   |

 

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*Notes:*

(1)                                  Numberof ASCs, hospitals or other facilities that are actively involved in the set-upand implementation stages.

 

(2)                                  Thetotal number of active ASCs, hospitals or other facilities that are actuallyperforming brachytherapy cases.

 

(3)                                  Thetotal cumulative number of prostate brachytherapy cases completed.

 

Notwithstanding anything herein to the contrary,Borrower shall not be deemed to have complied with any milestone in the eventBorrower or TC2B incurs any negative variance in its financial performance asprojected in its financial statements or business plan greater than twentypercent (20%).

 

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**SCHEDULE B**

 

Use of Proceeds

 

1)  General Operating expenses – salaries, rent,travel, accounting, legal

 

2)  Downpayment/purchase of equipment – trucks, ultrasound, steppers, lasers

 

3)  Employeebenefits – health and dental

 

4)  Additionalpersonnel – VP of Operations, VP of Sales and Marketing, 3 techs.

 

5)  Marketing –Newsletter and website

 

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