Document:

<PAGE>

                                                                   July 28, 2000

J.S. Oshman and Co., Inc.
Oshman Sporting Goods Co., Alabama
Oshman Sporting Goods Co., Arizona
Oshman Sporting Goods Co., Arkansas
Oshman Sporting Goods Co., California
Oshman Sporting Goods Co., Colorado
Oshman Sporting Goods Co., Florida
Oshman Sporting Goods Co., Georgia
Oshman Sporting Goods Co., Hawaii
Oshman Sporting Goods Co., Kansas
Oshman Sporting Goods Co., Louisiana
Oshman Sporting Goods Co., Michigan
Oshman Sporting Goods Co., Minnesota
Oshman Sporting Goods Co., Missouri
Oshman Sporting Goods Co., Nevada
Oshman Sporting Goods Co., New Jersey
Oshman Sporting Goods Co., New Mexico
Oshman Sporting Goods Co., New York
Oshman Sporting Goods Co., Ohio
Oshman Sporting Goods Co., Oklahoma
Oshman Sporting Goods Co., Oregon
Oshman Sporting Goods Co., South Carolina
Oshman Sporting Goods Co., Tennessee
Oshman Sporting Goods Co., Texas
Oshman Sporting Goods Co., Utah
Oshman Sporting Goods Co., Washington
Oshman's Ski Skool, Inc.
Oshman's Sporting Goods, Inc. Services
(collectively, the "Companies")
                    ---------
2302 Maxwell Lane
Houston, TX

Gentlemen:

Reference is made to that certain Amended and Restated Financing Agreement dated
December 15, 1997 among the Companies and The CIT Group/Business Credit, Inc.
("CITBC"), as amended (the "Financing Agreement"). Capitalized terms used herein
  -----                     -------------------
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Financing Agreement.

<PAGE>

A.   Pursuant to mutual understanding, the Financing Agreement is hereby
amended, effective as of the date hereof, as follows:

1.   Section 1 of the Financing Agreement is hereby amended by deleting
     therefrom the definitions of "Fixed Rate", "Fixed Rate Loan", "Fixed Rate
                                   ----------    ---------------    ----------
     Breakage Price", "Fixed Rate Election Date", Fixed Rate Election Notice",
     --------------    ------------------------   --------------------------
     "Fixed Rate Election Period", Fixed Rate Maturity Date", "Seasonal
      -------------------------    ------------------------    --------
     Inventory Advances Rate Period", "Seasonal Overline Period", and "Treasury
     ------------------------------    ------------------------        --------
     Rate".
     ----

2.   Section 1 of the Financing Agreement is hereby amended by amending and
     restating the definition of "Availability Reserve" set forth therein to
                                  --------------------
     read as follows:

          "Availability Reserve" shall mean at any time of determination an
           --------------------
     amount equal to the sum of (i) the then undrawn amount of all outstanding
     Letters of Credit, plus (ii) a thirty-two and one-half percent (32.5%)
                        ----
     reserve against the cost of inventory located in the traditional stores
     (i.e., stores other than those having a tradename of "Oshman's Supersports"
     or "Supersports U.S.A.") scheduled to be closed during the fiscal year
     1997, such reserve to remain in place until the liquidation process is
     complete, plus (iii) the amount of all sales taxes collected by the
               ----
     Companies and not yet remitted to the authority to which such taxes are
     owed, the amount of which shall be determined by CITBC in its sole
     discretion."

3.   Section 1 of the Financing Agreement is hereby amended by amending and
     restating clause (o) in the definition of "Eligible Inventory" set forth
                                                ------------------
     therein to read as follows:

          "... (o) a reserve in the amount of up to $2,307,692.00, on a
     continuing basis in lieu of landlord waivers in favor of CITBC for leased
     retail stores."

4.   Paragraph 1 of Section 3 of the Financing Agreement is hereby amended and
     restated to read in its entirety as follows:

          "1.  CITBC agrees, subject to the terms and conditions of this
     Financing Agreement from time to time, and within x) the Availability and
     y) the Revolving Line of Credit, but subject to CITBC's right to make
     Overadvances, to make loans and advances to the respective Companies on a
     revolving basis, and subject to the limitations set forth herein, the
     Companies may borrow, repay and re-borrow Revolving Loans. Such loans and
     advances shall be in amounts up to the lesser of (such lesser amount, the
     "Borrowing Base"): (a) sixty-five percent (65%) of the aggregate value of
      --------------
     each of the Companies respective Eligible Inventory determined at cost, by
     the average cost inventory method, using a valuation on a first in, first
     out basis in accordance with GAAP (herein "FIFO") excluding freight and
                                                ----
     capitalized buying, handling and distribution costs, as reflected on the
     Companies' books and records or (b) thirty-eight percent (38%) of the
     aggregate value of each Company's respective Eligible Inventory determined
     at retail by the retail inventory method, using a FIFO valuation, excluding
     freight and capitalized buying, handling and distribution costs, as
     reflected on the Companies' books and records. All requests for loans and
     advances must be received by an officer of CITBC no later than 2:00 p.m.
     New York

                                       2
<PAGE>

     time on the date on which such loans and advances are required. Should
     CITBC for any reason honor requests for advances in excess of the
     limitations set forth herein, such advances shall be considered
     "Overadvances" and shall be made in CITBC's sole discretion, subject to any
      ------------
     additional terms CITBC deems necessary. As used in this Financing
     Agreement, "Revolving Line of Credit" shall mean the commitment of CITBC to
                 ------------------------
     make loans and advances and issue Letter of Credit Guaranties, all pursuant
     to and in accordance with Section 3 and 4 of this Financing Agreement, to
                               ---------     -
     each of the Companies in the aggregate amount not to exceed $65,000,000.00.
     It is understood and agreed by the Companies that if the aggregate amount
     of such loans and advances shall at any time exceed the least of x) the
     Availability, y) the Revolving Line of Credit or z) the Borrowing Base,
     then the existence at any time of such excess shall be deemed an Event of
     Default and, without limiting any of CITBC's other rights and remedies
     under this Financing Agreement or otherwise, the amount of such excess
     shall be due and payable immediately upon demand."

5.   Paragraph 1 of Section 7 of the Financing Agreement is hereby amended and
     -----------    ---------
     restated to read in its entirety as follows:

     "1.  (A) Interest on the Revolving Loans shall be payable monthly as of the
     end of each month or with respect to any Libor Loan, at the end of the
     Libor Period with respect to any such loan, and shall be an amount equal to
     (a) The Chase Manhattan Bank Rate, on a per annum basis, on the average of
     the net balances owing by all of the Companies to CITBC in the Collective
     Account at the close of each day during such month on balances other than
     Libor Loans and (b) two and one-eighth percent (2.125%) plus Libor on each
                                                             ----
     Libor Loan as to any then outstanding Revolving Loans which is a Libor
     Loan, on a per annum basis, on the average of the net balances of each such
     Libor Loans owing by the Companies to CITBC in the Collective Account at
     the close of each day during such month for the Libor Period applicable
     thereto; but in no event shall the interest charged hereunder exceed the
     Maximum Legal Rate.

          The Companies may elect to use Libor as to any then outstanding
     Revolving Loans provided (i) there is then no Default or Event of Default,
     (ii) the Companies have so advised CITBC of their election to use Libor,
     the principal amount of such Libor Loan and the Libor Period applicable
     thereto is selected no later than two (2) business days preceding the first
     business day of a Libor Period and (iii) the election and Libor shall be
     effective, provided, there is then no Default or Event of Default, on the
                --------
     third business day following said notice. The Libor elections must be for
     integral multiples of $1,000,000.00 and the Companies shall, for the period
     of this Financing Agreement ending March 1, 1998, pay CITBC a non-
     refundable Libor Processing Fee upon the effective date of each Libor Loan,
     provided, however, that there shall be no such Libor Processing Fee for the
     --------  -------
     first four (4) Libor Loans in any calendar year which have a three (3)
     month Libor Period.

          If no such election is timely made or can be made with respect to the
     Libor Loans, or Libor can not be determined by CITBC (or any participant or
     co-lender upon prior written notice by such participants or co-lender to
     CITBC and the Companies), then CITBC shall use The Chase Manhattan Bank
     Rate to compute interest. In the event of any change in The Chase Manhattan
     Bank Rate, the rate under clause (a) above shall change, as of the first of
                               ----------

                                       3
<PAGE>

the month following any change, so as to remain equal to The Chase Manhattan
Bank Rate. The rates hereunder shall be calculated based on a three hundred
sixty (360) day year for actual days elapsed. CITBC shall be entitled to charge
the Collective Account at the rate provided for herein when due until all
Obligations have been paid in full.

     (B) Subject to compliance with the conditions set forth in this
subparagraph (B), the Companies shall be entitled to interest rate reductions
(each an "Interest Rate Reduction") as outlined below:
          -----------------------

     If the ratio of all of the Companies' Average Loan Balances to EBITDA: (i)
is equal to or less than the Companies' financial projections with respect to
any fiscal year, as indicated in projections delivered to CITBC pursuant to
Subsection (d) of Paragraph 7 of Section 6 (herein "Financial Projections") and
--------------    ------------------------          ---------------------
the interest spread for the prior fiscal year has been increased pursuant to
clause (ii) below, then the interest spread, if any, over (a) The Chase
-----------
Manhattan Bank Rate shall be decreased by three-eighths of one percent (.375%),
and (b) the Libor rate shall be decreased by three-eighths of one percent
(.375%); and (ii) is greater than the Companies' Financial Projections for any
fiscal year and the spread for the prior fiscal year has been computed in
accordance with Clause (A) hereinabove, then the then interest spread, if any,
                ----------
over (a) The Chase Manhattan Bank Rate shall be increased by three-eighths of
one percent (.375%), and (b) the Libor rate shall be increased by three-eighths
of one percent (.375%) (each increase being an "Interest Rate Increase").
                                                ----------------------
"Average Loan Balances" as used herein shall mean the average of the net
 ---------------------
balances owing by all the Companies to CITBC in the Collective Account as of the
last day of each month for the twelve (12) months in the fiscal year then ended.

In addition to the foregoing requirements, each Interest Rate Reduction is
subject to the Companies compliance with each of the following conditions (i)
through (v) below and the effective date of each Interest Rate Increase is
governed by (iii) and (iv) below:

(i)     Timely receipt by CITBC of the Companies' audited Consolidated Balance
        Sheet and income statement (the "Financial Statements") in accordance
                                         --------------------
        with the provisions of paragraph 7 of Section 6;
(ii)    The absence of any Default or Event of Default;
(iii)   As to the spread over The Chase Manhattan Bank Rate, and any Interest
        Rate Reduction or the Interest Rate Increase, any such decreases or
        increases will be effective on the first day of the month following
        CITBC's receipt of the Financial Statements with respect to the fiscal
        year which the Companies are determined to be eligible for such Interest
        Rate Reduction or such Interest Rate Increase;
(iv)    As to the spread over the Libor rate, and any Interest Rate Reduction or
        Interest Rate Increase with respect thereto, as the case may be, any
        such decreases or increases shall only be applicable to a Libor Loan
        requested and commencing on or after CITBC's receipt of the applicable
        Financial Statements, and will be effective on the first day of any such
        new Libor Period; and
(v)     In no event shall the total of all Interest Rate Reductions or Interest
        Rate Increases hereunder on the Revolving Loan reduce or increase the
        applicable rates by more than three-eighths of one percent (.375%) from
        those rates then in effect.

                                       4

<PAGE>

          For purposes of clarification of the foregoing: 1) in no event shall
     the interest rate applicable to (y) Revolving Loans (other than any Libor
     Loan) be less than The Chase Manhattan Bank Rate, and (z) Libor Loans be
     less than the Libor rate, plus two and one-eighth percent (2.125%) per
                               ----
     annum; and 2) nothing contained in the preceding subparagraph (v) is
                                                      ----------------
     intended to modify the provisions of paragraph 2 of Section 9 providing for
                                          -----------    ---------
     the right of CITBC to charge the Default Rate of Interest as set forth
     therein."

6.   Paragraph 9 of Section 7 of the Financing Agreement is hereby amended and
     -----------    ---------
     restated to read in its entirety as follows:

          "9.   The Companies jointly and severally agree to pay to CITBC, upon
     the request of CITBC, such amount or amounts as shall compensate CITBC (or
     any of its participants or co-lenders) for any loss, costs or expenses
     incurred by CITBC (as reasonably determined by CITBC) as a result of: (a)
     any payment or prepayment on a date other than the last day of a Libor
     Period for such Libor Loan, or (b) any failure of the Companies to borrow a
     Libor Loan on the date for such borrowing specified in the relevant notice;
     such compensation to include, without limitation, with respect to Libor
     Loans, an amount equal to any loss or expense suffered by CITBC (or any of
     its participants or co-lenders) during the period from the date of receipt
     of such payment or prepayment or the date of such failure to borrow to the
     last day of such Libor Period if the rate of interest obtained by CITBC
     upon the reemployment of an amount of funds equal to the amount of such
     payment, prepayment or failure to borrow is less than the rate of interest
     applicable to such Libor Loan for such Libor Period. The determination by
     CITBC of the amount of any such loss or expense, when set forth in a
     written notice to the Companies, containing CITBC's calculations hereon in
     reasonable detail, shall be conclusive on the Companies, in the absence of
     manifest error."

7.   Section 10 shall be amended by deleting the last sentence of such section.
     ----------

8.   Exhibit A to the Financing Agreement shall be amended, restated and
     ---------
     replaced in form of the Availability Report attached hereto as Annex I
     hereto.

B.   Each Guarantor ratifies, approves and reaffirms all of its obligations
under its Guarantee and acknowledges that its Guarantee is not subject to any
claims, defenses or offsets. Each Guarantor also acknowledges that the term
Obligations shall include, without limitation, all indebtedness, liability or
other obligations, as modified by this amendment, of the Companies jointly and
severally. Furthermore, each Guarantor hereby agrees that nothing contained in
this Financing Agreement, as hereby amended, or any other Loan Documents shall
adversely affect any right or remedy of CITBC under any Guarantee and that the
execution and delivery of this amendment and the other Loan Documents shall in
no way change or modify its obligations as guarantor, debtor, pledgor, assignor,
obligor and/or guarantor under the its Guarantee except as specifically provided
in this Part B and shall not constitute a waiver by CITBC of any of its rights
against such Guarantor.

C.   The terms and provisions set forth in this amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Financing
Agreement and the other Loan Documents, and, except as expressly modified and
superseded by this amendment, the terms and provisions of the Financing
Agreement and the other Loan Documents are ratified and confirmed

                                       5
<PAGE>

and shall continue in full force and effect. The Companies and CITBC agree that
the Financing Agreement and the other Loan Documents, as amended hereby, shall
continue to be legal, valid, binding and enforceable in accordance with their
respective terms.

D.   The Companies hereby represent and warrant to CITBC that (a) the execution,
delivery and performance of this amendment and any and all other Loan Documents
executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of each of the Companies and will not
violate the Articles/Certificate of Incorporation or Bylaws of the Companies;
(b) the representations and warranties contained in the Financing Agreement, as
amended hereby, and any other Loan Document are true and correct on and as of
the date hereof and on and as of the date of execution hereof as though made on
and as of each such date; (c) no Default or Event of Default under the Financing
Agreement, as amended hereby, has occurred and is continuing, unless such
Default or Event of Default has been specifically waived in writing by CITBC;
(d) the Companies are in full compliance with all covenants and agreements
contained in the Financing Agreement and the other Loan Documents, as amended
hereby; and (e) the Companies have not amended their respective
Articles/Certificate of Incorporation or Bylaws since the date of the Financing
Agreement.

E.   The Companies shall pay to CITBC a $25,000 fee in connection with the
financial accommodations provided by CITBC in connection with this amendment.

Except as otherwise provided herein, no other change in any of the terms or
provisions of the Financing Agreement is intended or implied. If the foregoing
is in accordance with your understanding, please sign and return to us the
enclosed copy of this letter to so indicate.

                                           Very truly yours,

                                           THE CIT GROUP/BUSINESS CREDIT, INC.

                                           By: /s/ Eric Maloy
                                               --------------------------------
-                                           Name: Eric Maloy
                                                -------------------------------
                                           Title: AVP/AE
                                                 -------------------------------

                                       6
<PAGE>

Read and Agreed to:

J.S. OSHMAN AND CO., INC.
OSHMAN SPORTING GOODS CO., ALABAMA
OSHMAN SPORTING GOODS CO., ARIZONA
OSHMAN SPORTING GOODS CO., ARKANSAS
OSHMAN SPORTING GOODS CO., CALIFORNIA
OSHMAN SPORTING GOODS CO., COLORADO
OSHMAN SPORTING GOODS CO., FLORIDA
OSHMAN SPORTING GOODS CO., GEORGIA
OSHMAN SPORTING GOODS CO., HAWAII
OSHMAN SPORTING GOODS CO., KANSAS
OSHMAN SPORTING GOODS CO., LOUISIANA
OSHMAN SPORTING GOODS CO., MICHIGAN
OSHMAN SPORTING GOODS CO., MINNESOTA
OSHMAN SPORTING GOODS CO., MISSOURI
OSHMAN SPORTING GOODS CO., NEVADA
OSHMAN SPORTING GOODS CO., NEW JERSEY
OSHMAN SPORTING GOODS CO., NEW MEXICO
OSHMAN SPORTING GOODS CO., NEW YORK
OSHMAN SPORTING GOODS CO., OHIO
OSHMAN SPORTING GOODS CO., OKLAHOMA
OSHMAN SPORTING GOODS CO., OREGON
OSHMAN SPORTING GOODS CO., SOUTH CAROLINA
OSHMAN SPORTING GOODS CO., TENNESSEE
OSHMAN SPORTING GOODS CO., TEXAS
OSHMAN SPORTING GOODS CO., UTAH
OSHMAN SPORTING GOODS CO., WASHINGTON
OSHMAN'S SKI SKOOL, INC.
OSHMAN'S SPORTING GOODS, INC.-SERVICES

By:  /s/ Alvin N. Lubetkin
    ------------------------------------
Name:  Alvin N. Lubetkin
Title: Vice Chairman, President & C.E.O.
       (of each of the above Companies)

OSHMAN'S SPORTING GOODS, INC.,
in its capacity as Guarantor hereby acknowledges
and consents to the foregoing amendment

By:  /s/ Alvin N. Lubetkin
    ------------------------------------
Name:  Alvin N. Lubetkin
Title: Vice Chairman, President & C.E.O.

                                       7
<PAGE>

                                    ANNEX I

                          FORM OF AVAILABILITY REPORT
                          ---------------------------

                                [See attached.]
<PAGE>

                        AVAILABILITY REPORT #__________
                              Date _____________

To:       The CIT Group/Business Credit, Inc.
          Two Lincoln Centre, Suite 200
          5420 LBJ Freeway
          Dallas, Texas 75240
          972-455-1690

<TABLE>
<S>                                                                                <C>                 <C>
1.   ELIGIBLE INVENTORY
     ------------------
     A.   COST INVENTORY
          Per Schedule Attached Dated _____________                                                    $________________
          Per Confirmation No. _______ Dated __________

     Less Reserves:
          POS Markdown Reserve                                                     $________________
          Seasonal Reserve - Hard Markdowns                                        $________________
          Slow Moving/Obsolete Reserve                                             $________________
          Outlet Inventory                                                         $________________
          Accrued Shrinkage                                                        $________________
          Highly Seasonal Goods                                                    $________________
          Landlord Waivers                                                         $________________
          Other (Off-site ski sales and demo racquets)                             $________________
          Return to Vendor Merchandise                                             $________________
          Total Reserves                                                           $________________
                                                                                                       $________________
          Net Eligible Cost Inventory
          Rate of Advance:  65%                                                                        $________________

     B.   RETAIL INVENTORY
          Per Schedule Attached Dated __________                                   $________________
          Per Confirmation No. ______ Dated _________
          Less Reserves:
               Total Cost Ineligibles -  (1-IMU%)                                  $________________
          Net Eligible Retail Inventory                                                                $________________
          Rate of Advance:  38%                                                                        $________________

2.   INVENTORY COLLATERAL VALUE
     --------------------------
     A.   The Lesser of 65% of cost or 38% of Retail                               $________________
     B.   The Lesser of (A) of $65,000,000 Line Cap                                $________________
          Total Inventory Collateral Value                                                             $________________

3.   LOAN PLUS LETTER OF CREDIT EXPOSURE AND AVAILABILITY RESERVE
     ------------------------------------------------------------
          Standby Letters of Credit                                                                    $________________
          Documentary Letters of Credit                                                                $________________
          Availability Reserve for store closings, if applicable                                       $________________
          Availability Reserve for sales tax liabilities, if applicable                                $________________
            Loan Balance Brought Forward                                           $________________
                      Less: Cash Received                                          $________________
                                Sub Total                                          $________________
                  Plus:  Other Additions                                           $________________
                            Advances Since Last Report                             $________________
          New Loan Balance                                                                             $________________
                        NET AVAILABLE PER OUR BOOKS                                                    $________________
                        ---------------------------
</TABLE>

For the purpose of inducing The CIT Group/Business Credit, Inc. to grant loans
to us under the Financing Agreement, we hereby certify that in our judgement the
above stated cost and retail Inventory amounts are substantially true and
correct as of this report.

                                    ____________________________________________
                                              (Client's Name)

                                    By:  _______________________________________
                                              (Authorized Signature)<PAGE>

                                                                    EXHIBIT 10.1

                               FIRST AMENDMENT TO

                             EXCLUSIVE MARKETING AND

                             DISTRIBUTION AGREEMENT

                                     BETWEEN

                         NORTH AMERICAN SCIENTIFIC, INC.

                                       AND

                               MENTOR CORPORATION

<PAGE>

                               FIRST AMENDMENT TO
                 EXCLUSIVE MARKETING AND DISTRIBUTION AGREEMENT
                                     BETWEEN
                         NORTH AMERICAN SCIENTIFIC, INC.
                                       AND
                               MENTOR CORPORATION

     THIS FIRST AMENDMENT, dated for reference purposes as of February 24, 1999,
pertains to that certain Exclusive Marketing and Distribution Agreement (the
"Agreement"), dated for reference purposes as of June 16, 1997, between NORTH
AMERICAN SCIENTIFIC, INC., a Delaware corporation ("NAMS") and MENTOR
CORPORATION, a Minnesota corporation ("MENTOR") and is made with reference to
the following facts:

     RECITALS

     A.   Sections 1.28 and 2.3 of the Agreement contemplate that, if and when
Pd-103 Sources become available, the Products covered by the Agreement will
include Pd-103 Sources subject to the agreement of the parties with respect to
certain terms related thereto.

     B.   NAMS has now obtained 510-K pre-marketing approval from the FDA to
market and sell Pd-103 Sources; and

     C.   Section 7.1.4 of the Agreement contemplates that, if NAMS requires
additional capital to create the manufacturing capacity necessary to produce
Pd-103 Sources, then NAMS shall offer MENTOR the opportunity to provide such
additional required capital on substantially the same terms and conditions as
the Agreement.

     D.   NAMS has estimated that the present capital cost required to create a
manufacturing capacity for ten thousand (10,000) Pd-103 Sources per week is
$1,500,000.

     E.   NAMS also estimates that, if an acceptable commercial supply, as
determined by NAMS, of the Pd-103 isotope (the radioactive source incorporated
into the Pd0-103 Source) cannot be obtained, it would presently require an
additional $2,500,000 for the purchase of linear accelerators that would enable
NAMS to produce the Pd-103 isotope for itself.

     F.   MENTOR is willing to supply so much of the capital as is necessary to
satisfy these capital requirements that NAMS is unable or unwilling to supply
from its own resources in order to preserve the exclusive marketing and
distribution rights for the Pd-103 Sources as contemplated by Section 7.1.4.A.
of the Agreement.

                                   AGREEMENTS

     NOW, THEREFORE, the parties hereto, intending to be legally bound, do
hereby agree as follows:

                 FIRST AMENDMENT TO MARKETING AGREEMENT: PAGE 1

<PAGE>

1.   DUTY OF NAMS TO CREATE PRODUCTION CAPACITY

     1.1  NAMS covenants and agrees that as soon as practicable after the
execution of this Amendment, NAMS shall develop and maintain the production
capacity (other than the capacity to produce the Pd-103 isotope) necessary to
produce ten thousand (10,000) Pd-103 Sources per week (the "Development
Project").

     1.2  Any subsequent increases in production capacity that are proposed to
be made with capital funding to be provided by MENTOR shall made in increments
of 10,000 Sources per week.

2.   FUNDING OF DEVELOPMENT COSTS

     2.1  FUNDING BY NAMS. NAMS shall have the right, but not the obligation, to
fund all or any portion of the costs of the Development Project, including any
incremental increases in production capacity.

     2.2  FUNDING BY MENTOR. MENTOR shall have the obligation to supply to NAMS
any capital required to complete the Development Project (including the capacity
to produce the Pd-103 isotope if NAMS determines to do so) that NAMS is
unwilling or unable to contribute by purchasing shares of the common capital
stock of NAMS (the "Shares"), generally in accordance with the provisions of the
Stock Purchase Agreement between MENTOR and NAMS dated for reference purposes as
of June 16, 1997 and executed by NAMS and MENTOR simultaneously with their
execution of the Agreement (the "Stock Purchase Agreement"). Should MENTOR
provide all or a part of the additional capital required to fund the Development
Project, then:

          2.2.1 PURCHASE OF CAPITAL STOCK. The additional capital contributed by
MENTOR hereunder shall be credited against the purchase price for shares of the
Common Stock of NAMS at a price that is equal to one hundred ten percent (110%)
of the average closing price of the shares of the common stock of NAMS as
reported in the Western Edition of the WALL STREET JOURNAL for the twenty (20)
trading days preceding the date on which NAMS gives a written request to a
MENTOR for such additional capital pursuant to Section 3.3, below.

          2.2.2 WARRANTIES OF MENTOR. MENTOR shall be deemed to have made all of
the warranties and representations to NAMS set forth in Section 7 of the Stock
Purchase Agreement which shall be incorporated herein by reference as if made on
the date on which the Shares are issued to MENTOR.

          2.2.3 WARRANTIES OF NAMS. NAMS shall be deemed to have made all of the
warranties and representations to MENTOR set forth in Section 6 of the Stock
Purchase Agreement, other than those warranties and representations contained in
Sections 6.3, 6.5, and Sections 6.11.1 through 6.11.3 and all such warranties
and representations not expressly excluded by this Section 2.2.4 are
incorporated herein by reference as if made on the date on which the Shares are
issued to MENTOR.

                 FIRST AMENDMENT TO MARKETING AGREEMENT: PAGE 2
<PAGE>

3.   DEVELOPMENT PROGRAM

     Should NAMS request MENTOR to provide all or a part of the additional
capital required to fund the Development Project, then:

     3.1  PREPARATION AND APPROVAL OF BUDGET. NAMS shall first prepare and
submit to MENTOR in writing a development plan (the "Development Plan")
containing (a) a line-item budget setting forth the estimated costs of the
Development Project (the "Project Budget") and (b) a schedule of milestones
reflecting the period of time over which the Development Project will be carried
out (the "Development Program").

     3.2  COORDINATION WITH MENTOR. NAMS shall consult with MENTOR in the
preparation of the Development Program, and shall give reasonable consideration
to suggestions and requests made by MENTOR in connection therewith, but if NAMS
and MENTOR are unable to agree with respect to the budget, milestones or payment
schedules for the Development Program, then the decisions of NAMS shall be final
and binding on both parties.

     3.3  TIME OF CONTRIBUTION. MENTOR shall contribute any capital required to
be contributed by it hereunder in cash or immediately available funds within
thirty (30) days after the date on which the Project Budget has been submitted
in accordance with Section 3.1, above, and NAMS shall issue and deliver to
MENTOR share certificates evidencing the Shares being purchased by MENTOR
concurrently with NAMS' receipt of payment therefor.

4.   TERMS SHEET: PD-103 SOURCES

     There is attached to the Agreement as Schedule 2 a Terms Sheet for Pd-103
Sources. NAMS shall supply the Pd-103 Sources to MENTOR, and MENTOR shall have
the exclusive right to market and distribute the Pd-103 Sources in accordance
with the terms and conditions of the Agreement and the Terms Sheet attached as
Schedule 2 to this First Amendment to the Agreement.

5.   FULL FORCE AND EFFECT

     Except as expressly modified by the provisions of this First Amendment the
terms and conditions of the Agreement shall continue in full force and effect.

                    (Signatures appear on the following page)

                 FIRST AMENDMENT TO MARKETING AGREEMENT: PAGE 3

<PAGE>

     IN WITNESS WHEREOF, both parties have executed this First Amendment to
Exclusive Marketing and Distribution Agreement to be duly executed on the dates
set forth below.

           NAMS:                                          MENTOR:

Date:   February 24, 1999                        Date: February 24, 1999

NORTH AMERICAN SCIENTIFIC INC.                   MENTOR CORPORATION,
a Delaware corporation                           a Minnesota corporation

By:  /s/ MICHAEL CUTRER                          By:   /s/ CHRISTOPHER CONWAY
   ---------------------------                      -------------------------
     Michael Currer                                 Christopher J. Conway
     Its President                                  Its Chief Executive Officer

ADDRESS FOR NOTICES:                             ADDRESS FOR NOTICES:
North American Scientific, Inc.                  Mentor Corporation
20200 Sunburst Street                            5425 Hollister Avenue
Chatsworth, California 91311                     Santa Barbara, California 93111
PH:    (818) 734-8600                            PH:  (805) 681-6000
FAX:   (818) 734-8607                            FAX: (805) 967-3362

                 FIRST AMENDMENT TO MARKETING AGREEMENT: PAGE 4

<PAGE>

          *CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
                   BEEN FILED SEPARATELY WITH THE COMMISSION.

                                   SCHEDULE 2

                                   TERMS SHEET
                              (NAMS Pd-103 Sources)

                                   SCHEDULE 2

                                   TERMS SHEET
                              (NAMS Pd-103 Sources)

1.   DEFINITIONS. Capitalized words not defined in this Schedule but which are
defined in the Exclusive Marketing and Distribution Agreement (the "Agreement")
shall have the meanings ascribed to them in the Agreement. As used in this
schedule, the following words and phrases shall have the meanings set forth
below:

     1.1  AT-RISK INVENTORY. Units of Pd-103 Sources that have been manufactured
without reference to a Committed Purchase Order and are therefore at risk of
decaying before they are sold.

     1.2  BASE PRICE. The minimum price per unit for Pd-103 seeds based on the
weekly shipping volume, computed in accordance with the following table:

                  NUMBER OF UNITS
                  SHIPPED PER WEEK                            PRICE PER UNIT

                        [*]                                       [*]

     1.2  COMMENCEMENT DATE. January 1, 1999.

     1.3  COMMITTED PURCHASE ORDERS.Customer orders received and accepted by
MENTOR and provided to NAMS at least four (4) weeks prior to the scheduled ship
date, including standing orders contemplating regular or recurring shipments on
specified days or at specified intervals.

     1.4  DIRECT PRODUCTION COSTS. The direct costs of labor employed (based on
labor hours at the then prevailing standard rates) and amounts paid to
independent contractors and/or suppliers for supplies, materials, components and
services consumed or utilized in processing, inspecting and testing the Product
(including payroll taxes and employee benefits for direct labor), computed on a
per-unit basis exclusive of any overhead allocations, general or administrative
expense, or other indirect expense.

     1.5  FIELD EVALUATION PERIOD. The period between the Commencement Date and
the Launch Date.

     1.6  GROSS MARGIN. In the case of NAMS, the difference between the Transfer
Price per unit and the Direct Production Cost per unit. In the case of MENTOR,
the difference between the Transfer Price per unit and the Net Selling Price per
unit.

                               SCHEDULE 2: PAGE 1

<PAGE>

          *CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
                   BEEN FILED SEPARATELY WITH THE COMMISSION.

     1.7  LAUNCH DATE. April 1, 1999, or such later date as is mutually agreed
to by the parties in writing.

     1.8  MARKET SHARE. The quotient obtained at any given time by dividing
MENTOR's weekly sales rate by the Market Size.

     1.9  MARKET SIZE. The total number of Pd-103 seeds sold in the Geographic
Market Area per week, to be determined by [*].

     1.10 TARGET MARKET SHARE. The Market Share that must be achieved for the
month preceding a given date, and maintained as a minimum thereafter in order
for MENTOR to maintain its exclusive rights with respect to the Pd-103 Sources.

2.   TRANSFER PRICE PER UNIT. [*].

3.   FIELD EVALUATION AND PRODUCT LAUNCH

    3.1  FIELD EVALUATION PERIOD. MENTOR and NAMS agree that the Pd-103 sources
manufactured by NAMS will require field evaluation in clinical settings by
customers in order to obtain customer approvals and commitments to ongoing
purchases. Physicians will need to utilize the product in one or more patient
procedures in order to evaluate its suitability for their own practice. During
the Field Evaluation Period, NAMS will provide (a) reasonable technical
assistance and information including the relevant product performance
specifications and calibration references, and (b) sufficient quantities of
Pd-103 seeds at a price equal to or above NAMS' average cost per seed ( unless a
different price is agreed upon in writing) to allow the scheduling of patient
procedures, in order to permit reasonable evaluation by prospective customers.

          3.1.1 Field Evaluation Period will begin on the Commencement Date and
will end on the Launch Date.

          3.1.2 The parties contemplate that evaluations will be performed (a)
on groups of patients of varying sizes and (b) on not more than twenty (20)
patients in the aggregate.

          3.1.3 If NAMS is unable to supply sufficient quantities of Pd-103
seeds to allow the scheduling of patient procedures prior to the Launch Date,
then the Launch Date shall be extended for a period of time equal to any period
during which NAMS is unable to supply sufficient quantities of Pd-103 seeds to
permit reasonable field evaluation.

     3.2  PRODUCT LAUNCH. Beginning on the Launch Date, and subject to its
receipt of adequate prior notice, NAMS shall have the capacity to supply MENTOR
with up to 1,000 Pd-103 Sources per week. The Launch Date shall be extended to a
date mutually agreeable to the parties if on April 1, 1999 NAMS is unable to
begin producing Pd-103 Sources at a level of 1,000 seeds per week.

                               SCHEDULE 2: PAGE 2

<PAGE>

          *CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
                   BEEN FILED SEPARATELY WITH THE COMMISSION.

4.   TARGET MARKET SHARE AND SALES COMMITMENTS

     4.1  MENTOR agrees to use its commercially reasonable best efforts on a
continuing basis to grow Market Share rapidly, notwithstanding that MENTOR may
have already attained its Target Market Share. As a requirement for maintaining
exclusive marketing rights in each Geographic Market Area. MENTOR shall achieve
the minimum Target Market Share percentages set forth below.

            DATE                               TARGET MARKET SHARE

            [*]                                [*]

     4.2  Beginning on July 1, 1999, MENTOR and NAMS shall meet on a quarterly
basis within five (5) weeks after the beginning of each calendar quarter to
determine the Market Size by reviewing the relevant publicly available financial
information, and to evaluate whether MENTOR has achieved or maintained the
Target Market Share. If a quarterly review demonstrates that MENTOR's sales are
below the Target Market Share in a Geographic Market Area, then MENTOR must
attain the Target Market Share by the end of the calendar quarter immediately
preceding the next quarterly review, or forfeit its exclusive marketing rights
in that Geographic Market Area. MENTOR will retain the right to market on a
non-exclusive basis.

     4.3  If NAMS becomes aware of an opportunity to sell Pd-103 sources in a
Geographic Market Area outside the United States that is not being served by
MENTOR, then NAMS will notify MENTOR in writing of the opportunity and the
identity of the Customer ( including any Customer who proposes to distribute the
Product in such Geographic Area).

          4.3.1 NAMS will have the right to sell directly to such Customer if
MENTOR fails to do so within ninety (90) days following notification of the
opportunity except that, if the Customer is a Person who proposes to distribute
the Product in such Geographic Market Area, NAMS shall not be entitled and
MENTOR shall not be obligated to sell the Product to such Customer if MENTOR
commences sales of the Product in such Geographic Market Area within such ninety
(90) day period. Should MENTOR begin making sales in such Geographic, then
MENTOR shall use commercially reasonable best efforts on a continuing basis to
grow Market Share rapidly, notwithstanding that MENTOR may have already attained
its Target Market Share.

          4.3.2 If NAMS becomes entitled to begin making sales in such
Geographic Market Area either directly or through another distributor pursuant
to this Section 4.3, then MENTOR will retain the right to initiate and maintain
marketing efforts in the Geographic Market Area on a non-exclusive basis. NAMS
agrees not to undercut MENTOR's marketing efforts by offering or selling Pd-103
Sources to end-user Customers at prices below MENTOR's Net Selling Price in the
Geographic Market Area or to distributors at prices below Mentor's Transfer
Price.

                               SCHEDULE 2: PAGE 3

<PAGE>

          *CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
                   BEEN FILED SEPARATELY WITH THE COMMISSION.

5.   ADVISORY FORECAST

     MENTOR will use its best efforts to provide an accurate rolling three month
forecast by the 15th of each month following the launch of Pd-103 Seeds, to
serve as a ton-binding "advisory" of potential future demand.

6.   SHARED COSTS AND RISKS

     Sales of Pd-103 Sources shall be in two categories: (a) Committed Purchase
Orders and (b) At-Risk Inventory.

     6.1  Both parties recognize the potential for gaining additional customers
by making available a limited number of Pd-103 Sources which have not been
assigned to Committed Purchase Orders.

     6.2  At-Risk Inventory will be manufactured only in quantities both parties
agree to in writing prior to each production run. [*]. NAMS shall determine and
shall advise MENTOR of its Direct Production Costs in writing at the time it is
proposed to produce such At-Risk Inventory. [*]

     6.3  Both NAMS and MENTOR recognize that events outside their control may
result in the cancellation of Committed Purchase Orders, or the failure of
customers to pay for products ordered and received but not used by them. Both
parties agree to share equally in the costs of these events. Costs will be
shared as follows:

          6.3.1 If a Customer (a) refuses to accept delivery of a Product
shipped under a Committed Purchase Order, or (b) cancels a Committed Purchase
Order with less than four weeks notice, or (c) refuses to accept responsibility
for payment for a Product that was shipped but not used and was returned to NAMS
unopened, then in any such case MENTOR shall not be obligated to pay the Fixed
Price for the Product, but:

               A.   MENTOR will pay to NAMS one-half of the Direct Production
Costs as defined in Section 1.4, above; and

               B.   MENTOR will also endeavor to collect a reasonable
"restocking charge" from the Customer in an amount to be agreed upon by NAMS and
MENTOR prior to the Launch Date and will remit to NAMS one-half of any
restocking charges so collected.

          6.3.2 Nothing in this Section 6.3 is limited to relieve MENTOR of the
risk of collection or the duty to pay the Transfer Price for Pd-103 Sources
shipped to and opened by the Customer

7.   KITS

     Should MENTOR elect to market and distribute the Pd-103 Product in the form
of kits containing both the Product and/or additional devices or materials
intended to facilitate the use of the Product, then the Transfer Price for the
Pd-103 sources shall be [*] and the Transfer Price for any additional devices,
materials or services supplied by NAMS for the kits shall be [*].

                               SCHEDULE 2: PAGE 4
<PAGE>

          *CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
                   BEEN FILED SEPARATELY WITH THE COMMISSION.

8.   TERM

     The term of MENTOR's exclusive distribution rights shall expire on February
1, 2003, subject to the right of MENTOR to renew the term for an additional
three (3) years as provided by Section 4.2 of the Agreement.

9.   FREEDOM TO EXIT MARKET

     9.1  If NAMS' average Gross Margin on Pd-103 Sources falls below [*] for a
period of more than [*] months, then:

          9.1.1 NAMS shall be entitled, at its election, either.

               A.   To discontinue supplying the Pd-103 Sources to MENTOR and to
begin making direct sales to Customers (other than distributors) by giving
MENTOR not less than sixty (60) days prior written notice of its intention to do
so and agreeing to pay MENTOR during the [*] period following the date on which
it discontinues supplying Pd-103 Sources to MENTOR a royalty in an amount
computed in accordance with the following schedule; but shall not extend beyond
2/1/2006.

<TABLE>
<CAPTION>

PERIOD DURING WHICH ROYALTY IS PAID                                   AMOUNT OF ROYALTY
<S>                                                 <C>
First [*] months following discontinuation           [*] of Net Selling Price per unit received by NAMS

Next [*] month period                                [*] of Net Selling Price per unit received by NAMS

Next [*] month period                                [*] of Net Selling Price per unit received by NAMS

Next [*] month period                                [*] of Net Selling Price per unit received by NAMS

</TABLE>

               B.   To cease manufacturing Pd-103 Sources and exit the market
upon sixty (60) days prior written notice to MENTOR of its intention to do so.

          9.1.2 If NAMS exercises its right to discontinue supplying the Pd-103
Product to MENTOR and to make direct sales to Customers instead, then:

               A.   The royalty payable pursuant to Section 9.1.1, above, shall
be paid [*], in arrears, within thirty (30) days after the end of each [*], and
shall be accompanied by a royalty report setting forth as of as of the last day
of such calendar quarter for (a) the number of units sold since the last report
and cumulatively from the date on which NAMS first began making direct sales to
Customers, (b) the Net Selling Price of each such unit, and (c) the aggregate
royalties paid with respect to such sales, including the royalty payment being
made at the time of such report. NAMS shall keep books and records in sufficient
detail to permit the computation and verification of the royalty payable by NAMS
hereunder and shall make all such books and records available for inspection and
copying by MENTOR at reasonable times and intervals during regular business
hours; and

               B.   MENTOR shall not directly or indirectly procure from another
supplier or manufacture or sell Pd-103 Sources during the [*] royalty period.

          9.1.3 If NAMS exercise its right to discontinue manufacturing Pd-103
Seeds, then (a) NAMS shall not thereafter manufacture Pd-103 Seeds for a period
of [*] from the date on which it discontinues supplying the Pd-103 Product to
MENTOR pursuant to this Agreement, and (b) MENTOR shall have the right to
procure Pd-103 Sources from any other supplier and (c) MENTOR shall pay NAMS a
royalty of [*] of MENTOR's Net Selling Price for Pd-103 Sources sold by MENTOR
during the 365 day period following the date on which NAMS discontinued
supplying the Pd-103 Product to MENTOR, and (c) all other terms of this
Agreement will remain in effect.

                               SCHEDULE 2: PAGE 5
<PAGE>

         *CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
                   BEEN FILED SEPARATELY WITH THE COMMISSION.

     9.2  If MENTOR's average Gross Margin on Pd-103 sources falls below [*] for
a period of six consecutive months, or if its average Gross Margin falls below
[*] during any period of twelve consecutive months, then MENTOR shall be
entitled to cease marketing the Product and to exit the market upon sixty (60)
days prior written notice to NAMS of its intention to do so, and if MENTOR
exercises such right; then:

          9.2.1 NAMS shall have the right, beginning on the effective date of
MENTOR's cessation of marketing and sale of the Product, to distribute the
Pd-103 Seeds either directly or through other distributors or agents; and

          9.2.2 NAMS shall pay to MENTOR during the [*] period following the
date on which MENTOR discontinues selling Pd-103 Sources, but in no event
beyond February 1, 2006, a royalty in an amount computed in accordance with
the following schedule at the time and in the manner provided by Section
9.1.2, above.

<TABLE>
<CAPTION>

PERIOD DURING WHICH ROYALTY IS PAID                              AMOUNT OF ROYALTY
<S>                                               <C>
First [*] months following discontinuation         [*] of Net Selling Price per unit received by NAMS

Next [*] month period                              [*] of Net Selling Price per unit received by NAMS

Next [*] month period                              [*] of Net Selling Price per unit received by NAMS

Next [*] month period                              [*] of Net Selling Price per unit received by NAMS

</TABLE>

                               SCHEDULE 2: PAGE 6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}]]