Document:

INDEMNIFICATION
      AGREEMENT 

    

    

    This
      Agreement made and entered into this 23rd
      day of
      January, 2008, (the “Agreement”), by and between Thomas Equipment, Inc., a
      Delaware corporation (the “Company,” which term shall include, where
      appropriate, any Entity (as hereinafter defined) controlled directly or
      indirectly by the Company) and Gregory J. Duman (the “Indemnitee”):

    

    WHEREAS,
      it is essential to the Company that it be able to retain and attract as
      directors and officers the most capable persons available;

    

    WHEREAS,
      increased corporate litigation has subjected directors and officers to
      litigation risks and expenses, and the limitations on the availability of
      directors and officers liability insurance have made it increasingly difficult
      for the Company to attract and retain such persons;

    

    WHEREAS,
      the Company’s By-laws require
      it to indemnify its directors
      and officers to the fullest extent permitted by law and permit it to make other
      indemnification arrangements and agreements; 

    

    WHEREAS,
      the Company desires to provide Indemnitee with specific contractual assurance
      of
      Indemnitee’s rights to full indemnification against litigation risks and
      expenses (regardless, among other things, of any amendment to or revocation
      of
      the Company’s By-laws Certificate
      of Incorporation or
      any
      change in the ownership of the Company or the composition of its Board of
      Directors); 

    

    WHEREAS,
      the Company intends that this Agreement provide Indemnitee with greater
      protection than that which is provided by the Company’s By-laws; and

    

    WHEREAS,
      Indemnitee is relying upon the rights afforded under this Agreement in
      becoming a
      director and officer of the Company.

    

    NOW,
      THEREFORE, in consideration of the promises and the covenants contained herein,
      the Company and Indemnitee do hereby covenant and agree as follows:

     

    1. Definitions.

     

    (a) “Corporate
      Status” describes the status of a person who is serving or has served
      (i) as a director or officer of the Company, (ii) in
      any capacity with respect to any employee benefit plan of the Company, or
      (iii) as a director, partner, trustee, officer, employee, or agent of any
      other Entity at the request of the Company. For purposes of subsection (iii)
      of
      this Section 1(a), if Indemnitee is
      serving or has served as a director, partner, trustee, officer, employee or
      agent of a Subsidiary, Indemnitee shall be deemed to be serving at the request
      of the Company. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) “Entity”
      shall mean any corporation, partnership, limited liability company, joint
      venture, trust, foundation, association, organization or other legal
      entity.

     

    (c) “Expenses”
      shall mean all fees, costs and expenses incurred by Indemnitee in connection
      with any Proceeding (as defined below), including, without limitation,
      attorneys’ fees, disbursements and retainers (including, without limitation, any
      such fees, disbursements and retainers incurred by Indemnitee pursuant to
      Sections 11 and 12(c) of this Agreement), fees and disbursements of expert
      witnesses, private investigators and professional advisors (including, without
      limitation, accountants and investment bankers), court costs, transcript costs,
      fees of experts, travel expenses, duplicating, printing and binding costs,
      telephone and fax transmission charges, postage, delivery services, secretarial
      services, and other disbursements and expenses.

     

    (d) “Indemnifiable
      Expenses,” “Indemnifiable Liabilities” and “Indemnifiable Amounts” shall have
      the meanings ascribed to those terms in Section 3(a) below.

     

    (e) “Liabilities”
      shall mean judgments, damages, liabilities, losses, penalties, excise taxes,
      fines and amounts paid in settlement.

     

    (f) “Proceeding”
      shall mean any threatened, pending or completed claim, action, suit,
      arbitration, alternate dispute resolution process, investigation, administrative
      hearing, appeal, or any other proceeding, whether civil, criminal,
      administrative, arbitrative or investigative, whether formal or informal,
      including a proceeding initiated by Indemnitee pursuant to Section 11 of
      this Agreement to enforce Indemnitee’s rights hereunder.

    

    (g) “Subsidiary”
      shall mean any corporation, partnership, limited liability company, joint
      venture, trust or other Entity of which the Company owns (either directly or
      through or together with another Subsidiary of the Company) either (i) a general
      partner, managing member or other similar interest or (ii) (A) 50% or more
      of
      the voting power of the voting capital equity interests of such corporation,
      partnership, limited liability company, joint venture or other Entity, or (B)
      50% or more of the outstanding voting capital stock or other voting equity
      interests of such corporation, partnership, limited liability company, joint
      venture or other Entity.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2. Services
      of Indemnitee.
      In
      consideration of the Company’s covenants and commitments hereunder, Indemnitee
      agrees to serve as a director and officer of the Company. However, this
      Agreement shall not impose any obligation on Indemnitee or the Company to
      continue Indemnitee’s service to the Company beyond any period otherwise
      required by law or by other agreements or commitments of the parties, if
      any.

     

    3. Agreement
      to Indemnify.
      The
      Company agrees to indemnify Indemnitee as follows:

     

    (a) Proceedings
      Other Than By or In the Right of the Company. Subject to the exceptions
      contained in Section 4(a) below, if Indemnitee was or is a party or is
      threatened to be made a party to any Proceeding (other than an action by or
      in
      the right of the Company) by reason of Indemnitee’s Corporate Status, Indemnitee
      shall be indemnified by the Company against all Expenses and Liabilities
      incurred or paid by Indemnitee in connection with such Proceeding (referred
      to
      herein as “Indemnifiable Expenses” and “Indemnifiable Liabilities,”
respectively, and collectively as “Indemnifiable Amounts”).

     

    (b) Proceedings
      By or In the Right of the Company. Subject to the exceptions contained in
      Section 4(b) below, if Indemnitee was or is a party or is threatened to be
      made
      a party to any Proceeding by or in the right of the Company by reason of
      Indemnitee’s Corporate Status, Indemnitee shall be indemnified by the Company
      against all Indemnifiable Expenses.

    

    (c) Conclusive
      Presumption Regarding Standard of Care.
      In
      making any determination required to be made under Delaware law with respect
      to
      entitlement to indemnification hereunder, the person, persons or entity making
      such determination shall presume that Indemnitee is entitled to indemnification
      under this Agreement if Indemnitee submitted a request therefor in accordance
      with Section 5 of this Agreement, and the Company shall have the burden of
      proof
      to overcome that presumption in connection with the making by any person,
      persons or entity of any determination contrary to that
      presumption.

    

    (d) Additional
      Indemnity.
      In
      addition to, and without regard to any limitations on, the indemnification
      provided for in Section
      3(a) and 3(b)
      of this
      Agreement, the Company shall and hereby does indemnify and hold harmless
      Indemnitee against all Expenses and Liabilities incurred by him or on his behalf
      if, by reason of his Corporate Status, he is, or is threatened to be made,
      a
      party to or participant in any Proceeding (including a Proceeding by or in
      the
      right of the Company), including, without limitation, all liability arising
      out
      of the negligence or active or passive wrongdoing of Indemnitee. The only
      limitation that shall exist upon the Company’s obligations pursuant to this
      Agreement shall be that the Company shall not be obligated to make any payment
      to Indemnitee that is finally determined to be unlawful by the Court of Chancery
      of the State of Delaware.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4. Exceptions
      to Indemnification.
      Indemnitee shall be entitled to indemnification under Sections 3(a) and
      3(b) above in all circumstances other than with respect to any specific claim,
      issue or matter involved in the Proceeding out of which Indemnitee’s claim for
      indemnification has arisen, as follows:

     

    (a) Proceedings
      Other Than By or In the Right of the Company. If indemnification is requested
      under Section 3(a) and it has been finally adjudicated by the Court of
      Chancery of the State of Delaware that, in connection with such specific claim,
      issue or matter, Indemnitee failed to act (i) in good faith and (ii) in a manner
      Indemnitee reasonably believed to be in or not opposed to the best interests
      of
      the Company, or, with respect to any criminal Proceeding, Indemnitee had
      reasonable cause to believe that Indemnitee’s conduct was unlawful, Indemnitee
      shall not be entitled to payment of Indemnifiable Amounts
      hereunder.

    

    (b) Proceedings
      By or In the Right of the Company. If indemnification is requested under Section
      3(b) and 

    

    (i)
      it
      has been finally adjudicated by the Court of Chancery of the State of Delaware
      that, in connection with such specific claim, issue or matter, Indemnitee failed
      to act (A) in good faith and (B) in a manner Indemnitee reasonably believed
      to
      be in or not opposed to the best interests of the Company, Indemnitee shall
      not
      be entitled to payment of Indemnifiable Expenses hereunder; or

    

    (ii)
      it
      has been finally adjudicated by the Court of Chancery of the State of Delaware
      that Indemnitee is liable to the Company with respect to such specific claim,
      Indemnitee shall not be entitled to payment of Indemnifiable Expenses hereunder
      with respect to such claim, issue or matter unless the Court of Chancery of
      the
      State of Delaware or another court in which such Proceeding was brought shall
      determine upon application that, despite the adjudication of liability, but in
      view of all the circumstances of the case, Indemnitee is fairly and reasonably
      entitled to indemnification for such Indemnifiable Expenses which such court
      shall deem proper; or

    

    (iii)
      it
      has been finally adjudicated by the Court of Chancery of the State of Delaware
      that Indemnitee is liable to the Company for an accounting of profits made
      from
      the purchase or sale by the Indemnitee of securities of the Company pursuant
      to
      the provisions of Section 16(b) of the Securities Exchange Act of 1934, the
      rules and regulations promulgated thereunder and amendments thereto or similar
      provisions of any federal, state or local statutory law, Indemnitee shall not
      be
      entitled to payment of Indemnifiable Expenses hereunder.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) Insurance
      Proceeds. To the extent payment is actually made to the Indemnitee under a
      valid
      and collectible insurance policy in respect of Indemnifiable Amounts in
      connection with such specific claim, issue or matter, Indemnitee shall not
      be
      entitled to payment of Indemnifiable Amounts hereunder except in respect of
      any
      excess beyond the amount of payment under such insurance.

     

    5. Procedure
      for Payment of Indemnifiable Amounts.
      Indemnitee shall submit to the Company a written request specifying the
      Indemnifiable Amounts for which Indemnitee seeks payment under Section 3 of
      this Agreement and the basis for the claim. The Company shall pay such
      Indemnifiable Amounts to Indemnitee promptly upon receipt of its request. At
      the
      request of the Company, Indemnitee shall furnish such documentation and
      information as are reasonably available to Indemnitee and necessary to establish
      that Indemnitee is entitled to indemnification hereunder.

    

    6. Indemnification
      for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding
      any other provision of this Agreement, and without limiting any such provision,
      to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a
      party to and is successful, on the merits or otherwise, in any Proceeding,
      Indemnitee shall be indemnified against all Expenses and Liabilities incurred
      by
      Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is
      not wholly successful in such Proceeding but is successful, on the merits or
      otherwise, as to one or more but less than all claims, issues or matters in
      such
      Proceeding, the Company shall indemnify Indemnitee against all Expenses and
      Liabilities incurred by Indemnitee or on Indemnitee’s behalf in connection with
      each successfully resolved claim, issue or matter. For purposes of this
      Agreement, the termination of any claim, issue or matter in such a Proceeding
      by
      dismissal, with or without prejudice, by reason of settlement, judgment, order
      or otherwise, shall be deemed to be a successful result as to such claim, issue
      or matter. 

    

    7. Effect
      of Certain Resolutions.
      Neither
      the settlement or termination of any Proceeding nor the failure of the Company
      to award indemnification or to determine that indemnification is payable shall
      create a presumption that Indemnitee is not entitled to indemnification
      hereunder. In addition, the termination of any proceeding by judgment, order,
      settlement, conviction, or upon a plea of nolo contendere or its equivalent
      shall not create a presumption that Indemnitee did not act in good faith and
      in
      a manner which Indemnitee reasonably believed to be in or not opposed to the
      best interests of the Company or, with respect to any criminal Proceeding,
      had
      reasonable cause to believe that Indemnitee’s action was unlawful.

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    8. Agreement
      to Advance Expenses; Undertaking.
      The
      Company shall advance all Expenses incurred by or on behalf of Indemnitee in
      connection with any Proceeding, including a Proceeding by or in the right of
      the
      Company, in which Indemnitee is involved by reason of such Indemnitee’s
      Corporate Status within ten (10) calendar days after the receipt by the Company
      of a written statement from Indemnitee requesting such advance or advances
      from
      time to time, whether prior to or after final disposition of such Proceeding.
      To
      the extent required by Delaware law, Indemnitee hereby undertakes to repay
      any
      and all of the amount of Indemnifiable Expenses paid to Indemnitee if it is
      finally determined by that Indemnitee is not entitled under this Agreement
      to
      indemnification with respect to such Expenses. This undertaking shall be
      unsecured and made without reference to Indemnitee’s ability to repay any such
      amounts.

    

    9. Procedure
      for Advance Payment of Expenses.
      Indemnitee shall submit to the Company a written request specifying the
      Indemnifiable Expenses for which Indemnitee seeks an advancement under Section
      8
      of this Agreement, together with documentation evidencing that Indemnitee has
      incurred such Indemnifiable Expenses. Payment of Indemnifiable Expenses under
      Section 8 shall be made no later than ten (10) calendar days after the Company’s
      receipt of such request.

    

    10. Indemnification
      for Expenses of a Witness.
      Notwithstanding any other provision of this Agreement, to the extent that
      Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding
      to
      which Indemnitee is not a party, he shall be indemnified against all Expenses
      by
      incurred by him or on his behalf in connection therewith.

    

    11. Remedies
      of Indemnitee.

     

    (a) Right
      to
      Petition Court. In the event that Indemnitee makes a request for payment of
      Indemnifiable Amounts under Sections 3 and 5 above or a request for an
      advancement of Indemnifiable Expenses under Sections 8 and 9 above and the
      Company fails to make such payment or advancement in a timely manner pursuant
      to
      the terms of this Agreement, Indemnitee may petition the Court of Chancery
      of
      the State of Delaware to enforce the Company’s obligations under this
      Agreement.

     

    (b) Burden
      of
      Proof. In any judicial proceeding brought under Section 11(a) above, the
      Company shall have the burden of proving that Indemnitee is not entitled to
      payment of Indemnifiable Amounts hereunder.

     

    (c) Expenses.
      The Company agrees to reimburse Indemnitee in full for any Expenses incurred
      by
      Indemnitee in connection with investigating, preparing for, litigating,
      defending or settling any action brought by Indemnitee under Section 11(a)
      above, or in connection with any claim or counterclaim brought by the Company
      in
      connection therewith, whether or not Indemnitee is successful in whole or in
      part in connection with any such action.

     

    (d) Failure
      to Act Not a Defense. The failure of the Company (including its Board of
      Directors or any committee thereof, independent legal counsel, or stockholders)
      to make a determination concerning the permissibility of the payment of
      Indemnifiable Amounts or the advancement of Indemnifiable Expenses under this
      Agreement shall not be a defense in any action brought under Section 11(a)
      above, and shall not create a presumption that such payment or advancement
      is
      not permissible.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    12. Defense
      of the Underlying Proceeding.

    

    (a) Notice
      by Indemnitee.
      Indemnitee agrees to notify the Company promptly upon being served with any
      summons, citation, subpoena, complaint, indictment, information, or other
      document relating to any Proceeding which may result in the payment of
      Indemnifiable Amounts or the advancement of Indemnifiable Expenses hereunder;
      provided, however, that the failure to give any such notice shall not disqualify
      Indemnitee from the right, or otherwise affect in any manner any right of
      Indemnitee, to receive payments of Indemnifiable Amounts or advancements of
      Indemnifiable Expenses unless the Company’s ability to defend in such Proceeding
      is materially and adversely prejudiced thereby.

    

    (b) Defense
      by Company.
      Subject
      to the provisions of the last sentence of this Section 12(b) and of Section
      12(c) below, the Company shall have the right to defend Indemnitee in any
      Proceeding which may give rise to the payment of Indemnifiable Amounts
      hereunder; provided, however that the Company shall notify Indemnitee of any
      such decision to defend within ten (10) calendar days of receipt of notice
      of
      any such Proceeding under Section 12(a) above. The Company shall not, without
      the prior written consent of Indemnitee, consent to the entry of any judgment
      against Indemnitee or enter into any settlement or compromise which (i) includes
      an admission of fault of Indemnitee or (ii) does not include, as an
      unconditional term thereof, the full release of Indemnitee from all liability
      in
      respect of such Proceeding, which release shall be in form and substance
      reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to
      a
      Proceeding brought by Indemnitee under Section 11(a) above or pursuant to
      Section 20 below. 

    

    (c) Indemnitee’s
      Right to Counsel.
      Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to
      which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i)
      Indemnitee reasonably concludes that he or she may have separate defenses or
      counterclaims to assert with respect to any issue which may not be consistent
      with the position of other defendants in such Proceeding, (ii) a conflict of
      interest or potential conflict of interest exists between Indemnitee and the
      Company, or (iii) if the Company fails to assume the defense of such proceeding
      in a timely manner, Indemnitee shall be entitled to be represented by separate
      legal counsel of Indemnitee’s choice at the expense of the Company. In addition,
      if the Company fails to comply with any of its obligations under this Agreement
      or in the event that the Company or any other person takes any action to declare
      this Agreement void or unenforceable, or institutes any action, suit or
      proceeding to deny or to recover from Indemnitee the benefits intended to be
      provided to Indemnitee hereunder, Indemnitee shall have the right to retain
      counsel of Indemnitee’s choice, at the expense of the Company, to represent
      Indemnitee in connection with any such matter.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    13. Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to Indemnitee as follows:

    

    (a) Authority.
      The
      Company has all necessary power and authority to enter into, and be bound by
      the
      terms of, this Agreement, and the execution, delivery and performance of the
      undertakings contemplated by this Agreement have been duly authorized by the
      Company.

    

    (b) Enforceability.
      This
      Agreement, when executed and delivered by the Company in accordance with the
      provisions hereof, shall be a 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,
      moratorium, reorganization or similar laws affecting the enforcement of
      creditors’ rights generally.

    

    14. Insurance.
      The
      Company shall maintain a policy or policies of insurance with a reputable
      insurance company providing the Indemnitee with coverage for losses from
      wrongful acts in the aggregate amount of at least $7 million. For so long as
      Indemnitee shall remain an director or officer of the Company and with respect
      to any such prior service, in all policies of director and officer liability
      insurance, Indemnitee shall be named as an insured in such a manner as to
      provide Indemnitee the same rights and benefits as are accorded to the most
      favorably insured of the Company’s officers and directors. 

    

    15. Contract
      Rights Not Exclusive.
      The
      rights to payment of Indemnifiable Amounts and advancement of Indemnifiable
      Expenses provided by this Agreement shall be in addition to, but not exclusive
      of, any other rights which Indemnitee may have at any time under applicable
      law,
      the Company’s Certificate of Incorporation or By-laws, or any other agreement,
      vote of stockholders or directors (or a committee of directors), or otherwise,
      both as to action in Indemnitee’s official capacity and as to action in any
      other capacity as a result of Indemnitee’s serving as an director or officer of
      the Company.

    

    16. Successors.
      This
      Agreement shall be (a) binding upon all successors and assigns of the Company
      (including any transferee of all or a substantial portion of the business,
      stock
      and/or assets of the Company and any direct or indirect successor by merger
      or
      consolidation or otherwise by operation of law) and (b) binding on and shall
      inure to the benefit of the heirs, personal representatives, executors and
      administrators of Indemnitee. This Agreement shall continue for the benefit
      of
      Indemnitee and such heirs, personal representatives, executors and
      administrators after Indemnitee has ceased to have Corporate
      Status.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    17. Subrogation.
      In the
      event of any payment of Indemnifiable Amounts under this Agreement, the Company
      shall be subrogated to the extent of such payment to all of the rights of
      contribution or recovery of Indemnitee against other persons, and Indemnitee
      shall take, at the request of the Company, all reasonable action necessary
      to
      secure such rights, including the execution of such documents as are necessary
      to enable the Company to bring suit to enforce such rights.

    

    18. Change
      in Law.
      To the
      extent that a change in Delaware law (whether by statute or judicial decision)
      shall permit broader indemnification or advancement of expenses than is provided
      under the terms of the By-laws and this Agreement, Indemnitee shall be entitled
      to such broader indemnification and advancements, and this Agreement shall
      be
      deemed to be amended to such extent. 

    

    19. Severability.
      Whenever possible, each provision of this Agreement shall be interpreted in
      such
      a manner as to be effective and valid under applicable law, but if any provision
      of this Agreement, or any clause thereof, shall be determined by the Court
      of
      Chancery of the State of Delaware to be illegal, invalid or unenforceable,
      in
      whole or in part, such provision or clause shall be limited or modified in
      its
      application to the minimum extent necessary to make such provision or clause
      valid, legal and enforceable, and the remaining provisions and clauses of this
      Agreement shall remain fully enforceable and binding on the
      parties.

    

    20. Indemnitee
      as Plaintiff.
      Except
      as provided in Section 10(c) of this Agreement and in the next sentence,
      Indemnitee shall not be entitled to payment of Indemnifiable Amounts or
      advancement of Indemnifiable Expenses with respect to any Proceeding brought
      by
      Indemnitee against the Company, any Entity which it controls, any director
      or
      officer thereof, or any third party, unless the Board of Directors of the
      Company has consented to the initiation of such Proceeding. This Section shall
      not apply to counterclaims or affirmative defenses asserted by Indemnitee in
      an
      action brought against Indemnitee.

    

    21. Modifications
      and Waiver.
      Except
      as provided in Section 18 above with respect to changes in Delaware law
      which broaden the right of Indemnitee to be indemnified by the Company, no
      supplement, modification or amendment of this Agreement shall be binding unless
      executed in writing by each of the parties hereto. No waiver of any of the
      provisions of this Agreement shall be deemed or shall constitute a waiver of
      any
      other provisions of this Agreement (whether or not similar), nor shall such
      waiver constitute a continuing waiver.

    

    22. General
      Notices.
      All
      notices, requests, demands and other communications hereunder shall be in
      writing and shall be deemed to have been duly given (a) when delivered by hand,
      (b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed
      by certified or registered mail with postage prepaid, on the third business
      day
      after the date on which it is so mailed:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (i)

            	
              If
                to Indemnitee, to:

            
	 	 	 
	 	 	
              Gregory
                J. Duman

            
	 	 	
              17540
                Baywood Circle

            
	 	 	
              Omaha,
                NE 68130

            
	 	 	 
	 	
              (ii)

            	
              If
                to the Company, to:

            
	 	 	 
	 	 	
              Thomas
                Equipment, Inc.

            
	 	 	
              5995
                Avebury Road, Suite 704

            
	 	 	
              Mississauga,
                Ontario L5R 3T8

            
	 	 	
              Attn:
                Petter Etholm, CEO

            

    

    

    or
      to
      such other address as may have been furnished in the same manner by any party
      to
      the others.

    

    23. Governing
      Law; Consent to Jurisdiction; Service of Process.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware without regard to its rules of conflict of laws. Each of
      the
      Company and the Indemnitee hereby irrevocably and unconditionally consents
      to
      submit to the exclusive jurisdiction of the Court of Chancery of the State
      of
      Delaware and the courts of the United States of America located in the State
      of
      Delaware (the "Delaware Courts") for any litigation arising out of or relating
      to this Agreement and the transactions contemplated hereby (and agrees not
      to
      commence any litigation relating thereto except in such courts), waives any
      objection to the laying of venue of any such litigation in the Delaware Courts
      and agrees not to plead or claim in any Delaware Court that such litigation
      brought therein has been brought in an inconvenient forum. Each of the parties
      hereto agrees, (a) to the extent such party is not otherwise subject to service
      of process in the State of Delaware, to appoint and maintain an agent in the
      State of Delaware as such party's agent for acceptance of legal process, and
      (b)
      that service of process may also be made on such party by prepaid certified
      mail
      with a proof of mailing receipt validated by the United States Postal Service
      constituting evidence of valid service. Service made pursuant to (a) or (b)
      above shall have the same legal force and effect as if served upon such party
      personally within the State of Delaware. For purposes of implementing the
      parties' agreement to appoint and maintain an agent for service of process
      in
      the State of Delaware, each such party does hereby appoint The Corporation
      Trust
      Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801,
      as
      such agent and each such party hereby agrees to complete all actions necessary
      for such appointment.

    

    [signature
      page follows]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day
      and year first above written.

    

    

    
      	
              THOMAS
                EQUIPMENT, INC.

            
	 
	 
	 
	
              By:
                /s/ PETTER ETHOLM

            
	
              Petter
                Etholm, CEO

            
	 
	
              /s/
                GREGORY J. DUMAN

            
	
              Gregory
                J. DumanExhibit
      10.40

     

    LOAN
      AGREEMENT

     

    Dated
      as
      of September 21, 2007

     

    by
      and
      between

     

    AGILITY
      CAPITAL, LLC

    as
      Agility

     

    and

     

    NORTH
      AMERICAN SCIENTIFIC, INC., a Delaware corporation
      and

    NORTH
      AMERICAN SCIENTIFIC, INC., a California corporation

    collectively,
      as Borrower

     

    TOTAL
      CREDIT AMOUNT: Up to $750,000

     

    
      	
              Maturity
                Date:

            	
              November
                20, 2007

            
	
              Formula:
                

            	
              None

            
	
              Facility
                Origination Fee: 

            	
              $20,000

            
	
              Interest:
                

            	
              Prime
                plus 6%, variable

            
	
              Warrants:

            	
              Described
                in the Warrant Document

            

    

    

    The
      information set forth above is subject to the terms and conditions set forth
      in
      the balance of this Agreement. The parties agree as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1. Advances
      and Payments.

     

    (a) Advances.
      Borrower
      may request one or more advances (each, an “Advance” and collectively, the
“Advances”), up to the following maximum outstanding amounts:

     

    
      	 	
              (i)

            	
              Advance
                in the principal amount of up to $500,000 upon the execution of all
                loan
                documents.

            

    

     

    
      	
            	(ii)	
              Advance
                of up to $250,000 upon receipt of a term sheet acceptable to Agility
                from
                a lead investor acceptable to Agility, in each case in its sole discretion
                in respect
                of a PIPE financing arranged by CIBC World Markets
                (“CIBC”).

            

    

     

    Agility’s
      obligation to make any Advance or Advances under this Agreement is subject
      to
      (i) Agility’s reasonable determination, in its sole discretion, that there has
      not occurred a circumstance or circumstances that have a Material Adverse
      Effect, and (ii) receipt of a subordination agreement and account control
      agreement from Silicon Valley Bank reasonably acceptable to Agility, (iii)
      receipt of Borrower’s engagement letter from CIBC and copies of the documents
      effecting the sale of Nomos Radiation Oncology, (iv) receipt of evidence of
      the
      termination of the financing statement of Partners for Growth, and (v) the
      execution, delivery and filing of such instruments and agreements, as Agility
      reasonably deems appropriate.

     

    (b) Interest.
      Borrower shall pay interest on the outstanding principal balance of the Advance
      and other monetary Obligations at a floating rate per annum equal to Six Percent
      (6.0%) above the Prime Rate quoted in The
      Wall Street Journal,
      to be
      adjusted from time to time as such rate changes. Interest shall be calculated
      on
      the basis of a 360-day year for the actual number of days elapsed, and shall
      be
      payable in arrears on the first day of each month. Any partial month shall
      be
      prorated on the basis of a 30-day month based on the actual number of days
      outstanding.

     

    (c) Fees.
      Borrower shall pay Agility an origination fee of $20,000 on the date of this
      Agreement, which may be net-funded from the first Advance. 

     

    (d) Warrants.
      Borrower is concurrently issuing to Agility a Warrant to Purchase Stock on
      the
      terms and conditions set forth therein (the “Warrant”).

     

    (e) Maturity
      Date.
      All
      amounts outstanding hereunder are due and payable on November 20, 2007 (the
      “Maturity Date”). Borrower may prepay all or any part of the Advance without
      penalty or premium.

     

    (f) Late
      Payment.
      Prior
      to the Maturity Date, if any payment of interest or any other amount owing
      to
      Agility is not made within ten (10) days after the due date, Borrower shall
      pay
      Agility a late payment fee equal to $1,000. If any amount is outstanding under
      this Agreement on the day after the Maturity Date, Borrower shall pay Agility
      a
      fee of $5,000. After the occurrence and during the continuance of an Event
      of
      Default, the Obligations shall bear interest at a rate equal to 18% per annum.
      The terms of this paragraph shall not be construed as Agility’s consent to
      Borrower’s failure to pay any amounts in strict accordance with this Agreement,
      and Agility’s charging any such fees and/or acceptance of any such payments
      shall not restrict Agility’s exercise of any remedies arising out of any such
      failure.

     

    2. Security
      Interest.
      As
      security for all present and future indebtedness, guarantees, liabilities,
      and
      other obligations of Borrower to Agility under this Agreement, including all
      fees specified in Section 1 (collectively, the “Obligations”), Borrower grants
      Agility a security interest in all of Borrower’s personal property, whether now
      owned or hereafter acquired, including without limitation the property described
      on Exhibit
      A
      attached
      hereto, and all products, proceeds and insurance proceeds of the foregoing
      (collectively, the “Collateral”). Borrower authorizes Agility to execute such
      documents and take such actions as Agility reasonably deems appropriate from
      time to time to perfect or continue the security interest granted
      hereunder.

     

    
      
        
        

      

      
        2.

        
          

        

      

      
        
        

      

    

     

    3. Representations
      and Warranties.
      Borrower represents to Agility as follows (which shall be deemed continuing
      throughout the term of this Agreement):

     

    (a) Authorization.
      Borrower is and will continue to be, duly organized, validly existing and in
      good standing under the laws of the jurisdiction of its incorporation, and
      Borrower is and will continue to be qualified and licensed to do business in
      all
      jurisdictions in which it is required to do so; the execution, delivery and
      performance by Borrower of this Agreement, and all other documents contemplated
      hereby have been duly and validly authorized by all necessary corporate action,
      and do not violate Borrower’s Articles of Incorporation or by-laws, or any law
      or any material agreement or instrument which is binding upon Borrower or its
      property. Borrower has no wholly owned or partially owned subsidiaries and
      is
      not a partner or joint venturer in any partnership or joint
      venture.

     

    (b) State
      of Incorporation; Places of Business; Locations of
      Collateral.
      Borrower is a corporation incorporated and in good standing under the laws
      of
      the state of its incorporation, as corporation number _________. The address
      set
      forth in this Agreement under Borrower’s signature is Borrower’s chief executive
      office. Other than the chief executive office, the Collateral is located at
      the
      address(es) set forth on Exhibit
      B.

     

    (c) Title
      to Collateral; Permitted Liens.
      Borrower is now, and will at all times in the future be, the sole owner of
      all
      the Collateral. The Collateral now is and will remain free and clear of any
      and
      all liens, security interests, encumbrances and adverse claims, except for
      (i) purchase money security interests in specific items of Equipment;
      (ii) leases of specific items of Equipment; (iii) liens for taxes,
      fees, assessments or other governmental charges or levies, either not delinquent
      or being contested in good faith by appropriate proceedings, provided the same
      have no priority over any of Agility’s security interests; (iv) liens of
      materialmen, mechanics, warehousemen, carriers, or other similar liens arising
      in the ordinary course of business and securing obligations that are not
      delinquent; (v) the first priority security interest of Silicon Valley Bank;
      and
      (vi) those liens set forth Exhibit
      B.

     

    (d) Financial
      Condition, Statements and Reports.
      The
      financial statements provided to Agility by Borrower have been prepared in
      accordance with generally accepted accounting principles, consistently applied
      (“GAAP”). All financial statements now or in the future delivered to Agility
      will fairly reflect the financial condition of Borrower, at the times and for
      the periods therein stated. Between the last date covered by any such statement
      provided to Agility and the date hereof, there has been no circumstance that
      could constitute or give rise to a Material Adverse Effect. Borrower has timely
      filed, and will timely file, all tax returns and reports required by applicable
      law, and Borrower has timely paid, and will timely pay, all applicable taxes,
      assessments, deposits and contributions now or in the future owed by Borrower.
      

     

    (e) Compliance
      with Law.
      Borrower has complied, and will comply, in all material respects, with all
      provisions of all applicable laws and regulations.

     

    (f) Information.
      All
      information provided to Agility by or on behalf of Borrower on or prior to
      the
      date of this Agreement is true and correct in all material respects, and no
      representation or other statement made by Borrower to Agility contains any
      untrue statement of a material fact or omits to state a material fact necessary
      to make any statements made to Agility not misleading at the time
      made.

     

    
      
        
        

      

      
        3.

        
          

        

      

      
        
        

      

    

     

    (g) Litigation.
      Except
      as disclosed on Exhibit
      B,
      there
      is no claim or litigation pending or (to best of Borrower’s knowledge)
      threatened against Borrower. Borrower will promptly inform Agility in writing
      of
      any claim or litigation in the future which, either separately or in the
      aggregate.

     

    (h) Subsidiaries.
      Except
      as disclosed on Exhibit
      B,
      Borrower has no wholly-owned or partially owned subsidiaries and Exhibit B
      sets
      forth all loans by Borrower to, and all investments by Borrower in, any person,
      entity, corporation partnership or joint venture.

     

    (i) Deposit
      and Investment Accounts.
      Borrower maintains only the operating, savings, deposit, securities and
      investment accounts listed on Exhibit
      B.
      

     

    4. Covenants.

     

    (a) Reports.
      Borrower will provide to Agility in form and substance acceptable to Agility
      (i)  monthly unaudited financial statements, prepared in accordance with
      GAAP, consistently applied, within thirty (30) days after the last day of each
      month; (ii) within fifteen (15) days after the last day of each month, copies
      of
      all reports and statements received by Borrower from any of its banks or other
      financial institutions (in lieu of such requirement, Borrower may grant Agility
      on-line “view only” access to all of its accounts on terms acceptable to
      Agility); (iii) annual audited financial statements prepared in accordance
      with GAAP, consistently applied, together with an unqualified upon thereon
      of an
      independent certified public accountant, and copies of Borrower’s tax returns
      for such year, within one hundred twenty (120) days of the last day of such
      year; (iv) copies of borrowing base and compliance certificates and financial
      statements that Borrower delivers to Silicon Valley Bank, when delivered to
      Silicon Valley Bank; and (v) upon request, such other information relating
      to
      Borrower’s operations and condition, including information on the status of any
      acquisitions or equity investments or sales of Borrower’s securities, as Agility
      may reasonably request from time to time. Agility shall have the right to audit
      and inspect the Collateral, from time to time, upon reasonable notice to
      Borrower. Agility or its officers, employees, or agents shall have a right
      to
      visit Borrower’s premises and interview Borrower’s officers at Borrower’s
      expense, such expense to be approved in advance by Borrower.

     

    (b) Insurance.
      Borrower will maintain insurance on the Collateral and Borrower’s business, in
      amounts and of a type that are customary to businesses similar to Borrower’s,
      and Agility will be named in a Agility’s loss payable endorsement in favor of
      Agility, in form reasonably acceptable to Agility.

     

    (c) Negative
      Covenants.
      Without
      Agility’s prior written consent, Borrower shall not do any of the following:
      (i) permit or suffer a merger, change of control, or acquisition of all or
      substantially all of Borrower’s assets other than in a transaction, the terms of
      which provide for immediate payment of all amounts outstanding under this
      Agreement; (ii) acquire any assets outside the ordinary course of business;
      (iii)  sell, lease, license, encumber or transfer any Collateral except for
      sales in the ordinary course of business and for sales of assets publicly
      announced prior to the date hereof (in which case Agility shall release its
      security interest in the part of the Collateral that is sold, effective
      immediately prior to such sale, but retains its security interest in the
      proceeds of such disposition); (iv) pay or declare any dividends on
      Borrower’s stock; (v) redeem, purchase or otherwise acquire, any of
      Borrower’s stock, except for stock from terminated employees or contractors, to
      the extent required or permitted under any employment or contractor agreements;
      (vi) make any investments in, or loans or advances to, any person,
      including without limitation any investments in, or downstreaming of funds
      to,
      any subsidiary or affiliate of Borrower; (vii)  incur any indebtedness,
      other than trade debt and capital lease obligations incurred in the ordinary
      course of business, and indebtedness of up to $3,000,000 to Silicon Valley
      Bank;
      (viii) make any payment on any of Borrower’s indebtedness that is subordinate to
      the Obligations, other than in accordance with the subordination agreement,
      if
      any, in favor of Agility relating thereto; (ix) make any deposits or investments
      into any investment or depository accounts unless they are subject to an account
      control agreement acceptable to Agility, or (x) agree to do any of the
      foregoing.

     

    
      
        
        

      

      
        4.

        
          

        

      

      
        
        

      

    

     

    5. Events
      of Default.
      Any one
      or more of the following shall constitute an Event of Default under this
      Agreement:

     

    (a) Borrower
      shall fail to pay any principal of or interest on any Loans or any other
      monetary Obligations within ten days after the date due; or

     

    (b) Borrower
      shall fail to comply with any other provision of this Agreement, which failure
      is not cured within ten days after the sooner of (i) the date that Borrower
      has
      knowledge of that failure or (ii) Borrower’s receipt of notice from Agility;
      or

     

    (c) Any
      warranty, representation, statement, report or certificate made or delivered
      to
      Agility by Borrower or on Borrower’s behalf shall be untrue or misleading in a
      material respect as of the date given or made, or shall become untrue or
      misleading in a material respect after the date hereof which cannot be corrected
      after notice to the satisfaction of Agility, acting reasonably; or

     

    (d) A
      default
      or event of default shall occur under any agreement to which Borrower is a
      party
      or by which it is bound (i) resulting in a right by the other party or parties,
      whether or not exercised, to accelerate the maturity of any indebtedness or
      (ii)
      that could have a Material Adverse Effect, as defined below; or

     

    (e) Any
      portion of Borrower’s assets is attached, seized or levied upon, or a judgment
      for more than $50,000 is awarded against Borrower and is not stayed within
      ten
      days; or

     

    (f) Dissolution
      or termination of existence of Borrower; or appointment of a receiver, trustee
      or custodian, for all or any material part of the property of, assignment for
      the benefit of creditors by, or the commencement of any proceeding by or against
      Borrower under any reorganization, bankruptcy, insolvency, arrangement,
      readjustment of debt, dissolution or liquidation law or statute of any
      jurisdiction, now or in the future in effect (except that, in the case of a
      proceeding commenced against Borrower, Borrower shall have 60 days after
      the date such proceeding was commenced to have it dismissed, provided Agility
      shall have no obligation to make any Loans during such period); or

     

    (g) The
      occurrence of a “Material Adverse Effect”, which shall mean (i) a material
      adverse change in the business, prospects, operations, results of operations,
      assets, liabilities or financial or other condition of Borrower, (ii) the
      material impairment of Borrower’s ability to perform its Obligations or of
      Agility’s ability to enforce the Obligations or realize upon the Collateral, or
      (iii) a material adverse change in the value of the
      Collateral.

     

    
      
        
        

      

      
        5.

        
          

        

      

      
        
        

      

    

     

    6. Remedies.

     

    (a) Remedies.
      Upon
      the occurrence and during the continuance of any Event of Default, Agility,
      at
      its option, may do any one or more of the following: (a) Accelerate and
      declare the Obligations to be immediately due, payable, and performable;
      (b) Take possession of any or all of the Collateral wherever it may be
      found, and for that purpose Borrower hereby authorizes Agility to enter
      Borrower’s premises without interference to search for, take possession of,
      keep, store, or remove any of the Collateral, and remain on the premises or
      cause a custodian to remain on the premises in exclusive control thereof,
      without charge by Borrower for so long as Agility reasonably deems it necessary
      in order to complete the enforcement of its rights under this Agreement or
      any
      other agreement; provided, however, that should Agility seek to take possession
      of any of the Collateral by Court process, Borrower hereby waives: (i) any
      bond and any surety or security relating thereto; (ii) any demand for
      possession prior to the commencement of any suit or action to recover possession
      thereof; and (iii) any requirement that Agility retain possession of, and
      not dispose of, any such Collateral until after trial or final judgment;
      (c) Require Borrower to assemble any or all of the Collateral and make it
      available to Agility at places designated by Agility; (d) Complete the
      processing of any Collateral prior to a disposition thereof and, for such
      purpose and for the purpose of removal, Agility shall have the right to use
      Borrower’s premises, equipment and all other property without charge by
      Borrower; (e) Collect and dispose of and realize upon any investment
      property, including withdrawal of any and all funds from any deposit or
      securities accounts; (f) Dispose of any of the Collateral, at one or more
      public or private sales, in lots or in bulk, for cash, exchange or other
      property, or on credit, and to adjourn any such sale from time to time without
      notice other than oral announcement at the time scheduled for sale; and
      (g) Demand payment of, and collect any accounts, general intangibles or
      other Collateral and, in connection therewith, Borrower irrevocably authorizes
      Agility to endorse or sign Borrower’s name on all collections, receipts,
      instruments and other documents, and, in Agility’s good faith business judgment,
      to grant extensions of time to pay, compromise claims and settle accounts,
      general intangibles and the like for less than face value; Borrower grants
      Agility a license, exercisable from and after an Event of Default has occurred,
      to use and copy any trademarks, service marks and other intellectual property
      in
      which Borrower has an interest to effect any of the foregoing remedies. All
      reasonable attorneys’ fees, expenses, costs, liabilities and obligations
      incurred by Agility with respect to the foregoing shall be added to and become
      part of the Obligations, and shall be due on demand.

     

    (b) Application
      of Proceeds.
      All
      proceeds realized as the result of any sale or other disposition of the
      Collateral shall be applied by Agility first to the reasonable costs, expenses,
      liabilities, obligations and attorneys’ fees incurred by Agility in the exercise
      of its rights under this Agreement, second to any fees and Obligations other
      than interest and principal, third to the interest due upon any of the
      Obligations, and fourth to the principal of the Obligations, in such order
      as
      Agility shall determine in its sole discretion. Any surplus shall be paid to
      Borrower or other persons legally entitled thereto; Borrower shall remain liable
      to Agility for any deficiency.

     

    (c) Remedies
      Cumulative.
      In
      addition to the rights and remedies set forth in this Agreement, Agility shall
      have all the other rights and remedies accorded a secured party under the
      California Uniform Commercial Code and under all other applicable laws, and
      under any other instrument or agreement now or in the future entered into
      between Agility and Borrower, and all of such rights and remedies are cumulative
      and none is exclusive. Exercise or partial exercise by Agility of one or more
      of
      its rights or remedies shall not be deemed an election, nor bar Agility from
      subsequent exercise or partial exercise of any other rights or remedies. The
      failure or delay of Agility to exercise any rights or remedies shall not operate
      as a waiver thereof, but all rights and remedies shall continue in full force
      and effect until all of the Obligations have been fully paid and
      performed.

     

    (d) Power
      of Attorney.
      After
      the occurrence and during the continuance of an Event of Default, Borrower
      irrevocably appoints Agility (and any of Agility’s designated employees or
      agents) as Borrower’s true and lawful attorney in fact to: endorse Borrower’s
      name on any checks or other forms of payment; make, settle and adjust all claims
      under and decisions with respect to Borrower’s policies of insurance; settle and
      adjust disputes and claims respecting accounts, general intangibles and other
      Collateral; execute and deliver all notices, instruments and agreements in
      connection with the perfection of the security interest granted in this
      Agreement; sell, lease or otherwise dispose of all or any part of the
      Collateral; and take any other action or sign any other documents required
      to be
      taken or signed by Borrower, or reasonably necessary to enforce Agility’s rights
      or remedies or otherwise carry out the purposes of this Agreement. The
      appointment of Agility as Borrower’s attorney in fact, and each of Agility’s
      rights and powers, being coupled with an interest, are irrevocable until all
      Obligations owing to Agility have been paid and performed in full.

     

    
      
        
        

      

      
        6.

        
          

        

      

      
        
        

      

    

     

    7. Exit
      Fee.
      If
      Borrower ceases to do business, or is dissolved, or liquidated, in each case
      before payment in full of the Obligations, Agility may require that Borrower
      pay
      Agility a fee equal to the greater of (i) $250,000 or (ii) the amount that
      Agility would have been entitled to receive in connection with such transaction
      had Agility exercised the Warrant immediately before the consummation of such
      transaction.

     

    8. Waivers.
      The
      failure of Agility at any time or times to require Borrower to strictly comply
      with any of the provisions of this Agreement or any other present or future
      agreement between Borrower and Agility shall not waive or diminish any right
      of
      Agility later to demand and receive strict compliance therewith. Any waiver
      of
      any default shall not waive or affect any other default, whether prior or
      subsequent, and whether or not similar. None of the provisions of this Agreement
      or any other agreement shall be deemed to have been waived except by a specific
      written waiver signed by an authorized officer of Agility. Borrower waives
      demand, protest, notice of protest and notice of default or dishonor, notice
      of
      payment and nonpayment, release, compromise, settlement, extension or renewal
      of
      any commercial paper, instrument, account, general intangible, document or
      guaranty at any time held by Agility on which Borrower is or may in any way
      be
      liable, and notice of any action taken by Agility, unless expressly required
      by
      this Agreement.

     

    9. Indemnity.
      Borrower shall indemnify Agility for any costs or liabilities, including
      reasonable attorneys’ fees, incurred by Agility in connection with this
      Agreement.

     

    10. Confidentiality.
      In
      handling any confidential non-public information provided to Agility by
      Borrower, Agility shall exercise the same degree of care that it exercises
      with
      respect to its own proprietary information of the same types to maintain the
      confidentiality of the same, except that disclosure of such information may
      be
      made (i) to subsidiaries or affiliates of Agility in connection with their
      present or prospective business relations with Borrower, (ii) to
      prospective transferees or purchasers of any interest in the Obligations,
      provided that they have entered into a comparable confidentiality agreement
      with
      respect thereto, (iii) as required by law, regulations, rule or order,
      subpoena, judicial order or similar order, (iv) as may be required in
      connection with the examination, audit or similar investigation of Agility,
      and
      (v) as Agility may deem appropriate in connection with the exercise of any
      remedies hereunder. Confidential information shall not include information
      that
      either: (a) is in the public domain, or becomes part of the public domain,
      after disclosure to Agility through no fault of Agility; or (b) is
      disclosed to Agility by a third party, provided Agility does not have actual
      knowledge that such third party is prohibited from disclosing such
      information.

     

    11. Governing
      Law; Jurisdiction; Venue.
      This
      Agreement and all acts and transactions hereunder and all rights and obligations
      of Agility and Borrower shall be governed by the internal laws (and not the
      conflict of laws rules) of the State of California. As a material part of the
      consideration to Agility to enter into this Agreement, Borrower (i) agrees
      that all actions and proceedings relating directly or indirectly to this
      Agreement shall, at Agility’s option, be litigated in courts located within
      California, and that the exclusive venue therefor shall be Santa Barbara County;
      (ii) consents to the jurisdiction and venue of any such court and consents
      to service of process in any such action or proceeding by personal delivery
      or
      any other method permitted by law; and (iii) waives any and all rights
      Borrower may have to object to the jurisdiction of any such court, or to
      transfer or change the venue of any such action or proceeding.

     

    
      
        
        

      

      
        7.

        
          

        

      

      
        
        

      

    

     

    12. MUTUAL
      WAIVER OF JURY TRIAL BORROWER AND AGILITY EACH WAIVE THE RIGHT TO TRIAL BY
      JURY
      IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING
      TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT
      BETWEEN AGILITY AND BORROWER, OR ANY CONDUCT, ACTS OR OMISSIONS OF AGILITY
      OR
      BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS
      OR
      ANY OTHER PERSONS AFFILIATED WITH AGILITY OR BORROWER, IN ALL OF THE FOREGOING
      CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
      IF
      THIS JURY WAIVER IS FOR ANY REASON UNENFORCEABLE, THE PARTIES AGREE TO RESOLVE
      ALL CLAIMS, CAUSES AND DISPUTES THROUGH JUDICIAL REFERENCE PURSUANT TO CODE
      OF
      CIVIL PROCEDURE SECTION 638 ET SEQ BEFORE A MUTUALLY ACCEPTABLE REFEREE SITTING
      WITHOUT A JURY OR, IF NO AGREEMENT ON THE REFEREE IS REACHED, BEFORE A REFEREE
      SELECTED BY THE PRESIDING JUDGE OF THE CALIFORNIA SUPERIOR COURT FOR SANTA
      BARBARA COUNTY. THIS PROVISION SHALL NOT RESTRICT A PARTY FROM EXERCISING
      NONJUDICIAL REMEDIES UNDER THE CODE.

     

    13. Co-Borrowers.
      Solely
      for purposes of this Section 13, NORTH AMERICAN SCIENTIFIC, INC., a Delaware
      corporation and NORTH AMERICAN SCIENTIFIC, INC., a California corporation are
      each referred to individually, as a “Borrower” and, collectively, the
“Borrowers”.

     

    (a) Co-Borrowers.
      Borrowers are jointly and severally liable for the Obligations and Agility
      may
      proceed against one Borrower to enforce the Obligations without waiving its
      right to proceed against the other Borrower. This Agreement and the Loan
      Documents are a primary and original obligation of each Borrower and shall
      remain in effect notwithstanding future changes in conditions, including any
      change of law or any invalidity or irregularity in the creation or acquisition
      of any Obligations or in the execution or delivery of any agreement between
      Agility and any Borrower. Each Borrower shall be liable for existing and future
      Obligations as fully as if all of the Advance was advanced to such Borrower.
      Agility may rely on any certificate or representation made by any Borrower
      as
      made on behalf of, and binding on, all Borrowers. Each Borrower appoints each
      other Borrower as its agent with all necessary power and authority to give
      and
      receive notices, certificates or demands for and on behalf of both Borrowers,
      to
      act as disbursing agent for receipt of any loans on behalf of each Borrower
      and
      to apply to Agility on behalf of each Borrower for the Advance, any waivers
      and
      any consents. This authorization cannot be revoked, and Agility need not inquire
      as to one Borrower’s authority to act for or on behalf of another
      Borrower.

     

    (b) Subrogation
      and Similar Rights. Each
      Borrower irrevocably waives, until all Obligations are satisfied, all rights
      that it may have at law or in equity (including, without limitation, any law
      subrogating the Borrower to the rights of Agility under the Loan Documents)
      to
      seek contribution, indemnification, or any other form of reimbursement from
      any
      other Borrower, or any other Person now or hereafter primarily or secondarily
      liable for any of the Obligations, for any payment made by the Borrower with
      respect to the Obligations in connection with the Loan Documents or otherwise
      and all rights that it might have to benefit from, or to participate in, any
      security for the Obligations as a result of any payment made by the Borrower
      with respect to the Obligations in connection with the Loan Documents or
      otherwise. Any agreement providing for indemnification, reimbursement or any
      other arrangement prohibited under this Section shall be null and void. If
      any
      payment is made to a Borrower in contravention of this Section, such Borrower
      shall hold such payment in trust for Agility and such payment shall be promptly
      delivered to Agility for application to the Obligations, whether matured or
      unmatured.

     

    
      
        
        

      

      
        8.

        
          

        

      

      
        
        

      

    

     

    (c) Waivers
      of Notice. Each
      Borrower waives, to the extent permitted by law, notice of acceptance hereof;
      notice of the existence, creation or acquisition of any of the Obligations;
      notice of an Event of Default except as set forth herein; notice of the amount
      of the Obligations outstanding at any time; notice of any adverse change in
      the
      financial condition of any other Borrower or of any other fact that might
      increase the Borrower’s risk; presentment for payment; demand; protest and
      notice thereof as to any instrument; and all other notices and demands to which
      the Borrower would otherwise be entitled by virtue of being a co-borrower or
      a
      surety. Each Borrower waives any defense arising from any defense of any other
      Borrower, or by reason of the cessation from any cause whatsoever of the
      liability of any other Borrower. Agility’s failure at any time to require strict
      performance by any Borrower of any provision of the Loan Documents shall not
      waive, alter or diminish any right of Agility thereafter to demand strict
      compliance and performance therewith. Each Borrower also waives any defense
      arising from any act or omission of Agility that changes the scope of the
      Borrower’s risks hereunder. Each Borrower hereby waives any right to assert
      against Agility any defense (legal or equitable), setoff, counterclaim, or
      claims that such Borrower individually may now or hereafter have against another
      Borrower or any other Person liable to Agility with respect to the Obligations
      in any manner or whatsoever.

     

    (d) Subrogation
      Defenses.
      Until
      all Obligations are paid in full and Agility has no further obligation to make
      Credit Extensions to Borrowers, each Borrower hereby waives any defense based
      on
      impairment or destruction of its subrogation or other rights against any other
      Borrower and waives all benefits which might otherwise be available to it under
      California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850,
      2899, and 3433 and California Code of Civil Procedure Sections 580a, 580b,
      580d
      and 726, as those statutory provisions are now in effect and hereafter amended,
      and under any other similar statutes now and hereafter in effect.

     

    (e) Right
      to Settle, Release.

     

    (i) The
      liability of Borrowers hereunder shall not be diminished by (i) any agreement,
      understanding or representation that any of the Obligations is or was to be
      guaranteed by another Person or secured by other property, or (ii) any release
      or unenforceability, whether partial or total, of rights, if any, which Agility
      may now or hereafter have against any other Person, including another Borrower,
      or property with respect to any of the Obligations.

     

    (ii) Without
      notice to any given Borrower and without affecting the liability of any given
      Borrower hereunder, Agility may (i) compromise, settle, renew, extend the time
      for payment, change the manner or terms of payment, discharge the performance
      of, decline to enforce, or release all or any of the Obligations with respect
      to
      any other Borrower by written agreement with such other Borrower, (ii) grant
      other indulgences to another Borrower in respect of the Obligations, (iii)
      modify in any manner any documents relating to the Obligations with respect
      to
      any other Borrower by written agreement with such other Borrower, (iv) release,
      surrender or exchange any deposits or other property securing the Obligations,
      whether pledged by a Borrower or any other Person, or (v) compromise, settle,
      renew, or extend the time for payment, discharge the performance of, decline
      to
      enforce, or release all or any obligations of any guarantor, endorser or other
      Person who is now or may hereafter be liable with respect to any of the
      Obligations.

     

    (f) Subordination.
      All
      indebtedness of a Borrower now or hereafter arising held by another Borrower
      is
      subordinated to the Obligations and the Borrower holding the indebtedness shall
      take all actions reasonably requested by Agility to effect, to enforce and
      to
      give notice of such subordination.

     

    
      
        
        

      

      
        9.

        
          

        

      

      
        
        

      

    

     

    14. General.
      This
      Agreement and such other written agreements, documents and instruments as may
      be
      executed in connection herewith are the final, entire and complete agreement
      between Borrower and Agility and supersede all prior and contemporaneous
      negotiations and oral representations and agreements, all of which are merged
      and integrated in this Agreement. There are no oral understandings,
      representations or agreements between the parties which are not set forth in
      this Agreement or in other written agreements signed by the parties in
      connection herewith. The terms and provisions of this Agreement may not be
      waived or amended, except in a writing executed by Borrower and a duly
      authorized officer of Agility. Agility may assign all or any part of its
      interest in this Agreement and the Obligations to any person or entity, or
      grant
      a participation in, or security interest in, any interest in this Agreement,
      with notice to, but without consent of, Borrower. Borrower may not assign any
      rights under or interest in this Agreement without Agility’s prior written
      consent. This Agreement may be executed in two or more counterparts, each of
      which shall be deemed an original, but all of which shall constitute one
      agreement.

     

    15. Publicity.
      Borrower
      authorizes Agility to use Borrower’s tradenames and logos in Agility’s marketing
      materials in respect of the transactions evidenced by this
      Agreement.

     

    
      	
              AGILITY
                CAPITAL, LLC

            	 	
              NORTH
                AMERICAN

              SCIENTIFIC,
                INC.

            	 	
              NORTH
                AMERICAN

              SCIENTIFIC,
                INC.

            
	 	 	 	 	 	 	 	 
	
              By:
                

            	
              /s/Jeffrey
                Carmody

            	 	
              By:

            	
              /s/James
                W. Klingler

            	 	
              By:

            	
              /s/James
                W. Klingler

            
	
              Title:

            	
              Chief
                Operating Officer

            	 	
              Title:

            	
              Sr.VP
                & CFO

            	 	
              Title:

            	
              Sr.VP
                & CFO

            

    

    

    
      	
              Address
                for notices:

            	
              Address
                for notices:

            	
              Address
                for notices:

            
	 	 	 
	
              Agility
                Capital, LLC

              226
                E. Canon Perdido Street, Suite F

              Santa
                Barbara, CA 93101

              Attn:
                Jeff Carmody

              Fax:
                805-568-0427

            	
              North
                American Scientific, Inc.

              20200
                Sunburst Street

              Chatsworth,
                CA 91311

              Attn:
                James Klingler

              Fax:
                (818)
                734-5223

            	
              North
                American Scientific, Inc.

              20200
                Sunburst Street

              Chatsworth,
                CA 91311

              Attn:
                James Klingler

              Fax:
                (818)
                734-5223

            

    

    

    
      
        
        

      

      
        10.

        
          

        

      

      
        
        

      

    

    

    Exhibit
      A

    COLLATERAL
      DESCRIPTION ATTACHMENT

    TO
      LOAN AND SECURITY AGREEMENT

    

    All
      personal property of Borrower (herein referred to as “Borrower” or “Debtor”)
      whether presently existing or hereafter created or acquired, and wherever
      located, including, but not limited to:

     

    (a)
       all
      accounts (including health-care-insurance receivables), chattel paper (including
      tangible and electronic chattel paper), deposit accounts, documents (including
      negotiable documents), equipment (including all accessions and additions
      thereto), general intangibles (including copyrights, patents, trademarks,
      goodwill and all intellectual property, payment intangibles and software),
      goods
      (including fixtures), instruments (including promissory notes), inventory
      (including all goods held for sale or lease or to be furnished under a contract
      of service, and including returns and repossessions), investment property
      (including securities and securities entitlements), letter of credit rights,
      money, and all of Debtor’s books and records with respect to any of the
      foregoing, and the computers and equipment containing said books and records;
      and 

     

    (b)
       any
      and
      all cash proceeds and/or noncash proceeds of any of the foregoing, including,
      without limitation, insurance proceeds, and all supporting obligations and
      the
      security therefor or for any right to payment. All terms above have the meanings
      given to them in the California Uniform Commercial Code, as amended or
      supplemented from time to time.

     

    The
      property sold pursuant to a sale announced before the date of this Agreement
      will be released from the security interest granted under this Agreement
      immediately before consummation of that sale, provided Collateral will include
      all proceeds of that sale.

     

    
      
        
        

      

      
        11.

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B

     

    Places
      of
      Business and Locations of Collateral (Section 3(b)):

     

    Permitted
      Liens (Section 3(c))

     

    Litigation
      (Section 3(h)):

     

    Subsidiaries
      and partnerships and joint ventures (Section 3(i)):

     

    Accounts
      (Section 3(j))

     

    
      
        
        

      

      
        12.

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