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Exhibit 10.1    
    

[LETTERHEAD
OF THE COMPANY] 

                        ,
2003 

Mr. John
W. Manzetti

218 Chesapeake Drive

Gibsonia, PA 15044 

Dear
Mr. Manzetti: 

        Reference
is made to the Agreement and Plan of Merger, dated as of October 26, 2003 (the "Merger Agreement"), among NOMOS Corporation, a Delaware corporation ("NOMOS"), North
American Scientific, Inc., a Delaware corporation (the "Company"), and AM Capital I, Inc., a Delaware corporation ("AM Capital"), pursuant to which NOMOS will merge with and into AM
Capital and AM Capital shall continue as the surviving corporation and a wholly-owned subsidiary of the Company. The Company and AM Capital consider it essential to the best interests of the
stockholders of the Company to foster the continuous employment of key management personnel of NOMOS. 

        In
order to induce you to remain in the employ of AM Capital, the Company will cause AM Capital to employ you and agrees that you shall receive the benefits set forth in this letter
agreement (the "Agreement"). These benefits replace and supersede the benefits set forth in those certain letter agreements dated February 11, 2002 and June 18, 2003, respectively,
between you and NOMOS, which prior agreements are hereby deemed null and void. 

        1.     Employment; Duties. Effective as of the Closing Date (as defined in the Merger Agreement), AM Capital hereby agrees to
employ you in the position of President of AM Capital. You shall be responsible for the management of the business and affairs of AM Capital. You shall report to, and be subject to the direction of,
the Chief Executive Officer of the Company (the "CEO"). The CEO may assign other duties to you from time to time, and shall have the right to modify your responsibilities from time to time as the CEO
may reasonably deem necessary or appropriate. During the term of your employment with AM Capital, you shall devote your full time and use your best efforts to advance the business and welfare of AM
Capital and the Company, and will not engage in any other employment or business activities for any direct or indirect remuneration that would be directly harmful or detrimental to, or that may
compete with, the business and affairs of AM Capital or the Company, or that would interfere with your duties hereunder. 

        2.     Term; Vacation. Unless earlier terminated as hereinafter provided, the term of your employment hereunder shall commence on
the Closing Date and shall continue for a period of two years thereafter (the "Employment Term"). The Employment Term shall continue for additional one-year terms unless notice of
non-renewal is given either by you to the Company or by the Company to you at least 90 days prior to the date on which the Employment Term is then scheduled to end. You shall be entitled
to a period of annual vacation time equal to four weeks per twelve-month period, to accrue pro rata during the course of each such twelve month period. The days selected for your vacation must be
mutually and reasonably agreeable to the Company and you. In no event shall your total accrued vacation exceed seven weeks. 

        3.     Base Salary; Stock Options. The Company shall pay you, as compensation for your services, an initial salary of $300,000
per annum ("Base Salary"), subject to such annual increases as may be determined in the sole discretion of the Company. Your Base Salary shall be payable in accordance with the Company's standard
policies and practices for payment of salary to salaried employees. In addition, you will be granted options ("Options") to purchase 40,000 shares of the Company's common stock, at an exercise price
equal to the fair market value of such common stock as of the Closing Date, pursuant to the Company's Amended and Restated 1996 Stock Option Plan (the "Plan"), or any subsequent plan adopted by the
Company. Such Options will vest in equal installments of 10,000 shares each on the first, second, third and fourth anniversary of the date hereof. As determined from time to time by the Board of
Directors of the Company, you will also be eligible to receive additional Options 

 

under
the Plan. To the extent allowable under Internal Revenue Service regulations, such Options shall be "incentive stock options" as described in the Plan. You shall be entitled to receive Options
in the form of non-statutory stock options, at your option. 

        4.     Other Compensation. In addition to the compensation package described above, you shall be entitled to participate in any
group insurance, hospitalization, medical, dental, health, accident, disability or similar plan or program of the Company now existing or established hereafter to the extent that you are eligible
under the general provisions thereof (collectively, "Health Benefits"). In addition, you will be eligible for participation in the Company's standard bonus program. The bonus program for you for
fiscal year 2004, ended October 31, 2004 is described in Exhibit A to this agreement. 

        5.     Severance. Subject to Section 7 of this Agreement, in the event your employment is terminated at any time during
the Employment Term, or this Agreement is not renewed, you will receive (a) a severance payment equal to twenty four months of your Base Salary if terminated in the first year of this
Agreement, 18 months if terminated in the second year of this Agreement and 12 months if terminated thereafter, less standard withholding for tax and social security purposes, and
(b) health benefits coverage at your election, to the extent permitted by the Company's then existing insurance policies and Health Benefits plan, except as required by law (e.g., COBRA health
insurance continuation election), at the expense of the Company for twenty four months. 

        6.     Payment Terms. The severance payment contemplated by this Agreement shall be payable (in the sole discretion of the
Company) in a lump sum within 30 days of the date of such termination or as salary continuation over a one year period. 

        7.     Severance Terms. The severance shall be payable to you if your employment with the Company is terminated, or if this
agreement is not renewed, unless such termination or non-renewal is (a) because of your death or Disability (as defined below); (b) by the Company for Cause (as defined
below); or (c) by you for other than Good Reason (as defined below). 

        8.     Change in Control. In the event that you are terminated by the Company immediately prior to or concurrently with a Change
in Control (as defined below) and you are not employed by the successor entity in the same or similar capacity at the same total compensation level, including bonus opportunity, after such Change in
Control, all Options held by you shall automatically be 100% vested as of the date of such termination. In addition, you will receive, in total, the sum of one year Base Salary plus your highest bonus
received in the prior two years and health care coverage for 24 months as set forth in Section 5. A "Change in Control" is defined for purposes of this Agreement as a sale of all or
substantially all of the assets of the Company or a sale, directly or indirectly, of more than 50% of the voting stock of the Company. This assumes that you will continue to perform your duties in the
ordinary course through the date of such event. 

        9.     Disability. The Company may terminate your employment in the event you suffer a disability that renders you unable to
perform the essential functions of his position, even with reasonable accommodation, as defined by the Company's then existing long term disability insurance policy. After the Termination Date, which
in this event shall be the date upon which notice of termination is given, you shall receive the accrued portion of any salary, vacation and bonus hereunder through the Termination Date, less standard
withholdings for tax and social security purposes, payable, in the case of a bonus, upon such date or over such period of time which is in accordance with the applicable bonus plan. In addition, you
will be entitled to a severance payment in the gross amount equal to six months Base Salary to be paid, in the sole discretion of the Company, in a lump sum within 30 days of the date of the
Termination or as salary continuation over a six month period. In addition, any unvested Options granted under Section 4 of the Agreement, any previously granted options or that may hereafter
be granted to you shall immediately vest as of the Termination Date. 

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        10.   Cause. Termination by the Company of your employment for "Cause" shall mean termination upon the occurrence or existence
of any of the following, as reasonably determined by the CEO: (a) the continued failure to substantially perform your duties or responsibilities, provided that the Company has given you written
notice specifying the basis upon which the CEO determined that your duties or responsibilities were not substantially performed and such failure remains uncorrected for a period of 30 days
following receipt of such written notice; (b) a material breach by you of any of your material obligations hereunder our under the Confidential Information Agreement (as defined below) which
remains uncured for a period of 10 days following the date that the Company has given you written notice thereof; (c) a material breach by you of your duty not to engage in any
transaction that represents, directly or indirectly, self-dealing with Parent or the Company or any of their affiliates which has not been approved by the CEO if in any such case such
material breach remains uncured for a period of 30 days following the date that the Company has given you written notice thereof; (d) the repeated material breach by you of any material
duty referred to in clause (b) or (c) above as to which at least one written notice has been previously given pursuant to such clause (b) or (c); (e) any act of
misappropriation, embezzlement, intentional fraud or similar conduct involving the Company or any of its affiliates; (f) the violation and conviction of any federal, state or local law or any
act of moral turpitude which has a material adverse impact on the business, reputation or operation of the Company or on your ability to perform your duties as President; (g) intentional
infliction of any damage of a material nature to any property of the Company or any affiliate thereof; or (h) the repeated non-prescription use of any controlled substance or the
repeated abuse of alcohol or any other non-controlled substance which has a material adverse impact on your ability to serve in your capacity as an employee of the Company or any affiliate
thereof. 

        11.   Good Reason. You shall be entitled to terminate your employment for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean the occurrence of: 

        (a)   any
material diminution by the Company in your position or responsibilities without your consent, provided that within
30 days of any such alleged diminution, you provide the Company with written notice of the basis for your claim that any action by the Company is a material diminution and a period of at least
30 days for the Company to cure. 

        (b)   a
reduction by the Company in your annual base salary as the same may be increased from time to time, except for across-the-board salary
reductions similarly affecting all senior management personnel of the Company; and 

        (c)   the
Company's requiring you to be based more than 50 miles from the location at which you were based, except for required travel on the Company's business to an extent
substantially consistent with your present business travel obligations. 

        12.   Successors: Binding Agreement.

        (a)   The
Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken
place. 

        (b)   This
Agreement shall inure to the benefit of and be enforceable by you and your personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. 

        13.   Confidential Information Agreement. Simultaneously with your execution hereof, you agree to execute and deliver to the
Company its standard form of Employee Invention, Trade Secret and Confidential Information Agreement (the "Confidential Information Agreement") as detailed in Exhibit B attached to this
agreement.. 

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        14.   Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by you and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements
or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California without regard to its conflicts of law principles. 

        15.   Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in full force and effect. 

        16.   Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument. 

        17.   Entire Agreement. This Agreement and the exhibits attached hereto sets forth the entire understanding of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written,
by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and cancelled. 

        If
this Agreement sets forth our understanding with respect of the subject matter contained herein, kindly sign and return to the Company the enclosed copy of this letter, which will
then constitute our entire agreement in respect of such subject matter. 

	 	 	 	Sincerely,	 	 
	

 	

 	
 	

[THE COMPANY]	
 	

 
	

 	

 	
 	

By:	

    
 Name:

Title:	
 	

 
	

 	

 	
 	

 	

 	
 	

 
	

Agreed to this            day of            , 2003:	
 	

 	

 	
 	

 
	

    
 Name: John W. Manzetti	

 	
 	

 	

 	
 	

 
	

 	

 	
 	

 	

 	
 	

 
	

 	

 	
 	

 	

 	
 	

 

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EXHIBIT A

  Fiscal 2004 Incentive Bonus Program 

        Your
bonus will be a minimum of 25% of your annual base salary if the Company meets or exceeds the Performance Goals established for the previous Measuring Year. Full detail of the
program for 2004 will be provided prior to the Closing Date and shall be incorporated by reference herein. 

5

 
EXHIBIT B
  Employee Invention, Trade Secret and Confidential Information Agreement

(the "Confidential Information Agreement") 

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Exhibit 10.3    
    

 
  INDEMNIFICATION ESCROW AGREEMENT    
    

        This INDEMNIFICATION ESCROW AGREEMENT, dated as
of                            , 200            
(this "Agreement"), is made and
entered into by and among NOMOS Corporation, a Delaware corporation (the "Company"), John A. Friede, on behalf of the Company's stockholders (the
"Stockholder Representative"), North American Scientific, Inc., a Delaware corporation ("Acquiror"), and U.S. Bank National
Association, a national banking association ("Escrow Agent"), in connection with the Agreement and Plan of Merger, dated as of October     , 2003 (the
"Merger Agreement"), among the Company, Acquiror and AM Capital I, Inc., a Delaware corporation and wholly-owned subsidiary of Acquiror ("Merger
Sub"). 

W I T N E S S E T H:  

        WHEREAS, pursuant to Section 3.6 of the Merger Agreement, the Company, on behalf of its stockholders (collectively, the
"Stockholders"), has agreed to make available to Acquiror and the Surviving Corporation an escrow fund to compensate such parties for certain Indemnified Losses (as such
term is defined in the Merger Agreement); 

        NOW,
THEREFORE, in consideration of the foregoing premises and the mutual obligations herein, the parties hereto, intending to be legally bound, hereby agree as follows: 

        1.    DEFINITIONS.    All capitalized terms used but not defined herein are used herein
as defined in the Merger Agreement. 

        2.    ESTABLISHMENT OF ESCROW.    As of the Closing, Acquiror shall deliver, or cause its
transfer agent to deliver, to the Escrow Agent for deposit into escrow hereunder (the "Escrow Fund"): (a) a certificate evidencing 10 percent of the shares
of Acquiror Common Stock to be issued in the Merger as required by Section 3.6 of the Merger Agreement (collectively, the "Escrowed Shares"), registered in the name
of the Escrow Agent as nominee for the Stockholders, and (b) an aggregate amount of cash equal to 10 percent of the aggregate amount of cash to be paid in the Merger pursuant to
Section 3.3 of
the Merger Agreement as required by Section 3.6 of the Merger Agreement (the "Escrowed Cash"). The Escrow Agent agrees to establish the Escrow Fund in the manner
set forth herein. The Escrow Agent shall have no duty to confirm or verify the accuracy or correctness of the amount of any Escrowed Shares or Escrowed Cash deposited with it hereunder. 

        3.    MAINTENANCE OF THE ESCROW.    

        (a)   The
Escrow Agent shall establish a separate account (each, a "Subaccount") for each Stockholder for the number of Escrowed Shares and such
portion of the Escrowed Cash as set forth opposite such Stockholder's name on Annex A attached hereto (the "Stockholder List"). The ratio of
the number of Escrowed Shares listed opposite a given Stockholder's name on the Stockholder List to the total number of Escrowed Shares set forth on the Stockholder List is referred to herein as such
Stockholder's "Proportional Interest in Shares." The ratio of the amount of Escrowed Cash listed opposite a given Stockholder's name on the Stockholder List to the total
amount of Escrowed Cash set forth on the Stockholder List is referred to herein as such Stockholder's "Proportional Interest in Cash." A Stockholder's Proportional
Interest in Shares and Proportional Interest in Cash shall collectively be referred to herein as such Stockholder's "Proportional Interest." 

        (b)   The
Escrow Agent shall invest the Escrowed Cash at the written direction of the Stockholder Representative in any of the following (collectively the
"Permitted Investments"): (i) United States Treasury Bills maturing within ninety-one (91) days of the date of purchase, (ii) demand
deposit accounts, money market deposit accounts and certificates of deposit with a term not greater than ninety (90) days with a United States depository having a reported capital and surplus
of not less than $50 million and (iii) commercial paper which is rated on the date of purchase in one of the two highest rating categories by both Standard and Poor's Ratings Group and
Moody's Investors Service, Inc. and matures not more than ninety (90) days from the date of purchase. In the absence of duly authorized 

 

and
complete directions regarding investment of cash held in the Account from the Stockholder Representative, Agent shall automatically invest and reinvest the same in units of the money market mutual
funds identified on Annex C attached hereto and incorporated herein, which funds may be managed by an affiliate of the Agent. Any income earned or accrued with respect to the Escrowed Cash shall
become a part of the Escrow Fund (but shall not be used to satisfy any claims by Acquiror Indemnified Parties pursuant to Section 5 herein) and credited proportionately to the Subaccounts into
which the Escrowed Cash was initially deposited on the date hereof. The Escrow Agent shall have no liability for any loss incurred as a result of investments made or liquidated by it in accordance
with the provisions of this Agreement. 

        (c)   Any
distributions in respect of the Escrowed Shares for stock splits, stock combinations, recapitalizations and similar transactions received by the Escrow Agent shall
become a part of the Escrow Fund, credited proportionately to the Subaccounts of the Stockholders in accordance with the applicable Proportional Interest in Shares and shall be considered Escrowed
Shares for all purposes hereof. In the event the Escrowed Shares are reclassified or otherwise changed into or exchanged for other securities, property or cash pursuant to any merger, consolidation,
sale of assets or liquidation or other transaction, the securities, cash or other property received by the Escrow Agent in respect of the Escrowed Shares shall become a part of the Escrow Fund,
credited proportionately to the Subaccounts in accordance with the applicable Proportional Interest in Shares and shall be considered Escrowed Shares for all purposes hereof. All other distributions
in respect of the Escrowed Shares received by the Escrow Agent shall become a part of the Escrow Fund (but shall not be used to satisfy any claims by Acquiror Indemnified Parties pursuant to
Section 5 herein) and credited proportionately to the Subaccounts of the Stockholders in accordance with the applicable Proportional Interest in Shares. 

        (d)   The
Escrow Agent shall maintain records reflecting each Stockholder's Proportional Interest in the Escrow Fund and shall adjust each Subaccount to reflect distributions
from, and additions or substitutions to, the Escrow Fund. The Escrow Agent is hereby granted the power to effect any transfer or distribution of all or any portion of the Escrowed Fund required by
this Agreement. Acquiror shall cooperate with the Escrow Agent in promptly issuing, or causing its transfer agent to promptly issue, such stock certificates as shall be required to effect transfers of
Escrowed Shares required by this Agreement. All Escrowed Shares and other securities held in the Escrow Fund shall be registered in the name of the Escrow Agent as nominee for the Stockholders in the
respective amounts set forth on the Stockholder List. Notwithstanding the above, upon the determination by Acquiror that a Stockholder has perfected its dissenter's right of appraisal under applicable
Delaware law, Acquiror shall deliver to the Escrow Agent a revised Stockholder List that removes such Stockholder from the Stockholder List and reflects such removal in calculating the Proportional
Interest of all other Stockholders, which shall replace, in its entirety, Annex A attached hereto. 

        (e)   All
dividends, distributions, interest and gains earned or realized on the Escrow Fund (collectively "Earnings") and credited to each
Subaccount shall be treated as having been received by the Stockholders to whose Subaccount the Earnings are credited for tax purposes. The Stockholder List sets forth each Stockholder's address and
Taxpayer Identification Number. The Escrow Agent shall file information returns with the United States Internal Revenue Service and distribute payee statements to the Stockholders, documenting such
Earnings. Stockholder Representative shall provide to the Escrow Agent all forms and information necessary to complete such information returns and payee statements. In the event the Escrow Agent
becomes liable for the payment of taxes, including withholding taxes, relating to any Earnings or any payment made hereunder, the Escrow Agent may deduct such taxes from the Escrow Fund. 

        4.    ADMINISTRATION OF ESCROW FUND.    

        (a)   Subject
to the provisions of Article XII of the Merger Agreement and Sections 5 of this Agreement, the Escrow Fund shall be available to compensate the Acquiror
Indemnified Parties (as 

2

 

such
term is defined in the Merger Agreement) for any Indemnified Losses (as defined in the Merger Agreement). 

        (b)   No
Escrowed Shares or any beneficial interest therein or any other portion of the Escrow Fund may be pledged, sold, assigned or transferred, including by operation of
law, by any Stockholder or be taken or reached by any legal or equitable process in satisfaction of any debt or other liability of any such Stockholder, prior to the delivery and transfer to such
Stockholder of such Stockholder's Proportional Interest of the Escrow Fund by the Escrow Agent as provided herein. 

        (c)   The
Escrow Agent shall hold and safeguard the Escrow Fund during the Escrow Period, shall not treat the Escrow Fund as the property of Acquiror and shall hold and
dispose of the Escrow Fund only in accordance with the terms hereof. Any distributions in respect of shares of Acquiror Common Stock transferred from the Escrow Fund shall not be added to the Escrow
Fund but shall be distributed to the record holders thereof. 

        (d)   Each
Stockholder shall be deemed the record holder of, and shall have voting, dividend, distribution and all other rights in respect of, the shares of Acquiror Common
Stock contributed to the Escrow Fund on behalf of such Stockholder in accordance with the Stockholder List. The Escrow Agent shall promptly forward, or cause to be forwarded, copies of any proxies,
proxy statements and other soliciting materials which it receives to the Stockholders, and shall vote the applicable portion of the Escrowed Shares in accordance with any written instructions timely
received by the Stockholders. Absent any such written instructions, the Escrow Agent shall not vote any Escrowed Shares. 

        (e)   Within
10 days following the second anniversary of the Effective Time (the "Escrow Termination Date"), Escrow Agent shall deliver to
the Stockholders, in accordance with their respective Proportional Interest in Cash and Proportional Interest in Shares, all remaining amounts in the Escrow Fund that are not then subject to any
unsatisfied Claims specified in any Claim Certificate delivered to the Stockholder Representative and the Escrow Agent before the Escrow Termination Date with respect to facts and circumstances
existing prior to the Escrow Termination Date ("Pending Claims"); provided, however, that (i) a Claim
Certificate shall be deemed to have been given hereunder with respect to any Indemnified Loss sought to be collected from an insurance company by an Acquiror Indemnified Party under
Section 12.4 of the Merger Agreement if such Indemnified Loss was incurred within six months prior to the Escrow Termination Date, and notwithstanding such collection efforts the Acquiror shall
deliver such Claim Certificate prior to the Escrow Termination Date and (ii) promptly upon the resolution of all of such Pending Claims in accordance with the provisions of Article XII
of the Merger Agreement and Sections 5 of this Agreement, Escrow Agent shall deliver to the Stockholders, in accordance with their respective Proportional Interests, all remaining amounts in the
Escrow Fund not required to satisfy the Pending Claims. 

        5.    CLAIMS FOR INDEMNIFICATION AGAINST THE ESCROW FUND.    

        (a)   The
Acquiror Indemnified Parties shall make any claims for Indemnified Losses to be satisfied from the Escrow Fund by delivering a Claim Certificate (as defined below)
to the Escrow Agent and, concurrently, a copy of such Claim Certificate to the Stockholder Representative. For purposes hereof, "Claim Certificate" shall mean a
certificate signed by any officer of Acquiror or the Surviving Corporation, as the case may be. Such Claim Certificate shall (i) state that the Acquiror Indemnified Party claiming
indemnification has paid, incurred or properly accrued or reasonably anticipates that it will have to pay, incur or accrue Indemnified Losses and the amount of such Indemnified Losses
("Claim Amount") and (ii) specify in reasonable detail the individual items of Indemnified Losses included in the amount so stated, the date each such item was
paid, incurred or properly accrued or the basis for such anticipated liability and the nature of the misrepresentation, breach of warranty or covenant to which such Indemnified Losses are related.
Unless the Stockholder Representative shall have delivered an Objection (as defined below) in accordance with Section 5(b) hereof, the Escrow Agent shall, on the
30th day (or such earlier day as the Stockholder Representative shall authorize in 

3

 

writing
to the Escrow Agent) after receipt of a Claim Certificate, deliver to the Acquiror Indemnified Party (in accordance with Sections 5(d) and 5(e) below) the portion of the Escrow Fund equal to
Claim Amount. 

        (b)   If
the Stockholder Representative objects to any claim or claims made in any Claim Certificate to recover Indemnified Losses, the Stockholder Representative must deliver
to the Escrow Agent a writing setting forth the basis for such objection within 30 days after delivery of the Claim Certificate to the Stockholder Representative (an
"Objection"). Within 10 days of receipt of an Objection properly made, the Escrow Agent shall deliver to the Acquiror Indemnified Party from the Escrow Fund such
portion of the Claim Amount, if any, which is not subject to such Objection. Thereafter, the Escrow Agent shall not distribute to the Acquiror Indemnified Party any further portion of the Claim Amount
stated in the Claim Certificate which is subject to such Objection out of the Escrow Fund until the Escrow Agent shall have received (A) a certified copy of any final non-appealable
judicial order or judgment determining the dispute and setting forth the portion of the Claim Amount, if any, which such Acquiror Indemnified Party is entitled to receive out of the Escrow Fund with
respect to such Objection or (B) a copy of a written memorandum signed by the Acquiror Indemnified Party and the Stockholder Representative resolving such dispute and setting forth the amount
of the Claim Amount, if any, which such Acquiror Indemnified Party is entitled to receive out of the Escrow Fund with respect to such Objection, in either case, in accordance with
Section 5(c) below. The Escrow Agent will deliver such portion of the Claim Amount from the Escrow Fund to the Acquiror Indemnified Party within ten
(10) days after the receipt of such final non-appealable judicial order, judgment or signed memorandum, as the case may be. 

        (c)   If
the Stockholder Representative has delivered an Objection and the Stockholder Representative and the Acquiror Indemnified Parties have agreed upon the rights of the
respective parties with respect to each claim for indemnification hereunder subject to such Objection, then a memorandum setting forth such agreement shall be prepared and signed by the Stockholder
Representative and the Acquiror Indemnified Parties and furnished to the Escrow Agent. Such memorandum shall state the portion of the Claim Amount to be distributed to the Acquiror Indemnified Party
out of the Escrow Fund in connection with such Objection. The Escrow Agent shall be entitled to rely on any such memorandum and distribute such portion of the Claim Amount out of the Escrow Fund in
accordance with the terms thereof. If no agreement is reached by the parties, then Acquiror or the Surviving Corporation or the Stockholder Representative, on behalf of the Stockholders, may commence
legal action either to obtain a judicial determination of the dispute (unless the amount of the Indemnified Losses at issue is pending litigation with a third party, in which event the action shall
not be commenced until the amount of such Indemnified Losses is ascertained or such parties agree to the commencement of such action). 

        (d)   All
distributions of the Escrow Fund pursuant to this Section 5 shall be made with a combination of Escrowed Shares and Escrowed Cash
in such respective amounts determined as follows: (i) a number of Escrowed Shares with an aggregate Acquiror Stock Price (as defined below) equal to the Escrowed Shares Percentage (as defined
below) multiplied by the amount of the payable portion of the Claim Amount and (ii) an amount of Escrowed Cash equal to the Escrowed Cash Percentage (as defined below) multiplied by the amount
of the payable portion of the Claim Amount. For purposes hereof, "Escrowed Shares Percentage" shall mean 80 percent and "Escrowed Cash
Percentage" shall mean 20 percent. 

        (e)   For
the purposes of determining the number of Escrowed Shares to be delivered to Acquiror out of the Escrow Fund pursuant to this
Section 5, each share of Acquiror Common Stock shall be valued at the Acquiror Stock Price (as adjusted, as applicable, for any stock splits, stock combinations,
recapitalizations and similar actions or transactions). For purposes of this Agreement "Acquiror Stock Price" shall mean the average closing price of the Acquiror Common
Stock on the Nasdaq National Market as reported in The Wall Street Journal for the five (5) trading days ending one (1) business day 

4

 

prior
to date that the Escrowed Shares are distributed out of the Escrow Fund by the Escrow Agent; provided, however, in the event that an
Objection is made with respect to a Claim then the Acquiror Stock Price shall mean the average closing price of the Acquiror Common Stock on the Nasdaq National Market as reported in The Wall Street
Journal for the five (5) consecutive trading days ending (1) business day prior to the date that the Claim is delivered to the Stockholder Representative. 

        (f)    Whenever
this Agreement provides that the Escrow Agent shall disburse Escrowed Shares to an Acquiror Indemnified Party, the Escrow Agent shall deliver to the transfer
agent for the Acquiror the stock certificate representing such Escrowed Shares and the transfer agent shall deliver to the Escrow Agent one stock certificate representing the number of shares to be
delivered to the Acquiror Indemnified Party and another stock certificate representing the balance of Escrowed Shares remaining. The Escrow Agent shall then deliver to the Acquiror Indemnified Party a
stock certificate representing the appropriate number of Escrowed Shares determined in accordance with Sections 5(d) and 5(e). Deliveries of Escrowed Shares pursuant to this
Section 5 shall made on a pro rata basis from the Escrow Fund in accordance with the Stockholders' respective Proportional Interests in Shares. 

        6.    LIMITATIONS ON CLAIMS FROM ESCROW FUND.    The rights of the Acquiror Indemnified
Parties to make any claims against the Escrow Fund shall be subject to all of the limitations set forth in the Merger Agreement, including, without limitation, the limitations set forth in
Section 12.4 thereof. 

        7.    STOCKHOLDER REPRESENTATIVE.    

        (a)   By
virtue of the approval of the Merger Agreement by the holders of Company Common Stock and Company Preferred Stock (as such terms are defined in the Merger Agreement),
John A. Friede shall (subject to Section 7(d) hereof) be the Stockholder Representative hereunder and shall be constituted and appointed as agent and attorney-in-fact
for and on behalf of each of the Stockholders. The Stockholder Representative shall have full power and authority to represent all of the Stockholders and their successors with respect to all matters
arising under this Agreement and all actions taken by the Stockholder Representative hereunder and thereunder shall be binding upon all Stockholders and their successors as if expressly confirmed and
ratified in writing by each of them, including, without limitation, resolving all claims relating to the Escrow Fund and any indemnification claims and obligations. The Stockholder Representative
shall take any and all actions which such Stockholder Representative believes are necessary or appropriate under this Agreement for and on behalf of the Stockholders, as fully as if such Stockholder
Representative were acting on his own behalf, including (without limitation) consenting to, compromising or settling issues with respect to the Escrow Fund and all such indemnity claims with Acquiror
or the Surviving Corporation under this Agreement, taking any and all other actions specified in or contemplated by this Agreement, and engaging counsel or accountants in connection with the foregoing
matters. Without limiting the generality of the foregoing, the Stockholder Representative shall have full power and authority to interpret all the terms and provisions, and to consent to any
amendment, of this Agreement on behalf of all Stockholders and such successors. No bond shall be required of the Stockholder Representative and the Stockholder Representative shall receive no
compensation for services hereunder[; provided, however, that Stockholder Representative shall be entitled to reimbursement for reasonable expenses incurred by Stockholder Representative
in performing his duties hereunder (including reasonable attorneys' fees), which reimbursement shall be made solely out of the Escrow Fund. 

        (b)   The
Stockholder Representative shall not be liable to Stockholders for any act done or omitted hereunder as Stockholder Representative while acting in good faith and in
the exercise of reasonable judgment, and any act done or omitted pursuant to the written advice of counsel shall be conclusive evidence of such good faith. 

        (c)   The
Stockholder Representative shall treat confidentially and not disclose any nonpublic information from or about Acquiror or the Surviving Corporation to anyone,
except as may be 

5

 

necessary
in connection with any legal proceeding to enforce the Stockholder's rights under this Agreement or the Merger Agreement or as otherwise required by law. 

        (d)   The
Stockholder Representative may resign, and may be removed and a successor named by Stockholders having, in the aggregate, Subaccounts containing at least
50 percent or more of the total fair market value of the Escrow Fund. The Escrow Agent shall be promptly notified in writing of any such change in the Stockholder Representative. Upon any such
replacement, the replacement Stockholder Representative shall be deemed the "Stockholder Representative" for all purposes hereunder. 

        8.    ACTIONS OF THE STOCKHOLDER REPRESENTATIVE.    A decision, act, consent or
instruction of the Stockholder Representative shall be deemed to constitute a decision of all the Stockholders and shall be final, binding and conclusive upon each such Stockholder of the Company, and
Acquiror may rely upon any decision, act, consent or instruction of the Stockholder Representative as being the decision, act, consent or instruction of each and every such Stockholder. The Escrow
Agent, the Acquiror and the Surviving Corporation are hereby relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent or instruction of the
Stockholder Representative. 

        9.    FEES OF THE ESCROW AGENT.    The fees of the Escrow Agent, including the normal
costs of administering the Escrow Fund as set forth on the Fee Schedule attached hereto as Annex B, any expenses incurred by the Escrow Agent in performing its obligations
pursuant to Section 4(d) herein and all fees and costs associated with the Escrow Agent's administration of Indemnified Losses, shall be paid (i) 50 percent by the Acquiror (out
of its own funds), and (ii) fifty percent by the Stockholders (which shall be paid solely out of the Escrow Fund). 

        10.    ESCROW AGENT'S DUTIES    

        (a)   The
Escrow Agent shall be obligated only for the performance of such duties as are specifically set forth herein (and no implied duties). 

        (b)   In
the event the Escrow Agent reasonably believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication,
paper or document received by the Escrow Agent hereunder, the Escrow Agent may refrain from taking any action and shall be fully protected and shall not be liable in any way to Acquiror, the Surviving
Corporation, the Stockholder Representative or any Stockholder or other Person for refraining from taking such action, unless the Escrow Agent receives written instructions signed by Acquiror and the
Stockholder Representative which eliminates such ambiguity or uncertainty to the reasonable satisfaction of Escrow Agent. 

        11.    LIABILITY OF THE ESCROW AGENT.    In performing any of its duties under this
Agreement, the Escrow Agent shall not be liable to any party for damages, losses or expenses, except in the event of gross negligence or willful misconduct on the part of the Escrow Agent. The Escrow
Agent shall not incur any such liability for any action taken or omitted in reliance upon any instrument, including any written statement or affidavit provided for in this Agreement that the Escrow
Agent shall reasonably and in good faith believe to be genuine. In addition, the Escrow Agent may consult with independent legal counsel in connection with its duties under this Agreement and shall be
fully protected in any act taken, suffered or permitted by it in good faith and reasonable reliance on the advice of counsel. The Escrow Agent shall not be responsible for good faith mistakes with
respect to determining and verifying the authority of any Person acting or purporting to act on behalf of any party to this Agreement to the extent the Escrow Agent is not grossly negligent. 

        12.    SUCCESSOR ESCROW AGENTS.    Any Person that is the successor of Escrow Agent, by
merger, consolidation or transfer of substantially all the business of the Escrow Agent, shall be the Escrow Agent under this Escrow Agreement without further act. 

6

 

        13.    DISPUTE RESOLUTION.    If any controversy arises between the parties to this
Agreement, or with any other party, concerning the subject matter of the Escrow Fund or the terms and conditions hereof, the Escrow Agent will not be required to determine the controversy or to take
any action regarding it. The Escrow Agent may hold all documents and funds and may wait for settlement of any such controversy by final appropriate legal proceedings or other means as, in the Escrow
Agent's reasonable discretion, it may require, despite what may be set forth elsewhere in this Agreement. 

        14.    INDEMNIFICATION OF ESCROW AGENT.    Acquiror [(but only to the extent
of the amount available from the Escrow Fund)] and the Stockholder Representative, on behalf of the Stockholders (but only out of, and only to the extent of the amount available from, the
Escrow Fund) jointly and severally agree to indemnify and hold the Escrow Agent harmless against any and all losses, claims, damages, liabilities and expenses, including reasonable costs of
investigation, outside counsel fees, and disbursements that may be imposed on the Escrow Agent, or incurred by it in connection with the performance of its duties under this Agreement, including but
not limited to any arbitration or litigation arising from this Agreement or involving its subject matter, unless such loss, claim, damage, liability or expense shall be caused by the negligence or
willful misconduct on the part
of the Escrow Agent. Nothing contained in this Section 14 shall impair the respective rights of the Stockholder Representative, on behalf of the Stockholders, and
the Acquiror against the other. 

        15.    RESIGNATION OF ESCROW AGENT.    The Escrow Agent may resign at any time upon
giving at least 30 days written notice to the other parties; provided, however, that no such resignation shall become effective until the appointment of a successor Escrow Agent which shall be
accomplished as follows: Acquiror and the Stockholders Representative shall use all reasonable efforts to agree on a successor Escrow Agent within 30 days after receiving such notice. If the
parties fail to agree on a successor Escrow Agent within such time, then the Escrow Agent shall have the right to appoint a successor Escrow Agent, provided that the successor so chosen shall have
capital, surplus and undivided profits of at least $200,000,000. The successor Escrow Agent shall execute and deliver to the Escrow Agent an instrument accepting such appointment, and the successor
Escrow Agent shall, without further acts, be vested with all the property rights, powers and duties of the predecessor Escrow Agent as if originally named as Escrow Agent herein. The predecessor
Escrow Agent then shall be discharged from any further duties and liability under this Agreement. 

        16.    MISCELLANEOUS.    

        (a)    Assignment; Binding Upon Successors and Assigns.    None of the parties hereto may
assign any of its rights or obligations hereunder without the prior written consent of the other parties; provided, however, that the Stockholders' interest in this Agreement and the Escrow Fund
(prior to the disbursement thereof) may be transferred by operation of law, intestacy, devise or descent. This Agreement will be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. 

        (b)    Severability.    Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and
provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad
as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable 

        (c)    Entire Agreement.    This Agreement, the Merger Agreement, the Annexes hereto, the
documents referenced herein, and the exhibits thereto, constitute the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto. The express terms hereof control and supersede
any course of performance or trade usage inconsistent with any of the terms hereof. 

7

 

        (d)    Notices.    All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally, mailed by registered or certified mail (return receipt requested) or sent via facsimile to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice): 

	 	If to Acquiror to:
	

 	

North American Scientific, Inc.

20200 Sunburst Street

Chatsworth, California 91311

Attention: L. Michael Cutrer, President

Facsimile: (818) 734-5837
	

 	

with a copy to:
	

 	

McDermott, Will & Emery

2049 Century Park East

Suite 3400

Los Angeles, CA 90067-3208

Attention: Mark J. Mihanovic, Esq.

Facsimile: (310) 277-4730
	

 	

If to the Company, to:
	

 	

Nomos Corporation

200 West Kensinger Drive, Suite 100

Cranberry Township, Pennsylvania 16006

Attention: John W. Manzetti, President

Facsimile: (724) 741-8600
	

 	

If to the Stockholders Representative, to:
	

 	

John A. Friede
	

 	

	
 	

 
	 	
	 	 
	 	Attention:	 	
	 	 
	 	Facsimile:	 	
	 	 
	

 	

with a copy to:
	

 	

Cohen & Grigsby

11 Stanwix Street, 15th Floor

Pittsburgh, PA 15222

Attention: Mark I. Baseman, Esq.

Facsimile: (412) 209-0672
	

 	

If to the Escrow Agent, to:
	

 	

U.S. Bank National Association

Corporate Trust Services

60 Livingston Ave. EP-MN-WS3C

St. Paul, MN 55107

Attention: Thomas H. Caruth

Facsimile: 651-495-8096

8

 

        (e)    Other Remedies.    Except as otherwise provided herein, any and all remedies
herein expressly conferred upon a party shall be deemed cumulative with and not exclusive of any other remedy conferred hereby or by law on such party, and the exercise of any one remedy shall not
preclude the exercise of any other. 

        (f)    Amendment and Waivers.    Any term or provision of this Agreement may be amended
only by an instrument in writing signed on behalf of each of the parties hereto. The observance of any term of this Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) only by a writing signed by the party to be bound thereby. The waiver by a party of any breach hereof for default in payment of any amount due hereunder or default in
the performance hereof shall not be deemed to constitute a waiver of any other default or any succeeding breach or default. 

        (g)    Further Assurances.    Each party agrees to reasonably cooperate with the other
parties and to execute such further instruments, documents and agreements and to give such further written assurances, as may be reasonably requested by any other party to better evidence and reflect
the transactions described herein and contemplated hereby and to carry into effect the intents and purposes of this Agreement. 

        (h)    Absence of Third Party Beneficiary Rights.    No provisions of this Agreement are
intended, nor shall be interpreted, to provide or create any third party beneficiary rights or any other rights of any kind in any client, customer, affiliate, shareholder, partner of any party hereto
or any other Person unless specifically provided otherwise herein and except for the Stockholders, and, except as so provided, all provisions hereof shall be solely between the parties to this
Agreement. 

        (i)    Governing Law.    THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING
VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE. 

        (j)    Facsimile    This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be one and the same
instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be
used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes. 

[Remainder
of Page Intentionally Left Blank] 

9

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above. 

	 	 	NORTH AMERICAN SCIENTIFIC, INC.
 
	

 	
 	

By:	

 Name:

Title:
	

 	
 	
NOMOS CORPORATION
 
	

 	
 	

By:	

 Name:

Title:
	

 	
 	
STOCKHOLDERS REPRESENTATIVE
 
	

 	
 	

 	

 Name:
	

 	
 	
U.S. BANK NATIONAL ASSOCIATION
	

 	
 	

By:	

 Name:

Title:

10

 
 
 

ANNEX A    
    
    STOCKHOLDER LIST    
    

11

 
 
 

ANNEX B    
    
    ESCROW AGENT FEES    
    

Annual
fee of $15,000.00 

12

 
 
 

ANNEX C    
    

U.S. BANK TRUST NATIONAL ASSOCIATION

U.S. BANK MONEY MARKET ACCOUNTS

U.S. BANK NATIONAL ASSOCIATION

ACCOUNT DESCRIPTION AND TERMS  

        The U.S. Bank money market accounts are U.S. Bank National Association ("U.S. Bank") deposit accounts designed to meet the needs of Global Escrow and other
Corporate Trust customers of U.S. Bank Trust National Association. The accounts pay competitive variable interest rates, which are determined based upon the customer's aggregated balance. These
accounts are insured by the Federal Deposit Insurance Corporation. 

        Interest
rates currently offered on the accounts are determined at U.S. Bank's discretion and may change daily. U.S. Bank uses the daily balance method to calculate interest on these
accounts. This method applies a daily periodic rate to the principal in the accounts each day. The average daily balance is calculated by adding the principal in an account for each day of the month
and dividing that figure by the number of days in the period. Interest is compounded on a monthly basis. 

        The
owner of the accounts is U.S. Bank Trust National Association as Agent for its customers. All account deposits and withdrawals are performed by U.S. Bank Trust National Association.
U.S. Bank Trust National Association is an affiliate of U.S. Bank. 

        For
further information, call your account representative at U.S. Bank Trust National Association. 

13

QuickLinks

Exhibit 10.3

INDEMNIFICATION ESCROW AGREEMENT

ANNEX A STOCKHOLDER LIST

ANNEX B ESCROW AGENT FEES

ANNEX C

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