FOURTH AMENDMENT AND FORBEARANCE TO LOAN AND SECURITY AGREEMENTDefault Notice Forbearance Agreement |
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Exhibit
10.3
FOURTH
AMENDMENT
AND FORBEARANCE
TO
LOAN
AND SECURITY AGREEMENT
THIS
FOURTH AMENDMENT AND FORBEARANCE to
Loan and Security Agreement
(this “Amendment
and Forbearance”) is entered into on September 14, 2007, by and between
SILICON
VALLEY BANK (“Bank”)
and
the
following (collectively, jointly and severally, the "Borrower") whose address
is
20200 Sunburst Street, Chatsworth, California 91311:
NORTH
AMERICAN SCIENTIFIC,
INC., a
Delaware corporation (“NASI”); and
NORTH
AMERICAN SCIENTIFIC, INC., a California corporation (“NASI-CA”).
RECITALS
A. Bank
and
Borrower have entered into that certain Loan and Security Agreement, with an
Effective Date of October 5, 2005 (as the same has been, and may hereafter
from
time to time be amended, modified, supplemented or restated, the “Loan
Agreement”).
B. Bank
has
extended credit to Borrower for the purposes permitted in the Loan Agreement.
C. Borrower
is currently in default of the Loan Agreement for failing to comply with the
Minimum Tangible Net Worth Financial Covenant set forth in Section 5 of the
Amended and Restated Schedule 2 to Loan and Security Agreement for the month
ending July 31, 2007 and August 31, 2007 (the “Existing Defaults”).
D. Borrower
has requested that Bank forbear from exercising its rights and remedies against
Borrower from the date hereof until such time as Bank determines in its
discretion to cease such forbearance (the “Forbearance Period”). Although Bank
is under no obligation to do so, Bank is willing to forbear from exercising
its
rights and remedies against Borrower through the Forbearance Period on the
terms
and conditions set forth in this Amendment and Forbearance, so long as Borrower
complies with the terms, covenants and conditions set forth in this Amendment
and Forbearance in a timely manner. Moreover, the parties desire to amend the
Loan Agreement as herein set forth.
1
AGREEMENT
NOW,
THEREFORE,
in
consideration of the foregoing recitals and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:
1. Definitions.
Capitalized terms used but not defined in this Amendment and Forbearance shall
have the meanings given to them in the Loan Agreement.
2. Amendments
and Forbearance to Loan Agreement. The
Loan
Agreement is hereby amended as follows, effective as of the date
hereof:
2.1 Forbearance
Period.
So long
as no Event of Default, other than the Existing Defaults, occurs, subject to
the
terms and conditions set forth herein, Bank shall forbear from filing any legal
action or instituting or enforcing any rights and remedies it may have against
Borrower through the Forbearance Period. Except as expressly provided herein,
this Amendment and Forbearance does not constitute a waiver or release by Bank
of any Obligations or of any existing Event of Default (other than the Existing
Defaults) or of any Event of Default which may arise in the future after the
date of execution of this Amendment and Forbearance. If Borrower does not comply
with the terms of this Amendment and Forbearance, Bank shall have no further
obligations under this Amendment and Forbearance and shall be permitted to
exercise at such time any rights and remedies against Borrower as it deems
appropriate in its sole and absolute discretion. Borrower understands that
Bank
has made no commitment and is under no obligation whatsoever to grant any
additional extensions of time at the end of the Forbearance Period.
2.2 Forbearance
Terms.
Repayment and performance of all obligations of Borrower to Bank under the
Loan
Agreement and this Amendment and Forbearance shall be secured by the
Collateral.
2.3 Modified
Credit Limit (Reduction of Revolving Line Credit Amount and Deletion of NOMOS
Corporation).
Section
1 of the Amended and Restated Schedule 2 to Loan and Security Agreement is
hereby amended to read as follows:
1.
CREDIT
LIMIT
(Section
2.1.1): An
amount
not to exceed:
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(a)
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the
lesser of (1) $3,000,000
at
any one time outstanding (the “Revolving
Line Credit Amount”)
or (2) the sum of the following (the “Borrowing
Base”):
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(i)
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up
to 80%
(an
“Advance Rate”) of the amount of NASI Eligible Accounts, plus
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(ii)
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up
to 80%
(an
“Advance Rate”) of the amount of NASI-CA Eligible Accounts, plus
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2
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[omitted];
plus
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(iv)
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the
lesser of the following (the “Bridge
Loan Sublimit”):
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(A)
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$1,500,000
or
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(B)
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the
sum of:
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(I)
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20%
(an
“Advance Rate) of the amount of NASI-CA Eligible Accounts, plus
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(II)
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100%
(an Advance Rate) of the amount of NASI-CA Accounts not deemed to
be
Eligible Accounts;
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provided,
however,
in no
event shall the amount of the Bridge Loan Sublimit exceed $750,000
until
such time as Borrower has received a signed term sheet dated after the date
hereof, satisfactory to Silicon in its sole discretion, for the receipt by
Borrower of at least $10,000,000 for the issuance of additional equity
securities of Borrower.
minus
(b) the
sum
of the following:
3
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(i)
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the
amount of all outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit); plus
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