Exhibit 10.3
FOURTH A
MENDMENT 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.
A
GREEMENT
N
OW, T
HEREFORE
, 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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(iv)
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the
lesser of the following (the “
Bridge Loan Sublimit ”):
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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:
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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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(ii)
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the
FX Reserve; and
plus
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(iii)
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the
aggregate amount of Cash Management Services
utilizations.
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provided ,
however ,
that Bank shall have the right, in Bank’s discretion, to
modify the above Advance Rates based upon the results of field
audits conducted by Bank.
Letter of Credit Sublimit
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(Section 2.1.2):
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|
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$500,000 .
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Foreign Exchange Sublimit
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(Section 2.1.3):
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$500,000 .
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Cash Management Services Sublimit:
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(Section 2.1.4):
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$500,000 .
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2.4
Consent to Agility Capital, LLC Subordinated Debt.
Notwithstanding
anything to the contrary in the Loan Agreement, Bank hereby
consents to the Borrower issuing up to $750,000 in subordinated
debt to Agility Capital, LLC (“Agility”), which debt
may be secured by a lien on any or all of Borrower’s assets,
provided that Agility execute and deliver to Bank,
on
Bank’s standard form with such changes thereto as are
acceptable to Bank in its good faith business judgment, a
subordination agreement pursuant
to which the debt owed by Borrower to Agility will be fully
subordinated to the Obligations and the lien, if any, granted to
Agility will be fully subordinated to the lien granted in favor of
Bank.
3.
Limitation of Amendments and Forbearance.
3.1 The
amendments and forbearance set forth in Section 2, above, are
effective for the purposes set forth herein and shall be limited
precise
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