SIXTH AMENDMENT AND FORBEARANCE TO LOAN AND SECURITY AGREEMENT
Exhibit
10.44
SIXTH
AMENDMENT
AND FORBEARANCE
TO
THIS
SIXTH AMENDMENT AND FORBEARANCE to
Loan and Security Agreement
(this “Amendment
and Forbearance”) is entered into on October 29, 2007, by and between
SILICON
VALLEY BANK (“Bank”)
and
the
following (collectively, jointly and severally, the "Borrower") whose address
is
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇:
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 each of
the
months ending July 31, 2007, August 31, 2007 and September 30, 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.
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 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
Maturity Date. The
Maturity Date set forth in Section 4 of the Amended and Restated Schedule 2
to
Loan and Security Agreement is hereby amended to read as follows:
4.
MATURITY
DATE
| (Section 13.1): |
November
20, 2007.
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Notwithstanding
the foregoing, the Maturity Date with respect to the Bridge Loan
Sublimit
shall be the earlier of (i) November 20, 2007 or (ii) the date Borrower
closes the private investment public equity transaction of which
Silicon
has been advised by Borrower (which Borrower has informed Silicon
would
result in the receipt of more than $15,000,000 net cash proceeds
to
Borrower) (the “PIPE”).
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2.4 Consent
to ▇▇▇▇▇▇ Subordinated Debt. Notwithstanding
anything to the contrary in the Loan Agreement, Bank hereby consents to the
Borrower issuing up to $500,000 in subordinated debt to ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ (or
an
entity owned or controlled by ▇▇. ▇▇▇▇▇▇) (“▇▇▇▇▇▇”), which debt shall be
unsecured, provided that ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ will be fully subordinated to
the
Obligations.
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 precisely as written and
shall not be deemed to (a) be a consent to any amendment, waiver or
modification of any other term or condition of any Loan Document, or
(b) otherwise prejudice any right or remedy which Bank may now have or may
have in the future under or in connection with any Loan Document.
3.2 This
Amendment and Forbearance shall be construed in connection with and as part
of
the Loan Documents and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Loan Documents, except as herein
amended, are hereby ratified and confirmed and shall remain in full force and
effect.
4. Representations
and Warranties.
To
induce Bank to enter into this Amendment and Forbearance, Borrower hereby
represents and warrants to Bank as follows:
4.1 Immediately
after giving effect to this Amendment and Forbearance (a) the
representations and warranties contained in the Loan Documents are true,
accurate and complete in all material respects as of the date hereof (except
to
the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date), and (b) no Event of
Default has occurred and is continuing (other than the Existing
Defaults);
4.2 Borrower
has the corporate power and authority to execute and deliver this Amendment
and
Forbearance and to perform its obligations under the Loan Agreement, as amended
by this Amendment and Forbearance;
4.3 The
organizational documents of Borrower delivered to Bank on the Effective Date
remain accurate and complete and have not been amended, supplemented or restated
since the Effective Date and are, and continue to be, in full force and
effect;
4.4 The
execution and delivery by Borrower of this Amendment and Forbearance and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment and Forbearance, have been duly authorized;
4.5 The
execution and delivery by Borrower of this Amendment and Forbearance and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment and Forbearance, do not and will not contravene (a) any
law or regulation binding on or affecting Borrower, (b) any material
agreement by which Borrower or its property is bound, (c) any order,
judgment or decree of any court or other governmental or public body or
authority, or subdivision thereof, binding on Borrower, or (d) the
organizational documents of Borrower;
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4.6 The
execution and delivery by Borrower of this Amendment and Forbearance and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment and Forbearance, do not require any order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by any governmental or public body or authority, or
subdivision thereof, binding on either Borrower, except as already has been
obtained or made; and
4.7 This
Amendment and Forbearance has been duly executed and delivered by Borrower
and
is the binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar
laws of general application and equitable principles relating to or affecting
creditors’ rights.
5. Prior
Agreement.
The
Loan Documents are hereby ratified and reaffirmed and shall remain in full
force
and effect. This Amendment and Forbearance is not a novation and the terms
and
conditions of this Amendment and Forbearance shall be in addition to and
supplemental to all terms and conditions set forth in the Loan Documents. In
the
event of any conflict or inconsistency between this Amendment and Forbearance
and the terms of such documents, the terms of this Amendment and Forbearance
shall be controlling, but such document shall not otherwise be affected or
the
rights therein impaired.
6. Release
by Borrower.
6.1 FOR
GOOD AND VALUABLE CONSIDERATION,
Borrower hereby forever relieves, releases, and discharges Bank and its present
or former employees, officers, directors, agents, representatives, attorneys,
and each of them, from any and all claims, debts, liabilities, demands,
obligations, promises, acts, agreements, costs and expenses, actions and causes
of action, of every type, kind, nature, description or character whatsoever,
whether known or unknown, suspected or unsuspected, absolute or contingent,
arising out of or in any manner whatsoever connected with or related to facts,
circumstances, issues, controversies or claims existing or arising from the
beginning of time through and including the date of execution of this Amendment
and Forbearance (collectively “Released
Claims”).
Without limiting the foregoing, the Released Claims shall include any and all
liabilities or claims arising out of or in any manner whatsoever connected
with
or related to the Loan Documents, the Recitals hereto, any instruments,
agreements or documents executed in connection with any of the foregoing or
the
origination, negotiation, administration, servicing and/or enforcement of any
of
the foregoing.
6.2 In
furtherance of this release, Borrower expressly acknowledges and waives any
and
all rights under Section 1542 of the California Civil Code, which provides
as
follows:
“A
general release
does not
extend to claims which the creditor does not know or expect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.” (Emphasis
added.)
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6.3 By
entering into this release, Borrower recognizes that no facts or representations
are ever absolutely certain and it may hereafter discover facts in addition
to
or different from those which it presently knows or believes to be true, but
that it is the intention of Borrower hereby to fully, finally and forever settle
and release all matters, disputes and differences, known or unknown, suspected
or unsuspected; accordingly, if Borrower should subsequently discover that
any
fact that it relied upon in entering into this release was untrue, or that
any
understanding of the facts was incorrect, Borrower shall not be entitled to
set
aside this release by reason thereof, regardless of any claim of mistake of
fact
or law or any other circumstances whatsoever. Borrower acknowledges that it
is
not relying upon and has not relied upon any representation or statement made
by
Bank with respect to the facts underlying this release or with regard to any
of
such party’s rights or asserted rights.
6.4 This
release may be pleaded as a full and complete defense and/or as a
cross-complaint or counterclaim against any action, suit, or other proceeding
that may be instituted, prosecuted or attempted in breach of this release.
Borrower acknowledges that the release contained herein constitutes a material
inducement to Bank to enter into this Amendment and Forbearance, and that Bank
would not have done so but for Bank’s expectation that such release is valid and
enforceable in all events.
6.5 Borrower
hereby represents and warrants to Bank, and Bank is relying thereon, as
follows:
(a) Except
as
expressly stated in this Amendment and Forbearance, neither Bank nor any agent,
employee or representative of Bank has made any statement or representation
to
Borrower regarding any fact relied upon by Borrower in entering into this
Amendment and Forbearance.
(b) Borrower
has made such investigation of the facts pertaining to this Amendment and
Forbearance and all of the matters appertaining thereto, as it deems
necessary.
(c) The
terms
of this Amendment and Forbearance are contractual and not a mere recital.
(d) This
Amendment and Forbearance has been carefully read by Borrower, the contents
hereof are known and understood by Borrower, and this Amendment and Forbearance
is signed freely, and without duress, by Borrower.
(e) Borrower
represents and warrants that it is the sole and lawful owner of all right,
title
and interest in and to every claim and every other matter which it releases
herein, and that it has not heretofore assigned or transferred, or purported
to
assign or transfer, to any person, firm or entity any claims or other matters
herein released. Borrower shall indemnify Bank, defend and hold it harmless
from
and against all claims based upon or arising in connection with prior
assignments or purported assignments or transfers of any claims or matters
released herein.
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7. Counterparts.
This
Amendment and Forbearance may be executed in any number of counterparts and
all
of such counterparts taken together shall be deemed to constitute one and the
same instrument.
8. Effectiveness.
This
Amendment and Forbearance shall be deemed effective upon (a) the due execution
and delivery to Bank of this Amendment and Forbearance by each party hereto
and
(b) Borrower’s payment of an extension fee (with respect to the Revolving
Line Credit Amount) in an amount equal to $450.
9. Covenant
Regarding Payment of Fee for Extension of Bridge Loan Sublimit and Continued
Forbearance.
In
consideration for Bank extending the Maturity Date of the Bridge Loan Sublimit
and for Bank continuing to forbear from exercising its right and remedies as
set
forth herein, Borrower covenants and agrees that it shall pay to Bank an
extension fee in an amount equal to $250 per day from November 9, 2007 until
(and such amount shall be payable on) the earlier of (i) November 20, 2007
or
(ii) the date Borrower closes the PIPE. The foregoing is in addition to the
$250
per day fee Borrower has agreed to pay Bank pursuant to that certain Fifth
Amendment and Forbearance to Loan and Security Agreement.
10. Governing
Law.
This
Amendment and Forbearance and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of the State
of
California.
[Signature
page follows.]
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In
Witness Whereof, the
parties hereto have caused this Amendment and Forbearance to be duly executed
and delivered as of the date first written above.
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“Borrower”:
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“Bank”:
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NORTH
AMERICAN
SCIENTIFIC,
INC.
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SILICON
VALLEY BANK
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A
Delaware corporation
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By
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/s/▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
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By
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/s/▇▇▇▇▇
▇▇▇▇▇▇▇▇
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President
or Vice President
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Title
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Vice
President
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“Borrower”:
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NORTH
AMERICAN
SCIENTIFIC,
INC.
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A
California corporation
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By
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/s/▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
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President
or Vice President
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