EXHIBIT 10.1
FIRST AMENDMENT TO
EXCLUSIVE MARKETING AND
DISTRIBUTION AGREEMENT
BETWEEN
NORTH AMERICAN SCIENTIFIC, INC.
AND
MENTOR CORPORATION
FIRST AMENDMENT TO
EXCLUSIVE MARKETING AND DISTRIBUTION AGREEMENT
BETWEEN
NORTH AMERICAN SCIENTIFIC, INC.
AND
MENTOR CORPORATION
THIS FIRST AMENDMENT, dated for reference purposes as of February 24, 1999,
pertains to that certain Exclusive Marketing and Distribution Agreement (the
"Agreement"), dated for reference purposes as of June 16, 1997, between NORTH
AMERICAN SCIENTIFIC, INC., a Delaware corporation ("NAMS") and MENTOR
CORPORATION, a Minnesota corporation ("MENTOR") and is made with reference to
the following facts:
RECITALS
A. Sections 1.28 and 2.3 of the Agreement contemplate that, if and when
Pd-103 Sources become available, the Products covered by the Agreement will
include Pd-103 Sources subject to the agreement of the parties with respect
to certain terms related thereto.
B. NAMS has now obtained 510-K pre-marketing approval from the FDA to
market and sell Pd-103 Sources; and
C. Section 7.1.4 of the Agreement contemplates that, if NAMS requires
additional capital to create the manufacturing capacity necessary to produce
Pd-103 Sources, then NAMS shall offer MENTOR the opportunity to provide such
additional required capital on substantially the same terms and conditions as
the Agreement.
D. NAMS has estimated that the present capital cost required to create
a manufacturing capacity for ten thousand (10,000) Pd-103 Sources per week is
$1,500,000.
E. NAMS also estimates that, if an acceptable commercial supply, as
determined by NAMS, of the Pd-103 isotope (the radioactive source
incorporated into the Pd0-103 Source) cannot be obtained, it would presently
require an additional $2,500,000 for the purchase of linear accelerators that
would enable NAMS to produce the Pd-103 isotope for itself.
F. MENTOR is willing to supply so much of the capital as is necessary
to satisfy these capital requirements that NAMS is unable or unwilling to
supply from its own resources in order to preserve the exclusive marketing
and distribution rights for the Pd-103 Sources as contemplated by Section
7.1.4.A. of the Agreement.
AGREEMENTS
NOW, THEREFORE, the parties hereto, intending to be legally bound, do
hereby agree as follows:
FIRST AMENDMENT TO MARKETING AGREEMENT: PAGE 1
1. DUTY OF NAMS TO CREATE PRODUCTION CAPACITY
1.1 NAMS covenants and agrees that as soon as practicable after the
execution of this Amendment, NAMS shall develop and maintain the production
capacity (other than the capacity to produce the Pd-103 isotope) necessary to
produce ten thousand (10,000) Pd-103 Sources per week (the "Development
Project").
1.2 Any subsequent increases in production capacity that are proposed
to be made with capital funding to be provided by MENTOR shall made in
increments of 10,000 Sources per week.
2. FUNDING OF DEVELOPMENT COSTS
2.1 Funding by NAMS. NAMS shall have the right, but not the
obligation, to fund all or any portion of the costs of the Development
Project, including any incremental increases in production capacity.
2.2 Funding by MENTOR. MENTOR shall have the obligation to supply to
NAMS any capital required to complete the Development Project (including the
capacity to produce the Pd-103 isotope if NAMS determines to do so) that NAMS
is unwilling or unable to contribute by purchasing shares of the common
capital stock of NAMS (the "Shares"), generally in accordance with the
provisions of the Stock Purchase Agreement between MENTOR and NAMS dated for
reference purposes as of June 16, 1997 and executed by NAMS and MENTOR
simultaneously with their execution of the Agreement (the "Stock Purchase
Agreement"). Should MENTOR provide all or a part of the additional capital
required to fund the Development Project, then:
2.2.1 Purchase of Capital Stock. The additional capital
contributed by MENTOR hereunder shall be credited against the purchase price
for shares of the Common Stock of NAMS at a price that is equal to one
hundred ten percent (110%) of the average closing price of the shares of the
common stock of NAMS as reported in the Western Edition of the Wall Street
Journal for the twenty (20) trading days preceding the date on which NAMS
gives a written request to a MENTOR for such additional capital pursuant to
Section 3.3, below.
2.2.2 Warranties of MENTOR. MENTOR shall be deemed to have made
all of the warranties and representations to NAMS set forth in Section 7 of
the Stock Purchase Agreement which shall be incorporated herein by reference
as if made on the date on which the Shares are issued to MENTOR.
2.2.3 Warranties of NAMS. NAMS shall be deemed to have made all of
the warranties and representations to MENTOR set forth in Section 6 of the
Stock Purchase Agreement, other than those warranties and representations
contained in Sections 6.3, 6.5, and Sections 6.11.1 through 6.11.3 and all
such warranties and representations not expressly excluded by this Section
2.2.4 are incorporated herein by reference as if made on the date on which
the Shares are issued to MENTOR.
FIRST AMENDMENT TO MARKETING AGREEMENT: PAGE 2
3. DEVELOPMENT PROGRAM
Should NAMS request MENTOR to provide all or a part of the
additional capital required to fund the Development Project, then:
3.1 Preparation and Approval of Budget. NAMS shall first prepare and
submit to MENTOR in writing a development plan (the "Development Plan")
containing (a) a line-item budget setting forth the estimated costs of the
Development Project (the "Project Budget") and (b) a schedule of milestones
reflecting the period of time over which the Development Project will be
carried out (the "Development Program").
3.2 Coordination with MENTOR. NAMS shall consult with MENTOR in the
preparation of the Development Program, and shall give reasonable
consideration to suggestions and requests made by MENTOR in connection
therewith, but if NAMS and MENTOR are unable to agree with respect to the
budget, milestones or payment schedules for the Development Program, then the
decisions of NAMS shall be final and binding on both parties.
3.3 Time of Contribution. MENTOR shall contribute any capital required
to be contributed by it hereunder in cash or immediately available funds
within thirty (30) days after the date on which the Project Budget has been
submitted in accordance with Section 3.1, above, and NAMS shall issue and
deliver to MENTOR share certificates evidencing the Shares being purchased by
MENTOR concurrently with NAMS' receipt of payment therefor.
4. TERMS SHEET: PD-103 SOURCES
There is attached to the Agreement as Schedule 2 a Terms Sheet for
Pd-103 Sources. NAMS shall supply the Pd-103 Sources to MENTOR, and MENTOR
shall have the exclusive right to market and distribute the Pd-103 Sources in
accordance with the terms and conditions of the Agreement and the Terms Sheet
attached as Schedule 2 to this First Amendment to the Agreement.
5. FULL FORCE AND EFFECT
Except as expressly modified by the provisions of this First Amendment
the terms and conditions of the Agreement shall continue in full force and
effect.
(Signatures appear on the following page)
FIRST AMENDMENT TO MARKETING AGREEMENT: PAGE 3
IN WITNESS WHEREOF, both parties have executed this First Amendment to
Exclusive Marketing and Distribution Agreement to be duly executed on the
dates set forth below.
Date: February 24, 1999 Date: February 24, 1999
------------------------ ---------------------------
NORTH AMERICAN SCIENTIFIC INC. MENTOR CORPORATION,
a Delaware corporation a Minnesota corporation
By: /s/ L. XXXXXXX XXXXXX By: /s/ XXXXXXXXXXX X. XXXXXX
------------------------ ---------------------------
L. Xxxxxxx Xxxxxx Xxxxxxxxxxx X. Xxxxxx
Its President Its Chief Executive Officer
ADDRESS FOR NOTICES: ADDRESS FOR NOTICES:
North American Scientific, Inc. Mentor Corporation
00000 Xxxxxxxx Xxxxxx 0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000 Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
PH: (000) 000-0000 PH: (000) 000-0000
FAX: (000) 000-0000 FAX: (000) 000-0000
FIRST AMENDMENT TO MARKETING AGREEMENT: PAGE 4
CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
BEEN FILED SEPARATELY WITH THE COMMISSION.
SCHEDULE 2
TERMS SHEET
(NAMS Pd-103 Sources)
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CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
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CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
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CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
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CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
BEEN FILED SEPARATELY WITH THE COMMISSION.
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CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS
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