UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): February 11, 2009
NORTH
AMERICAN SCIENTIFIC, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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0-26670
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51-0366422
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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20200 Sunburst Street,
Chatsworth, CA
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91311
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (818) 734-8600
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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ý
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 1.01 Entry into a
Material Definitive Agreement
Asset
Purchase Agreement
On February 11, 2009, North American
Scientific, Inc., a Delaware corporation (the “
Company
”), North American Scientific, Inc., a
California corporation and wholly-owned subsidiary of the Company (“
Sub
”), and Best Theratronics, Ltd., a
Canadian federal corporation (“
Purchaser
”), entered into an Asset Purchase
Agreement (the “
Purchase
Agreement
”), as announced
in the press release dated February 11, 2009 attached hereto as Exhibit
99.1.
Pursuant to the terms and subject to the
conditions set forth in the Purchase Agreement, Purchaser agreed to purchase
substantially all of the assets of the Sub relating to the Sub’s prostate
brachytherapy business (the “
Asset
Sale
”) for a purchase price
of $5,000,000 (the “
Purchase
Price
”) and the assumption
of certain liabilities of the Sub. The Purchase Price shall be paid
as follows: (1) $2,000,000 in cash at the closing of the Asset Sale, and (2)
$3,000,000 will be paid within 12 months following the closing of the Asset Sale
pursuant to the provisions of the secured promissory note to be delivered by the
Purchaser to the Sub at the closing of the Asset Sale. The Boards of
Directors of the Company (the “
Board
”) and the Sub have approved the Asset
Sale and the Purchase Agreement and determined that the Purchase Agreement and
the Asset Sale are advisable and both fair to and in the best interest of the
stockholders of the Company and the Sub.
The Purchase Agreement provides that the
Sub will indemnify Purchaser against losses or damages arising out of or
relating to (i) any breach of any representation or warranty, or nonfulfillment
of any covenant by the Sub contained in the Purchase Agreement, (ii) any
liabilities of the Sub retained by the Sub, and (iii) any and all actions,
claims, judgments, costs and expenses incident to the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition of the
same, or in enforcing the indemnity provisions of the Purchase
Agreement.
The Company and Sub have made customary
representations, warranties and covenants in the Purchase Agreement including
that the Company will cause a meeting of its stockholders to be held to consider
the adoption and approval of the Purchase Agreement.
Consummation of the Asset Sale is
subject to customary closing conditions, including, among other things, (i) the
representations and warranties of the parties to the Purchase Agreement shall be
true and correct as of the closing, except as would not be reasonably expected
to have a material adverse effect; (ii) the approval of the Purchase Agreement
by the holders of a majority of the shares of the Company; (iii) the Company and
the Sub executing a non-competition agreement in favor of Purchaser, pursuant to
which the Company and the Sub shall agreed to not compete with Purchaser within
the prostate brachytherapy business, but excluding the Company’s ClearPath
business; (iv) the parties executing a mutual license agreement, pursuant to
which the Purchaser shall be entitled to license certain assets retained by the
Sub and the Company; (v) the Sub shall obtain prepaid product liability
insurance reasonably acceptable to the Purchaser with respect to products
manufactured or sold prior to the closing of the Asset Sale for a period of 5
years from the closing of the Asset Sale in the amount of $5,000,000; and (vi)
the Purchaser’s receipt of a Device Manufacturing License from the California
Department of Health Services.
The Company intends to prepare and file
a proxy statement with the Securities and Exchange Commission (the “
SEC
”) that it will mail to stockholders in
order to obtain stockholder approval for the Purchase Agreement and the Asset
Sale.
The Purchase Agreement provides that if
the necessary conditions to the closing of the Asset Sale have not been
satisfied at or before
July
1, 2009
, then either the
Purchaser or the Sub may terminate the Purchase Agreement.
The foregoing summary of the Purchase
Agreement and the transactions contemplated thereby does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of
the Purchase Agreement attached as Exhibit 2.1, which is incorporated herein by
reference. The Purchase Agreement has been attached to provide
investors with information regarding its terms. It is not intended to
provide any other factual information about the Company or the
Sub. In particular, the assertions embodied in the representations
and warranties contained in the Purchase Agreement are qualified by information
in confidential disclosure schedules provided by the Company and the Sub in
connection with the signing of the Purchase Agreement. These
disclosure schedules contain information that modifies, qualifies and creates
exceptions to the representations and warranties set forth in the Purchase
Agreement. Moreover, certain representations and warranties in the
Purchase Agreement were used for the purpose of allocating risk between the
Company, Sub and the Purchaser, rather than establishing matters of
fact. Accordingly, the representations and warranties in the Purchase
Agreement may not constitute the actual state of facts about the Company, Sub
and the Purchaser.
Management
Agreement
In connection with the Purchase
Agreement, on
February 11,
2009
, the Sub and the
Purchaser entered into Management Agreement (the “
Management
Agreement
”).
Pursuant to the terms and subject to the
conditions set forth in the Management Agreement, effective March 1, 2009, the
Purchaser shall provide management services for the Sub’s prostate brachytherapy
business (the “
Business
”), including (i) the production,
marketing, sale and distribution of products related to the Business to the
Sub’s customers, (ii) oversight of daily operations, (iii) provision of customer
service, (iv) management of accounts payable and accounts receivable, (v)
inventory management, and (v) the execution of contracts of a value less than
$25,000 (other than contracts for the purchases of raw materials) that would be
customary and necessary to the operation of the Business (the “
Management
Services
”). In
consideration of provision of the Management Services, the Purchaser shall be
entitled to collect retain any and all accounts receivable accrued during the
term of the Management Agreement.
The Purchaser shall be responsible for
the payment of all costs and expenses associated with the ordinary operation of
the Business. The Company and the Sub shall retain responsibility for
all costs and expenses associated with corporate governance and the Company’s
ClearPath business.
Pursuant to the Management Agreement,
the Sub has agreed that, during the term of the Management Agreement and for a
period of 2 years thereafter, the Sub shall not solicit the engagement of
certain employees of the Sub associated with the Business.
Unless the Management Agreement is
earlier terminated pursuant to its terms, the Purchaser shall provide the
Management Services until the earlier of (i) the closing of the Asset Sale, or
(ii)
July 31,
2009
.
The foregoing summary of the Management
Agreement and the transactions contemplated thereby does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of
the Management Agreement attached as Exhibit 10.1, which is incorporated herein
by reference.
Additional
Information and Where to Find It
The Company will file a proxy statement
and other documents regarding the proposed transaction described in this press
release with the SEC. Investors and security holders are advised to read the
proxy statement and such other materials when they become available because they
will contain important information about the acquisition and the Company.
Investors and security holders will be able to obtain a free copy of the proxy
statement and any other documents filed by the company from the SEC web site at
www.sec.gov. The Company’s directors and executive officers may be
deemed to be participants in the solicitation of proxies from the stockholders
of the Company in connection with the proposed transaction. Information about
the directors and executive officers of the Company is set forth in the proxy
statement for its 2008 Annual Meeting of Stockholders, which was filed with the
SEC on
March 31,
2008
. Investors and
security holders may obtain additional information regarding the interest of
such participants by reading the proxy statement regarding the proposed
transaction when it becomes available.
Item
9.01 Financial Statements and Exhibits.
Exhibit
Number
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Description
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2.1
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Asset
Purchase Agreement, dated February 11, 2009, by and among the Company, North
American Scientific, Inc., a California corporation, and Best
Theratronics, Ltd.
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10.1
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Management
Agreement, dated February 11, 2009, by and among North American
Scientific, Inc., a California corporation, and Best Theratronics,
Ltd.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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NORTH
AMERICAN SCIENTIFIC, INC.
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February
17, 2009
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By:
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/s/ John
B. Rush
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John
B. Rush
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President
and Chief Executive Officer
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EXHIBIT
INDEX
Exhibit
Number
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Description
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2.1
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Asset
Purchase Agreement, dated February 11, 2009, by and among the Company, North
American Scientific, Inc., a California corporation, and Best
Theratronics, Ltd.
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10.1
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Management
Agreement, dated February 11, 2009, by and among North American
Scientific, Inc., a California corporation, and Best Theratronics,
Ltd.
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