Exhibit 10.3
INVESTORS’ RIGHTS AGREEMENT
FOR
COMPACT PARTICLE ACCELERATION CORPORATION

 

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TABLE OF CONTENTS

              Page  
 
       
1. Definitions
    1  
 
       
2. Registration Rights
    4  
 
       
2.1 Demand Registration
    4  
2.2 Company Registration
    5  
2.3 Underwriting Requirements
    5  
2.4 Obligations of the Company
    7  
2.5 Furnish Information
    8  
2.6 Expenses of Registration
    8  
2.7 Delay of Registration
    9  
2.8 Indemnification
    9  
2.9 Reports Under Exchange Act
    11  
2.10 Restrictions on Transfer
    12  
2.11 Termination of Registration Rights
    13  
 
       
3. Additional Covenants
    13  
 
       
3.1 Insurance
    13  
3.2 Qualified Small Business Stock
    13  
3.3 Successor Indemnification
    14  
3.4 Termination of Covenants
    14  
 
       
4. Miscellaneous
    14  
 
       
4.1 Successors and Assigns
    14  
4.2 Governing Law
    15  
4.3 Counterparts; Facsimile
    15  
4.4 Titles and Subtitles
    15  
4.5 Notices
    15  
4.6 Amendments and Waivers
    15  
4.7 Severability
    16  
4.8 Aggregation of Stock
    16  
4.9 Additional Investors
    16  
4.10 Entire Agreement
    16  
4.11 Dispute Resolution
    16  
4.12 Delays or Omissions
    16  
 
       
Schedule A — Schedule of Investors
       

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INVESTORS’ RIGHTS AGREEMENT
     THIS INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is made as of the 25th
day of April, 2008, by and among Compact Particle Acceleration Corporation, a
Wisconsin corporation (the “Company”), each of the investors listed on
Schedule A hereto (each of which is referred to in this Agreement as an
“Investor”), and any Additional Purchaser (as defined in the Purchase Agreement)
that acquires Series B Common Stock and becomes a party to this Agreement in
accordance with Section 4.9 hereof.
RECITALS
     WHEREAS, the Company and the Investors are parties to the Stock Purchase
Agreement of even date herewith (the “Purchase Agreement”); and
     WHEREAS, in order to induce the Company to enter into the Purchase
Agreement and to induce the Investors to invest funds in the Company pursuant to
the Purchase Agreement, the Investors and the Company hereby agree that this
Agreement shall govern the rights of the Investors to cause the Company to
register shares of Common Stock issuable to the Investors, to receive certain
information from the Company, and to participate in future equity offerings by
the Company, and shall govern certain other matters as set forth in this
Agreement;
     NOW, THEREFORE, the parties hereby agree as follows:
     1. Definitions. For purposes of this Agreement:
          1.1 “Affiliate” means, with respect to any specified Person, any other
Person who, directly or indirectly, controls, is controlled by, or is under
common control with such Person, including without limitation any general
partner, managing member, officer or director of such Person or any venture
capital fund now or hereafter existing that is controlled by one or more general
partners or managing members of, or shares the same management company with,
such Person.
          1.2 “Common Stock” means shares of the Company’s common stock, $0.001
par value per share.
          1.3 “Damages” means any loss, damage, or liability (joint or several)
to which a party hereto may become subject under the Securities Act, the
Exchange Act, or other federal or state law, insofar as such loss, damage, or
liability (or any action in respect thereof) arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement of the Company, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto; (ii) an omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; or (iii) any violation or alleged violation by the
indemnifying party (or any of its agents or Affiliates) of the Securities Act,
the Exchange Act, any state securities law, or any rule or regulation
promulgated under the Securities Act, the Exchange Act, or any state securities
law.

 

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          1.4 “Derivative Securities” means any securities or rights convertible
into, or exercisable or exchangeable for (in each case, directly or indirectly),
Common Stock, including options and warrants.
          1.5 “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
          1.6 “Excluded Registration” means (i) a registration relating to the
sale of securities to employees of the Company or a subsidiary pursuant to a
stock option, stock purchase, or similar plan; (ii) a registration relating to
an SEC Rule 145 transaction; (iii) a registration on any form that does not
include substantially the same information as would be required to be included
in a registration statement covering the sale of the Registrable Securities; or
(iv) a registration in which the only Common Stock being registered is Common
Stock issuable upon conversion of debt securities that are also being
registered.
          1.7 “Form S-1” means such form under the Securities Act as in effect
on the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC.
          1.8 “Form S-2” means such form under the Securities Act as in effect
on the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC.
          1.9 “Form S-3” means such form under the Securities Act as in effect
on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC that permits incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
          1.10 “GAAP” means generally accepted accounting principles in the
United States.
          1.11 “Holder” means any holder of Registrable Securities who is a
party to this Agreement.
          1.12 “Immediate Family Member” means a child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, of a natural person referred to herein.
          1.13 “Initiating Holders” means, collectively, Holders who properly
initiate a registration request under this Agreement.
          1.14 “IPO” means the Company’s first underwritten public offering of
its Common Stock under the Securities Act.
          1.15 “New Securities” means, collectively, equity securities of the
Company, whether or not currently authorized, as well as rights, options, or
warrants to purchase such

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equity securities, or securities of any type whatsoever that are, or may become,
convertible or exchangeable into or exercisable for such equity securities.
          1.16 “Person” means any individual, corporation, partnership, trust,
limited liability company, association or other entity.
          1.17 “Registrable Securities” means (i) any Series B Common Stock, or
any Series B Common Stock issued or issuable (directly or indirectly) upon
conversion and/or exercise of any other securities of the Company, acquired by
the Investors after the date hereof; and (ii) any Series B Common Stock issued
as (or issuable upon the conversion or exercise of any warrant, right, or other
security that is issued as) a dividend or other distribution with respect to, or
in exchange for or in replacement of, the shares referenced in clause (i) above;
excluding in all cases, however, any Registrable Securities sold by a Person in
a transaction in which the applicable rights under this Agreement are not
assigned pursuant to Section 6.1, and excluding for purposes of Section 2 any
shares for which registration rights have terminated pursuant to Section 2.11 of
this Agreement.
          1.18 “Registrable Securities then outstanding” means the number of
shares determined by adding the number of shares of outstanding Series B Common
Stock that are Registrable Securities and the number of shares of Series B
Common Stock issuable (directly or indirectly) pursuant to then exercisable
and/or convertible securities that are Registrable Securities.
          1.19 “Restricted Securities” means the securities of the Company
required to bear the legend set forth in Section 2.10(b) hereof.
          1.20 “SEC” means the Securities and Exchange Commission.
          1.21 “SEC Rule 144” means Rule 144 promulgated by the SEC under the
Securities Act.
          1.22 “SEC Rule 144(k)” means Rule 144(k) promulgated by the SEC under
the Securities Act.
          1.23 “SEC Rule 145” means Rule 145 promulgated by the SEC under the
Securities Act.
          1.24 “Securities Act” means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
          1.25 “Selling Expenses” means all underwriting discounts, selling
commissions, and stock transfer taxes applicable to the sale of Registrable
Securities, and fees and disbursements of counsel for any Holder, except for the
fees and disbursements of the Selling Holder Counsel borne and paid by the
Company as provided in Section 2.6.
          1.26 “Series B Common Stock” means, collectively, shares of the
Company’s Common Stock designated as Series B Common Stock.

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          1.27 “TomoTherapy” means TomoTherapy, Incorporated, a Wisconsin
corporation.
     2. Registration Rights. The Company covenants and agrees as follows:
          2.1 Demand Registration.
               (a) Form S-1 Demand. If at any time after the earlier of (i) five
(5) years after the date of this Agreement or (ii) one hundred eighty (180) days
after the effective date of the registration statement for the IPO, the Company
receives a request from Holders of a majority of the Registrable Securities then
outstanding that the Company file a Form S-1 registration statement with respect
to at least forty percent (40%) of the Registrable Securities then outstanding,
then the Company shall (i) within ten (10) days after the date such request is
given, give notice thereof (the “Demand Notice”) to all Holders other than the
Initiating Holders; and (ii) as soon as practicable, and in any event within
sixty (60) days after the date such request is given by the Initiating Holders,
select an underwriter(s) for such offering and within ninety (90) days after
such selection file a Form S-1 registration statement under the Securities Act
covering all Registrable Securities that the Initiating Holders requested to be
registered and any additional Registrable Securities requested to be included in
such registration by any other Holders, as specified by notice given by each
such Holder to the Company within twenty (20) days of the date the Demand Notice
is given, and in each case, subject to the limitations of Section 2.1(c) and
Section 2.3.
               (b) Form S-3 Demand. If at any time when it is eligible to use a
Form S-3 registration statement, the Company receives a request from Holders of
at least thirty percent (30%) of the Registrable Securities then outstanding
that the Company file a Form S-3 registration statement with respect to
outstanding Registrable Securities of such Holders having an anticipated
aggregate offering price, net of Selling Expenses, of at least $5 million, then
the Company shall (i) within ten (10) days after the date such request is given,
give a Demand Notice to all Holders other than the Initiating Holders; and
(ii) as soon as practicable, and in any event within forty-five (45) days after
the date such request is given by the Initiating Holders, file a Form S-3
registration statement under the Securities Act covering all Registrable
Securities requested to be included in such registration by any other Holders,
as specified by notice given by each such Holder to the Company within twenty
(20) days of the date the Demand Notice is given, and in each case, subject to
the limitations of Section 2.1(c) and Section 2.3.
               (c) Notwithstanding the foregoing obligations, if the Company
furnishes to Holders requesting a registration pursuant to this Section 2.1 a
certificate signed by the Company’s chief executive officer stating that in the
good faith judgment of the Company’s Board of Directors it would be materially
detrimental to the Company and its stockholders for such registration statement
to either become effective or remain effective for as long as such registration
statement otherwise would be required to remain effective, because such action
would be materially detrimental to the Company and its stockholders for such
registration statement to be filed and it is therefore necessary to defer the
filing of such registration statement, then the Company shall have the right to
defer taking action with respect to such filing, and any time periods with
respect to filing or effectiveness thereof shall be tolled correspondingly, for
a period of not more than one hundred twenty (120) days after the request

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of the Initiating Holders is given; provided, however, that the Company may not
invoke this right more than once in any twelve (12) month period; and provided,
further, that the Company shall not register any securities for its own account
or that of any other stockholder during such one hundred twenty (120) day period
other than an Excluded Registration.
               (d) The Company shall not be obligated to effect, or to take any
action to effect, any registration pursuant to Section 2.1(a) (i) during the
period that is sixty (60) days before the Company’s good faith estimate of the
date of filing of, and ending on a date that is one hundred eighty (180) days
after the effective date of, a Company-initiated registration, provided, that
the Company is actively employing in good faith commercially reasonable efforts
to cause such registration statement to become effective; (ii) after the Company
has effected a registration pursuant to Section 2.1(a) or 2.1(b); or (iii) if
the Initiating Holders propose to dispose of shares of Registrable Securities
that may be immediately registered on Form S-3 pursuant to a request made
pursuant to Section 2.1(b). The Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to Section 2.1(b)
(i) during the period that is thirty (30) days before the Company’s good faith
estimate of the date of filing of, and ending on a date that is ninety (90) days
after the effective date of, a Company-initiated registration, provided, that
the Company is actively employing in good faith commercially reasonable efforts
to cause such registration statement to become effective; or (ii) if the Company
has effected a registration pursuant to Section 2.1(a) or 2.1(b). A registration
shall not be counted as “effected” for purposes of this Section 2.1(d) until
such time as the applicable registration statement has been declared effective
by the SEC, unless the Initiating Holders withdraw their request for such
registration, elect not to pay the registration expenses therefor, and forfeit
their right to one demand registration statement pursuant to Section 2.6, in
which case such withdrawn registration statement shall be counted as “effected”
for purposes of this Section 2.1(d).
          2.2 Company Registration. If the Company proposes to register
(including, for this purpose, a registration effected by the Company for
stockholders other than the Holders) any of its Common Stock under the
Securities Act in connection with the public offering of such securities solely
for cash (other than in an Excluded Registration), the Company shall, at such
time, promptly give each Holder notice of such registration. Upon the request of
each Holder given within twenty (20) days after such notice is given by the
Company, the Company shall, subject to the provisions of Section 2.3, cause to
be registered all of the Registrable Securities that each such Holder has
requested to be included in such registration. The Company shall have the right
to terminate or withdraw any registration initiated by it under this Section 2.2
before the effective date of such registration, whether or not any Holder has
elected to include Registrable Securities in such registration. The expenses
(other than Selling Expenses) of such withdrawn registration shall be borne by
the Company in accordance with Section 2.6.
          2.3 Underwriting Requirements.
               (a) If, pursuant to Section 2.1, the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 2.1, and the Company shall include such information in the
Demand Notice. The underwriter(s) will be selected by the Company and shall be
reasonably acceptable to a majority in interest of the Initiating Holders. In
such event, the right of any Holder to include such Holder’s Registrable

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Securities in such registration shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company as provided in Section 2.4(e)) enter into an
underwriting agreement in customary form with the underwriter(s) selected for
such underwriting. Notwithstanding any other provision of this Section 2.3, if
the managing underwriter(s) advise(s) the Initiating Holders in writing that
marketing factors require a limitation on the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities that otherwise would be underwritten pursuant hereto, and
the number of Registrable Securities that may be included in the underwriting
shall be allocated among such Holders of Registrable Securities, including the
Initiating Holders, in proportion (as nearly as practicable) to the number of
Registrable Securities owned by each Holder or in such other proportion as shall
mutually be agreed to by all such selling Holders; provided, however, that the
number of Registrable Securities held by the Holders to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriters may round
the number of shares allocated to any Holder to the nearest 100 shares.
               (b) In connection with any offering involving an underwriting of
shares of the Company’s capital stock pursuant to Section 2.2, the Company shall
not be required to include any of the Holders’ Registrable Securities in such
underwriting unless the Holders accept the terms of the underwriting as agreed
upon between the Company and its underwriters, and then only in such quantity as
the underwriters in their sole discretion determine will not jeopardize the
success of the offering by the Company. If the total number of securities,
including Registrable Securities, requested by stockholders to be included in
such offering exceeds the number of securities to be sold (other than by the
Company) that the underwriters in their reasonable discretion determine is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters and the Company in their sole
discretion determine will not jeopardize the success of the offering. If the
underwriters determine that less than all of the Registrable Securities
requested to be registered can be included in such offering, then the
Registrable Securities that are included in such offering shall be allocated
among the selling Holders in proportion (as nearly as practicable to) the number
of Registrable Securities owned by each selling Holder or in such other
proportions as shall mutually be agreed to by all such selling Holders. To
facilitate the allocation of shares in accordance with the above provisions, the
Company or the underwriters may round the number of shares allocated to any
Holder to the nearest 100 shares. Notwithstanding the foregoing, in no event
shall (i) the number of Registrable Securities included in the offering be
reduced unless all other securities (other than securities to be sold by the
Company) are first entirely excluded from the offering, or (ii) the number of
Registrable Securities included in the offering be reduced below twenty percent
(20%) of the total number of securities included in such offering, unless such
offering is the IPO, in which case the selling Holders may be excluded further
if the underwriters make the determination described above and no other
stockholder’s securities are included in such offering. For purposes of the
provision in this Section 2.3(b) concerning apportionment, for any selling
Holder that is a partnership, limited liability company, or corporation, the
partners, members, retired partners, retired members, stockholders, and
Affiliates of such Holder, or the

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estates and Immediate Family Members of any such partners, retired partners,
members, and retired members and any trusts for the benefit of any of the
foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro
rata reduction with respect to such “selling Holder” shall be based upon the
aggregate number of Registrable Securities owned by all Persons included in such
“selling Holder,” as defined in this sentence.
          2.4 Obligations of the Company. Subject to the terms of any
underwriting agreement to which the Company may become a party, whenever
required under this Section 2 to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
               (a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective and, upon the
request of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for a period of up to one
hundred twenty (120) days or, if earlier, until the distribution contemplated in
the registration statement has been completed; provided, however, that (i) such
one hundred twenty (120) day period shall be extended for a period of time equal
to the period the Holder refrains, at the request of an underwriter of Common
Stock (or other securities) of the Company, from selling any securities included
in such registration, and (ii) in the case of any registration of Registrable
Securities on Form S-3 that are intended to be offered on a continuous or
delayed basis, subject to compliance with applicable SEC rules, such one hundred
twenty (120) day period shall be extended for up to ninety (90) days, if
necessary, to keep the registration statement effective until all such
Registrable Securities are sold;
               (b) prepare and file with the SEC such amendments and supplements
to such registration statement, and the prospectus used in connection with such
registration statement, as may be necessary to comply with the Securities Act in
order to enable the disposition of all securities covered by such registration
statement;
               (c) furnish to the selling Holders such numbers of copies of a
prospectus, including a preliminary prospectus, as required by the Securities
Act, and such other documents as the Holders may reasonably request in order to
facilitate their disposition of their Registrable Securities;
               (d) use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or blue-sky laws of such jurisdictions as shall be reasonably
requested by the selling Holders; provided that the Company shall not be
required to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions, unless the Company is already
subject to service in such jurisdiction and except as may be required by the
Securities Act;
               (e) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the underwriter(s) of such offering;

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               (f) use its commercially reasonable efforts to cause all such
Registrable Securities covered by such registration statement to be listed on a
national securities exchange or trading system and each securities exchange and
trading system (if any) on which similar securities issued by the Company are
then listed;
               (g) provide a transfer agent and registrar for all Registrable
Securities registered pursuant to this Agreement and provide a CUSIP number for
all such Registrable Securities, in each case not later than the effective date
of such registration;
               (h) promptly make available for inspection by the selling
Holders, any managing underwriter(s) participating in any disposition pursuant
to such registration statement, and any attorney or accountant or other agent
retained by any such underwriter or selected by the selling Holders, all
financial and other records, pertinent corporate documents, and properties of
the Company, and cause the Company’s officers, directors, employees, and
independent accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant, or agent, in each case, as
necessary or advisable to verify the accuracy of the information in such
registration statement and to conduct appropriate due diligence in connection
therewith;
               (i) notify each selling Holder, promptly after the Company
receives notice thereof, of the time when such registration statement has been
declared effective or a supplement to any prospectus forming a part of such
registration statement has been filed; and
               (j) after such registration statement becomes effective, notify
each selling Holder of any request by the SEC that the Company amend or
supplement such registration statement or prospectus.
          2.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 2 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as is reasonably required to effect the registration of such Holder’s
Registrable Securities.
          2.6 Expenses of Registration. All expenses (other than Selling
Expenses) incurred in connection with registrations, filings, or qualifications
pursuant to Section 2, including all registration, filing, and qualification
fees; printers’ and accounting fees; fees and disbursements of counsel for the
Company; and the reasonable fees and disbursements, not to exceed $30,000, of
one counsel for the selling Holders (“Selling Holder Counsel”), shall be borne
and paid by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 2.1 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all selling Holders shall bear such expenses pro rata
based upon the number of Registrable Securities that were to be included in the
withdrawn registration), unless the Holders of a majority of the Registrable
Securities agree to forfeit their right to one registration pursuant to
Section 2.1(a) or Section 2.1(b), as the case may be; and provided, further,
that if, at the time of such withdrawal, the Holders shall have learned

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of a material adverse change in the condition, business or prospects of the
Company from that known to the Holders at the time of their request and have
withdrawn the request with reasonable promptness after learning of such
information, then the Holders shall not be required to pay any of such expenses
and shall not forfeit their right to one registration pursuant to Section 2.1(a)
or Section 2.1(b). All Selling Expenses relating to Registrable Securities
registered pursuant to this Section 2 shall be borne and paid by the Holders pro
rata on the basis of the number of Registrable Securities registered on their
behalf.
          2.7 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any registration pursuant
to this Agreement as the result of any controversy that might arise with respect
to the interpretation or implementation of this Section 2.
          2.8 Indemnification. If any Registrable Securities are included in a
registration statement under this Section 2:
               (a) To the extent permitted by law, the Company will indemnify
and hold harmless each selling Holder, and the partners, members, officers,
directors, and stockholders of each such Holder; legal counsel and accountants
for each such Holder; any underwriter (as defined in the Securities Act) for
each such Holder; and each Person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Exchange Act,
against any Damages, and the Company will pay to each such Holder, underwriter,
controlling Person, or other aforementioned Person any legal or other expenses
reasonably incurred thereby in connection with investigating or defending any
claim or proceeding from which Damages may result, as such expenses are
incurred; provided, however, that the indemnity agreement contained in this
Section 2.8(a) shall not apply to amounts paid in settlement of any such claim
or proceeding if such settlement is effected without the consent of the Company,
which consent shall not be unreasonably withheld, nor shall the Company be
liable for any Damages to the extent that they arise out of or are based upon
actions or omissions made in reliance upon and in conformity with written
information furnished by or on behalf of any such Holder, underwriter,
controlling Person, or other aforementioned Person expressly for use in
connection with such registration.
               (b) To the extent permitted by law, each selling Holder,
severally and not jointly, will indemnify and hold harmless the Company, and
each of its directors, each of its officers who has signed the registration
statement, each Person (if any), who controls the Company within the meaning of
the Securities Act, legal counsel and accountants for the Company, any
underwriter (as defined in the Securities Act), any other Holder selling
securities in such registration statement, and any controlling Person of any
such underwriter or other Holder, against any Damages, in each case only to the
extent that such Damages arise out of or are based upon actions or omissions
made in reliance upon and in conformity with written information furnished by or
on behalf of such selling Holder expressly for use in connection with such
registration; and each such selling Holder will pay to the Company and each
other aforementioned Person any legal or other expenses reasonably incurred
thereby in connection with investigating or defending any claim or proceeding
from which Damages may result, as such expenses are incurred; provided, however,
that the indemnity agreement contained in this Section 2.8(b) shall not apply to
amounts paid in settlement of any such claim or proceeding if

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such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; and provided, further, that in no event
shall the aggregate amounts payable by any Holder by way of indemnity or
contribution under Sections 2.8(b) and 2.8(d) exceed the proceeds from the
offering received by such Holder (net of any Selling Expenses paid by such
Holder), except in the case of fraud or willful misconduct by such Holder.
               (c) Promptly after receipt by an indemnified party under this
Section 2.8 of notice of the commencement of any action (including any
governmental action) for which a party may be entitled to indemnification
hereunder, such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.8, give the
indemnifying party notice of the commencement thereof. The indemnifying party
shall have the right to participate in such action and, to the extent the
indemnifying party so desires, participate jointly with any other indemnifying
party to which notice has been given, and to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties that may be
represented without conflict by one counsel) shall have the right to retain one
separate counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such action. The failure to give notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall relieve such indemnifying party of any liability to the indemnified
party under this Section 2.8, to the extent that such failure materially
prejudices the indemnifying party’s ability to defend such action. The failure
to give notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.8.
               (d) To provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any party
otherwise entitled to indemnification hereunder makes a claim for
indemnification pursuant to this Section 2.8 but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case, notwithstanding the fact
that this Section 2.8 provides for indemnification in such case, or
(ii) contribution under the Securities Act may be required on the part of any
party hereto for which indemnification is provided under this Section 2.8, then,
and in each such case, such parties will contribute to the aggregate losses,
claims, damages, liabilities, or expenses to which they may be subject (after
contribution from others) in such proportion as is appropriate to reflect the
relative fault of each of the indemnifying party and the indemnified party in
connection with the statements, omissions, or other actions that resulted in
such loss, claim, damage, liability, or expense, as well as to reflect any other
relevant equitable considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or allegedly untrue statement of a material fact, or
the omission or alleged omission of a material fact, relates to information
supplied by the indemnifying party or by the indemnified party and the parties’
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission; provided, however, that, in any such case,
(x) no Holder will be required to contribute any amount in excess of the public
offering price of all such Registrable Securities offered and sold by such
Holder pursuant to such registration statement, and (y) no Person guilty

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of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation; and provided, further, that in no
event shall a Holder’s liability pursuant to this Section 2.8(d), when combined
with the amounts paid or payable by such Holder pursuant to Section 2.8(b),
exceed the proceeds from the offering received by such Holder (net of any
Selling Expenses paid by such Holder), except in the case of willful misconduct
or fraud by such Holder.
               (e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
               (f) Unless otherwise superseded by an underwriting agreement
entered into in connection with the underwritten public offering, the
obligations of the Company and Holders under this Section 2.8 shall survive the
completion of any offering of Registrable Securities in a registration under
this Section 2, and otherwise shall survive the termination of this Agreement.
          2.9 Reports Under Exchange Act. With a view to making available to the
Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of the Company to the
public without registration or pursuant to a registration on Form S-3, the
Company shall:
               (a) make and keep available adequate current public information,
as those terms are understood and defined in SEC Rule 144, at all times after
the effective date of the registration statement filed by the Company for the
IPO;
               (b) use commercially reasonable efforts to file with the SEC in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after the Company has become
subject to such reporting requirements); and
               (c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) to the extent accurate, a
written statement by the Company that it has complied with the reporting
requirements of SEC Rule 144 (at any time after ninety (90) days after the
effective date of the registration statement filed by the Company for the IPO),
the Securities Act, and the Exchange Act (at any time after the Company has
become subject to such reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time
after the Company so qualifies); (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company; and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC that permits the
selling of any such securities without registration (at any time after the
Company has become subject to the reporting requirements under the Exchange Act)
or pursuant to Form S-3 (at any time after the Company so qualifies to use such
form).

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          2.10 Restrictions on Transfer.
               (a) The Registrable Securities shall not be sold, pledged, or
otherwise transferred, and the Company shall not recognize and shall issue
stop-transfer instructions to its transfer agent with respect to any such sale,
pledge, or transfer, except upon the conditions specified in this Agreement,
which conditions are intended to ensure compliance with the provisions of the
Securities Act. A transferring Holder will cause any proposed purchaser,
pledgee, or transferee of the Registrable Securities held by such Holder to
agree to take and hold such securities subject to the provisions and upon the
conditions specified in this Agreement.
               (b) Each certificate or instrument representing (i) the Series B
Common Stock, (ii) the Registrable Securities, and (iii) any other securities
issued in respect of the securities referenced in clauses (i) and (ii), upon any
stock split, stock dividend, recapitalization, merger, consolidation, or similar
event, shall (unless otherwise permitted by the provisions of Section 2.10(c))
be stamped or otherwise imprinted with a legend substantially in the following
form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH
IS ON FILE WITH THE SECRETARY OF THE COMPANY.
The Holders consent to the Company making a notation in its records and giving
instructions to any transfer agent of the Restricted Securities in order to
implement the restrictions on transfer set forth in this Section 2.10.
               (c) The holder of each certificate representing Restricted
Securities, by acceptance thereof, agrees to comply in all respects with the
provisions of this Section 2. Before any proposed sale, pledge, or transfer of
any Restricted Securities, unless there is in effect a registration statement
under the Securities Act covering the proposed transaction, the Holder thereof
shall give notice to the Company of such Holder’s intention to effect such sale,
pledge, or transfer. Each such notice shall describe the manner and
circumstances of the proposed sale, pledge, or transfer in sufficient detail
and, if reasonably requested by the Company, shall be accompanied at such
Holder’s expense by either (i) a written opinion of legal counsel who shall, and
whose legal opinion shall, be reasonably satisfactory to the Company, addressed
to the Company, to the effect that the proposed transaction may be effected
without registration under the Securities Act; (ii) a “no action” letter from
the SEC to the effect that the proposed sale,

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pledge, or transfer of such Restricted Securities without registration will not
result in a recommendation by the staff of the SEC that action be taken with
respect thereto; or (iii) any other evidence reasonably satisfactory to counsel
to the Company to the effect that the proposed sale, pledge, or transfer of the
Restricted Securities may be effected without registration under the Securities
Act, whereupon the Holder of such Restricted Securities shall be entitled to
sell, pledge, or transfer such Restricted Securities in accordance with the
terms of the notice given by the Holder to the Company. The Company will not
require such a legal opinion or “no action” letter (x) in any transaction in
compliance with SEC Rule 144 or (y) in any transaction in which such Holder
distributes Restricted Securities to an Affiliate of such Holder for no
consideration; provided that each transferee agrees in writing to be subject to
the terms of this Section 2.10. Each certificate or instrument evidencing the
Restricted Securities transferred as above provided shall bear, except if such
transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend
set forth in Section 2.10(b), except that such certificate shall not bear such
restrictive legend if, in the opinion of counsel for such Holder and the
Company, such legend is not required in order to establish compliance with any
provisions of the Securities Act.
          2.11 Termination of Registration Rights. The right of any Holder to
request registration or inclusion of Registrable Securities in any registration
pursuant to Section 2.1 or Section 2.2 shall terminate upon the earliest to
occur of:
               (a) when all of such Holder’s Registrable Securities could be
sold without restriction under SEC Rule 144(k);
               (b) the failure of such Holder to fulfill such Holder’s purchase
obligations in connection with the 2nd Tranche Sale or the 3rd Tranche Sale
pursuant to the Purchase Agreement; or
               (c) the fifth (5th) anniversary of the IPO.
     3. Additional Covenants.
          3.1 Insurance. The Company shall use its commercially reasonable
efforts to obtain, within ninety (90) days of the date hereof, from financially
sound and reputable insurers Directors and Officers liability insurance in an
amount and on terms and conditions satisfactory to the Board of Directors, and
will use commercially reasonable efforts to cause such insurance policies to be
maintained until such time as the Board of Directors determines that such
insurance should be discontinued.
          3.2 Qualified Small Business Stock. The Company shall use commercially
reasonable efforts to cause the shares of Common Stock issued pursuant to the
Purchase Agreement, as well as any shares into which such shares are converted,
within the meaning of Section 1202(f) of the Internal Revenue Code (the “Code”),
to constitute “qualified small business stock” as defined in Section 1202(c) of
the Code; provided, however, that such requirement shall not be applicable if
the Board of Directors of the Company determines, in its good-faith business
judgment, that such qualification is inconsistent with the best interests of the
Company. The Company shall submit to its stockholders (including the Investors)
and to the Internal Revenue Service any reports that may be required under
Section 1202(d)(1)(C) of the

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Code and the regulations promulgated thereunder. In addition, within twenty
(20) business days after any Investor’s written request therefor, the Company
shall, at its option, either (i) deliver to such Investor a written statement
indicating whether (and what portion of) such Investor’s interest in the Company
constitutes “qualified small business stock” as defined in Section 1202(c) of
the Code or (ii) deliver to such Investor such factual information in the
Company’s possession as is reasonably necessary to enable such Investor to
determine whether (and what portion of) such Investor’s interest in the Company
constitutes “qualified small business stock” as defined in Section 1202(c) of
the Code.
          3.3 Successor Indemnification. If the Company or any of its successors
or assignees consolidates with or merges into any other Person and is not the
continuing or surviving corporation or entity of such consolidation or merger,
then to the extent necessary, proper provision shall be made so that the
successors and assignees of the Company assume the obligations of the Company
with respect to indemnification of members of the Board of Directors as in
effect immediately before such transaction, whether such obligations are
contained in the Company’s Bylaws, its Articles of Incorporation, or elsewhere,
as the case may be.
          3.4 Termination of Covenants. The covenants set forth in this
Section 3, except for Section 3.3, shall terminate and be of no further force or
effect (i) immediately before the consummation of the IPO or (ii) when the
Company first becomes subject to the periodic reporting requirements of Section
12(g) or 15(d) of the Exchange Act, whichever event occurs first.
     4. Miscellaneous.
          4.1 Successors and Assigns. The rights under this Agreement may be
assigned (but only with all related obligations) by a Holder to a transferee of
Registrable Securities that (i) is an Affiliate of a Holder; (ii) is a Holder’s
Immediate Family Member or trust for the benefit of an individual Holder or one
or more of such Holder’s Immediate Family Members; or (iii) after such transfer,
holds at least 1,000,000 shares of Registrable Securities (subject to
appropriate adjustment for stock splits, stock dividends, combinations, and
other recapitalizations); provided, however, that (x) the Company is, within a
reasonable time after such transfer, furnished with written notice of the name
and address of such transferee and the Registrable Securities with respect to
which such rights are being transferred; (y) such transferee agrees in a written
instrument delivered to the Company to be bound by and subject to the terms and
conditions of this Agreement; and (z) such transfer is not made to a Person that
the Company’s Board of Directors or TomoTherapy determines is, or is an
Affiliate of, a competitor of the Company or of TomoTherapy. For the purposes of
determining the number of shares of Registrable Securities held by a transferee,
the holdings of a transferee (1) that is an Affiliate or stockholder of a
Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust
for the benefit of an individual Holder or such Holder’s Immediate Family Member
shall be aggregated together and with those of the transferring Holder;
provided, however, that all transferees who would not qualify individually for
assignment of rights shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving notices, or taking any action under this
Agreement. The terms and conditions of this Agreement inure to the benefit of
and are binding upon the respective successors and permitted assignees of the
parties. Nothing in

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this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and permitted assignees
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein.
          4.2 Governing Law. This Agreement and any controversy arising out of
or relating to this Agreement shall be governed by and construed in accordance
with the internal laws of State of Wisconsin, without regard to conflict of law
principles that would result in the application of any law other than the law of
the State of Wisconsin, and without regard to rules of construction concerning
the draftsman hereof.
          4.3 Counterparts; Facsimile. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed and delivered by facsimile or PDF format signature and in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
          4.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are for convenience only and are not to be considered in construing or
interpreting this Agreement.
          4.5 Notices. All notices and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed effectively
given upon the earlier of actual receipt or: (i) personal delivery to the party
to be notified; (ii) when sent, if sent by electronic mail or facsimile during
the recipient’s normal business hours, and if not sent during normal business
hours, then on the recipient’s next business day; (iii) five (5) days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (iv) one (1) business day after the business day of deposit
with a nationally recognized overnight courier, freight prepaid, specifying
next-day delivery, with written verification of receipt. All communications
shall be sent to the respective parties at their addresses as set forth on
Schedule A hereto, or to the principal office of the Company and to the
attention of the Chief Executive Officer, in the case of the Company, or to such
email address, facsimile number, or address as subsequently modified by written
notice given in accordance with this Section 4.5.
          4.6 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance, and either retroactively or prospectively) only
with the written consent of the Company and the holders of a majority of the
Registrable Securities then outstanding; provided, however, that the Company may
in its sole discretion waive compliance with Section 2.10(c) (and the Company’s
failure to object promptly in writing after notification of a proposed
assignment allegedly in violation of Section 2.10(c) shall be deemed to be a
waiver); and provided, further, that any provision hereof may be waived by any
waiving party on such party’s own behalf, without the consent of any other
party. Notwithstanding the foregoing, this Agreement may not be amended or
terminated and the observance of any term hereof may not be waived with respect
to any Investor without the written consent of such Investor, unless such
amendment, termination, or waiver applies to all Investors in the same fashion.
The Company shall give prompt notice of any amendment or termination hereof or
waiver hereunder to any party hereto that did not consent in writing to such
amendment, termination, or waiver. Any amendment, termination, or waiver
effected in accordance with this Section 4.6 shall be binding

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on all parties hereto, regardless of whether any such party has consented
thereto. No waivers of or exceptions to any term, condition, or provision of
this Agreement, in any one or more instances, shall be deemed to be or construed
as a further or continuing waiver of any such term, condition, or provision.
          4.7 Severability. In case any one or more of the provisions contained
in this Agreement is for any reason held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provision of this Agreement, and such invalid, illegal, or
unenforceable provision shall be reformed and construed so that it will be
valid, legal, and enforceable to the maximum extent permitted by law.
          4.8 Aggregation of Stock. All shares of Registrable Securities held or
acquired by Affiliates shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement and such
Affiliated persons may apportion such rights as among themselves in any manner
they deem appropriate.
          4.9 Additional Investors. Notwithstanding anything to the contrary
contained herein, if the Company issues additional shares of the Company’s
Series B Common Stock after the date hereof, whether pursuant to the Purchase
Agreement or otherwise, any purchaser of such shares may become a party to this
Agreement by executing and delivering or joinder agreement or an additional
counterpart signature page to this Agreement, and thereafter shall be deemed an
“Investor” for all purposes hereunder. No action or consent by the Investors
shall be required for such joinder to this Agreement by such additional
Investor, so long as such additional Investor has agreed in writing to be bound
by all of the obligations as an “Investor” hereunder.
          4.10 Entire Agreement. This Agreement (including any Schedules and
Exhibits hereto) constitutes the full and entire understanding and agreement
among the parties with respect to the subject matter hereof, and any other
written or oral agreement relating to the subject matter hereof existing between
the parties is expressly canceled.
          4.11 Dispute Resolution. The parties (a) hereby irrevocably and
unconditionally submit to the jurisdiction of the federal and state courts
located within the geographic boundaries of Dane County in the State of
Wisconsin for the purpose of any suit, action or other proceeding arising out of
or based upon this Agreement, (b) agree not to commence any suit, action or
other proceeding arising out of or based upon this Agreement except in the
federal and state courts located within the geographic boundaries of Dane County
in the State of Wisconsin, and (c) hereby waive, and agree not to assert, by way
of motion, as a defense, or otherwise, in any such suit, action or proceeding,
any claim that it is not subject personally to the jurisdiction of the
above-named courts, that its property is exempt or immune from attachment or
execution, that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this
Agreement or the subject matter hereof may not be enforced in or by such court.
The prevailing party shall be entitled to reasonable attorneys’ fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
          4.12 Delays or Omissions. No delay or omission to exercise any right,
power, or remedy accruing to any party under this Agreement, upon any breach or
default of any other

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party under this Agreement, shall impair any such right, power, or remedy of
such nonbreaching or nondefaulting party, nor shall it be construed to be a
waiver of or acquiescence to any such breach or default, or to any similar
breach or default thereafter occurring, nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. All remedies, whether under this Agreement or by law or
otherwise afforded to any party, shall be cumulative and not alternative.
[Remainder of Page Intentionally Left Blank]

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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

             
 
                COMPANY:    
 
                COMPACT PARTICLE ACCELERATION CORPORATION    
 
           
 
  By:   /s/ Shawn Guse    
 
     
 
   
 
  Name:   Shawn Guse    
 
     
 
   
 
  Title:   General Manager    
 
     
 
   

 

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                  INVESTORS:    
 
                DaneVest Tech Fund I, LP    
 
           
 
  By:   /s/ Joseph Hildebrandt    
 
           
 
  Name:   Joseph Hildebrandt    
 
           
 
  Its:   Manager    
 
           
 
                The Endeavors Group, LLC    
 
           
 
  By:   /s/ Michael J. Cudahy    
 
           
 
  Name:   Michael J. Cudahy    
 
           
 
  Its:   Managing Member    
 
           
 
                Libby One LLC    
 
           
 
  By:   /s/ Jose Luis Pino-y-Torres    
 
           
 
  Name:   Jose Luis Pino-y-Torres    
 
           
 
  Its:   Manager    
 
           
 
                TomoPro Investment, LLC    
 
           
 
  By:   /s/ John Bodilly    
 
           
 
  Name:   John Bodilly    
 
           
 
  Its:   Manager    
 
           

 

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Schedule intentionally omitted.