[EXECUTION COPY]

AGREEMENT

This AGREEMENT, dated as of April 7, 2009 (this “Agreement”), is by and among
TomoTherapy Incorporated, a Wisconsin corporation (the “Company”), and the
entities listed on Exhibit A hereto (each, an “Avalon Party” and collectively,
the “Avalon Parties”).

WHEREAS, the Avalon Parties are the beneficial owners of shares of common stock,
par value $0.01 per share, of the Company (the “Common Stock”);

WHEREAS, on each of November 25, 2008 and March 19, 2009, Avalon Portfolio, LLC
sent letters to the Company (the “Demand Letters”), demanding an inspection of
certain records and documents of the Company pursuant to Section 180.1602(2) of
the Wisconsin Business Corporation Law and Section 9.2 of the Amended and
Restated Bylaws of the Company;

WHEREAS, on December 23, 2008, Avalon Portfolio, LLC, a Delaware limited
liability company and one of the Avalon Parties, submitted to the Company a
notice (the “Notice”) of its intention (i) to nominate four individuals for
election to the Company’s board of directors (the “Board”) at the Company’s 2009
annual meeting of shareholders (the “2009 Annual Meeting”) and to solicit
proxies in support of their election and (ii) to seek from the Company
reimbursement of proxy solicitation expenses in the event that the Avalon
Parties’ nominees are elected to the Board;

WHEREAS, on March 13, 2009, the Avalon Parties filed with the Securities and
Exchange Commission (the “SEC”) pursuant to Section 14(a) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), a preliminary proxy
statement on Schedule 14A (such preliminary proxy statement, as amended from
time to time, and any related definitive proxy statement on Schedule 14A filed
with the SEC by the Avalon Parties, the “Avalon Proxy Statement”) to solicit
proxies in support of the election, at the 2009 Annual Meeting, of nine
individuals to the Board, including the four individuals identified in the
Notice;

WHEREAS, the Company has determined that the interests of the Company and its
shareholders would best be served by, and the Avalon Parties have determined
that they would best be served by, (i) avoiding the substantial expense and
disruption that would result from a continuation of Avalon’s ongoing proxy
contest for election of directors at the 2009 Annual Meeting (the “Avalon Proxy
Contest”), (ii) increasing the number of directors constituting the Board from
nine (9) to eleven (11), (iii) appointing the Avalon Nominee (as defined herein)
to the Board, (iv) nominating the Avalon Nominee for election to the Board at
the 2009 Annual Meeting and (v) appointing the Independent Nominee (as defined
herein) to the Board; and

WHEREAS, in consideration of the agreements of the Company set forth herein,
among other matters, and subject to the terms of this Agreement, each of the
Avalon Parties has agreed to end the Avalon Proxy Contest and to vote for the
election of the Company Nominees (as defined herein) at the 2009 Annual Meeting.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE I
DEFINITIONS

For purposes of this Agreement:

(a) “2010 Annual Meeting” means the Company’s 2010 annual meeting of
shareholders.

(b) “2011 Annual Meeting” means the Company’s 2011 annual meeting of
shareholders.

(c) “Affiliate” and “Associate” have the respective meanings set forth in
Rule 12b-2 promulgated by the SEC under the Exchange Act. The parties shall not
be deemed to be Affiliates of each other as a result of their execution of this
Agreement.

(d) “Avalon Nominee” shall mean Jonathan McCloskey or his replacement as
designated pursuant to Section 3.3(b).

(e) The terms “beneficial owner” and “beneficially own” have the meanings set
forth in Rule 13d-3 promulgated by the SEC under the Exchange Act.

(f) “Company Nominees” shall consist of John J. Greisch, Sam R. Leno, T.
Rockwell Mackie, John J. McDonough, Cary J. Nolan, Carlos A. Perez, Frederick A.
Robertson, Roy T. Tanaka and Frances S. Taylor.

(g) “Director” shall mean a member of the Board.

(h) “Minimum Condition” shall mean beneficial ownership by the Avalon Parties,
Theodore Waitt or their respective controlled Affiliates of at least an
aggregate of 1,300,975 shares of Common Stock (as adjusted for any dividends of
Common Stock, stock splits, stock combinations, reclassifications,
recapitalizations or the like) at any given time.

(i) “Standstill Period” means the period beginning on the date of this Agreement
and ending on the earlier of (i) the date of the 2011 Annual Meeting; (ii) if
either the Company or the Avalon Representative (as defined herein) delivers the
Standstill Termination Notice (as defined herein) in accordance with
Section 3.1(c), the date of the 2010 Annual Meeting; (iii) the date on which the
Avalon Nominee resigns or is removed pursuant to Section 3.8(a); (iv) at the
election of the Avalon Representative, (A) the date on which the Company or the
Board breaches its obligations under Section 3.1(a) or 3.1(b) or (B) the date
that is 15 days after the Company has received a notice from the Avalon
Representative describing an alleged breach of Section 3.2(a) or 3.2(b) by the
Company or the chair of the Nominating Committee (as defined herein), if the
Company has not cured any breach so described; or (v) April 30, 2011.

ARTICLE II
REPRESENTATIONS AND WARRANTIES

2.1 Authority; Binding Agreement. The Company hereby represents that this
Agreement has been duly authorized, executed and delivered by it, and is a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms. Each of the Avalon Parties represents and warrants
that this Agreement has been duly authorized, executed and delivered by such
Avalon Party, and is a valid and binding obligation of such Avalon Party,
enforceable against such Avalon Party in accordance with its terms. Each of the
parties hereto represents and warrants that the execution, delivery and
performance of this Agreement by such party does not and will not violate or
conflict with (a) any law, rule, regulation, order, judgment or decree
applicable to such person or (b) result in any breach or violation of or
constitute a default (or an event which with notice or lapse of time or both
could become a default) under or pursuant to, or result in the loss of a
material benefit under, or give any right of termination, amendment,
acceleration or cancellation of, any organizational document, agreement,
contract, commitment, understanding or arrangement to which such person is a
party.

2.2 Governmental Approval. Each of the parties hereto represents and warrants
that, except in connection with the filing by the Company with the SEC and
Nasdaq of proxy statements on Schedule 14A in connection with the 2009 Annual
Meeting and 2010 Annual Meeting, no consent, approval, authorization, license or
clearance of, or filing or registration with, or notification to, any court,
legislative, executive or regulatory authority or agency is required in order to
permit any party to this Agreement to perform such party’s obligations under
this Agreement, except for such as have been obtained.

2.3 Bylaws and Articles of Incorporation. The Company represents and warrants to
the Avalon Parties that the Amended and Restated Bylaws of the Company have not
been amended or modified since November 5, 2008. True, accurate and complete
copies of the Amended and Restated Bylaws and the Amended and Restated Articles
of Incorporation of the Company were filed with the SEC as an exhibit to the
Company’s quarterly report on Form 10-Q for the quarter ended September 30,
2008, which was filed with the SEC on November 7, 2008.

2.4 Share Ownership. The Avalon Parties represent and warrant that, as of the
date hereof, they satisfy the Minimum Condition.

ARTICLE III
COVENANTS

3.1 Avalon Nominee; 2009 and 2010 Annual Meetings; Board Size.

(a) The Company shall cause the Board and all applicable committees of the Board
to take all necessary action to, effective as of April 15, 2009, (i) increase
the size of the Board from nine (9) to ten (10) members, (ii) appoint the Avalon
Nominee to the Board, (iii) appoint the Avalon Nominee to the Board’s nominating
and corporate governance committee (the “Nominating Committee”) and
(iv) nominate only the Avalon Nominee and each of the Company Nominees
(collectively, the “Meeting Nominees”) for election to the Board at the 2009
Annual Meeting. The Company shall cause the Board to recommend that the
Company’s shareholders vote “FOR” the Meeting Nominees as Directors of the
Company at the 2009 Annual Meeting. The Company shall include this
recommendation in its proxy materials for the 2009 Annual Meeting, cause the
proxy used for the 2009 Annual Meeting to solicit authority to vote for the
Meeting Nominees at the 2009 Annual Meeting and cause the proxy holders
identified in the Company’s definitive proxy statement on Schedule 14A for the
2009 Annual Meeting to vote the shares represented by all proxies granted by the
Company’s shareholders to such proxy holders in favor of the Meeting Nominees.

(b) Neither the Company nor the Board shall submit any matter to a shareholder
vote at the 2009 Annual Meeting other than (i) the election of the Meeting
Nominees to the Board, (ii) the amendment of the Company’s 2007 Equity Incentive
Plan, (iii) the amendment of the Company’s 2007 Employee Stock Purchase Plan and
(iv) the ratification of the appointment of the Company’s outside auditor, in
the case of clauses (ii), (iii) and (iv) of this Section 3.1(b), as set forth in
the definitive proxy statement on Schedule 14A filed by the Company with the SEC
on March 24, 2009.

(c) If, during the period that is thirty (30) to sixty (60) days prior to the
notice deadline in any advance notice provision contained in the Company’s
Amended and Restated Articles of Incorporation or Amended and Restated Bylaws
related to shareholder action to be taken at the 2010 Annual Meeting, either the
Company or the Avalon Representative shall deliver written notice (the
“Standstill Termination Notice”) to the Avalon Representative or the Company,
respectively, of its election to terminate the Standstill Period as of the date
of the 2010 Annual Meeting (i) the Company shall have no obligation to cause the
Board or any committee of the Board to nominate the Avalon Nominee or the
Independent Nominee for election to the Board at the 2010 Annual Meeting and
(ii) the Company shall cause the Board and all applicable committees of the
Board to take all necessary action to remove both the Avalon Nominee and the
Independent Nominee from the Board and any committees of the Board effective
immediately prior to the 2010 Annual Meeting.

(d) If neither the Company nor the Avalon Representative delivers the Standstill
Termination Notice in accordance with Section 3.1(c) and if the Avalon Parties
have not failed to cure any breach of Section 3.5 within fifteen (15) days after
the Company has delivered notice describing any such alleged breach to the
Avalon Representative, (i) the Company shall cause the Board and all applicable
committees of the Board to nominate the Avalon Nominee and the Independent
Nominee for election to the Board at the 2010 Annual Meeting; (ii) the Company
shall cause the Board to recommend that the Company’s shareholders vote “FOR”
the election of the Avalon Nominee and the Independent Nominee as Directors at
the 2010 Annual Meeting; and (iii) the Company shall (x) include this
recommendation in its proxy materials for the 2010 Annual Meeting, (y) cause the
proxy used for the 2010 Annual Meeting to solicit authority to vote for the
Avalon Nominee and the Independent Nominee at the 2010 Annual Meeting and
(z) cause the proxy holders identified in the Company’s definitive proxy
statement on Schedule 14A for the 2010 Annual Meeting to vote the shares
represented by all proxies granted by the Company’s shareholders to such proxy
holders in favor of the Avalon Nominee and the Independent Nominee.

3.2 Independent Nominee.

(a) Each of the Avalon Nominee and the chair of the Nominating Committee shall
use reasonable efforts to identify, within three months after the date of the
2009 Annual Meeting, one or more persons to serve as an additional member of the
Board who (x) qualifies as “independent” under Nasdaq listing standards and Item
407(a) of Regulation S-K promulgated by the SEC, (y) is reasonably believed by
the proposing party not to have a relationship with the Company or any of the
Avalon Parties that would impair such person’s independence in carrying out such
person’s responsibilities as a director of the Company and (z) consents to his
or her appointment to the Board if selected to be the Independent Nominee
pursuant to this Agreement. If any person proposed by either the Avalon Nominee
or the chair of the Nominating Committee shall be mutually satisfactory to both
the Avalon Nominee and the chair of the Nominating Committee, such person shall
be the “Independent Nominee.”

(b) As promptly as practicable after the chair of the Nominating Committee and
the Avalon Nominee deliver written notice to the Company of their having
determined the Independent Nominee in accordance with Section 3.2(a) (and in any
event within five (5) business days after the date of the delivery of such
notice), the Company shall cause the Board and all applicable committees of the
Board to take all necessary action to (i) increase the size of the Board from
ten (10) to eleven (11) members and (ii) appoint the Independent Nominee to the
Board.

(c) All fees, costs and expenses incurred by any party hereto in connection with
any search for the Independent Nominee shall be borne by the party incurring
such costs.

3.3 Removal of Avalon Nominee and Independent Nominee; Board Size.

(a) Prior to the expiration of the Standstill Period, (i) the Company and the
Board shall take all actions necessary and appropriate to oppose any action or
threatened action (whether by consent solicitation or otherwise) to remove the
Avalon Nominee or the Independent Nominee from the Board other than for gross
negligence or willful misconduct and (ii) unless approved by the holders of the
majority of the then outstanding shares of Common Stock or unanimously approved
by the Board, the size of the Board may not be increased, except pursuant to
this Agreement.

(b) In the event of the death, incapacity or resignation of the Avalon Nominee
(except pursuant to Section 3.8(a)) or in the event that the Avalon Nominee
ceases to be employed by any of the Avalon Parties or any of their respective
Affiliates, the Avalon Parties shall be entitled to designate a replacement for
such nominee that is reasonably acceptable to the Nominating Committee. In the
event of the death, incapacity or resignation of the Independent Nominee (except
pursuant to Section 3.8(a)), a replacement for such nominee shall be selected in
accordance with Section 3.2. Any replacement nominee appointed in accordance
with this Section 3.3(b) shall be promptly appointed to the Board and the
committees of the Board upon which such replacement nominee’s predecessor
served.

3.4 Termination of Proxy Contest; Voting.

(a) Immediately following, and effective as of, the satisfaction of the
Company’s obligations under the first sentence of Section 3.1(a), each of the
Avalon Parties shall (i) terminate any proxy solicitation efforts pursuant to
the Avalon Proxy Statement, (ii) withdraw their nomination of any persons to
stand for election at the 2009 Annual Meeting and (iii) withdraw each of the
Demand Letters.

(b) Each of the Avalon Parties agrees that it shall cause all shares of Common
Stock beneficially owned by Theodore Waitt, any of the Avalon Parties or any of
their respective controlled Affiliates as of the record date for the 2009 Annual
Meeting, to be present for quorum purposes and to be voted in favor of the
Meeting Nominees for election at the 2009 Annual Meeting, and not in favor of
any other nominees to serve on the Board, and, if the Company nominates the
Avalon Nominee and the Independent Nominee for election to the Board at the 2010
Annual Meeting and complies with its obligations in Sections 3.1 and 3.2, each
of the Avalon Parties agrees that it shall cause all shares of Common Stock
beneficially owned by Theodore Waitt, any of the Avalon Parties or any of their
respective controlled Affiliates, as of the record date for the 2010 Annual
Meeting to be present for quorum purposes and to be voted in favor of the
Board’s nominees for election at the 2010 Annual Meeting, and not in favor of
any other nominees to serve on the Board.

3.5 Other Actions by the Avalon Parties. During the Standstill Period, none of
the Avalon Parties shall itself or through any of its Affiliates or Associates,
without the prior written consent of the Company specifically expressed by a
majority vote of the Board, directly or indirectly:

(a) Form, join in or in any other way participate in a “partnership, limited
partnership, syndicate or other group” within the meaning of Section 13(d)(3) of
the Exchange Act with respect to any matter set forth in clause (b), (c), (d),
(e), (f) or (g) below or deposit any shares of Common Stock in a voting trust or
similar arrangement or subject any shares of Common Stock to any voting
agreement or pooling arrangement, other than solely with other Avalon Parties or
their Affiliates or pursuant to this Agreement;

(b) Solicit proxies or written consents of shareholders, or otherwise conduct
any nonbinding referendum with respect to Common Stock, or make, or in any way
participate in, any “solicitation” of any “proxy” to vote any shares of Common
Stock with respect to any matter in opposition to any recommendation of the
Board, or become a “participant” in any contested solicitation for the election
of Directors with respect to the Company in opposition to the Board (as such
terms are defined or used under the Exchange Act);

(c) Engage in any solicitation to encourage the withholding of shareholder votes
or proxies with respect to any Director nominated by the Company or any other
proposal of the Company set forth in its proxy statement;

(d) Except in the Avalon Nominee’s or the Independent Nominee’s capacity as a
Director of the Company, seek to call, or to request the call of, a meeting of
the shareholders of the Company;

(e) Without the prior consent of the Board or a committee thereof, solicit, seek
to effect or negotiate with any person with respect to, or propose to enter into
or otherwise make any public announcement or proposal whatsoever with respect to
any of the following transactions: (i) a merger, consolidation, business
combination, share exchange, restructuring, recapitalization or acquisition
involving the Company or any similar transaction involving all or substantially
all of the assets of the Company and its subsidiaries, taken as a whole;
(ii) the sale, lease, exchange, pledge, mortgage or transfer (including through
any arrangement having substantially the same economic effect as a sale of
assets) of all or substantially all of the assets of the Company and its
subsidiaries, taken as a whole; (iii) the purchase of 50% or more of the
outstanding equity securities of the Company, whether by tender offer, exchange
offer or otherwise; or (iv) the liquidation or dissolution of the Company (any
transaction described in clause (i), (ii), (iii) or (iv) of this Section 3.5(e),
a “Material Transaction”);

(f) Except in the Avalon Nominee’s or the Independent Nominee’s capacity as a
Director of the Company, submit any shareholder proposal (pursuant to Rule 14a-8
of the Exchange Act or otherwise), or any notice of nomination or other business
under the Company’s Amended and Restated Bylaws, or nominate or oppose Directors
for election, at the 2009 Annual Meeting, at the 2010 Annual Meeting or
otherwise;

(g) Commence or announce any intention to commence any tender offer for 50% or
more of the outstanding equity securities of the Company (a “Tender Offer”);

(h) Publicly (or privately to third parties) disparage the Company, any Director
or any member of the management of the Company; or

(i) Publicly seek or publicly request permission to do any of the foregoing or
publicly request to amend or waive any provision of this Section 3.5 (including
any of the preceding clauses (a)-(h) of this Section 3.5);

provided, however, that

(v) if a third party publicly announces a proposed bona fide Material
Transaction or Tender Offer and none of the Avalon Parties has itself, or
through any of its Affiliates or Associates, directly or indirectly solicited or
directed such third party to propose, initiate or effectuate such Material
Transaction or Tender Offer (such publicly announced proposed bona fide Material
Transaction or Tender Offer, a “Third-Party Proposal”), the Avalon Parties may
take any action described in Section 3.5(e) or (g) (and any other action
described in Section 3.5(a), (b), (c), (d), (f) or (h)) to the extent that such
action is reasonably necessary to propose, initiate or effect a reasonably
competitive Material Transaction or Tender Offer; provided, however, that if the
Third-Party Proposal is not a hostile Material Transaction or hostile Tender
Offer, the preceding provision of this Section 3.5(v) shall only grant the
Avalon Parties the right to take any action described in Section 3.5(e) or (g)
(and any other action described in Section 3.5(a), (b), (c), (d), (f) or (h)) to
the extent that such action is reasonably necessary to propose, initiate or
effect a Material Transaction or Tender Offer that is reasonably considered to
be superior to such Third-Party Proposal;

(w) the Avalon Parties may take any action described in Section 3.5(b), (c),
(d) or (f) or, with respect to only the foregoing clauses, Section 3.5(a) or
(i), and if the Avalon Nominee has resigned from the Board the Avalon Parties
may take any action described in Section 3.5(h) (or with respect to 3.5(h),
Section 3.5(a) or (i)), in each case, at any time from and after the earlier of
(A) the date on which the Standstill Termination Notice is delivered to the
Avalon Representative or the Company in accordance with Section 3.1(c) and
(B) the date that is thirty (30) days prior to the notice deadline in any
advance notice provision contained in the Company’s Amended and Restated
Articles of Incorporation or Amended and Restated Bylaws related to shareholder
action to be taken at the 2011 Annual Meeting;

(x) the Avalon Parties may take any action described in Section 3.5 (A) at any
time after the effective date of the resignation of the Avalon Nominee, if the
Standstill Termination Notice has been delivered to the Avalon Representative or
the Company in accordance with Section 3.1(c) and the Avalon Nominee resigns
from the Board and (B) from and after the date that is the later of (1) thirty
(30) days prior to the notice deadline in any advance notice provision contained
in the Company’s Amended and Restated Articles of Incorporation or Amended and
Restated Bylaws related to shareholder action to be taken at the 2011 Annual
Meeting and (2) the effective date of the resignation of the Avalon Nominee;

(y) it is understood and agreed that none of this Section 3.5 shall be deemed to
prohibit the Avalon Nominee or the Independent Nominee from engaging in any
lawful act in such nominee’s capacity as a Director that such nominee believes
is reasonably necessary in connection with such nominee’s exercise of such
nominee’s fiduciary duties as a Director; and

(z) the provisions of this Section 3.5 shall not limit (A) discussions between
the Avalon Parties and the Avalon Nominee or the Independent Nominee,
(B) discussions between the Avalon Parties and the Company or the Board, (C) the
voting of shares of Common Stock held by any Avalon Parties.

3.6 Confidentiality Agreements. Notwithstanding anything to the contrary
contained in this Agreement, the execution of the Company’s form of
confidentiality agreement that has been executed by each of the Directors (a) by
the Avalon Nominee shall be a condition to the appointment of the Avalon Nominee
to the Board and (b) by the Independent Nominee shall be a condition to the
appointment of the Independent Nominee to the Board.

3.7 Publicity.

(a) Promptly after the execution of this Agreement, the Company and the Avalon
Parties shall issue a joint press release in the form attached hereto as
Exhibit B.

(b) If the Avalon Parties are prohibited from taking any action described in
Section 3.5(h), the Company shall not (whether itself or through any of its
Affiliates or Associates), and shall cause the Board not to, publicly (or
privately to third parties) disparage any of the Avalon Parties, the Avalon
Nominee, the Independent Nominee or any officer, portfolio analyst or portfolio
manager of any of the Avalon Parties unless the Avalon Parties have failed to
cure any breach of Section 3.5 within fifteen (15) days after the Company has
delivered notice describing any such alleged breach to the Avalon
Representative.

3.8 Minimum Condition.

(a) At any time prior to the expiration of the Standstill Period, at the request
of the Company, the Avalon Parties shall certify to the Company in writing that
the Avalon Parties satisfy the Minimum Condition. If, at any time after the
Avalon Nominee is elected to the Board but prior to the expiration of the
Standstill Period, the Avalon Parties shall fail to satisfy the Minimum
Condition, (i) the Avalon Parties shall use their respective reasonable best
efforts to cause the Avalon Nominee on the Board to resign immediately by
executing and delivering to the Company an irrevocable resignation as a member
of the Board and any committees of the Board and (ii) the Company shall promptly
cause the Board to determine, by a majority vote, whether or not it desires that
the Independent Nominee resign. If the Board so determines that the Board
desires that the Independent Nominee resign and the Independent Nominee does not
immediately execute and deliver to the Secretary of the Company the Independent
Nominee’s irrevocable resignation as a member of the Board and any committees of
the Board, the Board shall promptly remove the Independent Nominee from the
Board and all committees thereof. If the Avalon Nominee fails to immediately
deliver an irrevocable resignation pursuant to clause (i) of the immediately
preceding sentence, the Board shall promptly remove the Avalon Nominee from the
Board and all committees thereof.

(b) Prior to the 2009 Annual Meeting, the Avalon Representative shall notify the
Company promptly (and in any event within one business day) if, at any time, the
Avalon Parties shall fail to satisfy the Minimum Condition.

(c) After the 2009 Annual Meeting but prior to the expiration of the Standstill
Period, the Avalon Representative shall notify the Company promptly (and in any
event within three business days) if, at any time, the Avalon Parties shall fail
to satisfy the Minimum Condition.

(d) Notwithstanding any provision to the contrary contained in this Agreement,
the Company shall not be required to perform any of its obligations under, and
none of the Avalon Parties shall have any rights under:

(i) Section 3.1(a) or (b) unless at all times after the date hereof and prior to
the 2009 Annual Meeting the Avalon Parties shall have satisfied the Minimum
Condition;

(ii) Section 3.1(d) unless at all times after the date hereof and prior to the
2010 Annual Meeting the Avalon Parties shall have satisfied the Minimum
Condition;

(iii) Section 3.2 unless at all times after the date hereof and prior to the
date on which the Independent Nominee is agreed upon by the parties hereto the
Avalon Parties shall have satisfied the Minimum Condition; or

(iv) Section 3.3 unless at all times after the date hereof and prior to the date
on which the Avalon Parties assert any right under Section 3.3 the Avalon
Parties shall have satisfied the Minimum Condition.

(e) The foregoing provisions of this Section 3.8 shall not in any way affect or
limit the covenants and agreements of the Avalon Parties set forth elsewhere in
this Agreement.

ARTICLE IV
OTHER PROVISIONS

4.1 Remedies; Venue.

(a) Each party hereto hereby acknowledges and agrees that irreparable harm would
occur if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to specific performance of
this Agreement, including an injunction or injunctions to prevent and enjoin
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof in the United States District Court for the Western
District of Wisconsin, in addition to any other remedy to which they may be
entitled at law or in equity. Any requirements for the securing or posting of
any bond with such remedy are hereby waived.

(b) Each party hereto agrees that any actions, suits or proceedings arising out
of or relating to this Agreement or the transactions contemplated hereby shall
be brought solely and exclusively in the United States District Court for the
Western District of Wisconsin (and the parties agree not to commence any action,
suit or proceeding relating thereto except in such court), and further agrees
that service of any process, summons, notice or document by United States
registered mail to the respective addresses set forth in Section 4.3 shall be
effective service of process for any such action, suit or proceeding brought
against any party in such court. Each party irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, in the United States District Court for the Western District of
Wisconsin, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in such court that any such action, suit or proceeding
brought in such court has been brought in any inconvenient forum.

4.2 Entire Agreement; Amendment. This Agreement and the exhibits referred to
herein and the documents delivered pursuant hereto contain the entire
understanding of the parties hereto with respect to the subject matter contained
herein or therein and supersede all prior agreements and understandings between
the Company or any of its representatives, on the one hand, and any of the
Avalon Parties or any of their respective representatives, on the other hand.
This Agreement shall not be amended, modified or supplemented except by a
written instrument signed by an authorized representative of the Company and the
Avalon Representative.

4.3 Notices. All notices and other communications required or permitted
hereunder and all legal process in regard hereto shall be in writing and shall
be deemed validly given, delivered or served, (a) if given by telecopy (and
thereafter promptly sent by U.S. mail), when such telecopy is transmitted to the
telecopy number set forth below and telephonic confirmation is received, (b) if
given personally, when delivered personally or (c) if sent by registered or
certified mail or by nationally recognized overnight courier service, when
actually received during normal business hours at the address specified below:

      If to the Company:  
TomoTherapy Incorporated
   
1212 Deming Way
   
Madison, Wisconsin 53717
   
Attention: General Counsel
   
Phone: (608) 830-3758
   
Facsimile: (608) 830-3944
   

with a copy to:  
Sidley Austin LLP
   
One South Dearborn Street
   
Chicago, Illinois 60603
   
Attention: Michael A. Gordon, Esq.
   
Phone: (312) 853-2217
   
Facsimile: (312) 853-7036
If to any of the  

Avalon Parties,  

to it:  
c/o Avalon Capital Group, Inc.
   
5786 La Jolla Boulevard
   
La Jolla, California 92037
   
Attention: Nicole Blakely, General Counsel
   
Phone: (858) 551-4419
   
Facsimile: (858) 551-4442
   

with a copy to:  
Bingham McCutchen LLP
   
355 South Grand Ave., Suite 4400
   
Los Angeles, California 90071
   
Attention: David Robbins, Esq.
   
Phone: (213) 680-6560
   
Facsimile: (312) 984-7700

 

or to such other address as such party may indicate by a notice delivered to the
other parties hereto in accordance with this Section 4.3.

4.4 Severability. Wherever possible, each provision hereof shall be interpreted
in such manner as to be effective and valid under applicable law, but in case
any one or more of the provisions contained herein shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such provision
shall be ineffective to the extent, but only to the extent, of such invalidity,
illegality or unenforceability without invalidating the remainder of such
invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.

4.5 Headings. The headings and subheadings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning of the
terms of this Agreement.

4.6 Waiver. Any term or provision of this Agreement may be waived, or the time
for its performance may be extended, by the party or parties entitled to the
benefit thereof. Any such waiver shall be validly and sufficiently authorized
for the purposes of this Agreement if, as to any party, it is authorized in
writing by an authorized representative of such party. The failure of any party
hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.

4.7 Fees and Expenses. As promptly as practicable after the date hereof, but in
no event later than five (5) business days after the date hereof, the Company
shall pay to the Avalon Representative the sum of $125,000 in immediately
available funds, as reimbursement for the Avalon Parties’ expenses incurred in
connection with the preparation of the Avalon Proxy Statement and this
Agreement, and other matters related thereto or hereto. The Company acknowledges
that the Avalon Parties have provided written evidence of all such expenses
prior to their reimbursement by the Company.

4.8 Term. This Agreement shall remain in full force and effect from the date
hereof until the expiration of the Standstill Period or its earlier termination
pursuant to Section 4.18.

4.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (as opposed to the conflicts of law
provisions) of the State of Wisconsin.

4.10 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that (a) the Company may not delegate, assign or otherwise
transfer any of its obligations under this Agreement without the prior written
consent of the Avalon Representative and (b) none of the Avalon Parties may
delegate, assign or otherwise transfer any of its obligations under this
Agreement without the prior written consent of the Company.

4.11 No Admission. Nothing contained herein shall constitute an admission by any
party hereto of any wrongdoing.

4.12 Survival of Representations. All representations and warranties made by the
parties to this Agreement or pursuant hereto shall survive the execution of this
Agreement.

4.13 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

4.14 Interpretation. For purposes of this Agreement, (a) the words “include,”
“includes” and “including” shall be deemed to be followed by the words “without
limitation,” (b) the word “or” is not exclusive and (c) the words “herein,”
“hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole.
Unless the context otherwise requires, references herein: (i) to Articles,
Sections and Exhibits mean the Articles and Sections of, and the Exhibits
attached to, this Agreement; (ii) to an agreement, instrument or other document
means such agreement, instrument or other document as amended, supplemented and
modified from time to time to the extent permitted by the provisions thereof and
by this Agreement; and (iii) to a statute means such statute as amended from
time to time and includes any successor legislation thereto and any regulations
promulgated thereunder. Titles to Articles and headings of Sections are inserted
for convenience of reference only and shall not be deemed a part of or to affect
the meaning or interpretation of this Agreement. Each of the parties hereto
acknowledges that it has been represented by counsel of its choice throughout
all negotiations that have preceded the execution of this Agreement and that it
has executed this Agreement with the advice of such independent counsel. Each
party and its counsel cooperated and participated in the drafting and
preparation of this Agreement, and this Agreement shall be construed without
regard to any presumption or rule requiring construction or interpretation
against the party drafting an instrument or causing any instrument to be
drafted.

4.15 Time is of the Essence. With respect to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.

4.16 No Third-Party Beneficiaries. Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon or give to any person
other than the parties hereto and their successors and permitted assigns any
right, remedy or claim under or by reason of this Agreement.

4.17 Avalon Representative. Each of the Avalon Parties hereby irrevocably
appoints Avalon Capital Group, Inc. as such Avalon Party’s attorney-in-fact and
representative (the “Avalon Representative”), in such Avalon Party’s place and
stead, to do any and all things and to execute any and all documents and give
and receive any and all notices or instructions in connection with this
Agreement and the transactions contemplated hereby. The Company shall be
entitled to rely, as being binding on each of the Avalon Parties, upon any
action taken by the Avalon Representative or upon any document, notice,
instruction or other writing given or executed by the Avalon Representative on
behalf of the Avalon Parties.

4.18 Change of Control. If, as a result of the consummation of a change of
control of the Company that is, to the extent required by applicable law,
approved by the Board and/or the shareholders of the Company (a “Change of
Control”), the Directors who comprised the Board immediately prior to the
consummation of the Change of Control cease to have the legal ability to
determine (dispositively or at all) the composition of the Board or the nominees
for election as Directors at the 2009 Annual Meeting or the 2010 Annual Meeting,
then this Agreement shall terminate, it being understood, for the avoidance of
doubt, that nothing in this Agreement shall prohibit a Change of Control.

[signature pages follow]

IN WITNESS WHEREOF, and intending to be legally bound hereby, each of the
undersigned parties has executed or caused this Agreement to be executed as of
the date first above written.

TomoTherapy Incorporated

By: /s/ Frederick A. Robertson
——————————————
Name: Frederick A. Robertson
Title: President and Chief Executive Officer

Avalon Capital Group, Inc.

By: /s/ Dave Russell
——————————————
Name: Dave Russell
Title: EVP

Avalon Portfolio, LLC

By its Manager, Avalon Capital Group, Inc.

By: /s/ Dave Russell
——————————————
Name: Dave Russell
Title: EVP

Avalon Technology, LLC
By its Manager, Avalon Portfolio
By Avalon Capital Group, Inc.

By: /s/ Dave Russell
——————————————
Name: Dave Russell
Title: EVP

Exhibit A

Avalon Parties

Avalon Capital Group, Inc.
Avalon Portfolio, LLC
Avalon Technology, LLC

Exhibit B

Press Release

TOMOTHERAPY AND AVALON ANNOUNCE SETTLEMENT

Jonathan McCloskey to Join TomoTherapy Board of Directors;
TomoTherapy to Add Another Independent Director
_________________________________________________

MADISON, WI and LA JOLLA, CA – April 8, 2009 – TomoTherapy Incorporated (NASDAQ:
TOMO), producer of the Hi •Art® treatment system for advanced radiation therapy
in cancer care, and Avalon Portfolio, LLC and certain of its affiliates, today
announced that they have reached an agreement, under which Jonathan McCloskey, a
portfolio manager at Avalon Capital Group, Inc., has been appointed to
TomoTherapy’s Board of Directors, effective April 15, 2009. The parties also
agreed to add another mutually acceptable independent director to TomoTherapy’s
Board. With these two additions, the TomoTherapy Board would be expanded to
eleven members.

“We are pleased to have reached an agreement with Avalon and welcome
Mr. McCloskey as a new director,” said Fred Robertson, M.D., TomoTherapy’s CEO.
“The Board and management remain confident in TomoTherapy’s technology
leadership position in the radiation therapy marketplace and continue to believe
in the significant long-term potential of the Company. Despite near-term
economic challenges, we remain focused on driving operating results and are
committed to delivering increased value to all of our shareholders.”

“We are pleased to join TomoTherapy’s Board of Directors and actively work with
the Board to enhance shareholder value,” said Jonathan McCloskey of Avalon
Capital Group, Inc.

McCloskey will serve on the Board’s Nominating and Governance Committee. In
addition, TomoTherapy and Avalon will identify and evaluate potential
independent candidates for nomination to the TomoTherapy Board.

Pursuant to the agreement, Avalon will withdraw its nominees for election to the
Board of Directors. TomoTherapy’s annual meeting of shareholders will take place
as scheduled on May 1, 2009, and Avalon has agreed to vote its TomoTherapy
shares for reelection of all of the Company’s director nominees.

About TomoTherapy Incorporated
TomoTherapy Incorporated has developed, markets and sells the TomoTherapy® Hi
•Art® treatment system, an advanced radiation therapy system for the treatment
of a wide variety of cancers. The Hi •Art treatment system combines integrated
CT imaging with conformal radiation therapy to deliver sophisticated radiation
treatments with speed and precision while reducing radiation exposure to
surrounding healthy tissue. The company’s stock is traded on the NASDAQ Global
Select Market under the symbol TOMO. To learn more about TomoTherapy, please
visit TomoTherapy.com.

©2009 TomoTherapy Incorporated. All rights reserved. TomoTherapy, the
TomoTherapy logo and Hi •Art are among trademarks, service marks or registered
trademarks of TomoTherapy Incorporated.

About Avalon Capital Group
Avalon Capital Group, Inc., based in La Jolla, California, is the private
investment company of Ted Waitt, co-founder of Gateway. The firm invests in a
diverse array of industries, including real estate, technology, health care,
finance and entertainment. More information on Avalon Capital Group can be found
at www.avalon.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Any statements using the terms
“should,” “believe,” “outlook,” “expect,” “anticipate” or similar statements are
forward-looking statements that involve risks and uncertainties that could cause
the company’s actual results to differ materially from those anticipated. Such
risks and uncertainties include: demand for the company’s products; impact of
sales cycles and competitive products and pricing; the effect of economic
conditions and currency exchange rates; the company’s ability to develop and
commercialize new products; its reliance on sole or limited-source suppliers;
its ability to increase gross margins; the company’s ability to meet U.S. Food
and Drug Administration and other regulatory agency product clearance and
compliance requirements; the possibility that material product liability claims
could harm future revenue or require the company to pay uninsured claims; the
company’s ability to protect intellectual property; the impact of managed care
initiatives, other health care reforms and/or third-party reimbursement levels
for cancer care; potential loss of key distributors or key personnel; risk of
interruptions to its operations due to terrorism, disease or other events beyond
the company’s control; and the other risks listed from time to time in the
company’s filings with the U.S. Securities and Exchange Commission, which by
this reference are incorporated herein. TomoTherapy assumes no obligation to
update or revise the forward-looking statements in this release because of new
information, future events or otherwise.

###