Exhibit 10.38
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as [ * ]. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
M&I Marshall & Ilsley Bank
Loan Agreement (“Agreement”)
TomoTherapy Incorporated (“Borrower”) agrees with M&I Marshall & Ilsley Bank
(“Bank”) to all terms and conditions set forth in this Agreement so long as any
obligation is owed Bank (“Loans”), or Bank has any obligation to lend to the
Borrower under any note evidencing a loan from the Borrower to the Bank (the
“Note”), and all extensions, renewals or modifications of any note evidencing a
loan.

1)   CONDITIONS FOR LOANS. Bank’s obligation to make any loan is subject to
satisfaction of the following conditions:

  a)   Borrower shall not be in default under this Agreement or any other
obligation to Bank or to any other creditor of Borrower.

2)   REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Bank
that on the date of the Loans:

  a)   The Loans will be used solely for business purposes and are not and will
not be used for personal, family, household or agricultural purposes.     b)  
Borrower will not use any part of the proceeds of the loans to purchase or carry
any margin stock within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System.     c)   There is no litigation or administrative
proceeding pending or, to the knowledge of Borrower, threatened against
Borrower, which might result in any material adverse change in the business or
financial condition of Borrower.     d)   Borrower has no notice or knowledge of
any substance which has been, is, or will be present, used, stored, deposited,
treated, or disposed of on, under or about any real estate now or at any time
owned or occupied by the Borrower which would require clean up, removal or some
other remedial action under any federal, state or local laws, regulations,
ordinances, codes or rules. In the event any such substance is present on such
real estate, Borrower shall indemnify and hold harmless Bank, its directors,
officers, employees and agents from all loss, costs (including reasonable
attorneys fees and expenses), and liability of every kind and nature resulting
from or arising out of or based upon such substance. Borrower shall immediately
notify bank in writing of any governmental or regulatory action or third party
claim instituted or threatened in connection with any such substance.     e)  
Borrower has paid all federal and state income taxes or other taxes of any kind
owed by it for all past years and no claim is being asserted against it with
respect to any federal or state income taxes for any past years or with respect
to any other federal, state, or other taxes of any kind or nature for any past
years.

3)   COVENANTS. Borrower shall, so long as any amounts remain unpaid:

  a)   Furnish to Bank, as soon as available, such financial information
respecting Borrower as Bank from time to time requests, and without request
furnish to Bank:

  i)   Within one hundred twenty (120) days after the end of each fiscal year of
Borrower a balance sheet of Borrower as of the close of such fiscal year and
related statements of income and retained earnings for such year all in
reasonable detail and satisfactory in scope to Bank, audited by a certified
public accounting firm acceptable to Bank in accordance with generally accepted
accounting principles applied on a consistent basis, and     ii)   Within
forty-five (45) days after the end of each quarter a balance sheet of Borrower
as of the end of such quarter and related statements of income and retained
earnings for the period from the beginning of the fiscal year to the end of such
quarter, prepared in accordance with generally accepted accounting principles
applied on a consistent basis, certified, subject to normal year-end
adjustments, by the chief financial representative of Borrower.

  b)   Keep complete and accurate business records. Permit any representative of
the Bank to visit and inspect any of the Borrower’s tangible or intangible
properties as often as desired by Bank.     c)   Permit Bank, at any reasonable
time during business hours, access to all of the financial records of Borrower
to enable Bank to copy and/or audit Borrower’s financial records using persons
designated by Bank. Borrower shall pay Bank, upon demand, for the reasonable
cost of such audits.     d)   Not take any action or permit any event to occur
which materially impairs Borrower’s ability to make payments under this
Agreement when due. Such events include, without limitation, the fact that
Borrower, or any surety or Guarantor for Borrower’s obligations under this
Agreement ceases to exist, dies, or becomes insolvent or the subject of
bankruptcy or insolvency proceedings.     e)   Maintain, preserve and keep its
machinery, equipment and all other property in good repair and condition and
duly pay and discharge all taxes and other charges imposed upon said properties.
    f)   Timely perform and observe all of the following financial covenants,
all calculated in accordance with generally accepted principles of accounting
applied on a consistent basis:

  i)   Maintain at all times a Tangible Net Worth (as defined below) of equal to
or greater than [ * ].     ii)   Maintain at all times a ratio of Total
Liabilities to Tangible Net Worth equal to or less than [ * ] to [ * ].
Calculated as: Total Liabilities/ Tangible Net Worth

Tangible Net Worth: shall mean the excess of the total of all assets of the
Borrower and all consolidated subsidiaries and affiliates, of every kind and
character, other than goodwill, corporate franchises and other intangibles, less
the aggregate of all liabilities (excluding tax asset value) and reserves of
every kind and character of the Borrower and all consolidated subsidiaries and
affiliates, all determined in accordance with generally accepted principles of
accounting.

  g)   Not create or permit to exist any lien or encumbrance with respect to
Borrower’s property, except liens in favor of Bank, liens associated with
existing loans provided to Borrower by Wisconsin Department of Commerce and
Madison Development Corporation, liens for taxes if they are being contested in
good faith by appropriate proceedings and for which appropriate reserves are
maintained and liens or encumbrances permitted under any of the Security
Documents.     h)   Borrower shall have a sixty (60) day right to cure period if
any of the covenants are not complied with.

4)   ADDITIONAL SECURITY. Unless a lien would be prohibited by law or would
render a nontaxable account taxable, Borrower grants to Bank a security interest
and lien in any deposit account Borrower may at any time have with Bank to
secure all debts, obligations and liabilities of Borrower under this Agreement.
Bank may at any time after the occurrence of an event of default set-off any
amount under this Agreement against any deposit balances or other money now or
hereafter owed to Borrower by Bank.

 

--------------------------------------------------------------------------------

 

5)   DEFAULT AND ACCELERATION. Any one or more of the following events shall
constitute a default hereunder and under the Notes:

  a)   Borrower fails to pay any amount when due under this Agreement or the
Notes delivered by Borrower pursuant to this Agreement;     b)   Any
representation or warranty made under this Agreement or information provided by
Borrower in connection with this Agreement is or was false or fraudulent in any
material respect;     c)   Material adverse change occurs in Borrower’s
financial condition;     d)   Borrower fails to timely observe or perform any of
the covenants or duties contained in this Agreement;     e)   Any guaranty of
Borrower’s obligation under this Agreement is revoked or becomes unenforceable
for any reason;     f)   Any event of default occurs under any security
agreement;     g)   A default by Borrower with respect to any terms or
provisions of documents evidencing any other indebtedness of Borrower to Bank;  
  h)   The Borrower shall admit in writing the inability to pay any of its debts
or shall have made a general assignment for the benefit of creditors, or shall
have applied for or otherwise have a receiver, trustee, or custodian appointed
for any of its property or assets;     i)   The occurrence of any other event
which causes the Bank, in good faith, to deem itself insecure;

Then, at Bank’s option, and upon verbal or written notice to Borrower, given at
any time including after receipt from Borrower of a request for a Loan, Bank’s
obligation to make Loans under this Agreement shall terminate and the total
unpaid balance shall become immediately due and payable without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Borrower.
Bank’s obligation to make Loans under this Agreement shall automatically
terminate and the total unpaid balance of the Notes shall automatically become
due and payable in the event Borrower becomes the subject of bankruptcy or other
insolvency proceedings. Bank may waive any default without waiving any other
subsequent or prior default. Borrower agrees to pay Bank’s cost of
administration of this Agreement, including reasonable attorneys’ fees. Borrower
also agrees to pay all of Bank’s costs of collection, before and after judgment,
including reasonable attorneys’ fees.

6)   CROSS DEFAULT OF ALL OTHER OBLIGATIONS OF BORROWER WITH BANK. As an
inducement to Bank to extend the credit referenced herein, Borrower agrees that
in the event it is in default with respect to this Agreement, or the Notes
delivered pursuant hereto, it shall also be in default with respect to all other
agreements, notes, or other documents evidencing Borrower’s other indebtedness
to Bank. Conversely, if any payment is not made when due under any other note,
agreement, assignment or mortgage in favor of the Bank, or if any event of
default should occur as defined in any such note, agreement, assignment or
mortgage, the unpaid balance of the Notes shall at the option of the holder and
without notice, mature and become immediately due and payable.

7)   TERMINATION. Unless sooner terminated by Borrower’s default, Borrower’s
right to obtain loans and Bank’s obligation to extend the credit under this
Agreement shall terminate on the date the Notes are due by maturity or default
(the “Termination Date”). The Borrower may terminate Borrower’s right to obtain
loans under this Agreement at any time and for any reason by written notice to
Bank. Such notice of termination signed by Borrower shall be binding on each
Borrower who signs this Agreement. Termination, for whatever reason, does not
affect Bank’s rights, powers and privileges, nor Borrower’s duties and
liabilities, with regard to the then-existing balance under this Agreement.

8)   ENTIRE AGREEMENT. This Agreement is intended by Borrower and Bank as a
final expression of this Agreement and as a complete and exclusive statement of
its terms, there being no conditions to the full effectiveness of this Agreement
except as set forth in this Agreement.   9)   NO WAIVER; REMEDIES. No failure on
the part of Bank to exercise, and no delay in exercising, any right, power or
remedy under this Agreement shall operate as a waiver of such right, power or
remedy; nor shall any single or partial exercise of any right under this
Agreement preclude any other or further exercise of the right or the exercise of
any other right. The remedies provided in this Agreement are cumulative and not
exclusive of any remedies provided by law.   10)   ISDA. Obligations and
Indebtedness includes, without limitation all obligations, indebtedness and
liabilities arising pursuant to or in connection with any interest rate swap
transaction, basis swap, forward rate transaction, interest rate option, price
risk hedging transaction or any similar transaction between the Borrower and
Bank.   11)   INTERPRETATION. The validity, construction and enforcement of this
Agreement are governed by the internal laws of Wisconsin. Invalidity of any
provision of this Agreement shall not affect the validity of any other
provisions of this Agreement.   12)   CONFLICT BETWEEN THIS AGREEMENT AND THE
NOTES. In the case of any ambiguity or conflict between this Agreement and the
Notes, this Agreement will govern.   13)   PREVIOUS LOAN AGREEMENTS. This
Agreement supersedes and replaces all previous loan agreements between Bank and
Borrower.

     Dated as of December 1, 2007

                      TomoTherapy Incorporated       M&I Marshall & Ilsley Bank
   
 
                   
By:
  /s/ Frederick A. Robertson, MD
 
      By:   /s/ Kirt C. Soukup
 
    Frederick A. Robertson, MD, Chief Executive Officer       Kirt C. Soukup,
Vice President    

                      Drafted By: br       Loan [ * ]       By:   /s/ Jeff
Ticknor
 
          Jeff Ticknor, Senior Vice President