Document:

ex10_1.htm

    EMPLOYMENT
AGREEMENT

    

    THIS AGREEMENT, made and entered into
this April 6th day of
2009, by and between OptimizeRx Corporation, a Nevada Company, hereinafter
referred to as “Employer” and David Lester, hereinafter referred to as the
“Employee”.

    

    Recitals

    

    The Employer is engaged in the business
of internet marketing, sales, and product promotion, and desires the Employee as
Chief Executive Officer

    

    IT IS THEREFORE AGREED:

    

    Term of
Employment

    

    1. The
Employer hereby employs the Employee and the Employee hereby accepts employment
with the Employer beginning on the 6th day of
April 2009.

    

    Duties of
Employee

    

    2. AS CEO,
you are responsible for the overall planning and execution of the company,
including directing management to reach the corporate goals and objectives as
outlined by the board.  See Appendix A:  CEO Job Description
for further details of overall responsibilities.

    

    Change in
Duties

    

    (c) The principal duties of the
Employee, as specified in Paragraph 2 of this Agreement, may be changed at any
time by the mutual consent of the Employer and the
Employee.  Notwithstanding any such change, the employment of the
Employee shall be construed as continuing under this Agreement as
modified.

    

    Effect of
Disability

    

    (d)  If the Employee at any
time during the term of this Agreement should be unable to perform his duties
under this Agreement because of

     

    
      
        
        

      

      
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    Personal injury, illness, or any other
cause, the Employer may assign the Employee to other duties, and the
compensation to be paid thereafter to the Employee shall be determined by the
Employer in its sole discretion.  If the Employee is unwilling to
accept the modification in duties and compensation made by the Employer, or if
the Employee’s inability to perform is of such extent as to make a modification
of duties hereunder not feasible, this Agreement shall terminate within 90
days.

    

    Place of
Performance

    

    3. At the
commencement of this employment, the Employee shall perform his duties at the
office of the Employer located at 407 Sixth Street, Rochester,
MI  48307.  However, at any time deemed necessary or
advisable by the Employer for business purposes, the Employee shall work at such
other place or places as may be determined by the Employer.

    

    Hours of
Employment

    

    4. The
Employee shall work 8+ hours daily during the periods to be designated by the
Employer and 5 days each week, for a total of 40+ hours per week actually
devoted to the business of the Employer.

    

    Engaging in Other
Employment

    

    5. The
Employee shall devote his entire productive time, ability, and attention during
the normal business hours to the business of Employer.  The Employee
shall not, during the term of this Agreement, directly or indirectly, render any
services of a business, commercial, or a professional nature, whether for
compensation or otherwise, to any person or organization which competes,
directly, or indirectly, with the business of the employer, without the prior
written consent of the Employer.

    

    Compensation

    

    6. As
compensation for services rendered under this Agreement, the Employee shall be
entitled to receive from the Employer a salary of $150,000 per year, payable in
semi-monthly installments in which such payment becomes due, prorated for any
partial employment period.  In addition, David Lester is eligible for
additional quarterly and annual bonus compensation, stock options and stock
grants based on performance metrics outlined by the board of
directors.  This includes stock options of 500,000 at hire, with 25%
immediately vested and 25% vested after completion of each quarter
hire.

    

    Employee Benefit
Plans

    

    7. The
Employee shall be entitled to participate in any qualified pension plan,
qualified profit-sharing plan, medical or dental reimbursement plan, group term
life

    

    
      
        
        

      

      
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    insurance
plan, or any other employee benefit plan which is presently existing or which
may be established in the future by the Employer.  Such right to
participation shall be in accordance with the terms of the particular plans
involved.

    

    Paid
Vacations

    

    8. The
Employee shall immediately have an annual vacation leave of 3 weeks in 2009 and
4 weeks within the following calendar at full pay.  The time for such
vacation shall be selected by the Employee, but must be approved by the
Employer.

    

    Holidays

    

    
      	
              9.  

            	
              The
      Employee shall be entitled to full payment on each
      traditional.

            

    

    

    Paid Sick
Leave

    

    10. The
Employee shall entitled to 5 days per year as sick leave with full
pay.  Such sick leave can be accumulated up to a total of 10 days or
without limitation.

    

    Business
Expenses

    

    11. The
Employer, in accordance with the rules and regulations that it may issue from
time to time, shall reimburse the Employee for business expenses properly
incurred during the performance of his duties.

    

    Termination of
Employment

    

    
      	
              12.  

            	 

    

    

    (a)  If
the Employee willfully breaches or habitually neglects the duties which he is
required to perform under the terms of this Agreement, the Employer may at its
option terminate this Agreement by giving 14 days’ written notice of termination
to the Employee, without prejudice to any other remedy to which the Employer may
be entitled either at law, in equity, or under this Agreement; or

    

    (b) The
employment of the Employee shall continue only for as long as the services
rendered by him are satisfactory to the Employer, regardless of any other
provision contained in this Agreement.  The Employer shall be the sole
judge as to whether the services of the Employee are satisfactory;
or

     

    (c) This
Agreement may be terminated without cause by either party giving 15 days’ notice
of termination to the other party.  Such

    

    
      
        
        

      

      
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    termination
shall not prejudice any other remedy to which either party may be entitled
either at law, in equity, or under this Agreement.

    

    Severance
Pay

    

    13. In the
event of termination of this Agreement prior to the completion of the term of
the employment specified herein, the Employee shall be entitled to the
compensation earned by him prior to the date of termination as provided for in
this Agreement, computed pro rata up to and including that date.  In
addition, if the Employer terminates the employment of the Employee, the
Employee shall be entitled to receive a cash severance pay in an amount equal to
1 month salary.

     

    Amendment and
Waiver

     

    14. Any
provision of this Agreement may be altered or amended by a written document
signed by both parties hereto setting forth such alteration or amendment without
affecting the obligations created by the other provisions of this
Agreement.  The Employer and the Employee agree that the failure to
enforce any provision or obligation under this Agreement shall not constitute a
waiver thereof or serve as a bar to the subsequent enforcement of such provision
or obligation or any other provision or obligation under this
Agreement.

     

    Survival of
Covenants

     

    15. This
Agreement shall be binding upon any successors or heirs or representatives of
the parties hereto.  The restrictive covenants and promises of the
Employee contained in this Agreement shall survive any termination or rescission
of this Agreement unless the Employer executes a written agreement specifically
releasing the Employee from such covenants.

     

    Governing
Law

     

    
      	
              16.  

            	
              This
      Agreement is to be construed in accordance with the laws of the State of
      Michigan.

            

    

     

    Construction

     

    17. Throughout
this Agreement, the use of the singular number shall be construed to include the
plural, the plural the singular, and the use of any gender shall include all
genders, whenever required by context.

     

    
      
        
        

      

      
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    Obligation to Execute
Documents

     

    18. Each
party to this Agreement shall, from time to time, upon request by the other
party, execute any additional documents which reasonably may be required to
effectuate the purposes of this Agreement.

     

    Severability

     

    19. If any
provision of this Agreement is held invalid by any tribunal in a final decision
frorm which no appeal is or can be taken, such provision shall be deemed
modified to eliminate the invalid element, and, as so modified, such provision
shall be deemed a part of this Agreement.  The invalidity of any
provision of this Agreement shall not affect the force and effect of the
remaining provisions.

     

    Notices and Written
Consents

     

    20. All
notices or written consents to be given hereunder by either party to the other
may be effected either by personal deliver or by registered or certified mail,
return receipt requested.  When mailed, notices or written consents
shall be addressed to the parties at the addresses appearing above, unless a
party has notified the other party of a change in address.  Personal
delivery to the Employer of any notice or written consent may be effected by
personal delivery to the Employee’s immediate supervisor at his place of
employment.  Notice shall be considered communicated, and consent
shall be considered given, as of the date it is actually received.

     

    Executed
at 407 Sixth Street, Rochester, Michigan, on the day and year first above
written.

     

    
      	 
      	
              Employer:

            
	 	 
	 	/s/David Harrell 
	 
      	
              David
      Harrell, Chairman

            
	 	 
	 
      	
              Employee:

            
	 	 
	 	/s/David Lester 
	 
      	
              David
      Lester

            

    

    

    
      
        
        

      

      
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    APPENDIX
A: CEO JOB DESCRIPTION

    

    Job
Title:  Chief Executive

    

    Key
Function:

    

    To
implement the strategic goals and objectives of the organization to accelerate
profitability and growth of company.  The CEO/Director is a major
contributor to the long-term viability, viable development and autonomy of the
Company.  The CEO/Director reports to the Chair of the Board and is
responsible to the Board of Directors.

    

    Major
Duties/Accountabilities:

    

    
      	
              1.  

            	
              Board
      Administration and Support – Supports operations and administration of
      Board by advising and informing Board members, interfacing between Board
      and staff, and supporting Board’s evaluation of chief
      executive

            

    

    

    
      	
              2.  

            	
              Program,
      Product and Service Delivery – Overseas design, marketing, promotion,
      delivery and quality of existing and new programs, products and
      services.

            

    

     

    
      	
              3.  

            	
              Financial,
      Tax, Risk and Facilities Management – Recommends yearly budget for Board
      approval and prudently manages organization’s resources within those budge
      guidelines according to current laws and
      regulations.  Responsible for overseeing and final preparation
      of all filings as required by SEC.

            

    

     

    
      	
              4.  

            	
              Human
      Resource Management – Effectively manages the human resources of the
      organization according to authorized personnel policies and procedures
      that fully conform to current laws and
  regulations

            

    

     

    
      	
              5.  

            	
              Community,
      Public and Investor Relations – Assures the organization and its mission,
      programs, products and services are consistently presented in strong,
      positive image to relevant
stakeholders.EX-10.1

[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.

###

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