Document:

Exhibit 10.31

 

PURSUANT TO 17 C.F.R.
§ 240.24B-2, CONFIDENTIAL INFORMATION (INDICATED BY {*****}) HAS BEEN
OMITTED FROM THIS DOCUMENT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT APPLICATION FILED
WITH THE COMMISSION

 

ACCURAY INCORPORATED

MULTIPLE LINAC AND MULTI-MODALITY 

DISTRIBUTOR AGREEMENT

 

This Multiple LINAC and Multi-Modality Distributor Agreement (“Agreement”)
is entered into by and between ACCURAY INCORPORATED, a Delaware corporation
with its executive offices located at 1310 Chesapeake Terrace, Sunnyvale,
California 94089, USA (“Accuray”), and  SIEMENS
AKTIENGESELLSCHAFT,  a corporation
formed under the laws of the Federal Republic of Germany, with its registered
offices located at Berlin and Munich (“Siemens”),
as of June 8, 2010 (“Effective Date”).

 

RECITALS

 

Accuray
manufactures and sells full-body radiosurgery systems using image-guided
robotics, including the CyberKnife® Robotic Radiosurgery System, which is FDA
cleared in the United States to provide treatment planning and image-guided
stereotactic radiosurgery and precision radiotherapy for lesions, tumors and
conditions anywhere in the body where radiation treatment is indicated.

 

In
order to achieve its business objectives, Accuray relies on qualified
distributors to market and distribute its products and services.

 

Accuray
and Siemens have entered into that certain Strategic Alliance Agreement, dated
as of the date hereof (the “Strategic Alliance Agreement”), and such
agreement provides that Accuray and Siemens shall enter into a distribution
agreement for Multiple LINAC and Multi-Modality Purchases (as defined below).

 

Accuray
wishes to appoint Distributor (as defined below) as a non-exclusive, worldwide
distributor for the Products and Services to Customer in connection with
Multiple LINAC or Multi-Modality Purchases (as defined below), subject to the
terms and conditions of this Agreement, and Distributor wishes to accept such
appointment.

 

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
set forth below, the parties hereto hereby agree as follows:

 

1.          DEFINITIONS.  Capitalized terms used, but not defined
herein, shall have the meaning provided in the Strategic Alliance
Agreement.  The following terms, as used
herein, have the following meaning:

 

1.1.       “Accuray Regions” means Accuray’s
sales regions (as of the Effective Date) of the Americas (North America and
South America), APAC (Asia Pacific, including Australia and other than India
and Japan), EIMEA (Europe, India, Middle East, and Africa), and Japan.

 

1.2.       “Customer” means any
person or business entity with whom Distributor enters into an agreement for
Products or Services in connection with a Multiple LINAC or Multi-Modality
Purchase pursuant to this Agreement.

 

1.3.       “Distributor” means Siemens,
its Affiliates, or any Third Party which has been granted distribution rights
whose scope includes the Products and/or Services by Siemens.

 

1.4.       “Multiple LINAC or
Multi-Modality Purchase” means a Multiple LINAC
Purchase or a Multi-Modality Purchase.

 

 

1.5.       “Multi-Modality Purchase” means the
purchase, on a single purchase order, of at least one Distributor imaging
product (e.g., CT, MR, PET-CT) and at least one System.

 

1.6.       “Multiple LINAC Purchase” means the
purchase, on a single purchase order, of at least one Distributor linear
accelerator product and at least one System.

 

1.7.       “Product(s)” means the
System and/or related products manufactured by or for Accuray for use in the
radiosurgery market, which have been approved for sale in the Customer’s
geographic region.

 

1.8.       “Quote” means a quote
provided by Accuray to Distributor pursuant to Section 2.3 that will serve
as the basis for the Product configuration, Services, pricing and delivery schedule
offered to a Customer by Distributor.

 

1.9.       “Service(s)” means the
performance of radiosurgery-related service(s) by Accuray or its
distributors, which may include technical support, training or installation of
Products as specified in the Quote.

 

1.10.     “Service Agreements” means the
Accuray CyberKnife Service Agreement or such other service programs and
agreements as may be released or modified by Accuray from time to time.

 

1.11.     “Spare Parts” means
replacement or additional parts or Products used in connection with the System.

 

1.12.     “Specification(s)” means the
current written description of a Product or Service prepared by Accuray and
provided to Distributor.

 

1.13.     “System(s)” means the
Accuray CyberKnife® Robotic Radiosurgery System or CyberKnife® VSITM System, as
applicable.

 

2.          DISTRIBUTORSHIP

 

2.1.       Appointment.  Accuray hereby appoints Distributor as a
non-exclusive, worldwide distributor of Products and Services to Customers
solely in connection with Multiple LINAC or Multi-Modality Purchases, not to
the exclusion of Accuray itself or any of its other current or future
distributors and subject to the terms and conditions of this Agreement.  By way of clarification, this Agreement does
not relate to any Cayman Product, including, without limitation, the
distribution or sale thereof or any services related thereto.

 

2.2.       Pricing.

 

2.2.1.       Pricing of Products and
Services shall be based upon Accuray’s then current price lists for such
Products and Services.  The current price
list for Products and Services effective as of the Effective Date will be
provided to Distributor contemporaneously with the delivery of this fully
executed Agreement to Distributor.  Such
price lists will be subject to change from time to time in Accuray’s sole
discretion, and Accuray shall use commercially reasonable efforts to provide
Distributor with updated pricing on a regular basis, provided that pricing
included in a Quote delivered by Accuray to Distributor shall reflect Accuray’s
current up-to-date pricing unless otherwise agreed.  Updated price lists shall not apply to valid
Quotes 

 

2

 

issued by Accuray and
subject to acceptance by Distributor prior to the effective date of such
updated price lists.

 

2.2.2.       Notwithstanding the
foregoing or anything to the contrary contained in this Agreement, Distributor
may present for approval to Accuray opportunities for sales of Products and
Services at prices that differ from the prices set forth in the then current
price list.  Accuray may, in its sole and
absolute discretion, approve any such opportunity, and if approved in writing
by Accuray, Distributor shall otherwise be permitted to pursue such opportunity
at such prices, which opportunity shall otherwise be governed by and pursued
pursuant to the terms of this Agreement.

 

2.3.       Quote and Purchase Process.  Distributor acknowledges and agrees that
Accuray will determine the appropriate quote process to be observed by the
parties under this Agreement and may amend this process (other than the
approval rights set forth in Section 2.3.2) as notified to the Distributor
reasonably in advance. In addition, Distributor acknowledges that each proposed
sale of a Product or Service under this Agreement is subject to the approval
rights of Accuray set forth in Section 2.3.2.  Accuray and Distributor will comply with the
following process for making sales of Products and Services in connection with
Multiple LINAC or Multi-Modality Purchases:

 

2.3.1.       Opportunity.  Once Distributor has identified a Customer
opportunity in connection with a Multiple LINAC or Multi-Modality Purchase, it
shall request a Quote from Accuray based on the Product configuration and
Services requested by the Customer and the Accuray Region in which the Customer
is located, and shall include such other information regarding the Customer and
the proposed opportunity as Accuray may reasonably request.

 

2.3.2.       Quote.  Following receipt of Distributor’s Quote
request, Accuray will determine whether to approve the issuance of a Quote
related to such request.  Such
determination shall be made in accordance with and subject to the conditions
set forth in Schedule 2.3.2 attached hereto.  If Accuray approves the issuance of a Quote,
Accuray shall issue a Quote to Distributor based on the Product configuration
and Services requested by the Customer, including pricing for such Products and
Services as provided in Section 2.2 above. 
The Quote issued by Accuray in relation to a Customer opportunity shall
serve as the basis of any offer made by Distributor to that Customer and shall
remain valid for at least six months (unless earlier declined by Distributor),
and Distributor shall submit an amended Quote request to Accuray in the event
adjustments to a Quote are requested by the Customer.  Any such amended Quote request from
Distributor shall again be subject to the Accuray approval process set forth in
this Section 2.3.2.

 

3

 

2.3.3.       Purchase.  To purchase Products or Services based on a
Quote provided by Accuray, Distributor will issue a purchase order, which shall
include specific references to the quote number of such Quote (the “Purchase
Order”). Accuray shall either accept or reject such Purchase Order within
two weeks after receipt thereof, with any failure to approve or disapprove of
such Purchase Order in such period constituting disapproval.  Each purchase of Accuray Components and
Interfaces shall be accomplished and a Purchase Order may be accepted by the
execution of the Purchase Order by an authorized representative of
Accuray.  To the extent of any
inconsistency between the Quote and the related Purchase Order, the terms and
conditions of such Quote shall govern and Distributor acknowledges and agrees
that Accuray shall not be bound by any terms, conditions or boilerplate
language included in a Distributor purchase order submitted to Accuray.  The Purchase Order shall be delivered to
Accuray via fax, electronic mail, or mail at the following address:

 

Accuray
Incorporated

ATTN:
Contracts Administration

1310
Chesapeake Terrace

Sunnyvale,
CA 94089

Main:
(408) 716-4600

Fax:
(408) 789-4205

Email:
Orders@accuray.com

 

2.3.4.       Cancellation; Amendment;
Conflict.  Distributor
may cancel the Purchase Order if Accuray has not executed such Purchase Order
within two weeks of receipt.  Any
amendment or addition to the Purchase Order shall only be effective if
Distributor and Accuray confirm such amendment or addition in writing. To the
extent of any inconsistency between a Quote or a Purchase Order and this
Agreement, this Agreement shall prevail, unless such Quote or Purchase Order is
signed by both the CFO or General Counsel of Accuray and the CFO of
Distributor, expressly refers to this Section 2.3.4, and states that the
Quote or Purchase Order is intended to supersede this Agreement.

 

2.4.       Standard Lead Time.  As of the Effective Time and to the best of
Accuray’s knowledge, Accuray’s standard lead time for delivery of Products is
six months.

 

3.          DUTIES OF DISTRIBUTOR

 

3.1.       Independent Distributor.  Distributor shall be and must at all times
make it clear that it is an independent entity contracting with Accuray, and is
not the employee, representative or agent of Accuray.  Distributor does not have the ability or
authority to enter into any legal agreements or obligations that would bind
Accuray in any manner.

 

3.2.       Market Knowledge, Promotion
and Sales.  Distributor
will develop a thorough and complete understanding of the Products and
Services. Distributor will use its knowledge and understanding to identify and
cultivate potential Customers. 
Distributor agrees to use commercially reasonable efforts to introduce,
promote the sale of, and obtain orders for the Products and Services in
connection with Multiple LINAC or Multi-Modality Purchases, including, without
limitation, including the Products and Services in each of Distributor’s 

 

4

 

Oncology Care Systems price
book and sales operation system, such that all of Distributor’s sales
representatives can access quotations for Products and Services at least as
easily as all other systems then available for purchase from Distributor. Moreover, Distributor represents and
warrants that, on the date hereof and during the Term of this Agreement and any
extension thereof, it (i) possesses the knowledge, experience, skills, and
ability required to properly fulfill its obligations under this Agreement; and (ii) has
the required facilities, manpower, capacity, financial strength, and knowledge
to market and distribute Accuray’s Products and Services in connection with
Multiple LINAC or Multi-Modality Purchases.

 

3.3.       Distributor Personnel.  During the Term of
this Agreement and any extension thereof, Distributor agrees to use
commercially reasonable efforts to employ qualified sales and technical
personnel familiar with the Products and Services, including, without
limitation, at least one person in Distributor’s Oncology Care Systems sales
group with a primary responsibility for sales of Products, to perform the marketing
and sales requirements as set forth herein.

 

3.4.       Distributor Personnel Sales
Training.  Distributor
shall use commercially reasonable efforts to cause each of its Oncology Care
Systems sales personnel with any sales duties related to the Systems to attend
any training provided by Accuray in such personnel’s Accuray Region pursuant to
Section 4.12.

 

3.5.       Offers.  Distributor shall inform Accuray of all
potential Customers for Multiple LINAC or Multi-Modality Purchases during the
Term of this Agreement or any extension thereof.  Distributor shall offer such potential
Customers only those Products or Services described in then current price
lists, and only in accordance with the applicable Customer Quote and this
Agreement.

 

3.6.       Purchase Schedule.  For each sale completed by Distributor, the
resulting contract for the sale of Products shall be between Distributor and
the Customer and the Service Agreement, if any, shall be between Accuray and
the Customer or Accuray and the Distributor, as determined pursuant to Section 4.8.  For each such sale, Distributor must send a
Purchase Order to Accuray at least six (6) months prior to the expected
shipment date.

 

3.7.       Customer Complaints.  Distributor shall report promptly and in
writing to Accuray any complaints or expressions of dissatisfaction by the
Customers to Distributor relating to the Products or Services.  Any such reports shall be provided to Accuray
via electronic mail to the following address: complaints@accuray.com.

 

3.8.       Warranty.  Distributor
will not make any warranties or representations in Accuray’s name or on Accuray’s
behalf other than the warranty provided by Accuray pursuant to Section 4.6
unless approved in advance in writing by Accuray.

 

3.9.       Service Agreements.  Distributor will make commercially reasonable
efforts to sell a Service Agreement to each Customer.  For the avoidance of doubt, (i) the
obligations of the parties with respect to the Service Agreement are as set
forth in Sections 3.6 and 4.8 and (ii) the failure of Distributor to sell
a Service Agreement to any Customer shall not be deemed to be a breach of this
Agreement.

 

3.10.     Upgrades.  Any Product upgrades released by Accuray
(other than Bug Fixes and Safety Updates, which are addressed in Section 4.6.3
and 4.6.4 respectively) can be purchased at the discretion of the Distributor
pursuant to the procedures set forth in Section 2.3.  Such 

 

5

 

upgrades will be available
at the prices listed in the then current price list as of the date of the Quote
(unless prior written approval by Accuray for application of an earlier price
list is obtained) for the upgrade, less any applicable discounts as specified
in Exhibit A hereto.

 

3.11.     Compliance with Laws.

 

3.11.1.     Compliance Generally.  Distributor has and will
have during the Term of this Agreement and any extension thereof the ability to
distribute, market and sell the Products and Services in accordance with the
terms of this Agreement, in full compliance with all governmental, regulatory
and other requirements under any applicable law. Furthermore, Distributor
agrees to comply with all applicable international, national, regional and
local laws applicable to the performance of its duties hereunder or to any
transactions involving the Products or Services contemplated hereunder.

 

3.11.2.     United States Laws.  Distributor understands that, because it is
distributing the Products and Services of Accuray, a corporation subject to the
laws of the United States of America, Distributor must, when carrying out its
duties pursuant to this Agreement, avoid violations of certain of such
laws.  These include, but are not
necessarily limited to, the following:

 

3.11.2.1.        Restrictive Trade Practices
or Boycotts, U.S. Code of Federal Regulations Title 15, Chapter VII, Part 760.

 

3.11.2.2.        Foreign Corrupt Practices
Act, U.S. Code Title 15, § 78.

 

3.11.2.3.        Export Controls, imposed by
U.S. Executive Order or implementing regulations of the U.S. Departments of
Commerce, Defense or Treasury.

 

3.11.3.     No Illegal Activity.  Neither party (nor their sub-distributors, if
any (“Sub-Distributors”)) shall engage in any illegal activities. 
A party will not be held responsible for any activities of the other party or
the other party’s Sub-Distributors that may be considered to be illegal. 
For example, neither party supports the practice of bribes or under-the-table
payments. Each party will ensure a like clause is included in each agreement it
has with its Sub-Distributors, and monitor activities of its Sub-Distributors
closely. In the event a party deems that its good-will has been or may
potentially be affected by any such illegal activity of the other party or the
other party’s Sub-Distributors, then such party reserves the right to terminate
this Agreement or any portion thereof that relates to or is materially affected
by such illegal activity with no further liability to the other party or the
other party’s Sub-Distributors. Such party assumes no liability for such
illegal activity and the other party hereby indemnifies and holds such party,
its officers and assigns, harmless from any loss, damage and liability arising
from or in connection with such illegal activity.

 

3.12.     Sales Targets.  Distributor shall not be subject to any
minimum purchase requirements, but shall agree to the annual sales targets set
forth in Schedule 2.5(d)(i)(2) of the Strategic Alliance Agreement and to
using its customary standard sales processes, including, without limitation,
the MTA process, with respect to sales of Systems.

 

6

 

3.13.     Affiliates; Distributors.  Siemens shall cause any of its Affiliates or
distributors purchasing Systems or Services pursuant to the terms of this
Agreement to agree to be bound by and comply with the terms and conditions of
this Agreement and the provisions of the Strategic Alliance Agreement related
to or applicable to such purchase, unless such Affiliate or distributor is
already party to a distribution agreement for Products with Accuray.

 

4.          DUTIES OF ACCURAY

 

4.1.       Fulfillment and Shipment.

 

4.1.1.       Fulfillment of Executed
Purchase Orders.  Accuray is
responsible for ensuring that the Products supplied are of good quality as
further described below.  Accuray will
use commercially reasonable efforts to provide to Distributor or Customer, as
applicable, in a timely manner those Products and Services required to fill
confirmed Purchase Orders received from Distributor in accordance with the
terms of this Agreement.

 

4.1.2.       Shipment.  All shipments shall be made F.C.A. Port of
Oakland, California, USA.  Transfer of
risk from Accuray to Distributor shall occur at such F.C.A. location as
provided in F.C.A. terms and transfer of title shall occur at the same time.  Distributor may request Accuray to use a
particular freight carrier, and Accuray agrees to do so, if feasible. If not
feasible in Accuray’s reasonable judgment, then Accuray shall promptly advise
Distributor of the reasons. If no such request is made, Accuray shall ship in
accordance with any instructions contained in the Purchase Order or via FedEx
ground, with no extra insurance. Accuray shall bill any actual freight costs to
Distributor.  Any supplementary shipping
costs arising from the need to meet the delivery deadline set forth in the
Purchase Order by way of expedited delivery shall be borne by Accuray, if such
delivery deadline was at least six months after the submission of such Purchase
Order by Distributor.  For example, if a
Purchase Order was submitted on June 1, with a requested delivery date of December 1,
any expedited delivery expenses required in order to ensure delivery by December 1
shall be borne by Accuray, while if the requested delivery date was October 1,
any expedited delivery expenses required in order to ensure delivery by October 1
shall be borne by Distributor.

 

4.2.       Product and Service Pricing. Accuray will provide its then current
U.S. list pricing for its Products and Services to Siemens once per year during
the Term of this Agreement and any extension thereof, or upon request from
Siemens.  All prices will be stated in US Dollars, unless another currency is
agreed upon in writing by Accuray.

 

4.3.       Product Specifications and
Promotional Literature. 
Accuray will provide product specifications and promotional literature
to Distributor from time to time during the Term of this Agreement and any
extension thereof.  Distributor may use
product specifications and promotional literature in Distributor’s dealings
with Customers. Accuray may introduce changes and upgrades to the Products.  Accuray will use commercially reasonable
efforts to give Distributor as much advance notice of upgrades as is feasible.

 

4.4.       Regulatory
Clearance.  Accuray will be responsible for and
will bear all expenses related to obtaining and maintaining any approvals,
permits and licenses required under any applicable law in order to sell, market
and distribute the Products and Services to a Customer in 

 

7

 

connection with Multiple
LINAC or Multi-Modality Purchases, including any upgrades to or expanded usage
of the Products; provided, however, that if Accuray does not have
a direct presence in or Accuray does not have a distributor for the sales of
Systems specifically for the country in which the Customer requests delivery,
as a condition to any sale of Products or Services to such Customer, Accuray
may require Distributor (solely with the consent of Distributor) to enter into
a distribution agreement with Accuray pursuant to Section 3.2 of the
Strategic Alliance Agreement providing, among other things, that Distributor
will be responsible for obtaining all such approvals, permits, and licenses for
sales to such Customer.  Distributor will
provide any assistance or documentation reasonably requested by Accuray and at
Accuray’s expenses to assist Accuray with its obligations under this Section 4.4.  Accuray will be registered as the sole owner
of any rights, title and interest to any of the Products or Spare Parts, as the
case may be; provided, however, that should any applicable law or
regulation require that Distributor alone be entitled to such ownership rights,
Distributor shall hold this approval as trustee for Accuray and hereby consents
to transfer or sublicense such approval to Accuray free of charge or to support
Accuray in its efforts to re-obtain the approval for the benefit of Accuray or
a third party named by Accuray upon expiration or termination of this
Agreement.  Lists indicating, as of the
Effective Date, (i) the countries in which Accuray has obtained regulatory
approvals for the Products and Services and (ii) the countries in which
Accuray has a direct presence or has a distributor for the sales of Systems
specifically for such country are being delivered to Siemens concurrently with
the execution of this Agreement. Accuray shall provide to Siemens updates of
such lists on a quarterly basis.

 

4.5.       Import License.  Accuray or its distributor will obtain and
maintain all required import licenses, and shall
serve as importer of record for all Products and Services delivered in or into
any country or region, other than the United States, pursuant to this
Agreement; provided, however, that if
Accuray does not have a direct presence in or Accuray does not have a
distributor specifically for the sales of Systems in the country in which the
Customer requests delivery, as a condition to any sale of Products or Services
to such Customer, Accuray may require Distributor (solely with the consent of
Distributor) to enter into a distribution agreement with Accuray pursuant to Section 3.2
of the Strategic Alliance Agreement providing, among other things, that
Distributor will obtain and maintain all required import licenses and will act
as the importer of record for the Products and Services ordered by such
Customer.

 

4.6.       Warranty.

 

4.6.1.       Scope of Warranty.  Accuray will provide a warranty to each
Customer that the Products will be free from material defects and perform
substantially in accordance with the written Specifications provided by Accuray
as reflected in the regulatory clearance at the time of sale for a period of
one (1) year following Installation of the Products at Customer’s
facility, but not to exceed eighteen (18) months following shipment of such
Products to Distributor (“Warranty Period”). “Installation” of
the System shall occur upon completion by Accuray or the entity installing the
System, as applicable, of Accuray’s acceptance test procedure demonstrating
that the System substantially conforms to the written Specifications.  If Accuray does not perform the Installation,
Distributor will notify Accuray in writing within ten (10) days following
Installation (including any testing procedures undertaken by Customer or its
installation service provider).  In no
event shall Distributor, Customer or their respective agents use the System (or
any portion thereof) for any purpose before Installation thereof without the
express written approval of Accuray. Distributor 

 

8

 

shall indemnify and hold
Accuray harmless from any such use. Accuray makes no warranty that the
operation of any software will be uninterrupted or error-free. Except as set
forth in the preceding sentences, Accuray makes no warranties or
representations to Customers or to any other party regarding any Products or
Services provided by Accuray. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ACCURAY DISCLAIMS ALL OTHER WARRANTIES AND
REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND ANY WARRANTIES ARISING OUT OF COURSE OF DEALING OR USAGE OF TRADE.

 

4.6.2.       Hardware and Software.  If a Customer notifies Accuray in writing
during the Warranty Period of a defect in a Product that causes the Product to
fail to conform to the foregoing warranty, Accuray shall at its option either
repair or replace the non-conforming Product or, if in Accuray’s opinion such
repair or replacement is not commercially reasonable, Accuray shall refund a
pro-rated portion of the price paid by the Customer for such Product calculated
based on a straight-line depreciation over a 5-year period beginning on the
date of delivery. This will be Accuray’s sole and exclusive obligation and such
Customer’s sole and exclusive remedy in relation to defective Products and
parts.

 

4.6.3.       Software and Bug Fixes.  Notwithstanding Section 4.6.2, for a
period of 10 years following Installation of a System, Accuray will provide to
Customer, without charge, Bug Fixes with respect to any software included in
the System. This is Accuray’s sole and exclusive obligation and Customer’s and
Distributor’s sole and exclusive remedy in relation to defective software.  By way of clarification, Accuray’s sole
obligation shall be to make such Bug Fixes available to Customer, and Accuray
shall have no obligation (unless otherwise agreed by the Customer and Accuray)
for installation or implementation of such Bug Fixes at the Customer’s
site.  “Bug Fix” means an error
correction or minor change in the existing software and/or hardware
configuration that is required in order to enable the existing software and/or
hardware configuration to perform to the existing functional specification(s).

 

4.6.4.       Safety Updates.  Notwithstanding Section 4.6.2 and any
obligations according to law, for a period of 10 years following Installation
of a System, Accuray will provide to Customer, without charge, Safety Updates
with respect to any hardware or software included in the System. This is
Accuray’s sole and exclusive obligation and Customer’s and Distributor’s sole
and exclusive remedy in relation to any Safety Update required to be provided
by applicable law in the Customer’s jurisdiction.  By way of clarification, Accuray’s sole
obligation shall be to make such Safety Update available to Customer, and
Accuray shall have no obligation (unless otherwise agreed by the Customer and
Accuray) for installation or implementation of such Safety Update at the
Customer’s site.  “Safety Update”
means an error correction or change in the existing software and/or hardware
configuration that is required for safety in order to enable the existing
software and/or hardware configuration to perform to the existing functional
specification(s) in accordance with applicable law in the Customer’s
jurisdiction.

 

4.6.5.       Warranty Exclusions.  All warranty replacement of Products and
parts shall be limited to malfunctions which are due and traceable to defects
in original material or workmanship of Products. The warranties set forth in this Section 4.6 shall be void 

 

9

 

and of no further effect in
the event of abuse, accident, alteration, misuse or neglect of Products,
including but not limited to user modification of the operating environment
specified by Accuray and user modification of any software.

 

4.6.6.       Warranty Basis.  Any limitation of liability under any
warranty contained herein shall be an integral part of such warranty, which
limits its scope (Section 444, second alternative German Civil Code shall
not apply). Any limitation of liability for any defects contained herein shall
be void insofar as Accuray has intentionally failed to disclose such defect.

 

4.7.       Installation.  Unless otherwise agreed by Accuray and
Distributor (including, without limitation, pursuant to the terms of any
distribution agreement entered into pursuant to Section 3.2 of the
Strategic Alliance Agreement), Accuray shall be responsible for installation of
Accuray Products at Customer sites.

 

4.8.       Service Agreements.  Accuray
will provide its then current Service Agreements to Distributor from time to
time during the Term of this Agreement and any extension thereof, or upon
request from Distributor.  All prices will be stated in US Dollars,
unless another currency is agreed upon in writing by Accuray. Such
Service Agreements are to be offered to the Customer on the terms as set forth
in those agreements, unless otherwise agreed to in writing by an authorized
representative of Accuray.  Accuray shall
execute a Service Agreement with the Customer upon receipt of (i) a copy
of such Service Agreement executed by the Customer, and (ii) any payments
then due under such Service Agreement; provided, however, that
Accuray shall have no obligation to enter into such Service Agreement if it
materially deviates from the form Service Agreement provided to Distributor; provided,
further, that if Accuray does not have a direct presence in or Accuray
does not have a distributor for the sales of Systems specifically for the
country in which the Customer requests Services, as a condition to any sale of
Services to such Customer, Accuray may require Distributor (solely with the
consent of Distributor) to enter into a distribution agreement with Accuray
pursuant to Section 3.2 of the Strategic Alliance Agreement providing,
among other things, that Distributor may (at its sole discretion) enter into
such Service Agreement with such Customer and will provide directly to such
Customer the Services required to be performed under such Service Agreement.  If Accuray enters into such Service Agreement
with such Customer, Accuray will be responsible for and will provide to such
Customer (either directly or through one or more of its distributors) the
services required to be performed under such Service Agreement.

 

4.9.       Customer
Training.  If training of Customer’s
personnel is included in a Purchase Order confirmed by Accuray, Accuray will
provide such training in accordance with Accuray’s then current training
offerings and will coordinate with the Customer in order to provide such
training at Accuray’s facility in Sunnyvale, California (or such other facility
as may be agreed upon by Customer and Accuray).  For
the purposes of such training, Accuray will be responsible for the travel and
accommodation expenses of its personnel, while Customer shall be responsible
for the travel and accommodation expenses of its personnel. All Customer
training provided by Accuray will be conducted in English and, to the extent a
Customer or its personnel do not have adequate English language reading and
comprehension skills, Accuray will provide an interpreter and translation
services sufficient to enable the Customer and its personnel to meaningfully
and effectively participate in Accuray training courses.

 

10

 

 

4.10.     Customer
Support.  Unless otherwise agreed by
Accuray and Distributor (including, without limitation, pursuant to the terms
of any distributorship agreement entered into pursuant to Section 3.2 of
the Strategic Alliance Agreement), Accuray will provide guidance to billing and
reimbursement personnel of each Customer regarding regulatory and billing
requirements and reimbursement for treatment provided with Products under
radiosurgery reimbursement codes.  Accuray
will coordinate and assist the Customer with room evaluation, architecture
support and quality assurance issues in relation to Customer installation
sites.

 

4.11.     Additional Support and
Training.  Accuray
will provide additional service, support, or training in relation to Products
or Services at Customer’s request, to be ordered separately and directly from
Accuray, and priced on a time and materials basis according to Accuray’s then
current price lists.

 

4.12.     Distributor Personnel Sales
Training.  Accuray
shall provide training of Distributor’s sales personnel responsible for sales
of Products and Services to Distributor free of charge.  Such training shall be at the times, in such
locations, and in the scope agreed upon by Distributor and Accuray in good
faith; provided, however, that such training shall be provided to
such Distributor personnel in each Accuray Region at least once per year.  Each party shall be responsible for all costs
and expenses, including travel and lodging, incurred by it or its personnel to
attend or provide such training.  Accuray
will provide additional training to Distributor’s personnel as may be
reasonably requested by Distributor on a time and materials basis according to
Accuray’s then current price lists.

 

4.13.     Support of Distributor’s
Efforts.  Accuray shall, at its own
expense:

 

4.13.1.     assign a dedicated marketing
point of contact for Distributor’s marketing and sales personnel, which
employee may be based at any of Distributor’s facilities as requested by the
Steering Committee; and

 

4.13.2.     provide global sales and
marketing support, including support for individual sales opportunities, to
Distributor; provided, however, that the scope, duration,
location, availability, and timing of such support shall be subject to
commercially reasonable limits and shall be determined pursuant to Section 3.3(a)(iii) of
the Strategic Alliance Agreement.

 

4.14.     Compliance with Laws.  Accuray will be responsible for complying
with (i) applicable U.S. laws, (ii) where Products are being shipped
to Distributor and unless otherwise agreed by Accuray and Distributor,
applicable laws, codes, registrations, regulations, and ordinances related to
the export of the  Products to Distributor, and (iii) any
other applicable laws as they pertain to the Products, the regulatory
clearance, and safety in accordance with Accuray’s written Specifications for
the intended use.  In addition, Accuray
shall be responsible for compliance with any applicable law, code,
registration, regulation, and ordinance related to the export of the Products
or Services to Customer and/or Distributor, if any (the “Export Regulations”),
and Accuray shall be liable for any expenses and/or damages incurred by
Distributor due to any non-compliance with such Export Regulations by Accuray
(unless Accuray is not responsible for such non-compliance). Accuray shall
advise Distributor in writing within two weeks of the confirmation of the
Purchase Order of any information or data required by Accuray to comply with an
Export Regulation, including without limitation:

 

(a)   All applicable export list
numbers, including the Export Control 

 

11

 

Classification
Number according to the U.S. Commerce Control List (ECCN);

 

(b)   The statistical commodity
code according to the current commodity classification for foreign trade
statistics and the HS (Harmonized System) coding;

 

(c)   The country of origin
(non-preferential origin); and

 

(d)   Accuray’s declaration of
preferential origin (in case of European suppliers) or preferential certificates
(in case of non-European suppliers).

 

4.15.     Spare Parts.  Upon a termination of this Agreement, Accuray
shall continue to make available to Customers support services on commercially
reasonable terms, including, without limitation, spare parts for the Systems
for a minimum period of 10 years after the last shipment of a System pursuant
to this Agreement.

 

5.          COMPENSATION AND PAYMENT

 

5.1.       Orders.  Distributor shall make an offer to a Customer
based on the Quote provided by Accuray pursuant to the process set forth in Section 2.3.
Submission and acceptance of an order shall be completed pursuant to Section 2.3.3.

 

5.2.       Purchase Price.

 

5.2.1.       Distributor shall pay the
prices listed in the applicable Purchase Order (unless prior written approval
by Accuray for application of an earlier price list is obtained) for the
Products, including any Spare Parts, less any applicable discounts as specified
in Exhibit A hereto.  Distributor shall receive a commission in the
amount specified in Exhibit A hereto for any Service Agreement
entered into by Accuray with Customer pursuant to Section 4.8.

 

5.2.2.       All costs of delivering the
Products to the Distributor or Customer (including, but not limited to, costs
for land, air and/or ocean freight, insurance, port, customs and forwarding
fees, if any), as well as any rigging and unloading of the Products, shall be
paid as provided in the F.C.A. terms. 
Unless advised otherwise, all prices quoted by Accuray include the cost
of packing and crating for delivery.

 

5.2.3.       Taxes.  By way of clarification, all Accuray prices
referenced in this Agreement, and all other amounts payable by Distributor to
Accuray pursuant to this Agreement are net of any value added tax or federal,
state, county or municipal sales or use tax, excise or similar charge,
withholding tax, or other tax assessment (except for any taxes that are
assessed against income) (collectively, the “Taxes”).  The parties agree that it is their intention
that Accuray will not bear any economic burden relating to the Taxes.  Subject to the foregoing and to compliance
with applicable laws, Accuray and Distributor agree to cooperate with each
other as reasonably requested to establish the responsibilities of the parties
relating to the payment and withholding of Taxes, filing of documents, and
other matters in order to achieve an efficient tax result.

 

5.3.       Compensation. Except as
otherwise provided herein, Distributor’s only compensation for its efforts on
Accuray’s behalf shall be the margins it earns on the resale of Products and 

 

12

 

commissions on sales of
Services, and Distributor shall bear all of the expenses which it incurs in
making those efforts.  Notwithstanding
the foregoing, in the event that Accuray does not approve the issuance of a
Quote to a potential Customer and later contracts directly (or through one of
its distributors) with such potential Customer, of which Accuray shall inform
Distributor without undue delay, Distributor shall receive credit for any sales
of Systems to such potential Customer pursuant to and subject to the
fulfillment of the conditions set forth in Section 3.4 of the Strategic
Alliance Agreement.

 

5.4.       Payment.

 

5.4.1.       System Purchase Payments.  Payment
for the purchase of a System shall be made by Distributor to Accuray in
US Dollars in the form of either (1) an irrevocable trade finance letter
of credit or (2) wire transfer as further described in Sections 5.4.1.1
(Letter of Credit) and 5.4.1.2 (Wire Transfer), respectively below.  Accuray shall bear the cost of any bank
charges assessed by its bank for a letter of credit and any commission charge
for a wire transfer.  Past due balances
on any reasonably undisputed amount shall bear interest at the rate of 0.5% per
month or, if lower, the maximum amount permitted by applicable law.  If Distributor is a “business person” (as
defined in § 14 of the German Civil Code, “BGB”), the payment shall be deemed
past due only if Distributor fails to pay in response to a payment demand note
received after payment becomes due.

 

5.4.1.1.          Letter of
Credit.  An irrevocable trade finance
letter of credit issued by Distributor’s bank, confirmed by a bank designated
by Accuray in all respects and delivered to Accuray upon the acceptance of the
Purchase Order by Accuray.  The letter of
credit will provide that Accuray can draw against the letter of credit
according to the following schedule:

 

5.4.1.1.1.                US $100,000 (non-refundable
but, in case of cancellation of the Purchase Order, automatically applied to
Distributor’s next purchase of a System) upon Accuray’s acceptance of the
Purchase Order, which must be at least four (4) months prior to the
Distributor’s proposed shipment date; and

 

5.4.1.1.2.                Balance upon presentation of
documents by Accuray evidencing shipment of the Products to Distributor or
Customer as designated in the Purchase Order.

 

5.4.1.2.          Wire Transfer.  A wire transfer made in advance of the date
payment is due, made in U.S. dollars, to a bank selected by Accuray, according
to the following schedule:

 

5.4.1.2.1.                US $100,000 (non-refundable
but, in case of cancellation of the Purchase Order, automatically applied to
Distributor’s next purchase of a System) upon Accuray’s acceptance of the
Purchase Order, which must be at least four (4) months prior to the
Distributor’s proposed shipment date; and

 

13

 

5.4.1.2.2.                The remaining balance is due
net 30 days after delivery by Accuray at the specified F.C.A. location pursuant
to Section 4.1.2 and receipt by Distributor of a reasonably undisputed
invoice.

 

5.4.1.3.          Tax Exempt Status.  In the event that Customer claims tax exempt
status in the country where the Accuray System is to be installed, Customer
must provide Accuray with sufficient evidence of such tax exempt status prior
to delivery of the Accuray System.

 

5.4.2.       Products, Spare Parts and
Upgrade Payments.  Full
payment of the purchase price for Products (other than Systems), Spare Parts
and upgrades shall be made by Distributor to Accuray in US Dollars  by wire transfer to a bank selected by Accuray and is due
net 30 days after delivery by Accuray at the specified F.C.A. location pursuant
to Section 4.1.2 and receipt by Distributor of a reasonably undisputed
invoice.  Accuray shall bear the cost of
any commission charge for a wire transfer.

 

5.4.3.       Payments by Customers Direct
to Accuray.  If agreed
to in writing by Accuray, Customers may make payments directly to Accuray using
the payment methods and schedules set forth in Sections 5.4.1.1 (Letter of
Credit), 5.4.1.2 (Wire Transfer) and 5.4.2 (Products, Spare Parts and Upgrade
Payments) above.  Should Customers make
such payments to Accuray and such payment include the Distributor’s margin,
then Accuray will pay such margin to Distributor once payment is received from
the Customer and cleared by Accuray’s designated bank.

 

5.5.       Collections.  Notwithstanding Section 5.4.3 above,
Distributor shall be solely responsible for determining the creditworthiness of
and collecting payment from its Customers. 
The risk of non-collection from the Customer will be borne entirely by
Distributor, which shall be responsible for making timely payment to Accuray
for Products whether or not Distributor is successful in collecting from its
Customer.  In the event that full payment
is not received by Accuray, Accuray shall not be liable to Distributor for any
margin or commission unless and until it has received payment of amounts
sufficient to cover the costs incurred by Accuray to provide the applicable
Products to Distributor and the applicable Services to Customer (“Accuray
Cost”).  Distributor acknowledges and
agrees that it shall not be entitled to receive payment of any margin or
commission until Accuray has received payment of the Accuray Cost amount in
relation to the applicable Products and Services.

 

6.          TERM AND TERMINATION

 

6.1.       Term.  Unless otherwise agreed in writing by Accuray
and Distributor and subject to the termination rights contained in this
Agreement, this Agreement shall begin on the Effective Date and shall continue
until the termination of the Strategic Alliance Agreement; provided, however,
that if a Termination Election relating to this Agreement is made pursuant to Section 10.3
of the Strategic Alliance Agreement prior to such termination, this Agreement shall
terminate 36 months after such Termination Election (the “Term”).

 

6.2.       Termination.

 

6.2.1.       Breach.  If either party commits a material breach of
a material provision of this Agreement, if such breach was not excused as a
force majeure pursuant to Section 12.12, and if the breaching party has
not cured such breach to the other party’s 

 

14

 

reasonable satisfaction
within 30 days after written notice from the other party specifying the nature
of such breach, then the other party shall have the right to terminate this
Agreement upon delivery of written notice to the breaching Party.

 

6.2.2.       Bankruptcy.  A party may terminate this Agreement
effective upon delivery of written notice to the other party if: (i) any
assignment for the benefit of the other party’s creditors is made, (ii) the
other party voluntarily files a petition in bankruptcy or similar proceeding, (iii) the
other party has such a petition in bankruptcy or similar proceeding
involuntarily filed against it, (iv) the other party is placed in an
insolvency proceeding, (v) if an order is entered appointing a receiver or
trustee of the other party, or (vi) a levy or attachment is made against a
substantial portion of the other party’s assets, and, with respect to any event
set forth in clauses (iii) through (vi) above, such position,
placement, order, levy or attachment is not dismissed or removed within 30 days
from the date of such event.

 

6.3.       Effect of Termination.  Upon expiration of the Term (or other
termination of this Agreement):

 

6.3.1.       Transition of Activities.  Accuray and Distributor agree to negotiate in
good faith an orderly transition of Distributor’s distribution responsibilities
and activities to Accuray or a third party designated by Accuray and
Distributor agrees to assist in the transition.

 

6.3.2.       Pending Obligations.  Each party must continue to fulfill any
obligations, including but not limited to pending Quotes, accrued before the
effective date of such termination.

 

6.3.3.       Return of Materials.  Distributor shall transfer to Accuray upon
Accuray’s request: any regulatory clearances, licenses or permits obtained for
conduct of the business pursuant to this Agreement; any Confidential
Information; and other items as negotiated in good faith between the
parties.  Furthermore, each of the
parties agree to cooperate fully with the other for any reasonable transition
assistance required in the case of termination or expiration of this Agreement.

 

6.4.       No Termination Compensation.  Distributor waives any rights it may have to
receive any compensation or indemnity upon termination or expiration of this
Agreement, other than as expressly provided in this Agreement.  Distributor acknowledges that it has no
expectation and has received no assurances that any investment by Distributor
in the promotion of the Products will be recovered or recouped or that
Distributor will obtain any anticipated amount of profits by virtue of this
Agreement.

 

6.5.       Accruals.  No termination or expiration of this Agreement
will terminate any obligation of payment which has accrued prior to the
effective date of such termination or expiration.

 

7.          DISPUTE RESOLUTION.  Any contractual issues or
disputes arising out of or related to this Agreement shall be resolved pursuant
to the procedures set forth in Section 11.3 of the Strategic Alliance
Agreement.

 

8.          CONFIDENTIALITY.  Accuray and Distributor
agree that all Confidential Information furnished to a party or its Affiliates,
employees, consultants, and advisors in connection with this Agreement will 

 

15

 

be subject to and the
parties’ rights and obligations with respect to such Confidential Information
shall be governed by the Confidentiality Agreement.

 

9.          INTELLECTUAL PROPERTY RIGHTS.

 

9.1.       Notice of Infringement.  Distributor undertakes to inform Accuray
without undue delay if it first becomes aware of any possible infringement by
third parties of Accuray’s proprietary rights, including, without limitation, a
duplication of the Products or any other patent, trademark or copyright or
other infringement of Accuray’s intellectual property rights in connection with
the Products, and to cooperate with Accuray at Accuray’s sole expense regarding
any legal action in relation to such infringement, which in Accuray’s judgment,
is necessary or desirable.

 

9.2.       Third Party Claims.  If Distributor promptly notifies Accuray  of a claim it has received or of which it becomes aware
that the Products or any part thereof purchased by Distributor hereunder
infringes a third party’s proprietary rights, then Accuray agrees, at its
discretion, either to (i) defend the claim at its expense, with the
cooperation of Distributor, provided, that Accuray shall reimburse Distributor
for any reasonable costs or expenses actually incurred by Distributor in
connection with providing such cooperation, or (ii) make changes in the
Product or part thereof so that they are at least functionally equivalent and
non-infringing or replace the Products with alternatives that are at least
functionally equivalent to avoid the claim, or (iii) purchase the right to
use such proprietary right or (iv) refund to the purchaser the net book value of the Product less a reasonable deduction for use,
wear and tear, and depreciation upon Accuray taking possession of such Product.
Notwithstanding Section 10.1, the foregoing states the entire liability of
Accuray with respect to infringement of patents or other proprietary rights by
the Products or part thereof, or by their operation. To remove all doubt,
Accuray has no obligation regarding any claim based on any of the following: (a) modification
of the Products by any person other than Accuray; (b) combination,
operation or use of the Products with other products, parts, components,
materials or accessories not provided by Accuray; or (c) infringement by a
product not manufactured by Accuray.

 

9.3.       Intellectual Property
Ownership and License. Accuray and its licensors retain all
intellectual property rights in the Products. 
Accuray hereby grants Distributor or Customer a nonexclusive,
non-transferable, royalty-free right to use the software provided in connection
with the Products only in machine readable form and only in combination with
the Products with which such software is provided.  No such software shall be copied or
decompiled in whole or in part by Distributor or Customer, and Distributor or
Customer shall not disclose or provide any such software, or any portion
thereof, to any third party.  Accuray
hereby grants to Customers of Products a non-exclusive, non-transferable and
royalty-free license under any Patents owned by Accuray or the licensing of
which is controlled by Accuray that, but for this license, would be infringed
by the use of such Products in accordance with the applicable
Specification.  All rights in
intellectual property not expressly granted hereunder are reserved by the owner
of such intellectual property.

 

9.4.       Product Labeling.  Products shall be labeled and identified at
point of manufacture.  Accuray shall be
responsible for compliance with all applicable local laws and regulations
relating to labeling.  Such labeling and
identification shall be only as acceptable to Accuray and may be altered or
added to by Distributor only as previously agreed upon in writing by
Accuray.  The failure of Distributor to
comply with these provisions shall be considered a material default under the
terms of this Agreement.

 

16

 

9.5.       Trademarks.  Distributor acknowledges the
validity and proprietary value of Accuray’s trademarks including, but not
limited to, “CyberKnife.” Accuray shall retain sole ownership of all goodwill
associated with the Products, as represented and symbolized by the associated
trademarks, and Distributor shall not register any of Accuray’s trademarks in
its name.  Distributor undertakes to
display Accuray’s trademarks solely in connection with identifying Accuray in
the sale and marketing of Products hereunder. Distributor shall not remove
copyright notices or any trademarks from the Products.  Distributor shall not be entitled to use said
trademarks in conjunction with Distributor’s own trademarks or for any other
purpose, except in the manner authorized by Accuray, which authorization will
not be unreasonably withheld and in compliance with distribution standards and
specifications established by Accuray. 
If Accuray determines in its sole discretion that Distributor is not
meeting such standards and specifications, Distributor shall immediately, at Accuray’s
instructions, take all steps necessary to ensure that such standards and
specifications are met or cease all further use and display of the
trademarks.  In the event of expiration
or termination of this Agreement, Distributor shall immediately discontinue all
use of Accuray’s trademarks except for the sale of Distributor’s inventory of
Products.

 

10.        INDEMNITIES.

 

10.1.     Accuray Indemnity.  Accuray will defend or settle any action
brought against Distributor and shall indemnify and hold Distributor harmless
from any liability, damages and expenses (including court costs and reasonable
attorneys’ fees) to the extent that it is based upon a third-party claim that a
Product, as provided by Accuray to Distributor under this Agreement, infringes
any patent issued in the United States, Germany, or in the country in which the
Customer requested delivery of the Product or any copyright or misappropriates
any trade secret, and will pay any costs and damages made in settlement or
awarded against Distributor in final decision resulting from any such claim,
provided that Distributor: (i) gives Accuray prompt notice of any such
claim; (ii) gives Accuray sole control of the defense and any related
settlement of any such claim; and (iii) gives Accuray, at Accuray’s expense,
all reasonable information, assistance and authority in connection with the
foregoing.  Accuray will not be bound by
any settlement or compromise that Distributor enters into without Accuray’s
express prior written consent.

 

10.2.     Products Liability Indemnity.  Accuray will defend or settle any action
brought against Distributor and shall indemnify and hold Distributor harmless
from any liability, damages and expenses (including court costs and reasonable
attorneys’ fees) to the extent that it is based upon a third-party claim that a
Product, as provided by Accuray to Distributor under this Agreement is unsafe
when used according to Accuray’s written Specifications for its intended use,
and will pay any costs and damages made in settlement or awarded against
Distributor in final decision resulting from any such claim, provided that
Distributor: (i) gives Accuray prompt notice of any such claim; (ii) gives
Accuray sole control of the defense and any related settlement of any such
claim; and (iii) gives Accuray, at Accuray’s expense, all reasonable
information, assistance and authority in connection with the foregoing.  Accuray will not be bound by any settlement
or compromise that Distributor enters into without Accuray’s express prior
written consent.

 

10.3.     Injunctions.  If Distributor’s rights to use and distribute
a Product under the terms of this Agreement are, or in Accuray’s opinion are
likely to be, enjoined due to the type of claim specified in Section 10.1
(Accuray Indemnity), then Accuray may, at its sole option and expense: (i) procure
for Distributor the right to continue to use and distribute such Product under
the terms of this Agreement; (ii) replace or modify such Product so that
it is non-

 

17

 

infringing; or (iii) if
options (i) and (ii) above cannot be accomplished despite Accuray’s
reasonable efforts, then Accuray or Distributor may terminate this Agreement
with respect to such Product and Accuray shall credit to Distributor a
pro-rated portion of the amount paid for such Product based on a straight-line
depreciation calculated over a 5-year period beginning on the date of delivery
of the Product, provided that all units of such Product are returned to Accuray
in an undamaged condition.

 

10.4.     Indemnity Exclusions.  Notwithstanding the foregoing, Accuray will
have no obligation under Sections 10.1 (Accuray Indemnity) or 10.2 (Products
Liability Indemnity) for any third-party claim to the extent that such claim
results from: (i) use of any Products not in accordance with Accuray’s
written Specifications; (ii) use or combination of the Products with other
items, such as other equipment, processes, programming applications or
materials not furnished by Accuray; (iii) compliance by Accuray with Distributor’s
or Customers’ designs, specifications or instructions; (iv) modifications
to a Product not made by or at the express written direction of Accuray; (v) Distributor’s
failure to use updated or modified Products provided by Accuray, provided
that such updated or modified Products would have avoided the basis for such
claim; or (vi) Distributor’s use or distribution of a Product other than
in accordance with this Agreement.  The
foregoing clauses (i) to (vi) are referred to collectively as “Indemnity
Exclusions”.

 

10.5.     Limitation.  WITHOUT AFFECTING STRICT PRODUCT LIABILITY
UNDER MANDATORY APPLICABLE LAW, THE FOREGOING PROVISIONS OF THIS SECTION SET
FORTH ACCURAY’S SOLE AND EXCLUSIVE LIABILITY AND DISTRIBUTOR’S SOLE AND
EXCLUSIVE REMEDY FOR ANY CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF
INTELLECTUAL PROPERTY RIGHTS OR PROPRIETARY RIGHTS OF ANY KIND.

 

10.6.     Distributor Indemnity.  Distributor will defend or settle, indemnify
and hold Accuray harmless from any liability, damages and expenses (including
court costs and reasonable attorneys’ fees) to the extent based upon a
third-party claim based on or otherwise attributable to: (i) Distributor’s
acts or omissions not in accordance with this Agreement or (ii) any
misrepresentations made by Distributor with respect to Accuray or the Products
or Services.

 

11.        LIABILITY.

 

11.1.     Liability for Death or
Injury.  The liability of any party
with respect to death or injury to any person is subject to and governed by the
provisions of applicable law.

 

11.2.     Limitation on Liability.  WITHOUT AFFECTING STRICT PRODUCT LIABILITY
UNDER MANDATORY APPLICABLE LAW, SECTION 10, OR THE RESPECTIVE OBLIGATIONS
OF THE PARTIES UNDER THE CONFIDENTIAILITY AGREEMENT AND EXCEPT FOR BREACHES
ASSOCIATED WITH THE UNAUTHORIZED USE OF INTELLECTUAL PROPERTY, IN NO EVENT
SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR TORT DAMAGES, INCLUDING WITHOUT LIMITATION, ANY
DAMAGES RESULTING FROM LOSS OF USE, LOSS OF DATA, LOSS OF PROFITS OR LOSS OF
BUSINESS ARISING OUT OF OR IN CONNECTION WITH THE MATTERS CONTEMPLATED BY THIS
AGREEMENT, WHETHER OR NOT A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.

 

18

 

11.3.     Liability Cap.  Without affecting Section 10 or the
respective obligations of the parties under the Confidentiality Agreement and
except for any liability (i) relating to any breach associated with the
unauthorized use of Intellectual Property, (ii) arising from the
intentional breach or willful misconduct of a party, or (iii) arising from
the non-compliance with any mandatory applicable law or regulation, the total
aggregate liability of one party to another party for any claim relating to any
breach of this Agreement (or any Purchase Order or other agreement entered into
in connection with this Agreement) (a “Claim”) shall be limited to the
aggregate amount of the purchase prices paid by Distributor to Accuray for
Products pursuant to this Agreement (or any Purchase Order or other Agreement
entered into in connection with this Agreement) during the twelve calendar
months preceding the date of the notification to the other party of such Claim
less any amounts paid or payable in respect of any other Claim of which the
other party was notified during such twelve month period.

 

11.4.     Notice; No Waiver.  Each party shall not unreasonably delay
notification to the other party of any Claim. 
Nothing in this Section 11 shall be deemed a waiver by any party of
any right to injunctive relief to the extent it is available to such party.

 

12.        MISCELLANEOUS PROVISIONS

 

12.1.     Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the Federal Republic of Germany
excluding the United Nations Convention on Contracts of International Sale of
Goods (CISG) and the provisions of German private international law.

 

12.2.     Modification.  Notwithstanding any provision to the contrary
in this Agreement, Distributor and Accuray may agree, by execution of a written
agreement, to modify any term or provision of this Agreement, including,
without limitation, the duties of the parties, the Quote and Purchase Order
approval procedure, the pricing of the Products and Services, and the payment
terms, with respect to any single or number of Customer opportunities, Quotes,
or Purchase Orders.

 

12.3.     Publicity.  Both parties may not use the other party’s
name or trademarks on its literature, signs, or letterhead, nor may it make
press releases or other public statements disclosing its relationship  under this Agreement or otherwise without the
prior written consent of the other party, which shall not be unreasonably
withheld or delayed.

 

12.4.     Goodwill.  Distributor agrees that it will help develop
and work to preserve the goodwill of Accuray, and will not unreasonably harm
that goodwill.  In the event of
termination of this Agreement for any reason, Distributor will not do anything
to unreasonably harm the goodwill of Accuray.

 

12.5.     Titles.  Titles of the various
paragraphs and sections of this Agreement are for ease of reference only and
are not intended to change or limit the language contained in those paragraphs
and sections.

 

12.6.     Assignment.  Neither this Agreement, nor any
of the rights, interests, or obligations under this Agreement may be assigned
or delegated, in whole or in part, by operation of law or otherwise, by any
party without the prior written consent of the other party, and any such
assignment without such prior written consent shall be null and void; provided,
however, that this Agreement may be assigned by a Party in connection
with a Change in Control of such party, subject to the specific termination and
other rights set forth in the Strategic 

 

19

 

Alliance
Agreement upon such Change in Control; provided, further, that
Siemens may assign its rights and obligations under this Agreement to any
Distributor that agrees, in writing, to be bound by and comply with
the terms and conditions of this Agreement and the provisions of the Strategic
Alliance Agreement, provided, that no such assignment shall relieve
Siemens of its obligations hereunder or thereunder if such Distributor does not
perform such obligations.  Subject to the foregoing, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties
and their respective successors and permitted assigns.

 

12.7.     Conduct.

 

12.7.1.    Both parties prohibit the
harassment of their employees and contractors in any form.  They consider harassment of, or
discrimination against, their employees and affiliated persons a very serious
matter and will investigate all complaints of inappropriate conduct.  Where the investigation uncover harassment or
discrimination, the other party may take reasonable corrective action,
including, without limitation, termination of this Agreement for material
breach.

 

12.7.2.    During the Term, Accuray
shall comply, in all material respects, with Siemens’ Code of Conduct, attached
hereto as Exhibit B (the “Code of Conduct”).  Siemens shall give Accuray
written notice of any change to its Code of Conduct as soon as reasonably
practicable.

 

12.7.3.    During the Term, Distributor
shall comply, in all material respects, with the Business Conduct Guidelines of
Siemens and all other Siemens internal regulations and guidelines.

 

12.8.     Quality Assurance Agreement.  During the Term and in connection with its
performance of its duties under this Agreement, Accuray shall comply, in all
material respects, with Siemens’ Quality Assurance Agreement attached hereto as
Exhibit C, with the exception of any provisions thereof related to
barcoding.

 

12.9.     Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on the
date of delivery if delivered personally, (b) if by facsimile, upon
written or electronic confirmation of receipt (if sent during business hours of
the recipient, otherwise on the next business day following such confirmation),
(c) on the first business day following the date of dispatch if delivered
utilizing a next-day service by a recognized next-day courier, (d) on the
earlier of confirmed receipt or the fifth business day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid.  All notice hereunder
shall be delivered to the addresses set forth below:

 

20

 

 

	
  To Accuray:

  	
   

  	
  To Distributor:

  
	
   

  	
   

  	
   

  
	
  Accuray
  Incorporated

  	
   

  	
  Siemens
  AG

  
	
  Attention: 
  Chief Financial Officer

  	
   

  	
  Henkestr.
  127

  
	
  1310
  Chesapeake Terrace

  	
   

  	
  91054
  Erlangen

  
	
  Sunnyvale,
  CA 94089

  	
   

  	
  Germany

  
	
  Facsimile:
  +1 (408) 789-4205

  	
   

  	
  Attn:
  Healthcare General Counsel, Ritva Sotamaa

  
	
  with
  cc to: General Counsel

  	
   

  	
  Facsimile:
  + 49/### - ## - ####

  

 

12.10.   Waiver.  The waiver of any breach or default of any
provision of this Agreement will not constitute a waiver of any other right
hereunder or of any subsequent breach or default.

 

12.11.   Severability.  If any provision of this Agreement is held
invalid or unenforceable by a court of competent jurisdiction, the remaining
provisions of the Agreement will remain in full force and effect, and the
provision affected will be construed so as to be enforceable to the maximum
extent permissible by law.

 

12.12.   Survival.  The expiration or termination of this
Agreement for any reason will not release either party from any liabilities or
obligations set forth herein which (i) the parties have expressly agreed
will survive any such expiration or termination; or (ii) remain to be
performed or by their nature would be intended to be applicable following any
such termination or expiration.  In
addition to the foregoing, the following provisions shall survive any
termination or expiration of this Agreement: Section 3.8 (Warranty); Section 3.11
(Compliance with Laws); Section 4.6 (Warranty); Section 6.2 (Effect
of Termination); Section 6.3 (No Termination Compensation); Section 6.4
(Accruals); Section 7 (Dispute Resolution); Section 8
(Confidentiality); Section 9 (Intellectual Property Rights); Section 10
(Indemnities), Section 11 (Liability) and Section 12 (Miscellaneous
Provisions).

 

12.13.   Force
Majeure.  Neither party will be
responsible for any failure or delay in its performance under this Agreement
(except for the payment of money) due to causes beyond its reasonable control,
including, but not limited to, labor disputes, strikes, lockouts, shortages of
or inability to obtain labor, energy, raw materials or supplies, war, acts of
terror, riot, acts of God or governmental action.

 

12.14.   Amendments.  Any amendment or modification of this
Agreement must be made in writing and signed by duly authorized representatives
of each party.  For Accuray, a duly authorized representative must be any
of the following: CEO, CFO, General Counsel or Associate General Counsel.

 

12.15.   English
Language Requirement.  This Agreement is written in the English
language as spoken and interpreted in the United States of America, and such
language and interpretation shall be controlling in all respects.

 

12.16.   Foreign Currency.  Distributor acknowledges and agrees that it
shall assume all risk associated with any fluctuation of foreign currency
exchange rates associated with its pricing of Products and Services to
Customers in a currency other than US Dollars. 
All payments made by Distributor to Accuray shall be in US Dollars.

 

12.17.   Entire
Agreement.  This
Agreement and the Strategic Alliance Agreement contain the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes
all prior understandings, representations and warranties, written and
oral.  If any part of the terms and conditions stated herein are held void
or unenforceable, such part will be treated

 

21

 

as
severable, leaving valid the remainder of the terms and conditions.  In case of any contradiction between this
Agreement and the Strategic Alliance Agreement, the terms of this Agreement
shall prevail.

 

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

 

SIGNATURE PAGE FOLLOWS

 

22

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the Effective Date by their duly authorized representatives.  The parties acknowledge and agree that this
Agreement does not become effective until it has been signed by all parties
indicated below.

 

 

	
  DISTRIBUTOR:

  	
   

  	
  ACCURAY
  INCORPORATED:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Christian Klaussner

  	
   

  	
  By:

  	
  /s/
  Euan Thompson

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print
  name:

  	
  Christian Klaussner

  	
   

  	
  Print
  name:

  	
  Euan Thomson

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  HIM
  OCS CFO

  	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  June 8,
  2010

  	
   

  	
  Date:

  	
  June 7,
  2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Holger Schmidt

  	
   

  	
  By:

  	
  /s/ Darren Milliken

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print
  name:

  	
  Holger Schmidt

  	
   

  	
  Print
  name:

  	
  Darren Milliken

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  HIM
  OCS CEO

  	
   

  	
  Title:

  	
  Senior Vice President and General Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  June 8,
  2010

  	
   

  	
  Date:

  	
  June 7,
  2010

  

 

 

SIGNATURE PAGE TO MULTIPLE LINAC AND MULTI-MODALITY DISTRIBUTOR
AGREEMENT

 

 

SCHEDULE 2.3.2

 

ACCEPTANCE PROCESS

 

·                  Accuray shall have 5 Business Days from date
of the submission of a proposed Multiple LINAC Purchase or Multi-Modality
Purchases by Siemens in which to either give or withhold approval of such
purchase, with any failure to approve or disapprove of such purchase in such
period constituting disapproval;

 

·                  Such approval may be given by either Accuray’s
applicable General Regional Manager or a corporate representative of Accuray,
expressly designated with such approval authority in writing by Accuray to
Siemens;

 

·                  Siemens’ shall provide any information
concerning such proposed purchase and the proposed purchaser as is reasonably
requested by Accuray;

 

·                  Such approval of any such proposed purchase
must not be unreasonably withheld or delayed;

 

·                  In determining whether to grant such
approval, Accuray may consider, at a minimum:

 

·        Existing exclusivity
arrangements between Accuray and Third Parties;

 

·        Prior and current contact
with the proposed purchaser by either Party;

 

·        Other commercial
relationships that either Party may have with the proposed purchaser;

 

·        Bona fide concerns about the
suitability of the proposed purchaser; and

 

·        Whether Accuray or any of
its distributors have obtained any required regulatory clearances and/or import
licenses required in connection with the proposed purchase.

 

 

EXHIBIT A

 

DISTRIBUTOR DISCOUNTS ON PRODUCTS AND SERVICES

 

	
  Discount
  Type

  	
   

  	
  List Price 

  Range

  USD

  	
   

  	
  Volume 

  Discount

  	
   

  	
  Distributor 

  Discount*

  
	
  Volume
  Discounts - Tier # 1

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 2

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 3

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 4

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 5

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 6

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 7

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 8

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 9

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 10

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 11

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  
	
  Volume
  Discounts - Tier # 12

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  	
   

  	
  {*****}

  

 

* Siemens distributor channel discount.

 

Siemens
Bundled Sales Price= (List Price (1- (Volume Discount + Distributor Discount))

 

 

 

EXHIBIT B

 

SIEMENS CODE OF CONDUCT

 

SIEMENS

 

Code of Conduct for Siemens Suppliers

 

This
Code of Conduct defines the basic requirements placed on Siemens’ suppliers of
goods and services concerning their responsibilities towards their stakeholders
and the environment. Siemens reserves the right to reasonably change the
requirements of this Code of Conduct due to changes of the Siemens Compliance
Program. In such event Siemens expects the supplier to accept such reasonable
changes.

 

The supplier declares herewith:

 

·                       Legal compliance

 

·                 to comply with the laws
of the applicable legal system(s).

 

·                      Prohibition of corruption and bribery

 

·                  to tolerate no form of and
not to engage in any form of corruption or bribery, including any payment or
other form of benefit conferred on any government official for the purpose of
influencing decision making in violation of law.

 

·                      Respect for the basic human rights of employees

 

·                  to promote equal opportunities for and
treatment of its employees irrespective of skin color, race, nationality,
social background, disabilities, sexual orientation, political or religious
conviction, sex or age;

·                  to respect the personal dignity, privacy and
rights of each individual;

·                  to refuse to employ or make anyone work
against his will;

·                  to refuse to tolerate any unacceptable
treatment of employees, such as mental cruelty, sexual harassment or
discrimination;

·                  to prohibit behavior including gestures,
language and physical contact, that is sexual, coercive, threatening, abusive
or exploitative;

·                  to provide fair
remuneration and to guarantee the applicable national statutory minimum wage;

·      to comply
with the maximum number of working hours laid down in the applicable laws;

·                  to recognize,
as far as legally possible, the right of free association of employees and to
neither favor nor discriminate against members of employee organizations or
trade unions. 

 

·                       Prohibition of child labor

 

·                  to employ no
workers under the age of 15 or, in those countries subject to the developing
country exception of the ILO Convention 138, to employ no workers under the age
of 14. 

 

·                       Health and safety of employees

 

·                  to take
responsibility for the health and safety of its employees;

·                  to control
hazards and take the best reasonably possible precautionary measures against
accidents and occupational diseases;

·                  to provide
training and ensure that employees are educated in health and safety issues;

·                  to set up or use a reasonable
occupational health & safety management system(1)

 

·                       Environmental protection

 

·                  to act in
accordance with the applicable statutory and international standards regarding
environmental protection;

·                  to minimize
environmental pollution and make continuous improvements in environmental
protection;

·                  to set up or
use a reasonable environmental management system(1)

 

·                      Supply chain

 

·                 to use reasonable efforts to
promote among its suppliers compliance with this Code of Conduct;

·                  to comply with
the principles of non discrimination with regard to supplier selection and
treatment.

 

(1) For
further information see www.siemens.com/procurement/cr/code-of-conduct

 

 

 

EXHIBIT C

 

SIEMENS QUALITY ASSURANCE AGREEMENT

 

Please
see attached.

 

 

 

SIEMENS

 

For internal use only

Copyright © Siemens AG 2002. All rights reserved.

 

Quality
Requirement Med

 

Identification
of Products and basic

requirements
for packaging

Requirements
for Suppliers

 

QR Med 1 A1

 

Siemens
Medical Solutions

and affiliated Companies

 

Issued by Med Quality
Management & Regulatory Affairs

 

Released 2007-09-28 by the
Med Quality Steering Board (QSB)

Valid from 2007-11-01

 

04798372 AND 02S 04

 

1

 

	
  Contents

  	
   

  
	
   

  	
   

  
	
  1

  	
  Purpose
  and scope

  	
  3

  
	
   

  	
   

  	
   

  
	
  2

  	
  Definitions
  and abbreviations

  	
  3

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Material No.

  	
  3

  
	
   

  	
  2.2

  	
  Revision

  	
  3

  
	
   

  	
  2.3

  	
  Serial No.

  	
  3

  
	
   

  	
  2.4

  	
  Data Identifier

  	
  3

  
	
   

  	
  2.5

  	
  Expiration date

  	
  4

  
	
   

  	
  2.6

  	
  Batch

  	
  4

  
	
   

  	
  2.7

  	
  Shelf life 

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  Reference
  documents

  	
  4

  
	
   

  	
   

  	
   

  
	
  4

  	
  Requirements

  	
  4

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Identification of parts, components and systems

  	
  4

  
	
   

  	
  4.2

  	
  Labeling of parts, components, systems and its packaging

  	
  4

  
	
   

  	
  4.3

  	
  Spacing 

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  Basic
  requirements for packaging

  	
  7

  
	
   

  	
   

  	
   

  
	
  6

  	
  Literature

  	
  7

  
	
   

  	
   

  	
   

  
	
  7

  	
  Transition
  and retrospective measures

  	
  7

  
	
   

  	
   

  	
   

  
	
  8

  	
  Changes
  to prior version

  	
  7

  
	
   

  	
   

  	
   

  
	
  9

  	
  Attachments

  	
  7

  

 

	
  Author:

  	
   

  	
   

  
	
  Gabriele Franz

  	
   

  	
  AX QP

  
	
   

  	
   

  	
   

  
	
  Reviewer:

  	
   

  	
   

  
	
  Volker Glahn

  	
   

  	
  QM&RA

  
	
  Philippe Hoxter

  	
   

  	
  CSQ

  

 

2

 

1      Purpose and scope

 

For Siemens Medical Solutions it is a basic requirement that any part,
component or system is identified the same way worldwide. This document lists
the minimum requirements for suppliers of Siemens Medical Solutions
describing

·      how parts, components and systems are identified with
their attributes and

·      how attributes are labeled both as plain text as
well as barcode on products and its packaging. Detailed
specifications with regards to the labeling of products are defined for the
individual product concerned.

 

2      Definitions and abbreviations 

 

2.1    Material No.

 

The Siemens Medical Solutions Material No. is used to uniquely identify
products (parts, components and systems). It consists of an 8-digit
identification no. assigned by Siemens Medical Solutions.

 

Previously, the term “Part no.” was also used; it is replaced by the
term “Material No.”. 

 

2.2    Revision

 

The Revision (abbreviated “Rev.”)
serves to distinguish between different update statuses of hardware. It is
assigned by Siemens Medical Solutions.

 

The English term “Revision” replaces the German term “Erzeugnisstand”
(abbreviated “ES”) and “Ausführungsstand” (abbreviated “AS”).

 

2.3    Serial No.

 

The Serial No. is an identifying attribute used to uniquely identify
hardware or software with the same Material No. .

 

For suppliers the Serial No. can consist of up to 15 alphanumeric
digits; it is however recommended to use only a 6 digit numerical Serial No.
where possible.

 

The Serial No. may contain a dash (-) or a slash (/), but no other
special characters (e.g. # + * ?). Spaces, lower-case letters or
language-specific characters (e.g. Ä, Ö, Ü) are not allowed
within the Serial No. .

 

The characters “L”, “SxxL” or “Sxx” at the
end or the beginning of the Serial No. should be avoided (xx = any alphanumerical character).

 

For any Serial No. that is numeric only (i.e. has no letters) it is
allowed to omit printing of leading zeros („0”).

 

It is recommended to use the Serial No. of the supplier if it complies
with the principles described above.

 

2.4    Data Identifier

 

Data Identifiers are used in the
barcode to indicate that the information following the Data
Identifier is data of a certain attribute. The Data Identifier enables the barcode reading program to
recognize that the following information represents a certain type of
attribute.

 

Data Identifiers to be used:

 

	
  1P

  	
   

  	
  Material No.

  	
   

  	
  2P

  	
   

  	
  Revision (for packaging only)

  
	
  S

  	
   

  	
  Serial No.

  	
   

  	
  Q

  	
   

  	
  Quantity (for packaging only)

  
	
  14D

  	
   

  	
  Expiration date (for packaging only)

  	
   

  	
  T

  	
   

  	
  Batch (for packaging only)

  

 

3

 

2.5    Expiration date

 

The format of the expiration date shall be definite
and specified as follows: YYYYMMDD

 

2.6    Batch

 

The batch is an alphanumeric ident number with 10
digits, used to identify parts manufactured or shipped together. Is no batch
provided on the packing but required, a batch is initiated in the stock.

 

2.7    Shelf life

 

If a shelf life is defined for parts the shelf life
has to be filed in calendar days. (365 days per year)

 

3      Reference documents

 

n.a.

 

4      Requirements

 

4.1    Identification of parts, components and systems

 

Non-serialized parts (including spare
parts) and components are identified using a Material No. . If necessary,
different statuses of a part, component or system can be distinguished via the
Revision.

 

Serialized parts, components and
systems are identified using the combination of Material No. and Serial No. .
In addition, the Revision may be used to distinguish between different statuses
of hardware.

 

4.2    Labeling of parts, components, systems and its packaging

 

In general, requirements with respect to labeling have to be defined
for the product concerned. However, minimum requirements are specified in order
to allow proper identification throughout all processes involved. This chapter
lists those minimum requirements.

 

For all material numbers specified by Siemens the
parts and its packaging have to be labeled according to the requirements listed
below. The label depends on whether a part/component/system

 

·      is serialized

·      contains a revision level

·      is classified as an IVK (“Installed Volume
Component”)

·      shall be handled by expiration date or
batch

 

Siemens defines those requirements per individual Material No. .

 

4

 

	
  Color

  	
   

  	
  Usually white label with black printing other colors are allowed as
  long as barcode/plain text can be read

  
	
   

  	
   

  	
   

  
	
  Barcode content

  	
   

  	
  1P <Material No. >

  
	
   

  	
   

  	
  S <Serial No.>

  
	
   

  	
   

  	
   

  
	
  Additionally for packaging only

  	
   

  	
  2P <product Revision>

  
	
   

  	
   

  	
  Q <quantity of products in this packaging (numeric only), usually
  1>

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  It is not allowed to label Revision and Quantity on product
  identification labels!

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  e.g.:

  	
  1P01234567 as barcode *)

  	
  (1P) Model No. 01234567

  
	
   

  	
   

  	
   

  	
  S1001 as barcode *)

  	
  (S) Serial No. 1001

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Each symbol structure with start and stop character including Data
  Identifier (e.g. “1P” or “S”), but without symbol check character.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  No space allowed between Data Identifier and attribute.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  It is  not allowed to print any
  other information in the barcode fields described above.

  
	
   

  	
   

  	
   

  
	
  Barcode type

  	
   

  	
  Code 39 according to ISO/IEC 16388

  
	
   

  	
   

  	
   

  
	
  Narrow element (bar or space)

  	
   

  	
  Min. 0,17 mm

  
	
   

  	
   

  	
   

  
	
  Ratio of wide element to narrow element

  	
   

  	
  Min. 2,25 : 1

  
	
   

  	
   

  	
   

  
	
  Barcode height

  	
   

  	
  Min. 2 mm, typical 4mm

  
	
   

  	
   

  	
   

  
	
  Plain text (below barcode)

  	
   

  	
  (1P)

  	
  Model No.:

  	
  <Material No.>

  
	
   

  	
   

  	
  (S)

  	
  Serial No.:

  	
  <Serial No.>

  
	
   

  	
   

  	
   

  
	
  Additionally for packaging only

  	
   

  	
  (2P)

  	
  Revision:

  	
  <product Revision>

  
	
   

  	
   

  	
  (Q)

  	
  Quantity:

  	
  <quantity of products in this packaging (numeric only), usually
  1>

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  It is not allowed to label Revision and Quantity on product
  identification labels!

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Data Identifier (e.g. “1P” or “S”) in brackets in front of data element
  title (e.g. ‘‘Model No.” or “Serial No.”) in plain text!

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  e.g.: (1P) Model No.: 01234567 *)

  	
  (1p) Model No. 01234567

  
	
   

  	
   

  	
          (S) Serial No.: 1001
  *)

  	
  (S) Serial No. 1001

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Note: Due to 21CFR1020.30 section e) the term “Model
  No.” shall be used instead of the term “Material No.” in plain text on  all labels.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  It is not allowed
  to print any other information near the data fields described above. If any
  other information is printed, it must be printed in a manner so that it can’t
  be misinterpreted as being part of the fields described above; this can be
  done by printing other information at the very right side of the label.

  
	
   

  	
   

  	
   

  
	
  Additionally for products only

  	
   

  	
  For IVKs or System IVKs, the text “IVK” or “SYSTEM IVK” shall be
  printed on the very right side of the label. It has to be ensured that this
  text can’t be misinterpreted as being part of the Serial No. ; this can be
  done by printing this text on a different level. [Siemens Medical Solutions
  decides and specifies whether a product is an IVK or System IVK.]

  
							

 

5

 

	
  Additionally for packing only

  	
   

  	
  The Expiration date of parts with Shelf life is fixed below the
  quantity as following:

  
	
   

  	
   

  	
  Expiration date: <date of expiration> YYYYMMDD

  
	
   

  	
   

  	
  For parts which require a Batch, the batch is fixed below the
  Expiration date as following: AAAAAAAAAA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For a transition period  the batch can also be fixed above the material
  number

  
	
   

  	
   

  	
   

  
	
  Font

  	
   

  	
  Universe, if not possible use similar font (e.g. Helvetica)

  

 

*) In case of limited space, it is possible to print
the bar code next to (and not under) the clear text.

 

4.3    Spacing 

 

Minimum distances are:

 

	
  (A)

  	
   

  	
  Horizontal distance from edge (quiet zone)

  	
   

  	
  >5 mm

  
	
  (B)

  	
   

  	
  Vertical distance from edge

  	
   

  	
  >2 mm

  
	
  (C)

  	
   

  	
  Vertical distance between printing areas

  	
   

  	
  >1 mm

  

 

 

	
  Legend:

  	
  

  	
  a) printing area for barcode

  
	
   

  	
   

  	
   

  
	
   

  	
  

  	
  b) printing area for plain text

  

 

5)  Expiration date and 6) Batch
can be printed in barcode additionally.

For a transition period the batch can also
be fixed above the material number

 

6

 

5      Basic requirements for packaging

 

Especially for spare parts appropriate packaging are required for the
global shipping process. Should those packaging contain wood, generally “non
wood-packaging” according IPPC (International Plant Protection Convention)
shall be used, but fumigation of such packaging is not allowed.

 

Packaging shall be designed in a suitable way to protect the packed
good against transportation load according to IEC 60721-3-2 class’s 2M2/2K4

 

International pictograms following the IEC 60601 series shall be used
for parts which fall under specific restrictions for transport or storage.

 

The specification of packaging especially for spare parts is within the
responsibility of the Business Unit responsible for the product.

 

6      Literature

 

ISO/IEC 16388 “Information technology — Automatic
identification and data capture techniques — Bar code symbology specifications
— Code 39”.

 

IEC 60721-3-2 Classification of environmental
conditions — Part 3: Classification of groups of environmental parameters and
their severities — Section 2: Transportation

 

7      Transition and retrospective measures

 

n.a.

 

8      Changes to prior version

 

CR-No.: 2007-005

Changes to previous edition 04798372 AND 02S 03:

 

·      Chapter 2: Reference document IEC
60721-3-2 added 

·      Chapter 5: Design of packaging changed

 

CR-No. 2006-008 (CR N06/0207)

Changes to previous edition 04798372 AND 02S 02:

 

·      Title: Added: and basic requirements for
packaging

·      Chapter 3.4 Data Identifier for Expiration
Date and Batch added

·      Chapter 3.5 — 3.7:
Completely new

·      Chapter 4.2 Added: Expiration date and
batch

·      Chapter 4.3. Added: labeling of Expiration
Date and Batch,

·      Chapter 5: Completely new

 

CR-No. 2006-01, 2006-02

Changes to previous edition 4798372 AND 02S 01:

 

·      Chapter 2, 4.2 : EN 800 replaced by
ISO/IEC 16388

·      Chapter 4.2 : general requirements at the
beginning stated more clearly, footnote added

 

9      Attachments

 

n.a.

 

7Exhibit 10.32

 

ACCURAY
INCORPORATED

 

PERFORMANCE
BONUS PLAN

 

1.             Purposes of the Plan.  The Plan is intended to increase stockholder
value and the success of the Company by motivating key executives to: (1) perform
to the best of their abilities, and (2) achieve the Company’s
objectives.  The Plan’s goals are to be
achieved by providing such executives with incentive awards based on the
achievement of goals relating to the performance of the Company or upon the
achievement of objectively determinable individual performance goals.  The Plan is intended to permit the payment of
bonuses that may qualify as performance-based compensation under Code section
162(m).

 

2.             Definitions.

 

(a)           “Award” means, with respect to each
Participant, the award determined pursuant to Section 8(a) below for
a Performance Period.  Each Award is
determined by a Payout Formula for a Performance Period, subject to the
Committee’s authority under Section 8(a) to eliminate or reduce the
Award otherwise payable.

 

(b)           “Base Salary” means as to any Performance
Period, the Participant’s annualized salary rate on the last day of the
Performance Period.  Such Base Salary
shall be before both (a) deductions for taxes or benefits, and
(b) deferrals of compensation pursuant to Company-sponsored plans.

 

(c)           “Board” means the Board of Directors of the
Company.

 

(d)           “Code” means the Internal Revenue Code of
1986, as amended.

 

(e)           “Committee” means the Compensation Committee
of the Board.

 

(f)            “Company” means Accuray Incorporated or any
of its subsidiaries (as such term is defined in Code Section 424(f)).

 

(g)           “Determination Date” means the latest
possible date that will not jeopardize a Target Award or Award’s qualification
as Performance-Based Compensation.

 

(h)           “Fiscal Quarter” means a fiscal quarter of
the Company.

 

(i)            “Fiscal Year” means a fiscal year of the
Company.

 

(j)            “Maximum Award” means
as to any Participant for any Performance Period, three million dollars.

 

(k)           “Participant” means
an executive officer of the Company participating in the Plan for a Performance
Period.

 

(l)            “Payout Formula”
means as to any Performance Period, the formula or payout matrix established by
the Committee pursuant to Section 7 in order to determine the Awards (if
any) to be paid to Participants.  The
formula or matrix may differ from Participant to Participant.

 

1

 

(m)          “Performance-Based
Compensation” means compensation that is intended to qualify as “performance-based
compensation” within the meaning of Section 162(m).

 

(n)           “Performance Goals”
means the goal(s) (or combined goal(s)) determined by the Committee (in
its discretion) to be applicable to a Participant with respect to an
Award.  As determined by the Committee,
the performance measures for any performance period will be any one or more of
the following objective performance criteria, applied to either the Company as
a whole or, except with respect to stockholder return metrics, to a region,
business unit, affiliate or business segment, and measured either on an
absolute basis or relative to a pre-established target, to a previous period’s
results or to a designated comparison group, and, with respect to financial
metrics, which may be determined in accordance with United States Generally
Accepted Accounting Principles (“GAAP”), in accordance with accounting
principles established by the International Accounting Standards Board (“IASB
Principles”) or which may be adjusted when established to exclude any items
otherwise includable under GAAP or under IASB Principles: (i) cash flow
(including operating cash flow or free cash flow), (ii) revenue (on an
absolute basis or adjusted for currency effects), (iii) gross margin,
(iv) operating expenses or operating expenses as a percentage of revenue,
(v) earnings (which may include earnings before interest and taxes,
earnings before taxes and net earnings), (vi) earnings per share,
(vii) stock price, (viii) return on equity, (ix) total
stockholder return, (x) growth in stockholder value relative to the moving
average of the S&P 500 Index or another index, (xi) return on capital,
(xii) return on assets or net assets, (xiii) return on investment,
(xiv) economic value added, (xv) operating profit or net operating
profit, (xvi) operating income, (xvii) operating margin,
(xviii) market share, (xix) contract awards or backlog,
(xx) overhead or other expense reduction, (xxi) credit rating, (xxii) objective
customer indicators, (xxiii) new product invention or innovation,
(xxiv) attainment of research and development milestones, (xxv) improvements
in productivity, (xxvi) attainment of objective operating goals, (xxvii) contingent
or non-contingent orders; and (xxviii) growth rates in any of the
performance criteria listed in sections (i) through (xxvii) herein.

 

(o)           “Performance Period”
means any Fiscal Quarter or Fiscal Year, or such other longer period, as
determined by the Committee in its sole discretion.

 

(p)           “Plan” means this
Performance Bonus Plan.

 

(q)           “Plan Year” means the
Company’s fiscal year.

 

(r)            “Section 162(m)”
means Section 162(m) of the Code, or any successor to Section 162(m),
as that Section may be interpreted from time to time by the Internal
Revenue Service, whether by regulation, notice or otherwise.

 

(s)           “Target Award” means
the target award payable under the Plan to a Participant for the Performance
Period, expressed as a percentage of his or her Base Salary or a specific
dollar amount, as determined by the Committee in accordance with
Section 6.

 

3.             Plan Administration.

 

(a)           The Committee shall be
responsible for the general administration and interpretation of the Plan and
for carrying out its provisions.  Subject
to the requirements for qualifying compensation as Performance-Based
Compensation, the Committee may delegate specific administrative tasks to
Company employees or others as appropriate for proper administration of the
Plan.  Subject to the limitations on
Committee discretion imposed under Section 162(m) of the Code, the
Committee shall 

 

2

 

have such powers as may be
necessary to discharge its duties hereunder, including, but not by way of
limitation, the following powers and duties, but subject to the terms of the
Plan:

 

(i)           discretionary authority to
construe and interpret the terms of the Plan, and to determine eligibility,
Awards and the amount, manner and time of payment of any Awards hereunder;

 

(ii)           to prescribe forms and
procedures for purposes of Plan participation and distribution of Awards; and

 

(iii)          to adopt rules, regulations
and bylaws and to take such actions as it deems necessary or desirable for the
proper administration of the Plan.

 

(b)           Any rule or decision by
the Committee that is not inconsistent with the provisions of the Plan shall be
conclusive and binding on all persons, and shall be given the maximum deference
permitted by law.

 

4.             Eligibility.  The employees eligible to participate in the
Plan for a given Performance Period shall be executive officers of the Company
who are designated by the Committee in its sole discretion.  No person shall be automatically entitled to
participate in the Plan.

 

5.             Performance Goal
Determination.  The
Committee, in its sole discretion, shall establish the Performance Goals for
each Participant for the Performance Period. 
Such Performance Goals shall be set forth in writing prior to the
Determination Date.

 

6.             Target Award Determination.  The Committee, in its sole discretion, shall
establish a Target Award for each Participant. 
Each Participant’s Target Award shall be determined by the Committee in
its sole discretion, and each Target Award shall be set forth in writing prior
to the Determination Date.

 

7.             Determination of Payout
Formula or Formulae.  On or prior
to the Determination Date, the Committee, in its sole discretion, shall
establish a Payout Formula or Formulae for purposes of determining the Award
(if any) payable to each Participant. 
Each Payout Formula shall (a) be set forth in writing prior to the
Determination Date, (b) be based on a comparison of actual performance to
the Performance Goals, (c) provide for the payment of a Participant’s
Target Award if the Performance Goals for the Performance Period are achieved,
and (d) provide for an Award greater than or less than the Participant’s
Target Award, depending upon the extent to which actual performance exceeds or
falls below the Performance Goals. 
Notwithstanding the preceding, in no event shall a Participant’s Award
for any Performance Period exceed the Maximum Award.

 

8.             Determination of Awards;
Award Payment.

 

Determination and Certification.  After the end of each Performance Period, the
Committee shall certify in writing (which may be by approval of the minutes in
which the certification was made) the extent to which the Performance Goals
applicable to each Participant for the Performance Period were achieved or
exceeded.  The Award for each Participant
shall be determined by applying the Payout Formula to the level of actual
performance that has been certified by the Committee.  Notwithstanding any contrary provision of the
Plan, the Committee, in its sole discretion, may eliminate or reduce the Award
payable to any Participant below that which otherwise would be payable under
the Payout Formula but shall not have the right to increase the Award above
that which would otherwise be payable under the Payout Formula.

 

3

 

Right to Receive Payment.  Each Award under the Plan shall be paid
solely from the general assets of the Company. 
Nothing in this Plan shall be construed to create a trust or to
establish or evidence any Participant’s claim of any right to payment of an
Award other than as an unsecured general creditor with respect to any payment
to which he or she may be entitled.  A
Participant needs to be employed by the Company through the payment date in
order to be eligible to receive an Award payout hereunder.

 

Form of Distributions.  The Company shall distribute all Awards to
the Participant in cash.

 

Timing of Distributions.  Subject to Section 8(e) below, the
Company shall distribute amounts payable to Participants as soon as is
practicable following the determination and written certification of the Award
for a Performance Period.

 

Deferral.  The
Committee may defer payment of Awards, or any portion thereof, to Covered
Employees as the Committee, in its discretion, determines to be necessary or
desirable to preserve the deductibility of such amounts under
Section 162(m), but only in compliance with Section 409A of the
Code.  In addition, the Committee, in its
sole discretion, may permit a Participant to defer receipt of the payment of
cash that would otherwise be delivered to a Participant under the Plan.  Any such deferral elections shall be subject
to such rules and procedures as shall be determined by the Committee in
its sole discretion and in compliance with Section 409A of the Code.

 

(a)           Recoupment.
Notwithstanding anything to the contrary set forth in the Plan or any Award, in
the event of a restatement of incorrect financial results, the Board will
review the conduct of executive officers in relation to the restatement.  If the Board determines that an executive
officer has engaged in misconduct, or otherwise violated the Company’s Code of
Conduct and Ethics for Employees, Agents and Contractors, and that such
misconduct or violation contributed to such restatement, then the Board may, in
its discretion, take appropriate action to remedy the misconduct or violation,
including, without limitation, seeking reimbursement of any portion of any
performance-based or incentive compensation paid or awarded to the employee
that is greater than would have been paid or awarded if calculated based on the
restated financial results, to the extent not prohibited by governing law. For
this purpose, the term “executive officer” means executive offers as defined by
the Securities Exchange Act of 1934, as amended. Any such action by the Board
would be in addition to any other actions the Board of the Company may take
under the Company’s policies, as modified from time to time, or any actions
imposed by law enforcement, regulators or other authorities.  If the Board takes any such action,
Participants shall be required to reimburse the Company such amounts as
directed by the Board, in its sole discretion.

 

9.             Term of Plan.  Subject to its approval at the 2009 annual
meeting of the Company’s stockholders, the Plan shall first apply to the 2011
Plan Year.  Once approved by the Company’s
stockholders, the Plan shall continue until terminated under Section 10 of
the Plan.

 

10.             Amendment and Termination of
the Plan.  The
Committee may amend, modify, suspend or terminate the Plan, in whole or in
part, at any time, including the adoption of amendments deemed necessary or
desirable to correct any defect or to supply omitted data or to reconcile any
inconsistency in the Plan or in any Award granted hereunder; provided, however,
that no amendment, alteration, suspension or discontinuation shall be made
which would (i) impair any payments to Participants made prior to such
amendment, modification, suspension or termination, unless the Committee has
made a determination that such amendment or modification is in the best
interests of all persons to whom Awards have theretofore been granted; provided
further, however, that in no event may such an amendment or modification result
in an increase in the amount of compensation payable pursuant to such 

 

4

 

Award
or (ii) cause compensation that is, or may become, payable hereunder to
fail to qualify as Performance-Based Compensation.  To the extent necessary or advisable under
applicable law, including Section 162(m) of the Code, Plan amendments
shall be subject to stockholder approval. 
At no time before the actual distribution of funds to Participants under
the Plan shall any Participant accrue any vested interest or right whatsoever
under the Plan except as otherwise stated in this Plan.

 

11.             Withholding.  Distributions pursuant to this Plan shall be
subject to all applicable federal and state tax and withholding requirements.

 

12.             At-Will Employment.  No statement in this Plan should be construed
to grant any employee an employment contract of fixed duration or any other
contractual rights, nor should this Plan be interpreted as creating an implied
or an expressed contract of employment or any other contractual rights between
the Company and its employees.  The
employment relationship between the Company and its employees is terminable
at-will.  This means that an employee of
the Company may terminate the employment relationship at any time and for any
reason or no reason.

 

13.             Successors.  All obligations of the Company under the
Plan, with respect to awards granted hereunder, shall be binding on any
successor to the Company,  whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
business or assets of the Company.

 

14.             Indemnification.  Each
person who is or shall have been a member of the Committee, or of the Board,
shall be indemnified and held harmless by the Company against and from
(a) any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to act
under the Plan or any award, and (b) from any and all amounts paid by him
or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such claim, action, suit, or
proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company’s Certificate of Incorporation or Bylaws, by
contract, as a matter of law, or otherwise, or under any power that the Company
may have to indemnify them or hold them harmless.

 

15.             Nonassignment.  The rights of a Participant under this Plan
shall not be assignable or transferable by the Participant except by will or the
laws of intestacy.

 

16.
            Governing Law.  The Plan shall be governed by the laws of the
State of California, without regard to conflicts of law provisions thereunder.

 

*  *  * 
*  *

 

I
hereby certify that the foregoing Plan was duly adopted by the Board of
Directors of Accuray Incorporated on September 24, 2009.

 

*  *  * 
*  *

 

I
hereby certify that the foregoing Plan was approved by the stockholders of
Accuray Incorporated on November 20, 2009.

 

5

 

*  *  * 
*  *

 

I
hereby certify that Board of Directors of Accuray Incorporated amended the
foregoing Plan to include Section 8(f) and such amendment was
approved on August 24, 2010.

 

 

	
   

  	
  /s/ Darren J. Milliken

  
	
   

  	
  Corporate Secretary —
  Darren J. Milliken

  

 

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]