Document:

Exhibit 10.8

 

 

 

2007 INCENTIVE AWARD PLAN

 

ARTICLE 1.

PURPOSE

 

The
purpose of the Accuray Incorporated 2007 Incentive Award Plan (the “Plan”)
is to promote the success and enhance the value of Accuray Incorporated by
linking the personal interests of the members of the Board, Employees, and
Consultants to those of Company stockholders and by providing such individuals
with an incentive for outstanding performance to generate superior returns to
Company stockholders.  The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of members of the Board, Employees,
and Consultants upon whose judgment, interest, and special effort the
successful conduct of the Company’s operation is largely dependent.

 

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

 

Wherever
the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise.  The singular pronoun shall include the plural
where the context so indicates.

 

2.1                                 “Award”
means an Option, a Restricted Stock award, a Stock Appreciation Right award, a
Performance Share award, a Performance Stock Unit award, a Dividend Equivalents
award, a Stock Payment award, a Deferred Stock award, a Restricted Stock Unit
award, a Performance Bonus Award, or a Performance-Based Award granted to a
Participant pursuant to the Plan.

 

2.2                                 “Award
Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award, including through electronic medium.

 

2.3                                 “Board”
means the Board of Directors of the Company.

 

2.4                                 “Change in
Control” means and includes each of the following:

 

(a)                                  A transaction
or series of transactions (other than an offering of Stock to the general
public through a registration statement filed with the Securities and Exchange
Commission) whereby any “person” or related “group” of “persons” (as such terms
are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other
than the Company, any of its subsidiaries, an employee benefit plan maintained
by the Company or any of its subsidiaries or a “person” that, prior to such
transaction, directly or indirectly controls, is controlled by, or is under
common control with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company 

 

	
  2007 INCENTIVE
  AWARD PLAN STD 7.1.10

  	
   

  	
  ACCURAY CONFIDENTIAL

  

 

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possessing more than 50% of the total combined
voting power of the Company’s securities outstanding immediately after such
acquisition; or

 

(b)                                 During any
period of two consecutive years, individuals who, at the beginning of such
period, constitute the Board together with any new director(s) (other than
a director designated by a person who shall have entered into an agreement with
the Company to effect a transaction described in Section 2.4(a) hereof
or Section 2.4(c) hereof) whose election by the Board or nomination
for election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the two-year period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or

 

(c)                                  The
consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of
(x) a merger, consolidation, reorganization, or business combination or
(y) a sale or other disposition of all or substantially all of the Company’s
assets in any single transaction or series of related transactions or
(z) the acquisition of assets or stock of another entity, in each case
other than a transaction:

 

(i)                                     Which results
in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by
being converted into voting securities of the Company or the person that, as a
result of the transaction, controls, directly or indirectly, the Company or
owns, directly or indirectly, all or substantially all of the Company’s assets
or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a
majority of the combined voting power of the Successor Entity’s outstanding
voting securities immediately after the transaction, and

 

(ii)                                  After which no
person or group beneficially owns voting securities representing 50% or more of
the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated
for purposes of this Section 2.4(c)(ii) as beneficially owning 50% or
more of combined voting power of the Successor Entity solely as a result of the
voting power held in the Company prior to the consummation of the transaction;
or

 

(d)                                 The Company’s
stockholders approve a liquidation or dissolution of the Company.

 

2.5                                 “Code”
means the Internal Revenue Code of 1986, as amended.

 

2.6                                 “Committee”
means the committee of the Board described in Article 12 hereof.

 

2.7                                 “Company”
means Accuray Incorporated, a California corporation, or any successor
corporation (including, without limitation, the surviving corporation in any
consolidation, merger or reincorporation effected exclusively to change the
domicile of the Company).

 

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2.8                                 “Consultant”
means any consultant or adviser if: (a) the consultant or adviser renders
bona fide services to the Company or any Subsidiary; (b) the services
rendered by the consultant or adviser are not in connection with the offer or
sale of securities in a capital-raising transaction and do not directly or
indirectly promote or maintain a market for the Company’s securities; and (c) the
consultant or adviser is a natural person who has contracted directly with the
Company or any Subsidiary to render such services.

 

2.9                                 “Covered
Employee” means an Employee who is, or could be, a “covered employee”
within the meaning of Section 162(m) of the Code.

 

2.10                           “Deferred
Stock” means a right to receive a specified number of shares of Stock
during specified time periods pursuant to Section 8.5 hereof.

 

2.11                           “Disability”  means that the Participant qualifies to receive long-term
disability payments under the Company’s long-term disability insurance program,
as it may be amended from time to time.

 

2.12                           “Dividend
Equivalents” means a right granted to a Participant pursuant to
Section 8.3 hereof to receive the equivalent value (in cash or Stock) of
dividends paid on Stock.

 

2.13                           “Effective
Date” shall have the meaning set forth in Section 13.1 hereof.

 

2.14                           “Eligible
Individual” means any person who is an Employee, a Consultant or an
Independent Director, as determined by the Committee.

 

2.15                           “Employee”
means any officer or other employee (as defined in accordance with Section 3401(c) of
the Code) of the Company or any Subsidiary.

 

2.16                           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

2.17                           “Fair Market
Value” means, as of any given date, (a) if Stock is traded on an
exchange, the closing price of a share of Stock as reported in the Wall Street Journal (or such other source
as the Company may deem reliable for such purposes) for such date, or if no
sale occurred on such date, the first trading date immediately prior to such
date during which a sale occurred; or (b) if Stock is not traded on an
exchange but is quoted on a quotation system, the mean between the closing
representative bid and asked prices for the Stock on such date, or if no sale
occurred on such date, the first date immediately prior to such date on which
sales prices or bid and asked prices, as applicable, are reported by such
quotation system; or (c) if Stock is not publicly traded, the fair market
value established by the Committee acting in good faith.

 

2.18                           “Incentive
Stock Option” means an Option that is intended to meet the requirements of Section 422
of the Code or any successor provision thereto.

 

2.19                           “Independent
Director” means a member of the Board who is not an Employee of the
Company.

 

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2.20                           “Non-Employee
Director” means a member of the Board who qualifies as a “Non-Employee
Director” as defined in Rule 16b-3(b)(3) under the Exchange Act, or
any successor rule.

 

2.21                           “Non-Qualified
Stock Option” means an Option that is not intended to be an Incentive Stock
Option.

 

2.22                           “Option”
means a right granted to a Participant pursuant to Article 5 hereof to
purchase a specified number of shares of Stock at a specified price during
specified time periods.  An Option may be
either an Incentive Stock Option or a Non-Qualified Stock Option.

 

2.23                           “Participant”
means any Eligible Individual who, as a member of the Board, Consultant or
Employee, has been granted an Award pursuant to the Plan.

 

2.24                           “Performance-Based
Award” means an Award granted to selected Covered Employees pursuant to Section 8.7
hereof, but which is subject to the terms and conditions set forth in Article 9
hereof.  All Performance-Based Awards are
intended to qualify as Qualified Performance-Based Compensation.

 

2.25                           “Performance
Bonus Award” has the meaning set forth in Section 8.7 hereof.

 

2.26                           “Performance
Criteria” means the criteria that the Committee selects for purposes of
establishing the Performance Goal or Performance Goals for a Participant for a
Performance Period.  The Performance
Criteria that will be used to establish Performance Goals are limited to the
following: net earnings (either before or after interest, taxes, depreciation
and amortization), economic value-added, sales or revenue, net income (either
before or after taxes), operating earnings, cash flow (including, but not
limited to, operating cash flow and free cash flow), cash flow return on
capital, return on net assets, return on stockholders’ equity, return on
assets, return on capital, stockholder returns, return on sales, gross or net
profit margin, productivity, expense, margins, operating efficiency, customer
satisfaction, working capital, earnings per share, price per share of Stock,
and market share, any of which may be measured either in absolute terms or as
compared to any incremental increase or as compared to results of a peer
group.  The Committee shall define in an
objective fashion the manner of calculating the Performance Criteria it selects
to use for such Performance Period for such Participant.

 

2.27                           “Performance
Goals” means, for a Performance Period, the goals established in writing by
the Committee for the Performance Period based upon the Performance Criteria.  Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, or an individual.  The Committee,
in its discretion, may, within the time prescribed by Section 162(m) of
the Code, adjust or modify the calculation of Performance Goals for such
Performance Period in order to prevent the dilution or enlargement of the
rights of Participants (a) in the event of, or in anticipation of, any
unusual or extraordinary corporate item, transaction, event, or development, or
(b) in recognition of, or in anticipation of, any other unusual or
nonrecurring events affecting the Company, or the financial statements of 

 

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the Company, or in response to, or in anticipation
of, changes in applicable laws, regulations, accounting principles, or business
conditions.

 

2.28                           “Performance
Period” means the one or more periods of time, which may be of varying and
overlapping durations, as the Committee may select, over which the attainment
of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to, and the payment of, a Performance-Based
Award.

 

2.29                           “Performance
Share” means a right granted to a Participant pursuant to Section 8.1
hereof, to receive Stock, the payment of which is contingent upon achieving
certain Performance Goals or other performance-based targets established by the
Committee.

 

2.30                           “Performance
Stock Unit” means a right granted to a Participant pursuant to Section 8.2
hereof, to receive Stock, the payment of which is contingent upon achieving
certain Performance Goals or other performance-based targets established by the
Committee.

 

2.31                           “Plan”
means this Accuray Incorporated 2007 Incentive Award Plan, as it may be amended
from time to time.

 

2.32                           “Public
Trading Date” means the first date upon which Stock is listed (or approved
for listing) upon notice of issuance on any securities exchange or designated
(or approved for designation) upon notice of issuance as a national market
security on an interdealer quotation system.

 

2.33                           “Qualified
Performance-Based Compensation” means any compensation that is intended to
qualify as “qualified performance-based compensation” as described in
Section 162(m)(4)(C) of the Code.

 

2.34                           “Restricted
Stock” means Stock awarded to a Participant pursuant to Article 6
hereof that is subject to certain restrictions and may be subject to risk of
forfeiture.

 

2.35                           “Restricted
Stock Unit” means an Award granted pursuant to Section 8.6 hereof.

 

2.36                           “Securities
Act” shall mean the Securities Act of 1933, as amended.

 

2.37                           “Stock”
means the common stock of the Company, no par value per share. “Stock” shall also
include (i) the common stock of the surviving corporation in any
consolidation, merger or reincorporation effected exclusively to change the
domicile of the Company and (ii) such other securities of the Company that
may be substituted for Stock pursuant to Article 11 hereof.

 

2.38                           “Stock
Appreciation Right” or “SAR” means a right granted pursuant to Article 7
hereof to receive a payment equal to the excess of the Fair Market Value of a
specified number of shares of Stock on the date the SAR is exercised over the
Fair Market Value on the date the SAR was granted as set forth in the
applicable Award Agreement.

 

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2.39                           “Stock
Payment” means (a) a payment in the form of shares of Stock, or (b) an
option or other right to purchase shares of Stock, as part of any bonus,
deferred compensation or other arrangement, made in lieu of all or any portion
of the compensation, granted pursuant to Section 8.4 hereof.

 

2.40                           “Subsidiary”
means any “subsidiary corporation” as defined in Section 424(f) of
the Code and any applicable regulations promulgated thereunder or any other
entity of which a majority of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Company.

 

ARTICLE 3.

SHARES SUBJECT TO THE PLAN

 

3.1                                 Number of
Shares.

 

(a)                                  Subject to Article 11
hereof and Section 3.1(b) hereof, the aggregate number of shares of
Stock which may be issued or transferred pursuant to Awards under the Plan is
4,500,000.  In addition to the foregoing,
subject to Article 11 hereof, commencing on July 1, 2008 and on the
first day of each fiscal year of the Company thereafter during the term of the
Plan, the aggregate number of shares of Stock which may be issued or
transferred pursuant to Awards under the Plan shall be increased by that number
of shares of Stock equal to the least of (i) three percent (3%) of the
Company’s outstanding shares on such date, (ii) 1,500,000 shares, or (iii) a
lesser amount determined by the Board.

 

(b)                                 To the extent
that an Award terminates, expires, or lapses for any reason, any shares of
Stock subject to the Award shall again be available for the grant of an Award
pursuant to the Plan.  To the extent
permitted by applicable law or any exchange rule, shares of Stock issued in
assumption of, or in substitution for, any outstanding awards of any entity
acquired in any form of combination by the Company or any Subsidiary shall not
be counted against shares of Stock available for grant pursuant to this Plan.  To the extent that a SAR is exercised for or
settled in Stock, only the actual number of shares issued upon such exercise or
settlement shall be counted for purposes of calculating the aggregate number of
shares of Stock available for issuance under the Plan as set forth in Section 3.1(a).  To the extent that a SAR is exercised for or
settled in cash, no shares underlying such SAR shall be counted for purposes of
calculating the aggregate number of shares of Stock available for issuance
under the Plan as set forth in Section 3.1(a).  The payment of Dividend Equivalents in cash
in conjunction with any outstanding Awards shall not be counted against the
shares available for issuance under the Plan. 
Notwithstanding the provisions of this Section 3.1(b), no shares of
Stock may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an incentive stock option under Section 422
of the Code.

 

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3.2                                 Stock Distributed.  Any
Stock distributed pursuant to an Award may consist, in whole or in part, of
authorized and unissued Stock, treasury Stock or Stock purchased on the open
market.

 

3.3                                 Limitation on Number of Shares Subject to Awards.  Notwithstanding any provision in the Plan to
the contrary, and subject to Article 11 hereof, the maximum number of
shares of Stock with respect to one or more Awards that may be granted to any
one Participant during any calendar year shall be 500,000 and the maximum
amount that may be paid in cash during any calendar year with respect to any
Performance-Based Award (including, without limitation, any Performance Bonus
Award) shall be $1,000,000; provided, however,
that the foregoing limitations shall not apply prior to the Public Trading Date
and, following the Public Trading Date, the foregoing limitations shall not
apply until the earliest of: (a) the first material modification of the
Plan (including any increase in the number of shares reserved for issuance
under the Plan in accordance with Section 3.1 hereof); (b) the
issuance of all of the shares of Stock reserved for issuance under the Plan; (c) the
expiration of the Plan; (d) the first meeting of stockholders at which
members of the Board are to be elected that occurs after the close of the third
calendar year following the calendar year in which occurred the first
registration of an equity security of the Company under Section 12 of the
Exchange Act; or (e) such other date required by Section 162(m) of
the Code and the rules and regulations promulgated thereunder.

 

ARTICLE 4.

ELIGIBILITY AND PARTICIPATION

 

4.1                                 Eligibility.  Each Eligible Individual shall be eligible to
be granted one or more Awards pursuant to the Plan.

 

4.2                                 Participation.  Subject to
the provisions of the Plan, the Committee may, from time to time, select from
among all Eligible Individuals, those to whom Awards shall be granted and shall
determine the nature and amount of each Award. 
No Eligible Individual shall have any right to be granted an Award
pursuant to this Plan.

 

4.3                                 Foreign
Participants. 
Notwithstanding any provision of the Plan to the contrary, in order to
comply with the laws in other countries in which the Company and its
Subsidiaries operate or have Eligible Individuals, the Committee, in its sole
discretion, shall have the power and authority to: (i) determine which
Subsidiaries shall be covered by the Plan; (ii) determine which Eligible
Individuals outside the United States are eligible to participate in the Plan; (iii) modify
the terms and conditions of any Award granted to Eligible Individuals outside
the United States to comply with applicable foreign laws; (iv) establish
subplans and modify exercise procedures and other terms and procedures, to the
extent such actions may be necessary or advisable (any such subplans and/or
modifications shall be attached to this Plan as appendices); provided, however, that no such subplans
and/or modifications shall increase the share limitations contained in Sections
3.1 and 3.3 hereof; and (v) take any action, before or after an Award is
made, that it deems advisable to obtain approval or comply with any necessary
local governmental regulatory exemptions or approvals.  Notwithstanding the foregoing, the 

 

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Committee may not take any actions hereunder, and no
Awards shall be granted, that would violate the Exchange Act, the Code, any
securities law or governing statute or any other applicable law.

 

ARTICLE 5.

STOCK OPTIONS

 

5.1                                 General.  The Committee is authorized to grant Options
to Participants on the following terms and conditions:

 

(a)                                  Exercise Price.  The exercise price per share of Stock subject
to an Option shall be determined by the Committee and set forth in the Award
Agreement; provided, that, subject to Section 5.2(c) hereof,
the per share exercise price for any Option shall not be less than 100% of the
Fair Market Value of a share of Stock on the date of grant.

 

(b)                                 Time and
Conditions of Exercise.  The
Committee shall determine the time or times at which an Option may be exercised
in whole or in part; provided
that the term of any Option granted under the Plan shall not exceed ten
years.  The Committee shall also
determine the performance or other conditions, if any, that must be satisfied
before all or part of an Option may be exercised.

 

(c)                                  Payment.  The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation: (i) cash, (ii) shares of Stock held
for such period of time as may be required by the Committee in order to avoid
adverse accounting consequences and having a fair market value on the date of
delivery equal to the aggregate exercise price of the Option or exercised
portion thereof, or (iii) other property acceptable to the Committee
(including through the delivery of a notice that the Participant has placed a
market sell order with a broker with respect to shares of Stock then issuable
upon exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; provided
that payment of such proceeds is then made to the Company upon settlement of
such sale), and the methods by which shares of Stock shall be delivered or
deemed to be delivered to Participants. 
Notwithstanding any other provision of the Plan to the contrary, after
the Public Trading Date, no Participant who is a member of the Board or an “executive
officer” of the Company within the meaning of Section 13(k) of the
Exchange Act shall be permitted to pay the exercise price of an Option, or
continue any extension of credit with respect to the exercise price of an
Option with a loan from the Company or a loan arranged by the Company in
violation of Section 13(k) of the Exchange Act.

 

(d)                                 Evidence of
Grant.  All Options shall be evidenced
by an Award Agreement between the Company and the Participant.  The Award Agreement shall include such
additional provisions as may be specified by the Committee.

 

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5.2                                 Incentive Stock Options.  Incentive Stock Options shall be granted only
to Employees and the terms of any Incentive Stock Options granted pursuant to
the Plan, in addition to the requirements of Section 5.1 hereof, must
comply with the provisions of this Section 5.2.

 

(a)                                  Expiration.  Subject to Section 5.2(c) hereof,
an Incentive Stock Option shall expire and may not be exercised to any extent
by anyone after the first to occur of the following events:

 

(i)                                     Ten years from
the date it is granted, unless an earlier time is set in the Award Agreement;

 

(ii)                                  Three months
after the Participant’s termination of employment as an Employee other than by
reason of the Participant’s death or Disability; and

 

(iii)                               One year after
the date of the Participant’s termination of employment or service on account
of Disability or death.  Upon the
Participant’s Disability or death, any Incentive Stock Options exercisable at
the Participant’s Disability or death may be exercised by the Participant’s
legal representative or representatives, by the person or persons entitled to
do so pursuant to the Participant’s last will and testament, or, if the
Participant fails to make testamentary disposition of such Incentive Stock
Option or dies intestate, by the person or persons entitled to receive the
Incentive Stock Option pursuant to the applicable laws of descent and
distribution.

 

(b)                                 Dollar
Limitation.  The
aggregate Fair Market Value (determined as of the time the Option is granted)
of all shares of Stock with respect to which Incentive Stock Options are first
exercisable by a Participant in any calendar year may not exceed $100,000 or
such other limitation as imposed by Section 422(d) of the Code, or
any successor provision.  To the extent
that Incentive Stock Options are first exercisable by a Participant in excess
of such limitation, the excess shall be considered Non-Qualified Stock Options.

 

(c)                                  Ten Percent
Owners.  An Incentive Stock Option may
not be granted to any individual who, at the date of grant, owns stock
possessing more than ten percent of the total combined voting power of all
classes of Stock of the Company unless such Option is granted at a price that
is not less than 110% of Fair Market Value on the date of grant and the Option
is exercisable for no more than five years from the date of grant.

 

(d)                                 Notice of
Disposition.  The
Participant shall give the Company prompt notice of any disposition of shares
of Stock acquired by exercise of an Incentive Stock Option within (i) two
years from the date of grant of such Incentive Stock Option or (ii) one
year after the transfer of such shares of Stock to the Participant.

 

(e)                                  Right to
Exercise.  Except as
set forth in Section 5.2(a)(iii) above, during a Participant’s
lifetime, an Incentive Stock Option may be exercised only by the Participant.

 

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(f)                                    Failure to Meet
Requirements.  Any Option
(or portion thereof) purported to be an Incentive Stock Option, which, for any
reason, fails to meet the requirements of Section 422 of the Code shall be
considered a Non-Qualified Stock Option.

 

ARTICLE 6.

RESTRICTED STOCK AWARDS

 

6.1                                 Grant of Restricted Stock.  The Committee is authorized to make Awards of
Restricted Stock to any Participant selected by the Committee in such amounts
and subject to such terms and conditions as determined by the Committee.  All Awards of Restricted Stock shall be
evidenced by an Award Agreement.

 

6.2                                 Issuance and Restrictions.  Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).  These restrictions may lapse separately or in
combination at such times, pursuant to such circumstances, in such
installments, or otherwise, as the Committee determines at the time of the
grant of the Award or thereafter.

 

6.3                                 Forfeiture.  Except as
otherwise determined by the Committee at the time of the grant of the Award or
thereafter, upon termination of employment or service during the applicable
restriction period, Restricted Stock that is at that time subject to
restrictions shall be forfeited; provided,
however, that, the Committee may (a) provide in any Restricted
Stock Award Agreement that restrictions or forfeiture conditions relating to
Restricted Stock will lapse in whole or in part in the event of terminations
resulting from specified causes, and (b) provide in other cases for the
lapse in whole or in part of restrictions or forfeiture conditions relating to
Restricted Stock.

 

6.4                                 Certificates for Restricted Stock.  Restricted Stock granted pursuant to the Plan
may be evidenced in such manner as the Committee shall determine.  If certificates representing shares of
Restricted Stock are registered in the name of the Participant, certificates
must bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, and the Company may, at its
discretion, retain physical possession of the certificate until such time as
all applicable restrictions lapse.

 

ARTICLE 7.

STOCK APPRECIATION RIGHTS

 

7.1                                 Grant of Stock
Appreciation Rights.

 

(a)                                  A Stock
Appreciation Right may be granted to any Participant selected by the
Committee.  A Stock Appreciation Right
shall be subject to such terms and conditions not 

 

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inconsistent with the Plan as the Committee shall
impose and shall be evidenced by an Award Agreement.

 

(b)                                 A Stock
Appreciation Right shall entitle the Participant (or other person entitled to
exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or
a specified portion of the Stock Appreciation Right (to the extent then
exercisable pursuant to its terms) and to receive from the Company an amount
equal to the product of (i) the excess of (A) the Fair Market Value
of the Stock on the date the Stock Appreciation Right is exercised over (B) the
Fair Market Value of the Stock on the date the Stock Appreciation Right was
granted and (ii) the number of shares of Stock with respect to which the
Stock Appreciation Right is exercised, subject to any limitations the Committee
may impose.

 

7.2                                 Payment and
Limitations on Exercise.

 

(a)                                  Subject to Section 7.2(b) below,
payment of the amounts determined under Sections 7.1(b) above shall be in
cash, in Stock (based on its Fair Market Value as of the date the Stock
Appreciation Right is exercised) or a combination of both, as determined by the
Committee in the Award Agreement.

 

(b)                                 To the extent
any payment under Section 7.1(b) hereof is effected in Stock, it
shall be made subject to satisfaction of all provisions of Article 5 above
pertaining to Options.

 

ARTICLE 8.

 

OTHER TYPES OF AWARDS

 

8.1                                 Performance
Share Awards.  Any
Participant selected by the Committee may be granted one or more Performance
Share awards which shall be denominated in a number of shares of Stock and
which may be linked to any one or more of the Performance Criteria or other
specific performance criteria determined appropriate by the Committee, in each
case on a specified date or dates or over any period or periods determined by
the Committee.  In making such determinations,
the Committee shall consider (among such other factors as it deems relevant in
light of the specific type of award) the contributions, responsibilities and
other compensation of the particular Participant.

 

8.2                                 Performance
Stock Units.  Any Participant selected by the
Committee may be granted one or more Performance Stock Unit awards which shall
be denominated in unit equivalent of shares of Stock and/or units of value
including dollar value of shares of Stock and which may be linked to any one or
more of the Performance Criteria or other specific performance criteria
determined appropriate by the Committee, in each case on a specified date or
dates or over any period or periods determined by the Committee.  In making such determinations, the Committee
shall consider (among such other factors as it deems relevant in light of the
specific type of award) the contributions, responsibilities and other
compensation of the particular Participant.

 

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8.3                                 Dividend
Equivalents.

 

(a)                                  Any Participant
selected by the Committee may be granted Dividend Equivalents based on the
dividends declared on the shares of Stock that are subject to any Award, to be
credited as of dividend payment dates, during the period between the date the
Award is granted and the date the Award is exercised, vests or expires, as
determined by the Committee.  Such
Dividend Equivalents shall be converted to cash or additional shares of Stock
by such formula and at such time and subject to such limitations as may be
determined by the Committee.

 

(b)                                 Dividend
Equivalents granted with respect to Options or SARs that are intended to be
Qualified Performance-Based Compensation shall be payable, with respect to
pre-exercise periods, regardless of whether such Option or SAR is subsequently
exercised.

 

8.4                                 Stock Payments.  Any Participant selected by the Committee may
receive Stock Payments in the manner determined from time to time by the
Committee; provided, that unless
otherwise determined by the Committee such Stock Payments shall be made in lieu
of base salary, bonus, or other cash compensation otherwise payable to such
Participant.  The number of shares shall
be determined by the Committee and may be based upon the Performance Criteria
or other specific performance criteria determined appropriate by the Committee,
determined on the date such Stock Payment is made or on any date thereafter.

 

8.5                                 Deferred Stock.  Any Participant selected by the Committee may
be granted an award of Deferred Stock in the manner determined from time to
time by the Committee.  The number of
shares of Deferred Stock shall be determined by the Committee and may be linked
to the Performance Criteria or other specific performance criteria determined
to be appropriate by the Committee, in each case on a specified date or dates
or over any period or periods determined by the Committee.  Stock underlying a Deferred Stock award will
not be issued until the Deferred Stock award has vested, pursuant to a vesting
schedule or performance criteria set by the Committee.  Unless otherwise provided by the Committee, a
Participant awarded Deferred Stock shall have no rights as a Company
stockholder with respect to such Deferred Stock until such time as the Deferred
Stock Award has vested and the Stock underlying the Deferred Stock Award has
been issued.

 

8.6                                 Restricted
Stock Units.  The
Committee is authorized to make Awards of Restricted Stock Units to any
Participant selected by the Committee in such amounts and subject to such terms
and conditions as determined by the Committee. 
At the time of grant, the Committee shall specify the date or dates on
which the Restricted Stock Units shall become fully vested and nonforfeitable,
and may specify such conditions to vesting as it deems appropriate.  At the time of grant, the Committee shall
specify the maturity date applicable to each grant of Restricted Stock Units
which shall be no earlier than the vesting date or dates of the Award and may
be determined at the election of the grantee.  On the maturity date, the Company shall,
subject to Section 10.5(b) hereof, transfer to the Participant one
unrestricted, fully transferable share of Stock for each Restricted Stock Unit
scheduled to be paid out on such date and not previously forfeited.

 

12

 

8.7                                 Performance
Bonus Awards.  Any
Participant selected by the Committee may be granted a cash bonus (a “Performance
Bonus Award”) payable upon the attainment of Performance Goals that are
established by the Committee and relate to one or more of the Performance
Criteria or other specific performance criteria determined to be appropriate by
the Committee, in each case on a specified date or dates or over any period or
periods determined by the Committee.  Any
such Performance Bonus Award paid to a Covered Employee may be a
Performance-Based Award and be based upon objectively determinable bonus
formulas established in accordance with Article 9 hereof.

 

8.8                                 Term.  Except as otherwise provided herein, the term
of any Award of  Performance Shares,
Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock
or Restricted Stock Units shall be set by the Committee in its discretion.

 

8.9                                 Exercise or
Purchase Price.  The
Committee may establish the exercise or purchase price, if any, of any Award of
Performance Shares, Performance Stock Units, Deferred Stock, Stock Payments or
Restricted Stock Units; provided, however,
that such price shall not be less than the par value of a share of Stock on the
date of grant, unless otherwise permitted by applicable state law.

 

8.10                           Exercise upon Termination of Employment or Service.  An Award of Performance Shares, Performance
Stock Units, Dividend Equivalents, Deferred Stock, Stock Payments and
Restricted Stock Units shall only be exercisable or payable while the
Participant is an Employee, Consultant or a member of the Board, as applicable;
provided, however, that the
Committee in its sole and absolute discretion may provide that an Award of
Performance Shares, Performance Stock Units, Dividend Equivalents, Stock
Payments, Deferred Stock or Restricted Stock Units may be exercised or paid
subsequent to a termination of employment or service, as applicable, or
following a Change in Control of the Company, or because of the Participant’s
retirement, death or Disability, or otherwise; provided,
however, that any such provision with respect to Performance Shares
or Performance Stock Units shall be subject to the requirements of Section 162(m) of
the Code that apply to Qualified Performance-Based Compensation.

 

8.11                           Form of
Payment.  Payments with respect to any
Awards granted under this Article 8 shall be made in cash, in Stock or a
combination of both, as determined by the Committee.

 

8.12                           Award Agreement.  All Awards under this Article 8 shall be
subject to such additional terms and conditions as determined by the Committee
and shall be evidenced by an Award Agreement.

 

ARTICLE 9.

PERFORMANCE-BASED AWARDS

 

9.1                                 Purpose.  The purpose
of this Article 9 is to provide the Committee the ability to qualify
Awards other than Options and SARs and that are granted pursuant to Articles 6
and 8 

 

13

 

hereof as Qualified Performance-Based
Compensation.  If the Committee, in its discretion,
decides to grant a Performance-Based Award to a Covered Employee, the
provisions of this Article 9 shall control over any contrary provision
contained in Articles 6 or 8 hereof; provided,
however, that the Committee may in its discretion grant Awards to
Covered Employees that are based on Performance Criteria or Performance Goals
but that do not satisfy the requirements of this Article 9.

 

9.2                                 Applicability.  This Article 9
shall apply only to those Covered Employees selected by the Committee to
receive Performance-Based Awards.  The
designation of a Covered Employee as a Participant for a Performance Period
shall not in any manner entitle the Participant to receive an Award for the
period.  Moreover, designation of a
Covered Employee as a Participant for a particular Performance Period shall not
require designation of such Covered Employee as a Participant in any subsequent
Performance Period and designation of one Covered Employee as a Participant
shall not require designation of any other Covered Employees as a Participant
in such period or in any other period.

 

9.3                                 Procedures with Respect to Performance-Based Awards.  To the extent necessary to comply with the
Qualified Performance-Based Compensation requirements of Section 162(m)(4)(C) of
the Code, with respect to any Award granted under Articles 6 or 8 hereof which
may be granted to one or more Covered Employees, no later than ninety (90) days
following the commencement of any fiscal year in question or any other
designated fiscal period or period of service (or such other time as may be
required or permitted by Section 162(m) of the Code), the Committee
shall, in writing, (a) designate one or more Covered Employees, (b) select
the Performance Criteria applicable to the Performance Period, (c) establish
the Performance Goals, and amounts of such Awards, as applicable, which may be
earned for such Performance Period, and (d) specify the relationship
between Performance Criteria and the Performance Goals and the amounts of such
Awards, as applicable, to be earned by each Covered Employee for such
Performance Period.  Following the
completion of each Performance Period, the Committee shall certify in writing
whether the applicable Performance Goals have been achieved for such
Performance Period.  In determining the
amount earned by a Covered Employee, the Committee shall have the right to
reduce or eliminate (but not to increase) the amount payable at a given level
of performance to take into account additional factors that the Committee may
deem relevant to the assessment of individual or corporate performance for the
Performance Period.

 

9.4                                 Payment of Performance-Based Awards.  Unless otherwise provided in the applicable
Award Agreement, a Participant must be employed by the Company or a Subsidiary
on the day a Performance-Based Award for such Performance Period is paid to the
Participant.  Furthermore, a Participant
shall be eligible to receive payment pursuant to a Performance-Based Award for
a Performance Period only if the Performance Goals for such period are
achieved.  In determining the amount
earned under a Performance-Based Award, the Committee may reduce or eliminate
the amount of the Performance-Based Award earned for the Performance Period, if
in its sole and absolute discretion, such reduction or elimination is
appropriate.

 

9.5                                 Additional
Limitations. 
Notwithstanding any other provision of the Plan, any Award which is
granted to a Covered Employee and is intended to constitute Qualified 

 

14

 

Performance-Based Compensation shall be subject to
any additional limitations set forth in Section 162(m) of the Code
(including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for qualification
as qualified performance-based compensation as described in Section 162(m)(4)(C) of
the Code, and the Plan shall be deemed amended to the extent necessary to
conform to such requirements.

 

ARTICLE 10.

PROVISIONS APPLICABLE TO AWARDS

 

10.1                           Stand-Alone and Tandem Awards.  Awards granted pursuant to the Plan may, in
the discretion of the Committee, be granted either alone, in addition to, or in
tandem with, any other Award granted pursuant to the Plan.  Awards granted in addition to or in tandem
with other Awards may be granted either at the same time as or at a different
time from the grant of such other Awards.

 

10.2                           Award Agreement. 
Awards under the Plan shall be evidenced by Award Agreements that set
forth the terms, conditions and limitations for each Award which may include
the term of an Award, the provisions applicable in the event the Participant’s
employment or service terminates, and the Company’s authority to unilaterally
or bilaterally amend, modify, suspend, cancel or rescind an Award.

 

10.3                           Limits on Transfer.  No
right or interest of a Participant in any Award may be pledged, encumbered, or
hypothecated to or in favor of any party other than the Company or a
Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant
to any other party other than the Company or a Subsidiary.  Except as otherwise provided by the
Committee, no Award shall be assigned, transferred, or otherwise disposed of by
a Participant other than by will or the laws of descent and distribution.  The Committee by express provision in the
Award or an amendment thereto may permit an Award (other than an Incentive
Stock Option) to be transferred to, exercised by and paid to certain persons or
entities related to the Participant, including but not limited to members of
the Participant’s family, charitable institutions, or trusts or other entities
whose beneficiaries or beneficial owners are members of the Participant’s
family and/or charitable institutions, or to such other persons or entities as
may be expressly approved by the Committee, pursuant to such conditions and
procedures as the Committee may establish. 
Any permitted transfer shall be subject to the condition that the
Committee receive evidence satisfactory to it that the transfer is being made
for estate and/or tax planning purposes (or to a “blind trust” in connection
with the Participant’s termination of employment or service with the Company or
a Subsidiary to assume a position with a governmental, charitable, educational
or similar non-profit institution) and on a basis consistent with the Company’s
lawful issue of securities.

 

10.4                           Beneficiaries. 
Notwithstanding Section 10.3 hereof, a Participant may, in the
manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant’s death.  A
beneficiary, legal guardian, legal representative, or other person claiming any
rights 

 

15

 

pursuant to the Plan is subject to all terms and
conditions of the Plan and any Award Agreement applicable to the Participant,
except to the extent the Plan and Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the Committee.  If the Participant is married and resides in
a community property state, a designation of a person other than the
Participant’s spouse as his or her beneficiary with respect to more than 50% of
the Participant’s interest in the Award shall not be effective without the
prior written consent of the Participant’s spouse.  If no beneficiary has been designated or
survives the Participant, payment shall be made to the person entitled thereto
pursuant to the Participant’s will or the laws of descent and
distribution.  Subject to the foregoing,
a beneficiary designation may be changed or revoked by a Participant at any
time provided the change or revocation is filed with the Committee.

 

10.5                           Stock
Certificates; Book Entry Procedures.

 

(a)                                  Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or
deliver any certificates evidencing shares of Stock pursuant to the exercise of
any Award, unless and until the Board has determined, with advice of counsel,
that the issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authorities and, if applicable,
the requirements of any exchange on which the shares of Stock are listed or
traded.  All Stock certificates delivered
pursuant to the Plan are subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to comply with
federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded.  The Committee may place legends on any Stock
certificate to reference restrictions applicable to the Stock.  In addition to the terms and conditions
provided herein, the Board may require that a Participant make such reasonable
covenants, agreements, and representations as the Board, in its discretion,
deems advisable in order to comply with any such laws, regulations, or
requirements. The Committee shall have the right to require any Participant to comply with any timing or
other restrictions with respect to the settlement or exercise of any Award,
including a window-period limitation, as may be imposed in the discretion of
the Committee.

 

(b)                                 Notwithstanding
any other provision of the Plan, unless otherwise determined by the Committee
or required by any applicable law, rule or regulation, the Company shall
not deliver to any Participant certificates evidencing shares of Stock issued in
connection with any Award and instead such shares of Stock shall be recorded in
the books of the Company (or, as applicable, its transfer agent or stock plan
administrator).

 

10.6                           Paperless
Exercise.  In the
event that the Company establishes, for itself or using the services of a third
party, an automated system for the exercise of Awards, such as a system using
an internet website or interactive voice response, then the paperless exercise
of Awards by a Participant may be permitted through the use of such an
automated system.

 

10.7                           Recoupment.  Notwithstanding anything to the contrary set
forth in the Plan or any Award Agreement, in the event of a restatement of
incorrect financial results, the Board will 

 

16

 

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.

 

ARTICLE 11.

CHANGES IN CAPITAL STRUCTURE

 

11.1                           Adjustments.

 

(a)                                  In the event of any stock dividend, stock split,
combination or exchange of shares, merger, consolidation, spin-off,
recapitalization or other distribution (other than normal cash dividends) of
Company assets to stockholders, or any other change affecting the shares of
Stock or the share price of the Stock, the Committee shall make proportionate
adjustments to any or all of the following in order to reflect such change: (a) the
aggregate number and kind of shares that may be issued under the Plan
(including, but not limited to, adjustments of the limitations in Sections 3.1
and 3.3 hereof); (b) the
terms and conditions of any outstanding Awards (including, without limitation,
any applicable performance targets or criteria with respect thereto); and (c) the
grant or exercise price per share for any outstanding Awards under the
Plan.  Any adjustment affecting an Award
intended as Qualified Performance-Based Compensation shall be made consistent
with the requirements of Section 162(m) of the Code.

 

(b)                                 In the event of
any transaction or event described in Section 11.1(a) hereof or any
unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations or accounting
principles, the Committee, in its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, either by the terms of the Award
or by action taken prior to the occurrence of such transaction or event and
either automatically or upon the Participant’s request, is hereby authorized to
take any one or more of the following actions in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to any Award under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations
or principles:

 

17

 

(i)                                     To provide for
either (A) termination of any such Award in exchange for an amount of
cash, if any, equal to the amount that would have been attained upon the
exercise of such Award or realization of the Participant’s rights (and, for the
avoidance of doubt, if as of the date of the occurrence of the transaction or
event described in this Section 11.1 the Committee determines in good
faith that no amount would have been attained upon the exercise of such Award
or realization of the Participant’s rights, then such Award may be terminated
by the Company without payment) or (B) the replacement of such Award with
other rights or property selected by the Committee in its sole discretion;

 

(ii)                                  To provide that
such Award be assumed by the successor or survivor corporation, or a parent or
subsidiary thereof, or shall be substituted for by similar options, rights or
awards covering the stock of the successor or survivor corporation, or a parent
or subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and prices;

 

(iii)                               To make
adjustments in the number and type of shares of Stock (or other securities or
property) subject to outstanding Awards, and in the number and kind of
outstanding Restricted Stock or Deferred Stock and/or in the terms and
conditions of (including the grant or exercise price), and the criteria
included in, outstanding options, rights and awards and options, rights and
awards which may be granted in the future;

 

(iv)                              To provide that
such Award shall be exercisable or payable or fully vested with respect to all
shares covered thereby, notwithstanding anything to the contrary in the Plan or
the applicable Award Agreement; and

 

(v)                                 To provide that
the Award cannot vest, be exercised or become payable after such event.

 

11.2                           Acceleration
Upon a Change in Control. 
Notwithstanding Section 11.1
hereof, and except as may otherwise be provided in any applicable Award
Agreement or other written agreement entered into between the Company and a
Participant, if a Change in Control occurs and a Participant’s Awards are not
converted, assumed, or replaced by a successor entity, then immediately prior
to the Change in Control such Awards shall become fully exercisable and all
forfeiture restrictions on such Awards shall lapse.  Upon, or in anticipation of, a Change in
Control, the Committee may cause any and all Awards outstanding hereunder to
terminate at a specific time in the future, including but not limited to the
date of such Change in Control, and shall give each Participant the right to
exercise such Awards during a period of time as the Committee, in its sole and
absolute discretion, shall determine.  In
the event that the terms of any agreement between the Company or any Company
subsidiary or affiliate and a Participant contains provisions that conflict
with and are more restrictive than the provisions of this Section 11.2,
this Section 11.2 shall prevail and control and the more restrictive terms
of such agreement (and only such terms) shall be of no force or effect.

 

11.3                           No Other Rights. 
Except as expressly provided in the Plan, no Participant shall have any
rights by reason of any subdivision or consolidation of shares of stock of any
class, the 

 

18

 

payment of any dividend, any increase or decrease in
the number of shares of stock of any class or any dissolution, liquidation,
merger, or consolidation of the Company or any other corporation.  Except as expressly provided in the Plan or
pursuant to action of the Committee under the Plan, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number of shares of Stock subject to an Award or the grant
or exercise price of any Award.

 

ARTICLE 12.

ADMINISTRATION

 

12.1                           Committee.  Unless and
until the Board delegates administration of the Plan to a Committee as set
forth below, the Plan shall be administered by the full Board, and for such
purposes the term “Committee” as used in this Plan shall be deemed to refer to
the Board.  The Board, at its discretion
or as otherwise necessary to comply with the requirements of Section 162(m) of
the Code, Rule 16b-3 promulgated under the Exchange Act or to the extent
required by any other applicable rule or regulation, shall delegate
administration of the Plan to a Committee. 
The Committee shall consist solely of two or more members of the Board
each of whom is an “outside director,” within the meaning of Section 162(m) of
the Code, a Non-Employee Director and an “independent director” under the rules of
The NASDAQ Global Market (or other principal securities market on which shares
of Stock are traded), provided that any action taken by the Committee shall be
valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the
requirements for membership set forth in this Section 12.1 or otherwise
provided in the charter of the Committee.  Notwithstanding the foregoing: (a) the
full Board, acting by a majority of its members in office, shall conduct the
general administration of the Plan with respect to all Awards granted to
Independent Directors and for purposes of such Awards the term “Committee” as
used in this Plan shall be deemed to refer to the Board and (b) the
Committee may delegate its authority hereunder to the extent permitted by Section 12.5
hereof.  In its sole discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan except with respect to matters which
under Rule 16b-3 under the Exchange Act or Section 162(m) of the
Code, or any regulations or rules issued thereunder, are required to be
determined in the sole discretion of the Committee.  The governance of the Committee shall be
subject to the charter of the Committee as approved by the Board.

 

12.2                           Action by the Committee.  Each member of the Committee is entitled to,
in good faith, rely or act upon any report or other information furnished to
that member by any officer or other employee of the Company or any Subsidiary,
the Company’s independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to assist
in the administration of the Plan.

 

12.3                           Authority of Committee.  Subject to any specific designation in the
Plan, the Committee has the exclusive power, authority and discretion to:

 

19

 

(a)                                  Designate
Participants to receive Awards;

 

(b)                                 Determine the
type or types of Awards to be granted to each Participant;

 

(c)                                  Determine the
number of Awards to be granted and the number of shares of Stock to which an
Award will relate;

 

(d)                                 Determine the
terms and conditions of any Award granted pursuant to the Plan, including, but
not limited to, the exercise price, grant price, or purchase price, any reload
provision, any restrictions or limitations on the Award, any schedule for lapse
of forfeiture restrictions or restrictions on the exercisability of an Award,
and accelerations or waivers thereof, any provisions related to non-competition
and recapture of gain on an Award, based in each case on such considerations as
the Committee in its sole discretion determines; provided, however, that the Committee shall not have the
authority to accelerate the vesting or waive the forfeiture of any
Performance-Based Awards;

 

(e)                                  Determine
whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Stock,
other Awards, or other property, or an Award may be canceled, forfeited, or
surrendered;

 

(f)                                    Prescribe the
form of each Award Agreement, which need not be identical for each Participant;

 

(g)                                 Decide all
other matters that must be determined in connection with an Award;

 

(h)                                 Establish,
adopt, or revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;

 

(i)                                     Interpret the
terms of, and any matter arising pursuant to, the Plan or any Award Agreement;
and

 

(j)                                     Make all other
decisions and determinations that may be required pursuant to the Plan or as
the Committee deems necessary or advisable to administer the Plan.

 

12.4                           Decisions Binding.  The
Committee’s interpretation of the Plan, any Awards granted pursuant to the
Plan, any Award Agreement and all decisions and determinations by the Committee
with respect to the Plan are final, binding, and conclusive on all parties.

 

12.5                           Delegation of
Authority.  To the
extent permitted by applicable law, the Committee may from time to time
delegate to a committee of one or more members of the Board or one or more
officers of the Company the authority to grant or amend Awards to Participants
other than (a) senior executives of the Company who are subject to Section 16
of the Exchange Act, (b) Covered Employees, or (c) officers of the
Company (or members of the Board) to whom authority to grant or amend Awards
has been delegated hereunder.  Any
delegation hereunder shall be subject to the restrictions and limits that the
Committee specifies at the time of such 

 

20

 

delegation, and the Committee may at any time
rescind the authority so delegated or appoint a new delegatee.  At all times, the delegatee appointed under
this Section 12.5 shall serve in such capacity at the pleasure of the
Committee.

 

ARTICLE 13.

 

EFFECTIVE AND EXPIRATION
DATE

 

13.1                           Effective Date.  The Plan is
effective as of the date the Plan is approved by the Company’s stockholders
(the “Effective Date”).  The Plan
will be deemed to be approved by the stockholders if it receives the
affirmative vote of the holders of a majority of the shares of stock of the
Company in accordance with applicable law and the applicable provisions of the
Company’s bylaws.

 

13.2                           Expiration Date.  The
Plan will expire on, and no Award may be granted pursuant to the Plan after,
the tenth anniversary of the date the Plan is approved by the Board.  Any Awards that are outstanding on the tenth
anniversary of the Effective Date shall remain in force according to the terms
of the Plan and the applicable Award Agreement.

 

ARTICLE 14.

 

AMENDMENT, MODIFICATION,
AND TERMINATION

 

14.1                           Amendment, Modification, and Termination.  Subject to Section 15.14 hereof, with
the approval of the Board, at any time and from time to time, the Committee may
terminate, amend or modify the Plan; provided,
however, that (a) to the extent necessary and desirable to
comply with any applicable law, regulation, or stock exchange rule, the Company
shall obtain stockholder approval of any Plan amendment in such a manner and to
such a degree as required, and (b) stockholder approval shall be required
for any amendment to the Plan that (i) increases the number of shares
available under the Plan (other than any adjustment as provided by Article 11
hereof), (ii) permits the Committee to grant Options with an exercise
price that is below Fair Market Value on the date of grant, or (iii) permits
the Committee to extend the exercise period for an Option beyond ten years from
the date of grant.  Notwithstanding any
provision in this Plan to the contrary, absent approval of the stockholders of
the Company, no Option may be amended to reduce the per share exercise price of
the shares subject to such Option below the per share exercise price as of the
date the Option is granted and, except as permitted by Article 11 hereof,
no Option may be granted in exchange for, or in connection with, the
cancellation or surrender of an Option having a higher per share exercise
price.

 

14.2                           Awards Previously Granted.  Except with respect to amendments made
pursuant to Section 15.14 hereof, no termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted pursuant to the Plan without the prior written consent of
the Participant.

 

21

 

ARTICLE 15.

GENERAL PROVISIONS

 

15.1                           No Rights to Awards.  No
Eligible Individual or other person shall have any claim to be granted any
Award pursuant to the Plan, and neither the Company nor the Committee is
obligated to treat Eligible Individuals, Participants or any other persons
uniformly.

 

15.2                           No Stockholders Rights.  Except as otherwise provided herein, a
Participant shall have none of the rights of a stockholder with respect to
shares of Stock covered by any Award until the Participant becomes the record
owner of such shares of Stock.

 

15.3                           Withholding.  The Company
or any Subsidiary shall have the authority and the right to deduct or withhold,
or require a Participant to remit to the Company, an amount sufficient to
satisfy federal, state, local and foreign taxes (including the Participant’s
employment tax obligations) required by law to be withheld with respect to any
taxable event concerning a Participant arising as a result of this Plan.  The Committee may in its discretion and in
satisfaction of the foregoing requirement allow a Participant to elect to have
the Company withhold shares of Stock otherwise issuable under an Award (or
allow the return of shares of Stock) having a Fair Market Value equal to the
sums required to be withheld.  Notwithstanding
any other provision of the Plan, the number of shares of Stock which may be
withheld with respect to the issuance, vesting, exercise or payment of any
Award (or which may be repurchased from the Participant of such Award within
six months (or such other period as may be determined by the Committee) after
such shares of Stock were acquired by the Participant from the Company) in
order to satisfy the Participant’s federal, state, local and foreign income and
payroll tax liabilities with respect to the issuance, vesting, exercise or
payment of the Award shall be limited to the number of shares which have a Fair
Market Value on the date of withholding or repurchase equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates for
federal, state, local and foreign income tax and payroll tax purposes that are
applicable to such supplemental taxable income.

 

15.4                           No Right to Employment or Services.  Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant’s employment or services at any time,
nor confer upon any Participant any right to continue in the employ or service
of the Company or any Subsidiary.

 

15.5                           Unfunded Status of Awards.  The Plan is intended to be an “unfunded” plan
for incentive compensation.  With respect
to any payments not yet made to a Participant pursuant to an Award, nothing
contained in the Plan or any Award Agreement shall give the Participant any rights
that are greater than those of a general creditor of the Company or any
Subsidiary.

 

15.6                           Indemnification.  To
the extent allowable pursuant to applicable law, each member of the Committee
or of the Board shall be indemnified and held harmless by the Company from any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by such member in connection with or resulting from any claim, action,
suit, or 

 

22

 

proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action or failure to act
pursuant to the Plan and against and from any and all amounts paid by him or
her in satisfaction of judgment in such action, suit, or proceeding against him
or her; provided he or she gives
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 pursuant to the Company’s Certificate of
Incorporation or bylaws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.

 

15.7                           Relationship to Other Benefits.  No payment pursuant to the Plan shall be
taken into account in determining any benefits pursuant to any pension,
retirement, savings, profit sharing, group insurance, welfare or other benefit
plan of the Company or any Subsidiary except to the extent otherwise expressly
provided in writing in such other plan or an agreement thereunder.

 

15.8                           Expenses.  The
expenses of administering the Plan shall be borne by the Company and its
Subsidiaries.

 

15.9                           Titles and Headings.  The
titles and headings of the Sections in the Plan are for convenience of
reference only and, in the event of any conflict, the text of the Plan, rather
than such titles or headings, shall control.

 

15.10                     Fractional Shares.  No
fractional shares of Stock shall be issued and the Committee shall determine,
in its discretion, whether cash shall be given in lieu of fractional shares or
whether such fractional shares shall be eliminated by rounding up or down as
appropriate.

 

15.11                     Limitations
Applicable to Section 16 Persons.  Notwithstanding any other provision of the
Plan, the Plan, and any Award granted or awarded to any Participant who is then
subject to Section 16 of the Exchange Act, shall be subject to any
additional limitations set forth in any applicable exemptive rule under Section 16
of the Exchange Act (including any amendment to Rule 16b-3 under the
Exchange Act) that are requirements for the application of such exemptive
rule.  To the extent permitted by
applicable law, the Plan and Awards granted or awarded hereunder shall be
deemed amended to the extent necessary to conform to such applicable exemptive
rule.

 

15.12                     Government and Other Regulations.  The obligation of the Company to make payment
of awards in Stock or otherwise shall be subject to all applicable laws, rules,
and regulations, and to such approvals by government agencies as may be
required.  The Company shall be under no
obligation to register pursuant to the Securities Act, as amended, any of the
shares of Stock paid pursuant to the Plan. 
If the shares paid pursuant to the Plan may in certain circumstances be
exempt from registration pursuant to the Securities Act, as amended, the
Company may restrict the transfer of such shares in such manner as it deems
advisable to ensure the availability of any such exemption.

 

23

 

15.13                     Governing Law.  The Plan
and all Award Agreements shall be construed in accordance with and governed by
the laws of the State of California.

 

15.14                     Section 409A.  To the extent that the Committee determines
that any Award granted under the Plan is subject to Section 409A of the
Code, the Award Agreement evidencing such Award shall incorporate the terms and
conditions required by Section 409A of the Code.  To the extent applicable, the Plan and Award
Agreements shall be interpreted in accordance with Section 409A of the
Code and Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the Effective Date.  Notwithstanding any provision of the Plan to
the contrary, in the event that following the Effective Date the Committee
determines that any Award may be subject to Section 409A of the Code and
related Department of Treasury guidance (including such Department of Treasury
guidance as may be issued after the Effective Date), the Committee may adopt
such amendments to the Plan and the applicable Award Agreement or adopt other
policies and procedures (including amendments, policies and procedures with
retroactive effect), or take any other actions, that the Committee determines
are necessary or appropriate to (a) exempt the Award from Section 409A
of the Code and/or preserve the intended tax treatment of the benefits provided
with respect to the Award, or (b) comply with the requirements of Section 409A
of the Code and related Department of Treasury guidance.

 

*  *  * 
*  *

 

I
hereby certify that the foregoing Plan was duly adopted by the Board of Directors
of Accuray Incorporated on January 15, 2007.

 

*  *  * 
*  *

 

I
hereby certify that the foregoing Plan was approved by the stockholders of
Accuray Incorporated on January 31, 2007.

 

*  *  * 
*  *

 

I
hereby certify that Board of Directors of Accuray Incorporated amended the
foregoing Plan to include Section 10.7 and such amendment was approved on August 24,
2010.

 

 

	
   

  	
  /s/ Darren J. Milliken

  
	
   

  	
  Corporate Secretary —
  Darren J. Milliken

  

 

 

24

 

ACCURAY INCORPORATED

2007 INCENTIVE AWARD PLAN

 

STOCK OPTION GRANT NOTICE AND 

STOCK OPTION AGREEMENT

 

Accuray
Incorporated, a Delaware corporation (the “Company”), pursuant
to its 2007 Incentive Award Plan (the “Plan”), hereby
grants to the holder listed below (“Participant”), an
option to purchase the number of shares of the Company’s common stock (“Stock”), set forth below (the “Option”).  This
Option is subject to all of the terms and conditions set forth herein and in
the Stock Option Agreement attached hereto as Exhibit A (the “Stock Option Agreement”) and the
Plan, which are incorporated herein by reference.  Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Grant Notice
and the Stock Option Agreement.

 

	
  Participant:

  	
   

  
	
   

  	
   

  
	
  Grant
  Date:

  	
   

  
	
   

  	
   

  
	
  Exercise
  Price per Share:

  	
   

  
	
   

  	
   

  
	
  Total
  Exercise Price:

  	
   

  
	
   

  	
   

  
	
  Total
  Number of Shares Subject to the Option:

  	
   

  
	
   

  	
   

  
	
  Expiration
  Date:*

  	
   

  

 

	
   

  	
  *
  Or three months after termination of
  employment/services; Or one year after disability or death.

  
	
   

  	
   

  
	
  Type
  of Option:

  	
   

  
	
   

  	
   

  
	
  Vesting
  Schedule:

  	
  The
  Option shall vest and become exercisable with respect to twenty-five percent
  (25%) of the shares of Stock subject thereto on the first anniversary of the
  Grant Date and with respect to an additional 1/48th of the shares of Stock subject thereto on
  each monthly anniversary thereafter.

  

 

By
his or her signature, the Participant agrees to be bound by the terms and
conditions of the Plan, the Stock Option Agreement and this Grant Notice.  The Participant has reviewed the Stock Option
Agreement, the Plan and this Grant Notice in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Grant
Notice and fully understands all provisions of this Grant Notice, the Stock
Option Agreement and the Plan. 
Participant hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions arising under
the Plan or relating to the Option.

 

	
  ACCURAY
  INCORPORATED

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Derek A. Bertocci

  	
   

  
	
  Title:

  	
  Chief
  Financial Officer

  	
   

  

 

 

EXHIBIT A

 

TO STOCK OPTION GRANT NOTICE

 

ACCURAY INCORPORATED STOCK OPTION AGREEMENT

 

Pursuant
to the Stock Option Grant Notice (the “Grant Notice”) to which
this Stock Option Agreement (this “Agreement”) is attached,
Accuray Incorporated, a Delaware corporation (the “Company”), has
granted to the Participant an option under the Company’s 2007 Incentive Award
Plan (as amended from time to time, the “Plan”) to
purchase the number of shares of Stock indicated in the Grant Notice.

 

ARTICLE I.

GENERAL

 

1.1                                 Defined Terms.  Wherever the following terms are used in this
Agreement they shall have the meanings specified below, unless the context
clearly indicates otherwise.  Capitalized
terms not specifically defined herein shall have the meanings specified in the
Plan and the Grant Notice.

 

(a)                                  “Termination of Consultancy” shall
mean the time when the engagement of the Participant as a Consultant to the
Company or a Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, by resignation, discharge, death or
retirement, but excluding:  (a) terminations
where there is a simultaneous employment or continuing employment of the
Participant by the Company or any Subsidiary, and (b) terminations where
there is a simultaneous re-establishment of a consulting relationship or
continuing consulting relationship between the Participant and the Company or
any Subsidiary.  The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Consultancy, including, but not by way of
limitation, the question of whether a particular leave of absence constitutes a
Termination of Consultancy.  Notwithstanding
any other provision of the Plan, the Company or any Subsidiary has an absolute
and unrestricted right to terminate a Consultant’s service at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.

 

(b)                                 “Termination of Directorship” shall
mean the time when the Participant, if he or she is or becomes an Independent
Director, ceases to be a Director for any reason, including, but not by way of
limitation, a termination by resignation, failure to be elected, death or
retirement.  The Board, in its sole and
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship with respect to Independent Directors.

 

(c)                                  “Termination of Employment” shall
mean the time when the employee-employer relationship between the Participant
and the Company or any Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding:  (a) terminations where there is a
simultaneous reemployment or continuing employment of the Participant by the
Company or any Subsidiary, and (b) terminations where there is a
simultaneous establishment of a consulting relationship or continuing consulting
relationship between the Participant and the Company or any Subsidiary.  The Committee, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination
of Employment, including, but not by way of limitation, the question of whether
a particular leave of absence constitutes a Termination of Employment;
provided, however, that, if this Option is an Incentive Stock Option, unless
otherwise determined by the Committee in its discretion, a leave of absence, change
in status from an employee to an independent contractor or other change in the
employee-employer 

 

A-1

 

relationship shall constitute a Termination of
Employment if, and to the extent that, such leave of absence, change in status
or other change interrupts employment for the purposes of Section 422(a)(2) of
the Code and the then applicable regulations and revenue rulings under said
Section.

 

(d)                                 “Termination of Services” shall mean
the Participant’s Termination of Consultancy, Termination of Directorship or
Termination of Employment, as applicable.

 

1.2                                 Incorporation
of Terms of Plan.  The Option
is subject to the terms and conditions of the Plan which are incorporated
herein by reference.  In the event of any
inconsistency between the Plan and this Agreement, the terms of the Plan shall
control.

 

ARTICLE II.

GRANT OF OPTION

 

2.1                                 Grant of Option.  In consideration of the Participant’s past
and/or continued employment with or service to the Company or a Subsidiary and
for other good and valuable consideration, effective as of the Grant Date set
forth in the Grant Notice (the “Grant Date”), the
Company irrevocably grants to the Participant the Option to purchase any part
or all of an aggregate of the number of shares of Stock set forth in the Grant
Notice, upon the terms and conditions set forth in the Plan and this
Agreement.  Unless designated as a
Non-Qualified Stock Option in the Grant Notice, the Option shall be an
Incentive Stock Option to the maximum extent permitted by law.

 

2.2                                 Exercise Price.  The exercise price of the shares of Stock
subject to the Option shall be as set forth in the Grant Notice, without
commission or other charge; provided,
however, that the price per share
of the shares of Stock subject to the Option shall not be less than 100% of the
Fair Market Value of a share of Stock on the Grant Date.  Notwithstanding the foregoing, if this Option
is designated as an Incentive Stock Option and the Participant owns (within the
meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any “subsidiary
corporation” of the Company or any “parent corporation” of the Company (each
within the meaning of Section 424 of the Code), the price per share of the
shares of Stock subject to the Option shall not be less than 110% of the Fair
Market Value of a share of Stock on the Grant Date.

 

2.3                                 Consideration
to the Company.  In
consideration of the grant of the Option by the Company, the Participant agrees
to render faithful and efficient services to the Company or any
Subsidiary.  Nothing in the Plan or this
Agreement shall confer upon the Participant any right to continue in the employ
or service of the Company or any Subsidiary or shall interfere with or restrict
in any way the rights of the Company and its Subsidiaries, which rights are
hereby expressly reserved, to discharge or terminate the services of the
Participant at any time for any reason whatsoever, with or without Cause, except
to the extent expressly provided otherwise in a written agreement between the
Company or a Subsidiary and the Participant.

 

ARTICLE III.

PERIOD OF EXERCISABILITY

 

3.1                                 Commencement of
Exercisability.

 

(a)                                  Subject to
Sections 3.2, 3.3, 5.11 and 5.14, the Option shall become vested and
exercisable in such amounts and at such times as are set forth in the Grant
Notice.

 

A-2

 

(b)                                 No portion of
the Option which has not become vested and exercisable at the date of the
Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy shall thereafter become vested and exercisable,
except as may be otherwise provided by the Committee or as set forth in a
written agreement between the Company and the Participant.

 

3.2                                 Duration of
Exercisability.  The
installments provided for in the vesting schedule set forth in the Grant Notice
are cumulative.  Each such installment
which becomes vested and exercisable pursuant to the vesting schedule set forth
in the Grant Notice shall remain vested and exercisable until it becomes
unexercisable under Section 3.3.

 

3.3                                 Expiration of
Option.  The Option may not be
exercised to any extent by anyone after the first to occur of the following
events:

 

(a)                                  The expiration
of ten years from the Grant Date;

 

(b)                                 If this Option
is designated as an Incentive Stock Option and the Participant owned (within
the meaning of Section 424(d) of the Code), at the time the Option
was granted, more than 10% of the total combined voting power of all classes of
stock of the Company or any “subsidiary corporation” of the Company or any “parent
corporation” of the Company (each within the meaning of Section 424 of the
Code), the expiration of five years from the Grant Date;

 

(c)                                  The expiration
of three-months from the date of the Participant’s Termination of Services,
unless such termination occurs by reason of the Participant’s death or
Disability; or

 

(d)                                 The expiration
of one year from the date of the Participant’s Termination of Services by
reason of the Participant’s death or Disability.

 

The
Participant acknowledges that an Incentive Stock Option exercised more that
three months after the Participant’s Termination of Employment, other than by
reason of death or Disability, will be taxed as a Non-Qualified Stock Option.

 

3.4                                 Special Tax
Consequences.  The
Participant acknowledges that, to the extent that the aggregate Fair Market
Value (determined as of the time the Option is granted) of all shares of Stock
with respect to which Incentive Stock Options, including the Option (if
applicable), are exercisable for the first time by the Participant in any
calendar year exceeds $100,000, the Option and such other options shall be
Non-Qualified Stock Options to the extent necessary to comply with the
limitations imposed by Section 422(d) of the Code.  The Participant further acknowledges that the
rule set forth in the preceding sentence shall be applied by taking the
Option and other “incentive stock options” into account in the order in which
they were granted, as determined under Section 422(d) of the Code and
the Treasury Regulations thereunder.

 

ARTICLE IV.

EXERCISE OF OPTION

 

4.1                                 Person Eligible
to Exercise.  Except as
provided in Section 5.2(b), during the lifetime of the Participant, only
the Participant may exercise the Option or any portion thereof.  After the death of the Participant, any
exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.3, be exercised by the Participant’s
personal representative or by any person empowered to do so under the deceased
the Participant’s will or under the then applicable laws of descent and
distribution.

 

A-3

 

4.2                                 Partial
Exercise.  Any exercisable
portion of the Option or the entire Option, if then wholly exercisable, may be
exercised in whole or in part at any time prior to the time when the Option or
portion thereof becomes unexercisable under Section 3.3.

 

4.3                                 Manner of
Exercise.  The Option,
or any exercisable portion thereof, may be exercised solely by delivery to the
Secretary of the Company (or any third party administrator or other person or
entity designated by the Company) of all of the following prior to the time
when the Option or such portion thereof becomes unexercisable under Section 3.3:

 

(a)                                  An Exercise
Notice in a form specified by the Committee, stating that the Option or portion
thereof is thereby exercised, such notice complying with all applicable rules established
by the Committee;

 

(b)                                 The receipt by
the Company of full payment for the shares of Stock with respect to which the
Option or portion thereof is exercised, including payment of any applicable
withholding tax, which may be in one or more of the forms of consideration
permitted under Section 4.4;

 

(c)                                  Any other
written representations as may be required in the Committee’s reasonable
discretion to evidence compliance with the Securities Act or any other
applicable law rule, or regulation; and

 

(d)                                 In the event the
Option or portion thereof shall be exercised pursuant to Section 4.1 by
any person or persons other than the Participant, appropriate proof of the
right of such person or persons to exercise the Option.

 

Notwithstanding
any of the foregoing, the Company shall have the right to specify all
conditions of the manner of exercise, which conditions may vary by country and
which may be subject to change from time to time.

 

4.4                                 Method of
Payment.  Payment of the exercise price
shall be by any of the following, or a combination thereof, at the election of
the Participant:

 

(a)                                  Cash;

 

(b)                                 Check;

 

(c)                                  With the
consent of the Committee, delivery of a notice that the Participant has placed
a market sell order with a broker with respect to shares of Stock then issuable
upon exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the aggregate exercise price; provided,
that payment of such proceeds is then made to the Company at such time as may
be required by the Company, but in any event not later than the settlement of
such sale;

 

(d)                                 With the
consent of the Committee, surrender of other shares of Stock which have a fair
market value on the date of surrender equal to the aggregate exercise price of
the shares of Stock with respect to which the Option or portion thereof is
being exercised;

 

(e)                                  With the
consent of the Committee, surrendered shares of Stock issuable or transferable
upon the exercise of the Option having a fair market value on the date of
exercise equal to the aggregate exercise price of the shares of Stock with
respect to which the Option or portion thereof is being exercised; or

 

A-4

 

(f)                                    With the
consent of the Committee, property of any kind which constitutes good and
valuable consideration.

 

4.5                                 Conditions to
Issuance of Stock Certificates.  The shares of Stock deliverable upon the
exercise of the Option, or any portion thereof, may be either previously authorized
but unissued shares of Stock or issued shares of Stock which have then been
reacquired by the Company.  Such shares
of Stock shall be fully paid and nonassessable. 
The Company shall not be required to issue or deliver any shares of
Stock purchased upon the exercise of
the Option or portion thereof prior to fulfillment of all of the following
conditions:

 

(a)                                  The admission
of such shares of Stock to listing on all stock exchanges on which such Stock
is then listed;

 

(b)                                 The completion
of any registration or other qualification of such shares of Stock under any
state or federal law or under rulings or regulations of the Securities and
Exchange Commission or of any other governmental regulatory body, which the
Committee shall, in its absolute discretion, deem necessary or advisable;

 

(c)                                  The obtaining
of any approval or other clearance from any state or federal governmental
agency which the Committee shall, in its absolute discretion, determine to be
necessary or advisable;

 

(d)                                 The receipt by
the Company of full payment for such shares of Stock, including payment of any
applicable withholding tax, which may be in one or more of the forms of
consideration permitted under Section 4.4; and

 

(e)                                  The lapse of
such reasonable period of time following the exercise of the Option as the
Committee may from time to time establish for reasons of administrative
convenience.

 

4.6                                 Rights as
Stockholder.  The holder
of the Option shall not be, nor have any of the rights or privileges of, a
stockholder of the Company in respect of any shares of Stock purchasable upon
the exercise of any part of the Option unless and until such shares of Stock
shall have been issued by the Company to such holder (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company).  No adjustment
will be made for a dividend or other right for which the record date is prior
to the date the shares of Stock are issued, except as provided in Section 11.1
of the Plan.

 

ARTICLE V.

OTHER PROVISIONS

 

5.1                                 Administration.  The Committee shall have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules.  All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon Participant, the Company and all other interested persons.  No member of the Committee or the Board shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan, this Agreement or the Option.

 

A-5

 

5.2                                 Option Not
Transferable.

 

(a)                                  Subject to Section 5.2(b),
the Option may not be sold, pledged, assigned or transferred in any manner
other than by will or the laws of descent and distribution, unless and until
the shares of Stock underlying the Option have been issued, and all
restrictions applicable to such shares of Stock have lapsed.  Neither the Option nor any interest or right
therein shall be liable for the debts, contracts or engagements of Participant
or his or her successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other legal
or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect,
except to the extent that such disposition is permitted by the preceding
sentence.

 

(b)                                 Notwithstanding
any other provision in this Agreement, with the consent of the Committee, the
Participant may transfer the Option (or any portion thereof) to any one or more
Permitted Transferees (as defined below), subject to the following terms and
conditions:  (i) any portion of the
Option transferred to a Permitted Transferee shall not be assignable or transferable
by the Permitted Transferee other than by will or the laws of descent and
distribution; (ii) any portion of the Option which is transferred to a
Permitted Transferee shall continue to be subject to all the terms and
conditions of the Option as applicable to the Participant (other than the
ability to further transfer the Option); and (iii) the Participant and the
Permitted Transferee shall execute any and all documents requested by the
Committee, including, without limitation documents to (A) confirm the
status of the transferee as a Permitted Transferee, (B) satisfy any
requirements for an exemption for the transfer under applicable federal and
state securities laws and (C) evidence the transfer.  For purposes of this Section 5.2(b), “Permitted
Transferee” shall mean, with respect to a Participant, any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the Participant’s household (other than a tenant or employee), a trust
in which these persons (or the Participant) control the management of assets,
charitable institutions, or trusts or other entities whose beneficiaries or
beneficial owners are these persons (or the Participant) and/or charitable
institutions, and any other entity in which these persons (or the Participant)
own more than fifty percent of the voting interests, or any other transferee
specifically approved by the Committee after taking into account any state or
federal tax or securities laws applicable to transferable Options.  Notwithstanding the foregoing, (i) in no
event shall the Option be transferable by the Participant to a third party
(other than the Company) for consideration, and (ii) no transfer of an
Incentive Stock Option will be permitted to the extent that such transfer would
cause the Incentive Stock Option to fail to qualify as an “incentive stock
option” under Section 422 of the Code.

 

5.3                                 Adjustments.  The Participant acknowledges that the Option
is subject to adjustment, modification and termination in certain events as
provided in this Agreement and Article 11 of the Plan.

 

5.4                                 Notices.  Any notice to be given under the terms of
this Agreement to the Company shall be addressed to the Company in care of the
Secretary of the Company at the address given beneath the signature of the
Company’s authorized officer on the Grant Notice, and any notice to be given to
Participant shall be addressed to Participant at the address given beneath
Participant’s signature on the Grant Notice. 
By a notice given pursuant to this Section 5.4, either party may
hereafter designate a different address for notices to be given to that
party.  Any notice which is required to
be given to Participant shall, if Participant is then deceased, be given to the
person entitled to exercise his or her Option pursuant to Section 4.1 by
written notice under this Section 5.4. 
Any notice shall be deemed duly given when sent via email or when sent
by certified mail (return receipt requested) and deposited (with 

 

A-6

 

postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.

 

5.5                                 Titles.  Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of this
Agreement.

 

5.6                                 Governing Law;
Severability.  The laws of
the State of California shall govern the interpretation, validity,
administration, enforcement and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of
laws.

 

5.7                                 Conformity to
Securities Laws.  The
Participant acknowledges that the Plan and this Agreement are intended to
conform to the extent necessary with all provisions of the Securities Act and
the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, and state securities laws and
regulations.  Notwithstanding anything
herein to the contrary, the Plan shall be administered, and the Option is
granted and may be exercised, only in such a manner as to conform to such laws,
rules and regulations.  To the
extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and
regulations.

 

5.8                                 Amendments,
Suspension and Termination.  To the extent permitted by the Plan, this
Agreement may be wholly or partially amended or otherwise modified, suspended
or terminated at any time or from time to time by the Committee or the Board, provided, that, except as may otherwise
be provided by the Plan, no amendment, modification, suspension or termination
of this Agreement shall adversely effect the Option in any material way without
the prior written consent of the Participant.

 

5.9                                 Successors and
Assigns.  The Company may assign any of
its rights under this Agreement to single or multiple assignees, and this Agreement
shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer
herein set forth in Section 5.2, this Agreement shall be binding upon
Participant and his or her heirs, executors, administrators, successors and
assigns.

 

5.10                           Notification of
Disposition.  If this
Option is designated as an Incentive Stock Option, Participant shall give
prompt notice to the Company of any disposition or other transfer of any shares
of Stock acquired under this Agreement if such disposition or transfer is made (a) within
two years from the Grant Date with respect to such shares of Stock or (b) within
one year after the transfer of such shares of Stock to Participant.  Such notice shall specify the date of such
disposition or other transfer and the amount realized, in cash, other property,
assumption of indebtedness or other consideration, by Participant in such
disposition or other transfer.

 

5.11                           Limitations
Applicable to Section 16 Persons.  Notwithstanding any other provision of the
Plan or this Agreement, if Participant is subject to Section 16 of the
Exchange Act, the Plan, the Option and this Agreement shall be subject to any
additional limitations set forth in any applicable exemptive rule under Section 16
of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange
Act) that are requirements for the application of such exemptive rule.  To the extent permitted by applicable law,
this Agreement shall be deemed amended to the extent necessary to conform to
such applicable exemptive rule

 

5.12                           Entire
Agreement.  The Plan,
the Grant Notice and this Agreement (including all Exhibits thereto) constitute
the entire agreement of the parties and supersede in their entirety all prior
undertakings and agreements of the Company and Participant with respect to the
subject matter hereof.

 

A-7

 

5.13                           Section 409A.  This Option is not intended to constitute “nonqualified
deferred compensation” within the meaning of Section 409A of the Code (“Section 409A”).  However, notwithstanding any other provision
of the  Plan, this Agreement or the Grant
Notice, if at any time the Committee determines that the Option (or any portion
thereof) may be subject to Section 409A, the Committee shall have the
right, in its sole discretion, to adopt such amendments to the Plan, this
Agreement or the Grant Notice or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, as the Committee determines are necessary or appropriate either for
the Option to be exempt from the application of Section 409A or to comply
with the requirements of Section 409A.

 

A-8

 

 

2007 INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT GRANT NOTICE

 

Accuray
Incorporated, a Delaware corporation (the “Company”),
pursuant to its 2007 Incentive Award Plan (the “Plan”),
hereby grants to the individual listed below (“Participant”),
the following award of Restricted Stock Units (“RSUs”).  This Restricted Stock Unit is subject to all
of the terms and conditions set forth herein and in the Restricted Stock Unit
Agreement attached hereto as Appendix A (the “Restricted
Stock Unit Agreement”) and in the Plan, each of which are
incorporated herein by reference.  All
capitalized terms used and not otherwise defined in this Grant Notice or the
Restricted Stock Unit Agreement shall have the meanings ascribed to such terms
in the Plan unless the context clearly indicates otherwise.

 

Participant:

 

Grant Date:

 

Number of RSUs:

 

Standard Vesting Schedule:  Subject to the Participant’s continued
service as an Employee, Consultant or Director through the applicable vesting
date (each such date, a “Vesting Date”),
the RSUs shall vest as follows:

 

(i)                                     Twenty-five
(25%) of the RSUs shall vest on the first anniversary of the Grant Date;

(ii)                                  Twenty-five
(25%) of the RSUs shall vest on the second anniversary of the Grant Date;

(iii)                               Twenty-five
(25%) of the RSUs shall vest on the third anniversary of the Grant Date; and

(iv)                              Twenty-five
(25%) of the RSUs shall vest on the fourth anniversary of the Grant Date.

 

Termination
of RSUs:  In the event that the
Participant ceases to be an Employee, Consultant or Independent Director for
any reason prior to the applicable Vesting Date, all RSUs that have not vested
as of the date of such termination shall thereupon automatically be forfeited
by the Participant as of such date of termination without payment of any
consideration therefor.

 

By
his or her signature and the Company’s signature below, the Participant agrees
to be bound by the terms and conditions of the Plan, the Restricted Stock Unit
Agreement and this Grant Notice. 
Participant has reviewed the Restricted Stock Unit Agreement, the Plan
and this Grant Notice in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Grant Notice and fully understands
all provisions of this Grant Notice, the Restricted Stock Unit Agreement and the
Plan.  Participant hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Plan, this Grant Notice or the
Restricted Stock Unit Agreement.

 

 

	
  ACCURAY INCORPORATED:

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Derek A. Bertocci

  	
   

  
	
  Title:

  	
  Chief Financial Officer

  	
   

  

 

	
  RSU AGREEMENT STD

  	
   

  	
  ACCURAY CONFIDENTIAL

  

 

1

 

 

APPENDIX A

TO RESTRICTED STOCK UNIT GRANT NOTICE

 

RESTRICTED STOCK UNIT AGREEMENT

 

1.                                       Grant.  Pursuant to the Restricted Stock Unit Grant
Notice (the “Grant Notice”) to which this
Restricted Stock Unit Agreement (the “Agreement”)
is attached, Accuray Incorporated, a Delaware corporation (the “Company”), has granted to the
Participant an award of %%TOTAL_SHARES_GRANTED%-%
RSUs under the Company’s 2007 Incentive Award Plan (the “Plan”)
as set forth in the Grant Notice, subject to all of the terms and conditions
contained in this Agreement and the Plan. 
All capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Plan and the Grant Notice unless the
context clearly indicates otherwise.

 

2.                                       Vesting and
Termination.    The RSUs
shall vest and shall terminate as set forth in the Grant Notice.  In the event of a termination of the
Participant’s status as an Employee, Consultant or Independent Director for any
reason prior to the applicable Vesting Date, all RSUs that have not vested as
of the date of such termination shall thereupon automatically be forfeited by
the Participant as of such date of termination without payment of any
consideration therefor.  RSUs which are
not vested as of the date of such termination shall not thereafter become
vested.

 

3.                                       RSUs.  As of the applicable Vesting Date, each RSU
that vests on such date shall represent the right to receive payment, in
accordance with Section 4 below, in the form of one share of Stock.  Unless and until an RSU vests, the
Participant will have no right to payment in respect of any such RSU.  Prior to actual payment in respect of any
vested RSU, such RSU will represent an unsecured obligation of the Company,
payable (if at all) only from the general assets of the Company.

 

4.                                       Payment after
Vesting; Code Section 409A.  Payment in respect of any RSUs that vest in
accordance herewith shall be made to the Participant (or in the event of the
Participant’s death, to the Participant’s estate) in whole shares of Stock as
soon as practicable after the applicable Vesting Date, but in no event later
than sixty (60) days, after such Vesting Date (for the avoidance of doubt, this
deadline is intended to comply with the “short-term deferral” exemption from Section 409A
of the Code).

 

5.                                       Tax Withholding.  The Company shall have the authority and the
right to deduct or withhold, or to require the Participant to remit to the
Company, an amount sufficient to satisfy all applicable federal, state and
local taxes (including the Participant’s employment tax obligations) required
by law to be withheld with respect to any taxable event arising in connection
with the RSUs.  Unless otherwise
determined by the Committee, the Company shall, in satisfaction of the
foregoing requirement, withhold shares of Stock otherwise issuable in respect
of any RSUs having a Fair Market Value equal to the sums required to be
withheld, and the Participant hereby agrees to such withholding of shares.

 

6.                                       Rights as
Shareholder.  Neither the
Participant nor any person claiming under or through the Participant will have
any of the rights or privileges of a shareholder of the Company in respect of
any shares of Stock that may become deliverable hereunder unless and until
certificates representing such shares of Stock shall have been issued, recorded
on the records of the Company or its transfer agents or registrars, and
delivered to the Participant or any person claiming under or through the
Participant.

 

7.                                       Non-Transferability.  Unless transferred to a Permitted Transferee
(as defined below), RSUs may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution.  For purposes of this Section 7,
“Permitted Transferee” shall mean, with respect to a Participant, 

 

	
  RSU AGREEMENT

  	
   

  	
  ACCURAY CONFIDENTIAL

  

 

2

 

certain persons or entities
related to the Participant, including but not limited to members of the
Participant’s family, charitable institutions or trusts or other entities whose
beneficiaries or beneficial owners are members of Participant’s family and/or
charitable institutions, or to such other persons or entities as may be
expressly approved by the Committee, pursuant to any such conditions and
procedures the Committee may require. 
Neither the RSUs nor any interest or right therein shall be liable for
the debts, contracts or engagements of the Participant or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except
to the extent that such disposition is permitted by the preceding sentence.

 

8.                                       Distribution of
Stock.  Notwithstanding anything
herein to the contrary, no payment shall be made under this Agreement in the
form of shares of Stock prior to the fulfillment of all of the following
conditions:  (i) the admission of
such shares to listing on all stock exchanges on which the Stock is then
listed, (ii) the completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or other governmental regulatory body,
which the Committee shall, in its sole and absolute discretion, deem necessary
and advisable, (iii) the obtaining of any approval or other clearance from
any state or federal governmental agency that the Committee shall, in its
absolute discretion, determine to be necessary or advisable and (iv) the
lapse of any such reasonable period of time following the Vesting Date as the
Committee may from time to time establish for reasons of administrative
convenience.  All certificates delivered
pursuant to this Agreement shall be subject to any stop-transfer orders and
other restrictions as the Committee deems necessary or advisable to comply with
federal, state, or local securities or other laws, rules and regulations
and the rules of any national securities exchange or automated quotation
system on which the shares of Stock are listed, quoted, or traded.  The Committee may place legends on any
certificate to reference restrictions applicable to the shares of Stock.  In addition to the terms and conditions
provided herein, the Committee may require that the Participant make such
covenants, agreements, and representations as the Committee, in its sole
discretion, deems advisable in order to comply with any such laws, regulations,
or requirements. The Committee shall have the right to require the Participant
to comply with any timing or other restrictions with respect to the settlement
of any RSUs pursuant to this Agreement, including a window-period limitation,
as may be imposed in the discretion of the Committee.  Any shares of Stock distributed pursuant to
this Agreement may consist, in whole or in part, of authorized and unissued
shares, treasury shares or shares purchased on the open market.  No fractional shares shall be issued and the
Committee shall determine, in its sole discretion, whether cash shall be given
in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up or down as appropriate.

 

9.                                       No Effect on
Employment.  Nothing in
this Agreement or in the Plan shall confer upon the Participant any right to
continue to serve as an Employee, Consultant, member of the Board or other
service provider of the Company or any of its Subsidiaries.

 

10.                                 Severability.  In the event that any provision in this
Agreement is held invalid or unenforceable, such provision will be severable
from, and such invalidity or unenforceability will not be construed to have any
effect on, the remaining provisions of this Agreement, which shall remain in
full force and effect.

 

11.                                 Tax
Consultation.  The
Participant understands that the Participant may suffer adverse tax
consequences in connection with the RSUs granted pursuant to this
Agreement.  The Participant represents
that the Participant has consulted with any tax consultants that the
Participant deems advisable in connection with the RSUs and that the
Participant is not relying on the Company for tax advice.

 

3

 

12.                                 Amendments,
Suspension and Termination.  To the extent permitted by the Plan, this
Agreement may be wholly or partially amended or otherwise modified, suspended
or terminated at any time or from time to time by the Committee or the Board.

 

13.                                 Conformity to
Securities Laws.  The
Participant acknowledges that the Plan and this Agreement are intended to
conform to the extent necessary with all provisions of the Securities Act and
the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, and all applicable state
securities laws and regulations. 
Notwithstanding anything herein to the contrary, the Plan shall be
administered, and the RSUs are granted, only in such a manner as to conform to
such laws, rules and regulations. 
To the extent permitted by applicable law, the Plan and this Agreement
shall be deemed amended to the extent necessary to conform to such laws, rules and
regulations.

 

14.                                 Limitations
Applicable to Section 16 Persons.  Notwithstanding any other provision of the
Plan or this Agreement, if the Participant becomes subject to Section 16
of the Exchange Act, the Plan, the RSUs and this Agreement shall be subject to
any additional limitations set forth in any applicable exemptive rule under
Section 16 of the Exchange Act (including any amendment to Rule 16b-3
of the Exchange Act) that are requirements for the application of such
exemptive rule.  To the extent permitted
by applicable law, this Agreement shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.

 

15.                                 Code Section 409A.  The RSUs are not intended to constitute or
provide for “nonqualified deferred compensation” within the meaning of Section 409A
of the Code (“Section 409A”).  However, notwithstanding any other provision
of the Plan, this Agreement or the Grant Notice, if at any time the Committee
determines that the RSUs (or any portion thereof) may be subject to Section 409A,
the Committee shall have the right, in its sole discretion, to adopt such
amendments to the Plan, this Agreement or the Grant Notice or adopt other
policies and procedures (including amendments, policies and procedures with
retroactive effect), or take any other actions, as the Committee determines are
necessary or appropriate either for the RSUs to be exempt from the application
of Section 409A or to comply with the requirements of Section 409A.  Nothing herein shall, or shall be construed
so as to, limit the generality of Section 15.14 of the Plan.

 

16.                                 Adjustments.  The Participant acknowledges that the RSUs
are subject to modification and termination in certain events as provided in
this Agreement and Article 11 of the Plan.

 

17.                                 Notices.  Notices required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal
delivery or upon deposit in the United States mail by certified mail, with
postage and fees prepaid, addressed to the Participant to his or her address
shown in the Company records, and to the Company at its principal executive
office.

 

18.                                 Successors and
Assigns.  The Company may assign any of
its rights under this Agreement to single or multiple assignees, and this
Agreement shall inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on
transfer contained herein, this Agreement shall be binding upon the Participant
and his or her heirs, executors, administrators, successors and assigns.

 

19.                                 Governing Law.  The laws of the State of California shall
govern the interpretation, validity, administration, enforcement and
performance of the terms of this Agreement regardless of the law that might be
applied under principles of conflicts of laws.

 

Captions.  Captions provided herein are for convenience
only and are not to serve as a basis for interpretation or construction of this
Agreement.

 

4Exhibit
10.30

 

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

 

 

STRATEGIC ALLIANCE AGREEMENT

 

 

between

 

 

ACCURAY INCORPORATED

 

 

and

 

 

SIEMENS AKTIENGESELLSCHAFT

 

 

Dated as of June 8, 2010

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II. CAYMAN DEVELOPMENT AND DISTRIBUTION

  	
  1

  
	
  2.1

  	
  Development of Cayman

  	
  1

  
	
   

  	
  (a)

  	
  General

  	
  1

  
	
   

  	
  (b)

  	
  Resources Made Available by Siemens

  	
  2

  
	
   

  	
  (c)

  	
  Resources Made Available by Accuray

  	
  3

  
	
   

  	
  (d)

  	
  Additional Resources

  	
  3

  
	
   

  	
  (e)

  	
  Cost of Development

  	
  4

  
	
  2.2

  	
  Development of Cayman 1

  	
  4

  
	
   

  	
  (a)

  	
  Cayman 1 Initial Plan

  	
  4

  
	
   

  	
  (b)

  	
  Cayman 1 Detailed Plan and Functional Specification

  	
  4

  
	
   

  	
  (c)

  	
  Development Efforts by Accuray

  	
  4

  
	
   

  	
  (d)

  	
  Arrangement Fee

  	
  5

  
	
   

  	
  (e)

  	
  Prototype Acceptance

  	
  5

  
	
  2.3

  	
  Development of Cayman 2

  	
  6

  
	
   

  	
  (a)

  	
  Development Plan

  	
  6

  
	
   

  	
  (b)

  	
  Conditions to Completion of Development

  	
  6

  
	
   

  	
  (c)

  	
  Prototype Acceptance

  	
  7

  
	
  2.4

  	
  Regulatory Approval of Cayman
  Products

  	
  7

  
	
  2.5

  	
  Distribution of Cayman Products

  	
  7

  
	
   

  	
  (a)

  	
  Distribution by Siemens

  	
  7

  
	
   

  	
  (b)

  	
  Rights of Accuray

  	
  7

  
	
   

  	
  (c)

  	
  Advertisement of Cayman Products

  	
  8

  
	
   

  	
  (d)

  	
  Termination of Exclusivity

  	
  8

  
	
   

  	
  (e)

  	
  Termination of Distribution Rights

  	
  9

  
	
   

  	
  (f)

  	
  Accuray Distribution Rights

  	
  9

  
	
  2.6

  	
  Availability of Accuray
  Components and Interface

  	
  9

  
	
  2.7

  	
  Pricing of Accuray Components and
  the Interface

  	
  10

  
	
   

  	
  (a)

  	
  Accuray Components for the Cayman 1 Product

  	
  10

  
	
   

  	
  (b)

  	
  Accuray Components for the Cayman 2 Product

  	
  11

  
	
   

  	
  (c)

  	
  Installation for the Accuray Components and the Interface

  	
  11

  
	
  2.8

  	
  Purchase Terms and Conditions

  	
  11

  
	
  2.9

  	
  Product Labeling

  	
  11

  
	
  2.10

  	
  Product Support and Installation

  	
  11

  
	
   

  	
  (a)

  	
  Installation

  	
  11

  
	
   

  	
  (b)

  	
  Service

  	
  12

  
	
   

  	
  (c)

  	
  Training

  	
  12

  
	
  2.11

  	
  Rights to Improvements

  	
  13

  
	
   

  	
  (a)

  	
  Designated Improvements

  	
  13

  
	
   

  	
  (b)

  	
  Other Improvements

  	
  14

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Limitations

  	
  14

  
	
  2.12

  	
  Intellectual Property

  	
  14

  
	
   

  	
  (a)

  	
  Grant of Rights by Accuray

  	
  14

  
	
   

  	
  (b)

  	
  Grant of Rights by Siemens

  	
  15

  
	
   

  	
  (c)

  	
  Ownership of Inventions

  	
  15

  
	
   

  	
  (d)

  	
  Intellectual Property Covenants

  	
  19

  
	
   

  	
  (e)

  	
  Third Party Infringement

  	
  20

  
	
  2.13

  	
  {*****}

  	
  21

  
	
  2.14

  	
  Publicity of Agreement

  	
  21

  
	
   

  	
  (a)

  	
  ASTRO 2010

  	
  21

  
	
   

  	
  (b)

  	
  Legally Compelled Disclosure

  	
  21

  
	
   

  	
  (c)

  	
  Press Releases

  	
  21

  
	
   

  	
   

  
	
  ARTICLE III. DISTRIBUTION RIGHTS OF
  CYBERKNIFE SYSTEMS

  	
  21

  
	
  3.1

  	
  Distribution Rights for Multiple
  LINAC or Multi-Modality Purchases

  	
  21

  
	
  3.2

  	
  Country and Region Specific
  Distribution Rights

  	
  22

  
	
  3.3

  	
  CyberKnife Systems Distribution
  Obligations

  	
  22

  
	
   

  	
  (a)

  	
  Accuray

  	
  22

  
	
   

  	
  (b)

  	
  Siemens

  	
  22

  
	
  3.4

  	
  Determination of CyberKnife
  System Sales

  	
  23

  
	
   

  	
   

  
	
  ARTICLE IV. STEERING COMMITTEE AND
  ADVISORY COMMITTEE

  	
  23

  
	
  4.1

  	
  Composition

  	
  23

  
	
  4.2

  	
  Meetings

  	
  24

  
	
  4.3

  	
  Steering Committee Voting

  	
  24

  
	
  4.4

  	
  Steering Committee Review

  	
  24

  
	
  4.5

  	
  Expenses

  	
  25

  
	
   

  	
   

  
	
  ARTICLE V. FUTURE COLLABORATION

  	
  25

  
	
  5.1

  	
  Collaboration on Future Product
  Portfolio

  	
  25

  
	
  5.2

  	
  Process

  	
  25

  
	
   

  	
  (a)

  	
  Development of Concept

  	
  25

  
	
   

  	
  (b)

  	
  Approval and Pursuit of Concept

  	
  25

  
	
   

  	
  (c)

  	
  Negotiation Rights

  	
  25

  
	
  5.3

  	
  Intellectual Property

  	
  25

  
	
  5.4

  	
  Other Collaboration

  	
  26

  
	
  5.5

  	
  No Obligation

  	
  26

  
	
   

  	
   

  
	
  ARTICLE VI. REPRESENTATIONS AND
  WARRANTIES

  	
  26

  
	
  6.1

  	
  By Each Party

  	
  26

  
	
   

  	
  (a)

  	
  Corporate Existence and Power

  	
  26

  
	
   

  	
  (b)

  	
  Authorization and Enforcement of Obligations

  	
  27

  
	
   

  	
  (c)

  	
  Consents

  	
  27

  

 

ii

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  No Conflict

  	
  27

  
	
  6.2

  	
  By Accuray

  	
  27

  
	
  6.3

  	
  By Siemens

  	
  27

  
	
   

  	
   

  
	
  ARTICLE VII. IP INDEMNIFICATION

  	
  27

  
	
  7.1

  	
  Accuray IP Indemnification

  	
  27

  
	
  7.2

  	
  Siemens IP Indemnification

  	
  27

  
	
  7.3

  	
  IP Indemnity Claim Procedures

  	
  27

  
	
  7.4

  	
  Proportionate Allocation of
  Responsibility

  	
  28

  
	
  7.5

  	
  Injunctions

  	
  28

  
	
   

  	
  (a)

  	
  Accuray-Related Infringement Claims

  	
  28

  
	
   

  	
  (b)

  	
  Siemens-Related Infringement Claims

  	
  29

  
	
  7.6

  	
  Limitations

  	
  29

  
	
   

  	
   

  
	
  ARTICLE VIII. GENERAL INDEMNIFICATION

  	
  29

  
	
  8.1

  	
  Accuray General Indemnities

  	
  29

  
	
  8.2

  	
  Other General Indemnities

  	
  29

  
	
  8.3

  	
  Procedure

  	
  29

  
	
   

  	
   

  
	
  ARTICLE IX. ADDITIONAL AGREEMENTS

  	
  30

  
	
  9.1

  	
  Insurance

  	
  30

  
	
  9.2

  	
  Non-Solicitation

  	
  30

  
	
  9.3

  	
  Liability

  	
  30

  
	
   

  	
  (a)

  	
  Liability for Death or Injury

  	
  30

  
	
   

  	
  (b)

  	
  Limitation on Liability

  	
  31

  
	
   

  	
  (c)

  	
  Liability Cap

  	
  31

  
	
  9.4

  	
  Confidential Information

  	
  31

  
	
  9.5

  	
  Compliance with Laws

  	
  31

  
	
   

  	
  (a)

  	
  General

  	
  31

  
	
   

  	
  (b)

  	
  United States Laws

  	
  31

  
	
   

  	
  (c)

  	
  No Illegal Activity

  	
  32

  
	
  9.6

  	
  No Reverse Engineering

  	
  32

  
	
   

  	
  (a)

  	
  Accuray Covenant

  	
  32

  
	
   

  	
  (b)

  	
  Siemens Covenant

  	
  32

  
	
  9.7

  	
  Code of Conduct

  	
  32

  
	
   

  	
  (a)

  	
  Accuray Compliance

  	
  32

  
	
   

  	
  (b)

  	
  Siemens Business Conduct Guidelines

  	
  33

  
	
  9.8

  	
  Quality Assurance Agreement

  	
  33

  
	
  9.9

  	
  Taxes

  	
  33

  
	
  9.10

  	
  Contract for Works

  	
  33

  
	
   

  	
   

  
	
  ARTICLE X. TERM AND TERMINATION

  	
  33

  
	
  10.1

  	
  Term

  	
  33

  

 

iii

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Termination

  	
  33

  
	
   

  	
  (a)

  	
  Breach

  	
  33

  
	
   

  	
  (b)

  	
  Bankruptcy

  	
  34

  
	
   

  	
  (c)

  	
  Agreement of the Parties

  	
  34

  
	
  10.3

  	
  Acquisition Changes

  	
  34

  
	
   

  	
  (a)

  	
  Accuray Acquisition Change

  	
  34

  
	
   

  	
  (b)

  	
  Siemens Acquisition Change

  	
  34

  
	
   

  	
  (c)

  	
  Termination Election

  	
  34

  
	
  10.4

  	
  Effect of Expiration and
  Termination

  	
  34

  
	
   

  	
   

  
	
  ARTICLE XI.
  MISCELLANEOUS

  	
  35

  
	
  11.1

  	
  Survival of Warranties

  	
  35

  
	
  11.2

  	
  Governing Law

  	
  35

  
	
  11.3

  	
  Dispute Resolution

  	
  35

  
	
   

  	
  (a)

  	
  Executive Mediation

  	
  35

  
	
   

  	
  (b)

  	
  Arbitration Procedure

  	
  35

  
	
   

  	
  (c)

  	
  Injunctive Relief, Etc.

  	
  36

  
	
  11.4

  	
  Notices

  	
  36

  
	
  11.5

  	
  Force Majeure

  	
  37

  
	
  11.6

  	
  Assignment; Successors

  	
  37

  
	
  11.7

  	
  Severability

  	
  38

  
	
  11.8

  	
  Entire Agreement

  	
  38

  
	
  11.9

  	
  Expenses and Attorneys’ Fees

  	
  39

  
	
  11.10

  	
  Independent Contractors; No
  Partnership

  	
  39

  
	
  11.11

  	
  Amendment and Waiver

  	
  39

  
	
  11.12

  	
  No Presumption Against Drafting
  Party

  	
  39

  
	
  11.13

  	
  No Third Party Beneficiaries

  	
  39

  
	
  11.14

  	
  Affiliates

  	
  39

  
	
  11.15

  	
  Counterparts

  	
  40

  
	
  11.16

  	
  Facsimile Signatures

  	
  40

  
	
  11.17

  	
  Interpretation

  	
  40

  
	
  11.18

  	
  Waiver of Jury Trial

  	
  40

  
	
  11.19

  	
  Waiver of United States
  Jurisdiction

  	
  40

  
	
  11.20

  	
  Time of Essence

  	
  40

  

 

iv

 

STRATEGIC ALLIANCE AGREEMENT

 

THIS
STRATEGIC ALLIANCE AGREEMENT (this “Agreement”), dated as of June 8,
2010 (the “Effective Date”), is entered into between ACCURAY
INCORPORATED, a Delaware corporation (“Accuray”), and SIEMENS
AKTIENGESELLSCHAFT, a corporation formed under the laws of the Federal Republic
of Germany (“Siemens”).  Accuray
and Siemens may be referred to in this Agreement individually as a “Party”
or collectively as “Parties.”

 

RECITALS

 

A.                                   Accuray owns
certain technologies relating to the provision of radiation treatments.

 

B.                                     Siemens owns
certain technologies relating to the provision of radiation treatments and
imaging.

 

C.                                     Accuray and
Siemens wish to enter into a strategic alliance to (i) jointly develop a
product integrating each Party’s technologies, with Siemens acting as the
exclusive distributor of such product, (ii) grant Siemens distributorship
rights for Accuray’s CyberKnife System (as defined below), and (iii) create a
framework for the pursuit and implementation of other potential products and
collaboration opportunities in the future.

 

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

 

ARTICLE I.

 

DEFINITIONS

 

Capitalized
terms used but not otherwise defined in this Agreement shall have the meanings
set forth in Exhibit A.

 

ARTICLE II.

 

CAYMAN
DEVELOPMENT AND DISTRIBUTION

 

2.1                               Development of Cayman.

 

(a)                                  General.

 

(i)                                     Accuray will
manage and be responsible for the overall development of the Cayman Product,
including oversight of the day-to-day operations of such development in
accordance with the Cayman 1 Initial Plan (including the milestone plan set
forth therein) and, when approved by the Steering Committee, with the Cayman 1
Functional Specification, the Cayman 1 Detailed Plan, the Cayman 2 Functional
Specification, and the Cayman 2 Detailed Plan, the development of the Accuray
Components, and the development of the interoperability of the Cayman Product
with the TxT Couch.

 

1

 

(ii)                                  The Parties
will jointly manage and be responsible for the development of the Interface in
accordance with the Cayman 1 Initial Plan and, when approved by the Steering
Committee, with the Cayman 1 Functional Specification, the Cayman 1 Detailed
Plan, the Cayman 2 Detailed Plan, and the Cayman 2 Functional Specification.

 

(iii)                               In addition,
the Parties each shall proceed diligently with the performance of their
respective obligations under this Agreement to achieve the objectives of this
Agreement efficiently and expeditiously, subject to the terms hereof.  The Parties shall each allocate such
personnel, equipment, facilities and other resources as are reasonably
necessary to carry out their respective obligations set forth in this
Agreement, subject to the terms hereof.

 

(iv)                              Each Party
shall maintain records, in sufficient detail appropriate for legal, regulatory,
quality, or Patent purposes, which shall be complete and accurate and shall
fully and properly reflect all work done and results achieved in the
performance of the activities under this Agreement (including all data in the
form required under all applicable laws and regulations).

 

(v)                                 Upon approval
by the other Party, which shall not be unreasonably withheld or delayed, a
Party may subcontract to Third Parties the performance of certain of its
responsibilities under this Article II that are to be performed by it in the
normal course of its business; provided, however, that (1) unless
the other Party gives its prior written consent, such subcontract arrangement
shall not permit any transfer (including but not limited to any sublicense) of
any Intellectual Property of the other Party or Confidential Information of the
other Party; (2) if the other Party consents to the subcontractor’s access to
Intellectual Property or Confidential Information of the other Party, the
subcontracted party shall enter into a confidentiality agreement with the
subcontractor on such Party’s standard form confidentiality agreement, which shall
be at least as restrictive as the Confidentiality Agreement and shall contain
such additional provisions as the other Party reasonably requests to protect
any of its Intellectual Property to which such subcontractor is given access; (3)
the subcontracting Party shall supervise such subcontract work; and (4) the
subcontractor shall be in compliance in all material respects with all
requirements of applicable laws and regulations.

 

(b)                                 Resources Made
Available by Siemens.

 

(i)                                     Personnel.  Siemens shall provide and make available to
Accuray engineering and technical support personnel to assist with the
development of the Cayman Product.  The
number, availability, experience, and duties of such personnel will be determined
by Siemens in good faith, based on the Steering Committee’s assessment of the
project development requirements, the Cayman 1 Initial Plan and, when approved
by the Steering Committee, the Cayman 1 Detailed Plan, the Cayman 1 Functional
Specification, the Cayman 2 Detailed Plan, and the Cayman 2 Functional
Specification.  For the avoidance of
doubt, prior to November 1, 2010, Siemens shall have no obligation to provide
or make available any personnel in connection with the development of the
Cayman 1 Product, other than (i) qualified personnel sufficient to meet with
Accuray personnel for two Business Days to refine the Cayman 1 Functional
Specification, (ii) one engineer in the Siemens Concord, California facility
who will be available for consultation with Accuray personnel as needed for development
of the Cayman 1 Functional Specification and the architectural design for the
Cayman 1 Product (for the 

 

2

 

avoidance of doubt, such
consultation shall be no more than a few hours per week), and (iii) other
limited engineering and product management support, at such times and in such
amounts as may be determined by Siemens in good faith.

 

(ii)                                  {*****}.  Promptly after execution
of this Agreement, Siemens shall make available to Accuray, free of charge, one
{*****} (including test cells) and one TxT Couch at Siemens’ Concord,
California facility.  Accuray employees
and consultants shall have access to such systems during the business hours of
such facility.

 

(iii)                               Accuray shall
limit access to any {*****} or
TxT Couch made available pursuant to this Section 2.1(b) or Section 2.1(d) to
only those Accuray employees or consultants who are actively involved with the
development or distribution of the Cayman Products, and shall ensure that (1) each
such employee or consultant has executed Accuray’s standard form
confidentiality agreement and (2) the measures used to limit such access are at
least as restrictive as those used by Accuray with respect to its own
Confidential Information and product development efforts.

 

(c)                                  Resources Made
Available by Accuray.

 

(i)                                     Promptly after
execution of this Agreement, Accuray shall make available to Siemens, free of charge, one set of the
Accuray Components for the Cayman 1 Product, in their then-current form, at
Siemens’ Concord, California facility. 
After development of the Cayman 2 Product is initiated pursuant to Section
2.3, Accuray shall make available to Siemens one set of the Accuray Components
for the Cayman 2 Product, in their then-current form, at such facility.

 

(ii)                                  Siemens shall
limit access to any Accuray Components made available pursuant to this Section 2.1(c)
or Section 2.1(d) to only those Siemens employees or consultants who are
actively involved with the development or distribution of the Cayman Products
or any related {*****}
development projects, and shall ensure that (1) each such employee or
consultant has executed Siemens’ standard form confidentiality agreement and (2)
the measures used to limit such access are at least as restrictive as those used
by Siemens with respect to its own Confidential Information and product
development efforts.

 

(iii)                               Siemens shall
not dispose of any Accuray Components made available pursuant to this Section 2.1(c)
or Section 2.1(d) without the prior written consent of Accuray, and upon
termination of this Agreement, Siemens promptly shall return any Accuray
Components made available pursuant to this Section 2.1(c) or Section 2.1(d) in
its possession to Accuray.

 

(d)                                 Additional
Resources.  The
Steering Committee may approve a requirement that Accuray make available to
Siemens, free of charge, additional Accuray Components and/or Siemens to make
available to Accuray, free of charge, additional {*****} and/or TxT Couches to assist with the development of the
Cayman Product.  Any such approval by the
Steering Committee must be made in good faith and on a commercially reasonable
basis.  Following any such approval by
the Steering Committee, the relevant Party shall use commercially reasonable
efforts to make such materials available as soon as reasonably 

 

3

 

practicable.

 

(e)                                  Cost of
Development.  Other than
the Arrangement Fee (as defined below) and any other fees the Parties and/or
Steering Committee may agree to or approve, each Party shall bear all expenses
incurred by it or its Affiliates in connection with the development of the
Cayman Product, including, without limitation, all expenses incurred in
connection with making resources available pursuant to Sections 2.1(b), 2.1(c),
and 2.1(d).

 

2.2                               Development of Cayman 1.

 

(a)                                  Cayman 1
Initial Plan.  The Parties
have agreed upon the Cayman 1 Initial Plan as the high-level engineering plan
for development of the Cayman 1 Product. 
Such Cayman 1 Initial Plan includes estimates of the personnel
requirements, the required materials, and the development schedule for the
Cayman 1 Product and cost estimates for the Accuray Components (both including
and excluding the {*****}).  Such Cayman 1 Initial Plan shall be
periodically reviewed by the Steering Committee and may be updated and revised
by such committee.

 

(b)                                 Cayman 1
Detailed Plan and Functional Specification.  Following the execution of this Agreement,
Accuray shall prepare, with the assistance and cooperation of Siemens as reasonably
requested by Accuray, a detailed, medical device industry-level-quality project
plan for the development of the Cayman 1 Product, which shall include (i) descriptions
of the personnel requirements and the required materials to implement such
plan, (ii) a development schedule for the Cayman 1 Product, (iii) detailed
acceptance criteria for the prototype model, and (iv) detailed descriptions of
the deliverables required from Siemens and Accuray (the “Cayman 1 Detailed
Plan”), and a medical device industry-level-quality functional
specification for the Cayman 1 Product (the “Cayman 1 Functional
Specification”).  The Cayman 1
Detailed Plan and the Cayman 1 Functional Specification shall be initially
approved, and thereafter periodically reviewed, by the Steering Committee and
may be updated and revised by such committee.

 

(c)                                  Development
Efforts by Accuray.  Upon
initial approval by the Steering Committee of the Cayman 1 Detailed Plan and
the Cayman 1 Functional Specification, Accuray shall commence development of
the Cayman 1 Product on the basis of the Cayman 1 Detailed Plan, and Siemens
shall assist as set forth therein; provided, however, that the
obligation of Accuray to perform such development shall be an obligation to use
best efforts, it being understood that, in this context, “best efforts” shall
mean the undertaking by Accuray to perform such development at a cost to itself
(including direct cost and overhead, as calculated in accordance with Accuray’s
regular calculation standards to calculate such cost set forth in Schedule
2.2(c), and including any amount of damages paid by Accuray to Siemens for
breach of contract or otherwise relating to this best efforts clause) of up to
the amount of Arrangement Fee actually received by Accuray (and which has not
previously been repaid by Accuray), subject to the last sentence of this Section
2.2(c).  For example, if Accuray actually
received {*****} million of the
Arrangement Fee and Accuray had previously repaid {*****} million of the Arrangement Fee, Accuray would only be
liable for up to {*****} million
of development efforts under this best efforts clause, subject to the following
sentence.  Notwithstanding the foregoing,
in addition to the amount set forth above, “best efforts” shall also include
Accuray incurring development costs for the Cayman 1 Product (calculated as set
forth above) of up to a maximum of {*****}
(inclusive of the amounts of the Arrangement Fee it actually receives from 

 

4

 

Siemens), provided
that Siemens pays to Accuray the full amounts of the Arrangement Fee set forth
in paragraphs (i), (ii), (iii) and (iv) of Schedule 2.2(d)(i) and any
other amounts payable pursuant to Section 2.2(d)(iii).

 

(d)                                 Arrangement Fee.

 

(i)                                     In
consideration of the development efforts of Accuray related to the Cayman 1
Product, Siemens hereby agrees to pay to Accuray an arrangement fee in an
amount calculated pursuant to Schedule 2.2(d)(i) (the “Arrangement
Fee”).  The Arrangement Fee shall be
payable as set forth on Schedule 2.2(d)(i); provided, however,
that in the event that Accuray is prevented from achieving the second and third
milestones set forth on Schedule 2.2(d)(i) due to the non-performance by
Siemens of its obligation to assist Accuray, including, without limitation, to
deliver the deliverables set forth on the Cayman 1 Detailed Plan, and Siemens,
after written notice from Accuray, continues to fail to provide such assistance
and/or deliver such deliverables, then Accuray shall be entitled to receive from
Siemens, regardless of whether any of such milestones have been achieved, a
portion of the Arrangement Fee equal to the cost to Accuray (as calculated in
accordance with the provisions set forth in Section 2.2(c)) of Accuray’s
development efforts made prior to such date, and in such event Accuray shall
provide to Siemens a written summary of its test results and development
efforts made prior to such date (but, in any event, Accuray shall not provide
any source code, object code, or prototypes).

 

(ii)                                  The Arrangement
Fee is an agreed upon fee for the scope of development provided for above and
is intended to compensate Accuray for expenditures or expenses (as calculated
in accordance with the provisions set forth in Section 2.2(c)) incurred in
connection with satisfying its obligations under, and pursuing the objectives
of, this Section 2.2 jointly with Siemens, including, without limitation, the
objectives set forth in Schedule 2.2(d)(ii).  Accuray shall make available to the Steering
Committee, on a quarterly basis, detailed documentation of such expenditures
and expenses and, upon request and not more often than monthly, estimates of
such expenditures and expenses.  By way
of clarification, nothing in this Agreement shall create a liability of Accuray
for a successful implementation of the foregoing objectives or otherwise a
contract for works obligation (werkvertragliche
Verpflichtung).

 

(iii)                               Notwithstanding
the foregoing, Accuray shall be obligated to incur development costs for the
Cayman 1 Product (as calculated in accordance with the provisions set forth in Section
2.2(c)) of up to a maximum of {*****}
above the amount of the Arrangement Fee it actually receives from Siemens, provided
that Siemens pays to Accuray the full amounts of the Arrangement Fee set forth
in paragraphs (i), (ii), (iii) and (iv) of Schedule 2.2(d)(i).  If the Accuray Gross Profits do not exceed
the Accuray Excess Expenditures, Siemens shall, within 10 days of the date that
is 18 months after the Initial Shipment Date, pay to Accuray an amount equal to
the difference between the Accuray Excess Expenditures and the Accuray Gross
Profits.

 

(e)                                  Prototype
Acceptance.  Upon
completion by Accuray of the development of the Cayman 1 Product, Accuray shall
make available one prototype thereof to Siemens for acceptance testing.  The Steering Committee will oversee the
performance of an acceptance review by Siemens of the Cayman 1 Product to
confirm that such prototype conforms with the Cayman 1 Functional Specification
and the acceptance criteria set forth in the Cayman 1 

 

5

 

Detailed Plan.  If the Cayman 1 Product passes the acceptance
review and is CE Marked, the Cayman 1 Product shall be deemed accepted by
Siemens as being in accordance with such functional specification and such
acceptance criteria.  By way of
clarification, such acceptance review shall include consideration of factors
related to the functionality and performance of the Cayman 1 Product (including
the Accuray Components and Interface incorporated therein), but shall not
include consideration of the status of 510(k) clearance.

 

2.3                               Development of Cayman 2.

 

(a)                                  Development
Plan.

 

(i)                                     Following
execution of this Agreement, the Steering Committee shall meet, agree upon, and
approve a decision milestone (the “Milestone”) that must be satisfied
before Accuray is required to begin development of the Cayman 2 Product.  The purpose of the Milestone is to ensure
commercial shipment of the Cayman 2 Product upon satisfaction of the conditions
set forth in Schedule 2.3(b).  The
Milestone will be agreed upon and approved by the Steering Committee in good
faith and on a commercially reasonable basis. 
The Parties may, jointly and at any time prior to the satisfaction of
the Milestone, agree that Accuray shall begin development of the Cayman 2
Product.

 

(ii)                                  Within 30 days
of the earlier of the Parties’ agreement to begin development of the Cayman 2
Product or the satisfaction of the Milestone, Accuray shall prepare, with the
assistance and cooperation of Siemens as reasonably requested by Accuray, a
detailed, medical device industry-level-quality project plan for the
development of the Cayman 2 Product (the “Cayman 2 Detailed Plan”), and
a medical device industry-level-quality functional specification for the Cayman
2 Product (the “Cayman 2 Functional Specification”).  The Cayman 2 Detailed Plan shall include (i) descriptions
of the personnel requirements and the required materials to implement such
plan, (ii) a development schedule for the Cayman 2 Product, (iii) cost
estimates for the Accuray Components (both including and excluding the {*****}) for the Cayman 2 Product, (iv)
detailed acceptance criteria for the prototype model, and (v) detailed
descriptions of the deliverables required from Siemens and Accuray.  Terms and conditions for the Cayman 2 Product
and the development thereof shall be negotiated in good faith by the Parties
and shall depend on the scope of the Cayman 2 Product and the development
thereof.  The following guidelines will
apply to the determination of such terms and conditions: (1) the arrangement
fee to be paid by Siemens to Accuray to cover the costs related to the
development of the Cayman 2 Product shall not exceed US${*****}, subject to the functionality and components of the Cayman
2 Product being as described in the definition of “Cayman 2 Product” and (2) the
purchase price of the Accuray Components and Interface for the Cayman 2 Product
shall not exceed the sum of the then-current price of the Accuray Components and
Interface for the Cayman 1 Product and the then-current average distributor
price charged by Accuray for Accuray’s {*****}
product, based upon the functionality and components of the Cayman 2 Product
described in the definition of “Cayman 2 Product.”  The Cayman 2 Detailed Plan and the Cayman 2
Functional Specification shall be approved by the Steering Committee and,
thereafter, shall be periodically reviewed by the Steering Committee and may be
updated and revised by such committee.

 

(b)                                 Conditions to Completion
of Development.  Unless
otherwise approved by 

 

6

 

the Steering Committee,
Accuray shall have no obligation to complete development of the Cayman 2
Product unless and until (i) the conditions set forth on Schedule 2.3(b)
have been satisfied and (ii) Siemens has delivered its deliverables set forth
in the Cayman 2 Detailed Plan.  Once such
conditions have been satisfied and such deliverables delivered, Accuray shall
complete the development of the Cayman 2 Product within the earlier of the
schedule set forth in the Cayman 2 Detailed Plan or six (6) months from the
satisfaction of such conditions and delivery of such deliverables.  Notwithstanding the foregoing, the Parties
may, jointly and at any time prior to the satisfaction of such conditions and
delivery of such deliverables, agree that Accuray shall complete development of
the Cayman 2 Product.

 

(c)                                  Prototype
Acceptance.  Upon
completion by Accuray of the development of the Cayman 2 Product, Accuray shall
make available one prototype thereof to Siemens for acceptance testing.  The Steering Committee will oversee the
performance of an acceptance review by Siemens of the Cayman 2 Product to
confirm that such prototype conforms with the Cayman 2 Functional Specification
and the acceptance criteria set forth in the Cayman 2 Detailed Plan.  If the Cayman 2 Product passes the acceptance
review and is CE Marked, the Cayman 2 Product shall be deemed accepted by
Siemens as being in accordance with such functional specification and such
acceptance criteria.  By way of
clarification, such acceptance review shall include consideration of factors
related to the functionality and performance of the Cayman 2 Product (including
the Accuray Components and Interface incorporated therein), but shall not
include consideration of the status of 510(k) clearance.

 

2.4                               Regulatory
Approval of Cayman Products.  Each of the Parties agree to use commercially
reasonable efforts to promptly complete and have accepted all regulatory
filings required for the distribution of the Cayman Products at such times as
may be approved by the Steering Committee. 
Such efforts include reasonable cooperation between the Parties to the
extent necessary to complete and have accepted such filings.  A summary of the regulatory roles and
responsibilities of the Parties is set forth in Schedule 2.4, and such
Schedule is subject to revision by the Steering Committee from time to
time.  Except as set forth in such
Schedule, each Party shall bear all expenses incurred by it in connection with
this Section 2.4.

 

2.5                               Distribution
of Cayman Products.

 

(a)                                  Distribution by
Siemens.  During the Term and subject to
the provisions of this Section 2.5, Siemens shall have the exclusive, worldwide
right to purchase from Accuray the Accuray Components and the Interface solely
for use in Cayman Products in which Accuray Components and the Interface are
integrated and that are sold for use within the Scope.  Siemens shall use commercially reasonable
efforts to promote, market, sell, distribute, service, and provide technical
support for the Cayman Products for use within the Scope in such countries as
it determines in its sole discretion, subject to receipt of all regulatory
approvals required therefor, provided, however, that Siemens
shall not be required to purchase any minimum number of Accuray Components or
Interfaces from Accuray in any given period.

 

(b)                                 Rights of
Accuray.  By way of clarification, (i) Accuray
shall have the right at any time to develop, market, license and/or sell any
Accuray products containing or derived from any Accuray Components for use
within the Scope with or to any Entity and (ii) Accuray shall have the right to
develop and market any Accuray Component(s) or any products 

 

7

 

derived therefrom for use
within the Scope to or with any Entity; provided, that Accuray shall not
license or sell during the Term any Accuray Component(s) or any products
derived therefrom for use within the Scope to any Entity for use with any
gantry-based linear accelerator system (other than any such system that is a
product of Accuray) so long as Siemens continues to have exclusive
distributorship rights for the Accuray Components and Interfaces under this
Agreement.  The Parties acknowledge and
agree that no restrictions are imposed under this Agreement with respect to the
development, marketing, or sale by Accuray of Accuray Components or any
products containing or derived from any Accuray Components for use outside the
Scope.  The Parties further acknowledge
and agree that no restrictions are imposed under this Agreement with respect to
any products, technology or Intellectual Property acquired by Accuray from a
Third Party (by purchase or license from such Third Party or by means of an
acquisition of such Third Party or of a business of such Third Party, or
otherwise) following the Effective Date, including any derivatives of such
products, technology or Intellectual Property or products derived therefrom
(collectively, “Acquired Third Party Technology”), other than Acquired
Third Party Technology that is primarily acquired for implementation in Accuray
Components to be used in the Cayman Products or that is acquired from Third
Parties to whom Accuray has outsourced technology development related to the
Cayman Products.  In addition, the
Parties further acknowledge and agree that the definitions of “Accuray
Components,” “Designated Improvements,” and “Improvements” shall not include
any Acquired Third Party Technology, other than Acquired Third Party Technology
that is primarily acquired for implementation in Accuray Components to be used
in the Cayman Products or that is acquired from Third Parties to whom Accuray
has outsourced technology development related to the Cayman Products.

 

(c)                                  Advertisement
of Cayman Products.  Siemens
shall be responsible for developing an advertising and marketing plan for the
Cayman 1 Product (including the principal marketing materials, the “Marketing
Plan”) prior to the Initial Shipment Date. 
The Marketing Plan shall be approved by the Steering Committee prior to
implementation, such approval not to be unreasonably withheld or delayed.  Siemens may, at any time after the adoption
of the Marketing Plan, amend or update such Marketing Plan, and shall, prior to
the commencement of sales of the Cayman 2 Product, amend the Marketing Plan to
include an advertising and marketing plan for the Cayman 2 Product, in each
case, subject to the approval of the Steering Committee, such approval not to
be unreasonably withheld or delayed. 
Siemens will use commercially reasonable efforts to implement the
Marketing Plan, and will be responsible for all expenses incurred in connection
with such efforts.

 

(d)                                 Termination of
Exclusivity.  Accuray
shall have the option, at its sole discretion, to terminate the exclusivity of
the rights to purchase the Accuray Components and the Interface granted to
Siemens by Accuray pursuant to Section 2.5(a) if:

 

8

 

(i)                                     Sales Targets.

 

(1)                                  The cumulative sales of the Cayman Products
and Cayman Upgrades by Siemens in any Sales Year are less than the target set
forth on Schedule 2.5(d)(i)(1) (the “Targets”):

 

(A)                              by {*****}% or more per
Sales Year for any two consecutive Sales Years; or

 

(B)                                by {*****}% or more in
any Sales Year; and

 

(2)                                  The number of CyberKnife Systems sold by
Siemens pursuant to its distributorship relationships with Accuray created
pursuant to Article III in any Siemens fiscal year are less than the targets in
such fiscal year set forth on Schedule 2.5(d)(i)(2).

 

(ii)                                  Initial
Shipment Date.  The Initial
Shipment Date has not occurred within one year of the 510(k) Clearance.

 

By
way of clarification, such termination will not terminate Siemens’ distributor
rights, which will continue on a non-exclusive basis, subject to Section 2.5(e).

 

(e)                                  Termination of
Distribution Rights.  The
purchase and distribution rights granted to Siemens by Accuray pursuant to Section
2.5(a) shall automatically terminate 36 months after an applicable Termination
Election made in accordance with Section 10.3. 
By way of clarification, (i) the exclusivity of such rights shall not be
affected by such Termination Election during such 36-month period, (ii) such
rights shall remain exclusive during such 36-month period (unless such
exclusivity is or has previously been otherwise terminated pursuant to the
terms hereof), and (iii) Siemens shall have no right to distribute Accuray
Components purchased under and Accuray shall have no obligation to accept any
purchase order submitted by Siemens with a requested delivery date after such
36-month period.

 

(f)                                    Accuray
Distribution Rights.  Upon the
termination of the exclusivity of Siemens’ rights pursuant to Section 2.5(d) or
of Siemens’ rights pursuant to Section 2.5(e):

 

(i)                                     Accuray shall
have the worldwide, non-exclusive right to sell the Upgrade to any Entity who
owns or operates, or will own or operate, an {*****}, provided, however,
that if Accuray terminated any of Siemens’ rights pursuant to Sections 2.5(d) or
2.5(e), Accuray shall pay a system interface license fee in the amount set
forth in Schedule 2.5(f) for each such sale of an Upgrade; and

 

(ii)                                  Siemens agrees
to (1) not interfere with the exercise of such rights by Accuray, (2) to not
take any action whose primary purpose is to block or limit the continued
operability of the Upgrade with {*****}, and (3) to negotiate in good faith
with Accuray for the continued compatibility and operability of the Upgrade
with {*****}.

 

2.6                               Availability
of Accuray Components and Interface.

 

(a)                                  Accuray shall
be responsible for the manufacture of the Accuray Components and
Interface.  During the Term and after
receipt of all required regulatory approvals and consents applicable to such
Accuray Components or Interfaces (such period, the 

 

9

 

“Availability
Period”), Accuray shall fulfill any purchase order for Accuray Components
and Interfaces that is submitted by Siemens in accordance with Section 2.8.

 

(b)                                 Upon an applicable
Termination Election made in accordance with Section 10.3, Accuray’s
obligations set forth in Section 2.6(a) shall terminate in their entirety 36
months after such Termination Election (the “Termination Date”).  By way of clarification, Accuray shall have
no obligation to accept any purchase order submitted by Siemens with a
requested delivery date after the Termination Date.

 

(c)                                  Accuray shall
have the option, at its sole discretion, to terminate its obligations under Section
2.6(a), including, without limitation, its obligations to manufacture the
Accuray Components and Interface and to fulfill any purchase order for Accuray
Components and Interfaces submitted by Siemens, if, for any Sales Year, the
sales of the Cayman Products during such Sales Year by Siemens are {*****}% or
more below the Target for such Sales Year.

 

(d)                                 In the event
that (i) Accuray discontinues the manufacture of any Accuray Component and/or
the Interface incorporated in the Cayman Product or ceases to make any Accuray
Component and/or Interface incorporated in the Cayman Product available to
Siemens (such discontinued or unavailable products, the “Discontinued
Products”) during the Term, other than pursuant to Section 2.6(c), and (ii)
Accuray has not terminated Siemens’ exclusive distribution rights pursuant to
Sections 2.5(d) or 2.5(e), Accuray shall, upon the written request of Siemens,
grant to Siemens a non-exclusive, worldwide and non-transferable license under
the Intellectual Property then owned by Accuray or the licensing of which is
then controlled by Accuray that is embodied in or that protects the then
existing form of the Discontinued Products solely to the extent necessary to
enable Siemens to manufacture the Discontinued Products for use within the
Scope and to sell the Discontinued Products solely as integrated in Cayman
Products that are sold for use within the Scope, all on commercially reasonable
terms and MFN Terms.  The other terms of
such licenses shall otherwise be as agreed upon and approved by the Steering
Committee.  For the avoidance of doubt,
such licenses shall terminate upon the later of (A) the expiration of the Term
or (B) two years from the date Accuray discontinues manufacture of the
Discontinued Products or ceases to make the Discontinued Products available to
Siemens.

 

(e)                                  Accuray shall
have the right during the Term to modify the Accuray Components as it may in
its sole discretion determine, provided that any such modified Accuray
Components are compatible with the Cayman Product and shall not deviate from
the applicable Functional Specification.

 

2.7                               Pricing
of Accuray Components and the Interface.

 

(a)                                  Accuray
Components for the Cayman 1 Product.  The purchase price payable by Siemens to
Accuray for the Accuray Components and Interface for the Cayman 1 Product (both
including and excluding a purchase of a {*****})
shall be as set forth in Schedule 2.7(a) for the period commencing on
the Effective Date and ending two years thereafter.  Within 30 days before the two-year
anniversary of the Effective Date and thereafter on a corresponding annual
basis, the Steering Committee shall, in good faith, review and approve the
purchase price payable by Siemens for the Accuray Components for the Cayman 1
Product (both including and excluding a purchase of a {*****}).

 

10

 

 

(b)                                 Accuray
Components for the Cayman 2 Product.  The purchase price payable by Siemens to
Accuray for the Accuray Components and Interface for the Cayman 2 Product (both
including and excluding a purchase of a {*****})
shall be reviewed and approved annually by the Steering Committee commencing
the year after approval of the Cayman 2 Detailed Plan.  Such approval by the Steering Committee shall
be made in good faith; provided, that the purchase price of the Accuray
Components for the Cayman 2 Product payable by Siemens (both including and
excluding a purchase of a {*****})
shall be commercially reasonable, on MFN Terms, and subject to the guidelines
set forth in Section 2.3(a)(ii).

 

(c)                                  Installation
for the Accuray Components and the Interface.  The service charge for installation provided
by Accuray for the Accuray Components and the Interface shall be based upon the
United States installation service charge set forth in Schedule 2.7(c) with
modifications solely to the extent necessary to account for regional cost
differences, and shall be reviewed and approved by the Steering Committee after
completion of five installations by Accuray of the Accuray Components and
Interfaces at customer sites and thereafter on a corresponding annual basis.  Such approval shall be made in good faith; provided,
that such service charge shall be commercially reasonable and on MFN Terms.

 

2.8                               Purchase
Terms and Conditions. 
Unless otherwise agreed by the Parties, any purchase of Accuray
Components or Interfaces by Siemens or any of its Affiliates pursuant to the
terms of this Agreement shall be subject to the Terms and Conditions attached
hereto as Exhibit B.  By way of
clarification, (i) such Terms and Conditions shall only apply to the purchase
of Accuray Components and/or Interfaces and shall not apply to purchases of
CyberKnife Systems, (ii) any purchase order for Accuray Components and/or
Interfaces must not contain any terms or conditions that contradict the
provisions set forth in this Agreement, including, without limitation, Exhibit
B, and any such contradictory terms are invalid, and (iii) Siemens shall
cause any of its Affiliates purchasing Accuray Components and/or Interfaces
pursuant to the terms of this Agreement to agree to be bound by and comply with
such Terms and Conditions and any provision of this Agreement related to or
applicable to such purchase.

 

2.9                               Product
Labeling.  The Cayman
Products shall be packaged and labeled with the Siemens brand name and logo and
as otherwise determined by Siemens in its reasonable discretion.  All marketing and communications materials
for the Cayman Products shall include both the Siemens and Accuray logos in a
manner consistent with the Siemens strategic alliance partners marketing guidelines.  The exact form and contents of such
references shall be agreed upon by the Steering Committee in good faith.  Siemens shall, at the request of Accuray, use
commercially reasonable efforts to cause customer sites agreed upon by the
Steering Committee in good faith to include conspicuous markings stating that
the Cayman Product incorporates Accuray’s technology.  The exact form and contents of such markings
shall be agreed upon by the Steering Committee in good faith and consistent
with the Siemens strategic alliance partners marketing guidelines.

 

2.10                        Product
Support and Installation.

 

(a)                                  Installation.  Siemens shall always be responsible for
installing the Cayman Products, including, without limitation, the Accuray
Components and Interface, at the customer location.  However, Siemens shall have the right to
request, which request will be made 

 

11

 

in the purchase order for
Accuray Components and Interfaces, that Accuray install the Accuray Components
and Interfaces.  Any such installation
that Accuray agrees to provide, as evidenced by its signature on such purchase
order, shall be provided by Accuray (or by any of its Affiliates or any Third
Party) at the price determined pursuant to Section 2.7(c).  Accuray shall provide to Siemens (i) the
technical information related to the Accuray Components and the Interface
(including drawings and schematics) owned or controlled by Accuray that is
reasonably necessary for Siemens to install the Cayman Product (it being
understood that the information provided by Accuray will be of the same scope
and nature that Accuray provides to other distributors of Accuray products,
and, in any case, will not contain the information necessary to allow for the
manufacture of any Accuray Component or the Interface), (ii) an initial draft
of acceptance test procedures for the Accuray Components and the Interface, (iii)
the applicable installation training materials, (iv) the applicable escalation
support procedure, and (v) the applicable site readiness requirements. Accuray
will provide Siemens access to any tools required for the installation or
service of Accuray Components and/or the Interface on MFN Terms.

 

(b)                                 Service.  Siemens shall be the exclusive service
provider for the Cayman Products, including, without limitation, the Accuray
Components and the Interface, and shall have the responsibility for providing
such service.  Siemens is entitled to
subcontract to Accuray, and Accuray is obliged to accept any such subcontract in
any region where Accuray has a direct service presence, such service for the
Accuray Components and the Interface, provided, however, that the
terms and conditions of such subcontract shall be commercially reasonable and
on MFN Terms.  Accuray shall provide
4th-level support for installation and service (i.e., engineering support to
Siemens Headquarter Service Center) for the Accuray Components and the
Interface, in a timely manner and upon Siemens’ request, (i) at no cost, if
such support is covered by a then-effective warranty on such Accuray Components
and/or Interface, or (ii) otherwise, on a time and materials basis at Accuray’s
then current time and material rates or on the terms of any services contract
entered into between Accuray and Siemens, such contract to be on commercially
reasonable terms and MFN Terms.  Siemens
shall be responsible for the technical service documentation for the Cayman
Products and Accuray shall provide to Siemens (1) the technical information
related to the Accuray Components and the Interface (including drawings and
schematics) owned or controlled by Accuray that is reasonably necessary for
Siemens to perform the services for the Cayman Product that are contemplated
hereby to be performed by Siemens and to create such technical service
documentation (it being understood that the information provided by Accuray
will be of the same scope and nature that Accuray provides to other
distributors of Accuray products and sufficient in scope such that trained
service personnel will be capable of performing effective troubleshooting, and,
in any case, will not contain the information necessary to allow for the
manufacture of any Accuray Component or the Interface), (2) the service concept
for the Accuray Components, including information related to the remote service
features, if any, field replaceable units, spare parts, applicable service
training materials, and the escalation support procedure thereof, (3) information
regarding the spare parts for the Accuray Components and the Interface,
including the Accuray pricing thereof, and (4) necessary information regarding
the anticipated delivery times for spare parts of the Accuray Components and/or
Interface.

 

(c)                                  Training.  Upon acceptance of the Cayman 1 Product
prototype pursuant to Section 2.2(e), Accuray will make available to Siemens “train
the trainer” training for the 

 

12

 

service, installation,
application support, and customer training of the applicable Accuray Components
and Interface.  Accuray will provide such
training (including the cost of the training courses and required materials) to
a maximum of 5 Siemens training personnel for 10 training days each, up to a
maximum of 50 total training days.  Such
training days must be used by Siemens within a six month period starting upon
the earlier of the first such training day and the Initial Shipment Date.  Upon acceptance of the Cayman 2 Product
prototype pursuant to Section 2.3(c), Accuray will make available to Siemens “train
the trainer” training for the service, installation, application support, and
customer of the applicable Accuray Components and Interface.  Accuray will provide such training (including
the cost of the training courses and required materials) to a maximum of 5
Siemens training personnel for 5 training days each, up to a maximum of 25
total training days.  Such training days
must be used by Siemens within a six month period starting upon the earlier of
the first such training day and the date of the first shipment of the Cayman 2
Product.

 

By
way of clarification, such training is provided by Accuray to Siemens in
connection with this Agreement and the acceptance of the Cayman 1 Product and
the Cayman 2 Product and Accuray shall have no obligation under this Section 2.2(c)
to provide training to Siemens personnel in connection with any sale of Cayman
Products to Third Parties.  Any
additional Siemens personnel or training days reasonably requested by Siemens
will be provided by Accuray on MFN Terms and shall be paid for by Siemens.

 

All
such training will be provided in English only and, at the Steering Committee’s
discretion, at either Accuray’s Sunnyvale, California facility or Siemens’
Concord, California facility, on the applicable final Cayman Products or Cayman
Product prototypes that are substantially equivalent to such final Cayman
Products.  Siemens shall be responsible
for all other costs and expenses, including travel and lodging, incurred by it
or its personnel to attend such training. 
In addition, Siemens shall be responsible for providing appropriate
interpretation and translation services necessary to ensure its personnel can
participate in a meaningful and effective way in the training courses provided
by Accuray.

 

2.11                        Rights
to Improvements.

 

(a)                                  Designated
Improvements.  The Parties
agree that, following the later of (i) the second anniversary of the first
shipment date of the Cayman 2 Product and (ii) two years after the date on
which a Designated Improvement was first incorporated into a
commercially-released product of Accuray (the “Designated Improvement
Trigger Date”), Accuray will make available for purchase by Siemens, for
use in a modified Cayman Product sold by Siemens and solely within the Scope,
such Designated Improvement. 
Notwithstanding the foregoing, Accuray’s obligation to make available
such Designated Improvement after such Designated Improvement Trigger Date
shall be subject to Accuray and Siemens agreeing on the price and other terms
and conditions on which Accuray may make available such Designated Improvement
for purchase by Siemens and use solely within the Scope; provided, however,
that the price must be commercially reasonable and on MFN Terms; and, provided,
further, that a failure of the Parties to reach agreement on the price
or other terms and conditions under which such Designated Improvement will be
made available for purchase by Siemens shall not constitute a breach of the
provisions of this Section 2.11(a) by Accuray so long as Accuray has negotiated
in good faith.

 

13

 

(b)                                 Other
Improvements.  From and
after the time that Accuray is required to complete development of the Cayman 2
Product pursuant to Section 2.3(b), the Steering Committee shall periodically
review and determine whether to request that Accuray consider making available
pursuant to the terms of this Section 2.11(b) a particular improvement or new
functionality developed by Accuray relating to the Cayman Products (other than
a Designated Improvement) that (i) Accuray has not then incorporated in the
Accuray Components and (ii) would allow the Cayman Products to be competitive
with the commercially released products of the Siemens Major Competitors that
are primarily marketed and/or sold within the market defined by the Scope
(each, an “Improvement”).  Such
review and determination shall be made by the Steering Committee in good faith
based on the following guidelines: (1) such Improvement shall not enable
Siemens to offer products with radiosurgery functionality and performance that
could be marketed/sold as a direct substitute to the then-current version of
the CyberKnife System, and (2) such Improvement shall have been first
incorporated into a commercially-released product of Accuray at least two years
prior to the then-current date.  Upon the
Steering Committee determining to request Accuray to consider making available
a particular Improvement pursuant to the terms of this Section 2.11(b), Accuray
shall consider in good faith whether to make such Improvement available for
purchase by Siemens, for use in a modified Cayman Product sold by Siemens and
solely within the Scope. If Accuray agrees to make available an Improvement
requested by the Steering Committee hereunder, Accuray’s obligation to make
available such Improvement shall be subject to Accuray and Siemens agreeing on
the price and other terms and conditions on which Accuray may make available
such Improvement for purchase by Siemens and use solely within the Scope; provided,
however, that the price must be commercially reasonable and on MFN
Terms; and, provided, further, that a failure of the Parties to
reach agreement on the price or other terms and conditions under which such
Improvement will be made available for purchase by Siemens shall not constitute
a breach of the provisions of this Section 2.11(b) by Accuray so long as
Accuray has negotiated in good faith.

 

(c)                                  Limitations.  For the avoidance of doubt, in no event shall
Accuray be obligated under this Section 2.11 to provide or make available any
improvement or new functionality (i) outside the Scope or (ii) after the Term
(or any earlier termination of this Agreement).

 

2.12                        Intellectual
Property.

 

(a)                                  Grant of Rights
by Accuray.  Accuray and
its licensors retain all Intellectual Property rights in the Accuray
Components.  Accuray hereby grants
Siemens a nonexclusive, non-transferable, royalty-free and worldwide right,
with the right to grant sublicenses to Affiliates of Siemens, (i) to use the
software provided in connection with the Accuray Components that are purchased
by Siemens hereunder only in machine readable form and only in combination with
the Cayman Products with which such software is provided, solely for the
purposes of carrying out its rights and obligations hereunder, and (ii) to
grant purchasers of Cayman Products a nonexclusive, non-transferable and
royalty-free right to use the software provided in connection with the Accuray
Components only in machine readable form and only in combination with the
purchased Cayman Products with which such software is provided.  Siemens agrees that it and its Affiliates
shall not, and shall not permit purchasers of Cayman Products, to use such
software in any other manner or to copy, modify, or disclose or make 

 

14

 

available such software, in
whole or in part, to any Third Party. 
Accuray hereby grants Siemens a nonexclusive, non-transferable,
royalty-free and worldwide license, with the right to grant sublicenses to
Affiliates of Siemens, under any Patents owned by Accuray or the licensing of
which is controlled by Accuray, solely for the purpose of (i) assembling and
integrating the Accuray Components with the {*****} to create the Cayman
Product, including developing any interfaces or hardware modifications that are
required to enable the {*****} to interoperate with the Interface and the
Accuray Components in accordance with applicable Functional Specification and (ii)
marketing, offering for sale, selling, installing and delivering product
support of Cayman Products.  Accuray
hereby grants to purchasers of Cayman Products a nonexclusive, non-transferable
and royalty-free license under any method 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 Cayman Products in accordance with their
applicable Functional Specifications solely within the Scope.  No rights or license, whether express or
implied, are granted by Accuray in this Agreement to Siemens under any Intellectual
Property of Accuray other than as expressly granted by Accuray in this
Agreement.

 

(b)                                 Grant of Rights
by Siemens.  During the
term of this Agreement and until completion of the development activities
contemplated by Sections 2.1, 2.2 and 2.3, Siemens hereby grants to Accuray a
non-exclusive, non-transferable, royalty-free and worldwide license of the
Intellectual Property owned by Siemens or the licensing of which is controlled
by Siemens that is embodied in the {*****} and/or the TxT Couch or is otherwise
necessary for Accuray to develop the Interface and make any modifications to
Accuray hardware or software that are necessary to implement the Cayman 1
Functional Specification or the Cayman 2 Functional Specification (including
interface specifications and other relevant documentation), solely to the
extent necessary for Accuray to develop the Interface and carry out its other
responsibilities under Sections 2.1, 2.2 and 2.3.  The Steering Committee shall approve the
specific items of software and other embodiments of Intellectual Property of
Siemens that will be licensed and delivered by Siemens to Accuray under this Section
2.12(b), it being agreed that all such embodiments constitute Confidential
Information of Siemens under the Confidentiality Agreement.  No rights or license, whether express or
implied, are granted by Siemens in this Agreement to Accuray under any
Intellectual Property of Siemens other than as expressly granted by Siemens in
this Agreement.

 

(c)                                  Ownership of
Inventions.

 

(i)                                     Accuray
Inventions.  Accuray
shall have and retain sole and exclusive, right, title and interest to all
inventions, improvements, discoveries, know how and other Intellectual Property
which are made or developed during the Term solely by Accuray, its Affiliates,
and/or its employees or agents acting under authority from Accuray, in
connection with the development and distribution of the Cayman Products,
including, without limitation, the Accuray Components and all improvements
thereto.  After having been created,
Accuray shall promptly inform Siemens at the next meeting of the Steering
Committee about any such inventions, improvements, discoveries, know how and
other Intellectual Property that is solely related to the development of the
Cayman Products during the Term (“Accuray Cayman Related Inventions”).  For the avoidance of doubt, such Accuray
Cayman Related Inventions are being disclosed for the sole purpose of enabling
the Steering Committee for determining whether such Accuray Cayman Related
Inventions are Joint Inventions or Allocated Inventions.

 

15

 

(ii)                                  Siemens
Inventions.  Siemens
shall have and retain sole and exclusive, right, title and interest to all
inventions, improvements, discoveries, know how and other Intellectual Property
which are made or developed during the Term solely by Siemens, its Affiliates,
its employees or its agents acting under authority from Siemens, in connection
with the development and distribution of the Cayman Products, including,
without limitation, the {*****} and all improvements thereto.  After having been created, Siemens shall
promptly inform Accuray at the next meeting of the Steering Committee about any
such inventions, improvements, discoveries, know how and other Intellectual
Property that is solely related to the development of the Cayman Products
during the Term (“Siemens Cayman Related Inventions”).  For the avoidance of doubt, such Siemens
Cayman Related Inventions are being disclosed for the sole purpose of enabling
the Steering Committee for determining whether such Siemens Cayman Related
Inventions are Joint Inventions or Allocated Inventions.

 

(iii)                               Joint
Inventions.

 

(1)                                  Accuray and Siemens shall have and retain
jointly all right, title and interest to all inventions, improvements,
discoveries, know how, and other Intellectual Property which are made or
developed during the Term jointly by Accuray and Siemens, their Affiliates,
their employees, or their agents acting under authority from Accuray or
Siemens, in connection with the development and distribution of the Interface
(the “Joint Inventions”).  Each
Party shall obtain from all of its employees, consultants and contractors who
participate in the creation or development of any Joint Invention all such
executed assignments or other documents as may be necessary to assign to, and
vest exclusively in, such Party all right, title and interest to the Joint
Invention to the extent made or developed by such employees, consultants and
contractors.  Each Party shall have the
unencumbered right to use, execute, reproduce, display, perform, distribute,
modify, create derivative works of, make, have made, market, offer for sale,
sell, import and sub-license products incorporating such Joint Inventions, in
each case with no duty to account to the other Party.  Upon identification of any Joint Invention,
the Steering Committee shall approve the scope of any governmental filings
advisable in order to protect the Parties’ rights in such Joint Invention, the
responsibilities of each Party related to the submission and maintenance of
such filings and such Joint Invention, and the allocation of the expenses of
the foregoing among the Parties.  In the
event that the Steering Committee elects not to or does not approve the submission
of any governmental filing for a Joint Invention, either Party may, at its own
expense, submit such filing; provided, however, that notice of
any such filing must be provided to the other Party and the other Party must be
given an opportunity to participate, at its own expense, in such filing (an
election to participate in such filing being required to be made by the other
Party within 30 calendar days after receipt of written notice of the intent of
such Party to submit such filing).  If
the other Party does not elect to participate in such filing, (1) the filing
will be made solely in the name of the Party making the filing and any Patent
that is issued in respect thereof will be owned solely by such Party, provided
that the other Party shall have an irrevocable, nonexclusive, non-transferable,
and royalty-free and worldwide license under such Patent, with the right to
grant sublicenses to its Affiliates and grant sublicense to Third Parties for
the purpose of making products solely for such other Party or its Affiliates,
and (2) the other Party shall cooperate with such Party, execute all lawful
papers and instruments, and make all rightful oaths and declarations, as
reasonably requested by such Party and at such Party’s expense, as may be
necessary in connection with the preparation, prosecution, maintenance and
enforcement of all Patent rights relating to such Joint Invention.  Such Party 

 

16

 

requesting such assistance shall reimburse the
other Party for all reasonable out-of-pocket costs and expenses incurred by
such other Party in providing such assistance. 
If any Party submits any governmental filing for a Joint Invention in
which the other Party does not elect to participate, such Party shall control
the prosecution of such filing and shall be responsible for the maintenance and
control the enforcement of any Patent that issues in respect thereof; provided
such Party agrees to consult with the other Party with respect to the
prosecution of any filings relating to such Joint Invention and to provide the
other Party a reasonable opportunity to review and provide comments regarding
any filings and other substantive communications to and from the applicable
governmental patent office or agency regarding such filing; provided
that the other Party shall not unreasonably delay its review and provision of
comments regarding such filings and substantive communications and, in any
event, shall provide to such Party, in writing, any comments it has regarding
such filings or substantive communications within 30 calendar days after
receipt of such filings or substantive communications from such Party.  The Party prosecuting such filing shall use
reasonable efforts to incorporate the other Party’s comments into such filings
and substantive communications.  Should
the Party prosecuting such filing determine to abandon the prosecution of such
Patent application or the maintenance of any Patent that issues on such Patent
application, such Party shall provide timely notice of such determination to
the other Party and, if the other Party so requests within 30 calendar days
after it receives notice of such abandonment, such other Party may assume
responsibility for the prosecution of such filing or the maintenance of such
Patent pursuant to the terms of this Section 2.12(c)(iii)(1).  Such Patent application or Patent shall be
assigned to the other Party for no additional consideration, subject to
retention by such Party of an irrevocable, nonexclusive, and royalty-free
license under any Patent that issues on such Patent application or such Patent,
with the right to grant sublicenses to its Affiliates and grant sublicense to
Third Parties for the purpose of making products solely for such Party or its
Affiliates,.

 

(2)                                  Other than the Joint Inventions, all inventions,
improvements, discoveries, know how or other Intellectual Property which are
made or developed during the Term jointly by Accuray and Siemens, their
Affiliates, their employees, or their agents acting under authority from
Accuray or Siemens, solely in connection with the development and distribution
of the Cayman Products hereunder, to the extent that employees, consultants,
and/or contractors of Accuray and Siemens would be considered the joint
inventors, joint authors, or joint creators, as the case may be, of such
Intellectual Property under the intellectual property laws of the United States
(an “Allocated Invention”), shall be allocated as follows:

 

(A)                              all Allocated Inventions that primarily relate to any of the Accuray
Components will be owned solely by Accuray;

 

(B)                                all Allocated Inventions that primarily relate to the {*****} or the
TxT Couch will be owned solely by Siemens; and

 

(C)                                all other Allocated Inventions will be treated as Joint Inventions that
are subject to the terms of Section 2.12(c)(iii)(1).

 

The
Steering Committee will approve a determination with respect to each Allocated
Invention that is identified of whether such Allocated Invention primarily
relates to any of the Accuray 

 

17

 

Components
or primarily relates to {*****} or the TxT Couch and, accordingly whether such
Allocated Inventions will owned solely by Accuray, solely by Siemens, or will
be treated as a Joint Invention that is jointly owned by Accuray and Siemens
and that is subject to the terms of Section 2.12(c)(iii)(1).  If the Steering Committee is unable to
approve any such determination within 30 calendar days, such determination
shall be submitted for resolution pursuant to the provisions of Section 11.3
(Dispute Resolution).

 

If
a Party that wholly-owns any Allocated Invention desires to seek Patent
protection with respect thereto (including, without limitation, in connection
with seeking to file a continuation in part Patent application with respect
thereto), the other Party shall reasonably cooperate in connection therewith,
including by executing and delivering such conveyances, assignments,
assurances, powers of attorney, and other instruments or documents as may be
reasonably required by such Party and using commercially reasonable efforts to
procure any executed assignments or other instruments or documents from any
employee or consultant of such other Party who is a co-inventor of such
Allocated Invention.  Each Party shall execute
all such other lawful papers and instruments and make all rightful oaths and
declarations, as reasonably requested by the other Party and at the other Party’s
expense, as may be necessary in connection with the preparation, prosecution,
maintenance and enforcement of all Patent rights of such other Party relating
to Allocated Inventions that are wholly-owned by such other Party.  Such Party requesting such assistance shall
reimburse the other Party for all reasonable out-of-pocket costs and expenses incurred
by such other Party in providing such assistance.  The Party that wholly-owns an Allocated
Invention shall control the preparation, filing, prosecution, maintenance and
enforcement of all Patent rights that relate to such Allocated Invention; provided
that such Party agrees to consult with the other Party with respect to the
prosecution of any Patent applications relating to such Allocated Invention and
to provide the other Party a reasonable opportunity to review and provide
comments regarding any filings and other substantive communications to and from
the applicable governmental patent office or agency regarding such pending
applications; provided that the other Party shall not unreasonably delay
its review and provision of comments regarding such filings and substantive
communications and, in any event, shall provide to such Party, in writing, any
comments it has regarding such filings or substantive communications within 30
calendar days after receipt of such filings or substantive communications from
such Party.  The Party prosecuting such
Patent application shall use reasonable efforts to incorporate the other Party’s
comments into such Patent application and substantive communications.  Should the Party prosecuting such Patent
application determine to abandon the prosecution of such Patent application or
the maintenance of any Patent that issues on such Patent application, such
Party shall provide timely notice of such determination to the other Party and,
if the other Party so requests within 30 calendar days after it receives notice
of such abandonment, assign such Patent application or Patent to the other
Party for no additional consideration, subject to retention by such Party of an
irrevocable, nonexclusive, and royalty-free license under any Patent that
issues on such Patent application or such Patent.

 

Each
Party hereby assigns and agrees to assign to the other Party all of such Party’s
right, title, and interest in and to any Allocated Invention (including all
Intellectual Property therein or thereto) that is to be wholly owned by the
other Party in accordance with the allocation of ownership of Allocated
Inventions set forth above.  Each Party
shall obtain from all of its employees, consultants and contractors who
participate in the creation or development of any 

 

18

 

Allocated
Invention that is to be wholly owned by the other Party in accordance with the
allocation of ownership of Allocated Inventions set forth above all such
executed assignments as may be necessary to assign to, and vest exclusively in,
such Party all Intellectual Property rights in and to all such Allocated
Inventions.  Each Party will execute and
deliver, and cause all employees, consultants and contractors who participate
in the creation or development of any Allocated Invention that is to be wholly
owned by the other Party to execute and deliver, any and all assignments or
other documents necessary to effectuate such assignment of Allocated Inventions
to the other Party.

 

(iv)                              License of
Allocated Inventions.  The Party
that wholly-owns any Allocated Invention (the “Licensor”) shall grant to
the other Party (the “Licensee”) an irrevocable, nonexclusive,
non-transferable, royalty-free and worldwide license of any Patent obtained by
the Licensor, including the right to grant sublicences to its Affiliates, (i) in
the case of any such license granted by Accuray to Siemens, such license shall
be exercisable solely in connection with gantry-based radiation treatment
products and (ii) in the case of any such license granted by Siemens to
Accuray, such license shall be exercisable solely in connection with robotic
based radiation treatment products of Accuray. 
The licenses granted under this Section 2.12(c)(iv) may be sublicensed
to a Third Party that (i) is not an Accuray Competitor, in the case of a
license granted by Accuray, or is not a Siemens Competitor, in the case of a
license granted by Siemens, (ii) has been engaged by the Licensee to provide
design, development or support services relating to the Licensee’s products or
to sell or distribute Licensee’s products (including as an original equipment
manufacturer)  or is otherwise involved in a
collaboration with the Licensee relating to the Licensee’s products, and (iii) is
a customer of the Licensee where, but for a license under such Patent, such
customer’s use of the Licensee’s product would infringe such Patent; provided
that the Licensee shall enter into a sublicense agreement with any such
sublicensed Third Party that contains provisions relating to the Licensor’s
Intellectual Property in such Allocated Invention that are at least as
protective as the provisions contained in this Agreement with respect to each
Party’s Intellectual Property.

 

(v)                                 Employee
Inventor Remuneration.  Each Party shall be and remain
solely responsible vis-à-vis its own employees for payment of any statutory
inventors’ fees pursuant to the German Law on employee inventions (Arbeitnehmererfindungsgesetz) and/or any similar law in
other countries in relation to the Joint Inventions and the Allocated
Inventions.

 

(d)                                 Intellectual
Property Covenants.

 

(i)                                     Patents.  Siemens shall not remove or obscure any
Patent markings placed on the Accuray Components purchased by Siemens and shall
place such other appropriate Patent markings on all Cayman Products, as Accuray
may reasonably request in writing to enforce its Patent rights in the Accuray
Components.

 

(ii)                                  Copyrights.  Siemens shall not remove or obscure any
Copyright notices included in any works of authorship incorporated in the
Accuray Components purchased by Siemens. 
In order to protect against infringement of the other Party’s
Copyrights, each Party shall mark all of the other Party’s copyrighted
materials, as requested by the other Party in writing, used by such Party in
conducting its activities contemplated by this Agreement with appropriate
Copyright markings.  Each Party shall
cooperate with the other Party, take such 

 

19

 

actions, and execute such
documents as reasonably requested by the other Party and at the other Party’s
expense, to assist the other Party in the protection of the other Party’s
Copyrights that are used in connection with this Agreement.

 

(iii)                               Trademarks.

 

(1)                                  Accuray Trademarks. 
Accuray shall have and retain sole and exclusive, right, title and
interest to all Trademarks owned by Accuray (including without limitation, all
Trademarks which are used to market the Accuray Components or the Upgrade) and
all goodwill associated therewith.

 

(2)                                  Siemens Trademarks. 
Siemens shall have and retain sole and exclusive, right, title and
interest to all Trademarks owned by Siemens (including without limitation, all
Trademarks (other than “Powered by Accuray”) which are used to market the
Cayman Products (other than the Upgrade) and all goodwill associated therewith.

 

(3)                                  Use of Trademarks. 
Except as expressly set forth in this Agreement, neither Party shall use
or register, without the prior express written consent of the other Party, any
Trademark owned by the other Party, or any word, title, expression, Trademark,
design, or marking that is confusingly similar thereto.

 

(e)                                  Third Party
Infringement.

 

(i)                                     Notice.  If any Party learns of an infringement,
unauthorized use or misappropriation by a Third Party with respect to the other
Party’s Intellectual Property incorporated into any Cayman Product (an “Infringement”),
such Party shall promptly notify the other Party and shall provide such other
Party with available evidence of such Infringement.

 

(ii)                                  Infringement of
a Party’s Intellectual Property.  In the case of Infringement that relates to
Intellectual Property that is not a Joint Invention, the Party who is the owner
of such Intellectual Property shall have the sole right, but not the duty, to
institute an infringement or other enforcement action against such Third Party
based upon such Infringement.  The other
Party shall have no right to require such Party to institute any action, and
shall have no right to institute any action for or on behalf of such Party.

 

(iii)                               Infringement of
Joint Inventions.  In the case
of Infringement that relates to a Joint Invention, the Steering Committee shall
approve a decision as to whether to institute an infringement or other
enforcement action against such Third Party based upon such Infringement.  Any costs associated with such action, and
any recoveries from such action, shall be allocated among the Parties as
approved by the Steering Committee.  In
the event that the Steering Committee does not approve the institution of such
action, either Party may, at its own expense, institute such action only with
the prior written consent of the other Party, which consent shall not be
unreasonably withheld or delayed.  The
Party instituting such action shall provide notice of the institution of such
action to the other Party and the other Party must be given an opportunity to
participate, at its own expense, in such action (an election to participate in
such action being required to be made by the other Party within 30 calendar
days after written notice of an intent of such Party to institute such action
is provide to the other Party).

 

20

 

 

2.13        {*****}.

 

2.14        Publicity of Agreement.

 

(a)           ASTRO 2010. 
The Steering Committee shall, at least 60 days prior to ASTRO 2010,
agree upon whether an announcement of the Cayman Product and this Agreement
shall be made at ASTRO 2010.  If an
announcement is to be made, the details of such announcement shall be agreed
upon by the Steering Committee prior to such event.

 

(b)           Legally Compelled Disclosure.  In the event that a Party is requested or
becomes legally compelled (including without limitation, pursuant to securities
laws and regulations) to disclose this Agreement, the Party may make such
disclosure subject to the provisions of this Section 2.14(b).  The Party required to make such disclosure
shall provide the other Party with prompt written notice of the requirement to
make such disclosure before making such disclosure and, if requested by the
other Party, will use its reasonable efforts to cooperate with the other Party
to seek a protective order, confidential treatment, or other appropriate remedy
with respect to the disclosure.

 

(c)           Press Releases. 
Other than legally compelled disclosures made pursuant to Section 2.14(b),
press releases and other information regarding the conclusion, the content and
performance of this Agreement shall only be made available to Third Parties,
particularly press agencies, with the prior written consent of the other Party,
which shall not unreasonably be withheld and shall in any case be given within
ten Business Days (with failure to provide or withhold such consent within such
period being deemed to be approval thereof).

 

ARTICLE III.

 

DISTRIBUTION
RIGHTS OF CYBERKNIFE SYSTEMS

 

3.1          Distribution Rights for Multiple
LINAC or Multi-Modality Purchases.  Concurrently with the execution of this
Agreement, Accuray shall grant to Siemens non-exclusive, worldwide distribution
rights for CyberKnife Systems in connection with Multiple LINAC Purchases or
Multi-Modality Purchases.  The terms of
such distribution rights shall be set forth in a definitive agreement attached
hereto as Exhibit C (the “Multiple LINAC Distribution Agreement”),
which shall be executed by the Parties concurrently with the execution of this
Agreement.  The Multiple LINAC
Distribution Agreement shall be substantially similar to Accuray’s standard
form distribution agreement, provided, however, that the Multiple
LINAC Distribution Agreement will also provide that (i) each proposed sale
of a CyberKnife System in connection with Multiple LINAC Purchases or
Multi-Modality Purchases shall be submitted by Siemens to Accuray for its
review, (ii) each such proposed sale is subject to Accuray’s written
approval, (iii) such approval shall be considered according to the process
set forth in Schedule 3.1(a)(iii), (iv) Accuray shall make
available for purchase by Siemens and the ultimate purchasers of the CyberKnife
System from Siemens installation, training, and service programs, (v) such
definitive agreement will terminate upon an applicable Termination Election
made in accordance with Section 10.3, and (vi) Siemens 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) and to using its
customary standard sales processes, including, without limitation, the MTA
process, 

 

21

 

with respect to sales of the
CyberKnife System.

 

3.2          Country and Region Specific
Distribution Rights. 
After the Effective Date, the Parties agree to negotiate in good faith
toward the execution of agreements (in addition to the Multiple LINAC
Distribution Agreement) granting Siemens distributorship rights for CyberKnife
Systems in certain countries and regions throughout the world.  The terms of such distribution rights shall
be set forth in a definitive agreement to be executed by the Parties.  The Parties shall use Accuray’s standard form
distribution agreement, attached hereto as Exhibit D (the “Form Distribution
Agreement”), as the basis for the negotiation of the specific terms of such
definitive agreement, provided, that at such time as the first such
definitive agreement is entered into, such first definitive agreement will form
the basis for subsequent negotiations, provided, however, that
(i) such distribution arrangements may be exclusive or non-exclusive in
any particular country or region, as mutually agreed by the Parties before
execution of such definitive agreement, (ii) any exclusive distribution
arrangement shall be subject to termination at the sole discretion of Accuray
for failure to meet commercially reasonable annual sales targets; provided,
however, that such distribution arrangements will not include any
requirement that Siemens purchase any minimum number of CyberKnife Systems in
any given period; and (iii) the distributor purchase price of the CyberKnife
Systems offered to Siemens in a geographic region shall be {*****} in such geographic region.

 

3.3          CyberKnife
Systems Distribution Obligations.

 

(a)           Accuray. 
Following the Effective Date, Accuray shall, at its own expense:

 

(i)            provide training on the CyberKnife System and its
functionality to Siemens’ marketing personnel, provided, however,
that the scope, duration, location, and timing of such training shall be
commercially reasonable and as set forth in the applicable distribution
agreement or as otherwise approved by the Steering Committee;

 

(ii)           assign a dedicated marketing point of contact for Siemens’
marketing and sales personnel, which employee may be based at any Siemens
facility as requested by the Steering Committee; and

 

(iii)          provide global sales and marketing support, including
global and regional sales training and support for individual sales
opportunities, to Siemens, provided, however, that the scope,
duration, location, availability, and timing of such training and support shall
be commercially reasonable and determined as set forth in the applicable
distribution agreement or as otherwise approved by the Steering Committee.

 

(b)           Siemens. 
Following the Effective Date, Siemens shall, at its own expense:

 

(i)            assign dedicated product marketing personnel for
CyberKnife System sales within the Siemens global sales channel, including at
least one person in Siemens’ Oncology Care Systems sales group with primary
responsibility, provided, however, that other than such person,
the number, location, and availability of such personnel shall be commercially
reasonable and as set forth in the applicable distribution agreement or as
otherwise approved by the Steering Committee; and

 

22

 

(ii)           include the CyberKnife System in each Oncology Care
Systems price book and sales operation system, such that all Siemens sales
representatives can access quotations for a CyberKnife System at least as
easily as all other systems then available for purchase from Siemens.

 

3.4          Determination of CyberKnife System
Sales.  The factors
set forth on Schedule 3.4 shall be used for purposes of determining when
a sale of a CyberKnife System has been completed, including, without
limitation, for determining whether the CyberKnife System sales targets set
forth in Schedule 2.3(b) and Section 2.5(d)(i)(2) have
been satisfied.  In addition, any
CyberKnife System sale by Accuray or any of its distributors (other than
Siemens) (i) that is completed (as determined pursuant to the factors set
forth in Schedule 2.3(b)), (ii) whose end-user has not received a
quote or documented formal presentation from Accuray demonstrating sales
engagement prior to receiving a quote or documented formal presentation from
Siemens demonstrating sales engagement, and (iii) whose end-user was
initially introduced to Accuray or any of its distributors (other than Siemens)
by Siemens within twelve months prior to the completion of such sale; provided,
however, that such introduction must be contemporaneously documented by
a signed letter from Siemens to Accuray documenting the end-user and the date
of the introduction, shall be counted as a sale of a CyberKnife System for
purposes of determining whether the CyberKnife System sales targets set forth
in Schedule 2.3(b) and Section 2.5(d)(i)(2) have been
satisfied.  For the avoidance of doubt,
nothing in the foregoing sentence shall (1) entitle Siemens to receive any
commission or other payment from Accuray in connection with any such sale by
Accuray or any of its distributors (other than Siemens) or (2) apply to
the replacement of any existing CyberKnife System.

 

ARTICLE IV.

 

STEERING
COMMITTEE AND ADVISORY COMMITTEE

 

4.1          Composition.  Promptly after the Effective Date, the
Parties shall establish two separate committees to coordinate and oversee, and
provide advice with respect to, the Parties’ efforts relating to this
Agreement.  A Steering Committee will be
formed to take such actions as are designated to be taken by the Steering
Committee in this Agreement.  The
Steering Committee shall consist of 4 voting members (each, a “Voting Member”),
with equal representation between the Parties. 
The initial two Voting Members appointed by Accuray shall be Accuray’s
Chief Operating Officer and VP Business Development.  The initial two Voting Members of Siemens
shall be employees of and be appointed by Siemens USA, and shall be designated
in due course.  There shall also be a
separate Advisory Committee established to provide guidance, advice,
recommendations and direction to the Steering Committee, but all decision
making capacity and voting rights shall vest with the Steering Committee in
accordance with the terms and provisions of this Agreement.  The Advisory Committee shall consist of 4
members, 2 to be appointed by Siemens and 2 to be appointed by Accuray (each an
“Advisory Member”).  The initial
Advisory Members appointed by Accuray shall be Accuray’s Chief Operating
Officer and VP Business Development.  The
initial Advisory Members appointed by Siemens shall be Siemens’ VP Research &
Development and VP Strategy and Innovation. 
Each Party may also appoint one alternate member to either Committee
(each, an “Alternate Member”), who may attend and vote at meetings of
the Steering Committee or may attend the Advisory Committee meetings, as
applicable, but only if one or more of such Party’s Voting 

 

23

 

Member or Advisory Member,
as the case may be, is not in attendance at such meeting.  Each Voting Member, Advisory Member and
Alternate Member may be appointed or removed in the sole discretion of the
Entity entitled to appoint such Voting Member, Advisory Member or Alternate
Member pursuant to this Section 4.1 by written notice to the other
Party.  Each Voting Member and Advisory
Member shall be a vice-president or higher level executive of the Entity
entitled to appoint such Voting Member or Advisory Member pursuant to this Section 4.1,
as the case may be.  The Alternate Member
of an Entity entitled to appoint such Alternate Member pursuant to this Section 4.1
may be any employee of such Entity, as determined in such Entity’s sole
discretion.

 

4.2          Meetings.  The Steering Committee shall meet, either
telephonically or in person, as often as necessary or appropriate in order to
carry out its duties and to reach agreement upon any approval required or
entitled to be given by the Steering Committee under this Agreement.  Similarly, the Advisory Committee may meet,
either telephonically or in person, as often as necessary or appropriate, or at
the request of the Steering Committee, in order to carry out its duties and
provide guidance and recommendations to the Steering Committee in a timely
manner.  Such meetings shall be at such
places and times as may be approved by the Steering Committee, provided,
however, that (i) the Steering Committee and the Advisory Committee
shall each have at least one in person meeting each quarter, alternating
between a location in the United States designated by the Voting Members or
Advisory Members, as the case may be, appointed by Accuray and a location in
Europe designated by the Voting Members and the Advisory Members appointed by
Siemens and (ii) each meeting shall have at least one member from each
Party in attendance.  The attendance of
three or more members of the Steering Committee shall constitute a quorum for
conducting business and voting at any meeting of the Steering Committee.  Minutes shall be kept of each meeting of the
Steering Committee and Advisory Committee, and copies thereof shall be provided
to each of the members.

 

4.3          Steering Committee Voting.  Each Voting Member present at a meeting of
the Steering Committee shall have one vote as to all matters presented for vote
at such meeting, provided, however, that if one or more of a
Party’s Voting Members is absent and such Party’s Alternate Member is present,
such Alternate Member shall have one vote as to all matters presented for vote
at such meeting.  All approvals,
consents, or actions which may or are required to be taken by the Steering
Committee pursuant to this Agreement shall be documented in writing and signed
by at least one of the representatives of each Party (and all references in
this Agreement to any such approval, consent, or action shall be construed
accordingly).  Any matters submitted to
the Steering Committee for approval as to which the Steering Committee cannot
reach a unanimous vote shall be escalated for resolution in accordance with the
escalation procedures described in Section 11.3 of this Agreement.  Within fifteen days following each Steering
Committee meeting, the Steering Committee shall prepare and provide to each
Party a reasonably detailed written summary report which shall describe any
approval, consent, or other action approved by the Steering Committee.

 

4.4          Steering Committee Review.  In addition to the other duties and
determinations that the Steering Committee is required or entitled to make
pursuant to this Agreement, the Steering Committee shall, at least annually,
conduct a formal product roadmap review (including a review of the Cayman
Products) and evaluation of potential collaboration opportunities between the
Parties.

 

24

 

4.5          Expenses.  Each Party shall bear all expenses incurred
in connection with such Party’s (and its Affiliates’) Voting Members’, Advisory
Members’ and/or Alternate Member’s attendance and participation at meetings of
either the Steering Committee or the Advisory Committee

 

ARTICLE V.

 

FUTURE
COLLABORATION

 

5.1          Collaboration on Future Product
Portfolio.  Subject to
the provisions of this Agreement, the Parties agree to use commercially
reasonable efforts to collaborate together on development of a {*****} that leverages each Party’s
respective technology and expertise.

 

5.2          Process.

 

(a)           Development of Concept.  Within six months of the Effective Date, the
Steering Committee shall develop a detailed joint business case and product
portfolio concept for {*****} that
leverages each Party’s respective technology and expertise (the “Concept”).

 

(b)           Approval and Pursuit of Concept.  After development of the Concept, the
Steering Committee shall, within three months of completion of the Concept,
either approve or disapprove the joint pursuit of the implementation of the
Concept.  If the Steering Committee
approves joint pursuit of the implementation of the Concept, the Steering
Committee will create a plan for the implementation of the Concept, including
detailed timelines and responsibilities for each Party (the “Concept Plan”).  The Steering Committee shall review and
update the Concept and the Concept Plan at least annually, at which point the
Steering Committee shall also approve or disapprove the Parties continued joint
pursuit of implementation of the Concept.

 

(c)           Negotiation Rights. 
If the Steering Committee does not approve the pursuit of the joint
implementation of the Concept or abandons joint implementation of the Concept
then the Parties agree to negotiate with each other in good faith for the grant
of a license and/or access to the other Party’s Intellectual Property,
technology, and subsystems necessary for implementation of the Concept or any
parts thereof.  The terms of such license
and/or access shall be as agreed upon by the Parties, but must be commercially
reasonable and at least as favorable to the other Party as those granted to any
Third Party.  By way of clarification,
nothing in this subsection shall require any Party to agree to a definitive
agreement granting the other Party any license or access.

 

5.3          Intellectual Property.  Prior to agreeing to pursue the joint
implementation of the Concept, the Steering Committee shall agree upon the
rights of each Party with respect to any Intellectual Property created in
connection with such efforts and the Parties shall enter into a definitive
agreement documenting such agreement (subject to good faith negotiations if any
aspect of such definitive agreement was not agreed upon by the Steering
Committee).  The execution of such
definitive agreement by the Parties shall be a prerequisite to the pursuit of
the Concept and adoption of the Concept Plan.

 

25

 

5.4          Other Collaboration.  In addition to the collaboration on the
Concept described above in Sections 5.1 through 5.3, the Parties agree to
cooperate in good faith to identify and explore additional opportunities for
ongoing collaboration on complementary technology developments (each, a “Future
Collaboration Opportunity”). 
Potential Future Collaboration Opportunities include, but are not
limited to, {*****}.  The Steering
Committee shall meet and consider any Future Collaboration Opportunity
identified during the Term and, subject to such committee’s approval of
continued evaluation of such Future Collaboration Opportunity, each Party shall
make available to the other Party such additional information regarding such
Party’s technology as is reasonably required in order to evaluate such Future
Collaboration Opportunity.  If the
Parties mutually agree to pursue development of any Future Collaboration
Opportunity, the Parties shall negotiate in good faith to enter into a
definitive agreement documenting the development of such Future Collaboration
Opportunity, including each Party’s rights and obligations thereunder.  In addition to the obligations above, the
Parties agree that, within 3 months of the Effective Date, the Steering
Committee shall meet to discuss the possibility of development of a product or
functionality that would allow for {*****} at {*****} as a Future Collaboration
Opportunity.

 

5.5          No Obligation.  By way of clarification, nothing in this Article V
or this Agreement shall require either Party or its members on the Steering
Committee to agree to any Concept or Future Collaboration Opportunity and
either Party or such Steering Committee members may determine, in its or their
sole discretion, not to do so, and nothing in this Article V shall
impose any restriction on either Party from developing future products, whether
or not related or similar to those contemplated by the Concept or any Future
Collaboration Opportunity, individually or in collaboration with any Third
Party, provided, however, that Siemens’ Oncology Care Systems
division shall not block or limit, or take any actions that are intended to
block or limit, Accuray’s ability to collaborate with any other division or
unit of Siemens.  In addition, and unless
the Parties otherwise agree in writing, nothing in this Article V
shall create a liability of either Party for the successful implementation of
any Concept or Future Collaboration Opportunity or otherwise create a contract
for works obligation (werkvertragliche
Verpflichtung).

 

ARTICLE VI.

 

REPRESENTATIONS
AND WARRANTIES

 

6.1          By Each Party.  Each Party hereby represents and warrants to
the other Party as of the Effective Date as follows:

 

(a)           Corporate Existence and Power.  Such Party (i) is a corporation duly
organized, validly existing and in good standing under the laws of the state,
province, or country in which it is incorporated; (ii) has the corporate
power and authority and the legal right to own and operate its property and
assets, to lease the property and assets it operates under lease, and to carry
on its business as it is now being conducted; and (iii) is in compliance
with all requirements of applicable law, except to the extent that any
noncompliance would not have a material adverse effect on the properties,
business, financial or other condition of such Party and would not materially
adversely affect such Party’s ability to perform its obligations under this
Agreement (a “Material Adverse Effect”).

 

26

 

(b)           Authorization and Enforcement of Obligations.  Such Party (i) has the corporate power
and authority and the legal right to enter into this Agreement and to perform
its obligations hereunder, and (ii) has taken all necessary corporate
action on its part to authorize the execution and delivery of this Agreement
and the performance of its obligations hereunder.  This Agreement has been duly executed and
delivered on behalf of such Party, and constitutes a legal, valid, binding
obligation, enforceable against such Party in accordance with its terms.

 

(c)           Consents. 
All necessary consents, approvals and authorizations of all governmental
authorities and other Entities required to be obtained by such Party in
connection with the execution of this Agreement have been obtained on or before
the Effective Date.

 

(d)           No Conflict. 
The execution and delivery of this Agreement and the performance of such
Party’s obligations hereunder (i) do not conflict with or violate any
requirement of applicable laws or regulations and (ii) do not conflict
with, or constitute a default under, any contractual obligation of such Party,
except where such conflict, violation or default would not have a Material
Adverse Effect on such Party.

 

6.2          By Accuray.  Accuray hereby represents and warrants to
Siemens that as of the Effective Date, except as otherwise disclosed in writing
to Siemens, Accuray has not received any notice from a Third Party alleging
that any Accuray Component (or the use of any Accuray Component in connection
with using, making or selling any product) infringes or misappropriates any
Intellectual Property of such Third Party.

 

6.3          By Siemens.  Siemens hereby represents and warrants to
Accuray that as of the Effective Date, except as otherwise disclosed in writing
to Accuray, Siemens has not received any notice from a Third Party alleging
that the {*****} or the TxT Couch (or the use of the {*****} or the TxT Couch in
connection with using, making or selling any product) infringes or
misappropriates any Intellectual Property of such Third Party.

 

ARTICLE VII.

 

IP
INDEMNIFICATION

 

7.1          Accuray IP Indemnification.  Accuray will defend or settle any action
brought against Siemens to the extent that it is based upon an Accuray-Related
Infringement Claim, and will pay any costs and damages made in settlement or
awarded against Siemens in final judgment resulting from any such claim,
subject to Section 7.3.

 

7.2          Siemens IP Indemnification.  Siemens will defend or settle any action
brought against Accuray to the extent that it is based upon a Siemens-Related
Infringement Claim, and will pay any costs and damages made in settlement or
awarded against Accuray in final judgment resulting from any such claim,
subject to Section 7.3.

 

7.3          IP Indemnity Claim Procedures.  The respective indemnification obligations of
Accuray and Siemens under Section 7.1 and Section 7.2 are subject to
condition that the party seeking to enforce any such indemnification
obligations (the “IP Indemnified Party”) must: (i) give the party
that is obligated to indemnify the IP Indemnified Party (the “IP
Indemnifying Party”) prompt notice of any such claim; (ii) give the IP
Indemnifying Party sole control of the 

 

27

 

defense and any related
settlement of any such claim; and (iii) give the IP Indemnifying Party, at
the IP Indemnifying Party’s expense, all reasonable information, assistance and
authority in connection with the foregoing. 
The failure to deliver prompt notice to the IP Indemnifying Party, if,
and to the extent, prejudicial to its ability to defend such claim, shall
relieve such IP Indemnifying Party of any liability to the IP Indemnified Party
under this Article, but the omission so to deliver notice to the IP
Indemnifying Party will not relieve it of any liability that it may have to the
IP Indemnified Party other than under this Article.  The IP Indemnifying Party will not be bound
by any settlement or compromise that the IP Indemnified Party enters into
without the IP Indemnifying Party’s express prior written consent.

 

7.4          Proportionate Allocation of
Responsibility.  The Parties
acknowledge that Third Parties may assert an action that includes claims
against both Parties that involve both Accuray-Related Infringement Claims and
Siemens-Related Infringement Claims (a “Joint Responsibility Infringement
Action”).  The Parties agree that, if
any Joint Responsibility Infringement Action is brought against them, the
Parties will reasonably cooperate with each other in the defense and settlement
of such action and that Accuray will be responsible for the proportion of the
aggregate costs of defense and settlement that is attributable to the
Accuray-Related Infringement Claim and Siemens will be responsible for the
proportion of the aggregate cost of defense and settlement that is attributable
to the Siemens-Related Infringement Claims; provided that neither Party
will settle any Joint Responsibility Infringement Action without the consent of
the other Party except to the extent a settlement solely affects
Accuray-Related Infringement Claims, in the event Accuray is the settling
Party, or Siemens-Related Infringement Claims, in the event that Siemens is the
settling Party. The Parties agree that Accuray shall pay the amount of any
damages awarded in any Joint Responsibility Infringement Action that is
attributable to Accuray-Related Infringement Claims and Siemens shall pay the
amount of any damages awarded in any Joint Responsibility Infringement Action
that is attributable to Siemens-Related Infringement.

 

7.5          Injunctions.

 

(a)           Accuray-Related Infringement Claims.  If, due to an Accuray-Related Infringement
Claim or other action in which it is alleged that Accuray Components infringe
the Intellectual Property of a Third Party, (x) Siemens’ rights to use and
distribute a Cayman Product under the terms of this Agreement are, or in the
Steering Committee’s opinion are likely to be, enjoined or (y) Accuray is
prevented from fulfilling its obligations under this Agreement, then Accuray
may, at its sole option and expense: (i) procure for Siemens the right to
continue to distribute such Cayman Product under the terms of this Agreement; (ii) replace
or modify such Cayman Product so that it is non-infringing without changing in
any material respect its functionality and performance according to the
applicable Functional Specification; or (iii) if options (i) and (ii) above
cannot be accomplished despite Accuray’s reasonable efforts, then either Party
may terminate this Agreement; provided, that in the case of such
termination, Accuray shall pay to Siemens a pro-rated portion of the
Arrangement Fee actually paid by Siemens to Accuray and the amount actually
paid by Siemens to Accuray for such Cayman Product based on a straight-line
depreciation calculated over a 5-year period beginning on the date of delivery
of the applicable Accuray Component, provided that all Accuray Components are
returned to Accuray in an undamaged condition.

 

28

 

(b)           Siemens-Related Infringement Claims.  If, due to a Siemens-Related Infringement
Claim or other action in which it is alleged that any Cayman Product (or any
part thereof incorporated in the Cayman Product) infringes the Intellectual
Property of a Third Party, Siemens’ rights to use and distribute a Cayman
Product under the terms of this Agreement are, or in the Steering Committee’s
opinion are likely to be, enjoined, then Siemens may, at its sole option and
expense: (i) procure for Siemens the right to continue to distribute such
Cayman Product under the terms of this Agreement; (ii) replace or modify
such Cayman Product so that it is non-infringing without changing in any
material respect its functionality and performance according to the applicable
Functional Specification; or (iii) if options (i) and (ii) above
cannot be accomplished despite Siemens’ reasonable efforts, then either Party
may terminate this Agreement; provided, that in the case of such
termination, Siemens shall pay to Accuray an amount equal to the actual costs
incurred by Accuray with respect to any Accuray Components or Interfaces for
which a purchase order has been submitted by Siemens or its Affiliates and for
which payment has not been made, and once paid for, any such Accuray Components
or Interfaces, in their then current state, shall be owned by Siemens and
delivered to Siemens by Accuray at the expense of Siemens.  For the avoidance of doubt, this Section 7.5(b) shall
not apply to any claim to the extent based solely on the Accuray Components or
any part thereof.

 

7.6          Limitations.  TO THE EXTENT PERMISSIBLE BY LAW, THE
FOREGOING PROVISIONS SET FORTH IN THIS ARTICLE VII SET FORTH EACH PARTY’S
SOLE AND EXCLUSIVE LIABILITY AND EACH PARTY’S SOLE AND EXCLUSIVE REMEDY FOR ANY
CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OR
PROPRIETARY RIGHTS OF ANY KIND.

 

ARTICLE VIII.

 

GENERAL
INDEMNIFICATION

 

8.1          Accuray General Indemnities.  In addition to Accuray’s indemnification
obligations set forth in Article VII, Accuray shall indemnify and hold
Siemens harmless from and against all losses, liabilities, damages and expenses
(including reasonable attorneys’ fees and costs) resulting from any claims,
demands, actions or other proceedings by any Third Party arising from (a) the
breach of any representation, warranty, or covenant by Accuray under this
Agreement or (b) the negligence or willful misconduct of Accuray in
performing its obligations under this Agreement.

 

8.2          Other General Indemnities.  In addition to Siemens’ indemnification
obligations set forth in Article VII, Siemens shall indemnify and hold
Accuray harmless from and against all losses, liabilities, damages, and
expenses (including reasonable attorneys’ fees and costs) resulting from any
claims, demands, actions or other proceedings by any Third Party arising from (a) the
breach of any representation, warranty, or covenant by Siemens under this
Agreement or (b) the negligence or willful misconduct of Siemens in
performing its obligations under this Agreement.

 

8.3          Procedure.  A Party (the “Indemnitee”) that
intends to claim indemnification under this Article shall promptly notify
the other Party (the “Indemnitor”) of any claim, demand, action or other
proceeding for which the Indemnitee intends to claim such indemnification.  The 

 

29

 

Indemnitor shall have the
right to participate in, and, to the extent the Indemnitor so desires, jointly
with any other indemnitor similarly noticed, to assume the defense thereof with
counsel selected by the Indemnitor; provided, however, that the
Indemnitee shall have the right to retain its own counsel, with the reasonable
fees and expenses to be paid by the Indemnitor, if the Indemnitee reasonably
determines that representation of the Indemnitee by counsel retained by the
Indemnitor would be inappropriate due to actual or potential differing
interests between the Indemnitee and any other Party represented by such counsel
in such proceedings.  The indemnity
obligations under this Article shall not apply to amounts paid in
settlement of any claim, demand, action or other proceeding if such settlement
is effected without the consent of the Indemnitor, which consent shall not be
unreasonably withheld or delayed.  The
failure to deliver notice to the Indemnitor promptly after the commencement of
any such action or other proceeding, if, and to the extent, prejudicial to its
ability to defend such action or other proceeding, shall relieve such
Indemnitor of any liability to the Indemnitee under this Article, but the
omission so to deliver notice to the Indemnitor will not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Article.  The Indemnitor shall not settle, or otherwise
consent to an adverse judgment in, any such action or other proceeding that
diminishes the rights or interests of the Indemnitee without the express
written consent of the Indemnitee.  The
Indemnitee, its employees and agents, shall cooperate fully, at the expense of
the Indemnitor, with the Indemnitor and its legal representatives in the
investigation of any claim, demand, action or other proceeding covered by this
indemnification.

 

ARTICLE IX.

 

ADDITIONAL
AGREEMENTS

 

9.1          Insurance.  Each Party shall maintain liability insurance
(including product liability insurance) with respect to conduct of its
obligations under this Agreement in such amounts as it customarily maintains
with respect to similar activities.  Each
Party shall maintain such insurance for so long as each continues to conduct
such obligations, and thereafter for so long as it would customarily maintain
insurance following cessation of similar activities.

 

9.2          Non-Solicitation.  Neither Party, without the prior written
consent of the other Party, shall, until March 27, 2012, either directly
or indirectly, solicit to hire or hire any officer, director, or employee of
the other Party.  Notwithstanding the
foregoing, nothing in this Section 9.2 shall prohibit (i) general
solicitations or advertisements of employment or hiring not directed at such
persons, it being understood that encouragement from a Third Party recruiter
without access to the Confidential Information of identification of the person
or relevant group of persons shall not constitute prohibited solicitation
hereunder, and (ii) employing any such person who initiates contact with a
Party or any of its Related Companies (as defined in the Confidentiality
Agreement) or any of their respective Representatives (as defined in the
Confidentiality Agreement) without any direct or indirect encouragement from
such Party.

 

9.3          Liability.

 

(a)           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.

 

30

 

 

 

(b)           Limitation on Liability.  WITHOUT AFFECTING STRICT PRODUCT LIABILITY
UNDER MANDATORY APPLICABLE LAW, ARTICLE VII 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.

 

(c)           Liability Cap. 
Without affecting Article VII 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:

 

(i)            for all claims relating to any breach of this Agreement
(or any other agreement entered into in connection with this Agreement other
than pursuant to Article III) (any such claim, a “Claim”) of which
the other Party was notified prior to the date that is twelve months after the
Initial Shipment Date, shall be limited to US$5,000,000; and

 

(ii)           for any Claim of which the other Party was notified on or
after the date that is twelve months after the Initial Shipment Date, shall be
limited to the aggregate amount of the purchase prices paid by Siemens or its
Affiliates to Accuray for the Accuray Components and/or Interfaces pursuant to
this Agreement (or any other Agreement entered into in connection with this
Agreement other than pursuant to Article III) 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.

 

Each
Party shall not unreasonably delay notification to the other Party of any
Claim.  The foregoing shall not be deemed
a waiver by any Party of any right to injunctive relief to the extent it is
available to such Party.

 

9.4          Confidential Information.  Each of the Parties agree that all
Confidential Information furnished to a Party and its Affiliates, employees,
consultants, and advisors in connection with this Agreement will be subject to
and the Parties’ rights and obligations with respect to such Confidential
Information shall be governed by the Confidentiality Agreement.

 

9.5          Compliance with Laws.

 

(a)           General.  In
connection with this Agreement, each of the Parties shall comply in all
material respects with the requirements of all applicable laws and regulations.

 

(b)           United States Laws. 
Each Party understands that, because this Agreement 

 

31

 

relates to products and
services of a corporation subject to the laws of the United States of America,
such Party 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:

 

(i)                                     Restrictive
Trade Practices or Boycotts, U.S. Code of Federal Regulations Title 15, Chapter
VII, Part 760;

 

(ii)                                  Foreign Corrupt
Practices Act, U.S. Code Title 15, § 78; and

 

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

 

(c)           No Illegal Activity.  Neither Party shall engage in any illegal
activities in connection with the performance of its obligations under this
Agreement.  A Party will not be held
responsible for any activities of the other Party or the other Party’s
Affiliates, sub-contractors, or 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 use commercially reasonable
efforts to ensure that a like clause to this Section 9.5 is included in
each agreement it has with any Affiliate, distributor or subcontactor related
to the performance of such Party’s obligations under this Agreement, and will
use commercially reasonable efforts to monitor the activities of such
Affiliates, distributors, and subcontractors closely.  Each Party assumes no liability for any
illegal activity of the other Party or any of its Affiliates, distributors, or
subcontractors and the other Party hereby indemnifies and holds such Party, and
its officers and assigns, harmless from any loss, damage and liability arising
from or in connection with any such illegal activities.  In the event either Party reasonably
determines that its goodwill has been or may potentially be materially affected
by any illegal activity of the other Party or any of its Affiliates,
distributors, or subcontractors, 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, for material breach under Section 10.2(a) with
no further liability to the other Party.

 

9.6          No Reverse
Engineering.

 

(a)           Accuray Covenant. 
Except as expressly permitted by applicable law, Accuray shall not
reverse-engineer, decompile, disassemble, or otherwise attempt to discover any
software, algorithms, concepts or other trade secrets embodied in the {*****}
or TxT Couch (or any part
thereof).

 

(b)           Siemens Covenant. 
Except as expressly permitted by applicable law, Siemens shall not
reverse-engineer, decompile, disassemble, or otherwise attempt to discover any
software, algorithms, concepts or other trade secrets embodied in the Accuray
Components  (or any part thereof).

 

9.7          Code of Conduct.

 

(a)           Accuray Compliance. 
During the Term, Accuray shall comply, in all material respects, with
the Siemens Code of Conduct attached hereto as Exhibit E (the “Code
of 

 

32

 

Conduct”).  Siemens shall give Accuray written notice of
any change to the Code of Conduct as soon as reasonably practicable.

 

(b)           Siemens Business Conduct Guidelines.  During the Term, Siemens shall comply, in all
material respects, with its Business Conduct Guidelines and other internal
regulations and guidelines.

 

9.8          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 F, with the exception of any provisions thereof related to
barcoding.

 

9.9          Taxes.  By way of clarification, all Accuray prices
referenced in this Agreement and any Exhibit, and all other amounts payable by
Siemens 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 Siemens 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.

 

9.10        Contract for Works.  For the avoidance of doubt, nothing in this
Agreement shall create a liability of either Party for a successful
implementation of any objective or shall otherwise create a contract for works
obligation (werkvertragliche Verpflichtung).

 

ARTICLE X.

 

TERM AND
TERMINATION

 

10.1        Term.  Unless terminated pursuant to other
provisions of this Agreement, this Agreement shall have an initial term
commencing from the Effective Date and expiring five years after such date (the
“Initial Term”).  Thereafter, this
Agreement will automatically renew for successive one year terms (each, a “Renewal
Term”), unless written notice of termination is given by either Party to
the other Party no less than six months prior to the expiration of the then
current Initial Term or Renewal Term. The Initial Term and any Renewal Term
shall be collectively referred to as the “Term;” provided, however,
that the Term shall end upon any termination of this Agreement in accordance
with its terms.

 

10.2        Termination.

 

(a)           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 event with a duration of less than six months pursuant to Section 11.5,
and if the breaching Party has not cured such breach to the other Party’s
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.  For the 

 

33

 

avoidance of doubt, an
inability to agree for any reason on: (i) the country-specific
distributorship terms contemplated by Article III, (ii) the future
cooperation matters contemplated by Article V, or (iii) the price or
other terms or conditions for the availability of an Improvement contemplated
by Section 2.11 shall not constitute a breach.

 

(b)           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.

 

(c)           Agreement of the Parties.  This Agreement may be terminated at any time
upon the written consent of the Parties.

 

10.3        Acquisition Changes.

 

(a)           Accuray Acquisition Change.  Upon an Accuray Acquisition Change, each of
Siemens and Accuray shall have the right to terminate: (i) the supply and
distribution rights and obligations created pursuant to Sections 2.5(e) and
2.6(b), (ii) the distribution agreement entered into pursuant to Section 3.1,
or (iii) this entire Agreement, subject, in each case, to the winddown
provisions of the applicable distribution agreement and Sections 2.5(e) and
2.6(b), as applicable.

 

(b)           Siemens Acquisition Change.  Upon a Siemens Acquisition Change, each of
Siemens and Accuray shall have the right to terminate: (i) the supply and
distribution rights and obligations created pursuant to Sections 2.5(e) and
2.6(b), (ii) the distribution agreement entered into pursuant to Section 3.1,
or (iii) this entire Agreement, subject, in each case, to the winddown
provisions of the applicable distribution agreement and Sections 2.5(e) and
2.6(b), as applicable.

 

(c)           Termination Election.  A Party may exercise its right to terminate
pursuant to this Section 10.3 (a “Termination Election”) by
providing written notice to the other Party within 60 days following the
closing of the Accuray Acquisition Change or the Siemens Acquisition Change, as
applicable.

 

10.4        Effect of
Expiration and Termination.  Expiration or termination of all or a portion
of this Agreement shall not relieve the Parties of any obligation accruing
prior to such expiration or termination. 
The provisions of Articles I, VII, VIII, IX, and XI and
Sections 2.5(e), 2.5(f), 2.6(b), 2.12, and 2.13 and this Section 10.4
shall survive the expiration or termination of this Agreement, subject to the
terms thereof.  In addition, upon a
termination of this Agreement, each of Siemens and Accuray shall continue to
make available to Cayman Product customers support services on commercially
reasonable terms, including, without limitation, spare parts for the Cayman
Products for a minimum period of 10 years after the last shipment of a Cayman 

 

34

 

Product or Upgrade pursuant
to this Agreement.

 

ARTICLE XI.

 

MISCELLANEOUS

 

11.1        Survival of Warranties.  The representations and warranties of the
Parties contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and shall in no way be affected by any
investigation or knowledge of the subject matter thereof made by or on behalf
of any Party.

 

11.2        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.

 

11.3        Dispute Resolution.

 

(a)           Executive Mediation.  Except as expressly otherwise provided in
this Agreement, any contractual issues or disputes arising out of or related to
this Agreement shall first be brought before the Steering Committee for
resolution.  The Steering Committee shall
convene at least one in person meeting seeking to resolve such issue or
dispute.  If the Steering Committee has
not resolved such issue or dispute within 14 days of such meeting, the matter
shall be submitted to the Chief Executive Officer of Accuray and the Chief
Executive Officer of Siemens’ Healthcare Oncology Care Systems division for
resolution.  Such officers shall have an
in person meeting within 30 days of the date on which the matter was submitted
to them.  If such officers are unable to
resolve the matter directly, they may, by mutual agreement utilize such dispute
resolution methods, including mediation, as are mutually agreed.  If no resolution is reached within 15 days
following the meeting of such officers, unless otherwise mutually agreed, the
dispute shall be submitted to arbitration pursuant to Section 11.3(b).

 

(b)           Arbitration Procedure.  Any controversy or claim relating to, arising
out of, or in any way connected to any provision of this Agreement shall be
finally resolved by final and binding arbitration in accordance with this Section 11.3(b) by
a panel of three arbitrators, to be conducted in Zurich, Switzerland.  Each of the Parties may appoint one
arbitrator having reasonable experience in transactions of the type
contemplated by this Agreement (except to the extent it is not reasonably
practicable to appoint an arbitrator with such experience), and the two
arbitrators so chosen shall agree upon the third arbitrator.  Unless the Parties agree otherwise, the
arbitration shall be conducted in accordance with the Rules of Arbitration
of the International Chamber of Commerce (ICC), the language to be used in the
arbitration proceedings shall be English, and if and to the extent the Rules of
Arbitration of the International Chamber of Commerce are silent with respect to
any procedural aspects, said rules shall be supplemented by the provisions
of the German Code of Civil Procedure (Zivilprozessordnung).  The decision of the arbitrators shall be
final, nonappealable and binding upon the Parties.  Such decision may be entered in any court of
competent jurisdiction for the enforcement thereof.  With regard to any arbitration commenced
pursuant to this section, the International Bar Association (IBA) Rules on
the Taking of Evidence in International Commercial Arbitration of June 1,
1999 shall apply. The 

 

35

 

work product of an (outside
or in-house) attorney and communication between an (outside or in-house)
attorney and a client shall be subject to the privilege provided for in Article 9,
Section 2 of said IBA Rules and shall not be disclosed.  The arbitrators shall issue a written opinion
setting forth their decision and the reasons therefor within thirty days after
the arbitration proceeding is concluded.

 

(c)           Injunctive Relief, Etc.  By way of clarification, each Party shall
have the right to seek conservatory or interim measures in any court of
competent jurisdiction.  In addition,
each Party shall have the right to have recourse to and shall be bound by the
Pre-Arbitral Referee Procedure of the ICC in accordance with its respective rules without
having to fulfill the prerequisites of Section 11.3(a).

 

11.4        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:

 

	
  If
  to Accuray:

  	
   

  
	
   

  	
   

  
	
   

  	
  Accuray
  Incorporated

  
	
   

  	
  1310
  Chesapeake Terrace

  
	
   

  	
  Sunnyvale,
  CA 94089

  
	
   

  	
  USA

  
	
   

  	
  Attn:
  General Counsel

  
	
   

  	
  Facsimile:
  +1 (408) 789-4205

  
	
   

  	
   

  
	
   

  	
  with
  a copy (which shall not constitute notice) to:

  
	
   

  	
   

  
	
   

  	
  Gibson,
  Dunn & Crutcher LLP

  
	
   

  	
  1881
  Page Mill Road

  
	
   

  	
  Palo
  Alto, California 94304

  
	
   

  	
  USA

  
	
   

  	
  Attn:
  Joseph Barbeau

  
	
   

  	
   

  
	
  If
  to Siemens:

  	
   

  
	
   

  	
   

  
	
   

  	
  Siemens
  AG

  
	
   

  	
  Henkestr.
  127

  
	
   

  	
  91054
  Erlangen

  
	
   

  	
  Germany

  
	
   

  	
  Attn:
  Healthcare General Counsel, Ritva Sotamaa

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  with
  a copy (which shall not constitute notice) to:

  

 

36

 

	
   

  	
  Siemens
  AG Oncology Care Systems

  
	
   

  	
  Henkestr.
  127

  
	
   

  	
  91054
  Erlangen

  
	
   

  	
  Germany

  
	
   

  	
  Attn:
  Mr. Holger Schmidt

  

 

11.5        Force
Majeure.  In the event that a Party is prevented or
delayed from fulfilling or performing any of its obligations under this
Agreement (other than an obligation to pay money) due to the occurrence of
causes beyond the reasonable control of such Party, including but not limited
to fires, floods, embargoes, wars, acts of war (whether war is declared or
not), acts of terrorism, insurrections, riots, civil commotions, strikes,
lockouts or other labor disturbances, acts of God or acts, omissions or delays
in acting by any governmental authority, then such Party’s performance shall be
excused, and the time for performance shall be extended, for the period of
inability or delay due to such occurrence; provided, however,
that such Party shall have used its commercially reasonable efforts to avoid
such inability or delay, and such Party shall have given prompt written notice
to the other Party of such occurrence; provided, further, that if
any such prevention or delay is for a period of greater than six months, the
other Party shall have the option to terminate this Agreement in its entirety
pursuant to Section 10.2(a).

 

11.6        Assignment;
Successors.  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

 

(a)           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 this Agreement upon an
Accuray Acquisition Change or a Siemens Acquisition Change; and

 

(b)           Siemens may assign any of its rights
and/or obligations under this Agreement, whether in whole or in part, to
Siemens USA (any such assignment, a “Siemens Assignment”), subject to
the satisfaction of the following conditions:

 

(i)            (1) Siemens and Siemens USA
shall deliver to Accuray a draft of an Assignment and Assumption Agreement (an “Assignment
Agreement”) that contains the provisions described in subsections (iii) —
(viii) below at least 10 Business Days prior to the planned execution
thereof; (2) Accuray shall be given the opportunity to provide written
comments to Siemens and Siemens USA on such draft Assignment Agreement, such
comments to be received no later than 5 Business Days after Accuray’s receipt
of such draft Assignment Agreement; and (3) Siemens and Siemens USA shall
consider any such comments in good faith and shall promptly inform Accuray of
any such comments that they determine in good faith will not be included in the
final version of such Assignment Agreement;

 

(ii)           Siemens and Siemens USA shall deliver
a fully executed copy of such Assignment Agreement to Accuray promptly
following its execution;

 

37

 

(iii)          Siemens USA shall expressly assume all
obligations of Siemens under this Agreement that are being assigned pursuant to
such Assignment Agreement (the “Assigned Obligations”);

 

(iv)          pursuant to such Assignment Agreement
or otherwise, Siemens shall have transferred, licensed or otherwise granted to
Siemens USA all rights and assets, including without limitation, Intellectual
Property, necessary for Siemens USA to fulfill the Assigned Obligations
following the Siemens Assignment;

 

(v)           pursuant to such Assignment
Agreement, Siemens shall covenant to transfer, license, or otherwise grant to
Siemens USA any additional rights or assets which may later be identified as
necessary for Siemens USA to fulfill the Assigned Obligations;

 

(vi)          such Assignment Agreement shall
contain a representation and warranty in favor of Accuray stating that Siemens
has transferred, licensed, or otherwise granted to Siemens USA all rights and
assets, including without limitation, Intellectual Property, reasonably
necessary for Siemens USA to fulfill the Assigned Obligations;

 

(vii)         Accuray shall be a third party
beneficiary of such Assignment Agreement and shall have the right to enforce
any of the rights or obligations described in subsections (iii) — (vi) above
of Siemens or Siemens USA under such Assignment Agreement; and

 

(viii)        The Siemens Assignment shall not relieve
Siemens of any of its obligations under this Agreement not assigned to Siemens
USA pursuant to such Assignment Agreement (or any other Assignment Agreement)
and Siemens shall remain liable to Accuray for any failure by Siemens USA to
perform any Assigned Obligations; provided, however, that Accuray
shall not be entitled to require Siemens to perform any such Assigned
Obligation.

 

(c)           Siemens may, subject to the prior,
written approval of Accuray, assign any of its rights and/or obligations under
this Agreement, whether in whole or in part, to any other Affiliate of Siemens,
subject to such assignment to such Affiliate complying with the provisions set
forth in Section 11.6(b).

 

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.

 

11.7        Severability.  Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision in such
jurisdiction, and this Agreement shall be reformed, construed and enforced in
such jurisdiction to the fullest extent permitted to give effect to the
intention of the parties, and as if such invalid, illegal or unenforceable
provision had never been contained herein.

 

11.8        Entire
Agreement.  This Agreement (including the Exhibits and
Schedules hereto) constitute the entire agreement between the parties with
respect to the subject matter 

 

38

 

hereof and thereof; provided,
that the Parties acknowledge and agree that Accuray will deliver the Cayman 1
Initial Plan version 10 to Siemens concurrently with the execution of this
Agreement.  This Agreement supersedes all
prior written agreements, arrangements, communications and understandings and
all prior and contemporaneous oral agreements, arrangements, communications and
understandings between the parties with respect to the subject matter hereof
and thereof.  Notwithstanding any oral
agreement or course of action of the parties to the contrary, no Party shall be
under any legal obligation to enter into or complete the transactions
contemplated hereby unless and until this Agreement shall have been executed
and delivered by each of the parties.

 

11.9        Expenses
and Attorneys’ Fees. 
Except as otherwise provided herein, all fees and expenses incurred in
connection with or related to the execution of this Agreement shall be paid by
the Party incurring such fees or expenses. If any action at law or in equity
(including arbitration) is necessary to enforce or interpret the terms of any
of this Agreement, the substantially prevailing Party shall be entitled to reasonable
attorneys’ fees, costs and necessary disbursements in addition to any other
relief to which such Party may be entitled.

 

11.10      Independent
Contractors; No Partnership.  It is expressly agreed that Accuray and
Siemens shall be independent contractors and that the relationship between the
two Parties shall not constitute a partnership, joint venture, agency or other
unincorporated organization, through or by means of which any business,
financial operation, or venture is carried on. Neither Party shall have the
authority to make any statements, representations or commitments of any kind,
or to take any action, which shall be binding on the other, without the prior
consent of the other Party to do so. Neither Party shall have the right to
share in the net profits of the other and neither Party shall have an
obligation to share losses.

 

11.11      Amendment and Waiver.  Except as otherwise provided herein, any term
of this Agreement may be amended, terminated or waived only with the written
consent of the Parties.  The waiver by
either Party of (i) any right hereunder, (ii) the failure to perform,
or (iii) a breach by the other Party shall not be deemed a waiver of any
other right hereunder or of any other breach or failure by the other Party
whether of a similar nature or otherwise.

 

11.12      No Presumption Against Drafting Party.  Each Party acknowledges that it has been
represented by counsel in connection with this Agreement and the transactions
contemplated by this Agreement. 
Accordingly, any rule of law or any legal decision that would
require interpretation of any claimed ambiguities in this Agreement against the
drafting Party has no application and is expressly waived.

 

11.13      No Third Party Beneficiaries.  Nothing in this Agreement, express or
implied, is intended to or shall confer upon any Entity other than the parties
and their respective successors and permitted assigns any legal or equitable
right, benefit or remedy of any nature under or by reason of this Agreement.

 

11.14      Affiliates.  The rights and obligations of
Accuray under this Agreement shall apply to Accuray’s subsidiary Affiliates,
and the rights and obligations of Siemens under this Agreement shall apply to
Siemens’ subsidiary Affiliates, provided that Accuray and Siemens shall
be fully responsible for the performance by their respective Affiliates of
their respective 

 

39

 

obligations under this
Agreement.

 

11.15      Counterparts.  This Agreement may be executed
in two or more counterparts, all of which shall be considered one and the same
instrument and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.

 

11.16      Facsimile Signatures.  This Agreement may be executed by facsimile
signature and a facsimile signature shall constitute an original for all
purposes.  Original copies of such
signatures shall be delivered without undue delay after delivery of such
facsimile signatures.

 

11.17      Interpretation.  When a reference is made in this Agreement to
a Section, Article, Exhibit, or Schedule such reference shall be to a Section,
Article, Exhibit, or Schedule of this Agreement unless otherwise
indicated.  The table of contents and
headings contained in this Agreement are for convenience of reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.  All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require.  Any capitalized terms used in any
Exhibit or Schedule but not otherwise defined therein shall have the
meaning as defined in this Agreement. 
All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth herein.  The word “including” and words of similar
import when used in this Agreement will mean “including, without limitation,”
unless otherwise specified.

 

11.18      Waiver of Jury Trial.  EACH PARTY HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

11.19      Waiver of United States Jurisdiction.  Other than pursuant to Section 11.3(c),
each Party hereby waives all right to initiate or seek resolution of any
action, proceeding, or counterclaim arising out of or relating to this
Agreement or the transactions contemplated hereby in any court located in the
United States of America.

 

11.20      Time of Essence.  Time is of the essence with regard to all
dates and time periods set forth or referred to in this Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

40

 

IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
set forth above.

 

 

	
  ACCURAY INCORPORATED

  	
   

  	
  SIEMENS
  AKTIENGESELLSCHAFT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Euan Thompson

  	
   

  	
  By:

  	
  /s/
  Christian Klaussner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  June
  7, 2010

  	
   

  	
  Date:

  	
  June
  8, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Euan
  Thomson

  	
   

  	
  Name:

  	
  Christian
  Klaussner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President
  and CEO

  	
   

  	
  Title:

  	
  HIM
  OCS CFO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ACCURAY INCORPORATED

  	
   

  	
  SIEMENS
  AKTIENGESELLSCHAFT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Darren Milliken

  	
   

  	
  By:

  	
  /s/
  Holger Schmidt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  June
  7, 2010

  	
   

  	
  Date:

  	
  June
  8, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Darren
  Milliken

  	
   

  	
  Name:

  	
  Holger
  Schmidt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Senior
  VP and General Counsel

  	
   

  	
  Title:

  	
  HIM
  OCS CEO

  

 

 

[Signature
Page to Strategic Alliance Agreement]

 

 

 

 

 

SCHEDULE A-1

 

Accuray Competitors

 

{*****}

{*****}

{*****}

{*****}

{*****}

 

 

SCHEDULE A-2

 

Designated Improvements

 

(i)            Accuray’s {*****} product,
either:

(a)           Version {*****} of Accuray’s {*****} product
(scheduled for {*****}); or alternatively

(b)           the then-current commercially available version of
Accuray’s {*****} product, but only if Siemens has made available to Accuray
its {*****} technology (or a mutually agreed on alternative technology or
product) and such technology has been integrated into a prototype of an Accuray
product;

(ii)           {*****} of the existing (as
of the Effective Time) {*****} system used in the Cayman 1 Product (excluding
{*****}).

 

 

SCHEDULE A-3

 

Siemens Competitors

 

{*****}

{*****}

{*****}

{*****}

{*****}

{*****}

 

 

SCHEDULE 2.2(c)

 

Accuray Calculation
Standards

 

Calculations
of Accuray expenditures and expenses to include the following elements:

 

	
  (i)

  	
   

  	
  Actual
  man hours at the rate of US${*****} per hour;

  
	
  (ii)

  	
   

  	
  Actual
  cost of materials;

  
	
  (iii)

  	
   

  	
  Depreciation
  of capital assets;

  
	
  (iv)

  	
   

  	
  Actual
  consulting expenses incurred; and

  
	
  (v)

  	
   

  	
  Finance/administrative fee
  equal to {*****}% of Accuray’s total finance/administrative expenses.

  

 

 

SCHEDULE 2.2(d)(i)

 

Arrangement Fee

 

Arrangement
Fee shall be payable as follows:

 

(i)            US${*****} on the later of (A) {*****}
and (B) the date that Accuray has provided to Siemens the Cayman 1
Detailed Plan, but Accuray’s obligation to provide such plan shall be a
condition only if Siemens has provided to Accuray two full days of engineering
support for development of such plan prior to {*****};

 

(ii)           US${*****} on the later of (A) 510(k) Submission
and (B) {*****};

 

(iii)          US${*****} on the latest of (A) the
availability of Accuray Components and Interfaces for the Cayman 1 Product,
prototypes of which have been accepted pursuant to Section 2.2(e), (B) the
Approval Date, and (C) {*****};

 

(iv)          US${*****} on the later of (A) {*****}
and the Approval Date; and

 

(v)           If the Initial Shipment Date
has not occurred within {*****} of the 510(k) Clearance, an amount equal
to the lesser of (A) US${*****} and (B) an amount equal to (1) the
total amount of expenditures and expenses (as calculated in accordance with the
provisions set forth in Section 2.2(c)) incurred by Accuray in connection
with satisfying its obligations under, and pursuing the objectives of, Section 2.2
jointly with Siemens less (2) any portion of the Arrangement Fee
actually paid by Siemens prior to such date (if such amount is greater than
zero, otherwise zero).  By way of
clarification, any amount actually paid to Accuray pursuant to this clause (v) shall
be treated as part of the Arrangement Fee, including, without limitation for
purposes of the calculations set forth in Section 2.2(d)(iii) and in
the definition of “Accuray Excess Expenditures.”

 

For
the avoidance of doubt, the total amount of the Arrangement Fee payable by
Siemens to Accuray shall be limited to the lesser of (1) US${*****} plus
any additional amounts payable to Accuray pursuant to clause (v) above and
(2) the total amount of expenditures and expenses (as calculated in
accordance with the provisions set forth in Section 2.2(c)) incurred by
Accuray in connection with satisfying its obligations under, and pursuing the
objectives of, Section 2.2 jointly with Siemens.

 

 

SCHEDULE 2.2(d)(ii)

 

Arrangement Fee Uses

 

1.             Development of the
following:

 

(a)           interface to the {*****}
{*****} system;

(b)           interface to the {*****}
{*****} system;

(c)           interface to the {*****}
{*****} system;

(d)           interface to the {*****};
and

(e)           interface to share patient data between the Accuray
Components and the {*****};

 

2.             Adaptation of Accuray’s
{*****} (including {*****}) for {*****} and {*****} to {*****} geometry;

 

3.             Adaptation of the {*****} to
{*****} use cases {*****}; and

 

4.             U.S. and E.U. regulatory
approval for the Accuray Components and Interface.

 

 

SCHEDULE 2.3(b)

 

Conditions to Completion of
Development of the Cayman 2 Product

 

Accuray
shall have no obligation to complete development of the Cayman 2 Product unless
and until the following conditions have been satisfied:

 

(i)            Siemens has sold at least
{*****} CyberKnife Systems pursuant to the distributorship relationships with
Accuray created pursuant to Article III;

 

(ii)           Siemens’ exclusivity rights
as the purchaser of the Accuray Components and Interface  granted
to Siemens by Accuray pursuant to Section 2.5(a), have not been
terminated; and

 

(iii)          at least {*****} months have
passed since the Initial Shipment Date.

 

 

 

 

SCHEDULE 2.4

 

REGULATORY FILING PROCESS
FOR CAYMAN PRODUCTS

 

General
Approach

 

a)              Siemens obligations

 

i)                 Siemens to be responsible
for creating, maintaining, and providing the design history file (“DHF”),
design history record (“DHR”), device master record (“DMR”), CE
Technical File, CE mark, and engineering change orders (“ECO”) for the
Cayman Products and the {*****}.

 

ii)              Siemens will be deemed to be
the legal manufacturer for the Cayman Product (other than the Upgrade), except
in countries where Accuray does not have a wholly owned Subsidiary, in which
countries Siemens will be deemed to be the legal manufacturer for the Cayman
Product (including the Upgrade).

 

b)             Accuray obligations

 

i)                 Accuray to be responsible
for creating, maintaining, and providing the DHF, DHR, DMR, CE Technical File,
CE mark, and ECO for the Accuray Components and the Interface.

 

ii)              Accuray will be deemed to be
the legal manufacturer for the Upgrade in each country in which Accuray has a
wholly-owned subsidiary.

 

North
American Regulatory Filings

 

a)              Siemens obligations

 

i)                 Siemens to file for and
obtain FDC Act 510(k) Clearance to add the Accuray Components and the
Interface to the {*****}.

 

ii)              Siemens responsible for
maintenance of and responses to the DMR, recalls and complaints related to the
Cayman Products (including the Upgrade).

 

(1)          To the extent any recall or
complaint relates to an Accuray Component or the Interface, Accuray will
provide commercially reasonable support to Siemens, at Accuray’s expense, in
addressing such complaint or recall.

 

iii)           Siemens will be deemed to be
the Legal Manufacturer of the Cayman Products (other than the Upgrade).

 

b)             Accuray obligations

 

i)                 Accuray to file for and
obtain standalone safety mark and FDC Act 510(k) Clearance for the Accuray
Components and the Interface.

 

ii)              Accuray will be deemed to be
the legal manufacturer for the Upgrade.

 

European
Union Regulatory Filings

 

a)              Siemens obligations

 

i)                 Siemens to be responsible
for filing for and obtaining the CE Technical File and CE mark for the Cayman
Products (including the Upgrade).

 

ii)              Siemens to be responsible
for obtaining an Article 12 declaration for the Cayman Product and the
Upgrade.

 

iii)           Siemens will be deemed to be
the legal manufacturer of the Cayman Products (other than the Upgrade).

 

 

iv)          Siemens to be responsible
for maintenance of and responses to vigilance reports, recalls and complaints
relating to the Cayman Product (including the Upgrade).

 

(1)          To the extent any report,
recall, or complaint relates to an Accuray Component or the Interface, Accuray
will provide commercially reasonable support to Siemens, at Accuray’s expense,
in addressing such complaint or recall.

 

b)             Accuray obligations

 

i)                 Accuray shall, at its own
expense, provide commercially reasonable levels of support to assisting Siemens
with its obligations listed in subsection (a) above if reasonably
requested by Siemens.

 

ii)              Accuray will be deemed to be
the legal manufacturer of the Upgrade.

 

Other
Countries

 

a)              Parties to utilize Siemens
organization and local Siemens regulatory approval presence to file and obtain
required regulatory licenses and approval in other jurisdictions.

 

i)                 Approach in each country to
be handled according to local marketing/sales strategy and regulatory
requirements, taking into consideration the “General Approach” outlined above.

 

ii)              The Party making the
registration will receive commercially reasonable support from the other Party
as required, including through the provision of all required documents.

 

b)             Siemens to be responsible
for maintenance of and response to complaint handling with respect to the
Cayman Product (including the Upgrade).

 

i)                 To the extent any report,
recall, or complaint relates to an Accuray Component or the Interface, Accuray
will provide commercially reasonable support to Siemens, at Accuray’s expense,
in addressing such complaint or recall

 

c)              Accuray shall, at its own
expense, provide commercially reasonable levels of support to assisting Siemens
with the filing of and obtaining the regulatory licenses and approvals
described in subsection (a) above if reasonably requested by Siemens.

 

 

SCHEDULE 2.5(d)(i)(1)

 

Cayman Products and Cayman
Upgrades Sales Targets

 

For
the avoidance of doubt, sales of both Cayman Products and Cayman Upgrades shall
be taken into account for determining whether the below targets have been
satisfied.

 

	
  Sales
  Year

  	
   

  	
  Target

  
	
  1

  	
   

  	
  {*****}

  
	
  2

  	
   

  	
  {*****}

  
	
  3

  	
   

  	
  {*****}

  
	
  4
  and thereafter

  	
   

  	
  As
  determined in good faith by the Steering Committee

  

 

A
sale of a Cayman Product or a Cayman Upgrade shall be deemed to have been
completed upon satisfaction of the following:

 

·        Delivery of a purchase order
by Siemens to Accuray, acceptance of such purchase order by Accuray, and proof
of sell-through to the end-user; and

 

·        A defined installation date
within 12 months of the acceptance of such purchase order.

 

 

SCHEDULE 2.5(d)(i)(2)

 

CyberKnife System Sales
Targets

 

	
  Siemens
  Fiscal Year

  	
   

  	
  Target

  
	
  2010

  	
   

  	
  {*****}

  
	
  2011

  	
   

  	
  {*****}

  
	
  2012

  	
   

  	
  {*****}

  
	
  2013

  	
   

  	
  {*****}

  
	
  2014

  	
   

  	
  {*****}

  
	
  2015
  and thereafter

  	
   

  	
  As
  determined in good faith by the Steering Committee

  

 

 

SCHEDULE 2.5(f)

 

System Interface License Fee

 

US${*****}.

 

 

SCHEDULE 2.7(a)

 

Cayman 1 Purchase Prices

 

Price Option 1 (Applicable only if (i) explicitly included in the
accepted purchase order and (ii) Accuray has a direct service organization
in the applicable country)

 

Accuray
to provide installation and 12 months of warranty (parts and labor)

 

·                  Package 1 (including {*****}) price is EUR
{*****} to Siemens

 

·                  Package 2 (excluding {*****}) price is EUR
{*****} to Siemens

 

Price Option 2

 

Siemens
to provide installation, warranty labor and freight, Accuray to cover 12 months
of fourth-level support (i.e., engineering support to Siemens Headquarter
Service Center) and warranty parts.

 

·                  Package 1 (including {*****}) price is EUR
{*****} to Siemens

 

·                  Package 2 (excluding {*****}) price is EUR
{*****} to Siemens

 

 

SCHEDULE 2.7(c)

 

Installation Prices

 

Prices
for “Price Option 1” identified in Schedule 2.7(a) include all
installation charges.

 

For
“Price Option 2” identified on Schedule 2.7(a), the following
installation charges will apply:

 

·                  Package 1 is $US{*****}

 

·                  Package 2 is $US{*****}

 

 

SCHEDULE 3.1(a)(iii)

 

Accuray Approval Process for
Multiple LINAC Purchases

 

·                  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.

 

 

SCHEDULE 3.4

 

Determination of CyberKnife
System Sales

 

A
sale of a CyberKnife System shall be deemed to have been completed upon
satisfaction of the following:

 

·        Delivery of a purchase order
by Siemens to Accuray, acceptance of such purchase order by Accuray, and proof
of sell-through to the end-user;

 

·        A defined installation date
within 30 months of the acceptance of such purchase order; and

 

·        Delivery by Siemens to
Accuray of a US$100,000 deposit.

 

 

EXHIBIT A

 

Definitions

 

{*****}

 

“510(k) Clearance”
means 510(k) clearance for the Accuray Components and Interface for the
Cayman 1 Product.

 

“510(k) Submission”
means the initial submission of the Premarket Notification to the FDA under
Section 510(k) of the FDC Act for the Accuray Components and Interface for the
Cayman 1 Product.

 

“Accuray Acquisition Change” means either
of the following:

 

(a)           a Change in Control of Accuray in
which the acquiring entity is a Siemens Competitor or an Affiliate of a Siemens
Competitor; or

 

(b)           a Change in Control of a Siemens
Competitor in which the acquiring entity is Accuray or an Affiliate of Accuray.

 

“Accuray Competitors” means those direct
competitors of Accuray listed on Schedule A-1 or other Entities that, at the
applicable time of determination, directly compete with Accuray.

 

“Accuray Components”
means the following products owned or offered by Accuray, as may be modified
pursuant to the Cayman 1 Initial Plan, the Cayman 1 Detailed Plan, the
Cayman 1 Functional Specifications, the Cayman 2 Detailed
Plan, or the Cayman 2 Functional Specifications: (a) the {*****} and (b) (i) in the case of a Cayman 1 Product,
{*****} and {*****}
hardware and software (including {*****})
combining {*****} and {*****} for {*****} and {*****}
or (ii) in the case of a Cayman 2 Product, {*****} and {*****}
hardware and software (including {*****})
combining {*****} and {*****} for {*****} and {*****},
including {*****}.  For purposes of the definition of Accuray
Components, references to the word “software” shall mean, except as
specifically set forth in the definition of “Cayman 2 Product,” the current
version of such software as of the Effective Date, or as otherwise agreed in
writing by the Parties.

 

“Accuray Excess Expenditures” means (i) the aggregate amount of expenditures and expenses of Accuray
(as calculated in accordance with the provisions set forth in Section 2.2(c))
incurred in connection with satisfying its obligations under, and pursuing the
objectives of, Section 2.2 jointly with Siemens less (ii) the amount of
the Arrangement Fee Accuray has actually received from Siemens (and which has
not been repaid by Accuray to Siemens).

 

“Accuray Gross Profits”
means the product of (i) the aggregate amount actually paid by Siemens or its
Affiliates to Accuray during the eighteen months following the Initial Shipment
Date in connection with the purchase of Accuray Components and/or Interfaces
pursuant to this Agreement and (ii) {*****} percent.

 

 

“Accuray-Related Infringement Claim” means any action brought against Siemens to the extent that it is based
upon a Third Party claim that an Accuray Component used within the Scope
infringes any Patent issued in any Relevant Accuray Country or any copyright or
misappropriates any trade secret, excluding such claim to the extent resulting
from: (i) use of the Interface, (ii) use of any Accuray Component not in
accordance with the applicable Functional Specification; (iii) use or
combination of the Accuray Components with other items, such as the {*****} or
any other equipment, processes, programming applications or materials not
furnished by Accuray; (iv) modifications to an Accuray Component not made by or
at the express written direction of Accuray; (v) Siemens’ failure to use
updated or modified Accuray Components provided by Accuray; provided
that such updated or modified Accuray Components would have avoided the
infringement in question, or (vi) Siemens’ use or distribution of an Accuray
Component other than in accordance with this Agreement.

 

“Advisory Committee”  means the
Advisory Committee established to provide guidance to the Steering Committee,
as more fully described in Article IV.

 

“Affiliate” means, with respect to any
Entity, any other Entity which directly or indirectly controls, is controlled
by, or is under common control with, such Entity.  An Entity shall be regarded as in control of
another Entity if it owns, or directly or indirectly controls, more than fifty
percent (50%) of the voting stock or other ownership interest of the other
Entity (or such lesser percentage as is the maximum percentage permitted under
applicable law for foreign ownership where control is exercised by contract or
otherwise).

 

“Approval Date”
means the earlier of (i) both 510(k) Clearance and the
grant of a CE Mark for the Accuray Components and Interface for the Cayman 1
Product and (ii) twelve months after 510(k) Submission, provided that
the Cayman 1 Product has been CE Marked.

 

“Arrangement Fee” shall have the meaning set
forth in Section 2.2(d).

 

{*****}

 

“Business Day” means a day other than a
Saturday, Sunday or other day on which commercial banks in either San
Francisco, California or Munich, Germany are authorized or required by law to
close.

 

“Cayman 1 Detailed Plan” shall have the
meaning set forth in Section 2.2(b).

 

“Cayman 1 Functional Specification” shall have the
meaning set forth in Section 2.2(b).

 

“Cayman 1 Initial Plan” means that certain
high-level engineering plan for the development of the Cayman 1 Product
delivered to Siemens concurrently with the execution of this Agreement.

 

“Cayman 1 Product” means {*****} linear accelerator product
integrating {*****} technology
consisting of an {*****}, the
Interface applicable to a Cayman 1 Product, and the Accuray Components
applicable to the Cayman 1 Product, as more fully described in the Cayman 1
Initial Plan; provided, however, that (i) Accuray Components
implementing {*****}, 

 

 

will
not be included in the Cayman 1 Product and (ii) the Cayman 1 Product may be
sold to end-users by Siemens with or without the {*****}, which may be replaced by the TxT Couch described in the
applicable Functional Specification.  For
the avoidance of doubt, all references to a “Cayman 1 Product” shall also be
deemed to be references to a Cayman 1 Upgrade.

 

“Cayman 1 Upgrade” means the Accuray
Components and the Interface required to upgrade an existing {*****} to a Cayman 1 Product.

 

“Cayman 2 Detailed Plan” shall have the
meaning set forth in Section 2.3(a)(ii).

 

“Cayman 2 Functional Specification” shall have the
meaning set forth in Section 2.3(a)(ii).

 

“Cayman 2 Product” means {*****} linear accelerator product
integrating {*****} technology
consisting of an {*****}, the
Interface applicable to a Cayman 2 Product, and the Accuray Components
applicable to the Cayman 2 Product; provided, however, that (i)
Accuray Components implementing {*****},
will be included in the Cayman 2 Product and (ii) the Cayman 2 Product may be
sold to end-users by Siemens with or without the {*****}, which may be replaced by the TxT Couch described in the
applicable Functional Specification. 
Unless otherwise expressly agreed in writing by the Parties or the
Steering Committee, the Cayman 2 Product shall include Version {*****} (scheduled for {*****}) of Accuray’s applicable
software if such version has been commercially released by Accuray prior to the
time the Cayman 2 Product has been completed, except that the
Cayman 2 Product shall only include the current version as of the
Effective Date of Accuray’s {*****}
product (Version {*****}).  For the avoidance of doubt, all references to
a “Cayman 2 Product” shall also be deemed to be references to a Cayman 2
Upgrade.

 

“Cayman 2 Upgrade” means the Accuray
Components and the Interface required to upgrade an existing {*****} to a Cayman 2 Product or a
Cayman 1 Product to a Cayman 2 Product.

 

“Cayman Product” means either a Cayman 1
Product or a Cayman 2 Product.

 

“Change in Control” means, with respect to any
Entity:

 

(a)           the acquisition of such Entity by
another Entity by means of any transaction or series of related transactions
(including, without limitation, any reorganization, merger, or consolidation,
but excluding any merger effected exclusively for the purpose of changing the
domicile of such Entity), unless such Entity’s stockholders of record
immediately prior to such transaction hold (by virtue of the securities issued
as consideration in such transaction) greater than fifty percent (50%) of the
total voting power of the surviving or acquiring Entity;

 

(b)           the sale, transfer, or other
disposition of all or substantially all of the assets of such Entity by means
of any transaction or series of related transactions;

 

(c)           the exclusive license of all or
substantially all of the Intellectual Property of such Entity by means of any
transaction or series of related transactions; or

 

 

(d)           the sale of more than 50% of the
capital stock of such Entity by means of any transaction or series of related
transactions.

 

“Confidentiality Agreement “ means that
certain Non-Disclosure Agreement between Siemens and Accuray, dated March 25,
2010, as may be amended from time to time in accordance with its terms.

 

“Confidential Information” shall have the
meaning given to such term in the Confidentiality Agreement.

 

“CyberKnife System” means Accuray’s CyberKnife
System, as commercially released during the Term, or any successor radiosurgery
product of similar architecture should the commercial availability of Accuray’s
CyberKnife System be discontinued by Accuray.

 

“Designated Improvements” means the versions of the
Accuray hardware or software identified on Schedule A-2.

 

“{*****} Patents” means the Patent family
licensed by {*****} to Siemens related to the {*****}.

 

“Entity” means a corporation,
partnership, limited liability company, trust, business trust, association,
joint stock company, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.

 

“FDA” means the United States
Food and Drug Administration, or the successor thereto.

 

“FDC Act” means the Food, Drug, and
Cosmetic Act, as amended from time to time.

 

“Functional Specification” means either
the Cayman 1 Functional Specification or the Cayman 2 Functional Specification,
as applicable.

 

“Initial Shipment Date” means the first shipment date of a Cayman 1 Product to a
customer.

 

“Installation “ means, with respect to the
Accuray Components and the Interface, the completion, by the entity installing
such Accuray Components and Interface, of the acceptance test procedure jointly
agreed by the Parties demonstrating that such Accuray Components and Interface
substantially conform to the applicable Functional Specification.

 

“Intellectual Property “ means any and
all rights throughout the world in, arising from or associated with any of the
following, whether protected, created or arising under the laws of the United
States or any other jurisdiction: (i) trade names, trademarks and service marks
(registered and unregistered), domain names and other Internet addresses or
identifiers, trade dress and similar rights and applications (including intent
to use applications) to register any of the foregoing (collectively, “Trademarks”);
(ii) patents, utility models and other government grants for the protection of
inventions and applications and rights to file applications for any of the
foregoing (collectively, “Patents”); (iii) copyrights and registrations
and applications for 

 

 

copyrights
(collectively, “Copyrights”); (iv) trade secrets and all other know-how,
inventions, discoveries, improvements, concepts, ideas, methods, processes,
formulae, technical data, specifications, research and development information,
technology, algorithms, models, methodologies and other information that derive
economic value (actual or potential) from not being generally known to public
(collectively, “Trade Secrets”); (v) all databases and data collections;
and (vi) moral rights, publicity rights and any other proprietary,
intellectual, industrial property or information rights of any kind not
otherwise covered under (i) through (v) above.

 

“Interface” means an interface for the
interoperability of the {*****} and the Accuray Components, including
interfaces: (i) to allow for sharing of patient data between the Accuray Components
and the {*****} and (ii) between the Accuray Components and the {*****}’s (a)
{*****} system, (b) {*****} system, (c) {*****} system, and (d) {*****}.

 

“MFN Terms”
means terms at least as favorable as those offered by a Party to any other
Entity of similar quantities, products, and/or services in a similar region.

 

{*****}

 

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

 

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

 

{*****}

 

“Relevant Accuray Country” means the United States, Canada, any member of the European Union,
China, Japan, and any other country in which a Patent covering any core
technology incorporated in the Accuray
Components has been issued to Accuray.

 

“Relevant Siemens Country” means any country in which a Patent covering core technology related to
{*****} linear accelerator systems for radiation treatments (including the
{*****}) and any other hardware or software that Siemens sells in combination
therewith has been issued to Siemens.

 

{*****}

 

“Sales Year” means, for the first Sales
Year, the first through the fourth fiscal quarters of Siemens (counting from
the Siemens fiscal quarter starting on the Sales Year Start Date), for the
second Sales Year, the fifth through the eighth fiscal quarters of Siemens
(counting from the Siemens fiscal quarter starting on the Sales Year Start
Date), for the third Sales Year, the ninth through the twelfth fiscal quarters
of Siemens (counting from the Siemens fiscal quarter starting on the Sales Year
Start Date), and so on for subsequent Sales Years.

 

“Sales Year Start Date” means the date that is the
first day of the first Siemens fiscal quarter commencing after the 18-month
anniversary of the Initial Shipment Date.

 

 

 “Scope”  means the following activities related to the delivery of
radiation treatments to human patients:

 

(a)           {*****};

 

(b)           {*****};

 

(c)           {*****}; and

 

(d)           with respect solely to the Cayman 2
Product (and not the Cayman 1 Product), {*****}, in conjunction with Siemens’
{*****};

 

provided, however,
that the Scope shall not include any product or offering that is {*****}, and
therefore the Cayman Product and Cayman Upgrade shall, at any point in time,
have {*****}.  For the avoidance of
doubt, the intention of the Parties is that the {*****}.

 

“Siemens Acquisition Change” means either
of the following:

 

(a)           a Change in Control of Siemens and/or
the Oncology Care System division of Siemens or such other division or business
unit then responsible for the {*****} in which the acquiring entity is an
Accuray Competitor or an Affiliate of an Accuray Competitor; or

 

(b)           a Change in Control of an Accuray
Competitor in which the acquiring entity is Siemens or an Affiliate of Siemens.

 

“Siemens Competitors” means those direct
competitors of Siemens’ Healthcare Oncology Care Systems division listed on Schedule
A-3 or other Entities that, at the applicable time of determination,
directly compete with such division of Siemens on a comparable scale to the
Entities listed on Schedule A-3.

 

“Siemens Major Competitors” shall mean Siemens’ top
three competitors in the market defined by the Scope based on relative market
share (other than Accuray).

 

“Siemens-Related Infringement Claim” means any action brought against Accuray to the extent that it is based
upon a Third Party claim that a Cayman Product, including any claim based on
the use or combination of the Cayman Product (or any part thereof incorporated
in the Cayman Product) with other items, infringes any Patent issued in any
Relevant Siemens Country or any copyright or misappropriates any trade secret.  For the avoidance of doubt, the term “Siemens-Related
Infringement Claim” shall not include any claims to the extent based solely on
the Accuray Components or any part thereof.

 

“Siemens USA” shall mean Siemens Medical
Solutions USA, Inc., a Delaware corporation.

 

“Steering Committee” means the Strategic
Alliance Steering Committee, as more fully described in Article IV.

 

 

“Term” means the term of this Agreement, as set
forth in Section 10.1.

 

“Termination Election” shall have the meaning set
forth in Section 10.3(c).

 

“Third Party” means any Entity other than
Accuray, Siemens and their respective Affiliates.

 

“TxT Couch”  means Siemens’ TxT treatment
couch system, as commercially released during the Term, or any successor
treatment couch system of similar architecture should the commercial
availability of the Siemens’ TxT treatment couch system be discontinued by
Siemens.

 

“Upgrade” means either a Cayman 1
Upgrade or a Cayman 2 Upgrade.

 

{*****}  

 

 

EXHIBIT
B

 

Terms
and Conditions

 

See attached.

 

 

Exhibit
B

 

Terms
and Conditions for the Accuray Components and Interface

 

The following Terms and
Conditions (these “Terms and Conditions”) shall apply to sales of
Accuray Components and Interfaces (each as defined in that certain Strategic
Alliance Agreement by and among Siemens Aktiengesellschaft (“Siemens”)
and Accuray Incorporated (“Supplier”), dated as of June 8, 2010 (the “SAA”))
and, by way of clarification, shall not apply to any sale of Accuray’s CyberKnife
System.  Any defined term used herein,
but not otherwise defined, shall have the meaning set forth in the SAA.

 

1.             Purchase Order
and Confirmation of Purchase Order

 

1.1           Siemens or its Affiliate (“Customer”)
shall issue a purchase order (the “Purchase Order”) to Supplier for each
proposed purchase of Accuray Components and Interfaces, which shall contain the
shipping location, requested delivery date, number and type of Accuray
Components and Interfaces to be purchased, and whether Supplier installation is
requested and shall be accompanied by proof of sell-through to the
end-user.  Each purchase of Accuray
Components and Interfaces (the “Order”) shall be accomplished by the
execution of the Purchase Order by an authorized representative of Supplier
(the “Confirmation”).  Customer
shall deliver the Purchase Order to Supplier for its execution not less than
six months prior to the requested delivery date.  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

 

1.2           Customer may cancel the
Order if Supplier has not made the Confirmation within two weeks of receipt of
the Purchase Order.

 

1.3           Any purchase of Accuray
Components and/or Interfaces shall be subject to the terms and conditions set
forth in the SAA and these Terms and Conditions.  By submitting the Purchase Order to Accuray,
Customer agrees to be bound by and comply with these Terms and Conditions and
any provision of the SAA related to or applicable to such Purchase Order.  Any terms or conditions in the Purchase Order
or Confirmation that are additional to or contradictory with these Terms and
Conditions and those in the SAA are invalid.

 

1.4           Any amendment or addition to
the Order shall only be effective if Customer and Supplier confirm such
amendment or addition in writing.

 

 

1.5           After the Confirmation is
given by Supplier, the Order may not be canceled by Customer without Supplier’s
prior written consent, other than a cancellation made within 10 days after
Confirmation.  If Customer requests a
cancellation of the Order after such 10-day period and Supplier consents to
such request, Customer agrees to pay Supplier a charge determined by Supplier
to cover the reasonable and proven costs of order processing, handling,
re-testing, shipping, storage, repackaging, and similar activities actually
incurred by Supplier in connection with such cancellation.  Any amount actually paid by Customer to
Supplier (the “Previous Payments”) in connection with the Order may be
used to offset such charge, and, after such offset, any remaining portion of
the Previous Payments may be used only as payment for any future order by
Customer of Accuray Components, Interfaces, and/or installation services from
Accuray pursuant to the SAA.

 

2.             Rights
of Use

 

2.1           Supplier and its licensors
retain all Intellectual Property rights in the Accuray Components.  Supplier hereby grants Customer a
nonexclusive, non-transferable, royalty-free and worldwide right, with the
right to grant sublicenses to Affiliates of Customer, (i) to use the software
provided in connection with the Accuray Components that are purchased by
Customer hereunder only in machine readable form and only in combination with
the Cayman Products with which such software is provided, solely for the
purposes of carrying out its rights and obligations hereunder, and (ii) to
grant purchasers of Cayman Products a nonexclusive, non-transferable and
royalty-free right to use the software provided in connection with the Accuray
Components only in machine readable form and only in combination with the
purchased Cayman Products with which such software is provided.  Customer agrees that it and its Affiliates
shall not, and shall not permit purchasers of Cayman Products, to use such
software in any other manner or to copy, modify, or disclose or make available
such software, in whole or in part, to any Third Party.  Supplier hereby grants Customer a
nonexclusive, non-transferable, royalty-free and worldwide license, with the
right to grant sublicenses to Affiliates of Customer, under any Patents owned
by Supplier or the licensing of which is controlled by Supplier, solely for the
purpose of (i) assembling and integrating the Accuray Components with the
{*****} to create the Cayman Product, including developing any interfaces or
hardware modifications that are required to enable the {*****} to interoperate
with the Interface and the Accuray Components in accordance with applicable
Functional Specification and (ii) marketing, offering for sale, selling,
installing and delivering product support of Cayman Products.  Supplier hereby grants to purchasers of
Cayman Products a nonexclusive, non-transferable and royalty-free license under
any method Patents owned by Supplier or the licensing of which is controlled by
Supplier that, but for this license, would be infringed by the use of such
Cayman Products in accordance with their applicable Functional Specifications
solely within the Scope.  No rights or
license, whether express or implied, are granted by Supplier in this Section
2.1 to Customer under any Intellectual Property of Supplier other than as
expressly granted by Supplier in this Agreement.

 

2

 

3.             Shipping;
Transfer of Risk and Title

 

3.1           All shipments shall be made
F.C.A. Port of Oakland, California, USA. 
Transfer of risk from Supplier to Customer shall occur as provided in
F.C.A. terms and transfer of title shall occur at the same time.  Customer may request Supplier to use a
particular freight carrier, and Supplier agrees to do so, if feasible. If not
feasible in Supplier’s reasonable judgment, then Supplier shall promptly advise
Customer of the reasons. If no such request is made, Supplier shall ship in
accordance with any instructions contained in the Purchase Order or via FedEx
ground, with no extra insurance. Supplier shall bill any actual freight costs to
Customer.  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 Supplier, if such
delivery deadline was at least six months after the Confirmation.  For example, if Confirmation of the Purchase
Order was given 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 Supplier, 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 Customer.

 

3.2           Unless otherwise agreed by
Customer and Supplier, the costs of packaging shall be borne by Supplier.

 

3.3           Each shipment shall include
a packing note or delivery note with details of the contents as well as the
complete order number. Notice of dispatch shall be provided as soon as
reasonably practicable with the same information.

 

4.             Payment

 

4.1           All payments are due net 30
days after delivery by Supplier at the specified F.C.A. location pursuant to
Section 3.1 and receipt by Customer of a reasonably undisputed invoice.

 

4.2           Unless otherwise agreed by
Customer and Supplier, payments are to be made in United States Dollars.  All payments are to be made by wire transfer
to an account designated in writing by Supplier.  Supplier shall bear the costs of commission
charges for one wire transfer for the Order.

 

4.3           By way of clarification, all
Supplier prices referenced in the SAA, these Terms and Conditions, or the
Purchase Order, and all other amounts payable by Customer to Accuray pursuant
to the foregoing 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”). 
Customer and Supplier agree that it is their intention that Supplier
will not bear any economic burden relating to the Taxes.  Subject to the foregoing and to compliance
with applicable laws, Customer and Supplier agree to cooperate with each other
as reasonably requested to establish the responsibilities of

 

3

 

the parties relating to the payment and withholding of Taxes, filing of
documents, and other matters in order to achieve an efficient tax result.

 

4.4           Past due balances on any
reasonably undisputed invoiced amount shall bear interest at the rate of 0.5%
per month or, if lower, the maximum amount permitted by applicable law.  If Supplier is a “business person” (as
defined in § 14 of the German Civil Code, “BGB”), the payment shall be deemed
past due only if Customer fails to pay in response to a payment demand note
received after payment becomes due.

 

4.5           Payment does not constitute
an acknowledgement that the corresponding delivery or services were provided in
accordance with any applicable requirements.

 

4.6           The order number as well as
the number of each product and service shall be detailed in an invoice. Copies
of invoices shall be marked as duplicates.

 

5.             Inspection
upon Receipt

 

5.1           If a shipment of products by
Supplier fails to conform to the accepted Purchase Order, including the
applicable functional specification, if any, then Customer shall have the right
to reject such shipment or the portion thereof that fails to so conform, as the
case may be.

 

5.2           Customer shall give written
notice to Supplier of its rejection hereunder, within 10 business days after
receipt at the shipping location set forth in the Purchase Order, specifying
the grounds for such rejection.  Any
rejected portion of such shipment may be held for Supplier’s disposition, at
Supplier’s expense if found to be not in conformance.  Supplier shall cure any such rejection
pursuant to the warranty provisions set forth in Section 6.

 

5.3           CUSTOMER’S SOLE REMEDY WITH
RESPECT TO THE DELIVERY ON NON-CONFORMING PRODUCT SHALL BE THE REMEDY SET FORTH
IN SECTION 5.2.

 

6.             Warranty; Bug Fixes

 

6.1           Supplier warrants that (i) the
hardware components of Supplier’s products will be free from defects in
material and workmanship and (ii) the hardware and software components of
Supplier’s products will operate substantially in accordance with the
applicable functional specification, in each case for a period of 12 months
from the date of Installation, but not to exceed 18 months from date of
delivery (the “Warranty Period”). 
For purposes of these Terms and Conditions, “Installation” shall
mean, with respect to a product, the completion, by the entity installing such
product, of the applicable acceptance test procedure demonstrating that such
product substantially conforms to the applicable functional specification.

 

6.2           If Customer notifies
Supplier during the Warranty Period of any deficiency identified, Supplier must
at its own expense and at its discretion either repair or replace the defective
product, or, if in Supplier’s opinion such repair or replacement is not

 

4

 

commercially reasonable, Supplier shall refund a pro-rated portion of
the price paid by Customer for such defective product, which portion shall be
calculated on a straight-line basis over a five-year period beginning on the
date of Installation. All warranty obligations are conditioned upon and subject
to return of the faulty or malfunctioning components, if any, or, in the case
of a refund, the defective product. 
Supplier shall bear the costs and risk related to the return of such
components or product, as the case may be. 
Failure to return such components or product, as the case may be, within
60 days shall (i) relieve Supplier of any and all warranty obligations with
respect to the related product and (ii) obligate Customer to pay to Supplier
the then current list price of Supplier for the replacement components and/or
product, and Supplier may deliver an invoice to Customer for such amount.  This Section 6.2 and Section 6.3 set forth
Customer’s sole and exclusive remedies with respect to a breach of the warranty
specified in Section 6.1.

 

6.3           EXCEPT AS SET FORTH IN THIS
SECTION 6 AND SECTION 2, SUPPLIER DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES
INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND OF FITNESS
FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

 

6.4           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 Supplier has intentionally failed to disclose such defect.

 

6.5           For a period of 10 years
following the date of delivery, Supplier will provide to Customer, without
charge, Bug Fixes with respect to any software included in the Accuray
Components or Interface. This is Supplier’s sole and exclusive obligation and
Customer’s sole and exclusive remedy in relation to defective software.  By way of clarification, Supplier’s sole
obligation shall be to make such Bug Fixes available to Customer, and Supplier
shall have no obligation (unless otherwise agreed by the parties) for
installation or implementation of such Bug Fixes at the end-user 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).

 

7.             Subcontracting
to Third Parties

 

7.1           Subcontracting to Third
Parties by Supplier shall not take place without the prior written consent of
Customer, such consent not to be unreasonably withheld.

 

5

 

8.             Confidentiality

 

8.1           Subject to the provisions of
any licenses granted pursuant to the SAA, all drawings, designs,
specifications, manuals, software, tools, patterns, samples, models, profiles,
printing templates, materials, and other non-public information furnished to
Customer by Supplier hereunder shall remain the confidential and proprietary
property of Supplier.  All such
information, except as may be found in the public domain, shall be held in
confidence by Customer and shall not be disclosed by Customer to any Third
Parties or used by Customer other than in its operation of the delivered
products in accordance with the applicable functional specification.

 

8.2           Subject to the provisions of
any licenses granted pursuant to the SAA, all drawings, designs,
specifications, manuals, software, tools, patterns, samples, models, profiles,
printing templates, materials, and other non-public information furnished to
Supplier by Customer hereunder shall remain the confidential and proprietary
property of Customer.  All such
information, except as may be found in the public domain, shall be held in confidence
by Supplier and shall not be disclosed by Supplier to any Third Parties or used
by Supplier.

 

8.3           If Customer agrees to any
subcontracting to a Third Party, such Third Party shall agree, in writing, to
the confidentiality provisions contained in Section 8.2.

 

9.              Assignment of Claims

 

9.1           Any assignment of any claim
by Supplier is only allowed with the prior written consent of Customer, such
approval not to be unreasonably withheld.

 

9.2           Any assignment of any claim
by Customer is only allowed with the prior written consent of Supplier, such
approval not to be unreasonably withheld.

 

10.          Inability to Pay /
Insolvency

 

10.1         Customer or Supplier may
terminate all unperformed or undelivered portions of the Order, 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

 

11.                             Code of
Conduct

 

11.1                           Supplier shall
comply, in all material respects, with the Siemens Code of Conduct attached
hereto as Exhibit A (the “Code of Conduct”).  Customer shall give Supplier written notice
of any change to its the Code of Conduct as soon as reasonably practicable.

 

11.2                           Siemens and
Customer shall comply, in all material respects, with Siemens’ Business Conduct
Guidelines and other internal regulations and guidelines.

 

12.                             Export
Control, Foreign Trade Data Regulations, Permits

 

12.1                           Supplier shall
be responsible for compliance with any applicable law, code, registration,
regulation, and ordinance related to the export of the products to Customer, if
any (the “Export Regulations”), and Supplier shall be liable for any
expenses and/or damages incurred by Customer due to any non-compliance by
Supplier (unless Supplier is not responsible for such non-compliance). Supplier
shall advise Customer in writing within two weeks of the Confirmation of any
information or data required by Supplier to comply with an Export Regulation,
including without limitation:

 

·                                All applicable export list numbers, including the Export Control
Classification Number according to the U.S. Commerce Control List (ECCN);

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

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

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

 

12.2                           Customer shall
be responsible for obtaining all permits and for meeting all laws, codes,
registrations, regulations, and ordinances other than the Export Regulations
applicable to Customer’s import, use, or sale of the products in each
applicable jurisdiction.  Supplier has no
responsibility for compliance with such laws, codes, registrations,
regulations, and ordinances, but shall provide such information or documents as
are reasonably requested by Customer and required in order to obtain any such
permits.

 

13.                               Force
Majeure

 

13.1                           In the event
that either Customer or Supplier is prevented or delayed from fulfilling or
performing any of its obligations with respect to the Order (other than an
obligation to pay money) due to the occurrence of causes beyond the reasonable
control of such party, including but not limited to fires, floods, embargoes,
wars, acts of war (whether war is declared or not), acts of terrorism,
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority, then such party’s performance shall be excused, and the
time for performance shall be extended, for the period of inability or

 

7

 

delay due to such occurrence; provided, however, that
such party shall have used its commercially reasonable efforts to avoid such
inability or delay, and such party shall have given prompt written notice to
the other party of such occurrence; provided, further, that if
any such prevention or delay is for a period of greater than six months, the
other party shall have the option to terminate the Order.

 

14.                               Term;
Penalty for Breach; Damages

 

14.1                           Where any delay
in delivery, performance, or rectification can be anticipated, Supplier shall
notify Customer without undue delay.

 

14.2                           In the event of
any such delay that results in the delivery by Supplier at the specified F.C.A.
location pursuant to Section 3.1 more than two weeks after the delivery
date set forth in the accepted Purchase Order or the provision of a service
more than two weeks after the requested service date set forth in the accepted
Purchase Order, the Customer may charge Supplier a penalty in respect of each
additional week of delay (following such two week period) amounting to 1% of
the total value of the delayed product or service per week; provided, however,
that the total penalty shall not exceed 3% of the total value of the delayed
product or service. This penalty may be used only as payment for any future
order by Customer of Accuray Components, Interfaces, and/or installation
services from Accuray pursuant to the SAA.

 

14.3                           WITHOUT
AFFECTING STRICT PRODUCT LIABILITY UNDER APPLICABLE LAW OR ARTICLES 8, 17, OR
18 AND EXCEPT FOR BREACHES ASSOCIATED WITH THE UNAUTHORIZED USE OF THE
INTELLECTUAL PROPERTY OF THE OTHER PARTY, IN NO EVENT SHALL EITHER
CUSTOMER OR SUPPLIER 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 ORDER, THE MATTERS
CONTEMPLATED BY THESE TERMS AND CONDITIONS, AND/OR THE SAA, WHETHER OR NOT SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

14.4                           WITHOUT
AFFECTING ARTICLES 8 OR 17 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,
SUPPLIER’S AGGREGATE LIABILITY ARISING FROM OR RELATED TO THE PURCHASE OF ANY
PRODUCT OR SERVICE PURSUANT TO THE PURCHASE ORDER SHALL NOT EXCEED THE PAYMENT
RECEIVED BY SUPPLIER FOR SUCH PRODUCT OR SERVICE, AND SHALL, IN ANY CASE,
BE SUBJECT TO THE LIMITATIONS SET FORTH IN SECTION 9.3 OF THE SAA.

 

8

 

14.5                           By way of
clarification, these Terms and Conditions with respect to the Order shall
survive the expiration or termination of the SAA.

 

15.                               Reservation
Clause

 

15.1                           Customer’s and
Supplier’s obligations to fulfill the Order are subject to the proviso that
such fulfillment is not prevented by any impediments arising out of any
national or international foreign trade or customs requirements or any embargos
or other sanctions.

 

16.                               Supplementary
Provisions

 

16.1                           Insofar as the
provisions of these Terms and Conditions do not regulate certain matters,
relevant statutory provisions of German substantive law shall apply.

 

17.                               IP
Indemnification

 

17.1                           Supplier will
defend or settle any action brought against Customer to the extent that it is
based upon an Accuray-Related Infringement Claim, and will pay any costs and
damages made in settlement or awarded against Customer in final judgment
resulting from any such claim, subject to Section 17.3.

 

17.2                           Customer will
defend or settle any action brought against Supplier to the extent that it is
based upon a Siemens-Related Infringement Claim, and will pay any costs and
damages made in settlement or awarded against Supplier in final judgment
resulting from any such claim, subject to Section 7.3.

 

17.3                           The respective
indemnification obligations of Customer and Supplier under Section 17.1
and Section 17.2 are subject to condition that the party seeking to
enforce any such indemnification obligations (the “IP Indemnified Party”)
must: (i) give the party that is obligated to indemnify the IP Indemnified
Party (the “IP Indemnifying Party”) prompt notice of any such claim; (ii) give
the IP Indemnifying Party sole control of the defense and any related
settlement of any such claim; and (iii) give the IP Indemnifying Party, at
the IP Indemnifying Party’s expense, all reasonable information, assistance and
authority in connection with the foregoing. 
The failure to deliver prompt notice to the IP Indemnifying Party, if,
and to the extent, prejudicial to its ability to defend such claim, shall
relieve such IP Indemnifying Party of any liability to the IP Indemnified Party
under this Article, but the omission so to deliver notice to the IP
Indemnifying Party will not relieve it of any liability that it may have to the
IP Indemnified Party other than under this Article.  The IP Indemnifying Party will not be bound
by any settlement or compromise that the IP Indemnified Party enters into
without the IP Indemnifying Party’s express prior written consent.

 

17.4                           Customer and
Supplier acknowledge that Third Parties may assert an action that includes
claims against both Customer and Supplier that involve both Accuray-Related
Infringement Claims and Siemens-Related Infringement Claims (a “Joint
Responsibility Infringement Action”). 
Customer and Supplier agree that, if any Joint Responsibility
Infringement Action is brought against them, they will reasonably

 

9

 

cooperate with each other in the defense and settlement of such action
and that Supplier will be responsible for the proportion of the aggregate costs
of defense and settlement that is attributable to the Accuray-Related
Infringement Claim and Customer will be responsible for the proportion of the
aggregate cost of defense and settlement that is attributable to the
Siemens-Related Infringement Claims; provided that neither party will
settle any Joint Responsibility Infringement Action without the consent of the
other party except to the extent a settlement solely affects Accuray-Related
Infringement Claims, in the event Supplier is the settling party, or
Siemens-Related Infringement Claims, in the event that Customer is the settling
party. Customer and Supplier agree that Supplier shall pay the amount of any
damages awarded in any Joint Responsibility Infringement Action that is
attributable to Accuray-Related Infringement Claims and Customer shall pay the
amount of any damages awarded in any Joint Responsibility Infringement Action
that is attributable to Siemens-Related Infringement.

 

17.5                           If, due to an
Accuray-Related Infringement Claim or other action in which it is alleged that
Accuray Components infringe the Intellectual Property of a Third Party, (x) Customer’s
rights to use and distribute a Cayman Product under the terms of the SAA are,
or in the Steering Committee’s opinion are likely to be, enjoined or (y) Supplier
is prevented from fulfilling its obligations under the SAA or these Terms and
Conditions, then Supplier may, at its sole option and expense: (i) procure
for Customer the right to continue to distribute such Cayman Product under the
terms of the SAA; (ii) replace or modify such Cayman Product so that it is
non-infringing without changing in any material respect its functionality and
performance according to the applicable Functional Specification; or (iii) if
options (i) and (ii) above cannot be accomplished despite Supplier’s
reasonable efforts, then either party may terminate the Order; provided,
that in the case of such termination, Supplier shall pay to Customer the amount
actually paid by Customer to Supplier for the Accuray Components in the Order
based on a straight-line depreciation calculated over a 5-year period beginning
on the date of delivery of the applicable Accuray Component, provided
that all Accuray Components are returned to Supplier in an undamaged condition.

 

17.6                           If, due to a
Siemens-Related Infringement Claim or other action in which it is alleged that
any Cayman Product (or any part thereof incorporated in the Cayman Product)
infringes the Intellectual Property of a Third Party, Customer’s rights to use
and distribute a Cayman Product under the terms of the SAA are, or in the
Steering Committee’s opinion are likely to be, enjoined, then Customer may, at
its sole option and expense: (i) procure for Customer the right to
continue to distribute such Cayman Product under the terms of the SAA; (ii) replace
or modify such Cayman Product so that it is non-infringing without changing in
any material respect its functionality and performance according to the
applicable Functional Specification; or (iii) if options (i) and (ii) above
cannot be accomplished despite Customer’s reasonable efforts, then either party
may terminate this Agreement; provided, that in the case of such
termination, Customer shall pay to Supplier an amount equal to the actual costs
incurred by Supplier with respect to the Accuray Components or Interfaces in
the Order for which payment has not been made, and once paid for, any such
Accuray Components or Interfaces, in their then current state, shall be owned by
Customer and delivered to Customer by Supplier at the expense of Customer.  For the avoidance of

 

10

 

doubt, this Section 17.6 shall not apply to any claim to the
extent based solely on the Accuray Components or any part thereof.

 

17.7                           TO THE EXTENT
PERMISSIBLE BY LAW, THE FOREGOING PROVISIONS SET FORTH IN THIS ARTICLE 17
SET FORTH EACH PARTY’S SOLE AND EXCLUSIVE LIABILITY AND EACH PARTY’S SOLE AND
EXCLUSIVE REMEDY FOR ANY CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF
INTELLECTUAL PROPERTY RIGHTS OR PROPRIETARY RIGHTS OF ANY KIND.

 

18.                               General
Indemnification

 

18.1                           In addition to
Supplier’s indemnification obligations set forth in Article 17, Supplier
shall indemnify and hold Customer harmless from and against all losses,
liabilities, damages and expenses (including reasonable attorneys’ fees and
costs) resulting from any claims, demands, actions or other proceedings by any
Third Party arising from (a) the breach of any representation, warranty,
or covenant by Supplier under these Terms and Conditions or (b) the
negligence or willful misconduct of Supplier in performing its obligations
under these Terms and Conditions.

 

18.2                           In addition to
Customer’s indemnification obligations set forth in Article 17, Customer
shall indemnify and hold Supplier harmless from and against all losses,
liabilities, damages, and expenses (including reasonable attorneys’ fees and
costs) resulting from any claims, demands, actions or other proceedings by any
Third Party arising from (a) the breach of any representation, warranty,
or covenant by Customer under these Terms and Conditions or (b) the
negligence or willful misconduct of Customer in performing its obligations
under these Terms and Conditions.

 

18.3                           A party (the “Indemnitee”)
that intends to claim indemnification under this Article shall promptly
notify the other party (the “Indemnitor”) of any claim, demand, action or other
proceeding for which the Indemnitee intends to claim such indemnification.  The Indemnitor shall have the right to
participate in, and, to the extent the Indemnitor so desires, jointly with any
other indemnitor similarly noticed, to assume the defense thereof with counsel
selected by the Indemnitor; provided, however, that the
Indemnitee shall have the right to retain its own counsel, with the reasonable
fees and expenses to be paid by the Indemnitor, if the Indemnitee reasonably
determines that representation of the Indemnitee by counsel retained by the
Indemnitor would be inappropriate due to actual or potential differing
interests between the Indemnitee and any other party represented by such
counsel in such proceedings.  The
indemnity obligations under this Article shall not apply to amounts paid
in settlement of any claim, demand, action or other proceeding if such
settlement is effected without the consent of the Indemnitor, which consent
shall not be unreasonably withheld or delayed. 
The failure to deliver notice to the Indemnitor promptly after the
commencement of any such action or other proceeding, if, and to the extent,
prejudicial to its ability to defend such action or other proceeding, shall
relieve such Indemnitor of any liability to the Indemnitee under this Article,
but the omission so to deliver notice to the Indemnitor will not relieve it of
any liability that it may have to any Indemnitee otherwise than under this
Article.  The Indemnitor shall not
settle, or

 

11

 

otherwise consent to an adverse judgment in, any such action or other
proceeding that diminishes the rights or interests of the Indemnitee without
the express written consent of the Indemnitee. 
The Indemnitee, its employees and agents, shall cooperate fully, at the
expense of the Indemnitor, with the Indemnitor and its legal representatives in
the investigation of any claim, demand, action or other proceeding covered by
this indemnification.

 

19.                               Dispute
Resolution; Applicable Law

 

19.1                           Any controversy
or claim relating to, arising out of, or in any way connected to the Order or
these Terms and Conditions shall be finally resolved by final and binding
arbitration in accordance with this Section 19.1 by a panel of three
arbitrators, to be conducted in Zurich, Switzerland.  Each of the parties may appoint one
arbitrator having reasonable experience in transactions of the type
contemplated by the SAA (except to the extent it is not reasonably practicable
to appoint an arbitrator with such experience), and the two arbitrators so
chosen shall agree upon the third arbitrator. 
Unless the parties agree otherwise, the arbitration shall be conducted
in accordance with the Rules of Arbitration of the International Chamber
of Commerce (ICC), the language to be used in the arbitration proceedings shall
be English, and if and to the extent the Rules of Arbitration of the
International Chamber of Commerce are silent with respect to any procedural
aspects, said rules shall be supplemented by the provisions of the German
Code of Civil Procedure (Zivilprozessordnung). 
The decision of the arbitrators shall be final, nonappealable and
binding upon the parties.  Such decision
may be entered in any court of competent jurisdiction for the enforcement
thereof.  With regard to any arbitration
commenced pursuant to this section, the International Bar Association (IBA) Rules on
the Taking of Evidence in International Commercial Arbitration of June 1,
1999 shall apply. The work product of an (outside or in-house) attorney and
communication between an (outside or in-house) attorney and a client shall be
subject to the privilege provided for in Article 9, Section 2 of said
IBA Rules and shall not be disclosed. 
The arbitrators shall issue a written opinion setting forth their
decision and the reasons therefor within thirty days after the arbitration
proceeding is concluded.

 

19.2                           The Order and
these Terms and Conditions 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.

 

20.                               Notice

 

20.1                           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

 

12

 

by registered or certified mail, return receipt requested, postage prepaid.  All notice hereunder shall be delivered to
the addresses set forth below:

 

If
to Supplier:

Accuray Incorporated

1310 Chesapeake Terrace

Sunnyvale, CA 94089

USA

Attn: General Counsel

Facsimile: +1 (408) 789-4205

 

If
to Customer:

Siemens
AG

Henkestr. 127

91054 Erlangen

Germany

Attn: Healthcare General Counsel, Ritva Sotamaa

Facsimile: + 49/931 - 84 - 8807

 

21.                               Amendment
and Waiver

 

21.1                           Except as
otherwise provided herein, any term hereof may be amended, terminated or waived
only with the written consent of Customer and Supplier.  The waiver by either Customer or Supplier of (i) any
right hereunder, (ii) the failure to perform, or (iii) a breach by
the other party shall not be deemed a waiver of any other right hereunder or of
any other breach or failure by the other party whether of a similar nature or
otherwise.

 

22.                               Severability

 

22.1                           Whenever
possible, each provision hereof shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision hereof is held
to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision in such jurisdiction, and
these Terms and Conditions shall be reformed, construed and enforced in such
jurisdiction to the fullest extent permitted to give effect to the intention of
the parties, and as if such invalid, illegal or unenforceable provision had
never been contained herein.

 

13

 

Exhibit
A

 

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

 

Multiple LINAC Distribution
Agreement

 

See attached.

 

 

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.

 

7

 

EXHIBIT D

Form Distribution
Agreement

 

See attached.

 

 

	
   

  	
  Initials:  Distributor

  	
   

  	
   

  
	
   

  	
  Accuray

  	
   

  	
   

  

 

 

ACCURAY INCORPORATED

INTERNATIONAL DISTRIBUTOR AGREEMENT

 

This International 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   a
corporation organized under the laws of 
, with its registered offices located at 
 (“Distributor”), as of   (“Effective Date”).

 

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 in different
territories.

 

Accuray
wishes to appoint Distributor as its [non-exclusive Distributor][sole
Distributor] in the Territory, as defined below, subject to the terms and
conditions of this Agreement, and Distributor wishes to accept such
appointment.

 

1.          DEFINITIONS

 

1.1.       “Customer” means any
person or business entity lawfully doing business in the Territory with whom
Distributor enters into an agreement for Products or Services, including an “investment
project” whereby Distributor enters into a partnership with Customer. Customer
does not include sites or hospitals located on United States armed forces bases
in the Territory.

 

1.2.       “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 Territory.

 

1.3.       “Quote” means the
quote provided by Accuray to Distributor that will serve as the basis for the
Product configuration, Services, pricing and delivery schedule offered to
individual Customers by Distributor.

 

1.4.       Service(s) means the
performance of radiosurgery-related service(s) by either Accuray or
Distributor, which may include technical support, training or installation of
Products.

 

1.5.       Service Agreements means the
Accuray Elite Service Agreement or such other service programs and agreements
as may be released or modified by Accuray from time to time.

 

1.6.       Spare Parts means
replacement or additional parts or Products used in connection with the System.

 

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

 

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

 

	
  INTERNATIONAL
  DISTRIBUTOR AGREEMENT STD 1.28.10

  	
   

  	
  ACCURAY CONFIDENTIAL

  
	
  [Country,
  City, Group, Hospital, Doctor(s), etc.] — [mm.dd.yy]

  	
   

  	
   

  

 

1

 

	
   

  	
  Initials:  Distributor

  	
   

  	
   

  
	
   

  	
  Accuray

  	
   

  	
   

  

 

1.9.       “Territory” means the
geographic region as set forth in Exhibit A.

 

2.          DISTRIBUTORSHIP

 

2.1.       Appointment.  Accuray hereby appoints Distributor as the
[non-exclusive Distributor][sole Distributor] of Products and Services to
Customers in the Territory, not to the exclusion of [others][Accuray itself],
subject to the terms and conditions of this Agreement.  So long as Distributor achieves the volume of
business set forth in Exhibit B and otherwise meets its obligations
under this Agreement, Distributor shall be [a distributor][the sole
Distributor] of Products and Services to Customers in the Territory.

 

2.2.       Pricing.  Pricing of Products and Services to
Distributor 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, and Distributor shall
contact Accuray for current pricing. 
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 issued by Accuray
and subject to acceptance by Distributor prior to the effective date of such
updated price lists.

 

2.3.       Quote and Purchase Process.  Distributor acknowledges and agrees that
Accuray will determine the appropriate quote and purchasing process to be
observed by the parties under this Agreement and may amend this process as
notified to the Distributor reasonably in advance.  Distributor will comply with the following
process for making sales of Products and Services in the Territory:

 

2.3.1.       Opportunity.  Once Distributor has identified a Customer
opportunity in the Territory, it shall request a quote from Accuray based on
the Product configuration and Services requested by the Customer.

 

2.3.2.       Quote.  Following receipt of Distributor’s quote
request, Accuray will 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 (“Quote”).  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 Distributor shall submit an amended quote request to
Accuray in the event adjustments to a Quote are requested by the Customer.  Following receipt of an amended quote request
from Distributor, to the extent Accuray can accommodate the requested
amendments, as determined by Accuray in its sole discretion, Accuray will issue
an amended Quote to Distributor.

 

2.3.3.       Purchase.  To purchase Products or Services based on a
Customer Quote provided by Accuray, Distributor will execute the Quote provided
by Accuray in respect of such Products and Services and thereby accept the
agreed Product configuration, Service options, pricing and other agreements
reflected in the Quote, and the Quote shall form 

 

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  Accuray

  	
   

  	
   

  

 

the basis of the purchase by
the Distributor as provided under this Agreement.  Distributor shall ensure that, to the extent
it issues purchase orders in accordance with its own internal process,  any purchase orders issued to Accuray shall
include a reference to the associated Quote number.  To the extent of any inconsistency between a
Quote and a Distributor purchase order, the terms and conditions of the 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.

 

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.  Distributor
represents that it is involved in other businesses not competitive with its
activities and obligations under this Agreement but of sufficient volume and
profitability that Distributor is in no way dependent upon this Agreement or
its relationship with Accuray for its continuing viability or success.  Distributor will inform Accuray of any
business that it is pursuing that is potentially competitive with Accuray
Products and Services, including business in the same treatment area, using
vaults, or using the same sales and marketing personnel, and will obtain prior
written approval from Accuray prior to entering into such business.

 

3.2.       Market Knowledge, Promotion
and Sales.  Distributor
represents that it has a thorough knowledge of the Territory, the market for
radiosurgery products and of all current and potential Customers. 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.

 

3.2.1.       Public Relations. Distributor
will implement a public relations program once a CyberKnife is operational in
the Territory and coordinate with Customers to support the public relations
efforts of CyberKnife System centers established in the Territory.

 

3.2.2.       Market Knowledge. Distributor
agrees to use all best efforts to introduce, promote the sale of, and obtain
orders for the Products and Services in the Territory. Moreover, Distributor represents and warrants that on the date
hereof and during the Term of this Agreement it (i) possesses all
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 the Territory.

 

3.2.3.       Promotional Events. Distributor
sales and marketing staff will, at Distributor’s expense, actively participate
in the following yearly activities as requested by Accuray:  American Society of Therapeutic Radiology &
Oncology (ASTRO) or European Society of Therapeutic Radiology and Oncology
(ESTRO) (if applicable); Accuray
worldwide users’ meeting; and Accuray
worldwide sales meetings.

 

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  Accuray

  	
   

  	
   

  

 

3.2.3.1.          Annual Symposium.  Distributor shall organize an annual
symposium in the Territory as part of its program to educate customers
regarding the Products and Services. 
Accuray will support Distributor’s annual symposium by providing one
international speaker knowledgeable about the Products.

 

3.2.3.2.          Local and Regional Events. Distributor
shall also actively participate in any significant or premier local or regional
meetings, tradeshows, symposia and similar events dedicated to radiation
oncology, neurosurgical or stereotactic body radio therapy (SBRT) and
stereotactic radiosurgery (SRS). Active participation includes attendance at
and participation in such meetings, which shall include at a minimum dedicating
reasonable personnel, resources and promotional materials to man a distributor
booth or similar platform.

 

3.2.4.       Promotional Materials. Distributor
shall use commercially reasonable efforts to follow Accuray’s guidelines for
preparation of promotional materials regarding the Products and Services,
including, without limitation, “look and feel” style guides and trademark
protections.  Accuray will provide
Distributor with form templates that Distributor may use as a basis for
modeling its own promotional materials; provided that Distributor is
responsible for creating and distributing Product and Service promotional
materials within the Territory.  Upon
request, Accuray may review promotional materials prepared by Distributor to
ensure they are consistent with Accuray marketing guidelines.

 

3.2.5.       Distributor Website. Distributor
shall create, maintain and keep current a webpage dedicated exclusively to
the Products and Services that can be accessed from Distributor’s primary
website.

 

3.2.6.       Non-Territory Sales. Distributor
will report to Accuray any proposed or pending sales or potential Customers
outside the Territory about which Distributor learns during the Term of this
Agreement.

 

3.3.       Distributor Personnel.

 

3.3.1.       During the Term of this
Agreement, Distributor agrees to use commercially reasonable efforts to employ
qualified sales and technical personnel familiar with the Products and Services
to perform the marketing, sales and service requirements as set forth herein. Moreover, Distributor represents and
warrants that on the date hereof and during the Term of this Agreement it
possesses and will continue to possess all personnel, resources, facilities and
ability required to properly fulfill its obligations under this Agreement,
including all sales, management, training and service requirements.

 

3.3.2.       During
the Term of this Agreement, to the extent reasonably required by Accuray or as
necessary for Customer interactions, Distributor undertakes to retain on-staff
personnel with English language competency and translation skills in order to
ensure prompt and reliable communication between the parties and to fulfill its
obligations hereunder; such personnel shall include at a minimum an
administrative assistant and marketing representative or equivalent positions.

 

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  Accuray

  	
   

  	
   

  

 

3.4.       Distributor Training.  Distributor shall attend training at Accuray’s
designated training facility as necessary to comply with the then current
requirements of Accuray’s “Distributor Qualification Protocol for Distributor
Competency” as updated by Accuray from time to time, and shall keep its staff
adequately trained in order to provide a high level of customer support,
including training required in response to staff turnover and expanded Product
configurations or additional Product upgrades offered by Distributor in the
Territory.

 

3.5.       Regulatory
Clearance.  Distributor will fully
cooperate with Accuray and will bear all expenses and manage all paperwork in
connection with obtaining any approvals, permits and licenses required under
any applicable law in order to sell, market and distribute the Products and
Services in the Territory, including any upgrades to or expanded usage of the
Products. Accuray will provide all documents reasonably required by the
Distributor to file the application forms and shall assist in filling such
application forms for said approval, permit or license, with the assistance and
full cooperation of Distributor.  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.

 

3.6.       Import License.  Distributor will obtain and maintain the
required import license, and shall serve as
importer of record for all Products and Services delivered in or into the
Territory.

 

3.7.       Offers.  Distributor shall inform Accuray of all
potential Customers in the Territory during the Term of this Agreement.  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.  Unless Distributor has prior
written consent from Accuray to the contrary and subject to the price
protection for existing Customer Quotes as provided in Section 2.2 above,
all offers submitted by Distributor to a potential Customer are (and
Distributor must inform the Customer that they are) subject to change in the
event Accuray’s standard international transaction terms and conditions of
sale, Product configuration offerings or Specifications change prior to the
time Distributor accepts an order from the Customer.

 

3.8.       Purchase Schedule.  For each sale completed by Distributor, the
resulting contract for the sale of Products and Services shall be between
Distributor and the Customer.  For each
such sale, Distributor must send an executed Quote to Accuray at least six (6) months
prior to the expected shipment date.  All
Products and Services must be purchased from Accuray unless otherwise specified
in this Agreement or agreed in writing by Accuray.

 

3.9.       Volume of Business.  Accuray and Distributor have reviewed and
discussed the Territory in detail and have agreed that Distributor will
purchase and pay for a minimum volume of Systems as set forth in Exhibit B attached to this
Agreement.  Any sales made by Accuray to
Customers in the Territory shall count towards the minimum volumes for
Distributor.  Notwithstanding Section 6.3
below, if Distributor does not make the minimum purchases set forth in Exhibit B, or does not pay
timely (within sixty (60) days of the due date) for those purchases, Accuray 

 

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  Accuray

  	
   

  	
   

  

 

may, at its sole
determination and in its sole and complete discretion, elect to make this
distribution arrangement immediately non-exclusive or immediately terminate
this Agreement.

 

3.10.     Forecast.  In order to support Accuray’s production
planning, at least every three (3) months during the Term of this
Agreement, Distributor will provide Accuray a twelve (12) month rolling
forecast of:  (i) targeted
Customers, (ii) contracted Customers, and (iii) forecast of Product
sales by product line.  The forecast will
include an update on the status of the top ten (10) projects as identified
by Distributor.  Such forecasts shall be provided
to Accuray by the first business day of January, April, July and September each
year, and shall be delivered to the Accuray Sales Manager for the Territory as
well as the General Manager for the applicable region.  Such forecasts are in addition to the reports
to be provided in accordance with Section 3.22.1 (Reports) below.

 

3.11.     Customer Training.  Distributor
will support Accuray’s training of new Customer personnel, and will send new
Customer users for training at Accuray’s facility in Sunnyvale, California or
such other facility designated by Accuray as reasonably required by Accuray in
accordance with its then current training requirements.  Distributor
shall be responsible for providing appropriate interpretation and translation
services necessary to ensure Customer personnel can participate in a meaningful
and effective way in the training courses provided by Accuray.

 

3.12.     Customer
Support.  Distributor 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 applicable within the
Territory.  Distributor will be
responsible for ensuring that its personnel maintain their proficiency with
respect to the Products and all upgrades, enhancements and new feature
releases, and will send its personnel to Accuray for training as necessary.

 

3.13.     Customer Relations.  Distributor shall report promptly and in
writing to Accuray any complaints or expressions of dissatisfaction by the
Customers relating to the Products or Services. 
While Distributor shall have no authority to offer on behalf of Accuray
anything in settlement of any such complaints or expressions, Distributor shall
use all best efforts to satisfy the Customer that the Products and Services
meet the applicable written Specifications, offer, and Quote, if such is the
case.

 

3.14.     Installation.  Distributor shall be responsible for
installation of Accuray Products at Customer sites in the Territory unless a
Quote specifically states that Accuray is responsible for such installation. If
Distributor cannot perform the installation, Distributor may engage Accuray or
other approved organizations with Accuray-trained personnel to provide installation
services, which shall be ordered separately at Distributor’s expense and priced
according to Accuray’s or such third party’s then current price lists for
installation services, as applicable.

 

3.15.     Other Customer Support. Distributor
will have primary responsibility for room evaluation, architecture support and
quality assurance issues in relation to Customer installation sites.

 

3.16.     Warranty.  Distributor
will be responsible for providing a one (1) year warranty (for parts and
service) for each Product a Customer purchases, for the purposes of which
Distributor may pass through to a Customer the warranty provided by Accuray
pursuant to Section 4.5. 
Distributor 

 

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  Accuray

  	
   

  	
   

  

 

will not make any other
warranties or representations in Accuray’s name or on Accuray’s behalf unless
approved in advance in writing by Accuray.

 

3.17.     Service Agreements.  Distributor will make commercially reasonable
efforts to sell a Service Agreement to each Customer.

 

3.18.     Upgrades.  Any Product upgrades released by Accuray can
be purchased at the discretion of the Distributor.  Such 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 C hereto.  Any parts or components that are removed from
a System in connection with a Product upgrade will be returned to Accuray by
Distributor at Distributor’s cost and expense.

 

3.19.     First
Line Field Service Training.  Distributor will provide to all Customers,
remotely and on-site when needed, routine maintenance and service and timely
response to special requests for service of all installed Products in the
Territory.  Distributor shall ensure that
its field service engineers and other service personnel receive periodic
training at an Accuray training facility as required pursuant to Section 3.4.
Accuray will cover the cost of the training courses and materials necessary to
train a maximum of five (5) Distributor field service personnel for five (5) training
days each, up to a maximum of twenty five (25) total training days for each
year during the Term (“Field Service Training”).  All twenty five (25) Field Service Training
days allotted for each year of the Term must be used by Distributor within the
applicable year; any additional field service personnel that Distributor is
required to train and any additional training days requested by Distributor
will be provided by Accuray at Distributor’s cost.  All such training will be provided to the
Distributor’s field service personnel in English only.  Distributor shall be responsible for all other
costs and expenses, including travel and lodging, incurred by it or its
personnel to attend such training.  In
addition, Distributor shall be responsible for providing appropriate
interpretation and translation services necessary to ensure its personnel can
participate in a meaningful and effective way in the training courses provided
by Accuray.

 

3.20.     Spare
Parts Inventory.  Once a
System is installed in the Territory, Distributor shall maintain at all times
during the Term of this Agreement and any extension thereof an inventory of
Spare Parts to meet its commitments under this Agreement and all Customer
obligations. Distributor is willing to ship Spare Parts to locations outside
the Territory as requested by Accuray, and Accuray will reimburse Distributor
for the direct cost of such activity.

 

3.20.1.     Urgent
Non-Inventory Spare Parts.  In
the event that Spare Parts are urgently required by a Customer and are not
available in the inventory of Spare Parts maintained by Distributor as required
in Section 3.20 above (“Urgent Non-Inventory Parts”), Accuray will provide
such Urgent Non-Inventory Parts to Distributor as soon as reasonably
practicable subject to the requirements of Section 3.20.2 below.

 

3.20.2.     Defective and Unused Spare
Parts.  In the event that Spare Parts,
including Urgent Non-Inventory Parts, do not comply with the warranty provided
in Section 4.5 below (“Defective Parts”) or Distributor does not
use Urgent Non-Inventory Parts provided by Accuray for Customer System repairs
or service (“Unused Parts”), Distributor shall return such Defective and
Unused Parts to Accuray in accordance with the following:

 

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  Accuray

  	
   

  	
   

  

 

(i)            Returns at Distributor’s
Cost.  Distributor shall return
Defective and Unused Parts to Accuray at Distributor’s cost, including without
limitation all shipping charges and any applicable taxes.

 

(ii)           Return Location.  Distributor shall return Defective and Unused
Parts to the Accuray entity that served as the shipping origin location for the
applicable part.  For example, parts
received by Distributor from Accuray located in Sunnyvale, California will be
returned to Accuray at that location, while parts received by Distributor from
Accuray Europe SAS in Paris, France, will be returned to Accuray Europe SAS at
that location.

 

(iii)          RMA Numbers.  Distributor shall contact Accuray in advance
for Return Material Authorization (“RMA”) number information for all
returns of Defective Parts.  Accuray must
receive the Defective Part prior to providing a replacement Spare Part to
Distributor.  Defective Parts returned to
Accuray (or an affiliate location) without appropriate RMA number references
will be billed to Distributor at Accuray’s standard list price.

 

(iv)          Timeliness of Returns.  Defective or Unused Parts not returned by
Distributor to Accuray (or an affiliate location) within thirty (30) days
following the original shipment of such part by Accuray will be invoiced to
Distributor at Accuray’s standard list price.

 

3.21.     Records and Reports.

 

3.21.1.     Reports.  Within thirty (30) days after the end of each
quarter, Distributor will provide Accuray with a written report that includes:

 

(i)          Distributor’s sales and
shipments of each Product for that quarter, by dollar volume and number of
units, both in the aggregate and for such categories as Accuray may designate
from time to time;

 

(ii)         service reports detailing
all uptime and parts warranty issues for Customers in the Territory;

 

(iii)        System utilization reports
for Customers in the Territory;

 

(iv)       details of Distributor’s
marketing activity in the Territory, including events hosted and attended by
Distributor and Customer communications prepared by Distributor, for the
previous quarter as well as public relations plans for the next quarter; and

 

(v)        any other information
requested by Accuray.

 

Distributor’s report will comply in form and
substance with Accuray’s standard form of Field Service Report and reporting
requirements, as they are determined by Accuray and communicated to Distributor
in writing from time to time.

 

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  Accuray

  	
   

  	
   

  

 

3.21.2.     Notification.  Distributor will promptly notify Accuray in
writing of any: (i) claim or proceeding involving the Products; or (ii) claimed
or suspected Product defects.

 

3.21.3.     Records.  During the term of this Agreement and for a
period of three (3) years after any termination or expiration hereof,
Distributor will maintain complete and accurate books, records and accounts
relating to the distribution of the Products and the provision of Services, and
will permit Accuray’s authorized representatives to examine them on reasonable
prior notice.

 

3.22.     Compliance with Laws.

 

3.22.1.     Within the Territory.  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 export controls imposed on the Products and Services
by any country or organization of nations within whose jurisdiction Distributor
operates or does business and with all applicable international, national,
regional and local laws, including all relevant commodity control laws and
regulations of the Territory in performing its duties hereunder in any
transactions involving the Products or Services. Distributor will notify
Accuray of any impending changes to Territory laws or regulatory requirements
that pertain to, and may necessitate modifications to, the Products or
Services.

 

3.22.2.     Import Requirements.  When Products are being shipped to Distributor,
unless the particular Quote provides otherwise, Distributor shall be
responsible for all import duties and other import, licensing and immigration
formalities which must be complied with in order for the Products to be
lawfully imported into the Territory or the Services to be lawfully performed
in the Territory.

 

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

 

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

 

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

 

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

 

3.22.4.     No Illegal Activity.  Distributor and its sub-distributors (if any)
(“Sub-Distributors”) shall not engage in any illegal activities. 
Accuray will not be held responsible for any activities of Distributor or its
Sub-Distributor that may be considered to be illegal.  For example,
Accuray does not support the practice of bribes or under-the-table payments. 

 

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  Accuray

  	
   

  	
   

  

 

Distributor will ensure a
like clause is included in each agreement it has with its Sub-Distributors, and
monitor activities of its Sub-Distributors in the Territory closely. In the
event Accuray deems that the good-will of its Products has been or may
potentially be affected by any such illegal activity, then Accuray reserves the
right to terminate this Agreement for material breach under Section 6.3
(Termination for Cause), with no further liability to Distributor, or its
Sub-Distributor. Accuray assumes no liability for any such practices and
Distributor hereby indemnifies and holds Accuray, its officers and assigns,
harmless from any loss, damage and liability arising from or in connection with
any such activities of Distributor or its Sub-Distributors.

 

3.23.     Translations. Unless
otherwise agreed, to the extent required by applicable regulatory requirements,
Distributor will translate or localize any product specifications, user manuals
and promotional literature Accuray provides to Distributor for use in the
Territory.  Distributor assumes all
liability for and indemnifies and holds Accuray harmless from any and all loss,
damage, liability, issues and claims relating to such translations or
localization of materials by Distributor. 
Distributor will use commercially reasonable efforts to ensure that
translated or localized materials relating to Products and Services conform to
Accuray guidelines on content, messaging and appropriate images as presented in
template materials provided to Distributor by Accuray from time to time, and
Accuray reserves the right to request review and modification of such
translated materials.

 

3.23.1.     Translation
Glossary. Distributor agrees to provide cooperation and
support to Accuray in the creation and maintenance of a translation glossary to
ensure that product specifications, user manuals and promotional literature
feature consistent terminology and vocabulary identified with the Products and
Services in the Territory.

 

3.24.     Insurance.  Distributor shall obtain and keep in full
force and effect during the Term of this Agreement (and thereafter until all
obligations to all Customers which Accuray has accepted an executed Quote from
Distributor have been completed) all insurance required by and in compliance
with local laws in the Territory, which shall be equivalent to general and
products liability and workers’ compensation insurance on an occurrence basis
with coverage limits (i) reasonably required for the normal and customary
business of a medical device distributor and (ii) sufficient to provide
coverage of
any claim which may reasonably arise out of the actions or inactions of that
party related to this Agreement or the business relationship between the
parties.  Distributor shall provide to
Accuray upon reasonable request from time to time while its obligation under
this paragraph is in effect certificates evidencing such insurance, which
certificates shall expressly provide that the underlying coverage cannot be
cancelled without at least thirty (30) days’ written notice to Accuray.

 

3.25.     Competing Products.  During the Term of this Agreement,
Distributor will not directly or indirectly, whether through affiliates,
Sub-Distributors or otherwise, sell, offer for sale, promote the sale of,
distribute, advocate or represent in any way products or services which are
competitive with the Products or Services.

 

3.26.     Rescheduling.  Upon written notice to Accuray, Distributor
may request Accuray to defer delivery of a Product for a maximum of ninety (90)
days, the delivery date then being so extended. 
If notice of an extension of a delivery date is received by Accuray less
than six (6) weeks before the originally scheduled date of delivery,
Distributor shall pay the costs of

 

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  Accuray

  	
   

  	
   

  

 

insurance and storage
incurred by Accuray.  In the event of a
notice from Distributor requesting a delay of delivery of the Product followed
by a subsequent cancellation of the order by Distributor, any cancellation charges
due, including costs incurred to insure and store the Product, shall be
calculated based upon the earlier of (i) the original delivery date and
(ii) the date of the request by Distributor for the first delay.

 

4.          DUTIES OF ACCURAY

 

4.1.       Products and Services.

 

4.1.1.       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 in a timely manner those Products
and Services required to fill fully executed Quotes received from Distributor
in accordance with the terms of this Agreement.

 

4.1.2.       Shipment.  All shipments shall be EXW Accuray
Incorporated, unless otherwise agreed in writing.

 

4.2.       Product and Service Pricing. Accuray will provide its then current
U.S. list pricing for its Products and Services to Distributor from time to
time during the Term of this Agreement, or upon request from Distributor.  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. 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.  Distributor is responsible for obtaining the
regulatory clearance in the Territory for Products in Accuray’s name, as
detailed in Section 3.5 (Regulatory Clearance), however Accuray will
provide Distributor with reasonable assistance in obtaining regulatory
clearances.

 

4.5.       Warranty.

 

4.5.1.       Scope of Warranty.  Accuray will provide a warranty 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 Specifications.  If
Accuray does not perform the Installation, Distributor will notify Accuray in
writing within three (3) days following Installation (including any
testing procedures 

 

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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 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 Distributor 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.

 

4.5.2.       Hardware. If
Distributor 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 Distributor 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 Distributor’s sole and exclusive
remedy in relation to defective Products and parts.

 

4.5.3.       Software. During the
Warranty Period, Accuray will provide error corrections or “bug fixes” to
Distributor, including any applicable error corrections and bug fixes generally
provided by Accuray to Accuray customers with Product installations similar to
the Customers’ installations. This will be Accuray’s sole and exclusive
obligation and Distributor’s sole and exclusive remedy in relation to defective
software.

 

4.5.4.       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 4.5 shall be void 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.       Service Agreements.   Accuray will provide its then current
Service Agreements to Distributor from time to time during the Term of this
Agreement, 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 executed by Distributor on the terms as set forth
in those agreements, unless otherwise agreed to in writing by an authorized
representative of Accuray.

 

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

 

4.8.       Training.  If specified in a Quote, Accuray will provide
training to Customers as specified therein and in accordance with Accuray’s
then current training offerings. For the purposes of 

 

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such Customer training, Accuray will be responsible for the travel and
accommodation expenses of its personnel, while Distributor shall be responsible
for the travel and accommodation expenses of Customers and their 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, Distributor must provide an interpreter and
translation services sufficient to enable the Customer and its personnel to
meaningfully and effectively participate in Accuray training courses.

 

4.9.       Compliance with Laws.   Accuray will be responsible for complying
with applicable U.S. laws, and, as notified by Distributor in writing, with
Territory laws as they pertain to the Products, the regulatory clearance, and
safety in accordance with Accuray’s written Product specifications for intended
use.  Upon notification by Distributor of
any impending changes to Territory laws or regulatory requirements that may
necessitate modifications in the Products or Services, Accuray shall respond to
such notifications in a timely manner and use commercially reasonable efforts
with the cooperation of the Distributor to make necessary efforts to ensure
continued compliance.

 

5.          COMPENSATION AND PAYMENT

 

5.1.       Orders.  Distributor shall make an offer to a Customer
based on the Quote provided by Accuray and subject to the process set forth in Section 2.3
above. Upon acceptance of such offer by the Customer, Distributor shall submit an
executed version of the appropriate Quote to Accuray.  Quotes executed by Distributor and submitted
to Accuray shall not be deemed accepted until confirmed in writing by Accuray.

 

5.2.       Purchase Price.

 

5.2.1.       Distributor shall pay the
prices listed in the applicable Quote (unless prior written approval by Accuray
for application of an earlier price list is obtained) for the Products and
Services, including any Spare Parts, less any applicable discounts as specified
in Exhibit C hereto.

 

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 by the Distributor. Unless advised otherwise, all prices quoted by Accuray
include the cost of packing and crating for delivery.

 

5.2.3.       All sales to Distributor are
exclusive of sales, use, value-added, import or export duties or fees or
similar taxes and the Distributor shall pay all taxes related to the Products
and/or Services except for taxes on income of Accuray from the sale of the
Products and/or Services.

 

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
Services, and Distributor shall bear all of the expenses which it incurs in
making those efforts.  Notwithstanding
the foregoing, in the event that Accuray contracts directly with a Customer,
Accuray and Distributor shall discuss and agree at the time of such sale any
possible 

 

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commission to be paid to
Distributor.  Factors relevant to the
existence and amount of such potential commission shall include, but are not
limited to, whether Distributor was involved in such sale,  the level of effort put forth by Distributor
in relation to such sale, and whether Distributor has responsibility for
ongoing support or service obligations to the Customer.

 

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 5.4.1.4 (Wire Transfer), respectively below.  Credit card payments will not be accepted by
Accuray unless Distributor agrees to pay any fees charged by its credit card
provider.  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.  Distributor
will pay a late charge of two percent (2%) on any balance that becomes overdue,
plus interest at the lesser of one percent (1%) per month or the maximum rate
permitted by law, until paid in full. 
Accuray’s performance hereunder is subject to Accuray’s approval of
Distributor’s credit.

 

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 with the Quote executed by
Distributor.  The letter of credit will
provide that Accuray can draw against the letter of credit according to the
following schedule:

 

5.4.1.2.          US $250,000 (non-refundable
but transferable) upon Accuray’s acceptance of the executed Quote, which must
be at least four (4) months prior to the Distributor’s proposed shipment
date; and

 

5.4.1.3.          Balance upon presentation of
documents by Accuray evidencing shipment of the Products to Distributor or
Customer as designated in the Quote.

 

5.4.1.4.          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:

 

5.4.1.5.          US $250,000 (non-refundable
but transferable) upon Accuray’s acceptance of the executed Quote, which must
be at least four (4) months prior to the Distributor’s proposed shipment date;
and

 

5.4.1.6.          Balance five (5) business
days prior to shipment of the Products to Distributor or Customer as designated
in the Quote.

 

5.4.1.7.          Other Fees.  Prices are net without any tax, VAT, toll or
similar fees.  Distributor will bear such
taxes, tolls or similar fees.  Any sales
taxes (a) due with respect to payments made on or before the date of
delivery, shall be due on the delivery date and (b) due with respect to
payments made 

 

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following the date of
delivery, shall be due together with payment of the underlying amount.

 

5.4.1.8.          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.  If sufficient evidence is not
provided.

 

5.4.2.       Products, Spare Parts and
Upgrade Payments.  Full
payment of the purchase price for Products, Spare Parts and upgrades shall be
made by Distributor to Accuray in US Dollars  by wire
transfer made in advance of the date payment is due to a bank selected by
Accuray.  Such payment to be made no less
than five (5) business days prior to shipment of the Product, Spare Part or
upgrade.  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), 5.4.1.4 (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 and Services 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 and
Services to Distributor (“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.  The term of this Agreement shall begin on the
Effective Date and continue for a period of [three (3) years] (“Term”),
unless extended or sooner terminated in accordance with this Section 6.

 

6.2.       Renewal.   This Agreement may be renewed for additional
one-year periods, upon the mutual written agreement of the Parties.  Such written agreement shall include any
revision of the minimum volumes and pricing as may be agreed upon by the
parties.

 

6.3.       Termination for Cause.  Either party may terminate this Agreement if
the other party commits a material breach of this Agreement and fails to cure
it within forty-five (45) days after written notice of the breach is received
from the non-breaching party, provided that, as to a breach 

 

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which cannot be fully cured
within forty-five (45) days, then the parties shall agree in writing on a
resolution plan and a reasonable timeline for such cure period, and that breach
shall be deemed timely cured if the cure is completed within the agreed upon
timeline.  The effective date of
termination shall be the date of expiration of the applicable cure period
without a cure having occurred.

 

6.4.       Termination Without Cause.  Either party may terminate this Agreement
with six (6) months prior written notice to the other party.  Each party shall diligently pursue its
obligations under this Agreement until the effective date of termination.

 

6.5.       Termination Upon Change in
Control.  Accuray shall have the right
to terminate this Agreement in the event of a change in control of Distributor,
acquisition of Distributor by a third party or a global change in Accuray’s
distributorship structure upon six (6) months advance written notice to
Distributor.  A global change in Accuray’s
distribution structure may occur when Accuray, in its sole discretion and in
its own best interests, determines the need to change its distribution
channels, structure, or arrangements on a global basis.

 

6.6.       Effect of Termination.  In the event of termination, the effect of
such termination shall be as follows:

 

6.6.1.       Sales in Process.  This Section 6.6.1 shall only apply in
cases of Termination Without Cause (Section 6.4) and Termination Upon
Change in Control (Section 6.5).

 

6.6.1.1.          Accuray will continue to
accept submission of executed Quotes by Distributor within the six (6) months
prior to the effective date of termination;

 

6.6.1.2.          Distributor shall pay the
nonrefundable, transferable  US $250,000
deposit in accordance with Section 5.4 (Payment), and submit a Customer
contract for each executed Quote submitted under Section 6.6.1 above
within three (3) months of the date the executed Quote was submitted to
Accuray; and

 

6.6.1.3.          Distributor shall pay the
balance of the Quote payment amount in accordance with Section 5.4, with
shipment of the Product to be scheduled by Distributor within nine (9) months
from the date the executed Quote was submitted to Accuray under Section 6.6.1.

 

6.6.1.4.          Failure of Distributor to
comply with any of the items in Sections 6.6.1.1, 6.6.1.2, or 6.6.1.3 will
relieve Accuray of any obligations to Distributor under this Section 6.6.1.

 

6.6.1.5.          Other than as provided in
this Section 6.6.1, Accuray shall have no further liability to Distributor
and Distributor shall not be entitled to any additional compensation in
relation to a termination of this Agreement.

 

6.6.2.       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.

 

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6.6.3.       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.

 

6.7.       Termination
Transition Assistance. 
Immediately following termination, as applicable, Distributor shall
transfer to Accuray upon Accuray’s request: any regulatory clearances, licenses
or permits obtained for conduct of the business in the Territory; 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.

 

6.8.       Distributor’s Right to
Support following Termination.

 

6.8.1.       If Distributor has
continuing obligations to support Customers following termination of this
Agreement, including any Service Agreements, Accuray will continue to provide
support to Distributor at Distributor’s cost for it to effectively support such
Customers pursuant to the terms of such Customer agreements.  However, in the event that Distributor fails
to provide the same or greater service to any Customer, including uptime
guarantees, as provided to Distributor by Accuray under the related service
agreement, then Accuray shall have the right to demand that Distributor assign
the Customer service agreement to Accuray.

 

6.8.2.       Alternatively, Accuray will
have the right to take over support for those existing Customers and will
reimburse Distributor for: any loss of gross revenue from the Customer during
the remaining term of the applicable Customer agreement less, unless already
paid, the cost of support to be provided by Accuray, as reasonably determined
and negotiated in good faith.

 

6.9.       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.

 

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

 

7.          DISPUTE RESOLUTION

 

7.1.       Notification
and Discussion.  Accuray and
Distributor hereby irrevocably and unconditionally agree as follows:  Should any dispute arise between the
parties relating to this Agreement or the business relationship between the
parties, such dispute shall be submitted by one or both parties, in writing, to
the principal executive of Distributor and the President of Accuray for
resolution. The parties shall attempt to resolve any dispute arising out of or
relating to this Agreement promptly by negotiation between executives who have
authority to settle the dispute.

 

7.2.       Arbitration.  In the event of any dispute arising out of or
in connection with this Agreement that is not resolved by the parties after
escalation to the principle executive of Distributor and the 

 

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President of Accuray as
described above, either party may submit the matter to binding arbitration
under the Rules of Arbitration of the International Chamber of Commerce by
a single arbitrator appointed in accordance with the Rules of
Arbitration.  Any such arbitration shall
be conducted in Paris, France and shall be conducted in the English language as
spoken and interpreted in the United States of America.  All written materials in connection with such
arbitration shall be in the English language. 
The costs of the arbitration shall be borne equally by the Distributor  and Accuray. 
Judgment on the arbitrator’s award may be entered in any court of
competent jurisdiction.

 

7.3.       Governing Law
and Venue.  The rights
and obligations of the parties under this Agreement shall be governed in all
respects by the laws of the United States and the State of California without
regard to conflicts of laws principles or international treaties (such as the
U.N. Convention on Contracts for the International Sale of Goods) that would
require the application of the laws of any other jurisdiction.  No action, regardless of form, arising out of
or related to any Accuray Deliverable may be brought by Distributor more than 1
year after Distributor has or should have become aware of the cause of action.

 

7.4.       Confidential Information.  Any breach by Accuray or Distributor of their
respective obligations in relation to intellectual property or confidential
information as described in Section 8 (Confidentiality) below or related
obligations of this Agreement will cause the injured party irreparable harm for
which money damages shall be an inadequate remedy and difficult to
ascertain.  Consequently, notwithstanding
anything else in this Agreement to the contrary, in the event of any such
threatened or actual breach, the injured party will be entitled to seek
equitable relief in any court having jurisdiction on any claim based upon the
actual or imminent misuse or unauthorized disclosure of the injured party’s
intellectual property or confidential information, including preliminary
injunctions restraining such breach and specific performance of the other party’s
obligations and covenants in such sections. 
Such equitable relief shall be in addition, and without prejudice, to
any other remedies available to the injured party at law or under this
Agreement for any such breach or threatened breach.  If the injured party seeks injunctive relief,
such action shall not constitute a waiver of the provisions of this Agreement
to arbitrate, which shall continue to govern any and every dispute between the
parties including, without limitation, the right of damages, permanent injunctive
relief, and any other remedy at law or in equity.

 

8.          CONFIDENTIALITY.

 

8.1.       Definition.  “Confidential Information” means: (i) any
non-public information of a party, including, without limitation, any
information relating to a party’s current and planned products and services,
technology, techniques, know-how, research, engineering, designs, finances,
accounts, procurement requirements, manufacturing, customer lists, business
forecasts and marketing plans; (ii) any other information of a party that
is disclosed in writing and is conspicuously designated as “Confidential” at
the time of disclosure or that is disclosed orally, is identified as “Confidential”
at the time of disclosure, and is summarized in a writing sent by the
disclosing party to the receiving party within thirty (30) days of any such
disclosure; and (iii) the specific terms and pricing set forth in this
Agreement.

 

8.2.       Exclusions.  The obligations in Section 8.3
(Obligations) will not apply to the extent any information: (i) is or becomes
generally known to the public through no fault of or breach of this Agreement
by the receiving party; (ii) was rightfully in the receiving party’s
possession at 

 

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the time of disclosure,
without an obligation of confidentiality; (iii) is independently developed
by the receiving party without use of the disclosing party’s Confidential
Information; or (iv) is rightfully obtained by the receiving party from a
third party without restriction on use or disclosure.

 

8.3.       Obligations.  Each party will not use the other party’s
Confidential Information, except as necessary for the performance of this
Agreement, and will not disclose such Confidential Information to any third
party, except to those of its employees and subcontractors that need to know
such Confidential Information for the performance of this Agreement, provided
that each such employee and subcontractor is subject to a written agreement
that includes binding use and disclosure restrictions that are at least as
protective as those set forth herein. 
Each party will use all commercially reasonable efforts to maintain the
confidentiality of all of the other party’s Confidential Information in its
possession or control, but in no event less than the efforts that it ordinarily
uses with respect to its own confidential information of similar nature and
importance.  The foregoing obligations
will not restrict either party from disclosing the other party’s Confidential Information
or the terms and conditions of this Agreement: (i) pursuant to the order
or requirement of a court, administrative agency, or other governmental body,
provided that the party required to make such a disclosure gives reasonable
notice to the other party to enable it to contest such order or requirement; (ii) on
a confidential basis to its legal or professional financial advisors; (iii) as
required under applicable securities regulations; or (iv) on a
confidential basis to present or future providers of venture capital and/or
potential private investors in or acquirers of such party.

 

9.          INTELLECTUAL PROPERTY RIGHTS.

 

9.1.       Notice of Infringement.  Distributor undertakes to inform Accuray
within two (2) days from the date 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 and participate with
Accuray regarding any legal action in relation to such infringement, which in
Accuray’s judgment, is necessary or desirable.

 

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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 in the Territory, then Accuray
agrees, at its discretion, either to (i) defend the claim at its expense,
with the cooperation of Distributor or (ii) make changes in the Product or
part thereof 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. 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; and (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.   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.  Distributor shall
be responsible for compliance with all 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.

 

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 as may be permitted by Accuray for the sale of Distributor’s
inventory of Products.

 

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10.        INDEMNITIES.

 

10.1.     Accuray Indemnity.  Accuray will defend or settle any action
brought against Distributor 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 United States patent or any copyright or
misappropriates any trade secret, and will pay any costs and damages made in
settlement or awarded against Distributor in final judgment 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 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 product
specifications for its intended use, and will pay any costs and damages made in
settlement or awarded against Distributor in final judgment 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-infringing; or (iii) if options (i) and (ii) above
cannot be accomplished despite Accuray’s reasonable efforts, then Accuray may
terminate Distributor’s rights and Accuray’s obligations hereunder with respect
to such Product and 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 product 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; (vi) Distributor’s use
or distribution of a Product other than in accordance with this Agreement or (vii) Distributor
contracts with other manufacturers, including Elekta and manufacturers of
products and services that compete with Accuray.  The foregoing clauses (i) to (vii) are
referred to collectively as “Indemnity Exclusions”.

 

21

 

	
  Initials:  Distributor

  	
   

  	
   

  
	
  Accuray

  	
   

  	
   

  

 

10.5.     Limitation.  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 OR PRODUCTS LIABILITY.

 

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) arising out of or resulting from
any third-party claim based on or otherwise attributable to: (i) Distributor’s
acts or omissions; (ii) any misrepresentations made by Distributor with
respect to Accuray or the Products or Services; or (iii) an Indemnity
Exclusion.

 

11.        LIABILITY.

 

11.1.     Exclusion of Certain Damages.  IN NO EVENT WILL ACCURAY BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT
LIMITED TO, LOST PROFITS OR REVENUE, LOST DATA, LOSS OF USE, LOST BUSINESS
OPPORTUNITIES OR OTHER ECONOMIC ADVANTAGE, OR LOSS OF GOODWILL), OR FOR THE
COSTS OF PROCURING SUBSTITUTE PRODUCTS, ARISING OUT OF, RELATING TO OR IN
CONNECTION WITH THIS AGREEMENT OR THE USE OR PERFORMANCE OF ANY ACCURAY
PRODUCTS OR SERVICES PROVIDED BY ACCURAY, WHETHER SUCH LIABILITY ARISES FROM
ANY CLAIM BASED UPON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), PRODUCT
LIABILITY OR OTHERWISE, WHETHER OR NOT ACCURAY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH LOSS OR DAMAGE.  THE
PARTIES HAVE AGREED THAT THESE LIMITATIONS WILL SURVIVE AND APPLY EVEN IF ANY
LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED OF ITS
ESSENTIAL PURPOSE.

 

11.2.     Total Liability.  ACCURAY’S TOTAL LIABILITY TO DISTRIBUTOR
UNDER THIS AGREEMENT, FROM ALL CAUSES OF ACTION AND UNDER ALL THEORIES OF
LIABILITY, WILL BE LIMITED TO THE PAYMENTS ACTUALLY RECEIVED FROM DISTRIBUTOR
UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTH PERIOD PRECEDING THE DATE A
CLAIM FOR LIABILITY ARISES HEREUNDER.

 

11.3.     Basis of Bargain.  The parties expressly acknowledge and agree
that Accuray has set its prices and entered into this Agreement in reliance
upon the limitations of liability specified herein, which allocate the risk
between Accuray and Distributor and form an essential basis of the bargain
between the parties.

 

12.        MISCELLANEOUS PROVISIONS

 

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

 

22

 

	
  Initials:  Distributor

  	
   

  	
   

  
	
  Accuray

  	
   

  	
   

  

 

12.2.     Good Will.  Distributor agrees that it will help develop
and work to preserve the good will of Accuray within the Territory, and will
not unreasonably harm that good will.  In
the event of termination of this Agreement for any reason, Distributor will not
do anything to unreasonably harm the good will of Accuray within the Territory.

 

12.3.     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.

 

12.4.     Assignment.   Neither party may assign this
Agreement without the other party’s prior written consent. However, Accuray may
assign this Agreement, without Distributor’s consent, to an affiliate or to a
successor or acquirer, as the case may be, in connection with a merger or
acquisition, or the sale of all or substantially all of Accuray’s assets or the
sale of that portion of Accuray’s business to which this Agreement
relates.  Subject to the foregoing, this Agreement will bind and inure to
the benefit of the parties’ permitted successors and assigns.

 

12.5.     Conduct.      Accuray prohibits the
harassment of our employees and contractors in any form.  Accuray considers harassment of, or
discrimination against, our employees and affiliated persons a very serious
matter and will investigate all complaints of inappropriate conduct.  Where our investigation uncovers harassment
or discrimination, we will not hesitate to take prompt corrective action.

 

12.6.     Notices.  All notices required or permitted under this
Agreement will be in writing and delivered in person, effective immediately, by
overnight delivery service, effective two (2) business days after deposit
with the carrier, or by registered or certified mail, postage prepaid with
return receipt requested, effective five (5) business days after deposit
with the carrier.  All communications will be sent to the addresses set
forth below or to such other address as may be specified by either party in
writing to the other party in accordance with this Section.

 

	
  To Accuray:

  	
  To Distributor:

  
	
   

  	
   

  
	
  Accuray
  Incorporated 

  Attention:  Chief Financial Officer 

  1310 Chesapeake Terrace 

  Sunnyvale, CA 94089 

  with cc to: General Counsel

  	
   

  

 

12.7.     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.

 

12.8.     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.

 

12.9.     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 

 

23

 

	
  Initials:  Distributor

  	
   

  	
   

  
	
  Accuray

  	
   

  	
   

  

 

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 3.16 (Warranty); Section 3.22
(Compliance with Laws); Section 3.24 (Insurance); Section 4.5
(Warranty); Section 6.6 (Effect of Termination); Section 6.7
(Termination Transition Assistance); Section 6.8 (Distributor’s Right to
Support following Termination); Section 7 (Dispute Resolution); Section 8
(Confidentiality); Section 9 (Intellectual Property Rights); Section 10
(Indemnities), Section 11 (Liability) and Section 12 (Miscellaneous
Provisions).

 

12.10.    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.

 

12.11.    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.

 

12.12.    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.

 

12.13.    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.

 

12.14.    Entire
Agreement.  This
Agreement contains 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 as severable, leaving valid the remainder of the terms and
conditions.

 

12.15.    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

 

24

 

	
  Initials:  Distributor

  	
   

  	
   

  
	
  Accuray

  	
   

  	
   

  

 

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:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print name:

  	
   

  	
   

  	
  Print
  name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  undersigned acknowledges that the terms and conditions of this Agreement meet
  the policies and procedures of Accuray.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Accuray
  Legal

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
							

 

SIGNATURE PAGE TO INTERNATIONAL DISTRIBUTOR AGREEMENT

 

25

 

	
  Initials:  Distributor

  	
   

  	
   

  
	
  Accuray

  	
   

  	
   

  

 

EXHIBIT A

 

TERRITORY

 

As
set forth in the Agreement, Distributor shall act as Accuray’s [non-exclusive
Distributor][sole Distributor (not exclusive of Accuray)] in the following
geographic region:

 

26

 

	
  Initials:  Distributor

  	
   

  	
   

  
	
  Accuray

  	
   

  	
   

  

 

EXHIBIT B

 

PRODUCT MINIMUM VOLUMES

 

During
the Term of this Agreement, Distributor agrees to purchase and pay in full for
a minimum number of CyberKnife Systems as set forth below.  All such Systems shall be installed within
six (6) months of delivery.

 

·    [{*****}] Systems to be purchased by
Distributor in the first year of the Agreement Term, following which such
minimum number requirement will be subject to annual review and amendment by
Accuray no less than ninety (90) days prior to the end of the then current year
of the Term, provided, however, that in no event shall Accuray increase such
minimum number requirement by more than {*****} percent ({*****}%) of the
minimum volume for the preceding year.

 

27

 

	
  Initials:  Distributor

  	
   

  	
   

  
	
  Accuray

  	
   

  	
   

  

 

EXHIBIT C

 

DISTRIBUTOR DISCOUNTS ON PRODUCTS AND SERVICES

 

Accuray
will provide Distributor the following discounts off the then current U.S. list
price for Products and Services, provided that Distributor meets the minimum
volumes as set forth in Exhibit B:

 

1.             Distributors (a) in
Latin America and Asia will receive a {*****}% discount on each System and (b) in
Europe will receive an {*****}% discount on each System, provided that
Distributors in Russia will receive a {*****}% discount on each System,

 

2.             Distributors (a) in
Latin America and Asia will receive a {*****}% discount on the purchase of
upgrades for a Customer’s System and (b) in Europe will receive an
{*****}% discount on the purchase of upgrades for a Customer’s System, provided
that Distributors in Russia will receive a {*****}% discount on the purchase of
upgrades for each System; and each Distributor shall receive a {*****}%
discount on the purchase of a Linear Accelerator, Imaging System,
RoboCouchTM Patient Positioning System and Appearance upgrade, provided that
Distributor has purchased a Service Agreement for that Customer.  If no Service Agreement was purchased for the
Customer’s System in question, all such upgrades will be offered to Distributor
at the U.S. List Price.  Any discount
available to Distributor for newly released upgrades to the System will be set
by Accuray when the upgrade is made available to Distributor.

 

3.             Distributors (a) in
Latin America and Asia will receive a {*****}% discount on the purchase of
consumables, such as fiducials for a Customer’s System and (b) in Europe
will receive an {*****}% discount on such fiducials, provided that Distributors
in Russia will receive a {*****}% discount on such fiducials, provided, in each
case, that Distributor has purchased a Service Agreement for that
Customer.  If no Service Agreement was
purchased for the Customer’s System in question, all such consumables will be
offered to Distributor at the U.S. List Price.

 

4.             Distributors (a) in
Asia and Latin America will receive a {*****}% discount on Service Agreements
and (b) in Europe will receive an {*****}% discount on Service Agreements,
provided that Distributors in Russia will receive a {*****}% discount on
Service Agreements.

 

5.             Distributors (a) in
Asia and Latin America will receive a {*****}% discount on Spare Parts not
covered under a Service Agreement for a Customer’s System and (b) in
Europe will receive an {*****}% discount on such Spare Parts not covered under
a Service Agreement for a Customer’s System, provided that Distributors in
Russia will receive a {*****}% discount on such Spare Parts not covered under a
Service Agreement for a Customer’s System; provided, in each case, that
Distributor has purchased a Service Agreement for that Customer.  If no Service Agreement was purchased for the
Customer’s System in question, Distributor will receive a {*****}% discount on
Spare Parts for that System.

 

28

 

EXHIBIT E

 

Siemens Code of Conduct

 

See attached.

 

 

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 F

 

Siemens Quality Assurance
Agreement

 

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.

 

7

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