Document:

Exhibit 10.1

 

Dated 8th of October 2015

 

	(1)	ASTERIAS BIOTHERAPEUTICS INCORPORATED

 

	(2)	CELL THERAPY CATAPULT SERVICES LIMITED

 

 

Services Agreement

 

 

1

CONTENTS

 

	
Clause

	 	 
	 	
Page

	 
	
1

	
INTERPRETATION

	
3

	
2

	
APPOINTMENT

	
5

	
3

	
TERM

	
5

	
4

	
SERVICES

	
5

	
5

	
CUSTOMER’S OBLIGATIONS

	
6

	
6

	
INVOICES AND PAYMENT

	
6

	
7

	
CONFIDENTIAL INFORMATION

	
8

	
8

	
INTELLECTUAL PROPERTY

	
9

	
9

	
STATE AID

	
10

	
10

	
WARRANTIES

	
11

	
11

	
INDEMNITIES

	
11

	
12

	
LIABILITY AND INSURANCE

	
11

	
13

	
TERMINATION

	
12

	
14

	
GENERAL

	
13

	
Schedules

	 	 
	
1

	
Additional Commitments

	17

 

2

	
THIS AGREEMENT ("Agreement") is made on

	
2015

 

BETWEEN:

 

	(1)	ASTERIAS BIOTHERAPEUTICS, INC., a company incorporated in the State of Delaware, USA and whose principal place of business is at 230 Constitution Drive, Menlo Park, California, 94025, USA (“Customer”); and

 

	(2)	CELL THERAPY CATAPULT SERVICES LIMITED, a company incorporated and registered in England and Wales with company number 08215513 whose registered office is at 12th Floor Tower Wing, Guy’s Hospital, Great Maze Pond, London SE1 9RT, UK (“Catapult”).

 

each a “Party” and together the “Parties”.

 

RECITALS:

 

	(A)	
Catapult is part of a Research Organisation (Catapult Research Organisation) specialising in the development of technologies which speed the growth of the cell and gene therapy industry, and Catapult has access to affiliate platform projects relating to the large scale manufacture of pluripotent cells and other cellular expansions protocols.

 

	(B)	Customer is engaged in the development of cell therapy medicaments based upon pluripotent stem cell-derived dendritic cells.

 

	(C)	The parties believe that intellectual property from the Catapult’s platform projects and elsewhere within the Catapult Research Organisation (the “Platform Projects”), combined with further work, may speed the commercial development of Customer’s cell therapy medicaments.

 

	(D)	Customer wishes to engage Catapult on the terms set out in this Agreement to provide certain services (as more fully described in the "Side Letter") and licence certain background intellectual property (as more fully described in Section 8 (Intellectual Property) below) in connection with developing a scalable manufacturing and differentiation process for Asterias’ human embryonic stem cell derived DC AST-VAC2 product.

 

	(E)	The Parties to this Agreement recognise that the project is experimental in nature and while Catapult and Customer will work diligently to achieve the Deliverable (as defined below) an insurmountable technical issue may be encountered, at any time during the work plan, meaning that the project will be terminated at no fault of either Party.

 

OPERATIVE CLAUSES

 

	1.	INTERPRETATION

 

	1.1	The definitions in this clause apply in this Agreement (unless the context requires otherwise).

	
“Affiliate”

	
in relation to a Party, means any entity or person which Controls, is Controlled by, or is under common Control with that Party;

	 	 
	
“Background Intellectual 

Property”

	
any and all Intellectual Property, including in the case of Catapult that which arises under the Platform Projects, which is owned, licensed or controlled by a Party and is used by such Party in the performance of its obligations under this Agreement, but excludes Foreground Intellectual Property;

 

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“Business Day”

	
a day that is not a Saturday, Sunday or public or bank holiday in England or the State of California;

	 	 
	
“Charges”

	
the charges set out in the Side Letter;

	 	 
	
“Claims”

 

	
all demands, claims, and liability (whether criminal or civil, in contract, tort, or otherwise) for losses, damages, legal costs, and other expenses of any nature whatsoever and all costs and expenses (including legal costs) incurred in connection therewith;

	 	 
	
“Confidential Information”

	
all technical, scientific, or commercial information, including materials, improvements, inventions, developments, techniques, processes, methods, plans, drawings, designs, specifications, procedures, computer software, data, results, trade secrets, know-how, and all information concerning past, present, and future transactions, dealings, projects, plans, proposals, and other business affairs;

	 	 
	
“Control”

 

	
direct or indirect beneficial ownership of 50 per cent or more of the share capital, or other participating interest carrying the right to vote or to distribution of profits of that Party;

	 	 
	
“Designated Supervisors”

	
the individuals identified as such in the Side Letter;

	 	 
	
“Deliverables”

	
the deliverables to be prepared by Catapult and delivered to Customer as part of the Services as set out in the Side Letter;

	 	 
	
“Foreground Intellectual 

Property”

	
any and all Intellectual Property, which arises from the performance of this Agreement;

	 	 
	
“Intellectual Property”

 

	
any and all patents, utility models, registered designs, unregistered design rights, copyright, database rights, rights in respect of confidential information, rights under data exclusivity laws, rights under orphan drug laws, rights under unfair competition laws, property rights in biological or chemical materials, extension of the terms of any such rights (including supplementary protection certificates), know-how, applications for and the right to apply for any of the foregoing registered property and rights, and similar or analogous rights in any part of the world;

	 	 
	
“Licences”

	
the licences as defined in Section 8 (Intellectual Property) in this agreement;

	 	 
	
“Payment Amount”

	
the amounts set out in the Side Letter due to be paid by Customer to Catapult in advance of the delivery of work towards achievement of the milestones;

	 	 
	
“Personnel”

	
any directors, employees, agents, consultants or contractors of a Party;

	 	 
	
“Research Organisation”

	
an entity falling within the definition of a research organisation as set out in the R&D&I Framework;

 

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“R&D&I Framework”

	
the Framework for State aid for research and development and innovation 2014/C 198/01 including any amendments to the same or replacements thereof; and

	 	 
	
“Services”

	
the services to be carried out and Deliverables to be provided by Catapult as described in the Side Letter.

	2.	APPOINTMENT

 

Customer appoints Catapult, and Catapult agrees, to provide the Services and licences to Customer as set out in this Agreement.  The Side Letter sets out details of the Services to be provided and the associated Charges and forms part of and is incorporated into this Agreement.

 

	3.	TERM

 

This Agreement shall commence on the date set out above and shall continue until such a time as all the Services have been delivered to Customer, unless earlier terminated in accordance with its terms.

 

	4.	SERVICES

 

	4.1	Catapult shall:

 

		4.1.1	exercise, and ensure that its Personnel exercise reasonable skill, care, and diligence in the performance of the Services;

 

		4.1.2	carry out the Services in accordance with all appropriate legal and regulatory requirements and recommendations; and

 

		4.1.3	work diligently to complete the Services in accordance with any estimated timetable set out in the Side Letter, however both Parties recognize that the timelines for performance of the Services may be subject to changes as a result of unforeseen technical challenges. If the Catapult encounters a technical issue which means that completion of the Services is not possible or only achievable by using resources which are not contemplated by the activities set out in the Side Letter and which cannot be resolved through the mechanism included in Clause 4.6, then the Catapult may terminate this Agreement on 60 days written notice to the Customer.

 

	4.2	Catapult shall ensure that all its Personnel who perform the Services are technically competent and suitably qualified to carry out the parts of the Services assigned to them.

 

	4.3	Each Party shall appoint a Designated Supervisor for the Services. Catapult’s Designated Supervisor shall be responsible for the overall conduct of the Services and shall be the principal point of contact with Customer for all matters relating to this Agreement.

 

	4.4	Catapult shall on written request from Customer keep Customer informed of the progress of the Services, including without limitation holding joint project teleconferences with Customer at least once quarterly.

 

	4.5	If Customer wishes to vary the Services, it shall submit a detailed statement of requirements to Catapult. Within 30 days of receipt Catapult will provide Customer with a revised estimate as to the additional cost (if any) and time required for performing the changed or additional services and details of any impact on the existing Services. Both parties may then agree to amend the Side Letter in accordance with clause 14.2.

 

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	4.6	The milestones and costs described in the Side Letter, Clause 2 Invoices and Payments Schedule B, are estimates of the time and materials required to meet the milestones and there is an expectation that these milestones are achievable within the time and cost.  Where it becomes apparent that time or cost estimates may be exceeded, Catapult will provide Customer with a revised estimate as to the additional cost (if any) and time required and details of any impact on the existing Services. Both parties may then agree to amend the Side Letter in accordance with clause 14.2. If the Customer does not agree to amend the Side Letter following the Catapult’s notification then the Catapult shall be entitled to terminate this Agreement on 60 days’ written notice to the Customer.

 

	4.7	Where Catapult achieves a milestone at a lower cost than anticipated Catapult will inform Customer of the saving and the value will be applied in the following manner 1) be carried forward to other milestones as a credit to be applied to costs overruns on other milestones, 2) applied to the funding of any additional work identified and agreed in Clause 4.5, 3) where the work is complete, returned to Customer according to a process analogous to that described for termination in Clause 13.

 

	5.	CUSTOMER’S OBLIGATIONS

 

	5.1	Customer shall:

 

		5.1.1	provide Catapult with all such information and assistance as Catapult may reasonably require from time to time to perform the Services;

 

		5.1.2	ensure that any information provided to Catapult is complete and accurate;

 

		5.1.3	if necessary, provide Catapult Personnel with access, as required, to its premises to perform the Services;

 

		5.1.4	inform Catapult of all health and safety rules and regulations and any other reasonable security and requirements that apply at all of Customer’s premises to which Catapult may need access for the purpose of providing the Services; and

 

		5.1.5	co-operate with Catapult in all matters relating to the Services and not interfere in any way with the performance of the Services by Catapult;

 

		5.1.6	comply with the terms of the Schedule 1 “Additional Commitments”; failure to comply with Additional Commitments will be deemed a breach of the Agreement and failure to remedy the breach according to the terms of clause 13.1 will be deemed a material breach and Catapult may terminate the Agreement

 

	6.	INVOICES AND PAYMENT

 

	6.1	Customer shall pay the Charges to Catapult. Whenever any payment is due, Catapult shall submit an invoice to Customer.

 

	6.2	All cash payments due under this Agreement are described in the Side Letter Clause 2 Invoices and Payments Schedule A.  Such cash payments:

 

		6.2.1	are exclusive of value added tax and withholding taxes which where applicable will be paid by Customer in addition and to the extent that the Customer is legally obliged to withhold sums due to the Catapult on account of tax then the Customer shall gross up any payment such that the Catapult receives the full sum invoiced notwithstanding any withholding;

 

		6.2.2	will be made in pounds sterling in cleared funds by BACS (Bank Automated Clearing System) transfer to the bank account detailed on the applicable invoice; and

 

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		6.2.3	shall be made in full within thirty (30) days of the date of the invoice, failing which Catapult may:

 

		6.2.3.1	charge interest on any outstanding amount on a daily basis at a rate equivalent to 4 per cent above the Bank of England base lending rate then in force; and

 

		6.2.3.2	on fifteen (15) days prior written notice to Customer suspend its provision of any or all of the Services until such payment has been made in full.

 

	6.3	All payments made in Customer stock due under this Agreement are described in the Side Letter Clause 2 Invoices and Payments Schedule A and are exclusive of value added tax and withholding taxes which where applicable will be paid by Customer in addition, and shall be made subject to the provisions set forth in this Section 6.3.

 

		6.3.1	All payments made in Customer stock due under this Agreement shall be made by the Customer, in advance of quarterly payments due as listed in the Side Letter.  The amount of stock Customer shall issue to Catapult on each date that stock is issued (the “Issue Date”), shall be determined as: amount of stock payment (in GBP) as listed in the Side Letter plus amount of fees and expenses due to MLV & Co., LLC pursuant to Section 6.3.5, the sum of which shall be divided by the volume weighted 20 day average trading price of Asterias Series A Common Stock on the NYSE MKT, during the 20 trading days immediately prior to the payment date.  Conversion of GBP to USD shall be according to the exchange rate as published by the Wall Street Journal on the date payment is issued.

 

		6.3.2	All payments made in Customer stock due under this Agreement shall be due within thirty (30) days of the date of invoice from Catapult, but in no event shall a stock payment be due sooner than five (5) business days after the start of the fiscal quarter for which the stock payment applies.  Customer may, in its sole option, make stock payments up to four quarters (one year) in advance.

 

		6.3.3	The Parties understand that Catapult intends to sell such Customer stock shortly after each Issue Date.  The Parties agree that Catapult shall engage the services of a registered broker dealer for such sales, and that Catapult shall initially engage MLV & Co., LLC to provide such services.

 

		6.3.4	Catapult acknowledges that issuances and sales of the stock will be made pursuant to Customer's registration statement with the United States Security and Exchange Commission ("SEC") (or exemption therefrom) and agrees to use reasonable efforts to cooperate with Customer in connection with Customer's requirements under SEC rules.  Notwithstanding the above, Catapult acknowledges that Customer has no obligation to maintain an effective registration statement covering the issuance or sale of the stock.

 

		6.3.5	Catapult acknowledges that it is responsible for any fees, taxes and other expenses relating to the sale of such stock, except that Customer shall bear fees and expenses due to MLV & Co., LLC pursuant to services rendered pursuant to Section 6.3.3.

 

		6.3.6	Customer, in its sole discretion, may choose to pay Catapult cash in lieu of one or more stock payment(s).  If Customer chooses to pay cash in lieu of stock, Customer may satisfy such payment by paying an amount of cash equal to 90.91%  the payment amount.

 

		6.3.7	If at any time the Customer is unable or unwilling to issue stock to meet its obligations under the Side Letter, then the Catapult shall have the option to convert the obligation to issue stock to an obligation to pay cash provided that the cash payment obligation shall amount to 90.91% of the alternative sum payable in stock. If despite its diligent efforts in collaboration with a registered broker dealer, the Catapult is unable to sell a quarterly stock payment within 60 days of its due date as described in Section 6.3.2 above and Schedule A to the Side Letter, then Catapult may request that the unsold portion of the stock payment for such quarter be credited towards a future quarterly stock payment, and Customer shall pay in cash any resulting shortfall to make up  the 90.91% cash alternative amount.  For the avoidance of doubt, during all times, Catapult shall use reasonable diligent efforts to sell Customer stock through the registered broker dealer.

 

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	6.4	All payments to be made by Customer to Catapult under this Agreement will be made in full and without any set-off or any deduction or withholding including on account of any counterclaim.

 

	6.5	If there is any change in applicable law that materially increases the cost of delivery of the Services, Catapult shall give Customer written notice of the increased rate and Customer shall have thirty (30) days to accept the revised terms or to tender notice of termination. Any of the Services provided after the thirty (30) day period shall be charged at the increased rate.

 

	7.	CONFIDENTIAL INFORMATION

 

	7.1	Each Party (the “Receiving Party”) undertakes:

 

		7.1.1	to maintain as secret and confidential all Confidential Information obtained directly or indirectly from the other Party (the “Disclosing Party”) in the course of this Agreement and to respect the Disclosing Party’s rights therein;

 

		7.1.2	to treat the Disclosing Party’s Confidential Information as the confidential and exclusive property of the Disclosing Party, except that as determined in Section 8 (Intellectual Property) some Confidential Information developed by Catapult or its Personnel in the course of the provision of the Services shall be Customer’s Confidential Information even though it may be disclosed by Catapult to Customer;

 

		7.1.3	not to use such Confidential Information for any purpose other than (in the case of Catapult) to provide or (in the case of Customer) to make use of the Services;

 

		7.1.4	not to disclose such Confidential Information to any person other than those of its Personnel to whom and to the extent that such disclosure is reasonably necessary for the purposes of this Agreement and who have entered into legally binding confidentiality obligations substantially similar in scope to this clause 7; and

 

		7.1.5	take all reasonable steps necessary to prevent the unauthorized disclosure or use of any of the Disclosing Party’s Confidential Information.

 

	7.2	The provisions of clause 7.1 shall not apply to Confidential Information which the Receiving Party can demonstrate by reasonable, written evidence:

 

		7.2.1	was, prior to its receipt by the Receiving Party from the Disclosing Party, in the possession of the Receiving Party and at its free disposal; or

 

	
 

 

	7.2.2	is subsequently disclosed to the Receiving Party without any obligations of confidence by a third party who has not derived it directly or indirectly from the Disclosing Party; or

 

		7.2.3	is or becomes generally available to the public through no act or default of the Receiving Party or its agents, employees, or Affiliates; or

 

		7.2.4	is independently developed by the Receiving Party by individuals who have not had any direct or indirect access to the Disclosing Party’s Confidential Information; or

 

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		7.2.5	the Receiving Party is required to disclose to the courts of any competent jurisdiction, or to any government regulatory agency, or financial authority, provided that the Receiving Party shall (i) inform the Disclosing Party as soon as is reasonably practicable, and (ii) at the Disclosing Party’s request seek to persuade the court, agency, or authority to have the information treated in a confidential manner, where this is possible under the court, agency, or authority’s procedures.

 

	7.3	The Receiving Party shall ensure that all of its Personnel who have access to any of the Disclosing Party’s information to which clause 7.1 applies shall be made aware of and subject to these obligations and shall have entered into written undertakings of confidentiality at least as restrictive as clause 7.1 which apply to the Disclosing Party’s Confidential Information.

 

	7.4	Either Party may disclose Confidential Information to an Affiliate, provided that the Party making the disclosure shall procure that each Affiliate which has access to any of the Disclosing Party’s information shall be made aware of and subject to these obligations and shall have entered into written undertakings of confidentiality at least as restrictive as clause 7.1 which apply to the Disclosing Party’s Confidential Information. Any breaches of the obligations of confidentiality contained in this agreement by any Affiliate shall be treated as a breach of those obligations by the Party which made the disclosure to the Affiliate.

 

	7.5	Upon any termination of this Agreement, the Receiving Party shall:

 

		7.5.1	destroy (to the extent it is able to do so) or return to the Disclosing Party any documents or other materials that contain the Disclosing Party’s Confidential Information including all copies made, save that the Receiving Party may retain a single copy subject to the same confidentiality provisions for its legal records, and shall not be obliged to purge or delete Confidential Information of the Disclosing Party retained within electronic backups of its IT systems; and

 

		7.5.2	subject to clause 13.6, make no further use or disclosure thereof.

 

	7.6	The obligations of the Parties under this clause 7 shall survive the termination of this agreement for whatever reason for a period of 10 years.

 

	7.7	The obligations set out in Clause 7 shall not apply to the exercise by a Party of its rights in Foreground Intellectual Property.

 

	7.8	Receiving Party acknowledges and agrees that due to the unique nature of Disclosing Party’s Confidential Information, there might be no adequate remedy at law for any breach of its obligations under Section 7.  Therefore, upon any breach of this section by a Receiving Party, Disclosing Party shall be entitled to seek appropriate injunctive or other equitable relief in addition to whatever remedies it might have at law for any unauthorized use or disclosure of Disclosing Party’s Confidential Information in breach of the Receiving Party's obligations under this Agreement.

 

	8.	INTELLECTUAL PROPERTY

 

	8.1	Nothing in this Agreement shall prevent either Party from freely dealing with its Background Intellectual Property.

 

	8.2	Customer hereby grants to Catapult a non-exclusive, non-transferable licence for the duration of this Agreement to use the Customer Background Intellectual Property and the Foreground Intellectual Property only for the purpose and to the extent necessary to enable Catapult to comply with its obligations under this Agreement.

 

	8.3	Customer shall at all times own and have unrestricted free right to use the Deliverables, provided that this right shall not extend to the Catapult’s Background Intellectual Property (unless agreed in writing between the Parties). To the extent that any of the Catapult’s Background Intellectual Property is needed for the use of the Deliverables, Catapult grants to Customer a non-exclusive, fully paid-up, royalty-free, sublicensable, worldwide licence to use such of its Background Intellectual Property as are required to use the Deliverables.

 

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	8.4	Foreground Intellectual Property, with the exception of Foreground Intellectual Property generated in work packages 1, 2 and 6 shown in the Side Letter, shall be owned by Customer, except that any know-how which (a) results from Catapult’s performance of its obligations under this Agreement and (b) is directly derived from Catapult’s know-how shall be owned by Catapult.  As far as it is able to do so, Catapult assigns to Customer by way of future assignment all Foreground Intellectual Property, with the exception of Foreground Intellectual Property generated in work packages 1, 2 and 6 shown in the Side Letter.

 

	8.5	Foreground Intellectual Property developed in work packages 1, 2 and 6 (see the Side Letter), shall be owned by Catapult. As far as it is able to do so, Customer assigns to Catapult by way of future assignment all Foreground Intellectual Property developed by Catapult in work package 1, 2 and 6.

 

	8.6	Catapult grants to Customer a non-exclusive, fully paid-up, royalty-free, sublicensable worldwide licence to use the Foreground Intellectual Property generated in work package 1, 2 and 6 and to the extent that any of the Catapult’s Background Intellectual Property is needed for the use of the Foreground Intellectual Property generated in work package 1, 2 and 6, Catapult grants to Customer a non-exclusive, fully paid-up, royalty-free, sublicensable worldwide licence to use such of its Background Intellectual Property as is required to use the Foreground Intellectual Property generated in work package 1, 2 and 6.

 

	8.7	At Customer’s written request and expense, Catapult shall, and shall use reasonable efforts to ensure that its Personnel shall, execute all documents and do all things requested by Customer to vest and confirm in Customer all right, title and interest in the Foreground Intellectual Property, with the exception of Foreground Intellectual Property generated in work package 1,2 and 6.

 

	8.8	The Parties acknowledge that nothing shall preclude Catapult from doing materially similar work for any third party provided that, in doing so, Catapult may not use or license to such third party any Customer Confidential Information, Intellectual Property or know-how (including Intellectual Property or know-how assigned to Customer pursuant to the Agreement).

 

	8.9	The licences granted to the Customer and the rights assigned to the Customer are conditional on the Customer making payment of all sums due under this Agreement (including pursuant to the Side Letter). If the Customer defaults on any payment and does not remedy such default within 30 days of the Catapult’s  written notice requiring payment then the licences granted shall terminate and the Customer shall assign any rights transferred to it back to the Catapult.

 

	8.10	Clauses 4.6 and 4.7 are not applicable to Initial License Fee Payments as identified in the Side Letter.  For the avoidance of doubt the Initial License Fee payments, as set out in Schedule B of the Side Letter, are non-returnable nor creditable against any other payments.

 

	9.	STATE AID

 

	9.1	The parties acknowledge that Catapult is a Research Organisation and has an obligation to ensure, and is subject to audits to demonstrate, that all activities it undertakes are compliant with EU state aid rules, including its activities under this Agreement. The Parties therefore agree that, notwithstanding any other provision of this Agreement:

 

		9.1.1	Catapult shall be entitled to cooperate fully with any investigation by any grant funder of Catapult or by the European Commission or any court of law with respect to this Agreement regarding the grant/alleged grant of state aid and the provision of Services hereunder and Customer shall, if so requested by Catapult, promptly provide to Catapult all reasonable and necessary assistance in connection with any such investigation(s);

 

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		9.1.2	Catapult shall keep Customer informed of any active and specific investigation into this Agreement and, where possible, liaise with Customer concerning any response to the European Commission; and

 

		9.1.3	the Parties shall comply with any ruling of the European Commission or court of law in relation to the application of the EU state aid rules to this Agreement.

 

	9.2	The obligations set out in clause 9.1 above shall subsist for a period of 10 years from the date of completion of the provision of Services under this Agreement, notwithstanding any earlier termination of this Agreement.

 

	10.	WARRANTIES

 

	10.1	Each Party warrants that:

 

		10.1.1	to the best of its knowledge and belief, its performance of the Services will not breach the Intellectual Property rights of any third party;

 

		10.1.2	it is not party to any agreement which would prevent it from fulfilling its obligations under this Agreement

 

and the Customer further warrants that it is entitled to lawfully issue stock to the Catapult as anticipated by the terms of this Agreement. Any stock issued shall be of the same class that is generally traded.

 

	10.2	The warranties set out at clause 10 are the only warranties given by the Parties and all other warranties where express or implied are hereby excluded to the extent allowed by law.

 

	11.	INDEMNITIES

 

	11.1	Subject to clauses 11.2 and 11.3 and 12, Catapult shall indemnify Customer and its officers, directors, employees, and representatives against all Claims that use of the Deliverables by Customer infringes the Intellectual Property rights of any third party (“IP Claim”).

 

	11.2	Customer shall provide prompt written notice to Catapult of the initiation of any action or proceeding that may reasonably lead to a claim for indemnification. Customer shall co-operate with Catapult in the defence of any IP Claim. Catapult shall not be obligated to indemnify Customer for any settlement or other payment of costs or expenses incurred without Catapult’s prior written consent.

 

	11.3	Catapult will have no liability under or in connection with this Agreement for any IP Claim arising out of any modification to Deliverables made by any person other than Catapult or any failure by Customer to use the Deliverables in accordance with Catapult’s instructions.

 

	12.	LIABILITY AND INSURANCE

 

	12.1	To the extent that any Party has any liability in contract, tort, or otherwise under or in connection with this Agreement, including any liability for breach of warranty, its liability shall be limited in accordance with the following provisions of this clause 12.

 

	12.2	Subject to clauses 12.3 and 12.4, the aggregate liability of Catapult to Customer shall be limited to the total payments made by Customer to Catapult under this Agreement. Each Party acknowledges that this limit is reasonable in the light of the other Party’s insurance.

 

	12.3	In no circumstances shall any Party be liable for any loss, damage, costs, or expenses of any nature whatsoever incurred or suffered by the other Party or its Affiliates that is (i) of an indirect, special, or consequential nature or (ii) any loss of profits, revenue, business opportunity, or goodwill (whether direct or indirect).

 

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	12.4	The provisions of this Agreement set out the maximum liability of the parties under or in connection with this Agreement. All other liability is excluded, provided that nothing in this Agreement excludes any person’s liability to the extent that it may not be so excluded under applicable law, including any such liability for death or personal injury caused by that person’s negligence, or liability for fraud or for any other liability that cannot be excluded by law.

 

	12.5	Each Party shall take out with a reputable insurance company and maintain for the duration of this Agreement adequate insurance cover in respect of its obligations hereunder.

 

	13.	TERMINATION

 

	13.1	Either Party may at any time terminate this Agreement, or suspend the performance of its obligations under this Agreement, by notice in writing to the other Party, if the other Party is in material breach of this Agreement and, in the case of a breach capable of remedy, the breach is not remedied within thirty (30) days of the other Party’s receiving notice specifying the breach and requiring its remedy.

 

	13.2	Either Party may terminate this Agreement at any time by notice in writing to the other Party, such notice to take effect as specified in the notice, if (i) the other Party becomes insolvent or unable to pay its debts as and when they become due, or (ii) an order is made or a resolution is passed for the winding up of the other Party (other than voluntarily for the purpose of solvent amalgamation or reconstruction), or (iii) a liquidator, administrator, administrative receiver, receiver, or trustee is appointed in respect of the whole or any part of the other Party’s assets or business, or (iv) the other Party makes any composition with its creditors, or (v) the other Party ceases to continue its business, or (vi) as a result of debt and/or maladministration the other Party takes or suffers any similar or analogous action in any jurisdiction.

 

	13.3	Without prejudice to any other right or remedy it may have, Catapult may terminate this Agreement without prior notice if Customer fails to pay any amount due under the terms of this Agreement and that amount remains unpaid for thirty (30) days after Catapult has given written notice that the amount has not been paid.

 

	13.4	Customer shall have the right to terminate this Agreement for any reason on sixty (60) days prior written notice.

 

	13.5	A Party’s right of termination under this Agreement, and the exercise of any such right, shall be without prejudice to any other right or remedy (including any right to claim damages) that such Party may have in the event of a breach of contract or other default by the other Party.

 

	13.6	If this Agreement is terminated for any reason, Customer shall pay Catapult for work carried out by Catapult prior to the date that such termination takes effect and shall reimburse Catapult in respect of any unavoidable third party costs and expenses. Provided that Customer pays Catapult for such work and unavoidable third party costs and expenses, Customer shall retain the rights awarded it under Section 8 to all Deliverables and Foreground Intellectual Property developed under this Agreement through termination, and to any of Catapult’s Background Intellectual Property needed for the use by of such Deliverables and Foreground Intellectual Property.  Promptly following the date of termination, Catapult shall reimburse Customer for any amounts that Customer previously paid in advance for work to be performed by Catapult that Catapult has not completed.  Such reimbursements shall be calculated as follows:

 

		13.6.1	With respect to any advance payments in cash made by Customer, reimbursements for such amounts shall be equal to the amount that Customer paid to Catapult for work that Catapult has not completed.

 

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		13.6.2	With respect to any advance payments made by Customer in Customer stock for work that Catapult has not completed, but which, Catapult has sold prior to the date of termination, Catapult shall reimburse Customer the actual cash received by Catapult (i.e. net of any fees or expenses paid to MLV pursuant Section 6.3.5) from the sale of such stock.

 

		13.6.3	With respect to any advance payments made by Customer in Customer stock for work that Catapult has not completed, but which stock Catapult has not sold prior to the date of termination, Catapult shall return unsold stock to the Customer free and clear of liens, encumbrances, obligations, security interests, irregularities, pledges, or other defects in ownership.  In the event Catapult is required to return unsold stock to the Customer under this subsection 13.6.2, each of Catapult and Customer agrees and acknowledges that under US securities laws it will be required to disclose to the other party any material non-public information about the Customer that is in its possession as of the date of transfer of Customer’s stock.  Each party agrees to keep any such information disclosed under this Section 13.6.3 confidential in accordance with Section 7.

 

	13.7	Any amounts that Customer owes to Catapult in connection with unavoidable third party costs and expenses referred to in Section 13.6, shall be offset by the reimbursements due to Customer under Section 13.6.1,13.6.2 and 13.6.3 (if any).  Such offset shall be calculated as follows:

 

		13.7.1	The offset shall be firstly applied against any cash due under clause 13.6.1

 

		13.7.2	After applying the offset set forth in section 13.7.1 above, the balance of the offset, if any, shall then be applied to the amount to be returned to Customer pursuant to section 13.6.2.

 

		13.7.3	After applying the offset set forth in section 13.7.2 above, the balance of the offset, if any, shall then be applied to the amount to be returned to Customer pursuant to section 13.6.3. The offset shall be applied against the value of the unsold shares of stock to be returned to Customer pursuant to Section 13.6.3.  For purposes of this section and Section 13.6.3 only, the value of such unsold stock shall be determined using the volume weighted 20 day average trading price of Asterias Series A Common Stock on the NYSE MKT, during the 20 trading days immediately prior to termination and the last USD to GBP exchange rate as published by the Wall Street Journal immediately prior to the date of termination.

 

	13.8	Following termination of this Agreement or any of statements of works, the following provisions of this Agreement shall remain in full force and effect: clauses 1,  7, 8.1, 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 9, 10, 11, 12, 13.6, 13.7  and 14.  Notwithstanding the foregoing, clauses 8.3-8.8 shall only survive where termination was not as a result of the Catapult exercising its termination rights under clauses 13.1-3.

 

	14.	GENERAL

 

	14.1	Neither Party shall have any liability or be deemed to be in breach of this Agreement for any delays or failures in performance of this Agreement that result from circumstances beyond the reasonable control of that Party, including without limitation labour disputes involving that Party.

 

	14.2	This Agreement may only be amended in writing signed by duly authorized representatives of Customer and Catapult.

 

	14.3	Neither Party shall be entitled to assign, transfer, charge, hold on trust for any person or deal in any manner with any of its rights under this Agreement if it has not obtained the prior written consent of the other Party, such consent not to be unreasonably withheld, delayed or made conditional.

 

13

	14.4	No failure or delay on the part of either Party to exercise any right or remedy under this Agreement shall be construed or operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy.

 

	14.5	If any provision or part of this Agreement is held to be invalid, amendments to this Agreement may be made by the addition or deletion of wording as appropriate to remove the invalid part or provision but otherwise retain the provision and the other provisions of this Agreement to the maximum extent permissible under applicable law.

 

	14.6	Nothing in this Agreement shall create, evidence, or imply any agency, partnership, or joint venture between the parties. Neither Party shall act or describe itself as the agent of the other, nor shall it make or represent that it has authority to make any commitments on the other’s behalf.

 

	14.7	In this Agreement:

 

		14.7.1	the headings are used for convenience only and shall not affect its interpretation;

 

		14.7.2	references to persons shall include incorporated and unincorporated persons; references to the singular include the plural and vice versa; and references to the masculine include the feminine; and

 

		14.7.3	where the word ‘including’ is used it shall be understood as meaning ‘including without limitation’.

 

	14.8	Any notice to be given under this Agreement shall be in writing and shall be sent by first-class mail or air mail, or by fax or email (confirmed by first-class mail or air mail) to the address of the relevant Party set out at the head of this Agreement, or to the relevant fax number or email address set out in the Side Letter, or to such other address, fax number address or email as that Party may from time to time notify to the other Party in accordance with clauses 14.8 and 14.9.

 

	14.9	Notices sent in accordance with clause 14.8 shall be deemed to have been received three (3) working days after the day of posting (in the case of inland first-class mail), or seven (7) working days after the date of posting (in the case of air mail), or on the next working day after transmission (in the case of fax messages, but only if a transmission report is generated by the sender’s fax machine recording a message from the recipient’s fax machine, confirming that the fax was sent to the number indicated above and confirming that all pages were successfully transmitted).

 

	14.10	If there is a dispute between the Parties relating to this Agreement, the Parties shall in the first instance attempt to solve the dispute amicably. If they cannot do so, the dispute shall be referred to the chief executives of each Party who shall meet to try to resolve the matter. If the Parties’ chief executives are unable to agree upon a resolution within twenty (20) days of the referral of the dispute to them, either Party may commence proceedings in accordance with clause

 

	14.11	Nothing in this clause shall prevent or delay a Party from seeking interim relief in any court of competent jurisdiction.

 

	14.12	The validity, construction, and performance of this Agreement shall be governed by English law and shall be subject to the exclusive jurisdiction of the English courts to which the Parties hereby submit, except that a Party may seek an interim injunction in any court of competent jurisdiction.

 

	14.13	Neither Party shall make any press or other public announcement concerning any aspect of this Agreement, or make any use of the name of the other Party in connection with or in consequence of this Agreement, without the prior written consent of the other Party.

 

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	14.14	This Agreement, including the Side Letter, sets out the entire agreement between the Parties relating to its subject matter and supersedes all prior oral or written agreements, arrangements or understandings between them relating to such subject matter. Subject to clause 12.4, the Parties acknowledge that they are not relying on any representation, agreement, term, or condition which is not set out in this Agreement.

 

	14.15	This Agreement does not create any right enforceable by any person who is not a Party to it.

 

15

Agreed by the parties through their authorized signatories:

	
Signed by:

	
Keith Thompson

	
/s/ Keith Thomspn

	 	 	
(Signature)

	 	 	 
	
for and on behalf of

	
CELL THERAPY CATAPULT 

SERVICES LIMITED

	
on 8th day of October 2015

	
Signed by:

	
Matthew Durdy

	
/s/ Matthew Durdy

	 	 	
(Signature)

	 	 	 
	
for and on behalf of

	
CELL THERAPY CATAPULT 

SERVICES LIMITED

	
on 8th day of October 2015

	
Signed by:

	
Pedro Lichtinger

	
/s/ Pedro Lichtinger

	 	
(Print Name)

	
(Signature)

	 	 	 
	
for and on behalf of

	
ASTERIAS 

BIOTHERAPEUTICS 

INCORPORATED

	
on 8th day of October 2015

 

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SCHEDULE 1

Additional Commitments

		·	The Customer will incorporate a UK permanent establishment (PE) within 9 months of the Effective Date of the Agreement; and

		·	The Customer will appoint a UK based project manager who will be an employee of the Asterias UK PE within 9 months of the Effective Date of the Agreement

 

 

17Exhibit 10.1

 

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (“Agreement”) is entered into and effective as of October 15, 2015 (“Effective Date”), by and between Accuray Incorporated, a Delaware corporation (the “Company”), and Kelly Londy (“Executive”).  This Agreement amends and restates in its entirety the Renewal Executive Employment Agreement entered into between the Company and Executive as of January 1, 2015.

 

RECITALS

 

A.     The Company is in the business of developing, manufacturing and selling radiation oncology, including radio surgery and radiation therapy, technologies and devices (the “Business”).

 

B.     The Company wishes to employ Executive to serve as Executive Vice President, Chief Operating Officer, and Executive desires to serve the Company in such capacity pursuant to the terms and conditions in this Agreement.

 

C.     As of the Effective Date, Executive has commenced full-time employment with the Company.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                      Position and Duties.

 

(a)                                 During the term of this Agreement, Executive will be employed by the Company to serve as Executive Vice President, Chief Operating Officer of the Company, reporting to the Company’s Chief Executive Officer.  Executive will be responsible for: (i) performing the duties and responsibilities customarily expected to be performed by such position of a publicly reporting business entity; and (ii) performing such other duties and functions as are reasonably required and/or as may be reasonably prescribed by the Company from time to time.

 

(b)                                 The location of Executive’s employment will be the Company’s headquarters offices, but Executive from time to time may be required to travel to other geographic locations in connection with the performance of his/her duties.

 

2.                                      Standards of Performance.  Executive will at all times faithfully, industriously and to the best of his/her ability, experience and talents perform all of the duties required of and from him/her pursuant to the terms of this Agreement.  Executive will devote his/her full business energies and abilities and all of his/her business time to the performance of his/her duties hereunder and will not, without the Company’s prior written consent, render to others any service of any kind (whether or not for compensation) that, in the Company’s sole but reasonable judgment, would interfere with the full performance of his/her duties hereunder.  Notwithstanding the foregoing, Executive is permitted to spend reasonable amounts of time to manage his/her personal financial and legal affairs and, with the Company’s consent which will not be unreasonably withheld, to serve on one civic, charitable, not-for-profit, industry or corporate board or advisory committee, provided that such activities, individually and collectively, do not materially interfere with the performance of Executive’s duties hereunder.  In no event will Executive engage in any activities that could reasonably create a conflict of interest or the appearance of a conflict of interest. Executive shall be subject to the Company’s policies, procedures and approval practices, as generally in effect from time to time.

 

	
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGMT   STD 11.20.14
    	
ACCURAY CONFIDENTIAL
    

 

 

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3.                                      Term.

 

(a)                                 Term of Agreement.  This Agreement will have an initial term commencing on the Effective Date and ending on December 31, 2017 (the “Initial Term”).  On January 1, 2018, this Agreement will renew automatically for successive three (3) year terms (each, an “Additional Term” and together with the Initial Term, the “Term”), unless either party provides the other party with written notice of non-renewal at least sixty (60) days prior to the date of automatic renewal; provided, however, that if the Company enters into a definitive agreement to be acquired and the transactions contemplated thereby would result in the occurrence of a Change in Control (as defined below) if consummated, then the Company will no longer be permitted to provide Executive with written notice to not renew this Agreement unless such definitive agreement is terminated without the Change in Control being consummated.  If the Change in Control is consummated, the Agreement will continue in effect through the longer of the date that is twelve (12) months following the effective date of the Change in Control or the remainder of the Term then in effect (for purposes of clarification, it will be possible for the Term of the Agreement to automatically extend after the Company enters into the definitive agreement, but before the Change in Control is consummated).  If the definitive agreement is terminated without the transactions contemplated thereby having been consummated and at the time of such termination there is at least twelve (12) months remaining in the Term, the Agreement will continue in effect for the remainder of the Term then in effect, but if there is less than twelve (12) months remaining in the Term then in effect, the Agreement will automatically extend for an additional three (3) years from the date the definitive agreement is terminated.  If Executive becomes entitled to benefits under Section 5 during the term of this Agreement, the Agreement will not terminate until all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

 

(b)                                 At-Will Employment.  The Company and Executive acknowledge that, notwithstanding the foregoing, Executive’s employment is and will continue to be at-will, as defined under applicable law. As an at-will employee, either the Company or the Executive may terminate the employment relationship at any time, with or without cause; provided, however, that in connection with such termination, the Company will provide Executive with any applicable benefits under Section 5 to which Executive is entitled, all in accordance with the terms and conditions thereof.

 

4.                                      Compensation and Benefits.

 

(a)                                 Base Salary.  As an annual base salary (“Base Salary”) for all services rendered pursuant to this Agreement, Executive will be paid an initial Base Salary in the gross amount of Four Hundred Twenty-Five Thousand Dollars ($425,000.00) calculated on an annualized basis, less necessary withholdings and authorized deductions, and payable pursuant to the Company’s regular payroll practices at the time.  The Base Salary is first subject to review and adjustment within the first three (3) months after the end of the fiscal year that includes the Effective Date, and, thereafter, subject to periodic review and adjustment not less frequently than annually within the first three (3) months after the end of the next successive fiscal year, in the sole discretion of the Company. Executive’s Base Salary will not be reduced from the level in effect from time to time, except that the Base Salary may be reduced in connection with a salary reduction program of general application to senior executives of the Company where each experiences a substantially similar reduction on a percentage basis.

 

(b)                                 Performance Bonus.  During Executive’s employment under this Agreement, Executive will be eligible for a performance bonus, subject to the terms and conditions of the Company’s Performance Bonus Plan, which is applicable to senior executives of the Company.  The target amount of Executive’s annual bonus is seventy percent (70%) of Executive’s annual Base Salary (as defined in the

 

	
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGMT   STD 11.20.14
    	
ACCURAY CONFIDENTIAL
    

 

 

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Company’s Performance Bonus Plan as then in effect).  However, payment of the performance bonus will be conditioned on the Company’s achievement of corporate performance objectives approved by the Company and on the Executive’s achievement of individual performance metrics to be established annually and approved by the Company, all as established pursuant to the Company’s Performance Bonus Plan as then in effect, and the bonus may be zero.  For the avoidance of doubt, the performance bonus will be payable only if the corporate performance objectives approved by the Company are achieved as determined by the Company, subject to the Company’s right to exercise discretion in determining the amount of the bonus to be awarded, if any, as set forth in the Company’s Performance Bonus Plan then in effect.  To encourage continued tenure with the Company, Executive must be employed by the Company as of the payment date to be eligible for a performance bonus for the year to which the bonus relates, unless otherwise provided in Section 5.  Performance bonuses will be paid out according to the terms of the Company’s Performance Bonus Plan.

 

(c)                                  Equity Incentive Awards.

 

(i)                                     Stock Options.  The Company may to grant to Executive the option to purchase shares of the Company’s common stock (“Options”) pursuant to the Accuray Incorporated 2007 Incentive Award Plan (the “Incentive Plan”).  All Options shall be subject to the terms and conditions of the Incentive Plan and a stock option grant notice and grant agreement in a form prescribed by the Company, which Executive must sign as a condition to receiving the Options.

 

(ii)                        Restricted Stock Units.  The Company may grant to Executive restricted stock units (“RSUs”) pursuant to the Incentive Plan.  All RSUs are subject to and conditioned on approval of the grant and its terms by the Board. All RSUs shall be subject to the terms and conditions of the Incentive Plan and a RSU grant notice and grant agreement in a form prescribed by the Company, which Executive must sign as a condition to receiving the RSUs.

 

(iii)                     Market Stock Units.  The Company may grant to Executive performance-based market stock units (“MSUs”) pursuant to the Incentive Plan. All MSUs are subject to and conditioned on approval of the grant and its terms by the Board.  All granted MSUs shall vest as provided in the applicable MSU grant notice and grant agreement (“MSU Agreement”).  All MSUs shall be subject to the terms and conditions of the Incentive Plan and a MSU Agreement in a form prescribed by the Company, which Executive must sign as a condition to receiving the MSUs.

 

(iv)                    Performance Stock Units.  The Company may grant to Executive performance stock units (“PSUs”) pursuant to the Incentive Plan. All PSUs are subject to and conditioned on approval of the grant and its terms by the Board.  All granted PSUs shall vest as provided in the applicable PSU grant notice and grant agreement (“PSU Agreement”).  All PSUs shall be subject to the terms and conditions of the Incentive Plan and a PSU Agreement in a form prescribed by the Company, which Executive must sign as a condition to receiving the PSUs.

 

(d)                                 Paid Time Off and Benefits.  Executive will accrue and be allowed to use paid time off for vacation, illness and holidays pursuant to the Company’s policies that apply to executive officers of the Company.  In addition, Executive will be entitled to participate in any plans regarding benefits of employment, including pension, profit sharing, group health, disability insurance and other employee pension and welfare benefit plans now existing or hereafter established to the extent that Executive is eligible under the terms of such plans and if the other executive officers of the Company generally are eligible to participate in such plan.  The Company may, in its sole discretion and from time to time, establish additional senior management benefit plans as it deems appropriate.  Executive understands that any such plans may be modified or eliminated in the Company’s sole discretion in

 

	
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGMT   STD 11.20.14
    	
ACCURAY CONFIDENTIAL
    

 

 

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accordance with applicable law, provided that no such modification or elimination shall result in reducing or eliminating any benefits in which Executive’s right has vested.

 

(e)                                  Reimbursement of Business Expenses.  The Company will promptly reimburse to Executive his/her reasonable, customary and documented out-of-pocket business expenses in connection with the performance of his/her duties under this Agreement, and in accordance with the policies and procedures established by the Company; provided that each reimbursement shall be requested within two (2) months after being incurred.

 

(f)                                   Sarbanes-Oxley Act Loan Prohibition and Company Compensation-Related Polices.  To the extent that any Company benefit, program, practice, arrangement or this Agreement would or might otherwise result in Executive’s receipt of an illegal loan (the “Loan”), the Company shall use commercially reasonable efforts to provide Executive with a substitute for the Loan that is lawful and of at least equal value to Executive.  If this cannot be done, or if doing so would be significantly more expensive to the Company than making the Loan, the Company need not make the Loan to Executive or provide him/her a substitute for it.  Further, Executive acknowledges that any bonus or equity award provided for in this Agreement or otherwise awarded to him/her shall be subject to the Company’s policies regarding recoupment and clawback, as such policies may be amended from time to time, and agrees that he/she will be subject to, and shall comply with, the Company’s stock ownership requirements which are set forth in its Amended and Restated Corporate Governance Guidelines, as such requirements may be amended from time to time, and the Company’s Insider Trading Policy, as amended from time to time.

 

5.                                      Termination of Employment.

 

(a)                                 By Company Without Cause.  The Company may terminate Executive’s employment without Cause (as defined below) effective on thirty (30) days’ written notice, during which notice period Executive may be relieved of his/her duties and placed on paid terminal leave.  In such event and subject to the other provisions of this Agreement, Executive will be entitled to:

 

(i)                                     continued coverage under the Company’s insurance benefit plans through the termination date and such other benefits to which he/she may be entitled pursuant to the Company’s benefit plans, provided, however, that Executive shall not participate in any severance plan of the Company;

 

(ii)                                  payment of all earned but unpaid compensation (including accrued unpaid vacation) through the effective date of termination, payable on or before the termination date; and

 

(iii)                               reimbursement of expenses incurred on or before the termination date in accordance with Section 4(e), above, if a request for reimbursement of the expenses was timely submitted to the Company; plus

 

(iv)                              payment of the equivalent of the Base Salary without regard to any reduction that would otherwise constitute Good Reason he/she would have earned over the next six (6) months (the “Severance Period”) following the termination date (less necessary withholdings and authorized deductions) at his/her then current Base Salary rate (the “Severance Payment”), payable in a lump sum on the first regularly scheduled payroll date following the date the Release becomes effective and irrevocable (the “Release Effective Date”), but in any event within ten (10) business days of the Release Effective Date and subject to Section 16, below;

 

	
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGMT   STD 11.20.14
    	
ACCURAY CONFIDENTIAL
    

 

 

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(v)                                 payment of a prorated portion of Executive’s target bonus for the fiscal year during which termination occurs, calculated by dividing the number of days from the start of the fiscal year through the termination date by 365 and multiplying the target bonus by this percentage (but not by more than 100%), and paid at the same time as the Severance Payment; provided, however, that if the termination date is after the seventh month of the fiscal year, Executive will receive 100% of his/her target bonus for that fiscal year;

 

(vi)                              reimbursement of insurance premiums payable to retain group health coverage as of the termination date for himself/herself and his/her eligible dependents pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) for six (6) months or the maximum period of COBRA coverage, whichever is less; provided that Executive must submit a reimbursement request in accordance with Company policy within thirty (30) days of paying such insurance premiums.  The Company will reimburse the executive within thirty (30) days of receiving a properly submitted request. In addition, if Executive accepts other employment within such six (6) months, the Company’s obligation under this Section 5(a)(vi) will be extinguished as of the date Executive becomes covered under the group health plan of Executive’s new employer; and

 

(vii)                           payment for executive outplacement assistance services with the Company’s then current outplacement services vendor and in accordance with the Company’s then current policies and practices with respect to outplacement assistance for other executives of the Company for up to twelve (12) months after the termination date.

 

The payments and benefits set forth in Sections 5(a)(i)-(iii) shall be referred to as the “Accrued Benefits”, and the payments and benefits set forth in Sections 5(a)(iv)-(vii) shall be referred to as the “Severance Benefits”.  Executive shall not receive the Severance Benefits (or the “Enhanced Severance Benefits” as provided in Section 5(e)) unless Executive executes the separation agreement and general release attached as Exhibit A (the “Release”), and the same becomes irrevocable pursuant to its terms within the 60-day period following his/her termination of employment.

 

(b)                                 By Company With Cause.  The Company may terminate Executive’s employment at any time and without prior notice, written or otherwise, for Cause.  As used in this Agreement, “Cause” shall mean any of the following conduct by Executive:  (i) material breach of this Agreement, or of a Company policy or of a law, rule or regulation applicable to the Company or its operations; (ii) demonstrated and material neglect of duties, or failure or refusal to perform the material duties of his/her position, or the failure to follow the reasonable and lawful instructions of the Company; (iii) gross misconduct or dishonesty, self-dealing, fraud or similar conduct that the Company reasonably determines has caused, is causing or reasonably is likely to cause harm to the Company; or (iv) conviction of or plea of guilty or nolo contendere to any crime other than a traffic offense that is not punishable by a sentence of incarceration.  Termination pursuant to Section 5(b)(ii) shall be effective only if such failure continues after Executive has been given written notice thereof and fifteen (15) business days thereafter in which to present his/her position to the Company or to cure the same, unless the Company reasonably determines that the reason(s) for termination are not capable of being cured.  In the event of termination for Cause, Executive will be entitled only to the Accrued Benefits through the termination date, which will be the date on which the notice is given.  The Company will have no further obligation to pay any compensation of any kind (including without limitation any bonus or portion of a bonus that otherwise may have become due and payable to Executive with respect to the year in which such termination date occurs), or severance payment of any kind nor to make any payment in lieu of notice.

 

	
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGMT   STD 11.20.14
    	
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(c)                                  Incapacity or Death.

 

(i)                                     If Executive becomes unable, due to physical or mental illness or injury, to perform the essential duties of his/her position for more than twelve (12) consecutive weeks in any twelve (12) month period during this Agreement with or without reasonable accommodation (“Incapacity”), the Company has the right to terminate Executive’s employment on fifteen (15) days’ written notice.  In the event of termination for Incapacity, Executive will be entitled to receive the Accrued Benefits, and the unvested stock options and RSUs previously granted to Executive that would have vested within six (6) months after the date of termination for Incapacity shall become immediately vested; and

 

(ii)                                  Executive’s employment pursuant to this Agreement shall be immediately terminated without notice by the Company upon the death of Executive.  If Executive dies while actively employed pursuant to this Agreement, the Company will pay to his/her estate or designated beneficiaries within sixty (60) days the Accrued Benefits, and the unvested stock options and RSUs previously granted to Executive that would have vested within six (6) months after the date of termination upon the death of Executive shall become immediately vested.

 

(d)                                 Resignation for Good Reason.  Executive may terminate this Agreement for Good Reason (as defined below) by giving written notice to the Company of such termination, subject to Executive complying with the notice, cure period and other requirements set forth within the definition of Good Reason below.  As used in this Agreement, “Good Reason” shall mean any one of the following:  (i) a material reduction in Executive’s Base Salary and/or a material breach of this Agreement by the Company resulting from the failure to provide the benefits required in Section 4, (ii) any action or inaction that constitutes a material breach by the Company of this Agreement; (iii) a material diminution in Executive’s authority, duties or responsibilities such that they are materially inconsistent with his/her position as Executive Vice President, Chief Operating Officer of the Company; and (iv) relocation of the Company’s headquarters to a location that materially increases Executive’s commute, provided that no termination for Good Reason shall be effective until Executive has given the Company written notice (pursuant to Section 11 below) within sixty (60) days after Executive becomes aware of the initial occurrence of any of the foregoing specifying the event or condition constituting the Good Reason and the specific reasonable cure requested by Executive, and the Company has failed to cure the occurrence within thirty (30) days of receiving written notice from Executive, and Executive resigns within six (6) months after Executive becomes aware of the initial occurrence.  In the event of a termination for Good Reason, Executive will be entitled to the Accrued Benefits and the Severance Benefits, on the same conditions, form of payment and timing as set forth in Section 5(a).

 

(e)                                  Effect of Change in Control.  If the Company terminates Executive’s employment with the Company without Cause (excluding due to Executive’s death or Incapacity) or if Executive resigns from such employment for Good Reason, and, in each case, such termination occurs during the Change in Control Period (as defined below), Executive will be entitled to the Accrued Benefits, and subject to the same conditions set forth in the final paragraph of Section 5(a), (i) four times the Severance Payment set forth in Section 5(a)(iv), paid in the same form (i.e., a lump sum) and at the same time as the Severance Payments set forth in Section 5(a)(iv), (ii) the reimbursement of two times Executive’s insurance premiums for twelve (12) months in the same form and at the same time and under the same conditions as provided in Section 5(a)(vi), (iii) two hundred percent (200%) of Executive’s target bonus for the fiscal year during which termination occurs, but no less than two hundred percent (200%) of the target bonus in effect for the fiscal year immediately prior to the Change in Control if the Change in Control occurs within the first three (3) months of the fiscal year, payable at the same time as the payment under clause (i) of this Section 5(e), (iv) all outstanding unvested stock options and RSUs previously granted to Executive shall become immediately vested (the “Enhanced Severance Benefits”),

 

	
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and (v) payment for executive outplacement assistance services with the Company’s then current outplacement services vendor and in accordance with the Company’s then current policies and practices with respect to outplacement assistance for other executives of the Company for up to twelve (12) months after the termination date.  For the sake of clarity, if any payments or benefits are payable under this Section 5(e), no payments or benefits shall be made under any other subsection of this Section 5, including Section 5(a) and Section 5(d), and any Enhanced Severance Benefits will be reduced by any Severance Benefits that may have been paid or provided with respect to any termination triggering Severance Benefits that occurs during the three-month period prior to a Change in Control.

 

As used in this Agreement, a “Change in Control” shall mean any of the following events:

 

(i)                                     the acquisition by any Group or Person (as such terms are defined in Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)), other than (A) a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company or (B) an entity in which the Company directly or indirectly beneficially owns fifty percent (50%) or more of the voting securities of such entity (an “Affiliate”), of any securities of the Company, immediately after which such Group or Person has beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of more than fifty percent (50%) of (X) the outstanding shares of Common Stock or (Y) the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors;

 

(ii)                                  the Company (and/or its subsidiaries) is a party to a merger or consolidation with a Person other than an Affiliate, which merger or consolidation results in (a) the holders of voting securities of the Company outstanding immediately before such merger or consolidation failing to continue to represent (either by remaining outstanding or being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the corporation or entity resulting from or surviving such merger or consolidation or (b) individuals who are directors of the Company just prior to such merger or consolidation not constituting more than fifty percent (50%) of the members of the Board of Directors of the surviving entity or corporation immediately after the consummation of such merger or consolidation; or

 

(iii)                               all or substantially all of the assets of the Company and its subsidiaries are, in any transaction or series of transactions, sold or otherwise disposed of (or consummation of any transaction, or series of related transactions, having similar effect), other than to an Affiliate;

 

provided, however, that in no event shall a “Change in Control” be deemed to have occurred for purposes of this Agreement solely because the Company engages in an internal reorganization, which may include a transfer of assets to, or a merger or consolidation with, one or more Affiliates. Additionally, with respect to the payment of any “nonqualified deferred compensation” within the meaning of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), that is not exempt from section 409A of the Code, no event shall constitute a Change in Control unless it also constitutes a change in the ownership of the Company (as defined in Treasury Regulation section 1.409A-3(i)(5)(v)), a change in effective control of the Company (as defined in Treasury Regulation section 1.409A-3(i)(5)(vi)), or a change in the ownership of a substantial portion of the assets of the Company (as defined in Treasury Regulation section 1.409A-3(i)(5)(vii)).

 

As used in this Agreement, a “Change in Control Period” shall mean the period beginning three (3) months prior to, and ending twelve (12) months following, a Change in Control.

 

	
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(f)                                   Voluntary Resignation without Good Reason.  Executive may terminate this Agreement without Good Reason effective on sixty (60) day’s written notice, unless the Company in its sole discretion accepts the resignation earlier.  In the event that Executive resigns without Good Reason as defined above in Section 5(d), Executive will be entitled only to the Accrued Benefits through the termination date.  The Company will have no further obligation to pay any compensation of any kind (including without limitation any bonus or portion of a bonus that otherwise may have become due and payable to Executive with respect to the year in which such termination date occurs unless he/she remains employed with the Company as of the date bonuses are paid to other senior executives of the Company), or severance payments of any kind.

 

6.                                      Proprietary Information Obligations.

 

(a)                                 Proprietary Information and Confidentiality.  Both before and during the term of Executive’s employment, Executive will have access to and become acquainted with Company confidential and proprietary information (together “Proprietary Information”), including but not limited to information or plans concerning the Company’s products and technologies; customer relationships; personnel; sales, marketing and financial operations and methods; trade secrets; formulae and secret developments and inventions; processes; and other compilations of information, records, and specifications.  Executive will not disclose any of the Proprietary Information directly or indirectly, or use it in any way, either during his/her employment pursuant to this Agreement or at any time thereafter, except as reasonably required or specifically requested in the course of his/her employment with the Company or as authorized in writing by the Company.  Notwithstanding the foregoing, Proprietary Information does not include information that is otherwise publicly known or available, provided it has not become public as a result of a breach of this Agreement or any other agreement Executive has to keep information confidential.  It is not a breach of this Agreement for Executive to disclose Proprietary Information pursuant to an order of a court or other governmental or legal body.

 

(b)                                 Inventions Agreement and Assignment.

 

(i)                                     Executive hereby agrees to disclose promptly to the Company (or any persons designated by it) all developments, designs, creations, improvements, original works of authorship, formulas, processes, know-how, techniques and/or inventions (collectively, the “Inventions”) (A) which are made or conceived or reduced to practice by Executive, either alone or jointly with others, in performing his/her duties during the period of Executive’s employment by the Company, that relate to or are useful in the business of the Company; or (B) which result from tasks assigned to Executive by the Company, or from Executive’s use of the premises or other resources owned, leased or contracted by the Company.

 

(ii)                                  Executive agrees that all such Inventions which the Company in its discretion determines to be related to or useful in its business or its research or development, or which result from work performed by Executive for the Company, will be the sole and exclusive property of the Company and its assigns, and the Company and its assigns will have the right to use and/or to apply for patents, copyrights or other statutory or common law protections for such Inventions in any and all countries.  Executive further agrees to assist the Company in every reasonable way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights and other statutory or common law protections for such Inventions in any and all countries.  To that end, Executive will execute all documents for use in applying for and obtaining such patents, copyrights and other statutory or common law protections therefor and enforcing the same, as the Company may desire, together with any assignments thereof to the Company or to persons or entities designated by the Company.  Should the Company be unable to secure Executive’s signature on any document necessary to apply for, prosecute, obtain, or enforce any patent, copyright or other right or protection relating to any Invention, whether due

 

	
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to his/her mental or physical incapacity or any other cause, Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as Executive’s agent and attorney-in-fact, to act for and in his/her behalf and stead, to execute and file any such document, and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights or other rights or protections with the same force and effect as if executed and delivered by Executive.  Executive’s obligations under this Section 6(b)(ii) will continue beyond the termination of Executive’s employment with the Company, but the Company will compensate Executive at a reasonable rate after such termination for time actually spent by Executive at the Company’s request in providing such assistance.

 

(iii)                               Executive hereby acknowledges that all original works of authorship which are made by Executive (solely or jointly with others) within the scope of Executive’s employment which are protectable by copyright are “works for hire,” as that term is defined in the United States Copyright Act (17 USCA, Section 101).

 

(iv)                              Any provision in this Agreement requiring Executive to assign Executive’s rights in any Invention to the Company will not apply to any invention that is exempt under the provisions of California Labor Code section 2870, which provides:

 

“(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:  (1) relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or (2) result from any work performed by the employee for the employer.  (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”

 

(c)                                  Non-Solicitation of Customers and Other Business Partners.  Executive recognizes that by virtue of his/her employment with the Company, he/she will be introduced to and involved in the solicitation and servicing of existing customers and other business partners of the Company and new customers and business partners obtained by the Company during his/her employment.  Executive understands and agrees that all efforts expended in soliciting and servicing such customers and business partners shall be for the benefit of the Company.  Executive further agrees that during his/her employment with the Company he/she will not engage in any conduct which could in any way jeopardize or disturb any of the customer and business partner relationships of the Company.  In addition, to the extent permitted under applicable law, Executive agrees that, for a period beginning on the Effective Date and ending twelve (12) months after termination of Executive’s employment with the Company, regardless of the reason for such termination, Executive shall not use any Proprietary Information to, directly or indirectly, solicit, direct, interfere with, or entice away from the Company any existing customer, licensee, licensor, vendor, contractor or distributor of the Company or for the customer or other business partner to expand its business with a competitor, without the prior written consent of the Company.

 

	
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(d)                                 Non-Solicitation of Employees.  Executive recognizes the substantial expenditure of time and effort which the Company devotes to the recruitment, hiring, orientation, training and retention of its employees.  Accordingly, Executive agrees that, for a period beginning on the Effective Date and ending twelve (12) months after termination of Executive’s employment with the Company, regardless of the reason for such termination, Executive shall not use any Proprietary Information, directly or indirectly, for himself or on behalf of any other person or entity, solicit, offer employment to, hire or otherwise retain the services of any employee of the Company in a position classified as exempt from overtime pay requirements.  For purposes of the foregoing, “employee of the Company” shall include any person who was an employee of the Company at any time within six (6) months prior to the prohibited conduct.

 

(e)                                  Company Property and Materials.

 

(i)                                     All files, records, documents, computer-recorded or electronic information, drawings, specifications, equipment, and similar items relating to Company business, whether prepared by Executive or otherwise coming into his/her possession, will remain the Company’s exclusive property and will not be removed from Company premises under any circumstances whatsoever without the Company’s prior written consent, except when, and only for the period, necessary to carry out Executive’s duties hereunder

 

(ii)                                  In the event of termination of Executive’s employment for any reason, Executive will promptly deliver to the Company all Company equipment (including, without limitation, any cellular phones, beeper/pagers, computer hardware and software, fax machines and other tools of the trade) and all originals and copies of all documents, including without limitation, all books, customer lists, forms, documents supplied by customers, records, product lists, writings, manuals, reports, financial documents and other documents or property in Executive’s possession or control, which relate to the Company’s business in any way whatsoever, and in particular to customers of the Company, or which may be considered to constitute or contain Proprietary Information as defined above, and Executive will neither retain, reproduce, nor distribute copies thereof (other than copies of Executive’s electronic or hardcopy address and telephone contact data base or directories).

 

(f)                                   Remedies for Breach. Executive acknowledges that any breach by Executive of this Section 6 would cause the Company irreparable injury and damage for which monetary damages are inadequate.  Accordingly, in the event of a breach or a threatened breach of this Section 6, the Company will be entitled to seek an injunction restraining such breach.  In addition, in the event of a breach of this Section 6, the Company’s obligation to pay any unpaid portion of the Severance Payment or other benefits as set forth in Sections 5(a) and (d) of this Agreement will be extinguished.  Nothing contained herein will be construed as prohibiting the Company from pursuing any other remedy available to the Company for such breach or such threatened breach.  Executive has carefully read and considered these restrictions and agrees they are fair and reasonable restrictions on Executive and are reasonably required for the protection of the interests of the Company.  Executive agrees not to circumvent the spirit of these restrictions by attempting to accomplish indirectly what Executive is otherwise restricted from doing directly.  Executive agrees that the restrictions in this Section 6 are reasonable and necessary to protect the Company’s Proprietary Information, and they do not prevent Executive from working in the medical device industry.  Executive agrees that the covenants and agreements by Executive contained in this Section 6 shall be in addition to any other agreements and covenants Executive may have agreed to in any other employee proprietary information, confidentiality, non-disclosure or other similar agreement and that this Section 6 shall not be deemed to limit such other covenants and agreements, all of which shall continue to survive the termination of this Agreement in accordance with their respective terms. A breach by Executive of the terms of such other agreements and covenants shall be deemed to be a breach by Executive of this Section 6 and of this Agreement.  To the extent any of the provisions in this Section 6

 

	
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are held to be overly broad or otherwise unenforceable at the time enforcement is sought, Executive agrees that the provision shall be reformed and enforced to the greatest extent permissible by law.  Executive further agrees that if any portion of this Section 6 is held to be unenforceable, the remaining provisions of this Section 6 shall be enforced as written.

 

7.                                      Interpretation, Governing Law and Exclusive Forum.  The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the State of California (excluding any that mandate the use of another jurisdiction’s laws).  Any arbitration (unless otherwise mutually agreed), litigation or similar proceeding with respect to such matters only may be brought within Santa Clara County, California, and all parties to this Agreement consent to California’s jurisdiction.

 

8.                                      Entire Agreement.  All oral or written agreements or representations, express or implied, with respect to the subject matter of this Agreement are set forth in this Agreement.

 

9.                                      Severability.  In the event that one or more of the provisions contained in this Agreement are held to be invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such holding shall not impair the validity, legality or enforceability of the remaining provisions herein.

 

10.                               Successors and Assigns.  This Agreement shall be binding upon, and shall inure to the benefit of, Executive and his/her estate, but Executive may not assign or pledge this Agreement or any rights arising under it, except to the extent permitted under the terms of the benefit plans in which he/she participates.  No rights or obligations of the Company under this Agreement may be assigned or transferred except that the Company shall require any successor (whether direct or indirect, by purchase, merger, reorganization, sale, transfer of stock, consideration or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no succession had taken place.  As used in this Agreement, “Company” means the Company as hereinbefore defined and any successor to its business and/or assets (by merger, purchase or otherwise as provided in this Section 10) which executes and delivers the agreement provided for in this Section 10 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.  In the event that any successor refuses to assume the obligations hereunder, the Company as hereinbefore defined shall remain fully responsible for all obligations hereunder.

 

11.                               Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be given by hand delivery, electronic mail, facsimile, telecopy, overnight courier service, or by United States certified or registered mail, return receipt requested.  Each such notice, request, demand or other communication shall be effective (i) if delivered by hand or by overnight courier service, when delivered at the address specified in this Section 11; (ii) if given by electronic mail, facsimile or telecopy, when such electronic mail, facsimile or telecopy is transmitted to the electronic mail address or facsimile or telecopy number specified in this Section 11 and confirmation is received if during normal business hours on a business day, and otherwise, on the next business day; and (iii) if given by certified or registered mail, three (3) days after the mailing thereof.  Notices shall be addressed to the parties as follows (or at such other address, email address or fax number as either party may from time to time specify in writing by giving notice as provided herein):

 

	
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If to the Company:
    	
Accuray Incorporated
    
	
 
    	
1310 Chesapeake Terrace
    
	
 
    	
Sunnyvale, California   94089
    
	
 
    	
Attn: General Counsel
    
	
 
    	
Fax No. (408)   789-4205
    
	
 
    	
 
    
	
If to Executive:
    	
Kelly Londy
    
	
 
    	
Address: most recent on   file with the Company
    
	
 
    	
Email: most recent on   file with the Company
    

 

12.                               Indemnification.  As soon as reasonably practicable after the due execution of this Agreement by each of the parties hereto, the Company and Executive will enter into the Company’s standard form of indemnification agreement utilized by the Company for its directors and executive officers.

 

13.                               Dispute Resolution.  The parties agree that all disputes, claims or controversies between them and between Executive and any of the Company’s affiliated entities and the successor of all such entities, including any dispute, claim or controversy arising from or otherwise in connection with this Agreement and/or Executive’s employment with the Company, will be resolved as follows:

 

(a)                                 Prior to initiating any other proceeding, the complaining party will provide the other party with a written statement of the claim identifying any supporting witnesses or documents and the requested relief.  The responding party shall within forty-five (45) days furnish a statement of the relief, if any, that it is willing to provide, and identify supporting witnesses or documents.

 

(b)                                 If the matter is not resolved by the exchange of statements of claim and statements of response as provided herein, the parties shall submit the dispute to non-binding mediation, the cost of the mediator to be paid by the Company, before a mediator and/or service to be jointly selected by the parties.  Each party will bear his/her or its own attorney’s fees and witness fees.

 

(c)                                  If the parties cannot agree on a mediator and/or if the matter is not otherwise resolved by mediation, any controversy or claim between Executive and the Company and any of its current or former directors, officers and employees, including any arising out of or relating to this Agreement or breach thereof, shall be settled by final and binding arbitration in the county in which Executive last worked, or elsewhere as mutually agreed by the parties, by a single arbitrator pursuant to the Employment Dispute Rules of Judicial Arbitration and Mediation Services, Inc. (“JAMS”), unless the parties to the dispute agree to another arbitration service or independent arbitrator.  The parties may conduct discovery to the extent permitted in a court of law; the arbitrator will render an award together with a written opinion indicating the bases for such opinion; and the arbitrator will have full authority to award all remedies that would be available in court.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  Each party shall bear its own attorney’s fees and costs, unless the claim is based on a statute that provides otherwise.  The Company will pay the arbitrator’s fees and any administrative charges of the arbitration service, except that if Executive initiates the claim, he/she will pay a portion of the administrative charges equal to the amount he/she would have paid to initiate the claim in a court of general jurisdiction.

 

(d)                                 EXECUTIVE AND THE COMPANY AGREE THAT THIS ARBITRATION PROCEDURE WILL BE THE EXCLUSIVE MEANS OF REDRESS FOR ANY DISPUTES RELATING TO OR ARISING FROM EXECUTIVE’S EMPLOYMENT WITH THE COMPANY OR TERMINATION THEREFROM, INCLUDING DISPUTES OVER UNPAID WAGES, BREACH OF CONTRACT OR TORT, VIOLATION OF PUBLIC POLICY, RIGHTS PROVIDED BY FEDERAL,

 

	
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STATE OR LOCAL STATUTES, REGULATIONS, ORDINANCES, AND COMMON LAW, LAWS THAT PROHIBIT DISCRIMINATION BASED ON ANY PROTECTED CLASSIFICATION, AND ANY OTHER STATUTES OR LAWS RELATING TO AN EXECUTIVE’S RELATIONSHIP WITH THE COMPANY.  THE FOREGOING NOTWITHSTANDING, CLAIMS FOR WORKERS’ COMPENSATION BENEFITS OR UNEMPLOYMENT INSURANCE, OR ANY OTHER CLAIMS WHERE MANDATORY ARBITRATION IS PROHIBITED BY LAW, ARE NOT COVERED BY THIS ARBITRATION PROVISION.  THE PARTIES EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL, AND AGREE THAT THE ARBITRATOR’S AWARD SHALL BE FINAL AND BINDING ON BOTH PARTIES.  THIS ARBITRATION PROVISION IS TO BE CONSTRUED AS BROADLY AS IS PERMISSIBLE UNDER APPLICABLE LAW.

 

14.                               Representations.  Each person executing this Agreement hereby represents and warrants on behalf of himself/herself and of the entity/individual on whose behalf he/she is executing the Agreement that he/she is authorized to represent and bind the entity/individual on whose behalf he/she is executing the Agreement.  Executive specifically represents and warrants to the Company that he/she reasonably believes (a) he/she is not under any contractual or other obligations that would prevent, limit or impair Executive’s performance of his/her obligations under this Agreement and (b) that entering into this Agreement will not result in a breach of any other agreement to which he/she is a party. Executive acknowledges that Executive has been given the opportunity to consult with legal counsel and seek such advice and consultation as Executive deems appropriate or necessary.

 

15.                               Amendments and Waivers.  No provisions of this Agreement may be modified, waived, or discharged except by a written document signed by Executive and a duly authorized Company officer.  Thus, for example, promotions, commendations, and/or bonuses shall not, by themselves, modify, amend, or extend this Agreement.  A waiver of any conditions or provisions of this Agreement in a given instance shall not be deemed a waiver of such conditions or provisions at any other time.

 

16.                               Taxes.

 

(a)                                 Withholdings.  The Company may withhold from any compensation and benefits payable under this Agreement all federal, state, city and other taxes or amounts as shall be determined by the Company to be required to be withheld pursuant to applicable laws, or governmental regulations or rulings.  Executive shall be solely responsible for the satisfaction of any taxes (including employment taxes imposed on employees and penalty taxes on nonqualified deferred compensation).

 

(b)                                 Net Proceeds Maximization.  Notwithstanding any provision of this Agreement to the contrary, if all or any portion of the payments or benefits received or realized by Executive pursuant to this Agreement either alone or together with other payments or benefits that Executive receives or realizes or is then entitled to receive or realize from the Company or any of its affiliates would constitute an “excess parachute payment” within the meaning of section 280G of the Code and/or any corresponding and applicable state law provision, the payments or benefits provided to Executive under this Agreement will be reduced by reducing the amount of payments or benefits payable to Executive to the extent necessary so that no portion of Executive’s payments or benefits will be subject to the excise tax imposed by section 4999 of the Code and any corresponding and/or applicable state law provision.  Notwithstanding the foregoing, a reduction will be made under the previous sentence only if, by reason of that reduction, Executive’s net after tax benefit exceeds the net after tax benefit he/she would realize if the reduction were not made.  For purposes of this paragraph, “net after tax benefit” means the sum of (i) the total amount received or realized by Executive pursuant to this Agreement that would constitute a “parachute payment” within the meaning of section 280G of the Code and any corresponding and applicable state law provision, plus (ii) all other payments or benefits that Executive receives or realizes or is then entitled to receive or realize from the Company and any of its affiliates that would constitute a “parachute payment” within the meaning of Section 280G of the Code and any corresponding

 

	
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and applicable state law provision, less (iii) the amount of federal or state income taxes payable with respect to the payments or benefits described in (i) and (ii) above calculated at the maximum marginal individual income tax rate for each year in which payments or benefits are realized by Executive (based upon the rate in effect for that year as set forth in the Code at the time of the first receipt or realization of the foregoing), less (iv) the amount of excise taxes imposed with respect to the payments or benefits described in (i) and (ii) above by section 4999 of the Code and any corresponding and applicable state law provision.  All determinations and calculations made in this paragraph shall be made by an independent accounting firm (the “Accounting Firm”) selected by the Company prior to the Change in Control and the Company will bear all costs and expenses incurred by the Accounting Firm in connection with its determination.  The Accounting Firm shall be a nationally recognized United States public accounting firm which has not, during the two (2) years preceding the date of its selection, acted in any way on behalf of (x) the Company or any affiliate thereof or (y) Executive.  If any payments or benefits are reduced pursuant to this Section 16(b), they shall be reduced in the following order:  First all payments and benefits that do not constitute “nonqualified deferred compensation” within the meaning of section 409A of the Code or that are exempt from section 409A of the Code (with the payments or benefits being reduced in reverse order of when they otherwise would be made or provided); second, all payments or benefits that constitute “nonqualified deferred compensation” within the meaning of section 409A of the Code that are not exempt from section 409A of the Code that were granted to Executive in the 12-month period of time preceding the applicable Change in Control, in the order such benefits were granted to Executive; and third, all remaining payments and benefits shall be reduced pro-rata.  Notwithstanding the foregoing, if (i) reducing payments or benefits in the order described above would result in the imposition on Executive of an additional tax under section 409A of the Code (or similar state or local law), (ii) Executive so notifies the Company before such reductions and payments are made and benefits provided, and (iii) reducing the payments or benefits in another order would not result in the imposition on Executive of an additional tax under section 409A of the Code (or similar state or local law), payments and benefits shall instead be reduced in such other order.

 

(c)                                  Section 409A Compliance.

 

(i)                                     With respect to any reimbursement of expenses or any provision of in-kind benefits to Executive specified under this Agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (1) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangements providing for the reimbursement of expenses referred to in section 105(b) of the Code; (2) the reimbursement of an eligible expense shall be made no later than the end of the year following the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

 

(ii)                                  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits considered “deferred compensation” (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b)(12)) upon or following a termination of employment unless such termination is also a “separation from service” and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  For purposes of section 409A of the Code, the date as of which Company and Executive reasonably anticipate that no further services would be performed by Executive for Company shall be construed as the date that Executive first incurs a “separation from service” as defined under section 409A of the Code.

 

(iii)                               Notwithstanding anything in this Agreement to the contrary, if a payment obligation arises on account of Executive’s separation from service while Executive is a “specified employee” as described in section 409A of the Code and the Treasury Regulations thereunder and as

 

	
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determined by Company in accordance with its procedures, by which determination Executive is bound, any payment of “deferred compensation” (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b)(12)) shall be made on the first business day of the seventh month following the date of Executive’s separation from service, or, if earlier, within fifteen (15) days after the appointment of the personal representative or executor of Executive’s estate following Executive’s death together with interest on them for the period of delay at a rate equal to the average prime interest rate published in the Wall Street Journal on any day chosen by the Company during that period.  Thereafter, Executive shall receive any remaining payments as if there had not been an earlier delay.

 

(iv)                              Notwithstanding anything to the contrary contained in this Agreement, (i) the Executive shall have no legally-enforceable right to, and the Company shall have no obligation to make, any payment or provide any benefit to Executive if having such a right or obligation would result in the imposition of additional taxes under section 409A of the Code, and (ii) any provision that would cause any payment or benefit to fail to satisfy section 409A will have no force and effect until amended to comply therewith (which amendment may be retroactive to the extent permitted by section 409A and may be accomplished by the Company without the Executive’s consent).  If any payment is not made or any benefit is not provided under the terms of this Section 16(c)(iv), it is the Company’s present intention to make a similar payment or provide a similar benefit to the Executive in a manner that will not result in the imposition of additional taxes under section 409A of the Code, to the extent feasible.  Each payment made under this Agreement is intended to be a separate payment for the purposes of section 409A of the Code.

 

(v)                                 The Company does not guarantee any particular tax effect to Executive under this Agreement.  Company shall not be liable to Executive for any payment made under this Agreement that is determined to result in an additional tax, penalty or interest under section 409A of the Code, nor for reporting in good faith any payment made under this Agreement as an amount includible in gross income under section 409A of the Code.  The parties intend that this Agreement shall be interpreted and administered in accordance with section 409A of the Code to the extent Section 409A of the Code is applicable.

 

17.                               U.S. Citizenship and Immigration Services; Confidentiality and Inventions Agreement.  Executive agrees to timely file all documents required by the Department of Homeland Security to verify his/her identity and lawful employment in the United States.  In addition, as a condition to Executive’s employment with the Company, Executive is required to complete, sign, return, and abide by the Company’s Employee Confidentiality and Inventions Agreement.

 

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

 

19.                               Resignation from Positions.  Upon Executive’s cessation of employment with the Company for any reason, Executive agrees that Executive shall be deemed to have resigned as an officer and as a director (if applicable) from the Company and every subsidiary of the Company on which Executive is then serving as an officer or director, and from any other entity or company on which Executive is then serving as a director or officer at the request of the Company, in each case effective as of the date of Executive’s cessation of employment. In the event of Executive’s cessation of employment, Executive agrees to execute a general resignation resigning from all positions then held by Executive on every subsidiary of the Company and other entity or company on which Executive is then serving as a director or officer at the request of the Company.  Executive hereby grants the corporate secretary of the Company an irrevocable power of attorney to execute on behalf of Executive all such resignations, documents and instruments and to take all such other actions as reasonably necessary to carry out the intention of this Section 19.

 

	
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20.                               Executive’s Commencement of Employment. It is a condition precedent to the effectiveness of this Agreement that Executive commences working full-time for the Company at the Company’s principal executive offices on the Effective Date.  If Executive does not commence such full-time employment on the Effective Date, then this Agreement shall be null and void and the Company shall have no obligations hereunder or otherwise to Executive.

 

21.                               Executive’s Acknowledgement.

 

EXECUTIVE ACKNOWLEDGES THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND HIM/HER RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT (INCLUDING THE AGREEMENTS SET FORTH AS EXHIBITS) AND THAT HE/SHE HAS ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.

 

EXECUTIVE FURTHER ACKNOWLEDGES THAT HE/SHE HAS CAREFULLY READ THIS AGREEMENT (INCLUDING THE AGREEMENTS SET FORTH AS EXHIBITS), THAT HE/SHE UNDERSTANDS ALL OF SUCH AGREEMENTS, AND THAT HE/SHE HAS BEEN GIVEN THE OPPORTUNITY TO DISCUSS SUCH AGREEMENTS WITH HIS/HER PRIVATE LEGAL COUNSEL AND HAS AVAILED HIMSELF/HERSELF OF THAT OPPORTUNITY TO THE EXTENT HE/SHE WISHED TO DO SO.  EXECUTIVE UNDERSTANDS THAT THE DISPUTE RESOLUTION PROVISIONS OF THIS AGREEMENT GIVE UP THE RIGHT TO A JURY TRIAL ON MATTERS COVERED BY THEM.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
 
    	
ACCURAY INCORPORATED,
    
	
 
    	
a Delaware Corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Joshua Levine
    
	
 
    	
Name:
    	
Joshua   Levine
    
	
 
    	
Title:
    	
President &   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alaleh Nouri
    
	
 
    	
Name:
    	
Alaleh   Nouri
    
	
 
    	
Title:
    	
Senior   Vice President, General Counsel
    
	
 
    	
 
    
	
Accepted   and Agreed,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Kelly   Londy:
    	
/s/   Kelly Londy
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed   on:
    	
10/15/15
    	
 
    

 

	
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Exhibit A

 

FORM OF SEPARATION AGREEMENT AND GENERAL RELEASE

 

[See attached]

 

	
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SEPARATION AGREEMENT AND GENERAL RELEASE

 

This Separation Agreement and General Release (this “Agreement”) is hereby entered into by and between Kelly Londy, an individual (“Executive”), and Accuray Incorporated, a Delaware corporation, on behalf of itself and all of its subsidiaries (collectively, the “Company”).

 

Recitals

 

A.                                    Executive has been employed by the Company pursuant to an employment agreement by and between the Company and Executive effective as of October 15, 2015 (the “Employment Agreement”), and currently is serving as [specify position held at time of termination];

 

B.                                    Executive’s employment with the Company and any of its parents, direct or indirect subsidiaries, affiliates, divisions, or related entities (collectively referred to herein as the “Company and its Related Entities”) will be ended on the terms and conditions set forth in this Agreement.

 

Agreement

 

In consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

 

1.                                      Effective Date. Except as otherwise provided herein, this Agreement shall be effective on the eighth day after it has been executed by both of the parties (the “Effective Date”).

 

2.                                      End of Employment and Service as a Director. Executive’s employment with the Company and its Related Entities has ended or will end effective as of             Pacific Time, on                   (the “Termination Date”). If Executive is an officer or a member of the Board of Directors of the Company and/or its Related Entities (the “Board”) Executive hereby voluntarily resigns from any such officer positions and the Board, effective                  .

 

3.                                      Continuation of Benefits After the Termination Date. Except as expressly provided in this Agreement or in the plan documents governing the Company’s employee benefit plans, after the Termination Date, Executive will no longer be eligible for, receive, accrue, or participate in any other benefits or benefit plans provided by the Company and its Related Entities, including, without limitation, medical, dental and life insurance benefits, and the Company’s 401(k) retirement plan; provided, however, that nothing in this Agreement shall waive Executive’s right to any vested benefits, including vested amounts in the Company’s 401(k) retirement plan, which amounts shall be handled as provided in the plan.

 

4.                                      Payments Upon Termination.  Executive will be entitled to receive payment of the following:  (i) all earned but unpaid compensation (including accrued unpaid vacation) through the effective date of termination, payable on or before the termination date; and (ii) reimbursement, made in accordance with Section 4(e) of the Employment Agreement, of any monies advanced or incurred by Executive in connection with his/her employment for reasonable and necessary Company-related expenses incurred on or before the Termination Date.  The provisions of this Agreement shall not waive or terminate any rights to compensation or vested benefits under the Company’s benefits plans or as required by law, or to indemnification Executive may have under the Company’s Certificate of Incorporation, Bylaws or separate indemnification agreement, as applicable.

 

	
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5.                                      Severance Benefits or Enhanced Severance Benefits.  In return for Executive’s promises in this Agreement, the Company will provide Executive with the Severance Benefits or Enhanced Severance Benefits as defined in Sections 5(a) and 5(e) of the Employment Agreement and as applicable based on the nature of the termination, subject to the terms and conditions set forth in the Employment Agreement, including, but not limited to, Section 16 thereof.  The Severance Benefits or Enhanced Severance Benefits will be paid as specified in Section 5(a) or Section 5(e) of the Employment Agreement, as applicable and shall be subject to required withholdings and authorized deductions and to Section 21 below.  For purposes of this Agreement, the term “Severance Period” means twelve (12) months, regardless of whether Executive receives the Severance Benefits or the Enhanced Severance Benefits.

 

6.                                      Effect of Revocation or Subsequent Employment.

 

(a)                                 If Executive properly revokes this Agreement in accordance with Section 13 below, Executive shall not be entitled to receive the payments and benefits under Section 5, above, except that Executive’s rights under COBRA will continue (but not, for purposes of clarity, the right to be reimbursed for COBRA premiums).

 

(b)                                 The Company’s obligation to reimburse premiums for insurance coverage under COBRA or otherwise will be extinguished as of the date Executive’s coverage begins under the group health plan of any new employer.  If Executive violates the restrictions in Section 17, below, the Company’s obligation to pay premiums for insurance under COBRA or otherwise will be immediately extinguished, and the other remedies specified in Section 17, below, shall apply.

 

7.                                      Acknowledgement of Total Compensation and Indebtedness. Executive acknowledges and agrees that the cash payments under Sections 4 and 5 of this Agreement extinguish any and all obligations for monies, or other compensation or benefits that Executive claims or could claim to have earned or claims or could claim is owed to him/her as a result of his/her employment by the Company and its Related Entities through the Termination Date, under the Employment Agreement or otherwise.  Notwithstanding the foregoing, the parties acknowledge and agree that the provisions of this Section 7 shall not terminate any rights Executive has under Section 3 of this Agreement or to other payments Executive may have, and to any indemnification Executive may have under the Company’s Bylaws or separate indemnification agreement, as applicable.

 

8.                                      Status of Related Agreements and Future Employment.

 

(a)                                 Agreements Between Executive and the Company. [Agreements to be scheduled at time].

 

(b)                                 Employment Agreement. The parties agree that the Employment Agreement shall be terminated as of the Termination Date. Notwithstanding the termination of the Employment Agreement, the parties hereto acknowledge that certain rights and obligations set forth in the Employment Agreement extend beyond the Termination Date.  In the event that any provision of this Agreement conflicts with Section 6 of the Employment Agreement, the terms and provisions of the section(s) providing the greatest protection to the Company and its Related Entities shall control.

 

9.                                      Release by Executive.

 

(a)                                 Except for any obligations or covenants of the Company pursuant to this Agreement and as otherwise expressly provided in this Agreement, Executive, for himself/herself and his/her heirs, executors, administrators, assigns, successors and agents (collectively, the “Executive’s

 

	
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Affiliates”) hereby fully and without limitation releases and forever discharges the Company and its Related Entities, and each of their respective agents, representatives, stockholders, owners, officers, directors, employees, consultants, attorneys, auditors, accountants, investigators, affiliates, successors and assigns (collectively, the “Company Releasees”), both individually and collectively, from any and all waivable rights, claims, demands, liabilities, actions, causes of action, damages, losses, costs, expenses and compensation, of whatever nature whatsoever, known or unknown, fixed or contingent, which Executive or any of Executive’s Affiliates has or may have or may claim to have against the Company Releasees by reason of any matter, cause, or thing whatsoever, from the beginning of time to the Effective Date (“Claims”), arising out of, based upon, or relating to his/her employment or the termination of his/her employment with the Company and its Related Entities and/or his/her service as an officer of any of the Company Releasees, any agreement or compensation arrangement between Executive and any of the Company Releasees, to the maximum extent permitted by law.

 

(b)                                 Executive specifically and expressly releases any Claims arising out of or based on: the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the National Labor Relations Act and the Equal Pay Act, as the same may be amended from time to time; the California common law on fraud, misrepresentation, negligence, defamation, infliction of emotional distress or other tort, breach of contract or covenant, violation of public policy or wrongful termination; state or federal wage and hour laws, and other provisions of the California Labor Code, to the extent these may be released herein as a matter of law; or any other state or federal law, rule, or regulation dealing with the employment relationship, except those claims which may not be released herein as a matter of law.

 

(c)                                  Nothing contained in this Section 9 or any other provision of this Agreement shall release or waive any right that Executive has to indemnification and/or reimbursement of expenses by the Company and its Related Entities with respect to which Executive may be eligible as provided in California Labor Code section 2802, the Company’s and its Related Entities’ Certificates of Incorporation, Bylaws and any applicable directors and officers, errors & omissions, umbrella or general liability insurance policies, any indemnification agreements, including the Employment Agreement; or any other applicable source, nor prevent Executive from cooperating in an investigation of the Company by the Equal Employment Opportunity Commission (“EEOC”).

 

10.                               Waiver of Civil Code Section 1542.

 

(a)                                 Executive understands and agrees that the release provided herein extends to all Claims released above whether known or unknown, suspected or unsuspected, which may be released as a matter of law. Executive expressly waives and relinquishes any and all rights he/she may have under California Civil Code section 1542, which provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

(b)                                 Executive expressly waives and releases any rights and benefits which he/she has or may have under any similar law or rule of any other jurisdiction. It is the intention of each party through this Agreement to fully, finally and forever settle and release the Claims as set forth above. In furtherance of such intention, the release herein given shall be and remain in effect as a full and complete release of such matters notwithstanding the discovery of any additional Claims or facts relating thereto.

 

	
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11.                               [If Executive is age 40 or over on Termination Date]  Release of Federal Age Discrimination Claims by Executive. Executive hereby knowingly and voluntarily waives and releases all rights and claims, known or unknown, arising under the Age Discrimination In Employment Act of 1967, as amended, which he/she might otherwise have had against the Company or any of the Company Releasees regarding any actions which occurred prior to the date that Executive signed this Agreement, except that Executive is not prevented from cooperating in an investigation by the EEOC or from filing an EEOC charge other than for personal relief.

 

12.                               Release by Company and its Related Entities.  The Company and its Related Entities hereby release and forever discharge Executive, from any and all waivable actions, causes of action, covenants, contracts, claims and demands of whatever character, nature and kind, whether known or unknown, which the Company and its Related Entities ever had, now have, or any of them hereafter can, shall or may have by reason of Executive’s employment and/or his/her service as a director and/or officer of the Company and/or its Related Entities; provided, however, that this general release shall not apply, or be deemed or construed to apply, to (a) any of Executive’s continuing obligations pursuant to this Agreement or the Employment Agreement, (b) criminal conduct or acts or omissions constituting willful misconduct or gross negligence by Executive during his/her employment with the Company, or (c) recoupment of all or a portion of any previously awarded bonus or equity award pursuant to the Company’s Recoupment (Clawback) Policy that was in effect when the bonus was paid or the equity award vested or was exercised by Executive, whichever was later.

 

13.                               [If Executive is age 40 or over on Termination Date]  Review and Revocation Rights. Executive hereby is advised of the following:

 

(a)                                 Executive has the right to consult with an attorney before signing this Agreement and is encouraged by the Company to do so;

 

(b)                                 Executive has twenty-one (21) days from his/her receipt of this Agreement to consider it; and

 

(c)                                  Executive has seven (7) days after signing this Agreement to revoke this Agreement, and this Agreement will not be effective until that revocation period has expired without revocation. Executive agrees that in order to exercise his/her right to revoke this Agreement within such seven (7) day period, he/she must do so in a signed writing delivered to the Company’s Board before the close of business on the seventh calendar day after he/she signs this Agreement.

 

14.                               Confidentiality of Agreement. After the execution of this Agreement by Executive, neither Executive, his/her attorney, nor any person acting by, through, under or in concert with them, shall disclose any of the terms of or amount paid under this Agreement (other than to state that the Company has filed this Agreement and/or agreements related thereto as public documents) or the negotiation thereof to any individual or entity; provided, however, that the foregoing shall not prevent such disclosures by Executive to his/her attorney, tax advisors and/or immediate family members, or as may be required by law.

 

15.                               No Filings. Executive represents that he/she has not filed any lawsuits, claims, charges or complaints, which are pending as of the date hereof, against the Company Releasees with any local, state or federal agency or court from the beginning of time to the date of execution of this Agreement, and that Executive is not aware of any facts that would support any Claims or any compliance-related or code of ethics violations of any kind whatsoever against the Company Releasees, including without limitation any claims for any work-related injuries.  If Executive hereafter commences, joins in, or in any manner seeks relief through any suit arising out of, based upon, or relating to any of the Claims released in this

 

	
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Agreement, or in any manner asserts against the Company Releasees any of the Claims released in this Agreement, then Executive agrees to pay to the Company Releasees against whom such Claim(s) is asserted, in addition to any other damages caused thereby, all attorneys’ fees incurred by the Company Releasees in defending or otherwise responding to the suit or Claim; provided, however, that this provision shall not obligate Executive to pay the Company Releasees’ attorneys’ fees in any action challenging the release of claims under the Older Workers Benefit Protection Act or the ADEA, unless otherwise allowed by law. If any governmental agency or court ever assumes jurisdiction over any such lawsuit, claim, charge or complaint and/or purports to bring any legal proceeding, in whole or in part, on behalf of Executive based upon events occurring prior to the execution of this Agreement, Executive will request such agency or court to withdraw from and/or to dismiss the lawsuit, claim, charge or complaint with prejudice.

 

16.                               Confidential and Proprietary Information. Executive acknowledges that certain information, observations and data obtained by him/her during the course of or related to his/her employment with the Company and its Related Entities (including, without limitation, projection programs, business plans, business matrix programs (i.e., measurement of business), strategic financial projections, certain financial information, shareholder information, technology and product design information, marketing plans or proposals, personnel information, customer lists and other customer information) are the sole property of the Company and its Related Entities and constitute Proprietary Information as defined in Section 6 of the Employment Agreement.  Executive represents and warrants that he/she has returned all files, customer lists, financial information and other property of the Company and its Related Entities that were in Executive’s possession or control without retaining copies thereof.  Executive further represents and warrants that he/she does not have in his/her possession or control any files, customer lists, financial information or other property of the Company and its Related Entities. In addition to his/her promises in Section 6 of the Employment Agreement, Executive agrees that he/she will not disclose to any person or use any such information, observations or data without the written consent of the Board.  If Executive is served with a deposition subpoena or other legal process calling for the disclosure of such information, or if he/she is contacted by any third person requesting such information, he/she will notify the Board as soon as is reasonably practicable after receiving notice and will reasonably cooperate with the Company and its Related Entities in minimizing the disclosure thereof; provided, that nothing in this Agreement will affect Executive’s obligations to testify truthfully in response to any subpoena or other legally required discovery proceeding.

 

17.                               Prohibited Activities.

 

(a)                                 Non-Solicitation of Customers and Other Business Partners.  Executive recognizes that by virtue of his/her employment with the Company, he/she will be introduced to and involved in the solicitation and servicing of existing customers and other business partners of the Company and new customers and business partners obtained by the Company during his/her employment.  Executive understands and agrees that all efforts expended in soliciting and servicing such customers and business partners shall be for the benefit of the Company.  Executive further agrees that during his/her employment with the Company he/she will not engage in any conduct which could in any way jeopardize or disturb any of the customer and business partner relationships of the Company.  In addition, to the extent permitted under applicable law, Executive agrees that, for a period beginning on the Effective Date and ending twelve (12) months after termination of Executive’s employment with the Company, regardless of the reason for such termination, Executive shall not use any Proprietary Information to, directly or indirectly, solicit, direct, interfere with, or entice away from the Company any existing customer, licensee, licensor, vendor, contractor or distributor of the Company or for the customer or other business partner to expand its business with a competitor, without the prior written consent of the Board.

 

	
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(b)                                 Non-Solicitation of Employees.  Executive recognizes the substantial expenditure of time and effort which the Company devotes to the recruitment, hiring, orientation, training and retention of its employees.  Accordingly, Executive agrees that, for a period beginning on the Effective Date and ending twelve (12) months after termination of Executive’s employment with the Company, regardless of the reason for such termination, Executive shall not use any Proprietary Information, directly or indirectly, for himself/herself or on behalf of any other person or entity, to solicit, offer employment to, hire or otherwise retain the services of any employee of the Company in a position classified as exempt from overtime pay requirements.  For purposes of the foregoing, “employee of the Company” shall include any person who was an employee of the Company at any time within six (6) months prior to the prohibited conduct.

 

(c)                                  Scope of Restrictions. Executive agrees that the restrictions in Sections 17 (a) and (b), above, are reasonable and necessary to protect the Company’s trade secrets and that they do not foreclose Executive from working in the medical device industry generally.  To the extent that any of the provisions in this Section 17 are held to be overly broad or otherwise unenforceable at the time enforcement is sought, Executive agrees that the provision shall be reformed and enforced to the greatest extent permissible by law.  Executive further agrees that if any portion of this Section 17 is held to be unenforceable, that the remaining provisions of it shall be enforced as written.

 

18.                               Remedies. Executive acknowledges that any misuse of Proprietary Information belonging to the Company and its Related Entities, or any violation of Section 6 of the Employment Agreement, and any violation of Sections 14, 16 and 17 of this Agreement, will result in irreparable harm to the Company and its Related Entities, and therefore, the Company and its Related Entities shall, in addition to any other remedies, be entitled to immediate injunctive relief. To the extent there is any conflict between Section 6 of the Employment Agreement and this Section 18, the provision providing the greatest protection to the Company and its Related Entities shall control. In addition, in the event of a breach of any provision of this Agreement by Executive, including Sections 14, 16 and 17, Executive shall forfeit, and the Company and its Related Entities may withhold payment of any unpaid portion of, the Severance Benefits or Enhanced Severance Benefits provided under Section 5, above.

 

19.                               Cooperation Clause.

 

(a)                                 To facilitate the orderly conduct of the Company and its Related Entities’ businesses, for the Severance Period, Executive agrees to cooperate, at no charge, with the Company and its Related Entities’ reasonable requests for information or assistance related to the time of his/her employment.

 

(b)                                 For the Severance Period, Executive agrees to cooperate, at no charge, with the Company’s and its Related Entities’ and its or their counsel’s reasonable requests for information or assistance related to (i) any investigations (including internal investigations) and audits of the Company’s and its Related Entities’ management’s current and past conduct and business and accounting practices and (ii) the Company’s and its Related Entities’ defense of, or other participation in, any administrative, judicial, or other proceeding arising from any charge, complaint or other action which has been or may be filed relating to the period during which Executive was employed by the Company and its Related Entities.   The Company will promptly reimburse Executive for his/her reasonable, customary and documented out-of-pocket business expenses in connection with the performance of his/her duties under this Section 19.  Except as required by law or authorized in advance by the Board of Directors of the Company, Executive will not communicate, directly or indirectly, with any third party other than Executive’s legal counsel, including any person or representative of any group of people or entity who is suing or has indicated that a legal action against the Company and its Related Entities or any of their directors or officers is being contemplated, concerning the management or governance of the Company

 

	
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and its Related Entities, the operations of the Company and its Related Entities, the legal positions taken by the Company and its Related Entities, or the financial status of the Company and its Related Entities. If asked about any such individuals or matters, Executive shall say: “I have no comment,” and shall direct the inquirer to the Company. Executive acknowledges that any violation of this Section 19 will result in irreparable harm to the Company and its Related Entities and will give rise to an immediate action by the Company and its Related Entities for injunctive relief.

 

20.                               No Future Employment. Executive understands that his/her employment with the Company and its Related Entities will irrevocably end as of the Termination Date and will not be resumed at any time in the future. Executive agrees that he/she will not apply for, seek or accept employment by the Company and its Related Entities at any time, unless invited to do so by the Company and its Related Entities.

 

21.                               Tax Issues.  The parties agree that the payments and benefits provided under this Agreement, and all other contracts, arrangements or programs that apply to him/her, shall be subject to Section 16 of the Employment Agreement.

 

22.                               Non-disparagement.  Executive agrees not to criticize, denigrate, or otherwise disparage the Company and its Related Entities, or any of their directors, officers, products, processes, experiments, policies, practices, standards of business conduct, or areas or techniques of research.  The Company agrees not to authorize or condone denigrating or disparaging statements about Executive to any third party, including by press release or other formally released announcement.  Factually accurate statements in legal or public filings shall not violate this provision.  In addition, nothing in this Section 22 shall prohibit Executive or the Company or the Board, or any of their employees or members from complying with any lawful subpoena or court order or taking any other actions affirmatively authorized by law.

 

23.                               Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to principles of conflict of laws.

 

24.                               Dispute Resolution. The parties hereby agree that all disputes, claims or controversies arising from or otherwise in connection with this Agreement (except for injunctive relief sought by either party) between them and between Executive and any of the Company’s affiliated entities and the successor of all such entities, and any director, stockholder or employee of the Company will be resolved in accordance with Section 13 of the Employment Agreement, except for its attorneys’ fee provision.

 

25.                               Attorneys’ Fees. Except as otherwise provided herein, in any action, litigation or proceeding between the parties arising out of or in relation to this Agreement, including any purported breach of this Agreement, the prevailing party shall be entitled to an award of its costs and expenses, including reasonable attorneys’ fees.

 

26.                               Non-Admission of Liability. The parties understand and agree that neither the payment of any sum of money nor the execution of this Agreement by the parties will constitute or be construed as an admission of any wrongdoing or liability whatsoever by any party.

 

27.                               Severability. If any one or more of the provisions contained herein (or parts thereof), or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity and enforceability of any such provision in every other respect and of the remaining provisions hereof will not be in any way impaired or affected, it being intended that all of the rights and privileges shall be enforceable to the fullest extent permitted by law.

 

	
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28.                               Entire Agreement. This Agreement represents the sole and entire agreement among the parties and, except as expressly stated herein, supersedes all prior agreements, negotiations and discussions among the parties with respect to the subject matters contained herein.

 

29.                               Waiver. No waiver by any party hereto at any time of any breach of, or compliance with, any condition or provision of this Agreement to be performed by any other party hereto may be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time.

 

30.                               Amendment. This Agreement may be modified or amended only if such modification or amendment is agreed to in writing and signed by duly authorized representatives of the parties hereto, which writing expressly states the intent of the parties to modify this Agreement.

 

31.                               Counterparts. This Agreement may be executed in counterparts, each of which will be deemed to be an original as against any party that has signed it, but both of which together will constitute one and the same instrument.

 

32.                               Assignment. This Agreement inures to the benefit of and is binding upon the Company and its successors and assigns, but Executive’s rights under this Agreement are not assignable, except to his/her estate.

 

33.                               Notice. All notices, requests, demands, claims and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) if personally delivered or delivered by overnight courier; (b) if sent by electronic mail, telecopy or facsimile (except for legal process); or (c) if mailed by overnight or by first class, United States certified or registered mail, postage prepaid, return receipt requested, and properly addressed as follows:

 

If to the Company:              Accuray Incorporated

1310 Chesapeake Terrace

Sunnyvale, California 94089

Attn: Board of Directors

c/o Corporate Secretary

Fax No. (408) 789-4205

 

If to Executive:                                                                                   Address: most recent on file with the Company

Email: most recent on file with the Company

 

Such addresses may be changed, from time to time, by means of a notice given in the manner provided above. Notice will conclusively be deemed to have been given when personally delivered (including, but not limited to, by messenger or courier); or if given by mail, on the third business day after being sent by first class, United States certified or registered mail; or if given by Federal Express or other similar overnight service, on the date of delivery; or if given by electronic mail, telecopy or facsimile machine during normal business hours on a business day, when confirmation of transmission is indicated by the sender’s machine; or if given by electronic mail, telecopy or facsimile machine at any time other than during normal business hours on a business day, the first business day following when confirmation of transmission is indicated by the sender’s machine. Unless otherwise agreed, notices, requests, demands and other communications delivered to legal counsel of any party hereto, whether or not such counsel shall consist of in-house or outside counsel, shall not constitute duly given notice to any party hereto.

 

	
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34.                               Miscellaneous Provisions.

 

(a)                                 The parties represent that they have read this Agreement and fully understand all of its terms; that they have conferred with their attorneys, or have knowingly and voluntarily chosen not to confer with their attorneys about this Agreement; that they have executed this Agreement without coercion or duress of any kind; and that they understand any rights that they have or may have, and they are signing this Agreement with full knowledge of any such rights.

 

(b)                                 Both parties have participated in the drafting of this Agreement with the assistance of counsel to the extent they desired. The language in all parts of this Agreement must be in all cases construed simply according to its fair meaning and not strictly for or against any party. Whenever the context requires, all words used in the singular must be construed to have been used in the plural, and vice versa, and each gender must include any other gender. The captions of the Sections of this Agreement are for convenience only and must not affect the construction or interpretation of any of the provision herein.

 

(c)                                  Each provision of this Agreement to be performed by a party hereto is both a covenant and condition, and is a material consideration for the other party’s performance hereunder, and any breach thereof by the party will be a material default hereunder. All rights, remedies, undertakings, obligations, options, covenants, conditions and agreements contained in this Agreement are cumulative and no one of them is exclusive of any other. Time is of the essence in the performance of this Agreement.

 

(d)                                 Each party acknowledges that no representation, statement or promise made by any other party, or by the agent or attorney of any other party, except for those in this Agreement, has been relied on by him/her or it in entering into this Agreement.

 

(e)                                  Unless expressly set forth otherwise, all references herein to a “day” are deemed to be a reference to a calendar day. All references to “business day” mean any day of the year other than a Saturday, Sunday or a public or bank holiday in Orange County, California. Unless expressly stated otherwise, cross-references herein refer to provisions within this Agreement and are not references to any other document.

 

(f)                                   Each party to this Agreement will cooperate fully in the execution of any and all other documents and in the completion of any additional actions that may be necessary or appropriate to give full force and effect to the terms and intent of this Agreement.

 

EACH OF THE PARTIES ACKNOWLEDGES THAT HE/SHE/IT HAS READ THIS AGREEMENT, UNDERSTANDS IT AND IS VOLUNTARILY ENTERING INTO IT, AND THAT IT INCLUDES A WAIVER OF THE RIGHT TO A TRIAL BY JURY, AND, WITH RESPECT TO EXECUTIVE, HE/SHE UNDERSTANDS THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

 

(Signature page follows)

 

	
AMENDED   AND RESTATED EXECUTIVE EMPLOYMENT AGMT STD 11.20.14
    	
ACCURAY CONFIDENTIAL
    

 

 

Page 27 of 27

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the dates written below.

 

	
EXECUTIVE:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    
	
COMPANY:
    	
Accuray Incorporated
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
 
    

 

	
AMENDED   AND RESTATED EXECUTIVE EMPLOYMENT AGMT STD 11.20.14
    	
ACCURAY CONFIDENTIAL

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