Document:

Exhibit 10.1

 

NINTH AMENDMENT TO LEASE

 

This Ninth Amendment to Lease (“Amendment”) is dated as of January 19, 2011 (“Effective Date”), between 111 BARCLAY ASSOCIATES (“Landlord”), the sole beneficiary under CHICAGO TITLE LAND TRUST COMPANY, as successor trustee to LASALLE BANK NATIONAL ASSOCIATION, as successor trustee (“Trustee”) to AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, as Trustee under Trust Agreement (“Trust”) dated January 1, 1991 and known as Trust No. 113370-03 and BIOSANTE PHARMACEUTICALS, INC. (“Tenant”).

 

RECITALS

 

WHEREAS, Landlord and Tenant entered into that certain Office Lease dated December 19, 2003 (“Original Lease”), as amended by a First Amendment to Lease dated February 26, 2004, as modified by Letter Amendment dated March 19, 2004, as amended by Second Amendment to Lease dated January 4, 2005, as amended by Third Amendment to Lease dated January 27, 2006, as amended by Fourth Amendment to Lease dated March 7, 2007, as amended by Fifth Amendment to Lease dated November 2, 2007, as amended by Sixth Amendment to Lease dated April 18, 2008, as amended by Seventh Amendment to Lease dated November 17, 2008, and as amended by the Eight Amendment to Lease dated September 8, 2009 (the Original Lease, as amended by the foregoing letter agreement and amendments, the “Existing Lease”, and the Existing Lease as amended by this Amendment, the “Lease”) pursuant to which Tenant leases a portion of the 2nd floor known as Suite 280 and Suite 220 (“Existing Premises”) of the building known as 111 Barclay Boulevard, Lincolnshire, Illinois (“Building”).

 

Landlord and Tenant desire to amend the Existing Lease to extend the term through February 28, 2014, relocate the premises to Suite 400 on the 4th floor of the Building, and to otherwise amend the Existing Lease as set forth herein.

 

NOW THEREFORE, in consideration of the above recitals, which by this reference are incorporated herein, the mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.             Definitions.  All capitalized terms used herein which are not defined in this Amendment shall have the meanings ascribed to such terms in the Existing Lease.

 

2.             Recitals.  The Recitals are incorporated as if fully set forth herein and are true and correct in all material respects.

 

3.             Representations and Warranties.  Tenant represents and warrants that (a) to Tenant’s actual knowledge, the Existing Lease is in full force and effect, (b) the Existing Lease has not been assigned or encumbered by Tenant, (c) Tenant has no actual knowledge of a defense or counterclaim to the enforcement of the Existing Lease, (d) Tenant has no actual knowledge that it is not entitled to any offset, abatement or reduction of rent under the Lease, (e)  Landlord has completed all work to be performed by Landlord and paid all contributions and other sums due to Tenant under the Existing Lease and (f) to Tenant’s actual knowledge, neither Landlord nor Tenant is in default under any of its obligations under the Existing Lease.

 

4.             Term.  The Term of the Existing Lease is hereby extended for a period of twenty two (22) months expiring on February 28, 2014 (“Expiration Date”), on the same terms and conditions set forth in the Existing Lease, except as the same are expressly modified by this Amendment, unless sooner

 

 

terminated pursuant to the terms and conditions of the Lease.  Tenant shall have no further right under the Lease to extend the Term.

 

5.             Relocation of Premises.

 

a)             On the date that Landlord has substantially completed the Landlord Work (as defined herein) and delivered written notice to Tenant of the same (such date, the “Substitute Premises Commencement Date”), that portion of the fourth (4th) floor of the Building commonly known as Suite 400 and having an agreed upon rentable area of 20,105 rentable square feet and depicted on Exhibit A-1 attached hereto (“Substitute Premises”) shall be substituted for the Existing Premises (and the Substitute Premises shall thereupon be deemed the Premises under the Lease) upon all of the terms and conditions of the Existing Lease except as the same are expressly modified by this Amendment.  On the Substitute Premises Commencement Date, Exhibit A to the Existing Lease shall be deleted and replaced with Exhibit A-1 attached hereto.

 

b)            Tenant agrees to accept the Substitute Premises in its current “AS IS — WHERE IS” condition and acknowledges that Tenant shall not receive any allowances, abatements, or other financial concessions in connection with the Substitute Premises; provided, however, that:  (i) Landlord, at Landlord’s sole cost and expense, shall perform the work depicted on the conceptual plan dated January 18, 2011, and attached hereto as Exhibit B (“Landlord’s Work”); and (ii) Landlord shall cause those portions of the Building’s electrical, plumbing, and mechanical systems located in the Premises, including the HVAC system, to be in good working condition.  The Landlord’s Work shall be performed in a first-class workmanlike manner, using building standard materials and finishes.  Landlord has no actual knowledge of any violation of laws, ordinances and regulations applicable to the Substitute Premises, including the ADA.  Landlord shall use commercially reasonable efforts to complete the Landlord’s Work on or before March 1, 2011, but Landlord shall have no liability to Tenant and the Lease shall remain in full force and effect if Landlord is unable to complete the Landlord Work on or before March 1, 2011.

 

c)             Tenant shall have the right to occupy the Substitute Premises prior to the Substitute Premises Commencement Date for the purpose of preparing the same for Tenant’s occupancy.  Such occupancy shall be subject to all the terms and provisions of the Existing Lease except:  (i) Tenant shall not be required to pay Base Rent or Additional Rent with respect to the Substitute Premises, or for electricity consumed from the Substitute Premises until the Substitute Premises Commencement Date (provided, however that Tenant shall continue to pay Base Rent and Additional Rent for the Existing Premises and to pay for electricity consumed from the Existing Premises during such period in accordance with the Existing Lease): and (ii) Tenant shall permit Landlord to perform the Landlord Work in the Substitute Premises, shall minimize its interference with the performance of the Landlord Work, and agrees that Landlord shall not be liable for any interference with Tenant’s use of the Substitute Premises and, to the extent permitted by law waives all claims against Landlord for damage to persons or property resulting from Landlord’s performance of the Landlord Work, except for claims arising from Landlord’s intentional misconduct.

 

6.             Vacation of Existing Premises.  Tenant shall vacate and surrender possession of the Existing Premises to Landlord on or before the date which is five (5) business days after the Substitute Premises Commencement Date.  Tenant shall surrender the Existing Premises in the condition required by Section 7 of the Existing Lease; provided, however, that Tenant shall have no duty to restore the condition, or pay for restoration of the Existing Premises, including removal and restoration of any partitions, floor coverings, additions, hardware, improvements, light fixtures or non-trade fixtures in the Existing Premises prior to or after vacation of the Existing Premises.  Notwithstanding the foregoing,

 

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Tenant shall be required to pay for the cost of any repairs to the Existing Premises necessitated by Tenant’s removal of Tenant’s personal property and trade fixtures, if any, including without limitation, Tenant’s furniture.

 

7.             Base Rent.  As of the Substitute Premises Commencement Date, Base Rent payable under the Lease shall be as follows:

 

	
Period
    	
 
    	
Annual Base Rent
    	
 
    	
Monthly Base Rent
    	
 
    
	
3/1/2011 - 2/29/2012
    	
 
    	
$
    	
219,206.00
    	
 
    	
$
    	
18,267.17
    	
 
    
	
3/1/2012 - 2/28/2013
    	
 
    	
$
    	
240,255.00
    	
 
    	
$
    	
20,021.25
    	
 
    
	
3/1/2012 - 2/28/2014
    	
 
    	
$
    	
250,307.00
    	
 
    	
$
    	
20,858.92
    	
 
    

 

8.             Tenant’s Proportionate Share.  For the period commencing on Substitute Premises Commencement Date and ending on February 29, 2012, Tenant’s Proportionate Share shall be 20.51%.  From and after March 1, 2012, Tenant’s Proportionate Share shall be 25.72%.

 

9.             Additional Parking Spaces.  Commencing on the Substitute Premises Commencement Date, Tenant shall have the right to use, on the same terms and conditions provided under the Existing Lease, thirty (30) additional unreserved exterior parking spaces, for a total of up to seventy-six (76) unreserved exterior spaces.

 

10.           Brokers.  Each party represents and warrants to the other that they have not dealt directly or indirectly with any broker or finder in connection with this Amendment other than Van Vlissingen and Co. (“Broker”), and that insofar as they know no broker or finder other than Broker negotiated this Amendment or is entitled to any commission in connection therewith.  Each of Landlord and Tenant shall indemnify, defend, protect and hold the other party harmless from and against any and all costs expenses, claims and liabilities (including reasonable attorneys’ fees and disbursements) which the indemnified party may incur by reason of any claim of or liability to any broker, finder or like agent arising out of any dealings claimed to have occurred between the indemnifying party and the claimant in connection with this Amendment, and/or the above representation being false.

 

11.           Successors and Assigns.  The terms, covenants and conditions contained in this Amendment shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

 

12.           Entire Agreement; Choice of Law.  The Existing Lease as amended by this Amendment, supersedes all prior negotiations, representations, understandings and agreements of, by or between the parties concerning the subject matter hereof, which shall be deemed fully merged herein; shall be construed and governed by the laws of the State of Illinois, and may not be changed or terminated orally.

 

13.           Existing Lease in Full Force and Effect.  Except for the provisions of this Amendment, all of the terms, covenants, and conditions of the Existing Lease, and all the rights and obligations of Landlord and Tenant thereunder, shall remain in full force and effect during the Term and any extension thereof, and are not otherwise altered, amended, revised, or changed.  All Riders, Addendums, Exhibits and Schedules attached to this Amendment are expressly incorporated in this Amendment.

 

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14.           Non-Binding Until Fully Executed.  Submission of this Amendment by Landlord to Tenant for examination and/or execution shall not in any manner bind Landlord and no obligations on Landlord shall arise under this Amendment unless and until this Amendment is fully signed and delivered by Landlord and Tenant.

 

15.           Counterparts.  This Amendment may be executed in duplicate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument.  For purposes of this Amendment and the rights of the parties to enforce it, a facsimile or other electronic transmission of a signature shall have the same force and effect as an original signature.

 

16.           Limitation on Landlord’s Liabiltiy.  It is expressly understood and agreed by and between the parties hereto, anything herein to the contrary notwithstanding, that each and all of the representations, warranties, covenants, undertakings and agreements herein made on the part of Landlord while in form purporting to be the representations, warranties, covenants, undertakings, and agreements of Landlord are nevertheless each and every one of them made and intended, not as personal representations, warranties, covenants, undertakings, and agreements by Landlord or for the purpose or with the intention of binding Landlord personally, but are made and intended for the purpose only of subjecting Landlord’s interest in the Building, the Land and the Premises to the terms of this Amendment and for no other purpose whatsoever, and in case of default hereunder by Landlord (or default through, under, or by any of its agents or representatives), the Tenant shall look solely to the interests of Landlord in the Building and Land; that neither Landlord nor Chicago Title Land Trust Company, as Trustee of Trust No 113370-03, shall have any personal liability to pay any indebtedness accruing hereunder or to perform any covenant, either express or implied, herein contained and no liability or duty shall rest upon Landlord or Trust to sequester the trust estate or the rents, issues and profits arising therefrom, or the proceeds arising from any sale or other disposition thereof; that no personal liability or personal responsibility of any sort is assumed by, nor shall at any time be asserted or enforceable against, Chicago Title Land Trust Company, as Trustee under Trust No. 113370-03 or any beneficiaries under Trust or under any land trust which may become the owner of the Building, on account of this Amendment or on account of any representation, warranty, covenant, undertaking or agreement of Landlord in this Amendment contained, either express or implied, all such personal liability, if any, being expressly waived and released by Tenant and by all persons claiming by, through, or under Tenant; and that this Amendment is executed and delivered by the undersigned Landlord not in its own right, but solely in the exercise of the powers conferred upon it as such Trustee.

 

[signature page follows, remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the day and year first written above.

 

	
 
    	
LANDLORD:
    
	
 
    	
 
    
	
 
    	
111   BARCLAY ASSOCIATES
    
	
 
    	
 
    
	
 
    	
By:   Van Vlissingen & Co., its authorized agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Charles R. Lamphere
    
	
 
    	
 
    
	
 
    	
Name:   
    	
Charles   R. Lamphere
    
	
 
    	
 
    
	
 
    	
Its:   
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
TENANT:
    
	
 
    	
 
    
	
 
    	
BIOSANTE   PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Phillip B. Donenberg
    
	
 
    	
 
    
	
 
    	
Name:   
    	
Phillip   B. Donenberg
    
	
 
    	
 
    
	
 
    	
Its:   
    	
Senior   Vice President of Finance, Chief Financial Officer 
    
	
 
    	
 
    	
and   Secretary
    

 

 

Exhibit A-1

 

SUITE 400

 

[see attached]

 

 

 

 

Exhibit B

 

LANDLORD’S WORKExhibit 10.1

 

GENERAL RELEASE AND SEPARATION AGREEMENT

 

This General Release and Separation Agreement (hereafter “Agreement”) is entered into between Eric Lindquist (the “Executive”), and Accuray Incorporated (the “Company”), effective on the eighth calendar day following the Executive’s signature (the “Effective Date”), unless he revokes his acceptance in accordance with the terms of Section 6(b), below.

 

WHEREAS, the Executive was Senior Vice President, Chief Marketing Officer of the Company, pursuant to the terms of the original employment offer letter dated October 11, 2004 and as amended on October 22, 2008 (the “Employment Agreement”);

 

WHEREAS, the Executive resigned effective September 2, 2010; and

 

WHEREAS, the Company and the Executive now wish to document the termination of their employment relationship and fully and finally to resolve all matters between them;

 

THEREFORE, in exchange for the good and valuable consideration set forth herein, the adequacy of which is specifically acknowledged, the Executive and the Company hereby agree as follows:

 

1.                                       Resignation of Employment.  The Executive confirms his resignation of his employment and of his position as an officer of the Company effective September 2, 2010 (the “Resignation Date”).  The parties hereby acknowledge and agree that the Executive’s resignation of employment constitutes a “separation from service” from the Company within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”), and Treasury Regulation Section 1.409A-1(h) (a “Separation from Service”).  As of the Resignation Date, the Employment Agreement shall automatically terminate and be of no further force and effect, and neither the Company nor the Executive shall have any further obligations thereunder, except as expressly provided herein.  Notwithstanding the foregoing, the Company shall be obligated to Executive for severance payments and continuation of benefits as contemplated by Section 7 of the Employment Agreement and as set forth in Section 3 below.

 

2.                                       Payment of Accrued Wages and Expenses.  The Executive acknowledges receipt, on the Resignation Date, of an amount equal to all accrued wages through the Resignation Date, including accrued, unused vacation and/or paid time off, less applicable taxes and other authorized withholding (apart from the Executive’s bonus for the 2010 fiscal year, which will be paid in accordance with the regular terms of the FY10 Company Bonus Plan). The Executive shall also be promptly reimbursed for all expenses incurred by him on behalf of the Company, so long as they are submitted on or before November 1, 2010 for reimbursement and they are in accordance with the Company’s expense reimbursement policies.

 

3.                                       Cash Severance Benefits and COBRA Premiums.                              The Executive agrees that, except as set forth in this Agreement, he is entitled to no additional pay or benefits in conjunction with the termination of his employment.  Subject to Section 22(b) of this Agreement, the Company shall pay to the Executive, in a lump-sum, cash severance in the gross amount of $383,926.01 (the “Severance Payment”), which the parties acknowledge and agree represents the amount of the “Severance Payment” calculated under, and as defined in, Section 6(a) of the Employment Agreement, consisting of:

 

1.               Eight months’ base salary: $210,833.33

2.               Your 2011 fiscal year target annual bonus (65%×$316,250 = $205,562.50) pro-rated by the number of days elapsed in the current fiscal year: (64/365×$205,562) = $36,044.16

3.               66.6% of your 2011 fiscal year target annual bonus: ($205,562×66.6%) = $137,048.52

 

	
EXECUTIVE GENERAL RELEASE
    	
 
    	
ACCURAY CONFIDENTIAL
    
	
Eric Lindquist
    	
 
    	
 
    

 

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The Severance Payment shall be paid net of applicable taxes and other authorized withholding.  In addition, in the event that the Executive elects to continue healthcare coverage pursuant to the Consolidated Omnibus Budget and Reconciliation Act (“COBRA”) for himself, his spouse and his children, as applicable and to the extent eligible, the Company shall pay the Executive’s COBRA premiums for the period commencing on the date on which the Executive’s Company-sponsored healthcare coverage would otherwise terminate (absent COBRA) and ending on the earlier to occur of the eight (8) month anniversary of such date or the expiration of the period during which the Executive would be entitled to continuation coverage under COBRA absent this provision.

 

4.                                     Stock Options and Restricted Stock Units.  The Executive acknowledges that as of the Resignation Date, the Executive was vested in Stock Options and Restricted Stock Units (“RSUs”) as reflected in the report attached as Exhibit A hereto.  The Executive further acknowledges that vesting in the Stock Options and RSUs ceased on the Resignation Date, and all Stock Options and RSUs not then vested were cancelled and forfeited as of that date.  Except as specifically set forth herein, the Executive’s rights with respect to Stock Options and RSUs issued to him are governed by the Stock Option and Restricted Stock Unit Agreements entered into between the Executive and the Company, and the applicable Company equity incentive plan(s) and Notice(s) of Grant.

 

5.                                     Outplacement Assistance.  The Company will pay for outplacement assistance for the Executive in an amount not to exceed $10,000 (ten thousand dollars), provided that the Executive begins such outplacement assistance with Accuray’s outplacement provider on or before February 1, 2011. Accuray’s outplacement service provider will bill Accuray directly and there is no cash value to this benefit.

 

6.                                     General Release of Claims by the Executive.

 

(a)                                  The Executive, on behalf of himself and his executors, heirs, administrators, representatives and assigns, hereby agrees to release and forever discharge the Company and all predecessors, successors and their respective parent corporations, affiliates, related, and/or subsidiary entities, and all of their past and present investors, directors, shareholders, officers, general or limited partners, executives, attorneys, agents and representatives, and executive benefit plans in which the Executive is or has been a participant by virtue of his employment with the Company, from any and all claims, debts, demands, accounts, judgments, rights, causes of action, equitable relief, damages, costs, charges, complaints, obligations, promises, agreements, controversies, suits, expenses, compensation, responsibility and liability of every kind and character whatsoever (including attorneys’ fees and costs), whether in law or equity, known or unknown, asserted or unasserted, suspected or unsuspected (collectively, “Claims”), which the Executive has or may have had against such entities based on any events or circumstances arising or occurring on or prior to the date hereof or on or prior to the Resignation Date, arising directly or indirectly out of, relating to, or in any other way involving in any manner whatsoever the Executive’s employment by the Company or the separation thereof, and any and all claims arising under federal, state, or local laws relating to employment, including without limitation claims of wrongful discharge, breach of express or implied contract, fraud, misrepresentation, defamation, or liability in tort, claims of any kind that may be brought in any court or administrative agency, any claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Fair Labor Standards Act, the Executive Retirement Income Security Act, the Family and Medical Leave Act, and similar state or local statutes, ordinances, and regulations, including, without limitation, the California Family Rights Act, the California Fair Employment and Housing Act and the California Labor Code.

 

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Notwithstanding the generality of the foregoing, the Executive does not release the following claims and rights:

 

(i)                                     Claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law;

 

(ii)                                  Claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of the federal law known as COBRA;

 

(iii)                               The Executive’s right to bring to the attention of the Equal Employment Opportunity Commission claims of discrimination; provided, however, that the Executive does release his right to secure damages for any alleged discriminatory treatment;

 

(iv)                              The Executive’s rights under the Indemnification Agreement between Company and Executive and under applicable law (including California Labor Code Section 2802), the General Corporation Law of Delaware and the Company’s D&O policy to seek indemnity for acts committed, or omissions, within the course and scope of the Executive’s employment duties; and

 

(v)                                 Claims for breach of this Separation Agreement.

 

(b)                               In accordance with the Older Workers Benefit Protection Act of 1990, the Executive acknowledges that he is aware of the following:

 

(i)                                     This Section and this Agreement are written in a manner calculated to be understood by the Executive.

 

(ii)                                  The waiver and release of claims under the ADEA contained in this Agreement does not cover rights or claims that may arise after the date on which the Executive signs this Agreement.

 

(iii)                               This Agreement provides for consideration in addition to anything of value to which the Executive is already entitled.

 

(iv)                              The Executive has been advised to consult an attorney before signing this Agreement.

 

(v)                                 The Executive has been granted forty-five (45) days after he is presented with this Agreement to decide whether or not to sign this Agreement.  If the Executive executes this Agreement prior to Monday October 18, 2010 he does so voluntarily and after having had the opportunity to consult with an attorney, and hereby waives the remainder of the period.

 

(vi)                              The Executive has the right to revoke this general release within seven (7) days of signing this Agreement.  In the event this general release is revoked, this Agreement will be null and void in its entirety, and the Executive will not receive the benefits of this Agreement.

 

If the Executive wishes to revoke this agreement, he must deliver written notice stating that intent to revoke, in accordance with the notice provisions of Section 17 of this Agreement, on or before 5:00 p.m.

 

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on the seventh (7th) day after the date on which the Executive signs this Agreement.

 

7.                                     The Company’s Release of Claims. Nothing herein shall release or discharge any Claim by the Company against the Executive, or the right of the Company to bring any action, legal or otherwise, against the Executive as a result of any failure by him to perform his obligations under this Agreement, or as a result of any acts of intentional misconduct or recklessness (including, but not limited to, fraud, embezzlement, misappropriation, or other malfeasance).

 

8.                                     Waiver of Rights Under California Civil Code Section 1542.  The Company and the Executive acknowledge that they have been advised of and are familiar with the provisions of 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.”

 

Being aware of said code section, the Company and the Executive hereby expressly waive any rights they may have thereunder, as well as under any other statutes or common law principles of similar effect; provided, however, that such waiver is not intended to affect claims expressly preserved under the terms of the parties’ respective releases.

 

9.                                     Nondisparagement.  The Executive agrees that neither he nor anyone acting by, through, under or in concert with him shall disparage or otherwise communicate negative statements or opinions about the Company, its Board members, officers, executives or business.  The Company agrees that neither its Board members nor executive officers shall disparage or otherwise communicate negative statements or opinions about the Executive.

 

10.                               Restrictive Covenants.  The Executive acknowledges his continuing obligations, pursuant to Section 8(a), (b) and (d) of the Employment Agreement.

 

11.                               Cooperation.  The Executive agrees to give reasonable cooperation, at the Company’s request, in any pending or future litigation or arbitration brought against the Company and in any investigation that the Company or any government entity may conduct.  The Company shall reimburse the Executive for all out of pocket expenses reasonably incurred by him in compliance with this Section 11. For his part, Executive agrees to submit a reimbursement for such out of pocket expenses within thirty (30) days after they have been incurred.

 

12.                               Executive’s Representations and Warranties.  The Executive represents and warrants that:

 

(a)                                  He has been paid all wages owed to him by the Company, including all accrued, unused vacation and/or paid time off, as of the date of execution of this Agreement (apart from the regular payment of the FY10 bonus which will be paid in accordance with the terms of the FY10 Company Bonus Plan);

 

(b)                                 As of the date of execution of this Agreement, he has not sustained any injuries for which he might be entitled to compensation pursuant to California’s Workers Compensation law;

 

(c)                                  The Executive has not initiated any adversarial proceedings of any kind against the Company or against any other person or entity released herein, nor will he do so in the future, except as specifically allowed by this Agreement.

 

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13.                               Confidential Information; Return of Company Property.

 

(a)                                  The Executive hereby expressly confirms his continuing obligations to the Company pursuant to Section 8(a) of the Employment Agreement, and pursuant to the Employee Invention Assignment and Confidentiality Agreement executed by the Executive, a copy of which is attached as Exhibit B and incorporated herein by reference.

 

(b)                                 The Executive shall deliver to the Company within five days of the Resignation Date, all originals and copies of correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning the Company and its customers’, business plans, marketing strategies, products, processes or business of any kind, and all originals and copies of documents that contain proprietary information or trade secrets of the Company that are in the possession or control of the Executive or his agents or representatives.

 

(c)                                  The Executive shall return to the Company within five days of the Resignation Date all equipment of the Company in his possession or control. The Executive may however keep his Company issued laptop computer and cellular phone. Accuray will remove all Company licensed software and Confidential information before delivering possession.

 

14.                               Taxes.  To the extent any taxes may be payable by the Executive for the benefits provided to him by this Agreement beyond those withheld by the Company, the Executive agrees to pay them himself and to indemnify and hold the Company and the other entities released herein harmless for any tax claims or penalties, and associated attorneys’ fees and costs, resulting from any failure by him to make required payments.

 

15.                               In the Event of a Claimed Breach.  All controversies, claims and disputes arising out of or relating to this Agreement, including without limitation any alleged violation of its terms, shall be resolved by final and binding arbitration before a single neutral arbitrator in San Jose, California, in accordance with the applicable dispute resolution rules of the Judicial Arbitration and Mediation Service (“JAMS”). The arbitration shall be commenced by filing a demand for arbitration with JAMS within 60 (sixty) days after the filing party has given notice of such breach to the other party.  The arbitrator shall have authority to award the prevailing party attorneys’ fees and expert fees, if any.  Notwithstanding the foregoing, it is acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations imposed on them under Sections 13(a) and (b) hereof, and that in the event of any such failure, an aggrieved person will be irreparably damaged and will not have an adequate remedy at law.  Any such person shall, therefore, be entitled to injunctive relief, including specific performance, to enforce such obligations, and if any action shall be brought in equity to enforce any of the provisions of Sections 13(a) and (b) of this Agreement, neither of the parties hereto shall raise the defense that there is an adequate remedy at law.

 

16.                               Choice of Law.  This Agreement shall in all respects be governed and construed in accordance with the laws of the State of California, including all matters of construction, validity and performance, without regard to conflicts of law principles.

 

17.                               Notices.  All notices, demands or other communications regarding this Agreement shall be in writing and shall be sufficiently given if either personally delivered or sent by facsimile or overnight courier, addressed as follows:

 

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(a)                                  If to the Company:

 

Accuray Incorporated

Attn:  Darren J. Milliken, General Counsel

1310 Chesapeake Terrace

Sunnyvale, CA  94089

Phone:  408-716-4600

Fax:  408-716-4747

 

(b)                                 If to the Executive:

 

Eric Lindquist

 

18.                               Severability.  Except as otherwise specified below, should any portion of this Agreement be found void or unenforceable for any reason by a court of competent jurisdiction, the parties intend that such provision be limited or modified so as to make it enforceable, and if such provision cannot be modified to be enforceable, the unenforceable portion shall be deemed severed from the remaining portions of this Agreement, which shall otherwise remain in full force and effect.  If any portion of this Agreement is so found to be void or unenforceable for any reason in regard to any one or more persons, entities, or subject matters, such portion shall remain in full force and effect with respect to all other persons, entities, and subject matters.  This paragraph shall not operate, however, to sever the Executive’s obligation to provide the binding release to all entities intended to be released hereunder.

 

19.                               Understanding and Authority.  The parties understand and agree that all terms of this Agreement are contractual and are not a mere recital, and represent and warrant that they are competent to covenant and agree as herein provided.

 

20.                               Integration Clause.  This Agreement, the Employment Agreement, and the Employee Invention Assignment and Confidentiality Agreement contain the entire agreement of the parties with regard to the matters referenced herein and supersede any prior agreements as to such matters. This Agreement may not be changed or modified, in whole or in part, except by an instrument in writing signed by the Executive and the Chief Executive Officer of the Company.  The Indemnification Agreement between the Company and the Executive shall not be affected by the existence of this Agreement, including this Section 20 hereof, and shall remain in full force and effect.

 

21.                               Execution in Counterparts.  This Agreement may be executed in counterparts with the same force and effectiveness as though executed in a single document.

 

22.                               Section 409A of the Code.

 

(a)                                  The payments and benefits under this Agreement are intended to be exempt from the application of Section 409A of the Code.  To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Code and Department of Treasury Regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of this Agreement to the contrary, if the Company determines that any such compensation or benefits payable under this Agreement may be subject to Section 409A of the Code and related Department of Treasury guidance, the Company may, with the Executive’s prior written consent, adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to (i) exempt

 

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the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of such compensation and benefits, or (ii) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

 

(b)                                 Notwithstanding anything to the contrary in this Agreement, no payment or benefits, including without limitation the amount payable under Section 3 hereof, shall be paid to the Executive during the six (6) month period following the Executive’s Separation from Service if the Company determines that paying such amount at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code.  If the payment of any such amount is delayed as a result of the previous sentence, then on the first business day following the end of such six (6) month period (or such earlier date upon which such amount can be paid under Section 409A of the Code without resulting in a prohibited distribution, including as a result of the Executive’s death), the Company shall pay the Executive a lump-sum amount equal to the cumulative amount that would have otherwise been payable to the Executive during such period.

 

(c)                                  To the extent permitted under Section 409A of the Code, any separate payment or benefit under this Agreement or otherwise shall not be deemed “nonqualified deferred compensation” subject to Section 409A and the six (6) month delay requirement under 409A(a)(2)(B)(i) of the Code to the extent provided in the exceptions in Treasury Regulation Section 1.409A-1(b)(4), Section 1.409A-1(b)(9) or any other applicable exception or provision of Section 409A of the Code.

 

(d)                                 To the extent that any reimbursements or corresponding in-kind benefits provided to the Executive under this Agreement, including, without limitation under Section 2 or Section 11 hereof, are deemed to constitute compensation to the Executive, such amounts shall be paid or reimbursed reasonably promptly, but not later than December 31 of the year following the year in which the expense was incurred.  The amount of any such payments or expense reimbursements in one year shall not affect the expenses or in-kind benefits eligible for payment or reimbursement in any other taxable year, and the Executive’s right to such payments or reimbursement of any such expenses shall not be subject to liquidation or exchange for any other benefit.

 

7

 

The parties have carefully read this Agreement in its entirety; fully understand and agree to its terms and provisions; and intend and agree that it is final and binding on all parties.

 

IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed the foregoing on the dates shown below.

 

	
ERIC   LINDQUIST
    	
 
    	
ACCURAY   INCORPORATED
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Eric Lindquist
    	
 
    	
/s/   Euan Thomson
    
	
Eric Lindquist
    	
 
    	
Euan   Thomson
    
	
 
    	
 
    	
Title:   President and Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date
    	
10/1/10
    	
 
    	
Date
    	
10/1/10
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Darren J. Milliken
    
	
 
    	
 
    	
Darren   J. Milliken
    
	
 
    	
 
    	
Senior   Vice President, General Counsel
    
	
 
    	
 
    	
Accuray   Incorporated
    
	
 
    	
 
    	
10/1/10
    
					

 

8

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