ACCURAY INCORPORATED INTERNATIONAL SALES AGENT AGREEMENT

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Exhibit 10.29

ACCURAY INCORPORATED
INTERNATIONAL SALES AGENT AGREEMENT

        This International Sales Agent Agreement ("Agreement") is entered into by and between ACCURAY INCORPORATED, a California corporation with its executive offices located at 1310 Chesapeake Terrace, Sunnyvale, California 94089, USA ("Accuray"), and                                                         , a corporation organized under the laws of                                    , with its executive offices located at                                     ("Agent"), as of                                    , 2006 ("Effective Date").

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

        In order to achieve its business objectives, Accuray relies on qualified distributors and sales agents to market and/or distribute its products and services in different territories.

        Accuray wishes to appoint Agent as its exclusive sales agent in the Territory, as defined below, subject to the terms and conditions of this Agreement and Agent wishes to accept such appointment.

1.     Definitions

• • 1.1.

    Accuray's Terms of Sale means the current standard international transaction terms and conditions of sale prepared by Accuray from time to time and provided to Agent.

    1.2.

    Customer means any person or business entity lawfully doing business in the Territory with whom Agent enters into negotiations, and/or Accuray enters into an agreement for an agreement for Products or Services. Customer does not include sites or hospitals located on United States armed forces bases in the Territory.

    1.3.

    Product(s) means the CyberKnife System and/or related products manufactured by or for Accuray for use in the radiosurgery market and listed in Exhibit A attached to this Agreement, which have been approved for sale in the Territory.

    1.4.

    Project means any activity or situation that includes a potential Customer or prospect that might be interested in acquiring Accuray's Products or Services.

    1.5.

    Proposal means a document that offers to provide Products or Services to a prospective Customer.

    1.6.

    Purchase Contract means a document provided by Accuray for the Customer in response to the Purchase Request received from Agent, that sets forth the Products or Services and the specific terms and conditions of the transaction desired by the Customer.

    1.7.

    Purchase Request means a document provided by Agent to Accuray that sets forth in adequate detail, including specifications and delivery schedule, the Products or Services desired by the Customer.

    1.8.

    Service(s) means the performance of radiosurgery-related service(s) by Accuray, which may include technical support, training or installation of Products, as listed in Exhibit A.

    1.9.

    Service Agreements means the Accuray Diamond Elite Service Agreement, Ruby Elite Service Agreement, Emerald Elite Service Agreement and Extended Parts Warranty, Additional

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• • • • Upgrade Agreement or such other service programs and agreements as may be released or modified by Accuray from time to time.

    1.10.

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

    1.11.

    System(s) means the Accuray CyberKnife® Robotic Radiosurgery System as set forth in Exhibit A attached hereto.

    1.12.

    Territory means                          .

2.     Duties of Accuray

• • 2.1.

    Status.     Accuray is responsible for ensuring that the Products supplied are of good quality as further described below.

    2.2.

    Exclusive Agent.     Accuray hereby appoints Agent as the exclusive sales agent of Products and Services to Customers in the Territory, subject to the terms and conditions of this Agreement. So long as Agent achieves the volume of business set forth below and otherwise meets its obligations under this Agreement, Agent shall be the exclusive sales agent of Products and Services to Customers in the Territory.

    2.3.

    Products and Services.     Upon receipt of a Purchase Request, Accuray will use commercially reasonable efforts to provide to Agent in a timely manner a Purchase Contract for those Products and Services in accordance with the terms of this Agreement.

    2.4.

    Product and Service Pricing.     Accuray will provide Product and Service pricing to Agent from time to time during the Term of this Agreement. Products and Services shall be priced by Accuray to Agent in accordance with Accuray's price list in effect from time to time, but, in any case, no change can be made without six (6) months' prior written notice to Agent. The current prices, as of the Effective Date, of Accuray's Products and Services are listed on Exhibit A. All prices will be stated in US Dollars, unless another currency is agreed upon in writing by Accuray. Accuray has provided Agent with Accuray's list price as well as a Minimum Sales Agent Price. In no event shall Agent sell a CyberKnife System, or other Accuray Product or Service at less than the Minimum Sales Agent Price.

    2.5.

    Product Specifications and Promotional Literature.     Accuray will provide product specifications and promotional literature to Agent from time to time during the Term of this Agreement. Agent may use product specifications and promotional literature in Agent's dealings with Customers. Accuray may introduce changes and upgrades to the Products. Accuray will be responsible for ensuring that any changes or upgrades to the Products comply with the latest regulatory approvals, and will use commercially reasonable efforts to give Agent as much advance notice of upgrades as is feasible.

    2.6.

    Regulatory Clearance.     Agent is responsible for helping Accuray to obtain the regulatory clearance in the Territory for Products in Accuray's name, as detailed in Section 3.4, however Accuray will provide Agent with reasonable assistance in obtaining regulatory clearances.

    2.7.

    Warranty.     Accuray will provide a warranty that the Products will be free from defects and perform substantially in accordance with the written Specifications provided by Accuray as reflected in the regulatory clearance at the time of sale for a period of one (1) year following installation of the Products at Customer's facility, but not to exceed eighteen (18) months following shipment of such Products to Customer. Accuray makes no warranty that the operation of any software will be uninterrupted or error-free. Except as set forth in the preceding sentences, Accuray makes no warranties or representations to Customer or to any other party regarding any Products or Services provided by Accuray. TO THE FULLEST EXTENT

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• • • • PERMITTED BY APPLICABLE LAW, ACCURAY DISCLAIMS ALL OTHER WARRANTIES AND REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTIES ARISING OUT OF COURSE OF DEALING OR USAGE OF TRADE.

    2.8.

    Support.     Accuray will provide Customers the following types of support:
    
    

    2.8.1.

    Hardware.     During the warranty period, Accuray will provide replacement of defective parts. Agent shall be responsible for and/or assist Accuray with the installation and labor for such replacement parts.

    2.8.2.

    Software.     During the warranty period, Accuray will provide error corrections or "bug fixes." Additionally, Accuray shall provide Customer with any and all applicable error corrections and bug fixes generally provided by Accuray to Accuray customers with similar Product installations. Agent shall be responsible for and/or assist Accuray with the installation of such bug fixes.

    2.8.3.

    Warranty Exclusions.     All warranty replacement of parts shall be limited to malfunctions which are due and traceable to defects in original material or workmanship of Products. The warranties set forth in this Section 2 shall be void and of no further effect in the event of abuse, accident, alteration, misuse or neglect of Products, including but not limited to user modification of the operating environment specified by Accuray and user modification of any software.

    2.8.4.

    Service Agreements.     The Service Agreements will be provided at the time of purchase or after the one-year warranty period, as appropriate. A summary of the service terms and sample Service Agreements attached hereto as Exhibit E. The Service Agreements are to be ordered on the terms as set forth in the agreements, unless otherwise agreed to in writing by an authorized representative of Accuray.
    
    

    2.8.4.1.

    Accuray Direct Sales.     Accuray reserves the right to sell the Service Agreements directly to customers within the Territory. Accuray's prices for such direct Service Agreements are set forth in Exhibit E, and Accuray will not offer any Service Agreements to customers in the Territory at lesser prices without six (6) months prior written notice in accordance with Section 2.4 (Product and Service Pricing) above.

    2.8.5.

    Additional Support.     Accuray will provide additional installation, warranty or service support at Distributor's request, to be ordered separately, and priced according to Accuray's then-current price lists.

    2.9.

    Training.     Accuray will provide training to Agent and Customers in accordance with Exhibit D.

    2.10.

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

3.     Duties of Agent

• • 3.1.

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

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

    3.2.

    Training.     Agent will support Accuray's training of new Customer personnel, and will help arrange training at Accuray for Customers, according to Exhibit D.

    3.3.

    Market Knowledge, Promotion and Sales.     Agent represents that it has a thorough knowledge of the Territory, the market for radiosurgery products and of all current and proposed Projects. Agent will develop a thorough and complete understanding of the Products and Services. Agent will use its knowledge and understanding to develop potential Projects.
    
    

    3.3.1.

    Agent will use best efforts to promote the sale of and to sell Products and Services to Customers in accordance with Accuray's marketing guidance and policies in effect from time to time and will make best efforts to learn of any potential Project. Agent will make itself familiar with each such Project so as to learn all conditions of the Project which may impact the Products or Services to be offered. In addition, as Accuray releases new features and Products, Agent will use best efforts to promote the sale of and to sell those features and Products to the installed base of Products and to new Customers in the Territory.

    3.3.2.

    Agent sales and marketing staff will actively participate in the following yearly activities: American Society of Therapeutic Radiology & Oncology (ASTRO); American Association of Neurological Surgeons (AANS); European Society of Therapeutic Radiology and Oncology (ESTRO) (if applicable); Accuray worldwide users' meeting; and Accuray worldwide sales meetings. Active participation includes attendance at and participation in such meetings.

    3.3.3.

    Agent will report to Accuray any proposed or pending Projects outside the Territory about which Agent learns during the Term of this Agreement.

    3.4.

    Regulatory Clearance.     Agent will be responsible for helping Accuray to obtain the regulatory clearance in the Territory for Products and for any changes or upgrades to the Products. Agent will be responsible for (i) managing any paperwork associated with obtaining the regulatory clearance; (ii) timely application for all upgrades that Accuray determines are commercially appropriate; and (iii) maintaining the regulatory clearance. Accuray shall reimburse Agent for any direct costs or charges billed by third parties, plus any other direct regulatory clearance-related expenses incurred in connection with such activities, as long as those costs have been pre-approved in writing by an authorized representative of Accuray. At Accuray's request, Agent will provide Accuray with receipts and other documentation for all such expenses. Accuray shall not be responsible for Agent's internal administrative personnel or resources for such activities.

    3.5.

    Import License.     Agent will help Accuray to obtain and maintain any required import licenses.

    3.6.

    Agent Personnel.
    
    

    3.6.1.

    Full-Time Personnel.     Agent will provide full-time personnel that will include (to be determined) a general manager, a senior product manager and support staff, at least one (1) senior sales person with sufficient skill, training and experience to be effectively

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• • • • • • capable of selling a $4 million medical product, and one (1) clinical support or training specialist. Agent will provide adequate technical support staff for the operation and maintenance of the Products and Services. Agent will employ one (1) service engineer who is capable of performing installation and First Line Field Service (as defined in Section 3.20 (First Line Field Service) below). All of these personnel must be hired and attend training at Accuray within nine (9) months of the Effective Date of this Agreement. Accuray will provide the training and Agent will pay for travel and accommodation expenses. These personnel will be full-time, and will have sufficient understanding of the business relating to Accuray's Products and Services and will have adequate backgrounds in surgical and/or radiation oncology products and services, knowledge, skill, experience and training to perform the following functions:

            3.6.1.1.

    Sales, sales management, sales forecasting, and order management;

    • • • • 3.6.1.2.

    Marketing throughout the Territory;

    • • • • 3.6.1.3.

    Planning for the installation and installing Products;

    • • • • 3.6.1.4.

    Clinical trials, regulatory compliance, and reimbursement;

    • • • • 3.6.1.5.

    Product management;

    • • • • 3.6.1.6.

    Development of on-site training.

    • • • • 3.6.1.7.

    Provision of Services; and

    • • • • 3.6.1.8.

    First Line Field service.

    3.7.

    Proposals.     Agent will submit a timely Proposal on every Project in the Territory during the Term of this Agreement. All Proposals shall be prepared and submitted to the Customer by Agent. Proposals will offer only Products or Services described in then current written Specifications, and only in accordance with this Agreement. Unless Agent has prior written consent from Accuray to the contrary, all Proposals submitted by Agent are (and Agent must inform the Customer that they are) subject to change in the event Accuray's Terms of Sale or Specifications change prior to the time Accuray accepts a signed Purchase Contract from the Customer (if it does).

    3.8.

    Requests.
    
    

    3.8.1.

    Agent will receive each request placed by a Customer to which Agent has submitted a Proposal and send an appropriate Purchase Request to Accuray. Purchase Requests may be accepted only by Accuray.

    3.8.2.

    Agent understands and acknowledges that shipment of any System or Product by Accuray must be to a medical facility within the Territory,

    3.8.3.

    Agent shall facilitate the negotiations, including language support, between Accuray and a Customer following submission of a Purchase Request to Accuray.

    3.8.4.

    The resulting Purchase Contract for the sale of Products and Services shall be between Accuray and the Customer. In the case of a Product Request, Agent must send a Purchase Request to Accuray at least six (6) months prior to the expected shipment date. All Products must be purchased from Accuray unless otherwise specified in this Agreement or agreed in writing by Accuray.

    3.9.

    Payment.     Payment for Products shall be made by Customer to Accuray in US Dollars in the form of either (1) an irrevocable trade finance letter of credit or (2) wire transfer as further described in Sections 3.9.1 and 3.9.2, respectively below. Accuray shall bear the cost of any

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• • • • bank charges assessed by its bank for a letter of credit and any commission charge for a wire transfer. Customer will pay a late charge of two percent (2%) on any balance that becomes overdue, plus interest at the rate of one percent (1%) per month or the highest interest rate allowed by law, whichever is greater, until paid in full.

        3.9.1.

    Letter of Credit.     An irrevocable trade finance letter of credit issued by Customer's bank, confirmed by a bank designated by Accuray that is doing business in the State of California, United States of America, in all respects, including the confirming bank, acceptable to Accuray, and delivered to Accuray with the signed Purchase Contract. The letter of credit will provide that Accuray can draw against the letter of credit according to the payment schedule set forth in the signed Purchase Contract. Accuray's standard payment schedule is as follows:
    
    

    3.9.1.1.

    30% of Price due with Signed Purchase Contract

    3.9.1.2.

    40% of Price due upon delivery of the CyberKnife G4 System

    3.9.1.3.

    30% of Price due upon Completion of Acceptance Testing

    • • 3.9.2.

    Wire Transfer.     A wire transfer made in advance of the date payment is due, made in U.S. dollars, to a bank selected by Accuray, in accordance with the same payment schedule as outlined above with respect to the Letter of Credit.

    3.10.

    Agent's Commission.     Agent will receive payment from Accuray based on the money actually received from Accuray on all signed Purchase Contracts or other agreements accepted by Accuray ("Commission") as follows:
    
    

    3.10.1.

    CyberKnife System Purchase Contract.     For each signed Purchase Contract for a CyberKnife System received from a Customer within the Territory and accepted by Accuray, Agent shall receive Commission based on the purchase price for the System as set forth in Exhibit C. Agent shall receive its Commission for a CyberKnife System in accordance with the following schedule:
    
    

    3.10.1.1.

    Ten percent (10%) of Agent's Commission upon Agent's Customer signing a Purchase Contract with Accuray and release of funds from the Letter of Credit in accordance with Section 3.9.1 above making funds available to Accuray or wire transfer in accordance with Section 3.9.2 above;

    3.10.1.2.

    Sixty percent (60%) of Agent's Commission upon shipment and release of funds from the Letter of Credit in accordance with Section 3.9.1 above making funds available to Accuray or wire transfer in accordance with Section 3.9.2 above; and

    3.10.1.3.

    Thirty percent (30%) of Agent's Commission upon installation with successful acceptance testing of the System and release of funds from the Letter of Credit in accordance with Section 3.9.1 above making funds available to Accuray or wire transfer in accordance with Section 3.9.2 above.

    3.10.2.

    Service Agreements.     For each signed Service Agreement, Agent will receive a Commission as set forth in the attached Exhibit C. Such Commission shall be paid as monies are received by Accuray, in accordance with the payment schedule selected by the Customer. In other words, if the Customer elects to make annual payments, Agent will receive its Commission when Accuray receives the Customer's annual payment. Alternatively, if the Customer elects to make quarterly payments, then Agent will receive a proportional share of its Commission when Accuray receives the Customer's quarterly payment.

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• • • • 3.10.3.

    Additional Options.     For each signed Purchase Contract for Additional Options received from a Customer within the Territory and accepted by Accuray, Agent shall receive a Commission in an amount equal to 10% of the payments actually received by Accuray.

    • • 3.10.4.

    Installation.     For each CyberKnife System installation on which Agent assists Accuray, which assistance shall include site planning and facilitation of installation with Customer, Agent shall receive a Commission of U.S. $12,500 upon completion of acceptance testing.

    • • 3.10.5.

    Payment of Commission.     All Commissions shall be paid within thirty (30) days of receipt of payment by Accuray from Customer.

    3.11.

    Volume of Business.     Accuray and Agent have reviewed and discussed the Territory in detail and have agreed that Agent will market and sell the minimum volume of Systems as set forth in Exhibit B attached to this Agreement. If Agent does not make the minimum sales as set forth in Exhibit B Accuray may, at its sole determination and in its sole and complete discretion, elect to make this sales agent arrangement non-exclusive or terminate this Agreement.

    3.12.

    Forecast.     In order to support Accuray's production planning, at least every three (3) months during the Term of this Agreement, Agent will provide Accuray an eighteen (18) month rolling forecast of: (i) targeted Customers, (ii) contracted Customers, and (iii) forecast of Product sales by product line. The forecast will include an update on the top ten (10) projects. Such forecasts shall be provided to Accuray by the first business day of January, April, July and September each year, and shall be delivered to the Accuray General Manager for the Territory. Such forecasts are in addition to the reports to be provided in accordance with Section 3.22.1 (Reports) below.

    3.13.

    Customer Support.     Agent will provide guidance to billing and reimbursement personnel of each Customer regarding regulatory and billing requirements and reimbursement for treatment provided with Products under radiosurgery reimbursement codes applicable within the Territory. Agent will be responsible for ensuring that its personnel maintain their proficiency with respect to the Products and all upgrades, enhancements and new feature releases, and will send its personnel to Accuray for training as necessary.

    3.14.

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

    3.15.

    Public Relations.     Agent will implement a public relations program once a CyberKnife is operational in the Territory.

    3.16.

    Installation.     Agent will help coordinate installation for any Product a Customer purchases, including assistance with site planning and facilitation between Accuray and Customer for site planning and installation work. Agent also agrees to be on site during the actual installation of the System at Customer's facility.

    3.17.

    Warranty.     Accuray will provide a one (1) year warranty (for parts and service) for each Product a Customer purchases. Agent will not make any other warranties or representations in Accuray's name or on Accuray's behalf.

    3.18.

    Service Agreements.     Agent will make commercially reasonable efforts to sell a Service Agreement to each Customer. Sample Service Agreements are summarized and attached in

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• • • • Exhibit E attached hereto, however, Agent is to obtain the most recent version of the Service Agreements before engaging with to a Customer.

    3.19.

    Upgrades.     Any upgrades can be purchased at the discretion of the Customer.

    3.20.

    First Line Field Service.     Agent will provide to all Customers, remotely and on-site when needed, routine maintenance and service and timely response to special requests for service of all installed Products in the Territory. Additionally, if Accuray must be on site at a Customer facility to provide service, Agent will accompany any Accuray personnel to provide language support and to facilitate such repairs.

    3.21.

    Spare Parts Inventory.     Agent will maintain a spare parts inventory at its cost, as detailed under Exhibit G, to support Customers. Accuray currently offer three (3) different Agent Spare Parts Kits, and Agent may select which Spare Parts Kit it wishes to purchase, provided, however, that Agent will maintain at least a Kit A for so long as there are two (2) CyberKnife Systems installed in the Territory, and a Kit B for so long as there are three (3) or more CyberKnife Systems installed in the Territory. Agent is willing to ship spare parts to locations outside the Territory as requested by Accuray, and Accuray will reimburse Agent for the direct cost of such activity.

    3.22.

    Records and Reports.
    
    

    3.22.1.

    Reports.     Within thirty (30) days after the end of each quarter, Agent will provide Accuray with a written report that includes: (i) Agent's sales of each Product for that quarter, by dollar volume and number of units, both in the aggregate and for such categories as Accuray may designate from time to time; (ii) CyberKnife utilization reports: and (iii) any other information requested by Accuray. Agent's report will comply in form and substance with Accuray's reporting requirements, as they are determined by Accuray and communicated to Agent in writing from time to time.

    3.22.2.

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

    3.22.3.

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

    3.23.

    Compliance with Laws.
    
    

    3.23.1.

    Within the Territory.     When Products are being shipped to Customer, unless the particular Purchase Contract provides otherwise, Agent shall be responsible for informing Accuray of all applicable import duties and other import, licensing and immigration formalities which must be complied with in order for the Products to be lawfully imported into the Territory or the Services to be lawfully performed in the Territory. In addition, Agent will assist Accuray in ensuring compliance with regulatory and all other laws and regulations in the Territory. Agent will notify Accuray of any impending changes to Territory laws or regulatory requirements that pertain to, and may necessitate modifications to, the Products or Services.

    3.23.2.

    United States laws.     Agent understands that, because it is marketing and selling the Products and Services of Accuray, a company subject to the laws of the United States of

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• • • • • • America, Agent must, when carrying out its duties under this Agreement, avoid violations of certain of such laws. These include, but are not necessarily limited to, the following:

            3.23.2.1.

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

    • • • • 3.23.2.2.

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

    • • • • 3.23.2.3.

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

    • • 3.23.3.

    No Illegal Activity.     Agent and its Sub-Agents shall not engage in any illegal activities. Accuray will not be held responsible for any activities of Agent or its Sub-Agent that may be considered to be illegal. For example, Accuray does not support the practice of bribes or under-the-table payments. Agent will ensure a like clause is included in each agreement it has with its Sub-Agents, and monitor activities of its Sub-Agents in the Territory closely. In the event, Accuray deems that the good-will of its Products has been significantly or may potentially be affected by any such illegal activity, then Accuray reserves the right to terminate this Agreement for material breach under Section 5.3 (Termination for Cause), with no further liability to Agent, or its Sub-Agent. Accuray assumes no liability for any such practices and Agent hereby indemnifies and holds Accuray, its officers and assigns, harmless from any and all such activities of Agent or its Sub-Agents.

    3.24.

    Translations.     To the extent it deems necessary, Accuray will translate or localize any product specifications, user manuals and promotional literature Accuray has provided to Agent. If Accuray performs such translation, Accuray may, at its sole option, charge Agent for the cost of translations. If Accuray does not elect to translate such materials, and Agent decides to do so on its own, Agent assumes all liability for as well as indemnifies and holds Accuray harmless from any and all issues and claims relating to such translations or localization. Accuray reserves the right to request review and modification of such translated materials.

    3.25.

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

    3.26.

    Competing Products.     During the Term of this Agreement, Agent will not sell, offer for sale, promote the sale of, distribute or represent in any way products or services which are competitive with the Products or Services.

4.     Compensation and Payment

• • 4.1.

    Compensation.     Except as otherwise provided herein, Agent's only compensation for its efforts on Accuray's behalf shall be the Commissions it earns on the sale of Products and Services, and Agent shall bear all of the expenses which it incurs in making those efforts.

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• • 4.2.

    Payment.     Agent shall be responsible for determining the creditworthiness of its Customers prior to submitting a Purchase Request to Accuray and will assist Accuray in collecting any payments due to Accuray from its Customers.

5.     Term and Termination

• • 5.1.

    Term.     The Term of this Agreement shall begin on the Effective Date and continue until                                      , unless extended or sooner terminated in accordance with this Section 5.

    5.2.

    Renewal.     This Agreement will be renewed for additional period of        year(s), if Agent has carried out its duties under this Agreement, including meeting the minimum volume of sales set forth in Exhibit B, as updated in accordance with the following, and Accuray Sales & Marketing Department reasonably believes that the Agent is following Accuray's market strategies. Accuray and Agent will meet approximately one hundred eighty (180) days prior to the termination date and agree in writing upon a volume of business, a number of signed Purchase Contracts with Customers, and any other terms, for the subsequent renewal period. The volume of business and number of signed Purchase Contracts with Customers for each renewal period shall reflect an increase in units over the numbers determined for the previous period, unless Accuray reasonably determines at its sole discretion that market conditions would not so permit.

    5.3.

    Termination for Cause.     Either party may terminate this Agreement if the other party commits a material breach of this Agreement and fails to cure it within forty-five (45) days after written notice of the breach is given by the non-breaching party, provided that, as to a breach which cannot be fully cured within forty-five (45) days, then the parties shall agree in writing on a resolution plan and a reasonable timeline for such cure period, and that breach shall be deemed timely cured if the cure is completed within the agreed upon timeline. The effective date of termination shall be the date of expiration of the cure period without a cure having occurred.

    5.4.

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

    5.5.

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

    5.6.

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

    5.6.1.

    Sales in Process.     This Section 5.6.1 shall only apply in cases of Termination Without Cause (Section 5.4) and Termination Upon Change in Control (Section 5.5).
    
    

    5.6.1.1.

    Accuray will accept all Purchase Requests submitted by Agent within the three (3) months following the effective date of termination;

    5.6.1.2.

    For Purchase Contracts accepted by Accuray and based on Purchase Requests submitted prior to the effective date of termination, Agent shall receive its full Commission;

    5.6.1.3.

    For Purchase Contracts accepted by Accuray and based on Purchase Requests submitted during the three (3) month period following the effective date of

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• • • • • • • • termination, Agent shall receive its Commission, paid in accordance with Sections 3.9 (Payment) and 3.10 (Commission) above, on a pro-rated basis as follows:

                5.6.1.3.1.

    For Purchase Contracts signed by the Customer and accepted by Accuray within three (3) months following the effective date of termination, Agent shall receive 80% of its Commission, paid in accordance with Sections 3.9 (Payment) and 3.10 (Commission) above;

    • • • • • • 5.6.1.3.2.

    For Purchase Contracts signed by the Customer and accepted by Accuray within six (6) months following the effective date of termination, Agent shall receive 60% of its Commission, paid in accordance with Sections 3.9 (Payment) and 3.10 (Commission) above; and

    • • • • • • 5.6.1.3.3.

    For Purchase Contracts signed by the Customer and accepted by Accuray within nine (9) months following the effective date of termination, Agent shall receive 40% of its Commission, paid in accordance with Sections 3.9 (Payment) and 3.10 (Commission) above; and

    • • 5.6.2.

    Transition of Activities.     Accuray and Agent agree to negotiate in good faith an orderly transition of Agent's sales rights and activities and Agent agrees to assist in the transition.

    • • 5.6.3.

    Pending Obligations.     Each party must still fulfill any obligations, including but not limited to pending Purchase Requests, accrued on or before the effective date of such termination.

    5.7.

    Termination Transition Assistance.     Immediately following termination, as applicable, Agent shall transfer to Accuray upon Accuray's request: Accuray's parts inventory, which Accuray will repurchase at its original cost; any regulatory clearances, licenses or permits obtained for conduct of the business in Territory; any Confidential Information; and other items as will be negotiated in good faith between the parties. Furthermore, the parties agree to cooperate fully with the other for any reasonable transition assistance required in the case of termination or expiration of this Agreement. Q: Check with Doug K. re storage/stocking of spare parts by Agent.

    5.8.

    Agent's Right to Support.     If Agent has continuing obligations to support Customers, Accuray will continue to provide support to Agent for it to effectively support such Customers.

    5.9.

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

    5.10.

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

    5.11.

    Repurchase of Parts and Tools.     Within a reasonable time after the effective date of termination, Agent can sell all parts either to Accuray or Accuray's designated agent in the Territory all parts and tools owned by Agent, which may still commercially reasonably be used to service a CyberKnife in the Territory, at Agent's cost, without profit. Q: Check with Doug K. re storage/stocking of spare parts by Agent.

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6.     Dispute Resolution

• • 6.1.

    Applicable Law.     This Agreement shall be subject to and controlled by the laws of the State of California, not including either the choice of law/conflict of laws rules of California or international treaties (such as the U.N. Convention on Contracts for the International Sale of Goods) which would otherwise be applicable in California. Agent hereby agrees and submits to a venue in the State of California.

    6.2.

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

    6.3.

    Process.     Any controversy, claim or dispute arising out of or relating to this Agreement, including without limitation, the construction, interpretation, validity, enforcement, performance, lack or failure of performance or breach of this Agreement, or the rights, duties or liabilities of a party under this Agreement, that cannot be resolved by agreement of the parties within forty-five (45) days of the matter being raised in writing, and either party wishes to pursue the matter, the controversy, claim or dispute shall be referred to further dispute resolution processes in accordance with Exhibit F.

    6.4.

    Confidential Information.     Any breach of Accuray or Agent intellectual property or confidential information as described in Section 7 (Confidentiality) below or related obligations of this Agreement will cause the injured party irreparable harm for which money damages shall be an inadequate remedy and difficult to ascertain. Consequently, notwithstanding anything else in this Agreement to the contrary, in the event of any such threatened or actual breach, the injured party will be entitled to seek equitable relief in any court having jurisdiction on any claim based upon the actual or imminent misuse or unauthorized disclosure of the injured party's intellectual property or confidential information, including preliminary injunctions restraining such breach and specific performance of the other party's obligations and covenants in such sections. Such equitable relief shall be in addition, and without prejudice, to any other remedies available to the injured party at law or under this Agreement for any such breach or threatened breach. If the injured party seeks injunctive relief, such action shall not constitute a waiver of the provisions of this Agreement to arbitrate, which shall continue to govern any and every dispute between the parties including, without limitation, the right of damages, permanent injunctive relief, and any other remedy at law or in equity.

7.     Confidentiality.

• • 7.1.

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

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• • 7.2.

    Exclusions.     The obligations in Section 7.3 will not apply to the extent any information: (i) is or becomes generally known to the public through no fault of or breach of this Agreement by the receiving party; (ii) was rightfully in the receiving party's possession at the time of disclosure, without an obligation of confidentiality; (iii) is independently developed by the receiving party without use of the disclosing party's Confidential Information; or (iv) is rightfully obtained by the receiving party from a third party without restriction on use or disclosure.

    7.3.

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

8.     Indemnities.

• • 8.1.

    Accuray Indemnity.     Accuray will defend or settle any action brought against Agent to the extent that it is based upon a third-party claim that a Product, as provided by Accuray to Customer under this Agreement, infringes any United States patent or any copyright or misappropriates any trade secret, and will pay any costs and damages made in settlement or awarded against Agent in final judgment resulting from any such claim, provided that Agent: (i) gives Accuray prompt notice of any such claim; (ii) gives Accuray sole control of the defense and any related settlement of any such claim; and (iii) gives Accuray, at Accuray's expense, all reasonable information, assistance and authority in connection with the foregoing. Accuray will not be bound by any settlement or compromise that Agent enters into without Accuray's express prior written consent.

    8.2.

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

    8.3.

    Injunctions.     If Agent's rights to market and sell a Product under the terms of this Agreement is, or in Accuray's opinion is likely to be, enjoined due to the type of claim specified in Section 8.1 (Accuray Indemnity), then Accuray may, at its sole option and

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• • • • expense: (i) procure for Agent the right to continue to market and sell such Product under the terms of this Agreement; (ii) replace or modify such Product so that it is non-infringing; or (iii) if options (i) and (ii) above cannot be accomplished despite Accuray's reasonable efforts, then Accuray may terminate Agent's rights and Accuray's obligations hereunder with respect to such Product.

    8.4.

    Indemnity Exclusions.     Accuray will have no obligation under Sections 8.1 (Accuray Indemnity) or 8.2 (Products Liability Indemnity) for any third-party claim to the extent that such claim results from: (i) representations from Agent regarding use of any Products not in accordance with Accuray's written product specifications; (ii) representations from Agent regarding use or combination of the Products with other items, such as other equipment, processes, programming applications or materials not furnished by Accuray; (iii) compliance by Accuray with Agent's or Agent's Customer's designs, specifications or instructions; (iv) representations from Agent regarding modifications to a Product other than by or at the express written direction of Accuray; (v) Agent's failure to provide to Customer updated or modified written product specifications provided by Accuray; (vi) Agent's marketing, sale or distribution of a Product other than in accordance with this Agreement or (vii) Agents contracts with other manufacturers, including Elekta and manufacturers of products and services that compete with Accuray. The foregoing clauses (i) to (vii) are referred to collectively as "Indemnity Exclusions".

    8.5.

    Limitation.     THE FOREGOING PROVISIONS OF THIS SECTION 8 SET FORTH ACCURAY'S SOLE AND EXCLUSIVE LIABILITY AND AGENT'S SOLE AND EXCLUSIVE REMEDY FOR ANY CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OR PROPRIETARY RIGHTS OF ANY KIND OR PRODUCTS LIABILITY.

    8.6.

    Agent Indemnity.     Agent will defend or settle, indemnify and hold Accuray harmless from any liability, damages and expenses (including court costs and reasonable attorneys' fees) arising out of or resulting from any third-party claim based on or otherwise attributable to: (i) Agent's acts or omissions; (ii) any misrepresentations made by Agent with respect to Accuray or the Products or Services; or (iii) an Indemnity Exclusion.

9.     Liability.

• • 9.1.

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

    9.2.

    Total Liability.     ACCURAY'S TOTAL LIABILITY TO AGENT UNDER THIS AGREEMENT, FROM ALL CAUSES OF ACTION AND UNDER ALL THEORIES OF LIABILITY, WILL BE LIMITED TO THE COMMISSIONS ACTUALLY EARNED BY

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• • • • AGENT UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTH PERIOD PRECEDING THE DATE A CLAIM FOR LIABILITY ARISES HEREUNDER.

    9.3.

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

10.   Miscellaneous Provisions

• • 10.1.

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

    10.2.

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

    10.3.

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

    10.4.

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

    10.5.

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

• • 10.6.

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

    10.7.

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

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• • 10.8.

    Survival.     The expiration or termination of this Agreement for any reason will not release either party from any liabilities or obligations set forth herein which (a) the parties have expressly agreed will survive any such expiration or termination; or (b) remain to be performed or by their nature would be intended to be applicable following any such termination or expiration. In addition to the foregoing, the following provisions shall survive any termination or expiration of this Agreement: Agreement: Section 2.7 (Warranty); Section 2.8.3 (Warranty Exclusions); Section 3.17 (Warranty); Section 3.20 (First Line Field Service); Section 3.25 (Insurance); Section 5.6 (Effect of Termination); Section 5.7 (Termination Transition Assistance); Section 5.8 (Agent's Right to Support); Section 6 (Dispute Resolution); Section 7 (Confidentiality); Section 8 (Indemnities); Section 9 (Liability) and Section 10 (Miscellaneous Provisions).

    10.9.

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

    10.10.

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

    10.11.

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

    10.12.

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

    10.13.

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

SIGNATURE PAGE FOLLOWS

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Effective Date by their duly authorized representatives.

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

SIGNATURE PAGE TO INTERNATIONAL SALES AGENT AGREEMENT

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EXHIBIT A

PRODUCTS AND SERVICES (INCLUDING CURRENT PRICING)

BASE CYBERKNIFE® G4 CONFIGURATION—ACCURAY LIST PRICE

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19

20

21

22

BASE CYBERKNIFE® G3 CONFIGURATION—ACCURAY LIST PRICE

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24

25