EXHIBIT 99.1

EMPLOYEE BENEFITS ALLOCATION AGREEMENT
AMONG
VARIAN ASSOCIATES, INC.,
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
AND
VARIAN, INC.
Dated as of

April 2, 1999

TABLE OF CONTENTS

                                                                                                               PAGE
ARTICLE I    DEFINITIONS......................................................................................   1

         Section 1.01.       Definitions......................................................................   1

ARTICLE II   GENERAL EMPLOYMENT MATTERS.......................................................................   2

         Section 2.01.       General Obligations..............................................................   2

         Section 2.02.       Initial Compensation of Active Employees.........................................   2

         Section 2.03.       No Additional Employment Rights Created..........................................   2

         Section 2.04.       Corporate and Transition Employees...............................................   2

         Section 2.05.       Retiree Payments.................................................................   3

ARTICLE III  UNITED STATES RETIREMENT AND PROFIT-SHARING PLAN BENEFITS........................................   3

         Section 3.01.       Varian Associates, Inc. Retirement and Profit-Sharing Program....................   3

         Section 3.02.       Establishment of Varian Semiconductor Equipment Associates, Inc. Defined
                             Contribution Plan................................................................   3

         Section 3.03.       Establishment of Varian, Inc. Defined Contribution Plan..........................   3

         Section 3.04.       Reimbursement and Indemnification................................................   4

ARTICLE IV   EMPLOYEE BENEFITS MATTERS OUTSIDE THE UNITED STATES..............................................   4

         Section 4.01.       Employee Benefits Matters Outside the United States..............................   4

ARTICLE V    EXECUTIVE COMPENSATION...........................................................................   5

         Section 5.01.       Supplemental Retirement Plan.....................................................   5

         Section 5.02.       Management Incentive Plan........................................................   5

         Section 5.03.       Long-Term Incentives.............................................................   5

         Section 5.04.       Deferred Cash Compensation.......................................................   5

         Section 5.05.       Restricted Stock Program.........................................................   5

         Section 5.06.       Options..........................................................................   5

         Section 5.07.       Restricted Stock.................................................................   7

ARTICLE VI   WELFARE BENEFITS.................................................................................   7

         Section 6.01.       Welfare Plans....................................................................   7

         Section 6.02.       Allocation and Discharge of Welfare Plan Liabilities.............................   7

ARTICLE VII  GENERAL..........................................................................................   7

         Section 7.01.       Post-Distribution Administration of Plans........................................   7

         Section 7.02.       Costs and Expenses...............................................................   7

         Section 7.03.       Sharing of Participant Information...............................................   8

ARTICLE VIII INDEMNIFICATION..................................................................................   8

         Section 8.01.       Rights and Obligations...........................................................   8

ARTICLE IX   DISPUTE RESOLUTION...............................................................................   8

         Section 9.01.       Distribution Agreement to Control................................................   8

TABLE OF CONTENTS
(CONTINUED)

                                                                                                               PAGE
ARTICLE X  MISCELLANEOUS.....................................................................................    8

     Section 10.01.      Complete Agreement; Construction....................................................    8

     Section 10.02.      Other Agreements....................................................................    8

     Section 10.03.      Counterparts........................................................................    8

     Section 10.04.      Survival of Agreements..............................................................    8

     Section 10.05.      Expenses............................................................................    8

     Section 10.06.      Notices.............................................................................    9

     Section 10.07.      Waivers.............................................................................   10

     Section 10.08.      Amendments..........................................................................   10

     Section 10.09.      Assignment..........................................................................   10

     Section 10.10.      Successors and Assigns..............................................................   10

     Section 10.11.      Termination.........................................................................   10

     Section 10.12.      No Third Party Beneficiaries........................................................   10

     Section 10.13.      Titles and Headings; Interpretation.................................................   10

     Section 10.14.      Governing Law.......................................................................   10

     Section 10.15.      Severability........................................................................   10

EMPLOYEE BENEFITS ALLOCATION AGREEMENT

THIS EMPLOYEE BENEFITS ALLOCATION AGREEMENT is made and entered into as of this 2nd day of April, 1999 by and among Varian Associates, Inc., a Delaware corporation ("Varian" or "HCS"), Varian Semiconductor Equipment Associates, Inc., a Delaware corporation ("SEB"), and Varian, Inc., a Delaware corporation ("IB").

WHEREAS, pursuant to the terms of that certain Amended and Restated Distribution Agreement by and among Varian, SEB and IB and dated as of January 14, 1999 (the "Distribution Agreement"), the parties have entered into this Agreement regarding certain employment, compensation and benefit matters occasioned by the Distributions.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement and the Distribution Agreement, each of the parties hereto, on behalf of itself and each other member of its Group, hereby agrees as follows:

ARTICLE I

DEFINITIONS

any of its Subsidiaries at the Effective Time, would be Active Employees of the Semiconductor Equipment Group, determined on a basis consistent with the determination of the Active Employees of such Group, including without limitation persons who were employees of the Thin Film Systems business at the time of or prior to its disposition.

ARTICLE II

GENERAL EMPLOYMENT MATTERS

including the cost of any claim, suit or dispute relating to such severance or termination, shall constitute Transaction Expenditures.

ARTICLE III

UNITED STATES RETIREMENT AND PROFIT-SHARING PLAN BENEFITS

respect to whom the Varian Profit-Sharing Plan maintains an account as of the Effective Time. The trustee of the IB DC Plan shall accept such rollovers in accordance with its standard procedures, except that the trustee of the IB DC Plan shall accept the direct rollovers described in the preceding sentence on an in kind basis.

ARTICLE IV

EMPLOYEE BENEFITS MATTERS OUTSIDE THE UNITED STATES

ARTICLE V

EXECUTIVE COMPENSATION

number and exercise price of such options shall be calculated consistent with the principles governing Converted Options, using the respective prices as of the Distribution Date. Current Options and Adjusted Options held by employees whose employment was or is terminated in connection with the Distributions and who elect a conversion pursuant to this Section 5.06(g) will be fully vested as of the Effective Time or, if later, the employee's final work day. Current Options and Adjusted Options held by employees whose employment was or is terminated in connection with the Distributions but who do not elect a conversion pursuant to this Section 5.06(g) will terminate according to their terms without any accelerated vesting of Current Options or Adjusted Options not vested as of the Distribution Date or the employee's last work day, as applicable.

ARTICLE VI

WELFARE BENEFITS

ARTICLE VII

GENERAL

ARTICLE VIII

INDEMNIFICATION

ARTICLE IX

DISPUTE RESOLUTION

ARTICLE X

MISCELLANEOUS

before the Distribution Date) in connection with the preparation, execution, delivery and implementation of this Agreement and the consummation of the transactions contemplated hereby shall be charged to and paid by Varian.

If to HCS:

Varian Medical Systems, Inc.
3100 Hansen Way
Palo Alto, California 94304-1030
Attn: Chief Financial Officer

with a copy to:

Varian Medical Systems, Inc.
3100 Hansen Way
Palo Alto, California 94304-1030
Attn: General Counsel

If to IB:

Varian, Inc.
3120 Hansen Way
Palo Alto, California 94303-1030
Attn: Chief Financial Officer

with a copy to:

Varian, Inc.
3120 Hansen Way
Palo Alto, California 94303-1030
Attn: General Counsel

If to SEB:

Varian Semiconductor Equipment Associates, Inc. 35 Dory Road
Gloucester, Massachusetts 01930
Attn: Chief Financial Officer
Telecopy (978) 281-3152

with a copy to:

Varian Semiconductor Equipment Associates, Inc. 35 Dory Road
Gloucester, Massachusetts 01930
Attn: General Counsel
Telecopy: (978) 281-3152

or at such other address as shall be furnished by any of the parties in a Notice. Any Notice shall be deemed to have been duly given or made when the Notice is received.

Section 10.08. Amendments. This Agreement may be amended or supplemented, or its provisions waived, only by an agreement in writing signed by each of the parties.

(b) Except as expressly provided in paragraph (a) above, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assignable, directly or indirectly, by any party without the prior written consent of the other parties, and any attempt to so assign without such consent shall be void.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.

By: /s/ Joseph B. Phair
    -------------------
Name:  Joseph B. Phair
Title: Secretary

VARIAN ASSOCIATES, INC.

By: /s/ Robert A. Lemos
    -------------------
Name:  Robert A. Lemos
Title: Vice President Finance and
       Chief Financial Officer

VARIAN, INC.

By: /s/ Arthur W. Homan
    -------------------
Name:  Arthur W. Homan
Title: Secretary

EXHIBIT 99.2

INTELLECTUAL PROPERTY AGREEMENT

AMONG

VARIAN ASSOCIATES, INC.,

VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.

AND

VARIAN, INC.

Dated as of

April 2, 1999

TABLE OF CONTENTS

                                                                                                                   PAGE
ARTICLE I             DEFINITIONS................................................................................   1

         Section 1.01.    General................................................................................   1

ARTICLE II            OWNERSHIP OF INTELLECTUAL PROPERTY.........................................................   2

         Section 2.01.    General Principles of Allocation and Recognition.......................................   2

         Section 2.02.    Distribution of Rights.................................................................   3

         Section 2.03.    Rights Arising in Future...............................................................   4

         Section 2.04.    No Warranties..........................................................................   4

         Section 2.05.    Recognition of Non-Party Rights........................................................   4

         Section 2.06.    Effectuating Transfer of Rights........................................................   5

         Section 2.07.    Limitations and Obligations in Jointly Owned Intellectual Property.....................   5

ARTICLE III           CROSS LICENSING OF RIGHTS..................................................................   5

         Section 3.01.    Grants by Varian.......................................................................   5

         Section 3.02.    Grants by IB...........................................................................   6

         Section 3.03.    Grants by SEB..........................................................................   6

         Section 3.04.    Limitations of Rights..................................................................   6

         Section 3.05.    Restrictions on Sublicensing...........................................................   6

ARTICLE IV            TRADEMARKS OF VARIAN ASSOCIATES, INC.......................................................   6

         Section 4.01.    Grant of Licenses......................................................................   6

         Section 4.02.    Protection of Licensed Property........................................................   7

         Section 4.03.    Costs and Administration...............................................................   7

         Section 4.04.    Extending the Rights in the Marks......................................................   7

         Section 4.05.    Reducing the Rights in the Marks.......................................................   7

         Section 4.06.    Non-use or Abandonment of the Marks....................................................   7

         Section 4.07.    Limitations on Concurrent Use..........................................................   8

         Section 4.08.    Notice and Publicity...................................................................   8

         Section 4.09.    Domain Name and Internet Hyperlinks....................................................   8

         Section 4.10.    Duty to Avoid Confusion................................................................   8

         Section 4.11.    Consent to Registration................................................................   8

         Section 4.12.    Limitations on Sublicensing............................................................   9

         Section 4.13.    Transition Period......................................................................   9

ARTICLE V             COVENANTS..................................................................................   9

         Section 5.01.    Further Assurances.....................................................................   9

         Section 5.02.    Cooperation............................................................................   9

         Section 5.03.    Intellectual Property Records..........................................................   9

ARTICLE VI            INDEMNIFICATION............................................................................   9

         Section 6.01.    Rights and Obligations.................................................................   9

TABLE OF CONTENTS
(CONTINUED)

                                                                                                                 PAGE
ARTICLE VII           DISPUTE RESOLUTION........................................................................ 10

         Section 7.01.    Distribution Agreement to Control..................................................... 10

ARTICLE VIII          MISCELLANEOUS............................................................................. 10

         Section 8.01.    Complete Agreement; Construction...................................................... 10

         Section 8.02.    Other Agreements...................................................................... 10

         Section 8.03.    Counterparts.......................................................................... 10

         Section 8.04.    Survival of Agreements................................................................ 10

         Section 8.05.    Expenses.............................................................................. 10

         Section 8.06.    Notices............................................................................... 10

         Section 8.07.    Waivers............................................................................... 11

         Section 8.08.    Amendments............................................................................ 11

         Section 8.09.    Assignment............................................................................ 12

         Section 8.10.    Successors and Assigns................................................................ 12

         Section 8.11.    Third Party Beneficiaries............................................................. 12

         Section 8.12.    Schedules............................................................................. 12

         Section 8.13.    Titles and Headings; Interpretation................................................... 12

         Section 8.14.    Governing Law......................................................................... 12

         Section 8.15.    Severability.......................................................................... 12

         Section 8.16.    Subsidiaries.......................................................................... 12

Exhibit A.......................................................................................................A-1

INTELLECTUAL PROPERTY AGREEMENT

THIS INTELLECTUAL PROPERTY AGREEMENT (this "Agreement") is made and entered into as of this 2nd day of April, 1999, between and among VARIAN ASSOCIATES, INC., a Delaware corporation ("Varian"), VARIAN, INC., a Delaware corporation ("IB"), and VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC., a Delaware corporation ("SEB").

RECITALS

WHEREAS, Varian, directly and through its Subsidiaries and Affiliates, currently owns various intellectual property rights used in connection with a number of businesses, which businesses are described in the Amended and Restated Distribution Agreement dated as of January 14, 1999, among Varian, IB and SEB (the "Distribution Agreement"); and

WHEREAS, the parties have determined that this Agreement is appropriate in order to effectuate the purposes of the Distribution Agreement as described therein, and in order to promote a clear understanding of their respective intellectual property rights after the Distributions (as defined in the Distribution Agreement) contemplated thereby;

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein and therein, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

(i) all United States and foreign patents, patent applications (including any continuations, continuation-in-part and divisionals), patent applications under preparation, invention disclosures and invention disclosures under preparation;

(ii) all United States and foreign registered and unregistered copyrights and mask works, including applications and applications under preparation therefor;

(iii) all United States and foreign registered and unregistered trademarks, trade names, trade dress, service marks, services names, artwork, logos and other marks, including applications and applications under preparation therefor;

(iv) all trade secrets, know-how, ideas, concepts, discoveries, improvements, processes, procedures, methods, recipes, formulae, data and specifications;

(v) all product-related computer programs and other software (in executable or source code format), including operating software, applications, network software, firmware, middleware, design software, design tools, test and diagnostic software, systems configurations; and

(vi) all documentation, schematics, drawings, designs, manuals, reports, records, instructions, studies, surveys, plans, books or other written materials (whether in hard copy or magnetic form) relating to or including any of the (i) through (v) above.

ARTICLE II

OWNERSHIP OF INTELLECTUAL PROPERTY

(a) Without limiting any obligation or Liability of Varian under the Distribution Agreement or any other Ancillary Agreement, and subject to the provisions of Article III below, after the Distributions, Varian (or another member of the Health Care Systems Group) shall own all rights, title and/or interest in all Intellectual Property that: (i) originated primarily with the conduct of the Health Care Systems Business or primarily in connection with the Health Care Systems Assets; (ii) was obtained by, exclusively or primarily for the conduct of, the Health Care Systems Business or in connection with the Health Care Systems Assets; (iii) was developed exclusively or primarily for the conduct of the Health Care Systems Business or in connection with the Health Care Systems Assets; (iv) arose from funding by, exclusively or primarily for the benefit of the conduct of, the Health Care Systems Business or in connection with the Health Care Systems Assets; (v) as of the Effective Time, is used or held for use exclusively or primarily for the conduct of the Health Care Systems Business or in connection with the Health Care Systems Assets; and/or (vi) as of the Effective Time, is allocated to HCS by mutual agreement of the parties (collectively "HCS Intellectual Property"). If a conflict exists between or among any of the clauses (i) through (iv) set forth in this paragraph or in paragraph (b) or paragraph (c) of this Section 2.01, on the one hand, and clause
(v) of this paragraph, on the other hand, then clause (v) shall prevail.

(b) Without limiting any obligation or Liability of IB under the Distribution Agreement or any other Ancillary Agreement, and subject to the provisions of Article III below, after the Distributions, IB (or another member of the Instruments Group) shall own all rights, title and/or interest in all Intellectual Property that: (i) originated primarily with the conduct of the Instruments Business or primarily in connection with the Instruments Assets;
(ii) was obtained by, exclusively or primarily for the conduct of, the Instruments Business or in connection with the Instruments Assets; (iii) was developed exclusively or primarily for the conduct of the Instruments Business or in connection with the Instruments Assets; (iv) arose from funding by, exclusively or primarily for the benefit of the conduct of, the Instruments Business or in connection with the Instruments Assets; (v) as of the Effective Time, is used or held for use exclusively or primarily for the conduct of the Instruments Business or in connection with the Instruments Assets; and/or (vi) as of the Effective Time, is allocated to IB by mutual agreement of the parties (collectively "IB Intellectual Property"). If a conflict exists between or among any of the clauses (i) through (iv) set forth in this paragraph or in paragraph
(a) or in paragraph (c) of this Section 2.01, on the one hand, and clause (v) of this paragraph, on the other hand, then clause (v) shall prevail.

(c) Without limiting any obligation or Liability of SEB under the Distribution Agreement or any other Ancillary Agreement, and subject to the provisions of Article III below, after the Distributions, SEB (or another member of the Semiconductor Equipment Group) shall own all rights, title and/or interest in all Intellectual Property that: (i) originated primarily with the conduct of the Semiconductor Equipment Business or primarily in connection with the Semiconductor Equipment Assets; (ii) was obtained by, exclusively or primarily for the conduct of, the Semiconductor Equipment Business or in connection with the Semiconductor Equipment Assets; (iii) was developed exclusively or primarily for the conduct of the Semiconductor Equipment Business or in connection with the Semiconductor Equipment Assets; (iv) arose from funding by, exclusively or primarily for the benefit of the conduct of, the Semiconductor Equipment Business or in connection with the Semiconductor Equipment Assets; (v) as of the Effective Time, is used or held for use exclusively or primarily for the conduct of the Semiconductor Equipment Business or in connection with the Semiconductor Equipment Assets; and/or (vi) as of the Effective Time, is allocated to SEB by mutual agreement of the parties (collectively "SEB Intellectual Property"). If a conflict exists between or among any of the clauses (i) through (iv) set forth in this paragraph or in paragraph (a) or in paragraph (b) of this Section 2.01, on the one hand, and clause (v) of this paragraph, on the other hand, then clause (v) shall prevail.

(d) Subject to the provisions of Section 2.01(a), (b) and (c) above, any Intellectual Property that: (i) did not originate primarily with the conduct of the business or primarily in connection with the Assets of any Group;
(ii) was not obtained by, exclusively or primarily for the conduct of, any Group or in connection with the Assets of any Group; (iii) was not developed exclusively or primarily for the conduct of the business or in connection with the Assets of any Group; (iv) did not arise from funding by, exclusively or primarily for the benefit of any Group or in connection with the Assets of any Group; (v) is not used or held for use exclusively or primarily for the conduct of the business or in connection with the Assets of any Group as of the Effective Time; (vi) was not sold or transferred to a third party without the retention of any rights; and (vii) has not been allocated to one of the parties under this Agreement (the Intellectual Property satisfying each of the foregoing clauses (i)-(vii) hereinafter, collectively, "Residual Intellectual Property"), shall be jointly owned by the parties.

(e) Notwithstanding the provisions in Section 2.01(a), (b), (c) and (d) above, effective as of the Effective Time, the parties acknowledge that joint ownership in the rights, title and/or interest in certain Intellectual Property specified in or pursuant to this Agreement may be held by two or more parties ("Specified Intellectual Property"). The Specified Intellectual Property may not be licensed, assigned or otherwise transferred by a first party having joint ownership rights therein to any competitor of a second party also having joint ownership rights therein without the prior written consent of such second party.

(a) Varian hereby irrevocably transfers and assigns, effective as of the Effective Time, to IB the ownership of all rights, title and/or interest in the IB Intellectual Property, a non-exclusive description of which is set forth in Schedule 2.02(a). In addition, Varian hereby irrevocably transfers and

assigns to IB, effective as of the Effective Time, joint ownership of all rights, title and/or interest in the Specified Intellectual Property, an exclusive description of which is set forth in Schedule 2.02(d), subject to the provisions of Section 2.07 below.

(b) Varian hereby irrevocably transfers and assigns, effective as of the Effective Time, to SEB the ownership of all rights, title and/or interest in the SEB Intellectual Property, a non-exclusive description of which is set forth in Schedule 2.02(b). In addition, Varian hereby irrevocably transfers and assigns to SEB, effective as of the Effective Time, joint ownership of all rights, title and/or interest in the Specified Intellectual Property, an exclusive description of which is set forth in Schedule 2.02(d), subject to the provisions of Section 2.07 below.

(c) Varian hereby irrevocably retains, effective as of the Effective Time, the ownership of all rights, title and/or interest in the HCS Intellectual Property, a non-exclusive description of which is set forth in Schedule 2.02(c), and subject to the provisions of Article IV below, in the "Varian" and "VA logo" trademarks. In addition, Varian hereby retains, effective as of the Effective Time, joint ownership of all rights, title and/or interest in the Specified Intellectual Property, an exclusive description of which is set forth in Schedule 2.02(d), subject to the provisions of Section 2.07 below.

(d) Varian hereby irrevocably transfers and assigns to IB and SEB, and retains for itself, effective as of the Effective Time, joint ownership of all rights, title and/or interest in the Residual Intellectual Property, subject to the provisions of Section 2.07 below. By mutual written agreement at any time, the parties may re-designate any Residual Intellectual Property as being either HCS, IB or SEB Intellectual Property or as Specified Intellectual Property. Any party renouncing its undivided joint ownership rights in any Residual Intellectual Property in favor of another party or parties, through such written agreement shall have continuing license rights thereto pursuant to Article III.

(e) Without limiting any obligation or Liability of any party under the Distribution Agreement or any other Ancillary Agreement, and subject to the provisions of Article III below, after the Effective Time, all rights, title and/or interest in all Intellectual Property identified on Schedules 2.02(a) through (d) shall be owned solely or jointly by or vested in the party indicated therein. In the event that any party believes that certain Intellectual Property has been improperly designated to be either HCS Intellectual Property, IB Intellectual Property, SEB Intellectual Property, Residual Intellectual Property or Specified Intellectual Property, such party may seek the agreement of the other parties to a re-designation of such Intellectual Property or have the issue resolved pursuant to Article VII.

(f) In the event of any inconsistency between Schedules 2.02
(a), (b), (c) and/or (d) and Section 2.01, the definitions set forth in Section 2.01 shall prevail.

Effective Time. The provisions of Section 2.14 of the Distribution Agreement shall govern the rights and obligations of the parties with regard to obtaining any necessary Consents and taking other actions relating to such transfers of rights.

(a) Each party shall have the unlimited right to use the Residual Intellectual Property and/or Specified Intellectual Property, as applicable, except to make, have made or sell competing products in the Fields of the other parties, as set forth in Article I above.

(b) The parties shall share equally in all costs and fees, if any, associated with obtaining, perfecting and/or maintaining the Residual Intellectual Property and the Specified Intellectual Property, to the extent that each party has an ownership interest therein. The parties shall designate a party, by mutual agreement, to have administrative responsibility for tracking, coordinating and submitting payment of such costs and fees ("Designated Party"). The Designated Party that is responsible for a particular cost or fee shall deliver, at least forty-five (45) days before such cost or fee becomes due, an invoice to the other party or parties ("Invoiced Party") requesting submission of its or their share(s) of such cost or fee. The Invoiced Party shall have thirty (30) days from the date of the receipt to pay such invoice. If an Invoiced Party, at any time, does not pay in full the invoiced amount in a timely manner, the Designated Party shall send a written notice, by facsimile transmission or overnight mail, to such Invoiced Party requesting payment of such invoice within fifteen (15) business days. The failure by the Invoiced Party to make such payment shall constitute abandonment of all rights in the Residual Intellectual Property or Specified Intellectual Property relating to such payment and shall result in such rights shall be reapportioned equally between the remaining parties. If a Designated Party decides to abandon its rights in certain Residual Intellectual Property or Specified Intellectual Property for which it has administrative responsibility, such Designated Party shall provide the other parties with written notice of its decision at least sixty (60) days prior to the due date of any cost or fee, and the remaining parties shall confer to determine and thereafter designate the new Designated Party. The effect of such abandonment shall be to remove the restriction set forth in Section 2.07(a) above and to permit the other party, or parties, retaining rights in the Residual Intellectual Property or Specified Intellectual Property to enforce those rights against the abandoning party.

(c) Each party shall be responsible for policing its rights in the Residual Intellectual Property and Specified Intellectual Property, as applicable, against Infringement in its respective Field, as set forth in Article I above.

ARTICLE III

CROSS LICENSING OF RIGHTS

(a) Varian hereby grants to IB a limited, non-exclusive, perpetual, royalty-free, worldwide license under the HCS Intellectual Property (except for the United States and foreign registered and unregistered trademarks, trade names, trade dress, service marks, services names, artwork, logos and other marks, including applications and applications under preparation therefor, used primarily in the Health Care Systems Business) to make, have made, use and sell products only in the Field of Instruments, subject to the provisions of this Article III.

(b) Varian hereby grants to SEB a limited, non-exclusive, perpetual, royalty-free, worldwide license under the HCS Intellectual Property (except for the United States and foreign registered and unregistered trademarks, trade names, trade dress, service marks, services names, artwork, logos and

other marks, including applications and applications under preparation therefor, used primarily in the Health Care Systems Business) to make, have made, use and sell products only in the Field of Semiconductor Equipment, subject to the provisions of this Article III.

(a) IB hereby grants to Varian a limited, non-exclusive, perpetual, royalty-free, worldwide license under the IB Intellectual Property (except for the United States and foreign registered and unregistered trademarks, trade names, trade dress, service marks, services names, artwork, logos and other marks, including applications and applications under preparation therefor, used primarily in the Instruments Business) to make, have made, use and sell products only in the Field of Health Care Systems, subject to the provisions of this Article III.

(b) IB hereby grants to SEB a limited, non-exclusive, perpetual, royalty-free, worldwide license under the IB Intellectual Property (except for the United States and foreign registered and unregistered trademarks, trade names, trade dress, service marks, services names, artwork, logos and other marks, including applications and applications under preparation therefor, used primarily in the Instruments Business) to make, have made, use and sell products only in the Field of Semiconductor Equipment, subject to the provisions of this Article III.

(a) SEB hereby grants to Varian a limited, non-exclusive, perpetual, royalty-free, worldwide license under the SEB Intellectual Property (except for the United States and foreign registered and unregistered trademarks, trade names, trade dress, service marks, services names, artwork, logos and other marks, including applications and applications under preparation therefor, used primarily in the Semiconductor Equipment Business) to make, have made, use and sell products only in the Field of Health Care Systems, subject to the provisions of this Article III.

(b) SEB hereby grants to IB a limited, non-exclusive, perpetual, royalty-free, worldwide license under the SEB Intellectual Property (except for the United States and foreign registered and unregistered trademarks, trade names, trade dress, service marks, services names, artwork, logos and other marks, including applications and applications under preparation therefor, used primarily in the Semiconductor Equipment Business) to make, have made, use and sell products only in the Field of Instruments, subject to the provisions of this Article III.

ARTICLE IV

TRADEMARKS OF VARIAN ASSOCIATES, INC.

(a) Varian hereby grants to IB a limited, exclusive, perpetual, irrevocable, royalty-free, worldwide license to use the "Varian" and "VA logo" trademarks in the Field of Instruments, subject to the provisions of this Article IV.

(b) Varian hereby grants to SEB a limited, exclusive, perpetual, irrevocable, royalty-free, worldwide license to use the "Varian" and "VA logo" trademarks in the Field of Semiconductor Equipment, subject to the provisions of this Article IV.

(c) Varian hereby retains a limited, exclusive, perpetual,
[irrevocable,] royalty-free, worldwide right to use the name "Varian" and the "VA logo" trademarks in the Field of Health Care Systems, subject to the provisions of this Article IV.

(d) After the Effective Time, each of Varian, IB and SEB shall possess the right to use the "Varian" name or "VA logo" standing alone or by itself for use on products, advertising or marketing purposes, etc., subject to the provisions of this Article IV.

(a) If either IB or SEB abandons the Marks through non-use thereof, Varian shall provide the abandoning party with no less than thirty (30) days written notice of its intent to revoke such

party's rights to use such Marks. The noticed party may prevent such revocation by providing proof of its use within the past year or by resuming its use of any of the Marks within such thirty (30) day period, provided its use is on a continuous basis thereafter for not less than six (6) months. If, for any reason, Varian fails to provide such written revocation notice, either IB or SEB, as appropriate, may request, in writing, that Varian deliver such notice within fifteen (15) business days of receipt of such request. If Varian does not comply with such written request, either IB or SEB, as appropriate, shall have the right to provide such written revocation notice as the authorized agent of Varian.

(b) If Varian abandons the Marks through non-use thereof, either IB or SEB may provide Varian with written notice requiring that Varian execute an assignment of the ownership rights in the Marks to either IB or SEB, as appropriate, within forty-five (45) days of receiving such notice. A copy of such notice shall be provided to the party not initiating the procedure set forth in this paragraph. Varian may prevent its loss of ownership rights in and rights to use the Marks by providing proof of its use of the Marks within the past year or by resuming its use of any of the Marks within thirty (30) days after receipt of such notice, provided its use is on a continuous basis thereafter for not less than six (6) months. If Varian refuses to execute such assignment of ownership, the ownership rights in the Marks shall automatically pass to either IB or SEB, as appropriate, as the party sending such notice.

ARTICLE V

COVENANTS

ARTICLE VI

INDEMNIFICATION

ARTICLE VII

DISPUTE RESOLUTION

ARTICLE VIII

MISCELLANEOUS

If to HCS:

Varian Medical Systems, Inc.
3100 Hansen Way
Palo Alto, California 94304-1030

Attn: Chief Financial Officer

with a copy to:

Varian Medical Systems, Inc. 3100 Hansen Way
Palo Alto, California 94304-1030 Attn: General Counsel

If to IB:

Varian, Inc.
3120 Hansen Way
Palo Alto, California 94303-1030 Attn: Chief Financial Officer

with a copy to:

Varian, Inc.
3120 Hansen Way
Palo Alto, California 94303-1030 Attn: General Counsel

If to SEB:

Varian Semiconductor Equipment Associates, Inc. 35 Dory Road
Gloucester, Massachusetts 01930 Attn: Chief Financial Officer Telecopy: (978) 281-3152

with a copy to:

Varian Semiconductor Equipment Associates, Inc. 35 Dory Road
Gloucester, Massachusetts 01930 Attn: General Counsel
Telecopy: (978) 281-3152

or at such other address as shall be furnished by any of the parties in a Notice. Any Notice shall be deemed to have been duly given or made when the Notice is received.

Except as expressly provided herein, this Agreement may be amended or supplemented or its provisions waived only by an agreement in writing signed by each of the parties.

(b) Except as expressly provided in paragraph (a), neither this Agreement nor any of the rights, interests or obligations hereunder shall be assignable, directly or indirectly, by any party without the prior written consent of the other parties, and any attempt to so assign without such consent shall be void.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

VARIAN ASSOCIATES, INC.

By:  /s/ Robert A. Lemos
     --------------------------
Name      Robert A. Lemos
Title:    Vice President Finance and
          Chief Financial Officer

VARIAN SEMICONDUCTOR
EQUIPMENT ASSOCIATES, INC.

By:  /s/ Joseph B. Phair
     --------------------------
Name:     Joseph B. Phair
Title:    Secretary

VARIAN, INC.

By:  /s/ Arthur W. Homan
     --------------------------
Name:     Arthur W. Homan
Title:    Secretary

1. For the purposes of the definition "Field of Health Care Systems," the product markets of the Health Care Systems Business are defined as those products, equipment, processes and services used in:
(a) human, animal and cellular diagnostic and therapeutic applications using fluxes of energetic particles, including protons, photons, and electrons, or using thermal or acoustic energy; or
(b) irradiation and imaging of objects with fluxes of electrons or photons for industrial, commercial and research uses; including, without limitation, applications within radiation oncology, radiotherapy, medical oncology, X-ray tube technology, vascular therapy, and imaging technology other than imaging by magnetic resonance phenomena. For the purposes of the definition "Field of Health Care Systems," the product markets for the Health Care Systems Business shall not include: (i) products or equipment used in the formation or measurement of pressures that are very low in relation to ambient; and (ii) products or equipment used in imaging and selective analysis through techniques of magnetic resonance phenomena or optical spectroscopy.

2. For the purposes of the definition "Field of Instruments Business," the product markets of the Instruments Business are defined as those products, equipment, processes and services used in:

(a) analytical studies of compositions of matter and magnetic fields;
(b) imaging and selective analysis through techniques of magnetic resonance phenomena or optical spectroscopy;
(c) design and fabrication of printed circuit boards and circuit assembly; or
(d) formation and measurement of pressures that are very low in relation to ambient; including, without limitation, applications within analytical chemistry, chromatographic sciences, vacuum technology, electronics manufacturing, magnetic resonance imaging and medical diagnostics.

3. For the purposes of the definition "Field of Semiconductor Equipment," the product markets of the Semiconductor Equipment Business are defined as those products, equipment, processes and services used in:
(a) processing and manufacturing semiconductors; or
(b) modifying the properties of materials other than biological molecules using fluxes of ions; including, without limitation, applications in ion implantation. For the purposes of the definition "Field of Semiconductor Equipment," the product markets shall not include equipment or components used in the formation or measurement of pressures that are very low in relation to ambient.

EXHIBIT 99.3

TAX SHARING AGREEMENT

among

VARIAN ASSOCIATES, INC.,

VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.

and

VARIAN, INC.

TABLE OF CONTENTS

                                                                                                        PAGE
SECTION 1.    Definition of Terms...................................................................     1

SECTION 2.    Allocation of Tax Liabilities.........................................................     7

SECTION 3.    Proration of Taxes for Straddle Periods...............................................    10

SECTION 4.    Tax Contests..........................................................................    10

SECTION 5.    Tax Payments and Intercompany Billings................................................    14

SECTION 6.    Preparation and Filing of Tax Returns.................................................    17

SECTION 7.    Assistance and Cooperation............................................................    18

SECTION 8.    Tax Records...........................................................................    19

SECTION 9.    Effective Date; Termination of Prior Intercompany Tax Allocation Agreements...........    19

SECTION 10.   No Inconsistent Actions...............................................................    19

SECTION 11.   Survival of Obligations...............................................................    20

SECTION 12.   Employee Matters......................................................................    20

SECTION 13.   Treatment of Payments; Tax Gross Up...................................................    20

SECTION 14.   Disagreements.........................................................................    21

SECTION 15.   Late Payments.........................................................................    21

SECTION 16.   Expenses..............................................................................    21

SECTION 17.   Nonqualified Stock Options............................................................    21

SECTION 18.   General Provisions....................................................................    21

TAX SHARING AGREEMENT

This Agreement is entered into as of April 2, 1999 by and among Varian Associates, Inc., a Delaware corporation, to be renamed Varian Medical Systems, Inc. ("Varian" or "HCS"), Varian, Inc., a Delaware corporation ("IB"), and Varian Semiconductor Equipment Associates, Inc., a Delaware corporation ("SEB"). Capitalized terms used in this Agreement are defined in Section 1 below. Unless otherwise indicated, all "Section" references in this Agreement are to sections of this Agreement.

RECITALS

WHEREAS, as of the opening of business on the date hereof, Varian was the common parent of an affiliated group of corporations, which has elected to file consolidated Federal income tax returns; and

WHEREAS, Varian has been engaged through various divisions in, among other things, the Health Care Systems Business, the Instruments Business and the Semiconductor Equipment Business; and

WHEREAS, the Board of Directors of Varian has determined that the interests of its businesses would be best served by separating its business into three separate companies, one consisting of the Health Care Systems Business, one consisting of the Instruments Business, and one consisting of the Semiconductor Equipment Business; and

WHEREAS, as set forth in the Amended and Restated Distribution Agreement dated as of January 14, 1999, and subject to the terms and conditions thereof, Varian wishes (a) to transfer and assign to IB substantially all of the assets of the Instruments Business, in exchange for (i) the assumption by IB of substantially all the liabilities and obligations relating to the Instruments Business, and (ii) the issuance to Varian by IB of shares of IB common stock, and (b) to transfer and assign to SEB substantially all of the assets of the Semiconductor Equipment Business, in exchange for (i) the assumption by SEB of substantially all the liabilities and obligations relating to the Semiconductor Equipment Business, and (ii) the issuance to Varian by SEB of shares of SEB common stock, in transactions intended to be reorganizations under Section 368(a)(l)(D) of the Code; and

WHEREAS, pursuant to the Distribution Agreement, Varian will distribute all of the outstanding shares of common stock of IB and SEB to Varian stockholders, in transactions intended to qualify as tax-free distributions under Section 355 of the Code; and

WHEREAS, as a result of the Distributions, IB and SEB, and their respective subsidiaries, will cease to be members of the affiliated group of which Varian is the common parent, effective as of the Distribution Date; and

WHEREAS, as of the Distribution Date, Varian will be renamed Varian Medical Systems, Inc.; and

WHEREAS, the Companies desire to provide for and agree upon the allocation between and among the parties of liabilities for Taxes arising prior to, as a result of, and subsequent to the transactions contemplated by the Distribution Agreement, and to provide for and agree upon other matters relating to Taxes;

NOW THEREFORE, in consideration of the mutual agreements contained herein, the Companies hereby agree as follows:

"Accounting Cutoff Date" means, with respect to each of HCS, IB and SEB, any date as of the end of which there is a closing of the financial accounting records for such entity.

"Adjustment" means the deemed increase or decrease in a Tax, determined on an issue-by-issue or transaction-by-transaction basis, as appropriate, and using the assumptions set forth in the next sentence, resulting from an adjustment made or proposed by a Tax Authority with respect to any amount reflected or required to be reflected on any Tax Return. For purposes of determining such deemed increase or decrease in a Tax, the following assumptions will be used: (a) in the case of any Income Tax, the highest marginal Tax rate, or, in the case of any other Tax, the highest applicable Tax rate, in each case in effect with respect to that Tax for the Tax Period or any portion of the Tax Period to which the adjustment relates, shall apply; and (b) such determination shall be made without regard to whether any actual increase or decrease in such Tax will in fact be realized with respect to the Tax Return to which such adjustment relates.

"Adjustment Request" means any formal or informal claim or request filed with any Tax Authority, or with any administrative agency or court, for the adjustment, refund, or credit of Taxes, including (a) any amended Tax return claiming adjustment to the Taxes as reported on the Tax Return or, if applicable, as previously adjusted, or (b) any claim for refund or credit of Taxes previously paid, except for any claim for refund or credit arising from a carryback of an item from a Post-Distribution Period.

"Affiliate" means any entity that directly or indirectly is "controlled" by the person or entity in question. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise. Except as otherwise provided herein, the term Affiliate shall refer to Affiliates of a person as determined immediately after the Distributions.

"Agreement" means this Tax Sharing Agreement.

"Business" means any one of the Health Care Systems Business, the Instruments Business, or the Semiconductor Equipment Business.

"Carryback" means any net operating loss, net capital loss, excess tax credit, or other similar Tax item which may or must be carried from one Tax Period to another Tax Period under the Code or other applicable Tax Law.

"Closing Balance Sheet" means the HCS Adjusted Closing Balance Sheet, the IB Adjusted Closing Balance Sheet, or the SEB Adjusted Closing Balance Sheet, as the case may be.

"Code" means the United States Internal Revenue Code of 1986, as amended, or any successor law.

"Companies" means HCS, IB, and SEB, collectively, and "Company" means any one of HCS, IB or SEB.

"Consolidated or Combined Income Tax" means any Income Tax computed by reference to the assets and activities of members of more than one Group.

"Consolidated or Combined State Income Tax" means any State Income Tax computed by reference to the assets and activities of members of more than one Group.

"Consolidated Return" means any Tax Return with respect to any Consolidated or Combined Income Tax.

"Consolidated Tax Liability" means, with respect to any Varian Federal Consolidated Return, the "tax liability of the group" as that term is used in Treasury Regulation Section 1.1552-1(a)(1) (including applicable interest, additions to the tax, additional amounts, and penalties as provided in the Code), provided that such tax liability shall be treated as including any alternative minimum tax liability under Code Section 55.

"Controlling Party" means HCS or any other member of the Health Care Systems Group, IB or

any other member of the Instruments Group or SEB or any other member of the Semiconductor Equipment Group, as the case may be, that filed or, if no such Tax Return has been filed, was required to file, a Tax Return that is the subject of any Tax Contest, or any successor and/or assign of any of the foregoing; provided, however, that in the case of any Consolidated Return, the person that actually filed such Consolidated Return (or any successor and/or assign of such person) will be the Controlling Party. For purposes of this Agreement, each of HCS, IB or SEB may act as the Controlling Party with respect to all matters for which one of their Affiliates is the Controlling Party (e.g., for purposes of providing notices and receiving payments hereunder).

"Correlative Adjustment" means, in the case of an Adjustment, the net present value of any future increases or decreases in a Tax that would be realized, using the assumptions set forth in the next sentence, by any member of the Health Care Systems Group, the Instruments Group, or the Semiconductor Equipment Group, as the case may be, in one or more Tax Periods (or any portion of a Tax Period) but only if such increases or decreases are a direct result of such an Adjustment to that Tax. For purposes of determining the net present value of any such future increases or decreases in a Tax, the following assumptions will be used: (i) a discount rate equal to the sum of the Prime Rate as of the date of the recomputation of Tax or the Final Determination relating to such Adjustment plus 2.0%; (ii) in the case of any Income Tax, the highest marginal Tax rate, or, in the case of any other Tax, the highest applicable Tax rate, in each case in effect with respect to that Tax for the Tax Period, or portion of the Tax Period, in which the Adjustment was made; (iii) the depreciation, amortization or credit rate or lives, if applicable, in effect for the Tax Period, or portion of the Tax Period, in which the Adjustment was made; and (iv) such determination shall be made without regard to whether any actual increases or decreases in such Tax will in fact be realized with respect to the future Tax Returns to which such Correlative Adjustment relates.

"Disputed Adjustment" has the meaning set forth in Section 4.04(b).

"Distribution Agreement" means the agreement, as amended from time to time, setting forth the transactions required to effect the transfer of the Transferred Businesses to IB and SEB and the distribution to the holders of Varian common shares of all of the common shares of SEB and IB, and to which a form of this Tax Sharing Agreement is attached as an exhibit.

"Distribution Date" means the Distribution Date, as that term is defined in the Distribution Agreement.

"Distributions" means the SEB Distribution and the IB Distribution, as such terms are defined in the Distribution Agreement.

"Federal Income Tax" means any Tax imposed by Subtitle A or F of the Code.

"Final Determination" means the final resolution of liability for any Tax for any Tax Period, including any related interest or penalties, by or as a result of: (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction; (ii) a closing agreement or accepted offer in compromise under Code Section 7121 or 7122, or comparable agreement under the laws of other jurisdictions which resolves the entire Tax liability for any Tax Period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered by the jurisdiction imposing the Tax; or (iv) any other final disposition, including by reason of the expiration of the applicable statute of limitations.

"Foreign Income Tax" means any Tax imposed by any foreign country or any possession of the United States, or by any political subdivision of any foreign country or United States possession, which is an income tax as defined in Treasury Regulation Section 1.901-2.

"Group" means the Health Care Systems Group, the Instruments Group, and the Semiconductor Equipment Group, as the context requires.

"HCS Adjusted Closing Balance Sheet" means the HCS Adjusted Closing Balance Sheet as that term is defined in the Distribution Agreement.

"Health Care Systems Business" means the Health Care Systems Business, as that term is defined in the Distribution Agreement.

"HCS" means Varian Medical Systems, Inc., a Delaware corporation, and any successor.

"Health Care Systems Group" means HCS and its Affiliates, excluding any entity that is a member of the Semiconductor Equipment Group or the Instruments Group.

"IB Adjusted Closing Balance Sheet" means the IB Adjusted Closing Balance Sheet as that term is defined in the Distribution Agreement.

"IB Distribution" means the IB Distribution, as that term is defined in the Distribution Agreement.

"Income Tax" means any Federal Income Tax, State Income Tax, or Foreign Income Tax.

"Indemnified Party" has the meaning set forth in Section 5.06(d).

"Indemnifying Party" has the meaning set forth in Section 5.06(d).

"Independent Auditors" means the Independent Auditors as that term is defined in the Distribution Agreement.

"Independent Third Party" means a nationally recognized law firm or any of the following "Big Five" accounting firms or their successors: Arthur Andersen LLP, Ernst & Young LLP, KPMG Peat Marwick, Deloitte & Touche LLP, and PricewaterhouseCoopers LLP.

"Initial Determination" has the meaning set forth in Section 4.05(b)(i).

"IB" means Varian, Inc., a Delaware corporation, and any successor.

"Instruments Business" means the Instruments Business, as that term is defined in the Distribution Agreement.

"Instruments Group" means IB and its Affiliates as determined immediately after the Distributions.

"Interested Party" means HCS or any other member of the Health Care Systems Group, IB or any other member of the Instruments Group or SEB or any other member of the Semiconductor Equipment Group (including any successor and/or assign of any of each of the foregoing), as the case may be, to the extent (a) such Person is not the Controlling Party with respect to a Tax Contest; and (b) such Person (i) may be liable for, or required to make, any indemnity payment, reimbursement or other payment pursuant to the provisions of this Agreement with respect to such Tax Contest; or (ii) may be entitled to receive any indemnity payment, reimbursement or other payment pursuant to the provisions of this Agreement with respect to such Tax Contest; provided, however, that in no event shall a member of either the Health Care Systems Group, the Instruments Group or the Semiconductor Equipment Group, as the case may be, be an Interested Party in a Tax Contest in which another member of its Group is the Controlling Party with respect to the Tax Contest.

"Interested Party Notice" has the meaning set forth in Section 4.04(b).

"IRS" means the United States Internal Revenue Service.

"Payment Date" means (i) with respect to any Varian Federal Consolidated Return, the due date for any required installment of estimated taxes determined under Code Section 6655, the due date (determined without regard to extensions) for filing the return determined under Code Section 6072, and the date the return is

filed, and (ii) with respect to any Tax Return for any Consolidated or Combined State Income Tax, the corresponding dates determined under the applicable Tax Law.

"Post-Distribution Period" means any Tax Period beginning after the Distribution Date, and, in the case of any Straddle Period, the portion of such Straddle Period beginning the day after the Distribution Date.

"Pre-Distribution Consolidated Tax Liability" means Consolidated Tax Liability with respect to all Tax Periods ending on or prior to the Distribution Date and in the case of the Tax Period which includes the Distribution Date, the Consolidated Tax Liability computed as if the Distribution Date were the last day of the Tax Period.

"Pre-Distribution Period" means any Tax Period ending on or before the Distribution Date, and, in the case of any Straddle Period, the portion of such Straddle Period ending on the Distribution Date.

"Prime Rate" means the base rate on corporate loans charged by Citibank, N.A., New York, New York from time to time, compounded daily on the basis of a year of 365 or 366 (as applicable) days and actual days elapsed.

"Prior Intercompany Tax Allocation Agreements" means any written or oral agreement or any other arrangements relating to allocation of Taxes existing between or among members of the Health Care Systems Group, the Instruments Group, and the Semiconductor Equipment Group as of the Distribution Date (other than this Agreement and other than any such agreement or arrangement between or among persons who are members of a single Group).

"Responsible Company" means, with respect to any Tax Return, the Company having responsibility for preparing and filing such Tax Return under this Agreement.

"Restructuring Tax" means the Income Taxes described in Section
2.05(a) (relating to Tax resulting from any income or gain recognized as a result of the Transactions).

"Ruling Request" means the letter filed by Varian with the Internal Revenue Service requesting a ruling from the Internal Revenue Service regarding certain tax consequences of the Transactions (including all attachments, exhibits, and other materials submitted with such ruling request letter) and any amendment or supplement to such ruling request letter.

"SEB Adjusted Closing Balance Sheet" means the SEB Adjusted Closing Balance Sheet, as that term is defined in the Distribution Agreement.

"SEB Distribution" means the SEB Distribution, as that term is defined in the Distribution Agreement.

"SEB" means Varian Semiconductor Equipment Associates, Inc., a Delaware corporation, and any successor.

"Semiconductor Equipment Business" means the Semiconductor Equipment Business, as that term is defined in the Distribution Agreement.

"Semiconductor Equipment Group" means SEB and its Affiliates as determined immediately after the Distributions.

"Separate Company Tax" means any Tax computed by reference to the assets and activities of a member or members of a single Group.

"Separation Committee" means the Separation Committee, as that term is defined in the Distribution Agreement.

"Sharing Percentage" shall mean one-third for the Health Care Systems Group, one-third for the Instruments Group, and one-third for the Semiconductor Equipment Group.

"Significant Obligation" means, in the case of an Interested Party, and with respect to any Tax Detriment, an obligation to make or right to receive any indemnity payment, reimbursement or other payment with respect to any such Tax Detriment (including the effect of a Correlative Adjustment relating thereto) pursuant to the terms of the Agreement that is greater than $1,000,000.

"State Income Tax" means any Tax imposed by any State of the United States or by any political subdivision of any such State which is imposed on or measured by net income, including state and local franchise or similar Taxes measured by net income.

"Straddle Period" means any Tax Period that begins on or before and ends after the Distribution Date.

"Subsidiary" shall have the meaning provided in the Distribution Agreement.

"Tainting Act" shall have the meaning provided in Section 10.

"Tax" or "Taxes" means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers compensation, unemployment, registration, disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, alternative minimum, estimated or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any governmental entity or political subdivision thereof, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.

"Tax Authority" means, with respect to any Tax, the governmental entity or political subdivision thereof that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such entity or subdivision.

"Tax Benefit" means, with respect to any Tax Period or portion of a Tax Period, and as computed separately with respect to each Tax, the net decrease in each such Tax equal to the sum of all Adjustments (including the effect of any Correlative Adjustment relating thereto) with respect to each such Tax for each such Tax Period or portion of a Tax Period.

"Tax Contest" means an audit, review, examination, or any other administrative or judicial proceeding with the purpose or effect of redetermining Taxes of any of the Companies or their Affiliates (including any administrative or judicial review of any claim for refund).

"Tax Detriment" means, with respect to any Tax Period or portion of a Tax Period, and as computed separately with respect to each Tax, the net increase in such Tax equal to the sum of all Adjustments (including the effect of any Correlative Adjustment relating thereto) with respect to each such Tax for each such Tax Period or portion of a Tax Period.

"Tax Item" means, with respect to any Income Tax, any item of income, gain, loss, deduction, and credit.

"Tax Law" means the law of any governmental entity or political subdivision thereof relating to any Tax.

"Tax Period" means, with respect to any Tax, the period for which the Tax is reported as provided under the Code or other applicable Tax Law.

"Tax Records" means Tax Returns, Tax Return workpapers, documentation relating to any Tax Contests, and any other books of account or records required to be maintained under the Code or other applicable Tax Laws or under any record retention agreement with any Tax Authority.

"Tax Return" means any report of Taxes due, any claims for refund of Taxes paid, any information return with respect to Taxes, or any other similar report, statement, declaration, or document required to be filed under the Code or other Tax Law, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.

"Transaction Tax" means the Taxes described in Sections 2.05(a) (relating to Tax incurred as a result of the Transactions), including any Restructuring Tax.

"Transactions" means the transactions contemplated by the Distribution Agreement (including the Corporate Restructuring Transactions and Distributions, as defined in the Distribution Agreement).

"Transferred Instruments Business" means the Instruments Business transferred to IB pursuant to the Distribution Agreement.

"Transferred Semiconductor Equipment Business" means the Semiconductor Equipment Business transferred to SEB pursuant to the Distribution Agreement.

"Treasury Regulations" means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Period.

"Ultimate Determination" has the meaning set forth in Section 4.05(b)(iii).

"Varian Federal Consolidated Return" means any United States federal Tax Return for the affiliated group (as that term is defined in Code Section 1504) that includes Varian as the common parent and includes any member of the Instruments Group or the Semiconductor Equipment Group.

entitled to HCS's Sharing Percentage with respect to any Tax Benefit or Tax Detriment resulting from any Adjustment with respect thereto.

imposed on any member of the Semiconductor Equipment Group and IB shall be liable for all Taxes imposed on any member of the Instruments Group. The Companies believe that there is no Tax not specifically allocated pursuant to Sections 2.02 through 2.04 relating to Pre-Distribution Periods which is legally imposed on more than one legal entity or is not solely allocable to the Transferred Semiconductor Equipment Businesses or the Transferred Instruments Business (e.g., joint and several liability); however, if there is any such Tax, it shall be allocated in accordance with past practices as reasonably determined by the affected Companies, or in the absence of such practices, in accordance with any allocation method agreed upon by the affected Companies.

(i) any sales and use, gross receipts, or other transfer Taxes, or any Foreign Income Taxes, imposed on the transfers occurring pursuant to the Transactions;

(ii) any Tax resulting from any income or gain recognized under Treasury Regulation Sections 1.1502-13 or 1.1502-19 (or any corresponding provisions of other applicable Tax Laws of the United States or any political subdivision thereof) as a result of the Transactions; and

(iii) any Tax resulting from any income or gain recognized as a result of any of the Transactions contemplated by the Distribution Agreement failing to qualify for tax-free treatment under Code Sections 332, 351, 355, 361, or other provisions of the Code (as contemplated in the Ruling Request) or other applicable Tax Laws of the United States or any political subdivision thereof;

shall be allocated based on the legal entity on which the legal incidence of the Tax is imposed; provided, however, that except as otherwise provided in this Agreement each of the Companies shall be entitled to or shall be responsible for its respective Sharing Percentage with respect to any Tax Benefit or Tax Detriment resulting from any Adjustment with respect thereto. For purposes of this Section 2.05(a), the legal incidence of any Income Tax shall be determined without regard for Treasury Regulation Section 1.1502-6 or corresponding provisions of other Tax Laws.

(i) first, the amount of any such Tax Detriment or Tax Benefit shall be increased or decreased, as appropriate, by the amount of the Correlative Adjustment, the net amount resulting from such increase or decrease being hereinafter referred to as the "Net Adjustment" for purposes of this Section 2.06;

(ii) second, the Net Adjustment shall be allocated among the Health Care Systems Group, the Instruments Group, and the Semiconductor Equipment Group in proportion to their respective Sharing Percentages, taking into account the extent each party is liable for and/or has an obligation to make, or has the right to receive, as the case may be, any payment to any Tax Authority or any indemnity payment, reimbursement, or other payment with respect to such Tax Detriment or Tax Benefit under this Agreement; and

(iii) finally, with respect to a party to which a Correlative Adjustment is attributable, that party's share of the Net Adjustment as allocated pursuant to paragraph (ii) of this Section 2.06 will be increased or decreased, as appropriate, by the amount, if any, of the Correlative Adjustment that is attributable to such party in order to determine the amount of such party's share of the Tax Detriment or Tax Benefit.

Interested Party was materially prejudiced by such failure, and in no event shall such failure relieve the Interested Party from any other liability or obligation which it may have to such Controlling Party.

(a) The Controlling Party shall promptly provide written notice, sent postage prepaid by United States mail, certified mail, return receipt requested, to all Interested Parties in a Tax Contest (i) that a Final Determination has been made with respect to such Tax Contest; and (ii) enumerating the amount of the Interested Party's share of each Tax Benefit or Tax Detriment reflected in such Final Determination of the Tax Contest for which such Interested Party may be required to make or entitled to receive or has made or been entitled to receive an indemnity payment, reimbursement or other payment under this Agreement.

(b) Within ninety (90) days after an Interested Party receives the notice described in Section 4.04(a) hereof from the Controlling Party, such Interested Party shall execute a written statement giving notice to the Controlling Party (i) that the Interested Party agrees with each Tax Benefit or Tax Detriment (and its share thereof)

enumerated in the notice described in Section 4.04(a) hereof except with respect to those Tax Benefits or Tax Detriments (and/or its shares thereof) that, in the good faith judgment of the Interested Party, it disagrees with and has specifically enumerated its disagreement with, including the amount of such disagreement, in the statement (each such disagreed Tax Benefit or Tax Detriment (and/or share thereof) hereinafter referred to as a "Disputed Adjustment"); and
(ii) that the Interested Party thereby waives it right to a determination by an Independent Third Party pursuant to the provisions of Section 4.05 hereof with respect to all Tax Benefits or Tax Detriments to which it agrees with its share (this statement hereinafter referred to as the "Interested Party Notice"). The failure of an Interested Party to provide the Interested Party Notice to the Controlling Party within the ninety (90) day period specified in the preceding sentence shall be deemed to indicate that such Interested Party agrees with its share of all Tax Benefits or Tax Detriments enumerated in the notice described in Section 4.04(a) hereof and that such Interested Party waives it right to a determination by an Independent Third Party with respect to all such Tax Benefits or Tax Detriments (and its shares thereof) pursuant to Section 4.05 hereof.

(c) During the ninety (90) day period immediately following the Controlling Party's receipt of the Interested Party Notice described in Section 4.04(b) above, the Controlling Party and the Interested Party shall in good faith confer with each other to resolve any disagreement over each Disputed Adjustment that was specifically enumerated in such Interested Party Notice. At the end of the ninety (90) day period specified in the preceding sentence, unless otherwise extended in writing by the mutual consent of the parties, the Interested Party shall be deemed to agree with all Disputed Adjustments that were specifically enumerated in the Interested Party Notice and waive its right to a determination by an Independent Third Party pursuant to Section 4.05 hereof with respect to all such Disputed Adjustments unless, and to the extent, that at any time during such ninety (90) day (or extended) period, either the Controlling Party or the Interested Party has given the other party written notice that it is seeking a determination by an Independent Third Party pursuant to Section 4.05 hereof regarding the propriety of any such Disputed Adjustment.

(d) Notwithstanding anything in this Agreement to the contrary, an Interested Party that does not have a Significant Obligation with respect to a Tax Detriment relating to a Final Determination has no right to a determination by an Independent Third Party under Section 4.05 hereof with respect to any Disputed Adjustment relating to such Final Determination, and any such Disputed Adjustment shall not be subject to the provisions of Section 14.

(a) In the event that either a Controlling Party or an Interested Party has given the other party written notice as required in Section 4.04(c) hereof that it is seeking a determination by an Independent Third Party pursuant to this Section 4.05 with respect to any Disputed Adjustment that was enumerated in an Interested Party Notice, then the parties shall, within thirty (30) days after a party has received such notice, jointly select an Independent Third Party to make such determination. In the event that the parties cannot jointly agree on an Independent Third Party to make such determination within such thirty (30) day period, then the Controlling Party and the Interested Party shall each immediately select an Independent Third Party and the Independent Third Parties so selected by the parties shall jointly select, within twenty
(20) days of their selection, another Independent Third Party to make such determination.

(b) In making its determination as to the propriety of any Disputed Adjustment, the Independent Third Party selected pursuant to Section 4.05(a) above shall assume that the Interested Party is not required or entitled under applicable law to be a member of any Consolidated Return. In addition, the Independent Third Party shall make its determination according to the following procedure:

(i) The Independent Third Party shall first analyze each Disputed Adjustment for which a determination is sought pursuant to this Section 4.05 on a stand-alone basis to determine whether the actual outcome reached with respect to such Disputed Adjustment as reflected in the Final Determination of the Tax Contest was fair and appropriate taking into account the following exclusive criteria: (A) the facts relating to such Adjustment; (B) the applicable law, if any, with respect to such Adjustment; (C) the position of the applicable Tax Authority with respect to compromise, settlement or litigation of such Adjustment; (D) the strength of the factual and legal arguments made by the Controlling Party in reaching the outcome with respect to such Adjustment

as reflected in the Final Determination of the Tax Contest; and (E) the strength of the factual and legal arguments being made by the Interested Party for the alternative outcome being asserted by such Interested Party (including the availability of facts, information and documentation to support such alternative outcome). Based on this analysis, the Independent Third Party shall determine what is the fair and appropriate outcome (hereinafter referred to as the "Initial Determination") with respect to each such Disputed Adjustment.

(ii) The Interested Party shall not be entitled to modification of its share of a Disputed Adjustment under this
Section 4.05 if, as the case may be, either (A) the amount that would be paid by the Interested Party under the Initial Determination with respect to such Disputed Adjustment is 80% or more than the amount that would be paid by the Interested Party with respect to such Disputed Adjustment under the actual outcome reached with respect to such Disputed Adjustment; or (B) the amount that would be received by the Interested Party under the Initial Determination with respect to such Disputed Adjustment is 120% or less than the amount that the Interested Party would receive with respect to such Disputed Adjustment under the actual outcome reached with respected to such Disputed Adjustment. The Independent Third Party will provide notice to the Controlling Party and the Interested Party in the event the Interested Party is not entitled to modification of its share of the Disputed Adjustment pursuant to this paragraph (ii).

(iii) If the modification of an Interested Party's share of a Disputed Adjustment under this Section 4.05 is not prohibited pursuant to paragraph (ii) above, then the Independent Third Party shall determine what is the fair and appropriate outcome (hereinafter referred to as the "Ultimate Determination") to the Interested Party with respect to such Disputed Adjustment in the context of the entire Tax Contest as it relates to the Interested Party. In making this determination, the Independent Third Party shall consider the Disputed Adjustment as if it were raised in an independent audit of the Interested Party by the appropriate Tax Authority and the Independent Third Party shall take into account and give appropriate weight in its sole discretion to the following exclusive criteria: (A) the strength of the legal and factual support for other potential, non-frivolous Adjustments with respect to matters that were actually raised and contested by the applicable Tax Authority in the Tax Contest for which the Interested Party could have been liable under this Agreement but which were eliminated or reduced as a result of the Controlling Party agreeing to the Disputed Adjustment as reflected in the Final Determination of the Tax Contest; (B) the effect of the actual outcome reached with respect to the Disputed Adjustment on other Tax Periods and on other positions taken or proposed to be taken in Returns filed or proposed to be filed by the Interested Party; (C) the realistic possibility of avoiding examination of potential, non-frivolous issues for which the Interested Party could be liable under this Agreement and that were contemporaneously identified in writings by the party or parties during the course of the Tax Contest but which had not been raised and contested by the applicable Tax Authority in the Tax Contest; and (D) the benefits to the Interested Party in reaching a Final Determination, and the strategy and rationale with respect to the Interested Party's Disputed Adjustment that the Controlling Party had for agreeing to such Disputed Adjustment in reaching the Final Determination, in each case that were contemporaneously identified in writings by the party or parties during the course of the Tax Contest.

(iv) The Interested Party shall only be entitled to modification of its share of a Disputed Adjustment under this
Section 4.05 if, as the case may be, either (A) the amount that would be paid by the Interested Party under the Ultimate Determination with respect to such Disputed Adjustment is less than 80% of the amount that would be paid by the Interested Party with respect to such Disputed Adjustment under the actual outcome reached with respect to such Disputed Adjustment; or (B) the amount that would be received by the Interested Party under the Ultimate Determination with respect to such Disputed Adjustment is more than 120% of the amount that the Interested Party would receive with respect to such Disputed Adjustment under the actual outcome reached with respected to such Disputed Adjustment. If an Interested Party is entitled to modification of its share of any Disputed Adjustment under the preceding sentence, the amount the Interested Party is entitled to receive, or is required to pay, as the case may be, with respect to such Disputed Adjustment shall be equal to the amount of the Ultimate Determination

of such Disputed Adjustment. The Independent Third Party will provide notice to the Controlling Party and the Interested Party stating whether the Interested Party is entitled to modification of its share of the Disputed Adjustment pursuant to this paragraph
(iv) and, if the Interested Party is entitled to such modification, the amount as determined in the preceding sentence that the Interested Party is entitled to receive from, or required to pay to, the Controlling Party with respect to such Disputed Adjustment.

(c) Any determination made or notice given by an Independent Third Party pursuant to this Section 4.05 shall be (i) in writing; (ii) made within ninety (90) days following the selection of the Independent Third Party as set forth in Section 4.05(a) of this Agreement unless such period is otherwise extended by the mutual consent of the parties; and (iii) final and binding upon the parties. The costs of any Independent Third Party retained pursuant to this Section 4.05 shall be shared equally by the parties. The Controlling Party and the Interested Party shall provide the Independent Third Party jointly selected pursuant to Section 4.05(a) hereof with such information or documentation as may be appropriate or necessary in order for such Independent Third Party to make the determination requested of it. Upon issuance of an Independent Third Party's notice under Section 4.05(b)(ii) or Section 4.05(b)(iv) hereof, the Controlling Party or the Interested Party, as the case may be, shall pay as specified in Section 5 of this Agreement, the amount, if any, of the Disputed Adjustment to the appropriate party.

(i) If such Tax Return is with respect to a Consolidated or Combined State Income Tax, HCS will pay such amount to such Tax Authority on or before such Payment Date.

(ii) If such Tax Return is with respect to a Separate Company Tax, the Responsible Company shall, if it is not the Company liable for the Tax reported on such Tax Return, notify the Company liable for such Tax in writing of the amount of Tax required to be paid on such Payment Date. The Company liable for such Tax will pay such amount to such Tax Authority on or before such Payment Date.

(a) If any Company (the "payor") is required to pay to a Tax Authority a Tax that another Company (the "identified party") is required to pay to such Tax Authority under this Agreement, the identified party shall reimburse the payor within 30 days of delivery by the payor to the identified party of an invoice for the amount due, accompanied by evidence of payment and a statement detailing the Taxes paid and describing in reasonable detail the particulars relating thereto. The reimbursement shall include interest on the Tax payment computed at the

Prime Rate based on the number of days from the date of the payment to the Tax Authority to the date of reimbursement under this Section 5.04.

(b) In the event that (x) it is finally determined that any Company (the "Responsible Party") is liable to another Company (the "Protected Party") hereunder in respect of any payment obligation under this Agreement (a "Protected Loss") and (y) a court of competent jurisdiction prohibits such Responsible Party from satisfying all or a part of its obligations to the Protected Party hereunder in respect of such Protected Loss, then the amount of the Protected Loss that is not satisfied shall be treated as a liability of the parties to this Agreement other than the Responsible Party, with the Sharing Percentage of the Group of which each such other party is a member equal to 50%.

receipt by the Interested Party of a notice of Final Determination of a Tax Contest as required and specified in Section 4.04(a) hereof.

If after (i) notice of a Final Determination of a Tax Contest as required and specified in Section 4.04(a) hereof has been given by a Controlling Party to an Interested Party; and (ii) the Interested Party receiving such notice has either:

(A) failed to provide the Interested Party Notice specified in Section 4.04(b) hereof within the ninety (90) day period set forth in Section 4.04(b);

(B) provided the Interested Party Notice specified in
Section 4.04(b) hereof within the ninety (90) day period specified in Section 4.04(b) agreeing to all Tax Benefits or Tax Detriments (and the Interested Party's share of all such amounts) and waiving the right to an Independent Third Party determination pursuant to Section 4.05 hereof with respect to all such Tax Benefits or Tax Detriments (and the Interested Party's share of such amounts);

(C) provided the Interested Party Notice specified in
Section 4.04(b) hereof within the ninety (90) day period specified in Section 4.04(b) agreeing with some, but not all, Tax Benefits or Tax Detriments (and the Interested Party's share of such agreed amounts) and waiving the right to an Independent Third Party Determination pursuant to Section 4.05 hereof with respect to all such agreed Tax Benefits or Tax Detriments (and the Interested Party's share of such amounts); or

(D) provided the Interested Party Notice specified in
Section 4.04(b) hereof within the ninety (90) day period specified in Section 4.04(b) specifically enumerating the Disputed Adjustments to which it does not agree and for which the notice specified in either Section 4.05(b)(ii) or Section 4.05(b)(iv) hereof relating to any such Disputed Adjustment has been given by an Independent Third Party,

then the amount of any Tax Detriment or Tax Benefit agreed to or deemed to be agreed to by the Interested Party, or for which an Independent Third Party notice has been given pursuant to either Section 4.05(b)(ii) or Section 4.05(b)(iv) hereof, as set forth in each of clauses (A), (B), (C) or (D) above, shall be immediately due and payable.

Any Person entitled to any indemnification, reimbursement or other payment under this Agreement with respect to the amount of any Tax Detriment or Tax Benefit that has become immediately due and payable under this Section
5.06(d) (the "Indemnified Party") shall notify in writing the Person against whom such indemnification, reimbursement or other payment is sought (the "Indemnifying Party") of its right to and the amount of such indemnification, reimbursement or other payment; provided, however, that the failure to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability and/or obligation which it may have to an Indemnified Party on account of the provisions contained in this Agreement except to the extent that the Indemnifying Party was prejudiced by such failure, and in no event shall such failure relieve the Indemnifying Party from any other liability or obligation which it may have to such Indemnified Party. The Indemnifying Party shall make such indemnity payment, reimbursement or other payment to the Indemnified Party within thirty (30) days of the receipt of the written notice specified in the preceding sentence; provided, however, that, in the case of any Final Determination of a Tax Contest involving a state, local or municipal Tax in which the Indemnifying Party is also the Controlling Party with respect to such Tax Contest and, as Controlling Party, is entitled to receive an overall net refund from the applicable state, local or municipal Tax Authority with respect to such state, local or municipal Tax, then the Indemnifying Party shall be required to make such indemnity payment, reimbursement or other payment to the Indemnified Party within thirty (30) days from the date the Indemnifying Party actually receives payment of or obtains the benefit of the net refund due from the applicable state, local or municipal Tax Authority.

advisor, the Company that receives (or whose Affiliate receives) such reimbursement will make such payments to the other Companies as are necessary to cause the net after-tax cost of the Adjustment net of such reimbursement to be shared by the Companies in accordance with their Sharing Percentages (taking into account any Correlative Adjustment and the assumptions set forth in the definition of Adjustment).

(1) All Tax Returns related to the Health Care Systems Group for Post- Distribution Periods shall be prepared and filed (or caused to be prepared and filed) by HCS;
(2) All Tax Returns related to the Semiconductor Equipment Group for Post-Distribution Periods shall be prepared and filed (or caused to be prepared and filed) by SEB; and
(3) All Tax Returns related to the Instruments Group for Post- Distribution Periods shall be prepared and filed (or caused to be prepared and filed) by IB.

documents in connection with any administrative or judicial proceedings relating to Taxes. The Company requesting assistance shall reimburse the Company providing assistance for the reasonable costs thereof, including personnel costs. Any information or documents provided under this Section 7 shall be kept confidential by the Company receiving the information or documents, except as may otherwise be necessary in connection with the filing of Tax Returns or in connection with any administrative or judicial proceedings relating to Taxes.

(a) Each of the Companies covenants and agrees that it will use its best efforts to cause the Distributions to qualify under Section 355 of the Code. Each of the Companies covenants and agrees that it will not take or permit any action, and it will cause its Affiliates to refrain from taking or permitting any action, which may be inconsistent with the Tax treatment of the Transactions as contemplated in the Ruling Request or any Tax ruling received with respect to Tax consequences related to the Transaction in a foreign jurisdiction (any such action is referred to in this Section 10 as a "Tainting Act"), unless (i) the Company or Affiliate thereof proposing such Tainting Act (the "Requesting Party") either (A) obtains a ruling with respect to the Tainting Act from the IRS or other applicable Tax Authority that is reasonably satisfactory to each other Company (the "Requested Parties") (except that the Requesting Party shall not submit any such ruling request if a Requested Party determines in good faith that filing such request might have a materially adverse effect upon such Requested Party), or (B) obtains an unqualified opinion of independent nationally recognized tax counsel acceptable to each Requested Party, on a basis of assumed facts and representations consistent with the facts at the time of such action, that such Tainting Act will

not affect the Tax treatment of the Transactions as contemplated in the Ruling Request, or (ii) each Requested Party consents in writing to such Tainting Act, which consent shall be granted or withheld in the sole and absolute discretion of each such Requested Party. A Tainting Act of a Company shall include a transaction involving that Company to which Section 355(e) of the Code is applicable, regardless of whether the Company could have prevented such transaction. Without limiting the foregoing:

(b) Notwithstanding anything to the contrary in this Agreement, each Company shall be solely liable for, and shall indemnify and hold harmless each other Company from any Restructuring Tax resulting from a Tainting Act by such first Company or its Affiliates, regardless of whether clause (i) or (ii) of Section 10(a) was satisfied with respect to such Tainting Act.

as interest income by the indemnitee (includible in income to the extent provided by law). The amount of the payment shall not be adjusted under Section 13.02 to take into account any associated Tax benefit to the indemnitor or increase in Tax to the indemnitee.

If to HCS, at:
Varian Medical Systems, Inc.
3100 Hansen Way
Palo Alto, California 94304
Attn: Chief Financial Officer

With a copy to:
Varian Medical Systems, Inc.
3100 Hansen Way
Palo Alto, California 94304
Attn: General Counsel

If to SEB, at:
Varian Semiconductor Equipment Associates, Inc. 35 Dory Road
Gloucester, Massachusetts 01930
Attn: Chief Financial Officer
Telecopy: (978) 281-3152

With a copy to:
Varian Semiconductor Equipment Associates, Inc. 35 Dory Road
Gloucester, Massachusetts 01930
Attn: General Counsel
Telecopy: (978) 281-3152

If to IB, at:
Varian, Inc.
3120 Hansen Way
Palo Alto, California 94304
Attn: Chief Financial Officer

With a copy to:
Varian, Inc.
3120 Hansen Way
Palo Alto, California 94304
Attn: General Counsel

or such other address as shall be furnished by any of the parties in a Notice. Any Notice shall be deemed to have been duly given or made when the Notice is received.

(a) No party to this Agreement shall (i) consolidate with or merge into any Person or permit any Person to consolidate with or merge into such party (other than a merger or consolidation in which the party is the surviving or continuing corporation), or (ii) sell, assign, transfer, lease or otherwise dispose of, in one transaction or a series of related transactions, all or substantially all of its Assets, unless the resulting, surviving or transferee Person expressly assumes, by instrument in form and substance reasonably satisfactory to the other parties, all of the obligations of the party under this Agreement.

(b) Except as expressly provided in paragraph (a) above, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assignable, directly or indirectly, by any party without the prior written consent of the other parties, and any attempt to so assign without such consent shall be void.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the respective officers as of the date set forth above.

VARIAN ASSOCIATES, INC.

By:    /s/ Robert A. Lemos
       ----------------------------------------
Name:  Robert A. Lemos
Title: Vice President Finance and Chief
       Financial Officer

VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.

By:    /s/ Joseph B. Phair
       ----------------------------------------
Name:  Joseph B. Phair
Title: Secretary

VARIAN, INC.

By:    /s/ Arthur W. Homan
       ----------------------------------------
Name:  Arthur W. Homan
Title: Secretary

EXHIBIT 99.4

TRANSITION SERVICES AGREEMENT
AMONG
VARIAN ASSOCIATES, INC.,
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
AND
VARIAN, INC.
Dated as of
April 2, 1999

TABLE OF CONTENTS

                                                                Page
ARTICLE I    SERVICES PROVIDED................................    1
      1.1    Transition Services..............................    1
      1.2    Personnel........................................    1
      1.3    Representatives..................................    2
      1.4    Level of Transition Services.....................    2
      1.5    Corrective Efforts...............................    2
      1.6    Force Majeure....................................    2
      1.7    Modification of Procedures.......................    3
      1.8    No Obligation to Continue to Use Services........    3
      1.9    Provider Access..................................    3

ARTICLE II   COMPENSATION.....................................    3
      2.1    Consideration....................................    3
      2.2    Invoices.........................................    3
      2.3    Payment of Amounts Due...........................    4
      2.4    Provider's Rights on Failure to Pay..............    4

ARTICLE III  CONFIDENTIALITY..................................    4
      3.1    Obligation.......................................    4

ARTICLE IV   TERM AND TERMINATION.............................    4
      4.1    Term.............................................    4
      4.2    Extension........................................    4
      4.3    Termination......................................    5
      4.4    Termination of Obligations.......................    5
      4.5    Survival of Certain Obligations..................    5

ARTICLE V    DISPUTE RESOLUTION...............................    5
      5.1    Distribution Agreement to Control................    5

ARTICLE VI   INSURANCE; INDEMNIFICATION.......................    5
      6.1    Insurance and Indemnity..........................    5
      6.2    Recipients' Indemnity for Services...............    6
      6.3    Providers' Indemnity for Services................    6

ARTICLE VII  MISCELLANEOUS....................................    6
      7.1    Complete Agreement; Construction.................    6
      7.2    Other Agreements.................................    6
      7.3    Counterparts.....................................    6
      7.4    Notices..........................................    6
      7.5    Waivers..........................................    7
      7.6    Amendments.......................................    7

TABLE OF CONTENTS
(continued)

                                                           Page
7.7   Assignment.......................................    7
7.8   Successors and Assigns...........................    8
7.9   Third Party Beneficiaries........................    8
7.10  Schedules........................................    8
7.11  Governing Law....................................    8
7.12  Severability.....................................    8
7.13  Subsidiaries.....................................    8
7.14  Title and Headings...............................    8
7.15  Laws and Government Regulations..................    8
7.16  Relationship of Parties..........................    8
7.17  Definitions......................................    8

TRANSITION SERVICES AGREEMENT

THIS TRANSITION SERVICES AGREEMENT (this "Agreement") is made and entered into as of this 2nd day of April, 1999 between and among VARIAN ASSOCIATES, INC., a Delaware corporation ("HCS"), VARIAN, INC., a Delaware corporation ("IB"), and VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, Inc., a Delaware corporation ("SEB") (collectively, the "parties" or individually a "party").

WHEREAS, HCS, IB and SEB have entered into an Amended and Restated Distribution Agreement dated as of January 14, 1999 (the "Distribution Agreement") which, among other matters, contemplates that one or more parties thereto will provide, or cause one or more of its Subsidiaries to provide, to the other parties and their respective Subsidiaries, certain transitional, administrative and support services on the terms set forth in this Agreement. Each party when providing a service under this Agreement (together with any Subsidiaries or Affiliates providing services) is referred to as "Provider" and each party when receiving a service under this Agreement (together with any Subsidiaries or Affiliates receiving services) is referred to as "Recipient."

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows:

ARTICLE I

SERVICES PROVIDED

(a) Upon the terms and subject to the conditions of this Agreement, the relevant Provider shall provide to the relevant Recipient the services indicated on the Schedules hereto (each, a "Transition Service" and, collectively, the "Transition Services") during the time period for such Transition Service set forth in the applicable Schedule (each, a "Time Period").

(b) Subject to the other provisions of this Agreement, the Transition Services set forth on such Schedules may be amended from time to time, as the relevant parties shall agree in writing to add, omit or redefine any of the Transition Services, the time period for which such Transition Services are to be rendered and/or the compensation therefor.

(a) Each party in its capacity as Provider shall make a sufficient number of competent employees (and/or third party contractors to the extent that third party services are routinely utilized to provide similar services to other businesses of such Provider or are reasonably necessary for the efficient performance of any Transition Service) to render the Transition Services to be provided under this Agreement when required, for so long as Provider provides said services to itself. Except to the extent specific individuals are designated on a Schedule, a Provider of a Transition Service shall determine both the staffing required and the particular personnel assigned to perform the Transition Service, including but not limited to, clerical staff, technicians, professionals or others. The personnel assigned by a Provider under this Agreement to perform Transition Services for a Recipient shall not be deemed to be in the employ of the Recipient or entitled to receive any compensation or benefits therefrom.

(b) Each Recipient shall not, without the Provider's prior written consent, solicit any employees of a Provider assigned by the Provider to the Recipient for the performance of such services while such employee is employed by Provider or within the six-month period after the date any employee ceases to provide Transition Services.

(a) Each of HCS, IB and SEB shall designate a representative to act as its primary contact person for the provision of all Transition Services (each, a "Primary Coordinator"). The initial Primary Coordinators shall be designated in writing by notice to the others in accordance with paragraph (b) on or before the Distribution Date. The initial coordinators for each specific Transition Service shall be the individuals named in the Schedule relating to such Transition Service (each, a "Service Coordinator"). Each party may treat an act of another party's Primary Coordinator or Service Coordinator as authorized by such other party without inquiring behind such act or ascertaining whether such Primary Coordinator or Service Coordinator had actual authority so to act, provided, however, that neither the Primary Coordinator nor the Service Coordinator shall have authority to amend or modify the Agreement. All communications relating to the provision of the Transition Services shall be directed to the Primary Coordinators.

(b) Each of the relevant Provider and the relevant Recipient of a Transition Service shall notify the other in writing of any change in its Primary Coordinator and/or its Service Coordinator for each Transition Service. Any such notice shall (i) set forth the name of the Primary Coordinator or Service Coordinator to be replaced and the name of the replacement, and (ii) certify that the replacement Primary Coordinator is authorized to act for such party in all matters relating to this Agreement or that the replacement Service Coordinator is authorized to act for such party in all matters relating to the relevant Transition Service, as applicable, as provided in Section 1.3 (a) above.

1.4 Level of Transition Services.

(a) Each party, in its capacity as Provider, shall exercise the same degree of care when performing Transition Services as it exercises in performing the same or similar services for its own account, with priority equal to that provided to its own businesses. Nothing in this Agreement shall require any party in its capacity as Provider to favor the businesses of a Recipient over its own businesses.

(b) No Provider shall be required to provide the Recipient of Transition Services with a quantity of Transition Services in excess of that provided by Provider as of the date of this Agreement and shall specifically not be required to provide extraordinary levels of Transition Services, special studies, training, or the like or the advantage of systems, equipment, facilities, training, or improvements procured, obtained or made after the Distribution Date by such Provider.

(c) Transition Services provided by third parties shall be subject to the terms and conditions of this Agreement and any agreements between the Provider of such Transition Services and such third parties.

for a period of 45 days due to such cause or causes, the affected party may terminate this Agreement with the defaulting party by providing written notice thereto.

(a) Provider has furnished Recipient notice (which shall be the same notice such Provider shall provide its own businesses) thereof;

(b) Provider changes the procedures for its own businesses at the same time; and

(c) Provider gives Recipient a reasonable period of time for Recipient (i) to adapt its operations to accommodate the changes or (ii) to reject the proposed changes. In the event Recipient fails to accept or reject a proposed change on or before a date specified in the notice of change, Recipient shall be deemed to have accepted the change. Subject to Section 1.8, in the event Recipient rejects a proposed change but does not terminate the provision of the Transition Service, Recipient shall pay any charges resulting from Provider's need to maintain different versions of the same systems, procedures, technologies, or services or resulting from requirements of third party vendors or suppliers.

ARTICLE II

COMPENSATION

To HCS:

Varian Medical Systems, Inc.
3100 Hansen Way
Palo Alto, California 94304-1030

Attention: Chief Financial Officer

To IB:

Varian, Inc.
3120 Hansen Way
Palo Alto, California 94303-1030 Attention: Chief Financial Officer

To SEB:

Varian Semiconductor Equipment Associates, Inc. 35 Dory Road
Gloucester, Massachusetts 01930 Attention: Chief Financial Officer Fax: (978) 281-3152

ARTICLE III

CONFIDENTIALITY

(a) All information with respect to any Recipient obtained by a party in its capacity as Provider shall be held and used by Provider only in accordance with Section 6.03 of the Distribution Agreement.

(b) All information with respect to any Provider obtained by a party in its capacity as Recipient shall be held and used by the Recipient only in accordance with Section 6.03 of the Distribution Agreement.

ARTICLE IV

TERM AND TERMINATION

ARTICLE V

DISPUTE RESOLUTION

ARTICLE VI

INSURANCE; INDEMNIFICATION

A party in its capacity as Provider shall not be responsible to a Recipient for damage to the Recipient's real or personal property at Recipient's premises, or any other place, when Recipient's property is in the care, custody or control of Provider.

All deductibles or self insured retentions, on policies of insurance required to be maintained under this Agreement, will be borne by the responsible parties as set forth in Sections 6.2 and 6.3 below.

ARTICLE VII

MISCELLANEOUS

If to HCS:

Varian Medical Systems, Inc.
3100 Hansen Way
Palo Alto, California 94304-1030

Attn: Chief Financial Officer

with a copy to:

Varian Medical Systems, Inc. 3100 Hansen Way
Palo Alto, California 94304-1030 Attn: General Counsel

If to IB:

Varian, Inc.
3120 Hansen Way
Palo Alto, California 94303-1030 Attn: Chief Financial Officer

with a copy to:

Varian, Inc.
3120 Hansen Way
Palo Alto, California 94303-1030 Attn: General Counsel

If to SEB:

Varian Semiconductor Equipment Associates, Inc. 35 Dory Road
Gloucester, Massachusetts 01930 Attn: Chief Financial Officer Telecopy (978) 281-3152

with a copy to:

Varian Semiconductor Equipment Associates, Inc. 35 Dory Road
Gloucester, Massachusetts 01930 Attn: General Counsel
Telecopy: (978) 281-3152

or at such other address as shall be furnished by any of the parties in a Notice. Any Notice shall be deemed to have been duly given or made when the Notice is received.

(a) No party to this Agreement shall (i) consolidate with or merge into any Person or permit any Person to consolidate with or merge into such party (other than a merger or consolidation in which the party is the surviving or continuing corporation), or (ii) sell, assign, transfer, lease or otherwise dispose of, in one transaction

or a series of related transactions, all or substantially all of its Assets, unless the resulting, surviving or transferee Person expressly assumes, by instrument in form and substance reasonably satisfactory to the other parties, all of the obligations of the party under this Agreement.

(b) Except as expressly provided in paragraph (a), neither this Agreement nor any of the rights, interests or obligations hereunder shall be assignable, directly or indirectly, by any party without the prior written consent of the other parties, and any attempt to so assign without such consent shall be void.

IN WITNESS WHEREOF, the parties hereto have caused this Transition Services Agreement to be executed as of the day and year first above written.

VARIAN ASSOCIATES, INC.

By: /s/ Robert A. Lemos
    --------------------------------------
    Name:  Robert A. Lemos
    Title: Vice President Finance and
           Chief Financial Officer

VARIAN, INC.

By: /s/ Arthur W. Homan
    --------------------------------------
    Name:  Arthur W. Homan
    Title: Secretary

VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.

By: /s/ Joseph B. Phair
    --------------------------------------
    Name:  Joseph B. Phair
    Title: Secretary