Exhibit 10.40

AMENDMENT NO. 2 TO AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDMENT NO. 2 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), dated as of August 11, 2010, is entered into by and between VARIAN
MEDICAL SYSTEMS, INC., a Delaware corporation (the “Borrower”), and BANK OF
AMERICA, N.A. (the “Lender”).

RECITALS

A.        The Borrower and the Lender are party to that certain Amended and
Restated Credit Agreement dated as of November 10, 2008 (as amended by Amendment
to Amended and Restated Credit Agreement dated July 14, 2009, as hereby amended
and as from time to time further amended, modified, supplemented, restated or
amended and restated, the “Credit Agreement”), pursuant to which the Lender has
extended certain credit facilities to the Borrower.

B.        The Borrower has requested that the Lender agree to certain amendments
with respect to the Credit Agreement, and the Lender has agreed to such request,
subject to the terms and conditions of this Amendment.

NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto hereby agree as follows:

1.        Defined Terms.   Unless otherwise defined herein, capitalized terms
used herein shall have the meanings, if any, assigned to such terms in the
Credit Agreement. As used herein, “Amendment Documents” means this Amendment,
the Credit Agreement (as amended by this Amendment), and each certificate and
other document executed and delivered by the Borrower pursuant to Section 5
hereof.

2.        Amendments to Credit Agreement.   Subject to the terms and conditions
hereof and with effect from and after the Effective Date, the definition of
“Commitment” in Section 1.01 of the Credit Agreement is amended by deleting the
reference to “$30,000,000” and inserting “$35,000,000” in lieu thereof.

3.        Representations and Warranties.   The Borrower hereby represents and
warrants to the Lender as follows:

  (a)        After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing.

  (b)        The execution, delivery and performance by the Borrower of this
Amendment and the other Amendment Documents have been duly authorized by all
necessary corporate and other action and do not and will not require any
registration with, consent or approval of, or notice to or action by, any Person
(including any Governmental Authority) in order to be effective and enforceable.

  (c)        All representations and warranties of the Borrower contained in
Article V of the Credit Agreement are true and correct in all material respects
on and as of the Effective

 

1

--------------------------------------------------------------------------------

Date after giving effect to this Amendment, except to the extent that any such
representation and warranty specifically relates to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date after giving effect to this Amendment.

  (d)        The Borrower is entering into this Amendment on the basis of its
own investigation and for its own reasons, without reliance upon the Lender or
any other Person.

  (e)        The obligations of the Borrower under the Credit Agreement and each
other Loan Document are not subject to any defense, counterclaim, set-off, right
of recoupment, abatement or other claim.

4.        Effective Date.   This Amendment will become effective on the date on
which each of the conditions precedent set forth in this Section 4 has been
satisfied (the “Effective Date”):

              (i)         The Lender shall have received from the Borrower a
duly executed original counterpart (or, if elected by the Lender, an executed
copy by telecopier, facsimile or other electronic imaging means (including
.PDF)) to this Amendment.

              (ii)        The Lender shall have received from the Borrower a
certificate signed by the secretary or assistant secretary of the Borrower,
dated the Effective Date, in form and substance satisfactory to the Lender, and
certifying evidence of the authorization of the execution, delivery and
performance by the Borrower of this Amendment.

              (iii)      The Lender shall have received, in form and substance
satisfactory to it, such additional approvals, consents, documents and other
information as the Lender shall reasonably request.

5.        Reservation of Rights.   The Borrower acknowledges and agrees that
neither the execution nor the delivery by the Lender of this Amendment shall
(a) be deemed to create a course of dealing or otherwise obligate the Lender to
execute similar amendments, consents or waivers under the same or similar
circumstances in the future or (b) be deemed to create any implied waiver of any
right or remedy of the Lender with respect to any term or provision of any Loan
Document.

6.        Miscellaneous.

  (a)        Except as expressly amended or modified hereby, all terms,
covenants and provisions of the Credit Agreement are and shall remain in full
force and effect and all references therein to such Credit Agreement shall
henceforth refer to the Credit Agreement as modified by this Amendment. This
Amendment shall be deemed incorporated into, and a part of, the Credit
Agreement.

  (b)        This Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. No third party
beneficiaries are intended in connection with this Amendment.

 

2

--------------------------------------------------------------------------------

  (c)        THIS AMENDMENT IS SUBJECT TO THE PROVISIONS OF SECTION 9.13 OF THE
CREDIT AGREEMENT RELATING TO GOVERNING LAW, SUBMISSION TO JURISDICTION AND
WAIVER OF VENUE AND THE RIGHT TO TRIAL BY JURY, THE PROVISIONS OF WHICH ARE BY
THIS REFERENCE INCORPORATED HEREIN IN FULL.

  (d)        This Amendment may be executed in any number of counterparts, each
of which shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this document (and any other document required
herein) may be delivered by any party hereto or thereto either in the form of an
executed original or an executed original sent by telecopier, facsimile or other
electronic imaging means (including .PDF) to be followed promptly by mailing of
a hard copy original, and the receipt by the Lender of a facsimile transmitted
document purportedly bearing the signature of the Borrower or one of the other
parties hereto, as applicable, shall bind the Borrower or such other party,
respectively, with the same force and effect as the delivery of a hard copy
original. Any failure by the Lender to receive the hard copy executed original
of such document shall not diminish the binding effect of receipt of the
facsimile transmitted executed original of such document of the party whose hard
copy page was not received by the Lender.

  (e)        This Amendment contains the entire and exclusive agreement of the
parties hereto with reference to the matters discussed herein. This Amendment
supersedes all prior drafts and communications with respect thereto. This
Amendment may not be amended except by a written agreement executed by the
Borrower and the Lender.

  (f)        If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or the
Credit Agreement, respectively.

  (g)        The Borrower covenants to pay to or reimburse the Lender, upon
demand, for all reasonable and documented out-of-pocket costs and expenses
incurred in connection with the development, preparation, negotiation, execution
and delivery, and enforcement of this Amendment.

  (h)        This Amendment shall constitute a “Loan Document” under and as
defined in the Credit Agreement.

[Remainder of this page intentionally left blank]

 

3

--------------------------------------------------------------------------------

  IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.

 

VARIAN MEDICAL SYSTEMS, INC.

By:

 

     /s/ Elisha W. Finney

Name:

 

Elisha W. Finney

Title:

  Corporate Senior Vice President and Chief Financial Officer

By:

 

     /s/ J.A. Thorson

Name:

 

J.A. Thorson

Title:

  Corporate Vice President, Finance and Treasurer

Signature Page 1 to Amendment No. 2 to Amended and Restated Credit Agreement

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A.

By:

 

     /s/ John C. Plecque

Name:

 

John C. Plecque

Title:

 

Senior Vice President

Signature Page 2 to Amendment No. 2 to Amended and Restated Credit Agreement