Document:

Tax Deed, dated May 2, 2007

 Exhibit 10.2 
 Dated 2 May 2007 
 (1) Blockbuster UK Limited 
 and 
 (2) The Game Group PLC 
  

 TAX DEED 
 relating to the sale and purchase of the entire issued 
 share capital of Games Station Limited 
  

 CMS Cameron McKenna LLP 
 Mitre House

 160 Aldersgate Street 
 London EC1A 4DD 
 T +44(0)20 7367 3000 
 F +44(0)20 7367 2000 
 Ref: HBO/MIT2.17b/108022.00003 

 Table of Contents 
  

					
	 1.
	  	Definitions and Interpretation	  	1
			
	 2.
	  	Covenant	  	5
			
	 3.
	  	Limitation of Covenantor’s Liability	  	5
			
	 4.
	  	Payment Date and Interest	  	8
			
	 5.
	  	Grossing up	  	9
			
	 6.
	  	Recovery from other persons	  	10
			
	 7.
	  	Overprovisions, Refunds and Savings	  	10
			
	 8.
	  	Purchaser’s Covenant	  	12
			
	 9.
	  	Corporation Tax Returns	  	12
			
	 10.
	  	Disputes and Conduct of Tax Claims	  	14
			
	 11.
	  	Group Relief	  	16
			
	 12.
	  	VAT	  	17
			
	 13.
	  	Transfer Pricing	  	19
			
	 14.
	  	Third Party Rights	  	19
			
	 15.
	  	General	  	20
			
		  	Schedule 1	  	21
			
		  	 The Companies
	  	21

  

 -i- 

 THIS DEED is made the 2nd day of May 2007 
 BETWEEN 
  

	(1)	Blockbuster UK Limited (registered in England with number 03688793) whose registered office is at Harefield Place, The Drive, Uxbridge, Middlesex, UB10 8AQ (the
“Covenantor”); 

  

	(2)	The Game Group PLC (registered in England with number 0875835) whose registered office is at Unity House, Telford Road, Basingstoke, Hampshire, RG21 6YJ (the
“Purchaser”). 

 RECITAL 
 By an Agreement (hereinafter referred to as the “Sale Agreement”) of even date herewith and made between the Covenantor (1) and the Purchaser (2) the Covenantor agreed to sell the whole of the issued share capital
of Games Station Limited to the Purchaser and the Covenantor agreed on completion of such sale to enter into this Deed. 
 THIS DEED WITNESSES
as follows: 
  

	1.	Definitions and Interpretation 

 In this Deed:

  

	1.1	Words and expressions defined in the Sale Agreement have the same meaning except where otherwise provided or unless there is something in the subject matter or context that is
inconsistent with them. 

  

	1.2	Defined terms: 

 “Company”
means each, any or all of the companies whose respective names, registered numbers and registered offices are set out in Schedule 1 as the context shall require; 
 “Corporation Tax” means the corporation tax chargeable under section 6 of the TA 88 at the rate generally applicable to such companies (disregarding the provisions of section 13 and section 13AA of
the TA 88) or tax of a similar nature if enacted in addition to or in substitution for corporation tax; 
 “Dispute” means
any Tax Claim where conduct is delegated to the Covenantor pursuant to sub-clause 10.2 of this Deed or where the Company is requested to take any action pursuant to sub-clause 10.3 of this Deed; 
 “Effective Rate of Corporation Tax” means in relation to any period the time weighted average of the rates of Corporation Tax for the
financial years falling wholly or partly in that period; 
 “Event” means any payment, transaction, act, omission or
occurrence of whatever nature whether or not the Company or the Purchaser is a party thereto and for the avoidance of doubt includes the execution of the Sale Agreement and completion of the sale of the Shares to the Purchaser; 
 “Group Relief” means: 
  

	 	(a)	losses or other amounts eligible for group relief in accordance with Chapter IV of Part X of the TA 88; and/or 

	 	(b)	the benefit of any amount of advance corporation tax which may be surrendered in accordance with section 240 of the TA 88; and/or 

  

	 	(c)	any refund of tax which may be surrendered under section 102 of the Finance Act 1989; and/or 

  

	 	(d)	eligible unrelieved foreign tax which may be surrendered in accordance with The Double Taxation Relief (Surrender of Relievable Tax Within a Group) Regulations 2001 (S.I. 2001
No. 1163); 

 “Group Reallocation” means: 
  

	 	(a)	the notional transfer of any asset in accordance with section 171A of the TCGA; and/or 

  

	 	(b)	the reallocation of any gain or loss accruing under section 179 of the TCGA in accordance with section 179A of the TCGA; and/or 

  

	 	(c)	the reallocation of a degrouping charge pursuant to paragraph 66 of Schedule 29 to the Finance Act 2002; and/or 

  

	 	(d)	the rollover of any gain or loss accruing under section 179 of the TCGA in accordance with section 179B of the TCGA; and/or 

  

	 	(e)	the rollover of any gain or loss pursuant to section 175 of the TCGA; 

 “Liability for Taxation” means: 
  

	 	(a)	any liability of the Company to make a payment of or in respect of Taxation whether or not the same is primarily payable by the Company and whether or not the Company has or may
have any right of reimbursement against any other person or persons; 

  

	 	(b)	the set-off or use against income, profits or gains earned, accrued or received or against any Tax chargeable in respect of an Event occurring on or before Completion of any Post
Completion Relief or Working Capital Relief in circumstances where, but for such set-off or use, the Company would have had a liability to make a payment of or in respect of Taxation for which the Purchaser would have been able to make a claim
against the Covenantor under this Deed in which case the amount of the Liability for Taxation shall be the amount of Taxation saved by the Company as a result of such set-off or use PROVIDED THAT, for the purposes of this Deed, it shall be assumed
that other Reliefs are, to the extent allowed by law, set-off or used in priority to Post Completion Reliefs and if it cannot be determined whether a Post Completion Relief or another Relief is used it shall be assumed that another Relief is used in
priority to a Post Completion Relief; and 

  

	 	(c)	the loss of any right to repayment of Taxation (including any repayment supplement) which is treated as an asset in the Final Adjustment Statement of the Company in which case the
amount of the Liability for Taxation shall be the amount of the right to repayment and any related repayment supplement; 

  

 -2- 

	 	(d)	the loss, reduction, modification or cancellation of a Working Capital Relief in which case the amount of the liability for Taxation shall be the amount of Taxation that would have
been saved but for such loss reduction, modification or cancellation; 

  

	 	(e)	any liability of the Company to pay for, or repay any amount paid to the Company for, any surrender of Group Relief made pursuant to an arrangement entered into on or before
Completion. 

 “Post Completion Relief” means any Relief or right to repayment of Taxation (including any
repayment supplement) which is not available to the Company before Completion but is available to the Company after Completion; 
 “Purchaser Associate” means: 
  

	 	(a)	the Purchaser; 

  

	 	(b)	the Company; and 

  

	 	(c)	any company or person (other than the Company) that may be treated for the purposes of any Taxation as being at any time after Completion either a member of the same group of
companies as the Purchaser or the Company or otherwise associated with the Purchaser or the Company; 

 “Relief” means any loss, relief, allowance, credit, exemption or set-off in respect of Taxation or any deduction in computing gross receipts, income, profits or gains for the purposes of Taxation; 
 “Seller Associate” means: 
  

	 	(a)	the Covenantor; 

  

	 	(b)	any company or person (other than the Company) that may be treated for the purposes of any Taxation at any time (whether before, on or after Completion) as being either a member of
the same group of companies as the Covenantor or otherwise associated with the Covenantor ; and 

  

	 	(c)	any company or person (other than the Company) that may be treated for the purposes of any Taxation as being at any time prior to Completion either a member of the same group of
companies as the Company or otherwise associated with the Company; 

 “Tax” or “Taxation”
means: 
  

	 	(a)	all forms of direct and indirect taxation and statutory, governmental, duties (including stamp duties), imposts, contributions, levies, withholdings or liabilities of the UK whether
levied by reference to income, profits, gains, net wealth, asset values, turnover, added value or other measure (including without limitation social security contributions and any other payroll taxes but not including local authority rates) however
imposed (whether by way of a withholding or deduction for on an account of tax or otherwise); and 

  

 -3- 

	 	(b)	any penalty, fine, surcharge or interest payable in connection with any Taxation within sub-clause (a) above other than to the extent attributable to the unreasonable delay or
default of the Company or the Purchaser after Completion or the failure of the Purchaser to comply with its obligations under the Sale Agreement or this Deed; 

 “Taxation Authority” means HM Revenue & Customs, the Inland Revenue, Customs & Excise, the Department for Work and
Pensions and any other governmental or other authority whatsoever competent to impose any Taxation in the United Kingdom or elsewhere; 
 “Taxation Statute” means any directive, statute, enactment, law or regulation wheresoever enacted or issued, coming into force or entered into providing for or imposing any Taxation and shall include orders, regulations,
instruments, bylaws or other subordinate legislation made under the relevant statute or statutory provision and any directive, statute, enactment, law, order, regulation or provision which amends, extends, consolidates or replaces the same or which
has been amended, extended, consolidated or replaced by the same; 
 “Tax Claim” means any assessment, self-assessment,
notice, demand, letter or other document issued or action taken by or on behalf of any Taxation Authority, the preparation or submission of any assessment, self-assessment, notice, letter or other document by the Company or the Purchaser or any
other matter or circumstance from which it appears that the Company or the Purchaser is or may be or may become subject to a Liability for Taxation or other liability in respect of which the Covenantor is or may be liable under this Deed or the
Warranties that relate to Tax and, for this purpose, the limitations in sub-clause 3.3 of this Deed shall be disregarded; and 
 “VAT” means value added tax in the UK and any equivalent tax on sales or turnover and any tax supplementing or replacing the same. 
 “Working Capital Relief” means any Relief taken into account in the Final Adjustment Statement. 
  

	1.3	The table of contents and headings and sub-headings are for convenience only and shall not affect the construction of this Deed. 

  

	1.4	Unless the context otherwise requires, words denoting the singular shall include the plural and vice versa and references to any gender shall include all other genders. References
to any person (which for the purposes of this Deed shall include natural persons, bodies corporate, unincorporated associations, partnerships, governments, governmental agencies and departments, statutory bodies or other entities, in each case
whether or not having a separate legal personality) shall include the person’s successors or assigns. 

  

	1.5	The words “other”, “include” and “including” do not connote limitation in any way. 

  

	1.6	References to schedules, clauses and sub-clauses are to (respectively) schedules to, and clauses and sub-clauses of this Deed (unless otherwise specified). 

 

 -4- 

	1.7	References to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, organisation, body, official or any legal concept,
state of affairs or thing shall in respect of any jurisdiction other than England be deemed to include that which most nearly approximates in that jurisdiction to the English legal term. 

  

	1.8	Any reference to “writing” or “written” includes faxes and any legible reproduction of words delivered in permanent and tangible form (but does not
include e-mail). 

  

	1.9	References to times of the day are (unless otherwise expressly provided) to London time and references to a day are to a period of 24 hours running from midnight on the previous
day. 

  

	1.10	References to gross receipts, income, profits or gains earned, accrued or received shall include any gross receipts, income, profits or gains deemed pursuant to the relevant
Taxation Statute to have been or treated or regarded as earned, accrued or received. 

  

	2.	Covenant 

 Subject as hereinafter provided the
Covenantor hereby covenants to pay to the Purchaser an amount equal to: 
  

	2.1	any Liability for Taxation resulting from or by reference to any Event occurring on or before Completion or in respect of any gross receipts, income, profits or gains earned,
accrued or received by the Company on or before Completion; 

  

	2.2	any Liability for Taxation for which the Company would not have been liable but for being treated as being or having been a member of the same group as or associated with any Seller
Associate for the purposes of any Tax; 

  

	2.3	any liability of the Company to pay an amount to the Covenantor pursuant to clause 13; 

  

	2.4	any amount which the Company is required by HM Revenue & Customs to pay or repay to HM Revenue & Customs in connection with any amount which it (or the Relevant
Representative Member) has previously recovered by way of credit or repayment from HM Revenue & Customs in relation to incorrectly claimed input tax incurred by it (or the Relevant Representative Member) on any acquisition made by it of
second hand goods prior to Completion; and 

  

	2.5	all reasonable third party costs and expenses properly incurred and payable by the Company or the Purchaser in connection with any Liability for Taxation under this clause 2 or
otherwise in successfully taking or defending any action under this Deed. 

  

	3.	Limitation of Covenantor’s Liability 

  

	3.1	The covenant given by clause 2 above shall not cover any Liability for Taxation or other liability: 

  

	 	3.1.1	to the extent that a provision or reserve in respect of such liability is made in the Final Adjustment Statement or to the extent that such liability is taken into account in
computing the amount of any such provision or reserve; or 

  

 -5- 

	 	3.1.2	to the extent that such liability was discharged (whether by payment or by the use or set-off of any Relief) on or before Completion and such discharge was taken into account in the
Final Adjustment Statement; or 

  

	 	3.1.3	to the extent that the Purchaser has made recovery in respect of that liability by means of a claim for breach of any of the Warranties under the Sale Agreement or pursuant to any
other agreement with the Covenantor or any other person or to the extent that recovery has already been made under this Deed in respect of the same subject matter; or 

  

	 	3.1.4	to the extent such liability arises or is increased as a result of any increase in rates of Taxation, variation in the method of applying or calculating the rate of Taxation, any
change in law, rule, regulation or published practice, any change of published interpretation on the basis of case law or any withdrawal of any extra-statutory concession by a Taxation Authority made after the date of the Completion; or

  

	 	3.1.5	to the extent that such liability arises as a result of a change after Completion in any accounting practice or principles, accounting policy or any Taxation reporting practice of
any Purchaser Associate other than as required to bring such accounting practice into line with generally accepted accounting practice; or 

  

	 	3.1.6	to the extent that such liability arises directly or indirectly as a result of: 

  

	 	(a)	the payment of any unusual or abnormal dividend by the Company after Completion; 

  

	 	(b)	the change of the date to which the Company makes up its accounts; or 

  

	 	(c)	the cessation of, or any change in the nature or conduct of, any business carried on by the Company occurring after Completion; or 

  

	 	3.1.7	to the extent that such liability is attributable to the Company ceasing to be entitled to the small companies’ rate of corporation tax whether by virtue of an increase in the
level of profits for the accounting period during which Completion takes place that are attributable to the period following Completion or by virtue of an increase in the number of associated companies of the Company after Completion; or

  

	 	3.1.8	to the extent that such liability arises or is increased due to the fact that any instalment of corporation tax (within the meaning of section 6 of the TA 88) paid prior to
Completion pursuant to the Corporation Tax (Instalment Payments) Regulations 1998 (SI 1998/3175) is insufficient or such liability comprises interest or penalties arising by virtue of an underpayment of tax prior to Completion, insofar as such
underpayment would not have been an underpayment but for a bona fide estimate made prior to Completion of the amount of income, profits or gains to be earned, accrued or received after Completion proving to be incorrect, or but for any other Event
or Events occurring after Completion; or 

  

	 	3.1.9	 to the extent that such liability would not have arisen but for an act, omission or transaction by or on behalf of any Purchaser Associate or any of its directors,
employees or agents effected after Completion other than in the case of the Company any such act, omission or transaction carried out or effected under a 

  

 -6- 

	 	 
legally binding commitment created on or before Completion or carried out or effected in the ordinary course of business of the Company as carried on at
Completion; or 

  

	 	3.1.10	to the extent that such liability arises by virtue of any claim, election, surrender or disclaimer made or notice or consent given or by virtue of any other thing done after
Completion by or on behalf of any Purchaser Associate or any of its directors, employees or agents (including the disclaimer of the whole or part of any Relief) other than where the making, giving or doing of such thing is taken into account in the
preparation of the Final Adjustment Statement; or 

  

	 	3.1.11	to the extent that such liability would not have arisen or would have been reduced but for a failure or omission by or on behalf of any Purchaser Associate or any of its directors,
employees or agents after Completion to make any election, claim, surrender or disclaimer, or give any notice or consent or do any other thing, in relation to Taxation, the anticipated making giving or doing of which is taken into account in
computing any provision or reserve for Taxation or otherwise in preparing the Final Adjustment Statement and where the need for such making, giving or doing was notified in writing to the Purchaser; or 

  

	 	3.1.12	to the extent that such liability arises from an act, omission or transaction of the Covenantor or the Company prior to Completion occurring at the request or direction of, or with
the consent of the Purchaser or its advisers; or 

  

	 	3.1.13	to the extent that such liability is in respect of stamp duty or stamp duty reserve tax payable on the transfer or agreement to transfer the Shares pursuant to the Sale Agreement;
or 

  

	 	3.1.14	to the extent that such liability has been made good by insurers or otherwise compensated for without cost to the Purchaser or the Company; or 

  

	 	3.1.15	to the extent that any income, profits or gains to which such liability is attributable are earned or received by the Company or accrued to the Company but are not reflected in the
Final Adjustment Statement; or 

  

	 	3.1.16	to the extent that such liability arises or is increased as a consequence of any failure by the Purchaser or (after Completion) by the Company to comply with its obligations under
the Sale Agreement or this Deed including for the avoidance of doubt the Purchaser’s obligations to procure that the Company carries out any act or does anything; or 

  

	 	3.1.17	to the extent that such liability could be or could have been extinguished or reduced by the use of any Relief (other than a Post Completion Relief) available to the Company or made
available at no consideration by any Seller Associate and for this purpose any Relief arising in respect of an accounting period falling partly before and partly after Completion shall be apportioned on a time basis unless some other basis is more
reasonable and any Relief shall be deemed, so far as possible, to be used in such a way as to reduce to the maximum extent possible the Covenantor’s liability under this Deed; or 

  

	 	3.1.18	 unless specific written notice of such liability specifying in reasonable detail the circumstances giving rise to such Liability for Taxation has been served on the
Covenantor on or prior to one month after the Sixth anniversary of the end of the 

  

 -7- 

	 	 
accounting period in which Completion takes place and any claim made by such notice shall (if it has not previously been satisfied, settled or withdrawn) be
deemed to be withdrawn and shall become fully barred and unenforceable (and the Covenantor’s liability in respect of such claim shall absolutely terminate) at the expiry of the period of 6 months from the date of giving notice of such claim
unless legal proceedings in respect thereof have been commenced by the issuing and service of such proceedings against the Covenantor. 

  

	 	3.2	Without prejudice and in addition to any limitations of the Covenantor’s liability in the Sale Agreement, the limitations set out in sub-clause 3.1 shall operate to limit or
reduce the liability of the Covenantor in respect of claims for breach of the Warranties that relate to Tax. 

  

	 	3.3	The Covenantor shall not be liable in respect of any individual claim under this Tax Deed or a series of related claims or claims arising from substantially the same facts or
circumstances unless (and then only to the extent that) the amount that would otherwise be recoverable from the Covenantor in respect of such claim or series of related claims or claims arising from substantially the same facts or circumstances
exceeds £35,000. For the purposes of this paragraph, where a claim relates to more than one Event which would separately constitute a claim, it shall be treated as a separate claim in respect of each such Event. 

  

	4.	Payment Date and Interest 

  

	4.1	Where the Covenantor is liable to make any payment under clause 2, the due date for the making of that payment (the “Due Date”) shall be the date falling 7 days
after the Purchaser has served a notice on the Covenantor demanding that payment (accompanied with supporting receipts or other proof of liability) or, if later: 

  

	 	4.1.1	in a case that involves a Liability for Taxation falling within sub-clause (a) of that definition (an actual payment of Taxation), the last date on which the Taxation in
question has to be paid to the relevant Taxation Authority in order to prevent a liability to interest or a fine, surcharge or penalty from arising in respect of the Liability for Taxation in question; or 

  

	 	4.1.2	in any case that involves a Liability for Taxation falling within sub-clause (b) of that definition (the set-off or use of a Post Completion Relief), the date upon which the
Taxation saved by the Company would have been required to be paid to the relevant Taxation Authority; or 

  

	 	4.1.3	in any case that involves a Liability for Taxation falling within sub-clause (c) of that definition (the Loss of any right to repayment of Taxation), the date upon which the
repayment was due from the relevant Taxation Authority. 

  

	 	4.1.4	in any case that involves a Liability for Taxation falling with sub-clause (d) of that definition (loss of Working Capital Relief) the last date on which the Taxation which
would otherwise have been saved has to be paid to the relevant Taxation Authority in order to prevent a liability to interest or a fine, surcharge or penalty from arising in respect of the Liability for Taxation in question: or

  

	 	4.1.5	in any case that involves a liability for Taxation falling within sub-clause (e) of that definition (group relief) the date on which such payment or repayment is due.

  

 -8- 

	4.2	If a payment of Taxation prior to the date specified in sub-clause 4.1 would avoid or minimise interest or penalties, the Covenantor may choose to pay the whole or part of the
amount on an earlier date or dates in which case the Purchaser shall procure that the Taxation in question is promptly paid to the relevant Taxation Authority. The Covenantor may, with the Purchaser’s consent (not to be unreasonably withheld or
delayed), discharge an amount due under this Deed by making a direct payment to a Taxation Authority. 

  

	4.3	Any dispute as to the amount specified in any notice served on the Covenantor under sub-clause 4.1 or as to the Due Date shall, unless the parties agree otherwise, be determined by
a firm of chartered accountants agreed between the parties (or failing such agreement by a firm of independent accountants nominated by the President for the time being of the Institute of Chartered Accountants of England and Wales), acting as
expert and not as arbitrator (the costs of that determination being shared equally by the Covenantor and the Purchaser). 

  

	4.4	If any sum required to be paid by the Covenantor under this Deed is not paid on the Due Date, then, except to the extent that the Covenantor’s liability under clause 2
compensates the Purchaser for the late payment by virtue of it extending to interest and penalties, such sum shall bear interest (which shall accrue after as well as before any judgment for the same) at the rate of 1 per cent per annum over the
base rate from time to time of HSBC Bank plc. The interest will accrue from day to day on the basis of the actual number of days elapsed and a 365-day year and shall be compounded 6 monthly. 

  

	5.	Grossing up 

  

	5.1	Any sum payable by the Covenantor to the Purchaser under this Deed or (as the case may be) by the Purchaser to the Covenantor shall be paid free and clear of any deduction or
withholding whatsoever, save only as may be required by law. 

  

	5.2	Subject to sub-clause 5.4, if any deduction or withholding is required by law to be made from any payment by a party under this Deed (other than a payment of interest made pursuant
to sub-clause 4.4), the payer shall increase the amount of the payment by such additional amount as is necessary to ensure that the net amount received and retained by the payee (after taking account of any deduction or withholding) is equal to the
amount which it would have received and retained had the payment in question not been subject to any deduction or withholding PROVIDED THAT, to the extent that any additional amount paid under this sub-clause 5.2 results in the payee obtaining a
Relief, the payee shall pay to the payer, within 3 Business Days of obtaining the benefit of the Relief, an amount equal to the lesser of the value of the Relief obtained and the additional sum paid under this sub-clause 5.2.

  

	5.3	Subject to sub-clause 5.4, if the payee is subject to Taxation in respect of any payment under this Deed (other than a payment of interest made pursuant to sub-clause 4.4), the
payer shall increase the amount of the payment by such additional amount as is necessary to ensure that the net amount received and retained by the payee (after taking account of all Taxation) is equal to the amount which it would have received and
retained had the payment in question not been subject to Taxation PROVIDED THAT, to the extent that any additional amount paid under this sub-clause 5.3 results in the payee obtaining a Relief, the payee shall pay to the payer, within 3 Business
Days of obtaining the benefit of the Relief, an amount equal to the lesser of the value of the Relief obtained and the additional sum paid under this sub-clause 5.3. 

  

 -9- 

	5.4	If the Purchaser assigns the benefit of this Deed to any other party or if the payee is not tax resident in the United Kingdom or has some connection with a territory outside the
United Kingdom, sub-clause 5.2 and sub-clause 5.3 shall only apply to the extent that they would have applied had the benefit not been so assigned, had the payee been tax resident in the United Kingdom and not had any connection with a territory
outside the United Kingdom. 

  

	6.	Recovery from other persons 

  

	6.1	Where the Purchaser or the Company is or becomes entitled or may be entitled to recover from some other person not being a Purchaser Associate (but including any Taxation Authority)
any amount which is referable to a Liability for Taxation or other liability which has resulted or may result in a payment being made by the Covenantor under this Deed or the Tax Warranties, the Purchaser shall or shall procure that the Company
shall: 

  

	 	6.1.1	notify the Covenantor of its entitlement promptly (and in any event within 10 Business Days); and 

  

	 	6.1.2	if required by the Covenantor and, subject to the Purchaser and the Company being indemnified by the Covenantor against any Taxation that may be suffered on receipt of that amount
and any reasonable third party costs and expenses properly incurred in recovering that amount, take or procure that the Company promptly takes all reasonable steps to enforce that recovery. 

  

	6.2	If the Purchaser or the Company recovers any amount referred to in sub-clause 6.1 (whether by payment, credit, discount, Relief or otherwise) then the Purchaser shall account to the
Covenantor within 3 Business Days for the lesser of: 

  

	 	6.2.1	any amount recovered (including any related interest or related repayment supplement) less any Taxation suffered in respect of that amount and any reasonable third party costs and
expenses properly incurred in recovering that amount (save to the extent that that amount has already been made good by the Covenantor under sub-clause 6.1.2); and 

  

	 	6.2.2	the aggregate of amounts paid by the Covenantor under clause 2 of this Deed or in relation to the Tax Warranties (to the extent not previously refunded under this Deed); and

 any amount recovered and not paid to the Covenantor shall be carried forward and set-off against any future payment due from
the Covenantor under this Deed or the Tax Warranties. 
  

	6.3	The Covenantor shall be kept fully informed of the progress of any action taken in accordance with this clause 6 and shall be promptly provided with copies of all relevant
correspondence and documentation. 

  

	7.	Overprovisions, Refunds and Savings 

  

	7.1	If the auditors of the Company for the time being (the “Auditors”) (at the Covenantor’s request and expense) determine in writing: 

  

	 	7.1.1	that any provision for Taxation in the Final Adjustment Statement (including any provision for deferred Taxation) is an overprovision (an “Overprovision”); or

  

 -10- 

	 	7.1.2	that any refund, credit or repayment of Taxation has arisen or will arise in respect of any gross receipts, income, profits or gains earned, accrued or received by the Company
before Completion (a “Refund”); or 

  

	 	7.1.3	that any Liability for Taxation or other liability which has resulted in a payment being made or becoming due from the Covenantor under this Deed or in respect of the Tax Warranties
has given or will give rise to a repayment, Relief or tax saving for the Purchaser or the Company (or would have given rise to a repayment, Relief or tax saving but for it being set-off against another liability) and that the repayment, Relief or
tax saving is attributable to the Liability for Taxation or other liability in question and which would not otherwise have arisen (a “Saving”); 

 then the Overprovision, Refund or Saving will be dealt with in accordance with this clause 7. 
  

	7.2	If the Purchaser or any Company discovers that there has been an Overprovision, Refund or Saving, the Purchaser shall promptly give written notice thereof to the Covenantor such
notice to include reasonably sufficient details of such Overprovision, Refund or Saving and the Purchaser will use its reasonable endeavours to procure that the Auditors deal expeditiously with a request for a determination as to whether an
Overprovision, Refund or Saving has arisen or will arise and will procure that the Company provides all assistance, documents and other information as may be reasonably required by the Auditors for that purpose. 

  

	7.3	The amount of the Overprovision, Refund or Saving (as determined by the Auditors) less any reasonable third party costs properly incurred by the Company or the Purchaser in
obtaining the Overprovision, Refund or Saving: 

  

	 	7.3.1	shall first be set-off against any payment then due from Covenantor under this Deed or in respect of the Tax Warranties; and 

  

	 	7.3.2	to the extent there is an excess, shall be promptly (and in any event within 10 Business Days) refunded up to the amount of any previous payment or payments made by the Covenantor
under this Deed or in respect of the Tax Warranties (and not previously refunded under this sub-clause); and 

  

	 	7.3.3	to the extent that the excess is not exhausted, be carried forward and set-off against any future payment or payments that become due from the Covenantor under this Deed or in
respect of the Tax Warranties. 

  

	7.4	To the extent that an Overprovision, Refund or Saving has not, at a time when there is both no outstanding claim and no further claims which can be made by the Purchaser against the
Covenantor under this Deed, been set-off, it shall forthwith be repaid to the Covenantor. 

  

	7.5	Where any determination in relation to an Overprovision, Refund or Saving has been made, the Covenantor or the Purchaser may request the Auditors (at the expense of the party making
the request) to review such determination in the light of all relevant circumstances including facts which have become known only since such determination and to determine whether such determination remains correct and whether the amount that was
the subject of such determination should be amended. If the Auditors determine that the amount should be amended, an adjusting payment shall be made as soon as practicable by the Covenantor or (as the case may be) to the Covenantor.

  

 -11- 

	7.6	If any dispute arises as to whether there is or has been any Overprovision, Refund or Saving, such dispute shall be referred for determination to a firm of chartered accountants
agreed between the Covenantor and the Purchaser (or failing such agreement to a firm of independent accountants nominated by the President for the time being of the Institute of Chartered Accountants of England and Wales), who shall act as expert
and not as arbitrator (the costs of that determination being shared equally by the Covenantor and the Purchaser). 

	

	7.7	The Purchaser shall procure that all reasonable steps are taken within a reasonable time to maximize any Overprovision, Refund or Saving. 

  

	8.	Purchaser’s Covenant 

  

	8.1	Save to the extent that the Purchaser could claim payment of such amount under this Deed or the Tax Warranties but no actual payment has been made by the Covenantor or to the extent
that an amount in respect of Taxation has been recovered by the Covenantor or any Seller Associate under any relevant Taxation Statute (and the Covenantor shall procure that no such recovery is sought to the extent that payment is made hereunder),
the Purchaser hereby covenants to pay to the Covenantor an amount equal to: 

  

	 	8.1.1	any liability or increased liability to Taxation of any Seller Associate as the result of a failure by the Company or any Purchaser Associate to discharge any Taxation (including
any VAT attributable to supplies made by the Company); 

  

	 	8.1.2	any liability or increased liability to Taxation of a Seller Associate as a result of the effecting by a Purchaser Associate of any such payment or transfer of assets as constitutes
the receipt by another person of an abnormal amount by way of dividend (as defined in section 709 of the TA 88); and 

  

	 	8.1.3	any costs and expenses incurred by a Seller Associate in connection with a liability under this clause 8. 

  

	8.2	The provisions of clause 4 (Payment Date and Interest), Clause 5 (Grossing up) and clause 10 (Disputes and Conduct of Tax Claims) shall apply to the covenant contained in this
clause 8 as they apply to the covenant in clause 2 with references to the Covenantor being replaced with references to the Purchaser and vice versa and with any other necessary modifications. 

  

	9.	Corporation Tax Returns 

  

	9.1	Subject to sub-clause 9.2, for all accounting periods ended on or before Completion, the Covenantor or its duly authorised agents shall, at the Covenantor’s cost and expense up
to an amount of £50,000 with any further amount required to be borne by the Company, prepare and submit the tax returns and computations of the Company for accounting periods ending on or before Completion (the “Pre Completion
Returns”) and shall prepare and submit all related documentation and correspondence and shall have conduct of the negotiation and agreement of the Pre Completion Returns and all Taxation matters (excluding the payment of Taxation) related
to those periods. 

  

	9.2	The Covenantor shall or shall procure that its duly authorised agents shall: 

  

	 	9.2.1	submit any Pre Completion Return which has not before Completion been submitted to the applicable Tax Authority to the Purchaser at least 21 days before the date upon which it is
required to be filed with the applicable Taxation Authority without incurring interest and penalties; 

  

 -12- 

	 	9.2.2	take account of all reasonable comments made by the Purchaser in relation to the Pre Completion Returns; and 

  

	 	9.2.3	take all reasonable steps to ensure that the Pre Completion Returns are prepared and agreed with the applicable Taxation Authority without unreasonable delay.

  

	9.3	The Purchaser shall procure that: 

  

	 	9.3.1	the Pre Completion Returns and other documentation mentioned in sub-clause 9.1 shall, subject to clause 9.2 to the extent not authorised signed or submitted before Completion, be
authorised, signed and, if required, submitted to the applicable Taxation Authority without amendment or with such amendments as the Covenantor agrees PROVIDED THAT the Purchaser shall not be obliged to procure the signing or submission of any Pre
Completion Return that is not full, true and accurate in all material respects; 

  

	 	9.3.2	the Company makes or gives all claims, elections, surrenders, disclaimers, notices or consents that have been prepared by the Covenantor or its duly authorised agents pursuant to
sub-clause 9.1 (including without limitation but subject to clause 11 claims, elections, surrenders, disclaimers, notices or consents related to Group Relief or Group Reallocation) provided that such claims, elections, surrenders, disclaimers,
notices or consents do not result in any greater Tax or other Liability for Taxation of the Company than provided in the Final Adjustment Statement; 

  

	 	9.3.3	the Company gives to such person or persons as may for the time being be nominated by the Covenantor authority to prepare the Pre Completion Returns and to have conduct of related
Taxation matters and confirms such authority to any relevant Taxation Authority; 

  

	 	9.3.4	the Company and its agents, officers or employees give (without charge) the Covenantor or its agents all such assistance as may reasonably be required to agree the Pre Completion
Returns and related Taxation matters with the applicable Taxation Authority or to enable any Seller Associate to comply with its own Taxation obligations or facilitate the settlement or management of its own Taxation affairs, including (without
limitation) providing access to the personnel, books, accounts and records of the Company and providing copies of relevant documentation; and 

  

	 	9.3.5	the Covenantor is promptly (and in any event within 10 Business Days) sent a copy of any communication from any Taxation Authority insofar as it relates to the Pre Completion
Returns or related Taxation affairs of the Company. 

  

	9.4	 The Purchaser or its duly authorised agents shall prepare the tax returns and computations of the Company for the first accounting period ending after Completion
and shall procure that such returns and computations are, so far as it is reasonable to do so, prepared on a basis that is consistent with the manner in which the returns and computations of the Company were prepared for accounting periods ended
prior to Completion. The Purchaser or its duly authorised agents shall submit such returns and computations together with any replies to enquiries from a Taxation Authority in draft form to the Covenantor for 

  

 -13- 

	 	 
comment at least 21 days prior to the date upon which such returns and computations are required to be filed with the applicable Taxation Authority without
incurring interest and penalties and shall take reasonable account of all comments made by the Covenantor. 

  

	9.5	Notwithstanding any other provision in this clause 9 and save always as may be required by law, the Purchaser shall not and shall procure that no Purchaser Associate or any of its
directors, employees or agents shall, without the prior written consent of the Covenantor (not to be unreasonably withheld or delayed), submit any correspondence or return or send any other document to a Taxation Authority or do any other thing
where any Purchaser Associate or any of its directors, employees or agents is aware or could reasonably be expected to be aware that submitting such correspondence or return or sending such document or doing such other thing will or is likely to:

  

	 	9.5.1	give rise to, or increase, a claim under this Deed; or 

  

	 	9.5.2	prejudice or reduce the availability of any Group Relief surrendered or to be surrendered by any Seller Associate; or 

  

	 	9.5.3	prevent or limit any Group Reallocation; or 

  

	 	9.5.4	otherwise adversely affect the Taxation position of any Seller Associate; 

 without first affording the Covenantor a reasonable opportunity to comment thereon and without taking account of any comments received so far as it is reasonable to do so. 
  

	9.6	For the avoidance of doubt, this clause 9 shall not apply or shall cease to apply to any matter that is or becomes the subject of a Tax Claim and that is therefore governed by
clause 10 of this Deed. 

  

	9.7	The Covenator’s rights under this clause cease if the Covenantor fails to comply with any of its obligations under this clause 9 or if the Covenantor takes corporate action or
other steps are taken or legal proceedings are started for its winding-up, dissolution, administration or re-organisation or for the appointment of a receiver, administrator, trustee or similar officers of it or of any of its assets.

  

	9.8	This Clause 9 shall not impose any obligation on the Purchaser if the Covenantor or the Company has committed an act or is responsible for an omission which constitutes fraudulent
or negligent conduct. 

  

	9.9	The Covenantor will use all reasonable endeavours to agree the Tax matters for which it is responsible under clause 9.1 as soon as reasonably practicable and will deal with such
matters promptly and diligently. 

  

	10.	Disputes and Conduct of Tax Claims 

  

	10.1	If the Purchaser or the Company shall become aware of a Tax Claim (or if the Purchaser or the Company shall become aware that any surrender of Group Relief or Group Reallocation
made between the Company and any Seller Associate may be ineffective) the Purchaser shall or shall procure that the Company shall as soon as possible (and in any event within 10 Business Days) give written notice thereof to the Covenantor such
notice to include reasonably sufficient details of such Tax Claim or surrender of Group Relief or Group Reallocation, the due date for any payment and the time limits for any appeal and, so far as practicable, the amount of any claim or intended
claim against the Covenantor under this Deed. 

  

 -14- 

	10.2	Subject to sub-clause 10.4, if the Covenantor so directs in writing, the conduct of a Tax Claim shall be delegated to the Covenantor upon such terms as may be agreed from time to
time between the Purchaser and the Covenantor PROVIDED THAT, unless the Purchaser and the Covenantor specifically agree otherwise in writing, the following terms shall be deemed to be incorporated into any such agreement: 

 

	 	10.2.1	all written communications pertaining to the Dispute which are transmitted to the relevant Taxation Authority shall be copied to the Purchaser; 

  

	 	10.2.2	the Covenantor shall keep the Purchaser informed of the material progress of any Dispute; 

  

	 	10.2.3	the Covenantor shall make no settlement or compromise of the Dispute or agree any matter in the conduct of the Dispute which is in its reasonable opinion likely to have a material
adverse effect on the future liability to Taxation of the Company or of the Purchaser without the prior approval of the Company and the Purchaser (not to be unreasonably withheld or delayed); 

  

	 	10.2.4	the Purchaser shall procure that the Company gives to such person or persons as may for the time being be nominated by the Covenantor authority to conduct the Dispute and confirms
such authority to any relevant Taxation Authority; 

  

	 	10.2.5	the Purchaser shall and shall procure that the Company and its agents, officers or employees shall give (without charge) the Covenantor or its agents all such assistance as may
reasonably be required to conduct the Dispute, including (without limitation) providing access to the personnel, books, accounts and records of the Company, providing copies of relevant documentation and requiring personnel to provide statements and
proofs of evidence and to attend at any trial or hearing to give evidence or otherwise. 

  

	10.3	Subject to sub-clause 10.4, where conduct of a Tax Claim is not delegated to the Covenantor pursuant to sub-clause 10.2, if the Covenantor shall indemnify the Company to the
Purchaser’s reasonable satisfaction against all liabilities, reasonable third party costs, damages or expenses which may be properly incurred thereby including any additional Liability for Taxation, the Purchaser shall and shall procure that
the Company shall take such action as the Covenantor may request by notice in writing given to the Company and the Purchaser to avoid, dispute, defend, resist, appeal, compromise or settle such Tax Claim. 

  

	10.4	Subject to clause 10.5, if the Covenantor does not request that conduct of a Tax Claim be delegated to the Covenantor in accordance with sub-clause 10.2 and does not request that
the Purchaser or the Company take any action under sub-clause 10.3 of this Deed within a period of time that is reasonable having regard to the nature of the Tax Claim and the existence of any time limit in relation to avoiding, disputing,
defending, resisting, appealing or compromising such Tax Claim or if the Covenantor fails to indemnify the Company within a reasonable period of time or if the Covenantor notifies the Purchaser or the Company to the effect that it no longer wishes
to pursue the Dispute, the Purchaser shall have the conduct of a Tax Claim and shall be free to reach a reasonable settlement or compromise PROVIDED THAT the Covenantor shall promptly be sent a copy of all correspondence and documentation relating
to the Tax Claim. 

  

 -15- 

	10.5	Notwithstanding any other provision in this clause 10 and save always as may be required by law, the Purchaser shall not and shall procure that no Purchaser Associate or any of its
directors, employees or agents shall, without the prior written consent of the Covenantor (not to be unreasonably withheld or delayed), submit any correspondence or return or send any other document to a Taxation Authority or do any other thing
where any Purchaser Associate or any of its directors, employees or agents is aware or could reasonably be expected to be aware that submitting such correspondence or return or sending such document or doing such other thing will or is likely to:

  

	 	10.5.1	give rise to, or increase, a claim under this Deed; or 

  

	 	10.5.2	prejudice or reduce the availability of any Group Relief surrendered or to be surrendered by any Seller Associate; or 

  

	 	10.5.3	prevent or limit any Group Reallocation; or 

  

	 	10.5.4	otherwise adversely affect the Taxation position of any Seller Associate; 

 without first affording the Covenantor a reasonable opportunity to comment thereon and without taking account of any comments received so far as it is reasonable to do so. 
  

	10.6	The Covenator’s rights under this clause cease if the Covenantor fails to comply with any of its obligations under this clause 10 or if the Covenantor takes corporate action or
other steps are taken or legal proceedings are started for its winding-up, dissolution, administration or re-organisation or for the appointment of a receiver, administrator, trustee or similar officers of it or of any of its assets.

  

	10.7	This Clause 10 shall not impose any obligation on the Purchaser if the Covenantor or the Company has committed an act or is responsible for an omission which constitutes fraudulent
or negligent conduct. 

  

	11.	Group Relief 

  

	11.1	Notwithstanding the generality of this clause 11, if the Covenantor shall become liable to make any payment under clause 2 of this Deed or in respect of the Tax Warranties, the
Covenantor may at its option surrender or procure the surrender, (without payment) to the Company of Group Relief or make or procure a Group Reallocation or make or procure a payment of an amount not exceeding the “available compensating
adjustment” determined in accordance with paragraph 7A(3) of Schedule 28AA to the TA 88. To the extent that the Liability for Taxation giving rise to the liability under clause 2 of this Deed is reduced or eliminated thereby or to the extent
that a payment is made, there shall be a corresponding reduction or elimination of the Covenantor liability under clause 2 of this Deed. The Purchaser shall procure that the Company shall promptly (and in any event within any applicable statutory
time limit) take such steps as may reasonably be required by the Covenantor to facilitate or permit such a surrender of Group Relief, Group Reallocation or payment. 

  

	11.2	 Subject to the following provisions of this clause 11 and without prejudice to the generality of clause 9 the Purchaser shall procure that the Company shall, in
respect of any time or period falling prior to Completion (which for the purposes of this clause 11 shall include for 

  

 -16- 

	 	 
the avoidance of doubt any overlapping period pursuant to section 403A of the TA 88), make or give any claim, election, surrender, notice or consent (whether
unconditional or conditional, whether or not forming part of any other return or tax document, whether provisional or final, and including amendment to or withdrawal of any earlier claim, election, surrender, notice or consent) as the Covenantor
shall direct in connection with any surrender of Group Relief or Group Reallocation by or to any Seller Associate to or by (as the case may be) the Company. 

  

	11.3	Where the Company enters into any Group Relief or Group Reallocation arrangement (an “Arrangement”) pursuant to sub-clause 11.2 and makes a saving of Taxation or
otherwise receives a Taxation benefit or Relief that would not have arisen but for the Arrangement in question then, other than to the extent that such saving, benefit or Relief is treated as an asset or is assumed in computing the Completion
Working Capital, the Covenantor may require the Company to make a payment to the relevant Seller Associate in relation to the Arrangement up to a maximum amount as leaves the Company in the same net after-Tax position as if the Arrangement had not
been entered into. The Covenantor shall specify the due date for the making of any such payment by the Company PROVIDED THAT the specified due date must not be such as to leave the Company in a cashflow position that is worse than if the Arrangement
in question had not been entered into. 

  

	11.4	Where the Company enters into any Arrangement pursuant to sub-clause 11.2 and has a Taxation liability that would not have arisen but for the Arrangement in question (or a Relief
that would have been available to the Company but for the Arrangement in question ceases to be available or is reduced) then, other than to the extent that such Taxation liability or the unavailability or reduction in the Relief is assumed in
computing the Completion Working Capital, the Covenantor shall make or shall procure that the relevant Seller Associate makes a payment to the Company in relation to the Arrangement of a minimum amount as leaves the Company in the same net after-Tax
position as if the Arrangement had not been entered into. The Covenantor shall specify the due date for the making of any such payment to the Company PROVIDED THAT the specified due date must not be such as to leave the Company in a cashflow
position that is worse than if the Arrangement in question had not been entered into. 

  

	11.5	Clause 7 shall not apply to any Taxation refund to the extent that a payment is made under this clause 11 to any Seller Associate that is attributable to that Taxation refund.

  

	12.	VAT 

  

	12.1	In this clause 12 the following expressions shall have the following meanings: 

  

	 	12.1.1	“Exit Date” means such date as HM Revenue & Customs specifies by notice to the Company, the Covenantor or the Representative Member as being the date from
which it shall terminate the treatment of the Company as a member of the VAT Group; 

  

	 	12.1.2	“Notional VAT Liability” or “Notional VAT Credit” of the Company for the Relevant VAT Period means (in the case of a Notional VAT Liability) the
amount of VAT for which the Company would have been liable to account to HM Revenue & Customs for the Relevant VAT Period or (in the case of a Notional VAT Credit) the amount of VAT which the Company would have been entitled to reclaim from
HM Revenue & Customs for the Relevant VAT Period if (in either such case) the Company had been separately registered for VAT purposes throughout the Relevant VAT Period but there were disregarded any supply made to or by the Company by or
to any member of the VAT Group; 

  

 -17- 

	 	12.1.3	“Relevant VAT Period” means, in respect of the Company, the period (if any) from the day after the date of Completion to the Exit Date, which shall, for the
purposes of this clause 12 be assumed to constitute a prescribed accounting period (as defined in VATA); 

  

	 	12.1.4	“Representative Member” means Blockbuster Entertainment Limited (registered in England with number 02111417) whose registered office is at Harefield Place, The
Drive, Uxbridge, Middlesex UB10 8AQ, being the representative member of the VAT Group; 

  

	 	12.1.5	“VATA” means the Value Added Tax Act 1994; and 

  

	 	12.1.6	“VAT Group” means the group of companies for the purposes of VAT of which the Company is a member immediately prior to Completion. 

  

	12.2	The Covenantor shall promptly after Completion apply to HM Revenue & Customs under section 43C of VATA to remove the Company from the VAT Group with effect from the end of
the day on which Completion occurs. The Covenantor shall keep the Purchaser informed of the progress of the application and shall promptly provide copies of all correspondence. The Purchaser shall also keep the Covenantor informed and shall promptly
provide to the Covenantor copies of any correspondence received by a Purchaser Associate relating to such application. 

  

	12.3	The Covenantor shall, within 30 days of receiving notice of the Exit Date, deliver to the Purchaser a statement, together with reasonable explanatory details, workings and
calculations (the “VAT Statement”) certifying whether the Company has a Notional VAT Liability or a Notional VAT Credit for the Relevant VAT Period and, if so, the amount of such Notional VAT Liability or Notional VAT Credit.

  

	12.4	The Purchaser shall procure that the Company provides such information and assistance as the Covenantor may reasonably require for the purposes of preparing the VAT Statement. The
Covenantor shall act in good faith and shall use reasonable skill and care in preparing the VAT Statement and, subject to sub-clause 12.7, the VAT Statement shall, in the absence of manifest error, be binding on the parties.

  

	12.5	If the VAT Statement shows that the Company has a Notional VAT Liability, the Purchaser shall procure that the Company pays to the Covenantor (on behalf of the Representative
Member) an amount equal to such Notional VAT Liability within fourteen days of delivery of the VAT Statement to the Purchaser under sub-clause 12.3. 

  

	12.6	If the VAT Statement shows that the Company has a Notional VAT Credit, the Covenantor shall pay to the Purchaser (on behalf of the Company) an amount equal to such Notional VAT
Credit within fourteen days of delivery of the VAT Statement to the Purchaser under sub-clause 12.3. 

  

	12.7	 The Covenantor undertakes to notify the Purchaser in writing if, as a result of any circumstances (including the receipt of any communication from HM
Revenue & Customs), it becomes apparent that the original VAT Statement was incorrect. In this event, the Covenantor shall, as soon as reasonably practicable and acting in good faith and using reasonable skill and care, produce and deliver
to the Purchaser a revised VAT 

  

 -18- 

	 	 
Statement, together with reasonable explanatory details, workings and calculations. Within 14 days of the delivery of the revised VAT Statement, the
Purchaser and Covenantor shall make any payments necessary to ensure that the net amount paid by the Purchaser or (as the case may be) the Covenantor under sub-clause 12.5 and sub-clause 12.6 is equal to what it would have been if the original VAT
Statement had been the revised VAT Statement. 

  

	12.8	No payment made by the Purchaser pursuant to this clause 12 or any other thing done by the Company or the Purchaser pursuant to this clause 12 shall in any respect restrict or
reduce any rights the Purchaser may have to make a claim against the Covenantor under this Deed in respect of any such liability as is mentioned in clause 2. 

  

	12.9	This clause 12 shall not apply to any payment or repayment as is referred to in clause 2.4. 

  

	13.	Transfer Pricing 

  

	13.1	If: 

  

	 	13.1.1	any Taxation Authority determines that the provisions of Schedule 28AA of the TA 88 (“Schedule 28AA”) apply to any transaction or series of transactions between the
Company and a Seller Associate; and 

  

	 	13.1.2	paragraph 6(1) of Schedule 28AA would apply to the relevant transaction or series of transactions; and 

  

	 	13.1.3	the Company would be the “disadvantaged person” as defined in paragraph 6(1)(b) of Schedule 28AA in relation to such transaction or series of transactions,

 then the Purchaser shall procure that the Company pays to the Covenantor (on behalf of the relevant Seller Associate) by way
of balancing payment an amount determined in accordance with clause 13.2 below. 
  

	13.2	The amount payable to the Covenantor shall be an amount equal to the “available compensating adjustment” determined in accordance with paragraph 7A(3) of Schedule 28AA
multiplied by the Effective Rate of Corporation Tax for the accounting period of the Company for which the “available compensating adjustment” was determined.. 

  

	13.3	Where any amount has been determined in accordance with clause 13.2 above, the Covenantor or the Purchaser may request the Auditors (at the expense of the party making the request)
to review such determination in the light of all relevant circumstances including facts which have become known only since such determination and to determine whether such determination remains correct and whether the amount that was the subject of
such determination should be amended. If the Auditors shall determine that the amount should be amended, an adjusting payment shall be made as soon as practicable by the Covenantor or (as the case may be) to the Covenantor. 

 

	14.	Third Party Rights 

 Nothing in this Deed is
intended to confer on any person any right to enforce any term of this Deed which that person would not have had but for the Contracts (Rights of Third Parties) Act 1999. 
  

 -19- 

	15.	General 

  

	15.1	Any payment made by the Covenantor under this Deed shall (so far as possible) be by way of reduction in, and repayment of, the consideration for the Shares under the Sale Agreement.
Any payment made by the Purchaser under this Deed shall (so far as possible) be by way of an increase in the consideration for the Shares under the Sale Agreement. 

  

	15.2	The provisions of the following clauses of the Sale Agreement shall have effect as if incorporated into this Deed mutatis mutandis with references to the Seller being replaced with
references to the Covenantor, references to this Agreement being replaced with references to this Deed and with any other necessary modifications: 

 clause 16 (Assignment), clause 17 (Waiver; variation; invalidity), clause 18 (Costs and expenses), clause 20 (Entire Agreement and financial promotion), clause 21 (Counterparts), clause 22 (Time of the essence),
clause 23 (Notices) and clause 24 (Governing law and jurisdiction). 
  

	15.3	For the purposes of determining whether a Liability for Taxation or a Relief relates to a pre or post Completion period, an accounting period of the Company shall be deemed to have
ended on Completion. 

  

	15.4	In determining the extent to which any provision or reserve for Taxation made in the Completion Accounts is sufficient, any Liability for Taxation of the Company for the accounting
period current at Completion shall be apportioned on a just and reasonable basis having regard to Events occurring pre and post Completion and to gross receipts, income, profits or gains earned, accrued or received by the Company pre and post
Completion. Notwithstanding the generality of this clause, once the Completion Accounts have been agreed in accordance with the Sale Agreement it shall be assumed that any provision or reserve in respect of Taxation for the period between the
Balance Sheet Date and Completion is sufficient to cover all Liability for Taxation arising in that period unless there was a material error in computing the profits or gains for that period or the Liability for Taxation relates to matters not taken
into account in the preparation of the Completion Accounts. 

 AS WITNESS the hands of the Parties or their duly authorised
representatives on the date first appearing at the head of this Deed. 
 The Schedule begins on the next page. 
  

 -20- 

 Schedule 1 
 The Companies 
  

					
	 Name
	  	 Registered Number
	  	 Registered Office

	 Games Station Limited
	  	03547594	  	Harefield Place, The Drive, Uxbridge, Middlesex, UB10 8AQ
	 Gamestation Limited
	  	04120965	  	Harefield Place, The Drive, Uxbridge, Middlesex, UB10 8AQ

 Signatures to this Deed begin on the next page. 
  

 -21- 

							
	 Signed as a deed by
	  	)	  		  	
	 BLOCKBUSTER UK LIMITED
	  	)	  		  	
	 acting by its duly authorised attorney
	  	)	  	 /s/ Eamonn Feeney
	  	
	 Eamonn Feeney
	  	)	  	Duly Authorised Attorney	  	
	 in the presence of:
	  	)	  		  	

  

					
	 Name of witness:
	  	Andrew Feeney	  	
			
	 Signature:
	  	/s/ Andrew Ellis	  	
			
	 Address:
	  	Harefield Place, The Drive	  	
		  	Uxbridge, UB108AQ	  	
			
	 Occupation:
	  	Solicitor	  	

  

							
	 SIGNED AS A DEED
	  	)	  	 /s/ Lisa Morgan
	  	
	 by THE GAME GROUP PLC
	  	)	  	Director	  	
				
	 acting by
	  	)	  	 /s/ David Thomas
	  	
		  	)	  	Secretary	  	

  

 -22-Registrant's Second Amended and Restated 2005 Omnibus Stock Plan

 Exhibit 10.1 
 VARIAN MEDICAL SYSTEMS, INC. 
 SECOND AMENDED AND RESTATED 
 2005 OMNIBUS STOCK PLAN 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 SECTION 1
	  	 BACKGROUND AND PURPOSE
	  	A-1
	 1.1
	  	 Effective Date
	  	A-1
	 1.2
	  	 Purpose of the Plan
	  	A-1
	 SECTION 2
	  	 DEFINITIONS
	  	A-1
	 2.1
	  	 “1934 Act”
	  	A-1
	 2.2
	  	 “Affiliate”
	  	A-1
	 2.3
	  	 “Award”
	  	A-1
	 2.4
	  	 “Award Agreement”
	  	A-1
	 2.5
	  	 “Board”
	  	A-1
	 2.6
	  	 “Code”
	  	A-1
	 2.7
	  	 “Committee”
	  	A-1
	 2.8
	  	 “Company”
	  	A-1
	 2.9
	  	 “Consultant”
	  	A-1
	 2.10
	  	 “Deferred Stock Unit”
	  	A-2
	 2.11
	  	 “Director”
	  	A-2
	 2.12
	  	 “Disability”
	  	A-2
	 2.13
	  	 “EBIT”
	  	A-2
	 2.14
	  	 “EBITDA”
	  	A-2
	 2.15
	  	 “Earnings Per Share”
	  	A-2
	 2.16
	  	 “Employee”
	  	A-2
	 2.17
	  	 “Exercise Price”
	  	A-2
	 2.18
	  	 “Fair Market Value”
	  	A-2
	 2.19
	  	 “Fiscal Year”
	  	A-2
	 2.20
	  	 “Grant Date”
	  	A-2
	 2.21
	  	 “Incentive Stock Option”
	  	A-2
	 2.22
	  	 “Net Income”
	  	A-2
	 2.23
	  	 “Net Orders”
	  	A-2
	 2.24
	  	 “Non-employee Director”
	  	A-2
	 2.25
	  	 “Non-qualified Stock Option”
	  	A-2
	 2.26
	  	 “Operating Cash Flow”
	  	A-2
	 2.27
	  	 “Option”
	  	A-3
	 2.28
	  	 “Participant”
	  	A-3
	 2.29
	  	 “Performance Goals”
	  	A-3
	 2.30
	  	 “Performance Period”
	  	A-3
	 2.31
	  	 “Performance Share”
	  	A-3
	 2.32
	  	 “Performance Unit”
	  	A-3
	 2.33
	  	 “Period of Restriction”
	  	A-3
	 2.34
	  	 “Plan”
	  	A-3
	 2.35
	  	 “Prior Plans”
	  	A-3
	 2.36
	  	 “Restricted Stock”
	  	A-3
	 2.37
	  	 “Restricted Stock Units”
	  	A-3
	 2.38
	  	 “Retirement”
	  	A-3
	 2.39
	  	 “Return on Assets”
	  	A-3
	 2.40
	  	 “Return on Equity”
	  	A-3
	 2.41
	  	 “Return on Sales”
	  	A-3
	 2.42
	  	 “Revenue”
	  	A-4
	 2.43
	  	 “Rule 16b-3”
	  	A-4

  

 A-i 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page
	 2.44
	  	 “Section 16 Person”
	  	A-4
	 2.45
	  	 “Shareholder Return”
	  	A-4
	 2.46
	  	 “Shares”
	  	A-4
	 2.47
	  	 “Stock Appreciation Right” or “SAR”
	  	A-4
	 2.48
	  	 “Subsidiary”
	  	A-4
	 2.49
	  	 “Termination of Service”
	  	A-4
	 SECTION 3
	  	 ADMINISTRATION
	  	A-4
	 3.1
	  	 The Committee
	  	A-4
	 3.2
	  	 Authority of the Committee
	  	A-4
	 3.3
	  	 Delegation by the Committee
	  	A-5
	 3.4
	  	 Non-employee Directors
	  	A-5
	 3.5
	  	 Decisions Binding
	  	A-5
	 SECTION 4
	  	 SHARES SUBJECT TO THE PLAN
	  	A-5
	 4.1
	  	 Number of Shares
	  	A-5
	 4.2
	  	 Lapsed Awards
	  	A-5
	 4.3
	  	 Adjustments in Awards and Authorized Shares
	  	A-5
	 SECTION 5
	  	 STOCK OPTIONS
	  	A-6
	 5.1
	  	 Grant of Options
	  	A-6
	 5.2
	  	 Award Agreement
	  	A-6
	 5.3
	  	 Exercise Price
	  	A-6
		  	 5.3.1    Non-qualified Stock Options
	  	A-6
		  	 5.3.2    Incentive Stock Options
	  	A-6
		  	 5.3.3    Substitute Options
	  	A-6
	 5.4
	  	 Expiration of Options
	  	A-6
		  	 5.4.1    Expiration Dates
	  	A-6
		  	 5.4.2    Death of Participant
	  	A-6
		  	 5.4.3    Committee Discretion
	  	A-7
	 5.5
	  	 Exercisability of Options
	  	A-7
	 5.6
	  	 Payment
	  	A-7
	 5.7
	  	 Restrictions on Share Transferability
	  	A-7
	 5.8
	  	 Certain Additional Provisions for Incentive Stock Options
	  	A-7
		  	 5.8.1    Exercisability
	  	A-7
		  	 5.8.2    Termination of Service
	  	A-7
		  	 5.8.3    Company and Subsidiaries Only
	  	A-7
		  	 5.8.4    Expiration
	  	A-7
	 SECTION 6
	  	 STOCK APPRECIATION RIGHTS
	  	A-8
	 6.1
	  	 Grant of SARs
	  	A-8
	 6.2
	  	 Exercise Price and Other Terms
	  	A-8
	 6.3
	  	 SAR Agreement
	  	A-8
	 6.4
	  	 Expiration of SARs
	  	A-8
	 6.5
	  	 Payment of SAR Amount
	  	A-8
	 6.6
	  	 Payment Upon Exercise of SAR
	  	A-8
	 SECTION 7
	  	 RESTRICTED STOCK and RESTRICTED STOCK UNITS
	  	A-8
	 7.1
	  	 Grant of Restricted Stock and Restricted Stock Units
	  	A-8
	 7.2
	  	 Restricted Stock and Restricted Stock Units Agreement
	  	A-8
	 7.3
	  	 Transferability
	  	A-8

  

 A-ii 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page
	 7.4
	  	 Other Restrictions
	  	A-8
		  	 7.4.1    General Restrictions
	  	A-8
		  	 7.4.2    Section 162(m) Performance Restrictions
	  	A-9
		  	 7.4.3    Legend on Certificates
	  	A-9
	 7.5
	  	 Removal of Restrictions
	  	A-9
	 7.6
	  	 Voting Rights
	  	A-9
	 7.7
	  	 Dividends and Other Distributions
	  	A-9
	 7.8
	  	 Return of Restricted Stock to Company
	  	A-9
	 SECTION 8
	  	 PERFORMANCE UNITS AND PERFORMANCE SHARES
	  	A-9
	 8.1
	  	 Grant of Performance Units and Shares
	  	A-9
	 8.2
	  	 Initial Value
	  	A-9
	 8.3
	  	 Performance Objectives and Other Terms
	  	A-9
		  	 8.3.1    General Performance Objectives
	  	A-10
		  	 8.3.2    Section 162(m) Performance Objectives
	  	A-10
	 8.4
	  	 Earning of Performance Units and Performance Shares
	  	A-10
	 8.5
	  	 Form and Timing of Payment
	  	A-10
	 8.6
	  	 Cancellation
	  	A-10
	 SECTION 9
	  	 NON-EMPLOYEE DIRECTORS
	  	A-10
	 9.1
	  	 Non-Employee Director Options
	  	A-10
	 9.2
	  	 Terms of Options
	  	A-10
		  	 9.2.1    Option Agreement
	  	A-10
		  	 9.2.2    Exercise Price
	  	A-10
		  	 9.2.3    Exercisability
	  	A-10
		  	 9.2.4    Expiration of Options
	  	A-10
		  	 9.2.5    Death of Director
	  	A-11
		  	 9.2.6    Not Incentive Stock Options
	  	A-11
		  	 9.2.7    Other Terms
	  	A-11
	 9.3
	  	 Substitute Options
	  	A-11
	 9.4
	  	 Elections by Non-employee Directors
	  	A-11
	 9.5
	  	 Deferred Stock Units
	  	A-11
	 9.6
	  	 Terms of Deferred Stock Units
	  	A-11
		  	 9.6.1    Deferred Stock Unit Agreement
	  	A-11
		  	 9.6.2    Vesting
	  	A-11
		  	 9.6.3    Payment
	  	A-12
		  	 9.6.4    Other Terms
	  	A-12
	 SECTION 10
	  	 MISCELLANEOUS
	  	A-12
	 10.1
	  	 No Effect on Employment or Service
	  	A-12
	 10.2
	  	 Participation
	  	A-12
	 10.3
	  	 Indemnification
	  	A-12
	 10.4
	  	 Successors
	  	A-12
	 10.5
	  	 Beneficiary Designations
	  	A-12
	 10.6
	  	 Nontransferability of Awards
	  	A-12
	 10.7
	  	 No Rights as Stockholder
	  	A-13
	 10.8
	  	 Withholding Requirements
	  	A-13
	 10.9
	  	 Withholding Arrangements
	  	A-13
	 10.10
	  	 Deferrals
	  	A-13
	 10.11
	  	 Dividend Equivalents
	  	A-13

  

 A-iii 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page
	 10.12
	  	 Prohibition on Repricings
	  	A-13
	 10.13
	  	 Maximum Term of Options and SARs
	  	A-13
	 SECTION 11
	  	 AMENDMENT, TERMINATION AND DURATION
	  	A-13
	 11.1
	  	 Amendment, Suspension or Termination
	  	A-13
	 11.2
	  	 Duration of the Plan
	  	A-14
	 SECTION 12
	  	 LEGAL CONSTRUCTION
	  	A-14
	 12.1
	  	 Gender and Number
	  	A-14
	 12.2
	  	 Severability
	  	A-14
	 12.3
	  	 Requirements of Law
	  	A-14
	 12.4
	  	 Governing Law
	  	A-14
	 12.5
	  	 Captions
	  	A-14
	 EXECUTION
	  	A-14

  

 A-iv 

 VARIAN MEDICAL SYSTEMS, INC. 
 SECOND AMENDED AND RESTATED 
 2005 OMNIBUS STOCK PLAN 
 SECTION 1 
 BACKGROUND AND PURPOSE

 1.1    Effective Date.    This Second Amended and Restated 2005 Omnibus Stock Plan was
originally adopted by Varian Medical Systems, Inc., a Delaware corporation, on November 19, 2004 (the “Adoption Date”) and became effective upon its approval by a majority of the shares of the common stock of the Company’s
stockholders on February 17, 2005 (the “Effective Date”). On December 7, 2005, the Board approved an amended and restated Plan, which was approved at the Company’s 2006 Annual Meeting of Stockholders. On November 17,
2006, the Board approved this amended and restated Plan, provided that this Plan amendment is approved by a vote of the majority of the shares of the common stock of the Company which are present in person or by proxy and entitled to vote at the
Company’s 2007 Annual Meeting of Stockholders. 
 1.2    Purpose of the Plan.    The Plan
is intended to increase incentives and to encourage Share ownership on the part of (1) employees of the Company and its Affiliates, (2) consultants who provide significant services to the Company and its Affiliates, and (3) directors
of the Company who are employees of neither the Company nor any Affiliate. The Plan also is intended to further the growth and profitability of the Company. The Plan is intended to permit the grant of Awards that qualify as performance-based
compensation under section 162(m) of the Code. 
 SECTION 2 
 DEFINITIONS 
 The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context: 
 2.1    “1934 Act” means the Securities
Exchange Act of 1934, as amended. Reference to a specific section of the 1934 Act or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or regulation. 
 2.2    “Affiliate” means any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the Company.

 2.3    “Award” means, individually or collectively, a grant under the Plan of Non-qualified Stock
Options, Incentive Stock Options, SARs, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares or Deferred Stock Units. 
 2.4    “Award Agreement” means the written agreement setting forth the terms and provisions applicable to each Award granted under the Plan. 
 2.5    “Board” means the Board of Directors of the Company. 
 2.6    “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or
regulation thereunder shall include such section or regulation, any valid regulation promulgated thereunder, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

 2.7    “Committee” means the committee appointed by the Board (pursuant to Section 3.1) to
administer the Plan. 
 2.8    “Company” means Varian Medical Systems, Inc., a Delaware corporation,
or any successor thereto. 
 2.9    “Consultant” means any consultant, independent contractor, or other
person who provides significant services to the Company or its Affiliates, but who is neither an Employee nor a Director. 
  

 A-1 

 2.10    “Deferred Stock Unit” means a Deferred Stock Unit granted
pursuant to Section 9.5. 
 2.11    “Director” means any individual who is a member of the Board.

 2.12    “Disability” means a permanent and total disability within the meaning of section
22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Committee in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory
standards adopted by the Committee from time to time. Notwithstanding the foregoing, to the extent “Disability” is used to establish a payment event with respect to any Award subject to section 409A of the Code, “Disability”
shall have the meaning set forth in section 409A of the Code and the applicable guidance issued by the Secretary of the Treasury thereunder. 
 2.13    “EBIT” means as to any Performance Period, the Company’s or a business unit’s income before reductions for interest and taxes, determined in accordance with generally accepted
accounting principles. 
 2.14    “EBITDA” means as to any Performance Period, the Company’s or a
business unit’s income before reductions for interest, taxes, depreciation and amortization, determined in accordance with generally accepted accounting principles. 
 2.15    “Earnings Per Share” means as to any Performance Period, the Company’s or a business unit’s Net Income, divided by a weighted average number of common shares
outstanding and dilutive common equivalent shares deemed outstanding, determined in accordance with generally accepted accounting principles. 
 2.16    “Employee” means any employee of the Company or of an Affiliate, whether such employee is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the
Plan. 
 2.17    “Exercise Price” means the price at which a Share may be purchased by a Participant
pursuant to the exercise of an Option. 
 2.18     “Fair Market Value” means the last quoted per share
selling price for Shares on the relevant date, or if there were no sales on such date, the last quoted per share price for Shares on the next preceding date on which there were sales of Shares. Notwithstanding the preceding, for federal, state and
local income tax reporting purposes, fair market value shall be determined by the Committee in accordance with uniform and nondiscriminatory standards adopted by it from time to time. 
 2.19    “Fiscal Year” means the fiscal year of the Company. 
 2.20    “Grant Date” means, with respect to an Award, the date that the Award was granted. 
 2.21    “Incentive Stock Option” means an Option to purchase Shares which is designated as an Incentive Stock Option
and is intended to meet the requirements of section 422 of the Code. 
 2.22    “Net Income” means as to
any Performance Period, the Company’s or a business unit’s income after taxes, determined in accordance with generally accepted accounting principles. 
 2.23    “Net Orders” means as to any Performance Period, the Company’s or a business unit’s net orders calculated (and reviewed by the Company’s external independent
auditors in accordance with agreed standard procedures) for and reported in the Company’s quarterly financial earnings press release filed by the Company on a Current Report on Form 8-K. 
 2.24    “Non-employee Director” means a Director who is an employee of neither the Company nor of any Affiliate.

 2.25    “Non-qualified Stock Option” means an option to purchase Shares which is not intended to be an
Incentive Stock Option. 
 2.26    “Operating Cash Flow” means as to any Performance Period, the
Company’s or a business unit’s sum of Net Income plus depreciation and amortization less capital expenditures plus changes in working capital comprised of accounts receivable, inventories, other current assets, trade accounts payable,
accrued expenses, product warranty, advance payments from customers and long-term accrued expenses, determined in accordance with generally acceptable accounting principles. 
  

 A-2 

 2.27    “Option” means an Incentive Stock Option or a Non-qualified
Stock Option. 
 2.28    “Participant” means an Employee, Consultant, or Non-employee Director who has an
outstanding Award. 
 2.29    “Performance Goals” means the goal(s) (or combined goal(s)) determined by
the Committee (in its discretion) to be applicable to a Participant with respect to an Award. As determined by the Committee, the Performance Goals applicable to an Award may provide for a targeted level or levels of achievement using one or more of
the following measures: (a) EBIT, (b) EBITDA, (c) Earnings Per Share, (d) Net Income, (e) Operating Cash Flow, (f) Return on Assets, (g) Return on Equity, (h) Return on Sales, (i) Revenue,
(j) Shareholder Return, (k) orders or Net Orders, (l) expenses, (m) cost of goods sold, (n) profit/loss or profit margin, (o) working capital, (p) operating income, (q) cash flow, (r) market share,
(s) return on equity, (t) economic value add, (u) stock price of the Company’s stock, (v) price/earning ratio, (w) debt or debt-to-equity ratio, (x) accounts receivable, (y) cash, (z) write-off, (aa)
assets, (bb) liquidity, (cc) operations, (dd) intellectual property (e.g., patents), (ee) product development, (ff) regulatory activities, (gg) manufacturing, production or inventory, (hh) mergers, acquisitions or divestitures,
(ii) financings, (jj) days sales outstanding, (kk) backlog, (ll) deferred revenue, and (mm) employee headcount. The Performance Goals may differ from Participant to Participant and from Award to Award. Prior to the Determination Date, the
Committee shall determine whether any significant element(s) shall be included in or excluded from the calculation of any Performance Goal with respect to any Participant. “Determination Date” means the latest possible date that will not
jeopardize an Award’s qualification as performance-based compensation under section 162(m) of the Code. Notwithstanding the previous sentence, for Awards not intended to qualify as performance-based compensation, “Determination
Date” shall mean such date as the Committee may determine in its discretion. 
 2.30    “Performance
Period” means any fiscal period not to exceed three consecutive Fiscal Years, as determined by the Committee in its sole discretion. 
 2.31    “Performance Share” means a Performance Share granted to a Participant pursuant to Section 8. 
 2.32    “Performance Unit” means a Performance Unit granted to a Participant pursuant to Section 8. 
 2.33    “Period of Restriction” means the period during which shares of Restricted Stock are subject to forfeiture
and/or restrictions on transferability. 
 2.34    “Plan” means the Varian Medical Systems, Inc.
Second Amended and Restated 2005 Omnibus Stock Plan, as set forth in this instrument and as hereafter amended from time to time. 
 2.35    “Prior Plans” means the Varian Medical Systems, Inc. Omnibus Stock Plan approved by the Company’s stockholders effective April 3, 1999 and the Varian Medical Systems, Inc.
2000 Stock Plan adopted by the Company’s Board of Directors effective November 17, 2000. 
 2.36    “Restricted Stock” means an Award granted to a Participant pursuant to Section 7. 
 2.37    “Restricted Stock Units” means a Restricted Stock Unit granted to a Participant pursuant to Section 7. 
 2.38    “Retirement” means, in the case of an Employee or a Non-employee Director, “Retirement” as defined pursuant to the Company’s or the Board’s Retirement
Policies, as they may be established from time to time. With respect to a Consultant, no Termination of Service shall be deemed to be on account of “Retirement.” 
 2.39    “Return on Assets” means as to any Performance Period, the percentage equal to the Company’s or a business unit’s EBIT before incentive compensation, divided by
average net Company or business unit, as applicable, assets, determined in accordance with generally accepted accounting principles. 
 2.40    “Return on Equity” means as to any Performance Period, the percentage equal to the Company’s Net Income divided by average stockholder’s equity, determined in accordance with generally
accepted accounting principles. 
 2.41    “Return on Sales” means as to any Performance Period, the
percentage equal to the Company’s or a business unit’s EBIT before incentive compensation, divided by the Company’s or the business unit’s, as applicable, Revenue, determined in accordance with generally accepted accounting
principles. 
  

 A-3 

 2.42    “Revenue” means as to any Performance Period, the
Company’s or a business unit’s net sales, determined in accordance with generally accepted accounting principles. 
 2.43    “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, as amended, and any future regulation amending, supplementing or superseding such regulation. 
 2.44    “Section 16 Person” means a person who, with respect to the Shares, is subject to section 16 of the 1934
Act. 
 2.45    “Shareholder Return” means as to any Performance Period, the total return (change in
share price plus reinvestment of any dividends) of a Share. 
 2.46    “Shares” means shares of the
Company’s common stock, $1.00 par value. 
 2.47    “Stock Appreciation Right” or
“SAR” means an Award, granted alone, in connection or in tandem with a related Option, that pursuant to Section 6 is designated as a SAR. 
 2.48    “Subsidiary” means any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the
unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
 2.49    “Termination of Service” means (a) in the case of an Employee, a cessation of the employee-employer
relationship between an Employee and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability, Retirement, or the disaffiliation of an Affiliate, but excluding
any such termination where there is a simultaneous reemployment by the Company or an Affiliate; (b) in the case of a Consultant, a cessation of the service relationship between a Consultant and the Company or an Affiliate for any reason,
including, but not by way of limitation, a termination by resignation, discharge, death, Disability, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous re-engagement of the consultant by the
Company or an Affiliate; and (c) in the case of a Non-employee Director, a cessation of the Non-employee Director’s service on the Board for any reason. Notwithstanding the foregoing, to the extent that “Termination of Service”
is used to establish a payment event with respect to any Award subject to section 409A of the Code, “Termination of Service” shall have the same meaning as “Severance from Service” as that term is defined in section 409A of the
Code and the applicable guidance issued by the Secretary of the Treasury thereunder. 
 SECTION 3 
 ADMINISTRATION 
 3.1    The Committee.    The Plan shall be administered by the Committee. The Committee shall consist of not less than two (2) Directors. The members of the Committee shall be appointed
from time to time by, and serve at the pleasure of, the Board. Each member of the Committee shall qualify as (a) a “non-employee director” under Rule 16b-3, (b) an “independent director” under section 303A.02 of
the New York Stock Exchange listing standards rules, and (c) an “outside director” under section 162(m) of the Code. If it is later determined that one or more members of the Committee do not so qualify, actions taken by the Committee
prior to such determination shall be valid despite such failure to qualify. 
 3.2    Authority of the
Committee.    It shall be the duty of the Committee to administer the Plan in accordance with the Plan’s provisions. The Committee shall have all powers and discretion necessary or appropriate to administer the Plan and
to control its operation, including, but not limited to, the power to (a) determine which Employees and Consultants shall be granted Awards, (b) prescribe the terms and conditions of the Awards (other than the Options granted to
Non-employee Directors pursuant to Section 9), (c) interpret the Plan and the Awards, (d) adopt such procedures, agreements, arrangements, sub plans and terms as are necessary or appropriate to permit participation in the Plan by
Employees, Consultants and Directors who are foreign nationals or employed outside of the United States, (e) adopt rules for the administration, interpretation and 

  

 A-4 

 
application of the Plan as are consistent therewith, and (f) interpret, amend or revoke any such rules. Notwithstanding any contrary provision of the
Plan, the Committee may reduce the amount payable under any Award (other than an Option) after the grant of such Award. 
 3.3    Delegation by the Committee.    The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under
the Plan to one or more directors and/or officers of the Company; provided, however, that the Committee may not delegate its authority and powers (a) with respect to Section 16 Persons, (b) in any way which would jeopardize the
Plan’s qualification under Rule 16b-3, or (c) with respect to Awards which are intended to qualify as performance-based compensation under section 162(m) of the Code. 
 3.4    Non-employee Directors.    Notwithstanding any contrary provision of this Section 3, the Board
shall administer Section 9 of the Plan, and the Committee shall exercise no discretion with respect to Section 9. In the Board’s administration of Section 9 and the Awards and any Shares granted to Non-employee Directors, the
Board shall have all of the authority and discretion otherwise granted to the Committee with respect to the administration of the Plan. 
 3.5    Decisions Binding.    All determinations and decisions made by the Committee, the Board, and any delegate of the Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding on all persons, and shall be given the maximum deference permitted by law. 
 SECTION 4 
 SHARES SUBJECT TO THE PLAN 
 4.1    Number of Shares.    As of the Effective Date, and subject to adjustment as provided in Section 4.3, the total number of Shares available for issuance under the Plan shall not
exceed 4,000,000, plus such number of Shares as are granted pursuant to substitute Options under Sections 5.3.3 and 9.3. No further grants may be made under the Prior Plans, but Shares authorized for issuance under the Prior Plans that have not been
issued under the prior Plans may be issued pursuant to Awards granted under this Plan in addition to the number of Shares specified immediately above. In addition, if an award previously granted under the Prior Plans terminates, expires, or lapses
for any reason, any Shares subject to such award shall again be available to be the subject of an Award under the Plan. Shares issued under the Plan may be either authorized but unissued Shares or treasury Shares. Upon approval of this Plan by the
stockholders of the Company, an additional 2,650,000 Shares shall be available for issuance under the Plan. For purposes of the total number of Shares available for grant under this Plan, any Shares that are subject to Awards of Options or Stock
Appreciation Rights shall be counted against the limit stated in this Section 4.1 as one (1) Share for every (1) Share issued, and any shares issued in connection with Awards other than Options and Stock Appreciation Rights shall be
counted against the limit stated in this Section 4.1 as 2.5 Shares for every one (1) Share issued. Except as provided in Section 4.2, if fewer Shares are issued in settlement of an Award than were covered by such Award, then the
Shares not issued shall not be available for issuance under the Plan. All of the Shares available for issuance under the Plan may be issued as Incentive Stock Options. 
 4.2    Lapsed Awards.    If an Award terminates, expires, or lapses for any reason, any Shares subject to such Award again shall be available to be the subject of an
Award. In addition, Shares issued pursuant to Awards assumed or issued in substitution of other awards in connection with the acquisition by the Company of an unrelated entity shall not reduce the maximum number of Shares issuable under
Section 4.1. 
 4.3    Adjustments in Awards and Authorized Shares.    In the event of any
merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, split-up, Share combination, or other change in the corporate structure of the Company affecting the Shares, the Committee shall adjust the number and
class of Shares which may be delivered under the Plan, the number, class, and price of Shares subject to outstanding Awards, and the numerical limit of Section 5.1 in such manner as the Committee (in its sole discretion) shall determine to be
appropriate to prevent the dilution or diminution of such Awards. In the case of Options granted to Non-employee Directors, the foregoing adjustments shall be made by the Board. Notwithstanding the preceding, the number of Shares subject to any
Award always shall be a whole number. 
  

 A-5 

 SECTION 5 
 STOCK OPTIONS 
 5.1    Grant of Options.    Subject to
the terms and provisions of the Plan, Options may be granted to Employees and Consultants at any time and from time to time as determined by the Committee in its sole discretion. The Committee, in its sole discretion, shall determine the number of
Shares subject to each Option, provided that during any Fiscal Year, no Participant shall be granted Options covering more than 4,000,000 Shares. The Committee may grant Incentive Stock Options, Non-qualified Stock Options, or a combination thereof.
Non-Qualified Stock Options may be granted under the Plan pursuant to Section 9 to Non-employee Directors by the Board, which shall determine the terms of such Options. 
 5.2    Award Agreement.    Each Option shall be evidenced by an Award Agreement that shall specify the
Exercise Price, the expiration date of the Option, the number of Shares to which the Option pertains, any conditions to exercise of the Option, and such other terms and conditions as the Committee, in its discretion, shall determine. The Award
Agreement shall specify whether the Option is intended to be an Incentive Stock Option or a Non-qualified Stock Option. 
 5.3    Exercise Price.    Subject to the provisions of this Section 5.3, the Exercise Price for each Option shall be determined by the Committee in its sole discretion. 
 5.3.1    Non-qualified Stock Options.    In the case of a Non-qualified Stock Option, the
Exercise Price shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date. 
 5.3.2    Incentive Stock Options.    In the case of an Incentive Stock Option, the Exercise Price shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on
the Grant Date; provided, however, that if on the Grant Date, the Employee (together with persons whose stock ownership is attributed to the Employee pursuant to section 424(d) of the Code) owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the Exercise Price shall be not less than one hundred and ten percent (110%) of the Fair Market Value of a Share on the Grant Date.

 5.3.3    Substitute Options.    Notwithstanding the provisions of Sections
5.3.1 and 5.3.2, in the event that the Company or an Affiliate consummates a transaction described in section 424(a) of the Code (e.g., the acquisition of property or stock from an unrelated corporation), persons who become Employees or
Consultants on account of such transaction may be granted Options in substitution for options granted by their former employer. If such substitute Options are granted, the Committee, in its sole discretion and consistent with section 424(a) of
the Code, shall determine the exercise price of such substitute Options. 
 5.4    Expiration of Options.

 5.4.1    Expiration Dates.    Subject to Section 10.13, except as set
forth in each Award Agreement, each Option shall terminate no later than the first to occur of the following events: 
 (a)    The expiration of seven (7) years from the Grant Date; or 
 (b)    The expiration of three (3) months from the date of the Participant’s Termination of Service for a reason other than the Participant’s death, Disability or Retirement; or 
 (c)    The expiration of one (1) year from the date of the Participant’s Termination of Service by reason of
Disability; or 
 (d)    The expiration of three (3) years from the date of the Participant’s
Retirement (subject to Section 5.8.2 regarding Incentive Stock Options); or 
 (e)    The date of the
Participant’s Termination of Service by the Company for cause (as determined by the Company). 
 5.4.2    Death of Participant.    Subject to Section 10.13, notwithstanding Section 5.4.1, if a Participant who is an Employee dies prior to the expiration of his or her Options, his
or her Options shall be exercisable 

  

 A-6 

 
until the expiration of three (3) years after the date of death. If a Participant who is a Consultant dies prior to the expiration of his or her
Options, the Committee, in its discretion, may provide that his or her Options shall be exercisable for up to three (3) years after the date of death. 
 5.4.3    Committee Discretion.    Subject to the limits of Sections 5.4.1, 5.4.2 and 10.13, the Committee, in its sole discretion, (a) shall provide in each Award
Agreement when each Option expires and becomes unexercisable, and (b) may, after an Option is granted and before such Option expires, extend the maximum term of the Option (subject to Section 5.8.4 regarding Incentive Stock Options).

 5.5    Exercisability of Options.    Options granted under the Plan shall be exercisable at
such times and be subject to such restrictions and conditions as the Committee shall determine in its sole discretion. After an Option is granted, the Committee, in its sole discretion, may accelerate the exercisability of the Option. If a
Participant dies while an Employee, the exercisability of his or her Options shall be fully accelerated to the date of Termination of Service. 
 5.6    Payment.    Options shall be exercised by the Participant’s delivery of a written notice of exercise to the Secretary of the Company (or its designee), setting forth the number of
Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. 
 Upon the exercise of any Option,
the Exercise Price shall be payable to the Company in full in cash or its equivalent. The Committee, in its sole discretion, also may permit exercise (a) by tendering previously acquired Shares having an aggregate Fair Market Value at the time
of exercise equal to the total Exercise Price, or (b) by any other means which the Committee, in its sole discretion, determines both to provide legal consideration for the Shares and to be consistent with the purposes of the Plan. 

As soon as practicable after receipt of a written notification of exercise and full payment for the Shares purchased, the Company shall deliver to the
Participant (or the Participant’s designated broker) Share certificates (which may be in book entry form) representing such Shares. 
 5.7    Restrictions on Share Transferability.    The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option as it may deem advisable, including, but
not limited to, restrictions related to applicable Federal securities laws, the requirements of any national securities exchange or system upon which Shares are then listed or traded, or any blue sky or state securities laws. 
 5.8    Certain Additional Provisions for Incentive Stock Options. 
 5.8.1    Exercisability.    The aggregate Fair Market Value (determined on the Grant
Date(s)) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by any Employee during any calendar year (under all plans of the Company and its Subsidiaries) shall not exceed $100,000. 
 5.8.2    Termination of Service.    If any portion of an Incentive Stock Option is
exercised more than three (3) months after the Participant’s Termination of Service for any reason other than Disability or death (unless (a) the Participant dies during such three-month period, and (b) the Award Agreement or the
Committee permits later exercise), the portion so exercised shall be deemed a Non-qualified Stock Option. 
 5.8.3    Company and Subsidiaries Only.    Incentive Stock Options may be granted only to persons who are employees of the Company or a Subsidiary on the Grant Date. 
 5.8.4    Expiration.    No Incentive Stock Option may be exercised after the expiration of
seven (7) years from the Grant Date; provided, however, that if the Option is granted to an Employee who, together with persons whose stock ownership is attributed to the Employee pursuant to section 424(d) of the Code, owns stock
possessing more than ten percent (10%) of the total combined voting power of all classes of the stock of the Company or any of its Subsidiaries, the Option may not be exercised after the expiration of five (5) years from the Grant Date.

  

 A-7 

 SECTION 6 
 STOCK APPRECIATION RIGHTS 
 6.1    Grant of
SARs.    Subject to the terms and conditions of the Plan, SARs may be granted to Employees and Consultants at any time and from time to time as shall be determined by the Committee, in its sole discretion. The Committee shall
have complete discretion to determine the number of SARs granted to any Participant, provided that during any Fiscal Year, no Participant shall be granted SARs covering more than 2,000,000 Shares. 
 6.2    Exercise Price and Other Terms.    The Committee, subject to the provisions of the Plan, shall have
complete discretion to determine the terms and conditions of SARs granted under the Plan. However, the exercise price of a SAR shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date. 

6.3    SAR Agreement.    Each SAR grant shall be evidenced by an Award Agreement that shall specify the
exercise price, the term of the SAR, the conditions of exercise, and such other terms and conditions as the Committee, in its sole discretion, shall determine. 
 6.4    Expiration of SARs.    A SAR granted under the Plan shall expire upon the date determined by the Committee, in its sole discretion, and set forth in the Award
Agreement. Notwithstanding the foregoing, the rules of Section 5.4 and 10.13 also shall apply to SARs. 
 6.5    Payment of SAR Amount.    Upon exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying: 
 (a)    The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

 (b)    The number of Shares with respect to which the SAR is exercised. 
 6.6    Payment Upon Exercise of SAR.    At the discretion of the Committee, payment for a SAR may be in
cash, Shares or a combination thereof. 
 SECTION 7 
 RESTRICTED STOCK AND RESTRICTED STOCK UNITS 
 7.1    Grant of Restricted Stock
and Restricted Stock Units.    Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock or Restricted Stock Units to Employees and Consultants in
such amounts as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Shares to be granted to each Participant, provided that during any Fiscal Year, no Participant shall be
granted more than 400,000 Shares of Restricted Stock or Restricted Stock Units. 
 7.2    Restricted Stock and
Restricted Stock Units Agreement.    Each Award of Restricted Stock or Restricted Stock Units shall be evidenced by an Award Agreement that shall specify the Period of Restriction, the number of Shares granted, any price to
be paid for the Shares, and such other terms and conditions as the Committee, in its sole discretion, shall determine. Unless the Committee determines otherwise, Shares of Restricted Stock shall be held by the Company as escrow agent until the
restrictions on such Shares have lapsed. 
 7.3    Transferability.    Shares of Restricted
Stock or Restricted Stock Units may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction. 
 7.4    Other Restrictions.    The Committee, in its sole discretion, may impose such other restrictions on
Shares of Restricted Stock or Restricted Stock Units as it may deem advisable or appropriate, in accordance with this Section 7.4. 
 7.4.1    General Restrictions.    The Committee may set restrictions based upon the achievement of specific performance objectives (Company-wide, business unit or
individual), applicable federal or state securities laws, or any other basis determined by the Committee in its discretion. 
  

 A-8 

 7.4.2    Section 162(m) Performance
Restrictions.    For purposes of qualifying grants of Restricted Stock and Restricted Stock Units as “performance-based compensation” under section 162(m) of the Code, the Committee, in its discretion, may set
restrictions based upon the achievement of Performance Goals. The Performance Goals shall be set by the Committee on or before the latest date permissible to enable the Restricted Stock or Restricted Stock Units to qualify as “performance-based
compensation” under section 162(m) of the Code. In granting Restricted Stock or Restricted Stock Units which is intended to qualify under section 162(m) of the Code, the Committee shall follow any procedures determined by it from time
to time to be necessary or appropriate to ensure qualification of the Restricted Stock or Restricted Stock Units under section 162(m) of the Code (e.g., in determining the Performance Goals). 
 7.4.3    Legend on Certificates.    The Committee, in its discretion, may legend the
certificates representing Restricted Stock to give appropriate notice of such restrictions. For example, the Committee may determine that some or all certificates representing Shares of Restricted Stock shall bear the following legend: 

“The sale or other transfer of the shares of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the Varian Medical Systems, Inc. 2005 Omnibus Stock Plan, and in a Restricted Stock Agreement. A copy of the Plan and such Restricted Stock Agreement may be obtained from the Secretary
of Varian Medical Systems, Inc.” 
 7.5    Removal of Restrictions.    Shares of
Restricted Stock covered by each Restricted Stock grant made under the Plan shall be released from escrow as soon as practicable after the last day of the Period of Restriction. The Committee, in its discretion, may accelerate the time at which any
restrictions shall lapse, and remove any restrictions. After the restrictions have lapsed, the Participant shall be entitled to have any legend or legends under Section 7.4 removed from his or her Share certificate, and the Shares shall be
freely transferable by the Participant. 
 7.6    Voting Rights.    During the Period of
Restriction, Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless otherwise provided in the Award Agreement. 
 7.7    Dividends and Other Distributions.    During the Period of Restriction, Participants holding Shares
of Restricted Stock shall be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares shall be
subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid. 
 7.8    Return of Restricted Stock to Company.    On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed shall revert to the Company and again
shall become available for grant under the Plan. 
 SECTION 8 
 PERFORMANCE UNITS AND PERFORMANCE SHARES 
 8.1    Grant of
Performance Units and Shares.    Performance Units and Performance Shares may be granted to Employees and Consultants at any time and from time to time, as shall be determined by the Committee, in its sole discretion. The
Committee shall have complete discretion in determining the number of Performance Units and Performance Shares granted to any Participant, provided that during any Fiscal Year, no more than 400,000 Performance Shares or Performance Units may be
granted to any Participant. 
 8.2    Initial Value.    Each Performance Unit shall have an
initial value that is established by the Committee on or before the Grant Date, provided that such value shall not exceed the Fair Market Value of a Share on the Grant Date. Each Performance Share shall have an initial value equal to the Fair Market
Value of a Share on the Grant Date. 
 8.3    Performance Objectives and Other Terms.    The
Committee shall set performance objectives in its discretion, which, depending on the extent to which they are met, will determine the number or value of 

  

 A-9 

 
Performance Units or Shares that will be paid out to the Participants. The Committee may set performance objectives based upon the achievement of
Company-wide, business unit, or individual goals, or any other basis determined by the Committee in its discretion. The time period during which the performance objectives must be met shall be called the “Performance Period.” Each Award of
Performance Units or Shares shall be evidenced by an Award Agreement that shall specify the Performance Period, and such other terms and conditions as the Committee, in its sole discretion, shall determine. 
 8.3.1    General Performance Objectives.    The Committee may set performance objectives
based upon the achievement of Company-wide, business unit or individual goals, or any other basis determined by the Committee in its discretion. 
 8.3.2    Section 162(m) Performance Objectives.    For purposes of qualifying grants of Performance Units or Shares as “performance-based compensation”
under section 162(m) of the Code, the Committee, in its discretion, may determine that the performance objectives applicable to Performance Units or Shares shall be based on the achievement of Performance Goals. The Performance Goals shall be
set by the Committee on or before the latest date permissible to enable the Performance Units or Shares to qualify as “performance-based compensation” under section 162(m) of the Code. In granting Performance Units or Shares which are
intended to qualify under section 162(m) of the Code, the Committee shall follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Performance Units or Shares under
section 162(m) of the Code (e.g., in determining the Performance Goals). 
 8.4    Earning of Performance
Units and Performance Shares.    After the applicable Performance Period has ended, the Participant shall be entitled to receive a payout of the number of Performance Units or Shares earned during the Performance Period,
depending upon the extent to which the applicable performance objectives have been achieved. After the grant of a Performance Unit or Share, the Committee, in its sole discretion, may reduce or waive any performance objectives for Award. 

8.5    Form and Timing of Payment.    Payment of earned Performance Units or Performance Shares
shall be made as soon as practicable after the expiration of the applicable Performance Period. The Committee, in its sole discretion, may pay such earned Awards in cash, Shares or a combination thereof. 
 8.6    Cancellation.    On the date set forth in the Award Agreement, all unearned or unvested Performance
Units or Performance Shares shall be forfeited to the Company, and again shall be available for grant under the Plan. 
 SECTION 9

 NON-EMPLOYEE DIRECTORS 
 9.1    Non-Employee Director Options.    Subject to the terms and provisions of the Plan, Non-qualified Stock Options may be issued to Non-employee Directors at any time and from time to time,
as determined by the Board in its sole discretion, including the number of Shares subject to each Option, and the terms and conditions of such Awards. 
 9.2    Terms of Options. 
 9.2.1    Option
Agreement.    Each Option granted pursuant to this Section 9 shall be evidenced by a written stock option agreement, which shall be executed by the Non-employee Director and the Company. 
 9.2.2    Exercise Price.    The Exercise Price for the Shares subject to each Option
granted pursuant to this Section 9 shall be one hundred percent (100%) of the Fair Market Value of such Shares on the Grant Date. 
 9.2.3    Exercisability.    Unless provided otherwise in an Award Agreement, each Option granted pursuant to this Section 9 shall be fully exercisable on the Grant
Date. 
 9.2.4    Expiration of Options.    Subject to Section 10.13,
unless provided otherwise in an Award Agreement, each Option shall terminate upon the first to occur of the following events: 
 (a)    The expiration of seven (7) years from the Grant Date; or 
  

 A-10 

 (b)    The expiration of three (3) months from the date of the
Non-employee Director’s Termination of Service for a reason (including, but not limited to the Non-Employee Director’s resignation) other than death, Disability, completion of the Participant’s term as a Director or Retirement; or

 (c)    The expiration of three (3) years from the date of the Non-employee Director’s
Termination of Service by reason of completion of the Participant’s term as a Director, Disability or Retirement. 
 9.2.5    Death of Director.    Subject to Section 10.13, notwithstanding Section 9.2.4, if a Non-employee Director dies prior to the expiration of his or her options in accordance
with Section 9.2.4, his or her options shall terminate three (3) years after the date of his or her death. 
 9.2.6    Not Incentive Stock Options.    Options granted pursuant to this Section 9 shall not be designated as Incentive Stock Options. 
 9.2.7    Other Terms.    Unless provided otherwise in an Award Agreement, all provisions of
the Plan not inconsistent with this Section 9 shall apply to Options granted to Non-employee Directors; provided, however, that Section 5.2 (relating to the Committee’s discretion to set the terms and conditions of Options) shall be
inapplicable with respect to Non-employee Directors. 
 9.3    Substitute
Options.    Notwithstanding the provisions of Section 9.2.2, in the event that the Company or an Affiliate consummates a transaction described in section 424(a) of the Code (e.g., the acquisition of property or
stock from an unrelated corporation), persons who become Non-employee Directors on account of such transaction may be granted Options in substitution for options granted by their former employer. If such substitute Options are granted, the
Committee, in its sole discretion and consistent with section 424(a) of the Code, shall determine the exercise price of such substitute Options. 
 9.4    Elections by Non-employee Directors.    Pursuant to such procedures as the Board (in its discretion) may adopt from time to time, each Non-employee Director may
elect to forego receipt of all or a portion of the annual retainer, committee chair fees, meeting attendance fees and other cash compensation otherwise due to the Non-employee Director in exchange for Shares. The number of Shares received by any
Non-employee Director shall equal the amount of foregone compensation divided by the Fair Market Value of a Share on the date that the compensation otherwise would have been paid to the Non-employee Director, rounded up to the nearest whole number
of Shares. In addition, pursuant to such procedures as the Board (in its discretion) may adopt from time to time, each Non-employee Director may elect to forego receipt of all or a portion of the annual retainer, committee chair and meeting
attendance fees and other cash compensation otherwise due to the Non-employee Director in exchange for an Option to purchase Shares. The number of Shares subject to such an Option received by any Non-employee Director shall equal the amount of
foregone compensation multiplied by four (4) and divided by the Fair Market Value of a Share on the date that the compensation otherwise would have been paid to the Non-employee Director, rounded up to the nearest whole number of Shares. All
Options granted pursuant to this Section 9.4 shall be subject to the restrictions of Section 9.2. 
 9.5    Deferred Stock Units.    Subject to the terms and provisions of the Plan, Awards of Deferred Stock Units may be granted to Non-employee Directors at any time and from time to time, as
determined by the Board in its sole discretion, including the number of Deferred Stock Units subject to each Award and the terms and conditions of such Awards. 
 9.6    Terms of Deferred Stock Units. 
 9.6.1    Deferred Stock Unit Agreement.    Deferred Stock Units granted pursuant to Section 9.5 shall be evidenced by a written Award Agreement, which shall be executed by the Non-employee
Director and the Company. 
 9.6.2    Vesting.    Unless otherwise provided in
an Award Agreement, Awards of Deferred Stock Units shall vest over a period of not less than one year from the date of grant, and may vest pro rata over such time. Vesting may be accelerated in limited situations such as death of the Non-employee
Director and change in control of the Company. 
  

 A-11 

 9.6.3    Payment.    Except as may be
provided in an Award Agreement, Deferred Stock Unit Awards will be paid in Shares. Awards of Deferred Stock Units may be paid in a lump sum or in installments or, in accordance with procedures established by the Committee, on a deferred basis
subject to the requirements of Section 409A of the Code. 
 9.6.4    Other
Terms.    Unless provided otherwise in an Award Agreement, all provisions of the Plan applicable to Restricted Stock Units not inconsistent with Section 9.5 and this Section 9.6 shall apply to Deferred Stock Units
granted to Non-employee Directors. 
 SECTION 10 
 MISCELLANEOUS 
 10.1    No Effect on Employment or
Service.    Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment or service at any time, with or without cause. For purposes of the Plan,
transfer of employment of a Participant between the Company and any one of its Affiliates (or between Affiliates) shall not be deemed a Termination of Service. Employment with the Company and its Affiliates is on an at-will basis only. 

10.2    Participation.    No Employee or Consultant shall have the right to be selected to receive an
Award under this Plan, or, having been so selected, to be selected to receive a future Award. 
 10.3    Indemnification.    Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Company against and from (a) any
loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by
reason of any action taken or failure to act under the Plan or any Award Agreement, and (b) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any
judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her
own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law,
or otherwise, or under any power that the Company may have to indemnify them or hold them harmless. 
 10.4    Successors.    All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business or assets of the Company. 
 10.5    Beneficiary Designations.    If permitted by the Committee, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid
Award shall be paid in the event of the Participant’s death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Committee. In the absence of
any such designation, any vested benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate and, subject to the terms of the Plan and of the applicable Award Agreement, any unexercised vested Award may
be exercised by the administrator or executor of the Participant’s estate. 
 10.6    Nontransferability of
Awards.    Except as provided below, no Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the
limited extent provided in Section 10.5. All rights with respect to an Award granted to a Participant shall be available during his or her lifetime only to the Participant. Notwithstanding the foregoing, the Committee, or the Board in the case
of Awards to Non-Employee Directors, may, in its sole discretion, permit the transfer of an Award to an individual or entity other than the Company (each transferee thereof a “Permitted Assignee”), subject to such restrictions as the
Committee, or the Board, in its sole discretion may impose. 
  

 A-12 

 10.7    No Rights as Stockholder.    Except to the limited
extent provided in Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall have any of the rights or privileges of a stockholder of the Company with respect to any Shares issuable pursuant to an Award (or exercise thereof), unless and until
certificates representing such Shares shall have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Participant (or beneficiary). 
 10.8    Withholding Requirements.    Prior to the delivery of any Shares or cash pursuant to an Award (or
exercise thereof), the Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Participant’s FICA
obligation) required to be withheld with respect to such Award (or exercise thereof). Notwithstanding any contrary provision of the Plan, if a Participant fails to remit to the Company such withholding amount within the time period specified by the
Committee (in its discretion), the Participant’s Award may, in the Committee’s discretion, be forfeited and in such case the Participant shall not receive any of the Shares subject to such Award. 
 10.9    Withholding Arrangements.    The Committee, in its sole discretion and pursuant to such procedures
as it may specify from time to time, may permit or require a Participant to satisfy all or part of the minimum required tax withholding obligations in connection with an Award by (a) having the Company withhold otherwise deliverable Shares, or
(b) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value of the Shares to be withheld or delivered shall be determined as of the date that the taxes are
required to be withheld. 
 10.10    Deferrals.    The Committee, in its sole discretion, may
permit a Participant to defer receipt of the payment of cash or the delivery of Shares that would otherwise be delivered to a Participant under the Plan. Any such deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion. Notwithstanding the foregoing, any deferral under this Section 10.10 shall be made in accordance with the provisions of section 409A of the Code and the applicable guidance issued by the
Secretary of the Treasury thereunder. 
 10.11    Dividend Equivalents.    Subject to the
provisions of the Plan and any Award Agreement, the recipient of an Award (including, without limitation, any deferred Award) may, if so determined by the Committee, or the Board in the case of Awards to Non-Employee Directors, be entitled to
receive, currently or on a deferred basis, cash or stock dividends, or cash payments in amounts equivalent to cash or stock dividends on Shares (“dividend equivalents”) with respect to the number of Shares covered by the Award, as
determined by the Committee, or the Board in the case of Non-Employee Directors, in its sole discretion, and the Committee or Board may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares or otherwise
reinvested. 
 10.12    Prohibition on Repricings.    Options and SARs may not be repriced
without the approval of the Company’s stockholders. For this purpose, “reprice” means that that the Company has: (a) lowered or reduced the Exercise Price of outstanding Options and/or outstanding SARs after
they have been granted, (b) canceled an Option and/or a SAR when the applicable Exercise Price exceeds the Fair Market Value of the underlying Shares in exchange for cash or another Award and (c) taken any other action with
respect to an Option and/or a SAR that would be treated as a repricing under the rules and regulations of the principal securities market on which the Shares are traded. An adjustment pursuant to Section 4.3 shall not be treated as a
repricing. 
 10.13    Maximum Term of Options and SARs.    Notwithstanding anything in
Sections 5, 6 and 9 to the contrary, no Option or SAR granted after February 15, 2007 shall have a term that exceeds seven (7) years from the Grant Date. 
 SECTION 11 
 AMENDMENT, TERMINATION AND DURATION 
 11.1    Amendment, Suspension or Termination.    The Board, in its sole discretion, may amend or terminate
the Plan, or any part thereof, at any time and for any reason. The amendment, suspension or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Award 

  

 A-13 

 
theretofore issued to such Participant. Any amendment shall also, to the extent required by applicable law or regulation, be subject to stockholder approval.
No Award may be granted during any period of suspension or after termination of the Plan. 
 11.2    Duration of the
Plan.    The Plan shall, subject to Section 11.1 (regarding the Board’s right to amend or terminate the Plan), remain in effect for ten (10) years from the Adoption Date. However, without further stockholder
approval, no Incentive Stock Option may be granted under the Plan after ten (10) years from the Effective Date. 
 SECTION 12

 LEGAL CONSTRUCTION 
 12.1    Gender and Number.    Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the
singular shall include the plural. 
 12.2    Severability.    In the event any provision of
the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

 12.3    Requirements of Law.    The granting of Awards and the issuance of Shares under the
Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 
 12.4    Governing Law.    The Plan and all Award Agreements shall be construed in accordance with and
governed by the laws of the State of California, but without regard to its conflict of law provisions. 
 12.5    Captions.    Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or construction of the Plan. 
 EXECUTION 
 IN WITNESS WHEREOF, Varian
Medical Systems, Inc., by its duly authorized officer, has executed the Plan on the date indicated below. 
  

									
		 		 	VARIAN MEDICAL SYSTEMS, INC.
					
	Dated 	 	February 15, 2007	 		 	By	 	/s/ John W. Kuo
		 		 		 		 	 John W. Kuo
 Corporate Vice
President,
 General Counsel & Secretary

  

 A-14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]