SEPARATION AGREEMENT

Exhibit 2.1

EXECUTION COPY

SEPARATION AGREEMENT

BY AND BETWEEN

CARDINAL HEALTH, INC.

AND

CAREFUSION CORPORATION

Dated July 22, 2009

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

 

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EXHIBITS

 

 

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SCHEDULES

 

 

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SEPARATION AGREEMENT

This SEPARATION AGREEMENT, dated as of July 22, 2009 (this “ Agreement ”), is by and between Cardinal Health, Inc., an Ohio corporation (“ Cardinal Health ”), and CareFusion Corporation, a Delaware corporation (“ CareFusion ”). Certain terms used in this Agreement are defined in Section 1.1 .

W I T N E S S E T H:

WHEREAS, the board of directors of Cardinal Health has determined that it is in the best interests of Cardinal Health and its shareholders to create a new publicly traded company which shall operate the CareFusion Business;

WHEREAS, CareFusion has been incorporated solely for these purposes and has not engaged in activities except in preparation for its corporate reorganization and the distribution of its stock;

WHEREAS, the board of directors of Cardinal Health and the board of directors of CareFusion have approved the transfer of the CareFusion Assets to CareFusion and its Subsidiaries and the assumption by CareFusion and certain of its Subsidiaries of the CareFusion Liabilities, all as more fully described in this Agreement and the other Transaction Documents;

WHEREAS, the board of directors of Cardinal Health has further approved the distribution to the holders of the issued and outstanding common shares, without par value, of Cardinal Health (the “ Cardinal Health Common Shares ”) as of the close of business on the Record Date, by means of a pro rata distribution, of issued and outstanding shares of the common stock, par value one one-hundredth of one dollar ($0.01) per share, of CareFusion (the “ CareFusion Common Stock ”), on the basis of one-half (1/2) share of CareFusion Common Stock for every one (1) Cardinal Health Common Share (the “ Distribution ”);

WHEREAS, Cardinal Health and CareFusion have prepared, and CareFusion has filed with the SEC, the Form 10, which includes the Information Statement, and which sets forth disclosure concerning CareFusion and the Distribution;

WHEREAS, in connection with the Distribution, Cardinal Health has entered into the Cardinal Health Credit Facility Amendment;

WHEREAS, for U.S. federal income tax purposes, certain steps of the Reorganization and the Distribution are intended to qualify for tax-free treatment under Sections 332, 351, 355, 361(c), 368(a) and related provisions of the Code;

WHEREAS, Cardinal Health has received a private letter ruling from the IRS to the effect that, among other things, (i) certain steps of the Reorganization and the Distribution, taken together, qualify as a transaction (a) that is described in Sections 355(a) and 368(a)(1)(D) of the Code, (b) in which the CareFusion Common Stock distributed is “qualified property” under Section 361(c) of the Code and (c) in which the holders of Cardinal Health Common Shares recognize no income or gain for U.S. federal income tax purposes under Section 355 of the Code, (ii) the CareFusion Cash Distribution qualifies as money transferred to Cardinal Health creditors under Section 361(b) of the Code and (iii) certain other steps of the Plan of Reorganization qualify as transactions that are described in Sections 355(a) and 368(a)(1)(D) of the Code (the “ Private Letter Ruling ”);

WHEREAS, this Agreement is intended to be a “plan of reorganization” within the meaning of Treas. Reg. 1.368-2(g); and

WHEREAS, it is appropriate and desirable to set forth the principal corporate transactions required to effect the Reorganization and the Distribution and to set forth certain other agreements that will, following the Distribution, govern certain matters relating to the Reorganization and the Distribution and the relationship of Cardinal Health, CareFusion and their respective Subsidiaries.

NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Definitions . For purposes of this Agreement, the following terms shall have the meanings specified in this Section 1.1 :

“ Action ” means any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.

“ Affiliate ” (including, with a correlative meaning, “ affiliated ”) means, when used with respect to a specified Person, a Person that directly or indirectly, through one (1) or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition, “ control ” (including with correlative meanings, “ controlled by ” and “ under common control with ”), when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise. It is expressly agreed that, from and after the Effective Time and for purposes of this Agreement and the other Transaction Documents, no member of the CareFusion Group shall be deemed to be an Affiliate of any member of the Cardinal Health Group, and no member of the Cardinal Health Group shall be deemed to be an Affiliate of any member of the CareFusion Group.

“ Approvals or Notifications ” means any consents, waivers, approvals, permits or authorizations to be obtained from, notices, registrations or reports to be submitted to, or other filings to be made with, any third Person, including any Governmental Authority.

 

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“ Assets ” means, with respect to any Person, the assets, properties, claims and rights (including goodwill) of such Person, wherever located (including in the possession of vendors or other third Persons or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of such Person, including the following:

(a) all accounting and other books, records and files whether in paper, microfilm, microfiche, computer tape or disc, magnetic tape, electronic or any other form;

(b) all apparatus, computers and other electronic data processing and communications equipment, fixtures, machinery, equipment, furniture, office equipment, automobiles, trucks, vessels, motor vehicles and other transportation equipment and other tangible personal property;

(c) all inventories of materials, parts, raw materials, components, supplies, work-in-process and finished goods and products;

(d) all interests in real property of whatever nature, including easements, whether as owner, mortgagee or holder of a Security Interest in real property, lessor, sublessor, lessee, sublessee or otherwise;

(e) (i) all interests in any capital stock or other equity interests of any Subsidiary or any other Person, (ii) all bonds, notes, debentures or other securities issued by any Subsidiary or any other Person, (iii) all loans, advances or other extensions of credit or capital contributions to any Subsidiary or any other Person and (iv) all other investments in securities of any Person;

(f) all license agreements, leases of personal property, open purchase orders for raw materials, supplies, parts or services and other contracts, agreements or commitments;

(g) all deposits, letters of credit and performance and surety bonds;

(h) all written (including in electronic form) or oral technical information, data, specifications, research and development information, engineering drawings and specifications, operating and maintenance manuals, and materials and analyses prepared by consultants and other third Persons;

(i) all Intellectual Property and Technology;

(j) all Software;

(k) all cost information, sales and pricing data, customer prospect lists, supplier records, customer and supplier lists, customer and vendor data, correspondence and lists, product data and literature, artwork, design, formulations and specifications, quality records and reports and other books, records, studies, surveys, reports, plans and documents;

 

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(l) all prepaid expenses, trade accounts and other accounts and notes receivable;

(m) all rights under contracts or agreements, all claims or rights against any Person arising from the ownership of any Asset, all rights in connection with any bids or offers and all claims, choses in action or similar rights, whether accrued or contingent;

(n) all rights under insurance policies and all rights in the nature of insurance, indemnification or contribution;

(o) all licenses, permits, approvals and authorizations which have been issued by any Governmental Authority;

(p) all cash or cash equivalents, bank accounts, lock boxes and other deposit arrangements; and

(q) all interest rate, currency, commodity or other swap, collar, cap or other hedging or similar agreements or arrangements.

“ Benefit Plan ” has the meaning set forth in the Employee Matters Agreement.

“ Cardinal Health Business ” means (i) (A) the businesses and operations conducted prior to the Effective Time by any member of the Cardinal Health Group that are not included in the CareFusion Business and (B) the businesses set forth on Schedule 1.1(a) and (ii) the Cardinal Health Former Businesses.

“ Cardinal Health Credit Facility Amendment ” means Amendment No. 1 to Credit Agreement and Limited Consent, dated as of April 16, 2009, which amends that certain Five-Year Credit Agreement, dated as of January 24, 2007, by and among Cardinal Health, certain lenders, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank N.A. and Barclays Bank PLC, as Syndication Agents, Morgan Stanley Bank and Deutsche Bank Securities Inc., as Documentation Agents, and Banc of America Securities LLC, J.P. Morgan Securities, Inc. and Barclays Capital, as Joint Lead Arrangers and Book Managers.

“ Cardinal Health Disqualifying Action ” has the meaning set forth in the Tax Matters Agreement.

“ Cardinal Health Former Businesses ” means the Former Businesses set forth on Schedule 1.1(b) and any Former Business (other than the CareFusion Business or the CareFusion Former Businesses) that, at the time of sale, conveyance, assignment, transfer, disposition, divestiture (in whole or in part) or discontinuation, abandonment, completion or termination of the operations, activities or production thereof, was primarily managed by or associated with the Cardinal Health Business as then conducted.

“ Cardinal Health Group ” means Cardinal Health and each Person (other than any member of the CareFusion Group) that is an Affiliate of Cardinal Health immediately after the Effective Time.

 

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“ Cardinal Health Intellectual Property ” means (i) the Cardinal Health Name and Cardinal Health Marks and (ii) all other Intellectual Property that is owned by any member of the Cardinal Health Group or the CareFusion Group, other than the CareFusion Intellectual Property.

“ Cardinal Health Liability Percentage ” means the quotient, expressed as a percentage and rounded to two (2) decimal points, of (i) the Cardinal Health Market Capitalization, divided by (ii) the sum of the Cardinal Health Market Capitalization plus the CareFusion Market Capitalization.

“ Cardinal Health Market Capitalization ” means the product of (i) the volume-weighted average trading price per share of Cardinal Health Common Shares for the twenty (20) consecutive trading days beginning on and following the thirty-first (31st) trading day following the Effective Time, as quoted by Bloomberg Financial Services through its “Volume at Price” function, rounded to the nearest whole cent, multiplied by (ii) the arithmetic average of the number of Cardinal Health Common Shares outstanding, on a fully-diluted basis, on each of such twenty (20) trading days, rounded to two (2) decimal points.

“ Cardinal Health Name and Cardinal Health Marks ” means the names, marks, trade dress, logos, monograms, domain names and other source or business identifiers of Cardinal Health or any of its Affiliates using or containing “Cardinal Health” (in block letters or otherwise), “Cardinal Health” either alone or in combination with other words or elements and all names, marks, trade dress, logos, monograms, domain names and other source or business identifiers confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing.

“ Cardinal Health Software ” means all Software that is owned by any member of the Cardinal Health Group or the CareFusion Group, other than the CareFusion Software.

“ Cardinal Health Technology ” means all Technology that is owned by any member of the Cardinal Health Group or the CareFusion Group, other than the CareFusion Technology.

“ CareFusion Balance Sheet ” means CareFusion’s unaudited condensed combined balance sheet as of August 31, 2009, to be prepared jointly by the parties as soon as practicable following the Effective Time.

“ CareFusion Business ” means (i) the businesses and operations conducted prior to the Effective Time by any member of the CareFusion Group, but excluding those businesses set forth on Schedule 1.1(a) , (ii) any other businesses or operations conducted primarily through the use of the CareFusion Assets, (iii) the businesses and operations set forth on Schedule 1.1(c) and (iv) the CareFusion Former Businesses.

“ CareFusion Contracts ” means the following contracts and agreements to which Cardinal Health or any of its Affiliates is a party or by which Cardinal Health or any of its Affiliates or any of their respective Assets is bound, whether or not in writing, in each case, immediately prior to the Effective Time, except for any such contract or agreement that is contemplated to be retained by Cardinal Health or any member of the Cardinal Health Group pursuant to any provision of this Agreement or any other Transaction Document:

(a) (i) any customer, distribution, supply or vendor contracts or agreements listed or described on Schedule 1.1(d) and (ii) any other customer, supply or vendor contracts or agreements that relate primarily to the CareFusion Business;

 

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(b) (i) any joint venture agreement or license agreement listed or described on Schedule 1.1(e) and (ii) any other joint venture agreement or license agreement, that relates primarily to the CareFusion Business;

(c) any guarantee, indemnity, representation, warranty or other Liability of any member of the CareFusion Group or the Cardinal Health Group in respect of (i) any CareFusion Contract, (ii) any CareFusion Liability or (iii) the CareFusion Business;

(d) any employment, change of control, retention, consulting, indemnification, termination, severance or other similar agreements with any CareFusion Group Employee or consultants of the CareFusion Group that are in effect as of the Effective Time;

(e) any contract or agreement that is otherwise expressly contemplated pursuant to this Agreement or any of the other Transaction Documents to be assigned to CareFusion or any member of the CareFusion Group; and

(f) any contract, agreement, arrangement, commitment or understanding listed or described on Schedule 1.1(f) (or any applicable licenses, leases, addenda and similar arrangements thereunder as described on Schedule 1.1(f) ) and any other contract, agreement, arrangement, commitment or understanding, whether or not in writing, that relates primarily to the CareFusion Business.

“ CareFusion Disqualifying Action ” has the meaning set forth in the Tax Matters Agreement.

“ CareFusion Former Businesses ” means the Former Businesses set forth on Schedule 1.1(g) and any Former Business that, at the time of sale, conveyance, assignment, transfer, disposition, divestiture (in whole or in part) or discontinuation, abandonment, completion or termination of the operations, activities or production thereof, was primarily managed by or associated with the CareFusion Business (including the businesses and operations set forth on Schedule 1.1(c) ) as then conducted.

“ CareFusion Group ” means CareFusion, each Subsidiary of CareFusion immediately after the Effective Time and each other Person that is controlled directly or indirectly by CareFusion immediately after the Effective Time.

“ CareFusion Group Employees ” has the meaning set forth in the Employee Matters Agreement.

 

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“ CareFusion Intellectual Property ” means (i) the patents, patent applications, statutory invention registrations, registered trademarks, registered service marks, registered Internet domain names and copyright registrations (collectively, “ Registrable IP ”) set forth on Schedule 1.1(h) , (ii) all Registrable IP not included on Schedule 1.1(h) that is owned by any member of the CareFusion Group at or prior to the Effective Time, excluding any such Registrable IP that has been assigned by any member of the CareFusion Group to any member of the Cardinal Health Group prior to the Effective Time, and (iii) all Intellectual Property, other than Registrable IP, that is owned by any member of the Cardinal Health Group or CareFusion Group and that is used or held for use primarily in the CareFusion Business as of the Effective Time.

“ CareFusion Liability Percentage ” means the difference, expressed as a percentage, of (i) one hundred percent (100%) minus (ii) the Cardinal Health Liability Percentage.

“ CareFusion Market Capitalization ” means the product of (i) the volume-weighted average trading price per share of shares of CareFusion Common Stock for the twenty (20) consecutive trading days beginning on and following the thirty-first (31st) trading day following the Effective Time, as quoted by Bloomberg Financial Services through its “Volume at Price” function, rounded to the nearest whole cent, multiplied by (ii) the arithmetic average of the number of shares of CareFusion Common Stock outstanding (including the Retained Stock), on a fully-diluted basis, on each of such twenty (20) trading days, rounded to two (2) decimal points.

“ CareFusion Software ” means (i) all Software set forth on Schedule 1.1(i) and (ii) all Software owned by any member of the Cardinal Health Group or CareFusion Group and that is primarily used or held for use in the CareFusion Business as of the Effective Time.

“ CareFusion Technology ” means all Technology owned by any member of the Cardinal Health Group or CareFusion Group and that is primarily used or held for use in the CareFusion Business as of the Effective Time.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Disclosure Documents ” means any registration statement (including the Form 10) filed with the SEC by or on behalf of any party or any of its controlled Affiliates, and also includes any information statement (including the Information Statement), prospectus, offering memorandum, offering circular, periodic report or similar disclosure document, whether or not filed with the SEC or any other Governmental Authority, in each case which describes the Reorganization or the CareFusion Group or primarily relates to the transactions contemplated hereby.

“ Distribution Agent ” means ComputerShare Investor Services, N.A.

“ Distribution Date ” means August 31, 2009, or such other time as determined by Cardinal Health in accordance with Section 3.3 .

“ Effective Time ” means the time at which the Distribution occurs on the Distribution Date, which shall be deemed to be 11:59 p.m., New York City Time, on the Distribution Date.

 

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“ Employee Matters Agreement ” means the Employee Matters Agreement in substantially the form attached hereto as Exhibit C , to be entered into by and between Cardinal Health and CareFusion on or prior to the Distribution Date.

“ Environmental Law ” means any Law relating to pollution, protection or restoration of or prevention of harm to the environment or natural resources, including the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials or the protection of or prevention of harm to human health and safety.

“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time that reference is made.

“ Excluded Employee Liabilities ” means any and all Liabilities assigned to, or assumed or otherwise retained by, members of the Cardinal Health Group under the Employee Matters Agreement.

“ Force Majeure ” means, with respect to a party, an event beyond the control of such party (or any Person acting on its behalf), which by its nature could not reasonably have been foreseen by such party (or such Person), or, if it could have reasonably been foreseen, was unavoidable, and includes acts of God, storms, floods, riots, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) or armed hostilities or other national or international calamity or one (1) or more acts of terrorism or failure of energy sources or distribution facilities. Notwithstanding the foregoing, the receipt by a party of an unsolicited takeover offer or other acquisition proposal, even if unforeseen or unavoidable, and such party’s response thereto shall not be deemed an event of Force Majeure.

“ Form 10 ” means the registration statement on Form 10 filed by CareFusion with the SEC to effect the registration of CareFusion Common Stock pursuant to the Exchange Act in connection with the Distribution, as such registration statement may be amended or supplemented from time to time prior to the Effective Time.

“ Former Business ” means any corporation, partnership, entity, division, business unit or business, including any business within the meaning of Rule 11-01(d) of Regulation S-X (in each case, including any assets and liabilities comprising the same) that has been sold, conveyed, assigned, transferred or otherwise disposed of or divested (in whole or in part) to a Person that is not a member of the Cardinal Health Group or the CareFusion Group or the operations, activities or production of which has been discontinued, abandoned, completed or otherwise terminated (in whole or in part), in each case, prior to the Effective Time.

“ Governmental Authority ” means any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, government and any executive official thereof.

 

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“ Group ” means the Cardinal Health Group or the CareFusion Group, as the context requires.

“ Hazardous Materials ” means any chemical, material, substance, waste, pollutant, emission, discharge, release or contaminant that could result in liability under, or that is prohibited, limited or regulated by or pursuant to, any Environmental Law, and any natural or artificial substance (whether solid, liquid or gas, noise, ion, vapor or electromagnetic) which could cause harm to human health or the environment, including petroleum, petroleum products and byproducts, asbestos and asbestos-containing materials, urea formaldehyde foam insulation, electronic, medical or infectious wastes, polychlorinated biphenyls, radon gas, radioactive substances, chlorofluorocarbons and all other ozone-depleting substances.

“ Information ” means information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memoranda and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.

“ Information Statement ” means the information statement to be sent to each holder of Cardinal Health Common Shares in connection with the Distribution, as filed with the SEC, as such information statement may be amended or supplemented from time to time prior to the Effective Time.

“ Insurance Policies ” means the insurance policies written by insurance carriers, including those affiliated with Cardinal Health and any self-insurance arrangements, pursuant to which CareFusion or one (1) or more of its Subsidiaries (or their respective officers or directors) will be insured parties after the Effective Time.

“ Insurance Proceeds ” means those monies (i) received by an insured from an insurance carrier, (ii) paid by an insurance carrier on behalf of the insured or (iii) received (including by way of set off) from any third Person in the nature of insurance, contribution or indemnification in respect of any Liability; in any such case net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments) and net of any costs or expenses incurred in the collection thereof.

“ Intellectual Property ” means all of the following whether arising under the Laws of the United States or of any other foreign or multinational jurisdiction: (i) patents, patent applications (including patents issued thereon) and statutory invention registrations, including reissues, divisions, continuations, continuations in part, substitutions, renewals, extensions and reexaminations of any of the foregoing, and all rights in any of the foregoing provided by international treaties or conventions, (ii) trademarks, service marks, trade names, service names, trade dress, logos and other source or business identifiers, including all goodwill associated with any of the foregoing, and any and all common law rights in and to any of the foregoing,

 

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registrations and applications for registration of any of the foregoing, all rights in and to any of the foregoing provided by international treaties or conventions, and all reissues, extensions and renewals of any of the foregoing, (iii) Internet domain names, (iv) copyrightable works, copyrights, moral rights, mask work rights, database rights and design rights, in each case, other than Software, whether or not registered, and all registrations and applications for registration of any of the foregoing, and all rights in and to any of the foregoing provided by international treaties or conventions, (v) confidential and proprietary information, including trade secrets, invention disclosures, processes and know-how, in each case, other than Software, and (vi) intellectual property rights arising from or in respect of any Technology.

“ Intellectual Property Agreements ” means the Master Intellectual Property License Agreement, the Transitional Trademark License Agreement, the International Intellectual Property License Agreement for Certain Non-Woven Products and the Remote Pharmacy Order Management System License Agreement, each in substantially the form attached hereto as Exhibit D-1 , Exhibit D-2 , Exhibit D-3 and Exhibit D-4 , respectively, to be entered into by and between Cardinal Health and/or the applicable member of the Cardinal Health Group, on the one hand, and CareFusion and/or the applicable member of the CareFusion Group, on the other hand, prior to the Distribution Date.

“ Intercompany Agreements ” means the agreements to be entered into by CareFusion and/or any member of the CareFusion Group, on the one hand, and Cardinal Health and/or any member of the Cardinal Health Group, on the other hand, on or prior to the Distribution Date and listed on Schedule 1.1(j) .

“ IP Application ” means any application for the registration, acquisition or perfection of any intellectual property rights, including patent applications, copyright applications and trademark applications.

“ IRS ” means the United States Internal Revenue Service.

“ Law ” means any national, supranational, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty (including any income tax treaty), license, permit, authorization, approval, consent, decree, injunction, binding judicial or administrative interpretation or other requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.

“ Liabilities ” means any and all debts, guarantees, liabilities, costs, expenses, interest and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, reserved or unreserved, or determined or determinable, including those arising under any Law, claim (including any third Person product liability claim), demand, Action, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority and those arising under any contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment or undertaking, or any fines, damages or equitable relief that is imposed, in each case, including all costs and expenses relating thereto.

“ NYSE ” means the New York Stock Exchange.

 

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“ Person ” means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, Governmental Authority or other entity.

“ Pre-Cardinal Health Insurance Policies ” means third-party insurance policies held by Cardinal Health or its Affiliates immediately after the Effective Time that satisfy each of the following conditions: (i) such insurance policy was acquired directly or indirectly by Cardinal Health as a result of Cardinal Health’s acquisition of the holder of such insurance policy, and (ii) at the time of such acquisition, the business of the holder of such insurance policy related to some or all of the businesses comprising the CareFusion Business.

“ Record Date ” means August 25, 2009.

“ Reorganization ” means the transfer of the CareFusion Assets to CareFusion and its Subsidiaries and the assumption of the CareFusion Liabilities by CareFusion and its Subsidiaries, and the transfer of certain Excluded Assets to Cardinal Health and its Subsidiaries and the assumption by Cardinal Health and its Subsidiaries of certain Excluded Liabilities, in exchange for stock and cash, all as more fully described in this Agreement and the other Transaction Documents and including the steps set forth in the Plan of Reorganization.

“ SEC ” means the United States Securities and Exchange Commission.

“ Securities Act ” means the United States Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time that reference is made.

“ Security Interest ” means any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-way, covenant, condition, easement, encroachment, restriction on transfer, or other encumbrance of any other nature.

“ Shareholder Liabilities ” means all Liabilities relating to, arising out of or resulting from stockholder litigation or controversies and any amount paid by any member of the Cardinal Health Group or the CareFusion Group in respect of such Liabilities.

“ Software ” means any and all (i) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (iii) descriptions, flow charts and other work products used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, and (iv) documentation, including user manuals and other training documentation, relating to any of the foregoing.

“ Stockholder’s and Registration Rights Agreement ” means the Stockholder’s and Registration Rights Agreement, in substantially the form attached hereto as Exhibit E , to be entered into by and between Cardinal Health and CareFusion on or prior to the Distribution Date.

 

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“ Subsidiary ” or “ subsidiary ” means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (i) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (A) the total combined voting power of all classes of voting securities of such Person, (B) the total combined equity interests or (C) the capital or profit interests, in the case of a partnership, or (ii) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

“ Tax ” has the meaning set forth in the Tax Matters Agreement.

“ Tax Matters Agreement ” means the Tax Matters Agreement, in substantially the form attached hereto as Exhibit B , to be entered into by and between Cardinal Health and CareFusion on or prior to the Distribution Date.

“ Tax Return ” has the meaning set forth in the Tax Matters Agreement.

“ Technology ” means all technology, designs, formulae, algorithms, procedures, methods, discoveries, processes, techniques, ideas, know-how, research and development, technical data, tools, materials, specifications, processes, inventions (whether patentable or unpatentable and whether or not reduced to practice) apparatus, creations, improvements, works of authorship in any media, confidential, proprietary or non-public information, and other similar materials, and all recordings, graphs, drawings, reports, analyses and other writings, and other tangible embodiments of the foregoing in any form whether or not listed herein, in each case, other than Software.

“ Transaction Documents ” means this Agreement, the Transition Services Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Intellectual Property Agreements, the Stockholder’s and Registration Rights Agreement, the Intercompany Agreements and the Transfer Documents.

“ Transactions ” means, collectively, (i) the Reorganization, (ii) the Distribution, (iii) the CareFusion Cash Distribution and (iv) all other transactions contemplated by this Agreement or any other Transaction Document.

“ Transfer Documents ” means the Cardinal Health Transfer Documents and the CareFusion Transfer Documents, including the documents listed on Schedule 1.1(k) .

“ Transition Services Agreement ” means the Transition Services Agreement in substantially the form attached hereto as Exhibit A , to be entered into by and between Cardinal Health and CareFusion on or prior to the Distribution Date.

 

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1.2 Other Terms . For purposes of this Agreement, the following terms have the meanings set forth in the sections indicated.

 

 

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ARTICLE II

THE REORGANIZATION

2.1 Transfer of Assets; Assumption of Liabilities .

(a) Prior to the Distribution, in accordance with the plan and structure set forth on Schedule 2.1(a) (such plan and structure being referred to herein as the “ Plan of Reorganization ”) and to the extent not previously effected pursuant to the steps of the Plan of Reorganization that have been completed prior to the date hereof:

(i) Cardinal Health shall, and shall cause its applicable Subsidiaries to, assign, transfer, convey and deliver to CareFusion or certain of CareFusion’s Subsidiaries designated by CareFusion, and CareFusion or such Subsidiaries shall accept from Cardinal Health and its applicable Subsidiaries, all of Cardinal Health’s and such Subsidiaries’ respective direct or indirect right, title and interest in and to all CareFusion Assets;

(ii) subject to Section 2.5(c) , CareFusion and certain of its Subsidiaries designated by CareFusion shall accept, assume and agree faithfully to perform, discharge and fulfill all the CareFusion Liabilities in accordance with their respective terms. CareFusion and such Subsidiaries shall be responsible for all CareFusion Liabilities, regardless of when or where such CareFusion Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Distribution Date, regardless of where or against whom such CareFusion Liabilities are asserted or determined (including any CareFusion Liabilities arising out of claims made by Cardinal Health’s or CareFusion’s respective directors, officers, employees, agents, Subsidiaries or Affiliates against any member of the Cardinal Health Group or the CareFusion Group) or whether asserted or determined prior to the date hereof, and, except as set forth in Section 2.3(b)(vi) , regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Cardinal Health Group or the CareFusion Group, or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates;

(iii) Cardinal Health shall cause its applicable Subsidiaries to assign, transfer, convey and deliver to certain of its other Subsidiaries designated by Cardinal Health, and such other Subsidiaries shall accept from such applicable Subsidiaries, such applicable Subsidiaries’ respective right, title and interest in and to any Excluded Assets specified by Cardinal Health to be so assigned, transferred, conveyed and delivered; and

(iv) Cardinal Health and certain of its Subsidiaries designated by Cardinal Health shall accept and assume from certain of its other Subsidiaries designated by Cardinal Health and agree faithfully to perform, discharge and fulfill certain Excluded Liabilities of such other Subsidiaries specified by Cardinal Health, and Cardinal Health and its applicable Subsidiaries shall be responsible for all Excluded Liabilities, regardless of when or where such Excluded Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Distribution Date, regardless of where or against whom such Excluded Liabilities are asserted or determined (including any such Excluded Liabilities arising out of claims made by Cardinal Health’s or CareFusion’s respective directors, officers,

 

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employees, agents, Subsidiaries or Affiliates against any member of the Cardinal Health Group or the CareFusion Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Cardinal Health Group or the CareFusion Group, or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates.

(b) In furtherance of the assignment, transfer, conveyance and delivery of the CareFusion Assets and the assumption of the CareFusion Liabilities in accordance with Sections 2.1(a)(i) and 2.1(a)(ii) , on the date that such CareFusion Assets are assigned, transferred, conveyed or delivered or such CareFusion Liabilities are assumed (i) Cardinal Health shall execute and deliver, and shall cause its Subsidiaries to execute and deliver, such bills of sale, quitclaim deeds, stock powers, certificates of title, assignments of contracts and other instruments of transfer, conveyance and assignment as and to the extent necessary to evidence the transfer, conveyance and assignment of all of Cardinal Health’s and its Subsidiaries’ (other than CareFusion and its Subsidiaries) right, title and interest in and to the CareFusion Assets to CareFusion and its Subsidiaries, and (ii) CareFusion shall execute and deliver, and shall cause its Subsidiaries to execute and deliver, such assumptions of contracts and other instruments of assumption as and to the extent necessary to evidence the valid and effective assumption of the CareFusion Liabilities by CareFusion and its Subsidiaries. All of the foregoing documents contemplated by this Section 2.1(b) shall be referred to collectively herein as the “ Cardinal Health Transfer Documents .”

(c) If at any time or from time to time (whether prior to or after the Effective Time), any party hereto (or any member of such party’s respective Group), shall receive or otherwise possess any Asset or Liability (including any Intellectual Property or Technology) that is allocated to any other Person pursuant to this Agreement or any other Transaction Document, such party shall promptly transfer, or cause to be transferred, such Asset or Liability, as the case may be, to the Person entitled to such Asset or responsible for such Liability, as the case may be. Prior to any such transfer, the Person receiving, possessing or responsible for such Asset or Liability shall be deemed to be holding such Asset or Liability, as the case may be, in trust for any such other Person.

(d) CareFusion hereby waives compliance by each and every member of the Cardinal Health Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the CareFusion Assets to any member of the CareFusion Group.

(e) Cardinal Health hereby waives compliance by each and every member of the CareFusion Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the Excluded Assets to any member of the Cardinal Health Group.

 

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2.2 CareFusion Assets .

(a) For purposes of this Agreement, “ CareFusion Assets ” shall mean (without duplication):

(i) the Assets listed or described on Schedule 2.2(a)(i) and all other Assets that are expressly provided by this Agreement or any other Transaction Document as Assets to be transferred to CareFusion or any other member of the CareFusion Group;

(ii) (A) all CareFusion Contracts, (B) all issued and outstanding capital stock of, or any other equity interests in, the wholly-owned Subsidiaries of Cardinal Health listed on Schedule 2.2(a)(ii)(B) , and (C) the shares of capital stock of, or any other equity interests in, certain entities held by Cardinal Health (other than the wholly-owned Subsidiaries of Cardinal Health listed on Schedule 2.2(a)(ii)(B) ) as listed on Schedule 2.2(a)(ii)(C) ;

(iii) subject to Section 6.3 , any rights of any member of the CareFusion Group under any of the Insurance Policies, including any rights thereunder arising after the Effective Time in respect of any Insurance Policies;

(iv) all Assets reflected as Assets of CareFusion and its Subsidiaries in the CareFusion Balance Sheet, subject to any dispositions of such Assets subsequent to the date of the CareFusion Balance Sheet;

(v) all CareFusion Intellectual Property, CareFusion Software and CareFusion Technology; and

(vi) any and all Assets, other than Intellectual Property, Software and Technology, owned or held immediately prior to the Effective Time by Cardinal Health or any of its Subsidiaries that are used primarily in the CareFusion Business (the intention of this clause (vi) is only to rectify any inadvertent omission of transfer or conveyance of any Assets that, had the parties given specific consideration to such Asset as of the date hereof, would have otherwise been classified as a CareFusion Asset; no Asset shall be deemed to be a CareFusion Asset solely as a result of this clause (vi) if such Asset is within the category or type of Asset expressly covered by the terms of another Transaction Document unless the party claiming entitlement to such Asset can establish that the omission of the transfer or conveyance of such Asset was inadvertent, and no Asset shall be deemed a CareFusion Asset solely as a result of this clause (vi) unless a claim with respect thereto is made by CareFusion on or prior to the first (1st) anniversary of the Distribution Date).

Notwithstanding the foregoing, the CareFusion Assets shall not in any event include any Assets governed by the Tax Matters Agreement or the Excluded Assets referred to in Section 2.2(b) .

(b) For the purposes of this Agreement, “ Excluded Assets ” shall mean (without duplication):

(i) the Assets listed or described on Schedule 2.2(b)(i) ;

(ii) the contracts and agreements listed or described on Schedule 2.2(b)(ii) ;

(iii) the Cardinal Health Intellectual Property, Cardinal Health Software and the Cardinal Health Technology;

 

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(iv) any cash or cash equivalents withdrawn from CareFusion Accounts in accordance with Section 2.11(f) ;

(v) any Shared Contracts (other than CareFusion Assets arising under any Shared Contracts);

(vi) any and all Assets that are expressly contemplated by this Agreement or any other Transaction Document as Assets to be retained by Cardinal Health or any other member of the Cardinal Health Group; and

(vii) subject to Section 2.2(a)(vi) , any and all Assets of any members of the Cardinal Health Group that are not CareFusion Assets.

Notwithstanding the foregoing, the Excluded Assets shall not in any event include any Assets governed by the Tax Matters Agreement.

2.3 CareFusion Liabilities .

(a) For the purposes of this Agreement, “ CareFusion Liabilities ” shall mean (without duplication):

(i) the Liabilities listed or described on Schedule 2.3(a)(i) and all other Liabilities that are expressly provided by this Agreement or any other Transaction Document as Liabilities to be assumed by CareFusion or any other member of the CareFusion Group, and all agreements, obligations and Liabilities of CareFusion or any other member of the CareFusion Group under this Agreement or any of the other Transaction Documents;

(ii) all Liabilities, including any employee-related Liabilities (other than Excluded Employee Liabilities), to the extent relating to, arising out of or resulting from:

(A) the operation of the CareFusion Business, as conducted at any time before, at or after the Effective Time (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority) and any Liability relating to the protection or restoration of, or prevention of harm to, the environment or natural resources, the protection of human and occupational health and safety, Environmental Law or Hazardous Materials);

(B) the operation of any business conducted by any member of the CareFusion Group at any time after the Effective Time (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority)); or

(C) any CareFusion Assets (including any Liability relating to, arising out of or resulting from CareFusion Contracts, Shared Contracts (to the extent related to the CareFusion Business) and any real property and leasehold interests, and any Liability relating to the protection or restoration of, or prevention of harm to, the environment or natural resources,

 

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the protection of human and occupational health and safety, Environmental Law or Hazardous Materials resulting from any properties of (including any properties set forth on Schedule 2.3(a)(ii)(C) ) of or associated with the CareFusion Assets (including any businesses, operations or properties for which a current or future owner or operator of the CareFusion Assets or the CareFusion Business may be alleged to be responsible as a matter of Law, contract or otherwise due to such ownership or operation of the CareFusion Assets or CareFusion Business), in any such case, whether arising before, at or after the Effective Time;

(iii) CareFusion’s Applicable Percentage of the Shared Liabilities determined pursuant to Section 2.10 ;

(iv) all Liabilities reflected as liabilities or obligations of CareFusion or its Subsidiaries in the CareFusion Balance Sheet, subject to any discharge of such Liabilities subsequent to the date of the CareFusion Balance Sheet;

(v) all Liabilities arising out of claims made by Cardinal Health’s or CareFusion’s respective directors, officers, employees, agents, Subsidiaries or Affiliates against any member of the Cardinal Health Group or the CareFusion Group to the extent relating to the CareFusion Business;

(vi) all Liabilities (including Shareholder Liabilities) relating to, arising out of or resulting from any CareFusion Disqualifying Action; and

(vii) the CareFusion Liability Percentage of all Liabilities (including Shareholder Liabilities) relating to, arising out of or resulting from the failure to achieve Tax-Free Status of the Transactions (as such term is defined in the Tax Matters Agreement) other than those Liabilities (including Shareholder Liabilities) relating to, arising out of or resulting from any Cardinal Health Disqualifying Action or any CareFusion Disqualifying Action.

provided , however , that CareFusion Liabilities shall not include any Liabilities for Taxes that are governed by the Tax Matters Agreement.

(b) For the purposes of this Agreement, “ Excluded Liabilities ” shall mean (without duplication):

(i) any and all Liabilities that are expressly contemplated by this Agreement or any other Transaction Document as Liabilities to be retained or assumed by Cardinal Health or any other member of the Cardinal Health Group, and all agreements and obligations of any member of the Cardinal Health Group under this Agreement or any of the other Transaction Documents;

(ii) any and all Liabilities of a member of the Cardinal Health Group to the extent relating to, arising out of or resulting from any Excluded Assets (other than Liabilities arising under any Shared Contracts to the extent such Liabilities relate to the CareFusion Business);

 

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(iii) the Excluded Employee Liabilities and any and all employee-related Liabilities to the extent relating to, arising out of or resulting from general corporate or shared services functions of the Cardinal Health Group;

(iv) Cardinal Health’s Applicable Percentage of the Shared Liabilities determined pursuant to Section 2.10 ;

(v) the Liabilities listed on Schedule 2.3(b)(v );

(vi) any and all liabilities arising from a knowing violation of Law, fraud or misrepresentation by any member of the Cardinal Health Group or any of their respective directors, officers, employees or agents (other than any individual who at the time of such act was acting in his or her capacity as a director, officer, employee or agent of any member of the CareFusion Group or on behalf of the CareFusion Business);

(vii) all Liabilities (including Shareholder Liabilities) relating to, arising out of or resulting from any Cardinal Health Disqualifying Action; and

(viii) the Cardinal Health Liability Percentage of all Liabilities (including Shareholder Liabilities) relating to, arising out of or resulting from the failure to achieve Tax-Free Status of the Transactions (as such term is defined in the Tax Matters Agreement) other than those Liabilities (including Shareholder Liabilities) relating to, arising out of or resulting from any Cardinal Health Disqualifying Action or any CareFusion Disqualifying Action.

provided , however , that Excluded Liabilities shall not include any Liabilities for Taxes that are governed by the Tax Matters Agreement.

(c) Any Liabilities of any member of the Cardinal Health Group not expressly referenced in Section 2.3(a) above are Excluded Liabilities and all Excluded Liabilities shall not be CareFusion Liabilities; provided , however , that Excluded Liabilities shall not include any Liabilities for Taxes that are governed by the Tax Matters Agreement.

2.4 Transfer of Excluded Assets; Assumption of Excluded Liabilities .

(a) To the extent any Excluded Asset is transferred or assigned to, or any Excluded Liability is assumed by, a member of the CareFusion Group at the Effective Time or is owned or held by a member of the CareFusion Group after the Effective Time, from and after the Effective Time:

(i) CareFusion shall, and shall cause its applicable Subsidiaries to, promptly assign, transfer, convey and deliver to Cardinal Health or certain of its Subsidiaries designated by Cardinal Health, and Cardinal Health or such Subsidiaries shall accept from CareFusion and its applicable Subsidiaries, all of CareFusion’s and such Subsidiaries’ respective right, title and interest in and to such Excluded Assets; and

 

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(ii) Cardinal Health and certain of its Subsidiaries designated by Cardinal Health shall promptly accept, assume and agree faithfully to perform, discharge and fulfill all such Excluded Liabilities in accordance with their respective terms.

(b) In furtherance of the assignment, transfer, conveyance and delivery of Excluded Assets and the assumption of Excluded Liabilities set forth in Sections 2.1(a)(iii) , 2.1(a)(iv) , 2.4(a)(i) and 2.4(a)(ii) and without any additional consideration therefor: (A) CareFusion shall execute and deliver, and shall cause its Subsidiaries to execute and deliver, such bills of sale, quitclaim deeds, stock powers, certificates of title, assignments of contracts and other instruments of transfer, conveyance and assignment as and to the extent necessary to evidence the transfer, conveyance and assignment of all of CareFusion’s and its Subsidiaries’ right, title and interest in and to the Excluded Assets to Cardinal Health and its Subsidiaries, and (B) Cardinal Health shall execute and deliver such assumptions of contracts and other instruments of assumption as and to the extent necessary to evidence the valid and effective assumption of the Excluded Liabilities by Cardinal Health. All of the foregoing documents contemplated by this Section 2.4(b) shall be referred to collectively herein as the “ CareFusion Transfer Documents ” and, together with the Cardinal Health Transfer Documents, the “ Transfer Documents .”

(c) To the extent that the transfer or assignment of any Excluded Assets or the assumption of any Excluded Liabilities requires any Approvals or Notifications, the parties shall use their commercially reasonable efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable or, in the case of the Excluded Assets and the Excluded Liabilities set forth on Schedule 2.4(e) , at the times indicated on such Schedule; provided , however , that, except to the extent expressly provided in any of the other Transaction Documents, neither Cardinal Health nor CareFusion shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications.

(d) If and to the extent that the valid, complete and perfected transfer or assignment to the Cardinal Health Group of any Excluded Assets or the assumption by the Cardinal Health Group of any Excluded Liabilities would be a violation of applicable Law or require any Approval or Notification that has not been made or obtained on or before the Distribution Date, then, unless the parties hereto mutually shall otherwise determine, the transfer or assignment to the Cardinal Health Group of such Excluded Assets or the assumption by the Cardinal Health Group of such Excluded Liabilities shall be automatically deemed deferred and any such purported transfer, assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approvals or Notifications have been obtained or made; provided , however , that if such legal impediments are not removed, or such Approvals or Notifications are not obtained or made, in each case by the second (2nd) anniversary of the Distribution Date, then, unless the parties hereto mutually shall otherwise determine, all Excluded Assets or Excluded Liabilities that are held by any member of the CareFusion Group, as the case may be, will be transferred or assigned to or assumed by the Cardinal Health Group at such time and at Cardinal Health’s cost by way of a direct transfer or assignment of the underlying Excluded Assets or the assumption of the underlying Excluded Liabilities, as the case may be. Notwithstanding the foregoing, any such Excluded Assets or Excluded Liabilities shall continue to constitute Excluded Assets or Excluded Liabilities for all other purposes of this Agreement.

 

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(e) If any transfer or assignment of any Excluded Asset or any assumption of any Excluded Liability intended to be transferred, assigned or assumed hereunder, as the case may be, is not consummated on or prior to the Distribution Date, whether as a result of the provisions of Section 2.4(d) or for any other reason, then, insofar as reasonably possible, the member of the CareFusion Group retaining such Excluded Asset or such Excluded Liability (including the Excluded Assets and Excluded Liabilities set forth on Schedule 2.4(e) ), as the case may be, shall thereafter hold such Excluded Asset or Excluded Liability, as the case may be, for the use and benefit of the member of the Cardinal Health Group entitled thereto (at the expense of the member of the Cardinal Health Group entitled thereto). In addition, the member of the CareFusion Group retaining such Excluded Asset or such Excluded Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such Excluded Asset or Excluded Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the member of the Cardinal Health Group to whom such Excluded Asset is to be transferred or assigned, or which will assume such Excluded Liability, as the case may be, in order to place such member of the Cardinal Health Group in a substantially similar position as if such Excluded Asset or Excluded Liability had been transferred, assigned or assumed as contemplated hereby and so that all the benefits and burdens relating to such Excluded Asset or Excluded Liability, as the case may be, including use, risk of loss, potential for gain, and dominion, control and command over such Excluded Asset or Excluded Liability, as the case may be, is to inure from and after the Effective Time to the Cardinal Health Group.

(f) If and when the Approvals or Notifications, the absence of which caused the deferral of transfer or assignment of any Excluded Asset or the deferral of assumption of any Excluded Liability, are obtained or made, and, if and when any other legal impediments for the transfer or assignment of any Excluded Assets or the assumption of any Excluded Liabilities have been removed, the transfer or assignment of the applicable Excluded Asset or the assumption of the applicable Excluded Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable Transaction Document.

(g) Any member of the CareFusion Group retaining an Excluded Asset or Excluded Liability due to the deferral of the transfer or assignment of such Excluded Asset or the deferral of the assumption of such Excluded Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available) by Cardinal Health or the member of the Cardinal Health Group entitled to the Excluded Asset or Excluded Liability, as the case may be, other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed by Cardinal Health or the member of the Cardinal Health Group entitled to such Excluded Asset or Excluded Liability.

 

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2.5 Approvals and Notifications .

(a) To the extent that the transfer or assignment of any CareFusion Asset, the assumption of any CareFusion Liability, the Reorganization or the Distribution requires any Approvals or Notifications, the parties will use their commercially reasonable efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable or, in the case of the CareFusion Assets and the CareFusion Liabilities set forth on Schedule 2.5(c) , at the times indicated on such Schedule; provided , however , that, except to the extent expressly provided in any of the other Transaction Documents, neither Cardinal Health nor CareFusion shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications.

(b) If and to the extent that the valid, complete and perfected transfer or assignment to the CareFusion Group of any CareFusion Assets or assumption by the CareFusion Group of any CareFusion Liabilities would be a violation of applicable Law or require any Approvals or Notifications in connection with the Reorganization, or the Distribution, that has not been obtained or made by the Effective Time then, unless the parties hereto mutually shall otherwise determine, the transfer or assignment to the CareFusion Group of such CareFusion Assets or the assumption by the CareFusion Group of such CareFusion Liabilities, as the case may be, shall be automatically deemed deferred and any such purported transfer, assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approvals or Notifications have been obtained or made; provided , however , that if such legal impediments are not removed, or such Approvals or Notifications are not obtained or made, in each case by the second (2nd) anniversary of the Distribution Date, then, unless the parties hereto mutually shall otherwise determine, all CareFusion Assets and CareFusion Liabilities that are held by any member of the Cardinal Health Group, as the case may be, will be transferred or assigned to or assumed by the CareFusion Group at such time and at CareFusion’s cost by way of a direct transfer or assignment of the underlying CareFusion Assets or assumption of the underlying CareFusion Liabilities, as the case may be. Notwithstanding the foregoing, any such CareFusion Assets or CareFusion Liabilities shall continue to constitute CareFusion Assets and CareFusion Liabilities for all other purposes of this Agreement.

(c) If any transfer or assignment of any CareFusion Asset or any assumption of any CareFusion Liabilities intended to be transferred, assigned or assumed hereunder, as the case may be, is not consummated on or prior to the Distribution Date, whether as a result of the provisions of Section 2.5(b) or for any other reason, then, insofar as reasonably possible, the member of the Cardinal Health Group retaining such CareFusion Asset or such CareFusion Liability (including the CareFusion Assets and CareFusion Liabilities set forth on Schedule 2.5(c) ), as the case may be, shall thereafter hold such CareFusion Asset or CareFusion Liability, as the case may be, for the use and benefit of the member of the CareFusion Group entitled thereto (at the expense of the member of the CareFusion Group entitled thereto). In addition, the member of the Cardinal Health Group retaining such CareFusion Asset or such CareFusion Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such CareFusion Asset or CareFusion Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the member of the CareFusion Group to whom such CareFusion Asset is to be transferred or assigned, or which will assume such CareFusion Liability, as the case may be, in order to place such member of the CareFusion Group in a substantially similar position as if such CareFusion Asset or CareFusion Liability had been transferred, assigned or assumed as contemplated hereby and so that all the benefits and burdens relating to such CareFusion Asset or CareFusion Liability, as the case may

 

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be, including use, risk of loss, potential for gain, and dominion, control and command over such CareFusion Asset or CareFusion Liability, as the case may be, is to inure from and after the Effective Time to the CareFusion Group.

(d) If and when the Approvals or Notifications, the absence of which caused the deferral of transfer or assignment of any CareFusion Asset or the deferral of assumption of any CareFusion Liability pursuant to Section 2.5(b) , are obtained or made, and, if and when any other legal impediments for the transfer or assignment of any CareFusion Asset or the assumption of any CareFusion Liability have been removed, the transfer or assignment of the applicable CareFusion Asset or the assumption of the applicable CareFusion Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable Transaction Document.

(e) Any member of the Cardinal Health Group retaining a CareFusion Asset or CareFusion Liability due to the deferral of the transfer or assignment of such CareFusion Asset or the deferral of the assumption of such CareFusion Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available) by CareFusion or the member of the CareFusion Group entitled to the CareFusion Asset or CareFusion Liability, other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed by CareFusion or the member of the CareFusion Group entitled to such CareFusion Asset or CareFusion Liability.

2.6 Novation of CareFusion Liabilities .

(a) Each of Cardinal Health and CareFusion, at the request of the other, shall use its commercially reasonable efforts to obtain, or to cause to be obtained, as soon as reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all obligations under agreements, leases, licenses and other obligations or Liabilities of any nature whatsoever that constitute CareFusion Liabilities, or to obtain in writing the unconditional release of all parties to such arrangements other than any member of the CareFusion Group, so that, in any such case, the members of the CareFusion Group will be solely responsible for such Liabilities; provided , however , that, except as otherwise expressly provided in any of the other Transaction Documents, neither Cardinal Health nor CareFusion shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any third Person from whom any such consent, substitution, approval, amendment or release is requested.

(b) If Cardinal Health or CareFusion is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release, the applicable member of the Cardinal Health Group shall continue to be bound by such agreement, lease, license or other obligation or Liability and, unless not permitted by the terms thereof or by Law, CareFusion shall, as agent or subcontractor for such member of the Cardinal Health Group, as the case may be, pay, perform and discharge fully all the obligations or other Liabilities of such member of the Cardinal Health Group that constitute CareFusion Liabilities, as the case may be, thereunder from and after the Effective Time. CareFusion shall indemnify each Cardinal Health Indemnified Party, and hold each of them harmless, against any Liabilities arising in connection

 

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therewith; provided , that pursuant hereto CareFusion shall have no obligation to indemnify any Cardinal Health Indemnified Party that has engaged in any knowing violation of Law, fraud or misrepresentation in connection therewith. Cardinal Health shall cause each member of the Cardinal Health Group without further consideration, to pay and remit, or cause to be paid or remitted, to CareFusion, promptly all money, rights and other consideration received by it or any member of the Cardinal Health Group in respect of such performance (unless any such consideration is an Excluded Asset). If and when any such consent, substitution, approval, amendment or release shall be obtained or the obligations under such agreement, lease, license or other obligations or Liabilities shall otherwise become assignable or able to be novated, Cardinal Health shall promptly assign, or cause to be assigned, all its obligations and other Liabilities thereunder or any obligations of any member of the Cardinal Health Group to CareFusion without payment of further consideration and CareFusion shall, without the payment of any further consideration, assume such obligations.

2.7 Novation of Liabilities other than CareFusion Liabilities .

(a) Each of Cardinal Health and CareFusion, at the request of the other, shall use its commercially reasonable efforts to obtain, or to cause to be obtained, as soon as reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all obligations under agreements, leases, licenses and other obligations or Liabilities for which a member of the Cardinal Health Group and a member of the CareFusion Group are jointly or severally liable and that do not constitute CareFusion Liabilities, or to obtain in writing the unconditional release of all parties to such arrangements other than any member of the Cardinal Health Group, so that, in any such case, the members of the Cardinal Health Group will be solely responsible for such Liabilities; provided , however , that, except as otherwise expressly provided in any of the other Transaction Documents, neither Cardinal Health nor CareFusion shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any third Person from whom any such consent, substitution, approval, amendment or release is requested.

(b) If Cardinal Health or CareFusion is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release, the applicable member of the CareFusion Group shall continue to be bound by such agreement, lease, license or other obligation or Liability and, unless not permitted by the terms thereof or by Law, Cardinal Health shall cause a member of the Cardinal Health Group, as agent or subcontractor for such member of the CareFusion Group, as the case may be, to pay, perform and discharge fully all the obligations or other Liabilities of such member of the CareFusion Group that do not constitute CareFusion Liabilities, as the case may be, thereunder from and after the Effective Time. Cardinal Health shall indemnify each CareFusion Indemnified Party and hold each of them harmless against any Liabilities (other than CareFusion Liabilities) arising in connection therewith; provided , that pursuant hereto Cardinal Health shall have no obligation to indemnify any CareFusion Indemnified Party that has engaged in any knowing violation of Law, fraud or misrepresentation in connection therewith. CareFusion shall cause each member of the CareFusion Group without further consideration, to pay and remit, or cause to be paid or remitted, to Cardinal Health or to another member of the Cardinal Health Group specified by Cardinal Health, promptly all money, rights and other consideration received by it or any member of the CareFusion Group in respect of such performance (unless any such consideration

 

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is a CareFusion Asset). If and when any such consent, substitution, approval, amendment or release shall be obtained or the obligations under such agreement, lease, license or other obligations or Liabilities shall otherwise become assignable or able to be novated, CareFusion shall promptly assign, or cause to be assigned, all its obligations and other Liabilities thereunder or any obligations of any member of the CareFusion Group to Cardinal Health or to another member of the Cardinal Health Group specified by Cardinal Health without payment of further consideration and Cardinal Health, without the payment of any further consideration shall, or shall cause such other member of the Cardinal Health Group to, assume such obligations.

2.8 Termination of Agreements and Arrangements .

(a) Except as set forth in Section 2.8(b) , in furtherance of the releases and other provisions of Section 5.1 , CareFusion and each member of the CareFusion Group, on the one hand, and Cardinal Health and each member of the Cardinal Health Group, on the other hand, hereby terminate, effective as of the Effective Time, any and all agreements, arrangements, commitments or understandings, whether or not in writing, between or among CareFusion and/or any member of the CareFusion Group, on the one hand, and Cardinal Health and/or any member of the Cardinal Health Group, on the other hand, effective as of the Effective Time, including those agreements, arrangements, commitments or understandings listed or described on Schedule 2.8(a) ; provided , however , to the extent any such agreement, arrangement, commitment or understanding is inconsistent with any other Transaction Document, such termination shall be effective as of the date of effectiveness of the applicable Transaction Document. No such terminated agreement, arrangement, commitment or understanding (including any provision thereof which purports to survive termination) shall be of any further force or effect after the Effective Time (or, to the extent contemplated by the proviso to the immediately preceding sentence, after the effective date of the applicable Transaction Document). Each party shall, at the reasonable request of any other party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing.

(b) The provisions of Section 2.8(a) shall not apply to any of the following agreements, arrangements, commitments or understandings (or to any of the provisions thereof):

(i) this Agreement and the other Transaction Documents (and each other agreement or instrument expressly contemplated by this Agreement or any other Transaction Document to be entered into or continued by any of the parties hereto or any of the members of their respective Groups);

(ii) except to the extent redundant with any provision of or service provided under this Agreement or any of the other Transaction Documents (including any schedules or exhibits thereto), the agreements, arrangements, commitments and understandings listed or described on Schedule 2.8(b)(ii) ;

(iii) any agreements, arrangements, commitments or understandings to which any Person other than the parties hereto and their respective wholly-owned Subsidiaries is a party (it being understood that (A) directors’ qualifying shares or similar interests will be disregarded for purposes of determining whether a Subsidiary is wholly owned and (B) to the extent that the rights and obligations of the parties and the members of their respective Groups under any such agreements, arrangements, commitments or understandings constitute CareFusion Assets or CareFusion Liabilities, they shall be assigned pursuant to Section 2.1 );

 

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