Document:

exv10w3

Exhibit 10.3

EXECUTION

SECOND AMENDMENT TO SECOND LIEN SENIOR TERM LOAN AGREEMENT

     THIS SECOND AMENDMENT TO SECOND LIEN SENIOR TERM LOAN AGREEMENT (this “Second Amendment”) is
entered into as of June 30, 2009, among QUEST CHEROKEE, LLC, a Delaware limited liability company
(the “Borrower”), QUEST ENERGY PARTNERS, L.P., a Delaware limited partnership (the “MLP”), QUEST
CHEROKEE OILFIELD SERVICE, LLC, a Delaware limited liability company (“QCOS”, QCOS and MLP
collectively called the “Guarantors” and individually a “Guarantor”), ROYAL BANK OF CANADA, as
Administrative Agent and Collateral Agent for the Lenders parties to the hereinafter defined Term
Loan Agreement (in such capacities, the “Administrative Agent” and “Collateral Agent,”
respectively), KEYBANK NATIONAL ASSOCIATION, as Syndication Agent (in such capacity, the
“Syndication Agent”), SOCIÉTÉ GÉNÉRALE, as Documentation Agent (in such capacity, the
“Documentation Agent”), and the undersigned Lenders comprising Required Lenders.

     Reference is made to the Second Lien Senior Term Loan Agreement dated as of July 11, 2008
among Borrower, the Administrative Agent, the Collateral Agent, the Syndication Agent, the
Documentation Agent and the Lenders parties thereto, as amended by a First Amendment to Second Lien
Senior Term Loan Agreement dated as of October 28, 2008 (as amended, the “Term Loan Agreement”).
Unless otherwise defined in this Second Amendment, capitalized terms used herein shall have the
meaning set forth in the Term Loan Agreement; all section, exhibit and schedule references herein
are to sections, exhibits and schedules in the Term Loan Agreement; and all paragraph references
herein are to paragraphs in this Second Amendment.

RECITALS

     A. The Borrower, Administrative Agent, the Syndication Agent, the Documentation Agent and
Lenders desire to enter into this Second Amendment.

     Accordingly, for adequate and sufficient consideration, the parties hereto agree, as follows:

     Paragraph 1. Amendments. Effective as of the Second Amendment Effective Date
(hereinafter defined), the Term Loan Agreement is amended as follows:

     1.1 Definitions. Section 1.01 of the Term Loan Agreement is amended as follows:

     (a) The following definition is amended in its entirety to read as follows:

     “Agreement means this Credit Agreement as amended by the First Amendment to Credit
Agreement and Second Amendment to Credit Agreement.”

     (b) The following definitions are inserted alphabetically into Section 1.01 of the Term Loan
Agreement:

     “Second Amendment Effective Date means June 30, 2009.”

     “Second Amendment to Credit Agreement means that certain Second Amendment to Second
Lien Senior Term Loan Agreement dated as of June 30, 2009, among the Borrower, Royal Bank of
Canada, as Administrative Agent, Collateral Agent and as a Lender, KeyBank

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National Association, as Syndication Agent and as a Lender, Société Générale, as
Documentation Agent and as a Lender, and the Lenders party thereto.”

     1.2 Section 6.02(b). Section 6.02(b) of the Credit Agreement is amended to
read in its entirety as follows:

     “(b) as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the MLP, an unaudited
consolidated balance sheet of the MLP and its Subsidiaries as at the end of such
fiscal quarter, and the related statements of income and cash flows for such fiscal
quarter and for the portion of the MLP’s fiscal year then ended (provided, that if
the MLP is a public company, such financial statements shall be required to be
furnished no later than the date that the MLP is required to timely file its
quarterly report on Form 10-Q with the Securities Exchange Commission (taking into
account any extension of time available under Rule 12b-25 under the Securities
Exchange Act of 1934)), setting forth in each case in comparative form the figures
for the corresponding fiscal quarter of the previous fiscal year of the MLP and the
corresponding portion of the previous fiscal year of the MLP, if any, all in
reasonable detail and certified by a Responsible Officer of the Borrower, as fairly
presenting in all material respects the financial condition, results of operations
and cash flows of the MLP and its Subsidiaries in accordance with GAAP (except as
otherwise noted herein), subject only to normal year-end audit adjustments and the
absence of footnotes and to adjustments or restatements arising out of or related to
the Misappropriation Transaction; provided, delivery of the unaudited balance sheet,
statement of income and cash flows of the MLP and its Subsidiaries for the fiscal
quarters ending September 30, 2008 and March 31, 2009 may be delayed and not
delivered to the Administrative Agent until August 15, 2009;”

     Paragraph 2. Effective Date. This Second Amendment shall not become effective until
the date (such date, the “Second Amendment Effective Date”) the Administrative Agent receives all
of the agreements, documents, certificates, instruments, and other items described below:

     (a) this Second Amendment, executed by the Borrower, the Guarantors, the Administrative Agent,
the Syndication Agent, the Documentation Agent and the Required Lenders;

     (b) from the Borrower and the existing Guarantors, such certificates of secretary, assistant
secretary, manager, or general partner, as applicable, as the Administrative Agent may require,
certifying (i) resolutions of its board of directors, managers or members (or their equivalent)
authorizing the execution and performance of this Second Amendment and the other Loan Documents
which such Person is executing in connection herewith, (ii) the incumbency and signature of the
officer executing such documents, and (iii) no change in such Person’s organizational documents
since July 11, 2008;

     (c) payment on the Second Amendment Effective Date to the Administrative Agent of a $15,000.00
amendment fee which fee will be shared ratably among each Lender timely approving the Second
Amendment, which fee once paid will be fully earned and nonrefundable (as used in this Second
Amendment, ratably shared means that proportion which the Borrowing Base of a timely approving
Lender bears to the Borrowing Base of all timely approving Lenders);

     (d) fees and expenses required to be paid pursuant to Paragraph 5 of this Second Amendment, to
the extent invoiced prior to the Second Amendment Effective Date; and

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     (e) such other assurances, certificates, documents and consents as the Administrative Agent
may require.

     Paragraph 3. Acknowledgment and Ratification. The Borrower and the Guarantors each (i)
consent to the agreements in this Second Amendment and (ii) agree and acknowledge that the
execution, delivery, and performance of this Second Amendment shall in no way release, diminish,
impair, reduce, or otherwise affect the respective obligations of the Borrower or any Guarantor
under the Loan Documents to which it is a party, which Loan Documents shall remain in full force
and effect, as amended and waived hereby, and all rights thereunder are hereby ratified and
confirmed.

     Paragraph 4. Representations. The Borrower and the Guarantors each represent and
warrant to the Administrative Agent and the Lenders that as of the Second Amendment Effective Date
and after giving effect to the waivers and amendments set forth in this Second Amendment (a) all
representations and warranties in the Loan Documents are true and correct in all material respects
as though made on the date hereof, except to the extent that any of them speak to a different
specific date, and (b) no Default or Event of Default exists.

     Paragraph 5. Expenses. The Borrower shall pay on demand all reasonable costs, fees,
and expenses paid or incurred by the Administrative Agent incident to this Second Amendment,
including, without limitation, Attorney Costs in connection with the negotiation, preparation,
delivery, and execution of this Second Amendment and any related documents, filing and recording
costs, and the costs of title insurance endorsements, if any.

     Paragraph 6. Miscellaneous.

     (a) This Second Amendment is a “Loan Document” referred to in the Term Loan Agreement. The
provisions relating to Loan Documents in Article X of the Term Loan Agreement are incorporated in
this Second Amendment by reference. Unless stated otherwise (i) the singular number includes the
plural and vice versa and words of any gender include each other gender, in each case, as
appropriate, (ii) headings and captions may not be construed in interpreting provisions, (iii) this
Second Amendment will be construed, and its performance enforced, under New York law and applicable
federal law, (iv) if any part of this Second Amendment is for any reason found to be unenforceable,
all other portions of it nevertheless remain enforceable, and (v) this Second Amendment may be
executed in any number of counterparts with the same effect as if all signatories had signed the
same document, and all of those counterparts must be construed together to constitute the same
document.

     Paragraph 7. Entire Agreement. This Second Amendment represents the final
agreement between the parties about the subject matter of this amendment and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties.

     Paragraph 8. Parties. This Second Amendment binds and inures to the benefit of the
Borrower, the Guarantors, the Administrative Agent, the Collateral Agent, the Syndication Agent,
the Documentation Agent, the Lenders, and their respective successors and assigns.

     Paragraph 9. Further Assurances. The parties hereto each agree to execute from time to
time such further documents as may be necessary to implement the terms of this Second Amendment.

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     Paragraph 10. Release. As additional consideration for the execution, delivery and
performance of this Second Amendment by the parties hereto and to induce the Administrative Agent,
the Collateral Agent and the Lenders to enter into this Second Amendment, the Borrower warrants and
represents to the Administrative Agent, the Collateral Agent and the Lenders that no facts, events,
statuses or conditions exist or have existed which, either now or with the passage of time or
giving of notice, or both, constitute or will constitute a basis for any claim or cause of action
against the Administrative Agent, the Collateral Agent or any Lender or any defense to (i) the
payment of Obligations under the Term Notes and/or the Loan Documents, or (ii) the performance of
any of its obligations with respect to the Term Notes and/or the Loan Documents. In the event any
such facts, events, statuses or conditions exist or have existed, Borrower unconditionally and
irrevocably hereby RELEASES, RELINQUISHES and forever DISCHARGES Administrative Agent, the
Collateral Agent and the Lenders, as well as their predecessors, successors, assigns, agents,
officers, directors, shareholders, employees and representatives, of and from any and all claims,
demands, actions and causes of action of any and every kind or character, past or present, which
Borrower may have against any of them or their predecessors, successors, assigns, agents, officers,
directors, shareholders, employees and representatives arising out of or with respect to (a) any
right or power to bring any claim for usury or to pursue any cause of action based on any claim of
usury, and (b) any and all transactions relating to the Loan Documents occurring prior to the date
hereof, including any loss, cost or damage, of any kind or character, arising out of or in any way
connected with or in any way resulting from the acts, actions or omissions of any of them, and
their predecessors, successors, assigns, agents, officers, directors, shareholders, employees and
representatives, including any breach of fiduciary duty, breach of any duty of fair dealing, breach
of confidence, breach of funding commitment, undue influence, duress, economic coercion, conflict
of interest, negligence, bad faith, malpractice, intentional or negligent infliction of mental
distress, tortious interference with contractual relations, tortious interference with corporate
governance or prospective business advantage, breach of contract, deceptive trade practices, libel,
slander or conspiracy, but in each case only to the extent permitted by applicable Law.

     The parties hereto have executed this Second Amendment in multiple counterparts to be
effective as of the Second Amendment Effective Date.

Remainder of Page Intentionally Blank

Signature Pages to Follow.

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     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed
as of the Second Amendment Effective Date.

	 	 	 	 	 
	 	BORROWER:

QUEST CHEROKEE, LLC,

as Borrower

 	 
	 	By:  	/s/ David Lawler
 	 
	 	 	David Lawler 	 
	 	 	President 	 
	 
	 	GUARANTORS:

QUEST ENERGY PARTNERS, L.P.,

as a Guarantor

 	 
	 	By:  	QUEST ENERGY GP, LLC,

Its General Partner

 	 
	 	By:  	/s/ David Lawler
 	 
	 	 	David Lawler, 	 
	 	 	President 	 
	 
	 	QUEST CHEROKEE OILFIELD SERVICE, LLC,

as a Guarantor

 	 
	 	By:  	QUEST CHEROKEE, LLC,

Its Sole Member

 	 
	 	By:  	/s/ David Lawler
 	 
	 	 	David Lawler, 	 
	 	 	President 	 
	 

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Signature Page 1

 

	 	 	 	 	 
	AGREED TO AS OF THE SECOND

AMENDMENT EFFECTIVE DATE:
 	
ADMINISTRATIVE AGENT:

ROYAL BANK OF CANADA,

as Administrative Agent and Collateral Agent

 	 
	 	By:  	/s/ Susan Khokher
 	 
	 	 	Name:  	Susan Khokher 	 
	 	 	Title:  	Manager, Agency 	 
	 

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Signature Page 2

 

	 	 	 	 	 
	AGREED TO AS OF THE SECOND

AMENDMENT EFFECTIVE DATE:
 	
L/C ISSUER AND LENDER:

ROYAL BANK OF CANADA, as a Lender

and L/C Issuer

 	 
	 	By:  	/s/ Leslie P. Vowell
 	 
	 	 	Leslie P. Vowell 	 
	 	 	Attorney-in-Fact 	 
	 

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Signature Page 3

 

	 	 	 	 	 
	AGREED TO AS OF THE SECOND

AMENDMENT EFFECTIVE DATE: 	
KEYBANK NATIONAL ASSOCIATION,

as Syndication Agent and a Lender

 	 
	 	By:  	/s/ Todd Coker
 	 
	 	 	Name:  	Todd Coker 	 
	 	 	Title:  	Assistant Vice President 	 
	 

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Signature Page 4

 

	 	 	 	 	 
	AGREED TO AS OF THE SECOND

AMENDMENT EFFECTIVE DATE: 	
SOCIÉTÉ GÉNÉRALE, as Documentation Agent and

a Lender

 	 
	 	By:  	/s/ Elena Robciuc
 	 
	 	 	Name:  	Elena Robciuc 	 
	 	 	Title:  	Director 	 
	 

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Signature Page 5

 

	 	 	 	 	 
	AGREED TO AS OF THE SECOND

AMENDMENT EFFECTIVE DATE: 	
AMEGY BANK, N.A., as a Lender

 	 
	 	By:  	/s/ Stewart T. Lang
 	 
	 	 	Name:  	Stewart T. Lang 	 
	 	 	Title:  	Vice President 	 
	 

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Signature Page 6EX-10.51

Exhibit 10.51

FORM
OF

EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (the “Agreement”) by and between CareFusion Corporation, a Delaware
corporation (the “Company”) and David L. Schlotterbeck (the “Executive”) is dated as of the ___
day of July 2009 (the “Agreement”).

     IT IS HEREBY AGREED AS FOLLOWS:

     1. Effective Date. The effective date of this Agreement (the “Effective Date”) shall
be the effective date of the spin-off of the Company from Cardinal Health, Inc.

     2. Employment Period. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to serve the Company, subject to the terms and conditions of this
Agreement, for the period commencing on the Effective Date and ending on the date of the Company’s
annual meeting of stockholders next following the third anniversary of the Effective Date (the
“Employment Period”), unless prior to such date the employment of the Executive is terminated
pursuant to this Agreement. At least one-hundred and eighty (180) days before the end of the
Employment Period, the parties will discuss either succession planning or the potential for
extension of this Agreement. If the Executive remains employed with the Company after the end of
the Employment Period without an extension of the Agreement, he will be an employee “at-will.”

     3.  Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, the Executive shall serve as Chairman of the Board of Directors and Chief
Executive Officer of the Company with such authority, duties and responsibilities as are
customarily assigned to such positions. The Executive shall report directly to the Board of
Directors of the Company (the “Board”). The Executive’s services shall be performed in San Diego,
California.

          (ii) During the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote his full business attention and
time to the business and affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such responsibilities. During the Employment Period,
it shall not be a violation of this Agreement for the Executive to (A) serve on the board of
directors of, or own shares or hold options to purchase shares in, Virtual Radiologic, Inc., (B)
subject to the approval of the Board (which shall not be unreasonably withheld), serve on other
corporate, civic or charitable boards or committees, (C) deliver lectures, fulfill speaking
engagements or teach at educational institutions, (D) manage personal investments, so long as such
activities do not materially interfere with the performance of the Executive’s responsibilities as
an employee of the Company in accordance with this Agreement, and (E) own shares in companies that
are not competitors of the Company.

          (b) Compensation (i) Base Salary. During the Employment Period, the
Company shall pay Executive an annual base salary (“Annual Base Salary”) at a rate of not less than
$1,000,000 payable in accordance with the Company’s normal payroll policies. The Executive’s
Annual Base Salary shall be reviewed, and may be increased but not decreased, at

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least annually by the Human Resources and Compensation Committee of the Board (the
“Committee”) pursuant to its normal performance review policies for senior executives. Any
increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase
and the term Annual Base Salary as utilized in this Agreement shall thereafter refer to Annual Base
Salary as so increased.

          (ii) Annual Bonus. With respect to each fiscal year ending during the Employment
Period, the Executive shall be eligible to receive an annual cash bonus (“Annual Bonus”) determined
and paid at the sole discretion of the Company pursuant to terms and conditions of the Company
bonus plan for which the Executive is then eligible. Executive’s Annual Bonus target under this
Agreement for any fiscal year (the fiscal year’s “Target Bonus”) shall be an amount equal to 120%
of Executive’s Annual Base Salary. The actual Annual Bonus, which could be higher or lower than
the Target Bonus, shall be based on the attainment of performance objectives as determined no later
than 90 days after the beginning of the fiscal year by the Committee in consultation with the
Executive, and shall be paid, subject to any effective deferral elections that may be made by the
Executive pursuant to any deferred compensation plans that the Company may maintain, within two and
one-half months following the end of the fiscal year for which the Annual Bonus is earned.
Notwithstanding anything herein to the contrary, to the extent permitted or required by governing
law, the Committee shall have discretion to require the Executive to repay to the Company the
amount of any Annual Bonus to the extent the Committee determines that such bonus was not actually
earned by the Executive due to (A) the amount of such payment was based on the achievement of
financial results that were subsequently the subject of a material accounting restatement that
occurs within three years of such payment (except in the case of a restatement due to a change in
accounting policy or simple error); (B) the Executive has engaged in fraud, gross negligence or
intentional misconduct; or (C) the Executive has deliberately misled the market or the Company’s
stockholders regarding the Company’s financial performance.

          (iii) Retention Award. The Executive shall receive a retention award (“Retention
Award”) consisting of restricted stock units (“RSUs”) and stock options (“Options”) to be granted
in 2009 on the date that annual equity awards are granted to employees (the “Grant Date”). The
Retention Award will be determined as follows, subject to the following terms and conditions:

               A. RSUs. The number of RSUs granted will equal two million dollars ($2 million), divided by
the closing price of the Company’s common stock on the Grant Date.

               B. Options. The number of Options granted will be determined by dividing two million dollars
($2 million) by the option value per share of the Company’s common stock (as determined by the
Committee, and with the volatility determined by the Company using the average volatility of
similar medical technology companies). The Options will be granted with an exercise price equal to
the closing price of the Company’s common stock on the Grant Date.

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               C. Vesting. The Retention Awards will vest and become exercisable in the case of Options,
and payable in the case of RSUs, as follows; provided, however, that, except as
provided below, the Executive must remain employed through the Employment Period (but not
thereafter) and continue to comply with the restrictive covenants set forth in Section 7 of
this Agreement (the “Covenants”) as of each applicable vesting date:

                         1. One-third of the Retention Award will vest on the third anniversary of the Effective Date;

                         2. One-third of the Retention Award will vest on the fourth anniversary of the Effective
Date; and

                         3. One-third of the Retention Award will vest on the fifth anniversary of the Effective Date.

               In the event that the Executive’s employment is terminated, prior to the third anniversary of
the Effective Date, by the Company without Cause, or the Executive terminates employment with the
Company for Good Reason, then the outstanding unvested Retention Awards will become fully vested on
the Executive’s Date of Termination but will not be exercisable or payable at that time. Rather,
the vested Retention Awards will become exercisable in the case of Options, and payable in the case
of RSUs, in equal installments on the Date of Termination (as hereinafter defined) and the first
and second anniversaries of the Executive’s Date of Termination, without regard to compliance with
the Covenants.

               All outstanding unvested Retention Awards will become fully vested and exercisable in the case
of Options, and payable in the case of RSUs, upon Executive’s death or Disability.

               All vested and unvested Retention Awards will be immediately forfeited and terminate if
Executive is terminated by the Company for Cause. All unexercised and unpaid Retention Awards will
be immediately forfeited and terminate if Executive does not comply with the Covenants during the
Restricted Period that begins upon Executive’s termination of employment at or after the end of the
Employment Period.

               D. RSU Settlement. Vested RSUs are paid in fully tradable shares of the Company’s common
stock within 30 days following the date on which they become payable in accordance with the
foregoing provisions.

               E. Option Exercises. Vested Options granted as part of the Retention Award that are or
become exercisable remain exercisable for the remaining term of the Option, subject to the
provisions of Section 3(b)(iii)C above.

               F. Award Agreements Control. The terms and conditions of the Retention Award will be
substantially in the form set forth in separate equity award agreements attached hereto as
Exhibit A and Exhibit B; in the event of any discrepancy between this

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Agreement and the provisions of the applicable award agreements, the provisions of the applicable
award agreements other than price, vesting and exercisability provisions will control.

          (iv) Annual Equity Grants. The Executive is eligible to receive annual equity-based
grants (“Annual Equity Grants”) during the Employment Period as determined in the discretion of the
Committee. The terms and conditions of Annual Equity Grants (other than exercisability and
forfeiture, which are described below) will be established by the Committee at the time of grant
and set forth in separate award agreements; in the event of any discrepancy between this Agreement
and the provisions of the applicable award agreements, the provisions of the applicable award
agreements will control.

               Notwithstanding the foregoing, the Company will grant to Executive an Annual Equity Grant in
2009, on the date on which annual employee grants are made, in addition to the Retention Award,
with a total value of seven million dollars ($7 million) on the date of grant. The Committee will
determine the type of awards which the Committee determines will be granted in Options in its discretion. The number of Options will be determined by
dividing that portion of the seven million dollars ($7 million) comprising the Annual Equity Grant by the option value per share of the Company’s common
stock (as determined by the Committee, and with the volatility determined by the Company using the
average volatility of similar medical technology companies).

               All Annual Equity Grants will be subject to the following terms and conditions:

               A. Vesting, Exercisability, and Forfeiture. Because the Executive is eligible for retirement
under the Company’s 2009 Long-Term Incentive Plan (the “LTIP”), all Annual Equity Grants will be
fully vested upon grant, but the Options will be subject to restrictions on exercisability as
described in the applicable award agreements, and RSUs and performance share units (“PSUs”) will be payable as described in the
applicable award agreements.

               Notwithstanding the foregoing,

                    (i) all outstanding Annual Equity Grants that are Options will become fully exercisable upon
termination of Executive’s employment by the Company without Cause, Executive’s termination of
employment with the Company for Good Reason, or Executive’s death or Disability;

                    (ii) all
outstanding Annual Equity Grants that are RSUs, other than PSUs,
will become payable upon termination of Executive’s employment by the Company without Cause,
Executive’s termination of employment with the Company for Good Reason, or Executive’s death or
Disability and under the foregoing circumstances, PSUs will paid based on actual
performance compared to target, at the same time payment of PSUs is made to other
senior executives; and

                    (iii) all outstanding Annual Equity Grants will continue to become exercisable or payable, as
applicable, in accordance with their terms in the event of voluntary termination by the Executive
without Good Reason.

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                    In addition, all outstanding Annual Equity Grants will become fully exercisable and payable
upon a “Change of Control” of the Company, as defined in the LTIP, and with respect to Annual
Equity Grants that are RSUs subject to Section 409A of the Internal Revenue Code and the Treasury
Regulations thereunder (“Section 409A”), provided that such “Change of Control” is also a “change
in control event” as described in Section 409A. All unexercised and unpaid Annual Equity Grants
will be immediately forfeited and terminate if Executive is terminated by the Company for Cause.

               B. Options. Annual Equity Grants that are Options will be granted with an exercise price
equal to the closing price of the Company’s common stock on the grant date. Annual Equity Grants
that are Options will remain exercisable for the entire term of the Option unless earlier forfeited
and terminated as described above.

          (v) Other Employee Benefit Plans. During the Employment Period, the Executive and/or
the Executive’s family, as the case may be, shall be eligible for participation in and shall
receive all benefits under savings and retirement plans that are tax-qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended (the “Code”), in plans that are supplemental to
any such tax-qualified plans, and welfare benefit plans, practices, policies and programs provided
by the Company, but not any severance plan, practice, policy or program, on a basis that is no less
favorable than those generally applicable or made available to other senior executives of the
Company. The Executive shall be eligible for participation in fringe benefits and perquisite
plans, practices, policies and programs (including, without limitation, expense reimbursement
plans, practices, policies and programs) on a basis that is commensurate with his position and no
less favorable than those generally applicable or made available to most other senior executives of
the Company.

          (vi) Expenses. During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all expenses incurred by the Executive in accordance with the
Company’s policies for its senior executives.

          (vii) Use of Aircraft. During the Employment Period, the Executive, and his immediate
family when accompanied by Executive, shall be entitled to personal use of Company aircraft,
subject to availability, up to a value of $100,000 per fiscal year of the Company determined in accordance with the SEC’s rules
for valuing personal use of corporate aircraft for purposes of proxy disclosure, at no cost and
without reimbursement to the Company; provided however, that income will be imputed to Executive
for tax purposes pursuant to Company policy as established by the Board or Committee and consistent
with applicable tax regulations. Any use in excess of the dollar value limit described above must
be approved by the Committee in advance.

          (viii) Vacation. During the Employment Period, the Executive shall be entitled to
paid vacation in accordance with the plans, policies, programs and practices of the Company as in
effect with respect to other senior executives of the Company.

     (c) Indemnification. Company shall indemnify and hold harmless Executive in
accordance with the provisions of the CareFusion Officer and Director Indemnification Agreement
attached hereto as Exhibit C.

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     (d) Rabbi Trust. Executive may defer compensation pursuant to the CareFusion
Corporation Deferred Compensation Plan, as it may be amended from time to time, and deferrals shall
be held in a rabbi trust, subject to the Company’s policies with respect to maintaining a rabbi
trust for such purpose.

     4. Termination of Employment. (a) Death or Disability. The Executive’s
employment shall terminate automatically upon the Executive’s death during the Employment Period.
If the Company determines in good faith that the Disability of the Executive has occurred during
the Employment Period (pursuant to the definition of Disability set forth below), it may provide
the Executive with written notice after such determination in accordance with Section 11(b) of this
Agreement of its intention to terminate the Executive’s employment. In such event, the Executive’s
employment with the Company shall terminate effective on the 30th day after receipt of such notice
by the Executive (the “Disability Effective Date”), provided that, within thirty (30) days
after such receipt, the Executive shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement, other than with respect to vesting and payment
of RSUs subject to Section 409A, “Disability” shall mean the absence of the Executive from the
Executive’s duties with the Company on a full-time basis for not less than 120 consecutive days (or
an aggregate period of not less than 180 days) as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected by the Company or its
insurers and acceptable to the Executive or the Executive’s legal representative. For purposes of
vesting and payment of RSUs, to the extent necessary to comply with Section 409A, “Disability”
shall have the meaning provided in Section 409A.

     (b) Cause. The Company may terminate the Executive’s employment during the Employment
Period for Cause. For purposes of this Agreement, “Cause” shall mean:

          (i) the willful and continued failure of the Executive to perform substantially the
Executive’s duties with the Company (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance is delivered to the
Executive by the Board or its representative, which specifically identifies the manner in which the
Board believes that the Executive has willfully and continuously failed to perform substantially
the Executive’s duties with the Company;

          (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company or its affiliates;

          (iii) conviction of a felony; or

          (iv) a material breach of Section 7 of this Agreement subject to the cure provisions of
Section 7(a).

For purposes of this Section 4(b), no act or failure to act on the part of the Executive shall be
considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s act or omission was in the best interests of the
Company. Any act, or failure to act, based upon express authority given pursuant to a resolution
duly adopted by the Board with respect to such act or omission or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be done, by

6

 

the Executive in good faith and in the best interests of the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less
than three-quarters (3/4) of the entire membership of the Board not including the Executive at a
meeting of the Board called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive engaged in the conduct
described in Section 4(b) (i), (ii), or (iv) above, and specifying the particulars thereof in
detail.

     (c) Good Reason. The Executive’s employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, “Good Reason” shall mean, in the absence of a written
consent of the Executive:

          (i) the assignment to the Executive of any duties materially inconsistent in any respect with
the Executive’s position (including status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 3(a) of this Agreement, or any other action
by the Company which results in a material diminution in such position, authority, duties or
responsibilities, excluding for this purpose any action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the Executive;

          (ii) any failure by the Company to comply with any of the provisions of Sections 3(a) or 3(b)
of this Agreement, other than a failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;

          (iii) the Company requiring the Executive to be based at any office or location more than 10
miles from that provided in Section 3(a)(i) hereof, provided that reasonable travel required in
connection with Executive’s reporting relationships and responsibilities to the Board shall not be
deemed a breach hereof;

          (iv) any purported termination by the Company of the Executive’s employment otherwise than as
expressly permitted by this Agreement;

          (v) any failure by the Company to comply with Section 9(c) of this Agreement; or

          (vi) any failure of the Board or shareholders of the Company to elect Executive as a member of
the Board, or the removal of Executive from the Board for reasons other than those justifying or
requiring such removal under the other provisions of this Agreement.

     (d) Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto
given in accordance with Section 11(b) of this Agreement. For purposes of this Agreement, a
“Notice of Termination” means a written notice which (i) indicates the specific

7

 

termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth
in reasonable detail the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty (30) days after the giving of such notice). The failure
by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive
or the Company, respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights
hereunder.

     (e) Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive with or without Good Reason,
the date of receipt of the Notice of Termination or any later date specified therein within thirty
(30) days of such notice, as the case may be, (ii) if the Executive’s employment is terminated by
the Company other than for Cause or Disability, the Date of Termination shall be the date on which
the Company notifies the Executive of such termination and (iii) if the Executive’s employment is
terminated by reason of death or Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be.

     (f) Resignation. Upon termination of the Executive’s employment for any reason, the
Executive agrees to resign, as of the Date of Termination, to the extent applicable, from any
positions that the Executive holds with the Company and its affiliated companies, the Board (and
any committees thereof) and the Board of Directors (and any committees thereof) of any of the
affiliated companies.

     5. Obligations of the Company upon Termination. (a) Good Reason; Other Than for
Cause or Disability. If, during the Employment Period, (i) the Company shall terminate the
Executive’s employment other than for Cause or Disability, or (ii) the Executive shall terminate
employment for Good Reason:

          (i) Subject to the execution by the Executive and the Company of a release of claims in favor
of the Company, substantially in the form attached hereto as Exhibit D, the Company shall
pay to the Executive the aggregate of the following amounts:

     A. The sum of (1) the Executive’s accrued but unpaid Annual Base Salary and any
accrued vacation pay through the Date of Termination, (2) the Executive’s business
expenses that have not been reimbursed by the Company as of the Date of Termination
that were incurred by the Executive prior to the Date of Termination in accordance
with the applicable Company policy, and (3) the Executive’s Annual Bonus earned for
the fiscal year immediately preceding the fiscal year in which the Date of
Termination occurs if such bonus has not been paid as of the Date of Termination
(the sum of the amounts described in clauses (1) through (3), shall be hereinafter
referred to as the “Accrued Obligations”). The Accrued Obligations shall be paid in
a lump sum on the Date of Termination of Executive’s employment; provided that
notwithstanding the foregoing, if the

8

 

Executive has made an irrevocable election under any deferred compensation
arrangement subject to Section 409A to defer any portion of the Annual Bonus
described above, then for all purposes of this Section 5, such deferral election,
and the terms of the applicable arrangement shall apply, and such portion shall not
be considered as part of the “Accrued Obligations” but shall instead be an “Other
Benefit” (as defined below).

     B. A pro rata Annual Bonus for the year of termination (“Pro Rata Bonus”),
based upon the actual achievement of the performance objectives as determined by the
Committee for the fiscal year of termination, to be paid in a lump sum at the same
time as the Annual Bonus is paid to other senior executives of the Company, but in
no event later than two and one-half months following the end of the fiscal year in
which occurs the Date of Termination; provided that notwithstanding the foregoing,
if the Executive has made an irrevocable election under any deferred compensation
arrangement subject to Section 409A to defer any portion of the Annual Bonus
described above, then for all purposes of this Section 5, such deferral election,
and the terms of the applicable arrangement shall apply, and such portion shall not
be considered as part of the “Accrued Obligations” but shall instead be an “Other
Benefit” (as defined below).

          (ii) The Company shall pay as severance to the Executive an amount equal to twice the sum of
(1) the Executive’s Annual Base Salary and (2) the Target Bonus in respect of the fiscal year of
termination or, if the Target Bonus has not been established for such fiscal year, in respect of
the immediately preceding fiscal year, payable in twenty-four (24) equal monthly installments
commencing on the later of (A) thirty (30) days following the expiration of any review and
revocation period set forth in the release of claims required by this Section 5, or (B) the first
business day after the date that is six (6) months following the Executive’s Separation from
Service (as defined in Section 10).

          (iii) The Company shall pay the premiums for COBRA continuation coverage for the Executive and
his eligible dependents through the earliest of: (a) the Executive’s coverage under a health
insurance plan of another employer; or (b) eighteen (18) months following the Date of Termination.

          (iv) To the extent not theretofore paid or provided, the Company shall timely pay or provide
to the Executive any other amounts or benefits required to be paid or provided or which the
Executive is eligible to receive under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies through the Date of Termination (such other
amounts and benefits shall be hereinafter referred to as the “Other Benefits”), in accordance with
the terms of such plan, program, policy or practice or contract or agreement. As used in this
Agreement, the term “affiliated companies” shall include any company controlled by, controlling or
under common control with the Company.

     Notwithstanding the foregoing or anything else to the contrary in this Agreement, payments
under this Section 5(a) shall be subject to the provisions of Section 10, including but not limited
to the provisions of paragraph (f) thereof.

9

 

     (b) Death. If the Executive’s employment is terminated by reason of the Executive’s
death during the Employment Period the Company shall have no further obligations to the Executive’s
legal representatives under this Agreement, other than for (i) payment of Accrued Obligations, (ii)
the timely payment or provision of Other Benefits in accordance with their terms, (iii) payment of
the Pro Rata Bonus, and (iv) vesting, exercisability, and payment of the awards as described in
Sections 3(b)(iii) and 3(b)(iv). Accrued Obligations shall be paid to the Executive’s estate or
beneficiary, as applicable, in a lump sum in cash within thirty (30) days of the Date of
Termination and the Pro Rata Bonus shall be paid to the Executive’s estate or beneficiary, as
applicable, on the date specified in Section 5(a)(i)(B). In the event of the Executive’s death
after his termination of employment, but prior to the receipt of all amounts to which he is
entitled under this Agreement, all remaining amounts to which he is entitled shall be paid to his
estate or beneficiary, as applicable.

     (c) Disability. If the Executive’s employment is terminated by the Company by reason
of the Executive’s Disability during the Employment Period, the Company shall have no further
obligations to the Executive, other than for (i) payment of Accrued Obligations, (ii) the timely
payment or provision of Other Benefits in accordance with their terms, (iii) payment of the Pro
Rata Bonus, and (iv) vesting, exercisability, and payment of the awards as described in Sections
3(b)(iii) and 3(b)(iv). Accrued Obligations shall be paid to the Executive in a lump sum in cash
on the Date of Termination and the Pro Rata Bonus shall be paid to the Executive on the date
specified in Section 5(a)(i)(B). Notwithstanding the foregoing or anything else to the contrary in
this Agreement, payments under this Section 5(c) shall be subject to the provisions of Section 10,
including but not limited to the provisions of paragraph (f) thereof.

     (d) Cause; Other than for Good Reason. If the Executive’s employment shall be
terminated by the Company for Cause or the Executive terminates his employment without Good Reason
during the Employment Period, the Company shall have no further obligations to the Executive other
than the obligation to pay and provide to the Executive the Accrued Obligations through the Date of
Termination to the extent theretofore unpaid.

     (e) Retirement. Notwithstanding anything herein to the contrary, in the event the
Executive terminates employment due to his retirement (i.e., termination of employment on or after
the attainment of age 65), the Executive shall be entitled to payment of the Pro Rata Bonus in
Section 5(a)(i)(B).

     6. Full Settlement. The Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not
the Executive obtains other employment. The Company agrees to pay (within thirty (30) days
following the Company’s receipt of an invoice from the Executive) at any time from the Effective
Date through he Executive’s remaining lifetime, (or, if longer, through the 20th
anniversary of the Effective Date), to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result of any contest by either

10

 

party
(including, as the case may be, the Company, any of its affiliates or their respective
predecessors, successors or assigns, or the Executive, his estate, beneficiaries or their
respective successors and assigns) of the validity or enforceability of, or liability under, any
provision of this Agreement (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement); plus in each case interest on any delayed payment at
the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code, if the Executive
prevails on any material claim made by him, and disputed by the Company under the terms of this
Agreement.

          7. Covenants. (a) Introduction. The parties acknowledge that the provisions
and covenants contained in this Section 7 are ancillary and material to this Agreement and that the
limitations contained herein are reasonable in geographic and temporal scope and do not impose a
greater restriction or restraint than is necessary to protect the goodwill and other legitimate
business interests of the Company. The parties also acknowledge and agree that the provisions of
this Section 7 do not adversely affect the Executive’s ability to earn a living in any capacity
that does not violate the covenants contained herein. The parties also acknowledge that before
Executive shall be determined to have breached any provision or covenant contained in this Section
7, Executive shall have been given notice of any such alleged breach and been given forty-five (45)
days after receipt of such notice of such breach to cure or remedy any such breach that is
reasonably susceptible of cure or remedy.

          (b) Confidential Information. The Executive shall hold in a fiduciary capacity for
the benefit of the Company and all of its subsidiaries, partnerships, joint ventures, limited
liability companies, and other affiliates (collectively, the “CareFusion Group”), all secret or
confidential information, knowledge or data relating to the CareFusion Group and its businesses
(including, without limitation, any proprietary and not publicly available information concerning
any processes, methods, trade secrets, intellectual property, research secret data, costs, names of
users or purchasers of their respective products or services, business methods, operating or
manufacturing procedures, or programs or methods of promotion and sale) that the Executive has
obtained or obtains during the Executive’s employment by the CareFusion Group and that is not
public knowledge (other than as a result of the Executive’s violation of this Section 7(b))
(“Confidential Information”). The Executive shall not communicate, divulge or disseminate
Confidential Information at any time during or after the Executive’s employment and/or service as a
consultant with the CareFusion Group, except with prior written consent of a
corporate officer of Company, or as otherwise required by law or legal process. All records,
files, memoranda, reports, customer lists, drawings, plans, documents and the like that the
Executive uses, prepares or comes into contact with during the course of the Executive’s employment
shall remain the sole property of the Company and/or the CareFusion Group, as applicable, and shall
be turned over to the applicable CareFusion Group company upon termination of the Executive’s
employment.

          (c) Non-Recruitment of CareFusion Group Employees, etc. Executive understands and
agrees that any information regarding Company employees is confidential and constitutes trade
secrets. In recognition of the confidential nature of information regarding Company employees,
Executive agrees that he shall not, at any time during the Restricted Period (as defined in this
Section 7(c)), without the prior written consent of the Company, engage in the following conduct (a
“Solicitation”): (i) directly or indirectly, contact, solicit, or recruit (whether

11

 

as an employee,
officer, director, agent, consultant, or independent contractor) any person who was or is at any
time during the previous twelve months an employee, representative, officer or director of the
CareFusion Group for the purpose of offering them employment by any other entity, business or
individual; or (ii) take any action to encourage or induce any employee, representative, officer or
director of the CareFusion Group to cease their relationship with the CareFusion Group for any
reason. A “Solicitation” does not include any recruitment of employees within or for the
CareFusion Group. The “Restricted Period” means the period of the Executive’s employment with the
CareFusion Group and the additional period ending on (i) in the event of a termination of
employment prior to the end of the Employment Period, the second anniversary of the Date of
Termination, or (ii) in the event of a termination of employment on or after the end of the
Employment Period, the second anniversary of the end of the Employment Period.

          (d) Non-Solicitation of Business. Executive acknowledges and agrees that Company’s
customers and any information regarding Company’s customers is confidential and constitutes trade
secrets. In recognition of the confidential and trade secret nature of information regarding
Company’s customers, Executive agrees that during the Restricted Period, the Executive shall not
(either directly or indirectly or as an officer, agent, employee, partner or director of any other
company, partnership or entity) solicit on behalf of any competitor of the CareFusion Group the
business of (i) any customer of the CareFusion Group at the time of the Executive’s employment or
Date of Termination, or (ii) any potential customer of the CareFusion Group which the Executive
knew to be an identified, prospective purchaser of services or products of the CareFusion Group.

          (e) Employment by Competitor. During the Restricted Period, the Executive shall not
invest in (other than in a publicly traded company with a maximum investment of no more than 1% of
outstanding shares), counsel, advise, or be otherwise engaged or employed by, any entity or
enterprise that competes with the CareFusion Group, by developing, manufacturing or selling any
product or service of a type, respectively, developed, manufactured or sold by the CareFusion
Group.

          (f) No Disparagement.

               (i) The Executive and the Company shall at all times refrain from taking actions or making
statements, written or oral, that (A) denigrate, disparage or defame the goodwill or reputation of
Executive or the CareFusion Group, as the case may be, or any of its trustees, officers, security
holders, partners, agents or former or current employees and directors, or (B) are intended to, or
may be reasonably expected to, adversely affect the morale of the employees of the CareFusion
Group. The Executive further agrees not to make any negative statement to third parties relating
to the Executive’s employment or any aspect of the businesses of CareFusion Group and not to make
any statements to third parties about the circumstances of the termination of the Executive’s
employment, or about the CareFusion Group or its trustees, directors, officer, security holders,
partners, agents or former or current employees and directors, except as may be required by a court
or government body.

               (ii) The Executive further agrees that, following termination of employment for any reason,
the Executive shall assist and cooperate with the Company with

12

 

regard to any matter or project in
which the Executive was involved during the Executive’s employment with the Company, including but
not limited to any litigation that may be pending or arise after such termination of employment.
Further, the Executive agrees to notify the Company at the earliest reasonable opportunity of any
contact that is made by any third parties concerning any such matter or project. The Company shall
not unreasonably request such cooperation of Executive and shall cooperate with the Executive in
scheduling any assistance by the Executive taking into account the Executive’s business and
personal affairs and shall compensate the Executive for any lost wages or expenses associated with
such cooperation and assistance.

          (g) Inventions. All plans, discoveries and improvements, whether patentable or
unpatentable, made or devised by the Executive, whether alone or jointly with others, from the date
of the Executive’s initial employment by the Company and continuing until the end of any period
during which the Executive is employed by the CareFusion Group, relating or pertaining in any way
to the Executive’s employment with or the business of the CareFusion Group, shall be promptly
disclosed in writing to the Secretary of the Board and are hereby transferred to and shall redound
to the benefit of the Company and shall become and remain its sole and exclusive property. The
Executive agrees to execute any assignment to the Company or its nominee, of the Executive’s entire
right, title and interest in and to any such discoveries and improvements and to execute any other
instruments and documents requisite or desirable in applying for and obtaining patents, trademarks
or copyrights, at the expense of the Company, with respect thereto in the United States and in all
foreign countries, that may be required by the Company. The Executive further agrees, during and
after the Employment Period, to cooperate to the extent and in the manner required by the Company,
in the prosecution or defense of any patent or copyright claims or any litigation, or other
proceeding involving any trade secrets, processes, discoveries or improvements covered by this
Agreement, but all necessary expenses thereof shall be paid by the Company.

          (h) Acknowledgement and Enforcement. The Executive acknowledges and agrees that: (A)
the purpose of the foregoing covenants is to protect the goodwill, trade secrets and other
Confidential Information of the Company; (B) because of the nature of the business in
which the CareFusion Group is engaged and because of the nature of the Confidential
Information to which the Executive has access, the Company would suffer irreparable harm and it
would be impractical and excessively difficult to determine the actual damages of the CareFusion
Group in the event the Executive breached any of the covenants of this Section 7; and (C) remedies
at law (such as monetary damages) for any breach of the Executive’s obligations under this Section
7 would be inadequate. The Executive therefore agrees and consents that (X) if the Executive
commits any breach of a covenant under this Section 7 during the Restricted Period upon termination
of employment at or after the end of the Employment Period, all unexercised and unpaid Retention
Awards will be immediately forfeited and terminate, and (Y) if the Executive commits any breach of
a covenant under this Section 7 or threatens to commit any such breach at any time, the Company
shall have the right (in addition to, and not in lieu of, any other right or that may be available
to it) to temporary and permanent injunctive relief from a court of competent jurisdiction, without
posting any bond or other security and without the necessity of proof of actual damage.

13

 

          (i) Similar Covenants in Other Agreements Unaffected. The Executive may be or become
subject to covenants contained in other agreements (including but limited to stock option and
restricted stock unit agreements) which are similar to those contained in this Section 7. Further,
a breach of the covenants contained in this Section 7 may have implications under the terms of such
other agreements, including but not limited to a forfeiture of equity awards and long-term cash
compensation. The Executive acknowledges the foregoing and understands that the covenants
contained in this Section 7 are in addition to, and not in substitution of, the similar covenants
contained in any such other agreements. The Company agrees that any forfeiture or repayment
obligation under any such agreement shall only be imposed after a determination by the Board of
Directors (after providing the Executive with reasonable notice and an opportunity to be heard with
counsel) that the Executive has violated any such covenant or has willfully engaged in any other
material misconduct which may be a basis for forfeiture or a repayment obligation thereunder.

          8. Certain Additional Payments by the Company. (a) Notwithstanding anything in this
Agreement to the contrary, in the event it shall be determined that any payment or distribution by
the Company or any of its affiliates to or for the benefit of the Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section 8) (a “Payment”)
would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties
are incurred by the Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then
the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, but excluding any income taxes and penalties imposed pursuant to Section 409A, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.

          (b) Subject to the provisions of Section 8(c), all determinations required to be made under
this Section 8, including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized certified public accounting firm reasonably
acceptable to the Executive as may be designated by the Company (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment, or such earlier
time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 8, shall be
paid by the Company to the Executive or directly to the Internal Revenue Service, in the sole
discretion of the Company, within five days of the later of (i) the due date for the payment of any
Excise Tax, and (ii) the receipt of the Accounting Firm’s determination; provided, however, that in
all events such payment shall be made no later than the end of the Executive’s taxable year next
following the taxable year in which the Executive remits the payment of the excise tax. Any
determination by the Accounting Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is

14

 

possible that Gross-Up Payments which will
not have been made by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company exhausts its remedies
pursuant to Section 8(c) and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

          (c) The Executive shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than 20 business days after
the Executive is informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive shall:

               (i) give the Company any information reasonably requested by the Company relating to such
claim,

               (ii) take such action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,

               (iii) cooperate with the Company in good faith in order effectively to contest such claim, and

               (iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 8(c), the Company shall control all proceedings taken in connection with such
contest, and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of such claim and may,
at its sole option, either pay the tax claimed to the appropriate taxing authority on behalf of the
Executive and direct the Executive to sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that, if the Company pays such
claim and directs the Executive to sue for a refund, the Company shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with

15

 

respect thereto) imposed with respect to such payment or with respect to any imputed
income in connection with such payment; and provided, further, that any extension
of the statute of limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company’s control of the contest shall be limited to issues
with respect to which the Gross-Up Payment would be payable hereunder, and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

          (d) If, after the receipt by the Executive of a payment by the Company of an amount on the
Executive’s behalf pursuant to Section 8(a) or 8(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 8(a) or 8(c)) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon and after taxes applicable thereto). If,
after payment by the Company of an amount on the Executive’s behalf pursuant to Section 8(a) or
8(c), a determination is made that the Executive shall not be entitled to any refund with respect
to such claim and the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such determination, then the amount
of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.

          9. Successors. (a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive. This Agreement shall
inure to the benefit of and be enforceable by the Executive’s legal representatives, heirs or
legatees and the Executive by written notice to the Company may designate any beneficiary with
respect to any amounts due under this Agreement upon the Executive’s death.

          (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

          (c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place. As
used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor
to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

          10. Code Section 409A. (a) This Agreement is intended to comply with, or otherwise
be exempt from, Section 409A. The Company and the Executive agree that they will execute any and
all amendments to this Agreement permitted under applicable law as they mutually agree in good
faith may be necessary to ensure compliance with the distribution provisions of Section 409A or as
otherwise needed to ensure that this Agreement complies with Section 409A.

16

 

          (b) Section 10(a) shall not be construed as a guarantee by the Company of any particular tax
effect to the Executive under this Agreement, however. The Company shall not be liable to the
Executive for any payment made under this Agreement that is determined to result in an additional
tax, penalty, or interest under Section 409A, nor for reporting in good faith any payment made
under this Agreement as an amount includible in gross income under Section 409A.

          (c) For purposes of Section 409A, the right to a series of installment payments under this
Agreement shall be treated as a right to a series of separate payments.

          (d) With respect to any reimbursement of expenses of, or any provision of in-kind benefits
to, the Executive as specified under this Agreement, such reimbursement of expenses or provision of
in-kind benefits shall be subject to the following conditions: (1) the expenses eligible for
reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the
expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable
year, except for any medical reimbursement arrangement providing for the reimbursement of expenses
referred to in Section 105(b) of the Code; (2) the reimbursement of an eligible expense shall be
made no later than the end of the year after the year in which such expense was incurred; and (3)
the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for
another benefit.

          (e) “Termination of employment,” “resignation,” or words of similar import used in this
Agreement mean, for purposes of any payments under this Agreement that are payments of deferred
compensation subject to Section 409A, the Executive’s “separation from service” (as determined in
accordance with regulations promulgated under Section 409A using the default rule under such
regulations) (“Separation from Service”).

          (f) Notwithstanding anything to the contrary in this Agreement, including but not limited to
Sections 5(a), 5(b), 5(c), 5(d) and 6, (i) any amounts and benefits payable hereunder which
constitute deferred compensation subject to Section 409A and would otherwise be payable or provided
to the Executive under this Agreement prior to the date which is six (6) months after the
Executive’s Separation from Service shall instead be paid, with interest on any delayed
payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code
(“Interest”), or provided on the first business day after the date that is six (6) months following
the Executive’s Separation from Service, or, if earlier, upon the Executive’s death, and (ii) if
the Executive incurs a Separation from Service prior to his Date of Termination, the date of his
Separation from Service shall be deemed to be his Date of Termination (or equivalent term) for
purposes of determining the date of payment or the payment commencement date under this Agreement.
Notwithstanding clause (i) of this subparagraph above, if any amount of employment taxes,
within the meaning of regulations promulgated under Section 409A, are payable prior to the
six-month anniversary of the Executive’s Separation from Service, with respect to any deferred
compensation amount, the Company shall utilize and be deemed to have paid a portion of an such
deferred compensation to the extent necessary for the payment of such employment taxes. If payment
of any portion of the Executive’s restricted stock units is deferred pursuant to the six-month
deferral provision in clause (i) above, then (in lieu of the payment of Interest) such restricted
stock units shall be treated during such six-month period, and adjusted for investment performance
in the same manner, as outstanding restricted stock units.

17

 

     11. Miscellaneous. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without reference to principles of conflict of
laws. If, under any such law, any portion of this Agreement is at any time deemed to be in
conflict with any applicable statute, rule, regulation or ordinance, such portion shall be deemed
to be modified or altered to conform thereto. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement constitutes the entire and
only agreement of the parties with respect to the subject matter hereof and may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.

     (b) All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other parties or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

	 	 	 
	If to the Executive:

	 	At the most recent address
	 

	 	on file at the Company; with a copy to
	 
	 

	 	Mr. George L. Damoose
	 

	 	Procopio, Cory, Hargreaves & Savitch LLP
	 

	 	530 B Street, Suite 2100
	 

	 	San Diego, CA 92101
	 
	 	 
	If to the Company:

	 	CareFusion Corporation
	 

	 	3750 Torrey View Court
	 

	 	San Diego, California 92130
	 

	 	Attention: General Counsel;

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.

     (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement. If any provision of this
Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with the law.

     (d) Notwithstanding any other provision of this Agreement, the Company may withhold from any
amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

     (e) The Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive or the Company may
have hereunder, including, without limitation, the right of the Executive to terminate employment
for Good Reason pursuant to Section 4(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this Agreement, except as
specifically provided in a written consent pursuant to Section 4(c).

18

 

     (f) Except as otherwise expressly provided herein, from and after the Effective Time, this
Agreement shall supersede any other employment, severance or change of control agreement between
the parties and between the Executive with respect to the subject matter hereof. Any provision of
this Agreement that by its terms continues after the expiration of the Employment Period or the
termination of the Executive’s employment shall survive in accordance with its terms.

     (g) The Executive hereby warrants that the Executive is free to enter into this Agreement and
to perform the services described herein. The Company hereby warrants that this Agreement and the
equity awards provided hereunder have been duly authorized.

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board of Directors, the Company has caused this Agreement to be executed in
its name on its behalf, all as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	David L. Schlotterbeck	 	 
	 	 	Date:	 	 
	 
	 	 	 	 	 	 
	 	 	CAREFUSION CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:

Date:
	 	Chair, Human Resources and Compensation
Committee	 	 

19

 

EXHIBIT A – RETENTION AWARD AGREEMENT

1

 

EXHIBIT B – RETENTION AWARD AGREEMENT

1

 

EXHIBIT C – INDEMNIFICATION AGREEMENT

1

 

EXHIBIT D – RELEASE AGREEMENT

RELEASE AGREEMENT

     This RELEASE AGREEMENT by and between CareFusion Corporation (the “Company”) and David L.
Schlotterbeck (the “Executive”) is dated as of the                      day of                     ,                      (the
“Release”).

Release

     Executive hereby releases the Company and any of its predecessors, successors or assigns to
all or any part of its businesses (“CareFusion”) by execution of this Release from any and all
claims and causes of action that may exist, whether known or unknown, as of the date of Executive’s
execution of this Release with the exception of any unemployment compensation claim Executive may
have and any other claims that cannot be waived by law. Executive agrees that this Release applies
to all officers, directors, employees and other representatives of CareFusion and its affiliates
and any of its predecessors, successors or assigns to all or any part of its businesses including
the Company, both individually and in their respective capacities (collectively with CareFusion,
“the Releasees”). This Release relates to all causes of action to the extent permitted by law,
including, but not limited to, claims under CareFusion’s policies or practices; federal and state
fair employment practices or discrimination laws; laws pertaining to breach of employment contract
or wrongful termination; age discrimination claims under the Age Discrimination and Employment Act,
29 U.S.C. Section 621 et seq., the Uniformed Services Employment and Reemployment Rights Act, 38
U.S.C. Section 4301 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C.
Section 2101 et seq. and any applicable state laws of similar intent.  

     In addition, Executive agrees that Executive will not initiate, bring, or prosecute any suit,
action or grievance against any of the Releasees for any released claim in any federal, state,
county or municipal court, or any arbitral forum, except as specifically stated below. Executive
further agree that if Executive does so, Executive will be liable for the payment of all damages
and costs, including attorneys’ fees, incurred by any of the Releasees in connection with
Executive’s suit, action, or grievance. Executive also waives any right to any relief sought in
connection with such claims, including any right to damages, attorneys’ fees, costs, and all other
legal or equitable relief.   

     This Release and agreement not to sue does not prohibit Executive from pursuing a lawsuit,
claim, or charge to challenge the validity or enforceability of this Release under the Age
Discrimination in Employment Act (“ADEA”) or the Older Workers Benefit Protection Act (“OWBPA”),
nor does it render Executive liable for damages or costs, including attorneys’ fees, incurred by
the Releasees in connection with a lawsuit, claim, or charge to challenge the validity or
enforceability of this Release under the ADEA or the OWBPA.  This Release and agreement not to sue
also does not prohibit the Executive from filing charges with government agencies or participating
in any investigation resulting from such charges.  However, under this Release, Executive agrees
not to accept any monetary or personal relief or remedy, including but not limited to back pay,
front pay, or reinstatement, that may be awarded to Executive in connection

1

 

with such charges.  In addition, this general release is not intended to bar any claims for
workers’ compensation benefits. 

     This Release does not apply to any claims arising after Executive’s execution of this Release
or any claims relating to rights under the Employment Agreement by and between CareFusion
Corporation, a Delaware corporation, and the Executive, dated as of the ___day of July 2009, as
may be amended from time to time.

Complete Release

     Executive also expressly agrees that Executive has read, understands, and intends to waive any
and all rights or benefits described in Section 1542 of the California Civil Code, which provides
as follows:

 “A general release does not extend to claims which the creditor does not know
or suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

Thus, notwithstanding the provisions of Section 1542, and for the express purpose of implementing a
full and complete release and discharge of CareFusion and any of its predecessors, successors or
assigns to all or any part of its businesses, Executive expressly acknowledge that this Release is
intended to include within its effect, without limitation, all claims Executive does not know or
suspect to exist in Executive’s favor at the time of execution of this Release, and this Release
contemplates the extinguishment of any such claim(s).

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and the Company has
caused this Release to be executed in its name on its behalf, all as of the day and year first
above written.

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	David L. Schlotterbeck	 	 
	 	 	Date:	 	 
	 
	 	 	 	 	 	 
	 	 	CAREFUSION CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:

Date:
	 	Chair, Human Resources and Compensation
Committee	 	 

2

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