10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarter Ended December 31, 2006

Commission File Number 1-11373

Cardinal Health, Inc.

(Exact name of registrant as specified in its charter)

Ohio	31-0958666
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7000 CARDINAL PLACE, DUBLIN, OHIO 43017

(Address of principal executive offices and zip code)

(614) 757-5000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No  x

The number of registrant’s Common Shares outstanding at the close of business on January 31, 2007 was as follows:

Common Shares, without par value: 400,295,010

CARDINAL HEALTH, INC. AND SUBSIDIARIES

Index *

		Page No.
Part I.	Financial Information:
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Earnings for the Three and Six Months Ended December 31, 2006 and 2005 (unaudited)	3
	Condensed Consolidated Balance Sheets at December 31, 2006 and June 30, 2006 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2006 and 2005 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41
Item 4.	Controls and Procedures	41
Part II.	Other Information:
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 4.	Submission of Matters to a Vote of Security Holders	43
Item 6.	Exhibits	45

* Items not listed are inapplicable.

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PART I. FINANCIAL INFORMATION—Item 1: Financial Statements

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(in millions, except per Common Share amounts)

	Three Months Ended December 31,					Six Months Ended December 31,
	2006		2005			2006		2005
Revenue	$	21,784.6	$	19,346.9		$	42,722.1	$	38,199.3
Cost of products sold		20,484.7		18,181.2			40,221.7		35,932.0
Gross margin		1,299.9		1,165.7			2,500.4		2,267.3
Selling, general and administrative expenses		755.6		696.9			1,480.9		1,410.6
Impairment charges and other		12.6		(2.6	)		14.3		(0.6	)
Special items – restructuring charges		10.0		9.3			21.8		16.8
– merger charges		9.1		5.9			11.1		12.8
– other		0.5		(0.9	)		8.9		4.9
Operating earnings		512.1		457.1			963.4		822.8
Interest expense and other		32.4		26.6			70.1		50.3
Earnings before income taxes and discontinued operations		479.7		430.5			893.3		772.5
Provision for income taxes		164.0		144.7			286.0		253.2
Earnings from continuing operations		315.7		285.8			607.3		519.3
Earnings from discontinued operations (net of tax benefit/(expense) of $416.1 and $(1.7), respectively, for the three months ended December 31, 2006 and 2005 and $435.9 and $0.8, respectively, for the six months ended December 31, 2006 and 2005)		423.6		18.2			402.7		13.0
Net earnings	$	739.3	$	304.0		$	1,010.0	$	532.3
Basic earnings per Common Share:
Continuing operations	$	0.78	$	0.67		$	1.50	$	1.22
Discontinued operations		1.06		0.04			1.00		0.03
Net basic earnings per Common Share	$	1.84	$	0.71		$	2.50	$	1.25
Diluted earnings per Common Share:
Continuing operations	$	0.77	$	0.66		$	1.47	$	1.20
Discontinued operations		1.03		0.04			0.98		0.03
Net diluted earnings per Common Share	$	1.80	$	0.70		$	2.45	$	1.23
Weighted average number of Common Shares outstanding:
Basic		402.2		425.5			403.4		425.9
Diluted		410.6		431.9			412.0		431.7
Cash dividends declared per Common Share	$	0.09	$	0.06		$	0.18	$	0.12

See notes to condensed consolidated financial statements.

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in millions)

	December 31, 2006			June 30, 2006
ASSETS
Current assets:
Cash and equivalents	$	1,003.3		$	1,186.3
Short-term investments available for sale		467.1			498.4
Trade receivables, net		4,394.5			3,808.8
Current portion of net investment in sales-type leases		330.3			290.1
Inventories		7,309.2			7,493.0
Prepaid expenses and other		579.8			582.5
Assets held for sale and discontinued operations		3,093.9			2,743.2
Total current assets		17,178.1			16,602.3
Property and equipment, at cost		3,306.3			3,283.0
Accumulated depreciation and amortization		(1,787.8	)		(1,778.0	)
Property and equipment, net		1,518.5			1,505.0
Other assets:
Net investment in sales-type leases, less current portion		758.9			754.7
Goodwill and other intangibles, net		4,391.3			4,283.4
Other		290.4			259.3
Total assets	$	24,137.2		$	23,404.7
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term obligations and other short-term borrowings	$	48.9		$	199.0
Accounts payable		8,984.7			8,907.8
Other accrued liabilities		2,139.6			1,948.8
Liabilities from businesses held for sale and discontinued operations		529.4			528.0
Total current liabilities		11,702.6			11,583.6
Long-term obligations, less current portion and other short-term borrowings		2,935.8			2,588.6
Deferred income taxes and other liabilities		591.0			741.8
Shareholders’ equity:
Preferred Shares, without par value: Authorized – 0.5 million shares, Issued—none		—			—
Common Shares, without par value: Authorized – 755.0 million shares, Issued – 484.6 million shares and 482.3 million shares, respectively, at December 31, 2006 and June 30, 2006		3,355.2			3,195.5
Retained earnings		10,692.5			9,760.5
Common Shares in treasury, at cost, 82.9 million shares and 71.5 million shares, respectively, at December 31, 2006 and June 30, 2006		(5,230.1	)		(4,499.2	)
Accumulated other comprehensive income		90.2			33.9
Total shareholders’ equity		8,907.8			8,490.7
Total liabilities and shareholders’ equity	$	24,137.2		$	23,404.7

See notes to condensed consolidated financial statements.

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in millions)

	Six Months Ended December 31,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	1,010.0		$	532.3
Earnings from discontinued operations		(402.7	)		(13.0	)
Earnings from continuing operations		607.3			519.3
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities:
Depreciation and amortization		155.4			145.6
Asset impairments		14.4			(2.9	)
Equity compensation		70.4			120.7
Provision for bad debts		7.8			14.9
Change in operating assets and liabilities, net of effects from acquisitions:
Increase in trade receivables		(592.1	)		(160.1	)
Decrease in inventories		184.1			88.9
Increase in net investment in sales-type leases		(44.3	)		(61.9	)
Increase in accounts payable		76.1			581.3
Other accrued liabilities and operating items, net		129.7			(4.3	)
Net cash provided by operating activities – continuing operations		608.8			1,241.5
Net cash provided by operating activities – discontinued operations		30.6			151.2
Net cash provided by operating activities		639.4			1,392.7
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of subsidiaries, net of divestitures and cash acquired		(121.0	)		(72.5	)
Proceeds from sale of property and equipment		13.3			3.5
Additions to property and equipment		(154.0	)		(161.5	)
Sale/(purchase) of investment securities available for sale, net		31.3			(319.2	)
Net cash used in investing activities – continuing operations		(230.4	)		(549.7	)
Net cash used in investing activities – discontinued operations		(7.9	)		(52.4	)
Net cash used in investing activities		(238.3	)		(602.1	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in commercial paper and short-term borrowings		3.7			4.9
Reduction of long-term obligations		(689.2	)		(92.8	)
Proceeds from long-term obligations, net of issuance costs		851.7			500.3
Proceeds from issuance of Common Shares		75.3			68.5
Tax benefits from exercises of stock options		17.1			19.7
Dividends on Common Shares		(73.4	)		(51.2	)
Purchase of treasury shares		(745.3	)		(412.9	)
Net cash (used in)/provided by financing activities – continuing operations		(560.1	)		36.5
Net cash (used in)/provided by financing activities – discontinued operations		(24.0	)		3.3
Net cash (used in)/provided by financing activities		(584.1	)		39.8
NET (DECREASE)/INCREASE IN CASH AND EQUIVALENTS		(183.0	)		830.4
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		1,186.3			1,284.6
CASH AND EQUIVALENTS AT END OF PERIOD	$	1,003.3		$	2,115.0

See notes to condensed consolidated financial statements.

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation. The condensed consolidated financial statements of the Company include the accounts of all majority-owned subsidiaries, and all significant inter-company amounts have been eliminated. (References to the “Company” in these consolidated financial statements shall be deemed to be references to Cardinal Health, Inc. and its majority-owned subsidiaries unless the context otherwise requires.)

As of June 30, 2006, the Company conducted its business within the following four reportable segments: Pharmaceutical Distribution and Provider Services; Medical Products and Services; Pharmaceutical Technologies and Services; and Clinical Technologies and Services. Effective the first quarter of fiscal 2007, the Company began reporting its financial information within the following five reportable segments: Healthcare Supply Chain Services – Pharmaceutical; Healthcare Supply Chain Services – Medical; Clinical Technologies and Services; Pharmaceutical Technologies and Services; and Medical Products Manufacturing. Effective the second quarter of fiscal 2007, as discussed further below, the Company reclassified substantially all of the Pharmaceutical Technologies and Services segment to discontinued operations. As a result, the Company’s financial information is now reported within the following four reportable segments:

Healthcare Supply Chain Services – Pharmaceutical. The Healthcare Supply Chain Services-Pharmaceutical segment encompasses the businesses previously within the Pharmaceutical Distribution and Provider Services segment, in addition to the nuclear pharmacy services, product logistics management and generic-focused businesses previously within the Pharmaceutical Technologies and Services segment and the therapeutic plasma distribution capabilities previously within the Medical Products and Services segment.

Healthcare Supply Chain Services – Medical. The Healthcare Supply Chain Services-Medical segment encompasses the Company’s Medical Products Distribution business, the Source Medical Distribution business in Canada, and the assembly of sterile and non-sterile procedure kits previously within the Medical Products and Services segment.

Clinical Technologies and Services. There were no changes to the Clinical Technologies and Services segment.

Medical Products Manufacturing. The Medical Products Manufacturing segment encompasses the medical and surgical products manufacturing businesses previously within the Medical Products and Services segment.

See Note 7 for additional information regarding the reorganization of the Company’s reportable segments.

Effective the third quarter of fiscal 2006, the Company reclassified a significant portion of its Healthcare Marketing Services business (“HMS disposal group”) and its United Kingdom-based Intercare Pharmaceutical Distribution business (“IPD”) to discontinued operations. In addition, effective the first quarter of fiscal 2006, the Company reclassified its Sterile Pharmaceutical Manufacturing business in Humacao, Puerto Rico (“Humacao”) to discontinued operations. Prior period financial results were reclassified to conform to these changes in presentation. See Note 11 for additional information.

Effective the second quarter of fiscal 2007, the Company reclassified substantially all of its Pharmaceutical Technologies and Services segment to discontinued operations. See Notes 11 and 16 for additional information. During the second quarter of fiscal 2007, the Company changed the classification of certain immaterial implementation costs associated with the sale of medical and supply storage devices in the Clinical Technologies and Services segment from selling, general and administrative expenses to cost of products sold. Prior period financial results were reclassified to conform to these changes in presentation.

The condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (the “SEC”) instructions to Quarterly Reports on Form 10-Q and include all of the information and disclosures required by United States generally accepted accounting principles (“GAAP”) for interim reporting. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In addition, operating results for the fiscal 2007 interim period presented are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2007.

These condensed consolidated financial statements are unaudited and are presented pursuant to the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (this “Form 10-Q”) should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2006 (the “2006 Form 10-K”). Without limiting the generality of the foregoing, Note 1 of the “Notes to Consolidated Financial Statements” from the 2006 Form 10-K is specifically incorporated in this

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Form 10-Q by reference. In the opinion of management, all adjustments necessary for a fair presentation have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature.

Revenue Recognition. In accordance with SEC Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,” the Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed or determinable and collectibility is reasonably assured. Revenue is recognized net of sales returns and allowances.

Healthcare Supply Chain Services - Pharmaceutical

This segment records distribution revenue when title transfers to its customers and the business has no further obligation to provide services related to such merchandise. This revenue is recorded net of sales returns and allowances.

Revenue within this segment includes revenue from bulk customers. Bulk customers have the ability to process large quantities of products in central locations and self distribute these products to their individual retail stores or customers. Most deliveries to bulk customers consist of product shipped in the same form as the product is received from the manufacturer. Revenue from bulk customers is recorded when title transfers to the customer and the Company has no further obligation to provide services related to such merchandise.

Revenue for deliveries to customer warehouses whereby the Company acts as an intermediary in the ordering and delivery of pharmaceutical products is recorded gross in accordance with the Financial Accounting Standards Board Emerging Issues Task Force (“EITF”) Issue No. 99-19, “Reporting Revenue Gross as a Principal versus Net as an Agent.” This revenue is recorded on a gross basis since the Company incurs credit risk from the customer, bears the risk of loss for incomplete shipments and does not receive a separate fee or commission for the transaction.

This segment also owns certain consignment inventory and recognizes revenue when that inventory is sold to a third party by the segment’s customer.

Radiopharmaceutical revenue is recognized upon delivery of the product to the customer. Service-related revenue, including fees received for analytical services or sales and marketing services, is recognized upon the completion of such services.

Through its Medicine Shoppe International, Inc. (“Medicine Shoppe”) and Medicap Pharmacies Incorporated franchise operations, the Company has apothecary-style pharmacy franchises in which it earns franchise and origination fees. Franchise fees represent monthly fees based upon franchisees’ sales and are recognized as revenue when they are earned. Origination fees from signing new franchise agreements are recognized as revenue when the new franchise store is opened.

Healthcare Supply Chain Services - Medical

This segment records distribution revenue when title transfers to its customers and the business has no further obligation to provide services related to such merchandise. This revenue is recorded net of sales returns and allowances.

Clinical Technologies and Services

Revenue is recognized on sales-type leases when the lease becomes noncancellable. The lease is determined to be noncancellable upon completion of the installation, when the equipment is functioning according to material specifications of the user’s manual and the customer has accepted the equipment, as evidenced by signing an equipment confirmation document. Interest income on sales-type leases is recognized in revenue using the interest method.

Consistent with sales-type leases, revenue is recognized on operating leases after installation is complete and customer acceptance has occurred. Operating lease revenue is recognized over the lease term as such amounts become receivable according to the provisions of the lease.

Revenue is recognized on the sale of medication solutions systems, net of an allowance for estimated returns and credits, upon delivery and/or installation (depending on the product) and once transfer of title and risk of loss have occurred.

Pharmacy management and other service revenue is recognized as the services are rendered according to the contracts established. A fee is charged under such contracts through a capitated fee, a dispensing fee, a monthly management fee or an

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actual costs-incurred arrangement. Under certain contracts, fees for services are guaranteed by the Company not to exceed stipulated amounts or have other risk-sharing provisions. Revenue is adjusted to reflect the estimated effects of such contractual guarantees and risk-sharing provisions.

Medical Products Manufacturing

This segment records self-manufactured medical product revenue when title transfers to its customers which occurs upon delivery. This revenue is recorded net of sales returns and allowances.

Multiple Segments or Business Units

Arrangements containing multiple revenue generating activities are accounted for in accordance with EITF Issue No. 00-21, “Revenue Arrangements with Multiple Deliverables.” If the deliverable meets the criteria of a separate unit of accounting, the arrangement revenue is allocated to each element based upon its relative fair value or vendor specific objective evidence and recognized in accordance with the applicable revenue recognition criteria for each element.

Savings Guarantees

Some of the Company’s customer contracts include a guarantee of a certain amount of savings through utilization of the Company’s services. Revenue associated with a guarantee in which the form of consideration is cash or credit memos is not recorded until the guaranteed savings are fully recognized. For guarantees with consideration paid in the form of free products or services, the cost of goods sold related to those sales is increased by the amount of the guarantee.

Recent Financial Accounting Standards. In May 2005, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 154, “Accounting Changes and Error Corrections.” SFAS No. 154 is a replacement of APB Opinion No. 20, “Accounting Changes” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements.” This Statement requires voluntary changes in accounting to be accounted for retrospectively and all prior periods to be restated as if the newly adopted policy had always been used, unless it is impracticable. APB Opinion No. 20 previously required most voluntary changes in accounting to be recognized by including the cumulative effect of the change in accounting in net income in the period of change. This Statement also requires that a change in method of depreciation, amortization or depletion for a long-lived asset be accounted for as a change in estimate that is effected by a change in accounting principle. This Statement is effective for fiscal years beginning after December 15, 2005. This Statement could have an impact on prior year consolidated financial statements if the Company has a change in accounting.

In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments,” an amendment of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” This Statement permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that would otherwise be required to be bifurcated from its host contract. The election to measure a hybrid financial instrument at fair value, in its entirety, is irrevocable and all changes in fair value are to be recognized in earnings. This Statement also clarifies and amends certain provisions of SFAS No. 133 and SFAS No. 140. This Statement is effective for all financial instruments acquired, issued or subject to a remeasurement event occurring in fiscal years beginning after September 15, 2006. Early adoption is permitted, provided the Company has not yet issued financial statements, including financial statements for any interim period, for that fiscal year. The adoption of this Statement is not expected to have a material impact on the Company’s financial position or results of operations.

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.” This Interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. This Interpretation is effective for fiscal years beginning after December 15, 2006. The cumulative effects, if any, of applying this Interpretation will be recorded as an adjustment to retained earnings as of the beginning of the period of adoption. The Company is in the process of determining the impact of adopting this Interpretation.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This Statement defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. This Statement is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company is in the process of determining the impact of adopting this Statement.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R).” This Statement requires an entity to recognize in its statement of financial position an asset for a defined benefit postretirement plan’s overfunded status or a liability for a plan’s underfunded status, measure a defined benefit postretirement plan’s assets and obligations that determine its funded status as of

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the end of the employer’s fiscal year, and recognize changes in the funded status of a defined benefit postretirement plan in comprehensive income in the year in which the changes occur. This Statement requires balance sheet recognition of the funded status for all pension and postretirement benefit plans effective for fiscal years ending after December 15, 2006. This Statement also requires plan assets and benefit obligations to be measured as of a Company’s balance sheet date effective for fiscal years ending after December 15, 2008. The adoption of this Statement is not expected to have a material impact on the Company’s financial position or results of operations.

In September 2006, the SEC issued SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” This Bulletin addresses quantifying the financial statement effects of misstatements, including how the effects of prior year uncorrected errors must be considered in quantifying misstatements in the current year financial statements. This Bulletin is effective for fiscal years ending after November 15, 2006 and allows for a one-time transitional cumulative effect adjustment to beginning retained earnings in the fiscal year adopted for errors that were not previously deemed material, but are material under the guidance in SAB No. 108. The adoption of this Bulletin could have an impact on the assessment of the financial statement effects of future misstatements.

2. EARNINGS PER SHARE AND SHAREHOLDERS’ EQUITY

Basic earnings per Common Share (“Basic EPS”) is computed by dividing net earnings (the numerator) by the weighted average number of Common Shares outstanding during each period (the denominator). Diluted earnings per Common Share (“Diluted EPS”) is similar to the computation for Basic EPS, except that the denominator is increased by the dilutive effect of stock options outstanding and unvested restricted shares and share units, computed using the treasury stock method.

The following table reconciles the number of Common Shares used to compute Basic EPS and Diluted EPS for the three and six months ended December 31, 2006 and 2005:

	For the Three Months Ended		For the Six Months Ended
	December 31,		December 31,
(in millions)	2006	2005	2006	2005
Weighted-average Common Shares – basic	402.2	425.5	403.4	425.9
Effect of dilutive securities:
Employee stock options and unvested restricted shares and share units	8.4	6.4	8.6	5.8
Weighted-average Common Shares – diluted	410.6	431.9	412.0	431.7

The potentially dilutive employee stock options that were antidilutive for the three months ended December 31, 2006 and 2005 were 21.4 million and 28.7 million, respectively, and for the six months ended December 31, 2006 and 2005 were 20.2 million and 27.6 million, respectively.

On July 11, 2006, the Company announced a $500.0 million share repurchase program and on August 3, 2006, the Company announced an additional $1.5 billion share repurchase program. On November 30, 2006, in connection with its announcement regarding divesting the Pharmaceutical Technologies and Services segment, the Company announced an additional $1.0 billion share repurchase program, bringing the Company’s total repurchase authorization to $3.0 billion. As previously announced, the Company expects to use the proceeds from the planned divestiture of the Pharmaceutical Technologies and Services segment to repurchase shares. During the three and six months ended December 31, 2006, the Company repurchased approximately $300.0 million and $745.3 million, respectively, of its Common Shares. See Note 16 for additional information.

3. EQUITY-BASED COMPENSATION

The Company maintains several stock incentive plans (collectively, the “Plans”) for the benefit of certain of its officers, directors and employees. Prior to fiscal 2006, employee options granted under the Plans generally vested in full on the third anniversary of the grant date and were exercisable for periods up to ten years from the date of grant at a price equal to the fair market value of the Common Shares underlying the option at the date of grant. Beginning with fiscal 2006, employee options granted under the Plans (including options granted during fiscal 2007) generally vest in equal annual installments over four years and are exercisable for periods up to seven years from the date of grant at a price equal to the fair market value of the Common Shares underlying the option at the date of grant. During the first quarter of fiscal 2006, the Company adopted SFAS No. 123(R), “Share-Based Payment,” applying the modified prospective method.

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The fair value of restricted shares and restricted share units is determined by the number of shares granted and the market price of the Company’s Common Shares on the date that the restricted shares and restricted share units are granted. The compensation expense recognized for all equity-based awards is net of estimated forfeitures and is recognized over the awards’ service periods. In accordance with SAB No. 107, “Share-Based Payment,” the Company classifies equity-based compensation within selling, general and administrative expenses to correspond with the same line item as the majority of the cash compensation paid to employees.

The following table illustrates the impact of equity-based compensation on reported amounts:

	For the Three Months Ended December 31, 2006					For the Six Months Ended December 31, 2006
(in millions, except per share amounts)	As Reported		Impact of Equity-Based Compensation			As Reported		Impact of Equity-Based Compensation
Operating earnings (1) (2)	$	512.1	$	(33.0	)	$	963.4	$	(70.4	)
Earnings from continuing operations	$	315.7	$	(22.4	)	$	607.3	$	(47.0	)
Earnings from discontinued operations	$	423.6	$	(4.9	)	$	402.7	$	(10.6	)
Net earnings	$	739.3	$	(27.3	)	$	1,010.0	$	(57.6	)
Net basic earnings per Common Share	$	1.84	$	(0.07	)	$	2.50	$	(0.14	)
Net diluted earnings per Common Share	$	1.80	$	(0.07	)	$	2.45	$	(0.14	)

(1) The total equity-based compensation expense for the three and six months ended December 31, 2006 includes gross stock appreciation rights (“SARs”) income of approximately $1.5 million and $1.7 million, respectively. As previously reported, the SARs were granted on August 3, 2005 to the Company’s then Chairman and Chief Executive Officer. Equity-based compensation expense was recognized from the vesting of the SARs upon issuance with an exercise price below the then-current price of the Company’s Common Shares. In quarters subsequent to issuing the SARs, the fair value has been and will continue to be remeasured until they are settled. Any increase in fair value is recorded as equity-based compensation. Any decrease in the fair value of the SARs is only recognized to the extent of the expense previously recorded.

(2) The total equity-based compensation expense for the three and six months ended December 31, 2006 also includes gross restricted share and restricted share unit expense of approximately ($10.7) million and ($19.7) million, respectively, gross employee option expense of approximately ($20.9) million and ($47.6) million, respectively, and gross employee stock purchase plan expense of approximately ($2.9) million and ($4.8) million, respectively.

The following summarizes all stock option transactions for the Company under the Plans from July 1, 2006 through December 31, 2006:

(in millions, except per share amounts)	Options         Outstanding		Weighted Average Exercise Price per Common Share
Balance at June 30, 2006	44.8		$	55.13
Granted	4.7			66.25
Exercised	(1.5	)		42.71
Canceled	(2.6	)		54.91
Balance at December 31, 2006	45.4		$	56.75
Exercisable at December 31, 2006	27.0		$	58.98

The weighted average fair value of stock options granted during the six months ended December 31, 2006 is $21.34.

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4. COMPREHENSIVE INCOME

The following is a summary of the Company’s comprehensive income for the three and six months ended December 31, 2006 and 2005:

	For the Three Months Ended					For the Six Months Ended
	December 31,					December 31,
(in millions)	2006		2005			2006		2005
Net earnings	$	739.3	$	304.0		$	1,010.0	$	532.3
Foreign currency translation adjustment		28.1		(38.3	)		54.8		(56.4	)
Net unrealized gain on derivative instruments		1.5		9.0			0.2		14.4
Net change in minimum pension liability		—		(2.1	)		1.3		(2.1	)
Total comprehensive income	$	768.9	$	272.6		$	1,066.3	$	488.2

5. SPECIAL ITEMS

The following is a summary of the special items for the three and six months ended December 31, 2006 and 2005:

	Three Months Ended December 31,						Six Months Ended December 31,
(in millions, except for Diluted EPS amounts)	2006			2005			2006			2005
Restructuring costs	$	10.0		$	9.3		$	21.8		$	16.8
Merger-related costs		9.1			5.9			11.1			12.8
Litigation settlements, net		—			(13.5	)		7.2			(13.6	)
Other		0.5			12.6			1.7			18.5
Total special items	$	19.6		$	14.3		$	41.8		$	34.5
Tax effect of special items (1)		(7.1	)		(1.6	)		(13.1	)		(9.0	)
Net earnings effect of special items	$	12.5		$	12.7		$	28.7		$	25.5
Net decrease on Diluted EPS	$	0.03		$	0.03		$	0.07		$	0.06

(1) The Company applies varying tax rates to its special items depending upon the tax jurisdiction where the item was incurred. The overall effective tax rate varies each period depending upon the unique nature of the Company’s special items and the tax jurisdictions where the items were incurred.

Restructuring Costs

During fiscal 2005, the Company launched a global restructuring program in connection with its One Cardinal Health initiative with a goal of increasing the value the Company provides its customers through better integration of existing businesses and improved efficiency from a more disciplined approach to procurement and resource allocation. The Company expects the program to be implemented in two phases and be substantially completed by the end of fiscal 2008.

The first phase of the program, announced in December 2004, focuses on business consolidations and process improvements, including rationalizing facilities worldwide, reducing the Company’s global workforce, and rationalizing and discontinuing overlapping and under-performing product lines. The second phase of the program, announced in August 2005, focuses on longer term integration activities that will enhance service to customers through improved integration across the Company’s segments and continue to streamline internal operations.

In addition to the global restructuring program, from time to time the Company incurs costs to implement smaller restructuring efforts for specific operations within its segments. The restructuring plans focus on various aspects of operations, including closing and consolidating certain manufacturing operations, rationalizing headcount, and aligning operations in the most strategic and cost-efficient structure.

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The following table segregates the Company’s restructuring costs into the various reportable segments affected by the restructuring projects. See the paragraphs that follow for additional information regarding the Company’s restructuring plans.

	Three Months Ended December 31,					Six Months Ended December 31,
(in millions)	2006		2005			2006		2005
Healthcare Supply Chain Services - Pharmaceutical
Employee-related costs (1)	$	0.8	$	0.3		$	0.9	$	1.0
Facility exit and other costs (2)		—		0.2			0.1		1.0
Asset impairments		—		0.1			—		0.1
Total Healthcare Supply Chain Services - Pharmaceutical		0.8		0.6			1.0		2.1
Healthcare Supply Chain Services - Medical
Employee-related costs (1)		0.1		—			1.2		—
Facility exit and other costs (2)		0.3		0.4			0.3		0.4
Total Healthcare Supply Chain Services - Medical		0.4		0.4			1.5		0.4
Clinical Technologies and Services
Employee-related costs (1)		0.2		—			0.3		—
Facility exit and other costs (2)		0.6		—			0.8		—
Total Clinical Technologies and Services		0.8		—			1.1		—
Medical Products Manufacturing
Employee-related costs (1)		0.2		(0.8	)		0.4		(0.5	)
Facility exit and other costs (2)		2.7		1.6			2.9		3.3
Asset impairments		—		0.6			—		0.6
Total Medical Products Manufacturing		2.9		1.4			3.3		3.4
Other
Employee-related costs (1)		3.3		2.6			7.6		4.0
Facility exit and other costs (2)		1.7		4.3			7.2		6.9
Asset impairments		0.1		—			0.1		—
Total Other		5.1		6.9			14.9		10.9
Total restructuring program costs	$	10.0	$	9.3		$	21.8	$	16.8

(1) Employee-related costs consist primarily of severance accrued upon either communication of terms to employees or management’s commitment to the restructuring plan when a defined severance plan exists. Outplacement services provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods are also included within this classification.

(2) Facility exit and other costs consist of accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring the Company’s delivery of information technology infrastructure services.

The Company incurred costs of $10.0 million and $21.8 million during the three and six months ended December 31, 2006, respectively, as compared to $9.3 million and $16.8 million during the three and six months ended December 31, 2005, respectively, related to restructuring projects.

The costs incurred within the Healthcare Supply Chain Services - Pharmaceutical segment for the three and six months ended December 31, 2006 of $0.8 million and $1.0 million, respectively, primarily related to the reorganization of business units within the segment to evolve customer offerings and further differentiate the business from competitors. The costs incurred within this segment for the three and six months ended December 31, 2005 of $0.6 million and $2.1 million, respectively, primarily related to the closing of multiple company-owned pharmacies within Medicine Shoppe, the closure of facilities that were acquired as part of Syncor International Corporation (“Syncor”) and the consolidation of distribution sites.

The costs incurred within the Healthcare Supply Chain Services - Medical segment during the three and six months ended December 31, 2006 of $0.4 million and $1.5 million, respectively, primarily related to the reorganization of business units within the segment to evolve customer offerings and further differentiate the business from competitors. The costs incurred within this segment for both the three and six months ended December 31, 2005 of $0.4 million primarily related to the consolidation of distribution sites.

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The costs incurred within the Clinical Technologies and Services segment for the three and six months ended December 31, 2006 of $0.8 million and $1.1 million, respectively, primarily related to the closure of a facility.

The costs incurred within the Medical Products Manufacturing segment of $2.9 million and $3.3 million during the three and six months ended December 31, 2006, respectively, and $1.4 million and $3.4 million during the three and six months ended December 31, 2005, respectively, primarily related to improvements within the manufacturing business through consolidation of production facilities or outsourcing.

The costs incurred related to projects that impacted multiple segments during the three and six months ended December 31, 2006 of $5.1 million and $14.9 million, respectively, primarily related to design and implementation of the Company’s restructuring plans for certain administrative functions, restructuring the Company’s delivery of information technology infrastructure services and restructuring and outsourcing of certain human resources functions. The costs incurred related to projects that impacted multiple segments during the three and six months ended December 31, 2005 of $6.9 million and $10.9 million, respectively, primarily related to design and implementation of the Company’s restructuring plans for certain administrative functions, restructuring the Company’s delivery of information technology infrastructure services and consolidation of existing customer service operations into two locations.

With respect to restructuring programs, the following table summarizes the year in which the project activities are expected to be completed, the expected headcount reductions and the actual headcount reductions as of December 31, 2006:

	Expected Fiscal Year of Completion (1)	Headcount Reduction
		Expected (2)	As of December 31, 2006
Healthcare Supply Chain Services - Pharmaceutical	2007	7	5
Healthcare Supply Chain Services - Medical	2008	137	24
Clinical Technologies and Services	2008	30	—
Medical Products Manufacturing	2008	2,279	2,181
Other	2007	1,162	943
Total restructuring program		3,615	3,153

(1) Expected fiscal year in which the last termination will be completed.

(2) Represents projects that have been initiated as of December 31, 2006. Does not include projects for which all planned terminations are completed.

Merger-Related Costs

Costs of integrating the operations of various merged companies are recorded as merger-related costs when incurred. The merger-related costs recognized during the three and six months ended December 31, 2006 and 2005 were primarily a result of the acquisitions of the wholesale pharmaceutical, health and beauty and related drug store products distribution business of The F. Dohmen Co. and certain of its subsidiaries (“Dohmen”), ALARIS Medical Systems, Inc. (“Alaris”), ParMed Pharmaceutical, Inc. (“ParMed”) and Syncor. The following table and paragraphs provide additional detail regarding the types of merger-related costs incurred by the Company:

	Three Months Ended December 31,				Six Months Ended December 31,
(in millions)	2006		2005		2006		2005
Merger-related costs:
Employee-related costs	$	1.5	$	1.4	$	1.6	$	5.2
Asset impairments and other exit costs		0.2		0.3		1.4		0.3
Integration costs and other		7.4		4.2		8.1		7.3
Total merger-related costs	$	9.1	$	5.9	$	11.1	$	12.8

Employee-Related Costs. During the three and six months ended December 31, 2006, the Company incurred employee-related costs associated with certain merger and acquisition transactions of $1.5 million and $1.6 million, respectively, as compared to $1.4 million and $5.2 million, respectively, during the comparable prior year periods. These costs primarily consist of severance, stay bonuses, non-compete agreements and other forms of compensatory payouts made to employees as a direct result of mergers or acquisitions. The charges for the three and six months ended December 31, 2006 related primarily to the acquisition of Dohmen.

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The charges for the three and six months ended December 31, 2005 related primarily to the Alaris and Syncor acquisitions.

Asset Impairments and Other Exit Costs. During the three and six months ended December 31, 2006, the Company incurred asset impairments and other exit costs of $0.2 million and $1.4 million, respectively, compared to $0.3 million for both the three and six months ended December 31, 2005. The asset impairment and other exit costs during the six months ended December 31, 2006 were primarily a result of facility integration plans for the Alaris acquisition.

Integration Costs and Other. The costs included in this category generally relate to expenses incurred to integrate the merged or acquired company’s operations and systems into the Company’s pre-existing operations and systems. These operations and systems include information systems, employee benefits and compensation, accounting/finance, tax, treasury, internal audit, risk management, compliance, administrative services, sales and marketing and other functions. The charges for the three and six months ended December 31, 2006 of $7.4 million and $8.1 million, respectively, related primarily to the acquisitions of Dohmen, ParMed and Alaris. The charges for the three and six months ended December 31, 2005 of $4.2 million and $7.3 million, respectively, related primarily to the Alaris and Syncor acquisitions.

Litigation Settlements, Net

The following table summarizes the Company’s net litigation settlements during the three and six months ended December 31, 2006 and 2005:

	Three Months Ended December 31,					Six Months Ended December 31,
(in millions)	2006		2005			2006			2005
Litigation settlements, net charges/(income):
DuPont litigation	$	—	$	—		$	11.5		$	—
Pharmaceutical manufacturer antitrust litigation		—		(13.5	)		(7.3	)		(13.6	)
New York Attorney General investigation		—		—			3.0			—
Total litigation settlements, net	$	—	$	(13.5	)	$	7.2		$	(13.6	)

DuPont Litigation. During the six months ended December 31, 2006, the Company recorded charges of $11.5 million related to the settlement of previously-reported litigation with E.I. Du Pont De Nemours and Company. Payment was made during the second quarter of fiscal 2007.

Pharmaceutical Manufacturer Antitrust Litigation. During the six months ended December 31, 2006, the Company recorded income of $7.3 million compared to $13.5 million and $13.6 million recorded for the three and six months ended December 31, 2005, respectively, resulting from settlement of antitrust claims alleging certain prescription drug manufacturers took improper actions to delay or prevent generic drug competition. The total recovery of antitrust claims through December 31, 2006 was $130.4 million (net of attorney fees, payments due to other interested parties and expenses withheld).

New York Attorney General Investigation. The Company recorded an additional reserve of $3.0 million for the six months ended December 31, 2006 with respect to the previously-reported investigation by the New York Attorney General’s Office, which brought the total reserve recorded to $11.0 million. On December 26, 2006, the Company entered into a civil settlement that resolved this investigation. As part of the settlement, payment of $11.0 million was made during the third quarter of fiscal 2007.

For further information regarding these matters, see Note 8 and “Part II, Item I: Legal Proceedings.”

Other

During the three and six months ended December 31, 2006, the Company incurred other costs of $0.5 million and $1.7 million, respectively, compared to $12.6 million and $18.5 million during the three and six months ended December 31, 2005, respectively. These costs relate to legal fees and document preservation and production costs incurred in connection with the SEC investigation and the Audit Committee internal review and related matters. As previously disclosed, the Company continues to engage in settlement discussions with the staff of the SEC and has reached an agreement-in-principle on the basic terms of a potential settlement involving the Company that the SEC staff has indicated it is prepared to recommend to the Commission. The proposed settlement is subject to the completion of definitive documentation as well as acceptance and authorization by the Commission and would, among other things, require the Company to pay a $35.0 million penalty. As a result, the Company recorded reserves totaling $35.0 million in prior periods. There can be no assurance that the Company’s efforts to resolve the SEC’s investigation with respect to the Company will be

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successful or that the amount reserved will be sufficient, and the Company cannot predict the timing or the final terms of any settlement. For further information regarding these matters, see Note 8.

Special Items Accrual Rollforward

The following table summarizes activity related to the liabilities associated with the Company’s special items during the six months ended December 31, 2006:

(in millions)	Six Months Ended December 31, 2006
Balance at June 30, 2006	$	76.9
Additions (1)		49.1
Payments		(49.7	)
Balance at December 31, 2006	$	76.3

(1) Amount represents items that have been expensed as incurred or accrued in accordance with GAAP. These amounts do not include gross litigation settlement income recorded during the six months ended December 31, 2006 of $7.3 million.

Future Spend

Certain merger, acquisition and restructuring costs are based upon estimates. Actual amounts paid may ultimately differ from these estimates. If additional costs are incurred, or if recorded amounts exceed costs, such changes in estimates will be recorded as special items when incurred.

The Company estimates that it will incur additional costs in future periods associated with various mergers, acquisitions and restructuring activities totaling approximately $40.4 million (approximately $27.1 million net of tax). These estimated costs are primarily associated with the second phase of the Company’s previously-announced global restructuring program, the Dohmen acquisition and the Alaris acquisition. The Company believes it will incur these costs to properly restructure, integrate and rationalize operations, a portion of which represents facility rationalizations and implementing efficiencies regarding information systems, customer systems, marketing programs and administrative functions, among other things. Such amounts will be expensed as special items when incurred.

Purchase Accounting Accruals

In connection with restructuring and integration plans related to its acquisition of Dohmen, the Company accrued, as part of its acquisition adjustments, a liability of $7.8 million related to employee termination and relocation costs and $17.4 million related to closing of certain facilities. As of December 31, 2006, the Company had paid $0.9 million of employee-related costs, and no payments had been made in connection with the closing of facilities.

In connection with restructuring and integration plans related to Syncor, the Company accrued, as part of its acquisition adjustments, a liability of $15.1 million related to employee termination and relocation costs and $10.4 million related to closing of duplicate facilities. As of December 31, 2006, the Company had paid $14.1 million of employee-related costs, $8.6 million associated with the facility closures and $1.1 million of other restructuring costs.

6. LONG-TERM OBLIGATIONS AND OTHER SHORT-TERM BORROWINGS

On October 3, 2006, the Company sold $350.0 million aggregate principal amount of 2009 floating rate Notes and $500.0 million aggregate principal amount of 2016 fixed rate Notes in a private offering. The Notes are senior unsecured obligations of the Company and rank equally with all of the Company’s existing and future unsecured senior debt and senior to all of the Company’s existing and future subordinated debt. The Notes are effectively subordinated to the liabilities of the Company’s subsidiaries, including trade payables. The Notes also effectively rank junior in right of payment to any secured debt of the Company to the extent of the value of the assets securing such debt. The Company used the net proceeds from the sale of the Notes to repay $500.0 million of the Company’s preferred debt securities, $127.4 million of the 7.30% Notes due 2006 issued by a subsidiary of the Company and guaranteed by the Company and other short-term obligations of the Company.

On October 26, 2006, the Company amended certain of the facility terms of the Company’s preferred debt securities. As part of this amendment, the Company repaid $500.0 million of the principal balance and a minimum net worth covenant was added whereby the minimum net worth of the Company cannot fall below $5.0 billion at any time. After this repayment, the Company had $150.0 million outstanding under its preferred debt securities.

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See Note 16 for information regarding the amendment of certain terms of the Company’s revolving credit facility.

See Note 4 of “Notes to Consolidated Financial Statements” in the 2006 Form 10-K for more information regarding the long-term obligations and other short-term borrowings.

7. SEGMENT INFORMATION

During the first quarter of fiscal 2007, the Company realigned its operations into the following five reportable segments: Healthcare Supply Chain Services – Pharmaceutical; Healthcare Supply Chain Services – Medical; Clinical Technologies and Services; Pharmaceutical Technologies and Services; and Medical Products Manufacturing. This change in segment reporting resulted from a realignment of the individual businesses to better correlate the operations of the Company with the needs of its customers. The factors for determining the reportable segments included the manner in which management evaluated the performance of the Company combined with the nature of the individual business activities. In accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” all prior period segment information was reclassified to conform to this new financial reporting presentation.

During the second quarter of fiscal 2007, the Company committed to plans to sell substantially all of the Pharmaceutical Technologies and Services segment, thereby meeting the held for sale criteria set forth in SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” As a result, substantially all of the Pharmaceutical Technologies and Services segment has been reclassified to discontinued operations. The Company’s remaining reportable segments are: Healthcare Supply Chain Services – Pharmaceutical; Healthcare Supply Chain Services – Medical; Clinical Technologies and Services; and Medical Products Manufacturing. Prior period results were adjusted to reflect this change. See Notes 11 and 16 for additional information.

During the third quarter of fiscal 2006, the Company committed to plans to sell the HMS disposal group and IPD, thereby meeting the held for sale criteria set forth in SFAS No. 144. In accordance with SFAS No. 144 and EITF Issue No. 03-13, “Applying the Conditions in Paragraph 42 of FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, in Determining Whether to Report Discontinued Operations,” the net assets of these businesses are presented separately as assets held for sale and the operating results of these businesses are presented within discontinued operations. Prior period results were adjusted to reflect this change. See Note 11 for additional information.

During the fourth quarter of fiscal 2005, the Company decided to close Humacao as part of its global restructuring program and committed to sell the assets of the Humacao operations, thereby meeting the held for sale criteria set forth in SFAS No. 144. During the first quarter of fiscal 2006, the Company subsequently decided not to transfer production from Humacao to other Company-owned facilities, thereby meeting the criteria for classification of discontinued operations in accordance with SFAS No. 144 and EITF Issue No. 03-13. In accordance with SFAS No. 144, the results of operations of Humacao are presented as discontinued operations. See Note 11 for additional information.

During the first quarter of fiscal 2006, the Company changed its methodology for allocating corporate costs to the segments to better align corporate spending with the segments that receive the related benefits. During the second quarter of fiscal 2007, the Company began allocating equity-based compensation to the segments. Prior period results were adjusted to reflect these changes.

The Healthcare Supply Chain Services - Pharmaceutical segment provides integrated supply chain and logistics solutions to the pharmaceutical industry, distributing products and providing services to retail, alternate care, mail order and hospital pharmacies. These services include a pharmaceutical repackaging and distribution program for retail, alternate care, mail order and hospital pharmacies. This segment also manufactures and distributes radiopharmaceuticals and generic pharmaceutical products and franchises and operates apothecary-style retail pharmacies. Through this segment, the Company also distributes therapeutic plasma to hospitals, clinics and other providers.

The Healthcare Supply Chain Services – Medical segment provides integrated supply chain and logistics solutions to healthcare customers in the United States and Canada. These solutions include sterile and non-sterile kitting and distribution of medical-surgical products into hospitals, surgery centers, laboratories and physician offices.

The Clinical Technologies and Services segment provides technology products and services to hospitals and other healthcare providers. This segment designs, develops, manufactures, sells and services intravenous medication safety and infusion therapy delivery systems and patient monitoring equipment. It also designs, develops, manufactures, leases, sells and services point-of-use systems that automate the distribution and management of medications and supplies in hospitals and other healthcare facilities. In addition, this segment provides services to the healthcare industry through integrated pharmacy services and the gathering and recording of clinical information for review, analysis and interpretation.

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The Medical Products Manufacturing segment manufactures medical and surgical products for distribution to hospitals, physician offices, surgery centers and other healthcare providers. Such products include surgical instruments, gloves, gowns and drapes, suction and irrigation products and devices used in respiratory therapy and radiology procedures.

The following table includes revenue for each reportable segment and reconciling items necessary to agree to amounts reported in the condensed consolidated financial statements for the three and six months ended December 31, 2006 and 2005:

	For the Three Months Ended December 31,						For the Six Months Ended December 31,
(in millions)	2006			2005			2006			2005
Revenue: (1)
Healthcare Supply Chain Services - Pharmaceutical	$	19,237.6		$	16,977.2		$	37,770.4		$	33,510.0
Healthcare Supply Chain Services - Medical		1,872.5			1,770.3			3,678.5			3,532.8
Clinical Technologies and Services		662.4			602.8			1,256.9			1,179.2
Medical Products Manufacturing		455.0			397.0			878.6			780.3
Total segment revenues		22,227.5			19,747.3			43,584.4			39,002.3
Corporate (2)		(442.9	)		(400.4	)		(862.3	)		(803.0	)
Total consolidated revenue	$	21,784.6		$	19,346.9		$	42,722.1		$	38,199.3

The Company evaluates the performance of the segments based on segment profit. Segment profit is segment revenue less segment cost of products sold, less segment selling, general and administrative expenses. Information about interest income and expense and income taxes is not provided at the segment level. In addition, special items, impairment charges and other and investment spending are not allocated to segments. See Notes 5 and 15 for further discussion of the Company’s special items and impairment charges. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

The following table includes segment profit by reportable segment and reconciling items necessary to agree to consolidated operating earnings in the condensed consolidated financial statements for the three and six months ended December 31, 2006 and 2005:

	For the Three Months Ended December 31,						For the Six Months Ended December 31,
(in millions)	2006			2005			2006			2005
Segment profit: (1)(3)
Healthcare Supply Chain Services - Pharmaceutical(4)	$	328.0		$	276.0		$	616.7		$	501.1
Healthcare Supply Chain Services - Medical		78.3			69.6			139.1			132.5
Clinical Technologies and Services		91.9			79.3			143.3			136.2
Medical Products Manufacturing		50.5			41.8			99.9			77.3
Total segment profit		548.7			466.7			999.0			847.1
Corporate (5)		(36.6	)		(9.6	)		(35.6	)		(24.3	)
Total consolidated operating earnings	$	512.1		$	457.1		$	963.4		$	822.8

The following table includes total assets at December 31, 2006 and June 30, 2006 for each segment as well as reconciling items necessary to agree to the amounts reported in the consolidated financial statements:

	Assets (1)
(in millions)	December 31, 2006		June 30, 2006
Healthcare Supply Chain Services - Pharmaceutical	$	11,663.1	$	11,920.0
Healthcare Supply Chain Services - Medical		2,505.2		2,387.2
Clinical Technologies and Services		3,961.5		3,516.9
Medical Products Manufacturing		1,478.3		1,435.7
Total segment assets		19,608.1		19,259.8
Corporate (6)		4,529.1		4,144.9
Total consolidated assets	$	24,137.2	$	23,404.7

(1) During the second quarter of fiscal 2007, the Company committed to plans to sell substantially all of the Pharmaceutical Technologies and Services segment. As a result, the Company’s four reportable segments are now: Healthcare Supply Chain Services – Pharmaceutical; Healthcare Supply Chain Services – Medical; Clinical Technologies and Services; and Medical Products Manufacturing.

(2) Corporate revenue primarily consists of the elimination of inter-segment revenue.

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(3) A portion of the corporate costs previously allocated to the Pharmaceutical Technologies and Services segment have been reclassified to the remaining four segments. In addition, equity-based compensation was allocated to the segments; see Note 3 in “Notes to Condensed Consolidated Financial Statements” for further information regarding the Company’s consolidated equity-based compensation. Prior period information has been reclassified to conform to this new presentation.

(4) During the first quarter of fiscal 2006, the Company recorded a charge of $31.8 million reflecting credits owed to certain vendors for prior periods.

(5) Corporate operating earnings included special items of $19.6 million and $41.8 million during the three and six months ended December 31, 2006, respectively, and $14.3 million and $34.5 million, respectively, for the comparable prior year periods. See Note 5 for further discussion of the Company’s special items. Corporate operating earnings also include operating asset impairments and gains and losses from the sale of operating and corporate assets, unallocated corporate administrative expenses and investment spending.

(6) The Corporate assets primarily include cash and equivalents, assets held for sale and discontinued operations, net property and equipment and unallocated deferred taxes.

8. COMMITMENTS AND CONTINGENT LIABILITIES

Shareholder/ERISA Litigation against Cardinal Health

Since July 2, 2004, 10 purported class action complaints have been filed by purported purchasers of the Company’s securities against the Company and certain of its current and former officers and directors, asserting claims under the federal securities laws (collectively referred to as the “Cardinal Health federal securities actions”). To date, all of these actions have been filed in the United States District Court for the Southern District of Ohio. These cases include Gerald Burger v. Cardinal Health, Inc., et al. (04 CV 575), Todd Fener v. Cardinal Health, Inc., et al. (04 CV 579), E. Miles Senn v. Cardinal Health, Inc., et al. (04 CV 597), David Kim v. Cardinal Health, Inc. (04 CV 598), Arace Brothers v. Cardinal Health, Inc., et al. (04 CV 604), John Hessian v. Cardinal Health, Inc., et al. (04 CV 635), Constance Matthews Living Trust v. Cardinal Health, Inc., et al. (04 CV 636), Mariss Partners, LLP v. Cardinal Health, Inc., et al. (04 CV 849), The State of New Jersey v. Cardinal Health, Inc., et al. (04 CV 831) and First New York Securities, LLC v. Cardinal Health, Inc., et al. (04 CV 911).

The Cardinal Health federal securities actions purport to be brought on behalf of all purchasers of the Company’s securities during various periods beginning as early as October 24, 2000 and ending as late as July 26, 2004 and allege, among other things, that the defendants violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act by issuing a series of false and/or misleading statements concerning the Company’s financial results, prospects and condition. The alleged misstatements relate to the Company’s accounting for recoveries relating to antitrust litigation against vitamin manufacturers, and to classification of revenue in the Company’s Pharmaceutical Distribution business as either operating revenue or revenue from bulk deliveries to customer warehouses, and other accounting and business model transition issues, including reserve accounting. The alleged misstatements are claimed to have caused an artificial inflation in the Company’s stock price during the proposed class period. The complaints seek unspecified money damages and equitable relief against the defendants and an award of attorney’s fees. On December 15, 2004, the Cardinal Health federal securities actions were consolidated into one action captioned In re Cardinal Health, Inc. Federal Securities Litigation, and on January 26, 2005, the Court appointed the Pension Fund Group as lead plaintiff in this consolidated action. On April 22, 2005, the lead plaintiff filed a consolidated amended complaint naming the Company, certain current and former officers and employees and the Company’s external auditors as defendants. The complaint seeks unspecified money damages and other unspecified relief against the defendants and includes the aforementioned Section 10(b), Rule 10b-5 and Section 20 claims. On March 27, 2006, the Court granted a Motion to Dismiss with respect to the Company’s external auditors and a former officer and denied the Motion to Dismiss with respect to the Company and the other individual defendants. On December 12, 2006, the parties stipulated that the case could proceed as a class action with a class comprised of all persons other than Company officers or directors who purchased or otherwise acquired the Company’s stock during the class period. Discovery is proceeding.

Since July 2, 2004, 15 purported class action complaints (collectively referred to as the “Cardinal Health ERISA actions”) have been filed against the Company and certain officers, directors and employees of the Company by purported participants in the Cardinal Health Profit Sharing, Retirement and Savings Plan (now known as the Cardinal Health 401(k) Savings Plan, or the “401(k) Plan”). To date, all of these actions have been filed in the United States District Court for the Southern District of Ohio. These cases include David McKeehan and James Syracuse v. Cardinal Health, Inc., et al. (04 CV 643), Timothy Ferguson v. Cardinal Health, Inc., et al. (04 CV 668), James DeCarlo v. Cardinal Health, Inc., et al. (04 CV 684), Margaret Johnson v. Cardinal Health, Inc., et al. (04 CV 722), Harry Anderson v. Cardinal Health, Inc., et al. (04 CV 725), Charles Heitholt v. Cardinal Health, Inc., et al. (04 CV 736), Dan Salinas and Andrew Jones v. Cardinal Health, Inc., et al. (04 CV 745), Daniel Kelley v. Cardinal Health, Inc., et al. (04 CV 746), Vincent Palyan v. Cardinal Health, Inc., et al. (04 CV 778), Saul Cohen v. Cardinal Health, Inc., et al. (04 CV 789), Travis

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Black v. Cardinal Health, Inc., et al. (04 CV 790), Wendy Erwin v. Cardinal Health, Inc., et al. (04 CV 803), Susan Alston v. Cardinal Health, Inc., et al. (04 CV 815), Jennifer Brister v. Cardinal Health, Inc., et al. (04 CV 828) and Gint Baukus v. Cardinal Health, Inc., et al. (05 C2 101).

The Cardinal Health ERISA actions purport to be brought on behalf of participants in the 401(k) Plan and the Syncor Employees’ Savings and Stock Ownership Plan (the “Syncor ESSOP,” and together with the 401(k) Plan, the “Benefit Plans”), and also on behalf of the Benefit Plans themselves. The complaints allege that the defendants breached certain fiduciary duties owed under the Employee Retirement Income Security Act (“ERISA”), generally asserting that the defendants failed to make full disclosure of the risks to the Benefit Plans’ participants of investing in the Company’s stock, to the detriment of the Benefit Plans’ participants and beneficiaries, and that Company stock should not have been made available as an investment alternative for the Benefit Plans’ participants. The misstatements alleged in the Cardinal Health ERISA actions significantly overlap with the misstatements alleged in the Cardinal Health federal securities actions. The complaints seek unspecified money damages and equitable relief against the defendants and an award of attorney’s fees. On December 15, 2004, the Cardinal Health ERISA actions were consolidated into one action captioned In re Cardinal Health, Inc. ERISA Litigation. On January 14, 2005, the Court appointed lead counsel and liaison counsel for the consolidated Cardinal Health ERISA action. On April 29, 2005, the lead plaintiff filed a consolidated amended ERISA complaint naming the Company, certain current and former directors, officers and employees, the Company’s Employee Benefits Policy Committee and Putnam Fiduciary Trust Company as defendants. The complaint seeks unspecified money damages and other unspecified relief against the defendants. On March 31, 2006, the Court granted the Motion to Dismiss with respect to Putnam Fiduciary Trust Company and with respect to plaintiffs’ claim for equitable relief. The Court denied the remainder of the Motion to Dismiss filed by the Company and certain defendants. On September 8, 2006, the plaintiffs filed a Motion for Class Certification. Discovery is proceeding.

The Company is currently unable to predict or determine the outcome or resolution of the proceedings described under the heading “Shareholder/ERISA Litigation Against Cardinal Health,” or to estimate the amounts of, or potential range of, loss with respect to these proceedings. The range of possible resolutions of these proceedings could include judgments against the Company or settlements that could require substantial payments by the Company. These payments could have a material adverse effect on the Company’s results of operations, financial condition, liquidity and cash flows.

Derivative Actions

On November 8, 2002, a complaint was filed by a purported shareholder against the Company and its directors in the Court of Common Pleas, Delaware County, Ohio, as a purported derivative action. Doris Staehr v. Robert D. Walter, et al., No. 02-CVG-11-639. On or about March 21, 2003, after the defendants filed a Motion to Dismiss the complaint, an amended complaint was filed alleging breach of fiduciary duties and corporate waste in connection with the alleged failure by the Board of Directors of the Company to renegotiate or terminate the Company’s proposed acquisition of Syncor, and to determine the propriety of indemnifying Monty Fu, the former Chairman of Syncor. The defendants filed a Motion to Dismiss the amended complaint, and the plaintiffs subsequently filed a second amended complaint that added three new individual defendants and included new allegations that, among other things, the defendants improperly recognized revenue in December 2000 and September 2001 related to settlements with certain vitamin manufacturers. The defendants filed a Motion to Dismiss the second amended complaint, and on November 20, 2003, the Court denied the motion. On May 31, 2006, the plaintiffs filed a third amended complaint, which now mirrors most of the substantive allegations of the consolidated amended complaint filed in the Cardinal Health federal securities actions (see “Shareholder/ERISA Litigation against Cardinal Health” above). Discovery is proceeding. The defendants intend to vigorously defend this action. It is not currently possible to estimate the amount of loss or range of possible loss that might result from an adverse judgment or a settlement of this proceeding.

Since July 1, 2004, three complaints have been filed by purported shareholders against the members of the Company’s Board of Directors, certain of the Company’s current and former officers and employees and the Company as a nominal defendant in the Court of Common Pleas, Franklin County, Ohio, as purported derivative actions (collectively referred to as the “Cardinal Health Franklin County derivative actions”). These cases include Donald Bosley, Derivatively on behalf of Cardinal Health, Inc. v. David Bing, et al., Sam Wietschner, Derivatively on behalf of Cardinal Health, Inc. v. Robert D. Walter, et al. and Green Meadow Partners, LLP, Derivatively on behalf of Cardinal Health, Inc. v. David Bing, et al. The Cardinal Health Franklin County derivative actions allege that the individual defendants failed to implement adequate internal controls for the Company and thereby violated their fiduciary duty of good faith, GAAP and the Company’s Audit Committee charter. The complaints in the Cardinal Health Franklin County derivative actions seek money damages and equitable relief against the defendant directors and an award of attorney’s fees. On November 22, 2004, the Cardinal Health Franklin County derivative actions were transferred to be heard by the same judge. On June 20, 2006, the plaintiffs filed a consolidated amended complaint that raises many of the same substantive allegations as the consolidated amended complaint filed in the Cardinal Health federal securities actions (see “Shareholder/ERISA Litigation against

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Cardinal Health” above) and the Weed complaint (see below). On August 22, 2006, the Court granted the parties’ joint Motion to Stay the actions pending the Court’s resolution of the plaintiffs’ Motion to Consolidate the Cardinal Health Franklin County derivative actions with the Staehr derivative action pending in Delaware County, which is discussed above. None of the defendants has responded to the complaint. It is not currently possible to estimate the amount of loss or range of possible loss that might result from an adverse judgment or a settlement of these proceedings.

On September 27, 2006, a derivative complaint was filed by a purported shareholder against certain members of the Human Resources and Compensation Committee of the Company’s Board of Directors, certain of the Company’s current and former officers and the Company as a nominal defendant in the Court of Common Pleas, Franklin County, Ohio, as a purported derivative action. Barry E. Weed v. John F. Havens, et al., No. 06CVH09 12620. The complaint alleges that the individual defendants breached their fiduciary duties with respect to the timing of the Company’s option grants in August 2004 and that the officer defendants were unjustly enriched with respect to such grants. The complaint seeks money damages, disgorgement of options, equitable relief and costs and disbursements of the action, including attorney’s fees. On January 8, 2007, the defendants moved to dismiss the complaint. It is not currently possible to estimate the amount of loss or range of possible loss that might result from an adverse judgment or a settlement of this proceeding.

Insurance Coverage for Shareholder/ERISA Litigation against Cardinal Health and Derivative Actions

With respect to the proceedings described above under the headings “Shareholder/ERISA Litigation Against Cardinal Health,” and “Derivative Actions,” the Company currently believes that there will be some insurance coverage available under the Company’s insurance policies. Such policies are with financially viable insurance companies, and are subject to self-insurance retentions, exclusions, conditions, any potential coverage defenses or gaps, policy limits and insurer solvency. On October 12, 2006, a complaint was filed by the Federal Insurance Company (“Federal”) against the Company and certain of its current and former members of the board of directors, officers and/or employees in the Court of Common Pleas, Franklin County, Ohio. Federal Insurance Company v. Cardinal Health, Inc., et al., No. 06CVH10 13447. Among other things, the complaint seeks a determination from the Court of Federal’s rights and obligations, if any, under successive directors’ and officers’ liability insurance policies issued by Federal with respect to the Cardinal Health federal securities actions and various state-court shareholder derivative lawsuits. The complaint also seeks a declaration that no coverage exists with respect to the Cardinal Health ERISA actions under successive fiduciary liability insurance policies issued by Federal. On January 26, 2007, the Company and the individual defendants filed their respective answers and counterclaims and sought to add additional insurers as counterclaim defendants.

Shareholder/ERISA Litigation against Syncor

Eleven purported class action lawsuits have been filed against Syncor and certain of its officers and directors, asserting claims under the federal securities laws (collectively referred to as the “Syncor federal securities actions”). All of these actions were filed in the United States District Court for the Central District of California. These cases include Richard Bowe v. Syncor Int’l Corp., et al., No. CV 02-8560 LGB (RCx) (C.D. Cal.), Alan Kaplan v. Syncor Int’l Corp., et al., No. CV 02-8575 CBM (MANx) (C.D. Cal), Franklin Embon, Jr. v. Syncor Int’l Corp., et al., No. CV 02-8687 DDP (AJWx) (C.D. Cal), Jonathan Alk v. Syncor Int’l Corp., et al., No. CV 02-8841 GHK (RZx) (C.D. Cal), Joyce Oldham v. Syncor Int’l Corp., et al., CV 02-8972 FMC (RCx) (C.D. Cal), West Virginia Laborers Pension Trust Fund v. Syncor Int’l Corp., et al., No. CV 02-9076 NM (RNBx) (C.D. Cal), Brad Lookingbill v. Syncor Int’l Corp., et al., CV 02-9248 RSWL (Ex) (C.D. Cal), Them Luu v. Syncor Int’l Corp., et al., CV 02-9583 RGK (JwJx) (C.D. Cal), David Hall v. Syncor Int’l Corp., et al., CV 02-9621 CAS (CWx) (C.D. Cal), Phyllis Walzer v. Syncor Int’l Corp., et al., CV 02-9640 RMT (AJWx) (C.D. Cal), and Larry Hahn v. Syncor Int’l Corp., et al., CV 03-52 LGB (RCx) (C.D. Cal.). The Syncor federal securities actions purport to be brought on behalf of all purchasers of Syncor shares during various periods, beginning as early as March 30, 2000 and ending as late as November 5, 2002. The actions allege, among other things, that the defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act by issuing a series of press releases and public filings disclosing significant sales growth in Syncor’s international business, but omitting mention of certain allegedly improper payments to Syncor’s foreign customers, thereby artificially inflating the price of Syncor shares. The lead plaintiff filed a third amended consolidated complaint on December 29, 2004. Syncor filed a Motion to Dismiss the third amended consolidated complaint on January 31, 2005. On April 15, 2005, the Court granted the Motion to Dismiss with prejudice. The lead plaintiff has appealed this decision.

A purported class action complaint, captioned Pilkington v. Cardinal Health, et al., was filed on April 8, 2003 against the Company, Syncor and certain officers and employees of the Company by a purported participant in the Syncor ESSOP. A related purported class action complaint, captioned Donna Brown, et al. v. Syncor International Corp, et al., was filed on September 11, 2003 against the Company, Syncor and certain individual defendants. Another related purported class action complaint, captioned Thompson v. Syncor International Corp., et al., was filed on January 14, 2004 against the Company, Syncor and certain individual defendants. Each of these actions was brought in the United States District Court for the Central District of California. A consolidated

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complaint was filed on February 24, 2004 against Syncor and certain former Syncor officers, directors and/or employees alleging that the defendants breached certain fiduciary duties owed under ERISA based on the same underlying allegations of improper and unlawful conduct alleged in the federal securities litigation. The consolidated complaint seeks unspecified money damages and other unspecified relief against the defendants. On April 26, 2004, the defendants filed Motions to Dismiss the consolidated complaint. On August 24, 2004, the Court granted in part and denied in part defendants’ Motions to Dismiss. The Court dismissed, without prejudice, all claims against two individual defendants, all claims alleging co-fiduciary liability against all defendants, and all claims alleging that the individual defendants had conflicts of interest precluding them from properly exercising their fiduciary duties under ERISA. A claim for breach of the duty to prudently manage plan assets was upheld against Syncor, and a claim for breach of the alleged duty to “monitor” the performance of Syncor’s Plan Administrative Committee was upheld against defendants Monty Fu and Robert Funari. On January 10, 2006, the Court entered summary judgment in favor of all defendants on all remaining claims. Consistent with that ruling, on January 11, 2006, the Court entered a final order dismissing this case. The lead plaintiff has appealed this decision.

It is not currently possible to estimate the amount of loss or range of possible loss that might result from an adverse judgment or a settlement of the proceedings described under the heading “Shareholder/ERISA Litigation Against Syncor.” However, the Company currently does not believe that the impact of these proceedings will have a material adverse effect on the Company’s results of operations or financial condition. The Company currently believes that there will be some insurance coverage available under the Company’s and Syncor’s insurance policies. Such policies are with financially viable insurance companies, and are subject to self-insurance retentions, exclusions, conditions, any potential coverage defenses or gaps, policy limits and insurer solvency.

ICU Litigation

Prior to the completion of the Company’s acquisition of Alaris, on June 16, 2004, ICU Medical, Inc. (“ICU”) filed a patent infringement lawsuit against Alaris in the United States District Court for the Southern District of California. In the lawsuit, ICU claims that the Alaris SmartSite^® family of needle-free valves and systems infringes upon ICU patents. ICU seeks monetary damages plus permanent injunctive relief to prevent Alaris from selling SmartSite products. On July 30, 2004, the Court denied ICU’s application for a preliminary injunction finding, among other things, that ICU had failed to show a substantial likelihood of success on the merits. During July and August 2006, the Court granted summary judgment to Alaris on three of the four patents asserted by ICU and issued an order interpreting certain claims in certain patents in a manner that could impair ICU’s ability to enforce those patents against Alaris. On January 22, 2007, the Court granted summary judgment in favor of Alaris on all of ICU’s remaining claims and declared certain of their patent claims invalid. This decision is subject to appeal. The Company intends to continue to vigorously defend this action. It is currently not possible to estimate the amount of loss or range of possible loss that might result from an adverse judgment or settlement of this proceeding. However, the Company currently does not believe that this proceeding will have a material adverse effect on the Company’s results of operations or financial condition.

SEC Investigation and U.S. Attorney Inquiry

On October 7, 2003, the Company received a request from the SEC, in connection with an informal inquiry, for historical financial and related information. The SEC’s request sought a variety of documentation, including the Company’s accounting records for fiscal 2001 through fiscal 2003, as well as notes, memoranda, presentations, e-mail and other correspondence, budgets, forecasts and estimates.

On May 6, 2004, the Company was notified that the pending SEC informal inquiry had been converted into a formal investigation. On June 21, 2004, as part of the SEC’s formal investigation, the Company received an SEC subpoena that included a request for the production of documents relating to revenue classification, and the methods used for such classification, in the Company’s Pharmaceutical Distribution business as either “Operating Revenue” or “Bulk Deliveries to Customer Warehouses and Other.” In addition, the Company learned that the U.S. Attorney’s Office for the Southern District of New York had also commenced an inquiry that the Company understands relates to this same subject. On October 12, 2004, the Company received a subpoena from the SEC requesting the production of documents relating to compensation information for specific current and former employees and officers of the Company. The Company was notified in April 2005 that certain current and former employees and directors received subpoenas from the SEC requesting the production of documents. The subject matter of these requests is consistent with the subject matter of the subpoenas that the Company had previously received from the SEC.

In connection with the SEC’s informal inquiry, the Company’s Audit Committee commenced its own internal review in April 2004, assisted by independent counsel. This internal review was prompted by documents contained in the production to the SEC that raised issues as to certain accounting and financial reporting matters, including, but not limited to, the establishment and adjustment

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of certain reserves and their impact on the Company’s quarterly earnings. The Audit Committee and its independent counsel also have reviewed the revenue classification issue that is the subject of the SEC’s June 21, 2004 subpoena and other matters identified in the course of the Audit Committee’s internal review. During September and October 2004, the Audit Committee reached certain conclusions with respect to findings from its internal review. In connection with the Audit Committee’s conclusions reached in September and October 2004, the Company made certain reclassification and restatement adjustments to its fiscal 2004 and prior historical consolidated financial statements. The Audit Committee’s conclusions were disclosed, and the reclassification and restatement adjustments were reflected, in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2004 (the “2004 Form 10-K”) and subsequent public reports filed by the Company.

Following the conclusions reached by the Audit Committee in September and October 2004, the Audit Committee began the task of assigning responsibility for the financial statement matters described above which were reflected in the 2004 Form 10-K, and, in January 2005, took disciplinary actions with respect to the Company’s employees who it determined bore responsibility for these matters, other than with respect to the accounting treatment of certain recoveries from vitamin manufacturers for which there was a separate Board committee internal review that has been completed (discussed below). The disciplinary actions ranged from terminations or resignations of employment to required repayments of some or all of fiscal 2003 bonuses from certain employees to letters of reprimand. These disciplinary actions affected senior financial and managerial personnel, as well as other personnel, at the corporate level and in the then four business segments. The Audit Committee has completed its determinations of responsibility for the financial statement matters described above which were reflected in the 2004 Form 10-K, although responsibility for matters relating to the Company’s accounting treatment of certain recoveries from vitamin manufacturers was addressed by a separate committee of the Board as discussed below. The Audit Committee internal review is substantially complete.

In connection with the SEC’s formal investigation, a committee of the Board of Directors, with the assistance of independent counsel, separately initiated an internal review to assign responsibility for matters relating to the Company’s accounting treatment of certain recoveries from vitamin manufacturers. In the 2004 Form 10-K, as part of the Audit Committee’s internal review, the Company reversed its previous recognition of estimated recoveries from vitamin manufacturers for amounts overcharged in prior years and recognized the income from such recoveries as a special item in the period in which cash was received from the manufacturers. The SEC staff had previously advised the Company that, in its view, the Company did not have an appropriate basis for recognizing the income in advance of receiving the cash. In August 2005, the separate Board committee reached certain conclusions with respect to findings from its internal review and determined that no additional disciplinary actions were required beyond the disciplinary actions already taken by the Audit Committee, as described above. The separate Board committee internal review is complete.

The Company continues to engage in settlement discussions with the staff of the SEC and has reached an agreement-in-principle on the basic terms of a potential settlement involving the Company that the SEC staff has indicated it is prepared to recommend to the Commission. The proposed settlement is subject to the completion of definitive documentation as well as acceptance and authorization by the Commission and would, among other things, require the Company to pay a $35.0 million penalty. As a result, the Company recorded reserves totaling $35.0 million in prior periods. There can be no assurance that the Company’s efforts to resolve the SEC’s investigation with respect to the Company will be successful, or that the amount reserved will be sufficient, and the Company cannot predict the timing or the final terms of any settlement.

The SEC investigation and the U.S. Attorney inquiry remain ongoing. Although the Company is continuing in its efforts to respond to these inquiries and provide all information required, the Company cannot predict the outcome of the SEC investigation or the U.S. Attorney inquiry. The outcome of the SEC investigation, the U.S. Attorney inquiry and any related legal and administrative proceedings could include the institution of administrative, civil injunctive or criminal proceedings involving the Company and/or current or former Company employees, officers and/or directors, as well as the imposition of fines and other penalties, remedies and sanctions.

In January 2007, the Company learned that its Executive Chairman of the Board received a “Wells” notice from the SEC staff relating to the formal investigation. Under SEC procedures, a Wells notice indicates that the SEC staff has made a preliminary decision to recommend that the SEC commence a civil or administrative action against the recipient of the notice. The recipient of a Wells notice has the opportunity to respond to the staff before the staff makes its formal recommendation on whether any civil action should be brought by the SEC.

There can be no assurance that additional restatements will not be required, that the historical consolidated financial statements included in the Company’s previously-filed public reports or this report will not change or require amendment, or that additional disciplinary actions will not be required in such circumstances. As the SEC investigation and the U.S. Attorney inquiry continue, new issues may be identified, or the Audit Committee may make additional findings if it receives additional information, that may have an

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impact on the Company’s consolidated financial statements and the scope of the restatements described in the Company’s previously-filed public reports or this report.

New York Attorney General Investigation

On December 26, 2006, the Company entered into a civil settlement that resolves the previously disclosed investigation by the New York Attorney General’s Office (“NYAG”) focusing on trading in the secondary market for pharmaceuticals. In the settlement, the Company does not admit or deny the NYAG’s findings. Under the terms of the settlement, the Company paid $3.0 million to the State of New York, $1.0 million to the NYAG to cover investigation costs and $7.0 million to a not-for-profit entity affiliated with the New York State Department of Health and the Roswell Park Cancer Institute that assists those entities through financial support and technology transfers. The Company previously recorded reserves with respect to this matter for the $11.0 million settlement.

The Company has voluntarily undertaken and implemented a number of business reforms governing its conduct with respect to the matters examined as part of the investigation. The Company also will adopt and implement additional business reforms as required by the settlement within its pharmaceutical distribution business. There can be no assurance that the settlement will not adversely affect existing litigation or cause additional legal or regulatory proceedings or result in adverse publicity and other adverse impacts to the Company’s business.

Alaris SE Pump Recall

On August 15, 2006, the Company initiated a voluntary field corrective action of its Alaris^® SE pump as a result of information indicating that the product had a risk of “key bounce” associated with keypad entries that could lead to over-infusion of patients. On August 23, 2006, the United States filed a complaint in the U.S. District Court for the Southern District of California to effect the seizure of Alaris SE pumps and the Company suspended production, sales, repairs and installation of the pumps after approximately 1,300 units were seized by the U.S. Food and Drug Administration (the “FDA”).

On February 7, 2007, a Consent Decree for Condemnation and Permanent Injunction (the “Consent Decree”) was filed in the District Court to resolve the seizure litigation. The Consent Decree outlines the steps the Company must take to resume manufacturing and selling Alaris SE pumps in the United States. The steps include submitting a plan to the FDA outlining corrections for the Alaris SE pumps currently in use by customers, submitting a remediation plan for the seized Alaris SE pumps, and engaging an independent expert to inspect Alaris SE pump facilities and certify the Company’s infusion pump operations. The corrective action and remediation plans must be approved by the FDA prior to implementation by the Company.

There have been approximately 140,000 Alaris SE pumps distributed worldwide during the past 12 years and the product line currently represents less than 1% of annual revenue for the Clinical Technologies and Services segment. The Company recorded a $13.5 million charge for the quarter ended September 30, 2006 related to this matter. The Company has begun taking the steps necessary to comply with the terms of the Consent Decree and does not believe that compliance with the Consent Decree will materially affect its results of operations or financial condition. However, there can be no assurance that additional costs or penalties will not be incurred, the effect of which could be material to the Company’s results of operations.

Other Matters

In addition to the matters described above, the Company also becomes involved from time-to-time in other litigation and regulatory matters incidental to its business, including, without limitation, inclusion of certain of its subsidiaries as a potentially responsible party for environmental clean-up costs as well as litigation in connection with acquisitions. The Company intends to vigorously defend itself against such other litigation and does not currently believe that the outcome of any such other litigation will have a material adverse effect on the Company’s consolidated financial statements.

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9. GOODWILL AND OTHER INTANGIBLE ASSETS

The Company accounts for purchased goodwill and other intangible assets in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets.” Due to the reorganization of the Company’s reporting structure as discussed in Note 7, goodwill has been reassigned to the segments in accordance with SFAS 142.

Changes in the carrying amount of goodwill for the six months ended December 31, 2006 were as follows:

(in millions)	Healthcare Supply Chain Services - Pharmaceutical			Healthcare Supply Chain Services – Medical			Clinical Technologies and Services		Medical Products Manufacturing			Total
Balance at June 30, 2006	$	1,248.6		$	373.5		$	1,710.7	$	424.1		$	3,756.9
Goodwill acquired - net of purchase price adjustments, foreign currency translation adjustments and other (1)(2)(3)		(17.3	)		(1.4	)		120.2		(13.6	)		87.9
Transfer (4)		—			2.7			—		(2.7	)		—
Balance at December 31, 2006	$	1,231.3		$	374.8		$	1,830.9	$	407.8		$	3,844.8

(1) The decrease within the Healthcare Supply Chain Services – Pharmaceuticals segment primarily relates to Dohmen purchase accounting adjustments.

(2) The increase within the Clinical Technologies and Services segment primarily relates to the acquisition of MedMined, Inc. (“MedMined”) and Care Fusion, Inc. (“Care Fusion”), which resulted in a preliminary goodwill allocation of $57.3 million and $57.3 million, respectively.

(3) The decrease within the Medical Products Manufacturing segment primarily relates to Denver Biomedical Inc. (“Denver Biomedical”) purchase accounting adjustments of $17.1 million.

(4) At the end of fiscal 2006, the Company divided the businesses previously reported within the Medical Products and Services segment into the Healthcare Supply Chain Services-Medical and Medical Products Manufacturing segments to better align business operations. The transfer is an adjustment to the goodwill initially allocated between these new segments.

The allocation of the purchase price related to certain immaterial acquisitions are not yet finalized and are subject to adjustment as the Company assesses the value of pre-acquisition contingencies and certain other matters. The Company expects any future adjustments to the allocation of the purchase price to be recorded to goodwill.

Intangible assets with definite lives are being amortized using the straight-line method over periods that range from three to forty years. The detail of other intangible assets by class as of June 30 and December 31, 2006 was as follows:

(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
June 30, 2006
Unamortized intangibles:
Trademarks and patents	$	185.4	$	0.4	$	185.0
Total unamortized intangibles	$	185.4	$	0.4	$	185.0
Amortized intangibles:
Trademarks and patents	$	163.7	$	40.0	$	123.7
Non-compete agreements		4.5		2.8		1.7
Customer relationships		221.7		57.7		164.0
Other		91.3		39.2		52.1
Total amortized intangibles	$	481.2	$	139.7	$	341.5
Total intangibles	$	666.6	$	140.1	$	526.5

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(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
December 31, 2006
Unamortized intangibles:
Trademarks and patents	$	186.1	$	0.4	$	185.7
Total unamortized intangibles	$	186.1	$	0.4	$	185.7
Amortized intangibles:
Trademarks and patents	$	170.1	$	48.3	$	121.8
Non-compete agreements		6.6		4.2		2.4
Customer relationships		247.8		74.7		173.1
Other		118.6		55.1		63.5
Total amortized intangibles	$	543.1	$	182.3	$	360.8
Total intangibles	$	729.2	$	182.7	$	546.5

There were no significant acquisitions of other intangible assets for the periods presented. Amortization expense for the three and six months ended December 31, 2006 was $15.6 million and $29.9 million, respectively, and $12.9 million and $26.3 million, respectively, during the comparable prior year periods.

Amortization expense for each of the next five fiscal years is estimated to be:

(in millions)	2007		2008		2009		2010		2011
Amortization expense	$	58.7	$	53.5	$	50.6	$	47.6	$	46.8

10. GUARANTEES

The Company has contingent commitments related to a certain operating lease agreement. This operating lease consists of certain real estate used in the operations of the Company. In the event of termination of this operating lease, which is ten years in duration, the Company guarantees reimbursement for a portion of any unrecovered property cost. At December 31, 2006, the maximum amount the Company could be required to reimburse was $126.5 million. In accordance with FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others—an interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34,” the Company has a liability of $3.1 million recorded as of December 31, 2006 related to this agreement.

In the ordinary course of business, the Company from time to time agrees to indemnify certain other parties under agreements with the Company, including under acquisition and disposition agreements, customer agreements and intellectual property licensing agreements. Such indemnification obligations vary in scope and, when defined, in duration. In many cases, a maximum obligation is not explicitly stated and therefore the overall maximum amount of the liability under such indemnification obligations cannot be reasonably estimated. Where appropriate, such indemnification obligations are recorded as a liability. Historically, the Company has not, individually or in the aggregate, made payments under these indemnification obligations in any material amounts. In certain circumstances, the Company believes its existing insurance arrangements, subject to the general deduction and exclusion provisions, would cover portions of the liability that may arise from these indemnification obligations. In addition, the Company believes the likelihood of material liability being triggered under these indemnification obligations is not significant.

In the ordinary course of business, the Company from time to time enters into agreements that obligate the Company to make fixed payments upon the occurrence of certain events. Such obligations primarily relate to obligations arising under acquisition transactions, where the Company has agreed to make payments based upon the achievement of certain financial performance measures by the acquired business. Generally, the obligation is capped at an explicit amount. The Company’s aggregate exposure for these obligations, assuming the achievement of all financial performance measures, is not material. Any potential payment for these obligations would be treated as an adjustment to the purchase price of the related entity and would have no impact on the Company’s results of operations.

In the ordinary course of business, the Healthcare Supply Chain Services – Pharmaceutical segment of the Company from time to time extends loans to its customers which are subsequently sold to a bank. The bank services and administers these loans as well as any new loans the Company may direct. In order for the bank to purchase such loans, it requires the absolute and unconditional obligation of the Company to repurchase such loans upon the occurrence of certain events described in the agreement including, but not limited to, borrower payment default that exceeds 90 days, insolvency and bankruptcy. In the event of default, in addition to repurchasing the loans, the Company must repay any premium that was received in advance of the bank’s collection of the loan. At December 31 and June 30, 2006, notes in the program subject to the guaranty of the Company totaled $34.6 million and $35.1

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million, respectively. At December 31 and June 30, 2006, accruals for premiums received in advance of the bank’s collection of notes were $0.7 million and $0.6 million, respectively.

11. DISCONTINUED OPERATIONS

Pharmaceutical Technologies and Services Segment

During the second quarter of fiscal 2007, the Company committed to plans to sell substantially all of the Pharmaceutical Technologies and Services segment (“PTS”), thereby meeting the held for sale criteria set forth in SFAS No. 144. In accordance with SFAS No. 144 and EITF Issue No. 03-13, the net assets of this business are presented separately as assets held for sale and the operating results of this business are presented within discontinued operations. In accordance with SFAS No. 144, the Company confirmed the carrying value of the net assets of PTS were not lower than the net expected fair value less costs to sell. The Company will continue to assess the net expected fair value less costs to sell to determine if any adjustments are necessary prior to the closing of the sale transaction. The assets held for sale of PTS at December 31, 2006 and June 30, 2006 are included within the Corporate segment. See further discussion at Note 16.

The results of PTS included in discontinued operations for the three and six months ended December 31, 2006 and 2005 are summarized as follows:

	Three Months Ended December 31,					Six Months Ended December 31,
(in millions)	2006		2005			2006		2005
Revenue	$	437.4	$	433.7		$	856.8	$	818.5
Earnings before income taxes	$	24.8	$	32.8		$	27.2	$	36.5
Income tax benefit (expense)	$	411.2	$	(6.0	)	$	417.5	$	(5.6	)
Earnings from discontinued operations	$	436.0	$	26.8		$	444.7	$	30.9
Comprehensive income from discontinued operations	$	452.4	$	(0.1	)	$	469.6	$	(10.3	)

The net periodic benefit cost included in discontinued operations for PTS was $1.9 million and $3.8 million for the three and six months ended December 31, 2006, respectively, compared to $1.8 million and $3.6 million for the three and six months ended December 31, 2005, respectively.

Interest expense allocated to discontinued operations for PTS was $8.9 million and $17.4 million for the three and six months ended December 31, 2006, respectively, compared to $5.5 million and $11.3 million for the three and six months ended December 31, 2005, respectively. Interest expense was allocated based upon a ratio of the invested capital of PTS discontinued operations versus the overall invested capital of the Company.

In accordance with EITF Issue No. 93-7, “Recognition of Deferred Tax Assets for a Parent Company’s Excess Tax Basis in the Stock of a Subsidiary That is Accounted for as a Discontinued Operation,” during the second quarter of fiscal 2007 the Company recognized a $425.0 million net tax benefit related to the difference between the Company’s tax basis in the stock of the various PTS businesses included in discontinued operations and the book basis of the Company’s investment in those businesses. This tax benefit will be offset by the related tax expense on any gain over net book value in the quarter that a transaction to sell PTS closes.

At December 31, 2006 and June 30, 2006, the major components of the PTS assets and liabilities held for sale and included in discontinued operations were as follows:

(in millions)	December 31,         2006		June 30,         2006
Current assets	$	1,260.3	$	759.0
Property and equipment, net		1,076.8		1,079.0
Other assets		697.7		692.6
Total assets	$	3,034.8	$	2,530.6
Current liabilities	$	280.4	$	252.1
Long-term debt and other		246.6		195.5
Total liabilities	$	527.0	$	447.6

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Operating cash flows generated from the discontinued operations are presented separately on the Company’s condensed consolidated statements of cash flows.

Other

During the third quarter of fiscal 2006, the Company committed to plans to sell the HMS disposal group thereby meeting the held for sale criteria set forth in SFAS No. 144. The remaining portion of the Healthcare Marketing Services business will remain within the Company. In accordance with SFAS No. 144 and EITF Issue No. 03-13, the net assets of this business are presented separately as assets held for sale and the operating results of this business are presented within discontinued operations. In accordance with SFAS No. 144, the net assets held for sale were recorded at the net expected fair value less costs to sell, as this amount was lower than the business’ net carrying value. The resulting additional impairment charge of approximately $7.1 million and $32.0 million is recorded within discontinued operations during the three and six months ended December 31, 2006, respectively. The Company will continue to assess the net expected value less costs to sell to determine if any adjustments are necessary prior to the closing of the sale transaction. The net assets held for sale of the HMS disposal group at December 31, 2006 and June 30, 2006 are included within the Corporate segment. Subsequent to December 31, 2006, the Company sold the HMS disposal group.

During the third quarter of fiscal 2006, the Company committed to plans to sell IPD, thereby meeting the held for sale criteria set forth in SFAS No. 144. In accordance with SFAS No. 144 and EITF Issue No. 03-13 the net assets of this business are presented separately as assets held for sale and the operating results of this business are presented within discontinued operations. In the first quarter of fiscal 2007, the business was sold resulting in an additional $10.4 million loss on sale which is recorded in discontinued operations. The net assets held for sale of the IPD business at June 30, 2006 are included within the Healthcare Supply Chain Services-Pharmaceutical segment.

During the fourth quarter of fiscal 2005, the Company decided to close Humacao as part of its global restructuring program and committed to sell the assets of the Humacao operations, thereby meeting the held for sale criteria set forth in SFAS No. 144. During the fourth quarter of fiscal 2005, the Company recognized an asset impairment to write the carrying value of the Humacao assets down to fair value less costs to sell. During the first quarter of fiscal 2006, the Company subsequently decided not to transfer production from Humacao to other Company-owned facilities, thereby meeting the criteria for classification of discontinued operations in accordance with SFAS No. 144 and EITF Issue No. 03-13. In accordance with SFAS No. 144, the net assets of Humacao are presented as assets held for sale and the results of operations of Humacao are presented as discontinued operations. The net assets at December 31, 2006 and June 30, 2006 for the discontinued operations are included within the Corporate segment.

The combined results of the HMS disposal group, IPD and Humacao included in discontinued operations for the three and six months ended December 31, 2006 and 2005 are summarized as follows:

	Three Months Ended						Six Months Ended
	December 31,						December 31,
(in millions)	2006			2005			2006			2005
Revenue	$	47.9		$	147.5		$	162.2		$	287.9
Impairments/loss on sale	$	(12.0	)	$	—		$	(47.3	)	$	—
Loss before income taxes	$	(17.3	)	$	(12.9	)	$	(60.4	)	$	(24.3	)
Income tax benefit	$	4.9		$	4.3		$	18.4		$	6.4
Loss from discontinued operations	$	(12.4	)	$	(8.6	)	$	(42.0	)	$	(17.9	)

Interest expense allocated to the HMS disposal group, IPD and Humacao discontinued operations was $0.4 million and $0.7 million for the three months ended December 31, 2006 and 2005, respectively, and $1.3 million and $1.5 million for the six months ended December 31, 2006 and 2005, respectively. Due to the sale of IPD in the first quarter of fiscal 2007, no interest expense was allocated for the second quarter of fiscal 2007. Interest expense was allocated to discontinued operations based upon a ratio of the net assets of discontinued operations versus the overall net assets of the Company.

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The assets and liabilities held for sale and discontinued operations at December 31, 2006 related to the HMS disposal group and Humacao and at June 30, 2006 related to the HMS disposal group, IPD and Humacao were as follows:

(in millions)	December 31, 2006		June 30,     2006
Total assets	$	59.1	$	212.6
Total liabilities	$	2.4	$	80.4

Operating cash flows generated from the discontinued operations are presented separately on the Company’s condensed consolidated statements of cash flows.

12. EMPLOYEE RETIREMENT BENEFIT PLANS

Components of the Company’s net periodic benefit costs for the three and six months ended December 31, 2006 and 2005, were as follows:

	Three Months Ended						Six Months Ended
	December 31,						December 31,
(in millions)	2006			2005			2006			2005
Components of net periodic benefit cost:
Service cost	$	0.2		$	0.1		$	0.3		$	0.2
Interest cost		0.3			0.3			0.7			0.5
Expected return on plan assets		(0.4	)		(0.4	)		(0.8	)		(0.7	)
Net periodic benefit costs	$	0.1		$	—		$	0.2		$	—

The Company sponsors other postretirement benefit plans which are immaterial for all periods presented.

13. OFF-BALANCE SHEET TRANSACTIONS

Cardinal Health Funding (“CHF”) was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to multi-seller conduits administered by third party banks or other third party investors. CHF was designed to be a special purpose, bankruptcy-remote entity. Although consolidated in accordance with GAAP, CHF is a separate legal entity from the Company and the Company’s subsidiary that sells and contributes the receivables to CHF. The sale of receivables by CHF qualifies for sales treatment under SFAS No. 140 “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” and accordingly the receivables are not included in the Company’s consolidated financial statements.

At June 30, 2006, the Company had a committed receivables sales facility program available through CHF with capacity to sell $800.0 million in receivables. At June 30, 2006, the Company had $550.0 million of receivable interest sales outstanding. During the three months ended December 31, 2006, the Company repurchased the aggregate $550.0 million of receivable interest sales outstanding. After these repurchases, the Company did not have any receivable interest sales outstanding under its receivables sales facility program. On October 31, 2006, the Company renewed the receivables sales facility program for a period of one year.

See Note 8 of “Notes to Consolidated Financial Statements” in the 2006 Form 10-K for more information regarding the off-balance sheet arrangements.

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14. INCOME TAXES

The Company’s provision for income taxes relative to earnings before income taxes and discontinued operations was 34.2% and 32.0%, respectively, for the three and six months ended December 31, 2006, as compared to 33.6% and 32.8%, respectively, for the three and six months ended December 31, 2005. Generally, fluctuations in the effective tax rate are primarily due to changes within international and state effective tax rates resulting from the Company’s business mix and changes in the tax impact of special items, which may have unique tax implications depending on the nature of the item.

During the three and six months ended December 31, 2006, the effective tax rate from continuing operations was negatively impacted by $7.3 million and benefited by $9.9 million, respectively, as a result of adjustments to the Company’s tax reserves. The unfavorable tax reserve adjustments during the three months ended December 31, 2006 were related to an ongoing international tax audit. The favorable tax adjustment during the prior quarter ended September 30, 2006 was primarily due to the issuance of a final Revenue Agent Report that related to fiscal years 2001 and 2002 of which $9.9 million benefited continuing operations and $6.8 million benefited discontinued operations.

The Company’s provision for income taxes relative to discontinued operations was $416.1 million and $435.9 million for the three and six months ended December 31, 2006, respectively. See Note 11 for discussion of the $425.0 million net tax benefit included in discontinued operations.

15. INVESTMENTS

At December 31, 2006 and June 30, 2006, the Company invested approximately $89.8 million and $208.9 million, respectively, in tax-exempt variable rate demand notes and approximately $377.3 million and $289.5 million, respectively, in tax-exempt auction rate securities. These short-term investments are classified as available-for-sale on the Company’s consolidated balance sheet. The interest rate payable on the Company’s current investments resets every seven, twenty-eight, or thirty-five days, and the investments are automatically reinvested unless the Company provides notice of intent to liquidate to the broker. The Company’s investments in these securities are recorded at cost, which approximates fair market value due to their variable interest rates. The underlying maturities of the current investments range from two to thirty-four years. The bonds are issued by municipalities and other tax exempt entities. Most are backed by letters of credit from the banking institutions that broker the debt placements or another financial institution. All of the investments have ratings of at least AA.

At June 30, 2006, the Company held a $16.7 million cost investment. During the three months ended December 31, 2006, a valuation of the entity invested in was performed by an independent third party in conjunction with a business transaction initiated by such entity. Based on the results of the valuation, the Company determined the investment was impaired and recorded a $12.3 million charge to impairment charges and other.

16. SUBSEQUENT EVENTS

On January 24, 2007, the Company amended certain of the terms of its existing $1.0 billion revolving credit facility. As part of the amendment, the amount of the facility was increased from $1.0 billion to $1.5 billion and the term was extended to January 24, 2012.

On January 25, 2007, the Company and Phoenix Charter LLC (“Phoenix”), an affiliate of The Blackstone Group (“Blackstone”), entered into a Purchase and Sale Agreement (the “Purchase Agreement”) pursuant to which Phoenix will acquire the Company’s Pharmaceutical Technologies and Services segment, other than the Martindale and Beckloff businesses (the segment, excluding the Martindale and Beckloff businesses, the “PTS Business”), for approximately $3.3 billion in cash (the “PTS Sale”). The purchase price is subject to possible upward or downward adjustment based on certain provisions in the Purchase Agreement relating to the working capital, indebtedness and earnings before interest, taxes, depreciation and amortization of the PTS Business. The completion of the PTS Sale is subject to customary closing conditions, including antitrust clearance, no injunctions or illegality, and the absence of a material adverse effect on the PTS Business or Phoenix’s ability to timely consummate the transactions contemplated by the Purchase Agreement. The PTS Sale is not subject to any financing condition, and is expected to close early in the fourth quarter of the Company’s fiscal year 2007. In connection with the execution of the Purchase Agreement, Blackstone Capital Partners V L.P., an affiliate of Blackstone, issued a limited guaranty in favor of the Company to support Phoenix’s obligations under the Purchase Agreement. The maximum aggregate liability of Phoenix under the Purchase Agreement and Blackstone Capital Partners V L.P. under the limited guaranty is limited to $65.0 million in the aggregate.

On January 30, 2007, the Company completed the acquisition of SpecialtyScripts LLC, a privately-held, specialty pharmaceutical services company in Massachusetts. This business will be consolidated within the Company’s Healthcare Supply Chain Services – Pharmaceutical segment.

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On January 31, 2007, the Company announced an additional $1.5 billion share repurchase program, bringing the Company’s total repurchase authorization to $4.5 billion.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis presented below is concerned with material changes in financial condition and results of operations for the Company’s condensed consolidated balance sheets as of December 31, 2006 and June 30, 2006, and for the condensed consolidated statements of earnings for the three and six month periods ended December 31, 2006 and 2005. This discussion and analysis should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2006 Form 10-K.

Portions of this Form 10-Q (including information incorporated by reference) include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. The words “believe,” “expect,” “anticipate,” “project,” and similar expressions, among others, generally identify “forward-looking statements,” which speak only as of the date the statements were made. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to materially differ from those made, projected or implied. The most significant of these risks, uncertainties and other factors are described in Exhibit 99.01 to this Form 10-Q and in the 2006 Form 10-K (under “Item 1A: Risk Factors”) and are incorporated in this Form 10-Q by reference. Except to the extent required by applicable law, the Company undertakes no obligation to update or revise any forward-looking statements.

Overview

The following summarizes the Company’s results of operations for the three and six months ended December 31, 2006 and 2005:

	Three Months Ended December 31,						Six Months Ended December 31,
(in millions, except per Common Share amounts)	Growth (1)	2006		2005			Growth (1)	2006		2005
Revenue	13%	$	21,784.6	$	19,346.9		12%	$	42,722.1	$	38,199.3
Cost of products sold (2)	13%		20,484.7		18,181.2		12%		40,221.7		35,932.0
Gross margin	12%	$	1,299.9	$	1,165.7		10%	$	2,500.4	$	2,267.3
Selling, general and administrative expenses (2)	8%		755.6		696.9		5%		1,480.9		1,410.6
Impairment charges and other	N.M.		12.6		(2.6	)	N.M.		14.3		(0.6	)
Special items	37%		19.6		14.3		21%		41.8		34.5
Operating earnings	12%	$	512.1	$	457.1		17%	$	963.4	$	822.8
Interest expense and other	22%		32.4		26.6		39%		70.1		50.3
Earnings before income taxes and discontinued operations	11%	$	479.7		430.5		16%	$	893.3		772.5
Provision for income taxes	13%		164.0		144.7		13%		286.0		253.2
Earnings from continuing operations	10%	$	315.7	$	285.8		17%	$	607.3	$	519.3
Earnings from discontinued operations	N.M.		423.6		18.2		N.M.		402.7		13.0
Net earnings	143%	$	739.3	$	304.0		90%	$	1,010.0	$	532.3
Net diluted earnings per Common Share	157%	$	1.80	$	0.70		99%	$	2.45	$	1.23

(1) Growth is calculated as the percentage change for the three and six months ended December 31, 2006 compared to the three and six months ended December 31, 2005.

(2) During the second quarter of fiscal year 2007, the Company changed the classification of certain immaterial implementation costs associated with the sale of medical and supply storage devices in the Clinical Technologies and Services segment from selling, general and administrative expenses to cost of products sold. Prior period balances have been reclassified to conform to the new presentation.

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During the second quarter of fiscal 2007, the Company announced the planned divestiture of substantially all of the Pharmaceutical Technologies and Services segment and, accordingly, this segment’s after-tax operations appear in the discontinued operations line on the income statement for both the current and prior year comparative periods. See Note 11 in the “Notes to Condensed Consolidated Financial Statements” for additional information on the Company’s discontinued operations. Unless otherwise indicated, captions such as revenue and earnings from continuing operations are referred to simply as “revenue” and “earnings” throughout this Management’s Discussion and Analysis. Similarly, discussion of other matters in the Company’s condensed consolidated financial statements refers to continuing operations unless otherwise indicated.

Revenue

Revenue increased 13% and 12% for the three and six months ended December 31, 2006, respectively, compared to the same periods in the prior year based upon continued demand for the Company’s diverse portfolio of products and services. The increases also resulted from revenue growth in each of the Company’s four reportable segments, including revenue growth of 13% within the Healthcare Supply Chain Services – Pharmaceutical segment for the three and six months ended December 31, 2006. The Healthcare Supply Chain Services – Pharmaceutical segment represents approximately 87% of total Company revenue. Refer to “Segment Results” below for further discussion of the specific drivers of revenue growth.

Cost of Products Sold

Cost of products sold increased 13% and 12% for the three and six months ended December 31, 2006, respectively, compared to the same periods in the prior year. The increases in cost of products sold were primarily due to increased sales volume that generated revenue growth and the first quarter charge of $13.5 million related to the Alaris^® SE pump recall. Refer to the segment profit section within “Segment Results” below for further discussion.

Gross Margin

Gross margin increased 12% and 10% for the three and six months ended December 31, 2006, respectively, compared to the same periods in the prior year. The increases in gross margin were primarily due to the revenue growth in each of the four segments net of the corresponding increase in cost of products sold, competitive pricing pressures within the Healthcare Supply Chain Services segments and the negative impact of the first quarter charge of $13.5 million related to the Alaris^® SE pump recall. Refer to the segment profit section within “Segment Results” below for further discussion.

Selling, General and Administrative (“SG&A”) Expenses

SG&A expenses increased 8% and 5% for the three and six months ended December 31, 2006, respectively, compared with the same periods in the prior year. The increases in SG&A expenses were primarily due to additional expenses to support the Company’s revenue growth, the impact of integrating certain acquisitions and investment in international expansion. These increases were partially offset by the decrease in equity-based compensation expense, as described in more detail below, a strong focus on cost controls and expense reductions due to various One Cardinal Health initiatives. Refer to the segment profit section within “Segment Results” below for further discussion.

The Company recorded $33.0 million and $70.4 million, respectively, for equity-based compensation during the three and six months ended December 31, 2006 compared with $46.7 million and $120.7 million, respectively, in the comparable prior year periods. Equity-based compensation expense was significantly impacted by $5.1 million and $37.7 million during the three and six months ended December 31, 2005, respectively, from the vesting of the SARs upon issuance on August 3, 2005 to the Company’s then-Chairman and Chief Executive Officer with an exercise price significantly below the then-current price of the Company’s Common Shares and from the subsequent remeasurement of the fair value of the SARs. In quarters subsequent to issuing the SARs, the fair value has been and will continue to be remeasured until the SARs are settled. Any increase in fair value is recorded as equity-based compensation. Any decrease in the fair value of the SARs is only recognized to the extent of the expense previously recorded. See Note 3 of “Notes to Condensed Consolidated Financial Statements” for additional information regarding equity-based compensation.

Impairment Charges and Other

For the three months ended December 31, 2006 and 2005, the Company recorded impairment charges and other charges/(gains) of $12.6 million and ($2.6) million, respectively. During the six months ended December 31, 2006 and 2005, the Company recorded impairment charges and other charges/(gains) of $14.3 million and ($0.6) million, respectively. See Note 11 and Note 15 of “Notes to Condensed Consolidated Financial Statements” for additional information regarding impairment charges and other.

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Special Items

	Three Months Ended December 31,					Six Months Ended December 31,
(in millions)	2006		2005			2006		2005
Restructuring charges	$	10.0	$	9.3		$	21.8	$	16.8
Merger charges		9.1		5.9			11.1		12.8
Other		0.5		(0.9	)		8.9		4.9
Total special items	$	19.6	$	14.3		$	41.8	$	34.5

See Note 5 of “Notes to Condensed Consolidated Financial Statements” for detail of the Company’s special items during the three and six months ended December 31, 2006 and 2005.

Interest Expense and Other

Interest expense and other increased 22% and 39%, respectively, during the three and six months ended December 31, 2006 compared to the same periods in the prior fiscal year. The increases resulted primarily from increased average borrowing levels and interest rates.

Provision for Income Taxes – Continuing Operations

The Company’s provision for income taxes relative to earnings before income taxes and discontinued operations was $164.0 million or 34.2% for the three months ended December 31, 2006, and $286.0 million or 32.0% for the six months ended December 31, 2006. Generally, fluctuations in the effective tax rate are primarily due to changes within international and state effective tax rates resulting from the Company’s business mix and changes in the tax impact of special items, which may have unique tax implications depending on the nature of the item.

The effective tax rate for the three months ended December 31, 2006 was negatively impacted by $7.3 million or 1.5 percentage points as a result of tax reserve adjustments related to an ongoing international tax audit and by 0.6 percentage points due to the mix of special items and impairment charges being deductible at effective tax rates lower than the average effective tax rate. During the six months ended December 31, 2006, the continuing operations effective tax rate benefited by $9.9 million or 1.1% as a result of tax reserve adjustments primarily due to the issuance of a final Revenue Agent Report received during the first quarter which related to fiscal years 2001 and 2002.

Provision for Income Taxes - Discontinued Operations

The Company’s benefit for income taxes on discontinued operations was $416.1 million and $435.9 million for the three and six months ended December 31, 2006, respectively. During the second quarter of fiscal 2007, the Company recognized a $425.0 million net tax benefit related to the difference between the Company’s tax basis in the stock of the various Pharmaceutical Technologies and Services businesses included in discontinued operations and the book basis of the Company’s investment in those businesses.

Income from Discontinued Operations

See Note 11 in the “Notes to Condensed Consolidated Financial Statements” for information on the Company’s discontinued operations.

Other Matters

Sale of Pharmaceutical Technologies and Services Segment

On January 25, 2007, the Company and Phoenix Charter LLC (“Phoenix”), an affiliate of The Blackstone Group (“Blackstone”), entered into a Purchase and Sale Agreement (the “Purchase Agreement”) pursuant to which Phoenix will acquire the Company’s Pharmaceutical Technologies and Services segment, other than the Martindale and Beckloff businesses (the segment, excluding the Martindale and Beckloff businesses, the “PTS Business”), for approximately $3.3 billion in cash (the “PTS Sale”). The purchase price is subject to possible upward or downward adjustment based on certain provisions in the Purchase Agreement relating to the working capital, indebtedness and earnings before interest, taxes, depreciation and amortization of the PTS Business. The completion of the PTS Sale is subject to customary closing conditions, including antitrust clearance, no injunctions or illegality, and the absence of a material adverse effect on the PTS Business or Phoenix’s ability to timely consummate the transactions contemplated by the Purchase

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Agreement. The PTS Sale is not subject to any financing condition, and is expected to close early in the fourth quarter of the Company’s fiscal year 2007. In connection with the execution of the Purchase Agreement, Blackstone Capital Partners V L.P., an affiliate of Blackstone, issued a limited guaranty in favor of the Company to support Phoenix’s obligations under the Purchase Agreement. The maximum aggregate liability of Phoenix under the Purchase Agreement and Blackstone Capital Partners V L.P. under the limited guaranty is limited to $65.0 million in the aggregate.

As previously announced, the Company plans to use the net proceeds from the sale to repurchase shares. The sale is expected to generate approximately $3.1 billion in after-tax proceeds. The net book value of the Pharmaceutical Technologies and Services segment is approximately $2.0 billion.

Alaris^® SE Pump Recall

On August 15, 2006, the Company initiated a voluntary field corrective action of its Alaris® SE pump as a result of information indicating that the product had a risk of “key bounce” associated with keypad entries that could lead to over-infusion of patients. On August 23, 2006, the United States filed a complaint in the U.S. District Court for the Southern District of California to effect the seizure of Alaris SE pumps and the Company suspended production, sales, repairs and installation of the pumps after approximately 1,300 units were seized by the U.S. Food and Drug Administration (the “FDA”).

On February 7, 2007, a Consent Decree for Condemnation and Permanent Injunction (the “Consent Decree”) was filed in the District Court to resolve the seizure litigation. The Consent Decree outlines the steps the Company must take to resume manufacturing and selling Alaris SE pumps in the United States. The steps include submitting a plan to the FDA outlining corrections for the Alaris SE pumps currently in use by customers, submitting a remediation plan for the seized Alaris SE pumps, and engaging an independent expert to inspect Alaris SE pump facilities and certify the Company’s infusion pump operations. The corrective action and remediation plans must be approved by the FDA prior to implementation by the Company.

There have been approximately 140,000 Alaris SE pumps distributed worldwide during the past 12 years and the product line currently represents less than 1% of annual revenue for the Clinical Technologies and Services segment. The Company recorded a $13.5 million charge for the quarter ended September 30, 2006 related to this matter. The Company has begun taking the steps necessary to comply with the terms of the Consent Decree and does not believe that compliance with the Consent Decree will materially affect its results of operations or financial condition. However, there can be no assurance that additional costs or penalties will not be incurred, the effect of which could be material to the Company’s results of operations.

Government Investigations

The Company is currently the subject of a formal investigation by the SEC relating to certain accounting and financial reporting matters, and the U.S. Attorney’s Office for the Southern District of New York is conducting an inquiry with respect to the Company. The Company continues to engage in settlement discussions with the staff of the SEC and has reached an agreement-in-principle on the basic terms of a potential settlement involving the Company that the SEC staff has indicated it is prepared to recommend to the Commission. The proposed settlement is subject to the completion of definitive documentation as well as acceptance and authorization by the Commission and would, among other things, require the Company to pay a $35.0 million penalty. As a result, the Company recorded reserves totaling $35.0 million in prior periods. There can be no assurance that the Company’s efforts to resolve the SEC’s investigation with respect to the Company will be successful, or that the amount reserved will be sufficient, and the Company cannot predict the timing or the final terms of any settlement. For further information regarding these matters see Note 8 of “Notes to Condensed Consolidated Financial Statements.”

Shareholder Litigation

The Company is subject to several class action lawsuits brought against the Company and certain of its former and present officers and directors since July 2004. The Company is currently unable to predict or determine the outcome or resolution of these proceedings, or to estimate the amounts of, or potential range of, loss with respect to these proceedings. The range of possible resolutions of these proceedings could include judgments against the Company or settlements that could require substantial payments by the Company. These payments could have a material adverse effect on the Company’s results of operations, financial condition, liquidity and cash flows. The Company discusses these cases and other litigation to which it is a party in greater detail in Note 8 of “Notes to Condensed Consolidated Financial Statements” and under “Part II, Item 1: Legal Proceedings.”

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Segment Results

Reportable Segments

During the first quarter of fiscal 2007, the Company realigned its operations into the following five reportable segments: Healthcare Supply Chain Services – Pharmaceutical; Healthcare Supply Chain Services – Medical; Clinical Technologies and Services; Pharmaceutical Technologies and Services; and Medical Products Manufacturing. This change in segment reporting resulted from a realignment of the individual businesses to better correlate the operations of the Company with the needs of its customers. The five segments align within two major sectors: Healthcare Supply Chain Services, which is focused on the Company’s logistics and distribution capabilities, and Pharmaceutical and Medical Products, which is focused on manufacturing businesses.

During the second quarter of fiscal 2007, the Company announced the planned divestiture of substantially all of the Pharmaceutical Technologies and Services segment and, accordingly, after-tax operations of this segment appear in the discontinued operations line on the income statement for both the current and prior year comparative periods. As a result of the planned divestiture of the Pharmaceutical Technologies and Services segment, the Company’s remaining four reportable segments are: Healthcare Supply Chain Services – Pharmaceutical; Healthcare Supply Chain Services – Medical; Clinical Technologies and Services; and Medical Products Manufacturing.

Revenue

The following table summarizes the percentage of total segment revenue by reportable segment for the three and six month periods ended December 31:

	Three Months Ended December 31,						Six Months Ended December 31,
			Percent of Segment Revenue						Percent of Segment Revenue
	Growth (1)		2006		2005		Growth (1)		2006		2005
Healthcare Supply Chain Services - Pharmaceutical	13	%	87	%	86	%	13	%	87	%	86	%
Healthcare Supply Chain Services - Medical	6	%	8	%	9	%	4	%	8	%	9	%
Clinical Technologies and Services	10	%	3	%	3	%	7	%	3	%	3	%
Medical Products Manufacturing	15	%	2	%	2	%	13	%	2	%	2	%
Total segment revenue			100	%	100	%			100	%	100	%

(1) Growth is calculated as the percentage change in the revenue for the three and six months ended December 31, 2006 compared to the three and six months ended December 31, 2005.

Healthcare Supply Chain Services – Pharmaceutical. This segment’s revenue increased 13% during the three and six months ended December 31, 2006 compared with the same periods in the prior year. Principal factors include:

• Strong revenue growth in the core pharmaceutical distribution business. The most significant growth was in revenue from bulk customers (described below), which contributed 9 and 8 percentage points, respectively, to this segment’s growth during the three and six months ended December 31, 2006. Revenue from bulk customers increased to $8.7 and $16.7 billion, respectively, compared with $7.1 and $13.9 billion, respectively, in the prior periods. The increases in revenue from bulk customers primarily relate to additional volume from existing warehouse customers as well as the market growth within the mail order business. Growth from non-bulk revenue contributed approximately 5 percentage points to this segment’s revenue growth during the three and six months ended December 31, 2006 due to market growth and new business.

• The impact of acquisitions within this segment, primarily Dohmen, accounted for approximately 2 percentage points of the revenue growth during the three and six month periods ended December 31, 2006.

• Revenue growth was adversely impacted by approximately 3 percentage points due to the loss of the Specialty Distribution businesses’ largest customer at the beginning of the third quarter of fiscal 2006 and the sale of a significant portion of this business in the fourth quarter of fiscal 2006.

The Healthcare Supply Chain Services - Pharmaceutical segment differentiates between bulk and non-bulk customers because bulk customers generate significantly lower segment profit per revenue dollar than non-bulk customers. Bulk customers consist of customers’ centralized warehouse operations and customers’ mail order businesses. All other customers are classified as non-bulk

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customers (for example, retail stores, pharmacies, hospitals and alternate care sites). Bulk customers include warehouse operations of retail chains, whose retail stores are classified as non-bulk customers. Bulk customers have the ability to process large quantities of products in central locations and self distribute these products to their individual retail stores or customers. Substantially all deliveries to bulk customers consist of product shipped in the same form as the product is received from the manufacturer, but a small portion of deliveries to bulk customers are broken down into smaller units prior to shipping. Non-bulk customers, on the other hand, require more complex servicing by the Company. These services, all of which are performed by the Company, include receiving inventory in large or full case quantities and breaking it down into smaller quantities, warehousing the product for a longer period of time, picking individual products specific to a customer’s order and delivering that smaller order to a customer location.

Bulk customers receive lower pricing, generating lower revenue for the Company, on sales of the same products than non-bulk customers due to volume pricing in a competitive market and lower costs related to the services provided by the Company. Bulk customers also generate higher cost of products sold than non-bulk customers because bulk customers’ orders consist almost entirely of higher cost branded products. The lower revenue and higher cost of products sold results in significantly lower gross margin per revenue dollar from bulk customers than from non-bulk customers. The SG&A expenses relating to servicing bulk customers are substantially lower than servicing non-bulk customers, because as noted above, deliveries to bulk customers require substantially less services than deliveries to non-bulk customers. As a result of lower pricing and higher costs of the products sold partially offset by lower SG&A expenses, segment profit per revenue dollar from bulk customers is significantly lower than that from non-bulk customers. See the Healthcare Supply Chain Services - Pharmaceutical “Segment Profit” discussion below for the significant items impacting segment profit.

The Company defines bulk customers based on the way in which it operates its business and the services the Company performs for its customers. The Company is not aware of an industry standard regarding the definition of bulk customers and based solely on a review of the Annual Reports on Form 10-K of its direct competitors, the Company notes that other companies in comparable businesses may, or may not, use a different definition of bulk customers.

Healthcare Supply Chain Services – Medical. This segment’s revenue increased 6% and 4%, respectively, during the three and six months ended December 31, 2006 compared with the same periods in the prior year. Principal factors include:

• Sales to hospitals and ambulatory care centers accounted for revenue growth of approximately 4 and 2 percentage points, respectively, during the three and six months ended December 31, 2006. Growth in these markets was adversely impacted by transitional challenges associated with the new consolidated customer service center model.

• Within the laboratory business unit, strong sales of capital equipment and consumables due to new customers combined with growth in sales to research and reference laboratories contributed approximately 1 percentage point to revenue growth during the three and six months ended December 31, 2006.

• Growth in the Canadian medical supply distribution business accounted for approximately 1 percentage point of revenue growth during the three and six months ended December 31, 2006 based on expanding customer bases and new vendor agreements.

Clinical Technologies and Services. This segment’s revenue increased 10% and 7%, respectively, during the three and six months ended December 31, 2006 compared with the same periods in the prior year. Principal factors include:

• Revenue growth within the Medication Technologies business, which includes both the Alaris and Pyxis businesses, contributed approximately 9 and 6 percentage points, respectively, during the three and six months ended December 31, 2006. The revenue growth was due to continued demand for the Alaris and Pyxis product lines and the launch of upgrades to the flagship Pyxis Medstation and Alaris System products.

Medical Products Manufacturing. This segment’s revenue increased 15% and 13%, respectively, during the three and six months ended December 31, 2006 compared with the same periods in the prior year. Principal factors include:

• New product launches, new customer accounts and competitive displacements within the segment’s manufactured gloves and respiratory product lines contributed approximately 5 and 4 percentage points, respectively, to revenue growth during the three and six months ended December 31, 2006.

• International revenue growth in Canada and Europe combined contributed approximately 4 and 3 percentage points, respectively, during the three and six months ended December 31, 2006 as a result of investments in customer service and marketing coupled with favorable foreign exchange rates.

• Converters^® infection prevention products contributed approximately 3 and 2 percentage points, respectively, to revenue growth during the three and six months ended December 31, 2006 due to new contracts and increased demand from hospitals in preparation for potential influenza outbreak.

• The Denver Biomedical acquisition increased the revenue growth rate by approximately 2 percentage points during the three and six months ended December 31, 2006.

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Segment Profit

The following table summarizes by reportable segment the percentage contribution to total segment profit. Segment profit is segment revenue less segment cost of products sold, less segment selling, general and administrative expenses. See Note 7 of “Notes to Consolidated Financial Statements” for differences between segment profit and consolidated operating earnings.

	Three Months Ended December 31,						Six Months Ended December 31,
			Percent of Segment Profit						Percent of Segment Profit
	Growth (1)		2006		2005		Growth (1)		2006		2005
Healthcare Supply Chain Services - Pharmaceutical (2)	19	%	60	%	59	%	23	%	62	%	59	%
Healthcare Supply Chain Services - Medical (2)	12	%	14	%	15	%	5	%	14	%	16	%
Clinical Technologies and Services (2)	16	%	17	%	17	%	5	%	14	%	16	%
Medical Products Manufacturing (2)	21	%	9	%	9	%	29	%	10	%	9	%
Total segment profit (2)			100	%	100	%			100	%	100	%

(1) Growth is calculated as the percentage change in segment profit for the three and six months ended December 31, 2006 compared to the three and six months ended December 31, 2005.

(2) A portion of the corporate costs previously allocated to the Pharmaceutical Technologies and Services segment has been reclassified to the remaining four segments. In addition, equity-based compensation was allocated to the segments; see discussions below for the impact of equity-based compensation on the related segments. Prior period information has been reclassified to conform to this new presentation. See Note 3 in “Notes to Condensed Consolidated Financial Statements” for further information regarding the Company’s consolidated equity-based compensation.

Healthcare Supply Chain Services – Pharmaceutical. Segment profit increased 19% and 23%, respectively, during the three and six months ended December 31, 2006 compared with the same periods in the prior year. Principal factors include:

• Gross margin increased segment profit by approximately 25 and 30 percentage points, respectively, for the three and six months ended December 31, 2006 (including the prior period items discussed below). The increases were due primarily to increased sales volume and favorable vendor pricing partially offset by additional discounts to customers. Favorable vendor pricing resulted from growth in amounts of generic and nuclear price discounts, effective generic and nuclear pharmaceutical sourcing and branded pharmaceutical price appreciation. Discounts to customers increased due to continued competitive pressures.

• Two prior period items increased segment profit by approximately 8 percentage points for the six month period ended December 31, 2006 compared to the six months ended December 31, 2005. The first item was the $31.8 million charge recorded in the first quarter of fiscal 2006 reflecting credits owed to certain vendors for prior periods. The second item was a $7.6 million vendor credit received in the first quarter of fiscal 2007.

• During the three and six months ended December 31, 2006, last in, first out (“LIFO”) provisions had no impact on gross margin due to the deflationary generic pharmaceutical environment which caused inventories at LIFO to exceed first in, first out (“FIFO”) values. The Company expects this trend to continue through the remainder of the fiscal year. The Company’s policy is not to record inventories in excess of FIFO which approximates current market value. During the three and six months ended December 31, 2005, segment profit increased by 3 percentage points as a result of a $13.0 million LIFO credit provision recorded due to price deflation within generic pharmaceutical inventories.

• Increases in SG&A expenses decreased segment profit by approximately 6 and 7 percentage points, respectively, for the three and six months ended December 31, 2006 compared to the corresponding periods in the prior year. Increases in these expenses were primarily due to the acquisition of Dohmen and ParMed combined with increased sales volume. These increases were partially offset by the year-over-year decrease in equity-based compensation, which positively impacted segment profit by approximately 1 percentage point for the three and six months ended December 31, 2006.

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Healthcare Supply Chain Services – Medical. Segment profit increased 12% and 5%, respectively, during the three and six months ended December 31, 2006 compared with the same periods in the prior year. Principal factors include:

• Gross margin increased segment profit by approximately 23 and 16 percentage points, respectively, for the three and six months ended December 31, 2006 due primarily to increased sales volumes and favorable product mix offset by additional discounts to customers and manufacturing cost increases.

• Increases in SG&A expenses decreased segment profit by approximately 11 and 10 percentage points, respectively, for the three and six months ended December 31, 2006. Increases in these expenses were primarily due to increased sales volume. During the second quarter, expense increases were partially offset by the positive impact of disciplined expense control, reduced fuel costs and productivity gains from facility and back-office consolidations within the Healthcare Supply Chain Services sector. The increases were also offset by the year-over-year decrease in equity-based compensation, which positively impacted segment profit by approximately 3 and 7 percentage points, respectively, for the three and six months ended December 31, 2006.

Clinical Technologies and Services. Segment profit increased 16% and 5%, respectively, during the three and six months ended December 31, 2006 compared with the same periods in the prior year. Principal factors include:

• Gross margin increased segment profit by approximately 37 and 21 percentage points, respectively, for the three and six months ended December 31, 2006 due primarily to increased sales volumes, full functionality for new products and contract and pricing discipline. The quarterly results were positively impacted by approximately 7 percentage points due to licensing agreements and customer reimbursements of excess rebate payments. Year-to-date results reflect the negative impact of the first quarter charge of $13.5 million or 10 percentage points related to the Alaris^® SE pump recall for the estimated costs to resolve the issue.

• SG&A expenses for the quarter decreased segment profit by approximately 21 and 16 percentage points, respectively, for the three and six months ended December 31, 2006. Increases in these expenses were primarily in support of the increased sales volume and investments in international infrastructure, research and development, product quality and customer service. These increases were partially offset by the year-over-year decrease in equity-based compensation, which positively impacted segment profit by approximately 12 and 6 percentage points, respectively, for the three and six months ended December 31, 2006.

Medical Products Manufacturing. Segment profit increased by 21% and 29%, respectively, for the three and six months ended December 31, 2006 compared with the same periods in the prior year. Principal factors include:

• Gross margin increased segment profit by approximately 47 and 42 percentage points, respectively, for the three and six months ended December 31, 2006 due primarily to increased sales volumes, realization of manufacturing efficiencies through operational excellence and facility restructuring initiatives and the year-over-year impact of the Denver Biomedical acquisition.

• Increases in SG&A expenses decreased segment profit by approximately 26 and 13 percentage points, respectively, for the three and six months ended December 31, 2006. Increases in these expenses were primarily due to increased sales volume, the impact of foreign exchange rates, the year-over-year impact of the Denver Biomedical acquisition and investments in both new product research and international infrastructure. These increases were partially offset by the year-over-year decrease in equity-based compensation, which positively impacted segment profit by approximately 3 and 10 percentage points, respectively, for the three and six months ended December 31, 2006.

Liquidity and Capital Resources

Sources and Uses of Cash

The following table summarizes the Company’s Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2006 and 2005:

	Six Months Ended December 31,
(in millions)	2006			2005
Cash provided by/(used in):
Operating activities	$	639.4		$	1,392.7
Investing activities	$	(238.3	)	$	(602.1	)
Financing activities	$	(584.1	)	$	39.8

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Operating activities. Continuing operations contributed $608.8 million to net cash provided by operating activities during the six months ended December 31, 2006, a decrease of $632.7 million compared to the same prior year period. The year-over-year decrease was due to the $550.0 million repurchase of trade receivables under the Company’s committed receivables program as discussed in Note 13 of “Notes to Condensed Consolidated Financial Statements” and a $581.3 million increase in accounts payable in the prior year primarily due to the timing of payments for inventory purchases. Sources of cash included an $88.0 million increase in earnings from continuing operations and changes in other operating assets and liabilities.

Discontinued operations contributed $30.6 million and $151.2 million to net cash provided by operating activities for the six months ended December 31, 2006 and 2005, respectively. The $425.0 million tax benefit included in earnings from discontinued operations, as discussed in Note 11 of “Notes to Condensed Consolidated Financial Statements,” did not impact operating cash flows from discontinued operations as it is a noncash item. Operating cash provided by discontinued operations was driven by changes in operating assets and liabilities in addition to earnings before taxes and noncash impairments.

Investing activities. Cash used in investing activities from continuing operations of $230.4 million during the six months ended December 31, 2006 primarily represents the Company’s capital spending of approximately $154.0 million. In addition, the Company used net cash of approximately $121.0 million to complete the MedMined and Care Fusion acquisitions, net of divestitures of certain businesses. These uses of cash were partially offset by net proceeds of approximately $31.3 million due to the sale of certain short-term investments classified as available for sale.

Cash used in investing activities from continuing operations of $549.7 million during the six months ended December 31, 2005 primarily represents the Company’s purchase of $319.2 million of short-term investments classified as available for sale, capital spending of approximately $161.5 million and $72.5 million associated with the acquisition of the remaining minority interest of a Canadian distribution business within the Healthcare Supply Chain Services - Medical segment.

Cash used in investing activities for discontinued operations of $7.9 million during the six months ended December 31, 2006 primarily represents the Company’s capital spending of approximately $36.2 million partially offset by the proceeds of approximately $27.8 million from the sale of a facility and capital equipment.

Cash used in investing activities from discontinued operations of $52.4 million during the six months ended December 31, 2005 primarily represents the Company’s capital spending of approximately $55.4 million offset by the proceeds of approximately $4.1 million from the sale of capital equipment.

Financing activities. The Company’s financing activities from continuing operations used cash of $560.1 million during the six months ended December 31, 2006 primarily due to $745.3 million utilized to repurchase the Company’s Common Shares (see “Share Repurchase Program” below for additional information). In addition, the Company utilized cash to repay $689.2 million of long-term obligations and to pay approximately $73.4 million of dividends on its Common Shares. These uses of cash were partially offset by $851.7 million received under long-term borrowings due to the debt issuance discussed in Note 6 of “Notes to Condensed Consolidated Financial Statements” and proceeds received for shares issued under various employee stock plans of approximately $75.3 million.

The Company’s financing activities from continuing operations provided cash of $36.5 million during the six months ended December 31, 2005 primarily due to the $500.3 million received from the issuance of Notes in December 2005 (net proceeds of $496.7 million) and the proceeds for the shares issued under various employee stock plans of approximately $68.5 million. These cash inflows were partially offset by approximately $412.9 million utilized to repurchase the Company’s Common Shares.

Financing activities from discontinued operations used cash of $24.0 million during the six months ended December 31, 2006 primarily due to the $29.5 million of payments on borrowings offset by proceeds from borrowings and tax benefits of $5.5 million.

Financing activities from discontinued operations provided cash of $3.3 million during the six months ended December 31, 2005 primarily due to the $9.2 million of proceeds from borrowings offset by $7.0 million in payments on borrowings.

International Cash

The Company’s cash balance of approximately $1.0 billion as of December 31, 2006 includes $512.1 million of cash held by its subsidiaries outside of the United States. Although the vast majority of cash held outside the United States is available for repatriation, doing so could subject it to U.S. federal income tax.

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Share Repurchase Program

On July 11, 2006, the Company announced a $500.0 million share repurchase program and on August 3, 2006, the Company announced an additional $1.5 billion share repurchase program. On November 30, 2006, in connection with its announcement regarding divesting the Pharmaceutical Technologies and Services segment, the Company announced an additional $1.0 billion share repurchase program. On January 31, 2007, the Company announced an additional $1.5 billion share repurchase program, bringing the Company’s total repurchase authorization to $4.5 billion. The Company plans to complete the combined $4.5 billion share repurchase during fiscal 2007 and 2008. As previously announced, the Company expects to use the proceeds from the planned divestiture of the Pharmaceutical Technologies and Services segment to repurchase shares. During the three and six months ended December 31, 2006, the Company repurchased approximately $300.0 million and $745.3 million, respectively, of its Common Shares. See the table under “Part II, Item 2” for more information regarding these repurchases.

Capital Resources

In addition to cash, the Company’s sources of liquidity include a $1.0 billion commercial paper program backed by a $1.5 billion revolving credit facility and a committed receivables sales facility program with the capacity to sell $800.0 million in receivables. The Company initiated the $1.0 billion commercial paper program in August 2006, which replaced its former $1.5 billion commercial paper program. As of December 31, 2006, the Company had no borrowings outstanding under the commercial paper program. The Company plans to increase the commercial paper program to $1.5 billion. On January 24, 2007, the Company amended certain of the terms of its existing $1.0 billion revolving credit facility. As part of the amendment, the amount of the facility was increased from $1.0 billion to $1.5 billion and the term was extended to January 24, 2012. As of December 31, 2006, the Company had no borrowings outstanding under the revolving credit facility. The Company terminated a $150.0 million extendible commercial note program in the third quarter of fiscal 2007.

On October 3, 2006, the Company sold $350.0 million aggregate principal amount of 2009 floating rate Notes and $500.0 million aggregate principal amount of 2016 fixed rate Notes in a private offering. The Notes are senior unsecured obligations of the Company and rank equally with all of the Company’s existing and future unsecured senior debt and senior to all of the Company’s existing and future subordinated debt. The Notes are effectively subordinated to the liabilities of the Company’s subsidiaries, including trade payables. The Notes also effectively rank junior in right of payment to any secured debt of the Company to the extent of the value of the assets securing such debt. The Company used the net proceeds from the sale of the Notes to repay $500.0 million of the Company’s preferred debt securities, $127.4 million of the 7.30% Notes due 2006 issued by a subsidiary of the Company and guaranteed by the Company and other short-term obligations of the Company.

During the second quarter, the Company repurchased the aggregate $550.0 million of receivable interests outstanding under its committed receivables sales facility program. After these repurchases, the Company did not have any receivable interest sales outstanding under its receivables sales facility program. On October 31, 2006, the Company renewed the receivables sales facility program for a period of one year.

On October 26, 2006, the Company amended certain of the facility terms of the Company’s preferred debt securities. As part of this amendment, the Company repaid $500.0 million of the principal balance. After this repayment, the Company had $150.0 million outstanding under its preferred debt securities.

The Company’s capital resources are more fully described in “Liquidity and Capital Resources” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 4 and 8 of “Notes to Consolidated Financial Statements” in the 2006 Form 10-K.

From time to time, the Company considers and engages in acquisition transactions in order to expand its role as a leading provider of services to the healthcare industry. The Company evaluates possible candidates for merger or acquisition and considers opportunities to expand its role as a provider of products and services to the healthcare industry through all its reportable segments. If additional transactions are entered into or consummated, the Company may need to enter into funding arrangements for such mergers or acquisitions.

The Company currently believes that based upon existing cash, operating cash flows, available capital resources (as discussed above) and other available market transactions, it has adequate capital resources at its disposal to fund currently anticipated capital expenditures, business growth and expansion, contractual obligations and current and projected debt service requirements, including those related to business combinations and any payments necessary as a result of judgments against the Company or settlements in the shareholder litigation described in Note 8 of “Notes to Condensed Consolidated Financial Statements.”

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Debt Covenants

The Company’s various borrowing facilities and long-term debt are free of any financial covenants other than minimum net worth which cannot fall below $5.0 billion at any time. As of December 31, 2006, the Company was in compliance with this covenant.

Contractual Obligations

There have been no material changes, outside of the ordinary course of business, in the Company’s outstanding contractual obligations from those disclosed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2006 Form 10-K.

Off-Balance Sheet Arrangements

See Note 13 in “Notes to Condensed Consolidated Financial Statements” for more information regarding the off-balance sheet arrangements.

Other

See Note 1 in “Notes to Condensed Consolidated Financial Statements” for a discussion of recent financial accounting standards.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

The Company believes that there has been no material change in the quantitative and qualitative market risks from those discussed in the 2006 Form 10-K.

Item 4: Controls and Procedures

The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in its reports filed under the Exchange Act, such as this Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. The Company’s disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. The Company’s internal controls are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its financial statements in conformity with GAAP.

Evaluation of Disclosure Controls and Procedures. The Company carried out an evaluation, as required by Rule 13a-15(b) under the Exchange Act, with the participation of the Company’s principal executive officer and principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2006. Based on this evaluation, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2006.

Changes in Internal Control Over Financial Reporting. There were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2006 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Limitations on Control Systems. The Company’s management, including the Company’s principal executive officer and principal financial officer, does not expect that the Company’s disclosure controls and procedures and its internal control processes will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. The Company monitors its disclosure controls and procedures and internal controls and makes modifications as necessary; the Company’s intent in this regard is that the disclosure controls and procedures and the internal controls will be maintained as dynamic systems that change (including with improvements and corrections) as conditions warrant. Notwithstanding the foregoing,

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and as discussed above under this Item 4, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2006.

PART II. OTHER INFORMATION

Item 1: Legal Proceedings

The discussion below is limited to certain of the legal proceedings in which the Company is involved, including material developments to certain of those proceedings. Additional information regarding the legal proceedings in which the Company is involved is provided in “Item 3: Legal Proceedings” of the 2006 Form 10-K. The legal proceedings described in Note 8 of “Notes to Condensed Consolidated Financial Statements” are incorporated in this Item 1 by reference. Unless otherwise indicated, all proceedings discussed in Note 8 remain pending.

Antitrust Litigation against Pharmaceutical Manufacturers

During the last several years, numerous class action lawsuits have been filed against certain prescription drug manufacturers alleging that the prescription drug manufacturer, by itself or in concert with others, took improper actions to delay or prevent generic drug competition against the manufacturer’s brand name drug. The Company has not been a named plaintiff in any of these class actions, but has been a member of the direct purchasers’ class (i.e., those purchasers who purchase directly from these drug manufacturers). None of the class actions has gone to trial, but some have settled in the past with the Company receiving proceeds from the settlement fund. Currently, there are several such class actions pending in which the Company is a class member. Total recoveries to the Company from these actions through December 31, 2006 were $130.4 million. The Company is unable at this time to estimate future recoveries, if any, it will receive as a result of these class actions.

FTC Investigation

In December 2004, the Company received a request for documents from the Federal Trade Commission (“FTC”) asking the Company to voluntarily produce certain documents to the FTC. The document request, which does not allege any wrongdoing, is part of an FTC non-public investigation to determine whether the Company may be engaging in anticompetitive practices with other wholesale drug distributors in order to limit competition for provider and retail customers. The Company has been responding to the FTC request. The investigation is ongoing. The Company cannot currently predict its outcome or its ultimate impact on the Company’s business.

Illinois Attorney General Investigation

In October 2005, the Company received a subpoena from the Attorney General’s Office of the State of Illinois. The subpoena indicated that the Illinois Attorney General’s Office is examining whether the Company presented or caused to be presented false claims for payment to the Illinois Medicaid program related to repackaged pharmaceuticals. The Company is responding to the subpoena. The investigation is ongoing. The Company cannot currently predict its outcome or its ultimate impact on the Company’s business.

Other Matters

In addition to the matters described above, the Company also becomes involved from time-to-time in other litigation and regulatory matters incidental to its business, including, without limitation, inclusion of certain of its subsidiaries as a potentially responsible party for environmental clean-up costs as well as litigation in connection with acquisitions. The Company intends to vigorously defend itself against such other litigation and does not currently believe that the outcome of any such other litigation will have a material adverse effect on the Company’s consolidated financial statements.

The healthcare industry is highly regulated and government agencies continue to scrutinize certain practices affecting government programs and otherwise. From time to time, the Company receives subpoenas or requests for information from various government agencies, including from state attorneys general, the SEC and the U.S. Department of Justice relating to the business, accounting or disclosure practices of customers or suppliers. The Company generally responds to such subpoenas and requests in a timely and thorough manner, which responses sometimes require considerable time and effort, and can result in considerable costs being incurred, by the Company. The Company expects to incur additional costs in the future in connection with existing and future requests.

42

Item 1A: Risk Factors

In addition to the other information set forth in this Form 10-Q, you should consider the factors discussed under “Item 1A: Risk Factors” in the Company’s 2006 Form 10-K. These risks could materially and adversely affect the Company’s results of operations, financial condition, liquidity and cash flows. The risks described in the 2006 Form 10-K are not the only risks that the Company faces. The Company’s business operations could also be affected by additional factors that are not presently known to it or that the Company currently considers to be immaterial to its operations.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about purchases the Company made of its Common Shares during the quarter ended December 31, 2006:

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (2)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (2)
October 1–31, 2006	775,737	$	64.50	774,980	$	1,504,707,451
November 1–30, 2006	1,179		62.46	—		2,504,707,451
December 1–31, 2006	3,794,524		65.88	3,793,833		2,254,707,547
Total	4,571,440	$	65.64	4,568,813	$	2,254,707,547

(1) Includes 431, 423, and 339 Common Shares purchased in October, November and December 2006, respectively, through a rabbi trust as investments of participants in the Company’s Deferred Compensation Plan. Also includes 326, 756 and 352 restricted shares surrendered in October, November and December 2006, respectively, by employees upon vesting to meet tax withholding.

(2) On July 11, 2006, the Company announced a $500.0 million share repurchase program and on August 3, 2006, the Company announced an additional $1.5 billion share repurchase program. On November 30, 2006, in connection with its announcement regarding divesting the Pharmaceutical Technologies and Services segment, the Company announced an additional $1.0 billion share repurchase program, bringing the Company’s then-total repurchase authorization to $3.0 billion. The combined repurchase program will expire on June 30, 2008.

On January 31, 2007, the Company announced an additional $1.5 billion share repurchase program, bringing the Company’s current total repurchase authorization to $4.5 billion. The combined share repurchase program will expire on June 30, 2008. As previously reported, the Company expects to use the proceeds from the planned divestiture of the Pharmaceutical Technologies and Services segment to repurchase shares.

Item 4: Submission of Matters to a Vote of Security Holders

The Company’s 2006 Annual Meeting of Shareholders was held on November 8, 2006. Matters voted upon at the meeting and the votes tabulated with respect to such matters are as follows:

Election of Directors

Director	Votes in Favor	Votes Withheld
John F. Finn	358,414,116	10,059,990
David W. Raisbeck	363,852,443	4,621,663
Robert D. Walter	356,963,028	11,511,078

The directors whose term of office as a director continued after the meeting are R. Kerry Clark, George H. Conrades, Calvin Darden, Philip L. Francis, Robert L. Gerbig, J. Michael Losh, John B. McCoy, Richard C. Notebaert, Michael D. O’Halleran, Jean G. Spaulding, M.D. and Matthew D. Walter.

43

Management and Shareholder Proposals

	Votes Cast
	For	Against	Abstain	Broker Non-Votes
Ratification of the selection of the Company’s independent registered accounting firm for fiscal 2007	363,641,427	2,430,179	2,402,500	0
Shareholder proposal regarding severance arrangements (1)	195,830,861	134,449,385	3,752,465	34,441,395
Shareholder proposal regarding performance-based stock options	140,022,966	190,630,414	3,379,331	34,441,395
Shareholder proposal regarding submission of the Human Resources and Compensation Committee Report for an annual shareholder advisory vote	111,676,958	218,152,210	4,203,543	34,441,395

(1) The shareholder proposal regarding severance arrangements was an amendment to the Company’s Code of Regulations; therefore its adoption would have required a majority of the outstanding shares, or favorable votes of holders of 201,913,609 shares. It did not receive that number of votes and therefore failed.

44

Item 6: Exhibits

Exhibit Number	Exhibit Description
10.01	Five-year Credit Agreement, dated as of January 24, 2007, between the Company, 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
10.02	Restricted Share Units Agreement, dated November 15, 2006, between Cardinal Health, Inc. and Mark W. Parrish
10.03	First Amendment to the Cardinal Health Deferred Compensation Plan, as amended and restated effective January 1, 2005
10.04	Cardinal Health, Inc. Global Employee Stock Purchase Plan, as amended and restated effective as of May 10, 2006
31.01	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.02	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.01	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.02	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.01	Statement Regarding Forward-Looking Information
99.02	Consent Decree for Condemnation and Permanent Injunction
99.03	Cardinal Health 401(k) Savings Plan, as amended and restated effective as of January 1, 2006
99.04	Fourth Amendment to the Cardinal Health 401(k) Savings Plan for Employees of Puerto Rico (as amended and restated January 1, 2005)
99.05	Amendment Number Four to Syncor International Corporation Employees’ Savings and Stock Ownership Plan
99.06	Cardinal Health, Inc. Employee Stock Purchase Plan, as amended and restated effective as of May 10, 2006

45

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CARDINAL HEALTH, INC.
Date: February 8, 2007	/s/ R. Kerry Clark
	R. Kerry Clark President and Chief Executive Officer
	/s/ Jeffrey W. Henderson
	Jeffrey W. Henderson Chief Financial Officer

46

EX-10.01

Exhibit 10.01

EXECUTION COPY

CUSIP Number:                     

CARDINAL HEALTH, INC.

FIVE-YEAR CREDIT AGREEMENT

dated as of January 24, 2007

THE SUBSIDIARY BORROWERS PARTY HERETO,

THE LENDERS PARTY HERETO,

and

BANK OF AMERICA, N.A.,

as Administrative Agent

JPMORGAN CHASE BANK, N.A. and BARCLAYS BANK PLC,

as Syndication Agents

and

MORGAN STANLEY BANK,

and

DEUTSCHE BANK SECURITIES INC.,

as Documentation Agents

BANC OF AMERICA SECURITIES LLC,

J.P. MORGAN SECURITIES INC.

and

BARCLAYS CAPITAL

as Joint Lead Arrangers and Book Managers

TABLE OF CONTENTS

		Page
ARTICLE I.	DEFINITIONS	1
1.1	Definitions	1
1.2	Other Definitions and Provisions	18
1.3	References to Agreement and Laws	19
1.4	Times of Day	19
1.5	Letter of Credit Amounts	19
1.6	Rounding	19
1.7	Exchange Rates; Currency Equivalents	19
ARTICLE II.	THE CREDITS	20
2.1	Commitments of the Lenders; Swingline Facility	20
2.2	Optional Increase of the Commitments	24
2.3	Determination of Dollar Amounts; Termination	25
2.4	Ratable Loans	25
2.5	Types of Advances	26
2.6	Facility Fee; Other Fees; Reductions in Aggregate Commitment	26
2.7	Minimum Amount of Each Advance	26
2.8	Prepayments	26
2.9	Method of Selecting Types and Interest Periods for New Advances	27
2.10	Conversion and Continuation of Outstanding Advances	28
2.11	Method of Borrowing	29
2.12	Changes in Interest Rate, Etc	29
2.13	Rates Applicable After Default	29
2.14	Method of Payment	30
2.15	Noteless Agreement; Evidence of Indebtedness	30
2.16	Telephonic Notices	31
2.17	Interest Payment Dates; Interest and Fee Basis	31
2.18	Notification of Advances, Interest Rates, Prepayments and Commitment Reductions	32
2.19	Lending Installations	32
2.20	Non-Receipt of Funds by the Administrative Agent	32
2.21	Facility LCs	33
2.22	Market Disruption	37
2.23	Judgment Currency	38

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TABLE OF CONTENTS

(continued)

2.24	Payment Provisions Relating to the Euro	38
2.25	Redenomination and Alternative Currencies	39
2.26	Replacement of Lender	39
2.27	Application of Payments with Respect to Defaulting Lenders	39
2.28	Extension of Termination Date.	40
ARTICLE III.	YIELD PROTECTION; TAXES	41
3.1	Yield Protection	41
3.2	Changes in Capital Adequacy Regulations	42
3.3	Availability of Types of Advances	43
3.4	Funding Indemnification	43
3.5	Taxes	43
3.6	Lender Statements; Survival of Indemnity	45
3.7	Limitation/Delay in Requests	45
ARTICLE IV.	CONDITIONS PRECEDENT	46
4.1	Initial Credit Extension	46
4.2	Each Credit Extension	47
ARTICLE V.	REPRESENTATIONS AND WARRANTIES	47
5.1	Existence and Standing	47
5.2	Authorization and Validity	48
5.3	No Conflict; Government Consent; Other Consents	48
5.4	Financial Statements	48
5.5	Material Adverse Change	49
5.6	Taxes	49
5.7	Litigation and Contingent Obligations	49
5.8	Significant Subsidiaries; Subsidiary Borrowers	49
5.9	ERISA	51
5.10	Accuracy of Information	51
5.11	Regulation U	51
5.12	Maintenance of Property	52
5.13	Insurance	52
5.14	Plan Assets; Prohibited Transactions	52

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TABLE OF CONTENTS

(continued)

5.15	Environmental Matters	52
5.16	Investment Company Act	52
5.17	Default	52
5.18	Compliance with Laws	52
ARTICLE VI.	COVENANTS	53
6.1	Financial Reporting	53
6.2	Use of Proceeds; Margin Stock	54
6.3	Notice of Default	54
6.4	Conduct of Business; Maintenance of Property	55
6.5	Taxes	55
6.6	Insurance	55
6.7	Compliance with Laws	55
6.8	Inspection	55
6.9	Liens	56
6.10	Subsidiary Indebtedness	57
6.11	Contingent Obligations	58
6.12	Minimum Net Worth	59
ARTICLE VII.	DEFAULTS	59
ARTICLE VIII.	ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES	60
8.1	Acceleration; Facility LC Collateral Account	60
8.2	Amendments	61
8.3	Preservation of Rights	62
ARTICLE IX.	GENERAL PROVISIONS	63
9.1	Survival of Representations	63
9.2	Governmental Regulation	63
9.3	Headings	63
9.4	Entire Agreement	63
9.5	Several Obligations; Benefits of this Agreement	63
9.6	Expenses; Indemnity; Damage Waiver	63
9.7	Numbers of Documents	65
9.8	Accounting	66

-iii-

TABLE OF CONTENTS

(continued)

9.9	Severability of Provisions	66
9.10	No Advisory or Fiduciary Responsibility	66
9.11	Treatment of Certain Information; Confidentiality	67
9.12	USA Patriot Act	67
ARTICLE X.	THE AGENT	68
10.1	Appointment and Authority	68
10.2	Rights as a Lender	68
10.3	Exculpatory Provisions	68
10.4	Reliance by Administrative Agent	69
10.5	Delegation of Duties	69
10.6	Resignation of Administrative Agent	69
10.7	Non-Reliance on Administrative Agent and Other Lenders	70
10.8	No Other Duties, Etc	70
10.9	Administrative Agent May File Proofs of Claim	71
ARTICLE XI.	SETOFF; RATABLE PAYMENTS	71
11.1	Right of Setoff	71
11.2	Ratable Payments	72
ARTICLE XII.	BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS	72
12.1	Successors and Assigns	72
ARTICLE XIII.	NOTICES	75
13.1	Notices	75
13.2	Change of Address	76
13.3	The Platform	76
ARTICLE XIV.	COUNTERPARTS	76
ARTICLE XV.	CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	76
15.1	CHOICE OF LAW	76
15.2	CONSENT TO JURISDICTION	76
15.3	WAIVER OF JURY TRIAL	77

-iv-

TABLE OF CONTENTS

(continued)

Schedules
Schedule 1.1		Cost Rate Schedule
Schedule 2.1(a)		Commitments
Schedule 2.1(c)		Alternate Currency Commitment
Schedule 2.16		List of Authorized Persons under Section 2.16
Schedule 2.19		Lending Installations
Schedule 4		Pricing Schedule
Schedule 5.8		List of Subsidiaries and Subsidiary Borrowers
Schedule 13.1		Administrative Agent’s Office; Certain Addresses for Notices
Exhibits
Exhibit A	-	Opinions
Exhibit B	-	Form of Compliance Certificate
Exhibit C	-	Form of Assignment and Assumption Agreement
Exhibit D	-	Form of Loan/Credit Related Money Transfer Instruction
Exhibit E	-	Form of Note
Exhibit F	-	Form of Swingline Note
Exhibit G	-	Form of Guaranty

-v-

FIVE-YEAR CREDIT AGREEMENT

This Agreement, dated as of January 24, 2007, is among Cardinal Health, Inc., an Ohio corporation (the “Company”), certain Subsidiaries of the Company (the “Subsidiary Borrowers”, and together with the Company, the “Borrowers”), each lender party hereto from time to time (the “Lenders”) and Bank of America, N.A., as Administrative Agent, Swingline Lender and LC Issuer. Capitalized terms used herein shall have the meanings assigned to them in Article I.

WHEREAS, the Company has requested the terms and provisions of the Existing Credit Agreement be amended and restated in its entirety as provided in this Agreement.

WHEREAS, the Lenders hereto are willing to do so with the replacement facility set forth herein.

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties hereto, such parties hereby agree as follows:

ARTICLE I.

DEFINITIONS

1.1 Definitions.

As used in this Agreement:

“Additional Commitment Lender” is defined in Section 2.28(d).

“Administrative Agent” means Bank of America, N.A., in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

“Administrative Agent’s Office” means, with respect to any currency, the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 13.1 with respect to such currency, or such other address or account with respect to such currency as the Administrative Agent may from time to time notify to the Company and the Lenders.

“Advance” means a borrowing hereunder, (i) made by one or more Lenders on the same Borrowing Date, or (ii) converted or continued by the Lenders on the same date of conversion or continuation, consisting, in either case, of the aggregate amount of the several Loans of the same Type and, in the case of Eurocurrency Loans, in the same Agreed Currency and for the same Interest Period. The term “Advance” shall include Swingline Loans unless otherwise expressly provided.

“Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise.

“Agent Parties” is defined in Section 13.3.

1

“Aggregate Commitment” means the aggregate of the Commitments of all the Lenders, as increased or reduced from time to time pursuant to the terms hereof. As of the date of this Agreement, the original Aggregate Commitment is $1,500,000,000.

“Aggregate Dollar Commitment” means at any date of determination with respect to all Lenders, an amount equal to the Dollar Commitments of all Lenders on such date. As of the date of this Agreement, the Aggregate Dollar Commitment is $1,250,000,000.

“Aggregate Dollar Outstanding Credit Exposure” means as at any date of determination with respect to any Lender, the sum of (i) aggregate unpaid principal amount of such Lender’s Dollar Loans on such date, plus (ii) an amount equal to its Pro Rata Share of the LC Obligations on such date, plus (iii) an amount equal to its Pro Rata Share of the aggregate principal amount of Swingline Loans outstanding on such date.

“Aggregate Multicurrency Commitments” means at any date of determination with respect to all Multicurrency Lenders, an amount equal to the Multicurrency Commitments of all Multicurrency Lenders on such date, provided, however, that the Aggregate Multicurrency Commitments shall not exceed $250,000,000.

“Aggregate Multicurrency Outstanding Credit Exposure” means as at any date of determination with respect to any Lender, the Dollar Amount of the aggregate unpaid principal amount of such Lender’s Multicurrency Loans and Alternate Currency Loans on such date.

“Aggregate Outstanding Credit Exposure” means as at any date of determination with respect to any Lender, the sum of such Lender’s Aggregate Dollar Outstanding Credit Exposure and Aggregate Multicurrency Outstanding Credit Exposure on such date.

“Agreed Currencies” means (i) Dollars, and (ii) so long as such currencies remain Eligible Currencies, (A) with respect to any Multicurrency Commitment, the Euro and British Pounds Sterling, (B) with respect to any Alternate Currency Commitment, any Alternate Currency and (C) with respect to the Swingline Sublimit, U.S. Dollars unless the Swingline Lender in its sole discretion agrees to make available, Euros, Australian Dollars, Canadian Dollars or any other Eligible Currency.

“Agreement” means this credit agreement, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time.

“Agreement Accounting Principles” means generally accepted accounting principles in the United States of America in effect from time to time, applied in a manner consistent with that used in preparing the financial statements referred to in Section 5.4; provided, however, that if any change in Agreement Accounting Principles from those applied in preparing such financial statements affects the calculation of any financial covenant contained in this Agreement, the Borrowers and the Administrative Agent hereby agree to negotiate in good faith towards making appropriate amendments acceptable to the Required Lenders to the provisions of this Agreement to reflect as nearly as possible the effect of the financial covenants as in effect on the date hereof.

“Alternate Currency” means any Eligible Currency which the Company requests the Administrative Agent to include as an Alternate Currency hereunder and which is acceptable to one or more of the applicable Alternate Currency Lenders, and with respect to which an Alternate Currency Addendum has been executed among the Company, a Subsidiary Borrower, one or more Alternate Currency Lenders and the Administrative Agent in connection therewith.

2

“Alternate Currency Addendum” means a schedule and addendum entered into among the Company, a Subsidiary Borrower, one or more Alternate Currency Lenders and the Administrative Agent, in form and substance satisfactory to the Administrative Agent, the Company, such Subsidiary Borrower and such Alternate Currency Lenders party thereto.

“Alternate Currency Commitment” means a portion of the Multicurrency Commitment equal to, for each Alternate Currency Lender and for each Alternate Currency, the obligation of such Alternate Currency Lender to make Alternate Currency Loans not exceeding the Dollar Amount set forth in Schedule 2.1(c) or the applicable Alternate Currency Addendum, as such amount may be modified from time to time pursuant to the terms of this Agreement and the applicable Alternate Currency Addendum.

“Alternate Currency Lender” means any Lender (including any Lending Installation) party to an Alternate Currency Addendum.

“Alternate Currency Loan” means any Loan denominated in an Alternate Currency made by one or more of the Alternate Currency Lenders to a Borrower pursuant to this Agreement and the applicable Alternate Currency Addendum.

“Alternate Currency Share” means, with respect to any Alternate Currency Lender for any particular Alternate Currency, the percentage obtained by dividing (a) such Alternate Currency Lender’s Alternate Currency Commitment at such time as set forth in the applicable Alternate Currency Addendum by (b) the aggregate of the Alternate Currency Commitments at such time of all Alternate Currency Lenders with respect to such Alternate Currency as set forth in the applicable Alternate Currency Addendum.

“Applicable Fee Rate” means, at any time, the percentage rate per annum at which Facility Fees are accruing on the Aggregate Commitment (without regard to usage) at such time as set forth in the Pricing Schedule.

“Applicable Foreign Subsidiary Borrower Documents” is defined in Section 5.8(b).

“Applicable Margin” means, with respect to any Eurocurrency Loan, Floating Rate Loan, the Facility Fee or the LC Fee, as the case may be at any time, the applicable percentage which is applicable at such time set forth in the Pricing Schedule, provided that upon the occurrence and during the continuation of a Default, the Applicable Margin shall be the highest Applicable Margin set forth in the Pricing Schedule.

“Applicable Time” means, with respect to any borrowings and payments in any Agreed Currency, the local time in the place of settlement of such Agreed Currency as may be determined by the Administrative Agent or the Swingline Lender, as applicable, to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Article” means an article of this Agreement unless another document is specifically referenced.

“Assignment Agreement” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 12.1(b)), and

3

accepted by the Administrative Agent, in substantially the form of Exhibit C or any other form approved by the Administrative Agent.

“Australian Dollars” or “AUS$” shall mean the lawful currency of the Commonwealth of Australia.

“Authorized Officer” means any of the Chairman, Chief Executive Officer, President, Vice Chairman, Chief Financial Officer, Controller, or Treasurer of a Borrower, or their equivalent, acting singly. Any document delivered hereunder that is signed by an Authorized Officer of a Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Borrower and such Authorized Officer shall be conclusively presumed to have acted on behalf of such Borrower.

“Available Dollar Commitment” means at any date of determination with respect to any Lender, the amount of such Lender’s Dollar Commitment in effect on such date reduced by the Aggregate Dollar Outstanding Credit Exposure of such Lender on such date.

“Available Multicurrency Commitment” means at any date of determination with respect to any Multicurrency Lender, the amount of such Multicurrency Lender’s Multicurrency Commitment in effect on such date reduced by the sum of (i) the Dollar Amount of any unused Alternate Currency Commitment of such Multicurrency Lender on such date, and (ii) the Aggregate Multicurrency Outstanding Credit Exposure of such Multicurrency Lender on such date.

“Bank of America” means Bank of America, N.A. and its successors.

“Banc of America Securities” means Banc of America Securities LLC and its successors.

“Barclays Capital” means Barclays Capital, the investment banking division of Barclays Bank PLC, and its successors.

“Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus  ¹/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “Prime Rate.”

“Borrower Materials” is defined in the final paragraph of Section 6.1(d).

“Borrowers” means the Company and the Subsidiary Borrowers, and “Borrower” means any of them, as the context may require.

“Borrowing Date” means a date on which an Advance is made hereunder.

“Borrowing Notice” is defined in Section 2.9.

“British Pounds Sterling” or “£” means the lawful currency of the United Kingdom of Great Britain.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office with respect to Obligations denominated in Dollars is located and:

4

(a) if such day relates to any interest rate settings as to a Eurocurrency Loan denominated in Dollars, any fundings, disbursements, settlements and payments in Dollars in respect of any such Eurocurrency Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market;

(b) if such day relates to any interest rate settings as to a Eurocurrency Loan denominated in Euro, any fundings, disbursements, settlements and payments in Euro in respect of any such Eurocurrency Loan, or any other dealings in Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Loan, means a TARGET Day;

(c) if such day relates to any interest rate settings as to a Eurocurrency Loan denominated in a currency other than Dollars or Euro, means any such day on which dealings in deposits in the relevant currency are conducted by and between banks in the London or other applicable offshore interbank market for such currency; and

(d) if such day relates to any fundings, disbursements, settlements and payments in a currency other than Dollars or Euro in respect of a Eurocurrency Loan denominated in a currency other than Dollars or Euro, or any other dealings in any currency other than Dollars or Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Loan (other than any interest rate settings), means any such day on which banks are open for foreign exchange business in the principal financial center of the country of such currency.

“Canadian Dollars” or “C$” shall mean the lawful currency of the Dominion of Canada.

“Capitalized Lease” of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.

“Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.

“Change in Control” means an event or series of events by which any Person, or two or more Persons acting in concert, obtain beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock of the Company; provided, however, that the acquisitions by or on behalf of a Plan, an employee stock purchase plan of the Company, or by Persons who before the date of this Agreement were officers, directors, employees or who held in the aggregate not less than 5% of the outstanding shares of voting stock of the Company shall not be included in determining whether a Change in Control shall have occurred.

“Closing Date” means the date upon which all of the conditions precedent set forth in Article IV have been met to the satisfaction of the Administrative Agent and each of the Lenders in their reasonable discretion or waived in accordance with the terms hereof.

“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.

5

“Collateral Shortfall Amount” is defined in Section 8.1.

“Commitment” means, for each Lender, the obligation of such Lender to make Loans to, and participate in Swingline Loans and Facility LCs issued upon the application of, one or more Borrowers in an aggregate amount not exceeding the amount set forth on Schedule 2.1(a) or as set forth in the Assignment Agreement to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Commitment Percentage” means as to any Lender, the percentage which such Lender’s Commitment then constitutes of the Aggregate Commitment (or, if the Commitments have terminated or expired, the percentage which (a) the Aggregate Outstanding Credit Exposure of such Lender at such time constitutes of (b) the Aggregate Outstanding Credit Exposure of all Lenders at such time).

“Company” has the meaning specified in the introductory paragraph hereto.

“Compliance Certificate” means a certificate substantially in the form of Exhibit B hereto.

“Computation Date” is defined in Section 2.3.

“Consolidated” or “consolidated” means, when used with reference to any financial term in this Agreement, the aggregate for two or more Persons of the amounts signified by such term for all such Persons determined on a consolidated basis in accordance with Agreement Accounting Principles.

“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person for Indebtedness, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract, operating lease, securitization transaction or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership; provided, however, that any assumption, guaranty, endorsement or undertaking with respect to any liability of any of its Subsidiaries to any other of its Subsidiaries shall not be a Contingent Obligation of the Company.

“Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Company or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.

“Conversion/Continuation Notice” is defined in Section 2.10(b).

“Cost Rate” means the cost of compliance with existing requirements of the Bank of England and/or the Financial Services Authority (or any authority which replaces all or any of their functions) or the requirements of the European Central Bank, in each case to be calculated in accordance with the Cost Rate Schedule attached hereto as Schedule 1.1.

“Credit Extension” means the making of an Advance or the issuance of a Facility LC hereunder.

“Credit Extension Date” means the Borrowing Date for an Advance or the issuance date for a Facility LC.

“Default” means an event described in Article VII.

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“Defaulting Lender” means any Lender that (a) on any Borrowing Date fails to make available to the Administrative Agent such Lender’s Loans required to be made to a Borrower on such Borrowing Date or any payment required to be made pursuant to Section 2.1(a)(iv), (b) shall not have made a payment to the Swingline Lender pursuant to Section 2.1(b)(iii), (c) shall not have made a payment to the LC Issuer pursuant to Section 2.21.5, (d) has otherwise failed to pay over to the Administrative Agent or any other Lender any amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of a good faith dispute or unless the failure has been cured, or (e) has been deemed insolvent or become the subject of a conservatorship, receivership, bankruptcy or insolvency proceeding. Once a Lender becomes a Defaulting Lender, such Lender shall continue as a Defaulting Lender until such time as such Defaulting Lender makes available to the Administrative Agent the amount of such Defaulting Lender’s Loans together with all other amounts required to be paid to the Administrative Agent, the Swingline Lender or any other Lender pursuant to this Agreement.

“Documentation Agent” means Deutsche Bank Securities Inc. and Morgan Stanley Bank, each in its capacity as a Documentation Agent or any successor documentation agent.

“Dollar Advance” means a borrowing hereunder (or continuation or a conversion thereof) consisting of the several Dollar Loans made on the same Borrowing Date (or date of conversion or continuation) by the Lenders to a Borrower of the same Type and for the same Interest Period.

“Dollar Amount” of any currency at any date shall mean (i) the amount of such currency if such currency is Dollars or (ii) the equivalent in Dollars of the amount of such currency, if such currency is any currency other than Dollars, as determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Computation Date) for the purchase of Dollars with such currency.

“Dollar Commitment” means for each Lender the aggregate amount set forth opposite its name on Schedule 2.1(a) or as set forth in any assignment that has become effective pursuant to Section 12.1, as such amount shall be modified from time to time pursuant to the terms hereof.

“Dollar Commitment Percentage” means as to any Lender, the percentage which such Lender’s Dollar Commitment then constitutes of the aggregate Dollar Commitments of all Lenders (or, if the Commitments have terminated or expired, the percentage which (a) the Aggregate Dollar Outstanding Credit Exposure of such Lender at such time constitutes of (b) the Aggregate Dollar Outstanding Credit Exposure of all Lenders at such time).

“Dollar Loans” means, with respect to a Lender, such Lender’s Loans made pursuant to Section 2.1(a)(i).

“Dollars” and “$” shall mean the lawful currency of the United States of America.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 12.1(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 12.1(b)(iii).

“Eligible Currency” means any currency (i) that is readily available, (ii) that is freely traded, (iii) in which deposits are customarily offered to banks in the London interbank market, (iv) which is convertible into Dollars in the international interbank market and (v) as to which an Equivalent Amount may be readily calculated. If, after the designation of any currency as an Agreed Currency, (x) currency control or other exchange regulations are imposed in the country in which such currency is issued with

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the result that different types of such currency are introduced, (y) such currency is, in the determination of the Administrative Agent, no longer readily available or freely traded or (z) in the determination of the Administrative Agent, an Equivalent Amount of such currency is not readily calculable, the Administrative Agent shall promptly notify the Lenders and the Borrowers, and such currency shall no longer be an Agreed Currency until such time as the requisite Lenders agree to reinstate such currency as an Agreed Currency and promptly, but in any event within five (5) Business Days of receipt of such notice from the Administrative Agent, the Borrowers shall repay all Loans in such affected currency or convert such Loans into Loans in Dollars or another Agreed Currency, subject to the other terms set forth in Article II.

“EMU Legislation” means legislative measures of the European Union for the introduction of, changeover to or operation of the Euro in one or more member states.

“Environmental Laws” means any and all Laws, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to (i) the protection of the environment, (ii) the effect of the environment on human health, (iii) emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water or land, or (iv) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or other remediation thereof.

“Equivalent Amount” of any currency with respect to any amount of Dollars at any date shall mean the equivalent in such currency of such amount of Dollars, as determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Computation Date) for the purchase of such currency with Dollars.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder.

“Euro” and/or “EUR” means the single currency to which the Participating Member States of the European Union have converted.

“Eurocurrency” means any Agreed Currency.

“Eurocurrency Advance” means an Advance comprised of Eurocurrency Loans.

“Eurocurrency Base Rate” means for any Interest Period with respect to a Eurocurrency Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurocurrency Base Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in the relevant currency for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurocurrency Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch (or other Bank of America branch or Affiliate) to major banks in the London or other offshore interbank market for such currency at their request at approximately 11:00 a.m. (London time) two (2) Business Days prior to the commencement of such Interest Period.

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“Eurocurrency Loan” means a Loan which, except as otherwise provided in Section 2.13, bears interest at the applicable Eurocurrency Rate.

“Eurocurrency Rate” means, with respect to a Eurocurrency Advance for the relevant Interest Period, the sum of (i) the quotient of (a) the Eurocurrency Base Rate applicable to such Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (ii) the Applicable Margin plus (iii) in the case of a Eurocurrency Loan of any Lender which is lent from a Lending Installation in the United Kingdom or a Participating Member State, the Cost Rate. The Eurocurrency Rate shall be expressed as a percentage rounded to five decimal places.

“Excluded Taxes” means, in the case of each Lender or applicable Lending Installation, the LC Issuer and the Administrative Agent, taxes imposed on its overall net income and franchise taxes (and any interest, fees or penalties for late payment thereof) imposed on it by (i) the jurisdiction under the Laws of which such Lender, the LC Issuer or the Administrative Agent is incorporated or organized or (ii) the jurisdiction in which the Administrative Agent’s, the LC Issuer’s or such Lender’s principal executive office or such Lender’s applicable Lending Installation is located.

“Exhibit” refers to an exhibit to this Agreement, unless another document is specifically referenced.

“Existing Credit Agreement” means the Five-Year Credit Agreement dated as of November 18, 2005 (as amended, restated, supplemented or otherwise modified) by and among the Borrowers, the lenders party thereto and Wachovia Bank, National Association, as administrative agent and certain other agents thereto.

“Existing Termination Date” is defined in Section 2.28(a).

“Existing Facility LCs” means the collective reference to the following Letters of Credit issued by Wachovia under the Existing Credit Agreement:

Issuance Date	Issuance Number	Amount	Beneficiary	Expiration Date
08/25/04	SM209771W	399,322.92	BT Wayne, LLC	8/25/07
06/30/04	SM209549W	2,088,547.19	Township of Logan, Municipal Building	6/30/07
07/31/04	SM207752W	83,000.00	Travelers Ins Co.	7/31/07
04/30/04	SM208002W	20,000,000.00	United States Fidelity and Guaranty Company	4/30/07
04/30/04	SM208004W	1,489,000.00	Royal Indemnity Company	4/30/07
06/24/04	SM208672W	908,000.00	Lumberman’s Mutual Casualty Co.	6/24/07
06/24/04	SM208673W	11,285,000.00	Lumberman’s Mutual Casualty Co.	6/24/07
06/17/04	SM208711W	8,520.00	National Union Fire Insurance Co.	6/17/07
05/26/06	SM220133W	35,443,389.00	XL Specialty Insurance Company & Greenwich Insurance Company	5/26/07

“Extending Lender” is defined in Section 2.28(b).

“Extension Date” is defined in Section 2.28.

“Facility LC” is defined in Section 2.21.1.

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“Facility LC Application” is defined in Section 2.21.3.

“Facility LC Collateral Account” is defined in Section 2.21.11.

“Facility Termination Date” means the first to occur of (a) the later of (i) January 23, 2012 and (ii) if the maturity is extended pursuant to Section 2.28, such extended maturity date determined pursuant to that Section, and (b) the date the Commitments or this Agreement are earlier cancelled or terminated pursuant to the terms hereof; provided, however, with respect to any Non-Replaced Lender, “Facility Termination Date” shall mean the first to occur of (x) the later of (i) January 23, 2012 and (ii) only if such Non-Replaced Lender extended the maturity of its commitments for one year pursuant to such Section 2.28, such extended maturity date determined pursuant to such Section, and (y) the date the Commitments or this Agreement are earlier cancelled or terminated pursuant to the terms of this Agreement. Unless otherwise specified in this Agreement, Facility Termination Date means the Facility Termination Date applicable to a Lender, Swingline Lender or LC Issuer.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

“Fee Letter” means the fee letter agreement dated as of December 15, 2006, among the Company, Bank of America and Banc of America Securities.

“Fitch” means Fitch, Inc.

“Floating Rate” means, for any day, a rate per annum equal to the Base Rate for such day in each case changing when and as the Base Rate changes.

“Floating Rate Advance” means an Advance comprised of Floating Rate Loans.

“Floating Rate Loan” means a Dollar Loan which, except as otherwise provided in Section 2.12, bears interest at the Floating Rate.

“Foreign Subsidiary Borrower” is defined in Section 5.8(b).

“Forward-Looking Statement” is defined in Section 5.10.

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

“Guarantor” means the Company.

“Guaranty” means that certain Guaranty dated the date hereof executed by the Guarantor in favor of the Administrative Agent, for the ratable benefit of the Lenders, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time.

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“Indebtedness” of a Person means, as of any date, such Person’s (i) obligations for borrowed money or evidenced by bonds, notes, acceptances, debentures or similar instruments or Letters of Credit (or reimbursement agreements in respect thereof) or bankers’ acceptances, (ii) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person’s business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (iv) obligations of such Person to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property, (v) Capitalized Lease Obligations, (vi) any other obligation for borrowed money or other financial accommodation which in accordance with Agreement Accounting Principles would be shown as a liability on the consolidated balance sheet of such Person, (vii) any Rate Hedging Obligations of such Person, and (viii) all Contingent Obligations of such Person with respect to or relating to the indebtedness, obligations and liabilities of others as described in clauses (i) through (vii) of this definition.

“Indemnitee” is defined in Section 9.6(b).

“Information” is defined Section 9.11.

“Interest Period” means, with respect to a Eurocurrency Advance, a period of one, two, three or six months (or such longer or shorter period requested by a Borrower and agreed to by all of the Lenders), commencing on a Business Day selected by such Borrower pursuant to this Agreement. Such Interest Period shall end on the day which corresponds numerically to such date one, two, three or six months thereafter (or such longer or shorter period requested by such Borrower and agreed to by all of the Lenders); provided, however, that if there is no such numerically corresponding day in such next, second, third or sixth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third or sixth succeeding month. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided, however, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day. No Interest Period specified by a Borrower in a Borrowing Notice or a Conversion/Continuation Notice shall extend beyond the earliest Facility Termination Date in effect on any given date.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

“JPMorgan Chase Bank” means JPMorgan Chase Bank, N.A. in its individual capacity, and its successors.

“JPMSI” means J.P. Morgan Securities Inc. in its individual capacity, and its successors.

“Law” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive orders or administrative or judicial precedents or authorities, including the interpretation or administration thereof by any governmental authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any governmental authority, in each case whether or not having the force of Law.

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“LC Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed by the Company on the LC Payment Date or refinanced as a borrowing hereunder.

“LC Fee” is defined in Section 2.21.4.

“LC Issuer” means Bank of America in its capacity as issuer of Facility LCs hereunder, or any successor issuer of Letters of Credit hereunder, and Wachovia in its capacity as issuer of the Existing Facility LCs.

“LC Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Reimbursement Obligations, including all LC Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.5. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“LC Payment Date” is defined in Section 2.21.5.

“Lead Arrangers” means Banc of America Securities, JPMSI, and Barclays Capital and their respective successors and assigns in their capacities as joint lead arrangers and book managers.

“Lenders” means the lending institutions listed on the signature pages of this Agreement and their respective successors and assigns.

“Lending Installation” means, with respect to a Lender, the office, branch, subsidiary or Affiliate of such Lender with respect to each Agreed Currency listed on Schedule 2.19, or otherwise selected by such Lender pursuant to Section 2.19.

“Letter of Credit” of a Person means any letter of credit issued hereunder and shall include the Existing Letters of Credit. A letter of credit may be a commercial letter of credit or a standby letter of credit.

“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement).

“Loan” means, with respect to a Lender, such Lender’s loan made pursuant to Article II (or any conversion or continuation thereof).

“Loan Documents” means this Agreement, the Facility LC Applications, the Notes, the Guaranty, the Fee Letter and any other instrument or document executed in connection with any of the foregoing at any time (but excluding Rate Hedging Agreements).

“Material Adverse Effect” means a material adverse effect on (i) the condition (financial or otherwise) or results of operations of the Company and its Subsidiaries taken as a whole, (ii) the ability of the Company to perform its obligations under the Loan Documents to which it is a party, or (iii) the

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validity or enforceability of any of the Loan Documents or the rights or remedies of the Administrative Agent, the LC Issuer or the Lenders thereunder.

“Material Plan” as defined in Section 7.10.

“Modify” and “Modification” are defined in Section 2.21.1.

“Moody’s” means Moody’s Investors Service, Inc.

“Multicurrency Advance” means a borrowing hereunder (or continuation or a conversion thereof) consisting of the several Multicurrency Loans made on the same Borrowing Date (or date of conversion or continuation) by the Lenders to a Borrower of the same Type and for the same Interest Period.

“Multicurrency Commitment” means for each Lender the aggregate amount set forth as its Multicurrency Commitment on Schedule 2.1(a) or as set forth in any assignment that has become effective pursuant to Section 12.1, as such amount shall be modified from time to time pursuant to the terms hereof.

“Multicurrency Commitment Percentage” means as to any Multicurrency Lender, the percentage which such Multicurrency Lender’s Multicurrency Commitment then constitutes of the Aggregate Multicurrency Commitments (or, if the Multicurrency Commitments have terminated or expired, the percentage which (a) the Aggregate Multicurrency Outstanding Credit Exposure of such Multicurrency Lender at such time constitutes of (b) the Aggregate Multicurrency Outstanding Credit Exposure of all Multicurrency Lenders at such time).

“Multicurrency Lender” means each Lender having a Multicurrency Commitment.

“Multicurrency Loans” means, with respect to a Multicurrency Lender, such Lender’s Loans made pursuant to Section 2.1(a)(ii).

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Company is a party to which more than one employer is obligated to make contributions.

“Net Worth” means, as of any date of determination, the consolidated stockholder’s equity of the Company and its Subsidiaries calculated on a consolidated basis in accordance with Agreement Accounting Principles.

“Non-Extending Lender” is defined in Section 2.28(b).

“Non-Replaced Lender” is defined in Section 2.28(e).

“Non-U.S. Borrower” is defined in Section 3.1(b).

“Non-U.S. Lender” is defined in Section 3.5(d).

“Note” means any promissory note issued at the request of a Lender pursuant to Section 2.15 substantially in the form of Exhibit E.

“Notice Date” is defined in Section 2.28(b).

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“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all Reimbursement Obligations, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations (including any Rate Hedging Obligations) of the Borrowers to the Lenders or to any Lender, the LC Issuer, the Administrative Agent or any Indemnitee arising under the Loan Documents.

“OECD” means the Organization for Economic Cooperation and Development and any successor thereto.

“OFAC” is defined in Section 9.6(b).

“Other Taxes” is defined in Section 3.5(b).

“Overdue Rate” means a per annum rate that is equal to the sum of two percent (2%) plus the Base Rate, changing as and when the Base Rate changes or, with respect to any Alternate Currency Loan, such other overdue rate, if any, as specified in the applicable Alternate Currency Addendum.

“Overnight Rate” means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent or the Swingline Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in an Agreed Currency, the rate of interest per annum at which overnight deposits in the applicable Agreed Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of Bank of America in the applicable offshore interbank market for such currency to major banks in such interbank market.

“Participant” is defined in Section 12.1(d).

“Participating Member State” means any member state of the European Union which has the Euro as its lawful currency.

“Payment Date” means the last Business Day of each calendar quarter, commencing March 30, 2007.

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

“Person” means any natural person, corporation, firm, joint venture, partnership, limited liability company, association, enterprise, trust or other entity or organization, or any government or political subdivision or any agency, department or instrumentality thereof.

“Plan” means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and as to which the Company or any member of the Controlled Group may have any liability.

“Platform” is defined in the final paragraph of Section 6.1(d).

“Pricing Schedule” means Schedule 4 attached hereto identified as such.

“Prime Rate” means a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.

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Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned or leased by such Person.

“Pro Rata Share” means, with respect to a Lender, (i) in reference to the Dollar Commitment, a portion equal to a fraction the numerator of which is such Lender’s Dollar Commitment and the denominator of which is the Aggregate Dollar Commitment, (ii) in reference to the Multicurrency Commitment, a portion equal to a fraction the numerator of which is such Lender’s Multicurrency Commitment and the denominator of which is the Aggregate Multicurrency Commitment, and (iii) in reference to the Aggregate Commitment, a portion equal to a fraction the numerator of which is such Lender’s Commitment and the denominator of which is the Aggregate Commitment.

“Public Lender” has the meaning set forth in the final paragraph of Section 6.1(d).

“Rate Hedging Agreement” means an agreement, device or arrangement providing for payments which are related to fluctuations of interest rates, exchange rates, commodity prices or forward rates, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants.

“Rate Hedging Obligations” of a Person means any and all obligations of such Person, whether absolute or contingent and however and whenever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Rate Hedging Agreements, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Rate Hedging Agreement.

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System.

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System.

“Reimbursement Obligations” means, at any time, the aggregate of all obligations of the Borrowers then outstanding under Section 2.21 to reimburse the LC Issuer for amounts paid by the LC Issuer in respect of any one or more drawings under Facility LCs.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event; provided, however, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event

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regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.

“Required Lenders” means Lenders in the aggregate holding at least 51% of the Aggregate Commitment or, if the Commitment of each Lender to make Loans and the obligation of the LC Issuer to make LC Borrowings have been terminated, as of any date of determination, Lenders in the aggregate holding at least 51% of the Aggregate Outstanding Credit Exposure (with the aggregate amount of each Lender’s risk participation and funded participation in LC Obligations and Swingline Loans being deemed “held” by such Lender for purposes of this definition); provided that the Commitment of, and the portion of the Aggregate Outstanding Credit Exposure held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“Requisite Lenders” means Lenders in the aggregate holding at least 66 2/3% of the Aggregate Commitment or, if the Commitment of each Lender to make Loans and the obligation of the LC Issuer to make LC Borrowings have been terminated, as of any date of determination, Lenders in the aggregate holding at least 66 2/3% of the Aggregate Outstanding Credit Exposure (with the aggregate amount of each Lender’s risk participation and funded participation in LC Obligations and Swingline Loans being deemed “held” by such Lender for purposes of this definition); provided that the Commitment of, and the portion of the Aggregate Outstanding Credit Exposure held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Requisite Lenders.

“Reserve Requirement” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Board of Governors of the Federal Reserve System of the United States for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Eurocurrency Rate for each outstanding Eurocurrency Loan shall be adjusted automatically as of the effective date of any change in the Reserve Requirement.

“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.

“Same Day Funds” means (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) with respect to disbursements and payments in an Agreed Currency, same day or other funds as may be determined by the Administrative Agent or the Swingline Lender, as applicable, to be customary in the place of disbursement or payment for the settlement of international banking transactions in the relevant Agreed Currency.

“Schedule” refers to a specific schedule to this Agreement, unless another document is specifically referenced.

“Section” means a numbered section of this Agreement, unless another document is specifically referenced.

“Significant Subsidiary” means any Subsidiary of the Company that would be a “significant subsidiary” within the meaning of Rule 1-02 of the Securities and Exchange Commission’s Regulation S-X.

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“Single Employer Plan” means a Plan maintained by the Company or any member of the Controlled Group for employees of the Company or any member of the Controlled Group.

“Specified Currency” is defined in Section 2.23.

“Spot Rate” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two (2) Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent or the Swingline Lender, as applicable, may obtain such spot rate from another financial institution designated by the Administrative Agent or the Swingline Lender, as applicable, if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

“Subsequent Participant” means any member state of the European Union that adopts the Euro as its lawful currency after the date of this Agreement.

“Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability company, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of the Company.

“Subsidiary Borrower” means each Subsidiary of the Company listed as a Subsidiary Borrower on Schedule 5.8 as amended from time to time in accordance with Section 5.8.

“Substantial Portion” means, with respect to the Property of the Company and its Subsidiaries, Property which (i) represents more than 20% of the consolidated assets of the Company and its Subsidiaries as would be shown in the consolidated financial statements of the Company and its Subsidiaries as at the beginning of the twelve-month period ending with the month in which such determination is made, or (ii) is responsible for more than 20% of the consolidated revenues or of the consolidated net earnings of the Company and its Subsidiaries as reflected in the financial statements referred to in clause (i) above.

“Swingline Sublimit” means an amount equal to the lesser of (a) $100,000,000 in Dollars, unless the Swingline Lender in its sole discretion agrees to other Agreed Currencies and (b) the Aggregate Commitment. The Swingline Sublimit is part of, and not in addition to, the Aggregate Commitment.

“Swingline Lender” means Bank of America in its capacity as provider of the Swingline Loans, or any successor Swingline Lender hereunder.

“Swingline Loan” means any borrowing under Section 2.9 made by the Swingline Lender pursuant to Section 2.1(b).

“Swingline Note” means a promissory note of the Company evidencing the Swingline Loans (if requested by the Swingline Lender), in substantially the same form as Exhibit F hereto, as amended or modified at the time such Swingline Loan is made to the Company.

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“Syndication Agents” means JPMorgan Chase Bank and Barclays, each in its capacity as a Syndication Agent.

“TARGET Day” means any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.

“Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, charges, or withholdings, and any and all liabilities with respect to the foregoing, but excluding Excluded Taxes.

“Type” means, with respect to any Advance, its nature as a Floating Rate Advance or a Eurocurrency Advance.

“Unfunded Liabilities” means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations.

“Unmatured Default” means an event which but for the lapse of time or the giving of notice, or both, would constitute a Default.

“Wachovia” means Wachovia Bank, National Association, a national banking association, and its successors.

1.2 Other Definitions and Provisions.

(a) With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined, (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms, (c) the words “include”, “includes”, and “including” shall be deemed to be followed by the phrase “without limitation”, (d) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (e) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (f) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (g) the words “herein”, “hereof”, and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (h) all references herein to Articles, Sections, Exhibits and Schedules can be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (i) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (j) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form, (k) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including”, and (l) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

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(b) Each reference to “basis points” or “bps” shall be interpreted in accordance with the convention that 100 bps = 1.0%.

1.3 References to Agreement and Laws.

Unless otherwise expressly provided herein, references to formation documents, governing documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document.

1.4 Times of Day.

Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

1.5 Letter of Credit Amounts.

Unless otherwise specified herein, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Letter of Credit Application therefor, whether or not such maximum face amount is in effect at such time.

1.6 Rounding.

Any financial ratios required to be maintained by any Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with 0.5 of a unit being rounded upward).

1.7 Exchange Rates; Currency Equivalents.

(a) The Administrative Agent or the Swingline Lender, as applicable, shall determine the Spot Rates as of each Computation Date to be used for calculating Dollar Amount of Credit Extensions and outstanding amounts denominated in Agreed Currencies. Such Spot Rates shall become effective as of such Computation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Computation Date to occur. Except for purposes of financial statements delivered by the Company hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Amount as so determined by the Administrative Agent or the Swingline Lender, as applicable.

(b) Wherever in this Agreement in connection with an Advance, conversion, continuation or prepayment of a Eurocurrency Loan, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Advance or Eurocurrency Loan is denominated in an Agreed Currency, such amount shall be the relevant Agreed Currency equivalent of such Dollar Amount (rounded to the nearest unit of such Agreed Currency, with 0.5 of a unit being rounded upward), as determined by the Administrative Agent.

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ARTICLE II.

THE CREDITS

2.1 Commitments of the Lenders; Swingline Facility.

(a) Revolving Credit Advances.

(i) From and including the date of this Agreement and prior to the Facility Termination Date, each Lender severally agrees, for itself only, subject to the terms and conditions set forth in this Agreement, to (A) make Loans to the Borrowers in Dollars from time to time and (B) participate in (1) Facility LCs denominated in Dollars issued upon the request of a Borrower and (2) Swingline Loans, in aggregate amounts not to exceed in the aggregate at any one time outstanding the amount of its Dollar Commitment. Each Dollar Advance of Loans pursuant to this Section 2.1(a)(i) shall consist of Dollar Loans made by each Lender ratably in proportion to such Lender’s respective Available Dollar Commitment divided by the aggregate Available Dollar Commitments of all Lenders at such time. The LC Issuer will issue Facility LCs hereunder on the terms and conditions set forth in Section 2.21.

(ii) From and including the date of this Agreement and prior to the Facility Termination Date, each Multicurrency Lender severally agrees, for itself only, subject to the terms and conditions set forth in this Agreement, to make Multicurrency Loans to the Borrowers in Agreed Currencies from time to time prior to the Facility Termination Date so long as after giving effect thereto and any concurrent repayment or prepayment of Loans (A) the Available Multicurrency Commitment of each Multicurrency Lender is greater than or equal to zero, (B) the Dollar Amount of the Aggregate Multicurrency Outstanding Credit Exposure of all Lenders does not exceed $250,000,000 and (C) the Aggregate Outstanding Credit Exposure of all Lenders does not exceed the Aggregate Commitment; provided, however, that the Borrowers shall not request, and the Multicurrency Lenders shall not make Multicurrency Loans in Dollars at any time that Available Dollar Commitment exists. Each Multicurrency Advance shall consist of Multicurrency Loans made by each Multicurrency Lender ratably in proportion to such Multicurrency Lender’s respective Available Multicurrency Commitment divided by the aggregate Available Multicurrency Commitments of all Multicurrency Lenders at such time.

(iii) Subject to the terms of this Agreement, the Borrowers may borrow, repay and reborrow at any time prior to the Facility Termination Date. The Commitments to lend hereunder shall expire on the Facility Termination Date.

(iv) Immediately and automatically upon the occurrence of a Default under Sections 7.2, 7.6 or 7.7, (A) each Lender shall be deemed to have unconditionally and irrevocably purchased from each Multicurrency Lender, without recourse or warranty, an undivided interest in and participation in each Multicurrency Loan ratably in accordance with such Lender’s Commitment Percentage, (B) immediately and automatically all Multicurrency Loans outstanding in Agreed Currencies other than Dollars shall be converted to and redenominated in Dollars equal to the Dollar Amount of each such Multicurrency Loan determined as of the date of such conversion, (C) each Multicurrency Lender shall be deemed to have unconditionally and irrevocably purchased from each Dollar Lender, without recourse or warranty, an undivided interest in and participation in each Dollar Loan ratably in accordance with such Multicurrency Lender’s Commitment Percentage. Each of the Lenders shall pay to the applicable Multicurrency Lender not later than two (2) Business Days following a request for payment from such Lender,

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in Dollars, an amount equal to the undivided interest in and participation in the Multicurrency Loan purchased by such Lender pursuant to this Section 2.1(a)(iv), and each of the Multicurrency Lenders shall pay to the applicable Dollar Lender not later than two (2) Business Days following a request for payment from such Lender, in Dollars, an amount equal to the undivided interest in and participation in the Dollar Loan purchased by such Multicurrency Lender pursuant to this Section 2.1(a)(iv), it being the intent of the Lenders that following such equalization payments, each Lender shall hold its Commitment Percentage of the Aggregate Outstanding Credit Exposure.

(b) Swingline Loans.

(i) Subject to the terms and conditions of this Agreement, the Swingline Lender agrees to make Swingline Loans to the Borrowers from time to time on any Business Day during the period from the date hereof to but excluding the Facility Termination Date in the aggregate principal outstanding amount not to exceed the Swingline Sublimit; provided that after giving effect to such Swingline Loan, the Dollar Amount of the Aggregate Outstanding Credit Exposure at any time shall not exceed the Aggregate Commitment, and provided further that at no time shall the Dollar Amount of the Aggregate Outstanding Credit Exposure of the Swingline Lender exceed the Aggregate Commitment of such Lender. Swingline Loans may be denominated in any Agreed Currency; provided that the Swingline Lender is only obligated to make Swingline Loans available in Dollars. The Swingline Lender may make Swingline Loans available in other Agreed Currencies in its sole discretion and if any such Swingline Loans are made available in other Agreed Currencies, such Swingline Loans shall be deemed to utilize the Swingline Lender’s Multicurrency Commitment. Each Lender’s Commitment shall be deemed utilized by an amount equal to such Lender’s Commitment Percentage of the Dollar Amount of each Swingline Loan for purposes of determining the amount of Loans required to be made by such Lender. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers may borrow under this Section 2.1(b), repay and reborrow at any time prior to the Facility Termination Date. All Swingline Loans shall bear interest at the Base Rate or such other rate as shall be agreed between the relevant Borrower and the Swingline Lender with respect to any Swingline Loan at the time such Swingline Loan is made. The Company shall repay each Swingline Loan on the earlier to occur of (i) the date ten (10) Business Days after such Swingline Loan is made, if requested by the Administrative Agent on behalf of the Swingline Lender, and (ii) the Facility Termination Date. If any Swingline Loan is not repaid by the relevant Borrower on the date when due, each Lender will make a Floating Rate Loan the proceeds of which will be used to repay the Swingline Loan as described in Section 2.1(b)(ii).

(ii) The Swingline Lender is making the Swingline Loans in reliance upon the agreements of the other Lenders set forth in this Section 2.1(b). The Swingline Lender may at any time in its sole and absolute discretion require that any Swingline Loan be refunded by a Floating Rate Advance from the Lenders, and upon written notice thereof by the Swingline Lender to the Administrative Agent, the Lenders and the relevant Borrower, such Borrower shall be deemed to have requested a Floating Rate Advance in an amount equal to the Dollar Amount of such Swingline Loan and such Floating Rate Advance shall be made to refund such Swingline Loan. Any Swingline Loan outstanding in an Agreed Currency other than Dollars, shall, upon the giving of such notice by the Swingline Lender, immediately and automatically be converted to and redenominated in Dollars equal to the Dollar Amount of each such Swingline Loan determined as of the date of such conversion. Each Lender shall be absolutely and unconditionally obligated to fund its Commitment Percentage of such Floating Rate Advance or, if applicable, to purchase a participation interest in the Swingline Loans pursuant to Section

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2.1(b)(iii) and such obligation shall not be affected by any circumstance, including, without limitation, (A) any setoff, counterclaim, recoupment, defense or other right which such Lender has or may have against the Administrative Agent or any Borrower or any of their respective Subsidiaries or anyone else for any reason whatsoever (including without limitation any failure to comply with the requirements of Section 4.2, other than the Swingline Lender making a Swingline Loan when it had actual knowledge of the existence of a Default); (B) the occurrence or continuance of a Default, subject to Section 2.1(b)(iii); (C) any adverse change in the condition (financial or otherwise) of the Company or any of its Subsidiaries; (D) any breach of this Agreement by any Borrower or any of their respective Subsidiaries or any other Lender; or (E) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing (including without limitation any Borrower’s failure to satisfy any conditions contained in Article IV or any other provision of this Agreement).

(iii) If as a result of the occurrence of a Default with respect to any Borrower pursuant to Article VII Floating Rate Loans may not be made by the Lenders as described in Section 2.1(b)(ii), then (A) each Borrower agrees that each Swingline Loan not paid pursuant to Section 2.1(b)(ii) shall bear interest, payable on demand by the Swingline Lender, at the Overdue Rate, (B) each Borrower agrees that each Swingline Loan outstanding in an Agreed Currency other than Dollars shall be immediately and automatically converted to and redenominated in Dollars equal to the Dollar Amount of each such Swingline Loan determined as of the date of such conversion, and (C) effective on the date each such Floating Rate Loan would otherwise have been made, each Lender severally agrees that it shall unconditionally and irrevocably, without regard to the occurrence of any Default, in lieu of deemed disbursement of loans, to the extent of such Lender’s Commitment, purchase a participation interest in the Swingline Loans by paying its Commitment Percentage thereof; provided, however, that no Lender shall be obligated to purchase such participation in a Swingline Loan made by the Swingline Lender when it had actual knowledge of the existence of a Default. Each Lender will immediately transfer to the Swingline Lender, in same day funds, the amount of its participation. Each Lender shall share based on its Commitment Percentage in any interest which accrues thereon and in all repayments thereof. If and to the extent that any Lender shall not have so made the amount of such participating interest available to the Swingline Lender, such Lender and the Borrowers severally agree to pay to the Swingline Lender forthwith on demand such amount together with interest thereon, for each day from the date of demand by the Swingline Lender until the date such amount is paid to the Swingline Lender, at (x) in the case of the Company, at the interest rate specified above and (y) in the case of such Lender, the Federal Funds Effective Rate.

(c) Alternate Currency Loans.

(i) Subject to the terms and conditions of this Agreement and the applicable Alternate Currency Addendum, from and including the later of the date of this Agreement and the date of execution of the applicable Alternate Currency Addendum and prior to the Facility Termination Date (unless an earlier termination date shall be specified in the applicable Alternate Currency Addendum), the Administrative Agent and the applicable Alternate Currency Lenders agree, on the terms and conditions set forth in this Agreement and in the applicable Alternate Currency Addendum, to make Alternate Currency Loans under such Alternate Currency Addendum to the applicable Borrower party to such Alternate Currency Addendum from time to time in the applicable Alternate Currency, in an amount not to exceed each such Alternate Currency Lender’s applicable Alternate Currency Commitment; provided, however, (i) at no time shall the outstanding principal amount of all Alternate Currency Loans exceed the Alternate Currency Commitment for such currency, (ii) at no time shall the Aggregate Multicurrency

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Outstanding Credit Exposure exceed the Aggregate Multicurrency Commitments, (iii) at no time shall the aggregate outstanding principal amount of the Alternate Currency Loans for any specific Alternate Currency exceed the amount specified as the maximum amount for such Alternate Currency in the applicable Alternate Currency Addendum and (iv) at no time shall the aggregate Alternate Currency Commitments exceed $50,000,000. The Dollar Amount of any Alternate Currency Commitment of an Alternate Currency Lender shall be deemed to utilize such Lender’s Multicurrency Commitment. Each Alternate Currency Loan shall consist of Alternate Currency Loans made by each applicable Alternate Currency Lender ratably in proportion to such Alternate Currency Lender’s respective Alternate Currency Share. Subject to the terms of this Agreement and the applicable Alternate Currency Addendum, the Borrowers may borrow, repay and reborrow Alternate Currency Loans at any time prior to the Facility Termination Date. On the Facility Termination Date, the outstanding principal balance of the Alternate Currency Loans shall be paid in full by the applicable Borrower and prior to the Facility Termination Date prepayments of the Alternate Currency Loans shall be made by the applicable Borrower if and to the extent required by this Agreement. Subject to the applicable Alternate Currency Addendum, each Alternate Currency Loan shall have a maturity of one, two, three or six months and bear interest at the Eurocurrency Rate for such period as if such Loan were a Eurocurrency Loan.

(ii) The Company may, by written notice to the Administrative Agent request the establishment of additional Alternate Currency Commitments in additional Alternate Currencies, provided the Dollar Amount of the Alternate Currency Commitment requested together with the Aggregate Multicurrency Outstanding Credit Exposure does not exceed the Aggregate Multicurrency Commitments (each such request, a “Request for a New Alternate Currency Facility”). The Administrative Agent will promptly forward to the Multicurrency Lenders any Request for a New Alternate Currency Facility received from the Company, provided each Lender shall be deemed not to have agreed to such request unless its written consent thereto has been received by the Administrative Agent within ten (10) Business Days from the date of such notification by the Administrative Agent to such Lender (or such shorter period as shall be specified by the Company in the Request for a New Alternate Currency Facility). In the event that one or more Multicurrency Lenders consent to such Request for a New Alternate Currency Facility and agree to make Alternate Currency Loans in such Alternate Currency in an amount not less than that requested by the Company, upon execution of the applicable Alternate Currency Addendum and the other documents, instruments and agreements required pursuant to this Agreement and such Alternate Currency Addendum, the Alternate Currency Loans with respect thereto may be made.

(iii) Except as otherwise required by applicable Law, in no event shall the Administrative Agent or Alternate Currency Lenders have the right to accelerate the Alternate Currency Loans outstanding under any Alternate Currency Addendum or to terminate their Alternate Currency Commitments (if any) thereunder to make Alternate Currency Loans prior to the stated termination date in respect thereof, except that such Administrative Agent and Alternate Currency Lenders shall, in each case, have such rights upon an acceleration of the Loans and a termination of the Commitments pursuant to Section 8.1.

(iv) Immediately and automatically upon the occurrence of a Default under Sections 7.2, 7.6 or 7.7, each Lender shall be deemed to have unconditionally and irrevocably purchased from each Alternate Currency Lender, without recourse or warranty, an undivided interest in and participation in each Alternate Currency Loan ratably in accordance with such Lender’s Commitment Percentage, and immediately and automatically all Alternate Currency Loans shall be converted to and redenominated in Dollars equal to the Dollar Amount of each such Alternate

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Currency Loan determined as of the date of such conversion. Each of the Lenders shall pay to the applicable Alternate Currency Lender not later than two (2) Business Days following a request for payment from such Lender, in Dollars, an amount equal to the undivided interest in and participation in the Alternate Currency Loan purchased by such Lender pursuant to this Section 2.1(c)(iv).

2.2 Optional Increase of the Commitments.

So long as no Default or Unmatured Default shall have occurred and be continuing and the other conditions set forth in Section 4.2 have been satisfied, at any time after the Closing Date, the Company shall have the right, in consultation with the Administrative Agent, from time to time and upon not less than fifteen (15) days prior written notice to the Administrative Agent, to increase the Aggregate Commitment; provided that:

(a) Each increase in the Aggregate Commitment shall be in an aggregate principal amount of at least $50,000,000 or a whole multiple of $10,000,000 in excess thereof up to a maximum total increase in the Aggregate Commitment of $500,000,000. Increases in the Aggregate Commitment pursuant to this Section 2.2 shall not increase or otherwise affect the Aggregate Multicurrency Commitment, the Swingline Sublimit or the Letter of Credit sublimit set forth in Section 2.21.1.

(b) Loans issued in respect of any increase in the Aggregate Commitment pursuant to this Section 2.2 will rank pari passu in right of payment and security with the other Loans issued hereunder and shall constitute and be part of the Obligations arising under this Agreement.

(c) (i) Each existing Lender shall have the right, but not the obligation, to commit to all or a portion of the proposed increase, (ii) the failure by any existing Lender to respond to a request for such increase shall be deemed to be a refusal of such request by such existing Lender and (iii) if the Administrative Agent does not receive sufficient commitments from the existing Lenders to fund the entire amount of the proposed increase, the Company may then solicit commitments from other banks, financial institutions or investment funds that are reasonably acceptable to both the Administrative Agent and the Company.

(d) Any increase in the Aggregate Commitment which is accomplished by increasing the Commitment of any Lender or Lenders who are at the time of such increase party to this Agreement (which Lender or Lenders shall consent to such increase in their sole and absolute discretion) shall be accomplished as follows: (i) this Agreement will be amended by the Borrowers, the Administrative Agent and each Lender whose Commitment is being increased (but notwithstanding Section 8.2, without any requirement that the consent of any other Lender be obtained) to reflect the revised Commitment and Commitment Percentage of each of the Lenders, (ii) the outstanding Credit Extensions will be reallocated on the effective date of such increase among the Lenders in accordance with their revised Commitment Percentages (and the Lenders agree to make all payments and adjustments necessary to effect the reallocation and the Borrowers shall indemnify each Lender for any loss or costs required pursuant to Section 3.4 in connection with such reallocation as if such reallocation were a repayment) and (iii) if requested by such Lender or Lenders, the Borrowers will deliver new Note(s) to the Lender or Lenders whose Commitment(s) is or are being increased reflecting the revised Commitment of such Lender(s).

(e) Any increase in the Aggregate Commitment which is accomplished by addition of a new Lender or Lenders under the Agreement shall be accomplished as follows: (i) each new Lender shall be an Eligible Assignee and shall be subject to the consent of the Administrative Agent and the Company, on behalf of itself and the Subsidiary Borrowers, which consents shall not be unreasonably

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withheld, (ii) this Agreement will be amended by the Borrowers, the Administrative Agent and each new Lender (but notwithstanding Section 8.2, without any requirement that the consent of any other Lender be obtained) to reflect the addition of each new Lender as a Lender hereunder and to reflect the revised Commitment and Commitment Percentages of each of the Lenders (including each new Lender), (iii) the outstanding Credit Extensions and Commitment Percentages will be reallocated on the effective date of such increase among the Lenders (including each new Lender) in accordance with their revised Commitment Percentages (and the Lenders (including each new Lender) agree to make all payments and adjustments necessary to effect the reallocation and the Borrowers shall indemnify each Lender for any loss or costs required pursuant to Section 3.4 in connection with such reallocation as if such reallocation were a repayment) and (iv) at the request of any new Lender, the Borrowers will deliver a Note to such new Lender.

(f) Prior to any increase to the Aggregate Commitment under this Section 2.2, the Borrowers and the Guarantor shall provide corporate resolutions (or the equivalent for non-corporate entities) authorizing and approving such increase and otherwise in form and substance satisfactory to the Administrative Agent.

2.3 Determination of Dollar Amounts; Termination.

(a) The Administrative Agent will determine the Dollar Amount of:

(i) each Advance as of the Borrowing Date or, if applicable, date of conversion/continuation of such Advance;

(ii) all outstanding Advances, LC Obligations and Alternate Currency Loans on and as of the last day of each Interest Period (but not less frequently than quarterly), on receipt of any notice from the Company as to the reduction of the Aggregate Commitment, and on any other Business Day elected by the Administrative Agent in its discretion or upon instruction by the Required Lenders; and

(iii) all outstanding Advances, LC Obligations and Alternate Currency Loans on each Business Day during which Aggregate Dollar Outstanding Credit Exposure of all Lenders exceeds $700,000,000 (or such ratable amount of any reduced Aggregate Dollar Commitment) or Aggregate Multicurrency Outstanding Credit Exposure exceeds $200,000,000 (or such ratable amount of any reduced Aggregate Multicurrency Commitments).

Each day upon or as of which the Administrative Agent determines Dollar Amounts as described in the preceding clauses (i), (ii) and (iii) is herein described as a “Computation Date” with respect to each Advance for which a Dollar Amount is determined on or as of such day.

(b) Any outstanding Advances together with any other unpaid Obligations then due and payable shall be paid in full by the Borrowers on the Facility Termination Date.

2.4 Ratable Loans.

Each Multicurrency Advance (which excludes Alternate Currency Loans) hereunder shall consist of Multicurrency Loans made from the several Multicurrency Lenders ratably in proportion to such Multicurrency Lenders’ respective Available Multicurrency Commitment divided by the aggregate Available Multicurrency Commitments of all Multicurrency Lenders at such time, and each Dollar

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Advance hereunder shall consist of Dollar Loans made from the Lenders ratably according to their Dollar Commitment Percentage.

2.5 Types of Advances.

The Advances may be Floating Rate Advances or Eurocurrency Advances, on the one hand, and Dollar Advances or Multicurrency Advances on the other hand, or a combination thereof, selected by the relevant Borrowers in accordance with Sections 2.9 and 2.10; provided, however, that a Floating Rate Advance must also be a Dollar Advance or a Multicurrency Advance denominated in Dollars, and provided that all Multicurrency Advances (other than Multicurrency Advances in Dollars) and all Alternate Currency Loans shall be Eurocurrency Advances.

2.6 Facility Fee; Other Fees; Reductions in Aggregate Commitment.

The Company agrees to pay to the Administrative Agent for the account of each Lender a facility fee in Dollars, determined in accordance with the Pricing Schedule, calculated on the actual daily amount of the Aggregate Commitment, whether used or unused, payable quarterly in arrears for the ratable benefit of the Lenders on the last Business Day of each calendar quarter. The facility fee shall accrue from the date of this Agreement until the Facility Termination Date. The Company shall pay to the Lead Arrangers and the Administrative Agent fees in the amounts and at the times specified in the Fee Letter. The Company shall pay to the Lenders, in Dollars, such fees as shall be separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever. The Aggregate Commitment may permanently and ratably be reduced by the Company in multiples of $10,000,000 upon three (3) Business Days’ prior written notice. Any such reduction shall be allocated ratably between the Dollar Commitment and the Multicurrency Commitment.

2.7 Minimum Amount of Each Advance.

Each Eurocurrency Advance shall be in the minimum Equivalent Amount of $5,000,000 (and in multiples of Equivalent Amounts of $1,000,000 in excess thereof, or in the case of a Multicurrency Advance, such other lesser multiple as the Administrative Agent deems appropriate), and each Floating Rate Advance (other than an Advance to repay Swingline Loans) shall be in the minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess thereof); provided, however, that any Floating Rate Advance may be in the amount of the unused Aggregate Commitment. Each Swingline Loan denominated in Dollars shall be in the minimum amount of $5,000,000 (and in multiples of $500,000 if in excess thereof) or in the case of Swingline Loans denominated in any currency other than Dollars (which shall be at the sole discretion of the Swingline Lender), such other minimum amounts and multiples as the Swingline Lender shall determine; provided, however, that any Swingline Loan may be in the amount of the unused Swingline Sublimit. Alternate Currency Loans shall be in such minimum amounts as are set forth in the applicable Alternate Currency Addendum.

2.8 Prepayments.

(a) The Borrowers may from time to time pay, without penalty or premium, all outstanding Floating Rate Advances, or, in a minimum aggregate amount of $5,000,000, any portion of the outstanding Floating Rate Advances upon one (1) Business Day’s prior notice to the Administrative Agent, who shall give prompt notice thereof to the Lenders.

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(b) The Borrowers may from time to time pay, subject to the payment of any funding indemnification amounts required by Section 3.4 but without penalty or premium, all outstanding Eurocurrency Advances, or, in a minimum aggregate Equivalent Amount of $5,000,000, any portion of the outstanding Eurocurrency Advances upon three (3) Business Days’ prior notice to the Administrative Agent, who shall give prompt notice thereof to the Lenders.

(c) If at any time, for any reason, the Aggregate Outstanding Credit Exposure of all Lenders shall exceed the Aggregate Commitment then in effect, the Borrowers shall, without notice or demand, immediately prepay the Dollar Loans and/or Multicurrency Loans such that the sum of the aggregate principal amount of Dollar Loans so prepaid, and the Dollar Amount of the aggregate principal amount of Multicurrency Loans so prepaid, at least equals the amount of such excess.

(d) If, at any time for any reason, either (i) the Aggregate Multicurrency Outstanding Credit Exposure of all Multicurrency Lenders exceeds the Aggregate Multicurrency Commitments of the Multicurrency Lenders or (ii) the Aggregate Dollar Outstanding Credit Exposure of all Lenders exceeds the aggregate Dollar Commitments of all Lenders, the Borrowers shall, without notice or demand, immediately prepay the Multicurrency Loans in a Dollar Amount at least equal to the excess referred to in (i) (such repayment to be in the applicable currency) and the Dollar Loans in an amount at least equal to the excess referred to in (ii) (such repayment to be in Dollars).

(e) Each prepayment pursuant to this Section 2.8 shall be accompanied by accrued and unpaid interest on the amount prepaid to the date of prepayment and any amounts payable under Section 3.4 in connection with such payment.

(f) Notwithstanding the foregoing, mandatory prepayments of Multicurrency Loans that would otherwise be required pursuant to this Section 2.8 solely as a result of fluctuations in exchange rates from time to time shall only be required to be made pursuant to this Section 2.8 on a Computation Date on the basis of the exchange rates in effect on such Computation Date.

2.9 Method of Selecting Types and Interest Periods for New Advances.

The Company or the relevant Borrower shall select the Type of Advance and, in the case of each Eurocurrency Advance, the Interest Period and Agreed Currency applicable thereto from time to time. The Company or the relevant Borrower shall give the Administrative Agent irrevocable notice (a “Borrowing Notice”) not later than 11:00 a.m. (i) on the Borrowing Date of each Floating Rate Advance (other than Swingline Loans), (ii) three (3) Business Days before the Borrowing Date for each Eurocurrency Advance in Dollars, (iii) three (3) Business Days before the Borrowing Date for each Multicurrency Advance in an Agreed Currency of a country that is a member of OECD located in North America or Europe, (iv) four (4) Business Days before the Borrowing Date for each Multicurrency Advance in Yen, and (v) five (5) Business Days before the Borrowing Date for each Multicurrency Advance in any other Agreed Currency, specifying:

(a) the Borrower;

(b) the Borrowing Date, which shall be a Business Day, of such Advance;

(c) the aggregate amount of such Advance;

(d) the Type of Advance selected;

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(e) in the case of each Eurocurrency Advance, the Interest Period, and Agreed Currency applicable thereto; and

(f) details relating to funds transfer for such Advance.

The Company or the relevant Borrower shall give the Swingline Lender (with a copy to the Administrative Agent) notice of its request not later than 11:00 a.m. on the same Business Day such Swingline Loan is requested to be made for each Swingline Loan in Dollars and not later than 10:00 a.m. local time on the same Business Day such Swingline Loan is requested to be made for each Swingline Loan in any Agreed Currency other than Dollars. Not later than 1:00 p.m. on each Borrowing Date, each Lender shall make available its Loan or Loans in funds immediately available to the Administrative Agent at the Administrative Agent’s Office. The Administrative Agent will make the funds so received from the Lenders available to the applicable Borrower at the Administrative Agent’s aforesaid address.

2.10 Conversion and Continuation of Outstanding Advances.

Floating Rate Advances shall continue as Floating Rate Advances unless and until such Floating Rate Advances are converted into Eurocurrency Advances pursuant to this Section 2.10 or are repaid in accordance with Section 2.8. Each Eurocurrency Advance shall continue as a Eurocurrency Advance until the end of the then applicable Interest Period therefor, at which time:

(a) each such Eurocurrency Advance denominated in Dollars shall be automatically converted into a Floating Rate Advance unless (x) such Eurocurrency Advance is or was repaid in accordance with Section 2.8 or (y) the applicable Borrower shall have given the Administrative Agent a Conversion/Continuation Notice (as defined below) requesting that, at the end of such Interest Period, such Eurocurrency Advance either continue as a Eurocurrency Advance for the same or another Interest Period or be converted into a Floating Rate Advance; and

(b) each such Multicurrency Advance shall automatically continue as a Multicurrency Advance in the same Agreed Currency with an Interest Period of one month unless (x) such Multicurrency Advance is or was repaid in accordance with Section 2.8 or (y) the applicable Borrower shall have given the Administrative Agent a Conversion/Continuation Notice (as defined below) requesting that, at the end of such Interest Period, such Multicurrency Advance continue as a Multicurrency Advance for the same or another Interest Period.

Subject to the terms of Section 2.7, the applicable Borrower may elect from time to time to convert all or any part of an Advance of any Type into any other Type or Types of Advances denominated in the same or any other Agreed Currency (other than an Alternate Currency); provided that any conversion of any Eurocurrency Advance shall be made on, and only on, the last day of the Interest Period applicable thereto. The applicable Borrower shall give the Administrative Agent irrevocable notice (each a “Conversion/Continuation Notice”) of each conversion of an Advance or continuation of a Eurocurrency Advance not later than 11:00 a.m. (i) at least one Business Day, in the case of a conversion into a Floating Rate Advance, (ii) at least three (3) Business Days, in the case of a conversion into or continuation of a Eurocurrency Advance denominated in Dollars, (iii) at least three (3) Business Days, in the case of a Multicurrency Advance in an Agreed Currency of a country that is a member of OECD located in North America or Europe, (iv) at least four (4) Business Days, in the case of a conversion into or continuation of a Multicurrency Advance in Yen and (v) at least five (5) Business Days, in the case of a conversion into or continuation of a Multicurrency Advance in any other Agreed Currency, prior to the date of the requested conversion or continuation, specifying:

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(a) the requested date, which shall be a Business Day, of such conversion or continuation; and

(b) the Agreed Currency, amount and Type(s) of Advance(s) into which such Advance is to be converted or continued and, in the case of a conversion into or continuation of a Eurocurrency Advance, the duration of the Interest Period applicable thereto.

2.11 Method of Borrowing.

On each Borrowing Date, each Lender shall make available its Loan or Loans, if any, (i) if such Loan is a Dollar Loan or a Multicurrency Loan denominated in Dollars, not later than 1:00 p.m., in Same Day Funds immediately available to the Administrative Agent, at the Administrative Agent’s Office and (ii) if such Loan is a Multicurrency Loan denominated in Agreed Currency other than Dollars or subject to any applicable Alternate Currency Addendum, not later than the Applicable Time specified by the Administrative Agent, at the Administrative Agent’s Office for such currency. Unless the Administrative Agent determines that any applicable condition specified in Article IV has not been satisfied, the Administrative Agent will make the funds so received from the Lenders available to the relevant Borrower at the Administrative Agent’s aforesaid address. Notwithstanding the foregoing provisions of this Section 2.11, to the extent that a Loan made by a Lender matures on the Borrowing Date of a requested Loan in the same currency, such Lender shall apply the proceeds of the Loan it is then making to the repayment of principal of the maturing Loan.

2.12 Changes in Interest Rate, Etc.

Each Floating Rate Advance shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or is converted from a Eurocurrency Advance into a Floating Rate Advance pursuant to Section 2.10 to (but not including) the date it becomes due or is converted into a Eurocurrency Advance pursuant to Section 2.10 hereof, at a rate per annum equal to the Floating Rate for such day. Changes in the rate of interest on that portion of any Advance maintained as a Floating Rate Advance will take effect simultaneously with each change in the Base Rate. Each Eurocurrency Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the Eurocurrency Rate determined by the Administrative Agent as applicable to such Eurocurrency Advance based upon the applicable Borrower’s selections under Sections 2.9 and 2.10 and otherwise in accordance with the terms hereof. No Interest Period may end after the Facility Termination Date.

2.13 Rates Applicable After Default.

Notwithstanding anything to the contrary contained in Section 2.9 or 2.10, during the continuance of any Default or Unmatured Default, the Required Lenders may, at their option and by notice to the Borrowers (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 8.2 requiring unanimous consent of the Lenders to changes in interest rates), declare that no Advance may be made as, converted into or continued as a Eurocurrency Advance. During the continuance of a Default, the Required Lenders may, at their option and by notice to the Borrowers (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 8.2 requiring unanimous consent of the Lenders to changes in interest rates), declare that (i) each Eurocurrency Advance shall bear interest for the remainder of the applicable Interest Period at the rate otherwise applicable to such Interest Period plus 2% per annum; and (ii) each Floating Rate Advance shall bear interest at a rate per annum equal to the Floating Rate in effect from time to time plus 2% per

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annum, and (iii) the LC Fee shall be increased by 2% per annum; provided that, during the continuance of a Default under Section 7.6 or 7.7, the interest rates set forth in clauses (i) and (ii) above and the increase in the LC Fee set forth in clause (iii) above shall be applicable to all Credit Extensions without any election or action on the part of the Administrative Agent or any Lender.

2.14 Method of Payment.

(a) Each Advance shall be repaid and each payment of interest thereon shall be paid in the currency in which such Advance was made or converted into. All payments of the Obligations hereunder shall be made, without condition or deduction for any counterclaim, defense, recoupment or setoff, in immediately available funds by wire transfer to the Administrative Agent at (except as set forth in the next sentence) the Administrative Agent’s Office specified in writing by the Administrative Agent to the applicable Borrower, by noon (local time) on the date when due and (except for payments on Swingline Loans and Alternate Currency Loans and except in the case of Reimbursement Obligations for which the LC Issuer has not been fully indemnified by the Lenders or except as otherwise specifically required hereunder) shall be applied ratably by the Administrative Agent among the Lenders. All payments to be made by the Borrowers hereunder in any currency other than Dollars shall be made in such currency on the date due in such funds as may then be customary for the settlement of international transactions in such currency for the account of the Administrative Agent, at the Administrative Agent’s Office for such currency not later than the Applicable Time specified by the Administrative Agent, and, except for payments of Alternate Currency Loans, shall be applied ratably by the Administrative Agent among the Lenders. Each payment delivered to the Administrative Agent for the account of any Lender shall be delivered promptly by the Administrative Agent to such Lender in the same type of funds that the Administrative Agent received at, (i) with respect to Floating Rate Loans and Eurocurrency Loans denominated in Dollars, its address specified pursuant to Article XIII or at any Lending Installation specified in a notice received by the Administrative Agent from such Lender and (ii) with respect to Eurocurrency Loans denominated in an Agreed Currency other than Dollars, in the funds received from the applicable Borrower, its address specified pursuant to Article XIII or at any Lending Installation specified in a notice received by the Administrative Agent from such Lender for such currency.

(b) Notwithstanding the foregoing provisions of this Section, if, after the making of any Advance in any currency other than Dollars, currency control or exchange regulations are imposed in the country which issues such currency with the result that the type of currency in which the Advance was made (the “Original Currency”) no longer exists or the relevant Borrower is not able to make payment to the Administrative Agent for the account of the Lenders in such Original Currency, then all payments to be made by the Borrowers hereunder in such currency shall instead be made when due in Dollars in an amount equal to the Dollar Amount (as of the date of repayment) of such payment due, it being the intention of the parties hereto that the Borrowers take all risks of the imposition of any such currency control or exchange regulations.

2.15 Noteless Agreement; Evidence of Indebtedness.

(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(b) The Administrative Agent shall maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Agreed Currency and Type thereof and, if applicable, the Interest Period with respect thereto, (ii) the amount of any principal or interest due and payable or to

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become due and payable from each Borrower to each Lender hereunder, (iii) the original stated amount of each Facility LC and the amount of LC Obligations outstanding at any time, and (iv) the amount of any sum received by the Administrative Agent hereunder from the Borrowers and each Lender’s share thereof.

(c) The entries maintained in the accounts maintained pursuant to paragraphs (a) and (b) above shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided, however, that the failure of the Administrative Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Obligations in accordance with their terms.

(d) Any Lender may request that its Loans be evidenced by a promissory note (a “Note”). In such event, the relevant Borrower shall prepare, execute and deliver to such Lender a Note payable to the order of such Lender. Thereafter, the Loans evidenced by such Note and interest thereon shall at all times (including after any assignment pursuant to Section 12.1) be represented by one or more Notes (but not more than one Note for each Agreed Currency) payable to the order of the payee named therein or any assignee pursuant to Section 12.1, except to the extent that any such Lender or assignee subsequently returns any such Note for cancellation and requests that such Loans once again be evidenced as described in paragraphs (a) and (b) above.

2.16 Telephonic Notices.

The Borrowers hereby authorize the Lenders and the Administrative Agent to extend, convert or continue Advances, effect selections of Agreed Currencies and Types of Advances and to transfer funds based on telephonic notices given to the Administrative Agent by any person or persons listed on Schedule 2.16, as such Schedule may be revised by the Company from time to time in accordance with Section 13.1, it being understood that the foregoing authorization is specifically intended to allow Borrowing Notices and Conversion/Continuation Notices to be given telephonically. The Borrowers agree to deliver promptly to the Administrative Agent a written confirmation, if such confirmation is requested by the Administrative Agent or any Lender, of each telephonic notice signed by an Authorized Officer. If the written confirmation differs in any material respect from the action taken by the Administrative Agent and the Lenders, the records of the Administrative Agent regarding the telephonic notice shall govern absent manifest error.

2.17 Interest Payment Dates; Interest and Fee Basis.

Interest accrued on each Floating Rate Advance shall be payable on each Payment Date, commencing with the first such date to occur after the date hereof, on any date on which the Floating Rate Advance is prepaid, whether due to acceleration or otherwise, and on the Facility Termination Date. Interest on Floating Rate Loans shall be calculated for actual days elapsed on the basis of a 365 or 366-day year, as appropriate. Interest accrued on that portion of the outstanding principal amount of any Floating Rate Advance converted into a Eurocurrency Advance on a day other than a Payment Date shall be payable on the date of conversion. Interest accrued on each Eurocurrency Advance shall be payable in arrears on the last day of its applicable Interest Period, on any date on which the Eurocurrency Advance is prepaid, whether by acceleration or otherwise, and on the Facility Termination Date, and with respect to any Alternate Currency Loan, the date specified as the date on which interest is payable in the applicable Alternate Currency Addendum. Interest accrued on each Eurocurrency Advance having an Interest Period longer than three months shall also be payable on the last day of each three-month interval during such Interest Period. Facility fees, utilization fees and interest on Eurocurrency Advances and LC Fees shall be calculated for actual days elapsed on the basis of a 360-day year, except for interest on Loans

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denominated in British Pounds Sterling which shall be calculated for actual days elapsed on the basis of a 365-day year. Interest shall be payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is received prior to noon (local time) at the place of payment. If any payment of principal of or interest on an Advance shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment.

2.18 Notification of Advances, Interest Rates, Prepayments and Commitment Reductions.

Promptly after receipt thereof, the Administrative Agent will notify each Lender of the contents of each Aggregate Commitment reduction notice, Borrowing Notice, Conversion/Continuation Notice, and repayment notice received by it hereunder. Promptly after notice from the LC Issuer, the Administrative Agent shall notify each Lender of the contents of each request for issuance of a Facility LC hereunder. The Administrative Agent will notify each Lender, the Company and the relevant Borrower of the interest rate applicable to each Eurocurrency Advance promptly upon determination of such interest rate and will give each Lender and the Company prompt notice of each change in the Base Rate.

2.19 Lending Installations.

Each Lender will book its Loans and its participation in LC Obligations and the LC Issuer may book the Facility LCs at the appropriate Lending Installation listed on Schedule 2.19 or such other Lending Installation designated by such Lender or the LC Issuer in accordance with the final sentence of this Section 2.19. All terms of this Agreement shall apply to any such Lending Installation and the Loans, Facility LCs, participation in LC Obligations and any Notes issued hereunder shall be deemed held by each Lender or the LC Issuer, as the case may be, for the benefit of any such Lending Installation. Each Lender and the LC Issuer may, by not less than one (1) Business Day’s prior written notice to the Administrative Agent and the Borrowers in accordance with Article XIII, designate replacement or additional Lending Installations through which Loans will be made by it or Facility LCs will be issued by it and for whose account Loan payments or payments with respect to Facility LCs are to be made.

2.20 Non-Receipt of Funds by the Administrative Agent.

(a) Unless the relevant Borrower or a Lender, as the case may be, notifies the Administrative Agent prior to the date on which it is scheduled to make payment to the Administrative Agent (or in the case of any Base Rate Advance by 12:00 p.m. on the Business Day of a Borrowing) of (i) in the case of a Lender, the proceeds of a Loan or any payment by such Lender pursuant to Sections 2.1(a)(iv), 2.1(b)(iii) or 2.1(c)(iv), or (ii) in the case of such Borrower, a payment of principal, interest or fees to the Administrative Agent for the account of the Lenders, that it does not intend to make such payment, the Administrative Agent may assume that such payment has been made. The Administrative Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender or such Borrower, as the case may be, has not in fact made such payment to the Administrative Agent, the recipient of such payment shall, on demand by the Administrative Agent, repay to the Administrative Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Administrative Agent until the date the Administrative Agent recovers such amount at a rate per annum equal to (x) in the case of payment by a Lender, the Overnight Rate, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, (y) in the case of payment by a Borrower, the interest rate applicable to the relevant Loan. With respect to Multicurrency Advances, a payment shall be deemed to have been made by the

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Administrative Agent on the date on which it is required to be made under this Agreement if the Administrative Agent has, on or before that date, taken all relevant steps to make that payment. With respect to the payment of any amount denominated in Euro, the Administrative Agent shall not be liable to any Borrower or any of the Lenders in any way whatsoever for any delay, or the consequences of any delay, in the crediting to any account of any amount required by this Agreement to be paid by the Administrative Agent if the Administrative Agent shall have taken all relevant steps to achieve, on the date required by this Agreement, the payment of such amount in immediately available, freely transferable, cleared funds in Euros to the account with the bank in the principal financial center in the Participating Member State which the relevant Borrower or, as the case may be, any Lender shall have specified for such purpose. In this Section 2.20, “all relevant steps” means all such steps as may be prescribed from time to time by the regulations or operating procedures of such clearing or settlement system as the Administrative Agent may from time to time determine for the purpose of clearing or settling payments of Euros. The failure of any Lender to make the Loan to be made by it as part of any Advance shall not relieve any other Lender of its obligation hereunder to make its Loan on the date of such Advance and any repayment by such Borrower shall be without prejudice to any claim such Borrower may have against a Lender that failed to make such payment to the Administrative Agent.

(b) The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swingline Loans and to make payments pursuant to Section 9.6(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 9.6(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 9.6(c).

2.21 Facility LCs.

2.21.1. Issuance. The LC Issuer hereby agrees, on the terms and conditions set forth in this Agreement, to issue commercial and standby letters of credit in Dollars (each, a “Facility LC”) and to extend, increase, decrease or otherwise modify each Facility LC (“Modify,” and each such action a “Modification”), from time to time from and including the date of this Agreement and prior to the Facility Termination Date upon the request of a Borrower; provided that (A) immediately after each such Facility LC is issued or Modified, (i) the aggregate amount of the outstanding LC Obligations shall not exceed $150,000,000, (ii) the Aggregate Dollar Outstanding Credit Exposure shall not exceed the Aggregate Dollar Commitment, and (iii) the Aggregate Outstanding Credit Exposure shall not exceed the Aggregate Commitment and (B) the LC Issuer has not received written notice from any Lender, the Administrative Agent or the Company, at least one (1) Business Day prior to the requested date of issuance or amendment of the applicable Facility LC, that one or more applicable conditions contained in Section 4.2 has not been satisfied. No Facility LC shall have an expiry date later than the earlier of (x) the seventh Business Day prior to the Facility Termination Date and (y) one year after its issuance; provided that no Facility LC may expire after the Facility Termination Date of any Lender who did not agree to extend the Facility Termination Date in accordance with Section 2.28 if, after giving effect to such issuance, the aggregate Commitments of the extending Lenders (including any replacement Lenders) for the period following such Facility Termination Date would be less than the available amount of the Facility LCs expiring after such Facility Termination Date. The Existing Facility LCs shall be deemed to be Facility LCs issued and outstanding under this Agreement; provided, however, that such Existing Facility LCs shall be replaced by Facility LCs issued by Bank of America, as the LC Issuer under this Agreement, upon the expiration and/or maturity thereof and shall not be otherwise extended, renewed or modified. The LC Issuer shall not be under any obligation to issue any Letter of Credit if:

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(a) Any order, judgment or decree of any governmental authority or arbitrator shall by its terms purport to enjoin or restrain the LC Issuer from issuing such Letter of Credit or any Law applicable to the LC Issuer or any request or directive (whether or not having the force of Law) from any governmental authority with jurisdiction over the LC Issuer shall prohibit, or request that the LC Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such LC Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the LC Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose the LC Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the LC Issuer in good faith deems material to it; or

(b) The issuance of the Letter of Credit would violate any Laws or one or more policies of the LC Issuer applicable to letters of credit issued to borrowers generally.

2.21.2. Participations. Upon the issuance or Modification by the LC Issuer of a Facility LC in accordance with this Section 2.21, the LC Issuer shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably sold to each Lender, and each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the LC Issuer, a participation in such Facility LC (and each Modification thereof) and the related LC Obligations in proportion to its Pro Rata Share.

2.21.3. Notice. Subject to Section 2.21.1, a Borrower shall give the LC Issuer notice prior to 11:00 a.m. at least three (3) Business Days prior to the proposed date of issuance or Modification of each Facility LC (with a copy to the Administrative Agent), specifying the beneficiary, the proposed date of issuance (or Modification) and the expiry date of such Facility LC, and describing the proposed terms of such Facility LC and the nature of the transactions proposed to be supported thereby. Upon receipt of such notice, the Administrative Agent shall promptly notify each Lender, of the contents thereof (including whether it is a standby or commercial letter of credit) and of the amount of such Lender’s participation in such proposed Facility LC. The issuance or Modification by the LC Issuer of any Facility LC shall, in addition to the conditions precedent set forth in Article IV (the satisfaction of which the LC Issuer shall have no duty to ascertain), be subject to the conditions precedent that such Facility LC shall be satisfactory to the LC Issuer and that such Borrower shall have executed and delivered such application agreement and/or such other instruments and agreements relating to such Facility LC as the LC Issuer shall have reasonably requested (each, a “Facility LC Application”). In the event of any conflict between the terms of this Agreement and the terms of any Facility LC Application, the terms of this Agreement shall control.

2.21.4. LC Fees. The Company or the relevant Borrower shall pay to the Administrative Agent, for the account of the Lenders ratably in accordance with their respective Pro Rata Shares, (i) with respect to each standby Facility LC, a letter of credit fee at a per annum rate equal to the Applicable Margin in effect from time to time on the daily undrawn stated amount under such standby Facility LC, such fee to be payable in arrears on the next Business Day (or, if Wachovia is the LC Issuer, ten (10) Business Days) following each Payment Date and (ii) with respect to each commercial Facility LC, a one-time letter of credit fee in an amount agreed upon between the LC Issuer and such Borrower at the time of issuance calculated on the initial stated amount (or, with respect to any Modification of any such commercial Facility LC which increases the stated amount thereof, such increase in the stated amount) thereof, such fee to be payable on the date of such issuance or increase (such fee described in this sentence, an “LC Fee”). Such Borrower shall also pay to the LC Issuer for its own account (x) a fronting fee (A) in the amount of 0.125% per annum calculated on the stated amount of each standby Facility LC payable in arrears on the next Business Day following each Payment Date, and (B) in an amount to be agreed upon between the LC Issuer and such Borrower with respect to each commercial Facility LC

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payable on the issuance date, and (y) documentary and processing charges in connection with the issuance or Modification of and draws under Facility LCs in accordance with the LC Issuer’s standard schedule for such charges as in effect from time to time.

2.21.5. Administration; Reimbursement by Lenders. Upon receipt from the beneficiary of any Facility LC of any demand for payment under such Facility LC, the LC Issuer shall notify the Administrative Agent and the Administrative Agent shall promptly notify the Borrowers and each other Lender as to the amount to be paid by the LC Issuer as a result of such demand and the proposed payment date (the “LC Payment Date”). The responsibility of the LC Issuer to the Borrowers and each Lender shall be only to determine that the documents (including each demand for payment) delivered under each Facility LC in connection with such presentment shall be in compliance with such Facility LC. The LC Issuer shall endeavor to exercise the same care in the issuance and administration of the Facility LCs as it does with respect to letters of credit in which no participations are granted, it being understood that in the absence of any gross negligence or willful misconduct by the LC Issuer, each Lender shall be unconditionally and irrevocably liable without regard to the occurrence of any Default or any condition precedent whatsoever, to reimburse the LC Issuer on demand for (i) such Lender’s Pro Rata Share of the amount of each payment made by the LC Issuer under each Facility LC to the extent such amount is not reimbursed by the Borrowers pursuant to Section 2.21.6 below, plus (ii) interest on the foregoing amount to be reimbursed by such Lender, for each day from the date of the LC Issuer’s demand for such reimbursement (or, if such demand is made after 11:00 a.m. on such date, from the next succeeding Business Day) to the date on which such Lender pays the amount to be reimbursed by it, at a rate of interest per annum equal to the Federal Funds Rate for the first three days and, thereafter, at a rate of interest equal to the rate applicable to Floating Rate Advances.

2.21.6. Reimbursement by Borrowers. The Borrowers shall be irrevocably and unconditionally obligated to reimburse the LC Issuer on or before the applicable LC Payment Date for any amounts to be paid by the LC Issuer upon any drawing under any Facility LC issued for any Borrower’s account, without presentment, demand, protest or other formalities of any kind; provided that neither any Borrower nor any Lender shall hereby be precluded from asserting any claim for direct (but not consequential) damages suffered by such Borrower or such Lender to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of the LC Issuer in determining whether a request presented under any Facility LC issued by it complied with the terms of such Facility LC or (ii) the LC Issuer’s failure to pay under any Facility LC issued by it after the presentation to it of a request complying with the terms and conditions of such Facility LC. All such amounts paid by the LC Issuer and remaining unpaid by a Borrower shall bear interest, payable on demand, for each day until paid at a rate per annum equal to (x) the rate applicable to Floating Rate Advances for such day if such day falls on or before the applicable LC Payment Date and (y) the sum of 2% plus the rate applicable to Floating Rate Advances for such day if such day falls after such LC Payment Date. The LC Issuer will pay to each Lender ratably in accordance with its Pro Rata Share all amounts received by it from a Borrower for application in payment, in whole or in part, of the Reimbursement Obligation in respect of any Facility LC issued by the LC Issuer, but only to the extent such Lender has made payment to the LC Issuer in respect of such Facility LC pursuant to Section 2.21.5. Subject to the terms and conditions of this Agreement (including without limitation the submission of a Borrowing Notice in compliance with Section 2.9 and the satisfaction of the applicable conditions precedent set forth in Article IV), a Borrower may request an Advance hereunder for the purpose of satisfying any Reimbursement Obligation.

2.21.7. Obligations Absolute. Each Borrower’s obligations under this Section 2.21 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which a Borrower may have or have had against the LC Issuer, any Lender or any beneficiary of a Facility LC. Each Borrower further agrees with the LC Issuer and the

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Lenders that the LC Issuer and the Lenders shall not be responsible for, and the Borrower’s Reimbursement Obligation in respect of any Facility LC shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrowers, any of their Affiliates, the beneficiary of any Facility LC or any financing institution or other party to whom any Facility LC may be transferred or any claims or defenses whatsoever of the Borrowers or of any of their Affiliates against the beneficiary of any Facility LC or any such transferee. The LC Issuer shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Facility LC. Each Borrower agrees that any action taken or omitted by the LC Issuer or any Lender under or in connection with each Facility LC and the related drafts and documents, if done without gross negligence or willful misconduct, shall be binding upon the Borrowers and shall not put the LC Issuer or any Lender under any liability to the Borrowers. Nothing in this Section 2.21.7 is intended to limit the right of a Borrower to make a claim against the LC Issuer for damages as contemplated by the proviso to the first sentence of Section 2.21.6.

2.21.8. Actions of LC Issuer. The LC Issuer shall be entitled to rely, and shall be fully protected in relying, upon any Facility LC, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the LC Issuer. The LC Issuer shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first have received such advice or concurrence of the Required Lenders or all Lenders, as the case may be in accordance with Section 8.2, as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or refusing to take any such action. Notwithstanding any other provision of this Section 2.21, the LC Issuer shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Required Lenders or, if required pursuant to Section 8.2, all Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Lenders and any future holders of a participation in any Facility LC.

2.21.9. Indemnification. Each Borrower hereby agrees to indemnify and hold harmless each Lender, the LC Issuer and the Administrative Agent, and their respective directors, officers, agents and employees from and against any and all claims and damages, losses, liabilities, costs or expenses which such Lender, the LC Issuer or the Administrative Agent may incur (or which may be claimed against such Lender, the LC Issuer or the Administrative Agent by any Person whatsoever) by reason of or in connection with the issuance, execution and delivery or transfer of or payment or failure to pay under any Facility LC or any actual or proposed use of any Facility LC, including, without limitation, any claims, damages, losses, liabilities, costs or expenses which the LC Issuer may incur by reason of or in connection with (i) the failure of any other Lender to fulfill or comply with its obligations to the LC Issuer hereunder (but nothing herein contained shall affect any rights the Borrowers may have against any defaulting Lender) or (ii) by reason of or on account of the LC Issuer issuing any Facility LC which specifies that the term “Beneficiary” included therein includes any successor by operation of Law of the named Beneficiary, but which Facility LC does not require that any drawing by any such successor Beneficiary be accompanied by a copy of a legal document, satisfactory to the LC Issuer, evidencing the appointment of such successor Beneficiary; provided that the Borrowers shall not be required to indemnify any Lender, the LC Issuer or the Administrative Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (x) the willful misconduct or gross negligence of the LC Issuer in determining whether a request presented under any Facility LC

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complied with the terms of such Facility LC or (y) the LC Issuer’s failure to pay under any Facility LC after the presentation to it of a request complying with the terms and conditions of such Facility LC. Nothing in this Section 2.21.9 is intended to limit the obligations of the Borrowers under any other provision of this Agreement.

2.21.10. Lenders’ Indemnification. Each Lender shall, ratably in accordance with its Pro Rata Share, indemnify the LC Issuer, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrowers) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees’ gross negligence or willful misconduct or the LC Issuer’s failure to pay under any Facility LC after the presentation to it of a request complying with the terms and conditions of the Facility LC) that such indemnitees may suffer or incur in connection with this Section 2.21 or any action taken or omitted by such indemnitees hereunder.

2.21.11. Facility LC Collateral Account. Each Borrower agrees that it will, upon the request of the Administrative Agent or the Required Lenders and until the final expiration date of any Facility LC and thereafter as long as any amount is payable to the LC Issuer or the Lenders in respect of any Facility LC, maintain a special collateral account pursuant to arrangements satisfactory to the Administrative Agent (the “Facility LC Collateral Account”) at the Administrative Agent’s Office at the address specified pursuant to Article XIII, in the name of such Borrower but under the sole dominion and control of the Administrative Agent, for the benefit of the Lenders and in which such Borrower shall have no interest other than as set forth in Section 8.1. Each Borrower hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Lenders and the LC Issuer, a security interest in all of such Borrower’s right, title and interest in and to all funds which may from time to time be on deposit in the Facility LC Collateral Account to secure the prompt and complete payment and performance of the Obligations. The Administrative Agent will invest any funds on deposit from time to time in the Facility LC Collateral Account in accordance with the Company’s instructions in certificates of deposit of Bank of America having a maturity not exceeding 30 days. Nothing in this Section 2.21.11 shall either obligate the Administrative Agent to require the Borrowers to deposit any funds in the Facility LC Collateral Account, obligate the Borrowers to deposit any funds in the Facility LC Collateral Account or limit the right of the Administrative Agent to release any funds held in the Facility LC Collateral Account in each case other than as required by Section 8.1.

2.21.12. Rights as a Lender. In its capacity as a Lender, the LC Issuer shall have the same rights and obligations as any other Lender.

2.22 Market Disruption.

Notwithstanding the satisfaction of all conditions referred to in Article II and Article IV with respect to any Advance in any Agreed Currency other than Dollars, if there shall occur on or prior to the date of such Advance any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which would in the reasonable opinion of the Administrative Agent or the Required Lenders make it impracticable for the Eurocurrency Loans comprising such Advance to be denominated in the Agreed Currency specified by the relevant Borrower, then the Administrative Agent shall forthwith give notice thereof to the Borrowers and the Lenders, and such Loans shall not be denominated in such Agreed Currency but shall be made on such Borrowing Date in Dollars, in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Borrowing Notice or Conversion/Continuation Notice, as the case may be, as Floating Rate Loans, unless the relevant Borrower notifies the Administrative Agent at least two (2) Business Days before such date that (i) it elects not to borrow on such date or (ii) it elects to borrow on

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such date in a different Agreed Currency, as the case may be, in which the denomination of such Loans would in the opinion of the Administrative Agent and the Required Lenders be practicable and in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Borrowing Notice or Conversion/Continuation Notice, as the case may be.

2.23 Judgment Currency.

If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from any Borrower hereunder in the currency expressed to be payable herein (the “Specified Currency”) into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the Specified Currency with such other currency at the Administrative Agent’s Office on the Business Day preceding that on which final, non-appealable judgment is given. The obligations of the Borrowers in respect of any sum due to any Lender or the Administrative Agent hereunder shall, notwithstanding any judgment in a currency other than the Specified Currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Administrative Agent (as the case may be) of any sum adjudged to be so due in such other currency such Lender or the Administrative Agent (as the case may be) may in accordance with normal, reasonable banking procedures purchase the Specified Currency with such other currency. If the amount of the Specified Currency so purchased is less than the sum originally due to such Lender or the Administrative Agent, as the case may be, in the Specified Currency, the Borrowers agree, to the fullest extent that they may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Administrative Agent, as the case may be, against such loss, and if the amount of the Specified Currency so purchased exceeds (a) the sum originally due to any Lender or the Administrative Agent, as the case may be, in the Specified Currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 11.2, such Lender or the Administrative Agent, as the case may be, agrees to remit such excess to the relevant Borrower.

2.24 Payment Provisions Relating to the Euro.

(a) Any amount payable by the Administrative Agent to the Lenders under this Agreement in the currency of a Participating Member State shall be paid in the Euro.

(b) If, in relation to the currency of any Subsequent Participant, the basis of accrual of interest or fees expressed in this Agreement with respect to such currency shall be inconsistent with any convention or practice in the London Interbank Market or, as the case may be, the Paris Interbank Market for the basis of accrual of interest or fees in respect of the Euro, such convention or practice shall replace such expressed basis effective as of and from the date on which such Subsequent Participant becomes a Participating Member State; provided, that if any Loan in the currency of such Subsequent Participant is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Loan, at the end of the then current Interest Period.

(c) Without prejudice and in addition to any method of conversion or rounding prescribed by any EMU legislation and (i) without prejudice to the respective liabilities for indebtedness of the Borrowers to the Lenders and the Lenders to the Borrowers under or pursuant to this Agreement and (ii) without increasing the Multicurrency Commitment of any Lender each reference in this Agreement to a minimum amount (or an integral multiple thereof) in a national currency denomination of a Subsequent Participant to be paid to or by the Administrative Agent shall, immediately upon such Subsequent Participant becoming a Participating Member State, be replaced by a reference to such

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reasonably comparable and convenient amount (or an integral multiple thereof) in Euros as the Administrative Agent may from time to time specify.

2.25 Redenomination and Alternative Currencies.

Each obligation under this Agreement of a party to this Agreement which has been denominated in the national currency unit of a Subsequent Participant state shall be redenominated into the Euro in accordance with EMU legislation immediately upon such Subsequent Participant becoming a Participating Member State (but otherwise in accordance with EMU Legislation).

2.26 Replacement of Lender.

If any Borrower is required pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any Lender’s obligation to make or continue, or to convert Floating Rate Advances into, Eurocurrency Advances shall be suspended pursuant to Section 3.3, or if any Lender shall become a Defaulting Lender (any Lender so affected an “Affected Lender”), the Company may elect, if such amounts continue to be charged or such suspension is still effective or such Lender continues to be a Defaulting Lender, to replace such Affected Lender as a Lender party to this Agreement; provided that no Default or Unmatured Default shall have occurred and be continuing at the time of such replacement, and provided further that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Company and the Administrative Agent shall agree, as of such date, to purchase for cash the Advances and other Obligations due to the Affected Lender pursuant to an Assignment Agreement and to become a Lender for all purposes under this Agreement and to assume all obligations of the Affected Lender to be terminated as of such date pursuant to an Assignment Agreement and to comply with the requirements of Section 12.1 applicable to assignments, and (ii) the Borrowers shall pay to such Affected Lender in same day funds on the day of such replacement all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the Borrowers hereunder to and including the date of termination, including without limitation any payments due to such Affected Lender under Sections 3.1, 3.2, 3.4, 3.5 and 9.6. Nothing herein shall release any Defaulting Lender from any obligation it may have to any Borrower, the Administrative Agent or any other Lender.

2.27 Application of Payments with Respect to Defaulting Lenders.

No payments of principal, interest or fees delivered to the Administrative Agent for the account of any Defaulting Lender shall be delivered by the Administrative Agent to such Defaulting Lender. Instead, such payments shall, for so long as such Defaulting Lender shall be a Defaulting Lender, be held by the Administrative Agent, and the Administrative Agent is hereby authorized and directed by all parties hereto to hold such funds in escrow and apply such funds as follows:

(a) First, if applicable to any payments due to the Swingline Lender under Section 2.1(b)(iii); and

(b) Second, to Loans required to be made by such Defaulting Lender on any Borrowing Date to the extent such Defaulting Lender fails to make such Loans.

Notwithstanding the foregoing, upon the termination of the Commitments and the payment and performance of all of the Obligations (other than those owing to a Defaulting Lender), any funds then held in escrow by the Administrative Agent pursuant to the preceding sentence shall be distributed to each Defaulting Lender, pro rata in proportion to amounts that would be due to each Defaulting Lender but for the fact that it is a Defaulting Lender.

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2.28 Extension of Termination Date.

(a) Requests for Extension. The Company may, by notice to the Administrative Agent (who shall promptly notify the Lenders) not earlier than 60 days and not later than 35 days prior to the first anniversary of the Closing Date and the second anniversary of the Closing Date, (each an “Extension Date”), request that each Lender extend such Lender’s Facility Termination Date for an additional one year from the Facility Termination Date then in effect hereunder (the “Existing Termination Date”); provided that in no event shall the Facility Termination Date for any Lender be extended beyond January 23, 2014.

(b) Lender Elections to Extend. Each Lender, acting in its sole and individual discretion, shall, by notice to the Administrative Agent given not later than the date that is ten (10) Business Days after receipt of notice from the Administrative Agent of the Borrower’s request for an extension (the “Notice Date”) advise the Administrative Agent whether or not such Lender agrees to such extension (each such Lender that determines to so extend its Facility Termination Date, being an “Extending Lender” and each Lender that determines not to so extend its Facility Termination Date, being a “Non-Extending Lender”). In the event that a Lender that does not so advise the Administrative Agent on or before the Notice Date such Lender shall be deemed to be a Non-Extending Lender. The election of any Lender to agree to such extension shall not obligate any other Lender to so agree.

(c) Notification by Administrative Agent. The Administrative Agent shall notify the Company of each Lender’s determination under this Section no later than the date 15 days prior to the applicable Extension Date (or, if such date is not a Business Day, on the next preceding Business Day).

(d) Additional Commitment Lenders. If (and only if) the Required Lenders have agreed to extend the Facility Termination Date then in effect hereunder, the Company shall have the right within 90 days after notification by the Administrative Agent pursuant to subsection (c) of this Section 2.28 to replace each Non-Extending Lender with, and add as “Lenders” under this Agreement, one or more Eligible Assignees (each, an “Additional Commitment Lender”) in accordance with the provisions contained in Section 2.26, each of which Additional Commitment Lenders shall have entered into an Assignment Agreement pursuant to which such Additional Commitment Lender shall, effective as of the date of the Assignment Agreement, undertake a Commitment (and, if any such Additional Commitment Lender is already a Lender, its Commitment shall be in addition to such Lender’s Commitment hereunder on such date).

(e) Minimum Extension Requirement. If (and only if) the Required Lenders have agreed so to extend the Facility Termination Date then in effect hereunder as described in this Section 2.28, then, effective as of such Extension Date, the Facility Termination Date of each Extending Lender and each Additional Commitment Lender shall be extended to the date falling one year after the Existing Termination Date (except that, if such date is not a Business Day, such date shall be the next preceding Business Day) and each Additional Commitment Lender shall thereupon become a “Lender” for all purposes of this Agreement; provided, however, that there shall be no change in the Facility Termination Date of any Non-Extending Lender that has not been replaced by an Additional Commitment Lender (each a “Non-Replaced Lender”).

(f) Conditions to Effectiveness of Extensions. Notwithstanding the foregoing, the extension of the Facility Termination Date pursuant to this Section shall not be effective with respect to any Lender unless:

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(i) no Default or Unmatured Default shall have occurred and be continuing on the date of such extension and after giving effect thereto;

(ii) the representations and warranties contained in Article V or any other Loan Document are true and correct on and as of the date of such extension and after giving effect thereto, as though made on and as of such date, except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date;

(iii) since the date of the financial statements most recently available under Section 6.1(a) or the date of the most recent 8-K report filed by the Company with the Securities and Exchange Commission, no event, circumstance or development shall have occurred that constitutes, has had or could reasonably be expected to constitute or to have a Material Adverse Effect; and

(iv) on the Facility Termination Date of each Non-Replaced Lender, the Borrowers shall prepay any Loans outstanding on such date (and pay any additional amounts required pursuant to Section 3.4) to the extent necessary to repay, nonratably, the Loans of such Non-Replaced Lenders and the Commitment of such Non-Replaced Lenders shall be terminated. The Commitment Percentages of the remaining Lenders shall be revised as of such date.

(g) Conflicting Provisions. This Section shall supersede any provisions in Section 8.2 or 11.2 to the contrary.

ARTICLE III.

YIELD PROTECTION; TAXES

3.1 Yield Protection.

(a) If, on or after the date of this Agreement, the adoption of any Law or any governmental or quasi-governmental policy or directive (whether or not having the force of Law), or any change in the interpretation or administration thereof by any governmental or quasi-governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender or applicable Lending Installation or the LC Issuer with any request or directive (whether or not having the force of Law) of any such authority, central bank or comparable agency (any such event, a “Change in Law”):

(i) subjects any Lender or any applicable Lending Installation or the LC Issuer to any Taxes, or changes the basis of taxation of payments (other than with respect to Excluded Taxes) to any Lender or the LC Issuer in respect of its Eurocurrency Loans, Facility LCs or participations therein, or

(ii) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation or the LC Issuer (other than reserves and assessments taken into account in determining the interest rate applicable to Eurocurrency Advances), or

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(iii) imposes any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation or the LC Issuer of maintaining its Commitment or making, funding or maintaining its Eurocurrency Loans (including, without limitation, any conversion of any Loan denominated in an Agreed Currency other than Euro into a Loan denominated in Euro), or of issuing or participating in Facility LCs, or reduces any amount receivable by any Lender or any applicable Lending Installation or the LC Issuer in connection with its Eurocurrency Loans, Facility LCs or participations therein, or requires any Lender or any applicable Lending Installation or the LC Issuer to make any payment calculated by reference to its Commitment or the amount of Eurocurrency Loans, Facility LCs or participations therein held or interest or LC fees received by it, by an amount deemed material by such Lender or the LC Issuer as the case may be,

and the result of any of the foregoing is to increase the cost to such Lender or applicable Lending Installation or the LC Issuer, as the case may be, of making or maintaining its Eurocurrency Loans (including, without limitation, any conversion of any Loan denominated in an Agreed Currency other than Euro into a Loan denominated in Euro) or Commitment or of issuing or participating in Facility LCs or to reduce the return received by such Lender or applicable Lending Installation or the LC Issuer, as the case may be, in connection with such Eurocurrency Loan, or Commitment, Facility LCs or participations therein, then, within 30 days of demand by such Lender or the LC Issuer, as the case may be, the relevant Borrower shall pay such Lender or the LC Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the LC Issuer for such increased cost or reduction in amount received.

(b) Non-U.S. Reserve Costs or Fees With Respect to Loans to Non-U.S. Borrowers. If any Law or any governmental or quasi-governmental policy or directive of any jurisdiction outside of the United States of America or any subdivision thereof (whether or not having the force of Law) imposes or deems applicable any reserve requirement against or fee with respect to assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation or the LC Issuer, and the result of the foregoing is to increase the cost to such Lender or applicable Lending Installation or the LC Issuer of making or maintaining its Eurocurrency Loans or of issuing or participating in Facility LCs to any Borrower that is not incorporated under the Laws of the United States of America or a state thereof (each a “Non-U.S. Borrower”) or its Commitment to any Non-U.S. Borrower or to reduce the return received by such Lender or applicable Lending Installation or the LC Issuer in connection with such Eurocurrency Loans, Facility LCs or participations therein to any Non-U.S. Borrower or its Commitment to any Non-U.S. Borrower, then, within 30 days of demand by such Lender or the LC Issuer, such Non-U.S. Borrower shall pay such Lender or the LC Issuer such additional amount or amounts as will compensate such Lender or the LC Issuer, as the case may be, for such increased cost or reduction in amount received; provided that such Non-U.S. Borrower shall not be required to compensate any Lender or the LC Issuer for such non-U.S. reserve costs or fees to the extent that an amount equal to such reserve costs or fees is received by such Lender or LC Issuer as a result of the calculation of the interest rate applicable to Eurocurrency Advances pursuant to clause (i)(b) of the definition of Eurocurrency Rate.

3.2 Changes in Capital Adequacy Regulations.

If a Lender or the LC Issuer determines the amount of capital required or expected to be maintained by such Lender or the LC Issuer, any Lending Installation of such Lender or the LC Issuer or any entity controlling such Lender or the LC Issuer is increased as a result of a Change (as defined below), then, within 15 days of demand by such Lender or the LC Issuer, the Company shall pay such Lender or the LC Issuer the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender or the LC Issuer determines is attributable to this

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Agreement, its Aggregate Outstanding Credit Exposure or its Commitment to make Loans and issue or participate in Facility LCs, as the case may be, hereunder (after taking into account such Lender’s or the LC Issuer’s policies as to capital adequacy). “Change” means (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any other Change in Law which affects the amount of capital required or expected to be maintained by any Lender or the LC Issuer or any Lending Installation or any entity controlling any Lender or the LC Issuer. “Risk-Based Capital Guidelines” means (i) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States implementing the July 1988 report of the Basel Committee on Banking Regulation and Supervisory Practices Entitled “International Convergence of Capital Measurements and Capital Standards,” including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement.

3.3 Availability of Types of Advances.

If any Lender determines that maintenance of its Eurocurrency Loans at a suitable Lending Installation would violate any applicable Law or directive, whether or not having the force of Law, or if the Required Lenders determine that (i) deposits of a type, currency and maturity appropriate to match fund Eurocurrency Advances are not available or (ii) the interest rate applicable to Eurocurrency Advances does not accurately reflect the cost of making or maintaining Eurocurrency Advances, then the Administrative Agent shall suspend the availability of Eurocurrency Advances and require any affected Eurocurrency Advances to be repaid or converted to Floating Rate Advances at the end of the then current Interest Period for the affected Eurocurrency Advance.

3.4 Funding Indemnification.

If any payment of a Eurocurrency Advance occurs, whether made by a Borrower or by a Lender or other assignee in connection with an assignment pursuant to Section 2.26, on a date which is not the last day of the applicable Interest Period, whether because of acceleration, prepayment, automatic conversion or otherwise, or a Eurocurrency Advance is not made on the date specified by a Borrower for any reason other than default by the Lenders, the Borrowers will indemnify each Lender for any loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain such Eurocurrency Advance.

3.5 Taxes.

(a) All payments by the Borrowers to or for the account of any Lender, the LC Issuer or the Administrative Agent hereunder or under any Note or Facility LC Application shall be made free and clear of and without deduction for any and all Taxes. If any Borrower shall be required by Law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender, the LC Issuer or the Administrative Agent, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.5) such Lender, the LC Issuer or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant authority in accordance with applicable Law and (iv) the Borrower shall furnish to the Administrative Agent the original copy of a receipt evidencing payment thereof within 30 days after such payment is made.

(b) In addition, the Borrowers hereby agree to pay any present or future stamp or documentary taxes and any other excise or property taxes, charges or similar levies which arise from any

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payment made hereunder or under any Note or Facility LC Application or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note or Facility LC Application (“Other Taxes”).

(c) The Borrowers hereby agree to indemnify the Administrative Agent, the LC Issuer and each Lender for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 3.5) paid by the Administrative Agent, the LC Issuer or such Lender and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payments due under this indemnification shall be made within 30 days of the date the Administrative Agent, the LC Issuer or such Lender makes demand therefor pursuant to Section 3.6.

(d) Each Lender that is not incorporated under the Laws of the United States of America or a state thereof (each a “Non-U.S. Lender”) agrees that it will, on or prior to the Closing Date, (i) deliver to each of the Company and the Administrative Agent two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement from the Company and any other Borrower that is not a Non-U.S. Borrower without deduction or withholding of any United States federal income taxes, or (ii) deliver to each of the Company and the Administrative Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to an exemption from United States backup withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of the Company and the Administrative Agent (x) renewals or additional copies of such form (or any successor form) on or before the date that such form expires or becomes obsolete, and (y) after the occurrence of any event requiring a change in the most recent forms so delivered by it, such additional forms or amendments thereto as may be reasonably requested by the Company or the Administrative Agent. All forms or amendments described in the preceding sentence shall certify that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, unless an event (including without limitation any change in Law) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form or amendment with respect to it and such Lender advises the Company and the Administrative Agent that it is not capable of receiving payments from the Company and any other Borrower other than a Non-U.S. Borrower without any deduction or withholding of United States federal income tax.

(e) For any period during which a Non-U.S. Lender has failed to provide the Company with an appropriate form pursuant to clause (d), above (unless such failure is due to a change in Law, occurring subsequent to the date on which a form originally was required to be provided), such Non-U.S. Lender shall not be entitled to indemnification under this Section 3.5 with respect to Taxes imposed by the United States; provided that, should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of withholding tax become subject to Taxes because of its failure to deliver a form required under clause (d) above, the Company shall take such steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to recover such Taxes.

(f) Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments under this Agreement or any Note pursuant to the Law of any relevant jurisdiction shall deliver to the Company (with a copy to the Administrative Agent), at the time or times prescribed by applicable Law, such properly completed and executed documentation prescribed by applicable Law as will permit such payments to be made without withholding or at a reduced rate. Each Multicurrency Lender which is neither a resident of the United Kingdom nor a bank carrying on a bona fide banking business in the United Kingdom agrees to furnish, on or before the date such Lender makes a Loan to a Borrower in the United Kingdom or denominated in British Pounds Sterling, to the

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Administrative Agent, the Company and any relevant Subsidiary Borrower evidence satisfactory to the Administrative Agent and the Company that such Lender has filed with the United Kingdom Inland Revenue a “Claim on Behalf of a United States Domestic Corporation to Relief from United Kingdom Income Tax on Interest and Royalties Arising in the United Kingdom” or other appropriate form or forms of exemption from withholding tax and received from the Inland Revenue authority that payments to such Lender by the relevant Borrower hereunder may be made gross; provided that such Lender’s failure to furnish such evidence shall not relieve the Company or any Subsidiary Borrower of any of their respective obligations under this Agreement, except as otherwise provided in this Section 3.5.

(g) If the U.S. Internal Revenue Service or any other governmental authority of the United States or any other country or any political subdivision thereof asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because such Lender failed to notify the Administrative Agent of a change in circumstances which rendered its exemption from withholding ineffective), such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax, withholding therefor, or otherwise, including penalties and interest, and including taxes imposed by any jurisdiction on amounts payable to the Administrative Agent under this subsection, together with all costs and expenses related thereto (including attorneys fees and time charges of attorneys for the Administrative Agent, which attorneys may be employees of the Administrative Agent). The obligations of the Lenders under this Section 3.5(g) shall survive the payment of the Obligations and termination of this Agreement.

3.6 Lender Statements; Survival of Indemnity.

To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Eurocurrency Loans to reduce any liability of the Borrowers to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurocurrency Advances under Section 3.3, so long as such designation is not, in the judgment of such Lender, disadvantageous to such Lender. Each Lender shall deliver a written statement of such Lender to the Borrowers (with a copy to the Administrative Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable detail the calculations upon which such Lender determined such amount and shall be final, conclusive and binding on the Borrowers in the absence of manifest error. Determination of amounts payable under such Sections in connection with a Eurocurrency Loan shall be calculated as though each Lender funded its Eurocurrency Loan through the purchase of a deposit of the type, currency and maturity corresponding to the deposit used as a reference in determining the Eurocurrency Rate applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided herein, the amount specified in the written statement of any Lender shall be payable on demand after receipt by the Borrowers of such written statement. The obligations of the Borrowers under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this Agreement.

3.7 Limitation/Delay in Requests.

Failure or delay on the part of any Lender or the LC Issuer to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the LC Issuer’s right to demand such compensation; provided that a Borrower shall not be required to compensate a Lender or the LC Issuer pursuant to this Section for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that such Lender or the LC Issuer, as the case may be, notifies such Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the LC Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

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ARTICLE IV.

CONDITIONS PRECEDENT

4.1 Initial Credit Extension.

The Lenders shall not be required to make the initial Credit Extension hereunder unless the Borrowers have satisfied the following conditions:

(a) Each Borrower has furnished to the Administrative Agent with sufficient copies for the Lenders:

(i) Copies of the articles or certificate of incorporation of such Borrower, together with all amendments, and a certificate of good standing, each certified by the appropriate governmental officer in its jurisdiction of incorporation.

(ii) Copies, certified by the Secretary or Assistant Secretary of such Borrower, of its by-laws or code of regulations and of its Board of Directors’ resolutions and of resolutions or actions of any other body authorizing the execution of the Loan Documents to which such Borrower is a party.

(iii) An incumbency certificate, executed by the Secretary or Assistant Secretary of such Borrower, which shall identify by name and title and bear the signatures of the Authorized Officers and any other officers of such Borrower authorized to sign the Loan Documents to which such Borrower is a party, upon which certificate the Administrative Agent and the Lenders shall be entitled to rely until informed of any change in writing by such Borrower.

(iv) A certificate, signed by the Chief Financial Officer or Treasurer of such Borrower, stating that on the Closing Date no Default or Unmatured Default has occurred and is continuing.

(v) Written opinions of Borrowers’ legal counsel, addressed to the Administrative Agent and the Lenders in substantially the form of Exhibit A.

(vi) Any Notes requested by a Lender pursuant to Section 2.15 payable to the order of each such requesting Lender.

(vii) Written money transfer instructions (if any), in substantially the form of Exhibit D for the purpose of telephonic notices pursuant to Section 2.16, addressed to the Administrative Agent and signed by an Authorized Officer, or such other related money transfer authorizations as the Administrative Agent may have reasonably requested.

(viii) The Guaranty, duly executed by the Company.

(ix) If the initial Credit Extension will be the issuance of a Facility LC, a properly completed Facility LC Application.

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(x) Such other documents as any Lender or its counsel may have reasonably requested.

(b) Evidence satisfactory to the Administrative Agent that, concurrently with the Closing Date, the Existing Credit Agreement has been amended and restated in its entirety, and the existing facility thereunder shall have been replaced with the Commitments under this Agreement; and any Existing Facility LCs shall be deemed to have been issued and outstanding under this Agreement and from and after the Closing Date shall be subject to and governed by the terms and conditions of this Agreement, including the terms of Section 2.21.1.

(c) Payment of the fees described in the Fee Letter.

4.2 Each Credit Extension.

The Lenders shall not be required to make, continue or convert any Credit Extension, and the Swingline Lender shall not be required to make any Swingline Loan or to increase Commitments pursuant to Section 2.2, unless on the applicable Credit Extension Date or date of conversion or continuation or the applicable date of any increase in the Commitments, the following conditions precedent have been satisfied:

(a) There exists no Default or Unmatured Default, nor would a Default or Unmatured Default result from such Credit Extension or increase in Commitments hereunder.

(b) The representations and warranties contained in Article V or any other Loan Document (other than Sections 5.5, 5.7 and 5.15) are true and correct in all material respects as of such Credit Extension Date and as of any date Commitments are increased hereunder except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date.

(c) Each Borrowing Notice, each Conversion/Continuation Notice or request for the issuance of a Facility LC with respect to each such Credit Extension or request for any increase in Commitments shall constitute a representation and warranty by the Borrower that the conditions contained in Sections 4.2(a) and (b) have been satisfied.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

The Company and each of the Borrowers represents and warrants to the Lenders that:

5.1 Existence and Standing.

Each of the Company, the Subsidiary Borrowers and the Significant Subsidiaries is a corporation, partnership (in the case of Subsidiary Borrowers or Significant Subsidiaries only) or limited liability company duly and properly incorporated or organized, as the case may be, validly existing and (to the extent such concept applies to such entity) in good standing under the Laws of its jurisdiction of incorporation or organization and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

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5.2 Authorization and Validity.

Each Borrower has the power and authority and legal right to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by each Borrower of the Loan Documents to which it is a party and the performance of its obligations thereunder have been duly authorized by proper corporate or other proceedings, and the Loan Documents to which such Borrower is a party constitute legal, valid and binding obligations of such Borrower enforceable against such Borrower in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or similar Laws affecting the enforcement of creditors’ rights generally.

5.3 No Conflict; Government Consent; Other Consents.

Neither the execution and delivery by the Borrowers of the Loan Documents to which they are a party, nor the consummation of the transactions therein contemplated, nor compliance with the provisions thereof will violate (i) any Law, order, writ, judgment, injunction, decree or award binding on any Borrower or (ii) any Borrower’s articles or certificate of incorporation, partnership agreement, certificate of partnership, articles or certificate of organization, by-laws, code or regulations, or operating or other management agreement, as the case may be, or (iii) the provisions of any indenture, instrument or material agreement to which any Borrower is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in, or require, the creation or imposition of any Lien in, of or on the Property of any Borrower pursuant to the terms of any such indenture, instrument or material agreement. No order, consent, adjudication, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or any subdivision thereof or any other Person, which has not been obtained by a Borrower, is required to be obtained by any Borrower in connection with the execution and delivery of the Loan Documents, the borrowings under this Agreement, the payment and performance by such Borrower of the Obligations or the legality, validity, binding effect or enforceability of any of the Loan Documents.

5.4 Financial Statements.

The following consolidated financial statements heretofore delivered to the Lenders were prepared in accordance with Agreement Accounting Principles in effect on the date such statements were prepared and fairly present the consolidated financial condition and operations in all material respects of the Company and its Subsidiaries at such date and the consolidated results of their operations for the period then ended (except for the Company’s determination to restate such financial statements: (i) to classify the Pharmaceutical Technologies and Services segment as discontinued operations, (ii) to reallocate to the remaining segments a portion of the corporate costs previously allocated to the Pharmaceutical Technologies and Services segment, and (iii) with respect to the June 30, 2006 audited consolidated financial statement of the Company and its Subsidiaries to reflect the Company’s new segment presentation), subject, in the case of such interim statements, to routine year-end audit adjustments:

(a) June 30, 2006 audited consolidated financial statements of the Company and its Subsidiaries; and

(b) September 30, 2006 unaudited interim consolidated financial statements of the Company and its Subsidiaries.

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5.5 Material Adverse Change.

Since the date of the most recent 10-Q or 8-K report filed by the Company with the Securities and Exchange Commission, there has been no change in the condition (financial or otherwise) or results of operations of the Company and its Subsidiaries taken as a whole which could reasonably be expected to have a Material Adverse Effect.

5.6 Taxes.

The Company, the Subsidiary Borrowers and the Significant Subsidiaries have filed all United States federal tax returns and all other tax returns which are required to be filed and have paid all taxes due pursuant to said returns or pursuant to any assessment received by the Company, the Subsidiary Borrowers or the Significant Subsidiaries, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with Agreement Accounting Principles and as to which no Lien exists. No tax liens have been filed and no claims are being asserted with respect to any such taxes which could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Company, the Subsidiary Borrowers and the Significant Subsidiaries in respect of any taxes or other governmental charges are adequate.

5.7 Litigation and Contingent Obligations.

Except as disclosed as material in the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2006 and Form 10-Q for fiscal quarter ended September 30, 2006, there is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or, to the knowledge of any of their officers or of any treasury or finance department employee of the Company serving as the Company’s primary representative relating to the transactions contemplated by this Agreement, threatened against or affecting the Company or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect or which seeks to prevent, enjoin or delay the making of any Credit Extensions. As of the date of this Agreement, other than any liability incident to any litigation, arbitration, investigation or proceeding which (i) could not reasonably be expected to have a Material Adverse Effect or (ii) has been disclosed in accordance with the foregoing sentence of this Section 5.7, the Company has no material Contingent Obligations not provided for or disclosed in the financial statements referred to in Section 5.4.

5.8 Significant Subsidiaries; Subsidiary Borrowers.

(a) Schedule 5.8 contains an accurate list of all Subsidiaries of the Company (other than immaterial or inactive Subsidiaries) and each Subsidiary Borrower as of September 30, 2006, setting forth their respective jurisdictions of organization, the percentage of their respective capital stock or other ownership interests owned by the Company or other Subsidiaries, the true and correct U.S. taxpayer identification number of the Company and each Subsidiary Borrower which is a Subsidiary organized under the Laws of any political subdivision of the U.S. and the true and correct unique identification number of each Subsidiary Borrower that is a Foreign Subsidiary Borrower. All of the issued and outstanding shares of capital stock or other ownership interests of such Significant Subsidiaries and Subsidiary Borrowers have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable, except to the extent that the lack of such status could not reasonably be expected to have a Material Adverse Effect. The Company may amend Schedule 5.8 from time to time by delivering to the Administrative Agent an updated list of Subsidiaries, and the Company may designate any Subsidiary thereon which is directly or indirectly 80% or more owned by the Company as a Subsidiary Borrower hereunder so long as (a) the Company provides

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the Administrative Agent and the Lenders ten (10) days’ prior notice of such designation, (b) the Company guarantees the obligations of such new Subsidiary Borrower pursuant to the terms of the Guaranty, (c) such new Subsidiary Borrower delivers all corporate or organizational documents and authorizing resolutions and legal opinions reasonably requested by the Administrative Agent together with such documentation as may be reasonably requested by the Administrative Agent and the Lenders in connection with “know your customer” and similar compliance requirements, (d) such new Subsidiary Borrower agrees to the terms and conditions of this Agreement and the Borrowers and the new Subsidiary Borrower execute all agreements and take such other action reasonably requested by Administrative Agent and (e) all applicable Lenders are able (i) under their respective internal policies and guidelines with respect to (A) lending to borrowers located in certain foreign jurisdictions and (B) lending in certain foreign currencies and (ii) under all constitutions, Laws, orders of courts or governmental authorities, to lend to such new Subsidiary Borrower. Schedule 5.8 may be amended to remove any Subsidiary as a Subsidiary Borrower upon (i) written notice by the Company to the Administrative Agent to such effect and (ii) repayment in full of all outstanding Loans of such Subsidiary Borrower, including, without limitation, any payments due to the Lenders under Sections 3.1, 3.2, 3.4, 3.5 and 9.6. Nothing in this Section 5.8 is intended to limit the ability of a Subsidiary Borrower to merge into another Subsidiary Borrower.

(b) Each of the Company and each Subsidiary Borrower organized under the Laws of a jurisdiction other than the United States, a State thereof or the District of Columbia (“Foreign Subsidiary Borrower”) represents and warrants to the Administrative Agent and the Lenders that:

(A) Such Foreign Subsidiary Borrower is subject to civil and commercial Laws with respect to its obligations under this Agreement and the other Loan Documents to which it is a party (collectively as to such Foreign Subsidiary Borrower, the “Applicable Foreign Subsidiary Borrower Documents”), and the execution, delivery and performance by such Foreign Subsidiary Borrower of the Applicable Foreign Subsidiary Borrower Documents constitute and will constitute private and commercial acts and not public or governmental acts. Neither such Foreign Subsidiary Borrower nor any of its Property has any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the Laws of the jurisdiction in which such Foreign Subsidiary Borrower is organized and existing in respect of its obligations under the Applicable Foreign Subsidiary Borrower Documents.

(B) The Applicable Foreign Subsidiary Borrower Documents are in proper legal form under the Law of the jurisdiction in which such Foreign Subsidiary Borrower is organized and existing for the enforcement thereof against such Foreign Subsidiary Borrower under the Law of such jurisdiction, and to ensure the legality, validity, enforceability, priority or admissibility in evidence of the Applicable Foreign Subsidiary Borrower Documents. It is not necessary to ensure the legality, validity, enforceability, priority or admissibility in evidence of the Applicable Foreign Subsidiary Borrower Documents that the Applicable Foreign Subsidiary Borrower Documents be filed, registered or recorded with, or executed or notarized before, any court or other authority in the jurisdiction in which such Foreign Subsidiary Borrower is organized and existing or that any registration charge or stamp or similar tax be paid on or in respect of the Applicable Foreign Subsidiary Borrower Documents or any other document, except for (x) any such filing, registration, recording, execution or notarization as has been made or is not required to be made until the Applicable Foreign Subsidiary Borrower Document or any other document is sought to be enforced and (y) any charge or tax as has been timely paid.

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(C) There is no tax, levy, impost, duty, fee, assessment or other governmental charge, or any deduction or withholding, imposed by any governmental authority in or of the jurisdiction in which such Foreign Subsidiary Borrower is organized and existing either (i) on or by virtue of the execution or delivery of the Applicable Foreign Subsidiary Borrower Documents or (ii) on any payment to be made by such Foreign Subsidiary Borrower pursuant to the Applicable Foreign Subsidiary Borrower Documents, except as has been disclosed to the Administrative Agent.

(D) The execution, delivery and performance of the Applicable Foreign Subsidiary Borrower Documents executed by such Foreign Subsidiary Borrower are not, under applicable foreign exchange control regulations of the jurisdiction in which such Foreign Subsidiary Borrower is organized and existing, subject to any notification or authorization except (x) such as have been made or obtained or (y) such as cannot be made or obtained until a later date (provided that any notification or authorization described in clause (y) shall be made or obtained as soon as is reasonably practicable).

5.9 ERISA.

The Unfunded Liabilities of all Single Employer Plans do not in the aggregate exceed $100,000,000. Each Single Employer Plan complies in all material respects with all applicable requirements of Law where the failure to so comply could reasonably be expected to have a Material Adverse Effect. No Reportable Event has occurred with respect to any Plan where such occurrence could reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of the Subsidiary Borrowers or the Significant Subsidiaries have withdrawn from any Plan or initiated steps to do so, and no steps have been taken to reorganize or terminate any Single Employer Plan where in either instance a liability in excess of $100,000,000 could reasonably be expected to result.

5.10 Accuracy of Information.

No information, exhibit or report furnished by the Company or any of its Subsidiaries to the Administrative Agent or to any Lender in connection with the negotiation of, or compliance with, the Loan Documents contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statements contained therein not misleading as of the date thereof; provided, however, that to the extent any such information, exhibits or reports include or incorporate by reference any forward-looking statement (each, a “Forward-Looking Statement”) which reflects the Company’s current view (as of the date such Forward-Looking Statement is made) with respect to future events, prospects, projections or financial performance, such Forward-Looking Statement is subject to uncertainties and other factors which could cause actual results to differ materially from such Forward-Looking Statement.

5.11 Regulation U.

Margin stock (as defined in Regulation U) constitutes less than 25% of the value of those assets of the Company and its Subsidiaries which are subject to any limitation on sale, pledge or other restriction hereunder.

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5.12 Maintenance of Property.

The Company and the Subsidiary Borrowers and the Significant Subsidiaries maintain all Property and keep such Property in good repair, working order and condition in accordance with customary and prudent business practices for similar businesses, except where the failure to do so could not reasonably be expected to cause a Material Adverse Effect.

5.13 Insurance.

The Company, each Subsidiary Borrower and each Significant Subsidiary, maintains as part of a self-insurance program or with financially sound and reputable insurance companies insurance on all their Property in such amounts (with such customary deductibles, exclusions and self-insurance) and covering such risks as is consistent with sound business practice.

5.14 Plan Assets; Prohibited Transactions.

The Company is not an entity deemed to hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within the meaning of Section 4975 of the Code), and neither the execution of this Agreement nor the making of Credit Extensions hereunder gives rise to a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code.

5.15 Environmental Matters.

In the ordinary course of its business, the Company considers the effect of Environmental Laws on the business of the Company and its Subsidiaries, in the course of which it identifies and evaluates potential risks and liabilities accruing to the Company due to Environmental Laws. On the basis of this consideration, the Company has concluded that Environmental Laws cannot reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received any notice to the effect that its operations are not in material compliance with any of the requirements of applicable Environmental Laws or are the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, which non-compliance or remedial action could reasonably be expected to have a Material Adverse Effect.

5.16 Investment Company Act.

Neither the Company nor any Subsidiary is an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

5.17 Default.

There exists no Default or Unmatured Default under Article VII of this Agreement.

5.18 Compliance with Laws.

The Company, each Subsidiary Borrower and each Significant Subsidiary is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law, order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted

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or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

ARTICLE VI.

COVENANTS

During the term of this Agreement, unless the Required Lenders shall otherwise consent in writing:

6.1 Financial Reporting.

The Company will maintain, for itself and each Subsidiary, a system of accounting established and administered in accordance with Agreement Accounting Principles, and furnish to the Lenders:

(a) Within 120 days after the close of each of its fiscal years, an unqualified (except for qualifications relating to changes in accounting principles or practices reflecting changes in Agreement Accounting Principles and required or approved by the Company’s independent certified public accountants) audit report certified by independent certified public accountants reasonably acceptable to the Lenders, prepared in accordance with Agreement Accounting Principles on a consolidated basis for itself and its Subsidiaries, including balance sheets as of the end of such period, related profit and loss statements, and a statement of cash flows.

(b) Within 60 days after the close of each of the first three quarterly periods of each fiscal year (beginning with the quarter ending December 31, 2006), for itself and its Subsidiaries, consolidated unaudited balance sheets as at the close of each such period and consolidated unaudited profit and loss statements and a consolidated unaudited statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter, all certified by its Chief Financial Officer, Controller, or Treasurer.

(c) Together with the financial statements required under Sections 6.1(a) and (b), a compliance certificate in substantially the form of Exhibit B signed by its Chief Financial Officer, Controller, or Treasurer and stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof.

(d) Documents required to be delivered pursuant to Sections 6.1(a) and (b) to the extent any such documents are included in materials filed with the Securities and Exchange Commission on the EDGAR filing system, shall be deemed to have been delivered on the date on which the Company posts such documents on EDGAR. Notwithstanding anything contained herein, in every instance the Company shall be required to provide paper copies of the Compliance Certificates required by Section 6.1(c) to the Administrative Agent. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and each Lender shall be solely responsible for obtaining its own copies of such documents.

Each Borrower hereby acknowledges that (a) the Administrative Agent and/or Banc of America Securities, as a Lead Arranger, will make available to the Lenders and the LC Issuer materials and/or information provided by or on behalf of such Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e. Lenders that do not wish to receive material non-public information with respect to any Borrower or its securities) (each, a “Public

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Lender”). Each Borrower hereby agrees that (i) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (ii) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative Agent, Banc of America Securities, as a Lead Arranger, the LC Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrowers or their respective securities for purposes of United States securities Laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 9.11); (iii) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (iv) the Administrative Agent and Banc of America Securities, as a Lead Arranger, shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

(e) As soon as possible and in any event within ten (10) Business Days after the Company knows that any Reportable Event has occurred with respect to any Plan which could reasonably be expected to have a Material Adverse Effect, a statement, signed by the Chief Financial Officer, Controller, or Treasurer of the Company, describing said Reportable Event and the action which the Company proposes to take with respect thereto.

(f) As soon as possible and in any event within ten (10) Business Days after receipt by the Company, a copy of (i) any notice or claim to the effect that the Company or any of its Subsidiaries is or may be liable to any Person as a result of the release by the Company, any of its Subsidiaries, or any other Person of any toxic or hazardous waste or substance into the environment, and (ii) any notice alleging any violation of any environmental, health or safety Law by the Company or any of its Subsidiaries, which, in either case, could reasonably be expected to have a Material Adverse Effect and (iii) any notice of any material governmental proceeding or material litigation, which, in either case, could reasonably be expected to have a Material Adverse Effect.

(g) Such other information (including non-financial information) as the Administrative Agent or any Lender may from time to time reasonably request.

6.2 Use of Proceeds; Margin Stock.

The Company will, and will cause each Subsidiary to, use the proceeds of the Credit Extensions: (i) to refinance any amounts outstanding under the Existing Credit Agreement (including any Existing Letters of Credit which shall be deemed to be Facility LCs issued and outstanding under this Agreement in accordance with the provisions in Section 2.21.1); (ii) for working capital (including the issuance of Facility LCs), (iii) for capital expenditures, (iv) to finance acquisitions and share repurchases and (v) for other lawful corporate purposes. The Company will not, nor will it permit any Subsidiary to, use any of the proceeds of any Credit Extension to purchase or carry any “margin stock” (as defined in Regulation U).

6.3 Notice of Default.

Promptly upon knowledge thereof by any officer of the Company, any Subsidiary Borrower or any Significant Subsidiary or by any treasury or finance department employee of the Company serving as the primary representative relating to the transactions contemplated by this Agreement, the Company will, and will cause each such Person to, give notice in writing to the Administrative Agent of the occurrence of any Default or Unmatured Default for prompt delivery to the Lenders.

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6.4 Conduct of Business; Maintenance of Property.

The Company will, and will cause each Subsidiary Borrower and each Significant Subsidiary to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted or fields related thereto, unless the failure to do so could not reasonably be expected to cause a Material Adverse Effect (except that the Company, the Subsidiary Borrowers and the Significant Subsidiaries shall have no duty to renew or extend contracts which expire by their terms), and do all things necessary to remain duly incorporated or organized, validly existing and (to the extent such concept applies to such entity) in good standing as a domestic corporation, partnership or limited liability company in its jurisdiction of incorporation or organization, as the case may be, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, unless the failure to do so could not reasonably be expected to have a Material Adverse Effect. The Company will, and will cause each Subsidiary Borrower and each Significant Subsidiary to, maintain, preserve and protect all Property and keep such Property in good repair, working order and condition and from time to time make, or cause to be made all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times in accordance with customary and prudent business practices for similar businesses, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.5 Taxes.

The Company will, and will cause each Subsidiary Borrower and each Significant Subsidiary to, timely file complete and correct United States federal and applicable foreign, state and local tax returns required by Law and pay when due all taxes, assessments and governmental charges and levies upon it or its income, profits or Property, except (i) those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside in accordance with Agreement Accounting Principles, and (ii) where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.6 Insurance.

The Company will, and will cause each Subsidiary Borrower and each Significant Subsidiary to, maintain as part of a self-insurance program or with financially sound and reputable insurance companies insurance on all their Property in such amounts (with such customary deductibles, exclusions and self-insurance) and covering such risks as is consistent with sound business practice.

6.7 Compliance with Laws.

The Company will, and will cause each Subsidiary Borrower and each Significant Subsidiary to, comply with all Laws, orders, writs, judgments, injunctions, decrees or awards to which it may be subject including, without limitation, ERISA and all Environmental Laws, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.8 Inspection.

The Company will, and will cause each Subsidiary Borrower and each Significant Subsidiary to, permit the Administrative Agent and the Lenders, by their respective representatives and agents, to inspect any of the Property, books and financial records of the Company, each Subsidiary Borrower and each Significant Subsidiary, to examine and make copies of the books of accounts and other financial

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records of the Company and each Subsidiary Borrower and each Significant Subsidiary, and to discuss the affairs, finances and accounts of the Company, each Subsidiary Borrower and each Significant Subsidiary with, and to be advised as to the same by, their respective officers upon reasonable prior notice at such reasonable times and intervals as the Administrative Agent or any Lender may designate; provided that neither the Company nor any Subsidiary Borrower or Significant Subsidiary shall be responsible for the costs and expenses incurred by the Administrative Agent, any Lender, or their representatives in connection with such inspection prior to the occurrence and continuation of a Default. Notwithstanding the foregoing, the Company will not be required to disclose privileged documents nor to violate a confidentiality obligation binding upon the Company.

6.9 Liens.

The Company will not, nor will it permit any Subsidiary Borrower or Significant Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the Property of the Company or any Subsidiary Borrower or Significant Subsidiary, except:

(a) Liens for taxes, assessments or governmental charges or levies on its Property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with Agreement Accounting Principles shall have been set aside on its books.

(b) Liens imposed by Law, such as landlords’, carriers’, warehousemen’s and mechanics’ liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than 60 days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with Agreement Accounting Principles shall have been set aside on its books.

(c) Liens arising out of pledges or deposits under worker’s compensation Laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation (other than Liens in favor of the PBGC).

(d) Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Company or its Subsidiaries.

(e) Liens existing on the date hereof.

(f) Liens on any assets which exist at the time of acquisition of such assets by the Company or any of its Subsidiaries, or purchase money liens, purchase money security interests or other liens to secure the payment of all of any part of the purchase price of such assets upon the acquisition of such assets by the Company or any of its Subsidiaries or to secure any Indebtedness incurred or guaranteed by the Company or any of its Subsidiaries prior to, at the time, of or within 360 days after, such acquisition (or, in the case of real property, the completion of construction (including any improvements on an existing asset) or commencement of full operation of such asset, whichever is later), which Indebtedness is incurred or guaranteed for the purpose of financing all or any part of the purchase price thereof or, in the case of real property, construction or improvements thereon, provided, however, that in the case of any such acquisition, construction or improvement, the Lien shall not apply to such assets theretofore owned by the Company or any of its Subsidiaries other than, in the case of any such construction or improvement, any real property on which the property so constructed, or the

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improvement, is located; provided further, however, that the aggregate outstanding principal amount of Indebtedness secured by Liens permitted by this Section 6.9(f) shall not at any time exceed 10% of Net Worth.

(g) Liens in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof, or in favor of any other country or any political subdivision thereof, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any Indebtedness incurred or guaranteed for the purpose of financing all or any part of the purchase price (or, in the case of real property, the cost of construction), of the assets subject to such liens (including without limitation liens incurred in connection with pollution control, industrial revenue or similar financings).

(h) Liens on accounts receivable arising solely in connection with the sale or transfer of such accounts receivable pursuant to a receivables purchase agreement in the ordinary course of the Company’s business.

(i) Any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part of any Lien referred to in the foregoing clauses, provided, however, that the principal amount of Indebtedness secured thereby shall not exceed the principal amount of Indebtedness so secured prior to such extension, renewal or replacement and that such extension, renewal or replacement Lien shall be limited to all or a part of the assets which secured the Lien so extended, renewed or replaced (plus improvements and construction on such real property).

(j) So long as no Default under Section 7.9 would occur in connection therewith, Liens created by or resulting from any litigation or other proceeding which is being contested in good faith by appropriate proceedings, including Liens arising out of judgments or awards against the Company or any of its Subsidiaries with respect to which the Company or such Subsidiary is in good faith prosecuting an appeal or proceeding for review or for which the time to make an appeal has not yet expired; or final unappealable judgment Liens which are satisfied within 15 days of the date of judgment; or Liens incurred by the Company or any of its Subsidiaries for the purpose of obtaining a stay or discharge in the course of any litigation or other proceeding to which the Company or such Subsidiary is a party.

(k) Liens securing Indebtedness described in Sections 6.10(d) and (e).

(l) Liens securing Indebtedness and not otherwise permitted by the foregoing provisions of this Section 6.9; provided that the aggregate outstanding principal amount of the Indebtedness secured by all such Liens shall not at any time exceed 20% of Net Worth.

6.10 Subsidiary Indebtedness.

The Company will not permit any Subsidiary to create, incur or suffer to exist any Indebtedness, except:

(a) the Loans and the Reimbursement Obligations.

(b) Indebtedness outstanding on the date of this Agreement or incurred pursuant to commitments in existence on the date of this Agreement.

(c) Indebtedness of any Subsidiary to the Company or any other Subsidiary.

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(d) Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that such Indebtedness existed at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary.

(e) any refunding or refinancing of any Indebtedness referred to in clauses (a) through (d) above; provided that any such refunding or refinancing of Indebtedness referred to in clause (b), (c) or (d) does not increase the principal amount thereof.

(f) Indebtedness arising from (i) the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, or (ii) the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business.

(g) Indebtedness arising from guarantees of loans and advances by third parties to employees and officers of a Subsidiary in the ordinary course of business for bona fide business purposes, provided that the aggregate outstanding principal amount of such Indebtedness does not at any time exceed $100,000,000.

(h) Indebtedness of a Subsidiary arising from agreements providing for indemnification, adjustment of purchase price or similar obligations or from guarantees, Letters of Credit, surety bonds or performance bonds securing any obligations of the Company or any of its Subsidiaries incurred or assumed in connection with the disposition of any business, property or Subsidiary.

(i) Indebtedness arising from Rate Hedging Obligations.

(j) Contingent Obligations (to the extent permitted by Section 6.11 and without duplication).

(k) Indebtedness outstanding under investment grade commercial paper programs.

(l) other Indebtedness; provided that, at the time of the creation, incurrence or assumption of such other Indebtedness and after giving effect thereto, the aggregate amount of all such other Indebtedness of the Subsidiaries does not exceed an amount equal to 20% of Net Worth at such time.

6.11 Contingent Obligations.

The Company will not permit any Subsidiary to make or suffer to exist any Contingent Obligation, except (i) by endorsement of instruments for deposit or collection in the ordinary course of business, (ii) the Reimbursement Obligations with respect to any Subsidiary Borrower, (iii) Contingent Obligations of special-purpose finance Subsidiaries, provided that no Person has recourse against the Company, any Subsidiary Borrower or any Significant Subsidiary for such Contingent Obligations, (iv) Contingent Obligations arising from the sale by Cardinal Health 301, LLC of lease receivables, leases or equipment, provided that the aggregate amount of such Contingent Obligations do not at any time exceed 10% of Net Worth, (v) Contingent Obligations arising out of operating or synthetic leases entered into by Subsidiaries of the Company, provided that the aggregate amount of such Contingent Obligations does not at any time exceed 10% of Net Worth, and (vi) Contingent Obligations in addition to, and including additional amounts of, those described in (i) and (v) above, provided that the aggregate amount of such additional Contingent Obligations (without duplication) do not at any time exceed 25% of Net Worth.

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6.12 Minimum Net Worth.

The Company shall not permit its Net Worth as of the end of any fiscal quarter of the Company to be less than $5,000,000,000.

ARTICLE VII.

DEFAULTS

The occurrence of any one or more of the following events shall constitute a Default:

7.1 Any representation or warranty made or deemed made by or on behalf of the Company or any of its Subsidiaries to the Lenders or the Administrative Agent under or in connection with this Agreement, any Credit Extension, or any certificate delivered in connection with this Agreement or any other Loan Document shall be materially false on the date as of which made.

7.2 Nonpayment of principal of any Loan within one (1) Business Day after the same becomes due, nonpayment of any Reimbursement Obligation within one (1) Business Day after the same becomes due, or nonpayment of interest upon any Loan or of any facility fee, LC Fee or other Obligations under any of the Loan Documents within five (5) days after the same becomes due.

7.3 The breach by the Company of Section 6.3 or 6.12.

7.4 The breach by any Borrower (other than a breach which constitutes a Default under another Section of this Article VII) of any of the terms or provisions of this Agreement which is not remedied within thirty (30) days after written notice from the Administrative Agent or any Lender.

7.5 The Company, any Subsidiary Borrower or any Significant Subsidiary (a) shall fail to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) in respect of any Indebtedness having an aggregate principal amount (excluding undrawn committed amounts, but including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $100 million or (b) shall fail to observe or perform any other agreement or condition relating to Indebtedness having an aggregate principal amount (excluding undrawn committed amounts, but including amounts owing to all creditors under any combined syndicated credit arrangement) of more than $100 million or contained in any instrument or other agreement evidencing, securing or relating thereto, the effect of which default is to cause such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), prior to its stated maturity.

7.6 The Company, any Subsidiary Borrower or any Significant Subsidiary shall (i) have an order for relief entered with respect to it under the Federal bankruptcy Laws (or any similar Laws in foreign jurisdictions) as now or hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any Substantial Portion, (iv) institute any proceeding seeking an order for relief under the Federal bankruptcy Laws (or any similar Laws in foreign jurisdictions) as now or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any Law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (v) take any corporate or partnership action to authorize or effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good faith any appointment or proceeding described in Section 7.7.

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7.7 Without the application, approval or consent of the Company, any Subsidiary Borrower or any Significant Subsidiary, a receiver, trustee, examiner, liquidator or similar official shall be appointed for the Company, any Subsidiary Borrower or any Significant Subsidiary or any Substantial Portion, or a proceeding described in Section 7.6(iv) shall be instituted against the Company, any Subsidiary Borrower or any Significant Subsidiary and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of 60 consecutive days.

7.8 Any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of, all or any portion of the Property of the Company and its Subsidiaries which, when taken together with all other Property of the Company and its Subsidiaries so condemned, seized, appropriated, or taken custody or control of, during the twelve-month period ending with the month in which any such action occurs, constitutes a Substantial Portion.

7.9 The Company, any Subsidiary Borrower or any Significant Subsidiary shall fail within 60 days to pay, bond or otherwise discharge one or more judgments or orders for the payment of money (not covered by insurance) in an aggregate amount (as to all judgments and orders) of $100 million (or the equivalent thereof in currencies other than U.S. Dollars) in which case, is/are not stayed, on appeal or otherwise being appropriately contested in good faith.

7.10 Any member of the Controlled Group shall fail to pay when due an amount or amounts aggregating in excess of $100 million which it shall have become liable to pay under Title IV of ERISA; or notice of intent to terminate a Single Employer Plan with Unfunded Liabilities in excess of $100 million (a “Material Plan”) shall be filed under Section 4041(c) of ERISA by any member of the Controlled Group, any plan administrator or any combination of the foregoing; or PBGC shall institute proceedings under which it is likely to prevail under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which causes one or more members of the Controlled Group to incur a current payment obligation in excess of $100 million.

7.11 Any Change in Control shall occur.

7.12 Any Loan Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Loan Document, or the Company shall fail to comply with any of the terms or provisions of any Loan Document (other than this Agreement, the breach of which is specifically subject to Sections 7.1, 7.2, 7.3 and 7.4), or the Company shall deny that it has any further liability under any Loan Document, or shall give notice to such effect.

ARTICLE VIII.

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

8.1 Acceleration; Facility LC Collateral Account.

(a) If any Default described in Section 7.6 or 7.7 occurs with respect to the Company, any Subsidiary Borrower or any Significant Subsidiary, the obligations of the Lenders to make Loans hereunder and the obligation and power of the LC Issuer to issue Facility LCs shall automatically terminate and the Obligations (other than Rate Hedging Obligations) shall immediately become due and

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payable without any election or action on the part of the Administrative Agent, the LC Issuer or any Lender and the Borrowers will be and become thereby unconditionally obligated, without any further notice, act or demand, to pay to the Administrative Agent an amount in immediately available funds, which funds shall be held in the Facility LC Collateral Account, equal to the difference of (x) the amount of LC Obligations at such time, less (y) the amount on deposit in the Facility LC Collateral Account at such time which is free and clear of all rights and claims of third parties and has not been applied against the Obligations (such difference, the “Collateral Shortfall Amount”). If any other Default occurs and is continuing, the Required Lenders (or the Administrative Agent with the consent of the Required Lenders) may (a) terminate or suspend the obligations of the Lenders to make Loans hereunder and the obligation and power of the LC Issuer to issue Facility LCs, or declare the Obligations to be due and payable, or both, whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Company hereby expressly waives and (b) upon notice to the Borrowers and in addition to the continuing right to demand payment of all amounts payable under this Agreement, make demand on the Borrowers to pay, and the Borrowers will, forthwith upon such demand and without any further notice or act, pay to the Administrative Agent the Collateral Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account.

(b) If at any time while any Default is continuing, the Administrative Agent determines that the Collateral Shortfall Amount at such time is greater than zero, the Administrative Agent may make demand on the Borrowers to pay, and the Borrowers will, forthwith upon such demand and without any further notice or act, pay to the Administrative Agent the Collateral Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account.

(c) The Administrative Agent may at any time or from time to time after funds are deposited in the Facility LC Collateral Account, subject to the reimbursement rights of the LC Issuer pursuant to Section 2.21.5, apply such funds to satisfy drawings under Letters of Credit as they occur and LC Obligations, and if any amount remains on deposit in the Facility LC Collateral Account after all such Letters of Credit have been fully drawn or expired, such remaining amount shall be applied to the payment of the other Obligations and any other amounts as shall from time to time have become due and payable by the Borrowers to the Lenders or the LC Issuer under the Loan Documents.

(d) At any time while any Default is continuing, neither any Borrower nor any Person claiming on behalf of or through any Borrower shall have any right to withdraw any of the funds held in the Facility LC Collateral Account. After all of the Obligations have been indefeasibly paid in full and the Aggregate Commitment has been terminated, any funds remaining in the Facility LC Collateral Account shall be promptly returned by the Administrative Agent to the Borrowers or paid to whomever may be legally entitled thereto at such time.

(e) If, within 60 days after acceleration of the maturity of the Obligations or termination of the obligations of the Lenders to make Loans and the obligation and power of the LC Issuer to issue Facility LCs hereunder as a result of any Default (other than any Default as described in Section 7.6 or 7.7 with respect to the Company) and before any judgment or decree for the payment of the Obligations due shall have been obtained or entered, the Required Lenders (in their sole discretion) shall so direct, the Administrative Agent shall, by notice to the Company, rescind and annul such acceleration and/or termination.

8.2 Amendments.

Subject to the provisions of this Article VIII, the Required Lenders and the Borrowers may enter into written agreements supplemental hereto for the purpose of adding or modifying any provisions to the

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Loan Documents or changing in any manner the rights of the Lenders or the Borrowers hereunder or waiving any Default hereunder; provided, however, that no such supplemental written agreement shall, without the consent of all of the Lenders:

(a) Extend the final maturity of any Loan, or extend the expiry date of any Facility LC to a date after the Facility Termination Date or postpone any regularly scheduled payment of principal of any Loan or forgive all or any portion of the principal amount thereof, any Reimbursement Obligation or any accrued interest or accrued fees, or reduce the rate or extend the time of payment of interest or fees thereon or any Reimbursement Obligation related thereto.

(b) Change the definition of Required Lenders or Requisite Lenders or any provision that requires the unanimous consent or pro rata treatment of Lenders.

(c) Extend the Facility Termination Date or reduce the amount or extend the payment date for, the mandatory payments required under Section 2.8, or increase the amount of the Aggregate Commitment (other than as contemplated pursuant to Section 2.2) or of the Commitment of any Lender hereunder (other than as contemplated pursuant to Section 2.2) or the commitment to issue Facility LCs, or permit any Borrower to assign its rights under this Agreement.

(d) Amend this Section 8.2.

(e) Release the Company as guarantor of any Advance.

No amendment of any provision of this Agreement relating to the Administrative Agent shall be effective without the written consent of the Administrative Agent, and no amendment of any provisions relating to the LC Issuer shall be effective without the written consent of the LC Issuer, and no amendment of any provision of this Agreement relating to the Swingline Loans shall be effective without the written consent of the Swingline Lender. The Administrative Agent may waive payment of the fee required under Section 12.1(b)(iv) without obtaining the consent of any other party to this Agreement. The Fee Letter may be amended, and rights and privileges thereunder waived, in a writing executed only by the parties thereto.

(f) Notwithstanding the foregoing, if any Lender declines to consent to a proposed amendment, modification or waiver of the provisions of any Loan Document that requires the consent of 100% of the Lenders which amendment, modification or waiver is approved by the Requisite Lenders, the Company has the right to replace such non-consenting Lender or Lenders in accordance with the provisions set forth in Section 2.26. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that such Lender’s Commitment or Facility Termination Date may not be increased or extended without the consent of such Lender.

8.3 Preservation of Rights

No delay or omission of the Lenders, the LC Issuer or the Administrative Agent to exercise any right under the Loan Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein, and the making of a Credit Extension notwithstanding the existence of a Default or the inability of a Borrower to satisfy the conditions precedent to such Loan shall not constitute any waiver or acquiescence. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing

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signed by the Lenders and/or other Persons required pursuant to Section 8.2, and then only to the extent in such writing specifically set forth. All remedies contained in the Loan Documents or by Law afforded shall be cumulative and all shall be available to the Administrative Agent, the LC Issuer and the Lenders until the later of (a) the Facility Termination Date and (b) the date on which the Obligations have been paid in full.

ARTICLE IX.

GENERAL PROVISIONS

9.1 Survival of Representations.

All representations and warranties of the Borrowers contained in this Agreement shall survive the making of the Credit Extensions herein contemplated.

9.2 Governmental Regulation.

Anything contained in this Agreement to the contrary notwithstanding, neither the LC Issuer nor any Lender shall be obligated to extend credit to the Borrowers in violation of any limitation or prohibition provided by any applicable Law.

9.3 Headings.

Section headings in the Loan Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents.

9.4 Entire Agreement.

The Loan Documents embody the entire agreement and understanding among the Borrowers, the Administrative Agent, the LC Issuer and the Lenders and supersede all prior agreements and understandings among the Borrowers, the Administrative Agent, the LC Issuer and the Lenders relating to the subject matter thereof.

9.5 Several Obligations; Benefits of this Agreement.

The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other (except to the extent to which the Administrative Agent is authorized to act as such). The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and permitted assigns, provided, however, that the parties hereto expressly agree that each of the Lead Arrangers shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.2 to the extent specifically set forth therein and shall have the right to enforce such provisions on its own behalf and in its own name to the same extent as if it were a party to this Agreement.

9.6 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrowers be jointly and severally liable to pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the preparation, negotiation, execution and delivery of the commitment letter, term sheet and Fee Letter

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relating to this Agreement, the syndication of the credit facility provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the LC Issuer in connection with the issuance, amendment or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, any Lender or the LC Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the LC Issuer), in connection with the enforcement or protection of its rights (A) in connection with the commitment letter, term sheet and Fee Letter relating to this Agreement, this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letter of Credit. For purposes of clarification, the limitations on the use of legal counsel, at the Borrowers’ expense, set forth in the final sentence of Section 9.6(b) apply to the provisions set forth in this Section 9.6(a).

(b) Indemnification by the Borrowers. The Borrowers shall jointly and severally indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the LC Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including, without limitation, any violations of Environmental Laws or civil penalties or fines assessed by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”)) (including the fees, charges and disbursement of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Company or any Borrower arising out of, in connection with, or as a result of (i) the execution or delivery of the commitment letter, term sheet and Fee Letter relating to this Agreement, and the execution or delivery of this Agreement or any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the LC Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of hazardous substances on or from any property owned or operated by any Company or any of its Subsidiaries, or any environmental liability related in any way to the Company or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Company or any Borrower, and regardless of whether an Indemnitee is a party thereof; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Company or any Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Company or any such Borrower has obtained a final judgment in its favor on such claim as determined by a court of competent jurisdiction. Notwithstanding any other provision in this Section, the Company and the Borrowers shall not be responsible for the fees and expenses of more than one separate firm of attorneys for related claims of the Indemnitees in each applicable jurisdiction arising out of the same set of allegations or circumstances (in addition to one separate firm of local attorneys in each jurisdiction and reasonably necessary specialty counsel (such as tax and regulatory)); provided, however the Indemnitees shall have the right to employ separate counsel

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and the Borrowers shall jointly and severally bear the reasonable fees, costs and expenses of such separate counsel, if (i) the use of such counsel chosen by the other Indemnitees to represent the Indemnitees would present such counsel with a conflict; (ii) such Indemnitee shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to the other Indemnitees; (iii) such Indemnitee shall have reasonably concluded that it otherwise has divergent interests from the other Indemnitees; or (iv) the Company shall authorize in writing such Indemnified Party to employ separate counsel at the Borrowers’ expense.

(c) Reimbursement by Lenders. To the extent that the Company and the Borrowers for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the LC Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the LC Issuer or such Related Party, as the case may be, such Lender’s share of such unpaid amount in proportion to their respective Commitments (or, if the Commitments have been terminated in proportion to their Commitments immediately prior to such termination (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense of indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the LC Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or LC Issuer in connection with such capacity.

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, neither the Company nor any Borrower shall assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, the Company or any Borrower, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, the commitment letter, term sheet or Fee Letter relating to this Agreement, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with the commitment letter, the term sheet and the Fee Letter relating to this Agreement, this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable not later than thirty (30) days after demand therefor.

(f) Survival. The agreements in this Section 9.6 shall survive the resignation of the Administrative Agent, LC Issuer and the Swingline Lender, the replacement of any Lender, the termination of the Aggregate Commitment and the repayment, satisfaction or discharge of all the other Obligations.

9.7 Numbers of Documents.

All statements, notices, closing documents, and requests hereunder shall be furnished to the Administrative Agent with sufficient counterparts so that the Administrative Agent may furnish one to each of the Lenders.

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9.8 Accounting.

Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with Agreement Accounting Principles except that any calculation or determination which is to be made on a consolidated basis shall be made for the Company and all its Subsidiaries, including those Subsidiaries, if any, which are unconsolidated on the Company’s audited financial statements.

9.9 Severability of Provisions.

Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.

9.10 No Advisory or Fiduciary Responsibility.

In connection with all aspects of each transaction contemplated hereby, the Company and each Borrower acknowledges and agrees and acknowledges its Affiliates’ understanding that: (i) the credit facility provided for hereunder and any related arranging or other services in connection herewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Company and each Borrower and their respective Affiliates, on the one hand, and the Administrative Agent and the Lead Arrangers, on the other hand, and the Company and each Borrower are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent, and each Lead Arranger, is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for any of the Company or any Borrower or any of their respective Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Administrative Agent nor any other Lead Arranger has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Company or any Borrower with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent or any Lead Arranger has advised or is currently advising any of the Company or any Borrower or their respective Affiliates on other matters) and neither the Administrative Agent nor any Lead Arranger has any obligations to the Company or Borrower or their respective Affiliates with respect to the transaction contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent, the Lead Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interest that differ from those of the Company or any Borrower and their respective Affiliates and neither the Administrative Agent nor any Lead Arranger has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent and the Lead Arrangers have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Company and each Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. The Company and each Borrower hereby waives and releases, to the fullest extent permitted by Law, any claims that it may have against the Administrative Agent and the Lead Arrangers with respect to any breach or alleged breach of agency or fiduciary duty.

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9.11 Treatment of Certain Information; Confidentiality.

Each of the Administrative Agent, the Lenders and the LC Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable Laws or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to a Borrower and its obligations, (g) with the consent of the Company or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the LC Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Company.

For purposes of this Section, “Information” means all information received from the Company or any Subsidiary relating to the Company or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the LC Issuer on a nonconfidential basis prior to disclosure by the Company or any Subsidiary; provided that in the case of written information received from the Company or any Subsidiary after the date hereof, such written information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Each of the Administrative Agent, the Lenders and the LC Issuer acknowledges that (a) the Information may include material non-public information concerning the Company or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law.

9.12 USA Patriot Act.

The Administrative Agent for itself and not on behalf of any Lender and each Lender hereby notifies each Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into Law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Company and each Borrower and other information that will allow such Lender to identify the Company and such Borrower in accordance with the Act.

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ARTICLE X.

THE AGENT

10.1 Appointment and Authority.

Each of the Lenders and the LC Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the LC Issuer, and neither the Company nor any Borrower have rights as a third party beneficiary of any of such provisions.

10.2 Rights as a Lender.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

10.3 Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law; and

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any of the Borrowers or any of their respective Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the

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circumstances as provided in Sections 8.1 and 8.2) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Unmatured Default or Default unless and until notice describing such Unmatured Default or Default is given to the Administrative Agent by the Company, a Lender or the LC Issuer.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Unmatured Default or Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

10.4 Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the LC Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the LC Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the LC Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

10.5 Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

10.6 Resignation of Administrative Agent.

The Administrative Agent may at any time give notice of its resignation to the Lenders, the LC Issuer and the Company. Upon receipt of any such notice of resignation, the Required Lenders shall have the right (with the consent of the Company unless a Default has occurred (any such consent of the Company not to be unreasonably withheld or delayed)) to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no

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such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the LC Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Company and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the LC Issuer directly, until such time as the Required Lenders and the Company (if applicable) appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Company to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 9.6 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as LC Issuer and Swingline Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring LC Issuer and Swingline Lender, (b) the retiring LC Issuer and Swingline Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor LC Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring LC Issuer to effectively assume the obligations of the retiring LC Issuer with respect to such Letters of Credit.

10.7 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender and the LC Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent, the Lead Arrangers or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the LC Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent, the Lead Arrangers or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

10.8 No Other Duties, Etc.

Anything herein to the contrary notwithstanding, none of the Book Managers, Lead Arrangers, Syndication Agents or Documentation Agents listed on the cover page hereof shall have any powers,

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duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the LC Issuer hereunder.

10.9 Administrative Agent May File Proofs of Claim.

In case of the pendency of any proceeding under any Federal bankruptcy Laws (or any similar Laws in foreign jurisdictions) or other judicial proceeding relative to the Company or any Borrower, the Administrative Agent (irrespective of whether the principal of any Loans or LC Obligations shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise, as follows:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the LC Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the LC Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due to the Lenders, the LC Issuer and the Administrative Agent under this Agreement) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the LC Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the LC Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.6 and 9.6.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the LC Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or LC Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or LC Issuer in any such proceeding.

ARTICLE XI.

SETOFF; RATABLE PAYMENTS

11.1 Right of Setoff.

If a Default shall have occurred and be continuing, each Lender, the LC Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Law, to setoff and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the LC Issuer or any such Affiliate to or for the credit or the account of the Company or any Borrower against any and all of the obligations of the Company or any Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender or the LC

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Issuer, irrespective of whether or not such Lender or the LC Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Company or any Borrower may be contingent or unmatured or are owed to a branch or office of such Lender or the LC Issuer different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender, the LC Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the LC Issuer or their respective Affiliates may have. Each Lender and the LC Issuer agrees to notify the Company and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

11.2 Ratable Payments.

If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations (other than pursuant to Sections 2.28, 3.1, 3.2, 3.4 or 3.5 hereof or payments of Alternate Currency Loans) greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans, subparticipations in the LC Obligations and Swingline Loans of other Lenders and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that

(a) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and

(b) the provisions of this Section shall not be construed to apply to (i) any payment made by a Borrower pursuant to and in accordance with the express terms of this Agreement or (ii) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in LC Obligations or Swingline Loans to any assignee or participant, other than to a Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Borrower in the amount of such participation.

ARTICLE XII.

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

12.1 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in

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accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b) participations in LC Obligations and in Swingline Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment Agreement with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment Agreement, as of the Trade Date) shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Default has occurred and is continuing, the Company otherwise consents (each such consent not to be unreasonably withheld or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not apply to the Swingline Lender’s rights and obligations in respect of the Swingline Loans;

(iii) Required Consents. No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

(A) the consent of the Company (such consent not to be unreasonably withheld or delayed) shall be required unless (x) a Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;

(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Lender or Affiliate of such Lender or an Approved Fund with respect to such Lender;

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(C) the consent of the LC Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and

(D) the consent of the Swingline Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment.

(iv) Assignment Agreement. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment Agreement, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an administrative questionnaire in a form provided by the Administrative Agent.

(v) No Assignment to Company. No such assignment shall be made to the Company or any of the Company’s Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment Agreement, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.1, 3.2, 3.4, 3.5 and 9.6 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Company, shall maintain at the Administrative Agent’s Office a copy of each Assignment Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Company and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural person or the Company or any of the Company’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties

74

hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent, the Lenders and the LC Issuer shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 8.2 that affects such Participant. Subject to paragraph (e) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4, 3.5 and 9.6 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 11.1 as though it were a Lender, provided such Participant agrees to be subject to Section 11.2 as though it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 3.5 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Company’s prior written consent. A Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of Section 3.5 unless the Company is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 3.5(d) as though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

ARTICLE XIII.

NOTICES

13.1 Notices.

Except as otherwise permitted by Section 2.16 with respect to borrowing notices, all notices, requests and other communications to any party hereunder shall be in writing (including electronic transmission, facsimile transmission or similar writing) and shall be given to such party: (x) in the case of the Borrowers or the Administrative Agent, at its address or facsimile number set forth on Schedule 13.1, (y) in the case of any Lender, at its address or facsimile number set forth below its signature hereto or (z) in the case of any party, at such other address or facsimile number as such party may hereafter specify for the purpose by notice to the Administrative Agent and the Borrowers in accordance with the provisions of this Section 13.1. Each such notice, request or other communication shall be effective (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section and confirmation of receipt is received, (ii) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid, or (iii) if given by any other means, when delivered (or, in the case of electronic transmission, received) at the address specified in this Section; provided that notices to the Administrative Agent under Article II shall not be effective until received.

75

13.2 Change of Address.

The Borrowers, the Administrative Agent and any Lender may each change the address for service of notice upon it by five (5) days’ prior written notice to the other parties hereto.

13.3 The Platform.

THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED FOR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE EFFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its related parties (collectively, the “Agent Parties”) have any liability to any Borrower, any Lender, the LC Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet.

ARTICLE XIV.

COUNTERPARTS

This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Borrowers, the Administrative Agent, the LC Issuer and the Lenders and each party has notified the Administrative Agent by facsimile transmission or telephone that it has taken such action.

ARTICLE XV.

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

15.1 CHOICE OF LAW.

THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 AND SECTION 5-1402 OF THE GENERAL OBLIGATION LAW OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ANY OTHER CONFLICTS OF LAW PRINCIPLES THEREOF.

15.2 CONSENT TO JURISDICTION.

EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND EACH BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR

76

PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY BORROWER AGAINST THE ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK.

15.3 WAIVER OF JURY TRIAL.

THE BORROWERS, THE ADMINISTRATIVE AGENT, THE LC ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

77

IN WITNESS WHEREOF, the Borrowers, the Lenders, the LC Issuer and the Administrative Agent have executed this Agreement as of the date first above written.

CARDINAL HEALTH, INC.
By:	/s/ Jeffrey W. Henderson
Name:	Jeffrey W. Henderson
Title:	Chief Financial Officer

By:	/s/ Linda S. Harty
Name:	Linda S. Harty
Title:	Executive Vice President and Treasurer

Signature Page

Five-Year Credit Agreement

BANK OF AMERICA, N.A., as Administrative Agent
By:	/s/ Anglela Lau
Name:	Anglela Lau
Title:	Assistant Vice President

Signature Page

Five-Year Credit Agreement

BANK OF AMERICA, N.A., as Lender, LC Issuer and Swingline Lender
By:	/s/ Richard Hardison
Name:	Richard Hardison
Title:	Vice President

Signature Page

Five-Year Credit Agreement

JPMORGAN CHASE BANK, N.A., as a Lender
By:	/s/ Lisa Whatley
Name:	Lisa Whatley
Title:	Senior Vice President

Signature Page

Five-Year Credit Agreement

BARCLAYS BANK PLC, as a Lender
By:	/s/ Russell Johnson
Name:	Russell Johnson
Title:	Associate Director

Signature Page

Five-Year Credit Agreement

MORGAN STANLEY BANK, as a Lender
By:	/s/ Daniel Twenge
Name:	Daniel Twenge
Title:	Authorized Signatory, Morgan Stanley Bank

Signature Page

Five-Year Credit Agreement

DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender
By:	/s/ Frederick W. Laird
Name:	Frederick. W. Laird
Title:	Managing Director
By:	/s/ Ming K. Chu
Name:	Ming K. Chu
Title:	Vice President

Signature Page

Five-Year Credit Agreement

ABN AMRO BANK N.V., as a Lender
By:	/s/ David Carrington
Name:	David Carrington
Title:	Director
By:	/s/ Nick Zorin
Name:	Nick Zorin
Title:	Assistant Vice President

Signature Page

Five-Year Credit Agreement

WILLIAM STREET COMMITMENT CORPORATION (Recourse only to assets of William Street Commitment Corporation), as a Lender
By:	/s/ Mark Walton
Name:	Mark Walton
Title:	Assistant Vice President

Signature Page

Five-Year Credit Agreement

UBS LOAN FINANCE LLC, as a Lender
By:	/s/ Richard L. Tavrow
Name:	Richard L. Tavrow
Title:	Director
By:	/s/ Irja R. Otsa
Name:	Irja R. Otsa
Title:	Associate Director

Signature Page

Five-Year Credit Agreement

THE BANK OF NOVA SCOTIA, as a Lender
By:	/s/ Gregory E. George
Name:	Gregory E. George
Title:	Managing Director

Signature Page

Five-Year Credit Agreement

THE BANK OF TOKYO – MITSUBISHI UFJ, LTD., CHICAGO BRANCH, as a Lender
By:	/s/ Masakazu Sato
Name:	Masakazu Sato
Title:	Deputy General Manager

Signature Page

Five-Year Credit Agreement

CITIBANK, N.A., as a Lender
By:	/s/ Christopher Snider
Name:	Christopher Snider
Title:	Vice President

Signature Page

Five-Year Credit Agreement

FIFTH THIRD BANK, as a Lender
By:	/s/ Brent Jackson
Name:	Brent Jackson
Title:	Vice President

Signature Page

Five-Year Credit Agreement

NATIONAL CITY BANK, as a Lender
By:	/s/ Thomas E. Redmond
Name:	Thomas E. Redmond
Title:	Senior Vice President

Signature Page

Five-Year Credit Agreement

PNC BANK NATIONAL ASSOCIATION, as a Lender
By:	/s/ Mary Ann Amshoff
Name:	Mary Ann Amshoff
Title:	Vice President

Signature Page

Five-Year Credit Agreement

SUNTRUST BANK, as a Lender
By:	/s/ William D. Priester
Name:	William D. Priester
Title:	Director

Signature Page

Five-Year Credit Agreement

WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Kirk Tesch
Name:	Kirk Tesch
Title:	Vice President

Signature Page

Five-Year Credit Agreement

US BANK, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Michael P. Dickman
Name:	Michael P. Dickman
Title:	Vice President, U.S. Bank, N.A.

Signature Page

Five-Year Credit Agreement

SCHEDULE 1.1

COST RATE SCHEDULE

Cost Rate Formulae

1. The Cost Rate is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England and/or the United Kingdom’s Financial Services Authority (the “Financial Services Authority”) (or, in either case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.

2. On the first day of each Interest Period (or as soon as possible thereafter), the Administrative Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender in accordance with the paragraphs set out below. The Cost Rate will be calculated by the Administrative Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Loan) and will be expressed as a percentage rate per annum.

3. The Additional Cost Rate for any Lender lending from a Lending Installation in a Participating Member State will be the percentage notified by that Lender to the Administrative Agent. This percentage will be certified by that Lender in its notice to the Administrative Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Loans made from that Lending Installation) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that Lending Installation.

4. The Additional Cost Rate for any Lender lending from a Lending Installation in the United Kingdom will be calculated by the Administrative Agent as follows:

(a) in relation to a Loan denominated in British Pounds Sterling:

AB + C(B – D) + E x 0.01	percent per annum
100 – (A + C)

(b) in relation to a Loan denominated in any currency other than British Pounds Sterling:

E x 0.01	percent per annum
300

Where:

A is the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest free cash ratio deposit with the Bank of England to comply with cash ratio requirements.

B is the percentage rate of interest (excluding the Applicable Margin and Cost Rate and, if the same would otherwise apply, the additional Overdue Rate/Default rate for the relevant Interest Period on the relevant Loan.

C is the percentage (if any) of Eligible Liabilities which that Lender is required from time to time to maintain as interest bearing Special Deposits with the Bank of England.

Schedule 1.1

Page 1

D is the percentage rate per annum payable by the Bank of England to the Administrative Agent on interest bearing Special Deposits.

E is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Administrative Agent as being the average of the most recent rates of charge supplied by the Lenders to the Administrative Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

5. For the purposes of this Cost Rate Schedule:

(a) “Eligible Liabilities” has the meaning given to it from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;

(b) “Fees Rules” means the rules on periodic fees contained in the FSA Supervision Manual or such other Law as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;

(c) “Fee Tariffs” means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate);

(d) “Special Deposits” has the meanings given to it from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England; and

(e) “Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.

6. In application of the above formulae, A, B, C and D will be included in the formulae as percentages (i.e., 5 percent will be included in the formula as 5 and not as 0.05). A negative result obtained by subtracting D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places.

7. If requested by the Administrative Agent, each Lender with a Lending Installation in the United Kingdom or a Participating Member State shall, as soon as practicable after publication by the Financial Services Authority, supply to the Administrative Agent the rate of charge payable by that Lender to the Financial Services Authority pursuant to the Fees

Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Lender as being the average of the Fee Tariffs applicable to that Lender for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Lender.

8. Each Lender shall supply any information required by the Administrative Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information on or prior to the date on which it becomes a Lender:

(a) the jurisdiction of its Lending Installation; and

(b) any other information that the Administrative Agent may reasonably require for such purpose.

Schedule 1.1

Page 2

Each Lender shall promptly notify the Administrative Agent in writing of any change to the information provided by it pursuant to this paragraph.

9. The percentages of each Lender for the purpose of A and C above and the rates of charge of each Lender for the purpose of E above shall be determined by the Administrative Agent based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies the Administrative Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a Lending Installation in the same jurisdiction as its Lending Installation.

10. The Administrative Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender pursuant to paragraphs 3, 7 and 8 above is true and correct in all respects.

11. The Administrative Agent shall distribute the additional amounts received as a result of the Cost Rate to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender pursuant to paragraphs 3, 7 and 8 above.

12. Any determination by the Administrative Agent pursuant to this Cost Rate Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties.

13. The Administrative Agent may from time to time, after consultation with the Borrowers and the Lenders, determine and notify to all parties of any amendments which are required to be made to this Cost Rate Schedule in order to comply with any change in Law or any requirements from time to time imposed by the Bank of England, the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties.

Schedule 1.1

Page 3

SCHEDULE 2.1(a)

COMMITMENTS

Lender		Dollar Commitment			Multicurrency Commitment			Total Commitment
Bank of America, N.A.		$	116,666,666.62		$	23,333,333.38		$	140,000,000
JPMorgan Chase Bank, N.A.		$	116,666,666.67		$	23,333,333.33		$	140,000,000
Barclays Bank PLC		$	116,666,666.67		$	23,333,333.33		$	140,000,000
Morgan Stanley Bank		$	110,000,000		$	22,000,000		$	132,000,000
Deutsche Bank AG		$	110,000,000		$	22,000,000		$	132,000,000
ABN Amro Bank N.V.		$	101,666,666.67		$	20,333,333.33		$	122,000,000
William Street Commitment Corporation		$	101,666,666.67		$	20,333,333.33		$	122,000,000
UBS Loan Finance LLC		$	101,666,666.67		$	20,333,333.33		$	122,000,000
The Bank of Nova Scotia		$	41,666,666.67		$	8,333,333.33		$	50,000,000
The Bank of Tokyo – Mitsubishi UFJ, Ltd., Chicago Branch		$	41,666,666.67		$	8,333,333.33		$	50,000,000
Citibank, N.A.		$	41,666,666.67		$	8,333,333.33		$	50,000,000
Fifth Third Bank		$	41,666,666.67		$	8,333,333.33		$	50,000,000
National City Bank		$	41,666,666.67		$	8,333,333.33		$	50,000,000
PNC Bank National Association		$	41,666,666.67		$	8,333,333.33		$	50,000,000
SunTrust Bank		$	41,666,666.67		$	8,333,333.33		$	50,000,000
Wachovia Bank, National Association		$	41,666,666.67		$	8,333,333.33		$	50,000,000
US Bank, National Association		$	41,666,666.67		$	8,333,333.33		$	50,000,000
	Total:	$	1,250,000,000	Total:	$	250,000,000	Total:	$	1,500,000,000

Schedule 2.1(a)

Page 1

SCHEDULE 2.1(c)

ALTERNATE CURRENCY COMMITMENT

Schedule 2.1(c)

Page 1

SCHEDULE 2.16

LIST OF AUTHORIZED PERSONS UNDER SECTION 2.16

Jeff Henderson – Executive Vice President and Chief Financial Officer

Linda Harty – Executive Vice President and Treasurer

Jorge Gomez – Vice President and Assistant Treasurer

Jon Lyons – Director, Financial Risk and Capital Markets

Jennifer Hess – Manager, Treasury Operations

Schedule 2.16

Page 1

SCHEDULE 2.19

LENDING INSTALLATIONS

Schedule 2.19

Page 1

SCHEDULE 4

PRICING SCHEDULE

The Applicable Margin shall be as determined by the matrix below:

	Level I Status	Level II Status	Level III Status	Level IV Status	Level V Status	Level VI Status
Reference Rating S&P/Moody’s/Fitch	> A+/A1/ A+	A/A2/A	A-/A3/A-	BBB+/ Baa1/ BBB+	BBB/ Baa2/ BBB	£ BBB-/ Baa3/ BBB-
Facility Fee	5.0 bps	6.0 bps	7.0 bps	8.0 bps	10.0 bps	12.5 bps
Eurocurrency Rate Applicable Margin and LC Fee	10.0 bps	14.0 bps	18.0 bps	24.0 bps	30.0 bps	37.5 bps
All-in Drawn Cost	15.0 bps	20.0 bps	25.0 bps	32.0 bps	40.0 bps	50.0 bps

The Initial Pricing Level shall be Level V based upon the Company’s current BBB (S&P)/Baa2 (Moody’s)/BBB + (Fitch) senior unsecured long-term debt ratings.

For the purpose of this Pricing Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:

“Level I Status” exists at any date if, on such date, the Company’s Moody’s Rating is A1 or better / the Company’s S&P Rating is A+ or better / the Company’s Fitch Rating is A+ or better.

“Level II Status” exists at any date if, on such date, the Company has not qualified for Level I Status / the Company’s Moody’s Rating is A2 or better / the Company’s S&P Rating is A or better / the Company’s Fitch Rating is A or better.

“Level III Status” exists at any date if, on such date, the Company has not qualified for Level I Status or Level II Status / the Company’s Moody’s Rating is A3 or better / the Company’s S&P Rating is A- or better / the Company’s Fitch Rating is A- or better.

“Level IV Status” exists at any date if, on such date, the Company has not qualified for Level I Status, Level II Status or Level III Status / the Company’s Moody’s Rating is Baa1 or better / the Company’s S&P rating is BBB+ or better / the Company’s Fitch rating is BBB+ or better.

“Level V Status” exists at any date if, on such date, the Company has not qualified for Level I Status, Level II Status, Level III Status or Level IV Status / the Company’s Moody’s Rating is Baa2 or better / the Company’s S&P rating is BBB or better / the Company’s Fitch Rating is BBB or better.

“Level VI Status” exists at any date if, on such date, the Company has not qualified for Level I Status, Level II Status, Level III Status, Level IV Status or Level V Status.

Schedule 4

Page 1

The Applicable Margin shall be determined in accordance with the foregoing table based on the Company’s Status as determined from its then-current Moody’s, S&P and Fitch Ratings. The credit rating in effect on any date for the purposes of this Schedule is that in effect at the close of business on such date. If at any time the Company has no Moody’s Rating, no S&P Rating, or no Fitch Rating, Level VI Status shall exist.

In the event that a split occurs between the three (3) ratings, then the following shall apply:

(a) if two (2) of the three (3) ratings established by or deemed to have been established by S&P, Moody’s or Fitch fall within the same Level, but one (1) rating falls within a different Level, the Applicable Margin shall be based upon the two (2) ratings that fall within the same Level; and

(b) if all three (3) ratings established by or deemed to have been established by S&P, Moody’s or Fitch each fall within a different Level, the Applicable Margin shall be based upon the middle rating of the three (3).

“Moody’s Rating” means, at any time, the rating issued by Moody’s and then in effect with respect to the Company’s senior unsecured long-term debt securities without third-party credit enhancement.

“S&P Rating” means, at any time, the rating issued by S&P, and then in effect with respect to the Company’s senior unsecured long-term debt securities without third-party credit enhancement.

“Fitch Rating” means, at any time, the rating issued by Fitch and then in effect with respect to the Company’s senior unsecured long-term debt securities without third-party credit enhancement.

“Status” means Level I Status, Level II Status, Level III Status, Level IV Status, Level V Status, or Level VI Status.

Schedule 4

Page 2

SCHEDULE 5.8

LIST OF SIGNIFICANT SUBSIDIARIES AND SUBSIDIARY BORROWERS

AS OF SEPTEMBER 30, 2006

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
1.	6464661 Canada, Inc.	Canada	*	No
2.	Abilene Nuclear, LLC	Delaware	•      80% Cardinal Health 414, Inc.	No
3.	ALARIS Medical Systems Foreign Sales Corporation	Barbados	*	No
4.	ALARIS Medical Luxembourg II S.à.r.l.	Luxembourg	*	No
5.	ALARIS Medical 1 (Suisse), S.à.r.l.	Switzerland	*	No
6.	ALARIS Medical Cayman Islands	Cayman Islands	*	No
7.	Alcon – Building Branch	Puerto Rico	*	No
8.	Allcaps Weichgelatinkapseln GmbH & Co. KG	Germany	*	No
9.	Allcaps Weichgelatinkapseln Verwaltungs GmbH	Germany	*	No
10.	Allegiance (BVI) Holdings Co. Ltd.	British Virgin Islands	*	No
11.	Allegiance Corporation	Delaware	*	No
12.	Allegiance Healthcare (Labuan) Pte. Ltd.	Malaysia	*	No
13.	Allegiance Healthcare Holding B.V.	Netherlands	*	No

Schedule 5.8

Page 1

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
14.	Allegiance Healthcare International GmbH	Austria	*	No
15.	Allegiance Labuan Holdings Pte. Ltd.	Malaysia	*	No
16.	Aurum Pharmaceuticals Limited	United Kingdom	*	No
17.	Bauer Branch	Dominican Republic	*	No
18.	Beckloff Associates, Inc.	Kansas	*	No
19.	C. International, Inc.	Ohio	*	No
20.	Cardal II, LLC	Delaware	*	No
21.	Cardal, Inc.	Ohio	*	No
22.	Cardinal Distribution Holding Corporation – I	Nevada	*	No
23.	Cardinal Distribution Holding Corporation – II	Nevada	*	No
24.	Cardinal Health (Bermuda) 224 Ltd.	Bermuda	*	No
25.	Cardinal Health 100, Inc.	Indiana	*	No
26.	Cardinal Health 101, Inc.	Delaware	*	No
27.	Cardinal Health 104 LP	Ohio	*	No
28.	Cardinal Health 105, Inc.	Ohio	*	No

Schedule 5.8

Page 2

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
29.	Cardinal Health 107, Inc.	Ohio	*	No
30.	Cardinal Health 108, Inc.	Tennessee	*	No
31.	Cardinal Health 109, Inc.	Texas	*	No
32.	Cardinal Health 110, Inc.	Delaware	*	No
33.	Cardinal Health 111, LLC	Delaware	*	No
34.	Cardinal Health 112, LLC	Delaware	*	No
35.	Cardinal Health 113, LLC	Wisconsin	*	No
36.	Cardinal Health 2, Inc.	Nevada	*	No
37.	Cardinal Health 200, Inc.	Delaware	*	No
38.	Cardinal Health 201, Inc.	Delaware	*	No
39.	Cardinal Health 222 (Thailand) Ltd.	Thailand	*	No
40.	Cardinal Health 3, LLC	Delaware	*	No
41.	Cardinal Health 301, LLC	Delaware	*	No
42.	Cardinal Health 302, LLC	Delaware	*	No
43.	Cardinal Health 303, Inc.	Delaware	*	No
44.	Cardinal Health 304, LLC	Delaware	*	No
45.	Cardinal Health 400, Inc.	Illinois	*	No

Schedule 5.8

Page 3

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
46.	Cardinal Health 406, LLC	Delaware	*	No
47.	Cardinal Health 409, Inc.	Delaware	*	No
48.	Cardinal Health 411, Inc.	Ohio	*	No
49.	Cardinal Health 414, Inc.	Delaware	*	No
50.	Cardinal Health 416, Inc.	Puerto Rico	*	No
51.	Cardinal Health 417, Inc.	Puerto Rico	*	No
52.	Cardinal Health 418, Inc.	Delaware	*	No
53.	Cardinal Health 420, LLC	Delaware	*	No
54.	Cardinal Health 421 Limited Partnership	Scotland	*	No
55.	Cardinal Health 421, Inc.	Delaware	*	No
56.	Cardinal Health 5, LLC	Delaware	*	No
57.	Cardinal Health 6, Inc.	Nevada	*	No
58.	Cardinal Health 7, LLC	Delaware	*	No
59.	Cardinal Health Argentina 400 S.A.I.C.	Argentina	*	No
60.	Cardinal Health Australia 200 Pty Ltd	Australia	*	No
61.	Cardinal Health Australia 300 Pty Ltd	Australia	*	No

Schedule 5.8

Page 4

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
62.	Cardinal Health Australia 316 Pty Limited	Australia	*	No
63.	Cardinal Health Australia 401 Pty Ltd	Australia	*	No
64.	Cardinal Health Austria 201 GmbH	Austria	*	No
65.	Cardinal Health Belgium 202 S.P.R.L.	Belgium	*	No
66.	Cardinal Health Brasil 402 Ltda.	Brazil	*	No
67.	Cardinal Health Canada 204, Inc.	Canada	*	No
68.	Cardinal Health Canada 301, Inc.	Canada	*	No
69.	Cardinal Health Canada 302, Inc.	Canada	*	No
70.	Cardinal Health Canada 307 ULC	Canada	*	No
71.	Cardinal Health Canada 403, Inc.	Canada	*	No
72.	Cardinal Health Capital Corporation	Ohio	*	No
73.	Cardinal Health Cardiology Solutions, LLC	Delaware	*	No
74.	Cardinal Health Corporate Solutions, LLC	Nevada	*	No

Schedule 5.8

Page 5

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
75.	Cardinal Health D.R. 203 Ltd.	Bermuda	*	No
76.	Cardinal Health Espana 308 S.L.	Spain	*	No
77.	Cardinal Health Europe IT GmbH	Germany	*	No
78.	Cardinal Health Finance	United Kingdom	*	No
79.	Cardinal Health Finance Partners 229 L.P.	Canada	*	No
80.	Cardinal Health France 205 S.A.S.	France	*	No
81.	Cardinal Health France 309 S.A.S.	France	*	No
82.	Cardinal Health France 404 S.A.	France	•      99.7083% Cardinal Health 409, Inc. •      0.1456% F & F Holding GmbH	No
83.	Cardinal Health France 428 S.A.S.	France	*	No
84.	Cardinal Health France 429 S.A.S.	France	*	No
85.	Cardinal Health France 430 S.A.S.	France	*	No
86.	Cardinal Health France 431 S.A.S.	France	*	No
87.	Cardinal Health Funding, LLC	Nevada	*	No

Schedule 5.8

Page 6

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
88.	Cardinal Health GbR	Germany	*	No
89.	Cardinal Health Germany 206 GmbH	Germany	*	No
90.	Cardinal Health Germany 318 GmbH	Germany	*	No
91.	Cardinal Health Germany 405 GmbH	Germany	*	No
92.	Cardinal Health Germany Holdings GmbH	Germany	*	No
93.	Cardinal Health Holding GmbH	Germany	*	No
94.	Cardinal Health Holding International, Inc.	New Jersey	*	No
95.	Cardinal Health Holding Pty Ltd	Australia	*	No
96.	Cardinal Health Holdings Limited	United Kingdom	*	No
97.	Cardinal Health International Ventures, Ltd.	Barbados	*	No
98.	Cardinal Health IPS, LLC	Delaware	*	No
99.	Cardinal Health Ireland 406 Ltd.	Ireland	*	No
100.	Cardinal Health Ireland 419 Limited	Ireland	*	No
101.	Cardinal Health Ireland 422 Limited	Ireland	*	No

Schedule 5.8

Page 7

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
102.	Cardinal Health Italy 208 S.r.l.	Italy	*	No
103.	Cardinal Health Italy 311 Srl	Italy	*	No
104.	Cardinal Health Italy 407 S.p.A.	Italy	*	No
105.	Cardinal Health Japan 228 K.K.	Japan	*	No
106.	Cardinal Health Japan 408 K.K.	Japan	*	No
107.	Cardinal Health Lease Funding 2002A, LLC	Delaware	*	No
108.	Cardinal Health Lease Funding 2002AQ, LLC	Delaware	*	No
109.	Cardinal Health Lease Funding 2003A, LLC	Delaware	*	No
110.	Cardinal Health Lease Funding 2003AQ, LLC	Delaware	*	No
111.	Cardinal Health Lease Funding 2003B, LLC	Delaware	*	No
112.	Cardinal Health Lease Funding 2003BQ, LLC	Delaware	*	No
113.	Cardinal Health Lease Funding 2004A, LLC	Delaware	*	No
114.	Cardinal Health Lease Funding 2004AQ, LLC	Delaware	*	No

Schedule 5.8

Page 8

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
115.	Cardinal Health Luxembourg 420 S.à.r.l.	Luxembourg	*	No
116.	Cardinal Health MPB, Inc.	Missouri	*	No
117.	Cardinal Health Malaysia 211 Sdn. Bhd.	Malaysia	*	No
118.	Cardinal Health Malta 212 Limited	Malta	*	No
119.	Cardinal Health Mauritius Holding 226 Ltd.	Mauritius	*	No
120.	Cardinal Health Mexico 213 S.A. de C.V.	Mexico	*	No
121.	Cardinal Health N.Z. 217 Limited	New Zealand	*	No
122.	Cardinal Health New Zealand 313 Limited	New Zealand	*	No
123.	Cardinal Health Netherlands 214 B.V.	Netherlands	*	No
124.	Cardinal Health Netherlands 310 B.V.	Netherlands	*	No
125.	Cardinal Health Netherlands Financing C.V.	Netherlands	*	No
126.	Cardinal Health Netherlands Holding B.V.	Netherlands	*	No
127.	Cardinal Health Netherlands Holding 437 B.V.	Netherlands	*	No
128.	Cardinal Health Norway 315 A/S	Norway	*	No

Schedule 5.8

Page 9

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
129.	Cardinal Health P.R. 218, Inc.	Puerto Rico	*	No
130.	Cardinal Health P.R. 227, Inc.	Puerto Rico	*	No
131.	Cardinal Health P.R. 409 B.V.	Netherlands	*	No
132.	Cardinal Health P.R. 410, Inc.	Puerto Rico	*	No
133.	Cardinal Health P.R. 436, Inc.	Puerto Rico	*	No
134.	Cardinal Health PTS, LLC	Delaware	*	No
135.	Cardinal Health Resources, LLC	Delaware	*	No
136.	Cardinal Health S.A. 319 (Proprietary) Limited	South Africa	*	No
137.	Cardinal Health Singapore 225 Pte. Ltd.	Singapore	*	No
138.	Cardinal Health Singapore 304	Singapore	*	No
139.	Cardinal Health Singapore 423 Pte. Ltd.	Singapore	*	No
140.	Cardinal Health Spain 219 S.L.	Spain	*	No
141.	Cardinal Health Sweden 220 AB	Sweden	*	No
142.	Cardinal Health Sweden 314 AB	Sweden	*	No
143.	Cardinal Health Switzerland 221 GmbH	Switzerland	*	No

Schedule 5.8

Page 10

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
144.	Cardinal Health Switzerland 317 Sarl	Switzerland	*	No
145.	Cardinal Health Switzerland 412 GmbH	Switzerland	*	No
146.	Cardinal Health Switzerland 413 AG	Switzerland	*	No
147.	Cardinal Health Systems, Inc.	Ohio	*	No
148.	Cardinal Health Technologies Switzerland GmbH	Switzerland	*	No
149.	Cardinal Health Technologies, LLC	Nevada	*	No
150.	Cardinal Health Trading (Shanghai) Co. Ltd.	China	*	No
151.	Cardinal Health U.K. 100 Limited	United Kingdom	*	No
152.	Cardinal Health U.K. 101 Limited	United Kingdom	*	No
153.	Cardinal Health U.K. 223 Limited	United Kingdom	*	No
154.	Cardinal Health U.K. 305 Limited	United Kingdom	*	No
155.	Cardinal Health U.K. 306 Limited	United Kingdom	*	No
156.	Cardinal Health U.K. 414 Limited	United Kingdom	*	No

Schedule 5.8

Page 11

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
157.	Cardinal Health U.K. 415 Limited	United Kingdom	*	No
158.	Cardinal Health U.K. 416 Limited	United Kingdom	*	No
159.	Cardinal Health U.K. 417 Limited	United Kingdom	*	No
160.	Cardinal Health U.K. 418 Limited	United Kingdom	*	No
161.	Cardinal Health U.K. 425 Limited	United Kingdom	*	No
162.	Cardinal Health U.K. 432 Limited	United Kingdom	*	No
163.	Cardinal Health U.K. 433 Limited	United Kingdom	*	No
164.	Cardinal Health U.K. 434 Limited	United Kingdom	*	No
165.	Cardinal Health U.K. 435 Limited	United Kingdom	*	No
166.	Cardinal.com Holdings, Inc.	Nevada	*	No
167.	Cascade Development, Inc.	Nevada	*	No
168.	Caseview (P.L.) Limited	United Kingdom	*	No
169.	CCB, Inc.	Iowa	*	No

Schedule 5.8

Page 12

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
170.	CDI Investments, Inc.	Delaware	*	No
171.	Centralia Pharmacy, Inc.	Iowa	*	No
172.	Centricity, LLC	Delaware	*	No
173.	Cirmex de Chihuahua S.A. de C.V.	Mexico	*	No
174.	Cirpro de Delicias S.A. de C.V.	Mexico	*	No
175.	Comprehensive Medical Imaging - Rancho Mirage, Inc.	California	*	No
176.	Comprehensive OPEN MRI – Carmichael, Inc.	Delaware	*	No
177.	Comprehensive OPEN MRI--Folsom, Inc.	Delaware	*	No
178.	Comprehensive OPEN MRI--Sacramento, Inc.	Delaware	*	No
179.	Converters Branch	Dominican Republic	*	No
180.	Convertors de Mexico S.A. de C.V.	Mexico	*	No
181.	CR Medicap, Inc.	Iowa	*	No
182.	Craig Generics Limited	United Kingdom	*	No
183.	Daniels Pharmaceuticals Limited	United Kingdom	*	No
184.	Denver Biomedical, Inc.	Delaware	*	No

Schedule 5.8

Page 13

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
185.	Desert PET, LLC	California	*	No
186.	Dover Communications, LLC	Delaware	*	No
187.	DuQuoin Pharmacy, Inc.	Iowa	*	No
188.	Dutch American Manufacturers (D.A.M.) B.V.	Netherlands	*	No
189.	East Iowa Pharmacies, Inc.	Iowa	*	No
190.	Eldon Laboratories Limited	United Kingdom	*	No
191.	Ellipticare, LLC	Delaware	*	No
192.	EPIC Insurance Company	Vermont	*	No
193.	Eurochem Limited	United Kingdom	*	No
194.	European Pharmaceuticals Group Ltd.	United Kingdom	*	No
195.	Europharm of Worthing Limited	United Kingdom	*	No
196.	F&F Holding GmbH	Germany	*	No
197.	Federa S.A.	Belgium	*	No
198.	Freeman Pharmaceuticals Limited	United Kingdom	*	No
199.	Glacier Guaranty Corporation	Vermont	*	No
200.	Glamorgan Pharmaceuticals Limited	United Kingdom	*	No

Schedule 5.8

Page 14

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
201.	Grand Avenue Pharmacy, Inc.	Iowa	*	No
202.	Griffin Capital, LLC	Nevada	*	No
203.	Griffin Group Document Management Services, Inc.	Nevada	*	No
204.	Homecare (North-West) Limited	United Kingdom	*	No
205.	Impharm Nationwide Limited	United Kingdom	*	No
206.	Inland Empire Regional PET Center, LLC	California	*	No
207.	InteCardia-Tennessee East Catheterization, LLC	North Carolina	•      94.64% Cardinal Health Cardiology Solutions, LLC	No
208.	InteCardia-Tennessee East Diagnostic, LLC	North Carolina	*	No
209.	Intercare Holdings Limited	United Kingdom	*	No
210.	Intercare Investments Limited	United Kingdom	*	No
211.	Intercare Properties Plc	United Kingdom	*	No
212.	International Capsule Company S.r.l.	Italy	*	No
213.	Iowa Falls Pharmacy, Inc.	Iowa	*	No
214.	IVAC Overseas Holdings L.P.	Delaware	*	No
215.	JRG, Ltd.	Iowa	*	No

Schedule 5.8

Page 15

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
216.	Killilea Development Company, Ltd.	Ohio	*	No
217.	Lake Charles Pharmaceutical and Medical Equipment Supply Company, L.L.C.	Louisiana	•      A Louisiana limited liability company formed by Owen Shared Services, Inc. and Lake Charles Memorial Hospital, Inc.	No
218.	Leader Drugstores, Inc.	Delaware	*	No
219.	Liberty Communications Network, LLC	Delaware	*	No
220.	Macarthy Group Trustees Limited	United Kingdom	*	No
221.	Macarthy Limited	United Kingdom	*	No
222.	Macarthy’s Laboratories Limited	United Kingdom	*	No
223.	Martindale Pharmaceuticals Limited	United Kingdom	*	No
224.	Medcon S.A.	Luxembourg	*	No
225.	Medesta Associates, LLC	Delaware	*	No
226.	Medical Education Systems, LLC	Delaware	*	No
227.	Medical Media Communications, LLC	Delaware	*	No
228.	Medicap Pharmacies Incorporated	Iowa	*	No
229.	Medicine Shoppe Capital Corporation	Nevada	*	No

Schedule 5.8

Page 16

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
230.	Medicine Shoppe International, Inc.	Delaware	*	No
231.	Medicine Shoppe Internet, Inc.	Missouri	*	No
232.	MediQual Systems, Inc.	Delaware	*	No
233.	MedMined, Inc.	Alabama	*	No
234.	Midland Pharmacies, Inc.	Iowa	*	No
235.	Moresville, Limited	United Kingdom	*	No
236.	MRI Equipment Partners, Ltd.	Texas	•      59.16% Cardinal Health 414, Inc.	No
237.	Multi-Medica S.A.	Belgium	*	No
238.	Multipharm Limited	United Kingdom	*	No
239.	Nationwide Ostomy Supplies Limited	United Kingdom	*	No
240.	One Cloverleaf, LLC	Delaware	*	No
241.	OnPointe Medical Communications, LLC	Delaware	*	No
242.	Owen Shared Services, Inc.	Texas	*	No
243.	PCI Holdings (UK) Co.	United Kingdom	*	No
244.	Parmed Pharmaceuticals, Inc.	Delaware	*	No

Schedule 5.8

Page 17

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
245.	Penisant S.A.	Uruguay	*	No
246.	Pharmaceutical and Diagnostic Services, Inc.	Utah	•      50% Cardinal Health 414, Inc.	No
247.	Pharmacy Operations of New York, Inc.	New York	*	No
248.	Pharmacy Operations, Inc.	Delaware	*	No
249.	Pharmapar S.A.	Belgium	*	No
250.	Physicians Purchasing, Inc.	Nevada	*	No
251.	Pinnacle Intellectual Property Services International, Inc.	Nevada	*	No
252.	Pinnacle Intellectual Property Services, Inc.	Nevada	*	No
253.	PlastiMedical S.p.A.	Italy	*	No
254.	Practicome Solutions, LLC	Delaware	*	No
255.	Productos Urologos de Mexico S.A. de C.V.	Mexico	*	No
256.	Quiroproductos de Cuauhtemoc S.A. de C.V.	Mexico	*	No
257.	R.P. Scherer (Spain) S.A.	Spain	*	No
258.	R.P. Scherer DDS B.V.	Netherlands	*	No
259.	R.P. Scherer GmbH & Co. KG	Germany	•      50.94% F & F Holdings GmbH •      0.11% R.P. Scherer Verwaltungs GmbH	No

Schedule 5.8

Page 18

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
260.	R.P. Scherer Holdings II Limited	United Kingdom	*	No
261.	R.P. Scherer Technologies, Inc.	Nevada	*	No
262.	R.P. Scherer Verwaltungs GmbH	Germany	•      51% F & F Holdings GmbH	No
263.	Ransdell Surgical, Inc.	Kentucky	*	No
264.	Respirare, LLC	Delaware	*	No
265.	Riverside MRI, JV	Texas	*	No
266.	RxealTIME, Inc.	Nevada	*	No
267.	Sierra Radiopharmacy, LLC	Nevada	•      51% Cardinal Health 414, Inc.	No
268.	Simolo (GL) Limited	United Kingdom	*	No
269.	Sistemas Médicos ALARIS, S.A. de C.V.	Mexico	*	No
270.	Source Medical Corporation	Canada	*	No
271.	S.O.V. Aviation, Inc.	Delaware	*	No
272.	SRx, Inc.	Iowa	*	No
273.	Strategic Implications International, LLC	Delaware	*	No
274.	Supplyline Technologies Limited	Ireland	*	No

Schedule 5.8

Page 19

No.	Subsidiary Name	State / Jurisdiction of Incorporation	% of Ownership by Cardinal Health, Inc. (*Unless otherwise indicated, the ownership shall be directly or indirectly 100% owned by Cardinal Health, Inc.)	Subsidiary Borrower (Yes/No)
275.	Syncor Belgium SPRL	Belgium	*	No
276.	Syncor Italy s.r.l.	Italy	*	No
277.	Toledo Pharmacy Co.	Iowa	*	No
278.	Top Shot Publishers Limited	Ireland	*	No
279.	Venture Laminate Limited	Ireland	*	No
280.	Venture Packaging Limited	Ireland	*	No
281.	Virginia Imaging Center, LLC	Virginia	•      90% Cardinal Health Cardiology Solutions, LLC	No
282.	West Texas Nuclear Pharmacy Partners	Texas	•      50% Cardinal Health 414, Inc.	No
283.	Wholesale (PI) Limited	United Kingdom	*	No
284.	Yorkshire Pharmacy, Inc.	Iowa	*	No

Schedule 5.8

Page 20

SCHEDULE 13.1

ADMINISTRATIVE AGENT’S OFFICE;

CERTAIN ADDRESSES FOR NOTICES

COMPANY and DESIGNATED BORROWERS:

Cardinal Health, Inc.

7000 Cardinal Place

Dublin, Ohio 43017

Attention: Jennifer Hess

Telephone: 614-757-5095

Telecopier: 614-652-4892

Electronic Mail: jennifer.hess@cardinal.com

Website Address: www.cardinal.com

ADMINISTRATIVE AGENT:

Administrative Agent’s Office

(for payments and Requests for Credit Extensions):

Bank of America, N.A.

101 N. Tryon Street

Mail Code: NC1-001-04-39

Charlotte, NC 28255

Attention: Sally Bixby

Telephone: 704-387-9482

Telecopier: 704-719-8876

Electronic Mail: sally.a.bixby@bankofamerica.com

Bank of America, N.A.

New York, NY

Account No. (for Dollars): 1366212250600

ABA# 026009593

Ref: Cardinal Health, Inc., Attn: Credit Services

Bank of America, London

Account No. (for Euro): 65280019

Swift Address: BOFAGB22

Ref: Cardinal Health, Inc., Attn: Credit Services

Bank of America, London

Account No. (for Sterling): 65280027

London Sort Code: 16-50-50

Swift Address: BOFAGB22

Ref: Cardinal Health, Inc., Attn: Credit Services

Schedule 13.1

Page 1

Other Notices as Administrative Agent:

Bank of America, N.A.

Agency Management

1455 Market Street

Mail Code: CA5-701-05-19

San Francisco, CA 94103

Attention: Angela Lau

Telephone: 415-436-4000

Telecopier: 415-503-5008

Electronic Mail: angela.lau@bankofamerica.com

With a copy to:

Bank of America, N.A.

Portfolio Management

100 N. Tryon Street

Mail Code: NC1-007-17-11

Charlotte, NC 28255

Attention: Richard Hardison

Telephone: 704-386-1185

Telecopier: 704-388-6002

Electronic Mail: richard.c.hardison@bankofamerica.com

LC ISSUER:

Bank of America, N.A.

Trade Finance Services

1 Fleet Way

Mail Code: PA6-580-02-30

Scranton, PA 18507

Attention: John Yzeik

Telephone: 570-330-4315

Telecopier: 570-330-4186

Electronic Mail: john.p.yzeik@bankofamerica.com

Wachovia Bank, National Association

301 South College Street

Mail Code: TW 15 NC 5562

Charlotte, NC 28288

Attention: Kirk Tesch

Telephone: 704-715-1708

Telecopier: 704-383-7611

Electronic Mail: kirk.tesch@wachovia.com

Schedule 13.1

Page 2

SWINGLINE LENDER:

Bank of America, N.A.

101 N. Tryon Street

Mail Code: NC1-001-04-39

Charlotte, NC 28255

Attention: Sally Bixby

Telephone: 704-387-9482

Telecopier: 704-719-8876

Electronic Mail: sally.a.bixby@bankofamerica.com

Bank of America, N.A.

New York, NY

Account No.: 1366212250600

ABA# 026009593

Ref: Cardinal Health, Inc., Attn: Credit Services

Schedule 13.1

Page 3

EXHIBIT A

OPINIONS

Exhibit A

Page 1

[OUTSIDE COUNSEL OPINION PARAGRAPHS]

1. The Borrower has all requisite corporate power and authority to execute and deliver the Loan Documents and to perform its obligations thereunder.

2. The execution and delivery by the Borrower of the Loan Documents and the performance of its obligations thereunder have been duly and validly authorized by all necessary corporate action on its part.

3. The Loan Documents (including only such Notes that have been executed and delivered as of the date hereof) have been duly executed and delivered on behalf of the Borrower. Each of the Loan Documents constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms.

4. The execution and delivery by the Borrower of the Loan Documents and the performance of its obligations thereunder do not contravene any existing Law or regulation of general applicability of the State of Ohio, the State of New York or the United States of America.

5. The execution and delivery by the Borrower of the Loan Documents do not require the consent or approval of, or any filing with, any New York governmental authority not contemplated by the terms of the Loan Documents.

Exhibit A

Page 2

[IN-HOUSE COUNSEL OPINION PARAGRAPHS]

[PRINT ON CARDINAL HEALTH, INC. LETTERHEAD]

1. The Borrower is a corporation validly existing and in good standing under the Laws of the State of Ohio.

2. The execution and delivery by the Borrower of the Loan Documents and the performance of its obligations thereunder (a) do not violate any provision of the Charter Documents, (b) do not require the consent or approval of, or any filing with, any Ohio or federal governmental authority not contemplated by the terms of the Loan Documents, (c) to my knowledge, do not result in a breach of, or constitute a default under, any material agreement or instrument to which the Borrower is bound and which is filed or incorporated by reference as an exhibit to the Borrower’s periodic reports under the Securities and Exchange Act of 1934, pursuant to Item 601(b)(10) of Regulation S-K of the Securities and Exchange Commission, (d) to my knowledge, do not result in the creation or imposition of any Lien on any of the assets of the Borrower, and (e) to my knowledge, do not violate any order, writ, injunction, decree or demand of any court or other governmental authority binding upon the Borrower.

3. Except for actions, suits or proceedings disclosed in the Borrower’s annual report on Form 10-K for the fiscal year ended June 30, 2006 and quarterly report on Form 10-Q for the quarter ended September 30, 2006, there are no actions, suits or proceedings pending or to my knowledge threatened against or affecting the Borrower, before any court or other governmental authority which, if determined adversely to the Borrower, would have a material adverse effect on the Borrower, or which challenge the validity or enforceability of the Loan Documents.

Exhibit A

Page 3

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

Date:                    

Bank of America, N.A.,

as Administrative Agent

Ladies and Gentlemen:

This notice serves to confirm that, to the best of my knowledge, Cardinal Health, Inc. (the “Company”) has observed or performed in all material respects all of the covenants, conditions and agreements contained in the Five-Year Credit Agreement, dated as of January 24, 2007 (as amended, restated, supplemented or otherwise modified from time to time) among the Company, certain subsidiaries of the Company named therein, Bank of America, N.A., as Administrative Agent, LC Issuer and Swingline Lender, and the lenders party thereto from time to time.

As of the date hereof, no Default or Unmatured Default has occurred and is continuing.

The minimum net worth calculation is attached on Schedule 1.

Sincerely,

[Chief Financial Officer/Controller/Treasurer]

Exhibit B

Page 1

Schedule 1

Calculations

Exhibit B

Page 2

EXHIBIT C

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each]¹ Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each]² Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]³ hereunder are several and not joint.]⁴ Capitalized terms used but not defined herein shall have the meanings given to them in the Five-Year Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including, without limitation, the Letters of Credit and the Swingline Loans included in such facility) and (ii) to the extent permitted to be assigned under applicable Law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at Law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

1.	Assignor[s]:
2.	Assignee[s]:

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

¹ For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.

² For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.

³ Select as appropriate.

⁴ Include bracketed language if there are either multiple Assignors or multiple Assignees.

Exhibit C

Page 1

3. Borrower(s):                                                                          

4. Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement

5. Credit Agreement: Five-Year Credit Agreement, dated as of January 24, 2007, among Cardinal Health, Inc., the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, LC Issuer and Swingline Lender

6. Assigned Interest[s]:

Assignor[s]5	Assignee[s]6	Facility Assigned7	Aggregate Amount of Commitment for all Lenders8		Amount of Commitment Assigned		Percentage Assigned of Commitment9		Facility Termination Date	CUSIP Number
		_________	$	_________	$	_________	_________	%
		_________	$	_________	$	_________	_________	%
		_________	$	_________	$	_________	_________	%

[7. Trade Date:                                                          ]¹⁰

Effective Date:                     , 20            [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR
[NAME OF ASSIGNOR]
By:
	Title:

ASSIGNEE
[NAME OF ASSIGNEE]
By:
	Title:

⁵ List each Assignor, as appropriate.

⁶ List each Assignee, as appropriate.

⁷ Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. “Dollar Commitment”, “Multicurrency Commitment”).

⁸ Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

⁹ Set forth, to at least 9 decimals, as a percentage of the Commitment of all Lenders thereunder.

¹⁰ To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

Exhibit C

Page 2

[Consented to and]¹¹ Accepted:

BANK OF AMERICA, N.A., as
Administrative Agent
By:
	Title:

[Consented to:]¹²

CARDINAL HEALTH, INC.
By:
	Title:

[NAME]
By:
	Title:

¹¹ To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.

¹² To be added only if the consent of the Company and/or other parties (e.g. Swingline Lender, LC Issuer) is required by the terms of the Credit Agreement.

Exhibit C

Page 3

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by any Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 12.1(b)(iii), (v) and (vi) of the Credit Agreement (subject to such consents, if any, as may be required under Section 12.1(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements referred to in Section 6.1 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Non-U.S. Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and

Exhibit C

Page 4

Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the Law of the State of New York.

Exhibit C

Page 5

EXHIBIT D

FORM OF LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION

To: Bank of America, N.A., as Administrative Agent (the “Administrative Agent”) under the Credit Agreement described below.

Re: Five-Year Credit Agreement, dated January 24, 2007 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Cardinal Health, Inc. (the “Company”), as Borrower, the Subsidiary Borrowers, the Lenders named therein, the LC Issuer, the Swingline Lender and the Administrative Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.

The Administrative Agent is specifically authorized and directed to act upon the following standing money transfer instructions with respect to the proceeds of Advances or other extensions of credit from time to time until receipt by the Administrative Agent of a specific written revocation of such instructions by the Company, provided, however, that the Administrative Agent may otherwise transfer funds as hereafter directed in writing by the Company in accordance with Section 13.1 of the Credit Agreement or based on any telephonic notice made in accordance with Section 2.16 of the Credit Agreement.

Facility Identification Number(s)                                                                                                                                                                    

Customer/Account Name                                                                                                                                                                                  

Transfer Funds To:                                                                                                                                                                             

_________________________________________________________________________________________________

_________________________________________________________________________________________________

For Account No.:                                                                                                                                                                                             

Reference/Attention To:                                                                                                                                                                                 

Authorized Officer (Customer Representative)	Date:
(Please Print)	Signature

Bank Officer Name	Date:
(Please Print)	Signature

Exhibit D

Page 1

EXHIBIT E

FORM OF NOTE

[Date]

Cardinal Health, Inc., an Ohio corporation [or the relevant Subsidiary Borrower] (the “Borrower”), promises to pay to the order of [            ] (the “Lender”) the aggregate unpaid principal amount of all Loans made by the Lender to the Borrower pursuant to Article II of the Agreement (as hereinafter defined), in immediately available funds at the place and in the currency specified pursuant to Article II of the Agreement, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Agreement. The Borrower shall pay the principal of and accrued and unpaid interest on the Loans in full on the Facility Termination Date.

The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or to otherwise record in accordance with its usual practice, the date, currency and amount of each Loan and the date, currency and amount of each principal payment hereunder.

This Note is one of the Notes issued pursuant to, and is entitled to the benefits of, the Five-Year Credit Agreement dated as of January 24, 2007 (which, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time, is herein called the “Agreement”), among the Borrowers, the lenders party thereto, including the Lender, the LC Issuer, the Swingline Lender and Bank of America, N.A., as Administrative Agent, to which Agreement reference is hereby made for a statement of the terms and conditions governing this Note, including the terms and conditions under which this Note may be prepaid or its maturity date accelerated. This Note is guaranteed pursuant to the Guaranty, as more specifically described in the Agreement, and reference is made thereto for a statement of the terms and provisions thereof. Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Agreement.

This Note is made under, and shall be governed by, construed and enforced in accordance with, the Laws of the State of New York including, Section 5-1401 and Section 5-1402 of the General Obligation Law of the State of New York, without reference to any other conflicts of Law principles thereof in the same manner applicable to contracts made and to be performed entirely within such State and without giving effect to choice of Law principles of such State.

By:

Name:

Title:

Exhibit E

Page 1

SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL

TO

NOTE OF                                     ,

DATED                                         ,

Date Principal Amount of Loan Maturity of Interest Period Principal Amount Paid Unpaid
Balance

Exhibit E

Page 2

EXHIBIT F

SWINGLINE NOTE

[Date]

                        ,                     

FOR VALUE RECEIVED, CARDINAL HEALTH, INC., an Ohio corporation [or the relevant Subsidiary Borrower] (the “Borrower”), hereby unconditionally promises to pay to the order of Bank of America, N.A. (the “Swingline Lender”), at the principal banking office of the Administrative Agent in lawful money of the United States of America and in immediately available funds, the unpaid principal amount of the Swingline Loans as evidenced by the books and records of the Lender, on the Facility Termination Date or such earlier date as the Lender may require under the Credit Agreement referred to below, when the entire outstanding principal amount of the Swingline Loans evidenced hereby, and all accrued interest thereon, shall be due and payable; and to pay interest on the unpaid principal balance hereof from time to time outstanding, in like money and funds, for the period from the date hereof until the Swingline Loans evidenced hereby shall be paid in full, at the rates per annum on and the dates provided in the Credit Agreement referred to below.

The Swingline Lender is hereby authorized by the Borrower to record on its books and records the date, currency and the amount of each Swingline Loan, the applicable interest rate, the amount of each payment or prepayment of principal thereon, and the other information provided for in such books and records, which books and records shall constitute prime facie evidence of the information so recorded, provided, however, that any failure by the Swingline Lender to record any such notation shall not relieve the Borrower of its obligation to repay the outstanding principal amount of this Swingline Note, all accrued interest hereon and any amount payable with respect hereto in accordance with the terms of this Swingline Note and the Credit Agreement.

The Borrower waives presentment, protest, notice of dishonor and any other formality in connection with this Swingline Note. Should the indebtedness evidenced by this Swingline Note or any part thereof be collected in any proceeding or be placed in the hands of attorneys for collection, the Borrower agrees to pay, in addition to the principal, interest and other sums due and payable hereon, all costs of collecting this Swingline Note, including reasonable attorneys’ fees and expenses.

This Swingline Note evidences Swingline Loans made under the Credit Agreement, dated as of January 24, 2007 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, the Lenders (including the Swingline Lender) named therein, the LC Issuer and Bank of America, N.A., as Administrative Agent for the Lenders, to which reference is hereby made for a statement of the circumstances under which this Swingline Note is subject to prepayment and under which its due date may be accelerated. Capitalized terms used but not defined in this Swingline Note shall have the respective meanings assigned to them in the Credit Agreement.

Exhibit F

Page 1

This Swingline Note is made under, and shall be governed by, construed and enforced in accordance with, the Laws of the State of New York, including Section 5-1401 and Section 5-1402 of the General Obligation Law of the State of New York, without reference to any other conflicts of Law principles thereof in the same manner applicable to contracts made and to be performed entirely within such State and without giving effect to choice of Law principles of such State.

[CARDINAL HEALTH, INC.]

By:

Name:

Title:

Exhibit F

Page 2

SCHEDULE OF SWINGLINE LOANS AND PAYMENTS OF PRINCIPAL

TO

NOTE OF                                 ,

DATED                                     ,

Date Principal
Amount of Swingline Loan Maturity of
Interest Period Principal
Amount Paid Unpaid
Balance

Exhibit F

Page 3

EXHIBIT G

FORM OF GUARANTY

THIS GUARANTY, dated as of January 24, 2007 (this “Guaranty”) made by CARDINAL HEALTH, INC., an Ohio corporation (the “Guarantor”), in favor of BANK OF AMERICA, N.A. (the “Administrative Agent”) as Administrative Agent for the Lenders party from time to time to the Credit Agreement (as defined below).

WITNESSETH:

WHEREAS, the Guarantor has entered into a Five-Year Credit Agreement, dated as of January 24, 2007 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) with the Administrative Agent, the LC Issuer, the Swingline Lender and certain Lenders pursuant to which the Lenders have established revolving loan facilities (capitalized terms used herein and not otherwise defined herein shall have the meanings set forth for such terms in the Credit Agreement);

WHEREAS, the Credit Agreement provides that certain Subsidiaries of the Guarantor owned 80% or more by the Guarantor may become a party to the Credit Agreement and a Subsidiary Borrower thereunder (each such Subsidiary Borrower, a “Borrower” and collectively, the “Borrowers”).

WHEREAS, as a condition to the effectiveness of the Credit Agreement, the Guarantor is required to guarantee the obligations of the Borrowers under the Credit Agreement; and

WHEREAS, the Guarantor has participated in the drafting and negotiation of the Credit Agreement and all other documents, agreements, instruments and certificates furnished by or on behalf of the Borrowers in connection therewith (all of the foregoing being herein collectively referred to as the “Loan Documents”), and the Guarantor has determined that it is in its interest and to its financial benefit that the parties to the Loan Documents enter into the transactions contemplated thereby;

NOW, THEREFORE, for valuable consideration, the receipt of which is hereby acknowledged and as further consideration, and as an inducement to the Lenders to enter into the transactions contemplated by the Loan Documents, the Guarantor agrees with the Administrative Agent and the Lenders as follows:

1.(a) The Guarantor hereby unconditionally and irrevocably (i) guarantees to the Administrative Agent and the Lenders the prompt payment and performance of the principal of and any and all accrued and unpaid interest on the Loans when due, whether at scheduled maturity, by acceleration or otherwise, all in accordance with the terms of the Credit Agreement, and any and all other Obligations which may be payable by the Borrowers to the Administrative Agent, the LC Issuer, the Swingline Lender or the Lenders pursuant to the Credit Agreement (including without limitation interest at the Overdue Rate after the maturity of the Loans and interest accruing at the then applicable rate provided in the Credit Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to a Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) and all reasonable costs and expenses incurred by the Administrative Agent, the LC Issuer, the Swingline Lender and the Lenders in connection with enforcing any obligations of the Borrowers thereunder, including without limitation the reasonable fees and disbursements of counsel in accordance with the terms set forth in the Credit Agreement, and (ii) agrees to make prompt payment, on demand, of any and all costs and expenses incurred by the Administrative Agent, the LC Issuer, the Swingline Lender or the Lenders in connection with enforcing

Exhibit G

Page 1

the obligations of the Guarantor hereunder, including, without limitation, the reasonable fees and disbursements of counsel (all of the foregoing being collectively referred to as the “Guaranteed Obligations”)

If any of the Guaranteed Obligations shall not be paid in full when the same becomes due and payable, the Guarantor undertakes to pay forthwith the same to the Administrative Agent, the LC Issuer, the Swingline Lender and the Lenders, as applicable, after notice or demand therefor, regardless of any defense or setoff or counterclaim which any Borrower may have or assert.

(b) Notwithstanding anything to the contrary contained paragraph 1(a), it is the intention of the Guarantor, the Administrative Agent, the LC Issuer, the Swingline Lender and the Lenders that, in any proceeding involving the bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors, dissolution or insolvency or any similar proceeding with respect to the Guarantor or its assets, the amount of the Guarantor’s obligations with respect to the Guaranteed Obligations shall be equal to, but not in excess of, the maximum amount thereof not subject to avoidance or recovery by operation of applicable Laws governing bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances or other similar Laws (including, without limitation, 11 U.S.C. Sections 544, 547, 548 and 550 and other “avoidance” provisions of Title 11 of the United States Code, as amended or supplemented).

2. The Guarantor hereby unconditionally (a) waives any requirement that the Administrative Agent, the LC Issuer, the Swingline Lender or the Lenders, in the event of any default by any Borrower, first make demand upon, or seek to enforce remedies against, any Borrower before demanding payment under or seeking to enforce this Guaranty, (b) covenants that this Guaranty will not be discharged except by complete performance of all obligations of the Borrowers contained in the Loan Documents and the termination of the Commitments, (c) agrees that this Guaranty shall remain in full force and effect without regard to, and shall not be affected or impaired, without limitation, by any invalidity, irregularity or unenforceability in whole or in part of any of the Loan Documents, or any limitation on the liability of the Borrowers thereunder, or any limitation on the method or terms of payment thereunder which may now or hereafter be caused or imposed in any manner whatsoever, (d) waives diligence, presentment and protest with respect to, and any notice of default or dishonor in the payment of any amount at any time payable by any Borrower under or in connection with, any of the Loan Documents, and further waives any requirement of notice of acceptance of, or other formality relating to, this Guaranty and (e) agrees that the Guaranteed Obligations shall include any amounts paid by any Borrower to the Administrative Agent, the LC Issuer, the Swingline Lender or the Lenders which may be required to be returned to such Borrower, or to its representative or to a trustee, custodian or receiver for such Borrower.

3. This Guaranty is an absolute and unconditional and irrevocable guaranty of payment and not a guaranty of collection and is wholly independent and in addition to other rights and remedies of the Administrative Agent, the LC Issuer, the Swingline Lender and the Lenders and is not contingent upon the pursuit by the Administrative Agent, the LC Issuer, the Swingline Lender or the Lenders of any such rights and remedies, such pursuit being hereby waived by the Guarantor.

4. The obligations, covenants, agreements and duties of the Guarantor under this Guaranty shall not be released, affected or impaired by any of the following whether or not undertaken with notice to or consent of the Guarantor: (a) any assignment or transfer, in whole or in part, of the Commitments or the Loans, or any of the Loan Documents although made without notice to or consent of the Guarantor, or (b) any waiver by the Administrative Agent, the LC Issuer, the Swingline Lender or the Lenders, or by any other person, of the performance or observance by the Borrowers of any of the agreements, covenants, terms or conditions contained in any of the Loan Documents (neither premature disbursement nor failure to insist on satisfaction of any precondition for any disbursement of the funds under the Credit Agreement shall affect the obligations of the Guarantor), or (c) any indulgence in or the extension of the

Exhibit G

Page 2

time for payment by the Borrowers of any amounts payable under or in connection with any of the Loan Documents, or of the time for performance by the Borrowers of any other obligations under or arising out of any of the Loan Documents, or the extension or renewal thereof, or (d) the modification, amendment or waiver (whether material or otherwise) of any duty, agreement or obligation of the Borrowers set forth in any of the Loan Documents (the modification, amendment or waiver from time to time of the Credit Agreement or any of the Loan Documents to which any Borrower is a party being expressly authorized without further notice to or consent of the Guarantor), or (e) the voluntary or involuntary liquidation, sale or other disposition of all or substantially all of the assets of any Borrower, or any receivership, insolvency, bankruptcy, reorganization, or other similar proceedings, affecting any Borrower or any of its assets, or (f) the release of any security for the obligations of the Borrowers under any of the Loan Documents, or the impairment of or failure to perfect an interest in any such security, or (g) the merger or consolidation of any Borrower with any other person, or (h) the release or discharge of any Borrower from the performance or observance of any agreement, covenant, term or condition contained in any of the Loan Documents, by operation of Law, or (i) any other cause whether similar or dissimilar to the foregoing which would release, affect or impair the obligations, covenants, agreements or duties of the Guarantor hereunder.

5. As of the date hereof and as of the date of each disbursement of a Loan made by the Lenders, any Swingline Loan made by the Swingline Lender or any Facility LC made available by the LC Issuer to any Borrower pursuant to the Credit Agreement, the Guarantor represents and warrants to the Administrative Agent, the LC Issuer, the Swingline Lender and the Lenders: (a) the execution, delivery and performance of this Guaranty are not in contravention of Law and do not give rise to a default under any undertaking to which the Guarantor is a party or by which it or any of its property is bound; (b) this Guaranty is the legal, valid and binding obligation of the Guarantor, enforceable against it in accordance with its terms; (c) all requisite consents have been obtained and no approval or authorization of or declaration, registration or filing with any governmental authority or any non-governmental person or entity, is required in connection with the execution, delivery and performance of this Guaranty or the transactions contemplated hereby or thereby or as a condition to the legality, validity or enforceability of this Guaranty; (d) there are no actions, suits or proceedings pending or, to the best of the Guarantor’s knowledge, threatened against the Guarantor before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which, if determined adversely would have a Material Adverse Effect on the financial condition or business of the Guarantor, and (e) all financial statements and other information furnished by the Guarantor to the Lenders, are true and complete in all respects as of the respective dates thereof.

6. The Guarantor hereby covenants and agrees that until the later of (a) irrevocable payment in full of the principal and accrued interest on all of the Loans and the payment and performance of all other Obligations of the Borrowers and (b) the Facility Termination Date under the Credit Agreement, it shall observe and perform each of its agreements and covenants set forth in the Credit Agreement and this Guaranty.

7. If any of the following events shall occur and be continuing: (a) the Guarantor shall fail to pay when due any amount payable under paragraph 1 or 2 hereof; or (b) the Guarantor shall fail to perform or observe any term, condition or covenant contained in this Guaranty, or any representation or warranty made by the Guarantor in this Guaranty or in any certificate or other document or statement furnished at any time hereunder shall prove to have been incorrect or untrue in any material respect on the date as of which made; or (c) the Guarantor becomes insolvent or bankrupt, or shall generally not pay its debts as they become due, or shall admit in writing its inability to pay its debts generally, or makes an assignment for the benefit of creditors, or there shall be instituted by or against the Guarantor any proceeding or case seeking to adjudicate it bankrupt or insolvent or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or protection of it or its debts under any Law

Exhibit G

Page 3

relating to bankruptcy, insolvency or reorganization or relief or protection of debtors, or seeks or consents to the appointment of a trustee, custodian or receiver for the Guarantor or for the greater part of the properties of the Guarantor, or a trustee, custodian or receiver is appointed for the Guarantor or for the greater part of its properties, or the Guarantor takes any action to authorize any of the foregoing; or (d) the Guarantor purports to revoke, repudiate or disavow its obligations under this Guaranty or this Guaranty shall cease to be in full force and effect for any reason or the legality, validity, binding effect or enforceability of this Guaranty shall be challenged or denied in any proceeding or otherwise, then, and in any such event, the Administrative Agent, the LC Issuer, the Swingline Lender and the Lenders may, in addition to the remedies provided in the Credit Agreement and the Loan Documents, enforce their right either by suit in equity, or by action at Law, or by other appropriate proceedings, whether for the specific performance (to the extent permitted by Law) of any covenant or agreement contained in this Guaranty or in aid of the exercise of any power granted in this Guaranty and may enforce payment under this Guaranty and any of their other rights available at Law or in equity.

8. The liabilities and obligations of the Guarantor hereunder are joint and several with all other guarantors and until the Guaranteed Obligations have been discharged and paid in full, the Commitments terminated and the passage of any applicable “preference period” under applicable bankruptcy Law, Guarantor waives any right of subrogation to the rights of the Lenders against the Borrowers or any other person obligated for payment of the Guaranteed Obligations and any right of reimbursement, contribution or indemnity whatsoever arising or accruing out of any payment which the Guarantor may make pursuant to this Guaranty and any right of recourse to security for the debts and obligations of the Borrowers.

9.(a) This Guaranty is a contract made under, and shall be governed by, construed and enforced in accordance with, the Laws of the State of New York, including Section 5-1401 and Section 5-1402 of the General Obligation Law of the State of New York, without reference to any other conflicts of Law principles thereof; (b) no failure of the Administrative Agent, the LC Issuer, the Swingline Lender or the Lenders in exercising any right, power, or privilege hereunder shall affect such right, power, or privilege, nor shall any single or partial exercise thereof preclude any further exercise thereof, or the exercise of any other right, power, or privilege and the rights and remedies of the Administrative Agent, the LC Issuer, the Swingline Lender and the Lenders hereunder are cumulative and not exclusive of any right or remedy which they may otherwise have; (c) the Administrative Agent, the LC Issuer, the Swingline Lender and the Lenders shall be entitled to rely upon any certificate, notice or other communication (including any thereof by telephone, telex, facsimile or other electronic transmission, telegram or cable) believed by them to be genuine and correct and to have been signed or sent by or on behalf of the proper person or persons; and (d) all notices and demands hereunder shall be deemed to have been duly given or served if sent in writing to the addresses set forth in Section 13.1 of the Credit Agreement and shall be deemed to be given or made at the times provided in Section 13.1 of the Credit Agreement. No amendment, modification, termination or waiver of any provision of this Guaranty nor any consent to any departure therefrom shall be effective unless the same shall be in writing and signed by the Administrative Agent, and any such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. This Guaranty embodies the entire agreement and understanding between the Guarantor and the Administrative Agent on behalf of the Lenders, and supersedes all prior agreements and understandings relating to the subject matter hereof. In case any one or more of the obligations of the Guarantor under this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining obligations of the Guarantor shall not be affected or impaired thereby. This Guaranty shall be binding upon and inure to the benefit of the parties hereto, the Administrative Agent and the Lenders and their respective successors and assigns.

Exhibit G

Page 4

10. The Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent and the Lenders without set-off or counterclaim, in the currency in which the Guaranteed Obligation in respect of which such payment is made is denominated, at the place of payment specified in the Credit Agreement.

11. Each of the Administrative Agent and the Guarantor, after consulting or having had the opportunity to consult with counsel, knowingly, voluntarily and intentionally waive any right it may have to a trial by jury in any litigation based upon or arising out of this Guaranty or any related instrument or agreement or any of the transactions contemplated by this Guaranty or any course of conduct, dealing, statements (whether oral or written) or actions of either of them. Neither the Administrative Agent nor the Guarantor shall seek to consolidate, by counterclaim or otherwise, any such action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived. These provisions shall not be deemed to have been modified in any respect or relinquished by either the Administrative Agent or the Guarantor except by a written instrument executed by both of them.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

Exhibit G

Page 5

IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered as of the day and year first above written.

CARDINAL HEALTH, INC.

By:

Name:

Title:

By:

Name:

Title:

BANK OF AMERICA, N.A.,

as Administrative Agent

By:

Name:

Title:

Exhibit G

Page 6

EX-10.02

Exhibit 10.02

CARDINAL HEALTH, INC.

RESTRICTED SHARE UNITS AGREEMENT

On November 15, 2006 (the “Grant Date”), Cardinal Health, Inc, an Ohio corporation (the “Company”), has awarded to Mark W. Parrish (“Awardee”) 35,000 Restricted Share Units (the “Restricted Share Units” or “Award”), representing an unfunded unsecured promise of the Company to deliver common shares, without par value, of the Company (the “Shares”) to Awardee as set forth herein. The Restricted Share Units have been granted pursuant to the Cardinal Health, Inc. 2005 Long-Term Incentive Plan, as amended (the “Plan”), and shall be subject to all provisions of the Plan, which are incorporated herein by reference, and shall be subject to the provisions of this Restricted Share Units Agreement (this “Agreement”). Capitalized terms used in this Agreement which are not specifically defined shall have the meanings ascribed to such terms in the Plan.

1. Vesting. Subject to the provisions set forth elsewhere in this Agreement, the Restricted Share Units shall vest on November 15, 2009 (the “Vesting Date”). Notwithstanding the foregoing, in the event of a Change of Control prior to Awardee’s Termination of Employment, the Restricted Share Units shall vest in full.

2. Transferability. The Restricted Share Units shall not be transferable.

3. Termination of Employment. Except as set forth below, if a Termination of Employment occurs prior to the vesting of a Restricted Share Unit, such Restricted Share Unit shall be forfeited by Awardee. If a Termination of Employment occurs prior to the vesting in full of the Restricted Share Units by reason of Awardee’s death, by the Company other than as a Termination for Cause, or by the Awardee with “good reason” as defined in the employment letter agreement dated November 8, 2006, then any unvested Restricted Share Units shall vest in full and shall not be forfeited.

4. Triggering Conduct/Competitor Triggering Conduct. As used in this Agreement, “Triggering Conduct” shall include the following: disclosing or using in any capacity other than as necessary in the performance of duties assigned by the Company and its Affiliates (collectively, the “Cardinal Group”) any confidential information, trade secrets or other business sensitive information or material concerning the Cardinal Group; violation of Company policies, including conduct which would constitute a breach of any of the Certificates of Compliance with Company Policies and/or the Certificates of Compliance with Company Business Ethics Policies signed by Awardee; directly or indirectly employing, contacting concerning employment, or participating in any way in the recruitment for employment of (whether as an employee, officer, director, agent, consultant or independent contractor), any person who was or is an employee, representative, officer or director of the Cardinal Group at any time within the 12 months prior to Awardee’s Termination of Employment; any action by Awardee and/or his or her representatives that either does or could reasonably be expected to undermine, diminish or otherwise damage the relationship between the Cardinal Group and any of its customers, potential customers, vendors and/or suppliers that were known to Awardee; and breaching any provision of any employment or severance agreement with a member of the Cardinal Group. As used in this Agreement, “Competitor Triggering Conduct” shall include, either during Awardee’s employment or within one year following Termination of Employment, accepting employment with or serving as a consultant or advisor or in any other capacity to an entity that is in competition with the business conducted by any member of the Cardinal Group (a “Competitor”), including, but not limited to, employment or another business relationship with any Competitor if Awardee has been introduced to trade secrets, confidential information or business sensitive information during Awardee’s employment with the Cardinal Group and such information would aid the Competitor because the

threat of disclosure of such information is so great that, for purposes of this Agreement, it must be assumed that such disclosure would occur.

5. Special Forfeiture/Repayment Rules. For so long as Awardee continues as an Employee with the Cardinal Group and for three years following Termination of Employment regardless of the reason, Awardee agrees not to engage in Triggering Conduct. If Awardee engages in Triggering Conduct during the time period set forth in the preceding sentence or in Competitor Triggering Conduct during the time period referenced in the definition of “Competitor Triggering Conduct” set forth in Paragraph 4 above, then:

(a) any Restricted Share Units that have not yet vested or that vested within the Look-Back Period (as defined below) with respect to such Triggering Conduct or Competitor Triggering Conduct and have not yet been settled by a payment pursuant to Paragraph 6 hereof shall immediately and automatically terminate, be forfeited, and cease to exist; and

(b) Awardee shall, within 30 days following written notice from the Company, pay to the Company an amount equal to (x) the aggregate gross gain realized or obtained by Awardee resulting from the settlement of all Restricted Share Units pursuant to Paragraph 6 hereof (measured as of the settlement date (i.e., the market value of the Restricted Share Units on such settlement date)) that have already been settled and that had vested at any time within three years prior to the Triggering Conduct (the “Look-Back Period”), minus (y) $1.00. If Awardee engages only in Competitor Triggering Conduct, then the Look-Back Period shall be shortened to exclude any period more than one year prior to Awardee’s Termination of Employment, but including any period between the time of Termination of Employment and the time of Awardee’s engaging in Competitor Triggering Conduct.

Awardee may be released from his or her obligations under this Paragraph 5 if and only if the Administrator (or its duly appointed designee) determines, in writing and in its sole discretion, that such action is in the best interests of the Company. Nothing in this Paragraph 5 constitutes a so-called “noncompete” covenant. This Paragraph 5 does, however, prohibit certain conduct while Awardee is associated with the Cardinal Group and thereafter and does provide for the forfeiture or repayment of the benefits granted by this Agreement under certain circumstances, including, but not limited to, Awardee’s acceptance of employment with a Competitor. Awardee agrees to provide the Company with at least 10 days written notice prior to directly or indirectly accepting employment with, or serving as a consultant or advisor or in any other capacity to, a Competitor, and further agrees to inform any such new employer, before accepting employment, of the terms of this Paragraph 5 and Awardee’s continuing obligations contained herein. No provision of this Agreement shall diminish, negate or otherwise impact any separate noncompete or other agreement to which Awardee may be a party, including, but not limited to, any of the Certificates of Compliance with Company Policies and/or the Certificates of Compliance with Company Business Ethics Policies; provided, however, that to the extent that any provisions contained in any other agreement are inconsistent in any manner with the restrictions and covenants of Awardee contained in this Agreement, the provisions of this Agreement shall take precedence and such other inconsistent provisions shall be null and void. Awardee acknowledges and agrees that the provisions contained in this Agreement are being made for the benefit of the Company in consideration of Awardee’s receipt of the Restricted Share Units, in consideration of employment, in consideration of exposing Awardee to the Company’s business operations and confidential information, and for other good and valuable consideration, the adequacy of which consideration is hereby expressly confirmed. Awardee further acknowledges that the receipt of the Restricted Share Units and execution of this Agreement are voluntary actions on the part of Awardee and that the Company is unwilling to provide the Restricted Share Units to Awardee without including the

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restrictions and covenants of Awardee contained in this Agreement. Further, the parties agree and acknowledge that the provisions contained in Paragraphs 4 and 5 are ancillary to, or part of, an otherwise enforceable agreement at the time the agreement is made.

6. Payment.

(a) Subject to the provisions of Paragraphs 4 and 5 of this Agreement, on the date of vesting of this Award, Awardee shall be entitled to receive from the Company (without any payment on behalf of Awardee other than as described in Paragraph 11) 5,000 of the Shares represented by such Restricted Share Unit.

(b) Subject to the provisions of Paragraphs 4 and 5 of this Agreement, on the six-month anniversary of the first date on which Awardee ceases to be an employee of the Company (unless such cessation does not constitute a “separation from service” within the meaning of Section 409A(a)(2)(A)(i) of the Code, and the regulations thereunder, in which case the settlement contemplated by this paragraph shall occur on the six-month anniversary of the first date that does so constitute a “separation from service”), Awardee shall be entitled to receive from the Company (without any payment on behalf of Awardee other than as described in Paragraph 11) the remaining 30,000 Shares represented by such Restricted Share Unit, if vested, provided, however, that, subject to the next sentence, in the event that such Restricted Share Units vest prior to the applicable Vesting Date as a result of the death of Awardee or as a result of a Change of Control, Awardee shall be entitled to receive the corresponding Shares from the Company on the date of such vesting. Notwithstanding the proviso of the preceding sentence, if Restricted Share Units vest as a result of the occurrence of a Change of Control under circumstances where such occurrence would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the regulations thereunder, and where Code Section 409A applies to such distribution, such proviso shall not apply and Awardee shall be entitled to receive the corresponding Shares from the Company on the date that would have applied absent such proviso.

7. Dividend Equivalents. Awardee shall not receive cash dividends on the Restricted Share Units but instead shall, with respect to each Restricted Share Unit, receive a cash payment from the Company on each cash dividend payment date with respect to the Shares with a record date between the Grant Date and the settlement of such unit pursuant to Paragraph 6 hereof, such cash payment to be in an amount equal to the dividend that would have been paid on the Common Share represented by such unit. Cash payments on each cash dividend payment date with respect to the Shares with a record date prior to a Vesting Date shall be accrued until the Vesting Date and paid thereon (subject to the same vesting requirements as the underlying Restricted Share Units award).

8. Holding Period Requirement. If Awardee is classified as an “officer” of the Company within the meaning of Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended, on the Grant Date, then, as a condition to receipt of the Restricted Share Units, Awardee hereby agrees to hold, until the first anniversary of the applicable Vesting Date (or, if earlier, the date of Awardee’s Termination of Employment), the Shares issued pursuant to settlement of such units (less any portion thereof withheld in order to satisfy all applicable federal, state, local or foreign income, employment or other tax).

9. Right of Set-Off. By accepting these Restricted Share Units, Awardee consents to a deduction from, and set-off against, any amounts owed to Awardee by any member of the Cardinal Group from time to time (including, but not limited to, amounts owed to Awardee as wages, severance payments or other fringe benefits) to the extent of the amounts owed to the Cardinal Group by Awardee under this Agreement.

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10. No Shareholder Rights. Awardee shall have no rights of a shareholder with respect to the Restricted Share Units, including, without limitation, Awardee shall not have the right to vote the Shares represented by the Restricted Share Units.

11. Withholding Tax.

(a) Generally. Awardee is liable and responsible for all taxes owed in connection with the Restricted Share Units (including taxes owed with respect to the cash payments described in Paragraph 7 hereof), regardless of any action the Company takes with respect to any tax withholding obligations that arise in connection with the Restricted Share Units. The Company does not make any representation or undertaking regarding the tax treatment or the treatment of any tax withholding in connection with the grant or vesting of the Restricted Share Units or the subsequent sale of Shares issuable pursuant to the Restricted Share Units. The Company does not commit and is under no obligation to structure the Restricted Share Units to reduce or eliminate Awardee’s tax liability.

(b) Payment of Withholding Taxes. Prior to any event in connection with the Restricted Share Units (e.g., vesting or settlement) that the Company determines may result in any domestic or foreign tax withholding obligation, whether national, federal, state or local, including any employment tax obligation (the “Tax Withholding Obligation”), Awardee is required to arrange for the satisfaction of the minimum amount of such Tax Withholding Obligation in a manner acceptable to the Company. Unless Awardee elects to satisfy the Tax Withholding Obligation by an alternative means that is then permitted by the Company, Awardee’s acceptance of this Agreement constitutes Awardee’s instruction and authorization to the Company to withhold on Awardee’s behalf the number of Shares from those Shares issuable to Awardee at the time when the Restricted Share Units become vested and payable as the Company determines to be sufficient to satisfy the Tax Withholding Obligation. In the case of any amounts withheld for taxes pursuant to this provision in the form of Shares, the amount withheld shall not exceed the minimum required by applicable law and regulations. The Company shall have the right to deduct from all cash payments paid pursuant to Paragraph 7 hereof the amount of any taxes which the Company is required to withhold with respect to such payments.

12. Beneficiary Designation. Awardee may designate a beneficiary to receive any Shares to which Awardee is entitled with respect to the Restricted Share Units which vest as a result of Awardee’s death. Notwithstanding the foregoing, if Awardee engages in Triggering Conduct or Competitor Triggering Conduct as herein defined, the Restricted Share Units subject to such beneficiary designation shall be subject to the Special Forfeiture/Repayment Rules and the Company’s Right of Set-Off or other right of recovery set forth in this Agreement, and all rights of the beneficiary shall be subordinated to the rights of the Company pursuant to such provisions of this Agreement. Awardee acknowledges that the Company may exercise all rights under this Agreement and the Plan against Awardee and Awardee’s estate, heirs, lineal descendants and personal representatives and shall not be limited to exercising its rights against Awardee’s beneficiary.

13. Governing Law/Venue. This Agreement shall be governed by the laws of the State of Ohio, without regard to principles of conflicts of law, except to the extent superceded by the laws of the United States of America. The parties agree and acknowledge that the laws of the State of Ohio bear a substantial relationship to the parties and/or this Agreement and that the Restricted Share Units and benefits granted herein would not be granted without the governance of this Agreement by the laws of the State of Ohio. In addition, all legal actions or proceedings relating to this Agreement shall be brought in state or federal courts located in Franklin County, Ohio, and the parties executing this Agreement hereby consent to the personal jurisdiction of such courts. Awardee acknowledges that the covenants contained in Paragraphs 4 and 5 of this Agreement are

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reasonable in nature, are fundamental for the protection of the Company’s legitimate business and proprietary interests, and do not adversely affect Awardee’s ability to earn a living in any capacity that does not violate such covenants. The parties further agree that in the event of any violation by Awardee of any such covenants, the Company will suffer immediate and irreparable injury for which there is no adequate remedy at law. In the event of any violation or attempted violations of the restrictions and covenants of Awardee contained in this Agreement, the Cardinal Group shall be entitled to specific performance and injunctive relief or other equitable relief, including the issuance ex parte of a temporary restraining order, without any showing of irreparable harm or damage, such irreparable harm being acknowledged and admitted by Awardee, and Awardee hereby waives any requirement for the securing or posting of any bond in connection with such remedy, without prejudice to the rights and remedies afforded the Cardinal Group hereunder or by law. In the event that it becomes necessary for the Cardinal Group to institute legal proceedings under this Agreement, Awardee shall be responsible to the Company for all costs and reasonable legal fees incurred by the Company with regard to such proceedings. Any provision of this Agreement which is determined by a court of competent jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is valid and enforceable and that comes closest to the business objectives intended by such provision, without invalidating or rendering unenforceable the remaining provisions of this Agreement.

14. Action by the Administrator. The parties agree that the interpretation of this Agreement shall rest exclusively and completely within the sole discretion of the Administrator. The parties agree to be bound by the decisions of the Administrator with regard to the interpretation of this Agreement and with regard to any and all matters set forth in this Agreement. The Administrator may delegate its functions under this Agreement to an officer of the Cardinal Group designated by the Administrator (hereinafter the “Designee”). In fulfilling its responsibilities hereunder, the Administrator or its Designee may rely upon documents, written statements of the parties or such other material as the Administrator or its Designee deems appropriate. The parties agree that there is no right to be heard or to appear before the Administrator or its Designee and that any decision of the Administrator or its Designee relating to this Agreement, including, without limitation, whether particular conduct constitutes Triggering Conduct or Competitor Triggering Conduct, shall be final and binding unless such decision is arbitrary and capricious.

15. Prompt Acceptance of Agreement. The Restricted Share Unit grant evidenced by this Agreement shall, at the discretion of the Administrator, be forfeited if this Agreement is not manually executed and returned to the Company, or electronically executed by Awardee by indicating Awardee’s acceptance of this Agreement in accordance with the acceptance procedures set forth on the Company’s third-party equity plan administrator’s web site, within 90 days of the Grant Date.

16. Electronic Delivery and Consent to Electronic Participation. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Share Unit grant under and participation in the Plan or future Restricted Share Units that may be granted under the Plan by electronic means or to request Awardee’s consent to participate in the Plan by electronic means. Awardee hereby consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, including the acceptance of restricted share unit grants and the execution of restricted share unit agreements through electronic signature.

17. Notices. All notices, requests, consents and other communications required or provided under this Agreement to be delivered by Awardee to the Company will be in writing and will be deemed sufficient if delivered by hand, facsimile, nationally recognized overnight courier, or

5

certified or registered mail, return receipt requested, postage prepaid, and will be effective upon delivery to the Company at the address set forth below:

Cardinal Health, Inc.

7000 Cardinal Place

Dublin, Ohio 43017

Attention: Chief Legal Officer

Facsimile: (614) 757-2797

All notices, requests, consents and other communications required or provided under this Agreement to be delivered by the Company to Awardee may be delivered by e-mail or in writing and will be deemed sufficient if delivered by e-mail, hand, facsimile, nationally recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and will be effective upon delivery to the Awardee.

CARDINAL HEALTH, INC.
By:	/s/ R. Kerry Clark
	R. Kerry Clark
Its:	President and Chief Executive Officer

6

ACCEPTANCE OF AGREEMENT

Awardee hereby: (a) acknowledges that he or she has received a copy of the Plan, a copy of the Company’s most recent annual report to shareholders and other communications routinely distributed to the Company’s shareholders, and a copy of the Plan Description dated February 22, 2006 pertaining to the Plan; (b) accepts this Agreement and the Restricted Share Units granted to him or her under this Agreement subject to all provisions of the Plan and this Agreement, including the provisions in the agreement regarding “Triggering Conduct/Competitor Triggering Conduct” and “Special Forfeiture/ Repayment Rules” set forth in paragraphs 4 and 5 above; (c) represents that he or she understands that the acceptance of this Agreement through an on-line or electronic system, if applicable, carries the same legal significance as if he or she manually signed the Agreement; (d) represents and warrants to the Company that he or she is purchasing the Restricted Share Units for his or her own account, for investment, and not with a view to or any present intention of selling or distributing the Restricted Share Units either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and (e) agrees that no transfer of the Shares delivered in respect of the Restricted Share Units shall be made unless the Shares have been duly registered under all applicable Federal and state securities laws pursuant to a then-effective registration which contemplates the proposed transfer or unless the Company has received a written opinion of, or satisfactory to, its legal counsel that the proposed transfer is exempt from such registration.

/s/ Mark W. Parrish

Awardee’s Signature

2/8/07

Date

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EX-10.03

Exhibit 10.03

Cardinal Health

Deferred Compensation Plan

Amended and Restated Effective January 1, 2005

First Amendment

Background Information

A. Cardinal Health, Inc. (“Cardinal Health”) established and maintains the Cardinal Health Deferred Compensation Plan (the “Plan”) for the benefit of participants and their beneficiaries.

B. The Human Resources and Compensation Committee of the Board of Directors of Cardinal Health, Inc. (the “Compensation Committee”) oversees and is authorized to amend the Plan.

C. The Compensation Committee has authorized the amendment of the Plan to expand the distribution options under the Plan in accordance with proposed regulations issued under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and to permit the deferral of certain cash dividend-equivalent payments under the terms of restricted share units agreements.

D. Section 7.1 of the Plan permits the amendment of the Plan at any time.

Amendment of the Plan

The Plan is hereby amended as follows, effective November 7, 2006:

1. Section 1.1(h) of the Plan is hereby amended to read as follows:

“Compensation. Amounts paid or payable by the Company to an Eligible Employee for a Plan Year which are includable in income for federal tax purposes, including base salary and variable compensation in the form of commissions and/or bonuses (except as otherwise provided herein). In addition, cash dividend-equivalent payments under restricted share unit award agreements (“RSUs”) may also be deferred hereunder by Eligible Employees who are Reporting Persons in accordance with procedures established from time to time by the Committee. Notwithstanding the foregoing, the following amounts are excluded from Compensation: (i) other cash or non-cash compensation, expense reimbursements or other benefits or contributions by the Company to any other employee benefit plan, other than pre-tax salary deferrals into the Qualified Plan or any Code Section 125 plan sponsored by the Company or any of its affiliates; (ii) any bonus payment if such bonus payment is wholly or partially payable without regard to the attainment of a performance-based goal (i.e., guaranteed); (iii) amounts realized (A) from the exercise of a stock option, (B) when restricted stock (or property) held by a Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture, (C) when the Shares underlying RSUs are payable to a Participant, or (D) from the sale, exchange or other disposition of stock acquired under a qualified stock option; and (iv) any amounts that are required to be withheld from a Participant’s wages from the Company pursuant to Code Section 3102 to satisfy the Participant’s tax obligations under Code Section 3101. With respect to Directors, “Compensation” means any and all fees paid for service as a member of the Board, including fees for attendance at meetings or committee meetings, and cash dividend-equivalent payments under RSUs.”

2. Section 3.1 of the Plan is hereby amended by the addition of the following new paragraph at the end thereof:

“In addition to the Deferred Compensation Credits described above, Reporting Persons who have elected to defer receipt of Shares to be issued under RSUs awarded on or after November 1, 2006, shall automatically have one hundred percent (100%) of the cash dividend-equivalents that are vested and payable under such RSUs deferred under this Plan. Such amounts shall be referred to as “Deferred Cash Equivalent Credits.” Deferred Cash Equivalent Credits are always one hundred percent (100%) vested and nonforfeitable but are not eligible for Matching Credits.”

3. Section 5.1 of the Plan is hereby amended by the addition of the following new paragraph at the end thereof:

“Effective for distribution elections made on or after November 7, 2006, a Participant may elect to receive payment of some or all of the vested amounts credited to his Account (i) in a single lump sum as of a regular payment processing date in a designated Plan Year that is at least twelve (12) months after the date the election is made, or (ii) if earlier, as of the Participant’s termination from employment or from the Board due to Retirement, death, Total Disability or any other reason (a “Fixed Date Election”). A Fixed Date Election may apply to a flat dollar amount or to a fixed percentage of the Participant’s Account, provided that if the value of the Participant’s Account on the payment date elected by the Participant is less than the flat dollar amount elected, the entire Account shall be paid under the Fixed Date Election. A Participant may have only one Fixed Date Election in effect at a time, which election shall be irrevocable and which may be made only in accordance with procedures established from time to time by the Administrative Committee and in compliance with all applicable requirements of Code Section 409A. If a Participant retires, dies, suffers a Total Disability, or otherwise terminates employment or membership on the Board before the fixed date elected by the Participant, his Account shall be distributed in accordance with the election in effect for a distribution due to the reason for termination of employment or board membership (both as to time of payment and form of payment) and the Fixed Date Election shall not apply.”

4. Section 5.2 of the Plan is hereby amended to replace the existing third sentence thereof with the following:

“The Participant may change his election of a Distribution Option pursuant to an election made during the annual deferral election period prior to the beginning of each Plan Year, provided said election is made at least twelve (12) months prior to the date that payments would have otherwise begun under such option and provided that a Participant may not change a Distribution Option or a distribution date in a manner that does not comply with Code Section 409A or applicable transition rules thereunder.”

5. All other terms and provisions shall remain unchanged.

CARDINAL HEALTH, INC.
By:	/s/ Susan Nelson
Title:	Senior Vice President – Total Rewards
Date:	October 23, 2006

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EX-10.04

Exhibit 10.04

Cardinal Health, Inc.

Global Employee Stock Purchase Plan

Section 1 - Purpose

The Cardinal Health, Inc. Global Employee Stock Purchase Plan, originally adopted and established by Cardinal Health, Inc., an Ohio corporation, effective as of July 1, 2000, for the general benefit of the Employees of the Company and of certain of its Subsidiaries, is hereby amended and restated effective as of May 10, 2006. The purpose of the Plan is to facilitate the purchase of Shares by Eligible Employees.

Section 2 - Definitions

a. “Act” shall mean the Securities Act of 1933, as amended.

b. “Administrator” shall mean the Human Resources and Compensation Committee of the Board of Directors of the Company, or the person(s) or entity delegated the responsibility of administering the Plan.

c. “Agent” shall mean the bank, brokerage firm, financial institution, or other entity or person(s) engaged, retained or appointed to act as the agent of the Employer and of the Participants under the Plan.

d. “Board” shall mean the Board of Directors of the Company.

e. “Closing Value” shall mean, as of a particular date, the value of a Share determined by the closing sales price for such Share (or the closing bid, if no sales were reported) as quoted on The New York Stock Exchange for the date of determination as reported in The Wall Street Journal or such other source as the Administrator deems reliable. For this purpose, the date of determination shall be the first Trading Day of the Offering Period or the last Trading Day of the Offering Period, as applicable.

f. “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended and currently in effect, or any successor body of federal tax law.

g. “Company” shall mean Cardinal Health, Inc., including any successor thereto.

h. “Compensation,” unless otherwise required by local law, shall mean wages, salaries, fees for professional services and other amounts received for personal services actually rendered in the course of employment with the Employer (including, but not limited to, commissions paid to salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses) including amounts excludible from the Employee’s gross income under Code Section 402(a)(8) (relating to a Code Section 401(k) arrangement), Code Section 402(h) (relating to a Simplified Employee Pension), Code Section 125 (relating to a cafeteria plan) or Code Section 403(b) (relating to a tax-sheltered annuity) and compensation paid by the Employer to an Employee through another person under the common paymaster provisions of Code Sections 3121(s) and 3306(p) or under applicable savings or pension plans of the Employer of the Employee. Compensation does not include, unless otherwise required by local law: (1) amounts realized from the exercise or sale of a non-qualified stock option, or (2) amounts realized when restricted stock (or property) held by an Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture or becomes fully owned by the Employee, or (3) amounts realized from the exercise, sale, exchange, or other disposition of stock acquired under a qualified or incentive stock option, (4) moving allowances, automobile allowances, tuition reimbursement, financial/tax planning reimbursement, lunch vouchers, house allowances, and other allowances that receive special tax benefits, other extraordinary compensation, including tax “gross-up” payments, and imputed income from other

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employer-provided benefits, and (5) other amounts that receive special tax benefits, such as premiums for group term life insurance or contributions made by the Employer (whether or not under a salary reduction agreement) or mandatory payments made by the Employer to the Employee under the applicable law of the jurisdiction in which the Employer of the Employee is located or the Employee is employed or resides.

i. “Designated Subsidiaries” shall mean all Subsidiaries whose Employees have been designated by the Administrator, in its sole discretion, as eligible to participate in the Plan.

j. “Eligible Employee” means an Employee of the Designated Subsidiary who is designated to participate in the Plan at the sole discretion of the Designated Subsidiary; provided, however, that such discretion shall not be exercised in violation of the applicable labor or other laws, including but not limited to laws relating to discrimination based on gender, race, disability, age, national or social origin, political opinion, union membership or religious belief, or collective bargaining or other negotiated agreements.

k. “Employee” means any person who is a regular, full time or part time employee of the Employer for at least 30 days and who is normally included in the authorized staffing target and budget. Employee also includes an employee who has been hired on a temporary contract but who is expected to fill a permanent staffing need and who is classified as a “PRN” or “on-call employee.” Employees shall not include unionized employees as defined by the regular practices of the Employer participating in the Plan to the extent permissible under local law.

l. “Employer” means, individually and collectively, the Company and the Designated Subsidiaries.

m. “Enrollment Period” shall mean the period immediately preceding the Offering Period that is designated by the Administrator in its discretion as the period during which an Eligible Employee may elect to participate in the Plan.

n. “Offering Period” shall mean the period during which Participants in the Plan authorize payroll deductions to fund the purchase of Shares on their behalf under the Plan pursuant to the options granted to them hereunder or the period during which participants in the Plan provide alternative contributions for the same purpose. Alternative contributions for the purpose of this Plan shall mean the payment of contributions through personal checks of the Participants or such other means of contributing to the Plan as authorized by the Administrator from time to time.

o. “Participant” shall mean any Eligible Employee who has elected to participate in the Plan for an Offering Period by authorizing payroll deductions or by making alternative contributions and following all applicable procedures established by the Administrator during the Enrollment Period for such Offering Period.

p. “Plan” shall mean this Cardinal Health, Inc. Global Employee Stock Purchase Plan, as amended from time to time.

q. “Plan Account” shall mean the individual account established for each Participant for purposes of accounting for and/or holding each Participant’s payroll deductions, alternative contributions, Shares, etc.

r. “Plan Year” shall mean the fiscal year of the Company.

s. “Purchase Price” shall mean, for each Share purchased in accordance with Section 4 hereof, an amount equal to the lesser of (1) eighty-five percent (85%) of the Closing Value of a Share on the first Trading Day of each Offering Period, or the earliest date thereafter as is administratively feasible (which for Plan purposes shall be deemed to be the date the option to purchase such Shares was granted to each Eligible Employee who is, or elects to become, a Participant); or (2) eighty-five percent (85%) of the Closing Value of such Share on the last Trading Day of the Offering Period, or the earliest date thereafter as is administratively feasible (which for Plan purposes shall be deemed to be the date each such option to purchase such Shares was exercised).

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t. “Shares” means the common shares, without par value, of the Company.

u. “Subsidiary” shall mean a corporation or other entity, domestic or foreign, of which not less than fifty percent (50%) of the voting shares are held by the Company or a Subsidiary (except for the U.K. in which this term shall mean a corporation or other entity, domestic or foreign, of which more than fifty percent (50%) ownership of the voting shares are held by the Company or a Subsidiary) whether or not such corporation or other entity now exists or is hereafter organized or acquired by the Company or a Subsidiary (or as otherwise may be defined in Code Section 424).

v. “Trading Day” shall mean a day on which The New York Stock Exchange is open for trading.

Section 3 - Eligible Employees

a. In General. Participation in the Plan is voluntary. Except as otherwise provided in Section 17, all Eligible Employees of an Employer are eligible to participate in the Plan. All Eligible Employees granted options to purchase Shares hereunder shall have the same rights and privileges as every other such Eligible Employee, and only Eligible Employees of an Employer satisfying the applicable requirements of the Plan will be entitled to be granted options hereunder.

b. Limitations on Rights. An Employee who otherwise is an Eligible Employee shall not be entitled to purchase Shares under the Plan if such purchase would cause such Eligible Employee to own Shares (including any Shares which would be owned if such Eligible Employee purchased all of the Shares made available for purchase by such Eligible Employee under all options or rights then held by such Eligible Employee, whether or not then exercisable) representing five percent (5%) or more of the total combined voting power or value of each class of stock of the Company or any Subsidiary.

Section 4 - Enrollment and Offering Periods

a. Enrolling in the Plan. To participate in the Plan, an Eligible Employee must enroll in the Plan. Enrollment for a given Offering Period will take place during the Enrollment Period for such Offering Period. The Administrator shall designate the initial Enrollment Period and each subsequent Enrollment Period and the Offering Period to which each Enrollment Period relates. Participation in the Plan with respect to any one or more of the Offering Periods shall neither limit nor require participation in the Plan for any other Offering Period.

b. The Offering Period. Any Employee who is an Eligible Employee and who desires to be granted options to purchase Shares hereunder must enroll in accordance with the procedures established by the Administrator during an Enrollment Period. Such authorization shall be effective for the Offering Period immediately following such Enrollment Period. The duration of an Offering Period shall be determined by the Administrator prior to the Enrollment Period and shall commence on the first day (or the first Trading Day) of the Offering Period and end on the last day (or the last Trading Day) of the Offering Period; provided, however, that if the Administrator terminates the Plan during an Offering Period, pursuant to its authority in Section 17 of the Plan, such Offering Period shall be deemed to end on the date the Plan is terminated. The termination of the Plan and the Offering Period shall end the Participant’s rights to contribute amounts to the Plan or continue participation in the Offering Period. The date of termination of the Plan shall be deemed to be the final day of the Offering Period for purposes of determining the Purchase Price under the Offering Period and all amounts contributed during the Offering Period will be used as of such termination date to purchase Shares in accordance with the provisions of Section 9 of this Plan.

The Administrator may designate one or more Offering Periods during each Plan Year during the term of this Plan. On the first day (or the First Trading Day) of each Offering Period, each Participant shall be granted an option to purchase Shares under the Plan. Each option granted hereunder shall expire at the end of the Offering Period for which it was granted. In no event may an option granted hereunder be exercised after the expiration of 27 months from the date of grant.

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c. Changing Enrollment. The offering of Shares pursuant to options granted under the Plan shall occur only during an Offering Period and shall be made only to Participants. Once an Eligible Employee is enrolled in the Plan, the Administrator or Employer will inform the Agent of such fact. Once enrolled, a Participant shall continue to participate in the Plan for each successive Offering Period until he or she terminates his or her participation by revoking his or her payroll deduction or alternative contribution authorization or by not contributing his or her alternative contributions or by ceasing to be an Eligible Employee. Once a Participant has elected to participate under the Plan, that Participant’s payroll deduction authorization or alternative contribution authorization shall apply to all subsequent Offering Periods unless and until the Participant ceases to be an Eligible Employee, or modifies or terminates said authorization. If a Participant desires to change his or her rate of contribution, he or she may do so effective for the next Offering Period by following the procedures established by the Administrator during the Enrollment Period immediately preceding such Offering Period.

Section 5 - Term of Plan

This Plan shall be in effect from July 1, 2000, until it is terminated by action of the Administrator or the Board.

Section 6 - Number of Shares to Be Made Available

Subject to adjustment as provided in Section 16 hereof, the total number of Shares made available for purchase by Participants granted options which are exercised under Section 9 hereof is 4.5 million, which may consist of authorized but unissued shares, treasury shares, or shares purchased by the Plan in the open market. The provisions of Section 9 b. shall control in the event the number of Shares covered by options which are exercised for any Offering Period exceeds the number of Shares available for sale under the Plan. If all of the Shares authorized for sale under the Plan have been sold, the Plan shall either be continued through additional authorizations of Shares made by the Administrator (such authorizations must, however, comply with Section 17 hereof), or shall be terminated in accordance with Section 17 hereof.

Section 7 - Use of Funds

All payroll deductions or alternative contributions received or held by an Employer under the Plan will be used to purchase Shares in accordance with the provisions of this Plan. Any amounts held by an Employer or other party holding amounts in connection with or as a result of payroll withholding or alternative contribution made pursuant to the Plan and pending the purchase of Shares hereunder shall be considered a non-interest-bearing, unsecured indebtedness extended to the Employer or other party by the Participants, unless otherwise required under applicable local law or securities regulatory body requirements of the country in which the Employer of the Employee is located or the Employee is employed or resides, as the case may be. Administrative expenses of the Plan shall be allocated to each Participant’s Plan Account unless such expenses are paid by the Employer.

Section 8 - Amount of Contribution; Method of Payment

a. Payroll Withholding or Payroll Deduction or Alternative Contributions. Except as otherwise specifically provided herein, the Purchase Price will be payable by each Participant by means of payroll withholding. The withholding or alternative contributions shall be in increments of one percent (1%). Unless otherwise authorized by the Administrator, the minimum withholding or alternative contributions permitted shall be an amount equal to one percent (1%) of a Participant’s Compensation and the maximum withholding or alternative contributions shall be an amount equal to fifteen percent (15%) of a Participant’s Compensation. In any event, the total withholding or alternative contributions permitted to be made by any Participant for a calendar year shall be limited to the sum of legal currency equivalent of U.S. $21,250. The actual percentage of Compensation to be deducted or contributed shall be specified by a Participant in his or her authorization to participate in the Plan. Unless otherwise authorized by the Administrator, Participants may not deposit any separate cash payments into their Plan Accounts.

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b. Application of Withholding Rules. Payroll withholding will commence with the first payroll issued during the Offering Period and will, except as otherwise provided herein, continue with each payroll throughout the entire Offering Period, except for pay periods for which such Participant receives no compensation (e.g., uncompensated personal leave, leave of absence). A pay period which ends at such time that it is administratively impracticable to credit any payroll for such pay period to the then-current Offering Period will be credited in its entirety to the immediately subsequent Offering Period. A pay period which overlaps Offering Periods will be credited in its entirety to the Offering Period in which it is paid. Alternative contributions will be made in accordance with the procedure established by the Administrator. Payroll withholding or alternative contributions shall be retained by the Employer or other party, designated by the Administrator or the Employer as the case may be, until applied to the purchase of Shares as described in Section 9 hereof and the satisfaction of any related federal, state, local or other tax withholding obligations (including any employment tax obligations).

At the time the Shares are purchased, or at the time some or all of the Shares issued under the Plan are disposed of, Participants must make adequate provision for the Employer’s federal, state, local or other tax withholding obligations (including employment taxes), if any, which arise upon the purchase or disposition of the Shares. At any time, the Employer may withhold from each Participant’s Compensation the amount necessary for the Employer to meet applicable withholding obligations, including any withholding required to make available to the Employer any tax deductions or benefits attributable to the sale or early disposition of Shares by the Participant. Each Participant, as a condition of participating under the Plan, agrees to bear responsibility for all federal, state, local and other income taxes required to be withheld from his or her Compensation as well as the Participant’s portion of FICA (both the OASDI and Medicare components), and other applicable social security or similar such taxes, with respect to any Compensation arising on account of the purchase or disposition of Shares. The Employer may increase income and/or employment tax withholding on a Participant’s Compensation after the purchase or disposition of Shares in order to comply with federal, state, local and other tax laws, and each Participant agrees to sign any and all appropriate documents to facilitate such withholding.

Section 9 - Purchasing, Transferring Shares

a. Maintenance of Plan Account. Upon the exercise of a Participant’s initial option to purchase Shares under the Plan, the Agent shall establish a Plan Account in the name of such Participant. No later than the close of each Offering Period, the aggregate amount deducted during such Offering Period by the Employer from a Participant’s Compensation, or alternative contributions made to the Plan by the Participant (and credited to an account maintained by the Employer or other party for bookkeeping purposes) will be communicated by the Employer to the Agent and shall thereupon be credited by the Agent to such Participant’s Plan Account (unless the Participant has given notice to the Administrator of his or her revocation of authorization prior to the date such communication is made). As of the last day of each Offering Period, or as soon thereafter as is administratively practicable, each Participant’s option to purchase Shares will be exercised automatically for him or her by the Agent with respect to those amounts reported to the Agent by the Administrator or Employer as creditable to that Participant’s Plan Account. On the date of exercise, the amount then credited to the Participant’s Plan Account for the purpose of purchasing Shares hereunder will be divided by the Purchase Price and there shall be transferred to the Participant’s Plan Account by the Agent the number of whole and/or fractional shares which results, as permitted by local law.

The Agent shall hold in its name, or in the name of its nominee, all Shares so purchased and allocated. No certificate will be issued to a Participant for Shares held in his or her Plan Account unless he or she so requests in writing or unless such Participant’s active participation in the Plan is terminated due to death, disability, separation from service or retirement. Notwithstanding any provision herein to the contrary, no certificates shall be issued for Shares until such Shares have been held in the Participant’s Plan Account for a period of at least 24 months following the date of the granting of the option to purchase such Shares. Participation in the Plan, purchase, ownership and sale of Shares under the Plan, is subject to risk of fluctuation in Shares’ price and currency exchange.

b. Insufficient Number of Available Shares. In the event the number of Shares covered by options which are exercised for any Offering Period exceeds the number of Shares available for sale under the Plan, the number of Shares actually available for sale hereunder shall be limited to the remaining number of Shares authorized for sale under the Plan and shall be allocated by the Agent among the Participants in proportion to each

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Participant’s Compensation during the Offering Period over the total Compensation of all Participants during the Offering Period. Any excess amounts withheld and credited to Participants’ Plan Accounts then shall be returned to the Participants as soon as is administratively practicable.

c. Handling Excess Shares. In the event that the number of Shares which would be credited to any Participant’s Plan Account in any Offering Period exceeds the limit specified in Section 3 b. hereof, such Participant’s Plan Account shall be credited with the maximum number of Shares permissible, and the remaining amounts will be refunded in cash as soon as administratively practicable.

d. Status Reports. Statements of each Participant’s Plan Account shall be given to Participants at least annually.

Section 10 - Dividends and Other Distributions

a. Reinvestment of Dividends. Subject to applicable law, cash dividends and other cash distributions received by the Agent on Shares held in its custody hereunder will be credited to the Plan Accounts of individual Participants in accordance with such Participants’ interests in the Shares with respect to which such dividends or distributions are paid or made. Cash dividends will be applied, as soon as practicable after the receipt thereof by the Agent, in accordance with the directions of the individual Participant to whose Plan Account such amounts have been credited. Participants may, but are not required to, direct that such cash dividends be applied to the purchase in the open market at prevailing market prices of the number of whole Shares capable of being purchased with such funds (or the portion of such funds designated for such application by the Participant), after deduction of any bank service fees, brokerage charges, transfer taxes, and any other transaction fee, expense or cost payable in connection with the purchase of such Shares and not otherwise paid by the Employer, and subject to the Company’s obligation to withhold federal, state or other local taxes.

b. Shares to Be Held in Agent’s Name. All purchases of Shares made pursuant to this Section will be made in the name of the Agent or its nominee, shall be held as provided in Section 9 hereof, and shall be transferred and credited to the Plan Account(s) of the individual Participant(s) to which such dividends or other distributions were credited. Dividends paid in the form of Shares will be allocated by the Agent, as and when received, with respect to Shares held in its custody hereunder to the Plan Accounts of individual Participants in accordance with such Participants’ interests in such Shares with respect to which such dividends were paid. Property, other than Shares or cash, received by the Agent as a distribution on Shares held in its custody hereunder, shall be sold by the Agent for the accounts of the Participants, and the Agent shall treat the proceeds of such sale in the same manner as cash dividends received by the Agent on Shares held in its custody hereunder.

c. Tax Responsibilities. The reinvestment of dividends under the Plan will not relieve a Participant (or Eligible Employee with a Plan Account) of any income or other tax that may be due on or with respect to such dividends. The Agent shall report to each Participant (or Eligible Employee with a Plan Account) the amount of dividends credited to his or her Plan Account.

Section 11 - Voting of Shares

A Participant shall have no interest or voting right in the Shares covered by his or her option until such option has been exercised. Shares held for a Participant (or Eligible Employee with a Plan Account) in his or her Plan Account will be voted in accordance with the Participant’s (or Eligible Employee’s) express directions. In the absence of any such directions, such Shares will not be voted.

Section 12 - In-Service Distribution or Sale of Shares

a. Sale of Shares. Subject to the provisions of Section 19 hereof, a Participant may at any time, and without withdrawing from the Plan, by giving notice to the Agent, direct the Agent to sell all or part of the Shares held on behalf of the Participant. Upon receipt of such a notice, the Agent shall, as soon as practicable after receipt of such notice, sell such Shares in the marketplace at the prevailing market price and transmit the net

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proceeds of such sale (less any bank service fees, brokerage charges, transfer taxes, and any other transaction fee, expense or cost) to the Participant’s Plan Account.

b. In-Service Share Distributions. A Participant may, without withdrawing from the Plan, request that a certificate for all or part of the whole number of Shares held in his or her Plan Account be sent to him or her after the relevant Shares have been purchased and allocated subject to the requirement that such Shares be held in the Participant’s Plan Account for a period of at least 24 months after the date of the granting of the option, as described in Section 9 a., above. All such requests must be submitted in writing to the Agent. No certificate for a fractional Share will be issued; the fair value of fractional Shares on the date of withdrawal of all Shares credited to a Participant’s Plan Account shall be paid in cash to such Participant. The Plan may impose a reasonable charge, to be paid by the Participant, for each stock certificate so issued prior to the date active participation in the Plan ceases; such charge shall be paid by the Participant to the Administrator or Employer prior to the date any distribution of a certificate evidencing ownership of such Shares occurs.

Section 13 - Cessation of Active Participation

A Participant may revoke his or her authorization for payroll deduction or alternative contributions for an Offering Period by giving notice to the Administrator or Employer in accordance with procedures established by the Administrator from time to time. Any payroll deductions or alternative contributions made for an Offering Period prior to the effective date of the revocation of the deduction authorization or alternative contributions by the Participant shall be refunded to the Participant in cash. A Participant who revokes authorization for payroll deduction or does not make alternative contributions may not again participate under the Plan until the next Offering Period immediately subsequent to the Offering Period during which the Participant revoked payroll deduction authorization or did not make alternative contributions with respect thereto.

Section 14 - Separation from Employment

Separation from employment for any reason, including death, disability, termination or retirement, shall be deemed to be a cessation of active participation in the Plan and shall be treated as though the Participant revoked his or her authorization for payroll deductions or alternative contributions under Section 13, above. If a Participant has a separation from employment but is re-employed as an Eligible Employee, he or she shall be treated as a new Eligible Employee. The Administrator shall, in its sole discretion, determine what constitutes a separation from employment for purposes of this Section.

Section 15 - Assignment

Neither payroll deductions nor alternative contributions credited to a Participant’s Plan Account nor any rights to purchase Shares under the Plan may be assigned, alienated, transferred, pledged, or otherwise disposed of in any way by a Participant other than by will or the laws of descent and distribution. Any such assignment, alienation, transfer, pledge, or other disposition shall be without effect, except that the Administrator may treat such act as an election to withdraw from the Plan. A Participant’s right to purchase Shares under this Plan may be exercisable during the Participant’s lifetime only by the Participant. To the extent permitted by local law, a Participant’s Plan Account shall be payable to the Participant’s designated beneficiary or, if none, to the Participant’s estate upon his or her death.

Section 16 - Adjustment of and Changes in Shares

If at any time after the effective date of the Plan the Company shall subdivide or reclassify the Shares which have been or may be optioned under the Plan, or shall declare thereon any stock split or dividend payable in Shares, or shall alter the capital structure of the Shares or the Company in any similar manner, then the number and class of shares held in the Plan and which may thereafter be optioned (in the aggregate and to any Participant) shall be adjusted accordingly, and in the case of each option outstanding at the time of any such action, the number and class of shares which may thereafter be purchased pursuant to such option and the Purchase Price shall be adjusted accordingly, as necessary to preserve the rights of the holder(s) of such Shares and option(s).

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Section 17 - Amendment or Termination of the Plan

The Administrator shall have the right, at any time, to amend, modify or terminate the Plan without notice; provided, however, that no Participant’s existing options shall be adversely affected by any such amendment, modification or termination, except to comply with applicable law, stock exchange rules or accounting rules. Notwithstanding the foregoing, the Administrator shall have the right to terminate the Plan with respect to all future payroll deductions and related purchases at any time. Such termination of the Plan shall also terminate any current Offering Period in accordance with Section 4 of the Plan.

Designations of participating corporations may be made from time to time from among a group of corporations consisting of the Employer, its parent and its Subsidiaries (including corporations that become Subsidiaries or a parent after the adoption and approval of the Plan). Such designation may permit participation in the Plan of all of the Eligible Employees working for the corporation or only those Eligible Employees who work for the corporation in a particular country or countries.

The Administrator may amend or modify the Plan or make regulations for the operation of the Plan that are not inconsistent with these rules to apply to Employees and Participants who are employed or resident outside of the United States of America in accordance with the relevant law. “Relevant law” shall mean the applicable law of the jurisdiction in which the Employer of the Employee is located or where the Employee is employed or resides and the securities regulatory body requirements and the taxation requirements of that same jurisdiction.

Section 18 - Administration

a. Administration. The Plan shall be administered by the Administrator. The Administrator shall be responsible for the administration of all matters under the Plan which have not been delegated to the Agent. The Administrator shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Any rule or regulation adopted by the Administrator shall remain in full force and effect unless and until altered, amended or repealed by the Administrator.

b. Specific Responsibilities. The Administrator’s responsibilities shall include, but shall not be limited to:

(1) interpreting the Plan (including issues relating to the definition and application of “Compensation”);

(2) identifying and compiling a list of persons who are Eligible Employees for an Offering Period;

(3) identifying those Eligible Employees not entitled to be granted options or other rights for an Offering Period on account of the limitations described in Section 3 b. hereof; and

(4) providing to Participants upon request Company financial statements which are publicly available.

The Administrator may from time to time adopt rules and regulations for carrying out the terms of the Plan. Interpretation or construction of any provision of the Plan by the Administrator shall be final and conclusive on all persons, absent specific and contrary action taken by the Board. Any interpretation or construction of any provision of the Plan by the Administrator or the Board shall be final and conclusive.

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Section 19 - Securities Law and Other Restrictions

Notwithstanding any provision of the Plan to the contrary, no payroll deductions or alternative contributions shall take place and no Shares may be purchased under the Plan until a registration statement has been filed and become effective with respect to the issuance of the Shares covered by the Plan under the Act and any other required action has been taken under any other applicable law of the jurisdiction in which the Employer of the Employee is located or the Employee is employed or resides. Prior to the effectiveness of such registration statement, Shares subject to purchase under the Plan may be offered to Eligible Employees only pursuant to an exemption from the registration requirements of the Act and pursuant to any other action that is required under any other applicable law of the jurisdiction in which the Employer of the Employee is located or the Employee is employed or resides.

Section 20 - No Independent Employee’s Rights

Nothing in the Plan shall be construed to be a contract of employment between an Employer or its parent or any Subsidiary and any Employee, or any group or category of Employees (whether for a definite or specific duration or otherwise), or to prevent the Employer, its parent or any Subsidiary from terminating any Employee’s employment at any time, without notice or recompense to the extent permissible under local law. Nothing in this Plan shall be construed as conferring any rights of a shareholder in any Employee or any other person until the option to purchase Shares granted to the Employee hereunder has been exercised.

Section 21 - Applicable Law

The Plan shall be construed, administered and governed in all respects under the laws of the State of Ohio to the extent such laws are not preempted or controlled by federal law.

Section 22 - Merger or Consolidation

If the Company shall at any time merge into or consolidate with another corporation or business entity, each Participant will thereafter be entitled to receive at the end of the Offering Period (during which such merger or consolidation occurs) the securities or property which a holder of Shares was entitled to upon and at the time of such merger or consolidation. A sale of all or substantially all of the assets of the Company shall be deemed a merger or consolidation for the foregoing purposes.

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EX-31.01

Exhibit 31.01

I, R. Kerry Clark, certify that:

1. I have reviewed this Form 10-Q of Cardinal Health, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 8, 2007

/s/ R. Kerry Clark

R. Kerry Clark

President and Chief Executive Officer

EX-31.02

Exhibit 31.02

I, Jeffrey W. Henderson, certify that:

1. I have reviewed this Form 10-Q of Cardinal Health, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 8, 2007

/s/ Jeffrey W. Henderson

Jeffrey W. Henderson

Chief Financial Officer

EX-32.01

Exhibit 32.01

Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, R. Kerry Clark, President and Chief Executive Officer of Cardinal Health, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q for the quarter ended December 31, 2006 containing the financial statements of the Company (the “Periodic Report”), which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 8, 2007

/s/ R. Kerry Clark

R. Kerry Clark

President and Chief Executive Officer

EX-32.02

Exhibit 32.02

Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Jeffrey W. Henderson, Chief Financial Officer of Cardinal Health, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q for the quarter ended December 31, 2006 containing the financial statements of the Company (the “Periodic Report”), which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 8, 2007

/s/ Jeffrey W. Henderson

Jeffrey W. Henderson

Chief Financial Officer

EX-99.01

Exhibit 99.01

The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides a “safe harbor” for “forward-looking statements” (as defined in the PSLRA). Cardinal Health’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including Cardinal Health’s annual report on Form 10-K for the fiscal year ended June 30, 2006 (the “2006 Form 10-K”), Cardinal Health’s Annual Report to Shareholders, any quarterly report on Form 10-Q or any current report on Form 8-K of Cardinal Health (along with any exhibits to such Forms as well as any amendments to such Forms), our press releases, or any other written or oral statements made by or on behalf of Cardinal Health, may include or incorporate by reference forward-looking statements which reflect Cardinal Health’s current view (as of the date such forward-looking statement is first made) with respect to future events, prospects, projections or financial performance. These forward-looking statements are subject to certain risks and uncertainties and other factors that could cause actual results to differ materially from those made, implied or projected in or by such statements. These uncertainties and other factors include, but are not limited to:

• uncertainties relating to general economic, political, business, industry, regulatory and market conditions;

• the loss of, or default by, one or more key customers or suppliers, such as pharmaceutical or medical/surgical manufacturers for which alternative supplies may not be available or easily replaceable;

• unfavorable changes to the terms of key customer or supplier relationships, or changes in customer mix;

• changes in manufacturers’ pricing, selling, inventory, distribution or supply policies or practices, including policies concerning price inflation or deflation;

• changes in the frequency or rate of branded pharmaceutical price increases where price inflation is either a component of compensation from a distribution service agreement or the sole form of compensation from certain branded pharmaceutical manufacturers;

• changes in the distribution or outsourcing pattern for pharmaceutical and medical/surgical products and services, including an increase in direct distribution or a decrease in contract packaging by pharmaceutical manufacturers;

• uncertainties related to completing the divestiture of the Pharmaceutical Technologies and Services segment, including the fulfillment or waiver of conditions to closing under the acquisition agreement and any adjustments as to the amount of actual proceeds to be received;

• the costs, difficulties and uncertainties related to the integration of acquired businesses, including liabilities related to the operations or activities of such businesses prior to their acquisition;

• changes to the presentation of financial results and position resulting from adoption of new accounting principles or upon the advice of our independent accountants or the staff of the SEC;

• difficulties and costs associated with enhancing our accounting systems and internal controls and complying with financial reporting requirements;

• changes in laws and regulations or our failure to comply with applicable laws or regulations;

• legislative changes to the prescription drug reimbursement formula and related reporting requirements for generic pharmaceuticals under Medicaid;

• future actions of regulatory bodies and other government authorities, including the U.S. Food and Drug Administration (“FDA”) and foreign counterparts, that could delay, limit or suspend product development, manufacturing or sale or result in seizures, injunctions and monetary sanctions, including any sanctions available under the Consent Decree for Condemnation and Permanent Injunction entered into with the FDA concerning the Alaris^® SE pumps;

• the results, effects or timing of any internal or external inquiry or investigation, including those by any regulatory authority and any related legal and administrative proceedings;

• the impact of previously announced restatements;

• the costs and effects of shareholder claims, derivative claims, commercial disputes, patent infringement claims or other legal proceedings or investigations;

• the costs, effects, timing or success of restructuring programs or plans;

• downgrades of our credit ratings, and the potential that such downgrades could adversely affect our access to capital or increase our cost of capital;

• increased costs for the components, compounds, raw materials or energy used by our manufacturing businesses or shortages in these inputs;

• the risks of counterfeit products in the supply chain;

• injury to person or property resulting from our manufacturing, compounding, packaging, repackaging, drug delivery system development and manufacturing, information systems or pharmacy management services;

• competitive factors in our healthcare service businesses, including pricing pressures;

• the continued financial viability and success of our customers, suppliers and franchisees;

• failure to retain or continue to attract senior management or key personnel;

• uncertainties related to transitions in senior management positions;

• tax legislation initiatives or challenges to our tax positions;

• risks associated with international operations, including fluctuations in currency exchange ratios;

• costs associated with protecting our trade secrets and enforcing our patent, copyright and trademark rights, and successful challenges to the validity of our patents, copyrights or trademarks;

• difficulties or delays in the development, production, manufacturing and marketing of new products and services, including difficulties or delays associated with obtaining requisite

regulatory consents or approvals associated with those activities;

• disruption or damage to or failure of our information systems;

• strikes or other labor disruptions;

• labor, pension and employee benefit costs;

• changes in hospital buying groups or hospital buying practices; and

• other factors described in “Item 1A: Risk Factors” of the 2006 Form 10-K.

The words “believe,” “expect,” “anticipate,” “project,” “estimate,” “target,” “intend,” “seek,” and similar expressions generally identify “forward-looking statements,” which speak only as of the date the statement was made. We undertake no obligation to publicly update or revise any forward-looking statements, except to the extent required under applicable law.

EX-99.02

Exhibit 99.02

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,	)	CIVIL NO. 06 CV 1706 BEN (NLS)
	)
Plaintiff,	)
	)
	)
v.	)
	)	CONSENT DECREE FOR
Undetermined quantities of boxes	)	CONDEMNATION AND
of Signature Edition Gold infusion	)	PERMANENT INJUNCTION
pumps, articles of device, each	)
box containing one infusion pump,	)
Model numbers 7130, 7131, 7230,	)
and 7231, labeled in part:	)
	)
	)
(box)	)
	)
“*** ALARIS™ MEDICAL SYSTEMS ***	)
ALARIS Medical Systems, Inc. San	)
Diego, CA USA *** SN ***”	)
	)
(pump)	)
	)
“*** ALARIS *** Signature Edition®	)
GOLD Infusion System *** ALARIS	)
*** MEDICAL SYSTEMS *** SAN	)
DIEGO, CA ***,”	)
	)
Defendants.	)

On August 23, 2006, Plaintiff, the United States of America, by and through its attorneys, filed a verified complaint for forfeiture against certain articles that were in the possession of Cardinal Health 303, Inc. (“Cardinal 303”), located at 9190 Activity Road, San Diego, California. The complaint alleged, among other things, that the above-captioned articles (the “Seized Articles”) are adulterated under Sections 501(c) and 501(h) of the Federal Food, Drug, and Cosmetic Act (the “Act”), 21 U.S.C. §§ 351(c) and 351(h). Pursuant to the Warrant for Arrest

issued by this Court, the United States Marshal for this district (“Marshal”) seized the articles of device at Cardinal 303’s facility on August 25, 2006. Cardinal 303, formerly known as ALARIS Medical Systems, Inc. (“Claimant” or “Defendant”), filed a statement of interest signed by Dwight Winstead, President and Chief Operating Officer, for the Seized Articles on September 6, 2006.

The complaint alleges that the Seized Articles are: (1) adulterated within the meaning of the Act, 21 U.S.C. § 351(c), in that their quality falls below that which they purport and are represented to possess; and (2) adulterated within the meaning of the Act, 21 U.S.C. § 351(h), in that the methods used in, and the facilities and controls used for, their manufacture, packing, storage, and installation are not in conformity with current good manufacturing practice (“CGMP”) and the Quality System regulation (“QS regulation”) as promulgated under 21 C.F.R. Part 820.

Defendants, Cardinal 303, Dwight Winstead (Cardinal 303’s President and Chief Operating Officer), David L. Schlotterbeck (Cardinal 303’s Chairman and Chief Executive Officer), and William H. Murphy (Cardinal 303’s Senior Vice President of Quality and Regulatory Affairs) (collectively, “Defendants” unless otherwise specified), without admitting the allegations in the complaint, have appeared, waived the filing and service of an amended complaint seeking injunctive relief, and, before any testimony has been taken, agreed to the entry of this Consent Decree.

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows:

1. This Court has jurisdiction over the subject matter herein and has personal jurisdiction over all parties to this action pursuant to 28 U.S.C. § 1345 and 21 U.S.C. §§ 332 and 334. Venue is proper in this district under 28 U.S.C. §§ 1391(b)-(c) and 1395.

2. The complaint states a claim for relief against the Seized Articles under the Act, 21 U.S.C. §§ 301-397.

3. Defendant Cardinal 303 has made a claim as to all of the Seized Articles. Defendant Cardinal 303 further affirms that it shall indemnify and hold the United States harmless should any other party or parties hereafter file or seek to file a statement of interest or right to intervene in this action, or seek to defend or obtain any part of the Seized Articles.

4. The complaint alleges that the Seized Articles violate the Act in the following ways:

A. The Seized Articles (Signature Edition Gold infusion pumps; model numbers 7130, 7131, 7230, 7231) are adulterated within the meaning of the Act, 21 U.S.C. § 351(c), in that their quality falls below that which they purport and are represented to possess; and

B. The Seized Articles (Signature Edition Gold infusion pumps; model numbers 7130, 7131, 7230, 7231) are adulterated within the meaning of the Act, 21 U.S.C. § 351(h), in that the methods used in, and the facilities and controls used for, their manufacture, packing, storage, and installation are not in conformity with CGMP and the QS regulation as promulgated under 21 C.F.R. Part 820.

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Without admitting these allegations, Defendants agree to enter this Decree without contest.

5. The Seized Articles are hereby condemned pursuant to 21 U.S.C. § 334(a) and forfeited to the United States.

6. The United States shall recover from Defendant Cardinal 303 all court costs, fees, and storage and other proper expenses, and such further costs for which Defendant Cardinal 303 is liable pursuant to 21 U.S.C. § 334(e) with respect to the Seized Articles. Defendant Cardinal 303 shall pay these costs within fifteen (15) calendar days of receiving written notice from the Food and Drug Administration (“FDA”) of such costs.

7. Pursuant to 21 U.S.C. § 334(d)(1), within twenty (20) calendar days of the entry of this Decree, Defendant Cardinal 303 shall execute and file with the clerk of this Court a good and sufficient penal bond (the “Bond”) with surety in the amount of 3.6 million dollars ($3,600,000). The Bond shall be in a form acceptable to the clerk of this Court and payable to the United States of America, and conditioned on Defendants abiding by and performing all of the terms and conditions of this Decree and of such further orders and decrees as may be entered in this proceeding.

8. A. Within thirty (30) calendar days of the entry of this Decree, and after filing the Bond with this Court as provided in paragraph 7 of this Decree, Defendant Cardinal 303 shall give written notice to FDA that Defendant Cardinal 303, at its own expense, is prepared to attempt to bring the Seized Articles into compliance with the law under FDA’s supervision. This notice shall include a detailed written plan describing Defendant Cardinal 303’s proposal to bring the Seized Articles into compliance with the Act. Defendants shall not attempt to bring the

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Seized Articles into compliance until Defendant Cardinal 303 has submitted a written plan to FDA and FDA has notified Defendant Cardinal 303 in writing that its plan is acceptable. FDA’s decision regarding the adequacy of the reconditioning proposal shall constitute final agency action.

B. FDA shall notify Defendant Cardinal 303 in writing within forty-five (45) calendar days of FDA’s receipt of Defendant Cardinal 303’s reconditioning plan whether the reconditioning plan is acceptable in whole or in part. If the reconditioning plan is acceptable with regard to some of the Seized Articles and not others, FDA shall specify those Seized Articles for which the reconditioning plan is acceptable. If FDA notifies Defendant Cardinal 303 in writing that some or all of the reconditioning plan is unacceptable, FDA shall state the basis for such determination. Defendant Cardinal 303 shall then submit, within twenty (20) calendar days of receipt of FDA’s letter, either a revised reconditioning plan for those Articles for which the initial plan was unacceptable or a plan to destroy those Articles as set forth below. FDA shall respond in writing within thirty (30) calendar days of its receipt of Defendant Cardinal 303’s revised reconditioning plan to notify Defendants as to whether the revised plan is acceptable. If Defendant Cardinal 303 has not submitted a revised reconditioning plan within twenty (20) calendar days of receipt of FDA’s letter, or if FDA finds that the revised reconditioning plan is unacceptable, Defendants shall cause that portion of the Seized Articles for which no revised reconditioning plan was submitted or for which the revised reconditioning plan was deemed unacceptable, to be promptly destroyed at Defendant Cardinal 303’s expense and under the supervision of an FDA representative. If FDA finds that Defendant Cardinal 303’s revised reconditioning plan is unacceptable, in whole or in part, Defendants may challenge that decision

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under the terms set forth in paragraph 27. Defendants may execute any portion of the initial or revised reconditioning plan that was found acceptable to FDA in accordance with the applicable provisions of the Decree.

C. Defendants shall not dispose of the Seized Articles or any part of them in a manner contrary to the provisions of the Act, or any other federal law, or of the laws of any state or territory (as defined in the Act) in which they are disposed. All Seized Articles that are not successfully reconditioned as provided by this Decree shall be destroyed by Defendants at Defendant Cardinal 303’s expense under supervision of an FDA representative, and Defendant Cardinal 303 shall pay to the United States all costs incurred in supervising the destruction of such articles, at rates specified in paragraph 20 of this Decree.

D. Following Defendant Cardinal 303’s receipt of written authorization to commence attempting to bring the Seized Articles into compliance with the Act and following the payment of costs pursuant to paragraph 6 and the posting of the Bond by Defendant Cardinal 303 as required by paragraph 7 of this Decree, the Marshal shall, upon receiving written notice from FDA, release those Articles that are specified in FDA’s notice to Defendant Cardinal 303 from his custody to the custody of Defendant Cardinal 303 for the purpose of attempting to bring the Articles into compliance with the law.

E. Defendants shall at all times, until the Seized Articles have been brought into compliance with the law as determined by FDA or destroyed under FDA supervision, retain the Seized Articles intact for examination or inspection by FDA in a place made known to and approved by FDA, and shall retain the records or other proof necessary to establish the identity of the Seized Articles.

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F. If requested by FDA, Defendant Cardinal 303 shall furnish duplicate copies of invoices of sale of any released devices, or other evidence of disposition as FDA may request.

G. Within ninety (90) calendar days of receiving approval and/or rejection of the reconditioning plan pursuant to paragraph 8(B), Defendants shall either destroy the Seized Articles at Defendant Cardinal 303’s sole expense under the supervision of the FDA representative or complete their attempt to bring the Seized Articles into compliance with the law in a manner set forth in the reconditioning plan found acceptable to FDA. Defendant Cardinal 303 shall reimburse the United States for the costs of supervising the reconditioning and/or destruction of the Seized Articles within twenty (20) calendar days of receiving an invoice for such costs at the rates listed in paragraph 20. Defendant Cardinal 303 shall also bear all costs of destruction and be responsible for ensuring that such destruction is carried out in a manner that complies with the provisions of the Act, other federal laws, and the laws of any state or territory (as defined in the Act) in which they are disposed. Within twenty-five (25) calendar days of receiving Defendant Cardinal 303’s written notice to FDA of completion of the attempt to bring the Seized Articles into compliance with the Act and/or destruction of the Seized Articles, FDA shall provide Defendant Cardinal 303 with an invoice for the costs of supervising such attempt and/or destruction. Defendant Cardinal 303 shall pay those costs within twenty (20) calendar days of receiving FDA’s invoice. Upon receipt of such payment from Defendant Cardinal 303, FDA will notify the United States Attorney for this district that Defendants have brought the Seized Articles into compliance with the law and/or destroyed the articles, and that Defendant Cardinal 303 has paid the costs set forth in FDA’s invoice.

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H. The United States Attorney for this district, upon being advised by FDA that the foregoing conditions of this Decree have been performed, shall transmit such information to the clerk of this Court, whereupon the Bond given in this proceeding shall be canceled and discharged.

9. If Defendants fail to abide by and perform all of the terms and conditions of this Decree, or of the Bond, or of such further order or decree as may be entered in this proceeding, then the Bond posted as provided in paragraph 7 of this Decree shall, on motion of the Plaintiff in this proceeding, be forfeited in its entirety and judgment entered in favor of Plaintiff. In addition, if Defendants breach any term or condition of this Decree or such further order or decree as may be entered in this proceeding, then Defendant Cardinal 303 shall, at its own expense, immediately return the Seized Articles to the Marshal or otherwise dispose of them pursuant to an order of this Court. Following return of the Seized Articles to the United States, the Marshal shall destroy the Seized Articles and make due return to this Court. In the event that destruction of the Seized Articles by the Marshal becomes necessary pursuant to this paragraph, Defendant Cardinal 303 shall be responsible for all costs of storage and disposition that are incurred by the United States.

10. Defendants shall at no time, and under no circumstances whatsoever, ship, sell, offer for sale, or otherwise dispose of the Seized Articles, or any part thereof, until: (a) FDA has had free access to the articles in order to take any samples or make any tests or examinations that FDA deems necessary; (b) FDA has notified Defendants in writing that any reconditioning to be conducted in accordance with the reconditioning proposal in paragraph 8(A) is complete and that the reconditioned devices comply with the Act, its implementing regulations, and this Decree;

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and (c) FDA has notified the United States Attorney for this district that Defendants have completed their attempt to bring the articles into compliance with the law in accordance with paragraph 8(G).

11. Upon entry of this Decree, Defendants, and each and all of Defendant Cardinal 303’s officers, directors, agents, representatives, employees, successors, assigns, attorneys, and any and all persons in active concert or participation with any of them (including franchisees, affiliates, and “doing business as” entities), who have received actual notice of the contents of this Decree by personal service or otherwise, are permanently enjoined, pursuant to 21 U.S.C. § 332(a), from designing, manufacturing, processing, packing, repacking, labeling, holding, distributing, or importing into the United States of America all models of its Signature Edition infusion pumps identified (“SE infusion pumps”), unless and until:

A. The methods, facilities, and controls used to design, manufacture, process, pack, repack, label, hold, and distribute the SE infusion pumps are established, operated, and administered in compliance with 21 U.S.C. § 351(h) and 21 C.F.R. Part 820.

B. Defendant Cardinal 303 retains at its expense an independent person or persons (the “Expert”), who is qualified by education, training, and experience to conduct inspections of any Defendant Cardinal 303’s facilities that design, manufacture, process, pack, repack, label, hold, or distribute the SE infusion pumps or any component therein (hereafter, “SE infusion pump facilities”), and to review procedures and methods for designing, manufacturing, processing, packing, repacking, labeling, holding, and distributing SE infusion pumps, to determine whether their methods, facilities, and controls are operated and administered in conformity with 21 U.S.C. § 351(h), 21 C.F.R. Part 820, and this Decree. The Expert shall be

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without personal or financial ties (other than a consulting agreement between the parties) to any officer or employee of Defendant Cardinal 303 or their immediate families. Defendants shall notify FDA in writing of the identity of the Expert within ten (10) calendar days of retaining such Expert or ten (10) calendar days after the date this Decree is entered, whichever is later.

C. The Expert shall perform a comprehensive inspection of Defendant Cardinal 303’s SE infusion pump facilities and manner of operation and certify in writing to FDA: (1) that he or she has inspected Defendant Cardinal 303’s SE infusion pump facilities, processes, and controls; (2) whether Defendants have corrected all deviations set forth in FDA’s Inspectional Observations (Form FDA 483) from all prior FDA inspections since 2000; and (3) based upon this comprehensive inspection whether Defendant Cardinal 303’s infusion pump operations are operated in conformity with 21 U.S.C. § 351(h), 21 C.F.R. Part 820, and this Decree. The Expert’s certification report shall encompass, but not be limited to, an evaluation of the following:

i. Defendant Cardinal 303’s compliance with 21 U.S.C. §§ 351(h), 360j(f)(1), and 21 C.F.R. Part 820;

ii. Defendant Cardinal 303’s procedures for its Corrective and Preventive Action (“CAPA”) system including, but not limited to: analyzing quality data to identify existing and potential causes of nonconforming product and other quality problems; investigating the causes of nonconformities relating to product, processes, and the quality system; identifying the action(s) needed to correct and prevent recurrence of nonconforming product and other quality problems; verifying or validating corrective and preventative actions to ensure such actions are effective and do not adversely affect the finished device; implementing and recording changes in

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methods and procedures as needed to correct and prevent quality problems; (f) conducting and documenting adequate failure investigations; and (g) implementing an effective complaint handling system;

iii. Defendant Cardinal 303’s design control system, including the design change control process and performance of risk analysis;

iv. Steps taken by Defendant Cardinal 303 to identify the root causes for the key bounce problem in the SE infusion pumps and an evaluation of whether Defendant Cardinal 303 has implemented appropriate steps to correct and prevent key bounce;

v. Defendant Cardinal 303’s protocols and documentation for all design validation for the SE infusion pump, including any design changes made to the software; and

vi. Defendant Cardinal 303’s procedures to adequately inspect and test incoming products used in the SE infusion pumps to verify conformance to product specifications.

D. Defendants report to FDA in writing the actions that they have taken to: (1) correct all deviations set forth in FDA’s Inspectional Observations (Form FDA 483) from all prior FDA inspections since 2000; and (2) ensure that the methods used in, and the facilities and controls used for designing, manufacturing, processing, packing, repacking, labeling, holding, and distributing SE infusion pumps are operated and administered and will be continuously operated and administered in conformity with 21 U.S.C. § 351(h), 21 C.F.R. Part 820, and this Decree.

E. Within forty-five (45) calendar days of receipt of the report under paragraph 11(D), FDA may, in its discretion and without prior notice, commence an inspection

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of Defendant Cardinal 303’s SE infusion pump facilities to evaluate the report, determine whether the requirements of this Decree have been met, and whether Defendant Cardinal 303’s SE infusion pump facilities are otherwise operated in conformity with 21 U.S.C. § 351(h) and 21 C.F.R. Part 820.

F. FDA notifies Defendants in writing that Defendants appear to be in compliance with the requirements set forth in paragraphs 11(A)-(E).

G. Notwithstanding the foregoing, Defendant Cardinal 303 may continue its service and repair operations of the SE infusion pumps so long as it: (1) affixes the warning label relating to the key bounce problem referred to in Defendant Cardinal 303’s August 15, 2006, voluntary recall letter to any such pumps that are returned to Defendant Cardinal 303 for service without such a label; (2) sends a notification along with all such pumps being returned from service, stating that the device has not been repaired or serviced for any problem relating to the key bounce problem; and (3) provides FDA on a monthly basis with the number of pumps serviced, including serial and model numbers of the pumps, and the location of the facilities where the pumps are returned. The notification requirement set forth in subparagraphs (1) and (2) of this paragraph shall not apply with respect to any serviced or repaired SE infusion pump where the key bounce problem has been previously corrected or modified pursuant to paragraphs 8(G) or 15.

12. Paragraph 11 of this Decree shall not apply to the following:

A. Any SE infusion pumps or components thereof, or parts or accessories thereto, manufactured, processed, packaged, labeled, held for sale, or introduced into interstate commerce solely for export from the United States, provided that the applicable requirements of

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21 U.S.C. § 381(e) have been satisfied with respect to any such device, component, part, or accessory.

B. Any SE infusion pumps or components thereof, or parts or accessories thereto, whose manufacture or processing is not intended for human use and is undertaken for the sole purpose of developing, testing, verifying, or validating design changes or modifications in accordance with 21 C.F.R. §§ 820.75, 820.1(a)(3), and 820.30(f)-(g), and revised production and process controls, revised manufacturing procedures, or the adequacy of corrective and preventive actions. SE infusion pumps made or processed under this subparagraph may not be commercially distributed in interstate commerce.

C. Any SE infusion pumps or components thereof designed, manufactured, imported, distributed, installed or serviced solely for the purpose of complying with the requirements of paragraphs 11(G) and 15, provided that such SE infusion pumps comply with the requirements set forth in the corrective action plan after its approval by FDA under paragraph 15.

13. Upon entry of this Decree, Defendants and each and all of their officers, directors, agents, representatives, employees, successors, assigns, attorneys, and any and all persons in active concert or participation with any of them (including franchisees, affiliates, and “doing business as” entities), who have received actual notice of this Decree by personal service or otherwise, for so long as such persons are in positions of responsibility with Defendant Cardinal 303 or any of Defendant Cardinal 303’s franchisees, subsidiaries, affiliates, and/or “doing business as” entities are permanently enjoined under the provisions of 21 U.S.C. § 332(a) from directly or indirectly causing the introduction or delivery for introduction into interstate

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commerce of any infusion pump device manufactured by or for Defendant Cardinal 303 that is adulterated within the meaning of 21 U.S.C. §§ 351(c) or 351(h).

14. After Defendants have complied with paragraphs 11(A)-(E) and FDA has notified Defendants in writing pursuant to paragraph 11(F), Defendant Cardinal 303 shall retain an independent person or persons (the “Auditor”) at Defendant Cardinal 303’s expense to conduct audit inspections of Defendant Cardinal 303’s SE infusion pump facilities not less than once every six (6) months for a period of one (1) year and not less than once every twelve (12) months for a period of three (3) years thereafter, for a total of four (4) years. The Auditor shall be qualified by education, training, and experience to conduct such inspections, and shall be without personal or financial ties (other than a consulting agreement entered into by the parties) to any of Defendant Cardinal 303’s officers or employees or their immediate families. The Auditor may be the same person or persons described as the Expert in paragraph 11(B).

A. At the conclusion of each audit inspection, the Auditor shall prepare a written audit report (the “Audit Report”) analyzing whether Defendant Cardinal 303’s infusion pump operations are operated and administered in compliance with 21 U.S.C. § 351(h), 21 C.F.R. Part 820, and this Decree, and identifying in detail any deviations from the foregoing (“Audit Report Observations”). As part of every Audit Report, except the first, the Auditor shall assess the adequacy of corrective actions taken by Defendants to correct all previous Audit Report Observations. The Audit Reports shall be delivered contemporaneously to Defendants and FDA by courier service or overnight delivery service, no later than thirty (30) calendar days after the date the audit inspections are completed. If any Audit Reports identify deviations from 21 U.S.C. § 351(h), 21 C.F.R. Part 820, and/or this Decree, FDA may, in its discretion, require

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that the four (4) year auditing cycle be extended for a length of time not to exceed four (4) years. In addition, Defendants shall maintain complete Audit Reports and all of their underlying data in separate files at their facilities and shall promptly make the Audit Reports and underlying data available to FDA upon request.

B. If an Audit Report contains any adverse Audit Report Observations, Defendants shall, within thirty-five (35) calendar days of receipt of the Audit Report, correct those observations, unless FDA notifies Defendants that a shorter time period is necessary. If, after receiving the Audit Report, Defendants believe that correction of any adverse Audit Report Observation will take longer than thirty-five (35) calendar days, Defendants shall, within fifteen (15) calendar days of receipt of the Audit Report, propose a schedule for completing corrections (“Correction Schedule”) and provide justification for the additional time. That Correction Schedule must be reviewed and approved by FDA in writing prior to implementation. Defendants shall complete all corrections according to the approved Correction Schedule.

Within thirty-five (35) calendar days of Defendants’ receipt of an Audit Report, or within the time period provided in a Correction Schedule approved by FDA, the Auditor shall review the actions taken by Defendants to correct the adverse Audit Report Observation(s). Within ten (10) calendar days of the beginning of that review, the Auditor shall report in writing to FDA and Defendants whether each of the adverse Audit Report Observations has been corrected and, if not, which adverse Audit Report Observations remain uncorrected.

15. A. Within twenty (20) calendar days after entry of this Decree, Defendants shall submit to FDA in writing a detailed Corrective Action Plan to bring all SE infusion pumps currently in use in the United States by physicians, hospitals, pharmacies, and other

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users/facilities into compliance with the Act, its implementing regulations, and this Decree, and/or to address specific SE infusion pump units that can no longer be brought into compliance because they are beyond their useful life. The written Corrective Action Plan shall include, among other things: (1) identification of the root causes of any failures in the SE infusion pumps of which Defendants are aware or should be aware; (2) a description and supporting documentation for any and all upgrades, modifications and/or actions necessary to correct these failures in the SE infusion pumps; (3) the testing conducted to verify and validate such upgrades and/or modifications; (4) the projected date on which Defendants will implement and complete the Corrective Action Plan for SE infusion pumps; (5) the manner in which the upgrades and/or modifications will be made to the SE infusion pumps; (6) whether SE infusion pumps will be recalled to implement corrective actions; and (7) a clear statement whether Defendants believe the proposed upgrades and/or modifications to the SE infusion pumps proposed in the Corrective Action Plan require premarket clearance from FDA, the reasons for that belief, and whether premarket clearance has been sought and obtained by Defendant Cardinal 303.

B. Defendants shall not initiate the Corrective Action Plan until FDA has first provided Defendants with written authorization to proceed with all or a portion of the Corrective Action Plan. FDA shall respond in writing within forty-five (45) calendar days of FDA’s receipt of Defendants’ Corrective Action Plan and notify Defendant Cardinal 303 in writing whether the proposed Corrective Action Plan is acceptable in whole or in part. If the Corrective Action Plan is acceptable with regard to some of the SE infusion pumps and not others, FDA shall specify those SE infusion pumps for which the Corrective Action Plan is acceptable. If FDA finds some or all of the Corrective Action Plan unacceptable, it shall state in writing the basis for finding

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specific portions of the proposed Corrective Action Plan unacceptable, and Defendants shall submit a revised Corrective Action Plan in writing within twenty (20) calendar days of receipt of FDA’s response. FDA shall respond in writing within thirty (30) calendar days of FDA’s receipt of Defendants’ revised Corrective Action Plan and notify Defendant Cardinal 303 in writing whether the revised plan is acceptable. FDA’s decision regarding the adequacy of Defendants’ Corrective Action Plan or revised Corrective Action Plan shall be final.

C. Defendants shall commence the implementation of those portions of the initial and/or revised Corrective Action Plan, that were found acceptable by the FDA within thirty (30) calendar days of receiving FDA’s written authorization of the initial and/or revised Corrective Action Plan. Defendants shall, beginning one month after the date on which implementation of the Corrective Action Plan, in whole or in part, has begun, and continuing until its completion, submit to FDA monthly written progress reports updating the status of the Corrective Action Plan. Defendants shall use their best efforts to locate all SE infusion pumps in use by health care professionals in the United States and to obtain the cooperation of such users to implement the corrective actions required by this paragraph. Defendants’ methods to locate all SE infusion pumps, including both the SE Gold infusion pumps and other models of SE infusion pumps, shall be detailed in the Corrective Action Plan and be appropriate based upon variations in the devices’ distribution. If Defendants have not obtained FDA’s authorization for the Corrective Action Plan, in whole or in part, within twelve (12) months after the date this Decree is entered, FDA may take any action(s) it deems appropriate under paragraph 16 of this Decree.

16. If, at any time after this Decree has been entered, FDA determines, based on the results of an inspection, the analysis of samples, a report or data prepared or submitted by

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Defendants, the Expert, or the Auditor pursuant to this Decree, or any other information, that Defendants have failed to comply with any provision of this Decree, or have violated the Act or its implementing regulations, or that additional corrective actions are necessary to achieve compliance with this Decree or the Act, FDA may, as and when it deems necessary, order Defendants in writing to take appropriate actions with respect to the SE infusion pumps or components thereof located in or to be distributed into the United States. Such actions may include, but are not limited to, the following:

A. Cease designing, manufacturing, processing, packing, repacking, labeling, holding, storing, distributing, installing and/or servicing of all SE infusion pumps or components therein;

B. Revise, modify, or expand any report(s) or plan(s) prepared pursuant to the Decree;

C. Submit additional reports or information to FDA;

D. Recall, at Defendant Cardinal 303’s sole expense, adulterated SE infusion pumps or components therein manufactured, distributed, or sold by Defendant Cardinal 303 or that are under the custody and control of Defendants’ agents, distributors, customers, or consumers;

E. Issue a safety alert, public health advisory and/or press release; and/or

F. Take any other corrective action(s) as FDA, in its discretion, deems necessary to protect the public health or to bring Defendants into compliance with Act, its implementing regulations, and this Decree.

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17. A. Any order issued by FDA pursuant to paragraph 16 shall be issued by the appropriate FDA District Director, and shall specify the failures giving rise to the order. Unless a different time frame is specified by FDA in its order, within fifteen (15) calendar days after receiving an order pursuant to paragraph 16, Defendants shall notify FDA in writing either that: (1) Defendants are undertaking or have undertaken corrective action, in which event Defendants also shall describe the specific actions taken or to be taken and the proposed schedule for completing the action; or (2) Defendants do not agree with FDA’s order. If Defendants notify FDA that they do not agree with FDA’s order, Defendants shall explain in writing the basis for their disagreement; in so doing, Defendants also may propose specific alternative actions and specific time frames for achieving FDA’s objectives.

B. If any Defendant notifies FDA that he does not agree with FDA’s order, within fifteen (15) calendar days after receiving Defendant’s response, FDA will review Defendant’s notification and thereafter, in writing, affirm, modify, or withdraw its order, as FDA deems appropriate. If FDA affirms or modifies its order, it shall explain the basis for its decision in writing. This written notification shall constitute final agency action.

C. If FDA affirms or modifies its order, Defendants shall, upon receipt of FDA’s order, immediately implement the order (as modified, if applicable), and, if they so choose, bring the matter before this court on an expedited basis. Defendants shall continue to diligently implement FDA’s order unless the court reverses or modifies FDA’s order. Any review of FDA’s decision under this paragraph shall be made in accordance with the terms set forth in paragraph 27.

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18. Any cessation of operations described in paragraphs 16-17 shall continue until Defendants receive written notification from FDA that Defendants appear to be in compliance with the Act, its implementing regulations, and this Decree. The costs of FDA inspections, sampling, testing, travel time, and subsistence expenses to implement the remedies set forth in this paragraph and paragraphs 16-17 shall be borne by Defendant Cardinal 303 at the rates specified in paragraph 20.

19. Representatives of FDA shall be permitted, without prior notice and as and when FDA deems necessary, to make inspections of Defendant Cardinal 303’s SE infusion pump facilities and take any other measures necessary to monitor and to ensure continuing compliance with the terms of this Decree. During such inspections, FDA representatives shall be permitted: access to buildings, equipment, in-process and finished materials, containers, and labeling therein; to take photographs and make video recordings; to take samples of Defendant Cardinal 303’s materials and products, containers, and labeling; and to examine and copy all records relating to the receipt, manufacture, processing, packing, labeling, holding, and distribution of any and all devices. The inspections shall be permitted upon presenting a copy of this Decree and appropriate credentials. FDA will provide Defendants with a receipt for any samples taken pursuant to 21 U.S.C. § 374 and, upon Defendants’ request and at Defendant Cardinal 303’s own expense, with copies of any photographs or video recordings made. The inspection authority granted by this Decree is separate from, and in addition to, the authority to make inspections under the Act, 21 U.S.C. § 374.

20. Defendant Cardinal 303 shall reimburse FDA for the costs of all FDA inspections, investigations, supervision, reviews, examinations, and analyses that FDA deems necessary to

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evaluate Defendants’ compliance with this Decree, including all inspectional costs necessary to evaluate Defendants’ compliance with the terms of paragraph 15. The costs of such inspections shall be borne by Defendant Cardinal 303 at the prevailing rates in effect at the time the costs are incurred. As of the date that this Decree is signed by the parties, these rates are: $78.09 per hour and fraction thereof per representative for inspection work; $93.61 per hour or fraction thereof per representative for analytical or review work; $0.445 per mile for travel expenses by automobile; government rate or the equivalent for travel by air or other means; and the published government per diem rate or the equivalent for the areas in which the inspections are performed per-day, per-representative for subsistence expenses, where necessary. FDA shall submit a reasonably detailed bill of costs to Defendant Cardinal 303 at the address specified in paragraph 24. In the event that the standard rates applicable to FDA supervision of court-ordered compliance are modified, these rates shall be increased or decreased without further order of the court.

21. Within ten (10) calendar days after the entry of this Decree, Defendants shall provide a copy of this Decree, by personal service or certified mail (restricted delivery, return receipt requested), to each and all of its officers, directors, agents, representatives, successors, assigns, attorneys, and any and all persons in active concert or participation with any of them (including franchisees, affiliates, and “doing business as” entities) with responsibility for the manufacture and quality of the SE infusion pumps (hereafter, collectively referred to as “Associated Persons”). Within twenty (20) calendar days of the entry of this Decree, Defendants shall provide a copy of this Decree to all of Defendant Cardinal 303’s employees involved in the designing, manufacturing, processing, packing, repacking, labeling, holding, storing, distributing,

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installing and/or servicing of SE infusion pumps, by prominently posting a copy of this Decree in the employee common areas at all SE infusion pump facilities where such employees are located and on Defendant Cardinal 303’s intranet Website in such a manner to ensure that it will be viewed by such employees. Defendant Cardinal 303 shall ensure that the Decree remains posted on its intranet and in these employee common areas for no less than twelve (12) months. Within thirty-five (35) calendar days of the date of entry of this Decree, Defendant Cardinal 303 shall provide to FDA an affidavit of compliance, stating the fact and manner of compliance with the provisions of this paragraph and identifying the names and positions of all Associated Persons who have received a copy of this Decree and the manner of notification. In the event that Defendant Cardinal 303 becomes associated, at any time after the entry of this Decree, with new Associated Persons, Defendants shall: (a) within fifteen (15) calendar days of such association, provide a copy of this Decree to each such Associated Person by personal service or certified mail (restricted delivery, return receipt requested); and (b) on a quarterly basis, notify FDA in writing when, how, and to whom the Decree was provided.

22. Defendant Cardinal 303 shall notify the District Director, FDA Los Angeles District Office, in writing at least fifteen (15) calendar days before any change in ownership, character, or name of its business, such as dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, franchisees, affiliates, or “doing business as” entities, or any other change in the corporate structure of Defendant Cardinal 303 or in the sale or assignment of any business assets, such as buildings, equipment, or inventory, that may affect compliance with this Decree. Defendant Cardinal 303 shall provide a copy of this Decree to any potential successor or assignee at least fifteen (15)

-22-

calendar days before any sale or assignment. Defendant Cardinal 303 shall furnish FDA with an affidavit of compliance with this paragraph no later than ten (10) calendar days prior to such assignment or change in ownership.

23. Defendants may at any time petition FDA in writing to extend any deadline provided for herein, and FDA may grant such extension without seeking leave of court. However, any such petitions shall not become effective or stay the imposition of any payments under this Decree unless granted by FDA in writing.

24. All notifications, correspondence, and communications required to be sent to FDA by the terms of this Decree shall be addressed to the District Director, FDA Los Angeles District Office, 19701 Fairchild, Irvine, California 92612. All notifications, correspondence, and communications required to be sent to Defendants by the terms of this Decree shall be addressed to Charles Nehring, Vice President, Quality System Programs, Cardinal Health 303, Inc., 10221 Wateridge Circle, San Diego, California 92121.

25. If Defendants fail to comply with any of the provisions of this Decree, including any time frame imposed by this Decree, then, on motion of the United States in this proceeding, Defendant Cardinal 303 shall pay to the United States of America the sum of fifteen thousand dollars ($15,000) in liquidated damages for each day such violation continues and an additional sum of fifteen thousand dollars ($15,000) in liquidated damages for each violation of the Act, its implementing regulations, and/or this Decree. The amount of liquidated damages in this paragraph shall not exceed ten million dollars ($10,000,000) in any one calendar year.

26. Should the United States bring, and prevail, in, a contempt action to enforce the terms of this Decree, Defendant Cardinal 303 shall, in addition to other remedies, reimburse the

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United States for its attorneys’ fees, investigational expenses, expert witness fees, travel expenses incurred by attorneys and witnesses, and administrative court costs relating to such contempt proceedings.

27. All decisions specified in this Decree shall be vested in the discretion of FDA and shall be final. When contested by Defendants, FDA’s decisions under this Decree shall be reviewed by the Court under the arbitrary and capricious standard set forth in 5 U.S.C. § 706(2)(A). Review shall be based exclusively on the written record before FDA at the time the decision was made. No discovery shall be taken by either party.

28. If Defendants petition the court for relief from this Decree and, at the time of the petition, in FDA’s judgment, Defendants have maintained at Defendant Cardinal 303’s SE infusion pump facilities a state of continuous compliance with applicable laws and regulations and this Decree for the sixty (60) months preceding the petition and following entry of this Decree, Plaintiff will not oppose such petition.

29. This Court retains jurisdiction of this action for the purpose of enforcing or modifying this Decree and for the purpose of granting such additional relief as may be necessary or appropriate.

So ordered the 06 day of February, 2007.

/s/ Roger T. Benitez

UNITED STATES DISTRICT JUDGE

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We hereby consent to the entry of the foregoing Decree:

FOR CLAIMANT/DEFENDANTS:	FOR PLAINTIFFS:
/s/ David L. Schlotterbeck DAVID L. SCHLOTTERBECK, individually and on behalf of Cardinal Health 303, Inc., formerly known as Alaris Medical Systems, Inc., Chairman and Chief Executive Officer	PETER D. KEISLER Assistant Attorney General Civil Division United States Department of Justice CAROL C. LAM United States Attorney District of Southern California
/s/ Dwight Winstead DWIGHT WINSTEAD, individually and on behalf of Cardinal Health 303, Inc., formerly known as Alaris Medial Systems, Inc., President and Chief Operating Officer	By: /s/ Tom Stahl TOM STAHL Assistant United States Attorney Chief, Civil Division 880 Front Street, Room 6293 San Diego, California 92101 EUGENE M. THIROLF Director Office of Consumer Litigation
/s/ William H. Murphy WILLIAM H. MURPHY, individually and on behalf of Cardinal Health 303, Inc., formerly known as Alaris Medical Systems, Inc., Senior Vice President, Quality and Regulatory Affairs	/s/ Allan Gordus ALLAN GORDUS Office of Consumer Litigation United States Department of Justice OF COUNSEL: DANIEL MERON General Counsel SHELDON T. BRADSHAW Chief Counsel Food and Drug Division

-25-

	ERIC M. BLUMBERG Deputy Chief Counsel, Litigation
/s/ Ellen J. Flannery ELLEN J. FLANNERY PETER BARTON HUTT Covington & Burling LLP 1201 Pennsylvania Avenue, NW Washington, DC 20004-2401 Counsel for Cardinal Health 303, Inc., formerly known as Alaris Medical Systems, Inc., David L. Schlotterbeck, Dwight Winstead, and William H. Murphy	MICHELE LEE SVONKIN Associate Chief Counsel U.S. Department of Health and Human Services Office of the General Counsel 5600 Fishers Lane Rockville, Maryland 20857 (301) 827-2803

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EX-99.03

Exhibit 99.03

CARDINAL HEALTH 401(k) SAVINGS PLAN

Amended and Restated Effective as of January 1, 2006

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS		2
SECTION 1.01.	ACCOUNT	2
SECTION 1.02.	ACCOUNTING DATE	2
SECTION 1.03.	ADMINISTRATIVE COMMITTEE	2
SECTION 1.04.	BENEFICIARY	2
SECTION 1.05.	BENEFITS GROUP	2
SECTION 1.06.	BOARD	2
SECTION 1.07.	CATCH-UP ACCOUNT	2
SECTION 1.08.	CODE	2
SECTION 1.09.	COMPANY	2
SECTION 1.10.	COMPENSATION	2
SECTION 1.11.	COMPENSATION DEFERRAL ACCOUNT	5
SECTION 1.12.	DISABILITY	5
SECTION 1.13.	EFFECTIVE DATE	5
SECTION 1.14.	ELIGIBLE EMPLOYEE	5
SECTION 1.15.	EMPLOYEE	5
SECTION 1.16.	EMPLOYER(S)	6
SECTION 1.17.	EMPLOYER CONTRIBUTION	6
SECTION 1.18.	ERISA	6
SECTION 1.19.	FORMER PARTICIPANT	6
SECTION 1.20.	HIGHLY COMPENSATED EMPLOYEE	6
SECTION 1.21.	INCOME	7
SECTION 1.22.	INVESTMENT MANAGER	7
SECTION 1.23.	LEASED EMPLOYEE	7
SECTION 1.24.	MATCHING ACCOUNT	7
SECTION 1.25.	NONFORFEITABLE	7
SECTION 1.26.	NONFORFEITABLE ACCOUNT BALANCE	7
SECTION 1.27.	NON-HIGHLY COMPENSATED EMPLOYEE	8
SECTION 1.28.	NORMAL RETIREMENT AGE	8
SECTION 1.29.	PARTICIPANT	8
SECTION 1.30.	PLAN	8
SECTION 1.31.	PLAN ADMINISTRATOR	8
SECTION 1.32.	PLAN YEAR	8
SECTION 1.33.	POLICY COMMITTEE	8
SECTION 1.34.	QUALIFIED MATCHING CONTRIBUTION ACCOUNT	8
SECTION 1.35.	QUALIFIED NON-ELECTIVE CONTRIBUTION ACCOUNT	8
SECTION 1.36.	RELATED EMPLOYERS	8
SECTION 1.37.	REQUIRED BEGINNING DATE	9
SECTION 1.38.	ROLLOVER ACCOUNT	9
SECTION 1.39.	SERVICE AND BREAK IN SERVICE DEFINITIONS	9
SECTION 1.40.	SHARES	12
SECTION 1.41.	SPOUSE	13
SECTION 1.42.	TRANSITION ACCOUNT	13
SECTION 1.43.	TRANSFER ACCOUNT	13
SECTION 1.44.	TREASURY REGULATIONS	13
SECTION 1.45.	TRUST	13
SECTION 1.46.	TRUST FUND	13
SECTION 1.47.	TRUSTEE	13
SECTION 1.48.	VALUATION DATE	13
SECTION 1.49.	TERMS DEFINED ELSEWHERE	13

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TABLE OF CONTENTS

(continued)

		Page
ARTICLE II ELIGIBILITY AND PARTICIPATION		15
SECTION 2.01.	ELIGIBILITY	15
SECTION 2.02.	PARTICIPATION UPON RE-EMPLOYMENT	15
SECTION 2.03.	ENROLLMENT	15
SECTION 2.04.	TRANSFERS BETWEEN PARTICIPATING EMPLOYERS	15
SECTION 2.05.	TRANSFERS BETWEEN CLASSES OF EMPLOYEES	15
ARTICLE III CONTRIBUTIONS		16
SECTION 3.01.	INDIVIDUAL ACCOUNTS	16
SECTION 3.02.	EMPLOYER CONTRIBUTIONS	16
SECTION 3.03.	EMPLOYER CONTRIBUTION AND ALLOCATION AND ACCRUAL OF BENEFIT	16
SECTION 3.04.	PARTICIPANT CONTRIBUTIONS	18
SECTION 3.05.	CHANGES AND SUSPENSIONS OF COMPENSATION DEFERRAL CONTRIBUTIONS AND CATCH-UP CONTRIBUTIONS	19
SECTION 3.06.	MATCHING AND QUALIFIED MATCHING CONTRIBUTIONS	20
SECTION 3.07.	MATCHING CONTRIBUTION ALLOCATION AND ACCRUAL OF BENEFIT	21
SECTION 3.08.	VOLUNTARY EMPLOYEE NONDEDUCTIBLE CONTRIBUTIONS	22
SECTION 3.09.	QUALIFIED NON-ELECTIVE CONTRIBUTIONS	22
SECTION 3.10.	TIME OF PAYMENT OF CONTRIBUTION	22
SECTION 3.11.	ALLOCATION OF FORFEITURES	22
SECTION 3.12.	ROLLOVER AND TRANSFER CONTRIBUTIONS	22
SECTION 3.13.	TRANSITION CONTRIBUTIONS	23
SECTION 3.14.	RETURN OF CONTRIBUTIONS	23
SECTION 3.15.	FURTHER REDUCTIONS OF CONTRIBUTIONS	23
ARTICLE IV TERMINATION OF SERVICE, PARTICIPANT VESTING		24
SECTION 4.01.	VESTING	24
SECTION 4.02.	INCLUDED YEARS OF SERVICE – VESTING	24
SECTION 4.03.	FORFEITURE OCCURS	24
SECTION 4.04.	CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS	25
SECTION 4.05.	RESTORATION OF FORFEITED PORTION OF ACCOUNT	25
SECTION 4.06.	TRANSFER BETWEEN CLASSES OF EMPLOYEES	27
SECTION 4.07.	TRANSFERS BETWEEN PARTICIPATING EMPLOYERS AND QSLOBS	27
ARTICLE V TIME AND METHOD OF PAYMENT OF BENEFITS		28
SECTION 5.01.	RETIREMENT	28
SECTION 5.02.	DISTRIBUTION UPON SEPARATION FROM SERVICE PRIOR TO NORMAL RETIREMENT AGE	28
SECTION 5.03.	OTHER RULES GOVERNING THE TIME OF PAYMENT OF BENEFITS	30
SECTION 5.04.	FORM OF BENEFIT PAYMENTS	30
SECTION 5.05.	MINIMUM DISTRIBUTION REQUIREMENTS	30
SECTION 5.06.	DISTRIBUTIONS UPON DEATH	31
SECTION 5.07.	REVISED REQUIRED MINIMUM DISTRIBUTIONS	32
SECTION 5.08.	DESIGNATION OF BENEFICIARY	36
SECTION 5.09.	FAILURE OF BENEFICIARY DESIGNATION	36
SECTION 5.10.	SPECIAL RULES FOR TRANSFER ACCOUNTS	37
SECTION 5.11.	DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS	37
SECTION 5.12.	RE-EMPLOYMENT OF PARTICIPANTS RECEIVING PAYMENTS	38

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TABLE OF CONTENTS

(continued)

		Page
SECTION 5.13.	FORM OF PAYMENTS	38
SECTION 5.14.	LOST PARTICIPANT OR BENEFICIARY	38
SECTION 5.15.	FACILITY OF PAYMENT	39
SECTION 5.16.	NO DISTRIBUTION PRIOR TO SEPARATION FROM SERVICE, DEATH OR DISABILITY	39
SECTION 5.17.	DISTRIBUTION OF ASSETS TRANSFERRED FROM MONEY PURCHASE PENSION PLAN	40
SECTION 5.18.	WRITTEN INSTRUCTION NOT REQUIRED	40
ARTICLE VI WITHDRAWALS, DIRECT ROLLOVERS AND WITHHOLDING, LOANS		41
SECTION 6.01.	HARDSHIP WITHDRAWALS	41
SECTION 6.02.	SPECIAL WITHDRAWAL RULES APPLICABLE TO ROLLOVER CONTRIBUTIONS	42
SECTION 6.03.	SPECIAL WITHDRAWAL RULES APPLICABLE TO TRANSFER ACCOUNTS	43
SECTION 6.04.	WITHDRAWALS UPON ATTAINMENT OF AGE 59 1/2	43
SECTION 6.05.	DIRECT ROLLOVER AND WITHHOLDING RULES	43
SECTION 6.06.	LOANS TO PARTICIPANTS	45
SECTION 6.07	WITHDRAWALS CONSTITUTING QUALIFIED HURRICANE DISTRIBUTIONS	47
ARTICLE VII EMPLOYER ADMINISTRATIVE PROVISIONS		48
SECTION 7.01.	ESTABLISHMENT OF TRUST	48
SECTION 7.02.	INFORMATION TO COMMITTEE	48
SECTION 7.03.	NO LIABILITY	48
SECTION 7.04.	INDEMNITY OF COMMITTEE	48
SECTION 7.05.	INVESTMENT FUNDS	48
ARTICLE VIII PARTICIPANT ADMINISTRATIVE PROVISIONS		50
SECTION 8.01.	PERSONAL DATA TO BENEFITS GROUP	50
SECTION 8.02.	ADDRESS FOR NOTIFICATION	50
SECTION 8.03.	ASSIGNMENT OR ALIENATION	50
SECTION 8.04.	NOTICE OF CHANGE IN TERMS	50
SECTION 8.05.	PARTICIPANT DIRECTION OF INVESTMENT	50
SECTION 8.06.	CHANGE OF INVESTMENT DESIGNATIONS	51
SECTION 8.07.	LITIGATION AGAINST THE TRUST	52
SECTION 8.08.	INFORMATION AVAILABLE	52
SECTION 8.09.	APPEAL PROCEDURE FOR DENIAL OF BENEFITS	52
SECTION 8.10.	CLAIMS INVOLVING BENEFITS RELATED TO DISABILITY	53
SECTION 8.11.	USE OF ALTERNATIVE MEDIA	53
ARTICLE IX ADMINISTRATION OF THE PLAN		54
SECTION 9.01.	ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST ADMINISTRATION	54
SECTION 9.02.	APPOINTMENT OF COMMITTEE	54
SECTION 9.03.	COMMITTEE PROCEDURES	54
SECTION 9.04.	RECORDS AND REPORTS	55
SECTION 9.05.	OTHER COMMITTEE POWERS AND DUTIES	55
SECTION 9.06.	RULES AND DECISIONS	56
SECTION 9.07.	APPLICATION AND FORMS FOR BENEFITS	56
SECTION 9.08.	AUTHORIZATION OF BENEFIT PAYMENTS	56
SECTION 9.09.	FUNDING POLICY	56

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TABLE OF CONTENTS

(continued)

		Page
SECTION 9.10.	FIDUCIARY DUTIES	56
SECTION 9.11.	ALLOCATION OR DELEGATION OF DUTIES AND RESPONSIBILITIES	57
SECTION 9.12.	PROCEDURE FOR THE ALLOCATION OR DELEGATION OF FIDUCIARY DUTIES	57
SECTION 9.13.	SEPARATE ACCOUNTING	57
SECTION 9.14.	VALUE OF PARTICIPANT’S ACCOUNT	58
SECTION 9.15.	REGISTRATION AND VOTING OF EMPLOYER COMMON STOCK	58
SECTION 9.16.	INDIVIDUAL STATEMENT	58
SECTION 9.17.	FEES AND EXPENSES FROM FUND	58
ARTICLE X TOP HEAVY RULES		59
SECTION 10.01.	MINIMUM EMPLOYER CONTRIBUTION	59
SECTION 10.02.	ADDITIONAL CONTRIBUTION	59
SECTION 10.03.	DETERMINATION OF TOP HEAVY STATUS	60
SECTION 10.04.	TOP HEAVY VESTING SCHEDULE	61
SECTION 10.05.	DEFINITIONS	61
ARTICLE XI MISCELLANEOUS		63
SECTION 11.01.	EVIDENCE	63
SECTION 11.02.	NO RESPONSIBILITY FOR EMPLOYER ACTION	63
SECTION 11.03.	FIDUCIARIES NOT INSURERS	63
SECTION 11.04.	WAIVER OF NOTICE	63
SECTION 11.05.	SUCCESSORS	63
SECTION 11.06.	WORD USAGE	63
SECTION 11.07.	HEADINGS	63
SECTION 11.08.	STATE LAW	64
SECTION 11.09.	EMPLOYMENT NOT GUARANTEED	64
ARTICLE XII EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION		65
SECTION 12.01.	EXCLUSIVE BENEFIT	65
SECTION 12.02.	AMENDMENT BY EMPLOYER	65
SECTION 12.03.	AMENDMENT TO VESTING PROVISIONS	65
SECTION 12.04.	DISCONTINUANCE	66
SECTION 12.05.	FULL VESTING ON TERMINATION	66
SECTION 12.06.	MERGER, DIRECT TRANSFER AND ELECTIVE TRANSFER	66
SECTION 12.07.	TERMINATION	67
SCHEDULE I		69
SCHEDULE II		73
SCHEDULE III		75
SCHEDULE IV		79
SCHEDULE V		95

-iv-

CARDINAL HEALTH 401(k) SAVINGS PLAN

Cardinal Health, Inc., an Ohio corporation, hereby amends and restates in its entirety the Cardinal Health 401(k) Savings Plan, generally effective as of January 1, 2006, unless otherwise stated herein. The Plan, originally adopted effective as of March 25, 1987 and formerly known as the Cardinal Health Profit Sharing, Retirement and Savings Plan, was previously restated as of July 1, 1998 and January 1, 2005. Special effective dates are included with respect to a number of provisions as necessary to conform to amendments to the Code and the regulations thereunder enacted by the Economic Growth and Tax Relief Reconciliation Act of 2001 (by incorporation of the previously adopted “good faith” amendments herein), the 2005 Cumulative List provided in Internal Revenue Service Notice 2005-101 and in final regulations under Code Sections 401(k) and (m) as published and effective December 29, 2004. In this amendment and restatement, the Employer intends to continue various design changes, including the maintenance of a safe harbor 401(k) plan, and provision for the merger of certain plans (the “Merging Plans”) previously maintained as separate plans, effective as of the dates specified in Schedule II to the Plan.

The Employer intends that the Plan be qualified under Section 401(a) of the Code, with a cash or deferred arrangement qualified under Section 401(k) of the Code and a trust exempt from taxation under Section 501(a) of the Code. Pursuant to the requirements of Code Section 401(a)(27), the Employer intends that the Plan be a profit sharing plan. In addition, pursuant to Sections 401(k)(12) and 401(m)(11), the Employer intends that the Plan be a safe harbor 401(k) plan. The provisions of this amended and restated Plan shall apply solely to an Employee whose employment with the Employer terminates on or after the Effective Date. An Employee whose employment with the Employer terminates prior to the Effective Date shall be entitled to a benefit, if any, as determined under the provisions of the Plan or the appropriate Merging Plan in effect on the date his employment terminated.

The purpose of this Plan is to encourage eligible employees to accumulate savings for retirement and to further their financial independence by affording them an opportunity to make systematic contribution to the Plan, supplemented by contributions made by the Employer.

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ARTICLE I

DEFINITIONS

Each word and phrase defined in this Article I shall have the following meaning whenever such word or phrase is capitalized and used herein unless a different meaning is clearly required by the context of this agreement.

Section 1.01 Account. The separate bookkeeping account that the Administrative Committee or the Trustee shall maintain for a Participant pursuant to Section 9.13 of this Plan.

Section 1.02 Accounting Date. The last day of the Plan Year.

Section 1.03 Administrative Committee. The Financial Benefit Plans Committee or such other committee of at least three (3) persons appointed pursuant to Article IX to assist the Company in the administration of the Plan.

Section 1.04 Beneficiary. A person, including any individual, legal representative, estate or other entity, designated by a Participant who is or may become entitled to a benefit under the Plan. A Beneficiary who becomes entitled to a benefit under the Plan shall remain a Beneficiary under the Plan until the Trustee has fully distributed his benefit to him. A Beneficiary’s right to (and the Plan Administrator’s, the Administrative Committee’s, or a Trustee’s duty to provide to the Beneficiary) information or data concerning the Plan shall not arise until he first becomes entitled to receive a benefit under the Plan.

Section 1.05 Benefits Group. The group of employees of the Company reporting to the Vice President, Benefits or comparable position responsible for day-to-day administration of the Plan.

Section 1.06 Board. The board of directors of Cardinal Health, Inc. or a committee thereof acting on its behalf.

Section 1.07 Catch-Up Account. That portion of a Participant’s Account credited with Catch-Up Contributions under Section 3.04.B. and adjustments relating thereto.

Section 1.08 Code. The Internal Revenue Code of 1986, as it may be amended from time to time.

Section 1.09 Company. Cardinal Health, Inc., an Ohio corporation.

Section 1.10 Compensation.

A. Compensation. Except as otherwise provided on Schedule V to the Plan, the Participant’s wages, salaries, fees for professional service and other amounts received for personal services actually rendered in the course of employment with the Employer maintaining the Plan (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses).

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Compensation also includes “Elective Contributions” made by the Employer on the Employee’s behalf. Elective Contributions are amounts excludible from the Employee’s gross income under Code Section 402(e)(3) (relating to a Code Section 401(k) arrangement), Code Section 402(h) (relating to a Simplified Employee Pension), Code Section 125 (relating to a cafeteria plan), Code Section 403(b) (relating to a tax-sheltered annuity), Code Section 132(f)(4) (relating to a qualified transportation fringe benefit plan) and, effective July 1, 2002, “deemed compensation” under Code Section 125 pursuant to Revenue Ruling 2002-27. Compensation includes compensation paid by the Employer to an Employee through another person under the common paymaster provisions of Code Sections 3121(s) and 3306(p). The term “Compensation” does not include:

(i) Employer contributions (other than Elective Contributions) to a plan of deferred compensation to the extent the contributions are not included in the gross income of the Employee for the taxable year in which contributed, on behalf of an Employee to a simplified employee pension plan to the extent such contributions are excludible from the Employee’s gross income, and any distributions from a plan of deferred compensation, regardless of whether such amounts are includible in the gross income of the Employee when distributed.

(ii) Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by an Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture.

(iii) Amounts realized from the sale, exchange, or other disposition of stock acquired under a qualified stock option.

(iv) Moving allowances, automobile allowances, tuition reimbursement, financial/tax planning reimbursement, other extraordinary compensation (including, but not limited to, tax “gross-up” payments and stay-for-pay payments) and imputed income from other employer-provided benefits.

(v) Amounts paid under a self-insured short-term disability plan or amounts attributable to accrued but unused sick pay hours accrued in a prior calendar year used when commencing short-term disability or other absence if includible in the gross income of the Employee.

(vi) Other amounts that receive special tax benefits, such as premiums for group term life insurance or contributions made by an Employer (whether or not under salary reduction agreement) towards the purchase of an annuity contract described in Code Section 403(b) (whether or not the contributions are excludible from the gross income of the Employee), other than Elective Contributions.

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(vii) Any bonus payment, including payments under the Cardinal Health, Inc. Management Incentive Plan (“MIP”) as originally established August 14, 1996 and amended and restated from time to time, and the Cardinal Health Management Incentive Plan for Managers Who are Not Executive Officers if such bonus payment is wholly or partially payable without regard to the attainment of a performance-based goal (i.e., guaranteed).

Any reference in this Plan to Compensation is a reference to the definition in this Section 1.10, unless the Plan reference specifies a modification to this definition. The Administrative Committee will take into account only Compensation actually paid for the relevant period.

B. Compensation Limit. In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provisions of the Plan to the contrary, the annual Compensation of each Employee taken into account under the Plan shall not exceed the “Compensation Limitation” under Code Section 401(a)(17) in effect for the applicable Determination Period as defined herein. Effective January 1, 2006, the Compensation Limitation is $220,000, and is subject to cost of living adjustments in future years in accordance with Code Section 401(a)(17)(B) and applicable statutory changes. Any such cost of living adjustment or statutory change in effect for a calendar year applies to any period, not exceeding 12 months, over which Compensation is determined (the “Determination Period”) beginning in such calendar year. If a Determination Period consists of fewer than 12 months, the Compensation Limitation will be multiplied by a fraction, the numerator of which is the number of months in the Determination Period, and the denominator of which is 12. Any reference in this Plan to the limitation under Section 401(a)(17) of the Code shall mean the Compensation Limitation set forth in this provision.

C. Compensation – Special Rules. For purposes of determining whether the Plan discriminates in favor of Highly Compensated Employees, the Employer may elect to use an alternate nondiscriminatory definition of Compensation, in accordance with the requirements of Code Section 414(s) and the Treasury Regulations promulgated thereunder. In determining Compensation (for purposes of determining whether the Plan discriminates in favor of Highly Compensated Employees), the Employer may elect to include as Compensation all Elective Contributions made by the Employer on behalf of Employees. The Employer’s election to include Elective Contributions must be consistent and uniform with respect to Employees and all plans of the Employer for any particular Plan Year. The Employer may make this election to include Elective Contributions for nondiscrimination testing purposes, irrespective of whether Subsection A includes Elective Contributions in the general definition of Compensation applicable to the Plan.

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Section 1.11 Compensation Deferral Account. That portion of a Participant’s Account credited with Compensation Deferral Contributions under Section 3.04.A., and adjustments relating thereto.

Section 1.12 Disability. A physical or mental condition that has qualified the Employee for benefits under the Employer’s long-term disability plan and will prevent the Employee from satisfactorily performing his usual duties for the Employer or the duties of such other position or job that the Employer makes available to him and for which such Employee is qualified by reason of his training, education or experience, for an indefinite period that the Administrative Committee considers will be of long-continued duration. The Plan considers a Participant disabled on the date that the Participant has satisfied the requirements for disability benefits under the applicable long-term disability plan. If the Participant is not eligible for long-term disability benefits, the Participant shall be considered disabled upon qualifying for Social Security disability benefits.

Section 1.13 Effective Date. January 1, 2006, the date on which the provisions of this amended and restated Plan become effective, except as otherwise provided herein. In addition, some provisions of Schedule V to the Plan may be subject to a different Effective Date, as specified therein.

Section 1.14 Eligible Employee. Any Employee other than (a) an Employee who may be excluded from participation pursuant to Code Section 410(b)(3) as a nonresident alien or as an Employee covered by a collective bargaining agreement recognized as such under applicable federal labor law and that does not expressly provide for participation in the Plan by Employees covered thereunder, (b) an Employee who is (i) a resident of Puerto Rico, (ii) working in Puerto Rico, (iii) paid through the payroll of a Puerto Rico location of the Company or a Related Employer, and (iv) eligible to participate in the Cardinal Health 401(k) Savings Plan for Employees of Puerto Rico, (c) an Employee of an Employer (including, but not limited to, Cardinal Health 109, Inc.) classified as a non-regular “PRN” or on-call Employee, (d) an Employee of Mediqual Systems, Inc. classified as an On-Demand Data Extractor or On-Demand Data Entry employee, or (e) an Employee hired on a short-term basis as an intern. An Eligible Employee may become a Participant in the Plan pursuant to the requirements of Article II.

Section 1.15 Employee. Any person who, on or after the Effective Date, is receiving remuneration for personal services rendered to the Employer (or any other employer required to be aggregated with the Employer under Sections 414(b), (c), (m) or (o) of the Code) as a common law employee (or who would be receiving such remuneration except for an authorized leave of absence). The term shall not include any individual providing services to an Employer as a consultant, independent contractor or Leased Employee deemed to be an employee of any employer described in the previous sentence, as provided in Sections 414(n) and (o) of the Code, nor any person employed by the Employer solely as a Director. An individual excluded from participation by reason of independent contractor or Leased Employee status, if determined by the Company or in accordance with law to be a common law employee, shall be recharacterized as an Employee under the Plan as of the date of such determination, unless an earlier date is necessary to preserve the tax qualified status of the Plan. Notwithstanding such general recharacterization, such person

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shall not be considered an Eligible Employee for purposes of Plan participation, except and to the extent necessary to preserve the tax qualified status of the Plan.

Section 1.16 Employer(s). The Company and any Related Employer that has ratified and adopted this Plan in a manner satisfactory to, and with the consent of, Cardinal Health, Inc., as listed on the attached Schedule I. Whenever the terms of this Plan authorize the Employer or the Company to take any action, such action shall be considered properly authorized if taken by the Board, the Chairman of the Board, any committee of the Board, or by the Administrative Committee for the Plan in accordance with its procedures under Section 9.03 hereof.

Section 1.17 Employer Contribution Account. That portion of a Participant’s Account credited with Employer Contributions under Sections 3.02 and 3.03, and adjustments relating thereto.

Section 1.18 ERISA. The Employee Retirement Income Security Act of 1974, as amended, or as it may be amended from time to time.

Section 1.19 Former Participant. A Participant who has transferred to a classification of Employees ineligible to participate in the Plan, or a Participant whose employment with the Employer has terminated but who has a vested Account balance under the Plan that has not been paid in full and, therefore, is continuing to participate in the allocation of Trust Fund Income.

Section 1.20 Highly Compensated Employee. Any Employee who:

A. at any time during the current Plan Year or the preceding Plan Year was a five percent owner of the Employer as defined in Code Section 416(i); or

B. for the preceding Plan Year:

(i) received more than $80,000 in annual Compensation from the Employer (or such higher amount as adjusted pursuant to Section 414(q)(1) of the Code); and

(ii) was in the top 20% of Employees when ranked on the basis of Compensation for the prior Plan Year.

Highly Compensated Employees include highly compensated former Employees. A former Employee will be treated as a Highly Compensated Employee if such Employee separated from Service (or was deemed to have separated) prior to the current or preceding Plan Year, performs no Service during such Plan Year, and was a Highly Compensated Employee for either the separation year or any Plan Year ending on or after the Employee’s 55^th birthday, in accordance with the rules for determining Highly Compensated Employee status in effect for that determination year and in accordance with applicable Treasury Regulations and IRS Notice 97-45.

For purposes of this Section, “Compensation” means Compensation as defined in Section 1.10; and Related Employers to the Employer shall be treated as a single employer with the Employer. The determination of who is Highly Compensated shall be made in accordance with Code Section 414(q) and applicable Treasury Regulations promulgated thereunder.

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Section 1.21 Income. The net gain or loss of the Trust Fund from investments, as reflected by interest payments, dividends, realized and unrealized gains and losses on securities, other investment transactions and expenses paid from the Trust Fund. In determining the Income of the Trust Fund as of any date, assets shall be valued on the basis of their then fair market value.

Section 1.22 Investment Manager. A person or organization who is appointed under Section 9.05 to direct the investment of all or part of the Trust Fund, and who is either (a) registered in good standing as an Investment Adviser under the Investment Advisers Act of 1940, (b) a bank, as defined in that Act, or (c) an insurance company qualified to perform investment management services under the laws of more than one state of the United States, and who has acknowledged in writing that he is a fiduciary with respect to the Plan.

Section 1.23 Leased Employee. Any person (other than an Employee of the Employer) who, pursuant to an agreement between the Employer and any other person (“Leasing Organization”), has performed services for the Employer (or for the Employer and related persons determined in accordance with Section 414(n)(6) of the Code) on a substantially full time basis for a period of at least one year, which services are performed under the primary direction or control of the Employer. Contributions or benefits provided to a Leased Employee by the Leasing Organization that are attributable to services performed for the Employer shall be treated as provided by the Employer. If applicable, Compensation under Section 1.10 includes compensation from the Leasing Organization that is attributable to services performed for the Employer.

A Leased Employee shall not be considered an Employee of the Employer if (a) such employee is covered by a money purchase pension plan providing: (i) a nonintegrated employer contribution rate of at least ten percent of compensation, as defined in Section 415(c)(3) of the Code, but including amounts contributed pursuant to a salary reduction agreement that are excludible from the employee’s gross income under Section 125, Section 132(f)(4), Section 402(e)(3), Section 402(h) or Section 403(b) of the Code, (ii) immediate participation, and (iii) full and immediate vesting; and (b) leased employees do not constitute more than 20% of the Employer’s nonhighly compensated workforce.

Section 1.24 Matching Account. That portion of a Participant’s Account credited with Matching Contributions pursuant to Section 3.06, and adjustments relating thereto. A Participant’s Matching Account may include one or more subaccounts, including a Non-Safe Harbor Matching Account and a Safe Harbor Matching Account.

Section 1.25 Nonforfeitable. A Participant’s or Beneficiary’s unconditional claim, legally enforceable against the Plan, to all or a portion of the Participant’s Account.

Section 1.26 Nonforfeitable Account Balance. The aggregate value of the Participant’s vested Account balances derived from Employer and Employee contributions (including Rollover Contributions and Transfer Contributions), whether vested before or upon death.

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Section 1.27 Non-highly Compensated Employee. Any Eligible Employee who is not a Highly Compensated Employee.

Section 1.28 Normal Retirement Age. Except as provided in Schedule V, the attainment of age 65. “Normal Retirement” means a Participant’s Severance from Employment following his attainment of Normal Retirement Age.

Section 1.29 Participant. An Employee who is eligible to be and becomes a Participant in accordance with the provisions of Section 2.01. An Employee who becomes a Participant shall remain a Participant or Former Participant under the Plan until the Trustee has fully distributed the vested amount in his Account to him.

Section 1.30 Plan. The plan designated as the Cardinal Health 401(k) Savings Plan as set forth herein or in any amendments hereto. Prior to January 1, 2005, the Plan was known as the Cardinal Health Profit Sharing, Retirement and Savings Plan.

Section 1.31 Plan Administrator. Cardinal Health, Inc., or the person(s) or entity appointed by Cardinal Health, Inc. to serve as Plan Administrator.

Section 1.32 Plan Year. The calendar year commencing on January 1 and ending on December 31.

Section 1.33 Policy Committee. The Cardinal Health, Inc. Benefits Policy Committee.

Section 1.34 Qualified Matching Contribution Account. That portion of a Participant’s Account credited with Qualified Matching Contributions under Section 3.06, and adjustments relating thereto.

Section 1.35 Qualified Non-elective Contribution Account. That portion of a Participant’s Account credited with Qualified Non-elective Contributions under Section 3.09, and adjustments relating thereto.

Section 1.36 Related Employers. A controlled group of corporations (as defined in Code Section 414(b)), trades or business (whether or not incorporated) that are under common control (as defined in Code Section 414(c)), or an affiliated service group (as defined in Code Sections 414(m) and (o)). If the Employer is a member of a group of Related Employers, the term “Employer” includes the Related Employers for purposes of crediting Hours of Service, applying the coverage test of Code Section 410(b) (except to the extent that the Plan employs the qualified separate line of business rules of Code Section 414(r)), determining Years of Service and Breaks in Service under Article IV, applying the limitations described in Schedule IV, applying the Top Heavy rules and the minimum benefit requirements of Article X, the definitions of Employee, Highly Compensated Employee, Compensation, Leased Employee, and Service contained in this Article I, and for any other purpose as required by the Code or by the Plan. However, only an Employer described in Section 1.16 may contribute to the Plan, and only an Employee employed by an Employer described in Section 1.16 is eligible to participate in this Plan.

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Section 1.37 Required Beginning Date. For purposes of Article V, for any Participant who is not a Five-percent Owner (as defined in Code Section 416(i)), the Required Beginning Date is the April 1 of the calendar year following the later of the calendar year in which the Participant attains age 70 ¹/2, or the calendar year in which the Participant retires. For any Participant who is at least a Five-percent Owner (as defined in Code Section 416(i)), the Required Beginning Date is the April 1 immediately following the calendar year in which the Participant attains age 70 ¹/2, regardless of whether the Participant has retired.

Section 1.38 Rollover Account. That portion of a Participant’s Account credited with Rollover Contributions under Section 3.12, and adjustments relating thereto.

Section 1.39 Service and Break in Service Definitions.

A. Absence from Service. A severance or absence from service for any reason other than a quit, discharge, retirement or death, such as vacation, holiday, sickness, or layoff. Notwithstanding the foregoing, an absence due to an “Authorized Leave of Absence,” or qualified military service in accordance with Code Section 414(u) shall not constitute an Absence from Service.

B. Authorized Leave of Absence. An Authorized Leave of Absence shall mean:

(i) a leave of absence, with or without pay, granted by the Employer in writing under a uniform, nondiscriminatory policy applicable to all Employees; however, such absence shall constitute an Authorized Leave of Absence only to the extent that applicable federal laws and regulations permit service credit to be given for such leave of absence;

(ii) a leave of absence due to service in the Armed Forces of the United States to the extent required by Code Section 414(u); or

(iii) a leave of absence authorized under the Family and Medical Leave Act, but only to the extent that such Act requires that service credit be given for such period.

C. Break in Service. Each 12 consecutive months in the period commencing on the earlier of (i) the date on which the Employee quits, is discharged, retires or dies, or (ii) the first anniversary of the first day of any Absence from Service, and ending on the date the Employee is again credited with an Hour of Service for the performance of duties for the Employer. If an Employee is on maternity or paternity leave, and the absence continues beyond the first anniversary of such absence, the Employee’s Break in Service will commence no earlier than the second anniversary of such absence. The period between the first and second anniversaries of the first date of a maternity or paternity leave is not part of either a Period of Service or a Break in Service. The Administrative Committee shall consider an Employee on maternity or paternity leave if the Employee’s absence is due to the Employee’s pregnancy, the birth of the Employee’s child, the placement with the Employee of an

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adopted child, or the care of the Employee’s child immediately following the child’s birth or placement. Notwithstanding the foregoing, if such maternity or paternity leave constitutes an Authorized Leave of Absence, such leave shall not be considered part of a Break in Service.

D. Employment Commencement Date. The date upon which an Employee first performs an Hour of Service for the Employer.

E. Hour of Service. Hour of Service shall mean:

(i) Each Hour of Service for which the Employer, either directly or indirectly, pays an Employee, or for which the Employee is entitled to payment, for the performance of duties during the Plan Year. The Administrative Committee shall credit Hours of Service under this subparagraph (i) to the Employee for the Plan Year in which the Employee performs the duties, irrespective of when paid;

(ii) Each Hour of Service for back pay, irrespective of mitigation of damages, to which the Employer has agreed or for which the Employee has received an award. The Administrative Committee shall credit Hours of Service under this subparagraph (ii) to the Employee for the Plan Year(s) to which the award or the agreement pertains rather than for the Plan Year in which the award, agreement or payment is made; and

(iii) Each Hour of Service for which the Employer, either directly or indirectly, pays an Employee, or for which the Employee is entitled to payment (irrespective of whether the employment relationship is terminated), for reasons other than for the performance of duties during a Plan Year, such as leave of absence, vacation, holiday, sick leave, illness, incapacity (including disability), layoff, jury duty or military duty. The Administrative Committee shall not credit more than 501 Hours of Service under this subparagraph (iii) to an Employee on account of any single continuous period during which the Employee does not perform any duties (whether or not such period occurs during a single Plan Year). The Administrative Committee shall credit Hours of Service under this subparagraph (iii) in accordance with the rules of paragraphs (b) and (c) of Labor Reg. Section 2530.200b-2, which the Plan by this reference specifically incorporates in full within this subparagraph (iii).

The Administrative Committee shall not credit an Hour of Service under more than one of the subparagraphs. Furthermore, if the Administrative Committee is to credit Hours of Service to an Employee for the 12-month period beginning with the Employee’s Employment Commencement Date or with an anniversary of such date, then the 12-month period shall be substituted for the term “Plan Year” wherever the latter term appears in this

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Section. The Administrative Committee shall resolve any ambiguity with respect to the crediting of an Hour of Service in favor of the Employee.

Hours of Service will be credited for employment with other members of an affiliated service group (under Code Section 414(m)), a controlled group of corporations (under Code Section 414(b)), or a group of trades or businesses under common control (under Code Section 414(c)) of which the adopting Employer is a member, and any other entity required to be aggregated with the Employer pursuant to Code Section 414(o) and the regulations thereunder. Hours of Service will also be credited for any individual considered an Employee for purposes of this Plan under Code Section 414(n) or Code Section 414(o) and the regulations thereunder.

Solely for purposes of determining whether an Employee whose Service is determined under the Hours of Service method incurs a Break in Service under any provision of this Plan, the Administrative Committee shall credit Hours of Service during an Employee’s unpaid absence period due to maternity or paternity leave. The Administrative Committee shall consider an Employee on maternity or paternity leave if the Employee’s absence is due to the Employee’s pregnancy, the birth of the Employee’s child, the placement with the Employee of an adopted child, or the care of the Employee’s child immediately following the child’s birth or placement. The Administrative Committee shall credit Hours of Service that the Employee would receive if he were paid during the absence period, or if the Administrative Committee cannot determine the number of Hours of Service the Employee would receive, on the basis of eight hours per pay during the absence period. The Administrative Committee shall credit only the number of Hours of Service (up to 501 Hours of Service) necessary to prevent a Break in Service. The Administrative Committee shall credit all Hours of Service described in this paragraph to the computation period in which the absence period begins or, if the Part-time Employee does not need these Hours of Service to prevent a Break in Service in the computation period in which his or her absence period begins, the Administrative Committee shall credit these Hours of Service to immediately following computation period.

F. Period of Service. The period of Service commencing on an Employee’s Employment Commencement Date or Re-employment Commencement Date, whichever is applicable, and ending on the Employee’s Severance from Service Date. Notwithstanding anything else to the contrary, a Period of Service will include (i) any Period of Severance resulting from a quit, discharge, or retirement if within 12 months of his Severance from Service Date, the Employee is credited with an Hour of Service for the performance of duties for the Employer, (ii) any Period of Severance if the Employee quits, is discharged, or retires during an Absence from Service of less than 12 months and is then credited with an Hour of Service within 12 months of the date on which the Absence from Service began, and (iii) any other period of Service as defined in subsection J below.

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G. Period of Severance. The period commencing on any Severance from Service Date and ending on the date an Employee is again credited with an Hour of Service for the performance of duties for the Employer.

H. Re-employment Commencement Date. The date upon which an Employee first performs an Hour of Service for the Employer following a Break in Service.

I. Severance from Employment. A separation from Service with the Employer maintaining this Plan and any Related Employers such that the Employee no longer has an employment relationship with the Employer or any Related Employers that maintain the Plan. This distributable event shall apply for distributions on and after January 1, 2002 regardless of when the Severance from Employment occurred.

J. Service. Any period of time the Employee is in the employ of the Employer, whether before or after adoption of the Plan, determined in accordance with reasonable and uniform standards and policies adopted by the Plan Administrator, which standards and policies shall be consistently observed. For purposes of counting an Employee’s Service, the Plan shall treat an Employee’s Service with employers who are part of a group of Related Employers of which the Employer is a member as Service with the Employer for the period during which the employers are Related Employers. Service for purposes of determining eligibility to participate and vesting may also be granted for an Employee’s Period of Service prior to the date his employer became a Related Employer if such Service is granted in accordance with the requirements of Code Section 401(a)(4) and the regulations thereunder. For all Plan purposes, the Plan shall treat the following periods as Service:

(i) any Authorized Leave of Absence, subject to the service crediting limitations set forth in Section 1.39B;

(ii) any qualified military service in accordance with Section 414(u) of the Code; and

(iii) any other absence during which the Participant continues to receive his regular Compensation.

K. Severance from Service Date. The earlier of (i) the date on which an Employee quits, is discharged, retires, or dies, or (ii) the first anniversary of the first date of any Absence from Service.

L. Year of Service. Each one-year Period of Service. Unless otherwise provided in this Plan, Periods of Service that are less than a year shall be aggregated on the basis that 12 months (30 days are deemed to be a month in the case of aggregation of fractional months) or 365 days equal a whole year.

Section 1.40 Shares. The no par value common shares of Cardinal Health, Inc., an Ohio corporation.

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Section 1.41 Spouse. The lawful spouse of the Participant as determined under the law of the state where the Participant resides at the date of determination.

Section 1.42 Transition Account. That portion of a Participant’s Account credited with Transition Contributions under Section 3.13, and adjustments relating thereto.

Section 1.43 Transfer Account. That portion of a Participant’s Account credited with Transfer Contributions under Section 3.12, and adjustments relating thereto.

Section 1.44 Treasury Regulations. Regulations promulgated under the Internal Revenue Code by the Secretary of the Treasury.

Section 1.45 Trust. The Trust known as the Cardinal Health, Inc. U.S. Qualified Plans Master Trust and maintained in accordance with the terms of the trust agreement, as from time to time amended, between Cardinal Health, Inc. and the Trustee.

Section 1.46 Trust Fund. All property of every kind held or acquired by the Trustee under the Trust agreement other than incidental benefit insurance contracts.

Section 1.47 Trustee. Effective December 16, 2004, Fidelity Management Trust Company, a Massachusetts Trust Company, or such other entity or person(s) that subsequently may be appointed by Cardinal Health, Inc.

Section 1.48 Valuation Date. Each day on which the New York Stock Exchange is open for trading.

Section 1.49 Terms Defined Elsewhere.

Actual Contribution Percentage	Schedule IV
Actual Deferral Percentage	Schedule IV
Aggregate Limit	Schedule IV
Annual Additions	Schedule IV
Annuity Starting Date	Sections 5.02(B) and 5.04
Cash-out Distribution	Sections 4.04 and 5.02(A)
Catch-Up Contribution	Section 3.04(B)
Claimant	Section 8.09
Committee	Section 7.02
Compensation	Schedule IV. and 10.06(C)
Compensation Deferral Contribution	Section 3.04(A)
Contribution Percentage	Schedule IV
Contribution Percentage Amounts	Schedule IV
Determination Date	Section 10.06(G)
Direct Rollover	Section 6.05(B)(iv)
Distributee	Section 6.05(B)(iii)
Elective Deferrals	Schedule IV
Eligible Retirement Plan	Section 6.05(B)(ii)
Eligible Rollover Distribution	Section 6.05(B)(i)
Employer Common Stock Fund	Section 7.05

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ESOP Shares	Section 8.06
Excess Aggregate Contributions	Schedule IV
Excess Compensation	Schedule IV
Excess Compensation Deferrals	Schedule IV
Excess Elective Deferrals	Schedule IV
Forfeiture Break in Service	Section 4.02
Gap Period	Schedule IV
Investment Funds	Section 7.05
Key Employee	Section 10.06(A)
Limitation Year	Schedule IV
Matching Contribution	Section 3.06
Maximum Permissible Amount	Schedule IV
Non-Key Employee	Section 10.06(B)
Non-Safe Harbor Matching Contributions	Section 3.06(D)
Permissive Aggregation Group	Section 10.06(E)
Preretirement Survivor Annuity	Schedule III
Projected Annual Benefit	Schedule IV
Qualified Joint and Survivor Annuity	Schedule IV
Qualified Matching Contributions	Section 3.06
Qualified Non-elective Contributions	Section 3.09
Required Aggregation Group	Section 10.06(D)
Required Beginning Date	Section 5.03(B)
Rollover Contributions	Section 3.12
Safe Harbor Matching Contributions	Section 3.06(B)
Tender Offer	Section 7.05
Top Heavy	Section 10.03
Transfer Contributions	Section 3.12

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ARTICLE II

ELIGIBILITY AND PARTICIPATION

Section 2.01 ELIGIBILITY. Each Eligible Employee shall be eligible to become a Participant in the Plan. Each Eligible Employee who was a Participant in the Plan on the day before the Effective Date of this restated Plan shall continue as a Participant in this Plan as restated. Each Eligible Employee who was a participant in one of the Merging Plans on the day before the Effective Date of the merger of such plan with this Plan shall also become a Participant in this restated Plan as of the effective date of participation set forth in Schedule I. Any other Eligible Employee who is employed by the Employer on and after January 1, 2005, shall become a Participant upon such Employee’s date of hire.

Section 2.02 PARTICIPATION UPON RE-EMPLOYMENT. An Eligible Employee who was a Participant shall again become a Participant on the date he is re-employed by the Employer.

Section 2.03 ENROLLMENT. As soon as administratively practicable, the Administrative Committee shall notify each Employee who is eligible to open a Compensation Deferral Account and shall explain the rights, privileges and duties of a Participant in the Plan. Each Eligible Employee may enroll as a Participant in the Compensation Deferral portion of the Plan at any time and as soon as administratively practicable on or after his date of hire, by properly completing the enrollment procedures established at the time by the Administrative Committee, or by following such other reasonable procedures as the Administrative Committee may implement. The Administrative Committee may establish rules and procedures governing the time and manner in which enrollments shall be processed.

Section 2.04 TRANSFERS BETWEEN PARTICIPATING EMPLOYERS. For eligibility purposes, a Participant who transfers employment from one Participating Employer to another Participating Employer shall continue to be eligible to participate in the Plan if the Participant has previously met the requirements of Section 2.01. In accordance with the Plan and the Code, an Employee who is an Eligible Employee shall continue to be an Eligible Employee following a transfer between Participating Employers as if the Eligible Employee had performed all Service during the Plan Year for the Participating Employer to which the Eligible Employee is transferred.

Section 2.05 TRANSFERS BETWEEN CLASSES OF EMPLOYEES. For purposes of eligibility, in the case of an Employee who transfers from a class of Employees whose employment status is ineligible for participation in the Plan (e.g., On-demand and non-regular PRN employees) to an eligible class of employment, such Employee shall become an Eligible Employee immediately eligible to participate in the Plan. In the case of an Eligible Employee who transfers to an ineligible employment status, such Employee shall cease to be an Eligible Employee under this Plan but shall remain a Former Participant under the Plan until such time as participation is terminated.

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ARTICLE III

CONTRIBUTIONS

Section 3.01 INDIVIDUAL ACCOUNTS. An Account for each Participant and Former Participant having an amount to his credit in the Trust Fund. Each Account shall be divided into separate subaccounts for “Compensation Deferral Contributions,” “Catch-Up Contributions,” “Non-Safe Harbor Matching Contributions,” “Safe Harbor Matching Contributions,” “Employer Contributions,” “Special Contributions,” and “Transition Contributions,” as defined below and any other types of contributions, as identified in Schedule V hereto. If a Participant has made a “Rollover Contribution” or “Transfer Contribution,” as defined below, or if the Employer elects to make “Qualified Non-elective Contributions” or “Qualified Matching Contributions,” as defined below, separate subaccounts shall be established for such contributions. Furthermore, if a Participant re-enters the Plan subsequent to a “Forfeiture Break in Service” (as defined in Section 4.02), a separate Account shall be maintained for the Participant’s pre-Forfeiture Break in Service Account and a separate Account for his post-Forfeiture Break in Service Account, unless the Participant’s entire Account under the Plan is 100% Nonforfeitable. Allocations shall be made to the Accounts of the Participants in accordance with the provisions of Section 9.13. The Administrative Committee may direct the Trustee to maintain a temporary segregated investment Account in the name of a Participant to prevent a distortion of income, gain, or loss allocations under Section 9.13. The Administrative Committee shall ensure that records are maintained for all Account allocations and related recordkeeping activities.

Section 3.02 EMPLOYER CONTRIBUTIONS. For each Plan Year, the Employer may contribute to the Trust amounts determined in its discretion based on profitability or other relevant factors. Such contributions will be in the form of “Employer Contributions,” “Special Contributions,” and/or other contributions, as identified in Schedule V hereto. Subject to the provisions of Schedule V, the amount contributed in any year may vary, in the Employer’s discretion. The Employer shall not make a contribution to the Trust for any taxable year to the extent the contribution would exceed the maximum deduction limitations under Code Section 404. All contributions are conditioned on their deductibility under the Code.

Section 3.03 EMPLOYER AND SPECIAL CONTRIBUTION ALLOCATION AND ACCRUAL OF BENEFIT.

A. Method of Allocation.

(i) Employer Contributions. Subject to Article X and any restoration allocation required under Section 4.05, a percentage of the annual Employer Contribution made pursuant to Section 3.02 shall be allocated and credited to the Account of each Participant who satisfies the conditions of Section 3.03B to be determined as follows:

Step One: Any Employer Contributions made during the Plan Year will be allocated among each eligible Participant’s Account, in the group of Participants for whom the Employer Contribution was made,

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in the ratio that the sum of the Participant’s total Compensation and Excess Compensation (as hereinafter defined) for the Plan Year bears to the sum of all such Participants’ total Compensation and Excess Compensation for the Plan Year. However, if the amount allocated to Participants’ Accounts under this Step One, as a percentage of the sum of their total Compensation and Excess Compensation, exceeds 5.7%, (or the percentage equal to the old-age insurance portion of the tax rate under Code Section 3111(a) in effect for the Plan Year, if greater), then the amount of contributions allocated under this Step One shall be reduced to an amount that results in an allocation, as a percentage of the sum of each Participant’s total Compensation and Excess Compensation for the Plan Year, of no more than 5.7% (or the percentage equal to the old-age insurance portion of the tax rate under Code Section 3111(a) in effect for the Plan Year, if greater).

Step Two: Any Employer Contributions remaining after the allocation in Step One will be allocated among each eligible Participant’s Account, in the group of Participants for whom the Employer Contribution was made, in the ratio that each such Participant’s total Compensation for the Plan Year bears to the total Compensation of all such Participants for that Plan Year.

“Excess Compensation” means Compensation in excess of the taxable wage base, as determined under Section 230 of the Social Security Act, in effect on the first day of the Plan Year.

(ii) Special Contributions. As an alternative or in addition to making Employer Contributions and allocating them in the manner described above, and subject to Article X and any restoration allocation described in Section 4.05, a portion of the annual Special Contribution made pursuant to Section 3.02 shall be allocated and credited to the Account of each Participant who satisfies the conditions of Section 3.03B. Special Contributions, if any, shall be allocated among the Accounts of the group of eligible Participants for whom the contribution was made in the ratio that each such Participant’s Compensation bears to the total Compensation of all such Participants.

B. Accrual of Benefit. The Administrative Committee shall determine the accrual of a Participant’s benefit on the basis of the Plan Year. In allocating an Employer Contribution to a Participant’s Account, the Administrative Committee, subject to Section 10.01, shall take into account only Compensation paid to the Employee during the portion of the Plan Year during which the Employee was a Participant. Notwithstanding any other provision to the contrary, an Employer or Special Contribution shall not be allocated to a Participant’s Account to the extent the contribution would exceed the Participant’s “Maximum Permissible Amount” as described in Schedule IV.

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Section 3.04 PARTICIPANT CONTRIBUTIONS.

A. Compensation Deferral Contributions.

(i) Contribution Limits. For any Plan Year, each Participant may have allocated to his Account an amount of his Compensation for such Plan Year, which amount shall be a whole percentage, rounded to the nearest dollar, of not less than one percent but not more than the lesser of $15,000 in 2006 (or such larger dollar amount as the Commissioner of the Internal Revenue may prescribe in accordance with Code Section 402(g)(4)) or 50% of his Compensation for such Plan Year. Such amount shall be known as the Participant’s “Compensation Deferral Contribution.”

(ii) Amount of Compensation Deferral Contribution. A Participant’s Compensation for a Plan Year shall be reduced by: (i) the amount of the deferral affirmatively elected by the Participant for such Plan Year; or (ii) if applicable, the amount of deferral designated as the “Automatic Election Contribution,” as described below.

B. Catch-Up Contributions. For any Plan Year, each Participant who has or will attain at least age 50 by the end of such Plan Year, and with respect to whom no other elective deferrals would otherwise be made for the Plan Year by reason of the application of the limits contained in Section 3.04.A.(i) of the Plan or the limitations contained in Code Sections 401(a)(30), 402(h), 403(b), 408, 415(c) and 457(b)(2) (determined without regard to Code Section 457(b)(3)), may defer an additional amount of his Compensation for such Plan Year, which amount shall not exceed $5,000 in 2006 (or such larger dollar amount as prescribed in Code Section 414(v)). Such amount shall be known as the Participant’s “Catch-Up Contributions”. Such Catch-Up Contributions shall not be taken into account for purposes of Code Sections 402(g) and 415.

C. Automatic Election Contributions.

(i) In General. The Employer may elect to implement an “Automatic Election Percentage” with respect to a group of employees. The term Automatic Election Percentage shall mean the amount by which an Employer shall elect to reduce a Participant’s Compensation for the sole purpose of making “Automatic Election Contributions” to the Participant’s Compensation Deferral Account on his behalf. The Automatic Election Percentage shall be determined before the beginning of the applicable Plan Year, and announced in advance of the Plan Year to Participants and at the time of hire for new Employees. If the Employer so elects, a Participant who participates in the Plan at a deferral percentage level that does not equal or exceed the Automatic Contribution Percentage (as described below), shall have his Compensation Deferral Contributions increased to the Automatic Contribution Percentage in accordance with the provisions

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for continuing Participants set forth in this Section. An Eligible Employee may opt out of the Automatic Election Percentage prior to its application and an affected Participant may suspend or change the amount of Automatic Election Contributions at any time, but only on a prospective basis for the remainder of the Plan Year.

(ii) Administrative and Notice Requirements. The Administrative Committee shall administer the Employer’s election to implement an Automatic Election Percentage in a uniform and nondiscriminatory manner with respect to newly eligible Participants (including rehired Participants) and continuing Participants whose Compensation Deferral Contribution percentage does not equal or exceed the Automatic Election Percentage selected by the Employer.

The time at which the Automatic Election Percentage shall be effective shall be (i) with respect to newly eligible Participants, a date following the lapse of a reasonable period of time after the Administrative Committee has provided such individual with a notice described below; or (ii) with respect to a continuing Participant, as of the initial effective date of the implementation of the Automatic Election Percentage and the first day of each Plan Year thereafter. The Administrative Committee shall provide to newly eligible Participants at the time of hire or in advance of the effective date of the Automatic Election Percentage a notice explaining their right not to make an Automatic Election Contribution or to alter the amount of such contributions, an explanation of the procedure for exercising that right and the timing for implementation of any such election, and the effect of not revoking the Automatic Election Percentage. Thereafter, continuing Participants will be notified periodically of their Automatic Election Percentage and an explanation of such a Participant’s right to change the percentage of Compensation Deferral Contributions, including the procedure for exercising that right and the timing for implementation of any such election.

The provision of the notice shall be governed according to uniform and nondiscriminatory procedures established by the Administrative Committee. The content of the notice and procedures related to the Employer’s implementation of Automatic Elections shall be consistent with Treasury Regulations issued under Code Section 401(k) and other guidance issued by the Internal Revenue Service.

Section 3.05 CHANGES AND SUSPENSIONS OF COMPENSATION DEFERRAL CONTRIBUTIONS AND CATCH-UP CONTRIBUTIONS. A Participant may change the rate of Compensation Deferral Contributions and/or Catch-Up Contributions to his Account at any time during each Plan Year, effective for the first payroll period for which it is administratively feasible to change the rate of such Participant’s Compensation Deferral Contributions and/or Catch-Up Contributions, by communicating such rate change in accordance with uniform rules and procedures established by the Administrative Committee

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regarding the timing and manner of making such elections. In addition, a Participant may at any time elect to suspend all contributions to his Account by giving advance notice in any manner specified by the Administrative Committee in accordance with its uniform rules and procedures. An election to recommence contributions shall be effective for the first payroll period in which it is administratively feasible to begin deferral withholdings. All suspensions and recommencements of Compensation Deferral Contributions and/or Catch-Up Contributions shall be made in the manner and at the times specified in uniform rules and procedures established by the Administrative Committee, which rules and procedures may be changed from time to time.

Section 3.06 MATCHING AND QUALIFIED MATCHING CONTRIBUTIONS.

A. In General. For each Plan Year, the Employer may contribute to each eligible Participant’s Account a “Matching Contribution” in an amount determined by the Employer from time to time in its discretion. The amount or rate of the Matching Contribution shall be announced to Participants and other Eligible Employees, and suspended or changed on a prospective basis only. The Employer shall not make a Matching Contribution to the Trust for any Participant to the extent that the contribution would exceed the Participant’s “Maximum Permissible Amount” as described in Schedule IV.

B. Safe Harbor Matching Contributions.

(i) Amount. On and after January 1, 2005, Matching Contributions sufficient to meet the “safe harbor” requirements of Section 401(k)(12) of the Code shall be made to each eligible Participant’s Account and shall be referred to as “Safe Harbor Matching Contributions.” Specifically, the Employer shall match 100% of each Participant’s Compensation Deferral Contributions that do not exceed 3% of the Participant’s Compensation and 50% of each Participant’s Compensation Deferral Contributions that exceed 3% of the Participant’s Compensation but that do not exceed 5% of the Participant’s Compensation. In addition, Safe Harbor Matching Contributions may not be made in an amount which would cause the Plan to fail to satisfy the requirements of Code Section 401(m)(11). Pursuant to Internal Revenue Service Notice 98-52, effective for Plan Years beginning on and after January 1, 2005, the limitation on Matching Contributions made at the Employer’s discretion on behalf of a Participant is an amount which, in the aggregate, does not exceed four percent (4%) of the Participant’s Compensation. The limitation under Notice 98-52 shall be observed only to the extent required by law to meet the requirements for the safe harbors under Code Section 401(k)(12) and 401(m)(11).

(ii) Notice Requirements. Effective for the Plan Year commencing January 1, 2005 at least 30 days, but not more than 90 days, before the

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beginning of the Plan Year, the Employer will provide each Eligible Employee a comprehensive notice of the employee’s rights and obligations under the Plan, in compliance with the notice requirements set forth in IRS Notices 98-52 and 2000-3 and any additional guidance that may be set forth by the IRS in the future.

(iii) Election Periods. In addition to any other election periods provided under the Plan, each Eligible Employee may make or modify a Compensation Deferral Contribution election during the 30-day period immediately following the receipt of the notice described in subsection (ii) above.

C. Qualified Matching Contributions. If the Employer so elects, the Employer may also make Matching Contributions to the Plan that are “Qualified Matching Contributions.” Qualified Matching Contributions shall mean Matching Contributions that are at all times Nonforfeitable and subject to the distribution requirements of Section 401(k) of the Code when made to the Plan. Additional contributions subject to these rules may be made by the Employer, or some or all of the existing Matching Contributions can be designated as fully vested and subject to the distribution restrictions, in order to satisfy these rules.

D. Non-Safe Harbor Matching Contributions. Matching Contributions made before January 1, 2005, and Matching Contributions made after such date in excess of Safe Harbor Matching Contributions and/or Qualified Matching Contributions, if any, are referred to herein as “Non-Safe Harbor Matching Contributions.”

Section 3.07 MATCHING CONTRIBUTION ALLOCATION AND ACCRUAL OF BENEFIT. Only Participants who have made Compensation Deferral Contributions during the Plan Year shall be eligible to share in the allocation of the Matching Contribution as set forth in Section 3.06. Catch-Up Contributions under this Plan shall not be eligible for Matching Contributions. In all cases, the allocation of Matching Contributions or Qualified Matching Contributions shall be based on the amount or rate established in advance for such contributions relative to the Compensation Deferral Contributions being matched. Although Matching Contributions may be contributed periodically throughout the Plan Year, the allocation applicable to any Participant shall be adjusted as necessary to attain the appropriate allocation rate for the Plan Year as a whole. No Matching Contributions shall be made, however, with respect to “Catch-Up Contributions” or “Excess Compensation Deferrals.”

Matching Contributions shall become Nonforfeitable in accordance with Section 4.01 of the Plan. In any event, Matching Contributions shall be fully vested and Nonforfeitable at Normal Retirement Age, upon the complete or partial termination of the Plan, or upon the complete discontinuance of Employer contributions. Matching Contributions that are designated as Safe Harbor Matching Contributions shall be 100% vested at all times. Forfeitures of Matching Contributions, other than Excess Aggregate Contributions, shall be made in accordance with Section 4.03 of the Plan.

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Section 3.08 VOLUNTARY EMPLOYEE NONDEDUCTIBLE CONTRIBUTIONS. Participants shall not be permitted to make voluntary employee nondeductible contributions.

Section 3.09 QUALIFIED NON-ELECTIVE CONTRIBUTIONS. If it so elects, the Employer may make “Qualified Non-elective Contributions” under the Plan on behalf of all Participants or all Participants who are Non-highly Compensated Employees in order to satisfy either the Actual Deferral Percentage test or the Actual Contribution Percentage test. For purposes of this Article III, Qualified Non-elective Contributions shall mean contributions (other than Matching Contributions or Qualified Matching Contributions) made by the Employer and allocated to Participants’ Accounts that the Participants may not elect to receive in cash until distributed from the Plan; that are Nonforfeitable when made; and that are distributable only in accordance with the distribution provisions that are applicable to Compensation Deferral Contributions and Qualified Matching Contributions. Qualified Non-elective Contributions shall be allocated to Participants’ Accounts in the same proportion that each Participant’s Compensation for the Plan Year for which the Employer makes the contribution bears to the total Compensation of all Participants for the Plan Year (or of all Non-highly Compensated Participants, as applicable).

Section 3.10 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its contribution for each Plan Year in one or more installments of cash without interest. The Employer must make its contribution that Participants have elected to defer under Section 3.04 as soon as such amounts may reasonably be segregated from the Employer’s general assets, but in no event later than 15 business days after the end of the calendar month in which such amounts were withheld from the Participant’s Compensation, or such later time as may be permitted by regulations under ERISA and Section 401(k) of the Code. The Employer must make the balance, if any, of its contribution to the Trustee within the time prescribed (including extensions) for filing its tax return for the taxable year for which it claims a deduction for its contribution, in accordance with Code Section 404(a)(6).

Section 3.11 ALLOCATION OF FORFEITURES. Subject to any restoration allocation required under Section 4.05, the Administrative Committee shall allocate and use all or a portion of the amount of a Participant’s benefit forfeited under the Plan either to pay reasonable expenses of the Plan (to the extent not paid by the Employer) or to reduce its Employer Contributions, Special Contributions, Matching Contributions and/or other contributions payable under the Plan, for the Plan Year in which the forfeiture occurs or any prior or future Plan Year, as determined by the Administrative Committee.

Section 3.12 ROLLOVER AND TRANSFER CONTRIBUTIONS. The Trustee is authorized to accept on behalf of an Employee, and hold as part of the Trust Fund, assets from (A) another plan qualified under Sections 401(a), 403(a), 403(b) or 457(b) of the Code or (B) a conduit individual retirement account, provided that such transfer satisfies any procedures or other requirements established by the Administrative Committee. The Trustee shall also accept and hold as part of the Trust Fund assets transferred from any other plan qualified under either Section 401(a) or 403(a) of the Code in connection with a merger or consolidation of such plan with or into the Plan pursuant to Section 12.06 hereof and as may be approved by the Administrative Committee. In addition, the Trustee shall also accept “rollover” amounts contributed directly by or on behalf of an Employee in accordance with

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procedures and rules established by the Administrative Committee in respect of a distribution made to or on behalf of such Employee from another plan qualified under either Code Section 401(a) or 403(a) pursuant to Section 12.06 hereof. All amounts so transferred to the Trust Fund shall be held in segregated subaccounts and shall be referred to as “Transfer Contributions” if such amounts are subject to the special distribution rules described on Schedule III and as “Rollover Contributions” if not subject to such rules.

Rollover Contributions must conform to rules and procedures established by the Administrative Committee, including rules designed to assure the Administrative Committee that the funds so transferred qualify as a Rollover Contribution under the Code. An Employee, prior to satisfying the Plan’s eligibility conditions, may make a Rollover Contribution to the Trust to the same extent and in the same manner as a Participant. If an Employee makes a Rollover Contribution to the Trust prior to satisfying the Plan’s eligibility conditions, the Administrative Committee and Trustee must treat the Employee as a Participant for all purposes of the Plan, except that the Employee is not a Participant for purposes of making Compensation Deferral Contributions or sharing in Employer contributions or Participant forfeitures under the Plan until he actually becomes a Participant in the Plan. If the Employee has a Severance from Employment prior to becoming a Participant, the Trustee will distribute his Rollover Contribution Account to him as if it were an Employer Contribution Account.

Section 3.13 TRANSITION CONTRIBUTIONS. Pursuant to the terms set forth in Schedule V, an Employer may make a “Transition Contribution” to the Account of selected Participants in the amount set forth in Schedule V. The Employer shall not make a Transition Contribution to the Trust for any Participant to the extent that the contribution would exceed the Participant’s “Maximum Permissible Amount” described in Schedule IV.

Section 3.14 RETURN OF CONTRIBUTIONS. All contributions to the Plan are conditioned upon their deductibility under the Code. The Trustee, upon written request from the Employer, shall return to the Employer the amount of the Employer’s contribution made by the Employer by mistake of fact or the amount of the Employer’s contribution disallowed as a deduction under Code Section 404. The Trustee shall not return any portion of the Employer’s contribution under this provision more than one year after.

A. The Employer made the contribution by mistake of fact; or

B. The disallowance of the contribution as a deduction, and then, only to the extent of the disallowance.

The Trustee shall not increase the amount of the Employer contribution returnable under this Section 3.14 for any earnings attributable to the contribution, but the Trustee shall decrease the Employer contribution returnable for any losses attributable to it. The Trustee may require the Employer to furnish it whatever evidence the Trustee deems necessary to enable the Trustee to confirm the amount the Employer has requested be returned is properly returnable under ERISA.

Section 3.15 FURTHER REDUCTIONS OF CONTRIBUTIONS. In addition to the reductions and recharacterizations provided for under Schedule IV, in any Plan Year in which the Administrative Committee deems it necessary to do so to meet the requirements of the Code and the Treasury Regulations thereunder, the Administrative Committee may further reduce the amount of Compensation Deferral Contributions that may be made to a Participant’s Account, or refund such amounts previously contributed.

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ARTICLE IV

TERMINATION OF SERVICE; PARTICIPANT VESTING

Section 4.01 VESTING.

A. Vesting — In General. A Participant’s interest in his Compensation Deferral Account, Catch-Up Account, Safe Harbor Matching Account, Rollover Account, Transfer Account, and his Qualified Matching Contribution Account or Qualified Non-elective Contribution Account, if any, shall at all times be fully vested and Nonforfeitable. A Participant’s interest in his Employer Contribution Account, Special Contribution Account and Non-Safe Harbor Matching Account shall be fully vested and Nonforfeitable upon and after his attaining Normal Retirement Age (if employed by the Employer on or after that date), or if his employment terminates as a result of death or Disability. Except as otherwise provided in Schedule V, if a Participant’s employment terminates prior to Normal Retirement Age for any reason other than death or Disability, then for each Year of Service, he shall receive a Nonforfeitable percentage of his Employer Contribution Account, Special Contribution Account and Non-Safe Harbor Matching Account (forfeiting the balance) equal to the following:

Years of Service	Percent Nonforfeitable
Less than three (3)	0	%
At least three (3) or more	100	%

B. Vesting — Transition Contributions. If a Participant’s Account is credited with Transition Contributions set forth in Schedule V, such Transition Contribution shall be subject to the vesting schedule set forth in Schedule V.

Section 4.02 INCLUDED YEARS OF SERVICE – VESTING. For purposes of determining Years of Service under Section 4.01, the Plan shall take into account all Years of Service an Employee completes except any Year of Service after the Participant first incurs a “Forfeiture Break in Service.” The Participant incurs a Forfeiture Break in Service when he incurs five consecutive Breaks in Service. This exception excluding Years of Service after a Forfeiture Break in Service shall apply for the sole purpose of determining the nonforfeitable percentage of a Participant’s Employer Contribution Account, Special Contribution Account, Non-Safe Harbor Matching Account and Transition Account that accrued for his benefit prior to the Forfeiture Break in Service.

Section 4.03 FORFEITURE OCCURS. A Participant’s forfeiture, if any, of his Employer Contribution Account, Special Contribution Account, Non-Safe Harbor Matching Account and any Transition Accounts as provided in Schedule V subject to a vesting schedule shall occur under the Plan:

A. As of the Accounting Date of the Plan Year in which the Participant first incurs a Forfeiture Break in Service, or, if earlier and if applicable,

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B. On the date the Participant receives (or is deemed to receive) a “Cash-out Distribution,” as defined in Section 4.04, of the Nonforfeitable percentage of his Employer Contribution Account, Special Contribution Account, Non-Safe Harbor Matching Account and Transition Account as a result of his termination of participation in the Plan in accordance with Section 4.04 below.

The Administrative Committee shall determine the percentage of a Participant’s Employer Contribution Account, Special Contribution Account, Non-Safe Harbor Matching Account and Transition Account forfeiture, if any, under this Section 4.03 solely by reference to the vesting schedule of Section 4.01 or as provided in Schedule V, if applicable. A Participant shall not forfeit any portion of his Employer Contribution Account, Special Contribution Account or Non-Safe Harbor Matching Account for any other reason or cause except as expressly provided by this Section 4.03.

Section 4.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS. If, pursuant to Article V, a partially-vested Participant receives a “Cash-out Distribution” before he incurs a Forfeiture Break in Service, the Cash-out Distribution will result in an immediate forfeiture of the nonvested portion of the Participant’s Account balance derived from Employer contributions. A partially-vested Participant is a Participant whose Nonforfeitable Percentage determined under Section 4.01 is less than 100%. A Cash-out Distribution is a distribution of the entire present value of the Participant’s Nonforfeitable Account Balance.

A “deemed” Cash-out Distribution rule applies to a 0% vested Participant. A 0% vested Participant is a Participant whose Account balance is entirely forfeitable at the time of his Severance from Employment. If the Participant’s Account is not entitled to an allocation of Employer contributions or Participant forfeitures for the Plan Year in which he has a Severance from Employment, the Administrative Committee will apply the deemed Cash-out Distribution rule as if the 0% vested Participant received a Cash-out Distribution on the date of the Participant’s Severance from Employment. If the Participant’s Account is entitled to an allocation of Employer contributions or Participant forfeitures for the Plan Year in which he has a Severance from Employment, the Administrative Committee will apply the deemed Cash-out Distribution rule as if the 0% vested Participant received a Cash-out Distribution on the first day of the first Plan Year beginning after his Severance from Employment. For purposes of applying the restoration provisions of Section 4.05, the Administrative Committee will treat the 0% vested Participant as repaying his Cash-out Distribution on the first date of his re-employment with the Employer.

Section 4.05 RESTORATION OF FORFEITED PORTION OF ACCOUNT. A Participant who is re-employed after receiving a Cash-out Distribution (or deemed Cash-out Distribution) of the Nonforfeitable percentage of his Account shall have the right to repay the Trustee in cash the entire amount of the Cash-out Distribution he received, if the Administrative Committee must restore his Account under the requirements of this Section 4.05.

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A. Restoration and Conditions upon Restoration. Subject to the conditions of this subsection, if the Participant makes the Cash-out Distribution repayment, the Administrative Committee shall restore his Account attributable to Employer contributions to the same dollar amount as the dollar amount of such portion of his Account on the Accounting Date, or other Valuation Date, immediately preceding the date of the Cash-out Distribution (or deemed Cash-out Distribution), unadjusted for any gains or losses occurring subsequent to that Accounting Date, or other Valuation Date. Notwithstanding such repayment, the Administrative Committee shall not restore a re-employed Participant’s Account under the immediately preceding sentence if:

(i) The Participant’s Account was 100% Nonforfeitable at the time of the Cash-out Distribution; or

(ii) The Participant incurred a Forfeiture Break in Service. This condition shall apply only if repayment is not made before the earlier of five years after the first date on which the Participant is re-employed by the Employer, or the close of the first period of five consecutive Breaks in Service commencing after the Cash-out Distribution.

B. Time and Method of Restoration. If neither of the two conditions preventing restoration of the Participant’s Account applies, the Administrative Committee shall restore the Participant’s Account as of the Plan Year Accounting Date coincident with or immediately following the repayment. To restore the Participant’s Account, the Administrative Committee, to the extent necessary, shall allocate to the Participant’s Account:

(i) First, the amount, if any, of Participant forfeitures the Administrative Committee would otherwise allocate under Section 3.11; and

(ii) Second, the Employer contribution for the Plan Year to the extent made under a discretionary formula.

To the extent the amount(s) available for restoration for a particular Plan Year are insufficient to enable the Administrative Committee to make the required restoration, the Employer shall contribute, without regard to any requirement or condition of Section 3.03, such additional amount as is necessary to enable the Administrative Committee to make the required restoration. If, for a particular Plan Year, the Administrative Committee must restore the Account of more than one re-employed Participant, then the Administrative Committee shall make the restoration allocation(s) to each such Participant’s Account in the same proportion that a Participant’s restored amount for the Plan Year bears to the restored amount for the Plan Year of all re-employed Participants. The Administrative Committee shall not take into account the allocation(s) under this Section 4.05 in applying the limitation on allocations described in Schedule IV.

C. Segregated Account for Repaid Amount. Until the Administrative Committee restores the Participant’s Account, the Trustee shall, at the direction of the

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Company or the Administrative Committee, invest the amount the Participant has repaid in a segregated Account maintained solely for that Participant. The Trustee shall invest the amount in the Participant’s segregated Account in federally insured interest-bearing savings account(s), time deposit(s), or similar investments, including a money market or similar fund currently offered as an investment option under the Trust. Until commingled with the balance of the Trust Fund on the date the Administrative Committee restores the Participant’s Account, the Participant’s segregated Account shall remain a part of the Trust, but it alone shall share in any income it earns and it alone shall bear any expense or loss it incurs. The Company or the Administrative Committee shall direct the Trustee to repay to the Participant, as soon as is administratively practicable, the full amount of the Participant’s segregated Account, if the Administrative Committee determines that one or more of the conditions of Subsection A of this Section 4.05 prevents restoration as of the applicable Accounting Date, notwithstanding the Participant’s repayment.

Section 4.06 TRANSFER BETWEEN CLASSES OF EMPLOYEES. For purposes of vesting, in the case of an Employee who transferred from a class of Employees whose Service was determined on an Hours of Service basis to a class of Employees whose Service is determined on an elapsed time basis, such Employee received credit for a Period of Service consisting of (a) a number of years equal to the number of Years of Service credited to the Employee before the Plan Year during which the transfer occurs, and (b) the greater of (i) the Period of Service that would be credited to the Employee under the elapsed time method for his Service during the entire Plan Year in which the transfer occurs or (ii) the Service taken into account under the hours counting method as of the date of the transfer. In addition, the Employee received credit for Service subsequent to the transfer commencing on the day after the last day of the Plan Year in which the transfer occurs.

In the case of an Employee who transferred from a class of Employees whose Service is determined on an elapsed time basis to a class of Employees whose Service was determined on an Hours of Service basis, such Employee received credit, as of the date of transfer, for a number of Years of Service equal to the number of one-year Periods of Service credited to the Employee as of the date of transfer, and the Employee received credit, in the Plan Year that includes the date of the transfer, for a number of Hours of Service determined by applying the equivalency set forth in Labor Reg. Section 2530.200b-3(e)(1)(i) (which credits ten Hours of Service) to any fractional part of a year credited to the Employee under this Section as of the date of the transfer.

Section 4.07 TRANSFERS BETWEEN PARTICIPATING EMPLOYERS. For purposes of vesting, in the case of an Employee who transfers between Participating Employers with different vesting schedules, the Employee’s Nonforfeitable percentage shall be determined in accordance with the vesting schedule applicable to the Participating Employer at which the Employee first commenced employment. Notwithstanding the foregoing, if the vesting schedule at the Participating Employer to which the Employee is transferred is more advantageous in all respects than the Employee’s vesting schedule at his original Participating Employer, such Employee’s Nonforfeitable percentage shall be determined in accordance with the vesting schedule of the subsequent Participating Employer. If the vesting schedule may be more advantageous depending on an Employee’s Years of Service and the Employee has performed three or more Years of Service for an Employer at the time of the transfer, the Employee may elect between the vesting schedule of his prior Participating Employer and his current Participating Employer in accordance with the procedures set forth in Section 12.03.

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ARTICLE V

TIME AND METHOD OF PAYMENT OF BENEFITS

Section 5.01 RETIREMENT. Upon termination of a Participant’s employment for any reason after attaining Normal Retirement Age, payment of the Participant’s Account shall commence to him (or to his Beneficiary if the Participant is deceased), in accordance with the provisions of this Article V, as soon as administratively practicable but not later than 60 days after the close of the Plan Year in which the Participant’s employment terminates. The form of payment shall be the same as for other Severance from Employment distributions, as set forth in Sections 5.02 and 5.04 and Schedule III, as applicable. A Participant who remains in the employ of the Employer after attaining Normal Retirement Age shall continue to participate in Employer contributions.

Section 5.02 DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE. Upon a Participant’s Severance from Employment prior to attaining Normal Retirement Age (for any reason other than death), payment shall commence to the Participant of the value of his Nonforfeitable Account Balance as provided in this Section 5.02. The following rules and definitions shall apply to any such distribution:

A. “Cash-out Distribution.” A Cash-out Distribution is a lump sum distribution of the Participant’s Nonforfeitable Account Balance.

B. Consent. The Participant must consent in writing to a distribution (including the form of the distribution) if: (i) the Participant’s Nonforfeitable Account Balance on the date the distribution commences exceeds $1,000 ($5,000 or less prior to March 28, 2005), and (ii) the Administrative Committee directs the Trustee to make a distribution to the Participant prior to his attaining the later of Normal Retirement Age or age 62. Furthermore, the Participant’s Spouse must consent in writing to the distribution if: (i) the Participant’s Nonforfeitable Account Balance on the date the distribution commences exceeds $5,000 and (ii) the qualified joint and survivor annuity provisions of Code Section 401(a)(11) (as set forth in Schedule III of the Plan) apply to the distribution.

The consent of the Participant, and the Participant’s Spouse, if applicable, shall be obtained in writing within the 90-day period ending on the “Annuity Starting Date.” The Annuity Starting Date is the first day of the first period for which an amount is paid as an annuity or in any other form. The Plan Administrator shall notify the Participant and the Participant’s Spouse of the right to defer any distribution until the Participant’s Nonforfeitable Account Balance is no longer immediately distributable. Such notification shall include a general description of the material features, and an explanation of the relative values of, the optional forms of benefit available under the Plan in a manner that would satisfy the notice requirements of Code Section 417(a)(3), and shall be provided no less than 30 days and no more than 90 days prior to the Annuity Starting Date. However, if the Participant, after having received this notice, affirmatively elects a distribution, such distribution may commence less than 30 days after the notice was provided.

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Notwithstanding the foregoing, only the Participant need consent to the commencement of a distribution in the form of a qualified joint and survivor annuity while the Account balance is immediately distributable. (Furthermore, if payment in the form of a qualified joint and survivor annuity is not required with respect to the Participant pursuant to Code Section 417, only the Participant need consent to the distribution of an Account balance that is immediately distributable.) Neither the consent of the Participant nor the Participant’s Spouse shall be required to the extent that a distribution is required to satisfy Section 401(a)(9) or Section 415 of the Code. An Account balance is immediately distributable if any part of the Account balance could be distributed to the Participant (or the surviving Spouse) before the Participant attains, or would have attained if not deceased, the later of Normal Retirement Age or age 62.

C. Time of Distribution of Account Balance. Upon Severance from Employment, other than for death, before Normal Retirement Age, and subject to the consent requirements set forth in Schedule III to the Plan, the Participant’s Account balance shall be distributed as follows:

(i) If the Participant’s Nonforfeitable Account Balance on the date the distribution commences is $1,000 or less ($5,000 or less prior to March 28, 2005), the Trustee shall pay such Nonforfeitable Account Balance to the Participant in the form of a single, lump sum Cash-out Distribution as soon as administratively practicable after the Participant’s Severance from Employment.

(ii) If the Participant’s Nonforfeitable Account Balance on the date the distribution commences is greater than $1,000 ($5,000 prior to March 28, 2005), the Trustee shall pay such Nonforfeitable Account Balance in the form of a single, lump sum distribution as soon as administratively practicable after the Participant’s Severance from Employment unless the Participant (and his Spouse, if applicable) does not consent to such immediate distribution. Distributions in the form of a qualified joint and survivor annuity continue to apply to (a) Participants who previously participated in the Packaging Coordinators, Inc. Money Purchase Pension Plan, and (b) certain other individuals as may be identified on Schedule V.

D. Deferral of Distribution of Account Balance until Normal Retirement Age. If the Participant (and, if applicable, the Participant’s Spouse) does not file his written consent (if required) with the Trustee within the reasonable period of time stated in the consent form, the Trustee shall continue to hold the Participant’s Account in trust until the close of the Plan Year in which the Participant attains Normal Retirement Age. At that time, the Trustee shall commence payment of the Participant’s Nonforfeitable value of his Account in accordance with the provisions of this Article V; provided, however, if the Participant dies after terminating employment but prior to attaining Normal Retirement Age, the Administrative Committee, upon notice of the death,

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shall direct the Trustee to commence payment of the Participant’s Nonforfeitable value of his Account to his Beneficiary in accordance with the provisions of Section 5.06.

A Participant who has elected to delay receiving a distribution of his Account may elect to receive a distribution of his Nonforfeitable Account Balance as soon as administratively practicable by properly completing the appropriate distribution election forms or procedures. If no such election is made, the Participant’s Nonforfeitable Account Balance shall be paid as provided in Section 5.01.

Section 5.03 OTHER RULES GOVERNING THE TIME OF PAYMENT OF BENEFITS.

A. Minimum Legal Distribution Requirements. Unless the Participant elects otherwise in writing, the Participant’s Nonforfeitable Account Balance shall be distributed not later than 60 days after the close of the Plan Year in which the later of the following events occurs:

(i) The date the Participant attains Normal Retirement Age; or

(ii) The date the Participant dies, becomes disabled, or otherwise terminates Service (employment) with the Employer.

In no event shall the distribution commence nor shall the Participant elect to have distribution commence, later than the Required Beginning Date. Furthermore, once distributions have begun to a Five-percent Owner, they must continue to be distributed, even if the Participant ceases to be a Five-percent Owner in a subsequent year.

B. In no event shall the payment commence later than the time prescribed by this Article V or in a form not permitted under Article VI. The Administrative Committee shall make its determinations under this Article V in a nondiscriminatory, consistent and uniform manner. The Participant (and, if applicable, the Participant’s Spouse) shall be provided with the appropriate form to consent to the distribution direction, if required.

Section 5.04 FORM OF BENEFIT PAYMENTS. Subject to Schedule III, if applicable, a Participant shall receive payment of his Nonforfeitable Account Balance in a single lump sum in cash (and, where applicable, in Shares) based upon the value of the Account on the Valuation Date coinciding with or immediately preceding the date the distribution is requested.

Section 5.05 MINIMUM DISTRIBUTION REQUIREMENTS. This Section applies prior to January 1, 2003. The Participant’s Nonforfeitable Account Balance shall be distributed, as of the Required Beginning Date, in accordance with the minimum distribution requirements established by Code Section 401(a)(9) and the applicable Treasury Regulations thereunder.

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A. If a Participant’s benefit is to be distributed over (i) a period not extending beyond the life expectancy of the Participant or the joint life and last survivor expectancy of the Participant and the Participant’s Beneficiary, or (ii) a period not extending beyond the life expectancy of the Beneficiary, the amount required to be distributed for each calendar year, beginning with distributions for the first distribution calendar year, must at least equal the quotient obtained by dividing the Participant’s Account balance as of the last Valuation Date preceding the distribution calendar year by the applicable life expectancy.

B. The amount to be distributed each year, beginning with distributions for the first distribution calendar year, shall not be less than the quotient obtained by dividing the Participant’s Nonforfeitable Account Balance as of the last Valuation Date preceding the distribution calendar year by the lesser of (i) the applicable life expectancy, or (ii) if the Participant’s Spouse is not the Beneficiary, the applicable divisor determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of proposed Treasury Regulations. Distributions after the death of the Participant shall be distributed using the applicable life expectancy in subsection A above as the relevant divisor without regard to Proposed Regulations Section 1.401(a)(9)-2.

C. The minimum distribution required for the Participant’s first distribution calendar year must be made on or before the Participant’s Required Beginning Date. The minimum distribution for other calendar years, including the minimum distribution for the distribution calendar year in which the Participant’s Required Beginning Date occurs, must be made on or before December 31 of that distribution calendar year.

D. The Administrative Committee may compute the minimum distribution for a calendar year subsequent to the first calendar year for which the Plan requires a minimum distribution by redetermining the applicable life expectancy. However, the Administrative Committee may not redetermine the joint life and last survivor expectancy of the Participant and a nonspouse Beneficiary in a manner that takes into account any adjustment to a life expectancy other than the Participant’s life expectancy. The Administrative Committee shall use the life expectancy multiples under Treasury Regulations Section 1.72-9 for purposes of applying this Section.

Section 5.06 DISTRIBUTIONS UPON DEATH. This Section applies prior to January 1, 2003. Upon the death of the Participant, the Participant’s Nonforfeitable Account Balance shall be paid in accordance with Code Section 401(a)(9) and this Section 5.06.

A. Distribution Beginning Before Death. If the Participant’s death occurs after the Trustee has commenced payment of the Participant’s Nonforfeitable Account Balance, the Company or the Administrative Committee shall direct the Trustee to complete payment over a period that does not exceed the payment period that had commenced.

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B. Distribution Beginning After Death. Except as provided in Schedule III, if the Participant’s death occurs prior to his Annuity Starting Date, the distribution of the Participant’s entire Nonforfeitable Account Balance shall be made to the Participant’s Beneficiary in a single lump sum payment.

C. The Participant’s Nonforfeitable Account Balance to the Participant’s Beneficiary shall be distributed as soon as practicable after notification of the Participant’s death. However, if the Participant’s Nonforfeitable Account Balance at the time of distribution exceeds $5,000, the Account shall not be distributed to the Participant’s Beneficiary prior to the date the Participant would have attained the later of Normal Retirement Age or age 62, without the written consent of the Beneficiary if the Beneficiary is the Participant’s surviving Spouse. If the Beneficiary is not the Participant’s surviving Spouse, the Beneficiary must elect to have distribution of the entire amount payable completed on or before the last day of the calendar year that contains the fifth anniversary of the date of the Participant’s death.

Section 5.07 REVISED REQUIRED MINIMUM DISTRIBUTIONS.

A. Effective Dates. The provisions of this Section 5.07 will apply for purposes of determining the required minimum distributions for calendar years beginning on or after January 1, 2003.

B. Definitions. For purposes of this Section 5.07, the following definitions shall apply:

(i) “Designated Beneficiary” is the individual who is designated as the beneficiary under Plan Section 1.04 and is the Designated Beneficiary under Code Section 401(a)(9) and Section 1.401(a)(9)-1, Q&A-4 of the Treasury Regulations.

(ii) “Distribution Calendar Year” is a calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year that contains the participant’s Required Beginning Date. For distributions beginning after the Participant’s death, the first Distribution Calendar Year is the calendar year in which the distributions are required to begin. The required minimum distribution for the Participant’s first Distribution Calendar Year will be made on or before the Participant’s Required Beginning Date. The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Participant’s Required Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar Year.

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(iii) “Life Expectancy” is a beneficiary’s life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury Regulations.

(iv) “RMD Account Balance” is the account balance as of the last valuation date in the calendar year immediately preceding the Distribution Calendar Year (the “Valuation Calendar Year”) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the Valuation Calendar Year after the valuation date and decreased by distributions made in the Valuation Calendar Year after the valuation date. The account balance for the Valuation Calendar Year includes any amounts rolled over or transferred to the Plan either in the Valuation Calendar Year or in the Distribution Calendar Year if distributed or transferred in the Valuation Calendar Year.

C. Time and Manner of Distribution.

(i) Required Beginning Date. The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s Required Beginning Date.

(ii) Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows:

1. If the Participant’s surviving Spouse is the Participant’s sole Designated Beneficiary, then, except as provided herein, distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70  ¹/2, if later.

2. If the Participant’s surviving Spouse is not the Participant’s sole Designated Beneficiary, then, except as provided herein, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

3. If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

4. If the Participant’s surviving Spouse is the Participant’s sole Designated Beneficiary and the surviving Spouse dies after the

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Participant but before distributions to the surviving Spouse begin, this Subsection 4., other than Subsection 1., will apply as if the surviving Spouse were the Participant.

For purposes of this Section 5.07.C. and Sections 5.07.G. and H., unless Subsection 4. above applies, distributions are considered to begin on the Participant’s Required Beginning Date. If Subsection 4. applies, distributions are considered to begin on the date distributions are required to begin to the surviving Spouse under Subsection 1. If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant’s Required Beginning Date (or to the Participant’s surviving Spouse before the date distributions are required to begin to the surviving Spouse under Subsection 1.), the date distributions are considered to begin is the date distributions actually commence.

D. Forms of Distribution. Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year distributions will be made in accordance with Sections 5.07.E., 5.07.F., 5.07.G. and 5.07.H. If the Participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with Code Section 401(a)(9) and the Treasury Regulations.

E. Amount of Required Minimum Distributions for Each Distribution Calendar Year. During the Participant’s lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of:

(i) the quotient obtained by dividing the RMD Account Balance by the distribution period in the Uniform Lifetime Table set forth in Treasury Regulations Section 1.401(a)(9)-9, using the Participant’s age as of the Participant’s birthday in the Distribution Calendar Year; or

(ii) if the Participant’s sole Designated Beneficiary for the Distribution Calendar Year is the Participant’s Spouse, the quotient obtained by dividing the RMD Account Balance by the number in the Joint and Last Survivor Table set forth in Treasury Regulations Section 1.401(a)(9)-9, using the Participant’s and the Spouse’s attained ages as of the Participant’s and Spouse’s birthdays in the Distribution Calendar Year.

F. Lifetime Required Minimum Distributions Continue Through Year of Participant’s Death. Required minimum distributions will be determined under this Subsection F. beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant’s date of death.

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G. Death On or After Date Distributions Begin.

(i) Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the RMD Account Balance by the longer of the remaining Life Expectancy of the Participant or the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as follows:

1. The Participant’s remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

2. If the Participant’s surviving Spouse is the Participant’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving Spouse is calculated for each Distribution Calendar Year after the year of the Participant’s death using the surviving Spouse’s age as of the Spouse’s birthday in that year. For Distribution Calendar Years after the year of the surviving Spouse’s death, the remaining Life Expectancy of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse’s birthday in the calendar year of the Spouse’s death, reduced by one for each subsequent calendar year.

3. If the Participant’s surviving Spouse is not the Participant’s sole Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using the age of the Beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent year.

(ii) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the RMD Account Balance by the Participant’s remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

H. Death Before Date Distributions Begin.

(i) Participant Survived by Designated Beneficiary. Except as provided herein, if the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the

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Participant’s RMD Account Balance by the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as provided in Subsection G.

(ii) No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(iii) Death of Surviving Spouse Before Distributions to Surviving Spouse are Required to Begin. If the Participant dies before the date distributions begin, the Participant’s surviving Spouse is the Participant’s sole Designated Beneficiary, and the surviving Spouse dies before distributions are required to being to the surviving Spouse under Section 5.07.C.(ii)(1), this Section will apply as if the surviving Spouse were the Participant.

I. General Rules.

(i) Precedence. The requirements of this Section 5.07 will supersede any contrary provisions of the Plan.

(ii) Requirements of Treasury Regulations Incorporated. All distributions required under this Section 5.07 will be determined and made in accordance with the Treasury Regulations under Code Section 401(a)(9).

(iii) TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Section 5.07, distributions may be made under a designation made before January 1, 1984, in accordance with section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (“TEFRA”) and the provisions of the Plan that relate to TEFRA Section 242(b)(2).

Section 5.08 DESIGNATION OF BENEFICIARY. A Participant may, from time to time, designate in writing a Beneficiary or Beneficiaries, contingently or successively, to whom the Trustee shall pay his Account in the event of his death. A Participant’s Beneficiary designation shall not be valid unless the Participant’s Spouse consents (in accordance with the requirements of Code Section 417) to the Beneficiary designation. A Participant’s Beneficiary designation does not require spousal consent if the Participant’s Spouse is the Participant’s designated Beneficiary. The Administrative Committee shall prescribe the form for the written designation of Beneficiary and, upon the Participant’s filing the form with the Administrative Committee, the Participant shall effectively revoke all designations filed prior to that date by the same Participant.

Section 5.09 FAILURE OF BENEFICIARY DESIGNATION. If a Participant fails to name a Beneficiary in accordance with Section 5.08, or if the Beneficiary named by a

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Participant predeceases him, then the Trustee shall pay the Participant’s Account in a single lump sum to the Participant’s surviving Spouse, if any, and if there is no surviving Spouse, to the Participant’s estate.

If the Beneficiary survives the Participant but dies before complete distribution of the Participant’s Account, the remaining portion of the Participant’s Account shall be paid in a lump sum to any contingent Beneficiaries named by the Participant or, if there are none, to the legal representative of the estate of such deceased Beneficiary. The Company or the Administrative shall direct the Trustee as to the method and to whom the Trustee shall make payment under this Section.

Section 5.10 SPECIAL RULES FOR TRANSFER ACCOUNTS. Notwithstanding any provision of this Article V to the contrary, with respect to any Participant who has one or more Transfer Accounts consisting in whole or in part of Transfer Contributions which, by operation of relevant law and regulation (including, but not limited to, ERISA and the Code), must be distributed or made available under the same terms and conditions under which amounts held thereunder were previously held (prior to their becoming Transfer Contributions) to the extent that such terms and conditions must be preserved in order to comply with Code Section 411(d)(6), the Administrative Committee shall, upon the written request of the Participant (in the case of optional forms of benefit), cause the Trustee to distribute or make available such Transfer Contributions at such times and in such manner as may be so required.

Section 5.11 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained in this Plan shall prevent the Trustee from complying with the provisions of a qualified domestic relations order (as defined in Code Section 414(p)). This Plan specifically permits distribution to an alternate payee under a qualified domestic relations order at any time, irrespective of whether the Participant has attained his earliest retirement age (as defined under Code Section 414(p)) under the Plan. A distribution to an alternate payee prior to the Participant’s attainment of the earliest retirement age is available only if the order specifies distribution at that time or permits an agreement between the Plan and the alternate payee to authorize such an earlier distribution. In addition, if the present value of the alternate payee’s benefits under the Plan exceeds $5,000 and the order requires, the alternate payee must consent to any distribution occurring prior to the Participant’s attainment of the earliest retirement age. Nothing in this Section gives a Participant the right to receive a distribution at a time not permitted under the Plan, nor does this Section 5.10 give the alternate payee the right to receive a form of payment not permitted under the Plan.

The Administrative Committee shall establish reasonable procedures to determine the qualified status of a domestic relations order. Upon receiving a domestic relations order, the Administrative Committee promptly shall notify the Participant and any alternate payee named in the order, in writing, of the receipt of the order and the Plan’s procedures for determining the qualified status of the order. Within a reasonable period of time after receiving the domestic relations order, the Administrative Committee shall determine the qualified status of the order and shall notify the Participant and each alternate payee, in writing, of its determination. The Administrative Committee shall provide notice under this paragraph by mailing to the individual’s address specified in the domestic relations order, or in a manner consistent with Labor Regulations.

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If any portion of the Participant’s Nonforfeitable Account Balance is payable during the period the Administrative Committee is making its determination of the qualified status of the domestic relations order, the Trustee shall segregate the amounts payable in a separate account and invest the segregated account solely in fixed income investments or maintain a separate bookkeeping account of said amounts. If the Administrative Committee determines the order is a qualified domestic relations order within 18 months of the first date on which payments were due under the terms of the order, the Trustee shall distribute the separate account in accordance with the order. If the Administrative Committee does not make its determination of the qualified status of the order within the above-described 18-month period, the Trustee shall distribute the segregated account in the manner the Plan would distribute it if the order did not exist, and shall apply the order prospectively if the Administrative Committee later determines the order is a qualified domestic relations order.

To the extent it is not inconsistent with the provisions of the qualified domestic relations order, the Trustee shall invest any partitioned amount in a segregated subaccount or separate account and invest the account in the money market investment option or in other fixed income investments. A segregated subaccount shall remain a part of the Trust, but it alone shall share in any income it earns, and it alone shall bear any expense or loss it incurs.

The Trustee shall make any payment or distributions required under this Section by separate benefit checks or other separate distribution to the alternate payee(s).

Section 5.12 RE-EMPLOYMENT OF PARTICIPANTS RECEIVING PAYMENTS. In the event that a Participant who is receiving installment payments is re-employed by the Company, such Participant shall continue to receive payments from his Account in accordance with the method of payment in effect prior to his re-employment unless such method is changed. Payments shall be drawn from his entire Account, including any contributions allocated to his Account after his re-employment.

Section 5.13 FORM OF PAYMENTS. Lump sum payments may be made in cash or in Shares, if applicable. A Participant (or Beneficiary or personal representative, as applicable) making application for distribution of his Account shall be entitled to elect, in accordance with the Plan’s procedures, to have all those Shares then held in or thereafter credited to his Account distributed to him in that form. If such an election is made, any Plan distribution made under this Article V shall consist (in part) of the number of Shares (excluding any fractional share interest that shall be paid in cash) credited to the Participant’s total Account, but only as part of any lump sum distribution payable hereunder, and if all such Participant’s Shares then being held in the Trust Fund (fractional interests excepted) are to be distributed. If a Participant or Beneficiary elects an annuity form of distribution pursuant to Schedule III, a nontransferable annuity contract shall be purchased from a commercial insurer with the Participant’s Nonforfeitable Account Balance and distributed to the Participant or Beneficiary.

Section 5.14 LOST PARTICIPANT OR BENEFICIARY. The Account of a Participant shall be forfeited if the Benefits Group, after reasonable effort, is unable to locate the Participant or his Beneficiary to whom payment is due. The amount of the forfeiture shall reduce the Employer’s contributions under Sections 3.02 and 3.06, as elected by the Employer. However, any such forfeited Account will be reinstated and become payable if a

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claim is made by the Participant or Beneficiary for such Account. The Administrative Committee may prescribe uniform and non-discriminatory rules for carrying out this provision.

Section 5.15 FACILITY OF PAYMENT. If any person entitled to receive any amount under the provisions of this Plan is determined to be incapable of receiving or disbursing the same by reason of minority, illness or infirmity, mental incompetency, or incapacity of any kind, the Administrative Committee may, in its discretion, direct the Trustee to take any one or more of the following actions:

A. To apply such amount directly for the comfort, support and maintenance of such person;

B. To reimburse any person for any such support theretofore supplied to the person entitled to receive any such payment;

C. To pay such amount to any person selected by the Administrative Committee to disburse it for such comfort, support and maintenance, including without limitation, any relative who has undertaken, wholly or partially, the expense of such person’s comfort, care and maintenance, or any institution in whose care or custody the person entitled to the amount may be. The Administrative Committee may, in its discretion, deposit any amount due to a minor to his credit in any savings or commercial bank of the Administrative Committee’s choice.

Section 5.16 NO DISTRIBUTION PRIOR TO SEVERANCE FROM EMPLOYMENT, DEATH OR DISABILITY. Except as provided below, Compensation Deferrals, Safe Harbor Matching Contributions, Catch-Up Contributions, Qualified Non-elective Contributions, Qualified Matching Contributions, Transition Contributions and income allocable to each, are not distributable to a Participant or his Beneficiary or Beneficiaries, in accordance with such Participant’s or Beneficiary’s election, earlier than upon Severance from Employment, death or Disability.

Such amounts may also be distributed upon:

A. Termination of the Plan without the establishment of another defined contribution plan, as defined in the Code and applicable Treasury Regulations.

B. The hardship of the Participant, as described in Section 6.01 herein.

C. The attainment by the Participant of age 59 ¹/2, as described in Section 6.03 herein.

D. A Participant’s Severance from Employment. A “Severance from Employment” occurs when a Participant ceases to be employed by the Employer maintaining the Plan. This distributable event shall apply for distributions on and after January 1, 2002 and regardless of when the Severance from Employment occurred.

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All distributions that may be made pursuant to one or more of the foregoing distributable events are subject to the spousal and Participant consent requirements (if applicable) contained in Sections 401(a)(11) and 417 of the Code.

Section 5.17 DISTRIBUTION OF ASSETS TRANSFERRED FROM MONEY PURCHASE PENSION PLAN. Notwithstanding any provision of the Plan to the contrary, to the extent that any optional form of benefit under the Plan permits a distribution prior to the employee’s retirement, death, Disability, or severance from employment, and prior to Plan termination, the optional form of benefit is not available with respect to benefits attributable to assets (including the post-transfer earnings thereon) and liabilities that are transferred, within the meaning of Section 414(l) of the Internal Revenue Code, to this Plan from a money purchase pension plan qualified under Section 401(a) of the Internal Revenue Code (other than any portion of those assets and liabilities attributable to voluntary employee contributions). The conversion of a plan from a money purchase pension plan to a profit sharing plan shall be treated as a transfer subject to Code Section 414(l) for the purpose of this Section.

Section 5.18 WRITTEN INSTRUCTION NOT REQUIRED. Any elections made or distributions processed under this Article V may be accomplished through telephonic, electronic or similar instructions in accordance with the rules and procedures established by the Administrative Committee, to the extent they are consistent with the requirements of the Code and ERISA. Notwithstanding the foregoing, however, spousal consents and waivers, to the extent required, may only be granted in writing.

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ARTICLE VI

WITHDRAWALS, DIRECT ROLLOVERS AND WITHHOLDING, LOANS

Section 6.01 HARDSHIP WITHDRAWALS. Subject to the restrictions set forth in Section 5.16, upon the application of any Participant, the Administrative Committee, in accordance with a uniform, nondiscriminatory policy, may permit such Participant to withdraw (a) all or a portion of the vested amounts then credited to his Compensation Deferral Account and Catch-Up Account (excluding all trust earnings credited thereto) and/or (b) such Participant’s interest in his Rollover Account and/or the portion of his Transfer Account attributable to Code Section 401(k) compensation deferrals (except with respect to income and earnings credited thereto) and after-tax contributions, if the withdrawal is necessary due to the immediate and heavy financial need of the Participant.

A. Only distributions made pursuant to conditions arising under the following circumstances shall be conclusively considered to be made on account of immediate and heavy financial need:

(i) Alleviating extraordinary financial hardship arising from deductible medical expenses (within the meaning of Code Section 213(d), determined without regard to whether the expenses exceed 7.5% of adjusted gross income) previously incurred by the Participant or his Spouse, children or other dependents, or necessary for such persons to obtain such care;

(ii) Purchasing real property (excluding mortgage payments) that is to serve as the principal residence of the Participant;

(iii) Expenditures necessary to prevent eviction from the Participant’s principal residence or foreclosure of a mortgage on the same;

(iv) Financing the tuition and related educational fees for the next 12 months of post-secondary education for the Participant, his Spouse, his children or other dependents; or

(v) For Plan Years beginning on and after January 1, 2006, payments for funeral or burial expenses for the Participant’s deceased parent, spouse, child or dependent;

(vi) For Plan Years beginning on and after January 1, 2006, expenses to repair damage to the Participant’s principal residence that would qualify for a casualty loss under Code Section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income); or

(vii) Any other reason deemed to be an immediate and heavy financial need by the Secretary of the Treasury.

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For the purpose of the foregoing, a dependent is an individual defined in Code Section 152 and, for taxable years beginning on or after January 1, 2005, without regard to Code Section 152(d)(1)(b).

B. A distribution will be considered to be necessary to satisfy an immediate and heavy financial need of the Participant only if:

(i) The Participant has obtained all distributions other than hardship distributions, and all nontaxable loans, currently available under all plans maintained by the Employer, or by borrowing from commercial sources on reasonable commercial terms in an amount sufficient to satisfy the need;

(ii) All plans maintained by the Employer provide that the Participant’s Compensation Deferrals or other Participant contributions will be suspended for 6 months after the receipt of the hardship distribution (which this Plan hereby so provides);

(iii) The distribution is not in excess of the amount necessary to satisfy the immediate and heavy financial need, including any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution; and

(iv) The need cannot be satisfied through reimbursement, compensation by insurance, liquidation of the Participant’s assets or the cessation of Compensation Deferrals, Catch-Up Contributions or other Participant contributions.

A Participant making an application under this Section 6.01 shall have the burden of presenting to the Administrative Committee evidence of such need, and the Administrative Committee shall not permit withdrawal under this Section without first receiving such evidence. If a Participant’s application for a hardship withdrawal is approved, the Trustee shall make payment of the approved amount of the hardship withdrawal to the Participant.

C. If a Participant is a qualified individual pursuant to § 101 of the Katrina Emergency Relief Act of 2005, as amended and extended by Internal Revenue Service Notices 2005-92 and, 2005-84, and Announcement 2005-70, the Plan may make a hardship distribution that is intended to constitute a qualified hurricane distribution as defined in Code § 1400Q(a)(4)(A) to such Participant in accordance with the Plan’s standard hardship distribution procedures and without regard to the post-distribution contribution restriction enumerated in Section 6.01.B.(ii) above. The maximum amount of distributions pursuant to this Section 6.01.C with respect to a qualified individual shall not exceed $100,000.

Section 6.02 SPECIAL WITHDRAWAL RULES APPLICABLE TO ROLLOVER CONTRIBUTIONS. A Participant who maintains a Rollover Account in the Plan may elect to make withdrawals (in cash or, if applicable, in Shares) from his Rollover Account. Any election to begin, change or cease withdrawals shall be made in accordance with procedures established by the Administrative Committee or in such other manner as permitted by the

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Administrative Committee. Payment of amounts so requested shall be made within an administratively reasonable period of time after the withdrawal has been requested. The Administrative Committee may establish other rules of uniform applicability regarding the timing of and procedures for such withdrawals.

Section 6.03 SPECIAL WITHDRAWAL RULES APPLICABLE TO TRANSFER ACCOUNTS. Notwithstanding any other Plan provision to the contrary, if the Internal Revenue Service requires distribution to be made (or offered) with respect to any or all amounts held on behalf of a Participant with respect to a predecessor or transferor plan, as a condition of preserving the tax-qualified status of this Plan or of said predecessor or transferor plan, or if a court of competent jurisdiction issues an order or decree in respect of the Plan or its fiduciaries that is determined under relevant federal law to be enforceable, and that compels the distribution of a Participant’s Plan interest, the Administrative Committee will be entitled to direct the prompt distribution (or offer of distribution) of such amounts.

Section 6.04 WITHDRAWALS UPON ATTAINMENT OF AGE 59 ¹/2. Subject to the consent requirements of Schedule III, if applicable, a Participant who has attained age 59 ¹/2 may elect to make withdrawals (in cash or, if applicable, in Shares) from the Nonforfeitable portion of his Account in the Plan that is not subject to the restrictions set forth in Section 5.16. Any election to begin, change or cease withdrawals shall be made in accordance with procedures established by the Administrative Committee or in such other manner as permitted by the Administrative Committee. Payment of amounts so requested shall be made within an administratively reasonable period of time after the withdrawal has been requested. The Administrative Committee may establish other rules of uniform applicability regarding the timing of and procedures for such withdrawals.

Section 6.05 DIRECT ROLLOVER AND WITHHOLDING RULES.

A. In General. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee’s election under this Section, a Distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. The Plan Administrator may establish rules and procedures governing the processing of Direct Rollovers and limiting the amount or number of such Direct Rollovers in accordance with applicable Treasury Regulations. Distributions not transferred to an Eligible Retirement Plan in a Direct Rollover shall be subject to income tax withholding as provided under the Code and applicable state and local laws, if any.

B. Definitions

(i) “Eligible Rollover Distribution.” An Eligible Rollover Distribution is any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: (a) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for life (or life expectancy) of the Distributee or the joint lives (or joint

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life expectancies) of the Distributee and the Distributee’s designated beneficiary, or for a specified period of ten years of more; (b) any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; (c) any hardship distribution received on and after January 1, 2002 (limited to hardship amounts described in Code Sections 401(k)(2)(B)(i)(IV) or 403(b)(11)(B) received from January 1, 2000 to December 31, 2001); (d) any loan that is treated as a distribution under Code Section 72(p) and not excepted by Code Section 72(p)(2), or a loan that is a deemed distribution; and (e) any corrective distribution provided under Sections IV.02., IV.03.C., IV.05. and IV.08. of Schedule IV to the Plan, if applicable. Notwithstanding the foregoing, any portion of a distribution that consists of after-tax employee contributions that are not includible in gross income may be transferred only to an individual retirement account or annuity described in Code Sections 401(a) or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution that is includible in gross income and the portion of such distribution that is not so includible.

(ii) “Eligible Retirement Plan.” An Eligible Retirement Plan is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), a qualified trust described in Code Section 401(a) and, effective January 1, 2002, an annuity contract described in Code Section 403(b) and an eligible plan under Code Section 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and that agrees to separately account for amounts transferred into such plan from this Plan, and that accepts the Distributee’s Eligible Rollover Distribution. This definition of Eligible Retirement Plan shall also apply in the case of a distribution to a surviving Spouse, or to a Spouse or former Spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p).

(iii) “Distributee.” A Distributee includes an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving Spouse and the Employee’s or former Employee’s Spouse or former Spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are Distributees with regard to the interest of the Spouse or former Spouse.

(iv) “Direct Rollover.” A Direct Rollover is a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

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Section 6.06 LOANS TO PARTICIPANTS. Loans may be granted to any Participant under the Plan in accordance with applicable rules under the Code and ERISA, and the provisions of this Section.

A. General Rules. The Administrative Committee shall establish the procedures a Participant must follow to request a loan from his Nonforfeitable Account Balance under the Plan. Loans shall be made available to all Participants on a reasonably equivalent basis; provided, however, that loans will not be made available to Former Participants in any event.

In no event will the total of any outstanding loan balances made to any Participant, including any interest accrued thereon, when aggregated with corresponding loan balances of the Participant under any other plans of the Employer or any Affiliate, exceed the lesser of (i) or (ii), below:

(i) $50,000, reduced by the excess (if any) of the highest outstanding balance of such loans during the one-year period ending on the day before the date any such loan is made over the outstanding balance of such loans on the date any such loan is made; or

(ii) One-half of the value of the vested portion of the Participant’s Account. For purposes of this Section, the value of a Participant’s Account shall be determined as of the Valuation Date coinciding with or next preceding the date on which a properly completed loan request is received by the Administrative Committee (or its delegate) or the Trustee, as applicable.

The minimum amount of any loan shall be $1,000.

B. Term of Loan. The term of any loan shall be determined by mutual agreement between the Administrative Committee or Trustee and the Participant. Every Participant who is granted a loan shall receive a statement of the charges and interest rates involved in each loan transaction and periodic statements reflecting the current loan balance and all transactions with respect to that loan to date. Except for loans used to acquire any dwelling unit that within a reasonable time (determined at the time the loan is made) is to be used as the principal residence of the Participant, the term of any loan shall not exceed five years. The term of any loan that within a reasonable time (determined at the time the loan is made) is to be used as the principal residence of the Participant shall not exceed 15 years. All loans shall be amortized in level payments made not less frequently than quarterly over the term of the loan, or in accordance with other procedures established by the Employer or the Administrative Committee.

C. Security. Each loan made hereunder shall be evidenced by a credit agreement with, or a note payable to the order of, the Trustee and shall be secured by adequate collateral. Notwithstanding the foregoing sentence, no more than one-half of the vested portion of the Participant’s Nonforfeitable Account Balance (determined as of the Valuation Date coinciding with or next preceding the date on which the loan is made) shall be used to secure any loan.

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D. Interest. Each Participant loan shall be considered an investment of the Trust, and interest shall be charged thereon at a reasonable rate established by, or in accordance with procedures approved by, the Administrative Committee commensurate with the interest rates then being charged by persons in the business of lending money under similar circumstances. Notwithstanding the foregoing sentence, if necessary, the Administrative Committee will reduce the interest rate of an outstanding Participant loan to 6% during a period of qualified military leave as defined in Code Section 414(u)(5), to the extent required by the Soldiers’ and Sailors’ Civil Relief Act of 1940. Participant loans under this Section will be considered the directed investment of the Participant requesting such loan, and interest paid on such loan will be allocated to the Account of the Participant-borrower.

E. Repayment Terms.

(i) Generally. The terms and conditions of each loan shall be determined by mutual agreement between the Administrative Committee or Trustee and the Participant. The Administrative Committee shall take all necessary actions to ensure that each loan is repaid on schedule by its maturity date, including requiring repayment of the loan by payroll deduction whenever possible. However, notwithstanding the foregoing provisions of this Section 6.06.E, if a Participant is terminated from employment under the terms of the designated reduction in force, the Participant may continue to make loan payments on any loan balance outstanding at the time of such termination according to the procedures adopted by the Administrative Committee.

(ii) Suspension of Loan Payments during Qualified Military Leave. Loan payments shall be suspended during a period of “qualified military service,” as defined in Code §414(u)(5). The duration of such period of service shall not be taken into account in determining the maximum permissible term of the loan under Code §72(p) and the regulations promulgated thereunder. Following the Participant’s timely reemployment after a period of qualified military service, loan payments shall resume at an amount no less than required by the terms of the original loan, and at a frequency such that the loan will be repaid in full during a period that is no longer than the “latest permissible term of the loan” (defined as latest date permitted under Code §72(p)(2)(B) plus the period of suspension due to such military service).

F. Spousal Consent. Any Participant whose Account is subject to the annuity provisions set forth in Schedule III must obtain the consent of his Spouse, if any, within the 90-day period before the time the Participant’s vested Account

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is used as collateral security for the loan, unless not otherwise required by law. Such consent must be in writing, must acknowledge the effect of the loan, and must be witnessed by a Plan representative or notary public. A new consent is required if the Account balance is used for any increase in the amount of security.

G. Restrictions on Loans. No Participant shall have more than two loans under this Section 6.06 outstanding at the same time. However, if a Participant who previously participated in one of the Merging Plans that permitted multiple loans has more than two loans outstanding or if a Participant in a plan that subsequently merges into this Plan has more than two loans outstanding under such merging plan at the date of merger, such Participant may, in accordance with the terms of such loans, continue to have more than two such loans without violating this provision.

H. Nondiscrimination. Loans will not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Employees.

I. Default. Failure to make a payment within 90 days of the date payment is due will generally constitute a default, unless loan procedures adopted pursuant to this Section 6.06 and applicable law do not so require. The Administrative Committee may establish additional rules and procedures for handling loan defaults, including, but not limited to, restrictions on future borrowing.

J. Procedure. The Administrative Committee will establish nondiscriminatory policies and procedures to administer Participant loans.

Section 6.07 WITHDRAWALS CONSTITUTING QUALIFIED HURRICANE DISTRIBUTIONS. Notwithstanding any other provision in the Plan to the contrary, the Plan Administrator may make a distribution to a Participant who is a qualified individual pursuant to § 101 of the Katrina Emergency Relief Act of 2005, as amended and extended by Internal Revenue Service Notices 2005-92 and 2005-84 and Announcement 2005-70, that is intended to constitute a qualified hurricane distribution as defined in Code § 1400Q(a)(4)(A). The maximum amount of distributions pursuant to this Section 6.07.C with respect to a qualified individual shall not exceed $100,000. Qualified hurricane distributions under this Section 6.07 of the Plan shall be entitled to favorable tax treatment under Code § 72, shall be allotted ratable income inclusion over three years and shall be eligible for tax-free rollover to an eligible retirement plan within three years of the date of the qualified hurricane distribution.

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ARTICLE VII

EMPLOYER ADMINISTRATIVE PROVISIONS

Section 7.01 ESTABLISHMENT OF TRUST. The Company shall execute a Trust Agreement with one or more persons or parties who shall serve as the Trustee. The Trustee so selected shall serve as the Trustee until otherwise replaced or said Trust Agreement is terminated. The Company may, from time to time, enter into such further agreements with the Trustee or other parties and make such amendments to said Trust Agreement as it may deem necessary or desirable to carry out this Plan. Any and all rights or benefits that may accrue to a person under this Plan shall be subject to all the terms and provisions of the Trust Agreement.

Section 7.02 INFORMATION TO EMPLOYER AND COMMITTEE. Each Employer shall supply current information to the Benefits Group as to the name, date of birth, date of employment, annual compensation, leaves of absence, Years of Service, and date of termination of employment of each Employee who is, or who will be eligible to become, a Participant under the Plan, together with any other information that the Benefits Group considers necessary. The Employer’s records as to the current information that the Employer furnishes to the Benefits Group shall be conclusive as to all persons. Similarly, each Employer shall supply such information to the Administrative Committee or the Policy Committee, as applicable, which Committees are referred to herein collectively or individually as the “Committee.”

Section 7.03 NO LIABILITY. The Employer assumes no obligation or responsibility to any of its Employees, Participants or Beneficiaries for any act of, or failure to act, on the part of any Committee or the Trustee.

Section 7.04 INDEMNITY OF COMMITTEE. Each Employer indemnifies and saves harmless the members of each Committee, any committee of the Board and each of them individually, from and against any and all loss (including reasonable attorneys’ fees and costs of defense) resulting from liability to which any such Committee, or the members of a Committee, may be subjected by reason of any act or conduct (except willful misconduct or gross negligence) in their official capacities in the administration of the Trust or this Plan or both, including all expenses reasonably incurred in their defense, in case the Employer fails to provide such defense. The indemnification provisions of this Section 7.04 shall not relieve any Committee member from any liability he may have under ERISA for breach of a fiduciary duty to the extent such indemnification is prohibited by ERISA. Furthermore, the Committee members and the Employer may execute a letter agreement further delineating the indemnification agreement of this Section 7.04, provided the letter agreement must be consistent with and shall not violate ERISA.

Section 7.05 INVESTMENT FUNDS. The Administrative Committee and the Trustee shall establish certain investment funds (the “Investment Funds”), rules governing the administration of the Investment Funds, and procedures for directing the investment of Participant Accounts among the Investment Funds. The Trustee shall invest and reinvest the principal and income of each Account in the Trust Fund as required by ERISA and as directed by Participants. The Administrative Committee and the Employer reserve the right

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to change the investment options available under the Plan and the rules governing investment designations at any time and from time to time.

Notwithstanding the foregoing, the Trustee is specifically authorized to maintain the “Employer Common Stock Fund” as one of the Investment Funds available to Participants under the Plan. The Employer Common Stock Fund shall consist of stock of the Company and cash or cash equivalents needed to meet obligations of such fund or for the purchase of stock of the Company. One of the purposes of the Plan is to provide Participants with ownership interests in the Company through the purchase of common shares of the Company. To the extent practicable, all available assets of the Employer Common Stock Fund shall be used to purchase Shares, which shall be held by the Trustee and allocated to Participant Accounts until distribution in kind or sale for distribution of cash to Participants or Beneficiaries or until disposition is required to implement changes in investment designations. In addition to the Employer Common Stock Fund, all or any portion of the remaining Trust Fund may consist of Shares. The Trustee may acquire or dispose of Shares as necessary to implement Participant directions and may net transactions within the Trust Fund. In addition, when acquiring Shares, the Trustee may acquire Shares directly from the Company or on the open market as necessary to effect Participant directions. In either case, the price paid for such Shares shall not exceed the fair market value of the Shares. The fair market value of the Shares acquired directly from the Company shall mean the mean between the high and low bid and ask prices as reported by the New York Stock Exchange on the date of such transaction.

Each Investment Fund (other than the Employer Common Stock Fund) shall be established by the Trustee at the direction or with the concurrence of the Administrative Committee. Investment Funds may, as so determined, consist of preferred and common stocks, bonds, debentures, negotiable instruments and evidences of indebtedness of every kind and form, or in securities and units of participation issued by companies registered under the Investment Companies Act of 1940, master limited partnerships or real estate investment trusts, or in any common or collective fund established or maintained for the collective investment and reinvestment of assets of pension and profit sharing trusts that are exempt from federal income taxation under the Code, or any combination of the foregoing. The Trustee shall hold, manage, administer, invest, reinvest, account for and otherwise deal with the Trust Fund and each separate Investment Fund as provided in the Trust Agreement.

Anything in the Plan or Trust Agreement to the contrary notwithstanding, the Trustee shall not sell, alienate, encumber, pledge, transfer or otherwise dispose of, or tender or withdraw, any Shares held by it under the Trust Agreement, except (i) as specifically provided for in the Plan or (ii) in the case of a “Tender Offer” as directed in writing by a Participant (or Beneficiary, where applicable) on a form provided or approved by the Administrative Committee and delivered to the Trustee. For the purposes hereof, a Tender Offer shall mean any offer for, or request for or invitation for tenders of, or offer to purchase or acquire, any Shares that is directed generally to shareholders of the Employer or any transaction that may be defined as a Tender Offer under rules or regulations promulgated by the Securities and Exchange Commission. To the extent that any money or other property is received by the Trustee as a result of a tender of Shares not prohibited by the preceding

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sentence, such money or property shall be allocated to such other Investment Fund(s) as directed by the Participants in whose Account the Shares so tendered were held.

ARTICLE VIII

PARTICIPANT ADMINISTRATIVE PROVISIONS

Section 8.01 PERSONAL DATA TO BENEFITS GROUP. Each Participant and each Beneficiary of a deceased Participant must furnish to the Benefits Group such evidence, data or information as the Benefits Group considers necessary or desirable for the purpose of administering the Plan. The provisions of this Plan are effective for the benefit of each Participant upon the condition precedent that each Participant will furnish promptly full, true and complete evidence, data and information when requested by the Benefits Group, provided the Benefits Group shall advise each Participant of the effect of his failure to comply with its request.

Section 8.02 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of a deceased Participant shall file with the Benefits Group, from time to time, in writing, or otherwise notify the Benefits Group (in accordance with its rules and procedures) of, his post office address and any change of post office address. Any communication, statement or notice addressed to a Participant, or Beneficiary, at his last post office address filed with the Benefits Group, or as shown on the records of the Employer, shall bind the Participant, or Beneficiary, for all purposes of this Plan.

Section 8.03 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p) relating to qualified domestic relations orders, neither a Participant nor a Beneficiary shall anticipate, assign or alienate (either at law or in equity) any benefit provided under the Plan, and the Trustee shall not recognize any such anticipation, assignment or alienation. Furthermore, a benefit under the Plan is not subject to attachment, garnishment, levy, execution or other legal or equitable process.

Section 8.04 NOTICE OF CHANGE IN TERMS. The Employer, within the time prescribed by ERISA and the applicable regulations, shall furnish all Participants and Beneficiaries a summary description of any material amendment to the Plan or notice of discontinuance of the Plan and all other information required by ERISA to be furnished without charge.

Section 8.05 PARTICIPANT DIRECTION OF INVESTMENT. The Administrative Committee and the Trustee shall establish rules governing the administration of Investment Funds and procedures for Participant direction of investment, including rules governing the timing, frequency and manner of making investment elections. The Administrative Committee and the Employer reserve the right to change the investment options available under the Plan and rules governing investment designations from time to time. Nothing in this or any other provision of the Plan shall require the Trustee, the Employer or the Administrative Committee to implement Participant investment directions or changes in such directions, or to establish any procedures, other than on an administratively practicable basis, as determined by the Employer in its discretion.

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Each Participant shall, in accordance with procedures established by the Administrative Committee and the Trustee, direct that his Account and contributions thereto be invested and reinvested in any one or more of the Investment Funds. The investment of any such monies shall be subject to such restrictions as the Administrative Committee may determine, in its sole discretion, to be advisable or necessary under the circumstances. Moreover, in accordance with procedures established by the Trustee and agreed to by the Administrative Committee or Benefits Group, Participants may, when administratively practicable, be permitted to change their current and prospective investment designations through telephone, “on-line” or similar instructions to the Trustee or its authorized agent on a frequency established under such procedures, as in effect from time to time.

The exercise of investment direction by a Participant will not cause the Participant to be a fiduciary solely by reason of such exercise, and neither the Trustee nor any other fiduciary of this Plan will be liable for any loss or any breach that results from the exercise of investment direction by the Participant. The investment designation procedures established under the Plan shall be and are intended to be in compliance with the requirements of ERISA Section 404(c) and the regulations thereunder.

In no event shall Participants be permitted to direct that any portion of their Accounts and/or any additional contributions be invested in the Employer Common Stock Fund until Cardinal Health, Inc., the Plan, the Trustee and all other relevant parties have fully complied with such requirements, including, but not limited to, federal and state securities laws, as the Administrative Committee has determined to be applicable. The Administrative Committee may restrict the ability of any person covered under Section 16 of the Securities Exchange Act of 1934, as amended, or any other corporate insider of the Employer to direct the investment of his Account in the Employer Common Stock Fund. Notwithstanding any provision to the contrary, the Administrative Committee and the Trustee may, in their sole discretion and where the terms of any relevant investment contracts, regulated investment companies or pooled or group trusts so require, impose special terms, conditions and restrictions upon a Participant’s right to direct the investment in, or transfer into or out of, such contracts, companies or trusts, or the timing or terms applicable to such transaction.

Section 8.06 CHANGE OF INVESTMENT DESIGNATIONS. Each Participant who is entitled to direct the investment of additional contributions to be allocated to his Account in accordance with Section 8.05 hereof may select how such additional contributions are to be invested. Such investment directions shall be made in accordance with applicable rules or procedures established by the Trustee and the Benefits Group.

Each Participant may prospectively re-elect how those amounts then held in his Account are to be reinvested in the various Investment Funds until otherwise changed or modified. Such investment directions shall be made in accordance with applicable rules or procedures established by the Trustee and the Benefits Group.

Notwithstanding the foregoing to the contrary, the Administrative Committee may, in its sole discretion and where the terms of any relevant investment contract, regulated investment companies or pooled or group trusts so require, or where ERISA fiduciary obligations and considerations so merit, impose special terms, conditions and restrictions upon a Participant’s right to direct the investment in, or transfer into or out of, such contracts, companies or trusts.

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Section 8.07 LITIGATION AGAINST THE TRUST. If any legal action filed against the Trustee, the Employer as Plan Administrator, or any Committee, or against any member or members of any Committee, by or on behalf of any Participant or Beneficiary, results adversely to the Participant or to the Beneficiary, the Trustee shall reimburse itself, the Employer or any Committee, or any member or members of any Committee, all costs and fees expended by it or them by surcharging all costs and fees against the sums payable under the Plan to the Participant or to the Beneficiary, but only to the extent a court of competent jurisdiction specifically authorizes and directs any such surcharges and only to the extent Code Section 401(a)(13) does not prohibit any such surcharges.

Section 8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any Beneficiary may examine copies of the Plan, the Trust, the Plan description, the latest annual report, any bargaining agreement, contract or any other instrument under which the Plan was established or is operated. The Company will maintain all of the items listed in this Section 8.08 in its offices, or in such other place or places as it may designate from time to time in order to comply with the regulations issued under ERISA, for examination during reasonable business hours. Upon the written request of a Participant or Beneficiary, the Employer shall furnish him with a copy of any item listed in this Section 8.08. The Employer may make a reasonable charge to the requesting person for the copy so furnished.

Section 8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. The Employer shall provide adequate notice in writing to any Participant or to any Beneficiary (the “Claimant”) whose claim for benefits under the Plan has been denied. The Employer’s notice to the Claimant shall set forth:

(i) The specific reason for the denial;

(ii) Specific references to pertinent Plan provisions on which the denial is based;

(iii) A description of any additional material and information needed for the Claimant to perfect his claim and an explanation of why the material or information is needed;

(iv) That any appeal the Claimant wishes to make of the adverse determination must be in writing to the Administrative Committee within 90 days after receipt of the notice of denial of benefits. The notice must further advise the Claimant that his failure to appeal the action to the Administrative Committee in writing within the 90-day period will render the determination final, binding and conclusive; and

(v) An explanation that, if an adverse determination is made on review, the Claimant has the right to bring civil action under Section 502(a) of ERISA.

If the Claimant appeals to the Administrative Committee, he, or his duly authorized representative, may submit, in writing, whatever issues and comments he, or his duly authorized representative, feels are pertinent. The Claimant, or his duly authorized

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representative shall be provided, upon request and free of charge, reasonable access to and copies of all documents and other information relevant to the Claimant’s claim for benefits. The Administrative Committee shall re-examine all facts related to the appeal and make a final determination as to whether the denial of benefits is justified under the circumstances. The Administrative Committee shall advise the Claimant of its decision within 60 days of the Claimant’s written request for review, unless special circumstances (such as a hearing) would make the rendering of a decision within the 60-day limit unfeasible, but in no event shall the Administrative Committee render a decision respecting a denial for a claim for benefits later than 120 days after its receipt of a request for review.

The Employer’s notice of denial of benefits shall identify the name of each member of the Administrative Committee and the name and address of the Administrative Committee member to whom the Claimant may forward his appeal.

Section 8.10 CLAIMS INVOLVING BENEFITS RELATED TO DISABILITY. The provisions of this Section 8.10 are effective for Disability claims filed on or after July 1, 2002. Notwithstanding the provisions of Section 8.10, the Benefits Group and Administrative Committee shall comply with and follow the applicable Department of Labor Regulations for claims involving a determination of Disability or benefits related to Disability, including, but not limited to:

A. The Benefits Group shall advise a Claimant of the Plan’s adverse benefit determination within a reasonable period of time, but not later than 45 days after receipt of the claim by the Plan. If the Benefits Group determines that due to matters beyond control of the Plan, such decision cannot be reached within 45 days, an additional 30 days may be provided and the Benefits Group shall notify the Claimant of the extension prior to the end of the original 45-day period. The 30-day extension may be extended for a second 30-day period, if before the end of the original extension, the Administrative Committee determines that due to circumstances beyond the control of the Plan, a decision cannot be rendered within the extension period.

B. Claimants shall be provided at least 180 days following receipt of benefit denial in which to appeal such adverse determination.

C. The Administrative Committee shall review the Claimant’s appeal and notify the Claimant of its determination within a reasonable period of time, but not later than 45 days after receipt of the Claimant’s request for review. Should the Administrative Committee determine that special circumstances (such as the need to hold a hearing) require an extension of time for processing the appeal, the Administrative Committee shall notify the Claimant of the extension before the end of the initial 45 day period. Such an extension, if required, shall not exceed 45 days.

Section 8.11 USE OF ALTERNATIVE MEDIA. The Administrative Committee (or, in the absence of an Administrative Committee, the Plan Administrator) may include in any process or procedure for administering the Plan, the use of alternative media, including, but not limited to, telephonic, facsimile, computer or other such electronic means as available. Use of such alternative media shall be deemed to satisfy any Plan provision requiring a “written” document or an instrument to be signed “in writing” to the extent permissible under the Code, ERISA and applicable regulations.

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ARTICLE IX

ADMINISTRATION OF THE PLAN

Section 9.01 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST ADMINISTRATION. The fiduciaries shall have only those powers, duties, responsibilities and obligations as are specifically given to them under this Plan and the Trust. The Employers shall have the sole responsibility for making the contributions provided for under Article III. The Company shall have the sole authority to appoint and remove the Trustee and members of any Committee, and to amend or terminate, in whole or in part, this Plan or the Trust. The Company shall have the final responsibility for the administration of the Plan, which responsibility is specifically described in this Plan and the Trust, and shall be the “Plan Administrator” and the named fiduciary. The Administrative and Policy Committees shall have the specific delegated powers and duties described in the further provisions of this Article IX and such further powers and duties as hereinafter may be delegated to them by the Employer. The Trustee shall have the sole responsibility for the administration of the Trust and the management of the assets held under the Trust, all as specifically provided in the Trust. Each fiduciary warrants that any directions given, information furnished, or action taken by it shall be in accordance with the provisions of this Plan and the Trust, authorizing or providing for such direction, information or action. Furthermore, each fiduciary may rely upon any such direction, information or action of another fiduciary as being proper under this Plan and the Trust, and is not required under this Plan or the Trust to inquire into the propriety of any such direction, information or action. It is intended under this Plan and the Trust that each fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations under this Plan and the Trust and shall not be responsible for any act or failure to act of another fiduciary. No fiduciary guarantees the Trust Fund in any manner against investment loss or depreciation in asset value.

Section 9.02 APPOINTMENT OF COMMITTEE. One or more Committees consisting of three or more persons shall be appointed by and serve at the pleasure of the Human Resources and Compensation Committee of the Board to assist in the administration of the Plan. In the event of any vacancies on any Committee, the remaining Committee member(s) then in office shall constitute the Committee and shall have full power to act and exercise all powers of the Committee as described in this Article X. All usual and reasonable expenses of a Committee may be paid in whole or in part by the Employer, and any expenses not paid by the Employer shall be paid by the Trustee out of the principal or income of the Trust Fund. Any members of a Committee who are Employees shall not receive compensation with respect to their services for the Committee. As currently constituted, two Committees have been chartered by the Human Resources and Compensation Committee of the Board: the Administrative Committee and the Policy Committee.

Section 9.03 COMMITTEE PROCEDURES. A Committee may act at a meeting or in writing without a meeting. A Committee may elect one of its members as chairperson, appoint a secretary, who may or may not be a Committee member, and advise the Trustee of all relevant actions. The secretary shall keep a record of all meetings and forward all necessary communications to the Employer, or the Trustee, as appropriate and each Committee shall report its activities at least annually to the Human Resources and

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Compensation Committee of the Board. A Committee may adopt such bylaws and regulations as it deems desirable for the conduct of its affairs. All decisions of a Committee shall be made by the vote of the majority then in office, including actions in writing taken without a meeting. A dissenting Committee member who, within a reasonable time after he has knowledge of any action or failure to act by the majority, registers his dissent in writing delivered to the other Committee members, the Employer and the Trustee, shall not be responsible for any such action or failure to act.

Section 9.04 RECORDS AND REPORTS. The Employer (or any Committee if so designated by the Employer) shall exercise such authority and responsibility as it deems appropriate in order to comply with ERISA and governmental regulations issued thereunder relating to records of Participant’s Service, Account balances and the percentage of such Account balances that are Nonforfeitable under the Plan; notifications to Participants; annual registration with the Internal Revenue Service; and annual reports to the Department of Labor.

Section 9.05 OTHER COMMITTEE POWERS AND DUTIES. The Committees shall have one or more of the following powers and duties, as designated in the applicable Committee Charter and Table of Authority:

A. To determine the rights of eligibility of an Employee to participate in the Plan, the value of a Participant’s Account, and the Nonforfeitable percentage of each Participant’s Account;

B. To adopt rules of procedure and regulations necessary for the proper and efficient administration of the Plan, provided the rules are not inconsistent with the terms of this Plan and the Trust;

C. To construe and enforce the terms of the Plan and the rules and regulations it adopts, including the discretionary authority to interpret the Plan documents, documents related to the Plan’s operation, and findings of fact;

D. To direct the Trustee with respect to the crediting and distribution of the Trust;

E. To review and render decisions respecting a claim for (or denial of a claim for) a benefit under the Plan;

F. To furnish the Employer with information that the Employer may require for tax or other purposes;

G. To engage the service of agents whom it may deem advisable to assist it with the performance of its duties; and

H. To engage the services of an Investment Manager or Investment Managers (as defined in ERISA Section 3(38)), each of whom shall have full power and authority to manage, acquire or dispose (or direct the Trustee with respect to acquisition or disposition) of any Plan asset under its control.

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I. As permitted by the Employee Plans Compliance Resolution System (“EPCRS”) issued by the Internal Revenue Service (“IRS”), as in effect from time to time, (i) to voluntarily correct any Plan qualification failure, including, but not limited to, failures involving Plan operation, impermissible discrimination in favor of highly compensated employees, the specific terms of the Plan document, or demographic failures; (ii) implement any correction methodology permitted under EPCRS; and (iii) negotiate the terms of a compliance statement or a closing agreement proposed by the IRS with respect to correction of a plan qualification failure.

Section 9.06 RULES AND DECISIONS. A Committee may adopt such rules as it deems necessary, desirable or appropriate. All rules and decisions of any Committee shall be uniformly and consistently applied to all Participants in similar circumstances. When making a determination or calculation, a Committee shall be entitled to rely upon information furnished by a Participant or Beneficiary, the Employer, the legal counsel of the Employer, or the Trustee.

Section 9.07 APPLICATION AND FORMS FOR BENEFITS. The Administrative Committee may require a Participant or Beneficiary to complete and file with the Benefits Group and/or the Trustee an application for a benefit and all other forms approved by the Benefits Group, and to furnish all pertinent information requested by the Benefits Group and Trustee. The Benefits Group and Trustee may rely upon all such information so furnished to it, including the Participant’s or Beneficiary’s current mailing address.

Section 9.08 AUTHORIZATION OF BENEFIT PAYMENTS. The Administrative Committee shall issue directions to the Trustee concerning all benefits that are to be paid from the Trust Fund pursuant to the provisions of the Plan, or establish other procedures on which the Trustee may act, and warrants that all such directions are in accordance with this Plan.

Section 9.09 FUNDING POLICY. The Administrative Committee shall, from time to time, review all pertinent Employee information and Plan data in order to establish the funding policy of the Plan and to determine the appropriate methods of carrying out the Plan’s objectives. The Administrative Committee or its delegate shall communicate periodically, as it deems appropriate, to the Trustee and to any Plan Investment Manager, the Plan’s short-term and long-term financial needs so that investment policy can be coordinated with Plan financial requirements.

Section 9.10 FIDUCIARY DUTIES. In performing their duties, all fiduciaries with respect to the Plan shall act solely in the interest of the Participants and their Beneficiaries, and:

A. For the exclusive purpose of providing benefits to the Participants and their Beneficiaries;

B. With the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims;

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C. To the extent a fiduciary possesses and exercises investment responsibilities, by diversifying the investments of the Trust Fund so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and

D. In accordance with the documents and instruments governing the Plan insofar as such documents and instruments are consistent with the provisions of Title I of ERISA.

Section 9.11 ALLOCATION OR DELEGATION OF DUTIES AND RESPONSIBILITIES. In furtherance of their duties and responsibilities under the Plan, the Board, the Human Resources and Compensation Committee of the Board, or a designated Committee may, subject always to the requirements of Section 9.10:

A. Employ agents to carry out nonfiduciary responsibilities;

B. Employ agents to carry out fiduciary responsibilities (other than trustee responsibilities as defined in Section 405(c)(3) of ERISA);

C. Consult with counsel, who may be of counsel to the Company; and

D. Provide for the allocation of fiduciary responsibilities (other than trustee responsibilities as defined in Section 405(c)(3) of ERISA) between the members of the Board, in the case of the Board, and among the members of any Committee, in the case of any Committee.

Section 9.12 PROCEDURE FOR THE ALLOCATION OR DELEGATION OF FIDUCIARY DUTIES. Any action described in subsections B or D of Section 9.11 may be taken by a Committee or the Board only in accordance with the following procedure:

A. Such action shall be taken by a majority of the Committee or by the Board, as the case may be, in a resolution approved by a majority of such Committee or by a majority of the Board.

B. The vote cast by each member of the Committee or the Board for or against the adoption of such resolution shall be recorded and made a part of the written record of the Committee’s or the Board’s proceedings.

C. Any delegation of fiduciary responsibilities or any allocation of fiduciary responsibilities among members of the Committee or the Board may be modified or rescinded by the Committee or the Board according to the procedure set forth in subsections A and B of this Section 9.12.

Section 9.13 SEPARATE ACCOUNTING. The amounts in a Participant’s Compensation Deferral Account, Safe Harbor Matching Account and (if applicable) his Qualified Matching Contribution Account and Qualified Non-elective Contribution Account

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shall at all times be separately accounted for from amounts in a Participant’s Non-Safe Harbor Matching Accounts, Employer Contributions Account, Special Contributions Account, Rollover Account, Transfer Account(s) and Transition Contribution Accounts and other contribution accounts, if any. Amounts credited to such subaccounts shall be allocated among the Participant’s designated investments on a reasonable pro rata basis, in accordance with the valuation procedures of the Trustee and the Investment Funds. The Trustee and the Administrative Committee shall also establish uniform procedures that they may change from time to time, for the purpose of adjusting the subaccounts of a Participant’s Account for withdrawals, loans, distributions and contributions. Gains, losses, withdrawals, distributions, forfeitures and other credits or charges may be separately allocated among such subaccounts on a reasonable and consistent basis in accordance with such procedures.

Section 9.14 VALUE OF PARTICIPANT’S ACCOUNT. The value of each Participant’s Account shall be based on its fair market value on the appropriate Valuation Date. A valuation shall occur at least once every Plan Year, and otherwise in accordance with the terms of the Trust and administratively practicable procedures approved by the Administrative Committee. Periodically, on a frequency determined by the Administrative Committee and the Trustee, the Participant will receive a statement showing the transaction activity and value of his Account as of a date set forth in the statement.

Section 9.15 REGISTRATION AND VOTING OF EMPLOYER COMMON STOCK. All Shares acquired by the Trustee shall be held in the possession of the Trustee until disposed of pursuant to the provisions of the Plan or the Trust Agreement. Such Shares may be registered in the name of the Trustee or its nominee. Before each annual or special meeting of the Employer’s shareholders, the Trustee shall send to each Participant a copy of the proxy solicitation material therefor, together with a form requesting confidential instructions to the Trustee on how to vote the Shares credited to his Account. Upon receipt of such instructions the Trustee shall vote the Shares as instructed. Any Shares held in Participants’ Accounts, as to which the Trustee does not receive instructions, shall be voted in proportion to the voting instructions the Trustee has actually received in respect of Shares, unless the Trustee determines that to do so is not prudent, or the Trust provides otherwise.

Section 9.16 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting Date of each Plan Year, but within the time prescribed by ERISA and the regulations under ERISA, and at such other times as determined by the Administrative Committee in its discretion, a Participant shall be provided a statement reflecting the condition of the Participant’s (or Beneficiary of a deceased Participant) Account in the Trust as of that date and such other information ERISA requires be furnished to the Participant or Beneficiary. No Participant, except a member of an appropriate Committee and its designees, shall have the right to inspect the records reflecting the Account of any other Participant.

Section 9.17 FEES AND EXPENSES FROM FUND. The Trustee shall receive reasonable annual compensation as may be agreed upon from time to time between the Employer and the Trustee. The Trustee shall pay all expenses reasonably incurred by it or by the Employer, a Committee, or other professional advisers or administrators in the administration of the Plan from the Trust Fund unless the Employer pays the expenses. The Administrative Committee shall not treat any fee or expense paid, directly or indirectly, by the Employer as an Employer contribution. No person who is receiving full pay from the Employer shall receive compensation for services from the Trust Fund. Brokerage commissions, transfer taxes, and other charges and expenses in connection with the purchase and sale of securities shall be charged to each Investment Fund and/or Participant’s Account, as applicable. Fees related to investments subject to Participant direction, and other fees resulting from or attributable to expenses incurred in relation to a Participant or Beneficiary or his Account may be charged to his Account to the extent permitted under the Code and ERISA.

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ARTICLE X

TOP HEAVY RULES

Section 10.01 MINIMUM EMPLOYER CONTRIBUTION. If this Plan is “Top Heavy,” as defined below, in any Plan Year, the Plan guarantees a minimum contribution (subject to the provisions of this Article X) of three percent of Compensation for each “Non-Key Employee,” as defined below, who is a Participant employed by the Employer on the Accounting Date of the Plan Year without regard to Hours of Service completed during the Plan Year or to whether he has elected to make Compensation Deferral Contributions under Section 3.04, and who is not a Participant in a Top Heavy defined benefit plan maintained by the Employer. Participants who also participate in a Top Heavy defined benefit plan of the Employer shall receive the required minimum benefit in the defined benefit plan rather than in this Plan. The Plan satisfies the guaranteed minimum contribution for the Non-Key Employee if the Non-Key Employee’s contribution rate is at least equal to the minimum contribution. For purposes of this paragraph, a Non-Key Employee Participant includes any Employee otherwise eligible to participate in the Plan but who is not a Participant because his Compensation does not exceed a specified level.

If the contribution rate for the “Key Employee,” as defined below, with the highest contribution rate is less than three percent, the guaranteed minimum contribution for Non-Key Employees shall equal the highest contribution rate received by a Key Employee. The contribution rate is the sum of Employer contributions (not including Employer contributions to Social Security) and forfeitures allocated to the Participant’s Account for the Plan Year divided by his “Compensation,” as defined below, not in excess of the compensation limitation under Code Section 401(a)(17) for the Plan Year. For purposes of determining the minimum contribution for a Plan Year, the Administrative Committee shall consider contributions made to any plan pursuant to a compensation reduction agreement or similar arrangement as Employer contributions. To determine the contribution rate, the Administrative Committee shall consider all qualified Top Heavy defined contribution plans maintained by the Employer as a single plan.

Notwithstanding the preceding provisions of this Section 10.01, if a defined benefit plan maintained by the Employer that benefits a Key Employee depends on this Plan to satisfy the anti-discrimination rules of Code Section 401(a)(4) or the coverage rules of Code Section 410 (or another plan benefiting the Key Employee so depends on such defined benefit plan), the guaranteed minimum contribution for a Non-Key Employee is three percent of his Compensation regardless of the contribution rate for the Key Employees.

The minimum Employer contribution required (to the extent required to be Nonforfeitable under Section 416(b) of the Code) may not be forfeited under Code Section 411(a)(3)(B) or 411(a)(3)(D).

Section 10.02 ADDITIONAL CONTRIBUTION. If the contribution rate (excluding Compensation Deferral Contributions) for the Plan Year with respect to a Non-Key Employee described in Section 10.01 is less than the minimum contribution, the Employer will increase its contribution for such Employee to the extent necessary so his contribution rate for the Plan Year will equal the guaranteed minimum contribution. Matching Contributions will be taken into account to satisfy the minimum contribution requirement under the Plan, or if the Plan provides that the minimum contribution requirement shall be

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met in another plan, such other plan. Matching Contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Code Section 401(m). The additional contribution shall be allocated to the Account of a Non-Key Employee for whom the Employer makes the contribution.

Section 10.03 DETERMINATION OF TOP HEAVY STATUS. The Plan is “Top Heavy” for a Plan Year if the Top Heavy ratio as of the “Determination Date” exceeds sixty percent (60%). The Top Heavy ratio is a fraction, the numerator of which is the sum of the present value of the Accounts of all Key Employees as of the Determination Date, and the denominator of which is a similar sum determined for all Employees. For purposes of determining the present value of the Accounts for the foregoing fraction, contributions due as of the Determination Date and distributions made for any purpose within the one-year period ending on the Determination Date shall be included. In addition, distributions made within the five-year period ending on the Determination Date shall be included if such distributions were made for reasons other than upon Severance from Employment, death or Disability (e.g., in-service withdrawals); provided, however, that no distribution shall be counted more than once. In addition, the Top Heavy ratio shall be calculated by disregarding the Account (including distributions, if any, of the Account balance) of an individual who has not received credit for at least one Hour of Service with the Employer during the one-year period ending on the Determination Date in such calculation. The Top Heavy ratio, including the extent to which it must take into account distributions, rollovers, and transfers, shall be calculated in accordance with Code Section 416 and the Treasury Regulations thereunder.

If the Employer maintains other qualified plans (including a simplified employee pension plan), this Plan is Top Heavy only if it is part of the Required Aggregation Group, and the Top Heavy ratio for both the Required Aggregation Group and the Permissive Aggregation Group exceeds 60%. The Top Heavy ratio shall be calculated in the same manner as required by the first paragraph of this Section 10.03, taking into account all plans within the Aggregation Group. To the extent distributions to a Participant must be taken into account, the Administrative Committee shall include distributions from a terminated plan that would have been part of the Required Aggregation Group if it were in existence on the Determination Date. The present value of accrued benefits and the other amounts the Administrative Committee must take into account, under defined benefit plans or simplified employee pension plans included within the group, shall be calculated in accordance with the terms of those plans, Code Section 416 and the Treasury Regulations thereunder. If an aggregated plan does not have a valuation date coinciding with the Determination Date, the accrued benefits or Accounts in the aggregated plan shall be valued as of the most recent valuation date falling within the 12-month period ending on the Determination Date. The Top Heavy ratio shall be valued with reference to the Determination Dates that fall within the same calendar year.

The accrued benefit of a Participant other than a Key Employee shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Employer, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional rule of Section 411(b)(1)(C) of the Code.

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Section 10.04 TOP HEAVY VESTING SCHEDULE. For any Plan Year for which the Plan is Top Heavy, as determined in accordance with this Article X, the Participant’s Nonforfeitable percentage of his Employer Contributions, Special Contributions and Non-Safe Harbor Matching Contributions shall be calculated by applying the following schedule, to the extent that such schedule provides for vesting at a rate that is more rapid than the rate otherwise applicable to the Participant’s benefit:

Years of Service	Percent Nonforfeitable
Less than three (3)	0	%
At least three (3) or more	100	%

Section 10.05 DEFINITIONS. For purposes of applying the provisions of this Article X.

A. “Key Employee” means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the Determination Date was an officer of the Employer having annual Compensation greater than $130,000 (as adjusted under Code Section 416(i)(1) for Plan Years beginning after December 31, 2002), a five-percent owner of the Employer, or a one-percent owner of the Employer having annual Compensation of more than $150,000. The constructive ownership rules of Code Section 318 (or the principles of that section, in the case of an unincorporated Employer) will apply to determine ownership in the Employer. The determination of who is a Key Employee shall be made in accordance with Code Section 416(i)(1) and the Treasury Regulations under that Code Section.

B. “Non-Key Employee” is an Employee who does not meet the definition of Key Employee.

C. “Compensation” shall mean the first $200,000 (or such larger amount as the Commissioner of Internal Revenue may prescribe in accordance with Code Section 401(a)(17)) of Compensation as defined in Code Section 415(c)(3), but including amounts contributed by the Employer pursuant to a salary reduction agreement that are excludible from the Employee’s gross income under Section 125, “deemed compensation” under Code Section 125 pursuant to Revenue Ruling 2002-27, Section 132(f)(4), Section 402(a)(8), Section 402(h) or Section 403(b) of the Code.

D. “Required Aggregation Group” means:

(i) Each qualified plan of the Employer in which at least one Key Employee participates at any time during the five Plan Year period ending on the Determination Date; and

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(ii) Any other qualified plan of the Employer that enables a plan described in (i) to meet the requirements of Code Section 401(a)(4) or Code Section 410.

The Required Aggregation Group includes any plan of the Employer that was maintained within the last five years ending on the Determination Date on which a top heaviness determination is being made if such plan would otherwise be part of the Required Aggregation Group for the Plan Year but for the fact it has been terminated.

E. “Permissive Aggregation Group” is the Required Aggregation Group plus any other qualified plans maintained by the Employer, but only if such group would satisfy in the aggregate the requirements of Code Section 401(a)(4) and Code Section 410. The Administrative Committee shall determine which plans to take into account in determining the Permissive Aggregation Group.

F. “Employer” shall mean all the members of a controlled group of corporations (as defined in Code Section 414(b)), of a commonly controlled group of trades or businesses (whether or not incorporated) (as defined in Code Section 414(c)), or an affiliated service group (as defined in Code Section 414(m)), of which the Employer is a part. However, ownership interests in more than one member of a related group shall not be aggregated to determine whether an individual is a Key Employee because of his ownership interest in the Employer.

G. “Determination Date” for any Plan Year is the Accounting Date of the preceding Plan Year or, in the case of the first Plan Year of the Plan, the Accounting Date of that Plan Year.

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ARTICLE XI

MISCELLANEOUS

Section 11.01 EVIDENCE. Anyone required to give evidence under the terms of the Plan may do so by certificate, affidavit, document or other information that the person to act in reliance may consider pertinent, reliable and genuine, and to have been signed, made or presented by the proper party or parties. Any committee, the Benefits Group and the Trustee shall be fully protected in acting and relying upon any evidence described under the immediately preceding sentence.

Section 11.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor any Administrative Committee shall have any obligation or responsibility with respect to any action required by the Plan to be taken by the Employer, any Participant or eligible Employee, nor for the failure of any of the above persons to act or make any payment or contribution, or otherwise to provide any benefit contemplated under this Plan, nor shall the Trustee or any Administrative Committee be required to collect any contribution required under the Plan, or determine the correctness of the amount of any Employer contribution. Neither the Trustee nor any Administrative Committee need inquire into or be responsible for any action or failure to act on the part of the others. Any action required of a corporate Employer shall be by its Board, by the Human Resources and Compensation Committee of the Board, or by its designee.

Section 11.03 FIDUCIARIES NOT INSURERS. The Trustee, the Committee(s), the Plan Administrator and the Employer in no way guarantee the Trust Fund from loss or depreciation. The Employer does not guarantee the payment of any money that may be or becomes due to any person from the Trust Fund. The liability of any Committee and the Trustee to make any payment from the Trust Fund at any time and all times is limited to the then available assets of the Trust.

Section 11.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan may waive the notice, unless the Code or Treasury Regulations require the notice, or ERISA specifically or impliedly prohibits such a waiver.

Section 11.05 SUCCESSORS. The Plan shall be binding upon all persons entitled to benefits under the Plan, their respective heirs and legal representatives, upon the Employer, its successors and assigns, and upon the Trustee, any Committee, the Plan Administrator and their successors.

Section 11.06 WORD USAGE. Words used in the masculine shall apply to the feminine where applicable, and wherever the context of the Plan dictates, the plural shall be read as singular and the singular as the plural.

Section 11.07 HEADINGS. The headings are for reference only. In the event of a conflict between a heading and the content of a section, the content of the section shall control.

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Section 11.08 STATE LAW. Ohio law shall determine all questions arising with respect to the provisions of this agreement except to the extent a federal statute supersedes Ohio law.

Section 11.09 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, and nothing with respect to the establishment of the Trust, any modification or amendment to the Plan or the Trust, the creation of any Account, or the payment of any benefit, shall give any Employee, Employee-Participant or Beneficiary any right to continue employment, or any legal or equitable right against the Employer, or an Employee of the Employer, the Trustee or its agents or employees, or the Plan Administrator. Nothing in the Plan shall be deemed or construed to impair or affect in any manner the right of the Employer, in its discretion, to hire Employees and, with or without cause, to discharge or terminate the service of Employees.

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ARTICLE XII

EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION

Section 12.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the Employer shall have no beneficial interest in any asset of the Trust and no part of any asset in the Trust shall ever revert to or be repaid to the Employer, either directly or indirectly; nor prior to the satisfaction of all liabilities with respect to the Participants and their Beneficiaries under the Plan, shall any part of the corpus or income of the Trust Fund, or any asset of the Trust, be (at any time) used for, or diverted to, purposes other than the exclusive benefit of the Participants or their Beneficiaries.

Section 12.02 AMENDMENT BY EMPLOYER. The Company shall have the right at any time and from time to time:

A. To amend this agreement in any manner it deems necessary or advisable in order to qualify (or maintain qualification of) this Plan and the Trust created under it under the appropriate provisions of the Code; and

B. To amend this agreement in any other manner.

However, no amendment shall authorize or permit any part of the Trust Fund (other than the part required to pay taxes and administration expenses) to be used for or diverted to purposes other than for the exclusive benefit of the Participants or their Beneficiaries or estates. No amendment shall cause or permit any portion of the Trust Fund to revert to or become a property of the Employer; and the Company shall not make any amendment that affects the rights, duties or responsibilities of the Plan Administrator or any Committee without the written consent of the affected Plan Administrator or the affected member of such committee. Furthermore, no amendment shall decrease a Participant’s Account balance or accrued benefit or reduce or eliminate any benefits protected under Code Section 411(d)(6) with respect to a Participant with an Account balance or accrued benefit at the date of the amendment, except to the extent permitted under Code Section 412(c)(8).

The Company shall make all amendments in writing. Amendments shall be considered properly authorized by the Company if approved or ratified by the Board, any committee of the Board, by an authorized Committee of the Plan, or by an authorized officer of the Benefits Group, unless the subject of the amendment has been reserved to the Board or another authorized party. Each amendment shall state the date to which it is either retroactively or prospectively effective, and may be executed by any authorized officer of the Company.

Section 12.03 AMENDMENT TO VESTING PROVISIONS. Although the Company reserves the right to amend the vesting provisions at any time, an amended vesting schedule shall not be applied to reduce the Nonforfeitable percentage of any Participant’s Account derived from Employer contributions (determined as of the later of the date the Company adopts the amendment, or the date the amendment becomes effective) to a percentage less than the Nonforfeitable percentage computed under the Plan without regard to the amendment. An amended vesting schedule will apply to a Participant only if the Participant receives credit for at least one Hour of Service after the new schedule becomes effective.

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If the Company makes a permissible amendment to the vesting provisions, each Participant having at least three Years of Service for vesting purposes with the Employer may elect to have the percentage of his Nonforfeitable Account Balance computed under the Plan without regard to the amendment. The Participant must file his election with the Employer within 60 days of the latest of (a) the Company’s adoption of the amendment; (b) the effective date of the amendment; or (c) his receipt of a copy of the amendment. The authorized committee, as soon as practicable, shall forward a true copy of any amendment to the vesting schedule to each affected Participant, together with an explanation of the effect of the amendment, the appropriate form upon which the Participant may make an election to remain under the vesting schedule provided under the Plan prior to the amendment and notice of the time within which the Participant must make an election to remain under the prior vesting schedule. The election described in this Section 12.03 does not apply to a Participant if the amended vesting schedule provides for vesting that is at least as rapid at all times as the vesting schedule in effect prior to the amendment. For purposes of this Section 12.03, an amendment to the vesting schedule includes any amendment that directly or indirectly affects the computation of the Nonforfeitable percentage of an Employee’s rights to his Employer-derived Account.

Section 12.04 DISCONTINUANCE. The Employer shall have the right, at any time, to suspend or discontinue its contributions under the Plan, and the Company (acting through the Human Resources and Compensation Committee of the Board or the Policy Committee) shall have the right to terminate, at any time, this Plan and the Trust created under this agreement. The Plan shall terminate upon the first to occur of the following:

A. The date terminated by action of the Company

B. The date the Employer shall be judicially declared bankrupt or insolvent.

C. The dissolution, merger, consolidation or reorganization of the Employer or the sale by the Employer of all or substantially all of its assets, unless the successor or purchaser makes provision to continue the Plan, in which event the successor or purchaser shall substitute itself as the Employer under this Plan.

Section 12.05 FULL VESTING ON TERMINATION. Notwithstanding any other provision of this Plan to the contrary, upon either full or partial termination of the Plan, or, if applicable, upon the date of complete discontinuance of contributions to the Plan, an affected Participant’s right to his Account shall be 100% Nonforfeitable.

Section 12.06 MERGER, DIRECT TRANSFER AND ELECTIVE TRANSFER. The Trustee shall not consent to, or be a party to, any merger or consolidation with another plan, or to a transfer of assets or liabilities to another plan, unless immediately after the merger, consolidation or transfer, the surviving plan provides each Participant a benefit equal to or greater than the benefit each Participant would have received had the Plan terminated immediately before the merger or consolidation or transfer. The Trustee possesses the specific authority to enter into merger agreements or direct transfer of assets agreements with the trustees of other retirement plans described in Code Section 401(a) and to accept the direct transfer of plan assets, or to transfer plan assets, as a party to any such agreement, only upon the consent or direction of the Benefits Group or the Administrative Committee.

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If permitted by the Benefits Group or the Administrative Committee in its discretion, the Trustee may accept a direct transfer of plan assets on behalf of an Employee prior to the date the Employee satisfies the Plan’s eligibility condition(s). If the Trustee accepts such a direct transfer of plan assets, the Employee shall be treated as a Participant for all purposes of the Plan except that the Employee shall not share in Employer contributions or Participant forfeitures under the Plan until he actually becomes a Participant in the Plan. The Trustee shall hold, administer and distribute the transferred assets as a part of the Trust Fund, and the Trustee shall maintain a separate Transfer Account for the benefit of the Employee on whose behalf the Trustee accepted the transfer in order to reflect the value of the transferred assets.

The Trustee may not consent to, or be a party to, a merger, consolidation or transfer of assets with a defined benefit plan, except with respect to an elective transfer, unless the Administrative Committee consents and so directs, and the transfer is consistent with the Code and with ERISA. The Trustee will hold, administer and distribute the transferred assets as a part of the Trust Fund, and the Trustee shall maintain a separate Transfer Account for the benefit of the Employee on whose behalf the Trustee accepted the transfer in order to reflect the value of the transferred assets. Unless a transfer of assets to this Plan is an elective transfer, the Plan will preserve all Code Section 411(d)(6) protected benefits with respect to those transferred assets, in the manner described in Section 12.02.

A transfer is an elective transfer if: (a) the transfer satisfies the first paragraph of this Section 12.06; (b) the transfer is voluntary, under a fully informed election by the Participant; (c) the Participant has an alternative that retains his Code Section 411(d)(6) protected benefits (including an option to leave his benefit in the transferor plan, if that plan is not terminating); (d) the transfer satisfies the applicable spousal consent requirements of the Code; (e) the transferor plan satisfies the joint and survivor notice requirements of the Code, if the Participant’s transferred benefit is subject to those requirements; (f) the Participant has a right to immediate distribution from the transferor plan, in lieu of the elective transfer; (g) the transferred benefit is at least the greater of the single sum distribution provided by the transferor plan for which the Participant is eligible or the present value of the Participant’s accrued benefit under the transferor plan payable at that plan’s normal retirement age; (h) the Participant has a 100% Nonforfeitable interest in the transferred benefit; and (i) the transfer otherwise satisfies applicable Treasury Regulations. An elective transfer may occur between qualified plans of any type.

If the Plan receives a direct transfer (by merger or otherwise) of elective contributions (or amounts treated as elective contributions) under a plan with a Code Section 401(k) arrangement, the distribution restrictions of Code Sections 401(k)(2) and (10) continue to apply to those transferred elective contributions.

Section 12.07 TERMINATION. Upon termination of the Plan, the distribution provisions of Article IV and Article V shall remain operative, except that:

A. If the present value of the Participant’s Nonforfeitable Account does not exceed $1,000 ($5,000 prior to March 28, 2005), the Administrative Committee will direct the Trustee to distribute to the Participant the Participant’s Nonforfeitable Account to him in a lump sum as soon as administratively practicable after the Plan terminates; and

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B. If the present value of the Participant’s Nonforfeitable Account exceeds $1,000 ($5,000 prior to March 28, 2005), the Participant or the Beneficiary, in addition to the distribution events permitted under Articles IV and V, may elect to have the Trustee commence distribution of his Nonforfeitable Account as soon as administratively practicable after the Plan terminates.

The Trust shall continue until the Trustee, after written direction from the Administrative Committee, has distributed all of the benefits under the Plan. To liquidate the Trust, the Administrative Committee will, to the extent required, purchase a deferred annuity contract for each Participant that protects the Participant’s distribution rights under the Plan, if the Participant’s Nonforfeitable Account exceeds $1,000 ($5,000 prior to March 28, 2005), and the Participant does not elect an immediate distribution pursuant to this Section 12.07. Upon termination of the Plan, the amount, if any, in a suspense account under Article IV shall revert to the Employer, subject to the conditions of the Treasury Regulations permitting such a reversion.

The Employer has executed this Plan in Dublin, Ohio on the date set forth below.

CARDINAL HEALTH, INC.
By:	/s/ Susan Nelson
Its:	SVP Total Rewards
Date:	December 21, 2006

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SCHEDULE I

PARTICIPATING EMPLOYERS

Abilene Nuclear, LLC

(Effective July 1, 2004)

Cardinal Health 303, Inc.

(f/k/a ALARIS Medical Systems, Inc.)

(Effective January 1, 2005)

Cardinal Health 200, Inc.

(f/k/a Allegiance Healthcare Corporation)

(Effective January 1, 2001)

Assisted Care Partners, Inc.

(Effective May 1, 1994)

BDC Leasing Company, d/b/a Bailey Drug Company

Beckloff Associates, LLC

(Effective July 1, 2004)

Behrens, Inc.

(Effective July 1, 1995)

Cardinal Health 100, Inc.

(f/k/a Bindley Western Industries, Inc.)

(Effective January 1, 2003)

Cardinal Health 401, Inc.

(f/k/a Boron, LePore & Associates, Inc.)

(Effective January 1, 2003)

Cardinal Florida, Inc.

(Effective October 1, 1992)

Cardinal Health, Inc.

Cardinal LDS, Inc., d/b/a Leader Drug Stores, Inc.

(Effective January 1, 1992)

Cardinal Mississippi, Inc.

(Effective October 1, 1992)

Cardinal Syracuse, Inc.

Cardinal West, Inc.

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(Effective October 27, 1992)

CDI Investments

(Effective March 16, 1988)

Cardinal Health 412, Inc.

(f/k/a/ Central Pharmacy Services, Inc.)

(Effective July 1, 2002)

Chapman Drug Company

(Effective January 1, 1992)

Cardinal Health 105, Inc.

(f/k/a CORD Logistics)

(Effective November 17, 1995)

Ellicott Drug Company

Griffin Capital

(Effective February 11, 1997)

Cardinal Health 2, Inc.

(f/k/a The Griffin Group, Inc.)

(Effective February 11, 1997)

Humiston-Keeling, Inc.

(Effective July 1, 1996)

Cardinal Health 404, Inc.

(f/k/a International Processing Corporation)

(Effective July 1, 2001)

Cardinal Health 106, Inc.

(f/k/a James W. Daly, Inc.)

Cardinal Health 405, Inc.

(f/k/a Magellan Pharmaceutical Development, Inc.)

(Effective January 1, 2003)

Marmac Distributors, Inc.

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Medical Strategies, Inc.

(Effective July 1, 1994)

Medicap Pharmacies Incorporated

(Effective July 1, 2004)

Medicine Shoppe International, Inc.

(Generally effective August 1, 1997)

Employees of Pharmacy Operations, Inc. – Florida

(Effective August 24, 1999)

Employees of Pharmacy Operations, Inc. – Washington

(Effective December 25, 1999)

Cardinal Health 300, Inc.

(f/k/a MediQual Systems, Inc.)

(Effective October 1, 1998)

Cardinal Health 107, Inc.

(f/k/a National PharmPak Services, Inc.)

(Effective January 1, 1992)

Cardinal Health 108, Inc.

(f/k/a National Specialty Services, Inc.)

(Effective January 1, 1992)

Ohio Valley - Clarksburg, Inc.

(Effective July 1, 1990)

Cardinal Health 109, Inc.

(f/k/a Owen Healthcare, Inc.)

(Effective July 1, 1998)

PRN Services, Inc.

(Effective April 1, 1994)

Cardinal Health 406, LLC

(f/k/a Packaging Coordinators, Inc.)

(Generally effective July 1, 1998)

Acquired employees of TriMaras Printing Co.

(Effective May 1, 2000)

PhR Staffing, Inc.

(Effective July 1, 2002)

Pharmaceutical & Diagnostics, Inc.

(Effective July 1, 2004)

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Cardinal Health 301, LLC

(f/k/a Pyxis Corporation)

(Generally effective July 1, 1998)

Acquired employees of HelpMate

(Effective December 30, 1999)

Cardinal Health 409, Inc.

(f/k/a R. P. Scherer Corporation)

(Effective September 1, 1999)

Ransdell Surgical, Inc.

(Effective January 1, 2001)

Renlar Systems, Inc.

(Effective January 1, 1996)

Snowden Pencer, Inc.

(Effective July 1, 2004)

Solomons Company

(Effective January 1, 1994)

Cardinal Health 414, Inc.

(f/k/a Syncor International Corporation)

(Effective July 1, 2003)

West Texas Nuclear Pharmacy Partners

(Effective July 1, 2004)

Cardinal Health 110, Inc.

(f/k/a Whitmire Distribution Corporation)

(Effective January 1, 1995)

Williams Drug Distributors, Inc.

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SCHEDULE II

MERGING PLANS

Entity	Name of Merged Plan	Merger Date
Comprehensive Reimbursement Consultants, Inc. (“CRC”)	CRC 401(k) Retirement Plan	July 1, 1998
Cardinal Health 109, Inc. (f/k/a Owen Healthcare, Inc.)	Owen Healthcare, Inc. Employee Stock Ownership Plan	July 1, 1998
Cardinal Health 109, Inc. (f/k/a Owen Healthcare, Inc.)	Owen Healthcare, Inc. 401(k) Savings Plan	July 1, 1998
Cardinal Health 406, LLC (f/k/a Packaging Coordinators, Inc. (“PCI”)	Packaging Coordinators, Inc. Profit Sharing Plan	July 1, 1998
Cardinal Health 406, LLC (f/k/a Packaging Coordinators, Inc. (“PCI”)	Packaging Coordinators, Inc. Money Purchase Pension Plan	July 1, 1998
Pyxis Corporation (“Pyxis”)	Pyxis Corporation 401(k) Plan	July 1, 1998
Cardinal Health 409, Inc. (f/k/a R.P. Scherer Corporation)	R.P. Scherer Corporation Retirement Savings Plan	September 1, 1999
Automatic Liquid Packaging, Inc.	Automatic Liquid Packaging, Inc. Employees 401(k) Savings Plan	January 1, 2001
Pacific Surgical Innovations, Inc.	Pacific Surgical Innovations, Inc. 401(k) Plan	January 1, 2001
Ransdell Surgical, Inc.	Ransdell Surgical, Inc. 401(k) Salary Reduction Plan and Trust	January 1, 2001
International Processing Corp.	International Processing Corp. 401(k) Plan	July 1, 2001
American Threshold Industries, Inc.	American Threshold Industries, Inc. 401(k) Profit Sharing Plan	September 1, 2001

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Entity	Name of Merged Plan	Merger Date
Cardinal Health, Inc.	Cardinal Health, Inc. Frozen Retirement Plan	December 1, 2001
Premier Pharmacy Services, P.C.	Premier Pharmacy Services, P.C. 401(k) Plan	May 1, 2002
Professional Health-Care Resources, Inc.	PhR 401(k) Plan	November 1, 2002
Boron, LePore & Associates, Inc.	Boron, LePore & Associates, Inc. Profit Sharing Plan	January 2, 2003
Cardinal Health 100, Inc. (f/k/a Bindley Western Industries, Inc.)	Profit Sharing Plan of Bindley Western Industries, Inc. & Subsidiaries	January 3, 2003
Cardinal Health 200, Inc. (f/k/a Allegiance Corporation	Allegiance Retirement Plan for Union Employees of Hayward, California	February 1, 2003
Cardinal Health 405, Inc. (f/k/a Magellan Laboratories, Incorporated)	Magellan Laboratories, Inc. Profit Sharing Trust	February 5, 2003
Beckloff Associates, LLC	Beckloff Associates, Inc. 401(k) Profit Sharing Plan	August 2, 2004
Snowden Pencer, Inc.	Snowden Pencer, Inc. 401(k) Profit Sharing Plan	August 3, 2004
Cardinal Health, Inc.	Cardinal Health Prior Retirement Accounts Plan	December 16, 2004
Cardinal Health, Inc.	Cardinal Health Profit Sharing, Retirement and Savings Plan for PRN Employees	December 16, 2004
Cardinal Health 303, Inc. (f/k/a ALARIS Medical Systems, Inc.)	ALARIS Medical Systems Retirement Investment Plan	January 1, 2005

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SCHEDULE III

ANNUITY DISTRIBUTIONS TO CERTAIN PARTICIPANTS

A. APPLICATION OF QUALIFIED JOINT AND SURVIVOR ANNUITY PROVISIONS. The provisions of Schedule III shall apply only to those Participants who (a) participated in the Packaging Coordinators, Inc. Money Purchase Pension Plan and have a portion of their Account derived from said plan, or (b) certain other individuals as may be identified on Schedule IV hereto. The Trustee shall distribute the Nonforfeitable Account balance of a Participant to whom this Section applies in the form of a “Qualified Joint and Survivor Annuity,” unless the Participant makes a valid waiver election (described in B) within the 90-day period ending on the “Annuity Starting Date.” The Annuity Starting Date means the first day of the first period for which an amount is payable as an annuity or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred that entitle the Participant to such benefit. A Qualified Joint and Survivor Annuity is an immediate annuity that is purchasable from a commercial insurer with the Participant’s Nonforfeitable Account Balance and which is payable for the life of the Participant with, if the Participant is married on the Annuity Starting Date, a survivor annuity for the life of the Participant’s surviving Spouse equal to 50% of the amount of the annuity payable during the joint lives of the Participant and his Spouse. The Trustee shall pay the Participant’s Nonforfeitable Account Balance in a lump sum, in lieu of a Qualified Joint and Survivor Annuity, if the Participant’s Nonforfeitable Account Balance at the time distribution commences is not greater than $1,000.

If the Participant has in effect a valid waiver election regarding the Qualified Joint and Survivor Annuity, the Trustee shall distribute the Participant’s Nonforfeitable Account Balance in accordance with Section 5.04 of the Plan. For purposes of applying this Schedule III, a former Spouse shall be treated as the Participant’s Spouse or surviving Spouse to the extent provided under a qualified domestic relations order (as defined in Code Section 414(p)).

B. WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. With respect only to those Participants subject to this Schedule III, no less than 30 days (or seven days, if the 30-day period is waived by the Participant and the Participant’s Spouse, if applicable), nor more than 90 days before the Participant’s Annuity Starting Date, such Participants shall be provided with a written explanation of the terms and conditions of the Qualified Joint and Survivor Annuity, the Participant’s right to make, and the effect of, an election to waive the Qualified Joint and Survivor Annuity form of benefit, the rights of the Participant’s Spouse regarding the waiver election, and the Participant’s right to make, and the effect of, a revocation of a waiver election.

A married Participant’s waiver election is not valid unless:

(i) The Participant’s Spouse (to whom the survivor annuity is payable under the Qualified Joint and Survivor Annuity) has consented in writing to the waiver election, the Spouse’s consent acknowledges the effect of the election, and a notary public or a member of the Benefits Group (or its representative) witnesses the Spouse’s consent; and

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(ii) If the Spouse is not the Participant’s sole primary Beneficiary, the Spouse consents to the Participant’s Beneficiary designation or to any change in the Participant’s Beneficiary designation, or the Spouse expressly permits designations by the Participant without any further spousal consent.

A Participant’s waiver of the Qualified Joint and Survivor Annuity form of benefit shall not be effective unless the election designates a form of benefit payment that may not be changed without spousal consent (or the Spouse expressly permits designations by the Participant without any further spousal consent). Any consent by a Spouse obtained under this provision or establishment that the consent of a Spouse may not be obtained shall be effective only with respect to such Spouse. A consent that permits designations by the Participant without any requirement of further consent by such Spouse must acknowledge that the Spouse has the right to limit consent to a specific beneficiary, and a specific form of benefit where applicable, and that the Spouse voluntarily elects to relinquish either or both of such rights. A revocation of a prior waiver may be made by a Participant without the consent of the Spouse at any time before the commencement of benefits. The number of revocations shall not be limited. No consent obtained under this provision shall be valid unless the Participant has received notice as provided in this Schedule III. The Spouse’s consent to a waiver of the Qualified Joint and Survivor Annuity is irrevocable unless the Participant revokes the waiver election.

The Trustee or Administrative Committee may accept as valid a waiver election that does not satisfy the spousal consent requirements if the Trustee or Administrative Committee establishes that the Participant does not have a Spouse, the Trustee or Administrative Committee is not able to locate the Participant’s Spouse, or other circumstances exist under which the Secretary of the Treasury will excuse the consent requirement.

C. DISTRIBUTION BEGINNING AFTER DEATH OF CERTAIN EMPLOYEES PARTICIPATING PRIOR TO JULY 1, 1998. If a married Participant dies prior to his Annuity Starting Date, the Trustee shall distribute the married Participant’s Nonforfeitable Account Balance to the Participant’s surviving Spouse as a “Preretirement Survivor Annuity,” unless the Participant has made a valid waiver election pursuant to Section D. An unmarried Participant’s Nonforfeitable Account Balance shall be payable to his designated Beneficiary.

The Preretirement Survivor Annuity is an annuity payable to the Participant’s surviving Spouse for life. The Participant’s Nonforfeitable Account Balance shall be applied to the purchase of an annuity for the surviving Spouse’s life. The surviving Spouse may elect to have such annuity distributed within a reasonable period after the Participant’s death.

Notwithstanding the foregoing, if the Participant’s Nonforfeitable Account Balance at the time the distribution commences is not greater than $1,000, the Participant’s Nonforfeitable Account Balance shall be paid in a single lump sum to the Participant’s surviving Spouse or other Beneficiary in lieu of a Preretirement Survivor Annuity as soon as administratively practicable after his death.

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If the Participant is unmarried or has waived the Preretirement Survivor Annuity in accordance with Section D, and dies before distribution of his Nonforfeitable Account Balance begins, distribution of the Participant’s entire Nonforfeitable Account Balance shall be made in a single lump sum payment in cash or in equal or nearly equal quarterly installments over a fixed period not exceeding (i) if the Beneficiary is the deceased Participant’s surviving Spouse, the Beneficiary’s remaining life expectancy at the time installment payments begin, or (ii) if the Beneficiary is other than the deceased Participant’s surviving Spouse, five years from the Participant’s death.

If the designated Beneficiary is the Participant’s surviving Spouse, the date such distributions are required to begin shall not be earlier than the later of (i) December 31 of the calendar year immediately following the calendar year in which the Participant died, or (ii) December 31 of the calendar year in which the Participant would have attained age 70 ¹/2. If the Beneficiary is not the Participant’s surviving Spouse, distribution of the entire amount payable must be completed on or before the last day of the calendar year that contains the fifth anniversary of the date of the Participant’s death.

A Participant may also elect the form and timing of payment of his Nonforfeitable Account Balance to his Beneficiaries. If the Participant has not made an election concerning the manner of payment to his Beneficiary by the time of his death, the Participant’s surviving Spouse or designated Beneficiary must elect the method of distribution no later than the time when distributions would be required to begin under this Section C. If the Participant has no surviving Spouse or designated Beneficiary, or if the designated Beneficiary does not elect a method of distribution, distribution of the Participant’s entire Nonforfeitable Account Balance must be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

D. WAIVER ELECTION FOR MARRIED PARTICIPANTS. A written explanation of the Preretirement Survivor Annuity shall be provided to each married Participant to whom this subsection applies, within whichever of the following periods ends last: (i) the period beginning on the first day of the Plan Year in which the Participant attains age 32 and ending on the last day of the Plan Year in which the Participant attains age 34; (ii) a reasonable period after an Employee becomes a Participant; (iii) a reasonable period after the joint and survivor rules become applicable to the Participant; or (iv) a reasonable period after a fully subsidized Preretirement Survivor Annuity no longer satisfies the requirements for a fully subsidized benefit. A reasonable period described in clauses (ii), (iii) and (iv) is the period beginning one year before and ending one year after the applicable event. If the Participant separates from Service before attaining age 35, clauses (i), (ii), (iii) and (iv) do not apply, and the written explanation shall be provided within the period beginning one year before and ending one year after the Severance from Employment. The written explanation shall describe, in a manner consistent with Treasury Regulations, the terms and conditions of the Preretirement Survivor Annuity in a manner that is comparable to the explanation of the Qualified Joint and Survivor Annuity required under this Schedule III. The Plan does not limit the number of times the Participant may revoke a waiver of the Preretirement Survivor Annuity or make a new waiver during the election period.

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A Participant’s waiver election of the Preretirement Survivor Annuity is not valid unless (a) the Participant makes the waiver election no earlier than the first day of the Plan Year in which he attains age 35, and (b) the Participant’s Spouse (to whom the Preretirement Survivor Annuity is payable) satisfies the consent requirements described in this Schedule III, except the Spouse need not consent to the form of benefit payable to the designated Beneficiary. The Spouse’s consent to the waiver of the Preretirement Survivor Annuity is irrevocable, unless the Participant revokes the waiver election.

Notwithstanding the time of election requirement of clause (a) above, a Participant who will not yet attain age 35 as of the end of any current Plan Year may make a special qualified election to waive the Preretirement Survivor Annuity for the period beginning on the date of such election and ending on the first day of the Plan Year in which the Participant will attain age 35. Such election will not be valid unless the Participant receives a written explanation of the Preretirement Survivor Annuity in a manner that is comparable to the explanation required under Section B. Preretirement Survivor Annuity coverage will be automatically reinstated as of the first day of the Plan Year in which the Participant attains age 35. Any new waiver on or after such date shall be subject to the full requirements of this Section D.

E. For purposes of this Section E, any amount paid to a child of the Participant will be treated as if it had been paid to the surviving Spouse if the amount becomes payable to the surviving Spouse when the child reaches the age of majority.

F. The life expectancy multiples under Treasury Regulation Section 1.72-9 shall be used for purposes of applying this Section. The life expectancy of the Participant’s surviving Spouse may be recalculated not more frequently than annually, but the life expectancy of a nonspouse designated Beneficiary may not be recalculated after the Trustee commences payment to the designated Beneficiary.

G. The provisions of this Schedule III shall be administered in conformance with the requirements of Section 5.07 of the Plan effective January 1, 2003.

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SCHEDULE IV

LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS

Section IV.01. LIMITATIONS APPLICABLE TO COMPENSATION DEFERRAL CONTRIBUTIONS. The provisions of this Section are effective for Plan Years beginning on or after January 1, 1997 and prior to January 1, 2005.

A. Definitions. For purposes of this Schedule, the following definitions shall apply:

(i) “Actual Deferral Percentage,” for each Plan Year, means the average of the ratios (calculated separately for each Participant in a specified group) of:

1. the amount of Compensation Deferral Contributions actually paid over to the Trust Fund on behalf of each such Participant for such Plan Year, including Excess Compensation Deferrals, but excluding (i) Compensation Deferrals that are taken into account in the Contribution Percentage test (provided the Actual Deferral Percentage test is satisfied both with and without exclusion of these Compensation Deferrals) and (ii) Compensation Deferrals made pursuant to Code Section 414(u) by reason of qualified military service, to

2. the Participant’s Compensation for such Plan Year for the period during which he was a Participant in the Plan.

For purposes of computing Actual Deferral Percentages, an Eligible Employee who would be a Participant but for the failure to make Compensation Deferrals shall be treated as a Participant on whose behalf no Compensation Deferrals are made.

(ii) “Excess Compensation Deferrals,” with respect to any Plan Year, means the excess of:

1. The aggregate amount of Employer contributions actually taken into account in computing the Actual Deferral Percentage of Highly Compensated Employees for such Plan Year, over

2. The maximum amount of such contributions permitted by the Actual Deferral Percentage test (determined by reducing contributions made on behalf of Highly Compensated Employees in order of their Actual Deferral Percentages, beginning with the highest of such percentages).

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B. Actual Deferral Percentage Test. In any Plan Year in which the Actual Deferral Percentage for the group of Highly Compensated Employees, taking into account Employee elections, would be more than the greater of:

(i) the Actual Deferral Percentage for the group of Non-highly Compensated Employees for the current or preceding Plan Year, as applicable (as set forth in Section IV.09 of this Schedule IV to the Plan), multiplied by 1.25, or

(ii) the lesser of two percent plus the Actual Deferral Percentage for the group of Non-highly Compensated Employees for the current or preceding Plan Year (as set forth in Section IV.09 of this Schedule IV) or the Actual Deferral Percentage for the group of Non-highly Compensated Employees for the current or preceding Plan Year (as set forth in Section IV.09 of this Schedule IV) multiplied by two,

the deferral elections of the Highly Compensated Employees shall be reduced to the extent necessary so that the Actual Deferral Percentage for the group of Highly Compensated Employees is not more than the greater of subparagraphs (i) or (ii) of this subsection B. Under such reduction, the dollar amount of the Excess Compensation Deferrals is determined as described in subsection A(ii) above. Next, the Compensation Deferral Contributions of the Highly Compensated Employee with the highest dollar amount of Compensation Deferral Contributions (not necessarily the Highly Compensated Employee with the highest Actual Deferral Percentage) is reduced to the extent required to equal the maximum deferral dollar amount for Highly Compensated Employees permitted by subparagraphs (i) or (ii) of this subsection B, or to cause such Highly Compensated Employee’s Compensation Deferral Contributions to equal the dollar amount of the Compensation Deferral Contributions of the Highly Compensated Employee with the next highest dollar amount of Compensation Deferral Contributions, whichever is less. This process is repeated until the aggregate dollar amount of all Highly Compensated Employee Compensation Deferrals are reduced to an amount that will cause the dollar amount of the Compensation Deferrals for all Highly Compensated Employees in the aggregate to equal the dollar amount of Compensation Deferrals that will cause the average of the Actual Deferral Percentages for the group of Highly Compensated Employees to equal the maximum amount permitted under this Section. Alternatively (or in addition to the reductions set forth above), if the Employer has made any Qualified Matching or Qualified Non-elective Contributions for the Plan Year in question, the Administrative Committee may elect to treat all or any part of any such contributions meeting the requirements of Treasury Regulations Section 1.401(k)-1(b)(4) as Compensation Deferral Contributions to the extent necessary to satisfy the Actual Deferral Percentage test of this Section. Any Qualified Matching or Qualified Non-elective Contributions so applied shall not be included in the computation of the Actual Contribution Percentage test requirements of Code Section 401(m) otherwise applicable to such contributions.

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C. Testing Groups. The Actual Deferral Percentage test may be performed separately with respect to those Participants who have met the minimum age and service requirements of Code Section 410(a)(1)(A) from those who have not met such requirements.

D. Code Section 415 Limitation. The Employer shall not make a contribution to the Trust to the extent the contribution would exceed the Participant’s “Maximum Permissible Amount” described in this Schedule IV.

E. Multiple Code Section 401(k) Plans. The Actual Deferral Percentage for any Participant who is a Highly Compensated Employee for the Plan Year and who is eligible to have Compensation Deferrals (and Qualified Non-elective Contributions or Qualified Matching Contributions, or both, if treated as Compensation Deferrals for purposes of the Actual Deferral Percentage test) allocated to his Accounts under two or more arrangements described in Section 401(k) of the Code that are maintained by the Employer, shall be determined as if such Compensation Deferrals (and, if applicable, such Qualified Non-elective Contributions or Qualified Matching Contributions, or both) were made under a single arrangement. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different Plan Years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement.

F. Optional Plan Aggregation. In the event that this Plan satisfies the requirements of Sections 401(k), 401(a)(4), or 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this Section shall be applied by determining the Actual Deferral Percentage of Employees as if all such plans were a single plan. Plans may be aggregated in order to satisfy Section 401(k) of the Code only if they have the same Plan Year.

G. Time for Making Contributions. For purposes of determining the Actual Deferral Percentage test, Compensation Deferrals, Qualified Non-elective Contributions and Qualified Matching Contributions must be made before the last day of the 12-month period immediately following the Plan Year to which such contributions relate. Compensation Deferral Contributions must, in any event, be paid over by the Employer to the Trustee by the earlier of the date on which they can reasonably be segregated from the Employer’s general assets or within 15 business days after the end of the calendar month in which the Compensation Deferral Contributions were withheld from the Participant’s Compensation.

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H. Recordkeeping. The Administrative Committee shall maintain records sufficient to demonstrate satisfaction of the Actual Deferral Percentage test and the amount of Qualified Non-elective Contributions or Qualified Matching Contributions, or both, used in such test.

I. Compliance with the Code. The determination and treatment of the Actual Deferral Percentage amounts of any Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury. In performing the required testing hereunder, any variations in procedures or methods permitted under the Code and applicable Treasury Regulations may be employed.

Section IV.02 DISTRIBUTION OF EXCESS COMPENSATION DEFERRALS. Notwithstanding any other provision of this Plan, Excess Compensation Deferrals, plus any income and minus any loss allocable thereto, shall be distributed no later than the last day of each Plan Year to Participants to whose Accounts such Excess Compensation Deferrals were allocated for the preceding Plan Year. Whenever possible, however, such distributions shall be made within two and one-half months after the end of the Plan Year during which the Excess Compensation Deferrals occurred. Such distributions shall be made to Highly Compensated Employees on the basis of the respective portions of the Excess Compensation Deferrals attributable to each of such Employees under the methodology described above. Excess Compensation Deferrals shall be treated as Annual Additions under the Plan.

A. Determination of Income or Loss: Excess Compensation Deferrals shall be adjusted for any income or loss. Such adjustments shall include the period from the end of the Plan Year in which the excess arose up to the date of corrective distribution (or up to a date that is no more than seven days before the date of the corrective distribution) (the “Gap Period”). For Plan Years beginning prior to January 1, 2006, Gap Period adjustments were made only in the discretion of the Administrative Committee. The income or loss allocable to Excess Compensation Deferrals is the sum of: (i) income or loss allocable to the Participant’s Compensation Deferral Account (and, if applicable, the Qualified Non-elective Contribution Account or the Qualified Matching Contribution Account or both) for the Plan Year multiplied by a fraction, the numerator of which is such Participant’s Excess Compensation Deferrals for the year and the denominator of which is the Participant’s Account balance attributable to Compensation Deferrals (and Qualified Non-Elective Contributions or Qualified Matching Contributions, or both, if any of such contributions are included in the Actual Deferral Percentage test) without regard to any income or loss occurring during such Plan Year; and (ii) ten percent of the amount determined under (i) multiplied by the number of whole calendar months between the end of the Plan Year and the date of distribution, counting the month of distribution if distribution occurs after the 15^th day of such month. Alternatively, the Administrative Committee may determine the income or loss allocable to Excess Compensation Deferrals under any reasonable method that does not violate the general nondiscrimination rules of Code Section 401(a)(4), is used consistently for all Participants and for all

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such corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants’ Accounts.

B. Accounting for Excess Compensation Deferrals: Excess Compensation Deferrals shall be distributed from the Participant’s Compensation Deferral Account and Qualified Matching Contribution Account (if applicable) in proportion to the Participant’s Compensation Deferrals and Qualified Matching Contributions (to the extent used in the Actual Deferral Percentage test) for the Plan Year. Excess Compensation Deferrals shall be distributed from the Participant’s Qualified Non-elective Contribution Account only to the extent that such Excess Compensation Deferrals exceed the balance in the Participant’s Compensation Deferral Account and Qualified Matching Contribution Account.

Section IV.03. DOLLAR LIMITATIONS ON ELECTIVE DEFERRALS.

A. Definitions:

(i) “Elective Deferrals” means any Employer contributions made to the Plan at the election of the Participant, in lieu of cash compensation, and shall include contributions made pursuant to a compensation reduction agreement or other deferral mechanism. With respect to any taxable year, a Participant’s Elective Deferral is the sum of all employer contributions made on behalf of such Participant pursuant to an election to defer under any qualified cash or deferred arrangement as described in Section 401(k) of the Code, any simplified employee pension cash or deferred arrangement as described in Code Section 402(h)(1)(B), any SIMPLE IRA described in Code Section 408(p), any eligible deferred compensation plan under Code Section 457, any plan as described under Code Section 501(c)(18), and any employer contributions made on the behalf of a Participant for the purchase of an annuity contract under Code Section 403(b) pursuant to a compensation reduction agreement.

(ii) “Excess Elective Deferrals” means those Elective Deferrals that are includible in a Participant’s gross income under Section 402(g) of the Code to the extent such Participant’s Elective Deferrals for a taxable year exceed the dollar limitation under such Code section. Excess Elective Deferrals shall be treated as Annual Additions under the Plan, except to the extent they are distributed pursuant to subsection C below.

B. Prohibition of Deferrals in Excess of Code Section 402(g) Dollar Limitations. No Participant shall be permitted to have Elective Deferrals made under this Plan, or any other qualified plan, during any taxable year, in excess of the dollar limitation contained in Section 402(g) of the Code (as adjusted for increases in the cost-of-living) in effect at the beginning of such taxable year,

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except to the extent Catch-up Contributions are permitted to be made to the Plan, as described in Code Section 414(v), or, effective for Plan Years on or after January 1, 2006, such Elective Deferrals are made by reason of a Participant’s qualified military service under Code Section 414(u).

C. Distribution of Excess Elective Deferrals. A Participant may assign to this Plan any Excess Elective Deferrals made during a taxable year of the Participant by notifying the Plan Administrator on or before March 15 of the following taxable year of the amount of the Excess Elective Deferrals to be assigned to the Plan.

Notwithstanding any other provision of the Plan, Excess Elective Deferrals, plus any income and minus any loss allocable thereto, shall be distributed no later than April 15 to any Participant to whose Account Excess Elective Deferrals were assigned for the preceding year and who claims Excess Elective Deferrals for such taxable year.

D. Determination of Income or Loss. Excess Elective Deferrals shall be adjusted for any income or loss. The Administrative Committee shall determine whether such adjustments shall include the period from the end of the taxable year in which the excess arose up to the date of distribution (the “Gap Period”). The income or loss allocable to Excess Elective Deferrals is the sum of (i) income or loss allocable to the Participant’s Elective Deferral Account for the taxable year multiplied by a fraction, the numerator of which is such Participant’s Excess Elective Deferrals for the year and the denominator of which is the Participant’s Account balance attributable to Elective Deferrals without regard to any income or loss occurring during such taxable year; and (ii) if the distribution is to be adjusted for income or loss during the Gap Period, ten percent of the amount determined under (i) multiplied by the number of whole calendar months between the end of the Participant’s taxable year and the date of distribution, counting the month of distribution if distribution occurs after the 15^th day of such month. Alternatively, the Administrative Committee may determine the income or loss allocable to Excess Elective Deferrals under any reasonable method that does not violate the general nondiscrimination rules of Code Section 401(a)(4), is used consistently for all Participants and for all such corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants’ Accounts.

Participants who claim Excess Elective Deferrals for the preceding taxable year must submit their claims in writing to the Plan Administrator by March 15 of the calendar year following the Plan Year in which such Excess Elective Deferrals are claimed to have been made.

Section IV.04. LIMITATIONS APPLICABLE TO MATCHING CONTRIBUTIONS. The provisions of this Section are effective for Plan Years beginning on or after January 1, 1997 and prior to January 1, 2005.

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A. Definitions. For purposes of this Section, the following definitions shall apply:

(i) “Aggregate Limit” shall mean the greater of (a) the sum of (1) 125% of the greater of the Actual Deferral Percentage of the Non-highly Compensated Employees for the current or preceding Plan Year (as set forth in Section IV.09 of this Schedule IV) or the Actual Contribution Percentage of Non-highly Compensated Employees under the Plan subject to Code Section 401(m) for the current or preceding Plan Year (as set forth on Schedule I) and (2) the lesser of 200% or two plus the lesser of such Actual Deferral Percentage or Actual Contribution Percentage; or (b) the sum of (1) 125% of the lesser of the Actual Deferral Percentage of the Non-highly Compensated Employees for the current or preceding Plan Year (as set forth in Section IV.09 of this Schedule IV) or the Actual Contribution Percentage of Non-highly Compensated Employees under the Plan subject to Code Section 401(m) for the current or preceding Plan Year (as set forth in Section IV.09 of this Schedule IV), and (2) the lesser of 200% or two plus the greater of such Actual Deferral Percentage or Actual Contribution Percentage.

(ii) “Actual Contribution Percentage” shall mean the average of the Contribution Percentages of the Eligible Participants in a group.

(iii) “Contribution Percentage” shall mean the ratio (expressed as a percentage) of the Participant’s Contribution Percentage Amounts to the Participant’s Compensation for the Plan Year (whether or not the Employee was a Participant for the entire Plan Year).

(iv) “Contribution Percentage Amounts” shall mean the sum of the Non-Safe Harbor Matching Contributions and Qualified Matching Contributions (to the extent not taken into account for purposes of the Actual Deferral Percentage test) made under the Plan on behalf of the Participant for the Plan Year. Such Contribution Percentage Amounts shall not include: (a) Safe Harbor Matching Contributions or Non-Safe Harbor Matching Contributions that are forfeited either to correct Excess Aggregate Contributions or because the contributions to which they relate are Excess Compensation Deferrals, Excess Elective Deferrals, or Excess Aggregate Contributions; (b) Safe Harbor Matching Contributions or Non-Safe Harbor Matching Contributions made by reason of an eligible employee’s qualified military service under Code Section 414(u); and (c) disproportionate target Safe Harbor Matching Contributions or Non-Safe Harbor Matching Contributions as described in Treas. Reg. Section 1.401(m)-2(a)(5)(ii). If it so desires, the Employer may make Qualified Non-elective Contributions designated for inclusion in the Contribution Percentage

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Amounts. The Employer also may elect to use Compensation Deferrals in the Contribution Percentage Amounts so long as the Actual Deferral Percentage test is met before the Compensation Deferrals are used in the Actual Contribution Percentage test and continues to be met following the exclusion of those Compensation Deferrals that are used to meet the Actual Contribution Percentage test.

(v) “Eligible Participant” shall mean any Employee who is eligible to make an Employee Contribution, or a Compensation Deferral (if the Employer takes such contributions into account in the calculation of the Contribution Percentage), or to receive a Non-Safe Harbor Matching Contribution (including forfeitures) or a Qualified Matching Contribution. If an Employee Contribution is required as a condition of participation in the Plan, any Employee who would be a Participant in the Plan if such Employee made such a contribution shall be treated as an eligible Participant on behalf of whom no Employee Contributions are made.

(vi) “Employee Contribution” shall mean any voluntary employee nondeductible contribution made to the Plan by or on behalf of a Participant that is included in the Participant’s gross income in the year in which made and that is maintained under a separate account to which earnings and losses are allocated.

(vii) “Excess Aggregate Contributions” shall mean, with respect to any Plan Year, the excess of:

1. The aggregate Contribution Percentage Amounts taken into account in computing the numerator of the Actual Contribution Percentage actually made on behalf of Highly Compensated Employees for such Plan Year, over

2. The maximum Contribution Amounts permitted by the Actual Contribution Percentage test (determined by reducing contributions made on behalf of Highly Compensated Employees in order of their Contribution Percentages beginning with the highest of such percentages).

Such determination shall be made after first determining Excess Compensation Deferrals pursuant to Section IV.01. After making such determination, the dollar amount of the Excess Aggregate Contributions shall be determined. The Excess Aggregate Contributions, on a dollar amount basis, shall be allocated to the Account(s) of the Highly Compensated Participant(s) with the highest dollar amount of Contribution Percentage Amounts allocated to his/their Account(s) in a reverse leveling process similar to the one described in Section IV.01 applicable to Compensation Deferral Contributions.

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(viii) “Matching Contribution” shall mean an Employer contribution (other than a Safe Harbor Matching Contribution) made to this or any other defined contribution plan on behalf of a Participant on account of an Employee Contribution made by such Participant, or on account of a Participant’s Compensation Deferral Contributions under a Plan maintained by the Employer.

B. Actual Contribution Percentage Test. The Actual Contribution Percentage for Participants who are Highly Compensated Employees for each Plan Year and the Actual Contribution Percentage for Participants who are Non-highly Compensated Employees for the current or preceding Plan Year (as set forth in this Schedule IV) must satisfy one of the following tests:

(i) The Actual Contribution Percentage for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Actual Contribution Percentage for Participants who are Non-highly Compensated Employees for the current or preceding Plan Year (as set forth on this Schedule IV) multiplied by 1.25; or

(ii) The Actual Contribution Percentage for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Actual Contribution Percentage for Participants who are Non-highly Compensated Employees for the current or preceding Plan Year (as set forth on this Schedule IV) multiplied by two, provided that the Actual Contribution Percentage for Participants who are Highly Compensated Employees does not exceed such Actual Contribution Percentage for Participants who are Non-highly Compensated Employees by more than two percentage points.

C. Testing Groups. The Actual Contribution Percentage test may be performed separately with respect to those Participants who have met the minimum age and service requirements of Code Section 410(a)(1)(A) from those who have not met such requirements.

D. Multiple Use. For Plan Years beginning prior to July 1, 2002, if the sum of the Actual Deferral Percentage and Actual Contribution Percentage of those Highly Compensated Employees subject to either or both tests exceeds the Aggregate Limit, then the Actual Contribution Percentage of those Highly Compensated Employees will be reduced (beginning with such Highly Compensated Employee whose Actual Contribution Percentage is the highest) so that the limit is not exceeded. The amount by which each Highly Compensated Employee’s Contribution Percentage Amount is reduced shall be treated as an Excess Aggregate Contribution. The Actual Deferral Percentage and Actual Contribution Percentage of the Highly Compensated

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Employees are determined after any corrections required to meet the Actual Deferral Percentage and Actual Contribution Percentage tests. Multiple use does not occur if either the Actual Deferral Percentage or Actual Contribution Percentage of the Highly Compensated Employees does not exceed 1.25 multiplied by the Actual Deferral Percentage or Actual Contribution Percentage, as applicable, of the Non-highly Compensated Employees.

E. Aggregation of Contribution Percentage Amounts. For purposes of this Section, the Contribution Percentage for any Participant who is a Highly Compensated Employee and who is eligible to have Contribution Percentage Amounts allocated to his Account under two or more Plans described in Section 401(a) of the Code, or arrangements described in Section 401(k) of the Code that are maintained by the Employer, shall be determined as if the total of such Contribution Percentage Amounts was made under each plan. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different plan years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement.

F. Aggregation of Plans. In the event that this Plan satisfies the requirements of Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this Section shall be applied by determining the Contribution Percentage of Employees as if all such plans were a single plan. Plans may be aggregated in order to satisfy Section 401(m) of the Code only if they have the same Plan Year.

G. Allocation of Amounts to Plan Years. For purposes of determining the Actual Contribution Percentage test, Employee Contributions are considered to have been made in the Plan Year in which contributed to the Trust. Matching Contributions and Qualified Non-elective Contributions shall be considered made for a Plan Year if made no later than the end of the 12-month period beginning on the day after the close of the Plan Year.

H. Recordkeeping. The Employer shall maintain records sufficient to demonstrate satisfaction of the Actual Contribution Percentage test and the amount of Qualified Non-elective Contributions or Qualified Matching Contributions, or both, used in such test.

I. Code Requirements. The determination and treatment of the Contribution Percentage of any Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury. In performing the required testing hereunder, any variations in procedures or methods permitted under the Code and applicable Treasury Regulations may be employed.

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Section IV.05. DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The provisions of this Section are effective for Plan Years beginning on or after January 1, 1997 and prior to January 1, 2005. Notwithstanding any other provision of this Plan, Excess Aggregate Contributions, plus any income and minus any loss allocable thereto, shall be forfeited, if forfeitable, or if not forfeitable, distributed no later than the last day of each Plan Year to Participants to whose Accounts such Excess Aggregate Contributions were allocated for the preceding Plan Year. Excess Aggregate Contributions shall be treated as Annual Additions under the Plan.

A. Determination of Income or Loss: Excess Aggregate Contributions shall be adjusted for any income or loss. Such adjustments shall include the period from the end of the Plan Year in which the excess arose up to the date of corrective distribution (or up to a date that is no more than seven days before the date of the corrective distribution) (the “Gap Period”). For Plan Years beginning prior to January 1, 2006, Gap Period adjustments were made only in the discretion of the Administrative Committee. The income or loss allocable to Excess Aggregate Contributions is the sum of: (i) income or loss allocable to the Participant’s Matching Account and Qualified Matching Contribution Account (if any, and only to the extent that amounts therein are not used in the Actual Deferral Percentage test), and Qualified Non-elective Contribution Account and Compensation Deferral Account if any such amounts were used in calculating the Actual Contribution Percentage test, for the Plan Year, multiplied by a fraction, the numerator of which is such Participant’s Excess Aggregate Contributions for the year and the denominator of which is the Participant’s Account balance(s) attributable to Contribution Percentage Amounts without regard to any income or loss occurring during such Plan Year; and (ii) ten percent of the amount determined under (i) multiplied by the number of whole calendar months between the end of the Plan Year and the date of distribution, counting the month of distribution if distribution occurs after the 15^th day of such month. Alternatively, the Administrative Committee may determine the income or loss allocable to Excess Aggregate Contributions under any reasonable method that does not violate the general nondiscrimination rules of Code Section 401(a)(4), is used consistently for all Participants and for all such corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants’ Accounts.

B. Forfeitures of Excess Aggregate Contributions: Forfeitures of Excess Aggregate Contributions may either be reallocated to the Accounts of Non-highly Compensated Employees or applied to reduce Employer contributions, as elected by the Employer.

C. Accounting for Excess Aggregate Contributions: Excess Aggregate Contributions shall be forfeited, if forfeitable, or distributed on a pro-rata basis from the Participant’s Employee Contribution Account, Matching Account, and Qualified Matching Contribution Account (and, if applicable, the Participant’s Qualified Non-elective Contribution Account or Compensation Deferral Account, or both).

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Section IV.06 ALTERNATIVE TO DISTRIBUTION OF EXCESS AMOUNTS. The provisions of this Section are effective for Plan Years beginning on or after January 1, 1997 and prior to January 1, 2005. In lieu of distributing Excess Compensation Deferrals or Excess Aggregate Contributions and to the extent elected by the Employer, the Employer may make Qualified Non-elective Contributions on behalf of Non-highly Compensated Employees that are sufficient to satisfy either the Actual Deferral Percentage test or the Actual Contribution Percentage test, or both, pursuant to regulations under the Code, and in accordance this Schedule IV of the Plan.

Section IV.07. ANNUAL ADDITIONS - DEFINITIONS. For purposes of Section IV.08, the following definitions and rules of interpretation shall apply:

A. “Annual Additions” are the sum of the following amounts credited to a Participant’s Account for any Limitation Year:

(i) Compensation Deferral Contributions, Matching Contributions, and Qualified Matching Contributions;

(ii) Profit Sharing Contributions, Special Contributions, Transition Contributions provided in an applicable Appendix and Qualified Non-elective Contributions, if any;

(iii) Forfeitures, if any; and

(iv) Excess amounts reapplied to reduce Employer contributions under Section IV.08.

Except to the extent provided in Treasury Regulations, Annual Additions include any excess contributions described in Code Section 401(k), excess aggregate contributions described in Code Section 401(m), and excess deferrals described in Code Section 402(g), irrespective of whether the Plan distributes or forfeits such excess amounts. Annual Additions also include amounts allocated to an individual medical account (as defined in Code Section 415(l)(2)) included as part of a pension or annuity plan maintained by the Employer. Furthermore, Annual Additions include contributions attributable to post-retirement medical benefits allocated to the separate account of a Key Employee (as defined in Code Section 419(A)(d)(3)) under a welfare benefit fund (Code Section 419(e)) maintained by the Employer.

B. “Company.” Any corporation that is a member of a controlled group of corporations (as defined in Section 414(b) of the Code as modified by Section 415(h)) that includes Cardinal Health, Inc., or any trades or businesses (whether or not incorporated) that are under common control (as defined in Section 414(c) of the Code as modified by Section 415(h)) with Cardinal Health, Inc., or a member of an affiliated service group (as defined in Code

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Section 414(m)) that includes Cardinal Health, Inc., or any other entity required to be aggregated with Cardinal Health, Inc., pursuant to regulations under Section 414(o) of the Code.

C. “Compensation.” With respect to the Limitation Year means Compensation as defined in Section 1.10 disregarding any exclusions from Compensation, other than the exclusions described in subparagraphs (i), (ii), (iii), and (iv) of Section 1.10A. For purposes of applying the limitations of this Schedule IV, Compensation for a Limitation Year is the Compensation actually paid or includible in gross income during such Limitation Year.

D. “Defined Benefit Plan.” A retirement plan that does not provide for individual accounts for Employer contributions. The Administrative Committee shall treat all Defined Benefit Plans (whether or not terminated) maintained by the Employer as a single plan.

E. “Defined Contribution Plan.” A retirement plan that provides for an individual account for each participant and for benefits based solely on the amount contributed to the participant’s account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants that the Administrative Committee may allocate to such Participant’s account. The Administrative Committee shall treat as a Defined Contribution Plan an individual medical account (as defined in Code Section 415(l)(2)) included as part of a Defined Benefit Plan maintained by the Employer and a welfare benefit fund under Code Section 419(e) maintained by the Employer to the extent there are post-retirement medical benefits allocated to the separate account of a key employee (as defined in Code Section 419A(d)(3)). The Administrative Committee shall treat all Defined Contribution Plans (whether or not terminated) maintained by the Employer as a single plan.

F. “Limitation Year.” The Plan Year.

G. “Maximum Permissible Amount.” For a Limitation Year beginning on or after July 1, 2002, the maximum permissible amount with respect to any Participant shall be the lesser of:

(i) $40,000 (as adjusted in accordance with Code Section 415(d)), or

(ii) 100% of the Participant’s Compensation for the Limitation Year.

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If there is a short Limitation Year because of a change in Limitation Year, the Administrative Committee will multiply the $40,000 limitation (or larger limitation) by the following fraction:

Number of months in the short Limitation Year

12.

H. “Projected Annual Benefit.” The annual retirement benefit (adjusted to an actuarially equivalent straight life annuity if the plan expresses such benefit in a form other than a straight life annuity or qualified joint and survivor annuity) to which a Participant would be entitled under a Defined Benefit Plan on the assumptions that he continues employment until the normal retirement age (or current age, if that is later) thereunder, that his Compensation continues at the same rate as in effect for the Limitation Year under consideration until such age, and that all other relevant factors used to determine benefits under the Defined Benefit Plan remain constant as of the current Limitation Year for all future Limitation Years.

I. Required Plan Aggregation. For purposes of applying the limitations of Code Section 415(b), (c) and (e) applicable to a Participant for a particular Limitation Year, all qualified Defined Benefit Plans (without regard to whether a plan has been terminated) ever maintained by the Company will be treated as one Defined Benefit Plan and all qualified Defined Contribution Plans (without regard to whether a plan has been terminated) ever maintained by the Company will be treated as part of this Plan.

Section IV.08. ANNUAL ADDITION — LIMITATIONS. The amount of the Annual Addition that may be credited under this Plan to any Participant’s Account as of any allocation date shall not exceed the Maximum Permissible Amount reduced by the sum of any credits of Annual Additions made to the Participant’s Account under all Defined Contribution Plans as of any preceding allocation date within the Limitation Year.

If an allocation date of this Plan coincides with an allocation date of any other qualified Defined Contribution Plan maintained by the Company, the amount of the Annual Additions that may be credited under this Plan to any Participant’s Account as of such date shall be an amount equal to the product of the amount to be credited under this Plan without regard to this Article IV multiplied by the lesser of one or a fraction, the numerator of which is the amount described in this Section IV.08 during the Limitation Year and the denominator of which is the amount that would otherwise be credited on this allocation date under all Defined Contribution Plans without regard to this Schedule IV.

If contributions to this Plan on behalf of a Participant are to be reduced prior to their contribution to the Plan as a result of this Schedule IV, such reduction shall be effected by first reducing the amount of any Compensation Deferral Contributions (along with any corresponding Non-Safe Harbor Matching Contributions) on behalf of such Participant, and then, if necessary, by reducing the Employer Contributions and/or Transition Contributions that would otherwise have been allocated to a Participant’s Account. If, as a result of either

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(a) the allocation of forfeitures, or (b) a reasonable error in estimating a Participant’s Compensation, or (c) under the limited facts and circumstances that the Commissioner of Internal Revenue finds justify the availability of the rules set forth in subsections A-D of this Section IV.08, the allocation of Annual Additions under the terms of the Plan for a particular Participant would cause the limitations of Code Section 415 applicable to that Participant for the Limitation Year to be exceeded, the excess amounts shall not be deemed to be Annual Additions in that Limitation Year if they are treated as follows:

A. The excess amounts in the Participant’s Account consisting of Compensation Deferral Contributions and any gains attributable thereto shall be paid to the Participant as soon as administratively feasible. Any amount so distributed shall be disregarded for purposes of complying with the requirements of Code Section 402(g), the Actual Deferral Percentage test of Code Section 401(k)(3) and the Actual Contribution Percentage test of Code Section 401(m)(2).

B. The excess amounts in the Participant’s Account consisting of Employer Contributions, Non-Safe Harbor Matching Contributions or Transition Contributions provided in Schedule V shall be used to reduce Employer Contributions, Matching Contributions or Transition Contributions provided in an applicable Appendix respectively for the next Limitation Year (and succeeding Limitation Years, as necessary) for that Participant if that Participant is covered by the Plan as of the end of the Limitation Year. However, if that Participant is not covered by the Plan as of the end of the Limitation Year, then the excess amounts must be held unallocated in a suspense account for the Limitation Year and allocated and reallocated in the next Limitation Year to all of the remaining Participants in the Plan. If a suspense account is in existence at any time during a particular Limitation Year, other than the first Limitation Year described in the preceding sentence, all amounts in the suspense account must be allocated and reallocated to Participants’ Accounts (subject to the limitations of Code Section 415) before any contributions that would constitute Annual Additions may be made to the Plan for that Limitation Year. Furthermore, the excess amounts must be used to reduce Employer Contributions, Matching Contributions and Transition Contributions provided in Schedule V for the next Limitation Year (and succeeding Limitation Years, as necessary) for all of the remaining Participants in the Plan. For purposes of this subdivision, except as provided in Section IV.08.A, excess amounts may not be distributed to Participants or Former Participants.

C. In the event of termination of the Plan, the suspense account described above, shall revert to the Company to the extent it may not then be allocated to any Participant’s Account.

D. Notwithstanding any other provisions in this Schedule IV, the Company shall not contribute any amount that would cause an allocation to the suspense account as of the date the contribution is allocated. If the contribution is made prior to the date as of which it is to be allocated, then such contribution shall

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not exceed an amount that would cause an allocation to the suspense account if the date of contribution were an allocation date.

E. If a Participant’s Annual Additions would result in an excess amount for a Limitation Year, the excess amount will be deemed to consist of the Annual Additions last allocated except that Annual Additions attributable to a welfare benefit fund will be deemed to have been allocated first regardless of the actual allocation date.

Section IV.09. ADP/ACP TESTING METHOD. For Plan Years on and after January 1, 1997 but prior to January 1, 2005, the Plan used the current year testing method to satisfy the Actual Deferral Percentage and Actual Contribution Percentage Tests.

Section IV.10. QSLOB TESTING PROVISIONS. For any testing year (as defined in Code Section 414(r)) the Company may elect (by filing with the IRS at the time and in the manner prescribed by the IRS) to use qualified separate lines of business (“QSLOB”) in order to satisfy nondiscrimination and/or coverage testing for the Plan.

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SCHEDULE V

SPECIAL PROVISIONS FOR PRIOR MERGED PLANS

A. Special Rules Regarding Participants in the Owen Healthcare, Inc. 401(k) Savings Plan.

(i) A Participant employed by Cardinal Health 109, Inc. (f/k/a Owen Healthcare, Inc.)(“Owen”) on June 30, 1998 shall, to the extent applicable, continue to have a separate After-tax Contribution Account and a separate Participant IRA Account under the Plan.

(ii) A Participant employed by Owen on June 30, 1998 shall continue to be permitted to obtain in-service withdrawals from his after-tax contributions Account.

(iii) A Participant employed by Owen on June 30, 1998 shall continue to be permitted to obtain in-service withdrawals from his Participant IRA Account in an amount equal to all, but not less than all, of the amounts held in such Participant IRA Account.

B. Special Rules Regarding Participants in the Packaging Coordinators, Inc. Money Purchase Pension Plan. Participants employed by Packaging Coordinators Inc. on June 30, 1998 shall continue to have the option to receive distributions from the Plan in the form of a 100% Qualified Joint and Survivor Annuity, to the extent applicable, or in the form of a single life annuity. A single life annuity shall continue to be the normal form of benefit payable to an unmarried Participant.

C. Transition Contribution for Participants in the R.P. Scherer Employees’ Retirement Income Plan. The Employer shall make a Transition Contribution on behalf of an Employee of Cardinal Health 409, Inc. (f/k/a R.P. Scherer Corporation) who:

(i) was a Participant in the R.P. Scherer Corporation Employees’ Retirement Income Plan (the “Pension Plan”) on December 31, 2002;

(ii) completed at least five (5) Years of Service on or before December 31, 2002;

(iii) attained at least age fifty (50) on or before December 31, 2002; and

(iv) was employed by Cardinal Health 409, Inc. on the last day of an applicable fiscal year for fiscal years ending on or before June 30, 2005. For fiscal years beginning on and after July 1, 2005, this subsection (iv) shall not apply.

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The amount of the Transition Benefit shall be a percentage of Compensation (for the Plan Year or fiscal year, as applicable and as set forth below) based on the Participant’s Years of Service in the Pension Plan as of December 31, 2002:

Years of Service (as of 12/31/02)	Transition Benefit Percentage
Less than five (5)	0	%
At least five (5) but less than 10 (ten)	1.5	%
At least ten (10) but less than fifteen (15)	3.5	%
At least fifteen (15) but less than twenty (20)	5.5	%
At least twenty (20) but less than twenty-five (25)	7.5	%
Twenty-five (25) or more	9.5	%

The Transition Benefit shall be contributed to the Participant’s Account for each fiscal year in which the Participant satisfies the criteria set forth in this subsection C beginning on January 1, 2003 and ending on June 30, 2005, and, effective July 1, 2005, for each Plan Year (or remaining portion thereof) beginning on July 1, 2005 and ending on December 31, 2008.

Compensation used to determine the amount of the Transition Benefit for an applicable allocation period shall be based on the following:

Fiscal Year (July 1 to June 30)	Period Used to Determine Compensation
2003	January 1, 2003 to June 30, 2003
2004	July 1, 2003 to June 30, 2004
2005	July 1, 2004 to June 30, 2005
Calendar Year (eff. July 1, 2005)	Period Used to Determine Compensation
2005	July 1, 2005 to December 31, 2005
2006	January 1, 2006 to December 31, 2006
2007	January 1, 2007 to December 31, 2007
2008	January 1, 2008 to December 31, 2008

D. Special Rules Regarding Active Employees of Medical Products and Services (f/k/a Allegiance Corporation).

(i) For purposes of Employer Contributions under the Plan, the term “Compensation” shall mean “Base Pay” until July 1, 2005 defined as follows:

1. With respect to Employees who are compensated based upon sales commissions and with greater than 25% of pay at risk, Base Pay includes 75% of the Employee’s regular pay, draw and commissions for the Plan Year, but excludes shift differentials, exception pay,

-96-

Management Incentive Compensation Plan (“MICP”), lump sum merit pay, expenses, performance pay and any other payments

2. With respect to Employees who are not compensated based upon sales commissions or who are paid commissions but with less than 25% of pay at risk, Base Pay includes regular pay, back pay, vacation pay, holiday pay, sick pay, funeral pay, jury pay, military pay and other paid absences, but excludes overtime, short-term disability, shift differential, exception pay, MICP, lump sum merit pay, performance pay and any other payments.

(ii) A Participant who (1) was employed by Allegiance Corporation prior to January 1, 2001, (2) is fully vested in his Non-Safe Harbor Matching Contributions and Employer Contributions Accounts and (3) who has attained his fifth anniversary of participation may elect to withdraw any or all of his Matching Contributions or amounts held in his Profit Sharing Account at any time. A Participant who elects to make such a withdrawal is ineligible to make Compensation Deferral Contributions for a period of six months commencing on the first day of the first calendar month following the date on which the accounts are valued for purposes of making such withdrawal. Such Participant’s Compensation Deferral Contributions shall recommence at the same rate (unless the Participant elects otherwise) on the first day of the sixth full calendar month following the date of the commencement of the suspension.

E. Special Rules Regarding Former Participants in the Alaris Medical Systems Retirement Investment Plan. A Participant may withdraw all or part of his interest held in the Alaris Medical Systems Retirement Investment Plan credited prior to December 31, 1997, excluding earnings credited after December 31, 1997 and Pre-Tax Contributions, at any time. In addition to any other rules the Administrative Committee may prescribe, such withdrawals shall be limited to one withdrawal per Plan Year in a whole dollar amount of $500 or more.

F. Non-Highly Compensated Employees Subject to a Reduction in Force. A Non-highly Compensated Employee who has completed one full year of Service but less than three years of Service and is terminated from employment under the terms of a designated reduction in force shall receive additional vesting service under Section 4.01.A of the Plan.

The Participant’s Account balance reflecting such additional vesting shall be calculated by multiplying the portion of his or her Account balance that is subject to the vesting provisions of Section 4.01 by a fraction, the numerator of which is the Participant’s calendar months of Service calculated from his or her date of hire and the denominator of which is 36, and by rounding the product up to the next whole percentage. A month of Service shall be included in the calculation of additional vesting service under this Section if the Participant has performed at least one Hour of Service during the calendar month. In no event shall a Participant be more than 100% vested in any amounts in his Account.

-97-

EX-99.04

Exhibit 99.04

FOURTH AMENDMENT

TO THE

CARDINAL HEALTH 401(k) SAVINGS PLAN

FOR EMPLOYEES OF PUERTO RICO

(As amended and restated January 1, 2005)

Background Information

A. Cardinal Health, Inc. maintains a retirement plan known as the Cardinal Health 401(k) Savings Plan for Employees of Puerto Rico (the “Plan”) for the benefit of eligible employees who live and work in Puerto Rico.

B. The Cardinal Health Financial Benefit Plans Committee (the “Committee”) oversees the administration of the Plan and is authorized to amend the Plan.

C. The Committee desires to amend the Plan to modify the definition of Compensation to exclude certain bonus payments that are partially or entirely guaranteed without regard to performance-based payment criteria.

D. The Committee also desires to amend the Plan to clarify certain provisions relating to Matching Contributions under the Plan.

E. Section 11.02 of the Plan permits the amendment of the Plan at any time.

Amendment of the Plan

The Plan is hereby amended as follows effective December 1, 2006:

1. Section 1.10 of the Plan is amended by the addition of a new subsection (vi) thereunder to read as follows:

(vi) Any bonus payment if such bonus payment is wholly or partially payable without regard to the attainment of a performance-based goal (i.e., guaranteed).

2. Section 3.06.B of the Plan is amended in its entirety to read as follows:

B. Safe Harbor Matching Contributions. On and after January 1, 2005, Matching Contributions sufficient to meet the “safe harbor” requirements of Section 401(k)(12) of the U.S. Code shall be made to each eligible Participant’s Account. Specifically, the Employer shall match 100% of each Participant’s Compensation Deferral Contributions that do not exceed 3% of the Participant’s Compensation and 50% of each Participant’s Compensation Deferral Contributions that exceed 3% of the Participant’s Compensation but that do not exceed 5% of the Participant’s Compensation. In addition, Safe Harbor Matching Contributions may not be made in an amount which would cause the Plan to fail to satisfy the requirements of U.S. Code Section 401(m)(11). Pursuant to Internal Revenue Service Notice 98-52, effective for Plan Years beginning on and after January 1, 2005, the limitation on Matching Contributions made at the Employer’s discretion on behalf of a Participant is an amount which, in the aggregate, does not exceed

four percent (4%) of the Participant’s Compensation. The limitation under Notice 98-52 shall be observed only to the extent required by law to meet the requirements for the safe harbors under U.S. Code Section 401(k)(12) and 401(m)(11).

3. All other provisions and terms of the Plan shall remain in full force and effect.

CARDINAL HEALTH, INC.
BY:	/s/ Susan M. Nelson
	Susan M. Nelson
ITS:	Senior Vice President of Total Rewards
DATE:	December 1, 2006

2

EX-99.05

Exhibit 99.05

GOOD FAITH INTERIM

AMENDMENT NUMBER FOUR TO THE

BAKER & HOSTETLER LLP DEFINED CONTRIBUTION PLAN AND TRUST

PROTOTYPE BASIC PLAN DOCUMENT #01 AND

NONSTANDARDIZED PROFIT SHARING ADOPTION AGREEMENT #001

WHEREAS, the Sponsoring Employer identified below maintains the Plan identified below through the adoption of the Adoption Agreement #001 for the Baker & Hostetler LLP Prototype Plan, Nonstandardized Profit Sharing Plan and Trust (the “Adoption Agreement”) and the Basic Plan Document #001 (“Basic Plan Document”);

WHEREAS, on December 29, 2004, the Internal Revenue Service (“IRS”) published final regulations under Code Sections 401(k) and (m), effective for plan years beginning on or after January 1, 2006 (“2006 401(k) Regulations”);

WHEREAS, Revenue Procedure 2005-66, as modified by Notice 2005-95, requires that any discretionary amendments related to the foregoing must be adopted by the end of the plan year in which the amendment is effective, and that non-discretionary amendments that relate to changes in the qualification requirements of Code Section 401, et seq. (or changes integral to such requirements), must be adopted by the later of (1) the end of the plan year that begins on or after January 1, 2006, or (2) by the Sponsoring Employer’s tax filing deadline (with extensions) for the fiscal year that contains the effective date of such changes;

WHEREAS, Notice 2005-95 confirms that the adoption of a good faith amendment that reflects the qualification requirements described above will not cause a plan to fail to be a prototype plan or adversely affect the Sponsoring Employer’s reliance on the opinion letter;

WHEREAS, Section 12.1[b] of the Basic Plan Document permits Baker & Hostetler LLP (the “Prototype Sponsor”), at any time, to make general amendments and amendments to reflect qualification changes to the Basic Plan Document and/or the Adoption Agreement with appropriate notice to the Sponsoring Employer;

WHEREAS, Section 12.1[a][1] of the Basic Plan Document permits the Sponsoring Employer, at any time, to amend the Plan with respect to the variable options set forth in the Adoption Agreement, and to amend the Plan to reflect qualification changes, by delivering to the Trustee signed copies of an amended Adoption Agreement or appropriate amendment to the Plan;

NOW THEREFORE, the Prototype Sponsor hereby amends the Adoption Agreement by the revision and/or addition of optional provisions, and amends the Basic Plan Document by the provisions set forth herein, effective as of the dates indicated herein. Such amendments are intended as good faith interim compliance with the final 2006 401(k) Regulations and related published guidance, and are to be construed in accordance with EGTRRA and subsequent related guidance. Further, the Sponsoring Employer hereby amends the Plan by selecting the amended options in the Adoption Agreement, effective as of the dates indicated herein, and hereby accepts the Prototype Sponsor’s amendment of the Adoption Agreement and Basic Plan Document effective as of January 1, 2006, or as of the earlier or later dates indicated.

IDENTIFICATION OF THE SPONSORING EMPLOYER AND THE PLAN

1. Name of Sponsoring Employer: Cardinal Health 414, Inc.

2. Business address: 7000 Cardinal Place

                                         (Street Address)

Dublin	Ohio	43017
(City)	(State)	(Zip Code)

3. Business telephone number: (614) 757-5000

4.      Business entity:	x C. Corp.	¨ S. Corp.	¨ Partnership	¨ Sole Proprietorship
	¨ Tax-Exempt Entity		¨ Limited Liability Company
	¨ Other: ______________________________

5. Employer tax identification number (EIN): 85-0229124

6. The Sponsoring Employer’s taxable year ends on: June 30

7. The Plan name will be: Syncor International Corporation Employees’ Savings and Stock Ownership Plan

8. Plan number: 002

9. Effective Date of Amendment Number Four: The amended elective options selected by the Sponsoring Employer and the amendments to the Basic Plan Document in this Amendment Number Four shall be effective as of January 1, 2006 (except as otherwise provided herein), and shall override any inconsistent options previously elected in Adoption Agreement #001, adopted by the Sponsoring Employer effective as of August 1, 2003 [indicate the effective date of the last restatement of the entire Adoption Agreement, such as January 1, 1997]. If no elective options are selected in this Amendment Number Four, the Sponsoring Employer shall be deemed to have only adopted the Prototype Sponsor’s amendment to the Basic Plan Document effective as of January 1, 2006.

INDEX AND INSTRUCTIONS FOR THIS INTERIM

GOOD FAITH AMENDMENT NUMBER FOUR

Section A. Amendments to the Adoption Agreement #001

Make any elections in this Section A that are necessary or appropriate. If no elections are necessary or appropriate, skip to the Signature page to affirmatively adopt all new options selected in the amended Adoption Agreements (if any) and all of the amendments made to the Basic Plan Document.

Section B. Amendments to the Basic Plan Document

No elections are necessary in Section B, which are amendments to the Basic Plan Document. Skip to the Signature page to affirmatively adopt all new options selected in the amended Adoption Agreements (if any) and all of the amendments made to the Basic Plan Document.

2

INTERIM GOOD FAITH AMENDMENT NUMBER FOUR-

TO THE

BAKER & HOSTETLER LLP DEFINED CONTRIBUTION PLAN AND TRUST

PROTOTYPE BASIC PLAN DOCUMENT AND

NONSTANDARDIZED PROFIT SHARING ADOPTION AGREEMENT #001

Section A. Amendments to the Adoption Agreement #001

[Instructions: Make any elections in this Section A that are necessary or appropriate. After making elections, or, if no elections are necessary or appropriate, skip to the Signature page to affirmatively adopt all options elected in the amended Adoption Agreement (if any), and all amendments made to the Basic Plan Document by the 2006 401(k) Regulations and related guidance.]

1. Special One-Time Irrevocable Elections. Item II.L of the Adoption Agreement is hereby replaced by a new Item II.L of the Adoption Agreement, such new provision to read in its entirety as follows to reflect the Treas. Reg. § 1.401(k)-1(a)(3), which provides revised rules for special one-time irrevocable elections. (See Section B of this Amendment, revising Section 4.4[f] of the Basic Plan Document.):

L. Special One-Time Irrevocable Elections. If elected here x, effective for Plan Years beginning on or after January 1, 2006 [indicate an effective date not earlier than the first day of the Plan Year beginning on or after January 1, 2006], an Employee may make a one-time irrevocable election as provided in Section 4.4[f] of the Basic Plan Document, as amended.

2. Treatment of Forfeitures of Matching Contributions Related to Excess Contributions and Forfeitures of ACP Test Safe Harbor Matching Contributions. Item VIII.F.1 of the Adoption Agreement is hereby amended by renumbering the present text as Item VIII.F.1.a, and revising such text to limit its application only to the treatment of forfeitures of nonvested Matching Contributions other than Excess Aggregate Contributions, or forfeitures of Matching Contributions or Qualified Matching Contributions related to Excess Deferrals or Excess Contributions, and other than forfeitures of nonvested ACP Test Safe Harbor Matching Contributions. Further, Item VIII.F.1. of the Adoption Agreement is hereby amended by the addition of the following Item VIII.F.1.b, relating to the forfeiture of Excess Aggregate Contributions (resulting from the failure of the Actual Contribution Percentage test), the forfeiture of Matching Contributions (related to Excess Deferrals or Excess Contributions), or the forfeiture of Qualified Matching Contributions (related to, for example, Excess Deferrals), and the addition of Item VIII.F.1.c, relating to the treatment of nonvested ACP Test Safe Harbor Matching Contributions (resulting from forfeiture following the termination of a Participant):

b. Forfeitures of Excess Aggregate Contributions. Unless the Sponsoring Employer elects an alternate method is selected below, effective for Plan Years beginning on or after January 1, 2006, forfeitures of relating to the forfeiture of Excess Aggregate Contributions (resulting from the failure of the Actual Contribution Percentage test), forfeiture of Matching Contributions (related to Excess Deferrals or Excess Contributions), or Qualified Matching Contributions (related to, for example, Excess Deferrals), shall be applied to reduce Employer Contributions (which includes Matching Contributions and/or Employer Non-Elective Contributions) for the Plan Year in which such excess arose, but allocated as provided in Item b.i., below, to the extent the applicable forfeiture exceeds Employer Contributions for the Plan Year, or to the extent the Employer has already contributed for such Plan Year.

In the alternative to the foregoing allocation method, if elected here ¨, effective for Plan Years beginning on or after                      [indicate an effective date no earlier than January 1, 2006], forfeitures of Excess Aggregate Contributions (resulting from the failure of the Actual Contribution Percentage test), forfeitures of Matching Contributions related to Excess Deferrals or Excess Contributions or forfeitures of Qualified Matching Contributions (resulting, for example, from the distribution of Excess Deferrals) from shall be [select one]:

i. Allocated, after all other forfeitures under the Plan, to the Matching Contribution account of each Non-highly Compensated Employee who made Elective Deferrals (or after-tax Employee Contributions, if matched) in the ratio that each such Participant’s

Baker & Hostetler LLP Prototype Plan	Section A
2006 Interim Amendment Number Four	Page 1

Compensation for the Plan Year bears to the total Compensation of all such Participants for such Plan Year. For Plan Years beginning on or after January 1, 2006, such forfeitures shall be allocated to each Non-highly Compensated Employee in the ratio that each such Participant’s Elective Deferrals for the Plan Year bears to the total Elective Deferrals of all such Participants for such Plan Year.

¨ ii. Allocated according to the following method: ________________________________________

 _______________________________________________________________________________

 _______________________________________________________________________________

 _______________________________________

[Note: Forfeitures cannot be used as Qualified Nonelective Contributions, Qualified Matching Contributions or Elective Deferrals. For Plan Years beginning on or after January 1, 2006, other than the default matching allocation method provided above, or the allocation method described in item i., above, certain formulas such as flat-dollar allocations or allocations that target matches for lower paid Non-highly Compensated Employees must satisfy additional requirements specified in Treas. Reg. § 1.401(m)-2(a)(5).

c. Forfeitures of Nonvested ACP Test Safe Harbor Matching Contributions. If the Safe Harbor method has been selected and if ACP Test Safe Harbor Matching Contributions are made that are subject to a vesting schedule, unless the Sponsoring Employer elects an alternate method as provided below, effective for Plan Years beginning on or after January 1, 2006, forfeitures of nonvested ACP Test Safe Harbor Matching Contributions will be used to reduce ACP Test Safe Harbor Matching Contributions.

However, if elected here ¨, effective for Plan Years beginning on or after                      [indicate an effective date no earlier than January 1, 2006], forfeitures of Nonvested ACP Test Safe Harbor Matching Contributions shall be allocated according to the following method: _________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

Note: The Sponsoring Employer may specify an alternate method of allocating forfeitures of Matching Contributions that are designated as ACP Test Safe Harbor Matching Contributions; however, such forfeitures may not be used as ADP Test Safe Harbor Contributions, and if used as anything other than ACP Test Safe Harbor Contributions, the Plan will not be exempt from Code Section 416.

3. Qualified Matching Contributions and Qualified Non-Elective Contributions. Item XV1.E of the Adoption Agreement is amended by the addition of the following revised options to allow Sponsoring Employers to elect to contribute Qualified Matching Contributions and Qualified Non-Elective Contributions in a manner consistent with the 2006 401(k) Regulations which eliminated the “bottom up” method of allocation and provided other limitations (as detailed under Sections 4.6[d] and [e] of the Basic Plan Document, amended by Section B of this Amendment Four):

E. Qualified Non-elective Contributions and Qualified Matching Contributions Taken into Account for Purposes of the Actual Deferral Percentage Test and the Actual Contribution Percentage Test. As elected below, Qualified Matching Contributions and/or Qualified Non-elective Contributions may be contributed to the Plan. In addition, those contributions made under this Plan (or any other Plan of the Employer) may be taken into account for purposes of calculating the Actual Deferral Percentage test and/or the Actual Contribution Percentage test, as appropriate. Further, unless such contributions are provided to either all Participants or to all Non-Highly Compensated Employees, the rules and restrictions provided by Sections 4.6[d] and [e] of the Basic Plan Document, as amended in Section B of this Amendment Number Four, shall apply. In addition, as provided in Item 3, below, the Sponsoring Employer may elect to use Elective Deferrals as Contribution Percentage amounts in the Actual Contribution Percentage test. In determining the

Baker & Hostetler LLP Prototype Plan	Section A
2006 Interim Amendment Number Four	Page 2

combined Elective Deferrals and Roth Contributions for the purpose of the Actual Deferral Percentage test, the Employer may include Qualified Matching Contributions or such Qualified Non-elective Contributions under this Plan or any other plan maintained by the Employer. (Select all, some or none, as appropriate.)

1. Qualified Non-elective Contributions. According to the options selected below, the Employer may make Qualified Non-elective Contributions to the Plan in the amount indicated in Item a, and such Qualified Non-elective Contributions made under this Plan (or any other plan maintained by the Employer) shall be taken into account for purposes of the Actual Deferral Percentage or Actual Contribution Percentage Test as indicated in Item b. (Select a or b, or both.)

a. Election to Make Qualified Non-elective Contributions. If elected here ¨, effective for Plan Years beginning on or after __________________________ [indicate an effective date not earlier than the first day of the Plan Year beginning on or after January 1, 2006], the Employer will make Qualified Non-elective Contributions to the Plan:

i. On behalf of [select one]:

¨ A. All Participants

¨ B. All Participants who are Non-highly Compensated Employees

ii. In the amount of [select one]:

¨ A.                      percent [indicate an amount not more than 15%] of the Compensation of all Participants eligible to share in the allocation.

¨ B.                      percent of the net profits, but in no event more than $                    .

¨ C. If the Employer is using the current year testing method, in an amount necessary to satisfy the Actual Deferral Percentage test, and the Actual Contribution Percentage test.

¨ D. An amount determined by the Employer, subject to the restrictions provided by Section 4.6[d] of the Basic Plan Document.

Note Targeting Qualified Non-elective Contributions to the lowest paid Non-highly compensated Employees (i.e., the “bottoming up” method) is prohibited for Plan Years beginning after December 31, 2005. Thus, any allocation method other than one provided on behalf of all Participants or only to Non-highly Compensated Employees, in the amounts provided in Items A, B or C, above, must satisfy additional requirements specified in Treas. Reg. §§ 1.401(k)-2(a)(6) and 1.401(m)-2(a)(6) as provided in Section 4.6[d] of the Basic Plan Document.

b. Allocation Method of Qualified Non-elective Contributions. If elected here ¨, effective for Plan Years beginning on or after ____________________________________ [indicate an effective date not earlier than the first day of the Plan Year beginning on or after January 1, 2006], the amount of Qualified Non-elective Contributions made under this Plan (or any other plan of the Employer) taken into account as Elective Deferrals or Contribution Percentage amounts, as

Baker & Hostetler LLP Prototype Plan	Section A
2006 Interim Amendment Number Four	Page 3

appropriate, for purposes of calculating the Actual Deferral Percentage test, and/or Actual Contribution Percentage tests, shall be allocate as follows:

i. If elected here, ¨ for the Actual Deferral Percentage test:

¨ A. All such Qualified Non-elective Contributions contributed by the Employer shall be taken into account as Elective Deferrals for purposes of the Actual Deferral Percentage test.

¨ B. Only such Qualified Non-elective Contributions needed to satisfy the Actual Deferral Percentage test stated in Basic Plan Section 4.5 shall be taken into Account as Elective Deferrals. [This Item i.B., if selected, shall be effective only for Plan Years in which the Employer has elected to use the current year testing method for the applicable test.]

ii. If elected here, ¨ for the Actual Contributions Percentage test:

¨ A. All such Qualified Non-elective Contributions contributed by the Employer shall be taken into account as Contribution Percentage amounts for purposes of calculating the Actual Contribution Percentage test.

¨ B. Only such Qualified Non-elective Contributions needed to satisfy the Actual Contribution Percentage test stated in Basic Plan Document Section 4.6 shall be taken into account as Contribution Percentage amounts. [This Item ii.B., if selected, shall be effective only for Plan Years in which the Employer has elected to use the current year testing method for the applicable test.]

2. Qualified Matching Contributions. According to the options selected below, the Employer may make Qualified Matching Contributions to the Plan on behalf of the Participants and in the amount indicated in Item a, and such Qualified Matching Contributions made under this Plan (or any other plan maintained by the Employer) shall be taken into account as Elective Deferrals for purposes of the Actual Deferral Percentage as indicated in Item b.

a. Election to Make Qualified Matching Contributions. If elected here ¨, effective for Plan Years beginning on or after                                      [indicate an effective date not earlier than the first day of the Plan Year beginning on or after January 1, 2006], the Employer will make Qualified Matching Contributions to the Plan

i. On behalf of [select one]:

¨ A. All Participants.

¨ B. All Participants who are Non-highly Compensated Employees.

ii. Who make [select one or both]:

¨ A. Elective Deferrals.

¨ B. Post-Tax Participant Contributions to the Plan.

Baker & Hostetler LLP Prototype Plan	Section A
2006 Interim Amendment Number Four	Page 4

iii. According to the foregoing selections, the Employer shall contribute and allocate to each such Participant’s Qualified Matching Contribution account an amount equal to:

¨ A.                      percent [indicate an amount not more than 100%] of the Participant’s Elective Deferrals.

¨ B.                      percent [indicate an amount not more than 100%] of the Participant’s Post-Tax Contributions.

In addition, the Employer shall not match amounts provided in Items iii.A. or B., above, in excess of                      dollars, or in excess of                                  percent, of the Participant’s Compensation.

b. Allocation Method of Qualified Matching Contributions. If elected here ¨, effective for Plan Years beginning on or after                     [indicate an effective date not earlier than the first day of the Plan Year beginning on or after January 1, 2006], Qualified Matching Contributions made under this Plan or under any other plan of the Employer may be included as Elective Deferrals for purposes of the Actual Deferral Percentage Test. The amount of Qualified Matching Contributions elected in Item a., above, taken into account as Elective Deferrals for purposes of calculating the Actual Deferral Percentage test, shall be determined as follows (select i. or ii.):

¨ i. All such Qualified Matching Contributions contributed by the Employer under Item a., above, shall be taken into account as Elective Deferrals for purposes of the Actual Deferral Percentage test.

¨ ii. Only such Qualified Matching Contributions needed to satisfy the Actual Deferral Percentage test provided in Basic Plan Document Section 4.5 shall be taken into account as Elective Deferrals. [This Item ii., if selected, shall be effective only for Plan Years in which the Employer has elected to use the current year testing method for Actual Deferral Percentage test.]

3. Allocating Elective Deferrals as Contribution Percentage Amounts. If elected here ¨, effective for Plan Years beginning on or after ___________________________ [indicate an effective date not earlier than the first day of the Plan Year beginning on or after January 1, 2006], the amount of Elective Deferrals taken into account as Contribution Percentage amounts for purposes of calculating the Actual Contribution Percentage test shall be determined as follows [select i. or ii.]:

¨ a. All such Elective Deferrals.

¨ b. Such Elective Deferrals needed to meet the Actual Contribution Percentage test as provided in Basic Plan Document Section 4.6. [This Item b. shall be effective only for Plan Years in which the Employer has elected to use the current year testing method for the Actual Contribution Percentage test.]

Note: Elective Deferrals contributed under a safe harbor plan may not be taken into account for the Actual Contribution Percentage test. Also, Elective Deferrals used to satisfy the Actual Deferral Percentage test may not be used to satisfy the Actual Contribution Percentage test.

Baker & Hostetler LLP Prototype Plan	Section A
2006 Interim Amendment Number Four	Page 5

4. Election of “Inconsistent” Testing Year Methods. Item XVI of the Adoption Agreement is amended by the addition of the following new provision to allow Sponsoring Employers to elect to use the prior year testing method or current year testing method for both the Actual Deferral Percentage and Actual Contribution Percentage test, or for just one of the tests, as now permitted by the 2006 401(k) Regulations:

F. Current or Prior Testing Method Effective Dates – 2006 and Later. If elected here ¨, effective for Plan Years beginning on or after                      [indicate an effective date not earlier than the first day of the Plan Year beginning on or after January 1, 2006], the Employer may elect to utilize the prior year testing method or current year testing method for both the Actual Deferral Percentage test and the Actual Contribution Percentage test, or for a single test.

¨ 1. Same Testing Method. The Employer has elected to use the same testing method for both the Actual Deferral Percentage test and the Actual Contribution Percentage test as set for herein:

a. For 2006: ¨ prior year testing method, or ¨ current year testing method.

b. For 2007: ¨ prior year testing method, or ¨ current year testing method.

c. For 2008: ¨ prior year testing method, or ¨ current year testing method.

¨ 2. Separate Testing Methods. The Employer has elected to use different testing methods for each of the Actual Deferral Percentage test and Actual Contribution Percentage test, as set forth herein for the 2006, 2007 and 2008 Plan Years:

a. Effective for the Plan Year beginning in 2006:

i. For the Actual Deferral Percentage Test (select one): ¨ prior year testing method, or ¨ current year testing method.

ii. For the Actual Contribution Percentage Test (select one): ¨ prior year testing method or, ¨ current year testing method

b. Effective for the Plan Year beginning in 2007:

i. For the Actual Deferral Percentage Test (select one): ¨ prior year testing method, or ¨ current year testing method.

ii. For the Actual Contribution Percentage Test (select one): ¨ prior year testing method or, ¨ current year testing method

c. Effective for the Plan Year beginning in 2008:

i. For the Actual Deferral Percentage Test (select one): ¨ prior year testing method, or ¨ current year testing method.

ii. For the Actual Contribution Percentage Test (select one): ¨ prior year testing method or, ¨ current year testing method

Note: Once made, the Sponsoring Employer can elect the prior year testing method for a Plan Year only if the Plan has used the current year testing method for each of the preceding 5 Plan Years (or if lesser, the number of Plan Years the Plan has been in existence) or if, as a result of a merger or acquisition described in Code § 410(b)(6)(C)(i), the Sponsoring Employer maintains both a plan using the prior year testing method and a plan using the current year testing method, and the change is made within the transition period described in § 410(b)(6)(C)(ii).

Baker & Hostetler LLP Prototype Plan	Section A
2006 Interim Amendment Number Four	Page 6

INTERIM GOOD FAITH AMENDMENT NUMBER FOUR-

TO THE

BAKER & HOSTETLER LLP DEFINED CONTRIBUTION PLAN AND TRUST

PROTOTYPE BASIC PLAN DOCUMENT #01

NONSTANDARDIZED PROFIT SHARING ADOPTION AGREEMENT #001

Section B. Amendments to the Basic Plan Document

[Instructions: No elections are necessary in this Section B. These are the amendments to the provisions of the Basic Plan Document that reflect the changes made by the 2006 401(k) Regulations and related guidance. Skip , to the Signature page to affirmatively adopt all options elected in the amended Adoption Agreement (if any), and all amendments made to the Basic Plan Document by the 2006 401(k) Regulations and related guidance.]

1. Severance from Employment. Effective for Plan Years beginning on or after January 1, 2006, Article I of the Basic Plan Document is amended by the addition of the following new Section 1.51 to the end thereof relating to the definition of Severance from Employment, as revised by the 2006 401(k) Regulations:

1.51 Severance from Employment. Effective for Plan Yeas beginning on or after January 1, 2002, Severance from Employment shall have the meaning provided in Code Section 401(k)(2)(B)(i). Effective for Plan Years beginning or after January 1, 2006, a change in status from a common law employee to a Leased Employee shall not constitute a Severance from Employment. In addition, a Participant does not have a Severance from Employment if, in connection with a change of employment, the Participant’s new employer maintains this Plan with respect to that Participant, for example, if that new employer continues or assumes sponsorship of this Plan or accepts a transfer of Plan assets and liabilities with respect to the same Participant.

2. Definition of Matching Contributions and the Prohibition of Prefunding. Effective for Plan Years beginning on or after January 1, 2006, Section 4.1[e] of the Basic Plan Document related to Employer Contributions is amended by the addition of the following to reflect the restrictions and requirements revised by the 2006 401(k) Regulations:

Notwithstanding the foregoing limitations to the contrary, effective for Plan Years beginning on or after January 1, 2006, for purposes of this Section 4.1, a Matching Contribution is an Employer contribution to the Plan (including a contribution made at the Employer’s discretion) on account of a Participant’s Pre-Tax Contributions or Post-Tax Participant Contribution, if any, to this Plan or any other plan maintained by an Employer, and includes any forfeiture allocated on the basis of Participant Pre-Tax Contributions, Employer Matching Contributions, or Participant Contributions.

[i] Whether an Employer contribution is made on account of a Participant Pre-Tax Contributions or Post-Tax Contribution is determined on the basis of all relevant facts and circumstances, including the relationship between the Employer contribution and Participant actions outside the Plan. An Employer contribution made to a defined contribution plan on account of contributions made by a Participant under an Employer-sponsored savings arrangement not held in a plan or arrangement that is intended to be a qualified plan or other arrangement described in Treas. Reg. §1.402(g)-1(b) is not a Matching Contribution.

[ii] The Employer contribution will not be a Matching Contribution made with respect to the Participant’s Pre-Tax Contributions if, except for occasional, bona fide administrative considerations, it precedes the earlier of [A] the performance of services relating to the Pre-Tax Contribution, or [B] when the Compensation subject to the election or salary reduction agreement would be payable to the individual in the absence of an election to defer. Further, an Employer contribution is not a Matching Contribution made on account of the Participant Pre-Tax Contribution if it is contributed before the Participant Pre-Tax Contribution. In addition, effective January 1, 2006, any Matching Contribution for a prepayment of a Pre-Tax Contribution that is otherwise permitted according to Notice 2002-48 may not be taken into account for purposes of

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the Actual Contribution Percentage test and the prepayment would not satisfy any Plan requirement to provide Matching Contributions.

[iii] The foregoing restriction on pre-funding in subsection [ii] does not apply to the allocation of forfeitures of Employer Matching Contributions.

3. Prefunding Deferrals Prohibited and Annual “Effective Opportunity” to Defer Required. Effective for Plan Years beginning on or after January 1, 2006, Section 4.4[d] of the Basic Plan Document, defining Participant Elective Deferrals, is amended by the addition of the following to reflect the restrictions and requirements revised by the 2006 401(k) Regulations:

Notwithstanding Section 4.4[d] of the Basic Plan Document to the contrary, effective calendar years beginning on or after January 1, 2006, a Participant’s Elective Deferral (either pre-tax or Roth Contribution) cannot relate to Compensation that is payable prior to the Sponsoring Employer’s adoption or effective date of a cash or deferred arrangement. Participants must be provided with an “effective opportunity” to make or change elections at least once per year. In addition, except for occasional, bona fide administrative considerations, contributions made pursuant to a Participant’s Elective Deferral made through a salary reduction agreement cannot precede the earlier of [i] the performance of services relating to the contribution and [ii] when the Compensation subject to the election or salary reduction agreement would be payable to the Participant in the absence of an election to defer. In addition, effective calendar years beginning on or after January 1, 2006, prepayments permitted according to Notice 2002-48 may not be taken into account for purposes of the Actual Deferral Percentage and Actual Contribution Percentage tests.

4. One-Time Irrevocable Election. Effective for Plan Years beginning on or after January 1, 2006, Section 4.4[f] of the Basic Plan Document is hereby replaced by the following new Section 4.4[f]:

[f] One-Time Irrevocable Election: If elected in the Section A of this Amendment Number Four, effective for Plan Years beginning on or after January 1, 2006, upon first becoming eligible under this or any other plan of the Employer described in Code Section 219(g)(5)(A) (whether or not such plan or arrangement has been terminated), an Employee may make a one-time irrevocable election to have contributions equal to a specified amount of percentage of Compensation (including no amount of Compensation) made by the Employer on the Employee’s behalf to the Plan, or to any other plan maintained or established by the Employer (including plans not yet established) for the duration of the Employee’s employment with the Employer, or, in the case of a defined benefit plan, to receive accruals or other benefits (including no benefits) under such plans. Contributions made under one-time irrevocable elections shall not be treated as a cash or deferred election, and are not includible in the Employee’s gross income by reason of Treas. Reg. Section 1.402(a)-1(d). Any one-time irrevocable election made on or after January 1, 2006, according to this provision, shall be made in a manner consistent with Treas. Reg. Section 1.401(k)-1(a)(3) or other applicable guidance.

5. Gap Period Income Included in Excess Deferrals. Effective for Plan Years beginning on or after January 1, 2006, Sections 4.5[h][3] and 4.6[b], which relate to distributing allocated excess contributions and allocated excess aggregate contributions resulting from the Actual Deferral Percentage and Actual Contribution Percentage tests, are hereby amended by the addition of the following relating to the revised requirement to include gap period income in the distribution of Excess Deferrals:

For Plan Years beginning on or after January 1, 2006, income or loss allocable to the period between the end of the taxable year and seven days prior to the date of distribution must be included in the distribution. The Administrator may use any reasonable method for computing the income allocable to such excess deferrals or contributions, provided the method does not violate Section 401(a)(4) of the Code, is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participant’s accounts.

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6. Inconsistent Testing Methods Permitted. Effective for Plan Years beginning on or after January 1, 2006, Sections 4.5[f] and 4.6[a] of the Basic Plan Document, which relate to the Actual Deferral Percentage and Actual Contribution Percentage tests and the use of the current and prior year testing methods, are hereby amended by the addition of the following to permit the Sponsoring Employer to elect the application of the current year or prior year testing method to the Actual Deferral Percentage test and/or Actual Contribution Percentage test in an inconsistent manner:

Effective for Plan Years beginning January 1, 2006, the Sponsoring Employer may elect to utilize the prior year testing method or current year testing method for both the Actual Deferral Percentage test and the Actual Contribution Percentage test, or for a single test as selected in Section A of this Amendment Number Four. However, once the current year testing method has been selected, the Sponsoring Employer can elect the prior year testing method for a Plan Year only if the Plan has used current year testing method for each of the preceding five Plan Years (or if lesser, the number of Plan Years the Plan has been in existence) or if, as a result of a merger or acquisition described in Code Section 410(b)(6)(C)(i), the Sponsoring Employer maintains both a plan using prior year testing and a plan using current year testing, and the change is made within the transition period described in Code Section 410(b)(6)(C)(ii).

7. The Actual Deferral Percentage Test and Multiple Plans—Aggregation and Disaggregation. Effective for Plan Years beginning on or after January 1, 2006, Sections 4.5[f][A] and [B] of the Basic Plan Document, which relate to the determination of the Actual Deferral Percentage when there are multiple 401(k) plans, are hereby amended by the following, as appropriate:

Effective for Plan Years beginning on or after January 1, 2006, for purposes of Section 4.5[f][A] of the Basic Plan Document, the individual deferral ratio for any Highly Compensated Employee for the Plan Year who is eligible to have Elective Deferrals (and, if applicable, Roth Contributions and any Qualified Non-elective Contributions or Qualified Matching Contributions—or both—to the extent treated as an Elective Deferral for the purpose of the Actual Deferral Percentage test) allocated to his or her accounts under two or more cash or deferred arrangements described in Code Section 401(k) maintained by the Employer, shall be determined as if such Pre-Tax Contributions (and, if applicable, Roth Contributions and any Qualified Non-elective Contributions or Qualified Matching Contributions—or both—to the extent treated as an Elective Deferral) were made under a single arrangement. If a Highly Compensated Employee participates in two or more cash or deferred arrangements of the Employer that have different plan years, all Elective Deferrals (and, if applicable, Roth Contributions and any Qualified Non-elective Contributions or Qualified Matching Contributions—or both—to the extent treated as an Elective Deferral) made under all such arrangements within the single plan year of the plan being tested shall be aggregated for purposes of determining the individual deferral ratio of the plan being tested, without regard to the plan year of each plan under which such contribution was made.

Effective for Plan Years beginning on or after January 1, 2006, in addition to the aggregation rules of Section 4.5[f][B] of the Basic Plan Document, if the Plan provides for the prior year testing method for the Actual Deferral Percentage test and if more than ten percent (10%) of the Non-highly Compensated Employees are involved in a plan coverage change as defined in Treas. Reg. § 1.401(k)-2(c)(4), the Non-highly Compensated Employees’ Actual Deferral Percentage for the prior year will be the weighted average of the Actual Deferral Percentages for the prior year for the subgroups of Non-highly Compensated Employees, determined according to rules provided by Treas. Reg. § 1.401(k)-2(c)(4). In addition, plans may be aggregated in order to satisfy Code Section 401(k) testing only if they have the same plan year and use the same Actual Deferral Percentage testing method. Otherwise, plans must be disaggregated if they use different current or prior year testing methods, and a 401(k) safe harbor plan must be disaggregated from a plan that uses the Actual Deferral Percentage test.

8. The Actual Contribution Percentage Test and Multiple Plans—Aggregation and Disaggregation. Effective for Plan Years beginning on or after January 1, 2006, Section 4.6[a][B] and [C], which relate to the calculation of the average contribution percentage under the Actual Contribution Percentage test when multiples plans are aggregated, are amended by the addition of the following, as appropriate:

Effective for Plan Years that begin on or after January 1, 2006, for purposes of this Section 4.6[a][B], for any Highly Compensated Employee who is eligible to have Matching Contributions (and after-tax Participant Contributions, other than Roth Contributions) allocated on his or her behalf under two or more

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plans or arrangement described in Code Section 401(a), or cash or deferred arrangements described in Code Section 401(k) maintained by the Employer, the individual contribution ratio shall be determined as if the total of such contributions were made under each such plan and arrangement. If a Highly Compensated Employee participates in two or more such plans or arrangements that have different plan years, all such contributions made under all such plans and arrangements within the single plan year of the plan being tested shall be aggregated for purposes of determining the contribution ratio of the plan being tested, without regard to the plan year of each plan under which such contributions were made.

Effective for Plan Years that begin on or after January 1, 2006, in addition to the aggregation rules of Section 4.6[a][C], in the event this Plan satisfies the requirements of Code Section 401(m), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this Section 4.6 shall be applied by determining the Average Contribution Percentage of each group of Participants as if all such plans were a single plan. In addition, if the Plan provides for the prior year testing method, and if more than ten percent (10%) of the Non-highly Compensated Employees are involved in a plan coverage change as defined in Treas. Reg. § 1.401(m)-2(c)(4), the Non-highly Compensated Employees’ Actual Contribution Percentage for the prior year will be the weighted average of the Actual Contribution Percentages for the prior year for the subgroups of Non-highly Compensated Employees, determined according to rules provided by Treas. Reg. § 1.401(m)-2(c)(4). Plans may be aggregated in order to satisfy Code Section 401(m) only if they have the same plan year and use the same Average Contribution Percentage testing method. Otherwise, plans must be disaggregated if they use different current year or prior year testing methods, and a 401(k) safe harbor plan must be disaggregated from a plan that uses the Actual Contribution Percentage test.

9. Limits on Targeted Matching Contributions. Effective for Plan Years beginning on or after January 1, 2006, Section 4.6 of the Basic Plan Document is amended by the addition of new subsection [a][G]:

[G] A Matching Contribution with respect to an Elective Deferral for a Plan Year is not taken into account under the Actual Contribution Percentage test for an Non-highly Compensated Employee to the extent it exceeds the greatest of:

[i] five percent (5%) of the Non-highly Compensated Employee’s Code Section 414(s) compensation for Plan Year;

[ii] the Non-highly Compensated Employee’s Elective Deferrals for the Plan Year; and

[iii] the product of two (2) times the Plan’s “representative matching rate” and the Non-highly Compensated Employee’s Elective Deferrals for the Plan Year.

For purposes of this Section, the Plan’s “representative matching rate” is the lowest “matching rate” for any eligible Non-highly Compensated Employee among a group of Non-highly Compensated Employees that consists of half of all eligible Non-highly Compensated Employees in the Plan for the Plan Year who make Elective Deferrals for the Plan Year (or, if greater, the lowest “matching rate” for all eligible Non-highly Compensated Employees in the Plan who are employed by the Employer on the last day of the Plan Year and who make Elective Deferrals for the Plan Year).

For purposes of this Section, the “matching rate” for a Participant generally is the Matching Contributions made for such Participant divided by the Participant’s Elective Deferrals for the Plan Year. If the matching rate is not the same for all levels of Elective Deferrals for a Participant, then the Participant’s “matching rate” is determined assuming that a Participant’s Elective Deferrals are equal to six percent (6%) of Compensation.

If the Plan provides a Matching Contribution with respect to the sum of the Participant’s after-tax Participant contributions and Pre-Tax Elective Deferrals, then, for purposes of this Section, that sum is substituted for the amount of the Participant’s Elective Deferrals

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in subsections [ii] and [iii] above and in determining the “matching rate,” Participants who make either after-tax Participant contributions or Elective Deferrals are taken into account in determining the Plan’s “representative matching rate.” Similarly, if the Plan provides a Matching Contribution with respect to the Participant’s after-tax Participant contributions, but not Elective Deferrals, then for purposes of this Section, the Participant’s after-tax Participant contributions are substituted for the amount of the Participant’s Elective Deferrals in subsections [ii] and [iii] above and, in determining the “matching rate,” Participants who make after-tax Participant contributions are taken into account in determining the Plan’s “representative matching rate.”

10. Forfeiture of Nonvested Matching. Effective for Plan Years beginning on or after January 1, 2006, Section 4.6[b], relating to the forfeiture of nonvested matching contributions as a result of the Actual Contribution Percentage test, is amended by the addition of the following:

Forfeitures of Excess Aggregate Contributions: Forfeitures of Excess Aggregate Contributions may either be reallocated to the accounts of Non-highly Compensated Employees or applied to reduce Employer contributions, as elected by the Sponsoring Employer in Section C of this Amendment. However, forfeitures cannot be used as Qualified Nonelective Contributions, Qualified Matching Contributions or Elective Deferrals. For Plan Years beginning on or after January 1, 2006, certain matching allocation formulas, such as flat-dollar or formulas that target matches at lower paid Non-highly Compensated Employees, must satisfy additional requirements specified in Treas. Reg. § 1.401(m)-2(a)(5).

11. QNECs And QMACs. Effective for Plan Years beginning on or after January 1, 2006, Section 4.6 of the Basic Plan Document is amended by the addition of the following new Sections 4.6[d] and [e], relating to the revised definitions of and restrictions on Qualified Non-Elective Contributions and Qualified Matching Contributions:

[d] Qualified Non-elective Contributions: Effective for Plan Years beginning on or after January 1, 2006, in lieu of distributing Excess Contributions as provided in Section 4.5 or Excess Aggregate Contributions as provided in Section 4.6[b], the Employer may make Qualified Non-elective Contributions as elected in the Adoption Agreement, subject to the following restrictions:

[i] “Qualified Non-elective Contributions” means contributions (other than Matching Contributions, Qualified Matching Contributions or any other non-elective contribution) made by the Company and allocated to Participants’ Accounts that the Participants may not elect to receive in cash until distributed from the Plan, nonforfeitable when made, are distributable only in accordance with the distribution provisions applicable to Elective Deferrals, Roth Contributions and Qualified Matching Contribution, and otherwise meet the requirements of Treas. Reg. §§ 1.401(k)-1(c) or (d). In addition to the limitations and restrictions provided herein, if the Employer has elected in the Adoption Agreement (as amended in Section A of this Amendment Number Four) to use the Current Year Testing method, in lieu of distributing Excess Contributions or Excess Aggregate Contributions, and to the extent elected by the Employer in the Adoption Agreement, the Employer will make Qualified Nonelective Contributions on behalf of Participants sufficient to satisfy the Actual Deferral Percentage test and/or the Actual Contribution Percentage test, as elected. Qualified Nonelective Contributions will be allocated either to all Participants or only to Participants who are Non-highly Compensated Employees, as elected by the Employer in the Adoption Agreement, in the ratio which each such Participant’s Compensation for the Plan Year bears to the total Compensation of all such Participants for such Plan Year.

[ii] To be considered in the Actual Deferral Percentage or Actual Contribution Percentage tests, for any Plan Year in which the prior year testing method is used, a Qualified Non-elective Contribution must be contributed no later than 12

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months after the end of the applicable year for the Plan Year being tested. For any Plan Year in which the current year testing method is used, a Qualified Non-elective Contribution must be contributed by the end of the Plan Year following the Plan Year being tested. In any event, the Qualified Non-elective Contribution must not be contingent on services performed after the allocation date.

[iii] The plan that contains the cash or deferred arrangement, and the plan or plans to which the Qualified Non-elective Contributions or Qualified Matching Contributions to be used to satisfy the Actual Deferral Percentage or Actual Contribution Percentage test must be plans that are permitted to be aggregated under Treas. Reg. §§ 1.401(k)-1(b)(4) or § 1.401(m)-1(b)(4).

[iv] The total amount of all non-elective contributions made in one Plan Year, including Qualified Non-elective Contributions used to satisfy the Actual Deferral Percentage or Actual Contribution Percentage test, must satisfy Code Section 401(a)(4). In addition, the total amount of non-elective contributions made in one year, excluding Qualified Non-elective Contributions used to satisfy the Actual Deferral Percentage or Actual Contribution Percentage test, must satisfy Code Section 401(a)(4).

[v] The Qualified Non-elective Contributions taken into account under the Actual Deferral Percentage test may not be taken into account under the Actual Contribution Percentage test with respect to a single Plan Year, and vice versa.

[vi] To be included in the Actual Deferral Percentage test or Actual Contribution Percentage test, as appropriate, Qualified Non-elective Contributions for any Non-highly Compensated Employee in a single Plan Year may not exceed five percent (5%) of such Participant’s Compensation unless the percentage allocated is limited to an amount not greater than two (2) times the Plan’s “representative contribution rate.” The foregoing limit may be applied separately for each Actual Deferral Percentage and Actual Contribution Percentage test, as long as no Qualified Non-elective Contribution is considered in more than one test. The Plan’s representative contribution rate is the lowest “applicable contribution rate” among a group of Non-highly Compensated Employees that is fifty percent (50%) of all the eligible Non-highly Compensated Employees eligible under the Plan (or the lowest Contribution Rate among all eligible Non-highly Compensated Employees who are employed on the last day of the Plan Year, if greater). Qualified Non-elective Contributions included in the Actual Deferral Percentage or Actual Contribution Percentage test, and included in the determination of the applicable contribution rate are defined according to the following paragraphs [A] and [B]:

[A] In applying Qualified Non-elective Contributions to satisfy the Actual Deferral Percentage test, the representative contribution rate for purposes of Treas. Reg. §1.401(k)-2(a)(6)(iv)(B) means the sum of Qualified Non-elective Contributions and Qualified Matching Contributions contributed on behalf of the Participant for the Plan Year divided by the Participant’s Compensation. However, Qualified Non-elective Contributions applied to the Actual Contribution Percentage test (including the determination of the representative contribution rate for purposes of Treas. Reg. §1.401(m)-2(a)(6)(v)(B)), may not be used to satisfy the Actual Deferral Percentage test (including the determination of the foregoing representative contribution rate).

[B] In applying Qualified Non-elective Contributions to satisfy the Actual Contribution Percentage test, the representative contribution rate for purposes of Treas. Reg. §1.401(m)-2(a)(6)(v)(B) means the sum of

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Matching Contributions and Qualified Non-elective Contributions contributed on behalf of the Participant for the Plan Year divided by the Participant’s Compensation. However, Qualified Non-elective Contributions applied to the Actual Deferral Percentage test (including the determination of the representative contribution rate for purposes of Treas. Reg. §1.401(k)-2(a)(6)(iv)(B)), may not be used to satisfy the Actual Contribution Percentage test (including the determination of the foregoing representative contribution rate).

[vii] Notwithstanding the foregoing limitation provided in the foregoing subsection [vi], Qualified Non-elective Contributions made in connection with the payment of a prevailing wage under the Davis-Bacon Act, Service Contract Act of 1965 or similar legislation may permit up to ten percent (10%) of a Non-highly Compensated Employee’s Compensation to be taken into account for either the Actual Deferral Percentage test or the Actual Contribution Percentage test before comparison to the representative contribution rate is required.

[e] Qualified Matching Contributions: Effective for Plan Years beginning on or after January 1, 2006, in lieu of distributing Excess Contributions as provided in Section 4.5 or Excess Aggregate Contributions as provided in Section 4.6[b], the Employer may make Qualified Matching Contributions as elected in the Adoption Agreement, subject to the following restrictions.

[i] “Qualified Matching Contributions” means contributions (other than Qualified Non-elective Contributions or Matching Contributions) made by the Employer and allocated to Participants’ Accounts that the Participants may not elect to receive in cash until distributed from the Plan, are nonforfeitable when made, are distributable only in accordance with the distribution provisions applicable to Elective Deferrals, Roth Contributions and Qualified Non-elective Contributions, and otherwise meet the requirements of Section the requirements of Treas. Reg. § 1.401(k)-1(c) or (d).

[ii] To be considered in the Actual Deferral Percentage or Actual Contribution Percentage tests for any Plan Year in which the prior year testing method is used, a Qualified Matching Contribution must be contributed no later than 12 months after the end of the applicable year for the Plan Year being tested. For any Plan Year in which the current year testing method is used, a Qualified Matching Contribution must be contributed by the end of the Plan Year following the Plan Year being tested. In any event, the Qualified Matching Contribution must not be contingent on services performed after the allocation date.

[iii] The Qualified Matching Contributions taken into account under the Actual Deferral Percentage test may not be taken into account under the Actual Contribution Percentage test to determine a Participant’s individual actual contribution ratio.

[iv] To be considered in the Actual Deferral Percentage or Actual Contribution Percentage tests, a Qualified Matching Contribution must not exceed the conditions provided on Matching Contributions in Section 4.3(e).

[f] Overall Limitations. Qualified Non-elective Contributions and Qualified Matching Contributions cannot be taken into account to determine an individual deferral ratio for any Participant to the extent such contributions are taken into account for purposes of satisfying any other Actual Deferral Percentage test, any Actual Contribution Percentage test, or the requirements of Treas. Reg. §§ 1.401(k)-3, 1.401(m)-3, or 1.401(a)-4. Thus, for example, Matching Contributions made pursuant to Treas. Reg. § 1.401(k)-3(c) cannot be taken into account under the Actual Deferral Percentage test. If a Plan switches from the current year testing method to the prior year testing method pursuant to Treas. Reg. § 1.401(k)-2(c)(1), Qualified Non-elective Contributions taken into account under the current year testing method for that plan year may not be taken into account under the prior year testing method for the next year. In addition, a Qualified Non-elective Contribution may not be applied in the Actual Contribution Percentage Test, used for any other

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Actual Contribution Percentage test, any other Actual Deferral Percentage test, or applied under § 1.401(k)-3, § 1.401(k)-4, or §1.401(m)-3.

12. Safe Harbor Plan Provisions. Effective for Plan Years beginning on or after January 1, 2006, Section 4.7 of the Basic Plan Document is generally amended by the addition of the addition of the following text to the end thereof following:

[1] If the Plan is an ACP Test Safe Harbor plan, provided the ACP Test Safe Harbor requirements are met, the Plan will not impose any allocation conditions on matching contributions.

[2] If the Plan provides for ADP Test Safe Harbor matching contributions or ACP Test Safe Harbor matching contributions, then catch-up contributions (as defined in Section 414(v) of the Code) will be taken into account in applying such matching contributions under the Plan.

[3] Except as provided in Treas. Reg. §§1.401(k)-3(e) and 1.401(k)-3(f), and below, the Plan will fail to satisfy the requirements of Code Section 401(k)(12) for a Plan Year unless such provisions remain in effect for an entire twelve (12) month Plan Year.

[4] If a Plan has a short Plan Year as a result of changing its Plan Year, then the Plan will not fail to satisfy the requirements of Section 4.7 of the Basic Plan Document merely because the Plan Year has less than twelve (12) months, provided:

[A] The Plan satisfied the ADP Test Safe Harbor and/or ACP Test Safe harbor requirements for the immediately preceding Plan Year; and

[B] The Plan satisfies the ADP Test Safe Harbor and/or ACP Test Safe Harbor requirements (determined without regard to Treas. Reg. §1.401(k)-3(g)) for the immediately following Plan Year (or for the immediately following twelve (12) months if the immediately following Plan Year is less than twelve (12) months).

[5] If the ADP Test Safe Harbor contribution being made to the Plan is a matching contribution (or any ACP Test Safe Harbor matching contribution) that is made separately with respect to each payroll period (or with respect to all payroll periods ending with or within each month or quarter of a Plan Year) taken into account under the Plan for the Plan Year, then safe harbor matching contributions with respect to any elective deferrals and/or after-tax employee contributions made during a Plan Year quarter must be contributed to the Plan by the last day of the immediately following Plan Year quarter.

[6] The Employer may amend the Plan during a Plan Year to reduce or eliminate prospectively any or all matching contributions under the Plan (including any ADP Test Safe Harbor matching contributions) provided:

[A] the Plan Administrator provides a supplemental notice to the Participants which explains the consequences of the amendment, specifies the amendment’s effective date, and informs Participants that they will have a reasonable opportunity to modify their cash or deferred elections and, if applicable, after-tax Participant contribution elections;

[B] Participants have a reasonable opportunity (including a reasonable period after receipt of the supplemental notice) prior to the effective date of the amendment to modify their cash or deferred elections and, if applicable, after-tax Participant contribution elections; and

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[C] The amendment is not effective earlier than the later of: (1) thirty (30) days after the Plan Administrator gives supplemental notice; or (2) the date the Employer adopts the amendment.

An Employer which amends its Plan to eliminate or reduce any matching contribution under this Section, effective during the Plan Year, must continue to apply all of the ADP Test Safe harbor and/or ACP Test Safe Harbor requirements of the Plan until the amendment becomes effective and also must apply for the entire Plan Year, using current year testing, the Actual Deferral Percentage test and the Actual Contribution Percentage test.

[7] An Employer may terminate the Plan during a Plan Year in accordance with Plan termination provisions of the Plan and this Section.

[A] Acquisition/disposition or substantial business hardship. If the Employer terminates the Plan resulting in a short Plan Year, and the termination is on account of an acquisition or disposition transaction described in Section 410(b)(6)(C) of the Code, or if the termination is on account of the Employer’s substantial business hardship within the meaning of Section 412(d) of the Code, then the Plan remains an ADP Test Safe Harbor and/or ACP Test Safe Harbor Plan provided that the Employer satisfies the ADP Test Safe Harbor and/or ACP Test Safe Harbor provisions through the effective date of the Plan termination.

[B] Other termination. If the Employer terminates the Plan for any reason other than as described in Paragraph [6][A] above, and the termination results in a short Plan Year, the Employer must conduct the termination under the provisions of Paragraph [6] above, except that the Employer need not provide Participants with the right to change their cash or deferred elections.

13. Forfeiture of Safe Harbor Match. Effective for Plan Years beginning on or after January 1, 2006, Section 4.7[d][1][B] of the Basic Plan Document, relating to the treatment of forfeitures of nonvested ACP test safe harbor matching contributions, is amended by the addition of the following provision:

Unless the Sponsoring Employer specifies another method of allocation, forfeitures of nonvested ACP Test Safe Harbor Matching Contributions will be used to reduce the Employer’s Contribution of such ACP Test Safe Harbor Matching Contributions. The Sponsoring Employer may indicate in Section A of this Amendment Four another method of allocating such forfeitures. However, such forfeitures may not be used as ADP Test Safe Harbor Contributions, and if used as anything other than ACP Test Safe Harbor Contributions, the Plan will not be exempt from Code Section 416.

14. Nonforfeitable Requirements Related to Elected Deferrals. Effective for Plan Years beginning on or after January 1, 2006, Article 6 is amended by the addition of the following that relates to the requirement that pre-tax deferrals always be nonforfeitable, are always disregarded for purposes of applying Code Section 411(a)(2) (i.e., in applying a vesting schedule to employer contributions), and that pre-tax deferrals always remain nonforfeitable, as such requirements are provided by Treas. Reg. § 1.401(k)-1(c) of the 2006 401(k) Regulations.

Effective for Plan Years beginning on or after January 1, 2006, for purposes of Section 6.1 of the Basic Plan Document, a Participant’s Account attributable to the Participant’s own contributions that remain nonforfeitable at all times shall not be taken into account for purposes of Code Section 411(a)(2) in the application of vesting percentages to determine the forfeitable portion of Employer contributions to the extent applicable. Further, for purposes of Section 6.3, a Participant’s Account attributable to the Participant’s own contributions that remain nonforfeitable at all times shall be taken into account in determining whether the Participant is nonvested for purposes of applying the Break in Service rules.

15. Replacement Defined Contribution Plans. Effective for Plan Years beginning on or after January 1, 2006, Section 9.6[a][2][B][1] is hereby replaced by the following relating to the limitation provided by the

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2006 Interim Amendment Number Four	Page 9

2006 401(k) Regulations regarding what type of Plan is treated as a “replacement plan” for purposes of distribution events:

[1] Termination of the Plan without the establishment of or maintenance of another defined contribution plan (however, effective for Plan Years beginning on or after January 1, 2006, the establishment or maintenance of an ESOP, SEP, SIMPLE IRA, 403(b) plan, or a 457(b) or (f) plan will not prevent distribution following the termination of a 401(k) plan);

16. New Hardship Distribution Provisions. Effective for Plan Years beginning on or after January 1, 2006, Section 9.6[c] is deleted and replaced by a new Section 9.6[c] to reflect the new hardship distribution events permitted by the 401(k) regulations effective Plan Years beginning on or after January 1, 2006, and the revision to the definition of dependent effective Plan Years beginning on or after January 1, 2005, in response to the Working Families Tax Relief Act of 2004.

[c] 401(k) Cash or Deferred Plan Hardship Withdrawals: If elected in the Adoption Agreement (or in Section A of this Amendment), distribution of Elective Deferrals (and earnings on Elective Deferrals accrued as of December 31, 1988) and Roth Contributions may be made to a Participant in the event of a hardship. Notwithstanding the foregoing, ADP Test Safe Harbor Contributions described in Section 4.7 of the Basic Plan Document may not be distributed on account of hardship. For the purposes of this paragraph [c], hardship is defined as an immediate and heavy financial need of the Participant when such Participant lacks other available resources. Hardship distributions are subject to the spousal consent requirements contained in Code Section 401(a)(11) and 417, if applicable.

[i] The following circumstances are the only financial needs considered immediate and heavy:

[A] Deductible medical expenses (within the meaning of Code Section 213(d) determined without regard to whether the expenses exceed seven and one-half percent of adjusted gross income) previously incurred by of the Participant, the Participant’s Spouse, children, or dependents, or necessary for such persons to obtain such care;

[B] The purchase (excluding mortgage payments) of a principal residence for the Participant;

[C] Payment of tuition and related educational fees for the next 12 months of post secondary education for the Participant, the Participant’s Spouse, children, or dependents;

[D] The need to prevent the eviction of the Participant from, or a foreclosure on the mortgage of, the Participant’s principal residence;

[E] For Plan Years beginning on and after January 1, 2006, payments for burial or funeral expenses for the Participant’s deceased parent, Spouse, children or dependents;

[F] For Plan Years beginning on and after January 1, 2006, expenses for the repair of damage to the Participant’s principal residence that would qualify for the casualty deduction under Code Section 165 (determined without regard to whether the loss exceeds 10 percent of adjusted gross income); or

[G] Any other reason deemed to be an immediate and heavy financial need by the Secretary of the Treasury.

For the purpose of the foregoing, a dependent is an individual defined in Code Section 152, and, for taxable years beginning on or after January 1, 2005, without regard to Code Section 152(d)(1)(B).

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[ii] A distribution will be considered as necessary to satisfy an immediate and heavy financial need of the Participant only if:

[A] The Participant has obtained all distributions, other than hardship distributions, and all nontaxable loans available under all Plans maintained by the Employer;

[B] All plans maintained by the Employer provide that the Participant’s Elective Deferrals and Participant Contributions will be suspended for 12 months after the receipt of the hardship distribution;

[C] The distribution is not in excess of the amount necessary to satisfy the immediate and heavy financial need; and

[D] Unless elected in the Adoption Agreement, all plans maintained by the Employer (defined as all qualified and nonqualified plans of deferred compensation, including a cafeteria plan under Code Section 125 (but excluding mandatory employee contribution portion of a defined benefit plan or health and welfare plan), stock option plan, stock purchase plan or similar plan or arrangement) must provide that Elective Deferrals, Roth Contributions, Nondeductible Voluntary Employee Contributions or other contributions will be suspended for a period of six months following a hardship distribution.

An Employer who elects a suspension period other than the six-month period described herein may not maintain an ACP Test Safe Harbor based on Matching Contributions.

[iii] The amount of any distribution under this Section 9.6[c] may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution.

The Adoption Agreement and the Basic Plan Document remain otherwise unchanged.

Failure to complete this amendment to the Adoption Agreement #001 properly may result in the disqualification of the Employer’s Plan. The foregoing options to the Adoption Agreement, as amended, may be used only in conjunction with the Baker & Hostetler LLP Defined Contribution Plan and Trust Prototype Basic Plan Document Number: 01 (the “Basic Plan Document”), including the amendments adopted by this Amendment Number Four. The Employer that amends an Adoption Agreement that previously adopted the Basic Plan Document may continue to rely on an opinion letter issued to Baker & Hostetler LLP by the Internal Revenue Service as evidence that the Basic Plan is qualified under Code Section 401, but only to the extent provided in Announcement 2001-77. The Employer adopting this Plan may not rely on the opinion letter in certain other circumstances, which are specified in the opinion letter issued with respect to this Plan and in Announcement 2001-77. In order to have reliance in such circumstances or with respect to such qualification requirements, the Employer must apply to Employee Plans Determinations of the Internal Revenue Service for a determination letter. Baker & Hostetler LLP (the “Prototype Sponsor”) will continue to notify adopting companies in writing of any other amendments made to the Plan by the Prototype Sponsor and will notify adopting companies in writing of the discontinuance of the Plan.

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SIGNATURES

The Sponsoring Employer and any Additional Sponsoring Employers, by their appropriate officers or representatives duly authorized, hereby adopt the amendments to the Basic Plan Document, and any related changes in options selected under the Adoption Agreement #001 by executing this Amendment Number Four as of the date indicated below:

PROTOTYPE SPONSOR:	SPONSORING EMPLOYER(S):
Amendment Approved by: BAKER & HOSTETLER LLP	Cardinal Health 414, Inc.
	(Name of Primary Sponsoring Employer)
/s/ Georgeann G. Peters
Baker & Hostetler LLP
3200 National City Center	By	/s/ Susan Nelson
1900 E. Ninth Street
Cleveland, Ohio 44114-3485	Title	Sr. VP Total Rewards
(216) 621-0200
	Date	12/1/06

And by

Baker & Hostetler LLP

Capitol Square, Suite 2100

65 East State Street

Columbus, Ohio 43215-4260

(614) 228-1541

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2006 Interim Amendment Number Four	Page 12

EX-99.06

Exhibit 99.06

Cardinal Health, Inc.

Employee Stock Purchase Plan

Section 1 - Purpose

The Cardinal Health, Inc. Employee Stock Purchase Plan, originally adopted and established by Cardinal Health, Inc., an Ohio corporation, effective as of January 3, 2000, for the general benefit of the Employees of the Company and of certain of its Subsidiaries, is hereby amended and restated effective as of May 10, 2006. The purpose of the Plan is to facilitate the purchase of Shares by Eligible Employees.

Section 2 - Definitions

a. “Act” shall mean the Securities Act of 1933, as amended.

b. “Administrator” shall mean the Human Resources and Compensation Committee of the Board of Directors of the Company, or the person(s) or entity delegated the responsibility of administering the Plan.

c. “Agent” shall mean the bank, brokerage firm, financial institution, or other entity or person(s) engaged, retained or appointed to act as the agent of the Employer and of the Participants under the Plan.

d. “Board” shall mean the Board of Directors of the Company.

e. “Closing Value” shall mean, as of a particular date, the value of a Share determined by the closing sales price for such Share (or the closing bid, if no sales were reported) as quoted on The New York Stock Exchange for the date of determination as reported in The Wall Street Journal or such other source as the Administrator deems reliable. For this purpose, the date of determination shall be the first Trading Day of the Offering Period or the last Trading Day of the Offering Period, as applicable.

f. “Code” shall mean the Internal Revenue Code of 1986, as amended and currently in effect, or any successor body of federal tax law.

g. “Company” shall mean Cardinal Health, Inc., including any successor thereto.

h. “Compensation” shall mean wages, salaries, fees for professional service and other amounts received for personal services actually rendered in the course of employment with the Employer (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses) including amounts excludible from the Employee’s gross income under Code Section 402(a)(8) (relating to a Code Section 401(k) arrangement), Code Section 402(h) (relating to a Simplified Employee Pension), Code Section 125 (relating to a cafeteria plan) or Code Section 403(b) (relating to a tax-sheltered annuity) and compensation paid by the Employer to an Employee through another person under the common paymaster provisions of Code Sections 3121(s) and 3306(p). Compensation does not include: (1) amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by an Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture, (2) amounts realized from the sale, exchange, or other disposition of stock acquired under a qualified stock option, (3) moving allowances, automobile allowances, tuition reimbursement, financial/tax planning reimbursement, other extraordinary compensation, including tax “gross-up” payments, and imputed income from other employer-provided benefits, and (4) other amounts that receive special tax benefits, such as premiums for group term life insurance or contributions made by the Employer (whether or not under salary reduction agreement) towards the purchase of an annuity

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contract described in Code Section 403(b) (whether or not the contributions are excludible from the gross income of the Employee), other than amounts described above.

i. “Designated Subsidiaries” shall mean all Subsidiaries whose Employees have been designated by the Administrator, in its sole discretion, as eligible to participate in the Plan.

j. “Eligible Employee” means any Employee who (1) has worked as an employee of an Employer for at least thirty (30) days and (2) is customarily employed for at least five (5) months each calendar year or who is classified as a “PRN” or on-call Employee.

k. “Employee” means any person who performs services as a common law employee of an Employer, and does not include individuals providing services to an Employer in a capacity as an independent contractor.

l. “Employer” means, individually and collectively, the Company and the Designated Subsidiaries.

m. “Enrollment Period” shall mean the period immediately preceding the Offering Period that is designated by the Administrator in its discretion as the period during which an Eligible Employee may elect to participate in the Plan.

n. “Offering Period” shall mean the period during which Participants in the Plan authorize payroll deductions to fund the purchase of Shares on their behalf under the Plan pursuant to the options granted to them hereunder.

o. “Participant” means any Eligible Employee who has elected to participate in the Plan for an Offering Period by authorizing payroll deductions and following all applicable procedures established by the Administrator during the Enrollment Period for such Offering Period.

p. “Plan” shall mean this Cardinal Health, Inc. Employee Stock Purchase Plan, as amended from time to time.

q. “Plan Account” shall mean the individual account established by the Agent for each Participant for purposes of accounting for and/or holding each Participant’s payroll deductions, Shares, etc.

r. “Plan Year” shall mean the fiscal year of the Company.

s. “Purchase Price” shall mean, for each Share purchased in accordance with Section 4 hereof, an amount equal to the lesser of (1) eighty-five percent (85%) of the Closing Value of a Share on the first Trading Day of each Offering Period (which for Plan purposes shall be deemed to be the date the option to purchase such Shares was granted to each Eligible Employee who is, or elects to become, a Participant); or (2) eighty-five percent (85%) of the Closing Value of such Share on the last Trading Day of the Offering Period (which for Plan purposes shall be deemed to be the date each such option to purchase such Shares was exercised).

t. “Shares” means the common shares, without par value, of the Company.

u. “Subsidiary” shall mean a corporation, domestic or foreign, of which not less than fifty percent (50%) of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary (or as otherwise may be defined in Code Section 424).

v. “Trading Day” shall mean a day on which national stock exchanges and The New York Stock Exchange are open for trading.

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Section 3 - Eligible Employees

a. In General. Participation in the Plan is voluntary. All Eligible Employees of an Employer are eligible to participate in the Plan. All Eligible Employees granted options to purchase Shares hereunder shall have the same rights and privileges as every other such Eligible Employee, and only Eligible Employees of an Employer satisfying the applicable requirements of the Plan will be entitled to be granted options hereunder.

b. Limitations on Rights. An Employee who otherwise is an Eligible Employee shall not be entitled to purchase Shares under the Plan: (1) if such purchase would cause such Eligible Employee to own Shares (including any Shares which would be owned if such Eligible Employee purchased all of the Shares made available for purchase by such Eligible Employee under all options or rights then held by such Eligible Employee, whether or not then exercisable) representing five percent (5%) or more of the total combined voting power or value of each class of stock of the Company or any Subsidiary; or (2) to the extent that such purchase would cause such Eligible Employee to have options or rights to purchase more than $25,000 of Shares under the Plan (and under all other employee stock purchase plans of the Company and its Subsidiary corporations which qualify for treatment under Section 423 of the Code) for any calendar year in which such rights are outstanding (based on the Closing Value of such Shares, determined as of the date such rights are granted). For purposes of clause (1) of this subsection b., the attribution rules set forth in Section 424(d) of the Code and related regulations shall apply.

Section 4 - Enrollment and Offering Periods

a. Enrolling in the Plan. To participate in the Plan, an Eligible Employee must enroll in the Plan. Enrollment for a given Offering Period will take place during the Enrollment Period for such Offering Period. The Administrator shall designate the initial Enrollment Period and each subsequent Enrollment Period and the Offering Period to which each Enrollment Period relates. Participation in the Plan with respect to any one or more of the Offering Periods shall neither limit nor require participation in the Plan for any other Offering Period.

b. The Offering Period. Any Employee who is an Eligible Employee and who desires to be granted options to purchase Shares hereunder must enroll in accordance with the procedures established by the Administrator during an Enrollment Period. Such authorization shall be effective for the Offering Period immediately following such Enrollment Period. The duration of an Offering Period shall be determined by the Administrator prior to the Enrollment Period and shall commence on the first day (or the First Trading Day) of the Offering Period and end on the last day (or the last Trading Day) of the Offering Period; provided, however, that if the Administrator terminates the Plan during an Offering Period, pursuant to its authority in Section 17 of the Plan, such Offering Period shall be deemed to end on the date the Plan is terminated. The termination of the Plan and the Offering Period shall end the Participant’s rights to contribute amounts to the Plan or continue participation in the Offering Period. The date of termination of the Plan shall be deemed to be the final day of the Offering Period for purposes of determining the Purchase Price under the Offering Period and all amounts contributed during the Offering Period will be used as of such termination date to purchase Shares in accordance with the general provisions of Section 9.

The Administrator may designate one or more Offering Periods during each Plan Year during the term of this Plan. On the first day (or the First Trading Day) of each Offering Period, each Participant shall be granted an option to purchase Shares under the Plan. Each option granted hereunder shall expire at the end of the Offering Period for which it was granted. In no event may an option granted hereunder be exercised after the expiration of 27 months from the date of grant.

c. Changing Enrollment. The offering of Shares pursuant to options granted hereunder the Plan shall occur only during an Offering Period and shall be made only to Participants. Once an Eligible Employee is enrolled in the Plan, the Administrator or Employer will inform the Agent of such fact. Once enrolled, a Participant shall continue to participate in the Plan for each succeeding Offering Period until he or she terminates his or her participation by revoking his or her payroll deduction authorization or ceases to be an Eligible Employee. Once a Participant has elected to participate under the Plan, that Participant’s payroll deduction authorization shall

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apply to all subsequent Offering Periods unless and until the Participant ceases to be an Eligible Employee, or modifies or terminates said authorization. If a Participant desires to change his or her rate of contribution, he or she may do so effective for the next Offering Period by following the procedures established by the Administrator during the Enrollment Period immediately preceding such Offering Period.

Section 5 - Term of Plan

This Plan shall be in effect from January 3, 2000, until it is terminated by action of the Administrator or the Board.

Section 6 - Number of Shares to Be Made Available

Subject to adjustment as provided in Section 16 hereof, the total number of Shares made available for purchase by Participants granted options which are exercised under Section 9 hereof is 7,500,000, which may consist of authorized but unissued shares, treasury shares, or shares purchased by the Plan in the open market. The provisions of Section 9 b. shall control in the event the number of Shares covered by options which are exercised for any Offering Period exceeds the number of Shares available for sale under the Plan. If all of the Shares authorized for sale under the Plan have been sold, the Plan shall either be continued through additional authorizations of Shares made by the Administrator (such authorizations must, however, comply with Section 17 hereof), or shall be terminated in accordance with Section 17 hereof.

Section 7 - Use of Funds

All payroll deductions received or held by an Employer under the Plan may be used by the Employer for any corporate purpose, and the Employer shall not be obligated to segregate such payroll deductions. Any amounts held by an Employer or other party holding amounts in connection with or as a result of payroll withholding made pursuant to the Plan and pending the purchase of Shares hereunder shall be considered a non-interest-bearing, unsecured indebtedness extended to the Employer or other party by the Participants. Administrative expenses of the Plan shall be allocated to each Participant’s Plan Account unless such expenses are paid by the Employer.

Section 8 - Amount of Contribution; Method of Payment

a. Payroll Withholding. Except as otherwise specifically provided herein, the Purchase Price will be payable by each Participant by means of payroll withholding. The withholding shall be in increments of one percent (1%). The minimum withholding permitted shall be an amount equal to one percent (1%) of a Participant’s Compensation and the maximum withholding shall be an amount equal to fifteen percent (15%) of a Participant’s Compensation. In any event, the total withholding permitted to be made by any Participant for a calendar year shall be limited to the sum of $21,250. The actual percentage of Compensation to be deducted shall be specified by a Participant in his or her authorization for payroll withholding. Participants may not deposit any separate cash payments into their Plan Accounts.

b. Application of Withholding Rules. Payroll withholding will commence with the first paycheck issued during the Offering Period and will, except as otherwise provided herein, continue with each paycheck throughout the entire Offering Period, except for pay periods for which such Participant receives no compensation (e.g., uncompensated personal leave, leave of absence). A pay period which ends at such time that it is administratively impracticable to credit any paycheck for such pay period to the then-current Offering Period will be credited in its entirety to the immediately subsequent Offering Period. A pay period which overlaps Offering Periods will be credited in its entirety to the Offering Period in which it is paid. Payroll withholding shall be retained by the Employer or other party responsible for making such payment to the Participant, until applied to the purchase of Shares as described in Section 9 and the satisfaction of any related federal, state or local withholding obligations (including any employment tax obligations).

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At the time the Shares are purchased, or at the time some or all of the Shares issued under the Plan are disposed of, Participants must make adequate provision for the Employer’s federal, state, local or other tax withholding obligations (including employment taxes), if any, which arise upon the purchase or disposition of the Shares. At any time, the Employer may, but shall not be obligated to, withhold from each Participant’s Compensation the amount necessary for the Employer to meet applicable withholding obligations, including any withholding required to make available to the Employer any tax deductions or benefits attributable to the sale or early disposition of Shares by the Participant. Each Participant, as a condition of participating under the Plan, agrees to bear responsibility for all federal, state, and local income taxes required to be withheld from his or her Compensation as well as the Participant’s portion of FICA (both the OASDI and Medicare components) with respect to any Compensation arising on account of the purchase or disposition of Shares. The Employer may increase income and/or employment tax withholding on a Participant’s Compensation after the purchase or disposition of Shares in order to comply with federal, state and local tax laws, and each Participant agrees to sign any and all appropriate documents to facilitate such withholding.

Section 9 - Purchasing, Transferring Shares

a. Maintenance of Plan Account. Upon the exercise of a Participant’s initial option to purchase Shares under the Plan, the Agent shall establish a Plan Account in the name of such Participant. No later than the close of each Offering Period, the aggregate amount deducted during such Offering Period by the Employer from a Participant’s Compensation (and credited to a non-interest-bearing account maintained by the Employer or other party for bookkeeping purposes) will be communicated by the Employer to the Agent and shall thereupon be credited by the Agent to such Participant’s Plan Account (unless the Participant has given notice to the Administrator of his or her revocation of authorization prior to the date such communication is made). As of the last day of each Offering Period, or as soon thereafter as is administratively practicable, each Participant’s option to purchase Shares will be exercised automatically for him or her by the Agent with respect to those amounts reported to the Agent by the Administrator or Employer as creditable to that Participant’s Plan Account. On the date of exercise, the amount then credited to the Participant’s Plan Account for the purpose of purchasing Shares hereunder will be divided by the Purchase Price and there shall be transferred to the Participant’s Plan Account by the Agent the number of full and fractional shares which results.

The Agent shall hold in its name, or in the name of its nominee, all Shares so purchased and allocated. No certificate will be issued to a Participant for Shares held in his or her Plan Account unless he or she so requests in writing or unless such Participant’s active participation in the Plan is terminated due to death, disability, separation from service or retirement. Notwithstanding any provision herein to the contrary, no certificates shall be issued for Shares until such Shares have been held in the Participant’s Plan Account for a period of at least 24 months following the date of the granting of the option to purchase such Shares.

b. Insufficient Number of Available Shares. In the event the number of Shares covered by options which are exercised for any Offering Period exceeds the number of Shares available for sale under the Plan, the number of Shares actually available for sale hereunder shall be limited to the remaining number of Shares authorized for sale under the Plan and shall be allocated by the Agent among the Participants in proportion to each Participant’s Compensation during the Offering Period over the total Compensation of all Participants during the Offering Period. Any excess amounts withheld and credited to Participants’ Plan Accounts then shall be returned to the Participants as soon as is administratively practicable.

c. Handling Excess Shares. In the event that the number of Shares which would be credited to any Participant’s Plan Account in any Offering Period exceeds the limit specified in Section 3 b. hereof, such Participant’s Plan Account shall be credited with the maximum number of Shares permissible, and the remaining amounts will be refunded in cash as soon as administratively practicable.

d. Status Reports. Statements of each Participant’s Plan Account shall be given to participating Employees at least annually.

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Section 10 - Dividends and Other Distributions

a. Reinvestment of Dividends. Cash dividends and other cash distributions received by the Agent on Shares held in its custody hereunder will be credited to the Plan Accounts of individual Participants in accordance with such Participants’ interests in the Shares with respect to which such dividends or distributions are paid or made. Cash dividends will be applied, as soon as practicable after the receipt thereof by the Agent, in accordance with the directions of the individual Participant to whose Plan Account such amounts have been credited. Participants may, but are not required to, direct that such cash dividends be applied to the purchase in the open market at prevailing market prices of the number of whole Shares capable of being purchased with such funds (or the portion of such funds designated for such application by the Participant), after deduction of any bank service fees, brokerage charges, transfer taxes, and any other transaction fee, expense or cost payable in connection with the purchase of such Shares and not otherwise paid by the Employer.

b. Shares to Be Held in Agent’s Name. All purchases of Shares made pursuant to this Section will be made in the name of the Agent or its nominee, shall be held as provided in Section 9 hereof, and shall be transferred and credited to the Plan Account(s) of the individual Participant(s) to which such dividends or other distributions were credited. Dividends paid in the form of Shares will be allocated by the Agent, as and when received, with respect to Shares held in its custody hereunder to the Plan Accounts of individual Participants in accordance with such Participants’ interests in such Shares with respect to which such dividends were paid. Property, other than Shares or cash, received by the Agent as a distribution on Shares held in its custody hereunder, shall be sold by the Agent for the accounts of the Participants, and the Agent shall treat the proceeds of such sale in the same manner as cash dividends received by the Agent on Shares held in its custody hereunder.

c. Tax Responsibilities. The reinvestment of dividends under the Plan will not relieve a Participant (or Eligible Employee with a Plan Account) of any income or other tax that may be due on or with respect to such dividends. The Agent shall report to each Participant (or Eligible Employee with a Plan Account) the amount of dividends credited to his or her Plan Account.

Section 11 - Voting of Shares

A Participant shall have no interest or voting right in the Shares covered by his or her option until such option has been exercised. Shares held for a Participant (or Eligible Employee with a Plan Account) in his or her Plan Account will be voted in accordance with the Participant’s (or Eligible Employee’s) express directions. In the absence of any such directions, such Shares will not be voted.

Section 12 - In-Service Distribution or Sale of Shares

a. Sale of Shares. Subject to the provisions of Section 19, a Participant may at any time, and without withdrawing from the Plan, by giving notice to the Agent, direct the Agent to sell all or part of the Shares held on behalf of the Participant. Upon receipt of such a notice, the Agent shall, as soon as practicable after receipt of such notice, sell such Shares in the marketplace at the prevailing market price and transmit the net proceeds of such sale (less any bank service fees, brokerage charges, transfer taxes, and any other transaction fee, expense or cost) to the Participant’s Plan Account.

b. In-Service Share Distributions. A Participant may, without withdrawing from the Plan, request that a certificate for all or part of the full Shares held in his or her Plan Account be sent to him or her after the relevant Shares have been purchased and allocated subject to the requirement that such Shares be held in the Participant’s Plan Account for a period of at least 24 months after the date of the granting of the option, as described in Section 9 a., above. All such requests must be submitted in writing to the Agent. No certificate for a fractional Share will be issued; the fair value of fractional Shares on the date of withdrawal of all Shares credited to a Participant’s Plan Account shall be paid in cash to such Participant. The Plan may impose a reasonable charge, to be paid by the Participant, for each stock certificate so issued prior to the date active participation in the Plan ceases; such charge shall be paid by the Participant to the Administrator or Employer prior to the date any distribution of a certificate evidencing ownership of such Shares occurs.

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Section 13 - Cessation of Active Participation

A Participant may revoke his or her authorization for payroll deduction for an Offering Period by giving notice to the Administrator or Employer in accordance with procedures established by the Administrator from time to time. The revocation of a payroll deduction authorization shall be effective for the Offering Period in which made if the revocation is made within such time limitations as may be established by the Administrator from time to time. Any payroll deductions made for an Offering Period prior to the effective date of the revocation of the deduction authorization by the Participant may, at the Participant’s election, be refunded to the Participant in cash or applied to any other permissible purpose under the terms of his or her Plan Account. A Participant who revokes authorization for payroll deduction may not again participate under the Plan until the next Offering Period immediately subsequent to the Offering Period during which the Participant revoked payroll deduction authorization with respect thereto.

Section 14 - Separation from Employment

Separation from employment for any reason, including death, disability, termination or retirement, shall be treated automatically as a withdrawal from the Plan. If separation from employment occurs more than two (2) months prior to the end of an Offering Period, it shall be treated as though the Participant revoked his or her authorization for payroll deductions under Section 13, above, and elected a refund in cash of the amounts withheld for the Offering Period. If separation from employment occurs within two (2) months of the end of an Offering Period, the Participant’s option to purchase Shares for that Offering Period shall be automatically exercised by the Agent unless the Participant makes an election to have his or her separation from employment treated as though the Participant revoked his or her authorization for payroll deductions under Section 13, above within such time limitations as may be established by the Administrator from time to time. If a Participant has a separation from employment but is re-employed as an Eligible Employee, he or she shall be treated as a new Eligible Employee. The Administrator shall, in its sole discretion, determine what constitutes a separation from employment for purposes of this Section.

Section 15 - Assignment

Neither payroll deductions credited to a Participant’s Plan Account nor any rights with regard to options or Shares held under the Plan may be assigned, alienated, transferred, pledged, or otherwise disposed of in any way by a Participant other than by will or the laws of descent and distribution. Any such assignment, alienation, transfer, pledge, or other disposition shall be without effect, except that the Administrator may treat such act as an election to withdraw from the Plan. A Participant’s right to purchase Shares under this Plan may be exercisable during the Participant’s lifetime only by the Participant. A Participant’s Plan Account shall be payable to the Participant’s designated beneficiary or, if none, to the Participant’s estate upon his or her death.

Section 16 - Adjustment of and Changes in Shares

If at any time after the effective date of the Plan the Company shall subdivide or reclassify the Shares which have been or may be optioned under the Plan, or shall declare thereon any stock split or dividend payable in Shares, or shall alter the capital structure of the Shares or the Company in any similar manner, then the number and class of shares held in the Plan and which may thereafter be optioned (in the aggregate and to any Participant) shall be adjusted accordingly, and in the case of each option outstanding at the time of any such action, the number and class of shares which may thereafter be purchased pursuant to such option and the Purchase Price shall be adjusted accordingly, as necessary to preserve the rights of the holder(s) of such Shares and option(s).

Section 17 - Amendment or Termination of the Plan

The Administrator shall have the right, at any time, to amend, modify or terminate the Plan without notice; provided, however, that no Participant’s existing options shall be adversely affected by any such amendment, modification or termination, except to comply with applicable law, stock exchange rules or accounting rules. Notwithstanding the foregoing, the Administrator shall have the right to terminate the Plan with respect to all future

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payroll deductions and related purchases at any time. Such termination of the Plan shall also terminate any current Offering Period in accordance with Section 4 of the Plan.

Designations of participating corporations may be made from time to time from among a group of corporations consisting of the Employer, its parent and its Subsidiaries (including corporations that become Subsidiaries or a parent after the adoption and approval of the Plan).

Section 18 - Administration

a. Administration. The Plan shall be administered by the Administrator. The Administrator shall be responsible for the administration of all matters under the Plan which have not been delegated to the Agent. The Administrator shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Any rule or regulation adopted by the Administrator shall remain in full force and effect unless and until altered, amended or repealed by the Administrator.

b. Specific Responsibilities. The Administrator’s responsibilities shall include, but shall not be limited to:

(1) interpreting the Plan (including issues relating to the definition and application of “Compensation”);

(2) identifying and compiling a list of persons who are Eligible Employees for an Offering Period; and

(3) identifying those Eligible Employees not entitled to be granted options or other rights for an Offering Period on account of the limitations described in Section 3 b. hereof.

The Administrator may from time to time adopt rules and regulations for carrying out the terms of the Plan. Interpretation or construction of any provision of the Plan by the Administrator shall be final and conclusive on all persons, absent specific and contrary action taken by the Board. Any interpretation or construction of any provision of the Plan by the Administrator or the Board shall be final and conclusive.

Section 19 - Securities Law Restrictions

Notwithstanding any provision of the Plan to the contrary, no payroll deductions shall take place and no Shares may be purchased under the Plan until a registration statement has been filed and become effective with respect to the issuance of the Shares covered by the Plan under the Act. Prior to the effectiveness of such registration statement, Shares subject to purchase under the Plan may be offered to Eligible Employees only pursuant to an exemption from the registration requirements of the Act.

Section 20 - No Independent Employee’s Rights

Nothing in the Plan shall be construed to be a contract of employment between an Employer or its parent or any Subsidiary and any Employee, or any group or category of Employees (whether for a definite or specific duration or otherwise), or to prevent the Employer, its parent or any Subsidiary from terminating any Employee’s employment at any time, without notice or recompense. No Employee shall have any rights as a shareholder until the option to purchase Shares, granted to him or her hereunder, has been exercised.

Section 21 - Applicable Law

The Plan shall be construed, administered and governed in all respects under the laws of the State of Ohio to the extent such laws are not preempted or controlled by federal law.

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Section 22 - Merger or Consolidation

If the Company shall at any time merge into or consolidate with another corporation or business entity, each Participant will thereafter be entitled to receive at the end of the Offering Period (during which such merger or consolidation occurs) the securities or property which a holder of Shares was entitled to upon and at the time of such merger or consolidation. A sale of all or substantially all of the assets of the Company shall be deemed a merger or consolidation for the foregoing purposes.

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