Common use of Allocation of Assets and Liabilities Clause in Contracts

Allocation of Assets and Liabilities. To facilitate the allocation pursuant to Section 2.02 and 2.03 of the Assets and Liabilities of the Company and its Subsidiaries as they shall exist immediately prior to giving effect to the transactions contemplated by this Agreement and the other Split-Off Agreements to the Medicare Part D Business and the Newco Business, respectively, the Parties hereby agree to the following procedures and methodologies: (a) The Assets and Liabilities of the Company and its Subsidiaries as of immediately prior to the Effective Time shall be allocated to the Newco Business or the Medicare Part D Business in a manner consistent with the procedures and methodologies for the allocation of Assets and Liabilities set forth in Schedule 2.05(a), which illustrates the procedures and methodologies for the allocation of Assets and Liabilities of the Company and its Subsidiaries to the Newco Business and the Medicare Part D Business as if the Separation were consummated as of September 30, 2010. (b) From January 1, 2011 until the Effective Time or the earlier termination of this Agreement, each of the Medicare Part D Business and the Newco Business shall be operated as a “closed system”, meaning that during such period the Businesses shall be operated and the accounting shall be such that all balance sheet, income statement and cash flow items attributable to a Business shall be solely for the account of such Business. (c) Schedule 2.05(c) sets forth (i) a description of all corporate overhead items and other shared expenses based on the financial statements of the Medicare Part D Business set forth in Section 3.10(b) of the Company Disclosure Letter (the “9/30 Financial Statements”), illustrating the allocation of the corporate overhead and other expenses on a pro forma basis to be borne by the Medicare Part D Business under the “closed system” during the period from January 1, 2011 until the Effective Time (the “Pre-Closing Allocated Expenses”), and (ii) the methodology for allocating such expenses between the Newco Business and the Medicare Part D Business. (d) Schedule 2.05(a) sets forth a description of the Intercompany Accounts based on the 9/30 Financial Statements. All Intercompany Accounts as of the Effective Time shall be settled immediately prior to the Effective Time (irrespective of the terms of payment of such Intercompany Accounts) based on the procedures and methodologies set forth in Schedule 2.05(a). (e) The Newco Cash and Part D Cash as of immediately prior to the Effective Time shall be allocated to the Newco Business or the Medicare Part D Business in a manner consistent with the procedures and methodologies for the allocation of cash as set forth in Schedule 2.05(a), which illustrates the procedures and methodologies for determining the allocation of cash between Newco Cash and Part D Cash as if the Separation were consummated as of September 30, 2010. (f) Prior to the Effective Time, Newco or a member of the Newco Group may, at Newco’s option, use (i) the Newco Cash received pursuant to Section 2.02(a)(ii) or (ii) any proceeds from any incurrence of indebtedness by Newco Sub pursuant to Section 4.05 to repay all or any portion of the Company Indebtedness. (g) The Parties will cooperate in the implementation of the foregoing and will have reasonable access to the books, records, personnel and work papers relating to the implementation of this Article II. (h) Within thirty (30) days after the Effective Time, Newco shall deliver to the Company a balance sheet for each of the Part D Group and the Newco Group as of immediately after the Effective Time.

Allocation of Assets and Liabilities. To facilitate the allocation pursuant to Section 2.02 The assets and 2.03 ------------------------------------ liabilities of the Assets and Liabilities of the Company and its Subsidiaries as they shall exist immediately prior to giving effect to the transactions contemplated by this Agreement ▇▇▇▇▇ Salaried Plan and the other Split-Off Agreements to the Medicare Part D Business ▇▇▇▇▇ Hourly Plan shall be allocated between ▇▇▇▇▇ and the Newco Business, respectively, the Parties hereby agree to the following procedures and methodologiesCircor as described herein: (a) ▇▇▇▇▇ Salaried Plan. The Assets assets and Liabilities liabilities of the Company ▇▇▇▇▇ ------------------- Salaried Plan shall be allocated between ▇▇▇▇▇ and its Subsidiaries Circor, and the assets and liabilities allocated to Circor shall be transferred to the Circor Salaried Plan, based upon the following methodology: (1) the total value of plan assets of the ▇▇▇▇▇ Salaried Plan as of the Distribution Date shall be determined by adding (i) the fair market value of the assets of such plan as of the Distribution Date and (ii) the portion of the minimum required contribution for the 1999 plan year for such plan which has not yet been contributed to such plan by the Distribution Date; (2) the plan termination liability (the "PTL") shall be determined for the ▇▇▇▇▇ Salaried Plan as of the Distribution Date ("Total Salaried Plan PTL"). The PTL shall be the amount of benefits that would be provided as benefits to participants in the ▇▇▇▇▇ Salaried Plan pursuant to Section 4044 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the regulations thereunder if the plan terminated, using the assumptions used by the Pension Benefit Guaranty Corporation as of the Distribution Date as required by Treas. Reg. Section 1.414(l)-1(b)(5)(ii). The Total Salaried Plan PTL determined for the ▇▇▇▇▇ Salaried Plan shall be bifurcated into (1) the PTL of the group of participants in the ▇▇▇▇▇ Salaried Plan who will become employees of the Circor Group immediately prior following the Distribution (the "Circor Salaried Plan PTL"), and (2) the difference between the Total Salaried Plan PTL less the Circor Salaried Plan PTL (the "Non-Circor Salaried Plan PTL"); (i) If the total value of plan assets of the ▇▇▇▇▇ Salaried Plan is greater than or equal to the Effective Time Total Salaried Plan PTL, a portion of such assets shall be allocated to Circor by multiplying the Newco Business total amount of such assets by a fraction, the numerator of which is the Circor Salaried Plan PTL and the denominator of which is the Total Salaried Plan PTL. (ii) If the total value of plan assets of the ▇▇▇▇▇ Salaried Plan is less than the Total Salaried Plan PTL, the portion of plan assets which shall be allocated to ▇▇▇▇▇ and Circor shall be based on the priority categories under Section 4044 of ERISA, as required by Treas. Reg. Section 1.414(l)- 1(b)(5)(ii). (4) Within a reasonable time after the assets of the ▇▇▇▇▇ Salaried Plan have been allocated as set forth above, the amount of assets allocated to Circor which shall be transferred in cash or in kind to the Medicare Part D Business Circor Salaried Plan on the Salaried Plan Transfer Date (as defined herein) shall be equal to the sum of the amount allocated to Circor as of the Distribution Date, plus a pro-rata amount of the investment return earned by the ▇▇▇▇▇ Salaried Plan from the Distribution Date to the most recent monthly statement date prior to the Salaried Plan Transfer Date, plus interest, at a rate equal to the average of the daily 3-month Treasury ▇▇▇▇ rates which are published each business day in the Wall Street Journal for the period of time beginning on the first business day after the most recent monthly statement date and ending on the last business day before the Salaried Plan Transfer Date, on such allocated assets from the most recent monthly statement date to the Salaried Plan Transfer Date, less Salaried Plan Allocated Benefit Payments (as defined herein) and Salaried Plan Allocated Expenses (as defined herein) from the Distribution Date to the Salaried Plan Transfer Date. For purposes hereof, the "Salaried Plan Transfer Date" shall be defined as the date that plan assets from the ▇▇▇▇▇ Salaried Plan are transferred to the trust for the Circor Salaried Plan, which date shall occur as soon as reasonably practicable following receipt by Circor of a manner consistent favorable determination letter from the Internal Revenue Service to the effect that the Circor Salaried Plan meets the qualification requirements of Code Section 401(a) or an opinion from Circor's legal counsel which is reasonably satisfactory to ▇▇▇▇▇ to the effect that the Circor Salaried Plan meets the qualification requirements of Code Section 401(a). For purposes hereof, "Salaried Plan Allocated Benefit Payments" shall be equal to any benefit payments made under the ▇▇▇▇▇ Salaried Plan to or in respect of any individual who was a participant in such plan as of the Distribution, who is an employee of the Circor Group immediately following the Distribution and who becomes eligible for benefit payments following the Distribution but prior to the Salaried Plan Transfer Date. For purposes hereof, "Salaried Plan Allocated Expenses" shall be equal to any administrative expenses paid by the trust of the ▇▇▇▇▇ Salaried Plan after the Distribution which are attributable to the administration of the ▇▇▇▇▇ Salaried Plan with respect to participants in the ▇▇▇▇▇ Salaried Plan as of the Distribution who are employees of the Circor Group immediately following the Distribution, including, but not limited to, PBGC premium payments, consulting fees or accounting fees. Notwithstanding the foregoing, ▇▇▇▇▇ shall pay any and all expenses associated with the procedures allocation and methodologies for transfer of assets from the allocation of Assets and Liabilities set forth in Schedule 2.05(a), which illustrates the procedures and methodologies for the allocation of Assets and Liabilities of the Company and its Subsidiaries ▇▇▇▇▇ Salaried Plan to the Newco Business and the Medicare Part D Business as if the Separation were consummated as of September 30, 2010Circor Salaried Plan. (b) From January 1, 2011 until the Effective Time or the earlier termination of this Agreement, each ▇▇▇▇▇ Hourly Plan. The assets and liabilities of the Medicare Part D Business ▇▇▇▇▇ Hourly ----------------- Plan shall be allocated between ▇▇▇▇▇ and Circor, and the Newco Business assets and liabilities allocated to Circor shall be operated transferred to the Circor Hourly Plan, based upon the following methodology: (1) the total value of plan assets of the ▇▇▇▇▇ Hourly Plan as a “closed system”, meaning that during such period of the Businesses Distribution Date shall be operated and the accounting shall be such that all balance sheet, income statement and cash flow items attributable to a Business shall be solely for the account of such Business. (c) Schedule 2.05(c) sets forth determined by adding (i) a description of all corporate overhead items and other shared expenses based on the financial statements fair market value of the Medicare Part D Business set forth in Section 3.10(b) assets of such plan as of the Company Disclosure Letter (the “9/30 Financial Statements”), illustrating the allocation of the corporate overhead and other expenses on a pro forma basis to be borne by the Medicare Part D Business under the “closed system” during the period from January 1, 2011 until the Effective Time (the “Pre-Closing Allocated Expenses”), Distribution Date and (ii) the methodology portion of the minimum required contribution for allocating the 1999 plan year for such expenses between plan which has not yet been contributed to such plan by the Newco Business and the Medicare Part D Business.Distribution Date; (d2) Schedule 2.05(athe plan termination liability (the "PTL") sets forth a description of shall be determined for the Intercompany Accounts based on the 9/30 Financial Statements. All Intercompany Accounts ▇▇▇▇▇ Hourly Plan as of the Effective Time Distribution Date ("Total Hourly Plan PTL"). The PTL shall be settled immediately prior the amount of benefits that would be provided as benefits to participants in the Effective Time (irrespective of the terms of payment of such Intercompany Accounts) based on the procedures and methodologies set forth in Schedule 2.05(a). (e) The Newco Cash and Part D Cash as of immediately prior to the Effective Time shall be allocated to the Newco Business or the Medicare Part D Business in a manner consistent with the procedures and methodologies for the allocation of cash as set forth in Schedule 2.05(a), which illustrates the procedures and methodologies for determining the allocation of cash between Newco Cash and Part D Cash as if the Separation were consummated as of September 30, 2010. (f) Prior to the Effective Time, Newco or a member of the Newco Group may, at Newco’s option, use (i) the Newco Cash received ▇▇▇▇▇ Hourly Plan pursuant to Section 2.02(a)(ii) or (ii) any proceeds from any incurrence of indebtedness by Newco Sub pursuant to Section 4.05 to repay all or any portion 4044 of the Company Indebtedness. Employee Retirement Income Security Act of 1974, as amended (g) The Parties will cooperate in "ERISA"), and the implementation regulations thereunder if the plan terminated, using the assumptions used by the Pension Benefit Guaranty Corporation as of the foregoing and will have reasonable access to the books, records, personnel and work papers relating to the implementation of this Article II. (h) Within thirty (30) days after the Effective Time, Newco shall deliver to the Company a balance sheet for each of the Part D Group and the Newco Group as of immediately after the Effective Time.Distribution Date as