Document:

EXHIBIT 10.10

BIG LOTS 

DEFINED BENEFIT PENSION PLAN

As amended and restated

Effective January 1, 2005

	 	 	 
	BIG LOTS DEFINED BENEFIT PENSION PLAN
	 	1
	ARTICLE I
	 	2
	DEFINITIONS
	 	2
	Section 1.1 - Actuarial (or Actuarially) Equivalent
	 	2
	Section 1.2 - Actuary
	 	3
	Section 1.3 - Approved Absence
	 	3
	Section 1.4 - Beneficiary/Designated Beneficiary
	 	3
	Section 1.5 - Board
	 	3
	Section 1.6 - Break in Service
	 	4
	Section 1.7 - Code
	 	4
	Section 1.8 - Committee
	 	4
	Section 1.9 - Company
	 	4
	Section 1.10  - Compensation
	 	4
	Section 1.11 - Computation Period
	 	5
	Section 1.12 - Contingent Annuitant
	 	5
	Section 1.13 - Continuous Employment
	 	6
	Section 1.14 - Effective Date
	 	6
	Section 1.15 - Eligible Spouse
	 	6
	Section 1.16 - Employee
	 	6
	Section 1.17 - Employer
	 	7
	Section 1.18 - Employment Commencement
	 	7
	Section 1.19 - ERISA
	 	7
	Section 1.20 - Fiduciary
	 	7
	Section 1.21 - Highly Compensated Employee
	 	8
	Section 1.22 - Investment Manager
	 	8
	Section 1.23 - Participant
	 	9
	Section 1.24 - Pension
	 	10
	Section 1.25 - Period-Certain and Life Option
	 	11
	Section 1.26 - Plan
	 	11
	Section 1.27 - Plan Administrator
	 	12
	Section 1.28 - Plan Year
	 	12
	Section 1.29 - Related Company
	 	12
	Section 1.30 - Retirement
	 	12
	Section 1.31 – Service
	 	13
	Section 1.32 - Trust (or Trust Agreement)
	 	16
	Section 1.33 - Trust Fund
	 	16
	Section 1.34 - Trustee(s)
	 	16
	ARTICLE II
	 	17
	PARTICIPATION
	 	17
	Section 2.1 – Eligibility
	 	17
	Section 2.2 - Conditions of Participation
	 	18

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	Section 2.3 - Change in Employment Status
	 	19
	Section 2.4 - Inclusion and Withdrawal of Participating Employers
	 	20
	ARTICLE III
	 	21
	SERVICE AND CREDITED SERVICE
	 	21
	Section 3.1 - Continuous Employment (Vesting and Benefit Accrual)
	 	21
	Section 3.2 - Service (Benefit Vesting)
	 	21
	Section 3.3 - Credited Service (Benefit Accrual)
	 	22
	Section 3.4 - Break in Service (Vesting and Benefit Accrual)
	 	22
	Section 3.5 - Reemployment of a Retired Participant
	 	23
	Section 3.6 - Military Service
	 	23
	ARTICLE IV
	 	25
	REQUIREMENTS FOR RETIREMENT BENEFITS
	 	25
	Section 4.1 - Normal Retirement
	 	25
	Section 4.2 - Early Retirement
	 	25
	Section 4.3 - Late Retirement
	 	25
	Section 4.4 - Disability Pension
	 	26
	Section 4.5 - Deferred Vested Pension
	 	26
	Section 4.6 - Retirement While on Leave of Absence
	 	27
	ARTICLE V
	 	28
	AMOUNT OF RETIREMENT OR PENSION INCOME
	 	28
	Section 5.1 - Normal Retirement Pension
	 	28
	Section 5.2 - Early Retirement Pension
	 	29
	Section 5.3 - Late Retirement Pension
	 	30
	Section 5.4 - Disability Pension
	 	30
	Section 5.5 - Deferred Vested Pension
	 	30
	Section 5.6 - No Duplication of Benefits
	 	31
	Section 5.7 - Benefit Coordination With Other Plans
	 	31
	Section 5.8 - Benefit Commencement
	 	32
	Section 5.9 - Top-Heavy
	 	33
	ARTICLE VI
	 	34
	DEATH BENEFITS
	 	34
	Section 6.1 - Death Benefit
	 	34
	Section 6.2 - Eligible Participants and Determination of Applicable Death Benefits
	 	34
	ARTICLE VII
	 	36
	FORM OF PENSION PAYMENT AND OPTIONAL BENEFITS
	 	36
	Section 7.1 - Normal Form of Pension Payment
	 	36
	Section 7.2 - Qualified Joint and Survivor Pension
	 	36

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	Section 7.3 - Optional Forms of Pension
	 	37
	Section 7.4 - Conditions Regarding Optional Forms of Pension
	 	39
	ARTICLE VIII
	 	41
	PLAN FINANCING
	 	41
	Section 8.1 - Contributions
	 	41
	Section 8.2 - Funding Policy and Method
	 	41
	Section 8.3 - Trust Fund
	 	41
	Section 8.4 - Single Plan
	 	41
	ARTICLE IX
	 	43
	ADMINISTRATION
	 	43
	Section 9.1 - Allocation of Responsibility Among Fiduciaries for Plan and Trust Administration
	 	43
	Section 9.2 - Indemnification
	 	43
	Section 9.3 - Appointment of Committee
	 	44
	Section 9.4 - Records and Reports
	 	44
	Section 9.5 - Other Committee Powers and Duties
	 	44
	Section 9.6 - Rules and Decisions
	 	45
	Section 9.7 - Committee Procedures
	 	46
	Section 9.8 - Authorization of Benefit Payments
	 	46
	Section 9.9 - Application and Forms for Pension
	 	46
	Section 9.10 - Facility of Payment
	 	46
	Section 9.11 -Claims Procedure
	 	47
	Section 9.12 - Appeal and Review Procedure
	 	47
	Section 9.13 - Evidence
	 	48
	Section 9.14 - Limitation Regarding Small Payments
	 	48
	Section 9.15 - Underwriting of Benefits
	 	48
	Section 9.16 - Misstatement in Application for Benefits
	 	48
	Section 9.17 - Beneficiary Designation
	 	48
	ARTICLE X
	 	50
	AMENDMENT, RIGHT TO TERMINATE AND ACTION BY EMPLOYER
	 	50
	Section 10.1 - Right to Amend
	 	50
	Section 10.2 - Right to Discontinue Benefit Accrual
	 	50
	Section 10.3 - Right to Terminate
	 	51
	Section 10.4 - Action by Employer
	 	51
	ARTICLE XI
	 	52
	SUCCESSOR EMPLOYER AND MERGER OR CONSOLIDATION OF PLANS
	 	52
	Section 11.1 - Successor Employer
	 	52
	Section 11.2 – Merger
	 	52

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	ARTICLE XII
	 	54
	MISCELLANEOUS PROVISIONS
	 	54
	Section 12.1 - Nonguarantee of Employment
	 	54
	Section 12.2 - Rights to Trust Assets
	 	54
	Section 12.3 - Disallowance of Contribution Deduction
	 	55
	Section 12.4 - Mistake of Fact
	 	55
	ARTICLE XIII
	 	56
	GENERAL PROVISIONS
	 	56
	Section 13.1 – Construction
	 	56
	Section 13.2 - Controlling Law
	 	56
	Section 13.3 - Effect of Invalidity of Provision
	 	56
	Section 13.4 - Execution - Number of Copies
	 	56
	SCHEDULE I
	 	57
	TERMINATION OF PLAN
	 	57
	Section 1 - Effect on Participants
	 	57
	Section 2 - Allocation of Assets
	 	57
	Section 3 - Distribution of Assets
	 	57
	Section 4 - Residual Amounts
	 	57
	SCHEDULE II
	 	58
	LIMITATION ON BENEFITS
	 	58
	Section 1 - Basic Limitation
	 	58
	Section 2 - Adjustments to Basic Limitation
	 	59
	Section 3 - Dual Plan Limitation
	 	62
	Section 4 - Provisions for Excess Benefit
	 	63
	Section 5 - Average Annual Earnings
	 	63
	SCHEDULE III
	 	64
	PARTICIPATING EMPLOYERS
	 	64
	Section 1 - Participating Employers as of the Effective Date
	 	64
	SCHEDULE IV
	 	65
	TOP-HEAVY PROVISIONS
	 	65
	Section 1 - Application
	 	65
	Section 2- Special Vesting Rule
	 	66
	Section 3- Special Minimum Benefit
	 	66
	Section 4- Special Maximum Combined Plans Limit
	 	66
	Section 5- Key Employee and Non-Key Employee Defined
	 	66

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BIG LOTS DEFINED BENEFIT PENSION PLAN

Effective as of September 17, 1974, Consolidated Stores Corporation (the “Company”) adopted the Consolidated Stores Corporation Defined Benefit Pension Plan (the “Plan”) and executed a Trust
Agreement to provide retirement benefits for certain of its employees.

The Plan was further amended and restated as of March 1, 1976, April 1, 1983, January 1, 1989, and again as of January 1, 1997, each amendment and restatement being a continuation of the original Plan.

Effective as of January 1, 2005, the Company hereby adopts the amended and restated Plan as set forth herein as a continuation of the Prior Plan.

Effective May 16, 2001, the name of the Company changed to Big Lots Stores, Inc. and effective as of such date the name of the Plan changed to Big Lots Stores Defined Benefit Pension Plan.  Effective January 1, 2005,
Big Lots, Inc. became the sponsor of the Plan.

The Trust Agreement which was established by the agreement executed on September 17, 1974, as amended, and as further amended and restated effective March 1, 1976, and April 1, 1983, is intended to be a part of this
Plan.

The Plan is intended to meet the requirements of Internal Revenue Code of 1986, Section 401(a), and the Employee Retirement Income Security Act of 1974, as either may be amended.

The provisions of this Plan will apply only to an employee who becomes a Participant and who terminates employment on and after January 1, 2005.  The rights and benefits, if any, of a former employee will be
determined in accordance with the provisions of the Plan as in effect on the date his employment terminated.

Schedule I (Termination of Plan), Schedule II (Limitation on Benefits), Schedule III (Participating Employers), and Schedule IV (Top-Heavy Provisions) attached to this Plan are incorporated herein by reference
and are a part hereof.

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ARTICLE I

DEFINITIONS

The following words and phrases, when used in this Plan, unless the context clearly indicates otherwise, will have the following meanings:

Section 1.1 - Actuarial (or Actuarially) Equivalent

A form of benefit differing in time, period or manner of payment from a specific benefit provided under the Plan but being of the same computed value.  For determining the amount of any Actuarial Equivalent, except
for a lump sum, the mortality table is the U P - 1984 Mortality Table; the interest rate will be the interest rate specified by the Pension Benefit Guaranty Corporation to value immediate or deferred annuities, as applicable, in connection with pension plan terminations as in effect on the date of
benefit commencement.

For purposes of determining the Actuarial Value of the amount of any lump sum benefit and benefits related to a Qualified Domestic Relations Order, as defined by the Internal Revenue Code Section 414(p), on or after
January 1, 1996, but prior to April 1, 2002, the following assumptions
apply:

	 	 	 	 
	 	(a)	 	Mortality: The mortality table specified in Revenue Ruling 95-6 based upon a fixed blend of fifty percent (50%) of the male mortality rates and fifty percent (50%) of the female mortality rates from the 1983 Group Annuity Mortality Table:

	 	 	 	 
	 	(b)	 	Interest:  The rate paid on thirty-(30) year Treasury Bills as determined during the third month before the date of distribution.

For purposes of determining the Actuarial Value of the amount of any lump sum benefits and benefits related to a Qualified Domestic Relations Order as defined above calculated on and after April 1, 2002, the
following assumptions shall apply:

	 	 	 	 
	 	(c)	 	Mortality: The table prescribed by the Secretary of the Treasury, such table being based on the prevailing commissioners’ standard table (described in Code Section 807(d)(5)(A), currently the 1983 Group Annuity Mortality Table) used to determine reserves for group
annuity contracts issued on the date as of which present value is being determined.

	 	 	 	 
	 	(d)	 	Interest:  The annual rate of interest on thirty (30) year Treasury securities, averaged over all business days in the second calendar month prior to the first day of the Plan Year in which the date of distribution occurs.

Notwithstanding any provision to the contrary, for the twelve month period beginning on April 1, 2002, and ending on March 31, 2003, lump-sum amounts shall be calculated using the mortality table provided in (c)
above and the interest rate provided in either (b) or (d) above, whichever produces the greater amount.

2

For purposes of determining the Actuarial Value of the amount of any lump sum benefits and benefits related to a Qualified Domestic Relations Order as defined above calculated on and after January 1, 2003, the
following assumptions shall apply:

	 	 	 	 
	 	(e)	 	Mortality: The table prescribed by the Secretary of the Treasury, such table being based on the prevailing commissioners’ standard table (described in Code Section 807(d)(5)(A), currently the UP94 mortality table (the basic underlying mortality rates in the 1994 Group
Annuity Reserving Table) projected to 2002, based on a fixed blend of 50% of the unloaded male mortality rates and 50% of the unloaded female mortality rates) used to determine reserves for group annuity contracts issued on the date as of which present value is being determined.

	 	 	 	 
	 	(f)	 	Interest: The annual rate of interest on thirty-(30) year Treasury securities, averaged over all business days in the second calendar month prior to the first day of the Plan Year in which the date of distribution occurs.

The interest and mortality factors stated in (a) and (b) are effective for purposes of determining limitations on benefits under Schedule II of the Plan for the limitation year beginning in 1995 in accordance with
Revenue Ruling 98-1, Q&A 14, Method 1.  For purposes other than Schedule II, these provisions are effective April 1, 2002.

Section 1.2 - Actuary

An independent, qualified actuary who is a Fellow of the Society of Actuaries and an enrolled actuary pursuant to the provisions of ERISA, selected by the Company, or a firm of independent actuaries selected by
the Company at least one of whose members meets the preceding requirements.

Section 1.3 - Approved Absence

Absence of an employee authorized or approved by his Employer, as determined in accordance with the normal practice of the Employer, provided the employee returns in the period specified by the Employer.

Section 1.4 - Beneficiary/Designated Beneficiary

The Beneficiary or Designated Beneficiary will be the Eligible Spouse unless a qualified election is made pursuant to Sections 7.2 or 9.17.

Section 1.5 - Board

The present and any succeeding board of directors of the Company or any committee of said board of directors which will have the authority of said board of directors with respect to the Plan and/or the Trust.

3

Section 1.6 - Break in Service

The meaning described in Section 3.4 in respect to a Break in Service for vesting and benefit accrual.  The meaning described in Section 2.1 in respect to eligibility to participate in the Plan.

Section 1.7 - Code

The Internal Revenue Code of 1986, as amended.

Section 1.8 - Committee

The Big Lots Associate Benefit Committee.

Section 1.9 - Company

Consolidated Stores Corporation, a Delaware corporation.  Effective May 16, 2001, Company means Big Lots Stores, Inc., an Ohio corporation.  Effective January 1, 2005, Company means Big Lots, Inc.

Section 1.10 - Compensation

	 	 	 	 
	 	(a)	 	Compensation

The monthly equivalent of the total cash remuneration (including overtime, bonuses, commissions and other forms of compensation), as reflected in the appropriate box on the Federal
Income Tax Wage Statement (Form W-2) paid for services rendered to an Employer during a Plan Year (before deduction of salary deferral amounts under a Company plan qualified pursuant to Code Section 401(k) or salary reduction amounts under a company plan qualified pursuant to Code Section
125), excluding taxable portion of life insurance, gains on non-qualified stock options, bonuses attributable to relocation, and deductible as well as non-deductible relocation expenses.  Where payments not for services, such as payments for travel or expenses, are not separately stated, the
Committee will determine and make appropriate reduction for such payments.

In respect to an employee who transferred directly into the employ of an Employer from a Related Company, applicable earnings for services rendered to the Related Company will be
treated as Compensation from his Employer for purposes of this Plan.

The annual Compensation of each Participant taken into account under the Plan for any Plan Year beginning after December 31, 1983, and before January 1, 1994, will be limited to two
hundred thousand dollars ($200,000), or such greater amount as the Secretary may provide as a cost-of-living adjustment under Code Section 416(d).

Notwithstanding anything in the Plan to the contrary, in no event will the Compensation of a Participant taken into account under the Plan for any Plan Year

4

exceed one hundred fifty thousand dollars ($150,000), subject to adjustment annually as provided in Code Sections 401(a)(17)(B) and 415(d); provided, however, that the dollar increase
in effect on January 1 of any calendar year, if any, is effective for Plan Years beginning in such calendar year.

The annual Compensation of a Participant taken into account in determining benefit accruals for any Plan Year beginning after December 31, 2001, shall not exceed two hundred thousand
dollars ($200,000), as adjusted for cost-of-living increases in accordance with Code Section 401(a)(17)(B).  The cost-of-living adjustment in effect for a calendar year applies to Compensation for the determination period that begins with or within such calendar year.

Effective for Plan Years beginning on and after January 1, 2001, Compensation shall include elective amounts that are not includible in the gross income of the employee under Code
Section 132(f)(4).

Effective April 1, 1996, Compensation for a Highly Compensated Employee will only include Compensation earned prior to April 1, 1996, or for an Eligible Employee becoming a Highly
Compensated Employee after April 1, 1996, Compensation earned prior to becoming a Highly Compensated Employee.

	 	 	 	 
	 	(b)	 	Final Average Compensation

A Participant’s average monthly Compensation during the highest five (5) consecutive years, excluding the Plan Year of termination, if not a full twelve (12) month period;
provided, however, if the Participant will not have completed five (5) consecutive years of Participation, such average will be based on his Compensation averaged over his months of Participation, not to exceed sixty (60) months.  For a Participant who incurs an Approved Absence or who is rehired
after a Break in Service with his pre-break Service restored, the Plan Years prior to and following his Approved Absence or Break in Service will be considered consecutive Plan Years even though they were not contiguous.

Section 1.11 - Computation Period

The Plan Year is used for all purposes, except when determining an employee’s initial eligibility to participate, the Computation Period will be the twelve month period beginning with the Employee’s
Employment Commencement Date.

Section 1.12 - Contingent Annuitant

	 	 	 	 
	 	(a)	 	Contingent Annuitant

The person designated on a form filed with the Committee by a Participant to receive a Pension subsequent to a Participant’s death pursuant to Section 7.4(b).

5

	 	 	 	 
	 	(b)	 	Contingent Annuitant Option

The form of Pension described in Section 7.4(b).

Section 1.13 - Continuous Employment

The period of employment described in Section 3.1.

Section 1.14 - Effective Date

Except where separately stated, January 1, 2005, is the date on which the provisions of this amended and restated Plan become effective.

Section 1.15 - Eligible Spouse

The lawful husband or wife, as the case may be, of the Participant as recognized under the laws of the state in which the Participant regularly and continuously is employed by his Employer or applicable Related
Company as of the date specified in the relevant section of this Plan.

Section 1.16 - Employee

	 	 	 	 
	 	(a)	 	Eligible Employee

Any person classified as an employee of an Employer or such other classification as provided in Schedule III, on or after the Effective Date, who is receiving remuneration for personal
services rendered to an Employer (or who would be receiving such remuneration except for an Approved Absence).  Eligible Employee shall not include any “leased employee” as defined in Code Section 414(n)(2) or a person who would be a “leased employee” but for the one-year
requirement set forth below.  A leased employee is a person who is not an employee of the Employer and who provides services to the Employer where such services are (a) performed pursuant to an agreement between the Employer and any other person, (b) such person has performed such services for
the Employer on a substantially full-time basis for a period of at least one (1) year and (c) such services are performed under primary direction or control by the Employer (or such other test as may be substituted for (c) in Code Section 414(n)(2)).  A leased employee will not be considered an
employee of the recipient if (i) such employee is covered by a money purchase plan providing (1) a nonintegrated employer contribution rate of at least ten percent (10%) of compensation, as defined in Code Section 415(c)(3), but including amounts contributed pursuant to a salary reduction agreement
which are excludable from the employee’s gross income under Code Section 125, 402(a)(8), 402(h) or 403(b), and, effective January 1, 2001, Section 132(f), (2) immediate participation, and (3) full and immediate vesting; (ii) leased employees do not constitute more than twenty percent (20%) of
the recipient’s non-highly compensated workforce.

	 	 	 	 
	 	(b)	 	Ineligible Employee

6

Any person employed by an Employer who is not an Eligible Employee, or any person who is employed by a Related Company which is not an Employer.  The term “Ineligible
Employee” will also include a person who had been an Eligible Employee and either has become employed in an employment status other than that of an Eligible Employee or has been transferred to a Related Company which is not an Employer, for so long as he remains employed.

Section 1.17 - Employer

Each of the following business entities (except that, in adopting the Plan for the benefit of its Eligible Employees, such business entity may limit or extend the application of the Plan to one or more groups of
employees and/or divisions, locations or operations):

	 	 	 	 
	 	(a)	 	The Company

	 	 	 	 
	 	(b)	 	Any Related Company, which is participating pursuant to Section 2.4 and listed in Schedule III.

Section 1.18 - Employment Commencement

	 	 	 	 
	 	(a)	 	Employment Commencement Date

The date upon which an Eligible Employee first performs an Hour of Service for an Employer or a Related Company.

	 	 	 	 
	 	(b)	 	Reemployment Commencement Date

The date upon which a former employee who has incurred a Break in Service first performs an Hour of Service for an Employer or a Related Company after such Break in Service.

Section 1.19 - ERISA

The Employee Retirement Income Security Act of 1974, as amended.

Section 1.20 - Fiduciary

The Company and other Employers (acting through their respective boards of directors or duly authorized officers), the Committee, the Trustee, and/or other parties named as Fiduciaries pursuant to Section 9.1, but
only with respect to the specific responsibilities of each for Plan and Trust administration, all as described in Article IX.

7

Section 1.21 - Highly Compensated Employee

	 	 	 	 
	 	(a)	 	Any Employee of the Employer who, during the current Plan Year or the preceding Plan Year was at any time a five percent (5%) owner of the Employer within the meaning of Code Section 416(i)(1).

	 	 	 	 
	 	(b)	 	Any Employee of the Employer who, during the preceding Plan Year received “compensation” from the Employer in excess of eighty thousand dollars ($80,000), or such higher amount as may be provided under Code Section 414(q).

	 	 	 	 
	 	(c)	 	For purposes of determining Highly Compensated Employees, compensation will mean compensation paid by the Employer for purposes of Code Section 415(c)(3) and will include amounts deferred pursuant to Code Sections 125, 402(a)(8) and 402(h)(1)(8), and, effective January 1, 2001, 132(f).

	 	 	 	 
	 	(d)	 	The determination of Highly Compensated Employees will be determined by the Employer on a controlled group basis and will not be determined on a plan by plan basis.

	 	 	 	 
	 	(e)	 	The determination of Highly Compensated Employees will be governed by Code Section 414(q) and the regulations issued thereunder.

	 	 	 	 
	 	(f)	 	For purposes of Code Section 414(q), “Look Back Year” will mean the twelve (12) month period immediately preceding the Determination Year.  “Determination Year” will mean the current Plan Year.

	 	 	 	 
	 	(g)	 	A Former Employee will be treated as a Highly Compensated Employee if (i) such Former Employee was a Highly Compensated Employee when such Former Employee separated from service, or (ii) such Former Employee was a Highly Compensated Employee at any time after attaining age fifty-five
(55).

Section 1.22 - Investment Manager 

A Fiduciary, other than the Trustee,

	 	 	 	 
	 	(a)	 	who has the power to manage, acquire or dispose of any Plan assets pursuant to an Investment Manager agreement, and

	 	 	 	 
	 	(b)	 	which is

	 	 	 	 	 
	 	 	(i)	 	a bank, as defined in the Investment Advisers Act of 1940;

	 	 	 	 	 
	 	 	(ii)	 	an insurance company qualified to manage, acquire or dispose of the assets of an employee benefit plan under the laws of more than one state; or 

	 	 	 	 	 
	 	 	(iii)	 	a firm registered as an investment adviser under the Investment Advisers Act of 1940.

8

Section 1.23 - Participant

	 	 	 	 
	 	(a)	 	Participant

A person who is or was an Eligible Employee who

	 	 	 	 	 
	 	 	(i)	 	has met all the participation requirements of this Plan,

	 	 	 	 	 
	 	 	(ii)	 	has become included in this Plan, as provided in Article II, and

	 	 	 	 	 
	 	 	(iii)	 	is an Active Participant, Inactive Participant, Retired Participant, Disabled Participant or Suspended Participant.

	 	 	 	 
	 	(b)	 	Active Participant

A Participant who is an Eligible Employee who satisfied the eligibility requirements in Section 2.1 and who does not come under the purview of subsections (c) through (f) of
this Section 1.23.

	 	 	 	 
	 	(c)	 	Inactive Participant

A Participant whose employment terminated other than by reason of Retirement, death or disability and who is entitled to, but has not yet commenced to receive, benefits in accordance with Section 4.5.

	 	 	 	 
	 	(d)	 	Retired Participant

A Participant who has retired under this Plan in accordance with its provisions, and who is receiving or is entitled to receive a Pension, and will include a formerly Inactive
Participant from the time he commences receiving a Pension.  The term “Retired Participant” will not include a Disabled Participant, except where the context will clearly indicate to the contrary.

	 	 	 	 
	 	(e)	 	Disabled Participant

A Participant who is receiving or is entitled to receive a Disability Pension as provided in Section 4.4.

	 	 	 	 
	 	(f)	 	Suspended Participant

A previously Active Participant who either (i) is still working for an Employer (or a Related Company which is not an Employer) and has not incurred a Break in Service, but who is an
Ineligible Employee, or (ii) has incurred a termination of employment and has neither incurred a Break in Service nor been reemployed.  A Suspended Participant who incurs a Break in Service and is not then entitled to a Deferred Vested Pension will no longer be a Participant.

9

Section 1.24 - Pension

	 	 	 	 
	 	(a)	 	Pension

The retirement or disability income provided under this Plan, normally payable in monthly installments.

	 	 	 	 
	 	(b)	 	Normal Retirement Pension

The Pension described in Section 5.1.

	 	 	 	 
	 	(c)	 	Early Retirement Pension

The Pension described in Section 5.2.

	 	 	 	 
	 	(d)	 	Late Retirement Pension

The Pension described in Section 5.3.

	 	 	 	 
	 	(e)	 	Disability Pension

The Pension described in Section 5.4.

	 	 	 	 
	 	(f)	 	Deferred Vested Pension

The Pension described in Section 5.5.

	 	 	 	 
	 	(g)	 	Accrued Retirement Pension

As of a Participant’s actual date of Retirement or other termination of employment or any other date of determination prior to his Normal Retirement Date:

	 	 	 	 	 
	 	 	(i)	 	The Pension to which the Participant would have been entitled at his Normal Retirement Date (without taking into consideration benefits under any Other Plan) had he remained in the employ of an Employer accruing Credited Service at the maximum annual rate until that date, not to exceed 25
years, and based on the assumption that his Final Average Compensation (as defined in Section 1.10) as of the date of determination is Final Average Compensation at his Normal Retirement Date; multiplied by

	 	 	 	 	 
	 	 	(ii)	 	A fraction, the numerator of which is his Credited Service up to the date of determination and the denominator of which is the Credited Service he would have had if he had remained in the employ of an Employer accruing Credited Service at the maximum annual rate until his Normal Retirement
Date; less

10

	 	 	 	 	 
	 	 	(iii)	 	The amount of any reductions and benefit limitations made pursuant to Sections 5.7 and Schedule II, respectively.

As of a Participant’s actual date of Late Retirement, his Accrued Retirement Pension will be his Pension calculated as if his Late Retirement Date is his Normal Retirement Date.

	 	 	 	 	 
	 	 	(iv)	 	Notwithstanding the above, the Accrued Retirement Pension under this amended and restated Plan for any Participant on the Effective Date who was a Participant in the Plan on December 31, 1996, will be at least equal to the accrued monthly pension provided for by the Plan as of December 31,
1996.

	 	 	 	 
	 	(h)	 	Qualified Joint and Survivor Pension

  The form of Pension described in Section 7.2.

	 	 	 	 
	 	(i)	 	Maximum Pension

The largest amount of Pension payable under the particular circumstances after application of the limitations described in Schedule II.

Section 1.25 - Period-Certain and Life Option

The form of Pension described in Section 7.3(b).

Section 1.26 - Plan

	 	 	 	 
	 	(a)	 	Plan

The Consolidated Stores Corporation Amended and Restated Defined Benefit Pension Plan, the terms of which are set forth herein, as it may be amended from time to time.  Effective May
16, 2001, Plan means the Big Lots Stores, Inc. Defined Benefit Pension Plan.  Effective January 1, 2005, the Plan means the Big Lots Defined Benefit Pension Plan.

	 	 	 	 
	 	(b)	 	Other Plan

Any pension, deferred profit sharing or other retirement plan to which an Employer or Related Company contributes, other than this Plan, or any plan which provides benefits intended to
be supplemental to the benefits provided under this Plan.  Benefits provided under any qualified retirement plan to which an Employer or Related Company contributes on behalf of one or more of its employees, other than this Plan, will not be intended to be supplemental to the benefits provided
under this Plan.

11

	 	 	 	 
	 	(c)	 	Prior Plan

The Plan continued in amended and restated form by this Plan, referred to on page 1.

Section 1.27 - Plan Administrator

The Company, notwithstanding the fact that certain administrative functions under or with respect to this Plan may have been delegated to the Committee or to any other person, persons or entity.

Section 1.28 - Plan Year

The twelve-month period commencing on January 1 and ending on December 31.  Records of the Plan will be established and maintained on the basis of the Plan Year.

Section 1.29 - Related Company

	 	 	 	 
	 	(a)	 	Any corporation included within a “controlled group of corporations” of which the Company is a member, as determined under Code Sections 414(b) and 414(m) and Regulations issued pursuant thereto [except that, with respect to the benefit limitation under Section 1 of Schedule II
hereof, such determination will be made after substituting the phrase “more than fifty percent (50%)” for the phrase “at least eighty percent (80%)” each place it appears in Code Section 1563(a)(1)]; and any partnership, sole proprietorship, trust, estate, or corporation
included within

	 	 	 	 	 
	 	 	(i)	 	a “parent-subsidiary group of trades or businesses under common control,” 

	 	 	 	 	 
	 	 	(ii)	 	a “brother-sister group of trades or businesses under common control,” or 

	 	 	 	 	 
	 	 	(iii)	 	a “combined group of trades or businesses under common control,” as determined under Code Section 414(c) and Regulations issued pursuant thereto.

	 	 	 	 
	 	(b)	 	Any other entity designated as a Related Company by the Company. 

Section 1.30 - Retirement

	 	 	 	 
	 	(a)	 	Retirement

 Termination of employment for reason other than death or transfer to another Employer or Related Company after a Participant has completed all requirements for a Normal, Early, or Late
Retirement Pension.  Retirement will be considered as commencing on the date immediately following a Participant’s last day of employment (or Approved Absence, if later).

12

	 	 	 	 
	 	(b)	 	Normal Retirement

Retirement under the circumstances described in Section 4.1 qualifying a Retired Participant to benefits pursuant to Section 5.1.

	 	 	 	 
	 	(c)	 	Normal Retirement Date

 The first day of the month coincident with or next following the Participant’s Normal Retirement Age.  “Normal Retirement Age” will mean the later of (i) a
Participant’s attainment of his sixty-fifth (65th) birthday, or (ii) his fifth anniversary of the date the Participant commenced participation in the Plan.

	 	 	 	 
	 	(d)	 	Early Retirement

 The Retirement of a Participant prior to Normal Retirement Date in accordance with Section 4.2.  In the event of Early Retirement, a Retired Participant will be entitled to an Early
Retirement Pension computed as provided in Section 5.2.

	 	 	 	 
	 	(e)	 	Early Retirement Date

  In the case of a Retired Participant on Early Retirement, the first day of the month coincident with or next following the date on which he actually retires.

	 	 	 	 
	 	(f)	 	Late Retirement

The continued employment of an Active Participant after his Normal Retirement Date in accordance with Section 4.3.  A Retired Participant will be entitled to a Late Retirement Pension
computed as provided in Section 5.3.

	 	 	 	 
	 	(g)	 	Late Retirement Date

The first day of the month coincident with or next following the actual Retirement of an Active Participant who had been on Late Retirement.

Section 1.31 – Service

	 	 	 	 
	 	(a)	 	Service

 The period of a Participant’s employment considered in determining his vesting in any benefit under the Plan as provided in Section 3.2.  Eligibility to participate will be
determined by counting Hours of Service as provided in Section 2.1.

	 	 	 	 
	 	(b)	 	Credited Service

  The period of a Participant’s employment considered in determining the amount of benefit payable to him or on his behalf as provided in Section 3.3.

13

	 	 	 	 
	 	(c)	 	Month of Service

  A Month of Service will be granted hereunder for each calendar month in which an employee completes at least one (1) Hour of Service.

	 	 	 	 
	 	(d)	 	Month of Participation

A Month of Participation will be granted hereunder for each calendar month in which a Participant completes at least one (1) Hour of Service, excluding any calendar month prior to the
Participant’s date of participation.

	 	 	 	 
	 	(e)	 	Hour of Service

	 	 	 	 	 
	 	 	(i)	 	General Rule

An Hour of Service as defined in this subparagraph (i) will be credited to the Computation Period in which the Hours of Service are worked or credited to an employee.

	 	 	 	 	 	 
	 	 	 	(1)	 	Hours of Service for Performance of Duties - An Hour of Service will be granted hereunder for each hour for which an employee is paid, or entitled to payment, for the performance of duties for an Employer or Related Company during an applicable Computation Period.

	 	 	 	 	 	 
	 	 	 	(2)	 	Hours of Service When No Duties Are Performed - An Hour of Service will also be granted (up to a maximum of five hundred one (501) hours for any single continuous period) for each hour an employee is paid, or entitled to payment, by an Employer or Related Company on account of a period
during which he performs no duties (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including short-term disability), layoff, military absence, jury duty or Approved Absence.  Notwithstanding the preceding sentence:

	 	 	 	 	 	 	 	 
	 	 	 	 	 	(A)	 	An hour for which an employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed will not be credited to the employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable
workmen’s compensation, unemployment compensation or disability insurance laws; and

14

	 	 	 	 	 	 	 	 
	 	 	 	 	 	(B)	 	Hours of Service will not be credited for a payment which solely reimburses an employee for medical or medically related expenses incurred by the employee.

For purposes of this subparagraph (i)(2), a payment will be deemed to be made by or due from an Employer or Related Company regardless of whether such payment is made by or due from an
Employer or Related Company directly, or indirectly through, among others, a trust fund or insurer to which an Employer or Related Company contributes or pays premiums and regardless of whether contributions made or due to the trust fund, insurer or other entity are for the benefit of particular
employees or are on behalf of a group of employees in aggregate.

	 	 	 	 	 	 
	 	 	 	(3)	 	An Hour of Service will be granted for each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by an Employer or Related Company.  The same Hours of Service will not be credited both under subparagraph (i)(1) or (i)(2), as the case may be, and under
this subparagraph (i)(3).  Thus, for example, an employee who receives a back pay award following a determination that he or she was paid at an unlawful rate for Hours of Service previously credited will not be entitled to additional credit for the same Hours of Service.  Crediting of Hours of
Service for back pay awarded or agreed to with respect to periods described in subparagraph (i)(2) will be subject to the limitations set forth in that subparagraph.  For example, no more than 501 Hours of Service will be credited for payments of back pay, to the extent that such back pay is agreed
to or awarded for a period of time during which an employee did not perform or would not have performed duties.

	 	 	 	 	 
	 	 	(ii)	 	Special Rule for Determining Hours of Service for Reasons Other Than the Performance of Duties

In the case of a payment which is made or due on account of a period during which an employee performs no duties, and which results in crediting of Hours of Service under subparagraph
(i)(2) of this subsection (e), or in the case of an award or agreement for back pay to the extent that such award or agreement is made with respect to a period described in subparagraph (i)(2) of this subsection (e), the number of Hours of Service to be credited will be the number of regularly
scheduled working hours included in the units of time for which the payment is made or, in the case of an employee without a regular work schedule, at the rate of thirty-eight and three quarters (38.75) hours per week or seven and three quarters (7.75) hours per day, and will be credited to the
Computation Period in which the Hours of Service are credited to the employee but in no event will more than five hundred one (501) Hours of

15

Service be credited for any applicable period.  Hours of Service will be calculated or credited in a manner consistent with Department of Labor Regulations Section 2530.200b-2(b) and
(c) which is incorporated herein by reference.

Section 1.32 - Trust (or Trust Agreement)

The trust continued in an amended and restated form by the agreement between the Company and the Trustee effective as of September 17, 1974, which constitutes part of this Plan, or any other trust created by
agreement between the Company and a trustee named therein which will also constitute a part of this Plan, as the same may be or has been amended from time to time, or any agreements successor thereto.

Section 1.33 - Trust Fund

The fund known as the Consolidated Stores Corporation Amended and Restated Defined Benefit Pension Trust, maintained in accordance with the terms of the Trust Agreement, as it may be amended from time to time.

Section 1.34 - Trustee(s)

The Trustee(s) named in the Trust Agreement which constitute part of this Plan and any additional or successor Trustee(s) from time to time acting as Trustee(s) of the Trust Fund.

16

ARTICLE II

PARTICIPATION

Section 2.1 – Eligibility

An Eligible Employee will become a Participant as follows:

	 	 	 	 
	 	(a)	 	Any Eligible Employee included in the Plan immediately preceding January 1, 2005, will continue to participate in accordance with the provisions of this amended and restated Plan.

	 	 	 	 
	 	(b)	 	Subject to subsection (c) below, any other Eligible Employee will be eligible to become a Participant of the Plan on the first day of the month coincident with or next following the date on which he meets the following requirements: (i) attaining the age of twenty-one (21), and (ii) being
credited with at least one thousand (1,000) Hours of Service during the three hundred sixty-five (365) day period beginning with his Employment Commencement Date and ending on the anniversary date of his Employment Commencement Date.  If any Eligible Employee fails to satisfy the one thousand
(1,000) hour requirement, he will be ineligible to enter the Plan as of such anniversary date, but will be reconsidered on each subsequent January 1 (“Plan Anniversary Date”) and will automatically become a Participant of the Plan as of the first such Plan Anniversary Date thereof on
which he was credited with at least one thousand (1,000) Hours of Service during the Plan Year immediately preceding such Plan Anniversary Date.

	 	 	 	 
	 	(c)	 	Notwithstanding any other provision of the Plan to the contrary, after March 31, 1994, no Eligible Employee who is newly hired, or who is rehired after his prior Service has been forfeited under Section 3.4(c), will be eligible to become a Participant under this plan.

An Eligible Employee who satisfies the eligibility requirements of the Plan must be actively employed on the date he satisfies such requirements in order to participate hereunder.  An employee on layoff, sick leave,
or Approved Absence will not be considered actively employed.  Such employee will, however, automatically enter the Plan upon his return to active employment.

Breaks in Service after an employee has become a Participant of the Plan will be determined under Section 3.4.

A former employee who is rehired prior to five (5) consecutive one (1) year Breaks in Service, as determined under this Section of the Plan, will have his prior Hours of Service and his age on his original Employment
Commencement Date taken into account for purposes of determining his eligibility to participate under this Section 2.1.  If a former employee described in this paragraph satisfies the participation requirements of this Section 2.1 on his Reemployment Commencement

17

Date or date of rehire, as applicable, he will thereupon become a Participant in the Plan.  Provided, however, that any former employee who completed a one-year Break in Service before January 1, 1985, must satisfy
the participation requirements of this Section 2.1 based solely on his age on his Reemployment Commencement Date and the number of his Hours of Service in the three hundred sixty-five (365) day period beginning with his Reemployment Commencement Date.

A former employee who is rehired subsequent to five (5) consecutive one-year Breaks in Service, as determined under this Section of the Plan, must satisfy the participation requirements of this Section 2.1 based
solely on his age on his Reemployment Commencement Date and the number of his Hours of Service in the three hundred sixty-five (365) day period beginning with his Reemployment Commencement Date.

An Ineligible Employee who becomes an Eligible Employee will become a Participant upon the date of change in his employment status provided he has satisfied the aforementioned conditions concurrent with or prior to
his date of transfer.

Any Inactive Participant or former Participant receiving an Early or Normal Retirement Pension who is rehired will be immediately eligible to participate in the Plan as of his date of rehire.

Solely for purposes of determining whether a Break in Service for participation has occurred as determined under this Section of the Plan, an employee who is absent from work for maternity or paternity reasons will
receive credit for the Hours of Service which would otherwise have been credited to such individual but for such absence, up to a maximum of five hundred one (501) Hours of Service during the Computation Period.  For purposes of this paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of a birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such
child for a period beginning immediately following such birth or placement.  The Hours of Service credited under this paragraph will be credited (1) in the Computation Period in which the absence begins if the crediting is necessary to prevent a Break in Service in that period, or (2) in all other
cases, in the following Computation Period.

Section 2.2 - Conditions of Participation

An Eligible Employee will not become a Participant herein unless he furnishes within a reasonable time limit established by the Committee such applications, consents, proofs of date of birth, elections, beneficiary
designations and other documents and information as prescribed by the Committee.  Each Eligible Employee upon becoming a Participant will be deemed conclusively, for all purposes, to have assented to the terms and provisions of this Plan and will be bound thereby.

18

Section 2.3 - Change in Employment Status

	 	 	 	 
	 	(a)	 	Change From Eligible to Ineligible Status - If an Active Participant becomes an Ineligible Employee because of a change in his employment status (including a transfer to the employ of a nonparticipating Related Company), he will not incur a Break in Service, but will become and remain a
Suspended Participant for so long as he remains in such ineligible status, and the following special provisions will apply:

	 	 	 	 	 
	 	 	(i)	 	His Accrued Retirement Pension determined as of the date he becomes a Suspended Participant will be frozen and will not increase on account of Compensation received while he is a Suspended Participant.

	 	 	 	 	 
	 	 	(ii)	 	His Continuous Employment while a Suspended Participant will be counted as Service to the extent that the requirements of Section 3.2 are satisfied but not as Credited Service.

	 	 	 	 	 
	 	 	(iii)	 	While he is a Suspended Participant, he will have the same right as an Active Participant who is otherwise in a similar position to elect an optional form of Pension or to make any other election hereunder.

	 	 	 	 	 
	 	 	(iv)	 	When a Suspended Participant’s employment terminates for any reason, including Retirement or death, he (or, in the event of death, his Beneficiary) will be entitled to the benefits provided under the applicable provisions of Articles IV, V and VI in effect at the date of change in
employment status.  However, to the extent that a benefit is payable to or with respect to him pursuant to the provisions of Sections 5.7 and 5.8, his benefits under the Plan will be adjusted appropriately.

	 	 	 	 	 
	 	 	(v)	 	If a Suspended Participant returns to the status of an Eligible Employee, he thereupon will again become an Active Participant of this Plan and, upon his subsequent Retirement or other termination of employment, his benefit will be based upon his actual Final Average Compensation and Credited
Service.  However, to the extent that a benefit is payable to or with respect to him pursuant to the provisions of Sections 5.7 and 5.8, his benefits under the Plan will be adjusted appropriately.

	 	 	 	 
	 	(b)	 	Change From Ineligible to Eligible Status - If a person who had been an Ineligible Employee becomes an Eligible Employee because of a change in his employment status (including a transfer from the employ of a nonparticipating Related Company), the following special provisions will
apply:

	 	 	 	 	 
	 	 	(i)	 	His Hours of Service while an Ineligible Employee will be considered in determining his eligibility to become an Active Participant of the Plan pursuant to the provisions of Section 2.1.  He will become an Active

19

	 	 	 	 	 
	 	 	 	 	Participant as of the date he became an Eligible Employee provided he has then satisfied the requirements of Section 2.1.

	 	 	 	 	 
	 	 	(ii)	 	His Continuous Employment while an Ineligible Employee will be counted as Service to the extent that the requirements of Section 3.2 are satisfied but not as Credited Service.

	 	 	 	 	 
	 	 	(iii)	 	To the extent that a benefit is payable to or with respect to him pursuant to the provisions of Sections 5.7 and 5.8, his benefits under the Plan will be adjusted appropriately.

	 	 	 	 
	 	(c)	 	Transfer From One Employer to Another - If a Participant leaves the employ of one Employer to enter directly into the employ of another Employer, he will not be deemed to have terminated his participation, but will be considered an Eligible Employee of the succeeding Employer from the
date of such transfer during periods that he otherwise qualifies as an Eligible Employee.

Section 2.4 - Inclusion and Withdrawal of Participating Employers

Any Related Company which is authorized by the Board (or Committee as set forth below) to participate in the Plan may elect to participate (become an Employer) by action of its own board of directors or other
managing body.  In adopting the Plan, such Related Company may limit the application of the Plan to one or more of its groups of employees and/or divisions, locations or operations.  Special provisions or modifications relating to the Plan as adopted by such Related Company will be specifically
provided for in Schedule III hereof.

To preserve continuity of Plan participation, when an intra-company merger, consolidation or reorganization involves one or more Related Companies who were Employers at the time of such merger, consolidation, or
reorganization, the successor Employer will automatically be deemed to have adopted the Plan on behalf of its Eligible Employees who were covered hereunder immediately prior to such corporate restructure and the Committee will have the authority to amend Schedule III, as appropriate to reflect such
changes.

The Company, in its sole discretion, may determine that an Employer will no longer participate in the Plan and may direct that such Employer withdraw from the Plan.  Any Employer may similarly elect to discontinue its participation in the Plan at any time and may be required to discontinue its participation if it ceases to be a Related Company.  In either event, applicable provisions of Articles X or XI and Schedules I and III will apply in respect to such discontinuance of participation.

20

ARTICLE III

SERVICE AND CREDITED SERVICE

Section 3.1 - Continuous Employment (Vesting and Benefit Accrual)

Continuous Employment will mean a Participant’s total period of employment with one or more Employers or Related Companies from his Employment Commencement Date or most recent Reemployment Commencement Date, and
in the case of a Participant who is rehired after a Break in Service with pre-break Service restored, will include the aggregate of his pre-break and post-break periods of employment.  Continuous Employment will be measured in completed Plan Years, with one thousand (1,000) Hours of Service in a
Plan Year being deemed a completed Plan Year.

Continuous Employment will not be deemed terminated under the following circumstances:

	 	 	 	 	 
	 	 	(a)	 	Change to or from employment status as an Eligible Employee; or

	 	 	 	 	 
	 	 	(b)	 	Employment by another Employer or a Related Company provided employment terminates merely to become an employee of the other Employer or Related Company; or

	 	 	 	 	 
	 	 	(c)	 	During the first twelve (12) consecutive months of an Approved Absence.  If a Participant fails to return to the employ of the Employer or Related Company within the Approved Absence period prescribed by the Employer or at the end of twelve (12) months of Approved.  Absence if earlier, his
Continuous Employment will be deemed to terminate as of the last day of such prescribed period or twelve (12) months of Approved Absence, whichever is earlier.  A Participant’s Service and Credited Service will be determined in accordance with the foregoing; or

	 	 	 	 	 
	 	 	(d)	 	During qualified military service; or

	 	 	 	 	 
	 	 	(e)	 	In respect to termination of employment which occurs after January 1, 1985, if the Participant is reemployed by an Employer or Related Company prior to incurring a Break in Service; provided, however, that the period between the termination date and reemployment date will not be included in
Credited Service.

Section 3.2 - Service (Benefit Vesting)

Subject to any limitations specified in Schedule II, a Participant’s benefit vesting under the Plan will be determined by his period of Service.  Subject to the requirements of Section 3.4 relating to the
restoration of Service after a Break in Service, a Participant will be granted Service for Continuous Employment ending on the date of his termination of employment.  In no event will periods of employment with two or more Employers and/or Related Companies at the same time create more than one
period of Service.

21

Section 3.3 - Credited Service (Benefit Accrual)

Except as otherwise provided in Schedule IV, the amount of benefit payable to or on behalf of a Participant will be determined on the basis of his Credited Service.

Subject to the requirements of Section 3.4 relating to the restoration of Credited Service after a Break in Service, a Participant will be granted Credited Service for Continuous Employment ending on the date of his
termination of employment, excluding that portion of any period of Approved Absence in excess of twelve (12) consecutive months, as well as any Plan Years in which the Participant was not an Active Participant for at least one day.

If a Participant ceases to be an Active Participant and becomes a Suspended Participant, and he does not again become an Active Participant, he will receive no Credited Service during the period he is a Suspended
Participant, but he will continue to accrue Service.

Effective April 1, 1996, the Credited Service for a Participant who is a Highly Compensated Employee is frozen as of that date or, if later, the date the Participant becomes a Highly Compensated Employee.

Section 3.4 - Break in Service (Vesting and Benefit Accrual)

	 	 	 	 	 
	 	 	(a)	 	A Participant will incur a Break in Service if he does not receive credit for more than five hundred (500) Hours of Service during a Plan Year.
	 
	 	 	 	 	Solely for determining whether a Break in Service has occurred in a Plan Year, an individual who is absent from work for maternity or paternity reasons, will receive credit for the Hours of Service which would have otherwise been credited to such individual but for such absence.  For purposes
of this paragraph, an absence from work for maternity or paternity reasons means an absence (i) by reason of pregnancy of the individual, (ii) by reason of the birth of a child of the individual, (iii) by reason of the placement of a child with the individual in connection with the adoption of such
child by such individual, or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement.

	 
	 	 	 	 	The Hours of Service credited under this paragraph will be credited: (i) in the Plan Year in which the absence begins if the crediting is necessary to prevent a Break in Service in that period, or (ii) in all other cases, in the following Plan Year.

	 	 	 	 	 
	 	 	(b)	 	During the period after a termination of employment and prior to incurring a Break in Service, a Participant who was an Active Participant immediately before termination of employment will be considered a Suspended Participant.  If a Suspended Participant is rehired by an Employer or Related
Company prior to incurring a Break in Service, his employment will not be deemed to have been terminated for purposes of determining his Service.  However, the period between 

22

	 	 	 	 	his termination date and reemployment date will not be taken into account in determining his Credited Service.

	 	 	 	 	 
	 	 	(c)	 	A Participant’s Service and Credited Service will be canceled if he has a Break in Service before he has met the requirements for Retirement, Disability or for a Deferred Vested Pension as provided in the applicable sections of Article IV.  However, Participants who have met the
requirements for Retirement, Disability or a Deferred Vested Pension will at all times retain their Service and Credited Service.  If a terminated employee is reemployed by an Employer or Related Company after a Break in Service and his Service and Credited Service were canceled, such Service and
Credited Service will be restored if his number of consecutive years of Break in Service is less than the greater of five (5) or the aggregate number of years of pre-break Service.  Provided, however, that the rule stated in the immediately preceding sentence will not apply to a series of
consecutive Breaks in Service in progress on January 1, 1985, if the Participant’s consecutive years of Break in Service is greater than the aggregate number of years of pre-break Service and thus already caused said pre-break Service to be canceled.

	 	 	 	 	 
	 	 	(d)	 	If a Participant who received a cash distribution of vested benefits hereunder at a prior termination of employment is reemployed, his pre-break Service and Credited Service will be retained.  However, when such a Participant is entitled to receive a benefit under this Plan, such benefit will
be reduced by the Actuarial Equivalent of his prior distribution.

Section 3.5 - Reemployment of a Retired Participant

If an Employer or a Related Company re-employs a Retired Participant who commenced receiving Pension payments under the Plan, he will have a choice as to whether his monthly payment will be suspended or continued
during periods in which he is an Active Participant accruing Credited Service.  The Pension payable upon such Participant’s subsequent Retirement or termination of employment will be reduced by the Actuarial Equivalent of any Pension payments from the Plan, except Disability Pension payments,
which he received prior to his Retirement or termination of employment.  In no event, however, will this reduction result in a monthly payment less than he was receiving immediately prior to his reemployment.

Section 3.6 - Military Service

Absence from employment by an Employer or Related Company due to service in the armed forces of the United States will not constitute a Break in Service, and the period during such absence will be considered as
Service (and Credited Service if the individual was an Active Participant immediately prior to commencement of such Military Service or would have become an Active Participant during such period of Military Service), provided that the Participant is entitled by law to reemployment rights upon
release from service and returns to employment with an Employer or a Related Company within the period provided by such law.  For the purpose of determining benefits hereunder, Participants who accrue additional Credited Service during qualified Military Service will be deemed to have received
Compensation during such Military Service at the same

23

Compensation rate as in effect immediately prior to such absence or such Compensation rate as the Participant would have received had he been actively employed during the period of Military Service.  If such
Participant does not return to employment with the Employer or a Related Company within the period provided by law, he will be deemed to have terminated employment on the date he left the employment of the Employer or Related Company for service in the armed forces of the United States.
Contributions, benefits and Credited Service with respect to qualified Military Service will be provided in accordance with Code Section 414(u).

24

ARTICLE IV

REQUIREMENTS FOR RETIREMENT BENEFITS

Section 4.1 - Normal Retirement

The Normal Retirement Date of each Participant will be the first day of the month coincident with or next following the later of (i) attainment of his sixty-fifth (65th) birthday, or (ii) the fifth (5th) anniversary
of his participation in the Plan that follows the date the employee became a Participant in this Plan.  Payment of a Normal Retirement Pension will commence as of the Participant’s Normal Retirement Date unless he continues in the employment of an Employer.  A Participant who reaches age
sixty-five (65) while in the employ of the Employer will have a nonforfeitable right, upon actual Retirement, to his Normal Retirement Pension, except to the extent that such Pension is forfeitable because it has not been paid or distributed to him prior to his death.  Participants who do not
retire on their Normal Retirement Date will be subject to the provisions of Section 4.3.

Section 4.2 - Early Retirement

A Participant who has attained age fifty-five (55) and has at least five (5) years of Service will be eligible to elect an Early Retirement Date, provided that the sum of the Participant’s age and his years of
Service equals sixty-five (65) or more.  Said Early Retirement Date will be the first day of any month immediately following his termination of employment, provided that the Participant gives notice of such Early Retirement Date at least thirty (30) days in advance to his Employer.  A Participant
who retires early may elect the commencement of his Early Retirement Pension on the first day of any month coinciding with or subsequent to his Early Retirement Date but not later than his Normal Retirement Date, and his Pension will commence at the beginning of the month so requested, but will be
reduced as provided in Section 5.2.  For purposes of this paragraph, the normal form of Pension benefit will be determined in accordance with Article VII.

Section 4.3 - Late Retirement

A Participant may remain in the employ of the Employer after his Normal Retirement Date, in which case he will continue his participation in this Plan.  Benefit payments hereunder will be suspended while the
Participant remains an Eligible Employee of any Employer unless such Participant fails to complete forty (40) or more Hours of Service during any calendar month.  The Committee will notify the Participant of such suspension of benefits by personal delivery or first class mail during the first
calendar month in which payments are withheld.  The notice will contain a description of the specific reasons for suspension of benefits, a general description and copy of the relevant Plan provisions, a statement that the applicable Department of Labor regulations may be found in Section
2530.203-3 of the Code of Federal Regulations, and the Plan’s procedure for affording a review of the suspension of benefits.  Upon the Participant’s subsequent Retirement, he will be entitled to a Late Retirement Pension in an amount determined as provided in Section 5.3 commencing as of
his Late Retirement Date.  For purposes of this paragraph, the normal form of Pension benefit will be determined in accordance with Article VII.

25

Section 4.4 - Disability Pension

	 	 	 	 	 
	 	 	(a)	 	Disability for purposes of this Plan will mean a physical or mental condition incurred while employed by an Employer or a Related Employer which has continued six (6) consecutive months or more and which is expected to be permanent, as determined by the Social Security Administration.

	 	 	 	 	 
	 	 	(b)	 	Each Disabled Participant will be entitled to a monthly Disability Pension for life in a form provided for in Article VII and in an amount provided in Section 5.4.

	 	 	 	 	 
	 	 	(c)	 	If a Disabled Participant otherwise eligible to begin a Disability Pension under Section 5.4, commences to receive benefit payments under an insured long-term disability plan sponsored and maintained by an Employer or Related Company apart from this Plan, he will be constructively deemed to have elected to defer his Disability Pension for the period during which he is in receipt of benefits under such long-term disability plan prior to his Normal Retirement Date.  During any period the Participant receives such insured long-term disability plan benefits he will continue to be treated as if he were an Active Participant receiving Hours of Service and Compensation at the same rate that was in effect immediately prior to his disablement.  Upon attaining his Normal Retirement Date, such a Participant will be entitled to his Disability Pension reduced by the Actuarial Equivalent of such Pension payments, if any, that he received under the Plan prior to the commencement of benefit payments under such long-term

 disability plan.  For purposes of this paragraph, the normal form of Pension benefit will be determined in accordance with Article VII.

	 	 	 	 	 
	 	 	(d)	 	If a Disabled Participant’s disability will cease to exist, his rights to a current or future Disability Pension will cease: if he does not re-enter (or seek to re-enter with employment denied through no fault of his own) the Employer’s employ within ninety (90) days thereafter, he will be deemed to have terminated his employment as of the date his disablement was established and his benefits will be recomputed on the assumption he was simply a terminated Participant and had never been disabled, less the Actuarial Equivalent of Disability Pension payments, if any, he had already received as a Disabled Participant.  If any Participant being treated as an Active Participant under Section 4.4(c) seeks to re-enter the Employer’s employ within the ninety (90) day period, but employment is denied through no fault of his own, his status as an Active Participant will be treated as having ended on the date his disability ceased to exist.  If, however, he in fact re-enters the Employer’s employ

 within ninety (90) days of the date his disablement ceased, he will continue as an Active Participant of this Plan.

Section 4.5 - Deferred Vested Pension

A Participant whose employment terminates for any reason other than death or Retirement, will be eligible, pursuant to the terms in Section 5.5, to receive a Deferred Vested Pension in accordance

26

with Section 5.5, commencing at his Normal Retirement Date and payable in the form as provided in accordance with Article VII.

Section 4.6 - Retirement While on Leave of Absence

A Participant otherwise eligible to retire may elect to do so without returning to active employment with an Employer if he is absent from work pursuant to an Approved Absence.

27

ARTICLE V

AMOUNT OF RETIREMENT OR PENSION INCOME

Section 5.1 - Normal Retirement Pension

Subject to the provisions of Section 5.7, Section 7.2 and Schedules II and IV, a Participant who retires on his Normal Retirement Date will be entitled to a monthly Pension, payable in the normal form of payment described in Section 7.1, in an amount equal to:

For Participants who retire after December 31, 1988, but prior to January 1, 1993, the greater of (a) or (b) below:

	 	 	 	 
	
	(a)	(i)	one percent (1%) of a Participant’s Final Average Compensation, multiplied by the Participant’s Credited Service, not to exceed 35 years; plus,

	
	 	 	 
	
	 	(ii)	sixty-five one hundredths of one percent (0.65%) of the excess of a Participant’s Final Average Compensation over covered compensation, multiplied by the Participant’s Credited Service, not to exceed thirty-five (35) years.
	
	 	 	 
	
	 	Covered compensation is the average of the Social Security taxable wage bases for the thirty-five (35) year period ending with the year of the individual’s Social Security retirement age [as defined in Code Section 414(b)(8)].  Covered compensation will be determined on the date the Participant separates from service and the Social Security wage bases will be projected without change until the Participant’s Social Security retirement age.

	
	 	 	 
	
	(b)	twenty-five percent (25%) of Final Average Compensation at age sixty-five (65), but only if the Eligible Employee was actively employed by the Company on December 31, 1988, and has one hundred twenty (120) or more Months of Service at age sixty-five (65).
	
	 	 	 
	For Participants who retire after December 31, 1992, (c) below:

	
	 	 	 
	
	(c)	one percent (1%) of a Participant’s Final Average Compensation multiplied by the Participant’s Credited Service, not to exceed twenty-five (25) years.

However, in no event will any Eligible Employee who was a Participant in the Plan as of January 1, 1993, be entitled to an Accrued Retirement Pension that is less than the Accrued Retirement Pension the Participant was entitled to receive as of December 31, 1992, based upon the terms of the Plan as they existed on such date, as if the Participant had terminated employment with the Company on December 31, 1992.

The benefits computed in accordance with this Section, if not already a multiple of ten dollars ($10), will be rounded to the next highest multiple of ten dollars ($10).

28

In no event will a Participant’s Normal Retirement Pension be less than the Pension the Participant could have received had he elected an immediate Early Retirement Pension commencing as of the first day of any Plan Year following his eligibility for Early Retirement.

Notwithstanding the above, in no event shall any Eligible Employee who was an active Participant in the Plan as of December 31, 1995, and who is a Highly Compensated Employee be credited with Credited Service or Compensation for purposes of determining Final Average Compensation for any Compensation or Credited Service on and after April 1, 1996, or such date that he is determined to be a Highly Compensated Employee.  Such affected Participant’s Accrued Retirement Pension under the terms of this Plan shall be calculated as if the Participant terminated employment with the Employer as of March 31, 1996, or such later date that he is determined to be a Highly Compensated Employee.  Service for purposes of Section 3.2 of the Plan shall continue to be credited.

Section 5.2 - Early Retirement Pension

Subject to the provisions of Section 5.7, Section 7.2 and Schedules II and IV, a Participant who retires early will be entitled to a Pension, payable in the normal form described in Section 7.1, commencing on the date elected by the Participant pursuant to Section 4.2, in an amount which is equal (as of the date of income commencement) to that portion of his Accrued Retirement Pension derived from Section 5.1 reduced by one of the following Early Retirement factors:

	 	 	 	 	 
	 	 	(a)	 	The portion of the benefit derived under Section 5.1(a)(i), 5.1(b) or 5.1(c) will be reduced by 1/180th for each of the first 60 months by which his starting date of income precedes his Normal Retirement Date and 1/360th for each of the next 60 months thereafter.

	 	 	 	 	 
	 	 	(b)	 	The portion of the benefit derived under Section 5.1(a)(ii) will be reduced by multiplying by the appropriate factor from the following table:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Age
	 	Factor	 	 	Age	 	 	 	Factor	 
	65
	 	 	1.000	 	 	 	59	 	 	 	.654	 
	64
	 	 	.923	 	 	 	58	 	 	 	.615	 
	63
	 	 	.846	 	 	 	57	 	 	 	.577	 
	62
	 	 	.769	 	 	 	56	 	 	 	.529	 
	61
	 	 	.731	 	 	 	55	 	 	 	.486	 
	60
	 	 	.692	 	 	 	 	 	 	 	 	 

	 	 	 	 	For retirement ages which are not whole years, the values from the preceding table will be interpolated as appropriate.

29

Section 5.3 - Late Retirement Pension

Subject to the provisions of Section 5.7, Section 7.2 and Schedules II and IV, if a Participant does not retire at his Normal Retirement Date, he will be entitled to his Accrued Retirement Pension commencing as of his Late Retirement Date and in the normal form of payment described in Section 7.1.

Section 5.4 - Disability Pension

Subject to the provisions of Section 5.7, Section 7.2, and Schedules II and IV, a Participant who is eligible for a Disability Pension will be entitled to receive a monthly income, as provided in Section 4.4.  Said Disability Pension will commence on the first day of the month coincident with or next following the date of the Participant’s disablement and will be equal to the Actuarial Equivalent of the Disabled Participant’s Accrued Retirement Pension.  If recovery from disability occurs subsequent to attainment of the Participant’s Normal Retirement Date, the Disability Pension will continue to be payable for life.

In lieu of the above benefit, each Disabled Participant may elect a reduced monthly Pension, commencing on the first day of any month coinciding with or following his attainment of age fifty-five (55), provided such Participant has satisfied the requirements for Early Retirement as set forth in Section 4.2 as of the first day of the month his benefits are to commence.  Such reduced monthly Pension will be equal to the Disabled Participant’s Accrued Retirement Pension as of the first day of the month his benefits are to commence reduced by the factors in Section 5.2 for the period that this commencement date precedes his Normal Retirement Date.

Section 5.5 - Deferred Vested Pension

Subject to the provisions of Section 5.7, Section 7.2 and Schedules II and IV, a Participant who becomes eligible for a Deferred Vested Pension due to his termination of employment will be eligible to receive a Pension payable in the normal form described in Section 7.1, commencing at his Normal Retirement Date, if he is then living, equal to his Accrued Retirement Pension at termination as defined in Section 1.24(g).

A Participant who meets the requirements for Early Retirement as provided in Section 4.2 shall be entitled to a benefit which is not less than the Normal Retirement benefit upon attainment of the age requirements specified in Section 4.2 reduced in accordance with the provisions of Section 5.2.

A Participant who terminates employment before becoming vested in any portion of his Accrued Benefit will forfeit his entire Accrued Benefit and will be treated as having been paid his entire interest in the Plan.  However, if the person is reemployed and again becomes a Participant before incurring at least five (5) consecutive one (1) years Breaks in Service, the forfeited portion of his Accrued Benefit will be restored.  However, if the Participant received a distribution from the Plan when he initially terminated, this restoration will occur only if the Participant repays the amount distributed, plus interest at a rate determined under Code Section 411 (c)(2)(C), not later than the end of the fifth (5th) year beginning after he is reemployed or, if earlier, the end of the fifth (5th) year beginning after the distribution was made.

30

Effective January 1, 1989, a Participant with five (5) Years of Service is fully vested in his Accrued Benefit.  The Vesting Schedule for Plan Years prior to January 1, 1989, was as follows:

	 	 	 	 	 
	Years of Service

	 	Vested Percentage

	Less than 2 years
	 	 	0%	 
	2 years
	 	 	20%	 
	3 years
	 	 	40%	 
	4 years
	 	 	60%	 
	5 years
	 	 	80%	 
	6 years or more
	 	 	100%	 

Section 5.6 - No Duplication of Benefits

Benefits will not be payable to any Participant under more than one provision hereof for the same period of time.

Section 5.7 - Benefit Coordination With Other Plans

If a Participant (or his Beneficiary) receives or is entitled to receive a benefit under any Other Plan, excluding the Big Lots Savings Plan (f/k/a Consolidated Stores Corporation Savings Plan), his Normal Retirement Pension will be reduced by the Actuarial Equivalent of his Normal Retirement benefit from any Other Plan (prior to reduction for any optional pre-Retirement coverage for survivor benefits), but only to the extent that:

	 	 	 	 	 
	 	 	(a)	 	The benefits from the plans are attributable to the same earnings and/or the same period of employment; and

	 	 	 	 	 
	 	 	(b)	 	The benefit from the Other Plan is not attributable to the voluntary or mandatory contributions made by the Participant.

If a Participant is entitled to benefits from this Plan and one or more Other Plans for the same period of employment and if one or more of such plans contains a benefit coordination provision, then the benefits payable to the Participant will be determined as follows:

	 	 	 	 	 
	 	 	(c)	 	The Primary Plan will be the plan in which the Participant is an Active Participant immediately before his Retirement, death or other termination of employment with an Employer or a Related Company.  The benefits payable under the Primary Plan will be determined in accordance with its benefits coordination provision.

	 	 	 	 	 
	 	 	(d)	 	The Secondary Plan will be the plan and/or plans in which the Participant was an Active Participant before he became an active Participant in the Primary Plan.  The benefits payable under the Secondary Plan will be determined without regard to their benefit coordination provisions.

31

In all events, principles of benefit coordination will be applied on a basis equitable to the Participant considering his total covered earnings and service.

Section 5.8 - Benefit Commencement

	 	 	 	 	 
	 	 	(a)	 	Unless a Participant elects otherwise, benefit payments will commence no later than sixty (60) days after the latest of the close of the Plan Year in which (1) the Participant attains his Normal Retirement Age; (2) the fifth (5th) anniversary in which the Participant commenced participation in the Plan occurs; or (3) the Participant terminates employment with the Employer.  Such an election will be in the form of a written statement, signed by the Participant, describing the benefit and the date on which the payments of such benefit will commence and be subject to the requirements of Article VII.  However, distributions to five percent (5%) owners [as defined in Code Section 416(i)] and to Participants who attain age seventy and one-half (70 1/2) after January 1, 1988, must commence no later than the April 1st following the calendar year in which such Participant attains age seventy and one-half (70 1/2).  Distributions to non five percent (5%) owners who attained age seventy and one-half (70 1/2) i

n 1988 will commence no later than April 1, 1990.  Distribution of benefits to non five percent (5%) owners who attained age seventy and one-half (70 1/2) prior to January 1, 1988, and who were not five percent (5%) owners for any Plan Year beginning with the Plan Year in which they attained age sixty-six and one-half (66 1/2), will commence no later than the April 1st following the calendar year in which the later of termination of employment or attainment of age seventy and one-half (70 1/2) occurs.  In the event a Participant remains employed by the Employer after the April 1, of the calendar year following the calendar year in which he attained age seventy and one-half (70 1/2), the Participant’s Pension shall be actuarially adjusted for the period after age seventy and one-half (70 1/2) in which the Participant was not receiving a Pension under this Plan to the Participant’s commencement of payment of his Pension, in accordance with the regulations issued pursuant to Code section 401

(a)(9).  In the event that a Participant has his Pension suspended in accordance with the regulations issued pursuant to Code section 411(a)(3)(B), his Pension shall be actuarially increased in accordance with the regulations issued pursuant to Code section 401(a)(9).

	 	 	 	 	Effective January 1, 2002, for
Participants who were not five percent (5%) owners for any Plan Year
beginning with the Plan Year in which they attained age sixty-six and
one-half (66 1/2), notwithstanding any other provisions of the Plan
to the contrary, the Plan must begin to distribute a
Participant’s entire interest in the Plan no later than his
‘Required Beginning Date’.  A Participant’s Required
Beginning Date is April 1 of the calendar year following the calendar
year in which the Participant attains age seventy and one-half (70
1/2) or actually retires, whichever is later.

	 
	 	 	 	 	Effective January 1, 2002, a Participant who was not a five
percent (5%) owner, and who remains employed following the attainment
of age seventy and one-half (70

32

	 	 	 	 	1/2) will be given the option to begin payment of his benefit as of April 1 of the Plan Year following the Plan Year he attains age seventy and one-half (70 1/2) or to delay commencement until actual Retirement from employment with the Employer.  The Participant will be given this option as soon as administratively feasible after the Participant attains age seventy and one-half (70 1/2) and the Participant must notify the Administrator of his decision to commence benefit payments or to delay commencement by March 1 of the following calendar year.  This election is irrevocable when made.  If no election is received by March 1, the Participant will be deemed to have elected to defer his benefit payment until his actual Retirement.

	 	 	 	 	 
	 	 	(b)	 	In the event that an appropriate application for commencement of the payment of a Pension or other benefit hereunder is not received by the Committee within five (5) years after the date the benefit would normally commence, such benefit will be forfeited as of the end of the Plan Year in which such fifth anniversary occurs.  If, following such a forfeiture, the Participant, his Eligible Spouse, his Contingent Annuitant, or his Beneficiary makes appropriate application for a benefit which the Committee determines such person would have been entitled to upon prior timely application, the Committee will authorize the benefit to be reinstated and payment to commence as of the first day of the month coincident with or next following such determination.

Section 5.9 - Top-Heavy

Notwithstanding any other provision of this Plan, during any Plan Year in which the Plan becomes Top-Heavy as defined in Schedule IV, the provisions of Schedule IV will become operative.

33

ARTICLE VI

DEATH BENEFITS

Section 6.1 - Death Benefit

The death benefit payable to the Spouse of a deceased eligible Participant will be either (a) or (b) below as hereinafter provided.

	 	 	 	 	 
	 	 	(a)	 	A monthly life annuity which is the survivorship portion of the Qualified Joint and Survivor’s Pension, assuming, however, that the Participant had separated from Service on his date of death, survived to the earliest retirement age and died on the day after the earliest retirement age.  The Qualified Joint and Survivor Pension is the Actuarial Equivalent of the deceased Participant’s Accrued Retirement Pension reduced as provided for in Section 5.2 for each month that the Participant’s date of death or earliest retirement age, if later, precedes his Normal Retirement Date, or

	 	 	 	 	 
	 	 	(b)	 	A lump sum amount equal to the Actuarial Equivalent of the survivorship portion of the Qualified Joint and Survivor’s Pension of the deceased Participant’s Accrued Retirement Pension reduced as provided for in Section 5.2, and computed on the assumption that the Participant had separated from Service on his date of death, survived to the earliest retirement age and died on the day after the earliest retirement age.

Notwithstanding the above, the monthly life annuity provided as pre-retirement spousal annuity will not be less than the corresponding “qualified pre-retirement survivor annuity” as described in Code
Section 417.

For purposes of this Article VI, “earliest retirement age” will be the earliest date on which, under the Plan, the Participant could elect to receive Retirement benefits.

Section 6.2 - Eligible Participants and Determination of Applicable Death Benefits

Any deceased Active, Disabled or Retired Participant who on the date of his death:

	 	 	 	 	 
	 	 	(a)	 	was credited with an Hour of Service on or after August 23, 1984,

	 	 	 	 	 
	 	 	(b)	 	had a vested benefit under this Plan,

	 	 	 	 	 
	 	 	(c)	 	was not receiving Retirement benefit payments, and

	 	 	 	 	 
	 	 	(d)	 	had an Eligible Spouse immediately preceding the date of his death,

will have a pre-retirement spousal annuity payable to said Spouse.  There are no death benefits payable to unmarried participants.

34

The Spouse has the option to elect payment of the Death Benefits in the form of a life annuity or the lump sum equivalent of the applicable death benefit.  The lump sum or annuity will be as provided in Section 6.1(a) or (b) and calculated as payable commencing on the first day of the month coincident with or next following the date the Participant would have reached the earliest retirement age under this Plan, or if later, his date of death.

The lump sum or annuity as calculated in the preceding sentence may be payable immediately (reduced for early commencement) or deferred to a later date at the spouse’s election.

35

ARTICLE VII

FORM OF PENSION PAYMENT AND OPTIONAL BENEFITS

Section 7.1 - Normal Form of Pension Payment

The normal form of Pension payment will be monthly payments for the life of the Participant, with no further payments made after his death.  Subject to the provisions of Section 5.9, the first payment will be made on the first day of the calendar month coinciding with or next following the Participant’s Retirement date, except that with respect to a Participant entitled to a Disability Pension or a Deferred Vested Pension and a Participant entitled to an Early Retirement Pension who has elected to defer payment, the date of such first payment will be the Participant’s Normal Retirement Date or such earlier date elected by the Participant pursuant to Sections 5.4, 4.2 or 4.4, as applicable.  The last payment will be made on the first day of the calendar month during which the Participant’s death occurs.

Pensions will be paid in the normal form for Participants if on the date Pension payments commence (i) they do not have an Eligible Spouse, or (ii) they have completed a Qualified Election and have not made an election of any optional form of Pension pursuant to Section 7.3.

Section 7.2 - Qualified Joint and Survivor Pension

If on the date a Participant’s Pension payment commences (including Disability Pensions) he has an Eligible Spouse to whom he is married as of such benefit commencement date, such Pension will be paid in the form of an immediate Qualified Joint and Survivor Pension which is Actuarially Equivalent to the normal form of payment.  Under the Qualified Joint and Survivor Pension, a reduced amount will be paid to the Participant for his lifetime, and the Eligible Spouse, if surviving at the Participant’s death, will be entitled to receive thereafter a lifetime Pension in a monthly amount equal to fifty percent (50%) of the reduced monthly Pension which had been payable to the Participant.  The last payment of the Qualified Joint and Survivor Pension will be made as of the first (1st) day of the month in which the death of the later to survive of the Participant and his Eligible Spouse occurs.  So long as a Qualified
Election is signed within the ninety (90) day period ending on the date benefits would commence, a Participant may elect in writing, any time prior to the commencement of his Pension payments, to receive the normal form of payment; or a Participant entitled to receive a Normal, Late or Early Retirement, Disability Pension or Deferred Vested Pension may elect an optional form of payment under Section 7.3.  Any such election for an optional form of payment will be revocable (pursuant to Section 7.4), at the Participant’s option, at any time prior to the date the Participant’s Pension payments commence.

	 	 	 	 	 
	 	 	(a)	 	Notice of Qualified Election

In the case of a Qualified Joint and Survivor Pension as described above, the Plan Administrator will provide each Participant within thirty (30) to ninety (90) days prior to the commencement of benefits, a written explanation of:  (i) the terms and conditions of a Qualified Joint and Survivor

                      

36

	 	 	 	 	Pension; (ii) the Participant’s right to make and the effect of an election to waive their Qualified Joint and Survivor Pension form of benefit; (iii) the rights of a Participant’s Eligible Spouse; and (iv) the right to make, and the effect of, a revocation of a previous election to waive the Qualified Joint and Survivor Pension.
	 
	 	 	 	 	A Participant may elect, with applicable spousal consent, to waive any requirements that the written explanation be provided at least thirty (30) days before the annuity starting date if the distribution commences more than seven (7) days after such explanation is provided.

	 	 	 	 	 
	 	 	(b)	 	Qualified Election

Any Participant who desires to waive the Qualified Joint and Survivor Pension must do so in writing within the ninety- (90) day period ending on the date benefits would commence and such waiver must be consented to by the Participant’s Eligible Spouse.  The Eligible Spouse’s consent in writing to a waiver in which the Eligible Spouse acknowledges the effect of the election, the waiver must be witnessed by a Plan representative or notary public and must be limited to a specific optional form of benefit or for a specific alternate Beneficiary in accordance with Section 9.17.  Notwithstanding this consent requirement, if the Participant establishes to the satisfaction of a Plan representative that such written consent may not be obtained because there is no Eligible Spouse or such Spouse cannot be located, a waiver will be deemed an election qualified under this paragraph.  Any consent necessary under this provision will be valid only with respect to the Spouse who

 signs the consent, or in the event of an election deemed qualified under this paragraph, the designated Eligible Spouse.  Additionally, a revocation of a prior waiver may be made by a Participant without the consent of the Eligible Spouse at any time before the commencement of benefits.  The number of revocations will not be limited.

Section 7.3 - Optional Forms of Pension

In lieu of the normal form of Pension payable to a Participant under Section 5.1 (Normal Retirement Pension), Section 5.2 (Early Retirement Pension), Section 5.3 (Late Retirement Pension), Section 5.4 (Disability Pension) or Section 5.5 (Deferred Vested Pension) of this Plan, a Participant may elect to receive benefits of Actuarial Equivalent value as described below.  Notwithstanding the above, any married Participant must have completed a Qualified Election within the ninety (90) day period ending on the date benefits would commence before any election of an optional form of Pension will have any effect.

The election of an optional form of Pension will be in writing on a form approved by the Committee and, if in accordance with the conditions set forth in Section 7.4 below, will become effective (i) in respect to a Participant who retires on his Normal or Early Retirement Date, on such Retirement date, (ii) in respect to a Participant who continues employment beyond his normal Retirement Date, on his Late Retirement Date, and (iii) in respect to an Inactive Participant, the date his Deferred Vested Pension commences, but in no event prior to the date the written election is filed with the Committee.

37

	 	 	 	 	 
	 	 	(a)	 	Lump Sum Distribution - One lump sum payment in cash of the entire Actuarial Equivalent of the Participant’s Accrued Retirement Pension.

	 	 	 	 	 
	 	 	(b)	 	Period-Certain - A reduced Pension payable over sixty (60), one hundred twenty (120) or one hundred eighty (180) months, as the Participant elects, in monthly, quarterly, semiannual or annual installments.  The period over which such payment is to be made will not extend beyond the Participant’s life expectancy (or the life expectancy of the Participant and his Designated Beneficiary).

	 	 	 	 	 
	 	 	(c)	 	Purchase of an Annuity Contract - The purchase of an annuity contract to provide Pension benefits to the Participant (and his Designated Beneficiary, if any) in any form equivalent in value to the Actuarial Equivalent of the Participant’s Accrued Retirement Pension.

Notwithstanding the above, certain small Pension payments may be distributed to Participants in accordance with the provisions of Section 9.14.

In lieu of the death benefit provided under Section 6.1(a), a Beneficiary may elect to receive his benefit in the form of a single lump sum.

Notwithstanding the above, distributions may only be made over one of the following periods (or a combination thereof):

	 	 	 	 	 
	 	 	(a)	 	the life of the Participant,

	 	 	 	 	 
	 	 	(b)	 	the life of the Participant and a Designated Beneficiary,

	 	 	 	 	 
	 	 	(c)	 	a period certain not extending beyond the life expectancy of the Participant, or

	 	 	 	 	 
	 	 	(d)	 	a period certain not extending beyond the joint and last survivor expectancy of the Participant and a Designated Beneficiary.

For purposes of this computation, a Participant’s life expectancy may be recalculated no more frequently than annually; however, the life expectancy of a non-spouse Beneficiary may not be recalculated.

Notwithstanding any provision hereof to the contrary, if the value of the Participant’s benefit under any of the above options will be less than an amount that will satisfy the minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2 of the Regulations, the optional benefit will be adjusted so that the value of the Participant’s benefit under the option will be equal to an amount that will satisfy the minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2 of the Regulations.

38

Section 7.4 - Conditions Regarding Optional Forms of Pension

Any optional form of Pension provided under this Plan as determined by the Committee other than through the options available under an insurance or annuity contract will be subject to the following conditions:

	 	 	 	 	 
	 	 	(a)	 	An election of an optional form of Pension or a change of Contingent Annuitant will become effective only if it is filed with the Committee in writing on a form approved by the Committee prior to the date the election is to become effective, provided that an election, any change or revocation of an election, or any change in the designation of a Contingent Annuitant may be made no earlier than 30 days from the date payment of the Participant’s Pension commences.  Any attempted election of an optional form of Pension or change of a Contingent Annuitant not meeting the conditions of the preceding sentence will be void for all purposes, unless the Committee determines otherwise in accordance with the provisions of Section 9.6.

	 	 	 	 	 
	 	 	(b)	 	To elect a Contingent Annuitant Option (or to change a Contingent Annuitant), a Participant will designate his Contingent Annuitant on a form provided for this purpose, and will furnish within thirty (30) days thereafter, but not later than the date on which he will retire, proof satisfactory to the Committee of the age of the Contingent Annuitant.

	 	 	 	 	 
	 	 	(c)	 	An election made pursuant to Section 7.3 will become inoperative if the death of the Participant or the Contingent Annuitant [under Section 7.3(b)] occurs before the election of the optional form of Pension becomes effective and death benefits will be paid according to Article VI.

	 	 	 	 	 
	 	 	(d)	 	If the Contingent Annuitant dies after the date payment of the Participant’s Pension commences but before the death of the Retired Participant, such Participant will continue to receive the same amount of Pension payable to him in accordance with such election.

	 	 	 	 	 
	 	 	(e)	 	If the Participant will become reemployed by an Employer after the election has become effective, his election will nevertheless continue to be effective, and if the Participant will die before retiring, his Contingent Annuitant (or Beneficiary) will receive the amount of Pension which would be payable to such Contingent Annuitant (or Beneficiary) in accordance with such election, as if such Participant had retired on the date of his death.

	 	 	 	 	 
	 	 	(f)	 	In any event, if benefit commencement has occurred prior to the Participant’s death, any remaining interest must be distributed at least as rapidly under any optional form elected as the method of distribution being used as of the date of the Participant’s death.

39

Any optional form of Pension paid through an insurance or annuity contract (individual or group) will be subject to the conditions contained in or otherwise applicable to such insurance or annuity contract.

Any recipient of an “eligible rollover distribution” may elect, at the time and in the manner announced by the Administrator, to have any portion of that distribution paid directly to any eligible retirement plan he designates.

	 	 	 	 	 
	 	 	(a)	 	Definitions

	 	 	 	 	 	 
	 	 	 	(i)	 	“eligible rollover distribution” means any distribution of all or any portion of the balance to the credit of the distributee, except (i) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee’s Designated Beneficiary, or for a specified period of ten years or more (ii) any portion of the distribution required to be made under Code Section 401(a)(9) or (iii) any portion of the distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to Employer securities).

	 	 	 	 	 	 
	 	 	 	(ii)	 	“eligible retirement plan” means 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), or a qualified trust described in Code Section 401(a), that will accept the distributee’s eligible rollover distribution.  However, if the eligible rollover distribution is being made to a surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity only.  Effective January 1, 2002, for purposes of the direct rollover provisions, an eligible retirement plan shall also mean an annuity contract described in Code Section 457(b) which 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 which agrees to separately account for amounts transferred into such plan from this Plan.
The 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 Relation Order, as defined in Code Section 414(p).

	 	 	 	 	 	 
	 	 	 	(iii)	 	“distributee” means an employee or former employee and, with respect to their interests only, 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 Code Section 414(p).

	 	 	 	 	 	 
	 	 	 	(iv)	 	“direct rollover” means a payment by the Plan to the eligible retirement plan specified by the distributee.

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ARTICLE VIII

PLAN FINANCING

Section 8.1 – Contributions

No contributions will be required or permitted from any Participant.  The Employers will make contributions in such amounts and at such times in accordance with (i) a funding method and policy to be established by the Company consistent with Plan objectives, and (ii) annual actuarial valuations of the Plan prepared by the Actuary.  It is the intention of each Employer to continue this Plan as it applies to its employees and make contributions regularly each year.  Forfeitures arising under this Plan because of severance of employment before a Participant becomes eligible for a Pension, or for any other reason, will to the extent permitted by law be applied to reduce the cost of the Plan, not to increase the benefits otherwise payable under the Plan.

Section 8.2 - Funding Policy and Method

The Company will establish a funding policy and method, and advise the Trustee thereof, so that the investment of the Trust Fund can be appropriately coordinated with the Plan’s financial needs (such as the requirements for liquidity and investment performance to meet expected benefit payments) both on a short-term and a long-term basis.

Section 8.3 - Trust Fund

	 	 	 	 	 
	 	 	(a)	 	All contributions made by the Employers under this Plan will be paid to the Trustee and deposited in the Trust Fund.  The Trustee will invest the assets of the Trust Fund, including any insurance or annuity contracts (individual or group) comprising a part thereof, in accordance with the Trust Agreement.  Except as otherwise provided herein, all assets of the Trust Fund allocable to this Plan, including investment income, will be retained for the exclusive benefit of Participants and their Beneficiaries, will be used to pay benefits to such persons or to pay administrative expenses to the extent not paid by the Employers, and will not revert to or inure to the benefit of any Employer.

	 	 	 	 	 
	 	 	(b)	 	Notwithstanding anything herein to the contrary, upon an Employer’s request, a contribution which was made by a mistake of fact, or which is determined to be nondeductible under Code Section 404, will be returned to the Employer within one (1) year after the payment of the contribution, or the disallowance of the deduction (to the extent disallowed), whichever is applicable.

Section 8.4 - Single Plan

Trust Fund assets allocable to contributions made under the Plan by one Employer will be available on an ongoing basis to satisfy the total Plan liabilities of all participating Employers; however, Trust Fund assets attributable to contributions to another employee benefit plan will first be

41

available on a termination basis to the extent required to satisfy liabilities, if any, under this Plan which arise from such other employee benefit plan.

42

ARTICLE IX

ADMINISTRATION

Section 9.1 - Allocation of Responsibility Among Fiduciaries for Plan and Trust Administration

The Fiduciaries will have only those powers, duties, responsibilities and obligations as are specifically, given them under this Plan or the Trust Agreement.  Any power, duty, responsibility or obligation for the control, management or administration of the Plan or Trust Fund which is not specifically allocated to any Fiduciary, or with respect to which the allocation is in doubt, will be deemed allocated to the Company.  In general, the Employers will have the sole responsibility for making the contributions, as specified in Article VIII and subject to the provisions of Article VIII, necessary to provide benefits under the Plan in respect to their employees.  The Company will have the sole authority to appoint and remove members of the Committee and to amend or terminate, in whole or in part, this Plan.  The Committee shall have the authority to appoint and remove an Investment Manager, a Trustee, and shall have the authority

 to amend or terminate the Trust Agreement.  The Committee will have the sole responsibility for the administration of this Plan, as specifically described in this Plan and the Trust Agreement.  The Trustee will have the sole responsibility for the administration of the Trust and the management of the Trust assets except in respect to insurance or annuity contracts or in respect to powers delegated to an Investment Manager.

The Company, by written instrument filed with the records of the Plan may designate fiduciary capacities and/or Fiduciaries other than those named herein.  A Fiduciary may serve in more than one fiduciary capacity in respect to the Plan.  A Fiduciary will have the authority to designate parties other than Fiduciaries to carry out all or a portion of his fiduciary responsibilities, through a written instrument.  A Fiduciary or party designated to carry out all or a portion of a Fiduciary’s responsibilities, as provided above, may employ one or more parties to render advice with regard to any responsibility he has under the Plan.

Section 9.2 – Indemnification

The Company will indemnify each member of the Committee and any other employee, officer or director of the Company or a Related Company against any claims, loss, damage, expense and liability (other than amounts paid in settlement not approved by the Company) reasonably incurred by him in connection with any action or failure to act to which he may be party by reason of his membership on the Committee or performance of an authorized duty or responsibility for or on behalf of the Company or a Related Company pursuant to the Plan or Trust unless the same is judicially determined to be the result of the individual’s gross negligence or willful misconduct.  Such indemnification by the Company will be made only to the extent (i) such expense or liability is not payable to or on behalf of such person under any liability insurance coverage, and (ii) the Trust is precluded from
assuming such expense or liability because of the operations of ERISA Section 410 or other applicable law.
The foregoing right to indemnification will be in addition to any other rights to which any such person may be entitled as a matter of law.

43

Section 9.3 - Appointment of Committee

The Plan will be administered by the Committee consisting of at least three (3) persons who will be appointed by the Company’s Board of Directors on the recommendation of the Company’s Chief Executive Officer.  A person who is selected as a member of the Committee also may serve in one or more other fiduciary capacities with respect to the Plan and may be a Participant.  The Board will have the right to remove any member of the Committee at any time, and a member may resign at any time upon notice to the Company.  The Chief Executive Officer, with the approval of the Board, may fill by appointment any vacancy in the membership of the Committee.  All usual and reasonable expenses of the Committee incurred by them in the administration of the Plan and Trust, including but not limited to fees and expenses of professional advisors referred to above, may be paid in whole or in part by the Employers,
and any expenses not paid by the Employers will be paid by the Trustee out of the principal or income of the Trust Fund.  Any members of the Committee must be full-time employees of the Company or Related Company and will not receive compensation with respect to their services for the Committee.

Section 9.4 - Records and Reports

The Committee will exercise such authority and responsibility as it deems appropriate in order to comply with the Code, ERISA and governmental regulations issued thereunder relating to records of Participants’ Service, accrued benefits and the percentage of such benefits which is nonforfeitable under the Plan; notifications to Participants; annual registration with the Internal Revenue Service; annual reports to the Department of Labor; and reports to the Pension Benefit Guaranty Corporation.  The Employers and the Committee will each keep or cause to be kept such employee and Participant data and other records, and will each reasonably give notice to the other of such information, as will be proper, necessary or desirable to effectuate the purpose of the Plan.  Neither the Employers nor the Committee will be required to duplicate any records kept by the other.

Section 9.5 - Other Committee Powers and Duties

The Committee will have such duties and powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following:

	 	 	 	 	 
	 	 	(a)	 	In its sole discretion, to construe and interpret the Plan, including the supplying of any omissions in accordance with the intent of the Plan, decide all questions of eligibility, determine the amount, manner and time of payment of any benefits hereunder, and to authorize the payment of
benefits;

	 	 	 	 	 
	 	 	(b)	 	To prescribe forms and procedures to be followed by the Participants and Beneficiaries filing applications for benefits;

	 	 	 	 	 
	 	 	(c)	 	To prepare and distribute, in such manner as the Committee determines to be appropriate, information explaining the Plan;

44

	 	 	 	 	 
	 	 	(d)	 	To receive from the Employers and from Participants such information as will be necessary for the proper administration of the Plan;

	 	 	 	 	 
	 	 	(e)	 	To furnish the Employers, upon request, such annual reports with respect to the administration of the Plan as are reasonable and appropriate;

	 	 	 	 	 
	 	 	(f)	 	To receive, review and keep on file (as it may deem convenient or proper) reports of the financial condition, and of the receipts and disbursements, of the Trust Fund from the Trustee;

	 	 	 	 	 
	 	 	(g)	 	To appoint, employ or designate individuals to assist in the administration of the Plan and any other agents it deems advisable, including legal and actuarial counsel; and

	 	 	 	 	 
	 	 	(h)	 	To exercise such other powers and duties as the Board may delegate to it.

The Committee may retain auditors, accountants, physicians, actuaries, legal counsel and other professional advisors selected by it.  Any Committee member or other Fiduciary may himself act in any such capacity, and
any such auditors, accountants, physicians, actuaries, legal counsel, or other professional advisors may be persons acting in a similar capacity for any Employer and/or any nonparticipating Related Company and may be employees of any Employer and/or any nonparticipating Related Company.  The
opinion of or information and data contained in any certificate or report or other material prepared by any such auditor, physician, Actuary, accountant, legal counsel, or other professional advisor will be full and complete authority and protection in respect of any action taken, suffered or
omitted by the Committee or other Fiduciary in good faith and in accordance with such opinion or information and no member of the Committee or other Fiduciary will be deemed imprudent by reason of any such action.

The Committee will cause the Actuary to prepare actuarial valuations of the Plan for each full Plan Year.  In making the annual actuarial valuation of the Plan, the Actuary may rely upon the written statements of the
Trustee, Investment Manager and/or insurance company which holds or manages Trust Fund assets concerning the value of such assets in the Trust Fund and will not be required to make any independent investigation with respect thereto.  The Actuary may also rely upon any information furnished him by
the Employers, the Committee, an accountant or auditor.

Section 9.6 - Rules and Decisions

The Committee may adopt such rules as it deems necessary, desirable or appropriate for the proper and efficient administration of the Plan and as are consistent with the provisions of the Plan.  Rules and decisions
of the Committee will not discriminate in favor of officers, directors or highly paid or compensated employees of the Company and all Related Companies which are members of the same controlled group of corporations as the Company when viewed as a single entity.  When making a determination or
calculation, the Committee will be entitled to rely upon information furnished by a Participant or Beneficiary, an Employer, the legal counsel of an Employer, an Actuary, or the Trustee.  The determination of the Committee as to any disputed question arising hereunder including, but without
limitation thereto, questions of construction, administration and

45

interpretation, will be final and conclusive upon all persons including, but not by way of limitation, Eligible Employees, Participants, Beneficiaries, and their heirs, distributees and personal representatives, and
any other person claiming an interest under the Plan and will not be deemed imprudent.

Section 9.7 - Committee Procedures

The Committee may act at a meeting or in writing without a meeting.  All decisions of the Committee will be made by the vote of the majority including actions in writing taken without a meeting.  The Committee may
adopt such operating procedures and regulations as it deems desirable for the conduct of its affairs and may authorize a member, or each member, of the Committee to act on its behalf in certain administrative matters deemed by them to be routine in nature, including the execution of documents.  No
Committee member who is a Participant will have any vote in any decision of the Committee made uniquely with respect to such Committee member or his benefits hereunder.

Section 9.8 - Authorization of Benefit Payments

The Committee will issue directions to the Trustee and/or the applicable insurance company, if any, concerning all benefits which are to be paid from the Trust Fund pursuant to the provisions of the Plan, and certify
that all such directions are in accordance with this Plan.

Section 9.9 - Application and Forms for Pension

The Committee will require a Participant to complete and file with the Committee an application for Pension and all other forms approved by the Committee, and to furnish all pertinent information requested by the
Committee and the Committee will not be deemed imprudent by reason of failure to recognize or act in regard to other types of communications received.  The Committee may rely upon all such information so furnished it, including the Participant’s current mailing address.  To the extent that the
Company or the Committee will prescribe forms for use by the Participants, former Participants and their respective Beneficiaries in communicating with the Employers or the Committee, as the case may be, and will establish periods during which communications may be received, they and the Employers
will respectively be protected in disregarding any notice or communication for which a form will so have been prescribed and which will not be made on such form and any notice or communication for the receipt of which a period will so have been established and which will not be received during such
period, or in accepting any notice or communication which will not be made on the proper form and/or received during the proper period.  Each Employer and the Committee will respectively also be protected in acting upon any notice or other communication purporting to be signed by any person and
reasonably believed to be genuine and accurate, and will not be deemed imprudent by reason of so doing.

Section 9.10 - Facility of Payment

Whenever, in the Committee’s opinion, a person entitled to receive any payment of a benefit, or installment thereof, hereunder is under a legal disability or is incapacitated in any way so as to be

46

unable to manage his financial affairs, the Committee may direct the Trustee and/or the applicable insurance company, if any, to make payments to such person or to his legal representative.  Any payment of a benefit
or installment thereof in accordance with the provisions of this Section will be a complete discharge of any liability for the making of such payment under the provisions of the Plan.

If any Beneficiary of any Participant or former Participant will be a minor, the Committee and the Trustee will be fully protected in making any payment required to be made to such minor to any person who will be a
custodian for such minor under the provisions of the Uniform Gifts to Minors Act in effect in the state in which such minor will reside at the time of such payment.

Section 9.11 - Claims Procedure

The Committee will notify each Participant of his entitlement to receive benefits under this Plan and will provide appropriate forms on which application for such benefits may be made.

Each Participant or Beneficiary claiming a benefit under the Plan must complete and file such application forms with the Committee.  The Committee may designate a member or other designee to review all applications
for benefits.  That person will notify the claimant in writing of his decision within ninety (90) days of his receipt of the application.  If special circumstances require any extension of time (not to exceed ninety (90) days) for processing the claim, the claimant will be notified in writing of
the extension prior to the expiration of the initial ninety (90) day period.

The reviewing member of the Committee will make all determinations on behalf of the Committee as to the right of any person to a benefit.  Any denial by the reviewing Committee member of a claim for benefits by a
Participant or Beneficiary will be stated in writing and delivered or mailed to the Participant or Beneficiary.  The notice will be written to the best of the reviewing Committee member’s ability in a manner that may be understood without legal or actuarial counsel.  Such notice will set forth
specific reasons for the denial and, if applicable, a description of additional material or information necessary for the claimant to perfect his claim.  If the reviewing Committee member rejects the application solely because the claimant failed to furnish certain necessary material or
information, the notice will explain what additional material is needed and why, and advise the claimant that he may refile a proper application under the above claim procedure.

Section 9.12 - Appeal and Review Procedure

If a claim has been denied by the reviewing Committee member, the claimant may appeal the denial within thirty (30) days after his receipt of written notice thereof by submitting in writing to the Committee a request
for review of the denial of claim.  A claimant may also submit a written statement of issues and comments concerning his claim, and he may request an opportunity to review the Plan, the Trust Agreement and any other pertinent documents (which will be made available to him by the Committee within
thirty (30) days after its receipt of a copy of the request, at a convenient location during regular business hours).

47

If an appeal is made, the Committee will render its final decision with the specific reasons therefore in writing and transmit it to the claimant by certified mail within sixty (60) days of its receipt of the request
for review.

Section 9.13 – Evidence

Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information, which the person acting on it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

Section 9.14 - Limitation Regarding Small Payments

If any Pension or Other Plan benefit has a single sum value as determined by Section 1.1 not greater than three thousand five hundred dollars ($3,500), effective January 1, 2001, five thousand dollars ($5,000), or
effective on or after March 28, 2005, one thousand dollars ($1,000), the Committee will distribute that single sum-amount to a Deferred Vested Participant as soon as practicable upon his termination of employment.

Section 9.15 - Underwriting of Benefits

The Company in its sole discretion and from time to time may direct the Trustee to provide the benefits hereunder for one or more Participants or their Beneficiaries by purchase of insurance company annuity contracts
(individual or group) or otherwise.

Section 9.16 - Misstatement in Application for Benefits

If any person in his application to participate in the Plan or for benefits hereunder, or in response to any request of the Committee or an Employer for information, makes any statement which is erroneous or omits
any material fact or fails before receiving his first payment to correct any information he previously incorrectly furnished to the Employer or the Committee for its records, the amount of his retirement income will be adjusted on the basis of the true facts, and the amount of any overpayment made
to such person will be deducted from his next succeeding payments as the Committee will direct.

Section 9.17 - Beneficiary Designation

Unless a valid Qualified Election pursuant to Section 7.2 is in effect at the time his Pension Commences, a Participant’s surviving Eligible Spouse will be deemed a Designated Beneficiary for all purposes under
the Plan without the filing of a Beneficiary designation form with the Committee as hereinafter provided.  No other Beneficiary designation by the Participant, except to designate a contingent Beneficiary or Beneficiaries to receive benefits if the Participant dies unmarried, will be effective
without such a valid Qualified Election.

Each unmarried Participant or Participant and Spouse who have completed a Qualified Election pursuant to Section 7.2, having elected an optional form of Pension providing for death benefits, may from time to time
designate a person or persons (who may be designated contingently or

48

successively and who may be an entity other than a natural person) as a Beneficiary or Beneficiaries to whom Plan benefits are paid if the Participant dies before receipt of all such benefits.  Each Beneficiary
designation will be filed in the form prescribed by the Committee and will be effective only when filed with the Committee during the Participant’s lifetime.  Each Beneficiary designation filed with the Committee will cancel all Beneficiary designations previously filed with the Committee.
The revocation of a Beneficiary designation described in this paragraph, no matter how effected, will not require the consent of any Designated Beneficiary, except the Participant’s Spouse.  Any cancellation of such Beneficiary designation without filing another Beneficiary
designation will be interpreted as a revocation of a Qualified Election, such that a Participant’s spouse will once again be deemed
his Designated Beneficiary.

If any Participant is not survived by any Beneficiary or Beneficiaries as designated above, any death benefit payable hereunder upon the Participant’s death will be paid to the executor or administrator of the
Participant’s estate.

A surviving Beneficiary of a Participant may designate a Beneficiary to whom Plan benefits are to be paid if (i) the Beneficiary’s death occurs before receipt of all benefits otherwise payable, and (ii) without
survival of a successive Beneficiary appointed by the Participant, or such successive Beneficiary has also died.  Provided, however, if the surviving Beneficiary was the Participant’s Spouse, no successive Beneficiary designation by the Participant and his spouse will have any effect without a
prior Qualified Election.  If such a surviving Beneficiary dies before receiving the entire benefit otherwise payable and has not designated a Beneficiary to whom his Plan benefits are to be paid if death occurs before receipt of such benefits (and said Beneficiary is not survived by a successive
Beneficiary appointed by the Participant and his spouse, or the successive Beneficiary has also died), the remainder of such benefits will be paid to such Beneficiary’s spouse, if living, or otherwise to the executor or administrator of such Beneficiary’s estate.

49

ARTICLE X

AMENDMENT, RIGHT TO TERMINATE AND ACTION BY EMPLOYER

Section 10.1 - Right to Amend

The Company reserves the right at any time and from time to time by action of its Board to modify or amend in whole or in part any or all of the provisions of this Plan.  No amendment to the Plan (including a change
in the Actuarial Equivalency for determining optional or Early Retirement benefits) will be effective to the extent that it has the effect of decreasing a, Participant’s accrued benefit.  Notwithstanding the preceding sentence, a Participant’s accrued benefit may be reduced to the extent
permitted under Code Section 412(c)(8).  For purposes of this paragraph, a plan amendment which has the effect of (1) eliminating or reducing an Early Retirement benefit or a retirement-type subsidy, or (2) eliminating an optional form of benefit, with respect to benefits attributable to Service
before the amendment will be treated as reducing accrued benefits.  In the case of a retirement-type subsidy, the preceding sentence will apply only with respect to a Participant who satisfies (either before or after the amendment) the preamendment conditions for the subsidy.  In general, a
retirement-type subsidy is a subsidy that continues after Retirement, but does not include a qualified disability benefit, a medical benefit, a social security supplement, a death benefit (including life insurance), or a plant shutdown benefit (that does not continue after retirement age).
Furthermore, no amendment to the plan will have the effect of decreasing a Participant’s vested interest determined without regard to such amendment as of the later of the date such amendment is adopted, or becomes effective.

Provided, however, a retroactive reduction in benefits will be permissible if the Secretary of Labor determines that such retroactive reduction is required to avoid a substantial business hardship and that a variance
from the minimum funding standards under ERISA is unavailable or inadequate to relieve such hardship; provided, further, if any such modification or amendment resulting in a retroactive reduction in benefits is so approved, and the total value of such reduced benefits based upon the actuarial
assumptions then in effect will not be less than the value of the assets of the Trust Fund on the effective date of such modification or amendment.

Notwithstanding anything herein to the contrary, the Board in its sole discretion may make any modifications or amendments, additions or deletions in this Plan as to benefits or otherwise, retroactively if necessary,
and regardless of the effect on the rights of any particular Participants, which it deems appropriate in order to bring this Plan into conformity with or to satisfy any conditions of the Code or ERISA or any other law which may apply to this Plan and in order to maintain the qualification of this
Plan and the Trust Agreement under Code Section 401 (a) and to maintain the tax-exempt status of the Trust under Code Section 501(a).

Section 10.2 - Right to Discontinue Benefit Accrual

The Company and any applicable Employer reserves the right to provide that the benefits accrued for affected Participants be “frozen” as of a specified date and be distributed on an ongoing Plan basis in
accordance with the applicable provisions for Retirement, death or other termination of

50

employment.  In such event, any portion of the liabilities for such accrued benefits which are not yet funded will continue to be funded by the Employer(s) or former Employer(s) whose employees are affected or the
applicable portion of the Plan will be deemed terminated.

Section 10.3 - Right to Terminate

The Company reserves the right to terminate this Plan in whole or in part at any time.  In the event of a complete or partial termination of the Plan (within the meaning of Code Section 411 (d)(3) and regulations
issued thereunder), the provisions of Schedule I hereof will apply, as applicable.  If one or more participating Employers discontinue participation in the Plan under circumstances which do not constitute a complete or partial termination of the Plan, the Plan as it applies to Eligible Employees
and former Eligible Employees of such Employer or Employers will continue until such time as the Company terminates the Plan or until the applicable portion of the Trust Fund, to the extent available, will have been distributed in accordance with the Plan.  Upon termination or partial termination
of the Plan, the rights of all affected Participants to any benefits provided under the Plan which have accrued to the date of termination or partial termination will be nonforfeitable.

Section 10.4 - Action by Employer

Any action by an Employer under this Plan may be by resolution of its board of directors, or by any person or persons duly authorized by resolution of said board to take such action.

51

ARTICLE XI

SUCCESSOR EMPLOYER AND MERGER OR CONSOLIDATION OF PLANS

Section 11.1 - Successor Employer

In the event of the dissolution, merger, consolidation or reorganization of an Employer, provision may be made by which the Plan and Trust will be continued by the successor; and, in that event, such successor will
be substituted for such Employer under the Plan.  Unless otherwise provided, the substitution of the successor will constitute an assumption of the Plan liabilities by the successor and the successor will have all of the powers, duties and responsibilities of the Employer under the Plan.  The
applicable provisions of Section 2.4 will apply in respect to mergers, consolidations or reorganizations.

If any entity other than an Employer acquires an Employer or any plant, division, department or operation of an Employer as a going concern, then the Company, as determined by the Board, may, in lieu of the normal
operation of Section 4.5 or Schedule I hereof, cause any part of the Trust Fund which is allocable to Participants who thereupon become employed (directly or indirectly) by the acquirer and their Eligible Spouses, Contingent Annuitants and Beneficiaries, if any, to be segregated and deposited in a
separate fund, which fund will thereafter be held subject to a separate plan governed by the same provisions as this Plan, until amended.  Such allocation of Trust Fund assets will be determined by the Actuary in accordance with the manner and priority described for allocation in Schedule I.
Unless otherwise provided, such event will constitute the assumption by the acquirer (through such separate plan) of this Plan’s liabilities related to the acquirer’s employees, and the acquirer will assume all the powers, duties and responsibilities of the sponsoring Company under the
separate plan.  In such case, this Plan will not be deemed terminated or discontinued in whole or in part as it applies to any Employer.  Alternatively, the Company may discontinue this Plan as to such acquired Employer or unit and the provisions of Section 4.5 or Schedule I hereof, whichever is
applicable, will be applied.

Section 11.2 – Merger

Neither the merger of any Employer with any other organization nor the merger of this Plan with any other retirement plan will in and of itself result in the termination of this Plan or be deemed a termination of
employment with respect to any Eligible Employee.

However, this Plan may not be merged nor its assets transferred to any other retirement plan unless:

	 	 	 	 	 
	 	 	(a)	 	The benefit to which each Participant and Beneficiary would be entitled upon termination of the Plan immediately after such merger will be equal to or greater than the benefit to which he would be entitled if this Plan were to terminate immediately prior to such merger, except as otherwise
specified or allowed by applicable federal law or regulations; and

52

	 	 	 	 	 
	 	 	(b)	 	Resolutions of the board of directors of the Employer under this Plan, and any new or successor Employer employing Participants, will authorize such transfer of assets; and

	 	 	 	 	 
	 	 	(c)	 	Such other plan and trust are qualified under Code Sections 401(a) and 501(a).

53

ARTICLE XII

MISCELLANEOUS PROVISIONS

Section 12.1 - Nonguarantee of Employment

Nothing contained in this Plan or in the forms issued pursuant to this Plan will be construed as a contract of employment or reemployment between an Employer and any employee, or as a right of any employee to be
continued in the employment of an Employer or to be rehired by an Employer, or as a limitation of the right of an Employer to discharge any of its employees, with or without cause.

Section 12.2 - Rights to Trust Assets

No Eligible Employee will have any right to, or interest in, any assets of the Trust Fund upon termination of his employment or otherwise, except as provided from time to time under this Plan, and then only to the
extent of the benefits payable under the Plan to such Eligible Employee out of the assets of the Trust Fund.

None of the Trustees, any applicable insurance company (except as otherwise provided in any applicable insurance or annuity contract), the Committee, or any Employer in any way guarantees the Trust Fund from loss or
depreciation.  The Employers do not guarantee any payment to any person.

Except as otherwise provided by law, no benefit, payment or distribution under this Plan will be subject either to the claim of any creditor of a Participant, Eligible Spouse, Contingent Annuitant or Beneficiary, or
to attachment, garnishment, levy (other than a federal tax levy under Code Section 6331), execution or other legal or equitable process, by any creditor of such person, and no such person will have any right to alienate, commute, anticipate or assign (either at law or equity) all or any portion of
any benefit, payment or distribution under this Plan.  Notwithstanding the above, payment will be made pursuant to a Qualified Domestic Relations Order as defined in Code Section 414(p) and may be made in the form of an immediate lump sum if such form is elected by the alternate payee designated in
that Order.

The Trust Fund will not in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person entitled to benefits hereunder.

If any Participant’s benefits are garnished or attached by order of any court, the Committee may elect to bring an action for a declaratory judgment in a court of competent jurisdiction to determine the proper
recipient of the benefits to be paid by the Plan.  During the pendency of said action, any benefits that become payable may be paid into the court as they become payable, to be distributed by the court to the recipient it deems proper at the close of said action.

54

Section 12.3 - Disallowance of Contribution Deduction

In the event the Commissioner of the Internal Revenue or his delegate rules that a contribution deduction for all or a part of the Employer’s contribution to this plan is not allowed, the Employer will recover,
within one (1) year after the disallowance of such contribution deduction, that portion of the Employer’s contribution for which no deduction was permitted to be taken or allowed.

Section 12.4 - Mistake of Fact

A contribution made by the Employer as a result of a mistake of fact shall be returned to the Employer by the Trustee within one (1) year after the payment of the contribution.

55

ARTICLE XIII

GENERAL PROVISIONS

Section 13.1 – Construction

In the construction of the Plan, the masculine will include the feminine and the singular the plural in all cases where such meanings would be appropriate.

Section 13.2 - Controlling Law

The law of the State of Ohio will be the controlling state law in all matters relating to the Plan and will apply to the extent that it is not preempted by the laws of the United States of America.

Section 13.3 - Effect of Invalidity of Provision

If any provision of this Plan is held invalid or unenforceable, such invalidity or unenforceability will not affect any other provisions hereof, and this Plan will be construed and enforced as if such provision had
not been included.

Section 13.4 - Execution - Number of Copies

This Plan may be executed in any number of counterparts, each of which will be deemed an original, and the counterparts will constitute one and the same instrument, which will be sufficiently evidenced by any one
thereof.

          IN WITNESS WHEREOF, the Company has caused the Plan to be signed effective as of January 1, 2005.

	 	 	 
	
	 	BIG LOTS, INC.
	
	 	 
	
	 	By: /s/ Brad A. Waite

	
	 	 
	
	 	Print Name: Brad A. Waite
	
	 	 
	/s/ Joe Heuer

	 	Title: EVP
	Attest:
	 	 
	
	 	 
	Print Name: Joe Heuer
	 	 
	
	 	 
	Title: Staff Counsel
	 	 

56

SCHEDULE I

TERMINATION OF PLAN

Section 1 - Effect on Participants

In the event of a complete or partial termination of the Plan, the rights of all applicable affected Participants, Eligible Spouses, Contingent Annuitants and Beneficiaries to benefits accrued to the date of such
termination will be nonforfeitable (except to the extent that applicable law may preclude such vesting in order to prevent discrimination) and will be provided from the Plan assets to the extent funded in accordance with the provisions of this Schedule I.

Section 2 - Allocation of Assets

In the event of a complete or partial termination of the Plan, the Plan Administrator will cause the assets of the Plan which are available to provide benefits (after payment of any expenses properly chargeable to
the Trust) to be allocated among affected Participants, Eligible Spouses, Contingent Annuitants and Beneficiaries.  Such shares will be determined actuarially and distributed in accordance with the benefit priorities set forth in ERISA Section 4044 and regulations issued thereunder.

Section 3 - Distribution of Assets

Any distribution of benefits following a complete or partial termination of the Plan may be made in whole or in part in cash, in securities or other assets in kind (based on their fair market value as of the date of
distribution), or in the form of installment or retirement income payments from the Trust, or in nontransferable annuity contracts, as the Committee in its discretion will determine.

Section 4 - Residual Amounts

In no event will the Company or any Employer receive any amount from the Trust Fund upon complete or partial termination of the Plan except that, and notwithstanding any other provision of the Plan, the Company (and
participating Employers, as applicable) will receive such amounts, if any, as may remain after satisfaction of all Plan liabilities arising from variations between actual requirements and expected actuarial requirements.

57

SCHEDULE II

LIMITATION ON BENEFITS

Section 1 - Basic Limitation

	 	 	 	 	 
	 	 	(a)	 	In General - Except as otherwise provided in paragraph (c) below, the total annual amount of a Participant’s Pension computed under Article V or, where applicable, Article VII of this Plan [and under any and all Other Plans of the Company or any Related Company which are considered
“defined benefit plans” under ERISA Section 3(35) will not exceed the smaller of the following two amounts:

	 	 	 	 	 	 
	 	 	 	(i)	 	ninety thousand dollars ($90,000) subject to the adjustments described in Section 2(a) or (b) below, or

	 	 	 	 	 	 
	 	 	 	(ii)	 	An amount equal to one hundred percent (100%) of his annual average earnings during the three (3) consecutive years of participation that produce the highest average, subject to the adjustments described in Sections 2(c) and 2(d) below.
	 
	 	 	 	Effective January 1, 1997, average annual earnings will not be in excess of the amount permitted under Code Section 401(a)(17), as indexed, for purposes of applying these limits.

	 	 	 	 	 
	 	 	(b)	 	If Pension Option Is In Effect - If the Pension is payable to the Participant in a form other than that of either a straight life annuity or the Qualified Joint and Survivor Pension, the amount of such Pension will be adjusted to the Actuarial Equivalent Pension on a straight life
annuity beginning at the same age which is the Actuarial Equivalent of such benefit, for purposes of applying the above limitation.  Prior to the first day of the first limitation year beginning in 1995, the Plan shall use an interest rate of (a) the rate used in Section 1.l for determining
Actuarial Equivalent or (b) five percent (5%), whichever is greater, in accordance with rules determined by the Commissioner of Internal Revenue.  For limitation years beginning on or after January 1, 1995, the Actuarially Equivalent straight life annuity for purposes of applying the limitations
under Code Section 415(b) to benefits that are not subject to Code Section 417(e)(3) is equal to the greater of the equivalent annual benefit computed using the interest rate and mortality table, or tabular factor, specified in the Plan for actuarial equivalence for the particular form of benefit
payable, and the equivalent annual benefit computed using a five percent (5%) interest rate assumption and the applicable mortality table.  For Plan benefits subject to Code Section 417(e)(3), the equivalent straight life annuity is equal to the greater of the equivalent annual benefit computed
using the interest rate and mortality table specified in the Plan for the particular form of benefit payable and the equivalent annual benefit computed using the applicable interest rate and the applicable mortality table.  The applicable interest rate used for determining actuarial 

 

58

	 	 	 	 	 
	 	 	 	 	equivalencies is the annual interest rate on 30-year Treasury securities as specified by the Commissioner.  The applicable mortality table is the mortality table described in Revenue Ruling 2001-62.
For the purposes of the adjustment described in this Section, the following values will not be
taken into account:

	 	 	 	 	 	 
	 	 	 	(i)	 	the value of a qualified joint and survivor annuity as defined in Code Section 401(a)(11)(G)(iii) to the extent that such value exceeds the sum of the value of a straight life annuity beginning on the same date, and the value of any post-retirement death benefits that would be payable absent
the qualified joint and survivor annuity;

	 	 	 	 	 	 
	 	 	 	(ii)	 	the value of benefits not directly related to retirement benefits, such as pre-retirement death benefits; and

	 	 	 	 	 	 
	 	 	 	(iii)	 	the value of benefits which reflect post-retirement cost-of-living increases.

	 	 	 	 	 
	 	 	(c)	 	Exemption For Ten Thousand Dollar ($10,000) Pension - A Participant’s Pension will not be subject to the limitations described in this Schedule II if:

	 	 	 	 	 	 
	 	 	 	(iii)	 	The annual amount of his Pension computed under Article V or, where applicable, Article VII of this Plan, and under all Other Plans of the Company or any Related Company which are considered “defined benefit plans” under ERISA Section 3(35), does not exceed ten thousand dollars
($10,000) (subject to the adjustment described in Section 2(c) below), and

	 	 	 	 	 	 
	 	 	 	(iv)	 	At no time did he participate in a plan maintained by the Company or any Related Company, which is, considered a “defined contribution plan” under ERISA Section 3(34).

Section 2 - Adjustments to Basic Limitation

	 	 	 	 	 
	 	 	(a)	 	Adjustment If Pension Begins Before a Participant’s Social Security Retirement Age - If any Pension commences under this Plan at or after Attained Age sixty-two (62), but prior to the Participant’s Social Security Retirement Age (SSRA), then a Pension may not exceed an annual
benefit of ninety thousand dollars ($90,000) reduced by (i) in the case of a Participant whose SSRA is sixty-five (65), five-ninths (5/9) of one percent (1%) for each month by which a Pension commences before the month in which the Participant attains age sixty-five (65) or (ii) in the case of a
Participant whose SSRA is greater than sixty-five (65), five-ninths (5/9) of one percent (1%) for each of the first thirty-six (36) months and five-twelfths (5/12) of one percent (1%) for each of the additional months (up to twenty-four (24)) by which a Pension commences before the month in which
the Participant attains SSRA.

	 	 	 		If any Pension begins before age sixty-two (62), the Pension is limited to the actuarial equivalence of the Participant’s limitation for Pension commencing at age

	 

59

	 	 	 	 	 sixty-two (62), with the reduced dollar limitation for such Pension further reduced for each month by which Pension commences before the month in which the Participant attains age sixty-two (62).  For Plan Years beginning on or after January 1, 1995, if any Participant commences receipt of his
Pension before his is age sixty-two (62), the Pension may not exceed the lesser of the equivalent amount computed using the interest rate and mortality table (or tabular factor) used in the Plan for Actuarial Equivalence for Early Retirement benefits, and the amount computed using five percent (5%)
interest and the applicable mortality table (to the extent that the mortality decrement is used prior to age sixty-two (62), regardless of whether the Pension is or is not subject to Code section 417(e)(3).  

Adjustment if Pension Begins After a Participant’s Social Security Retirement Age - If a Pension commences after a Participant’s Social Security Retirement Age the ninety thousand dollars ($90,000) limitation will be increased to the Actuarial Equivalent of a ninety thousand
dollars ($90,000) benefit beginning at the Participant’s Social Security Retirement Age, multiplied by the “adjustment factor” prescribed by the Secretary, using the interest rate assumption used to determine actuarial equivalence for this purpose must be the lesser of the equivalent
amount computed using the interest rate and mortality table (or tabular factor) used in the Plan for actuarial equivalence for Late Retirement benefits, and the amount computed using five percent (5%) and the applicable mortality table, regardless of whether the benefit is nor is not subject to
Code Section 417(e)(3).  However, the Pension payable must not exceed one hundred percent (100%) of the Participant’s annual average earnings during the three (3) consecutive years of participation that produces the highest average.

	 	 	 	 	 
	 	 	(b)	 	Reduction for Participation and Service Less Than Ten Years - Notwithstanding the basic limits of Section 1, a Participant’s benefit will be adjusted by the following:

	 	 	 	 	 	 
	 	 	 	(i)	 	If a Participant has completed less than ten years of participation, the amount of the basic limitation described in Section 1(a)(i) will be adjusted by multiplying such amount by a fraction, the numerator of which is the Participant’s number of years (or part thereof) of participation and
the denominator of which is ten (10).

	 	 	 	 	 	 
	 	 	 	(ii)	 	If a Participant has completed less than ten (10) years of Credited Service, the amount of the basic limitation described in Section 1(a)(ii), and the ten thousand dollars ($10,000) exemption described in Section 1(c) above, will be adjusted by multiplying such amount by a fraction, the
numerator of which is his Credited Service and the denominator of which is ten (10).  For the purposes of this subsection, any Service rendered after the Participant’s Normal Retirement Date will be counted as Credited Service.

	 	 	 	To the extent prescribed by the Secretary, the limitations of this subsection will be applied separately to each change in the benefit structure of the Plan.

60

	 	 	 	 	 
	 	 	(c)	 	Cost-of-Living Adjustment - The amounts used under subparagraphs (i) and (ii) of Section 1(a) in determining the basic limitation are subject to annual adjustment with respect to any Plan Year beginning after January 1, 1988, effective January 1 of the year for which the adjustment is
made, by the Secretary of the Treasury or his delegate in accordance with regulations issued under Code Section 415(d), to reflect increases in the cost of living.  The dollar limitation determined by the Secretary of the Treasury for a given calendar year will be the maximum permissible dollar
amount for the Plan Year commencing during such calendar year.

	 	 	 	 	 
	 	 	(d)	 	Protection of Current Accrued Retirement Pensions - If the current Accrued Retirement Pension of a Participant as of January 1, 1987, exceeds the limitations expressed herein, and the Plan met prior to that date all requirements of Code Section 415, then for purposes of this Schedule the
limit in Section l (a)(i) with respect to such individual will equal his Accrued Retirement Pension.

Notwithstanding the above, if the Participant was a Participant as of the first day of the first limitation year beginning after December 31, 1986, in one or more defined benefit plans maintained by the Employer which were in existence on May 6, 1986, the denominator of this fraction will not be
less than one hundred twenty-five percent (125%) of the sum of the annual benefits under such plans which the Participant had accrued as of the close of the last limitation year beginning before January 1, 1987, disregarding any changes in the terms and conditions of the Plan after May 5, 1986.
The preceding sentence applies only if the defined benefit plans individually and in the aggregate satisfied the requirements of Section 415 for all limitation years beginning before January 1, 1987.

If the employee was a Participant as of the end of the first day of the first limitation year beginning after December 31, 1986, in one or more defined contribution plans maintained by the Employer which were in existence on May 6, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the defined benefit plan fraction would otherwise exceed 1.0 under the teens of this Plan.  Under the adjustment, an amount equal to the product of (1) the excess of the sum of the fraction over 1.0 times (2) the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction.  The adjustment is calculated using the fractions as they would be computed as of the end of the last limitation year beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the Plan made after May 5, 1986, but
using the Code Section 415 limitation applicable to the first limitation year beginning on or after January 1, 1987.  

61

Section 3 - Dual Plan Limitation

If a Participant of this Plan also has participated in another plan of the Company or any Related Company belonging to the controlled group of corporations of which the Company is a member as described in Section
1.29 of the Plan, which is considered a “defined contribution plan” under Code Section 414(i) then, in addition to being subject to the basic limitation under Section 1 above, his benefit under this Plan will be subject to the limitation contained herein.

The sum of the “defined benefit plan fraction” (as defined hereinafter) and the “defined contribution plan fraction” (as defined hereinafter) for any year will not exceed 1.0.

The defined benefit plan fraction for any year will be a fraction the numerator of which is the projected annual benefit of the Participant under the Plan (determined as of the close of the year), and the denominator
of which is the lesser of (i) the product of 1.25, multiplied by the dollar limitation in effect under Code Section 415(b)(1)(A) for such year, or (ii) the product of 1.4 multiplied by the amount which may be taken into account under Code Section 415(b)(1)(B) with respect to such individual under
the Plan for such year.

The defined contribution plan fraction for any year will be a fraction the numerator of which is the sum of the annual additions to the Participant’s account as of the close of the year, and the denominator of
which is the sum of the lesser of the following amounts determined for such year and for each prior year of Service with the employer:

	 	 	 	 	 	 
	 	 	 	(i)	 	the product of 1.25, multiplied by the dollar limitation in effect under Code Section 415(c)(1)(A) for such year [determined without regard to Code Section 415(c)(6)], or

	 	 	 	 	 	 
	 	 	 	(ii)	 	the product of 1.4 multiplied by the amount which may be taken into account under Code Section 415(c)(1)(B) with respect to such individual under such plan for such year.

In any year in which the sum of the defined benefit and defined contribution fractions exceed 1.0, the rate of accrual under this Plan will be reduced to the extent necessary so that the sum of the defined benefit
and defined contribution fractions in any limitation year does not exceed 1.0.  If necessary, to make further reductions to create compliance at 1.0, the Committee will adopt procedures to coordinate reduction in any defined contribution plans maintained by the Company or Related Company.

Notwithstanding the foregoing, for Plan Years commencing on or after January 1, 2000, the limitation prescribed in Code Section 415(e) as described in this Section 3 will no longer apply.  Any increase in a
Participant’s Accrued Benefit which is solely from the repeal of the limitations described in the immediately preceding sentence will not be recognized if the Participant’s Accrued Benefit was zero prior to January 1, 2000.

62

Section 4 - Provisions for Excess Benefit

If the provisions of this Schedule II require that a Participant’s Pension be reduced in order to satisfy one of the aforesaid limitations, his Employer may nevertheless determine that such Participant will
receive his full unreduced Pension determined without regard to said limitations.  In that event, however, the portion of his Pension under this Plan which is in excess of said limitations will be considered an “excess benefit plan” under ERISA Section 3(36) and such “excess
benefit” will be paid directly by the Employer and will not be paid from the Trust Fund.

Section 5 - Average Annual Earnings

For purposes of this Schedule II, “average annual earnings” will mean wages, salaries, effective January 1, 1998, amounts deferred under Code Sections 401(k), 125 and, effective January 1, 2001, 132(f) and
fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includable in gross income (including,
but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, reimbursements, and expense allowances), and excluding the following:

	 	 	 	 	 
	 	 	(a)	 	Employer contributions to a plan of deferred compensation which are not includable in the employee’s gross income for the taxable year in which contributed, or Employer contributions under a simplified employee pension plan to the extent such contributions are deductible by the employee,
or any distributions from a plan of deferred compensation;

	 	 	 	 	 
	 	 	(b)	 	amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by the employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;

	 	 	 	 	 
	 	 	(c)	 	amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and

	 	 	 	 	 
	 	 	(d)	 	other amounts which received special tax benefits, or contributions made by the Employer, whether or not under a salary reduction agreement, towards the purchase of an annuity described in Code Section 403(b), whether or not the amounts are actually excludable from the gross income of the
employee.

For limitation years beginning after December 31, 1991, for purposes of applying the limitations of this Schedule II, compensation for a limitation year is the compensation actually paid or includable in gross income
during such limitation year.

63

SCHEDULE III

PARTICIPATING EMPLOYERS

Section 1 - Participating Employers.  The following Employers are Participating Employers under the Plan with regard to their Eligible Employees who became Participants in the Plan prior to the date the Plan
was frozen.

	 
	Employers

	Big Lots Stores, Inc.

	C. S. Ross Company

	PNS Stores, Inc.

	Closeout Distribution, Inc.

	CSC Distribution, Inc.

	Durant DC, LLC

	West Coast Liquidators, Inc.

	Big Lots Capital, Inc.

64

SCHEDULE IV

TOP-HEAVY PROVISIONS

Section 1 – Application

The provisions of this Schedule IV will apply only if the Plan becomes “top-heavy” (as defined in Code Section 416(g)), aggregating this Plan and any other qualified plan sponsored by the Employer or a
Related Company in which a key employee is a Participant and each Other Plan of the Employer or a Related Company (including any terminated plan that covered a Key Employee and was maintained within the five (5) year [effective January 1, 2002, one (1) year] period ending on the determination date)
which enables this Plan or any plan in which a key employee participates to meet the requirements of Code Sections 401 (a)(4) or 410(b) (“required aggregation group”).  In addition, the Administrator may elect to include with the required aggregation group any other plan or plans of the
Employer or a Related Company not required to be included in the required aggregation group so long as their inclusion as a part of the group would not cause such group to fail to meet the requirements of Code Section 401 (a) and 410 (“permissive aggregation group”).  If aggregation
groups, as described in the immediate prior sentence, include two (2) or more defined benefit plans, the present value of the Accrued Retirement Pensions will be determined assuming an interest rate of five percent (5%) per annum, no preretirement mortality, disability or termination, and
postretirement mortality according to the 1971 Group Annuity Mortality table

A Plan is top-heavy, generally, if the present value of the Accrued Retirement Pensions of employees who are Key Employees (as defined in Code Section 416(i) exceeds sixty percent (60%) of the present value of the
Accrued Retirement Pensions of all Participants (the 60% Test).  Each present value shall be computed assuming the assumptions provided in the last sentence of the immediately preceding paragraph.  In subsequent Plan Years, the test will be made on the valuation date used for the computing Plan
costs for minimum funding purposes, regardless of whether a valuation is performed that year.  However, and notwithstanding the results of the 60% Test, the Plan will not be considered a Top Heavy Plan for any Plan Year in which the Plan is a part of a required or permissive aggregation group.

In making the 60% Test, each present value will be computed more than sixty percent (60%) of the value of the Individual Accounts of Participants in this Plan (disregarding the Individual Accounts of those
Participants who have performed no Service for the Employer during the five (5) year period ending on the determination date (effective January 1, 2002, the one (1) year period ending on the determination date)) and the accrued benefit of any member in any defined benefit plan maintained by his
Employer or a Related Company as of any “determination date” (the last day of the Prior Plan Year), is attributable to key employees.  Computation of the top-heavy ratio will be determined in accordance with Code Section 416(g).  The present value of accrued benefits in any Employer or
Affiliate sponsored defined benefit plan will be determined on the valuation date used for computing Plan costs under Code Section 412 and will be determined on the basis of the actuarial assumptions specified in such defined benefit plan for purposes of making the top-heavy determination.  If the
Plan becomes top-heavy as of any determination date, then effective in the next succeeding Plan Year, the provisions of this Schedule IV will apply.

65

Section 2 - Special Vesting Rule

Notwithstanding the provisions of the Plan to the contrary, a Participant will be fully vested hereunder upon the completion of three (3) rather than five (5) years of Service as determined in accordance with the
following schedule:

	 	 	 	 	 
	Years of Service

	 	Vested Percentage

	Less than 3
	 	 	0	%
	3
	 	 	100	%

	 	 	 	 	If the Plan becomes a top-heavy Plan and subsequently ceases to be such:

	 	 	 	 	 
	 	 	(a)	 	any portion of the Participant’s Accrued Benefit which was vested before the Plan ceased to be top-heavy will remain vested; and

	 	 	 	 	 
	 	 	(b)	 	any Participant with three (3) or more years of Service will be given the option to remain under the top-heavy vesting schedule contained in this Section IV1.02, in lieu of the vesting schedule contained in Article V.

Section 3 - Special Minimum Benefit

Notwithstanding the provisions of Article IV hereof to the contrary, each Participant of the Plan who is not a key employee and who has been credited with one thousand (1,000) hours of Service during the Plan Year
will be entitled to a minimum Accrued Benefit equal to (i) the amount otherwise provided by this Plan or (ii) two percent (2%) of the Participant’s average monthly compensation (as defined in Code Section 415) for the five (5) consecutive years when his aggregate compensation was highest
multiplied by his years of Credited Service earned after 1983, up to ten (10) years, for each Plan Year in which the Plan was top-heavy, whichever is greater.

Each non-key employee who is a Participant in the Plan and who has completed at least one thousand (1,000) Hours of Service during an accrual Computation Period must accrue a minimum benefit in accordance with the
top-heavy rules, regardless of whether a non-key employee is employed on a specified date, such as the last day of the year.

Section 4 - Special Maximum Combined Plans Limit

Notwithstanding the provisions of Section 3 of Schedule II to the contrary, the denominator of the defined contribution plan fraction and defined benefit plan fraction will, if the Plan becomes top-heavy, be amended
to read 1.0 rather than 1.25.  This provision does not apply to Plan Years beginning on or after January 1, 2000.

Section 5 - Key Employee and Non-Key Employee Defined

The term key employee will have the same meaning as is specified in Code Section 416(i)(1), i.e., (i) certain officers of the Employer having an annual Compensation greater than fifty percent (50%) of the defined
benefit plan dollar limitation in effect under Code Section 415(b)(1)(A) for

66

any such Plan Year (effective January 1, 2002, an officer must earn in excess of one hundred thirty thousand dollars ($130,000) to be a key employee), (ii) the ten (10) employees owning (or considered as owning under
Code Section 318) more than a one half percent 1/2%) interest and one of the tenth largest equity interests of the Employer whose annual Compensation is greater than the defined contribution dollar limitation in effect under Code Section 415 of any such Plan Year (effective January 1, 2002, this
top ten (10) owner category is eliminated), (iii) any five percent (5%) owner of the Employer and (iv) any one percent (1%) owner of the Employer whose annual Compensation in any Plan Year is more than one hundred and fifty thousand dollars ($150,000).  The term key employee as of any
determination date will be applied to any employee, Former employee, Participant, Former Participant or Retired Participant (or his Spouse or Beneficiary) who was a key employee during the Plan Year (ending with the determination date) or in any of the four (4) preceding Plan Years (effective
January 1, 2002, the four-(4) year look-back period is eliminated).  Any employee who is not a key employee will be a non-key employee and will include an employee who was formerly a key employee.

67Exhibit 10.1
                               MOTIENT CORPORATION

                          SECURITIES PURCHASE AGREEMENT

     This SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of April
15, 2005 and is by and among MOTIENT CORPORATION, a Delaware corporation, with
its principal office at 300 Knightsbridge Pkwy., Lincolnshire, IL 60069 (the
"Company"), and each investor listed on Schedule 1 hereto (each such investor
individually, a "Purchaser" and, collectively, the "Purchasers").

     WHEREAS, the Company desires to issue and sell to the Purchasers, and the
Purchasers desire to purchase from the Company, authorized but unissued shares
of the Company's Series A Preferred Stock, $0.01 par value per share (the
"Series A Preferred Stock"), at an aggregate purchase price of up to
$408,500,000 all upon the terms and subject to the conditions set forth in this
Agreement;

     WHEREAS, simultaneously with entering into this Agreement, the Company and
the Purchasers are entering into that certain Registration Rights Agreement,
dated as of the date hereof (the "Registration Rights Agreement") in
substantially the form attached hereto as Exhibit C, pursuant to which the
Company shall register for resale the Conversion Shares (as defined below), the
Warrant Shares (defined below) and the Dividend Shares (defined below) on the
terms set forth therein;

     NOW THEREFORE, in consideration of the mutual agreements, representations,
warranties and covenants herein contained, the parties hereto agree as follows:

         1. Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:

         "Affiliate" means any Person that, directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, a Person, as such terms are used and construed under Rule 144 (as defined
below), and in all cases including, without limitation, any Person that serves
as a general partner and/or investment adviser or in a similar capacity of such
a Person.

         "Board" means the Board of Directors of the Company.

         "Certificate of Designations" means the Certificate of Designations of
the Series A Preferred Stock in substantially the form attached hereto as
Exhibit A and filed on or before the Closing by the Company with the Secretary
of State of the State of Delaware establishing the rights, preferences and
privileges of the Series A Preferred Stock.

         "Closing Date" means the date hereof.

         "Common Stock" means the common stock, par value $0.01 per share, of

                                       1
<PAGE>

the Company. "Conversion Shares" means the Common Stock issuable upon conversion
of the Shares pursuant to the terms of the Certificate of Designations.

         "Dividend Shares" means the shares of Common Stock issuable as
dividends on the Shares.

         "Effective Date" means the earlier of (i) the date that is one hundred
twenty (120) days after the Closing Date or (ii) the date that the registration
statement required to be filed by the Company under the Securities Act pursuant
to the terms of the Registration Rights Agreement becomes effective.

         "Escrow Agreement" means the Escrow Agreement date as of the date
hereof by and between the Corporation and Equiserve Trust Company N.A., as
escrow agent, in substantially the form attached hereto as Exhibit G.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and all of the rules and regulations promulgated thereunder.

         "Majority Purchasers" has the meaning set forth in Section 9.8.

         "Material Adverse Effect" means any event, occurrence or development
that has had, or that could reasonably be expected to have, individually or in
the aggregate with other events, occurrences or developments, a material adverse
effect on the assets, liabilities (contingent or otherwise), business, affairs,
operations, prospects or condition (financial or otherwise) of the Company.

         "NASDAQ" means the NASDAQ National Market or the NASDAQ SmallCap
Market.

         "Person" (whether or not capitalized) means an individual, entity,
partnership, limited liability company, corporation, association, trust, joint
venture, unincorporated organization, and any government, governmental
department or agency or political subdivision thereof.

         "Rule 144" means Rule 144 promulgated under the Securities Act and any
successor or substitute rule, law or provision.

         "Rule 144A" means Rule 144A promulgated under the Securities Act and
any successor or substitute rule, law or provision.

         "SEC" means the Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended, and all
of the rules and regulations promulgated thereunder.

                                       2
<PAGE>

         "Shares" means the shares of Series A Preferred Stock issued and sold
by the Company to the Purchasers hereunder.

         "Share Price" means $1,000.00 per Share.

         "Subsidiaries" means the subsidiaries of the Company listed on Schedule
3.18 to the Disclosure Schedule.

         "TerreStar Transaction" means the proposed transaction pursuant to
which the Company intends to invest up to $350 million of the proceeds of this
offering to increase its equity ownership interest in TerreStar Networks Inc.
("TerreStar") at a pre-money valuation of TerreStar not to exceed $800 million
on a fully-diluted basis. For purposes of clarity, the TerreStar Transaction is
not intended to be a "transaction contemplated" by the terms of this Agreement
or the Transaction Documents.

         "Transaction Documents" means, collectively, the Registration Rights
Agreement, the Warrants and the Escrow Agreement.

         "Transfer Agent Instructions" means the Irrevocable Transfer Agent
Instructions, in substantially the form attached hereto as Exhibit B, executed
by the Company and delivered to and acknowledged in writing by the Company's
transfer agent.

         "Warrants" means the warrants to purchase Common Stock, dated as of the
date hereof, issued by the Company to the Purchasers, in substantially the form
attached hereto as Exhibit D.

         "Warrant Shares" means the shares of Common Stock issued or issuable
upon the exercise of the Warrants.

     2.  Purchase and Sale of Shares and Warrants.

         2.1 Filing of Certificate of Designations. The Company shall adopt and
file with the Secretary of State of the State of Delaware on or before the
Closing the Certificate of Designations.

         2.2 Purchase and Sale of Shares. Subject to and upon the terms and
conditions set forth in this Agreement, the Company agrees to issue and sell to
each Purchaser, and each Purchaser hereby agrees, severally and not jointly, to
purchase from the Company, at the Closing, the number of Shares set forth
opposite such Purchaser's name on Schedule 1 hereto, at the Share Price.

         2.3 Issuance of Warrants. Subject to and upon the terms and conditions
set forth in this Agreement, the Company agrees to issue to each Purchaser at
the Closing a Warrant to purchase the number of Warrant Shares equal to one
percent (1%) of the aggregate purchase price of the Shares purchased by such
Purchaser at Closing divided by the average closing price of Common Stock on the
5 trading days prior to the Closing Date at an exercise price equal to $26.51,
which shall be appropriately adjusted for any recapitalizations, stock
combinations, stock dividends, stock splits and the like which occur after the
Closing Date.

                                       3
<PAGE>

         2.4 Closing. The closing of the purchase and sale of the Shares and
Warrants (the "Closing") shall take place at 10:00 am (Eastern Time) at the
offices of Andrews Kurth LLP, 450 Lexington Avenue, New York, New York. 10017,
on the Closing Date, or on such other date and at such time as may be agreed
upon between the Purchasers, on the one hand, and the Company, on the other
hand. At the Closing, the Company shall deliver to each Purchaser (i) a single
stock certificate (or more, if reasonably requested by the Purchaser),
registered in the name of such Purchaser, representing the number of Shares
purchased by such Purchaser and (ii) a Warrant as provided in Section 2.3
hereof, against payment of the purchase price by wire transfer of immediately
available funds to such account as the Company shall designate in writing.

     3. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Purchaser, as of the date hereof and except as
set forth on the disclosure schedule furnished by the Company to each Purchaser
(the "Disclosure Schedule") attached hereto as Schedule 2, as follows:

         3.1 Incorporation. Each of the Company and the Subsidiaries is a
corporation or other entity duly organized, validly existing and in good
standing under the laws of the State of Delaware (or such other applicable
jurisdiction of incorporation or formation as is indicated on Schedule 3.18),
and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or the character of
the property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would not
result in a Material Adverse Effect. Each of the Company and the Subsidiaries
has all requisite corporate power and authority to carry on its business as now
conducted and to carry out the transactions contemplated hereby. Neither the
Company nor any of the Subsidiaries is in violation of any of the provisions of
its Certificate of Incorporation (or other charter document) or By-laws.

         3.2 Capitalization. The authorized capital stock of the Company
consists of:

               (a) Common Stock. 100,000,000 shares of Common Stock, of which
65,206,435 shares were outstanding as of April 13, 2005.

               (b) Preferred Stock. 5,000,000 shares of preferred stock, par
value $0.01 per share (the "Preferred Stock"), none of which are outstanding.
450,000 shares have been designated as Series A Preferred Stock, up to 408,500
of which may be sold pursuant to this Agreement. The rights, preferences and
privileges of the Series A Preferred Stock are as stated in the Certificate of
Designations. The remaining authorized shares of Preferred Stock are
undesignated.

               (c) All shares of the Company's issued and outstanding capital
stock have been duly authorized, are validly issued and outstanding, and are
fully paid and nonassessable.

                                       4
<PAGE>

               (d) Except for (i) the conversion privileges of the Series A
Preferred Stock to be issued under this Agreement, (ii) the Warrants and (iii)
as set forth in Schedule 3.2 to the Disclosure Schedule, there are no existing
options, warrants, calls, preemptive (or similar) rights, subscriptions or other
rights, agreements, arrangements or commitments of any character obligating the
Company to issue, transfer or sell, or cause to be issued, transferred or sold,
any shares of the capital stock of the Company or other equity interests in the
Company or any securities convertible into or exchangeable for such shares of
capital stock or other equity interests, including the Shares, the Warrants and
the Warrant Shares, and there are no outstanding contractual obligations of the
Company to repurchase, redeem or otherwise acquire any shares of its capital
stock or other equity interests. The issue and sale of the Shares, the Warrants
and the Warrant Shares will not obligate the Company to issue or sell, pursuant
to any pre-emptive right or otherwise, shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities.

         3.3 Registration Rights. Except as set forth on Schedule 3.3 to the
Disclosure Schedule, the Company has not granted or agreed to grant to any
Person any right (including "piggy-back" and demand registration rights) to have
any capital stock or other securities of the Company registered with the SEC or
any other government authority.

         3.4 Authorization. All corporate action on the part of the Company, its
officers and directors necessary for the authorization, execution, delivery and
performance of this Agreement and the Transaction Documents and the consummation
of the transactions contemplated herein and therein has been taken. When
executed and delivered by the Company, each of this Agreement and the
Transaction Documents shall constitute a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as such may be limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors' rights generally and by general equitable principles.
The Company has all requisite corporate power and authority to enter into this
Agreement and the Transaction Documents and to carry out and perform its
obligations under their respective terms.

         3.5 Valid Issuance of the Shares. The Shares, the Warrants and the
Warrant Shares have been duly authorized, and the Shares and the Warrant Shares,
upon issuance pursuant to the terms hereof and the terms of the Warrants,
respectively, will be validly issued, fully paid and nonassessable and not
subject to any encumbrances, preemptive rights or any other similar contractual
rights of the stockholders of the Company or any other Person. The Company has
reserved from its duly authorized capital stock the number of shares of Series A
Preferred Stock issuable upon execution of this Agreement and the number of
shares of Common Stock issuable upon the exercise in full of the Warrants
(assuming the Warrants vest in full). The Conversion Shares have been duly and
validly authorized and reserved for issuance and, upon issuance in accordance
with the terms of the Certificate of Designations, will be validly issued, fully
paid and nonassessable and will not be subject to any encumbrances, preemptive
rights or any other similar contractual rights of the stockholders of the
Company or any other Person.

                                       5
<PAGE>

         3.6 SEC Documents. The Company has furnished to the Purchasers true and
complete copies of the Company Annual Report on Form 10-K for the year ended
December 31, 2004 (the "2004 10-K"). As of its filing date, the 2004 10-K
complied in all material respects with the requirements of the Exchange Act, and
the rules and regulations promulgated thereunder, and the 2004 10-K did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the 2004 10-K
comply in all material respects with applicable accounting requirements and the
rules and regulations of the SEC with respect thereto in effect at the time of
filing. All material agreements to which the Company is a party or to which the
property or assets of the Company are subject are included as part of or
specifically identified in the 2004 10-K to the extent required by the rules and
regulations of the SEC as in effect at the time of filing. The Company has
prepared and filed with the SEC all filings and reports required by the
Securities Act and the Exchange Act to make the Company's filings and reports
current in all respects.

         3.7 Financial Statements. The consolidated balance sheets of the
Company and the Subsidiaries as of December 31, 2004 and the related
consolidated statements of operations, changes in stockholders' equity (deficit)
and cash flows for the year ended December 31, 2004 (collectively, the
"Financial Statements") are included in the 2004 10-K. The Financial Statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods covered
thereby and present fairly, in all material respects, the financial position of
the Company and the Subsidiaries and the results of operations and cash flows as
of the date and for the period indicated therein.

         3.8 Consents. Except for (a) the filing and effectiveness of any
registration statement required to be filed by the Company under the Securities
Act pursuant to the terms of the Registration Rights Agreement, (b) any required
state "blue sky" law filings in connection with the transactions contemplated
hereunder or under the Transaction Documents and (c) the Federal Communications
Commission approvals that would be required to be obtained prior to the
consummation of the TerreStar Transaction, all consents, approvals, orders and
authorizations required on the part of the Company in connection with the
execution or delivery of, or the performance of the obligations under, this
Agreement and the Transaction Documents, and the consummation of the
transactions contemplated herein and therein, have been obtained and will be
effective as of the date hereof. The execution and delivery by the Company of
this Agreement and the Transaction Documents, the consummation of the
transactions contemplated herein and therein, and the issuance of the Shares,
the Warrants, the Warrant Shares, the Dividend Shares and the Conversion Shares,
do not require the consent or approval of the stockholders of, or any lender to,
the Company.

         3.9 No Conflict; Compliance With Laws.

               (a) The execution, delivery and performance by the Company of
this Agreement and the Transaction Documents, and the consummation of the
transactions contemplated hereby and thereby, including the issuance of the
Shares, the Warrants, the Warrant Shares, the Dividend Shares and the Conversion
Shares, do not and will not (i) conflict with or violate any provision of the

                                       6
<PAGE>

Certificate of Incorporation (or other charter documents) or By-laws of the
Company or any of the Subsidiaries, (ii) breach, conflict with or result in any
violation of or default (or an event that with notice or lapse of time or both
would become a default) under, or give rise to a right of termination,
amendment, acceleration or cancellation (with or without notice or lapse of
time, or both) of any obligation, contract, commitment, lease, agreement,
mortgage, note, bond, indenture or other instrument or obligation to which the
Company or any of the Subsidiaries is a party or by which they or any of their
properties or assets are bound, except in the case of this clause (ii) to the
extent such breach, conflict, violation, default, termination, amendment,
acceleration or cancellation does not, and could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, or (iii)
result in a violation of any statute, law, rule, regulation, order, ordinance or
restriction applicable to the Company, the Subsidiaries or any of their
properties or assets, or any judgment, writ, injunction or decree of any court,
judicial or quasi-judicial tribunal applicable to the Company, the Subsidiaries
or any of their properties or assets.

               (b) Neither the Company nor any of the Subsidiaries (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any of the Subsidiaries), nor has the Company or any of the
Subsidiaries received written notice of a claim that it is in default under or
that it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties or assets is bound (whether or not such default or violation has been
waived), (ii) is in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety, communications and employment and labor
matters, except in each case as does not, and could not, reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.

         3.10 Brokers or Finders. Other than (i) the broker fee the Company will
pay to Tejas Securities Group, Inc. ("Tejas") upon the Closing in an amount not
to exceed $11,355,000 and (ii) the broker fee the Company will pay to Deutsche
Bank Securities Inc. ("Deutsche Bank") upon the Closing in an amount not to
exceed $5,862,500 (together, the "Broker Fees"), neither the Company nor any of
the Subsidiaries has dealt with any broker or finder in connection with the
transactions contemplated by this Agreement or the Transaction Documents, and
neither the Company nor any of the Subsidiaries has incurred, or shall incur,
directly or indirectly, any liability for any brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
the Transaction Documents, or any transaction contemplated hereby or thereby.

         3.11 Pink Sheets. The Company's Common Stock is currently actively
traded, and thus quoted, on the pink sheets.

         3.12 Absence of Litigation. There are no pending or, to the Company's
knowledge, threatened actions, suits, claims, proceedings or investigations
against or involving the Company or any of the Subsidiaries except to the extent
described in the 2004 10-K.

                                       7
<PAGE>

         3.13 No Undisclosed Liabilities; Indebtedness. Since December 31, 2004,
the Company and the Subsidiaries have incurred no liabilities or obligations,
whether known or unknown, asserted or unasserted, fixed or contingent, accrued
or unaccrued, matured or unmatured, liquidated or unliquidated, or otherwise,
except for liabilities or obligations that, individually or in the aggregate, do
not or would not have a Material Adverse Effect and other than liabilities and
obligations arising in the ordinary course of business. Except for indebtedness
reflected in the Company's balance sheet and the notes thereto contained in the
2004 10-K, the Company has no indebtedness outstanding as of the date hereof.
The Company is not in default with respect to any outstanding indebtedness or
any instrument relating thereto.

         3.14 Contracts. All contracts, agreements, instruments and other
documents required to be filed as exhibits to any of the periodic reports
required to be filed by the Exchange Act are legal, valid, binding and in full
force and effect and are enforceable by the Company in accordance with their
respective terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally and by
general equitable principles.

         3.15 Title to Assets. Each of the Company and the Subsidiaries has good
and marketable title to all real and personal property owned by it that is
material to the business of the Company or such Subsidiaries, in each case free
and clear of all liens and encumbrances, except those, if any, reflected in the
Financial Statements or incurred in the ordinary course of business consistent
with past practice. Any real property and facilities held under lease by the
Company or the Subsidiaries are held by it or them under valid, subsisting and
enforceable leases (subject to laws of general application relating to
bankruptcy, insolvency, reorganization, or other similar laws affecting
creditors' rights generally and other equitable remedies) with which the Company
and the Subsidiaries are in compliance in all material respects.

         3.16 Labor Relations. No labor or employment dispute exists or, to the
knowledge of the Company, is imminent or threatened, with respect to any of the
employees or consultants of the Company that has, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

         3.17 Intellectual Property. The Company is the sole and exclusive owner
of, or has the exclusive right to use, all right, title and interest in and to
all material foreign and domestic patents, patent rights, trademarks, service
marks, trade names, brands, copyrights (whether or not registered and, if
applicable, including pending applications for registration) and other
proprietary rights or information, owned or used by the Company (collectively,
the "Rights"), and in and to each material invention, software, trade secret,
and technology used by the Company or any of the Subsidiaries (the Rights and
such other items, the "Intellectual Property"), and, to the Company's knowledge,
the Company owns and has the right to use the same, free and clear of any claim
or conflict with the rights of others (subject to the provisions of any
applicable license agreement). Except as set forth on Schedule 3.17 to the
Disclosure Schedule, there have been no written claims made against the Company
or any of the Subsidiaries asserting the invalidity, abuse, misuse, or
unenforceability of any of the Intellectual Property, and, to the Company's
knowledge, there are no reasonable grounds for any such claims.

                                       8
<PAGE>

         3.18 Subsidiaries; Joint Ventures. Except for the Subsidiaries, the
Company has no subsidiaries and (i) does not otherwise own or control, directly
or indirectly, any other Person and (ii) does not hold equity interests,
directly or indirectly, in any other Person. Except as described in the 2004
10-K, the Company is not a participant in any joint venture, partnership, or
similar arrangement material to its business.

         3.19 Taxes. The Company and each of the Subsidiaries has filed (or has
had filed on its behalf), will timely file or will cause to be timely filed, or
has timely filed for an extension of the time to file, all material Tax Returns
(as defined below) required by applicable law to be filed by it or them prior to
or as of the date hereof, and such Tax Returns are, or will be at the time of
filing, true, correct and complete in all material respects. Each of the Company
and the Subsidiaries has paid (or has had paid on its behalf) or, where payment
is not yet due, has established (or has had established on its behalf and for
its sole benefit and recourse) or will establish or cause to be established in
accordance with United States generally accepted accounting principles on or
before the date hereof an adequate accrual for the payment of, all material
Taxes (as defined below) due with respect to any period ending prior to or as of
the date hereof. "Taxes" shall mean any and all taxes, charges, fees, levies or
other assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, license, value added, capital, net worth,
payroll, profits, franchise, transfer and recording taxes, fees and charges, and
any other taxes, assessment or similar charges imposed by the Internal Revenue
Service or any taxing authority (whether state, county, local or foreign) (each,
a "Taxing Authority"), including any interest, fines, penalties or additional
amounts attributable to or imposed upon any such taxes or other assessments.
"Tax Return" shall mean any report, return, document, declaration or other
information or filing required to be supplied to any Taxing Authority, including
information returns, any documents with respect to accompanying payments of
estimated Taxes, or with respect to or accompanying requests for extensions of
time in which to file any such return, report, document, declaration or other
information. There are no claims or assessments pending against the Company or
any of the Subsidiaries for any material alleged deficiency in any Tax, and
neither the Company nor any of the Subsidiaries has been notified in writing of
any material proposed Tax claims or assessments against the Company or any of
the Subsidiaries. No Tax Return of the Company or any of the Subsidiaries is or
has been the subject of an examination by a Taxing Authority. Each of the
Company and the Subsidiaries has withheld from each payment made to any of its
past or present employees, officers and directors, and any other person, the
amount of all material Taxes and other deductions required to be withheld
therefrom and paid the same to the proper Taxing Authority within the time
required by law.

         3.20 Pensions and Benefits.

               (a) Schedule 3.20(a) to the Disclosure Schedule contains a true
and complete list of each "employee benefit plan" within the meaning of Section
3(3) of the United States Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), including, without limitation, multiemployer plans within the
meaning of Section 3(37) of ERISA, and all retirement, profit sharing, stock
option, stock bonus, stock purchase, severance, fringe benefit, deferred
compensation, and other employee benefit programs, plans, or arrangements,

                                       9
<PAGE>

whether or not subject to ERISA, under which (i) any current or former
directors, officers, employees or consultants of the Company has any present or
future right to benefits and which are contributed to, sponsored by or
maintained by the Company or any of the Subsidiaries, or (ii) the Company or any
of the Subsidiaries has any present or future liability. All such programs,
plans, or arrangements shall be collectively referred to as the "Company Plans."
Each Company Plan is included as part of or specifically identified in the 2004
10-K to the extent required by the rules and regulations of the SEC as in effect
at the time of filing.

               (b) (i) Each Company Plan has been established and administered
in all material respects in accordance with its terms and in compliance with the
applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended
(the "Code"), and other applicable laws, rules and regulations; (ii) each
Company Plan which is intended to be qualified within the meaning of Section
401(a) of the Code is so qualified and has received a favorable determination
letter as to its qualification (or if maintained pursuant to a prototype form of
instrument the sponsor thereof has received a favorable opinion letter as to its
qualification), and to the Company's knowledge nothing has occurred, whether by
action or failure to act, that could reasonably be expected to cause the loss of
such qualification; and (iii) no Company Plan provides retiree health or life
insurance benefits (whether or not insured), and neither the Company nor the
Subsidiaries have any obligations to provide any such retiree benefits other
than as required pursuant to Section 4980B of the Code or other applicable law.

               (c) No Company Plan is a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA) or a plan subject to the minimum funding
requirements of Section 302 or ERISA or Section 412 of the Code or Title IV of
ERISA, and neither the Company, the Subsidiaries, nor any member of their
Controlled Group has any liability or obligation in respect of, any such
multiemployer plan or plan. With respect to any Company Plan and to the
Company's knowledge, (i) no actions, suits or claims (other than routine claims
for benefits in the ordinary course) are pending or threatened, and (ii) no
administrative investigation, audit or other administrative proceeding by the
Department of Labor, the Pension Benefit Guaranty Corporation, the Internal
Revenue Service or other governmental agencies are pending, threatened or in
progress.

         3.21 Private Placement; Communications with Purchasers. Neither the
Company nor any person acting on the Company's behalf has sold or offered to
sell or solicited any offer to buy the Shares, Warrants, Warrant Shares,
Conversion Shares or Dividend Shares by means of any form of general
solicitation or advertising. Neither the Company nor any of its Affiliates nor
any person acting on the Company's behalf has, directly or indirectly, at any
time within the past six (6) months, made any offer or sale of any security or
solicitation of any offer to buy any security under circumstances that would (i)
eliminate the availability of the exemption from registration under Regulation D
under the Securities Act in connection with the sale or issuance of the Shares,
Warrants, Warrant Shares, Conversion Shares or Dividend Shares as contemplated
hereby or (ii) cause the offering or issuance of the Shares, Warrants, Warrant
Shares, Conversion Shares or Dividend Shares pursuant to this Agreement or any
of the Transaction Documents to be integrated with prior offerings by the
Company for purposes of any applicable law, regulation or stockholder approval
provisions.

                                       10
<PAGE>

         3.22 Regulatory Matters. None of the Company or any of the Subsidiaries
is, or is an Affiliate of, or following the receipt of the proceeds of this
offering shall be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules thereunder. None of the Company
or any of the Subsidiaries is a United States real property holding corporation
within the meaning of the Foreign Investment in Real Property Tax Act of 1980.
No consent, license, permit, waiver, approval or authorization of, or
designation, declaration, registration or filing with, the SEC or any state
securities regulatory authority is required in connection with the offer, sale,
issuance or delivery of the Shares, Warrants, Warrant Shares, Conversion Shares
or Dividend Shares other than the possible filing of Form D with the SEC. The
Company does not have any agreement or understanding with any Purchaser with
respect to the transactions contemplated by this Agreement or the Registration
Rights Agreement, other than as specified in this Agreement or the Registration
Rights Agreement.

         3.23 Material Changes. Except as set forth on Schedule 3.23 to the
Disclosure Schedule, since December 31, 2004, the Company has conducted its
business only in the ordinary course, consistent with past practice, and since
such date there has not occurred: (i) a Material Adverse Effect; (ii) any
amendments or changes in the charter documents or by-laws of the Company or the
Subsidiaries; (iii) any: (A) incurrence, assumption or guarantee by the Company
or the Subsidiaries of any debt for borrowed money other than (1) equipment
leases made in the ordinary course of business, consistent with past practice
and (2) any such incurrence, assumption or guarantee with respect to an amount
of $25,000 or less that has been disclosed in the 2004 10-K; (B) issuance or
sale of any securities convertible into or exchangeable for securities of the
Company other than to directors, employees and consultants pursuant to existing
equity compensation or stock purchase plans of the Company; (C) issuance or sale
of options or other rights to acquire from the Company or the Subsidiaries,
directly or indirectly, securities of the Company or any securities convertible
into or exchangeable for any such securities, other than options issued to
directors, employees and consultants in the ordinary course of business,
consistent with past practice; (D) issuance or sale of any stock, bond or other
corporate security other than to directors, employees and consultants pursuant
to existing equity compensation or stock purchase plans of the Company; (E)
declaration or making of any payment or distribution to stockholders or purchase
or redemption of any share of its capital stock or other security other than to
or from directors, officers and employees of the Company or the Subsidiaries as
compensation for or in connection with services rendered to the Company or the
Subsidiaries (as applicable) or for reimbursement of expenses incurred on behalf
of the Company or the Subsidiaries (as applicable); (F) sale, assignment or
transfer of any of its intangible assets except in the ordinary course of
business, consistent with past practice, or cancellation of any debt or claim
except in the ordinary course of business, consistent with past practice; (G)
waiver of any right of substantial value whether or not in the ordinary course
of business; (H) material change in officer compensation, except in the ordinary
course of business and consistent with past practice; or (I) other commitment
(contingent or otherwise) to do any of the foregoing; (iv) any creation,
sufferance or assumption by the Company or any of the Subsidiaries of any lien
on any asset or any making of any loan, advance or capital contribution to or
investment in any Person, in an aggregate amount which exceeds $25,000
outstanding at any time; (v) any entry into, amendment of, relinquishment,
termination or non-renewal by the Company or the Subsidiaries of any material
contract, license, lease, transaction, commitment or other right or obligation,
other than in the ordinary course of business, consistent with past practice; or
(vi) any transfer or grant of a right with respect to the Intellectual Property
Rights owned or licensed by the Company or the Subsidiaries, except as among the
Company and the Subsidiaries.

                                       11
<PAGE>

         3.24 Regulatory Permits. The Company and the Subsidiaries possess all
certificates, approvals, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct
their businesses as described in the 2004 10-K, except where the failure to
possess such permits does not, and could not have, individually or in the
aggregate, a Material Adverse Effect (the "Material Permits"), and the Company
has not received any written notice of proceedings relating to the revocation or
modification of any Material Permits except as described in the 2004 10-K.

         3.25 Transactions with Affiliates and Employees. Except as set forth in
the 2004 10-K, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company, is presently a
party to any transaction or agreement with the Company (other than for services
as employees, officers and directors) exceeding $60,000, including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

         3.26 Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary for the business in which the
Company and the Subsidiaries are engaged. The Company has no reason to believe
that it will not be able to renew existing insurance coverage for itself and the
Subsidiaries as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary or appropriate to continue business.

         3.27 Solvency. Based on the consolidated financial condition of the
Company and the Subsidiaries as of the date hereof, (i) the fair saleable value
of the Company's assets exceeds the amount that will be required to be paid on
or in respect of the Company's existing debts and other liabilities (including
known and contingent liabilities) as they mature; (ii) the Company's assets do
not constitute unreasonably small capital to carry on its business for the
current fiscal year as now conducted and as proposed to be conducted, including
its capital needs taking into account the particular capital requirements of the
business conducted by the Company, projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debts when such amounts
are required to be paid. The Company has no present intention to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt).

         3.28 Internal Accounting Controls. Except as disclosed in the 2004

                                       12
<PAGE>

10-K, the Company maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with United States generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorizations, (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences, and (v) the Company is otherwise in compliance with the Securities
Act, the Exchange Act and all other rules and regulations promulgated by the SEC
and applicable to the Company, including such rules and regulations to implement
the Sarbanes-Oxley Act of 2002, as amended.

         3.29 Disclosure. Neither the Company nor, to the Company's knowledge,
any other Person acting on its behalf and at the direction of the Company, has
provided to any Purchaser or its agents or counsel any information that in the
Company's reasonable judgment, at the time such information was furnished,
constitutes material, non-public information, except such information as may
have been disclosed to certain Board members, who are affiliated with certain
Purchasers, in their capacity as directors of the Company. The Company
understands and confirms that each Purchaser will rely on the representations
and covenants contained herein in effecting the transactions contemplated by
this Agreement and the Transaction Documents, and in the securities of the
Company after the Closing. All disclosure provided to the Purchasers regarding
the Company, its business and the transactions contemplated hereby, including
the Schedules to this Agreement furnished by or on behalf of the Company, taken
as a whole is true and correct and does not contain any untrue statement of
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. No event or circumstance has occurred or information
exists with respect to the Company or the Subsidiaries or its or their business,
properties, prospects, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed. The
Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 4.

     4. Representations and Warranties of the Purchasers. Each Purchaser
represents and warrants, severally (as to itself) and not jointly, to the
Company as follows:

         4.1 Authorization. All action on the part of such Purchaser and, if
applicable, its officers, directors, managers, members, shareholders and/or
partners necessary for the authorization, execution, delivery and performance of
this Agreement and the Registration Rights Agreement, and the consummation of
the transactions contemplated herein and therein, has been taken. When executed
and delivered, each of this Agreement and the Registration Rights Agreement will
constitute the legal, valid and binding obligation of such Purchaser,
enforceable against such Purchaser in accordance with its terms, except as such
may be limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally and by general equitable principles. Such Purchaser
has all requisite corporate power and authority to enter into each of this
Agreement and the Registration Rights Agreement, and to carry out and perform
its obligations under the terms of hereof and thereof.

                                       13
<PAGE>

         4.2 Purchase Entirely for Own Account. Such Purchaser is acquiring the
Shares, Conversion Shares, Warrants, Warrant Shares and Dividend Shares for its
own account for investment and not for resale or with a view to distribution
thereof in violation of the Securities Act.

         4.3 Investor Status; Etc. Such Purchaser certifies and represents to
the Company that it is a "Qualified Institutional Buyer" as defined in Rule 144A
promulgated under the Securities Act; provided, however, that GCM Little Arbor
Institutional Partners, L.P., Portfolio Logic LLC and Long Meadow Holdings, LP
do not represent that they are Qualified Institutional Buyers but instead each
represents that they are an institutional "Accredited Investor" as such term is
defined in Rule 501 of Regulation D promulgated under the Securities Act and was
not organized for the purpose of acquiring any of the Shares, Warrants, Warrant
Shares, Conversion Shares or Dividend Shares. Such Purchaser's financial
condition is such that it is able to bear the risk of holding the Shares for an
indefinite period of time and the risk of loss of its entire investment. Such
Purchaser has sufficient knowledge and experience in investing in companies
similar to the Company so as to be able to evaluate the risks and merits of its
investment in the Company.

         4.4 Securities Not Registered. Such Purchaser understands that the
Shares, Warrants, Warrant Shares, Conversion Shares and Dividend Shares have not
been registered under the Securities Act, by reason of their issuance by the
Company in a transaction exempt from the registration requirements of the
Securities Act, and that the Shares, Warrants, Warrant Shares, Conversion Shares
and Dividend Shares must continue to be held by such Purchaser unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration. Such Purchaser understands that the exemptions
from registration afforded by Rule 144 (the provisions of which are known to it)
promulgated under the Securities Act depend on the satisfaction of various
conditions, and that, if applicable, Rule 144 may afford the basis for sales
only in limited amounts.

         4.5 No Conflict. The execution and delivery of this Agreement and the
Registration Rights Agreement by such Purchaser, and the consummation of the
transactions contemplated hereby and thereby, will not conflict with or result
in any violation of or default by such Purchaser (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material
benefit under (i) any provision of the organizational documents of such
Purchaser or (ii) any agreement or instrument, permit, franchise, license,
judgment, order, statute, law, ordinance, rule or regulations, applicable to
such Purchaser.

         4.6 Brokers. Such Purchaser has not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.

         4.7 Consents. All consents, approvals, orders and authorizations
required on the part of such Purchaser in connection with the execution,
delivery or performance of this Agreement and the consummation of the
transactions contemplated herein have been obtained and are effective as of the
date hereof.

                                       14
<PAGE>

         4.8 Regulatory Permits. Purchaser possess all certificates, approvals,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary for Purchaser to enter into this
Agreement and the consummate the transactions contemplated herein.

         4.9 Disclosure of Information. Such Purchaser believes it has received
all the information it considers necessary or appropriate for deciding whether
to purchase the Shares, Warrants, Warrant Shares, Conversion Shares and Dividend
Shares. Such Purchaser further represents that it has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of the Shares, Warrants, Warrant Shares, Conversion
Shares and Dividend Shares and the business, properties, prospects and financial
condition of the Company. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 3 of this Agreement or
the rights of the Purchasers to rely thereon.

     5.  Conditions Precedent.

         5.1. Conditions to the Obligation of the Purchasers to Consummate the
Closing. The obligation of each Purchaser to consummate the Closing and to
purchase and pay for the Shares to be purchased by it is subject to the
satisfaction (or waiver by such Purchaser) of the following conditions
precedent:

               (a) The representations and warranties of the Company contained
herein shall be true and correct on and as of the date hereof. The Company shall
have performed or complied with all obligations and conditions herein required
to be performed or complied with by the Company on or prior to the date hereof.

               (b) No proceeding challenging this Agreement or the Transaction
Documents, or the transactions contemplated hereby or thereby, or seeking to
prohibit, alter, prevent or materially delay the Closing, shall have been
instituted before any court, arbitrator or governmental body, agency or official
or shall be pending against or involving the Company.

               (c) The sale of the Shares and the issuance of the Warrants, the
Warrant Shares and the Conversion Shares to the Purchasers shall not be
prohibited by any law, rule, governmental order or regulation. All necessary
consents, approvals, licenses, permits, orders and authorizations of, or
registrations, declarations and filings with, any governmental or administrative
agency or of or with any other Person with respect to any of the transactions
contemplated hereby (including, without limitation, all filings and approvals,
if any, required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended) shall have been duly obtained or made and shall be in full force and
effect.

               (d) All instruments and corporate proceedings of the Company in
connection with the transactions contemplated by this Agreement and the
Transaction Documents shall be satisfactory in form and substance to such
Purchaser, and such Purchaser shall have received copies (executed or certified,
as may be appropriate) of all documents which any Purchaser may have reasonably
requested in connection with such transactions.

                                       15
<PAGE>

               (e) Such Purchaser shall have received from Andrews Kurth LLP,
outside counsel to the Company, an opinion addressed to such Purchaser, dated
the Closing Date and substantially in the form of Exhibit E hereto.

               (f) The Registration Rights Agreement shall have been executed
and delivered to such Purchaser by the Company.

               (g) Such Purchaser shall have received from the Company an
original stock certificate evidencing the purchase of the Shares and an original
Warrant, in each case for the number of Shares of Series A Preferred Stock and
the number of Warrant Shares, respectively, set forth opposite such Purchaser's
name on Schedule 1 hereto.

               (h) The Company shall have delivered, in form and substance
satisfactory to such Purchaser, a certificate dated the Closing Date and signed
by the secretary or another appropriate executive officer of the Company,
certifying (i) that attached copies of the Certificate of Incorporation, the
Certificate of Designations and the By-Laws and resolutions of the Board
approving this Agreement, the Transaction Documents and the transactions
contemplated hereby and thereby, are all true, complete and correct and remain
in full force and effect as of the date hereof, and (ii) as to the incumbency
and specimen signature of each officer of the Company executing this Agreement,
the Transaction Documents and any other document delivered in connection
herewith on behalf of the Company.

               (i) The Company shall deliver to such Purchaser, a certificate in
form and substance satisfactory to such Purchaser, dated the Closing Date and
signed by the Company's chief operating officer, certifying that (i) the
representations and warranties of the Company contained in Section 3 hereof are
true and correct in all respects on the Closing Date and (ii) the Company has
performed and complied with all of the agreements and conditions set forth or
contemplated herein that are required to be performed or complied with by the
Company on or before the Closing Date.

               (j) Such Purchaser shall have received duly executed Transfer
Agent Instructions acknowledged by the Company's transfer agent.

               (k) Such Purchaser shall have received from the General Counsel
of the Company an opinion addressed to such Purchaser, dated the Closing Date
and substantially in the form attached hereto as Exhibit F.

               (l) The Escrow Agreement shall have been executed by the
Corporation and Equiserve Trust Company N.A., as escrow agent, and substantially
in the form attached hereto as Exhibit G.

         5.2. Conditions to the Obligation of the Company to Consummate the
Closing. The obligation of the Company to consummate the Closing and to issue

                                       16
<PAGE>

and sell the Shares to each Purchaser at the Closing is subject to the
satisfaction of the following conditions precedent:

               (a) The representations and warranties of the Purchasers
contained herein shall be true and correct in all respects on and as of the
Closing Date.

               (b) The Registration Rights Agreement shall have been executed
and delivered by the Purchasers.

               (c) The Purchasers shall have performed all obligations and
conditions herein required to be performed or complied with by the Purchasers on
or prior to the Closing Date.

               (d) No proceeding challenging this Agreement or the Transaction
Documents, or the transactions contemplated hereby or thereby, or seeking to
prohibit, alter, prevent or materially delay the Closing, shall have been
instituted before any court, arbitrator or governmental body, agency or official
or shall be pending against or involving such Purchaser.

               (e) The sale of the Shares, the issuance of the Warrants (and the
Warrant Shares) and the issuance of the Conversion Shares by the Company shall
not be prohibited by any law, rule, governmental order or regulation. All
necessary consents, approvals, licenses, permits, orders and authorizations of,
or registrations, declarations and filings with, any governmental or
administrative agency or of any other Person with respect to any of the
transactions contemplated hereby shall have been duly obtained or made and shall
be in full force and effect.

               (f) All instruments and corporate proceedings in connection with
the transactions contemplated by this Agreement to be consummated at the Closing
shall be satisfactory in form and substance to the Company, and the Company
shall have received counterpart originals, or certified or other copies of all
documents, including without limitation records of corporate or other
proceedings, which it may have reasonably requested in connection therewith.

               (g) All necessary consents, approvals, licenses, permits, orders
and authorizations of, or registrations, declarations and filings with, any
governmental or administrative agency or of or with any other Person with
respect to any of the transactions contemplated hereby (including, without
limitation, all filings and approvals, if any, required by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended) shall have been duly obtained or
made and shall be in full force and effect.

     6. Certain Covenants and Agreements.

         6.1. Transfer of Securities. Each Purchaser agrees severally (as to
itself only) and not jointly that it shall not sell, assign, pledge, transfer or
otherwise dispose of or encumber any of the Shares, the Warrants, the Warrant
Shares or the Conversion Shares, except (i) pursuant to an effective
registration statement under the Securities Act, (ii) to an Affiliate (so long
as such Affiliate agrees to be bound by the terms and provisions of this
Agreement as if, and to the fullest extent as, such Purchaser), or (iii)
pursuant to an available exemption from registration under the Securities Act

                                       17
<PAGE>

(including sales permitted pursuant to Rule 144) and applicable state securities
laws and, if requested by the Company, upon delivery by such Purchaser of either
an opinion of counsel of such Purchaser reasonably satisfactory to the Company
to the effect that the proposed transfer is exempt from or does not require
registration under the Securities Act and applicable state securities laws or a
representation letter of such Purchaser reasonably satisfactory to the Company
setting forth a factual basis for concluding that such proposed transfer is
exempt from or does not require registration under the Securities Act and
applicable state securities laws. Any transfer or purported transfer of the
Shares in violation of this Section 6.1 shall be void. The Company shall not
register any transfer of the Shares in violation of this Section 6.1. The
Company may, and may instruct any transfer agent for the Company, to place such
stop transfer orders as may be required on the transfer books of the Company in
order to ensure compliance with the provisions of this Section 6.1.

         6.2. Legends.

               (a) To the extent applicable, each certificate or other document
evidencing the Shares, the Warrant Shares, the Conversion Shares and the
Dividend Shares shall be endorsed with the legend set forth below, and each
Purchaser covenants that, except to the extent such restrictions are waived by
the Company, it shall not transfer the shares represented by any such
certificate without complying with the restrictions on transfer described in
this Agreement and the legends endorsed on such certificate:

         "THE  SHARES  EVIDENCED  HEREBY  WERE  ORIGINALLY   ISSUED  IN  A
         TRANSACTION  EXEMPT  FROM  REGISTRATION  UNDER THE UNITED  STATES
         SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  AND
         THE SHARES EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
         TRANSFERRED IN THE ABSENCE OF SUCH  REGISTRATION OR AN APPLICABLE
         EXEMPTION  THEREFROM.  EACH  PURCHASER  OF THE  SHARES  EVIDENCED
         HEREBY IS HEREBY  NOTIFIED  THAT THE SELLER MAY BE RELYING ON THE
         EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT.
         THE HOLDER OF THE SHARES  EVIDENCED HEREBY AGREES FOR THE BENEFIT
         OF THE ISSUER  THAT (A) SUCH  SHARES  MAY BE  RESOLD,  PLEDGED OR
         OTHERWISE  TRANSFERRED  ONLY (1) (a) IN THE  UNITED  STATES  TO A
         PERSON  WHO  THE  SELLER  REASONABLY   BELIEVES  IS  A  QUALIFIED
         INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
         ACT) IN A TRANSACTION  MEETING THE REQUIREMENTS OF RULE 144A, (b)
         OUTSIDE  THE  UNITED  STATES  IN  AN  OFFSHORE   TRANSACTION   IN
         ACCORDANCE  WITH  RULE 904  UNDER THE  SECURITIES  ACT,  (c) IN A
         TRANSACTION  MEETING  THE  REQUIREMENTS  OF RULE  144  UNDER  THE
         SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER  EXEMPTION FROM
         THE  REGISTRATION  REQUIREMENTS  OF THE SECURITIES ACT (AND BASED
         UPON AN OPINION OF COUNSEL IF MOTIENT  CORPORATION  SO REQUESTS),
         (2) TO  MOTIENT  CORPORATION  OR  (3)  PURSUANT  TO AN  EFFECTIVE
         REGISTRATION  STATEMENT AND, IN EACH OF (1), (2) OR (3) ABOVE, IN
         ACCORDANCE  WITH ANY APPLICABLE  SECURITIES  LAWS OF ANY STATE OF
         THE UNITED STATES OR ANY OTHER  APPLICABLE  JURISDICTION  AND (B)
         THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO NOTIFY
         ANY  PURCHASER  FROM IT OF THE  SHARES  EVIDENCED  HEREBY  OF THE
         RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."

                                       18
<PAGE>

               (b) The legend set forth in Section 6.2(a) shall be removed from
the certificates evidencing the Shares, the Warrant Shares, the Conversion
Shares and the Dividend Shares, (i) following any sale of such Shares, Warrant
Shares, Conversion Shares or Dividend Shares pursuant to Rule 144 or any
effective registration statement, or (ii) if such Shares, Warrant Shares,
Conversion Shares or Dividend Shares are eligible for sale under Rule 144(k)
(and the holder of such Shares, Warrant Shares, Conversion Shares or Dividend
Shares has submitted a written request for removal of the legend indicating that
the holder has complied with the applicable provisions of Rule 144 or such
judicial interpretation or pronouncement), or (iii) if such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the SEC) (and the
holder of such Shares, Warrant Shares, Conversion Shares or Dividend Shares has
submitted a written request for removal of the legend indicating that such
legend is not required under applicable requirements of the Securities Act
(including such judicial interpretations and pronouncements). The Company shall
cause its counsel to issue a legal opinion to the Company's transfer agent
promptly upon the occurrence of any of the events in clauses (i), (ii) or (iii)
above to effect the removal of the legend on certificates evidencing the Shares,
Warrant Shares, Conversion Shares or Dividend Shares and shall also cause its
counsel to issue a "blanket" legal opinion to the Company's transfer agent
promptly after the effective date of any registration statement covering the
resale of the Shares, Warrant Shares, Conversion Shares or Dividend Shares, if
required by the Company's transfer agent, to allow sales without restriction
pursuant to an effective registration statement. The Company agrees that at such
time as such legend is no longer required under this Section 6.2(b), it will, no
later than three (3) business days following the delivery by a Purchaser to the
Company or the Company's transfer agent of a certificate representing the
Shares, Warrant Shares, Conversion Shares or Dividend Shares issued with a
restrictive legend, deliver or cause to be delivered to such Purchaser a
certificate representing such Shares, Warrant Shares, Conversion Shares or
Dividend Shares that is free from all restrictive and other legends; provided
that in the case of removal of the legend for reasons set forth in clause (ii)
above, the holder of such Shares, Warrant Shares, Conversion Shares or Dividend
Shares has submitted a written request for removal of the legend indicating that
the holder has complied with the applicable provisions of Rule 144. The Company
may not make any notation on its records or give instructions to any transfer
agent of the Company that enlarge the restrictions on transfer set forth in this
Section.

         6.3 Publicity. The Company shall, by 8:30 a.m. Eastern time on the
first trading day following the date hereof, issue a press release, and on the
second trading day following the date hereof, file a Current Report on Form 8-K
disclosing the material terms of the transactions contemplated hereby, and with
respect to such Current Report on Form 8-K, shall file this Agreement and the
Transaction Documents as exhibits thereto. Except to the extent required by
applicable laws, rules, regulations or stock exchange requirements, neither (i)

                                       19
<PAGE>

the Company, the Subsidiaries or any of their Affiliates nor (ii) any Purchaser
or any of its Affiliates shall, without the written consent of the other, make
any public announcement or issue any press release with respect to the
transactions contemplated by this Agreement. In no event will either (i) the
Company, the Subsidiaries or any of their Affiliates or (ii) any Purchaser or
any of its Affiliates make any public announcement or issue any press release
with respect to the transactions contemplated by this Agreement without
consulting with the other party, to the extent feasible, as to the content of
such public announcement or press release.

         6.4 Material, Nonpublic Information. Except as required by law, the
Company and its directors, officers, employees and agents shall not provide any
Purchaser with any material non-public information regarding the Company or any
of the Subsidiaries at any time after the Closing, except such information as
may be required to be disclosed to certain Board members, who are affiliated
with certain Purchasers, in their capacity as directors of the Company. In the
event of a breach of the foregoing covenant following the Effective Date or in
the event that Company is legally required to make certain disclosures to any
Purchaser (and does so) following the Effective Date, then in addition to any
other remedy provided for herein, in the Transaction Documents or in equity or
at law, each Purchaser to whom information has been disclosed (whether as a
result of breach or as required by law) may request, in writing, that the
Company promptly (but in no event more than five (5) business days after the
date of such writing) publicly disclose, by press release, SEC filing, or
otherwise, an appropriate summary of the information that, in such Purchaser's
reasonable judgment, constitutes the then material non-public information. After
such five (5) business-day period, the Purchaser(s) who was or were in receipt
of such material non-public information shall be automatically authorized to
make all of the information, or any portion thereof, available to the public
generally, without incurring any liability to the Company for such disclosure.

         6.5 Filing of Information. The Company covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company pursuant to all
applicable securities laws, including the Exchange Act. At any time if the
Company is not required to file reports pursuant to such laws, it will (i)
prepare and furnish to the Purchasers and make publicly available in accordance
with paragraph (c) of Rule 144 such information as is required for the
Purchasers to sell the Shares, Warrant Shares or Conversion Shares under Rule
144 and (ii) furnish to the Purchasers and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4). The Company further covenants that it
will take such further action as any holder of Shares, Warrant Shares,
Conversion Shares and Dividend Shares may reasonably request to satisfy the
provisions of Rule 144 applicable to the issuer of securities relating to
transactions for the sale of securities pursuant to Rule 144.

         6.6 Rule 144A. The Shares are eligible for resale pursuant to Rule 144A
and will not be, at the Closing Date, of the same class as securities listed on
a national securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated interdealer quotation system.

         6.7 Depository Trust Company Eligible. The Company will use its best
efforts to permit the Shares to be eligible for clearance and settlement through

                                       20
<PAGE>

the facilities of the Depository Trust Company, and will cooperate with the
requests of the Purchasers relating thereto.

         6.8 PORTAL Market. The Company will use its best efforts to permit the
Shares to be designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
relating to trading in the PORTAL Market

         6.9 Use of Proceeds. The Company intends that the proceeds from the
sale of the Shares shall be used by the Company to (i) effect the TerreStar
Transaction, (ii) pay the Company's fees and expenses incurred in connection
with this offering, (iii) pay the Company's fees and expenses incurred by the
Company in connection with the TerreStar Transaction, (iv) pay the Broker Fees
to Tejas and Deutsche Bank, (v) repurchase shares of Common Stock from certain
of the Company's stockholders and (vi) for other general corporate and working
capital purposes. For purposes of clarity, the Company has entered into a
non-binding term sheet relating to the TerreStar Transaction. The consummation
of the TerreStar Transaction is subject to the negotiation of definitive
transaction documents, the completion of closing conditions, and numerous other
contingencies, and requires the Company and other parties to the transaction to
obtain certain governmental and regulatory approvals. The TerreStar Transaction
may never occur. In the event the TerreStar Transaction is not consummated, the
Company will use the proceeds from the sale of the Shares for the other purposes
set forth in this Section 6.9.

         6.10 Integration. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Shares in a manner that would require the registration under the
Securities Act of the sale of the Shares or the issuance of the Warrants, the
Warrant Shares, the Dividend Shares or the Conversion Shares to the Purchasers.

         6.11 Reservation of Common Stock for Issuance; Listing of Shares. The
Company agrees to reserve from its duly authorized capital stock (i) the total
number of shares of Series A Preferred Stock issuable upon execution of this
Agreement and (ii) the total number of shares of Common Stock issuable upon
conversion of the Series A Preferred Stock and upon the exercise in full of the
Warrants. From time to time and prior to any declaration by the Board of a
dividend on the shares of Series A Preferred payable in Common Stock, the
Corporation will reserve a sufficient number of shares of Common Stock necessary
to pay such dividend. The Company agrees that at any time, if and when its
shares of Common Stock are listed on NASDAQ, that it will use reasonable efforts
to promptly list and qualify the Warrant Shares and Conversion Shares and, prior
to the declaration of dividends on the shares of Series A Preferred payable in
shares of Common Stock, shares of Common Stock issuable as such dividend for
trading on NASDAQ.

         6.12 Required Approvals. As promptly as practicable after the date of
this Agreement, the Company shall make, or cause to be made, all filings with
any governmental or administrative agency or any other Person necessary to
consummate the transactions contemplated hereby.

     7. Indemnification.

                                       21
<PAGE>

         7.1 By the Company. The Company agrees to indemnify, defend and hold
harmless each Purchaser and its Affiliates and their respective officers,
directors, agents, employees, subsidiaries, partners, members and controlling
persons (collectively, the "Purchaser Indemnitees") to the fullest extent
permitted by law from and against any and all claims, losses, liabilities,
damages, deficiencies, judgments, assessments, fines, settlements, costs or
expenses (including interest, penalties and reasonable fees, disbursements and
other charges of counsel) (collectively, "Losses") based upon, arising out of or
otherwise in respect of any breach by the Company of any representation,
warranty, covenant or agreement of the Company contained in this Agreement or in
the Transaction Documents, or for any Losses claimed by Tejas or any other
broker or placement agent.

         7.2 Claims. All claims for indemnification by a Purchaser Indemnitee
pursuant to this Section 7 shall be made as follows:

               (a) If a Purchaser Indemnitee has incurred or suffered Losses for
which it is entitled to indemnification under this Section 7, then such
Purchaser Indemnitee shall give prompt written notice of such claim (a "Claim
Notice") to the Company. Each Claim Notice shall state the amount of claimed
Losses (the "Claimed Amount"), if known, and the basis for such claim.

               (b) Within 30 days after delivery of a Claim Notice, the Company
(the "Indemnifying Party") shall provide to each Purchaser Indemnitee (the
"Indemnified Party"), a written response (the "Response Notice") in which the
Indemnifying Party shall: (i) agree that all of the Claimed Amount is owed to
the Indemnified Party, (ii) agree that part, but not all, of the Claimed Amount
(the "Agreed Amount") is owed to the Indemnified Party, or (iii) contest that
any of the Claimed Amount is owed to the Indemnified Party. The Indemnifying
Party may contest the payment of all or a portion of the Claimed Amount only
based upon a good faith belief that all or such portion of the Claimed Amount
does not constitute Losses for which the Indemnified Party is entitled to
indemnification under this Section 7. If no Response Notice is delivered by the
Indemnifying Party within such 30-day period, then the Indemnifying Party shall
be deemed to have agreed that all of the Claimed Amount is owed to the
Indemnified Party.

               (c) If the Indemnifying Party in the Response Notice agrees (or
is deemed to have agreed) that all of the Claimed Amount is owed to the
Indemnified Party, then the Indemnifying Party shall owe to the Indemnified
Party an amount equal to the Claimed Amount to be paid in the manner set forth
in this Section 7. If the Indemnifying Party in the Response Notice agrees that
part, but not all, of the Claimed Amount is owed to the Indemnified Party, then
the Indemnifying Party shall owe to the Indemnified Party an amount equal to the
agreed amount set forth in such Response Notice to be paid in the manner set
forth in this Section 7. The parties agree that the foregoing shall not be
deemed to provide that the Indemnifying Party is entitled to make a binding
determination regarding any disputed amounts owed to an Indemnified Party,
unless such Indemnified Party accepts and agrees to such determination, and both
the Indemnified Party and Indemnifying Party shall retain all rights and
remedies available to such party hereunder.

                                       22
<PAGE>

               (d) No delay on the part of the Indemnified Party in notifying
the Indemnifying Party shall relieve the Indemnifying Party of any liability or
obligation hereunder except to the extent of any actual prejudice caused by or
arising out of such delay.

         7.3. Payment of Claims. An Indemnifying Party shall make payment of any
portion of any Claimed Amount that such Indemnifying Party has agreed in a
Response Notice that it owes to an Indemnified Party, or that such Indemnifying
Party is deemed to have agreed it owes to such Indemnifying Party, said payment
to be made within thirty (30) days after such Response Notice is delivered by
such Indemnifying Party or should have been delivered by such Indemnifying
Party, as the case may be.

         7.4. Limitations.

               (a) Time for Claims. No Indemnifying Party will be liable for any
Losses hereunder arising out of a breach of representation or warranty unless a
written claim for indemnification is given by the Indemnified Party to the
Indemnifying Party on or prior to the third anniversary of the date on which the
registration statement covering the resale of the Shares, Conversion Shares and
Warrant Shares initially became effective.

               (b) Maximum Amount. Notwithstanding anything contained herein to
the contrary, no Indemnifying Party will be liable for any Losses to any
Purchaser Indemnitee hereunder in excess of the portion of the aggregate
purchase price hereunder actually paid by the related Purchaser.

         7.5 Applicability; Exclusivity. Notwithstanding any term to the
contrary in this Section 7, the indemnification and contribution provisions of
the Registration Rights Agreement shall govern any claim made with respect to
registration statements filed pursuant thereto or sales made thereunder. The
parties hereby acknowledge and agree that in addition to remedies of the parties
hereto in respect of any and all claims relating to any breach or purported
breach of any representation, warranty, covenant or agreement that is contained
in this Agreement pursuant to the indemnification provisions of this Section 7,
all parties shall always retain the right to pursue and obtain injunctive relief
in addition to any other rights or remedies hereunder.

     8. Amendments to Prior Purchase Agreements. To the extent a Purchaser is a
"Purchaser" pursuant to the Common Stock Purchase Agreement dated April 7, 2004
by and among the Company and the Purchasers listed on Schedule 1 thereto (the
"First PIPE Purchase Agreement"), a "Purchaser" pursuant to the Securities
Purchase Agreement dated July 1, 2004 by and among the Company and the
Purchasers listed on Schedule 1 thereto (the "Second PIPE Purchase Agreement")
and/or a "Purchaser" pursuant to the Securities Purchase Agreement dated
November 12, 2004 by and among the Company and the Purchasers listed on Schedule
1 thereto (the "Third PIPE Purchase Agreement" and, together with the First PIPE
Purchase Agreement and the Second PIPE Purchase Agreement, the "Prior Purchase
Agreements"), such Purchaser hereby agrees to amend each of the Prior Purchase
Agreements as follows:

         8.1 First PIPE Purchase Agreement. The First PIPE Purchase Agreement is

                                       23
<PAGE>

amended by adding the following clause (d) at the end of Section 6.9: "(d)
Notwithstanding the foregoing provisions of this Section 6.9, the rights
provided by this Section 6.9 shall not apply to a Purchaser with respect to (i)
the Company's proposed offering of its Series A Cumulative Convertible Preferred
Stock in April 2005 or (ii) any offering of New Securities made by the Company
at such time as all Shares then held by such Purchaser may be sold by the
Purchaser pursuant to an effective registration statement under the Securities
Act or through any available exemption from such registration requirements."

         8.2 Second PIPE Purchase Agreement. The Second PIPE Purchase Agreement
is amended by adding the following clause (d) at the end of Section 6.9: "(d)
Notwithstanding the foregoing provisions of this Section 6.9, the rights
provided by this Section 6.9 shall not apply to a Purchaser with respect to (i)
the Company's proposed offering of its Series A Cumulative Convertible Preferred
Stock in April 2005 or (ii) any offering of New Securities made by the Company
at such time as all Shares then held by such Purchaser may be sold by the
Purchaser pursuant to an effective registration statement under the Securities
Act or through any available exemption from such registration requirements."

         8.3 Third PIPE Purchase Agreement. The Third PIPE Purchase Agreement is
amended by deleting Sections 6.6 and 6.9 in their entirety.

     9. Miscellaneous Provisions.

         9.1 Rights Cumulative. Each and all of the various rights, powers and
remedies of the parties shall be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may have at
law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.

         9.2 Pronouns. All pronouns or any variation thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person, persons, entity or entities may require.

         9.3 Notices.

               (a) Any notices, reports or other correspondence (hereinafter
collectively referred to as "correspondence") required or permitted to be given
hereunder shall be given in writing and shall be deemed given if sent by
certified or registered mail (return receipt requested), overnight courier or
telecopy (with confirmation of receipt), or delivered by hand to the party to
whom such correspondence is required or permitted to be given hereunder. An
electronic communication ("Electronic Notice") shall be deemed written notice
for purposes of this Section 9.3 if sent with return receipt requested to the
electronic mail address specified by the receiving party either in this Section
9.3 or on Schedule 1 hereto. Electronic Notice shall be deemed received at the
time the party sending Electronic Notice receives verification of receipt by the
receiving party. Any party who does not wish to receive correspondence as
Electronic Notice shall include such request on Schedule 1 hereto and shall be
entitled to receive all correspondence in non-electronic form.

                                       24
<PAGE>

               (b) All correspondence to the Company shall be addressed as
follows:

Motient Corporation 300 Knightsbridge Parkway Lincolnshire, IL 60069 Attention:
Christopher Downie, Executive Vice President and Chief Operating Officer,
Facsimile: (847) 478-4810, Chris.Downie@Motient.com, with copies to:

                               Motient Corporation
                            300 Knightsbridge Parkway
                             Lincolnshire, IL 60069
                           Attention: General Counsel
                            Facsimile: (847) 478-4810
                           Robert.Macklin@Motient.com

                                      -and-

                                Andrews Kurth LLP
                              450 Lexington Avenue
                            New York, New York 10017
                        Attention: Paul Silverstein, Esq.
                            Facsimile: (212) 850-2929
                          psilverstein@andrewskurth.com

               (c) All correspondence to the Purchasers shall be addressed
pursuant to the contact information set forth on Schedule 1 attached hereto.

               (d) Any entity may change the address to which correspondence to
it is to be addressed by notification as provided for herein.

         9.4 Captions. The captions and paragraph headings of this Agreement
are solely for the convenience of reference and shall not affect its
interpretation.

         9.5 Severability. Should any part or provision of this Agreement be
held unenforceable or in conflict with the applicable laws or regulations of any
jurisdiction, the invalid or unenforceable part or provisions shall be replaced
with a provision which accomplishes, to the extent possible, the original
business purpose of such part or provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the parties
hereto.

         9.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal and substantive laws of the State of New York and
without regard to any conflicts of laws concepts which would apply the
substantive law of some other jurisdiction.

         9.7 Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or be construed as, a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.

                                       25
<PAGE>

         9.8 Assignment. The rights and obligations of any party hereto shall
inure to the benefit of and shall be binding upon the authorized successors and
permitted assigns of such party. The Company may not assign this Agreement or
any rights or obligations hereunder without the prior written consent of
Purchasers who hold a majority of the outstanding Shares (the "Majority
Purchasers"). Each Purchaser may assign or transfer any or all of its rights
under this Agreement to any Person provided that such assignee or transferee
agrees in writing to be bound, with respect to the transferred Shares, Warrant
Shares, Dividend Shares and Conversion Shares, by the provisions hereof that
apply to such assigning or transferring Purchaser; whereupon such assignee or
transferee shall be deemed to be a "Purchaser" for all purposes of this
Agreement.

         9.9 Survival. The respective representations and warranties given by
the Company and the Purchasers herein shall survive the Closing Date and the
consummation of the transactions contemplated herein for a period of time equal
to the time for which indemnification may be sought by the Purchasers pursuant
to Section 7 hereof, without regard to any investigation made by any party. The
respective covenants and agreements agreed to by the Company and the Purchasers
hereto shall survive the Closing Date and the consummation of the transactions
contemplated herein in accordance with their respective terms and conditions.

         9.10 Entire Agreement. This Agreement, the Registration Rights
Agreement and the Warrants constitute the entire agreement between the parties
hereto respecting the subject matter hereof and supersedes all prior agreements,
negotiations, understandings, representations and statements respecting the
subject matter hereof, whether written or oral.

         9.11 Amendments. Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provisions of this Agreement
shall be effective only if made or given in writing and signed by the Company
and the Majority Purchasers; provided that any amendment, supplement,
modification or waiver that is materially and disproportionately adverse to any
particular Purchaser (as compared to all Purchasers as a group) shall require
the consent of such Purchaser.

         9.12 No Third Party Rights. This Agreement is intended solely for the
benefit of the parties hereto and is not intended to confer any benefits upon,
or create any rights in favor of, any Person (including, without limitation, any
stockholder or debt holder of the Company) other than the parties hereto;
provided, that each of the Purchaser Indemnitees that are not Purchasers are
entitled to all rights and benefits as third party beneficiaries of Section 7 of
this Agreement.

         9.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document. The parties hereto confirm
that any facsimile copy of another party's executed counterpart of this
Agreement (or its signature page thereof) will be deemed to be an executed
original thereof.

                                       26
<PAGE>

         9.14 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under this Agreement and any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under this Agreement or any Transaction Document. Nothing
contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated hereby or by the Transaction Documents and the Company acknowledges
that the Purchasers are not acting in concert or as a group with respect to such
obligations or the transactions contemplated hereby or by the Transaction
Documents. Each Purchaser confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each Purchaser shall be entitled to independently protect
and enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.

                            [Signature Pages Follow]

                                       27
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Securities Purchase
Agreement under seal as of the day and year first above written.

                    MOTIENT CORPORATION

                    By:   /s/ Christopher Downie
                          ------------------------------------
                          Christopher Downie,
                          Executive Vice President and Chief
                          Operating Officer

                          Glenview Capital Partners, L.P.
                          By:    /s/ Richard Battera
                                 -----------------------------------------------
                          Name:  Richard Battera
                          Title: Managing Member of Glenview Capital Management

                          Glenview Institutional Partners, L.P.
                          By:    /s/ Richard Battera
                                 -----------------------------------------------
                          Name:  Richard Battera
                          Title: Managing Member of Glenview Capital Management

                          Glenview Capital Master Fund, Ltd.
                          By:    /s/ Richard Battera
                                 -----------------------------------------------
                          Name:  Richard Battera
                          Title: Managing Member of Glenview Capital Management

                          GCM Little Arbor Institutional Partners, L.P.
                          By:    /s/ Richard Battera
                                 -----------------------------------------------
                          Name:  Richard Battera
                          Title: Managing Member of Glenview Capital Management

                          GCM Little Arbor Master Fund, Ltd.
                          By:    /s/ Richard Battera
                                 -----------------------------------------------
                          Name:  Richard Battera
                          Title: Managing Member of Glenview Capital Management

                          OZ Master Fund, Ltd.
                          By:    /s/ Joel Frank
                                 -----------------------------------------------
                          Name:  Joel Frank
                          Title: Member and CFO

                          Fleet Maritime, Inc.
                          By:    /s/ Joel Frank
                                 -----------------------------------------------
                          Name:  Joel Frank
                          Title: Member and CFO

                          Highland Equity Focus Fund, L.P.
                          By:    /s/ James Dondero
                                 -----------------------------------------------
                          Name:  James Dondero
                          Title: President Highland Capital Management, L.P.

               [SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

<PAGE>

                          Highland Crusader Offshore Partners, L.P.
                          By:    Highland Capital Management, L.P.
                          By:    /s/ James Dondero
                                 -----------------------------------------------
                          Name:  James Dondero
                          Title: President Highland Capital Management, L.P.

                          Highland Capital Management Services, Inc.
                          By:    /s/ James Dondero
                                 -----------------------------------------------
                          Name:  James Dondero
                          Title: President Highland Capital Management, L.P.

                          Highland Capital Management L.P.
                          By:    /s/ James Dondero
                                 -----------------------------------------------
                          Name:  James Dondero
                          Title: President Highland Capital Management, L.P.

                          Greywolf Capital Partners II LP
                          By:    /s/ John Santz
                                 -----------------------------------------------
                          Name:  John Santz
                          Title: Partner

                          Greywolf Capital Overseas Fund
                          By:    /s/ John Santz
                                 -----------------------------------------------
                          Name:  John Santz
                          Title: Partner

                          York Capital Management, L.P.
                          By:    /s/ Adam J. Sanler
                                 -----------------------------------------------
                          Name:  Adam J. Sanler
                          Title: CFO

                          York Select, L.P.
                          By:    /s/ Adam J. Sanler
                                 -----------------------------------------------
                          Name:  Adam J. Sanler
                          Title: CFO

                          York Investment Limited
                          By:    /s/ Adam J. Sanler
                                 -----------------------------------------------
                          Name:  Adam J. Sanler
                          Title: CFO of its Investment Manager

               [SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

<PAGE>

                          York Select Unit Trust
                          By:    /s/ Adam J. Sanler
                                 -----------------------------------------------
                          Name:  Adam J. Sanler
                          Title: CFO of its Investment Manager

                          York Credit Opportunities Fund, L.P.
                          By:    /s/ Name
                                 -----------------------------------------------
                          Name:  Name
                          Title: Senior Managing Director

                          York Global Value Partners, L.P.
                          By:    /s/ Name
                                 -----------------------------------------------
                          Name:  Name
                          Title: Senior Managing Director

                          York/Green Capital Partners, L.P.
                          By:    /s/ Adam J. Sanler
                                 -----------------------------------------------
                          Name:  Adam J. Sanler
                          Title: CFO

                          Rockbay Capital Institutional Fund, LLC
                          By:    /s/ Atul Khanna
                                 -----------------------------------------------
                          Name:  Atul Khanna
                          Title: CEO of Rockbay Capital Advisors, Inc.

                          Rockbay Capital Offshore Fund, Ltd.
                          By:    /s/ Atul Khanna
                                 -----------------------------------------------
                          Name:  Atul Khanna
                          Title: CEO of Rockbay Capital Advisors, Inc.

                          LC Capital Master Fund, Ltd.
                          By:    /s/ Richard F. Conway
                                 -----------------------------------------------
                          Name:  Richard F. Conway
                          Title: Director

                          Strome Offshore Ltd.
                          By:    /s/ Mark E. Strome
                                 -----------------------------------------------
                          Name:  Mark E. Strome
                          Title: Director

               [SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

<PAGE>

                          Strome Alpha Fund, L.P.
                          By:    /s/ Mark E. Strome
                                 -----------------------------------------------
                          Name:  Mark E. Strome
                          Title: General Partner

                          Millennium Partners, L.P.
                          By:    Millenium Management, L.L.C.
                          By:    /s/ Terry Feeney
                                 -----------------------------------------------
                          Name:  Terry Feeney
                          Title: Chief Operating Officer

                          Goldman Sachs & Co.
                          By:    /s/ Albert Dombrowski
                                 -----------------------------------------------
                          Name:  Albert Dombrowski
                          Title: Authorized Signatory

                          Jana Master Fund, Ltd.
                          By:    /s/ Mark Lehmann
                                 -----------------------------------------------
                          Name:  Mark Lehmann
                          Title: Partner

                          Lyxor/Jana Partners
                          By:    Lyxor/Jana Partners
                                 -----------------------------------------------
                          Name:  Joel Brebbia
                          Title: CFO

                          Ore Hill Hub Fund, Ltd.
                          By:    /s/ Frederick J. Wahl
                                 -----------------------------------------------
                          Name:  Frederick J. Wahl
                          Title: Managing Member

                          Portfolio Logic LLC
                          By:    /s/ Jeffrey D. Zients
                                 -----------------------------------------------
                          Name:  Jeffrey D. Zients
                          Title: Managing Member

                          Eton Park Fund, L.P.
                          By:    /s/ Stu Hendel
                                 -----------------------------------------------
                          Name:  Stu Hendel
                          Title: COO

               [SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

<PAGE>

                          Eton Park Master Fund, Ltd.
                          By:    /s/ Stu Hendel
                                 -----------------------------------------------
                          Name:  Stu Hendel
                          Title: COO

                          Loeb Partners Corp.
                          By:    /s/ Name
                                 -----------------------------------------------
                          Name:  Name
                          Title: Vice President

                          Long Meadow Holdings, LP
                          By:    /s/ Johnathan W. Old
                                 -----------------------------------------------
                          Name:  Johnathan W. Old
                          Title: Managing Member of Meadow Investment LLC

                          Stanfield Offshore Leveraged Assets, Ltd.
                          By:    Stanfield Capital Partners, LLC
                          By:    /s/ Chris Pucillo
                                 -----------------------------------------------
                          Name:  Chris Pucillo
                          Title: Portfolio Manager and Partner

                          Harbert Distressed Investment Master Fund, Ltd.
                          By:    HMC Distressed Investment Offshore Manager, LLC
                          By:    /s/ Name
                                 -----------------------------------------------
                          Name:  Name
                          Title: Vice President

                          Alpha US Sub Fund VI, LLC
                          By:    Harbert Fund Advisors, Inc.
                          By:    /s/ Name
                                 -----------------------------------------------
                          Name:  Name
                          Title: Vice President

               [SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

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