Document:

Exhibit 10.30

Exhibit 10.30

SIRIUS XM RADIO 401(k) SAVINGS PLAN

(January 1, 2009 Restatement)

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	PREAMBLE
	 	 	1	 
	 
	 	 	 	 
	ARTICLE I DEFINITIONS AND INTERPRETATION
	 	 	2	 
	 
	 	 	 	 
	1.1 Plan Definitions
	 	 	 2	 
	1.2 Interpretation
	 	 	11	 
	 
	 	 	 	 
	ARTICLE II SERVICE
	 	 	12	 
	 
	 	 	 	 
	2.1 Special Definitions
	 	 	12	 
	2.2 Crediting of Hours of Service
	 	 	13	 
	2.3 Crediting of “Continuous Service”
	 	 	13	 
	2.4 Crediting Eligibility Service
	 	 	13	 
	2.5 Vesting Service
	 	 	13	 
	2.6 Crediting of Service on Transfer or Amendment
	 	 	14	 
	2.7 Crediting of Service to Leased Employees
	 	 	14	 
	 
	 	 	 	 
	ARTICLE III ELIGIBILITY
	 	 	15	 
	 
	 	 	 	 
	3.1 Eligibility
	 	 	15	 
	3.2 Transfers of Employment
	 	 	15	 
	3.3 Reemployment
	 	 	15	 
	3.4 Notification Concerning New Eligible Employees
	 	 	15	 
	3.5 Effect and Duration
	 	 	16	 
	 
	 	 	 	 
	ARTICLE IV 401(K) CONTRIBUTIONS
	 	 	17	 
	 
	 	 	 	 
	4.1 401(k) Contributions
	 	 	17	 
	4.2 Amount of 401(k) Contributions
	 	 	17	 
	4.3 Catch-Up 401(k) Contributions
	 	 	17	 
	4.4 Contributions Limited to Effectively Available Compensation
	 	 	18	 
	4.5 Amendments to Reduction Authorization
	 	 	18	 
	4.6 Suspension of 401(k) Contributions
	 	 	18	 
	4.7 Resumption of 401(k) Contributions
	 	 	18	 
	4.8 Delivery of 401(k) Contributions
	 	 	19	 
	4.9 Vesting of 401(k) Contributions
	 	 	19	 
	 
	 	 	 	 
	ARTICLE V AFTER-TAX AND ROLLOVER CONTRIBUTIONS
	 	 	20	 
	 
	 	 	 	 
	5.1 No After-Tax Contributions
	 	 	20	 
	5.2 Rollover Contributions
	 	 	20	 
	5.3 Direct Rollovers to Plan
	 	 	20	 
	5.4 Participant Rollovers to Plan
	 	 	21	 
	5.5 Restrictions on Rollover Contributions
	 	 	21	 
	5.6 Vesting of Rollover Contributions
	 	 	21	 

 

i

 

	 	 	 	 	 
	ARTICLE VI EMPLOYER CONTRIBUTIONS
	 	 	22	 
	 
	 	 	 	 
	6.1 Contribution Period
	 	 	22	 
	6.2 Nonelective Contributions
	 	 	22	 
	6.3 Allocation of Nonelective Contributions
	 	 	22	 
	6.4 Amount and Allocation of Regular Matching Contributions
	 	 	22	 
	6.5 Additional Discretionary Matching Contributions
	 	 	23	 
	6.6 Limits on Matching Contributions
	 	 	23	 
	6.7 True Up Matching Contributions
	 	 	23	 
	6.8 Verification of Amount of Employer Contributions by the Sponsor
	 	 	24	 
	6.9 Payment of Employer Contributions
	 	 	24	 
	6.10 Allocation Requirements for Employer Contributions
	 	 	24	 
	6.11 Vesting of Employer Contributions
	 	 	25	 
	6.12 100% Vesting Events
	 	 	25	 
	6.13 Election of Former Vesting Schedule
	 	 	26	 
	6.14 Forfeitures to Reduce Employer Contributions
	 	 	26	 
	 
	 	 	 	 
	ARTICLE VII LIMITATIONS ON CONTRIBUTIONS
	 	 	27	 
	 
	 	 	 	 
	7.1 Definitions
	 	 	27	 
	7.2 Code Section 402(g) Limit
	 	 	35	 
	7.3 Distribution of “Excess Deferrals”
	 	 	36	 
	7.4 Limitation on 401(k) Contributions of Highly Compensated
Employees – ADP Test
	 	 	36	 
	7.5 Determination and Allocation of “Excess Contributions”
Among Highly Compensated Employees
	 	 	38	 
	7.6 Treatment of “Excess Contributions”
	 	 	39	 
	7.7 Limitation on Contributions of Highly Compensated Employees
– ACP Test
	 	 	39	 
	7.8 Determination and Allocation of Excess Aggregate
Contributions Among Highly Compensated Employees
	 	 	41	 
	7.9 Treatment of “Excess Aggregate Contributions”
	 	 	42	 
	7.10 Treatment of Forfeited Matching Contributions
	 	 	42	 
	7.11 Determination of Income or Loss
	 	 	43	 
	7.12 Code Section 415 Limitations on Crediting of Contributions
and Forfeitures
	 	 	43	 
	7.13 Application of Code Section 415 Limitations Where
Participant is Covered Under Other Qualified Defined Contribution Plan
	 	 	44	 
	7.14 Scope of Limitations
	 	 	45	 
	 
	 	 	 	 
	ARTICLE VIII TRUST FUNDS AND ACCOUNTS
	 	 	46	 
	 
	 	 	 	 
	8.1 General Fund
	 	 	46	 
	8.2 Investment Funds
	 	 	46	 
	8.3 Loan Investment Fund
	 	 	46	 
	8.4 Employer Stock Investment Fund
	 	 	46	 
	8.5 Income on Trust
	 	 	47	 
	8.6 Accounts
	 	 	47	 
	8.7 Sub-Accounts
	 	 	47	 

 

ii

 

	 	 	 	 	 
	ARTICLE IX LIFE INSURANCE CONTRACTS
	 	 	48	 
	 
	 	 	 	 
	9.1 No Life Insurance Contracts
	 	 	48	 
	 
	 	 	 	 
	ARTICLE X DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
	 	 	49	 
	 
	 	 	 	 
	10.1 Future Contribution Investment Elections
	 	 	49	 
	10.2 Deposit of Participant Directed Contributions
	 	 	49	 
	10.3 Investment and Deposit of Certain Contributions
	 	 	49	 
	10.4 Election to Transfer Between Funds
	 	 	50	 
	10.5 404(c) Protection
	 	 	50	 
	10.6 Voting and Tendering Employer Stock
	 	 	50	 
	 
	 	 	 	 
	ARTICLE XI CREDITING AND VALUING ACCOUNTS
	 	 	52	 
	 
	 	 	 	 
	11.1 Crediting Accounts
	 	 	52	 
	11.2 Valuing Accounts
	 	 	52	 
	11.3 Plan Valuation Procedures
	 	 	52	 
	11.4 Unit Accounting Permitted
	 	 	53	 
	11.5 Finality of Determinations
	 	 	53	 
	11.6 Notification
	 	 	53	 
	 
	 	 	 	 
	ARTICLE XII LOANS
	 	 	54	 
	 
	 	 	 	 
	12.1 Application for Loan
	 	 	54	 
	12.2 Collateral for Loan
	 	 	54	 
	12.3 Reduction of Account Upon Distribution
	 	 	54	 
	12.4 Legal Requirements Applicable to Plan Loans
	 	 	55	 
	12.5 Administration of Loan Investment Fund
	 	 	56	 
	12.6 Default
	 	 	57	 
	12.7 Deemed Distribution Under Code Section 72(p)
	 	 	57	 
	
12.8
Treatment of Outstanding Balance of Loan Deemed
Distributed Under Code Section 72(p)
	 	 	 57	 
	12.9 Special Rules Applicable to Loans
	 	 	58	 
	12.10 Prior Loans
	 	 	59	 
	 
	 	 	 	 
	ARTICLE XIII WITHDRAWALS WHILE EMPLOYED
	 	 	60	 
	 
	 	 	 	 
	13.1 Non-Hardship Withdrawals of Rollover Contributions
	 	 	60	 
	13.2 Non-Hardship Withdrawals of Restricted Contributions
	 	 	60	 
	13.3 Non-Hardship Withdrawals of Nonelective Contributions
	 	 	60	 
	13.4 Non-Hardship Withdrawals of Matching Contributions
	 	 	60	 
	13.5 Special In-Service Withdrawals While On Military Leave
	 	 	60	 
	13.6 Overall Limitations on Non-Hardship Withdrawals
	 	 	61	 
	13.7 Hardship Withdrawals
	 	 	61	 
	13.8 Hardship Determination
	 	 	61	 
	13.9 Satisfaction of Necessity Requirement for Hardship Withdrawals
	 	 	62	 
	13.10 Conditions and Limitations on Hardship Withdrawals
	 	 	62	 
	13.11 Order of Withdrawal from a Participant’s Sub-Accounts
	 	 	63	 

 

iii

 

	 	 	 	 	 
	ARTICLE XIV TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
	 	 	64	 
	 
	 	 	 	 
	14.1 Termination of Employment and Settlement Date
	 	 	64	 
	14.2 Separate Accounting for Non-Vested Amounts
	 	 	64	 
	14.3 Disposition of Non-Vested Amounts
	 	 	65	 
	14.4 Treatment of Forfeited Amounts
	 	 	65	 
	14.5 Allocations of Forfeitures
	 	 	66	 
	14.6 Recrediting of Forfeited Amounts
	 	 	67	 
	 
	 	 	 	 
	ARTICLE XV DISTRIBUTIONS
	 	 	68	 
	 
	 	 	 	 
	15.1 Distributions to Participants
	 	 	68	 
	15.2 Partial Distributions to Retired or Terminated Participants
	 	 	68	 
	15.3 Distributions to Beneficiaries
	 	 	68	 
	15.4 Code Section 401(a)(9) Requirements
	 	 	68	 
	15.5 Cash Outs and Participant Consent
	 	 	70	 
	15.6 Automatic Rollover of Mandatory Distributions
	 	 	70	 
	15.7 Required Commencement of Distribution
	 	 	70	 
	15.8 Reemployment of a Participant
	 	 	70	 
	15.9 Restrictions on Alienation
	 	 	71	 
	15.10 Facility of Payment
	 	 	71	 
	15.11 Inability to Locate Payee and Non-Negotiated Checks
	 	 	71	 
	15.12 Distribution Pursuant to Qualified Domestic Relations Orders
	 	 	73	 
	 
	 	 	 	 
	ARTICLE XVI FORM OF PAYMENT
	 	 	74	 
	 
	 	 	 	 
	16.1 Form of Payment
	 	 	74	 
	16.2 Direct Rollover
	 	 	74	 
	16.3 Notice Regarding Form of Payment
	 	 	75	 
	16.4 Distribution in the Form of Employer Stock
	 	 	75	 
	 
	 	 	 	 
	ARTICLE XVII BENEFICIARIES
	 	 	76	 
	 
	 	 	 	 
	17.1 Designation of Beneficiary
	 	 	76	 
	17.2 Spousal Consent Requirements
	 	 	76	 
	17.3 Revocation of Beneficiary Designation Upon Divorce
	 	 	77	 

 

iv

 

	 	 	 	 	 
	ARTICLE XVIII ADMINISTRATION
	 	 	78	 
	 
	 	 	 	 
	18.1 Authority of the Sponsor
	 	 	78	 
	18.2 Discretionary Authority
	 	 	78	 
	18.3 Action of the Sponsor
	 	 	78	 
	18.4 Claims Review Procedure
	 	 	79	 
	18.5 Special Rules Applicable to Claims Related to Investment Errors
	 	 	80	 
	18.6 Exhaustion of Remedies
	 	 	80	 
	18.7 Qualified Domestic Relations Orders
	 	 	81	 
	18.8 Indemnification
	 	 	81	 
	18.9 Prudent Man Standard of Care
	 	 	81	 
	18.10 Actions Binding
	 	 	81	 
	 
	 	 	 	 
	ARTICLE XIX AMENDMENT AND TERMINATION
	 	 	82	 
	 
	 	 	 	 
	19.1 Amendment by Plan Sponsor
	 	 	82	 
	19.2 Amendment by Volume Submitter Practitioner
	 	 	82	 
	19.3 Limitation on Amendment
	 	 	83	 
	19.4 Termination
	 	 	83	 
	19.5 Inability to Locate Payee on Plan Termination
	 	 	84	 
	19.6 Reorganization
	 	 	85	 
	19.7 Withdrawal of an Employer
	 	 	85	 
	 
	 	 	 	 
	ARTICLE XX ADOPTION BY OTHER ENTITIES
	 	 	86	 
	 
	 	 	 	 
	20.1 Adoption by Related Companies
	 	 	86	 
	20.2 Effective Plan Provisions
	 	 	86	 
	 
	 	 	 	 
	ARTICLE XXI MISCELLANEOUS PROVISIONS
	 	 	87	 
	 
	 	 	 	 
	21.1 No Commitment as to Employment
	 	 	87	 
	21.2 Benefits
	 	 	87	 
	21.3 No Guarantees
	 	 	87	 
	21.4 Expenses
	 	 	87	 
	21.5 Precedent
	 	 	87	 
	21.6 Duty to Furnish Information
	 	 	88	 
	21.7 Merger, Consolidation, or Transfer of Plan Assets
	 	 	88	 
	21.8 Condition on Employer Contributions
	 	 	88	 
	21.9 Return of Contributions to an Employer
	 	 	88	 
	21.10 Validity of Plan
	 	 	88	 
	21.11 Trust Agreement
	 	 	89	 
	21.12 Parties Bound
	 	 	89	 
	21.13 Application of Certain Plan Provisions
	 	 	89	 
	21.14 Merged Plans
	 	 	89	 
	21.15 Transferred Funds
	 	 	90	 
	21.16 Veterans Reemployment Rights
	 	 	90	 
	21.17 Delivery of Cash Amounts
	 	 	90	 
	21.18 Written Communications
	 	 	90	 
	21.19 Trust to Trust Transfer
	 	 	91	 
	21.20 Plan Correction Procedures
	 	 	91	 

 

v

 

	 	 	 	 	 
	ARTICLE XXII TOP-HEAVY PROVISIONS
	 	 	92	 
	22.1 Definitions
	 	 	92	 
	22.2 Applicability
	 	 	93	 
	22.3 Minimum Employer Contribution
	 	 	94	 
	22.4 Exclusion of Collectively-Bargained Employees
	 	 	94	 
	FINAL 411(A) REGULATIONS COMPLIANCE APPENDIX
	 	 	96	 
	415 COMPLIANCE APPENDIX
	 	 	97	 

 

vi

 

PREAMBLE

The Sirius XM Radio 401(k) Savings Plan, originally effective as of September 1, 1998 and
heretofore known as the Sirius Satellite Radio 401(k) Savings Plan, is hereby amended and restated
in its entirety. This amendment and restatement shall be effective as of January 1, 2009. The Plan,
as amended and restated hereby, is intended to qualify as a profit-sharing plan under Code Section
401(a), and includes a cash or deferred arrangement that is intended to qualify under Code Section
401(k). The Plan is maintained for the exclusive benefit of eligible Employees and their
Beneficiaries.

Notwithstanding any other provision of the Plan to the contrary, a Participant’s vested interest in
his Account under the Plan on and after the effective date of this amendment and restatement shall
be not less than his vested interest in his account on the day immediately preceding the effective
date. Any provision of the Plan that restricted or limited withdrawals, loans, or other
distributions, or otherwise required separate accounting with respect to any portion of a
Participant’s Account immediately prior to the later of the effective date of this amendment and
restatement or the date this amendment and restatement is adopted and the elimination of which
would adversely affect the qualification of the Plan under Code Section 401(a) shall continue in
effect with respect to such portion of the Participant’s Account as if fully set forth in this
amendment and restatement.

Effective as of March 1, 2009 (the “Merger Date”), the XM Satellite Radio Inc. 401(k) Retirement
Plan (the “Merged Plan”) is merged into the Plan. All assets and liabilities of the Merged Plan are
transferred to and made a part of the Plan. Each Covered Employee who was eligible to participate
in the Merged Plan immediately prior to the Merger Date shall continue to be eligible to
participate in the Plan on and after the Merger Date. In no event shall a Participant’s vested
interest in his Sub-Account attributable to amounts transferred to the Plan from the Merged Plan
(his “transferee Sub-Account”) on and after the Merger Date be less than his vested interest in his
account under the Merged Plan immediately prior to the Merger Date. Notwithstanding any other
provision of the Plan to the contrary, a Participant’s service credited for eligibility and vesting
purposes under the Merged Plan as of the Merger Date, if any, shall be included as Eligibility and
Vesting Service under the Plan to the extent Eligibility and Vesting Service are credited under the
Plan; provided, however, that inclusion of such service shall not duplicate the Eligibility and
Vesting Service otherwise credited under the Plan for periods prior to the Merger Date.

 

1

 

ARTICLE I

DEFINITIONS AND INTERPRETATION

1.1 Plan Definitions

As used herein, the following words and phrases have the meanings hereinafter set forth, unless a
different meaning is required by the context:

An “Account” means the account maintained by the Trustee in the name of a Participant that reflects
his interest in the Trust and any Sub-Accounts maintained thereunder, as provided in Article VIII.

An “Additional Discretionary Matching Contribution” means any Matching Contribution made to the
Plan at an Employer’s discretion in addition to the Employer’s Regular Matching Contribution as
provided in Article VI, other than a True Up Matching Contribution.

The “Administrator” means the Sponsor unless the Sponsor designates another person or persons to
act as such.

An “After-Tax Contribution” means any after-tax employee contribution made by a Participant to the
Plan as may be permitted under Article V or as may have been permitted under the terms of the Plan
prior to this amendment and restatement or any after-tax employee contribution made by a
Participant to another plan that is transferred directly to the Plan.

The “Beneficiary” of a Participant means the person or persons entitled under the provisions of the
Plan to receive distribution hereunder in the event the Participant dies before receiving
distribution of his entire interest under the Plan.

A Participant’s “Benefit Payment Date” means the first day on which all events have occurred which
entitle the Participant to receive payment of his benefit.

A “Catch-Up 401(k) Contribution” means any 401(k) Contribution made on behalf of a Participant that
is in excess of an applicable Plan limit and is made pursuant to, and is intended to comply with,
Code Section 414(v).

A “Class A Employee” (Salaried or Sales Commission Employee) means any Employee who is paid on a
regular salary basis, exclusive commission basis, or regular salary plus commission basis,
including exempt or non-exempt Employees who receive a fixed rate on a payroll cycle basis
(currently 1/24th of their stated annual salary; semi-monthly), or are eligible to receive
commissions on a regular basis. Non-exempt Employees in this class may be eligible for overtime
compensation on an exception basis at a calculated hourly rate (subject to applicable State and/or
Federal law).

 

2

 

A “Class B Employee” (Per Shift, Per Show, Per Appearance, Per Hour) means any Employee who is
compensated exclusively on a “per hour,” “per shift,” “per appearance,” and/or “per show” basis,
and for which payment is not made without an approved timesheet, and is processed on the next
administratively feasible payroll.

The “Code” means the Internal Revenue Code of 1986, as amended from time to time. Reference to a
Code section includes such section and any comparable section or sections of any future legislation
that amends, supplements, or supersedes such section.

The “Compensation” of a Participant for any period means his wages, salaries, fees for professional
service, and all other amounts received for personal services actually rendered in the course of
employment with an Employer paid to him for such period for services as a Covered Employee, but
excluding (i) contributions (other than elective contributions described in Code Section 402(e)(3),
408(k)(6), 408(p)(2)(A)(i), or 457(b)) made by the Participant’s Employer to a plan of deferred
compensation (including a simplified employee pension described in Code Section 408(k) or a simple
retirement account described in Code Section 408(p)), whether or not qualified, to the extent that,
before application of the limitations of Code Section 415 to such plan, the contributions are not
includible in the gross income of the Participant for the taxable year in which contributed, (ii)
any distributions from a plan of deferred compensation, whether or not qualified, (iii) amounts
realized from the exercise of a non-qualified option or when restricted stock, a restricted stock
event or other property held by the Participant either becomes freely transferable or is no longer
subject to substantial risk of forfeiture, (iv) amounts received from the sale, exchange or other
disposition of stock acquired under a qualified stock option, (v) any other amounts that receive
special tax benefits, such as premiums for group term life insurance (but only to the extent that
the premiums are not includible in the gross income of the Participant and are not salary reduction
amounts that are described in Code Section 125), and (vi) reimbursements and other expense
allowances, fringe benefits, moving expenses, deferred compensation, and welfare benefits.

Compensation includes (i) any elective deferral, as defined in Code Section 402(g)(3), (ii) any
amount contributed or deferred by the Employer at the Participant’s election which is not
includable in the Participant’s gross income by reason of Code Section 125, 132(f)(4), or 457, and
(iii) certain contributions described in Code Section 414(h)(2) that are picked up by the employing
unit and treated as employer contributions. Such amounts shall be included in Compensation only to
the extent that they would otherwise have been included in Compensation as defined above.

If a Participant’s employment terminates, Compensation does not include amounts received by the
Participant following such termination except amounts paid within 2 1/2 months after severance from
employment if such amounts (1) would otherwise have been paid to the Participant in the course of
his employment and are regular compensation for services during the Participant’s regular working
hours, compensation for services outside
the Participant’s regular working hours (such as overtime or shift differential pay), commissions,
bonuses, or other similar compensation or (2) are payments for accrued sick, vacation or other
leave, but only if the Participant would have been able to use such leave if his employment had
continued.

 

3

 

In no event, however, shall the Compensation of a Participant taken into account under the Plan for
any Plan Year exceed the limit in effect under Code Section 401(a)(17), subject to adjustment
annually as provided in Code Sections 401(a)(17)(B) and 415(d); provided 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. If the Compensation of a Participant is determined over a period of time that
contains fewer than 12 calendar months, then the annual compensation limitation described above
shall be adjusted with respect to that Participant by multiplying the annual compensation
limitation in effect for the Plan Year by a fraction the numerator of which is the number of full
months in the period and the denominator of which is 12; provided that no proration is required for
a Participant who is covered under the Plan for less than one full Plan Year if the formula for
allocations is based on Compensation for a period of at least 12 months.

A “Contribution Period” means the period specified in Article VI for which Employer Contributions
shall be made.

A “Covered Employee” means any Employee of an Employer. Notwithstanding the foregoing, the term
“Covered Employee” shall not include the following:

	 	•	 	any individual with respect to whom an Employer does not withhold income or employment
taxes and file Form W-2 (or any replacement Form) with the Internal Revenue Service
because such individual has executed a contract, letter of agreement, or other document
acknowledging his status as an independent contractor who is not entitled to benefits
under the Plan or is otherwise not classified by his Employer as a common law employee,
even if such individual is later adjudicated to be a common law employee of his Employer,
unless and until the Employer extends coverage to such individual;

	 	•	 	any Leased Employee;

	 	•	 	any nonresident alien who does not receive United States source income;

	 	•	 	any Self-Employed Individual;

	 	•	 	any individual who is a Class B Employee; and

	 	•	 	prior to March 1, 2009, any individual who was previously employed by XM Satellite
Radio Inc.

 

4

 

The term “Covered Employee” shall include any Employee who is covered by a collective bargaining
agreement with the Employer only if and to the extent such collective bargaining agreement
expressly and unequivocally provides for coverage under the Plan.

“Disabled” means a Participant can no longer continue in the service of an Employer because of a
mental or physical condition that is likely to result in death or is expected to continue for a
period of at least 6 months. A Participant shall be considered Disabled only if the Administrator
determines he is Disabled based on a written certificate of a physician reasonably acceptable to
it.

A Participant’s “Domestic Partner” means the person with whom a Participant maintains a domestic
partnership, as determined by the Administrator. The Administrator shall determine that a
Participant maintains a domestic partnership with a person if all of the following requirements are
met:

	 	•	 	the Participant and the Participant’s partner (i) maintain an intimate, committed
relationship of mutual caring, (ii) share the same principal residence, (iii) agree to be
responsible for each other’s basic living expenses during the period of the relationship,
and (iv) are not so closely related by blood that a legal marriage between them would
otherwise be prohibited solely by reason of such blood relationship;

	 	•	 	neither the Participant nor the Participant’s partner is married to a third party;

	 	•	 	the Participant has filed a written notice with the Administrator, which the
Participant has not subsequently withdrawn or revoked, identifying the person as his or
her Domestic Partner;

	 	•	 	the Participant and the Participant’s partner have complied with all requirements, if
any, imposed by the political subdivision in which they are resident, for recognition of
domestic partner status (such as declaration or registration requirements, duration of
relationship requirements, cohabitation requirements, requirements relating to conduct of
financial or contractual obligations, etc.); and

	 	•	 	the Participant’s partner does not deny his or her status as the Participant’s Domestic
Partner or claim to be the domestic partner of, spouse of, or subject to a civil union
with any third person.

Any written statement provided by the Participant to the Administrator identifying an individual as
his Domestic Partner, other than any such declaration that has subsequently been withdrawn, shall
create a rebuttable presumption consistent with such declaration. The Administrator may rely on
such presumption unless and until a claimant presents contrary evidence to the Administrator that
the Administrator determines is clear and sufficient to rebut such presumption. The Administrator
shall have no responsibility to
inquire into the accuracy, veracity, or authenticity of any such declaration or to ascertain
whether the Participant and the Participant’s partner have complied with all the requirements of
the political subdivision in which they reside, it being the burden of any contrary claimant to
disprove such compliance.

 

5

 

For those purposes specifically identified in the Plan, a Participant’s Domestic Partner shall be
treated the same as a Participant’s Spouse.

An “Eligible Employee” means any Covered Employee who has met the eligibility requirements of
Article III to participate in the Plan.

The “Eligibility Service” of an Employee means the period or periods of service credited to him
under the provisions of Article II for purposes of determining his eligibility to participate in
the Plan as may be required under Article III.

An “Employee” means any common law employee of an Employer or a Related Company, any Self-Employed
Individual, and any Leased Employee.

An “Employer” means the Sponsor and any entity which has adopted the Plan as may be provided under
Article XX.

An “Employer Contribution” means the amount, if any, that an Employer contributes to the Plan on
behalf of its Eligible Employees in accordance with the provisions of Article VI or Article XXII
and that an Eligible Employee may not elect instead to receive in cash.

An “Enrollment Date” means the first day of the month coinciding with or immediately following the
date the Covered Employee first satisfies the requirements of Section 3.1.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
Reference to a section of ERISA includes such section and any comparable section or sections of any
future legislation that amends, supplements, or supersedes such section.

A “401(k) Contribution” means any amount contributed to the Plan on behalf of a Participant that
the Participant could elect to receive in cash, but that the Participant elects to have contributed
to the Plan in accordance with the provisions of Article IV.

The “General Fund” means a Trust Fund maintained by the Trustee as required to hold and administer
any assets of the Trust that are not allocated among any separate Investment Funds as may be
provided in the Plan or the Trust Agreement. No General Fund shall be maintained if all assets of
the Trust are allocated among separate Investment Funds.

 

6

 

A “Highly Compensated Employee” means any Covered Employee who is a “highly compensated active
employee” as defined hereunder.

A “highly compensated active employee” includes any Covered Employee who performs services for an
Employer or any Related Company during the Plan Year and who (i) was a five percent owner at any
time during the Plan Year or the “look back year” or (ii) received “compensation” from the
Employers and Related Companies during the “look back year” in excess of the dollar amount in
effect under Code Section 414(q)(1)(B)(i) adjusted pursuant to Code Section 415(d) (e.g., $80,000
for “look back years” beginning in 1997, adjusted using as the base period the calendar quarter
ending September 30, 1996) and was in the top paid group of Employees for the “look back year”. A
Covered Employee is in the top paid group of Employees if he is in the top 20 percent of the
Employees of his Employer and all Related Companies when ranked on the basis of compensation paid
during the “look back year”.

The determination of who is a Highly Compensated Employee hereunder, including determinations as to
the number and identity of Employees in the top paid group, shall be made in accordance with the
provisions of Code Section 414(q) and regulations issued thereunder.

For purposes of this definition, the following terms have the following meanings:

	 	•	 	An Employee’s “compensation” means his “415 compensation” as defined in Section 7.1.

	 	•	 	The “look back year” means the 12-month period immediately preceding the Plan Year.

An “Hour of Service” with respect to an Employee means each hour, if any, that may be credited to
him in accordance with the provisions of Article II.

An “Investment Fund” means any separate investment Trust Fund maintained by the Trustee as may be
provided in the Plan or the Trust Agreement or any separate investment fund maintained by the
Trustee, to the extent that there are Participant Sub-Accounts under such funds, to which assets of
the Trust may be allocated and separately invested.

A “Leased Employee” means any person (other than an “excludable leased employee”) who performs
services for an Employer or a Related Company (the “recipient”) (other than an employee of the
“recipient”) pursuant to an agreement between the “recipient” and any other person (the “leasing
organization”) on a substantially full-time basis for a period of at least one year, provided that
such services are performed under primary direction of or control by the “recipient”. An
“excludable leased employee” means any Leased Employee of the “recipient” who is (a) covered by a
money purchase pension plan maintained by

 

7

 

the “leasing organization” which provides for (i) a
nonintegrated employer contribution on behalf of each participant in the plan equal to at least ten percent of 415
compensation (as defined in Section 7.1), (ii) full and immediate vesting, and (iii) immediate
participation by employees of the “leasing organization” or (b) performs substantially all of his
services for the “leasing organization” or (c) whose compensation from the “leasing organization”
in each Plan Year during the four-year period ending with the Plan Year is less than $1,000.
Notwithstanding the foregoing, a person shall not be treated as an “excludable leased employee” if
Leased Employees (including any individual who would otherwise be considered an “excludable leased
employee”) constitute more than 20 percent of the “recipient’s” nonhighly compensated work force.
For purposes of this definition, contributions or benefits provided to a Leased Employee by the
“leasing organization” that are attributable to services performed for the “recipient” shall be
treated as provided by the “recipient”.

Notwithstanding the foregoing, if any person who performed services for a “recipient” pursuant to
an agreement between the “recipient” and the “leasing organization” becomes a Covered Employee, all
service performed by such person for the “recipient” shall be treated as employment with an
Employer as an Employee, even if performed on less than a full-time basis, for less than a full
year, or while an “excludable leased employee.”

A “Matching Contribution” means any Employer Contribution made to the Plan on account of a
Participant’s 401(k) Contributions as provided in Article VI. Matching Contributions include the
following:

	 	•	 	Regular Matching Contributions.

	 	•	 	True Up Matching Contributions.

	 	•	 	Additional Discretionary Matching Contributions.

A “Nonelective Contribution” means any Employer Contribution made to the Plan as provided in
Article VI that is not contingent upon a Participant’s “elective contributions” or “employee
contributions” as those terms are defined in Section 7.1. Nonelective Contributions do not include
Matching Contributions.

The “Normal Retirement Date” of an Employee means the date he attains age 65.

A “Participant” means any person who has satisfied the requirements of Article III to become an
Eligible Employee and who has an Account in the Trust.

The “Plan” means the Sirius XM Radio 401(k) Savings Plan, as from time to time in effect.

A “Plan Year” means the 12-consecutive-month period ending each December 31.

 

8

 

A “Predecessor Employer” means any company that is a predecessor organization to an Employer under
the Code, provided that the Employer maintains a plan of such predecessor organization.

A “Prior XM Contribution” means any contribution transferred to the Plan from the XM Satellite
Radio Inc. 401(k) Retirement Plan.

A “Regular Matching Contribution” means any Matching Contribution made to the Plan at the rate
specified in Article VI, other than the following:

	 	•	 	Additional Discretionary Matching Contributions.

	 	•	 	True Up Matching Contributions.

A “Related Company” means any corporation or business, other than an Employer, that would be
aggregated with an Employer for a relevant purpose under Code Section 414, including members of an
affiliated service group under Code Section 414(m), a controlled group of corporations under Code
Section 414(b), or a group of trades of businesses under common control under Code Section 414(c)
of which the adopting Employer is a member, and any other entity required to be aggregated with the
Employer pursuant to Code Section 414(o).

A Participant’s “Required Beginning Date” means the following:

	 	•	 	for a Participant who is not a “five percent owner”, April 1 of the calendar year
following the calendar year in which occurs the later of the Participant’s (i) attainment
of age 70 1/2 or (ii) retirement.

	 	•	 	for a Participant who is a “five percent owner”, April 1 of the calendar year following
the calendar year in which the Participant attains age 70 1/2.

A Participant is a “five percent owner” if he is a five percent owner, as defined in Code Section
416(i) and determined in accordance with Code Section 416, but without regard to whether the Plan
is top-heavy, for the Plan Year ending with or within the calendar year in which the Participant
attains age 70 1/2. The Required Beginning Date of a Participant who is a “five percent owner”
hereunder shall not be redetermined if the Participant ceases to be a five percent owner as defined
in Code Section 416(i) with respect to any subsequent Plan Year.

A “Rollover Contribution” means any rollover contribution to the Plan made by a Participant as may
be permitted under Article V.

The “Settlement Date” of a Participant means the date on which a Participant’s interest under the
Plan becomes distributable in accordance with Article XV.

 

9

 

The “Sponsor” means Sirius XM Radio Inc., and any successor thereto.

A Participant’s “Spouse” means the person to whom the Participant is legally married in accordance
with the laws of the State or Commonwealth in which the Participant resides.

A “Sub-Account” means any of the individual sub-accounts of a Participant’s Account that is
maintained as provided in Article VIII.

A “Transfer Contribution” means any amount transferred to the Plan on an Employee’s behalf directly
from another qualified plan pursuant to a trust to trust transfer as provided in Section 21.19.

A “True Up Matching Contribution” means any Matching Contribution made to the Plan at an Employer’s
discretion for a Plan Year that when aggregated with the Regular Matching Contributions made on a
Participant’s behalf for the Plan Year will provide the maximum Matching Contribution based on the
match rate in effect for the Plan Year taking into account the Participant’s 401(k) Contributions
and Compensation for the full Plan Year. In the event the Employer does not affirmatively elect to
make a True Up Matching Contribution for any Plan Year, the Employer shall be deemed to have
elected to not make a True Up Matching Contribution for such Plan Year.

The “Trust” means the trust, custodial accounts, annuity contracts, or insurance contracts
maintained by the Trustee under the Trust Agreement.

The “Trust Agreement” means any agreement or agreements entered into between the Sponsor and the
Trustee relating to the holding, investment, and reinvestment of the assets of the Plan, together
with all amendments thereto and shall include any agreement establishing a custodial account, an
annuity contract, or an insurance contract (other than a life, health or accident, property,
casualty, or liability insurance contract) for the investment of assets if the custodial account or
contract would, except for the fact that it is not a trust, constitute a qualified trust under Code
Section 401.

The “Trustee” means the trustee or any successor trustee which at the time shall be designated,
qualified, and acting under the Trust Agreement and shall include any insurance company that issues
an annuity or insurance contract pursuant to the Trust Agreement or any person holding assets in a
custodial account pursuant to the Trust Agreement. The Sponsor may designate a person or persons
other than the Trustee to perform any responsibility of the Trustee under the Plan, other than
trustee responsibilities as defined in ERISA Section 405(c)(3), and the Trustee shall not be liable
for the performance of such person in carrying out such responsibility except as otherwise provided
by ERISA. The term Trustee shall include any delegate of the Trustee as may be provided in the
Trust Agreement.

A “Trust Fund” means any fund maintained under the Trust by the Trustee.

 

10

 

A “Valuation Date” means the date or dates designated by the Sponsor and communicated in writing to
the Trustee for the purpose of valuing the General Fund and each Investment Fund and adjusting
Accounts and Sub-Accounts hereunder, which dates need not be uniform with respect to the General
Fund, each Investment Fund, Account, or Sub-Account; provided that the General Fund and each
Investment Fund shall be valued and each Account and Sub-Account shall be adjusted no less often
than once annually.

The “Vesting Service” of an Employee means the period or periods of service credited to him under
the provisions of Article II for purposes of determining his vested interest in his Employer
Contributions Sub-Account, if Employer Contributions are provided for under either Article VI or
Article XXII.

1.2 Interpretation

Where required by the context, the noun, verb, adjective, and adverb forms of each defined term
shall include any of its other forms. Wherever used herein, the masculine pronoun shall include the
feminine, the singular shall include the plural, and the plural shall include the singular.

 

11

 

ARTICLE II

SERVICE

2.1 Special Definitions

For purposes of this Article, the following terms have the following meanings:

The “continuous service” of an Employee means the continuous service credited to him in accordance
with the provisions of this Article.

The “employment commencement date” of an employee means the date he first completes an Hour of
Service.

A “maternity/paternity absence” means an Employee’s absence from employment with an Employer or a
Related Company because of the Employee’s pregnancy, the birth of the Employee’s child, the
placement of a child with the Employee in connection with the Employee’s adoption of the child, or
the caring for the Employee’s child immediately following the child’s birth or adoption. An
Employee’s absence from employment will not be considered a maternity/paternity absence unless the
Employee furnishes the Administrator such timely information as may reasonably be required to
establish that the absence was for one of the purposes enumerated in this paragraph and to
establish the number of days of absence attributable to such purpose.

The “reemployment commencement date” of an Employee means the first date following a “service
break” on which he again completes an Hour of Service.

A “service break” with respect to an Employee means any 12-consecutive-month period beginning on
the Employee’s “severance date” and anniversaries of his “severance date” in which he does not
complete an Hour of Service.

The “severance date” of an Employee means the earlier of (i) the date on which he retires, dies, or
his employment with all Employers and Related Companies is otherwise terminated, or (ii) the first
anniversary of the first date of a period during which he is absent from work with all Employers
and Related Companies for any other reason; provided that if he terminates employment with or is
absent from work with all Employers and Related Companies on account of service with the armed
forces of the United States, he shall not incur a “severance date” if he is eligible for
reemployment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 and
he returns to work with an Employer or a Related Company within the period during which he retains
such reemployment rights, but, if he does not return to work within such period, his “severance
date” shall be the earlier of the date which is one year after his absence commenced or the last
day of the period during which he retains such reemployment rights; and provided, further, that if
an Employee is on a “maternity/paternity absence” beyond the first anniversary of the first day of
such
absence, he shall not incur a “severance date” if he returns to employment before the second
anniversary of the first day of such absence but, if he does not return within such period, his
“severance date” shall be the second anniversary of the first date of such “maternity/paternity
absence”; and provided, further, that if an Employee is on a paid leave of absence beyond the first
anniversary of the first day of such absence, he shall not incur a “severance date” if he returns
to employment before the second anniversary of the first day of such absence but, if he does not
return within such period, his “severance date” shall be the first anniversary of the first date of
such paid leave of absence.

 

12

 

2.2 Crediting of Hours of Service

An Employee will be credited with an Hour of Service for each hour for which he is paid, or
entitled to payment, for the performance of duties for an Employer, a Predecessor Employer, or any
Related Company. Except as otherwise specifically provided with respect to Predecessor Employers,
Hours of Service shall not be credited for employment with a corporation or business prior to the
date such corporation or business becomes a Related Company.

2.3 Crediting of “Continuous Service”

An Employee shall be credited with “continuous service” for the aggregate of the periods of time
between his “employment commencement date” or any “reemployment commencement date” and the
“severance date” that next follows such “employment commencement date” or “reemployment
commencement date”; provided that an Employee who has a “reemployment commencement date” within the
12-consecutive-month period following the earlier of the first date of his absence or his
“severance date” shall be credited with “continuous service” for the period between his “severance
date” and “reemployment commencement date”.

2.4 Crediting Eligibility Service

An Employee shall be credited with Eligibility Service equal to his “continuous service”.

Eligibility Service shall be credited in full calendar months.

2.5 Vesting Service

An Employee shall be credited with Vesting Service equal to his “continuous service”. Vesting
Service shall be computed to the nearest 1/12th of a year treating each calendar month or portion
of a calendar month in which an Employee is credited with “continuous service” as 1/12th year of
Vesting Service.

 

13

 

2.6 Crediting of Service on Transfer or Amendment

Notwithstanding any other provision of the Plan to the contrary, if as a result of a Plan amendment
or a transfer from employment covered under another qualified plan maintained by an Employer or a
Related Company, the service crediting method applicable to an Employee changes between the elapsed
time method described in Treasury Regulations Section 1.410(a)-7 and the Hours of Service method
described in Department of Labor Regulations Sections 2530.200 through 2530.203, an affected
Employee shall be credited with Eligibility and Vesting Service hereunder as provided in Treasury
Regulations Section 1.410(a)-7(f)(1).

2.7 Crediting of Service to Leased Employees

To the extent required by law, a Leased Employee working for an Employer or a Related Company shall
be considered an employee of such Employer or Related Company for purposes of Eligibility and
Vesting Service crediting under the Plan, but shall not be eligible to participate in the Plan.
Such Leased Employee shall also be considered an employee of such Employer or Related Company for
purposes of applying Code Sections 401(a)(3), (4), (7), and (16), and 408(k), 415, and 416.

 

14

 

ARTICLE III

ELIGIBILITY

3.1 Eligibility

Each Covered Employee who was an Eligible Employee immediately prior to January 1, 2009 shall
continue to be an Eligible Employee on January 1, 2009.

Each other Covered Employee shall become an Eligible Employee as of the applicable Enrollment Date
upon satisfying all of the following requirements:

	(a)	 	he has been classified as a Class A Employee;
	 
	(b)	 	he has attained age 21; and
	 
	(c)	 	he has completed 1 month of Eligibility Service.

3.2 Transfers of Employment

If an Employee is transferred directly from employment with an Employer or with a Related Company
in a capacity other than as a Covered Employee to employment as a Covered Employee, he shall become
an Eligible Employee as of the later of the date he is so transferred or the date he would have
become an Eligible Employee in accordance with the provisions of Section 3.1 if he had been a
Covered Employee for his entire period of employment with the Employer or Related Company.

3.3 Reemployment

If a person who terminated employment with an Employer and all Related Companies is reemployed as a
Covered Employee and if he had been an Eligible Employee prior to his termination of employment, he
shall again become an Eligible Employee on the date he is reemployed. If such person was not an
Eligible Employee prior to his termination of employment, but was a Covered Employee prior to such
termination and had satisfied the requirements of Section 3.1 prior to such termination, he shall
become an Eligible Employee as of the later of the date he is reemployed or the date he would have
become an Eligible Employee in accordance with the provisions of Section 3.1 if he had continued
employment as a Covered Employee. Otherwise, the eligibility of a person who terminated employment
with an Employer and all Related Companies and who is reemployed by an Employer or a Related
Company to participate in the Plan shall be determined in accordance with Section 3.1 or 3.2.

3.4 Notification Concerning New Eligible Employees

Each Employer shall notify the Administrator as soon as practicable of Employees becoming Eligible
Employees as of any date.

 

15

 

3.5 Effect and Duration

Upon becoming an Eligible Employee, a Covered Employee shall be entitled to make 401(k)
Contributions to the Plan in accordance with the provisions of Article IV and receive allocations
of Employer Contributions in accordance with the provisions of Article VI (provided he meets any
applicable requirements thereunder) and shall be bound by all the terms and conditions of the Plan
and the Trust Agreement. A person shall continue as an Eligible Employee eligible to make 401(k)
Contributions to the Plan and to participate in allocations of Employer Contributions only so long
as he continues employment as a Covered Employee.

 

16

 

ARTICLE IV

401(k) CONTRIBUTIONS

4.1 401(k) Contributions

Effective as of the date he becomes an Eligible Employee, each Eligible Employee may elect, in
accordance with rules prescribed by the Administrator, to have 401(k) Contributions made to the
Plan on his behalf by his Employer as hereinafter provided. An Eligible Employee’s election shall
include his authorization for his Employer to reduce his Compensation and to make 401(k)
Contributions on his behalf. An Eligible Employee who does not make a timely election to have
401(k) Contributions made to the Plan as of the first Enrollment Date he becomes eligible to
participate shall be deemed to have elected a 0% reduction and may only change such deemed election
pursuant to the provisions of this Article for amending reduction authorizations.

401(k) Contributions on behalf of an Eligible Employee shall commence with the first payment of
Compensation made on or after the Enrollment Date on which he first becomes eligible to
participate.

4.2 Amount of 401(k) Contributions

The amount of 401(k) Contributions to be made each payroll period on behalf of an Eligible Employee
by his Employer shall be a percentage, expressed in the increments prescribed by the Administrator,
of the Eligible Employee’s Compensation of not less than 1 percent nor more than 50 percent. In the
event an Eligible Employee elects to have his Employer make 401(k) Contributions on his behalf, his
Compensation shall be reduced for each payroll period by the percentage he elects to have
contributed on his behalf to the Plan in accordance with the terms of his currently effective
reduction authorization.

4.3 Catch-Up 401(k) Contributions

An Eligible Employee who is or will be age 50 or older by the end of the taxable year may make
Catch-Up 401(k) Contributions to the Plan in excess of the limits otherwise applicable to 401(k)
Contributions under the Plan, but not in excess of the dollar limit in effect under Code Section
414(v)(2)(B)(i) for the taxable year ($5,000 for 2006). Otherwise applicable limits that do not
apply to Catch-Up 401(k) Contributions include, but are not limited to, the percentage of
Compensation limit specified in Section 4.2, the Code Section 402(g) limit described in Article
VII, the limit on 401(k) Contributions made on behalf of Highly Compensated Employees, and the Code
Section 415 limit on annual additions described in Article VII.

If the percentage of Compensation limit specified in Section 4.2 changes during the Plan Year, the
applicable limit under Section 4.2 for purposes of determining Catch-Up 401(k)
Contributions for an Eligible Employee for such Plan Year shall be the sum of the dollar amounts of
the limits applicable to the Eligible Employee for each portion of the Plan Year.

 

17

 

4.4 Contributions Limited to Effectively Available Compensation

Notwithstanding any other provision of the Plan or of an Eligible Employee’s salary reduction
authorization, in no event will 401(k) Contributions, including Catch-Up 401(k) Contributions, be
made for a payroll period in excess of an Eligible Employee’s “effectively available” Compensation.
Effectively available Compensation means the Compensation remaining after all other required
amounts have been withheld, e.g., tax withholding, withholding for contributions to a cafeteria
plan under Code Section 125, etc.

4.5 Amendments to Reduction Authorization

An Eligible Employee may elect, in the manner prescribed by the Administrator, to change the amount
of his future Compensation that his Employer contributes on his behalf as 401(k) Contributions. An
Eligible Employee may amend his reduction authorization effective as of the first day of each
month. Effective on and after January 1, 2010, in accordance with rules prescribed by the
Administrator, an Eligible Employee’s amendment to his reduction authorization will be effective as
soon as administratively feasible.

An Eligible Employee who amends his reduction authorization shall be limited to selecting an amount
of his Compensation that is otherwise permitted under this Article IV. 401(k) Contributions shall
be made on behalf of such Eligible Employee by his Employer pursuant to his properly amended
reduction authorization commencing with Compensation paid to the Eligible Employee on or after the
date such amendment is effective, until otherwise altered or terminated in accordance with the
Plan.

4.6 Suspension of 401(k) Contributions

An Eligible Employee on whose behalf 401(k) Contributions are being made may elect, in the manner
prescribed by the Administrator, to have such contributions suspended at any time by giving such
number of days advance notice of his election as the Administrator may prescribe. Any such
voluntary suspension shall take effect commencing with Compensation paid to such Eligible Employee
on or after the expiration of the required notice period and shall remain in effect until 401(k)
Contributions are resumed as hereinafter set forth.

4.7 Resumption of 401(k) Contributions

An Eligible Employee who has voluntarily suspended his 401(k) Contributions may elect, in the
manner prescribed by the Administrator, to have such contributions resumed. An
Eligible Employee may make such election at such time or times during the Plan Year as the
Administrator may prescribe, by giving such number of days advance notice of his election as the
Administrator may prescribe.

 

18

 

4.8 Delivery of 401(k) Contributions

As soon after the date an amount would otherwise be paid to an Eligible Employee as it can
reasonably be separated from Employer assets, each Employer shall cause to be delivered to the
Trustee in cash all 401(k) Contributions attributable to such amounts. In no event shall an
Employer deliver 401(k) Contributions to the Trustee on behalf of an Eligible Employee prior to the
date the Eligible Employee performs the services with respect to which the 401(k) Contribution is
being made, unless such pre-funding is to accommodate a bona fide administrative concern and is not
for the principal purpose of accelerating deductions.

4.9 Vesting of 401(k) Contributions

A Participant’s vested interest in his 401(k) Contributions Sub-Account shall be at all times 100
percent.

 

19

 

ARTICLE V

AFTER-TAX AND ROLLOVER CONTRIBUTIONS

5.1 No After-Tax Contributions

There shall be no After-Tax Contributions made to the Plan and no After-Tax Contributions may be
transferred to the Plan.

5.2 Rollover Contributions

Subject to any restrictions contained in this Article, a Covered Employee who is eligible to
receive or receives an “eligible rollover distribution,” within the meaning of Code Section
402(c)(4), or a distribution from an individual retirement account or annuity that is eligible for
rollover to the Plan in accordance with the provisions of Code Section 408(d)(3)(B) may elect to
make a Rollover Contribution to the Plan. The Administrator may require a Covered Employee to
provide it with such information as it deems necessary or desirable to show that he is entitled to
roll over such distribution to a qualified retirement plan. A Covered Employee shall make a
Rollover Contribution to the Plan by delivering or causing to be delivered to the Trustee the cash
that constitutes the Rollover Contribution amount.

A Covered Employee who makes a Rollover Contribution to the Plan before becoming an Eligible
Employee in accordance with the provisions of Article III shall be treated as a Participant for
purposes of his Rollover Contributions.

5.3 Direct Rollovers to Plan

The Plan will accept “eligible rollover distributions” that are rolled over directly to the Plan
(“direct rollovers”) from the following:

	 	•	 	a qualified plan described in Code Section 401(a) or 403(a), excluding amounts
attributable to designated Roth contributions, as described in Code Section 402A, and
after-tax employee contributions;

	 	•	 	an eligible plan under 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

	 	•	 	an individual retirement account or annuity described in Code Section 408(a) or 408(b),
excluding amounts attributable to designated Roth contributions, as described in Code
Section 402A, and after-tax employee contributions.

The Trustee may, in its discretion, accept all or a portion of a direct rollover in the form of
securities in lieu of cash, to the extent such securities are acceptable to the Trustee.

 

20

 

5.4 Participant Rollovers to Plan

The Plan will accept “eligible rollover distributions” that are first distributed to a Covered
Employee (“participant rollovers”) from the following:

	 	•	 	a qualified plan described in Code Section 401(a) or 403(a), excluding amounts
attributable to designated Roth contributions, as described in Code Section 402A, or
after-tax employee contributions;

	 	•	 	an eligible plan under 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

	 	•	 	an individual retirement account or annuity described in Code Section 408(a) or 408(b),
excluding amounts attributable to designated Roth contributions, as described in Code
Section 402A, and after-tax employee contributions.

A Covered Employee who received a distribution that he is rolling over to the Plan, must deliver
the cash constituting his Rollover Contribution to the Trustee within 60 days of receipt of the
eligible rollover distribution. Such delivery must be made in the manner prescribed by the
Administrator.

5.5 Restrictions on Rollover Contributions

Rollover Contributions to the Plan are subject to the following:

	 	•	 	the Plan shall not accept a Rollover Contribution of any promissory note attributable
to a plan loan; and

	 	•	 	a participant rollover may not include designated Roth contributions, as described in
Code Section 402A, or after-tax employee contributions.

5.6 Vesting of Rollover Contributions

A Participant’s vested interest in his Rollover Contributions Sub-Account shall be at all times 100
percent.

 

21

 

ARTICLE VI

EMPLOYER CONTRIBUTIONS

6.1 Contribution Period

The Contribution Periods for Employer Contributions shall be as follows:

	(a)	 	The Contribution Period for Regular Matching Contributions under the Plan is each
semi-monthly period.
	 
	(b)	 	The Contribution Period for True Up Matching Contributions is each Plan Year.
	 
	(c)	 	The Contribution Period for Additional Discretionary Matching Contributions is each Plan
Year.
	 
	(d)	 	The Contribution Period for Nonelective Contributions under the Plan is each Plan Year.

6.2 Nonelective Contributions

Each Employer may, in its discretion, make a Nonelective Contribution to the Plan for the
Contribution Period in an amount determined by the Employer.

6.3 Allocation of Nonelective Contributions

Any Nonelective Contribution made by an Employer for a Contribution Period shall be allocated among
its Eligible Employees during the Contribution Period who have met the allocation requirements for
Nonelective Contributions described in this Article. The allocable share of each such Eligible
Employee shall be in the ratio which his Compensation from the Employer for the Contribution Period
bears to the aggregate of such Compensation for all such Eligible Employees.

6.4 Amount and Allocation of Regular Matching Contributions

Each Employer may, in its discretion, make a Regular Matching Contribution to the Plan for each
Contribution Period on behalf of each of its Eligible Employees who has met the allocation
requirements for Regular Matching Contributions described in this Article.

The amount of any such Regular Matching Contribution with respect to similarly situated Eligible
Employees, as determined by the Employer in a non-discriminatory manner, shall be equal to a
uniform percentage, determined by the Employer, in its discretion, of the 401(k) Contributions
(other than Catch-Up 401(k) Contributions) made for the Contribution Period on behalf of such
similarly situated Eligible Employees. Notwithstanding the foregoing, the Employer may designate a
different uniform match percentage applicable to 401(k) Contributions above and below designated
levels of
Compensation, provided that the match percentage does not increase as an Eligible Employee’s 401(k)
Contributions increase.

 

22

 

6.5 Additional Discretionary Matching Contributions

In addition to its Regular Matching Contribution, each Employer may make an Additional
Discretionary Matching Contribution to the Plan for each Contribution Period on behalf of each of
its Eligible Employees who has met the allocation requirements for Additional Discretionary
Matching Contributions described in this Article. The amount of any such Additional Discretionary
Matching Contribution with respect to similarly situated Eligible Employees, as determined by the
Employer in a non-discriminatory manner, shall be equal to a uniform percentage, determined by the
Employer, in its discretion, of the 401(k) Contributions (other than Catch-Up 401(k) Contributions)
made on behalf of each such similarly situated Eligible Employee for the Contribution Period.

6.6 Limits on Matching Contributions

Notwithstanding any other provision of this Article to the contrary, the following limits apply in
determining the amount and allocation of Regular Matching Contributions with respect to an Eligible
Employee for a Contribution Period:

	(a)	 	401(k) Contributions that exceed the dollar amount and/or percentage of Compensation
specified by the Employer, in its discretion, for the Contribution Period are excluded from
the match. Compensation earned by an Eligible Employee during a Contribution Period, but prior
to the date on which the Employee first became an Eligible Employee, shall be excluded in
applying the limitation contained in this paragraph; and
	 
	(b)	 	Catch-Up 401(k) Contributions are excluded from the match.

The exclusions described above shall not apply in determining the amount and allocation of any
Additional Discretionary Matching Contribution made by an Employer.

6.7 True Up Matching Contributions

An Employer may, in its discretion, elect to make a True Up Matching Contribution on behalf of each
of its Eligible Employees during the Contribution Period who has met the allocation requirements
for True Up Matching Contributions described in this Article. Such True Up Matching Contribution
shall be in the amount which, when aggregated with the Regular Matching Contributions made with
respect to Contribution Periods within such Plan Year, will provide the maximum Matching
Contribution designated by the Employer for the Plan Year with respect to the Eligible Employee’s
401(k) Contributions for the full Plan Year.

 

23

 

6.8 Verification of Amount of Employer Contributions by the Sponsor

The Sponsor shall verify the amount of Employer Contributions to be made by each Employer in
accordance with the provisions of the Plan. Notwithstanding any other provision of the Plan to the
contrary, the Sponsor shall determine the portion of the Employer Contribution to be made by each
Employer with respect to a Covered Employee who transfers from employment with one Employer as a
Covered Employee to employment with another Employer as a Covered Employee.

6.9 Payment of Employer Contributions

Employer Contributions made for a Contribution Period shall be paid in cash or in qualifying
employer securities, as defined in ERISA Section 407(d)(5), to the Trustee within the period of
time required under the Code in order for the contribution to be deductible by the Employer in
determining its Federal income taxes for the Plan Year.

Any in kind contribution made under the terms of the Plan shall be discretionary and unencumbered.

In no event shall an Employer deliver Matching Contributions to the Trustee on behalf of an
Eligible Employee prior to the date the Eligible Employee performs the services with respect to
which the Matching Contribution is being made, unless such pre-funding is to accommodate a bona
fide administrative concern and is not for the principal purpose of accelerating deductions.

6.10 Allocation Requirements for Employer Contributions

An Eligible Employee shall be eligible to receive an allocation of Employer Contributions under
this Article only if he satisfies any requirements specified in the applicable contribution Section
and also meets the requirements of this Section.

	(a)	 	A person who was an Eligible Employee during a Contribution Period shall be eligible to
receive an allocation of Nonelective Contributions for such Contribution Period only if he is
employed as a Covered Employee on the last day of the Contribution Period.
	 
	(b)	 	A person who was an Eligible Employee at any time during a Contribution Period shall be
eligible to receive an allocation of Regular Matching Contributions for such Contribution
Period.
	 
	(c)	 	A person who was an Eligible Employee at any time during a Contribution Period shall be
eligible to receive an allocation of Additional Discretionary Matching Contributions for such
Contribution Period.

 

24

 

	(d)	 	A person who was an Eligible Employee at any time during a Contribution Period shall be
eligible to receive an allocation of True Up Matching Contributions for such Contribution
Period.

6.11 Vesting of Employer Contributions

A Participant’s vested interest in his Prior XM Contributions Sub-Account shall be at all times
100%.

A Participant’s vested interest in his Nonelective, Regular, Additional Discretionary, and True Up
Matching Contributions Sub-Accounts shall be determined in accordance with the following schedule:

	 	 	 	 	 
	Years of Vesting Service	 	Vested Interest	 
	Less than 1
	 	 	0	%
	1, but less than 2
	 	 	33	%
	2, but less than 3
	 	 	67	%
	3 or more
	 	 	100	%

6.12 100% Vesting Events

Notwithstanding any other provision of the Plan to the contrary, if a Participant is employed by an
Employer or a Related Company on his Normal Retirement Date, the date he becomes Disabled, or the
date he dies, his vested interest in his full Employer Contributions Sub-Account shall be 100%,
without regard to the number of his years of Vesting Service.

 

25

 

6.13 Election of Former Vesting Schedule

If the Sponsor adopts an amendment to the Plan that directly or indirectly affects the computation
of a Participant’s vested interest in his Employer Contributions Sub-Account, any Participant with
three or more years of Vesting Service shall have a right to have his vested interest in his
Employer Contributions Sub-Account continue to be determined under the vesting provisions in effect
prior to the amendment rather than under the new vesting provisions, unless the vested interest of
the Participant in his Employer Contributions Sub-Account under the Plan as amended is not at any
time less than such vested interest determined without regard to the amendment. A Participant shall
exercise his right under this Section by giving written notice of his exercise thereof to the
Administrator within 60 days after the latest of (i) the date he receives notice of the amendment
from the Administrator, (ii) the effective date of the amendment, or (iii) the
date the amendment is adopted. Notwithstanding the foregoing, a Participant’s vested interest in
his Employer Contributions Sub-Account on the effective date of such an amendment shall not be less
than his vested interest in his Employer Contributions Sub-Account immediately prior to the
effective date of the amendment.

6.14 Forfeitures to Reduce Employer Contributions

Notwithstanding any other provision of the Plan to the contrary, the amount of the Employer
Contribution required under this Article for a Plan Year shall be reduced by the amount of any
forfeitures occurring during the Plan Year or any prior Plan Year that are not used to pay Plan
expenses and that are applied against Employer Contributions as provided in Article VII or XIV, as
applicable.

 

26

 

ARTICLE VII

LIMITATIONS ON CONTRIBUTIONS

7.1 Definitions

For purposes of this Article, the following terms have the following meanings:

The “annual addition” with respect to a Participant for a “limitation year” means the sum of the
following amounts allocated to the Participant for the “limitation year”:

	(a)	 	all employer contributions allocated to the Participant’s account under any qualified defined
contribution plan maintained by an Employer or a Related Company, including “elective
contributions” and amounts attributable to forfeitures applied to reduce the employer’s
contribution obligation, but excluding “catch-up contributions”;
	 
	(b)	 	all “employee contributions” allocated to the Participant’s account under any qualified
defined contribution plan maintained by an Employer or a Related Company or any qualified
defined benefit plan maintained by an Employer or a Related Company if separate accounts are
maintained under the defined benefit plan with respect to such employee contributions;
	 
	(c)	 	all forfeitures allocated to the Participant’s account under any qualified defined
contribution plan maintained by the Employer or a Related Company;
	 
	(d)	 	all amounts allocated to an individual medical benefit account, as described in Code Section
415(l)(2), established for the Participant as part of a pension or annuity plan maintained by
the Employer or a Related Company;
	 
	(e)	 	if the Participant is a key employee, as defined in Code Section 419A(d)(3), all amounts
derived from contributions paid or accrued after December 31, 1985, in taxable years ending
after that date, that are attributable to post-retirement medical benefits allocated to the
Participant’s separate account under a welfare benefit fund, as defined in Code Section
419(e), maintained by the Employer or a Related Company; and

	(f)	 	all allocations to the Participant under a simplified employee pension.

A “catch-up contribution” means any elective deferral, as defined in Code Section 414(v)(2)(C),
that is treated as a catch-up contribution in accordance with the provisions of Code Section
414(v).

 

27

 

The “contribution percentage” with respect to an “eligible participant” for a particular Plan Year
means the ratio of the sum of the included contributions, described below, to the “eligible
participant’s” “test compensation” for such Plan Year. Contributions made
on behalf of an “eligible participant” for the Plan Year that are used in computing the “eligible
participant’s” “contribution percentage” include the following:

	 	•	 	Matching Contributions, except as specifically provided below; and

	 	•	 	if elected by the Sponsor, 401(k) Contributions, including Catch-Up 401(k)
Contributions, to the extent such 401(k) Contributions are not included in determining the
“eligible participant’s” “deferral percentage” for such Plan Year.

Notwithstanding the foregoing, the following Matching Contributions are not included in computing
an “eligible participant’s” “contribution percentage” for a Plan Year:

	 	•	 	Matching Contributions that are forfeited because they relate to 401(k) Contributions
that are distributed as “excess contributions”, “excess deferrals”, or because they exceed
the Code Section 402(g) limit;

	 	•	 	contributions to the Plan made pursuant to Code Section 414(u) that are treated as
Matching Contributions; and

	 	•	 	Matching Contributions that are forfeited because they relate to 401(k) Contributions
that are re-characterized as Catch-Up 401(k) Contributions.

Matching Contributions in excess of 100% of the 401(k) Contributions of an “eligible participant”
who is not a Highly Compensated Employee for a Plan Year shall not be used in computing such
“eligible participant’s” “contribution percentage” for the Plan Year to the extent that such
Matching Contributions exceed the greater of (i) 5% of the “eligible participant’s” “test
compensation” for the Plan Year or (ii) the product of 2 times the Plan’s “representative match
rate” multiplied by the “eligible participant’s” 401(k) Contributions for the Plan Year. The Plan’s
“representative match rate” is the lowest “match rate” of any “eligible participant” who is not a
Highly Compensated Employee for the Plan Year in either (i) the group consisting of half of all
“eligible participants” who are not Highly Compensated Employees for the Plan Year or (ii) the
group of all “eligible participants” who are not Highly Compensated Employees for the Plan Year and
who are employed by the Employer or a Related Company on the last day of the Plan Year and who make
401(k) Contributions for the Plan Year, whichever results in the greater amount. An “eligible
participant’s “match rate” means the Matching Contributions made on behalf of the “eligible
participant” for the Plan Year divided by the “eligible participant’s” 401(k) Contributions for the
Plan Year; provided, however, that if Matching Contributions are made at different rates for
different levels of Compensation, the “match rate” shall be determined assuming 401(k)
Contributions equal to 6% of “test compensation”.

 

28

 

To be included in computing an “eligible participant’s” “contribution percentage” for a Plan Year,
contributions must be allocated to the “eligible participant’s” Account as of a date within such
Plan Year and must be made to the Plan before the end of the 12-month
period immediately following the Plan Year to which the contributions relate. For Plan Years in
which the prior year testing method is used in applying the nondiscrimination requirements
applicable to Matching Contributions, contributions used in computing the “contribution percentage”
for the “testing year” of a non-Highly Compensated Employee must be made before the last day of the
Plan Year for which the test is being applied.

If an Employer elects to change from the current year testing method to the prior year testing
method, the following shall not be included in computing a non-Highly Compensated Employee’s
“contribution percentage” for the Plan Year immediately preceding the Plan Year in which the prior
year testing method is first effective:

	 	•	 	401(k) Contributions that were included in computing the “eligible participant’s”
“contribution percentage” under the current year method for such immediately preceding
Plan Year.

The determination of an “eligible participant’s” “contribution percentage” shall be made after any
reduction required to satisfy the Code Section 415 limitations is made as provided in this Article
VII and shall satisfy such other requirements as may be prescribed by the Secretary of the
Treasury.

The “deferral percentage” with respect to an Eligible Employee for a particular Plan Year means the
ratio of the sum of the included contributions, described below, to the Eligible Employee’s “test
compensation” for such Plan Year. Contributions made on behalf of an Eligible Employee for the Plan
Year that are used in computing the Eligible Employee’s “deferral percentage” include the
following:

	 	•	 	401(k) Contributions, except as specifically provided below.

Notwithstanding the foregoing, the following 401(k) Contributions are not included in computing an
Eligible Employee’s “deferral percentage” for a Plan Year:

	 	•	 	401(k) Contributions that are distributed to a non-Highly Compensated Employee in
accordance with the provisions of Section 7.2 because they exceed the Code Section 402(g)
limit;

	 	•	 	contributions made to the Plan pursuant to Code Section 414(u) that are treated as
401(k) Contributions;

	 	•	 	Catch-Up 401(k) Contributions, except to the extent the Eligible Employee’s 401(k)
Contributions are re-characterized as Catch-Up 401(k) Contributions as a result of a
failure to satisfy the nondiscrimination requirements applicable to 401(k) Contributions;
and

	 	•	 	401(k) Contributions that are included in determining an Eligible Employee’s
“contribution percentage” for the Plan Year.

 

29

 

To be included in computing an Eligible Employee’s “deferral percentage” for a Plan Year,
contributions must be allocated to the Eligible Employee’s Account as of a date within such Plan
Year and be made to the Plan before the end of the 12-month period immediately following the Plan
Year to which the contributions relate. For Plan Years in which the prior year testing method is
used in applying the nondiscrimination requirements applicable to 401(k) Contributions,
contributions used in computing the “deferral percentage” for the “testing year” of a non-Highly
Compensated Employee must be made before the last day of the Plan Year for which the test is being
applied.

If an Employer elects to change from the current year testing method to the prior year testing
method, the following shall not be included in computing a non-Highly Compensated Employee’s
“deferral percentage” for the Plan Year immediately preceding the Plan Year in which the prior year
testing method is first effective:

	 	•	 	401(k) Contributions that were included in computing the Eligible Employee’s
“contribution percentage” under the current year method for such immediately preceding
Plan Year.

The determination of an Eligible Employee’s “deferral percentage” shall be made after any reduction
required to satisfy the Code Section 415 limitations is made as provided in this Article VII and
shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.

An “elective contribution” means any employer contribution made to a plan maintained by an Employer
or a Related Company on behalf of a Participant in lieu of cash compensation pursuant to his
election (whether such election is an active election or a passive election) to defer under any
qualified CODA as described in Code Section 401(k), any simplified employee pension cash or
deferred arrangement as described in Code Section 402(h)(1)(B), or any plan as described in Code
Section 501(c)(18), and any contribution made on behalf of the Participant by an Employer or a
Related Company for the purchase of an annuity contract under Code Section 403(b) pursuant to a
salary reduction agreement. For purposes of applying the limitations described in this Article VII,
the term “elective contribution” includes designated Roth contributions and excludes “catch-up
contributions”.

An “elective 401(k) contribution” means any employer contribution made to a plan maintained by an
Employer or a Related Company on behalf of a Participant in lieu of cash compensation pursuant to
his election (whether such election is an active election or a passive election) to defer under any
qualified CODA as described in Code Section 401(k) including a designated Roth contribution. For
purposes of applying the limitations described in this Article VII, the term “elective 401(k)
contribution” excludes “catch-up contributions”.

An “eligible participant” means any Eligible Employee who is eligible to have 401(k) Contributions
made on his behalf (if 401(k) Contributions are taken into account in
determining “contribution percentages”), or to participate in the allocation of Matching
Contributions.

 

30

 

Notwithstanding the foregoing, the following Employees shall not be included as “eligible
participants”:

	 	•	 	Eligible Employees who are covered by a collective bargaining agreement between their
Employer and employee representatives if retirement benefits were the subject of good
faith bargaining.

An “employee contribution” means any employee after-tax contribution allocated to an Eligible
Employee’s account under any qualified plan of an Employer or a Related Company.

An “excess aggregate contribution” means any contribution made to the Plan on behalf of a
Participant that exceeds the limitations described in Section 7.7.

An “excess contribution” means any contribution made to the Plan on behalf of a Participant that
exceeds the limitations described in Section 7.4.

An “excess deferral” with respect to a Participant means that portion of a Participant’s 401(k)
Contributions, excluding Catch-Up 401(k) Contributions, for his taxable year that, when added to
amounts deferred for such taxable year under other plans or arrangements described in Code Section
401(k), 408(k), or 403(b) (other than any such plan or arrangement that is maintained by an
Employer or a Related Company and excluding any “catch-up contributions”), would exceed the dollar
limit imposed under Code Section 402(g) as in effect on January 1 of the calendar year in which
such taxable year begins and is includible in the Participant’s gross income under Code Section
402(g).

The “415 compensation” of a Participant for any “limitation year” means the Participant’s
remuneration for services, including (A) his wages, salaries, fees for professional service, and
all other amounts received (without regard to whether such amounts are paid in cash) for personal
services actually rendered in the course of employment with an Employer or a Related Company, to
the extent the amounts would have been received and includible in gross income, including, but not
limited to, commissions paid to salesperson, compensation for services on the basis of a percentage
of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements
or other expense allowances under a nonaccountable plan described in Treasury Regulations Section
1.62-2(c), (B) in case of a Participant who is an employee within the meaning of Code Section
401(c)(1), the Participant’s earned income, as described in Code Section 401(c)(2) and regulations
issued thereunder, (C) amounts described in Code Section 104(a)(3), 105(a), or 105(h), but only to
the extent such amounts are includible in the gross income of the Participant, (D) amounts paid or
reimbursed by the Employer or a Related Company for moving expenses incurred by the

 

31

 

Participant,
but only to the extent it is reasonable to believe the amounts are not deductible by the Participant under Code Section 217, (E) the value of a non-statutory option (an
option other than a statutory option, as defined in Treasury Regulations Section 1.421-1(b))
granted to the Participant by the Employer or a Related Company, but only to the extent that the
value of the option is includible in the gross income of the Participant for the taxable year in
which granted, (F) amounts includible in the gross income of the Participant upon making an
election described in Code Section 83(b), and (G) amounts that are includible in the gross income
of the Participant under the rules of Code Section 409A or 457(f)(1)(A) or because the amounts are
constructively received by the Participant. “415 compensation” excludes (i) contributions (other
than elective contributions described in Code Section 402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or
457(b)) made on behalf of the Participant by an Employer or a Related Company to a plan of deferred
compensation (including a simplified employee pension described in Code Section 408(k) or a simple
retirement account described in Code Section 408(p)), whether or not qualified, to the extent that,
before application of the limitations of Code Section 415 to such plan, the contributions are not
includible in the gross income of the Participant for the taxable year in which contributed, (ii)
any distributions from a plan of deferred compensation, whether or not qualified, (except amounts
received pursuant to an unfunded non-qualified plan in the year such amounts are includible in the
gross income of the Participant), (iii) amounts realized from the exercise of a non-qualified
option or when restricted stock or other property held by the Participant either becomes freely
transferable or is no longer subject to substantial risk of forfeiture, (iv) amounts received from
the sale, exchange or other disposition of stock acquired under a qualified stock option, (v) any
other amounts that receive special tax benefits, such as premiums for group term life insurance
(but only to the extent that the premiums are not includible in the gross income of the Participant
and are not salary reduction amounts that are described in Code Section 125), and (vi) other items
that are similar to the items listed in (i) through (v) above.

Effective for “limitation years” beginning in 2005 and thereafter, “415 compensation” does not
include amounts paid to a Participant following severance from employment unless such amounts are
paid within 2 1/2 months of the Participant’s severance from employment and (i) would otherwise have
been paid to the Participant in the course of his employment and are regular compensation for
services during the Participant’s regular working hours, compensation for services outside the
Participant’s regular working hours (such as overtime or shift differential pay), commissions,
bonuses, or other similar compensation or (ii) are payments for accrued bona fide sick, vacation or
other leave, but only if the Participant would have been able to use such leave if his employment
had continued.

“415 compensation” also includes (i) any elective deferral, as defined in Code Section 402(g)(3)
and (ii) any amount contributed or deferred by the Employer or Related Company at the Participant’s
election which is not includable in the Participant’s gross income by reason of Code Section 125,
132(f)(4), or 457.

 

32

 

In no event, however, shall the “415 compensation” of a Participant taken into account under the
Plan for any “limitation year” exceed the limit in effect under Code Section 401(a)(17) ($220,000
for “limitation years” beginning in 2006, 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 “limitation years” beginning in such calendar
year). If the “415 compensation” of a Participant is determined over a period of time that
contains fewer than 12 calendar months, then the annual compensation limitation described above
shall be adjusted with respect to that Participant by multiplying the annual compensation
limitation in effect for the Plan Year by a fraction the numerator of which is the number of full
months in the period and the denominator of which is 12; provided, however, that no proration is
required for a Participant who is covered under the Plan for fewer than 12 months.

The “gap period” means the period between the close of the Plan Year in which “excess
contributions” were made and the date the contributions are distributed.

A “limitation year” means the Plan Year.

A “matching contribution” means any employer contribution allocated to an Eligible Employee’s
account under any plan of an Employer or a Related Company solely on account of “elective
contributions” made on his behalf or “employee contributions” made by him.

A “qualified matching contribution” means any employer contribution allocated to an Eligible
Employee’s account under any plan of an Employer or a Related Company solely on account of
“elective contributions” made on his behalf or “employee contributions” made by him that is a
qualified matching contribution as defined in regulations issued under Code Section 401(k), is
nonforfeitable when made, and is distributable only as permitted in regulations issued under Code
Section 401(k).

A “qualified nonelective contribution” means any employer contribution allocated to an Eligible
Employee’s account under any plan of an Employer or a Related Company that the Participant could
not elect instead to receive in cash until distributed from the Plan, that is a qualified
nonelective contribution as defined in Code Sections 401(k) and 401(m) and regulations issued
thereunder, is nonforfeitable when made, and is distributable (other than for hardships) only as
permitted in regulations issued under Code Section 401(k).

The “test compensation” of an Eligible Employee or “eligible participant” for any Plan Year means
the following, unless the Administrator elects to substitute a different definition of compensation
that satisfies the requirements of Code Section 414(s): his wages, salaries, fees for professional
service, and all other amounts received for personal services actually rendered in the course of
employment with an Employer or a Related Company for such Plan Year, but excluding (i)
contributions (other than

 

33

 

elective contributions described in Code Section 402(e)(3), 408(k)(6),
408(p)(2)(A)(i), or 457(b)) made on behalf of the Participant by an Employer or a Related Company to a plan of deferred
compensation (including a simplified employee pension described in Code Section 408(k) or a simple
retirement account described in Code Section 408(p)), whether or not qualified, to the extent that,
before application of the limitations of Code Section 415 to such plan, the contributions are not
includible in the gross income of the Participant for the taxable year in which contributed, (ii)
any distributions from a plan of deferred compensation, whether or not qualified, (except amounts
received pursuant to an unfunded non-qualified plan in the year such amounts are includible in the
gross income of the Participant), (iii) amounts realized from the exercise of a non-qualified
option or when restricted stock or other property held by the Participant either becomes freely
transferable or is no longer subject to substantial risk of forfeiture, (iv) amounts received from
the sale, exchange or other disposition of stock acquired under a qualified stock option, (v) any
other amounts that receive special tax benefits, such as premiums for group term life insurance
(but only to the extent that the premiums are not includible in the gross income of the Participant
and are not salary reduction amounts that are described in Code Section 125), and (vi) other items
that are similar to the items listed in (i) through (v) above.

“Test compensation” includes (i) any elective deferral, as defined in Code Section 402(g)(3), and
(ii) any amount contributed or deferred by the Employer or a Related Company at the Participant’s
election which is not includable in the Participant’s gross income by reason of Code Section 125,
132(f)(4), or 457, provided that any such amount is attributable to compensation that would
otherwise be included in “test compensation” as defined above.

“Test compensation” does not include amounts paid to a Participant following severance of
employment unless such amounts are paid within 2 1/2 months of the Participant’s severance and (i)
would otherwise have been paid to the Participant in the course of his employment and are regular
compensation for services during the Participant’s regular working hours, compensation for services
outside the Participant’s regular working hours (such as overtime or shift differential pay),
commissions, bonuses, or other similar compensation or (ii) are payments for accrued bona fide
sick, vacation or other leave, but only if the Participant would have been able to use such leave
if his employment had continued.

If elected by the Administrator with respect to a Plan Year, “test compensation” may exclude
amounts earned by an individual during the Plan Year, but while the individual was not an Eligible
Employee or “eligible participant”.

In no event, shall the “test compensation” of a Participant taken into account under the Plan for
any Plan Year exceed the limit in effect under Code Section 401(a)(17) ($220,000 for Plan Years
beginning in 2006, subject to adjustment annually as provided in Code Sections 401(a)(17)(B) and
415(d); provided 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).

 

34

 

The “testing year” under the prior year testing method means the Plan Year immediately preceding
the Plan Year being tested.

7.2 Code Section 402(g) Limit

In no event shall the amount of the 401(k) Contributions, excluding Catch-Up 401(k) Contributions,
made on behalf of an Eligible Employee for his taxable year, when aggregated with any “elective
contributions” made on behalf of the Eligible Employee under any other plan of an Employer or a
Related Company for his taxable year, exceed the dollar limit imposed under Code Section 402(g), as
in effect on January 1 of the calendar year in which such taxable year begins. In the event that
the Administrator determines that the reduction percentage elected by an Eligible Employee will
result in his exceeding the Code Section 402(g) limit, the Administrator may adjust the reduction
authorization of such Eligible Employee by reducing the percentage of his 401(k) Contributions to
such smaller percentage that will result in the Code Section 402(g) limit not being exceeded. If
the Administrator determines that the 401(k) Contributions made on behalf of an Eligible Employee
would exceed the Code Section 402(g) limit for his taxable year, the 401(k) Contributions for such
Participant shall be automatically suspended for the remainder, if any, of such taxable year.

If an Employer notifies the Administrator that the Code Section 402(g) limit has nevertheless been
exceeded by an Eligible Employee for his taxable year, the 401(k) Contributions that, when
aggregated with “elective contributions” made on behalf of the Eligible Employee under any other
plan of an Employer or a Related Company, would exceed the Code Section 402(g) limit, plus any
income and minus any losses attributable thereto, shall be either re-characterized as Catch-Up
401(k) Contributions or distributed to the Eligible Employee no later than the April 15 immediately
following such taxable year.

Any 401(k) Contributions that are distributed to an Eligible Employee in accordance with this
Section shall not be taken into account in determining the Eligible Employee’s “deferral
percentage” for the “testing year” in which the 401(k) Contributions were made, unless the Eligible
Employee is a Highly Compensated Employee.

If excess 401(k) Contributions are distributed to a Participant or are re-characterized as Catch-Up
401(k) Contributions in accordance with this Section, Matching Contributions that are attributable
solely to the re-characterized or distributed 401(k) Contributions, plus any income and minus any
losses attributable thereto, shall be forfeited by the Participant no earlier than the date on
which re-characterization or distribution of 401(k) Contributions pursuant to this Section occurs
and no later than the last day of the Plan Year following the Plan Year for which the Matching
Contributions were made.

 

35

 

7.3 Distribution of “Excess Deferrals”

Notwithstanding any other provision of the Plan to the contrary, if a Participant notifies the
Administrator in writing no later than the March 1 following the close of the Participant’s taxable
year that “excess deferrals” have been made on his behalf under the Plan for such taxable year, the
“excess deferrals”, plus any income and minus any losses attributable thereto, shall be distributed
to the Participant no later than the April 15 immediately following such taxable year.

Any 401(k) Contributions that are distributed to a Participant in accordance with this Section
shall nevertheless be taken into account in determining the Participant’s “deferral percentage” for
the “testing year” in which the 401(k) Contributions were made.

If 401(k) Contributions are distributed to a Participant in accordance with this Section, Matching
Contributions that are attributable solely to the distributed 401(k) Contributions, plus any income
and minus any losses attributable thereto, shall be forfeited by the Participant no earlier than
the date on which distribution of 401(k) Contributions pursuant to this Section occurs and no later
than the last day of the Plan Year following the Plan Year for which the Matching Contributions
were made.

7.4 Limitation on 401(k) Contributions of Highly Compensated Employees – ADP Test

Notwithstanding any other provision of the Plan to the contrary, the 401(k) Contributions made with
respect to a Plan Year on behalf of Eligible Employees who are Highly Compensated Employees may not
result in an average “deferral percentage” for such Eligible Employees that exceeds the greater of:

	(a)	 	a percentage that is equal to 125 percent of the average “deferral percentage” for all other
Eligible Employees for the “testing year”; or
	 
	(b)	 	a percentage that is not more than 200 percent of the average “deferral percentage” for all
other Eligible Employees for the “testing year” and that is not more than two percentage
points higher than the average “deferral percentage” for all other Eligible Employees for the
“testing year”,

unless the “excess contributions”, determined as provided in the following Section are
re-characterized or distributed as provided in Section 7.6.

 

36

 

If the Plan provides that Employees are eligible to make 401(k) Contributions before they have
satisfied the minimum age and service requirements under Code Section 410(a)(1)(A) and applies Code
Section 410(b)(4)(B) in determining whether the cash or deferred arrangement meets the requirements
of Code Section 410(b)(1), the Administrator may apply the limitations described above either:

	(c)	 	by comparing the average “deferral percentage” of all Eligible Employees who are Highly
Compensated Employees for the Plan Year to the average “deferral percentage” for the “testing
year” of all other Eligible Employees who have satisfied the minimum age and service
requirements under Code Section 410(a)(1)(A); or
	 
	(d)	 	separately with respect to Eligible Employees who have not satisfied the minimum age and
service requirements under Code Section 410(a)(1)(A) and Eligible Employees who have satisfied
such minimum age and service requirements.

In order to assure that the limitation contained herein is not exceeded with respect to a Plan
Year, the Administrator is authorized to set a limit on the percentage of Compensation that a
Highly Compensated Employee may contribute to the Plan as 401(k) Contributions for the Plan Year,
to suspend completely further 401(k) Contributions on behalf of Highly Compensated Employees for
any remaining portion of a Plan Year, or to adjust the projected “deferral percentages” of Highly
Compensated Employees by reducing the percentage of their deferral elections for any remaining
portion of a Plan Year to such smaller percentage that will result in the limitation set forth
above not being exceeded. If the Administrator limits the 401(k) Contributions that may be made by
Highly Compensated Employees for a Plan Year, the Administrator shall communicate that limit as
soon as reasonably practicable. In the event of a suspension or reduction, Highly Compensated
Employees affected thereby shall be notified of the reduction or suspension as soon as possible. An
affected Highly Compensated Employee shall be entitled to make a new election for the following
Plan Year.

In determining the “deferral percentage” for any Eligible Employee who is a Highly Compensated
Employee for the Plan Year, “elective 401(k) contributions”, “qualified nonelective contributions”,
and “qualified matching contributions” (to the extent that “qualified nonelective contributions”
and “qualified matching contributions” are taken into account in determining “deferral
percentages”) made to his accounts under any plan of an Employer or a Related Company that is not
mandatorily disaggregated pursuant to Treasury Regulations Section 1.410(b)-7(c), as modified by
Section 1.401(k)-1(b)(4) (without regard to the prohibition on aggregating plans with inconsistent
testing methods contained in Section 1.401(k)-1(b)(4)((iii)(B) and the prohibition on aggregating
plans with different plan years contained in Section 1.410(b)-7(d)(5)), shall be treated as if all
such contributions were made to the Plan; provided, however, that if such a plan has a plan year
different from the Plan Year, any such contributions made to the Highly Compensated Employee’s
accounts under the other plan during the Plan Year shall be treated as if such contributions were
made to the Plan.

 

37

 

If one or more plans of an Employer or Related Company are aggregated with the Plan for purposes of
satisfying the requirements of Code Section 401(a)(4) or 410(b), then “deferral percentages” under
the Plan shall be calculated as if the Plan and such one or more other plans were a single plan.
Pursuant to Treasury Regulations Section 1.401(k)-1(b)(4)(v), an Employer may elect to calculate “deferral percentages” aggregating ESOP and non-ESOP
plans. In addition, an Employer may elect to calculate “deferral percentages” aggregating bargained
plans maintained for different bargaining units, provided that such aggregation is done on a
reasonable basis and is reasonably consistent from year to year. Plans may be aggregated under this
paragraph only if they have the same plan year and utilize the same testing method to satisfy the
requirements of Code Section 401(k).

The Administrator shall maintain records sufficient to show that the limitation contained in this
Section was not exceeded with respect to any Plan Year and the amount of the “qualified nonelective
contributions” and/or “qualified matching contributions” taken into account in determining
“deferral percentages” for any Plan Year.

			
	7.5	 	Determination and Allocation of “Excess Contributions” Among Highly Compensated Employees

Notwithstanding any other provision of the Plan to the contrary, in the event that the limitation
on 401(k) Contributions described in the preceding Section is exceeded in any Plan Year, the
Administrator shall first determine the dollar amount of the excess by reducing the dollar amount
of the contributions included in determining the “deferral percentage” of Highly Compensated
Employees in order of their “deferral percentages” as follows:

	(a)	 	The highest “deferral percentage(s)” shall be reduced to the greater of (1) the maximum
“deferral percentage” that satisfies the limitation on 401(k) Contributions described in the
preceding Section or (2) the next highest “deferral percentage”.

	(b)	 	If the limitation on 401(k) Contributions described in the preceding Section would still be
exceeded after application of the provisions of paragraph (a), the Administrator shall
continue reducing “deferral percentages” of Highly Compensated Employees, continuing with the
next highest “deferral percentage”, in the manner provided in paragraph (a) until the
limitation on 401(k) Contributions described in the preceding Section is satisfied.

The determination of the amount of “excess contributions” hereunder shall be made after 401(k)
Contributions and “excess deferrals” have been re-characterized or distributed pursuant to Sections
7.2 and 7.3, if applicable.

 

38

 

After determining the dollar amount of the “excess contributions” that have been made to the Plan,
the Administrator shall then allocate such excess among Highly Compensated Employees in order of
the dollar amount of their “deferral percentages” as follows:

	(c)	 	The contributions included in the “deferral percentage(s)” of the Highly Compensated
Employee(s) with the largest dollar amount of “deferral percentage”
for the Plan Year shall be reduced by the dollar amount of the excess (with such dollar
amount being allocated equally among all such Highly Compensated Employees), but not below
the dollar amount of the “deferral percentage” of the Highly Compensated Employee(s) with
the next highest dollar amount of “deferral percentage” for the Plan Year.

	(d)	 	If the excess has not been fully allocated after application of the provisions of paragraph
(c), the Administrator shall continue reducing the contributions included in the “deferral
percentages” of Highly Compensated Employees, continuing with the Highly Compensated Employees
with the largest remaining dollar amount of “deferral percentages” for the Plan Year, in the
manner provided in paragraph (c) until the entire excess determined above has been allocated.

7.6 Treatment of “Excess Contributions”

Except to the extent that a Highly Compensated Employee’s “excess contributions” may be
re-characterized as Catch-Up 401(k) Contributions, “excess contributions” allocated to a Highly
Compensated Employee pursuant to the preceding Section, plus any income and minus any losses
attributable thereto, shall be distributed to the Highly Compensated Employee prior to the end of
the next succeeding Plan Year. If such excess amounts are distributed more than 2 1/2 months after
the last day of the Plan Year for which the excess occurred, an excise tax may be imposed under
Code Section 4979 on the Employer maintaining the Plan with respect to such amounts.

If excess 401(k) Contributions are distributed to a Participant or are re-characterized as Catch-Up
401(k) Contributions in accordance with this Section, Matching Contributions that are attributable
solely to the re-characterized or distributed 401(k) Contributions, plus any income and minus any
losses attributable thereto, shall be forfeited by the Participant no earlier than the date on
which re-characterization or distribution of 401(k) Contributions pursuant to this Section occurs
and no later than the last day of the Plan Year following the Plan Year for which the Matching
Contributions were made

7.7 Limitation on Contributions of Highly Compensated Employees – ACP Test

Notwithstanding any other provision of the Plan to the contrary, the Matching Contributions made
with respect to a Plan Year on behalf of “eligible participants” who are Highly Compensated
Employees may not result in an average “contribution percentage” for such “eligible participants”
that exceeds the greater of:

	(a)	 	a percentage that is equal to 125 percent of the average “contribution percentage” for all
other “eligible participants” for the “testing year”; or

	(b)	 	a percentage that is not more than 200 percent of the average “contribution percentage” for
all other “eligible participants” for the “testing year” and that is
not more than two percentage points higher than the average “contribution percentage” for
all other “eligible participants” for the “testing year”,

 

39

 

unless the “excess aggregate contributions”, determined as provided in the following Section are
forfeited or distributed as provided in Section 7.8.

If the Plan provides that Employees are eligible to receive Matching Contributions before they have
satisfied the minimum age and service requirements under Code Section 410(a)(1)(A) and applies Code
Section 410(b)(4)(B) in determining whether the portion of the Plan subject to Code Section 401(m)
meets the requirements of Code Section 410(b)(1), the Administrator may apply the limitations
described above either:

	(c)	 	by comparing the average “contribution percentage” of all “eligible participants” who are
Highly Compensated Employees for the Plan Year to the average “contribution percentage” for
the “testing year” of all other “eligible participants” who have satisfied the minimum age and
service requirements under Code Section 410(a)(1)(A); or

	(d)	 	separately with respect to “eligible participants” who have not satisfied the minimum age and
service requirements under Code Section 410(a)(1)(A) and “eligible participants” who have
satisfied such minimum age and service requirements.

In determining the “contribution percentage” for any “eligible participant” who is a Highly
Compensated Employee for the Plan Year, “matching contributions”, “employee contributions”,
“qualified nonelective contributions”, and “elective 401(k) contributions” (to the extent that
“qualified nonelective contributions” and “elective 401(k) contributions” are taken into account in
determining “contribution percentages”) made to his accounts under any plan of an Employer or a
Related Company that is not mandatorily disaggregated pursuant to Treasury Regulations Section
1.410(b)-7(c), as modified by Section 1.401(m)-1(b)(4) (without regard to the prohibition on
aggregating plans with inconsistent testing methods contained in Section 1.401(m)-1(b)(4)((iii)(B)
and the prohibition on aggregating plans with different plan years contained in Section
1.410(b)-7(d)(5)), shall be treated as if all such contributions were made to the Plan; provided,
however, that if such a plan has a plan year different from the Plan Year, any such contributions
made to the Highly Compensated Employee’s accounts under the other plan during the Plan Year shall
be treated as if such contributions were made to the Plan.

If one or more plans of an Employer or a Related Company are aggregated with the Plan for purposes
of satisfying the requirements of Code Section 401(a)(4) or 410(b), the “contribution percentages”
under the Plan shall be calculated as if the Plan and such one or more other plans were a single
plan. Pursuant to Treasury Regulations Section 1.401(m)-1(b)(4)(v), an Employer may elect to
calculate “contribution percentages” aggregating ESOP and non-ESOP plans. In addition, an Employer
may elect to calculate “contribution percentages” aggregating bargained plans maintained for
different
bargaining units, provided that such aggregation is done on a reasonable basis and is reasonably
consistent from year to year. Plans may be aggregated under this paragraph only if they have the
same plan year and utilize the same testing method to satisfy the requirements of Code Section
401(m).

 

40

 

The Administrator shall maintain records sufficient to show that the limitation contained in this
Section was not exceeded with respect to any Plan Year and the amount of the “elective 401(k)
contributions”, “qualified nonelective contributions”, and/or “qualified matching contributions”
taken into account in determining “contribution percentages” for any Plan Year.

			
	7.8	 	Determination and Allocation of Excess Aggregate Contributions Among Highly Compensated
Employees

Notwithstanding any other provision of the Plan to the contrary, in the event that the limitation
described in the preceding Section is exceeded in any Plan Year, the Administrator shall first
determine the dollar amount of the excess by reducing the dollar amount of the contributions
included in determining the “contribution percentage” of Highly Compensated Employees in order of
their “contribution percentages”, as follows:

	(a)	 	The highest “contribution percentage(s)” shall be reduced to the greater of (1) the maximum
“contribution percentage” that satisfies the limitation described in the preceding Section or
(2) the next highest “contribution percentage”.

	(b)	 	If the limitation described in the preceding Section would still be exceeded after
application of the provisions of paragraph (a), the Administrator shall continue reducing
“contribution percentages” of Highly Compensated Employees, continuing with the next highest
“contribution percentage”, in the manner provided in paragraph (a) until the limitation
described in the preceding Section is satisfied.

The determination of the amount of the “excess aggregate contributions” shall be made after
application of Sections 7.2, 7.3, and 7.6, if applicable.

After determining the dollar amount of the “excess aggregate contributions” that have been made to
the Plan, the Administrator shall next allocate such excess among Highly Compensated Employees in
order of the dollar amount of their “contribution percentages” as follows:

	(c)	 	The contributions included in the “contribution percentages” of the Highly Compensated
Employee(s) with the largest dollar amount of “contribution percentage” shall be reduced by
the dollar amount of the excess (with such dollar amount being allocated equally among all
such Highly Compensated Employees), but not below the dollar amount of the “contribution
percentage” of the Highly
Compensated Employee(s) with the next highest dollar amount of “contribution percentage”
for the Plan Year.

 

41

 

	(d)	 	If the excess has not been fully allocated after application of the provisions of paragraph
(c), the Administrator shall continue reducing the contributions included in the “contribution
percentages” of Highly Compensated Employees, continuing with the Highly Compensated Employees
with the largest remaining dollar amount of “contribution percentages” for the Plan Year, in
the manner provided in paragraph (c) until the entire excess determined above has been
allocated.

7.9 Treatment of “Excess Aggregate Contributions”

“Excess aggregate contributions” allocated to a Highly Compensated Employee pursuant to the
preceding Section, plus any income and minus any losses attributable thereto, shall be forfeited,
to the extent forfeitable, or distributed to the Participant prior to the end of the next
succeeding Plan Year as hereinafter provided. If such excess amounts are forfeited or distributed
more than 2 1/2 months after the last day of the Plan Year for which the excess occurred, an excise
tax of 10% will be imposed under Code Section 4979 on the Employer maintaining the Plan with
respect to such amounts.

Excess amounts shall be forfeited or distributed from a Highly Compensated Employee’s Account in
the order prescribed by the Administrator, which order shall be uniform with respect to all Highly
Compensated Employees and non-discriminatory.

“Excess aggregate contributions” that are vested shall in all cases be distributed. Excess
Matching Contributions that are not vested shall be forfeited. Any amounts forfeited with respect
to a Participant pursuant to this Section shall be treated as a forfeiture under the Plan no later
than the last day of the Plan Year following the Plan Year for which the Matching Contributions
were made.

7.10 Treatment of Forfeited Matching Contributions

Any Matching Contributions that are forfeited pursuant to the provisions of the preceding Sections
of this Article shall be applied against the Employers’ contribution obligations for the Plan Year
or against Plan expenses, as directed by the Administrator.

 

42

 

Notwithstanding the foregoing, however, should the amount of all such forfeitures for any Plan Year
exceed the amount of the Employers’ contribution obligations for the Plan Year, the excess amount
of such forfeitures shall be allocated among the Accounts of Participants who are Eligible
Employees during the Plan Year for which the excess occurred as follows:

	(a)	 	Forfeited Matching Contributions shall be allocated only among Eligible Employees who are not
Highly Compensated Employees for the Plan Year;

	(b)	 	Any forfeited amounts shall be allocated in the ratio which the “deferral percentage” of an
eligible Participant bears to the aggregate value of the “deferral percentages of all such
eligible Participants; and

	(c)	 	Forfeitures credited to a Participant’s Account hereunder shall be credited to his Regular
Matching Contributions Sub-Account. A Participant’s vested interest in amounts attributable
to forfeitures allocated to his Matching Contributions Sub-Account hereunder shall be
determined under the vesting schedule applicable to Regular Matching Contributions.

Notwithstanding the foregoing, prior to allocating forfeited amounts among Participants’ Accounts,
the Administrator may direct that any portion or all of such forfeited amounts shall be applied
against Plan expenses. The forfeited amounts to be allocated among Participants’ Accounts shall be
reduced by any such amounts that are applied against Plan expenses as provided herein.

7.11 Determination of Income or Loss

The income or loss attributable to contributions in excess of a limit described above that are
distributed pursuant to this Article shall be determined for the preceding Plan Year and the “gap
period” under the method otherwise used for allocating income or loss to Participants’ Accounts;
provided, however, that income or loss for the “gap period” may be determined as of a date that is
no more than 7 days before the date of distribution.

7.12 Code Section 415 Limitations on Crediting of Contributions and Forfeitures

Notwithstanding any other provision of the Plan to the contrary, the “annual addition” with respect
to a Participant for a “limitation year” shall in no event exceed the lesser of (i) the maximum
dollar amount permitted under Code Section 415(c)(1)(A), adjusted as provided in Code Section
415(d) (e.g., $42,000 for the “limitation year” ending in 2005) or (ii) 100 percent of the
Participant’s “415 compensation” for the “limitation year”; provided, however, that the limit in
clause (i) shall be pro rated for any short “limitation year”. The limit in clause (ii) shall not
apply to any contribution for medical benefits within the meaning of Code Section 401(h) or
419A(f)(2) after separation from service which is otherwise treated as an “annual addition” under
Code Section 419A(d)(2) or 415(l)(1). A Participant’s 401(k) Contributions may be re-characterized
as Catch-Up 401(k) Contributions and excluded from the Participant’s “annual additions” for the
“limitation year” to satisfy the preceding limitation.

 

43

 

If the “annual addition” to the Account of a Participant in any “limitation year” would otherwise
exceed the amount that may be applied for his benefit under the limitation contained in this
Section, the limitation shall be satisfied by reducing contributions made to the Participant’s
Account to the extent necessary in the following order:

401(k) Contributions made on behalf of the Participant for the “limitation year” that have
not been matched, if any, shall be reduced.

401(k) Contributions made on behalf of the Participant for the “limitation year” that have
been matched, if any, and the Matching Contributions attributable thereto shall be reduced
pro rata.

Nonelective Contributions otherwise allocable to the Participant’s Account for the
“limitation year”, if any, shall be reduced.

The amount of any reduction of 401(k) Contributions (plus any income attributable thereto) shall be
returned to the Participant. The amount of any reduction of Employer Contributions shall be deemed
a forfeiture for the “limitation year”.

Amounts deemed to be forfeitures under this Section shall be held unallocated in a suspense account
established for the “limitation year” and shall be applied against the Employer’s contribution
obligation for the next following “limitation year” (and succeeding “limitation years”, as
necessary). If a suspense account is in existence at any time during a “limitation year”, all
amounts in the suspense account must be applied against the Employer’s contribution obligation
before any further contributions that would constitute “annual additions” may be made to the Plan.
No suspense account established hereunder shall share in any increase or decrease in the net worth
of the Trust.

For purposes of this Article, excesses shall result only from the allocation of forfeitures, a
reasonable error in estimating a Participant’s annual “415 compensation”, a reasonable error in
determining the amount of “elective contributions” that may be made with respect to any Participant
under the limits of Code Section 415, or other limited facts and circumstances that justify the
availability of the provisions set forth above.

	7.13	 	Application of Code Section 415 Limitations Where Participant is Covered Under Other
Qualified Defined Contribution Plan

If a Participant is covered by any other qualified defined contribution plan (whether or not
terminated) maintained by an Employer or a Related Company concurrently with the Plan, and if the
“annual addition” for the “limitation year” would otherwise exceed the amount that may be applied
for the Participant’s benefit under the limitation contained in the preceding Section, such excess
shall be reduced first by returning or forfeiting, as provided under the applicable defined
contribution plan, the contributions last allocated to the Participant’s accounts for the
limitation year under all such defined contribution plans, and, to the extent such contributions
are returned to the Participant, the income attributable thereto. If contributions are allocated
to the defined contribution plans as of the same date, any excess shall be allocated pro rata among
the defined contribution plans. For purposes of determining the order of reduction hereunder,
contributions to a simplified employee pension plan described in Code Section 408(k) shall be
deemed to have been allocated first and contributions to a welfare benefit fund or individual
medical
account shall be deemed to have been allocated next, regardless of the date such contributions were
actually allocated.

 

44

 

7.14 Scope of Limitations

The Code Section 415 limitations contained in the preceding Sections shall be applicable only with
respect to benefits provided pursuant to defined contribution plans and defined benefit plans
described in Code Section 415(k). For purposes of applying the Code Section 415 limitations
contained in the preceding Sections, the term “Related Company” shall be adjusted as provided in
Code Section 415(h).

 

45

 

ARTICLE VIII

TRUST FUNDS AND ACCOUNTS

8.1 General Fund

The Trustee shall maintain a General Fund as required to hold and administer any assets of the
Trust that are not allocated among the Investment Funds as provided in the Plan or the Trust
Agreement. The General Fund shall be held and administered as a separate common trust fund. The
interest of each Participant or Beneficiary under the Plan in the General Fund shall be an
undivided interest.

8.2 Investment Funds

The Sponsor shall determine the number and type of Investment Funds and shall communicate the same
and any changes therein in writing to the Administrator and the Trustee. Each Investment Fund shall
be held and administered as a separate common trust fund. The interest of each Participant or
Beneficiary under the Plan in any Investment Fund shall be an undivided interest.

8.3 Loan Investment Fund

If a loan from the Plan to a Participant is approved in accordance with the provisions of Article
XII, the Sponsor shall direct the establishment and maintenance of a loan Investment Fund in the
Participant’s name. The assets of the loan Investment Fund shall be held as a separate trust fund.
A Participant’s loan Investment Fund shall be invested in the note(s) reflecting the loan(s) made
to the Participant in accordance with the provisions of Article XII. Notwithstanding any other
provision of the Plan to the contrary, income received with respect to a Participant’s loan
Investment Fund shall be allocated and the loan Investment Fund shall be administered as provided
in Article XII.

8.4 Employer Stock Investment Fund

The Sponsor shall direct the establishment and maintenance of an Employer stock Investment Fund to
which the following contributions shall be allocated:

	 	•	 	Nonelective Contributions.

	 	•	 	Matching Contributions.

In addition to the foregoing, a Participant may elect to have other contributions invested in the
Employer stock Investment Fund. The Employer stock Investment Fund shall be held and administered
as a separate common trust fund. The interest of each Participant or Beneficiary under the Plan in
the Employer stock Investment Fund shall be an undivided interest. The Employer stock Investment
Fund is intended to be invested
primarily in equity securities issued by an Employer or a Related Company that are publicly traded
and are “qualifying employer securities” as defined in ERISA Section 407(d)(5).

 

46

 

8.5 Income on Trust

Any dividends, interest, distributions, or other income received by the Trustee with respect to any
Trust Fund maintained hereunder shall be allocated by the Trustee to the Trust Fund for which the
income was received.

8.6 Accounts

As of the first date a contribution is made by or on behalf of a Covered Employee there shall be
established an Account in his name reflecting his interest in the Trust. Each Account shall be
maintained and administered for each Participant and Beneficiary in accordance with the provisions
of the Plan. The balance of each Account shall be the balance of the account after all credits and
charges thereto, for and as of such date, have been made as provided herein.

8.7 Sub-Accounts

A Participant’s Account shall be divided into such separate, individual Sub-Accounts as are
necessary or appropriate to reflect the Participant’s interest in the Trust.

 

47

 

ARTICLE IX

LIFE INSURANCE CONTRACTS

9.1 No Life Insurance Contracts

A Participant’s Account may not be invested in life insurance contracts on the life of the
Participant.

 

48

 

ARTICLE X

DEPOSIT AND INVESTMENT OF CONTRIBUTIONS

10.1 Future Contribution Investment Elections

Except as otherwise provided below, each Eligible Employee shall make an investment election in the
manner and form prescribed by the Administrator directing the manner in which the contributions
made on his behalf shall be invested. An Eligible Employee’s investment election shall specify the
percentage, in the percentage increments prescribed by the Administrator, of such contributions
that shall be allocated to one or more of the Investment Funds with the sum of such percentages
equaling 100 percent. The investment election by a Participant shall remain in effect until his
entire interest under the Plan is distributed or forfeited in accordance with the provisions of the
Plan or until he records a change of investment election with the Administrator, in such form as
the Administrator shall prescribe. If recorded in accordance with any rules prescribed by the
Administrator, a Participant’s change of investment election may be implemented effective as of the
date or dates prescribed by the Administrator.

10.2 Deposit of Participant Directed Contributions

All contributions made on a Participant’s behalf over which the Participant has investment control
shall be deposited in the Trust and allocated among the Investment Funds including the Employer
stock Investment Fund in accordance with the Participant’s currently effective investment election
Notwithstanding the foregoing, any contributions made to the Plan in qualifying employer securities
shall be allocated to the Employer stock Investment Fund, pending directions to the Administrator
regarding their future investment. If no investment election is recorded with the Administrator at
the time contributions are to be deposited to a Participant’s Account, his contributions shall be
allocated among the Investment Funds as directed by the Administrator.

10.3 Investment and Deposit of Certain Contributions

Notwithstanding any other provision of the Plan to the contrary, the following contributions are
required to be invested in the Employer stock Investment Fund, pending a Participant’s election to
transfer them to another Investment Fund:

	 	•	 	Nonelective Contributions.

	 	•	 	Matching Contributions.

Upon contribution to the Plan, all such contributions shall be deposited in the Trust and allocated
to the Employer stock Investment Fund.

 

49

 

10.4 Election to Transfer Between Funds

A Participant may elect to transfer investments of amounts attributable to contributions over which
he has investment control from any Investment Fund to any other Investment Fund. The Participant’s
transfer election shall specify a percentage, in the percentage increments prescribed by the
Administrator, of the amount eligible for transfer that is to be transferred, which percentage may
not exceed 100 percent. Any transfer election must be recorded with the Administrator, in such form
as the Administrator shall prescribe. Subject to any restrictions pertaining to a particular
Investment Fund, if recorded in accordance with any rules prescribed by the Administrator, a
Participant’s transfer election may be implemented effective as of the date or dates prescribed by
the Administrator.

Notwithstanding any other provision of this Section to the contrary, the Administrator may
prescribe such rules restricting Participants’ transfer elections as it deems necessary or
appropriate to preclude excessive or abusive trading or market timing.

10.5 404(c) Protection

The Plan is intended to constitute a plan described in ERISA Section 404(c) and regulations issued
thereunder. The fiduciaries of the Plan may be relieved of liability for any losses that are the
direct and necessary result of investment instructions given by a Participant, his Beneficiary, or
an alternate payee under a qualified domestic relations order.

A Participant’s directions to the Trustee regarding investment in and transfers to and from the
Employer stock Investment Fund shall be communicated in confidence and shall not be divulged to the
Employers or to any officer, director, or employee of the Employers. The Sponsor shall establish
procedures to provide and maintain such confidentiality and shall appoint a fiduciary with the
responsibility of overseeing such procedures. An independent fiduciary shall be appointed to the
extent required under Department of Labor Regulations Section 2550.404c-1(d)(2)(ii)(E)(4)(ix) to
maintain such confidentiality.

10.6 Voting and Tendering Employer Stock

Each Participant who has an interest in the Employer stock Investment Fund shall have the right to
direct the Trustee as to the manner in which the number of shares credited to his Account or, if
accounting under the Employer stock Investment Fund is by units of participation, his proportionate
interest in the Employer stock Investment Fund, is to be voted. Upon receipt of a Participant’s
direction, the Trustee shall vote the shares representing the Participant’s interest in the
Employer stock Investment Fund as directed. Except as otherwise required by law or as otherwise
provided in the Trust Agreement, if the Trustee does not receive direction from a Participant
regarding how to vote the shares representing his interest in the Employer stock Investment Fund,
the Trustee shall vote
such shares in accordance with the recommendations of the board of directors of the Sponsor.

 

50

 

In addition, upon commencement of a tender offer for any securities held in the Employer stock
Investment Fund, each Participant who has an interest in the Employer stock Investment Fund shall
have the right to direct the Trustee whether or not to tender all or any portion of the shares
credited to his Account or, if accounting under the Employer stock Investment Fund is by units of
participation, all or any portion of his proportionate interest in the Employer stock Investment
Fund. A Participant may change his direction regarding the tender of shares representing his
interest in the Employer stock Investment Fund at any time prior to the tender offer withdrawal
deadline. The Trustee shall tender or not tender shares representing a Participant’s interest in
the Employer stock Investment Fund in accordance with the Participant’s directions. Except as
otherwise required by law, if the Trustee does not receive direction from a Participant regarding
whether or not to tender the shares representing a Participant’s interest in the Employer stock
Investment Fund, the Trustee shall not tender such shares. The proceeds received by the Trustee
with respect to shares of stock tendered by the Trustee in accordance with Participants’ directions
shall be allocated to the Accounts of those Participants who elected to tender their shares in
proportion to their interest in the tendered shares.

All materials provided to other shareholders, including proxy solicitation materials and all tender
materials, shall be provided to each Participant with an interest in the Employer stock Investment
Fund.

A Participant’s directions to the Trustee hereunder shall be communicated in confidence and shall
not be divulged to the Employers or to any officer, director, or employee of the Employers. The
Sponsor shall establish procedures to provide and maintain such confidentiality and shall appoint a
fiduciary with the responsibility of overseeing such procedures. An independent fiduciary shall be
appointed to the extent required under Department of Labor Regulations Section
2550.404c-1(d)(2)(ii)(E)(4)(ix) to maintain such confidentiality.

 

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ARTICLE XI

CREDITING AND VALUING ACCOUNTS

11.1 Crediting Accounts

All contributions made under the provisions of the Plan shall be credited to Accounts in the Trust
Funds by the Trustee, in accordance with procedures established in writing by the Administrator,
either when received or on the succeeding Valuation Date after valuation of the Trust Fund has been
completed for such Valuation Date as provided in Section 11.2, as shall be determined by the
Administrator.

11.2 Valuing Accounts

Accounts in the Trust Funds shall be valued by the Trustee on the Valuation Date, in accordance
with procedures established in writing by the Administrator, either in the manner adopted by the
Trustee and approved by the Administrator or in the manner set forth in Section 11.3 as Plan
valuation procedures, as determined by the Administrator.

11.3 Plan Valuation Procedures

With respect to the Trust Funds, the Administrator may determine that the following valuation
procedures shall be applied. As of each Valuation Date hereunder, the portion of any Accounts in a
Trust Fund shall be adjusted to reflect any increase or decrease in the value of the Trust Fund for
the period of time occurring since the immediately preceding Valuation Date for the Trust Fund (the
“valuation period”) in the following manner:

	(a)	 	First, the value of the Trust Fund shall be determined by valuing all of the assets of the
Trust Fund at fair market value.

	(b)	 	Next, the net increase or decrease in the value of the Trust Fund attributable to net income
and all profits and losses, realized and unrealized, during the valuation period shall be
determined on the basis of the valuation under paragraph (a) taking into account appropriate
adjustments for contributions, loan payments, and transfers to and distributions, withdrawals,
loans, and transfers from such Trust Fund during the valuation period.

	(c)	 	Finally, the net increase or decrease in the value of the Trust Fund shall be allocated among
Accounts in the Trust Fund in the ratio of the balance of the portion of such Account in the
Trust Fund as of the preceding Valuation Date less any distributions, withdrawals, loans, and
transfers from such Account balance in the Trust Fund since the Valuation Date to the
aggregate balances of the portions of all Accounts in the Trust Fund similarly adjusted, and
each Account in the Trust Fund shall be credited or charged with the amount of its allocated
share.
	 
	 	 	Notwithstanding the foregoing, the Administrator
may adopt such accounting procedures as it
considers appropriate and equitable to establish a
proportionate crediting of net increase or
decrease in the value of the Trust Fund for
contributions, loan payments, and transfers to and
distributions, withdrawals, loans, and transfers
from such Trust Fund made by or on behalf of a
Participant during the valuation period.

 

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11.4 Unit Accounting Permitted

The Administrator may, for administrative purposes, establish unit values for one or more
Investment Fund (or any portion thereof) and maintain the accounts setting forth each Participant’s
interest in such Investment Fund (or any portion thereof) in terms of such units, all in accordance
with such rules and procedures as the Administrator shall deem to be fair, equitable, and
administratively practicable. In the event that unit accounting is established for an Investment
Fund (or any portion thereof), the value of a Participant’s interest in that Investment Fund (or
any portion thereof) at any time shall be an amount equal to the then value of a unit in such
Investment Fund (or any portion thereof) multiplied by the number of units then credited to the
Participant.

11.5 Finality of Determinations

The Trustee shall have exclusive responsibility for determining the value of each Account
maintained hereunder. The Trustee’s determinations thereof shall be conclusive upon all interested
parties.

11.6 Notification

Within a reasonable period of time after the end of each Plan Year, the Administrator shall notify
each Participant and Beneficiary of the value of his Account and Sub-Accounts as of a Valuation
Date during the Plan Year.

 

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ARTICLE XII

LOANS

12.1 Application for Loan

A Participant who is a party in interest as defined in ERISA Section 3(14) may make application to
the Administrator for a loan from his Account. Loans shall be made to Participants in accordance
with written guidelines which are hereby incorporated into and made a part of the Plan. To the
extent that such written guidelines comply with the requirements of Code Section 72(p), but are
inconsistent with the provisions of this Article, such written guidelines shall be given effect.

12.2 Collateral for Loan

As collateral for any loan granted hereunder, the Participant shall grant to the Plan a security
interest in his vested interest under the Plan equal to the amount of the loan; provided that in no
event may the security interest exceed 50 percent of the Participant’s vested interest under the
Plan determined as of the date as of which the loan is originated in accordance with Plan
provisions. In the case of a Participant who is an active employee, the Participant also shall
enter into an agreement to repay the loan by payroll withholding.

No loan in excess of 50 percent of the Participant’s vested interest under the Plan shall be made
from the Plan.

Loans shall not be made available to Highly Compensated Employees in an amount greater than the
amount made available to other employees.

A loan shall not be granted unless the Participant consents to the charging of his Account for
unpaid principal and interest amounts in the event the loan is declared to be in default.

12.3 Reduction of Account Upon Distribution

Notwithstanding any other provision of the Plan, the amount of a Participant’s Account that is
distributable to the Participant or his Beneficiary under Article XIII or XV shall be reduced by
the portion of his vested interest that is held by the Plan as security for any loan outstanding to
the Participant, provided that the reduction is used to repay the loan. If distribution is made
because of the Participant’s death prior to the commencement of distribution of his Account and the
Participant’s vested interest in his Account is payable to more than one individual as Beneficiary,
then the balance of the Participant’s vested interest in his Account shall be adjusted by reducing
the vested account balance by the amount of the security used to repay the loan, as provided in the
preceding sentence, prior to determining the amount of the benefit payable to each such individual.

 

54

 

12.4 Legal Requirements Applicable to Plan Loans

Notwithstanding any other provision of the Plan to the contrary, the following terms and conditions
shall apply to any loan made to a Participant under this Article:

	(a)	 	The amount of any loan to a Participant (when added to the outstanding balance of all other
loans to the Participant from the Plan or any other plan maintained by an Employer or a
Related Company) shall not exceed the lesser of:

	 	(i)	 	$50,000, reduced by the excess, if any, of the highest outstanding balance of
any other loan to the Participant from the Plan or any other plan maintained by an
Employer or a Related Company during the preceding 12-month period over the
outstanding balance of such loans on the date a loan is made hereunder; or

	 	(ii)	 	50 percent of the vested portions of the Participant’s Account and his vested
interest under all other plans maintained by an Employer or a Related Company.

	(b)	 	The term of any loan to a Participant shall be no greater than 5 years, except in the case of
a loan used to acquire any dwelling unit which within a reasonable period of time is to be
used (determined at the time the loan is made) as a principal residence (as defined under Code
Section 121) of the Participant.

	(c)	 	Substantially level amortization shall be required over the term of the loan with payments
made not less frequently than quarterly. Notwithstanding the foregoing, if so provided in the
written guidelines applicable to Plan loans, the amortization schedule may be waived and
payments suspended while a Participant is on a leave of absence from employment with an
Employer or any Related Company (for periods in which the Participant does not perform
military service as described in paragraph (d) below); provided that all of the following
requirements are met:

	 	(i)	 	Such leave is either without pay or at a reduced rate of pay that, after
withholding for employment and income taxes, is less than the amount required to be
paid under the amortization schedule;

	 	(ii)	 	Payments resume after the earlier of (a) the date such leave of absence ends
or (b) the one-year anniversary of the date such leave began;

	 	(iii)	 	The period during which payments are suspended does not exceed one year;

	 	(iv)	 	Payments resume in an amount not less than the amount required under the
original amortization schedule; and

	 	(v)	 	The waiver of the amortization schedule does not extend the period of the
loan beyond the maximum period permitted under this Article.

 

55

 

	(d)	 	If a Participant is absent from employment with any Employer or any Related Company for a
period during which he performs services in the uniformed services (as defined in chapter 45
of title 38 of the United States Code), whether or not such services constitute qualified
military service, the suspension of payments shall not be taken into account for purposes of
applying either paragraph (b) or paragraph (c) of this Section provided that all of the
following requirements are met:

	 	(i)	 	Payments resume upon completion of such military service;

	 	(ii)	 	Payments resume in an amount not less than the amount required under the
original amortization schedule and continue in such amount until the loan is repaid in
full;

	 	(iii)	 	Upon resumption, payments are made no less frequently than required under
the original amortization schedule and continue under such schedule until the loan is
repaid in full; and

	 	(iv)	 	The loan is repaid in full, including interest accrued during the period of
such military service, no later than the maximum period otherwise permitted under this
Article extended by the period of such military service.

	(e)	 	The loan shall be evidenced by a legally enforceable agreement that demonstrates compliance
with the provisions of this Section.

	(f)	 	Subject to the requirements of the Servicemembers Civil Relief Act, the interest rate on any
loan to a Participant shall be the prime interest rate made under similar circumstances by
persons in the business of lending money plus one percent.

12.5 Administration of Loan Investment Fund

Upon approval of a loan to a Participant, the Administrator shall direct the Trustee to transfer an
amount equal to the loan amount from the Investment Funds in which it is invested, as directed by
the Administrator, to the loan Investment Fund established in the Participant’s name. Any loan
approved by the Administrator shall be made to the Participant out of the Participant’s loan
Investment Fund. All principal and interest paid by the Participant on a loan made under this
Article shall be deposited to his Account and shall be allocated upon receipt among the Investment
Funds in accordance with the Participant’s currently effective investment election. The balance of
the Participant’s loan Investment Fund shall be decreased by the amount of principal payments and
the loan Investment Fund shall be terminated when the loan has been repaid in full.

 

56

 

12.6 Default

If either (i) a Participant fails to make or cause to be made, any payment required under the terms
of the loan by the end of the calendar quarter following the calendar quarter in which the payment
was due, unless payment is not made because the Participant is on a leave of absence and the
amortization schedule is waived as provided in paragraph (c) or (d) of Section 12.4, or (ii) there
is an outstanding principal balance existing on a loan after the last scheduled repayment date
(extended as provided in Section 12.4(d), if applicable), the Administrator shall direct the
Trustee to declare the loan to be in default, and the entire unpaid balance of such loan, together
with accrued interest, shall be immediately due and payable. In any such event, if such balance
and interest thereon is not then paid, the Trustee shall charge the Account of the borrower with
the amount of such balance and interest as of the earliest date a distribution may be made from the
Plan to the borrower without adversely affecting the tax qualification of the Plan or of the cash
or deferred arrangement.

12.7 Deemed Distribution Under Code Section 72(p)

If a Participant’s loan is in default as provided in Section 12.6, the Participant shall be deemed
to have received a taxable distribution in the amount of the outstanding loan balance as required
under Code Section 72(p), whether or not distribution may actually be made from the Plan without
adversely affecting the tax qualification of the Plan.

If a Participant is deemed to have received distribution of an outstanding loan balance hereunder,
no further loans may be made to such Participant from his Account unless either (a) there is a
legally enforceable arrangement among the Participant, the Plan, and the Participant’s employer
that repayment of such loan shall be made by payroll withholding or (b) the loan is secured by such
additional collateral consisting of real, personal, or other property satisfactory to the
Administrator to provide adequate security for the loan.

12.8 Treatment of Outstanding Balance of Loan Deemed Distributed Under Code Section 72(p)

The balance of any loan that is deemed to have been distributed to a Participant hereunder shall
cease to be an outstanding loan for purposes of Code Section 72(p) and a Participant shall not be
treated as having received a taxable distribution when his Account is offset by such outstanding
loan balance as provided in Section 12.6. Any interest that accrues on a loan after it is deemed
to have been distributed shall not be treated as an additional loan to the Participant and shall
not be included in the Participant’s taxable income as a deemed distribution. Notwithstanding the
foregoing, however, unless a Participant repays such loan, with interest, the amount of such loan,
with interest thereon calculated as provided in the original loan note, shall continue to be
considered an outstanding loan for purposes of determining the maximum permissible amount of any
subsequent loan under Section 12.4(a).

 

57

 

If a Participant elects to make payments on a loan after it is deemed to have been distributed
hereunder, such payments shall be treated as “employee contributions”, as defined in Section 7.1,
to the Plan solely for purposes of determining the taxable portion of the Participant’s Account and
shall not be treated as “employee contributions” for any other Plan purpose, including application
of the limitations on contributions applicable under Code Sections 401(m) and 415.

The provisions of this Section regarding treatment of loans that are deemed distributed shall not
apply to loans made prior to January 1, 2002, except to the extent provided under the transition
rules in Q & A 22(c)(2) of Section 1.72(p)-l of the Treasury Regulations.

12.9 Special Rules Applicable to Loans

Any loan made hereunder shall be subject to the following rules:

	(a)	 	No loans shall be made to an Employee who makes a Rollover Contribution in accordance with
Article V, but who is not an Eligible Employee as provided in Article III.
	 
	(b)	 	A Participant may not request a loan for less than $1,000.

	(c)	 	A Participant with an outstanding loan may not apply for another loan until the existing loan
is paid in full and may not refinance an existing loan or obtain a second loan for the purpose
of paying off the existing loan. The provisions of this paragraph shall not apply to any loans
made prior to the effective date of this amendment and restatement or made under the
provisions of a prior plan before the date such plan was merged into the Plan or; provided,
however, that any such loan shall be taken into account in determining whether a Participant
may apply for a new loan hereunder.

	(d)	 	The term of any loan to a Participant that is used to acquire any dwelling unit which within
a reasonable period of time is to be used (determined at the time the loan is made) as a
principal residence (as defined under Code Section 121) of the Participant shall be no greater
than ten years.

	(e)	 	A Participant may pre-pay the full outstanding balance of any loan hereunder prior to the
date it is due without penalty.

	(f)	 	Upon a Participant’s termination of employment, the balance of any outstanding loan hereunder
shall immediately become due and owing.

	(g)	 	A Participant may not elect to roll over any loan note held pursuant to the provisions of
this Article.

 

58

 

12.10 Prior Loans

Notwithstanding any other provision of this Article to the contrary, any loan made under the
provisions of the Plan as in effect prior to this amendment and restatement or made under the
provisions of a prior plan before the date such plan was merged into the Plan shall be administered
in accordance with the provisions of the note reflecting such loan and shall remain outstanding
until repaid in accordance with its terms.

 

59

 

ARTICLE XIII

WITHDRAWALS WHILE EMPLOYED

13.1 Non-Hardship Withdrawals of Rollover Contributions

A Participant who is employed by an Employer or a Related Company may elect at any time, subject to
the limitations and conditions prescribed in this Article, to make a cash withdrawal from his
Rollover Contributions Sub-Account.

13.2 Non-Hardship Withdrawals of Restricted Contributions

A Participant who is employed by an Employer or a Related Company and who has attained age 59 1/2
may elect, subject to the limitations and conditions prescribed in this Article, to make a cash
withdrawal from his vested interest in any of the following Sub-Accounts:

	 	•	 	his 401(k) Contributions Sub-Account.

13.3 Non-Hardship Withdrawals of Nonelective Contributions

A Participant who is employed by an Employer or a Related Company may elect, subject to the
limitations and conditions prescribed in this Article, to make a cash withdrawal of amounts held in
his Nonelective Contributions Sub-Account if he has attained age 59 1/2.

13.4 Non-Hardship Withdrawals of Matching Contributions

A Participant who is employed by an Employer or a Related Company may elect, subject to the
limitations and conditions prescribed in this Article, to make a cash withdrawal of amounts held in
his Regular, Additional Discretionary, and True Up Matching Contributions Sub-Accounts if he has
attained age 59 1/2.

13.5 Special In-Service Withdrawals While On Military Leave

A Participant who is employed by an Employer or a Related Company and who is absent from employment
because of qualified military service as described in Code Section 414(u) may elect, subject to the
limitations and conditions prescribed in this Article, to make a cash withdrawal of all or a
portion of his vested interest in his Account.

Notwithstanding the foregoing, a Participant may not make an in-service withdrawal from the
following Sub-Accounts unless the Participant has attained age 59 1/2 or incurred a hardship, as
defined below:

	 	•	 	his 401(k) Contributions Sub-Account.

 

60

 

13.6 Overall Limitations on Non-Hardship Withdrawals

Non-hardship withdrawals made pursuant to this Article shall be subject to the following conditions
and limitations:

	(a)	 	A Participant must apply for a non-hardship withdrawal such number of days prior to the date
as of which it is to be effective as the Administrator may prescribe.

	(b)	 	Non-hardship withdrawals may be made effective as soon as administratively practicable after
the Administrator’s approval of the Participant’s withdrawal application.

13.7 Hardship Withdrawals

A Participant who is employed by an Employer or a Related Company and who is determined by the
Administrator to have incurred a hardship in accordance with the provisions of this Article may
elect, subject to the limitations and conditions prescribed in this Article, to make a cash
withdrawal from his vested interest in any of the following Sub-Accounts:

	 	•	 	his 401(k) Contributions Sub-Account, excluding any income credited to such
Sub-Account.

13.8 Hardship Determination

The Administrator shall grant a hardship withdrawal only if it determines that the withdrawal is
necessary to meet an immediate and heavy financial need of the Participant. An immediate and heavy
financial need of the Participant means a financial need on account of:

	(a)	 	expenses previously incurred by or necessary to obtain for the Participant, the Participant’s
“spouse” (as defined in Section 15.4), or any dependent of the Participant (as defined in Code
Section 152, without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) medical care
deductible under Code Section 213(d), determined without regard to whether the expenses exceed
any applicable income limit;

	(b)	 	costs directly related to the purchase (excluding mortgage payments) of a principal residence
for the Participant;

	(c)	 	payment of tuition, related educational fees, and room and board expenses for the next 12
months of post secondary education for the Participant, or the Participant’s “spouse” (as
defined in Section 15.4), child or other dependent (as defined in Code Section 152, without
regard to subsections (b)(1), (b)(2) and (d)(1)(B) thereof);

 

61

 

	(d)	 	payments necessary to prevent the eviction of the Participant from his principal residence or
foreclosure on the mortgage on the Participant’s principal residence;

	(e)	 	payment of funeral or burial expenses for the Participant’s deceased parent, “spouse” (as
defined in Section 15.4), child or dependent (as defined in Code Section 152, without regard
to subsections (b)(1), (b)(2) and (d)(1)(B) thereof); and

	(f)	 	expenses for the repair of damage to the Participant’s principal residence that would qualify
for a casualty loss deduction under Code Section 165 (determined without regard to whether the
loss exceeds any applicable income limit).

13.9 Satisfaction of Necessity Requirement for Hardship Withdrawals

A withdrawal shall be deemed to be necessary to satisfy an immediate and heavy financial need of a
Participant only if the Participant satisfies all of the following requirements:

	(a)	 	The withdrawal is not in excess of the amount of the immediate and heavy financial need of
the Participant.

	(b)	 	The Participant has obtained all distributions, other than hardship distributions, and all
non-taxable loans currently available under all plans maintained by an Employer or any Related
Company.

	(c)	 	The Participant’s 401(k) Contributions and the Participant’s “elective contributions” and
“employee contributions”, as defined in Section 7.1, under all other qualified and non
qualified deferred compensation plans maintained by an Employer or any Related Company shall
be suspended for at least 6 months after his receipt of the withdrawal.

A Participant shall not fail to be treated as an Eligible Employee for purposes of applying the
limitations contained in Article VII of the Plan merely because his 401(k) Contributions are
suspended in accordance with this Section.

13.10 Conditions and Limitations on Hardship Withdrawals

Hardship withdrawals made pursuant to this Article shall be subject to the following conditions and
limitations:

	(a)	 	A Participant must apply for a hardship withdrawal such number of days prior to the date as
of which it is to be effective as the Administrator may prescribe.

	(b)	 	Hardship withdrawals may be made effective as soon as administratively practicable after the
Administrator’s approval of the Participant’s withdrawal application.

 

62

 

	(c)	 	The amount of a hardship withdrawal may include any amounts necessary to pay any Federal,
state, or local income taxes or penalties reasonably anticipated to result from the
distribution.

13.11 Order of Withdrawal from a Participant’s Sub-Accounts

Distribution of a withdrawal amount shall be made from a Participant’s Sub-Accounts, to the extent
necessary, in the order prescribed by the Administrator, which order shall be uniform with respect
to all Participants and non-discriminatory. If the Sub-Account from which a Participant is
receiving a withdrawal is invested in more than one Investment Fund, the withdrawal shall be
charged against the Investment Funds as directed by the Administrator.

 

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ARTICLE XIV

TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE

14.1 Termination of Employment and Settlement Date

A Participant’s Settlement Date shall occur on the date he terminates employment with the Employers
and all Related Companies because of death, disability, retirement, or other termination of
employment. Written notice of a Participant’s Settlement Date shall be given by the Administrator
to the Trustee.

14.2 Separate Accounting for Non-Vested Amounts

If as of a Participant’s Settlement Date the Participant’s vested interest in his Employer
Contributions Sub-Account is less than 100 percent, that portion of his Employer Contributions
Sub-Account that is not vested shall be accounted for separately from the vested portion and shall
be disposed of as provided in the following Section. If prior to such Settlement Date the
Participant received a distribution under the Plan and the non-vested portion of his Employer
Contributions Sub-Account was not forfeited as provided in the following Section, his vested
interest in his Employer Contributions Sub-Account shall be an amount (“X”) determined by the
following formula:

X = P(AB + D) - D

For purposes of the formula:

	 	P = 	 	 The Participant’s vested interest in his Employer Contributions Sub-Account
on the date distribution is to be made.

	 	AB = 	 	 The balance of the Participant’s Employer Contributions Sub-Account as of
the Valuation Date immediately preceding the date distribution is to be made.

	 	D = 	 	 The amount of all prior distributions from the Participant’s Employer
Contributions Sub-Account. Amounts deemed to have been distributed to a Participant
pursuant to Code Section 72(p), but which have not actually been offset against the
Participant’s Account balance shall not be considered distributions hereunder.

 

64

 

14.3 Disposition of Non-Vested Amounts

That portion of a Participant’s Employer Contributions Sub-Account that is not vested upon the
occurrence of his Settlement Date shall be disposed of as follows:

	(a)	 	If the Participant has no vested interest in his Account upon the occurrence of his
Settlement Date or his vested interest in his Account as of the date of distribution does not
exceed $5,000, resulting in the distribution or deemed distribution to the Participant of his
entire vested interest in his Account, the non-vested balance in the Participant’s Employer
Contributions Sub-Account shall be forfeited and his Account closed as of (i) the
Participant’s Settlement Date, if the Participant has no vested interest in his Account and is
therefore deemed to have received distribution on that date, or (ii) the date actual
distribution is made to the Participant.

	(b)	 	If the Participant’s vested interest in his Account exceeds $5,000 and the Participant is
eligible for and consents in writing to a single sum payment of his vested interest in his
Account, the non-vested balance in the Participant’s Employer Contributions Sub-Account shall
be forfeited and his Account closed as of the date the single sum payment occurs, provided
that such distribution is made because of the Participant’s Settlement Date. A distribution is
deemed to be made because of a Participant’s Settlement Date if it occurs prior to the end of
the second Plan Year beginning on or after the Participant’s Settlement Date.

	(c)	 	If neither paragraph (a) nor paragraph (b) is applicable, the non-vested balance in the
Participant’s Employer Contributions Sub-Account shall continue to be held in such Sub-Account
and shall not be forfeited until the last day of the 5-year period beginning on his Settlement
Date, provided that the Participant is not reemployed by an Employer or a Related Company
prior to that date.

14.4 Treatment of Forfeited Amounts

Whenever the non-vested balance of a Participant’s Employer Contributions Sub-Account is forfeited
during a Plan Year in accordance with the provisions of the preceding Section, the amount of such
forfeiture, determined as of the last day of the Plan Year in which the forfeiture occurs, shall be
applied against the Employer Contribution obligations for any subsequent Contribution Period of the
Employer for which the Participant last performed services as an Employee or against Plan expenses,
as directed by the Administrator. Notwithstanding the foregoing, however, should the amount of all
such forfeitures for any Contribution Period with respect to any Employer exceed the amount of such
Employer’s Employer Contribution obligations for the Contribution Period, the excess amount of such
forfeitures, reduced by any amount used to pay Plan expenses, shall be allocated among
Participants’ Accounts in accordance with the provisions of the following Section.

 

65

 

14.5 Allocations of Forfeitures

Forfeited amounts that are required to be allocated among Participants’ Accounts in accordance with
the preceding Section shall be allocated among the Accounts of
Participants who are Eligible Employees during the Plan Year for which the forfeiture is being
allocated as follows:

	(a)	 	Prior to allocating forfeitures attributable to Matching Contributions and /or Nonelective
contributions among Participants’ Accounts, the Administrator may direct that any portion or
all of such forfeited amounts shall be applied against Plan expenses. The forfeited amounts
to be allocated among Participants’ Accounts shall be reduced by any such amounts that are
applied against Plan expenses as provided herein.

	(b)	 	To receive an allocation of forfeitures attributable to Matching Contributions, a Participant
must have been employed during the Plan Year by the Employer for which the Participant whose
Account is being forfeited last performed services.

	(c)	 	Forfeitures attributable to Matching Contributions shall be allocated in the ratio which an
eligible Participant’s “deferral percentage”, as defined in Section 7.1, bears to the
aggregate value of the “deferral percentages” of all such eligible Participants.

	(d)	 	Forfeitures attributable to Matching Contributions that are credited to a Participant’s
Account hereunder shall be credited to his Regular Matching Contributions Sub-Account. A
Participant’s vested interest in amounts attributable to forfeitures allocated to his Matching
Contributions Sub-Account hereunder shall be determined under the vesting schedule applicable
to Regular Matching Contributions.

	(e)	 	Forfeitures attributable to Matching Contributions that are allocated to a Participant’s
Account hereunder shall be treated as Matching Contributions and included in determining the
Participant’s “contribution percentage”, as defined in Section 7.1, for the Plan Year for
which the forfeitures are allocated.

	(f)	 	To receive an allocation of forfeitures attributable to Nonelective Contributions, a
Participant must have been employed during the Plan Year by the Employer for which the
Participant whose Account is being forfeited last performed services.

	(g)	 	To receive an allocation of forfeitures attributable to Nonelective Contributions hereunder,
a Participant must be employed as a Covered Employee on the last day of the Plan Year.

	(h)	 	Forfeitures attributable to Nonelective Contributions shall be allocated in accordance with
the formula specified in Article VI for Nonelective Contributions.

	(i)	 	Forfeitures attributable to Nonelective Contributions that are to be credited to a
Participant’s Account hereunder shall be credited to his Nonelective Contributions
Sub-Account. A Participant’s vested interest in amounts attributable to forfeitures
allocated to his Nonelective Contributions Sub-Account
hereunder shall be determined under the vesting schedule
applicable to Nonelective Contributions.

 

66

 

14.6 Recrediting of Forfeited Amounts

A former Participant who forfeited the non-vested portion of his Employer Contributions Sub-Account
in accordance with the provisions of paragraph (a) or (b) of Section 14.3 and who is reemployed by
an Employer or a Related Company shall have such forfeited amounts recredited to a new Account in
his name, without adjustment for interim gains or losses experienced by the Trust, if:

	(a)	 	he returns to employment with an Employer or a Related Company before the end of the 5-year
period beginning on the date he received, or is deemed to have received, distribution of his
vested interest in his Account;

	(b)	 	he resumes employment covered under the Plan before the end of the 5-year period beginning on
the date he is reemployed; and

	(c)	 	if he received actual distribution of his vested interest in his Account, he repays to the
Plan the full amount of such distribution that is attributable to Employer Contributions
before the end of the 5-year period beginning on the date he is reemployed.

Funds needed in any Plan Year to recredit the Account of a Participant with the amounts of prior
forfeitures in accordance with the preceding sentence shall come first from forfeitures that arise
during such Plan Year, and then from Trust income earned in such Plan Year, to the extent that it
has not yet been allocated among Participants’ Accounts as provided in Article XI, with each Trust
Fund being charged with the amount of such income proportionately, unless his Employer chooses to
make an additional Employer Contribution, and shall finally be provided by his Employer by way of a
separate Employer Contribution.

 

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ARTICLE XV

DISTRIBUTIONS

15.1 Distributions to Participants

Subject to the provisions of Section 15.4, a Participant whose Settlement Date occurs shall receive
distribution of his vested interest in his Account in the form provided under Article XVI beginning
as soon as reasonably practicable following his Settlement Date or the date his application for
distribution is filed with the Administrator, if later.

15.2 Partial Distributions to Retired or Terminated Participants

A Participant whose Settlement Date has occurred, but who has not reached his Required Beginning
Date, may elect to receive distribution of all or any portion of his Account at any time prior to
his Required Beginning Date in a cash withdrawal or in any other form provided in Article XVI.

15.3 Distributions to Beneficiaries

Subject to the provisions of Section 15.4, if a Participant dies prior to his Benefit Payment Date,
his Beneficiary shall receive distribution of the Participant’s vested interest in his Account in
the form provided under Article XVI beginning as soon as reasonably practicable following the date
the Beneficiary’s application for distribution is filed with the Administrator. If distribution is
to be made to a Participant’s Spouse, it shall be made available within a reasonable period of time
after the Participant’s death that is no less favorable than the period of time applicable to other
distributions.

If a Participant dies after the date distribution of his vested interest in his Account begins
under this Article, but before his entire vested interest in his Account is distributed, his
Beneficiary shall receive distribution of the remainder of the Participant’s vested interest in his
Account beginning as soon as reasonably practicable following the Participant’s date of death.

15.4 Code Section 401(a)(9) Requirements

The provisions of this Section take precedence over any inconsistent provision of the Plan;
provided that the provisions of this Section are not intended to create additional forms of payment
that are not otherwise provided under Article XVI.

To the extent required under Code Section 401(a)(9), all distributions made from the Plan shall be
determined and made in accordance with the provisions of Code Section 401(a)(9) and the Treasury
Regulations issued thereunder, as set forth in this Section.

 

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	(a)	 	A Participant’s vested interest in his Account shall be distributed to the Participant no
later than the Participant’s Required Beginning Date.

	(b)	 	If a Participant dies on or after his Required Beginning Date, but before his vested interest
in his Account has been distributed in full, the remainder of the Participant’s vested Account
balance shall be distributed to the Participant’s Beneficiary in a single sum payment as soon
as reasonably practicable following the Participant’s death.

	(c)	 	If a Participant dies before his Required Beginning Date and before his vested interest in
his Account has been distributed in full, the Participant’s vested Account balance shall be
distributed to the Participant’s Beneficiary in a single sum payment no later than the 5th
anniversary of the Participant’s death; provided that if the Participant’s “spouse” is his
sole “designated beneficiary” with respect to all or any portion of the Participant’s vested
Account, the “spouse” may elect to postpone payment until December 31 of the calendar year in
which the Participant would have attained age 70 1/2, if later. The “spouse’s” election to
defer payment must be made no later than September 30 of the calendar year that contains the
5th anniversary of the Participant’s death.
	 
	 	 	If the Participant’s “spouse” is a sole “designated beneficiary” with respect to all or any
portion of the Participant’s interest and the “spouse” dies after the Participant but
before distribution to the “spouse” is made, the rules described above shall be applied
with respect to the interest for which the “spouse” was the sole “designated beneficiary,”
substituting the date of the “spouse’s” death for the date of the Participant’s death. A
Participant’s “spouse” qualifies as the Participant’s sole “designated beneficiary” if she
is entitled to the Participant’s entire vested interest in his Account or his entire vested
interest in a segregated portion of the Participant’s Account and no other “designated
beneficiary” is entitled to any portion of that interest unless the “spouse” dies prior to
receiving full distribution of that interest.

	(d)	 	For purposes of this Section the following terms have the following meanings:

	 	(i)	 	A Participant’s “designated beneficiary” means the individual who is the
Participant’s Beneficiary under Article XVII of the Plan and is the designated
beneficiary under Code Section 401(a)(9) and Treasury Regulations Section
1.401(a)(9)-4.

	 	(ii)	 	A Participant’s “spouse” means the person of the opposite sex to whom the
Participant is married in a legal union between one man and one woman as husband and
wife.

 

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15.5 Cash Outs and Participant Consent

Notwithstanding any other provision of the Plan to the contrary, if a Participant’s vested interest
in his Account does not exceed $5,000, distribution of such vested interest shall be made to the
Participant in a single sum payment or through a direct rollover, as described in Article XVI, as
soon as reasonably practicable following his Settlement Date.

If a Participant has no vested interest in his Account on his Settlement Date, he shall be deemed
to have received distribution of such vested interest on his Settlement Date.

If a Participant’s vested interest in his Account exceeds $5,000, distribution shall not commence
to such Participant prior to his Normal Retirement Date or the date he attains age 62, if later,
without the Participant’s written consent.

15.6 Automatic Rollover of Mandatory Distributions

If distribution of a Participant’s vested interest is to be made to a Participant as provided in
the preceding Section before the later of the Participant’s Normal Retirement Date or the date the
Participant attains age 62, and the amount of such vested interest exceeds $1,000, distribution of
such vested interest shall be made through a direct rollover to an individual retirement plan
selected by the Administrator, unless the Participant affirmatively elects distribution in a single
sum payment or through a direct rollover to an “eligible retirement plan” (as defined in Code
Section 402(c)(8)(B), modified as provided in Code Section 401(a)(31)(E)) specified by the
Participant. Any distribution made to a Participant’s surviving Spouse or other Beneficiary or to
an alternate payee under a qualified domestic relations order shall not be subject to the automatic
rollover provisions described in the preceding sentence.

15.7 Required Commencement of Distribution

Unless the Participant elects a later date, distribution of his vested interest in his Account
shall commence to the Participant no later than 60 days after the close of the Plan Year in which
occurs the latest of (i) the Participant’s Normal Retirement Date, (ii) the Participant’s
attainment of age 65, (iii) the tenth anniversary of the year in which the Participant commenced
participation, or (iv) the Participant’s Settlement Date. A Participant who does not make
application for his benefit to commence shall be deemed to have elected to postpone distribution
hereunder.

15.8 Reemployment of a Participant

If a Participant whose Settlement Date has occurred is reemployed by an Employer or a Related
Company, he shall lose his right to any distribution or further distributions from the Trust
arising from his prior Settlement Date and his interest in the Trust shall
thereafter be treated in the same manner as that of any other Participant whose Settlement Date has
not occurred.

 

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15.9 Restrictions on Alienation

Except as provided in Code Section 401(a)(13) (relating to qualified domestic relations orders),
Code Section 401(a)(13)(C) and (D) (relating to offsets ordered or required under a criminal
conviction involving the Plan, a civil judgment in connection with a violation or alleged violation
of fiduciary responsibilities under ERISA, or a settlement agreement between the Participant and
the Department of Labor in connection with a violation or alleged violation of fiduciary
responsibilities under ERISA), Treasury Regulations Section 1.401(a)-13(b)(2) (relating to Federal
tax levies and judgments), or as otherwise required by law, no benefit under the Plan at any time
shall be subject in any manner to anticipation, alienation, assignment (either at law or in
equity), encumbrance, garnishment, levy, execution, or other legal or equitable process; and no
person shall have power in any manner to anticipate, transfer, assign (either at law or in equity),
alienate or subject to attachment, garnishment, levy, execution, or other legal or equitable
process, or in any way encumber his benefits under the Plan, or any part thereof, and any attempt
to do so shall be void.

15.10 Facility of Payment

If the Administrator finds that any individual to whom an amount is payable hereunder is incapable
of attending to his financial affairs because of any mental or physical condition, including the
infirmities of advanced age, such amount may, in the discretion of the Administrator, be paid to
such individual’s court appointed guardian or to another person with a valid power of attorney. The
Trustee shall make such payment only upon receipt of written instructions to such effect from the
Administrator. Any such payment shall be charged to the Account from which the payment would
otherwise have been paid to the individual found incapable of attending to his financial affairs
and shall be a complete discharge of any liability therefor under the Plan.

If distribution is to be made to a minor Beneficiary, the Administrator may, in its discretion, pay
the amount to a duly qualified guardian or other legal representative, to an adult relative under
the applicable state Uniform Gifts to Minors Act, as custodian, or to a trust that has been
established for the benefit of the minor. Any such payment shall be charged to the Account from
which the payment would otherwise have been paid to the minor and shall be a complete discharge of
any liability therefor under the Plan.

15.11 Inability to Locate Payee and Non-Negotiated Checks

If any benefit becomes payable to any person, or to the executor or administrator of any deceased
person, and if that person or his executor or administrator does not present himself to the
Administrator within a reasonable period after the Administrator mails written notice of his
eligibility to receive a distribution hereunder to his last known
address and makes such other diligent effort to locate the person as the Administrator determines,
such as (1) providing a distribution notice to the lost Participant at his/her last known address
by certified mail, (2) use of the Internal Revenue Service letter forwarding program under IRS
Revenue Procedure 94-22, (3) use of a commercial locater service, the internet or other general
search method, and (4) use of the Social Security Administration search program, that benefit will
be forfeited. However, if the payee later files a claim for that benefit, the benefit will be
restored.

 

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If a distribution check has been issued and is outstanding for more than 180 days and the
Administrator has been unable to locate the payee after diligent efforts have been made to do so,
then except as specifically directed by the Administrator, the amount of the check shall be
re-deposited to the Plan and forfeited. However, if the payee is subsequently located, the check
amount will be restored to an Account established on the payee’s behalf, without adjustment for
investment gains or losses since the date of issuance.

Any amount forfeited under this Section shall be applied against the Employer Contribution
obligations for any subsequent Contribution Period of the Employer for which the Participant last
performed services as an Employee or against Plan expenses, as directed by the Administrator.
Notwithstanding the foregoing, however, should the amount of all such forfeitures for any
Contribution Period with respect to any Employer exceed the amount of such Employer’s Employer
Contribution obligations for the Contribution Period, the excess amount of such forfeitures shall
be the Employer’s Employer Contribution obligations for the following Contribution Period.

Forfeited amounts that are required to be allocated among Participants’ accounts in accordance with
the preceding paragraphs shall be allocated among the Accounts of Participants who are Eligible
Employees during the Plan Year for which the forfeiture is being allocated as follows:

	(a)	 	Prior to allocating forfeitures hereunder among Participants’ Accounts, the Administrator may
direct that any portion or all of such forfeited amounts shall be applied against Plan
expenses. The forfeited amounts to be allocated among Participants’ Accounts shall be reduced
by any such amounts that are applied against Plan expenses as provided herein.

	(b)	 	To receive an allocation of forfeitures hereunder, a Participant must have been employed
during the Plan Year by the Employer for which the Participant whose Account is being
forfeited last performed services.

	(c)	 	To receive an allocation of forfeitures hereunder, a Participant must be employed as a
Covered Employee on the last day of the Plan Year. Notwithstanding any other provision of the
Plan to the contrary, the last day allocation requirement described above shall not apply to
an Eligible Employee who terminates employment during the Plan Year on or after his Normal
Retirement Date or because of death or Disability.

 

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	(d)	 	Forfeitures attributable to Nonelective Contributions shall be allocated in accordance with
the formula specified in Article VI for Nonelective Contributions.

	(e)	 	Forfeitures that are to be credited to a Participant’s Account hereunder shall be credited to
his Nonelective Contributions Sub-Account. A Participant’s vested interest in amounts
attributable to forfeitures allocated to his Nonelective Contributions Sub-Account hereunder
shall be determined under the vesting schedule applicable to Nonelective Contributions.

15.12 Distribution Pursuant to Qualified Domestic Relations Orders

Notwithstanding any other provision of the Plan to the contrary, if a qualified domestic relations
order so provides, distribution may be made to an alternate payee pursuant to a qualified domestic
relations order, as defined in Code Section 414(p), regardless of whether the Participant’s
Settlement Date has occurred or whether the Participant is otherwise entitled to receive a
distribution under the Plan.

A Participant’s Spouse or former Spouse who does not qualify as his “spouse” (as defined in Section
15.4) or his Domestic Partner or former Domestic Partner shall not qualify as an alternate payee
hereunder unless he qualifies as a dependent of the Participant.

 

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ARTICLE XVI

FORM OF PAYMENT

16.1 Form of Payment

Distribution shall be made to a Participant, or his Beneficiary, if the Participant has died, in a
single sum payment.

16.2 Direct Rollover

Notwithstanding any other provision of the Plan to the contrary, in lieu of receiving distribution
in the form of payment provided under this Article, a “qualified distributee” may elect in writing,
in accordance with rules prescribed by the Administrator, to have a portion or all of any “eligible
rollover distribution” paid directly by the Plan to the “eligible retirement plan” designated by
the “qualified distributee”. Any such payment by the Plan to another “eligible retirement plan”
shall be a direct rollover.

Notwithstanding the foregoing, a “qualified distributee” may not elect a direct rollover with
respect to an “eligible rollover distribution” if the total value of the “eligible rollover
distributions” expected to be made to the “qualified distributee” for the year is less than $200 or
with respect to a portion of an “eligible rollover distribution” if the value of such portion is
less than $500.

For purposes of this Section, the following terms have the following meanings:

	(a)	 	An “eligible retirement plan” means any of the following: (i) an individual retirement
account described in Code Section 408(a), (ii) an individual retirement annuity described in
Code Section 408(b), (iii) an annuity plan described in Code Section 403(a) that accepts
rollovers, (iv) a qualified trust described in Code Section 401(a) that accepts rollovers, (v)
an annuity contract described in Code Section 403(b) that accepts rollovers, (vi) an eligible
plan under Code Section 457(b) that is maintained by a state, political subdivision of a
state, or any agency or instrumentality of a state or political subdivision of a state and
that agrees to separately account for amounts transferred into such plan from the Plan, or
(vii) effective for distributions made on or after January 1, 2008, a Roth IRA, as described
in Code Section 408A, provided, that for distributions made prior to January 1, 2010, such
rollover shall be subject to the limitations contained in Code Section 408A(c)(3)(B).
	 
	 	 	Notwithstanding the foregoing, effective for distributions made in Plan Years beginning
after December 31, 2009, an “eligible retirement plan” with respect to a “qualified
distributee” other than the Participant, the Participant’s “spouse” (as defined in Section
15.4), or the Participant’s former “spouse” (as defined in Section 15.4) means either an
individual retirement account described in Code
Section 408(a) or an individual retirement annuity described in Code Section 408(b) (an
“IRA”). Such IRA must be treated as an IRA inherited from the deceased Participant by the
“qualified distributee” and must be established in a manner that identifies it as such.

 

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	(b)	 	An “eligible rollover distribution” means any distribution of all or any portion of the
balance of a Participant’s Account; provided, however, that an eligible rollover distribution
does not include the following:

	 	(i)	 	any distribution to the extent such distribution is required under Code
Section 401(a)(9).

	 	(ii)	 	any hardship withdrawal made in accordance with the provisions of Article
XIII.

	(c)	 	A “qualified distributee” means a Participant, his surviving “spouse” (as defined in Section
15.4), or his “spouse” or former “spouse” (as defined in Section 15.4) who is an alternate
payee under a qualified domestic relations order, as defined in Code Section 414(p).
Notwithstanding the foregoing, effective for distributions made in Plan Years beginning after
December 31, 2009, a “qualified distributee” includes a Participant’s non-spouse Beneficiary
who is his designated beneficiary within the meaning of Code Section 401(a)(9)(E).

16.3 Notice Regarding Form of Payment

Within the 60-day period ending 30 days before a Participant’s Benefit Payment Date, the
Administrator shall provide the Participant with a written explanation of his right to defer
distribution until his Normal Retirement Date, or such later date as may be provided in the Plan,
his right to make a direct rollover, and the form of payment provided under the Plan. Distribution
of the Participant’s Account may commence fewer than 30 days after such notice is provided to the
Participant if (i) the Administrator clearly informs the Participant of his right to consider his
election of whether or not to make a direct rollover or to receive a distribution prior to his
Normal Retirement Date for a period of at least 30 days following his receipt of the notice and
(ii) the Participant, after receiving the notice, affirmatively elects an early distribution.

16.4 Distribution in the Form of Employer Stock

Notwithstanding any other provision of the Plan to the contrary, to the extent that his Account is
invested in Employer stock on the date distribution is to be made to a Participant, the Participant
may elect to receive distribution of such Account in the form of Employer stock.

 

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ARTICLE XVII

BENEFICIARIES

17.1 Designation of Beneficiary

The Beneficiary of a Participant who does not have a Spouse or a Domestic Partner shall be the
person or persons designated by such Participant in accordance with rules prescribed by the
Administrator. The Beneficiary of a Participant who has a Spouse or a Domestic Partner shall be his
Spouse or Domestic Partner, unless the Participant designates a person or persons other than his
Spouse or Domestic Partner as Beneficiary with the written consent of his Spouse or Domestic
Partner. For purposes of this Section, a Participant shall be treated as not having a Spouse or a
Domestic Partner and such Spouse’s or Domestic Partner’s consent shall not be required if the
Participant does not have a Spouse or Domestic Partner on his Benefit Payment Date.

If no Beneficiary has been designated pursuant to the provisions of this Section, or if no
Beneficiary survives the Participant and he has no surviving Spouse or Domestic Partner, then the
Beneficiary under the Plan shall be the deceased Participant’s surviving children in equal shares
or, if there are no surviving children, the Participant’s estate. If a Beneficiary dies after
becoming entitled to receive a distribution under the Plan but before distribution is made to him
in full, and if the Participant has not designated another Beneficiary to receive the balance of
the distribution in that event, the estate of the deceased Beneficiary shall be the Beneficiary as
to the balance of the distribution.

17.2 Spousal Consent Requirements

Any written consent given by a Participant’s Spouse or Domestic Partner pursuant to this Article
must acknowledge the effect of the action taken and must be witnessed by a Plan representative or a
notary public. In addition, the Spouse’s or Domestic Partner’s written consent must either (i)
specify any non-Spouse Beneficiary (or, if applicable, any Beneficiary other than the Domestic
Partner) designated by the Participant and that such Beneficiary may not be changed without the
Spouse’s or Domestic Partner’s written consent or (ii) acknowledge that the Spouse or Domestic
Partner has the right to limit consent to a specific Beneficiary, but permit the Participant to
change the designated Beneficiary without the Spouse’s or Domestic Partner’s further consent. A
Participant’s Spouse or Domestic Partner will be deemed to have given written consent to the
Participant’s designation of Beneficiary if the Participant establishes to the satisfaction of a
Plan representative that such consent cannot be obtained because the Spouse or Domestic Partner
cannot be located or because of other circumstances set forth in Section 401(a)(11) of the Code and
regulations issued thereunder. Any written consent given or deemed to have been given by a
Participant’s Spouse or Domestic Partner hereunder shall be valid only with respect to the Spouse
or Domestic Partner who signs the consent.

 

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17.3 Revocation of Beneficiary Designation Upon Divorce

Notwithstanding any other provision of this Article XVII to the contrary, if a Participant
designates his or her Spouse as Beneficiary under the Plan, such designation shall automatically
become null and void as of the date of any final divorce or similar decree or order unless either
(i) the Participant re-designates such former Spouse as his Beneficiary after the date of the final
decree or order or (ii) such former Spouse is designated as the Participant’s Beneficiary under a
qualified domestic relations order; provided that such former Spouse shall be the Participant’s
Beneficiary under this clause (ii) only to the extent required in accordance with the qualified
domestic relations order.

Similarly, and notwithstanding any other provision of this Article XVII to the contrary, if a
Participant designates his Domestic Partner as Beneficiary under the Plan, such designation shall
automatically become null and void as of the date of the dissolution of the domestic partnership
unless either (i) the Participant re-designates such former Domestic Partner as his Beneficiary
after the date of such dissolution or (ii) such former Domestic Partner is the Participant’s
dependent alternate payee under a qualified domestic relations order and is designated as the
Participant’s Beneficiary under such order.

 

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ARTICLE XVIII

ADMINISTRATION

18.1 Authority of the Sponsor

The Sponsor, which shall be the administrator for purposes of ERISA and the plan administrator for
purposes of the Code, shall be responsible for the administration of the Plan and, in addition to
the powers and authorities expressly conferred upon it in the Plan, shall have all such powers and
authorities as may be necessary to carry out the provisions of the Plan, including the power and
authority to interpret and construe the provisions of the Plan, to make benefit determinations, and
to resolve any disputes which arise under the Plan. The Sponsor may employ such attorneys, agents,
and accountants as it may deem necessary or advisable to assist in carrying out its duties
hereunder. The Sponsor shall be a “named fiduciary” as that term is defined in ERISA Section
402(a)(2). The Sponsor, by action of its board of directors, may:

	(a)	 	allocate any of the powers, authority, or responsibilities for the operation and
administration of the Plan (other than trustee responsibilities as defined in ERISA Section
405(c)(3)) among named fiduciaries; and

	(b)	 	designate a person or persons other than a named fiduciary to carry out any of such powers,
authority, or responsibilities;

except that no allocation by the Sponsor of, or designation by the Sponsor with respect to, any of
such powers, authority, or responsibilities to another named fiduciary or a person other than a
named fiduciary shall become effective unless such allocation or designation shall first be
accepted by such named fiduciary or other person in a writing signed by it and delivered to the
Sponsor.

18.2 Discretionary Authority

In carrying out its duties under the Plan, including making benefit determinations, interpreting or
construing the provisions of the Plan, making factual determinations, and resolving disputes, the
Sponsor (or any individual to whom authority has been delegated in accordance with Section 18.1)
shall have absolute discretionary authority. The decision of the Sponsor (or any individual to whom
authority has been delegated in accordance with Section 18.1) shall be final and binding on all
persons and entitled to the maximum deference allowed by law.

18.3 Action of the Sponsor

Any act authorized, permitted, or required to be taken under the Plan by the Sponsor and which has
not been delegated in accordance with Section 18.1, may be taken by a majority of the members of
the board of directors of the Sponsor, either by vote at a
meeting, or in writing without a meeting, or by the employee or employees of the Sponsor designated
by the board of directors to carry out such acts on behalf of the Sponsor. All notices, advice,
directions, certifications, approvals, and instructions required or authorized to be given by the
Sponsor under the Plan shall be in writing and signed by either (i) a majority of the members of
the Sponsor’s board of directors or by such member or members as may be designated by an instrument
in writing, signed by all the members thereof, as having authority to execute such documents on its
behalf, or (ii) the employee or employees authorized to act for the Sponsor in accordance with the
provisions of this Section.

 

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18.4 Claims Review Procedure

Except to the extent that the provisions of any collective bargaining agreement provide another
method of resolving claims for benefits under the Plan, the provisions of this Section shall
control whenever a claim for benefits under the Plan filed by any person (referred to in this
Section as the “Claimant”) is denied. The provisions of this Section shall also control whenever a
Claimant seeks a remedy under any provision of ERISA or other applicable law in connection with any
error regarding his Account (including a failure or error in implementing investment directions)
and such claim is denied.

Whenever a claim under the Plan is denied, whether in whole or in part, the Sponsor shall transmit
a written notice of such decision to the Claimant within 90 days of the date the claim was filed
or, if special circumstances require an extension, within 180 days of such date, which notice shall
be written in a manner calculated to be understood by the Claimant and shall contain a statement of
(i) the specific reasons for the denial of the claim, (ii) specific reference to pertinent Plan
provisions on which the denial is based, (iii) a description of any additional material or
information necessary for the Claimant to perfect the claim and an explanation of why such
information is necessary, (iv) that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, (v) records and other information
relevant to the Claimant’s claim, a description of the review procedures and in the event of an
adverse review decision, a statement describing any voluntary review procedures and the Claimant’s
right to obtain copies of such procedures, and (vi) a statement that there is no further
administrative review following the initial review, and that the Claimant has a right to bring a
civil action under ERISA Section 502(a) if the Sponsor’s decision on review is adverse to the
Claimant. The notice shall also include a statement advising the Claimant that, within 60 days of
the date on which he receives such notice, he may obtain review of such decision in accordance with
the procedures hereinafter set forth. Within such 60-day period, the Claimant or his authorized
representative may request that the claim denial be reviewed by filing with the Sponsor a written
request therefor, which request shall contain the following information:

	(a)	 	the date on which the Claimant’s request was filed with the Sponsor; provided that the date
on which the Claimant’s request for review was in fact filed with the
Sponsor shall control in the event that the date of the actual filing is later than the
date stated by the Claimant pursuant to this paragraph;

 

79

 

	(b)	 	the specific portions of the denial of his claim which the Claimant requests the Sponsor to
review;

	(c)	 	a statement by the Claimant setting forth the basis upon which he believes the Sponsor should
reverse the previous denial of his claim for benefits and accept his claim as made; and

	(d)	 	any written material (offered as exhibits) which the Claimant desires the Sponsor to examine
in its consideration of his position as stated pursuant to paragraph (c) of this Section.

Within 60 days of the date determined pursuant to paragraph (a) of this Section or, if special
circumstances require an extension, within 120 days of such date, the Sponsor shall conduct a full
and fair review of the decision denying the Claimant’s claim for benefits and shall render its
written decision on review to the Claimant. The Sponsor’s decision on review shall be written in a
manner calculated to be understood by the Claimant and shall specify the reasons and Plan
provisions upon which the Sponsor’s decision was based.

Notwithstanding the foregoing, special procedures apply for processing claims and reviewing prior
claim determinations if a Claimant’s claim for benefits is contingent upon a determination as to
whether a Participant is Disabled under the Plan.

18.5 Special Rules Applicable to Claims Related to Investment Errors

Any person alleging that there has been a failure or error in implementing investment directions
with respect to a Participant’s Account must file a claim with the Administrator on or before the
expiration of the statute of limitations relating to benefit claims as set forth in ERISA. Any
claim filed outside of such period shall be limited to the benefit that would have been determined
if the claim were timely filed, and therefore any adjustments shall be calculated for such period
only.

18.6 Exhaustion of Remedies

No civil action for benefits under the Plan shall be brought unless and until the aggrieved person
has (a) submitted a timely claim for benefits in accordance with this Article, (b) been notified by
the Administrator that the claim has been denied, (c) filed a written request for a review of the
claim in accordance with the preceding Section, (d) been notified in writing of an adverse benefit
determination on review, and (e) filed the civil action within 1 year of the date he receives a
final adverse determination of his claim on review.

 

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18.7 Qualified Domestic Relations Orders

The Sponsor shall establish reasonable procedures to determine the status of domestic relations
orders and to administer distributions under domestic relations orders which are deemed to be
qualified orders. Such procedures shall be in writing and shall comply with the provisions of Code
Section 414(p) and regulations issued thereunder.

A Participant’s Spouse or former Spouse who does not qualify as his “spouse” (as defined in Section
15.4) or his Domestic Partner or former Domestic Partner shall not qualify as an alternate payee
under a qualified domestic relations order unless he qualifies as a dependent of the Participant.

18.8 Indemnification

In addition to whatever rights of indemnification the members of the Sponsor’s board of directors
or any employee or employees of the Sponsor to whom any power, authority, or responsibility is
delegated pursuant to Section 18.3, may be entitled under the articles of incorporation or
regulations of the Sponsor, under any provision of law, or under any other agreement, the Sponsor
shall satisfy any liability actually and reasonably incurred by any such person or persons,
including expenses, attorneys’ fees, judgments, fines, and amounts paid in settlement (other than
amounts paid in settlement not approved by the Sponsor), in connection with any threatened, pending
or completed action, suit, or proceeding which is related to the exercising or failure to exercise
by such person or persons of any of the powers, authority, responsibilities, or discretion as
provided under the Plan, or reasonably believed by such person or persons to be provided hereunder,
and any action taken by such person or persons in connection therewith, unless the same is
judicially determined to be the result of such person or persons’ gross negligence or willful
misconduct.

18.9 Prudent Man Standard of Care

The Trustee, the Sponsor and any other fiduciary under the Plan shall discharge his duties under
the Plan solely in the interests of Participants and Beneficiaries and, in accordance with the
requirements of ERISA Section 404(a)(1)(B), with the care, skill, prudence, and diligence under the
prevailing circumstances that a prudent man acting in a like capacity and familiar with such
matters would use in conducting an enterprise of like character with like aims.

18.10 Actions Binding

Subject to the provisions of Section 18.4, any action taken by the Sponsor which is authorized,
permitted, or required under the Plan shall be final and binding upon the Employers, the Trustee,
all persons who have or who claim an interest under the Plan, and all third parties dealing with
the Employers or the Trustee.

 

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ARTICLE XIX

AMENDMENT AND TERMINATION

19.1 Amendment by Plan Sponsor

Subject to the provisions of Section 19.3, the Sponsor may at any time and from time to time, by
action of its board of directors, or such officers of the Sponsor as are authorized by its board of
directors, amend the Plan, either prospectively or retroactively. Any such amendment shall be by
written instrument executed by the Sponsor.

19.2 Amendment by Volume Submitter Practitioner

In the event that there is a change in the law applicable to the Plan, as reflected in the Code,
regulations issued thereunder, revenue rulings, or other statements published by the Internal
Revenue Service, the “volume submitter practitioner” may amend the Plan to comply with such changes
on behalf of the Sponsors who have adopted its “specimen plan” prior to the date that its “specimen
plan” is amended to comply with such change. In addition, the “volume submitter practitioner” may
amend the Plan to correct its prior approved “specimen plan.” No amendment by the “volume
submitter practitioner” shall be effective prior to February 17, 2005.

The “volume submitter practitioner” shall maintain, or have maintained on its behalf, a record of
the Sponsors adopting its “specimen plan.” The “volume submitter practitioner” shall make
reasonable and diligent efforts to ensure that a copy of any amendment adopted hereunder is
provided to each Sponsor at the Sponsor’s last known address, as shown in the record maintained in
accordance with the preceding sentence. Where necessary, the “volume submitter practitioner” shall
make reasonable and diligent efforts to ensure that each Sponsor adopts new documents when
necessary.

An amendment made by the “volume submitter practitioner” in accordance with the provisions of this
Section may be made effective on a date prior to the first day of the Plan Year in which it is
adopted if, in published guidance, the Internal Revenue Service either permits or requires such an
amendment to be made to enable the Plan and Trust to satisfy the applicable requirements of the
Code and all requirements for the retroactive amendment are satisfied.

The “volume submitter practitioner” may not amend a Plan on behalf of its Sponsor if either (a) the
Plan modifies the “specimen plan” to incorporate a type of plan that is not permitted under the
volume submitter program, as described in applicable Revenue Procedures or other statements of the
Internal Revenue Service, or (b) the Internal Revenue Service has advised the Sponsor that the Plan
modifies the “specimen plan” in such a manner or to such an extent that the Plan must be treated as
an individually-designed plan and will not receive the extended 6-year remedial amendment cycle
applicable to volume submitter plans.

 

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For purposes of this Section, the following terms have the following meanings:

	(a)	 	The “specimen plan” means the plan with respect to which the Internal Revenue Service has
issued an advisory letter to the “volume submitter practitioner.”
	 
	(b)	 	The “volume submitter practitioner” means Thompson Hine, LLP d/b/a Plan Document Systems.

19.3 Limitation on Amendment

Except as otherwise required by law, no amendment shall be made to the Plan that decreases the
accrued benefit of any Participant or Beneficiary, except that nothing contained herein shall
restrict the right to amend the provisions of the Plan relating to the administration of the Plan
and Trust. Moreover, no such amendment shall be made hereunder which shall permit any part of the
Trust to revert to an Employer or any Related Company or be used or be diverted to purposes other
than the exclusive benefit of Participants and Beneficiaries. The Sponsor shall make no
retroactive amendment to the Plan unless such amendment satisfies the requirements of Code Section
401(b) and/or Treasury Regulations Section 1.401(a)(4)-11(g), as applicable.

19.4 Termination

The Sponsor reserves the right, by action of its board of directors, to terminate the Plan as to
all Employers at any time (the effective date of such termination being hereinafter referred to as
the “termination date”). Upon any such termination of the Plan, the following actions shall be
taken for the benefit of Participants and Beneficiaries:

	(a)	 	As of the termination date, each Investment Fund shall be valued and all Accounts and
Sub-Accounts shall be adjusted in the manner provided in Article XI, with any unallocated
contributions or forfeitures being allocated as of the termination date in the manner
otherwise provided in the Plan. The termination date shall become a Valuation Date for
purposes of Article XI. In determining the net worth of the Trust, there shall be included as
a liability such amounts as shall be necessary to pay all expenses in connection with the
termination of the Trust and the liquidation and distribution of the property of the Trust, as
well as other expenses, whether or not accrued, and shall include as an asset all accrued
income.

	(b)	 	All Accounts shall then be disposed of to or for the benefit of each Participant or
Beneficiary in accordance with the provisions of Article XV as if the termination date were
his Settlement Date; provided, however, that notwithstanding the provisions of Article XV, if
the Plan does not offer an annuity option and if neither his Employer nor a Related Company
establishes or maintains another defined contribution plan (other than an employee stock
ownership plan as
defined in Code Section 4975(e)(7)), the Participant’s written consent to the commencement
of distribution shall not be required regardless of the value of the vested portions of his
Account.

 

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	(c)	 	Notwithstanding the provisions of paragraph (b) of this Section, no distribution shall be
made to a Participant of any portion of the balance of his 401(k) Contributions Sub-Account on
account of Plan termination (other than a distribution made in accordance with Article XIII or
required in accordance with Code Section 401(a)(9)) unless (i) neither his Employer nor a
Related Company establishes or maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7), a tax credit employee
stock ownership plan as defined in Code Section 409, a simplified employee pension as defined
in Code Section 408(k), a SIMPLE IRA plan as defined in Code Section 408(p), a plan or
contract that meets the requirements of Code Section 403(b), or a plan that is described in
Code Section 457(b) or (f)) either at the time the Plan is terminated or at any time during
the period ending 12 months after distribution of all assets from the Plan; provided, however,
that this provision shall not apply if fewer than 2% of the Eligible Employees under the Plan
were eligible to participate at any time in such other defined contribution plan during the 24
month period beginning 12 months before the Plan termination, and (ii) the distribution the
Participant receives is a “lump sum distribution” as defined in Code Section 402(e)(4),
without regard to clauses (I), (II), (III), and (IV) of sub paragraph (D)(i) thereof.

Upon any such Plan termination, the vested interest of each Participant and Beneficiary in his
Employer Contributions Sub-Account shall be 100 percent; and, if there is a partial termination of
the Plan, the vested interest of each Participant and Beneficiary who is affected by the partial
termination in his Employer Contributions Sub-Account shall be 100 percent. For purposes of the
preceding sentence only, the Plan shall be deemed to terminate automatically if there shall be a
complete discontinuance of contributions hereunder by all Employers.

19.5 Inability to Locate Payee on Plan Termination

If distribution of a Participant’s Account is to be made to the Participant, his Beneficiary, or an
alternate payee under a qualified domestic relations order (a “payee”) on account of the
termination of the Plan, and such payee does not present himself to the Administrator within a
reasonable period after the Administrator mails written notice of his eligibility to receive a
distribution hereunder to his last known address and makes such other diligent effort to locate the
person as the Administrator determines, distribution of such Account shall be made at the direction
of the Administrator through a direct rollover to an individual retirement plan established on
behalf of the payee with a provider selected by the Administrator, purchase of an annuity contract
on behalf of the payee, or transfer to another “eligible retirement plan”, as defined in Section
16.2.

 

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19.6 Reorganization

The merger, consolidation, or liquidation of any Employer with or into any other Employer or a
Related Company shall not constitute a termination of the Plan as to such Employer. If an Employer
disposes of substantially all of the assets used by the Employer in a trade or business or disposes
of a subsidiary and in connection therewith one or more Participants terminates employment but
continues in employment with the purchaser of the assets or with such subsidiary, no distribution
from the Plan shall be made to any such Participant from his 401(k) Contributions Sub-Account prior
to his severance from employment (other than a distribution made in accordance with Article XIII or
required in accordance with Code Section 401(a)(9)), except that a distribution shall be permitted
to be made in such a case, subject to the Participant’s consent (to the extent required by law), if
(i) the distribution would constitute a “lump sum distribution” as defined in Code Section
402(e)(4), without regard to clauses (I), (II), (III), and (IV) of sub paragraph (D)(i) thereof,
(ii) the Employer continues to maintain the Plan after the disposition, (iii) the purchaser does
not maintain the Plan after the disposition, and (iv) the distribution is made by the end of the
second calendar year after the calendar year in which the disposition occurred.

19.7 Withdrawal of an Employer

An Employer other than the Sponsor may withdraw from the Plan at any time upon notice in writing to
the Administrator (the effective date of such withdrawal being hereinafter referred to as the
“withdrawal date”), and shall thereupon cease to be an Employer for all purposes of the Plan. An
Employer shall be deemed automatically to withdraw from the Plan in the event of its complete
discontinuance of contributions, or, subject to Section 19.6 and unless the Sponsor otherwise
directs, it ceases to be a Related Company of the Sponsor or any other Employer. Upon the
withdrawal of an Employer, the withdrawing Employer shall determine whether a partial termination
has occurred with respect to its Employees. In the event that the withdrawing Employer determines a
partial termination has occurred, the action specified in Section 19.4 shall be taken as of the
withdrawal date, as on a termination of the Plan, but with respect only to Participants who are
employed solely by the withdrawing Employer, and who, upon such withdrawal, are neither transferred
to nor continued in employment with any other Employer or a Related Company. The interest of any
Participant employed by the withdrawing Employer who is transferred to or continues in employment
with any other Employer or a Related Company, and the interest of any Participant employed solely
by an Employer or a Related Company other than the withdrawing Employer, shall remain unaffected by
such withdrawal; no adjustment to his Accounts shall be made by reason of the withdrawal; and he
shall continue as a Participant hereunder subject to the remaining provisions of the Plan.

 

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ARTICLE XX

ADOPTION BY OTHER ENTITIES

20.1 Adoption by Related Companies

A Related Company that is not an Employer may, with the consent of the Sponsor, adopt the Plan and
become an Employer hereunder by causing an appropriate written instrument evidencing such adoption
to be executed in accordance with the requirements of its organizational authority. Any such
instrument shall specify the effective date of the adoption.

20.2 Effective Plan Provisions

An Employer who adopts the Plan shall be bound by the provisions of the Plan in effect at the time
of the adoption and as subsequently in effect because of any amendment to the Plan.

 

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ARTICLE XXI

MISCELLANEOUS PROVISIONS

21.1 No Commitment as to Employment

Nothing contained herein shall be construed as a commitment or agreement upon the part of any
person to continue his employment with an Employer or Related Company, or as a commitment on the
part of any Employer or Related Company to continue the employment, compensation, or benefits of
any person for any period.

21.2 Benefits

Nothing in the Plan nor the Trust Agreement shall be construed to confer any right or claim upon
any person, firm, or corporation other than the Employers, the Trustee, Participants, and
Beneficiaries.

21.3 No Guarantees

The Employers, the Administrator, and the Trustee do not guarantee the Trust from loss or
depreciation, nor do they guarantee the payment of any amount which may become due to any person
hereunder.

21.4 Expenses

The expenses of operation and administration of the Plan, including the expenses of the
Administrator and fees of the Trustee, shall be paid from the Trust, unless the Sponsor elects to
make payment. To the extent paid from the Trust, administrative expenses shall be paid first from
any forfeitures the Administrator has directed to be used for payment of expenses. Any remaining
expenses shall be allocated among Participants’ Accounts.

Notwithstanding the foregoing, the costs incident to the management of the assets of an Investment
Fund or to the purchase or sale of securities held in an Investment fund shall be allocable to
Accounts invested in such Investment Fund and administrative expenses that are incurred directly
with respect to an individual Participant’s Account will be allocated to that Account.

21.5 Precedent

Except as otherwise specifically provided, no action taken in accordance with the Plan shall be
construed or relied upon as a precedent for similar action under similar circumstances.

 

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21.6 Duty to Furnish Information

The Employers, the Administrator, and the Trustee shall furnish to any of the others any documents,
reports, returns, statements, or other information that the other reasonably deems necessary to
perform its duties hereunder or otherwise imposed by law.

21.7 Merger, Consolidation, or Transfer of Plan Assets

The Plan shall not be merged or consolidated with any other plan, nor shall any of its assets or
liabilities be transferred to another plan, unless, immediately after such merger, consolidation,
or transfer of assets or liabilities, each Participant in the Plan would receive a benefit under
the Plan which is at least equal to the benefit he would have received immediately prior to such
merger, consolidation, or transfer of assets or liabilities (assuming in each instance that the
Plan had then terminated).

21.8 Condition on Employer Contributions

Any contribution of an Employer hereunder is conditioned upon the continued qualification of the
Plan under Code Section 401(a), the exempt status of the Trust under Code Section 501(a), and the
deductibility of the contribution under Code Section 404. Except as otherwise provided in this
Section and Section 21.9, however, in no event shall any portion of the property of the Trust ever
revert to or otherwise inure to the benefit of an Employer or any Related Company.

21.9 Return of Contributions to an Employer

Notwithstanding any other provision of the Plan or the Trust Agreement to the contrary, in the
event any contribution of an Employer made hereunder:

(a) is made under a mistake of fact, or

(b) is disallowed as a deduction under Code Section 404,

such contribution, reduced for any losses experienced by the Trust Fund, may be returned to the
Employer within one year after the payment of the contribution or the disallowance of the deduction
to the extent disallowed, whichever is applicable. In the event the Plan does not initially qualify
under Code Section 401(a), any contribution of an Employer made hereunder may be returned to the
Employer within one year of the date of denial of the initial qualification of the Plan, but only
if an application for determination was made within the period of time prescribed under ERISA
Section 403(c)(2)(B).

21.10 Validity of Plan

The validity of the Plan shall be determined and the Plan shall be construed and interpreted in
accordance with the laws of the state or commonwealth in which the

 

88

 

Trustee has its principal place of business or, if the Trustee is an individual or group of
individuals, the state or commonwealth in which the Sponsor has its principal place of business,
except as preempted by applicable Federal law. The invalidity or illegality of any provision of the
Plan shall not affect the legality or validity of any other part thereof.

21.11 Trust Agreement

The Trust Agreement and the Trust maintained thereunder shall be deemed to be a part of the Plan as
if fully set forth herein and the provisions of the Trust Agreement are hereby incorporated by
reference into the Plan.

21.12 Parties Bound

The Plan shall be binding upon the Employers, all Participants and Beneficiaries hereunder, and, as
the case may be, the heirs, executors, administrators, successors, and assigns of each of them.

21.13 Application of Certain Plan Provisions

For purposes of the general administrative provisions and limitations of the Plan, a Participant’s
Beneficiary or alternate payee under a qualified domestic relations order shall be treated as any
other person entitled to receive benefits under the Plan. Upon any termination of the Plan, any
such Beneficiary or alternate payee under a qualified domestic relations order who has an interest
under the Plan at the time of such termination, which does not cease by reason thereof, shall be
deemed to be a Participant for all purposes of the Plan. A Participant’s Beneficiary, if the
Participant has died, or alternate payee under a qualified domestic relations order shall be
treated as a Participant for purposes of directing investments as provided in Article X.

21.14 Merged Plans

In the event another defined contribution plan (the “merged plan”) is merged into and made a part
of the Plan, each Employee who was eligible to participate in the “merged plan” immediately prior
to the merger shall become an Eligible Employee on the date of the merger. In no event shall a
Participant’s vested interest in his Sub-Account attributable to amounts transferred to the Plan
from the “merged plan” (his “transferee Sub-Account”) on and after the merger be less than his
vested interest in his account under the “merged plan” immediately prior to the merger.
Notwithstanding any other provision of the Plan to the contrary, a Participant’s service credited
for eligibility and vesting purposes under the “merged plan” as of the merger, if any, shall be
included as Eligibility and Vesting Service under the Plan to the extent Eligibility and Vesting
Service are credited under the Plan. Special provisions applicable to a Participant’s “transferee
Sub-Account”, if any, shall be specifically reflected in the Plan or in an Addendum to the Plan.

 

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21.15 Transferred Funds

If funds from another qualified plan are transferred or merged into the Plan, such funds shall be
held and administered in accordance with any restrictions applicable to them under such other plan
to the extent required by law and shall be accounted for separately to the extent necessary to
accomplish the foregoing.

21.16 Veterans Reemployment Rights

Notwithstanding any other provision of the Plan to the contrary, contributions, benefits, and
service credit with respect to qualified military service shall be provided in accordance with Code
Section 414(u). Any contributions required to be made in accordance with this Section shall be
contributed to the Plan within the time period prescribed under applicable regulations or other
guidance. Any Matching Contributions required to be made because of 401(k) Contributions made by a
Participant in accordance with the provisions of Code Section 414(u), shall be contributed to the
Plan as soon as administratively practicable after the date on which the Participant’s
contributions are paid to the Plan. The Administrator shall notify the Trustee of any Participant
with respect to whom additional contributions are made because of qualified military service.
Additional contributions made in accordance with the provisions of this Section that are treated as
401(k) Contributions shall not be included in applying the limitations on 401(k) Contributions
described in Article VII. In addition, any Matching Contributions required to be made because of
401(k) Contributions made by a Participant in accordance with the provisions of Code Section
414(u), shall not be included in applying the limitations on Matching Contributions described in
Article VII.

21.17 Delivery of Cash Amounts

To the extent that the Plan requires the Employers to deliver cash amounts to the Trustee, such
delivery may be made through any means acceptable to the Trustee, including wire transfer.

21.18 Written Communications

Any communication among the Employers, the Administrator, and the Trustee that is stipulated under
the Plan to be made in writing may be made in any medium that is acceptable to the receiving party
and permitted under applicable law. In addition, any communication or disclosure to or from
Participants and/or Beneficiaries that is required under the terms of the Plan to be made in
writing may be provided in any other medium (electronic, telephonic, or otherwise) that is
acceptable to the Administrator and permitted under applicable law.

 

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21.19 Trust to Trust Transfer

Any Employee, including an Employee who has not yet satisfied any age and/or service requirements
to become an Eligible Employee under the Plan, may, with the approval of the Administrator, have
Transfer Contributions made to the Plan on his behalf by causing assets to be directly transferred
by the trustee of another qualified retirement plan to the Trustee of the Plan.

Amounts contributed to the Plan through a direct rollover shall not constitute Transfer
Contributions.

Transfer Contributions made on behalf of an Employee shall be deposited in the Trust and credited
to a Transfer Contributions Sub-Account established in the Employee’s name. Such Sub-Account shall
share in the allocation of earnings, losses, and expenses of the Trust Fund(s) in which it is
invested, but shall not share in allocations of Employer Contributions.

In the event a Transfer Contribution is made on behalf of an Employee who has not yet satisfied the
requirements to become an Eligible Employee under the Plan, such Transfer Contributions Sub-Account
shall represent the Employee’s sole interest in the Plan until he becomes an Eligible Employee.

21.20 Plan Correction Procedures

The Employer shall take such action as it deems necessary to correct any Plan failure, including,
but not limited to, operational failures, documentation failures (such as a failure to timely
amend), failures affecting Plan qualification, etc. Subject to the requirements of the Employee
Plans Compliance Resolution System, as set forth in Revenue Procedure 2006-27, or any superseding
guidance (“EPCRS”), the Employer may adopt any correction method that it deems appropriate under
the circumstances. In addition to any correction method specified in the Plan, the Employer may,
where appropriate, make correction in accordance with EPCRS, including the making of a Qualified
Nonelective Contribution permitted under EPCRS, but not otherwise provided under the Plan.

In the event of a fiduciary breach or a prohibited transaction, correction shall be made in
accordance with the requirements of ERISA and the Code.

 

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ARTICLE XXII

TOP-HEAVY PROVISIONS

22.1 Definitions

For purposes of this Article, the following terms shall have the following meanings:

The “compensation” of an employee means his “415 compensation” as defined in Section 7.1.

The “determination date” with respect to any Plan Year means the last day of the preceding Plan
Year, except that the “determination date” with respect to the first Plan Year of the Plan, shall
mean the last day of such Plan Year.

A “key employee” means any Employee or former Employee (including any deceased Employee) who at any
time during the Plan Year that includes the “determination date” was an officer of an Employer or a
Related Company having annual “compensation” greater than $130,000 (as adjusted under Section
416(i)(1) of the Code for Plan Years beginning after December 31, 2002), a 5% owner of an Employer
or a Related Company, or a 1% owner of an Employer or a Related Company having annual
“compensation” of more than $150,000.

A “non-key employee” means any Employee who is not a “key employee”.

A “permissive aggregation group” means those plans included in each Employer’s “required
aggregation group” together with any other plan or plans of the Employer or any Related Company, so
long as the entire group of plans would continue to meet the requirements of Code Sections
401(a)(4) and 410.

A “required aggregation group” means the group of tax-qualified plans maintained by an Employer or
a Related Company consisting of each plan in which a “key employee” participates or participated at
any time during the Plan Year containing the “determination date” or any of the 4 preceding Plan
Years (regardless of whether the plan has terminated) and each other plan that enables a plan in
which a “key employee” participates to meet the requirements of Code Section 401(a)(4) or Code
Section 410.

A “top-heavy group” with respect to a particular Plan Year means a “required” or “permissive
aggregation group” if the sum, as of the “determination date”, of the present value of the
cumulative accrued benefits for “key employees” under all defined benefit plans included in such
group and the aggregate of the account balances of “key employees” under all defined contribution
plans included in such group exceeds 60 percent of a similar sum determined for all employees
covered by the plans included in such group.

 

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A “top heavy plan” with respect to a particular Plan Year means (i) in the case of a defined
contribution plan (including any simplified employee pension plan), a plan for which, as of the
“determination date”, the aggregate of the accounts (within the meaning of Code Section 416(g) and
the regulations and rulings thereunder) of “key employees” exceeds 60 percent of the aggregate of
the accounts of all participants under the plan, with the accounts valued as of the relevant
valuation date and increased for any distribution of an account balance made during the 1-year
period ending on the “determination date” (5-year period ending on the “determination date” if
distribution is made for any reason other than severance from employment, death, or disability),
(ii) in the case of a defined benefit plan, a plan for which, as of the “determination date”, the
present value of the cumulative accrued benefits payable under the plan (within the meaning of Code
Section 416(g) and the regulations and rulings thereunder) to “key employees” exceeds 60 percent of
the present value of the cumulative accrued benefits under the plan for all employees, with the
present value of accrued benefits for employees (other than “key employees”) to be determined under
the accrual method uniformly used under all plans maintained by an Employer or, if no such method
exists, under the slowest accrual method permitted under the fractional accrual rate of Code
Section 411(b)(1)(C) and including the present value of any part of any accrued benefits
distributed during the 1-year period ending on the “determination date” (5-year period ending on
the “determination date” if distribution is made for any reason other than severance from
employment, death, or disability), and (iii) any plan (including any simplified employee pension
plan) included in a “required aggregation group” that is a “top heavy group”. For purposes of this
paragraph, the accounts and accrued benefits of any employee who has not performed services for an
Employer or a Related Company during the 1 year period ending on the “determination date” shall be
disregarded. For purposes of this paragraph, the present value of cumulative accrued benefits
under a defined benefit plan for purposes of top heavy determinations shall be calculated using the
actuarial assumptions otherwise employed under such plan, except that the same actuarial
assumptions shall be used for all plans within a “required” or “permissive aggregation group”. A
Participant’s interest in the Plan attributable to any Rollover Contributions, except Rollover
Contributions made from a plan maintained by an Employer or a Related Company, shall not be
considered in determining whether the Plan is a “top-heavy plan”. Notwithstanding the foregoing, if
a plan is included in a “required” or “permissive aggregation group” that is not a “top-heavy
group”, such plan shall not be a “top-heavy plan”.

The “valuation date” with respect to any “determination date” means the most recent Valuation Date
occurring within the 12-month period ending on the “determination date”.

22.2 Applicability

Notwithstanding any other provision of the Plan to the contrary, the provisions of this Article
shall be applicable during any Plan Year in which the Plan is determined to be a “top-heavy plan”
as hereinafter defined.

 

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22.3 Minimum Employer Contribution

If the Plan is determined to be a “top heavy plan” for a Plan Year, the Employer Contributions and
forfeitures allocated to the Account of each “non-key employee” who is an Eligible Employee and who
is employed by an Employer or a Related Company on the last day of such top heavy Plan Year shall
be no less than the lesser of (i) three percent of his “compensation” or (ii) the largest
percentage of “compensation” that is allocated as an Employer Contribution and/or 401(k)
Contribution for such Plan Year to the Account of any “key employee”; except that, in the event the
Plan is part of a “required aggregation group”, and the Plan enables a defined benefit plan
included in such group to meet the requirements of Code Section 401(a)(4) or 410, the minimum
allocation of Employer Contributions and forfeitures to each such “non-key employee” shall be 3% of
the “compensation” of such “non key employee”. Any minimum allocation to a “non-key employee”
required by this Section shall be made without regard to any social security contribution made on
behalf of the “non-key employee”, his number of hours of service, his level of “compensation”, or
whether he declined to make elective or mandatory contributions.

Employer Contributions allocated to a Participant’s Account in accordance with this Section shall
be considered “annual additions” under Article VII for the “limitation year” for which they are
made and shall be separately accounted for. Employer Contributions allocated to a Participant’s
Account shall be allocated upon receipt among the Investment Funds in accordance with the
Participant’s currently effective investment election.

22.4 Exclusion of Collectively-Bargained Employees

Notwithstanding any other provision of this Article, Employees who are covered by an agreement that
the Secretary of Labor finds to be a collective bargaining agreement between employee
representatives and one or more employers shall not be entitled to a minimum allocation or
accelerated vesting under this Article, unless otherwise provided in the collective bargaining
agreement.

 

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* * *

EXECUTED AT
 _____,

 ___________________, this
 _____ 

day of
 _____,
 _____.

	 	 	 	 	 	 	 
	 	 	SIRIUS XM RADIO INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Title:
	 	Dara Altman
	 

	 	 	 	 	 	Executive Vice President and
	 

	 	 	 	 	 	Chief Administrative Officer

 

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FINAL 411(a) REGULATIONS COMPLIANCE APPENDIX

TO

SIRIUS XM RADIO 401(k) SAVINGS PLAN

This Compliance Appendix amends the Plan to comply with final Treasury Regulations issued under
Code Section 411(a) addressing the interaction between the anti-cutback requirements of Code
Section 411(d)(6) and the nonforfeitability requirements of Code Section 411(a). This Compliance
Appendix is intended as good faith compliance with the requirements of the final regulations and is
to be construed in accordance with the Treasury Regulations construing Code Section 411(a) and is
effective for amendments adopted on or after August 9, 2006.

Accordingly, Section 6.13 of the Plan is amended in its entirety to provide as follows:

6.13 Election of Former Vesting Schedule

If there is a change in the vesting schedule because the Plan Sponsor adopts an amendment
to the Plan that directly or indirectly affects the computation of a Participant’s vested
interest in his Employer Contributions Sub-Account, the following shall apply:

	 	(a)	 	In no event shall a Participant’s vested interest in his Account on the
effective date of the change in vesting schedule be less than his vested interest in
his Account immediately prior to the effective date of the amendment.

	 	(b)	 	In no event shall a Participant’s vested interest in attributable to his
Account determined as of the later of (i) the effective date of such amendment or (ii)
the date such amendment is adopted, be determined on and after the effective date of
such amendment under a vesting schedule that is more restrictive than the vesting
schedule applicable to such Account immediately prior to the effective date of such
amendment.

	 	(c)	 	Any Participant with 3 or more years of Vesting Service shall have a right to
have his vested interest in his Account (including amounts credited to such Account
following the effective date of such amendment) continue to be determined under the
vesting provisions in effect prior to the amendment rather than under the new vesting
provisions, unless the vested interest of the Participant in his Account under the
Plan as amended is not at any time less than such vested interest determined without
regard to the amendment. A Participant shall exercise his right under this Section by
giving written notice of his exercise thereof to the Administrator within 60 days
after the latest of (i) the date he receives notice of the amendment
from the Administrator, (ii) the effective date of the amendment, or (iii) the date
the amendment is adopted.

 

96

 

415 COMPLIANCE APPENDIX

TO

SIRIUS XM RADIO 401(k) SAVINGS PLAN

This Appendix amends the Plan to comply with final regulations released on April 4, 2007 under Code
Section 401(k) (“401(k) regulations revisions”) and Code Section 415 (“final 415 regulations”).
This Appendix is intended as good faith compliance with the requirements of the 401(k) regulations
revisions and final 415 regulations. To the extent the provisions of the Plan are inconsistent with
the provisions of this Appendix, the provisions of this Appendix shall be controlling.

 

	 	 	 
	1.	 	Effective the first day of the first Plan Year beginning on or after July 1, 2007,
the definition of “Compensation” in Section 1.1 of the Plan is amended by the addition of the
following provisions at the end of such definition. This amendment shall have no effect on
amounts included as Compensation for periods prior to that date and shall not be construed as
creating an inference as to whether post-severance amounts were or were not included in
Compensation prior to that date. 

Notwithstanding any other provision of the Plan to the contrary, effective for Plan Years beginning
on and after July 1, 2007, if a Participant has a severance from employment (as defined in Treasury
Regulations Section 1.401(k)-1(d)(2)) with the Employers and all Related Companies, Compensation
shall not include amounts received by the Participant following such severance from employment
except as provided below:

	 	•	 	Compensation shall include amounts that would otherwise have been paid to the
Participant in the course of his employment and are regular compensation for services
during the Participant’s regular working hours, compensation for services outside the
Participant’s regular working hours (such as overtime or shift differential pay),
commissions, bonuses, or other similar compensation, but only to the extent such amounts
(1) would have been includable in Compensation if his employment had continued and (2) are
paid before the later of (a) the close of the “limitation year” (as defined in Section
7.1) in which the Participant’s severance from employment occurs or (b) within 2 1/2 months
of such severance.

	 	•	 	Compensation shall include amounts that are payments for accrued bona fide sick,
vacation or other leave, but only if (1) the Participant would have been able to use such
leave if his employment had continued, (2) such amounts would have been includable in
Compensation if his employment had continued, and (3) such amounts are paid before the
later of (a) the close of the “limitation year” (as
defined in Section 7.1) in which the Participant’s severance from employment occurs or (b)
within 2 1/2 months of such severance.

 

97

 

	 	•	 	Compensation shall include amounts received by the Participant pursuant to a
non-qualified, unfunded deferred compensation plan, but only if the Participant would have
received such payments at the same time if he had continued in employment and only to the
extent the payments (1) are includable in the Participant’s gross income and (2) are made
before the later of (a) the close of the “limitation year” (as defined in Section 7.1) in
which the Participant’s severance from employment occurs or (b) within 2 1/2 months of such
severance.

	 	 	 
	2.	 	Effective beginning the first day of the first limitation year beginning on or
after July 1, 2007, the following replaces and supersedes the definition of “annual addition”
in Section 7.1.

The “annual addition” with respect to a Participant for a “limitation year” means the sum of the
following amounts credited to the Participant’s account(s) for the “limitation year”:

	(a)	 	all employer contributions credited to the Participant’s account for the “limitation year”
under any qualified defined contribution plan maintained by an Employer or a Related Company,
including “elective contributions” (other than “elective contributions” to an eligible
deferred compensation plan under Code Section 457) and amounts attributable to forfeitures
applied to reduce the employer’s contribution obligation, but excluding “catch-up
contributions”;

	(b)	 	all “employee contributions” credited to the Participant’s account for the “limitation year”
under any qualified defined contribution plan maintained by an Employer or a Related Company
or any qualified defined benefit plan maintained by an Employer or a Related Company if either
separate accounts are maintained under the defined benefit plan with respect to such employee
contributions or such contributions are mandatory employee contributions within the meaning of
Code Section 411(c)(2)(C) (without regard to whether the plan is subject to the provisions of
Code Section 411);

	(c)	 	all forfeitures credited to the Participant’s account for the “limitation year” under any
qualified defined contribution plan maintained by the Employer or a Related Company;

	(d)	 	all amounts credited for the “limitation year” to an individual medical benefit account, as
described in Code Section 415(l)(2), established for the Participant as part of a pension or
annuity plan maintained by the Employer or a Related Company;

 

98

 

	(e)	 	if the Participant is a key employee, as defined in Code Section 419A(d)(3), all amounts
derived from contributions paid or accrued after December 31, 1985, in taxable years ending
after that date, that are attributable to post-retirement medical benefits credited for the
“limitation year” to the Participant’s separate account under a welfare benefit fund, as
defined in Code Section 419(e), maintained by the Employer or a Related Company; and

	(f)	 	all amounts credited to the Participant for the “limitation year” under a simplified employee
pension.

Notwithstanding the foregoing, any restorative payment made to a plan by an Employer or a Related
Company to make up for losses to the plan resulting from the action or non-action of a fiduciary
for which there is a reasonable risk of liability for a breach of fiduciary duty under ERISA or
other applicable federal or state law shall not be treated as an annual addition provided that
similarly situated participants are treated similarly with respect to the restorative payment.

Except as otherwise specifically provided below, an amount will be treated as credited to a
Participant’s account for a “limitation year” if such amount is both (1) allocated to the
Participant’s account as of a date within such “limitation year” (provided that if allocation of an
amount is contingent upon the satisfaction of a future condition, such amount shall not be treated
as allocated for purposes of determining “annual additions” for a “limitation year” until the date
all such conditions are satisfied) and (2) actually contributed to the account within the
applicable period described herein. If contributions are made after the end of the applicable
period, they shall be treated as credited to the Participant’s account for the “limitation year” in
which they are made. The applicable period for making “employee contributions” is within 30 days of
the close of the “limitation year.” The applicable period for making employer contributions is: (i)
for contributions by a taxable entity, within 30 days of the close of the period described in Code
Section 404(a)(6), as applicable to the entity’s taxable year with or within which the “limitation
year” ends; or (ii) for contributions by a non-taxable entity (including a governmental employer)
within 15 days of the last day of the 10th calendar month following the end of the calendar year or
fiscal year (as applicable, based on how the entity maintains its books) with or within which the
“limitation year” ends.

Forfeitures re-allocated to a Participant’s account are treated as credited to the Participant’s
account for the “limitation year” in which they are allocated to such account. Corrective
contributions and contributions required by reason of qualified military service (as defined in
Code Section 414(u)) are treated as “annual additions” for the “limitation year” to which they
relate, rather than the “limitation year” in which they are made.

	 	 	 
	3.	 	Effective beginning the first day of the first limitation year beginning on or
after July 1, 2007, the definition of “415 compensation” in Section 7.1 of 
the Plan is amended by the addition of the following provisions at the end of such
definition.

 

99

 

Notwithstanding any other provision of the Plan to the contrary, effective for “limitation years”
beginning on and after July 1, 2007, if a Participant has a severance from employment (as defined
in Treasury Regulations Section 1.415(a)-1(f)(5)) with the Employer and all Related Companies, “415
compensation” does not include amounts received by the Participant following such severance from
employment except amounts paid before the later of (a) the close of the “limitation year” in which
the Participant’s severance from employment occurs or (b) within 2 1/2 months of such severance if
such amounts:

	 	•	 	would otherwise have been paid to the Participant in the course of his employment, are
regular compensation for services during the Participant’s regular working hours,
compensation for services outside the Participant’s regular working hours (such as
overtime or shift differential pay), commissions, bonuses, or other similar compensation,
and would have been included in the Participant’s “415 compensation” if he had continued
in employment.

	 	•	 	are payments for accrued bona fide sick, vacation or other leave, but only if the
Participant would have been able to use such leave if his employment had continued and
such amounts would have been includable in “415 compensation” if his employment had
continued.

	 	•	 	are received by the Participant pursuant to a non-qualified, unfunded deferred
compensation plan, but only if the Participant would have received such payments at the
same time if he had continued in employment and only to the extent the payments are
includable in the Participant’s gross income.

For purposes of this subsection, a Participant will not be considered to have incurred a severance
from employment if his new employer continues to maintain the plan with respect to such
Participant.

To be included in a Participant’s “415 compensation” for a particular “limitation year”, an amount
must have been received by the Participant (or would have been received, but for the Participant’s
election under Code Section 125, 132(f)(4), 401(k), 402(h)(1)(B), 403(b), 408(p)(2)(A)(i), or 457)
within such “limitation year”.

	 	 	 
	4.	 	Effective beginning the first day of the first Plan Year beginning on or after July
1, 2007, the definition of “test compensation” in Section 7.1 of the Plan is amended
by the addition of the following provisions at the end of such definition. Notwithstanding the
foregoing, the Administrator may elect to substitute a different definition of compensation
that satisfies the requirements of Code Section 414(s).

 

100

 

If a Participant has a severance from employment (as defined in Treasury Regulations Section
1.401(k)-1(d)(2)) with the Employer and all Related Companies, “test compensation” does not include
amounts received by the Participant following such severance from employment except amounts paid
before the later of (a) the close of the “limitation year” in which the Participant’s severance
from employment occurs or (b) within 2 1/2 months of such severance if such amounts:

	 	•	 	would otherwise have been paid to the Participant in the course of his employment, are
regular compensation for services during the Participant’s regular working hours,
compensation for services outside the Participant’s regular working hours (such as
overtime or shift differential pay), commissions, bonuses, or other similar compensation,
and would have been included in the Participant’s “test compensation” if he had continued
in employment.

	 	•	 	are payments for accrued bona fide sick, vacation or other leave, but only if the
Participant would have been able to use such leave if his employment had continued and
such amounts would have been includable in “test compensation” if his employment had
continued.

	 	•	 	are received by the Participant pursuant to a non-qualified, unfunded deferred
compensation plan, but only if the Participant would have received such payments at the
same time if he had continued in employment and only to the extent the payments are
includable in the Participant’s gross income.

	 	 	 
	5.	 	Effective beginning the first day of the first limitation year beginning on or
after July 1, 2007, the following replaces and supersedes Section 7.12 of the Plan.

Notwithstanding any other provision of the Plan to the contrary, the “annual addition” with respect
to a Participant for a “limitation year” shall in no event exceed the lesser of (i) the maximum
dollar amount permitted under Code Section 415(c)(1)(A), adjusted as provided in Code Section
415(d) (e.g., $46,000 for the “limitation year” beginning in 2008) or (ii) 100 percent of the
Participant’s “415 compensation” for the “limitation year”; provided, however, that the limit in
clause (i) shall be pro-rated for any short “limitation year”. The limit in clause (ii) shall not
apply to any contribution to an individual medical account, as defined in Code Section 415(l), or
to a post-retirement medical benefits account maintained for a key employee which is treated as an
“annual addition” under Code Section 419A(d)(2). A Participant’s 401(k) Contributions may be
re-characterized as Catch-Up 401(k) Contributions and excluded from the Participant’s “annual
additions” for the “limitation year” to satisfy the preceding limitation.

If the Employer or a Related Company participates in a multiemployer plan, in determining whether
the “annual additions” made on behalf of a Participant to the Plan, when aggregated with “annual
additions” made on the Participant’s behalf under the multiemployer plan satisfy the above
limitation, only “annual additions” made by the
Employer (or a Related Company) to the multiemployer plan shall be aggregated with the “annual
additions” under the Plan and “415 compensation” shall include only compensation paid to the
Participant by the Employer (or a Related Company).

 

101

 

If the “annual addition” to the Account of a Participant in any “limitation year” beginning on or
after July 1, 2007, nevertheless exceeds the amount that may be applied for his benefit under the
limitations described in clauses (i) and (ii) above, correction shall be made in accordance with
the Employee Plans Compliance Resolution System, as set forth in Revenue Procedure 2006-27, or any
superseding guidance.

	 	 	 
	6.	 	Effective beginning the first day of the first limitation year beginning on or
after July 1, 2007, the following replaces and supersedes Section 7.13 of the Plan.

If a Participant is covered by any other qualified defined contribution plan (whether or not
terminated) maintained by an Employer or a Related Company concurrently with the Plan, and if the
“annual addition” to be made under the Plan for the “limitation year” when combined with the
“annual addition” to be made under such other qualified defined contribution plan(s) would
otherwise exceed the amount that may be applied for the Participant’s benefit under the limitation
contained in the preceding Section, the “annual additions” last scheduled for allocation under the
Plan and such other plan(s) shall be reduced to the extent necessary so that the limitation in the
preceding Section is satisfied. If “annual additions” are scheduled to be allocated as of the same
date, any excess shall be allocated pro rata among the defined contribution plans.

If the “annual addition” to the Account of a Participant in any “limitation year” beginning on or
after July 1, 2007, when combined with the “annual addition” made under any other qualified defined
contribution plan maintained by an Employer or a Related Company nevertheless exceeds the amount
that may be applied for the Participant’s benefit under the limitation contained in the preceding
Section, correction shall be made in accordance with the Employee Plans Compliance Resolution
System, as set forth in Revenue Procedure 2006-27, or any superseding guidance.

 

102exv10w27

Exhibit 10.27

 

 

SECOND AMENDED AND RESTATED

OMNIBUS AGREEMENT

AMONG

EXTERRAN HOLDINGS, INC.

EXTERRAN ENERGY SOLUTIONS, L.P.

EXTERRAN GP LLC

EXTERRAN GENERAL PARTNER, L.P.

EXTERRAN PARTNERS, L.P.

AND

EXLP OPERATING LLC

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	1.1 Definitions
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II NON-COMPETITION AND BUSINESS OPPORTUNITIES
	 	 	10	 
	2.1 Restricted Business
	 	 	10	 
	2.2 Overlapping Customers
	 	 	11	 
	2.3 Permitted Exceptions
	 	 	11	 
	2.4 Restricted Business Procedures
	 	 	14	 
	2.5 Scope of the Prohibition
	 	 	16	 
	2.6 New Customers
	 	 	16	 
	2.7 Rental Arrangements
	 	 	17	 
	2.8 Lease Takeover Arrangements
	 	 	17	 
	2.9 Enforcement
	 	 	17	 
	2.10 Termination
	 	 	18	 
	 
	 	 	 	 
	ARTICLE III SERVICES
	 	 	18	 
	3.1 Provision, Allocation and Reimbursement for Services
	 	 	18	 
	3.2 Limitations on Reimbursement
	 	 	19	 
	 
	 	 	 	 
	ARTICLE IV COMPRESSION EQUIPMENT TRANSFERS
	 	 	20	 
	4.1 Transfer Mechanics
	 	 	20	 
	4.2 Settlement; Appraised Value
	 	 	22	 
	4.3 [Reserved]
	 	 	23	 
	4.4 Like-Kind Exchange Treatment
	 	 	23	 
	4.5 Other Sales Permitted
	 	 	24	 
	4.6 Termination
	 	 	24	 
	4.7 Proration of Ad Valorem Taxes
	 	 	24	 
	 
	 	 	 	 
	ARTICLE V NEWLY FABRICATED COMPRESSION EQUIPMENT PURCHASES
	 	 	24	 
	 
	 	 	 	 
	ARTICLE VI LICENSE
	 	 	25	 
	6.1 Grant of License
	 	 	25	 
	6.2 Restrictions on Marks
	 	 	25	 
	6.3 Ownership
	 	 	25	 
	6.4 Confidentiality
	 	 	25	 
	6.5 Estoppel
	 	 	26	 
	6.6 Warranties; Disclaimers
	 	 	26	 
	6.7 In the Event of Termination
	 	 	26	 
	 
	 	 	 	 
	ARTICLE VII INDEMNIFICATION
	 	 	27	 
	7.1 Environmental Indemnification
	 	 	27	 
	7.2 Additional Indemnification
	 	 	28	 
	7.3 Limitations Regarding Indemnification
	 	 	29	 
	7.4 Indemnification Procedures
	 	 	29	 

i

 

	 	 	 	 	 
	ARTICLE VIII MISCELLANEOUS
	 	 	30	 
	8.1 Choice of Law; Submission to Jurisdiction
	 	 	30	 
	8.2 Notice
	 	 	30	 
	8.3 Entire Agreement
	 	 	31	 
	8.4 Termination
	 	 	31	 
	8.5 Effect of Waiver or Consent
	 	 	31	 
	8.6 Amendment or Modification
	 	 	31	 
	8.7 Assignment; Third Party Beneficiaries
	 	 	31	 
	8.8 Counterparts
	 	 	32	 
	8.9 Severability
	 	 	32	 
	8.10 Gender, Parts, Articles and Sections
	 	 	32	 
	8.11 Further Assurances
	 	 	32	 
	8.12 Withholding or Granting of Consent
	 	 	32	 
	8.13 Laws and Regulations
	 	 	32	 
	8.14 Negation of Rights of Limited Partners, Assignees and Third Parties
	 	 	32	 
	8.15 No Recourse Against Officers or Directors
	 	 	32	 

EXHIBITS AND SCHEDULES

Exhibit 1 — Form Bill of Sale

Exhibit 2 — Form Lease Agreement

Exhibit 3 — Form Like-Kind Exchange Bill of Sale

Schedule 1.1 — Fixed Margin Percentage

Schedule 3.1(a) — Services

Schedule 3.1(b) — Excluded Services

Schedule 6.1 — Marks

Schedule A — Certain Exterran Customers

Schedule B — Exterran Overlapping Customers

Schedule C — Certain Partnership Customers

Schedule D — Partnership Overlapping Customers

ii

 

 

SECOND AMENDED AND RESTATED

OMNIBUS AGREEMENT

       THIS SECOND AMENDED AND RESTATED OMNIBUS AGREEMENT is entered into on, and effective as of,
November 10, 2009 (the “Effective Date”), and is by and among Exterran Holdings, Inc., a Delaware
corporation (“Exterran”), Exterran Energy Solutions, L.P., a Delaware limited partnership
(“EESLP”), Exterran GP LLC, a Delaware limited liability company formerly named UCO GP, LLC (“GP
LLC”), Exterran General Partner, L.P., a Delaware limited partnership formerly named UCO General
Partner, L.P. (the “General Partner”), Exterran Partners, L.P., a Delaware limited partnership
(the “Partnership”) and EXLP Operating LLC (the “Operating Company”). The above-named entities are
sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”

RECITALS:

       The Parties or their predecessors entered into that certain First Amended and Restated Omnibus
Agreement dated as of August 20, 2007 (the “Omnibus Agreement”).

       The Parties entered into that certain First Amendment to the Omnibus Agreement dated as of
July 30, 2008 (the “First Amendment”) in connection with a reorganization that occurred on May 31,
2008.

       The Parties desire to amend and restate in its entirety the Omnibus Agreement as amended by
the First Amendment to evidence the following additional agreements among the parties:

	 	1.	 	to increase the maximum selling, general and administrative costs that
may be allocated to the Partnership in Section 3.2(a) to take into account the
contribution of certain compression services agreements and compression equipment
(the “New Assets”) to the Partnership in the transaction (the “Transaction”)
contemplated by that certain Contribution, Conveyance and Assumption Agreement by
and among Exterran, Exterran Energy Corp., Exterran General Holdings LLC, EESLP,
EES Leasing LLC, EXH GP LP LLC, GP LLC, EXH MLP LP LLC, the General Partner, the
Operating Company, EXLP Leasing LLC and the Partnership, dated as of October 2,
2009 (the “2009 Contribution Agreement”);
	 
	 	2.	 	to restate Schedules A, B, C and D to reflect the Exterran Customers,
Exterran Overlapping Customers, Partnership Customers and Partnership Overlapping
Customers, respectively, upon consummation of the Transaction; and
	 
	 	3.	 	to restate Exhibits A and B as Exhibits 1 and 2 attached hereto and to
add Exhibit 3 to reflect the current forms of bill of sale, equipment lease
agreement and like-kind exchange assignment and bill of sale.

       The Conflicts Committee of the Board of Directors of GP LLC has approved the form, terms and
substance of this Agreement in accordance with the requirements set forth in Section 8.6 of the
Omnibus Agreement, as amended by the First Amendment.

 

 

       In consideration of the premises and the covenants, conditions, and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

       1.1 Definitions

           (a) Capitalized terms used herein but not defined shall have the meanings given them in the
Partnership Agreement.

           (b) As used in this Agreement, the following terms shall have the respective meanings set
forth below:

     “2009 Contribution Agreement” has the meaning given such term in the introduction of
this Agreement.

     “Acquired Partnership Restricted Business” has the meaning given such term in Section
2.3(h).

     “Acquired Exterran Restricted Business” has the meaning given such term in Section
2.3(g).

     “Acquiring Party” has the meaning given such term in Section 2.4(a).

     “Affiliate” has the meaning given to such term in the Partnership Agreement.

     “Agreement” means this Second Amended and Restated Omnibus Agreement, as it may be
amended, modified or supplemented from time to time in accordance with the terms hereof.

     “Appraiser” means an appraiser mutually acceptable to Exterran and the Partnership that
is independent with respect to the Exterran Entities and the Partnership Entities and their
respective affiliates within the meaning of the code of professional ethics of the American
Society of Appraisers as selected by mutual consent of Exterran and the General Partner.

     “Appraisal” means an appraisal of Compression Equipment prepared by an Appraiser in
conformity with, and subject to, the requirements of the code of professional ethics and
standards of professional conduct of the American Society of Appraisers. The Appraisal
shall specify value based upon the cost or income approach or a combination thereof for the
Compression Equipment appraised.

     “Appraised Value” means an amount equal to (A) either (i) the most recent Appraisal
with respect to a particular piece of Compression Equipment owned by the USCSB or the
Partnership Group at the time of the Appraisal or (ii) with respect to a particular piece
of Compression Equipment for which an Appraisal has not been

2

 

conducted, the Appraised Value of substantially similar Compression Equipment, plus (B)
any costs incurred by the Transferor pursuant to Section 4.1(a)(iv) to the extent such costs
include overhauls, modifications or retrofittings that are not reflected in the value
assigned to the Compression Equipment pursuant to clause (A) above.

     “Average Horsepower” means, with respect to a particular fiscal quarter, the quotient
of (i) the sum of the aggregate amount of Compression Equipment horsepower owned or leased
by the Partnership Group (excluding units owned by the Partnership Group but leased to
USCSB) that was working and not idle on the last day of the month immediately preceding such
quarter and on the last day of each of the three months during such quarter, divided by
(ii) four.

     “Billed Party” has the meaning set forth in Section 4.7.

     “Business Day” means any day other than a Saturday, a Sunday or a day on which banking
institutions in Houston, Texas are authorized or are obligated by law, executive order or
governmental decree to be closed.

     “CCSB” means the USCSB and the non-U.S. contract compression services business of any
of the Exterran Entities, collectively.

     “Change of Control” means, with respect to any Person (the “Applicable Person”), any of
the following events: (i) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the Applicable Person’s
assets to any other Person, unless immediately following such sale, lease, exchange or other
transfer such assets are owned, directly or indirectly, by the Applicable Person; (ii) the
dissolution or liquidation of the Applicable Person; (iii) the consolidation or merger of
the Applicable Person with or into another Person, other than any such transaction where (a)
the outstanding Voting Securities of the Applicable Person are changed into or exchanged for
Voting Securities of the surviving Person or its parent and (b) the holders of the Voting
Securities of the Applicable Person immediately prior to such transaction own, directly or
indirectly, not less than a majority of the outstanding Voting Securities of the surviving
Person or its parent immediately after such transaction; and (iv) a “person” or “group”
(within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act) being or becoming the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than
50% of all of the then outstanding Voting Securities of the Applicable Person, except in a
merger or consolidation which would not constitute a Change of Control under clause (iii)
above.

     “Closing Date” means, as applicable, the closing date of the Transaction contemplated
by the 2009 Contribution Agreement or the closing date of the transactions contemplated by
another contribution agreement by and among members of the Exterran Entities and members of
the Partnership Group relating to the conveyance of Partnership Assets from members of the
Exterran Entities to members of the Partnership Group.

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

     “Common Unit” has the meaning given such term in the Partnership Agreement.

3

 

     “Compression Equipment” means natural gas compressor units, together with any tangible
components thereof, all related appliances, parts, accessories, appurtenances, accessions,
additions, improvements and replacements thereto, all other equipment or components of any
nature from time to time incorporated or installed therein and all substitutions for any of
the foregoing.

     “Competitive Services” means the provision by a Person of natural gas contract
compression services to a third-party customer, whether pursuant to the Form Compression
Services Agreement or any other compression services agreement, a lease arrangement pursuant
to which such Person leases Compression Equipment to a third-party customer and is required
to provide other compression services to such customer (whether as part of one agreement or
pursuant to a lease agreement and related services agreement) or otherwise; provided,
however, that, for the avoidance of doubt, Competitive Services do not include the
fabrication of Compression Equipment by such Person, the sale by such Person of Compression
Equipment to a third-party customer, the sale by such Person of materials, parts or
equipment that are components of or used in the operation of Compression Equipment, the
leasing by such Person of Compression Equipment without the provision of any related
services or the operation, maintenance, service, repair or overhaul by such Person of
Compression Equipment owned by a third party customer.

     “Conflicts Committee” has the meaning given such term in the Partnership Agreement.

     “Conversion Condition” has the meaning given such term in Section 2.4(b).

     “Cost of Sales” means any costs incurred of the type included in the “Cost of sales
(excluding depreciation expense)” line item in the consolidated statement of operations of
the Partnership prepared in accordance with GAAP, as applied as of the date of Exterran’s
most recent quarterly or annual report filed with the Securities and Exchange Commission.

     “Cost of Sales Limit” has the meaning given such term in Section 3.2(a).

     “Covered Environmental Losses” is defined in Section 7.1.

     “Direct Compression Equipment Costs and Expenses” means those costs and expenses
directly attributable to the transportation, operation, maintenance or repair of any
Compression Equipment owned by the Partnership Group.

     “Direct Leased Compression Equipment Capitalizable Costs” means those costs directly
attributable to the maintenance or repair of any Compression Equipment that is leased
between an Exterran Entity and a member of the Partnership Group that qualifies as a capital
addition under GAAP.

     “Direct Leased Compression Equipment Expenses” means those expenses directly
attributable to the transportation, operation, maintenance or repair of any Compression

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Equipment that is leased between an Exterran Entity and a member of the Partnership
Group that qualifies as an expense under GAAP.

     “Effective Date” has the meaning given such term in the introduction of this Agreement.

     “Effective Time” has the meaning given such term in Section 4.1(b).

     “EESLP” has the meaning given such term in the introduction to this Agreement.

     “Environmental Laws” means all federal, state, and local laws, statutes, rules,
regulations, orders and ordinances, legally enforceable requirements and rules of common law
relating to protection of the environment including, without limitation, the federal
Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund
Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air
Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil
Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act and
other environmental conservation and protection laws, each as amended through the applicable
Closing Date.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Exterran” has the meaning given such term in the introduction of this Agreement.

     “Exterran Customers” means (a) the Persons set forth on Schedule A and any of their
respective Affiliates other than Affiliates otherwise set forth on Schedule B, C or D, (b)
any Exterran Overlapping Customer once the Partnership Entities no longer provide any
Compression Services to such Exterran Overlapping Customer and (c) any New Customer that
enters into an agreement with an Exterran Entity in accordance with Section 2.6 pursuant to
which such Exterran Entity agrees to provide Competitive Services to such New Customer.
Exterran Customers shall not include any Released Exterran Customers.

     “Exterran Entities” means Exterran and any Person (other than the Partnership Entities)
controlled, directly or indirectly, by Exterran; and “Exterran Entity” means any of the
Exterran Entities.

     “Exterran Overlapping Customers” means the Persons set forth on Schedule B and any of
their respective Affiliates other than any such Person that becomes an Exterran Customer
pursuant to clause (b) of the definition of Exterran Customers and other than Affiliates
otherwise set forth on Schedule A, C or D.

     “Exterran Restricted Business” has the meaning given such term in Section 2.1(a).

     “Exterran Site” has the meaning given such term in Section 2.2(a).

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     “Fabricated Cost” means the total costs (other than any allocations of general and
administrative expenses) incurred in fabricating a particular item of Compression Equipment,
as determined by the books and records of Exterran, prepared in accordance with GAAP.

     “Fixed Margin Amount” means the amount resulting from the product of (i) the Fabricated
Cost and (ii) the percentage, expressed as a decimal, set forth on Schedule 1.1 to
this Agreement, which Schedule may be amended from time to time with the approval of the
Conflicts Committee.

     “Form Bill of Sale” means the form of Bill of Sale attached hereto as Exhibit 1, which
form may be amended or replaced with a new form of Bill of Sale from time to time as long as
such amended or replacement form does not materially conflict with the terms and provisions
of this Agreement.

     “Form Compression Services Agreement” means the standard form of agreement pursuant to
which members of the Partnership Group provide Competitive Services to Partnership Customers
as of the Effective Date.

     “Form Lease Agreement” means the form of Compression Equipment Lease Agreement attached
hereto as Exhibit 2, which form may be amended or replaced with a new form of Compression
Equipment Lease Agreement from time to time as long as such amended or replacement form does
not materially conflict with the terms and provisions of this Agreement.

     “Form Like-Kind Exchange Bill of Sale” means the form of Like-Kind Exchange Bill of
Sale attached hereto as Exhibit 3, which form may be amended or replaced with a new form of
Like-Kind Exchange Bill of Sale from time to time as long as such amended or replacement
form does not materially conflict with the terms and provisions of this Agreement.

     “GAAP” means generally accepted accounting principles in the United States,
consistently applied.

     “General Partner” has the meaning given such term in the introduction to this
Agreement.

     “GP LLC” has the meaning given such term in the introduction to this Agreement.

     “Hazardous Substance” means (a) any substance that is designated, defined or classified
as a hazardous waste, hazardous material, pollutant, contaminant or toxic or hazardous
substance, or that is otherwise regulated under any Environmental Law, including, without
limitation, any hazardous substance as such term is defined under the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended, and (b) petroleum,
petroleum products, crude oil, gasoline, fuel oil, motor oil, waste oil, diesel fuel, jet
fuel and other petroleum hydrocarbons whether refined or unrefined and (c) asbestos, whether
in a friable or a non-friable condition, and polychlorinated biphenyls.

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     “Indemnified Party” means either the Partnership Group or Exterran, as the case may be,
each in its capacity as a party entitled to indemnification in accordance with Article VII.

     “Indemnifying Party” means either the Partnership Group or Exterran, as the case may
be, each in its capacity as a party from whom indemnification may be required in accordance
with Article VII.

     “Lease Takeover Arrangement” has the meaning given such term in Section 2.8.

     “Licensees” means, for purposes of Article VI hereof, the Partnership Entities.

     “Licensor” means, for purposes of Article VI hereof, Exterran.

     “Liens” means any mortgages, pledges, security interests, liens, charges, claims,
restrictions, easements or other encumbrances of any nature.

     “Limit Period” means the period commencing on the Effective Date and ending on December
31, 2010.

     “Marks” means all trademarks, trade names, logos and/or service marks identified on
Schedule 6.1 attached hereto, which Schedule may be amended from time to time with
the approval of Exterran and the Conflicts Committee.

     “New Assets” has the meaning given such term in the Recitals.

     “New Customer” means any Person that is not an Exterran Customer, a Partnership
Customer or an Overlapping Customer and that informs any of the Parties hereto of a need for
Competitive Services.

     “Non-Qualifying Business” has the meaning given to such term in Section 2.4(b).

     “Offer” has the meaning given such term in Section 2.4(a).

     “Offer Period” has the meaning given such term in Section 2.4(b)(ii)(A).

     “Offered Assets” has the meaning given such term in Section 2.4(a).

     “Offeree” has the meaning given such term in Section 2.4(a).

     “Operating Company” has the meaning given such term in the introduction to this
Agreement.

     “Organizational Documents” means certificates or articles of incorporation, by-laws,
certificates of formation, limited liability company operating agreements, certificates of
limited partnership or limited partnership agreements or other formation or governing
documents of a particular entity.

     “Other Losses” is defined in 7.2(a).

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     “Overlapping Customer” means an Exterran Overlapping Customer or a Partnership
Overlapping Customer.

     “Partnership” has the meaning given such term in the introduction to this Agreement.

     “Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of April 14, 2008, as such agreement is in effect
on the Closing Date of the Transaction, to which reference is hereby made for all purposes
of this Agreement. An amendment or modification to the Partnership Agreement subsequent to
the Closing Date of the Transaction shall be given effect for the purposes of this Agreement
only if it has received the approval of the Conflicts Committee that would be required, if
any, pursuant to Section 8.6 hereof if such amendment or modification were an amendment or
modification of this Agreement.

     “Partnership Assets” means the compression services contracts, compression services
customer relationships and Compression Equipment, directly or indirectly conveyed,
contributed or otherwise transferred (but not leased) to the Partnership Group as of a
Closing Date pursuant to a contribution agreement or pursuant to the non-lease transfer
mechanics set forth in Article IV of this Agreement.

     “Partnership Customers” means (a) the Persons set forth on Schedule C and any of their
respective Affiliates other than Affiliates otherwise set forth on Schedule A, B or D, (b)
any Partnership Overlapping Customer once the Exterran Entities no longer provide any
Compression Services to such Partnership Overlapping Customer and (c) any New Customer that
enters into an agreement with a member of the Partnership Group in accordance with Section
2.6 pursuant to which such member of the Partnership Group agrees to provide Competitive
Services to such New Customer. Partnership Customers shall not include any Released
Partnership Customers.

     “Partnership Entities” means GP LLC, the General Partner and each member of the
Partnership Group; and “Partnership Entity” means any of the Partnership Entities.

     “Partnership Group” means the Partnership, the Operating Company and any Subsidiary of
the Partnership or the Operating Company.

     “Partnership Horsepower” means, with respect to a particular month, the quotient of
(i) the sum of the aggregate amount of Compression Equipment horsepower owned or leased by
the Partnership Group (excluding units owned by the Partnership Group but leased to USCSB),
regardless of whether such Compression Equipment is working or idle, on the last day of the
month immediately preceding such month and on the last day of each of such month, divided by
(ii) two.

     “Partnership Overlapping Customer” means the Persons listed on Schedule D and any of
their respective Affiliates other than any such Person that becomes a Partnership Customer
pursuant to clause (b) of the definition of Partnership Customers and other than Affiliates
otherwise set forth on Schedule A, B or C.

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     “Partnership Restricted Business” has the meaning given such term in Section 2.1.(b).

     “Partnership Site” has the meaning given such term in Section 2.2(a).

     “Party” or “Parties” have the meaning given such terms in the introduction to this
Agreement.

     “Percentage Interest” means, with respect to a particular month, the value (expressed
as a percentage) obtained by multiplying (i) 100 by (ii) the quotient of (x) the Partnership
Horsepower divided by (y) the Total Domestic Horsepower.

     “Permitted Liens” means (i) mechanics’, carriers’, workmen’s, repairmen’s or other like
Liens arising or incurred in the ordinary course of business, (iii) Liens for taxes that are
not due and payable or that may thereafter be paid without penalty, (iv) Liens securing debt
of a transferor that will be released prior to or as of the date of the applicable transfer
and (v) other imperfections of title or encumbrances that, individually or in the aggregate,
could not reasonably be expected to materially interfere with the ordinary operation of the
Compression Equipment to which the Permitted Liens are attached.

     “Person” has the meaning given such term in the Partnership Agreement.

     “Purchase Agreement” has the meaning given such term in Section 2.4(a).

     “Qualifying Business” has the meaning given such term in Section 2.4(b).

     “Released Exterran Customers” means those customers of the Exterran Entities that are
designated as “Released Exterran Customers” pursuant to Section 2.3(h).

     “Released Partnership Customers” means those customers of the Partnership Group that
are designated as “Released Partnership Customers” pursuant to Section 2.3(g).

     “Rental Arrangement” means an arrangement requested by a Partnership Customer or
Partnership Overlapping Customer that will necessitate an agreement that is materially
dissimilar to the Form Compression Services Agreement from a federal income tax treatment
perspective (from the Partnership’s perspective) and that may be offered to an Exterran
Entity pursuant to Section 2.7.

     “Retained Assets” means the assets and investments owned by Exterran or any of its
Affiliates that were not conveyed, contributed or otherwise transferred to the Partnership
Group pursuant to a particular contribution agreement.

     “Services” has the meaning given such term in Section 3.1(a).

     “Site” means the specific geographic site at which a particular item of Compression
Equipment engaged in Competitive Services is being utilized, as further

9

 

specified by the customer contract, or any schedule thereto, pursuant to which such
Competitive Services are being provided.

     “Subsidiary” has the meaning given such term in the Partnership Agreement.

     “Total Domestic Horsepower” means, with respect to a particular month, the sum of the
USCSB Horsepower and the Partnership Horsepower.

     “Transaction” has the meaning given such term in the Recitals.

     “Transferee” means a transferee of Compression Equipment pursuant to Article IV.

     “Transferor” means a transferor of Compression Equipment pursuant to Article IV.

     “USCSB” means the U.S. contract compression services business of any of the Exterran
Entities conducted through Exterran’s U.S. Contract Compression Segment, excluding the
business of the Partnership Entities.

     “USCSB Horsepower” means, with respect to a particular month, the quotient of (i) the
sum of the aggregate amount of Compression Equipment horsepower owned or leased by USCSB
(excluding units designated “for sale only” by the Exterran Entities or units owned by USCSB
but leased to the Partnership Group), regardless of whether such Compression Equipment is
working or idle, on the last day of the month immediately preceding such month and on the
last day of such month, divided by (ii) two.

     “Voluntary Cleanup Program” means a program of the United States or a state of the
United States enacted pursuant to Environmental Laws which provides for a mechanism for the
written approval of, or authorization to conduct, voluntary remedial action for the
clean-up, removal or remediation of contamination that exceeds actionable levels established
pursuant to Environmental Laws.

     “Voting Securities” of a Person means securities of any class of such Person entitling
the holders thereof to vote in the election of, or to appoint, members of the board of
directors or other similar governing body of the Person; provided, that if such Person is a
limited partnership, Voting Securities of such Person shall be the general partner interest
in such Person.

ARTICLE II

NON-COMPETITION AND BUSINESS OPPORTUNITIES

       2.1 Restricted Business.

     (a) Subject to Section 2.10 and except as permitted by Section 2.3, 2.7 or 2.8, each of
the Exterran Entities shall be prohibited from providing (whether directly or
through the acquisition of or investment in equity or debt securities in any Person)
Competitive Services to any Partnership Customer, in any state or territory of the United

10

 

States (other than on behalf of a member of the Partnership Group) (the “Exterran Restricted
Business”).

     (b) Subject to Section 2.10 and except as permitted by Section 2.3, 2.7 or 2.8, each of
the Partnership Entities shall be prohibited from providing (whether directly or through the
acquisition of or investment in equity or debt securities in any Person) Competitive
Services to any Exterran Customer, in any state or territory of the United States (other
than on behalf of any Exterran Entity) (the “Partnership Restricted Business”).

       2.2 Overlapping Customers.

     (a) Except as otherwise provided in this Section 2.2 and except as permitted by Section
2.3, 2.7 or 2.8, (i) the Exterran Entities shall be prohibited from providing (whether
directly or through the acquisition of or investment in equity or debt securities of any
Person) Competitive Services to a particular Overlapping Customer at the particular Site at
which any member of the Partnership Group was providing Competitive Services to such
Overlapping Customer on the Effective Date (each, a “Partnership Site”) and (ii) the
Partnership Entities shall be prohibited from providing (whether directly or through the
acquisition of or investment in equity or debt securities of any Person) Competitive
Services to a particular Overlapping Customer at the particular Site at which any of the
Exterran Entities was providing Competitive Services to such Overlapping Customer on the
Effective Date (each, an “Exterran Site”).

     (b) Notwithstanding the foregoing, the Parties agree that in the event that, after the
date of this Agreement, an Overlapping Customer requests Competitive Services involving the
provision of additional Compression Equipment or additional contract compression services at
a Partnership Site or an Exterran Site, whether in addition to or in replacement of
Compression Equipment or contract compression services existing at such Site as of the
Effective Date, (i) any member of the Partnership Group shall be entitled to provide such
Competitive Services if such Overlapping Customer is a Partnership Overlapping Customer and
(ii) any Exterran Entity shall be entitled to provide such Competitive Services if such
Overlapping Customer is an Exterran Overlapping Customer.

     (c) Except as expressly provided by Sections 2.2(a) or (b), the Parties agree that any
offer by any of the Parties hereto to provide Competitive Services to (i) a Partnership
Overlapping Customer in any state or territory of the United States shall be made solely on
behalf of the Partnership Entities and (b) an Exterran Overlapping Customer in any state or
territory of the United States shall be made solely on behalf of the Exterran Entities.

       2.3 Permitted Exceptions. Notwithstanding any provision of Sections 2.1 or 2.2 to the contrary, the Parties may
engage in any of the following activities to the extent permitted below:

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     (a) The Exterran Entities may engage in any Exterran Restricted Business to any Person
with the prior written approval of the Conflicts Committee or in accordance with Section 2.7
or Section 2.8.

     (b) The Exterran Entities may own securities of any class of any member of the
Partnership Group.

     (c) The Partnership Entities may engage in any Partnership Restricted Business to any
Person with the prior written approval of Exterran or in accordance with Section 2.8.

     (d) The Exterran Entities may purchase and own in the aggregate not more than five
percent of any class of securities of any entity engaged in any Exterran Restricted Business
(but without otherwise participating in, managing or directing the activities of such
entity).

     (e) The Partnership Entities may purchase and own in the aggregate not more than five
percent of any class of securities of any entity engaged in any Partnership Restricted
Business (but without otherwise participating, managing or directing the activities of such
entity).

     (f) If a Partnership Customer (or that customer’s applicable business), on the one
hand, and a Exterran Customer (or that customer’s applicable business), on the other hand,
merge, consolidate, amalgamate or are otherwise combined, each of the Partnership Entities
and the Exterran Entities may continue to provide Competitive Services to the applicable
combined entity or business. Upon such an occurrence, Exterran and the Conflicts Committee
shall negotiate in good faith, if and to the extent determined in the good faith of Exterran
and the Conflicts Committee to be necessary, to implement procedures or such other
arrangements to protect the value to each of the Partnership Entities, on the one hand, and
the Exterran Entities, on the other hand, of their respective businesses of providing
Competitive Services to each such customer or its applicable business, as applicable.

     (g) The Exterran Entities may purchase and own (i) any class of securities in any
entity engaged (in whole or in part) in any Exterran Restricted Business or (ii) any
business or assets otherwise engaged or deployed in any Exterran Restricted Business;
provided, (x) in the good faith judgment of the Board of Directors of Exterran, the
aggregate value of the Exterran Restricted Business owned by such entity or otherwise to be
acquired by the Exterran Entities shall be less than 50% of the aggregate value of the
business and assets owned by such entity or otherwise to be acquired by the Exterran
Entities and (y) the Partnership Group is offered the opportunity to acquire the Exterran
Restricted Business owned by such entity or otherwise acquired by the Exterran Entities (in
each case, the “Acquired Exterran Restricted Business”) in accordance with Section 2.4.
During the pendency of the procedures described in Section 2.4, the
Exterran Entities shall be entitled to own and operate the Acquired Exterran Restricted
Business. In the event that the General Partner (with the approval of the Conflicts
Committee) elects not to purchase such Acquired Exterran Restricted Business whether

12

 

pursuant to Section 2.4(b)(i) or Section 2.4(b)(ii)(B)(2), the Exterran Entities shall be
entitled to continue to own and operate the Acquired Exterran Restricted Business and the
Competitive Services customers of the Acquired Exterran Restricted Business at the time of
the consummation of such acquisition shall no longer be Partnership Customers for purposes
of this Agreement, but rather shall be designated “Released Partnership Customers.” Without
the prior written approval of the Conflicts Committee, subject to Section 2.10, the Exterran
Entities shall be prohibited from providing (whether directly or through the acquisition of
or investment in equity or debt securities of any Person) Competitive Services to a
particular Released Partnership Customer at the particular Site at which the Partnership
Group was providing Competitive Services to such Released Partnership Customer on the date
of the acquisition by the Exterran Entities of the applicable Exterran Restricted Business
pursuant to which such customer was designated a Released Partnership Customer.

     (h) The Partnership Entities may purchase and own (i) any class of securities in any
entity engaged (in whole or in part) in any Partnership Restricted Business or (ii) any
business or assets otherwise engaged or deployed in any Partnership Restricted Business;
provided, (i) in the good faith judgment of the Conflicts Committee, the aggregate value of
the Partnership Restricted Business owned by such entity or otherwise to be acquired by the
Partnership Entities shall be less than 50% of the aggregate value of the business and
assets owned by such entity or otherwise to be acquired by the Partnership Entities and (ii)
Exterran is offered the opportunity to acquire the Partnership Restricted Business owned by
such entity or otherwise acquired by the Partnership Entities (in each case, the “Acquired
Partnership Restricted Business”) in accordance with Section 2.4. During the pendency of
the procedures described in Section 2.4, the Partnership Entities shall be entitled to own
and operate the Acquired Partnership Restricted Business. In the event that Exterran elects
not to purchase such Acquired Partnership Restricted Businesses whether pursuant to Section
2.4(b)(i) or Section 2.4(b)(ii)(B)(2), the Partnership Entities shall be entitled to
continue to own and operate the Acquired Partnership Restricted Business and the Competitive
Services customers of the Acquired Partnership Restricted Business at the time of the
consummation of such acquisition shall no longer be Exterran Customers for purposes of this
Agreement, but rather shall be designated “Released Exterran Customers.” Without the prior
written approval of Exterran, subject to Section 2.10, the members of the Partnership Group
shall be prohibited from providing (whether directly or through the acquisition of or
investment in equity or debt securities of any Person) Competitive Services to a particular
Released Exterran Customer at the particular Site at which Exterran Entities were providing
Competitive Services to such Released Exterran Customer on the date of the acquisition by
the Partnership Group of the applicable Partnership Restricted Business pursuant to which
such customer was designated a Released Exterran Customer.

     (i) If a Partnership Overlapping Customer (or that customer’s applicable business), on
the one hand, and an Exterran Overlapping Customer (or that customer’s applicable business),
on the other hand, merge, consolidate, amalgamate or are otherwise
combined, then, following consummation of such transaction, solely for purposes of
providing Competitive Services involving additional Compression Equipment under Section
2.2(b) and offering to provide Competitive Services under Section 2.2(c) and for

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the purposes of the definition of Partnership Customer and Exterran Customer, the combined
entity shall be deemed to be (a) a Partnership Overlapping Customer for continuing and
future new business if as of the date of the announcement of such transaction the
Partnership Entities provide more Competitive Services (as measured by the total amount of
horsepower of Compression Equipment utilized in the provision of such Competitive Services
on that date of announcement) to such combined entity than are provided by the Exterran
Entities and (b) an Exterran Overlapping Customer for continuing and future new business if
as of the date of the announcement of such transaction the Exterran Entities provide more
Competitive Services (as measured by the total amount of horsepower of Compression Equipment
utilized in the provision of such Competitive Services on that date of announcement) to such
combined entity than are provided by the Partnership Entities; provided, however, that the
provisions of Section 2.2(a) shall continue to apply to any Partnership Site or Exterran
Site relating to such newly combined Overlapping Customer on the date of closing of such
transaction.

       2.4 Restricted Business Procedures.

     (a) Within 30 days following the consummation of the acquisition of an Acquired
Exterran Restricted Business or an Acquired Partnership Restricted Business by an Exterran
Entity or a Partnership Entity, as the case may be (in each such case such acquiring Person
shall be referred to as an “Acquiring Party”), the Acquiring Party shall notify in writing
(x) the Partnership, if the Acquiring Party is a Exterran Entity or (y) Exterran, if the
Acquiring Party is a Partnership Entity, of such acquisition. The Person that is so
notified shall be referred to herein as the “Offeree.” Such notice shall include an offer
(the “Offer”) by the Acquiring Party to sell the Acquired Exterran Restricted Business or
the Acquired Partnership Restricted Business, as the case may be (the “Offered Assets”), to
the Offeree, together with a proposed definitive agreement to effectuate the purchase and
sale of the Offered Assets (the “Purchase Agreement”). The Offer shall set forth the
Acquiring Party’s proposed terms relating to the sale of the Offered Assets to the Offeree,
including the purchase price, any liabilities to be assumed by the Offeree as part of the
Offer and the other terms of the Offer; provided, that the representations and warranties
regarding the Offered Assets and the indemnification provision contained in the Purchase
Agreement shall be substantially consistent with the terms contained in the definitive
purchase agreement pursuant to which the Acquiring Party acquired the Offered Assets or the
entity that owned the Offered Assets, subject to such adjustments that the Acquiring Party
reasonably determines are necessary to reflect the differences in the transaction.

     (b) As soon as practicable after the Offer is made, the Acquiring Party will deliver to
the Offeree all information prepared by or on behalf of or in the possession of such
Acquiring Party relating to the Offered Assets and reasonably requested by the Offeree. As
soon as practicable, but in any event, within 60 days after receipt of the notification
called for in Section 2.4(a), the Offeree shall notify the Acquiring Party in writing that
either:

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     (i) the Offeree (with the concurrence of the Conflicts Committee if the Offeree
is the Partnership) has elected not to purchase (or not to cause any of its
Subsidiaries to purchase) any of such Offered Assets; or

     (ii) the Offeree (with the concurrence of the Conflicts Committee if the
Offeree is the Partnership) has elected to purchase (or to cause any of its
Subsidiaries to purchase) all of such Offered Assets; provided, that if the Offeree
is the Partnership, and in the opinion of outside counsel to the Partnership
Entities, less than 90% of the gross income from the operations of such Offered
Assets consists of “qualifying income” under Section 7704 of the Code (such portion
of such Offered Assets that does not so qualify being referred to herein as the
“Non-Qualifying Business”), then the Partnership (with the concurrence of the
Conflicts Committee) may condition its obligation to purchase the Non-Qualifying
Business (but not the portion of the Offered Assets that do not constitute the
Non-Qualifying Business (the “Qualifying Business”)) on the conversion of the
agreements pursuant to which the Non-Qualifying Business provides Competitive
Services to its customers to agreements substantively similar to the Form
Compression Services Agreement from a federal income tax treatment perspective (from
the Partnership’s perspective) and otherwise having substantially the same economic
terms as the agreements being converted (the “Conversion Condition”); provided
further, that in such event, each of the Exterran Entities and the Partnership
Entities shall use commercially reasonable efforts to satisfy the Conversion
Condition as soon as commercially practicable. If the Offeree elects to purchase
the Offered Assets, the following procedures shall be followed:

     A. After the receipt of the Offer by the Offeree, the Acquiring Party
and the Offeree shall negotiate in good faith the fair market value of the
Offered Assets that are subject to the Offer (including the specific fair
market value of any Offered Assets that constitute a Non-Qualifying
Business) and the other terms of the Offer on which the Offered Assets will
be sold to the Offeree. If the Acquiring Party and the Offeree agree (with
the concurrence of the Conflicts Committee) on the fair market value of the
Offered Assets that are subject to the Offer and the other terms of the
Offer during the 30-day period (the “Offer Period”) after receipt by the
Acquiring Party of the Offeree’s election to purchase (or to cause any
Subsidiary of the Offeree to purchase) the Offered Assets, the Offeree shall
purchase (or cause any of its Subsidiaries to purchase) and the Acquiring
Party shall sell the Offered Assets on such terms as soon as commercially
practicable after such agreement has been reached, which obligation may
require such parties to consummate the purchase and sale of the Qualifying
Business prior to satisfaction of the Conversion Condition.

     B. If the Acquiring Party and the Offeree are unable to agree on the
fair market value of the Offered Assets that are subject to the Offer or on
any other terms of the Offer during the Offer Period, the Acquiring

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Party and the Offeree will engage an independent investment banking
firm prior to the end of the Offer Period to determine the fair market value
of the Offered Assets (including the specific fair market value of any
Offered Assets that constitute a Non-Qualifying Business) and/or the other
terms on which the Acquiring Party and the Offeree are unable to agree. In
determining the fair market value and other terms on which the Offered
Assets are to be sold, the investment banking firm will have access to the
proposed sale and purchase values and terms for the Offer submitted by the
Acquiring Party and the Offeree, respectively, and to all information
prepared by or on behalf of the Acquiring Party relating to the Offered
Assets and reasonably requested by the investment banking firm. In
determining the terms on which the Offered Assets are to be sold (other than
the fair market value of the Offered Assets), the investment banking firm
shall give substantial weight to the terms contained in the definitive
purchase agreement pursuant to which the Acquiring Party acquired the
Offered Assets or the entity that owned the Offered Assets. Such investment
banking firm will determine the fair market value of the Offered Assets
and/or the other terms on which the Acquiring Party and the Offeree are
unable to agree within 60 days of its engagement and furnish the Acquiring
Party and the Offeree its determination. The fees and expenses of the
investment banking firm will be divided equally between the Acquiring Party
and the Offeree. Upon receipt of such determination, the Offeree will have
the option, but not the obligation, to (with the concurrence of the
Conflicts Committee if the Offeree is the Partnership):

     1. purchase the Offered Assets on such terms as determined
above; or

     2. elect not to purchase such Offered Assets.

If the Offeree elects to so purchase the Offered Assets, the Offeree shall
purchase (or cause any of its Subsidiaries to purchase) and the Acquiring
Party shall sell the Offered Assets on such terms as soon as commercially
practicable after such agreement has been reached, which obligation may
require such parties to consummate the purchase and sale of the Qualifying
Business prior to satisfaction of the Conversion Condition.

       2.5 Scope of the Prohibition. Except as provided in this Article II, each of the Parties
shall be free to engage (whether directly or through the acquisition of or investment in equity or
debt interests in any Person) in any business activity whatsoever, including those that may be in
direct competition with any of the other Parties.

       2.6 New Customers. The Parties agree that any offer by any of the Parties hereto to provide
Competitive Services to New Customers in any state or territory of the United States shall be first
made on behalf of the Partnership Entities and shall include an offer to provide such Competitive
Services under an agreement substantially in the form of the Form Compression

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Services Agreement.
If the New Customer is unwilling to enter into an agreement with a Partnership Entity that is
substantively similar to the Form Compression Services Agreement from a federal income tax
treatment perspective (from the Partnership’s perspective), an Exterran Entity may enter into an
agreement to provide Competitive Services to such New Customer for its own account provided that
any agreement between such Exterran Entity and such New Customer is not substantively similar to
the Form Compression Services Agreement from a federal income tax treatment perspective (from the
Partnership’s perspective). If a New Customer enters into an agreement with a member of the
Partnership Group for Competitive Services, then such New Customer will then constitute a
Partnership Customer for the purposes of this Agreement and if, in accordance with this Section
2.6, a New Customer enters into an agreement with an Exterran Entity for Competitive Services, then
such New Customer will then constitute an Exterran Customer for the purposes of this Agreement.

       2.7 Rental Arrangements. If a Partnership Customer or Partnership Overlapping Customer is
unwilling to enter into an agreement that is substantively similar to the Form Compression
Services Agreement from a federal income tax treatment perspective (from the Partnership’s
perspective), whether with respect to a Site, a region or otherwise, an Exterran Entity may (with
the Partnership’s consent) enter into a Rental Arrangement to provide Competitive Services to such
Partnership Customer or Partnership Overlapping Customer for its own account. A Partnership
Customer or Partnership Overlapping Customer shall remain a Partnership Customer or Partnership
Overlapping Customer for the purposes of this Agreement even if it enters into a Rental
Arrangement with an Exterran Entity for Competitive Services in accordance with this Section 2.7.

       2.8 Lease Takeover Arrangements. If a Partnership Customer or Partnership Overlapping
Customer (or that customer’s applicable business) and an Exterran Customer or Exterran Overlapping
Customer (or that customer’s applicable business) enter into an arrangement whereby one assigns or
otherwise disposes of certain mineral leasehold interests to the other or to a New Customer for
whom Competitive Services are provided by a Partnership Entity or an Exterran Entity, respectively
(a “Lease Takeover Arrangement”), the Competitive Services shall continue to be provided by the
Partnership Entity or Exterran Entity that had provided the Competitive Services to the assignor
at the relevant Site(s). Notwithstanding the provision of Competitive Services by an Exterran
Entity to a customer as a result of a Lease Takeover Arrangement, if the assignee would qualify as
a new customer but for the Lease Takeover Arrangement, then that assignee shall be deemed a New
Customer for purposes of Section 2.6 with respect to the first Competitive Services provided that
are not a result of a Lease Takeover Arrangement.

          2.9 Enforcement. Each Party agrees and acknowledges that the other Parties hereto do not have an adequate
remedy at law for the breach by such Party of the covenants and agreements set forth in this
Article II, and that any breach by such Party of the covenants and agreements set forth in this
Article II would result in irreparable harm to the other Parties hereto. Each Party further agrees
and acknowledges that the other Parties hereto may, in addition to the other remedies that may be
available to the other Parties hereto, file a suit in equity to enjoin such Party from such breach,
and consents to the issuance of injunctive relief under this Agreement.

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       2.10 Termination. Unless this Agreement has otherwise terminated pursuant to Section 8.4, this
Article II shall terminate on the third anniversary of the Effective Date. In addition, unless
this Agreement has otherwise been terminated pursuant to Section 8.4 or this Article II has
otherwise been terminated pursuant to the first sentence of this Section 2.10, Sections 2.1, 2.2,
2.3, 2.4 and 2.6 shall terminate upon a Change of Control of Exterran. Unless this Agreement has
otherwise terminated pursuant to Section 8.4 or this Article II has terminated pursuant to the
first sentence of this Section 2.10, and in the event that Sections 2.1, 2.2, 2.3, 2.4 and 2.6
terminate pursuant to the immediately preceding sentence, without the prior written approval of the
Conflicts Committee, the Exterran Entities shall be prohibited from providing (whether directly or
through the acquisition of or investment in equity or debt securities of any Person) Competitive
Services to a particular Partnership Customer at the particular Site at which the Partnership Group
was providing Competitive Services to such Partnership Customer on the date of the Change of
Control of Exterran.

ARTICLE III

SERVICES

       3.1 Provision, Allocation and Reimbursement for Services

     (a) Subject to Article V, the Exterran Entities shall, upon the reasonable request of
the General Partner, provide the Partnership Group with all personnel and services
reasonably necessary to run the business of the Partnership Group, which services may
include, without limitation, those services set forth on Schedule 3.1(a)
(collectively, the “Services”). For the avoidance of doubt, the Services shall not include
the services described on Schedule 3.1(b). These Services shall be substantially
similar in nature to the services of such type previously provided by the Exterran Entities
in connection with their management and operation of the Partnership Assets and any other
assets of a similar nature directly or indirectly conveyed, contributed or otherwise
transferred to the Partnership Group, in each case during the 12-month period prior to such
transfer.

     (b) The Exterran Entities shall provide the Services to the Partnership Group in a
manner that is in the good faith judgment of Exterran commercially reasonable; provided,
that for so long as the Exterran Entities exercise at least the same degree of care, skill
and prudence in providing the Services as customarily exercised by it for its own operation
of the USCSB, then Exterran will be deemed to have provided such Services in a commercially
reasonable manner. EXCEPT AS SET FORTH IN THE
PRECEDING SENTENCE, THE EXTERRAN ENTITIES MAKE NO (AND HEREBY DISCLAIM AND NEGATE ANY
AND ALL) WARRANTIES OR REPRESENTATIONS WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
SERVICES. IN NO EVENT SHALL ANY EXTERRAN ENTITY OR ANY OF THEIR AFFILIATES BE LIABLE TO ANY
MEMBER OF THE PARTNERSHIP GROUP OR TO ANY OTHER PERSON FOR ANY EXEMPLARY, PUNITIVE,
INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES RESULTING FROM ANY ERROR IN THE
PERFORMANCE OF THE SERVICES, REGARDLESS OF WHETHER THE PERSON PROVIDING SUCH SERVICES, ITS

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AFFILIATES, OR OTHERS MAY BE WHOLLY, CONCURRENTLY, PARTIALLY, OR SOLELY NEGLIGENT OR
OTHERWISE AT FAULT.

     (c) Any Direct Compression Equipment Costs and Expenses, any Direct Leased Compression
Equipment Capitalizable Costs where a member of the Partnership Group is the Transferor
pursuant to Section 4.2(b)(ii) and any Direct Leased Compression Equipment Expenses where a
member of the Partnership Group is the Transferee pursuant to Section 4.2(b)(ii), in each
case that are incurred by any Exterran Entity in connection with providing the Services
shall be allocated to the Partnership at the actual cost to the applicable Exterran Entity
providing such Services.

     (d) The General Partner shall be entitled to allocate to the Partnership any costs and
expenses (other than Direct Compression Equipment Costs and Expenses) incurred by any
Exterran Entity in connection with providing the Services on any reasonable basis determined
by the General Partner. In the event that such Services are associated with Exterran’s
operation of both of the businesses of the USCSB and the Partnership Group, including,
without limitation, general and administrative functions, such reasonable basis may include,
at the election of the General Partner, allocating a portion of such costs and expenses
incurred during a particular period to the Partnership on a pro rata basis based on the
Partnership Group’s Percentage Interest.

     (e) Subject to Section 3.2, the Partnership Group hereby agrees to reimburse the
Exterran Entities for all costs and expenses allocated to the Partnership Group in
accordance with the manners set forth in Sections 3.1(c) and (d).

       3.2 Limitations on Reimbursement.

     (a) Notwithstanding Section 3.1, the amount that the Exterran Entities are entitled to
receive from the Partnership Group pursuant to Section 3.1 for selling, general and
administrative costs during any particular quarter commencing with the quarter in which the
Transaction is consummated during the Limit Period shall not exceed $7.6 million (the “SG&A
Limit”); provided, that with respect to the quarter during which the Transaction is
consummated, it means the sum of (i) the product of $6.0 million multiplied by a fraction of
which the numerator is the number of days in such period prior to consummation of the
Transaction and of which the denominator is 91 or 92 as applicable and (ii) the product of
$7.6 million multiplied by a fraction of which the numerator is the number of days in such
period on and after consummation of the Transaction and of which the denominator is 91 or 92
as applicable. The SG&A Limit
shall be reduced by any cash selling, general and administrative costs incurred
directly by the Partnership Group during the applicable period. In the event that during the
Limit Period the Partnership Group makes any additional acquisitions of assets or businesses
or the business of the Partnership Group otherwise expands after consummation of the
Transaction, then the Parties shall negotiate in good faith any appropriate increase in the
SG&A Limit in order to account for any adjustments in the nature and extent of the selling,
general and administrative services provided by the Exterran Entities to the Partnership
Group, with any such increase in the SG&A Limit subject to the approval of the Conflicts
Committee.

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     (b) Notwithstanding Section 3.1, the amount that the Exterran Entities are entitled to
receive from the Partnership Group pursuant to Section 3.1 for Cost of Sales during any
particular quarter during the Limit Period shall not exceed $21.75 times the Average
Horsepower of the Partnership Group during such quarter (the “Cost of Sales Limit”). The
Cost of Sales Limit shall be reduced by any Cost of Sales incurred directly by the
Partnership Group during the applicable period. In the event that during the Limit Period
the Partnership Group makes any additional acquisitions of assets or businesses or the
business of the Partnership Group otherwise expands after the Effective Date, then the
Parties shall negotiate in good faith any appropriate increase in the Cost of Sales Limit in
order to account for any adjustments in the Cost of Sales of the Partnership Group (on a per
horsepower basis) as a result of such acquisition or expansion, with any such increase in
the Cost of Sales Limit subject to the approval of the Conflicts Committee.

ARTICLE IV

COMPRESSION EQUIPMENT TRANSFERS

       4.1 Transfer Mechanics

     (a) In the event that Exterran determines in good faith that there exists a need on the
part of the CCSB or on the part of the Partnership Group to transfer Compression Equipment
between the Exterran Entities, on the one hand, and the Partnership Group, on the other
hand, to meet the compression services obligations of either of the CCSB or the Partnership
Group, such Compression Equipment shall be so transferred (or, to the extent provided in
Section 4.2, leased), at the election of Exterran, from a member of the Exterran Entities to
a member of the Partnership Group, or from a member of the Partnership Group to a member of
the Exterran Entities, as the case may be, or exchanged in a like-kind exchange; provided,
that all of the following conditions are satisfied with respect to such transfer, exchange
or lease (each such transfer, exchange or lease for the purposes of this Article IV, unless
set forth otherwise, a “transfer”) at the Effective Time (as defined below) of such
transfer:

     (i) Except as provided in Section 4.2 in respect of Compression Equipment that
is leased, such transfer will constitute a valid and absolute transfer (each such
transfer, as the case may be, constituting a “true sale” for bankruptcy law
purposes) of all right, title and interest of the Transferor in, to and under the
transferred Compression Equipment, free and clear of any Liens except for any Liens
created by the Transferee and any Permitted Liens;

     (ii) Such transfer will not conflict with any of the terms and provisions of,
result in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the organizational
documents of the Transferor or the Transferee, or any material term of any
indenture, agreement, mortgage, deed of trust, derivative
instrument or other
instrument to which the Transferor or Transferee or any of their respective
subsidiaries is a party or by which either of them is bound, or result in the
creation or imposition of any Lien upon any of their respective properties pursuant
to the terms of any such indenture, agreement, mortgage, deed of trust, derivative

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instrument or other instrument, or violate any law or any order, rule, or regulation
applicable to the Transferor or Transferee or any of their respective subsidiaries
of any court or of any federal or state regulatory body, administrative agency, or
other governmental authority having jurisdiction over either of them or any of their
respective properties;

     (iii) Except as otherwise provided in this Article IV, such transfer will not
cause any member of the Partnership Group to suffer a loss of revenue under any
existing customer contract for Competitive Services or to incur any material
liabilities not reimbursed by the Exterran Entities; and

     (iv) The Compression Equipment will be transferred in a condition appropriate
for the Transferee’s anticipated commercial use of such Compression Equipment;
provided, that such anticipated commercial use shall be consistent with such
equipment’s historical use; provided further, that (A) any repairs or modifications,
or any costs associated therewith, required to make such Compression Equipment
appropriate for the Transferee’s anticipated commercial use of such Compression
Equipment shall be the obligation of the Transferor and (B) the Transferee shall
have communicated its anticipated commercial use of such Compression Equipment to
the Transferor at least ten (10) Business Days prior to the anticipated date of such
transfer, failing which, the Transferor may transfer the Compression Equipment in
its then current condition.

In connection with each proposed transfer, each of the Transferee and the Transferor will
use their respective commercially reasonable efforts to cause the conditions set forth above
to be satisfied as of the Effective Time (as defined below).

     (b) All transfers of Compression Equipment pursuant to this Section 4.1 shall be deemed
to take place at 12:01 a.m. on the date of transfer (the “Effective Time”) and shall include
all of the following assets, rights and properties of the Transferor with respect to such
transferred Compression Equipment; provided, that with respect to transfers that are
effected under a lease pursuant to Section 4.2, the following assets, rights and properties
shall be so transferred to the extent provided for in, and not inconsistent with, the
relevant lease agreement, and except as provided below:

     (i) All Transferor-owned appliances, parts, instruments, machinery, accessories
and other equipment attached or installed thereto;

     (ii) The rights of the Transferor under all permits relating exclusively to
such Compression Equipment, to the extent that such permits are transferable and the
transfer of which is authorized or consented to by any third parties required to
make such transfer effective as to third parties;

     (iii) Except in the case of a lease, all warranties and guarantees, if any,
express or implied, existing for the benefit of the Transferor in connection with
such Compression Equipment to the extent assignable;

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     (iv) Except in the case of a lease, any fuels, lubricants and maintenance
supplies exclusively related to such Compression Equipment;

     (v) Except in the case of a lease, all vendor information, catalogs, technical
information, specifications, designs, drawings and maintenance records related to
such Compression Equipment and to which the Transferor has ready access without
undue effort; and

     (vi) Except in the case of a lease, all rights, claims or choses in action of
the Transferor against any Person relating exclusively to such Compression
Equipment.

     (c) Except as provided in Section 4.2 in respect of Compression Equipment that is
leased, on the date of any transfer of Compression Equipment, the Transferor shall deliver
or cause to be delivered to the Transferee the following:

     (i) A general conveyance or bill of sale in the form of the Form Bill of Sale
or the Form Like-Kind Exchange Bill of Sale transferring to Transferee, as of the
Effective Time, good, marketable and indefeasible title to all of the tangible
personal property contemplated by Section 4.2(b) and included in the transferred
Compression Equipment, free and clear of any Liens, except for any Liens created by
the Transferee and except for Permitted Liens;

     (ii) All appropriate documents for the assignment as of the Effective Time of
the Transferor’s rights under the permits referred to in Section 4.1(b)(ii),
together with all consents of third parties required to make such assignments
effective as to such third parties; and

     (iii) Such other instruments of transfer and assignment in respect of the
transferred Compression Equipment as the Transferee shall reasonably require and as
shall be consistent with the terms and provisions of this Agreement.

       4.2 Settlement; Appraised Value

     (a) Prior to the Effective Time of any transfer pursuant to Section 4.1, the
Partnership Group and Exterran will determine the aggregate Appraised Value of the
Compression Equipment to be so transferred.

     (b) In consideration for such transfer, the Transferee, at its discretion (subject to
the provisos of Sections 4.2(b)(ii) and (iii) and subject to Sections 4.2(b) and (c)), shall
take any one or more of the following actions prior to or contemporaneously with the
Effective Time of such transfer:

     (i) Transfer Compression Equipment to the Transferor of equal or greater
Appraised Value than the Appraised Value of the Compression Equipment to be
transferred to the Transferee pursuant to Section 4.1 (provided, that if such
Compression Equipment is of greater Appraised Value than the Appraised Value of the
Compression Equipment to be transferred to the Transferee pursuant to

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Section 4.1,
such excess Appraised Value shall be deemed to be a transfer of Compression
Equipment with a value equal to such excess Appraised Value and Transferor shall be
required to take one or more of the actions contemplated by this Section 4.2(b) in
consideration for such excess Appraised Value) in accordance with this Article IV;

     (ii) Execute and deliver a lease agreement substantially in the form of the
Form Lease Agreement pursuant to which the Transferee agrees to lease from the
Transferor the Compression Equipment to be transferred to the Transferee pursuant to
Section 4.1, which lease agreement shall be counter-signed by the Transferor
(provided, however, that the ability of the Transferee to execute and deliver such a
lease may be limited in the sole discretion of Exterran, to the extent that an
Exterran Entity is the Transferor, or in the sole discretion of the Conflicts
Committee, to the extent that a member of the Partnership Group is the Transferor);
or

     (iii) Deliver to the Transferor cash (or an obligation to make payment in cash
no later than the end of the fiscal quarter in which the transfer is effected) in
the amount of the aggregate Appraised Value of the Compression Equipment to be
transferred to the Transferee pursuant to Section 4.1 (provided, however, that the
ability of the Transferee to make such a payment may be limited in the sole
discretion of Exterran, to the extent that an Exterran Entity is the Transferor, or
in the sole discretion of the Conflicts Committee, to the extent that a member of
the Partnership Group is the Transferor).

     (c) In the event that the Transferee cannot through the use of its commercially
reasonable efforts provide adequate consideration to the Transferor for Compression
Equipment to be transferred in any of the manners set forth in Section 4.2(b), then no such
transfer pursuant to the terms of this Article IV shall occur.

     (d) Notwithstanding Section 4.2(b), if the Transferor is a member of the Partnership
Group, the Transferee shall not be entitled to take the actions contemplated by Section
4.2(b)(ii) if such action would cause the Partnership to be treated as an association
taxable as a corporation or otherwise to be taxed as an entity for federal income tax
purposes. In such event, if compliance by Exterran with Sections 4.2(i) or (iii) is not
commercially practicable, the Partnership and Exterran shall negotiate in good faith to
reach agreement on another manner in which to reimburse the Partnership for such Compression
Equipment; provided, that the final terms of such reimbursement shall be approved by the
Conflicts Committee.

       4.3 [Reserved].

       4.4 Like-Kind Exchange Treatment. Each Party agrees to cooperate to the extent reasonably
necessary to allow the other, if the other so desires, to treat the transactions contemplated by
Section 4.1(b) as a like-kind exchange under Section 1031 of the Code, and relevant Treasury
regulations and/or under relevant state law provisions, if any. Any Party seeking such treatment
acknowledges that it has consulted or will consult with independent tax

23

 

counsel regarding the
applicability and benefits/detriments of such treatment and in no way has relied upon any
representations of the other party regarding the same.

       4.5 Other Sales Permitted. Nothing otherwise set forth in this Article IV shall be deemed to
preclude any of the Exterran Entities and any member of the Partnership Group from negotiating or
consummating at any time the purchase and sale of newly fabricated Compression Equipment, existing
Compression Equipment or all or any part of the USCSB; provided, however, that such negotiations or
purchase and sale shall be conducted pursuant to the terms and procedures then mutually agreed upon
by Exterran and the General Partner or the Conflicts Committee, as applicable.

       4.6 Termination. Unless this Agreement has otherwise terminated pursuant to Section 8.4, this
Article IV shall terminate on the third anniversary of the Effective Date.

       4.7 Proration of Ad Valorem Taxes. Ad valorem taxes relating to the ownership of Compression
Equipment transferred pursuant to Section 4.1 shall be prorated on a daily basis between the
Exterran Entities and the Partnership Group with the Exterran Entities and the Partnership Group
responsible for the prorated portion of such taxes for the period (for purposes of this Section
4.7, “period” means the period beginning on the assessment date for ad valorem taxes through the
day before the next assessment date for such taxes) of their respective ownership of such
transferred Compression Equipment. As between the Exterran Entities and the Partnership Group, the
party that receives
the ad valorem tax billing (the “Billed Party”) shall provide a copy of such billing to the
other party together with a calculation of the prorated ad valorem taxes owed by each party. The
party that did not receive the ad valorem tax billing shall pay its prorated portion of the ad
valorem taxes to the Billed Party prior to the due date of such taxes and the Billed Party shall be
responsible for the timely payment of the ad valorem taxes to the taxing authorities.

ARTICLE V

NEWLY FABRICATED COMPRESSION EQUIPMENT PURCHASES

       The Parties hereby acknowledge that none of the Exterran Entities is under any obligation to
offer or sell to any member of the Partnership Group newly fabricated Compression Equipment and no
member of the Partnership Group is under any obligation to purchase from any of the Exterran
Entities newly fabricated Compression Equipment; provided, that in the event that the General
Partner and Exterran mutually agree to enter into, or cause their respective Affiliates to enter
into, a purchase and sale agreement for the purchase and sale of newly fabricated Compression
Equipment, (i) such purchase and sale shall be subject to the standard terms and conditions then
utilized by the Exterran Entities for purchases and sales of newly fabricated Compression Equipment
and (ii) any member of the Partnership Group shall be permitted to purchase such Compression
Equipment for a price that is not more than the Fabricated Cost of such Compression Equipment plus
the Fixed Margin Amount.

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ARTICLE VI

LICENSE

       6.1 Grant of License. Subject to the terms and conditions herein, Licensor hereby grants to
Licensees the right and license to use the Marks solely in connection with the Licensees’
businesses and the services performed therewith within the United States during the term of this
Agreement.

       6.2 Restrictions on Marks. In order to ensure the quality of uses under the Marks, and to
protect the goodwill of the Marks, Licensees agree as follows:

     (a) Licensees will use the Marks only in accordance with such quality standards and
specifications as may be established by Licensor and communicated to Licensees from time to
time, it being understood that Licensor has evaluated Licensees’ businesses and services and
determined that they are of a quality that justifies this grant of a license. Licensees
recognize the substantial goodwill associated with the Marks and will not permit the quality
of the businesses or services with which Licensees use the Marks to deteriorate so as to
affect adversely the goodwill associated with the Marks. Licensees will not cause any
action, or permit or fail to prevent any action by Licensees’ affiliates or any other party
under Licensees’ control, that is deemed to injure, harm or dilute the distinctiveness or
goodwill of the Marks.

     (b) Licensees will only use the Marks in formats approved by Licensor and only in
strict association with Licensees’ businesses and the services performed therewith;

     (c) Prior to publishing any new format or appearance of the Marks or any new
advertising or promotional materials that incorporate the Marks, Licensees shall first
provide such format, appearance or materials to Licensor for its approval. If Licensor does
not inform Licensees in writing within fourteen (14) days from the date of the receipt of
such new format, appearance, or materials that such new format, appearance, or materials is
unacceptable, then such new format, appearance or materials shall be deemed to be acceptable
and approved by Licensor. Licensor may withhold approval of any proposed changes to the
format, appearance or materials which Licensees propose to use in Licensor’s sole
discretion; and

     (d) Licensees shall not use any other trademarks, service marks, trade names or logos
in connection with the Marks.

       6.3 Ownership. Licensor shall own all right, title and interest, including all goodwill
relating thereto, in and to the Marks, and all trademark rights embodied therein shall at all times
be solely vested in Licensor. Licensees have no right, title, interest or claim of ownership in the
Marks, except for the licenses granted in this Agreement. All use of the Marks shall inure to the
benefit of Licensor. Licensees agree that they will not attack the title of Licensor in and to the
Marks.

       6.4 Confidentiality. The Licensees shall maintain in strictest confidence all confidential or
nonpublic information or material disclosed by Licensor and in the materials

25

 

supplied hereunder in
connection with the license of the Marks, whether in writing or orally and whether or not marked as
confidential. Such confidential information includes, but is not limited to, algorithms,
inventions, ideas, processes, computer system architecture and design, operator interfaces,
operational systems, technical information, technical specifications, training and instruction
manuals, and the like. In furtherance of the foregoing confidentiality obligation, Licensees shall
limit disclosure of such confidential information to those of their employees, contractors or
agents having a need to access the confidential information for the purpose of exercising rights
granted hereunder.

       6.5 Estoppel. Nothing in this Agreement shall be construed as conferring by implication,
estoppel, or otherwise upon Licensees (a) any license or other right under the intellectual
property rights of Licensor other than the license granted herein to the Marks as set forth
expressly herein or (b) any license rights other than those expressly granted herein.

       6.6 Warranties; Disclaimers.

     (a) The Licensor represents and warrants that (i) it owns and has the right to license
the Marks licensed under this Agreement and (ii) the Marks do not infringe upon the rights
of any third parties.

     (b) EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS DESCRIBED IN SECTION 6.6(a), LICENSOR
DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS (EXPRESS OR IMPLIED, ORAL OR
WRITTEN) WITH RESPECT TO THE SUBJECT MATTER HEREOF, OR ANY PART THEREOF, INCLUDING ANY AND
ALL IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS OR SUITABILITY FOR
ANY PURPOSE (WHETHER ANY LICENSEE KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS
OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF
CUSTOM OR USAGE IN THE TRADE OR BY COURSE OF DEALING.

       6.7 In the Event of Termination. In the event of termination of this Agreement pursuant to
Section 8.4 or otherwise, the Licensees’ right to utilize or possess the Marks licensed under this
Agreement shall automatically cease, and concurrently with such termination of this Agreement, the
Licensees shall (i) cease all use of the Marks and shall adopt new trademarks, service marks, and
trade names that are not confusingly similar to the Marks and (ii) no later than ninety (90) days
following the termination of this Agreement, the General Partner shall have caused each of the
Partnership Entities to change its legal name so that there is no longer any reference therein to
the name “Universal Compression,” “Exterran,” “Hanover,” any name or d/b/a then used by any
Exterran Entity or any variation, derivation or abbreviation thereof, and in connection therewith,
the General Partner shall cause each such Partnership Entity to make all necessary filings of
certificates with the Secretary of State of the State of Delaware and to otherwise amend its
Organizational Documents by such date.

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ARTICLE VII

INDEMNIFICATION

       7.1 Environmental Indemnification.

     (a) Subject to Section 7.3, Exterran shall indemnify, defend and hold harmless the
Partnership Group from and against any environmental claims, losses and expenses (including,
without limitation, court costs and reasonable attorney’s and expert’s fees) of any and
every kind or character, known or unknown, fixed or contingent, suffered or incurred by the
Partnership Group by reason of or arising out of:

     (i) any violation of Environmental Laws associated with the ownership or
operation of the Partnership Assets; or

     (ii) any event or condition associated with ownership or operation of the
Partnership Assets (including, without limitation, the presence of Hazardous
Substances on, under, about or migrating to or from the Partnership Assets or the
disposal or release of Hazardous Substances generated by operation
of the Partnership Assets) including, without limitation, (A) the cost and
expense of any investigation, assessment, evaluation, monitoring, containment,
cleanup, repair, restoration, remediation, or other corrective action required or
necessary under Environmental Laws or to satisfy any applicable Voluntary Cleanup
Program, (B) the cost or expense of the preparation and implementation of any
closure, remedial, corrective action or other plans required or necessary under
Environmental Laws or to satisfy any applicable Voluntary Cleanup Program and (C)
the cost and expense for any environmental pre-trial, trial, or appellate legal or
litigation support work; provided, in the case of clauses (A) and (B) such cost and
expense shall not included the costs of and associated with project management and
soil and ground water monitoring;

but only to the extent that such violation complained of under Section 7.1(a)(i) or such
events or conditions included under Section 7.1(a)(ii) occurred before the applicable
Closing Date with respect to such Partnership Assets (collectively, “Covered Environmental
Losses”).

     (b) The Partnership Group shall indemnify, defend and hold harmless Exterran and its
Affiliates from and against any Covered Environmental Losses suffered or incurred by
Exterran and its Affiliates relating to the Partnership Assets occurring on or after the
applicable Closing Date, except to the extent that the Partnership Group is indemnified with
respect to any of such Covered Environmental Losses under Section 7.1(a), and unless such
indemnification would not be permitted under the Partnership Agreement by reason of one of
the provisos contained in Section 7.7(a) of the Partnership Agreement.

     (c) Except for claims for Covered Environmental Losses made before the third
anniversary of the applicable Closing Date, which shall not terminate, all

27

 

indemnification
obligations in this Section 7.1 shall terminate on the third anniversary of the applicable
Closing Date.

       7.2 Additional Indemnification.

     (a) In addition to and not in limitation of the indemnification provided under Section
7.1(a), subject to Section 7.3 and except as otherwise set forth in any Exhibit hereto,
Exterran shall indemnify, defend and hold harmless the Partnership Group from and against
any claims, losses and expenses (including, without limitation, court costs and reasonable
attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or
contingent, suffered or incurred by the Partnership Group (“Other Losses”) by reason of or
arising out of:

     (i) failure to convey good and defensible title to the Partnership Assets to
one or more members of the Partnership Group, and such failure render the
Partnership Group unable to use or operate the Partnership Assets in substantially
the same manner as they were operated by the Exterran Entities immediately prior to
the applicable Closing Date with respect to such Partnership Assets;

     (ii) events and conditions associated with the Retained Assets whether
occurring before or after the applicable Closing Date; and

     (iii) all federal, state and local income tax liabilities attributable to the
operation of the Partnership Assets prior to the applicable Closing Date, including
any such income tax liabilities of Exterran that may result from the consummation of
the formation transactions for the Partnership Entities;

provided, however, that in the case of clauses (i) and (ii) above, such indemnification
obligations shall terminate on the third anniversary of the applicable Closing Date; and
that in the case of clause (iii) above, such indemnification obligations shall survive until
sixty (60) days after the termination of any applicable statute of limitations.

     (b) In addition to and not in limitation of the indemnification provided under Section
7.1(b) and the Partnership Agreement and except as otherwise set forth in any Exhibit
hereto, the Partnership Group shall indemnify, defend and hold harmless Exterran and its
Affiliates from and against any claims, losses and expenses (including, without limitation,
court costs and reasonable attorney’s and expert’s fees) of any and every kind or character,
known or unknown, fixed or contingent, suffered or incurred by Exterran and its Affiliates
by reason of or arising out of events and conditions associated with the operation of the
Partnership Assets and occurring on or after the applicable Closing Date unless such
indemnification would not be permitted under the Partnership Agreement by reason of one of
the provisos contained in Section 7.7(a) of the Partnership Agreement.

28

 

       7.3 Limitations Regarding Indemnification. (a) The aggregate liability of Exterran
under Section 7.1(a) shall not exceed $5.0 million.

     (b) No claims may be made against Exterran for indemnification pursuant to Sections
7.1(a) or 7.2(a) unless the aggregate dollar amount of the Losses suffered or incurred by
the Partnership Group or the Partnership Indemnitees exceed $250,000, after such time
Exterran shall be liable for the full amount of such claims, subject to the limitations of
Section 7.3(a).

     (c) Notwithstanding anything herein to the contrary, in no event shall Exterran have
any indemnification obligations under Section 7.1(a) for claims made as a result of
additions to or modifications of Environmental Laws promulgated after the applicable Closing
Date with respect to a particular Partnership Asset.

       7.4 Indemnification Procedures

     (a) The Indemnified Party agrees that promptly after it becomes aware of facts giving
rise to a claim for indemnification under this Article VII, it will provide notice thereof
in writing to the Indemnifying Party, specifying the nature of and specific basis for such
claim; provided, however, that the Indemnified Party shall not submit claims more frequently
than once a calendar quarter (or twice in the case of the last
calendar quarter prior to the expiration of the applicable indemnity coverage under
this Agreement).

     (b) The Indemnifying Party shall have the right to control all aspects of the defense
of (and any counterclaims with respect to) any claims brought against the Indemnified Party
that are covered by the indemnification under this Article VII, including, without
limitation, the selection of counsel, determination of whether to appeal any decision of any
court and the settling of any such matter or any issues relating thereto; provided, however,
that no such settlement shall be entered into without the consent of the Indemnified Party
(with the concurrence of the Conflicts Committee in the case of the Partnership Group)
unless it includes a full release of the Indemnified Party from such matter or issues, as
the case may be, and does not include the admission of fault, culpability or a failure to
act, by or on behalf of such Indemnified Party.

     (c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with
respect to all aspects of the defense of any claims covered by the indemnification under
this Article VII, including, without limitation, the prompt furnishing to the Indemnifying
Party of any correspondence or other notice relating thereto that the Indemnified Party may
receive, permitting the name of the Indemnified Party to be utilized in connection with such
defense, the making available to the Indemnifying Party of any files, records or other
information of the Indemnified Party that the Indemnifying Party considers relevant to such
defense and the making available to the Indemnifying Party, at no cost to the Indemnifying
Party, of any employees of the Indemnified Party; provided, however, that in connection
therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact
thereof on the operations of the Indemnified Party and further agrees to endeavor to
maintain the confidentiality of all

29

 

files, records and other information furnished by the
Indemnified Party pursuant to this Section 7.4. In no event shall the obligation of the
Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately
preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire
and pay for counsel in connection with the defense of any claims covered by the
indemnification set forth in this Article VII; provided, however, that the Indemnified Party
may, at its own option, cost and expense, hire and pay for counsel in connection with any
such defense. The Indemnifying Party agrees to keep any such counsel hired by the
Indemnified Party informed as to the status of any such defense, but the Indemnifying Party
shall have the right to retain sole control over such defense.

     (d) In determining the amount of any loss, cost, damage or expense for which the
Indemnified Party is entitled to indemnification under this Agreement, the gross amount of
the indemnification will be reduced by (i) any insurance proceeds realized by the
Indemnified Party and (ii) all amounts recovered by the Indemnified Party under contractual
indemnities from third Persons. The Partnership hereby agrees to use commercially
reasonable efforts to realize any applicable insurance proceeds or amounts recoverable under
such contractual indemnities.

     (e) The date on which the Indemnifying Party receives notification of a claim for
indemnification shall determine whether such claim is timely made.

ARTICLE VIII

MISCELLANEOUS

       8.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and governed
by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might
refer the construction or interpretation of this Agreement to the laws of another state. Each Party
hereby submits to the jurisdiction of the state and federal courts in the State of Texas and to
venue in Texas.

       8.2 Notice. All notices, requests or consents provided for or permitted to be given pursuant
to this Agreement must be in writing and must be given by depositing same in the United States
mail, addressed to the Person to be notified, postpaid, and registered or certified with return
receipt requested or by delivering such notice in person or by telecopier or telegram to such
Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice
given by telegram or telecopier shall be effective upon actual receipt if received during the
recipient’s normal business hours, or at the beginning of the recipient’s next business day after
receipt if not received during the recipient’s normal business hours. All notices to be sent to a
Party pursuant to this Agreement shall be sent to or made at the address set forth below or at such
other address as such Party may stipulate to the other Parties in the manner provided in this
Section 8.2.

For notices to any of the Exterran Entities:

16666 Northchase Drive

Houston, Texas 77060

30

 

Phone: (281) 836-7000

Fax:      (281) 836-8061

Attention: Chief Financial Officer

For notices to any of the Partnership Entities:

16666 Northchase Drive

Houston, Texas 77060

Phone: (281) 836-7000

Fax: (281) 836-8061

Attention: Chief Financial Officer

       8.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating
to the matters contained herein, superseding all prior contracts or agreements, whether oral or
written, relating to the matters contained herein, other than the 2009 Contribution Agreement.

       8.4 Termination. This Agreement, other than the provisions set forth in Articles VII and VIII
hereof, shall terminate upon a Change of Control of GP LLC, the General Partner or the Partnership,
other than any Change of Control of GP LLC, the General Partner or the Partnership deemed to have
occurred pursuant to clause (iv) of the definition of Change of Control solely as a result of a
Change of Control of Exterran.

       8.5 Effect of Waiver or Consent. No waiver or consent, express or implied, by any Party to or
of any breach or default by any Person in the performance by such Person of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or
default in the performance by such Person of the same or any other obligations of such Person
hereunder. Failure on the part of a Party to complain of any act of any Person or to declare any
Person in default, irrespective of how long such failure continues, shall not constitute a waiver
by such Party of its rights hereunder until the applicable statute of limitations period has run.

       8.6 Amendment or Modification. This Agreement may be amended or modified from time to time
only by the written agreement of all the Parties; provided, however, that the Partnership and the
Operating Company may not, without the prior approval of the Conflicts Committee, agree to any
amendment or modification of this Agreement that the General Partner determines will adversely
affect the holders of Common Units. Each such instrument shall be reduced to writing and shall be
designated on its face an “Amendment” or an “Addendum” to this Agreement.

       8.7 Assignment; Third Party Beneficiaries. Any Party shall have the right to assign its
rights under this Agreement without the consent of any other Party, but no Party shall have the
right to assign its obligations under this Agreement without the consent of the other Parties.
Subject to the limitations set forth in Section 8.14, each of the Parties hereto specifically
intends that each entity comprising the Exterran Entities and each entity comprising the
Partnership Entities, as applicable, whether or not a Party to this Agreement, shall be entitled to

31

 

assert rights and remedies hereunder as third-party beneficiaries hereto with respect to those
provisions of this Agreement affording a right, benefit or privilege to any such entity.

       8.8 Counterparts. This Agreement may be executed in any number of counterparts (including
facsimile counterparts) with the same effect as if all signatory Parties had signed the same
document. All counterparts shall be construed together and shall constitute one and the same
instrument.

       8.9 Severability. If any provision of this Agreement or the application thereof to any Person
or circumstance shall be held invalid or unenforceable to any extent, the remainder of this
Agreement and the application of such provision to other Persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.

       8.10 Gender, Parts, Articles and Sections. Whenever the context requires, the gender of all
words used in this Agreement shall include the masculine, feminine and neuter, and the number of
all words shall include the singular and plural. All references to Article numbers and Section
numbers refer to Articles and Sections of this Agreement.

       8.11 Further Assurances. In connection with this Agreement and all transactions contemplated
by this Agreement, each Party agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as may be necessary or appropriate to effectuate,
carry out and perform all of the terms, provisions and conditions of this Agreement and all such
transactions.

       8.12 Withholding or Granting of Consent. Except as otherwise expressly provided in this
Agreement, each Party may, with respect to any consent or approval that it is entitled to grant
pursuant to this Agreement, grant or withhold such consent or approval in its sole and uncontrolled
discretion, with or without cause, and subject to such conditions as it shall deem appropriate.

       8.13 Laws and Regulations. Notwithstanding any provision of this Agreement to the contrary, no
Party shall be required to take any act, or fail to take any act, under this Agreement if the
effect thereof would be to cause such Party to be in violation of any applicable law, statute, rule
or regulation.

       8.14 Negation of Rights of Limited Partners, Assignees and Third Parties. The provisions of
this Agreement are enforceable solely by the Parties, and no shareholder, limited partner, member,
or assignee of Exterran, EESLP, GP LLC, the General Partner, the Partnership or the Operating
Company or other Person shall have the right, separate and apart from Exterran, EESLP, GP LLC, the
General Partner, the Partnership or the Operating Company, to enforce any provision of this
Agreement or to compel any Party to comply with the terms of this Agreement.

       8.15 No Recourse Against Officers or Directors. For the avoidance of doubt, the provisions of
this Agreement shall not give rise to any right of recourse against any officer or director of any
Exterran Entity or any Partnership Entity.

32

 

[Signature pages follow.]

33

 

     IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the
Effective Date.

	 	 	 	 	 	 	 
	 	 	EXTERRAN HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:
	 	Ernie L. Danner	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EXTERRAN ENERGY SOLUTIONS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

Ernie L. Danner
	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EXTERRAN GP LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

David S. Miller
	 	 
	 

	 	Title:
	 	Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EXTERRAN GENERAL PARTNER, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Exterran GP LLC,	 	 
	 

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	David S. Miller	 	 
	 

	 	Title:
	 	Vice President and Chief Financial Officer	 	 

Signature Page — Omnibus Agreement

 

 

	 	 	 	 	 	 	 
	 	 	EXTERRAN PARTNERS, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Exterran General Partner, L.P.,
	 

	 	 	 	its general partner
	 
	 	 	 	 
	 

	 	By:
	 	Exterran GP LLC,
	 

	 	 	 	its general partner
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	David S. Miller
	 

	 	Title:
	 	Vice President and Chief Financial Officer
	 
	 	 	 	 
	 	 	EXLP OPERATING LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	David S. Miller
	 

	 	Title:
	 	Vice President and Chief Financial Officer

Signature Page — Omnibus Agreement

 

 

Schedule 1.1

Fixed Margin Percentage

11.1%

Schedule 1.1

 

 

Schedule 3.1(a)

Services

	1)	 	operations,
	 
	2)	 	marketing,
	 
	3)	 	maintenance and repair of Compression Equipment,
	 
	4)	 	periodic overhauls of Compression Equipment,
	 
	5)	 	inventory management,
	 
	6)	 	legal,
	 
	7)	 	accounting,
	 
	8)	 	treasury,
	 
	9)	 	insurance administration and claims processing,
	 
	10)	 	risk management,
	 
	11)	 	health, safety and environmental,
	 
	12)	 	information technology,
	 
	13)	 	human resources,
	 
	14)	 	credit,
	 
	15)	 	collections,
	 
	16)	 	payroll,
	 
	17)	 	internal audit,
	 
	18)	 	taxes,
	 
	19)	 	engineering,
	 
	20)	 	facilities management,
	 
	21)	 	investor relations,
	 
	22)	 	ERP,
	 
	23)	 	training,
	 
	24)	 	executive,
	 
	25)	 	sales, and
	 
	26)	 	business development.

Schedule 3.1(a)

 

 

Schedule 3.1(b)

Excluded Services

	1.	 	Fabrication and sale of new Compression Equipment.

Schedule 3.1(b)

 

 

Schedule 6.1

Marks

Schedule 6.1

 

 

Schedule 6.1

 

 

Exhibit 1

FORM ASSIGNMENT AND BILL OF SALE

       For valuable consideration, the receipt of which is hereby acknowledged,
                    , a [place of formation] [entity type] (“Seller”) hereby SELLS, GRANTS,
ASSIGNS and TRANSFERS to                     , a [place of formation] [entity type]
(“Purchaser”), effective as of                     , 20___, good, marketable and indefeasible title to
all of Seller’s right, title and interest in, to and under the Compression Equipment described on
Exhibit A attached hereto and made a part hereof for all purposes, together with all
assets, rights and properties related to such Compression Equipment of the sort described in
Section 4.2(b) of the Omnibus Agreement (as defined below) (collectively, the “Assets”):

       The Seller, in its name and in the name of its successors and assigns, hereby represents that
it has the power and authority to sell or otherwise transfer the Assets in the manner provided in
this Assignment and Bill of Sale and that the Assets are free and clear of all Liens, except for
any Liens created by Purchaser and except for Permitted Liens. EXCEPT AS EXPRESSLY PROVIDED IN THE
OMNIBUS AGREEMENT, THE ASSETS ARE BEING SOLD WITHOUT ANY WARRANTIES, WHETHER EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF FITNESS FOR USE OR MERCHANTIBILITY.

       Seller does hereby bind itself, its successors and assigns, to forever warrant and defend the
title to the Assets unto Purchaser, its successors and assigns against the lawful claim or claims
of any person whomsoever claiming an interest in the Assets.

       Seller covenants and agrees to execute and deliver to Purchaser all such other additional
instruments and other documents and will do all such other acts and things as may be necessary to
fully assign to Purchaser, or its successors and assigns, all of the Assets.

       All of the provisions hereof shall inure to the benefit of and be binding upon the respective
heirs, successors and assigns of Seller and Purchaser.

       Terms used herein but not defined herein shall have the meanings assigned to such terms in the
Second Amended and Restated Omnibus Agreement dated as of [___], 2009 by and among Exterran
Holdings, Inc., a Delaware corporation (“Exterran”), Exterran Energy Solutions, L.P., a Delaware
limited partnership (“EESLP”), Exterran GP LLC, a Delaware limited liability company formerly named
UCO GP, LLC (“GP LLC”), Exterran General Partner, L.P., a Delaware limited partnership formerly
named UCO General Partner, L.P. (the “General Partner”), Exterran Partners, L.P., a Delaware
limited partnership (the “Partnership”) and EXLP Operating LLC (the “Operating Company”) (the
“Omnibus Agreement”).

Exhibit 1-1

 

 

       IN WITNESS WHEREOF, Seller has caused this Assignment and Bill of Sale to be executed on
                    , ___20___.

	 	 	 	 	 	 	 
	 	 	“SELLER”

[   ]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 
	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	“BUYER”

[   ]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 
	 	 
	 

	 	Title:	 	 
	 	 

Exhibit 1-2

 

 

Exhibit 2

FORM COMPRESSION LEASE AGREEMENT

EQUIPMENT MASTER RENTAL AGREEMENT

This Equipment Master Rental Agreement including all Schedule(s), which are hereby incorporated by
reference (collectively, this “Agreement”), is made between                      (“Lessor”)
and                     , (“Lessee”).

Lessor and Lessee agree as follows:

1. Lease. Subject to and on the terms and conditions set forth in Article IV of the Second Amended
and Restated Omnibus Agreement among Exterran Holdings, Inc., Exterran Energy Solutions, L.P.,
Exterran GP LLC, Exterran General Partner, L.P., Exterran Partners, L.P., and EXLP Operating LLC,
as such agreement may be amended, restated, modified, supplemented or replaced (the “Omnibus
Agreement”) and herein, Lessee and Lessor may from time to time execute Schedule(s) to this
Agreement (each a “Schedule”) and Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees
to lease from Lessor, the personal property described and detailed as the “Equipment” on the
applicable Schedule. Each Schedule in conjunction with this Agreement shall be deemed to be a
separately enforceable lease between Lessee and Lessor with respect to the Equipment specified in
such Schedule. Lessee and Lessor each represent and warrant for itself that with respect to this
Agreement and each applicable Schedule:

       a. the execution, delivery and performance by each party have been duly authorized by all
necessary corporate action;

       b. the individual executing the same was duly authorized to do so; and

       c. each constitutes legal, valid and binding agreements, enforceable in accordance with their
terms.

2. Term; Rent; and Equipment Type.

       a. Each applicable Schedule shall set forth the term of the lease and amount of rental
payments for the Equipment listed thereon, which Lessee shall pay as set forth on the applicable
Schedule. If Lessee fails to pay any rental or other sum when due, Lessee also shall pay to Lessor
interest thereon from the due date thereof to the date of payment at a rate equal to the lesser of
18% per annum or the maximum rate permitted by applicable law (“Applicable Rate”). All payments by
Lessee hereunder shall be payable at the office of Lessor, or at such other place as Lessor may
from time to time may designate in writing. It is the intent of the parties that the applicable
Schedule shall have a term that is no greater than a whole or fractional month less than 75% of the
remaining useful life of the Equipment subject to such Schedule. Notwithstanding the foregoing,
Lessor and Lessee may offset any amounts due and owing from the other against any amounts due and
owing to the other.

       b. Each applicable Schedule shall set forth the specific Equipment type.

3. Taxes.

       a. Lessee shall be liable for any and all license fees and assessments and all consumption,
sales, use, property, excise and other taxes or charges (including any interest and penalties), now
or hereafter imposed by any governmental body or agency upon the Equipment or the purchase,
ownership, possession, leasing, operation, use, or disposition

Exhibit 2-1

 

 

thereof hereunder, or the rentals or other payments hereunder (excluding taxes on or measured
by the net income of Lessor) (“Taxes”). In this regard, Lessee shall prepare and file promptly
with the appropriate offices any and all Tax and other similar returns required to be filed with
respect thereto (sending copies thereof to Lessor) or, if requested by Lessor, notify Lessor of
such requirement and furnish Lessor with all information required by Lessor so that it may effect
such filing. If such filings shall be made by Lessor, Lessee shall reimburse Lessor for any such
Taxes promptly when due.

4. Inspection and Acceptance upon Delivery of Equipment to Lessee and Return of Equipment to
Lessor. Within ninety-six (96) hours after delivery of the Equipment to be leased to Lessee under
the applicable Schedule, Lessee shall inspect the Equipment. Unless within said ninety-six (96)
hour period Lessee notifies Lessor in writing to the contrary stating the details of any defects,
Lessee shall be conclusively presumed to have accepted the Equipment in its then condition. If
within said ninety-six (96) hour period Lessee notifies Lessor in writing of the unacceptability of
the Equipment, Lessee’s obligations to lease the Equipment shall cease forthwith. Except as
otherwise provided in the applicable Schedule, upon acceptance of delivery, Lessee assumes the
care, custody, supervision and control of the Equipment and of any and all persons or property in
the vicinity of the Equipment during the time of delivery, operation and return. Lessee
acknowledges that all Equipment rented hereunder and specified in the Schedule(s) is of the size,
design and capacity selected for the operating conditions furnished to Lessor by Lessee and is
suitable for Lessee’s purposes. Lessee acknowledges that Lessor may not be the manufacturer or
supplier of the Equipment and any quotations or recommendations made by Lessor are based on
information supplied by Lessee and the manufacturer or supplier of the Equipment. Within five (5)
business days after return of Equipment by Lessee to Lessor at its designated yard, Lessor shall
inspect such Equipment and notify Lessee of any damage of the Equipment in addition to damage
previously reported to Lessee pursuant to Section 7(e) and invoice Lessor for any such damage.

5. Freight. Lessee agrees to bear all of the cost of connecting the Equipment and of disconnecting
the Equipment prior to returning the Equipment to Lessor. Except as otherwise provided in the
applicable Schedule, all costs of transporting the Equipment from Lessor’s yard to Lessee’s Site
described on the applicable Schedule and of transporting the Equipment from such Site back to
Lessor’s designated yard will be at Lessee’s sole cost and expense.

6. Insurance. Lessee shall, at Lessee’s sole cost and expense, maintain insurance or
Lessor-approved self-insurance in such amounts, against such risks (including, but not limited to,
all risk and public liability and property insurance with respect to the Equipment (including, but
not limited to, windstorm, flood and earthquake)) from the time of Lessee’s acceptance of the
Equipment in accordance with Section 4 until it is returned to the Lessor’s designated yard, with
such carriers and in such form as shall be satisfactory to Lessor.

7. Use / Lessee’s Responsibilities. Lessee agrees to use the Equipment in a careful and prudent
manner with competent agents, employees or subcontractors in accordance with the specifications, if
any, of the manufacturer of the Equipment. If the Equipment is compression equipment, Lessee
agrees to pay for damages to the Equipment resulting from free water, excessive condensate or
foreign solids, or impurities contained in the gas stream. Lessee further agrees to pay for all
damages to the Equipment resulting from abusive use, failure to maintain the Equipment in
accordance with this Agreement or from any negligence on the part

Exhibit 2-2

 

 

of Lessee, its agents, employees or subcontractors; provided, however, Lessee shall not be liable
for such damages to the extent such damages are caused by the acts or omissions of Lessor or its
parent company.

       In addition to any Lessee obligations contained elsewhere in this Agreement and within any
Schedule hereto, except to the extent any Schedule provides otherwise, Lessee agrees to and shall:

       a. If Lessor is to install the equipment, provide Lessor with authorized ingress and egress to
and from the site designated in the applicable Schedule for installation of the Equipment (the
“Site”). Should Lessor be denied access to the Site for any reason not reasonably within Lessor’s
control, any time lost by Lessor shall be paid for by Lessee on demand, and if not then paid, shall
incur interest at the Applicable Rate. To the extent that Lessee has superior knowledge of the
Site and access routes to the Site, Lessee must advise Lessor of any conditions or obstructions
which Lessor might encounter while en route to the Site. Lessee agrees to maintain the road, if
any, and the Site in such a condition that will allow free access and movement to and from the Site
in an ordinary highway type vehicle. If because of an attribute of Lessee’s operations, Lessor is
required to use any specialized transportation equipment, cranes or other services and supplies,
Lessee shall furnish the same at its expense and without cost to Lessor;

       b. Prepare a sound location at the Site adequate in size and capable of properly supporting
the Equipment;

       c. Immediately mitigate and repair any stoppage, malfunction or leaks of oil or coolant from
the Equipment; and

       d. Return the Equipment in good operating condition, which by way of example, but not
exclusion, means free of hydrocarbons, mud, sand and naturally occurring radioactive materials and
with castings (e.g. blocks, frames, heads, manifolds, housings, distance pieces, cylinders), shafts
(e.g. crankshafts, camshafts, cooler shafts), rods (e.g. connecting rods, piston rods), controls,
pumps, scrubbers, bottles, processing piping, header, box, fan and accessories that are not, by way
of example, but not exclusion, damaged, rusted or pitted, bent, cracked or inoperable. If the
Equipment is not returned in good operating condition, Lessee agrees to pay Lessor such amounts
necessary to bring Equipment up to good operating condition upon invoice by Lessor; provided,
however, Lessee shall not be liable for such amounts to the extent such damages are caused by the
acts or omissions of Lessor or its parent company.

       e. Perform such other obligations set forth in Annex A hereto.

8. Maintenance. Unless otherwise provided in the applicable Schedule or separate written operation
and maintenance agreement, including the Omnibus Agreement, Lessee acknowledges that Lessor is
providing the Equipment as a “bare rental” and, therefore, Lessor will have no maintenance or
inspection obligations with respect to the Equipment.

9. Inspection. Lessor shall have the right at all reasonable times to enter upon the premises
where the Equipment may be located for the purpose of inspecting it or observing its use.

10. Title; Personal Property; Encumbrances; Location. Lessee covenants that:

       a. The Equipment is and shall remain personal property and shall not be attached to or become
part of any realty;

       b. The Equipment will be installed and used at the Site specified in the applicable Schedule
pertaining thereto and that it shall not be removed therefrom without the permission of Lessor;

Exhibit 2-3

 

 

       c. That Lessee will not, except as expressly authorized in this Agreement, sell, secrete,
mortgage, assign, transfer, lease, sublet, loan part with possession of, or encumber the Equipment
or permit any liens or charges to become effective thereon or permit or attempt to do any of the
acts aforesaid. Lessee agrees, at Lessee’s own expense, to take such action as may be necessary to
remove any such encumbrance, lien or charge and to prevent any third party from acquiring any other
interest in the Equipment (including, but not limited to, by reason of such Equipment being deemed
to be a fixture or a part of any realty); and

       d. Lessee will not change or remove any insignia, serial number or lettering of the Equipment.

11. Licenses, Permits and Compliance. Lessee shall, at its sole expense;

       a. Comply with all applicable rules and regulations of any federal, provincial, state, county,
city, local, municipal or regulatory agency relating to the construction or operation of the
Equipment at the Site, or environmental requirements associated therewith (including, but not
limited to, air emission, noise and environmental discharges); and

       b. Obtain and maintain throughout the term, or any extension thereof, any and all licenses
and/or permit fees assessed as a result of this Agreement or against said Equipment.

12. Waste Disposal. Lessee bears responsibility for disposal of liquids, solid, and hazardous waste
discharged by the Equipment at the Site in accordance with federal, state and local environmental
rules and regulations.

13. Events of Default; Remedies; Expenses. In the event that:

       a. Lessee shall default in the payment of any installment of rent or other sum payable under
this Agreement or default in the observance or performance of any other covenant or agreement in
this Agreement and the failure to cure said default within ten (10) days after notice by Lessor;

       b. Lessee shall dissolve, or become insolvent (however evidenced) or bankrupt, make an
assignment for the benefit of creditors, suspend the transaction of its usual business or consent
to the appointment of a trustee or receiver, or a trustee or a receiver shall be appointed for
Lessee or for a substantial part of its property, or bankruptcy, reorganization, insolvency, or
similar proceedings shall be instituted by or against Lessee;

       c. an order, judgment, or decree shall be entered against Lessee by a court of competent
jurisdiction and such order, judgment or decree shall continue unpaid or unsatisfied and in effect
for any period of sixty (60) consecutive days without a stay of execution, or any execution or writ
or process shall be issued in connection with any action or proceeding against Lessee or its
property whereby all Equipment under the Schedules or any substantial part of Lessee’s property may
be taken or restrained;

       d. any indebtedness of Lessee for borrowed money shall become due and payable by acceleration
of maturity thereof; or

       e. Lessor shall in good faith believe that the prospect of payment or performance by Lessee is
impaired,

then and in any such event, Lessor may, by written notice to Lessee:

          (1) Immediately terminate this Agreement and any Schedule then in effect, at its option, and
Lessee’s rights thereunder; and/or

          (2) Declare immediately due, and payable all rental installments and other sums hereunder
forthwith due and payable whereupon the same shall forthwith become due and payable as liquidated
damages and not as a penalty; and/or

Exhibit 2-4

 

 

          (3) Proceed by appropriate court action or actions either at law or in equity, to enforce
performance by Lessee of the applicable covenants of this Agreement or to recover damages for the
breach thereof; and/or

          (4) Without necessity of process or other legal action, enter onto the premises of Lessee or
such other premises as the Equipment may then be located and stop the operation of the Equipment
and/or take possession of the Equipment, disconnecting and separating the Equipment from any other
property and using all force necessary or permitted by applicable law, without Lessor incurring any
liability to Lessee or any other person arising out of the taking of any such action. Lessee
agrees to and shall indemnify and hold harmless Lessor from any and all claims, losses, damages,
causes of action, suits and liabilities of any kind arising in favor of Lessee, or any interest
owner that Lessee represents or serves as operator and arising out of or in connection with the
stopping of the operation of the Equipment and/or the removal of the Equipment as aforesaid,
whether same result from the forfeiture of any oil, gas or mineral lease, damage to a producing
reservoir or lease operations, lost production or other event or condition. In addition, Lessee
shall continue to be liable for all other indemnities under this Agreement and for all legal fees
and other costs and expenses resulting from the foregoing defaults or the exercise of Lessor’s
remedies. Lessor shall be entitled to take or retain, by way of offset against any or all amounts
due and owing under this Agreement, any assets, tangible or intangible, of Lessee which may then be
in the possession of Lessor, its correspondents or agents, wheresoever situated.

14. Indemnity of Lessor.

       a. Lessee is responsible and liable for loss of or damage to Equipment arising between the
time of delivery and redelivery of the Equipment and Lessee shall protect, defend, indemnify and
hold Lessor harmless from and against any such loss or damage, including, but not limited to,
improper operation, improper maintenance (unless Lessor performs maintenance), compression of dirty
or wet gas, fire, freezing, theft, windstorm, hailstorm, flood, riot, insurrection or explosion,
except to the extent such loss or damage is caused by the acts or omissions of Lessor or its parent
company.

       b. Lessee shall protect, defend, indemnify and hold Lessor harmless from and against any loss,
damage, liability, suit, expense, cost or claim, however occurring as the result of loss of or
damage to property (other than the Equipment), arising between the time of delivery and redelivery
of the Equipment, whether such property is owned by Lessee or third party, and for injury to or
death of persons, whether Lessee or its employees or third parties, except to the extent such loss
or damage is caused by the acts or omissions of Lessor or its parent company.

       c. No Limit. Except as otherwise provided herein, the indemnity obligations in this
Agreement shall not be limited to the amount of insurance carried by either party hereto.

       d. Application, Construction and Interpretation. Notwithstanding any provision in
this Agreement to the contrary, the parties agree that the indemnities in this Agreement shall be
limited to the extent and only to the extent necessary to comply with applicable law and that this
Agreement shall be deemed to be amended to the extent necessary to enforce the indemnities herein.

       e. Waiver of Consequential Damages. NOTWITHSTANDING ANYTHING CONTAINED IN THIS
AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR, AND EACH PARTY
HEREBY RELEASES THE OTHER PARTY FROM, ANY INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL
DAMAGES OR LOSSES RELATED TO OR IN CONNECTION WITH THIS AGREEMENT, OR ANY EQUIPMENT, INCLUDING, BUT
NOT LIMITED TO,

Exhibit 2-5

 

 

DAMAGES OR LOSSES FOR LOST PRODUCTION, LOST REVENUE, LOST PRODUCT, LOST PROFITS, LOST BUSINESS
OR BUSINESS INTERRUPTIONS, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY PRE-EXISTING
CONDITIONS, WHETHER SUCH CONDITIONS BE PATENT OR LATENT, BREACH OF REPRESENTATION OR WARRANTY
(EXPRESS OR IMPLIED), ULTRAHAZARDOUS ACTIVITY, STRICT LIABILITY, TORT, BREACH OF CONTRACT, BREACH
OF STATUTORY DUTY, BREACH OF ANY SAFETY REQUIREMENT OR REGULATION, OR THE NEGLIGENCE OF ANY PERSON
OR PARTY, INCLUDING, BUT NOT LIMITED TO, THE INDEMNIFIED PARTY OR PARTIES AND ITS OR THEIR GROUPS,
WHETHER SUCH NEGLIGENCE BE SOLE, JOINT AND/OR CONCURRENT, ACTIVE OR PASSIVE, OR ANY OTHER THEORY OF
LEGAL LIABILITY WITHOUT LIMITATION, EXCEPT TO THE EXTENT ANY SUCH RELEASING PARTY ACTUALLY SUFFERS
SUCH DAMAGES OR LOSSES TO A THIRD PARTY AND SUCH DAMAGES OR LOSSES ARE OTHERWISE INDEMNIFIABLE
UNDER SECTION 14 OF THIS AGREEMENT. THE PARTIES FURTHER AGREE THAT THE FORGOING RELEASE OF
LIABILITY SHALL ALSO EXTEND TO EACH PARTY’S PARENT, SUBSIDIARY, AFFILIATED AND RELATED COMPANIES
AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND REPRESENTATIVES.

15. Savings Clause. The parties agree that the indemnities in this Agreement are limited to the
extent necessary to comply with applicable state or federal law and that this Agreement shall be
deemed to be amended to comply with those laws to the extent their requirements are at variance
with any indemnification provisions set forth in this Agreement.

16. Assignment By Lessor. Lessor may assign its rights and delegate its duties under this
Agreement. Lessor covenants to Lessee that Lessor is empowered to execute this Agreement.
Conditioned upon Lessee’s performing the conditions hereof, Lessee shall peaceably and quietly
hold, possess and use the Equipment during the term and any extensions thereof without hindrance.
If Lessor assigns the rents reserved herein or all or any of Lessor’s rights hereunder, such
assignee’s rights shall be independent of any claim of Lessee against Lessor. Lessee on receiving
notice of any such assignment shall abide thereby and make payment as may therein be directed.
Following such assignment, the term “Lessor” shall be deemed to include or refer to Lessor’s
assignee, except such assignee’s rights shall be independent of any claim of Lessee against Lessor
as provided herein.

17. Assignment and Subleasing by Lessee. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION
17, LESSEE SHALL NOT, WITHOUT THE PRIOR CONSENT OF LESSOR, ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS,
INTERESTS OR OBLIGATIONS UNDER THIS AGREEMENT. ANY ATTEMPTED ASSIGNMENT, TRANSFER OR ENCUMBRANCE
BY LESSEE OF ITS RIGHTS, INTERESTS OR OBLIGATIONS UNDER THIS AGREEMENT SHALL BE NULL AND VOID. So
long as no material event of default shall have occurred and be continuing, Lessee may, without the
consent of Lessor, sublease one or more of the Equipment to any third party or use the Equipment in
connection with the provision of contract compression services pursuant to a contract (a “User
Contract”). No such subleasing, or use in connection with provision of services, by Lessee will
reduce or affect any of the obligations of Lessee hereunder or the rights of Lessor under this
Agreement, and all of the obligations of Lessee hereunder shall be and remain primary and shall
continue in full force and effect as the obligations of a principal and not of a guarantor or
surety.

Exhibit 2-6

 

 

18. No Lessor Equipment Warranties. EXCEPT AS OTHERWISE PROVIDED IN THE APPLICABLE SCHEDULE,
LESSOR LEASES THE EQUIPMENT TO LESSEE AS-IS AND EXPRESSLY DISCLAIMS AND MAKES NO WARRANTIES,
EXPRESS OR IMPLIED, AS TO THE CONDITION, DESIGN, QUALITY, CAPACITY, MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OF OR CONCERNING THE EQUIPMENT, OR ANY WARRANTY THAT THE EQUIPMENT IS FREE OF
THE RIGHTFUL CLAIM OF ANY THIRD PERSON BY WAY OF INFRINGEMENT OR THE LIKE, WHETHER PATENT OR
TRADEMARK INFRINGEMENT OR OTHERWISE, OR ANY OTHER MATTER, CONCERNING THE EQUIPMENT.

19. Enforceability. If any part hereof is contrary to, prohibited by or deemed invalid under
applicable laws or regulations of any jurisdiction, such provision shall be inapplicable and deemed
omitted but shall not invalidate the remaining provisions hereof.

20. No Conditional Sale. It is the intention of the parties hereto to hereby create a lease on the
Equipment described herein, and not a conditional sale. To provide solely for the eventuality that
a court might hold this to be a conditional sale, Lessor hereby retains a purchase money security
interest to secure payment of the sales price of the Equipment as determined by such court, and
Lessee grants to Lessor all rights given to a secured party under the Uniform Commercial Code of
the United States or similar law of the governing jurisdiction, if any other law should govern this
Agreement or the Equipment, in addition to Lessor’s other rights hereunder. It is the intention of
the parties that the Equipment shall be deemed personal property and that it not be deemed a
fixture, even though it may be attached in some manner to realty. To provide solely for the
eventuality that a court might also hold the Equipment to be a fixture, the parties state for the
purpose of complying with the legal requirements for a financing statement that collateral is or
includes fixtures and the Equipment is affixed or is to be affixed to the lands described in the
applicable Schedule(s).

21. Alterations. Except as required or permitted by this Agreement, and subject to this Section
21, Lessee shall not modify or alter the Equipment without the prior approval of Lessor.

22. Miscellaneous.

       a. No representation, covenant or condition of this Agreement can be waived or changed except
by the written consent of both parties. Forbearance or indulgence by Lessor in any regard
whatsoever shall not constitute a waiver or change of the representation, covenant or condition to
be performed by Lessee to which the same may apply, and until complete performance by Lessee of
said covenant or condition, Lessor shall be entitled to invoke any remedy available to Lessor under
this Agreement or by law or equity despite said forbearance or indulgence. Waiver of any defaults
shall not waive any other default.

       b. The language governing this Agreement shall be in English, any translation thereof into
other languages shall not have any legal effect.

       c. Service of all notices under this Agreement shall be sufficient if mailed to the party
involved at its respective address on file with the other party. Any such notices mailed to such
address shall be effective when deposited in the mail, duly addressed and with postage prepaid, or
delivered by hand or electronic mail delivery.

       d. “Lessor” and “Lessee” as used in this Agreement shall include the heirs, executors,
administrators, successors, and/or permitted assigns of such parties.

Exhibit 2-7

 

 

       e. If more than one Lessee executes this Agreement, their obligations under this Agreement
shall be joint and several.

       f. Lessee will, if requested by Lessor, join with Lessor in executing one or more financing
statements, as may be desired by Lessor, in form satisfactory to Lessor.

       g. In case of conflict between provisions found in this Agreement and those listed in the
Schedule(s) hereto, the provisions on the Schedule(s) shall prevail.

       h. The law governing this Agreement shall be that of the State of Texas, United States in
force at the date of this Agreement, excepting any conflict of laws provisions that provide for the
application of the laws of another jurisdiction.

       i. Lessor and Lessee agree that venue of any lawsuit arising from or in connection with the
terms of this Agreement shall be in Houston, Harris County, Texas, United States. For purposes of
this Agreement, Lessee irrevocably consents to the jurisdiction of the courts of Houston, Harris
County, Texas, United States.

       j. This Agreement contains the full agreement between the parties. No representation or
promise has been made by either party to the other as an inducement to enter into this Agreement.
Lessor does not in any way or for any purpose become partner of Lessee, or a joint venture, or a
member of a joint enterprise with Lessee.

       k. Lessee hereby waives its right to receive a copy of any financing statement or financing
change statement registered by Lessor in connection with this Agreement.

       l. Lessor and Lessee hereby agree that no rights or remedies referred to in Article 2A of the
Uniform Commercial Code of the United States or similar law of the governing jurisdiction shall be
conferred upon either Lessor or Lessee unless expressly granted in this Agreement. To the extent
any Schedule contains chattel paper under the Uniform Commercial Code of the United States or
similar law of the governing jurisdiction, no security interest in any Schedule may be created
through the transfer and possession of any counterpart thereof other than the counterpart retained
by Lessor.

       m. If Lessee at any time shall fail to pay any sum which Lessee is required by this Agreement
to pay or shall fail to do or perform any other act Lessee is required by this Agreement to do or
perform, Lessor at its option may pay such sum or do or perform such act (or have it performed by a
third party), and Lessee shall reimburse Lessor on demand for the amount of such payment and for
the cost and expenses which may be incurred by Lessor for such acts or performance, together with
interest thereon at the Applicable Rate from the date of demand until paid.

       n. This Agreement is based on the applicable laws existing at the time of its execution. Any
changes, including, but not limited to, changes in governmental enforcement practices, revisions or
new applicable laws, including, but not limited to, those related to taxes, permits, fees and
duties, that have the effect of increasing Lessor’s burden, including, but not limited to, cost,
time-consumption and risk exposure, shall entitle Lessor to fair and equitable Agreement
modifications, which modifications the parties agree to work toward in good faith and in a timely
fashion, failing which Lessor may terminate this Agreement or any Schedule(s) hereunder immediately
upon written notice to Lessee.

       o. This Agreement may be executed in any number of counterparts and by the different parties
to this Agreement on separate counterparts, each of which when executed and delivered shall be an
original but all the counterparts shall together constitute one and the same instrument. Delivery
of an executed counterpart of a signature page of this Agreement by telecopy or e-mail shall be
effective as delivery of a manually executed counterpart of this Agreement.

Exhibit 2-8

 

 

Executed
this day of ____, 20___.

	 	 	 	 	 	 	 
	LESSOR:

	 	 	 	 	 	 
	 
	 

	 	BY:	 	 	 	 
	 

	 	
NAME:
	 	 

	 	 
	 

	 	
TITLE:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	LESSEE: 

	 	 	 	 	 	 
	 
	 

	 	BY:	 	 	 	 
	 

	 	
NAME:
	 	 

	 	 
	 

	 	
TITLE:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Exhibit 2-9

 

 

Annex A

LESSEE’S RESPONSIBILITIES

Lessee -

       In addition to the responsibilities detailed in the Master Agreement, Lessee shall furnish the
following:

Daily maintenance and inspections of all engines, compressors and accessory parts forming the Equipment (both
labor and necessary parts), including without limitation:

	 	o	 	Monthly adjustments on the engine and compressor per Lessor’s guidelines;
	 
	 	o	 	Anti-freeze in accordance with Lessor’s requirements;
	 
	 	o	 	Lubricants and related filters in accordance with Lessor’s requirements; and
	 
	 	o	 	Daily inspections/monitoring.

Competent and prudent Equipment operator for normal operations.

Provide an inlet separator for the Equipment to remove solids (such as sand) and all entrained liquids from the gas
stream; Lessee hereby acknowledging that the scrubber provided by Lessor with the Equipment is only an emergency
scrubber.

Site preparation, including suitable sand or gravel pad or concrete base as required.

Valves and piping to suction and discharge flanges, and fuel gas inlet(s) of compressor(s).

Suction to discharge bypass piping and suction pressure control valve (if required).

All installation expenses.

Suitable, sweet, dry natural gas fuel for engine use with 900 to 1100 BTU/ft3 and no more than 10 ppm H2S.

Air/gas pressure of with sufficient pressure and volume for engine starting.

Provide, connect and maintain a properly functioning waste discharge system downstream of the Equipment, including
an outlet connection from the skid drain and all pipes, connections, the blow casing and tank downstream of the skid
drain; and remove and dispose of all fluids discharged by the discharge tank, the blow casing and any pipes or
connections to the skid plus collection and disposal of such liquids from the Equipment’s skid and any other liquids
incidental to Equipment operations.

Equipment Site with ingress and egress satisfactory to Lessor.

Disconnection of Equipment and Site restoration expenses.

Site fencing, if requested by Lessor.

Any and all necessary equipment, supplies and services not specifically listed as Lessor’s responsibility, above.

The following responsibilities apply when Site is offshore or in inland waterways:

Suitable platform or barge capable of supporting the Equipment.

All transporation (including air and water) and cranes necessary for delivery, installation, maintenance, repair and
removal of the Equipment.

All transportation (including air and water) for Lessor personnel, parts, tools and supplies.

Cost for any standby time in excess of 4 hours that is beyond the direct control of Lessor (including due to
inclement weather that, in the sole but reasonable discretion of Lessor impedes safe travel).

Exhibit 2-10

 

 

SCHEDULE ‘A’ TO EQUIPMENT MASTER RENTAL AGREEMENT

(BARE RENTAL)

	 	 	 	 	 	 	 
	Lessee: 

Attention:

	 	 

	 	 	 	Date:                     
	 

	 	 

	 	 	 	 

In accordance with your request, we are pleased to offer the herein described Equipment for your
application
on the                      lease in                      (detail, to the extent available, section,
township, range, county/parish, state and country) (“Site”).

Unit #:                                        

HP:                                        

							
	Equipment Description:

	 	 

The term of this Schedule A shall commence upon the date the Equipment is accepted in accordance
with the Master Agreement and shall continue indefinitely until terminated by either party, upon
thirty (30) days’ advanced written notice. Neither party may terminate this schedule A within
twelve (12) months of commencement of the term. Notwithstanding the foregoing, this Schedule A
shall terminate if (a) gas conditions change or the use of the Equipment by the Lessee pursuant to
a User Contract ends rendering the Equipment unnecessary; (b) force majeure prevents a party from
performing its obligations hereunder; or (c) a default occurs under this Schedule A or the Master
Agreement. The RENTAL RATE is $                     per month for the duration of the term of this Schedule
A. The Rental Rate shall be payable monthly in arrears within 30 days of the end of each month
(beginning on the date the Equipment is accepted) in which the Equipment is leased.

Any manufacturing check the box designation in any User Contract shall apply in equal force to this
Schedule A.

When executed by Lessor and Lessee, this Schedule A shall apply to the EQUIPMENT MASTER RENTAL
AGREEMENT (or equivalent master agreement) executed by Lessee and Lessor (or their respective
predecessors or affiliates) and dated as shown below (the “Master Agreement”) whether or not
attached hereto, and shall be deemed an individual agreement between the parties hereto for the
Equipment described herein. This Schedule A and the applicable Master Agreement contains the entire
agreement between the parties relating to the matters contained herein and therein, superseding all
prior contracts and agreements, relating to the mattes contained herein and therein. Unless
otherwise defined herein, terms have the meanings set forth in the Master Agreement.

Master Agreement Date:                                        

       ACKNOWLEDGED and ACCEPTED by the undersigned, duly-authorized representatives of the parties
as of the date first shown above.

	 	 	 	 	 	 	 
	LESSOR:

	 	 	 	 	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	
Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	LESSEE:

	 	 	 	 	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	
Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Exhibit 2-11

 

 

Exhibit 3

Form Like-Kind Exchange Bill of Sale 

ASSIGNMENT AND BILL OF SALE

(Like-Kind Exchange)

       For valuable consideration, the receipt of which is hereby acknowledged, the parties hereto,
EES Leasing LLC, a Delaware limited liability company,(“EES Leasing”) on the one hand and EXLP
Leasing LLC, a Delaware limited liability company, (“EXLP Leasing”) on the other hand each hereby
SELLS, GRANTS, ASSIGNS and TRANSFERS to the other, effective as of this ___day of                     , 20___,
good, marketable and indefeasible title to all of the transferor’s right, title and interest in, to
and under its Compression Equipment described on Exhibit A attached hereto and made a part
hereof for all purposes, together with all assets, rights and properties related to such
Compression Equipment of the sort described in Section 4.2(b) of the Omnibus Agreement (as defined
below) (in each respective case, collectively the “Assets”).

       Each of EES Leasing and EXLP Leasing in its respective capacity as a transferor, in its name
and in the name of its successors and assigns, hereby represents that (a) it intends to convey its
Assets and to acquire in exchange the Assets owned by the other party which are of like kind and
qualifying use within the meaning of Section 1031 of the Code and (b) it has the power and
authority to exchange or otherwise transfer the Assets in the manner provided in this Assignment
and Bill of Sale and that the Assets are free and clear of all Liens, except for any Liens created
by its respective transferee and except for Permitted Liens. EXCEPT AS EXPRESSLY PROVIDED IN THE
OMNIBUS AGREEMENT, THE ASSETS ARE BEING EXCHANGED WITHOUT ANY WARRANTIES, WHETHER EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF FITNESS FOR USE OR MERCHANTIBILITY.

       Each of EES Leasing and EXLP Leasing in its respective capacity as transferor does hereby bind
itself, its successors and assigns, to forever warrant and defend the title to the Assets unto its
respective transferee, its successors and assigns against the lawful claim or claims of any person
whomsoever claiming an interest in the Assets.

       Each of EES Leasing and EXLP Leasing in its respective capacity as transferor covenants and
agrees to execute and deliver to its respective transferee all such other additional instruments
and other documents and will do all such other acts and things as may be necessary to fully assign
to its respective transferee, or its successors and assigns, all of the Assets.

       All of the provisions hereof shall inure to the benefit of and be binding upon the respective
heirs, successors and assigns of EES Leasing and EXLP Leasing.

       Terms used herein but not defined herein shall have the meanings assigned to such terms in the
Second Amended And Restated Omnibus Agreement entered into on, and effective as of, [___], 2009, by
and among Exterran Holdings, Inc., Exterran Energy Solutions, L.P., Exterran GP

Exhibit 3-1

 

 

LLC, Exterran General Partner, L.P., Exterran Partners, L.P., and EXLP Operating LLC (as
amended, modified, supplemented or restated from time to time, the “Omnibus Agreement”).

       IN WITNESS WHEREOF, Each of EES Leasing and EXLP Leasing in its respective capacity as
transferor has caused this Assignment and Bill of Sale to be executed on the date first set forth
above.

	 	 	 	 	 	 	 
	 	 	EES LEASING:	 	 
	 
	 	 	 	 	 	 
	 	 	EES Leasing LLC, a Delaware limited liability 
company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	EXLP LEASING:	 	 
	 
	 	 	 	 	 	 
	 	 	EXLP Leasing LLC, a Delaware limited liability

company	 	 
	 
	 	 	 	 	 	 
	 

	 	By: EXLP Operating LLC, its sole member	 	 
	 
	 	 	 	 	 	 
	 

	 	By: Exterran Partners, L.P., its sole member
	 	 
	 
	 	 	 	 	 	 
	 	 	By: Exterran General Partner, L.P., its general
partner	 	 
	 
	 	 	 	 	 	 
	 	 	By: Exterran GP LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

Exhibit 3-2

 

 

Exhibit A

Compression Equipment Transferred

(Like-Kind Exchange)

Exhibit 3-3

 

 

Schedule A

Exterran Customers

 

 

Schedule B

Exterran Overlapping Customers

 

 

Schedule C

Partnership Customers

 

 

Schedule D

Partnership Overlapping Customers

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