Document:

exv4w11

Exhibit 4.11

[Executed]

AMENDED AND RESTATED INTERCREDITOR

AND SUBORDINATION AGREEMENT

     This Amended and Restated Intercreditor and Subordination Agreement (this
“Agreement”), dated as of                     , 2008, is among JPMORGAN CHASE BANK, N.A., a
national banking association, as administrative agent (in such capacity, with its successors and
assigns, the “Senior Agent”) for the Senior First Priority Secured Parties, THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., a national banking association, as collateral agent and
subordinated holder representative for the Subordinated Holders (the “Subordinated Holder
Representative”), TETON ENERGY CORPORATION, a Delaware corporation (“Borrower”), and
each of the other Loan Parties party hereto.

     WHEREAS, Borrower, the Senior Agent, and the Senior Lenders have entered into that certain
Second Amended and Restated Credit Agreement dated as of April 2, 2008 (as amended, supplemented,
restated or otherwise modified, including any refinancing thereof, from time to time, the
“Senior Credit Agreement”), pursuant to which the Senior Lenders have agreed to extend
credit to Borrower; and

     WHEREAS, Borrower and the Subordinated Holders party thereto entered into that certain
Securities Purchase Agreement dated as of June 9, 2008 (as the same may be amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms hereof, the
“Subordinated Debenture Purchase Agreement”), pursuant to which Borrower issued, and the
Subordinated Holders purchased, the June 2008 Subordinated Debentures; and

     WHEREAS, Borrower, each of the Loan Parties, and Whitebox Teton, Ltd, as collateral agent for
the Subordinated Holders (the “Original Subordinated Holder Representative”), entered into
that certain Intercreditor and Subordination Agreement dated as of June 9, 2008 (the “Original
Intercreditor and Subordination Agreement”), pursuant to which the Subordinated Holders and the
Original Subordinated Holder Representative agreed to subordinate the June 2008 Subordinated
Debentures on the terms and conditions set forth therein; and

     WHEREAS, the June 2008 Subordinated Debentures are being exchanged for the Exchanged
Debentures being issued pursuant to the Indenture, which Exchanged Debentures are being issued on
substantially the same terms as were the June 2008 Subordinated Debentures; and

     WHEREAS, the trustee under the Indenture, The Bank of New York Mellon Trust Company, N.A., is
being appointed as the Subordinated Holder Representative pursuant to an amendment to the
Subordinated Debenture Purchase Agreement of even date herewith; and

     WHEREAS, the parties desire to amend and restate the Original Intercreditor and Subordination
Agreement in its entirety with this Agreement; and

     WHEREAS, the execution and delivery of this Agreement is a condition to any extension (and/or
continued extension) of credit by the Senior Lenders under the Senior Credit Agreement.

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     NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and
other good and valuable consideration, the existence and sufficiency of which are expressly
recognized by all of the parties hereto, and to induce the Senior Lenders to continue to extend
credit under the Senior Credit Agreement, the parties agree as follows:

     SECTION 1 Definitions.

     The following terms, as used herein, have the following meanings:

     “Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as
amended from time to time.

     “Business Day” means any day except a Saturday, Sunday or other day on which national
banks in New York City, Chicago, Illinois or Dallas, Texas are authorized or required by law to
close.

     “Commitments” means all commitments to lend, issue letters of credit or otherwise make
financial accommodations set forth in the Senior Credit Agreement (including, without limitation,
all “Commitments” as defined in the Senior Credit Agreement).

     “Common Collateral” means all assets that are both Senior Loan Collateral and
Subordinated Debenture Collateral.

     “DIP Financing” means any financing (including, without limitation, financings in the
form of loans or advances and financings providing for the issuance of letters of credit) provided
to any Loan Party (as debtor, debtor-in-possession or otherwise) under the Bankruptcy Code by one
or more of the Senior First Priority Secured Parties for which the use of the proceeds thereof is
restricted to providing for general corporate and working capital expenditures of Borrower and its
subsidiaries for costs and expenses that (a) are incurred in the ordinary course of business to
directly or indirectly support the continuing operations of Borrower and its subsidiaries
(including, without limitation, general and administrative expenses, employee compensation and
costs associated with benefits, payment of contractual obligations (to the extent payment is
permitted pursuant to the Insolvency Proceeding), and adequate assurance payments and expenses
incurred in connection with the Insolvency Proceeding), (b) are reasonably necessary to preserve
and maintain the value of the Common Collateral (including, without limitation, maintenance capital
expenditures, expenditures associated with reworking, plugging-back or similar operations designed
to maximize production from a well or field, and expenditures associated with drilling of low-risk
in-field prospects), (c) are attributable to the ownership and operation of Borrower’s and its
subsidiaries’ oil and gas properties (including, without limitation, payment of royalty payments,
taxes and other amounts due as a result of the hydrocarbons produced from such properties and
obligations under any joint operating or similar agreement that could reasonably be expected to
enhance the value of the properties subject thereto or could result in penalty or forfeiture if not
made), and (d) Borrower and the Senior Agent reasonably believe will enhance the value of
Borrower’s estate.

     “Enforcement Action” means, with respect to the Senior Indebtedness or the
Subordinated Indebtedness, any demand for payment or acceleration thereof, the bringing of any
lawsuit or other proceeding, the exercise of any rights and remedies, directly or indirectly, with

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respect to any Common Collateral, any enforcement or foreclosure of any Lien, any sale in lieu
of foreclosure, the taking of possession, exercise of any offset, repossession, garnishment,
sequestration or execution, any collection of any Common Collateral, any notice to account debtors
on any Common Collateral or the commencement or prosecution of enforcement of any of the rights and
remedies under, as applicable, the Senior Loan Documents or the Subordinated Debenture Documents,
or applicable law, including, without limitation, the exercise of any rights of set-off or
recoupment, and the exercise of any rights or remedies of a secured creditor under the uniform
commercial code of any applicable jurisdiction, under the Bankruptcy Code or otherwise;
provided that any Permitted Action shall not constitute an Enforcement Action.

     “Exchanged Debentures” means the 10.75% Secured Subordinated Convertible Debentures
due 2013 issued pursuant to the Indenture by the Borrower and guaranteed by the other Loan Parties
which are issued in exchange for the June 2008 Subordinated Debentures (as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms hereof).

     “First Priority Liens” means all Liens created by any Senior Security Document and all
other Liens securing the Senior Indebtedness.

     “Indenture” means that certain Secured Subordinated Convertible Debenture Indenture of
even date herewith among Borrower, the other Loan Parties and the Subordinated Noteholder
Representative, as indenture trustee (as amended, supplemented, restated or otherwise modified from
time to time in accordance with the terms hereof).

     “Insolvency Proceeding” means any proceeding in respect of bankruptcy, insolvency,
winding up, receivership, dissolution or assignment for the benefit of creditors, in each of the
foregoing events whether under the Bankruptcy Code or any similar federal, state or foreign
bankruptcy, insolvency, reorganization, receivership or similar law.

     “June 2008 Subordinated Debentures” means the “Debentures” as defined in the
Subordinated Debenture Purchase Agreement.

     “Letters of Credit” means all “Letters of Credit” as defined in the Senior Credit
Agreement.

     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, deed to
secure debt, lien, pledge, hypothecation, assignment, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party with respect to such securities.

     “Loan Parties” means, collectively, Borrower and its Subsidiaries under and as defined
in the Senior Credit Agreement, and “Loan Party” means any one of the foregoing.

     “Permitted Action” means (a) the acceleration of all or a portion of the Subordinated
Indebtedness after the acceleration of the Senior Indebtedness, and (b) the exercise by the
Subordinated Holder Representative, on behalf of the Subordinated Holders, of its rights and

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remedies in respect of the Common Collateral under the Subordinated Security Documents or
applicable law after the passage of a period of 180 days (the “Standstill Period”) from the
date of delivery of a notice in writing to the Senior Agent of its intention to exercise such
rights and remedies, which notice may only be delivered following the occurrence of and during the
continuation of a Subordinated Debenture Default; provided, that, notwithstanding
the foregoing, in no event shall the Subordinated Holder Representative nor any Subordinated Holder
exercise or continue to exercise any such rights or remedies if, notwithstanding the expiration of
the Standstill Period, (i) the Senior Agent or any other Senior First Priority Secured Party shall
have commenced and be diligently pursuing the exercise of any of its rights and remedies with
respect to any of the Common Collateral (prompt notice of such exercise to be given to the
Subordinated Holder Representative) or (ii) an Insolvency Proceeding in respect of any Loan Party
shall have been commenced; and provided, further, that in any Insolvency Proceeding
commenced by or against any Loan Party, the Subordinated Holder Representative and the Subordinated
Holders may take any action expressly permitted by Section 6 to be taken by them.

     “Permitted Payments” means (a) any payment made as Permitted Reorganization
Securities, (b) reasonable and customary fees and expenses of professionals and advisors to the
Subordinated Holders and the Subordinated Holder Representative, and (c) reasonable and customary
annual agency fees and out-of-pocket expenses of the Subordinated Holder Representative acting in
its capacity as indenture trustee and collateral agent under the Subordinated Debenture Documents.

     “Permitted Reorganization Securities” means securities, whether debt or equity,
received in an Insolvency Proceeding or a consensual reorganization or restructuring that are
subordinated, junior and inferior to the Senior Indebtedness in all respects to at least the same
extent as the Subordinated Indebtedness as provided herein.

     “Person” means any person, individual, sole proprietorship, partnership, joint
venture, corporation, limited liability company, unincorporated organization, association,
institution, entity or other party, including, without limitation, any government and any political
subdivision, agency or instrumentality thereof.

     “Post-Petition Interest” means any interest or entitlement to fees or expenses that
accrues after the commencement of any Insolvency Proceeding, whether or not allowed or allowable in
any such Insolvency Proceeding.

     “Second Priority Liens” means all Liens created by any Subordinated Security Document
and all other Liens securing the Subordinated Indebtedness.

     “Secured Parties” means the Senior First Priority Secured Parties and the Subordinated
Holders.

     “Senior First Priority Secured Parties” means the Senior Agent, the Senior Lenders and
any other owner or holder of any Senior Indebtedness.

     “Senior Indebtedness” means (a) all principal of and interest (including, without
limitation, any Post-Petition Interest) and premium (if any) on all loans made pursuant to the
Senior Credit Agreement and the other Senior Loan Documents, (b) all reimbursement

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obligations (if any) and interest thereon (including without limitation any Post-Petition
Interest) with respect to any Letter of Credit or similar instruments issued pursuant to the Senior
Credit Agreement and the other Senior Loan Documents, (c) all obligations of any Loan Party owed to
any Senior Lender or any affiliate of any Senior Lender under any Swap Agreement, (d) all fees,
expenses, costs and other amounts payable from time to time pursuant to the Senior Loan Documents,
in each case whether secured or unsecured or whether allowed or allowable in an Insolvency
Proceeding and (e) all other Indebtedness (as defined in the Senior Credit Agreement). To the
extent any payment with respect to any Senior Indebtedness (whether by or on behalf of any Loan
Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be
a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a
debtor in possession, any Subordinated Holder, receiver or similar Person, then the obligation or
part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the
rights and obligations of the Senior First Priority Secured Parties and the Subordinated Holders,
be deemed to be reinstated and outstanding as if such payment had not occurred.

     “Senior Indebtedness Payment Date” means the first date on which (a) the Senior
Indebtedness has been indefeasibly paid in cash in full, (b) all commitments (including, without
limitation, the Commitments) to extend credit under the Senior Loan Documents have been terminated,
(c) there are no outstanding Letters of Credit or similar instruments issued under the Senior Loan
Documents and (d) all Swap Agreements entered into between any Senior Lender or an affiliate
thereof and any Loan Party have been terminated.

     “Senior Lenders” means the Senior Agent and the financial institutions party to the
Senior Credit Agreement as Lenders (as therein defined).

     “Senior Loan Collateral” means all assets, whether now owned or hereafter acquired by
Borrower or any other Loan Party, in which a Lien is granted or purported to be granted to any
Senior First Priority Secured Party as security for any Senior Indebtedness.

     “Senior Loan Documents” means the Senior Credit Agreement and each Senior Security
Document, as the same may be amended, modified or supplemented from time to time in accordance with
the terms hereof.

     “Senior Loans” means the loans and other extensions of credit made by the Senior
Lenders to Borrower pursuant to the Senior Credit Agreement.

     “Senior Security Documents” means each “Guaranty Agreement,” as defined in the Senior
Credit Agreement, the mortgages, deeds of trust, amended and restated mortgages, amended and
restated deeds of trust and other documents or agreements executed or authorized by Borrower or any
other Loan Party granting or perfecting (or intending to grant or perfect) any Lien in any asset of
Borrower or any other Loan Party in favor of any Senior First Priority Secured Party.

     “Standstill Period” has the meaning set forth in the definition of “Permitted Action.”

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     “Subordinated Debenture Collateral” means all assets, whether now owned or hereafter
acquired by Borrower or any other Loan Party, in which a Lien is granted or purported to be granted
to any Subordinated Holder as security for any Subordinated Indebtedness.

     “Subordinated Debenture Default” means an “Event of Default” as defined in any of the
Subordinated Debenture Documents.

     “Subordinated Debenture Documents” means the Subordinated Debenture Purchase
Agreement, the Subordinated Debentures, the Indenture, each other “Transaction Document” as defined
in the Subordinated Debenture Purchase Agreement and each other “Transaction Document” as defined
in the Indenture, including, without limitation, each Subordinated Security Document, as the same
may be amended, modified or supplemented in accordance with the terms hereof.

     “Subordinated Debentures” means the June 2008 Subordinated Debentures and the
Exchanged Debentures.

     “Subordinated Holder” means (a) any “Purchaser” as defined in the Subordinated
Debenture Purchase Agreement, (b) the Original Subordinated Holder Representative, (c) any “Holder”
as defined in the Indenture, (d) the Subordinated Holder Representative and (e) any other owner or
holder of any Subordinated Indebtedness, and their respective successors and assigns.

     “Subordinated Holder Optional Redemption” means the “Holder Optional Redemption” as
defined in the June 2008 Subordinated Debentures as in effect on June 9, 2008 or the Optional
Redemption at the Election of Holder as set forth in Section 3.02 of the Indenture as in effect on
the date hereof.

     “Subordinated Holder Optional Redemption Date” means the “Holder Optional Redemption
Date” as defined in the June 2008 Subordinated Debentures as in effect on June 9, 2008 or the
“Holder Optional Redemption Date” as defined in the Indenture as in effect on the date hereof.

     “Subordinated Indebtedness” means all of the following, whether secured or unsecured:
(a) all principal of and interest (including, without limitation, any Post-Petition Interest) and
premium (if any) on all indebtedness and other obligations under the Subordinated Debenture
Purchase Agreement and the other Subordinated Debenture Documents including, without limitation,
the Subordinated Debentures and the Indenture, (b) all fees, expenses, costs and other amounts
payable from time to time pursuant to the Subordinated Debenture Documents and any trust indenture
entered into in connection therewith (other than costs and expenses incurred in connection with the
negotiation, preparation, execution and delivery of the Subordinated Debenture Documents in an
amount not to exceed $100,000 plus any applicable filing or recording fees), (c) all guaranties of
any of the foregoing, in each case whether or not allowed or allowable in an Insolvency Proceeding,
(d) all deficiency claims of any Subordinated Holder in respect of the foregoing, (e) the other
obligations of Borrower under the Subordinated Debenture Purchase Agreement and the Registration
Rights Agreement (as defined in the Subordinated Debenture Purchase Agreement), (f) other
obligations of Borrower under the

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Indenture and (g) all renewals, extensions, amendments and changes of, or substitutions or
replacements for, all or any part of the previously described subordinated indebtedness. To the
extent any payment with respect to any Subordinated Indebtedness (whether by or on behalf of any
Loan Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared
to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a
debtor in possession, any Senior First Priority Secured Party, receiver or similar Person, then the
obligation or part thereof originally intended to be satisfied shall, for the purposes of this
Agreement and the rights and obligations of the Senior First Priority Secured Parties and the
Subordinated Holders, be deemed to be reinstated and outstanding as if such payment had not
occurred.

     “Subordinated Security Documents” means the “Security Documents” as defined in the
Subordinated Debenture Purchase Agreement and the “Security Documents” as defined in the Indenture.

     “Swap Agreements” means all “Swap Agreements” as defined in the Senior Credit
Agreement.

     “Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as in
effect from time to time in the State of Texas.

     SECTION 2 Subordination.

     2.1 Agreement to Subordinate. Each Loan Party agrees, and each Subordinated Holder
and the Subordinated Holder Representative by entering into the Subordinated Debenture Purchase
Agreement and/or the Indenture and purchasing the Subordinated Debentures thereunder (or otherwise
holding or owning any Subordinated Indebtedness) agrees, that the Subordinated Indebtedness is
subordinated in right of payment, to the extent and in the manner provided in this Agreement, to
the prior indefeasible payment in full in cash of all Senior Indebtedness, and that such
subordination is for the benefit of and enforceable by the Senior Agent on behalf of the Senior
First Priority Secured Parties.

     2.2 Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of the
assets of any Loan Party to creditors upon a restructuring, reorganization, total or partial
liquidation or a total or partial dissolution of any Loan Party or in an Insolvency Proceeding
relating to any Loan Party or its respective properties or during the pendency of any Insolvency
Proceeding: (a) holders of the Senior Indebtedness shall be entitled to receive indefeasible
payment in full in cash of all Senior Indebtedness before the Subordinated Holders shall be
entitled to receive any payment on or with respect to the Subordinated Indebtedness; and (b) until
the Senior Indebtedness Payment Date, any distribution to which the Subordinated Holders would be
entitled but for this Section 2 shall be made to Senior First Priority Secured Parties (or
the Senior Agent on their behalf) as their interests may appear, except that Subordinated Holders
may receive Permitted Payments. If no proof of claim is filed in any Insolvency Proceeding with
respect to any Subordinated Indebtedness by the tenth day prior to the bar date for any such proof
of claim, the Senior Agent may, after notice to the Subordinated Holder Representative, file such a
proof of claim on behalf of the Subordinated Holders, and each Subordinated Holder (by entering
into the Subordinated Debenture Purchase Agreement and/or the Indenture and

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purchasing the Subordinated Debentures thereunder (or otherwise holding or owning any
Subordinated Indebtedness)) hereby irrevocably appoints the Senior Agent as its agent and
attorney-in-fact (which power of attorney is coupled with an interest and irrevocable) for such
limited purpose; provided, that the foregoing shall not confer to the holder of any
Senior Indebtedness the right to vote on behalf of the Subordinated Holders in any Insolvency
Proceedings.

     2.3 No Prepayments of Principal on Subordinated Indebtedness. No principal payments
are due upon the Subordinated Indebtedness and no payments in respect of any purchase, repurchase,
redemption or defeasance of the Subordinated Indebtedness, other than in respect of the
Subordinated Holder Optional Redemption, shall be due on the Subordinated Indebtedness prior to the
earliest of (a) the acceleration of the Subordinated Indebtedness upon the occurrence of a
Subordinated Debenture Default, (b) June 9, 2013, or (c) a “Change of Control Transaction” as
defined in the June 2008 Subordinated Debentures or in the Indenture. Notwithstanding anything to
the contrary contained in this Agreement, any Subordinated Holder shall have the right to exercise,
and Borrower shall have the obligation to honor, any properly noticed Subordinated Holder Optional
Redemption exercised in accordance with the terms of the Subordinated Debenture Purchase Agreement
or the Indenture notwithstanding that an “Event of Default” under and as defined in the Senior
Credit Agreement exists or would otherwise result from the exercise of such redemption and any
payment made by Borrower in connection therewith. Senior Agent, on behalf of itself and the Senior
Lenders, hereby consents to Borrower making payments in respect of the Subordinated Holder Optional
Redemption on or prior to the Subordinated Holder Optional Redemption Date, notwithstanding any
restrictions or prohibitions with respect to such payments contained in the Senior Credit
Agreement. In addition to the other restrictions hereunder, so long as any Senior Indebtedness is
outstanding, without the prior written consent of Senior Agent, neither Borrower nor any other
Person shall make any prepayment of principal of the Subordinated Indebtedness or prepayment in
respect of the purchase, repurchase, redemption or defeasance of principal on the Subordinated
Indebtedness prior to the time that such principal payment is due, and no Subordinated Holder shall
receive any prepayment of principal of the Subordinated Indebtedness or prepayment in respect of
the purchase, repurchase, redemption or defeasance of the Subordinated Indebtedness prior to the
time that such payment is due. At or after the time that any such payment, repurchase, redemption
or defeasance of principal becomes due to any Subordinated Holder, such Subordinated Holder may
collect such payment; provided that, except for payments in respect of the
Subordinated Holder Optional Redemption made in accordance with the terms of the Subordinated
Debenture Purchase Agreement or the Indenture, if any Senior Indebtedness is then outstanding, such
Subordinated Holder must receive and hold such payment for, and within three (3) Business Days
thereafter, pay over and deliver such payment to, Senior Agent to be applied as a payment or
prepayment of the Senior Indebtedness. In addition to the foregoing restrictions concerning
principal, except for payments in respect of the Subordinated Holder Optional Redemption made in
accordance with the terms of the Subordinated Debenture Purchase Agreement or the Indenture, so
long as any Senior Indebtedness is outstanding, without the prior written consent of Senior Agent,
neither Borrower nor any other Person shall make any voluntary prepayment or payment in respect of
any purchase, repurchase, redemption or defeasance of any item of Subordinated Indebtedness other
than principal prior to the time that such item is due, and no Subordinated Holder shall receive
any such voluntary prepayment or payment in respect of any purchase, repurchase, redemption or
defeasance; provided, that, and

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notwithstanding the foregoing restrictions, nothing contained herein shall preclude (i) any
Subordinated Holder from converting its Subordinated Debentures or any part thereof into common
stock of Borrower in accordance with the terms of the Subordinated Debenture Documents, or (ii) at
any time that neither a Default, Event of Default or Borrowing Base Deficiency (as each such term
is defined in the Senior Credit Agreement) exists or would result therefrom, Borrower from making
regularly scheduled payments of interest on the Subordinated Debentures when due and in accordance
with the terms of such Subordinated Debentures, including, without limitation, payments of accrued
interest in connection with a conversion by a Subordinated Holder of its Subordinated Debentures
into common stock of Borrower in accordance with the terms of the Subordinated Debenture Documents.

     2.4 Default on Senior Indebtedness. Except (a) as otherwise expressly provided in
Section 2.3 in respect of the Subordinated Holder Optional Redemption, or (b) in connection
with a conversion by a Subordinated Holder of its Subordinated Debentures into common stock of
Borrower in accordance with the terms of the Subordinated Debenture Documents, no Loan Party may,
and no Subordinated Holder may ask or require a Loan Party to, pay the principal of or interest on
or other amounts with respect to the Subordinated Indebtedness, make any deposit pursuant to any
Subordinated Debenture Document or prepay, purchase, redeem or otherwise acquire or retire any
Subordinated Indebtedness (each such event referred to herein as “pay the Subordinated
Indebtedness”) if (i) any default in payment of any Senior Indebtedness shall have occurred
(whether such payment was due at maturity, on account of acceleration or otherwise, and whether for
principal, interest or other amounts), or (ii) any Borrowing Base Deficiency (as defined in the
Senior Credit Agreement) then exists unless, in each case, (A) the default or Borrowing Base
Deficiency has been cured or waived and any such acceleration has been rescinded or (B) the Senior
Indebtedness Payment Date has occurred. During the continuance of any Event of Default (as defined
in the Senior Credit Agreement), no Loan Party may, and no Subordinated Holder may ask or require a
Loan Party to, pay the Subordinated Indebtedness (other than payments in respect of the
Subordinated Holder Optional Redemption or otherwise constituting Permitted Payments).

     2.5 Acceleration. If payment of any Subordinated Indebtedness is accelerated, any
payment thereon prior to the Senior Indebtedness Payment Date shall be paid directly to the Senior
Agent for the benefit of the Senior First Priority Secured Parties for application to the payment
of the Senior Indebtedness until the date on which (a) the Senior Indebtedness has been
indefeasibly paid in full in cash, (b) there are no outstanding Letters of Credit or similar
instruments issued under the Senior Loan Documents for which cash collateral equal to 105% of the
face amount thereof has not been deposited with the Senior Agent to secure drawings thereunder and
(c) all Swap Agreements entered into between any Senior Lender or an affiliate thereof and any Loan
Party have been terminated, and thereafter to the Subordinated Holder Representative, on behalf of
the Subordinated Holders for application to the Subordinated Indebtedness.

     2.6 When Distributions Must Be Paid Over. In the event that the Subordinated Holder
Representative or any Subordinated Holder receives any payment of any Subordinated Indebtedness at
a time when such payment is prohibited by this Agreement or is to be paid to the Senior Agent or
any Senior First Priority Secured Party, such payment shall be held by the Subordinated Holder
Representative or such Subordinated Holder, in trust for the benefit of, and

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shall be paid forthwith over and delivered (together with any necessary endorsements) to, the
Senior First Priority Secured Parties (or the Senior Agent), as their respective interests may
appear, for application to the payment of the Senior Indebtedness. If any Subordinated Holder or
the Subordinated Holder Representative shall fail to make any such endorsement, then each such
Person hereby irrevocably authorizes and grants a power of attorney (which is irrevocable and
coupled with an interest) to the Senior Agent to make such endorsement.

     2.7 Subrogation. After the Senior Indebtedness Payment Date and until the
Subordinated Indebtedness is paid in full, the Subordinated Holders shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness
to the extent that distributions otherwise payable to the Subordinated Holders have been applied to
payment of Senior Indebtedness. A distribution made under this Agreement to the Senior First
Priority Secured Parties that otherwise would have been made to Subordinated Holders is not, as
between Borrower and Subordinated Holders, a payment by Borrower on the Subordinated Indebtedness.

     2.8 Agreement Not to Pursue Actions; Relative Rights. Until the Senior Indebtedness
Payment Date shall have occurred, neither the Subordinated Holder Representative nor any
Subordinated Holder will commence any Enforcement Action against any Loan Party to recover all or
any part of the Subordinated Indebtedness or join with any other creditor unless the Senior First
Priority Secured Parties shall also join in bringing any proceedings against such Loan Party in an
Insolvency Proceeding or such action is permitted by Section 6.1. This Agreement defines
the relative rights of Subordinated Holders and the Senior First Priority Secured Parties. Nothing
in this Agreement shall impair, as between Borrower or any Loan Party and the Subordinated Holders,
the obligations of Borrower and the Loan Parties to pay principal of and interest on the
Subordinated Indebtedness in accordance with their terms.

     2.9 Distribution or Notice to Representative. Whenever a distribution is to be made
or a notice given to the Senior First Priority Secured Parties or the Subordinated Holders, the
distribution may be made and the notice given to the Senior Agent and the Subordinated Holder
Representative, respectively.

     2.10 Subordination Not To Prevent Subordinated Debenture Default. The failure to make
a payment on the Subordinated Indebtedness by reason of any provision in this Agreement shall not
be construed as preventing the occurrence of a Subordinated Debenture Default.

     2.11 Subordinated Holder Representative Entitled to Rely. Upon any payment or
distribution pursuant to this Section 2, the Subordinated Holder Representative and the
Subordinated Holders shall be entitled to rely upon (a) any order or decree of a court of competent
jurisdiction in which any Insolvency Proceedings are pending that is consistent with this
Agreement, or (b) the Senior Agent, in any such case, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the Senior Indebtedness,
the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Agreement. In the event that the Subordinated Holder
Representative determines, in good faith, that evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Agreement, the Subordinated Holder Representative may

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request such Person to furnish evidence to the reasonable satisfaction of the Subordinated
Holder Representative as to the amount of Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Agreement, and, if such evidence is not
furnished, the Subordinated Holder Representative may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.

     2.12 Subordinated Holder Representative To Effectuate Subordination. Each
Subordinated Holder by entering into the Subordinated Debenture Purchase Agreement and/or the
Indenture and purchasing the Subordinated Debentures thereunder (or otherwise holding or owning any
Subordinated Indebtedness) authorizes and directs the Subordinated Holder Representative on its
behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Subordinated Holders and the Senior First Priority Secured Parties as
provided in this Agreement and appoints the Subordinated Holder Representative as attorney-in-fact
for any and all such purposes, including the filing of a claim in any Insolvency Proceeding.

     2.13 Nature of Senior Indebtedness. The Subordinated Holder Representative on behalf
of itself and the other Subordinated Holders acknowledges that, subject to Section 7.2, (a)
all or a portion of the Senior Indebtedness is revolving in nature and that the amount thereof that
may be outstanding at any time or from time to time may be increased or reduced and subsequently
reborrowed, (b) the terms of the Senior Indebtedness may be modified, extended or amended from time
to time, and (c) the aggregate amount of the Senior Indebtedness may be increased, replaced or
refinanced, in each event, without prior notice to or consent by the Subordinated Holders and
without affecting the provisions hereof. Subject to the limits set forth in Section 7.2,
the terms of subordination contained in this Agreement and Lien priorities provided in Section
3.1 shall not be altered or otherwise affected by any such amendment, modification, supplement,
extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of
either the Senior Indebtedness or the Subordinated Indebtedness, or any portion thereof.

     SECTION 3 Lien Priorities.

     3.1 Subordination of Liens. Any and all Liens now existing or hereafter created or
arising in favor of the Subordinated Holder Representative or any Subordinated Holder securing any
of the Subordinated Indebtedness, regardless of how acquired, whether by grant, statute, operation
of law, subrogation or otherwise are expressly junior in priority, operation and effect to any and
all Liens now existing or hereafter created or arising in favor of the Senior First Priority
Secured Parties securing any of the Senior Indebtedness, notwithstanding (a) anything to the
contrary contained in any agreement or filing to which any Senior First Priority Secured Party or
Subordinated Holder or their respective representatives may now or hereafter be a party, and
regardless of the time, order or method of grant, attachment, recording or perfection of any
financing statements or other security interests, assignments, pledges, deeds, mortgages and other
Liens, charges or encumbrances or any defect or deficiency or alleged defect or deficiency in any
of the foregoing, (b) any provision of the UCC or any applicable law or any Senior Loan Document or
Subordinated Debenture Document or any other circumstance whatsoever and (c) the fact that any such
Liens in favor of any Senior First Priority Secured Party securing any of

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the Senior Indebtedness are (i) subordinated to any Lien securing any obligation of any Loan
Party other than the Subordinated Indebtedness or (ii) otherwise subordinated, voided, avoided,
invalidated or lapsed.

     3.2 Priority and Perfection Not To Be Challenged. Neither the Subordinated Holder
Representative nor any Subordinated Holder shall object to or contest, or support any other Person
in contesting or objecting to, in any proceeding (including, without limitation, any Insolvency
Proceeding), the validity, extent, perfection, priority or enforceability of any Lien in the Common
Collateral granted in favor of any Senior First Priority Secured Party. Notwithstanding any
failure by any Senior First Priority Secured Party or Subordinated Holder or their respective
representatives to perfect its Liens in the Common Collateral or any avoidance, invalidation or
subordination by any third party or court of competent jurisdiction of the Liens in the Common
Collateral granted in favor of the Senior First Priority Secured Parties or the Subordinated
Holders, the priority and rights as between the Senior First Priority Secured Parties and/or the
Subordinated Holders and their representatives with respect to the Common Collateral shall be as
set forth herein. Neither the Senior Agent nor any Senior First Priority Secured Party shall
object to or contest, or support any other Person in contesting or objecting to, in any proceeding
(including, without limitation, any Insolvency Proceeding), the validity, extent, perfection,
priority or enforceability of any Lien in the Common Collateral granted in favor of any
Subordinated Holder.

     3.3 Agreements Regarding Actions to Perfect Liens.

     (a) The Subordinated Holder Representative and the other Subordinated Holders agree (by their
execution of the Subordinated Debenture Purchase Agreement and/or the Indenture and by their
purchase of the Subordinated Debentures thereunder (or otherwise holding or owning any Subordinated
Indebtedness)) that all mortgages, deeds of trust, deeds or other security instruments or
letter-in-lieu or other similar notices (collectively, “Mortgages”) now or hereafter filed
against real property or other assets of a Loan Party in favor of or for the benefit of the
Subordinated Holder Representative or any Subordinated Holder, or delivered to any third party
shall be in form and content satisfactory to the Senior Agent and shall contain the following
notation (or similar language tailored to the nature of the instrument) in bold type:

     “The lien created by this mortgage/deed of trust or referred to herein
on the property described herein is junior and subordinate to the lien on
such property created by any mortgage, deed of trust or similar instrument
now or hereafter granted by Mortgagor to JPMorgan Chase Bank, N.A., as
administrative agent, and its successors and assigns in such capacity, in
such property, in accordance with the provisions of the Amended and Restated
Intercreditor and Subordination Agreement dated as of                     , 2008
among JPMorgan Chase Bank, N.A., as Senior Agent, The Bank of New York
Mellon Trust Company, N.A., as Subordinated Holder Representative and
collateral agent, Mortgagor [or Teton Energy Corporation, as applicable] and
certain affiliates of Mortgagor [or Teton Energy Corporation, as
applicable], as amended from time to time.”

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     (b) The Senior Agent hereby acknowledges that, to the extent that it holds, or a third party
holds on its behalf, physical possession of or “control” (as defined in the Uniform Commercial
Code) over Common Collateral pursuant to the Senior Security Documents, such possession or control
is also for the benefit of the Subordinated Holder Representative and the other Subordinated
Holders solely to the extent required to perfect their Lien in such Common Collateral. Nothing in
the preceding sentence shall be construed to impose any duty on the Senior Agent (or any third
party acting on its behalf) with respect to such Common Collateral or to provide the Subordinated
Holder Representative or any other Subordinated Holder with any rights with respect to such Common
Collateral beyond those specified in this Agreement; provided that subsequent to the
occurrence of the Senior Indebtedness Payment Date, the Senior Agent shall (i) deliver to the
Subordinated Holder Representative, at no cost or expense to the Senior Agent, the Common
Collateral in its possession or control together with any necessary endorsements, without recourse,
representation or warranty, to the extent required by the Subordinated Debenture Documents or (ii)
deliver such Common Collateral as a court of competent jurisdiction otherwise directs;
provided further that the provisions of this Agreement are intended solely to
govern the respective Lien priorities as between the Senior First Priority Secured Parties and the
Subordinated Holders and shall not impose on the Senior First Priority Secured Parties or their
representatives any obligations in respect of the disposition of any Common Collateral (or any
proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of
any other Person that is not a Secured Party.

     3.4 New Liens. So long as the Senior Indebtedness Payment Date has not occurred, the
parties hereto agree that if the Subordinated Holders or the Subordinated Holder Representative on
their behalf shall acquire or hold any Lien on any assets of any Loan Party securing any
Subordinated Indebtedness, which assets are not also subject to the First Priority Lien of the
Senior Agent under the Senior Loan Documents, then such Subordinated Holder or the Subordinated
Holder Representative will immediately without the need for any further consent of any other
Subordinated Holder, notwithstanding anything to the contrary in any other Subordinated Debenture
Document, promptly (a) notify the Senior Agent of such fact, specifying the property that does not
then constitute Senior Loan Collateral and (b) if requested in writing by the Senior Agent, execute
and deliver additional subordination documentation consistent with Section 10.2(c). If the
filing of an Insolvency Proceeding prevents the Senior Agent from obtaining a Lien (or avoids any
such Lien), then the Subordinated Holders will exercise their rights in respect of such Lien at the
direction of the Senior Agent in a manner consistent with this Agreement for the benefit of the
Senior Indebtedness. If the Senior Agent or any Senior First Priority Secured Party shall acquire
or hold any Lien on any assets of any Loan Party securing any Senior Indebtedness, then no
provision of this Agreement shall prohibit, nor shall the Senior Agent or any Senior First Priority
Secured Party take any actions to prevent, the Subordinated Holder Representative or any
Subordinated Holder from obtaining and perfecting a Second Priority Lien on such assets. The
Subordinated Holders, by their purchase of any Subordinated Debentures under the Subordinated
Debenture Documents and notwithstanding any provision of any Subordinated Debenture Document to the
contrary, hereby authorize the Subordinated Holder Representative to comply with its obligations
under this Section 3.4.

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     SECTION 4 Enforcement Rights.

     4.1 Exclusive Enforcement. Subject to the Subordinated Holders’ rights to commence a
Permitted Action, until the Senior Indebtedness Payment Date has occurred, whether or not an
Insolvency Proceeding has been commenced by or against any Loan Party, the Senior First Priority
Secured Parties shall have the exclusive right to take and continue any Enforcement Action with
respect to the Common Collateral, without any consultation with or consent of any Subordinated
Holder, but subject to the proviso set forth in Section 6.1. Upon the occurrence and
during the continuance of a Default or an Event of Default (as each such term is defined in the
Senior Credit Agreement), the Senior Agent and the other Senior First Priority Secured Parties may
take and continue any Enforcement Action with respect to the Senior Indebtedness and the Common
Collateral in such order and manner as they may determine in their sole discretion, subject to
their obligation to account for excess proceeds as contemplated by Section 5.1.

     4.2 Standstill and Waivers. The Subordinated Holder Representative and the
Subordinated Holders (by their execution of the Subordinated Debenture Purchase Agreement and/or
the Indenture and their purchase of the Subordinated Debentures thereunder (or otherwise holding or
owning any Subordinated Indebtedness)) agree that, until the Senior Indebtedness Payment Date has
occurred, subject to the terms of Section 5.1 and the proviso set forth in Section
6.1 and except for Permitted Actions:

     (a) they will not take or cause to be taken any action, the purpose or effect of which is to
make any Lien in respect of any Subordinated Indebtedness pari passu with or senior to, or to give
any Subordinated Holder any preference or priority relative to, the Liens with respect to the
Senior Indebtedness or the Senior First Priority Secured Parties with respect to any of the Common
Collateral;

     (b) they will not contest, oppose, object to, interfere with, hinder or delay, in any manner,
whether by judicial proceedings (including, without limitation, the filing of an Insolvency
Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of
the Common Collateral by the Senior Agent or any other Senior First Priority Secured Party or any
other Enforcement Action taken by or on behalf of the Senior Agent or any other Senior First
Priority Secured Party;

     (c) they have no right to (i) direct either the Senior Agent or any other Senior First
Priority Secured Party to exercise any right, remedy or power with respect to the Common Collateral
or pursuant to the Senior Security Documents or (ii) consent or object to the exercise by the
Senior Agent or any other Senior First Priority Secured Party of any right, remedy or power with
respect to the Common Collateral or pursuant to the Senior Loan Documents or to the timing or
manner in which any such right is exercised or not exercised (or, to the extent they may have any
such right described in this clause (c), whether as a junior lien creditor or otherwise, they
hereby irrevocably waive such right);

     (d) they will not institute any suit or other proceeding or assert in any suit, Insolvency
Proceeding or other proceeding any claim against the Senior Agent or any other Senior First
Priority Secured Party seeking damages from or other relief by way of specific performance,

14

 

instructions or otherwise, with respect to, and neither the Senior Agent nor any other Senior
First Priority Secured Party shall be liable for, any action taken or omitted to be taken by the
Senior Agent or any other Senior First Priority Secured Party with respect to the Common
Collateral;

     (e) they will not make any judicial or nonjudicial claim or demand or commence any judicial or
non-judicial proceedings against any Loan Party or any subsidiary or affiliate of any Loan Party
under or with respect to any Subordinated Security Document seeking payment or damages from or
other relief by way of specific performance, instructions or otherwise under or with respect to any
Subordinated Security Document (other than filing a proof of claim in an Insolvency Proceeding) or
exercise any right, remedy or power under or with respect to, or otherwise take any action to
enforce, other than filing a proof of claim, any Subordinated Debenture Document;

     (f) they will not commence judicial or nonjudicial foreclosure proceedings with respect to,
seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any
action to take possession of, exercise any right, remedy or power with respect to, or otherwise
take any action to enforce their interest in or realize upon, any Common Collateral or pursuant to
the Subordinated Security Documents, including delivery of letters-in-lieu to buyers of
hydrocarbons or other letters of direction to account debtors; and

     (g) they will not seek, and hereby waive any right, to have the Common Collateral or any part
thereof marshaled upon any foreclosure or other disposition of the Common Collateral.

     4.3 Judgment Creditors. In the event, in accordance with Section 2.8, that
any Subordinated Holder becomes a judgment lien creditor in respect of Common Collateral as a
result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be
subject to the terms of this Agreement for all purposes (including in relation to the First
Priority Liens and the Senior Indebtedness) as the other Liens securing the Subordinated
Indebtedness (created pursuant to the Subordinated Security Documents) are subject to this
Agreement.

     4.4 Cooperation. The Subordinated Holder Representative and the other Subordinated
Holders (by their execution of the Subordinated Debenture Purchase Agreement and/or the Indenture
and purchase of the Subordinated Debentures thereunder (or otherwise holding or owning any
Subordinated Indebtedness)) agree that each of them shall take such actions as the Senior Agent
shall reasonably request in connection with the exercise by the Senior First Priority Secured
Parties of their rights set forth herein.

     4.5 Actions Upon Breach.

     (a) If any Subordinated Holder, contrary to this Agreement, commences or participates in any
Enforcement Action against any Loan Party or the Common Collateral, such Loan Party, with the prior
written consent of the Senior Agent, may interpose as a defense or dilatory plea the making of this
Agreement, and any Senior First Priority Secured Party may intervene and interpose such fact as a
defense or dilatory plea in its or their name or in the name of such Loan Party.

     (b) Should any Subordinated Holder, contrary to this Agreement, in any way take, attempt to or
threaten to take any action with respect to the Common Collateral (including,

15

 

without limitation, any attempt to realize upon or enforce any remedy with respect to this
Agreement), or fail to take any action required by this Agreement, any Senior First Priority
Secured Party (in its or their own name) may obtain relief against such Subordinated Holder by
injunction, specific performance and/or other appropriate equitable relief, it being understood and
agreed by the Subordinated Holder Representative on behalf of each Subordinated Holder that (i) the
Senior First Priority Secured Parties’ damages from its actions may at that time be difficult to
ascertain and may be irreparable, and (ii) each Subordinated Holder waives any defense that any
Senior First Priority Secured Party cannot demonstrate damage and/or be made whole by the awarding
of damages.

     4.6 Permitted Actions. The Subordinated Holder Representative shall promptly notify
the Senior Agent of the commencement of any Permitted Action, any judgment in any Permitted Action
and any other material developments related to its efforts in any of the foregoing. The Borrower
shall promptly notify the Senior Agent of any exercise by any Subordinated Holder of any
Subordinated Holder Optional Redemption.

     SECTION 5 Application of Proceeds of Common Collateral; Dispositions and Releases of
Common Collateral; Inspection and Insurance.

     5.1 Application of Proceeds; Turnover Provisions. All proceeds of Common Collateral
(including, without limitation, any interest earned thereon) resulting from the sale, collection or
other disposition of Common Collateral in connection with or resulting from any Enforcement Action,
and whether or not pursuant to an Insolvency Proceeding, shall be distributed as follows:
first to the Senior Agent for application to the Senior Indebtedness in accordance with the
terms of the Senior Loan Documents, until the Senior Indebtedness Payment Date has occurred and
thereafter, to the Subordinated Holder Representative for application to the Subordinated
Indebtedness in accordance with the Subordinated Debenture Documents and thereafter to Borrower in
accordance with the Subordinated Debenture Documents. Until the occurrence of the Senior
Indebtedness Payment Date, any Common Collateral, including, without limitation, any such Common
Collateral constituting proceeds, received by any Subordinated Holder in violation of this
Agreement shall be segregated and held in trust and promptly paid over to the Senior Agent, for the
benefit of the Senior First Priority Secured Parties, in the same form as received, with any
necessary endorsements, and each Subordinated Holder, by entering into the Subordinated Debenture
Purchase Agreement and/or the Indenture and purchasing the Subordinated Debentures thereunder (or
otherwise holding or owning any Subordinated Indebtedness), hereby authorizes the Senior Agent to
make any such endorsements as agent for such Subordinated Holder (which authorization, being
coupled with an interest, is irrevocable).

     5.2 Releases of Second Priority Lien.

     (a) Upon any sale or other disposition of Common Collateral that results in the release of the
First Priority Lien on any Common Collateral (including, without limitation, any sale or other
disposition pursuant to any Enforcement Action), the Second Priority Lien on such Common Collateral
shall be automatically released with no further consent or action of any Person. The parties
acknowledge that the Liens of the parties shall attach in the same priority as contemplated by this
Agreement to the proceeds of such sale or other disposition in accordance

16

 

with applicable law and that any such proceeds realized from an Enforcement Action shall be
applied in accordance with the terms of Section 5.1.

     (b) The Subordinated Holder Representative and the Subordinated Holders shall authorize and/or
promptly execute and deliver such release documents and instruments and shall take such further
actions as the Senior Agent shall reasonably request to evidence any release of the Second Priority
Lien described in paragraph (a). The Subordinated Holder Representative hereby appoints the Senior
Agent and any officer or duly authorized person of the Senior Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in
the place and stead of the Subordinated Holder Representative and in the name of the Subordinated
Holder Representative or in the Senior Agent’s own name, from time to time, in the Senior Agent’s
sole discretion, for the purposes of carrying out the terms of this paragraph, to take any and all
appropriate action and to execute and deliver any and all documents and instruments as may be
necessary or desirable to accomplish the purposes of this paragraph, including, without limitation,
any financing statements, endorsements, assignments, releases or other documents or instruments of
transfer (which appointment, being coupled with an interest, is irrevocable).

     5.3 Inspection Rights and Insurance.

     (a) Subject to the terms of Section 3.3(b) and Section 5.1, any Senior First
Priority Secured Party and its representatives and invitees may at any time inspect, repossess,
remove and otherwise deal with the Common Collateral in accordance with the terms of the Senior
Loan Documents, and the Senior Agent may advertise and conduct public auctions or private sales of
the Common Collateral, in each case without notice to, the involvement of or interference by any
Subordinated Holder or liability to any Subordinated Holder.

     (b) Until the Senior Indebtedness Payment Date has occurred and, in each case, in accordance
with the terms of the Senior Loan Documents, the Senior Agent will have (i) the right, along with
the Subordinated Holder Representative, to be named as loss payee under any insurance policies
maintained from time to time by any Loan Party; (ii) the exclusive right to adjust or settle any
insurance policy or claim covering the Common Collateral in the event of any loss thereunder; and
(iii) the exclusive right to approve any award granted in any condemnation or similar proceeding
affecting the Common Collateral. All such proceeds shall be applied in a manner consistent with
this Agreement. With respect to any check or other instrument issued jointly to the Senior Agent
and the Subordinated Holder Representative or the Subordinated Holders, the Subordinated Holder
Representative and the Subordinated Holders (by entering into the Subordinated Debenture Purchase
Agreement and/or the Indenture and purchasing the Subordinated Debentures thereunder (or otherwise
holding or owning any Subordinated Indebtedness)) hereby appoint the Senior Agent and any officer
or duly authorized person of the Senior Agent, with full power of substitution, as their true and
lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the
Subordinated Holder Representative and the Subordinated Holders and in the name of the Subordinated
Holder Representative or the Subordinated Holders or in the Senior Agent’s own name, from time to
time, in the Senior Agent’s sole discretion, for the purposes of carrying out the terms of this
paragraph, to take any and all appropriate action and to endorse, execute and deliver any and all
documents and instruments as may be necessary to accomplish the purposes of this paragraph,
including,

17

 

without limitation, any endorsements, assignments, releases or other documents or instruments
(which appointment, being coupled with an interest, is irrevocable). Notwithstanding the
foregoing, the Senior Agent hereby agrees that, in exercising its rights under this Section
5.3(b), it shall not enter into any settlement agreement binding on the Subordinated Holders or
the Subordinated Holder Representative that imposes affirmative obligations on the Subordinated
Holders or the Subordinated Holder Representative.

     SECTION 6 Insolvency Proceedings.

     6.1 Filing of Motions. Until the Senior Indebtedness Payment Date has occurred, the
Subordinated Holder Representative and the other Subordinated Holders (by their execution of the
Subordinated Debenture Purchase Agreement and/or the Indenture and purchase of the Subordinated
Debentures thereunder (or otherwise holding or owning any Subordinated Indebtedness)) agree that no
Subordinated Holder shall, in or in connection with any Insolvency Proceeding, file any pleadings
or motions, take any position at any hearing or proceeding of any nature, or otherwise take any
action whatsoever, in each case, that would breach a provision of this Agreement, including,
without limitation, any challenge or contest with respect to the determination of any Liens or
claims (including the validity and enforceability thereof) held by the Senior Agent or any other
Senior First Priority Secured Party or the value of any claims of such parties under Section 506(a)
of the Bankruptcy Code or otherwise; provided that the Subordinated Holder Representative
and the Subordinated Holders may file a proof of claim in an Insolvency Proceeding. For the
avoidance of doubt, nothing in this Agreement should be construed to prohibit the Subordinated
Holder Representative and the Subordinated Holders from pursuing the rights and taking actions and
filing motions that other unsecured creditors are generally permitted to pursue or filing and
pursuing any Permitted Action or other motion or action to the extent not prohibited by
Sections 2.8, 3.2, 4.1, 4.2, and this Section 6.1.

     6.2 Financing Matters. If any Loan Party becomes subject to any Insolvency
Proceeding, and if the Senior Agent or one or more of the other Senior First Priority Secured
Parties desire to consent (and not object) to the use of cash collateral under the Bankruptcy Code
or to provide DIP Financing to any Loan Party, then the Subordinated Holder Representative and the
Subordinated Holders agree that they (a) will be deemed to have consented to, will raise no
objection to, nor support any other Person objecting to, the use of such cash collateral or to such
DIP Financing, (b) will not request or accept adequate protection or any other relief in connection
with the use of such cash collateral or such DIP Financing except as set forth in Section
6.4 below, (c) will subordinate (and will be deemed hereunder to have subordinated) the Second
Priority Liens (i) to such DIP Financing on the same terms as the First Priority Liens are
subordinated thereto (and such subordination will not alter in any manner the terms of this
Agreement), (ii) to any adequate protection provided to the Senior First Priority Secured Parties,
and (iii) to any “carve-out” agreed to by the Senior Agent or the other Senior First Priority
Secured Parties, and (d) agrees that notice received two calendar days prior to the entry of an
order approving such usage of cash collateral or approving such DIP Financing shall be adequate
notice.

     6.3 Relief From the Automatic Stay. The Subordinated Holder Representative and the
other Subordinated Holders agree that none of them will seek relief from the automatic stay

18

 

or from any other stay in any Insolvency Proceeding in respect of any Common Collateral,
without the prior written consent of the Senior Agent.

     6.4 Adequate Protection. The Subordinated Holder Representative and the other
Subordinated Holders agree that they shall not object to, contest, or support any other Person
objecting to or contesting, (a) any request by the Senior Agent or the Senior First Priority
Secured Parties for adequate protection or any adequate protection provided to the Senior Agent or
the other Senior First Priority Secured Parties, (b) any objection by the Senior Agent or any other
Senior First Priority Secured Parties to any motion, relief, action or proceeding based on a claim
of a lack of adequate protection or (c) the payment of interest, fees, expenses or other amounts to
the Senior Agent or any other Senior First Priority Secured Party under Section 506(b) or 506(c) of
the Bankruptcy Code or otherwise. Notwithstanding anything to the contrary in this Agreement, in
any Insolvency Proceeding, (i) if the Senior First Priority Secured Parties (or any of them) are
granted adequate protection in the form of additional collateral or super priority claims in
connection with any DIP Financing or use of cash collateral, and the Senior First Priority Secured
Parties do not object to the adequate protection being provided to them, then the Subordinated
Holder Representative and any of the Subordinated Holders may seek or accept adequate protection
solely in the form of (A) a replacement Lien on such additional collateral, subordinated to the
Liens securing the Senior Indebtedness and such DIP Financing on the same basis as the other Liens
securing the Subordinated Indebtedness is so subordinated to the Senior Indebtedness under this
Agreement and (B) super priority claims junior in all respects to the super priority claims granted
to the Senior First Priority Secured Parties; provided, however, that the
Subordinated Holder Representative shall have irrevocably agreed, pursuant to Section 1129(a)(9) of
the Bankruptcy Code, on behalf of itself and the Subordinated Holders, in any stipulation and/or
order granting such adequate protection, that such junior superpriority claims may be paid under
any plan of reorganization in any combination of cash, debt, equity or other property having a
value on the effective date of such plan equal to the allowed amount of such claims and (ii) in the
event the Subordinated Holder Representative, on behalf of itself and the Subordinated Holders,
seeks or accepts adequate protection in accordance with clause (a) above and such adequate
protection is granted in the form of additional collateral, then the Subordinated Holder
Representative, on behalf of itself or any of the Subordinated Holders, agrees that the Senior
Agent shall also be granted a senior Lien on such additional collateral as security for the Senior
Indebtedness and any such DIP Financing and that any Lien on such additional collateral securing
the Subordinated Indebtedness shall be subordinated to the Liens on such collateral securing the
Senior Indebtedness and any such DIP Financing (and all obligations relating thereto) and any other
Liens granted to the Senior First Priority Secured Parties as adequate protection, with such
subordination to be on the same terms that the other Liens securing the Subordinated Indebtedness
are subordinated to such Senior Indebtedness under this Agreement. The Subordinated Holder
Representative, on behalf of itself and the Subordinated Holders, agrees that except as expressly
set forth in this Section none of them shall seek or accept adequate protection without the prior
written consent of the Senior Agent.

     6.5 Avoidance Issues. If any Senior First Priority Secured Party is required in any
Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any
Loan Party, because such amount was avoided or ordered to be paid or disgorged for any reason,
including, without limitation, because it was found to be a fraudulent or preferential transfer,
any

19

 

amount (a “Recovery”), whether received as proceeds of security, enforcement of any
right of set-off or otherwise, then the Senior Indebtedness shall be reinstated to the extent of such
Recovery and deemed to be outstanding as if such payment had not occurred and the Senior
Indebtedness Payment Date shall be deemed not to have occurred. If this Agreement shall have been
terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and
such prior termination shall not diminish, release, discharge, impair or otherwise affect the
obligations of the parties hereto. The Subordinated Holders (by entering into the Subordinated
Debenture Purchase Agreement and/or the Indenture and purchasing the Subordinated Debentures
thereunder (or otherwise holding or owning any Subordinated Indebtedness)) agree that none of them
shall be entitled to benefit from any avoidance action affecting or otherwise relating to any
distribution or allocation made in accordance with this Agreement, whether by preference or
otherwise, it being understood and agreed that the benefit of such avoidance action otherwise
allocable to them shall instead be allocated and turned over for application in accordance with the
priorities set forth in this Agreement.

     6.6 Asset Dispositions in an Insolvency Proceeding. Neither the Subordinated Holder
Representative nor any other Subordinated Holder shall, in an Insolvency Proceeding or otherwise,
oppose any sale or disposition of any assets of any Loan Party that is supported by the Senior
First Priority Secured Parties. Without limitation of the foregoing, the Subordinated Holder
Representative and each other Subordinated Holder will not object to any sale under Section 363 of
the Bankruptcy Code (and otherwise under the Bankruptcy Code and the rules promulgated thereunder)
to any sale supported by the Senior First Priority Secured Parties and will agree to have released
their Liens in such assets.

     6.7 Separate Grants of Security and Separate Classification. Each Subordinated Holder
(by entering into the Subordinated Debenture Purchase Agreement and/or the Indenture and purchasing
the Subordinated Debentures thereunder (or otherwise holding or owning any Subordinated
Indebtedness)) acknowledges and agrees that (a) the grants of Liens pursuant to the Senior Security
Documents and the Subordinated Security Documents constitute two separate and distinct grants of
Liens and (b) because of, among other things, their differing rights in the Common Collateral, the
Subordinated Indebtedness is fundamentally different from the Senior Indebtedness and must be
separately classified in any plan of reorganization proposed or adopted in an Insolvency
Proceeding. To further effectuate the intent of the parties as provided in the immediately
preceding sentence, if it is held that the claims against the Senior First Priority Secured Parties
and Subordinated Holders in respect of the Common Collateral constitute only one secured claim
(rather than separate classes of senior and junior secured claims), then the Subordinated Holders
(by entering into the Subordinated Debenture Purchase Agreement and/or the Indenture and purchasing
the Subordinated Debentures thereunder (or otherwise holding or owning any Subordinated
Indebtedness)) hereby acknowledge and agree (i) that all distributions shall be made as if there
were separate classes of senior and junior secured claims against the Loan Parties in respect of
the Common Collateral with the effect being that, to the extent that the aggregate value of the
Common Collateral is sufficient (for this purpose ignoring all claims held by the Subordinated
Holders), the Senior First Priority Secured Parties shall be entitled to receive, in addition to
amounts distributed to them in respect of principal, pre-petition interest and other claims, all
amounts owing in respect of Post-Petition Interest before any distribution is made in respect of
the claims held by the Subordinated Holders, and (ii) to turn over to the Senior First Priority
Secured Parties amounts otherwise received or receivable by them to the

20

 

extent necessary to effectuate the intent of this sentence, even if such turnover has the
effect of reducing the claim or recovery of the Subordinated Holders.

     6.8 No Waivers of Rights of Senior First Priority Secured Parties. Nothing contained
herein shall prohibit or in any way limit the Senior Agent or any other Senior First Priority
Secured Party from objecting in any Insolvency Proceeding or otherwise to any action taken by any
Subordinated Holder not expressly permitted hereunder, including the seeking by any Subordinated
Holder of adequate protection (except as provided in Section 6.4).

     6.9 Plans of Reorganization. Neither the Subordinated Holder Representative nor any
Subordinated Holder shall support or vote in favor of any plan of reorganization (and each shall be
deemed to have voted to reject any plan of reorganization) unless such plan (a) pays off, in cash
in full, all Senior Indebtedness or (b) is accepted by the class of holders of Senior Indebtedness
voting thereon and is supported by the Senior Agent.

     6.10 Other Matters. To the extent that the Subordinated Holder Representative or any
Subordinated Holder has or acquires rights as a junior lienholder under Section 363 or Section 364
of the Bankruptcy Code with respect to any of the Common Collateral, the Subordinated Holder
Representative and such other Subordinated Holders agree not to assert any of such rights without
the prior written consent of the Senior Agent; provided that if requested by the Senior
Agent, the Subordinated Holder Representative and such Subordinated Holder shall timely exercise
such rights in the manner requested by them, including any rights to payments in respect of such
rights.

     6.11 Effectiveness in Insolvency Proceedings. This Agreement shall be effective both
before and after the commencement of an Insolvency Proceeding. All references in this Agreement to
any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee
for such Loan Party in any Insolvency Proceeding.

     SECTION 7 Agreements of the Parties.

     7.1 Agreements Relating to the Subordinated Debenture Documents. Each Loan Party and
the Subordinated Holder Representative, on behalf of itself and the Subordinated Holders, agrees
that it shall not (a) at any time execute or deliver any waiver, amendment or other modification to
any of the Subordinated Debenture Documents inconsistent with or in violation of this Agreement; or
(b) amend, modify, waive or otherwise change, consent or agree to any amendment, modification,
waiver or other change to, any of the terms of the Subordinated Debenture Purchase Agreement, the
Indenture or any other Subordinated Debenture Document if (i) the effect of such amendment,
modification or waiver is to shorten the final maturity or create amortization of principal or
increase the amount of any payment of principal thereof or increase the rate or shorten any period
for payment of interest thereon or modify the method of calculating the interest rate, (ii) such
action requires the payment of a consent, amendment, waiver or other similar fee in excess of 500
basis points during any 12-month period, (iii) such action adds covenants, events of default or
other agreements to the extent materially more restrictive than those contained in the Subordinated
Debenture Documents as in effect on June 9, 2008 unless the corresponding covenant in the Senior
Loan Document shall be added or so modified, provided that (A) any such addition or
modification shall be subject to a “cushion”

21

 

mutually agreed by the Senior Lenders and the Subordinated Holders (but in any event not
greater than any related cushion applicable to similar corresponding covenants in the Senior Credit
Agreement and the Subordinated Debenture Purchase Agreement, each as in effect on June 9, 2008),
and (B) the Subordinated Holders shall remove any such addition and revert to its earlier terms any
modification at the time and to the extent that the Senior Lenders shall remove any corresponding
addition or revert to its early terms any corresponding modification, or (iv) such action adds
collateral unless the Senior Loan Documents are being amended at the same time to reflect such new
Senior Loan Collateral.

     7.2 Agreements Relating to the Senior Loan Documents.

     (a) Each Loan Party and the Senior Agent, on behalf of itself and the Senior First Priority
Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other
modification to any of the Senior Loan Documents if the effect thereof (i) extends the final
maturity of the Senior Loans beyond April 2, 2013, (ii) increases the applicable margin over the
Alternate Base Rate (as defined in the Senior Credit Agreement), LIBO Rate (as defined in the
Senior Credit Agreement) or other reference rate specified in the Senior Loan Documents by an
amount greater than two percent (2%) per annum over the highest amount set forth in the Senior
Credit Agreement as in effect on the date hereof, plus during the continuation of an Event of
Default (as defined in the Senior Credit Agreement), any applicable default rate as in effect on
the date hereof, or (iii) increases the principal amount of the loans made under the Senior Credit
Agreement to an amount in excess of $150,000,000.

     (b) If all of the events described in clauses (a), (b), (c) and (d) of the definition of
“Senior Indebtedness Payment Date” have occurred to the satisfaction of the Senior First Priority
Secured Parties, the Senior Agent agrees to promptly deliver a written notice to the Subordinated
Holder Representative to that effect; provided that neither the Senior Agent nor any other
Senior First Priority Secured Party shall have any liability for the failure to deliver such notice
or to timely deliver such notice other than to return amounts received after the Senior
Indebtedness Payment Date in excess of the amount of the Senior Indebtedness to the Subordinated
Holder Representative (or as otherwise directed by a court of competent jurisdiction).

     7.3 Subordinated Holders’ Purchase Option.

     (a) The Subordinated Holders, jointly or separately, shall have the option, upon three
Business Days’ prior written notice to the Senior Agent, to purchase through a refinancing or
otherwise all, but not less than all, of the Senior Indebtedness (other than outstanding Letters of
Credit) then outstanding under the Senior Loan Documents at a purchase price in cash equal to the
sum of (i) the aggregate principal amount of the Senior Loans then outstanding under the Senior
Loan Documents, (ii) all accrued and unpaid interest, fees, expenses, breakage costs and other
liquidated amounts then due and liquidated claims of indemnity and (iii) the termination value of
all Swap Agreements constituting Senior Indebtedness; provided, that,
contemporaneously with the payment of such purchase price, provision of cash collateral is made
with respect to all Letters of Credit then issued and outstanding under the Senior Loan Documents
in the manner set forth below.

22

 

     (b) On the date specified by the Subordinated Holders in such notice (which shall not be less
than five Business Days, nor more than eight Business Days, after the receipt by the Senior Agent
of the notice from the applicable Subordinated Holder of such election to exercise such option),
the Senior Lenders shall sell to the applicable Subordinated Holder (or its designee), and the
applicable Subordinated Holder (or its designee) shall purchase from the Senior Lenders, all, but
not less than all, of the Senior Loans and other Senior Indebtedness (other than outstanding
Letters of Credit).

     (c) Upon the date of such purchase and sale, the applicable Subordinated Holder (or its
designee) shall (i) cause to be paid in cash to the Senior Agent on behalf of the Senior Lenders
the purchase price set forth in clause (a) above, as applicable (as calculated and determined by
the Senior Agent in its sole reasonable and good faith judgment), (ii) if applicable, furnish cash
collateral to the Senior Agent in such amounts as the Senior Agent, in reasonable and good faith
judgment, determines is reasonably necessary to secure any issued and outstanding Letters of Credit
(but not in any event in an amount greater than 105% of the aggregate undrawn face amount of such
Letters of Credit), and (iii) agree to reimburse the Senior Agent for any loss, cost, damage or
expense (including reasonable attorneys’ fees and legal expenses) in connection with any
commissions, fees, costs or expenses related to any issued and outstanding Letters of Credit as
described above and any checks or other payments provisionally credited to such Senior
Indebtedness, and/or as to which the Senior Agent has not yet received final payment. Such cash
purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank
account as the Senior Agent may designate in writing to the applicable Subordinated Holder for such
purpose. Interest shall be calculated to but excluding the Business Day on which such purchase and
sale shall occur if the amounts so paid to the bank account designated by the Senior Agent are
received in such bank account later than 11:00 a.m., Chicago, Illinois time.

     (d) Such purchase shall be made without representation or warranty of any kind by the Senior
Agent and the Senior Lenders and without recourse to such Senior Lenders, except that each such
Senior Lender shall represent and warrant: (i) the amount of the Senior Loans to be purchased that
is owing to it, (ii) that such Senior Lender owns its interests in the Senior Loans free and clear
of any Liens, and (iii) such Senior Lender has the right to assign its interest in the Senior
Loans.

     SECTION 8 Reliance; Waivers; etc.

     8.1 Reliance. The Senior Loan Documents are deemed to have been executed and
delivered, and all extensions of credit thereunder are deemed to have been made or incurred, in
reliance upon this Agreement. The Subordinated Holder Representative and the Subordinated Holders
expressly waive all notice of the acceptance of and reliance on this Agreement by the Senior First
Priority Secured Parties. The Subordinated Debenture Documents are deemed to have been executed
and delivered, and all extensions of credit thereunder are deemed to have been made or incurred, in
reliance upon this Agreement. The Senior Agent expressly waives all notices of the acceptance of
and reliance by the Subordinated Holder Representative and the Subordinated Holders.

23

 

     8.2 No Warranties or Liability. The Subordinated Holder Representative, the
Subordinated Holders and the Senior Agent acknowledge and agree that none of them have made any
representation or warranty with respect to the execution, validity, legality, completeness,
collectibility or enforceability of any Senior Loan Document or any Subordinated Debenture
Document. Except as otherwise provided in this Agreement, the Subordinated Holder Representative,
the Subordinated Holders and the Senior Agent will be entitled to manage and supervise their
respective extensions of credit to any Loan Party in accordance with law and their usual practices,
modified from time to time as they deem appropriate, with, in each case, the consent of the Loan
Parties (or any of them), as applicable, to the extent required by the applicable Senior Loan
Document or Subordinated Debenture Document.

     8.3 No Waivers. No right or benefit of any party hereunder shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of such party or any other
party hereto or by any noncompliance by any Loan Party with the terms and conditions of any of the
Senior Loan Documents or the Subordinated Debenture Documents.

     SECTION 9 Obligations Unconditional.

     9.1 Senior Indebtedness Unconditional. All rights and interests of the Senior First
Priority Secured Parties hereunder, and all agreements and obligations of the Subordinated Holder
Representative and the Subordinated Holders (and, to the extent applicable, the Loan Parties)
hereunder, shall remain in full force and effect irrespective of:

     (a) any lack of validity or enforceability of any Senior Loan Document;

     (b) any change in the time, place or manner of payment of, or in any other term of, all or any
portion of the Senior Indebtedness, or any amendment, waiver or other modification, whether by
course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any
Senior Loan Document;

     (c) prior to the Senior Indebtedness Payment Date, any exchange, release, voiding, avoidance
or non-perfection of any security interest in any Common Collateral or any other collateral, or any
release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any
refinancing, replacement, refunding or restatement of all or any portion of the Senior Indebtedness
or any guarantee or guaranty thereof; or

     (d) any other circumstances that otherwise might constitute a defense available to, or a
discharge of, any Loan Party in respect of the Senior Indebtedness, or of any of the Subordinated
Holder Representative, or any Loan Party, to the extent applicable, in respect of this Agreement.

     9.2 Subordinated Indebtedness Unconditional. All rights and interests of the
Subordinated Holder Representative and the Subordinated Holders hereunder, and all agreements and
obligations of the Senior First Priority Secured Parties (and, to the extent applicable, the Loan
Parties) hereunder, shall remain in full force and effect irrespective of:

     (a) any lack of validity or enforceability of any Subordinated Debenture Document;

24

 

     (b) any change in the time, place or manner of payment of, or in any other term of, all or any
portion of the Subordinated Indebtedness, or any amendment, waiver or other modification, whether
by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any
Subordinated Debenture Document;

     (c) any exchange, release, voiding, avoidance or non-perfection of any security interest in
any Common Collateral or any other collateral, or any release, amendment, waiver or other
modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding
or restatement of all or any portion of the Subordinated Indebtedness or any guarantee or guaranty
thereof; or

     (d) any other circumstances that otherwise might constitute a defense available to, or a
discharge of, any Loan Party in respect of the Subordinated Indebtedness or any Senior First
Priority Secured Party in respect of this Agreement.

     SECTION 10 Miscellaneous Agreements.

     10.1 Representations of Subordinated Holder. Each Subordinated Holder and the
Subordinated Holder Representative by entering into the Subordinated Debenture Purchase Agreement
and/or the Indenture and purchasing the Subordinated Debentures thereunder (or otherwise holding or
owning any Subordinated Indebtedness) severally represent and warrant that:

     (a) neither the execution nor delivery of this Agreement nor fulfillment of or compliance with
the terms and provisions hereof will conflict with, or result in a breach of the terms, conditions
or provisions of, or constitute a default under, any agreement or instrument to which it is now
subject to;

     (b) it has all requisite authority to execute, deliver and perform its obligations under this
Agreement; and

     (c) this Agreement constitutes its legal, valid, and binding obligation in accordance to its
terms, subject to applicable bankruptcy, insolvency or similar laws and general principles of
equity.

     10.2 Covenants. Each Subordinated Holder and the Subordinated Holder Representative
by entering into the Subordinated Debenture Purchase Agreement and/or the Indenture and purchasing
the Subordinated Debentures thereunder (or otherwise holding or owning any Subordinated
Indebtedness) covenant that until the Senior Indebtedness Payment Date, it will:

     (a) cause the Subordinated Debenture Purchase Agreement, the Indenture and the Subordinated
Debentures to contain the following statement or legend in bold type:

     “The indebtedness and other obligations of Borrower and its
subsidiaries evidenced by this Agreement (or by this Indenture, as
applicable) and the Debentures issued hereunder owed to the Purchasers and
Holders party to this Agreement (or Indenture, as

25

 

applicable) are junior and subordinate to the indebtedness and other
obligations of Borrower and its subsidiaries in accordance with the
provisions of the Amended and Restated Intercreditor and Subordination
Agreement dated as of                     , 2008, among JPMorgan Chase Bank, N.A., as
Senior Agent, The Bank of New York Mellon Trust Company, N.A., as
Subordinated Holder Representative and collateral agent, Borrower and
certain of its affiliates, as amended from time to time.”

     (b) not assign or transfer to others any Subordinated Indebtedness or any claim of any
Subordinated Holder against Borrower or any Loan Party, unless such assignment or transfer is
expressly made subject to this Agreement.

     (c) execute any and all other instruments necessary as reasonably required by the Senior Agent
to effect the subordinations intended hereby.

     10.3 Representations of Senior Agent. The Senior Agent represents and warrants that:

     (a) neither the execution nor delivery of this Agreement nor fulfillment of or compliance with
the terms and provisions hereof will conflict with, or result in a breach of the terms, conditions
or provisions of, or constitute a default under, any agreement or instrument to which it is now
subject to;

     (b) it has all requisite authority to execute, deliver and perform its obligations under this
Agreement; and

     (c) this Agreement constitutes its legal, valid, and binding obligation in accordance to its
terms, subject to applicable bankruptcy, insolvency or similar laws and general principles of
equity.

     SECTION 11 Miscellaneous.

     11.1 Conflicts. In the event of any conflict between the provisions of this Agreement
and the provisions of any Senior Loan Document or any Subordinated Debenture Document, the
provisions of this Agreement shall govern.

     11.2 Continuing Nature of Provisions. This Agreement shall continue to be effective,
and shall not be revocable by any party hereto, until the Senior Indebtedness Payment Date shall
have occurred. This is a continuing agreement and the Senior First Priority Secured Parties and
the Subordinated Holders may continue, at any time and without notice to the other parties hereto,
to extend credit and other financial accommodations, lend monies and provide indebtedness to, or
for the benefit of, Borrower or any other Loan Party on the faith hereof.

     11.3 Amendments; Waivers. No amendment or modification of any of the provisions of
this Agreement shall be effective unless the same shall be in writing and signed by the Senior
Agent, the Subordinated Holder Representative and, only if the rights or duties of any Loan Party
are directly affected thereby, such Loan Party.

26

 

     11.4 Information Concerning Financial Condition of Borrower and the other Loan
Parties. The Subordinated Holder Representative and each of the Subordinated Holders hereby
assume responsibility for keeping themselves informed of the financial condition of Borrower and
each of the other Loan Parties and all other circumstances bearing upon the risk of nonpayment of
the Subordinated Indebtedness. The Subordinated Holder Representative and each Subordinated Holder
by entering into the Subordinated Debenture Purchase Agreement and/or the Indenture and purchasing
the Subordinated Debentures thereunder (or otherwise holding or owning any Subordinated
Indebtedness) agree that neither the Senior Agent, any holder of Senior Indebtedness nor any of
their affiliates shall have any duty to advise any Subordinated Holder or any of their
representatives of information known to it regarding such condition or any such circumstances. In
the event the Senior Agent or any Senior Lender or other Person, in its sole discretion, undertakes
at any time or from time to time to provide any information to any other party to this Agreement,
such Person shall be under no obligation (a) to provide any such information to such other party or
any other party on any subsequent occasion, (b) to undertake any investigation not a part of its
regular business routine, or (c) to disclose any other information.

     11.5 Governing Law. This Agreement shall be construed in accordance with and governed
by the law of the State of Texas, except as otherwise required by mandatory provisions of law and
except to the extent that remedies provided by the laws of any jurisdiction other than the State of
Texas are governed by the laws of such jurisdiction.

     11.6 Submission to Jurisdiction.

     (a) Each party hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the courts of the State of Texas sitting in Dallas
County and of the United States District Court for the Northern District of Texas, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding
may be heard and determined in such Texas State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment (after all rights to appeal have
been taken or waived) in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in
this Agreement shall affect any right that any Senior First Priority Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement or any Senior Loan Documents
against Borrower or any other Loan Party or its properties in the courts of any jurisdiction.

     (b) Borrower, each other Loan Party and the Subordinated Holders hereby irrevocably and
unconditionally waive, to the fullest extent they may legally and effectively do so (i) any
objection they may now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in paragraph (a) of this
Section and (ii) the defense of an inconvenient forum to the maintenance of such action or
proceeding.

27

 

     (c) Nothing in this Agreement will affect the right of any party to this Agreement to serve
process in any manner permitted by law.

     11.7 Notices. Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and may be personally
served, telecopied, or sent by overnight express courier service or United States mail and shall be
deemed to have been given when delivered in person or by courier service, upon receipt of a
telecopy or five (5) days after deposit in the United States mail (certified, with postage prepaid
and properly addressed). For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section) shall be as set forth below
each party’s name on the signature pages hereof, or, as to each party, at such other address as may
be designated by such party in a written notice to all of the other parties (except that notices to
be delivered to the Subordinated Holders may be delivered to the Subordinated Holder Representative
indicated on such party’s signature page hereto).

     11.8 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and each of the Senior First Priority Secured Parties and
Subordinated Holders and their respective successors and assigns, and nothing herein is intended,
or shall be construed to give, any other Person any right, remedy or claim under, to or in respect
of this Agreement or any Common Collateral. All references to any Loan Party shall include any
Loan Party as debtor-in-possession and any receiver or trustee for such Loan Party in any
Insolvency Proceeding.

     11.9 Headings. Section headings used herein are for convenience of reference only,
are not part of this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

     11.10 Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

     11.11 Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other
electronic transmission (e.g., pdf) shall be effective as delivery of a manually executed
counterpart of this Agreement. This Agreement shall become effective when it shall have been
executed by each party hereto.

     11.12 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.

28

 

     11.13 No Third Party Beneficiaries. All undertakings, agreements, representations and
warranties contained in this Agreement are solely for the benefit of parties hereto, the Senior
First Priority Secured Parties and the Subordinated Holders, and there are no other parties who are
intended to be benefited in any way by this Agreement. Nothing contained in this Agreement is
intended to affect or limit in any way the Liens each of the parties hereto has in or on any or all
of the property and assets of the Loan Parties, whether tangible or intangible, insofar as any Loan
Party or any third party is concerned. The parties hereto specifically reserve all respective
Liens and related rights to assert such Liens as against any Loan Party or third party.

     11.14 Actions of the Senior Agent. Actions undertaken by the Senior Agent pursuant to
this Agreement on behalf of the other Senior First Priority Secured Parties shall be undertaken at
the direction or with the consent of the requisite number or percentage of Senior Lenders to the
extent required by, and in accordance with the terms of, the Senior Loan Documents.

     11.15 Actions of the Subordinated Holder Representative. Actions undertaken by the
Subordinated Holder Representative pursuant to this Agreement on behalf of the Subordinated Holders
shall be undertaken at the direction or with the consent of the requisite number or percentage of
Subordinated Holders to the extent required by, and in accordance with the terms of, the
Subordinated Debenture Documents.

     11.16 Waiver of Punitive Damages and Consequential Damages. In no event shall any of
the Subordinated Holders, the Subordinated Holder Representative, the Senior Lenders, the Senior
First Priority Secured Parties, the Loan Parties or the Senior Agent be liable for any
consequential, exemplary or punitive damages as a result of, or arising from, any of such party’s
acts or omissions under or with respect to this Agreement.

     11.17 Restatement. This Agreement is a restatement of, and an amendment and
supplement to, the Original Intercreditor and Subordination Agreement.

[Signature Pages to Follow]

29

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as Senior

Agent for and on behalf of the Senior First Priority

Secured Parties

 	 
	 	By:  	 	 
	 	 	Ryan Fuessel, 	 
	 	 	Senior Vice President 	 
	 
	 	
Address for Notices:

JPMorgan Chase Bank, N.A.

712 Main Street, Floor 12

Houston, Texas 77002-3201

Attention: Ryan Fuessel

Telecopy No.: (832) 487-1765

 	 

[Signature Page]

Amended and Restated Intercreditor And Subordination Agreement

Teton Energy Corporation

 

 

	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON 

TRUST COMPANY, N.A., as Subordinated 

Holder Representative and collateral agent for and 

on behalf of the Subordinated Holders

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	
Address for Notices:

The Bank of New York Mellon Trust Company, N.A.

601 Travis Street, 18th floor

Houston, Texas 77002

Attention: Brian Echausse

Telecopy: (713) 483-7038
 	 

[Signature Page]

Amended and Restated Intercreditor And Subordination Agreement

Teton Energy Corporation

 

 

	 	 	 	 	 
	 	TETON ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	Lonnie R. Brock 	 
	 	 	Title:  	Executive Vice President and 
Chief Financial Officer 	 
	 
	 	
Address for Notices:

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Lonnie Brock

Telecopy: (303) 565-4606
 	 

	 	 	 	 	 
	 	TETON NORTH AMERICA LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Lonnie R. Brock 	 
	 	 	Title:  	Executive Vice President and 
Chief Financial Officer 	 
	 
	 	
Address for Notices:

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Lonnie Brock

Telecopy: (303) 565-4606
 	 

[Signature Page]

Amended and Restated Intercreditor And Subordination Agreement

Teton Energy Corporation

 

 

	 	 	 	 	 
	 	TETON PICEANCE LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Lonnie R. Brock 	 
	 	 	Title:  	Executive Vice President and 
Chief Financial Officer 	 
	 
	 	

Address for Notices:

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Lonnie Brock

Telecopy: (303) 565-4606

 	 

	 	 	 	 	 
	 	TETON DJ LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Lonnie R. Brock 	 
	 	 	Title:  	Executive Vice President and
 Chief Financial Officer 	 
	 
	 	

Address for Notices:

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Lonnie Brock

Telecopy: (303) 565-4606
 	 

[Signature Page]

Amended and Restated Intercreditor And Subordination Agreement

Teton Energy Corporation

 

 

	 	 	 	 	 
	 	TETON WILLISTON LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Lonnie R. Brock 	 
	 	 	Title:  	Executive Vice President and 
Chief Financial Officer 	 
	 
	 	
Address for Notices:

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Lonnie Brock

Telecopy: (303) 565-4606

 	 
	 	TETON BIG HORN LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Lonnie R. Brock 	 
	 	 	Title:  	Executive Vice President and 
Chief Financial Officer 	 
	 
	 	
Address for Notices:

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Lonnie Brock

Telecopy: (303) 565-4606
 	 

[Signature Page]

Amended and Restated Intercreditor And Subordination Agreement

Teton Energy Corporation

 

 

	 	 	 	 	 
	 	TETON DJCO LLC

 	 
	 	By:  	
 	 
	 	 	Name:  	Lonnie R. Brock 	 
	 	 	Title:  	Executive Vice President and 
Chief Financial Officer 	 
	 	

Address for Notices:

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Lonnie Brock

Telecopy: (303) 565-4606
 	 

[Signature Page]
Amended and Restated Intercreditor And Subordination Agreement

Teton Energy Corporationexv10w3

Exhibit 10.3

ASCENT MEDIA GROUP, LLC

2006 LONG-TERM INCENTIVE PLAN

(As Amended and Restated Effective September 9, 2008)

     Ascent Media Group, LLC, a Delaware limited liability company (“the Company”), adopted the
Ascent Media Group, LLC 2006 Long-Term Incentive Plan effective August 3, 2006 for the benefit of
certain management and key employees, to secure the loyalty and continued services of and to
provide a long term incentive to such personnel, to promote profitability and efficiency in the
operations of the Company and the Employers, and to drive synergies with other DHC companies. The
plan was amended and restated effective as of August 15, 2008 and hereby is further amended and
restated effective as of the date first written above (as so amended and restated, the “Plan”).

Introduction

     As of the date the Plan was originally adopted, Ascent Media CANS, LLC (dba AccentHealth), a
Delaware limited liability company (“AMC”), was an Affiliate of, and managed by, the Company.
Prior to the date hereof, the Plan provided that the PAR Value of PARs granted pursuant to the Plan
would be based in part upon the value of, and a portion of the free cash flow generated by, AMC.

     On September 4, 2008 (the “AH Sale Date”), the equity interests in AMC were sold to an
unrelated party (the “AH Sale”). As a consequence of the AH Sale, AMC ceased to be an Affiliate of
the Company, and the Company ceased to have any involvement in the management or operations of AMC.
The Committee has determined that it would be in the best interests of the Company to modify the
Plan to provide that (i) any Grantee holding PARs as of the AH Sale Date will receive accelerated
distributions representing the portion of PAR Value attributable to the increase in the value of
AMC and the free cash flow generated by AMC as of the AH Sale Date, and (ii) following the AH Sale
Date, the value and the free cash flow of AMC will be excluded in determining benefits payable
under the Plan upon the deemed exercise of PARs.

SECTION 1 DEFINITIONS:

     The terms set forth below have the definitions indicated whenever used in this Plan.

     (a) “2006/2007 PAR”: Any PAR having a Grant Date from August 3, 2006 to December 31, 2007,
inclusive.

     (b) “2008 PAR”: Any PAR having a Grant Date from January 1, 2008 to the AH Sale Date,
inclusive.

 

 

     (c) “Account”: An account established under Section 3 for each Grantee who is deemed to
exercise vested PARs.

     (d) “Affiliate”: With respect to any Person, any other Person Controlling, Controlled by, or
under common Control with such Person.

     (e) “AH Determination Date”: As to any Grantee, the earlier of (i) the AH Distribution Date
that occurs in February, 2009 or (ii) the date of the Grantee’s Termination.

     (f) “AH Distribution”: As defined in Section 5(c).

     (g) “AH Distribution Date”: Each of the last regularly scheduled payroll dates of the Company
that occurs during February and August of 2009, 2010 and 2011.

     (h) “AH Sale”: As defined in the introduction.

     (i) “AH Sale Date”: As defined in the introduction.

     (j) “Balance Sheet”: As of any relevant date, the balance sheet of the Company and its
consolidated Subsidiaries as of such date prepared in accordance with generally accepted accounting
principles.

     (k) “beneficial ownership”: As determined pursuant to Rule 13d-3 and Rule 13d-5 of the
Exchange Act and any successor regulation, except that a Person shall be deemed to have beneficial
ownership of all securities that such Person has or acquires the right to acquire, whether such
right is exercisable immediately or after the passage of time.

     (l) “Beneficiary”: The Person or Persons designated by a Grantee pursuant to a Grant
Agreement to receive the amount, if any, that becomes payable under this Plan upon the death of the
Grantee.

     (m) “Cash-Basis Tax Payments”: For any calendar year, the aggregate cash actually expended by
the Company and its consolidated Subsidiaries during such calendar year for the payment of taxes
other than federal or state income taxes, regardless of the calendar year to which such taxes are
attributable under generally acceptable accounting principles.

     (n) “Change in Control”: With respect to the Company at any time the Company is a corporation
(or at any time the Company is not a corporation, in which case any reference to “stock” below will
be deemed to refer to ownership interests in such non-corporate entity and any reference to
“shareholders” below will be deemed to refer to the holders of such ownership interests), a change
in ownership of the Company or a change in the ownership of a substantial portion of the Company’s
assets, all as defined below:

          (i) A change in ownership of the Company will occur on the date that any one Person, or more
than one Person acting as a group (a “Group”), acquires ownership of stock of the Company that,
together with stock held by such Person or Group, constitutes more than 50% of the total fair
market value or more than 50% of the total voting power of the stock of the Company. However, if
any Person or Group is considered to own more than 50% of the

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total fair market value or more than 50% of the total voting power of the stock of the
Company, the acquisition of additional stock by the same Person or Group is not considered to cause
a change in the ownership of the Company. An increase in the percentage of stock owned by any
Person or Group as a result of a transaction in which the Company acquires its stock in exchange
for property will be treated as an acquisition of stock for purposes of this Section 1(n)(i). This
Section 1(n)(i) applies only when there is a transfer of stock of the Company (or issuance of stock
of the Company) and stock in the Company remains outstanding after the transaction.

          (ii) A change in the ownership of a substantial portion of the Company’s assets will occur on
the date that any Person or Group acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such Person or Group) assets from the Company that have
a total gross fair market value equal to or exceeding 40% of the total gross fair market value of
all of the assets of the Company immediately prior to such acquisition or acquisitions. For this
purpose, “gross fair market value” means the value of the assets of the Company, or the value of
the assets being disposed of, determined without regard to any liabilities associated with such
assets.

          (iii) There is no Change in Control when there is a transfer to a Person that is Controlled by
the shareholders of the Company immediately after the transfer, determined as follows: A transfer
of assets by the Company is not treated as a change in the ownership of such assets if the assets
are transferred to (A) a Person who is a shareholder of the Company immediately before the asset
transfer, in exchange for or with respect to stock of the Company; (B) an entity, 50% or more of
the total value or 50% or more of the total voting power of which is owned, directly or indirectly,
by the Company; (C) a Person or Group that owns, directly or indirectly, 50% or more of the total
value or 50% or more of the total voting power of all of the outstanding stock of the Company; or
(D) an entity, at least 50% of the total value or 50% of the total voting power of which is owned,
directly or indirectly, by a Person described in (C) of this paragraph. For purposes of this
Section 1(n)(iii) and except as provided in the preceding sentence, a Person’s status is determined
immediately after the transfer of the assets. Notwithstanding anything to the contrary in this
Plan, a direct or indirect spin-off or split-off of the Company from DHC, however effected
(including, for example, by a pro rata distribution or an exchange offer) will not be a Change in
Control under this Plan.

          (iv) This definition is intended to comply with the definition of a change in ownership of the
Company or a change in the ownership of a substantial portion of the Company’s assets under Code
Section 409A, and shall be interpreted in a manner consistent with such intent.

     (o) “Change in Control Net Company Value”: As defined in Section 1(yy)(iii).

     (p) “Code”: The Internal Revenue Code of 1986, as amended. Unless otherwise indicated, any
reference in this Plan to a section of the Code shall be deemed also to refer to any Treasury
regulations promulgated thereunder.

     (q) “Committee”: The Committee will consist of two or more individuals appointed by DHC to
administer this Plan. Notwithstanding the above, at any time the Company

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is a corporation and shares of the Company’s stock are publicly traded, the Committee will
consist of two or more individuals appointed by the Board of Directors of the Company. To the
extent compliance with Code Section 162(m) is intended with respect to any PAR, the Committee will
consist of “outside directors” as defined under Code Section 162(m) and related Treasury
regulations and, with respect to participation by individuals who are subject to Section 16 of the
Exchange Act, the Committee will consist of “non-employee directors” as defined under Rule 16b-3
under the Exchange Act, and will comply with applicable stock exchange requirements.

     (r) “Company”: Ascent Media Group, LLC, a Delaware limited liability company.

     (s) “Company Capital Expenditures”: For any relevant period, the aggregate amount of expenses
of the Company and its consolidated Subsidiaries that are required to be capitalized under
generally accepted accounting principles.

     (t) “Company Debt”: As of any Valuation Date, the total amount of loans, advances, and other
indebtedness, including intercompany indebtedness (other than intercompany indebtedness between the
Company and any consolidated Subsidiary of the Company), before reduction for any unamortized
discount, of the Company and its consolidated Subsidiaries as of such Valuation Date, determined in
accordance with generally accepted accounting principles.

     (u) “Company EBITDA”: EBITDA of the Company and its consolidated Subsidiaries from all
sources, which for any period will equal the total of CS EBITDA, NS Contracted EBITDA and NS
Non-Contracted EBITDA for such period.

     (v) “Company Enterprise Value”: As of any Valuation Date, the sum of (A) the EBITDA
Component, plus (B) the DCF Component.

     (w) “Control”: The possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting
securities or voting interests, by contract or otherwise.

     (x) “Control Person”: Each of (i) the Chairman of the Board of DHC; (ii) the President of
DHC; (iii) any Executive or Senior Vice President of DHC; (iv) each of the directors of DHC; and
(v) the respective family members, estates and heirs of each of the Persons referred to in clauses
(i) through (iv) above and any corporation, trust or other entity for the primary benefit of, or
Controlled by, any of such Persons or their respective family members or heirs. “Family members”
for this purpose means the parents, descendants, stepchildren, step grandchildren, nieces and
nephews, and the spouse of the specified Person.

     (y) “CS EBITDA” means EBITDA of the Company and its consolidated Subsidiaries from the
creative services and media management services and digital services businesses (but excluding the
network services business) conducted by the Company and its consolidated Subsidiaries.

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     (z) “Cumulative Free Cash Flow”: As of any Valuation Date, aggregate Free Cash Flow for all
calendar years beginning on or after January 1, 2006 and ending on or before such Valuation Date.

     (aa) “Current Employee”: Any Person who is an employee of the Company or any of its
Affiliates.

     (bb) “DCF Component”: As of any Valuation Date, the net present value, determined by applying
an annual discount rate of 10%, of NS Contracted Free Cash Flow, determined utilizing the
assumptions set forth in Part 2 of Schedule I.

     (cc) “DHC”: Discovery Holding Company, and any successor (by merger, consolidation, transfer
or otherwise) to all or substantially all of its assets; provided that if a Transferee Parent
becomes the beneficial owner of all or substantially all of the equity securities of the Company
then beneficially owned by DHC as to which DHC has dispositive power, the term “DHC” shall mean
such Transferee Parent and any successor (by merger, consolidation, transfer or otherwise) to all
or substantially all of its assets.

     (dd) “Disabled”: Grantee’s permanent and total disability, as defined under the long term
disability plan of the Employer or any Affiliate in which the Grantee participates or, if the
Grantee does not participate in such a plan, “Disabled” will have the meaning set forth in Section
72(m)(7) of the Code. This definition also will apply to the term “Disability,” as the context
requires.

     (ee) “EBITDA”: For any relevant period, operating income before interest, taxes,
depreciation, amortization, non-cash compensation charges or credits and any write-down for
impairment of assets, all as determined in accordance with generally accepted accounting
principles.

     (ff) “EBITDA Component”: As of any Valuation Date, the sum of CS EBITDA and NS Non-Contracted
EBITDA, in each case for the calendar year ending on the Valuation Date, multiplied by 7.5.

     (gg) “Employee”: (i) An employee or officer of any Employer, or (ii) any other Person
designated from time to time by the Committee as an Employee for purposes of this Plan.

     (hh) “Employer”: Each of the Company and any direct or indirect Subsidiary of the Company.

     (ii) “Equity Unit”: A “phantom” interest created solely for purposes of the computation of
PAR Value under this Plan.

     (jj) “Exchange Act”: The Securities Exchange Act of 1934, as amended.

     (kk) “Exercise Date”: As to any vested PAR held by a Grantee, the date on which such PAR is
deemed exercised by the Grantee.

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     (ll) “fair market value”: As to any asset, the cash price at which a willing seller would
sell and a willing buyer would buy such asset, both having knowledge of all relevant facts, in an
arm’s-length transaction without time constraints and neither being under any compulsion to buy or
sell, as determined by the Committee by any reasonable means, including by an appraisal obtained
from a reasonably qualified independent appraiser.

     (mm) “FCF Value”: As of any Valuation Date, the quotient obtained by dividing (i) Cumulative
Free Cash Flow as of such Valuation Date multiplied by .06, by (ii) .05.

     (nn) “Forfeitable Benefits”: As defined in Section 2(h).

     (oo) “Free Cash Flow”: For any calendar year, (i) Company EBITDA, minus (ii) the sum of
Company Capital Expenditures plus Cash-Basis Tax Payments plus the portion of any debt service
payments properly allocable to interest on Company Debt for such calendar year.

     (pp) “Grant Agreement”: The Agreement to be entered into by the Company and each Grantee who
is granted PARs under this Plan. The basic form of such Grant Agreement is attached as Exhibit A,
but nothing shall prohibit the Committee from using any form of Grant Agreement determined
acceptable to the Committee for grants to any Grantee without regard to the terms of this basic
form of Grant Agreement.

     (qq) “Grant Date”: The date, as determined by the Committee, as of which PARs are granted to
a Grantee.

     (rr) “Grantee”: Each Employee who is granted PARs by the Committee pursuant to Section 2(c).

     (ss) “Grant Value”: The baseline price of an Equity Unit to be used in calculating the PAR
Value of a vested PAR. Unless otherwise determined by the Committee, and subject to any adjustment
made in accordance with this Plan, the Grant Value with respect to any grant of PARs will equal the
Value of an Equity Unit as of the Valuation Date immediately preceding the Grant Date of such PARs,
provided that the Grant Value of any PAR granted as of a date during 2006 will be $50.50.
Notwithstanding the foregoing, from and after the AH Sale Date, in addition to any further
adjustment made in accordance with this Plan, the Grant Value of any 2006/2007 PAR will be reduced
by $5.25, and the Grant Value of any 2008 PAR will be reduced by $9.l9.

     (tt) “Group”: As defined in Section 1(n)(i).

     (uu) “Investment Return”: As to the amount of any PAR Value credited to an Account upon the
occurrence of a Change in Control as provided under Section 5(a)(v), interest calculated at a per
annum rate that initially is equal to the Three-Month LIBOR Rate in effect upon the Exercise Date,
adjusted on the corresponding day (each such day, an “Adjustment Date”) of every third month
following the Exercise Date (each such month, an “Adjustment Month”) to equal the Three-Month LIBOR
Rate in effect on such Adjustment Date, without compounding. For purposes of the preceding
sentence, if an Adjustment Month does not contain

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a day corresponding to the applicable Exercise Date, the Adjustment Date for that Adjustment
Month will be the last day of such Adjustment Month.

     (vv) “Market Price”: With respect to any common stock as of any relevant date, the Market
Price will be determined as follows: (i) if the common stock is listed on any established stock
exchange (as determined by the Committee) or quoted on a national market system that reports sales
prices, including the National Market System of the Nasdaq Stock Market, the Market Price of a
share of the common stock will be the last sale price for such stock on such day (or, if no sales
were reported on such day, on the last preceding trading day on which a sale was reported) on such
exchange or system, as reported in The Wall Street Journal or such other source as the Committee
deems reliable; and (ii) if the common stock is quoted on the Nasdaq Stock Market (but not on the
Global Market System thereof) or is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Market Price of a share of the common stock will be the mean between
the high bid and high asked prices of the common stock, as reported in such source as the Committee
deems reliable.

     (ww) “MIP”: The Ascent Media Group, LLC Management Incentive Plan, as amended and restated as
of January 1, 2007 and as it may be further amended from time to time.

     (xx) “Misstatement Period”: As defined in Section 2(h).

     (yy) “Net Company Value”:

          (i) As of any Valuation Date, except as otherwise provided in Section 6(c) or Sections
1(yy)(ii) and (iii) below, “Net Company Value” will mean Company Enterprise Value as of such
Valuation Date, reduced without duplication by (i) Company Debt, (ii) the liquidation value of any
preferred equity interests reflected on the Balance Sheet as of such Valuation Date, (iii) the PAR
Liability determined based on the Plan Value as of such Valuation Date, calculated using Net
Company Value so determined and FCF Value as of such Valuation Date, and (iv) the amount, as
determined by the Committee in good faith, for which the Company and/or any Subsidiary of the
Company would be liable under any plan or arrangement (including any employment agreement) for
incentive compensation awards (excluding any such awards pursuant to this Plan or the MIP),
assuming full vesting of each such award and the occurrence of all events establishing the
participant’s entitlement to payment under such award as of the relevant Valuation Date.

          (ii) Notwithstanding the foregoing, if at any time the Committee concludes that there has
occurred an event or circumstance that reasonably could be expected to have an adverse effect on
the Net Company Value that is not, or will not be, reflected in the Net Company Value determined as
provided above, the Committee may direct that such adverse effect be taken into account in
determining the Net Company Value as of such Valuation Date. The amount of such reduction in Net
Company Value may be determined by any reasonable method.

          (iii) In the event of a Change in Control, the Net Company Value as of the date of such Change
in Control shall be determined by the Committee in good faith based on

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the fair market value of the Net Consideration received upon the Change in Control (the
“Change in Control Net Company Value”).

     (zz) “Net Consideration”: Proceeds from any Change in Control of the Company reduced by the
amount of any debt repayment relating to, and any costs and expenses incurred in connection with,
such transaction.

     (aaa) “NS Contracted EBITDA”: EBITDA of the Company and its consolidated Subsidiaries from
the provision of broadcast playback and distribution services to third parties, determined
utilizing the assumptions set forth in Part 1 of Schedule I.

     (bbb) “NS Contracted Free Cash Flow”: Projected NS Contracted EBITDA for all periods
subsequent to the relevant Valuation Date from contracts in effect on such Valuation Date, reduced
by projected Company Capital Expenditures allocable to such NS Contracted EBITDA, determined
utilizing the assumptions set forth in Part 2 of Schedule I.

     (ccc) “NS Non-Contracted EBITDA”: EBITDA of the Company and its consolidated Subsidiaries,
other than NS Contracted EBITDA, from the provision of all network services business conducted by
the Company and its consolidated Subsidiaries.

     (ddd) “Overstated Plan Value”: As defined in Section 2(h).

     (eee) “PAR”: A right to receive, subject to the terms and conditions of this Plan, a payment
in an amount equal to the PAR Value calculated with respect to an Equity Unit as of the relevant
date of determination and any AH Distributions to which the holder of such PAR may become entitled
in accordance with Section 5(c).

     (fff) “PAR Liability” means, as of any Valuation Date, an amount equal to the sum of (i) the
aggregate PAR Value of all PARs outstanding and vested as of such Valuation Date, plus (ii) the
aggregate amount of any AH Distributions determined with reference to all PARs outstanding and
vested as of such Valuation Date (including, with respect to the December 31, 2008 Valuation Date,
any AH Distributions determined with reference to any Grantee for whom the AH Determination Date
occurs between the AH Sale Date and such Valuation Date), to the extent such AH Distributions have
not been made as of such Valuation Date.

     (ggg) “PAR Value”: As of any date of determination, with respect to any PAR, the positive
difference, if any, obtained by deducting the Grant Value of such PAR from the Value of an Equity
Unit.

     (hhh) “Payment Date”: March 31, 2012.

     (iii) “Person”: Any individual or any corporation, partnership, trust, unincorporated
organization, association, limited liability company or other entity.

     (jjj) “Plan Expiration Date”: The expiration date of the Plan, which will be August 3, 2012,
or such other date as determined by the Committee, provided such other date is not more than ten
years from the date the Plan was originally adopted.

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     (kkk) “Plan Value”: As of any Valuation Date, the sum of Net Company Value plus FCF Value.

     (lll) “Separation from Service”: Separation from service, as defined in Code Section 409A,
with the Grantee’s Employer and all Persons with whom such Employer would be considered a single
employer under Code Section 414(b) or (c), applying the 80% threshold used in the Treasury
regulations promulgated under Code Section 414(b) or (c).

     (mmm) “Subsidiary”: With respect to any Person, any present or future subsidiary (as defined
in Section 424(f) of the Code) of such Person that is Controlled by such Person or any business
entity that is Controlled by such Person and in which such Person owns, directly or indirectly, 50%
or more of the voting, capital or profits interest. An entity shall be deemed a Subsidiary of a
Person for purposes of this definition only for such periods as the requisite ownership or Control
relationship is maintained.

     (nnn) “Termination”: With respect to any Grantee, the complete cessation of Grantee’s
employment with any and all Employers, whether by reason of the death, Disability, resignation or
removal of the Grantee or for any other reason. This definition also will apply to the term
“Terminated,” as the context requires.

     (ooo) “Termination for Cause”: With respect to any Grantee, the Termination of such Grantee
on account of “cause” as such term is defined in the Grant Agreement and, if no such definition is
included in the Grant Agreement, the definition of “cause” shall be that definition provided in an
effective employment agreement between the Grantee and any Employer and, if no such effective
employment agreement exists or no such definition is included in the employment agreement, “cause”
shall include without limitation (i) the Grantee’s insubordination, dishonesty, incompetence, act
of moral turpitude, or other misconduct of any kind; (ii) the willful and unreasonable refusal by
the Grantee to perform the Grantee’s duties or responsibilities for any reason other than illness
or incapacity; or (iii) the Grantee’s violation of any code of conduct, code of ethics, employment
policies, or provisions of an employee handbook or other published policy (whether disseminated in
writing to employees or via a website or other publication) of the Employer or any Affiliate which
is applicable to the Grantee, as in effect from time to time; provided, that, if such Termination
occurs within 12 months after a Change in Control, “cause” shall mean only a felony conviction for
fraud, misappropriation of Employer funds, or embezzlement. Notwithstanding the above, if evidence
of “cause” is acquired after any Termination that originally was not a Termination for Cause, the
Termination may, in the discretion of the Committee, be treated as a Termination for Cause for
purposes of this Plan; provided that, in such event, the forfeiture of benefits pursuant to Section
4(d)(ii) will be limited to amounts not yet paid to the Grantee as of the date the Committee
determines that a prior Termination was a Termination for Cause.

     (ppp) “Three-Month LIBOR Rate”: As of any date of determination, the rate of interest per
annum specified as the three-month LIBOR rate in The Wall Street Journal dated such date, provided
that, if The Wall Street Journal is not published for such day or no such rate is specified in The
Wall Street Journal on such day, the applicable rate shall be the rate specified on the last
preceding day for which The Wall Street Journal was published and such rate was specified.

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     (qqq) “Transferee Parent”: In the event of any transaction or series of related transactions
involving the direct or indirect transfer (or relinquishment of Control) by DHC of a Person or
Persons (a “Transferred Person”) that hold equity securities of the Company beneficially owned by
DHC, such Transferred Person or its successor in such transaction or any ultimate parent entity
(within the meaning of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) of
such Transferred Person or its successor if immediately after giving effect to such transaction or
the last transaction in such series, voting securities representing at least a majority of the
voting power of the outstanding voting securities of such Transferred Person, successor or ultimate
parent entity are beneficially owned by any combination of DHC, Persons who prior to such
transaction were beneficial owners of a majority of, or a majority of the voting power of, the
outstanding voting securities of DHC (or of any publicly traded class or series of voting
securities of DHC designed to track the economic performance of a specified group of assets or
businesses) or Persons who are Control Persons.

     (rrr) “Unforeseeable Emergency”: A severe financial hardship to the Grantee resulting from
(i) an illness or accident of the Grantee or the spouse or dependent of the Grantee; (ii) the loss
of the Grantee’s property due to casualty; or (iii) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the Grantee’s control, all as determined under
Code Section 409A.

     (sss) “Valuation Date”: December 31 of each of the calendar years 2006 through 2011.

     (ttt) “Valuation Report”: A written report setting forth the Company Enterprise Value, the
Net Company Value, the Plan Value and the Value of an Equity Unit as of the relevant Valuation
Date.

     (uuu) “Value of an Equity Unit”: As of any Valuation Date, Plan Value multiplied by .0000001.

     (vvv) “Vesting Date”: Each of (i) the day occurring during the third month following the
Grant Date that corresponds to the Grant Date (or, if there is no such day, the last day of such
month), and (ii) the corresponding day during each third month thereafter through the thirty-sixth
month following the Grant Date. For example, if the Grant Date is August 3, 2006, the third day of
each third month thereafter beginning with November, 2006 and ending with August, 2009 would be a
Vesting Date.

SECTION 2 PHANTOM APPRECIATION RIGHTS.

     (a) General: This Plan provides the terms and conditions for the grant of, and
payment with respect to, PARs to Grantees.

     (b) Number of PARs Available for Grant: The maximum number of PARs that may be
granted under this Plan is 500,000 PARs, subject to adjustment pursuant to Section 2(c)(viii).
PARs that are exercised and paid, and PARs that are forfeited or canceled or otherwise are not
paid, will be available for grant under the Plan.

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     (c) PARs Granted to Grantees:

          (i) The Committee will determine the criteria for eligibility for the award of PARs under this
Plan. Such criteria may be amended from time to time by the Committee.

          (ii) The Committee will determine the PARs to be granted, if any, to those Employees selected
by the Committee each year, in accordance with the criteria described in Section 2(c)(i). Such
PARs will be granted to such Employees on or as of a Grant Date. The Committee will give notice to
Grantees who have been awarded PARs within a reasonable time after such award. The Committee may
make any PARs granted under this Plan subject to any restrictions, limitations, terms or
conditions, in addition to those set forth herein, as it may determine and which are not
inconsistent with the specific terms of this Plan.

          (iii) No Employee will have any right to receive any PARs in any year, irrespective of the
grant of any PARs to such Employee in any past or succeeding year or the grant of any PARs to any
other Employee in such year or any other year.

          (iv) Each grant of PARs to a Grantee will be made pursuant to a Grant Agreement executed by
the Grantee and the Company, which Grant Agreement will specify the number of PARs granted to such
Grantee, the Grant Date, the Grant Value, the PAR Expiration Date, and such other information as
the Committee may prescribe. Only PARs granted pursuant to a duly executed and approved Grant
Agreement, the form of which has been approved by the Committee, will be considered validly granted
under this Plan. The initial form of Grant Agreement approved by the Committee is attached as
Exhibit A.

          (v) Only vested PARs will entitle a Grantee to receive payments under this Plan. Vested PARs
will represent only the right to receive the payments provided for in Section 5 at the time and in
the amounts set forth in this Plan and subject to the terms and conditions of this Plan, and
neither the existence of this Plan nor the grant or holding of any PARs will result in any Grantee,
Beneficiary or other Person being considered as or possessing any of the rights of a shareholder or
member of the Company or possessing any other rights or claims against the Company, any Employer,
any Affiliate of the Company or any Employer, or any successor of any such Person. No Employee or
other Person will have any claim or right to be granted PARs under this Plan.

          (vi) The grant of a PAR and the Company’s payment under any PAR are expressly conditioned on
the requirement that all actions necessary to ensure compliance with all applicable state and local
securities laws have been taken, as determined by the Company.

          (vii) The grant of a PAR and the Company’s payment under a PAR are expressly conditioned upon
the satisfaction of all applicable federal, state and local income and other tax withholding
requirements, as determined by the Company.

          (viii) If the Committee determines, in its sole discretion, that any distribution,
reorganization, split-up, spin-off, combination, exchange of ownership interests,

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dividend, contribution, disposition or acquisition (either of equity or assets), warrants or
rights offering to purchase interests in the Company or any Employer, other similar event
(including mergers, consolidations, initial public offerings, and Changes in Control), or other
extraordinary event affects the PARs authorized and granted under this Plan such that an adjustment
in such PARs is required in order to preserve the level of benefits or potential benefits (without
enlargement or dilution of such benefits) intended to accrue to the Grantees under this Plan, then
the Committee, in its sole discretion, shall make such adjustments in the PARs (including increases
or decreases to the Grant Value of PARs and increases or decreases to the number of PARs granted)
and/or the terms of this Plan relating to the valuation of a PAR in such manner as the Committee,
in its sole discretion, deems appropriate and equitable. The Committee may make any such
adjustment for all Grantees and all PARs, or the Committee, in its discretion, may make such
adjustments only for such Grantees or such PARs as it deems appropriate. Notwithstanding the
foregoing, the Committee shall make appropriate adjustments to the Grant Value of outstanding PARs
to reflect the effect of (A) any contribution of cash or other assets to the Company, directly or
indirectly, by any member of the Company to effect a material acquisition of assets by the Company
or any of its consolidated Subsidiaries, or (B) any distribution of cash or other assets, directly
or indirectly, to any member of the Company, which cash or other assets were generated by a
material disposition of assets by the Company or any of its consolidated Subsidiaries.

          (ix) The Committee may designate whether any PAR being granted to any Grantee is intended to
constitute “performance-based compensation” as that term is used in Code Section 162(m). Any such
PAR grants designated as intended to be “performance-based compensation” shall be conditioned on
the achievement of one or more performance measures, which shall be set in advance by the
Committee. For PAR grants intended to be “performance-based compensation,” the grant of the PARs
and the establishment of the performance measures shall be made during the period required under
Code Section 162(m).

     (d) Grantee’s Agreement Not to Compete: In consideration of the grant of PARs, each
Grantee will be deemed to have agreed that, while in the employ of any of the Employers, the
Grantee will not, directly or indirectly, as principal or agent, or in any other capacity, own,
manage, operate, participate in, or be employed by or otherwise be interested in, or connected in
any manner with any Person that competes with the business of the Company and its Subsidiaries
within the United States or within the United Kingdom, as such business is conducted while the
Grantee is employed by any Employer. Nothing contained herein shall be construed as denying the
Grantee the right to own securities of any such Person, so long as such securities are listed on a
national securities exchange or quoted on the Nasdaq Stock Market, to the extent of an aggregate of
5% of the outstanding shares of such securities.

     (e) Grantee’s Agreement to Keep Information Confidential: In consideration of the
grant of PARs, each Grantee will be deemed to have agreed that, while in the employ of any of the
Employers and thereafter, the Grantee will not, other than in the performance of his or her duties
as an employee of any Employer, directly or indirectly make use of, or divulge to any Person, and
the Grantee will use his or her best efforts to prevent the publication or disclosure of, any
confidential or proprietary information concerning the business, accounts or finances of, or any of
the methods of doing business used by the Company or any Employer or of the dealings, transactions,
or affairs of the Company, any Employer, or any of their customers which have or

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which may have come to such Grantee’s knowledge during his or her employment with any of the
Employers, except as may be required by law.

     (f) Grantee’s Agreement Regarding Non-Solicitation: In consideration of the grant of
PARs, each Grantee will be deemed to have agreed that, while in the employ of any of the Employers
and for a period of one year thereafter, the Grantee will not solicit, directly or indirectly, or
cause or permit others to solicit, directly or indirectly, any Current Employee to leave employment
with the Company or any Affiliate of the Company, including directly or indirectly: (i) requesting
that a Current Employee change employment, (ii) informing a Current Employee that an opening exists
elsewhere, (iii) assisting a Current Employee in finding employment elsewhere, (iv) inquiring if a
Current Employee “knows of anyone who might be interested” in a position elsewhere, (v) inquiring
if a Current Employee might have an interest in employment elsewhere, (vi) informing others of the
name or status of, or other information about, a Current Employee, or (vii) any other similar
conduct, the effect of which is that a Current Employee is induced to leave the employment of the
Company or any of the Company’s Affiliates.

     (g) Remedies for Violation of Sections 2(d), 2(e) and 2(f). Each Grantee, by
acceptance of a grant of a PAR, will be deemed to have agreed that: (i) the Company and the other
Employers will be irreparably injured in the event of a breach by the Grantee of any of his or her
obligations under Section 2(d), 2(e) or 2(f); (ii) in the event of a breach by the Grantee under
Section 2(d), 2(e) or 2(f), the Grantee will repay to the Company any and all amounts received by
the Grantee under this Plan (whether such payments were received prior or subsequent to such
breach) together with interest from the date of such payment to the date reimbursement is made at
the rate per annum equal to the prime rate of interest charged by the bank designated by the
Committee plus 5% or, if lower, the maximum rate permitted by law, and the Grantee will forfeit any
and all vested and unvested PARs and any Account he or she may have under this Plan, and the
Grantee will not be entitled to any further payment or right under this Plan; (iii) because
monetary damages will not be an adequate remedy for any such breach, each of the Company and the
other Employers will also be entitled to injunctive relief, in addition to any other remedy which
it may have, in the event of any such breach; and (iv) the existence of any unrelated claims which
the Grantee may have against the Company or any other Employer, whether under this Plan or
otherwise, will not be a defense to the enforcement by the Company or any other Employer of any of
their rights under Sections 2(d), 2(e) or 2(f). The covenants of the Grantee contained in Sections
2(d), 2(e) and 2(f) are in addition to, and not in lieu of, any obligations which the Grantee may
have with respect to the subject matter of such Sections, whether by contract, as a matter of law
or otherwise, and such covenants and their enforceability will survive any Termination of the
employment of the Grantee and any investigation made with respect to the breach thereof by the
Company or any other Employer.

     (h) Forfeiture for Misconduct and Repayment of Certain Amounts. This Section 2(h)
will apply to a Grantee who is the Chief Executive Officer or the Chief Financial Officer of the
Company (or a Grantee acting in a capacity similar to either of those positions) and to such other
Grantees as the Committee may designate. If (i) a material restatement of any consolidated
financial statement of DHC and its consolidated subsidiaries (including the Company) is required
and, in the reasonable judgment of the Committee, (A) such restatement is due to material
noncompliance with any financial reporting requirement under applicable

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securities laws, and (B) such noncompliance is a result of misconduct by or on the part of the
Grantee; or (ii) in the reasonable judgment of the Committee, the Plan Value as of any Valuation
Date is higher than would have been the case had one or more facts or circumstances been disclosed
to the Committee (“Overstated Plan Value”) and the omission of such disclosure is a result of
misconduct by or on the part of the Grantee, the Grantee will repay to the Company Forfeitable
Benefits received by the Grantee in such amount as the Committee may reasonably determine, taking
into account any factors deemed relevant by the Committee. “Forfeitable Benefits” means any and
all cash and/or shares received by the Grantee (i) upon the deemed exercise during the Misstatement
Period of any PARs held by the Grantee, (ii) upon the payment of any AH Distribution during the
Misstatement Period, or (iii) upon the deemed exercise of any PARs held by the Grantee if the PAR
Value of such PARs was determined using the Overstated Plan Value. “Misstatement Period” means the
12-month period beginning on the date of the first public issuance or the filing with the
Securities and Exchange Commission, whichever occurs earlier, of the financial statement requiring
restatement. To the extent applicable, each Grant Agreement will include language substantially
to the effect of the forgoing with such modifications as the Committee may approve either generally
or as applied to any one or more Grantees, it being acknowledged that a Grant Agreement may include
language describing, for example, in what circumstances a Grantee will be deemed to be involved in
or responsible for misconduct.

     (i) Reasonableness of Covenants: In consideration of the grant of PARs, each Grantee
will be deemed to have agreed that: (i) the covenants of the Grantee set forth in this Section 2
are reasonable and necessary to protect the trade secrets and other business interests of the
Company and the other Employers; (ii) without limiting the generality of Section 7(k) of this Plan,
if, contrary to the purpose and intent of the Company, the other Employers and the Grantee, any
such covenant is finally determined by arbitration or judicial proceeding to be unenforceable in
any respect as written, such provision will be deemed to have been automatically modified to the
minimum extent necessary to make it enforceable and the provision will be enforced as so modified;
(iii) the covenants set forth in this Section 2 are intended to be a series of separate covenants
applicable independently in each state and to be enforceable in each state to the maximum extent
permitted by the laws of that state; and (iv) the unenforceability or invalidity of any such
covenant, and any limitation on the enforceability of any such covenant, in any state shall not
affect the enforceability or validity of such covenant in any other state.

SECTION 3 NATURE OF INTERESTS: ACCOUNTING:

     (a) Nature of Interests: The Plan will be entirely unfunded, and the Company’s
obligation to any Grantee hereunder shall constitute an unfunded and unsecured promise to make
payments in accordance with the terms of this Plan. Nothing contained in, and no action taken
pursuant to, this Plan will create or be construed to create a trust or funded benefit of any kind
in favor of any Person, or a partnership or fiduciary relationship between or among the Company,
any Employer, the Committee, any Grantee, any designated Beneficiary or any other Person. Title to
and beneficial ownership of all assets, if any, whether cash or investments, that the Company may
designate to pay the vested PARs granted under this Plan will at all times remain in the Company’s
general asset account, and neither any Grantee nor any other Person will have any right or property
interest whatsoever in any such asset of the Company until such PARs are paid to the Grantee in
accordance with this Plan. The Company

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will not be required to pre-fund its obligations under this Plan in any manner, whether by
purchase of insurance contracts, contributions to a trust fund, deposits in an escrow account or
otherwise. If the Company in its discretion does purchase any such contract or deposit funds in
any such fund or account, no Grantee or Beneficiary will have any right or interest in or to such
contract, trust or account, and such Grantee or Beneficiary will have only the rights of a general
unsecured creditor with respect to the Company’s unsecured promise to pay the Grantee’s Account or
any AH Distributions to which the Grantee may become entitled in accordance with this Plan.

     (b) Account: A separate Account will be established and maintained for each Grantee
who is granted a PAR under this Plan. The Account will be credited with (i) the PAR Value of any
vested PARs deemed exercised by the Grantee in accordance with Section 5, plus (ii) to the extent
provided in Section 5(a)(v), Investment Return calculated from the Exercise Date through the date
of payment of the Grantee’s Account in accordance with Section 5(b).

     (c) Plan Expenses and Allocation of Costs of PARs: Vested PARs granted to Grantees
under this Plan, and other expenses associated with the establishment, administration and
termination of this Plan, as determined by the Committee, will be paid by the Company in accordance
with the terms and conditions set forth herein and, if so determined by the Company, the costs of
such payments and expenses, or a portion thereof, will be charged by the Company to the Employers
under such method of allocation as the Company deems appropriate.

SECTION 4 VESTING:

     (a) Vesting: Except as otherwise provided by this Section 4, a Grantee’s interest in
PARs granted under this Plan is unvested and forfeitable at all times.

     (b) Vesting While in the Employ of an Employer:

          (i) Unless the Grant Agreement provides otherwise, a Grantee will become vested in one-twelfth
of the number of PARs granted to such Grantee on each Vesting Date relating to such PARs, provided
that the Grantee has been continuously employed on a full-time basis by the Company or an Employer
from the Grant Date through the applicable Vesting Date. Notwithstanding the preceding sentence,
the Committee may shorten the period for the vesting of any PARs granted to any Grantee under this
Plan.

          (ii) For purposes of vesting, credit for any absence by reason of the Grantee’s short-term
disability, layoff or any other reason may be granted by the Committee in writing.

          (iii) For purposes of vesting, (A) unless the Committee otherwise determines, a change of
employment from one Employer to a different Employer will not be a Termination (and such Grantee’s
employment will be deemed to be continuous and uninterrupted) if such change of employment was made
at the request or with the express consent of the Company, and (B) a change of employment that is
not made at the request or with the express consent of the Company will be deemed a Termination,
unless the Committee otherwise determines.

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     (c) 100% Vesting Upon Death or Disability: A Grantee who dies or becomes Disabled
while employed with an Employer will be 100% vested in his or her PARs as of the date of such death
or Disability.

     (d) Termination:

          (i) Unless the Grant Agreement provides otherwise, and except as provided in Section 4(c)
above, in the event of the Termination of a Grantee prior to such Grantee becoming 100% vested in
his or her PARs, whether such Termination is initiated by the Grantee or the Employer, any unvested
PARs held by such Grantee on the date of such Termination will be canceled, such Grantee will have
no further right or interest under this Plan with respect to such canceled PARs, and none of the
Company or any of the Employers will have any further obligation with respect thereto. The
percentage of vesting in any PARs held by a Grantee on his or her Termination date will not be
increased by reason of any service performed by the Grantee after the date of any subsequent
reemployment of the Grantee by any Employer.

          (ii) In the event of the Termination for Cause of a Grantee, all PARs held by such Grantee,
whether vested or unvested, will be canceled and any Account held by the Grantee shall be
forfeited, such Grantee will have no further right or interest under this Plan with respect to any
such canceled PARs or such Account, and none of the Company or any of the Employers will have any
further obligation with respect thereto.

     (e) 100% Vesting Upon Change in Control: Upon the occurrence of a Change in Control
while the Grantee is a full-time Employee of any Employer, the Grantee will become 100% vested in
his or her PARs as of the date on which such Change in Control occurs.

SECTION 5 EXERCISE OF PARS; PAYMENT OF ACCOUNTS AND AH  DISTRIBUTIONS:

     (a) Exercise of PARs and Credit of PAR Value to Account:

          (i) The deemed exercise of a vested PAR results in the exchange of the vested PAR for a credit
to the Account of the Grantee equal to the PAR Value of the deemed exercised PAR. Payment of the
Grantee’s Account will be made as described in Section 5(b) below.

          (ii) Except as otherwise provided in the Grant Agreement, a Grantee who has not been
Terminated as of the Payment Date will be deemed to have exercised all of his or her vested PARs on
the Payment Date provided such PARs were not theretofore deemed exercised pursuant to Section
5(a)(v) below. The PAR Value of such deemed exercised PARs will be determined utilizing the Plan
Value as of the Valuation Date immediately preceding the Payment Date. The PAR Value of the PARs
deemed to be exercised will be credited to the Grantee’s Account and will be paid only as provided
in Section 5(b).

          (iii) Upon the Termination of a Grantee prior to the Payment Date for any reason other than a
Termination for Cause, such Grantee will be deemed to have exercised all of his or her vested PARs
on the date of such Termination provided such PARs were not theretofore deemed exercised pursuant
to Section 5(a)(v) below. The PAR Value of such

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deemed exercised PARs will be determined utilizing the Plan Value as of the Valuation Date
immediately preceding the date of Termination (or, if the date of Termination coincides with a
Valuation Date, such Valuation Date). The PAR Value of the deemed exercised PARs will be credited
to the Grantee’s Account and will be paid only as provided in Section 5(b).

          (iv) A Termination for Cause results in complete forfeiture of all vested and unvested PARs
and of the Grantee’s entire Account under Section 4(d)(ii) so that no exercise of such PARs will be
deemed to occur and no payment will be made under this Plan to or on behalf of any Grantee who is
Terminated for Cause.

          (v) Upon the occurrence of a Change in Control prior to the Payment Date, a Grantee who has
not been Terminated as of the date on which such Change in Control occurs will be deemed to have
exercised any vested PARs held by him or her as of the date on which such Change in Control occurs.
The PAR Value of such deemed exercised PARs will be determined utilizing the Change in Control Net
Company Value. The PAR Value of the PARs deemed to be exercised will be credited to the Grantee’s
Account, together with Investment Return calculated on such PAR Value from the date of such Change
in Control through the date of payment of Grantee’s Account in accordance with Section 5(b), will
be paid only as provided in Section 5(b).

     (b) Payment of Account: Except as otherwise provided in the Grant Agreement, the
entire balance of the Grantee’s Account will be paid to the Grantee on the earlier to occur of the
following:

          (i) The Payment Date (or, at the sole election of the Committee, on any day within 90 days
following the Payment Date); and

          (ii) The six-month anniversary of the date of the Grantee’s Separation from Service or, if
such date is not a business day, on the first business day thereafter.

     (c) Payment of AH Distributions: In addition to payment of such Grantee’s Account
pursuant to Section 5(b) above, each Grantee will be paid the following amount(s) (each, an “AH
Distribution”) at the time(s) indicated:

          (i) On the AH Distribution Date that occurs in February, 2009, an amount equal to the sum of
(A) the number of 2006/2007 PARs held by such Grantee that were vested as of the AH Determination
Date, multiplied by $8.36, plus (B) the number of 2008 PARs held by such Grantee that were vested
as of the AH Determination Date, multiplied by (2) $4.42; and

          (ii) On each AH Distribution Date that occurs after February, 2009, an amount equal to the sum
of (A) the number of 2006/2007 PARs held by such Grantee that vested on or prior to such AH
Distribution Date and subsequent to the immediately preceding AH Distribution Date (and not
thereafter canceled and forfeited pursuant to Section 4(d)(ii) above), multiplied by $8.36, plus
(B) the number of 2008 PARs held by such Grantee that vested on or prior to such AH Distribution
Date and subsequent to the immediately preceding AH

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Distribution Date (and not thereafter canceled and forfeited pursuant to Section 4(d)(ii)
above), multiplied by $4.42.

     (d) Other Payment Provisions:

          (i) To the extent that the Company reasonably anticipates that, with respect to any payment
scheduled to be made to a Grantee from the Plan during a taxable year, the Company’s deduction for
such payment would be barred by the application of Code Section 162(m), the Company may elect to
delay such payment until either (A) the first taxable year of the Grantee in which the Company
reasonably anticipates, or should reasonably anticipate, that if such payment is made, the
deduction will not be so barred, or (B) the period beginning with the Grantee’s Separation from
Service and ending on the later of the last day of the taxable year of the Company in which the
Grantee’s Separation from Service occurs or the 15th day of the third month following such
Separation from Service; provided that any distribution under this Section 5(b)(ii) made upon a
Grantee’s Separation from Service, including a Separation from Service that results in Code Section
162(m) becoming inapplicable to a Grantee, must comply with the provisions of Section 5(d)(ii)
below if the Grantee is a “specified employee” (as described in Section 5(d)(ii)).

          (ii) Notwithstanding any provision of this Plan or any Grant Agreement to the contrary, to the
extent required under Code Section 409A, any amount that otherwise would be payable to a Grantee
who is a “specified employee,” as determined by the Company in accordance with Code Section 409A,
during the six-month period following such Grantee’s Separation from Service shall be suspended
until the lapse of such six-month period (or, if earlier, the date of death of the Grantee). The
amount that otherwise would be payable to such Grantee during such period of suspension, unadjusted
for any interest on such suspended amount, shall be paid in a single payment on the day following
the end of such six-month period or within 30 days following the death of the Grantee during such
six-month period, provided that the death of the Grantee during such six-month period shall not
cause the acceleration of any amount that otherwise would be payable on any date during such
six-month period following the date of the Grantee’s death.

          (iii) Except as otherwise provided in any written agreement to which the Company is a party,
the Company will have sole liability to Grantees in respect of the payment of their Accounts and
any AH Distributions payable under this Section 5.

          (iv) The Grantee may designate a Beneficiary for the Grantee’s Account and any AH
Distributions to which the Grantee may become entitled, and may change or revoke a Beneficiary
designation at any time by filing a new designation or notice of revocation with the Committee. No
notice to, or consent by, any Beneficiary will be required to effect any change or revocation of
designation. If a Grantee does not designate a Beneficiary, the Grantee’s Beneficiary will be
deemed to be the Grantee’s estate and payments required hereunder will be made accordingly.

          (v) Notwithstanding the above, payment of a Grantee’s Account and any AH Distributions to
which the Grantee has become entitled will be accelerated upon the following events:

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                    (A) To make payment to an alternate payee upon the receipt of a qualified domestic relations
order;

                    (B) Upon an Unforeseeable Emergency, at the request of the Grantee; provided that the amount
distributed for a Unforeseeable Emergency does not exceed the amount necessary to satisfy such
Unforeseeable Emergency, plus amounts necessary to pay any taxes reasonably anticipated as a result
of the distribution; or

                    (C) In the event this Plan fails to meet the requirements of Code Section 409A with respect to
such Grantee, but only to the extent of the amount included in the Grantee’s income as a result of
such failure.

     (e) Form of Payment: Any payment of an Account or an AH Distribution will be subject
to applicable withholding for federal, state and local taxes. At the discretion of the Committee,
payment of Accounts and/or AH Distributions may be made in:

          (i) Cash;

          (ii) Whole shares of any class or series of common stock of the Company (if the Company is a
corporation) or any Affiliate of the Company designated by the Committee; provided that such class
or series is registered under Section 12 or 15(d) of the Exchange Act and there is an established
market for such stock. For purposes of this Section 5(d)(ii), an established market will exist
with respect to any stock if sale prices or bid and asked prices for such stock are reported on a
national securities exchange or on the Nasdaq Stock Market.

                    (A) For purposes of determining the number of shares of common stock to be delivered under
this Section, such shares will be deemed to have a per share value equal to the Market Price of
such common stock on the third trading day preceding the date shares are to be delivered to a
Grantee.

                    (B) Any shares of common stock made available for payment under this Section will not be paid
until the Committee is satisfied that the delivery of such shares will not violate the registration
requirements of any applicable securities laws and that the recipient of such shares will have the
right to transfer such shares without any material restriction pursuant to such securities laws.
No fractional shares of stock will be issued or paid under this Section. To the extent any portion
of an Account or an AH Distribution is not paid in the form of stock under this Section, such
portion of such Account or AH Distribution, if any, will be paid in cash.

     (f) Creation of “Rabbi Trust”: If a Change in Control occurs prior to October 1,
2011, the Company shall, upon the occurrence of such Change in Control, establish a “rabbi trust”
or other similar vehicle pursuant to then-applicable tax laws (provided that any such arrangement
shall not change the status of this Plan as an unfunded nonqualified deferred compensation
arrangement), and the Company shall deposit into such trust or other vehicle an amount equal to the
benefits under the Plan that are vested and accrued as of the date of such Change in Control.

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     (g) Payment to Minors or Incapacitated Persons: If the Committee determines that any
Person to whom any payment is to be made under this Plan is unable to care for his or her affairs
because of illness or accident, or is a minor, any payment due will be paid to the duly appointed
guardian or other legal representative of such Person. Payment will be made under this Section
5(g) only after the receipt by the Committee of documentation satisfactory to the Committee
evidencing such legal status.

     (h) Expiration of PARs: PARs granted under this Plan to any Grantee will terminate,
and the Company will have no further obligation to such Grantee, upon the earlier to occur of (i)
the exercise or deemed exercise of such PARs and the payment of the Grantee’s Account and AH
Distributions under this Section 5; or (ii) the cancellation or forfeiture of such PARs under the
terms of this Plan.

SECTION 6 VALUATION:

     (a) General: Solely for purposes of this Plan, the Company Enterprise Value, Net
Company Value, Plan Value and the Value of an Equity Unit shall be determined in good faith by the
Committee as promptly as practicable after each Valuation Date.

     (b) Valuation Report: The Valuation Report will be completed and provided to all
Grantees within a reasonable time after each Valuation Date. The Company anticipates that it will
complete the Valuation Report within approximately 90 days after each Valuation Date.

     (c) Adjustment to Value Determinations Upon Corporate Events: Notwithstanding any
other provision of this Plan, if at any time the Company is a corporation and if the common stock
of the Company becomes publicly traded on or after a Valuation Date and prior to the delivery of
the Valuation Report for such Valuation Date, then the Net Company Value for such Valuation Date
shall be determined by the Committee in good faith, taking into consideration the Market Price for
the Company stock on the date the Company stock becomes publicly traded.

SECTION 7 MISCELLANEOUS:

     (a) Modification and Termination of Plan:

          (i) To the extent permitted under Code Section 409A, and subject to satisfaction of all
requirements thereof, the Company has the discretion to deem all outstanding vested PARs exercised
and to terminate this Plan pursuant to irrevocable action taken by the Company within 30 days
preceding or 12 months following a Change in Control (including a Change in Control of a
corporation with respect to which the Company is a disregarded entity for federal income tax
purposes, treating such corporation as the Company for purposes of determining whether a Change in
Control has occurred), provided that all other agreements, methods, programs, and other
arrangements required under Code Section 409A to be terminated (“Aggregated Arrangements”) also are
terminated and the Company pays all Accounts and AH Distributions to Grantees within 12 months
following such Change in Control and all amounts due under such Aggregated Arrangements to
participants therein within 12 months of the date on

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which all necessary action is irrevocably taken to terminate and liquidate the Aggregated
Arrangements. In such case, the PAR Value of such vested PARs will be determined utilizing Change
in Control Net Company Value.

          (ii) Other than as set forth in Section 7(a)(i) above, the Company has the discretion to deem
all outstanding vested PARs exercised and to terminate and liquidate this Plan at any time to the
extent permitted under, and subject to satisfaction of all requirements of, Code Section 409A. In
such case, (A) the PAR Value of such vested PARs will be determined utilizing Plan Value as of (1)
the Valuation Date immediately preceding the date of Plan termination (or if such Plan termination
occurs on a Valuation Date, the Valuation Date coinciding with the date of such Plan termination),
if such termination occurs within 12 months of a corporate dissolution taxed under Code Section 331
or with the approval of a bankruptcy court pursuant to USC §503(b)(1)(A), or (2) the Valuation Date
immediately preceding the date the Company takes all necessary action to irrevocably terminate and
liquidate the Plan (or if such action is taken on a Valuation Date, the Valuation Date coinciding
with the date of such action) if such Plan termination occurs at any other time permitted under
Code Section 409A, and (B) payments in liquidation of the Plan shall be made as soon as
administratively practicable following the earliest date permitted under Code Section 409A for
making such payments.

          (iii) The Company reserves the right to amend or terminate this Plan, or to suspend the grant
of PARs under this Plan, at any time and from time to time in any manner it determines; provided
that payment from this Plan is permitted only under the express terms of this Plan and any Grant
Agreement.

          (iv) No PARs may be granted after the Plan Expiration Date. PARs that are outstanding on the
Plan Expiration Date will continue to be subject to the terms of this Plan through the PAR
Expiration Date. Upon termination of this Plan, all Accounts and AH Distributions will be paid in
compliance with the terms of this Plan and all unvested PARs will be canceled. Upon the payment of
Accounts and AH Distributions after any termination of this Plan, no Person will have any further
interest under this Plan and no Grantee or Beneficiary will be entitled to any further payment
under this Plan.

     (b) Interest in this Plan Nonassignable: No Grantee will have any right to sell,
assign, dispose of, transfer, convey or otherwise alienate (“Transfer”) any PAR granted under this
Plan or the right to receive payment for any vested PAR, other than by designation of a Beneficiary
under the applicable Grant Agreement or by will or the laws of descent and distribution, and all
PARs and the right to payment therefor (including any right the payment of an Account or any AH
Distributions to which a Grantee may be or become entitled) are expressly declared nonassignable
and nontransferable. Any purported Transfer in violation of this Section will be void and will be
given no effect by the Company or any other Employer.

     (c) Termination of Employment: Neither this Plan nor any action taken under this Plan
will be construed as giving any Grantee any right to be retained in the employ of any Employer, and
the right to dismiss any Grantee at any time with or without cause is specifically reserved to each
Employer, subject to the provisions of any employment agreement between the Grantee and the
Employer.

-21-

 

     (d) Authority to Interpret this Plan: The Committee will have the authority to
administer and interpret the provisions of this Plan and to establish rules and procedures for the
administration of the Plan, and the Committee’s determination will be binding and conclusive on all
parties. All interpretations, decisions and determinations required or permitted to be made or
taken by the Committee will be made or taken by the Committee in its discretion. All
interpretations, decisions and determinations taken by the Committee which are not inconsistent
with the terms of this Plan will be final, binding and conclusive on the Employers, Grantees,
Beneficiaries and all other Persons having dealings with this Plan.

     (e) Compliance With Code Section 409A: This Plan is intended to comply in all
respects with the provisions of Code Section 409A, any regulations promulgated under Code Section
409A, and any final guidance issued by the Internal Revenue Service relating to Code Section 409A
and shall be operated and interpreted in a manner consistent therewith. Without limiting the
generality of the foregoing, it is intended that the modifications to this Plan relating to the
making of AH Distributions comply in all respects with Notice 2007-86, Notice of Additional 2008
Transition Relief under Section 409A. As provided in such Notice, with respect to amendments to
change a time and form of payment under the Plan made on or after January 1, 2008 and on or before
December 31, 2008, the amendments shall apply only to amounts that would not otherwise be payable
in 2008 and shall not cause an amount to be paid in 2008 that would not otherwise be payable in
2008.

     (f) Effect of this Plan: This Plan will be binding upon and inure to the benefit of
the Employers, their successors, the Grantees and the Beneficiaries.

     (g) Applicable Law: This Plan will be construed in accordance with and governed by
the laws of the State of Delaware, without regard to principles of conflicts of laws.

     (h) Counterparts: This Plan may be executed in any number of counterparts, each of
which will be deemed to be an original instrument, but all of which taken together will constitute
but one instrument.

     (i) Complete Agreement: This Plan, along with any Grant Agreement entered into with a
Grantee, will constitute the entire understanding and agreement between the Company and such
Grantee with respect to the subject matter hereof. The provisions of this Plan will govern in the
event of any inconsistency between any Grant Agreement and this Plan, unless otherwise determined
by the Committee.

     (j) Waiver of Breach: The waiver by the Company of a breach or violation of any
provision of this Plan will not operate as, or be construed to be, a waiver of any subsequent
breach of the same or the provisions hereof.

     (k) Severability: If any provision of this Plan, or the application of such provision
to any Person or circumstance, is found by any court of competent jurisdiction to be unenforceable
for any reason, such provision may be modified or severed from this Plan to the extent necessary to
make such provision enforceable against such Person or in such circumstance. Neither the
unenforceability of such provision nor the modification or severance of such provision will affect
(i) the enforceability of any other provision of this Plan or (ii) the

-22-

 

enforceability of such provision against any Person or in any circumstance other than those
against or in which such provision is found to be unenforceable.

     (l) Headings: The headings of the Sections of this Plan are solely for convenience
and reference and will not limit or otherwise affect the meaning of any of the terms or provisions
of this Plan.

     (m) Terms: Terms used with initial capital letters will have the meanings specified,
applicable to both singular and plural forms, for all purposes of this Plan. All pronouns (and any
variation) will be deemed to refer to the masculine, feminine or neuter, as the identity of the
Person may require. The singular or plural includes the other, as the context requires or permits.
The word include (and any variation) is used in an illustrative sense rather than a limiting
sense. The word day means a calendar day, unless otherwise indicated.

     (n) Notices: All notices and other communications delivered pursuant to this Plan
will be in writing and will be deemed to have been duly given to a party when delivered in person
to such party (or, in the case of a corporate party, to the General Counsel thereof), or when
delivered prepaid by recognized overnight courier (as reflected in the records of such courier), on
the date sent by facsimile (with receipt confirmed), or three business days after such notice is
enclosed in a properly sealed envelope, certified or registered, and deposited (postage and
certification or registration prepaid) in a post office or collection facility regularly maintained
by the United States Postal Service and sent to the address set forth below:

          (i) If to the Company, to its primary office marked “Attention: General Counsel.”

          (ii) If to a Grantee, to the address maintained for such Grantee on the books and records of
the Employer of such Grantee.

          (iii) Any person may change the address(es) to which notices are required to be sent by giving
notice of such changes in the manner provided in this Section; provided that such notice will not
be effective until actual receipt by the addressee.

     IN WITNESS WHEREOF, this Plan is approved and executed by the individual authorized by the
Company.

	 	 	 	 	 
	 	ASCENT MEDIA GROUP, LLC

 	 
	 	By:  	/s/  William R. Fitzgerald
 	 
	 	 	 	 
	 	Title:  	Chairman 	 
	 	 	 	 
	 	Date:  	September 9, 2008 	 

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SCHEDULE I

Major Assumptions for Determining 

NS Contracted EBITDA, NS Contracted Free Cash Flow and DCF Component

Part 1 — Assumptions for Calculation of NS Contracted EBITDA:

	 	1.	 	Includes all playout and distribution contracts with terms greater than 1 year and
annual revenues greater than $100K
	 
	 	2.	 	Capex for qualifying contracts is assumed to be approved and incurred in the same year
	 
	 	3.	 	If management believes there is a reasonable likelihood the contract will be renewed,
the contract is included in the “renewal” category
	 
	 	4.	 	Renewals are treated as follows:

	 	(a)	 	All contracts in the renewal category have two renewals
	 
	 	(b)	 	All renewals are for the same term as the current deal
	 
	 	(c)	 	A revenue escalator of 3% is used for each renewal with margins staying flat,
with the revenue escalator applied against the new revenue rate of the renewed contract
	 
	 	(d)	 	For all contracts other than large Capex projects:

	 	(i)	 	Capex for contract renewals is the same as for the original,
underlying contract (except for large Capex projects, such as A&E, Discovery UK
and Discovery Asia)
	 
	 	(ii)	 	All first renewals (other than large Capex projects such as A&E,
Discovery UK and Discovery Asia), are calculated using 80% of the revenue, EBITDA
and Capex amounts calculated pursuant to items 4(c) and 4(d)(i) above on a year
by year basis
	 
	 	(iii)	 	All second renewals of contracts (other than large Capex projects
such as A&E, Discovery UK and Discovery Asia), are calculated using 50% of the
revenue, EBITDA and Capex amounts calculated pursuant to items 4(c) and 4(d)(i)
above on a year by year basis

	 	(e)	 	For large Capex projects (such as A&E, Discovery UK and Discovery Asia):

	 	(i)	 	Capex for contract renewals on large Capex projects (such as A&E,
Discovery UK and Discovery Asia) is estimated to be an amount equal to 50% of the
Capex under the original contract
	 
	 	(ii)	 	Revenue and EBITDA for contract renewals on large Capex projects
(such as A&E, Discovery UK and Discovery Asia) is calculated assuming the same
IRR’s as the original deal with 50% of the Capex

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SCHEDULE I

(cont’d)

Major Assumptions for Determining 

NS Contracted EBITDA, NS Contracted Free Cash Flow and DCF Component

Part 2 — Assumptions for Calculation of NS Contracted Free Cash Flow:

	 	1.	 	Revenue, EBITDA and Capex from above contracts is adjusted to deduct for Overhead
	 
	 	2.	 	Overhead is defined as: “Content overhead”, “Network administration” and “Corporate
overhead”
	 
	 	3.	 	“Content overhead” is 17% of contractual revenues, or the appropriate prorata share at
the time of calculation.
	 
	 	4.	 	“Network administration” is contractual revenues as a percentage of total network
revenues multiplied by the Network admin budget
	 
	 	5.	 	“Corporate overhead” is contractual revenues as a percentage of total Ascent Media
Group revenues multiplied by the worldwide corporate budgeted expenses
	 
	 	6.	 	NPV calculation extends through end of all second renewals
	 
	 	7.	 	Discount rate is 10%
	 
	 	8.	 	All overhead (content, network and corporate) are fixed as a percentage of contractual
revenues in base year and continued over the NPV term

-25-

 

EXHIBIT A

PAR GRANT AGREEMENT

     This PAR Grant Agreement (this “Agreement”) is made and entered into between Ascent Media
Group, LLC, a Delaware corporation (“the Company”), and                      (“Grantee”) as of this ___
day of                      200_.

1. Definitions. All capitalized terms not otherwise defined in this Agreement will have
the meanings given such terms in the Ascent Media Group, LLC 2006 Long-Term Incentive Plan (As
Amended and Restated Effective September 9, 2008 (the “Plan”), a copy of which is attached hereto
as Exhibit I and is by this reference made a part hereof.

2. Grant of PARs. The Grantee is hereby granted ___PARs under the Plan. This Grant is
conditioned upon the Grantee’s acceptance of all of the terms and conditions of the Plan. The
grant, vesting, exercise and all other matters affecting or otherwise relevant to such PARs will be
governed by the Plan, and the Grantee agrees that the Grantee will be bound by all of the terms and
conditions of the Plan (including the non-competition, confidentiality and non-solicitation
provisions of Section 2 of the Plan).

3. Grant Date. The Grant Date of the PARs granted under this Agreement is                     ,
200_.

4. Grant Value. The Grant Value of each PAR granted under this Agreement is
$                    .

5. Vesting. The Grantee will become vested in the PARs granted above in accordance with
the provisions of Section 4(b)(i) of the Plan.

6. [Optional Section to be customized for application to each Grantee: Application of
Forfeiture Provisions for Misconduct. The Grantee is a Grantee whose PARs will be subject to
the Forfeiture for Misconduct provisions set forth in this Section. If (i) a material
restatement of any consolidated financial statement of DHC and its consolidated subsidiaries
(including the Company) is required and, in the reasonable judgment of the Committee, (A) such
restatement is due to material noncompliance with any financial reporting requirement under
applicable securities laws, and (B) such noncompliance is a result of misconduct by or on the part
of the Grantee; or (ii) in the reasonable judgment of the Committee, the Plan Value as of any
Valuation Date or Material Disposition Valuation Date is higher than would have been the case had
one or more facts or circumstances been disclosed to the Committee (“Overstated Plan Value”) and
the omission of such disclosure is a result of misconduct by or on the part of the Grantee, the
Grantee will repay to the Company Forfeitable Benefits received by the Grantee in such amount as
the Committee may reasonably determine, taking into account any factors deemed relevant by the
Committee. “Forfeitable Benefits” means any and all cash and/or shares received by the Grantee (i)
upon the deemed exercise during the Misstatement Period of any PARs held by the Grantee, or (ii)
upon the deemed exercise of any PARs held by the Grantee if the PAR Value of such PARs was
determined using the Overstated Plan Value. “Misstatement Period” means the

-1-

 

12-month period beginning on the date of the first public issuance or the filing with the
Securities and Exchange Commission, whichever occurs earlier, of the financial statement requiring
restatement. Additional modifications:                                         .]

7. Beneficiary Designation. In the event of the death of the Grantee, the Grantee
designates the Person or Persons named on Exhibit II as his or her Beneficiary. The Grantee may
change his or her Beneficiary designation only by giving written notice of such change to the
Company in accordance with the terms of the Plan.

8. Grantee Representations. The Grantee represents as follows:

     a. The Grantee has such knowledge and experience in financial and business matters that the
Grantee is capable of evaluating the merits of entering into this Agreement.

     b. The Grantee has been provided a copy of the Plan, has had the opportunity to review the
Plan and ask the Company and the Company questions regarding the Plan, understands that the grant
of PARs under this Agreement is subject to the terms of the Plan, and understands the terms of the
Plan, including the provisions relating to the grant, vesting, exercise, expiration, cancellation
and forfeiture of PARs.

     c. By virtue of the Grantee’s position with the Company or based on information furnished by
the Company or the Grantee is familiar with the business, earnings, condition, properties and
business prospects of the Company and the Employers.

     d. The Grantee understands and acknowledges that (i) the obligations of the Company under this
Agreement are not funded in any way, and that the Grantee will have rights only of a general
creditor based solely on the Company’s unfunded and unsecured promise to make payments under and in
accordance with the Plan; (ii) because this Plan does not involve an equity investment in the
Company or the Employers, the Grantee has a right to benefit from further appreciation in the
Company without risking any capital and without the risk of a beneficial owner that the value of
the Company may decline substantially; and (iii) the grant of PARs under this Agreement is not an
assurance of continued employment by the Company or any Employer.

     e. The Grantee understands that the Company is entering into this Agreement in reliance on the
agreements, representations and acknowledgments of the Grantee set forth in this Agreement.

     f. The representations of the Grantee set forth in this Section will survive the expiration of
this Agreement.

9. Arbitration. If any controversy, claim or dispute arises out of or in any way relates
to the Plan or this Agreement, the alleged breach thereof or the Grantee’s employment with the
Company or any Employer or termination therefrom, including without limitation, any and all claims
for employment discrimination or harassment, civil tort and any other employment laws, excepting
only claims which may not, by statute, be arbitrated, each of the Company (and its directors,
officers, employees or agents) and Grantee agree to submit any such dispute

-2-

 

exclusively to binding arbitration. Each of the Company and Grantee acknowledge that they are
relinquishing their right to a jury trial in civil court. The parties agree that arbitration is
the exclusive remedy for all disputes arising out of or related to the Grantee’s employment with
the Company or any other Employer. The arbitration shall be administered by JAMS in accordance
with the Employment Arbitration Rules & Procedures of JAMS then in effect and subject to JAMS
Policy on Employment Arbitration Minimum Standards. Arbitration shall be commenced and heard in
Los Angeles County, California or in the city in which the Grantee was last employed by the Company
or any other Employer, if such city is not in Los Angeles County. Only one arbitrator shall
preside over the proceedings. The arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of Delaware or federal law, or both, as applicable to the claim(s)
asserted. In any arbitration, the burden of proof shall be allocated as provided by applicable
law. The arbitrator shall have the authority to award any and all legal and equitable relief
authorized by the law applicable to the claim(s) being asserted in the arbitration, as if the
claim(s) were brought in a court of law. Either party may bring an action in court to compel
arbitration under this Agreement and to enforce an arbitration award. Discovery, such as
depositions or document requests, shall be available to the Company and the Grantee as though the
dispute were pending in California state court. The arbitrator shall have the ability to rule on
pre-hearing motions, as though the matter were in a California state court, including the ability
to rule on a motion for summary judgment. The fees of the arbitrator and any other fees for the
administration of the arbitration that normally would not be incurred if the action were brought in
a court of law (e.g., filing fees in excess of $150, room rental fees, etc.) shall be paid by the
Company. The arbitrator must provide a written decision which is subject to limited judicial
review consistent with applicable law. If any part of this arbitration provision is deemed to be
unenforceable by an arbitrator or a court of law, that part may be severed or reformed so as to
make the balance of this arbitration provision enforceable.

10. Miscellaneous.

     a. This Agreement will be construed in accordance with and governed by the laws of the State
of Delaware, without regard to principles of conflicts of laws.

     b. This Agreement may be executed in any number of counterparts, each of which will be deemed
to be an original instrument, but all of which taken together will constitute but one instrument.

     c. This Agreement, along with the Plan, will constitute the entire understanding and agreement
between the Company and the Grantee with respect to the subject matter hereof. The provisions of
the Plan will govern in the event of any inconsistency between this Agreement and the Plan, unless
otherwise determined by the Committee.

     d. If any provision of this Agreement, or the application of such provision to any Person or
circumstance, is found by a court of competent jurisdiction to be unenforceable for any reason,
such provision may be modified or severed from this Agreement to the extent necessary to make such
provision enforceable against such Person or in such circumstance. Neither the unenforceability of
such provision nor the modification or severance of such provision will affect (i) the
enforceability of any other provision of this Agreement or (ii) the enforceability of such

-3-

 

provision against any Person or in any circumstance other than those against or in which such
provision is found to be unenforceable.

     The Company and the Grantee have executed this Agreement as of the date first above written.

	 	 	 	 	 
	 	 	ASCENT MEDIA GROUP, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	GRANTEE
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 

-4-

 

Exhibit II

BENEFICIARY DESIGNATION

FOR

THE ASCENT MEDIA GROUP, LLC 2006 LONG TERM INCENTIVE PLAN

(As Amended and Restated Effective as of September 9, 2008)

INSTRUCTIONS: Complete the following table with information about your principal Beneficiary and
your contingent (secondary) beneficiaries for your interest under the Ascent Media Group, LLC 2006
Long Term Incentive Plan (As Amended and Restated Effective as of September 9, 2008) (the “Plan”).
This Beneficiary designation will apply to your entire vested interest in the Plan as of your date
of death.

Primary Beneficiary:

			
	Name:	 	 

			
	Address:	 	 

			
	Telephone Number:	 	 

			
	Social Security Number:	 	 

			
	Relationship to Grantee:	 	 

Secondary Beneficiary: (Applicable if Primary Beneficiary predeceases the Grantee)

			
	Name:	 	 

			
	Address:	 	 

			
	Telephone Number:	 	 

			
	Social Security Number:	 	 

			
	Relationship to Grantee:	 	 

This designation may be changed or revoked by you at any time. A Beneficiary designation, change,
or revocation is effective upon receipt by the Committee. Payment will be made to a Beneficiary
only if such Beneficiary survives the Grantee.

	 	 	 
	 
	 	 
	 
	 	 
	 

	 	 
	Date

	 	Grantee’s Signature

— THE ELECTIONS MADE UNDER THIS FORM ARE NOT EFFECTIVE UNTIL

RECEIVED BY THE COMMITTEE —

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