AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as
of June      , 2007, by and among The Allied Defense Group, Inc., a Delaware
corporation, with headquarters located at 8000 Towers Crescent Drive, Suite 260,
Vienna, Virginia 22182 (the "Company”), and the undersigned buyers (each, a
“Buyer”, and collectively, the “Buyers”).

WHEREAS:

A. The Company and the Investor (collectively with any other investors that may
become a party to this Agreement, the “Investors”) are parties to that certain
Securities Purchase Agreement, dated as of March 9, 2006 (the “Original
Securities Purchase Agreement”), pursuant to which, among other things, the
Investors purchased from the Company (i) senior subordinated convertible notes,
dated March 9, 2006 (the “Original Notes”) and (ii) warrants (the “Warrants”),
which are exercisable to purchase shares of the Company’s common stock, par
value $0.10 per share (the "Common Stock”) (as exercised, collectively, the
“Warrant Shares”).

B. In connection with the Amended and Restated Securities Purchase Agreement by
and among the parties hereto, dated June 19, 2006 (the “Securities Purchase
Agreement”), the Company has agreed, upon the terms and subject to the
conditions set forth in the Securities Purchase Agreement (a) to cancel the
Original Notes and to issue to the Buyers, in exchange therefor, (i) certain
shares of Common Stock (the “Common Shares”) and (ii) certain senior secured
convertible notes (the “Amended Notes”) (as converted, the “Amended Conversion
Shares”) and (b) to issue and sell to each Buyer (i) at the Initial Closing (as
defined in the Securities Purchase Agreement), certain senior secured
convertible notes of the Company (the “Initial Notes”) and (ii) at the
Additional Closing (as defined in the Securities Purchase Agreement), certain
senior secured convertible notes of the Company (the “Additional Notes”, and
together with the Amended Notes and the Initial Notes, the "Notes”), in each
case, which Notes will, among other things, be convertible into shares of Common
Stock (as converted, the “Conversion Shares”) in accordance with the terms of
the Notes.

C. The Notes bear interest, which at the option of the Company, subject to
certain conditions, may be paid in shares of Common Stock (the “Interest
Shares”).

D. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to execute and deliver this Agreement which
amends, and restates in full the terms and conditions of that certain
Registration Rights Agreement, by and among the Company and the Investors, dated
as of March 9, 2006 whereby the Company agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
“1933 Act”), and applicable state securities laws.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers
hereby agree as follows:

1. Definitions.

Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:

a. "Additional Effectiveness Date” means the date the Additional Registration
Statement is declared effective by the SEC.

b. "Additional Effectiveness Deadline” means the date which is sixty
(60) calendar days after the earlier of the Additional Filing Date and the
Additional Filing Deadline or in the event that the Registration Statement is
subject to a review by the SEC, one-hundred and twenty (120) calendar days after
the earlier of the Additional Filing Date and the Additional Filing Deadline.

c. "Additional Filing Date” means the date on which the Additional Registration
Statement is filed with the SEC.

d. "Additional Filing Deadline” means if Cutback Shares are required to be
included in the Additional Registration Statement, the later of (i) the date
sixty (60) days after the date substantially all of the Registrable Securities
registered under the immediately preceding Registration Statement are sold and
(ii) the date six (6) months from the Initial Effective Date or the last
Additional Effective Date, as applicable.

e. "Additional Registrable Securities” means, (i) any Cutback Shares not
previously included on a Registration Statement and (ii) any share capital of
the Company issued or issuable with respect to the Notes, the Conversion Shares,
the Interest Shares, the Warrants, the Warrant Shares, the Common Shares or
Cutback Shares, as applicable, as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on exercises of the Notes and the Warrants.

f. "Additional Registration Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act covering any
Additional Registrable Securities.

g. "Additional Required Registration Amount” means any Cutback Shares not
previously included on a Registration Statement, all subject to adjustment as
provided in Section 2(f), without regard to any limitations on exercises of the
Notes and the Warrants.

h. "Business Day” means any day other than Saturday, Sunday or any other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.

i. "Cutback Shares” means any of the Initial Required Registration Amount
(without regard to clause (II) in the definition thereof) of Registrable
Securities not included in all Registration Statements previously declared
effective hereunder as a result of a limitation on the maximum number of shares
of Common Stock of the Company permitted by the staff of the SEC to be
registered pursuant to Rule 415. For the purpose of determining the Cutback
Shares, in order to determine any applicable Required Registration Amount, first
the Warrant Shares shall be excluded on a pro rata basis until all of the
Warrant Shares have been excluded, then the Common Shares shall be excluded on a
pro rata basis until all of the Common Shares have been excluded and lastly the
Amended Conversion Shares shall be excluded on a pro rata basis until all of the
Amended Conversion Shares have been excluded.

j. "Effective Date” means the Initial Effective Date and the Additional
Effective Date, as applicable.

k. "Effectiveness Deadline” means the Initial Effectiveness Deadline and the
Additional Effectiveness Deadline, as applicable.

l. "Initial Effective Date” means the date that the Registration Statement has
been declared effective by the SEC.

m. "Initial Effectiveness Deadline” means the date which is 365 days after the
Initial Closing Date (as defined in the Securities Purchase Agreement).

n. "Initial Registrable Securities” means (i) the Conversion Shares issued or
issuable upon conversion of the Notes, (ii) the Interest Shares issued or
issuable with respect to the Notes, (iii) the Warrant Shares issued or issuable
upon exercise of the Warrants, (iv) the Common Shares and (v) any capital stock
of the Company issued or issuable, with respect to the Notes, the Conversion
Shares, the Interest Shares, the Warrant Shares, the Warrants or the Common
Shares as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, without regard to any limitations on
exercises of the Warrants.

o. "Initial Required Registration Amount” means (I) 120% of the sum of (w) the
number of Conversion Shares issued and issuable pursuant to the Notes as of the
trading day immediately preceding the applicable date of determination, (x) the
number of Warrant Shares issued and issuable pursuant to the Warrants as of the
trading day immediately preceding the applicable date of determination, (y) the
maximum number of Interest Shares issued or issuable pursuant to the terms of
the Notes as of the trading date immediately preceding the applicable date of
determination and (z) the number of Common Shares issued as of the trading day
immediately preceding the applicable date of determination, excluding the 144
Common Shares (as defined in the Securities Purchase Agreement), subject to
adjustment as provided in Section 2(f), without regard to any limitations on
conversions or redemptions of the Notes or exercises of the Warrants or (II)
such other amount as may be required by the staff of the SEC pursuant to
Rule 415.

p. "Initial Registration Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Initial Registrable Securities.

q. "Investor” means a Buyer or any transferee or assignee thereof to whom a
Buyer assigns its rights under this Agreement in accordance with the
requirements of the Transaction Documents and who agrees to become bound by the
provisions of this Agreement in accordance with Section 9 and any transferee or
assignee thereof to whom a transferee or assignee assigns its rights under this
Agreement in accordance with the requirements of the Transaction Documents and
who agrees to become bound by the provisions of this Agreement in accordance
with Section 9.

r. "Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

s. "register,” “registered,” and “registration” refer to a registration effected
by preparing and filing one or more Registration Statements (as defined below)
in compliance with the 1933 Act and pursuant to Rule 415 and the declaration or
ordering by the SEC of the effectiveness of such Registration Statement(s).

t. "Registrable Securities” means the Initial Registrable Securities and the
Additional Registrable Securities. As to any particular Registrable Securities,
they shall cease to be Registrable Securities when they (i) have been sold
pursuant to an effective registration statement or in compliance with Rule 144
or (ii) are eligible to be sold pursuant to Rule 144(k) or any similar rule then
in force.

u. "Registration Statement” means a registration statement or registration
statements of the Company filed under the 1933 Act covering the Registrable
Securities.

v. "Required Holders” means the holders of at least a majority of the
Registrable Securities.

w. "Required Registration Amount” means either the Initial Required Registration
Amount or the Additional Required Registration Amount, as applicable.

x. "Rule 415” means Rule 415 under the 1933 Act or any successor rule providing
for offering securities on a continuous or delayed basis.

y. "SEC” means the United States Securities and Exchange Commission.

2. Registration.

a. Mandatory Registration. The Company shall prepare, and, as soon as
practicable after the Initial Closing Date but in no event later than the
earlier to occur of (i) forty-five (45) days after the Company obtains the
Stockholder Approval (as defined in the Securities Purchase Agreement) and
(ii) March 3, 2008, file with the SEC the Initial Registration Statement on Form
S-3, if available, covering the resale of all of the Initial Registrable
Securities. In the event that Form S-3 is unavailable to the Company for such a
registration, the Company shall use such other form as is available for such a
registration on another appropriate form reasonably acceptable to the Required
Holders, subject to the requirements of Section 2(e). The Initial Registration
Statement prepared pursuant hereto shall register for resale at least that
number of shares of Common Stock equal to the Initial Required Registration
Amount determined as of the date such Initial Registration Statement is
initially filed with the SEC. The Initial Registration Statement shall contain
(except if otherwise directed by the Required Holders or the SEC) the "Selling
Stockholders” and “Plan of Distribution” sections in substantially the form
attached hereto as Exhibit B. The Company shall use its best efforts to have the
Initial Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the Initial Effectiveness Deadline. By
9:30 am on the Business Day following the Initial Effective Date, the Company
shall file with the SEC in accordance with Rule 424 under the 1933 Act the final
prospectus to be used in connection with sales pursuant to such Registration
Statement.

b. Additional Mandatory Registrations. The Company shall prepare, and, as soon
as practicable but in no event later than the Additional Filing Deadline, file
with the SEC Additional Registration Statements on Form S-3 covering the resale
of all of the Additional Registrable Securities not previously registered on an
Additional Registration Statement hereunder. To the extent the staff of the SEC
does not permit the Additional Required Registration Amount to be registered on
an Additional Registration Statement, the Company shall file Additional
Registration Statements successively seeking to register on each such Additional
Registration Statement the maximum number of remaining Additional Registrable
Securities until the Additional Required Registration Amount has been registered
with the SEC. In the event that Form S-3 is unavailable for such a registration,
the Company shall use such other form as is available for such a registration on
another appropriate form reasonably acceptable to the Required Holders, subject
to the provisions of Section 2(e). Each Additional Registration Statement
prepared pursuant hereto shall register for resale at least that number of
shares of Common Stock equal to the Additional Required Registration Amount as
of the date the Registration Statement is initially filed with the SEC. Each
Additional Registration Statement shall contain (except if otherwise directed by
the Required Holders or the SEC) the “Selling Stockholders” and “Plan of
Distribution” sections in substantially the form attached hereto as Exhibit B.
The Company shall use its best efforts to have each Additional Registration
Statement declared effective by the SEC as soon as practicable, but in no event
later than the Additional Effectiveness Deadline. By 9:30 a.m. New York time on
the date following the Additional Effective Date, the Company shall file with
the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to
be used in connection with sales pursuant to such Registration Statement.

c. Allocation of Registrable Securities. The initial number of Registrable
Securities included in any Registration Statement and any increase in the number
of Registrable Securities included therein shall be allocated pro rata among the
Investors based on the number of Registrable Securities held by each Investor at
the time the Registration Statement covering such initial number of Registrable
Securities or increase thereof is declared effective by the SEC. In the event
that an Investor sells or otherwise transfers any of such Investor’s Registrable
Securities, each transferee shall be allocated a pro rata portion of the then
remaining number of Registrable Securities included in such Registration
Statement for such transferor. Any shares of Common Stock included in a
Registration Statement and which remain allocated to any Person which ceases to
hold any Registrable Securities covered by such Registration Statement shall be
allocated to the remaining Investors, pro rata based on the number of
Registrable Securities then held by such Investors which are covered by such
Registration Statement. The Company shall not include any securities other than
Registrable Securities (other than (i) on the Initial Registration Statement,
the shares described on Schedule 2(c)(i) and (ii) on the Additional Registration
Statement, the shares described on Schedule 2(c)(ii)) without the prior written
consent of the Required Holders.

d. Legal Counsel. Subject to Section 5 hereof, the Required Holders shall have
the right to select one legal counsel to review and participate in any
registration pursuant to this Section 2 (“Legal Counsel”), which shall be
Schulte Roth & Zabel LLP or such other counsel as thereafter designated by the
Required Holders. The Company and Legal Counsel shall reasonably cooperate with
each other in performing the Company’s obligations under this Agreement.

e. Ineligibility for Form S-3. In the event that Form S-3 is not available for
the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another
appropriate form reasonably acceptable to the Required Holders and
(ii) undertake to register the Registrable Securities on Form S-3 as soon as
such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC.

f. Sufficient Number of Shares Registered. In the event the number of shares
available under a Registration Statement filed pursuant to Section 2(a) is
insufficient to cover all of the Registrable Securities required to be covered
by such Registration Statement or an Investor’s allocated portion of the
Registrable Securities pursuant to Section 2(c), the Company shall amend the
applicable Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover at least
the Required Registration Amount as of the trading day immediately preceding the
date of the filing of such amendment or new Registration Statement, in each
case, as soon as practicable, but in any event not later than fifteen (15) days
after the necessity therefor arises. The Company shall use its best efforts to
cause such amendment and/or new Registration Statement to become effective as
soon as practicable following the filing thereof. For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed “insufficient to cover all of the Registrable Securities” if at any
time the number of shares of Common Stock available for resale under the
Registration Statement is less than the product determined by multiplying
(i) the Required Registration Amount as of such time by (ii) 0.90. The
calculation set forth in the foregoing sentence shall be made without regard to
any limitations on the conversion of the Notes or the exercise of the Warrants
and such calculation shall assume that the Notes are then convertible into
shares of Common Stock at the then prevailing Conversion Rate (as defined in the
Notes) and that the Warrants are then exercisable for shares of Common Stock at
the then prevailing Exercise Price (as defined in the Warrants).

g. Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. If (i) (A) the Additional Registration Statement is not
filed with the SEC on or before the Additional Filing Deadline (a “Filing
Failure”) or (B) a Registration Statement covering all of the Registrable
Securities required to be covered thereby and required to be filed by the
Company pursuant to this Agreement is not declared effective by the SEC on or
before the respective Effectiveness Deadline (an “Effectiveness Failure”) or
(ii) on any day after the Effective Date sales of all of the Registrable
Securities required to be included on such Registration Statement cannot be made
for any reason (other than during an Allowable Grace Period (as defined in
Section 3(q)) pursuant to such Registration Statement (including, without
limitation, because of a failure to keep such Registration Statement effective,
to disclose such information as is necessary for sales to be made pursuant to
such Registration Statement or to register, subject to the grace periods set
forth in Section 3(q) a sufficient number of shares of Common Stock to enable
resale of 100% of the shares of Common Stock issuable upon conversion of the
Notes and exercise of the Warrants without regard to limitations on conversion,
redemption and exercise of such Notes and Warrants and assuming such conversion,
redemption or exercise occurred on the date of the filing of the Registration
Statement or a suspension or delisting of the Common Stock on its principal
trading exchange or market) (a “Maintenance Failure”) then, as partial relief
for the damages to any holder by reason of any such delay in or reduction of its
ability to sell the underlying shares of Common Stock (which remedy shall not be
exclusive of any other remedies available at law or in equity), the Company
shall pay to each holder of Registrable Securities relating to such Registration
Statement an amount in cash equal to one percent (1.0%) of the aggregate
Purchase Price (as such term is defined in the Securities Purchase Agreement) of
such Investor’s Registrable Securities included in such Registration Statement
on each of the following dates: (i) the day of a Filing Failure and on every
thirtieth day (pro rated for periods totaling less than thirty days) after a
Filing Failure until such Filing Failure is cured; (ii) the day of an
Effectiveness Failure and on every thirtieth day (pro rated for periods totaling
less than thirty days) after an Effectiveness Failure until such Effectiveness
Failure is cured; and (iii) the initial day of a Maintenance Failure and on
every thirtieth day (pro rated for periods totaling less than thirty days) after
a Maintenance Failure until such Maintenance Failure is cured; provided,
however, that in no event shall the Company be liable for more than one percent
(1%) of penalties during any thirty day period or for multiple events during any
thirty day period. The payments to which a holder shall be entitled pursuant to
this Section 2(g) are referred to herein as “Registration Delay Payments.”
Registration Delay Payments shall be paid on the day of the Filing Failure,
Effectiveness Failure and the initial day of a Maintenance Failure, as
applicable, and thereafter on the earlier of (I) the thirtieth day after the
event or failure giving rise to the Registration Delay Payments has occurred and
(II) the third Business Day after the event or failure giving rise to the
Registration Delay Payments is cured. In the event the Company fails to make
Registration Delay Payments in a timely manner, such Registration Delay Payments
shall bear interest at the rate of one percent (1.0%) per month (prorated for
partial months) until paid in full. The parties agree that the Company will not
be liable for Registration Delay Payments under this Section in respect of the
Warrants.

3. Related Obligations.

At such time as the Company is obligated to file a Registration Statement with
the SEC pursuant to Section 2(a), 2(b), 2(e) or 2(f), and subject to any
Allowable Grace Periods, the Company will use its best efforts to effect the
registration of the Registrable Securities in accordance with the intended
method of disposition thereof and, pursuant thereto, the Company shall have the
following obligations:

a. The Company shall submit to the SEC, within two (2) Business Days after the
Company learns that no review of a particular Registration Statement will be
made by the staff of the SEC or that the staff has no further comments on a
particular Registration Statement, as the case may be, a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than 48 hours after the submission of such request. Subject to
Allowable Grace Periods, the Company shall keep each Registration Statement
effective pursuant to Rule 415 at all times until the earlier of (i) the date as
of which the Investors may sell all of the Registrable Securities covered by
such Registration Statement pursuant to Rule 144(k) (or any successor thereto)
promulgated under the 1933 Act or (ii) the date on which the Investors shall
have sold all of the Registrable Securities covered by such Registration
Statement (the “Registration Period”). The Company shall ensure that each
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein (in the case of prospectuses, in the
light of the circumstances in which they were made) not misleading.

b. The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by such Registration Statement until such time as all of such
Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-Q, Form 10-K or any analogous report under the Securities
Exchange Act of 1934, as amended (the “1934 Act”), the Company shall have
incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC on the
same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.

c. The Company shall (A) permit Legal Counsel to review and comment upon (i) a
Registration Statement at least three (3) Business Days prior to its filing with
the SEC and (ii) all amendments and supplements to all Registration Statements
(except for any periodic reports under the 1934 Act) within a reasonable number
of days prior to their filing with the SEC, and (B) not file any Registration
Statement or amendment or supplement thereto in a form to which Legal Counsel
reasonably objects; provided, however, that no liquidated damages under
Section 2 shall be due to any Investor if Legal Counsel shall have unreasonably
objected to the filing or effectiveness of any Registration Statements such as
to delay its filing or effectiveness. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment
or supplement thereto without the prior approval of Legal Counsel, which consent
shall not be unreasonably withheld. The Company shall furnish to Legal Counsel,
without charge, (i) copies of any correspondence from the SEC or the staff of
the SEC to the Company or its representatives relating to any Registration
Statement, (ii) promptly after the same is prepared and filed with the SEC, one
copy of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor (if not available pursuant to
Rule 424(b)), and all exhibits. The Company shall reasonably cooperate with
Legal Counsel in performing the Company’s obligations pursuant to this
Section 3.

d. The Company shall furnish to each Investor whose Registrable Securities are
included in any Registration Statement, without charge, (i) if the Company shall
not have filed a final prospectus in accordance with Rule 424 per Section 2(a)
or 2(b), as applicable, upon the effectiveness of any Registration Statement,
ten (10) copies of the prospectus included in such Registration Statement and
all amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request) and (ii) such other documents, including copies
of any preliminary or final prospectus, as such Investor may reasonably request
from time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.

e. The Company shall use its best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by Investors
of the Registrable Securities covered by a Registration Statement under such
other securities or “blue sky” laws of all applicable jurisdictions in the
United States, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(e), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction.
The Company shall promptly notify Legal Counsel and each Investor who holds
Registrable Securities of the receipt by the Company of any notification with
respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or “blue sky” laws of any
jurisdiction in the United States or its receipt of notice of the initiation or
threatening of any proceeding for such purpose.

f. The Company shall notify Legal Counsel and each Investor in writing of the
happening of any event, as promptly as practicable after becoming aware of such
event, as a result of which the prospectus included in a Registration Statement,
as then in effect, includes an untrue statement of a material fact or omission
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and, subject to Section 3(q), promptly prepare
a supplement or amendment to such Registration Statement to correct such untrue
statement or omission. The Company shall also promptly notify Legal Counsel and
each Investor in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement or
any post-effective amendment has become effective (notification of such
effectiveness shall be delivered to Legal Counsel and each Investor by facsimile
on the same day of such effectiveness and by overnight mail) and (ii) of the
Company’s reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.

g. The Company shall use its best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and to
notify Legal Counsel and each Investor who holds Registrable Securities being
sold of the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such purpose.

h. To the extent any Investor is deemed, alleged or reasonably believes may be
alleged, to be an underwriter, at the reasonable request of any Investor, the
Company shall furnish to such Investor, on the date of the effectiveness of the
Registration Statement and thereafter from time to time on such dates as an
Investor may reasonably request (i) a letter, dated such date, from the
Company’s independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the Investors, and (ii) an
opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the Investors.

i. To the extent any Investor is deemed, alleged or reasonably believes may be
alleged, to be an underwriter, the Company shall make available for inspection
by (i) any Investor, (ii) Legal Counsel and (iii) one firm of accountants or
other agents retained by the Investors (collectively, the “Inspectors”), all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the “Records”), as shall be reasonably
deemed necessary by each Inspector, and cause the Company’s officers, directors
and employees to supply all information which any Inspector may reasonably
request; provided, however, that each Inspector shall agree to hold in strict
confidence and shall not make any disclosure (except to an Investor) or use of
any Record or other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required
under the 1933 Act, (b) the release of such Records is ordered pursuant to a
final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other Transaction Document. Each Investor agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and any Investor) shall be deemed
to limit the Investors’ ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.

j. The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary or advisable to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary or
advisable to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a
subpoena or other order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement (provided that in the case of clauses (i) and (ii) such Investor shall
be consulted by the Company in connection with any such release or other
disclosure prior to its release). The Company agrees that it shall, upon
learning that disclosure of such information concerning an Investor is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to such Investor and allow such Investor, at
the Investor’s expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, such information.

k. The Company shall use its best efforts either to (i) cause all of the
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all of the Registrable Securities covered by a
Registration Statement on either The NASDAQ Global Market or The NASDAQ Global
Select Market or (iii) if, despite the Company’s best efforts to satisfy the
preceding clauses (i) and (ii), the Company is unsuccessful in satisfying the
preceding clauses (i) or (ii), to secure the inclusion for quotation on The
NASDAQ Capital Market or the NASD’s OTC Bulletin Board for such Registrable
Securities and, without limiting the generality of the foregoing, to use its
best efforts to arrange for at least two market makers to register with the
National Association of Securities Dealers, Inc. (“NASD”) as such with respect
to such Registrable Securities. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 3(k).

l. The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered and resold pursuant to a
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request.

m. If requested by an Investor, the Company shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment such
information as an Investor reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering;
(ii) as soon as practicable make all required filings of such prospectus
supplement or post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) as soon as practicable, supplement or make amendments to any Registration
Statement if reasonably requested by an Investor holding any Registrable
Securities.

n. The Company shall use its best efforts to cause the Registrable Securities
covered by a Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities.

o. The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration
hereunder.

p. Within two (2) Business Days after a Registration Statement which covers
Registrable Securities is declared effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.

q. Notwithstanding anything to the contrary herein, at any time after the
Effective Date, the Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the time is not,
in the good faith opinion of the Board of Directors of the Company (following
consultation with its counsel), in the best interest of the Company (a “Grace
Period”); provided, that the Company shall promptly (i) notify the Investors in
writing that such determination has been made (provided that in each notice the
Company will not disclose the content of such material, non-public information
to the Investors) and the date on which the Grace Period will begin, and
(ii) notify the Investors in writing of the date on which the Grace Period ends;
and, provided further, that during any three hundred sixty five (365) day period
such Grace Periods shall not exceed an aggregate of twenty (20) days and the
first day of any Grace Period must be at least two (2) trading days after the
last day of any prior Grace Period (each, an “Allowable Grace Period”). During
an Allowable Grace Period, the Investors will cease all sales under the
applicable Registration Statement until the end of such Allowable Grace Period.
For purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the Investors receive the notice referred to
in clause (i) and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be applicable during the
period of any Allowable Grace Period. Upon expiration of the Grace Period, the
Company shall again be bound by the first sentence of Section 3(f) with respect
to the information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of
Common Stock to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which an Investor has entered into a contract for
sale, and delivered a copy of the prospectus included as part of the applicable
Registration Statement (unless an exemption from such prospectus delivery
requirement exists), prior to the Investor’s receipt of the notice of a Grace
Period and for which the Investor has not yet settled.

4. Obligations of the Investors.

a. At least five (5) Business Days prior to the first anticipated filing date of
a Registration Statement, the Company shall notify each Investor in writing of
the information the Company requires from each such Investor if such Investor
elects to have any of such Investor’s Registrable Securities included in such
Registration Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement, and any
time deadlines for the Company hereunder shall be extended for the number of
days an Investor does not comply with this Section 4, with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company a “Selling Stockholder Questionnaire”, in the form attached
hereto as Exhibit C, and such other information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect the
effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.

b. Each Investor, by such Investor’s acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.

c. Each Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first
sentence of 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor’s receipt of
a notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of 3(f) and for which the Investor has not
yet settled.

d. Each Investor covenants and agrees that it will comply with the prospectus
delivery requirements of the 1933 Act as applicable to it or an exemption
therefrom in connection with sales of Registrable Securities pursuant to the
Registration Statement.

5. Expenses of Registration.

All reasonable expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company, shall be paid by the Company. The Company shall also
reimburse the Investors for the fees and disbursements of Legal Counsel in
connection with registration, filing or qualification pursuant to Sections 2 and
3 of this Agreement which amount shall be limited to $15,000.

6. Indemnification.

In the event any Registrable Securities are included in a Registration Statement
under this Agreement:

a. To the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor, the directors, officers,
members, partners, employees, agents, representatives of, and each Person, if
any, who controls any Investor within the meaning of the 1933 Act or the 1934
Act (each, an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, amounts paid in settlement or expenses, joint or several, (collectively,
“Claims”) incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified Damages”), to which any of them
may become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other “blue sky” laws of any jurisdiction in which Registrable Securities are
offered (“Blue Sky Filing”), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in the light of the circumstances under which the statements therein
were made, not misleading, (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a
Registration Statement or (iv) any violation of this Agreement (the matters in
the foregoing clauses (i) through (iv) being, collectively, “Violations”).
Subject to Section 6(c), the Company shall reimburse the Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
for such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company pursuant to
Section 3(d) and (ii) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld or delayed. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.

b. In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each, an
“Indemnified Party”), against any Claim or Indemnified Damages to which any of
them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar
as such Claim or Indemnified Damages arise out of or are based upon any
Violation, in each case to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement; and, subject to Section 6(c), such Investor will
reimburse any legal or other expenses reasonably incurred by an Indemnified
Party in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Investor
shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to such Investor as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9.

c. Promptly after receipt by an Indemnified Person or Indemnified Party under
this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. In the case of an
Indemnified Person, legal counsel referred to in the immediately preceding
sentence shall be selected by the Investors holding at least a majority in
interest of the Registrable Securities included in the Registration Statement to
which the Claim relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or Claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or Claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent; provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation, and such
settlement shall not include any admission as to fault on the part of the
Indemnified Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

d. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred.

e. No Person involved in the sale of Registrable Securities who is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) in connection with such sale shall be entitled to
indemnification from any Person involved in such sale of Registrable Securities
who is not guilty of fraudulent misrepresentation.

f. The indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

7. Contribution.

To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under
Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable
Securities, which Person is guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) in connection with such sale, shall be
entitled to contribution from any Person involved in such sale of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (iii)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities pursuant to such Registration Statement.

8. Reports Under the 1934 Act.

With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration (“Rule 144”), the Company agrees, for so long
as an Investor holds Notes, Warrants, Common Shares (as defined in the
Securities Purchase Agreement) or Registrable Securities, to:

a. make and keep public information available, as those terms are understood and
defined in Rule 144;

b. file with the SEC in a timely manner (except as noted in Schedule 4(c) of the
Securities Purchase Agreement) all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and

c. furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of Rule 144, the 1933
Act and the 1934 Act, (ii) a copy of the most recent annual report of the
Company and such other reports and documents so filed by the Company (but only
if such reports are not publicly available on the EDGAR System) and (iii) such
other information as may be reasonably requested to permit the Investors to sell
such securities pursuant to Rule 144 without registration.

9. Assignment of Registration Rights.

The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of such Investor’s Registrable
Securities if: (i) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment; (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee and
(b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act or applicable state securities laws; (iv) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein; and (v) such
transfer shall have been made in accordance with the applicable requirements of
the Securities Purchase Agreement (including the furnishing by the Investor to
the Company of an opinion of counsel reasonably acceptable to the Company, prior
to such transfer, that such Registrable Securities may be so transferred in a
transaction that does not require registration under the 1933 Act).

10. Amendment of Registration Rights.

Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Holders. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.

11. Miscellaneous.

a. A Person is deemed to be a holder of Registrable Securities whenever such
Person owns or is deemed to own of record such Registrable Securities. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company shall act
upon the basis of instructions, notice or election received from the such record
owner of such Registrable Securities.

b. Any notices, consents, waivers or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. Each Investor shall provide notice in writing to the Company
of any change in address, which notice shall be sent by the Company to all the
other Investors. The addresses and facsimile numbers for such communications
shall be:

If to the Company:

      The Allied Defense Group, Inc.

8000 Towers Crescent Drive
Suite 260
Vienna, Virginia 22182
Telephone:
Facsimile:
 

(703) 847-5268
(703) 847-5334

Attention: Chief Financial Officer

With a copy to:

Baxter, Baker, Sidle, Conn & Jones
Sun Trust Building, Suite 2100
120 E. Baltimore Street
Baltimore, Maryland 21202
Telephone: (410) 230-3800
Facsimile: (410) 230-3801
Attention: James E. Baker, Jr.

      If to Legal Counsel:

Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Telephone: (212) 756-2000
Facsimile: (212) 593-5955
Attention: Eleazer N. Klein, Esq.

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer’s representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

c. Failure of any party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.

d. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

e. This Agreement, the other Transaction Documents (as defined in the Securities
Purchase Agreement) and the instruments referenced herein and therein constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This
Agreement, the other Transaction Documents and the instruments referenced herein
and therein supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.

f. Subject to the requirements of Section 9, this Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns of each of
the parties hereto.

g. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

h. This Agreement may be executed in identical counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
agreement. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.

i. Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

j. All consents and other determinations required to be made by the Investors
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by the Required Holders.

k. The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent and no rules of strict
construction will be applied against any party.

l. This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

m. The obligations of each Buyer hereunder are several and not joint with the
obligations of any other Buyer, and no provision of this Agreement is intended
to confer any obligations on any Buyer vis-à-vis any other Buyer. Nothing
contained herein, and no action taken by any Buyer pursuant hereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated herein.

* * * * * *

1

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 
COMPANY:
THE ALLIED DEFENSE GROUP, INC.
By:      
Name:  
Title:    

2

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 
BUYERS:
KINGS ROAD INVESTMENTS LTD.
By:      
Name:  
Title:    

3

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 
PORTSIDE GROWTH & OPPORTUNITY FUND

 
By:      
Name:  
Title:    

4

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 
CASTLERIGG MASTER INVESTMENTS LTD.

 
By:      
Name:  
Title:    

5

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 
LB I GROUP INC.

 
By:      
Name:  
Title:    

6

SCHEDULE OF BUYERS

                              Buyer's Representative's     Buyer's Address  
Address Buyer   and Facsimile Number   and Facsimile Number
 
  c/o Polygon Investment Partners LP        
 
  399 Park Avenue, 22nd Floor
       
 
  New York NY 10022
  Schulte Roth & Zabel LLP

 
  Attention: Erik M.W. Caspersen and
  919 Third Avenue

 
  Brandon L. Jones
  New York, New York 10022

 
  Facsimile: (212) 359-7303
  Attn: Eleazer Klein, Esq.

Kings Road
  Telephone: (212) 359-7300
  Facsimile: (212) 593-5955

Investments Ltd.
  Residence: Cayman Islands
  Telephone: (212) 756-2000

 
  c/o Ramius Capital Group, L.L.C.        
 
  666 Third Avenue, 26th Floor
       
 
  New York, New York 10017
       
 
  Attention: Jeffrey Smith
       
 
  Owen Littman
       
 
  Facsimile: (212) 845-7999
       
 
  (212) 845-7995        
 
  Telephone: (212) 845-7955
       
Portside Growth &
  (212) 201-4841        
Opportunity Fund
  Residence: Cayman Islands
  N/A
 
  c/o Sandell Asset Management        
 
  40 West 57th St
       
 
  26th Floor   McDermott Will & Emery LLP

 
  New York, NY 10019
  340 Madison Avenue

 
  Attention: Cem Hacioglu / Matthew Pliskin
  New York, New York 10173-1922

 
  Telephone: 212-603-5700
  Attn: Stephen Older, Esq.

Castlerigg Master
  Fax: 212-603-5710
  Facsimile: (212) 547-5444

Investments Ltd.
  Residence: British Virgin Islands
  Telephone: (212) 547-5649

 
  c/o Lehman Brothers Inc.        
 
  399 Park Ave
       
 
  NY, NY 10022
       
 
  Attention: Will Yelsits
       
LB I Group Inc.
  Eric Salzman
  N/A

7

SCHEDULE 2(c)(i)

Shares includable in Initial Registration Statement:

             
LB I Group Inc.
    41,739     Common Stock
Halcyon/Sliska Offshore Management
LLC*
 
33,000  
Common Stock
Patriot Capital Funding, Inc.
    28,000     Warrants
Cowen and Company , LLC
    41,793     Warrants

• Including any assignee of such common shareholders rights.

8

SCHEDULE 2(c)(ii)

Shares and Warrants Includible in Additional Registration Statement

             
Pirate Capital LLC*
    261,261     Common Stock
Wynnefield Capital, Inc.*
    64,000     Common Stock

To the extent shares or warrants described in Schedule 2(c)(i) hereof are not
included on the Initial Registration Statement, such shares and warrants are
incorporated herein by reference.

• Including any assignee of such common shareholders rights.

9

EXHIBIT A

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

Mellon Investor Services, LLC
85 Challenger Road
Ridgefield, New Jersey 07660

Re: The Allied Defense Group, Inc.

Ladies and Gentlemen:

[We are][I am] counsel to The Allied Defense Group, Inc., a Delaware corporation
(the "Company”), and have represented the Company in connection with that
certain Securities Purchase Agreement (the “Securities Purchase Agreement”)
entered into by and among the Company and the buyers named therein
(collectively, the “Holders”) pursuant to which the Company issued to the
Holders senior secured convertible notes (the “Notes”) convertible into the
Company’s common stock, $0.10 par value per share (the "Common Stock”) and
warrants exercisable for shares of Common Stock (the “Warrants”). Pursuant to
the Securities Purchase Agreement, the Company also has entered into a
Registration Rights Agreement with the Holders (the “Registration Rights
Agreement”) pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), including the shares of Common Stock issuable upon conversion of the
Notes, the shares of Common Stock issuable as Interest Shares pursuant to the
Notes, the shares of Common Stock issuable upon exercise of the Warrants and the
Common Shares, under the Securities Act of 1933, as amended (the “1933 Act”). In
connection with the Company’s obligations under the Registration Rights
Agreement, on      , 200_, the Company filed a Registration Statement on Form
S-3 (File No. 333-     ) (the “Registration Statement”) with the Securities and
Exchange Commission (the “SEC”) relating to the Registrable Securities which
names each of the Holders as a selling stockholder thereunder.

In connection with the foregoing, [we][I] advise you that a member of the SEC’s
staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no
knowledge, after telephonic inquiry of a member of the SEC’s staff, that any
stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.

This letter shall serve as our standing confirmation to you of the Company’s
instruction that the shares of Common Stock are freely transferable by the
Holders pursuant to the Registration Statement. You need not require further
letters from us to effect any future legend-free issuance or reissuance of
shares of Common Stock to the Holders as contemplated by the Company’s
Irrevocable Transfer Agent Instructions dated June      , 2007.

         
CC:
  [LIST NAMES OF HOLDERS]   Very truly yours,
[ISSUER’S COUNSEL]
By:     

10

EXHIBIT B

SELLING STOCKHOLDERS

The shares of common stock being offered by the selling stockholders are those
issuable to the Selling Stockholders upon conversion and/or redemption of the
Notes and upon exercise of the Warrants. For additional information regarding
the issuance of those Notes and warrants, see “Private Placement of Notes and
Warrants” above. We are registering the shares of common stock in order to
permit the selling stockholders to offer the shares for resale from time to
time. Except for the ownership of the Notes and Warrants issued pursuant to the
securities purchase agreement, the selling stockholders have not had any
material relationship with us within the past three years.

The table below lists the selling stockholders and other information regarding
the beneficial ownership of the shares of common stock by each of the selling
stockholders. The second column lists the number of shares of common stock
beneficially owned by each selling stockholder, based on its ownership of the
Notes and Warrants, as of      , 200_, assuming conversion and/or redemption of
all convertible notes and exercise of the warrants held by the selling
stockholders on that date, without regard to any limitations on conversions,
redemptions or exercise.

The third column lists the shares of common stock being offered by this
prospectus by the selling stockholders.

In accordance with the terms of a registration rights agreement among the
Company and the selling stockholders, this prospectus generally covers the
resale of at least 120% of the sum of (i) the number of shares of common stock
issuable upon conversion of the Notes as of the trading day immediately
preceding the date the registration statement is initially filed with the SEC,
(ii) the maximum number of Interest Shares issuable pursuant to the terms of the
Notes as of the trading day immediately preceding the date the registration
statement is initially filed with the SEC, (iii) the number of shares of common
stock issuable upon exercise of the related Warrants as of the trading day
immediately preceding the date the registration statement is initially filed
with the SEC and (iv) ) the number of Common Shares issued as of the trading day
immediately preceding the date the registration statement is initially filed
with the SEC. Because the conversion price of the Notes and the exercise price
of the Warrants may be adjusted, the number of shares that will actually be
issued may be more or less than the number of shares being offered by this
prospectus. The fourth column assumes the sale of all of the shares offered by
the selling stockholders pursuant to this prospectus.

Under the terms of the Notes and the Warrants, a selling stockholder may not
convert the convertible notes or exercise the warrants to the extent such
conversion, redemption or exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of common
stock which would exceed 9.99% of our then outstanding shares of common stock
following such conversion, redemption or exercise, excluding for purposes of
such determination shares of common stock issuable upon conversion and/or
redemption of the Notes which have not been converted or redeemed and upon
exercise of the Warrants that have not been exercised. The number of shares in
the second column does not reflect this limitation. The selling stockholders may
sell all, some or none of their shares in this offering. See “Plan of
Distribution.”

11

12

                      Maximum Number of         Number of Shares   Shares to be
Sold   Number of Shares     Owned Prior to   Pursuant to this   Owned After Name
of Selling Stockholder   Offering   Prospectus   Offering
Kings Road Investments Ltd. (1)
Portside Growth & Opportunity Fund (2)
Castlerigg Master Investments Ltd. (3)
LB I Group Inc. (4)
 

 

 

0

(1) Kings Road Investments Ltd. (“Kings Road”) is a wholly-owned subsidiary of
Polygon Global Opportunities Master Fund (“Master Fund”). Polygon Investment
Partners LLP, Polygon Investment Partners LP and Polygon Investment Partners HK
Limited (the “Investment Managers”), Polygon Investments Ltd. (the “Manager”),
the Master Fund, Alexander Jackson, Reade Griffith and Paddy Dear share voting
and dispositive power of the securities held by Kings Road. The Investment
Managers, the Manager, Alexander Jackson, Reade Griffith and Paddy Dear disclaim
beneficial ownership of the securities held by Kings Road.

(2) Ramius Capital Group, LLC (“Ramius Capital”) is the investment adviser of
Portside Growth and Opportunity Fund (“Portside”) and consequently has voting
control and investment discretion over securities held by Portside. Ramius
Capital disclaims beneficial ownership of the shares held by Portside. Peter A.
Cohen, Morgan B. Stark, Thomas W. Strauss and Jeffrey M. Solomon are the sole
managing members of C4S& Co., LLC, the sole managing member of Ramius Capital.
As a result, Messrs. Cohen, Stark, Strauss and Solomon may be considered
beneficial owners of any shares deemed to be beneficially owned by Ramius
Capital. Messrs. Cohen, Stark, Strauss and Solomon disclaim beneficial ownership
of these shares.

(3) Sandell Asset Management Corp. is the investment manager of Castlerigg
Master Investment Ltd. (“Castlerigg”) and has shared voting and dispositive
power over the securities owned by Castlerigg. Sandell Asset Management Corp.
and Thomas E. Sandell, its sole shareholder, disclaim beneficial ownership of
the securities owned by Castlerigg.

(4) LB I Group Inc. is an affiliate of a broker-dealer and has represented to us
that it is not acting as an underwriter in this offering. It purchased the
securities in the ordinary course of business, and at the time of the purchase
of the securities to be resold, it had no agreements or understandings, directly
or indirectly, with any person to distribute the securities.  Lehman Brothers
Inc. is the parent company of LB I Group Inc. Lehman Brothers Holdings Inc., a
public reporting company, is the parent company of Lehman Brothers Inc. The
address for LB I Group Inc. is c/o Lehman Brothers Inc., 399 Park Avenue, New
York, New York 10022, Attn: Eric Salzman and Will Yelsits.

13

PLAN OF DISTRIBUTION

We are registering the Common Shares previously issued and the shares of common
stock issuable upon conversion of the Notes, as Interest Shares pursuant to the
terms of the Notes and upon exercise of the Warrants to permit the resale of
these shares of common stock by the holders of the Notes and Warrants from time
to time after the date of this prospectus. We will not receive any of the
proceeds from the sale by the selling stockholders of the shares of common
stock. We will bear all fees and expenses incident to our obligation to register
the shares of common stock.

The selling stockholders may sell all or a portion of the shares of common stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the shares of
common stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions or
agent’s commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,

  •   on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;

  •   in the over-the-counter market;

  •   in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;

  •   through the writing of options, whether such options are listed on an
options exchange or otherwise;

  •   ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

  •   block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

  •   purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

  •   an exchange distribution in accordance with the rules of the applicable
exchange;

  •   privately negotiated transactions;

  •   short sales;

  •   sales pursuant to Rule 144;

  •   broker-dealers may agree with the selling securityholders to sell a
specified number of such shares at a stipulated price per share;

  •   a combination of any such methods of sale; and

  •   any other method permitted pursuant to applicable law.

If the selling stockholders effect such transactions by selling shares of common
stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of the shares of common stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of
the shares of common stock or otherwise, the selling stockholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions they
assume. The selling stockholders may also sell shares of common stock short and
deliver shares of common stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales. The
selling stockholders may also loan or pledge shares of common stock to
broker-dealers that in turn may sell such shares.

The selling stockholders may pledge or grant a security interest in some or all
of the convertible notes, or warrants or shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock from
time to time pursuant to this prospectus or any amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of
1933, as amended, amending, if necessary, the list of selling stockholders to
include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus. The selling stockholders also may transfer
and donate the shares of common stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.

The selling stockholders and any broker-dealer participating in the distribution
of the shares of common stock may be deemed to be “underwriters” within the
meaning of the Securities Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular
offering of the shares of common stock is made, a prospectus supplement, if
required, will be distributed which will set forth the aggregate amount of
shares of common stock being offered and the terms of the offering, including
the name or names of any broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from the selling stockholders and any
discounts, commissions or concessions allowed or reallowed or paid to
broker-dealers.

Under the securities laws of some states, the shares of common stock may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.

There can be no assurance that any selling stockholder will sell any or all of
the shares of common stock registered pursuant to the shelf registration
statement, of which this prospectus forms a part.

The selling stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.

We will pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, estimated to be $[     ] in
total, including, without limitation, Securities and Exchange Commission filing
fees and expenses of compliance with state securities or “blue sky” laws;
provided, however, that a selling stockholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling
stockholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling stockholder specifically for use in this prospectus, in
accordance with the related registration rights agreement, or we may be entitled
to contribution.

Once sold under the shelf registration statement, of which this prospectus forms
a part, the shares of common stock will be freely tradable in the hands of
persons other than our affiliates.

14

EXHIBIT C

SELLING STOCKHOLDER QUESTIONNAIRE

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

1.   Name.

  (a)   Full Legal Name of Selling Securityholder

  (b)   Full Legal Name of Registered Holder (if not the same as (a) above)
through which Registrable Securities Listed in Item 3 below are held:

  (c)   Full Legal Name of Natural Control Person (which means a natural person
who directly or indirectly alone or with others has power to vote or dispose of
the securities covered by the questionnaire):

2. Address for Notices to Selling Securityholder:

 
Telephone:
Fax:
Contact Person:

3.   Beneficial Ownership of Registrable Securities:

Type and Principal Amount of Registrable Securities beneficially owned:

4.   Broker-Dealer Status:

  (a)   Are you a broker-dealer?

Yes No

  (b)   Are you an affiliate of a broker-dealer?

Yes No

  (c)   If you are an affiliate of a broker-dealer, do you certify that you
bought the Registrable Securities in the ordinary course of business, and at the
time of the purchase of the Registrable Securities to be resold, you had no
agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?

Yes No

5.   Beneficial Ownership of Other Securities of the Company Owned by the
Selling Securityholder.

Except as set forth below in this Item 5, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.

Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:

6.   Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.

      State any exceptions here:

The undersigned agrees to promptly notify the Company of any material
inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof and prior to the Effective Date for the
Registration Statement.

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

         
Dated:
  Beneficial Owner:  

 
  By:  

 
       
 
      Name:
 
      Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

[ ]

15