Document:

EX-10.4

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of March 9, 2006, 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. In connection with the Securities Purchase Agreement by and among the parties hereto of
even date herewith (the “Securities Purchase Agreement”), the Company has agreed, upon the terms
and subject to the conditions set forth in the Securities Purchase Agreement, to issue and sell to
each Buyer (i) senior subordinated convertible notes of the Company (the “Notes”) which will, among
other things, be convertible and/or redeemable into shares of the Company’s common stock, $0.10 par
value per share (the “Common Stock”) (as converted and/or redeemed, the “Conversion Shares”) in
accordance with the terms of the Notes, and (ii) warrants (the “Warrants”) which will be
exercisable to purchase shares of Common Stock (as exercised collectively, the “Warrant Shares”).

B. To induce the Buyers to execute and deliver the Securities Purchase Agreement, the Company
has 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. "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.

b. "Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.

c. "Effective Date” means the date a Registration Statement has been declared effective by the
SEC.

d. "Effectiveness Deadline” means the date which is 60 days after the earlier of the Filing
Date and the Filing Deadline, or if there is a full review of the Registration Statement by the
SEC, 120 days after the earlier of the Filing Date and the Filing Deadline.

e. "Filing Date” means the date the Registration Statement has been filed with the SEC.

f. "Filing Deadline” means the earlier of (i) September 30, 2006 and (ii) 45 days after the
Company files its annual report on Form 10-K for the year ended December 31, 2005.

g. "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.

h. "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.

i. "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 of effectiveness of such Registration
Statement(s) by the SEC.

j. "Registrable Securities” means (i) the Conversion Shares issued or issuable upon conversion
and/or redemption of the Notes, (ii) the Warrant Shares issued or issuable upon exercise of the
Warrants and (ii) any capital stock of the Company issued or issuable with respect to the
Conversion Shares, the Notes, the Warrant Shares and the Warrants as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any
limitations on conversions or redemptions of the Notes or exercises of the Warrants.

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

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

m. "Required Registration Amount” means 120% of the sum of (x) the number of Conversion Shares
issued and issuable pursuant to the Notes as of the trading day immediately preceding the
applicable date of determination and (y) the number of Warrant Shares issued and issuable pursuant
to the Warrants as of the trading day immediately preceding the applicable date of determination,
subject to adjustment as provided in Section 2(e), without regard to any limitations on conversions
or redemptions of the Notes or exercises of the Warrants.

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

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

2. Registration.

a. Mandatory Registration. The Company shall prepare, and, as soon as practicable but
in no event later than the Filing Deadline, file with the SEC the Registration Statement on Form
S-3 covering the resale of all of the Registrable Securities. 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(d). The Registration Statement prepared pursuant hereto shall
register for resale at least that number of shares of Common Stock equal to the Required
Registration Amount determined as of the date such Registration Statement is initially filed with
the SEC. The Registration Statement shall contain (except if otherwise directed by the Required
Holders) 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 the Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the Effectiveness Deadline. By 9:30 am on the Business Day
following the 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. 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 and the warrants exercisable into 40,824 shares of
Common Stock issued to the Agent (as defined in the Securities Purchase Agreement) on the Closing
Date on any Registration Statement without the prior written consent of the Required Holders.

c. 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.

d. 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.

e. 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(b), 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 or redemption
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).

f. Effect of Failure to File and Obtain and Maintain Effectiveness of Registration
Statement. If (i) 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 (A) not
filed with the SEC on or before the Filing Deadline (a “Filing Failure”) or (B) but 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(r)) 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 2(e) 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(f) 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(d) or 2(e), 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), 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(p), 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 the Nasdaq National 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(i).

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”). 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 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 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. 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	 	 	 	 
	 
	 	598 Madison Avenue, 14th Floor	 	 	 	 
	 
	 	New York, New York  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
	 	 	 	 
	 
	 	c/o Sandell Asset Management	 	 	 	 
	 
	 	40 West 57th St	 	 	 	 
	 
	 	26th Floor	 	 	 	 
	 
	 	New York, NY 10019
	 	 	 	 
	 
	 	Attention: Cem Hacioglu / Matthew Pliskin
	 	 	 	 
	 
	 	Telephone: 212-603-5700
	 	 	 	 
	Castlerigg Master
	 	Fax:  212-603-5710
	 	 	 	 
	Investments Ltd.
	 	Residence: British Virgin Islands
	 	 	 	 
	LB I Group Inc.
	 	c/o Lehman Brothers Inc.	 	 	 	 
	 
	 	Att: Will Yelsits
	 	 	 	 
	 
	 	399 Park Ave	 	 	 	 
	 
	 	NY, NY 10022
	 	 	 	 

7

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 subordinated 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 and/or redemption of the Notes and the shares of Common Stock issuable upon
exercise of the Warrants, 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

8

	 	 	 	 	 
	 	 	the Company’s Irrevocable Transfer Agent Instructions dated March 9, 2006.

	 
	 	 	 	 
	CC:

	 	[LIST NAMES OF HOLDERS]
	 	Very truly yours,

[ISSUER’S COUNSEL]

By:     

9

EXHIBIT B

SELLING STOCKHOLDERS

The shares of common stock being offered by the selling stockholders are issuable upon
conversion and/or redemption of the convertible notes and upon exercise of the warrants. For
additional information regarding the issuance of those convertible notes and warrants, see “Private
Placement of Shares of Convertible 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 convertible 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 convertible 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 and/or redemption of the
convertible notes as of the trading day immediately preceding the date the registration statement
is initially filed with the SEC and (ii) 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. Because the conversion price of the
convertible 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 convertible 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 convertible
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.”

10

11

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	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.
	 	 	 	 	 	 	 	 	 		0	

(1) Polygon Investment Partners LLP and Polygon Investment Partners LP (the
“Investment Managers”) and Polygon Investments Ltd. (the “Manager”) each has the right to vote and
dispose of the securities held by Kings Road Investments Ltd. Alexander Jackson, Reade Griffith and
Paddy Dear control the Investment Managers and the Manager. The Investment Managers, the Manager,
Alexander Jackson, Reade Griffith and Paddy Dear disclaim beneficial ownership of the securities
held by Kings Road Investments Ltd.

(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.

12

PLAN OF DISTRIBUTION

We are registering the shares of common stock issuable upon conversion and/or redemption of
the convertible notes and upon exercise of the warrants to permit the resale of these shares of
common stock by the holders of the convertible 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.

13

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:

[ ]

14Exhibit 10.01

     

      
        

      

    

    Exhibit
      10.01

     

     

    LOEWS
      CORPORATION

    DEFERRED
      COMPENSATION
PLAN

    amended
      and restated as of December 31, 2005

     

     

     

     

    

    

    _____________

    December
      1, 2005

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.    
      PURPOSE

    The
      purpose of the Loews Corporation Deferred Compensation Plan (the “Plan”) is to
      provide non-employee directors of Loews Corporation (the “Corporation”), select
      management employees of the Corporation and select management employees of
      certain of its Subsidiaries and Affiliates (hereinafter, with the Corporation,
      collectively referred to as the “Company”) as determined by the Administrative
      Committee for the Deferred Compensation Plan, an opportunity, in accordance
      with
      the terms and conditions set forth herein, to defer, on a non-qualified basis,
      compensation that would otherwise be payable currently.

    

    2.    
      ADMINISTRATION

    The
      Plan
      shall be administered by a committee (the “Administrative Committee for the
      Deferred Compensation Plan”, hereinafter referred to as the “Committee”)
      consisting of at least three members appointed by the Board of Directors of
      the
      Corporation (the “Board”). The Committee shall have the sole and complete
      authority to interpret the terms and provisions of the Plan and to adopt, alter
      and repeal such administrative rules, regulations and practices governing the
      operation of the Plan as it shall from time to time deem advisable. The
      Committee may appoint a person or persons to administer the Plan on a day-to-day
      basis.

    

    3.     ELIGIBILITY

    The
      Committee shall have the sole and absolute discretion to select those
      individuals who shall participate in the Plan (“Participants”) and shall
      determine the extent to which Participants can defer compensation. 

    

    4.    
      ELECTION
      TO DEFER

    
      	 	
              (a)

            	
              A
                Participant may elect to defer receipt of a portion of his/her
                compensation (as defined in Paragraph 10 hereunder) as (and to the
                extent)
                permitted by the Committee. A Participant may also elect the rate
                of
                interest to be applied to said deferral.

            

    

    

    
      	 	
              (b)

            	
              The
                election by a Participant to defer compensation shall be made before
                the
                beginning of the calendar year in which such compensation is earned.
                The
                election by a Participant of the rate of interest to be applied to
                said
                deferred compensation shall also be made before the beginning of
                the
                calendar year in which such compensation is earned.
                

            

    

    

    
      	 	
              (c)

            	
              A
                Participant must make separate elections as to the amount deferred
                and the
                applicable rate of interest to be applied thereon, with respect to
                each
                calendar year of participation in the Plan. Amounts deferred under
                this
                Paragraph 4 shall be referred to as the “Deferred Amounts”. Election forms
                for Participants to defer compensation and elect a rate of interest
                thereon (as provided in Paragraph 6 hereunder), shall be provided
                by the
                Committee, and all such elections shall be made in writing on such
                forms.

            

    

    

    
      	 	
              (d)

            	
              All
                amounts deferred prior to January 1, 2005 together with any income
                earned
                thereon are deemed “grandfathered” pursuant to Section 409A of the
                Internal Revenue Code and all Treasury Regulations issued thereunder,
                and
                shall be administered in accordance with the Plan in effect as of
                October
                4, 2004 for said “grandfathered” amounts, with one exception: the notional
                interest rates earned on amounts deferred prior to January 1, 2005
                shall
                be revised to comply with the proposed Treasury regulations issued
                under
                Section 409A of the Internal Revenue
                Code.

            

    

    

    All
      amounts deferred subsequent to December 31, 2004 shall comply with the
      provisions of Section 409A of the Internal Revenue Code and all Treasury
      Regulations issued thereunder so as to not subject the Participants to the
      income inclusion, interest and tax penalty provisions imposed under Section
      409A.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    All
      Participants shall receive an annual statement listing their deferred
      compensation by year of election together with all respective interest income
      earned thereon. 

    

    5.    
      ESTABLISHMENT
      OF DEFERRED
      COMPENSATION
      ACCOUNT

    At
      the
      time of the Participant’s initial election to defer pursuant to Paragraph 4, the
      Company shall establish a memorandum account (a “Deferred Compensation Account”)
      for each participant on its books. The Deferred Amount (as determined under
      the
      participant’s election form) shall be credited to the Participant’s Deferred
      Compensation Accounts as of the day that the compensation would otherwise have
      been paid to the Participant.

    

    6.    
      ADDITIONS
      TO DEFERRED
      AMOUNTS

    Amounts
      equivalent to interest (“Interest”) shall be credited to a Participant’s
      Deferred Compensation Account at the end of each calendar year based on the
      average balance (including Deferred Amounts and prior interest credits) in
      the
      Participant’s Account for such year. Interest for any calendar year shall be
      computed at a rate equal to the Constant Maturity Treasuries plus twenty-five
      basis points as reported in the Federal Reserve Bank H15 Report as of the first
      business day of November of the prior year with the following
      exception:

    

    The
      rate
      for a 30-year period shall be the rate for a 20-year Constant Maturity Treasury
      with a linear extrapolation factor for 10 years as reported in the Federal
      Reserve Bank H15 Report as of the first business day of November of the prior
      year.

    

    A
      Deferred Compensation Account that is paid out prior to the last day of a
      calendar year shall be credited with Interest for a partial year ending with
      the
      date of payout based on the average balance in the Participant’s Account for
      such partial year. 

    

    7.    
      PAYMENT
      OF DEFERRED
      AMOUNTS

    For
      purposes of this Paragraph 7, continuous service of the Participant with the
      Company and any corporation or other entity that is the successor, either
      directly or indirectly, to all or substantially all of the assets and business
      of the Company shall be deemed continuous service with the Company so long
      as
      such successor is a Subsidiary or Affiliate.

    

    
      	 	
              (a)

            	
              Subject
                to the provisions of subparagraphs (b) and (c) below, to the extent
                a
                Participant elects to defer compensation for any given year, such
                deferral
                shall be for at least three years. 

            

    

    

    
      	 	
              (b)

            	
              The
                Participant shall elect, in his/her election to defer, that his/her
                Deferred Compensation Account be paid
                either:

            

    

    

    
      	 	
              (i)

            	
              in
                a lump sum; or 

            

    

    

    
      	 	
              (ii)

            	
              in
                a series of annual installment payments (each as nearly equal as
                possible), the number of which cannot exceed fifteen, as the Participant
                shall elect under rules established by the Committee. Each series
                shall be
                designated as a separate payment.

            

    

    

    In
      the
      absence of an election by a Participant, the distribution will be made in a
      lump
      sum payment. 

    

    
      	 	
              (c)

            	
              (i)
                In the event of the Participant’s death or disability, payment of the
                balance in the Participant’s Deferred Compensation Account shall be made
                as elected by the Participant in the election to defer, to the
                Participant’s designated beneficiary or if none, to the Participant’s
                estate, in the case of death, or to the Participant, in the case
                of
                disability;

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (ii)
      In
      the event of the Participant’s termination of service from the Company for
      employee retirement, or the end of service as a non-employee director, payment
      of the balance in the Participant’s Deferred Compensation Account shall be made
      as elected by the Participant in the election to defer; and

    

    (iii)
      In
      the event of the Participant’s termination of service from the Company for any
      reason other than death, disability, employee retirement or the end of service
      as a non-employee director, payment of the balance in the Participant’s Deferred
      Compensation Account shall be made in a lump sum notwithstanding the
      Participant’s election to the contrary.

    

    All
      payments to be made pursuant to subsections (ii) and (iii) above shall commence
      on the first of the month following six (6) months subsequent to the designated
      event in (ii) and (iii).

    

    
      	 	
              (d)

            	
              Anything
                contained in this Paragraph 7 to the contrary notwithstanding, in
                the
                event a Participant incurs a severe financial hardship or a Participant
                becomes disabled, the Committee, upon written application of such
                Participant, will direct immediate payment of all or a portion of
                the then
                current value of such Participant’s Deferred Compensation Account. The
                Participant’s deferral election shall be cancelled, and not postponed or
                otherwise delayed, and any later deferral election shall be treated
                as an
                initial deferral election. 

            

    

    

    
      	 	
              (i)

            	
              A
                severe financial hardship to the Participant is a situation: (1)
                resulting
                from an illness or accident of the Participant, the Participant’s spouse,
                or a dependent; (2) loss of the Participant’s property due to casualty; or
                (3) other similar extraordinary and unforeseeable circumstances arising
                as
                a result of events beyond the control of the Participant. The amount
                of
                the distribution is limited to the amount needed to satisfy the emergency
                plus taxes reasonably anticipated as a result of the distribution.
                Distributions shall not be allowed to the extent that the hardship
                may be
                relieved through reimbursement or compensation by insurance or otherwise,
                or by liquidation of the Participant’s assets (to the extent such
                liquidation would not itself cause a severe financial
                hardship).

            

    

    

    
      	 	
              (ii)

            	
              A
                Participant is deemed disabled if determined to be totally disabled
                by the
                Social Security Administration. 

            

    

    

    
      	 	
              (e)

            	
              For
                deferrals on or after January 1, 2005, a Participant may make a new
                election as to the time and/or form of payment at any time with respect
                to
                prior deferrals, provided that such election; (1) will not take effect
                until at least 12 months after the date on which such election is
                made;
                (2) that the first payment with respect to which such election is
                made is
                deferred for a period of not less than 5 years; and, (3) that such
                election shall not be made less than 12 months prior to the date
                of the
                first scheduled payment. 

            

    

    

    8.    
      TRANSFERABILITY
      OF INTERESTS

    Except
      for the right of a Participant to designate a beneficiary as hereinabove
      provided, a Participant, or beneficiary’s, rights and interests may not be
      anticipated, alienated, assigned, pledged, transferred or otherwise
      encumbered.

    

    9.    
      AMENDMENT,
      SUSPENSION
      AND TERMINATION

    The
      Corporation, in its sole and absolute discretion, at any time may amend, suspend
      or terminate the Plan or any portion thereof. No such amendment, suspension
      or
      termination shall alter or impair the rights of a Participant with respect
      to
      then Deferred Amounts.

    

    10.  DEFINITIONS

    
      	 	
              (a)

            	
              The
                term “Compensation” shall mean:

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              (i)

            	
              base
                salary for employees; and, 

            

    

    

    
      	 	
              (ii)

            	
              cash
                retainer and meeting fees for non-employee directors of the
                Corporation.

            

    

    

    
      	 	
              (b)

            	
              The
                term “Subsidiary” shall mean any corporation or other entity 50 percent or
                more of the voting stock or ownership interest of which shall at
                the time
                be owned directly or indirectly by the
                Corporation.

            

    

    

    
      	 	
              (c)

            	
              The
                term “Affiliate” means any corporation or other entity which is not a
                Subsidiary but as to which the Corporation or a Subsidiary possesses
                a
                direct or indirect ownership
                interest.

            

    

    

    11.  UNFUNDED
      OBLIGATION

    No
      assets
      of the Company have been set aside to provide for the payment of the Deferred
      Amounts. Assets of the Company are subject to the claims of the Company’s
      general creditors. The Plan is intended to be, and shall be operated and
      administered to be, a plan which is unfunded and which is maintained primarily
      for the purpose of providing deferred compensation for a selected group of
      non-employee directors and management employees. The Company shall make no
      provision for the funding or insuring of Deferred Amounts that would cause
      the
      Plan to be (i) a “funded” plan for purposes of section 404(a)(5) of the Internal
      Revenue Code of 1986 or Title I of the Employee Retirement Income Security
      Act
      of 1974, as amended, or (ii) other than an “unfunded and unsecured promise to
      pay money or property in the future” under Treasury Regulations sections
      1.83-3(e). A Participant and his/her beneficiary shall be treated as a general
      unsecured creditor of the Company at all times under this Plan, except as
      otherwise provided under applicable state law.

    

    12.  
      NO
      RIGHT
      TO
      EMPLOYMENT,
      TO
      RENDER
      SERVICES,
      OR
      OTHER
      BENEFITS

    This
      Plan
      shall not constitute a contract of employment, nor an arrangement to render
      services, between the Company and the Participant, and nothing contained herein
      shall be construed as conferring upon any Participant the right to continue
      in
      the employ of, nor the right to continue to render services to, the
      Company.

    

    Any
      compensation deferred and any benefits paid under this Plan shall be disregarded
      in computing benefits under any employee benefit plan of the Company, except
      to
      the extent expressly provided for in such employee benefit plans; and, further
      provided that any benefit, which would have been payable to Participants under
      the “Retirement Plan for Employees of Loews Corporation” had compensation
      deferred under this Plan been included in Compensation (for Retirement Plan
      purposes) in the calendar year to which the deferred compensation is
      attributable, shall be paid under the “Benefit Equalization Plan”.

    

    13.  
      EFFECTIVE
      DATE

    The
      Plan,
      as amended and restated, shall be effective immediately upon approval by the
      Board of Directors.

    

    14.  
      GOVERNING
      LAW

    The
      Plan
      shall be governed by the laws of the State of New York without reference to
      the
      principles of conflict of laws.

    

    15.  
      COMPLIANCE
      WITH
      SECTION
      409A OF
      THE
      CODE

    The
      Plan
      is intended to provide for the deferral of compensation in accordance with
      the
      provisions of Section 409A of the Internal Revenue Code and Treasury Regulations
      and published guidance issued pursuant thereto. Accordingly, the Plan shall
      be
      construed in a manner consistent with those provisions and may, at any time,
      be
      amended in the manner and to the extent determined necessary or desirable by
      the
      Company to reflect or otherwise facilitate compliance with such provisions
      with
      respect to amounts deferred on or after January 1, 2005. There are rights and
      benefits that existed under the Plan as of October 3, 2004 that are deemed
      to be
“grandfathered” pursuant to Code 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      409A and the underlying Regulations. Notwithstanding any provisions of the
      Plan
      to the contrary, no otherwise permissible election or distribution shall be
      made
      or given effect under the Plan that would result in income inclusion, interest
      and an excise tax equal to 20% of the amount of the deferred compensation
      required to be taken into income under Section 409A of the Code.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]