Document:

Registration Rights Agreement, dated May 14, 2007

 Exhibit 4.2 
  

 REGISTRATION RIGHTS AGREEMENT 
 Dated as of May 14,2007 
 By and Among 
 CONSTELLATION BRANDS, INC., 
 as Issuer

 and 
 THE GUARANTORS named
herein 
 and 
 BANC OF AMERICA
SECURITIES LLC 
 and 
 CITIGROUP
GLOBAL MARKETS INC. 
 as Initial Purchasers 
 $700,000,000 
 7.25% Senior Notes due 2017 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	1.	  	Definitions	  	1
			
	2.	  	Exchange Offer	  	4
			
	3.	  	Shelf Registration	  	8
			
	4.	  	Additional Interest	  	9
			
	5.	  	Registration Procedures	  	11
			
	6.	  	Registration Expenses	  	19
			
	7.	  	Indemnification	  	19
			
	8.	  	Rules 144 and 144A	  	22
			
	9.	  	Underwritten Registrations	  	23
			
	10.	  	Miscellaneous	  	23

  

 (i) 

 REGISTRATION RIGHTS AGREEMENT 
 This Registration Rights Agreement (the “Agreement”) is dated as of May 14, 2007 by and among CONSTELLATION BRANDS, INC., a
Delaware corporation (the “Company”), each of the subsidiaries of the Company listed on the signature pages hereto (collectively, the “Guarantors”) and Banc of America Securities LLC and Citigroup Global Markets
Inc. (the “Initial Purchasers”). 
 This Agreement is entered into in connection with the Purchase Agreement, dated as of
May 9, 2007 (the “Purchase Agreement”), by and among the Company, the Guarantors and the Initial Purchasers, which provides for the sale by the Company to the Initial Purchasers of an aggregate of $700,000,000 aggregate
principal amount of the Company’s 7.25% Senior Notes due 2017 (the “Notes”). The Notes are being issued pursuant to the Indenture, dated as of May 14, 2007, (the “Indenture”), among the Company, the
Guarantors and The Bank of New York Trust Company, N.A., as trustee (the “Trustee”). The Notes are guaranteed (the “Guarantees”) by the Guarantors. The Notes and the Guarantees are collectively referred to herein as
the “Securities”. 
 In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company and the
Guarantors have agreed to provide the registration rights set forth in this Agreement for the benefit of the Initial Purchasers and any subsequent holder or holders of the Securities. The execution and delivery of this Agreement is a condition to
the Initial Purchasers’ obligation to purchase the Securities under the Purchase Agreement. 
 The parties hereby agree as follows:

 1. Definitions. As used in this Agreement, the following terms shall have the following meanings: 
 Additional Interest: See Section 4 hereof. 
 Advice: See Section 5 hereof. 
 Agreement: See the introductory paragraphs hereto.

 Applicable Period: See Section 2 hereof. 
 Business Day: Any day that is not a Saturday, Sunday or a day on which banking institutions in New York are authorized or required by law to be closed. 
 Company: See the introductory paragraphs hereto. 
 Effectiveness Date: The 485th day after the Issue Date; provided, however, that with respect to any Shelf Registration, the Effectiveness Date shall be the 60th day after the Filing Date with
respect thereto. 
 Effectiveness Period: See Section 3 hereof. 

 Event Date: See Section 4 hereof. 
 Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. 
 Exchange Notes: See Section 2 hereof. 
 Exchange Offer: See Section 2 hereof. 
 Exchange Offer Registration Statement: See Section 2 hereof.

 Filing Date: (A) If no Exchange Offer Registration Statement has been filed by the Issuer pursuant to this Agreement, the
395th day after the Issue Date; and (B) with respect to a Shelf Registration Statement, the 60th day after the delivery of a Shelf Notice as required pursuant to Section 2(c) hereof. 
 Free Writing Prospectus: each free writing prospectus (as defined in Rule 405 un-der the Securities Act) prepared by or on behalf of the Company or used
or referred to by the Company in connection with the sale of the Notes or the Exchange Notes. 
 Guarantees: See introductory
paragraphs hereto. 
 Guarantors: See introductory paragraphs hereto. 
 Holder: Any holder of a Registrable Note or Registrable Notes. 
 Indemnified Person: See Section 7 hereof. 
 Indemnifying Person: See Section 7
hereof. 
 Indenture: See introductory paragraphs hereto. 
 Initial Purchasers: See introductory paragraphs hereto. 
 Initial Shelf Registration: See Section 3(a) hereof. 
 Inspectors: See Section 5(n)
hereof. 
 Issue Date: May 14, 2007. 
 Losses: See Section 7(a) hereof. 
 NASD: See Section 5(s) hereof. 
 Notes: See the introductory paragraphs hereto. 
 Participant: See Section 7(a) hereof. 
 Participating Broker-Dealer: See Section 2
hereof. 
  

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 Person: An individual, trustee, corporation, partnership, joint stock company, trust,
unincorporated association, union, business association, firm or other legal entity. 
 Private Exchange: See Section 2 hereof.

 Private Exchange Notes: See Section 2 hereof. 
 Prospectus: The prospectus included in any Registration Statement (including, without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon Rule 430A or 430B promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
 Purchase Agreement: See the introductory paragraphs hereto. 
 Records: See Section 5(n)
hereof. 
 Registrable Notes: Each Security upon its original issuance and at all times subsequent thereto, each Exchange Note as to
which Section 2(c)(iv) hereof is applicable upon original issuance and at all times subsequent thereto and each Private Exchange Note (and related Guarantees) upon original issuance thereof and at all times subsequent thereto, until in the case
of any such Security, Exchange Note or Private Exchange Note, as the case may be, the earliest to occur of (i) a Registration Statement (other than, with respect to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the
applicable Exchange Offer Registration Statement) covering such Security, Exchange Note or such Private Exchange Note has been declared effective by the SEC and such Security, Exchange Note or such Private Exchange Note, as the case may be, has been
disposed of in accordance with such effective Registration Statement, (ii) such Security has been exchanged for an Exchange Note or Exchange Notes (and related Guarantees) pursuant to an Exchange Offer which may be resold without restriction
under state and federal securities laws, (iii) such Security, Exchange Note or Private Exchange Note (and related Guarantees), as the case may be, ceases to be outstanding for purposes of the Indenture, or (iv) such Security, Exchange Note
or Private Exchange Note (and related Guarantees), as the case may be, may be resold without restriction pursuant to Rule 144 (or any similar provision then in force) under the Securities Act. 
 Registration Statement: Any registration statement of the Company and the Guarantors that covers any of the Securities, the Exchange Notes (and
related Guarantees) or the Private Exchange Notes (and related Guarantees) filed with the SEC under the Securities Act, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all
exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. 
 Rule
144: Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in
compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer of such securities being free of the registration and prospectus delivery requirements of the Securities Act. 
  

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 Rule 144A: Rule 144A promulgated under the Securities Act, as such Rule may be amended from time
to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC. 
 Rule 415: Rule 415 promulgated
under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. 
 SEC: The Securities and Exchange Commission. 
 Securities: See the introductory paragraphs hereof. 
 Securities Act: The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. 
 Shelf Notice: See Section 2 hereof. 
 Shelf Registration: See Section 3(b) hereof. 
 Subsequent Shelf Registration: See Section 3(b) hereof.

 TIA: The Trust Indenture Act of 1939, as amended. 
 Trustee: The trustee under the Indenture and, if existent, the trustee under any indenture governing the Exchange Notes (and the related Guarantees) and Private Exchange Notes (and the related Guarantees) (if
any). 
 Underwritten registration or underwritten offering: A registration in which securities of the Company are sold to an
underwriter for reoffering to the public. 
 2. Exchange Offer. 
 (a) The Company and the Guarantors shall use their respective reasonable best efforts to file with the SEC, no later than the Filing Date, a Registration
Statement (the “Exchange Offer Registration Statement”) on an appropriate registration form with respect to a registered offer (the “Exchange Offer”) to exchange any and all of the Registrable Notes for a like
aggregate principal amount of debt securities of the Company (guaranteed by the Guarantors) which are identical in all material respects to the Securities (the “Exchange Notes”), except that (i) the Exchange Notes (and the
Guarantors’ Guarantees thereof) shall have been registered pursuant to an effective Registration Statement under the Securities Act, shall not contain provisions for Additional Interest, and shall contain no restrictive legend thereon, and
(ii) interest thereon shall accrue from the last date on which interest was paid on the Notes or, if no such interest has been paid, from the Issue Date, and which Exchange Notes are entitled to the benefits of the Indenture or a trust
indenture which is identical in all material respects to the Indenture (other than such changes to the Indenture or any such identical trust indenture as are necessary to comply with any requirements of the SEC to effect or maintain the
qualification thereof under the TIA) 

  

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and which, in either case, has been qualified under the TIA. The Exchange Offer shall comply with all applicable tender offer rules and regulations under the
Exchange Act and other applicable law. The Company and the Guarantors shall use their respective reasonable best efforts to (x) cause the Exchange Offer Registration Statement to be declared effective under the Securities Act on or before the
Effectiveness Date; (y) keep the Exchange Offer open for not less than 30 days (or longer if required by applicable law) after the date that notice of such Exchange Offer is mailed to Holders; and (z) consummate such Exchange Offer on or
prior to the 525th day following the Issue Date. For purposes of this Section 2(a) only, if after the Exchange Offer Registration Statement is initially declared effective by the SEC, the Exchange Offer or the issuance of the Exchange Notes
thereunder is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, the Exchange Offer Registration Statement shall be deemed not to have become effective for purposes of
this Agreement during the period of such interference, until the Exchange Offer may legally resume. 
 Each Holder who participates in the
Exchange Offer will be required, as a condition to its participation in the Exchange Offer, to represent to the Company in writing (which may be contained in the applicable letter of transmittal) that (i) any Exchange Notes received by it will
be acquired in the ordinary course of its business, (ii) at the time of the consummation of the Exchange Offer such Holder will have no arrangement or understanding with any Person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes in violation of the provisions of the Securities Act, (iii) such Holder is not an affiliate of the Company or any Guarantor within the meaning of Rule 405 under the Securities Act or, if such Holder is such
an affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act with respect to resales of its Exchange Notes, to the extent applicable, (iv) if such Holder is not a broker-dealer, such Holder is
not engaged in, and does not intend to engage in, the distribution of Exchange Notes, (v) if such Holder is a broker-dealer that will receive Exchange Notes for its own account in exchange for Securities that were acquired as a result of
market-making or other trading activities (a “Participating Broker-Dealer”), such Holder will deliver a prospectus in connection with any resale of such Exchange Notes and (vi) such Holder is not acting on behalf of any Persons
who could not truthfully make the foregoing representations. 
 Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply, mutatis mutandis, solely with respect to Registrable Notes that are Private Exchange Notes, Exchange Notes as to which Section 2(c)(iv) is applicable and Exchange
Notes held by Participating Broker-Dealers, and the Company and the Guarantors shall have no further obligation to register Registrable Notes (other than Private Exchange Notes and other than in respect of any Exchange Notes as to which clause
2(c)(iv) hereof applies) pursuant to Section 3 hereof. 
 No securities other than the Exchange Notes shall be included in the Exchange
Offer Registration Statement. 
 (b) The Company and the Guarantors shall include within the Prospectus contained in the Exchange Offer
Registration Statement a section entitled “Plan of Distribution,” reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the
potential “underwriter” 

  

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status of any “Participating Broker-Dealer”, whether such positions or policies have been publicly disseminated by the staff of the SEC or such
positions or policies represent the prevailing views of the staff of the SEC. Such “Plan of Distribution” section shall also expressly permit the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the
Securities Act, including all Participating Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the Exchange Notes in compliance with the Securities Act. 
 The Company and the Guarantors shall use their respective best efforts to keep the Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such prospectus to be lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for such period of time as is necessary to comply with
applicable law in connection with any resale of the Exchange Notes covered thereby; provided, however, that such period shall not exceed 180 days after such Exchange Offer Registration Statement is declared effective (or such
longer period if extended pursuant to the last paragraph of Section 5 hereof) (the “Applicable Period”). 
 If, prior
to consummation of the Exchange Offer, an Initial Purchaser holds any Notes acquired by them and having, or which are reasonably likely to be determined to have, the status of an unsold allotment in an initial distribution, the Company and the
Guarantors upon the request of such Initial Purchaser shall simultaneously with the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to such Initial Purchaser, in exchange (each, a “Private Exchange”) for such
Notes held by such Initial Purchaser, a like principal amount of debt securities of the Company (guaranteed by the Guarantors) that are identical in all material respects to the Exchange Notes (the “Private Exchange Notes”) except
for the placement of a restrictive legend on such Private Exchange Notes (and which are issued pursuant to the same indenture as the Exchange Notes). If possible, the Private Exchange Notes shall bear the same CUSIP number as the Exchange Notes.

 In connection with each Exchange Offer, the Company and the Guarantors shall: 
 (1) mail, or cause to be mailed, to each Holder entitled to participate in the Exchange Offer a copy of the Prospectus forming part of the
Exchange Offer Registration Statement relating to such Exchange Offer, together with an appropriate letter of transmittal and related documents; 
 (2) use their respective reasonable best efforts to keep the Exchange Offer open for not less than 30 days after the date that notice of the Exchange Offer is mailed to Holders (or longer, if required by applicable
law); 
 (3) utilize the services of a depositary for the Exchange Offer which may be the Trustee or an affiliate thereof;

 (4) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on the last
Business Day on which the Exchange Offer remains open; and 
  

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 (5) otherwise comply in all material respects with all applicable laws, rules and
regulations of the United States. 
 As soon as practicable after the close of the Exchange Offer and the Private Exchange, if any, the
Company and the Guarantors shall: 
 (1) accept for exchange all Registrable Notes validly tendered and not validly withdrawn
pursuant to the Exchange Offer and the Private Exchange, if any; 
 (2) deliver to the Trustee for cancellation all
Registrable Notes so accepted for exchange; and 
 (3) cause the Trustee to authenticate and deliver promptly to each Holder
of Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Securities of such Holder so accepted for exchange; provided, however, that in the case of any Registrable Notes held in global form by a
depository, authentication and delivery to such depository of one or more Exchange Notes in global form in such amount shall satisfy such requirement. 
 The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than that (i) the Exchange Offer or Private Exchange, as the case may be, does not violate applicable law or any
applicable interpretation of the staff of the SEC, (ii) no action or proceeding is instituted or threatened in any court or by any governmental agency which might materially impair the ability of the Company and the Guarantors to proceed with
the Exchange Offer or the Private Exchange and no material adverse development has occurred in any existing action or proceeding with respect to the Company or the Guarantors that would materially impair the ability of the Company and the Guarantors
to consummate the Exchange Offer or the Private Exchange and (iii) all governmental approvals have been obtained, which approvals the Company and the Guarantors deem necessary for the consummation of the Exchange Offer or the Private Exchange.

 The Exchange Notes and the Private Exchange Notes shall be issued under (i) the Indenture or (ii) an indenture identical in all
material respects to the Indenture, which in either event has been qualified under the TIA or is exempt from such qualification and shall provide that the Exchange Notes shall not be subject to the transfer restrictions set forth in the Indenture.
The Indenture or such indenture shall provide that the Exchange Notes, the Private Exchange Notes and the Securities shall vote and consent together on all matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the
Securities will have the right to vote or consent as a separate class on any matter. 
 (c) If, (i) because of any change in law or in
currently prevailing interpretations of the staff of the SEC, the Company and the Guarantors are not permitted to effect the Exchange Offer, (ii) the Exchange Offer is not consummated within 525 days after the Issue Date, (iii) any Initial
Purchaser of Private Exchange Notes so requests, or (iv) in the case of any Holder that participates in the Exchange Offer, such Holder does not receive Exchange Notes on the date of the exchange that may be sold without restriction under state
and federal securities laws (other than due solely to the status of such Holder as an affiliate of the Company or any Guarantor 

  

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within the meaning of the Securities Act), in the case of each of clauses (i) to and including (iv) of this sentence, then the Company and the
Guarantors shall promptly deliver to the Holders and the Trustee written notice thereof (the “Shelf Notice”) and shall file a Shelf Registration pursuant to Section 3 hereof. 
 3. Shelf Registration. If at any time a Shelf Notice is delivered as contemplated by Section 2(c) hereof, then: 
 (a) Shelf Registration. The Company and the Guarantors shall file with the SEC a Registration Statement for an offering to be made
on a continuous basis pursuant to Rule 415 covering all of the Registrable Notes not exchanged in the Exchange Offer, Private Exchange Notes and Exchange Notes to which Section 2(c)(iv) is applicable (the “Initial Shelf
Registration”). The Company and the Guarantors shall use their respective reasonable best efforts to file with the SEC the Initial Shelf Registration on or prior to the Filing Date. The Initial Shelf Registration shall be on Form S-1 or
another appropriate form permitting registration of such Registrable Notes for resale by Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings). Neither the Company nor any Guarantor
shall permit any debt securities or securities convertible into or exchangeable for debt securities other than the Registrable Notes to be included in the Initial Shelf Registration or any Subsequent Shelf Registration (as defined below).

 The Company and the Guarantors shall use their respective best efforts to cause each Initial Shelf Registration to become
effective under the Securities Act on or prior to the Effectiveness Date and to keep such Initial Shelf Registration continuously effective under the Securities Act until the date which is two years from the Effectiveness Date, subject to extension
pursuant to the last paragraph of Section 5 hereof (the “Effectiveness Period”), or such shorter period ending when (i) all Registrable Notes covered by the Initial Shelf Registration have been sold in the manner set forth
and as contemplated in the Initial Shelf Registration or (ii) a Subsequent Shelf Registration covering all of the Registrable Notes covered by and not sold under the Initial Shelf Registration or an earlier Subsequent Shelf Registration has
become effective under the Securities Act; provided, however, that the Effectiveness Period in respect of the Initial Shelf Registration shall be extended to the extent required to permit dealers to comply with the applicable
prospectus delivery requirements of Rule 174 under the Securities Act and as otherwise provided herein. 
 (b) Subsequent
Shelf Registrations. If the Initial Shelf Registration or any earlier Subsequent Shelf Registration ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the Securities
registered thereunder or all of the Securities registered thereunder otherwise ceasing to constitute Registrable Notes), the Company and the Guarantors shall use their respective reasonable best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within 45 days of such cessation of effectiveness amend the Initial Shelf Registration in a manner to obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional “shelf” Registration Statement pursuant to Rule 415 covering all of the Registrable Notes covered by and not sold under 

  

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the Initial Shelf Registration or an earlier Subsequent Shelf Registration (each, a “Subsequent Shelf Registration”). If a Subsequent Shelf
Registration is filed, the Company and the Guarantors shall use their respective reasonable best efforts to cause the Subsequent Shelf Registration to become effective under the Securities Act as soon as practicable after such filing and to keep
such Registration Statement continuously effective for a period equal to the number of days in the Effectiveness Period less the aggregate number of days during which the Initial Shelf Registration or any Subsequent Shelf Registration was previously
continuously effective. As used herein the term “Shelf Registration” means the Initial Shelf Registration and any Subsequent Shelf Registration. 
 (c) Supplements and Amendments. The Company and the Guarantors shall promptly supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration, if required by the Securities Act, or if reasonably requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement or by any underwriter of such Registrable Notes. 
 4. Additional Interest

 (a) The Company, the Guarantors and the Initial Purchasers agree that the Holders will suffer damages if the Company and the Guarantors
fail to fulfill their obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Company and the Guarantors agree to pay, as liquidated
damages, additional interest on the Notes (“Additional Interest”) under the circumstances and to the extent set forth below (each of which shall be given independent effect): 
 (i) if (A) neither the Exchange Offer Registration Statement nor the Initial Shelf Registration covering all Registrable Notes whose
Holders’ have provided all information reasonably requested by the Company pursuant to Section 5 hereof has been filed with the SEC within 395 days after the Issue Date or (B) notwithstanding that the Company and the Guarantors have
consummated or will consummate an Exchange Offer, the Company and the Guarantors are required to file a Shelf Registration and such Shelf Registration is not filed on or prior to the Filing Date applicable thereto, then, commencing on the day after
any such Filing Date, Additional Interest shall accrue on the principal amount of the Notes at a rate of 0.25% per annum for the first 90 days immediately following each such Filing Date, such Additional Interest rate increasing by an
additional 0.25% per annum at the beginning of each subsequent 90-day period; 
 (ii) if (A) neither the Exchange
Offer Registration Statement nor the Initial Shelf Registration covering all Registrable Notes whose Holders’ have provided all information reasonably requested by the Company pursuant to Section 5 hereof is declared effective by the SEC
on or prior to the relevant Effectiveness Date or (B) notwithstanding that the Company and the Guarantors have consummated or will consummate the Exchange Offer, the Company and the Guarantors are required to file a Shelf Registration and such
Shelf Registration does not become effective on or prior to the Effectiveness Date in respect of such Shelf Registration, then, commencing on the day after such Effectiveness Date, Additional Interest shall accrue on the principal amount of the
Notes at a 

  

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rate of 0.25% per annum for the first 90 days immediately following the day after such Effectiveness Date, such Additional Interest rate increasing by
an additional 0.25% per annum at the beginning of each subsequent 90-day period; and 
 (iii) if (A) the Company and
the Guarantors have not exchanged Exchange Notes for all Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to the 525th day after the Issue Date and a Shelf Registration Statement covering all Registrable Notes
whose Holders’ have provided all information reasonably requested by the Company pursuant to Section 5 hereof has not become effective or (B) if applicable, a Shelf Registration has become effective and such Shelf Registration ceases
to be effective at any time during the Effectiveness Period (other than after such time as all Notes have been disposed of thereunder), then Additional Interest shall accrue on the principal amount of the Notes at a rate of 0.25% per annum for
the first 90 days commencing on the (x) 526th day after the Issue Date, in the case of (A) above, or (y) the day such Shelf Registration ceases to be effective in the case of (B) above, such Additional Interest rate increasing by
an additional 0.25% per annum at the beginning of each such subsequent 90-day period; 
 provided, however, that Additional Interest on
the Notes may not accrue under more than one of the foregoing clauses (i), (ii) or (iii) at any one time and at no time shall the aggregate amount of Additional Interest accruing exceed in the aggregate 1% per annum; provided,
further, however, that (1) upon the filing of the Exchange Offer Registration Statement or a Shelf Registration as required hereunder (in the case of clause (a)(i) of this Section 4), (2) upon the effectiveness of the
Exchange Offer Registration Statement or a Shelf Registration as required hereunder (in the case of clause (a)(ii) of this Section 4), or (3) upon the exchange of Exchange Notes for all Notes tendered (in the case of clause (a)(iii)(A) of
this Section 4), or upon the effectiveness of a Shelf Registration which had ceased to remain effective (in the case of (a)(iii)(B) of this Section 4), Additional Interest on the Notes as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue. It is understood and agreed that, notwithstanding any provision to the contrary, so long as any Registrable Note is then covered by an effective Shelf Registration Statement, no Additional
Interest shall accrue on such Registrable Security. 
 (b) The Company and the Guarantors shall notify the Trustee within two business days
after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an “Event Date”). Any amounts of Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this
Section 4 will be payable in cash semi-annually on each May 15 and November 15 (to the holders of record on the May 1 and November 1 immediately preceding such dates), commencing with the first such date occurring after any
such Additional Interest commences to accrue. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Registrable Notes, multiplied by a fraction, the numerator of
which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and the
denominator of which is 360. 
 5. Registration Procedures. In connection with the filing of any Registration Statement pursuant to
Sections 2 or 3 hereof, the Company and the Guarantors shall effect such 

  

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registrations to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant
thereto and in connection with any Registration Statement filed by the Company and the Guarantors hereunder the Company and the Guarantors shall: 
 (a) Prepare and file with the SEC prior to the applicable Filing Date, a Registration Statement or Registration Statements as prescribed by Sections 2 or 3 hereof, and use their respective best efforts to cause each
such Registration Statement to become effective and remain effective as provided herein; provided, however, that, if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto, before filing any
Registration Statement or Prospectus or any amendments or supplements thereto, the Company and the Guarantors shall furnish to and afford the Holders of the Registrable Notes covered by such Registration Statement or each such Participating
Broker-Dealer, as the case may be, their counsel and the managing underwriters, if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits
thereto) proposed to be filed (in each case at least five business days prior to such filing, or such later date as is reasonable under the circumstances). Neither the Company nor any Guarantor shall file any Registration Statement or Prospectus or
any amendments or supplements thereto if the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement, or any such Participating Broker-Dealer, as the case may be, their counsel, or the
managing underwriters, if any, shall reasonably object. 
 (b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration or Exchange Offer Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period or the Applicable Period,
as the case may be; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; and comply with the provisions of the Securities Act and the Exchange Act applicable to each of them with respect to the disposition of all securities covered by such Registration Statement as so amended or described in such
Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus. The Company and the Guarantors shall be deemed not to have used their respective
best efforts to keep a Registration Statement effective during the Effectiveness Period or the Applicable Period, as the case may be, relating thereto if the Company or any Guarantor, as the case may be, voluntarily takes any action that would
result in selling Holders of the Registrable Notes covered thereby or Participating Broker-Dealers seeking to sell Exchange Notes not being able to sell such Registrable Notes or such Exchange Notes during that period unless (i) such action is
required by applicable law or (ii) such action is taken by each of them in good faith and for valid business reasons (not including avoidance of any of its obligations hereunder), including the acquisition or divestiture of assets. 

 

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 (c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto from whom the Company has received written notice that it will be a Participating Broker-Dealer in the Exchange Offer, notify the selling Holders of Registrable Notes, or each such Participating Broker-Dealer, as
the case may be, their counsel and the managing underwriters, if any, promptly (but in any event within two Business Days), and confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request, obtain, at the
sole expense of the Company and the Guarantors, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and
exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation of any proceedings for that
purpose, (iii) if, at any time when a prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers, the representations and
warranties of the Company and the Guarantors contained in any agreement (including any underwriting agreement) contemplated by Section 5(m) hereof cease to be true and correct in all material respects, (iv) of the receipt by the Company or
any Guarantor of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer for
offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the existence of any condition or any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in or amendments or supplements to such
Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and (vi) of the determination by the Company and the Guarantors that a post-effective amendment to a Registration Statement would be appropriate. 
 (d) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 

  

 -12- 

 
hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
use their respective reasonable best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption
from qualification) of any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued, to use their respective reasonable best efforts to obtain the
withdrawal of any such order at the earliest possible moment. 
 (e) If a Shelf Registration is filed pursuant to
Section 3 and if requested by the managing underwriter or underwriters (if any), the Holders of a majority in aggregate principal amount of the Registrable Notes being sold in connection with an underwritten offering or any Participating
Broker-Dealer, (i) promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters (if any), such Holders, any Participating Broker-Dealer or counsel for any of them
reasonably determine is necessary to be included therein, (ii) make all required filings of such prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment, and (iii) supplement or make amendments to such Registration Statement. 
 (f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to
be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, furnish to each selling Holder of Registrable Notes and to each such Participating Broker-Dealer who so requests
and to counsel and each managing underwriter, if any, at the sole expense of the Company and the Guarantors, one conformed copy of the Registration Statement or Registration Statements and each post-effective amendment thereto, including financial
statements and schedules, and, if requested, all documents incorporated or deemed to be incorporated therein by reference and all exhibits. 
 (g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to
be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, deliver to each selling Holder of Registrable Notes, or each such Participating Broker-Dealer, as the case may
be, their respective counsel, and the underwriters, if any, at the sole expense of the Company, as many copies of the Prospectus or Prospectuses (including each form of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, the Company and the Guarantors hereby consent to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers (if any), in connection with the offering and sale of the
Registrable Notes covered by, or the sale by Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto. 
  

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 (h) Prior to any public offering of Registrable Notes or any delivery of a Prospectus
contained in the Exchange Offer Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, to use their respective reasonable best efforts to register or qualify, and to cooperate with
the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the managing
underwriter or underwriters reasonably request; provided, however, that where Exchange Notes held by Participating Broker-Dealers or Registrable Notes are offered other than through an underwritten offering, the Company and the
Guarantors agree to cause their counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 5(h), keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Exchange Notes held by
Participating Broker-Dealers or the Registrable Notes covered by the applicable Registration Statement; provided, further, that neither the Company nor any Guarantor shall be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not then so subject. 
 (i) If a Shelf Registration is filed pursuant to
Section 3 hereof, reasonably cooperate with the selling Holders of Registrable Notes and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be
sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Notes to be in such denominations and registered in such names as the managing
underwriter or underwriters, if any, or Holders may request. 
 (j) Use their respective reasonable best efforts to cause the
Registrable Notes covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be reasonably necessary to enable the seller or sellers thereof or the underwriter or underwriters,
if any, to consummate the disposition of such Registrable Notes, except as may be required solely as a consequence of the nature of such selling Holder’s business, in which case the Company and the Guarantors will cooperate in all reasonable
respects with the filing of such Registration Statement and the granting of such approvals. 
 (k) If (1) a Shelf
Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 

  

 -14- 

 
hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
upon the occurrence of any event contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole expense of the Company, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers
of the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus will not contain an 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 light of the circumstances under which they were made, not misleading. 
 (l) Prior to the effective date of the first Registration Statement relating to the Registrable Notes, (i) provide the Trustee with
certificates for the Registrable Notes in a form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number and an ISIN number for the Registrable Notes. 
 (m) In connection with any underwritten offering of Registrable Notes pursuant to a Shelf Registration, enter into an underwriting
agreement as is customary in underwritten offerings of debt securities similar to the Securities and take all such other actions as are reasonably requested by the managing underwriter or underwriters in order to expedite or facilitate the
registration or the disposition of such Registrable Notes and, in such connection, (i) make such representations and warranties to, and covenants with, the underwriters with respect to the business of the Company, the Guarantors and their
respective subsidiaries (including any acquired business, properties or entity, if applicable) and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Securities, and confirm the same in writing if and when requested; (ii) obtain the written opinions of counsel to the Company and the
Guarantors and written updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters, addressed to the underwriters covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by the managing underwriter or underwriters; (iii) obtain “cold comfort” letters and updates thereof in form, scope and substance reasonably satisfactory to the managing
underwriter or underwriters from the independent registered public accounting firm of the Company and the Guarantors (and, if necessary, any other independent registered public accounting firm of any subsidiary of the Company or any Guarantor or of
any business acquired by the Company or any Guarantor for which financial statements and financial data are, or are required to be, included or incorporated by reference in the Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings and such other matters as reasonably requested by the managing underwriter or
underwriters as permitted by the Statement on Auditing Standards 

  

 -15- 

 
No. 72; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable
than those set forth in Section 7 hereof (or such other provisions and procedures acceptable to Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be indemnified pursuant to said Section. The above shall be done as and to the extent required by such underwriting agreement. 
 (n) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make available for inspection by
any selling Holder of such Registrable Notes being sold, or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Notes, if any, and any attorney, accountant or other agent
retained by any such selling Holder or each such Participating Broker-Dealer, as the case may be, or underwriter (collectively, the “Inspectors”), at the offices where normally kept, during reasonable business hours, all financial
and other records, pertinent corporate documents and instruments of the Company, the Guarantors and their respective subsidiaries (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and employees of the Company, the Guarantors and their respective subsidiaries to supply all information reasonably requested by any such Inspector in connection with such
Registration Statement or Prospectus. Records which the Company determines, in good faith, to be confidential and any Records which the Company notifies the Inspectors in writing are confidential shall not be disclosed by the Inspectors unless
(i) the disclosure of such Records is necessary or advisable to avoid or correct a misstatement or omission in such Registration Statement, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, (iii) disclosure of such information is necessary or advisable in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving such Inspector and arising out of, based
upon, relating to, or involving this Agreement or the Purchase Agreement, or any transactions contemplated hereby or thereby or arising hereunder or thereunder; provided, however, that prior notice shall be provided as soon as
practicable to the Company of the potential disclosure of any information by such Inspector pursuant to clauses (ii) or (iii) of this sentence to permit the Company and the Guarantors to obtain a protective order (or waive the provisions
of this paragraph (n)) and that such Inspector shall take such actions as are reasonably necessary to protect the confidentiality of such information (if practicable) to the extent such action is otherwise not inconsistent with, an impairment of or
in derogation of the rights and interests of the Holder or any Inspector, or (iv) the information in such Records has been made generally available to the public other than as a result of a breach of this Agreement. 
 (o) Provide an indenture trustee for the Registrable Notes or the Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be qualified under the TIA not later than the 

  

 -16- 

 
effective date of the first Registration Statement relating to the Registrable Notes; and in connection therewith, reasonably cooperate with the trustee
under any such indenture and the Holders of the Registrable Notes, to effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use their respective
reasonable best efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner.

 (p) Comply in all material respects with all applicable rules and regulations of the SEC and make generally available to
their respective securityholders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Notes are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company after the effective date of a Registration Statement, which statements shall cover said
12-month periods. 
 (q) Upon consummation of the Exchange Offer or a Private Exchange, obtain an opinion of counsel to the
Company and the Guarantors, in a form customary for underwritten transactions, addressed to the Trustee for the benefit of all Holders of Registrable Notes participating in the Exchange Offer or the Private Exchange, as the case may be, that the
Exchange Notes or Private Exchange Notes, as the case may be, and the related indenture constitute legal, valid and binding obligations of the Company (and the Guarantors, in the case of the guarantees thereof) enforceable against the Company (and
the Guarantors, in the case of the guarantees thereof) in accordance with their terms, subject to customary exceptions and qualifications. 
 (r) If the Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Notes by Holders to the Company (or to such other Person as directed by the Company) in exchange for the Exchange
Notes or the Private Exchange Notes, as the case may be, the Company shall mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are being cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as
the case may be; in no event shall such Registrable Notes be marked as paid or otherwise satisfied. 
 (s) Reasonably
cooperate with each seller of Registrable Notes covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be
made with the National Association of Securities Dealers, Inc. (the “NASD”). 
 (t) Use their respective
reasonable best efforts to take all other steps necessary or advisable to effect the registration of the Exchange Notes and/or Registrable Notes covered by a Registration Statement contemplated hereby. 
  

 -17- 

 The Company and the Guarantors may require each seller of Registrable Notes as to which any registration
is being effected to furnish to the Company such information regarding such seller and the distribution of such Registrable Notes as the Company may, from time to time, reasonably request. The Company may exclude from such registration the
Registrable Notes of any seller if such seller fails to furnish such information within 20 Business Days after receiving such request. Each seller as to which any registration is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information previously furnished to the Company by such seller not materially misleading. 
 If any such Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Company or any Guarantor, then such Holder shall have the right to require (i) the insertion therein of language, in
form and substance reasonably satisfactory to such Holder, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the securities covered thereby and
that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company or such Guarantor, or (ii) in the event that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar federal statute then in force, the deletion of the reference to such Holder in any amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be
required. 
 Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of such Registrable Notes or
Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, that, upon actual receipt of any notice from the Company (x) of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or
5(c)(vi) hereof or (y) that the Board of Directors of the Company has resolved that the Company has a bona fide business purpose for doing so (including the acquisition or divestiture of assets or a material corporate transaction or
event), then, upon providing such notice (which shall refer to the final paragraph of this Section 5), the Company may delay the filing or the effectiveness of the Exchange Offer Registration Statement or the Shelf Registration (if not then
filed or effective, as applicable) and shall not be required to maintain the effectiveness thereof or amend or supplement the Exchange Offer Registration Statement or the Shelf Registration, in all cases, for a period (a “Delay
Period”) expiring upon the earlier to occur of (i) in the case of the immediately preceding clause (x), such Holder’s or Participating Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto or
(ii) in the case of the immediately preceding clause (y), the date which is the earlier of (A) the date on which such business purpose ceases to interfere with the Issuers’ obligations to file or maintain the effectiveness of any
such Registration Statement pursuant to this Agreement or (B) 60 days after the Company notifies the Holders of such good faith determination. There shall not be more than 60 days of Delay Periods during any 12-month period. The maximum length
of the Applicable Period set forth in Section 3(a) shall be extended by a number of days equal to the number of days during any Delay Period. Any Delay Period will not alter the obligations of the Issuers to pay Additional Interest under the
circumstances set forth in Section 4 hereof. 
  

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 6. Registration Expenses. All fees and expenses incident to the performance of or compliance with
this Agreement by the Company and the Guarantors shall be borne by the Company and the Guarantors, whether or not any Exchange Offer or any Shelf Registration is filed or becomes effective or the Exchange Offer is consummated, including, without
limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the NASD in connection with an underwritten offering and (B) fees and expenses of compliance
with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and determination of the eligibility of the
Registrable Notes or Exchange Notes for investment under the laws of such jurisdictions (x) where the holders of Registrable Notes are located, in the case of the Exchange Notes, or (y) as provided in Section 5(h) hereof, in the case
of Registrable Notes or Exchange Notes to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including, without limitation, expenses of printing certificates for Registrable Notes or Exchange Notes
in a form eligible for deposit with The Depository Trust Company and of printing prospectuses if the printing of prospectuses is requested by the managing underwriter or underwriters, if any, or by the Holders of a majority in aggregate principal
amount of the Registrable Notes included in any Registration Statement or in respect of Registrable Notes or Exchange Notes to be sold by any Participating Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger,
telephone and delivery expenses of the Company and the Guarantors, (iv) fees and disbursements of counsel for the Company and the Guarantors and reasonable fees and disbursements of one special counsel for all of the sellers of Registrable
Notes (exclusive of any counsel retained pursuant to Section 7 hereof), (v) fees and disbursements of all independent registered public accounting firm referred to in Section 5(m)(iii) hereof (including, without limitation, the
expenses of any special audit and “cold comfort” letters required by or incident to such performance), (vi) Securities Act liability insurance, if the Company and the Guarantors desire such insurance, (vii) fees and expenses of
all other Persons retained by the Company and the Guarantors, (viii) internal expenses of the Company and the Guarantors (including, without limitation, all salaries and expenses of officers and employees of the Company and the Guarantors
performing legal or accounting duties), (ix) the expense of any annual audit, (x) the fees and expenses incurred by the Company and the Guarantors in connection with the listing of the securities to be registered on any securities
exchange, and the obtaining of a rating of these securities, in each case, if applicable, and (xi) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agreements, indentures and any
other documents necessary in order to comply with this Agreement. 
 7. Indemnification. 
 (a) The Company and each Guarantor, jointly and severally, agree to indemnify and hold harmless each Holder of Registrable Notes and each Participating
Broker Dealer selling Exchange Notes during the Applicable Period, their respective officers and directors, each person, if any, who controls any such Person, within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, the agents, employees, officers and directors of each Holder and each such Participating Broker-Dealer and the agents, partners, members, employees, officers, managers and directors of any such controlling Person (each, a
“Participant”) from and against any and all losses, liabilities, claims, damages and expenses whatsoever (including, 

  

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but not limited to, reasonable attorneys’ fees and any and all reasonable expenses whatsoever actually incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and any and all reasonable amounts paid in settlement of any claim or litigation) (collectively, “Losses”) to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement
(or any amendment thereto) or Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus, in the light of the circumstances under which they were made, not misleading, provided that
(i) the foregoing indemnity shall not be available to any Participant insofar as such Losses are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information
relating to such Participant furnished to the Company in writing by or on behalf of such Participant expressly for use therein. 
 (b) Each
Participant agrees, severally and not jointly, to indemnify and hold harmless the Company, each Guarantor, each Person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, and each of their respective agents, partners, members, employees, officers and members of the board of directors from and against any Losses to which they or any of them may become subject under the
Securities Act, the Exchange Act or otherwise insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any
amendment thereto) or Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by, arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but
only to the extent, that any such Loss arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information relating to such Participant furnished in
writing to the Company by or on behalf of such Participant expressly for use therein. 
 (c) Promptly after receipt by an indemnified party
under subsection 7(a) or 7(b) above of notice of the commencement of any action, suit or proceeding (collectively, an “action”), such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement of such action (but the failure so to notify an indemnifying party shall not relieve such indemnifying party from any
liability that it may have under this Section 7 except to the extent that it has been prejudiced in any material respect by such failure). In case any such action is brought against any indemnified party, and it notifies an indemnifying party
of the commencement of such action, the indemnifying party will be entitled to participate in such action, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense 

  

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of such action with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such action, but the reasonable fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized
in writing by the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to take charge of the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) the named parties to such action (including any impleaded parties) include such indemnified party and the indemnifying party or parties (or such indemnifying parties have assumed the defense of such action),
and such indemnified party or parties shall have reasonably concluded, after consultation with counsel, that there may be defenses available to it or them that are different from or additional to those available to one or all of the indemnifying
parties (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such reasonable fees and expenses of counsel shall be borne by the
indemnifying parties. In no event shall the indemnifying party be liable for the reasonable fees and expenses of more than one counsel (together with appropriate local counsel) at any time for all indemnified parties in connection with any one
action or separate but substantially similar or related actions arising in the same jurisdiction out of the same general allegations or circumstances. Any such separate firm for the Participants shall be designated in writing by Participants who
sold a majority in interest of Registrable Notes sold by all such Participants and shall be reasonably acceptable to the Company and any such separate firm for the Issuers, their affiliates, officers, directors, representatives, employees and agents
and such control Person of such Issuers shall be designated in writing by such Issuers and shall be reasonably acceptable to the Holders. An indemnifying party shall not be liable for any settlement of any claim or action effected without its
written consent, which consent may not be unreasonably withheld. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by paragraph (a) or (b) of this Section 7, then the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement
and (iii) such indemnified party shall have given the indemnifying party at least 45 days’ prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (x) includes an
unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (y) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party. 
 (d) In order to provide for contribution in circumstances in which the indemnification provided for in this
Section 7 is for any reason held to be unavailable from the indemnifying party for any Losses referred to therein, or is insufficient to hold harmless a party indemnified under this Section 7 for any Losses referred to therein, each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such aggregate 

  

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Losses (i) in such proportion as is appropriate to reflect the relative benefits received by each indemnifying party, on the one hand, and each
indemnified party, on the other hand, from the sale of the Notes to the Initial Purchasers or the resale of the Registrable Notes by such Holder, as applicable, or (ii) if such allocation is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of each indemnified party, on the one hand, and each indemnifying party, on the other hand, in connection with the
statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors, on the one hand, and each Participant, on the other hand, shall be deemed
to be in the same proportion as (x) the total proceeds from the sale of the Notes to the Initial Purchasers (net of discounts and commissions but before deducting expenses) received by the Issuers are to (y) the total net profit received
by such Participant in connection with the sale of the Registrable Notes. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Company or the Guarantors or such Participant and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission or alleged statement or omission. 
 (e) The parties agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to above. Notwithstanding the provisions of this Section 7,
(i) in no case shall any Participant be required to contribute any amount in excess of the amount by which the net profit received by such Participant in connection with the sale of the Registrable Notes exceeds the amount of any damages that
such Participant has otherwise been required to pay by reason of any untrue or alleged untrue statement or omission or alleged omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made against another party or parties under this Section 7, notify such party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this Section 7 or otherwise, except to the extent that it has been prejudiced in any material respect by such failure;
provided, however, that no additional notice shall be required with respect to any action for which notice has been given under this Section 7 for purposes of indemnification. Anything in this section to the contrary
notwithstanding, no party shall be liable for contribution with respect to any action or claim settled without its written consent, provided, however, that such written consent was not unreasonably withheld. 
 8. Rules 144 and 144A. The Company covenants that it will use its reasonable best efforts to file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in a timely manner in accordance with the requirements of the Securities Act and the Exchange Act and, for so long as any Registrable Notes remain
outstanding, if at any time the Company is not required to file such 

  

 -22- 

 
reports, it will, upon the request of any Holder or beneficial owner of Registrable Notes, make available such information necessary to permit sales pursuant
to Rule 144A under the Securities Act. The Company further covenants that, for so long as any Registrable Notes remain outstanding, it will use its reasonable best efforts to take such further action as any Holder of Registrable Notes may reasonably
request, all to the extent required from time to time to enable such holder to sell Registrable Notes without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144(k) and Rule 144A under the
Securities Act, as such Rules may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the SEC. Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to require the Company to register
any of its securities pursuant to the Exchange Act. 
 9. Underwritten Registrations. If any of the Registrable Notes covered by any
Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such
Registrable Notes included in such offering and reasonably acceptable to the Company. 
 No Holder of Registrable Notes may participate in
any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements
and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 
 10. Miscellaneous. 
 (a) No
Inconsistent Agreements. Neither the Company nor any Guarantor has, as of the date hereof, and neither the Company nor any Guarantor shall, after the date of this Agreement, enter into any agreement with respect to any of its securities that is
inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company’s or any Guarantor’s other issued and outstanding securities under any such agreements. Neither the Company nor any Guarantor will enter into any agreement with respect to any of its
securities which will grant to any Person piggy-back registration rights with respect to any Registration Statement. 
 (b) Adjustments
Affecting Registrable Notes. Neither the Company nor any Guarantor shall, directly or indirectly, take any action with respect to the Registrable Notes as a class that would adversely affect the ability of the Holders of Registrable Notes to
include such Registrable Notes in a registration undertaken pursuant to this Agreement. 
 (c) Amendments and Waivers. The provisions
of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of (I) the Company and the Guarantors and
(II)(A) the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Notes and (B) in circumstances that would adversely affect 

  

 -23- 

 
the Participating Broker-Dealers, the Participating Broker-Dealers holding not less than a majority in aggregate principal amount of the Exchange Notes held
by all Participating Broker-Dealers; provided, however, that Section 7 and this Section 10(c) may not be amended, modified or supplemented without the prior written consent of each Holder and each Participating Broker-Dealer
(including any person who was a Holder or Participating Broker-Dealer of Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to any Registration Statement) affected by any such amendment, modification or supplement.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Notes whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of the Registrable Notes being sold
by such Holders pursuant to such Registration Statement. 
 (d) Notices. All notices and other communications (including without
limitation any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or facsimile: 
 (i) if to a Holder of Registrable Notes or any Participating Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the registrar under the Indenture. 
 (ii) if to the Company or
any Guarantor at the address as follows: 
 Constellation Brands, Inc. 
 370 Woodcliff Drive, Suite 300, 
 Fairport, New York 14450 
 Attention: General Counsel 
 Facsimile: 585-218-3904 
 with a copy to: 
 McDermott, Will & Emery 
 227 West Monroe Street 
 Chicago, Illinois 60606-5096 
 Attention: Bernard Kramer, Esq. 
 Facsimile: (312) 984-7700 
  

 -24- 

 (iii) if to the Initial Purchasers at the address as follows: 
 BANC OF AMERICA SECURITIES LLC 
 9 West 57th Street 
 New York , NY 10019 
 Attention: Legal Department 
 Facsimile: (212) 901-7897 
 with a copy to: 
 Cahill Gordon & Reindel LLP 
 80 Pine Street 
 New York, New York 10005 
 Attention: Daniel J. Zubkoff 
 Facsimile: (212) 269-5420 
 All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; one Business Day after being
timely delivered to a next-day air courier; and when receipt is acknowledged by the addressee, if sent by facsimile. 
 Copies of all such
notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address and in the manner specified in such Indenture. 
 (e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties
hereto, the Holders and the Participating Broker-Dealers; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign
holds Registrable Notes. 
 (f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto
in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 
 (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
 (h) Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. 
  

 -25- 

 (i) Severability. If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties hereto that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable. 
 (j) Securities Held by the Company or Its Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Notes is required hereunder, Registrable Notes held by the Company, the Guarantors or any of their affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage. 
 (k) Third Party Beneficiaries. Holders of Registrable
Notes and Participating Broker-Dealers are intended third party beneficiaries of this Agreement and this Agreement may be enforced by such Persons. 
 (l) Entire Agreement. This Agreement, together with the Purchase Agreement and the Indenture, is intended by the parties as a final and exclusive statement of the agreement and understanding of the parties hereto in respect of the
subject matter contained herein and therein and any and all prior oral or written agreements, representations, or warranties, contracts, understandings, correspondence, conversations and memoranda between the Holders on the one hand and the Company
and the Guarantors on the other, or between or among any agents, representatives, parents, subsidiaries, affiliates, predecessors in interest or successors in interest with respect to the subject matter hereof and thereof are merged herein and
replaced hereby. 
 (m) Additional Amounts of Securities. The Securities are limited in aggregate principal amount to $700,000,000.
Additional amounts of Securities may be issued in one or more series from time to time under the Indenture (collectively “Additional Notes”) prior to the filing of any Registration Statement. The Company and the Guarantors shall
provide the registration rights set forth under this Agreement to the Initial Purchasers and any subsequent holder or holders of such Additional Notes and notwithstanding anything contained herein may but are not obligated to include such Additional
Notes in any Registration Statement filed hereunder. 
  

 -26- 

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

  

			
	CONSTELLATION BRANDS, INC.
		
	By:	 	 /s/ Thomas D. Roberts

	Name:	 	Thomas D. Roberts
	Title:	 	Senior Vice President and Treasurer
	
	GUARANTORS
	
	ALLBERRY, INC.
	CLOUD PEAK CORPORATION
	CONSTELLATION TRADING COMPANY, INC
	CONSTELLATION WINES U.S., INC.
	FRANCISCAN VINEYARDS, INC.
	MT. VEEDER CORPORATION
	R.M.E., INC.
	THE ROBERT MONDAVI CORPORATION
	ROBERT MONDAVI AFFILIATES
	ROBERT MONDAVI INVESTMENTS
	ROBERT MONDAVI PROPERTIES, INC.
	ROBERT MONDAVI WINERY
		
	By:	 	 /s/ Thomas D. Roberts

	Name:	 	Thomas D. Roberts
	Title:	 	Vice President and Assistant Treasurer
	
	BARTON INCORPORATED
	BARTON BRANDS, LTD.
	BARTON BEERS, LTD.

  

 S-1 

			
	BARTON BEERS OF WISCONSIN, LTD.
	BARTON BRANDS OF CALIFORNIA, INC.
	BARTON BRANDS OF GEORGIA, INC.
	BARTON CANADA, LTD.
	BARTON DISTILLERS IMPORT CORP.
	BARTON FINANCIAL CORPORATION
	VINCOR INTERNATIONAL PARTNERSHIP
	VINCOR INTERNATIONAL II, LLC
	VINCOR HOLDINGS, INC.
	R.H. PHILLIPS, INC.
	THE HOGUE CELLARS, LTD.
	VINCOR FINANCE, LLC
	BARTON SMO HOLDINGS LLC
	ALCOFI INC.
	SPIRITS MARQUE ONE LLC
		
	By:	 	 /s/ Thomas D. Roberts

	Name:	 	Thomas D. Roberts
	Title:	 	Vice President
	
	CONSTELLATION LEASING, LLC
		
	By:	 	 /s/ Thomas D. Roberts

	Name:	 	Thomas D. Roberts
	Title:	 	Assistant Treasurer

  

 S-2 

			
	INITIAL PURCHASERS
	
	BANC OF AMERICA SECURITIES LLC
	
	CITIGROUP GLOBAL MARKETS INC.
		
	By:	 	BANC OF AMERICA SECURITIES LLC
		
	By:	 	 /s/ Stephan Jaeger

	Name:	 	
	Title:	 	

  

 S-3Bank Incentive Compensation Plan (BICP) -Annual Plan for President and CEO

 Exhibit 10.3 
 FEDERAL HOME LOAN BANK OF SEATTLE 

 Bank Incentive Compensation Plan (BICP) –
Annual Plan for President and CEO 
 As of January 1, 2007 

 FEDERAL HOME LOAN BANK OF SEATTLE 

 Bank Incentive Compensation Plan (BICP) – Annual Plan 
 TABLE OF CONTENTS 
  

					
	 	  	Page
	 1.0
	  	 Plan Objectives
	  	1
	 2.0
	  	 Definitions
	  	1
	 3.0
	  	 Eligibility
	  	2
	 4.0
	  	 Incentive Award Opportunity
	  	2
	 5.0
	  	 Performance Measures
	  	2
	 6.0
	  	 Award Determination
	  	3
	 7.0
	  	 Award Conditions
	  	4
	 8.0
	  	 Participant Performance Reviews
	  	4
	 9.0
	  	 Plan Communication
	  	4
	 10.0
	  	 Administrative Control
	  	4
	 11.0
	  	 Miscellaneous Conditions
	  	4
		
	 Appendix A: 2007 Plan Year
	  	7
		  	 Table 1 – Incentive Award Opportunity
	  	8

 FEDERAL HOME LOAN BANK OF SEATTLE 

 Incentive Compensation Plan 
 PLAN DOCUMENT

  

	1.0	Plan Objectives 

  

	 	1.1	The purpose of the Federal Home Loan Bank of Seattle’s Incentive Compensation Plan (Plan) is to achieve four objectives: 

  

	 	1.1.1	Promote the achievement of the Bank’s annual business goals in accordance with the business plan; 

  

	 	1.1.2	Link compensation to specific Bankwide and individual performance measures; 

  

	 	1.1.3	Provide a competitive reward structure for officers and other exempt employees; and 

  

	 	1.1.4	Provide a vehicle for closer Board involvement and communication with management regarding Bank strategic plans. 

  

	 	1.2	The Plan is a cash-based, annual incentive plan that establishes individual award opportunities related to achievement of Bank and individual performance. 

 

	 	1.3	The award opportunity, Performance Measures, and other relevant information for a Plan Year are set forth in the attached Appendix. 

  

	2.0	Definitions 

  

	 	2.1	When used in this Plan, the following words and phrases shall have the following meaning: 

  

	 	2.1.1	Bank means the Federal Home Loan Bank of Seattle. 

  

	 	2.1.2	Base Salary is defined as the Participant’s normal rate of pay, including overtime, before any other add-ons (ie. Bonuses, incentive pay, etc.) and after any adjustments
(i.e. Leave w/o pay). 

  

	 	2.1.3	Board means the Bank’s Board of Directors. 

  

	 	2.1.4	Committee means the Governance, Budget and Compensation Committee of the Board. 

  

	 	2.1.5	Disability means the Participant is receiving benefits under the Federal Home Loan Bank of Seattle’s Long Term Disability Plan. 

  

	 	2.1.6	Participant means the President of the Bank for this specific plan. 

  

 1 

	 	2.1.7	Plan means this Incentive Compensation Plan. 

  

	 	2.1.8	Plan Year means the calendar year, January 1 through December 31, over which both Bank and Participant performance is measured. 

  

	 	2.1.9	President means the President of the Bank. 

  

	3.0	Eligibility 

  

	 	3.1	The President is an eligible participant under this Plan, effective January 1, 2007. 

  

	4.0	Incentive Award Opportunity 

  

	 	4.1	Each Plan Year, the Bank will provide an award opportunity to the President. The award opportunity shall be a percentage of the annual base salary as described in Appendix A Table 1
– Incentive Award Opportunity. 

  

	5.0	Performance Measures 

  

	 	5.1	Bankwide and individual performance measures will be established with respect to each Plan Year as described in Appendix A. Three achievement levels will be set for each Bankwide
performance measure: 

  

			
	Threshold	  	The minimum achievement level accepted for the performance measure.
		
	Target	  	The planned achievement level for the performance measure.
		
	Maximum	  	The achievement level for the performance measure which substantially exceeds the planned level of achievement.

 Individual performance goal measures will include four levels: 
 More is expected – performs at basic job requirements and does not meet all line of sight goals. 
 Meets all goals – performs at or at times above basic job requirements and meets all line of sight goals. 
 Exceeds expectations – performs consistently above basic job requirements and exceeds all line of sight goals at a level surpassing supervisor’s
expectations. 
 Recognized enterprise performance – performs consistently at a high level above basic job requirements, exceeds all line
of sight goals and performs at a level exceeding supervisor’s and senior management’s expectations. 
  

	 	5.2	Bankwide measures will be established by the Committee with Board approval. 

  

 2 

	 	5.3	Participant incentive award will be based on Bankwide performance objectives first and secondly on the individual performance goals. 

  

	 	5.3.1	Participant will typically have two to four major goals established that reflect the priorities of the Participant for the Plan Year. 

  

	 	5.3.2	Participant’s individual performance goals will be established between mutual agreement between the Participant and the Executive Committee of the board.

  

	 	5.3.3	All performance goals are to remain in effect for the entire Plan Year. However, in its sole discretion, the Committee with Board approval may revise Bank performance measures and
the Executive Committee may revise individual performance goals for the Plan Year after the year commences. 

  

	6.0	Award Determination 

  

	 	6.1	The method of determining the incentive award will be according to the following sequence: 

  

	 	6.1.1	After the plan year ends determine the Participant’s base salary for the Plan Year (defined as the normal rate of pay before any other add-ons (bonuses, incentives, etc).

  

	 	6.1.2	Using a linear approach, evaluate actual Bank performance against the Bankwide performance at or between threshold and target, or target and maximum. 

  

	 	6.1.3	Evaluate actual individual Participant performance against the individual performance goals. Assess performance as it relates to “More is expected,” “Meets all
goals,” “Exceeds expectations,” and “Recognized enterprise performance”. 

  

	 	6.1.4	Determine the interpolated award opportunity by relating the Bank Performance achievement level (derived in 6.1.2) to the Individual Performance achievement level (derived in
6.1.3). 

  

	 	6.2	The Participant shall not receive an award under this Plan if during the most recent examination of the Bank by the Federal Housing Finance Board (FHFB) or successor regulator, an
unsafe or unsound practice or condition with regard to the Bank was identified unless the practice or condition took place prior to start of employment, comes to the attention of said Participant and is not continued. However, the Participant may
receive such award provided that the finding of an unsafe or unsound practice or condition is subsequently resolved within the Plan Year in favor of the Bank by the FHFB. The Board, in its sole discretion may take into consideration mitigating
factors to approve the award as noted in 11.8 (Miscellaneous Conditions). 

  

 3 

	 	6.3	If Participant receives a written warning for performance or misconduct at any time during the Plan Year will not receive an award unless approved by the Board.

  

	7.0	Award Conditions 

  

	 	7.1	If the Bank achieves its threshold performance measures but Participant’s performance fails to meet basic expectations no incentive award will be made to the Participant.
Likewise, should Participant’s performance meet expectations but the Bank fails to achieve threshold performance no incentive award will be made to Participant. However, at the Committee’s sole discretion, an incentive award may be
recommended for Bank performance below threshold subject to final approval by the Board. 

  

	8.0	Participant Performance Reviews 

  

	 	8.1	The Participant’s performance will be formally appraised and documented in writing by the Executive Committee at the end of the Plan Year. 

  

	9.0	Plan Communication 

  

	 	9.1	Communications with Participant regarding the Plan should be made according to the following schedule: 

  

			
	Fourth quarter of the prior year	  	Communicate next year’s Bank draft goals.
		
	First quarter of the Plan Year	  	Communicate Bankwide goals for the Plan Year. Set Individual goals.
		
	End of Plan Year	  	Final assessment of Bank and individual performance.

  

	10.0	Administrative Control 

  

	 	10.1	The Bank’s Human Resources Department will administer the Plan. 

  

	 	10.2	The Board will have ultimate authority over the structure and goals of the Plan, and any incentive payouts from the Plan. 

  

	11.0	Miscellaneous Conditions 

  

	 	11.1	Except as provided in Section 11.3, Participant must be employed by the Bank until the pay period in which the payments are made – in February of the following year.

  

	 	11.2	Notwithstanding any Plan provision to the contrary, mere participation in the Plan will not entitle a Participant to an award. 

  

 4 

	 	11.3    	The Board may approve a prorated award if Participant terminates employment, retires, dies, or becomes disabled during the Plan Year. 

  

	 	11.4    	The designation of an employee as a Participant in the Plan does not guarantee employment. Nothing in this Plan shall be deemed (i) to give any employee or Participant any
legal or equitable rights against the Bank, except as expressly provided herein or provided by law; or (ii) to create a contract of employment with any employee or Participant, to obligate the Bank to continue the service of any employee or
Participant, or to affect or modify any employee’s or Participant’s term of employment in any way. 

  

	 	11.5    	The right of the Bank to discipline or discharge a Participant shall not be affected by any provision of this Plan. 

  

	 	11.6    	All awards under the Plan will be paid out through regular payroll and will be subject to applicable payroll tax withholdings and other appropriate deductions.

  

	 	11.7    	Incentive awards will be made as soon as practical following the end of the Plan Year, but no later than the last pay period in February. 

  

	 	11.8    	The Board has the right to revise, modify, or terminate the Plan in whole or in part at any time or for any reason, and the right to modify any recommended incentive award amount
(including the determination of a lesser award or no award), without the consent of any Participant. 

  

	 	11.9    	Since no employee has a guaranteed right to any award under this Plan, any attempt by an employee to sell, transfer, assign, pledge, or otherwise encumber any anticipated award
shall be void, and the Bank shall not be liable in any manner for or subject to the debts, contracts, liabilities, engagements or torts of any person who might anticipate an award under this program. 

  

	 	11.10  	This Plan shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating assets of the Bank for payment of any award under this
program. 

  

	 	11.11  	The Plan shall be construed, regulated, and administered in accordance with the laws of the state of Washington, unless otherwise preempted by the laws of the United States.

  

	 	11.12  	If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provision of the Plan, and the Plan shall be construed
and enforced as if such provision had not been included herein. 

  

	 	11.13  	If a Participant dies before receiving his or her award, any amounts determined to be paid under this Plan shall be paid to the Participant’s surviving spouse, if any, or if
none, to the Participant’s estate. The Bank’s determination as to the identity of the proper payee of any amount under this Plan shall be binding and conclusive and payment in accordance with such determination shall constitute a complete
discharge of all obligations on account of such amount. 

  

 5 

	 	11.14  	Any agreements or representations, oral or otherwise, express or implied, with respect to the subject matter of this Plan which are not contained herein will have no effect or
enforceability. 

  

 6 

 FEDERAL HOME LOAN BANK OF SEATTLE 

 Bank Incentive Compensation Plan (BICP) – Annual Plan for President and CEO 
 APPENDIX A 
 2007 Plan Year 
  

 7 

 Incentive Award Opportunity (as a percentage of base salary) 
 The interpolated incentive award is determined based on a linear approach against Bankwide measures at or between threshold and target, or target and maximum, and
adjusted for individual performance as follows: 
 Table 1 – Incentive Award Opportunity 
  

															
	  	  	 Individual
 Performance
	  	Bank Performance	 
	 Level
	  	  	No Award	 	 	Threshold	 	 	Target	 	 	Maximum	 
	 I -President (Grade 24)
	  	Recognized Enterprise Performance	  	0	%	 	35	%	 	45	%	 	60	%
		  	Exceeds Expectations	  	0	%	 	25	%	 	35	%	 	45	%
		  	Meets all Goals	  	0	%	 	20	%	 	25	%	 	35	%
		  	More is Expected	  	0	%	 	0	%	 	0	%	 	0	%

 Bank Performance Measures 
 There will be one Bank performance measure for the 2007 Plan Year. The achievement level for Bankwide performance measure shall be a Profitability goal according to specific measurements as adopted by the Board of
Directors. 
 Individual Performance Measures 
 There will
be two to four Individual performance measures for the 2006 Plan year. The Individual Performance Achievement Levels (More is expected, Meets all goals, Exceeds expectations, Enterprise performance) is determined by the Individuals overall goal
performance. 
  

 8

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