Document:

EX-10.35

 

Exhibit 10.35

 

 

REGISTRATION RIGHTS AGREEMENT

April 1, 2005

among

AMERICAN STANDARD INC.

as Issuer

AMERICAN STANDARD COMPANIES INC.

and

AMERICAN STANDARD INTERNATIONAL INC.

as Guarantors

and

CITIGROUP GLOBAL MARKETS INC.

J.P. MORGAN SECURITIES INC.

AND

THE OTHER INITIAL PURCHASERS

REFERRED TO HEREIN

as the Initial Purchasers

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

     REGISTRATION RIGHTS AGREEMENT (the “Agreement”) dated as of April 1, 2005 among American
Standard Inc., a Delaware corporation (the “Company”), as issuer, American Standard Companies Inc.
and American Standard International Inc. (each a “Guarantor” and together the “Guarantors”), as
guarantors and CITIGROUP GLOBAL MARKETS INC. and J.P. MORGAN SECURITIES INC., and the other parties
referred to in Annex A hereto (each, an “Initial Purchaser” and collectively, the “Initial
Purchasers”).

     This Agreement is made pursuant to the Purchase Agreement dated March 29, 2005 by and among
the Company, the Guarantors and the Initial Purchasers (the “Purchase Agreement”), which provides
for the sale by the Company to the Initial Purchasers of $200,000,000 aggregate principal amount of
the Company’s 51/2 % Notes due 2015, (the “Notes”). The Notes will be fully and unconditionally
guaranteed (the “Guarantees,” and together with the Notes, the “Securities”) by the Guarantors. In
order to induce the Initial Purchasers to enter into the Purchase Agreement and in satisfaction of
a condition to the Initial Purchasers’ obligations thereunder, the Company has agreed to provide to
the Initial Purchasers and their respective direct and indirect transferees and assigns the
registration rights set forth in this Agreement.

     In consideration of the foregoing, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

     “1933 Act” shall mean the Securities Act of 1933, as amended from time to time,
and the rules and regulations of the SEC promulgated thereunder.

     “1934 Act” shall mean the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations of the SEC promulgated thereunder.

     “Additional Interest” shall have the meaning set forth in Section 2(e) hereof.

     “Closing Time” shall mean April 1, 2005.

     “Depositary” shall mean The Depository Trust Company, or any other depositary
appointed by the Company, including any agent thereof; provided, however, that any such
depositary must at all times have an address in the Borough of Manhattan, The City of New
York.

     “Exchange Offer” shall mean the exchange offer by the Company and the
Guarantors of Exchange Securities for Registrable Securities pursuant to Section 2(a)
hereof.

     “Exchange Offer Registration” shall mean a registration of the Exchange Offer
under the 1933 Act effected pursuant to Section 2(a) hereof.

 

 

     “Exchange Offer Registration Statement” shall mean a registration statement of
the Company and the Guarantors on Form S-4 or another appropriate form covering the Exchange
Offer and all amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all material
incorporated or deemed to be incorporated by reference therein.

     “Exchange Securities” shall mean the 51/2 % Notes due 2015 of the Company and the
related guarantees of the Guarantors to be issued under the Indenture with terms identical
to the Securities (except that (i) provisions relating to an increase in the stated rate of
interest thereon upon the occurrence of a Registration Default shall be eliminated and (ii)
the transfer restrictions, minimum purchase requirements and legends relating to
restrictions on ownership and transfer thereof as a result of the issuance of the Securities
without registration under the 1933 Act shall be eliminated) and offered to Holders of
Registrable Securities in exchange for Registrable Securities pursuant to the Exchange
Offer.

     “Guarantees” shall have the meaning set forth in the preamble of this
Agreement.

     “Holders” shall mean, as the context requires, (i) the Initial Purchasers, for
so long as they own any Registrable Securities, and each of their respective successors,
assigns and direct and indirect transferees who become registered holders of Registrable
Securities under the Indenture and (ii) each Participating Broker-Dealer that holds Exchange
Securities for so long as such Participating Broker-Dealer is required to deliver a
prospectus meeting the requirements of the 1933 Act in connection with any resale of such
Exchange Securities.

     “Indenture” shall mean the Indenture dated as of April 1, 2005 between the
Company, the Guarantors and The Bank of New York, as trustee, as the same may be further
amended or supplemented from time to time in accordance with the terms thereof.

     “Interest Accrual Date” means April 1, 2005.

     “Initial Purchasers” shall have the meaning set forth in the preamble of this
Agreement.

     “Majority Holders” shall mean the Holders of a majority of the aggregate
principal amount of Registrable Securities outstanding (voting as one class); provided,
however, that whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the Company or
any of its affiliates (as such term is defined in Rule 405 under the 1933 Act) shall be
disregarded in determining whether such consent or approval was given by the Holders of such
required percentage.

     “NASD” shall mean the National Association of Securities Dealers, Inc.

     “Notes” shall have the meaning set forth in the preamble of this Agreement.

     “Notifying Broker-Dealer” shall have the meaning set forth in Section 3(f)
hereof.

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     “Participating Broker-Dealer” shall have the meaning set forth in Section 3(f)
hereof.

     “Person” shall mean an individual, partnership, joint venture, limited
liability company, corporation, trust or unincorporated organization or other entity, or a
government or agency or political subdivision thereof.

     “Private Exchange Securities” shall have the meaning set forth in Section 2(a)
hereof.

     “Prospectus” shall mean the prospectus included in a Registration Statement,
including any preliminary prospectus, and any such prospectus as amended or supplemented by
any prospectus supplement, including a prospectus supplement with respect to the terms of
the offering of any portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus, including
post-effective amendments, and in each case including all material incorporated or deemed to
be incorporated by reference therein.

     “Purchase Agreement” shall have the meaning set forth in the preamble to this
Agreement.

     “Registrable Securities” shall mean the Securities; provided, however, that any
Securities shall cease to be Registrable Securities when (i) a Shelf Registration Statement
with respect to the resale of such Securities shall have been declared effective under the
1933 Act and such Securities shall have been disposed of pursuant to such Shelf Registration
Statement, (ii) such Securities shall have been sold to the public pursuant to Rule 144 (or
any similar provision then in force, but not Rule 144A) under the 1933 Act or is saleable
pursuant to Rule 144(k) under the 1933 Act, (iii) such Securities shall have ceased to be
outstanding, (iv) such Securities shall have been exchanged for Exchange Securities which
have been registered pursuant to the Exchange Offer Registration Statement upon consummation
of the Exchange Offer unless such Exchange Securities are held by Participating
Broker-Dealers or otherwise are not freely tradable without any limitations or restrictions
under the 1933 Act, in which case such Exchange Securities will be deemed to be Registrable
Securities until such time as such Exchange Securities are sold to a purchaser in whose
hands such Exchange Securities are freely tradeable without any limitations or restrictions
under the 1933 Act or (v) such Securities shall have been exchanged for Private Exchange
Securities pursuant to this Agreement, in which case such Private Exchange Securities will
be deemed to be Registrable Securities until such time as such Private Exchange Securities
are sold to a purchaser in whose hands such Private Exchange Securities are freely tradeable
without any limitations or restrictions under the 1933 Act.

     “Registration Default” shall have the meaning set forth in Section 2(e) hereof.

     “Registration Expenses” shall mean any and all expenses incident to performance
of or compliance by the Company with this Agreement, including without limitation: (i) all
SEC, stock exchange or NASD registration and filing fees, (ii) all fees and

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expenses incurred in connection with compliance with state or other securities or blue
sky laws and compliance with the rules of the NASD (including reasonable fees and
disbursements of one firm of counsel for any Holders in connection with qualification of any
of the Exchange Securities or Registrable Securities under state or other securities or blue
sky laws and any filing with and review by the NASD), (iii) all expenses of any Persons in
preparing, printing and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, certificates representing the Securities, Private
Exchange Securities (if any) or Exchange Securities and other documents relating to the
performance of and compliance with this Agreement, (iv) all rating agency fees, (v) all fees
and expenses incurred in connection with the listing, if any, of the Securities, Private
Exchange Securities (if any) or Exchange Securities on any securities exchange or exchanges
or on any quotation system, (vi) all fees and disbursements relating to the qualification of
the Indenture under applicable securities laws, (vii) the fees and disbursements of counsel
for the Company and the Guarantors and the fees and expenses of independent public
accountants for the Company and the Guarantors or for any other Person, business or assets
whose financial statements are included in any Registration Statement or Prospectus, (viii)
the fees and expenses of the Trustee, any registrar, any depositary, any paying agent, any
escrow agent or any custodian, in each case including fees and disbursements of their
respective counsel, (ix) the reasonable fees and expenses of counsel to the Initial
Purchasers in connection with the Exchange Offer and (x) the reasonable fees and
disbursements, if any, of one firm of special counsel representing the Holders of
Registrable Securities designated pursuant to Section 2(c) below.

     “Registration Statement” shall mean any registration statement of the Company
and the Guarantors relating to any offering of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement (including, without limitation, any
Exchange Offer Registration Statement and any Shelf Registration Statement), and all
amendments and supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all exhibits thereto
(other than the Statement of Eligibility under the TIA of the Trustee on Form T-1) and all
material incorporated or deemed to be incorporated by reference therein.

     “SEC” shall mean the U.S. Securities and Exchange Commission or any successor
thereto.

     “Securities” shall have the meaning set forth in the preamble to this
Agreement.

     “Shelf Registration” shall mean a registration covering the resale of
Securities or Private Exchange Securities (if any) effected pursuant to Section 2(b) hereof.

     “Shelf Registration Statement” shall mean a registration statement of the
Company and the Guarantors on Form S-3 filed pursuant to Rule 415(a)(1)(i) under the 1933
Act covering the Shelf Registration, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the

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Prospectus contained therein, all exhibits thereto and all material incorporated or
deemed to be incorporated by reference therein.

     “TIA” shall mean the Trust Indenture Act of 1939, as amended from time to time,
and the rules and regulations of the SEC promulgated thereunder.

     “Trustee” shall mean the trustee with respect to the Securities, the Private
Exchange Securities (if any) and the Exchange Securities under the Indenture.

     For purposes of this Agreement, (i) all references in this Agreement to any Registration
Statement, preliminary prospectus or Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the SEC pursuant to its Electronic Data
Gathering, Analysis and Retrieval system; (ii) all references in this Agreement to financial
statements and schedules and other information which is “contained”, “included”, “disclosed” or
“stated” in any Registration Statement, preliminary prospectus or Prospectus (or other references
of like import) shall be deemed to include all such financial statements and schedules and other
information which is incorporated or deemed to be incorporated by reference in such Registration
Statement, preliminary prospectus or Prospectus, as the case may be, at the time of effectiveness
or delivery, as the case may be; (iii) all references in this Agreement to amendments or
supplements to any Registration Statement, preliminary prospectus or Prospectus shall be deemed to
include the filing of any document under the 1934 Act which is incorporated or deemed to be
incorporated by reference in such Registration Statement, preliminary prospectus or Prospectus, as
the case may be, after the time of effectiveness or delivery, as the case may be; (iv) all
references in this Agreement to Rule 144, Rule 144A or Rule 405 under the 1933 Act, and all
references to any sections or subsections thereof or terms defined therein, shall in each case
include any successor provisions thereto; and (v) all references in this Agreement to days (but not
to business days) shall mean calendar days.

     2. Registration Under the 1933 Act.

     (a) Exchange Offer Registration. To the extent not prohibited by applicable law or by
applicable interpretations of the staff of the SEC, the Company and the Guarantors shall use
reasonable best efforts to (A) file with the SEC on or prior to the 120th day after the Closing
Time an Exchange Offer Registration Statement covering the offer by the Company and the Guarantors
to the Holders to exchange all of the Registrable Securities for a like aggregate principal amount
of Exchange Securities, (B) cause such Exchange Offer Registration Statement to be declared
effective by the SEC no later than the 210th day after the Closing Time, (C) cause such
Registration Statement to remain effective until the closing of the Exchange Offer and (D)
consummate the Exchange Offer no later than 45 days after the effective date of the Exchange Offer
Registration Statement. Upon the effectiveness of the Exchange Offer Registration Statement, the
Company shall promptly commence the Exchange Offer, it being the objective of such Exchange Offer
to enable each Holder eligible and electing to exchange Registrable Securities for Exchange
Securities (assuming that such Holder (1) is not an affiliate of the Company or either Guarantor
within the meaning of Rule 405 under the 1933 Act or an Initial Purchaser holding Securities
acquired by it and having the status of an unsold allotment in the initial offering and sale of
Securities pursuant to the Purchase Agreement, (2) acquires the Exchange Securities in the ordinary
course of such Holder’s business and (3) has no

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arrangements or understandings with any Person to participate in the Exchange Offer for the
purpose of distributing such Exchange Securities and is not engaged in, and does not intend to
engage in, any such distribution) to trade such Exchange Securities from and after their receipt
without any limitations or restrictions under the 1933 Act or under the securities or blue sky laws
of the states of the United States.

     In connection with the Exchange Offer, the Company shall:

     (i) promptly mail to each Holder a copy of the Prospectus forming part of the Exchange
Offer Registration Statement, together with an appropriate letter of transmittal and related
documents;

     (ii) keep the Exchange Offer open for not less than 20 business days (or longer if
required by applicable law) after the date notice thereof is mailed to the Holders and,
during the Exchange Offer, offer to all Holders who are eligible to participate in the
Exchange Offer the opportunity to exchange their Registrable Securities for Exchange
Securities;

     (iii) use the services of a depositary or other exchange agent with an address in the
Borough of Manhattan, The City of New York, for the Exchange Offer;

     (iv) permit Holders to withdraw tendered Registrable Securities at any time prior to
the close of business, New York City time, on the last business day on which the Exchange
Offer shall remain open;

     (v) notify each Holder that any Registrable Security not tendered, or tendered and
subsequently withdrawn, will remain outstanding and continue to accrue interest, but will
not retain any rights under this Agreement (except in the case of the Initial Purchasers and
Participating Broker-Dealers as provided herein) or accrue Additional Interest; and

     (vi) otherwise comply in all material respects with all applicable laws relating to the
Exchange Offer.

     If, at or prior to the consummation of the Exchange Offer, any Initial Purchaser holds any
Securities acquired by it and having the status of an unsold allotment in the initial offering and
sale of Securities pursuant to the Purchase Agreement, or any Holder is not entitled to participate
in the Exchange Offer because of applicable law or interpretations thereof by the staff of the SEC,
the Company shall, upon the request of such Initial Purchaser or Holder, simultaneously with the
delivery of the Exchange Securities in the Exchange Offer to other Holders, issue and deliver to
such Initial Purchaser or Holder in exchange for such Securities a like principal amount of debt
securities of the Company (“Private Exchange Securities”), and the Guarantors shall provide
corresponding guarantees, to be issued under the Indenture with terms identical to the Exchange
Securities, except that such debt securities and related guarantees shall be subject to transfer
restrictions and minimum purchase requirements, shall bear a legend relating to restrictions on
ownership and transfer identical to those applicable to the Securities as a result of the issuance
thereof without registration under the 1933 Act and shall provide for the payment of Additional
Interest. The Company shall use its reasonable best efforts to have the Private Exchange
Securities bear the same CUSIP number as the Exchange Securities and, if unable to

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do so, the Company will, at such time as any Private Exchange Security ceases to be a
“restricted security” within the meaning of Rule 144 under the 1933 Act, permit any such Private
Exchange Security to be exchanged for a like principal amount of Exchange Securities.

     The Exchange Securities and the Private Exchange Securities (if any) shall be issued under the
Indenture, which shall be qualified under the TIA. Interest on each Exchange Security and such
Private Exchange Security (if any) will accrue from the last date on which interest was paid or
duly provided for on the Securities surrendered in exchange therefor or, if no interest has been
paid or duly provided for on such Securities, from the Interest Accrual Date.

     The Indenture shall provide that the Exchange Securities, the Private Exchange Securities (if
any) and the Securities of each series shall vote and consent together on all matters as a single
class and shall constitute a single series of debt securities issued under the Indenture.

     As soon as practicable after the close of the Exchange Offer, the Company shall:

     (i) accept for exchange all Registrable Securities duly tendered and not validly
withdrawn pursuant to the Exchange Offer in accordance with the terms of the Exchange Offer
Registration Statement and the related letter of transmittal;

     (ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable
Securities so accepted for exchange by the Company; and

     (iii) cause the Trustee promptly to authenticate and deliver Exchange Securities to
each Holder of Registrable Securities so accepted for exchange equal in principal amount to
the principal amount of the Registrable Securities of such Holder so accepted for exchange.

     The Exchange Offer shall not be subject to any conditions, other than that (i) the Exchange
Offer, or the making of any exchange by a Holder, does not violate any applicable law or any
applicable interpretation of the staff of the SEC, (ii) no action or proceeding shall have been
instituted or threatened in any court or by or before any governmental agency with respect to the
Exchange Offer which, in the Company’s judgment, would reasonably be expected to impair the ability
of the Company to proceed with the Exchange Offer and (iii) the Holders tender the Registrable
Securities to the Company in accordance with the Exchange Offer. Each Holder of Registrable
Securities (other than Participating Broker-Dealers) who wishes to exchange such Registrable
Securities for Exchange Securities in the Exchange Offer will be required to represent that (1) it
is not an affiliate (as defined in Rule 405 under the 1933 Act) of the Company or an Initial
Purchaser holding Securities acquired by it and having the status of an unsold allotment in the
initial offering and sale of Securities pursuant to the Purchase Agreement, (2) any Exchange
Securities to be received by it will be acquired in the ordinary course of business and (3) it has
no arrangement or understanding with any Person to participate in the distribution (within the
meaning of the 1933 Act) of the Exchange Securities and is not engaged in, and does not intend to
engage in, any such distribution, and shall be required to make such other representations as may
be reasonably necessary under applicable SEC rules, regulations or interpretations to render the
use of Form S-4 or another appropriate form under the 1933 Act available.

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     (b) Shelf Registration. (i) If, because of any change in law or applicable
interpretations thereof by the staff of the SEC, the Company and the Guarantors are not permitted
to effect the Exchange Offer as contemplated by Section 2(a) hereof or (ii) if for any other reason
(A) the Exchange Offer Registration Statement is not declared effective within 210 days following
the Closing Time or (B) the Exchange Offer is not consummated within 45 days after effectiveness of
the Exchange Offer Registration Statement (provided that if the Exchange Offer Registration
Statement shall be declared effective after such 210-day period or if the Exchange Offer shall be
consummated after such 45-day period, then the Company’s obligations under this clause (ii) arising
from the failure of the Exchange Offer Registration Statement to be declared effective within such
210-day period or the failure of the Exchange Offer to be consummated within such 45-day period,
respectively, shall terminate), (iii) if any Holder (other than an Initial Purchaser holding
Securities acquired directly from the Company and the Guarantors as part of the offering and sale
of Securities pursuant to the Purchase Agreement) is not eligible to participate in the Exchange
Offer because of any change in law or applicable interpretations thereof by the staff of the SEC or
elects to participate in the Exchange Offer but does not receive Exchange Securities which are
freely tradeable without any limitations or restrictions under the 1933 Act or (iv) upon the
request of any Initial Purchasers (provided that, in the case of this clause (iv), such Initial
Purchaser shall hold Registrable Securities (including, without limitation, Private Exchange
Securities) that it acquired directly from the Company and the Guarantors as part of the offering
and sale of Securities pursuant to the Purchase Agreement and such request is made before the date
that is 90 days after consummation of the Exchange Offer), the Company and the Guarantors shall, at
their cost:

     (A) as promptly as practicable, but no later than (a) the 210th day after the Closing
Time or (b) the 60th day after any such filing obligation arises, whichever is later, file
with the SEC a Shelf Registration Statement relating to the resale of the Registrable
Securities by the Holders from time to time in accordance with the methods of distribution
set forth in such Shelf Registration Statement;

     (B) use reasonable best efforts to cause such Shelf Registration Statement to be
declared effective by the SEC as promptly as practicable, but in no event later than the
90th day after the date on which the Company is required to file the Shelf Registration
Statement. In the event that the Company and the Guarantors are required to file a Shelf
Registration Statement pursuant to clause (iii) or (iv) above, the Company and the
Guarantors shall, file and use reasonable best efforts to have declared effective by the SEC
both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all
Registrable Securities other than the Private Exchange Securities (if any) and a Shelf
Registration Statement (which may be combined with the Exchange Offer Registration
Statement) with respect to resales of Registrable Securities held by such Holder or such
Initial Purchaser, as applicable;

     (C) use reasonable best efforts to keep the Shelf Registration Statement continuously
effective, supplemented and amended as required, in order to permit the Prospectus forming
part thereof to be usable by Holders for a period (x) of two years after the latest date on
which any Securities are originally issued by the Company and the Guarantors (subject to
extension pursuant to the last paragraph of Section 3) or, (y) if earlier, when all of the
Registrable Securities covered by such Shelf Registration

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Statement (i) have been sold pursuant to the Shelf Registration Statement in accordance
with the intended method of distribution thereunder, (ii) become eligible for resale
pursuant to Rule 144(k) under the 1933 Act or (iii) cease to be Registrable Securities; and

     (D) notwithstanding any other provisions hereof, use reasonable best efforts to ensure
that (i) the Shelf Registration Statement and each amendment thereto (if any) and the
Prospectus forming a part thereof and each amendment or supplement thereto comply in all
material respects with the 1933 Act and the rules and regulations thereunder, (ii) neither
the Shelf Registration Statement nor any amendment thereto, when it becomes effective,
contains an untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading and (iii)
except during circumstances described in the last two paragraphs of Section 3, neither the
Prospectus forming part of the Shelf Registration Statement nor any amendment or supplement
thereto includes an untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that this provision shall not apply
to any statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a holder of Registrable Securities expressly for use
therein.

     The Company shall not permit any securities other than Registrable Securities to be included
in the Shelf Registration Statement without the prior written consent of Citigroup Global Markets
Inc. The Company further agrees, if necessary, to supplement or amend the Shelf Registration
Statement if reasonably requested by the Majority Holders with respect to information relating to
the Holders and otherwise as required by Section 3(b) below, to use reasonable best efforts to
cause any such amendment to become effective and such Shelf Registration Statement to become usable
as soon as practicable thereafter and to furnish to the Holders of Registrable Securities as many
copies of any such supplement or amendment as such Holders may reasonably request promptly after
its being used or filed with the SEC.

     (c) Expenses. The Company shall pay all Registration Expenses in connection with the
registration pursuant to Section 2(a) and 2(b) hereof and, in the case of the Shelf
Registration Statement, will reimburse the Holders or the Initial Purchasers for the reasonable
fees and disbursements of one counsel designated in writing by the Majority Holders of such
Registrable Securities included in such offering (or, if a Shelf Registration Statement is filed
solely pursuant to clause (iv) of the first paragraph of Section 2(b), designated by the Initial
Purchasers) to act as counsel for the Holders of the Registrable Securities in connection
therewith, which, until otherwise designated in accordance with this Section 2(c), shall be
Cravath, Swaine & Moore. Each Holder shall pay all fees and disbursements of its counsel other
than as set forth in the preceding sentence or in the definition of Registration Expenses and all
discounts, commissions and other expenses (other than Registration Expenses) and transfer taxes, if
any, relating to the sale or disposition of such Holder’s Registrable Securities pursuant to a the
Shelf Registration Statement.

     (d) Effective Registration Statement.

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     (i) The Company shall be deemed not to have used reasonable best efforts to cause the
Exchange Offer Registration Statement or any Shelf Registration Statement, as the case may
be, to become, or to remain, effective during the requisite periods set forth herein if the
Company or either Guarantor takes any action or fails to take any action that could
reasonably be expected to result in any such Registration Statement not being declared
effective or remaining effective or in the Holders of Registrable Securities (including,
under the circumstances contemplated by Section 3(f) hereof, Exchange Securities) covered
thereby not being able to exchange or offer and sell such Registrable Securities during that
period unless (A) such action is required by applicable law, (B) such action is taken or
omitted by the Company or either Guarantor in good faith and for valid business reasons
(which does not include avoidance of the Company’s obligations hereunder), including the
acquisition or divestiture of assets or a material corporate transaction or event, or (C)
such action results from the happening of any event or the discovery of any facts which
makes any statement made in such Registration Statement or the related Prospectus untrue in
any material respect or which constitutes an omission to state a material fact in such
Registration Statement or Prospectus, in each case so long as the Company promptly complies
with the requirements of Section 3(k) hereof, if applicable, to notify Holders to suspend
the use of the Prospectus. Nothing in this paragraph shall prevent the accrual of
Additional Interest on any Securities, Private Exchange Securities or Exchange Securities.

     (ii) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a
Shelf Registration Statement pursuant to Section 2(b) hereof shall not be deemed to have
become effective unless it has been declared effective by the SEC; provided, however, that
if, after it has been declared effective, the offering of Registrable Securities pursuant to
a Registration Statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such Registration
Statement shall be deemed not to have been effective during the period of such interference
until the offering of Registrable Securities pursuant to such Registration Statement may
legally resume.

     (e) Increase in Interest Rate. In the event that:

     (i) the Exchange Offer Registration Statement is not filed with the SEC on or prior to
the 120th day following the Closing Time, or

     (ii) the Exchange Offer Registration Statement is not declared effective by the SEC on
or prior to the 210th day following the Closing Time, or

     (iii) the Exchange Offer is not consummated on or prior to the 45th day following the
effective date of the Exchange Offer Registration Statement, or

     (iv) if required, a Shelf Registration Statement is not filed with the SEC on or prior
to (A) the 210th day following the Closing Time or (B) the 60th day after the filing
obligation arises, whichever is later, or

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     (v) if required, a Shelf Registration Statement is not declared effective on or prior
to the 90th day after the date on which the Company and the Guarantors are required to file
such Shelf Registration Statement, or

     (vi) a Shelf Registration Statement is declared effective by the SEC but such Shelf
Registration Statement ceases to be effective or such Shelf Registration Statement or the
Prospectus included therein ceases to be usable in connection with resales of Registrable
Securities covered thereby for any reason and either (A) the aggregate number of days in any
consecutive 365-day period for which the Shelf Registration Statement or such Prospectus
shall not be effective or usable exceeds 90 days or (B) the Shelf Registration Statement or
such Prospectus shall not be effective or usable for a period of more than 30 consecutive
days, or

     (vii) the Exchange Offer Registration Statement is declared effective by the SEC but,
if the Exchange Offer Registration Statement is being used in connection with the resale of
Exchange Securities as contemplated by Section 3(f)(B) of this Agreement, the Exchange Offer
Registration Statement ceases to be effective or the Exchange Offer Registration Statement
or the Prospectus included therein ceases to be usable in connection with resales of
Exchange Securities for any reason during the 180-day period referred to in Section 3(f)(B)
of this Agreement (as such period may be extended pursuant to the last paragraph of Section
3 of this Agreement) and either (A) the aggregate number of days in any consecutive 365-day
period for which the Exchange Offer Registration Statement or such Prospectus shall not be
effective or usable exceeds 90 days or (B) the Exchange Offer Registration Statement or the
Prospectus shall not be effective or usable for a period of more than 30 consecutive days,

(each of the events referred to in clauses (i) through (vii) above being hereinafter called a
“Registration Default”), the per annum interest rate borne by the Registrable Securities of a
series shall be increased (“Additional Interest”) by one-quarter of one percent (0.25%) per annum
immediately following such 120-day period in the case of clause (i) above, immediately following
such 210-day period in the case of clause (ii) above, immediately following such 45-day period in
the case of clause (iii) above, immediately following any such 210-day period or 60-day period,
whichever ends later, in the case of clause (iv) above, immediately following any such 90-day
period in the case of clause (v) above, immediately following the 90th day in any consecutive
365-day period or immediately following the 30th consecutive day, whichever occurs first, that a
Shelf Registration Statement shall not be effective or a Shelf Registration Statement or the
Prospectus included therein shall not be usable as contemplated by clause (vi) above, or
immediately following the 90th day in any consecutive 365-day period or immediately following the
30th consecutive day, whichever occurs first, that the Exchange Offer Registration Statement shall
not be effective or the Exchange Offer Registration Statement or the Prospectus included therein
shall not be usable as contemplated by clause (vii) above, which rate will be increased by an
additional one-quarter of one percent (0.25%) per annum immediately following each 90-day period
that any Additional Interest continues to accrue under any circumstances; provided, however, that
the aggregate increase in such annual interest rate may in no event exceed one-half of one percent
(0.50%) per annum and the Company will not be required to pay Additional Interest for more than one
Registration Default at a time. Upon the filing of the Exchange Offer Registration Statement after
the 120-day period described in clause (i) above,

11

 

the effectiveness of the Exchange Offer Registration Statement after the 180-day period described
in clause (ii) above, the consummation of the Exchange Offer after the 45-day period described in
clause (iii) above, the filing of the Shelf Registration Statement after the 210-day period or
60-day period, as the case may be, described in clause (iv) above, the effectiveness of a Shelf
Registration Statement after the 90-day period described in clause (v) above, the Shelf
Registration Statement once again being effective or the Shelf Registration Statement and the
Prospectus included therein becoming usable in connection with resales of Registrable Securities of
the applicable series, as the case may be, in the case of clause (vi) above, or the Exchange Offer
Registration Statement once again being effective or the Exchange Offer Registration Statement and
the Prospectus included therein becoming usable in connection with resales of Exchange Securities
of the applicable series, as the case may be, in the case of clause (vii) above, the interest rate
borne by the Registrable Securities of such series from the date of such filing, effectiveness,
consummation or resumption of effectiveness or useability, as the case may be, shall be reduced to
the original interest rate so long as no other Registration Default shall have occurred with
respect to such series and shall be continuing at such time and the Company is otherwise in
compliance with this section; provided, however, that if, after any such reduction in interest
rate, one or more Registration Defaults with respect to such series shall again occur, the interest
rate of such series of Registrable Securities shall again be increased pursuant to the foregoing
provisions.

     The Company shall notify the Trustee within three business days after each and every date on
which an event occurs in respect of which Additional Interest is required to be paid. Additional
Interest shall be paid by depositing with the Trustee, in trust, for the benefit of the Holders of
Registrable Securities of the applicable series, on or before the applicable semiannual interest
payment date, immediately available funds in sums sufficient to pay the Additional Interest then
due. The Additional Interest due shall be payable on each such interest payment date to the record
Holder of Registrable Securities of such series entitled to receive the interest payment to be paid
on such date as set forth in the Indenture. Each obligation to pay Additional Interest shall be
deemed to accrue from and including the day following the applicable Registration Default.

     Anything herein to the contrary notwithstanding, any Holder who was, at the time the Exchange
Offer was pending and consummated, eligible to exchange, and did not validly tender or withdrew,
its Securities for Exchange Securities in the Exchange Offer will not be entitled to receive any
Additional Interest. For purposes of clarity, it is hereby acknowledged and agreed that, under
current interpretations of law by the SEC, Initial Purchasers holding unsold allotments of
Securities acquired from the Company and the Guarantors pursuant to the Purchase Agreement are not
eligible to participate in the Exchange Offer.

     (f) Specific Enforcement. Without limiting the remedies available to the Initial
Purchasers and the Holders, the Company acknowledges that any failure by the Company to comply with
its obligations under Sections 2(a) through 2(d) hereof may result in material irreparable injury
to the Initial Purchasers, the Holders or the Participating Broker-Dealers for which there is no
adequate remedy at law, that it will not be possible to measure damages for such injuries precisely
and that, in the event of any such failure, the Initial Purchasers, any Holder and any
Participating Broker-Dealer may obtain such relief as may be required to specifically enforce the
Company’s obligations under Section 2(e) hereof.

12

 

     3. Registration Procedures. In connection with the obligations of the Company with
respect to the Registration Statements pursuant to Sections 2(a) and 2(b) hereof, the Company and
the Guarantors shall:

     (a) prepare and file with the SEC a Registration Statement or, if required, Registration
Statements, within the time periods specified in Section 2, on the appropriate form under the 1933
Act, which form (i) shall be selected by the Company, (ii) shall, in the case of a Shelf
Registration Statement, be available for the sale of the Registrable Securities by the selling
Holders thereof and (iii) shall comply as to form in all material respects with the requirements of
the applicable form and include or incorporate by reference all financial statements required by
the SEC to be filed therewith, and use its reasonable best efforts to cause such Registration
Statement to become effective and remain effective in accordance with Section 2 hereof;

     (b) prepare and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary under applicable law to keep such Registration Statement
effective for the applicable period in accordance with Section 2 hereof; cause each Prospectus to
be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the 1933 Act; and comply with the provisions of the 1933 Act and the 1934 Act
with respect to the disposition of all Securities covered by each Registration Statement during the
applicable period in accordance with the intended method or methods of distribution by the selling
Holders thereof;

     (c) in the case of a Shelf Registration, (i) notify each Holder of Registrable Securities
which may be included in such Shelf Registration, at least ten business days prior to filing or
such shorter period as is reasonable under the circumstances, that a Shelf Registration Statement
with respect to the Registrable Securities is being filed; (ii) furnish to each Holder of
Registrable Securities, to counsel for the Initial Purchasers and to one firm of counsel for the
Holders, without charge, as many copies of each Prospectus, including each preliminary Prospectus,
and any amendment or supplement thereto and such other documents as such Holder or counsel may
reasonably request, including financial statements and schedules and, if such Holder or counsel so
requests, all exhibits (including those incorporated by reference) in order to facilitate the
public sale or other disposition of the Registrable Securities; and (iii) subject to the
penultimate paragraph of this Section 3, the Company hereby consents to the use of the Prospectus,
including each preliminary Prospectus, or any amendment or supplement thereto by each of the
Holders of Registrable Securities in connection with the offering and sale of the Registrable
Securities covered by any Prospectus or any amendment or supplement thereto;

     (d) use reasonable best efforts to register or qualify, to the extent required, the
Registrable Securities under all applicable state securities or “blue sky” laws of such
jurisdictions of the United States as any Holder of Registrable Securities covered by a
Registration Statement shall reasonably request in writing by the time the applicable Registration
Statement is declared effective, to cooperate with the Holders of any Registrable Securities in
connection with any filings required to be made with the NASD, to keep each such registration or
qualification effective during the period such Registration Statement is required to be effective
and do any and all other acts and things which may be reasonably necessary or advisable to enable
such Holder to consummate the disposition in each such jurisdiction of such Registrable Securities
owned by such Holder; provided, however, that neither the Company nor either

13

 

Guarantor shall be required to (i) file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or (ii) to subject themselves to taxation in any jurisdiction in which they are
not so subject;

     (e) in the case of a Shelf Registration, notify each Holder of Registrable Securities included
in such Shelf Registration and one firm of counsel for such Holders promptly and, if requested by
such Holder or counsel, confirm such advice in writing promptly (i) when a Registration Statement
has become effective and when any post-effective amendments and supplements thereto become
effective, (ii) of any request by the SEC or any state securities authority for post-effective
amendments or supplements to a Registration Statement or Prospectus or for additional information
after a Registration Statement has become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose, (iv) of the receipt by the Company or a
Guarantor of any notification with respect to the suspension of the registration or qualification
of the Registrable Securities for sale in any U.S. jurisdiction or the initiation or threatening of
any proceeding for such purpose, (v) of the happening of any event or the discovery of any facts
during the period a Shelf Registration Statement is effective which is contemplated in Section
2(d)(i)(A), 2(d)(i)(B) or 2(d)(i)(C) and (vi) of any determination by the Company or a Guarantor
that a post-effective amendment to a Registration Statement would be appropriate; and without
limitation to any other provisions of this Agreement, the Company agrees that this Section 3(e)
shall also be applicable, mutatis mutandis, with respect to the Exchange Offer Registration
Statement and the Prospectus included therein to the extent that such Prospectus is being used by
Participating Broker-Dealers as contemplated by Section 3(f);

     (f) (A) in the case of an Exchange Offer, (i) include in the Exchange Offer Registration
Statement (x) a “Plan of Distribution” section substantially in the form set forth in Annex B
hereto or other such form as is reasonably acceptable to Citigroup Global Markets Inc. covering the
use of the Prospectus included in the Exchange Offer Registration Statement by broker-dealers who
have exchanged their Registrable Securities for Exchange Securities for the resale of such Exchange
Securities and (y) a statement to the effect that any such broker-dealers who wish to use the
related Prospectus in connection with the resale of Exchange Securities acquired as a result of
market-making or other trading activities will be required to notify the Company to that effect,
together with instructions for giving such notice (which instructions shall include a provision for
giving such notice by checking a box or making another appropriate notation on the related letter
of transmittal) (each such broker-dealer who gives notice to the Company as aforesaid being
hereinafter called a “Notifying Broker-Dealer”), (ii) furnish to each Notifying Broker-Dealer who
desires to participate in the Exchange Offer, without charge, as many copies of each Prospectus
included in the Exchange Offer Registration Statement, including any preliminary prospectus, and
any amendment or supplement thereto, as such broker-dealer may reasonably request, (iii) include in
the Exchange Offer Registration Statement a statement that any broker-dealer who holds Registrable
Securities acquired for its own account as a result of market-making activities or other trading
activities (a “Participating Broker-Dealer”), and who receives Exchange Securities for Registrable
Securities pursuant to the Exchange Offer, may be a statutory underwriter and must deliver a
prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange
Securities, (iv) subject to the penultimate paragraph of this Section 3, the Company hereby
consents to the use

14

 

of the Prospectus forming part of the Exchange Offer Registration Statement or any amendment
or supplement thereto by any Notifying Broker-Dealer in connection with the sale or transfer of
Exchange Securities and (v) include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange Offer substantially the
following provision:

     “If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged
in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is
a broker-dealer that will receive Exchange Securities for its own account in exchange for
Registrable Securities, it represents that the Registrable Securities to be exchanged for Exchange
Securities were acquired by it as a result of market-making activities or other trading activities
and acknowledges that it will deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resale of such Exchange Securities pursuant to the Exchange Offer; however, by
so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that
it is an “underwriter” within the meaning of the 1933 Act. If the undersigned is a broker-dealer,
it represents that it did not purchase the Registrable Securities to be exchanged for Exchange
Securities from the Company”;

     (B) to the extent any Notifying Broker-Dealer participates in the Exchange Offer, (i)
the Company shall use reasonable best efforts to maintain the effectiveness of the Exchange
Offer Registration Statement for a period of 180 days (subject to extension pursuant to the
last paragraph of this Section 3) following the last date on which exchanges are accepted
pursuant to the Exchange Offer and (ii) the Company will comply, insofar as relates to the
Exchange Offer Registration Statement, the Prospectus included therein and the offering and
sale of Exchange Securities pursuant thereto, with its obligations under Section 2(b)(D),
the last paragraph of Section 2(b), Sections 3(c), 3(e), 3(i), 3(j), 3(k), 3(n), 3(o), 3(p)
and 3(q) and the last two paragraphs of this Section 3 as if all references therein to a
Shelf Registration Statement, the Prospectus included therein and the Holders of Registrable
Securities referred, mutatis mutandis, to the Exchange Offer Registration Statement, the
Prospectus included therein and the applicable Notifying Broker-Dealers and, for purposes of
this Section 3(f), all references in any such paragraphs or sections to the “Majority
Holders” shall be deemed to mean, solely insofar as relates to this Section 3(f), the
Notifying Broker-Dealers who are the Holders of the majority in aggregate principal amount
of the Exchange Securities which are Registrable Securities (voting as one class); and

     (C) the Company shall not be required to amend or supplement the Prospectus contained
in the Exchange Offer Registration Statement as would otherwise be contemplated by Section
3(b) or 3(k) hereof, or take any other action as a result of this Section 3(f), for a period
exceeding 180 days (subject to extension pursuant to the last paragraph of this Section 3)
after the date on which the Exchange Offer Registration Statement is declared effective or
such shorter period of time such Notifying Broker-Dealers must comply with the prospectus
delivery requirements of the 1933 Act in order to resell the Exchange Securities received in
exchange for the Registrable Securities acquired for their own account as a result of
market-making or other trading activity, and Notifying Broker-Dealers shall not be
authorized by the Company to, and shall not,

15

 

deliver such Prospectus after such period in connection with resales contemplated by
this Section 3;

     (g) (i) in the case of an Exchange Offer, furnish counsel for the Initial Purchasers and (ii)
in the case of a Shelf Registration, furnish one firm of counsel for the Holders of Registrable
Securities copies of any request by the SEC or any state securities authority for amendments or
supplements to a Registration Statement or Prospectus or for additional information;

     (h) use reasonable best effort to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement as soon as practicable and provide prompt notice to each
Holder of the withdrawal of any such order;

     (i) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities
included in such Shelf Registration, upon request from such Holder and without charge, at least one
conformed copy of each Registration Statement and any post-effective amendments thereto (without
documents incorporated or deemed to be incorporated therein by reference or exhibits thereto,
unless requested), if such documents are not available via the SEC EDGAR database;

     (j) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends; and cause such
Registrable Securities to be in such denominations (consistent with the provisions of the
Indenture) and in a form eligible for deposit with the Depositary;

     (k) in the case of a Shelf Registration, upon the occurrence of any event or the discovery of
any facts as contemplated by Section 3(e)(v) hereof, subject to the last paragraph of this Section
3 use reasonable best efforts to prepare a supplement or post-effective amendment to a Registration
Statement or 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 Securities, such Prospectus will not include at the time of such
delivery any untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which they were made, not
misleading; the Company agrees to notify each Holder to suspend use of the Prospectus as promptly
as practicable after the occurrence of such an event, and each Holder hereby agrees to suspend use
of the Prospectus until the Company has amended or supplemented the Prospectus to correct such
misstatement or omission; and at such time as such public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to correct any misstatement
of a material fact or to include any omitted material fact, the Company agrees promptly to notify
each Holder of such determination and to furnish each Holder such number of copies of the
Prospectus, as amended or supplemented, as such Holder may reasonably request;

     (l) obtain CUSIP numbers for all Exchange Securities or Registrable Securities, as the case
may be, not later than the effective date of a Registration Statement, and provide the Trustee with
printed or word-processed certificates for the Exchange Securities or Registrable Securities, as
the case may be, in a form eligible for deposit with the Depositary;

16

 

     (m) (i) cause the Indenture to be qualified under the TIA in connection with the registration
of the Exchange Securities or Registrable Securities, as the case may be, (ii) cooperate with the
Trustee and the Holders to effect such changes, if any, to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA and (iii) execute, and use
reasonable best efforts to cause the Trustee to execute, all documents as may be required to effect
such changes, if any, and all other forms and documents required to be filed with the SEC to enable
the Indenture to be so qualified in a timely manner;

     (n) in the case of a Shelf Registration, if requested by the Holders of a majority in
principal amount of the Registrable Securities registered pursuant to such Shelf Registration
Statement and consented to by the Company, which consent shall not be unreasonably withheld, effect
not more than one underwritten registration and, in connection with such underwritten registration,
enter into agreements (including underwriting agreements or similar agreements) and take all other
customary and appropriate actions (including those reasonably requested by the Holders of a
majority in principal amount of the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities and in such connection, in a manner that
is reasonable and customary;

     (o) in the case of a Shelf Registration, make available for inspection by the Holders of the
Registrable Securities included in such Shelf Registration Statement who shall certify to the
Company in writing that they have a current intention to sell the Registrable Securities pursuant
to the Shelf Registration Statement and any single firm of counsel or single firm of accountants
retained by such Holders, all financial statements and other records, documents and properties of
the Company reasonably requested by any such Persons, and cause the respective officers, directors,
employees, and any other agents of the Company to supply all information reasonably requested by
any such Persons in connection with a Shelf Registration Statement, subject to such confidentiality
agreements as the Company may reasonably require and to privilege;

     (p) (i) in the case of an Exchange Offer, a reasonable time prior to the filing of any
Exchange Offer Registration Statement, any Prospectus forming a part thereof, any amendment to an
Exchange Offer Registration Statement or amendment or supplement to such Prospectus (excluding
documents incorporated by reference), provide copies of such documents to counsel for the Initial
Purchasers, and will not file any such documents as to which the Initial Purchasers or their
counsel may reasonably object prior to such filing; (ii) in the case of a Shelf Registration, a
reasonable time prior to filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or amendment or supplement to such
Prospectus (excluding documents incorporated by reference), provide copies of such document to the
Holders of Registrable Securities included in such Shelf Registration Statement, to the Initial
Purchasers, and to one firm of counsel for any such Holders or Initial Purchasers and will not file
any such documents as to which the Holders of Registrable Securities, the Initial Purchasers or any
of their respective counsel may reasonably object prior to such filing; and (iii) cause the
representatives of the Company to be available for discussion of such documents as shall be
reasonably requested by the Holders of Registrable Securities or the Initial Purchasers on behalf
of such Holders, and shall not at any time make any filing of any such document of which such
Holders, the Initial Purchasers on behalf of such Holders or their counsel shall not have
previously been advised and furnished a copy as required by this Section 3(p) or to which the

17

 

Majority Holders of Registrable Securities included in such Registration Statement, the
Initial Purchasers on behalf of such Holders or their counsel shall reasonably object prior to such
filing;

     (q) in the case of a Shelf Registration, use reasonable best efforts to cause the Registrable
Securities to be rated with the appropriate rating agencies, if so requested by the Majority
Holders of Registrable Securities, unless the Registrable Securities are already so rated;

     (r) otherwise use reasonable best efforts to comply with all applicable rules and regulations
of the SEC and, with respect to each Registration Statement and each post-effective amendment, if
any, thereto and each filing by the Company of an Annual Report on Form 10-K, make available to its
security holders, as soon as reasonably practicable, an earnings statement covering at least twelve
months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;

     (s) in the case of a Shelf Registration, immediately after the filing of any document which is
to be incorporated by reference into a Registration Statement or a Prospectus after initial filing
of a Registration Statement, provide as many copies of such document to the Initial Purchasers on
behalf of such Holders as shall be reasonably requested and, upon request of such Initial
Purchasers, make representatives of the Company as shall be reasonably requested by the Majority
Holders of Registrable Securities, or the Initial Purchasers on behalf of such Holders, available
for discussion of such document; and

     (t) in the case of a Shelf Registration and if Exchange Securities are so listed, use
reasonable best efforts to cause all Registrable Securities to be listed on any securities exchange
on which Exchange Securities are then listed if such listing of Registrable Securities included in
such Shelf Registration is requested by the Majority Holders of Registrable Securities.

     In the case of a Shelf Registration Statement, the Company may (as a condition to such
Holder’s participation in the Shelf Registration) require each Holder of Registrable Securities to
furnish to the Company such information regarding such Holder and the proposed distribution by such
Holder of such Registrable Securities as the Company may from time to time reasonably request in
writing and require such Holder to agree in writing to be bound by all provisions of this Agreement
applicable to such Holder. Each Holder of Registrable Securities as to which any Shelf
Registration is being effected agrees to furnish promptly to the Company all information required
to be disclosed so that the information previously furnished to the Company by such Holder is not
materially misleading and does not omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances under which
they were made.

     In the case of a Shelf Registration Statement, each Holder agrees and, in the event that any
Participating Broker-Dealer is using the Prospectus included in the Exchange Offer Registration
Statement in connection with the sale of Exchange Securities pursuant to Section 3(f), each such
Participating Broker-Dealer agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts of the kind described in Section 3(e)(ii)
through 3(e)(vi) hereof, such Holder or Participating Broker-Dealer, as the case may be, will
forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement
until receipt by such Holder or Participating Broker-Dealer, as the case

18

 

may be, of (i) the copies of the supplemented or amended Prospectus contemplated by Section
3(k) hereof or (ii) written notice from the Company that the Shelf Registration Statement or the
Exchange Offer Registration Statement, respectively, are once again effective or that no supplement
or amendment is required. If so directed by the Company, such Holder or Participating
Broker-Dealer, as the case may be, will deliver to the Company (at the Company’s expense) all
copies in its possession, other than permanent file copies then in its possession, of the
Prospectus covering such Registrable Securities that is current at the time of receipt of such
notice. Nothing in this paragraph shall prevent the accrual of Additional Interest on any
Securities, Private Exchange Securities or Exchange Securities.

     If the Company shall give any such notice to suspend the disposition of Registrable Securities
pursuant to the immediately preceding paragraph, the Company shall be deemed to have used
reasonable best efforts to keep the Shelf Registration Statement or, in the case of Section 3(f),
the Exchange Offer Registration Statement, as the case may be, effective during such period of
suspension; provided that (i) such period of suspension shall not exceed the time periods provided
in Section 2(e)(vii) hereof and (ii) the Company shall use reasonable best efforts to file and have
declared effective (if an amendment) as soon as practicable thereafter an amendment or supplement
to the Shelf Registration Statement or the Exchange Offer Registration Statement or both, as the
case may be, or the Prospectus included therein and shall, subject to Section 2(b)(C)(y), extend
the period during which the Shelf Registration Statement or the Exchange Offer Registration
Statement or both, as the case may be, shall be maintained effective pursuant to this Agreement
(and, if applicable, the period during which Participating Broker-Dealers may use the Prospectus
included in the Exchange Offer Registration Statement pursuant to Section 3(f) hereof) by the
number of days during the period from and including the date of the giving of such notice to and
including the earlier of the date when the Holders or Participating Broker-Dealers, respectively,
shall have received copies of the supplemented or amended Prospectus necessary to resume such
dispositions and the effective date of written notice from the Company to the Holders or
Participating Broker-Dealers, respectively, that the Shelf Registration Statement or the Exchange
Offer Registration Statement, respectively, are once again effective or that no supplement or
amendment is required.

     4. Underwritten Registrations.

     If any of the Registrable Securities covered by any Shelf Registration are to be sold in an
underwritten offering in accordance with Section 3(n), the investment banker or investment bankers
and manager or managers that will manage the offering will be selected by the Majority Holders of
such Registrable Securities included in such offering, subject to the consent of the Company, which
consent shall not be unreasonably withheld.

     No Holder of Registrable Securities may participate in any underwritten registration hereunder
unless such Holder (a) agrees to sell such Holder’s Registrable Securities 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.

19

 

     5. Indemnification and Contribution.

     (a) The Company and the Guarantors agree to indemnify and hold harmless each Initial
Purchaser, each Holder, each Participating Broker-Dealer and each Person, if any, who controls any
Initial Purchaser, Holder or Participating Broker-Dealer within the meaning of either Section 15 of
the 1933 Act or Section 20 of the 1934 Act (each a “Company Indemnitee”), against any losses,
claims, damages or liabilities, joint or several, to which such Company Indemnitee may become
subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement pursuant to which
Exchange Securities or Registrable Securities were registered under the 1933 Act, any related
Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Company Indemnitee for any legal or
other expenses reasonably incurred by such Company Indemnitee in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company and the Guarantors will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from any of such documents
in reliance upon and in conformity with written information furnished to the Company by any Initial
Purchaser, Holder or Participating Broker-Dealer with respect to such Initial Purchaser, Holder or
Participating Broker-Dealer, as the case may be, specifically for use therein; provided, further,
that as to any preliminary Prospectus, the indemnity agreement contained in this Section 5(a) shall
not inure to the benefit of any such Company Indemnitee on account of any loss, claim, damage,
liability, or action arising from the sale of the Exchange Securities or Registrable Securities to
any Person by that Company Indemnitee if (i) that Company Indemnitee failed to send or give a copy
of the Prospectus, as the same may be amended or supplemented to that Person within the time
required by the 1933 Act and (ii) the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact in such preliminary Prospectus was
corrected in the Prospectus, unless in each case the failure resulted from non-compliance by the
Company with Section 3(c) of this Agreement.

     (b) Each Initial Purchaser, each Holder and each Participating Broker-Dealer will severally
and not jointly indemnify and hold harmless the Company, each Guarantor, their respective directors
and officers, each other Initial Purchaser, each other selling Holder, each other Participating
Broker-Dealer and each Person, if any, who controls the Company, any Guarantor, any such Initial
Purchaser, any such Holder and any such Participating Broker-Dealer within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act (each a “Holder Indemnitee”), against any
losses, claims, damages or liabilities to which such Holder Indemnitee may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement pursuant to which Exchange Securities or
Registrable Securities were registered under the 1933 Act, any related Prospectus, or any amendment
or supplement thereto, or any related preliminary prospectus or preliminary prospectus supplement,
or arise out of or are based upon

20

 

the omission or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information furnished to the
Company by any Initial Purchaser, Holder or Participating Broker-Dealer with respect to such
Initial Purchaser, Holder or Participating Broker-Dealer, as the case may be, specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred.

     (c) Promptly after receipt by an indemnified party under this Section 5 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying
party of the commencement thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the indemnified party, be counsel
to the indemnifying party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 5 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than reasonable costs of
investigation. In no event shall the indemnifying parties be liable for the fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action 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 (i) includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of fault, culpability or a failure to act by or on behalf of an
indemnified party.

     (d) If the indemnification provided for in this Section 5 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the Guarantors from the
offering and sale of the Securities on the one hand and the Initial Purchaser, Holder or
Participating Broker-Dealer, as the case may be, on the other from the sale of the Registrable
Securities or Exchange Securities pursuant to the applicable Registration Statement by such Initial
Purchaser, Holder or Participating Broker-Dealer or (ii) if the allocation provided by clause (i)
above 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

21

 

the Company and the Guarantors on the one hand and such Initial Purchaser, Holder or
Participating Broker-Dealer on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantors on the one hand
and such Initial Purchaser, Holder or Participating Broker-Dealer on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total proceeds received by such Initial Purchaser, Holder or
Participating Broker-Dealer on the sale of such Registrable Securities or Exchange Securities, as
the case may be. The relative fault 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 such Initial
Purchaser, Holder or Participating Broker-Dealer and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Initial Purchaser, Holder or Participating Broker-Dealer
shall be required to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities or Exchange Securities sold by it to any purchaser exceeds the
amount of any damages which such Initial Purchaser, Holder or Participating Broker-Dealer has
otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

     (e) The obligations of the Company and the Guarantors under this Section 5 shall be in
addition to any liability which the Company and the Guarantors may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any Initial Purchaser,
Holder or Participating Broker-Dealer within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act; and the obligations of the Initial Purchasers, Holders and Participating
Broker-Dealers under this Section 5 shall be in addition to any liability which the respective
Initial Purchaser, Holder or Participating Broker-Dealer may otherwise have and shall extend, upon
the same terms and conditions, to each Guarantor, each director of the Company or a Guarantor, to
each officer of the Company or a Guarantor who has signed the Registration Statement and to each
person, if any, who controls the Company or a Guarantor within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act.

     The indemnity and contribution provisions contained in this Section 5 shall remain operative
and in full force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Initial Purchaser, Holder or Participating Broker-Dealer
or any Person controlling any Initial Purchaser, Holder or Participating Broker-Dealer, or by or on
behalf of the Company or either Guarantor, their officers or directors or any Person controlling
the Company or either Guarantor, (iii) acceptance of any of the Exchange Securities and (iv) any
sale of Registrable Securities or Exchange Securities pursuant to a Shelf Registration Statement.

22

 

     6. Miscellaneous.

     (a) Rule 144 and Rule 144A. For so long as American Standard Companies Inc. is
subject to the reporting requirements of Section 13 or 15(d) of the 1934 Act, American Standard
Companies Inc. covenants that it will file all reports required to be filed by it under Section
13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC thereunder, that if
it ceases to be so required to file such reports, it will upon the request of any Holder or
beneficial owner of Registrable Securities (i) make publicly available such information (including,
without limitation, the information specified in Rule 144(c)(2) under the 1933 Act) as is necessary
to permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver or cause to be delivered,
promptly following a request by any Holder or beneficial owner of Registrable Securities or any
prospective purchaser or transferee of Registrable Securities designated by such Holder or
beneficial owner, such information (including, without limitation, the information specified in
Rule 144A(d)(4) under the 1933 Act) as is necessary to permit sales pursuant to Rule 144A under the
1933 Act, and (iii) take such further action that is reasonable in the circumstances, in each case
to the extent required from time to time to enable such Holder to sell its Registrable Securities
without registration under the 1933 Act within the limitation of the exemptions provided by Rule
144, Rule 144A or any similar rules or regulations hereafter adopted by the SEC. Upon the request
of any Holder or beneficial owner of Registrable Securities, American Standard Companies Inc. will
deliver to such Holder or beneficial owner a written statement as to whether it has complied with
such requirements. Notwithstanding the foregoing, nothing in this Section 6(a) shall be deemed to
require the Company to register any of its securities pursuant to the 1934 Act.

     (b) No Inconsistent Agreements. The Company and the Guarantors have not entered into,
nor will the Company or the Guarantors on or after the date of this Agreement enter into, any
agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not and will not in any way conflict with and are not and will not be
inconsistent with the rights granted to the holders of any of the Company’s other issued and
outstanding securities under any other agreements entered into by the Company or any of its
subsidiaries.

     (c) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company has obtained the
written consent of Holders of a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement, waiver or departure.
Each Holder of Registrable Securities outstanding at the time of any such amendment, modification,
supplement, waiver or consent thereafter shall be bound by any such amendment, modification,
supplement, waiver or consent effected pursuant to this Section 6(c), whether or not any notice,
writing or marking indicating such amendment, modification, supplement, waiver or consent appears
on the Registrable Securities or is delivered to such Holder. Each Holder may waive compliance
with respect to any obligation of the Company under this Agreement as it may apply or be enforced
by such particular Holder.

23

 

     (d) Notices. All notices and other communications provided for or permitted hereunder
shall be made in writing by hand-delivery, first-class mail, telecopier, or any courier
guaranteeing overnight delivery (i) if to a Holder or Participating Broker-Dealer (other than an
Initial Purchaser), at the most current address set forth on the records of the registrar under the
Indenture, (ii) if to an Initial Purchaser, at the most current address given by such Initial
Purchaser to the Company by means of a notice given in accordance with the provisions of this
Section 6(d), which address initially is the address set forth in the Purchase Agreement; and (iii)
if to the Company, initially at the address set forth in the Purchase Agreement and thereafter at
such other address, notice of which is given in accordance with the provisions of this Section
6(d).

     All such notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; three business days after being deposited in the mail,
first class, postage prepaid, if mailed; when receipt is acknowledged, if telecopied; and on the
next business day if timely delivered to an air courier guaranteeing overnight delivery.

     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 specified in the Indenture.

     (e) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors, assigns and transferees of each of the parties, including, without
limitation and without the need for an express assignment, subsequent Holders; provided that
nothing herein shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be held subject to all
of the terms of this Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such Person shall be entitled to receive the benefits
hereof.

     (f) Third Party Beneficiary. Each Holder shall be a third party beneficiary of the
agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights or the rights of
other Holders hereunder. Each Holder, by its acquisition of Securities, shall be deemed to have
agreed to the provisions of Section 5(b) hereof.

     (g) 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.

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

24

 

     (i) Restriction on Resales. Until the expiration of two years (or such shorter period
as may hereafter be referred to in Rule 144(k) under the 1933 Act (or similar successor rule))
after the original issuance of the Securities, without the prior written consent of the Initial
Purchasers, the Issuer will not, and will not permit any of its affiliates (as defined in Rule
501(b) under the 1933 Act) to, resell any of the Securities that have been reacquired by them,
except for Securities purchased by the Issuer or any of its affiliates (as defined in Rule 501(b)
under the 1933 Act) and resold in a transaction registered under the 1933 Act.

     (j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

     (k) Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable,
the validity, legality and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.

[SIGNATURE PAGE FOLLOWS]

25

 

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

	 	 	 	 	 	 	 
	 	 	AMERICAN STANDARD INC.	 	 
	 
	 	 	 	 	 	 
	

	 

	 	BY:	 	 /s/  R. Scott Massengill	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	
NAME:  R. Scott Massengill
	 	 
	 

	 	 	 	TITLE:   Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	AMERICAN STANDARD COMPANIES INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 /s/  R. Scott Massengill	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  R. Scott Massengill	 	 
	 

	 	 	 	Title:    Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	AMERICAN STANDARD INTERNATIONAL INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 /s/  R. Scott Massengill	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:   R. Scott Massengill	 	 
	 

	 	 	 	Title:     Vice President and Treasurer	 	 
	

26

 

	 	 	 	 	 
	Confirmed and accepted
as of the date first above written:	 	 
	CITIGROUP GLOBAL MARKETS INC.	 	 
	J.P. MORGAN SECURITIES INC.	 	 
	And the other parties referred to in Annex A hereto	 	 
	 
	 	 	 	 
	By:

	 	CITIGROUP GLOBAL MARKETS INC.	 	 
	 
	 	 	 	 
	

	By:

	 	/s/  David Weiss
	 	 
	Name:
	 	David Weiss	 	 
	Title:
	 	Director	 	 
	

For itself and on behalf of the other Initial Purchasers

27

 

ANNEX A

INITIAL PURCHASERS

Citigroup Global Markets Inc.

J.P. Morgan Securities Inc.

Bank of America Securities LLC

Barclays Capital Inc.

ABN AMRO Incorporated

BNP Paribas Securities Corp.

Calyon Securities (USA) Inc.

HSBC Securities (USA) Inc.

Mitsubishi Securities International plc

Mizuho International plc

Scotia Capital (USA) Inc.

A-1

 

 

ANNEX B

PLAN OF DISTRIBUTION

     Each broker-dealer that receives new notes for its own account under the exchange offer must
acknowledge that it will deliver a prospectus in connection with any resale of those notes. This
prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer
for resales of new notes received in exchange for original notes that had been acquired as a result
of market-making or other trading activities. We have agreed that, for a period of 180 days after
the expiration date of the exchange offer, we will make this prospectus, as it may be amended or
supplemented, available to any broker-dealer for use in connection with any such resale. Any
broker-dealers required to use this prospectus and any amendments or supplements to this prospectus
for resales of the new notes must notify us of this fact by checking the box on the letter of
transmittal requesting additional copies of these documents.

     Notwithstanding the foregoing, we are entitled under the registration rights agreement to
suspend the use of this prospectus by broker-dealers under specified circumstances. For example, we
may suspend the use of this prospectus if:

	 	•	 	the SEC or any state securities authority requests an amendment or supplement to this
prospectus or the related registration statement or additional information;
	 
	 	•	 	the SEC or any state securities authority issues any stop order suspending the
effectiveness of the registration statement or initiates proceedings for that purpose;
	 
	 	•	 	we receive notification of the suspension of the qualification of the new notes for sale
in any U.S. jurisdiction or the initiation or threatening of any proceeding for that
purpose;
	 
	 	•	 	the suspension is required by law;
	 
	 	•	 	the suspension is taken by us in good faith and for valid business reason, including the
possible acquisition or divestiture of assets or a material corporate transaction or event;
or
	 
	 	•	 	an event occurs which makes any statement in this prospectus untrue in any material
respect or which constitutes an omission to state a material fact in this prospectus.

     If we suspend the use of this prospectus, the 180-day period referred to above will be
extended by a number of days equal to the period of the suspension.

     We will not receive any proceeds from any sale of new notes by broker-dealers. New notes
received by broker-dealers for their own account under the exchange offer may be sold from time to
time in one or more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on those notes or a combination of those methods of resale, at
market prices prevailing at the time of resale, at prices related to prevailing marketprices or at
negotiated prices. Any resales may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions from the selling
broker-dealer or the purchasers of the new notes. Any broker-dealer

B-1

 

 

ANNEX B

that resells new notes received by it for its own account under the exchange offer and any
broker or dealer that participates in a distribution of the new notes may be deemed to be an
“underwriter” within the meaning of the Securities Act and any profit on any resale of new notes
and any commissions or concessions received by these persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that, by acknowledging that
it will deliver and by delivering a prospectus, a broker- dealer will not be deemed to admit that
it is an “underwriter” within the meaning of the Securities Act.

     We have agreed to pay all expenses incidental to the exchange offer, including the expenses of
one counsel for the holders of old notes, other than commissions and concessions of any broker or
dealer and will indemnify holders of the new notes, including any broker-dealers, against certain
liabilities, including liabilities under the Securities Act or contribute to payments that they may
be required to make in request thereof.

B-2EX-4.2:

 

 

W. R. BERKLEY CORPORATION

TO

THE BANK OF NEW YORK, as Trustee

 

FOURTH SUPPLEMENTAL INDENTURE TO

INDENTURE DATED FEBRUARY 14, 2003

(SENIOR DEBT SECURITIES)

Dated as of May 9, 2005

 

5.60% Senior Notes due 2015

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 

	 	ARTICLE I	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Relation to Indenture; Definitions	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.1.

	 	RELATION TO INDENTURE
	 	 	1	 
	Section 1.2.

	 	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE II	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	The Series of Securities	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.1.

	 	TITLE OF THE SECURITIES
	 	 	2	 
	Section 2.2.

	 	LIMITATION ON AGGREGATE PRINCIPAL AMOUNT
	 	 	2	 
	Section 2.3.

	 	PRINCIPAL PAYMENT DATE
	 	 	2	 
	Section 2.4.

	 	INTEREST AND INTEREST RATES
	 	 	2	 
	Section 2.5.

	 	PLACE OF PAYMENT
	 	 	3	 
	Section 2.6.

	 	REDEMPTION
	 	 	3	 
	Section 2.7.

	 	DENOMINATION
	 	 	5	 
	Section 2.8.

	 	CURRENCY
	 	 	5	 
	Section 2.9.

	 	FORM OF NOTES
	 	 	5	 
	Section 2.10.

	 	REGISTRAR AND PAYING AGENT FOR THE NOTES
	 	 	5	 
	Section 2.11.

	 	SINKING FUND OBLIGATIONS
	 	 	5	 
	Section 2.12.

	 	DEFEASANCE AND COVENANT DEFEASANCE
	 	 	5	 
	Section 2.13.

	 	PAYMENT OF TAXES
	 	 	5	 
	Section 2.14.

	 	LIMITATION ON LIENS ON STOCK OF PRINCIPAL SUBSIDIARIES
	 	 	5	 
	Section 2.15.

	 	LIMITATIONS ON ISSUE OR DISPOSITION OF COMMON STOCK OF PRINCIPAL SUBSIDIARIES
	 	 	6	 
	Section 2.16.

	 	IMMEDIATELY AVAILABLE FUNDS	 	 	6	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE III	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Miscellaneous Provisions	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.1.

	 	TRUSTEE NOT RESPONSIBLE FOR RECITALS
	 	 	6	 
	Section 3.2.

	 	PAYMENT OF EXPENSES UPON RESIGNATION OR REMOVAL
	 	 	7	 
	Section 3.3.

	 	ADOPTION, RATIFICATION AND CONFIRMATION
	 	 	7	 
	Section 3.4.

	 	COUNTERPARTS
	 	 	7	 
	Section 3.5.

	 	GOVERNING LAW
	 	 	7	 

 

 

W. R. BERKLEY CORPORATION

FOURTH SUPPLEMENTAL INDENTURE TO

INDENTURE DATED FEBRUARY 14, 2003

(SENIOR DEBT SECURITIES)

$200,000,000

5.60% Senior Notes due 2015

          FOURTH SUPPLEMENTAL INDENTURE, dated as of May 9, 2005 between W. R. BERKLEY CORPORATION, a
Delaware corporation (the “Company”), and THE BANK OF NEW YORK, a trust company organized under the
laws of the State of New York, as Trustee (the “Trustee”).

RECITALS

          The Company has heretofore executed and delivered to the Trustee an indenture for senior debt
securities, dated as of February 14, 2003 (the “Indenture”), providing for the issuance from time
to time of series of the Company’s Securities.

          Section 3.1 of the Indenture provides for various matters with respect to any series of
Securities issued under the Indenture to be established in an indenture supplemental to the
Indenture.

          Section 9.1(4) of the Indenture provides for the Company and the Trustee to enter into an
indenture supplemental to the Indenture to establish the form or terms of Securities of any series
as provided by Sections 2.1 and 3.1 of the Indenture.

          NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH:

          For and in consideration of the premises and the issuance of the series of Securities provided
for herein, it is mutually agreed, for the equal and proportionate benefit of all Holders of the
Securities of such series, as follows:

ARTICLE I

RELATION TO INDENTURE; DEFINITIONS

          Section 1.1. RELATION TO INDENTURE. This Fourth Supplemental Indenture constitutes an
integral part of the Indenture.

          Section 1.2. DEFINITIONS. For all purposes of this Fourth Supplemental Indenture:

1

 

          (a) Capitalized terms used herein without definition shall have the meanings specified in the
Indenture;

          (b) All references herein to Articles and Sections, unless otherwise specified, refer to the
corresponding Articles and Sections of this Fourth Supplemental Indenture; and

          (c) The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this
Fourth Supplemental Indenture.

          (d) “Fair Value,” when used with respect to Common Stock, means the fair value thereof as
determined in good faith by the Board of Directors.

ARTICLE II

THE SERIES OF SECURITIES

          Section 2.1. TITLE OF THE SECURITIES. There shall be a series of Securities designated the
“5.60% Senior Notes due 2015” (the “Notes”).

          Section 2.2. LIMITATION ON AGGREGATE PRINCIPAL AMOUNT. The aggregate principal amount of the
Notes shall initially be limited to $200,000,000. The Company may, without the consent of the
Holders of the Notes, issue additional Securities having the same interest rate, maturity date and
other terms as described in the related prospectus supplement and prospectus. Any additional
Securities, together with the Notes offered by the related prospectus supplement, will constitute a
single series of Securities under the Indenture. No additional Securities may be issued if an Event
of Default under the Indenture has occurred and is continuing with respect to the Securities.

          Section 2.3. PRINCIPAL PAYMENT DATE. The principal amount of the Notes outstanding (together
with any accrued and unpaid interest) shall be payable in a single installment on May 15, 2015,
which date shall be the Stated Maturity of the Notes Outstanding.

          Section 2.4. INTEREST AND INTEREST RATES. The rate of interest on each Note shall be 5.60%
per annum, accruing from May 9, 2005, or from the most recent interest payment date (each such
date, an “Interest Payment Date”) to which interest has been paid or duly provided for, payable
semiannually in arrears on May 15 and November 15 of each year commencing November 15, 2005 until
the principal thereof shall have become due and payable, and until the principal thereof is paid or
duly provided for or made available for payment. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months. The amount
of interest payable for any partial period shall be computed on the basis of the actual number of
days elapsed in a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on any Note is not a Business Day, then payment of interest payable on such
date will be made on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay). The interest installment so payable in respect of any
Note, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in
the Indenture, be paid to the person in whose name such Note (or one or more Predecessor
Securities) is registered at the

2

 

close of business on May 1 or November 1 prior to such Interest Payment Date. Any such
interest installment not punctually paid or duly provided for in respect of any Note shall
forthwith cease to be payable to the registered Holder on such Regular Record Date and may either
be paid to the Person in whose name such Note (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date to be fixed by the Trustee for the payment of
such Defaulted Interest, notice whereof shall be given to the Holders of the Notes not less than 10
days prior to such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

          Section 2.5. PLACE OF PAYMENT. The Place of Payment where the Notes may be presented or
surrendered for payment, where the Notes may be surrendered for registration of transfer or
exchange and where notices and demand to or upon the Company in respect of the Notes and the
Indenture may be served shall be the Corporate Trust Office of the Trustee.

          Section 2.6. REDEMPTION.

          (a) The Company may redeem the Notes, in whole or in part, at any time at a Redemption Price
equal to the greater of (i) 100% of the principal amount of such Securities to be redeemed or (ii)
an amount, as determined by an Independent Investment Banker, equal to the sum of the present
values of the remaining scheduled payments of principal of and interest on the securities to be
redeemed (not including any portion of such payments of interest accrued as of the date of
redemption) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus 25 basis points, plus, in
either of the above cases, accrued and unpaid interest thereon to, but not including, the
Redemption Date.

          (b) For the purposes of this Section 2.6,

          “Adjusted Treasury Rate” means, with respect to any Redemption Date:

	 	–	 	the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated “H.15(519)” published by the Board of Governors
of the Federal Reserve System (or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity) under the caption “Treasury Constant
Maturities,” for the maturity corresponding to the Comparable Treasury Issue.
If no maturity is within three months before or after the Remaining Life,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate
shall be interpolated or

3

 

extrapolated from such yields on a straight line basis, rounding to the
nearest month; or

	 	–	 	if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.

          The Adjusted Treasury Rate shall be calculated on the third Business Day preceding the
Redemption Date.

          “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term of the notes to
be redeemed that would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of such securities (“Remaining Life”).

          “Comparable Treasury Price” means (i) the average of three Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such quotations.

          “Independent Investment Banker” means one of the Reference Treasury Dealers appointed by us.

          “Reference Treasury Dealer” means:

	 	–	 	each of Credit Suisse First Boston LLC and Merrill Lynch, Pierce, Fenner &
Smith Incorporated and their respective successors; provided that, if any of
the foregoing ceases to be a primary U.S. Government securities dealer in the
United States (a “Primary Treasury Dealer”), the Company shall substitute
therefor another Primary Treasury Dealer; and
	 
	 	–	 	any other Primary Treasury Dealer selected by the Company.

          “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by the Independent Investment Banker, of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City Time, on the third Business Day preceding such Redemption Date.

          The Company will mail a notice of redemption at least 30 days but not more than 60 days before
the Redemption Date to each holder of the notes to be redeemed. If less than all

4

 

of the notes are to be redeemed, the trustee will select, by such method as it will deem fair
and appropriate, including pro rata or by lot, the notes to be redeemed in whole or in part.

          Unless the Company defaults in payment of the Redemption Price, on and after the Redemption
Date, interest will cease to accrue on the notes or portions thereof called for redemption.

          Section 2.7. DENOMINATION. The Notes shall be issuable only in registered form without
coupons and in denominations of $1,000 and integral multiples thereof.

          Section 2.8. CURRENCY. Principal and interest on the Notes shall be payable in such coin or
currency of the United States of America that at the time of payment is legal tender for payment of
public and private debts.

          Section 2.9. FORM OF NOTES. The Notes shall be substantially in the form attached as EXHIBIT
A hereto.

          Section 2.10. REGISTRAR AND PAYING AGENT FOR THE NOTES. The Trustee shall serve initially as
Registrar and Paying Agent for the Notes.

          Section 2.11. SINKING FUND OBLIGATIONS. The Company has no obligation to redeem or purchase
any Notes pursuant to any sinking fund or analogous requirement or upon the happening of a
specified event or at the option of a Holder thereof.

          Section 2.12. DEFEASANCE AND COVENANT DEFEASANCE. The Company has elected to have both
Section 4.2(2) of the Indenture (relating to defeasance) and Section 4.2(3) (relating to covenant
defeasance) applied to the Notes.

          Section 2.13. PAYMENT OF TAXES. The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and lawful claims for labor, materials and supplies,
which, if unpaid, might by law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment or governmental charge whose amount, applicability or
validity is being contested in good faith by appropriate proceedings or where the failure to effect
such payment is not adverse in any material respect to the Holders of the Notes.

          Section 2.14. LIMITATION ON LIENS ON STOCK OF PRINCIPAL SUBSIDIARIES. The Company will not,
and it will not permit any Subsidiary of the Company to, at any time directly or indirectly create,
assume, incur or permit to exist any Indebtedness secured by a pledge, lien or other encumbrance
(any pledge, lien or other encumbrance being hereinafter in this Section referred to as a “lien”)
on the voting securities of Principal Subsidiaries, or the voting securities of a Subsidiary that
owns, directly or indirectly, the voting securities of any of the Principal Subsidiaries without
making effective provision whereby the Notes then Outstanding (and, if the Company so elects, any
other Indebtedness of the Company

5

 

that is not subordinate to the Notes and with respect to which the governing instruments
require, or pursuant to which the Company is otherwise obligated or required, to provide such
security) shall be equally and ratably secured with such secured Indebtedness so long as such other
Indebtedness shall be secured. For purposes of this Section 2.14 only, “Indebtedness”, in addition
to those items specified in Section 1.1 of the Indenture, shall include any obligation of, or any
such obligation guaranteed by, any Person for the payment of amounts due under a swap agreement or
other similar instrument or agreement or foreign currency hedge exchange or similar instrument or
agreement.

          If the Company shall hereafter be required to secure the Notes equally and ratably with any
other Indebtedness pursuant to this Section, (i) the Company will promptly deliver to the Trustee
an Officer’s Certificate stating that the foregoing covenant has been complied with, and an Opinion
of Counsel stating that in the opinion of such counsel the foregoing covenant has been complied
with and that any instruments executed by the Company or any Subsidiary of the Company in the
performance of the foregoing covenant comply with the requirements of the foregoing covenant and
(ii) the Trustee is hereby authorized to enter into an indenture or agreement supplemental hereto
and to take such action, if any, as it may deem advisable to enable it to enforce the rights of the
holders of the Notes so secured.

          Section 2.15. LIMITATIONS ON ISSUE OR DISPOSITION OF COMMON STOCK OF PRINCIPAL SUBSIDIARIES.
As long as any of the Notes remain outstanding, the Company will not, and will not permit any
Subsidiary to, issue, sell, assign, transfer or otherwise dispose of, directly or indirectly, any
of the Common Stock of any Principal Subsidiary (except to the Company or to one or more
Subsidiaries or for the purpose of qualifying directors); provided, however, that this covenant
shall not apply if (i) the issuance, sale, assignment, transfer or other disposition is required to
comply with the order of a court or regulatory authority of competent jurisdiction, other than an
order issued at the request of the Company or of one of its Subsidiaries; (ii) the entire Common
Stock of a Principal Subsidiary then owned by the Company or by its Subsidiaries is disposed of in
a single transaction or in a series of related transactions, for consideration consisting of cash
or other property which is at least equal to the Fair Value of such Common Stock; or (iii) after
giving effect to the issuance, sale, assignment, transfer or other disposition, the Company and its
Subsidiaries would own directly or indirectly at least 80% of the issued and outstanding Common
Stock of such Principal Subsidiary and such issuance, sale, assignment, transfer or other
disposition is made for consideration consisting of cash or other property which is at least equal
to the Fair Value of such Common Stock.

          Section 2.16. IMMEDIATELY AVAILABLE FUNDS. All payments of principal and interest shall be
made in immediately available funds.

ARTICLE III

MISCELLANEOUS PROVISIONS

          Section 3.1. TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals herein contained are made by
the Company and not by the Trustee, and the Trustee assumes no

6

 

responsibility for the correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this Fourth Supplemental Indenture.

          Section 3.2. PAYMENT OF EXPENSES UPON RESIGNATION OR REMOVAL. Upon termination of this Fourth
Supplemental Indenture or the Indenture or the removal or resignation of the Trustee, unless
otherwise stated, the Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation.

          Section 3.3. ADOPTION, RATIFICATION AND CONFIRMATION. The Indenture, as supplemented and
amended by this Fourth Supplemental Indenture, is in all respects hereby adopted, ratified and
confirmed.

          Section 3.4. COUNTERPARTS. This Fourth Supplemental Indenture may be executed in any number
of counterparts, each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.

          Section 3.5. GOVERNING LAW. THIS FOURTH SUPPLEMENTAL INDENTURE AND EACH NOTE SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.

7

 

     IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be
duly executed on the day and year first above written.

	 	 	 	 	 
	 	W. R. BERKLEY CORPORATION

 	 
	 	By:  	/s/ Eugene G. Ballard
 	 
	 	 	Name:  	Eugene G. Ballard 	 
	 	 	Title:  	Senior Vice President, 	 
	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK, as Trustee

 	 
	 	By:  	/s/ Geovanni Barris
 	 
	 	 	Name:  	Geovanni Barris 	 
	 	 	Title:  	Vice President 	 

8

 

EXHIBIT A

(FORM OF FACE OF NOTE)

          This Note is a global Note within the meaning of the Indenture hereinafter referred to and is
registered in the name of a Depository or a nominee of a Depository. This Note is exchangeable for
Securities registered in the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Indenture, and no transfer of this Note (other than a
transfer of this Note as a whole by the Depository to a nominee of the Depository or by a nominee
of the Depository to the Depository or another nominee of the Depository) may be registered except
in limited circumstances.

          Unless this Note is presented by an authorized representative of The Depository Trust Company
(55 Water Street, New York, New York) to the issuer or its agent for registration of transfer,
exchange or payment, and any Note issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company and any payment hereon
is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.

	 	 	 
	Certificate No. 4

Dated: May 9, 2005

	 	$200,000,000

CUSIP No. 084423AM4

W. R. BERKLEY CORPORATION

5.60% Senior Notes due 2015

          W. R. BERKLEY CORPORATION, a Delaware corporation (the “Company,” which term includes any
successor corporation under the Indenture hereinafter referred to), for value received, hereby
promises to pay to CEDE & CO. or registered assigns, the principal sum of TWO HUNDRED MILLION
DOLLARS AND NO CENTS ($200,000,000.00) on May 15, 2015. The Company further promises to pay
interest on said principal sum outstanding from May 9, 2005, or from the most recent interest
payment date (each such date, an “Interest Payment Date”) to which interest has been paid or duly
provided for, semiannually (subject to deferral as set forth herein) in arrears on May 15 and
November 15 of each year commencing November 15, 2005 at the rate of 5.60% per annum, until the
principal hereof shall have become due and payable and, until the principal hereof is paid or duly
provided for or made available for payment. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day year of twelve 30-day months. The amount of
interest payable for any partial period shall be computed on the basis of the number of actual days
elapsed in a 360-day year of twelve 30-day months. In the event that any date on which interest is
payable on this Note is not a Business Day, then payment of interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay). A “Business Day,” with respect to any Place of Payment or other
location, shall mean any day other than a Saturday, Sunday or other day on which banking
institutions in such

A-1

 

Place of Payment or other location are authorized or obligated by law, regulation or executive
order to close. The interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name
this Note (or one or more Predecessor Securities) is registered at the close of business on May 1
or November 1 prior to such Interest Payment Date. Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to the registered Holder on such
Regular Record Date and may either be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on a Special Record Date to be fixed
by the Trustee for the payment of such Defaulted Interest, notice whereof shall be given to the
Holder of this Note not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any securities exchange on
which this Note may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture.

          The principal of (and premium, if any) and the interest on this Note shall be payable at the
office or agency of the Company maintained for that purpose in the United States in such coin or
currency of the United States of America that at the time of payment is legal tender for payment of
public and private debts; PROVIDED, HOWEVER, that payment of interest may be made at the option of
the Company by check mailed to the registered Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the Holder of this Note is Cede & Co.,
the payment of the principal of (and premium, if any) and interest on this Note will be made at
such place and to such account as may be designated by Cede & Co. All payments of principal and
interest hereunder shall be made in immediately available funds.

          Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.

          Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the
Indenture or be valid for any purpose.

A-2

 

          IN WITNESS WHEREOF, the Company has caused this instrument to be executed.

	 	 	 	 	 
	 	W. R. BERKLEY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

CERTIFICATE OF AUTHENTICATION

          This is one of the Securities of the series designated herein referred to in the
within-mentioned Indenture.

	 	 	 
	Dated: May 9, 2005
	 	 
	 
	 	 
	THE BANK OF NEW YORK,

as Trustee
	 	 
	 
	 	 

	 	 	 
	By:  	 	 
	 	Authorized Signatory

	 

A-3

 

(FORM OF REVERSE OF NOTE)

          This Note is one of a duly authorized issue of securities of the Company, designated as its
5.60% Senior Notes due 2015 (herein referred to as the “Securities”), issued under and pursuant to
an Indenture, dated as of February 14, 2003 between the Company and The Bank of New York, as
Trustee (herein called the “Trustee,” which term includes any successor trustee under the
Indenture), as supplemented by the Fourth Supplemental Indenture dated as of May 9, 2005, between
the Company and the Trustee (the Indenture as so supplemented, the “Indenture”), to which Indenture
and all indentures supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company
and the Holders of the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.

                    All terms used in this Note that are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

                    The Company may redeem the Securities, in whole or in part, at any time at a
Redemption Price equal to the greater of (i) 100% of the principal amount of such
Securities to be redeemed or (ii) an amount, as determined by an Independent Investment
Banker, the sum of the present values of the remaining scheduled payments of principal of
and interest thereon on the securities to be redeemed (not including any portion of such
payments of interest accrued to the date of redemption) discounted to the Redemption Date
on a semiannual basis assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate, plus 25 basis points, plus, in either of the above cases, accrued
and unpaid interest thereon to the Redemption Date.

          “Adjusted Treasury Rate” means, with respect to any Redemption Date:

	 	–	 	the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated “H.15(519)” published by the Board of Governors
of the Federal Reserve System (or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity) under the caption “Treasury Constant
Maturities,” for the maturity corresponding to the Comparable Treasury Issue.
If no maturity is within three months before or after the Remaining Life,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate
shall be interpolated or extrapolated from such yields on a straight line
basis, rounding to the nearest month; or
	 
	 	–	 	if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semiannual equivalent yield to maturity of the

A-4

 

Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to
the Comparable Treasury Price for such Redemption Date.

          The Adjusted Treasury Rate shall be calculated on the third Business Day preceding the
Redemption Date.

          “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term of the
securities to be redeemed that would be used, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such securities (“Remaining Life”).

          “Comparable Treasury Price” means (i) the average of three Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such quotations.

          “Independent Investment Banker” means one of the Reference Treasury Dealers appointed by us.

          “Reference Treasury Dealer” means:

	 	–	 	each of Credit Suisse First Boston LLC and Merrill Lynch, Pierce, Fenner &
Smith Incorporated and their respective successors; provided, however, that if
any of the foregoing shall cease to be a primary U.S. Government securities
dealer in the United States (a “Primary Treasury Dealer”), the Company shall
substitute therefor another Primary Treasury Dealer; and
	 
	 	–	 	any other Primary Treasury Dealer selected by the Company.

          “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by the Independent Investment Banker, of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City Time, on the third Business Day preceding such Redemption Date.

          The Company will mail a notice of redemption at least 30 days but not more than 60 days before
the Redemption Date to each holder of the securities to be redeemed. If less than all of the
securities are to be redeemed, the Trustee will select, by such method as it will deem fair and
appropriate, including pro rata or by lot, the securities to be redeemed in whole or in part.

          Unless we default in payment of the Redemption Price, on and after the Redemption Date,
interest will cease to accrue on the securities or portions thereof called for redemption.

A-5

 

          If an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due and payable in the
manner, with the effect and subject to the conditions provided in the Indenture.

          The Indenture contains provisions for satisfaction, discharge and defeasance at any time of
the entire indebtedness of this Note upon compliance by the Company with certain conditions set
forth in the Indenture.

          The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of a majority in principal amount of the Securities of each
series at the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting Holders of specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note
shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note. No reference herein to
the Indenture and no provision of this Note or of the Indenture (other than Section 4.2 of the
Indenture) shall alter or impair the obligation of the Company to pay the principal and interest on
the Note at the times, place and rate, and in the coin or currency, herein prescribed.

          As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note is registrable in the Security Register, upon surrender of this Note for
registration of transfer at the office or agency of the Company maintained under Section 10.2 of
the Indenture duly endorsed by, or accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Security Registrar, duly executed by the Holder hereof or his
or her attorney duly authorized in writing, and thereupon one or more new Securities of this
series, of authorized denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees. No service charge shall be made for any such registration
of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.

          Prior to due presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

          This global Note is exchangeable for Securities in definitive form only under certain limited
circumstances set forth in the Indenture. Securities of this series so issued are issuable only in
registered form without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations herein and

A-6

 

therein set forth, Securities of this series so issued are exchangeable for a like aggregate
principal amount of Securities of this series of a different authorized denomination, as requested
by the Holder surrendering the same.

          The Company and, by its acceptance of this Note or a beneficial interest therein, the Holder
of, and any Person that acquires a beneficial interest in, this Note agree that for United States
federal, state and local tax purposes it is intended that this Note constitute indebtedness.

          THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THE SECURITIES
WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.

A-7

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