Document:

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                                                                     Exhibit 4.8

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                      COMMON SECURITIES GUARANTEE AGREEMENT

                                       by

                           W. R. BERKLEY CORPORATION,
                                  as Guarantor

                                   relating to

                         W. R. BERKLEY CAPITAL TRUST II

                            Dated as of July 26, 2005

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                                TABLE OF CONTENTS

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ARTICLE I.    DEFINITIONS AND INTERPRETATION............................................       1

Section 1.1.  Definitions and Interpretation............................................       1

ARTICLE II.   TRUST INDENTURE ACT.......................................................       4

Section 2.1.  Trust Indenture Act; Application..........................................       4
Section 2.2.  Lists of Holders of Securities............................................       4
Section 2.3.  Reports by the Common Guarantee Trustee...................................       5
Section 2.4.  Periodic Reports to Common Guarantee Trustee..............................       5
Section 2.5.  Evidence of Compliance with Conditions Precedent..........................       5
Section 2.6.  Events of Default; Waiver.................................................       5
Section 2.7.  Event of Default; Notice..................................................       5
Section 2.8.  Conflicting Interests.....................................................       6

ARTICLE III.  POWERS, DUTIES AND RIGHTS OF COMMON GUARANTEE TRUSTEE.....................       6

Section 3.1.  Powers and Duties of the Common Guarantee Trustee.........................       6
Section 3.2.  Certain Rights of Common Guarantee Trustee................................       8
Section 3.3.  Not Responsible for Recitals or Issuance of Guarantee.....................       9

ARTICLE IV.   COMMON GUARANTEE TRUSTEE..................................................      10

Section 4.1.  Common Guarantee Trustee; Eligibility.....................................      10
Section 4.2.  Appointment, Removal and Resignation of Common Guarantee Trustees.........      10

ARTICLE V.    GUARANTEE.................................................................      11

Section 5.1.  Guarantee.................................................................      11
Section 5.2.  Waiver of Notice and Demand...............................................      11
Section 5.3.  Obligations Not Affected..................................................      11
Section 5.4.  Rights of Holders.........................................................      12
Section 5.5.  Guarantee of Payment......................................................      12
Section 5.6.  Subrogation...............................................................      12
Section 5.7.  Independent Obligations...................................................      13
Section 5.8.  Taxes.....................................................................      13

ARTICLE VI.   LIMITATION OF TRANSACTIONS; SUBORDINATION.................................      13

Section 6.1.  Limitation of Transactions................................................      13
Section 6.2.  Subordinated Ranking......................................................      14
Section 6.3.  Event of Default..........................................................      14

ARTICLE VII.  TERMINATION...............................................................      14

Section 7.1.  Termination...............................................................      14

ARTICLE VIII. INDEMNIFICATION...........................................................      15

Section 8.1.  Exculpation...............................................................      15
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Section 8.2. Indemnification...........................................................      15

ARTICLE IX.  MISCELLANEOUS.............................................................      16

Section 9.1. Successors and Assigns....................................................      16
Section 9.2. Amendments................................................................      16
Section 9.3. Notices...................................................................      16
Section 9.4. Benefit...................................................................      17
Section 9.5. Governing Law.............................................................      17
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                      COMMON SECURITIES GUARANTEE AGREEMENT

      This GUARANTEE AGREEMENT (the "Common Securities Guarantee"), dated as of
July 26, 2005, is executed and delivered by W. R. Berkley Corporation, a
Delaware corporation (the "Guarantor"), and The Bank of New York, a New York
corporation, as trustee (the "Common Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Common Securities (as
defined herein) of W. R. Berkley Capital Trust II, a Delaware statutory trust
(the "Issuer").

      WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of July 26, 2005, among the trustees of the Issuer named
therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 10,000,000 preferred securities, having an aggregate
liquidation amount of $250,000,000, designated the 6.750% Trust Originated
Preferred Securities (the "Preferred Securities") and four common securities,
having an aggregate liquidation amount of $100 designated the 6.750% Trust
Originated Common Securities (the "Common Securities");

      WHEREAS, as incentive for the Holders to purchase the Common Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Common Securities Guarantee, to pay to the Holders of the
Common Securities the Guarantee Payments (as defined herein) and to make certain
other payments on the terms and conditions set forth herein; and

      WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") in substantially identical
terms to this Common Securities Guarantee for the benefit of the holders of the
Preferred Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under the Preferred Securities
Guarantee.

      NOW, THEREFORE, in consideration of the purchase by each Holder of Common
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.

                                   ARTICLE I.

                         DEFINITIONS AND INTERPRETATION

      Section 1.1. Definitions and Interpretation. In this Common Securities
Guarantee, unless the context otherwise requires:

            (a) Capitalized terms used in this Common Securities Guarantee but
      not defined in the preamble above have the respective meanings assigned to
      them in this Section 1.1;

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            (b) a term defined anywhere in this Common Securities Guarantee has
      the same meaning throughout;

            (c) all references to "the Common Securities Guarantee" or "this
      Common Securities Guarantee" are to this Common Securities Guarantee as
      modified, supplemented or amended from time to time;

            (d) all references in this Common Securities Guarantee to Articles
      and Sections are to Articles and Sections of this Common Securities
      Guarantee, unless otherwise specified;

            (e) a term defined in the Trust Indenture Act has the same meaning
      when used in this Common Securities Guarantee, unless otherwise defined in
      this Common Securities Guarantee or unless the context otherwise requires;
      and

            (f) a reference to the singular includes the plural and vice versa.

      "Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.

      "Authorized Officer" of a Person means any Person that is authorized to
bind such Person.

      "Business Day" means any day other than a day on which banking
institutions in New York, New York or Wilmington, Delaware are authorized or
required by law or executive order to close.

      "Common Guarantee Trustee" means The Bank of New York until a Successor
Common Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Common Securities Guarantee and thereafter means
each such Successor Common Guarantee Trustee.

      "Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.

      "Corporate Trust Office" means the office of the Common Guarantee Trustee
at which the corporate trust business of the Common Guarantee Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Agreement is located at The Bank of New York, 101 Barclay
Street, 8W, New York, New York 10286.

      "Covered Person" means any Holder or beneficial owner of Common
Securities.

      "Debentures" means the series of junior subordinated debt securities of
the Guarantor designated the 6.750% Subordinated Debentures due 2045, held by
the Property Trustee (as defined in the Trust Agreement) of the Issuer.

      "Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Common Securities Guarantee.

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      "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Trust Agreement) that are required to be paid on such Common Securities
to the extent the Issuer shall have funds available therefor at such time, (ii)
the redemption price, including all accrued and unpaid Distributions to the date
of redemption (the "Redemption Price") to the extent the Issuer has funds
available therefor at such time, with respect to any Common Securities called
for redemption, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the Common
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor at such time, and (b) the amount of assets of the Issuer
remaining available at such time for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution"). If an event of
default under the Indenture has occurred and is continuing, the rights of
holders of the Common Securities to receive payments under this Common
Securities Guarantee Agreement are subordinated to the rights of Holders of
Preferred Securities to receive the guarantee payments under the Preferred
Securities Guarantee.

      "Holder" shall mean any holder, as registered on the books and records of
the Issuer of any Common Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Common Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.

      "Indemnified Person" means the Common Guarantee Trustee, any Affiliate of
the Common Guarantee Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Common Guarantee Trustee.

      "Indenture" means the Subordinated Indenture dated as of July 26, 2005,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee, and any indenture supplemental thereto pursuant to which certain
subordinated debt securities of the Debenture Issuer are to be issued to the
Property Trustee of the Issuer.

      "Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Common Securities,
voting separately as a class, of more than 50% of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Common Securities.

      "Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Common Securities Guarantee shall include:

            (a) a statement that each officer signing the Officers' Certificate
      has read the covenant or condition and the definition relating thereto;

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            (b) a brief statement of the nature and scope of the examination or
      investigation undertaken by each officer in rendering the Officers'
      Certificate;

            (c) a statement that each such officer has made such examination or
      investigation as, in such officer's opinion, is necessary to enable such
      officer to express an informed opinion as to whether or not such covenant
      or condition has been complied with; and

            (d) a statement as to whether, in the opinion of each such officer,
      such condition or covenant has been complied with.

      "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

      "Responsible Officer" means, with respect to the Common Guarantee Trustee,
any officer within the Corporate Trust Office of the Common Guarantee Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Common Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.

      "Successor Common Guarantee Trustee" means a successor Common Guarantee
Trustee possessing the qualifications to act as Common Guarantee Trustee under
Section 4.1.

      "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

                                  ARTICLE II.

                              TRUST INDENTURE ACT

      Section 2.1. Trust Indenture Act; Application.

            (a) This Common Securities Guarantee is subject to the provisions of
      the Trust Indenture Act that are required to be part of this Common
      Securities Guarantee and shall, to the extent applicable, be governed by
      such provisions; and

            (b) if and to the extent that any provision of this Common
      Securities Guarantee limits, qualifies or conflicts with the duties
      imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such
      imposed duties shall control.

      Section 2.2. Lists of Holders of Securities.

            (a) The Guarantor shall provide the Common Guarantee Trustee with a
      list, in such form as the Common Guarantee Trustee may reasonably require,
      of the names and

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      addresses of the Holders of the Common Securities ("List of Holders") as
      of such date, (i) concurrently with the provision of such a list to the
      Property Trustee pursuant to the Trust Agreement, and (ii) at any time
      within 30 days of receipt by the Guarantor of a written request for a List
      of Holders as of a date no more than 14 days before such List of Holders
      is given to the Common Guarantee Trustee provided, that the Guarantor
      shall not be obligated to provide such List of Holders at any time the
      List of Holders does not differ from the most recent List of Holders given
      to the Common Guarantee Trustee by the Guarantor. The Common Guarantee
      Trustee may destroy any List of Holders previously given to it on receipt
      of a new List of Holders.

            (b) The Common Guarantee Trustee shall comply with its obligations
      under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture
      Act.

      Section 2.3. Reports by the Common Guarantee Trustee. Within 60 days after
May 15 of each year, the Common Guarantee Trustee shall provide to the Holders
of the Common Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Common Guarantee Trustee shall also comply
with the requirements of Section 313(d) of the Trust Indenture Act.

      Section 2.4. Periodic Reports to Common Guarantee Trustee. The Guarantor
shall provide to the Common Guarantee Trustee such documents, reports and
information as required by Section 314 (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act.

      Section 2.5. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Common Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Common
Securities Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.

      Section 2.6. Events of Default; Waiver. The Holders of a Majority in
liquidation amount of Common Securities may, by vote, on behalf of the Holders
of all of the Common Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Common Securities Guarantee, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.

      Section 2.7. Event of Default; Notice.

            (a) (i) The Common Guarantee Trustee shall, within five (5) Business
      Days after the occurrence of an Event of Default, transmit by mail, first
      class postage prepaid, to the Holders of the Common Securities , notices
      of all Events of Default actually known to a Responsible Officer of the
      Common Guarantee Trustee, unless such defaults have

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      been cured before the giving of such notice, provided, that, the Common
      Guarantee Trustee shall be protected in withholding such notice if and so
      long as a Responsible Officer of the Common Guarantee Trustee in good
      faith determines that the withholding of such notice is in the interests
      of the Holders of the Common Securities.

            (b) The Common Guarantee Trustee shall not be deemed to have
      knowledge of any Event of Default unless the Common Guarantee Trustee
      shall have received written notice, or unless a Responsible Officer of the
      Common Guarantee Trustee charged with the administration of the Trust
      Agreement shall have obtained actual knowledge thereof or shall have
      received written notice of such Event of Default.

      Section 2.8. Conflicting Interests. The Trust Agreement shall be deemed to
be specifically described in this Common Securities Guarantee for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.

                                  ARTICLE III.

                          POWERS, DUTIES AND RIGHTS OF
                            COMMON GUARANTEE TRUSTEE

      Section 3.1. Powers and Duties of the Common Guarantee Trustee.

            (a) This Common Securities Guarantee shall be held by the Common
      Guarantee Trustee for the benefit of the Holders of the Common Securities
      , and the Common Guarantee Trustee shall not transfer this Common
      Securities Guarantee to any Person except a Holder of Common Securities
      exercising his or her rights pursuant to Section 5.4(b) or to a Successor
      Common Guarantee Trustee on acceptance by such Successor Common Guarantee
      Trustee of its appointment to act as Successor Common Guarantee Trustee.
      The right, title and interest of the Common Guarantee Trustee shall
      automatically vest in any Successor Common Guarantee Trustee, and such
      vesting and cessation of title shall be effective whether or not
      conveyancing documents have been executed and delivered pursuant to the
      appointment of such Successor Common Guarantee Trustee.

            (b) If an Event of Default actually known to a Responsible Officer
      of the Common Guarantee Trustee has occurred and is continuing, the Common
      Guarantee Trustee shall enforce this Common Securities Guarantee for the
      benefit of the Holders of the Common Securities.

            (c) The Common Guarantee Trustee, before the occurrence of any Event
      of Default and after the curing or waiver of all Events of Default that
      may have occurred, shall undertake to perform only such duties as are
      specifically set forth in this Common Securities Guarantee, and no implied
      covenants or obligations shall be read into this Common Securities
      Guarantee against the Common Guarantee Trustee. In case an Event of
      Default has occurred (that has not been cured or waived pursuant to
      Section 2.6) and is actually known to a Responsible Officer of the Common
      Guarantee Trustee, the Common Guarantee Trustee shall exercise such of the
      rights and powers vested in it by this

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      Common Securities Guarantee, and shall use the same degree of care and
      skill in its exercise thereof, as a prudent person would exercise or use
      under the circumstances in the conduct of his or her own affairs.

            (d) No provision of this Common Securities Guarantee shall be
      construed to relieve the Common Guarantee Trustee from liability for its
      own negligent action, its own negligent failure to act, or its own willful
      misconduct, except that:

            (e) prior to the occurrence of any Event of Default and after the
      curing or waiving of all such Events of Default that may have occurred:

                  (A) the duties and obligations of the Common Guarantee Trustee
            shall be determined solely by the express provisions of this Common
            Securities Guarantee, and the Common Guarantee Trustee shall not be
            liable except for the performance of such duties and obligations as
            are specifically set forth in this Common Securities Guarantee, and
            no implied covenants or obligations shall be read into this Common
            Securities Guarantee against the Common Guarantee Trustee; and

                  (B) in the absence of bad faith on the part of the Common
            Guarantee Trustee, the Common Guarantee Trustee may conclusively
            rely, as to the truth of the statements and the correctness of the
            opinions expressed therein, upon any certificates or opinions
            furnished to the Common Guarantee Trustee and conforming to the
            requirements of this Common Securities Guarantee; but in the case of
            any such certificates or opinions that by any provision hereof are
            specifically required to be furnished to the Common Guarantee
            Trustee, the Common Guarantee Trustee shall be under a duty to
            examine the same to determine whether or not they conform to the
            requirements of this Common Securities Guarantee;

            (f) the Common Guarantee Trustee shall not be liable for any error
      of judgment made in good faith by a Responsible Officer of the Common
      Guarantee Trustee, unless it shall be proved that the Common Guarantee
      Trustee was negligent in ascertaining the pertinent facts upon which such
      judgment was made;

            (g) the Common Guarantee Trustee shall not be liable with respect to
      any action taken or omitted to be taken by it in good faith in accordance
      with the direction of the Holders of not less than a Majority in
      liquidation amount of the Common Securities relating to the time, method
      and place of conducting any proceeding for any remedy available to the
      Common Guarantee Trustee, or exercising any trust or power conferred upon
      the Common Guarantee Trustee under this Common Securities Guarantee; and

            (h) no provision of this Common Securities Guarantee shall require
      the Common Guarantee Trustee to expend or risk its own funds or otherwise
      incur personal financial liability in the performance of any of its duties
      or in the exercise of any of its rights or powers, if the Common Guarantee
      Trustee shall have reasonable grounds for believing that the repayment of
      such funds or liability is not reasonably assured to it

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      under the terms of this Common Securities Guarantee or indemnity,
      reasonably satisfactory to the Common Guarantee Trustee, against such risk
      or liability is not reasonably assured to it.

      Section 3.2. Certain Rights of Common Guarantee Trustee. Subject to the
provisions of Section 3.1:

            (a) The Common Guarantee Trustee may conclusively rely, and shall be
      fully protected in acting or refraining from acting upon, any resolution,
      certificate, statement, instrument, opinion, report, notice, request,
      direction, consent, order, bond, debenture, note, other evidence of
      indebtedness or other paper or document believed by it to be genuine and
      to have been signed, sent or presented by the proper party or parties.

            (b) Any direction or act of the Guarantor contemplated by this
      Common Securities Guarantee shall be sufficiently evidenced by a Direction
      (as defined in the Trust Agreement) or an Officers' Certificate.

            (c) Whenever, in the administration of this Common Securities
      Guarantee, the Common Guarantee Trustee shall deem it desirable that a
      matter be proved or established before taking, suffering or omitting any
      action hereunder, the Common Guarantee Trustee (unless other evidence is
      herein specifically prescribed) may, in the absence of bad faith on its
      part, request and conclusively rely upon an Officers' Certificate which,
      upon receipt of such request, shall be promptly delivered by the
      Guarantor.

            (d) The Common Guarantee Trustee shall have no duty to see to any
      recording, filing or registration of any instrument (or any rerecording,
      refiling or registration thereof).

            (e) The Common Guarantee Trustee may consult with counsel, and the
      written advice or opinion of such counsel with respect to legal matters
      shall be full and complete authorization and protection in respect of any
      action taken, suffered or omitted by it hereunder in good faith and in
      accordance with such advice or opinion. Such counsel may be counsel to the
      Guarantor or any of its Affiliates and may include any of its employees.
      The Common Guarantee Trustee shall have the right at any time to seek
      instructions concerning the administration of this Common Securities
      Guarantee from any court of competent jurisdiction.

            (f) The Common Guarantee Trustee shall be under no obligation to
      exercise any of the rights or powers vested in it by this Common
      Securities Guarantee at the request or direction of any Holder, unless
      such Holder shall have provided to the Common Guarantee Trustee such
      security and indemnity, reasonably satisfactory to the Common Guarantee
      Trustee, against the costs, expenses (including attorneys' fees and
      expenses and the expenses of the Common Guarantee Trustee's agents,
      nominees or custodians) and liabilities that might be incurred by it in
      complying with such request or direction, including such reasonable
      advances as may be requested by the Common Guarantee Trustee; provided
      that, nothing contained in this Section 3.2(f) shall be taken to relieve
      the Common Guarantee Trustee, upon the occurrence of an Event of Default,
      of

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      its obligation to exercise the rights and powers vested in it by this
      Common Securities Guarantee.

            (g) The Common Guarantee Trustee shall not be bound to make any
      investigation into the facts or matters stated in any resolution,
      certificate, statement, instrument, opinion, report, notice, request,
      direction, consent, order, bond, debenture, note, other evidence of
      indebtedness or other paper or document, but the Common Guarantee Trustee,
      in its discretion, may make such further inquiry or investigation into
      such facts or matters as it may see fit, but shall incur no liability of
      any kind by reason of such inquiry or investigation.

            (h) The Common Guarantee Trustee may execute any of the trusts or
      powers hereunder or perform any duties hereunder either directly or by or
      through agents, nominees, custodians or attorneys, and the Common
      Guarantee Trustee shall not be responsible for any misconduct or
      negligence on the part of any agent or attorney appointed with due care by
      it hereunder.

            (i) Any action taken by the Common Guarantee Trustee or its agents
      hereunder shall bind the Holders of the Common Securities , and the
      signature of the Common Guarantee Trustee or its agents alone shall be
      sufficient and effective to perform any such action. No third party shall
      be required to inquire as to the authority of the Common Guarantee Trustee
      to so act or as to its compliance with any of the terms and provisions of
      this Common Securities Guarantee, both of which shall be conclusively
      evidenced by the Common Guarantee Trustee's or its agent's taking such
      action.

            (j) Whenever in the administration of this Common Securities
      Guarantee the Common Guarantee Trustee shall deem it desirable to receive
      instructions with respect to enforcing any remedy or right or taking any
      other action hereunder, the Common Guarantee Trustee (i) may request
      instructions from the Holders of a Majority in liquidation amount of the
      Common Securities , (ii) may refrain from enforcing such remedy or right
      or taking such other action until such instructions are received, and
      (iii) shall be protected in conclusively relying on or acting in
      accordance with such instructions.

            (k) No provision of this Common Securities Guarantee shall be deemed
      to impose any duty or obligation on the Common Guarantee Trustee to
      perform any act or acts or exercise any right, power, duty or obligation
      conferred or imposed on it in any jurisdiction in which it shall be
      illegal, or in which the Common Guarantee Trustee shall be unqualified or
      incompetent in accordance with applicable law, to perform any such act or
      acts or to exercise any such right, power, duty or obligation. No
      permissive power or authority available to the Common Guarantee Trustee
      shall be construed to be a duty.

      Section 3.3. Not Responsible for Recitals or Issuance of Guarantee. The
recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Common Guarantee Trustee does not assume any responsibility
for their correctness. The Common Guarantee Trustee makes no representation as
to the validity or sufficiency of this Common Securities Guarantee.

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                                  ARTICLE IV.

                            COMMON GUARANTEE TRUSTEE

      Section 4.1. Common Guarantee Trustee; Eligibility.

            (a) There shall at all times be a Common Guarantee Trustee which
      shall:

                  (i) not be an Affiliate of the Guarantor; and

                  (ii) be a corporation organized and doing business under the
            laws of the United States of America or any State or Territory
            thereof or of the District of Columbia, or a corporation or Person
            permitted by the Securities and Exchange Commission to act as an
            institutional trustee under the Trust Indenture Act, authorized
            under such laws to exercise corporate trust powers, having a
            combined capital and surplus of at least 50 million U.S. dollars
            ($50,000,000), and subject to supervision or examination by Federal,
            State, Territorial or District of Columbia authority. If such
            corporation publishes reports of condition at least annually,
            pursuant to law or to the requirements of the supervising or
            examining authority referred to above, then, for the purposes of
            this Section 4.1(a)(ii), the combined capital and surplus of such
            corporation shall be deemed to be its combined capital and surplus
            as set forth in its most recent report of condition so published.

            (b) If at any time the Common Guarantee Trustee shall cease to be
      eligible to so act under Section 4.1(a), the Common Guarantee Trustee
      shall immediately resign in the manner and with the effect set out in
      Section 4.2 (c).

            (c) If the Common Guarantee Trustee has or shall acquire any
      "conflicting interest" within the meaning of Section 310(b) of the Trust
      Indenture Act, the Common Guarantee Trustee and Guarantor shall in all
      respects comply with the provisions of Section 310(b) of the Trust
      Indenture Act.

      Section 4.2. Appointment, Removal and Resignation of Common Guarantee
Trustees.

            (a) Subject to Section 4.2(b), the Common Guarantee Trustee may be
      appointed or removed without cause at any time by the Guarantor.

            (b) The Common Guarantee Trustee shall not be removed in accordance
      with Section 4.2(a) until a Successor Common Guarantee Trustee has been
      appointed and has accepted such appointment by written instrument executed
      by such Successor Common Guarantee Trustee and delivered to the Guarantor.

            (c) The Common Guarantee Trustee appointed to office shall hold
      office until a Successor Common Guarantee Trustee shall have been
      appointed or until its removal or resignation. The Common Guarantee
      Trustee may resign from office (without need for prior or subsequent
      accounting) by an instrument in writing executed by the Common Guarantee
      Trustee and delivered to the Guarantor, which resignation shall not take
      effect until a Successor Common Guarantee Trustee has been appointed and
      has accepted such

                                       10
<PAGE>

      appointment by instrument in writing executed by such Successor Common
      Guarantee Trustee and delivered to the Guarantor and the resigning Common
      Guarantee Trustee.

            (d) If no Successor Common Guarantee Trustee shall have been
      appointed and accepted appointment as provided in this Section 4.2 within
      60 days after delivery to the Guarantor of an instrument of resignation or
      removal, the Common Guarantee Trustee resigning or being removed may
      petition any court of competent jurisdiction for appointment of a
      Successor Common Guarantee Trustee. Such court may thereupon, after
      prescribing such notice, if any, as it may deem proper, appoint a
      Successor Common Guarantee Trustee.

            (e) No Common Guarantee Trustee shall be liable for the acts or
      omissions to act of any Successor Common Guarantee Trustee.

            (f) Upon termination of this Common Securities Guarantee or removal
      or resignation of the Common Guarantee Trustee pursuant to this Section
      4.2, the Guarantor shall pay to the Common Guarantee Trustee all amounts
      accrued to the date of such termination, removal or resignation.

                                   ARTICLE V.

                                    GUARANTEE

      Section 5.1. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.

      Section 5.2. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Common Securities Guarantee and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.

      Section 5.3. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Common Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:

            (a) the release or waiver, by operation of law or otherwise, of the
      performance or observance by the Issuer of any express or implied
      agreement, covenant, term or condition relating to the Common Securities
      to be performed or observed by the Issuer;

            (b) the extension of time for the payment by the Issuer of all or
      any portion of the Distributions, Redemption Price, Liquidation
      Distribution or any other sums payable under the terms of the Common
      Securities or the extension of time for the performance of any other
      obligation under, arising out of, or in connection with, the Common

                                       11
<PAGE>

      Securities (other than an extension of time for payment of Distributions,
      Redemption Price, Liquidation Distribution or other sum payable that
      results from the extension of any interest payment period on the
      Debentures or any extension of the maturity date of the Debentures
      permitted by the Indenture);

            (c) any failure, omission, delay or lack of diligence on the part of
      the Holders to enforce, assert or exercise any right, privilege, power or
      remedy conferred on the Holders pursuant to the terms of the Common
      Securities , or any action on the part of the Issuer granting indulgence
      or extension of any kind;

            (d) the voluntary or involuntary liquidation, dissolution, sale of
      any collateral, receivership, insolvency, bankruptcy, assignment for the
      benefit of creditors, reorganization, arrangement, composition or
      readjustment of debt of, or other similar proceedings affecting, the
      Issuer or any of the assets of the Issuer;

            (e) any invalidity of, or defect or deficiency in, the Common
      Securities ;

            (f) the settlement or compromise of any obligation guaranteed hereby
      or hereby incurred; or

            (g) any other circumstance whatsoever that might otherwise
      constitute a legal or equitable discharge or defense of a guarantor, it
      being the intent of this Section 5.3 that the obligations of the Guarantor
      hereunder shall be absolute and unconditional under any and all
      circumstances.

      There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.

      Section 5.4. Rights of Holders.

            (a) The Holders of a Majority in liquidation amount of the Common
      Securities have the right to direct the time, method and place of
      conducting of any proceeding for any remedy available to the Common
      Guarantee Trustee in respect of this Common Securities Guarantee or
      exercising any trust or power conferred upon the Common Guarantee Trustee
      under this Common Securities Guarantee.

            (b) If the Common Guarantee Trustee fails to enforce this Common
      Securities Guarantee with respect to the right of any Holders to receive
      any Guarantee Payment in accordance herewith, such Holders may directly
      institute a proceeding against the Guarantor for enforcement of the Common
      Security Guarantee for such payment. The Guarantor waives any right or
      remedy to require that any action be brought first against the Issuer or
      any other Person or entity before proceeding directly against the
      Guarantor.

      Section 5.5. Guarantee of Payment. This Common Securities Guarantee
creates a guarantee of payment and not of collection.

      Section 5.6. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders of Common Securities against the Issuer in respect of
any amounts paid to such

                                       12
<PAGE>

Holders by the Guarantor under this Common Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Common Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Common Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.

      Section 5.7. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Common Securities , and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Common Securities Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 5.3
hereof.

      Section 5.8. Taxes. All payments in respect of the Guarantee Payments
(including interest accrued thereon, if any) by the Guarantor shall be made
without withholding or deduction for or on account of any Relevant Tax, unless
the withholding or deduction of such Relevant Tax is required by law. In that
event, the Guarantor shall pay, as further Guarantee Payments, such additional
amounts as may be necessary in order that the net amounts received by a Holder
(or a third party on its behalf) after such withholding or deduction will equal
the amount which would have been received in respect of the Guarantee Payments
(including interest accrued thereon, if any) in the absence of such withholding
or deduction ("Guarantee Additional Amounts"), except that no such Guarantee
Additional Amounts shall be payable to a Holder (or a third party on its behalf)
with respect to any Guarantee Payments (including interest accrued thereon, if
any) (i) to the extent that such Relevant Tax is imposed or levied by virtue of
such Holder (or the beneficial owner of Common Securities to which such
Guarantee Payments relate) having some connection with the Relevant
Jurisdiction, other than being a Holder (or beneficial owner) of Common
Securities ) or (ii) to the extent that such Relevant Tax is imposed or levied
by virtue of such Holder (or beneficial owner) not having made a declaration of
non-residence in, or other lack of connection with, the Relevant Jurisdiction of
any similar claim for exemption, if the Guarantor or its agent has provided the
beneficial owner of such Common Securities or its nominee with at least 60 days'
prior written notice of any opportunity to make such a declaration or claim.

                                  ARTICLE VI.

                   LIMITATION OF TRANSACTIONS; SUBORDINATION

      Section 6.1. Limitation of Transactions. So long as any Common Securities
remain outstanding, if there shall have occurred and be continuing an Event of
Default or an event of default under the Trust Agreement, then (a) the Guarantor
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than (i) purchases or acquisitions of shares of
its common stock in connection with the satisfaction by the Guarantor of its
obligations under any employee benefit plans or the satisfaction by the
Guarantor of its obligations pursuant

                                       13
<PAGE>

to any contract or security requiring the Guarantor to purchase shares of its
common stock, (ii) as a result of a reclassification of its capital stock or the
exchange or conversion of one class or series of its capital stock for another
class or series of its capital stock, (iii) the purchase of fractional interests
in shares of its capital stock pursuant to an acquisition, the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, and (iv) redemptions or purchases pursuant to the Guarantor's Rights
Agreement, dated as of May 11, 1999, as amended, between the Guarantor and Wells
Fargo Bank Minnesota, N.A. as successor in interest to ChaseMellon Shareholder
Services, LLC), (b) the Guarantor shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Guarantor which rank pari passu
with or junior to the Debentures and (c) the Guarantor shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Preferred Securities Guarantee, dated July 26, 2005 of the Guarantor with
respect to the 6.750% Trust Originated Preferred Securities), this Agreement,
the Capital Securities Guarantee Agreement, dated as of June 6, 1997, the Common
Securities Guarantee Agreement, dated as of December 20, 1996 with respect to
the 8.197% Common Securities, and the Company's Rights Agreement, as amended,
dated as of May 11, 1999, between the Company and ChaseMellon Shareholder
Services, LLC (which has been succeeded by Wells Fargo Bank Minnesota, N.A.).

      Section 6.2. Subordinated Ranking. This Common Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all Senior Indebtedness (as such
term is defined in the Indenture), the Preferred Securities Guarantee and the
Capital Securities Guarantee, dated as of June 6, 1997 (ii) pari passu with the
Common Securities Guarantee dated as of December 20, 1996, and any other
liabilities or obligations that may be pari passu by their terms and (iii)
senior to the Guarantor's common stock, the most senior preferred or preference
stock now or hereafter issued by the Guarantor.

      Section 6.3. Event of Default. If an Event of Default has occurred and is
continuing under the Trust Agreement, the rights of the Holders of the Common
Securities to receive Guarantee Payments under this Common Securities Guarantee
shall be subordinated to the rights of the holders of the Preferred Securities
to receive payment of all amounts due and owing under the terms of the Preferred
Securities Guarantee.

                                  ARTICLE VII.

                                   TERMINATION

      Section 7.1. Termination. This Common Securities Guarantee shall terminate
upon (i) full payment of the Redemption Price of all Common Securities, (ii)
upon the distribution of the Debentures to the Holders of all of the Common
Securities or (iii) upon full payment of the amounts payable in accordance with
the Trust Agreement upon liquidation of the Issuer. Notwithstanding the
foregoing, this Common Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of Common
Securities must restore payment of any sums paid under the Common Securities or
under this Common Securities Guarantee.

                                       14
<PAGE>

                                 ARTICLE VIII.

                                INDEMNIFICATION

      Section 8.1. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Common Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Common Securities Guarantee or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.

            (b) An Indemnified Person shall be fully protected in relying in
      good faith upon the records of the Guarantor and upon such information,
      opinions, reports or statements presented to the Guarantor by any Person
      as to matters the Indemnified Person reasonably believes are within such
      other Person's professional or expert competence and who has been selected
      with reasonable care by or on behalf of the Guarantor, including
      information, opinions, reports or statements as to the value and amount of
      the assets, liabilities, profits, losses, or any other facts pertinent to
      the existence and amount of assets from which Distributions to Holders of
      Common Securities might properly be paid.

      Section 8.2. Indemnification.

            (a) To the fullest extent permitted by applicable law, the Guarantor
      shall indemnify and hold harmless each Indemnified Person from and against
      any loss, damage or claim incurred by such Indemnified Person by reason of
      any act or omission performed or omitted by such Indemnified Person in
      good faith in accordance with this Guarantee Agreement and in a manner
      such Indemnified Person reasonably believed to be within the scope of
      authority conferred on such Indemnified Person by this Guarantee
      Agreement, except that no Indemnified Person shall be entitled to be
      indemnified in respect of any loss, damage or claim incurred by such
      Indemnified Person by reason of negligence or willful misconduct with
      respect to such acts or omissions.

            (b) To the fullest extent permitted by applicable law, reasonable
      expenses (including legal fees) incurred by an Indemnified Person in
      defending any claim, demand, action, suit or proceeding shall, from time
      to time, be advanced by the Guarantor prior to the final disposition of
      such claim, demand, action, suit or proceeding upon receipt by the
      Guarantor of an undertaking by or on behalf of the Indemnified Person to
      repay such amount if it shall be determined that the Indemnified Person is
      not entitled to be indemnified as authorized in Section 8.2(a).

            (c) The obligation to indemnify as set forth in this Section 8.2
      shall survive the termination of the Common Securities Guarantee.

                                       15
<PAGE>

                                  ARTICLE IX.

                                 MISCELLANEOUS

      Section 9.1. Successors and Assigns. All guarantees and agreements
contained in this Common Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Common Securities then outstanding.

      Section 9.2. Amendments. Except with respect to any changes that do not
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Common Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Common Securities .
The provisions of Section 12.2 of the Trust Agreement with respect to meetings
of Holders of the Securities apply to the giving of such approval.

      Section 9.3. Notices. All notices provided for in this Common Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:

            (a) if given to the Common Guarantee Trustee, at the Common
      Guarantee Trustee's mailing address set forth below (or such other address
      as the Common Guarantee Trustee may give notice of to the Holders of the
      Common Securities):

                  The Bank of New York
                  101 Barclay Street, 8W
                  New York, New York 10286
                  Facsimile: (212) 815-5704
                  Attention: Geovanni Barris

            (b) If given to the Guarantor, at the Guarantor's mailing address
      set forth below (or such other address as the Guarantor may give notice of
      to the Holders of the Common Securities):

                  W. R. Berkley Corporation
                  475 Steamboat Road
                  Greenwich, Connecticut 06830
                  Facsimile No.: (203) 769-4098
                  Attention: Ira S. Lederman

            (c) If given to any Holder of Common Securities, at the address set
      forth on the books and records of the Issuer.

      All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which

                                       16
<PAGE>

no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.

      Section 9.4. Benefit. This Common Securities Guarantee is solely for the
benefit of the Holders of the Common Securities and, subject to Section 3.1(a),
is not separately transferable from the Common Securities.

      Section 9.5. Governing Law. THIS COMMON SECURITIES GUARANTEE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

                                       17
<PAGE>

      THIS COMMON SECURITIES GUARANTEE is executed as of the day and year first
above written.

                                      W. R. BERKLEY CORPORATION, as Guarantor

                                      By: ______________________________________
                                          Name:
                                          Title:

                                      THE BANK OF NEW YORK, as Common Guarantee
                                      Trustee

                                      By: ______________________________________
                                          Name:
                                          Title:

                                       18<PAGE>

                                                                    EXHIBIT 10.1

                       NASTECH PHARMACEUTICAL COMPANY INC.
                            2004 STOCK INCENTIVE PLAN

                        RESTRICTED STOCK GRANT AGREEMENT

            This Restricted Stock Grant Agreement (the "Agreement") is entered
into this 20th day of July 2005, by and between Nastech Pharmaceutical Company
Inc. (the "Company"), a Delaware Corporation, and Dr. Steven C. Quay, M.D.,
Ph.D. ("Grantee").

                                    ARTICLE I
                            GRANT OF RESTRICTED STOCK

            1.1 Grant of Restricted Stock. Pursuant to, and subject to, the
terms and conditions set forth herein and in the Nastech Pharmaceutical Company
Inc. 2004 Stock Incentive Plan (the "Plan"), the Company hereby grants to the
Grantee 168,000 restricted shares (the "Restricted Stock") of common stock of
the Company ("Common Stock").

            1.2 Grant Date. The Grant Date of the Restricted Stock is July 20,
2005.

            1.3 Incorporation of Plan. All terms, conditions and restrictions of
the Plan are incorporated herein and made part hereof as if stated herein. If
there is any conflict between the terms and conditions of the Plan and this
Agreement, the terms and conditions of the Plan, as interpreted by the
Compensation Committee of the Board of Directors of the Company (the
"Committee"), shall govern. Except as otherwise provided herein, all capitalized
terms used herein shall have the meaning given to such terms in the Plan.

                                   ARTICLE II
                                     VESTING

            2.1 Vesting. Subject to the further provision of this Agreement, the
Restricted Stock shall vest with respect to a number of whole shares as close as
possible to the following percentage of the total number of shares of Restricted
Stock granted hereunder on the following dates (each, a "Vesting Date"):

<PAGE>

<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL SHARES                                VESTING DATE
--------------------------                                ------------
<S>                                              <C>
            25%                                  1st anniversary of Grant Date
            25%                                  2nd anniversary of Grant Date
            25%                                  3rd anniversary of Grant Date
            25%                                  4th anniversary of Grant Date
</TABLE>

                                   ARTICLE III
                            TERMINATION OF EMPLOYMENT

            3.1 Termination of Employment. In the event that the Grantee's
employment (which for purposes of this Agreement shall include service as a
director or consultant) with the Company and all of the Company's subsidiaries
terminates for any reason, all unvested shares of Restricted Stock, together
with any property in respect of such shares held by the custodian pursuant to
Section 4.3 hereof, shall be forfeited as of the date of such termination of
employment and the Grantee promptly shall return to the Company any certificates
evidencing such shares. For purposes of this Agreement, the Grantee shall be
deemed to have terminated employment or incurred a termination of employment
upon (i) the date the Grantee ceases to be employed by, or to provide consulting
services for, the Company and all Company subsidiaries; or (ii) the date the
Grantee ceases to be a Board member, provided, however, that if the Grantee (x)
at the time of reference is both an employee or consultant and a Board member,
or (y) ceases to be engaged as an employee, consultant or Board member and
immediately is engaged in another of such relationships with the Company or any
Company subsidiary, the Grantee shall not be deemed to have a "termination of
employment" until the last of the dates determined pursuant to subparagraphs (i)
and (ii) above. The Committee, in its discretion, may determine whether any
leave of absence constitutes a termination of employment for purposes of this
Agreement.

                                   ARTICLE IV
                                  RESTRICTIONS

            4.1 Restrictions on Transferability. Until a share of Restricted
Stock vests, such share may not be sold, assigned, transferred, alienated,
commuted, anticipated, or otherwise disposed of (except by will or the laws of
descent and distribution), or pledged or hypothecated as collateral for a loan
or as security for the performance of any obligation, or be otherwise
encumbered, and is not subject to attachment, garnishment, execution or other
legal or equitable process, and any attempt to do so shall be null and void. If
the Grantee attempts to dispose of or encumber the Grantee's unvested shares of
Restricted Stock, such shares of Restricted Stock, together with any property in
respect of such shares held by the custodian pursuant to Section 4.3 hereof,
shall be forfeited as of the date of such attempted transfer and the Grantee
promptly shall return to the Company any certificates evidencing such shares.

            4.2 Issuance of Certificates.

            (a) Reasonably promptly after the Grant Date, the Company shall
issue and deliver to the Grantee stock certificates, registered in the name of
the Grantee,

                                       2

<PAGE>

evidencing the shares of Restricted Stock. Each such certificate may bear the
following legend:

      "THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, HYPOTHECATION ENCUMBRANCE OR
      OTHER DISPOSAL OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
      SUBJECT TO THE TERMS OF THE NASTECH PHARMACEUTICAL COMPANY INC. 2004 STOCK
      INCENTIVE PLAN AND A RESTRICTED STOCK GRANT AGREEMENT BETWEEN NASTECH
      PHARMACEUTICAL COMPANY INC. AND THE HOLDER OF RECORD OF THE SECURITIES
      REPRESENTED BY THIS CERTIFICATE. NO TRANSFER OF THE SECURITIES REPRESENTED
      BY THIS CERTIFICATE IN CONTRAVENTION OF SUCH PLAN AND RESTRICTED STOCK
      GRANT AGREEMENT SHALL BE VALID OR EFFECTIVE. COPIES OF SUCH AGREEMENT MAY
      BE OBTAINED BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THE
      CERTIFICATE TO THE SECRETARY OF NASTECH PHARMACEUTICAL COMPANY INC."

Such legend shall not be removed from such certificates until such shares of
Restricted Stock vest.

            (b) Reasonably promptly after any such shares of Restricted Stock
vest pursuant to Section 2.1 hereof, in exchange for the surrender to the
Company of the certificates evidencing such shares of Restricted Stock delivered
to the Grantee under Section 4.2(a) hereof, the Company shall issue and deliver
to the Grantee (or the Grantee's legal representative, beneficiary or heir)
certificates evidencing such shares of Restricted Stock, free of the legend
provided in Section 4.2(a) hereof, together with any property in respect of such
shares held by the custodian pursuant to Section 4.3 hereof.

            (c) The Company may require as a condition of the delivery of stock
certificates pursuant to Section 4.2(b) hereof that the Grantee remit to the
Company an amount sufficient in the opinion of the Company to satisfy any
federal, state and other governmental tax withholding requirements related to
the vesting of the shares represented by such certificate.

            (d) The Grantee shall not be deemed for any purpose to be, or have
rights as, a shareholder of the Company by virtue of the grant of Restricted
Stock, except to the extent a stock certificate is issued therefor pursuant to
Section 4.2(a) hereof, and then only from the date such certificate is issued.
Upon the issuance of a stock certificate, the Grantee shall have the rights of a
shareholder with respect to the Restricted Stock, including the right to vote
the shares, subject to the restrictions on transferability, the forfeiture
provisions and the requirement that dividends be held in escrow until the shares
vest, as set forth in this Agreement.

            4.3 Dividends, etc. Unless the Committee otherwise determines, any
property, including cash dividends, received by a Grantee with respect to a
share of

                                       3

<PAGE>

Restricted Stock as a result of any dividend, recapitalization, merger,
consolidation, combination, exchange of shares or otherwise and for which the
Grant Date occurs prior to such event but which has not vested as of the date of
such event, will not vest until such share of Restricted Stock vests, and shall
be promptly deposited with the Company or a custodian designated by the Company.
The Company shall or shall cause such custodian to issue to the Grantee a
receipt evidencing the property held by it in respect of the Restricted Stock.

                                    ARTICLE V
                                  MISCELLANEOUS

            5.1 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any party hereto upon any breach or default of any
party under this Agreement, shall impair any such right, power or remedy of such
party, nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, with respect to any similar breach or default
thereafter occurring, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any party of any breach or default under this Agreement, or any
waiver on the part of any party or any provisions or conditions of this
Agreement, must be in a writing signed by such party and shall be effective only
to the extent specifically set forth in such writing.

            5.2 Right of Discharge Preserved. Nothing in this Agreement shall
confer upon the Grantee the right to continue in the employ or other service of
the Company or one of the Company's subsidiaries, or affect any right which the
Company may have to terminate such employment or service.

            5.3 Integration. This Agreement and the Grantee's employment
agreement dated as of June 3, 2005 (the "Employment Agreement") contain the
entire understanding of the parties with respect to the subject matter of this
Agreement. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein. This Agreement is subject to the
Employment Agreement. Other than the Employment Agreement, this Agreement,
including, without limitation, the Plan, supersedes all prior agreements and
understandings between the parties with respect to its subject matter.

            5.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

            5.5 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, without
regard to the provisions governing conflict of laws.

                                       4

<PAGE>

            5.6 Grantee Acknowledgment. The Grantee hereby acknowledges receipt
of a copy of the Plan. The Grantee hereby acknowledges that all decisions,
determinations and interpretations of the Committee in respect of the Plan, this
Agreement and the Restricted Stock shall be final and conclusive.

            IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its duly authorized officer, and the Grantee has hereunto signed
this Agreement on his own behalf, thereby representing that he has carefully
read and understands this Agreement and the Plan as of the day and year first
written above.

                                          NASTECH PHARMACEUTICAL COMPANY INC.

                                          By: /s/ Gregory L. Weaver
                                              ---------------------------
                                              Name:  Gregory L. Weaver
                                              Title: CFO

                                          GRANTEE

                                          /s/ Steven C. Quay
                                          -------------------------------
                                          Dr. Steven C. Quay
                                          President and Chief Executive Officer

                                       5

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