**Exhibit4.6**

 

**EXECUTION COPY**

 

 

**REGISTRATIONRIGHTS AGREEMENT**

 

 

by and among

 

 

**DuaneReade Acquisition Corp.**

 

 

and

 

 

**Banc ofAmerica Securities LLCCitigroup Global Markets Inc.**

**CreditSuisse First Boston LLC**

**UBSSecurities LLC**

 

 

 

Dated as of July30, 2004

 

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**REGISTRATIONRIGHTS AGREEMENT**

 

This Registration RightsAgreement (this “Agreement”) is made and entered into as of July 30, 2004, byand among Duane Reade Acquisition Corp., a Delaware corporation (which will bemerged with and into Duane Reade Inc., a Delaware corporation (“Duane Reade”),upon consummation of the Acquisition (as defined herein) with Duane Reade asthe survivor) (the “Company”), and Banc of America Securities LLC, CitigroupGlobal Markets Inc., Credit Suisse First Boston LLC, and UBS Securities LLC(collectively, the “Initial Purchasers”), each of whom has agreed to purchasethe Company’s 9.75% Senior Subordinated Notes due 2011 (the “InitialSecurities”).

 

This Agreement ismade pursuant to the (i) Purchase Agreement, dated July 23, 2004, by andamong the Initial Purchasers and the Company, and the (ii) PurchaseAgreement, dated July 23, 2004, by and between Banc of America Securities LLCand the Company ((i)and (ii) together, the “Purchase Agreement”) (a) for the benefit of the InitialPurchasers and (b) for the benefit of the holders from time to time of theInitial Securities, including the Initial Purchasers. In order to induce theInitial Purchasers to purchase the Initial Securities, the Company has agreedto provide the registration rights set forth in this Agreement. The executionand delivery of this Agreement is a condition to the obligations of the InitialPurchasers set forth in Section 5(h) of the Purchase Agreement.

 

The InitialSecurities are being issued as part of the financing to effect the Acquisition.

 

Upon consummationof the Acquisition (the “Acquisition Closing Date”), the Company shall cause(1) each of Duane Reade and Duane Reade GP, a **New York general partnership**(“Duane Reade GP”) to execute supplemental indentures to the Indenture,pursuant to which each of them will become a co-obligor of all the obligationsof the Company under the Initial Securities and the Indenture, (2) each of thedirect and indirect domestic subsidiaries of Duane Reade (other than Duane ReadeGP) (collectively, the “Guarantors”) to execute supplemental indentures to theIndenture, pursuant to which each of the Guarantors will fully andunconditionally guarantee (collectively, the “Guarantees”) all the obligationsof the Company and Duane Reade GP under the Initial Securities and theIndenture, and (3) each of Duane Reade, Duane Reade GP and the Guarantors tobecome parties hereto and to the Purchase Agreement pursuant to joinderagreements substantially in the form attached to the Purchase Agreement asExhibit C (the “Joinder Agreements”).

 

The parties herebyagree as follows:

 

Section 1.  *Definitions. *As used in this Agreement, the following capitalizedterms shall have the following meanings:

 

*Acquisition:* The acquisition of Duane Reade by an investorgroup led by Oak Hill Capital Partners, L.P. through the merger of the Companyinto Duane Reade**.**

 

*AcquisitionClosing Date: *As defined in the recitals hereto.

 

*Broker-Dealer: *Any broker or dealer registered under the ExchangeAct.

 

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*BusinessDay:*  Any day other than a Saturday, Sunday or U.S.federal holiday or a day on which banking institutions or trust companieslocated in New York, New York are authorized or obligated to be closed.

 

*Commission: *The Securities and Exchange Commission.

 

*Company: *As defined in the preamble hereto.

 

*Consummate: *A registered Exchange Offer shall be deemed“Consummated” for purposes of this Agreement upon the occurrence of (i) thefiling and effectiveness under the Securities Act of the Exchange Offer RegistrationStatement relating to the Exchange Securities to be issued in the ExchangeOffer, (ii) the maintenance of such Registration Statement continuouslyeffective and the keeping of the Exchange Offer open for a period not less thanthe minimum period required pursuant to Section 3(b) hereof, and (iii) thedelivery by the Company to the Registrar under the Indenture of ExchangeSecurities in the same aggregate principal amount as the aggregate principalamount of Initial Securities that were tendered by Holders thereof pursuant tothe Exchange Offer.

 

*DuaneReade: *As defined in the preamble hereto.

 

*DuaneReade GP: *As defined in the recitals hereto.

 

*EffectivenessTarget Date: *As defined in Section 5 hereof.

 

*ExchangeAct: *The Securities Exchange Act of 1934.

 

*ExchangeOffer: *The registration by the Company under the SecuritiesAct of the Exchange Securities pursuant to a Registration Statement pursuant towhich the Company offers the Holders of all outstanding Transfer RestrictedSecurities the opportunity to exchange all such outstanding Transfer RestrictedSecurities held by such Holders for Exchange Securities in an aggregateprincipal amount equal to the aggregate principal amount of the TransferRestricted Securities tendered in such exchange offer by such Holders.

 

*ExchangeOffer Registration Statement: *The Registration Statement relating tothe Exchange Offer, including the related Prospectus.

 

*ExchangeSecurities: *The 9.75% Senior Subordinated Notes due2011, of the same series under the Indenture as the Initial Securities, to beissued to Holders in exchange for Transfer Restricted Securities pursuant tothis Agreement.

 

*Guarantors: *As defined in the recitals hereto.

 

*Holders: *As defined in Section 2(b) hereof.

 

*IndemnifiedHolder: *As defined in Section 8(a) hereof.

 

*Indenture: *The Indenture, dated as of July 30, 2004, by and amongthe Company, U.S. Bank National Association, as trustee (the “Trustee”), and,upon consummation of the 

 

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Acquisition, DuaneReade, Duane Reade GP and the Guarantors, pursuant to which the Securities areto be issued, as such Indenture is amended or supplemented from time to time inaccordance with the terms thereof.

 

*InitialPurchaser: *As defined in the preamble hereto.

 

*InitialPlacement: *The issuance and sale by the Company ofthe Initial Securities to the Initial Purchasers pursuant to the PurchaseAgreement.

 

*InitialSecurities: *As defined in the preamble hereto.

 

*InterestPayment Date: *As defined in the Indenture and theSecurities.

 

*NASD: *NASD Inc.

 

*Participating Broker-Dealer*: Any of the Initial Purchasers and any other Broker-Dealer which makes amarket in the Initial Securities and exchanges Transfer Restricted Securitiesin the Exchange Offer for Exchange Securities.

 

*Person: *An individual, partnership, corporation, trust orunincorporated organization, or a government or agency or political subdivisionthereof.

 

*Prospectus: *The prospectus included in a Registration Statement,as amended or supplemented by any prospectus supplement and by all otheramendments thereto, including post-effective amendments, and all materialincorporated by reference into such Prospectus.

 

*PurchaseAgreement:*  As defined in the recitals hereto.

 

*RegistrationActions:*  As defined in Section 4(c) hereof.

 

*RegistrationDefault: *As defined in Section 5 hereof.

 

*RegistrationStatement: *Any registration statement of the Companyrelating to (a) an offering of Exchange Securities pursuant to an ExchangeOffer or (b) the registration for resale of Transfer Restricted Securitiespursuant to the Shelf Registration Statement, which is filed pursuant to theprovisions of this Agreement, in each case, including the Prospectus includedtherein, all amendments and supplements thereto (including post-effectiveamendments) and all exhibits and material incorporated by reference therein.

 

*Securities: *The Initial Securities and the Exchange Securities.

 

*SecuritiesAct: *The Securities Act of 1933.

 

*ShelfRegistration Statement: *As defined in Section 4(a) hereof.

 

*SuspensionNotice:*  As defined in Section 4(c) hereof.

 

*SuspensionPeriod:*  As defined in Section 4(c) hereof.

 

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*TrustIndenture Act: *The Trust Indenture Act of 1939, asamended.

 

*TransferRestricted Securities: *Each Initial Security, until the earliestto occur of (a) the date on which such Initial Security is exchanged in theExchange Offer for an Exchange Security entitled to be resold to the public bythe Holder thereof without complying with the prospectus delivery requirementsof the Securities Act, (b) the date on which such Initial Security has beeneffectively registered under the Securities Act and disposed of in accordancewith a Shelf Registration Statement and (c) the date on which such InitialSecurity is distributed to the public pursuant to Rule 144 under the SecuritiesAct or by a Broker-Dealer pursuant to the “Plan of Distribution” contemplatedby the Exchange Offer Registration Statement (including delivery of theProspectus contained therein).

 

*UnderwrittenRegistration or Underwritten Offering: *A registration in which securities of theCompany are sold to an underwriter for reoffering to the public.

 

Section 2.  *Securities Subject to thisAgreement.*

 

(a)  *Transfer RestrictedSecurities. *The securitiesentitled to the benefits of this Agreement are the Transfer RestrictedSecurities.

 

(b)  *Holders of TransferRestricted Securities. *APerson is deemed to be a holder of Transfer Restricted Securities (each, a“Holder”) whenever such Person owns Transfer Restricted Securities.

 

Section 3.  *Registered Exchange Offer.*

 

(a)  Unless the Exchange Offer shall not bepermissible under applicable law or Commission policy (after the procedures setforth in Section 6(a) hereof have been complied with), the Company shall (i)cause to be filed with the Commission on or prior to the 120th dayafter the Acquisition Closing Date (or if such 120th day is not a Business Day,the next succeeding Business Day), a Registration Statement under theSecurities Act relating to the Exchange Securities and the Exchange Offer, (ii)use its reasonable best efforts to cause such Registration Statement to becomeeffective on or prior to the 180th day after the Acquisition ClosingDate (or if such 180th day is not a Business Day, the next succeeding BusinessDay), (iii) in connection with the foregoing, (A) file all pre-effectiveamendments to such Registration Statement as may be necessary in order to causesuch Registration Statement to become effective, (B) if applicable, file apost-effective amendment to such Registration Statement pursuant to Rule 430Aunder the Securities Act and (C) use its reasonable best efforts to cause allnecessary filings in connection with the registration and qualification of theExchange Securities to be made under the state securities or blue sky laws of suchjurisdictions as any Holder shall reasonably request in writing by the time theExchange Offer Registration Statement is declared effective by the Commission,it being agreed that no such registration or qualification will be made unlessso requested, to permit Consummation of the Exchange Offer; *provided, however,* that the Company shall not be required to(i) qualify as a foreign corporation or as a dealer in securities in anyjurisdiction where it would not otherwise be required to qualify but for thisSection 3(a), or (ii) take any action which would subject it to general serviceof process or taxation in any such jurisdiction where it is not then sosubject, and (iii) as promptly 

 

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as practicableafter the effectiveness of such Registration Statement, commence the ExchangeOffer. The Exchange Offer shall be on the appropriate form permittingregistration of the Exchange Securities to be offered in exchange for theTransfer Restricted Securities and to permit resales of Initial Securities heldby Broker-Dealers as contemplated by Section 3(c) hereof.

 

(b)  The Company shall use its reasonable bestefforts to cause the Exchange Offer Registration Statement to be effectivecontinuously and shall keep the Exchange Offer open for a period of not less thanthe minimum period required under applicable federal and state securities lawsto Consummate the Exchange Offer; *provided, however*,that in no event shall such period be less than 30 days and not more than 45days (or longer if required by applicable law) after the date notice of theExchange Offer is mailed to the Holders. The Company shall cause the ExchangeOffer to comply in all material respects with all applicable federal and statesecurities laws.  No securities otherthan the Exchange Securities shall be included in the Exchange OfferRegistration Statement. The Company shall use its reasonable best efforts tocause the Exchange Offer to be Consummated on or prior to the 210thday after the Acquisition Closing Date (or if such 210th day is nota Business Day, the next succeeding Business Day).

 

(c)  The Company shall indicate in a “Plan ofDistribution” section contained in the Prospectus forming a part of theExchange Offer Registration Statement that any Broker-Dealer who holds InitialSecurities that are Transfer Restricted Securities and that were acquired forits own account as a result of market-making activities or other tradingactivities (other than Transfer Restricted Securities acquired directly fromthe Company), may exchange such Initial Securities pursuant to the ExchangeOffer; however, such Broker-Dealer may be deemed to be an “underwriter” withinthe meaning of the Securities Act and must, therefore, deliver a prospectusmeeting the requirements of the Securities Act in connection with any resalesof the Exchange Securities received by such Broker-Dealer in the ExchangeOffer, which prospectus delivery requirement may be satisfied by the deliveryby such Broker-Dealer of the Prospectus contained in the Exchange OfferRegistration Statement. Such “Plan of Distribution” section shall also containall other information with respect to such resales by Broker-Dealers that theCommission may require in order to permit such resales pursuant thereto, butsuch “Plan of Distribution” shall not name any such Broker-Dealer or disclosethe amount of Initial Securities held by any such Broker-Dealer except to theextent required by the Commission as a result of a change in policy after thedate of this Agreement.

 

The Company shalluse its reasonable best efforts to keep the Exchange Offer RegistrationStatement continuously effective, supplemented and amended as required by theprovisions of Section 6(c) hereof to the extent necessary to ensure that it isavailable for resales of Initial Securities acquired by Broker-Dealers fortheir own accounts as a result of market-making activities or other tradingactivities, and to ensure that it conforms in all material respects with therequirements of this Agreement, the Securities Act and the policies, rules andregulations of the Commission as announced from time to time, for a periodending on the earlier of (i) 180 days from the date on which the Exchange OfferRegistration Statement is declared effective and (ii) the date on which aBroker-Dealer is no longer required to deliver a prospectus in connection withmarket-making or other trading activities.

 

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The Company shallfurnish as soon as practicable as many copies of the latest version of suchProspectus to Broker-Dealers as are reasonably requested at any time duringsuch 180-day (or shorter as provided in the foregoing sentence) period in orderto facilitate such resales.

 

Section 4.  *Shelf Registration.*

 

(a)  *Shelf Registration. *If (i) the Exchange Offer is notpermitted by applicable law or Commission policy (after the procedures setforth in Section 6(a) hereof have been complied with), (ii) for any reason theExchange Offer is not Consummated within 210 days after the Acquisition ClosingDate (or if such 210th day is not a Business Day, the next succeeding BusinessDay), or (iii) with respect to any Holder of Transfer Restricted Securities (A)such Holder is prohibited by applicable law or Commission policy fromparticipating in the Exchange Offer, or (B) such Holder may not resell theExchange Securities acquired by it in the Exchange Offer to the public withoutdelivering a prospectus and that the Prospectus contained in the Exchange OfferRegistration Statement is not appropriate or available for such resales by suchHolder, or (C) such Holder is a Broker-Dealer and holds Initial Securitiesacquired directly from the Company or one of its affiliates then, upon suchHolder’s or Initial Purchaser’s request, the Company shall

 

(x)  as promptly as practicable cause to be fileda shelf registration statement pursuant to Rule 415 under the Securities Act,which may be an amendment to the Exchange Offer Registration Statement (ineither event, the “Shelf Registration Statement”) on or prior to the earliestto occur of (1) the later of (x) the 45th day after the date on which theCompany determines that it is not required to file the Exchange OfferRegistration Statement and (y) the 120th day after the Acquisition ClosingDate, (2) the 210th day after the Acquisition Closing Date (in the case ofclause (ii) above) and (3) the 45th day after the date on which the Companyreceives notice from a Holder of Transfer Restricted Securities or an InitialPurchaser as contemplated by clause (iii) above (such earliest date being the“Shelf Filing Deadline”), which Shelf Registration Statement shall provide forresales of all Transfer Restricted Securities the Holders of which shall haveprovided the information required pursuant to Section 4(b) hereof; and

 

(y)  use their reasonable best efforts to causesuch Shelf Registration Statement to be declared effective by the Commission onor before the later of (x) the 90th day after the Shelf Filing Deadline (or ifsuch 90th day is not a Business Day, the next succeeding Business Day) and (y)the 180th day after the Acquisition Closing Date.

 

The Company shall use its reasonable best efforts tokeep such Shelf Registration Statement continuously effective, supplemented andamended as required by the provisions of Sections 6(b) and (c) hereof to theextent necessary to ensure that it is available for resales of InitialSecurities by the Holders of Transfer Restricted Securities entitled to thebenefit of this Section 4(a), and to ensure that it conforms in all materialrespects with the requirements of this Agreement, the Securities Act and therules and regulations of the Commission as announced from time to time, for aperiod of two years following the effective date of such Shelf RegistrationStatement (or shorter period that will terminate when all the Initial Securitiescovered by such Shelf Registration Statement have been sold pursuant to suchShelf Registration Statement).

 

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(b)  *Provision by Holders ofCertain Information in Connection with the Shelf Registration Statement. *No Holder of Transfer RestrictedSecurities may include any of its Transfer Restricted Securities in any ShelfRegistration Statement pursuant to this Agreement unless and until such Holderfurnishes to the Company in writing, within 20 Business Days after receipt of arequest therefor, such information as the Company may reasonably request foruse in connection with any Shelf Registration Statement or Prospectus orpreliminary Prospectus included therein. Each Holder as to which any ShelfRegistration Statement is being effected agrees to furnish promptly to theCompany all information required to be disclosed in order to make theinformation previously furnished to the Company by such Holder not materiallymisleading.

 

(c)  *Suspension*.  Notwithstanding anything to the contrary andsubject to the limitation set forth in the next succeeding paragraph, at anytime after the effectiveness of the Shelf Registration Statement, the Companyshall be entitled to suspend its obligation to file any amendment to the ShelfRegistration Statement, furnish any supplement or amendment to a Prospectusincluded in the Shelf Registration Statement, make any other filing with theCommission, cause the Shelf Registration Statement or other filing with theCommission to remain effective or take any similar action (collectively,“Registration Actions”) upon (A) the issuance by the Commission of a stop ordersuspending the effectiveness of the Shelf Registration Statement or theinitiation of proceedings with respect to the Shelf Registration Statementunder Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of anyevent or the existence of any fact as a result of which the Shelf RegistrationStatement would or shall contain any untrue statement of a material fact oromit to state any material fact required to be stated therein or necessary tomake the statements therein not misleading, or the related Prospectus would orshall contain any untrue statement of a material fact or omit to state anymaterial fact required to be stated therein or necessary to make the statementstherein, in the light of the circumstances under which they were made, notmisleading, or (C) the occurrence or existence of any corporate developmentthat, in the discretion of the Company, makes it appropriate to postpone orsuspend the availability of the Shelf Registration Statement and the relatedProspectus.  Upon the occurrence of anyof the conditions described in clause (A), (B) or (C) above, the Company shallgive prompt notice (a “Suspension Notice”) thereof to the Holders.  Upon the termination of such condition, theCompany shall give prompt notice thereof to the Holders and shall promptlyproceed with all Registration Actions that were suspended pursuant to thisparagraph.

 

The Company mayonly suspend Registration Actions pursuant to the preceding paragraph for oneor more periods (each, a “Suspension Period”) not to exceed, in the aggregate,(x) sixty days in any three month period or (y) ninety days in any twelve monthperiod, during which no Liquidated Damages (as defined in Section 5) shall bepayable.  Each Suspension Period shall bedeemed to begin on the date the relevant Suspension Notice is given to theHolders and shall be deemed to end on the earlier to occur of (1) the date onwhich the Company gives the Holders a notice that the Suspension Period hasterminated and (2) the date on which the number of days during which aSuspension Period has been in effect exceeds, in the aggregate, (x) sixty daysin any three month period or (y) ninety days in any twelve month period.

 

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Section 5.  *Liquidated Damages. *Subject to the Company’s ability to declare SuspensionPeriods with respect to clause (iv) below, if (i) any of the RegistrationStatements required by this Agreement is not filed with the Commission on orprior to the date specified for such filing in this Agreement, (ii) any of suchRegistration Statements has not been declared effective by the Commission on orprior to the date specified for such effectiveness in this Agreement (the“Effectiveness Target Date”), (iii) the Exchange Offer has not been Consummatedon or prior to the date specified for such consummation in this Agreement or(iv) any Registration Statement required by this Agreement is filed anddeclared effective but shall thereafter cease to be effective or fail to beusable for its intended purpose for more than 30 days (each such event referredto in clauses (i) through (iv), a “Registration Default”), the Company herebyagrees to pay liquidated damages (“Liquidated Damages”) in the form ofadditional interest in cash to each Holder in an amount equal to 0.25% perannum of the aggregate principal amount of the Transfer Restricted Securitiesfor the period of occurrence of the Registration Default until such time as noRegistration Default is in effect, which rate shall increase by 0.25% per annumfor each subsequent 90-day period during which such Registration Defaultcontinues, but in no event shall such increase exceed 1.00% per annum.Following the cure of all Registration Defaults relating to any particularTransfer Restricted Securities, the Liquidated Damages will cease to accruefrom the date of such cure and the interest rate on the Transfer RestrictedSecurities will revert to the original interest rate borne by such TransferRestricted Securities; *provided, however,*that, if after the date such Liquidated Damages cease to accrue, a differentRegistration Default occurs, Liquidated Damages may again commence accruingpursuant to the foregoing provisions.

 

Notwithstandingthe foregoing, (i) the amount of Liquidated Damages payable shall not increasebecause more than one Registration Default has occurred and is continuing and(ii) a Holder of Transfer Restricted Securities who is not entitled to thebenefits of the Shelf Registration Statement shall not be entitled toLiquidated Damages with respect to a Registration Default that pertains to theShelf Registration Statement.

 

All references inthe Indenture to “interest” include the Liquidated Damages payable pursuant tothis Section 5, and all accrued Liquidated Damages shall be payable to theHolders entitled thereto, in the manner provided for the payment of interest inthe Indenture, as more fully set forth in the Indenture and the Securities. Allobligations of the Company set forth in the preceding paragraph that areoutstanding with respect to any Transfer Restricted Security at the time suchsecurity ceases to be a Transfer Restricted Security shall survive until suchtime as all such obligations with respect to such security shall have been satisfiedin full.

 

Section 6.  *Registration Procedures.*

 

(a)  *Exchange OfferRegistration Statement. *Inconnection with the Exchange Offer, the Company shall comply with all of theprovisions of Section 6(c) hereof, shall use its reasonable best efforts to effectsuch exchange to permit the sale of Transfer Restricted Securities being soldin accordance with the intended method or methods of distribution thereof setforth in the Registration Statement and shall comply with all of the followingprovisions:

 

(i)  If in the reasonable opinion of counsel tothe Company there is a question as to whether the Exchange Offer is permittedby applicable law, the Company hereby 

 

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agrees to seek ano-action letter or other favorable decision from the Commission allowing theCompany to Consummate an Exchange Offer for such Initial Securities.  The Company hereby agrees to pursue theissuance of such a decision to the Commission staff level but shall not berequired to take commercially unreasonable action to effect a change ofCommission policy.  The Company herebyagrees, however, to (A) participate in telephonic conferences with theCommission, (B) deliver to the Commission staff an analysis prepared by counselto the Company setting forth the legal bases, if any, upon which such counselhas concluded that such an Exchange Offer should be permitted and (C)diligently pursue a favorable resolution by the Commission staff of suchsubmission.

 

(ii)  As a condition to its participation in theExchange Offer pursuant to the terms of this Agreement, each Holder of TransferRestricted Securities shall furnish, upon the request of the Company, prior tothe Consummation thereof, a written representation to the Company (which may becontained in the letter of transmittal contemplated by the Exchange OfferRegistration Statement) to the effect that (A) it is not an affiliate of theCompany, (B) it is not engaged in, and does not intend to engage in, and has noarrangement or understanding with any Person to participate in, a distributionof the Exchange Securities to be issued in the Exchange Offer and (C) it isacquiring the Exchange Securities in its ordinary course of business.  In addition, all such Holders of TransferRestricted Securities shall otherwise cooperate in the Company’s preparationsfor the Exchange Offer.  Each Holderhereby acknowledges and agrees that any Broker-Dealer and any such Holder usingthe Exchange Offer to participate in a distribution of the securities to beacquired in the Exchange Offer (1) could not under Commission policy as ineffect on the date of this Agreement rely on the position of the Commissionenunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and ExxonCapital Holdings Corporation (available May 13, 1988), as interpreted in theCommission’s letter to Shearman & Sterling dated July 2, 1993, and similarno-action letters (which may include any no-action letter obtained pursuant toclause (i) above), and (2) must comply with the registration and prospectusdelivery requirements of the Securities Act in connection with a secondaryresale transaction and that such a secondary resale transaction should becovered by an effective registration statement containing the selling securityholder information required by Item 507 or 508, as applicable, of RegulationS-K if the resales are of Exchange Securities obtained by such Holder inexchange for Initial Securities acquired by such Holder directly from theCompany.

 

(b)  *Shelf RegistrationStatement. *In connection withthe Shelf Registration Statement, the Company shall comply with all theprovisions of Section 6(c) hereof and shall use its reasonable best efforts toeffect such registration to permit the sale of the Transfer RestrictedSecurities being sold in accordance with the intended method or methods ofdistribution thereof set forth in such Shelf Registration Statement, andpursuant thereto the Company will as promptly as practicable prepare and filewith the Commission a Registration Statement relating to the registration onany appropriate form under the Securities Act, which form shall be availablefor the sale of the Transfer Restricted Securities in accordance with theintended method or methods of distribution thereof set forth in such ShelfRegistration Statement.

 

(c)  *General Provisions. *Except as otherwise provided, inconnection with any Registration Statement and any Prospectus required by thisAgreement to permit the sale or 

 

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resale of TransferRestricted Securities (including, without limitation, any Registration Statementand the related Prospectus required to permit resales of Initial Securities byBroker-Dealers), the Company shall:

 

(i)  use its reasonable best efforts to keep suchRegistration Statement continuously effective and provide all requisitefinancial statements for the period specified in Section 3 or 4 hereof, asapplicable; upon the occurrence of any event that would cause any suchRegistration Statement or the Prospectus contained therein (A) to contain amaterial misstatement or omission or (B) not to be effective and usable forresale of Transfer Restricted Securities during the period required by thisAgreement, the Company shall file as promptly as practicable an appropriateamendment to such Registration Statement, in the case of clause (A), correctingany such misstatement or omission, and, in the case of either clause (A) or(B), use its reasonable best efforts to cause such amendment to be declaredeffective and such Registration Statement and the related Prospectus to becomeusable for their intended purpose(s) as soon as practicable thereafter;

 

(ii)  prepare and file with the Commission suchamendments and post-effective amendments to the applicable RegistrationStatement as may be necessary to keep the Registration Statement effective forthe applicable period set forth in Section 3 or 4 hereof, as applicable, orsuch shorter period as will terminate when all Transfer Restricted Securitiescovered by such Registration Statement have been sold; cause the Prospectus tobe supplemented by any required Prospectus supplement, and as so supplementedto be filed pursuant to Rule 424 under the Securities Act, and to comply fullywith the applicable provisions of Rules 424 and 430A under the Securities Actin a timely manner; and comply in all material respects with the provisions ofthe Securities Act with respect to the disposition of all securities covered bysuch Registration Statement during the applicable period in accordance with theintended method or methods of distribution by the sellers thereof set forth insuch Registration Statement or supplement to the Prospectus;

 

(iii)  advise the underwriter(s), if any, andselling Holders as promptly as practicable and, if requested by such Persons,to confirm such advice in writing, (A) when the Prospectus or any Prospectussupplement or post-effective amendment has been filed, and, with respect to anyRegistration Statement or any post-effective amendment thereto, when the samehas become effective, (B) of any request by the Commission for amendments tothe Registration Statement or amendments or supplements to the Prospectus orfor additional information relating thereto, (C) of the issuance by theCommission of any stop order suspending the effectiveness of the RegistrationStatement under the Securities Act or of the suspension by any state securitiescommission of the qualification of the Transfer Restricted Securities foroffering or sale in any jurisdiction, or the initiation of any proceeding forany of the preceding purposes, (D) of the existence of any fact or thehappening of any event that makes any statement of a material fact made in theRegistration Statement, the Prospectus, any amendment or supplement thereto, orany document incorporated by reference therein untrue, or that requires themaking of any additions to or changes in the Registration Statement or theProspectus in order to make the statements therein not misleading (*provided, however*, that no advice 

 

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by the Companyshall be required pursuant to this clause (D) in the event that the Companyeither promptly files a Prospectus supplement to update the Prospectus or aForm 8-K or other appropriate Exchange Act report that is incorporated byreference into such Registration Statement, which, in either case, contains therequisite information with respect to such event or facts that results in suchRegistration Statement no longer containing any untrue statement of materialfact or omitting to state a material fact necessary to make the statementscontained therein not misleading).  If atany time the Commission shall issue any stop order suspending the effectivenessof the Registration Statement, or any state securities commission or otherregulatory authority shall issue an order suspending the qualification orexemption from qualification of the Transfer Restricted Securities under statesecurities or blue sky laws, the Company shall use its reasonable best effortsto obtain the withdrawal or lifting of such order at the earliest practicabletime;

 

(iv)  in the case of a Shelf Registration or if aProspectus is required to be delivered by any Participating Broker-Dealer inthe case of an Exchange Offer, furnish without charge to each of the InitialPurchasers, each selling Holder named in any Registration Statement, and eachof the underwriter(s), if any, before filing with the Commission, copies of anyRegistration Statement or any Prospectus included therein or any amendments orsupplements to any such Registration Statement or Prospectus (including alldocuments incorporated by reference after the initial filing of suchRegistration Statement), which documents will be subject to the review andcomment of such Holders and underwriter(s) in connection with such sale, ifany, for a period of at least five Business Days, and the Company will not fileany such Registration Statement or Prospectus or any amendment or supplement toany such Registration Statement or Prospectus (including all such documentsincorporated by reference) to which an Initial Purchaser of Transfer RestrictedSecurities covered by such Registration Statement or the underwriter(s), ifany, shall reasonably object in writing within five Business Days after thereceipt thereof (such objection to be deemed timely made upon confirmation oftelecopy transmission within such period). Notwithstanding the foregoing, the Company shall not be required to takeany actions under this Section 6(c)(iv) that are not, in the reasonableopinion of counsel for the Company, in compliance with applicable law or toinclude any disclosure which at the time would have an adverse effect on thebusiness or operations of the Company and/or its subsidiaries, as determined ingood faith by the Company;

 

(v)  in the case of a Shelf Registration, promptlyprior to the filing of any document that is to be incorporated by referenceinto a Registration Statement or Prospectus, provide copies of such document,to the extent requested, to the Initial Purchasers, each selling Holder namedin any Registration Statement, and to the underwriter(s), if any, make theCompany’s management, officers and other representatives available fordiscussion of such document and other customary due diligence matters, andinclude such information in such document prior to the filing thereof as suchselling Holders or underwriter(s), if any, reasonably may request;

 

(vi)  in the case of a Shelf Registration or if aProspectus is required to be delivered by any Participating Broker-Dealer inthe case of an Exchange Offer, make 

 

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available atreasonable times for inspection by the Initial Purchasers, the managingunderwriter(s), if any, participating in any disposition pursuant to suchRegistration Statement and one firm of legal counsel or accountant retained byany of the foregoing, all financial and other records, pertinent corporatedocuments and properties of the Company reasonably requested by any suchPersons and cause the Company’s officers, directors and employees to supply allinformation reasonably requested by any such Holder, underwriter, attorney oraccountant in connection with such Registration Statement or any post-effectiveamendment thereto subsequent to the filing thereof and prior to itseffectiveness and to be available for discussion of such documents to theextent reasonably requested by any Holder, Initial Purchaser or underwriter;

 

(vii)  if requested by any selling Holders or theunderwriter(s), if any, promptly incorporate in any Registration Statement orProspectus, pursuant to a supplement or post-effective amendment if necessary,such information as such selling Holders and underwriter(s), if any, mayreasonably request to have included therein, including, without limitation,information relating to the “Plan of Distribution” of the Transfer RestrictedSecurities, information with respect to the principal amount of TransferRestricted Securities being sold to such underwriter(s), the purchase pricebeing paid therefor and any other terms of the offering of the TransferRestricted Securities to be sold in such offering; and make all required filingsof such Prospectus supplement or post-effective amendment as soon aspracticable after the Company is notified of the matters to be incorporated insuch Prospectus supplement or post-effective amendment;

 

(viii)  in the case of a Shelf Registration, use itsreasonable best efforts to cause the Transfer Restricted Securities covered bythe Registration Statement to be rated with the appropriate rating agencies, ifso requested by the Holders of a majority in aggregate principal amount ofSecurities covered thereby or the underwriter(s), if any;

 

(ix)  in the case of a Shelf Registration, furnishto each selling Holder and each of the underwriter(s), if any, without charge,at least one copy of the Registration Statement, as first filed with theCommission, and of each amendment thereto, including financial statements andschedules, (without documents incorporated therein by reference or exhibitsthereto, unless requested);

 

(x)  deliver to (i) in the case of an ExchangeOffer, each Participating Broker-Dealer who submits a written request to theCompany and (ii) in the case of a Shelf Registration, each selling Holder andeach of the underwriter(s), if any, without charge, as many copies of theProspectus (including each preliminary prospectus) and any amendment orsupplement thereto as such Persons reasonably may request; subject to the finalparagraph of this Section 6(c), the Company hereby consents to the use of theProspectus and any amendment or supplement thereto by each of the sellingHolders and each of the underwriter(s), if any, in connection with the offeringand the sale of the Transfer Restricted Securities covered by the Prospectus orany amendment or supplement thereto;

 

(xi)  in the case of a Shelf Registration, enterinto such agreements (including an underwriting agreement), and make suchcustomary representations and warranties, and 

 

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take all suchother customary and appropriate actions in connection therewith in order toexpedite or facilitate the disposition of the Transfer Restricted Securitiespursuant to any Shelf Registration Statement contemplated by this Agreement,all to such extent as may be reasonably requested by any Holder of TransferRestricted Securities or underwriter in connection with any sale or resalepursuant to any Shelf Registration Statement contemplated by this Agreement;and whether or not an underwriting agreement is entered into and whether or notthe registration is an Underwritten Registration, the Company shall:

 

(A)  to the extent reasonably requested, furnishto each Initial Purchaser, each selling Holder and each underwriter, if any, insuch substance and scope as they may reasonably request and as are customarilymade by issuers to underwriters in primary underwritten offerings, upon theeffectiveness of the Shelf Registration Statement:

 

(1)  a certificate, dated the date ofeffectiveness of the Shelf Registration Statement, signed by (y) the Presidentor any Vice President and (z) a principal financial or accounting officer ofthe Company, confirming, as of the date thereof, the matters set forth inparagraphs (i), (ii) and (iii) of Section 5(e) of the Purchase Agreement andsuch other matters as such parties may reasonably request;

 

(2)  an opinion, dated the date of effectivenessof the Shelf Registration Statement, of counsel for the Company, covering thematters set forth in Section 5(c) of the Purchase Agreement and such othermatter as such parties may reasonably request; and

 

(3)  a customary comfort letter, dated the date ofeffectiveness of the Shelf Registration Statement, from the Company’sindependent accountants, in the customary form and covering matters of the typecustomarily requested to be covered in comfort letters by underwriters inconnection with primary underwritten offerings, and covering or affirming thematters set forth in the comfort letters delivered pursuant to Section 5(a) ofthe Purchase Agreement, without exception;

 

(B)  set forth in full or incorporate by referencein the underwriting agreement, if any, the indemnification provisions andprocedures of Section 8 hereof with respect to all parties to be indemnifiedpursuant to said Section; and

 

(C)  deliver such other documents and certificatesas may be reasonably requested by such parties and as are customarily deliveredin similar offerings to evidence compliance with Section 6(c)(xi)(A) hereof andwith any customary conditions contained in the underwriting agreement or otheragreement entered into by the Company pursuant to this Section 6(c)(xi), ifany.

 

If at any time therepresentations and warranties of the Company contemplated in Section6(c)(xi)(A)(1) hereof cease to be true and correct, the Company shall so advise

 

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the InitialPurchasers and the underwriter(s), if any, and each selling Holder promptlyand, if requested by such Persons, shall confirm such advice in writing;

 

(xii)  in the case of a Shelf RegistrationStatement, prior to any public offering of Transfer Restricted Securities, useits reasonable best efforts to cooperate with the selling Holders, theunderwriter(s), if any, and their respective counsel in connection with theregistration and qualification of the Transfer Restricted Securities under thestate securities or blue sky laws of such jurisdictions as the selling Holdersor underwriter(s), if any, may reasonably request in writing by the time theShelf Registration Statement is declared effective by the Commission, it beingagreed that no such registration or qualification will be made unless sorequested and use its reasonable best efforts to do any and all other acts orthings necessary or advisable to enable the disposition in such jurisdictionsof the Transfer Restricted Securities covered by the Shelf RegistrationStatement; *provided, however*, that the Companyshall not be required to register or qualify as a foreign corporation where itis not then so qualified or to take any action that would subject it to theservice of process in suits or to taxation in any jurisdiction where it is notthen so subject;

 

(xiii)  shall issue, upon the request of any Holderof Initial Securities covered by the Shelf Registration Statement, ExchangeSecurities having an aggregate principal amount equal to the aggregateprincipal amount of Initial Securities surrendered to the Company by suchHolder in exchange therefor or being sold by such Holder; such ExchangeSecurities to be registered in the name of such Holder or in the name of thepurchaser(s) of such Securities, as the case may be; in return, the InitialSecurities held by such Holder shall be surrendered to the Company forcancellation;

 

(xiv)  in the case of a Shelf Registration,cooperate with the selling Holders and the underwriter(s), if any, tofacilitate the timely preparation and delivery of certificates representingTransfer Restricted Securities to be sold and not bearing any restrictivelegends; and enable such Transfer Restricted Securities to be in suchdenominations and registered in such names as the Holders or theunderwriter(s), if any, may request at least three Business Days prior to anysale of Transfer Restricted Securities made by such Holders or underwriter(s);

 

(xv)  use its reasonable best efforts to cause theTransfer Restricted Securities covered by the Registration Statement to beregistered with or approved by such other governmental agencies or authorities,if any, as may be necessary to enable the seller or sellers thereof or theunderwriter(s), if any, to consummate the disposition of such TransferRestricted Securities, subject to the proviso contained in Section 6(c)(xii)hereof;

 

(xvi)  if any fact or event contemplated by Section6(c)(iii)(D) hereof shall exist or have occurred, use its reasonable bestefforts to prepare a supplement or post-effective amendment to the RegistrationStatement or related Prospectus or any document incorporated therein byreference or file any other required document so that, as thereafter deliveredto the purchasers of Transfer Restricted Securities, the Prospectus will notcontain at the time of such delivery any untrue statement of a material fact or

 

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omit to state amaterial fact necessary to make the statements therein, in light of thecircumstances under which they were made, not misleading, or will remain soqualified and at such time as such public disclosure is otherwise made or theCompany determines that such disclosure is not necessary, in each case tocorrect any misstatement of a material fact or to include any omitted materialfact, the Company agrees promptly to notify each Holder of such determination;

 

(xvii)  provide a CUSIP number for all ExchangeSecurities or Transfer Restricted Securities, as the case may be, not laterthan the effective date of the Registration Statement covering such Securitiesand provide the Trustee under the Indenture with any necessary printedcertificates for such Securities which are in a form eligible for deposit withthe Depository Trust Company;

 

(xviii)  cooperate and assist in any filings requiredto be made with the NASD and in the performance of any due diligenceinvestigation by any underwriter (including any “qualified independentunderwriter”) that is required to be retained in accordance with the rules andregulations of the NASD;

 

(xix)  otherwise use its reasonable best efforts tocomply in all material respects with all applicable rules and regulations ofthe Commission, and make generally available to its securityholders, as soon aspracticable, a consolidated earnings statement meeting the requirements of Rule158 (which need not be audited) for the twelve-month period (A) commencing atthe end of any fiscal quarter in which Transfer Restricted Securities are soldto underwriters in a firm commitment or best efforts Underwritten Offering or(B) if not sold to underwriters in such an offering, beginning with the firstmonth of the Company’s first fiscal quarter commencing after the effective dateof the Registration Statement;

 

(xx)  cause the Indenture to be qualified under theTrust Indenture Act not later than the effective date of the first RegistrationStatement required by this Agreement, and, in connection therewith, cooperatewith the Trustee and the Holders of Securities to effect such changes to theIndenture as may be required for such Indenture to be so qualified inaccordance with the terms of the Trust Indenture Act; and to execute and useits reasonable best efforts to cause the Trustee to execute, all documents thatmay be required to effect such changes and all other forms and documentsrequired to be filed with the Commission to enable such Indenture to be so qualifiedin a timely manner; and

 

(xxi)  cause all Securities covered by theRegistration Statement to be listed on each securities exchange or automatedquotation system on which similar securities issued by the Company are thenlisted if reasonably requested by the Holders of a majority in aggregateprincipal amount of Initial Securities or the managing underwriter(s), if any.

 

Each Holder agreesby acquisition of a Transfer Restricted Security that, upon (i) receipt of anynotice from the Company of the existence of any fact of the kind described inSection 6(c)(iii)(D) hereof, or (ii) a Suspension Period, such Holder willforthwith discontinue disposition of Transfer Restricted Securities pursuant tothe applicable Registration Statement 

 

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until such Holder’sreceipt of the copies of the supplemented or amended Prospectus contemplated bySection 6(c)(xvi) hereof, or until it is advised in writing (the “Advice”) bythe Company that the use of the Prospectus may be resumed, and has receivedcopies of any additional or supplemental filings that are incorporated byreference in the Prospectus.  If sodirected by the Company, each Holder will deliver to the Company (at suchHolder’s expense) all copies, other than permanent file copies then in suchHolder’s possession, of the Prospectus covering such Transfer RestrictedSecurities that was current at the time of receipt of such notice.  In the event the Company shall give any suchnotice, the time period regarding the effectiveness of such RegistrationStatement set forth in Section 3 or 4 hereof, as applicable, shall be extendedby the number of days during the period from and including the date of thegiving of such notice described in (i) or (ii) of this paragraph to andincluding the date when each selling Holder covered by such RegistrationStatement shall have received the copies of the supplemented or amendedProspectus contemplated by Section 6(c)(xvi) hereof or shall have received theAdvice.

 

Section 7.  *Registration Expenses.*

 

(a)  All expenses incident to the Company’sperformance of or compliance with this Agreement will be borne by the Company,regardless of whether a Registration Statement becomes effective, including,without limitation: (i) all registration and filing fees and expenses(including filings made by any Initial Purchaser or Holder with the NASD (and,if applicable, the fees and expenses of any “qualified independent underwriter”and its counsel that may be required by the rules and regulations of theNASD)); (ii) all fees and expenses of compliance with federal securities andstate securities or blue sky laws; (iii) all expenses of printing (includingprinting certificates for the Exchange Securities to be issued in the ExchangeOffer and printing of Prospectuses), messenger and delivery services andtelephone; (iv) all fees and disbursements of counsel for the Company and,subject to Section 7(b) hereof, the Holders of Transfer Restricted Securities;(v) all application and filing fees in connection with listing the ExchangeSecurities on a securities exchange or automated quotation system pursuant tothe requirements thereof; and (vi) all fees and disbursements of independentcertified public accountants of the Company (including the expenses of anyspecial audit and comfort letters required by or incident to such performance).

 

The Company will,in any event, bear its internal expenses (including, without limitation, allsalaries and expenses of its officers and employees performing legal oraccounting duties), the expenses of any annual audit and the fees and expensesof any Person, including special experts, retained by the Company.

 

(b)  In connection with the Shelf RegistrationStatement required by this Agreement, the Company will reimburse the InitialPurchasers and the Holders of Transfer Restricted Securities being registeredpursuant to the Shelf Registration Statement, for the reasonable fees anddisbursements of not more than one counsel, who shall be Fried, Frank, Harris,Shriver & Jacobson LLP or such other counsel as may be chosen by theHolders of a majority in principal amount of the Transfer Restricted Securitiesfor whose benefit such Registration Statement is being prepared.

 

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Each Holder shallpay all underwriting discounts and commissions and transfer taxes, if any, relatingto the sale or disposition of such Holder’s Transfer Restricted Securitiespursuant to a Shelf Registration Statement.

 

Section 8.  *Indemnification.*

 

(a)  The Company agrees to indemnify and holdharmless (i) each Holder and (ii) each Person, if any, who controls (within themeaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)any Holder (any of the Persons referred to in this clause (ii) beinghereinafter referred to as a “controlling person”) and (iii) the respective officers,directors, partners, employees, representatives and agents of any Holder or anycontrolling person (any Person referred to in clause (i), (ii) or (iii) mayhereinafter be referred to as an “Indemnified Holder”), to the fullest extentlawful, from and against any and all losses, claims, damages, liabilities,judgments, actions and expenses (including, without limitation, and asincurred, reimbursement of all reasonable costs of investigating, preparing,pursuing, settling, compromising, paying or defending any claim or action, orany investigation or proceeding by any governmental agency or body, commencedor threatened, including the reasonable fees and expenses of any one firm oflegal counsel to any Indemnified Holder), arising out of or based upon anyuntrue statement or alleged untrue statement of a material fact contained inany Registration Statement or Prospectus (or any amendment or supplementthereto), or any omission or alleged omission to state therein a material factrequired to be stated therein or necessary to make the statements therein notmisleading, except insofar as such losses, claims, damages, liabilities orexpenses arise out of an untrue statement or omission or alleged untruestatement or omission that is made in reliance upon and in conformity withinformation relating to any of the Holders furnished in writing to the Companyby any of the Holders expressly for use therein; and *provided*,*further*, that this indemnity agreementshall not apply to any loss, claim, damage, liability or expense arising froman offer or sale of Transfer Restricted Securities occurring during aSuspension Period, if a notice of such Suspension Period was given to andreceived by such Person.  This indemnityagreement shall be in addition to any liability which the Company may otherwisehave.

 

In case any actionor proceeding (including any governmental or regulatory investigation orproceeding) shall be brought or asserted against any of the Indemnified Holderswith respect to which indemnity may be sought against the Company, suchIndemnified Holder (or the Indemnified Holder controlled by such controllingperson) shall promptly notify the Company in writing; *provided,however,* that the failure to give such notice shall not relieve theCompany of its obligations pursuant to this Agreement to the extent it is notmaterially prejudiced as a proximate result of such failure.  The Company may participate at its ownexpense in the defense of such action. Such Indemnified Holder shall have the right to employ its own counselin any such action and the fees and expenses of such counsel shall be paid, asincurred, by the Company (regardless of whether it is ultimately determinedthat an Indemnified Holder is not entitled to indemnification hereunder).  The Company shall not, in connection with anyone such action or proceeding or separate but substantially similar or relatedactions or proceedings in the same jurisdiction arising out of the same generalallegations or circumstances, be liable for the reasonable fees and expenses ofmore than one separate firm of attorneys at any time for such IndemnifiedHolders, which firm shall be designated by the Holders.  The Company shall be liable for anysettlement of any such action or proceeding effected with the Company’s prior 

 

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written consent,which consent shall not be withheld unreasonably, and the Company agrees toindemnify and hold harmless any Indemnified Holder from and against any loss,claim, damage, liability or expense by reason of any settlement of any actioneffected with the written consent of the Company.  The Company shall not, without the priorwritten consent of each Indemnified Holder, settle or compromise or consent tothe entry of judgment in or otherwise seek to terminate any pending or threatenedaction, claim, litigation or proceeding in respect of which indemnification orcontribution may be sought hereunder (whether or not any Indemnified Holder isa party thereto), unless such settlement, compromise, consent or terminationincludes an unconditional release of each Indemnified Holder from all liabilityarising out of such action, claim, litigation or proceeding.

 

(b)  Each Holder of Transfer Restricted Securitiesagrees, severally and not jointly, to indemnify and hold harmless the Companyand its directors and officers who sign a Registration Statement, and anyPerson controlling (within the meaning of Section 15 of the Securities Act orSection 20 of the Exchange Act) the Company and the officers, directors,partners, employees, representatives and agents of each such Person, to thesame extent as the foregoing indemnity from the Company to each of theIndemnified Holders, but only with respect to claims and actions based oninformation relating to such Holder furnished in writing by such Holderexpressly for use in any Registration Statement. In case any action orproceeding shall be brought against the Company or its officers, directors,partners, employees, representatives, agents or any such controlling person inrespect of which indemnity may be sought against a Holder of TransferRestricted Securities, such Holder shall have the rights and duties given theCompany, and the Company and its officers, directors, partners, employees,representatives, agents and such controlling person shall have the rights andduties given to each Holder by the preceding paragraph.

 

(c)  If the indemnification provided for in thisSection 8 is unavailable to an indemnified party under Section 8(a) or (b)hereof (other than by reason of exceptions provided in those Sections) inrespect of any losses, claims, damages, liabilities, judgments, actions orexpenses referred to therein, then each applicable indemnifying party, in lieuof indemnifying such indemnified party, shall contribute to the amount paid orpayable by such indemnified party as a result of such losses, claims, damages,liabilities or expenses in such proportion as is appropriate to reflect therelative benefits received by the Company, on the one hand, and the Holders, onthe other hand, from the Initial Placement (which in the case of the Companyshall be deemed to be equal to the total gross proceeds to the Company from theInitial Placement), the amount of Liquidated Damages which did not becomepayable as a result of the filing of the Registration Statement resulting insuch losses, claims, damages, liabilities, judgments actions or expenses, andsuch Registration Statement, or if such allocation is not permitted byapplicable law, the relative fault of the Company, on the one hand, and theHolders, on the other hand, in connection with the statements or omissionswhich resulted in such losses, claims, damages, liabilities or expenses, aswell as any other relevant equitable considerations.  The relative fault of the Company on the onehand and of the Indemnified Holder on the other shall be determined byreference to, among other things, whether the untrue or alleged untruestatement of a material fact or the omission or alleged omission to state amaterial fact relates to information supplied by the Company, on the one hand,or the Indemnified Holders, on the other hand, and the parties’ relativeintent, knowledge, access to information and opportunity to correct or preventsuch statement or omission. The amount paid or payable by a party as a resultof the losses, claims,

 

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damages,liabilities and expenses referred to above shall be deemed to include, subjectto the limitations set forth in the second paragraph of Section 8(a) hereof,any legal or other fees or expenses reasonably incurred by such party inconnection with investigating or defending any action or claim.

 

The Company andeach Holder of Transfer Restricted Securities agree that it would not be justand equitable if contribution pursuant to this Section 8(c) were determined bypro rata allocation (even if the Holders were treated as one entity for suchpurpose) or by any other method of allocation which does not take account ofthe equitable considerations referred to in the immediately precedingparagraph. The amount paid or payable by an indemnified party as a result ofthe losses, claims, damages, liabilities or expenses referred to in theimmediately preceding paragraph shall be deemed to include, subject to thelimitations set forth above, any legal or other expenses reasonably incurred bysuch indemnified party in connection with investigating or defending any suchaction or claim. Notwithstanding the provisions of this Section 8, none of theHolders (and its related Indemnified Holders) shall be required to contribute,in the aggregate, any amount in excess of the amount by which the totaldiscount received by such Holder with respect to the Initial Securities exceedsthe amount of any damages which such Holder has otherwise been required to payby reason of such untrue or alleged untrue statement or omission or allegedomission. No Person guilty of fraudulent misrepresentation (within the meaningof Section 11(f) of the Securities Act) shall be entitled to contribution fromany Person who was not guilty of such fraudulent misrepresentation. TheHolders’ obligations to contribute pursuant to this Section 8(c) are several inproportion to the respective principal amount of Initial Securities held byeach of the Holders hereunder and not joint.

 

Section 9.  *Rule 144A. *The Company hereby agrees with eachHolder, for so long as any Transfer Restricted Securities remain outstanding,to make available to any Holder or beneficial owner of Transfer RestrictedSecurities in connection with any sale thereof and any prospective purchaser ofsuch Transfer Restricted Securities from such Holder or beneficial owner, theinformation required by Rule 144A(d)(4) under the Securities Act in order topermit resales of such Transfer Restricted Securities pursuant to Rule 144Aunder the Securities Act.

 

Section 10.  *Participation in UnderwrittenRegistrations. *No Holder may participate in anyUnderwritten Registration hereunder unless such Holder (a) agrees to sell suchHolder’s Transfer Restricted Securities on the basis provided in anyunderwriting arrangements approved by the Persons entitled hereunder to approvesuch arrangements and (b) completes and executes all reasonable questionnaires,powers of attorney, indemnities, underwriting agreements, lock-up letters andother documents required under the terms of such underwriting arrangements.

 

Section 11.  *Selection of Underwriters. *The Holders of Transfer Restricted Securities coveredby the Shelf Registration Statement who desire to do so may sell such TransferRestricted Securities in an Underwritten Offering. In any such UnderwrittenOffering, the investment banker(s) and managing underwriter(s) that willadminister such offering will be selected by the Company and shall bereasonably acceptable to the Holders of a majority in aggregate principal amountof such Transfer Restricted Securities included in such offering.

 

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Section 12.  *Miscellaneous.*

 

(a)  *Remedies. *The Company hereby agrees that monetary damages would not beadequate compensation for any loss incurred by reason of a breach by it of theprovisions of this Agreement and hereby agree to waive the defense in anyaction for specific performance that a remedy at law would be adequate.

 

(b)  *No InconsistentAgreements. *The Company will not on or after thedate of this Agreement enter into any agreement with respect to its securitiesthat is inconsistent with the rights granted to the Holders in this Agreementor otherwise conflicts with the provisions hereof.  The rights granted to the Holders hereunderdo not in any way conflict with and are not inconsistent with the rightsgranted to the holders of the Company’s securities under any agreement ineffect on the date hereof.

 

(c)  *Adjustments Affecting theSecurities. *The Company willnot take any action, or permit any change to occur, with respect to theSecurities that would materially and adversely affect the ability of theHolders to Consummate any Exchange Offer.

 

(d)  *Amendments andWaivers. *The provisions ofthis Agreement may not be amended, modified or supplemented, and waivers orconsents to or departures from the provisions hereof may not be given unlessthe Company has (i) in the case of Section 5 hereof and this Section 12(d)(i),obtained the written consent of Holders of all outstanding Transfer RestrictedSecurities and (ii) in the case of all other provisions hereof, obtained thewritten consent of Holders of a majority of the outstanding principal amount ofTransfer Restricted Securities affected by such amendment, modification,supplement, waiver or departure.

 

(e)  *Notices. *All notices and othercommunications provided for or permitted hereunder shall be made in writing byhand-delivery, first-class mail (registered or certified, return receiptrequested), telex, telecopier, or air courier guaranteeing overnight delivery:

 

(i)  if to a Holder, at the address set forth onthe records of the Registrar under the Indenture, with a copy to the Registrarunder the Indenture; and

 

(ii)  if to the Company:

c/o Oak Hill CapitalPartners

65 East 55th Street

36th Floor

New York, New York  10022

Facsimile:  (212) 754-5685

Attention:  Tyler Wolfram

 

 

With a copy to:

Paul, Weiss,Rifkind, Wharton & Garrison LLP

1285 Avenue of theAmericas

New York, NewYork  10019

Facsimile:  212-757-3990

Attention:  John C. Kennedy, Esq.

 

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All such noticesand communications shall be deemed to have been duly given:  at the time delivered by hand, if personallydelivered; five Business Days after being deposited in the mail, postageprepaid, if mailed; when answered back, if telexed; when receipt acknowledged,if telecopied; and on the next Business Day, if timely delivered to an aircourier guaranteeing overnight delivery.

 

Copies of all suchnotices, demands or other communications shall be concurrently delivered by thePerson giving the same to the Trustee at the address specified in theIndenture.

 

(f)  *Successors andAssigns. *This Agreement shallinure to the benefit of and be binding upon the successors and assigns of eachof the parties, including, without limitation, and without the need for an expressassignment, Duane Reade, as successor to the Company, and Duane Reade GP asco-obligor, upon consummation of the Acquisition, and subsequent Holders ofTransfer Restricted Securities; *provided, however*,that this Agreement shall not inure to the benefit of or be binding upon asuccessor or assign of a Holder unless and to the extent such successor orassign acquired Transfer Restricted Securities from such Holder.  Nothing herein shall be deemed to permit anyassignment, transfer or other disposition of Transfer Restricted Securities inviolation of the terms of the Purchase Agreement or the Indenture.

 

(g)  *JoinderAgreements. *On theAcquisition Closing Date, the Company shall cause Duane Reade, Duane Reade GPand each of the Guarantors to execute a Joinder Agreement. Pursuant to theJoinder Agreement, Duane Reade, Duane Reade GP and each Guarantor shall agreeto (i) be bound by all covenants, agreements, representations, warranties, andacknowledgements attributable to the Company (including the Company’sobligations as an indemnifying party) in this Agreement as if made by, and withrespect to, each party signatory to the Joinder Agreement and (ii) jointly andseverally, perform all obligations and duties required of the Company pursuantto this Agreement.

 

(h)  *Counterparts. *This Agreement may be executed inany 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 ofwhich taken together shall constitute one and the same agreement.

 

(i)  *Headings. *The headings in this Agreement arefor convenience of reference only and shall not limit or otherwise affect themeaning hereof.

 

(j)  *Governing Law. *THIS AGREEMENT SHALL BE GOVERNEDBY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUTREGARD TO THE CONFLICTS OF LAW RULES THEREOF.

 

(k)  *Severability. *In the event that any one or moreof the provisions contained herein, or the application thereof in anycircumstance, is held invalid, illegal or unenforceable, the validity, legalityand enforceability of any such provision in every other respect and of theremaining provisions contained herein shall not be affected or impairedthereby.

 

(l)  *Entire Agreement. *This Agreement together with thePurchase Agreement, the Indenture, the Securities, the Joinder Agreements andany related documents is intended by the 

 

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parties as a finalexpression of their agreement and intended to be a complete and exclusivestatement of the agreement and understanding of the parties hereto in respectof the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, otherthan those set forth or referred to herein with respect to the registrationrights granted by the Company with respect to the Transfer RestrictedSecurities.  This Agreement supersedesall prior agreements and understandings between the parties with respect tosuch subject matter.

 

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IN WITNESSWHEREOF, the parties have executed this Agreement as of the date first writtenabove.

 

DUANE READE ACQUISITIONCORP.

 

 
|   | By:    | /s/ Tyler J. Wolfram          |   |
|--------|--------|-------------------------------|--------|
|   | Name:  | Tyler J. Wolfram              |   |
|   | Title: | Vice  President and Secretary |   |
|        |        |                               |        |  |

 

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The foregoingRegistration Rights Agreement is hereby confirmed and accepted as of the datefirst above written:

 

BANC OF AMERICA SECURITIES LLCCITIGROUP GLOBAL MARKETS INC.

CREDIT SUISSE FIRSTBOSTON LLC

UBS SECURITIES LLC

 

 
| By:    | Banc of America  Securities LLC |               |
|--------|---------------------------------|--------------------|
|   |                            |               |
|   |                            |               |
| By:    | /s/ James D.  Jeffries          |               |
|   | Name:                           | James D.  Jeffries |
|   | Title:                          | Managing Director  |
|        |                                 |                    |  |

 

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**JOINDERAGREEMENT**

 

                                WHEREAS,Duane Reade Acquisition Corp. (the “Company”), executed and delivered (i) thePurchase Agreement, dated as of July 23, 2004 (the “Syndicate PurchaseAgreement”), by and among the Initial Purchasers named on Schedule A thereof(the “Syndicate Initial Purchasers”) and the Company relating to the issuanceand sale of $190,000,000 aggregate principal amount of its 9.75% SeniorSubordinated Notes due 2011 (“Syndicate Notes”) and (ii) the PurchaseAgreement, dated as of July 23, 2004 (the “Investor Purchase Agreement andtogether with the Syndicate Purchase Agreement, the “Purchase Agreements”), byand between Banc of America Securities LLC (the “Investor” and, together withthe Syndicate Initial Purchasers, the “Initial Purchasers”) and the Company,relating to the issuance and sale of $5,000,000 aggregate principal amount ofNotes (the “Investor Notes” and, together with the Syndicate Notes, the“Notes”).  All capitalized terms usedherein, but not defined, shall have the meanings assigned thereto in thePurchase Agreements;

 

                                WHEREAS,the Company and the Initial Purchasers executed and delivered a RegistrationRights Agreement, providing for the registration of the Notes under theSecurities Act of 1933, as amended;

 

                                WHEREAS,pursuant to the Purchase Agreements, Duane Reade, Duane Reade GP and each ofthe Guarantors, not originally party to the Purchase Agreements, are obligatedto join in the Purchase Agreements and the Registration Rights Agreement uponconsummation of the Merger on terms described below;

 

                                WHEREAS, on thedate hereof, (i) Duane Reade shall execute the Successor SupplementalIndenture, pursuant to which it will assume all the obligations of the Companyunder the Notes and the Indenture as successor in the Merger, (ii) Duane ReadeGP shall execute the Co-Obligor Supplemental Indenture, pursuant to which itwill agree to become a co-obligor with Duane Reade of all the obligations underthe Notes and the Indenture and (iii) each of the Guarantors shall execute aGuarantor Supplemental Indenture, pursuant to which each of the Guarantors willguarantee all the obligations of the Duane Reade and Duane Reade GP under theNotes and the Indenture;

 

                                NOW,THEREFORE, each of Duane Reade, Duane Reade GP and the Guarantors hereby agreesfor the benefit of the Initial Purchasers, as follows:

 

(a)           Each of the undersigned herebyacknowledges that it has received and reviewed a copy of each of the PurchaseAgreements, the Registration Rights Agreement and all other documents it deemsfit to enter into these Agreements, and acknowledges and agrees to (i) join andbecome a party to each of the Purchase Agreements and the Registration RightsAgreement as indicated by its signature below; (ii) be bound by all covenants,agreements, representations,

 

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warranties andacknowledgments attributable to an indemnifying party in each of the PurchaseAgreements and the Registration Rights Agreement as if made by, and withrespect to, each signatory hereto; and (iii) jointly and severally, perform allobligations and duties required of the Company pursuant to the PurchaseAgreements and the Registration Rights Agreement.

 

(b)           Each of the undersigned herebyrepresents and warrants to and agrees with the Initial Purchasers that it hasall the requisite corporate or partnership power and authority and the legalright to execute, deliver and perform its obligations under this JoinderAgreement, that performance of this Joinder Agreement does not and will notviolate (i) any provisions of its charter, by-laws or other similar document,or (ii) any contractual obligations binding on it, except, in the case of thisclause (ii), for such violations as would not, individually or in theaggregate, result in a Material Adverse Change; and that when this JoinderAgreement is executed and delivered, it will constitute a valid and legallybinding agreement enforceable against each of the undersigned in accordancewith its terms, except as the enforcement thereof may be subject to bankruptcy,insolvency, reorganization, fraudulent conveyance or transfer, moratorium orsimilar laws affecting creditors’ rights generally and subject to generalprinciples of equity (regardless of whether enforceability is considered in aproceeding in equity or at law) and except as rights to indemnification underthe Purchase Agreements or the Registration Rights Agreement may be limited byapplicable law.

 

                                THEVALIDITY AND INTERPRETATION OF THIS JOINDER AGREEMENT, AND THE TERMS ANDCONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCEWITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BEPERFORMED ENTIRELY WITHIN SUCH STATE.

 

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                                INWITNESS WHEREOF, the undersigned have executed this agreement this 30thday of July, 2004.

 
|   | Duane Reade Inc. (as successor by merger to               |
|--------|-----------------------------------------------------------|
|   | Duane Reade Acquisition Corp.), a                         |
|   | Delaware corporation                                      |
|   |                                                      |
|   | By:                                                       | /s/  Michelle  D. Bergman |   |
|   | Name:                                                     | Michelle D. Bergman |   |
|   | Title:                                                    | Assistant Secretary |   |
|   |                                                      |
|   |                                                      |
|   | Duane Reade, a New York  general  partnership             |
|   |                                                      |   |   |
|   | By:                                                       | Duane Reade Inc., as  General Partner |
|   |                                                      |   |   |
|   |                                                      |   |   |
|   | By:                                                       | /s/  Michelle  D. Bergman |   |
|   | Name:                                                     | Michelle D. Bergman |   |
|   | Title:                                                    | Assistant Secretary |   |
|   |                                                      |   |   |
|   |                                                      |   |   |
|   | DRI I Inc., a Delaware  corporation                       |
|   |                                                      |   |   |
|   |                                                      |   |   |
|   | By:                                                       | /s/  Michelle  D. Bergman |   |
|   | Name:                                                     | Michelle D. Bergman |   |
|   | Title:                                                    | Assistant Secretary |   |
|   |                                                      |   |   |
|   |                                                      |   |   |
|   | Duane Reade  International, Inc., a Delaware  corporation |
|   |                                                      |   |   |
|   |                                                      |   |   |
|   | By:                                                       | /s/  Michelle  D. Bergman |   |
|   | Name:                                                     | Michelle D. Bergman |   |
|   | Title:                                                    | Secretary |   |
|        |                                                           |  |  |  |

 

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|   |                                                       |                           |   |
|--------|------------------------------------------------------------|--------------------------------|--------|
|   | Duane Reade Realty,  Inc., a Delaware  corporation

  |
|   |                                                       |                           |   |
|   | By:                                                        | /s/  Michelle  D. Bergman |   |
|   | Name:                                                      | Michelle D. Bergman            |   |
|   | Title:                                                     | Assistant Secretary            |   |
|        |                                                            |                                |        |  |

 

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