EXHIBIT 4.2


REGISTRATION RIGHTS AGREEMENT


by
and among


Duane
Reade Inc.


Duane
Reade GP


The Guarantors named herein


and


Banc of America Securities LLC


Dated as of August
9, 2005


 





















 


 


REGISTRATION
RIGHTS AGREEMENT


 


This Registration Rights Agreement (this “Agreement”)
is made and entered into as of August 9, 2005, by and among Duane Reade Inc., a
Delaware corporation (the “Company”), Duane Reade, a New York general
partnership and subsidiary of the Company (“Duane Reade GP”, and together with
the Company, the “Issuers”), Duane Reade Holdings, Inc., a Delaware corporation
(“Holdings”), each of the direct and indirect domestic subsidiaries of the
Company named herein (other than Duane Reade GP) (collectively, the “Guarantors”),
and Banc of America Securities LLC (the “Initial Purchaser”), who has agreed to
purchase the Issuers’ Senior Secured Floating Rate Notes due 2010 (the “Initial
Securities”).


This Agreement is made pursuant to the Purchase
Agreement, dated August 4, 2005, by and among the Initial Purchaser, the
Issuers and the
Guarantors (the “Purchase Agreement”) (a) for the benefit of the Initial Purchaser and (b)
for the benefit of the holders from time to time of the Initial Securities,
including the Initial Purchaser. In order to induce the Initial Purchaser to
purchase the Initial Securities, the Issuers and the Guarantors have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchaser set
forth in Section 5(k) of the Purchase Agreement.


The parties hereby agree
as follows:


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


Broker-Dealer: 
Any broker
or dealer registered under the Exchange Act.


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


Closing Date:  The date of this Agreement.


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)
the filing and effectiveness under the Securities Act of the Exchange Offer
Registration Statement relating to the Exchange Securities to be issued in the
Exchange Offer, (ii) the maintenance of such Registration Statement
continuously effective and the keeping of the Exchange Offer open for a period
not less than the minimum period required pursuant to Section 3(b) hereof, and
(iii) the delivery by the Issuers to the Registrar under the Indenture of
Exchange Securities in the same aggregate principal amount as the aggregate
principal amount of Initial Securities that were tendered by Holders thereof
pursuant to the Exchange Offer.


Duane Reade GP:  As defined in the recitals hereto.


 


2





















Effectiveness Target Date:  As defined in Section 5 hereof.


Exchange Act: 
The
Securities Exchange Act of 1934.


Exchange Offer: 
The
registration by the Issuers under the Securities Act of the Exchange Securities
pursuant to a Registration Statement pursuant to which the Issuers offer the Holders
of all outstanding Transfer Restricted Securities the opportunity to exchange
all such outstanding Transfer Restricted Securities held by such Holders for
Exchange Securities in an aggregate principal amount equal to the aggregate
principal amount of the Transfer Restricted Securities tendered in such
exchange offer by such Holders.


Exchange Offer Registration Statement:  The Registration Statement relating to the Exchange
Offer, including the related Prospectus.


Exchange Securities:  The Issuers’ Senior Secured Floating Rate Notes due
2010, of the same series under the Indenture as the Initial Securities, to be
issued to Holders in exchange for Transfer Restricted Securities pursuant to
this Agreement.


Guarantors:  As defined in the recitals hereto.


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


Indemnified Holder: 
As defined
in Section 8(a) hereof.


Indenture:  The Indenture, dated as of December 20,
2004, by and among the Issuers, the Guarantors and U.S. Bank National
Association, as trustee (the “Trustee”), pursuant to which the Securities are
to be issued, as such Indenture is amended or supplemented from time to time in
accordance with the terms thereof.


Initial Placement: 
The
issuance and sale by the Issuers of the Initial Securities to the Initial
Purchaser pursuant to the Purchase Agreement.


Initial Purchaser: 
As defined
in the preamble hereto.


Initial Securities: 
As defined
in the preamble hereto.


Interest Payment Date:  As defined in the Indenture and the Securities.


Issuers:  As defined in the preamble hereto.


NASD:  NASD Inc.


Participating Broker-Dealer: 
The Initial Purchaser and any other Broker-Dealer which makes a market
in the Initial Securities and exchanges Transfer Restricted Securities in the
Exchange Offer for Exchange Securities.


Person:  An individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or political
subdivision thereof.


3





















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


Purchase Agreement:  As defined in
the recitals hereto.


Registration Actions: 
As defined in Section 4(c) hereof.


Registration Default:  As defined in Section 5 hereof.


Registration Statement:  Any registration statement of the Issuers relating to
(a) an offering of Exchange Securities pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, which is filed pursuant to the provisions of this
Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.


Securities:  The Initial Securities and the Exchange
Securities.


Securities Act: 
The
Securities Act of 1933.


Shelf Registration Statement:  As defined in Section 4(a) hereof.


Suspension Notice:  As defined in
Section 4(c) hereof.


Suspension Period:  As defined in
Section 4(c) hereof.


Trust Indenture Act:  The Trust Indenture Act of 1939, as amended.


Transfer Restricted Securities:  Each Initial Security, until the earliest to occur of
(a) the date on which such Initial Security is exchanged in the Exchange Offer
for an Exchange Security entitled to be resold to the public by the Holder
thereof without complying with the prospectus delivery requirements of the
Securities Act, (b) the date on which such Initial Security has been
effectively registered under the Securities Act and disposed of in accordance
with a Shelf Registration Statement and (c) the date on which such Initial Security
is distributed to the public pursuant to Rule 144 under the Securities Act or
by a Broker-Dealer pursuant to the “Plan of Distribution” contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein).


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


For purposes of this Agreement, if the day on which
any deadline specified in this Agreement expires is not a Business day, such
deadline shall be deemed to expire on the next succeeding Business Day.


4





















 


SECTION
2.  Securities Subject to this Agreement.


(a)  Transfer Restricted Securities.  The
securities entitled to the benefits of this Agreement are the Transfer
Restricted Securities.


(b)  Holders of Transfer Restricted Securities.  A Person 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 be permissible under applicable law or Commission
policy (after the procedures set forth in Section 6(a) hereof have been
complied with), the Issuers shall (i) cause to be filed with the Commission on
or prior to the 120th day after the Closing Date, a Registration
Statement under the Securities Act relating to the Exchange Securities and the
Exchange Offer, (ii) use their reasonable best efforts to cause such
Registration Statement to become effective on or prior to the 180th
day after the Closing Date, (iii) in connection with the foregoing, (A) file
all pre-effective amendments to such Registration Statement as may be necessary
in order to cause such Registration Statement to become effective, (B) if
applicable, file a post-effective amendment to such Registration Statement
pursuant to Rule 430A under the Securities Act and (C) use their reasonable
best efforts to cause all necessary filings in connection with the registration
and qualification of the Exchange Securities to be made under the state
securities or blue sky laws of such jurisdictions as any Holder shall
reasonably request in writing by the time the Exchange Offer Registration
Statement is declared effective by the Commission, it being agreed that no such
registration or qualification will be made unless so requested, to permit
Consummation of the Exchange Offer; provided, however,
that none of the Issuers or any of the Guarantors shall be required to (1)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(a), or (2) take any action which would subject it to general service
of process or taxation in any such jurisdiction where it is not then so
subject, and (iv) as promptly as practicable after the effectiveness of such
Registration Statement, commence the Exchange Offer. The Exchange Offer shall
be on the appropriate form permitting registration of the Exchange Securities
to be offered in exchange for the Transfer Restricted Securities and to permit
resales of Initial Securities held by Broker-Dealers as contemplated by Section
3(c) hereof.


(b)  The Issuers
shall use their reasonable best efforts to cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be
less than 30 days or shall the termination date of the Exchange Offer be not
more than 45 days (or longer if required by applicable law) after the date
notice of the Exchange Offer is mailed to the Holders. The Issuers shall cause
the Exchange Offer to comply in all material respects with all applicable
federal and state securities laws.  No
securities other than the Exchange Securities shall be included in the Exchange
Offer Registration Statement. The Issuers shall use their reasonable best
efforts to cause the Exchange Offer to be Consummated on or prior to the 210th
day after the Closing Date.


5





















 


(c)  The Issuers
shall indicate in a “Plan of Distribution” section contained in the Prospectus
forming a part of the Exchange Offer Registration Statement that any
Broker-Dealer who holds Initial Securities that are Transfer Restricted
Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Issuers), may exchange such
Initial Securities pursuant to the Exchange Offer; however, such Broker-Dealer
may be deemed to be an “underwriter” within the meaning of the Securities Act
and must, therefore, deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of the Exchange Securities
received by such Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Broker-Dealer of the
Prospectus contained in the Exchange Offer Registration Statement. Such “Plan
of Distribution” section shall also contain all other information with respect
to such resales by Broker-Dealers that the Commission may require in order to
permit such resales pursuant thereto, but such “Plan of Distribution” shall not
name any such Broker-Dealer or disclose the amount of Initial Securities held
by any such Broker-Dealer except to the extent required by the Commission as a
result of a change in policy after the date of this Agreement.


The Issuers shall use their reasonable best efforts to
keep the Exchange Offer Registration Statement continuously effective, supplemented
and amended as required by the provisions of Section 6(c) hereof to the extent
necessary to ensure that it is available for resales of Initial Securities
acquired by Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities, and to ensure that it conforms in all
material respects with the requirements of this Agreement, the Securities Act
and the policies, rules and regulations of the Commission as announced from
time to time, for a period ending on the earlier of (i) 180 days from the date
on which the Exchange Offer Registration Statement is declared effective and
(ii) the date on which a Broker-Dealer is no longer required to deliver a
prospectus in connection with market-making or other trading activities.


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


SECTION
4.  Shelf Registration.


(a)  Shelf Registration.  If
(i) the Exchange Offer is not permitted by applicable law or Commission policy
(after the procedures set forth in Section 6(a) hereof have been complied
with), (ii) for any reason the Exchange Offer is not Consummated within 210
days after the Closing Date, or (iii) with respect to any Holder of Transfer
Restricted Securities (A) such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) such Holder
may not resell the Exchange Securities acquired by it in the Exchange Offer to
the public without delivering a prospectus and that the Prospectus contained in
the Exchange Offer Registration Statement is not appropriate or available for
such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds
Initial Securities acquired directly from the Issuers or one of the Issuers’
affiliates then, upon such Holder’s or Initial Purchaser’s request, the Issuers
shall


6





















 


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


 


(y)  use their reasonable best efforts to cause
such Shelf Registration Statement to be declared effective by the Commission on
or before the later of (x) the 90th day after the Shelf Filing Deadline and (y)
the 180th day after the Closing Date.


 


The Issuers shall use their reasonable best efforts to
keep such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Initial
Securities by the Holders of Transfer Restricted Securities entitled to the
benefit of this Section 4(a), and to ensure that it conforms in all material
respects with the requirements of this Agreement, the Securities Act and the
rules and regulations of the Commission as announced from time to time, for a
period of two years following the effective date of such Shelf Registration
Statement (or shorter period that will terminate when all the Initial
Securities covered by such Shelf Registration Statement have been sold pursuant
to such Shelf Registration Statement).


 


(b)  Provision by Holders of
Certain Information in Connection with the Shelf Registration Statement.  No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within 20 Business Days after receipt of a
request therefor, such information as the Company may reasonably request for
use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. Each Holder as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.


(c)  Suspension. 
Notwithstanding anything to the contrary and subject to the limitation
set forth in the next succeeding paragraph, at any time after the effectiveness
of the Shelf Registration Statement, each of the Issuers shall be entitled to
suspend its obligation to file any amendment to the Shelf Registration Statement,
furnish any supplement or amendment to a Prospectus included in the Shelf
Registration Statement, make any other filing with the Commission, cause the
Shelf Registration Statement or other filing with the Commission to remain
effective or take any similar action (collectively, “Registration Actions”)
upon (A) the issuance by the Commission of a stop order suspending the
effectiveness of the Shelf 


7





















 


Registration Statement or
the initiation of proceedings with respect to the Shelf Registration Statement
under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any
event or the existence of any fact as a result of which the Shelf Registration
Statement would or shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or the related Prospectus would or
shall contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
or (C) the occurrence or existence of any corporate development that, in the
discretion of the Company, makes it appropriate to postpone or suspend the
availability of the Shelf Registration Statement and the related
Prospectus.  Upon the occurrence of any
of the conditions described in clause (A), (B) or (C) above, the Company shall
give prompt notice (a “Suspension Notice”) thereof to the Holders.  Upon the termination of such condition, the
Company shall give prompt notice thereof to the Holders and shall promptly
proceed with all Registration Actions that were suspended pursuant to this paragraph.


The Issuers may only suspend Registration Actions
pursuant to the preceding paragraph for one or 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 month period, during which no
Liquidated Damages (as defined in Section 5) shall be payable.  Each Suspension Period shall be deemed to
begin on the date the relevant Suspension Notice is given to the Holders and
shall be deemed to end on the earlier to occur of (1) the date on which the
Company gives the Holders a notice that the Suspension Period has terminated
and (2) the date on which the number of days during which a Suspension
Period has been in effect exceeds, in the aggregate, (x) sixty days in any three
month period or (y) ninety days in any twelve month period.


SECTION 5.  Liquidated Damages. 
Subject to
the Issuers’ ability to declare Suspension Periods with respect to clause (iv)
below, if (i) any of the Registration Statements required by this Agreement is
not filed with the Commission on or prior to the date specified for such filing
in this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the “Effectiveness Target Date”), (iii) the
Exchange Offer has not been Consummated on or prior to the date specified for
such consummation in this Agreement or (iv) any Registration Statement required
by this Agreement is filed and declared effective but shall thereafter cease to
be effective or fail to be usable for its intended purpose for more than 30
days (each such event referred to in clauses (i) through (iv), a “Registration
Default”), each of the Issuers and Guarantors hereby agrees to pay liquidated
damages (“Liquidated Damages”) in the form of additional interest in cash to
each Holder in an amount equal to 0.25% per annum of the aggregate principal
amount of the Transfer Restricted Securities for the period of occurrence of the
Registration Default until such time as no Registration Default is in effect,
which rate shall increase by 0.25% per annum for each subsequent 90-day period
during which such Registration Default continues, but in no event shall such
increase exceed 1.00% per annum. Following the cure of all Registration
Defaults relating to any particular Transfer Restricted Securities, the
Liquidated Damages will cease to accrue from the date of such cure and the
interest rate on the Transfer Restricted Securities will revert to the original
interest rate borne by such Transfer Restricted Securities; provided, however, that, if after the date
such Liquidated Damages cease to 


8





















 


accrue, a different
Registration Default occurs, Liquidated Damages may again commence accruing
pursuant to the foregoing provisions.


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


All references in the Indenture to “interest” include
the Liquidated Damages payable pursuant to this Section 5, and all accrued
Liquidated Damages shall be payable to the Holders entitled thereto, in the
manner provided for the payment of interest in the Indenture, as more fully set
forth in the Indenture and the Securities. All obligations of the Issuers and
the Guarantors set forth in the preceding paragraph that are outstanding with
respect to any Transfer Restricted Security at the time such security ceases to
be a Transfer Restricted Security shall survive until such time as all such
obligations with respect to such security shall have been satisfied in full.


SECTION
6.  Registration Procedures.


(a)  Exchange Offer Registration Statement. 
In connection with the Exchange Offer, each of the Issuers
and Guarantors shall comply with all of the provisions of Section 6(c) hereof,
shall use its reasonable best efforts to effect such exchange to permit the
sale of Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof set forth in the
Registration Statement and shall comply with all of the following provisions:


(i)  If in the reasonable opinion of counsel to
the Issuers there is a question as to whether the Exchange Offer is permitted
by applicable law, each of the Issuers, and Holdings shall cause the Issuers to
seek such no-action letter or other favorable decision from the Commission,
hereby agrees to seek a no-action letter or other favorable decision from the
Commission allowing the Issuers to Consummate an Exchange Offer for such
Initial Securities.  Each of the Issuers,
and Holdings shall cause the Issuers to pursue the issuance of such a decision,
hereby agrees to pursue the issuance of such a decision to the Commission staff
level but shall not be required to take commercially unreasonable action to
effect a change of Commission policy. 
Each of the Issuers hereby agrees, and Holdings shall cause the Issuers,
however, to (A) participate in telephonic conferences with the Commission, (B)
deliver to the Commission staff an analysis prepared by counsel to the Issuers
setting forth the legal bases, if any, upon which such counsel has concluded
that such an Exchange Offer should be permitted and (C) diligently pursue a
favorable resolution by the Commission staff of such submission.


(ii)  As a condition to its participation in the
Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company, prior to
the Consummation thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate of either
of the Issuers, (B) it is not engaged in, and does not intend to engage in, and
has no 


9





















 


arrangement or
understanding with any Person to participate in, a distribution of the Exchange
Securities to be issued in the Exchange Offer and (C) it is acquiring the
Exchange Securities in its ordinary course of business.  In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the Issuers’ preparations
for the Exchange Offer.  Each Holder
hereby acknowledges and agrees that any Broker-Dealer and any such Holder using
the Exchange Offer to participate in a distribution of the securities to be
acquired in the Exchange Offer (1) could not under Commission policy as in
effect on the date of this Agreement rely on the position of the Commission
enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon
Capital Holdings Corporation (available May 13, 1988), as interpreted in
the Commission’s letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters (which may include any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction and that such a secondary resale transaction
should be covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of Exchange Securities obtained by such
Holder in exchange for Initial Securities acquired by such Holder directly from
the Issuers.


(b)  Shelf Registration Statement.  In
connection with the Shelf Registration Statement, each of the Issuers and
Guarantors shall comply with all the provisions of Section 6(c) hereof and
shall use its reasonable best efforts to effect such registration to permit the
sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof set forth in such Shelf
Registration Statement, and pursuant thereto each of the Issuers will as
promptly as practicable prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the
Securities Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof set forth in such Shelf Registration Statement.


(c)  General Provisions.  Except
as otherwise provided, in connection with any Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities (including, without limitation, any Registration Statement
and the related Prospectus required to permit resales of Initial Securities by
Broker-Dealers), each of the Issuers shall:


(i)  use its reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 hereof, as applicable;
upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for resale of
Transfer Restricted Securities during the period required by this Agreement,
the Issuers shall file as promptly as practicable an appropriate amendment to
such Registration Statement, in the case of clause (A), correcting any 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 declared effective and
such Registration Statement and the 


 


10





















 


related Prospectus
to become usable for their intended purpose(s) as soon as practicable
thereafter;


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


(iii)  advise the underwriter(s), if any, and
selling Holders as promptly as practicable and, if requested by such Persons,
to confirm such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when the same
has become effective, (B) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus or
for additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement under the Securities Act or of the suspension by any state securities
commission of the qualification of the Transfer Restricted Securities for
offering or sale in any jurisdiction, or the initiation of any proceeding for
any of the preceding purposes, (D) of the existence of any fact or the
happening of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading (provided, however, that no advice by the
Issuers shall be required pursuant to this clause (D) in the event that the
Issuers either promptly file a Prospectus supplement to update the Prospectus
or a Form 8-K or other appropriate Exchange Act report that is incorporated by
reference into such Registration Statement, which, in either case, contains the
requisite information with respect to such event or facts that results in such
Registration Statement no longer containing any untrue statement of material
fact or omitting to state a material fact necessary to make the statements
contained therein not misleading).  If at
any time the Commission shall issue any stop order suspending the effectiveness
of the Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
blue sky laws, each of the Issuers shall use its reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest practicable
time;


 


11





















 


(iv)  in the case of a Shelf Registration or if a
Prospectus is required to be delivered by any Participating Broker-Dealer in
the case of an Exchange Offer, furnish without charge to the Initial Purchaser,
each selling Holder named in any Registration Statement, and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any amendments or supplements
to any such Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review and comment of such
Holders and underwriter(s) in connection with such sale, if any, for a period
of at least five Business Days, and the Issuers will not file any such
Registration Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents incorporated
by reference) to which the Initial Purchaser of Transfer Restricted Securities
covered by such Registration Statement or the underwriter(s), if any, shall
reasonably object in writing within five Business Days after the receipt
thereof (such objection to be deemed timely made upon confirmation of telecopy
transmission within such period). 
Notwithstanding the foregoing, the Issuers shall not be required to take
any actions under this Section 6(c)(iv) that are not, in the reasonable
opinion of counsel for the Issuers, in compliance with applicable law or to
include any disclosure which at the time would have an adverse effect on the
business or operations of the Company and/or its subsidiaries, as determined in
good faith by the Issuers;


(v)  in the case of a Shelf Registration, promptly
prior to the filing of any document that is to be incorporated by reference
into a Registration Statement or Prospectus, provide copies of such document,
to the extent requested, to the Initial Purchaser, each selling Holder named in
any Registration Statement, and to the underwriter(s), if any, make each of the
Issuers’ and Guarantors’ management, officers and other representatives
available for discussion of such document and other customary due diligence
matters, and include such information in such document prior to the filing
thereof as such selling Holders or underwriter(s), if any, reasonably may
request;


(vi)  in the case of a Shelf Registration or if a
Prospectus is required to be delivered by any Participating Broker-Dealer in
the case of an Exchange Offer, make available at reasonable times for
inspection by the Initial Purchaser, the managing underwriter(s), if any,
participating in any disposition pursuant to such Registration Statement and
one firm of legal counsel or accountant retained by any of the foregoing, all
financial and other records, pertinent corporate documents and properties of
each of the Issuers and Guarantors reasonably requested by any such Persons and
cause each of the Issuers’ and Guarantors’ officers, directors and employees to
supply all information reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing thereof and prior to
its effectiveness and to be available for discussion of such documents to the
extent reasonably requested by any Holder, Initial Purchaser or underwriter;


(vii)  if requested by any selling Holders or the
underwriter(s), if any, promptly incorporate in any Registration Statement or
Prospectus, pursuant to a supplement or 


 


12





















 


post-effective
amendment if necessary, such information as such selling Holders and underwriter(s),
if any, may reasonably request to have included therein, including, without
limitation, information relating to the “Plan of Distribution” of the Transfer
Restricted Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the purchase
price being paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment;


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


(ix)  in the case of a Shelf Registration, furnish
to 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 the
Commission, and of each amendment thereto, including financial statements and
schedules, (without documents incorporated therein by reference or exhibits
thereto, unless requested);


(x)  deliver to (i) in the case of an Exchange
Offer, each Participating Broker-Dealer who submits a written request to the Company
and (ii) in the case of a Shelf Registration, each selling Holder and each of
the underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons reasonably may request; subject to the final paragraph of this
Section 6(c), each of the Issuers and Guarantors hereby consents to the use of
the Prospectus and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with the offering
and the sale of the Transfer Restricted Securities covered by the Prospectus or
any amendment or supplement thereto;


(xi)  in the case of a Shelf Registration, enter
into such agreements (including an underwriting agreement), and make such
customary representations and warranties, and take all such other customary and
appropriate actions in connection therewith in order to expedite or facilitate
the disposition of the Transfer Restricted Securities pursuant to any Shelf
Registration Statement contemplated by this Agreement, all to such extent as
may be reasonably requested by any Holder of Transfer Restricted Securities or
underwriter in connection with any sale or resale pursuant to any Shelf
Registration Statement contemplated by this Agreement; and whether or not an
underwriting agreement is entered into and whether or not the registration is
an Underwritten Registration, each of the Issuers and Guarantors shall:


(A)  to the extent reasonably requested, furnish to
the Initial Purchaser, each selling Holder and each underwriter, if any, in
such substance and scope as they may reasonably request and as are customarily
made by issuers to 


13





















 


underwriters in
primary underwritten offerings, upon the effectiveness of the Shelf
Registration Statement:


(1)  a certificate, dated the date of
effectiveness of the Shelf Registration Statement, signed by (y) the President
or any Vice President and (z) a principal financial or accounting officer of
each of the Issuers and Guarantors, confirming, as of the date thereof, the
matters set forth in paragraphs (i), (ii) and (iii) of Section 5(e) of the
Purchase Agreement and such other matters as such parties may reasonably
request;


(2)  an opinion, dated the date of effectiveness
of the Shelf Registration Statement, of counsel for the Issuers and the
Guarantors, covering the matters set forth in Section 5(c) of the Purchase
Agreement and such other matter as such parties may reasonably request; and


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


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


(C)  deliver such other documents and certificates
as may be reasonably requested by such parties and as are customarily delivered
in similar offerings to evidence compliance with Section 6(c)(xi)(A) hereof and
with any customary conditions contained in the underwriting agreement or other
agreement entered into by either of the Issuers or any of the Guarantors
pursuant to this Section 6(c)(xi), if any.


If at any time the
representations and warranties of the Issuers and the Guarantors contemplated
by the certificate furnished pursuant to Section 6(c)(xi)(A)(1) hereof cease to
be true and correct, the Issuers or the Guarantors shall so advise the Initial
Purchaser and the underwriter(s), if any, and each selling Holder promptly and,
if requested by such Persons, shall confirm such advice in writing;


(xii)  in the case of a Shelf Registration Statement,
prior to any public offering of Transfer Restricted Securities, use its
reasonable best efforts to cooperate with the selling Holders, the
underwriter(s), if any, and their respective counsel in connection with the
registration and qualification of the Transfer Restricted Securities under the
state securities or blue sky laws of such jurisdictions as the selling Holders
or underwriter(s), if any, may reasonably request in writing by the time the
Shelf Registration Statement is declared effective by the Commission, it being
agreed that no such registration or 


 


14





















 


qualification will
be made unless so requested and use its reasonable best efforts to do any and
all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however,
that none of the Issuers or the Guarantors shall be required to register or
qualify as a foreign corporation where it is not then so qualified or to take
any action that would subject it to the service of process in suits or to
taxation in any jurisdiction where it is not then so subject;


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


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


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


(xvi)  if any fact or event contemplated by Section
6(c)(iii)(D) hereof shall exist or have occurred, use its reasonable best
efforts to prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of Transfer Restricted Securities, the Prospectus will not
contain at the time of such delivery any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or will
remain so qualified and at such time as such public disclosure is otherwise
made or the Company determines that such disclosure is not necessary, in each
case to correct any misstatement of a material fact or to include any omitted
material fact, the Company agrees promptly to notify each Holder of such
determination;


(xvii)  provide a CUSIP number for all Exchange
Securities or Transfer Restricted Securities, as the case may be, not later
than the effective date of the Registration Statement covering such Securities
and provide the Trustee under the Indenture with any 


15





















 


necessary printed
certificates for such Securities which are in a form eligible for deposit with
the Depository Trust Company;


(xviii)  cooperate and assist in any filings required
to be made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any “qualified independent
underwriter”) that is required to be retained in accordance with the rules and
regulations of the NASD;


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


(xx)  cause the Indenture to be qualified under the
Trust Indenture Act not later than the effective date of the first Registration
Statement required by this Agreement, and, in connection therewith, cooperate
with the Trustee and the Holders of Securities to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the Trust Indenture Act; and to execute and use
its reasonable best efforts to cause the Trustee to execute, all documents that
may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner; and


(xxi)  cause all Securities covered by the
Registration Statement to be listed on each securities exchange or automated
quotation system on which similar securities issued by the Issuers are then
listed if reasonably requested by the Holders of a majority in aggregate
principal amount of Initial Securities or the managing underwriter(s), if any.


Each Holder agrees by acquisition of a Transfer
Restricted Security that, upon (i) receipt of any notice from the Company of
the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof,
or (ii) a Suspension Period, such Holder will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable Registration
Statement until such Holder’s receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is
advised in writing (the “Advice”) by the Company that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings that are incorporated by reference in the Prospectus.  If so directed by the Company, each Holder
will deliver to the Company (at such Holder’s expense) all copies, other than
permanent file copies then in such Holder’s possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice.  In the event the
Company shall give any such notice, the time period regarding the effectiveness
of such Registration Statement set forth in Section 3 or 4 hereof, as
applicable, shall be extended by the number of days during the period from and
including the date of the giving of such notice described in (i) or (ii) of
this paragraph to and including the date when each selling Holder 


 


16





















 


covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 6(c)(xvi) hereof or shall have
received the Advice.


SECTION
7.  Registration Expenses.


(a)  All
expenses incident to the Issuers’ and the Guarantors’ performance of or
compliance with this Agreement will be borne by the Issuers and the Guarantors,
jointly and severally, regardless of whether a Registration Statement becomes
effective, including, without limitation: (i) all registration and filing fees
and expenses (including filings made by the Initial Purchaser or any 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 the NASD)); (ii) all fees and expenses of compliance with
federal securities and state securities or blue sky laws; (iii) all expenses of
printing (including printing certificates for the Exchange Securities to be
issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of counsel for
the Issuers and the Guarantors and, subject to Section 7(b) hereof, the Holders
of Transfer Restricted Securities; (v) all application and filing fees in
connection with listing the Exchange Securities on a securities exchange or
automated quotation system pursuant to the requirements thereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Issuers and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).


Each of the Issuers and Guarantors will, in any event,
bear its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expenses of any annual audit and the fees and expenses of any Person,
including special experts, retained by the Issuers or the Guarantors.


(b)  In
connection with the Shelf Registration Statement required by this Agreement,
the Issuers and the Guarantors, jointly and severally, will reimburse the
Initial Purchaser and the Holders of Transfer Restricted Securities being
registered pursuant to the Shelf Registration Statement, for the reasonable
fees and disbursements of not more than one counsel, who shall be Fried, Frank,
Harris, Shriver & Jacobson LLP or such other counsel as may be chosen by
the Holders of a majority in principal amount of the Transfer Restricted
Securities for whose benefit such Registration Statement is being prepared.


Each Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder’s Transfer Restricted Securities pursuant to a Shelf Registration
Statement.


SECTION
8.  Indemnification.


(a)  Each of the
Issuers and Guarantors, jointly and severally, agrees to indemnify and hold
harmless (i) each Holder and (ii) each Person, if any, who controls (within the
meaning 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) being
hereinafter referred to as a “controlling person”) and (iii) the respective
officers, directors, partners, employees, representatives and agents of any
Holder or any controlling person (any Person referred to in clause (i), (ii) or
(iii) may hereinafter 


17





















 


be referred to as an “Indemnified
Holder”), to the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, judgments, actions and expenses (including,
without limitation, and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing, settling, compromising, paying or defending
any claim or action, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, including the reasonable fees and
expenses of any one firm of legal counsel to any Indemnified Holder), arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus (or any
amendment or supplement thereto), or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of an untrue statement or omission
or alleged untrue statement or omission that is made in reliance upon and in
conformity with information relating to any of the Holders furnished in writing
to the Company by any of the Holders expressly for use therein; and provided, further, that
this indemnity agreement shall not apply to any loss, claim, damage, liability
or expense arising from an offer or sale of Transfer Restricted Securities
occurring during a Suspension Period, if a notice of such Suspension Period was
given to and received by such Person. 
This indemnity agreement shall be in addition to any liability which the
Issuers and the Guarantors may otherwise have.


In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be brought or
asserted against any of the Indemnified Holders with respect to which indemnity
may be sought against the Issuers or the Guarantors, such Indemnified Holder
(or the Indemnified Holder controlled by such controlling person) shall
promptly notify the Issuers and the Guarantors in writing; provided,
however, that the failure to give such notice shall not relieve any
of the Issuers or the Guarantors of its obligations pursuant to this Agreement
to the extent it is not materially prejudiced as a proximate result of such
failure.  Each of the Issuers and
Guarantors may participate at its own expense in the defense of such
action.  Such Indemnified Holder shall
have the right to employ its own counsel in any such action and the fees and
expenses of such counsel shall be paid, as incurred, by the Issuers and the
Guarantors (regardless of whether it is ultimately determined that an
Indemnified Holder is not entitled to indemnification hereunder).  The Issuers and the Guarantors shall not,
collectively, in connection with any one such action or proceeding or separate
but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for such Indemnified Holders, which firm shall be
designated by the Holders.  The Issuers
and the Guarantors shall be liable for any settlement of any such action or
proceeding effected with the Issuers’ and the Guarantors’ prior written
consent, which consent shall not be withheld unreasonably, and each of the
Issuers and Guarantors agrees to indemnify and hold harmless any Indemnified
Holder from and against any loss, claim, damage, liability or expense by reason
of any settlement of any action effected with the written consent of the
Issuers and the Guarantors.  The Issuers
and the Guarantors shall not, without the prior written consent of each
Indemnified Holder, settle or compromise or consent to the entry of judgment in
or otherwise seek to terminate any pending or threatened action, claim,
litigation or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not any Indemnified Holder is a party
thereto), unless such settlement, compromise, consent or termination includes
an unconditional release of each Indemnified Holder from all liability arising
out of such action, claim, litigation or proceeding.


 


18





















 


(b)  Each Holder
of Transfer Restricted Securities agrees, severally and not jointly, to
indemnify and hold harmless the Issuers and the Guarantors and their respective
directors and officers who sign a Registration Statement, and any Person
controlling (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) any of the Issuers or Guarantors and the respective
officers, directors, partners, employees, representatives and agents of each
such Person, to the same extent as the foregoing indemnity from the Issuers and
the Guarantors to each of the Indemnified Holders, but only with respect to
claims and actions based on information relating to such Holder furnished in
writing by such Holder expressly for use in any Registration Statement. In case
any action or proceeding shall be brought against any of the Issuers or
Guarantors or their respective officers, directors, partners, employees,
representatives, agents or any such controlling person in respect of which
indemnity may be sought against a Holder of Transfer Restricted Securities,
such Holder shall have the rights and duties given to the Issuers and the
Guarantors, and the Issuers, the Guarantors and their respective officers,
directors, partners, employees, representatives, agents and such controlling
person shall have the rights and duties given to each Holder by the preceding
paragraph.


(c)  If the
indemnification provided for in this Section 8 is unavailable to an indemnified
party under Section 8(a) or (b) hereof (other than by reason of exceptions
provided in those Sections) in respect of any losses, claims, damages,
liabilities, judgments, actions or expenses referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers and the Guarantors, on the one hand, and the Holders, on the other
hand, from the Initial Placement (which in the case of the Issuers and the
Guarantors shall be deemed to be equal to the total gross proceeds to the
Issuers and the Guarantors from the Initial Placement), the amount of
Liquidated Damages which did not become payable as a result of the filing of
the Registration Statement resulting in such losses, claims, damages,
liabilities, judgments actions or expenses, and such Registration Statement, or
if such allocation is not permitted by applicable law, the relative fault of
the Issuers and the Guarantors, on the one hand, and the Holders, on the other
hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations.  The relative
fault of the Issuers and the Guarantors on the one hand and of the Indemnified
Holder on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Issuers and the Guarantors, on the one hand, or the Indemnified
Holders, on the other hand, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to 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 in connection with investigating or defending any action or claim.


The Issuers, the Guarantors and each Holder of
Transfer Restricted Securities agree that it would not be just and equitable if
contribution pursuant to this Section 8(c) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred 


19





















 


to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, none of the
Holders (and its related Indemnified Holders) shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the total
discount received by such Holder with respect to the Initial Securities exceeds
the amount of any damages which such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. The Holders’
obligations to contribute pursuant to this Section 8(c) are several in
proportion to the respective principal amount of Initial Securities held by
each of the Holders hereunder and not joint.


SECTION 9.  Rule 144A.  Each of the
Issuers and Guarantors
hereby agrees with each Holder, for so long as any Transfer Restricted
Securities remain outstanding, to make available to any Holder or beneficial
owner of Transfer Restricted Securities in connection with any sale thereof and
any prospective purchaser of such Transfer Restricted Securities from such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Securities Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A under the Securities Act.


SECTION 10.  Participation in Underwritten Registrations.  No Holder may participate in any Underwritten
Registration hereunder unless such Holder (a) agrees to sell such Holder’s
Transfer Restricted Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.


SECTION 11.  Selection of Underwriters.  The Holders of Transfer Restricted Securities covered
by the Shelf Registration Statement who desire to do so may sell such Transfer
Restricted Securities in an Underwritten Offering. In any such Underwritten
Offering, the investment banker(s) and managing underwriter(s) that will
administer such offering will be selected by the Company and shall be
reasonably acceptable to the Holders of a majority in aggregate principal
amount of such Transfer Restricted Securities included in such offering.


SECTION
12.  Miscellaneous.


(a)  Remedies. Each of
the Issuers and Guarantors hereby agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.


(b)  No Inconsistent Agreements.  Each of the Issuers and Guarantors
will not on or after the date of this Agreement enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with 


20





















 


the provisions
hereof.  The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of any of the Issuers’ or Guarantors’
securities under any agreement in effect on the date hereof.


(c)  Adjustments Affecting the Securities. 
The Company will not take any action, or permit any change to
occur, with respect to the Securities that would materially and adversely
affect the ability of the Holders to Consummate any Exchange Offer.


(d)  Amendments and Waivers.  The
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof may not be
given unless the 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
Restricted Securities and (ii) in the case of all other provisions hereof,
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities affected by such amendment,
modification, supplement, waiver, consent or departure.


(e)  Notices.  All notices
and other communications provided for or permitted hereunder shall be made in
writing by hand-delivery, first-class mail (registered or certified, return
receipt requested), telex, telecopier, or air courier guaranteeing overnight
delivery:


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


(ii)  if to the Company, Duane Reade GP or any of
the Guarantors:


	
   

  	
  Duane Reade Inc.

  
	
   

  	
  440 Ninth Avenue

  
	
   

  	
  New York, New
  York 10001

  
	
   

  	
  Facsimile: 212-594-0832

  
	
   

  	
  Attention:.

  	
   Michelle
  Bergman, Esq

  
	
   

  	
   

  	
  General Counsel

  



       With a copy to:


	
   

  	
  Paul, Weiss,
  Rifkind, Wharton & Garrison LLP

  
	
   

  	
  1285 Avenue of the Americas

  
	
   

  	
  New York, New
  York  10019

  
	
   

  	
  Facsimile:

  	
  212-757-3990

  
	
   

  	
  Attention:.

  	
  Lawrence G. Wee,
  Esq

  



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


Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person giving the same to
the Trustee at the address specified in the Indenture.


21





















 


(f)  Successors and Assigns.  This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties, including, without limitation, and without the
need for an express assignment, subsequent Holders of Transfer Restricted
Securities; provided, however, that this Agreement
shall not inure to the benefit of or be binding upon a successor or assign of a
Holder unless and to the extent such successor or assign acquired Transfer
Restricted Securities from such Holder. 
Nothing herein shall be deemed to permit any assignment, transfer or
other disposition of Transfer Restricted Securities in violation of the terms
of the Purchase Agreement or the Indenture.


(g)  Counterparts.  This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.


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


(i)  Governing Law.  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW RULES THEREOF.


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


(k)  Entire Agreement.  This
Agreement together with the Purchase Agreement, the Indenture, the Securities
and any related documents is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein.  There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by the
Issuers with respect to the Transfer Restricted Securities.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.


22





















 


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


	
   

  	
  Duane Reade
  Inc., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John K. Henry

  
	
   

  	
  Title:

  	
  Senior Vice
  President and

  
	
   

  	
   

  	
  Chief Financial
  Officer

  



 


	
   

  	
  Duane Reade, a New York general partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Duane Reade Inc., as general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John K. Henry

  
	
   

  	
  Title:

  	
  Senior Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  



 


	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  By: DRI I, Inc., as general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John K. Henry

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  



 





















 


	
   

  	
  Duane Reade Holdings, Inc., 

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John K. Henry

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  



 


	
   

  	
  DRI I, Inc., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John K. Henry

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  



 


	
   

  	
  Duane Reade International, Inc., a 

  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John K. Henry

  
	
   

  	
  Title:

  	
  Senior Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  



 


	
   

  	
  Duane Reade Realty, Inc., a 

  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John K. Henry

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  



 


 





















 


The foregoing
Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:


 


	
  BANC OF AMERICA SECURITIES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


623243