**EXHIBIT10.29**

Duane Reade Inc.

Duane Reade GP

and

The Guarantors namedherein

$ 50,000,000

Senior Secured FloatingRate Notes due 2010

Purchase Agreement

dated August 4, 2005

Banc of America SecuritiesLLC

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**Table of Contents**
| Section 1. |   | Representations and  Warranties                                                                                                                                                                                           | 2  |
|-----------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----|
| (a)             |   | No  Registration Required                                                                                                                                                                                                 | 2  |
| (b)             |   | No  Integration of Offerings or General Solicitation                                                                                                                                                                      | 2  |
| (c)             |   | Non-Fungibility                                                                                                                                                                                                           | 3  |
| (d)             |   | The Offering  Memorandum                                                                                                                                                                                                  | 3  |
| (e)             |   | The Purchase  Agreement                                                                                                                                                                                                   | 3  |
| (f)             |   | The  Registration Rights Agreement and DTC Agreement                                                                                                                                                                      | 3  |
| (g)             |   | Authorization  of the Securities and the Exchange Securities                                                                                                                                                              | 3  |
| (h)             |   | Authorization  of the Indenture                                                                                                                                                                                           | 4  |
| (i)             |   | Authorization  of the Collateral Documents and the Transactions                                                                                                                                                           | 4  |
| (j)             |   | Security  Interests                                                                                                                                                                                                       | 4  |
| (k)             |   | Description  of the Securities, the Exchange Securities, the Indenture, the Registration  Rights Agreement, the Collateral Documents, the Revolving Credit Agreement,  the Existing Notes and the Intercreditor Agreement | 5  |
| (l)             |   | No  Material Adverse Change                                                                                                                                                                                               | 5  |
| (m)             |   | Independent  Accountants                                                                                                                                                                                                  | 5  |
| (n)             |   | Preparation  of the Financial Statements                                                                                                                                                                                  | 5  |
| (o)             |   | Incorporation  and Good Standing of Holdings, the Company and its subsidiaries                                                                                                                                            | 6  |
| (p)             |   | Capitalization  and Other Capital Stock Matters                                                                                                                                                                           | 6  |
| (q)             |   | Non-Contravention  of Existing Instruments; No Further Authorizations or Approvals Required                                                                                                                          | 6  |
| (r)             |   | No  Material Actions or Proceedings                                                                                                                                                                                       | 7  |
| (s)             |   | Intellectual  Property Rights                                                                                                                                                                                             | 7  |
| (t)             |   | All  Necessary Permits, etc.                                                                                                                                                                                              | 8  |
| (u)             |   | Compliance  with Laws                                                                                                                                                                                                     | 8  |
| (v)             |   | Title  to Properties                                                                                                                                                                                                      | 10 |
| (w)             |   | Tax  Law Compliance                                                                                                                                                                                                       | 11 |
| (x)             |   | “Investment  Company”                                                                                                                                                                                           | 11 |
| (y)             |   | Insurance                                                                                                                                                                                                                 | 11 |
| (z)             |   | No  Price Stabilization or Manipulation                                                                                                                                                                                   | 11 |
| (aa)            |   | Solvency                                                                                                                                                                                                                  | 11 |
| (bb)            |   | Compliance  with Sarbanes-Oxley                                                                                                                                                                                           | 12 |
| (cc)            |   | MD&A                                                                                                                                                                                                                  | 12 |
| (dd)            |   | Related  Party Transactions                                                                                                                                                                                               | 12 |
| (ee)            |   | Company’s  Accounting System                                                                                                                                                                                         | 12 |
| (ff)            |   | Compliance  with Environmental Laws                                                                                                                                                                                       | 12 |
| (gg)            |   | ERISA  Compliance                                                                                                                                                                                                         | 13 |
| (hh)            |   | Compliance  with Regulation S                                                                                                                                                                                        | 13 |
| (ii)            |   | Taxes;  Fees                                                                                                                                                                                                              | 13 |
| (jj)            |   | No  Labor Disputes                                                                                                                                                                                                        | 13 |
| Section 2. |   | Purchase,  Sale and Delivery of the Securities                                                                                                                                                                            | 14 |
| (a)             |   | The  Securities                                                                                                                                                                                                           | 14 |
| (b)             |   | The  Closing Date                                                                                                                                                                                                         | 14 |
| (c)             |   | Delivery  of the Securities                                                                                                                                                                                               | 14 |
| (d)             |   | Delivery  of Offering Memorandum to the Initial Purchaser                                                                                                                                                                 | 14 |
| (e)             |   | Initial  Purchaser as Qualified Institutional Buyer                                                                                                                                                                       | 15 |
|                 |        |                                                                                                                                                                                                                           |    |  |

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| Section 3.  |   | Additional Covenants                                                                                             | 15 |
|------------------|--------|------------------------------------------------------------------------------------------------------------------|----|
| (a)              |   | Initial Purchaser’s Review  of Proposed Amendments and Supplements                                          | 15 |
| (b)              |   | Additional  Information, Amendments and Supplements to the Offering Memorandum and Other  Securities Act Matters | 15 |
| (c)              |   | Copies  of the Offering Memorandum                                                                               | 15 |
| (d)              |   | Blue  Sky Compliance                                                                                             | 15 |
| (e)              |   | Use  of Proceeds                                                                                                 | 16 |
| (f)              |   | The  Depositary                                                                                                  | 16 |
| (g)              |   | Additional  Issuer Information                                                                                   | 16 |
| (h)              |   | Agreement  Not To Offer or Sell Additional Securities                                                            | 16 |
| (i)              |   | No  Integration                                                                                                  | 16 |
| (j)              |   | Legended  Securities                                                                                             | 16 |
| (k)              |   | PORTAL                                                                                                           | 16 |
| (l)              |   | Security  Interests                                                                                              | 16 |
| Section 4.  |   | Payment of Expenses                                                                                              | 17 |
| Section 5.  |   | Conditions of the  Obligations of the Initial Purchaser                                                          | 17 |
| (a)              |   | Accountants’  Comfort Letter                                                                                | 18 |
| (b)              |   | No  Material Adverse Change or Ratings Agency Change                                                             | 18 |
| (c)              |   | Opinion  of Counsel for the Issuers and Guarantors                                                               | 18 |
| (d)              |   | Opinion  of Counsel for the Initial Purchaser                                                                    | 18 |
| (e)              |   | Officers’  Certificate                                                                                      | 18 |
| (f)              |   | Bring-down  Comfort Letter                                                                                       | 19 |
| (g)              |   | PORTAL  Listing                                                                                                  | 19 |
| (h)              |   | Other  Agreements                                                                                                | 19 |
| (i)              |   | Evidence  of Security Interest                                                                                   | 19 |
| (j)              |   | Evidence  of Insurance                                                                                           | 19 |
| (k)              |   | Additional  Documents                                                                                            | 19 |
| Section 6.  |   | Reimbursement  of Initial Purchaser’s Expenses                                                              | 20 |
| Section 7.  |   | Offer,  Sale and Resale Procedures                                                                               | 20 |
| Section 8.  |   | Indemnification                                                                                                  | 21 |
| (a)              |   | Indemnification  of the Initial Purchaser                                                                        | 21 |
| (b)              |   | Indemnification  of the Issuers, their Directors and Officers                                                    | 21 |
| (c)              |   | Notifications  and Other Indemnification Procedures                                                              | 22 |
| (d)              |   | Settlements                                                                                                      | 23 |
| Section 9.  |   | Contribution                                                                                                     | 23 |
| Section 10. |   | Termination  of this Agreement                                                                                   | 24 |
| Section 11. |   | Representations  and Indemnities to Survive Delivery                                                             | 24 |
| Section 12. |   | Notices                                                                                                          | 25 |
| Section 13. |   | Successors                                                                                                       | 25 |
| Section 14. |   | Partial  Unenforceability                                                                                        | 25 |
| Section 15. |   | Governing  Law Provisions                                                                                        | 25 |
| (a)              |   | Consent  to Jurisdiction                                                                                         | 25 |
| Section 16. |   | No  Advisory or Fiduciary Responsibility                                                                         | 26 |
| Section 17. |   | General  Provisions                                                                                              | 26 |
|                  |        |                                                                                                                  |    |  |

 

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**Purchase Agreement**

**August 4, 2005**

BANC OF AMERICA SECURITIESLLC9 West 57th StreetNew York, New York 10019

Ladies and Gentlemen:

*Introductory.*   DuaneReade Inc., a Delaware corporation (the “Company”) and Duane Reade, a New Yorkgeneral partnership and subsidiary of the Company (“Duane Reade GP”, andtogether with the Company, the “Issuers”) propose to issue and sell to Banc ofAmerica Securities LLC (the “Initial Purchaser”) $50,000,000 aggregateprincipal amount of the Issuers’ Senior Secured Floating Rate Notes due 2010(the “Notes”). The Notes will be the joint and several obligations of each ofthe Issuers.

The payment of principal, premium and LiquidatedDamages (as defined in the Indenture (as defined below)), if any, and intereston the Notes and the Exchange Notes (as defined in the Offering Memorandum (asdefined below)), will be fully and unconditionally guaranteed on a seniorsecured basis, jointly and severally, by Duane Reade Holdings, Inc., aDelaware corporation (“Holdings”) and all the existing and future direct andindirect domestic subsidiaries of the Company (other than Duane Reade GP), andany subsidiary of the Company formed or acquired after the Closing Date (asdefined in Section 2) that executes an additional guarantee in accordancewith the terms of the Indenture, and their respective successors and assigns(collectively, the “Guarantors”), pursuant to their guarantees (the “Guarantees”).The Notes and the Guarantees thereof are herein collectively referred to as the“Securities”; and the Exchange Notes and the Guarantees attached thereto areherein collectively referred to as the “Exchange Securities.”

The Issuers have prepared and will deliver to theInitial Purchaser copies of the final Offering Memorandum, dated on orabout the date hereof, describing the terms of the Securities, for use by theInitial Purchaser in connection with its solicitation of offers to purchase theSecurities. As used herein, the “Offering Memorandum” shall mean, with respectto any date or time referred to in this Agreement, the Issuers’ final OfferingMemorandum, dated on or about the date hereof, including amendments orsupplements thereto and any exhibits thereto, in the most recent form that hasbeen prepared and delivered by the Issuers to the Initial Purchaser inconnection with its solicitation of offers to purchase Securities and allinformation incorporated therein by reference. Further, any reference to theOffering Memorandum shall be deemed to refer to and include any AdditionalIssuer Information (as defined in Section 3) furnished by the Issuersprior to the completion of the distribution of the Securities.

The Securities will be issued pursuant to theindenture, dated as of December 20, 2004 (the “Indenture”), among theIssuers, U.S. Bank National Association, as trustee (the “Trustee”) and theGuarantors. Securities issued in book-entry form will be issued in the name ofCede & Co., as nominee of The Depository Trust Company (the “Depositary”)pursuant to a DTC blanket issuer letter of representations (the “DTC Agreement”),among the Issuers and the Depositary.

Concurrently with the issuance of the Securities, theIssuers and the Guarantors will use the proceeds of the issuance of the Notesto permanently repay part of the borrowings under the Credit Agreement, datedas of July 21, 2003, as amended by Amendment No. 1 thereto, dated July 22,2004, and Amendment No. 2 thereto, dated August 9, 2005, among theIssuers, the Guarantors, and the agents and lenders thereunder (the “RevolvingCredit Agreement”) and for other purposes described under the caption “Use ofProceeds” in the Offering Memorandum (collectively, the “Refinancing”).

The holders of the Securities and their direct andindirect transferees will also be entitled to the benefit of security interests(“Liens”) in various personal property and other assets (the “Collateral”) 

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granted under the Amendedand Restated Security Agreement among the Issuers, the Guarantors and thecollateral agent named thereunder (the “Collateral Agent”), and the PledgeAgreement, among the same parties, in each case, dated as of December 20,2004 (collectively, the “Security Agreements”), and the other collateraldocuments related thereto (the “Other Collateral Documents”). All of theaforementioned Liens will be subject to the terms of the IntercreditorAgreement, dated as of July 30, 2004, between the Collateral Agent and thecollateral agent for lenders under the Revolving Credit Agreement (as amended,restated, supplemented or modified from time to time, the “IntercreditorAgreement”). Together, the Security Agreements and the Other CollateralDocuments are referred to herein as the “Collateral Documents.” The issuanceand sale of the Securities, the Refinancing and all related transactions arehereinafter referred to collectively as the “Transactions,” and documentsexecuted in connection therewith are referred to collectively as the “TransactionDocuments.”

The holders of the Securities will be entitled to thebenefits of a registration rights agreement, to be dated as of the Closing Date(the “Registration Rights Agreement”), among the Issuers, the Guarantors andthe Initial Purchaser.

Each of the Issuers understands that the InitialPurchaser proposes to make an offering of the Securities on the terms and in themanner set forth herein and in the Offering Memorandum and agrees that theInitial Purchaser may resell, subject to the conditions set forth herein, allor a portion of the Securities to purchasers (the “Subsequent Purchasers”) atany time after the date of this Agreement. The Securities are to be offered andsold to or through the Initial Purchaser without being registered with theSecurities and Exchange Commission (the “Commission”) under the Securities Actof 1933 (as amended, the “Securities Act,” which term, as used herein, includesthe rules and regulations of the Commission promulgated thereunder), inreliance upon exemptions therefrom. The terms of the Securities and theIndenture will require that investors who acquire Securities expressly agree thatSecurities may only be resold or otherwise transferred, after the date hereof,if such Securities are registered for sale under the Securities Act or if anexemption from the registration requirements of the Securities Act is available(including the exemptions afforded by Rule 144A (“Rule 144A”) orRegulation S (“Regulation S”) thereunder).

The Issuers and the Guarantors hereby confirm theiragreement with the Initial Purchaser as follows:

SECTION 1.*   Representationsand Warranties.**  *TheIssuers and Guarantors hereby represent, warrant and covenant, jointly andseverally, to the Initial Purchaser as follows:

(a)        *No Registration Required*.   Subject to compliance by theInitial Purchaser with the representations, warranties and covenants set forthin Section 2 and Section 7 hereof, it is not necessary in connectionwith the offer, sale and delivery of the Securities to the Initial Purchaserand to each Subsequent Purchaser in the manner contemplated by this Agreementand the Offering Memorandum to register the offer, issuance and sale of theSecurities under the Securities Act or, until such time as the ExchangeSecurities are issued pursuant to an effective registration statement, toqualify the Indenture under the Trust Indenture Act of 1939 (the “Trust IndentureAct,” which term, as used herein, includes the rules and regulations ofthe Commission promulgated thereunder).

(b)        *No Integration of Offerings or General Solicitation*.   None of the Issuers, theGuarantors or any of their respective subsidiaries or affiliates (as such termis defined in Rule 501 under the Securities Act (each, an “Affiliate”))have, directly or indirectly, solicited any offer to buy or offered to sell,and will not, directly or indirectly, solicit any offer to buy or offer tosell, in the United States or to any United States citizen or resident, anysecurity which is or would be integrated with the sale of the Securities in amanner that would require the offer, issuance and sale of the Securities to beregistered under the Securities Act. None of the Issuers, the Guarantors, anyof their subsidiaries or Affiliates, or any person acting on its or any oftheir behalf (other than the Initial Purchaser, as to whom the Issuers and the 

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Guarantorsmake no representation or warranty) has engaged or will engage, in connectionwith the offering of the Securities, in any form of general solicitation orgeneral advertising within the meaning of Rule 502 under the SecuritiesAct. With respect to those Securities soldin reliance upon Regulation S, (i) none of the Issuers, the Guarantors, any of their subsidiaries orAffiliates or any person acting on its or any of their behalf (other than theInitial Purchaser, as to whom the Issuers and the Guarantors make no representation or warranty) has engaged orwill engage in any directed selling efforts within the meaning ofRegulation S and (ii) the Issuers, the Guarantors, any of theirsubsidiaries or Affiliates and any person acting on its or their behalf (otherthan the Initial Purchaser, as to whom the Issuers and the Guarantorsmake norepresentation or warranty) have complied and will comply with the offeringrestrictions set forth in Regulation S.

(c)        *Non-Fungibility*.   The Securities are eligiblefor resale pursuant to Rule 144A and will not be, at the Closing Date, ofthe same class as, within the meaning of Rule 144A, securities listed on anational securities exchange registered under Section 6 of the ExchangeAct or quoted in a U.S. automated interdealer quotation system.

(d)        *The Offering Memorandum*.   The Offering Memorandum did not, as of its date and willnot, as of the Closing Date, include an untrue statement of a material fact oromit to state a material fact necessary in order to make the statementstherein, in the light of the circumstances under which they were made, notmisleading; *provided* that thisrepresentation, warranty and agreement shall not apply to statements in oromissions from the Offering Memorandum made in reliance upon and in conformitywith information furnished to the Company in writing by the Initial Purchaserexpressly for use in the Offering Memorandum. The Offering Memorandum, as ofits date, contains all the information specified in, and meeting therequirements of, Rule 144A in all material respects. Neither of theIssuers has distributed, and the Issuers will not distribute, prior to thelater of the Closing Date and the completion of the Initial Purchaser’sdistribution of the Securities, any offering material in connection with theoffering and sale of the Securities other than the Offering Memorandum.

(e)        *The Purchase Agreement.  *ThisAgreement has been duly authorized, executed and delivered by each of theIssuers and Guarantors.

(f)         *The Registration Rights Agreement and DTC Agreement*.

(i)         The Registration Rights Agreement has been dulyauthorized by the Issuers and the Guarantors and, at the Closing Date, will beduly executed and delivered by, and, assuming due authorization, execution, anddelivery by each other party thereto, will constitute a valid and bindingagreement of, the Issuers and the Guarantors, enforceable against each suchparty in accordance with its terms, except as the enforcement thereof may besubject to bankruptcy, insolvency, reorganization, fraudulent conveyance ortransfer, moratorium or similar laws affecting creditors’ rights generally andsubject to general principles of equity (regardless of whether enforceabilityis considered in a proceeding in equity or at law) and except as rights toindemnification under the Registration Rights Agreement may be limited byapplicable law.

(ii)       The DTC Agreement has been duly authorized, executedand delivered by, and is a valid and binding agreement of, each of the Issuers,enforceable against each of the Issuers in accordance with its terms, except asthe enforcement thereof may be subject to bankruptcy, insolvency,reorganization, fraudulent conveyance or transfer, moratorium or similar lawsaffecting creditors’ rights generally and subject to general principles ofequity (regardless of whether enforceability is considered in a proceeding inequity or at law).

(g)        *Authorizationof the Securities and the Exchange Securities*.   (i) The Notes to be purchased by the InitialPurchaser from the Issuers are in the form contemplated by the Indenture, havebeen duly authorized for issuance and sale pursuant to this Agreement and theIndenture and, at the Closing Date, 

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will havebeen duly executed by the Issuers and, when authenticated in the mannerprovided for in the Indenture and delivered against payment of the purchaseprice therefor, will constitute valid and binding agreements of each of theIssuers, enforceable in accordance with their terms, except as the enforcementthereof may be subject to bankruptcy, insolvency, reorganization, fraudulentconveyance or transfer, moratorium or similar laws affecting creditors’ rightsgenerally and subject to general principles of equity (regardless of whetherenforceability is considered in a proceeding in equity or at law) and will beentitled to the benefits of the Indenture. (ii) The Exchange Notes havebeen duly and validly authorized for issuance by each of the Issuers, and whenissued and authenticated in accordance with the terms of the Indenture, theRegistration Rights Agreement and the Exchange Offer, will constitute valid andbinding obligations of each of the Issuers, enforceable against each of theIssuers in accordance with their terms, except as the enforcement thereof maybe subject to bankruptcy, insolvency, reorganization, fraudulent conveyance ortransfer, moratorium or similar laws affecting creditors’ rights generally andsubject to general principles of equity (regardless of whether enforceabilityis considered in a proceeding in equity or at law) and will be entitled to thebenefits of the Indenture. (iii) The Guarantees of the Notes and theExchange Notes are in the respective forms contemplated by the Indenture, havebeen duly authorized for issuance and sale pursuant to this Agreement and theIndenture and, at the Closing Date, will have been duly executed by each of theGuarantors and, when the Notes have been authenticated in the manner providedfor in the Indenture and delivered against payment of the purchase pricetherefor, will constitute valid and binding agreements of each such Guarantor,enforceable against it in accordance with their terms, except as theenforcement thereof may be subject to bankruptcy, insolvency, reorganization,fraudulent conveyance or transfer, moratorium or similar laws affectingcreditors’ rights generally and subject to general principles of equity(regardless of whether enforceability is considered in a proceeding in equityor at law) and will be entitled to the benefits of the Indenture.

(h)        *Authorization of the Indenture*.   The Indenture has been duly authorized by each of theIssuers and Guarantors and has been duly executed and delivered by each of theIssuers and the Guarantors and constitutes a valid and binding agreement ofeach of the Issuers and Guarantors enforceable against each of the Issuers andGuarantors in accordance with its terms, except as the enforcement thereof maybe subject to bankruptcy, insolvency, reorganization, fraudulent conveyance ortransfer, moratorium or similar laws affecting creditors’ rights generally andsubject to general principles of equity (regardless of whether enforceabilityis considered in a proceeding in equity or at law).

(i)         *Authorization of theCollateral Documents and the Transactions*.   Each of the CollateralDocuments has been authorized by the Issuers and Guarantors that areparty thereto, and has been duly executed and delivered by the Issuers and theGuarantors, and constitutes valid and binding agreements of each of the Issuersand Guarantors party thereto, enforceable against each of the Issuers andGuarantors party thereto, in accordance with their respective terms, except asthe enforcement thereof may be subject to bankruptcy, insolvency,reorganization, fraudulent conveyance or transfer, moratorium or similar lawsaffecting creditors’ rights generally and subject to general principles ofequity (regardless of whether enforceability is considered in a proceeding inequity or at law). Each of the Transactions has been authorized by the Issuersand Guarantors that are party thereto.

(j)         *Security Interests*.   The Collateral Documents areeffective to create, and have created, in favor of the Collateral Agent for thebenefit of the Collateral Agent and will create, in favor of the holders of theSecurities and the Exchange Securities (upon issuance of such Securities andExchange Securities as contemplated hereby), legal, valid and enforceable Lienson or in all of the Collateral, and such Liens comprise a valid and perfectedlien in Collateral consisting of personal property, having the respectivepriorities set forth in the Offering Memorandum, but nevertheless, on theClosing Date, superior to and prior to the rights of all third persons otherthan holders of Permitted Liens (as defined in the Indenture), and subject tono other Liens except for Liens permitted under the Indenture.

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(k)        *Description of the Securities, the ExchangeSecurities, the Indenture, the Registration Rights Agreement, the CollateralDocuments, the Revolving Credit Agreement, the Existing Notes and theIntercreditor Agreement.*   The Notes, the Guarantees of the Notes,the Indenture, the Registration Rights Agreement, each of the CollateralDocuments, the Revolving Credit Agreement, the Existing Notes (as defined inthe Offering Memorandum) and the Intercreditor Agreement conform, or willconform, in all material respects to the respective descriptions thereofcontained in the Offering Memorandum. The Exchange Notes and the Guarantees ofthe Exchange Notes will conform in all material respects to the respectivedescriptions thereof contained in the Offering Memorandum.

(l)         *No Material AdverseChange*.   Exceptas otherwise disclosed in the Offering Memorandum, subsequent to the respectivedates as of which information is given in the Offering Memorandum: (i) therehas been no material adverse change, or any development that could reasonablybe expected to result in a material adverse change, in the condition, financialor otherwise, or in the earnings, business or operations, whether or notarising from transactions in the ordinary course of business, of the Issuers,the Guarantors and their respective subsidiaries, considered as one entity (anysuch change or development is called a “Material Adverse Change”); (ii) theIssuers, the Guarantors and their respective subsidiaries, considered as oneentity, have not incurred any material liability or obligation, indirect,direct or contingent, not in the ordinary course of business nor entered intoany material transaction or agreement not in the ordinary course of business;and (iii) there has been no dividend or distribution of any kind declared,paid or made by the Issuers, the Guarantors or their respective subsidiaries,except for dividends paid to Issuers, the Guarantors or any of their respectivesubsidiaries, on any class of capital stock or repurchase or redemption by theIssuers, the Guarantors or any of their respective subsidiaries of any class ofcapital stock.

(m)      *Independent Accountants*.   PricewaterhouseCoopers LLP,who have expressed their opinion with respect to the financial statements(which term as used in this Agreement includes the related notes thereto)included in the Offering Memorandum, are, to the knowledge of the Company,independent public or certified public accountants within the meaning ofRegulation S-X under the Securities Act and the Exchange Act, and anynon-audit services provided by PricewaterhouseCoopers LLP to either of theIssuers or any of the Guarantors have been approved by the Audit Committee ofthe Board of Directors of the Company.

(n)        *Preparation of the Financial Statements*.   Except as stated therein, thefinancial statements, together with the related schedules and notes, includedin the Offering Memorandum present fairly in all material respects theconsolidated financial position of the Company and its subsidiaries as of andat the dates indicated and the results of their operations and cash flows forthe periods specified. Such financial statements have been prepared inconformity with generally accepted accounting principles in the United Statesapplied on a consistent basis throughout the periods involved, except asdisclosed therein. Except as statedtherein, the pro forma financial statements and other pro forma and asadjusted information presented in the Offering Memorandum present fairly theinformation shown therein, have been prepared in accordance with Article 11of Regulation S-X with respect to pro forma financial statements and have beenproperly compiled on the basis described therein, and the assumptions used inthe preparation thereof are reasonable and the adjustments used therein areappropriate to give effect to the transactions and circumstances referred totherein. Except as stated therein, thefinancial statements and the financial information included in the OfferingMemorandum comply as to form with the requirements applicable to financial statements required in aregistration statement on Form S-1 under the Securities Act. Thefinancial data set forth in the Offering Memorandum under the captions “Summary—SummaryHistorical Financial Information and Statistical Data” and “SelectedConsolidated Financial and Operating Data” fairly present in all materialrespects the information set forth therein on a basis consistent with that ofthe audited financial statements contained in the Offering Memorandum. The financialdata set forth in the Offering Memorandum under the captions “Summary—SummaryUnaudited Pro Forma Financial 

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Informationand Statistical Data” fairly present the information set forth therein on abasis consistent with that of the pro forma financial statements contained inthe Offering Memorandum.

(o)        *Incorporation and Good Standing of Holdings,the Company and its subsidiaries*.   Each of Holdings, the Company and its subsidiaries hasbeen duly incorporated or formed and is validly existing as a corporation orpartnership, as the case may be, in good standing under the laws of thejurisdiction of its incorporation or formation and has corporate orpartnership, as the case may be, power and authority to own, lease and operateits properties and to conduct its business as described in the OfferingMemorandum and, in the case of each of the Issuers and Guarantors partythereto, to enter into and perform its respective obligations under each ofthis Agreement, the Registration Rights Agreement, the DTC Agreement, theSecurities, the Exchange Securities, the Indenture, each of the CollateralDocuments and the Intercreditor Agreement, as the case may be. Each ofHoldings, the Company and its subsidiaries is duly qualified as a foreigncorporation or partnership, as the case may be, to transact business and is ingood standing in each jurisdiction in which such qualification is required, whetherby reason of the ownership or leasing of property or the conduct of business,except for such jurisdictions where the failure to so qualify or to be in goodstanding would not, individually or in the aggregate, result in a MaterialAdverse Change.

(p)        *Capitalizationand Other Capital Stock Matters*.   At June 25, 2005, on a historical basis, and on anas adjusted basis, after giving effect to the Transactions, the Company wouldhave an authorized and outstanding capitalization as set forth in the OfferingMemorandum under the caption “Capitalization” (other than for subsequentissuances of capital stock, if any, pursuant to employee benefit plansdescribed in the Offering Memorandum or upon exercise of outstanding optionsdescribed in the Offering Memorandum). All of the outstanding shares of capitalstock of the Company have been duly authorized and validly issued, are fullypaid and nonassessable and have been issued in compliance with federal andstate securities laws. None of the outstanding shares of Common Stock of theCompany were issued in violation of any preemptive rights, rights of firstrefusal or other similar rights to subscribe for or purchase securities of theCompany. There are no authorized or outstanding options, warrants, preemptiverights, rights of first refusal or other rights to purchase, or equity or debtsecurities convertible into or exchangeable or exercisable for, any capitalstock of the Company or any of its subsidiaries other than those accuratelydescribed in the Offering Memorandum. All of the issued and outstanding capitalstock or partnership interests of each subsidiary of the Company has been dulyauthorized and validly issued, is fully paid and nonassessable and is owned bythe Company, directly or through subsidiaries, free and clear of any securityinterest, mortgage, pledge, lien, encumbrance or claim (other than any transfer restrictions imposedby the Securities Act, the securities or Blue Sky laws of certain jurisdictionsand any security interest pursuant to agreements described in the OfferingMemorandum). The Company does not own or control, directly orindirectly, any corporation, association or other entity other than thesubsidiaries listed in Exhibit A hereto.

(q)        *Non-Contravention of Existing Instruments;No Further Authorizations or Approvals Required*.   Except as otherwise disclosed in the OfferingMemorandum, none of the Issuers, Guarantors or any of their respectivesubsidiaries is in violation of its charter, by-laws or similarconstitutive document or is in default (or, with the giving of notice or lapseof time, would be in default) (“Default”) under any indenture, mortgage, loanor credit agreement, note, contract, franchise, lease, license or otherinstrument to which either of the Issuers, any of the Guarantors or any oftheir respective subsidiaries is a party or by which it or any of them may bebound (including, without limitation, the Revolving Credit Agreement, theIndenture, the Intercreditor Agreement and the Existing Notes) or to which anyof the property or assets of either of the Issuers, any of the Guarantors orany of their respective subsidiaries is subject (each, an “Existing Instrument”),except for such Defaults as would not, individually or in the aggregate, resultin a Material Adverse Change. Except as set forth in the Offering Memorandum,and assuming the accuracy of, and the Initial Purchaser’s compliance with, therepresentations, warranties and agreements of the Initial 

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Purchaserset forth in Sections 2 and 7 of this Agreement, and the compliance by theholders of the Securities with the offering and transfer restrictions set forthin the Offering Memorandum, the execution, delivery and performance of thisAgreement, the Registration Rights Agreement and the Securities by each Issuerand each Guarantor party thereto, the Issuers’ performance of the DTCAgreement, and the issuance and delivery of the Securities or the ExchangeSecurities, and consummation of the transactions contemplated hereby andthereby and by the Offering Memorandum (i) will not result in anyviolation of the provisions of the charter, by-laws, partnershipagreement, operating agreement or other similar constitutive document of eitherof the Issuers, any of the Guarantors or any of their respective subsidiaries, (ii) willnot conflict with or constitute a breach of, or Default or a Debt RepaymentTriggering Event (as defined below) under, or result in the creation orimposition of any lien, charge or encumbrance (other than Liens grantedpursuant to the Collateral Documents) upon any property or assets of either ofthe Issuers, any of the Guarantors or any of their respective subsidiariespursuant to, or require the consent of any other party to, any ExistingInstrument, except for such conflicts, breaches, Defaults, liens, charges orencumbrances as would not, individually or in the aggregate, result in aMaterial Adverse Change, and (iii) will not result in any violation of anylaw, administrative regulation or administrative or court decree applicable toeither of the Issuers, any of the Guarantors or any of their respectivesubsidiaries. Assuming the accuracy of the representations and warranties ofthe Initial Purchaser in Sections 2 and 7 of this Agreement, no consent,approval, authorization or other order of, or registration or filing with, anycourt or other governmental or regulatory authority or agency (collectively, “Consents”),is required for the Issuers’ and the Guarantors’ execution, delivery andperformance (as applicable) of this Agreement, the Registration RightsAgreement, the DTC Agreement, the Indenture, any of the Collateral Documents orthe Intercreditor Agreement, to which either of the Issuers or any of theGuarantors is a party, or the issuance and delivery of the Securities or theExchange Securities, or consummation of the transactions contemplated herebyand thereby and by the Offering Memorandum, except (A) such Consents ashave been or will be obtained or made on or prior to the Closing Date; and (B) registrationof the Exchange Offer or resale of the Notes under the Securities Act pursuantto the Registration Rights Agreement, and qualification of the Indenture underthe Trust Indenture Act, in connection with the issuance of the Exchange Notes.As used herein, a “Debt Repayment Triggering Event” means any event orcondition which gives, or with the giving of notice or lapse of time wouldgive, the holder of any note, debenture or other evidence of indebtedness (orany person acting on such holder’s behalf) the right to require the repurchase,redemption or repayment of all or a portion of such indebtedness by theIssuers, the Guarantors or any of their respective subsidiaries.

(r)        *No MaterialActions or Proceedings*.   Exceptas otherwise disclosed in the Offering Memorandum, there are no known legal orgovernmental actions, suits, investigations or proceedings pending or, toeither of the Issuers’ or any of the Guarantors’ knowledge, threatened againsteither of the Issuers, any of the Guarantors or any of their respectivesubsidiaries, or the officers, directors or agents (as defined in 42 C.F.R. Part 420Subpart C and 42 C.F.R. Section 1001.1001(a)(2)) of either of the Issuers,any of the Guarantors or any of their respective subsidiaries, which has as thesubject thereof any property owned or leased by, either of the Issuers, any ofthe Guarantors or any of their respective subsidiaries, where in any such casethere is a reasonable possibility that such action, suit or proceeding might bedetermined adversely to such Issuer, such Guarantor or such subsidiary and anysuch action, suit, investigation or proceeding, if so determined adversely,would reasonably be expected to result in a Material Adverse Change ormaterially adversely affect the consummation of the transactions contemplatedby this Agreement.

(s)        *Intellectual Property Rights*.   The Issuers, the Guarantorsand their respective subsidiaries own, possess or license sufficienttrademarks, trade names, patent rights, copyrights, licenses, approvals, tradesecrets and other similar rights (collectively, “Intellectual Property Rights”)reasonably necessary to conduct their businesses as now conducted, except wherethe failure to own, possess or license such Intellectual Property Rights,individually or in the aggregate, would not reasonably be expected to result in

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a MaterialAdverse Change. None of the Issuers, the Guarantors or any of their respectivesubsidiaries has received any written notice of infringement or conflict withasserted Intellectual Property Rights of others, which infringement orconflict, if the subject of an unfavorable decision, ruling or filing would reasonably be expected to result in aMaterial Adverse Change. None of the Issuers, the Guarantors or any of theirrespective subsidiaries is in default under the terms of any license or similaragreement related to any Intellectual Property Rights necessary to conducttheir business as now conducted or contemplated except as would not reasonablybe expected to result in a Material Adverse Change.

(t)         *All Necessary Permits, etc.*

(i)         Exceptas otherwise disclosed in the Offering Memorandum, the Issuers, the Guarantorsand their respective subsidiaries possess such valid and current franchises,grants, easements, variances, exceptions, certificates, certifications,registrations, authorizations, qualifications, licenses, permits, consents orapprovals (including pharmacy licenses, Medicare and Medicaid provideragreements, accreditations and other similar documentation, or approvals of anyhealth departments) and other permits of any Governmental Entity (“Permits”)necessary to conduct their respective businesses except for those CompanyPermits the failure to possess would not reasonably be expected, eitherindividually or in the aggregate, to result in a Material Adverse Change(collectively, the “Company Permits”), and none of the Issuers, the Guarantorsor any of their respective subsidiaries has received any notice of proceedingsrelating to the revocation, suspension, cancellation, or modification of, ornon-compliance with, any of the Company Permits which, singly or in theaggregate, if the subject of an unfavorable decision, ruling or finding, wouldreasonably be expected to result in a Material Adverse Change.

(ii)       TheIssuers, the Guarantors and each of their respective subsidiaries that directlyor indirectly receive reimbursement or payments under Titles XVIII and XIX ofthe Social Security Act (the “Medicare and Medicaid programs”) are certifiedfor participation and reimbursement under the Medicare and Medicaid programs. TheIssuers, the Guarantors and each of their respective subsidiaries that directlyor indirectly receive reimbursement or payments under the Medicare and Medicaidprograms, the CHAMPUS and TRICARE programs and such other similar federal,state or local reimbursement or governmental programs, (collectively, the “GovernmentPrograms”), have current provider numbers and provider agreements requiredunder such Government Programs. The Issuers, the Guarantors and each of theirrespective subsidiaries that directly or indirectly receive payments under anynon-governmental program, including any private insurance program(collectively, the “Private Programs”), have all provider agreements andprovider numbers that are required under such Private Programs.

(u)        *Compliance with Laws.*

(i)         Exceptas otherwise disclosed in the Offering Memorandum, none of the Issuers, theGuarantors, each of their respective subsidiaries or any of their respectivedirectors, officers, managers, employees or agents, is, and during the past twoyears has not been, in conflict with, or in default or violation of, (A) anydomestic or foreign laws, statutes, ordinances, rules, regulations, codes orexecutive orders enacted, issued, adopted, promulgated or applied by any Governmental Entity (defined below) (“Laws”) applicableto the Issuers, the Guarantors or each of their respective subsidiaries or bywhich any of their respective assets or properties is bound or (B) anyCompany Permits, except, in the case of each (A) and (B), as would notreasonably be expected, individually or in the aggregate, to result in aMaterial Adverse Change. Except as otherwise disclosed in the OfferingMemorandum, no violation, default, order, judgment, injunction, award, decreeor writ handed down, adopted or imposed by any domestic or foreign, international, national, federal, state,provincial or local governmental, regulatory or administrative authority,agency, commission, court, tribunal, arbitral body or self-regulated entity(each, a “Governmental 

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Entity”)or legal action, claim,demand, arbitration, hearing, charge, complaint, investigation, examination,indictment, litigation, suit or other civil, criminal, administrative orinvestigative proceeding exists with respect to the aforementionedCompany Permits, Medicare or Medicaid certifications, provider agreements orprovider numbers (collectively, “Company Regulatory Authorizations”), except aswould not reasonably be expected, individually or in the aggregate, to resultin a Material Adverse Change. Neither the Issuers, the Guarantors, or each oftheir respective subsidiaries has received any written or oral notice of anypending and unresolved (or, if resolved, without material liability orobligation of any kind, whether accrued, contingent, absolute, inchoate orotherwise, whether due or to become due and whether known or unknown to theIssuers, the Guarantors or each of their respective subsidiaries) violation orof any investigation or inquiry into an alleged or suspected violation of anyLaw or of any of the Company Regulatory Authorizations that would reasonably beexpected, individually or in the aggregate, to result in a Material AdverseChange. To the knowledge of the Issuers, the Guarantors and each of theirrespective subsidiaries, no event has occurred that, with the giving of notice,the passage of time, or both, would constitute grounds for a material violationor order with respect to any such Company Regulatory Authorizations, or torevoke, withdraw or suspend any such Company Regulatory Authorizations, or toterminate the participation of the Issuers, the Guarantors or each of theirrespective subsidiaries in any Government Program or Private Program thatwould, individually or in the aggregate, reasonably be expected to result in aMaterial Adverse Change.

(ii)       To theknowledge of the Issuers, the Guarantors and each of their respectivesubsidiaries, since January 1, 2001, none of the Issuers, the Guarantors,each of their respective subsidiaries or any officer, professional employee orcontractor of the Issuers, the Guarantors or each of their respectivesubsidiaries (during the term of such individual’s employment by either of theIssuers or any of the Guarantors, as the case may be, or while acting as anagent of either of the Issuers or any of the Guarantors, as the case may be) orAffiliates has been convicted of any crime, or knowingly engaged in anyconduct, for which debarment or similar punishment is mandated or permitted byany applicable Law. None of the Issuers, the Guarantors, each of theirrespective subsidiaries or any officer, director or managing employee of theIssuers, the Guarantors or each of their respective subsidiaries and no personproviding professional services in connection with the operations of theIssuers, the Guarantors or each of their respective subsidiaries has engaged inany activities that are prohibited, or cause for the imposition of penalties ormandatory or permissive exclusion, under 42 U.S.C. §§ 1320a-7, 1320a-7a,1320a-7b, 1395nn or 1396b, 31 U.S.C. §§ 3729-3733, or thefederal CHAMPUS/TRICARE statute (or other federal or state statutes related tofalse or fraudulent claims) or the regulations promulgated thereunder pursuantto such Laws or related Laws, or under any criminal Laws relating to healthcare services or payments, or that are prohibited by rules of professionalconduct except such activities as would not, individually or in the aggregate,reasonably be expected to result in a Material Adverse Change.

(iii)      Exceptas otherwise disclosed in the Offering Memorandum, since January 1, 2001,the Issuers, the Guarantors and each of their respective subsidiaries havetimely filed all reports and billings required to be filed prior to the datehereof with respect to the Government Programs and Private Programs, all fiscalintermediaries and other insurance carriers and all such reports and billingsare complete and accurate in all material respects and have been prepared incompliance in all material respects with all applicable Laws, regulations,rules, manuals and guidance governing reimbursement and claims, except wherethe failure to file in a timely manner would not reasonably be expected,individually or in the aggregate, to result in a Material Adverse Change. Exceptas otherwise disclosed in the Offering Memorandum, the Issuers, the Guarantorsand each of their respective subsidiaries have paid or caused to be paid allknown and undisputed refunds, overpayments, discounts or adjustments that havebecome due pursuant to such reports and billings, except those payments thefailure to pay would not, individually or in the aggregate, reasonably be 

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expected to result in aMaterial Adverse Change. To the knowledge of the Issuers, the Guarantors andeach of their respective subsidiaries, the Issuers, the Guarantors and each oftheir respective subsidiaries have not claimed or received reimbursements fromGovernment Programs or Private Programs in excess of amounts permitted by Law,and have no liability or obligation of any kind, whether accrued, contingent,absolute, inchoate or otherwise, whether due or to become due, under anyGovernment Program or Private Program for any material refund, overpayment,discount or adjustment. There are no pending appeals, adjustments, challenges,audits, inquiries, litigation or written notices of intent to audit withrespect to such prior reports or billings, and during the last three years noneof the Issuers, the Guarantors or each of their respective subsidiaries hasbeen audited, or otherwise examined by any Government Program or PrivateProgram.

(iv)       None of the Issuers, the Guarantors oreach of their respective subsidiaries (A) is a party to any consent,agreement or memorandum of understanding with any Governmental Entity,(B) is subject to any order, judgment, injunction, award, decree or writhanded down, adopted or imposed by any Governmental Entity or (C) hasadopted any board resolutions at the request of any Governmental Entity, in anycase that restricts the conduct of its business or that in any manner relatesto the management or operation of its business (collectively, “CompanyRegulatory Agreements”). To the knowledge of the Issuers, the Guarantors andeach of their respective subsidiaries, none of the Issuers, the Guarantors oreach of their respective subsidiaries has been advised by any GovernmentalEntity that such Governmental Entity is considering issuing or requesting anyCompany Regulatory Agreement.

(v)        To the knowledge of the Issuers, the Guarantors and each oftheir respective subsidiaries, none of the Issuers, the Guarantors or each oftheir respective subsidiaries, nor any director, officer, employee, agent orrepresentative of the Issuers, the Guarantors or each of their respectivesubsidiaries has made, directly or indirectly, any (A) bribe or kickback,(B) illegal political contribution, (C) payment from corporate fundswhich was improperly recorded on the books and records of Holdings, the Companyor any of its subsidiaries, (D) unlawful payment from corporate funds togovernmental officials for the purpose of influencing their actions or theactions of the Governmental Entity which they represent or (E) unlawfulpayment from corporate funds to obtain or retain any business.

(v)        *Title toProperties*.   TheIssuers, the Guarantors and each of their respective subsidiaries have good andmarketable title to all items of real property and valid title to all personalproperty reflected as owned in the Offering Memorandum, in each case free andclear of any security interests, mortgages, liens, encumbrances, equities,claims and other defects of anythird party, except (A) such as do not materially interfere withthe use made or proposed to be made of such property by such Issuer, suchGuarantor or such subsidiary, (B) as otherwise disclosed in the OfferingMemorandum, (C) as created pursuant to the Indenture, the Revolving CreditAgreement and each of the Collateral Documents or (D) liens permitted bythe Indenture, the Revolving Credit Agreement and each of the CollateralDocuments. The real property, improvements, equipment and personal propertyheld under lease by either of the Issuers, any of the Guarantors or any oftheir respective subsidiaries are held under valid and enforceable leases(subject to applicable bankruptcy, insolvency, fraudulent conveyance,reorganization, moratorium and similar laws affecting creditors’ rights andremedies generally, and subject, as to enforceability, to general principles ofequity, including principles of commercial reasonableness, good faith and fairdealing (regardless of whether enforcement is sought in a proceeding at law orin equity), and to limitations of public policy), with such exceptions as donot materially interfere with the use made or proposed to be made of such realproperty, improvements, equipment or personal property by such Issuer, suchGuarantor or such subsidiary and would not reasonably be expected to,individually or in the aggregate, result in a Material Adverse Change.

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(w)       *Tax LawCompliance*.   Exceptas otherwise disclosed in the Offering Memorandum, the Issuers, the Guarantorsand their respective subsidiaries have filed all necessary federal, state andforeign income and franchise tax returns and have paid all taxes required to bepaid by any of them and, if due and payable, any related or similar assessment,fine or penalty levied against any of them, other than those being contested ingood faith and for which reserves have been provided in accordance withgenerally accepted accounting principles or those currently payable withoutpenalty or interest and except where the failure to make such required filingsor payments would not, individually or in the aggregate, reasonably be expectedto result in a Material Adverse Change. Except as set forth in the OfferingMemorandum, each of the Issuers and Guarantors has made adequate charges,accruals and reserves in the applicable financial statements referred to in Section 1(n) abovein respect of all federal, state and foreign income and franchise taxes for allperiods as to which the tax liability of the Issuers, the Guarantors, or any oftheir respective subsidiaries has not been finally determined, except withrespect to such charges, accruals and reserves the failure of which to makewould not, individually or in the aggregate, reasonably be expected to resultin a Material Adverse Change.

(x)        “*Investment Company*”.   Eachof the Issuers, Guarantors and their respective subsidiaries is not, and afterreceipt of payment for the Securities and the application of the proceedstherefrom as described in the Offering Memorandum, will not be, required toregister as an “investment company” within the meaning of Investment CompanyAct of 1940, as amended.

(y)        *Insurance*.   Except as otherwise disclosed in the OfferingMemorandum, Holdings, the Company and its subsidiaries are insured byinstitutions with policies in such amounts and with such deductibles and policylimits and covering such risks as are generally deemed adequate, appropriateand customary for their businesses. The Company has no reason to believe thatit, or any of its subsidiaries or Holdings will not be able (i) to renewits existing insurance coverage as and when such policies expire or (ii) toobtain adequate and comparable coverage from similar institutions as may benecessary or appropriate to conduct its business as now conducted and at a costthat would not result in a Material Adverse Change. Except as otherwisedisclosed in the Offering Memorandum, to the best of their knowledge, neither Holdings, the Companynor any of its subsidiaries have been denied any insurance coverage which ithas sought or for which it has applied and there are no claims by Holdings, the Company or any of itssubsidiaries under any current insurance policy as to which any insurancecompany or institution is denying, or will deny, liability or coverage ordefending under a reservation of rights clause, other than such claims whichwould not, individually or in the aggregate, reasonably be expected to resultin a Material Adverse Change.

(z)        *No Price Stabilization or Manipulation*.   None of the Issuers, theGuarantors or any of their respective Affiliates has taken or will take,directly or indirectly, any action designed to or that might be reasonablyexpected to cause or result in stabilization or manipulation of the price ofany security of the Company to facilitate the sale or resale of the Securities.

(aa)      *Solvency*.   Each of the Issuers andGuarantors is, and immediately after the Closing Date will be, Solvent. As usedherein, the term “Solvent” means, with respect to any person on a particulardate, that on such date (i) the fair market value of the assets of suchperson is greater than the total amount of liabilities (including contingentliabilities) of such person, (ii) the present fair salable value of theassets of such person is greater than the amount that will be required to paythe probable liabilities of such person on its debts as they become absoluteand matured, (iii) such person is able to realize upon its assets and payits debts and other liabilities, including contingent obligations, as theymature and (iv) such person does not intend to, and does not believe thatit will, incur debts or liabilities beyond such entity’s ability to realizeupon its assets and pay its debts and other liabilities, including contingent obligations,as they mature in their ordinary course, and (v) such person does not haveunreasonably small capital.

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(bb)     *Compliancewith Sarbanes-Oxley*.   Except as otherwise disclosed inthe Offering Memorandum, the Company and its subsidiaries and their respectiveofficers and directors are in compliance with the applicable provisions of theSarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act,” which term, as usedherein, includes the rules and regulations of the Commission promulgatedthereunder).

(cc)      *MD&A.  *There are notransactions, arrangements or other relationships, including but not limited tooff balance sheet transactions, which would be required to be included in theOffering Memorandum if the Offering Memorandum were a registration statement onForm S-1 by Item 303 of Regulation S-K under the Securities Actwhich are not so described or are not described as required.

(dd)     *Related Party Transactions*.   Norelationship, direct or indirect, exists between or among either of theIssuers, any of the Guarantors or any of their respective Affiliates, on theone hand, and any former or current director, officer, stockholder, customer orsupplier of any of them, on the other hand, which would be required to beincluded in the Offering Memorandum by the Securities Act or by the rules andregulations enacted thereunder if the Offering Memorandum were a registrationstatement on Form S-1 which is not so described or is not describedas required.

(ee)      *Company’sAccounting System.  *Holdings, the Companyand its subsidiaries maintain a system of accounting controls that issufficient to provide reasonable assurances that: (i) transactions areexecuted in accordance with management’s general or specific authorization; (ii) transactionsare recorded as necessary to permit preparation of financial statements inconformity with generally accepted accounting principles and to maintainaccountability for assets; (iii) access to assets is permitted only inaccordance with management’s general or specific authorization; and (iv) therecorded accountability for assets is compared with existing assets atreasonable intervals and appropriate action is taken with respect to anydifferences.

(ff)       *Compliance with Environmental Laws*.   Except as otherwise disclosed in the Offering Memorandum or as would not,individually or in the aggregate, reasonablybe expected to result in a Material Adverse Change: (i) theIssuers, the Guarantors and each of their respective subsidiaries have all permits,authorizations and approvals required under any applicable Environmental Laws(as defined below) and are in compliance with their requirements, (ii) noneof the Issuers, the Guarantors or any of their respective subsidiaries is inviolation of any federal, state, local or foreign law or regulation relating topollution or protection of human health or the environment (including, withoutlimitation, ambient air, surface water, groundwater, land surface or subsurfacestrata) or wildlife, including without limitation, laws and regulationsrelating to emissions, discharges, releases or threatened releases ofchemicals, pollutants, contaminants, wastes, toxic substances, hazardoussubstances, petroleum and petroleum products (collectively, “Materials of EnvironmentalConcern”), or otherwise relating to the manufacture, processing, distribution,use, treatment, storage, disposal, transport or handling of Materials ofEnvironmental Concern (collectively, “Environmental Laws”), which violationincludes, but is not limited to, noncompliance with any permits or othergovernmental authorizations required for the operation of the business of theIssuers, the Guarantors or their respective subsidiaries under applicableEnvironmental Laws, or noncompliance with the terms and conditions thereof, norhas either of the Issuers, any of the Guarantors or any of their respectivesubsidiaries received any written communication, whether from a governmentalauthority, citizens group, employee or otherwise, that alleges that either ofthe Issuers, any of the Guarantors or any of their respective subsidiaries isin violation of any Environmental Law and that either of the Issuers or any ofthe Guarantors reasonably believes would result in a Material Adverse Change; (iii) thereis no claim, action or cause of action filed with a court or governmentalauthority, no investigation with respect to which either of the Issuers hasreceived written notice, and no written notice by any person or entity allegingpotential liability for investigatory costs, cleanup costs, governmentalresponses costs, natural resources damages, property damages, personalinjuries, attorneys’ fees or penalties arising out of, based on or resultingfrom the presence, or release into the environment, of any 

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Materialof Environmental Concern at any location owned, leased or operated by either ofthe Issuers, any of the Guarantors or any of their respective subsidiaries, nowor in the past (collectively, “Environmental Claims”), pending or, to theIssuers’ and the Guarantors’ knowledge, threatened against either of theIssuers, any of the Guarantors or any of their respective subsidiaries or anyperson or entity whose liability for any Environmental Claim either of theIssuers, any of the Guarantors or any of their respective subsidiaries hasretained or assumed either contractually or by operation of law; and (iv) tothe Issuers’ and the Guarantors’ knowledge, there are no past or presentactions, activities, circumstances, conditions, events or incidents, including,without limitation, the release, emission, discharge, presence or disposal ofany Material of Environmental Concern, that reasonably could result in aviolation of any Environmental Law or form the basis of a potentialEnvironmental Claim against either of the Issuers, any of the Guarantors or anyof their respective subsidiaries or against any person or entity whoseliability for any Environmental Claim either of the Issuers, any of theGuarantors or any of their respective subsidiaries has retained or assumedeither contractually or by operation of law.

(gg)      *ERISA Compliance*.   Each “employee benefit plan”within the meaning of Section 3(3) of the Employee Retirement IncomeSecurity Act of 1974, as amended (“ERISA”), established or maintained by Holdings, the Company, itssubsidiaries or their “ERISA Affiliates” (as defined below) (“Employee BenefitPlan”) is in compliance in all material respects with ERISA. “ERISA Affiliate”means, with respect to Holdings, theCompany or a subsidiary of the Company, any member of any group oforganizations described in Sections** **414(b), (c), (m) or (o) ofthe Internal Revenue Code of 1986, as amended, (the “Code”) of which Holdings, the Company or suchsubsidiary is a member. No “reportable event” (as defined under ERISA) hasoccurred or is reasonably expected to occur with respect to any EmployeeBenefit Plan. No Employee Benefit Plan, if terminated, would have an “amount ofunfunded benefit liabilities” (as defined in Section 4001(a)(18) of ERISA).Neither Holdings, the Company,its subsidiaries nor any of their ERISA Affiliates has incurred or reasonablyexpects to incur any liability under (i) Title IV of ERISA withrespect to termination of, or withdrawal from, any Employee Benefit Plan or (ii) Sections 412,4971, 4975 or 4980B of the Code. Each Employee Benefit Plan that is intended to be qualified under Section 401of the Code is so qualified and nothing has occurred, whether by action orfailure to act, which would cause the loss of such qualification.

(hh)     *Compliance withRegulation S.  *The Issuers, the Guarantors and theirrespective subsidiaries and Affiliates and all persons acting on their behalf(other than the Initial Purchaser, as to whom the Issuers and the Guarantorsmake no representation) have complied with and will comply with the offeringrestrictions requirements of Regulation S in connection with the offeringof the Securities outside the United States and, in connection therewith, theOffering Memorandum will contain the disclosure required by Rule 902. TheSecurities sold in reliance on Regulation S will be represented uponissuance by a temporary global security that may not be exchanged fordefinitive securities until the expiration of the 40-day restrictedperiod referred to in Rule 903 of the Securities Act and only uponcertification of beneficial ownership of such Securities by non-U.S. persons orU.S. persons who purchased such Securities in transactions that were exemptfrom the registration requirements of the Securities Act.

(ii)       *Taxes; Fees*.   Thereare no stamp or other issuance or transfer taxes or duties or other similarfees or charges required to be paid in connection with the execution anddelivery of this Agreement or the issuance or sale by the Issuers of theSecurities.

(jj)        *No Labor Disputes*.   Except as otherwise disclosed inthe Offering Memorandum, (i) there is no unfair labor practice complaintpending against Holdings, the Company or any of its subsidiaries or, to thebest knowledge of Holdings, theCompany and its subsidiaries, threatened against any of them, before theNational Labor Relations Board or any state or local labor relations board, andno significant grievance or significant arbitration proceeding arising out ofor under any collective bargaining agreement is so pending against Holdings, theCompany or any of its subsidiaries or, to the best knowledge of Holdings, the Company and itssubsidiaries, threatened against any of them, other than such complaints 

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pendingthat would not, individually or in the aggregate, reasonably be expected toresult in a Material Adverse Change, (ii) there is no material strike,labor dispute, slowdown or stoppage pending against Holdings, the Companyor any of its subsidiaries or, to the knowledge of Holdings, the Company andits subsidiaries, threatened against Holdings, the Company, or itssubsidiaries, and (iii) none of Holdings, the Company or its subsidiariesis aware of any existing, threatened or imminent labor disturbance by theemployees of any of its principal customers, suppliers, manufacturers or contractors,in each case which is likely to result in a Material Adverse Change.

Any certificate signed by an officer of either of theIssuers, any of the Guarantors or any of their respective subsidiaries anddelivered to the Initial Purchaser or to counsel for the Initial Purchasershall be deemed to be a representation and warranty by such Issuer, suchGuarantor or such subsidiary to the Initial Purchaser as to the matters setforth therein.

SECTION 2.*   Purchase,Sale and Delivery of the Securities.*

(a)        *The Securities*.   On the basis of therepresentations, warranties and covenants herein contained, and upon the termsbut subject to the conditions herein contained, the Issuers agree to issue andsell to the Initial Purchaser all of the Securities. On the basis of therepresentations, warranties and agreements of the Issuers and Guarantors hereincontained, and upon the terms but subject to the conditions herein set forth,the Initial Purchaser agrees to purchase from the Issuers all of theSecurities, at a purchase price of 93.25% of the aggregate principal amount ofthe Securities payable on the Closing Date (which represents an offering priceto investors of 95.5% of the aggregate principal amount of the Securities lessan Initial Purchaser’s discount of 2.25% of the aggregate principal amount ofthe Securities). In addition, on the Closing Date, the Initial Purchaser agreesto forward to the Issuers accrued interest paid on the Securities by investorsin an amount totaling $595,958.90.

(b)        *The ClosingDate*.   Deliveryof certificates for the Securities in definitive form to be purchased by theInitial Purchaser and payment therefor shall be made at the offices of Paul,Weiss, Rifkind, Wharton & Garrison LLP,1285 Avenue of the Americas, New York, New York 10019 (or such otherplace as may be agreed to by the Company and the Initial Purchaser) at9:00 a.m. New York City time, on August 9,2005 or suchother time and date as mutuallyagreed to by the Company and the Initial Purchaser (the time and date ofsuch closing are called the “Closing Date”). The Company hereby acknowledgesthat circumstances under which the Initial Purchaser may provide notice topostpone the Closing Date as originally scheduled include, but are in no waylimited to, any determination by the Company or the Initial Purchaser torecirculate to investors copies of an amended or supplemented OfferingMemorandum.

(c)        *Delivery of the Securities*.   The Issuers shall deliver, orcause to be delivered, to the Initial Purchaser certificates for the Notes andthe Guarantees at the Closing Date against the irrevocable release of a wiretransfer of immediately available funds for the amount of the purchase pricetherefor to an account oraccounts specified by the Company. The certificates for the Notes shallbe in such denominations and registered in the name of Cede & Co., asnominee of the Depositary, pursuant to the DTC Agreement, and shall be madeavailable for inspection on the business day preceding the Closing Date at alocation in New York City, as the Initial Purchaser may designate. Time shallbe of the essence, and delivery at the time and place specified in thisAgreement is a further condition to the obligations of the Initial Purchaser.

(d)        *Delivery ofOffering Memorandum to the Initial Purchaser*.   Not later than 12:00 p.m. New York City timeon the second business day following the date of this Agreement, the Companyshall deliver or cause to be delivered copies of the Offering Memorandum insuch quantities and at such places as the Initial Purchaser shall reasonablyrequest.

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(e)        *InitialPurchaser as Qualified Institutional Buyer*.   The Initial Purchaser represents and warrants to, andagrees with, the Company that it is a “qualified institutional buyer” withinthe meaning of Rule 144A (a “Qualified Institutional Buyer”) and an “accreditedinvestor” within the meaning of Rule 501 under the Securities Act (an “AccreditedInvestor”).

SECTION 3.*   AdditionalCovenants.**  *TheIssuers and the Guarantors, jointly and severally, further covenant and agreewith the Initial Purchaser as follows:

(a)        *Initial Purchaser’s Review of ProposedAmendments and Supplements*.   Prior to amending or supplementingthe Offering Memorandum (including any amendment or supplement throughincorporation by reference of any report filed under the Exchange Act), the Issuersand the Guarantors shall furnish to the Initial Purchaser for review a copy ofeach such proposed amendment or supplement, and the Issuers shall not use anysuch proposed amendment or supplement to which the Initial Purchaser reasonablyobjects.

(b)        *Additional Information, Amendments andSupplements to the Offering Memorandum and Other Securities Act Matters*.   TheIssuers and the Guarantors will immediately notify the Initial Purchaser, andconfirm such notice in writing, of (x) any filing made by either of theIssuers or any of the Guarantors with any securities exchange or any otherregulatory body in the United States or any other jurisdiction or (y) anypress release issued by either of the Issuers or any of the Guarantors. If,prior to the completion of the placement of the Securities by the InitialPurchaser with the Subsequent Purchasers, any event shall occur or conditionexist as a result of which it is necessary to amend or supplement the OfferingMemorandum in order to make the statements therein, in the light of thecircumstances when the Offering Memorandum is delivered to a purchaser, notmisleading, or if in the reasonable opinion of the Initial Purchaser or counselfor the Initial Purchaser it is otherwise necessary to amend or supplement theOffering Memorandum to comply with law, the Issuers and the Guarantors agree topromptly prepare (subject to Section 3(a) hereof), and furnish attheir own expense to the Initial Purchaser, amendments or supplements to theOffering Memorandum so that the statements in the Offering Memorandum as soamended or supplemented will not, in the light of the circumstances when theOffering Memorandum is delivered to a purchaser, be misleading or so that theOffering Memorandum, as amended or supplemented, will comply with law.

The Issuers and theGuarantors hereby expressly acknowledge that the indemnification and contributionprovisions of Sections 8 and 9 hereof are specifically applicable andrelate to the Offering Memorandum and each amendment or supplement referred toin this Section 3.

(c)        *Copies ofthe Offering Memorandum*.   The Issuers agree to furnish theInitial Purchaser, without charge, as many copies of the Offering Memorandumand any amendments and supplements thereto as it shall have reasonablyrequested.

(d)        *Blue SkyCompliance*.   TheIssuers and the Guarantors shall use their commercially reasonable efforts tocooperate with the Initial Purchaser and counsel for the Initial Purchaser toqualify or register the Securities for sale under (or obtain exemptions fromthe application of) the Blue Sky or state securities laws of thosejurisdictions the InitialPurchaser may reasonably request, shall comply with such laws and shallcontinue such qualifications, registrations and exemptions in effect so long asrequired for the distribution of the Securities. The Issuers and the Guarantorsshall not be required to qualify as a foreign corporation or to take any actionthat would subject it to general service of process in any such jurisdictionwhere it is not presently qualified or where it would be subject to taxation asa foreign corporation. The Issuers and the Guarantors will advise the InitialPurchaser promptly of the suspension of the qualification or registration of(or any such exemption relating to) the Securities for offering, sale ortrading in any jurisdiction or any initiation or threat of any proceeding forany such purpose, and in the event of the issuance of any order suspending suchqualification, registration or exemption, the Issuers 

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shall usetheir commercially reasonable efforts to obtain the withdrawal thereof at theearliest practicable time.

(e)        *Use ofProceeds*.   TheIssuers shall apply the net proceeds from the sale of the Securitiessubstantially in the manner described under the caption “Use of Proceeds” inthe Offering Memorandum.

(f)         *TheDepositary*.   TheIssuers will cooperate with the Initial Purchaser and use their commerciallyreasonable efforts to permit the Securities to be eligible for clearance andsettlement through the facilities of the Depositary.

(g)        *AdditionalIssuer Information*.   Priorto the completion of the placement of the Securities by the Initial Purchaserwith the Subsequent Purchasers, the Company shall file, on a timely basis, withthe Commission all reports and documents required to be filed under Section 13or 15 of the Exchange Act. Additionally, at any time when either of the Issuersis not subject to Section 13 or 15 of the Exchange Act, for the benefit ofholders and beneficial owners from time to time of Securities, the Issuersshall furnish, at their expense, upon request, to holders and beneficial ownersof Securities and prospective purchasers of Securities information (“AdditionalIssuer Information”) satisfying the requirements of subsection (d)(4) ofRule 144A.

(h)        *AgreementNot To Offer or Sell Additional Securities*.   During the period of 90 days following the date ofthe Offering Memorandum, each of the Issuers and Guarantors will not, withoutthe prior written consent of the Initial Purchaser (which consent may bewithheld at the sole discretion of the Initial Purchaser), directly orindirectly, sell, offer, contract or grant any option to sell, pledge, transferor establish an open “put equivalent position” within the meaning of Rule 16a-1under the Exchange Act, or otherwise dispose of or transfer, or announce theoffering of, or file any registration statement under the Securities Act inrespect of, any debt securities of either of the Issuers or any of theGuarantors or securities exchangeable for or convertible into debt securitiesof either of the Issuers or any of the Guarantors (other than as contemplatedby this Agreement and to register the Exchange Securities).

(i)         *NoIntegration*.   TheIssuers agree that they will not, and will cause their Affiliates andsubsidiaries not to, make any offer or sale of securities of Holdings, the Company or any of theirrespective subsidiaries of any class if, as a result of the doctrine of “integration”referred to in Rule 502 under the Securities Act, such offer or sale wouldrender invalid (for the purpose of (i) the sale of the Securities by theIssuers to the Initial Purchaser, (ii) the resale of the Securities by theInitial Purchaser to Subsequent Purchasers or (iii) the resale of theSecurities by such Subsequent Purchasers to others) the exemption from theregistration requirements of the Securities Act provided by Section 4thereof or by Rule 144A or by Regulation S thereunder or otherwise.

(j)         *LegendedSecurities*.   Eachcertificate for a Note will bear a legend substantially similar to the legendcontained in “Notice to Investors” in the Offering Memorandum for the timeperiod and upon the other terms stated in the Offering Memorandum.

(k)        *PORTAL*.   The Issuers will use their commercially reasonableefforts to cause such Notes to be eligible for the National Association ofSecurities Dealers, Inc. PORTAL market (the “PORTAL market”).

(l)         *Security Interests*.   TheIssuers and the Guarantors shall take all actions, if any, needed for theSecurities to be secured by perfected first and second priority liens, asapplicable, on the personal property and assets of the Issuers and theGuarantors to the extent and in the manner provided for in the Indenture, theCollateral Documents and the Intercreditor Agreement and as described in theOffering Memorandum. The Issuers and the Guarantors will do and perform allthings required to be done and performed under the Collateral Documents, ifany, including without limitation, all things necessary or advisable to obtain (1) avalid and perfected, first or second priority security interest, as applicable,with respect to each of the assets which constitute the Collateral and (2) alltermination statements, mortgage 

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releasesand other documents necessary to terminate or assign any liens on theCollateral (other than liens created by the Indenture, the Revolving CreditAgreement and the Collateral Documents and other than Permitted Liens).

The Initial Purchaser may, in its sole discretion,waive in writing the performance by the Issuers and the Guarantors of any oneor more of the foregoing covenants or extend the time for their performance.

SECTION 4.*   Paymentof Expenses.**  *TheIssuers and the Guarantors agree to pay all costs, fees and expenses incurredin connection with the performance of the obligations of the Issuers and theGuarantors hereunder, including without limitation (i) all expensesincident to the issuance and delivery of the Securities (including all printingand engraving costs), (ii) all necessary issue, transfer and other stamptaxes in connection with the issuance and sale of the Securities to the InitialPurchaser, (iii) all fees and expenses of the Issuers and the Guarantors’counsel, independent public or certified public accountants and other advisors,(iv) all costs and expenses incurred in connection with the printing,filing, shipping and distribution of the Offering Memorandum (includingfinancial statements and exhibits), and all amendments and supplements thereto,this Agreement, the Registration Rights Agreement, the Indenture, the DTCAgreement, the Notes, the Guarantees, the Revolving Credit Agreement, each ofthe Collateral Documents and theIntercreditor Agreement, (v) all reasonable filing fees, attorneys’fees and expenses incurred by the Issuers, the Guarantors or the InitialPurchaser in connection with qualifying or registering (or obtaining exemptionsfrom the qualification or registration of) all or any part of the Securitiesfor offer and sale under the securities laws of the several states of theUnited States or provinces of Canada (including, without limitation, the costof printing and mailing preliminary and final Blue Sky or legal investmentmemoranda and any related supplements to the Offering Memorandum) and advisingthe Initial Purchaser of such qualifications, registrations and exemptions, (vi) thereasonable fees and expenses of the Trustee, including the fees anddisbursements of counsel for the Trustee in connection with the Indenture, theSecurities, the Exchange Securities, the Collateral Documents and theIntercreditor Agreement, (vii) the reasonable fees and expenses of theCollateral Agent, including the fees and disbursements of counsel for theCollateral Agent in connection with the Indenture, the Securities, the ExchangeSecurities, the Collateral Documents and the Intercreditor Agreement, (viii) allcosts and expenses incurred by the Collateral Agent, or the Issuers, or theGuarantors, or the Trustee in connection with the creation, effectiveness,priority and perfection, including the recording and filing, of the Liens on orin all of the Collateral, in the manner provided under the CollateralDocuments, or in relation to any other action contemplated by the CollateralDocuments or the Intercreditor Agreement, (ix) any fees payable inconnection with the rating of the Securities or the Exchange Securities withthe ratings agencies and the listing of the Securities with the PORTAL market, (x) anyfiling fees incident to, and any reasonable fees and disbursements of counselto the Initial Purchaser in connection with the review by the NationalAssociation of Securities Dealers, Inc., if any, of the terms of the saleof the Securities or the Exchange Securities, (xi) all fees and expenses(including reasonable fees and expenses of counsel) of the Issuers and theGuarantors in connection with approval of the Securities by DTC for “book-entry”transfer, and the performance by the Issuers and the Guarantors of theirrespective other obligations under this Agreement and (xii) except as otherwiseprovided in the last sentence of this Section 4, all costs and expenses ofthe Issuers payable or incurred in connection with any roadshow or marketingeffort for the Securities. Except asprovided in this Section 4, Section 6, Section 8 and Section 9hereof, the Initial Purchaser shall pay (i) its own expenses, includingthe fees and disbursements for its counsel, (ii) the expenses of anyprivate airplane or jet used in connection with any roadshow or marketingeffort for the Securities and (iii) the expenses of any group functionsand/or group meetings with prospective investors in the Securities.

SECTION 5.*   Conditions of the Obligations of theInitial Purchaser.**  *Theobligations of the Initial Purchaser to purchase and pay for the Securities asprovided herein on the Closing Date shall be subject to the accuracy of therepresentations and warranties on the part of the Issuers and the Guarantorsset forth 

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in Section 1 hereof as of the date hereof and as of the ClosingDate as though then made and to the timely performance by each of the Issuersand Guarantors of its covenants and other obligations hereunder, and tocompliance with each of the following additional conditions:

(a)        *Accountants’ Comfort Letter*.   As promptly as reasonablypracticable after the date hereof, the Initial Purchaser shall have receivedfrom PricewaterhouseCoopers LLP, independent public or certified publicaccountants for the Company, a letter addressed to the Initial Purchaser, in formand substance satisfactory to the Initial Purchaser, containing statements andinformation of the type ordinarily included in accountant’s “comfort letters”to Initial Purchaser, delivered according to Statement of Auditing StandardsNos. 72, 76 and 100 (or any successor bulletins), with respect to the auditedand unaudited financial statements and certain financial information containedin the Offering Memorandum.

(b)        *NoMaterial Adverse Change or Ratings Agency Change*.   Forthe period from and after the date of this Agreement and prior to the ClosingDate:

(i)         inthe judgment of the Initial Purchaser there shall not have occurred anyMaterial Adverse Change; and

(ii)       thereshall not have occurred any downgrading, nor shall any notice have been givenof any intended or potential downgrading or of any review for a possible changethat does not indicate the direction of the possible change, in the ratingaccorded any securities of either of the Issuers, any of the Guarantors or anyof their respective subsidiaries by any “nationally recognized statisticalrating organization” as such term is defined for purposes of Rule 436under the Securities Act.

(c)        *Opinion of Counsel for the Issuers and Guarantors*.   On the Closing Date theInitial Purchaser shall have received the opinions of (i) Paul, Weiss,Rifkind, Wharton & Garrison LLP, counsel for the Issuers andGuarantors, dated as of such Closing Date, either (1) opinions ofsubstantially similar tenor (and subject to substantially similarqualifications, exceptions and limitations) to those delivered by such counselin connection with the Purchase Agreement, dated as of December 8, 2004,among the Initial Purchaser and Credit Suisse First Boston LLC and the Issuersand Guarantors (the “December Notes Purchase Agreement”), or (2) opinionsotherwise reasonably acceptable to the Initial Purchaser, (ii) MichelleBergman, Esq., General Counsel of the Company, dated as of such ClosingDate, an opinion of substantially similar tenor (and subject to substantiallysimilar qualifications, exceptions and limitations) to that delivered by suchcounsel in connection with the December Notes Purchase Agreement or anopinion otherwise reasonably acceptable to the Initial Purchaser, (iii) Benesch,Friedlander, Coplan & Aronoff LLP, special regulatory counsel for theCompany, dated as of such Closing Date, an opinion of substantially similartenor (and subject to substantially similar qualifications, exceptions andlimitations) to that delivered by such counsel in connection with the December NotesPurchase Agreement or an opinion otherwise reasonably acceptable to the InitialPurchaser, and (iv) Grotta, Glassman & Hoffman (or other counselreasonably acceptable to the Initial Purchaser), special labor counsel for theCompany, dated as of such Closing Date, an opinion of substantially similartenor (and subject to substantially similar qualifications, exceptions andlimitations) to that delivered by such counsel in connection with the December NotesPurchase Agreement or an opinion otherwise reasonably acceptable to the InitialPurchaser.

(d)        *Opinion ofCounsel for the Initial Purchaser*.   On the Closing Date the Initial Purchaser shall havereceived the opinion of Fried, Frank, Harris, Shriver & Jacobson LLP,counsel for the Initial Purchaser, dated as of such Closing Date, with respectto such matters as may be reasonably requested by the Initial Purchaser.

(e)        *Officers’Certificate*.   Onthe Closing Date the Initial Purchaser shall have received a writtencertificate executed by the respective Chief Executive Officer or President andthe respective Chief 

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Financial Officer of each of the Issuers and Guarantors, dated as ofthe Closing Date, to the effect set forth in subsection (b) (ii) ofthis Section 5, and further to the effect that:

(i)         for the period from and after the date of this Agreement andprior to the Closing Date there has not occurred any Material Adverse Change;

(ii)       the representations, warranties andcovenants set forth in Section 1 of this Agreement are true and correctwith the same force and effect as though expressly made on and as of theClosing Date; and

(iii)      each of the Issuers and Guarantors hascomplied with all the agreements and satisfied all the conditions contained inthis Agreement required to be performed or satisfied by the Issuers and theGuarantors at or prior to the Closing Date.

(f)         *Bring-down Comfort Letter*.   Unlessthe comfort letter as described under subsection (a) of this Section 5is delivered on the Closing Date, on the Closing Date the Initial Purchasershall have received from PricewaterhouseCoopers LLP, independent public orcertified public accountants for the Company, a letter dated such date, in formand substance satisfactory to the Initial Purchaser, to the effect that theyreaffirm the statements made in the letter furnished by them pursuant tosubsection (a) of this Section 5 with respect to the audited andunaudited financial statements and certain financial information contained inthe Offering Memorandum, except that the specified date referred to therein forthe carrying out of procedures shall be no more than three business days priorto the Closing Date.

(g)        *PORTAL Listing*.   At theClosing Date the Notes shall have been designated for trading on the PORTALmarket.

(h)        *Other Agreements*.   TheIssuers and the Guarantors shall have entered into the Registration RightsAgreement and all Transaction Documents to which either of the Issuers or anyof the Guarantors is a party; there shall be no amendment to the Indenture, theIntercreditor Agreement, and all Collateral Documents to which either of theIssuers or any of the Guarantors is a party, except as approved by the InitialPurchaser; the Trustee shall have entered into the Indenture and all otherTransaction Documents to which it is a party; the Collateral Agent shall haveentered into the Collateral Documents and all other Transaction Documents towhich it is a party and the Initial Purchaser shall have received executedcounterparts thereof.

(i)         *Evidenceof Security Interest.  *As of the Closing Date, theIssuers and Guarantors shall have delivered to the Initial Purchasersatisfactory evidence as to the security interests securing the Notes asreasonably requested by the Initial Purchaser.

(j)         *Evidence of Insurance*.   Receiptby the Collateral Agent of copies of insurance policies or certificates ofinsurance of each of the Issuers and Guarantors and their respectivesubsidiaries evidencing liability and casualty insurance meeting therequirements set forth in the Transaction Documents, including, but not limitedto, naming the Collateral Agent as additional insured and loss payee on behalfof the Issuers and the Guarantors.

(k)        *Additional Documents*.   Onor before the Closing Date, the Initial Purchaser and counsel for the InitialPurchaser shall have received such information, documents and opinions as theymay reasonably require for the purposes of enabling them to pass upon theissuance and sale of the Securities as contemplated herein, or in order toevidence the accuracy of any of the representations and warranties, or thesatisfaction of any of the conditions or agreements, herein contained.

If any condition specifiedin this Section 5 is not satisfied when and as required to be satisfied,this Agreement may be terminated by the Initial Purchaser by notice to theCompany at any time on or prior to the Closing Date, which termination shall bewithout liability on the part of any party to any other party, except thatSection 4, Section 6, Section 8 and Section 9 shall at alltimes be effective and shall survive such termination.

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SECTION 6.*   Reimbursementof Initial Purchaser’s Expenses.**  *Ifthis Agreement is terminated by the Initial Purchaser pursuant to Section 5or Section 10, including if the sale to the Initial Purchaser of theSecurities on the Closing Date is not consummated because of any refusal,inability or failure on the part of either of the Issuers or any of theGuarantors to perform any agreement herein or to comply with any provisionhereof, the Issuers and the Guarantors agree to reimburse the InitialPurchaser, upon demand for all out-of-pocket costs and expenses that shall havebeen reasonably incurred by the Initial Purchaser in connection with theproposed purchase and the offering and sale of the Securities, including butnot limited to fees and disbursements of counsel, printing expenses, travelexpenses, expenses associated with the road show for the marketing of theSecurities, postage, facsimile and telephone charges.

SECTION 7.*   Offer,Sale and Resale Procedures.**  *TheInitial Purchaser, on the one hand, and the Issuers and the Guarantors, on theother hand, hereby establish and agree to observe the following procedures inconnection with the offer and sale of the Securities:

Offers and sales of the Securities will be made onlyby the Initial Purchases or Affiliates thereof qualified to do so in thejurisdictions in which such offers or sales are made. Each such offer or saleshall only be made to persons whom the offeror or seller reasonably believes tobe qualified institutional buyers (as defined in Rule 144A under theSecurities Act) or non-U.S. persons outside the United States to whom theofferor or seller reasonably believes offers and sales of the Securities may bemade in reliance upon Regulation S under the Securities Act, upon theterms and conditions set forth in Annex I hereto, which Annex I is herebyexpressly made a part hereof.

No general solicitation or general advertising (withinthe meaning of Rule 502 under the Securities Act) has been or will be usedin the United States in connection with the offering of the Securities.

Upon original issuance by the Issuers, and until suchtime as the same is no longer required under the applicable requirements of theSecurities Act, the Notes (and all securities issued in exchange therefor or insubstitution thereof, other than the Exchange Securities) shall bear thefollowing legend:

“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBYWAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISETRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTIONTHEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIEDTHAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THESECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) SUCHSECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDETHE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS AQUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIESACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIEDINSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144AUNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGNPERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OFREGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROMREGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IFAPPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THEREGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OFCOUNSEL ACCEPTABLE TO THE ISSUERS IF THE ISSUERS SO REQUEST), (2) TO THE 

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ISSUERS OR (3) PURSUANT TO AN EFFECTIVEREGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLESECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLEJURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER ISREQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THERESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CANBE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALEOF THE SECURITY EVIDENCED HEREBY.”

Following the sale of the Securities by the InitialPurchaser to Subsequent Purchasers pursuant to the terms hereof, the InitialPurchaser shall not be liable or responsible to either of the Issuers or any ofthe Guarantors for any losses, damages or liabilities suffered or incurred byeither of the Issuers or any of the Guarantors, including any losses, damagesor liabilities under the Securities Act, arising from or relating to any resaleor transfer of any Security.

SECTION 8.*   Indemnification.*

(a)        *Indemnificationof the Initial Purchaser.  *The Issuers and theGuarantors, jointly and severally, agree to indemnify and hold harmless theInitial Purchaser, its directors, officers and employees, and each person, ifany, who controls the Initial Purchaser within the meaning of the SecuritiesAct and the Exchange Act against any loss, claim, damage, liability or expense,as incurred, to which the Initial Purchaser, such director, officer, employeeor such controlling person may become subject, under the Securities Act, theExchange Act or other federal or state statutory law or regulation, or atcommon law or otherwise (including in settlement of any litigation, if suchsettlement is effected with the written consent of the Company), insofar assuch loss, claim, damage, liability or expense (or actions in respect thereofas contemplated below) arises out of or is based: (i) upon any untruestatement or alleged untrue statement of a material fact contained in theOffering Memorandum (or any amendment or supplement thereto), or the omissionor alleged omission therefrom of a material fact necessary in order to make thestatements therein, in the light of the circumstances under which they weremade, not misleading; or (ii) any act or failure to act or any alleged actor failure to act by the Initial Purchaser in connection with, or relating inany manner to, the offering contemplated hereby, and which is included as partof or referred to in any loss, claim, damage, liability or action arising outof or based upon any matter covered by clause (i) above, providedthat the Issuers and the Guarantors shall not be liable under this clause (ii) tothe extent that a court of competent jurisdiction shall have determined by afinal judgment that such loss, claim, damage, liability or action resulteddirectly from any such acts or failures to act undertaken or omitted to betaken by the Initial Purchaser through its gross negligence or willfulmisconduct; and to reimburse the Initial Purchaser and each such director,officer, employee or controlling person for any and all expenses (including thefees and disbursements of counsel chosen by the Initial Purchaser) as suchexpenses are reasonably incurred by the Initial Purchaser or such director,officer, employee or controlling person in connection with investigating,defending, settling, compromising or paying any such loss, claim, damage,liability, expense or action; provided, however, that the foregoing indemnityagreement shall not apply to any loss, claim, damage, liability or expense tothe extent, but only to the extent, arising out of or based upon any untruestatement or alleged untrue statement or omission or alleged omission made inreliance upon and in conformity with written information furnished to theIssuers by the Initial Purchaser expressly for use in the Offering Memorandum(or any amendment or supplement thereto). The indemnity agreement set forth inthis Section 8(a) shall be in addition to any liabilities that theIssuers and the Guarantors may otherwise have*.*

(b)        *Indemnification of theIssuers, their Directors and Officers.  *The Initial Purchaseragrees to indemnify and hold harmless each of the Issuers and each of theirdirectors and each person, if any, who controls any of the Issuers within themeaning of the Securities Act or the Exchange Act, against any loss, claim, damage,liability or expense, as incurred, to which any such Issuer or any suchdirector, or 

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controllingperson may become subject, under the Securities Act, the Exchange Act, or otherfederal or state statutory law or regulation, or at common law or otherwise(including in settlement of any litigation, if such settlement is effected withthe written consent of the Initial Purchaser), insofar as such loss, claim,damage, liability or expense (or actions in respect thereof as contemplatedbelow) arises out of or is based upon any untrue statement or alleged untruestatement of a material fact contained in the Offering Memorandum (or anyamendment or supplement thereto), or the omission or alleged omission therefromof a material fact necessary in order to make the statements therein, in thelight of the circumstances under which they were made, not misleading, in eachcase to the extent, but only to the extent, that such untrue statement oralleged untrue statement or omission or alleged omission was made in the OfferingMemorandum (or any amendment or supplement thereto), in reliance upon and inconformity with written information furnished to the Issuers by the InitialPurchaser expressly for use therein; and to reimburse each such Issuer and eachsuch director or controlling person for any and all expenses (including thefees and disbursements of counsel) as such expenses are reasonably incurred bysuch Issuer or such director or controlling person in connection withinvestigating, defending, settling, compromising or paying any such loss,claim, damage, liability, expense or action. The Issuers hereby acknowledgethat the only information that the Initial Purchaser has furnished to theIssuers expressly for use in the Offering Memorandum (or any amendment or supplementthereto) are the statements in the second sentence of the second paragraph, second sentence of the fourthparagraph, fourth sentence of the sixth paragraph, the eighth paragraphand the tenth paragraph under the caption “Plan of Distribution” in theOffering Memorandum. The indemnity agreement set forth in this Section 8 (b) shallbe in addition to any liabilities that the Initial Purchaser may otherwisehave.

(c)        *Notificationsand Other Indemnification Procedures*.   Promptly afterreceipt by an indemnified party under this Section 8 of notice of thecommencement of any action, such indemnified party will, if a claim in respectthereof is to be made against an indemnifying party under this Section 8,notify the indemnifying party in writing of the commencement thereof, but theomission so to notify the indemnifying party will not relieve the indemnifying party from anyliability which it may have to any indemnified party for contribution orotherwise than under the indemnity agreement contained in this Section 8or to the extent it is not prejudiced as a proximate result of such failure. Incase any such action is brought against any indemnified party and suchindemnified party seeks or intends to seek indemnity from an indemnifyingparty, the indemnifying party will be entitled to participate in and, to theextent that it shall elect, jointly with all other indemnifying partiessimilarly notified, by written notice delivered to the indemnified partypromptly after receiving the aforesaid notice from such indemnified party, toassume the defense thereof with counsel reasonably satisfactory to suchindemnified party; provided, however, if the defendants in any such actioninclude both the indemnified party and the indemnifying party and theindemnified party shall have reasonably concluded that a conflict may arisebetween the positions of the indemnifying party and the indemnified party inconducting the defense of any such action or that there may be legal defensesavailable to it and/or other indemnified parties which are different from oradditional to those available to the indemnifying party, the indemnified partyor parties shall have the right to select separate counsel to assume such legaldefenses and to otherwise participate in the defense of such action on behalfof such indemnified party or parties. Upon receipt of notice from theindemnifying party to such indemnified party of such indemnifying party’selection so to assume the defense of such action and approval by theindemnified party of counsel, the indemnifying party will not be liable to suchindemnified party under this Section 8 for any legal or other expensessubsequently incurred by such indemnified party in connection with the defensethereof unless (i) the indemnified party shall have employed separatecounsel in accordance with the proviso to the immediately preceding sentence(it being understood, however, that the indemnifying party shall not be liablefor the expenses of more than one separate counsel (together with localcounsel), approved by the indemnifying party, representing the indemnifiedparties who are parties to such action), (ii) the indemnifying party shallnot have employed counsel satisfactory to the indemnified party to representthe indemnified party within a reasonable time after notice of 

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commencementof the action, in each of which cases the fees and expenses of counsel shall beat the expense of the indemnifying party, or (iii) the employment of suchcounsel shall have been authorized in writing by the indemnifying parties inconnection with the defense of such action.

(d)        *Settlements*.   The indemnifying party underthis Section 8 shall not be liable for any settlement of any proceedingeffected without its written consent, but if settled with such consent or ifthere be a final judgment for the plaintiff, the indemnifying party agrees toindemnify the indemnified party against any loss, claim, damage, liability orexpense by reason of such settlement or judgment. Notwithstanding the foregoingsentence, if at any time an indemnified party shall have requested anindemnifying party to reimburse the indemnified party for fees and expenses ofcounsel as contemplated by Section 8 hereof, the indemnifying party agreesthat it shall be liable for any settlement of any proceeding effected withoutits written consent if (i) such settlement is entered into more than60 days after receipt by such indemnifying party of the aforesaid request,(ii) such indemnifying party shall not have reimbursed the indemnifiedparty in accordance with such request prior to the date of such settlement, and(iii) such indemnified party shall have given the indemnifying party atleast 30 days’ prior notice of its intention to settle. No indemnifying partyshall, without the prior written consent of the indemnified party, effect anysettlement, compromise or consent to the entry of judgment in any pending orthreatened action, suit or proceeding in respect of which any indemnified partyis or could have been a party and indemnity was or could have been soughthereunder by such indemnified party, unless such settlement, compromise orconsent includes an unconditional release of such indemnified party from allliability on claims that are the subject matter of such action, suit orproceeding and does not include a statement as to or an admission of fault,culpability or a failure to act by or on behalf of any indemnified party.

SECTION 9.*   Contribution.**  *If the indemnification provided for in Section 8is for any reason held to be unavailable to or otherwise insufficient to holdharmless an indemnified party in respect of any losses, claims, damages,liabilities or expenses referred to therein, then each indemnifying party shallcontribute to the aggregate amount paid or payable by such indemnified party,as incurred, as a result of any losses, claims, damages, liabilities orexpenses referred to therein (i) in such proportion as is appropriate toreflect the relative benefits received by the Issuers and the Guarantors, onthe one hand, and the Initial Purchaser, on the other hand, from the offeringof the Securities pursuant to this Agreement or (ii) if the allocationprovided by clause (i) above is not permitted by applicable law, insuch proportion as is appropriate to reflect not only the relative benefits referredto in clause (i) above but also the relative fault of the Issuers andthe Guarantors, on the one hand, and the Initial Purchaser, on the other hand,in connection with the statements or omissions that resulted in such losses,claims, damages, liabilities or expenses, as well as any other relevantequitable considerations. The relative benefits received by the Issuers and theGuarantors, on the one hand, and the Initial Purchaser, on the other hand, inconnection with the offering of the Securities pursuant to this Agreement shallbe deemed to be in the same respective proportions as the total net proceedsfrom the offering of the Securities pursuant to this Agreement (beforededucting expenses) received by the Company and the total discount received bythe Initial Purchaser bear to the aggregate initial offering price of theSecurities. The relative fault of the Issuers or the Guarantors, on the onehand, and the Initial Purchaser, on the other hand, shall be determined byreference to, among other things, whether any such untrue or alleged untruestatement of a material fact or omission or alleged omission to state amaterial fact relates to information supplied by either of the Issuers or anyof the Guarantors, on the one hand, or the Initial Purchaser, on the otherhand, and the parties’ relative intent, knowledge, access to information andopportunity to correct or prevent such statement or omission.

The amount paid or payable by a party as a result ofthe losses, claims, damages, liabilities and expenses referred to above shallbe deemed to include, subject to the limitations set forth in Section 8,any legal or other fees or expenses reasonably incurred by such party inconnection with investigating or defending any action or claim. The provisions setforth in Section 8 with respect to notice of 

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commencement of any actionshall apply if a claim for contribution is to be made under thisSection 9; *provided, however,* that noadditional notice shall be required with respect to any action for which noticehas been given under Section 8 for purposes of indemnification.

The Issuers and the Guarantors, and the InitialPurchaser agree that it would not be just and equitable if contributionpursuant to this Section 9 were determined by pro rata allocation or byany other method of allocation which does not take account of the equitableconsiderations referred to in this Section 9.

Notwithstanding the provisions of this Section 9,the Initial Purchaser shall not be required to contribute any amount in excessof the total discount and commissions received by the Initial Purchaser inconnection with the Securities distributed by it. No person guilty offraudulent misrepresentation (within the meaning of Section 11 of theSecurities Act) shall be entitled to contribution from any person who was notguilty of such fraudulent misrepresentation. For purposes of thisSection 9, each director, officer and employee of the Initial Purchaserand each person, if any, who controls the Initial Purchaser within the meaningof the Securities Act and the Exchange Act shall have the same rights tocontribution as the Initial Purchaser, and each director of each of the Issuersand each person, if any, who controls either of the Issuers within the meaningof the Securities Act and the Exchange Act shall have the same rights tocontribution as the Issuers.

SECTION 10.*   Terminationof this Agreement.**  *Priorto the Closing Date, this Agreement may be terminated by the Initial Purchaserby notice given to the Issuers if at any time (i) trading or quotation inany of the Company’s securities shall have been suspended or limited by theCommission or by the New York Stock Exchange or trading in securities generallyon either the Nasdaq Stock Market or the New York Stock Exchange shall have beensuspended or limited, or minimum or maximum prices shall have been generallyestablished on any of such stock exchanges by the Commission or the NASD;(ii) a general banking moratorium shall have been declared by any offederal, New York or Delaware authorities; (iii) there shall have occurredany outbreak or escalation of national or international hostilities or anycrisis or calamity, or any change in the United States or internationalfinancial markets, or any substantial change or development involving aprospective substantial change in United States’ or international political,financial or economic conditions, as in the judgment of the Initial Purchaseris material and adverse and makes it impracticable or inadvisable to market theSecurities in the manner and on the terms described in the Offering Memorandumor to enforce contracts for the sale of securities; (iv) in the judgmentof the Initial Purchaser there shall have occurred any Material Adverse Change;or (v) Holdings, the Company and its subsidiaries shall have sustained aloss by strike, fire, flood, earthquake, accident or other calamity of suchcharacter as in the judgment of the Initial Purchaser may interfere materiallywith the conduct of the business and operations of the Company and itssubsidiaries regardless of whether or not such loss shall have been insured.Any termination pursuant to this Section 10 shall be without liability onthe part of (i) the Issuers to the Initial Purchaser, except that theIssuers shall be obligated to reimburse the expenses of the Initial Purchaserpursuant to Sections 4 and 6 hereof, (ii) the Initial Purchaserto the Issuers, or (iii) any party hereto to any other party, except thatthe provisions of Section 8 and Section 9 shall at all times beeffective and shall survive such termination.

SECTION 11.*   Representationsand Indemnities to Survive Delivery.**  *Therespective indemnities, agreements, representations, warranties and otherstatements of the Issuers and the Guarantors and of each of their respectiveofficers and of the Initial Purchaser set forth in or made pursuant to thisAgreement will remain in full force and effect, regardless of any investigationmade by or on behalf of the Initial Purchaser or either of the Issuers or anyof the Guarantors or any of its or their partners, officers or directors or anycontrolling person, as the case may be, and will survive delivery of andpayment for the Securities sold hereunder. The agreements contained in Sections 1, 4, 6,8, and 9 shall survive the termination of this Agreement, including pursuant toSection 10.

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SECTION 12.*   Notices.**  *All communications hereunder shallbe in writing and shall be mailed, hand delivered or telecopied and confirmedto the parties hereto as follows:

If to the InitialPurchaser:

Banc of America SecuritiesLLC9 West 57th StreetNew York, NY 10019Facsimile: (212) 847-6441Attention: Bruce R. Thompson

with a copy to:

Fried, Frank, Harris,Shriver & Jacobson LLPOne New York PlazaNew York, New York 10004Facsimile: (212) 859-4000Attention: Valerie Ford Jacob, Esq.

If to the Company, DuaneReade GP or any of the Guarantors:

Duane Reade Inc.440 Ninth AvenueNew York, New York 10001Facsimile: 212-594-0832

Attention: MichelleBergman, Esq.General Counsel

with a copy to:

Paul, Weiss, Rifkind,Wharton & Garrison LLP1285 Avenue of the AmericasNew York, New York 10019Facsimile: 212-757-3990Attention: Lawrence G. Wee, Esq.

Any party hereto may change the address for receipt ofcommunications by giving written notice to the others.

SECTION 13.*   Successors.**  *This Agreement will inure to the benefit of and bebinding upon the parties hereto, and to the benefit of the indemnified partiesreferred to in Section 8 and Section 9, and in each case theirrespective successors, and no other person will have any right or obligationhereunder. The term “successors” shall not include any purchaser of theSecurities as such from the Initial Purchaser merely by reason of suchpurchase.

SECTION 14.*   PartialUnenforceability.**  *Theinvalidity or unenforceability of any Section, paragraph or provision of thisAgreement shall not affect the validity or enforceability of any other Section,paragraph or provision hereof. If any Section, paragraph or provision of thisAgreement is for any reason determined to be invalid or unenforceable, thereshall be deemed to be made such minor changes (and only such minor changes) asare necessary to make it valid and enforceable.

SECTION 15.*   GoverningLaw Provisions.**  *THISAGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNALLAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMEDIN SUCH STATE.

(a)        *Consent to Jurisdiction**.  *Any legal suit, action or proceeding arising out ofor based upon this Agreement or the transactions contemplated hereby (“RelatedProceedings”) may be instituted in the 

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federal courts of the United States of America located in the City andCounty of New York or the courts of the State of New York in each case locatedin the City and County of New York (collectively, the “Specified Courts”), andeach party irrevocably submits to the exclusive jurisdiction (except forproceedings instituted in regard to the enforcement of a judgment of any suchcourt (a “Related Judgment”), as to which such jurisdiction is non-exclusive)of such courts in any such suit, action or proceeding. Service of any process,summons, notice or document by mail to such party’s address set forth aboveshall be effective service of process for any suit, action or other proceedingbrought in any such court. The parties irrevocably and unconditionally waiveany objection to the laying of venue of any suit, action or other proceeding inthe Specified Courts and irrevocably and unconditionally waive and agree not toplead or claim in any such court that any such suit, action or other proceedingbrought in any such court has been brought in an inconvenient forum.

SECTION 16.*   NoAdvisory or Fiduciary Responsibility.**  *Each of the Issuers and Guarantors acknowledges andagrees that: (i) the purchase and sale of the Securities pursuant to thisAgreement, including the determination of the offering price of the Securitiesand any related discounts and commissions, is an arm’s-length commercialtransaction between the Issuers and the Guarantors, on the one hand, and theInitial Purchaser, on the other hand, and the Issuers and the Guarantors arecapable of evaluating and understanding and understand and accept the terms,risks and conditions of the transactions contemplated by this Agreement; (ii) inconnection with each transaction contemplated hereby and the process leading tosuch transaction the Initial Purchaser is and has been acting solely as aprincipal and is not the agent or fiduciary of the Issuers, the Guarantors ortheir respective affiliates, stockholders, creditors or employees or any otherparty; (iii) the Initial Purchaser has not assumed and will not assume anadvisory or fiduciary responsibility in favor of the Issuers or the Guarantorswith respect to any of the transactions contemplated hereby or the processleading thereto (irrespective of whether the Initial Purchaser has advised oris currently advising the Issuers or the Guarantors on other matters) or anyother obligation to the Issuers or the Guarantors except the obligationsexpressly set forth in this Agreement; (iv) the Initial Purchaser and itsrespective affiliates may be engaged in a broad range of transactions thatinvolve interests that differ from those of the Issuers and the Guarantors andthat the Initial Purchaser has no obligation to disclose any of such interestsby virtue of any fiduciary or advisory relationship; and (v) the InitialPurchaser has not provided any legal, accounting, regulatory or tax advice withrespect to the offering contemplated hereby and the Issuers and the Guarantorshave consulted their own legal, accounting, regulatory and tax advisors to theextent they deemed appropriate.

This Agreement supersedesall prior agreements and understandings (whether written or oral) between theIssuers, the Guarantors and the Initial Purchaser, or any of them, with respectto the subject matter hereof. The Issuers and the Guarantors hereby waive andrelease, to the fullest extent permitted by law, any claims that the Issuersand the Guarantors may have against the Initial Purchaser with respect to anybreach or alleged breach of fiduciary duty.

SECTION 17.*   GeneralProvisions.**  *ThisAgreement constitutes the entire agreement of the parties to this Agreement andsupersedes all prior written or oral and all contemporaneous oral agreements,understandings and negotiations with respect to the subject matter hereof. ThisAgreement may be executed in two or more counterparts, each one of which shallbe an original, with the same effect as if the signatures thereto and heretowere upon the same instrument. This Agreement may not be amended or modifiedunless in writing by all of the parties hereto, and no condition herein(express or implied) may be waived unless waived in writing by each party whomthe condition is meant to benefit. The section headings herein are for theconvenience of the parties only and shall not affect the construction orinterpretation of this Agreement.

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If theforegoing is in accordance with your understanding of our agreement, kindlysign and return to the Company the enclosed copies hereof, whereupon thisinstrument, along with all counterparts hereof, shall become a bindingagreement in accordance with its terms.

|   | Very truly yours,                         |
|--------|-------------------------------------------|
|   | DUANE  READE INC., a Delaware corporation |
|   | By:                                       | /s/ JOHN K. HENRY |
|   | Name:                                     | John K. Henry |
|   | Title:                                    | *Senior Vice President and Chief  Financial Officer* |
|        |                                           |  |  |

 

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|        | DUANE READE, a New  York general partnership                           |
|--------|------------------------------------------------------------------------|
|   | By: Duane Reade Inc., a  Delaware corporation  and its general partner |
|   | By:                                                                    | /s/ JOHN K. HENRY |
|   | Name:                                                                  | John K. Henry |
|   | Title:                                                                 | *Senior Vice President and Chief  Financial Officer* |
|        |                                                                        |  |  |

 

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|        | DUANE READE  HOLDINGS, INC., a Delaware  corporation |
|--------|-----------------------------------------------------------|
|   | By:                                                       | /s/ MICHAEL S. GREEN |
|   | Name:                                                     | Michael S. Green |
|   | Title:                                                    | *Vice President* |
|        |                                                           |  |  |

 

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|        | DRI I, INC.,  a Delaware corporation                      |
|--------|----------------------------------------------------------------|
|   | DUANE  READE INTERNATIONAL, INC., a Delaware  corporation |
|   | DUANE  READE REALTY, INC., a Delaware  corporation        |
|   | By:                                                            | /s/ JOHN K. HENRY |
|   | Name:                                                          | John K. Henry |
|   | Title:                                                         | *Senior Vice President and Chief  Financial Officer* |
|        |                                                                |  |  |

 

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Theforegoing Purchase Agreement is hereby confirmed and accepted by the InitialPurchaser as of the date first above written.
| BANC OF AMERICA SECURITIES LLC |
|--------------------------------|
| By:                            |   |   |
|                           | Name: |
|                           | Title: |

 

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**EXHIBIT A**

**Subsidiariesof Duane Reade Inc.**

| **Name**                              | ** ** | ** ** | ** ** | **Jurisdiction of Incorporation or Formation** |
|---------------------------------------|------------|------------|------------|------------------------------------------------|
| DRI I, Inc.                      |       | Delaware   |
| Duane Reade  International, Inc. |       | Delaware   |
| Duane Reade  Realty, Inc.        |       | Delaware   |
| Duane Reade (a general partnership)   |       | New York   |

 

A-1

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**ANNEX I**

*ResalePursuant to Regulation S or Rule 144A.*   The Initial Purchaser understands that:

The Initial Purchaser agrees that it has not offeredor sold and will not offer or sell the Securities in the United States or to,or for the benefit or account of, a U.S. Person (other than a distributor), ineach case, as defined in Rule 902 under the Securities Act (i) aspart of its distribution at any time or (ii) otherwise until 40 days afterthe later of the commencement of the offering of the Securities pursuant heretoand the Closing Date, other than in accordance with Regulation S of theSecurities Act or another exemption from the registration requirements of theSecurities Act. The Initial Purchaser agrees that, during such 40-dayrestricted period, it will not cause any advertisement with respect to theSecurities (including any “tombstone” advertisement) to be published in anynewspaper or periodical or posted in any public place and will not issue anycircular relating to the Securities, except such advertisements as permitted byand include the statements required by Regulation S.

The Initial Purchaser agrees that, at or prior toconfirmation of a sale of Securities by it to any distributor, dealer or personreceiving a selling concession, fee or other remuneration during the 40-dayrestricted period referred to in Rule 903 under the Securities Act, itwill send to such distributor, dealer or person receiving a selling concession,fee or other remuneration a confirmation or notice to substantially the followingeffect:

“The Securities covered hereby have not beenregistered under the U.S. Securities Act of 1933, as amended (the “SecuritiesAct”), and may not be offered or sold within the United States or to, or forthe account or benefit of, U.S. persons (i) as part of your distributionat any time or (ii) otherwise until 40 days after the later of thecommencement of the Offering and the Closing Date, except in either case inaccordance with Regulation S under the Securities Act (or Rule 144A intransactions that are exempt from the registration requirements of theSecurities Act), and in connection with any subsequent sale by you of the Notescovered hereby in reliance on Regulation S during the period referred to aboveto any distributor, dealer or person receiving a selling concession, fee orother remuneration, you must deliver a notice to substantially the foregoingeffect. Terms used above have the meanings assigned to them in Regulation S.”

The Initial Purchaser agrees that the Securitiesoffered and sold in reliance on Regulation S will be represented upon issuanceby a global security that may not be exchanged for definitive securities untilthe expiration of the 40-day restricted period referred to in Rule 903of the Securities Act and only upon certification of beneficial ownership ofsuch Securities by non-U.S. persons or U.S. persons who purchased suchSecurities in transactions that were exempt from the registration requirementsof the Securities Act.

The Initial Purchaseracknowledges that the Company and, for purposes of the opinions to be deliveredto them pursuant to Section 5(c) hereof, counsel to the Company andcounsel to the Initial Purchaser, will rely upon the accuracy and truth of theforegoing representations, and the Initial Purchaser hereby consents to suchreliance.

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