ANY RESTRICTION OR ENCUMBRANCE WITH RESPECT TO ANY ASSET OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES OR A SUBSIDIARY OF THE COMPANY IMPOSED
PURSUANT TO AN AGREEMENT WHICH HAS BEEN ENTERED INTO FOR THE SALE OR DISPOSITION
OF SUCH ASSETS OR ALL OR SUBSTANTIALLY ALL OF THE CAPITAL STOCK OR ASSETS OF
SUCH SUBSIDIARY, SO LONG AS SUCH SALE OR DISPOSITION IS PERMITTED UNDER THIS
AGREEMENT; AND
(VI)
LIENS PERMITTED UNDER SECTION 7.02 AND ANY DOCUMENTS OR
INSTRUMENTS GOVERNING THE TERMS OF ANY INDEBTEDNESS OR OTHER OBLIGATIONS SECURED
BY ANY SUCH LIENS; PROVIDED THAT SUCH PROHIBITIONS OR RESTRICTIONS APPLY ONLY TO
THE ASSETS SUBJECT TO SUCH LIENS.
SECTION 7.12
OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON HOLDINGS AND THE
BORROWER.
(A)
HOLDINGS WILL NOT (I) HOLD ANY ASSETS OTHER THAN THE EQUITY
INTERESTS OF THE COMPANY, (II) HAVE ANY MATERIAL LIABILITIES OTHER THAN (A)
LIABILITIES UNDER THE TERM LOAN DOCUMENTS, THE ABL CREDIT AGREEMENT, THE SENIOR
SUBORDINATED NOTES AND THE EXCHANGE NOTES AND OTHER INDEBTEDNESS PERMITTED TO BE
INCURRED UNDER CLAUSE (B) OF THE DEFINITION OF "PERMITTED INDEBTEDNESS" AND (B)
TAX LIABILITIES IN THE ORDINARY COURSE OF BUSINESS OR (III) ENGAGE IN ANY
BUSINESS OR ACTIVITY OTHER THAN (A) OWNING THE COMMON STOCK OF THE COMPANY
(INCLUDING PURCHASING ADDITIONAL SHARES OF COMMON STOCK AFTER THE CLOSING DATE)
AND ACTIVITIES INCIDENTAL OR RELATED THERETO OR TO THE MAINTENANCE OF THE
CORPORATE EXISTENCE OF HOLDINGS OR COMPLIANCE WITH APPLICABLE LAW, (B) ACTING AS
A GUARANTOR UNDER THE GUARANTY AND PLEDGING ITS ASSETS TO THE COLLATERAL AGENT,
FOR THE BENEFIT OF THE FINANCE PARTIES, PURSUANT TO THE COLLATERAL DOCUMENTS TO
WHICH IT IS A PARTY, (C) ACTING AS A GUARANTOR IN RESPECT OF THE INDEBTEDNESS
ARISING UNDER THE SENIOR SUBORDINATED NOTE INDENTURE AND THE SENIOR SUBORDINATED
NOTES, (D) ACTING AS A GUARANTOR IN RESPECT OF THE INDEBTEDNESS ARISING UNDER
THE ABL CREDIT AGREEMENT AND THE ABL DOCUMENTS, AND (E) ISSUING ITS OWN COMMON
STOCK IN ANY QUALIFYING EQUITY ISSUANCE.
(B)
HOLDINGS AND THE COMPANY WILL NOT (I) PERMIT ANY PERSON (OTHER
THAN THE COMPANY, ANY CO-BORROWER OR ANY WHOLLY-OWNED SUBSIDIARY GUARANTOR) TO
OWN ANY EQUITY INTEREST OF ANY SUBSIDIARY OF THE COMPANY, (II) PERMIT ANY
SUBSIDIARY OF THE COMPANY TO ISSUE EQUITY INTERESTS TO ANY PERSON, EXCEPT (A)
THE COMPANY, A CO-BORROWER OR ANY WHOLLY-OWNED SUBSIDIARY GUARANTOR OR (B) TO
QUALIFY DIRECTORS WHERE REQUIRED BY APPLICABLE LAW OR TO SATISFY OTHER
REQUIREMENTS OF APPLICABLE LAW WITH RESPECT TO THE OWNERSHIP OF EQUITY INTERESTS
OF FOREIGN SUBSIDIARIES OR (III) PERMIT THE COMPANY OR ANY SUBSIDIARY OF THE
COMPANY TO ISSUE ANY SHARES OF PREFERRED STOCK.
(C)
HOLDINGS AND THE COMPANY WILL NOT PERMIT ANY PERSON OTHER THAN
HOLDINGS TO HOLD ANY EQUITY INTERESTS OR EQUITY EQUIVALENTS OF THE COMPANY OR
ANY PERSON OTHER THAN THE COMPANY, AND WHOLLY-OWNED DOMESTIC SUBSIDIARY OF THE
COMPANY AND DRI I TO HOLD ANY EQUITY INTERESTS OF EQUITY EQUIVALENTS OF DUANE
READE.
SECTION 7.13
SALE AND LEASEBACK TRANSACTIONS.
NO GROUP COMPANY WILL, DIRECTLY
OR INDIRECTLY BECOME OR REMAIN LIABLE AS