AND AS SUPPLEMENTED FROM TIME TO TIME UP TO AND INCLUDING THE CLOSING DATE,
CONTAINS ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITS ANY MATERIAL FACT
NECESSARY TO MAKE THE STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER
WHICH THEY WERE MADE, NOT MISLEADING.
SECTION 5.16
COMPLIANCE WITH LAW.
EACH GROUP COMPANY IS IN COMPLIANCE WITH ALL
REQUIREMENTS OF LAW (INCLUDING ENVIRONMENTAL LAWS) APPLICABLE TO IT OR TO ITS
PROPERTIES, EXCEPT FOR ANY SUCH FAILURE TO COMPLY WHICH COULD NOT REASONABLY BE
EXPECTED TO CAUSE A MATERIAL ADVERSE EFFECT.
TO THE KNOWLEDGE OF THE LOAN
PARTIES AS OF THE CLOSING DATE, NONE OF THE GROUP COMPANIES OR ANY OF THEIR
RESPECTIVE MATERIAL PROPERTIES OR ASSETS IS SUBJECT TO OR IN DEFAULT WITH
RESPECT TO ANY JUDGMENT, WRIT, INJUNCTION, DECREE OR ORDER OF ANY COURT OR OTHER
GOVERNMENTAL AUTHORITY.
AS OF THE CLOSING DATE, NONE OF THE GROUP COMPANIES HAS
RECEIVED ANY WRITTEN COMMUNICATION FROM ANY GOVERNMENTAL AUTHORITY THAT ALLEGES
THAT ANY OF THE GROUP COMPANIES IS NOT IN COMPLIANCE IN ANY MATERIAL RESPECT
WITH ANY LAW, EXCEPT FOR ALLEGATIONS THAT HAVE BEEN SATISFACTORILY RESOLVED AND
ARE NO LONGER OUTSTANDING.
SECTION 5.17
INTELLECTUAL PROPERTY.
EXCEPT AS SET FORTH IN SCHEDULE 5.17
HERETO, THE COMPANY AND ITS SUBSIDIARIES OWN, OR POSSESS THE RIGHT TO USE, ALL
OF THE TRADEMARKS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS, PATENTS, PATENT
RIGHTS, FRANCHISES, LICENSES AND OTHER RIGHTS THAT ARE REASONABLY NECESSARY FOR
THE OPERATION OF THEIR RESPECTIVE BUSINESSES, EXCEPT FOR THOSE RIGHTS THE
FAILURE TO OWN OR POSSESS COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.
TO THE BEST KNOWLEDGE OF THE COMPANY, NO SLOGAN OR OTHER
ADVERTISING DEVICE, PRODUCT, PROCESS, METHOD, SUBSTANCE, PART OR OTHER MATERIAL
NOW EMPLOYED, OR NOW CONTEMPLATED TO BE EMPLOYED, BY THE COMPANY OR ANY
SUBSIDIARY INFRINGES UPON ANY INTELLECTUAL PROPERTY RIGHTS HELD BY ANY OTHER
PERSON.
SECTION 5.18
PURPOSE OF LOANS.
THE PROCEEDS OF THE LOANS WILL BE USED ON THE
CLOSING DATE BY DUANE READE AND THE COMPANY TO PREPAY LOANS OUTSTANDING UNDER
THE ABL CREDIT AGREEMENT, TO FUND A PORTION OF THE EXISTING CONVERTIBLE NOTES
ESCROW ACCOUNT AND TO PAY TRANSACTION FEES AND EXPENSES.
SECTION 5.19
LABOR MATTERS.
THERE ARE NO STRIKES AGAINST HOLDINGS OR ANY OF
ITS SUBSIDIARIES, OTHER THAN ANY STRIKES THAT, INDIVIDUALLY OR IN THE AGGREGATE,
COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.
THE
CONSUMMATION OF THE TRANSACTIONS WILL NOT GIVE RISE TO A RIGHT OF TERMINATION OR
RIGHT OF RENEGOTIATION ON THE PART OF ANY UNION UNDER ANY COLLECTIVE BARGAINING
AGREEMENT TO WHICH HOLDINGS OR ANY OF ITS SUBSIDIARIES IS A PARTY OR BY WHICH
HOLDINGS OR ANY OF ITS SUBSIDIARIES (OR ANY PREDECESSOR) IS BOUND, OTHER THAN
COLLECTIVE BARGAINING AGREEMENTS WHICH, INDIVIDUALLY OR IN THE AGGREGATE, ARE
NOT MATERIAL TO HOLDINGS AND ITS SUBSIDIARIES TAKEN AS A WHOLE.
SECTION 5.20
SOLVENCY.
EACH LOAN PARTY IS AND, AFTER CONSUMMATION OF THE
TRANSACTIONS, WILL BE SOLVENT.
SECTION 5.21
COLLATERAL DOCUMENTS.
(A)
ARTICLE 9 COLLATERAL.
EACH OF THE