Document:

Exhibit
10.24

 

REGISTRATION
RIGHTS AGREEMENT

 

 

by
and among

 

 

Duane
Reade Inc.

 

Duane Reade
GP

 

The
Guarantors named herein

 

and

 

Banc of
America Securities LLC

 

Credit
Suisse First Boston LLC

 

Dated as of
December 20, 2004

 

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration Rights
Agreement (this “Agreement”) is made and entered into as of December 20, 2004,
by and among Duane Reade Inc., a Delaware corporation (the “Company”), Duane
Reade, a New York general partnership and subsidiary of the Company (“Duane
Reade GP”, and together with the Company, the “Issuers”),  Duane Reade Holdings, Inc., a Delaware
corporation (“Holdings”) and each of the direct and indirect domestic
subsidiaries of the Company named herein (other than Duane Reade GP)
(collectively, the “Guarantors”), and Banc of America Securities LLC and Credit
Suisse First Boston LLC (collectively, the “Initial Purchasers”), each of whom
has agreed to purchase the Issuers’ Senior Secured Floating Rate Notes due 2010
(the “Initial Securities”).

 

This Agreement is
made pursuant to the (i) Purchase Agreement, dated December 8, 2004, by
and among the Initial Purchasers and the Company, and the (ii) Purchase
Agreement dated December 8, 2004, by and between Banc of America Securities LLC
and the Company ((i) and (ii) together, the “Purchase Agreements”), the Issuers
and the Guarantors
(a) for the benefit of the Initial Purchasers and (b) for the benefit of the
holders from time to time of the Initial Securities, including the Initial
Purchasers. In order to induce the Initial Purchasers to purchase the Initial
Securities, the Issuers and the Guarantors have agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this
Agreement is a condition to the obligations of the Initial Purchasers set forth
in Section 5(k) of the Purchase Agreements.

 

The parties hereby
agree as follows:

 

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

 

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

 

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

 

Closing
Date:  The date of this Agreement.

 

Commission:  The Securities and Exchange Commission.

 

Company:  As defined in the preamble hereto.

 

Consummate:  A registered Exchange Offer shall be deemed “Consummated”
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Securities Act of the Exchange Offer Registration
Statement relating to the Exchange Securities to be issued in the Exchange
Offer, (ii) the maintenance of such Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than
the minimum period required pursuant to Section 3(b) hereof, and (iii) the
delivery by the Issuers to the Registrar under the Indenture of Exchange
Securities in the same aggregate principal amount

 

 

as the aggregate principal amount of Initial
Securities that were tendered by Holders thereof pursuant to the Exchange
Offer.

 

Duane
Reade GP:  As defined in the recitals hereto.

 

Effectiveness
Target Date:  As defined in Section 5 hereof.

 

Exchange
Act:  The Securities Exchange Act of 1934.

 

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

 

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

 

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

 

Guarantors:  As defined in the recitals hereto.

 

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

 

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

 

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

 

Initial
Purchasers:  As defined in the preamble hereto.

 

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

 

Initial
Securities:  As defined in the preamble hereto.

 

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

 

Issuers:  As defined in the preamble hereto.

 

NASD:  NASD Inc.

 

 

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

 

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

 

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

 

Purchase
Agreements:  As defined in the recitals hereto.

 

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

 

Registration
Default:  As defined in Section 5 hereof.

 

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

 

Securities:  The Initial Securities and the Exchange Securities.

 

Securities
Act:  The Securities Act of 1933.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

SECTION 2.  Securities Subject to this
Agreement.

 

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

 

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

 

SECTION 3.  Registered Exchange Offer.

 

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

 

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

 

 

securities other than the
Exchange Securities shall be included in the Exchange Offer Registration
Statement. The Issuers shall use their reasonable best efforts to cause the
Exchange Offer to be Consummated on or prior to the 210th day after
the Closing Date.

 

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

 

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

 

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

 

SECTION 4.  Shelf Registration.

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

 

 

the Issuers or one of its
affiliates then, upon such Holder’s or Initial Purchaser’s request, the Issuers
shall

 

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

 

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

 

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

 

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

 

(c)  Suspension.  Notwithstanding anything to the contrary and
subject to the limitation set forth in the next succeeding paragraph, at any
time after the effectiveness of the Shelf Registration Statement, each of the
Issuers shall be entitled to suspend its obligation to file any amendment to
the Shelf Registration Statement, furnish any supplement or amendment to a

 

 

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

 

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

 

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

 

 

cure of all Registration
Defaults relating to any particular Transfer Restricted Securities, the
Liquidated Damages will cease to accrue from the date of such cure and the
interest rate on the Transfer Restricted Securities will revert to the original
interest rate borne by such Transfer Restricted Securities; provided, however, that, if after the date
such Liquidated Damages cease to accrue, a different Registration Default
occurs, Liquidated Damages may again commence accruing pursuant to the
foregoing provisions.

 

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

 

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

 

SECTION 6.  Registration Procedures.

 

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

 

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

 

(ii)  As a condition to its participation in the
Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the

 

 

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

 

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

 

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

 

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

 

 

Issuers shall file as promptly as practicable an
appropriate amendment to such Registration Statement, in the case of clause
(A), correcting any such misstatement or omission, and, in the case of either
clause (A) or (B), use its reasonable best efforts to cause such amendment to
be declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;

 

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

 

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

 

 

order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
blue sky laws, each of the Issuers shall use its reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest practicable
time;

 

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

 

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

 

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

 

 

subsequent to the filing thereof and prior to its
effectiveness and to be available for discussion of such documents to the
extent reasonably requested by any Holder, Initial Purchaser or underwriter;

 

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

 

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

 

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

 

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

 

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

 

 

entered into and whether or not the registration is an
Underwritten Registration, each of the Issuers and Guarantors shall:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

(xii)  in the case of a Shelf Registration
Statement, prior to any public offering of Transfer Restricted Securities, use
its reasonable best efforts to cooperate with the selling Holders, the
underwriter(s), if any, and their respective counsel in connection with the
registration and qualification of the Transfer Restricted Securities under the
state securities or blue sky laws of such jurisdictions as the selling Holders
or underwriter(s), if any, may reasonably request in writing by the time the Shelf
Registration Statement is declared effective by the Commission, it being agreed
that no such registration or qualification will be made unless so requested and
use its reasonable best efforts to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however, that none of the Issuers or the
Guarantors shall be required to register or qualify as a foreign corporation
where it is not then so qualified or to take any action that would subject it
to the service of process in suits or to taxation in any jurisdiction where it
is not then so subject;

 

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

 

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

 

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

 

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

 

 

that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such determination;

 

(xvii)  provide a CUSIP number for all Exchange
Securities or Transfer Restricted Securities, as the case may be, not later
than the effective date of the Registration Statement covering such Securities
and provide the Trustee under the Indenture with any necessary printed
certificates for such Securities which are in a form eligible for deposit with
the Depository Trust Company;

 

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

 

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

 

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

 

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

 

Each Holder agrees
by acquisition of a Transfer Restricted Security that, upon (i) receipt of any
notice from the Company of the existence of any fact of the kind described in
Section 6(c)(iii)(D) hereof, or (ii) a Suspension Period, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the applicable Registration Statement until such Holder’s receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi)
hereof, or until it is advised in writing (the “Advice”) by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus.  If so

 

 

directed by the Company, each Holder will deliver to
the Company(at such Holder’s expense) all copies, other than permanent file
copies then in such Holder’s possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such
notice.  In the event the Company shall
give any such notice, the time period regarding the effectiveness of such
Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall
be extended by the number of days during the period from and including the date
of the giving of such notice described in (i) or (ii) of this paragraph to and
including the date when each selling Holder covered by such Registration Statement
shall have received the copies of the supplemented or amended Prospectus
contemplated by Section 6(c)(xvi) hereof or shall have received the Advice.

 

SECTION 7.  Registration Expenses.

 

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

 

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

 

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

 

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

 

 

SECTION 8.  Indemnification.

 

(a)  Each of the Issuers and Guarantors, jointly
and severally, agrees to indemnify and hold harmless (i) each Holder and (ii)
each Person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) any Holder (any of the
Persons referred to in this clause (ii) being hereinafter referred to as a “controlling
person”) and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Holder or any controlling person (any Person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “Indemnified
Holder”), to the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, judgments, actions and expenses (including,
without limitation, and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing, settling, compromising, paying or defending
any claim or action, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, including the reasonable fees and
expenses of any one firm of legal counsel to any Indemnified Holder), arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus (or any
amendment or supplement thereto), or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of an untrue statement or omission
or alleged untrue statement or omission that is made in reliance upon and in
conformity with information relating to any of the Holders furnished in writing
to the Company by any of the Holders expressly for use therein; and provided, further, that
this indemnity agreement shall not apply to any loss, claim, damage, liability
or expense arising from an offer or sale of Transfer Restricted Securities
occurring during a Suspension Period, if a notice of such Suspension Period was
given to and received by such Person. 
This indemnity agreement shall be in addition to any liability which the
Issuers and the Guarantors may otherwise have.

 

In case any action
or proceeding (including any governmental or regulatory investigation or
proceeding) shall be brought or asserted against any of the Indemnified Holders
with respect to which indemnity may be sought against the Issuers or the
Guarantors, such Indemnified Holder (or the Indemnified Holder controlled by
such controlling person) shall promptly notify the Issuers and the Guarantors
in writing; provided, however, that the failure to
give such notice shall not relieve any of the Issuers or the Guarantors of its
obligations pursuant to this Agreement to the extent it is not materially
prejudiced as a proximate result of such failure.  Each of the Issuers and Guarantors may
participate at its own expense in the defense of such action.  Such Indemnified Holder shall have the right
to employ its own counsel in any such action and the fees and expenses of such
counsel shall be paid, as incurred, by the Issuers and the Guarantors
(regardless of whether it is ultimately determined that an Indemnified Holder
is not entitled to indemnification hereunder). 
The Issuers and the Guarantors shall not, collectively, in connection
with any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for such
Indemnified Holders, which firm shall be designated by the Holders.  The Issuers and the Guarantors shall be
liable for any settlement of any such action or proceeding effected with the
Issuers’ and the Guarantors’ prior written consent, which consent shall not be
withheld unreasonably, and each of the Issuers and Guarantors agrees to
indemnify and hold harmless any

 

 

Indemnified Holder from and against any loss, claim,
damage, liability or expense by reason of any settlement of any action effected
with the written consent of the Issuers and the Guarantors.  The Issuers and the Guarantors shall not,
without the prior written consent of each Indemnified Holder, settle or
compromise or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, claim, litigation or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not any Indemnified Holder is a party thereto), unless such
settlement, compromise, consent or termination includes an unconditional
release of each Indemnified Holder from all liability arising out of such
action, claim, litigation or proceeding.

 

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

 

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

 

 

and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 8(a)
hereof, any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim.

 

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

 

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

 

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

 

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

 

 

SECTION 12.  Miscellaneous.

 

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

 

(b)  No Inconsistent
Agreements.  Each of the Issuers and Guarantors
will not on or after the date of this Agreement enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof.  The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of any of the Issuers’ or Guarantors’
securities under any agreement in effect on the date hereof.

 

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

 

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

 

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

 

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

 

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

	
   

  	
  Duane Reade Inc.

  
	
   

  	
  440 Ninth Avenue

  
	
   

  	
  New York, New York
  10001

  
	
   

  	
  Facsimile: 

  	
  212-594-0832

  
	
   

  	
  Attention: 

  	
  Michelle Bergman, Esq.

  
	
   

  	
   

  	
  General Counsel

  

 

With a copy to:

	
   

  	
  Paul, Weiss, Rifkind, Wharton & Garrison LLP

  
	
   

  	
  1285 Avenue of the Americas

  
	
   

  	
  New York, New York 10019

  

 

 

	
   

  	
  Facsimile:

  	
  212-757-3990

  
	
   

  	
  Attention:

  	
  Lawrence G. Wee, Esq.

  

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

	
   

  	
  Duane Reade Inc., a Delaware 

  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN K.
  HENRY

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  John K. Henry

  
	
   

  	
  Title:

  	
  Senior Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Duane Reade, a New York general

  partnership

  
	
   

  	
   

  
	
   

  	
  By: Duane Reade Inc., as general

  partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN K.
  HENRY

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  John K. Henry

  
	
   

  	
  Title:

  	
  Senior Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: DRI I, Inc., as general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN K.
  HENRY

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  John K. Henry

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
					

 

 

	
   

  	
  Duane Reade Holdings, Inc., a

  
	
   

  	
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN K.
  HENRY

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:     John
  K. Henry

  
	
   

  	
  Title:       Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DRI I, Inc., a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN K.
  HENRY

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:     John
  K. Henry

  
	
   

  	
  Title:       Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Duane Reade
  International, Inc., a

  
	
   

  	
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN K. HENRY

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:     John K. Henry

  
	
   

  	
  Title:       Senior Vice President and Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Duane Reade Realty,
  Inc., a

  
	
   

  	
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN K. HENRY

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:     John K. Henry

  
	
   

  	
  Title:       Chief Financial Officer

  

 

 

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

 

	
  BANC OF AMERICA SECURITIES LLC

  	
   

  
	
  CREDIT SUISSE FIRST BOSTON LLC

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Banc of America Securities LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ BRAD JONES

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Brad Jones

  	
   

  
	
   

  	
  Title: 

  	
  Managing DirectorExhibit
10.25

 

Execution Copy

 

 

AMENDED
AND RESTATED SECURITY AGREEMENT

 

 

dated as of December 20, 2004

 

 

among

 

 

THE LOAN PARTIES FROM TIME TO TIME
PARTY HERETO

 

 

and

 

 

US BANK NATIONAL ASSOCIATION,

as Collateral Agent

 

 

TABLE OF CONTENTS*

 

	
  ARTICLE I

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Defined Terms

  	
   

  
	
  Section 1.02

  	
  Terms
  Defined in the UCC

  	
   

  
	
  Section 1.03

  	
  Additional
  Definitions

  	
   

  
	
  Section 1.04

  	
  Terms Generally

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
  SECURITY
  INTERESTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Grant
  of Security Interests

  	
   

  
	
  Section 2.02

  	
  Continuing
  Liability of Each Loan Party

  	
   

  
	
  Section 2.03

  	
  Security
  Interests Absolute

  	
   

  
	
  Section 2.04

  	
  Segregation
  of Proceeds; Cash Proceeds Account.

  	
   

  
	
  Section 2.05

  	
  Reinvestment
  Funds Account.

  	
   

  
	
  Section 2.06

  	
  Prepayment
  Account

  	
   

  
	
  Section 2.07

  	
  Investment
  of Funds in Collateral Accounts

  	
   

  
	
  Section 2.08

  	
  Collateral
  Agent Not Responsible

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Title to
  Collateral

  	
   

  
	
  Section 3.02

  	
  Validity,
  Perfection and Priority of Security Interests.

  	
   

  
	
  Section 3.03

  	
  Fair
  Labor Standards Act

  	
   

  
	
  Section 3.04

  	
  No Consents

  	
   

  
	
  Section 3.05

  	
  Deposit
  and Securities Accounts

  	
   

  
	
  Section 3.06

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Delivery
  of Perfection Certificate; Initial Perfection and Delivery of Search Reports

  	
   

  
	
  Section 4.02

  	
  Change
  of Name, Identity, Structure or Location; Subjection to Other Security
  Agreements

  	
   

  
	
  Section 4.03

  	
  Further Actions

  	
   

  
	
  Section 4.04

  	
  Collateral
  in Possession of Other Persons, Leased Real Property Locations

  	
   

  
	
  Section 4.05

  	
  Books and
  Records

  	
   

  
	
  Section 4.06

  	
  Delivery
  of Instruments, Etc

  	
   

  
	
  Section 4.07

  	
  Notification
  to Account Debtors

  	
   

  

 

*                                         Table
of Contents is not a part of the Security Agreement.

 

i

 

	
  Section 4.08

  	
  Certificates
  of Title

  	
   

  
	
  Section 4.09

  	
  Disposition
  of Collateral

  	
   

  
	
  Section 4.10

  	
  Insurance

  	
   

  
	
  Section 4.11

  	
  Information
  Regarding Collateral

  	
   

  
	
  Section 4.12

  	
  Covenants
  Regarding Intellectual Property

  	
   

  
	
  Section 4.13

  	
  Deposit
  Accounts and Securities Accounts

  	
   

  
	
  Section 4.14

  	
  Electronic
  Chattel Paper

  	
   

  
	
  Section 4.15

  	
  Claims

  	
   

  
	
  Section 4.16

  	
  After-Acquired
  Property

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
  GENERAL AUTHORITY; REMEDIES

  	
   

  
	
   

  	
   

  
	
  Section 5.01

  	
  General
  Authority

  	
   

  
	
  Section 5.02

  	
  Remedies
  upon Event of Default.

  	
   

  
	
  Section 5.03

  	
  Limitation
  on Duty of Collateral Agent in Respect of Collateral

  	
   

  
	
  Section 5.04

  	
  Application
  of Proceeds.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
  COLLATERAL
  AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Resignation
  of the Term Loan Collateral Agent and Appointment of the Collateral Agent

  	
   

  
	
  Section 6.02

  	
  Concerning
  the Collateral Agent

  	
   

  
	
  Section 6.03

  	
  Appointment
  of Co-Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Notices

  	
   

  
	
  Section 7.02

  	
  No
  Waivers; Non-Exclusive Remedies

  	
   

  
	
  Section 7.03

  	
  Compensation
  and Expenses of the Collateral Agent; Indemnification.

  	
   

  
	
  Section 7.04

  	
  Enforcement

  	
   

  
	
  Section 7.05

  	
  Amendments
  and Waivers

  	
   

  
	
  Section 7.06

  	
  Successors
  and Assigns

  	
   

  
	
  Section 7.07

  	
  Governing Law

  	
   

  
	
  Section 7.08

  	
  Limitation
  of Law; Severability.

  	
   

  
	
  Section 7.09

  	
  Counterparts;
  Effectiveness

  	
   

  
	
  Section 7.10

  	
  Additional Loan
  Parties

  	
   

  
	
  Section 7.11

  	
  Termination; Release
  of Loan Parties.

  	
   

  
	
  Section 7.12

  	
  Entire Agreement

  	
   

  

 

ii

 

	
  Schedules:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.01A

  	
  -

  	
  Claims

  	
   

  
	
  Schedule 1.01B

  	
  -

  	
  Excluded Deposit
  Accounts and Restricted Deposit Accounts

  	
   

  
	
  Schedule 3.04

  	
  -

  	
  Consents

  	
   

  
	
  Schedule 3.05

  	
  -

  	
  Deposit Accounts and
  Securities Accounts

  	
   

  
	
  Schedule 4.01

  	
  -

  	
  Filings to Perfect
  Security Interests

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibits:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Assignment of
  Security Interest in United States Patents and Trademarks

  	
   

  
	
  Exhibit B

  	
  -

  	
  Form of Assignment of
  Security Interest in United States Copyrights

  	
   

  
	
  Exhibit C-1

  	
  -

  	
  Form of Blocked Account
  Service Agreement

  	
   

  
	
  Exhibit C-2

  	
  -

  	
  Form of Deposit Account
  Control Agreement

  	
   

  
	
  Exhibit
  D

  	
  -

  	
  Form of Consent
  to Assignment of Letter of Credit Proceeds

  	
   

  
	
  Exhibit
  E

  	
  -

  	
  Form of Description
  of Collateral

  	
   

  
	
  Exhibit
  F

  	
  -

  	
  Form of
  Perfection Certificate

  	
   

  
	
  Exhibit G

  	
  -

  	
  Form of Accession Agreement

  	
   

  

 

iii

 

AMENDED AND RESTATED SECURITY
AGREEMENT dated as of December 20, 2004 (as amended,
modified or supplemented from time to time, this “Amended Agreement”)
among the LOAN PARTIES from time to time party hereto US BANK NATIONAL
ASSOCIATION, as successor to Bank of America, N.A., as Collateral Agent for the
benefit of the Finance Parties referred to herein (together with its successor
or successors in such capacity, the “Collateral Agent”) and, solely for
purposes of Section 6.01, BANK OF AMERICA, N.A. (the “Term Loan
Collateral Agent”).

 

Duane
Reade Holdings, Inc., a Delaware corporation (“Holdings”), Duane Reade
Inc., a Delaware corporation (“DRI”), and Duane Reade, a New York
general partnership (“Duane Reade”), are parties to a Senior Secured
Term Credit Agreement dated as of July 30, 2004 (the “Existing Term
Credit Agreement”) among DRI and Duane Reade, as the Borrowers thereunder
(collectively, the “Term Loan Borrowers”), Holdings, the co-borrowers
from time to time party thereto (the “Term Loan Co-Borrowers”), the
lenders from time to time party thereto, Bank of America, N.A., as
Administrative Agent (the “Term Loan Administrative Agent”), Credit
Suisse First Boston, Cayman Islands Branch, as Syndication Agent, and Citicorp
North America Inc. and Wells Fargo Bank, National Association, as
Co-Documentation Agents.  Term loans
(collectively, the “Existing Term Loans”) in an aggregate principal
amount of $155,000,000 are currently outstanding under the Existing Term Credit
Agreement.

 

Certain
Swap Creditors (as defined below) may from time to time provide forward rate
agreements, options, swaps, caps, floors, other financial derivatives
agreements and other combinations or hybrids of any of the foregoing.  The obligations of the Term Loan Borrowers
and the Term Loan Co-Borrowers under the Existing Term Credit Agreement and
under all Swap Agreements (as defined below) permitted under the Existing
Term  Credit Agreement are guaranteed by
Holdings and by DRI I, Inc., a Delaware corporation (“DRI I”), Duane
Reade International, Inc., a Delaware corporation (“DR International”),
and Duane Reade Realty, Inc., a Delaware corporation (“DR Realty”).  Holdings, DRI, Duane Reade, DRI I, DR
International and DR Realty are herein collectively referred to as the “Term
Loan Parties.”  The payment of the
principal of and interest on the Existing Term Loans and all other Term Loan
Obligations (as defined in the Existing Term Credit Agreement, the “Existing
Term Loan Obligations”) and all Swap Obligations (as defined below) of all
Term Loan Parties permitted under the Existing Term Credit Agreement owing to
one or more Swap Creditors are secured by security interests and other liens
held by the Term Loan Collateral Agent, as collateral agent under the Existing
Term Credit Agreement, in substantially all of the Term Loan Parties’ personal
property and all proceeds thereof (collectively, the “Term Loan Collateral”),
all pursuant to (i) the Security Agreement dated as of July 30, 2004 (the
“Term Security Agreement”) among the Term Loan Parties and the Term Loan
Collateral Agent, (ii) a Pledge Agreement dated as of July 30, 2004 among
the Term Loan Parties and the Term Loan Collateral Agent (the “Term Pledge
Agreement”) and (iii) certain other ancillary Collateral Documents (as
defined and referred to in the Existing Term Credit Agreement).

 

Duane
Reade, DRI, DRI I, DR International and DR Realty are also parties to (i) a
Credit Agreement dated as of July 21, 2003 (as amended by a First
Amendment to Credit Agreement dated as of July 22, 2004 and as the same
may be further amended, modified, supplemented, extended, restated, renewed or
replaced from time to time in accordance with the terms thereof, the “Revolving
Credit Agreement”) with the lenders from time to time party thereto (the “Revolving
Lenders”), Fleet National Bank, as issuing bank for certain letters of
credit, Fleet National Bank, as Administrative Agent for the Revolving Lenders
(together with its successor or successors in such capacity, the “Revolving
Credit Administrative Agent”), Fleet Retail Group, Inc., as Collateral
Agent (together with its successor or successors in such capacity, the “Revolving
Credit Collateral Agent”), Congress Financial Corporation, as Documentation
Agent, General Electric Capital Corporation, as Syndication Agent, and Wells
Fargo Retail Finance, LLC, as Syndication Agent and Co-Lead Arranger, and (ii)
a Security Agreement dated as of July 21, 2003 (as amended by the
Collateral Release Agreement dated as of July 30, 2004 and the First

 

 

Amendment to Security
Agreement dated as of July 30, 2004 and as the same may be further
amended, modified, supplemented, extended, restated, renewed or replaced from
time to time in accordance with the terms thereof, the “Revolving Security
Agreement”).  Duane Reade, DRI, DRI
I, DR International, DR Realty and each other Person now or hereafter becoming
a guarantor of the obligations under the Revolving Credit Agreement are herein
collectively referred to as the “Revolving Loan Parties.”  Revolving loans (collectively, “Revolving
Loans”) are now and may hereafter be outstanding under the Revolving Credit
Agreement.  The payment of the principal
of and interest on the Revolving Loans and all other Obligations (as defined in
the Revolving Credit Agreement and the Revolving Security Agreement, the “Revolving
Loan Obligations”) are secured pursuant to the Revolving Security Agreement
and various other security documents by security interests and other liens held
by the Revolving Credit Collateral Agent in the Revolving Loan Parties’ right,
title and interest in all present and future (i) accounts, inventory, chattel
paper, instruments, documents, prescription files, tax refunds and abatements
and deposit accounts, (ii) all letter of credit rights and supporting
obligations related to the items referred to in the foregoing clause (i),
(iii) all books and records relating to any of the foregoing, (iv) all payment
intangibles constituting proceeds of the foregoing and (v) all other products
and proceeds of the foregoing (including insurance proceeds related thereto)
(collectively, the “Revolving Lender Priority Collateral”).

 

The
Revolving Credit Collateral Agent and the Term Loan Collateral Agent are
parties to an Intercreditor Agreement dated as of July 30, 2004 (as
amended, restated, supplemented or modified from time to time, the “Intercreditor
Agreement”) which provides among other things that: (i) the Revolving Loan
Obligations (up to an amount (the “Maximum Revolving Debt Amount”) equal
to the greater of (A) $275,000,000 and (B) the sum of the Borrowing Base,
exclusive of Reserves, plus Permitted Overadvances (as such terms are defined
in the Revolving Credit Agreement as in effect as of the date hereof) plus in
each case all accrued and unpaid interest, fees, expense reimbursements and
other charges then due to the Revolving Lenders) are secured on a first
priority basis by all Revolving Lender Priority Collateral; (ii) the Existing
Term Loan Obligations are secured by all Term Loan Collateral (which includes
all Revolving Loan Priority Collateral); (iii) the Revolving Loan Obligations
are not secured by any Term Loan Collateral except that portion of the Term
Loan Collateral which constitutes Revolving Lender Priority Collateral; (iv)
the portion of the Term Loan Collateral that does not constitute Revolving
Lender Priority Collateral constitutes “Term Loan Priority Collateral”;
and (v) the security interest securing the Existing Term Loan Obligations: (A)
in the Term Loan Priority Collateral is of a first priority; and (B) in that
portion of the Term Loan Collateral which is Revolving Lender Priority
Collateral is (x) of a second priority subject only to a first priority
security interest securing an amount of the Revolving Loan Obligations that
does not exceed the Maximum Revolving Debt Amount and (y) is of a first
priority with respect to that portion of the Revolving Loan Obligations which
exceeds the Maximum Revolving Debt Amount.

 

DRI and
Duane Reade intend to issue Senior Secured Floating Rate Notes due 2010
(together with any Additional Notes referred to below and any Exchange Notes
(as defined in the Indenture), and as amended, restated, supplemented or
modified from time to time, the “Senior Secured Notes”) pursuant to an
Indenture dated as of the date hereof (as amended, restated, supplemented or
modified from time to time and including any agreement extending the maturity
of, refinancing or otherwise restructuring all or any portion of the
obligations of DRI and Duane Reade under such Indenture or any successor
agreement,, the “Indenture”) among DRI, Duane Reade and US Bank National
Association, as Trustee (together with its successor or successors in such
capacity, the “Trustee”).  The
obligations of DRI and Duane Reade under and in respect of the Senior Secured
Notes will be guaranteed by Holdings and by DRI I, DR International, DR Realty
and all other direct and indirect domestic subsidiaries of Holdings that become
a party hereto pursuant to Section 7.10 hereof (collectively with DRI I,
DR International and DR Realty, the “Subsidiary Guarantors” and,
together with Holdings, “Guarantors”). 
Holdings, DRI, Duane Reade, and the Subsidiary Guarantors are herein
referred to

 

2

 

individually as a “Loan
Party” and, collectively, as the “Loan Parties”.  The proceeds of the Senior Secured Notes
will be used to refinance the Existing Term Loans and to pay accrued interest
and the prepayment premium on the Existing Term Loans and related transaction
fees and expenses.  For the avoidance of
doubt, it is the intention of the parties to this Amended and Restated Security
Agreement that the security interests in the Term Loan Collateral created by the
Security Agreement in connection with the Existing Term Credit Agreement shall
be assigned to the Collateral Agent and continue to secure the Finance
Obligations as such term is amended by this Amended and Restated Security
Agreement.

 

Without
providing any commitments to any Loan Party as to the funding of future
indebtedness, the Indenture permits, and a Term Credit Agreement (as defined
below) may permit, DRI, Duane Reade and other Loan Parties from time to time to
incur Indebtedness which it is otherwise permitted to incur under the Indenture
and a Term Credit Agreement (as defined below) in the form of additional loans
or other debt financing (“Additional Term Loans”) pursuant to a Term
Credit Agreement or additional senior secured notes issued under the Indenture
(such notes being herein collectively referred to herein as the “Additional
Notes”) (or both) and to secure such additional Note/Term Obligations (as
defined below) equally and ratably with the other Finance Obligations; provided
that the borrowing of any Additional Term Loans and the issuance of any
Additional Notes is subject to the limitations set forth in the Indenture and
any Term Credit Agreement, respectively.

 

Holdings,
DRI and Duane Reade may, from time to time, borrow Additional Term Loans or
refinance all or a portion of the Note/Term Obligations by borrowing revolving
credit loans, term loans, receivables financing or letters of credit, including
arrangements and agreements relating to the sale of debt securities or other
forms of debt financing (and together with any Additional Term Loans, “Term
Loans”) from one or more banks or other institutional lenders (together
with the lenders of any Additional Term Loans, each a “Term Lender” and,
collectively, “Term Lenders”) in each case pursuant to a Term Credit
Agreement (as defined below) designated as such by the Secured Debt Designation
(as defined in the Collateral Agency Agreement referred to below) and with
respect to which a Term Loan Agent (as defined in the Collateral Agency Agreement
referred to below) thereunder has delivered the Joinder (as defined in the
Collateral Agency Agreement referred to below).

 

The
Indenture requires the Loan Parties to secure their obligations under the
Senior Secured Notes together with all Swap Obligations and their obligations
under any guaranties thereof, equally and ratably, with security interests or
other liens on the Term Loan Collateral. 
The Indenture further requires that such security interests in the Term
Loan Collateral be granted pursuant to security documents to a collateral agent
acting for the benefit of the Swap Creditors, the holders from time to time of
the Senior Secured Notes and any Term Lenders. 
Consequently, in contemplation of the incurrence of any Term Loans, the
Trustee and the Collateral Agent have entered into an Intercreditor and
Collateral Agency Agreement dated as of the date hereof (as amended, modified
or supplemented from time to time, the “Collateral Agency Agreement”)
which, among other things, governs certain actions of the Trustee, any Term
Loan Agent, the Swap Representative and the Collateral Agent in connection with
the Senior Secured Notes, any Term Loans, Swap Obligations and the Term Loan
Collateral, respectively.  In addition,
concurrently herewith and as provided for in Section 6.01, the Term
Loan Collateral Agent will resign, the Collateral Agent will succeed to all
rights and benefits of the Term Loan Collateral Agent under the Collateral
Documents and the Term Security Agreement will be amended and restated to read
in full as set forth herein

 

Accordingly,
the parties hereto amend and restate the Term Security Agreement to read in
full as follows:

 

3

 

ARTICLE I

DEFINITIONS

 

Section 1.01                            Defined Terms.  Terms defined in the introductory
section hereof have the respective meanings set forth therein.  Capitalized terms defined in the Collateral
Agency Agreement and not otherwise defined herein have, as used herein, the
respective meanings provided for therein.

 

Section 1.02                            Terms Defined in the UCC.  Unless otherwise defined herein or the
context otherwise requires, the following terms, together with any
uncapitalized terms used herein which are defined in the UCC, have the
respective meanings provided in the UCC: 
(i) As-Extracted Collateral; (ii) Certificated Security; (iii)
Chattel Paper; (iv) Documents; (v) Financial Asset; (vi) Instruments; (vii)
Inventory; (viii) Investment Property; (ix) Payment Intangibles; (x) Proceeds;
(xi) Securities Account; (xii) Securities Intermediary; (xiii) Security; (xiv)
Security Certificate; (xv) Security Entitlements; and (xvi) Uncertificated
Security.

 

Section 1.03                            Additional Definitions.  The following additional terms, as used
herein, have the following respective meanings:

 

“Account
Control Agreement” means (i) with respect to a Deposit Account, a deposit
account control agreement, substantially in the form of Exhibit C-1 or C-2
hereto (or in such other form as to which an opinion of counsel is delivered to
the Collateral Agent opining that such agreement is sufficient to grant the
Collateral Agent a perfected security interest under the UCC in such Deposit
Account), among one or more Loan Parties, the Collateral Agent, the bank which
maintains such Deposit Account, and in the case of Exhibit C-1, the
Revolving Credit Administrative Agent, and (ii) with respect to a Securities
Account, a securities account control agreement, substantially in the form of Exhibit
B to the Pledge Agreement, among one or more Loan Parties, the Collateral
Agent and the Securities Intermediary which maintains such Securities Account,
in each case as the same may be amended, modified or supplemented from time to
time.

 

“Accounts”
means (i) all “accounts” (as defined in the UCC), (ii) all of the rights of any
Loan Party in, to and under all purchase orders for goods, services or other
property, (iii) all of the rights of any Loan Party to any goods, services or
other property represented by any of the foregoing (including returned or
repossessed goods and unpaid seller’s rights of rescission, replevin,
reclamation and rights to stoppage in transit) and (iv) all monies due to or to
become due to any Loan Party under any and all contracts for any of the
foregoing (in each case, whether or not yet earned by performance on the part
of such Loan Party), including, without limitation, the right to receive the
Proceeds of said purchase orders and contracts, all Supporting Obligations of
any kind given by any Person with respect to all or any of the foregoing.

 

“Account
Debtor” means an “account debtor” (as defined in the UCC), and also means
and includes Persons obligated to pay negotiable instruments and other
Receivables.

 

“Assigned
Agreements” means with respect to each Loan Party those contracts and
agreements, if any, of such Loan Party identified in or pursuant to Section VI
of such Loan Party’s Perfection Certificate, as the same may be amended,
modified or supplemented from time to time, and all Supporting Obligations of
any kind given by any Person with respect to all or any of the foregoing.

 

“Capital
Lease Obligations” of any Person means any obligation of such Person and
its Restricted Subsidiaries on a consolidated basis under any capital lease of
(or other agreement conveying the right to use) real or personal property
which, in accordance with GAAP, is required to be capitalized on a balance
sheet.

 

4

 

“Capital
Stock” has the meaning given to it in the Indenture.

 

“Cash
Equivalents” means:

 

(i)                                     any
evidence of Indebtedness issued or directly and fully guaranteed or insured by
the United States or any agency or instrumentality thereof;

 

(ii)                                  deposits,
time deposit accounts, certificates of deposit, money market deposits or
acceptances of any financial institution having capital and surplus in excess
of $500 million that is a member of the Federal Reserve System and whose
senior unsecured debt is rated at least “A-1” by S&P, or at least “P-1” by
Moody’s;

 

(iii)                               commercial
paper with a maturity of 365 days or less issued by a corporation (other
than an Affiliate or Subsidiary of DRI) organized and existing under the laws
of the United States of America, any state thereof or the District of Columbia
and rated at least “A-1” by S&P or at least “P-1” by Moody’s;

 

(iv)                              repurchase
agreements and reverse repurchase agreements relating to marketable direct
obligations issued or unconditionally guaranteed by the United States or issued
by any agency thereof and backed by the full faith and credit of the United
States maturing within 365 days from the date of acquisition; and

 

(v)                                 money
market funds which invest substantially all of their assets in securities
described in the foregoing clauses (i) through (iv).

 

“Cash
Proceeds Account” has the meaning set forth in Section 2.04(a)
of this Amended Agreement.

 

“Claims”
means all “commercial tort claims” (as defined in the UCC), including, without
limitation, each of the claims described on Schedule 1.01 hereto,
as such Schedule may be amended, modified or supplemented from time to
time, and also means and includes all claims, causes of action and similar
rights and interests (however characterized) of a Loan Party, whether arising
in contract, tort or otherwise, and whether or not subject to any action, suit,
investigation or legal, equitable, arbitration or administrative proceedings.

 

“Collateral”
has the meaning set forth in Section 2.01 of this Amended
Agreement.

 

“Collateral
Accounts” means one or more of the Cash Proceeds Account, the Reinvestment
Funds Account, the Prepayment Account and any other Securities Accounts or
Deposit Accounts established with or in the possession or under the control of
the Collateral Agent into which cash or cash Proceeds (including cash Proceeds
of insurance policies, awards of condemnation or other compensation) of any
Collateral are deposited from time to time, collectively.

 

“Collateral
Agent” means US Bank National Association, as successor to the Term Loan
Collateral Agent, in its capacity as collateral agent for the Finance Parties,
and its successor or successors in such capacity.

 

“Computer
Hardware” means all computer and other electronic data processing hardware
of a Loan Party, whether now or hereafter owned, licensed or leased by such
Loan Party, including, without limitation, all integrated computer systems,
central processing units, memory units, display terminals, printers, features,
computer elements, card readers, tape drives, hard and soft disk drives,

 

5

 

cables, electrical supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware, all documentation, flowcharts, logic diagrams,
manuals, specifications, training materials, charts and pseudo codes associated
with any of the foregoing and all options, warranties, services contracts,
program services, test rights, maintenance rights, support rights, renewal
rights and indemnifications relating to any of the foregoing.

 

“Copyright”
means any of the following, whether now existing or hereafter arising, created
or acquired:

 

(vi)                              the
United States and foreign copyrights described on Schedule V to any
Loan Party’s Perfection Certificate (as each such schedule may be amended,
modified or supplemented from time to time) and any renewals thereof;

 

(vii)                           all
other common law and/or statutory rights in all copyrightable subject matter
under the Laws of the United States or any other country (whether or not the
underlying works of authorship have been published);

 

(viii)                        all
registrations and applications for registration of any such copyright in the
United States or any other country, including registrations, recordings,
supplemental, derivative or collective work registrations and pending
applications for registrations in the United States Copyright Office or any
other country;

 

(ix)                                all
tangible property embodying or incorporating any or all of the foregoing,
whether in completed form or in some lesser state of completion, and all
masters, duplicates, drafts, versions, variations and copies thereof, in all
formats;

 

(x)                                   all
claims for, and rights to sue for, past, present and future infringement of any
of the foregoing;

 

(xi)                                all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including, without limitation, damages and
payments for past, present or future infringements thereof and payments and
damages under all Copyright Licenses in connection therewith; and

 

(xii)                             all
rights in any of the foregoing, whether arising under the Laws of the United
States or any foreign country or otherwise, to copy, record, synchronize,
broadcast, transmit, perform and/or display any of the foregoing or any matter
which is the subject of any of the foregoing in any manner and by any process
now known or hereafter devised.

 

“Copyright
Assignment” means a Grant of Security Interest in United States Copyrights,
substantially in the form of Exhibit B to this Amended Agreement,
between one or more Loan Parties and the Collateral Agent, as the same may be
amended, modified or supplemented from time to time.

 

“Copyright
License” means any agreement now or hereafter in existence granting to any
Loan Party any rights, whether exclusive or non-exclusive, to use another
Person’s copyrights or copyright applications, or pursuant to which any Loan
Party has granted to any other Person, any right, whether exclusive or
non-exclusive, with respect to any Copyright, whether or not registered,
including, without limitation, the Copyright Licenses described on Schedule V
to any Loan Party’s Perfection Certificate (as each such schedule may be
amended, modified or supplemented from time to time).

 

6

 

“Default”
means any event which is, or after notice or passage of time or both would be,
an Event of Default.

 

“Deposit
Accounts” means all “deposit accounts” (as defined in the UCC) and also
means and includes all demand, time, savings, passbook or similar accounts
maintained by a Loan Party with a bank or other financial institution, whether
or not evidenced by an Instrument, all cash and other funds held therein and
all passbooks related thereto and all certificates and Instruments, if any,
from time to time representing, evidencing or deposited into such deposit
accounts.

 

“Equipment”
means all “equipment” (as defined in the UCC), including all items of
machinery, equipment, Computer Hardware, furnishings and fixtures of every
kind, whether or not affixed to real property, as well as all motor vehicles,
automobiles, trucks, trailers, railcars, barges and vehicles of every
description, handling and delivery equipment, all additions to, substitutions
for, replacements of or accessions to any of the foregoing, all attachments,
components, parts (including spare parts) and accessories whether installed
thereon or affixed thereto and all fuel for any thereof and all options,
warranties, service contracts, program services, test rights, maintenance
rights, support rights, improvement rights and indemnifications relating to any
of the foregoing.

 

“ERISA
Group” means Holdings and its Subsidiaries and each business or entity
which is a member of a “controlled group of corporations”, under “common
control” or an “affiliated service group” with Holdings or any Subsidiary
within the meaning of Section 414(b), (c) or (m) of the Internal Revenue
Code of 1986, as amended, or required to be aggregated with Holdings or any
Subsidiary under Section 414(o) of the Internal Revenue Code of 1986, as
amended, or is under “common control” with Holdings or any Subsidiary, within
the meaning of Section 4001(a)(14) of Employee Retirement Income Security
Act of 1974, as amended.

 

“Event
of Default” means an “Event of Default” as defined in the Indenture and any
Term Credit Agreement.

 

“Excluded
Contract” means at any date any rights or interest of a Loan Party in, to
or under any agreement, contract, license, instrument, document or other
general intangible (referred to solely for purposes of this definition as a “Contract”)
(i) to the extent that such Contract by the express terms of a valid and
enforceable restriction in favor of a Person who is not a Group Company, or any
requirement of Law, prohibits, or requires any consent or establishes any other
condition for, an assignment thereof or a grant of a security interest therein
by a Loan Party and (ii) which, if in existence or the subject of rights in
favor of a Loan Party as of the Issue Date and with respect to which a
contravention or other violation caused or arising by its inclusion as
Collateral under this Amended Agreement could reasonably be expected to have a
Material Adverse Effect, is listed and designated as such on Schedule VI
to any Loan Party’s Perfection Certificate or individually or collectively is
not material to the conduct of the business of a Loan Party; provided
that: (i) rights to payment under any such Contract otherwise constituting an
Excluded Contract by virtue of this definition shall be included in the
Collateral to the extent permitted thereby or by Section 9-406 or
Section 9-408 of the UCC and (ii) all Proceeds paid or payable to any Loan
Party from any sale, transfer or assignment of such Contract and all rights to
receive such Proceeds shall be included in the Collateral.

 

“Excluded
Deposit Accounts” means each of the Deposit Accounts that are excluded from
the requirements of Sections 4.01 and 4.13 only, and listed on Schedule 1.01B
hereto.

 

“Excluded
Equipment” means at any date any Equipment of a Loan Party which is subject
to, or secured by, a Capital Lease Obligation or Purchase Money Indebtedness if
and to the extent that (i) the express terms of a valid and enforceable
restriction in favor of a Person who is not a Group

 

7

 

Company contained in the
agreements or documents granting or governing such Capital Lease Obligation or
Purchase Money Indebtedness prohibits, or requires any consent or establishes
any other conditions for, an assignment thereof, or a grant of a security
interest therein, by a Loan Party and (ii) such restriction relates only to the
asset or assets acquired by a Loan Party with the Proceeds of such Capital
Lease Obligation or Purchase Money Indebtedness and attachments thereto or
substitutions therefor; provided that all Proceeds paid or payable to
any Loan Party from any sale, transfer or assignment or other voluntary or
involuntary disposition of such Equipment and all rights to receive such
Proceeds shall be included in the Collateral to the extent not otherwise
required to be paid to the holder of the Capital Lease Obligation or Purchase
Money Indebtedness secured by such Equipment.

 

“Exempt
Deposit Accounts” means (i) Deposit Accounts the balance of which consists
exclusively of (A) withheld income taxes and federal, state or local employment
taxes in such amounts as are required in the reasonable judgment of a Loan
Party to be paid to the Internal Revenue Service or state or local government
agencies within the following two months with respect to employees of any of
the Loan Parties and (B) amounts required to be paid over to an employee
benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the
benefit of employees of one or more Loan Parties, and (ii) all segregated
Deposit Accounts constituting (and the balance of which consists solely of funds
set aside in connection with) taxes accounts, payroll accounts and trust
accounts.

 

“Fair
Market Value” has the meaning given to it in the Indenture.

 

“Finance
Document” means each Term Loan Document, each Swap Agreement evidencing
Swap Obligations of a Loan Party permitted under all Term Credit Agreements, if
any, and the Indenture, each Note Document between one or more Loan Parties and
a Finance Party and the Collateral Agency Agreement, and “Finance Documents”
means any two or more of them, collectively.

 

“Finance
Obligations” means:

 

(i)                                     all
Note/Term Obligations; and

 

(ii)                                  all
Swap Obligations of all Loan Parties permitted under the Indenture and all Term
Credit Agreements, if any, owed or owing to one or more Swap Creditors;

 

in each case whether now
or hereafter due, owing or incurred in any manner, whether actual or
contingent, whether incurred solely or jointly with any other person and
whether as principal or surety, together in each case with all renewals,
modifications, refinancings, replacements, consolidations or extensions
thereof.

 

“Finance
Party” means each Noteholder, the Trustee, each Term Lender, a Term Loan
Agent, each Swap Creditor, each Swap Representative, the Collateral Agent, each
Indemnitee and their respective successors and assigns, and “Finance Parties”
means any two or more of them, collectively.

 

“Foreign
Subsidiary” means with respect to any Person at any date any Subsidiary of
such Person which is not a US Subsidiary of such Person.

 

“GAAP”
means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board, the Public Company Accounting Oversight Board or in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which were in effect on the
date of the Existing Term Credit Agreement.

 

8

 

“General
Intangibles” means all “general intangibles” (as defined in the UCC) and
also means and includes (i) all Payment Intangibles and other obligations and
indebtedness owing to any Loan Party (other than Accounts), from whatever source
arising, (ii) all Claims, Judgments and/or Settlements, (iii) all rights or
claims in respect of refunds for taxes paid, (iv) all rights in respect of any
pension plans or similar arrangements maintained for employees of any Loan
Party or any member of the ERISA Group, (v) all interests in limited liability
companies and/or partnerships which interests do not constitute Securities and
(vi) all Supporting Obligations of any kind given by any Person with respect to
all or any of the foregoing.

 

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, administrative tribunal, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers
or functions of or pertaining to government.

 

“Group
Company” means any of Holdings, DRI or their respective Subsidiaries
(regardless of whether or not consolidated with Holdings or DRI for purposes of
GAAP), and “Group Companies” means all of them, collectively.

 

“Guarantee”
means the guarantee by any Guarantor of the Note/Term Obligations.

 

“Indebtedness”
has the meaning set forth in the Indenture and any Term Credit Agreement.

 

“Indemnitee”
has the meaning set forth in Section 7.03(c) of this Amended
Agreement.

 

“Individual
Store Accounts” means Deposit Accounts, the balance of which consists
exclusively of a single retail store’s receipts in the ordinary course of
business swept daily into a concentration account.

 

“Intellectual
Property” means all Patents, Trademarks, Copyrights, Software, Licenses,
rights in intellectual property, goodwill, trade secrets, confidential or
proprietary technical and business information, know-how, show-how, domain
names, mask works, customer lists, vendor lists, subscription lists, data bases
and related documentation, registrations, franchises and all other intellectual
or other similar property rights.

 

“Intercreditor
Agreement” has the meaning set forth in the introductory paragraphs hereof.

 

“Issue
Date” means December 20, 2004.

 

“Judgments”
means all judgments, decrees, verdicts, decisions or orders issued in
resolution of or otherwise in connection with a Claim, whether or not final or
subject to appeal, and including all rights of enforcement relating thereto and
any and all Proceeds thereof.

 

“Law”
means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

9

 

“License”
means any Patent License, Trademark License, Copyright License, Software
License or other license or sublicense as to which any Loan Party is a party
(other than those license agreements constituting Excluded Contracts; provided
that rights to payments under any such license shall be included in the
Collateral to the extent permitted thereby or by Section 9-406 and 9-408
of the UCC).

 

“Lien”
means, with respect to any asset, any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
charge, or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement under the UCC or comparable Laws of any jurisdiction for the purpose
of evidencing a lien), including the interest of a purchaser of accounts
receivable, chattel paper, payment intangibles or promissory notes.

 

“Liquid
Investments” has the meaning set forth in Section 2.07 of this
Amended Agreement.

 

“Loan
Party” has the meaning set forth in the introductory paragraphs hereof.

 

“Material
Adverse Effect” means (i) any material adverse effect upon the business,
assets, properties, liabilities, results of operations or condition (financial
or otherwise) of Holdings, DRI, Duane Reade and the Restricted Subsidiaries,
taken as a whole, (ii) a material adverse effect on the ability of a Loan Party
to consummate the transactions contemplated by the Note Documents to occur on
the Issue Date, (iii) a material impairment of the ability of any Loan Party to
perform any of its obligations under any Finance Document to which it is a
party or (iv) a material impairment of the rights and benefits of the Finance
Party under any Finance Document.

 

“Moody’s”
means Moody’s Investors Service, Inc., and its successors.

 

“Note
Documents” means the Indenture, the Senior Secured Notes and the
Registration Rights Agreement related thereto and the Collateral Documents, in
each case including all exhibits and schedules thereto, and all other
agreements, documents and instruments relating to the Senior Secured Notes, in
each case as the same may be amended, modified or supplemented from time to
time in accordance with the provisions thereof.

 

“Noteholders”
means the holders from time to time of the Senior Secured Notes.

 

“Note/Term
Obligations” means, without duplication:

 

(i)                                     all
principal of and interest (including, without limitation, any interest which
accrues after the commencement of any Insolvency Proceeding with respect to any
Loan Party, whether or not allowed or allowable as a claim in any such
proceeding) on any Senior Secured Note or Term Loan;

 

(ii)                                  all
fees, expenses, indemnification obligations and other amounts of whatever
nature now or hereafter payable by any Loan Party (including, without
limitation, any amounts which accrue after the commencement of any proceeding
under any Insolvency Proceeding with respect to any Loan Party, whether or not
allowed or allowable as a claim in any such proceeding) pursuant to the
Indenture, the Senior Secured Notes, any Term Credit Agreement, the
Intercreditor Agreement or any Collateral Document;

 

10

 

(iii)                               all
expenses of the Trustee, the Collateral Agent or any Term Loan Agent as to
which one or more of such agents has a right to reimbursement under the
Indenture, any Term Credit Agreement or under any other similar provision of
any Collateral Document or the Intercreditor Agreement, including, without
limitation, any and all sums advanced by the Collateral Agent to preserve the
Collateral or its security interest in the Collateral; and

 

(iv)                              in
the case of Holdings and each Subsidiary Guarantor, all amounts now or
hereafter payable by Holdings or such Subsidiary Guarantor and all other
obligations or liabilities now existing or hereafter arising or incurred
(including, without limitation, any amounts which accrue after the commencement
of any Insolvency Proceeding with respect to DRI, Duane Reade, Holdings or such
Subsidiary Guarantor, whether or not allowed or allowable as a claim in any
such proceeding) on the part of Holdings or such Subsidiary Guarantor pursuant
to the Indenture, the Senior Secured Notes, the Guarantees, any Term Credit
Agreement, the Intercreditor Agreement or any Collateral Document;

 

together in each case
with all renewals, modifications, refinancings, consolidations or extensions
thereof.

 

“Patent”
means any of the following:

 

(i)                                     the
United States and foreign patents described on Schedule V to any
Loan Party’s Perfection Certificate (as each such schedule may be amended,
modified or supplemented from time to time) and any renewals thereof;

 

(ii)                                  all
other letters patent and design letters patent of the United States or any
other country;

 

(iii)                               all
applications filed or in preparation for filing for letters patent and design
letters patent of the United States or any other country including, without
limitation, applications in the United States Patent and Trademark Office or in
any similar office or agency of the United States or any other country or
political subdivision thereof;

 

(iv)                              all
reissues, divisions, continuations, continuations-in-part, revisions, renewals
or extensions thereof;

 

(v)                                 all
claims for, and rights to sue for, past, present or future infringement of any
of the foregoing;

 

(vi)                              all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including, without limitation, damages and
payments for past, present or future infringements thereof and payments and
damages under all Patent Licenses in connection therewith; and

 

(vii)                           all
rights corresponding to any of the foregoing whether arising under the Laws of
the United States or any foreign country or otherwise.

 

“Patent
and Trademark Assignment” means a Grant of Security Interest in United
States Patents and Trademarks, substantially in the form of Exhibit A to
this Amended Agreement, between one or more Loan Parties and the Collateral
Agent, as the same may be amended, modified or supplemented from time to time.

 

11

 

“Patent
License” means any agreement now or hereafter in existence granting to any
Loan Party any right, whether exclusive or non-exclusive, with respect to any
Person’s patent or any invention now or hereafter in existence, whether or not
patentable, or pursuant to which any Loan Party has granted to any other
Person, any right, whether exclusive or non-exclusive, with respect to any
Patent or any invention now or hereafter in existence, whether or not
patentable and whether or not a Patent or application for Patent is in or
hereafter comes into existence on such invention, including, without
limitation, the Patent Licenses described on Schedule V to any Loan
Party’s Perfection Certificate (as each such schedule may be amended,
modified or supplemented from time to time).

 

“Perfection
Certificate” means with respect to each Loan Party a certificate,
substantially in the form of Exhibit F hereto, completed and
supplemented with the schedules and attachments contemplated thereby to the
reasonable satisfaction of the Collateral Agent.

 

“Permitted
Lien” means any Lien permitted by both (a) the Indenture and (b) all Term
Credit Agreements, if any.

 

“Prepayment
Account” has the meaning set forth in Section 2.06 of this
Amended Agreement.

 

“Purchase
Money Indebtedness” means Indebtedness of DRI or any of its Restricted
Subsidiaries incurred for the purpose of financing all or any part of the
purchase price of property, plant or equipment used in the business of DRI or
any Restricted Subsidiary or the cost of installation, construction or
improvement thereof, and the payment of any sales or other taxes associated
therewith; provided, however,
that (i) the amount of such Indebtedness shall not exceed such purchase
price or cost and payment plus applicable taxes, and (ii) such
Indebtedness shall be incurred within one year of such acquisition of such
asset by DRI or such Restricted Subsidiary or such installation, construction
or improvement.

 

“Receivables”
means all Accounts, all Payment Intangibles, all Instruments, all Chattel Paper
and all Supporting Obligations supporting or otherwise relating to any of the
foregoing.

 

“Recordable
Intellectual Property” means Intellectual Property the transfer of which is
required to be recorded in the United States Patent and Trademark Office or the
United States Copyright Office in order to be effective against subsequent
third party transferees; provided that the following shall not be
considered “Recordable Intellectual Property” hereunder:  (i) unregistered United States Copyrights
and (ii) non-exclusive Licenses.

 

“Reinvestment
Funds” has the meaning set forth in Section 2.05(a) of this
Amended Agreement.

 

“Reinvestment
Funds Account” has the meaning set forth in Section 2.05(a) of
this Amended Agreement.

 

“Restricted
Deposit Accounts” means each Deposit Account restricted pursuant to Section 4.13
and listed on Schedule 1.01B hereto.

 

“Restricted
Subsidiary” has the meaning set forth in the Indenture.

 

“S&P”
means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and
its successors.

 

12

 

“Security
Interests” means the security interests in the Collateral granted under
this Amended Agreement securing the Finance Obligations.

 

“Settlements”
means all right, title and interest of a Loan Party in, to and under any
settlement agreement or other agreement executed in settlement or compromise of
any Claim, including all rights to enforce such agreements and all payments
thereunder or arising in connection therewith.

 

“Software”
means all “software” (as defined in the UCC), and also means and includes all
software programs, whether now or hereafter owned, licensed or leased by a Loan
Party, designed for use on Computer Hardware, including, without limitation,
all operating system software, utilities and application programs in whatever
form and whether or not embedded in goods, all source code and object code in
magnetic tape, disk or hard copy format or any other listings whatsoever, all
firmware associated with any of the foregoing all documentation, flowcharts,
logic diagrams, web pages, manuals, specifications, training materials, charts
and pseudo codes associated with any of the foregoing, and all options,
warranties, services contracts, program services, test rights, maintenance
rights, support rights, renewal rights and indemnifications relating to any of
the foregoing.

 

“Software
License” means any agreement (including any agreement constituting a
Copyright License, Patent License and/or Trademark License) now or hereafter in
existence granting to any Loan Party any right, whether exclusive or
non-exclusive, to use another Person’s Software, or pursuant to which any Loan
Party has granted to any other Person, any right, whether exclusive or
non-exclusive, to use any Software, whether or not subject to any registration.

 

“Supporting
Obligation” means a guarantee or other secondary obligation supporting, or
any Lien securing, the payment or performance of one or more Receivables,
General Intangibles, Documents, Assigned Agreements or Investment Property.

 

“Swap
Agreement” means an agreement between a Loan Party and any Swap Creditor
with respect to one or more Swap Obligations.

 

“Swap
Creditor” means any Person from time to time party to one or more Swap
Agreements with a Loan Party permitted by the Indenture and all Term Credit
Agreements, if any, and that has also executed a Sharing Confirmation, and its
successors and assigns, and “Swap Creditors” means any two or more of
such Swap Creditors, collectively.

 

“Swap
Obligations” of any Person means all obligations (including, without
limitation, any amounts which accrue after the commencement of any Insolvency
Proceeding) of such Person in respect of any rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of the foregoing transactions) or any combination of the
foregoing transactions, excluding any amounts which such Person is entitled to
set-off against its obligations under applicable Law.

 

“Term
Loan Documents” means any Term Credit Agreement, any promissory notes,
guaranties, the Collateral Documents and other documents entered into in
connection therewith and as may be designated “Term Loan Documents” in any such
Term Credit Agreement, in each case as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.

 

13

 

“Trademark”
means any of the following:

 

(i)                                     the
United States and foreign trademarks described on Schedule V to any
Loan Party’s Perfection Certificate (as each such schedule may be amended,
modified or supplemented from time to time) and any renewals thereof;

 

(ii)                                  all
other trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos, certification
marks, collective marks, brand names and trade dress which are or have been
used in the United States or in any state, territory or possession thereof, or
in any other place, nation or jurisdiction, along with all prints and labels on
which any of the foregoing have appeared or appear, package and other designs,
and any other source or business identifiers, and general intangibles of like
nature, and the rights in any of the foregoing which arise under applicable
Law;

 

(iii)                               the
goodwill of the business symbolized thereby or associated with each of the
foregoing;

 

(iv)                              all
registrations and applications in connection therewith, including, without
limitation, registrations and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision thereof, but
excluding in all cases all intent-to-use United States trademark applications
for which an amendment to allege use or statement of use has not been filed
under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively, or if
filed, has not been deemed in conformance with 15 U.S.C. § 1051(a) or
examined and accepted, respectively, by the United States Patent and Trademark
Office provided that upon such filing and acceptance, such intent-to-use
applications shall be included in the definition of Trademark;

 

(v)                                 all
reissues, extensions and renewals thereof;

 

(vi)                              all
claims for, and rights to sue for, past, present or future infringements of any
of the foregoing;

 

(vii)                           all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including, without limitation, damages and
payments for past, present or future infringements thereof and payments and
damages under all Trademark Licenses in connection therewith; and

 

(viii)                        all rights
corresponding to any of the foregoing whether arising under the Laws of the
United States or any foreign country or otherwise.

 

“Trademark
License” means any agreement now or hereafter in existence granting to any
Loan Party any right, whether exclusive or non-exclusive, to use another
Person’s trademarks or trademark applications, or pursuant to which any Loan
Party has granted to any other Person, any right, whether exclusive or
non-exclusive, to use any Trademark, whether or not registered, including,
without limitation, the Trademark Licenses described on Schedule V
to any Loan Party’s Perfection Certificate (as each such schedule may be
amended, modified or supplemented from time to time) and the rights to prepare
for sale, sell and advertise for sale, all of the inventory now or hereafter
owned by any Loan Party and now or hereafter covered by such license
agreements.

 

“UCC”
means the Uniform Commercial Code as in effect from time to time in the State
of New York; provided that if by reason of mandatory provisions of Law,
the perfection, the effect of

 

14

 

perfection or
non-perfection or the priority of the Security Interests in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, “UCC” means the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non-perfection or priority.

 

“US
Subsidiary” means with respect to any Person each Subsidiary of such Person
which, at the time of determination, is incorporated in or organized under the
Laws of the United States of America, any State thereof or the District of
Columbia, and “US Subsidiaries” means all of them, collectively.

 

Section 1.04                            Terms Generally.  Terms defined in the introductory paragraphs
hereof and the definitions in Section 1.03 shall apply equally to
both the singular and plural forms of the terms defined.  Wherever the context may require, any
pronouns shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without
limitation”.  All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Amended Agreement
unless otherwise stated herein or the context shall otherwise require.  Unless otherwise expressly provided herein,
the word “day” means a calendar day.

 

ARTICLE II

SECURITY INTERESTS

 

Section 2.01                            Grant of Security Interests.  To secure the due and punctual payment of
all Finance Obligations, howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, now or hereafter existing or due or
to become due, in accordance with the terms thereof and to secure the
performance of all of the obligations of each Loan Party hereunder and the
other Loan Parties hereunder and under the other Finance Documents, each Loan
Party hereby grants to the Collateral Agent for the benefit of the Finance
Parties a security interest in, and each Loan Party hereby pledges and assigns
to the Collateral Agent for the benefit of the Finance Parties, all of such
Loan Party’s right, title and interest in, to and under the following, whether
now owned or existing or hereafter acquired, created or arising, whether
tangible or intangible, and regardless of where located (other than any item
which on any date constitutes an Excluded Contract or Excluded Equipment) (all
of which are herein collectively called the “Collateral”):

 

(i)                                     all
Receivables;

 

(ii)                                  all
Inventory;

 

(iii)                               all
General Intangibles;

 

(iv)                              all
Intellectual Property;

 

(v)                                 all
Documents and all Supporting Obligations of any kind given by any Person with
respect thereto;

 

(vi)                              all
Equipment;

 

(vii)                           all
Investment Property and all Supporting Obligations of any kind given by any Person
with respect thereto;

 

(viii)                        all
Assigned Agreements;

 

15

 

(ix)                                all
Deposit Accounts;

 

(x)                                   the
Collateral Accounts, all cash and other property deposited therein or credited
thereto from time to time, the Liquid Investments made pursuant to Section 2.07
and other monies and property of any kind of any Loan Party maintained with or
in the possession of or under the control of the Collateral Agent;

 

(xi)                                all
books and records (including, without limitation, customer lists, credit files,
computer programs, printouts and other computer materials and records) of each
Loan Party pertaining to any of the Collateral; and

 

(xii)                             all
Proceeds of all or any of the Collateral described in clauses (i)
through (xi) hereof;

 

provided,
however, that, the Collateral shall not include (i) any property or
assets owned by any Loan Party that is a Foreign Subsidiary, (ii) any voting
security that is issued by a Foreign Subsidiary (that is a corporation for
United States federal income tax purposes) and owned by any Loan Party, if and
to the extent that the inclusion of such voting security in the Collateral
would cause the Collateral pledged by such Loan Party hereunder or under any
other Finance Document to include in the aggregate more than 65% of the total
combined voting power of all classes of voting securities of such Foreign
Subsidiary, (iii) assets securing Purchase Money Indebtedness or Capital Lease
Obligations permitted to be incurred pursuant to the Indenture and all Term
Credit Agreements, if any, (iv) any Capital Stock and other securities of DR
International, Duane Reade or DRI I to the extent that the pledge of such
Capital Stock or other securities to secure the Finance Obligations would cause
such Subsidiary to be required to file separate financial statements with the
Securities and Exchange Commission pursuant to Rule 3-16 of Regulation S-X (as
in effect from time to time) of the Securities and Exchange Commission, (v) any
Capital Stock or other securities of any Person that becomes a Guarantor after
the Issue Date that, together with all other such Guarantors, created, acquired
or invested in after the Issue Date, have a collective Fair Market Value of
less than $30,000,000 and (vi) any proceeds or products from any and all of the
foregoing unless such proceeds or products would otherwise constitute
Collateral.

 

Notwithstanding the
foregoing, if granting or perfecting any Lien to secure the Finance Obligations
on any Collateral (i) cannot be granted or perfected under applicable law, none
of DRI, Duane Reade or the Guarantors will be required to grant or perfect, as
applicable, such Lien and (ii) that consists of personal property rights that
are licensed or leased from a third-party requires the consent of such third
party pursuant to the terms of an applicable license or lease agreement, and
such terms are enforceable under applicable law, DRI, Duane Reade or the
Guarantors, as the case may be, will use all commercially reasonable efforts to
obtain such consent with respect to the granting or perfecting of such Lien,
but if the third party does not consent to the granting or perfecting of such
Lien after the use of commercially reasonable efforts, none of DRI, Duane Reade
or the Guarantors will be required to do so.

 

Section 2.02                            Continuing Liability of Each Loan Party.  Anything herein to the contrary
notwithstanding, each Loan Party shall remain liable to observe and perform all
the terms and conditions to be observed and performed by it under any contract,
agreement, warranty or other obligation with respect to the Collateral.  Neither the Collateral Agent nor any Finance
Party shall have any obligation or liability under any such contract,
agreement, warranty or obligation by reason of or arising out of this Amended
Agreement or the receipt by the Collateral Agent or any Finance Party of any
payment relating to any Collateral, nor shall the Collateral Agent or any
Finance Party be required to perform or fulfill any of the obligations of any
Loan Party with respect to any of the Collateral, to make any inquiry as to the
nature or sufficiency of any payment received by it or the sufficiency of the
performance of any party’s obligations with respect to any Collateral.  Furthermore, neither the Collateral

 

16

 

Agent nor any Finance
Party shall be required to file any claim or demand to collect any amount due
or to enforce the performance of any party’s obligations with respect to the
Collateral.

 

Section 2.03                            Security Interests Absolute.  All rights of the Collateral Agent, all
security interests hereunder and all obligations of each Loan Party hereunder
are unconditional and absolute and independent and separate from any other
security for or guaranty of the Finance Obligations, whether executed by such
Loan Party, any other Loan Party or any other Person.  Without limiting the generality of the foregoing, the obligations
of each Loan Party hereunder shall not be released, discharged or otherwise
affected or impaired by:

 

(i)                                     any
extension, renewal, settlement, compromise, acceleration, waiver or release in
respect of any Finance Obligation under any other Finance Document or any other
agreement or instrument evidencing or securing any Finance Obligation, by
operation of Law or otherwise;

 

(ii)                                  any
change in the manner, place, time or terms of payment of any Finance Obligation
or any other amendment, supplement or modification to any Finance Document or
any other agreement or instrument evidencing or securing any Finance Obligation;

 

(iii)                               any
release, non-perfection or invalidity of any direct or indirect security for
any Finance Obligation, any sale, exchange, surrender, realization upon, offset
against or other action in respect of any direct or indirect security for any
Finance Obligation or any release of any other obligor or Loan Parties in
respect of any Finance Obligation;

 

(iv)                              any
change in the existence, structure or ownership of any Loan Party, or any
insolvency, bankruptcy, reorganization, arrangement, readjustment, composition,
liquidation or other similar proceeding affecting a Loan Party or its assets or
any resulting disallowance, release or discharge of all or any portion of any
Finance Obligation;

 

(v)                                 the
existence of any claim, set-off or other right which any Loan Party may have at
any time against any other Loan Party, any Finance Party or any other Person,
whether in connection herewith or any unrelated transaction; provided
that nothing herein shall prevent the assertion of any such claim by separate suit
or compulsory counterclaim;

 

(vi)                              any
invalidity or unenforceability relating to or against any Loan Party for any
reason of any Finance Document or any other agreement or instrument evidencing
or securing any Finance Obligation or any provision of applicable Law or
regulation purporting to prohibit the payment by any Loan Party of any Finance
Obligation;

 

(vii)                           any
failure by any Finance Party:  (A) to
file or enforce a claim against any Loan Party or its estate (in a bankruptcy
or other proceeding); (B) to give notice of the existence, creation or
incurrence by any Loan Party of any new or additional indebtedness or
obligation under or with respect to the Finance Obligations; (C) to commence
any action against any Loan Party; (D) to disclose to any Loan Party any facts
which such Finance Party may now or hereafter know with regard to any Loan
Party; or (E) to proceed with due diligence in the collection, protection or
realization upon any collateral securing the Finance Obligations;

 

(viii)                        any
direction as to application of payment by any Loan Party or any other Person;

 

17

 

(ix)                                any
subordination by any Finance Party of the payment of any Finance Obligation to
the payment of any other liability (whether matured or unmatured) of any Loan
Party to its creditors;

 

(x)                                   any
act or failure to act by the Collateral Agent or any other Finance Party under
this Amended Agreement or otherwise which may deprive any Loan Party of any
right to subrogation, contribution or reimbursement against any other Loan
Party or any right to recover full indemnity for any payments made by such Loan
Party in respect of the Finance Obligations; or

 

(xi)                                any
other act or omission to act or delay of any kind by any Loan Party or any Finance
Party or any other Person or any other circumstance whatsoever which might, but
for the provisions of this clause, constitute a legal or equitable discharge of
any Loan Party’s obligations hereunder (other than final payment in full of the
Finance Obligations).

 

Each
Loan Party has irrevocably and unconditionally delivered this Amended Agreement
to the Collateral Agent, for the benefit of the Finance Parties, and the
failure by any other Person to sign this Amended Agreement or a security
agreement similar to this Amended Agreement or otherwise shall not discharge
the obligations of any Loan Party hereunder.

 

This
Amended Agreement shall remain fully enforceable against each Loan Party
irrespective of any defenses that any other Loan Party may have or assert in
respect of the Finance Obligations, including, without limitation, failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, except that a Loan Party may
assert the defense of final payment in full of the Finance Obligations.

 

Section 2.04                            Segregation of Proceeds; Cash Proceeds
Account.

 

(a)                                  Creation of Cash Proceeds Account.  There is hereby established with the
Collateral Agent a Securities Account (the “Cash Proceeds Account”)
entitled “Duane Reade Senior Cash Collateral Account” and under the exclusive
control of the Collateral Agent, into which there shall be deposited from time
to time the cash Proceeds of the Collateral required to be delivered to the
Collateral Agent pursuant to subsection (b) of this Section.  Any income received by the Collateral Agent
with respect to the balance from time to time standing to the credit of the
Cash Proceeds Account, including any interest or capital gains on Liquid Investments,
shall remain, or be deposited, in the Cash Proceeds Account.  All right, title and interest in and to the
cash amounts on deposit from time to time in the Cash Proceeds Account together
with any Liquid Investments from time to time made pursuant to Section 2.07
and any other property or assets from time to time deposited in or credited to
the Cash Proceeds Account shall, subject to the Intercreditor Agreement, vest
in and be under the sole dominion and control of the Collateral Agent for the
benefit of the Finance Parties, shall constitute part of the Collateral
hereunder and shall not constitute payment of the Finance Obligations until
applied thereto as hereinafter provided.

 

(b)                                 Deposits to Cash Proceeds Account.  Upon the occurrence and during the
continuance of  an Event of Default,
except as otherwise provided in Section 2.05 or 2.06 hereof
and subject to the provisions of the Intercreditor Agreement, each Loan Party
shall upon the instruction of the Collateral Agent instruct all Account Debtors
and other Persons obligated in respect of its Receivables and other Collateral
to make all payments in respect of its Receivables and other Collateral (other
than Revolving Lender Priority Collateral if any Revolving Loan Obligation is
at the time outstanding or any commitment of one or more Revolving Lenders
remains in effect under the Revolving Credit Agreement) either (i) directly to
the Collateral Agent (by instructing that such payments be remitted by direct
wire transfer to the Collateral Agent at its address referred to in Section 7.01
or to a post office box which shall

 

18

 

be in the name and under
the control of the Collateral Agent) or (ii) to one or more other banks in the
United States (by instructing that such payments be remitted by direct wire
transfer to, or to a post office box which shall be in the name and under the
control of, such bank) under an Account Control Agreement duly executed by each
relevant Loan Party and such bank or under other arrangements, in form and
substance satisfactory to the Collateral Agent, pursuant to which each relevant
Loan Party shall have irrevocably instructed such other bank (and such other
bank shall have agreed) to remit all proceeds of such payments directly to the
Collateral Agent for deposit into the Cash Proceeds Account or as the
Collateral Agent may otherwise instruct such bank.  All such payments made to the Collateral Agent shall be deposited
in the Cash Proceeds Account.  In
addition to the foregoing, each Loan Party agrees that, subject to the
Intercreditor Agreement, if the Proceeds of any Collateral hereunder (other
than Revolving Lender Priority Collateral if any Revolving Loan Obligation is
at the time outstanding or any commitment of one or more Revolving Lenders
remains in effect under the Revolving Credit Agreement) (including the payments
made in respect of Receivables) shall be received by it after the occurrence
and during the continuance of an Event of Default and the receipt of such
instructions, such Loan Party shall as promptly as possible deposit such
Proceeds into the Cash Proceeds Account. 
Until so deposited, all such Proceeds shall be held in trust by the
relevant Loan Party for and as the property of the Collateral Agent for the
benefit of the Finance Parties and shall not be commingled with any other funds
or property of any Loan Party; provided, however, that after an Event of
Default that gave rise to the application of this Section has been cured
or waived and until another Event of Default shall occur, all collected funds
on deposit in the Cash Proceeds Account, or so much thereof as is not required
to make payment of the Finance Obligations which have become due and payable
(whether by scheduled maturity, acceleration or otherwise), shall be withdrawn
by the Collateral Agent on the next Business Day following the day on which the
Collateral Agent considers the funds deposited therein to be collected funds
and disbursed to the applicable Loan Party or its order.  Each Loan Party hereby irrevocably consents
and agrees to such disbursement.  Each
Loan Party hereby irrevocably authorizes and empowers the Collateral Agent, its
officers, employees and authorized agents during the continuance of an Event of
Default and subject to the Intercreditor Agreement, to endorse and sign its
name on all checks, drafts, money orders or other media of payment so
delivered, and such endorsements or assignments shall, for all purposes, be
deemed to have been made by the relevant Loan Party prior to any endorsement or
assignment thereof by the Collateral Agent. 
The Collateral Agent may use any convenient or customary means for the
purpose of collecting such checks, drafts, money orders or other media of
payment.

 

Section 2.05                            Reinvestment Funds Account.

 

(a)                                  Creation of and Deposits to the Reinvestment Funds
Account.  Promptly upon
and at all times after the receipt by any Loan Party of any Net Loss Proceeds
(as defined in the Indenture) or other amounts required to be paid to the
Collateral Agent pursuant to Section 4.15(b) of the Indenture, Section 4.10
hereof or pursuant to any similar provision of any Term Credit Agreement or
other Finance Document (in each case other than proceeds in respect of the
Revolving Lender Priority Collateral if any Revolving Loan Obligation is at the
time outstanding or any commitment of one or more Revolving Lenders remains in
effect under the Revolving Credit Agreement) (collectively, “Reinvestment
Funds”) and subject to the Intercreditor Agreement, such Loan Party shall
establish and shall thereafter (i) maintain an additional Securities Account
(the “Reinvestment Funds Account”) at the offices of the Collateral
Agent or such other bank or other financial institution as such Loan Party and
the Collateral Agent may agree, in the name and under the exclusive control of
the Collateral Agent or (ii) pay over such proceeds to the Revolving Credit
Administrative Agent in accordance with the Indenture or the applicable
provision of any Term Credit Agreement. 
If the Reinvestment Funds Account is not maintained at an office of the
Collateral Agent, then forthwith upon the establishment of such account, the
applicable Loan Party shall notify the Collateral Agent of the location,
account name and account number of such account and shall, subject to the
Intercreditor Agreement, deliver to the Collateral Agent an Account Control
Agreement with respect to such Reinvestment Funds Account duly executed by such

 

19

 

Loan Party and the
Securities Intermediary maintaining such Reinvestment Funds Account.  Each Loan Party hereby agrees to cause any
Reinvestment Funds received from time to time after the establishment of the
Reinvestment Funds Account to be deposited therein as set forth in this
paragraph.  Any Net Loss Proceeds (other
than proceeds in respect of the Revolving Lender Priority Collateral if any
Revolving Loan Obligation is at the time outstanding or any commitment of one
or more Revolving Lenders remains in effect under the Revolving Credit Agreement)
exceeding $10,000,000 in respect of one or a series of related events or
conditions giving rise thereto received from time to time by the Collateral
Agent in respect of which the Collateral Agent is an insured party and loss
payee shall be promptly deposited in the Reinvestment Funds Account as set
forth in this paragraph to be applied in accordance with the terms of this
Amended Agreement and the Finance Documents, subject to the provisions of clause
(ii) above.  Any income received
with respect to the balance from time to time standing to the credit of the
Reinvestment Funds Account, including any interest or capital gains on Liquid
Investments, shall remain, or be deposited, in the Reinvestment Funds Account
to be applied in accordance with the terms of this Amended Agreement and the
Finance Documents.  All right, title and
interest in and to the cash amounts on deposit from time to time in the
Reinvestment Funds Account together with any Liquid Investments from time to
time made pursuant to Section 2.07 hereof and any other property or
assets from time to time deposited in or credited to the Reinvestment Funds
Account shall vest in the Collateral Agent for the benefit of the Finance
Parties, shall constitute part of the Collateral hereunder and shall not
constitute payment of the Finance Obligations until applied thereto as
hereinafter provided.  The Collateral
Agent shall apply to repayment of the Finance Obligations those amounts on
deposit in the Reinvestment Funds Account which are required to be applied to
the repayment of the Senior Secured Notes in accordance with the Indenture, and
to the repayment of any Term Loans in accordance with the relevant provisions
of any Term Credit Agreement or, in each case, any other applicable term of any
Finance Document at the times expressly provided for in such documents, and,
unless an Event of Default shall have occurred and be continuing, shall
promptly in accordance with subsection (b) below release to, or
upon the order of the Loan Party in respect of which such Reinvestment Funds
were delivered, those amounts on deposit in the Reinvestment Funds Account
which are not required to be so applied or retained in the Reinvestment Funds
Account pursuant to any other provision of any Finance Document for application
as provided in subsection (b) below.

 

(b)                                 Withdrawals from Reinvestment Funds Account.  The balance from time to time standing to
the credit of the Reinvestment Funds Account (to the extent not applied
pursuant to the last sentence of Section 2.05(a)) shall be subject
to withdrawal only upon the instructions of the Collateral Agent.  Except upon the occurrence and continuation
of an Event of Default, the Collateral Agent agrees to give instructions to
distribute such amounts to the applicable Loan Party at such times and in such
amounts as such Loan Party shall request for the purpose of repairing,
reconstructing or replacing the property in respect of which such Reinvestment
Funds were received or for the purpose of repaying indebtedness secured by a Permitted
Lien on, or meeting other liabilities in respect of, the property in respect of
which such Reinvestment Funds were received. 
Each Loan Party hereby irrevocably consents and agrees to such
distribution.  To the extent required by
any Finance Document, any such request shall be accompanied by a certificate of
the chief executive officer or chief financial officer of such Loan Party
setting forth in detail the repair, reconstruction or replacement for which
such funds will be expended.  If
immediately available cash on deposit in the Reinvestment Funds Account is not
sufficient to make any distribution to a Loan Party referred to in the previous
sentence of this Section 2.05(b), the Collateral Agent shall cause
to be liquidated as promptly as practicable such Liquid Investments in the
Reinvestment Funds Account designated by such Loan Party as are required to
obtain sufficient cash to make such distribution and, notwithstanding any other
provision of this Article II, such distribution shall not be made
until such liquidation has taken place. 
Upon the occurrence and continuation of an Event of Default, the
Collateral Agent may apply or cause to be applied (subject to collection) any
or all of the balance from time to time standing to the credit of the Reinvestment
Funds Account in the manner specified in Section 5.04 hereof.

 

20

 

Section 2.06                            Prepayment Account.  Subject to the Intercreditor Agreement, all
amounts that may be required to be deposited by the Loan Parties as cash
collateral pursuant to the Indenture or any Term Credit Agreement and any other
Finance Document shall be deposited in a Securities Account (the “Prepayment
Account”) established and maintained by the Loan Parties at the offices of
the Collateral Agent or such other bank or other financial institution as the
Loan Parties and the Collateral Agent may agree, in the name and under the
exclusive control of the Collateral Agent. 
If the Prepayment Account is not maintained at an office of the Collateral
Agent, then forthwith upon the establishment of such account, the Loan Party so
required to make such deposit shall notify the Collateral Agent of the
location, account name and account number of such account and shall deliver to
the Collateral Agent an Account Control Agreement with respect to such
Prepayment Account duly executed by the applicable Loan Party or Loan Parties
and the Securities Intermediary maintaining such Prepayment Account.  Any income received with respect to the
balance from time to time standing to the credit of the Prepayment Account,
including any interest or capital gains on Liquid Investments, shall remain, or
be deposited, in the Prepayment Account. 
All right, title and interest in and to the cash amounts on deposit from
time to time in the Prepayment Account, together with any Liquid Investments
from time to time deposited in or credited to the Prepayment Account, shall
vest in and be under the sole dominion and control of the Collateral Agent for
the benefit of the Finance Parties, shall constitute part of the Collateral
hereunder and shall not constitute payment of the Finance Obligations until
applied thereto as hereinafter provided. 
The Collateral Agent shall from time to time pay to (i) the Trustee for
application to repayment of the Senior Secured Notes those amounts on deposit
in the Prepayment Account which may be required to be applied to the repayment
of the Senior Secured Notes in accordance with the Indenture upon receipt of an
Officer’s Certificate thereunder, and (ii) a Term Loan Agent for application to
repayment of any Term Loans those amounts on deposit in the Prepayment Account
which may be required to be applied to the repayment of any Term Loans in
accordance with such Term Loan Credit Agreement upon receipt of written
direction from such Term Loan Agent.  If
immediately available cash on deposit in the Prepayment Account is not
sufficient to make any distribution referred to in this Section 2.06,
the Collateral Agent shall cause to be liquidated as promptly as practicable
such Liquid Investments in the Prepayment Account designated by the Loan
Parties as are required to obtain sufficient cash to make such distribution
and, notwithstanding any other provision of this Section 2.06, such
distribution shall not be made until such liquidation has taken place.

 

Section 2.07                            Investment of Funds in Collateral Accounts.  Amounts on deposit in the Collateral
Accounts shall be invested and re-invested from time to time in such Liquid
Investments as the Loan Parties shall determine, which Liquid Investments shall
be held under the control of the Collateral Agent; provided that, if an
Event of Default has occurred and is continuing, the Collateral Agent may
liquidate any such Liquid Investments and apply or cause to be applied the
proceeds thereof in the manner specified in Section 5.04
hereof.  For this purpose, “Liquid
Investments” means any Cash Equivalent maturing within 30 days after such
Cash Equivalent is acquired by the Collateral Agent.

 

Section 2.08                            Collateral Agent Not Responsible.  The Collateral Agent shall not be
responsible for proper application by any Loan Party of any amount distributed
pursuant to this Article II.

 

ARTICLE III

REPRESENTATIONS
AND WARRANTIES

 

Each
Loan Party represents and warrants that:

 

Section 3.01                            Title to Collateral.  Such Loan Party has good and marketable
title to, or valid license or leasehold interests in, all of the Collateral in
which it has granted a security interest hereunder, free and clear of any Liens
other than Permitted Liens.  Other than
financing statements or other similar or equivalent documents or instruments
with respect to the Liens in favor of the Term Loan

 

21

 

Collateral Agent, the
Security Interests and Permitted Liens, no financing statement, mortgage,
security agreement or similar or equivalent document or instrument covering all
or any part of the Collateral is on file or of record in any jurisdiction in
which such filing or recording would be effective to perfect a Lien on such
Collateral.  No Collateral having a
value individually or collectively in excess of $500,000 (other than Inventory
in transit or Inventory in the possession of a carrier or similar bailee as to
which the provisions of Section 4.04 of this Amended Agreement have
been complied with) is in the possession or control of any Person (other than
the Revolving Credit Administrative Agent or a Loan Party) asserting any claim
thereto or security interest therein, except that the Collateral Agent or its
designee may have possession and/or control of Collateral as contemplated
hereby and by the other Finance Documents.

 

Section 3.02                            Validity, Perfection and Priority of Security
Interests.

 

(a)                                  The
Security Interests constitute valid security interests under the UCC securing
the Finance Obligations.

 

(b)                                 The
security interests of the Term Loan Collateral Agent constitute perfected
security interests in all right, title and interest of each Loan Party in the
Collateral to the extent that a security interest therein may be perfected by
filing pursuant to the UCC, prior to all other Liens and rights of others
therein except for Permitted Liens. 
When (i) UCC-3 financing statement amendments naming the Collateral Agent
as the secured party of record with respect to the UCC-1 financing statements
listed on Schedule 4.01 hereto and (ii) UCC-1 financing statements
naming the Collateral Agent as secured party and containing a description of
the Collateral in the form specified in Exhibit E hereto shall have been
filed in the respective offices specified in Schedule 4.01 hereto,
the Security Interests will constitute perfected security interests in all
right, title and interest of each Loan Party in the Collateral to the extent
that a security interest therein may be perfected by filing pursuant to the
UCC, prior to all other Liens and rights of others therein except for Permitted
Liens.

 

(c)                                  When
each Patent and Trademark Assignment has been filed with the United States
Patent and Trademark Office and each Copyright Assignment has been filed with
the United States Copyright Office, the Security Interests will (assuming that
the financing statements referred to in paragraph (b) above have been
filed in the appropriate filing offices) constitute perfected security interests
in all right, title and interest of such Loan Party in the Recordable
Intellectual Property therein described to the extent that a security interest
therein may be perfected by filing in such office, prior to all other Liens and
rights of others therein except for Permitted Liens.

 

(d)                                 When
each Account Control Agreement has been executed and delivered to the
Collateral Agent, the Security Interests will constitute perfected security
interests in all right, title and interest of the Loan Parties in the Deposit
Accounts and Securities Accounts, as applicable, subject thereto, prior to all
other Liens and rights of others therein and subject to no adverse claims
except for Permitted Liens.

 

(e)                                  So
long as such Loan Party is in compliance with the provisions of Section 4.14
hereof, the Security Interests shall constitute perfected security interests in
all right, title and interest of such Loan Party in all electronic Chattel
Paper, prior to all other Liens and rights of others therein except for Permitted
Liens.

 

Section 3.03                            Fair Labor Standards Act.  The hours worked by and payments made to
employees of the Loan Parties have not been in violation of the Fair Labor
Standards Act or any other applicable federal, state or foreign Law dealing
with such matters to the extent that any such violation could reasonably be
expected to have a Material Adverse Effect.

 

22

 

Section 3.04                            No Consents.  No consent of any other Person (including,
without limitation, any stockholder or creditor of such Loan Party or any of
its Subsidiaries) and no order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by any
Governmental Authority is required to be obtained by the Loan Party in
connection with the execution, delivery or performance of this Amended
Agreement, or in connection with the exercise of the rights and remedies of the
Collateral Agent pursuant to this Amended Agreement, except (i) as may be
required to perfect (as described in Schedule 4.01 hereto) and
maintain the perfection of the security interests created hereby, (ii) with
respect to vehicles represented by a certificate of title, (iii) with respect
to Receivables subject to the Federal Assignment of Claims Act, (iv) in
connection with the disposition of the Collateral by Laws affecting the
offering and sale of securities generally or as described in Schedule 3.04
hereto, (v) as provided in the Intercreditor Agreement, (vi) certain remedial
actions may be limited by pharmacy and related Laws or (vii) as contemplated by
the definition of Excluded Contracts; provided, however, that (i)
the registration of Copyrights in the United States Copyright Office may be
required to obtain a security interest therein that is effective against
subsequent transferees under United States Federal copyright law and (ii) to
the extent that recordation of the Security Interests in the United States
Patent and Trademark Office or the United States Copyright Office is necessary
to perfect the Security Interests or to render the Security Interests effective
against subsequent third parties, such recordations will not have been made
with respect to the items that are not Recordable Intellectual Property.

 

Section 3.05                            Deposit and Securities Accounts.  Schedule 3.05 hereto sets forth
as of the date hereof a complete and correct list of each Loan Party’s Deposit
Accounts and Securities Accounts, the name and address of the financial
institution which maintains each such account and the purpose for which such
account is used.

 

Section 3.06                            Insurance.  On the Issue Date, each Loan Party’s
insurance complies with the provisions of Section 4.10.

 

ARTICLE IV

COVENANTS

 

Each
Loan Party covenants and agrees that until the payment in full of all Finance
Obligations and until there is no commitment by any Finance Party to make
further advances, incur obligations or otherwise give value, such Loan Party
will comply with the following:

 

Section 4.01                            Delivery of Perfection Certificate; Initial
Perfection and Delivery of Search Reports.  On or prior to the Issue Date, such Loan
Party shall (i) deliver its Perfection Certificate to the Collateral Agent, and
(ii) cause all filings and recordings specified in Schedule 4.01
hereto to be made within the time periods specified in such schedule.  The information set forth in the Perfection
Certificate shall be correct and complete as of the Issue Date.  The Loan Parties represent and warrant that
duly executed Account Control Agreements with respect to each of the Loan
Parties’ Deposit Accounts (other than Exempt Deposit Accounts, Individual Store
Accounts and Excluded Deposit Accounts, with respect to which no Account
Control Agreements shall be required hereunder) and Securities Accounts that
were delivered to the Term Loan Collateral Agent under Section 4.01
of the Term Security Agreement continue to be in full force and effect as if
they were delivered hereunder.

 

Section 4.02                            Change of Name, Identity, Structure or
Location; Subjection to Other Security Agreements.  Such Loan Party will not change its name,
identity, structure or location (determined as provided in Section 9-307
of the UCC) in any manner, and shall not become bound, as provided in
Section 9-203(d) of the UCC, by a security agreement entered into by
another Person, in each case, unless it shall have given the Collateral Agent
not less than 20 days’ prior notice thereof. 
Such

 

23

 

Loan Party shall not in
any event change the location of its place or places of business, its chief
executive office or any Collateral or its name, identity, structure or location
(determined as provided in Section 9-307 of the UCC), or become bound, as
provided in Section 9-203(d) of the UCC, by a security agreement entered
into by another Person, if such change would cause the Security Interests in
any Collateral to lapse or cease to be perfected unless such Loan Party has
taken on or before the date of lapse all actions necessary to ensure that the
Security Interests in the Collateral do not lapse or cease to be perfected.

 

Section 4.03                            Further Actions.  Each Loan Party will, from time to time at
its expense and in such manner and form as the Collateral Agent may reasonably
request, execute, deliver, file and record any financing statement, instrument,
document, agreement or other paper and take any other action (including,
without limitation, any filings of financing or continuation statements under
the UCC and any filings with the United States Patent and Trademark Office and
the United States Copyright Office) that from time to time may be reasonably
necessary or advisable under the UCC or with respect to Recordable Intellectual
Property, or that the Collateral Agent may reasonably request, in order to
create, preserve, perfect, confirm or validate the Security Interests or to
enable the Collateral Agent and the Finance Parties to obtain the full benefit
of this Amended Agreement or to exercise and enforce any of its rights, powers
and remedies created hereunder or under applicable Law with respect to any of
the Collateral.  To the extent permitted
by applicable Law but without limiting such Loan Party’s obligations to itself
comply with the first sentence of this Section 4.03, such Loan
Party hereby authorizes the Collateral Agent to file, in the name of such Loan
Party or otherwise and without the signature or other separate authorization or
authentication of such Loan Party appearing thereon, such UCC financing
statements or continuation statements as the Collateral Agent may reasonably
deem necessary or appropriate to further perfect or maintain the perfection of
the Security Interests.  Such Loan Party
hereby authorizes the Collateral Agent to file financing and continuation
statements describing as the Collateral covered thereby “all of the debtor’s
personal property and assets” or words to similar effect, notwithstanding that
such description may be broader in scope than the Collateral described in this
Amended Agreement.  Such Loan Party
agrees that a carbon, photographic, photostatic or other reproduction of this
Amended Agreement or of a financing statement is sufficient as a financing
statement.  The Loan Parties shall pay
the costs of, or incidental to, any recording or filing of any financing or
continuation statements or other assignment documents concerning the
Collateral.

 

Section 4.04                            Collateral in Possession of Other Persons,
Leased Real Property Locations. 
If any of such Loan Party’s Collateral having a value individually or
collectively in excess of $1,000,000 is at any time in the possession or
control of any warehouseman, vendor, bailee or any agents or processors of any
Loan Party, such Loan Party shall (i) notify such warehouseman, vendor, bailee,
agent or processor of the Security Interests created hereby, (ii) instruct such
warehouseman, vendor, bailee, agent or processor to hold all such Collateral
for the Collateral Agent’s account and subject to the Collateral Agent’s
instructions, (iii) use commercially reasonable efforts (without incurring
material obligations or foregoing material rights) to cause such warehouseman,
vendor, bailee, agent or processor to authenticate a record acknowledging that
it holds possession of such Collateral for the benefit of the Collateral Agent
and the Finance Parties and (iv) make such authenticated record available to
the Collateral Agent.  Such Loan Party
agrees that if any warehouse receipt or receipt in the nature of a warehouse
receipt is issued with respect to any of its Inventory, such warehouse receipt
or receipt in the nature thereof shall not be “negotiable” (as such term is
used in Section 7-104 of the Uniform Commercial Code as in effect in any
relevant jurisdiction or under other relevant Law).

 

Section 4.05                            Books and Records.  Such Loan Party shall keep full and accurate
books and records relating to the Collateral and such Loan Party will make the
same available to the Collateral Agent for inspection, at such Loan Party’s own
cost and expense, at any and all reasonable times upon demand.  Upon direction by the Collateral Agent, such
Loan Party shall stamp or otherwise

 

24

 

mark such books and
records in such manner as the Collateral Agent may reasonably require in order
to reflect the Security Interests.

 

Section 4.06                            Delivery of Instruments, Etc.  Subject to the Intercreditor Agreement
(including the obligation to deliver any Instrument or Certificated Security to
the Revolving Credit Administrative Agent) such Loan Party will promptly
deliver each Instrument and each Certificated Security (other than (i) Cash
Equivalents held in a Deposit Account or a Securities Account and subject to an
effective Account Control Agreement unless maintained with the Collateral Agent
or as otherwise required by Section 4.13 hereof and (ii)
Instruments or Certificated Securities received in connection with bankruptcy
or reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers in the
ordinary course of business having individually, a face amount of less than
$1,000,000 in the case of Instruments or Certificated Securities subject to
this clause (ii)) to the Collateral Agent, appropriately indorsed to the
Collateral Agent; provided that so long as no Event of Default shall
have occurred and be continuing, and except as required by any other Finance
Document, such Loan Party may (unless otherwise provided in Section 2.04(b))
retain for collection in the ordinary course of business any checks, drafts and
other Instruments received by it in the ordinary course of business, and the
Collateral Agent shall, promptly upon request of such Loan Party, make
appropriate arrangements for making any other Instrument or Certificated
Security pledged by such Loan Party available to it for purposes of
presentation, collection or renewal (any such arrangement to be effected, to
the extent deemed appropriate to the Collateral Agent, against a trust receipt
or like document).

 

Section 4.07                            Notification to Account Debtors.  Upon the occurrence and during the
continuance of any  Event of Default and
if so requested by the Collateral Agent, but in all cases subject to the
Intercreditor Agreement, such Loan Party will promptly notify (and such Loan
Party hereby authorizes the Collateral Agent so to notify) each Account Debtor
in respect of any Receivable that such Collateral has been assigned to the
Collateral Agent hereunder for the benefit of the Finance Parties, and that any
payments due or to become due in respect of such Collateral are to be made
directly to the Collateral Agent or its designee in accordance with Section 2.04
hereof.

 

Section 4.08                            Certificates of Title.  Upon the occurrence and during the
continuance of an Event of Default and if requested by the Collateral Agent,
such Loan Party shall in the case of Equipment constituting one or more titled
vehicles deliver to the Collateral Agent any and all certificates of title,
applications for title or similar evidence of ownership of such Equipment and
shall cause the Collateral Agent to be named as lienholder on any such
certificate of title or other evidence of ownership.

 

Section 4.09                            Disposition of Collateral.  Without the prior written consent of the
Collateral Agent, such Loan Party will not sell, lease, exchange, assign or
otherwise dispose of, or grant any option with respect to, any Collateral or
create or suffer to exist any Lien (other than the Security Interests and
Permitted Liens) on any Collateral except that, subject to the rights of the
Collateral Agent and the Finance Parties hereunder if a Default or an Event of
Default shall have occurred and be continuing, such Loan Party may sell, lease,
license, assign, exchange or otherwise dispose of, or grant options with
respect to, Collateral to the extent permitted by the Indenture and all Term
Credit Agreements, if any, whereupon, in the case of any such disposition, the
Security Interests created hereby in such item (but not in any Proceeds arising
from such disposition) shall cease immediately without any further action on
the part of the Collateral Agent.

 

Section 4.10                            Insurance.  On or prior to the Issue Date, such Loan
Party will cause the Collateral Agent to be named as an insured party and loss
payee, effective at all times on and after the Issue Date, on each insurance
policy covering risks relating to any of its Inventory and Equipment.  Each such insurance policy shall include
effective waivers by the insurer of all claims for insurance premiums

 

25

 

against the Collateral
Agent and the Finance Parties and provide that no cancellation, termination or
material modification thereof shall be effective until at least 30 days after
receipt by the Collateral Agent of notice thereof.  Such Loan Party hereby appoints the Collateral Agent as its
attorney-in-fact, effective during the continuance of an Event of Default, to
make proof of loss, claims for insurance and adjustments with insurers, and to
execute or endorse all documents, checks or drafts in connection with payments
made as a result of any insurance policies.

 

Such
Loan Party assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Loan Party to pay the
Finance Obligations shall in no way be affected or diminished by reason of the
fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Loan Party.

 

Section 4.11                            Information Regarding Collateral.  Such Loan Party will, promptly upon request,
provide to the Collateral Agent all information and evidence it may reasonably
request concerning the Collateral to enable the Collateral Agent to enforce the
provisions of this Amended Agreement.

 

Section 4.12                            Covenants Regarding Intellectual Property.  Except in respect of subparagraphs (a),
(b), (c), (e) and (f) below where the failure to do
so could not reasonably be expected to have a Material Adverse Effect:

 

(a)                                  Such
Loan Party (either itself or through licensees) will, for each Patent, not do any
act, or omit to do any act, whereby any Patent that is material to the conduct
of such Loan Party’s business may become invalidated or dedicated to the
public, and shall continue to mark any products covered by a Patent as required
by the patent laws.

 

(b)                                 Such
Loan Party (either itself or, if permitted by Law, through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Loan
Party’s business, (i) maintain such Trademark in full force free from any claim
of abandonment or invalidity from non-use, material alteration, naked licensing
or genericide, (ii) maintain the quality of products and services offered under
such Trademark in a manner substantially consistent with or better than the
quality of such products and services as of the date hereof, (iii) display such
Trademark with proper notice, including notice of federal registration to the
extent permitted by applicable Law and consistent with past practice, (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights, (v) not permit any assignment in gross of such Trademark
and (vi) allow the Collateral Agent and its designees the right, at any time
and from time to time, to inspect such Loan Party’s premises and to examine and
observe such Loan Party’s books, records and operations, including, without
limitation, its quality control processes, upon reasonable notice and at such
reasonable times and as often as may be reasonably requested.

 

(c)                                  Such
Loan Party (either itself or through licensees) will, for each work covered by
a Copyright material to the conduct of its business, continue to publish,
reproduce, display, adopt and distribute the work with appropriate copyright
notice.

 

(d)                                 Such
Loan Party shall promptly notify the Collateral Agent if it knows or has reason
to know that any Patent, Trademark or Copyright (or any application or
registration relating thereto) material to the conduct of its business may
become abandoned or dedicated to the public, or of any adverse determination or
development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court, other than ordinary
course United States Patent and Trademark Office actions) regarding such Loan
Party’s ownership of any Patent, Trademark, Copyright

 

26

 

or Software material to
the conduct of its business, its right to register the same or to keep, use or
maintain the same.

 

(e)                                  Such
Loan Party will take all commercially reasonable steps to file, maintain and
pursue each application relating to the Patents, Trademarks and/or Copyrights
(and to obtain the relevant grant or registration) material to the conduct of
its business and to preserve and maintain all common law rights in any
Trademarks and each registration of the Patents, Trademarks and Copyrights
material to the conduct of its business, including filing and paying fees for
applications for renewal, reissues, divisions, continuations,
continuations-in-part, affidavits of use, affidavits of incontestability and
maintenance, and, unless such Loan Party shall reasonably determine that any
such action would be of negligible economic value, to initiate opposition,
interference, reexamination and cancellation proceedings against third parties.

 

(f)                                    If
any rights to any Patent, Trademark, Copyright, Software or License relating
thereto material to the conduct of its business is believed infringed,
misappropriated, breached or diluted by a third party, such Loan Party shall
notify the Collateral Agent promptly after it learns thereof and shall, unless
such Loan Party shall reasonably determine that any such action would be of
negligible economic value, promptly take such action as is consistent with past
practice of such Loan Party to enforce its rights and to recover any and all
damages for such infringement, misappropriation or dilution, and take such
other actions as such Loan Party shall reasonably deem appropriate under the
circumstances to protect such Patent, Trademark, Copyright, Software or
License.

 

(g)                                 Within
45 days after the end of each fiscal quarter of DRI, each Loan Party will (i)
inform the Collateral Agent of all applications for Patents, Trademarks or
Copyrights filed during such fiscal quarter by such Loan Party or by any agent,
employee, licensee or delegate on its behalf with the United States Patent and
Trademark Office or the United States Copyright Office or any office or agency
in any political subdivision of the United States or in any other country or
any political subdivision thereof and (ii) upon request of the Collateral
Agent, execute any and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Security Interests in
such application, any resulting Patent, Trademark or Copyright and the goodwill
or accounts and general intangibles of such Loan Party relating thereto or
represented thereby, and such Loan Party hereby appoints the Collateral Agent
its attorney-in-fact to execute and file such writings for the foregoing
purposes.

 

(h)                                 As
to all material Licenses (excluding non-exclusive Licenses of Software) entered
into after the date hereof with any third party licensor, such Loan Party will
use commercially reasonable and good faith efforts to obtain all requisite
consents or approvals by the licensor to effect the grant of security interest
in all of such Loan Party’s right, title and interest thereunder to the
Collateral Agent or its designee and to effect the sub-license contemplated
under Section 5.02(e) hereof upon and during the continuance of an
Event of Default, and such Loan Party shall provide immediate written notice to
the Collateral Agent upon failure to obtain any such consent or approval.

 

(i)                                     Such
Loan Party shall take all actions (and cause all other Persons, including
licensees, to the extent such other Persons are subject to its control) which
are necessary or advisable to protect, preserve and confirm the validity,
priority, perfection or enforcement of the rights granted to the Collateral
Agent under this Amended Agreement and give the Collateral Agent prompt written
notice if, after the date hereof, such Loan Party shall obtain rights to any
Trademarks, Patents or Copyrights, or enter into any new license agreements
material to the conduct of its business, regarding any of the foregoing, and
such Loan Party hereby agrees that the provisions of this Amended Agreement
shall automatically apply thereto.  Such
Loan Party will use commercially reasonable efforts so as not to permit the
inclusion in any contract or agreement governing or relating to any Trademarks,
Patents or Copyrights

 

27

 

obtained after the date
hereof or any license agreements entered into after the date hereof relating to
any of the foregoing of any provisions that would impair or prevent the
creation of a security interest in, or the assignment of, such Loan Party’s
rights and interests therein.  Such Loan
Party will, upon request of the Collateral Agent, execute and file any and all
agreements, instruments, documents and papers as the Collateral Agent may
reasonably request to evidence or perfect the Security Interests in any Patent,
Trademark or Copyright (or application therefor) and the goodwill or accounts
and general intangibles of such Loan Party relating thereto or represented
thereby, and such Loan Party, without limiting its obligation to itself take such
action, hereby appoints the Collateral Agent its attorney-in-fact to execute
and file such writings for the foregoing purposes.

 

Section 4.13                            Deposit Accounts and Securities Accounts.  No Loan Party shall establish after the date
hereof or permit to exist any Deposit Account (other than Exempt Deposit
Accounts or Individual Store Accounts or Excluded Deposit Accounts) or any
Securities Account (except any such account maintained with the Collateral
Agent or constituting Collateral Accounts) without promptly delivering to the
Collateral Agent a fully executed Account Control Agreement with respect to
such account.  Subject to Section 2.04(b)
hereof and the rights of the Collateral Agent under Article V
hereof, each Loan Party shall cause all Proceeds of Collateral hereunder to be
deposited in a Deposit Account maintained with the Collateral Agent or with
respect to which an effective Account Control Agreement has been delivered to
the Collateral Agent.  No Loan Party
shall permit the aggregate amount of (i) overnight funds on deposit in all
Individual Store Accounts to exceed $500,000, and (ii) funds on deposit in the
restricted Deposit Accounts to exceed, in each case, $5,000 at any time.

 

Section 4.14                            Electronic Chattel Paper.  Such Loan Party shall create, store and
otherwise maintain all records comprising electronic Chattel Paper in a manner
such that:  (i) a single authoritative
copy of each such record exists which is unique, identifiable and, except as
provided in clause (iv) below, unalterable, (ii) the authoritative copy
of each such record shall identify the Collateral Agent as the assignee
thereof, (iii) the authoritative copy of each such record is communicated to
and maintained by the Collateral Agent or its designee, (iv) copies or
revisions that add or change any assignees of such record can be made only with
the participation of the Collateral Agent, (v) each copy (other than the
authoritative copy) of such record is readily identifiable as a copy and (vi)
any revision of the authoritative copy of such record is readily identifiable
as an authorized or unauthorized revision.

 

Section 4.15                            Claims.  In the event any Claim in excess of
$1,000,000 arises or otherwise becomes known after the date hereof, the
applicable Loan Party will deliver to the Collateral Agent a supplement to Schedule 1.01
hereto describing such Claim and expressly subjecting such Claim, all Judgments
and/or Settlements with respect thereto and all Proceeds thereof to the
Security Interests hereunder.

 

Section 4.16                            After-Acquired Property.  Such Loan Party will use all commercially
reasonable efforts to insure that any material contract or agreement relating
to any asset or property acquired after the Issue Date will not contain
provisions that would impair or prevent the creation of a Security Interest
therein or result in such contract or agreement being an Excluded Contract.

 

ARTICLE V

GENERAL AUTHORITY; REMEDIES

 

Section 5.01                            General Authority.  Each Loan Party hereby irrevocably appoints
the Collateral Agent and any officer or agent thereof as its true and lawful
attorney-in-fact, with full power of substitution, in the name of such Loan
Party, the Collateral Agent, the Finance Parties or otherwise, for the sole use
and benefit of the Collateral Agent and the Finance Parties, but at such Loan
Party’s expense, to the extent permitted by Law and subject to the
Intercreditor Agreement and the Collateral Agency

 

28

 

Agreement, to exercise at
any time and from time to time while  an
Event of Default has occurred and is continuing all or any of the following
powers with respect to all or any of the Collateral, all acts of such attorney
being hereby ratified and confirmed; such power, being coupled with an
interest, is irrevocable until the Finance Obligations are paid in full and
until there is no commitment by any Finance Party to make further advances,
incur obligations or otherwise give value:

 

(i)                                     to
take any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to carry out the terms of this
Amended Agreement;

 

(ii)                                  to
receive, take, endorse, assign and deliver any and all checks, notes, drafts,
acceptances, documents and other negotiable and non-negotiable Instruments taken
or received by such Loan Party as, or in connection with, Collateral;

 

(iii)                               to
accelerate any Receivable which may be accelerated in accordance with its
terms, and to otherwise demand, sue for, collect, receive and give acquittance
for any and all monies due or to become due on or by virtue of Collateral;

 

(iv)                              to
commence, settle, compromise, compound, prosecute, defend or adjust any Claim,
suit, action or proceeding with respect to, or in connection with, the
Collateral;

 

(v)                                 to
sell, transfer, assign or otherwise deal in or with the Collateral or the
Proceeds or avails thereof, including, without limitation, for the
implementation of any assignment, lease, License, sublicense, grant of option,
sale or other disposition of any Patent, Trademark, Copyright or Software or
any action related thereto, as fully and effectually as if the Collateral Agent
were the absolute owner thereof;

 

(vi)                              to
extend the time of payment of any or all of the Collateral and to make any
allowance and other adjustments with respect thereto; and

 

(vii)                           to do,
at its option, but at the expense of such Loan Party, at any time or from time
to time, all acts and things which the Collateral Agent deems necessary to
protect or preserve the Collateral and to realize upon the Collateral.

 

Section 5.02                            Remedies upon Event of Default.

 

(a)                                  If
any Event of Default has occurred and is continuing, the Collateral Agent may,
subject to the Intercreditor Agreement and the Collateral Agency Agreement, in
addition to all other rights and remedies granted to it in this Amended
Agreement and any other agreement securing, evidencing or relating to the
Finance Obligations: (i) exercise on behalf of the Finance Parties all rights
and remedies of a secured party under the UCC (whether or not in effect in the
jurisdiction where such rights are exercised) and, in addition, (ii) without
demand of performance or other demand or notice of any kind (except as herein
provided or as may be required by mandatory provisions of Law) to or upon any
Loan Party or any other Person (all of which demands and/or notices are hereby
waived by each Loan Party), (A) withdraw all cash and Liquid Investments in the
Collateral Accounts and apply such cash and Liquid Investments and other cash,
if any, then held by it as Collateral as specified in Section 5.04,
(B) give notice and take sole possession and control of all amounts on deposit
in or credited to any Deposit Account or Securities Account pursuant to the
related Account Control Agreement and apply all such funds as specified in Section 5.04
hereof and (C) if there shall be no such cash, Liquid Investments or other
amounts or if such cash, Liquid Investments and other amounts shall be
insufficient to pay all the Finance Obligations in full or cannot be so applied
for any reason or if the Collateral Agent determines to

 

29

 

do so, collect, receive,
appropriate and realize upon the Collateral and/or sell, assign, give an option
or options to purchase or otherwise dispose of and deliver the Collateral (or
contract to do so) or any part thereof at public or private sale, at any office
of the Collateral Agent or elsewhere in such manner as is commercially
reasonable and as the Collateral Agent may deem best, for cash, on credit or
for future delivery, without assumption of any credit risk and at such price or
prices as the Collateral Agent may deem satisfactory.

 

(b)                                 The
Collateral Agent shall give each Loan Party not less than 10 days’ prior notice
of the time and place of any sale or other intended disposition of any of the
Collateral, except any Collateral which is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market.  Any such notice shall (i) in the case of a
public sale, state the time and place fixed for such sale, (ii) in the case of
a private sale, state the day after which such sale may be consummated, (iii)
contain the information specified in UCC Section 9-613, (iv) be
authenticated and (v) be sent to the parties required to be notified pursuant
to Section 9-611(c) of the UCC; provided that, if the Collateral
Agent fails to comply with this sentence in any respect, its liability for such
failure shall be limited to the liability (if any) imposed on it as a matter of
law under the UCC.  The Collateral Agent
and each Loan Party agree that such notice constitutes reasonable notification
within the meaning of Section 9-611 of the UCC.  Except as otherwise provided herein, each Loan Party hereby
waives, to the extent permitted by applicable Law, notice and judicial hearing
in connection with the Collateral Agent’s taking possession or disposition of
any of the Collateral.

 

(c)                                  The
Collateral Agent or any Finance Party may be the purchaser of any or all of the
Collateral so sold at any public sale (or, if the Collateral is of a type
customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, at any private sale).  Each Loan Party will execute and deliver
such documents and take such other action as the Collateral Agent deems
necessary or advisable in order that any such sale may be made in compliance
with Law.  Upon any such sale, the
Collateral Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. 
Each purchaser at any such sale shall hold the Collateral so sold to it
absolutely and free from any claim or right of whatsoever kind.  Any such public sale shall be held at such
time or times within ordinary business hours and at such place or places as the
Collateral Agent may fix in the notice of such sale.  At any such sale, the Collateral may be sold in one lot as an
entirety or in separate parcels, as the Collateral Agent may determine.  The Collateral Agent shall not be obligated
to make any such sale pursuant to any such notice.  The Collateral Agent may, without notice or publication, adjourn
any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the same may be so adjourned without further
notice.  In the case of any sale of all
or any part of the Collateral on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the selling price is paid
by the purchaser thereof, but the Collateral Agent shall not incur any
liability in the case of the failure of such purchaser to take up and pay for
the Collateral so sold and, in the case of any such failure, such Collateral
may again be sold upon like notice.

 

(d)                                 For
the purpose of enforcing any and all rights and remedies under this Amended
Agreement, the Collateral Agent may, subject to the Intercreditor Agreement, if
any Event of Default has occurred and is continuing, (i) require each Loan
Party to, and each Loan Party agrees that it will, at its expense and upon the
request of the Collateral Agent, forthwith assemble, store and keep all or any
part of the Collateral as directed by the Collateral Agent and make it
available at a place designated by the Collateral Agent which is, in the
Collateral Agent’s opinion, reasonably convenient to the Collateral Agent and
such Loan Party, whether at the premises of such Loan Party or otherwise, it
being understood that such Loan Party’s obligation so to deliver the Collateral
is of the essence of this Amended Agreement and that, accordingly, upon
application to a court of equity having jurisdiction, the Collateral Agent
shall be entitled to a decree requiring specific performance by such Loan Party
of such obligation; (ii) to the

 

30

 

extent permitted by
applicable Law, enter, with or without process of law and without breach of the
peace, any premise where any of the Collateral is or may be located, and
without charge or liability to any Loan Party, seize and remove such Collateral
from such premises; (iii) have access to and use such Loan Party’s books and
records relating to the Collateral; and (iv) prior to the disposition of the
Collateral, store or transfer it without charge in or by means of any storage
or transportation facility owned or leased by such Loan Party, process, repair
or recondition it or otherwise prepare it for disposition in any manner and to
the extent the Collateral Agent deems appropriate and, in connection with such
preparation and disposition, use without charge any Intellectual Property or
technical process used by such Loan Party. 
The Collateral Agent may also render any or all of the Collateral
unusable at any Loan Party’s premises and may dispose of such Collateral on
such premises without liability for rent or costs.

 

(e)                                  Without
limiting the generality of the foregoing, if any Event of Default has occurred
and is continuing:

 

(i)                                     the
Collateral Agent may (subject to the express terms of any valid and enforceable
restriction in favor of a Person who is not a Group Company that prohibits,
requires any consent, or establishes any other conditions for, a license
thereof) license, or sublicense, whether general, special or otherwise, and
whether on an exclusive (if consistent with past business practices) or
non-exclusive basis, any Patents, Trademarks or Copyrights included in the
Collateral throughout the world for such term or terms, on such conditions and
in such manner as the Collateral Agent shall in its sole and commercially
reasonable discretion determine;

 

(ii)                                  the
Collateral Agent may (without assuming any obligations or liability
thereunder), at any time and from time to time, enforce (and shall have the
exclusive right to enforce) against any Licensee or sublicensee all rights and
remedies of any Loan Party in, to and under any License and take or refrain
from taking any action under any provision thereof, and each Loan Party hereby
releases the Collateral Agent and each of the Finance Parties from, and agrees
to hold the Collateral Agent and each of the Finance Parties free and harmless
from and against any claims arising out of, any lawful action so taken or
omitted to be taken with respect thereto;

 

(iii)                               upon
request by the Collateral Agent, each Loan Party will use its commercially
reasonable efforts to obtain all requisite consents or approvals by the
licensor or sublicensor of each License to effect the assignment of all of such
Loan Party’s right, title and interest thereunder to the Collateral Agent or
its designee and will execute and deliver to the Collateral Agent a power of
attorney, in form and substance reasonably satisfactory to the Collateral
Agent, for the implementation of any lease, assignment, License, sublicense,
grant of option, sale or other disposition of a Patent, Trademark or Copyright;
and

 

(iv)                              the
Collateral Agent may direct each Loan Party to refrain, in which event each
such Loan Party shall refrain, from using or practicing any Trademark, Patent
or Copyright in any manner whatsoever, directly or indirectly, and shall, if
requested by the Collateral Agent, change such Loan Party’s name to eliminate
therefrom any use of any Trademark and will execute such other and further
documents as the Collateral Agent may request to further confirm this change
and transfer ownership of the Trademarks, Patents, Copyrights and registrations
and any pending applications therefor to the Collateral Agent.

 

(f)                                    In
the event of any disposition following the occurrence and during the
continuance of any Event of Default of any Patent, Trademark or Copyright
pursuant to this Article V, each Loan Party shall supply its
know-how and expertise relating to the manufacture and sale of the products or
services bearing Trademarks or the products, services or works made or rendered
in

 

31

 

connection with or under
Patents, Trademarks or Copyrights, and its customer lists and other records
relating to such Patents, Trademarks or Copyrights and to the distribution of
said products, services or works, to the Collateral Agent.

 

(g)                                 If
any Event of Default has occurred and is continuing, the Collateral Agent,
instead of exercising the power of sale conferred upon it pursuant to this Section 5.02,
may proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction, and may in addition
institute and maintain such suits and proceedings as the Collateral Agent may
deem appropriate to protect and enforce the rights vested in it by this Amended
Agreement.

 

(h)                                 If
any Event of Default has occurred and is continuing, the Collateral Agent
shall, to the extent permitted by applicable Law, without notice to any Loan
Party or any party claiming through any Loan Party, without regard to the
solvency or insolvency at such time of any Person then liable for the payment of
any of the Finance Obligations, without regard to the then value of the
Collateral and without requiring any bond from any complainant in such
proceedings, be entitled as a matter of right to the appointment of a receiver
or receivers (who may be the Collateral Agent) of the Collateral or any part
thereof, and of the profits, revenues and other income thereof, pending such
proceedings, with such powers as the court making such appointment shall
confer, and to the entry of an order directing that the profits, revenues and
other income of the property constituting the whole or any part of the
Collateral be segregated, sequestered and impounded for the benefit of the
Collateral Agent and the Finance Parties, and each Loan Party irrevocably
consents to the appointment of such receiver or receivers and to the entry of
such order.

 

(i)                                     Each
Loan Party agrees, to the extent it may lawfully do so, that it will not at any
time in any manner whatsoever claim or take the benefit or advantage of, any
appraisal, valuation, stay, extension, moratorium, turnover or redemption law,
or any Law permitting it to direct the order in which the Collateral shall be
sold, now or at any time hereafter in force which may delay, prevent or
otherwise affect the performance or enforcement of this Amended Agreement, and
each Loan Party hereby waives all benefit or advantage of all such Laws.  Each Loan Party covenants that it will not
hinder, delay or impede the execution of any power granted to the Collateral
Agent or any other Finance Party in any Finance Document.

 

(j)                                     Each
Loan Party, to the extent it may lawfully do so, on behalf of itself and all
who claim through or under it, including, without limitation, any and all
subsequent creditors, vendees, assignees and lienors, waives and releases all
rights to demand or to have any marshalling of the Collateral upon any sale,
whether made under any power of sale granted herein or pursuant to judicial
proceedings or under any foreclosure or any enforcement of this Amended
Agreement, and consents and agrees that all of the Collateral may at any such
sale be offered and sold as an entirety.

 

(k)                                  Each
Loan Party waives, to the extent permitted by Law, presentment, demand, protest
and any notice of any kind (except the notices expressly required hereunder or
in the other Finance Documents) in connection with this Amended Agreement and
any action taken by the Collateral Agent with respect to the Collateral.

 

Section 5.03                            Limitation on Duty of Collateral Agent in
Respect of Collateral. 
Beyond the exercise of reasonable care in the custody thereof, neither
the Collateral Agent nor the Finance Parties shall have any duty to exercise
any rights or take any steps to preserve the rights of any Loan Party in the
Collateral in its or their possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto, nor
shall the Collateral Agent or any Finance Party be liable to any Loan Party

 

32

 

or any other Person for
failure to meet any obligation imposed by Section 9-207 of the UCC or any
successor provision.  Each Loan Party
agrees that the Collateral Agent shall at no time be required to, nor shall the
Collateral Agent be liable to any Loan Party for any failure to, account
separately to any Loan Party for amounts received or applied by the Collateral
Agent from time to time in respect of the Collateral pursuant to the terms of
this Amended Agreement.  Without
limiting the foregoing, the Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property, and shall not be liable or
responsible for any loss or damage to any of the Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any
warehouseman, carrier, forwarding agency, consignee or other agent or bailee
selected by the Collateral Agent in good faith.

 

Section 5.04                            Application of Proceeds.

 

(a)                                  Priority of Distributions.  The proceeds of any sale of, or other
realization upon, all or any part of the Collateral and any cash held in the
Collateral Accounts shall be applied as set forth in Section 4.06
of the Collateral Agency Agreement, subject in all cases to the priorities set
forth in the Intercreditor Agreement. 
The Collateral Agent may make distributions hereunder in cash or in kind
or, on a ratable basis, in any combination thereof.

 

(b)                                 Deficiencies.  It is understood that the Loan Parties shall
remain liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the amount of the Finance Obligations.

 

ARTICLE VI

COLLATERAL AGENT

 

Section 6.01                            Resignation of the Term Loan Collateral Agent
and Appointment of the Collateral Agent.  In accordance with the provisions of Section 6.02
below, with effect from the date of this Amended Agreement (i) the Term Loan
Collateral Agent hereby resigns (the “Resignation”) as collateral agent
for the Finance Parties, and (ii) DRI appoints (the “Appointment”) US
Bank National Association as the Collateral Agent, and the Collateral Agent
accepts the Appointment, to act as Collateral Agent for the Finance Parties,
such Appointment to take effect immediately following the Resignation.  Upon effect of the Resignation, all rights,
powers, duties and other interests of the Term Loan Collateral Agent under this
Amended Agreement, the Intercreditor Agreement and in and to the Collateral
shall be transferred to, and become vested in, US Bank National Association as
Collateral Agent for itself and on behalf of the Finance Parties, without any
further act, deed or conveyance required (the “Assignment”).  Each of the parties hereto hereby confirms
that this Section 6.01 shall constitute notice of the Assignment to
such party in connection with any other Collateral Document where such notice
may be required.

 

Section 6.02                            Concerning the Collateral Agent.  The provisions of Article VI of
the Collateral Agency Agreement shall inure to the benefit of the Collateral
Agent in respect of this Amended Agreement and shall be binding upon all Loan
Parties, all Finance Parties and upon the parties hereto in such respect.  In furtherance and not in derogation of the
rights, privileges and immunities of the Collateral Agent therein set forth:

 

(i)                                     The
Collateral Agent is authorized to take all such action as is provided to be
taken by it as Collateral Agent hereunder and all other action reasonably
incidental thereto.  As to any matters
not expressly provided for herein or as to any matters which permit but do not
require action by the Collateral Agent (including, without limitation, the
timing and methods of

 

33

 

realization upon the Collateral), the Collateral Agent
shall act or refrain from acting in accordance with written instructions from
the Directing Creditors as contemplated by the Collateral Agency Agreement or,
in the absence of such instructions or provisions, subject to the terms of the
Collateral Agency Agreement, in accordance with its discretion.

 

(ii)                                  The
Collateral Agent shall not be responsible for the existence, genuineness or
value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Security Interests in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder unless such action or omission constitutes gross negligence
or willful misconduct.  The Collateral
Agent shall have no duty to ascertain or inquire as to the performance or
observance of any of the terms of this Amended Agreement or any Finance Document
by any Loan Party.

 

Section 6.03                            Appointment of Co-Collateral Agent.  At any time or times, in order to comply
with any legal requirement in any jurisdiction, the Collateral Agent may in
consultation with DRI and, unless an Event of Default shall have occurred and
be continuing, with its consent (not to be unreasonably withheld or delayed)
appoint another bank or trust company or one or more other persons, either to
act as co-agent or co-agents, jointly with the Collateral Agent, or to act as
separate agent or agents on behalf of the Finance Parties with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment (which may, in the
discretion of the Collateral Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 6.01).  Notwithstanding any such appointment but
only to the extent not inconsistent with such legal requirements or, in the
reasonable judgment of the Collateral Agent, not unduly burdensome to it or any
such co-agent, such Loan Party shall, so long as no Event of Default shall have
occurred and be continuing, be entitled to deal solely and directly with the
Collateral Agent rather than any such co-agent in connection with the
Collateral Agent’s rights and obligations under this Amended Agreement.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.01                            Notices.  (a)                                Unless
otherwise specified herein, all notices, requests or other communications to
any party hereunder shall be in writing (including by facsimile transmission)
and mailed, faxed or delivered to the address or facsimile number: (i) in the
case of Holdings, DRI, Duane Reade, any Subsidiary Guarantor or any Noteholder
or the Trustee, as set forth in Section 13.02 of the Indenture,
(ii) in the case of any Term Loan Agent or Term Lender named in any Term Credit
Agreement, as set forth in the relevant provision of any such Term Credit
Agreement, (iii) in the case of the Collateral Agent, as set forth on the
signature pages hereof, (iv) in the case of any Swap Creditor, as set forth in
the applicable Swap Agreement or (v) in the case of any party, to such other
address, facsimile number or electronic mail address as such party shall
hereafter specify for the purpose of communications hereunder by notice to the
other parties hereto.  Each such notice,
request or other communication shall be effective upon the earlier to occur of
(i) actual receipt by the intended recipient and (ii) (A) if delivered by hand
or by courier, when signed for by or on behalf of the intended recipient, (B)
if delivered by mail, four Business Days after deposit in the mails, postage
prepaid and (C) if delivered by facsimile, when sent and receipt has been
confirmed electronically.  Rejection or
refusal to accept, or the inability to deliver because of a changed address of
which no notice was given shall not affect the validity of notice given in
accordance with this Section.

 

(b)                                 This
Amended Agreement may be transmitted and/or signed by facsimile and, if so
transmitted or signed shall, subject to requirements of Law, have the same
force and effect as a manually-signed original and shall be binding on all Loan
Parties and the Finance Parties.  The
Collateral

 

34

 

Agent may also require
that this Amended Agreement be confirmed by a manually-signed original hereof; provided,
however, that the failure to request or deliver the same shall not limit
the effectiveness of any facsimile document or signature.

 

Section 7.02                            No Waivers; Non-Exclusive Remedies.  No failure or delay on the part of any
Finance Party to exercise, no course of dealing with respect to, and no delay
in exercising, any right, power or privilege under this Amended Agreement or
any other Finance Document or any other document or agreement contemplated
hereby or thereby and no course of dealing between any Finance Party and any of
the Loan Parties shall operate as a waiver thereof nor shall any single or
partial exercise of any such right, power or privilege hereunder or under any
Finance Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder.  The rights and remedies provided herein and
in the other Finance Documents are cumulative and are not exclusive of any
other remedies provided by Law.  Without
limiting the foregoing, nothing in this Amended Agreement shall impair the
right of any Finance Party to exercise any right of set-off or counterclaim it
may have and to apply the amount subject to such exercise to the payment of
indebtedness of any Loan Party other than its indebtedness under the Finance
Documents.  Each Loan Party agrees, to
the fullest extent it may effectively do so under applicable Law, that any
holder of a participation in a Finance Obligation, whether or not acquired
pursuant to the terms of any applicable Finance Document, may exercise rights
of set-off or counterclaim or other rights with respect to such participation
as fully as if such holder of a participation were a direct creditor of the
Loan Party in the amount of such participation.

 

Section 7.03                            Compensation
and Expenses of the Collateral Agent; Indemnification.

 

(a)                                  Expenses.  The Loan Parties, jointly and severally, agree to pay (i) all
reasonable out-of-pocket expenses of the Collateral Agent, including fees and
disbursements of special and local counsel for the Collateral Agent, in
connection with the preparation and administration of this Amended Agreement or
any document or agreement contemplated hereby, any waiver or consent hereunder
or any amendment hereof or any Default or alleged Default, (ii) all taxes which
the Collateral Agent or any other Finance Party may be required to pay by
reason of the security interests granted in the Collateral (including any
applicable transfer taxes) or to free any of the Collateral from the lien
thereof, and (iii) if an Event of Default or any payment default (after the
expiration of any applicable grace period) under any Swap Agreement occurs, all
out-of-pocket expenses incurred by the Trustee under the Indenture, a Term Loan
Agent under any Term Credit Agreement and, in the case of a Swap Agreement, the
relevant Finance Party, including (without duplication) the fees and disbursements
of counsel, in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.

 

(b)                                 Protection of Collateral.  If any Loan Party fails to comply with the
provisions of  any Finance Document,
such that the value of any Collateral or the validity, perfection, rank or
value of any Security Interest is thereby diminished or potentially diminished
or put at risk, after notice to such Loan Party (unless in the reasonable
judgment of the Collateral Agent, the giving of such notice would be  impractical) the Collateral Agent may, but
shall not be required to, effect such compliance on behalf of such Loan Party,
and the Loan Parties shall reimburse the Collateral Agent for the costs thereof
within 30 days of receipt of a reasonably detailed written invoice
therefor.  All insurance expenses and
all expenses of protecting, storing, warehousing, appraising, handling,
maintaining and shipping the Collateral, or in respect of the sale or other
disposition thereof, including any and all excise, property, sales and use
taxes imposed by any state, federal or local authority on any of the
Collateral, or in respect of periodic appraisals and inspections of the
Collateral, shall be borne and paid by the Loan Parties.  If any Loan Party fails to promptly pay any
portion thereof when due, the Collateral Agent may, at its option, but shall

 

35

 

not be required to, after
notice to such Loan Party (unless in the reasonable judgment of the Collateral
Agent, the giving of such notice would be impractical) pay the same and charge
the Loan Parties’ account therefor, and the Loan Parties agree to reimburse the
Collateral Agent therefor on demand. 
All sums so paid or incurred by the Collateral Agent for any of the
foregoing and any and all other sums for which any Loan Party may become liable
hereunder and all costs and expenses (including attorneys’ fees, legal expenses
and court costs) reasonably incurred by the Collateral Agent or any Finance
Party in enforcing or protecting the Security Interests or any of their rights
or remedies under this Amended Agreement, shall, together with interest thereon
from demand and until paid at the rate applicable to interest at the highest
rate applicable under the Finance Documents in respect of overdue obligations,
be additional Finance Obligations hereunder.

 

(c)                                  Indemnification.  Each Loan Party agrees to indemnify the
Collateral Agent, each other Finance Party and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact and their
respective successors and assigns (each, an “Indemnitee” and,
collectively, “Indemnitees”) and hold each Indemnitee harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, suits, judgments, costs and expenses of any kind,
including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by, imposed on or asserted against such
Indemnitee in connection with any investigation or administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
brought or threatened relating to or arising out of this Amended Agreement or
any other Collateral Document or in any other way connected with the
enforcement of any of the terms of, or the preservation of any rights under,
this Amended Agreement or any other Collateral Document or in any way relating
to or arising out of the manufacture, ownership, ordering, purchasing,
delivery, control, acceptance, lease, financing, possession, operation,
condition, sale, return or other disposition or use of the Collateral
(including, without limitation, latent or other defects, whether or not
discoverable), the violation of the Laws of any country, state or other
Governmental Authority, or any tort (including, without limitation, any claims,
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage) or contract claim; provided that no Indemnitee shall have the
right to be indemnified hereunder for such Indemnitee’s own gross negligence or
willful misconduct or that of its affiliates, directors, trustees, agents or
employees as determined by a court of competent jurisdiction in a final,
non-appealable judgment or order.  Each
Loan Party agrees that upon written notice by any Indemnitee of the assertion
of such a liability, obligation, loss, damage, penalty, claim, demand, action,
judgment or suit, such Loan Party shall assume full responsibility for the
defense thereof.  Each Indemnitee agrees
to use its best efforts to notify the Loan Parties of any such assertion of
which such Indemnitee has knowledge.

 

(d)                                 Contribution.  If and to the extent that the obligations of
any Loan Party under this Section 7.03 are unenforceable for any
reason, each Loan Party hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable Law.

 

(e)                                  Obligations; Survival.  Any amounts paid by any Indemnitee as to
which such Indemnitee has the right to reimbursement shall constitute Finance
Obligations.  The indemnity obligations
of the Loan Parties contained in this Section 7.03 shall continue
in full force and effect notwithstanding the full payment of all Finance
Obligations and notwithstanding the discharge thereof.

 

Section 7.04                            Enforcement.  The Finance Parties agree that this Amended
Agreement may be enforced only by the action of the Collateral Agent, acting
upon the instructions of the Directing Creditors, if so required under the
Collateral Agency Agreement, and that no other Finance Party shall have any
right individually to seek to enforce this Amended Agreement or to realize upon
the security to be granted hereby, it being understood and agreed that such
rights and remedies may be exercised by the

 

36

 

Collateral Agent for the
benefit of the Finance Parties upon the terms of this Amended Agreement and the
Collateral Agency Agreement.

 

Section 7.05                            Amendments and Waivers.  Any provision of this Amended Agreement may
be amended, changed, discharged, terminated or waived if, but only if, such
amendment or waiver is in writing and is signed by each Loan Party affected by
such amendment, change, discharge, termination or waiver (it being understood
that the addition or release of any Loan Party hereunder shall not constitute
an amendment, change, discharge, termination or waiver affecting any Loan Party
other than the Loan Party so added or released and it being further understood
and agreed that any supplement to Schedule 1.01 delivered pursuant
to Section 4.15 hereof shall not require the consent of any Loan Party)
and by the Collateral Agent (with the consent of the Directing Creditors, the
applicable Swap Representative, the Trustee, or a Term Loan Agent as the case
may be, to the extent required by the Collateral Agency Agreement).

 

Section 7.06                            Successors and Assigns.  This Amended Agreement shall be binding upon
each of the parties hereto and inure to the benefit of the Collateral Agent and
the Finance Parties and their respective successors and assigns.  In the event of an assignment of all or any
of the Finance Obligations, the rights hereunder, to the extent applicable to
the indebtedness so assigned, may be transferred with such indebtedness.  No Loan Party shall assign or delegate any
of its rights and duties hereunder without the prior written consent of all of
the Finance Parties.

 

Section 7.07                            Governing Law.  THIS AMENDED AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE
EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTIONS OTHER THAN NEW
YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTIONS.

 

Section 7.08                            Limitation of Law; Severability.

 

(a)                                  All
rights, remedies and powers provided in this Amended Agreement may be exercised
only to the extent that the exercise thereof does not violate any applicable
provision of Law, and all the provisions of this Amended Agreement are intended
to be subject to all applicable mandatory provisions of Law which may be
controlling and be limited to the extent necessary so that they will not render
this Amended Agreement invalid, unenforceable in whole or in part, or not
entitled to be recorded, registered or filed under the provisions of any
applicable Law.

 

(b)                                 If
any provision hereof is invalid or unenforceable in any jurisdiction, then, to
the fullest extent permitted by Law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Finance Parties in order to carry out the intentions
of the parties hereto as nearly as may be possible; and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provisions in any other jurisdiction.

 

Section 7.09                            Counterparts; Effectiveness.  This Amended Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.  This Amended Agreement shall become
effective with respect to each Loan Party when the Collateral Agent shall
receive counterparts hereof executed by itself and such Loan Party.

 

37

 

Section 7.10                            Additional Loan Parties.  It is understood and agreed that any
Affiliate of DRI that is required by any Finance Document to execute a
counterpart of this Amended Agreement after the date hereof shall automatically
become a Loan Party hereunder with the same force and effect as if originally
named as a Loan Party hereunder by executing an instrument of accession or joinder
substantially in the form of Exhibit G hereto and delivering the same to
the Collateral Agent.  Concurrently with
the execution and delivery of such instrument of accession or joinder, such
Affiliate shall take all such actions and deliver to the Collateral Agent all
such documents and agreements as such Affiliate would have been required to
deliver to the Collateral Agent on or prior to the date of this Amended
Agreement had such Affiliate been a party hereto on the date of this Amended
Agreement.  Such additional materials
shall include, among other things, an opinion of counsel to the extent required
under the Indenture or any Term Credit Agreement and supplements to Schedules
1.01, 3.06 and 4.01 hereto (which Schedules shall thereupon
automatically be amended and supplemented to include all information contained
in such supplements) such that, after giving effect to the joinder of such
Affiliate, each of Schedules 1.01, 3.06 and 4.01 hereto is
true, complete and correct with respect to such Affiliate as of the effective
date of such accession or joinder.  The
execution and delivery of any such instrument of accession or joinder, and the
amendment and supplementation of the Schedules hereto as provided in the immediately
preceding sentence, shall not require the consent of any other Loan Party or
Finance Party hereunder.  The rights and
obligations of each Loan Party hereunder shall remain in full force and effect
notwithstanding the addition of any new Loan Party as a party to this Amended
Agreement.

 

Section 7.11                            Termination; Release of Loan Parties.

 

(a)                                  Termination.  Upon the full payment and performance of all Finance Obligations
(other than contingent indemnification obligations), the cancellation or
expiration of all outstanding Swap Agreements (or the provision of cash
collateral in an amount equal to 100% of the Swap Termination Value thereunder)
and the termination of all commitments under the Finance Documents, the
Security Interests shall terminate and all rights to the Collateral shall revert
to the Loan Parties.  In addition, at
any time and from time to time prior to such termination of the Security
Interests, the Collateral Agent may release any of the Collateral or
subordinate its Security Interests therein to Liens in favor of certain third
parties with the prior written consent of the Directing Creditors or as
provided in Article V of the Collateral Agency Agreement.  Upon any such termination of the Security
Interests or release of Collateral, the Collateral Agent will, upon request by
and at the expense of any Loan Party (and, in the case of a release of
Collateral, upon receipt of a written certification of a Responsible Officer of
DRI and Duane Reade that the Trustee has received all documents, if any,
required by the Trust Indenture Act and the Indenture) execute and deliver to
such Loan Party such documents as such Loan Party shall reasonably request to
evidence the termination of the Security Interests or the release of such
Collateral, as the case may be.  Any
such documents shall be without recourse to or warranty by the Collateral Agent
or the other Finance Parties.  The
Collateral Agent shall have no liability whatsoever to any other Finance Party
as a result of any release of Collateral by it as permitted by this Section 7.11.  Upon any release of Collateral pursuant to
this Section 7.11, none of the Finance Parties shall have any
continuing right or interest in such Collateral or the Proceeds thereof.  Upon satisfaction and discharge of the
Indenture as provided in Article 12 of the Indenture or any similar
provision of any other Term Credit Agreement, or legal defeasance or covenant
defeasance of the Indenture as provided in Article 8 of the Indenture or
any similar provision of any other Term Credit Agreement, the Note/Term Obligations
under the Note Documents and/or the relevant Term Loan Documents, as
applicable, shall be deemed to be paid in full for purposes of Sections 7.04,
7.05 and this Section 7.11(a).

 

(b)                                 Release of Loan Parties.  If any part of the Collateral (x) is taken
by eminent domain, condemnation or other similar circumstances, or (y) is sold,
transferred, otherwise disposed of or liquidated in compliance with the
requirements of the Finance Documents (or such sale, transfer, other
disposition or liquidation has been approved in writing by the Directing
Creditors), then in each such

 

38

 

case, such Collateral
shall be automatically released from the Security Interests created hereby and
the Collateral Agent, at the request and expense of such Loan Party, will (upon
receipt of a written certification of a Responsible Officer of DRI and Duane
Reade that the Trustee has received all documents, if any, required by the
Trust Indenture Act and the Indenture) assign, transfer and deliver to such
Loan Party (without recourse and without representation or warranty) such of
the Collateral as is then being (or has been) so taken, sold, transferred,
disposed of or liquidated as may be in the possession or control of the Collateral
Agent and has not theretofore been released pursuant to this Amended
Agreement.  Further, upon the release of
a Guarantor from its obligations under all guaranties of the Finance
Obligations in accordance with the provisions thereof and the other Finance
Documents, such Guarantor (and the Collateral assigned by such Guarantor
pursuant hereto) shall be automatically released from this Amended Agreement
and the Collateral Agent will, upon request by and at the expense of such
Guarantor, execute and deliver to such Guarantor such documents as such
Guarantor shall reasonably request to evidence the release of such Guarantor
and such Collateral.

 

(c)                                  Other Releases.  If property that constitutes either (A) all or substantially
all of the Collateral securing Finance Obligations or (B) less than all or
substantially all of the Collateral securing Finance Obligations is released
with the consent of the Directing Creditors in accordance with the Collateral
Agency Agreement, then in each such case, the Collateral Agent, at the request
and expense of such Loan Party, will (upon receipt of a written certification
of a Responsible Officer of DRI and Duane Reade that the Trustee has received
all documents, if any, required by the Trust Indenture Act and the Indenture) duly
release from the security interest created hereby and assign, transfer and
deliver to such Loan Party (without recourse and without representation or
warranty) such of the Collateral as is then being (or has been) so released as
may be in the possession or control of the Collateral Agent and has not
theretofore been released pursuant to this Amended Agreement, and execute and
deliver to such Loan Party such documents as such Loan Party may reasonably
request to evidence the release of such Collateral.  If, in the case of any or all of the Revolving Lender Priority
Collateral, a first priority Lien thereon is released by the Revolving Credit
Collateral Agent or as otherwise authorized or directed by the Revolving Credit
Collateral Agent (provided, however, that if a Lien securing
obligations under the Revolving Credit Agreement is reinstated on any or all of
the Revolving Lender Priority Collateral upon which the Lien securing Finance
Obligations has been released pursuant to this sentence then, the Lien securing
the Finance Obligations on such Revolving Lender Priority Collateral will also
be deemed reinstated on a second priority basis), such Revolving Lender
Priority Collateral shall be automatically released from the Security Interests
created hereby and the Collateral Agent, at the request and expense of such
Loan Party, will (upon receipt of a written certification of a Responsible
Officer of DRI and Duane Reade that the Trustee has received all documents, if
any, required by the Trust Indenture Act and the Indenture) execute and deliver
to such Loan Party such documents as such Loan Party may reasonably request to
evidence the release of such Revolving Lender Priority Collateral.  In addition, if any Capital Stock or other
securities shall, after the Issue Date, meet the criteria of any of clauses
(ii), (iv) or (v) of the proviso of Section 2. 01,
such Capital Stock or other securities shall automatically be deemed to be
released from the Collateral and the Lien of this Amended Agreement and the
Collateral Agent shall promptly after receipt of an Officer’s Certificate
deliver such Capital Stock or other securities then in its possession to the
applicable Loan Party together with such releases and other documents as may be
reasonably requested by such Loan Party.

 

Section 7.12                            Entire Agreement.  This Amended Agreement and the other
Collateral Documents constitute the entire agreement and understanding among
the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, and any contemporaneous oral agreements and
understandings relating to the subject matter hereof and thereof.

 

[Signature Pages Follow]

 

39

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amended Agreement to be
duly executed by their respective authorized officers as of the day and year
first written above.

 

 

	
  LOAN PARTIES:

  	
  DUANE READE
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John K.
  Henry

  	
   

  
	
   

  	
   

  	
  Name:     John K. Henry

  
	
   

  	
   

  	
  Title:       Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DUANE READE INC.
  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John K.
  Henry

  	
   

  
	
   

  	
   

  	
  Name:     John K. Henry

  
	
   

  	
   

  	
  Title:       Senior Vice President and Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DUANE READE, a New York General

  Partnership

  
	
   

  	
   

  
	
   

  	
  By: Duane Reade
  Inc., a General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John K.
  Henry

  	
   

  
	
   

  	
   

  	
  Name:     John K. Henry

  
	
   

  	
   

  	
  Title:       Senior Vice President and Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: DRI I Inc.,
  a General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John K.
  Henry

  	
   

  
	
   

  	
   

  	
  Name:     John K. Henry

  
	
   

  	
   

  	
  Title:       Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DRI I INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John K. Henry

  	
   

  
	
   

  	
   

  	
  Name:     John K. Henry

  
	
   

  	
   

  	
  Title:       Chief Financial Officer

  

 

S-1

 

	
   

  	
  DUANE READE
  INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John K.
  Henry

  	
   

  
	
   

  	
   

  	
  Name:     John K. Henry

  
	
   

  	
   

  	
  Title:       Senior Vice President and Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DUANE READE
  REALTY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John K.
  Henry

  	
   

  
	
   

  	
   

  	
  Name:     John K. Henry

  
	
   

  	
   

  	
  Title:       Senior Vice President and Chief
  Financial Officer

  

 

S-2

 

	
  COLLATERAL
  AGENT:

  	
  US BANK NATIONAL ASSOCIATION,

  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  Hopkins

  	
   

  
	
   

  	
   

  	
  Name: Michael
  Hopkins

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone:

  
	
   

  	
  Telecopier:

  

 

S-3

 

	
  TERM LOAN
  COLLATERAL AGENT:

  	
  BANK OF AMERICA, N.A.,

  as Term Loan Collateral Agent 

  (solely for the purposes of Section 6.01)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

S-4

 

Schedule 1.01A to Security
Agreement

 

SCHEDULE OF
CLAIMS

 

Commercial Tort Claims

 

1.                                       Duane
Reade v. Neal Brickman. 
Duane Reade Inc. is the plaintiff seeking approximately $160,000 in
misappropriated escrow funds.  S. Ct.
N.Y. Co., Index No. 604464/02; filed 12/11/02.

 

2.                                       Duane
Reade v. Bhauseh Engineer, Saleh Alonar, Abdual Hakim Harman, and Jasuer
Singh.  Lawsuit to recover value of
stolen goods taken in fencing scheme.

 

3.                                       Duane
Reade v. Local 338.  S. Ct.
N.Y. Co., Index No. 109518/03.  Duane
Reade Inc. has brought tortious interference claims against union for
interruption caused to Duane Reade Inc. operations by Local 338 members’
attempts to solicit votes in an ATC election by Duane Reade Inc.
employees.  Duane Reade also has a case
pending for defamation against the union for various statements made by the
union in the press and its various street leaflets.

 

4.                                       Duane
Reade v. Kroop et al.  Action
by Duane Reade for defamatory statements made by trustees of union funds
regarding amounts that are allegedly owed by Duane Reade to certain union
funds.

 

5.                                       Duane
Reade v. RCPI Trust, Tishman Properties et al.  Duane Reade has filed a tortious
interference complaint against Tishman for interfering with a contractual
relationship Duane Reade had with a third party.

 

6.                                       Ordinary
course lawsuits to recover civil monetary damages from shoplifters and persons
who steal from Duane Reade.

 

 

Schedule 1.01B to Security
Agreement

 

EXCLUDED
DEPOSIT ACCOUNTS

 

	
  Name of
  Financial Institution

  	
   

  	
  Account Number:

  	
   

  
	
  Fleet National Bank

  	
   

  	
  9412142436

  	
   

  
	
  Fleet National Bank

  	
   

  	
  9412142444

  	
   

  
	
  Fleet National Bank

  	
   

  	
  9427728720

  	
   

  
	
  Fleet National Bank

  	
   

  	
  94276 61052

  	
   

  
	
  Fleet National Bank

  	
   

  	
  94277 24201

  	
   

  

 

RESTRICTED DEPOSIT ACCOUNTS

 

	
  Name of
  Financial Institution

  	
   

  	
  Account Number:

  	
   

  
	
  Fleet National Bank

  	
   

  	
  9412142436

  	
   

  
	
  Fleet National Bank

  	
   

  	
  9412142444

  	
   

  
	
  Fleet National Bank

  	
   

  	
  9427728720

  	
   

  

 

 

Schedule 3.04 to Security
Agreement

 

CONSENTS

 

[PW to provide]

 

 

Schedule 3.05 to Security
Agreement

 

SCHEDULE OF
DEPOSIT ACCOUNTS

AND SECURITIES ACCOUNTS

 

Deposit Accounts:

 

	
  Entity

  	
   

  	
  Name of Financial

  Institution

  	
   

  	
  Account Numbers

  	
   

  	
  Description of

  Purpose for Which

  Account Is Used

  	
   

  
	
  Duane Reade Inc.

  	
   

  	
  Fleet National
  Bank

  777 Main Street

  Hartford, CT 06115

  	
   

  	
  94051 89009

  	
   

  	
  Main Operating
  Account

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Duane Reade Inc.

  	
   

  	
  Fleet National
  Bank

  777 Main Street

  Hartford, CT 06115

  	
   

  	
  93928 53280

  	
   

  	
  Blocked Deposit
  Account for Cash and Currency for the Stores

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Duane Reade Inc.

  	
   

  	
  Fleet National
  Bank

  777 Main Street

  Hartford, CT 06115

  	
   

  	
  93928 53387

  	
   

  	
  Blocked Account
  for Credit Card Sales

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Duane Reade Inc.

  	
   

  	
  Fleet National
  Bank

  777 Main Street

  Hartford, CT 06115

  	
   

  	
  94276 61052

  	
   

  	
  Accounts Payable
  Disbursing Account

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Duane Reade Inc.

  	
   

  	
  Fleet National
  Bank

  777 Main Street

  Hartford, CT 06115

  	
   

  	
  94277 24201

  	
   

  	
  Payroll Control
  Disbursing Account

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Duane Reade
  International, Inc.

  	
   

  	
  Fleet National
  Bank

  777 Main Street

  Hartford, CT 06115

  	
   

  	
  94277 28739

  	
   

  	
  Duane Reade
  International Operating Account

  	
   

  

 

 

Securities
Accounts:

 

None.

 

 

Schedule 4.01 to Security
Agreement

 

SCHEDULE OF
FILINGS MADE OR TO BE MADE

TO PERFECT SECURITY INTERESTS

 

	
  Name of Debtor

  	
   

  	
  Filing Type

  	
   

  	
  Finance Document

  	
   

  	
  State

  	
   

  	
  Filing
  Office

  	
   

  	
  Filing
  Date

  	
   

  	
  File
  Number

  	
   

  
	
  Legal Name of
  Debtor

  	
   

  	
  UCC-1/UCC-2/UCC-3:  General/ILO/Fixture Filing/Assignment/Name
  Change/Termination

  	
   

  	
  Security/Pledge
  Agreement (If doing an ILO/ Assignment/Name Change/Termination, put Original
  File Date and Number here)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUANE READE
  HOLDINGS, INC.

  	
   

  	
  UCC-3

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  DE

  	
   

  	
  Secretary of
  State

  	
   

  	
  08/02/2004

  	
   

  	
  42165969

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUANE READE, INC.

  	
   

  	
  UCC-3

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  DE

  	
   

  	
  Secretary of
  State

  	
   

  	
  08/02/2004

  	
   

  	
  42165688

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUANE READE, a
  New York general partnership

  	
   

  	
  UCC-3

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  NY

  	
   

  	
  Department of
  State of New York

  	
   

  	
  08/03/2004

  	
   

  	
  200408030795055

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DRI I INC.

  	
   

  	
  UCC-3

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  DE

  	
   

  	
  Secretary of
  State

  	
   

  	
  08/02/2004

  	
   

  	
  42165746

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUANE READE
  INTERNATIONAL, INC.

  	
   

  	
  UCC-3

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  DE

  	
   

  	
  Secretary of
  State

  	
   

  	
  08/02/2004

  	
   

  	
  42165795

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUANE READE
  REALTY, INC.

  	
   

  	
  UCC-3

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  DE

  	
   

  	
  Secretary of
  State

  	
   

  	
  08/02/2004

  	
   

  	
  42165753

  	
   

  

 

	
  Name of Debtor

  	
   

  	
  Filing Type

  	
   

  	
  Finance Document

  	
   

  	
  State

  	
   

  	
  Filing
  Office

  	
   

  	
  Filing
  Date

  	
   

  	
  File
  Number

  	
   

  
	
  Legal Name of
  Debtor

  	
   

  	
  UCC-1/UCC-2/UCC-3:  General/ILO/Fixture Filing/Assignment/Name
  Change/Termination

  	
   

  	
  Security/Pledge
  Agreement (If doing an ILO/ Assignment/Name Change/Termination, put Original
  File Date and Number here)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUANE READE
  HOLDINGS, INC.

  	
   

  	
  UCC-1

  	
   

  	
  Security Agreement
  and Pledge Agreement

  	
   

  	
  DE

  	
   

  	
  Secretary of
  State

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUANE READE, INC.

  	
   

  	
  UCC-1

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  DE

  	
   

  	
  Secretary of
  State

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUANE READE, a
  New York general partnership

  	
   

  	
  UCC-1

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  NY

  	
   

  	
  Department of
  State of New York

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DRI I INC.

  	
   

  	
  UCC-1

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  DE

  	
   

  	
  Secretary of
  State

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUANE READE
  INTERNATIONAL, INC.

  	
   

  	
  UCC-1

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  DE

  	
   

  	
  Secretary of
  State

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUANE READE
  REALTY, INC.

  	
   

  	
  UCC-1

  	
   

  	
  Security
  Agreement and Pledge Agreement

  	
   

  	
  DE

  	
   

  	
  Secretary of
  State

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Exhibit A to Security Agreement

 

Form of
Grant of Security Interest

in United States Patents and Trademarks

 

FOR
GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby
acknowledged, [Loan Party Name], [Loan Party Description] (the “Grantor”),
having its chief executive office at [Loan Party Notice Address], hereby grants
to [Collateral Agent Name], as Collateral Agent, (the “Grantee”), with
offices at [Collateral Agent Notice Address], a security interest in all of the
Grantor’s right, title and interest in, to and under the following (all of the
following items or types of property being herein collectively referred to as
the “Patent and Trademark Collateral”), whether presently existing or hereafter
arising or acquired:

 

(i)                                     each
United States patent and patent application, including each Patent and Patent
Application referred to on Schedule A hereto;

 

(ii)                                  each
Patent License, including each Patent License listed on Schedule A
hereto;

 

(iii)                               each United States
trademark, trademark registration and trademark application, and all of the
goodwill of the business connected with the use of, and symbolized by, each
trademark, trademark registration and trademark application, including each
Trademark, Trademark Registration and Trademark Application referred to in Schedule B
hereto;

 

(iv)                              each
Trademark License, whether registered or not, including each Trademark License
referred to in Schedule B hereto, and all of the goodwill of the
business connected with the use of, and symbolized by, each Trademark; and

 

(v)                                 all
products and proceeds of the foregoing, including any claim by the Assignor
against third parties for past, present or future infringement of any Patent,
or past, present or future infringement or dilution of any Trademark or
Trademark registration, including any Patent or Trademark listed on Schedule A
or B hereto, or under any Patent or Trademark licensed under any Patent
License or Trademark License, including any such License listed on Schedule A
or B hereto, or for injury to the goodwill associated with any
Trademark, Trademark registration or Trademark License.

 

THIS
GRANT OF SECURITY INTEREST is granted in conjunction with the security
interests granted to the Grantee pursuant to the Amended and Restated Security
Agreement among the Grantor, the Grantee and certain other parties dated as of
December 20, 2004, as amended, modified or supplemented from time to time
(the “Security Agreement”).

 

THIS GRANT
OF SECURITY INTEREST has been granted in conjunction with the security interest
granted to the Grantee under the Security Agreement.  The rights and remedies of the Grantee with respect to the
security interest granted herein are without prejudice to, and are in addition
to those set forth in the Security Agreement, all terms and provisions of which
are incorporated herein by reference. 
In the event that any provisions of this Grant of Security Interest are
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.

 

 

IN
WITNESS WHEREOF, the undersigned have executed this Grant of Security Interest
as of the          day of                         ,
2004.

 

	
   

  	
  [LOAN PARTY NAME],

  as Grantor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [COLLATERAL AGENT NAME],

  as Collateral Agent, as Grantee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

STATE
OF                    

            OF                      

 

The
foregoing instrument was acknowledged before me this        
day of                         ,
20    by                              
as                              
of [LOAN PARTY NAME], [LOAN PARTY DESCRIPTION], on behalf of [LOAN PARTY NAME].

 

My commission expires:

 

Notarial Seal

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

 

Schedule A
to Patent and Trademark Grant of Security Interest

 

PATENTS
AND PATENT APPLICATIONS

 

	
  Serial No.
  or

  Patent No.

  	
   

  	
  Date

  	
   

  	
  Issue Title

  	
   

  	
  Inventor

  	
   

  	
  Country

  	
   

  	
  Patent Holder

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PATENT LICENSES

 

	
  Licensor

  	
   

  	
  Licensee

  	
   

  	
  Patent Number(s)

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Schedule B to Patent and
Trademark Grant of Security Interest

 

TRADEMARKS

 

	
  Registration No.

  	
   

  	
  Country

  	
   

  	
  Issue Date

  	
   

  	
  Mark

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

TRADEMARK APPLICATIONS

 

	
  Serial No.

  	
   

  	
  Country

  	
   

  	
  Filing Date

  	
   

  	
  Mark

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

TRADEMARK LICENSES

 

	
  Grantor

  	
   

  	
  Serial or

  Registration No.

  	
   

  	
  Country

  	
   

  	
  Issue or

  Filing Date

  	
   

  	
  Mark

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Exhibit
B to Security Agreement

 

Form of
Grant of Security Interest

in United States Copyrights

 

FOR
GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby
acknowledged, [Loan Party Name], [Loan Party Description] (the “Grantor”),
having its chief executive office at [Loan Party Notice Address], hereby grants
to [Collateral Agent Name], as Collateral Agent, (the “Grantee”), with offices
at [Collateral Agent Notice Address], a security interest in all of the Grantor’s
right, title and interest in, to and under the following (all of the following
items or types of property being herein collectively referred to as the
“Copyright Collateral”), whether presently existing or hereafter arising or
acquired:

 

(i)                                     the
United States and foreign copyrights and any renewals thereof, including each
Copyright listed on Schedule A hereto;

 

(ii)                                  all
other United States and foreign copyrights and any renewals thereof;

 

(iii)                               each Copyright License,
including each Copyright License listed on Schedule A hereto;

 

(iv)                              all
registrations and applications for registration of any such copyright in the
United States or any other country, including registrations, recordings,
supplemental, derivative or collective work registrations and pending applications
for registrations in the United States Copyright Office;

 

(v)                                 all
computer programs, web pages, computer data bases and computer program flow
diagrams, including all source codes and object codes related to any or all of
the foregoing;

 

(vi)                              all
tangible property embodying or incorporating any or all of the foregoing; and

 

(vii)                           all products, proceeds and
related accounts of the foregoing, including any claim by the Assignor against
third parties for past, present or future infringement of any copyright or any
copyright licensed under any copyright license, whether registered or not.

 

THIS
GRANT OF SECURITY INTEREST is granted in conjunction with the security
interests granted to the Grantee pursuant to the Amended and Restated Security
Agreement among the Grantor, the Grantee and certain other parties dated as of
December 20, 2004, as amended, modified or supplemented from time to time
(the “Security Agreement”).

 

THIS
GRANT OF SECURITY INTEREST has been granted in conjunction with the security interest
granted to the Grantee under the Security Agreement.  The rights and remedies of the Grantee with respect to the
security interest granted herein are without prejudice to, and are in addition
to those set forth in the Security Agreement, all terms and provisions of which
are incorporated herein by reference. 
In the event that any provisions of this Grant of Security Interest are
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.

 

 

IN
WITNESS WHEREOF, the undersigned have executed this Grant of Security Interest
as of the
               day
of                    ,
2004.

 

 

	
   

  	
  [LOAN PARTY NAME], as Grantor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [COLLATERAL AGENT NAME],

  as Collateral Agent, as Grantee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

STATE OF

              OF

 

The foregoing instrument
was acknowledged before me this            
day of                ,
20   by                             
as                             
of [LOAN PARTY NAME], [LOAN PARTY DESCRIPTION], on behalf of [LOAN PARTY NAME].

 

My commission expires:

 

Notarial Seal

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

2

 

Schedule A to Copyright Grant of
Security Interest

 

COPYRIGHTS
AND COPYRIGHT APPLICATIONS

 

	
  Serial No.
  or

  Registration No.

  	
   

  	
  Country

  	
   

  	
  Issue or

  Filing Date

  	
   

  	
  Description

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Exhibit
C-1 to Security
Agreement

 

Form of
Blocked Account Service Agreement

 

 

Exhibit
C-2 to Security
Agreement

 

Form of
Deposit Account Control Agreement

 

[Bank
Name] (together with it successors and assigns, the “Bank”) [has
entered] [intends to enter] into arrangements with [Loan Party Name], [Loan
Party Description] (together with its successors and permitted assigns, the “Loan
Party”), [to provide lockbox processing services for the Loan Party (the “Lockbox”)
and, in connection therewith,] the Bank [maintains] [will maintain] for the use
of the Loan Party the deposit account listed on Schedule I hereto as the
“Collection Account” (the “Collection Account”).  [In addition, the Bank maintains the other
deposit accounts used by or on behalf of [the Loan Party] listed on
Schedule I hereto as “Operating Accounts” (collectively, the “Operating
Accounts”] and, together with the Collection Account and any other deposit
accounts at any time established or maintained at the Bank by or for the
benefit of the Loan Party or to which any funds of the Loan Party are at any
time remitted or deposited, but excluding any deposit accounts specifically and
exclusively used for payroll, payroll taxes or other employee wage and benefit
payments, each a “Deposit Account” and, collectively, the “Deposit
Accounts”).

 

The
Loan Party and [Collateral Agent Name]. (together with its successor or successors
in such capacity, the “Collateral Agent”) propose to enter into an
Amended and Restated Security Agreement dated as of December 20, 2004 (as
the same may be amended, supplemented or modified from time to time, the “Security
Agreement”), under which the Loan Party will grant a security interest in
favor of the Collateral Agent in all right, title and interest of the Loan
Party in, to and under:  (i) the Deposit
Accounts; (ii) all checks, money orders, drafts, instruments, electronic funds
transfers and other items and forms of remittance and all funds and other
amounts at any time paid, deposited or credited (whether for collection,
provisionally or otherwise), held or otherwise in the possession or under the
control of, or in transit to, the Bank or any agent or custodian thereof for
credit to or to be deposited in any Deposit Account; (iii) all funds and cash
balances or other amounts in or attributable to any Deposit Account; and (iv)
any and all proceeds of any of the foregoing (the Deposit Accounts and all of
such other items of collateral being herein referred to collectively as the “Deposit
Account Collateral”) to secure the payment and performance of the Finance
Obligations (as defined in the Security Agreement).  Capitalized terms defined or used in the Security Agreement and
not otherwise defined herein have, as used herein, the respective meanings
provided for therein.

 

The
Loan Party desires that the Bank enter into this Deposit Account Control
Agreement (as amended, supplemented or modified from time to time, this “Agreement”)
to perfect the security interest of the Collateral Agent in the Deposit Account
Collateral, to vest in the Collateral Agent control of the Deposit Accounts and
to provide for the rights of the parties under this Agreement.

 

Accordingly,
the parties hereto agree as follows:

 

Section 1.                                          Control by the Collateral Agent.  (a) Notwithstanding any other term or
provision of this Agreement or any other agreement between the Bank and the
Loan Party or otherwise, the Bank is hereby authorized and directed by the Loan
Party to, and the Bank agrees that, until the payment in full of all Finance
Obligations and until (i) there is no commitment by any Finance Party to make
further advances, incur obligations or otherwise give value or, if sooner, (ii)
the termination of this Agreement in accordance with the terms hereof, the Bank
will comply with instructions (within the meaning of Section 8-102(a)(12)
of the UCC) originated by the Collateral Agent directing the disposition of
funds from time to time in any Deposit Account or as to any other matters
relating to any Deposit Account or any of the other Deposit Account Collateral
without further consent by the Loan Party (which instructions may include the
giving of stop payment orders for any items being presented to a Deposit
Account for payment).  The Bank is
hereby irrevocably authorized by the Loan Party to change the designation of
the customer on any Deposit Account to the Collateral Agent upon the request of
the

 

 

Collateral Agent, and the
Bank shall so change the customer designation promptly upon such request by the
Collateral Agent.

 

(a)                                  In
addition, effective upon the receipt by the Bank of written notice from the
Collateral Agent that the Collateral Agent is exercising exclusive control over
the Operating Accounts (such notice being referred to as a “Notice of
Exclusive Control”), the Bank shall not permit the Loan Party or any of its
Affiliates to withdraw any amounts from, to draw upon or to otherwise exercise
any authority or powers with respect to the Operating Accounts and all Deposit
Account Collateral related thereto, and the Bank shall not at any such time
honor any instructions of the Loan Party or any of its Affiliates with respect
to the Operating Accounts, other than those approved in writing by the
Collateral Agent or a court of competent jurisdiction.  Until the receipt by the Bank of a Notice of
Exclusive Control, the Loan Party shall be entitled to present items drawn on and
otherwise to withdraw or direct the disposition of funds from the Operating
Accounts.

 

(b)                                 Upon
receipt of notice from the Collateral Agent from time to time, the Bank shall
transfer collected funds from the Deposit Accounts and the Operating Accounts,
at the Loan Party’s cost and expense, by wire transfer or by the ACH method (or
other means acceptable to the Collateral Agent) solely to the Collateral
Agent’s account, Account No. [INSERT CASH PROCEEDS ACCOUNT NUMBER], Attn:
[Agency Services], at the Collateral Agent’s office located at [INSERT
COLLATERAL AGENT NOTICE ADDRESS], ABA No. [INSERT CASH PROCEEDS ACCOUNT ABA
NUMBER] or otherwise to the order of the Collateral Agent.

 

Section 2.                                          Maintenance of Deposit Accounts:  In addition to, and not in lieu of, the
obligations of the Bank to honor instructions of the Collateral Agent, etc. as
agreed in Section 1 hereof, the Bank agrees to maintain the Deposit
Accounts as follows:

 

(a)                                  Maintenance of Deposit Accounts Generally.  The Bank shall follow its usual operational
procedures for the handling of any checks, money orders, drafts, instruments,
electronic funds transfers or other forms of remittance and all funds of the
Loan Party received in or for credit or deposit to a Deposit Account and shall
maintain a record of all such Deposit Account Collateral.

 

(b)                                 Interest.  Until such time as the Bank receives a Notice of Exclusive
Control delivered by the Collateral Agent in accordance with Section 1(b)
above, the Loan Party may direct the Bank with respect to the retention and/or
distribution of interest and other payments on Deposit Account Collateral
deposited in or credited to the Operating Accounts.  All interest and other payments on Deposit Account Collateral
deposited in or credited to the Collection Account shall be deposited and
retained in the Collection Account or otherwise distributed as instructed by
the Collateral Agent.

 

(c)                                  Statements and Confirmations.  At such time or times as the Collateral
Agent may request, the Bank will promptly report to the Collateral Agent the
amounts received in the Lockbox and amounts held in the Deposit Accounts.  Copies of all statements of account,
reports, deposit tickets, deposited items, debit and credit advices and records
and communications concerning the Deposit Accounts and/or any Deposit Account
Collateral deposited therein or credited thereto shall be sent by the Bank to
each of the Loan Party and the Collateral Agent at their respective addresses
referred to in Section 6 below.

 

(d)                                 Tax Reporting.  All items of income, gain, expense and loss
recognized in the Deposit Accounts shall be reported to the Internal Revenue
Service and all state and local taxation authorities under the name and
taxpayer identification number of the Loan Party.

 

 

(e)                                  Notices of Adverse Claims.  Upon receipt of notice of any lien, charge
or other adverse claim against any Deposit Account Collateral (including any
writ, garnishment, judgment, warrant of attachment, execution or similar
process), the Bank will promptly notify the Collateral Agent and the Loan Party
thereof.

 

Section 3.                                          No Liability of Bank.  This Agreement shall not subject the Bank to
any obligation or liability except as expressly set forth herein.  In particular, the Bank shall have no duty
to investigate whether the obligations of the Loan Party to the Collateral
Agent or any other Finance Party are in default or whether the Collateral Agent
is entitled under the Security Agreement or otherwise to give any instructions
or Notice of Exclusive Control.  The
Bank is fully entitled to rely upon such instructions as it believes in good
faith to have originated from the Collateral Agent (even if such instructions
are contrary to or inconsistent with any instructions or demands given by the
Loan Party).

 

Section 4.                                          Subordination of Lien; Waiver of Set-Off.  If the Bank has or subsequently obtains by
agreement, operation of law or otherwise a security interest or other Lien in
any Deposit Account or any Deposit Account Collateral deposited therein or
credited thereto, the Bank hereby agrees that such security interest or other
Lien shall be subordinate to the security interest of the Collateral
Agent.  The Deposit Account Collateral
will not be subject to deduction, set-off, banker’s lien or any other right in
favor of any other Person other than the Collateral Agent, except that the Bank
may set off (i) all amounts due to the Bank in respect of its customary fees
and expenses for the Deposit Accounts, (ii) the amount of any checks, automated
clearinghouse transfers or other forms of remittance that have been credited to
any Deposit Account and subsequently returned unpaid and (iii) any overdrafts
arising as a result thereof; provided that the Bank shall first set off
for such amounts due to it against funds held in the Operating Accounts before
setting off against the Collection Account.

 

Section 5.                                          Representations,
Warranties and Covenants of the Bank. 
The Bank hereby represents, warrants and covenants that:

 

(a)                                  The
Bank has established [the Lockbox and] the Deposit Accounts in the name of the
Loan Party.  [Effective as of the date
of this Amended Agreement, the title of the Collection Account shall be changed
to “[Loan Party Name] — [Collateral Agent Name] Collection Account”.  Except as provided in the foregoing
sentence, the] [The] Bank shall not change the name or account number of any
Deposit Account without the prior written consent of the Collateral Agent.

 

(b)                                 Each
Deposit Account is a “deposit account” as defined in the UCC.

 

(c)                                  Except
for the claims and interest of the Collateral Agent and of the Loan Party in
the Deposit Account Collateral, the Bank does not know of any claim to,
interest in or adverse claim to, the Lockbox, any Deposit Account or any
Deposit Account Collateral deposited therein or credited thereto.

 

(d)                                 There
are no other agreements entered into between the Bank and the Loan Party with
respect to any Deposit Account or any Deposit Account Collateral deposited
therein or credited thereto, and the Bank has not entered into, and until the
termination of this Agreement will not enter into, any agreement with any other
Person relating to any Deposit Account and/or any Deposit Account Collateral
deposited therein or credited thereto pursuant to which it has agreed or will
agree to comply with instructions originated by such other Person as to the disposition
of funds in or from the Deposit Accounts or with respect to any other dealings
with any of the Deposit Account Collateral.

 

(e)                                  The
Bank will not agree that any Person other than the Loan Party or the Collateral
Agent is the Bank’s customer with respect to any Deposit Account.

 

 

(f)                                    This
Agreement constitutes a valid and binding agreement of the Bank, enforceable
against the Bank in accordance with its terms.

 

(g)                                 The
Bank acknowledges that it holds and will hold possession of the Deposit Account
Collateral consisting of instruments and money as bailee for the Collateral
Agent and for the benefit of the Collateral Agent and the Finance Parties.

 

Section 6.                                          Notices.  All notices, requests or other
communications to any party hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party:

 

(i)                                     in
the case of the Collateral Agent, at:

 

[Collateral
Agent Notice Address];

 

(ii)                                  in
the case of the Loan Party, at:

 

[Loan
Party Notice Address]; and

 

(iii)                               in the case of the Bank,
at:

 

[Bank
Notice Address].

 

Each
such notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this paragraph and electronic confirmation of receipt is received, (ii) if
given by mail, 48 hours after such communication is deposited, certified mail,
return receipt requested, in the mails with appropriate first class postage
prepaid, addressed as aforesaid, or (iii) if given by other means, when
delivered at the address specified in this paragraph.  Rejection or refusal to accept, or the inability to deliver
because of a changed address of which no notice was given shall not affect the
validity of notice given in accordance with this paragraph.

 

Section 7.                                          Indemnification of the Bank.  The Loan Party agrees that (i) the Bank is
released from any and all liabilities to the Loan Party arising from the terms
of this Agreement and the compliance by the Bank with the terms hereof, except
to the extent that such liabilities arise from the Bank’s bad faith, willful
misconduct or gross negligence, (ii) neither the Bank nor the Collateral Agent
shall have any liability to the Loan Party for wrongful dishonor of any items
as a result of any instructions of the Collateral Agent and (iii) the Loan
Party, its successors and permitted assigns shall at all times indemnify the
Bank, its affiliates and the respective directors, officers, trustees, agents
and employees of the foregoing (each an “Indemnitee”) and hold each
Indemnitee harmless from and against any and all liabilities, obligations,
losses, damages, penalties, claims, demands, actions, suits, judgments, costs
and expenses of any kind, including, without limitation, the reasonable fees
and disbursements of counsel, which may be incurred by, imposed on or asserted
against such Indemnitee in connection with any investigation or administrative
or judicial proceeding (whether or not such Indemnitee shall be designated a
party thereto) brought or threatened relating to or arising out of this
Agreement or in any other way connected with the enforcement of any of the
terms of, or the preservation of any rights hereunder, or in any way relating
to or arising out of the maintenance, delivery, control, acceptance,
possession, return or other disposition of any Deposit Account or any Deposit
Account Collateral on deposit therein or credited thereto, the violation of the
Laws of any country, state or other governmental body or unit, or any tort or
contract claim; provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee’s own gross negligence or willful
misconduct as determined by a court of competent jurisdiction in a final,
non-appealable judgment or order.

 

 

 

Section 8.                                          Conflicts with Other Agreements.  In the event of any conflict between this
Agreement (or any portion hereof) and any other agreement (including any other
agreement between the Bank and the Loan Party with respect to the Deposit
Accounts) now existing or hereafter entered into, the terms of this Agreement
shall control.

 

Section 9.                                          Amendments and Waivers.  Any provision of this Agreement may be
amended, modified or waived if, but only if, such amendment or waiver is in
writing and is signed by the Loan Party, the Collateral Agent and the Bank.

 

Section 10.                                   Successors and Assigns.  This Agreement shall be binding upon each of
the parties hereto and inure to the benefit of the Collateral Agent and the
Finance Parties and their respective successors and permitted assigns.  In the event of an assignment of all or any
of the Finance Obligations, the rights hereunder, to the extent applicable to
the indebtedness so assigned, may be transferred with such indebtedness.

 

Section 11.                                   Governing Law.  This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York, except as
otherwise required by mandatory provisions of Law.  Notwithstanding any provision in any other agreement, for
purposes of the UCC, New York shall be deemed to be the Bank’s “jurisdiction”
within the meaning of Section 9-304 of the UCC.

 

Section 12.                                   Severability.

 

(a)                                  All
rights, remedies and powers provided in this Agreement may be exercised only to
the extent that the exercise thereof does not violate any applicable provision
of Law, and all the provisions of this Agreement are intended to be subject to
all applicable mandatory provisions of Law which may be controlling and be
limited to the extent necessary so that they will not render this Agreement
invalid, unenforceable in whole or in part, or not entitled to be recorded,
registered or filed under the provisions of any applicable Law.

 

(b)                                 If
any provision hereof is invalid or unenforceable in any jurisdiction, then, to
the fullest extent permitted by Law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Collateral Agent and the other Finance Parties in
order to carry out the intentions of the parties hereto as nearly as may be
possible; and (ii) the invalidity or unenforceability of any provision hereof
in any jurisdiction shall not affect the validity or enforceability of such
provisions in any other jurisdiction.

 

Section 13.                                   Counterparts; Effectiveness.  This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when
the Collateral Agent shall receive counterparts hereof executed by itself, the
Bank and the Loan Party.  Delivery of an
executed counterpart of this Agreement by facsimile shall have the same force
and effect as delivery of an original executed counterpart of this
Agreement.  Any party delivering an
executed counterpart of this Agreement by facsimile shall also deliver an
original executed counterpart, but failure to do so shall not affect the
validity, enforceability or binding effect of this Agreement.

 

Section 14.                                   Termination.  Except as hereinafter set forth, the
obligations of the Bank to the Collateral Agent pursuant to this Agreement
shall continue in effect until the Security Interests of the Collateral Agent
in the Deposit Accounts have been terminated pursuant to the terms of the Security
Agreement and the Collateral Agent has notified the Bank of such termination in
writing.  The Collateral Agent agrees to
provide such notice of termination upon the request of the Loan Party on

 

 

or after the termination
of the Collateral Agent’s Security Interest in the Deposit Accounts pursuant to
the terms of the Security Agreement. 
The Bank may terminate this Amended Agreement only upon 30 days’ notice
to the Collateral Agent, by canceling the Deposit Accounts and transferring all
funds, if any, deposited in or credited to the Deposit Accounts to another
deposit account with another bank to be designated by the Collateral Agent or
otherwise to the order of the Collateral Agent.  After any such termination, the Bank shall nonetheless be
obligated promptly to transfer to such other bank anything from time to time
received in or for credit to the Deposit Account.  The termination of this Agreement shall not terminate any Deposit
Account or the Lockbox or alter the obligations of the Bank to the Loan Party
pursuant to any other agreement with respect to the Deposit Accounts.

 

[Signature Pages Follow]

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
written above.

 

	
  LOAN PARTY:

  	
  [LOAN PARTY
  NAME]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Address]

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone:

  
	
   

  	
  Telecopier:

  
	
   

  	
   

  
	
   

  	
   

  
	
  COLLATERAL
  AGENT:

  	
  [COLLATERAL AGENT NAME],

  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Address]

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone:

  
	
   

  	
  Telecopier:

  
	
   

  	
   

  
	
   

  	
   

  
	
  DEPOSITARY BANK:

  	
  [DEPOSITARY BANK NAME]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Address]

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone:

  
	
   

  	
  Telecopier:

  

 

 

Form of
Consent to Assignment

Letter of Credit Proceeds

 

This
CONSENT TO ASSIGNMENT (as amended, modified or supplemented from time to time,
this “Consent”) is dated as of [As of Date] and is between [LC ISSUER
NAME], [LC ISSUER DESCRIPTION] (the “Issuer”), and [COLLATERAL AGENT NAME] as
Collateral Agent (together with its successor or successors in such capacity,
the “Collateral Agent”).

 

The
Issuer has issued a standby letter of credit, No. [NUMBER] dated as of [DATE OF
ISSUE] in the stated face amount of $[AMOUNT] and having an initial
schedule expiration date of [DATE OF EXPIRATION] (as the same may be
amended, supplemented, extended or otherwise modified from time to time, the “Letter
of Credit”) for the account of [ACCOUNT PARTY] in favor of [NAME OF
APPLICABLE LOAN PARTY], [DESCRIPTION OF APPLICABLE LOAN PARTY] (the “Beneficiary”).

 

Under
the terms of the Amended and Restated Security Agreement dated as of
December 20, 2004 (as the same may be amended, modified or supplemented
from time to time, the “Security Agreement”) among the Beneficiary, the
other Loan Parties from time to time party thereto and the Collateral Agent,
and as collateral security for the Finance Obligations referred to therein, the
Beneficiary has assigned to the Collateral Agent and granted to the Collateral
Agent a security interest in all right, title and interest of the Beneficiary
in, to and under (i) the Letter of Credit, (ii) all related “letter-of-credit
rights” (as defined in the Uniform Commercial Code) and (ii) all rights of the
Beneficiary to payment or performance under the Letter of Credit, whether or
not the Beneficiary has demanded or is now or hereafter becomes entitled to
demand payment or performance, and all rights of the Beneficiary to demand
payment or performance under the Letter of Credit (all of the foregoing being
referred to herein as the “LC Collateral”).  Terms used herein without definition which are defined in the
Security Agreement have the respective meanings set forth therein.

 

By
executing this Consent to Assignment in the space indicated below, you hereby:

 

(i)                                     irrevocably
consent to the assignment by the Beneficiary to the Collateral Agent pursuant
to the Security Agreement of all of the Beneficiary’s right, title and interest
in, to and under the LC Collateral and all Proceeds thereof as collateral
security for the Finance Obligations;

 

(ii)                                  agree
that, unless otherwise notified by the Collateral Agent, you shall pay all
disbursements under the Letter of Credit and otherwise transfer all proceeds of
the LC Collateral by wire transfer or by ACH method (or other means acceptable
to the Collateral Agent) solely to the Collateral Agent’s account, Account No.
[ACCOUNT NUMBER], Attn: Agency Services, at the Collateral Agent’s office
located at [COLLATERAL AGENT NOTICE ADDRESS], ABA No. [ACCOUNT ABA NUMBER] or
otherwise to the order of the Collateral Agent;

 

(iii)                               agree that neither the
Collateral Agent nor any Finance Party shall be subject to any liability or
obligation under the LC Collateral and acknowledge the right of the Collateral
Agent and the Finance Parties, in their own name or in the name of the
Beneficiary, to demand payment or performance under the Letter of Credit; and

 

(iv)                              acknowledge
the right of the Collateral Agent, following the occurrence of an Event of
Default, to exercise its rights under the Security Agreement as a secured
creditor

 

 

and
collateral assignee of the LC Collateral and to make all demands, give all
notices, take all notices and exercise all rights of the Beneficiary under the
LC Collateral.

 

This
letter agreement shall be terminable upon joint delivery of notice by the
Beneficiary and the Collateral Agent to you.

 

By
signing this letter, you hereby consent and agree to the foregoing, and agree
that you will not exercise any right of setoff or any similar right in
connection with the LC Collateral.

 

If the
foregoing is acceptable to you, please execute the enclosed copy of this letter
and return it to the Beneficiary in the enclosed stamped, self-addressed
envelope.

 

	
   

  	
  [NAME OF
  APPLICABLE LOAN PARTY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
  Consented and
  Agreed as of

  this               
  day of               ,         

  
	
   

  
	
   

  
	
  [NAME OF ISSUING BANK],

  as Issuer 

  
	
   

  
	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
   

  
	
  Consented and
  Agreed as of

  this                
  day of                 ,         

  
	
   

  
	
   

  
	
  [COLLATERAL AGENT NAME]

  as Collateral Agent 

  
	
   

  
	
   

  
	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

Exhibit G to Security Agreement

 

Form of
Description of Collateral

 

Description for
Face of UCC-1:

 

All
personal property of the Debtor, whether now existing or hereafter arising,
including, without limitation, all of the Debtor’s right, title and interest in
and to all accounts, accounts receivable, contract rights, money, instruments,
documents, chattel paper, general intangibles, partnership interests, limited
liability company interests, investment property, certificated securities,
uncertificated securities, security entitlements, securities accounts,
commodities contracts, commodity accounts, inventory, equipment, software,
letter-of-credit rights, health-care-insurance receivables, payment intangibles,
commercial tort claims, deposit accounts, as-extracted collateral and
fixtures.  Products and proceeds of the
foregoing, including any of the foregoing which are acquired with any cash
proceeds of the foregoing, are included.

 

 

EXHIBIT
G

 

Form of Loan Party Accession
Agreement

 

LOAN PARTY ACCESSION AGREEMENT dated as of                     ,
         among DUANE READE INC,
DUANE READE, the NEW LOAN PARTY referred to herein, and U.S. Bank National
Association, as Collateral Agent.

 

Duane
Reade Inc., a Delaware corporation (together with its successors and permitted
assigns, “DRI”), and Duane Reade, a New York general partnership
(together with its successors and permitted assigns, “Duane Reade”),
have issued Senior Secured Floating Rate Notes due 2010 (together with any
Additional Notes referred to below, the “Senior Secured Notes”) pursuant
to an Indenture dated as of December 20, 2004 (as amended, restated,
supplemented or modified from time to time and including any agreement
extending the maturity of, refinancing or otherwise restructuring all or any
portion of the obligations of DRI and Duane Reade under such Indenture or any
successor agreement, the “Indenture”) among DRI, Duane Reade and US Bank
National Association, as Trustee (together with its successor or successors in
such capacity, the “Trustee”).

 

The
obligations of DRI and Duane Reade under and in respect of the Senior Secured
Notes have been guaranteed by Duane Reade Holdings, Inc., a Delaware
corporation (together with its successors and permitted assigns, “Holdings”),
DRI I Inc., a Delaware corporation (“DRI I”), Duane Reade International,
Inc., a Delaware corporation (“DR International”) and Duane Reade
Realty, Inc., a Delaware corporation (“DR Realty”) and all other direct
and indirect domestic subsidiaries of Holdings pursuant to the Indenture and
the Guaranties and have been secured pursuant to (i) the Amended and Restated
Security Agreement, dated as of December 20, 2004 among the Loan Parties
(as defined below) and US Bank National Association, as Collateral Agent (the “Security
Agreement”) and (ii) the Amended and Restated Pledge Agreement, dated as of
December 20, 2004, among the Loan Parties and US Bank National
Association, as Collateral Agent (the “Pledge Agreement”).  Each of Holdings, DRI, Duane Reade, DRI I,
DR International and DR Realty are referred to in the Security Agreement and
the Pledge Agreement individually as a “Loan Party” and, collectively,
as the “Loan Parties”). 
Capitalized terms defined in the Security Agreement and not otherwise
defined herein have, as used herein, the respective meanings provided for them
therein.

 

[New
Loan Party Name], [New Loan Party Description] (the “New Loan Party”),
was [formed] [acquired] by [Borrower] [[Name of Immediate Parent Company],
[Description of Immediate Parent Company] and a [Wholly-Owned] Subsidiary of
Borrower], [DESCRIBE FORMATION OR ACQUISITION TRANSACTION, AS APPLICABLE].

 

Section 4.12
of the Indenture requires DRI to cause each Restricted Subsidiary (as such term
is defined in the Indenture) formed or acquired after the Issue Date to become
a party to the Security Agreement as an additional “Loan Party” and to become a
party to the Pledge Agreement as an additional “Loan Party”.  The Security Agreement and the Pledge Agreement
specify that such additional Subsidiaries may become “Loan Parties” under each
of the Security Agreement and the Pledge Agreement by execution and delivery of
a counterpart of each such Document. 
From time to time, DRI and Duane Reade may incur additional Indebtedness
which it is otherwise permitted to incur under the Indenture in the form of
loans or other debt financing pursuant to a Term Credit Agreement (as defined
in the Security Agreement) and, to induce the Noteholders under the Indenture and
lenders under the Term Credit Agreement, and as consideration for extensions of
credit previously made to, and/or Swap Agreements previously entered into with,
the Loan Parties, the New Loan Party has agreed to execute and deliver this
Loan Party Accession Agreement (as the same may be amended, supplemented or
modified

 

 

from time to time, this “Agreement”)
in order to evidence its agreement to become a “Loan Party” under each of the
Security Agreement and the Pledge Agreement. 
Accordingly, the parties hereto agree as follows:

 

Section 1.                                          Security
Agreement.  In accordance with
Section 7.10 of the Security Agreement, the New Loan Party hereby (i)
agrees that, by execution and delivery of a counterpart signature page to the
Security Agreement in the form attached hereto as Exhibit A, the New Loan Party
shall become a “Loan Party” under the Security Agreement with the same force
and effect as if originally named therein as a Loan Party (as defined in the
Security Agreement), (ii) acknowledges receipt of a copy of and agrees to be
obligated and bound as a “Loan Party” by all of the terms and provisions of the
Security Agreement, (iii) grants to the Collateral Agent for the benefit of the
Finance Parties a continuing security interest in the Collateral (as defined in
the Security Agreement), in each case to secure the full and punctual payment
of the Finance Obligations (as defined in the Security Agreement) in accordance
with the terms thereof and to secure the performance of all of the obligations
of each Loan Party under the Indenture and the other Finance Documents, (iv)
represents and warrants that each of Schedules 1.01, 3.06 and 4.01 to the
Security Agreement, as amended, supplemented and modified as set forth on
Schedules 1.01, 3.06 and 4.01 hereto,  is
complete and accurate with respect to the New Loan Party as of the date hereof
after giving effect to the New Loan Party’s accession to the Security Agreement
as an additional Loan Party thereunder and (v) acknowledges and agrees that,
from and after the date hereof, each reference in the Security Agreement to a
“Loan Party” or the “Loan Parties” shall be deemed to include the New Loan
Party.

 

Section 2.                                          Pledge Agreement.  In accordance with Section 8.10 of the
Pledge Agreement, the New Loan Party hereby (i) agrees that, by execution and
delivery of a counterpart signature page to the Pledge Agreement in the form
attached hereto as Exhibit B, the New Loan Party shall become a “Loan Party”
under the Pledge Agreement with the same force and effect as if originally
named therein as a Loan Party (as defined in the Pledge Agreement), (ii)
acknowledges receipt of a copy of and agrees to be obligated and bound as a
“Loan Party” by all of the terms and provisions of the Pledge Agreement, (iii)
grants to the Collateral Agent for the benefit of the Finance Parties a
continuing security interest in the Collateral (as defined in the Pledge
Agreement), in each case to secure the full and punctual payment of the Finance
Obligations (as defined in the Pledge Agreement) in accordance with the terms
thereof and to secure the performance of all of the obligations of each Loan
Party under the Indenture and the other Finance Documents, (iv) represents and
warrants that each of Schedules I, II, III, IV, and V to the Pledge Agreement,
as amended, supplemented and modified as set forth on Schedules I, II, III, IV,
and V hereto, is complete and accurate with respect to the New Loan Party as of
the date hereof after giving effect to the New Loan Party’s accession to the
Pledge Agreement as an additional Loan Party thereunder and (v) acknowledges
and agrees that, from and after the date hereof, each reference in the Pledge
Agreement to a “Loan Party” or the “Loan Parties” shall be deemed to include
the New Loan Party.

 

Section 3.                                          Representations
and Warranties.  The New Loan
Party hereby represents and warrants that:

 

(a)                                  This
Agreement has been duly authorized, executed and delivered by the New Loan
Party, and each of this Agreement and the Security Agreement and the Pledge
Agreement, as acceded to hereby by the New Loan Party, constitutes a valid and
binding agreement of the New Loan Party, enforceable against the New Loan Party
in accordance with its terms, except in each case as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of creditors’ rights generally and by equitable
principles of general applicability (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

 

12

 

(b)                                 Each
of the representations and warranties contained in the Indenture, the Security
Agreement, the Pledge Agreement and each of the other Finance Documents
applicable to the New Loan Party is true and correct in all material respects
as of the date hereof, with the same effect as though such representations and
warranties had been made on and as of the date hereof after giving effect to
the accession of the New Loan Party as an additional “Loan Party” under each of
the Security Agreement and the Pledge Agreement.

 

(c)                                  Attached
hereto as Exhibit C is a correct and complete Perfection Certificate
relating to the New Loan Party and its Collateral.

 

Section 4.                                          Effectiveness.  This Agreement and the accession of the New
Loan Party to the Security Agreement and the Pledge Agreement as provided
herein shall become effective with respect to the New Loan Party when (i) the
Collateral Agent shall have received a counterpart of this Agreement duly
executed by such New Loan Party and (ii) the Collateral Agent, as applicable,
shall have received duly executed counterpart signature pages to each of the
Security Agreement and the Pledge Agreement as contemplated hereby.

 

Section 5.                                          Integration;
Confirmation.  On and after the
date hereof, each of the Security Agreement and the Pledge Agreement and the
respective Schedules thereto shall be supplemented as expressly set forth
herein; all other terms and provisions of each of the Security Agreement, the
Pledge Agreement, the other Finance Documents and the respective Schedules
thereto shall continue in full force and effect and unchanged and are hereby
confirmed in all respects.

 

Section 6.                                          Expenses.  The New Loan Party agrees to pay (i) all
reasonable out-of-pocket expenses of the Collateral Agent, including reasonable
fees and disbursements of special and local counsel for the Collateral Agent,
in connection with the preparation, execution and delivery of this Agreement
and any document or agreement contemplated hereby and (ii) all taxes which the
Collateral Agent or any Finance Party may be required to pay by reason of the
security interests granted in the Collateral (including any applicable transfer
taxes).

 

Section 7.                                          GOVERNING
LAW.  THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
(INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW.

 

Section 8.                                          Counterparts.  This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.  This Agreement may be transmitted and/or
signed by facsimile and if so transmitted or signed, shall, subject to
requirements of law, have the same force and effect as a manually signed
original and shall be binding on the New Loan Party, the Collateral Agent and
the other Finance Parties.  The
Collateral Agent may also require that this Agreement be confirmed by a
manually signed original hereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.

 

[Signature Page Follows]

 

13

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

 

	
   

  	
  DUANE READE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DUANE READE, a
  New York General Partnership

  
	
   

  	
   

  
	
   

  	
  By:  DUANE READE INC., a General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  By:  DRI I INC., a General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NEW LOAN PARTY
  NAME]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  US Bank National Association

  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

14

 

EXHIBIT A

 

COUNTERPART TO SECURITY AGREEMENT

 

The
undersigned hereby executes this counterpart to the Security Agreement dated as
of December 20, 2004 by the Loan Parties party thereto from time to time
in favor of US Bank National Association, as Collateral Agent, and, as of the
date hereof, assumes all of the rights and obligations of a “Loan Party”
thereunder.

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NEW LOAN PARTY
  NAME]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT B

 

COUNTERPART TO PLEDGE AGREEMENT

 

The
undersigned hereby executes this counterpart to the Amended and Restated Pledge
Agreement dated as of December 20, 2004 by Loan Parties party thereto from
time to time in favor of US Bank National Association, as Collateral Agent,
and, as of the date hereof, assumes all of the rights and obligations of a
“Loan Party” thereunder.

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NEW LOAN PARTY
  NAME]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT C

 

PERFECTION CERTIFICATE

 

 

SCHEDULE 1.01

 

CLAIMS

 

 

SCHEDULE 3.06

 

DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS

 

Deposit Accounts:

 

	
  Name of Loan Party

  	
   

  	
  Name of

  Financial Institution

  	
   

  	
  Account Number

  	
   

  	
  Purpose

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Securities Accounts:

 

	
  Name of Loan Party

  	
   

  	
  Name of

  Financial Institution

  	
   

  	
  Account Number

  	
   

  	
  Purpose

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE 4.01

 

SCHEDULE OF FILINGS TO PERFECT SECURITY INTERESTS

 

	
  Name of
  Debtor

  	
   

  	
  Filing Type

  	
   

  	
  Finance Document

  	
   

  	
  State

  	
   

  	
  Filing Office

  	
   

  	
  Filing Date

  	
   

  	
  File Number

  	
   

  
	
  Legal Name of Debtor

  	
   

  	
  UCC-1/UCC-2/UCC-3:
  General/ILO/Fixture Filing/Assignment/Name Change/Termination

  	
   

  	
  Security/Pledge
  Agreement (If doing an ILO/ Assignment/Name Change/Termination, put Original
  File Date and Number here)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE I

 

LIST OF PLEDGED SHARES

 

[NEW LOAN PARTY NAME]

 

	
  Issuer

  	
   

  	
  Class of

  Stock

  	
   

  	
  Certificate

  Number, if

  Applicable

  	
   

  	
  Par

  Value

  	
   

  	
  Number of

  Shares

  	
   

  	
  Percentage

  of Class

  Represented

  By Pledged

  Shares

  	
   

  	
  Type of

  Investment

  Property

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE II

 

LIST OF PLEDGED NOTES

 

[NEW LOAN PARTY NAME]

 

	
  Issuer

  	
   

  	
  Original

  Principal

  Amount

  	
   

  	
  Date

  	
   

  	
  Maturity

  Date

  	
   

  	
  Type of

  Investment

  Property

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE III

 

LIST OF PLEDGED LLC INTERESTS

 

[NEW LOAN PARTY NAME]

 

	
  Issuer

  	
   

  	
  Class of

  Interest

  	
   

  	
  Certificate

  Numbers, if

  Applicable

  	
   

  	
  Percentage of

  Class Represented

  by Pledged

  LLC Interests

  	
   

  	
  Type of

  Investment

  Property

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT G

 

LIST OF PLEDGED PARTNERSHIP INTERESTS

 

[NEW LOAN PARTY NAME]

 

	
  Issuer

  	
   

  	
  Class of

  Interest

  	
   

  	
  Certificate

  Numbers, if

  Applicable

  	
   

  	
  Percentage of

  Class Represented

  by Pledged

  Partnership Interests

  	
   

  	
  Type of

  Investment

  Property

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]