**Exhibit 10.29**

ANNEX I

AMENDMENT NO. 2 TO FOURTH AMENDED AND RESTATED CREDITAGREEMENT

                AmendmentNo. 2 to the Fourth Amended and Restated Credit Agreement, dated as ofSeptember 25, 2002 (this “Amendment”), among DUANE READE, a New Yorkgeneral partnership (the “Borrower”), DUANE READE INC., a Delawarecorporation (“Holdings”), DRI I INC., a Delaware corporation (“DRI I”and, together with Holdings, collectively, the “Parent Guarantors”),DUANE READE INTERNATIONAL, INC., a Delaware corporation (“Duane Reade IP”),DUANE READE REALTY, INC., a Delaware corporation (“Duane Reade Realty”and together with Duane Reade IP, collectively, the “Affiliate Guarantors”and, together with the Parent Guarantors, collectively, the “DesignatedGuarantors”), CREDIT SUISSE FIRST BOSTON (“CSFB”), as syndicationagent (in such capacity, the “Syndication Agent”) for the Lenders andFLEET NATIONAL BANK (“Fleet”), as administrative agent (in suchcapacity, the “Administrative Agent”) for the Lenders.

 

WITNESSETH:

 

                WHEREAS, theBorrower, the Designated Guarantors, various financial institutions (the “Lenders”),the Agents and Credit Lyonnais New York Branch, as the documentation agent forthe Lenders, have heretofore entered into the Fourth Amended and RestatedCredit Agreement, dated as of July 10, 2001 (as amended or otherwise modifiedprior to the date hereof the “Existing Credit Agreement” and as soamended by this Agreement, the “Credit Agreement”); and

 

WHEREAS, the Borrower and the Designated Guarantorsdesire, and the Lenders are willing, on the terms and subject to the conditionshereinafter set forth, to amend the Existing Credit Agreement as set forthherein to permit them to do so;

 

NOW, THEREFORE, theparties hereto hereby agree as follows:

PARTIDEFINITIONS

SUBPART 1.1  Certain Definitions.  Unless otherwise defined herein or thecontext otherwise requires, terms used in this Amendment, including itspreamble and recitals, have the following meanings (such meanings to be equallyapplicable to the singular and plural forms thereof):
|   |   | “Administrative Agent”  is defined in the preamble. |
|--------|--------|---------------------------------------------------------------|
|   |   |                                                          |
|   |   | “Affiliate Guarantors”  is defined in the preamble. |
|   |   |                                                          |
|   |   | “Amendment” is  defined in the preamble.            |

 

 

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|   |   | “Amendment Effective  Date” is defined in Subpart 3.1.        |
|--------|--------|-------------------------------------------------------------------------|
|   |   |                                                                    |
|   |   | “Borrower” is  defined in the preamble.                       |
|   |   |                                                                    |
|   |   | “Credit Agreement”  is defined in the first recital.          |
|   |   |                                                                    |
|   |   | “CSFB” is defined  in the preamble.                           |
|   |   |                                                                    |
|   |   | “Designated Guarantors”  is defined in preamble.              |
|   |   |                                                                    |
|   |   | “DRI I” is defined  in the preamble.                          |
|   |   |                                                                    |
|   |   | “Duane Reade IP” is  defined in preamble.                     |
|   |   |                                                                    |
|   |   | “Duane Reade Realty”  is defined in preamble.                 |
|   |   |                                                                    |
|   |   | “Existing Credit  Agreement” is defined in the first recital. |
|   |   |                                                                    |
|   |   | “Holdings” is defined in the preamble.                        |
|   |   |                                                                    |
|   |   | “Lenders” is defined in the first recital.                    |
|   |   |                                                                    |
|   |   | “Parent Guarantors”  is defined in the preamble.              |
|   |   |                                                                    |
|   |   | “Syndication Agent” is defined in the preamble.               |

 

SUBPART 1.2  Other Definitions.  Unless otherwise defined herein or thecontext otherwise requires, terms used in this Amendment, including itspreamble and recitals, have the meanings set forth in the Existing CreditAgreement.  Each reference to “hereof”,“hereunder”, “herein” and “hereby” and each other similar reference and eachreference to “this Agreement” and each other similar reference contained in theExisting Credit Agreement shall from and after the Amendment Effective Daterefer to the Credit Agreement.

PARTIIAMENDMENTS TO EXISTING CREDIT AGREEMENT

Effective on (and subject to the occurrence of) theAmendment Effective Date, the Existing Credit Agreement is hereby amended inaccordance with this Part II.  Except tothe extent amended by this Amendment, the Existing Credit Agreement is andshall continue to be in full force and effect and is hereby ratified and confirmedin all respects.

SUBPART 2.1  Amendments to Article I.

(a)  Section 1.1 of the Existing Credit Agreementis hereby amended by inserting the following definitions in such section in theappropriate alphabetical sequence:

 

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“Disqualified Stock”means any Capital Stock which, by its terms (or by the terms of any securityinto which it is convertible or for which it is exchangeable), or upon thehappening of any event, matures or is mandatorily redeemable, pursuant to asinking fund obligation or otherwise, or redeemable at the option of the holderthereof, in whole or in part, on or prior to one year after the Stated MaturityDate for New Term B Loans.

 

“Equity Interests”means Capital Stock or warrants, options or other rights to acquire CapitalStock (but excluding any debt security that is convertible into, orexchangeable for, Capital Stock).

 

SUBPART 2.2  Amendments to Article VII.  ****Section 7.2.6 of the Existing CreditAgreement is hereby amended by:

(a)  amending and restating clause (a) in itsentirety to read as follows:                “each of the Borrower andeach Designated Guarantor will not, and will not permit any of their respectiveSubsidiaries to, (i) declare, pay or make any dividend, distribution orexchange (in cash, property or obligations) on or in respect of any of itsEquity Interests (now or hereafter outstanding) other than (x) dividends ordistributions payable in Equity Interests (other than Disqualified Stock) and(y) splits or reclassifications of its Equity Interests into additional orother Equity Interests or (ii) apply, or permit any of its Subsidiaries toapply, any of its funds, property or assets to the purchase, redemption,exchange, sinking fund or other retirement of, or agree or permit any of itsSubsidiaries to purchase, redeem or exchange, any shares of any class of EquityInterests (now or hereafter outstanding) of the Borrower or any DesignatedGuarantor;”

(b)  amending and restating clause (h) in itsentirety to read as follows:                “(h) so long as (i) noDefault or Event of Default shall have occurred and be continuing on the dateof such Restricted Payment or would result from the making of such RestrictedPayment, giving pro forma effect thereto as if such Restricted Payment occurredat the beginning of most recently fully ended Fiscal Quarter preceding the dateof such Restricted Payment for which the relevant financial information hasbeen delivered pursuant to clause (b) or (c) of Section 7.1.1and (ii) an Authorized Officer of Holdings shall have delivered a certificateto the Administrative Agent in form and substance satisfactory to theAdministrative Agent certifying as to the accuracy of subclause (i)above, the Borrower and each Affiliate Guarantor shall be permitted to makeRestricted Payments to Holdings and to DRI I (which shall in turn use all ofany such Restricted Payment to make Restricted Payments to Holdings), in eachcase to the extent necessary to enable Holdings to repurchase, redeem orotherwise acquire or retire for value any Capital Stock of Holdings or anySenior Convertible Notes then held by any Person; provided, however,that the aggregate price paid pursuant to this clause (h) for all suchrepurchased, redeemed, acquired or retired Capital Stock and/or SeniorConvertible Notes shall not exceed an amount equal to $20,000,000, in each casefrom the Amendment Effective Date until the Stated Maturity Date for the NewTerm B Loans.”

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PARTIIICONDITIONS TO EFFECTIVENESS

SUBPART 3.1  Amendment Effective Date.  This Amendment shall become effective as ofthe date (the “Amendment Effective Date”) first set forth above when theAgents shall have received counterparts of this Amendment, duly executed byeach of the Borrower, each of the Designated Guarantors, the Syndication Agentand the Administrative Agent on behalf of the Required Lenders who shall havedelivered to the Administrative Agent their written consent to the amendments,as explicitly set forth herein and subject to the terms hereof.

SUBPART 3.2  Costs and Expenses, etc.  The Syndication Agent shall have receivedfor the account of each Lender, all fees, costs and expenses due and payablepursuant to Sections 3.3 and 11.3 of the Credit Agreement, if then invoiced.

SUBPART 3.3  Legal Details, etc.  All documents executed or submitted pursuanthereto shall be satisfactory in form and substance to the Syndication Agent andits counsel.  The Syndication Agent andits counsel shall have received all information, and such counterpart originalsor such certified or other copies of such materials, as the Syndication Agentor its counsel reasonably request.  Alllegal matters incident to the transactions contemplated by this Amendment shallbe satisfactory to the Syndication Agent and its counsel.

PARTIVMISCELLANEOUS

SUBPART 4.1  Expenses.  The Borrower and each Designated Guarantor hereby agrees to payand reimburse the Agents for all of their respective reasonable fees andexpenses incurred in connection with the negotiation, preparation, executionand delivery of this Amendment and related documents, including all reasonablefees and disbursements of Mayer, Brown, Rowe & Maw, counsel to the Agents.

SUBPART 4.2  Representations and Warranties.  The delivery of an executed counterparthereof by the Borrower and each Designated Guarantor shall constitute arepresentation and warranty by the Borrower and each Designated Guarantor that:

(a)  on the Amendment Effective Date, aftergiving effect to this Amendment, (i) all representations, warranties and otherstatements set forth in Article VI of the Existing Credit Agreement, as thenamended by this Amendment, are true and correct in all material respects as ofsuch date, except to the extent that such representation, warranty or statementexpressly relates to an earlier date (in which case such representation,warranty or statement shall have been true and correct in all material respectson and as of such earlier date) and (ii) no Default has occurred and is thencontinuing; and

(b)  this Amendment constitutes the legal, validand binding obligation of the Borrower and each Designated Guarantor,enforceable in accordance with its terms subject to the effects of bankruptcy,insolvency, fraudulent conveyance, reorganization, moratorium and other similarlaws relating to or affecting creditors’ rights generally, general equitableprinciples (whether considered in a proceeding in equity or at law) and animplied covenant of good faith and fair dealing.

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SUBPART 4.3  Loan Document Pursuant to CreditAgreement.  This Amendment is a LoanDocument executed pursuant to the Credit Agreement and shall (unless otherwiseexpressly indicated therein) be construed, administered and applied inaccordance with all of the terms and provisions of the Credit Agreement, asamended hereby.

SUBPART 4.4  Successors and Assigns.  This Amendment shall be binding upon andinure to the benefit of the parties hereto and their respective successors andassigns.

SUBPART 4.5  Counterparts.  This Amendment may be executed by theparties hereto in several counterparts, each of which when executed anddelivered shall be an original and all of which shall constitute together butone and the same agreement.

SUBPART 4.6  Governing Law.  **THIS AMENDMENT SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK****.**

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                IN WITNESS WHEREOF, thesignatories hereto have caused this Agreement to be executed by theirrespective officers thereunto duly authorized as of the day and year firstabove written.

 
|   | **BORROWER:**                           |   |
|--------|-----------------------------------------|--------|
|   | DUANE READE                             |   |
|   | By Duane Reade Inc., a  general partner |
|   |                                    |
|   |                                    |
|   | By:                                     |   |
|   | Title:                                  |   |
|   |                                    |   |
|   |                                    |   |
|   | By DRI I Inc., a general  partner       |
|   |                                    |
|   |                                    |
|   | By:                                     |   |
|   | Title:                                  |   |
|   |                                    |   |
|   |                                    |   |
|   | **DESIGNATED  GUARANTORS:**             |
|   | DUANE READE INC.                        |
|   |                                    |
|   |                                    |
|   | By:                                     |   |
|   | Title:                                  |   |
|   |                                    |   |
|   |                                    |   |
|   | DRI I INC.                              |
|   |                                    |
|   |                                    |
|   | By:                                     |   |
|   | Title:                                  |   |
|   |                                    |   |
|   |                                    |   |
|   |                                    |   |
|   | DUANE READE INTERNATIONAL,  INC.        |
|   |                                    |
|   | By:                                     |   |
|   | Title:                                  |   |
|   |                                    |   |
|   |                                    |   |
|   | DUANE READE REALTY, INC.                |
|   |                                    |
|   |                                    |
|   | By:                                     |   |
|   |                                    |   |
|   | Title:                                  |   |
|        |                                         |        |  |  |  |  |  |

 

 

 

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|   | CREDIT SUISSE FIRST BOSTON, as the Syndication Agent |
|--------|------------------------------------------------------|
|   |                                                 |
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|   | By:                                                  |   |
|   | Title:                                               |   |
|   |                                                 |   |
|   |                                                 |   |
|   | By:                                                  |   |
|   | Title:                                               |   |
|   |                                                 |   |
|   |                                                 |   |
|   | FLEET NATIONAL BANK, as  the Administrative Agent    |
|   |                                                 |
|   |                                                 |
|   | By:                                                  |   |
|   | Title:                                               |   |
|        |                                                      |  |  |

 

 

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