Exhibit 10.35





Richard Dreiling

CEO &
President


August 29, 2006


Mr. Vincent A. Scarfone

310 Cambridge Drive

Butler, New Jersey 07405


Dear Jim:


This letter will confirm an offer of employment to you
by Duane Reade Inc. (the “Company”).


Your initial assignment will be as Senior Vice
President, Human Resources and Administration, reporting directly to me. You
will be based at our headquarters office located at 440 9th Avenue, New York,
NY. Your initial salary will be $250,000.00 ($8,615.38 paid bi-weekly). Future
salary increases will be based on demonstrated job performance in accordance
with Company policy and practice.


The Company offers an executive benefit program in
which you will be able to participate, subject to the terms of eligibility for
the individual benefit plans. You will receive three (3) weeks of
paid vacation each calendar year subject to the restrictions of your job
requirements. Please be aware that the Company’s vacation policy does not allow
carryover from year to year. Therefore, if the three weeks are not taken they
are forfeited each year.


As an executive of the Company, you will be eligible
to participate in the Company’s performance incentive plan at fifty percent
(50%) of your annual salary. The program is based on the attainment of company
performance towards EBITDA targets and your individual performance toward goals
mutually set between you and your immediate manager. Actual incentive payments
will be paid yearly, usually at the end of the first quarter of each year,
after Board approval. As with other executive benefits programs, eligibility
and participation are subject to the specific provisions of the plan.


As an executive, you will be eligible to participate
in the employee stock option plan. Subject to the terms and conditions of that
plan, you will receive an initial grant of thirteen thousand (13,000) options
to purchase Company Stock at a par value of One hundred dollars ($100.00) per
share. Under the current plan provisions, the shares vest at a rate of (20%)
per year of service with the Company. They will be 100% vested at the end of
five (5) consecutive years of employment. Nothing in this paragraph shall
act as a guarantee of any specific value of the options or the Company’s stock,
other than as described in the plan relating to such options.


Your employment with the Company will be “at will”,
meaning that either you or the Company are entitled to terminate your
employment at any time for any reason, or no reason, with or without cause.
Except as set forth in the following sentence, in the event the Company
terminates your employment other than for “cause” (as defined) you will be paid
severance equal to one year salary at your then current salary payable in
bi-weekly installments. For purposes of this Agreement “cause” shall mean
termination for: (1) a repeated refusal to comply with a lawful directive of
the Chief Executive Officer; (2) serious misconduct, dishonesty or disloyalty
directly related to the performance of duties for the Company, which results
from a willful act or omission and which is materially injurious to the
operations, financial condition or business reputation of the Company or any
significant subsidiary thereof; (3) being convicted (or entering into a
plea bargain admitting criminal guilt) in any criminal proceeding that may have
an adverse impact on the Company’s reputation and standing in the community;
(4) willful and continued failure to substantially perform your duties
under this Agreement; or (5) any other material breach of the Agreement.
In the event of termination for cause, you will be entitled to any unpaid
salary through the date of termination, 











plus any earned and accrued unused vacation pay or
deferred compensation payments. You will not be entitled to any other
compensation from the Company, including without limitation, severance pay.


You will be reimbursed for all normal business
expenses in accordance with Company policy.


This
letter is intended to memorialize the offer of employment provided by the
Company and if these terms are acceptable to you, to create an at-will
employment relationship under these terms. Nothing in this letter is intended
or shall have the effect of modifying or amending the terms, conditions, or
requirements of any benefit plan, retirement plan or welfare plan or
arrangement offered by the Company. During your employment, you will remain
subject to, and be required to abide by, all terms, conditions and requirements
of the policies and practices dictated by the Company for executive employees.


	
  Sincerely,

  	
   

  	
   

  
	
  /s/ RICHARD W. DREILING

  	
   

  	
   

  
	
  Richard W.
  Dreiling

  	
   

  	
   

  
	
  /s/ VINCENT A. SCARFONE

  	
   

  	
   

  
	
  Mr. Vincent
  A. Scarfone

  	
  Date