Document:

Exhibit 10.28

ANNEX I

AMENDMENT NO. 1 TO FOURTH AMENDED AND RESTATED CREDIT

AGREEMENT

                Amendment

No. 1 to the Fourth Amended and Restated Credit Agreement, dated as of April 9,

2002 (this “Amendment”), among DUANE READE, a New York general

partnership (the “Borrower”), DUANE READE INC., a Delaware corporation

(“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 “Designated

Guarantors”), CREDIT SUISSE FIRST BOSTON (“CSFB”), as syndication

agent (in such capacity, the “Syndication Agent”) for the Lenders and

FLEET NATIONAL BANK (“Fleet”), as administrative agent (in such

capacity, the “Administrative Agent”) for the Lenders.

 

W  I  T

N  E  S  S  E  T  H:

 

                WHEREAS, the Borrower,

Holdings, the Designated Guarantors, various financial institutions (the “Lenders”),

the Agents and Credit Lyonnais New York Branch, as the documentation agent for

the Lenders, have heretofore entered into the Fourth Amended and Restated

Credit Agreement, dated as of July 10, 2001 (as amended or otherwise modified

prior to the date hereof the “Existing Credit Agreement” and as so

amended by this Agreement, the “Credit Agreement”); and

 

WHEREAS, the Borrower, Holdings and the Designated

Guarantors desire, and the Lenders are willing, on the terms and subject to the

conditions hereinafter set forth, to amend the Existing Credit Agreement as set

forth herein to permit them to do so;

 

NOW, THEREFORE, the

parties hereto hereby agree as follows:

PART

I

DEFINITIONS

SUBPART 1.1  Certain Definitions.  Unless otherwise defined herein or the

context otherwise requires, terms used in this Amendment, including its

preamble and recitals, have the following meanings (such meanings to be equally

applicable 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.

  

 

 

	

   

  	

  “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 the

context otherwise requires, terms used in this Amendment, including its

preamble and recitals, have the meanings set forth in the Existing Credit

Agreement.  Each reference to “hereof”,

“hereunder”, “herein” and “hereby” and each other similar reference and each

reference to “this Agreement” and each other similar reference contained in the

Existing Credit Agreement shall from and after the Amendment Effective Date

refer to the Credit Agreement.

PART

II

AMENDMENTS TO EXISTING CREDIT AGREEMENT

Effective on (and subject to the occurrence of) the

Amendment Effective Date, the Existing Credit Agreement is hereby amended in

accordance with this Part II.  Except to

the extent amended by this Amendment, the Existing Credit Agreement is and

shall continue to be in full force and effect and is hereby ratified and confirmed

in all respects.

SUBPART 2.1  Amendments to Article I.

(a)  Section 1.1 of the Existing Credit Agreement

is hereby amended by inserting the following definitions in such section in the

appropriate alphabetically sequence:

“First Amendment Effective Date” means

April 9, 2002.

 

 

2

 

 

“Senior

Convertible Note Documents” means the Senior Convertible Note Indenture,

the Senior Convertible Notes Guarantee and the Senior Convertible Notes, in

each case on terms and conditions reasonably satisfactory to the Syndication

Agent.

 

                “Senior Convertible Note Indenture” means that

certain indenture among Holdings and the Borrower and DRI I, as subsidiary

guarantors, and State Street Bank and Trust Company of Connecticut, N.A., as

Trustee, as amended or otherwise modified from time to time after the First

Amendment Effective Date in accordance with the terms hereof and thereof.

 

                “Senior

Convertible Notes” means the Senior Convertible Notes due April 2022 issued

by Holdings for gross cash proceeds of at least $100,000,000.

 

                “Senior Convertible Notes Guarantee” means the

joint and several guarantees of the Borrower, DRI I and each other Subsidiary

of Holdings in favor of the holders of the Senior Convertible Notes as set

forth in the Senior Convertible Note Indenture and each other subsidiary

guarantee delivered pursuant to the terms of the Senior Convertible Note

Indenture and, in each case, as amended or otherwise modified from time to time

after the First Amendment Effective Date in accordance with the terms hereof

and thereof.

 

(b)  Clause (e) of the definition of  “Change in Control” is hereby deleted and

replaced with “any “Change of Control” or similar term, as such term is defined

in the Senior Subordinated Note Indenture or the Senior Convertible Note

Indenture.”

(c)  The definition of “Material Documents” is

hereby amended by inserting the words “, the Senior Convertible Note

Documents,” immediately  preceding the

words “, the Recapitalization Agreement” and immediately following the words

“the Senior Subordinated Note Documents,” in the second line of such

definition.

SUBPART 2.2  Amendments to Article VI.  Article VI is hereby amended by inserting

the following new Section 6.18 at the end of such Article:

                “SECTION 6.18. 

Issuance of Senior Convertible Notes.  (a) The Senior Convertible Notes have been issued and sold to the

underwriters thereof on the date of the issuance thereof in accordance with and pursuant to the

Senior Convertible Note Indenture and the other Senior Convertible Note

Documents and in compliance with all laws, including the Securities Act of

1933, as amended and all other applicable federal and state securities

laws.  The issuance of the Senior

Convertible Notes and the execution of the Senior Convertible Note Indenture

and the other Senior Convertible Note Documents have been duly authorized by

all necessary action on the part of the Borrower and each Designated Guarantor

and will not require any consent or approval of any governmental agency or

authority that has not been obtained prior to the issuance thereof.  The issuance of the Senior Convertible Notes

and the execution of the Senior Convertible Note Indenture and the other Senior

Convertible Note Documents do not conflict with (i) any material provision of

any material law, (ii) the Organic Documents of the Borrower or any Designated

Guarantor, (iii) any material agreement binding upon the Borrower or 

 

3

 

any Designated Guarantor,

or (iv) any material court or administrative order or decree applicable to the

Borrower or any Designated Guarantor, and do not and will not require, or

result in, the creation or imposition of any Lien on any asset of the Borrower

or any Designated Guarantor.  All

representations and warranties of the Borrower or any Designated Guarantor

contained in the Senior Convertible Note Indenture and the other Senior

Convertible Note Documents are true and correct in all material respects as of

the date of the issuance thereof.

                (b) Each Senior Convertible Note Document (including

the Senior Convertible Notes and the Senior Convertible Notes Guarantee)

constitutes the legal, valid and binding obligation of each of the Borrower or

any Designated Guarantor, as the case may be, enforceable against each of the Borrower

or any Designated Guarantor as the case may be, in accordance with its terms.”

SUBPART 2.3  Amendments to Article VII.

(a)  Section 7.2.2 of the Existing Credit

Agreement is hereby amended by (i) deleting the word “and” at the end of clause

(m); (ii) relettering clause (n) as clause (o) and (iii) inserting the

following new clause (n) in appropriate alphabetical order:

                “(n) (i) Indebtedness of Holdings evidenced by

the Senior Convertible Notes and (ii) Indebtedness of the Borrower, DRI I and

each other Subsidiary of Holdings consisting of Contingent Liabilities under

the Senior Convertible Notes Guarantees in respect of the Indebtedness

described in clause (n)(i).”

(b)  The proviso at the end of Section 7.2.2 of

the Existing Credit Agreement is hereby amended by (i) deleting the word “(n)”

and substituting the word “(o) in each instance thereof, (ii) inserting the

word “either (i)” immediately preceding the words “the Senior Subordinated Note

Indenture” and immediately following the words “under and as defined in” in the second to last line thereof and (iii)

inserting the words “or (ii) the Senior Convertible Note Indenture” immediately

after the words “Closing Date” in the last line thereof.

(c)  Clause (l) of Section 7.2.5 of the Existing

Credit Agreement is hereby amended by (i) inserting the word “either (i)”

immediately preceding the words “the Senior Subordinated Note

Indenture” and immediately after the words “under and as defined in” in the second to last line thereof and (ii)

inserting the words “or (ii) the Senior Convertible Note Indenture”,

immediately after the words “Closing Date” in the last line thereof.

(d)  Clause (b) of Section 7.2.6

of the Existing Credit Agreement is hereby amended by (i) inserting the words

“any Senior Convertible Note or” preceding the words “any subordinated note

(including any Senior Subordinated Note)” in clauses (i) and (ii) thereof and

(ii) inserting the

words “the Senior Convertible Notes Documents or” immediately preceding the

words “the documents and instruments memorializing” in clause (i) thereof.

 

4

 

(e)  Section 7.2.6 of the Existing Credit

Agreement is hereby amended by (i) amending and restating clause (c)(i)(B) to

read “(B) such Restricted Payments are permitted to be paid at such time under

the Senior Subordinated Note Indenture”, (ii) deleting the number

“$20,000,000” and replacing it with “30,000,000” in clause (c)(ii), (iii)

deleting the word “and” at the end of clause (g), (iv) deleting the period at the

end of clause (h) and replacing it with “;” and (v) adding new clauses (i), (j)

and (k) in

appropriate alphabetical order to read as follows:

“(i)  notwithstanding the provisions of clauses

(a) or (b) above, the Borrower and each Affiliate Guarantor shall be

permitted to make Restricted Payments to DRI I (which shall in turn utilize all

of any such Restricted Payment to make Restricted Payments to Holdings) and to

Holdings, in each case to the extent necessary (i) to enable Holdings to pay

interest on the Senior Convertible Notes as required by the Senior Convertible

Note Indenture, (ii) to allow Holdings to purchase, redeem or defease the

Senior Convertible Notes as may be required by the Senior Convertible Note

Indenture pursuant to a “Change in Control” (as defined in the Senior

Convertible Note Indenture), (iii) to allow Holdings to make any payments

required to be made as a result of Holdings failure to file a registration

statement with the SEC, the failure of such registration statement to become effective

or the failure to keep the prospectus contained in the registration statement

available, in each case for the time periods set forth and contemplated in the

applicable Senior Convertible Notes Documents and (iv) convert any Senior

Convertible Notes into Capital Stock of Holdings;

 

(j)  notwithstanding the provisions of clauses

(a), (b), (c) or (i) above, in the event that the

Borrower offers to make a voluntary prepayment of New Term B Loans pursuant to clause

(a) of Section 3.1.1 and the Borrower allows the Lenders holding New

Term B Loans to decline to accept such payment, the Borrower may make

Restricted Payments to DRI (which shall in turn utilize all of any such

Restricted Payment to make Restricted Payments to Holdings) and to Holdings in

an amount equal to the amount declined by the Lenders holding New Term B Loans

and Holdings may use such amount to purchase, redeem or defease the Senior

Convertible Notes or, so long as no Default has occurred and is continuing, the

Senior Subordinated Notes; and

 

(k)  notwithstanding anything else contained in

this Agreement, the Borrower agrees for the period commencing on the First

Amendment Effective Date and ending on the date that is 90 days following the

First Amendment Effective Date, so long as no Default has occurred and is

continuing, the Borrower shall not make any prepayment of New Term B Loans

pursuant to clause (a) of Section 3.1.1.”

 

PART

III

CONDITIONS TO EFFECTIVENESS

SUBPART 3.1  Amendment Effective Date.  This Amendment shall become effective as of

the date (the “Amendment Effective Date”) first set forth above when the

Agents shall have 

 

5

 

received counterparts of this Amendment, duly executed

by each of the Borrower, Holdings, each of the Designated Guarantors, the

Syndication Agent and the Administrative Agent on behalf of the Required

Lenders (including greater than 50% of the Lenders holding New Term B Loans)

who shall have delivered to the Administrative Agent their written consent to the

amendments, as explicitly set forth herein and subject to the terms hereof.

SUBPART 3.2  Amendment Fee.  The Agents shall have

received (a) for the account of each Lender with Term Loans or a Revolving Loan

Commitment an amendment fee in an amount equal to .20% (in the case of Lenders

delivering an executed signature page to the Amendment Agreement to the

Syndication Agent prior to 5:00 p.m., New York City time, April 9, 2002) or

..10% (in the case of Lenders delivering an executed signature page to the Amendment

Agreement to the Syndication Agent prior to 5:00 p.m., New York City time,

April 15, 2002) of the sum of (i) the outstanding principal amount of Term

Loans owing to such Lender on such date plus (ii) the product of such

Lender’s Percentage of the Commitment to make Revolving Loans multiplied by the

Revolving Loan Commitment Amount on such date and (b) all fees, costs and

expenses due and payable pursuant to Sections 3.3 and 11.3 of the Existing

Credit Agreement to the extent then invoiced.

SUBPART 3.3  Costs and Expenses, etc.  The Syndication Agent shall have received

for the account of each Lender, all fees, costs and expenses due and payable

pursuant to Sections 3.3 and 11.3 of the Credit Agreement, if then invoiced.

SUBPART 3.4  Legal Details, etc.  All documents executed or submitted pursuant

hereto shall be satisfactory in form and substance to the Syndication Agent and

its counsel.  The Syndication Agent and

its counsel shall have received all information, and such counterpart originals

or such certified or other copies of such materials, as the Syndication Agent

or its counsel reasonably request.  All

legal matters incident to the transactions contemplated by this Amendment shall

be satisfactory to the Syndication Agent and its counsel.

PART

IV

WAIVER

SUBPART 4.1  The Lenders hereby agree that Net Debt

Proceeds resulting from the issuance of the Senior Convertible Notes shall be

applied as follows as set forth in this Subpart 4.1:

(a)  on the date of the issuance of the Senior

Convertible Notes (the “Issuance Date”), 100% of the Net Debt Proceeds

will be contributed by Holdings to the Borrower;

(b)  up to the first $50,000,000 of Net Debt

Proceeds shall be applied to repay Revolving Loans outstanding on the Issuance

Date; provided, that (i) the Borrower agrees to repay all Revolving

Loans outstanding on the Issuance Date in full and (ii) the Lenders agree that

no reduction in the Revolving Loan Commitment shall result therefrom;

(c)  the Borrower may retain up to the next

$30,000,000 of such proceeds for its working capital and general partnership

purposes; and

 

6

 

(d)  all proceeds in excess thereof shall be

applied on a pro rata basis, to the outstanding principal amount of all

remaining Term Loans and the remaining scheduled amortization payments in

respect thereof within 90 days of the Issuance Date; provided, however,

that no more than $45,000,000 shall be applied to outstanding New Term B Loans

with the remainder to be retained by the Borrower.

PART

V

MISCELLANEOUS

SUBPART 5.1  Expenses.  Each of the Borrower, Holdings and each Designated Guarantor

hereby agrees to pay and reimburse the Agents for all of their respective

reasonable fees and expenses incurred in connection with the negotiation, preparation,

execution and delivery of this Amendment and related documents, including all

reasonable fees and disbursements of Mayer, Brown, Rowe & Maw, counsel to

the Agents.

SUBPART 5.2  Representations and Warranties.  The delivery of an executed counterpart

hereof by each of the Borrower, Holdings and each Designated Guarantor shall

constitute a representation and warranty by each of the Borrower, Holdings and

each Designated Guarantor that:

(a)  on the Amendment Effective Date, after

giving effect to this Amendment, (i) all representations, warranties and other

statements set forth in Article VI of the Existing Credit Agreement, as then

amended by this Amendment, are true and correct in all material respects as of

such date, except to the extent that such representation, warranty or statement

expressly relates to an earlier date (in which case such representation,

warranty or statement shall have been true and correct in all material respects

on and as of such earlier date) and (ii) no Default has occurred and is then

continuing; and

(b)  this Amendment constitutes the legal, valid

and binding obligation of each of the Borrower, Holdings and each Designated

Guarantor enforceable in accordance with its terms subject to the effects of

bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and

other similar laws relating to or affecting creditors’ rights generally,

general equitable principles (whether considered in a proceeding in equity or

at law) and an implied covenant of good faith and fair dealing.

SUBPART 5.3  Loan Document Pursuant to Credit

Agreement.  This Amendment is a Loan

Document executed pursuant to the Credit Agreement and shall (unless otherwise

expressly indicated therein) be construed, administered and applied in

accordance with all of the terms and provisions of the Credit Agreement, as

amended hereby.

SUBPART 5.4  Successors and Assigns.  This Amendment shall be binding upon and

inure to the benefit of the parties hereto and their respective successors and

assigns.

SUBPART 5.5  Counterparts.  This Amendment may be executed by the

parties hereto in several counterparts, each of which when executed and

delivered shall be an original and all of which shall constitute together but

one and the same agreement.

 

7

 

SUBPART 5.6  Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND

CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

 

8

 

                IN WITNESS WHEREOF, the

signatories hereto have caused this Agreement to be executed by their

respective officers thereunto duly authorized as of the day and year first

above written.

 

	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  BORROWER:

  	

   

  
	

   

  	

   

  	

  DUANE READE

  	

   

  
	

   

  	

   

  	

  By Duane Reade Inc., a

  general partner

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By DRI I Inc., a general

  partner

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  PARENT

  GUARANTORS:

  
	

   

  	

   

  	

  DUANE READE INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  DRI I INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

   

  
							

 

 

 

 

9

 

 

	

   

  	

   

  	

  AFFILIATE

  GUARANTORS:

  
	

   

  	

   

  	

  DUANE READE INTERNATIONAL, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  DUANE READE REALTY, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

   

  
						

 

 

10

 

	

   

  	

   

  	

  CREDIT SUISSE FIRST BOSTON, as the Syndication Agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

   

  
						

 

S-1

 

	

   

  	

   

  	

  FLEET NATIONAL BANK, as

  the Administrative Agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

   

  
						

 

S-2Exhibit 10.29

ANNEX I

AMENDMENT NO. 2 TO FOURTH AMENDED AND RESTATED CREDIT

AGREEMENT

                Amendment

No. 2 to the Fourth Amended and Restated Credit Agreement, dated as of

September 25, 2002 (this “Amendment”), among DUANE READE, a New York

general partnership (the “Borrower”), DUANE READE INC., a Delaware

corporation (“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 “Designated

Guarantors”), CREDIT SUISSE FIRST BOSTON (“CSFB”), as syndication

agent (in such capacity, the “Syndication Agent”) for the Lenders and

FLEET NATIONAL BANK (“Fleet”), as administrative agent (in such

capacity, the “Administrative Agent”) for the Lenders.

 

W  I  T

N  E  S  S  E  T  H:

 

                WHEREAS, the

Borrower, the Designated Guarantors, various financial institutions (the “Lenders”),

the Agents and Credit Lyonnais New York Branch, as the documentation agent for

the Lenders, have heretofore entered into the Fourth Amended and Restated

Credit Agreement, dated as of July 10, 2001 (as amended or otherwise modified

prior to the date hereof the “Existing Credit Agreement” and as so

amended by this Agreement, the “Credit Agreement”); and

 

WHEREAS, the Borrower and the Designated Guarantors

desire, and the Lenders are willing, on the terms and subject to the conditions

hereinafter set forth, to amend the Existing Credit Agreement as set forth

herein to permit them to do so;

 

NOW, THEREFORE, the

parties hereto hereby agree as follows:

PART

I

DEFINITIONS

SUBPART 1.1  Certain Definitions.  Unless otherwise defined herein or the

context otherwise requires, terms used in this Amendment, including its

preamble and recitals, have the following meanings (such meanings to be equally

applicable 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.

  

 

 

 

 

	

   

  	

   

  	

  “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 the

context otherwise requires, terms used in this Amendment, including its

preamble and recitals, have the meanings set forth in the Existing Credit

Agreement.  Each reference to “hereof”,

“hereunder”, “herein” and “hereby” and each other similar reference and each

reference to “this Agreement” and each other similar reference contained in the

Existing Credit Agreement shall from and after the Amendment Effective Date

refer to the Credit Agreement.

PART

II

AMENDMENTS TO EXISTING CREDIT AGREEMENT

Effective on (and subject to the occurrence of) the

Amendment Effective Date, the Existing Credit Agreement is hereby amended in

accordance with this Part II.  Except to

the extent amended by this Amendment, the Existing Credit Agreement is and

shall continue to be in full force and effect and is hereby ratified and confirmed

in all respects.

SUBPART 2.1  Amendments to Article I.

(a)  Section 1.1 of the Existing Credit Agreement

is hereby amended by inserting the following definitions in such section in the

appropriate alphabetical sequence:

 

2

 

“Disqualified Stock”

means any Capital Stock which, by its terms (or by the terms of any security

into which it is convertible or for which it is exchangeable), or upon the

happening of any event, matures or is mandatorily redeemable, pursuant to a

sinking fund obligation or otherwise, or redeemable at the option of the holder

thereof, in whole or in part, on or prior to one year after the Stated Maturity

Date for New Term B Loans.

 

“Equity Interests”

means Capital Stock or warrants, options or other rights to acquire Capital

Stock (but excluding any debt security that is convertible into, or

exchangeable for, Capital Stock).

 

SUBPART 2.2  Amendments to Article VII.    Section 7.2.6 of the Existing Credit

Agreement is hereby amended by:

(a)  amending and restating clause (a) in its

entirety to read as follows:

                “each of the Borrower and

each Designated Guarantor will not, and will not permit any of their respective

Subsidiaries to, (i) declare, pay or make any dividend, distribution or

exchange (in cash, property or obligations) on or in respect of any of its

Equity Interests (now or hereafter outstanding) other than (x) dividends or

distributions payable in Equity Interests (other than Disqualified Stock) and

(y) splits or reclassifications of its Equity Interests into additional or

other Equity Interests or (ii) apply, or permit any of its Subsidiaries to

apply, any of its funds, property or assets to the purchase, redemption,

exchange, sinking fund or other retirement of, or agree or permit any of its

Subsidiaries to purchase, redeem or exchange, any shares of any class of Equity

Interests (now or hereafter outstanding) of the Borrower or any Designated

Guarantor;”

(b)  amending and restating clause (h) in its

entirety to read as follows:

                “(h) so long as (i) no

Default or Event of Default shall have occurred and be continuing on the date

of such Restricted Payment or would result from the making of such Restricted

Payment, giving pro forma effect thereto as if such Restricted Payment occurred

at the beginning of most recently fully ended Fiscal Quarter preceding the date

of such Restricted Payment for which the relevant financial information has

been delivered pursuant to clause (b) or (c) of Section 7.1.1

and (ii) an Authorized Officer of Holdings shall have delivered a certificate

to the Administrative Agent in form and substance satisfactory to the

Administrative Agent certifying as to the accuracy of subclause (i)

above, the Borrower and each Affiliate Guarantor shall be permitted to make

Restricted Payments to Holdings and to DRI I (which shall in turn use all of

any such Restricted Payment to make Restricted Payments to Holdings), in each

case to the extent necessary to enable Holdings to repurchase, redeem or

otherwise acquire or retire for value any Capital Stock of Holdings or any

Senior Convertible Notes then held by any Person; provided, however,

that the aggregate price paid pursuant to this clause (h) for all such

repurchased, redeemed, acquired or retired Capital Stock and/or Senior

Convertible Notes shall not exceed an amount equal to $20,000,000, in each case

from the Amendment Effective Date until the Stated Maturity Date for the New

Term B Loans.”

3

 

PART

III

CONDITIONS TO EFFECTIVENESS

SUBPART 3.1  Amendment Effective Date.  This Amendment shall become effective as of

the date (the “Amendment Effective Date”) first set forth above when the

Agents shall have received counterparts of this Amendment, duly executed by

each of the Borrower, each of the Designated Guarantors, the Syndication Agent

and the Administrative Agent on behalf of the Required Lenders who shall have

delivered 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 received

for the account of each Lender, all fees, costs and expenses due and payable

pursuant 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 pursuant

hereto shall be satisfactory in form and substance to the Syndication Agent and

its counsel.  The Syndication Agent and

its counsel shall have received all information, and such counterpart originals

or such certified or other copies of such materials, as the Syndication Agent

or its counsel reasonably request.  All

legal matters incident to the transactions contemplated by this Amendment shall

be satisfactory to the Syndication Agent and its counsel.

PART

IV

MISCELLANEOUS

SUBPART 4.1  Expenses.  The Borrower and each Designated Guarantor hereby agrees to pay

and reimburse the Agents for all of their respective reasonable fees and

expenses incurred in connection with the negotiation, preparation, execution

and delivery of this Amendment and related documents, including all reasonable

fees and disbursements of Mayer, Brown, Rowe & Maw, counsel to the Agents.

SUBPART 4.2  Representations and Warranties.  The delivery of an executed counterpart

hereof by the Borrower and each Designated Guarantor shall constitute a

representation and warranty by the Borrower and each Designated Guarantor that:

(a)  on the Amendment Effective Date, after

giving effect to this Amendment, (i) all representations, warranties and other

statements set forth in Article VI of the Existing Credit Agreement, as then

amended by this Amendment, are true and correct in all material respects as of

such date, except to the extent that such representation, warranty or statement

expressly relates to an earlier date (in which case such representation,

warranty or statement shall have been true and correct in all material respects

on and as of such earlier date) and (ii) no Default has occurred and is then

continuing; and

(b)  this Amendment constitutes the legal, valid

and 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 similar

laws relating to or affecting creditors’ rights generally, general equitable

principles (whether considered in a proceeding in equity or at law) and an

implied covenant of good faith and fair dealing.

4

 

SUBPART 4.3  Loan Document Pursuant to Credit

Agreement.  This Amendment is a Loan

Document executed pursuant to the Credit Agreement and shall (unless otherwise

expressly indicated therein) be construed, administered and applied in

accordance with all of the terms and provisions of the Credit Agreement, as

amended hereby.

SUBPART 4.4  Successors and Assigns.  This Amendment shall be binding upon and

inure to the benefit of the parties hereto and their respective successors and

assigns.

SUBPART 4.5  Counterparts.  This Amendment may be executed by the

parties hereto in several counterparts, each of which when executed and

delivered shall be an original and all of which shall constitute together but

one and the same agreement.

SUBPART 4.6  Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND

CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

5

 

                IN WITNESS WHEREOF, the

signatories hereto have caused this Agreement to be executed by their

respective officers thereunto duly authorized as of the day and year first

above 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:

  	

   

  
								

 

 

 

 

	

   

  	

  CREDIT SUISSE FIRST BOSTON, as the Syndication Agent

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  FLEET NATIONAL BANK, as

  the Administrative Agent

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Title:

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