Document:

Exhibit

10.61

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is entered into as of the 1st  day of January, 2002, by and between Full

House Resorts, Inc., a Delaware corporation (the “Company”), and Michael P.

Shaunnessy (the “Executive”).

 

R E C I T A L S

 

The Company desires to maintain the employment of the Executive, and

the Executive desires to be employed by the Company, in accordance with the

provisions contained in this Employment Agreement (the “Agreement”).

 

NOW, THEREFORE, in consideration of the premises and the respective

covenants and agreements of each of the Company and the Executive contained in

this Agreement, each of the Company and the Executive agrees as follows:

 

ARTICLE 1

 

EMPLOYMENT

 

The Company employs the Executive and the Executive accepts such

employment.  The Executive shall serve

as Executive Vice President and Chief Financial Officer for the Company. The

Executive shall have such responsibilities, perform such duties and exercise

such power and authority as are inherent in, or incident to, that

position.  The Executive shall devote

his best efforts and full time to the performance of his duties as an executive

of the Company.

 

ARTICLE 2

 

EMPLOYMENT  TERM

 

Subject to the provisions of Article 5 below, the initial term of this

Agreement shall be for a two year period commencing on January 1, 2002, and

terminating on January 1, 2004 (the “Term”), unless extended.

 

 

At any time prior to its expiration, the term of this Agreement may be

extended, in writing, by a document executed by each of the Company and the

Executive.

 

ARTICLE 3

 

COMPENSATION

 

3.1           Salary.  In payment for the obligations to be

performed by the Executive during the Term, the Company shall pay to the

Executive (subject to any applicable payroll and/or other taxes required to be

withheld) an annual salary of Two Hundred Fifty Thousand Dollars ($250,000) per

year.

 

3.2          Payment of Salary.  Payments of salary shall be made to the

Executive in installments from time to time on the same dates that payments of

salary are generally made to all executives of the Company. 

 

ARTICLE 4

 

CERTAIN FRINGE BENEFITS

 

4.1           Generally.  The Executive shall be entitled to

reimbursement for reasonable business expenses incurred in connection with his

employment, including customer entertainment. 

The Executive shall further be entitled to receive such benefits and to

participate in such benefit plans as are generally provided from time to time

by the Company to its executives; provided, however, that nothing contained in

this Section 4.1 shall be construed to obligate the Company to provide any

specific benefits to its executives generally. 

The Company currently provides health insurance, including vision and

dental benefits, as its benefit plan. 

In the event that, during the Term, the Company discontinues the

provision of such insurance as part of its benefit plan, then the Executive’s

salary shall be adjusted upward to the extent required to compensate him for

the loss of such insurance.

 

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4.2           Vacations.  The Executive shall be entitled to such

vacation time as is provided in accordance with the policies as are from time

to time adopted by the Company’s Board of Directors with respect to its

executives.  The Executive shall be

entitled to no less than two weeks of paid vacation per year, commencing after

one year of employment, and no less than three weeks of paid vacation per year,

commencing after five years of employment.

 

4.3           Executive Bonus.   The Executive shall participate in any executive

bonus plan provided by the Company, at a level commensurate with other

executives.

 

4.4             Compensation.  The Salary, together with Fringe Benefits

and any Bonus, shall constitute the “Compensation”.

 

ARTICLE 5

 

TERMINATION OF EMPLOYMENT

 

5.1           Certain Definitions.  The following terms shall have the following

respective meanings when utilized in this Article 5:

 

(a)                                “Acquisition

of Control” shall mean:

 

(i)                                   any

Person (including a Group) becoming the Beneficial Owner of, or acquiring the

power to direct the exercise of voting power with respect to, directly or

indirectly, securities which represent thirty percent (30%) or more of the

combined voting power of the Company’s outstanding securities thereafter,

whether or not some portion of such securities was owned by such Person (or by

any member of such Group) prior thereto, provided, that any acquisition of voting

power by William P. McComas, the Estate of Allen E. Paulson, and/or Lee

Iacocca  or any trust created by them,

shall be excluded from any determination as to whether an “Acquisition of

Control” has occurred; or

 

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(ii)                                the

election of three or more directors of the Company within any twelve-month

period without the approval of a majority of the then Incumbent Directors; or

 

(iii)                             after any cash tender

offer or exchange offer, merger, consolidation or other business combination,

of the Company, or any sale, liquidation or dissolution (or adoption of a plan

for liquidation or dissolution) , or any combination of any or all of the

foregoing transactions, including but not limited to a series of such

transactions, by a successor to the Company, excepting where fifty-one percent

(51%) or more of the ownership interest of or voting power in such successor is

held by William P. McComas, the Estate of Allen E. Paulson, and/or Lee

Iacocca  or any trust created by them,

 

(b)                               “Beneficial

Owner” shall have the meaning adopted by the United States Securities and

Exchange Commission.

 

(c)           “Cause” shall mean

any action by the Executive or any inaction by the Executive which is

reasonably believed by the Company to constitute:

 

(i)                                   fraud,

embezzlement, misappropriation, dishonesty, breach of trust or activity  which would result in loss of any gaming

license(s) by the Executive or by the Company.

 

(ii)                                

a felony or lack of moral turpitude;

 

(iii)                             material breach or

violation of any or all of the covenants, agreements and obligations of the

Executive set forth in this Agreement, other than as the result of the Executive’s

death or Disability (as hereinafter defined);

 

(iv)                              a

willful or knowing failure or refusal by the Executive to perform any or all of

his material duties and responsibilities as an officer of the Company, other

than as the result of the Executive’s death or Disability; or

 

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(v)                               gross

negligence by the Executive in the performance of any or all of his material

duties and responsibilities as an officer of the Company, other than as the

result of the Executive’s death or Disability.

 

(d)          “Compensation” shall

mean the payment of salary to which Executive is entitled under the provisions

of this Agreement.

 

(e)           “Disability” shall

mean any mental or physical illness, condition, disability or incapacity which

prevents the Executive from reasonably discharging his duties and

responsibilities as an officer of the Company. 

In the event that any disagreement or dispute shall arise between the

Company and the Executive as to whether the Executive suffers from any

Disability, then, in any such event, the Executive shall submit to the physical

or mental examination of a physician licensed under the laws of the State of

Nevada, who shall be mutually selected by the Company and the Executive, and

such physician shall make the determination of whether the Executive suffers

from any Disability.  In the absence of

fraud or bad faith, the determination of such physician shall be final and

binding upon each of the Company and the Executive.  The entire cost of any such examination shall be borne solely by

the Executive.

 

(f)           “Good Reason” shall

mean:

 

(i)                                   the

assignment by the Board of Directors, or the Chief Executive Officer, of the

Company to the Executive, without his express written consent, of duties and

responsibilities which results in the Executive having less significant duties

and responsibilities or exercising less significant power and authority than he

had, or duties and responsibilities or power and authority not comparable to

that of the level and nature which he had immediately prior to any such

assignment;

 

(ii)                                the

removal of the Executive from, or a failure to reappoint the Executive to, his

 

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then current position

with the Company or its successor, except (A) with the Executive’s express

written consent or (B) in connection with any termination of the Executive’s

employment by the Company as the result of the Executive’s Protracted

Disability (as hereinafter defined) or for Cause; or

 

(iii)                             the

Company’s failure to perform in a timely manner its material obligations under

this Agreement (including without limitation its obligations to make payments

to the Executive pursuant to the provisions of Article 3); or

 

(iv)                            an

Acquisition of Control.

 

(g)          “Group” shall mean

any combination of persons knowingly participating in a joint activity or

interdependent consciously parallel action toward a common goal, whether or not

pursuant to an express contract; provided, however, that actions taken by a

director of the Company acting as such shall not alone constitute membership in

a Group.

 

(h)          “Incumbent Director”

shall mean any director of the Company serving at January 1, 2002, or elected

thereafter if nominated or approved by at least two-thirds of the then

Incumbent Directors.

 

(i)            “Protracted

Disability” shall mean any Disability which prevents the Executive from

reasonably discharging his duties and responsibilities as an officer of the

Company for a period of three (3) consecutive months.

 

(j)            “Termination Date”

shall mean a specific date not less than ten (10) nor more than thirty (30)

days from and after the date of any Termination Notice upon which the

Executive’s employment by the Company shall be terminated in accordance with

the provisions of this Agreement.

 

(k)           “Termination Notice”

shall mean a written notice which (I) sets forth the specific provision of this

Agreement relied upon to terminate the Executive’s employment by the Company,

(ii) sets forth in

 

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reasonable detail the facts and circumstances claimed to provide the

basis for the termination of the Executive’s employment by the Company pursuant

to the specific provision of this Agreement relied upon therein and (iii) sets

forth a Termination Date.

 

5.2           Termination of Employment.

 

(a)           Notwithstanding the

provisions of Article 2 above, this Agreement (i) shall be automatically

terminated upon the death of the Executive pursuant to the provisions of

Section 5.3 below, (ii) may be terminated at any time by the Company pursuant

to the provisions of Section 5.4 or 5.5 below, and (iii) may be terminated by

the Executive pursuant to the provisions of Section 5.6 or 5.7 below.

 

(b)           In the event that

either the Company or the Executive shall desire to terminate the Executive’s

employment by the Company pursuant to any of the provisions of Sections 5.4,

5.5, 5.6 or 5.7 below, then the party causing any such termination shall give

to the other party a Termination Notice.

 

(c)           In the event that

this Agreement shall be terminated pursuant to any of the provisions of this

Article 5, the Company shall be discharged from all of its obligations to the

Executive hereunder upon its payment to the Executive of the required amount

set forth in the section of this Article 5 pursuant to which such termination

shall occur.  The Executive’s sole and

exclusive remedy for the termination of this Agreement prior to its expiration,

regardless of whether such termination shall be initiated by the Company or by

the Executive, and regardless of whether such termination shall be with or

without cause, shall be the payment by the Company to him of the amount set

forth in the section of this Article 5 pursuant to which such termination shall

occur.

 

5.3           Death of Executive.  In the event that at any time during the

Term the Executive shall die, then the employment of the Executive by the

Company shall automatically terminate on the date of the Executive’s

death.  In such event, not more than

ninety (90) days from and after the date of the Executive’s death, the

 

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Company shall pay to the Executive’s estate or heirs, as the case may

be, an amount in cash equal to the Executive’s salary (subject to any

applicable payroll and/or other taxes required by law to be withheld)

determined as of the date of the Executive’s death.

 

5.4           Disability of Executive.

 

(a)           In the event that at

any time during the term of this Agreement the Executive shall suffer any

Disability, then the Company shall be obligated to continue to pay in the

ordinary and normal course of its business to the Executive or his legal

representatives, as the case may be, the Executive’s Compensation (subject to

any applicable payroll and/or other taxes required by law to be withheld) from

the date that the Executive shall first suffer any such Disability, to the date

that the Executive’s employment by the Company shall be terminated pursuant to

any of the provisions of this Agreement, or to the date that this Agreement

shall expire.

 

(b)          In the event that the

Executive shall suffer any Protracted Disability during the term of this

Agreement, then the Company may terminate this Agreement.  In such event, in addition to any other

benefits which may have been provided by the Company to the Executive or his

legal representatives, as the case may be, pursuant to the provisions of

Section 5.4(a) above, not later than ninety (90) days after the Termination

Date specified in the Termination Notice, the Company shall pay to the

Executive or his legal representatives, as the case may be, an amount in cash

equal to the Executive’s Compensation (subject to any applicable payroll and/or

other taxes required by law to be withheld) determined as of the Termination

Date.  Subsequent to such Termination

Date, the Executive or his legal representatives, as the case may be, shall

also be entitled to receive any benefits which may be payable under any

disability insurance policy or disability plan which may be provided by the

Company.

 

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5.5           Termination of Employment by Company.

 

(a)           The

Company may terminate this Agreement at any time with Cause.  In such event, the Company shall continue to

pay the Compensation to the Executive (subject to any applicable payroll and/or

other taxes required by law to be withheld) until the Termination Date.

 

(b)           The

Company may terminate this Agreement at any time without Cause.  In the event that the Company shall

terminate the employment of the Executive by the Company without Cause, and not

pursuant to any other provision of this Agreement, the Company shall pay the

Compensation to the Executive (subject to any applicable payroll and/or other

taxes required by law to be withheld) until the expiration of this Agreement.

 

5.6           Termination of Employment by

Executive.

 

(a)           The Executive may

terminate this Agreement at any time for Good Reason.  In such event, the Company shall continue to pay to the Executive

the Executive’s Compensation (subject to any applicable payroll and/or other taxes

required by law to be withheld) until January 1, 2004.

 

5.7           Payment Upon Change in Control.   Notwithstanding any other provisions of

this Agreement, in the event there is an Acquisition of Control, then the

Executive shall be paid in cash an amount equal to one year’s annual salary.

 

ARTICLE 6

 

ATTORNEYS’ FEES

 

In the event that any dispute shall arise between the Company and the

Executive based, in whole or in part, upon this Agreement or any or all of the

provisions contained herein, and/or upon the Executive’s employment by the

Company, such dispute shall be resolved by binding arbitration  in accordance with the rules and regulations

of the American Arbitration Association, and the prevailing party in any such

 

9

 

arbitration shall be entitled to recover from the nonprevailing party,

and shall be awarded by a court of competent jurisdiction, any and all

reasonable fees and disbursements paid, incurred or suffered by such prevailing

party as the result of, arising from, or in connection with, any such

arbitration.

 

ARTICLE 7

 

MISCELLANEOUS

 

7.1           Governing Law.  This Agreement shall  be 

governed by and construed in accordance with the laws of the State of

Nevada, without application of any conflicts of laws principles.

 

7.2           Entire Agreement.  This Agreement constitutes the entire

agreement between the Company and the Executive with respect to the subject

matter hereof and supersedes all prior negotiations, agreements, understandings

and arrangements, both oral and written, between the Company and the Executive

with respect to such subject matter. 

This Agreement may not be modified in any way, except by a written

instrument executed by each of the Company and the Executive.

 

7.4           Benefits; Binding  Effect.  This 

Agreement  shall  be for 

the  benefit  of, 

and  shall  be 

binding  upon,  each 

of  the Company and the Executive

and their respective heirs, personal representatives, legal representatives,

successors and assigns.

 

7.5           Severability. The

invalidity of any one or more of the words, phrases, sentences, clauses or

sections contained in this Agreement shall not affect the enforceability of the

remaining portions of this Agreement or any part hereof, all of which are

inserted conditionally on their being valid in law.  In the event that any one or more of the words, phrases,

sentences, clauses or sections contained in this Agreement shall be declared

invalid by a court of competent jurisdiction, then, in any such event, this

Agreement shall be construed as if such invalid word or words, phrase or

phrases, sentence or sentences, clause or clauses, or section or sections had

not been inserted.

 

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7.6           Waivers. The waiver by

either party of a breach or violation of any term or provision of this

Agreement by the other party shall not operate nor be construed as a waiver of

any subsequent breach or violation of any provision of this Agreement nor of

any other right or remedy.

 

7.7           Section Headings.  The section headings contained in this

Agreement are for reference purposes only and shall not affect in any way the

meaning or interpretation of any or all of the provisions of this Agreement.

 

7.8           Counterparts. This

Agreement may be executed in any number of counterparts and by the separate

parties hereto in separate counterparts, each of which shall be deemed to

constitute an original and all of which shall be deemed to be the one and the

same instrument.

 

IN WITNESS WHEREOF, each of the parties has executed

and delivered this Agreement on January 1, 2002.

 

 

 

Full House Resorts, Inc.

 

 

	

  By:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  William P. McComas

  	

  Michael P. Shaunnessy

  	

   

  
	

   

  	

  Chief Executive Officer

  	

  (Executive)

  	

   

  
						

 

11Exhibit 4.2

 

Duane

Reade Inc.

 

and

The Guarantors Named on the Signature Pages Hereto

$80,000,000

91⁄4% Senior Subordinated Notes due 2008

Second

Supplemental Indenture

Dated as of May 20,  2002

To Indenture dated as of February 13, 1998,

As Amended by the First Supplemental Indenture

Dated as of August 22, 1999

State

Street Bank and Trust Company

as Trustee

 

 

SECOND SUPPLEMENTAL

INDENTURE, dated as of May 20, 2002 (this “Supplemental Indenture”), among

Duane Reade Inc., a Delaware corporation (the “Company”), the Subsidiary

Guarantors executing a signature page hereto (the “Subsidiary Guarantors”), and

State Street Bank and Trust Company, as trustee (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the Company, the

Subsidiary Guarantors and the Trustee executed and delivered an Indenture,

dated as of February 13, 1998 (the “Indenture”), providing for the

issuance of $80,000,000 principal amount of 91⁄4% Senior Subordinated Notes due

2008 (all capitalized terms used herein and not defined are used herein as defined

in the Indenture);

WHEREAS, pursuant to Section

9.02 of the Indenture, the Company, the Subsidiary Guarantors and the Trustee

may amend or supplement certain terms and covenants contained in the Indenture

with the written consent of the Holders of a majority in aggregate principal

amount of the outstanding Notes;

WHEREAS, the Company has

offered to purchase for cash all of the outstanding Notes, upon the terms and

subject to the conditions set forth in its Offer to Purchase and Consent

Solicitation Statement, dated May 3, 2002, and in the related Letter of

Transmittal and Consent (such offer, the “Offer”); in connection therewith the

Company has been soliciting written consents of the Holders to the substance of

the amendments to the Indenture set forth herein (and to the execution of this

Supplemental Indenture), and the Company has now obtained such written consents

from the Holders of a majority in aggregate principal amount of the outstanding

Notes; accordingly, this Supplemental Indenture and the amendments set forth

herein are authorized pursuant to Section 9.02 of the Indenture referred to

above;

WHEREAS, the execution and

delivery of this Supplemental Indenture has been duly authorized by the parties

hereto, and all other acts necessary to make this Supplemental Indenture a

valid and binding supplement to the Indenture effectively amending the

Indenture as set forth herein have been duly taken;

NOW THEREFORE, THIS

INDENTURE WITNESSETH, that, for and in consideration of the above premises, it

is mutually covenanted and agreed, for the equal and proportionate benefit of

all Holders of the Notes, as follows:

Section 1.              Amendments to the Indenture.

Upon written notification to

the Trustee by the Company that it has purchased pursuant to the Offer all Notes

validly tendered pursuant to the Offer and not withdrawn prior to the

expiration date for the Offer, the Company, the Subsidiary Guarantors and the

Trustee hereby agree as follows:

a.             Section 1.01 of the Indenture is

amended to remove the definitions of the following terms:

“Acquired Indebtedness”

 

 

“Attributable

Indebtedness”

“Capital Expenditure

Indebtedness”

“Existing Indebtedness”

“Investments”

“Permitted Investments”

 “Permitted Refinancing Indebtedness”

“Refinancing Plan”

“Restricted Investments”

“Restricted Payment”

“Stated Maturity”

“Weighted Average Life to

Maturity”

b.             The following definition in Section

1.01 of the Indenture is amended in its entirety to read as follows:

““Asset

Sale” means (a) the sale, lease, conveyance, disposition or other transfer

(a “disposition”) of any properties, assets or rights (including, without

limitation, a sale and leaseback transaction) or (b) the issuance, sale or

transfer by the Company of Equity Interests of a Subsidiary, and in the case of

either clause (a) or (b), whether in a single transaction or a series of

related transactions for Net Proceeds in excess of $1.0 million; provided,

however, that the following transactions will be deemed not to be Asset

Sales: (i) sales of inventory in the ordinary course of business; (ii) a

disposition of assets by the Company to a Wholly Owned Subsidiary or by a

Wholly Owned Subsidiary of the Company to the Company or to another Wholly

Owned Subsidiary of the Company; (iii) a disposition of Equity Interests by a

Wholly Owned Subsidiary of the Company to the Company or to another Wholly

Owned Subsidiary of the Company; and (iv) the sale and leaseback of any assets

within 90 days of the acquisition of such assets.”

c.             Section 1.02 of the Indenture is

amended in its entirety to read as follows:

“Section 1.02. 

Other Definitions.

 

 

2

 

	

  Term

  	

   

  	

  Defined in 

  Section

  
	

  “Act”

  	

   

  	

  1.07

  
	

  “Asset Sale Offer”

  	

   

  	

  3.10

  
	

  “Change of Control Offer”

  	

   

  	

  4.09

  
	

  “Change of Control

  Payment”

  	

   

  	

  4.09

  
	

  “Change of Control Payment

  Date”

  	

   

  	

  4.09

  
	

  “Covenant Defeasance”

  	

   

  	

  8.03

  
	

  “distribution”

  	

   

  	

  10.14

  
	

  “DTC”

  	

   

  	

  2.03

  
	

  “Event of Default”

  	

   

  	

  6.01

  
	

  “Excess Proceeds”

  	

   

  	

  4.10

  
	

  “Legal Defeasance”

  	

   

  	

  8.02

  
	

  “Offer Amount”

  	

   

  	

  3.10

  
	

  “Offer Period”

  	

   

  	

  3.10

  
	

  “Paying Agent”

  	

   

  	

  2.03

  
	

  “payment”

  	

   

  	

  10.14

  
	

  “Payment Blockage Notice”

  	

   

  	

  10.03

  
	

  “Payment Default”

  	

   

  	

  6.01

  
	

  “Payment in full”

  	

   

  	

  10.01

  
	

  “Purchase Date”

  	

   

  	

  3.10

  
	

  “Registrar”

  	

   

  	

  2.03”

  

 

d.             Sections 4.04 through 4.08 of the

Indenture are amended in their entirety to read as follows:

“Section 4.04.

[Intentionally omitted.]

Section 4.05.

[Intentionally omitted.]

Section 4.06.

[Intentionally omitted.]

Section 4.07.

[Intentionally omitted.]”

Section 4.08.

[Intentionally omitted.]”

 

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e.             Sections 4.11 through 4.19 of the

Indenture are amended in their entirety to read as follows:

“Section 4.11.

[Intentionally omitted.]

Section 4.12.

[Intentionally omitted.]

Section 4.13.

[Intentionally omitted.]

Section 4.14.

[Intentionally omitted.]

Section 4.15.

[Intentionally omitted.]

Section 4.16.

[Intentionally omitted.]

Section 4.17.

[Intentionally omitted.]

Section 4.18.

[Intentionally omitted.]

Section 4.19.

[Intentionally omitted.]”

f.              Sections 5.01 through 5.02 of the

Indenture are amended in their entirety to read as follows:

“Section 5.01.

[Intentionally omitted.]

Section 5.02.

[Intentionally omitted.]”

 

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g.             Sections 6.01(d) through 6.01(i) of

the Indenture are amended in their entirety to read as follows:

“(d) [Intentionally

omitted];

(e) [Intentionally omitted];

(f) [Intentionally omitted];

(g) [Intentionally omitted];

(h) [Intentionally omitted];

and

(i) [Intentionally

omitted].”

h.             Section 6.02 of the Indenture is

amended in its entirety to read as follows:

“Section 6.02.  Acceleration.

If

any Event of Default occurs and is continuing, the Trustee or the Holders of at

least 25% in principal amount of the then outstanding Notes may declare all the

Notes to be due and payable immediately; provided, that so long as any

Indebtedness permitted to be incurred pursuant to the New Credit Agreement

shall be outstanding, such acceleration shall not be effective until the

earlier of (a) any acceleration of any such Indebtedness under the New Credit

Agreement and (b) five Business Days after receipt by the Company of written

notice of such acceleration.  Holders of

the Notes may not enforce this Indenture or the Notes except as provided in

this Indenture.”

i.              Section 8.03 of the Indenture is

amended in its entirety to read as follows:

“Section 8.03         Covenant Defeasance.

Upon the Company’s exercise

under Section 8.01 hereof of the option applicable to this Section 8.03, the

Company and each Subsidiary Guarantor shall be released from its obligations

under the covenants contained in Sections 4.09 and 4.10 with respect to the

outstanding Notes and Subsidiary Guarantees, on and after the date the

conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”),

and the Notes and the Subsidiary Guarantees shall thereafter be deemed to be

not “outstanding” for the purposes of any direction, waiver, consent or

declaration or Act of Holders (and the consequences of any thereof) in

connection with such covenants, but shall continue to be deemed “outstanding”

for all other purposes hereunder (it being understood that such Notes and

Subsidiary Guarantees shall not be deemed outstanding for financial accounting

purposes). For this purpose, such Covenant Defeasance means that, with respect

to the outstanding Notes and Subsidiary Guarantees, the Company and any

Subsidiary Guarantor may omit to comply with and shall have no liability in

respect of any term, condition or limitation set forth in any such covenant,

whether directly or indirectly, by reason of any reference elsewhere herein to

any such covenant or by reason of any 

 

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reference in any such

covenant to any other provision herein or in any other document and such

omission to comply shall not constitute a Default or an Event of Default under

Section 6.01(c) hereof, but, except as specified above, the remainder of this

Indenture and such Notes and Subsidiary Guarantees shall be unaffected

thereby.”

j.              Section 11.03(b) of the Indenture

is amended in its entirety to read as follows:

“(b) No Subsidiary Guarantor

shall consolidate with or merge with or into (whether or not such Subsidiary

Guarantor is the surviving Person), or sell all or substantially all of its

assets to, another Person, whether or not affiliated with such Subsidiary Guarantor,

unless, other than with respect to a merger between a Subsidiary Guarantor and

another Subsidiary Guarantor or a merger between a Subsidiary Guarantor and the

Company, (i) subject to the provisions of Section 11.04 hereof, the Person

formed by or surviving any such consolidation or merger (if other than such

Subsidiary Guarantor) assumes all the obligations of such Subsidiary Guarantor

pursuant to a supplemental indenture substantially in the form of Exhibit C

hereto, under the Subsidiary Guarantee of such Subsidiary Guarantor and this

Indenture; (ii) immediately after giving effect to such transaction, no Default

or Event of Default exists; and (iii) the Company would be permitted,

immediately after giving effect to such transaction, to incur at least $1.00 of

additional Indebtedness if the Company’s Fixed Charge Coverage Ratio for the

Company’s most recently ended four fiscal quarters for which internal financial

statements are available immediately preceding the date on which such

transaction occurred would have been at least 2.0 to 1, determined on a

consolidated pro forma basis

(including a pro forma application

of the transaction), as if the transaction had occurred at the beginning of

such four-quarter period.”

Section 2.              Ratification and Effect.

Except as hereby expressly

amended, the Indenture is in all respects ratified and confirmed and all the

terms, provisions and conditions thereof shall be and remain in full force and

effect.

Upon and after the execution

of this Supplemental Indenture, each reference in the Indenture to “this

Indenture”, “hereunder”, “hereof” or words of like import referring to the

Indenture shall mean and be a reference to the Indenture as modified hereby.

Section 3.              Governing Law.

THE INTERNAL LAWS OF THE

STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL

INDENTURE, THE INDENTURE AS SUPPLEMENTED AND AMENDED HEREBY, THE NOTES AND THE

SUBSIDIARY GUARANTEES WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES

THEREOF.

Section 4.              Counterpart Originals.

The parties may sign any

number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together

represent the same agreement.

 

6

 

Section 5.              The Trustee.

The recitals in this

Supplemental Indenture shall be taken as the statements of the Company and the

Subsidiary Guarantors, and the Trustee assumes no responsibility for their

correctness.  The Trustee shall not be

responsible or accountable in any manner whatsoever for or with respect to the

validity or sufficiency of this Supplemental Indenture.

[Signatures

on following page]

 

7

 

IN WITNESS WHEREOF, the

parties hereto have caused this Supplemental Indenture to be duly executed in

New York, New York as of the date first written above.

	

  DUANE

  READE INC.

  
	

   

  
	

   

  
	

  By:

  	

  /s/ John K. Henry

  
	

  Name:

  	

  John

  K. Henry

  
	

  Title:

  	

  Senior

  Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  STATE

  STREET BANK AND TRUST COMPANY,

  
	

  as

  Trustee

  
	

   

  
	

   

  
	

  By:

  	

  /s/ Susan Merker

  
	

  Name:

  

  	

  Susan

  Merker

  
	

  Title:

  

  	

  Vice

  President

  

 

 

8

 

Each of the following

entities as Subsidiary Guarantor:

	

  DUANE READE

  	

   

  	

  DUANE READE INTERNATIONAL, INC.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  DUANE READE INC.,

  	

   

  	

   

  	

   

  
	

   

  	

  a general partner

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ John K. Henry

  	

   

  	

  By: :

  	

  /s/ John K. Henry

  
	

   

  	

   

  	

  Name:

  	

  John K. Henry

  	

   

  	

  Name:  

  	

  John K. Henry

  
	

   

  	

   

  	

  Title: 

  

  	

  Senior Vice President

  	

   

  	

  Title:  

  	

  Senior Vice President

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  DRI I INC.,

  	

   

  	

   

  	

   

  
	

   

  	

  a general partner

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ John K. Henry

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	

  John K. Henry

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Title:

  	

  Senior Vice President

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  DRI I INC.

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ John K. Henry

  	

   

  	

   

  	

   

  
	

   

  	

  Name:

  	

  John K. Henry

  	

   

  	

   

  	

   

  
	

   

  	

  Title:

  	

  Senior Vice President

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  DUANE READE REALTY, INC.

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By: :

  	

  /s/ John K. Henry

  	

   

  	

   

  	

   

  
	

   

  	

  Name: 

  	

  John K. Henry

  	

   

  	

   

  	

   

  
	

   

  	

  Title:

  	

  Senior Vice President

  	

   

  	

   

  	

   

  
								

 

 

9

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