CMO Employment Agreement

GRAPHIC

Richard Dreiling
CEO & President

March 1, 2006

Mr. David W. D92Arezzo
9797 Wexford Circle
Granite Bay, CA 95746

Dear David:

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, Chief Marketing Officer, reporting directly to Mr. Richard Dreiling, President/CEO. You will be based at our headquarters office located at 440 9 th Avenue, New York, NY. Your initial salary will be $460,000.00 annually ($17,692.31 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. Those plans include a 401(k) program, major medical benefits, Company paid life and disability programs and other welfare benefit packages. You will receive four (4) weeks of paid vacation each calendar year subject to restrictions of your job requirements. Please be aware that Company92s vacation policy does not allow carryover from year to year. Therefore, if the four weeks are not taken they are forfeited each year.

As a senior executive of the Company, you will be eligible to participate in the Company92s performance incentive plan at fifty percent (50%) of annual salary as follows: 50% of your annual bonus will be paid upon achievement of the "minimum target", 100% of your annual bonus will be paid upon achievement of the "target" and 150% of your annual bonus will be paid upon achievement of the "maximum target". The program targets are set by the compensation committee annually and are typically based on the attainment of company performance towards EBITDA targets and your individual performance towards 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 ap ...