COLLECTIVE BARGAINING AGREEMENT

CONTENTS

AGREEMENT made and entered into April 1, 2006 by and between DUANE READE, INC., 440 9th Avenue, New York, (hereafter called the “Employer”), and LOCAL 340A, New York, JOINT BOARD, UNITE-HERE, 31 West 15th Street, New York, New York 10011 (hereafter called the “Union”).

WITNESSETH:

WHEREAS, the parties hereto desire to cooperate in establishing and maintaining proper and suitable conditions, and to secure uniform and equitable terms of employment and conditions of labor satisfactory to Employer and employees;

NOW, THEREFORE, in consideration of the mutual covenants and agreement hereinafter contained, it is mutually agreed as follows:

ARTICLE 1. RECOGNITION AND UNION SECURITY

A.    The Employer recognizes the Union as the sole and exclusive bargaining agent for all clerks, cashiers, pharmacy clerks, pharmacy technicians, and photo technicians employed in the Employer’s stores.

B.     It shall be a condition of employment that all employees of the Employer covered by this Agreement, who are members of the Union in good standing on the effective date of this Agreement shall remain members in good standing, and those who are not members on the effective date of this Agreement shall on the 45th day following the effective date of this Agreement, or after the execution date of the Agreement, whichever is later, become and remain members in good standing in the Union. It shall also be a condition of employment that all employees covered by this Agreement and hired on or after its effective date shall on the 45th day following the beginning of such employment become and remain members in good standing in the Union.

ARTICLE 2. COLLECTIVE BARGAINING UNIT

A.    The collective bargaining unit covered by this Agreement shall consist of all Covered employees employed in the Employer’s Stores who are employed for twenty (20) hours or more per week, excluding store managers, assistant store managers, pharmacists, clericals, individuals supplied by contractors, guards and supervisory employees as may be defined in the National labor Relations Act, as amended.

B.     Seasonal employees hired temporarily or supplied by a contractor for the Christmas season no earlier than December 15th and terminated no later than the next January 5th in any year shall also be excluded from the coverage of this Agreement.

C.     The Employer agrees to layoff sub part-time employees in a store (those who work less than 20 hours per week) before reducing the hours of bargaining unit employees in the same store. The preceding sentence only applies to situations when the Employer chooses to reduce the hours of a bargaining unit employee by three (3) or more hours per week.

ARTICLE 3. TRIAL PERIOD

A.    A trial period of sixty (60) days shall be in effect for all new employees hired by the Employer, during which period the employee may be discharged with or without cause in the sole determination of the Employer, and such determination shall not be subject to the arbitration provision hereinafter set forth. The trial period for any new employee will be extended an additional sixty (60) days upon the Employer’s written request therefore. Employees retained in the employ of the Employer subsequent to the expiration of such trial period shall be deemed regular employees and placed on a seniority list of the employees of the Employer, such seniority to date back to the beginning of their employment.

1

ARTICLE 4. SENIORITY

A.    Seniority for entitlement purposes (such as vacation and benefit eligibility) shall be measured from date of hire by the Employer.

B.     Seniority for relative purposes (such as for layoff and recall) shall be recognized on a store by store basis. In no case shall seniority in on