FIRST AMENDMENT TO CREDIT AGREEMENT

Exhibit 10.7

This First Amendment to Credit Agreement (the “First Amendment”) is made as of this 22nd day of July, 2004 by and among

XXXXX XXXXX, a New York general partnership, having its principal place of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and

XXXXX XXXXX INC. a Delaware corporation, having its principal place of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and

DRI I INC., a Delaware corporation, having its principal place of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and

XXXXX XXXXX INTERNATIONAL, INC., a Delaware corporation, having a mailing address at X.X. Xxx 00000, Xxxxxx, Xxx Xxxxxx 00000; and

XXXXX XXXXX REALTY, INC., a Delaware corporation, having its principal place of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and

the LENDERS party hereto; and

FLEET NATIONAL BANK, as Issuing Bank, a national banking association having a place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; and

FLEET NATIONAL BANK, as Administrative Agent for the Lenders, a national banking association having a place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; and

FLEET RETAIL GROUP, INC. (f/k/a Fleet Retail Finance Inc.), as Collateral Agent for the Lenders, a Delaware corporation, having its principal place of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; and

CONGRESS FINANCIAL CORPORATION, as Documentation Agent; and

GENERAL ELECTRIC CAPITAL CORPORATION as Syndication Agent; and

XXXXX FARGO RETAIL FINANCE, LLC, as Syndication Agent and Co-Lead Arranger

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H:

WHEREAS, on July 21, 2003, the parties hereto entered into that certain Credit Agreement (as amended and in effect, the “Credit Agreement”); and

WHEREAS, Xxxxx Xxxxx Inc. has advised the Agents and the Lenders that it intends to enter into a transaction with Xxxxx Xxxxx Holdings, Inc. and its subsidiaries pursuant to which Xxxxx Xxxxx Holdings, Inc. will become the sole shareholder of Xxxxx Xxxxx Inc.; and

WHEREAS, in connection with the transaction with Xxxxx Xxxxx Holdings, Inc., Xxxxx Xxxxx Inc. and/or its Subsidiaries intend to incur additional Indebtedness in the aggregate

amount of $350,000,000. A portion of the proceeds of such Indebtedness is intended to be utilized to repay the obligations under the Convertible Indenture and/or the Credit Agreement; and

WHEREAS, the consummation of the above referenced transactions would be in violation of the Credit Agreement and the Loan Parties have therefore requested that the Lenders amend certain provisions of the Credit Agreement in connection with the foregoing transactions and otherwise modify certain of the provisions of the Credit Agreement as set forth herein.

NOW, THEREFORE, it is hereby agreed as follows:

1. Capitalized Terms. All capitalized terms used herein and not otherwise defined shall have the same meaning herein as in the Credit Agreement.

2. Amendments to Article I. The provisions of Article I of the Credit Agreement are hereby amended as follows:

(a) By deleting the last paragraph of the definition of “Applicable Margin” in its entirety and substituting the following in its stead:

Except as provided in the following sentence, the Applicable Margin shall be adjusted quarterly as of the first day of each Fiscal Quarter, based upon the average Excess Availability for the immediately preceding Fiscal Quarter. Notwithstanding the foregoing, the Applicable Margin will be set at Level 2 on the Closing Date and will remain at Level 2 until (but not including) July 21, 2004. In no event shall the Applicable Margin be set at Xxxxx 0 prior to July 21, 2004 (even if the Excess Availability requirements for Level 1 have been met).

From and after July 21, 2004, the Applicable Margin shall be adjusted quarterly as of the first day of each Fiscal Quarter, based upon the average Excess Availability for the immediately preceding Fiscal Quarter as follows:

Level	Performance Criteria	Prime Rate Loans		LIBO Loans
1	Average Excess Availability greater than $35,000,000	0	%	1.50	%
2	Average Excess Availability greater than $25,000,000 but less than or equal to $35,000,000	0.25	%	1.75	%
3	Average Excess Availability less than or equal to $25,000,000	0.50	%	2.00	%

Upon the occurrence of an Event of Default, at the option of the Administrative Agent or at the direction of the Required Lenders, interest shall be determined in the manner set forth in Section 2.11.

(b) By deleting the definition of “Appraisal Percentage” in its entirety and substituting the following in its stead:

“Appraisal Percentage” shall mean 90%.

(c) By deleting the definition of “Borrowing Base” in its entirety and substituting the following in its stead:

“Borrowing Base” means, at any time of calculation, an amount equal to:

(i) the Credit Card Advance Rate multiplied by the face amount of Eligible Credit Card Receivables, plus

(ii) the lesser of (i) the Appraisal Percentage of the Appraised Value of Eligible Inventory, net of Inventory Reserves, or (ii) the Inventory Advance Rate multiplied by the Cost of Eligible Inventory net of Inventory Reserves; plus

(iii) the Prescription List Advance; plus

(iv) the Receivables Advance Rate multiplied by the face amount of Eligible Third-Party Receivables; minus

(v) the then amount of all Availability Reserves.

(d) By deleting the definition of “Change in Control” in its entirety and substituting the following in its stead:

“Change in Control” means, at any time, (a) during any period of twelve months after the Effective Date, individuals who at the beginning of such period constituted the board of directors of the Parent (together with any new directors whose election or appointment by such board of directors, or whose nomination for election by shareholders of the Parent, as the case may be, was approved by either (i) a vote of a majority of the directors still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved, or (ii) the Purchasers) cease for any reason (other than as a result of a requirement of law) to constitute a majority of the board of directors then in office; or (b) following the consummation of the Xxx Transaction but prior to the consummation of an initial public offering of the common stock of the Parent or DR Corp. (an “IPO”), the Purchasers cease to own, or to have the power to vote or direct the voting of, a majority of the then outstanding Voting Stock of the Parent, or (c) prior to the consummation of the Xxx Transaction or after the consummation of an IPO, any person or group (within the meaning of the Securities and Exchange Act of 1934, as

amended), other than the Purchasers, is or becomes the beneficial owner (within the meaning of Rule 13d-3 and 13d-5 of the Securities and Exchange Act of 1934, as amended, except that such person shall be deemed to have “beneficial ownership” of all shares that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time) directly or indirectly of thirty-five percent (35%) or more of the total then outstanding voting power of the Voting Stock of the Parent or DR Corp. on a fully diluted basis, whether as a result of the issuance of securities of the Parent or DR Corp., as applicable, any merger, consolidation, liquidation or dissolution of the Parent or DR Corp., as applicable, any direct or indirect transfers of securities or otherwise; or (d) (i) except as provided in Section 6.03(a)(vi), the failure of DR Corp. or DRI I to be a general partner of the Borrower, or (ii) except as provided in Section 6.03(a)(vi), the failure of the DR Corp. or DRI I at any time to own, directly or indirectly, 100% of the capital stock or other equity interests of the Borrower free and clear of all Liens (other than the Liens permitted pursuant to Section 6.02(f) and Liens in favor of the Collateral Agent for the benefit of the Secured Parties under the Loan Documents, if any, and restrictions on transfer of ownership set forth in the Partnership Agreement); or (e) except as provided in Section 6.03(a)(vi), the failure of DR Corp. at any time to own, directly or indirectly, 100% of the capital stock or other equity interests of DRI I free and clear of all Liens (other than the Liens permitted pursuant to Section 6.02(f) and Liens in favor of the Collateral Agent for the benefit of the Secured Parties under the Loan Documents, if any).

(e) By deleting the definition of “Consolidated EBITDA” in its entirety and substituting the following in its stead:

“Consolidated EBITDA” means for any period, the result for such period of (i) Consolidated Net Income, plus (ii) depreciation, amortization, and all other non-cash charges that were deducted in arriving at Consolidated Net Income for such period plus (iii) provisions for Taxes based on income that were deducted in arriving at Consolidated Net Income for such period, plus (iv) Consolidated Interest Expense, plus (v) non-recurring charges for the retirement of SERP obligations, change in control payments, settlement payments, and transfers of corporate life insurance policies, in each case to or for the benefit of Xxxxxxx Xxxx, in connection with the Xxx Transaction that were deducted in arriving at Consolidated Net Income for such period, all as determined on a Consolidated basis in accordance with GAAP.

(f) By amending the definition of “Consolidated Net Income” by adding the words “(which is not a Loan Party)” after the words “Subsidiary of the Parent” in clause (iii) of the proviso thereto.

(g) By amending clause (b) of the definition of “Eligible Credit Card Receivables” by adding the words “or second priority Liens permitted pursuant to Section 6.02(f)” after the words “Security Documents” at the end thereof.

(h) By relettering the last four clauses of the definition of “Eligible Third Party Receivables” as (c), (d), (e), and (f), respectively and by adding the words “or second priority Liens permitted pursuant to Section 6.02(f)” after the words “clause (a) of such definition” at the end of the relettered clause (c).

(i) By deleting the definition of “FRF” in its entirety and substituting the following in its stead:

“FRF” means Fleet Retail Group, Inc. f/k/a Fleet Retail Finance Inc., a Delaware corporation.

(j) By adding the following at the end of the definition of “Fixed Charge Coverage Ratio”:

Notwithstanding the foregoing, for any period in which the calculation of the Fixed Charge Coverage Ratio includes any fiscal month through the fiscal month ending immediately prior to the consummation of the Xxx Transaction, the calculation of the Fixed Charge Coverage Ratio for those fiscal months prior to and including such month shall include the financial results for DR Corp. and its Subsidiaries only (as if they were the “Parent and its Subsidiaries” for those months).

(k) By deleting the definition of “Inventory Advance Rate” in its entirety and substituting the following in its stead:

“Inventory Advance Rate” means the following percentages for the following types of Inventory:

Type of Inventory	Inventory Advance Rate
Pharmaceutical Inventory	84.2	%
Inventory other than Pharmaceutical Inventory	62.55	%

(l) By deleting the number “0.375%” in the definition of “Line Fee” and substituting the number “0.30%” in its stead.

(m) By deleting the last sentence of the definition of “Material Indebtedness” in its entirety and substituting the following in its stead:

In all events, “Material Indebtedness” shall include Indebtedness under the Convertible Indenture, the Xxx Transaction Financing and the Permanent Securities irrespective of the amounts due thereunder.

(n) By amending the definition of “Obligations” as follows:

(i) By deleting the words “the Credit Agreement” in clauses (a)(ii) and (a) (iii) of such definition and substituting the words “this Agreement” in their stead.

(ii) By adding the following at the end of such definition immediately before the period:

(but excluding any obligations owing to FRF, Fleet, or any of their respective Affiliates in connection with the Xxx Transaction Financing or the Permanent Securities).

(o) By deleting the definition of “Parent” in its entirety and substituting the following in its stead:

“Parent” means Xxxxx Xxxxx Holdings, Inc., a Delaware corporation.

(p) By deleting the words “all of the assets (including capital stock) acquired in connection with such acquisition” at the end of clause (v) of the definition of “Permitted Acquisition” and substituting the words “all assets of the same type and nature as constitute Collateral under the Security Documents” in its stead:

(q) By adding the words “with respect to any Investment that constitutes Revolving Lender Priority Collateral (as defined in the Intercreditor Agreement),” immediately after “(ii)” in the proviso to the definition of “Permitted Investments.”

(r) By deleting the last sentence of the definition of “Total Commitments” in its entirety and substituting the following in its stead:

As of the Effective Date, the Total Commitments aggregate $250,000,000.

(s) By adding the following new definitions in appropriate alphabetical order:

“Bridge Loan” means Indebtedness incurred by the Parent or any of its Subsidiaries as part of the Xxx Transaction Financing in contemplation of the issuance of Permanent Securities.

“DR Corp” means Xxxxx Xxxxx Inc., a Delaware corporation.

“DRS” means Xxxxx Xxxxx Shareholders, LLC, a Delaware limited liability company.

“Effective Date” means, (i) other than with respect to the Xxx Related Amendments, the date of the satisfaction of the conditions precedent set forth in Paragraph 11(a) of the First Amendment, and (ii) with respect to the Xxx Related Amendments, the date of the satisfaction of the conditions precedent set forth in Paragraphs 11(a) and 11(b) of the First Amendment.

“First Amendment” means the First Amendment to Credit Agreement dated July 22, 2004.

“Intercreditor Agreement” means the Intercreditor Agreement in the form of Exhibit “F” hereto to be entered into by the Collateral Agent and Bank of America, N.A., as term loan agent for certain lenders from time to time party to the Xxx Transaction Financing, as amended and in effect.

“Permanent Securities” means the issuance by the Parent, or any of its Subsidiaries, in one or more tranches, of debt, or equity or convertible securities of the Borrower, the Parent or DR Corp., for the purpose of refinancing all or a portion of the outstanding amounts under the Xxx Transaction Financing, in any case in an aggregate amount of not more than an amount necessary to effect such refinancings (including to refinance accrued interest and fees, expenses, original issue discount and other transaction costs in connection with any such refinancing), provided that (i) (A) except as provided in clause (i)(B) below, the principal amount of such securities shall not exceed 110% of the principal amount of Xxx Transaction Financing being so refinanced (plus accrued and unpaid interest thereon), or (B) with respect to any refinancing of the Bridge Loan, the principal amount of such securities shall not exceed 100% of the principal amount of Bridge Loan being so refinanced (plus accrued and unpaid interest thereon (including interest paid in kind), fees, original issue discount, transaction expenses and other amounts necessary to be paid to retire the Bridge Loan in full) (ii) such securities shall not have a final maturity date earlier than that contained in the documents evidencing the Xxx Transaction Financing being so refinanced as of the Effective Date, (iii) if such securities are secured by assets of any Loan Party, the holder of such securities (or its representative) shall become a party to the

Intercreditor Agreement; (iv) the pricing, covenants, defaults, rights and remedies and other terms of such securities shall be reasonably comparable to those terms then required or imposed by other lenders for similar securities issued by similarly situated issuers (as determined by the Borrower); and (v) if such securities refinance Subordinated Indebtedness of any Loan Party, such refinancing shall also be a Permitted Refinancing.

“Permitted Refinancing” means, with respect to any Person, any modification, refinancing, refunding, renewal or extension of any Indebtedness of such Person; provided that if the Indebtedness being modified, refinanced, refunded, renewed or extended is Subordinated Indebtedness of any Loan Party, (i) such modification, refinancing, refunding, renewal or extension is subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed or extended (any confirmation by the Agent that such terms are at least as favorable shall be binding on the parties hereto), (ii) the terms and conditions (including, if applicable, as to collateral, if any) of any such modified, refinanced, refunded, renewed or extended Indebtedness, taken as a whole, are not materially less favorable to the Loan Parties or the Lenders than the terms and conditions of the Indebtedness being modified, refinanced, refunded, renewed or extended (any confirmation by the Agent that such terms are at least as favorable shall be binding on the parties hereto), (iii) such modification, refinancing, refunding, renewal or extension is incurred by the Person who is the obligor on the Indebtedness being modified, refinanced, refunded, renewed or extended, and (iv) at the time thereof, no Default or Event of Default shall have occurred and be continuing.

“Pharmaceutical Inventory” means Inventory consisting of prescription medicines or products.

“Prescription List Advance” means an amount equal to 90% of the Appraised Value of the Borrower’s prescription lists (but in no event shall the Prescription List Advance exceed 30% of the aggregate Borrowing Base).

“Proxy Statement” means the Proxy Statement in respect of the Xxx Transaction filed by DR Corp. with the Securities and Exchange Commission on June 30, 2004.

“Purchasers” means (i) Oak Hill Capital Management, Inc., Oak Hill Capital Partners, L.P. (“OHCP”), any member of Xxxxx Xxxxx Shareholders LLC (“DRS”) that has agreed to give OHCP or its Affiliate a

proxy or to enter into a voting agreement pursuant to which OHCP or its Affiliate may vote the Voting Stock of DRS owned by such member, and each of their respective Affiliates and (ii) certain members of management of the Borrower and their respective Related Purchaser Parties.

“Related Purchaser Parties” means (1) any estate of any member of management referred to in clause (ii) of the definition of “Purchasers”, (2) any executor, personal administrator or trustee who holds a beneficial interest in DR Corp. or the Parent for the benefit of, or as fiduciary for, any spouse, child, stepchild sibling, or descendant of such member of management, to the extent of such interest, or (3) any trust or similar entity controlled by such member of management.

“Xxx Related Amendments” means (i) the provisions of the following Paragraphs of the First Amendment: (A) 2(e) (B) 2(g), (C) 2(j), (D) 2(m), (E) 2(o), (F) 2(q), (G) 3(i), and (H) 6 (in its entirety, other than 6(o)), and (ii) any release or subordination of any Collateral.

“Xxx Transaction” means the acquisition by the Parent of 100% of the capital stock of DR Corp. from the existing shareholders of DR Corp., which acquisition will be effected through the merger of a newly formed direct or indirect wholly owned subsidiary of the Parent with and into DR Corp., with DR Corp. as the surviving entity of such merger, consistent with the terms, in all material respects, as described in the Proxy Statement.

“Xxx Transaction Financing” means the Indebtedness incurred by the Parent and/or any of its Subsidiaries, in one or more tranches, resulting in net proceeds on the Effective Date of no more than $350,000,000 (excluding Indebtedness incurred under this Agreement) in connection with the consummation of the Xxx Transaction, including, without limitation, (i) the Bridge Loan, (ii) any rollover loans or the exchange notes in exchange for the Bridge Loan and (iii) any Permanent Securities or Permitted Refinancing issued in lieu thereof, in exchange therefor or as a refinancing thereof, provided that (i) rollover loans or exchange notes issued in exchange for all or any portion of the Bridge Loan shall be no less favorable to the issuer thereof than the Bridge Loan or rollover loans which are being exchanged, and (ii) if such rollover loans or exchange notes are secured by assets of any Loan Party, the holder of such securities (or representatives of such holders) shall, if not already a party, become a party to the Intercreditor Agreement.

“Senior Subordinated Notes” means the Senior Subordinated Notes due no earlier than 2011 of DR Corp. and the Borrower to be issued in connection with the Xxx Transaction.

“Tax Sharing Agreement” means the Tax Sharing Agreement to be delivered on or about the date of the closing of the Xxx Transaction among the Parent, DR Corp., the Borrower and certain other subsidiaries of the Parent, as amended, modified or supplemented from time to time.

3. Amendments to Article II. The provisions of Article II of the Credit Agreement are hereby amended as follows:

(a) The provisions of Section 2.01(a)(i) are amended by deleting the number “$200,000,000” and substituting the number “$250,000,000” in its stead.

(b) The provisions of Section 2.01(a)(ii) are amended by deleting the number “$15,000,000” and substituting the number “$50,000,000” in its stead.

(c) The provisions of Section 2.02(a) are amended by deleting the number “$225,000,000” and substituting the number “$275,000,000” in its stead.

(d) The provisions of Section 2.03(a) are hereby amended by adding the following new clause (ii) thereto as follows:

(ii) Indebtedness Reserve (an Availability Reserve): Until all of the obligations under the Convertible Indenture have been repaid in full and retired, at any time of calculation, an amount equal to the difference between (i) the then outstanding principal balance of Indebtedness under the Xxx Transaction Financing, the Permanent Securities and the Convertible Indenture (other than any amounts under the Convertible Indenture which are repaid or reduced on such date) and (ii) the sum of $350,000,000 plus the amount of cash on deposit in a segregated account to be utilized for the sole purpose of retiring such Indebtedness.

(e) The provisions of Section 2.06(b) are amended by deleting the number “$200,000,000” and substituting the number “$250,000,000” in its stead.

(f) The provisions of Section 2.07(a) are amended by deleting the number “$15,000,000” and substituting the number “$50,000,000” in its stead.

(g) The provisions of Section 2.13 are amended by deleting the number “0.375%” and substituting the number “0.30%” in its stead.

(h) The provisions of Section 2.18(a) are amended by adding the words “if the Required Lenders have notified the Administrative Agent and the

Borrower that no such conversions or continuations shall be permitted” at the end thereof.

(i) The provisions of Sections 2.22 and 2.23 are hereby amended by adding the following new clause (h) to Section 2.22 and (c) to Section 2.23:

Notwithstanding anything to the contrary contained in this Section, if prior to the application of any proceeds, the Agents have been advised that certain of the proceeds received by them constitute proceeds from any sale or other disposition of Term Lender Priority Collateral (as defined in the Intercreditor Agreement), such proceeds shall not be applied to the Obligations but shall be remitted to DRI or the Term Loan Agent (as defined in the Intercreditor Agreement), in accordance with written notice provided by the Term Loan Agent to the Agents.

4. Amendments to Article III. The provisions of Article III of the Credit Agreement are hereby amended as follows:

(a) All references to “the Parent” in Section 3.04 shall be deleted and replaced with “DR Corp.”

(b) All references to “the Closing Date” in Section 3.05(c) shall be deleted and replaced with “the Effective Date.”

(c) The provisions of Section 3.06(c) are hereby amended by deleting the text “Since the date of this Agreement” and replacing it with “Since the Effective Date,”.

(d) The provisions of Section 3.14 are hereby amended by adding the words “Except as set forth on Schedule 3.14 hereto:” immediately after the title to that Section.

(e) The provisions of Section 3.16(b) are hereby amended by adding “except as set forth on Schedule 3.16(b)” at the end of that Section.

5. Amendment to Article V. The provisions of Article V of the Credit Agreement are hereby amended as follows:

(a) All references to “the Parent” in Sections 5.01(a), (b), (c), (d), and (e) of the Credit Agreement shall be deleted and replaced with “DR Corp.”

(b) The provisions of Section 5.13 of the Credit Agreement are hereby deleted in their entirety and the following substituted in their stead:

If any additional Subsidiary of any Loan Party is formed or acquired after the Closing Date, the Borrower will notify the Agents and the Lenders thereof and (a) if such Subsidiary is not a Foreign Subsidiary, the Borrower will cause such Subsidiary to become a Loan Party hereunder and under each applicable Security Document in the manner provided therein within fifteen (15) days after such Subsidiary is formed or acquired and promptly take such actions to create and perfect Liens on such of the Subsidiary’s assets which would constitute “Collateral” under the Security Documents to secure the Obligations as any Agent or the Required Lenders shall reasonably request.

(c) The provisions of Section 5.14(b) of the Credit Agreement are hereby deleted in their entirety and the following substituted in their stead:

If any material property which would constitute Collateral is acquired by any Loan Party after the Closing Date (other than assets constituting Collateral under the Security Agreement that become subject to the Lien of the Security Agreement upon acquisition thereof), the Borrower will notify the Agents and the Lenders thereof, and the Loan Parties will cause such assets to be subjected to a Lien securing the Obligations and will take such actions as shall be necessary or reasonably requested by any Agent to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all at the expense of the Loan Parties.

6. Amendment to Article VI. The provisions of Article VI of the Credit Agreement are hereby amended as follows:

(a) Section 6.01 of the Credit Agreement is hereby amended by deleting the provisions of Section 6.01(a)(viii) in its entirety and substituting the following in its stead:

(viii) (A) Indebtedness arising under the Convertible Indenture and (B) the Xxx Transaction Financing, and related documents, and any Permanent Securities or other Indebtedness which refinances same, provided however that any such refinancing is permitted under the definitions of “Permanent Securities”, “Xxx Transaction Financing”, or “Permitted Refinancing”;

(b) Section 6.01(a) of the Credit Agreement is hereby amended by renumbering clause (xi) as clause (xii) and inserting a new clause (xi) as follows:

(xi) Indebtedness consisting of Guarantees of the Xxx Transaction Financing and any Permanent Securities issued in respect thereof or Permitted Refinancings thereof; and

(c) Section 6.01(b) of the Credit Agreement is hereby amended by deleting clause (i) thereof and substituting the following in its stead:

all dividends in respect of which are to be paid (and all other payments in respect of which are to be made) either (x) in additional shares of such preferred stock, in lieu of cash, or (y) in cash, but only if the Payment Conditions are satisfied,

(d) Section 6.02 of the Credit Agreement is hereby amended by deleting the period at the end of clause (e) and adding the following:

; and

(f) Liens to secure Indebtedness permitted by clause (viii) of Section 6.01(a), provided that if the Loan Parties request that the Collateral Agent release its Lien on any collateral or subordinate the priority of its Lien on any collateral (other than in the Revolving Lender Priority Collateral (as defined in the Intercreditor Agreement) as to which the Collateral Agent shall not be required to provide a release or subordination of its Lien) to the Lien of the holders of such Indebtedness in such collateral, the Collateral Agent shall so release or subordinate its Lien as long as (i) the Intercreditor Agreement is in full force and effect, and (ii) no Default or Event of Default shall then exist or arise therefrom.

(e) Section 6.03(a) of the Credit Agreement is hereby amended by deleting the period, and adding the following, at the end thereof:

and (iv) the Xxx Transaction shall be permitted on the terms specified herein (including, without limitation, the merger of DR Acquisition Corp. with and into DR Corp.), (v) contemporaneously with the closing of the Xxx Transaction, DR Acquisition Corp. may merge with and into DR Corp., as long as the Collateral Agent retains, as of the closing of the Xxx Transaction, a valid, perfected first priority Lien on the Revolving Lender Priority Collateral (as defined in the Intercreditor Agreement) (and thereupon all references to DR Corp. or the Borrower contained herein and in the other Loan Documents shall thereafter mean and refer to such surviving entity), and (vi) the Borrower may merge with and into, or be liquidated into, DR Corp.

(f) Section 6.03(b) of the Credit Agreement is hereby amended by adding the following at the end thereof:

Without limiting the generality of the foregoing, the Parent shall not engage in any business, and shall not own any property or assets, other than (i) acquiring and owning the capital stock of any other Loan Party, (ii) incurring Indebtedness and performing its obligations under the Xxx Transaction Financing, any Permanent Securities, any Permitted Refinancing, and/or this Agreement, (iii) incurring other obligations under the Xxx Transaction and the agreements contemplated thereby and engaging in activities contemplated therein or required thereby, and (iv) otherwise incidental to the operation of the business of a holding company.

(g) Section 6.04 of the Credit Agreement is hereby amended as follows:

(i) Section 6.04(c) of the Credit Agreement is deleted in its entirety and the following substituted in its stead:

(c) loans or advances made by any Loan Party to any other Loan Party and by the Parent to DRS, provided that loans and advances to the Parent shall be limited to such amounts as may be necessary to enable the Parent (i) to pay amounts in respect of the Xxx Transaction Financing and the Permanent Securities or any Permitted Refinancing, to the extent permitted hereunder, and to pay accounting, legal and other professional fees, income taxes (including pursuant to the Tax Sharing Agreement), franchise taxes, management fees permitted under Sections 6.07(e) and (f) hereof (to the extent not otherwise paid), and other general and administrative expenses incurred by the Parent for itself and the other Facility Guarantors and (ii) to make dividends or distributions or to make loans and advances to DRS to enable DRS to pay accounting, legal and other professional fees, income taxes (including pursuant to the Tax Sharing Agreement), franchise taxes, management fees permitted under Sections 6.07(e) and (f) hereof (to the extent not otherwise paid), and other general and administrative expenses incurred by DRS;

(ii) Section 6.04(d) of the Credit Agreement is deleted in its entirety and the following substituted in its stead:

(d) Equity Investments made by any Facility Guarantor in the Borrower or by any Facility Guarantor or by the Borrower in another Facility Guarantor (other than in the Parent) except for the purposes specified in Section 6.04(c) hereof;

(h) Section 6.05 of the Credit Agreement is hereby amended by adding the following new clause immediately after clause (e) and before the proviso thereto:

(f) the consummation of the Xxx Transaction.

(i) Section 6.06 of the Credit Agreement is hereby amended as follows:

(i) Section 6.06(a) of the Credit Agreement is hereby deleted in its entirety and the following substituted in its stead:

(a) The Loan Parties will not, and will not permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (i) the Loan Parties may declare and pay dividends with respect to their capital stock payable solely in additional shares of or warrants to purchase their common stock, (ii) splits or reclassifications of its stock into additional or other shares of its common stock are permitted, (iii) as long as the Commitments have not been terminated as a result of the occurrence of an Event of Default or the Obligations accelerated, cash dividends to DR Corp. are permitted, (iv) as long as the Commitments have not been terminated as a result of the occurrence of an Event of Default or the Obligations accelerated, cash dividends to the Parent are permitted to enable the Parent (x) to pay amounts in respect of the Xxx Transaction Financing and the Permanent Securities or any Permitted Refinancing, to the extent permitted hereunder, and to pay accounting, legal and other professional fees, income taxes (including pursuant to the Tax Sharing Agreement), franchise taxes, management fees permitted under Sections 6.07(e) and (f) hereof (to the extent not otherwise paid), and other general and administrative expenses incurred by the Parent for itself and the other Facility Guarantors and (y) to make dividends or distributions or to make loans and advances to DRS to enable DRS to pay accounting, legal and other professional fees, income taxes (including pursuant to the Tax Sharing Agreement), franchise taxes, management fees permitted under Sections 6.07(e) and (f) hereof (to the extent not otherwise paid), and other general and administrative expenses incurred by DRS, (v) as long as the Commitments have not been terminated as a result of the occurrence of an Event of Default or the Obligations accelerated, payments may be made to members of management of the Borrower or DR

Corp. in respect of the exercise of stock options, so long as at such time Excess Availability shall be equal to or greater than 15% of the Borrowing Base and no Default or Event of Default then exists or would arise therefrom, (vi) only if the Payment Conditions are then satisfied, the Parent may repurchase its capital stock and/or declare and pay cash dividends to its shareholders, (vii) the Subsidiaries of the Parent may declare and pay cash dividends, (A) to any other Loan Party (other than DR Corp or the Parent), (B) to the extent permitted in clause (iv) hereof, to the Parent, and (C) to the extent permitted in clause (iii) hereof, to DR Corp; and (viii) the Parent may declare and pay cash dividends to DRS to the extent permitted in clause (iv) hereof.

(ii) Section 6.06(b)(i) of the Credit Agreement is hereby deleted in its entirety and the following substituted in its stead:

(i) (A) the repayment, redemption, or repurchase of Indebtedness evidenced by the Convertible Indenture after the consummation of the Xxx Transaction, (B) the repayment, redemption or repurchase of the Xxx Transaction Financing, Permanent Securities or any Permitted Refinancing to the extent permitted under this Agreement, or (C) as long as the Payment Conditions are satisfied, the repayment, redemption or repurchase of Indebtedness evidenced by the Convertible Indenture (other than Indebtedness repaid, redeemed or repurchased after the consummation of the Xxx Transaction) or Subordinated Indebtedness;

(iii) Section 6.06(b)(ii) of the Credit Agreement is hereby deleted in its entirety and the following substituted in its stead:

payment of mandatory or regularly scheduled interest and principal payments as and when due in respect of any other Indebtedness permitted hereunder, including, without limitation on account of the Xxx Transaction Financing and any Permanent Securities and any Permitted Refinancing of any of the foregoing;

(iv) Section 6.06(b) is hereby amended by deleting the period at the end of clause (iii) and adding the following:

; and

(iv) voluntary, non-mandatory pre payments of Indebtedness on account of the Xxx Transaction Financing, any Permanent Securities and any Permitted Refinancing of any of the foregoing (other than any Subordinated Indebtedness) as long as at such time Excess Availability shall be equal to or greater than 15% of the Borrowing Base and no Event of Default then exists or would arise therefrom.

(j) The provisions of Section 6.07 of the Credit Agreement are hereby amended by deleting clause (d) in its entirety and adding the following in its stead:

and (d) the Xxx Transaction, (e) the fees payable to certain of the Purchasers upon the effectiveness of the Xxx Transaction, in the amount of $8,000,000, (f) as long as no Event of Default has occurred and is continuing, the management fees payable to certain of the Purchasers in an amount not to exceed in the aggregate $1,500,000 per annum, and (g) the transactions set forth on Schedule 6.07 hereto.

(k) The provisions of Section 6.08 of the Credit Agreement are hereby amended by adding the following at the end of clause (i) of the proviso thereto:

or by any document relating to the Xxx Transaction Financing, any Permanent Securities or Permitted Refinancings thereof,

(l) The provisions of Section 6.09(b) of the Credit Agreement are hereby deleted in their entirety and the following substituted in their stead:

(b) the Convertible Indenture and related documents other than as may be required in order to effectuate the repayment, redemption or repurchase of Indebtedness thereunder after the consummation of the Xxx Transaction,

(m) The provisions of Section 6.09 of the Credit Agreement are hereby amended as follows:

(i) by deleting clause (e) in its entirety and substituting the following in its stead:

(e) the Xxx Transaction Financing or any Permanent Securities or any Permitted Refinancing thereof, if as a result thereof a Default or an Event of Default would arise hereunder.

(ii) by adding at the end of clause (c) the words “to the extent such amendment, modification or waiver would have a Material Adverse Effect”

(n) The provisions of Section 6.10 of the Credit Agreement are hereby deleted in their entirety and the following substituted in their stead:

6.10 Additional Subsidiaries. Other than DR Acquisition Corp., the Loan Parties will not, and will not permit any Subsidiary to, create any additional Subsidiary unless no Default or Event of Default would arise therefrom and the requirements of Section 5.13 are satisfied.

(o) The provisions of Section 6.11(a) of the Credit Agreement are deleted in their entirety and the following substituted in their stead:

Fixed Charge Coverage Ratio; Capital Expenditures. (a) At any time that Excess Availability is less than ten percent (10%) of the then Borrowing Base, the Loan Parties shall maintain a Fixed Charge Coverage Ratio, calculated as of the last day of each month, during the Fiscal Years set forth below as follows:

Period		Minimum Ratio
Fiscal Year 2003		1.10:1.00
Fiscal Year 2004 and thereafter		1.00:1.00

7. Amendments to Article VII. The provisions of Section 7.01(g) of the Credit Agreement are hereby amended by adding the words “except for any repayment of the Convertible Notes after consummation of the Xxx Transaction” at the beginning thereof.

8. Amendments to Article IX. The provisions of Section 9.02(b)(i) of the Credit Agreement are hereby amended by deleting the number “$225,000,000” and substituting the number “$275,000,000” in its stead.

9. Amendment to Exhibits and Schedules. Exhibit A and Schedules 1.1, 3.05(c)(i), 3.05(c)(ii), 3.06, 3.09, 3.12, 3.13, 6.01, 6.02, 6.04 and 6.07 to the Credit Agreement are replaced as of the Effective Date of the Xxx Related Amendments with a new Exhibit A and new Schedules in the form annexed hereto.

10. Ratification of Loan Documents. Except as provided herein and in any other documents of even date amending the other Loan Documents, all terms and conditions of the Credit Agreement and of the other Loan Documents remain in full force and effect. The Loan Parties each hereby ratify, confirm, and reaffirm all of the representations and warranties contained therein both before and after giving effect to the Xxx Transaction and the other transactions described in Paragraph 5 hereof.

11. Conditions to Effectiveness.

(a) This First Amendment (other than the Xxx Related Amendments) shall not be effective until each of the following conditions precedent have been fulfilled to the satisfaction of the Administrative Agent:

(i) This First Amendment shall have been duly executed and delivered by the respective parties.

(ii) All corporate and shareholder action on the part of the Loan Parties necessary for the valid execution, delivery and performance by the Loan Parties of this First Amendment shall have been duly and effectively taken and evidence thereof satisfactory to the Administrative Agent shall have been provided to the Administrative Agent.

(iii) The Borrower shall have paid the Administrative Agent the fees required under the Fee Letter as amended and restated as of the date hereof.

(iv) No Default or Event of Default shall have occurred and be continuing.

(v) The Loan Parties shall have executed such additional instruments, documents and agreements as the Administrative Agent may reasonably request.

(b) This First Amendment (with respect to the Xxx Related Amendments) shall not be effective until each of the following conditions precedent have been fulfilled to the satisfaction of the Administrative Agent:

(i) The conditions precedent set forth in Paragraph 11(a) shall have been satisfied.

(ii) The Parent shall have executed and delivered a Facility Guarantee to the Administrative Agent.

(iii) The Xxx Transaction shall have been consummated, provided that, this clause (iii) shall be deemed to have been satisfied if, prior to the consummation of the Xxx Transaction, the proceeds of the Senior Subordinated Notes are held in escrow pending the consummation of the Xxx Transaction or are returned to the holders of the Xxx Transaction Financing if the Xxx Transaction is not consummated within 120 days after the date of this First Amendment.

(iv) The instruments, documents and agreements evidencing the Xxx Transaction Financing shall be reasonably satisfactory to the Administrative Agent, it being agreed that such instruments, documents and agreements shall be deemed reasonably satisfactory as long as (i) none of the provisions thereof would violate the representations, covenants and agreements of the Loan Parties under the Credit Agreement and other Loan Documents, after giving effect to the First Amendment, and (ii) the provisions are otherwise materially consistent with the draft documents and agreements previously furnished to the Agent.

(v) The Agents shall have received a solvency opinion from an independent Person reasonably acceptable to the Administrative Agent addressed to the Agents and the other Secured Parties, the form, methodology and results of which are reasonably satisfactory to the Agents in all respects. The Administrative Agent shall not request that such solvency opinion be addressed to any Person other than the Agents and the other Secured Parties.

(vi) The Administrative Agent shall have received an updated favorable legal opinion of the Loan Parties’ counsel addressed to the Agents and the other Secured Parties, in form and substance reasonably satisfactory to the Agents, including without limitation, with respect to the Xxx Transaction.

(vii) No Default or Event of Default shall have occurred and be continuing.

(viii) The Loan Parties shall have executed such additional instruments, documents and agreements as the Administrative Agent may reasonably request.

12. Miscellaneous.

(a) This First Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and

delivered shall be an original, and all of which together shall constitute one instrument.

(b) This First Amendment expresses the entire understanding of the parties with respect to the transactions contemplated hereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof.

(c) Any determination that any provision of this First Amendment or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not effect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provisions of this First Amendment.

(d) The Loan Parties shall pay all costs and expenses of the Agents, including, without limitation, reasonable attorneys’ fees in connection with the preparation, negotiation, execution and delivery of this First Amendment.

(e) The Loan Parties warrant and represent that the Loan Parties have consulted with independent legal counsel of their selection in connection with this First Amendment and are not relying on any representations or warranties of the Agents or the Lenders or their counsel in entering into this First Amendment.

13. Further Assurances. Each Loan Party acknowledges and agrees that (a) it is not and will not be a party to, or a third party beneficiary of, the Intercreditor Agreement, and will not receive any right, benefit, priority or interest under or because of the existence of the Intercreditor Agreement, and (b) it will execute and deliver such additional documents and take such additional action as may be necessary or desirable in the reasonable opinion of the Administrative Agent to effectuate the provisions and purposes of the Intercreditor Agreement.

IN WITNESS WHEREOF, the parties have hereunto caused this First Amendment to be executed and their seals to be hereto affixed as of the date first above written.

	XXXXX XXXXX
	as Borrower
	By:		XXXXX XXXXX INC., its General Partner
	By:		/s/ Xxxxx Xxxxxx
	Name:		Xxxxx Xxxxxx
	Title:		Vice President and Controller

	By:		/s/ Xxxxxxxx X. Xxxxxxx
	Name:		Xxxxxxxx X. Xxxxxxx
	Title:		Vice President

	By:		DRI I INC., its General Partner
	By:		/s/ Xxxxx Xxxxxx
	Name:		Xxxxx Xxxxxx
	Title:		Vice President and Controller

	By:		/s/ Xxxxxxxx X. Xxxxxxx
	Name:		Xxxxxxxx X. Xxxxxxx
	Title:		Vice President

	XXXXX XXXXX INC., as Facility Guarantor
	By:		/s/ Xxxxx Xxxxxx
	Name:		Xxxxx Xxxxxx
	Title:		Vice President and Controller

	By:		/s/ Xxxxxxxx X. Xxxxxxx
	Name:		Xxxxxxxx X. Xxxxxxx
	Title:		Vice President

	DRI I INC., as Facility Guarantor
	By:		/s/ Xxxxx Xxxxxx
	Name:		Xxxxx Xxxxxx
	Title:		Vice President and Controller

	By:		/s/ Xxxxxxxx X. Xxxxxxx
	Name:		Xxxxxxxx X. Xxxxxxx
	Title:		Vice President

	XXXXX XXXXX INTERNATIONAL, INC., as Facility Guarantor
	By:		/s/ Xxxxx Xxxxxx
	Name:		Xxxxx Xxxxxx
	Title:		Vice President and Controller

	By:		/s/ Xxxxxxxx X. Xxxxxxx
	Name:		Xxxxxxxx X. Xxxxxxx
	Title:		Vice President

	XXXXX XXXXX REALTY, INC., as Facility Guarantor
	By:		/s/ Xxxxx Xxxxxx
	Name:		Xxxxx Xxxxxx
	Title:		Vice President and Controller

	By:		/s/ Xxxxxxxx X. Xxxxxxx
	Name:		Xxxxxxxx X. Xxxxxxx
	Title:		Vice President

S-2

	FLEET RETAIL GROUP, INC.,
	As Collateral Agent, as Swingline Lender and as Lender
	By:		/s/ Xxxx Xxxxx
	Name:		Xxxx Xxxxx
	Title:		Managing Director
	Address:
	00 Xxxxx Xxxxxx, 00xx Xxxxx
	Xxxxxx, Xxxxxxxxxxxxx 00000
	Attn: Xxxx Xxxxx
	Telephone: (000) 000-0000
	Telecopy: (000) 000-0000

	FLEET NATIONAL BANK,
	as Administrative Agent and as Issuing Bank
	By:		/s/ Xxxx Xxxxx
	Name:		Xxxx Xxxxx
	Title:		Managing Director
	Address:
	00 Xxxxx Xxxxxx
	Xxxxxx, Xxxxxxxxxxxxx 00000
	Attn: Xxxx Xxxxx
	Telephone: (000) 000-0000
	Telecopy: (000) 000-0000

S-3

	CONGRESS FINANCIAL CORPORATION, as Documentation Agent and Lender
	By:		/s/ Xxxxxx Xxxxxxxxx
	Name:		Xxxxxx Xxxxxxxxx
	Title:		First Vice President
	Address: 1133 Avenue of the Americas
	Telephone: (000) 000-0000
	Telecopy: (000) 000-0000

S-4

	GENERAL ELECTRIC CAPITAL CORPORATION, as Syndication Agent
	and Lender
	By:		/s/ Xxxxx Xxxxxxx
	Name:		Xxxxx Xxxxxxx
	Title:
	Address:
	Telephone:
	Telecopy:

S-5

	THE CIT GROUP/BUSINESS CREDIT, INC., as Lender
	By:		/s/ Xxxxxx Xxxxxx
	Name:		Xxxxxx Xxxxxx
	Title:		Vice President, Team Leader
	Address:
	Telephone:
	Telecopy:

S-6

XXXXX FARGO RETAIL FINANCE, LLC, as Syndication Agent, as Co-Lead Arranger, and as Lender
By: :	/s/ Xxxxx Xxxxxxxxx
Name:	Xxxxx Xxxxxxxxx
Title: :	Vice President
Address: Xxx Xxxxxx Xxxxx, 00^xx Xxxxx
		Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000

S-7

SCHEDULE 3.05(C)(I)

OWNED REAL PROPERTY

Owner		Address (including County)		Mortgage Holders / Lien Holders on Property
Xxxxx Xxxxx		0000 Xxxxxxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx Xxxxxx, XX 00000 Land and Building owned		None

SCHEDULE 3.05(C)(II)

LEASED REAL PROPERTY

137	000 X XXXXXXX XX	XXXXXXXXXXX XX	XXXXX	XXX XXXX
150	000 XXXXXXXX XXXX	XXXXXXXXXX	XXXXX	XXX XXXX
182	000 X 000XX XX	XXXXXXXX	XXXXX	XXX XXXX
196	0000 0XX XXX	X 000XX XX	XXXXX	XXX XXXX
275	0000 X XXXXXXX XXX	XXXXXXXXXXX XXX	XXXXX	XXX XXXX
288	0-00 XXXXXXXXXXX XX	XXXXXX XXX	XXXXX	XXX XXXX
322	0000X XXXXXX XXXX	XXXX XXX	XXXXX	XXX XXXX
347	0000 XXXXXXXXXXX XXX	XXXXX XXX	XXXXX	XXX XXXX
459	00 X XXXXXXX XX	XXXXXX XXX	XXXXX	XXX XXXX
478	0000 XXXXXXXXXXX XXX	XXXXX XXXXXX XX	XXXXX	XXX XXXX
128	000 XXXXXX XX	XXXXXX XXXX	XXXXXXXX	XXX XXXX
144	000 XXXXXX XX	XXXXXXXX XXX	XXXXXXXX	XXX XXXX
147	000 XXXXXXXX	XXXXXX XXX	XXXXXXXX	XXX XXXX
154	00 XXXXX XX	XXXXXXXXX XX	XXXXXXXX	XXX XXXX
167	000 XXXXXXXXXXXXX XXX	XXXXXX XX	XXXXXXXX	XXX XXXX
172	0000 XXXXXXX XXX	XXXXX/XXXXXX XXX	XXXXXXXX	XXX XXXX
178	0000 XXXXXXXX XXXX	XXXXXXXX XXX	XXXXXXXX	XXX XXXX
183	0000 XXXXXX X	X 00XX XX	XXXXXXXX	XXX XXXX
184	000 XXXXXXXX XXX	XXXXXXXX XXX	XXXXXXXX	XXX XXXX
192	0000 XXXXXXXX XXX	XXXXXX X	XXXXXXXX	XXX XXXX
201	0000 XXXXXX X	X 00XX XX	XXXXXXXX	XXX XXXX
211	0000 00XX XXX	00XX XX	XXXXXXXX	XXX XXXX
219	00-00 XXXXX XXX	XXXXXXX XXX	XXXXXXXX	XXX XXXX
234	0000 XXXXXXXX XXX	XXXXX XXXXX	XXXXXXXX	XXX XXXX
277	0000 XXXXXXXXX XX	XXXXXXXXXXX XX	XXXXXXXX	XXX XXXX
000	000-000 XXXXXXXX XXXXX XXX	XXXXX XXXXXXX	XXXXXXXX	XXX XXXX
286	0000 XXXXXXXX XXX	XXXXXX X	XXXXXXXX	XXX XXXX
294	0000 XXXXXXXX XXX	XXXXXXXX XXX	XXXXXXXX	XXX XXXX
298	00 XXXXX XX	XXXXXXXX XX	XXXXXXXX	XXX XXXX
301	000 XXXXX XXXXXXX	0XX XX	XXXXXXXX	XXX XXXX
000	XXX XXXXXX XXX	XXXXXX XXX	XXXXXXXX	XXX XXXX

309	0000 0XX XXX	XXXXXXX XX	XXXXXXXX	XXX XXXX
312	000 XXXXXXXX XXX	XXXXXXXX XXXXX	XXXXXXXX	XXX XXXX
316	0000 XXXXX XXXXXXX	XXXXX XXXXXX XXX	XXXXXXXX	XXX XXXX
331	000-000 XXXXXX XXX	XXXXXX XX	XXXXXXXX	XXX XXXX
342	0000 XXXXXX X	00XX XX	XXXXXXXX	XXX XXXX
349	000 XXX XXXX XXX	XXXXXXXX XXX	XXXXXXXX	XXX XXXX
367	0000 XXXXXX XXXXXX	00^XX XXXXXX	XXXXXXXX	XXX XXXX
444	0000 XXXXX XXX	XXXXXX X	XXXXXXXX	XXX XXXX
464	000 00XX XX	0XX XXX	XXXXXXXX	XXX XXXX
474	0000 XXXXXX X	XXXXXXXX XXX	XXXXXXXX	XXX XXXX
482	0000-00 XXXXX XXX	X 00^XX	XXXXXXXX	XXX XXXX
101	00 XXXXXXXX	XXXXXXXX XXXXX	XXXXXXXXX	XXX XXXX
102	000 XXXXXXXX	XXXX XXX	XXXXXXXXX	XXX XXXX
103	000 XXXX XXX XXXXX	00XX XX	XXXXXXXXX	XXX XXXX
104	000 XXXX XXX XXXXX	00XX XX	XXXXXXXXX	XXX XXXX
105	00 XXXX XX	XXXXXXX XX	XXXXXXXXX	XXX XXXX
106	000 XXXXXXXXX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
108	0000 0XX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
109	000 XXXXXXX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
110	00 XXXX XX	XXXX XX/XXXXX XX	XXXXXXXXX	XXX XXXX
111	0000 XXXXXXXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
112	000 XXXXXXXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX
113	000 X 00^XX XX	XXXXXXXX	XXXXXXXXX	XXX XXXX
115	00 X 00XX XX	XXX 0XX XXX	XXXXXXXXX	XXX XXXX
116	000 X 00XX XX	XXXXXXXXX/ 0XX XXX	XXXXXXXXX	XXX XXXX
117	00 X 00XX XX	XXXXXXX/ XXXX	XXXXXXXXX	XXX XXXX
118	000 XXXXXXXX	XXXXX XX	XXXXXXXXX	XXX XXXX
119	000 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
120	000 0XX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
121	000 X 00XX XX	0XX/0XX XXX	XXXXXXXXX	XXX XXXX
122	000 0XX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
123	000 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
124	0000 XXXXXXXX	00XX XX	XXXXXXXXX	XXX XXXX
125	00 XXXXX XX	XXXXXX XX	XXXXXXXXX	XXX XXXX
126	00 XXXX XX	XXXXX XX	XXXXXXXXX	XXX XXXX

127	00 X 00XX XX	XXXXXXX/ XXXX	XXXXXXXXX	XXX XXXX
129	00 X 00XX XX	XXXXXXX/ XXXX	XXXXXXXXX	XXX XXXX
130	0 XXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX
131	0 XXXXXXXXX	XXXXX XX	XXXXXXXXX	XXX XXXX
132	00 XXXXXX XXXX	XXXXXXXX XX	XXXXXXXXX	XXX XXXX
134	000 X 00XX XX	0XX/ 0XX XXX	XXXXXXXXX	XXX XXXX
138	000 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
139	000 XXXXXXXX	XXXXXXX/XXXXXX	XXXXXXXXX	XXX XXXX
140	000 XXXXXXXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX
143	00 X 00XX XX	XXXXXXXXXX XX	XXXXXXXXX	XXX XXXX
145	0000 0XX XXX	X 00XX XX	XXXXXXXXX	XXX XXXX
146	0000 XXXXXXXX	00XX XX	XXXXXXXXX	XXX XXXX
148	000 X 000XX XX	X. XXXXXXX XXXX	XXXXXXXXX	XXX XXXX
151	1279 3RD AVE	000 X 00XX XX	XXXXXXXXX	XXX XXXX
152	000 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
153	000 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
155	2 PENN XXXXX	00XX XX/ 0XX XXX	XXXXXXXXX	XXX XXXX
156	0000 XXXXXXXX	00XX/ 00XX XX	XXXXXXXXX	XXX XXXX
157	000 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
158	00 X 00XX XX	XXX 0XX XXX	XXXXXXXXX	XXX XXXX
159	000 0XX XXX	XXXXXXX XXXXX	XXXXXXXXX	XXX XXXX
160	00 X 00XX XX	XXX 0XX XXX	XXXXXXXXX	XXX XXXX
162	000 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
164	000 X 00XX XX	0XX XXX	XXXXXXXXX	XXX XXXX
165	000 XXXXXXXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX
166	0000 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
168	1400 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
169	150 X 00XX XX	0XX XXX	XXXXXXXXX	XXX XXXX
173	130 X 00XX XX	XXXXXXXXX XXX	XXXXXXXXX	XXX XXXX
174	40 XXXXXX XX	XXXXX XX	XXXXXXXXX	XXX XXXX
176 *	29-00 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
177	1200 XXXXXXXXX XXX	000XX XX	XXXXXXXXX	XXX XXXX
180	2100 0XX XXX	000XX/000XX XX	XXXXXXXXX	XXX XXXX
181	4 XXXXXXXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX

185	98 XXXXXXXX XX	XXXXXX XX	XXXXXXXXX	XXX XXXX
186	320 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
189	610 X 000XX XX	XX. XXXXXXXX/ XXXXXXXXX XXX	XXXXXXXXX	XXX XXXX
191	1200 XXXXXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX
194	2600-0 XXXXXXXX	000XX XX	XXXXXXXXX	XXX XXXX
197	580 0XX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
200	460 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
202	700 XXXXXXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX
208	2000 XXXXXXXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
209	600 XXXXXXXX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
213	400 XXXXXXXX	XXXXX XX	XXXXXXXXX	XXX XXXX
214	2700-00 XXXXXXXX	000XX XX	XXXXXXXXX	XXX XXXX
217	620 0XX XXX	00XX XXXXXX	XXXXXXXXX	XXX XXXX
221	770 XXXXXXXXX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
223	660 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
224	760 XXXXXXXX	X 0XX XX	XXXXXXXXX	XXX XXXX
225	2800 XXXXXXXX	000XX XX	XXXXXXXXX	XXX XXXX
226	970 XXXXXXXXX XXX	000XX XX	XXXXXXXXX	XXX XXXX
227	1300 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
229	850 0XX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
230	1800 XXXXXXXX	00XX XX	XXXXXXXXX	XXX XXXX
231	2500 XXXXXXXX	00XX XX	XXXXXXXXX	XXX XXXX
232	1400 XXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX
236	1500 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
237	140 XXXXXX XX	XXXXXXXX	XXXXXXXXX	XXX XXXX
238	1100 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
239	720 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
241	1000 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
242	400 X 00XX XX	0XX XXX	XXXXXXXXX	XXX XXXX
243	930 XXXXXXXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX
245	130 X 000XX XX	XXXXXXXXX XXX	XXXXXXXXX	XXX XXXX
246	770 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
247	4 X 0XX XX	XXXXXXXX	XXXXXXXXX	XXX XXXX
253	48-00 X 00XX XX	XXXXXXXX	XXXXXXXXX	XXX XXXX

260	77 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
261	630 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
264	130 XXXXXXX XX	XXXXXX XX	XXXXXXXXX	XXX XXXX
265	120 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
266	250 X 00XX XX	XXXX XXX XXX	XXXXXXXXX	XXX XXXX
270	170 XXXXXXX XX	XXXXXXX XX	XXXXXXXXX	XXX XXXX
272	4 XXXXXXXX XXXXXX	00XX XX	XXXXXXXXX	XXX XXXX
276	1200 XXXXXXXX	00XX XX	XXXXXXXXX	XXX XXXX
281	1200 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
282	1200 0XX XXX	00XX XX	XXXXXXXXX	XXX XXXX
287	660 XXXXXXXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX
289	280 XXXXXXXX	XXXXXXXX XX	XXXXXXXXX	XXX XXXX
290	60 XXXXXXX XXX	00XX XX	XXXXXXXXX	XXX XXXX
291	50 XXXXXX	XXXXX XX	XXXXXXXXX	XXX XXXX
292	1000 XXXXXXXXX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
293	140 X 00XX XX	0XX/0XX XXX	XXXXXXXXX	XXX XXXX
295	230 XXXX XXX	XXXXXXXXXX/00XX XX	XXXXXXXXX	XXX XXXX
311	870 XXXXXXXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
317	1900 0XX XXX	000XX XX	XXXXXXXXX	XXX XXXX
318	300 X 00XX XX	0XX XXX	XXXXXXXXX	XXX XXXX
319	180 X 00XX XX	0XX/0XX XXX	XXXXXXXXX	XXX XXXX
321	1370 AVXXXX XX XXX XXXXXXXX	00XX XX	XXXXXXXXX	XXX XXXX
327	1600 0XX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
329	17 XXXXXXX XXXXX	XXXX XX	XXXXXXXXX	XXX XXXX
335	320 XXXX 000^XX XXXXXX	XXXXXXXXX XXX	XXXXXXXXX	XXX XXXX
338	330 XXXX 000^XX XXXXXX	0^XX XXXXXX	XXXXXXXXX	XXX XXXX
339	120 X 00XX XX	XXXXXXXXX XXX	XXXXXXXXX	XXX XXXX
344	ONE PENN EAXX	00XX XX/0XX XXX	XXXXXXXXX	XXX XXXX
345	460 8TH AVE (ONE PENN WEST)	34XX XX/0XX XXX	XXXXXXXXX	XXX XXXX
346	110 XXXXX XXXXXX	XXXXXXXXX XXXXX	XXXXXXXXX	XXX XXXX
351	1700 0^XX XXXXXX	00^XX XXXXXX	XXXXXXXXX	XXX XXXX
354	190 X 0XX XX	XXXXXX X	XXXXXXXXX	XXX XXXX
361	4000 XXXXXXXX	000^XX XXXXXX	XXXXXXXXX	XXX XXXX
365	2100 XXXXXXXX	XXXX 00^XX XXXXXX	XXXXXXXXX	XXX XXXX

366	2400 XXXXXXXX	XXXX 00^XX XXXXXX	XXXXXXXXX	XXX XXXX
368	930 XXXXX XXXXXX	00^XX XXXXXX	XXXXXXXXX	XXX XXXX
370	1400 XXXXX XXXXXX	00^XX XXXXXX	XXXXXXXXX	XXX XXXX
542	4 XXXXX XXXXXX	XXXXXXXX/0XX XXX	XXXXXXXXX	XXX XXXX
222	600 XXXXXXXX XXX	00XX/00XX XX	XXXXXXXXX	XXX XXXX
193	130 XXXXXXXX XXXX	XXXXXX XXX	XXXXXX	XXX XXXX
240	1500 XXXXX XXXX	XXX XXXX XXXX XX	XXXXXX	XXX XXXX
259	1100 XXXXXXX XXX	XXXXXXXXX XXX	XXXXXX	XXX XXXX
269	1300-00 XXXXXXXX	XXXXXX XXX	XXXXXX	XXX XXXX
284	900 XXXXXXX XX	XXXXXX XX	XXXXXX	XXX XXXX
341	340 XXXXXXXX XXXXXXXX	XXXXXXXXX XXXX	XXXXXX	XXX XXXX
445	4200 XXXXXXXXX XXX	XXXXXXXXXX XX	XXXXXX	XXX XXXX
451	710 XXXXXXXX XXX	XXXXXXXX XX	XXXXXX	XXX XXXX
452	530 XXXXXXX XXXX	XXXXXXXX XX	XXXXXX	XXX XXXX
458	260 X XXXXXXXX	XXXXXXXX XX	XXXXXX	XXX XXXX
467	1400 XXXXXXXXX XXXX	XXXXXX XX	XXXXXX	XXX XXXX
469	5600 XXXXXXX XX	XXXXXXXXX XXXX	XXXXXX	XXX XXXX
441	490 XXXXXXXX XXX	XXXXXXX XXX X	XXXXXX	XXX XXXX
136	700 XXXXX XX	XXXXXXX XX	XXXXXX	XXX XXXXXX
258	170 XXXX XX	XXXX XX	XXXX XXX	XXX XXXXXX
267	11 XXXXXXXXX XXXX XXX	XXXXXXXX	XXXXXXXXX	XXX XXXXXX
283	1500 XXXXXXX XX	XXXXX XXX	XXXXXXX	XXX XXXXXX
303	5 - 8 XXXX XXXXX	XXXXXXX XX	XXXXXX XXXX	XXX XXXXXX
300	XXX XXXXXXX XXX	X XXXXX XX	XXXXXXX	XXX XXXXXX
306	52 XXXXX XXXXX XO	NEXXXXX XXXX	XXXXXX XXXX	XXX XXXXXX
310	320 XXXXXXXXXXX XXXXXX	XXXXXX XXX.	XXXXXX	XXX XXXXXX
315	4901 BERGENLINE	49XX XX	XXXX XXX XXXX	XXX XXXXXX
340	360 XXXXX XXXXXX	XXXXXXXX XXX	XXXXXXXXXX	XXX XXXXXX
343	900 XXXXX XX	XXXXX XX	XXXXXX	XXX XXXXXX
363	3100 XXXXXXX XXXX	00^XX XXXXXX	XXXXX XXXX	XXX XXXXXX
446	510-000 XXXXXXXX	0XX XX	XXXXXXX	XXX XXXXXX
161	3900 XXXX XX	XXXXXXXXX XXX	XXXXXX	XXX XXXX
163	8100 XXXXXXXX	XXXXXX XXX	XXXXXX	XXX XXXX
171	4800 XXXXXX XXXX	00XX XX	XXXXXX	XXX XXXX
179	5700 XXXXXX XXX	XXXXXX XXX	XXXXXX	XXX XXXX

187	60-00 XXXXXXXXX XXX	XXXXXXXX XXX	XXXXXX	XXX XXXX
188	93-00 XXXXXXX XXXX	XXXXXX XXX	XXXXXX	XXX XXXX
198	3700 XXXXXXXX XXXX	XXX 00XX XXX	XXXXXX	XXX XXXX
199	100-00 XXXXXXXXXXX XXX	XXXXXX XX	XXXXXX	XXX XXXX
206	116-02 BEACH CHANNEL DRIVE (ground lease only)	ROCKAWAY FRXX	XXXXXX	XXX XXXX
251	230-00 XXXXXXX XXXX	XXXXXXX XXXXX XXXX	XXXXXX	XXX XXXX
252	160-00 XXXXXXX XXX	000XX XX	XXXXXX	XXX XXXX
255	37-00 00XX XX	00XX XXX	XXXXXX	XXX XXXX
256	249-46 XXXXXX XXXXXXX	MAXXXXXX XXXX	XXXXXX	XXX XXXX
268	24-00 XXXX XXXX	00XX XXX	XXXXXX	XXX XXXX
271	84-00 XXXXXXX XXX	XXXXXX XXXX	XXXXXX	XXX XXXX
314	54-00 XXXXXX XXX	XXXXXXX XXX	XXXXXX	XXX XXXX
325	2800-0000 XXXXXXXX XX	00XX XXX	XXXXXX	XXX XXXX
328	110-00 XXXXXXX XXX	000XX XX	XXXXXX	XXX XXXX
332	51-00 XXXXXXXX XXXX	00XX XX	XXXXXX	XXX XXXX
337	80-00 XXX XXXXXXX XX	XXXXXX XXXX/XXXXX XXX	XXXXXX	XXX XXXX
355	160-00 XXXXXXX XXX	000XX XX	XXXXXX	XXX XXXX
357	113-03 BEACH CHXXXXX XXXXX	XXXXXXXX XXXX	XXXXXX	XXX XXXX
360	100-00 XXXXXXX XXXXXX	000^XX XXXXXX	XXXXXX	XXX XXXX
449	73-00 00XX XXX	00^XX XXXXXX	XXXXXX	XXX XXXX
454	150-00 XXXXXXXX XXXX	XXXXXXXXX XXX	XXXXXX	XXX XXXX
463	42-00 XXXX XX	XXXXXXX XXX	XXXXXX	XXX XXXX
466	66-00 XXXXX XXX	00XX XX	XXXXXX	XXX XXXX
473	250-00 XXXXX XXXX	000XX XX	XXXXXX	XXX XXXX
475	198-15 XXXXXX XXXXXXX EXPY	XXXXXXX XXXXX XXXX	XXXXXX	XXX XXXX
477	95-11 63RD DR	QUXXXX XXXX/ XXXXXXXX XXXX	XXXXXX	XXX XXXX
300	80-00 XXXXXXX XXX	XXXXXXXXX XXXX	XXXXXX	XXX XXXX
299	52 XXXXXXXX XXXXX	X XXXXXXXXX XX	XXXXXXXX	XXX XXXX
207	4300 XXXXX XXXX	XXXXXXXX XXX	XXXXXX XXXXXX	XXX XXXX
278	1700 XXXXXXX XXXX	XXXXX XX	XXXXXX XXXXXX	XXX XXXX
279	3283 RICHMOND AVE	ARXXXX XXXX XX	XXXXXX XXXXXX	XXX XXXX
280	630 XXXXXX XXX	XXXXX XXX	XXXXXX XXXXXX	XXX XXXX
302	1000 XXXXXXXXX XXX	XXXXXXX XX	XXXXXX XXXXXX	XXX XXXX

334	2100 XXXXXXXX XXXX	XXXXXXX XXXXXX	XXXXXX XXXXXX	XXX XXXX	00000
336	2100 XXXXX XXXX	XXXXXXX XXX	XXXXXX XXXXXX	XXX XXXX	00000
352	31-00 XXXXX XX	XXXXXX XXX	XXXXXX XXXXXX	XXX XXXX	00000
455	2456 RICHMOND AVE	RIXXXXXX XXXX XXXX	XXXXXX XXXXXX	XXX XXXX	00000
479	1400 XXXXXX XXX	XXXXXXXXXXX XX	XXXXXX XXXXXX	XXX XXXX	00000
257	1300-00 XXXXX XXXXX XX	XXXXXXXXX XXX	XXXXXXX	XXX XXXX	00000
456	1800 XXXXXXX XXX	XXXXXXXXX XX	XXXXXXX	XXX XXXX	00000
460	380 X XXXXXXX XXX	XXXXXXX XXX	XXXXXXX	XXX XXXX	00000
204	670 XXXXXX XXX	XXXX XXXXXX XX	XXXXXXXXXXX	XXX XXXX	00000
205	42 X XXXXX XX	XXXXXXXXX XXX	XXXXXXXXXXX	XXX XXXX	00000
273	870 XXXXXX XXX	XXXXXXX XXX	XXXXXXXXXXX	XXX XXXX	00000
274	1 X XXXXXXX XXX	X XXXXXXXXX XXX	XXXXXXXXXXX	XXX XXXX	00000
448	100 XXXXXXXXXX XXX	XXXXXXXXX XX	XXXXXXXXXXX	XXX XXXX	00000
453	420 XXXXXX XXXX XX	XXXX XX	XXXXXXXXXXX	XXX XXXX	00000
461	2500 XXXXXXX XXXX XXX	XXXX XXXX XXX	XXXXXXXXXXX	XXX XXXX	00000
920(1)	50-00 00^XX XXX		XXXXXX	XXX XXXX	00000
926	22-00 00^XX XXXXXX		XXXXX XXXXXX	XXX XXXXXX	00000
270R	188-192 XXXXXXX STREET		MANHATTAN	NEW YORK
297	900 8^TH AVENUE		MANHATTAN	NEW YORK
326	1213 CLOVE ROAD		STATEN ISLAND	NEW YORK
333	153-01 JAMAICA AVENUE		JAMAICA	NEW YORK
353	1265 BOSTON POST ROAD		LARCHMONT	NEW YORK
358	204-19 HILLSIDE AVENUE		QUEENS	NEW YORK
359	180-202 XXXXXX AVENUE		YONKERS	NEW YORK
362	2-6 MIDLAND AVENUE		NYACK	NEW YORK
364	178-20 HILLSIDE AVENUE		QUEENS	NEW YORK
369	1490 MADISON AVENUE		MANHATTAN	NEW YORK
371	1650 GRAND CONCOURSE		BRONX	NEW YORK
524	1627 BROADWAY		MANHATTAN	NEW YORK
TBD	250 WEST 57^TH STREET		MANHATTAN	NEW YORK

(1) Xxxxx Xxxxx has been notified that approximately 94,000 sq. feet of the total plot of 590,000 sq. ft. may be subject to a condemnation proceeding by the NY Fire Department. The entire affected area is the parking lot (not the building). These proceedings are not actively being pursued by the NY Fire Department at this time (and nothing has happened for over two years), but there can be no assurance as to the outcome of this proceeding if it is ever instituted. Xxxxx Xxxxx will be able to find alternate warehouse space, if necessary.

* includes 02/23/04 acquisition of Mayfair Chemists, located at 21 0^xx Xxxxxx & 00xx Xxxxxx.

SCHEDULE 3.06

DISCLOSED MATTERS

1. Xxxxx Xxxxx Inc., Securities Litigation, U.S.D.C. S.D.N.Y. Case No. 1:02 CV 6478 (NRB). Class action suits on behalf of shareholders who purchased common stock between April 1, 2002 and July 24, 2002, inclusive, alleging violation of federal securities laws. The complaint alleges that Xxxxx Xxxxx Inc. violated the federal securities laws by issuing materially false and misleading statements during the class period. On December 1, 2003, the district judge granted Xxxxx Xxxxx Inc.’s motion to dismiss the plaintiffs’ action, with prejudice. The plaintiffs have appealed the decision.

2. Ansoumana v. Gristedes, U.S.D.C. S.D.N.Y. Case No. 00-CV-0253 (ADH)(DFE). Xxxxx Xxxxx Inc. is a defendant in a class action suit regarding alleged violations of the Fair Labor Standards Act as to a group of individuals who provided delivery services on a contract basis to Xxxxx Xxxxx Inc. In December 2002, the judge in the action issued a partial summary judgment in favor of a subclass of the plaintiffs and against Xxxxx Xxxxx Inc. In December 2003, Xxxxx Xxxxx settled the issue of the amount of liability to the plaintiffs without any admission of wrongdoing and in an amount consistent with Xxxxx Xxxxx’x previously established reserves. The amount of attorney’s fees owed to the plaintiffs’ attorneys remains an open issue in the case.

3. Disabled in Action of Metropolitan New York, Inc. v. Xxxxx Xxxxx, U.S.D.C. S.D.N.Y. Case No. 01-CV-4692 (WHP). Xxxxx Xxxxx Inc. is the defendant in a suit for alleged violations of the Americans with Disabilities Act (“ADA”). Settlement discussions are active. However, it is likely at this stage that a portion of the case will be litigated as the parties have been unable to reach agreement as the requirements of the ADA with respect to two issues.

4. Cardinal Health Litigation. Xxxxx Xxxxx Inc. is involved in an ongoing dispute with Cardinal Health, a former supplier of pharmaceutical products. Both parties have claims against the other involving, among other claims, breach of contract, promissory estoppel and unjust enrichment. Xxxxx Xxxxx Inc. is seeking from Cardinal an unspecified amount of damages and punitive damages of at least $20 million. Cardinal is seeking approximately $18 million in damages plus attorney’s fees and interest. Non-party discovery in the case has concluded and it is expected to go to trial some time in late 2004 or 2005.

5. Xxxxxx Xxxxx, et al. v. Xxxxx Xxxxx, NY, NY et al., 00 Civ. 9841 et al. Trustees of several union benefit funds have brought suit alleging that Xxxxx Xxxxx Inc. did not make certain required contributions to these funds from January 2000 through August 2001. The plaintiffs have recently filed a motion seeking summary judgment of $2.29 million of claims for alleged understanding and related penalties and interest. In addition, at various times, the plaintiffs have stated that they believe Xxxxx Xxxxx Inc. may owe additional amounts. However, any additional amounts that the plaintiffs may claim are not known at this time. Xxxxx Xxxxx has filed a motion opposing these claims.

6. Allied Trades Council Dispute. Xxxxx Xxxxx Inc. is party to an NLRB administrative proceeding regarding a dispute with the Allied Trades Council over whether a negotiating impasse was reached between Xxxxx Xxxxx Inc. and the union in 2001. The Allied Trades Council represents employees in 139 Xxxxx Xxxxx stores and was party to a collective bargaining agreement that had an expiration date of August 31, 2001. The bargaining over a new term for the collective bargaining agreement was not successful, and upon declaring impasses at different times, the company unilaterally made changes in certain terms and conditions of employment. On February 18, 2004, an administrative law judge (ALJ) who had reviewed various matters related to this proceeding issued a decision and related recommendations, which concluded that the parties were not at impasse. The remedies recommended by the ALJ included, among other things, a requirement that Xxxxx Xxxxx Inc. make its employees whole by reimbursing them for expenses ensuing from the company’s failure to make contributions to certain union funds and to make such funds whole, plus interest. If this recommendation is adopted by the full NLRB and enforced by a circuit court of appeals, it could result in Xxxxx Xxxxx Inc. being required to contribute amounts that have yet to be determined into the union’s pension benefit, health and welfare and vacation funds. Any potential required contributions resulting from a final judicial determination of this matter would potentially be subject to offset by a portion of the amounts that Xxxxx Xxxxx Inc. had paid for similar benefits provided to employees represented by the Allied Trades Council. Because this is just the first phase of a long and complicated administrative process likely to be followed by a judicial review of the NLRB findings, the final outcome cannot be reliably determined at this time. The ALJ’s recommendation is not a binding order and has no force and effect of law. Rather, it is a recommendation to the full NLRB in Washington, D.C., which will conduct a review at some point in the future and decide to uphold, reject or modify the recommendation. The full NLRB decision is also subject to judicial review by a circuit court of appeals and a compliance hearing before any financial remedy can be determined with specificity. Xxxxx Xxxxx Inc. recorded a pre-tax charge of $12.6 million for the year ended December 27, 2003 and an additional pre-tax charge of $1.1 million in the quarter ended March 27, 2004. These charges represent Xxxxx Xxxxx Inc.’s current best estimate of the loss that would result upon application of the ALJ’s recommendation. Xxxxx Xxxxx Inc. notes that such charge is based upon the facts available to it at the time and such charges could be subject to significant modification in the future, upon review by the full NLRB, the Federal Circuit of Appeals and completion of a compliance hearing and any appeals relating to the outcome of that hearing. These charges reflect the amount of contributions that Xxxxx Xxxxx Inc. did not make into the vacation benefit funds for the period from July 1, 2001 through March 27, 2004, and the amount of contributions that Xxxxx Xxxxx Inc. did not make into the pension and health and welfare funds from the August 31, 2001 expiration of the contract through March 27, 2004, with the combined amounts reduced by a portion of the benefits Xxxxx Xxxxx Inc. paid directly to or for the benefit of these employees over the same periods. They also include an interest cost for these net contributions from the date they would have been paid until March 27, 2004.

7. Litigation Relating to the Xxx Transaction. Xxxxx Xxxxx Inc. is aware of six purported class action complaints challenging the Xxx Transaction that have been filed in the Court of Chancery of the State of Delaware (the “Delaware Complaints”), and three purported

class action complaints that have been filed in the Supreme Court of the State of New York (the “New York Complaints”). Two of the New York Complaints have been voluntarily dismissed without prejudice. Both the Delaware Complaints and the New York Complaints named Xx. Xxxxxxx Xxxx and certain other members of the board of directors of Xxxxx Xxxxx Inc., certain executive officers and Xxxxx Xxxxx Inc. as defendants. Four of the Delaware Complaints name Oak Hill Capital Partners, L.P. as a defendant. One of the dismissed New York Complaints named Oak Hill Capital Partners, L.P. as a defendant. The Delaware Complaints were consolidated on January 28, 2004, and on April 8, 2004 the plaintiffs in the Delaware actions filed a consolidated class action complaint. The consolidated complaint alleges that defendants failed to disclose material information in the preliminary proxy statement, which was filed with the SEC on March 19, 2004.

Plaintiffs seek, among other things, an order that the complaints are properly maintainable as a class action, a declaration that defendants have breached their fiduciary duties and other duties, injunctive relief, an unspecified amount of monetary damages, attorneys’ fees, costs and expenses and any such other and further relief as the court may deem just and proper. Xxxxx Xxxxx Inc. has received a letter, dated June 14, 2004, from co-lead counsel for the plaintiffs in the stockholder litigation relating to the transaction expressing “substantial concern” over Oak Hill’s proposal, which was announced in a press release on June 14, 2004, to reduce the per share price set forth in the original merger agreement from $17.00 to $16.00.

ENVIRONMENTAL

None.

MATERIAL ACTIONS

None.

SCHEDULE 3.09

TAXES

Loan Party		Description		Taxing Jurisdiction
Xxxxx Xxxxx Inc.		Audit of NYS Franchise Tax Returns of Xxxxx Xxxxx Inc. for the years ending 12/27/97, 12/25/99 and 12/30/00		New York State Department of Taxation and Finance

Recent New York State tax rulings may require Xxxxx Xxxxx Inc. to provide reserves for periods prior to 2003. However, such reserves are not expected to exceed $5.0 million or to have any short term cash flow impact due to applicable prior period carry forward losses.

On July 14, 2004, the Company settled this audit in the amount of $142,478, including additional taxes of $113,950 attributable to the reallocation of subsidiary capital and $28,528 of accumulated interest. The Company also agreed to relinquish $5.0 million of the existing Net Operating Loss (NOL) carryforward. Although these years technically remain open until the associated NOL’s are entirely consumed, it is unlikely that New York State, having agreed to the audit settlement, will revisit these periods.

SCHEDULE 3.12

SUBSIDIARIES

Xxxxx Xxxxx Inc., the consolidated parent company, maintains a 100% ownership interest in DRI I Inc., Xxxxx Xxxxx Realty, Inc. and Xxxxx Xxxxx International, Inc. Xxxxx Xxxxx Inc. also has a 99% ownership interest in Xxxxx Xxxxx, a New York General Partnership. The remaining 1% interest in the Xxxxx Xxxxx General Partnership is owned by DRI I Inc. After closing of the Xxx Transaction, Xxxxx Xxxxx Holdings, Inc. will have a 100% ownership interest in Xxxxx Xxxxx Inc.

SCHEDULE 3.13

INSURANCE

Insurance Maintained By or on Behalf of Loan Parties and Subsidiaries

Coverage	Insurance Provider	Policy Number	Coverage Limit	Current Insurance Premium		Policy Period

NY Workers Comp	The State Ins. Fund	G 1051 293-7	Fixed Dollar	$	1,550,504	3/1/04 – 2/28/05

NJ Workers Comp	AIG/Granite State Ins. Co.	WC 00816625900	Fixed Dollar	$	56,483	8/1/03 – 7/31/04

Property/Boiler	FM Global / Commonwealth	Various Layers	$150 Million - $500,000 SIR	$	1,497,500	10/1/03 – 9/30/04

Auto	Zurich	BAP 2984069-03	G/L & Coll. - $100,000 SIR	$	240,678	10/1/03 – 9/30/04

Umbrella	National Union / Gtr. Amer. / St. Xxxx	AIG – BE 2977853 Gtr. Amer. – TUE 3567566 04 St. Xxxx – Q1 01090008660	$100 Million - $10,000 SIR	$	1,125,000	10/1/03 – 9/30/04

D&O	National Union Fire / Axis / Ace	AIG – 000-00-00 Axis – XXX 0054 Ace – DOX G21658236001	$50 Million - $2,500,000 SIR	$	1,304,800	5/9/04 – 8/9/04

Crime	Nat’l Union	000-00-00	$1 Million - $50,000 SIR	$	10,067	10/1/03 – 9/30/04

Coverage	Insurance Provider	Policy Number	Coverage Limit	Current Insurance Premium		Policy Period

General Liability	Zurich	GLO 2984070-03	$15 Million - $250,000 SIR/CLAIM	$	879,315	10/1/03 – 9/30/04

SIR = Self Insured Retention

SCHEDULE 3.14

LABOR MATTERS

Reference is made to item 6 of Schedule 3.06.

SCHEDULE 3.16(B)

FEDERAL RESERVE REGULATIONS

A portion of the proceeds of the Loans may be used to repay indebtedness under the Convertible Indenture.

SCHEDULE 6.01

INDEBTEDNESS

Xxxxx Xxxxx 2.1478% Senior Convertible Notes due 2022 in the outstanding amount of $201,031,887.

Capital Lease between Xxxxx Xxxxx Inc. and IBM Credit Corporation, dated March 22, 2002.

SCHEDULE 6.02

LIENS

Record of UCC Filings Found in Each Search:

Filing

Secured Party
Name

Debtor Name

Filing
Jurisdiction

Record
Date

File #

Related
UCC-1 File #

Description

UCC1

Matrix Funding Corporation

Rock Bottom Stores, Inc.

NY SoS

07/07/97

139656

—

IBM Point of Sale equipment-Funding Agreement 10/14/96

UCC3

Matrix Funding Corporation

Rock Bottom Stores, Inc.

NY SoS

11/24/97

242625

139656

Amendment- original property description deleted & new description of IBM Sale Equip. added

UCC3

Matrix Funding Corporation

Rock Bottom Stores, Inc.

NY SoS

11/26/97

244505

139656

Assignment to Lyon Credit Corporation

UCC3

Lyon Credit Corporation

Rock Bottom Stores, Inc.

NY SoS

04/24/00

081081

139656

Assignment to Xxxxxx United Bank

UCC3

Xxxxxx United Bank

Rock Bottom Stores, Inc.

NY SoS

05/11/00

093800

139656

Amendment—Debtor name change to: Xxxxx Xxxxx, Inc.

UCC3

Xxxxxx United Bank

Xxxxx Xxxxx, Inc.

NY SoS

04/03/02

076643

139656

Continuation

UCC1

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

05/14/99

096353

—

Equipment—Master Lease #37625, Schedule #39998

UCC3

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

07/23/99

147577

096353

Amendment-No change to collateral. Addition of new serial numbers Master Lease #37625 Sched. #39997

UCC1

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

05/14/99

096355

—

Equipment—Master Lease #37625, Schedule #39997

UCC3

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

09/02/99

177583

096355

Amendment-no change to collateral. Addition of new serial numbers Master Lease #37625, Sched. #39997

UCC1

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

05/17/99

097434

—

Equipment—Lease #40045

UCC1

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

07/01/99

131468

—

Equipment—Lease #40169

UCC1

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

07/01/99

131470

—

Equipment—Master Lease #37625, Schedule #40168

UCC1

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

08/12/99

162511

—

Equipment—Master Lease #37625, Schedule #40279

UCC1

El Camino Resources, Ltd.

Xxxxx Xxxxx

NY SoS

09/03/99

178286

—

Equipment—Master Lease #4045, Schedule #001

UCC1

FINOVA Capital Corporation

Xxxxx Xxxxx

NY SoS

11/03/99

222085

—

Equipment—RVA#3428

UCC3

Bergen Xxxxxxxx Drug Company, as Consignor

Xxxxx Xxxxx

NY SoS

07/25/00

144827

231476

Assignment to: The Chase Manhattan Bank

UCC1

Bergen Xxxxxxxx Drug Company, as Consignor

Xxxxx Xxxxx, Inc.

NY SoS

11/16/99

231481

—

All prescription pharmaceutical products, insulin & syringes

UCC3

Bergen Xxxxxxxx Drug Company, as Consignor

Xxxxx Xxxxx

NY SoS

07/25/00

144840

231481

Assignment to: The Chase Manhattan Bank

UCC1

FINOVA Capital Corporation

Xxxxx Xxxxx Inc.

NY SoS

12/28/99

260226

—

Equipment-all replacement parts, accessions & subsititutions #C0885003

UCC1

FINOVA Capital Corporation

Xxxxx Xxxxx, Inc.

NY SoS

12/28/99

260230

—

Equipment-all replacement parts, accessions & subsititutions #C0885004

UCC1

Bergen Xxxxxxxx Drug Company, as Consignor

Xxxxx Xxxxx, Inc.

NY SoS

01/05/00

002803

—

All prescription pharmaceutical products, insulin & syringes

UCC1

Bergen Xxxxxxxx Drug Company, as Consignor

Xxxxx Xxxxx, Inc.

NY SoS

01/05/00

003065

—

All prescription pharmaceutical products, insulin & syringes

UCC1

FINOVA Capital Corporation

Xxxxx Xxxxx

NY SoS

02/24/00

037585

—

Equipment-all replacement parts, accessions & subsititutions #C0885005

UCC1

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

04/27/00

083598

—

Equipment—Master Lease #37625, Schedule #40890

UCC1

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

06/09/00

114397

—

Equipment—Master Lease #37625, Schedule #40960

UCC3

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

06/28/00

127069

114397

Amendment-no change to collateral. Addition of new serial numbers Master Lease #37625 Sched. #40960

UCC1

Crown Credit Company

Xxxxx Xxxxx

NY SoS

07/06/00

131963

—

Crown Lift Trucks

UCC1

Crown Credit Company

Xxxxx Xxxxx

NY SoS

07/06/00

131964

—

Crown Lift Trucks

UCC1

De Xxxx Xxxxxx Financial

Xxxxx Xxxxx, Inc.

NY SoS

07/28/00

147798

—

Equipment—Contract #24350027

UCC1

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

08/10/00

156271

—

Equipment—Master Lease #37625, Schedule #41135

UCC3

Orix USA Corporation

Xxxxx Xxxxx

NY SoS

09/08/00

174691

156271

Amendment-no change to collateral. Addition of new serial numbers Master Lease #37625 Sched. #41135

UCC1

IBM Credit Corporation

Xxxxx Xxxxx Inc

NY SoS

12/27/00

247750

—

All computer, information processing equipment—Supplement #914477 12/01/00

UCC1

IBM Credit Corporation

Xxxxx Xxxxx Inc

NY SoS

01/25/01

018314

—

All computer, information processing equipment—Supplement #909186 11/21/00

UCC1

Orix USA Corporation

Xxxxx Xxxxx, Inc.

NY SoS

02/06/01

025690

—

Equipment—Master Lease #37625, Schedule #41597

UCC3

Orix USA Corporation

Xxxxx Xxxxx, Inc.

NY SoS

04/13/01

072541

025690

Amendment-No change in collateral. New Serial Numbers added.

UCC1

Orix USA Corporation

Xxxxx Xxxxx, Inc.

NY SoS

02/06/01

025692

—

Equipment—Master Lease #37625, Schedule #41598

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032846

—

Equipment—Master Lease #1409-10

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032852

—

Equipment—Master Lease #1409-10 Schedule 003

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032855

—

Equipment—Master Lease #1409-10 Schedule 004

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032856

—

Equipment—Master Lease #1409-10 Schedule 005

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032858

—

Equipment—Master Lease #1409-10 Schedule 006

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032861

—

Equipment—Master Lease #1409-10 Schedule 007

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032863

—

Equipment—Master Lease #1409-10 Schedule 008

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032864

—

Equipment—Master Lease #1409-10 Schedule 009

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032865

—

Equipment—Master Lease #1409-10 Schedule 010

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032867

—

Equipment—Master Lease #1409-10 Schedule 011

UCC1

Delphi Energy Fund, Inc. (Assignee—CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032868

—

Equipment—Master Lease #1409-10 Schedule 012

UCC1

Delphi Energy Fund, Inc. (Assignee-CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032869

—

Equipment—Master Lease #1409-10 Schedule 014

UCC1

Delphi Energy Fund, Inc. (Assignee-CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032870

—

Equipment—Master Lease #1409-10 Schedule 016

UCC1

Delphi Energy Fund, Inc. (Assignee-CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032872

—

Equipment—Master Lease #1409-10 Schedule 017

UCC1

Delphi Energy Fund, Inc. (Assignee-CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032873

—

Equipment—Master Lease #1409-10 Schedule 018

UCC1

Delphi Energy Fund, Inc. (Assignee-CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032874

—

Equipment—Master Lease #1409-10 Schedule 019

UCC1

Delphi Energy Fund, Inc. (Assignee-CIT)

Xxxxx Xxxxx Inc.

NY SoS

02/15/01

032875

—

Equipment—Master Lease #1409-10 Schedule 020

UCC1

Crown Credit Corporation

Xxxxx Xxxxx Inc.

NY SoS

03/08/01

045904

—

Crown Lift Trucks

UCC1

Crown Credit Corporation

Xxxxx Xxxxx Inc.

NY SoS

04/06/01

067100

—

Crown Lift Truck

UCC1

IBM Credit Corporation

Xxxxx Xxxxx Inc

NY SoS

04/25/01

080587

—

All computer, information processing equipment—Supplement #955641 03/27/01

UCC1

Imaging Financial Service, Inc.

Xxxxx Xxxxx, Inc.

NY SoS

05/09/01

090626

—

Kodak Picture Maker Units & accessories

UCC1

Colonial Pacific Leasing

Xxxxx Xxxxx Inc.

NY SoS

05/24/01

101763

—

Gretag masterflex digital camera module software, etc

UCC1

Colonial Pacific Leasing

Xxxxx Xxxxx Inc.

NY SoS

05/24/01

101764

—

Gretag masterflex digital camera module software, etc

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx, Inc.

NY SoS

01/04/02

002620

—

Equipment—Master Lease #37625, Schedule #41650

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

02/25/02

045582

—

Equipment-Film along with cash and noncash proceeds

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

02/25/02

045726

—

Gretag equipment

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

02/25/02

045753

—

Equipment-Film along with cash and noncash proceeds

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

02/27/02

047365

—

Equipment-all replacement parts, accessions & subsititutions

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

03/18/02

063337

—

Gretag equipment

UCC1

General Electric Capital Corporation

Xxxxx Xxxxx Inc.

NY SoS

04/30/02

099949

—

Gretag equipment

UCC1

Xxxxxxx Financial Services

Xxxxx Xxxxx Inc.

NY SoS

05/21/02

117870

—

Xxxxxxx Model 8300 Sweeper/Scrubber

UCC1

General Electric Capital Corporation

Xxxxx Xxxxx Inc.

NY SoS

05/23/02

119837

—

Gretag equipment

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

12/19/02

200212192
818827

—

Gretag masterflex digital minilabs

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

02/04/03

200302040
255667

—

Equipment-Printer along with cash and noncash proceeds

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

02/27/03

200302270
438954

—

Fuji frontier mini lab

UCC3

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

10/30/03

200310301
793381

20030227043
8954

Amendment-No change to collateral. Addition of new serial numbers

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

02/27/03

200302270
438978

—

Fuji frontier mini lab

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

02/27/03

200302270
438992

—

Fuji frontier mini lab

UCC3

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

06/04/03

200306041
111991

20030227043
8992

Amendment-No change in collateral Description. Added film equipment

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

03/13/03

200303130
556553

—

Fuji frontier mini lab

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

03/18/03

200303180
592319

—

Fuji frontier mini lab

UCC3

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

06/04/03

200306041
111977

20030318059
2319

Amendment-No change to collateral. Addition of new serial numbers.

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

04/17/03

200304170
834488

—

Fuji frontier mini lab

UCC3

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

06/04/03

200306041
111941

20030417083
4488

Amendment-No change to collateral. Addition of new serial numbers.

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

07/03/03

200307031
274399

—

Fuji frontier mini lab

UCC3

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

07/21/03

200307211
358547

20030703127
4399

Amendment-no change to collateral. Addition of new serial numbers.

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

07/23/03

200307231
369760

—

Fuji frontier mini lab

UCC1

Key Equipment Finance, a Division of Key Corporate Capital Inc.

Xxxxx Xxxxx, Inc.

NY SoS

07/25/03

200307251
378573

—

All right, title & interest in & to Master Flex Digital 1008

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

10/10/03

200310101
706158

—

Fuji frontier mini lab

UCC3

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

11/10/03

200311101
834997

20031010170
6158

Amendment-No change to collateral. Addition of new serial numbers.

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

11/25/03

200311251
900189

—

Fuji frontier mini lab

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

12/01/03

200312011
917201

—

Fuji frontier mini lab

UCC3

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

12/22/03

200312222
005291

20031201191
7201

Amendment-No change to collateral. Addition of new serial numbers.

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NY SoS

12/10/03

200312101
956187

—

Fuji frontier mini lab

UCC1

FINOVA Capital Corporation

Xxxxx Xxxxx Inc.

Richmond County, NY

02/25/00

0000-000

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NJ Dept. of Treasury Commercial Recording

02/26/02

20896072

—

Gretag equipment

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NJ Dept. of Treasury Commercial Recording

12/18/02

21355677

—

Gretag masterflex digital minilabs

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NJ Dept. of Treasury Commercial Recording

02/04/03

21419546

—

Equipment-Printer along with cash and noncash proceeds

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NJ Dept. of Treasury Commercial Recording

02/24/03

21446733

—

Fuji frontier mini lab

UCC3

Orix Financial Services, Inc.

Xxxxx Xxxxx

NJ Dept. of Treasury Commercial Recording

09/03/03

21446733

Amendment-No change to collateral. Addition of new serial numbers.

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

NJ Dept. of Treasury Commercial Recording

12/01/03

21907357

—

Fuji frontier mini lab

UCC3

Orix Financial Services, Inc.

Xxxxx Xxxxx

NJ Dept. of Treasury Commercial Recording

12/26/03

21907357

Amendment-No change to collateral. Addition of new serial numbers.

UCC1

FINOVA Capital Corporation

Xxxxx Xxxxx Inc.

NJ Dept. of Treasury Commercial Recording

04/15/99

1900450

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

Bergen Xxxxxxxx Drug Company, as Consignor

Xxxxx Xxxxx, Inc.

NJ Dept. of Treasury Commercial Recording

11/16/99

1941416

—

All prescription pharmaceutical products, insulin & syringes

UCC3

Bergen Xxxxxxxx Drug Company, as Consignor

Xxxxx Xxxxx, Inc.

NJ Dept. of Treasury Commercial Recording

07/25/00

1941416

Assignment to: The Chase Manhattan Bank

UCC1

Bergen Xxxxxxxx Drug Company, as Consignor

Xxxxx Xxxxx, Inc.

NJ Dept. of Treasury Commercial Recording

11/16/99

1941417

—

All prescription pharmaceutical products, insulin & syringes

UCC3

Bergen Xxxxxxxx Drug Company, as Consignor

Xxxxx Xxxxx, Inc.

NJ Dept. of Treasury Commercial Recording

07/25/00

1941417

Assignment to: The Chase Manhattan Bank

UCC1

FINOVA Capital Corporation

Xxxxx Xxxxx Inc.

DE SoS

02/24/00

0011253

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds #C0885005

UCC1

Crown Credit Company

Xxxxx Xxxxx Inc.

DE SoS

07/11/01

10670708

—

Crown Lift Truck

UCC1

Crown Credit Company

Xxxxx Xxxxx Inc.

DE SoS

07/11/01

10670757

—

Crown Lift Trucks

UCC1

GE Capital Colonial Pacific Leasing

Xxxxx Xxxxx, Inc.

DE SoS

07/19/01

10734660

—

Masterflex digital 1008 photo processing machine

UCC1

GE Capital Colonial Pacific Leasing

Xxxxx Xxxxx, Inc.

DE SoS

07/20/01

10762133

—

Masterflex digital 1008 photo processing machine

UCC1

GE Capital Colonial Pacific Leasing

Xxxxx Xxxxx, Inc.

DE SoS

08/01/01

10841861

—

Masterflex digital 1008 photo processing machine

UCC1

Crown Credit Company

Xxxxx Xxxxx Inc.

DE SoS

10/03/01

11304208

—

Crown Lift Trucks

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

DE SoS

10/11/01

11371603

—

Equipment-under lease # 42144

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx

DE SoS

10/11/01

11372080

—

Equipment-under lease #42145

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx Inc.

DE SoS

10/19/01

11441240

—

Equipment-under lease #42188

UCC1

Crown Credit Company

Xxxxx Xxxxx, Inc.

DE SoS

11/05/01

11606164

—

Crown Lift Truck

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx, Inc.

DE SoS

11/09/01

11648554

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx Inc.

DE SoS

11/09/01

11648836

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx Inc.

DE SoS

12/20/01

20170781

—

Gretag masterflex digital minilab model

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx Inc.

DE SoS

12/20/01

20170815

—

Gretag masterflex digital minilab model

UCC1

Delphi Energy Fund, Inc.

Xxxxx Xxxxx Inc.

DE SoS

02/14/02

20402168

—

Goods & equipment—Lease No. 1409-10, Schedule 028

UCC1

Xxxxx and Company

Xxxxx Xxxxx Inc.

DE SoS

02/20/02

20444921

—

Goods & equipment—Lease No. 1409-10, Schedule 029

UCC1

Xxxxx and Company

Xxxxx Xxxxx Inc.

DE SoS

02/20/02

20445142

—

Goods & equipment—Lease No. 1409-10, Schedule 030

UCC1

Xxxxx and Company

Xxxxx Xxxxx Inc.

DE SoS

02/20/02

20445720

—

Goods & equipment—Lease No. 1409-10, Schedule 031

UCC1

Xxxxx and Company

Xxxxx Xxxxx Inc.

DE SoS

02/20/02

20446454

—

Goods & equipment—Lease No. 1409-10, Schedule 033

UCC1

Xxxxx and Company

Xxxxx Xxxxx Inc.

DE SoS

02/20/02

20446652

—

Goods & equipment—Lease No. 1409-10, Schedule 034

UCC1

Xxxxx and Company

Xxxxx Xxxxx Inc.

DE SoS

02/20/02

20446868

—

Goods & equipment—Lease No. 1409-10, Schedule 035

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx, Inc.

DE SoS

02/15/02

20614358

—

Gretag equipment

UCC3

Orix Financial Services, Inc.

Xxxxx Xxxxx, Inc.

DE SoS

06/17/02

21728595

20614358

Amendment—Debtor name change to: Xxxxx Xxxxx

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx, Inc.

DE SoS

02/25/02

20680664

—

Equipment-Film Tools

UCC1

Orix Financial Services, Inc.

Xxxxx Xxxxx, Inc.

DE SoS

02/25/02

20680714

—

Equipment-Film Tools

UCC1

Crown Credit Company

Xxxxx Xxxxx, Inc.

DE SoS

02/26/02

20681365

—

Crown Lift Trucks

UCC1

Bank of the West

Xxxxx Xxxxx Inc.

DE SoS

03/19/02

20702567

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 001

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20702781

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 002

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20703128

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 003

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20703458

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 004

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20703656

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 005

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20703755

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 006

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20703904

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 007

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20704209

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 008

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20704530

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 009

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20704738

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 010

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20704944

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 011

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20705396

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 012

UCC1

Bank of the West

Duane Reade Inc.

DE SoS

03/19/02

20705644

—

Equipment, general intangibles—Master Lease Agreement 1423-10, Schedule 014

UCC1

Orix Financial Services, Inc.

Duane Reade, Inc.

DE SoS

03/18/02

20886295

—

Gretag equipment

UCC1

Allen and Company

Duane Reade Inc.

DE SoS

04/30/02

21068869

—

Goods & equipment—Lease No. 1426-10, Schedule 001

UCC1

Allen and Company

Duane Reade Inc.

DE SoS

04/30/02

21068919

—

Goods & equipment—Lease No. 1426-10, Schedule 002

UCC1

Allen and Company

Duane Reade Inc.

DE SoS

04/30/02

21068976

—

Goods & equipment—Lease No. 1426-10, Schedule 003

UCC1

Allen and Company

Duane Reade Inc.

DE SoS

04/30/02

21069065

—

Goods & equipment—Lease No. 1426-10, Schedule 004

UCC1

Allen and Company

Duane Reade Inc.

DE SoS

04/30/02

21069115

—

Goods & equipment—Lease No. 1426-10, Schedule 005

UCC1

Allen and Company

Duane Reade Inc.

DE SoS

04/30/02

21069214

—

Goods & equipment—Lease No. 1426-10, Schedule 006

UCC1

Allen and Company

Duane Reade Inc.

DE SoS

04/30/02

21069354

—

Goods & equipment—Lease No. 1426-10, Schedule 007

UCC1

Allen and Company

Duane Reade Inc.

DE SoS

04/30/02

21069545

—

Goods & equipment—Lease No. 1426-10, Schedule 008

UCC1

Allen and Company

Duane Reade Inc.

DE SoS

04/30/02

21069701

—

Goods & equipment—Lease No. 1426-10, Schedule 009

UCC1

FINOVA Capital Corporation

Duane Reade Inc.

DE SoS

05/15/02

21219348

—

In Lieu filing

UCC1

FINOVA Capital Corporation

Duane Reade Inc.

DE SoS

05/15/02

21219587

—

In Lieu filing

UCC1

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

05/08/02

21336647

—

All equipment under Master Lease Agreement No. 300327, Schedule Nos. 1-5

UCC3

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

06/12/02

21440167

21336647

Partial assignment to Key Equipment Finance, a division of Key Corporate Capital Inc.—Master Lease Agreement No. 300327, Schedule No. 1

UCC3

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

07/01/02

21612948

21336647

Full assignment to Key Equipment Finance, a division of Key Corporate Capital Inc.—Master Lease Agreement No. 300327, Schedule No. 1

UCC3

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

07/02/02

21865611

21336647

Full assignment to Excel Bank—Master Lease Agreement No. 300327, Schedule No. 3

UCC3

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

07/08/02

21896780

21336647

Full assignment to Excel Bank—Master Lease Agreement No. 300327, Schedule No. 4

UCC3

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

07/08/02

21897176

21336647

Full assignment to BankChicago—Master Lease Agreement No. 300327, Schedule No. 2

UCC3

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

08/08/02

22060360

21336647

Full assignment to Excel Bank, N.A.—Master Lease Agreement No. 300327, Schedule No. 5

UCC1

IBM Credit Corporation

Duane Reade Inc.

DE SoS

06/03/02

21637903

—

Equipment & software—IBM Credit Supplement #062946

UCC1

IBM Credit Corporation

Duane Reade Inc.

DE SoS

06/06/02

21665698

—

Equipment & software—IBM Credit Supplement #026808

UCC1

Crown Credit Company

Duane Reade, Inc.

DE SoS

06/18/02

21744154

—

Crown Lift Trucks

UCC1

Crown Credit Company

Duane Reade, Inc.

DE SoS

06/18/02

21744170

—

Crown Lift Truck

UCC1

The CIT Group/Equipment Financing, Inc.

Duane Reade Inc.

DE SoS

06/28/02

21843535

—

Equipment-Energy Management Control Systems

UCC1

IBM Credit Corporation

Duane Reade Inc.

DE SoS

07/01/02

21852924

—

Equipment & software—IBM Credit Supplement #092134

UCC1

Crown Credit Company

Duane Reade, Inc.

DE SoS

07/02/02

21869225

—

Crown Lift Truck

UCC1

The CIT Group/Equipment Financing, Inc.

Duane Reade Inc.

DE SoS

08/27/02

22216533

—

Equipment-Energy Management Control Systems

UCC1

Orix Financial Services, Inc.

Duane Reade, Inc.

DE SoS

10/10/02

22657249

—

Equipment-under lease #42274

UCC1

The CIT Group/Equipment Financing, Inc.

Duane Reade Inc.

DE SoS

11/04/02

22880783

—

Equipment-attachment not available

UCC1

IBM Credit LLC

Duane Reade Inc.

DE SoS

01/07/03

30215338

—

Equipment & software—IBM Credit LLC Supplement #141857

UCC1

The CIT Group/Equipment Financing, Inc.

Duane Reade Inc.

DE SoS

01/17/03

30308745

—

Equipment-Energy Management Control Systems

UCC1

The CIT Group/Equipment Financing, Inc.

Duane Reade Inc.

DE SoS

03/10/03

30731409

—

Equipment-Schedule No.4 dd.12/11/02 to Master Lease Agrmt

UCC1

Crown Credit Company

Duane Reade, Inc.

DE SoS

06/03/03

31393209

—

Crown Lift Trucks

UCC1

IFC Credit Corporation

Duane Reade Inc.

DE SoS

06/11/03

31474249

—

All equipment under Master Lease Agreement No. 300327, Schedule No. 6

UCC3

IFC Credit Corporation

Duane Reade Inc.

DE SoS

06/18/03

31540585

31474249

Full Assignment to Excel Bank

UCC1

De Lage Landen Financial Services, Inc.

Duane Reade, Inc.

DE SoS

06/19/03

31858938

—

Savin Equipment

UCC1

IFC Credit Corporation

Duane Reade Inc.

DE SoS

07/24/03

31903858

—

All equipment under Master Lease Agreement No. 300327, Schedule No. 7

UCC3

IFC Credit Corporation

Duane Reade Inc.

DE SoS

07/24/03

31904062

31903858

Full Assignment to Sterling National Bank

UCC1

IFC Credit Corporation

Duane Reade Inc.

DE SoS

08/20/03

32165820

—

All equipment under Master Lease Agreement No. 300327, Schedule No. 8

UCC3

IFC Credit Corporation

Duane Reade Inc.

DE SoS

08/20/03

32165861

32165820

Full Assignment to First Bank of Highland Park

UCC1

IFC Credit Corporation

Duane Reade Inc.

DE SoS

08/25/03

32202136

—

All equipment under Master Lease Agreement No. 300327, Schedule No. 9

UCC3

IFC Credit Corporation

Duane Reade Inc.

DE SoS

09/05/03

32300906

32202136

Full Assignment to First Bank of Highland Park

UCC1

IFC Credit Corporation

Duane Reade Inc.

DE SoS

08/25/03

32202169

—

All equipment under Master Lease Agreement No. 300327, Schedule No. 10

UCC3

IFC Credit Corporation

Duane Reade Inc.

DE SoS

09/05/03

32301029

32202169

Full Assignment to First Bank of Highland Park

UCC1

Crown Credit Company

Duane Reade, Inc.

DE SoS

08/26/03

32207150

—

Crown Lift Trucks

UCC1

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

11/03/03

32875196

—

All equipment under Master Lease Agreement No. 300327, Schedule No. 11

UCC3

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

11/03/03

32875337

32875196

Full assignment to Excel Bank, N.A.

UCC1

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

12/18/03

33343459

—

All equipment under Master Lease Agreement No. 300327, Schedule No. 12

UCC3

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

12/18/03

33343947

33343459

Full assignment to American Enterprise Bank

UCC1

Orix USA Corporation

Duane Reade

Nassau County, NY

08/13/99

UC 99013451

—

Equipment—Master lease no. 37625, lease schedule no. 40279

UCC1

Bergen Brunswig Drug Company, as Consignor

Duane Reade, Inc.

Nassau County, NY

12/03/99

UC 99019499

—

All prescription pharmaceutical products, insulin & syringes

UCC1

Bergen Brunswig Drug Company, as Consignor

Duane Reade

Nassau County, NY

12/03/99

UC 99019501

—

All prescription pharmaceutical products, insulin & syringes

UCC1

FINOVA Capital Corporation

Duane Reade Inc.

Nassau County, NY

12/29/99

UC 99020542

—

Equipment-all replacement parts, accessions & subsititutions #C0885003

UCC1

Bergen Brunswig Drug Company, as Consignor

Duane Reade, Inc.

Queens County, NY

12/09/99

99 PQ20098

—

All prescription pharmaceutical products, insulin & syringes

UCC1

Bergen Brunswig Drug Company, as Consignor

Duane Reade

Queens County, NY

12/09/99

99 PQ20099

—

All prescription pharmaceutical products, insulin & syringes

UCC1

FINOVA Capital Corporation

Duane Reade Inc.

Queens County, NY

01/05/00

00 PQ00157

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

FINOVA Capital Corporation

Duane Reade Inc.

Queens County, NY

01/05/00

00 PQ00158

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

FINOVA Capital Corporation

Duane Reade Inc.

Queens County, NY

03/07/00

00 PQ03845

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

Crown Credit Company

Duane Reade

Queens County, NY

07/11/00

00 PQ11229

—

Crown Lift Trucks

UCC1

Crown Credit Company

Duane Reade

Queens County, NY

07/11/00

00 PQ11230

—

Crown Lift Trucks

UCC1

Crown Credit Company

Duane Reade Inc.

Queens County, NY

03/12/01

01 PQ03982

—

Crown Lift Trucks

UCC1

Crown Credit Company

Duane Reade Inc.

Queens County, NY

04/10/01

01 PQ05814

—

Crown Lift Truck

UCC1

Bergen Brunswig Drug Company, as Consignor

Duane Reade, Inc.

Kings County, NY

11/19/99

99 PK16826

—

All prescription pharmaceutical products, insulin & syringes

UCC3

Bergen Brunswig Drug Company, as Consignor

Duane Reade

Kings County, NY

07/27/00

00 PK10146

99 PK16826

Assignment to: The Chase Manhattan Bank, as collateral agent

UCC1

Bergen Brunswig Drug Company, as Consignor

Duane Reade

Kings County, NY

11/19/99

99 PK16827

—

All prescription pharmaceutical products, insulin & syringes

UCC1

FINOVA Capital Corporation

Duane Reade Inc.

Kings County, NY

12/29/99

99 PK18851

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

FINOVA Capital Corporation

Duane Reade Inc.

Kings County, NY

03/06/00

00 PK02902

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

Orix USA Corporation

Duane Reade

Kings County, NY

06/14/00

00 PK08154

—

Equipment—Master lease no. 37625, lease schedule no. 40960

UCC3

Orix USA Corporation

Duane Reade

Kings County, NY

07/07/00

00 PK09317

00 PK08154

Amendment-No change to collateral. Addition of new serial numbers.

UCC1

El Camino Resources, Ltd.

Duane Reade

Queens County, NY

08/13/99

99 PN43967

—

Equipment—Master lease no. 4045, Schedule no. 1

UCC1

FINOVA Capital Corporation

Duane Reade

Queens County, NY

11/04/99

99 PN59987

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

Bergen Brunswig Drug Company, as Consignor

Duane Reade, Inc.

Queens County, NY

11/18/99

99 PN62825

—

All prescription pharmaceutical products, insulin & syringes

UCC1

Bergen Brunswig Drug Company, as Consignor

Duane Reade

Queens County, NY

11/18/99

99 PN62826

—

All prescription pharmaceutical products, insulin & syringes

UCC1

FINOVA Capital Corporation

Duane Reade

Queens County, NY

01/03/00

00 PN00107

—

Equipment-and all replacement parts, accessions & substitutions & all cash & noncash proceeds including insurance proceeds

UCC1

Orix USA Corporation

Duane Reade

Queens County, NY

04/28/00

00 PN21919

—

Equipment—Master lease no. 37625, lease schedule no. 40890

UCC1

Bergen Brunswig Drug Company, as Consignor

Duane Reade, Inc.

Queens County, NY

07/20/00

00 PN36022

—

All prescription pharmaceutical products, insulin & syringes

UCC1

Bergen Brunswig Drug Company, as Consignor

Duane Reade

Queens County, NY

07/20/00

00 PN36023

—

All prescription pharmaceutical products, insulin & syringes

UCC1

De Lage Landen Financial Services, Inc.

Duane Reade, Inc.

Queens County, NY

08/01/00

00 PN38140

—

Toshiba copier systems

UCC1

Orix USA Corporation

Duane Reade

Queens County, NY

08/16/00

00 PN41092

—

Equipment—Master lease no. 37625, lease schedule no. 41135

UCC3

Orix USA Corporation

Duane Reade

Queens County, NY

09/22/00

00 PN46937

00 PN41092

Amendment-No change to collateral. Addition of new serial numbers.

UCC1

Orix USA Corporation

Duane Reade, Inc.

Queens County, NY

02/08/01

01 PN06340

—

Equipment—Master lease no. 37625, lease schedule no. 41597

UCC3

Orix USA Corporation

Duane Reade, Inc.

Queens County, NY

04/24/01

01 PN19601

01 PN06340

Amendment-No change to collateral. Addition of new serial numbers.

UCC1

Orix USA Corporation

Duane Reade, Inc.

Queens County, NY

02/08/01

01 PN06341

—

Equipment—Master lease no. 37625, lease schedule no. 41598

UCC1

Imaging Financial Services Inc.

Duane Reade, Inc.

Queens County, NY

05/21/01

01 PN23359

—

3 Kodak picture maker units

UCC1

Colonial Pacific Leasing

Duane Reade, Inc.

Queens County, NY

06/13/01

01 PN28480

—

Gretag masterflex digital camera module software, etc.

UCC3

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

12/18/03

33343947

33343459

Full assignment to American Enterprise Bank

UCC3

Spectrum Medical Leasing, a division of IFC Credit Corporation

Duane Reade Inc.

DE SoS

12/18/03

33343947

33343459

Full assignment to American Enterprise Bank

UCC1

Orix Financial Services Inc.

Duane Reade

NY SoS

03/30/04

200403305
247791

Equipment-Printer & all accessories, replacements, along with cash & non-cash proceeds

UCC3

Orix Financial Services Inc.

Duane Reade

NY SoS

04/08/04

200404085
277523

Amendment-restated Collateral Description by adding new serial numbers

UCC1

IFC Credit Corporation

Duane Reade Inc.

NY SoS

05/27/04

200405275
433818

Equipment-covered under Lease Schedule No.15 to Master Lease Agrmt No.300327

UCC3

IFC Credit Corporation

Duane Reade Inc.

NY SoS

06/25/04

200406255
528196

20040527543
3818

Amendment-restated collateral description to amend all equip. covered under Master Lease No.300327 Lease Sched No.015

UCC1

IFC Credit Corporation

Duane Reade Inc.

NY SoS

05/27/04

200452754
33844

Equipment-covered under Lease Schedule No.13 to Master Lease Agrmt No.300327

UCC1

IFC Credit Corporation

Duane Reade Inc.

NY SoS

05/27/04

200405275
434795

Equipment-covered under Lease Schedule No.14 to Master Lease Agrmt No.300327

UCC3

IFC Credit Corporation

Duane Reade Inc.

NY SoS

06/25/04

200406255
28211

20040527543
4795

Amendment-restated collateral description to amend all equip. covered under Master Lease No.300327 Lease Sched No.014

UCC1

IFC Credit Corporation

Duane Reade Inc.

NY SoS

05/27/04

200405275
434834

Equipment-covered under Lease Schedule No.16 to Master Lease Agrmt No.300327

UCC3

IFC Credit Corporation

Duane Reade Inc.

NY SoS

06/25/04

200406255
528184

20040527543
4834

Amendment-restated collateral description to amend all equip. covered under Master Lease No.300327 Lease Sched No.016

UCC1

IFC Credit Corporation

Duane Reade Inc.

NY SoS

06/25/04

200406255
527877

Equipment-covered under Lease Schedule No.16 to Master Lease Agrmt No.300327

UCC1

IFC Credit Corporation

Duane Reade Inc.

NY SoS

06/25/04

200406255
527904

Equipment-covered under Lease Schedule No.18 to Master Lease Agrmt No.300327

UCC1

IFC Credit Corporation

Duane Reade Inc.

NY SoS

06/25/04

200406255
527954

Equipment-covered under Lease Schedule No.19 to Master Lease Agrmt No.300327

UCC1

IFC Credit Corporation

Duane Reade Inc.

NY SOS

06/25/04

200406255
528019

Equipment-covered under Lease Schedule No.17 to Master Lease Agrmt No.300327

Record of Bankruptcies, Pending Suits & Judgements

Participant Name	Case Number	Date Filed	Plaintiff/Debtor Name	Location
Duane Reade	12052/2001	09/10/03	Great Atlantic & Pacific Tea Co. Inc	Supreme Court, Richmond County, New York
Duane Reade	814873-01	09/02/03	The City of New York Law Department	Queens County, New York
Duane Reade	815198-01	09/02/03	The City of New York Law Department	Queens County, New York
Duane Reade	808849-01	09/25/03	Criminal Court of the City of New York	Queens County, New York
Duane Reade	001827734-01	05/20/02	Criminal Court of the City of New York	Kings County, New York
Duane Reade	001856693-01	08/30/02	Criminal Court of the City of New York	Kings County, New York
Duane Reade	001856691-01	08/30/02	Criminal Court of the City of New York	Kings County, New York
Duane Reade	001905162-01	02/10/03	Criminal Court of the City of New York	Kings County, New York
Duane Reade	001910263-01	03/03/03	Criminal Court of the City of New York	Kings County, New York
Duane Reade	001920035-01	03/31/03	Criminal Court of the City of New York	Kings County, New York
Duane Reade	00-CV-253	12/31/03	Ansoumana, et al	U.S. Southern District Court—New York City
Duane Reade	24848 1991	09/27/91	Johnny Seitz and Chris Rials-Seitz	New York Supreme Court
Duane Reade	111150 2001	06/04/01	Ellen Kleinberg	New York Supreme Court
Duane Reade	98-46468-ALG	09/09/98	The Pharmacy Fund, Inc. and Pharmacy Fund Receivables, Inc.	U.S. Bankruptcy Court—Southern District of New York—Chapter 11 Bankruptcy
Duane Reade	01-41432-AJG	05/21/01	Lechters N.Y.C., Inc., et al	U.S. Bankruptcy Court—Southern District of New York—Chapter 11 Bankruptcy
Duane Reade	001343156-01	11/14/00	Criminal Court of the City of New York	New York County, New York
Duane Reade	001602751-01	09/16/02	Criminal Court of the City of New York	New York County, New York
Duane Reade	001642240-01	12/17/02	Criminal Court of the City of New York	New York County, New York
Duane Reade	001696245-01	04/28/03	Criminal Court of the City of New York	New York County, New York
Duane Reade	001696246-01	04/28/03	Criminal Court of the City of New York	New York County, New York
Duane Reade	001708856-01	05/13/03	Criminal Court of the City of New York	New York County, New York
Duane Reade	001745201-01	09/02/03	The City of New York Law Department	New York County, New York
Duane Reade	001745202-01	09/02/03	The City of New York Law Department	New York County, New York
Duane Reade	001751583-01	09/23/03	Tishman Speyer Properties L.P.	New York County, New York
Duane Reade	001751583-02	09/23/03	Turner Construction Company	New York County, New York

SCHEDULE 6.04

INVESTMENTS
(as of the Closing Date)

Promissory Note from DRI Investment Group, LLC in favor of Duane Reade Inc. in an amount not to exceed $200,000.00.

Entity	Entity Holds Interests in the Following:
Duane Reade Inc.	1.	Investment in Arclight Systems LLC, a Delaware limited liability company pursuant to the Arclight Systems LLC Limited Liability Company Agreement, dated February 26, 2001

	2.	Investment in Chain Drug Consortium LLC, a Delaware limited liability company pursuant to the Chain Drug Consortium Operating Agreement, dated August 1, 2000, as amended June 7, 2003

	3.	Partnership interest in Duane Reade

SCHEDULE 6.07

TRANSACTIONS WITH AFFILIATES

Loan Party		Description

Duane Reade Inc.		Amended and Restated Employment Agreement dated August 12, 2002, with Anthony J. Cuti.

Duane Reade Inc.		Executive Life Program Split Dollar Agreement between Anthony J. Cuti and Duane Reade, Inc., dated January 25, 2002.

Duane Reade Inc.		Employment Letter, dated June 10, 1999, with John K. Henry .

Duane Reade Inc.		Employment Agreement, dated October 9, 1996, as amended, with Jerry M. Ray.

Duane Reade Inc.		Employment Agreement, dated February 22, 1993, as amended, with Gary Charboneau.

Duane Reade Inc.		Split Dollar Life Insurance Policies covering Messrs. Cuti, Charboneau, Henry & Ray.

Duane Reade Inc.		Long-term cash target awards applicable to Messrs. Charboneau, Ray & Henry.

Duane Reade Inc.		Employment Agreement, dated June 25, 2003, with Timothy R. LaBeau.

Duane Reade Inc.		Consulting Agreement with Transportation Services International, an entity operated by Joseph Cuti.

Duane Reade Inc.		Relationship with DRI Investment Group, LLC, as more fully described in the Company’s most recent Proxy Statement dated June 30, 2004.

Duane Reade Acquisition Corp.		Management Services Agreement, dated as of July 30, 2004, between Oak Hill Capital Management, Inc. and Duane Reade Acquisition Corp., as the same may be amended, modified or supplemented from time to time in accordance with the provisions thereof.*

* Effective for purposes of the schedule upon closing of the Rex Transaction.

Duane Reade Holdings and Subsidiaries		Tax Sharing Agreement, dated as of July 30, 2004, among Duane Reade Holdings, Inc. and its Subsidiaries as amended, restated or modified from time to time.*

		Stockholders and Registration Rights Agreement, dated as of July 30, 2004, between Duane Reade Holdings, Inc., Duane Reade Shareholders, LLC, and certain members of the management of Duane Reade Inc., as amended, restated or modified from time to time, and the transactions contemplated thereunder.*

Duane Reade Acquisition Corp.		Employment Agreement, dated as of March 19, 2004, and amended on June 18, 2004, between Anthony J. Cuti and Duane Reade Acquisition Corp. and all transactions contemplated thereunder.*

Duane Reade Acquisition Corp.		Employment Agreement, dated as of March 16, 2004, between Gary Charboneau and Duane Reade Acquisition Corp. and all transactions contemplated thereunder.*

Duane Reade Acquisition Corp.		Employment Agreement, dated as of March 16, 2004, between Jerry Ray and Duane Reade Acquisition Corp. and all transactions and payments contemplated thereunder*

Duane Reade Acquisition Corp.		Employment Agreement, dated as of March 16, 2004, between Timothy LaBeau and Duane Reade Acquisition Corp. and all transactions and payments contemplated thereunder*

Duane Reade Acquisition Corp		Employment Agreement, dated as of March 16, 2004, between John K. Henry and Duane Reade Acquisition Corp. and all transactions and payments contemplated thereunder*

Duane Reade Holdings, Inc.		The Duane Reade Holdings, Inc. 2004 Management Stock Option Plan*

		option agreement under the Non-Qualified Stock Option Agreement (under the 2004 Management Stock Option Plan) to Anthony J. Cuti*

		option agreement under the Non-Qualified Stock Option Agreement (under the 2004 Management Stock Option Plan) to Gary Charboneau*

		option agreement under the Non-Qualified Stock Option Agreement (under the 2004 Management Stock Option Plan) to Jerry Ray*

		option agreement under the Non-Qualified Stock Option Agreement (under the 2004 Management Stock Option Plan) to Timothy LaBeau*

* Effective for purposes of the schedule upon closing of the Rex Transaction.

		option agreement under the Non-Qualified Stock Option Agreement (under the 2004 Management Stock Option Plan) to John K. Henry*

Duane Reade Inc.		Duane Reade Inc. Phantom Stock Plan*

Duane Reade Inc.		Phantom Stock Award Agreement between Duane Reade Inc. and Gary Charboneau*

Duane Reade Inc.		Phantom Stock Award Agreement between Duane Reade Inc. and John K. Henry*

Duane Reade Inc.		Phantom Stock Award Agreement between Duane Reade Inc. and Timothy LaBeau*

Duane Reade Inc.		Phantom Stock Award Agreement between Duane Reade Inc. and Jerry Ray*

		Preemptive Rights Agreement, dated as July 30, 2004, by and among Oak Hill Capital Partners, L.P., Oak Hill Capital Management Partners, L.P., OHCP DR Co-Investors, LLC, Duane Reade Shareholders, LLC, Duane Reade Holdings, Inc., Duane Reade Inc., Anthony J. Cuti and certain other members of the management of Duane Reade Inc. listed on Schedule 1 thereto*

* Effective for purposes of the schedule upon closing of the Rex Transaction.

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Table of Contents

FIRST AMENDMENT TO CREDIT AGREEMENT

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