John A. Lederer Chairman and Chief Executive Officer

Exhibit 10.45

John A. Lederer
Chairman and Chief Executive Officer

January 9, 2009

Phillip A. Bradley
897 Inman Village Parkway
Atlanta, GA 30307

Dear Phil:

This letter will confirm an offer of employment to you by Duane Reade Inc. (the “Company.”)

Terms of Employment. Your initial assignment will be as Senior Vice President, General Counsel and Secretary, reporting directly to Mr. John A. Lederer, Chairman and Chief Executive Officer.  In such position, you will have such authorities, responsibilities and duties customarily exercised by a person holding that position, including, without limitation, responsibility for the complete legal and compliance function, including all aspects of such. You will be based at our headquarters office located at 440 Ninth Avenue, New York, NY.

Subject to the terms and conditions of this offer letter, this Agreement shall be effective for a term commencing on January 1, 2009 (the “Effective Date”) and shall continue until terminated by either you or the Company in accordance with the provisions of this offer letter.  (With respect to any services you perform for the Company prior to the Effective Date, your law firm will be compensated pursuant to the engagement letter between McKenna Long & Aldridge LLP and Duane Reade.)

Your initial salary will be at an annual rate of $400,000.00, to be paid in bi-weekly installments of $15,384.62, subject to annual review by Mr. Lederer.  Future salary increases will be at the discretion of the Company and based on demonstrated job performance in accordance with Company policy and practice.

The Company offers an executive benefit program in which you will be able to participate, subject to the terms of eligibility for the individual benefit plans.  Those plans include a 401(k) program, major medical benefits, Company paid life and disability programs and other welfare benefit packages.  You will receive four (4) weeks of paid vacation each calendar year subject to restrictions of your job requirements.  Please be aware that Company’s vacation policy does not allow carryover of vacation from year to year.  Therefore, if the four weeks are not taken they are forfeited each year.

Executive Offices:   440 9th Avenue, New York, NY 10001
Telephone ###-###-####       FAX:  917 ###-###-####

As a senior executive of the Company, you will be eligible to participate in the Company’s performance incentive plan and will have the opportunity to receive an annual cash bonus pursuant to the terms of that plan of between fifty percent (50%) and one hundred and fifty percent (150%) of your annual salary rate, determined as follows:  50% of your annual salary will be paid upon achievement of the “threshold target,” 100% of your annual salary will be paid upon achievement of the “target,” 150% of your annual salary will be paid upon achievement of the “maximum target” and no bonus will be paid if the “threshold target” is not achieved.  The amount of your bonus will be determined based on a straight-line interpolation for achievement between the “threshold target” and “maximum target”.  The plan targets are set by the Company’s Board of Directors and compensation committee annually and are typically based on the attainment of Company performance towards EBITDA targets and your individual performance towards goals mutually set between you and the Chief Executive Officer.  It is anticipated that with respect to the Company, the “threshold target” will require achievement of 95% of the annual EBITDA targets, the “target” will require achievement of 100% of the annual EBITDA targets, and the “maximum target” will require achievement of 105% of the annual EBITDA targets.  Subject to your continued employment with the Company, you will be entitled to receive a guaranteed minimum bonus with respect to the twelve (12) month period following the Effective Date equal to your base salary.  Actual incentive payments will be paid yearly on the same date that the Company makes such payments to other members of its senior management, usually at the end of the first quarter of (but not later than December 31 of) the year immediately following the year for which the bonus is payable, after Board approval and, subject to your continued employment with the Company on each such date and having not given or received a notice of termination before the close of the fiscal year in respect of which the annual bonus is to be paid (provided that in respect of the bonus payable for the 2009 calendar year you need only to have continued employment through December 31, 2009 and not have been terminated for “cause” prior to the payment date), except as otherwise provided below if the Company terminates your employment other than for “cause,” or you terminate your employment for “good reason”.  As with other executive benefits programs, eligibility and participation are subject to the specific provisions of the plan.

As an executive, you will be eligible to participate in the Company’s 2004 Management Stock Option Plan.  Subject to the terms and conditions of that plan, on the Effective Date you will receive an initial grant of options to acquire twenty thousand (20,000) shares of Company stock at an exercise price of one hundred dollars ($100.00 per share) (the “Options”).  Subject to your continued employment, 60% of the Options (the “Service Options”) will vest at a rate of twenty-five percent (25%) per year of service with the Company, such that those Options will be 100% vested at the end of four (4) years employment.  The remaining 40% of the Options (the “Performance Options”) will vest at a rate of twenty-five percent (25%) per year of service with the Company, subject to both your continued employment and the achievement of annual EBITDA targets by the Company.  Notwithstanding the preceding sentence, if any portion of the Options fail to vest because the annual EBITDA targets are not attained for a given fiscal year, such portion of the Options may still subsequently vest and become exercisable if the Company achieves the cumulative EBITDA targets set with respect to a later fiscal year.  The grant of the Options is conditioned upon and subject to you becoming a party to the Company’s Stockholders Agreement.  The Options will, in accordance with the terms of the Plan pursuant to which such Options are issued, be subject to such standard equitable adjustments as the Company deems

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necessary or appropriate to prevent substantial enlargement or dilution of your rights in the event of certain corporate transactions and extraordinary events, including a grant of extraordinary dividends.  Nothing in this provision shall act as a guarantee of any specific value of the Company stock other than the value described in the stock plan itself.  In connection with an initial public offering of the Company stock, the Company reserves the right to convert the Options into options to purchase equity securities of an entity other than the Company, if such entity will become the public company, and such equitable adjustments will be made to the terms and conditions of your Options as the Company deems necessary or appropriate.

Subject to your continued employment with the Company through the consummation of a change in control, the Service Options will vest as necessary to enable you to exercise your rights pursuant to a ‘Tag-Along Sale’ and to satisfy the Company’s rights with respect to a ‘Drag-Along Sale’ (in each case, pursuant to the Company’s Stockholders Agreement).  All unvested Performance Options will vest upon a change in control of the Company if, and only if, such change in control yields for the Company’s controlling stockholder and its affiliates a certain minimum cash-on-cash return on the investment in the Company made by Company’s controlling stockholder and its affiliates, provided you are employed by the Company on the date that such change in control is consummated.

As a senior executive of the Company, you will be required to enter into a restrictive covenants agreement which will include, without limitation: (i) an ongoing covenant not to disclose confidential information of the Company or any of its subsidiaries, (ii) an ongoing covenant not to make disparaging statements of any kind or in any form about the Company or any of its subsidiaries, (iii) a covenant not to solicit any employees or customers of the Company or any of its subsidiaries during the Employment Term and for a period of twenty four (24) months following termination of your employment, and (iv) a covenant not to compete, directly or indirectly, with the Company or any of its subsidiaries, including, without limitation, by providing services of any kind in any capacity for any company engaged in a business similar to that of the Company in, or within a one hundred (100) mile radius of, the New York City metro vicinity and in any other geographic area in which the Company then has plans to expand (it being understood that this will not prohibit your providing services solely as outside legal counsel to any such company, subject to compliance with the foregoing confidentiality covenant, so long as you are not involved, directly or indirectly, in any capacity, in connection with any litigation or other matter involving or affecting the Company or any of its subsidiaries), during the Employment Term and for a period of twelve (12) months following termination of your employment.  You acknowledge and agree that the Company will be entitled to preliminary and permanent injunctive relief (without the necessity of proving actual damages) as well as an equitable accounting of all earnings, profits and other benefits arising from any violation by you of these restrictive covenants, in addition to any other legal or equitable rights or remedies to which the Company may be entitled.

Your employment with the Company will be “at will,” meaning that either you or the Company will be entitled to terminate your employment at any time and for any reason or no reason, with or without cause.  In the event the Company terminates your employment other than for “cause,” or you terminate your employment for “good reason”, (a)  you will be paid severance equal to either:

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(i)                                     your 2009 base salary payable in bi-weekly installments and your bonus for 2009 on the date it would otherwise be paid should such termination occur prior to the first anniversary of the Effective Date; or

(ii)                                  one year of your base salary determined using your then-current salary rate in effect at the time of your termination, payable in bi-weekly installments should such termination occur on or after the first anniversary of the Effective Date;

and (b) you and your eligible dependents will receive continued participation during the one-year period following termination of employment in the health insurance benefits of the Company that are provided from time to time to employees of the Company during such period at the same cost to you as that charged to other active employees of the Company; provided, that the Company’s obligation to provide health insurance benefits will cease with respect to such benefits at the time you become eligible for such benefits from another employer.

The Company’s payment of this severance will be subject to both your execution (within 30 days following termination of employment) of a general release of claims against the Company and its subsidiaries in a form to be provided by the Company and your continuing compliance with all restrictive covenants to which you are subject under this offer letter, the restrictive covenants agreement, or otherwise.  For purposes of this Agreement “cause” shall mean termination for:  (1) a failure to follow lawful instructions of the Chief Executive Officer (other than any such failure resulting from death or incapacity due to physical or mental illness), provided, however, that following a change in control of the Company (as defined for purposes of the Options), any such failure will serve as the basis for a termination for Cause only if it is willful, (2) serious misconduct, dishonesty or disloyalty which results from a willful act or omission and which is materially injurious (or if public could be materially injurious) to the reputation or financial interests of the Company, including without limitation, sexual or racial harassment of any employee of the Company, any of its subsidiaries or of any person engaged in business with the Company or any of its subsidiaries; (3) being convicted of (or entering into a plea bargain admitting criminal guilt to) any felony; (4) willful and continued failure to substantially perform your duties under this Agreement; (5) commission of any act of fraud or embezzlement against the Company or any subsidiary thereof; (6) material breach of any covenant or Company policy regarding the protection of the Company’s business interests, including, without limitation, policies addressing confidentiality and non-competition; or (7) a material breach of this Agreement.  In the event of termination of your employment for any reason, with or without cause, you will be entitled to any earned but unpaid salary through the date of termination, plus any earned and accrued unused vacation pay, any accrued but unpaid business expenses, and any other vested and accrued compensation and benefits payable in accordance with the applicable Company policy or plan.  If your employment is terminated by the Company for cause, or you terminate your employment other than for good reason, you will not be entitled to any other compensation from the Company, including, without limitation, severance pay, and any unpaid bonus (guaranteed or otherwise) together with all of your outstanding vested and unvested Options will be immediately forfeited (except you shall remain entitled to any unpaid bonus in respect of the 2009 calendar year if you have continued employment through December 31, 2009 and not have been terminated for “cause” prior to the payment date).

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For purposes of this Agreement, “good reason” shall mean (in the absence of your written consent) the occurrence of any of the following events or circumstances:

(i)                                     the assignment to you of any duties materially and adversely inconsistent with your position as Senior Vice President, General Counsel and Secretary, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and that is remedied by the Company within the time period set forth below after receipt of notice thereof given by you;

(ii)                                  any intentional material breach by the Company of this Agreement, other than an isolated, insubstantial and inadvertent breach not occurring in bad faith and that is remedied by the Company within the time period set forth below after receipt of notice thereof given by you; or

(iii)                               the Company’s requiring you to be based primarily at a location more than 50 miles from the Company’s headquarters office;

provided, however, that any event described in clause (i), (ii) or (iii) shall not constitute good reason unless you have given the Company prior written notice of such event and the Company has not cured such event (if capable of cure) within (30) days following receipt of such notice.

You will be reimbursed for all normal business expenses in accordance with Company policy.  You will be reimbursed for relocation expenses in accordance with Company policy, determined by reference to what is usual and customary for an individual holding your position; and you shall be paid (to offset the cost of your temporarily maintaining dual residences) an amount of $5,000 per month for a period of up to twelve (12) months from the Effective Date (provided that to the extent you are residing in a residence provided by the Company, you will reimburse the Company for the cost of such housing, up to the amount of the monthly allowance).  For the avoidance of doubt, none of the payments referenced in this paragraph or elsewhere in this letter will be grossed up for tax.

Representations and Warranties.  You represent and warrant to the Company that you are not a party to or bound by any enforceable agreement, covenant or other obligation with any other person or entity which would restrict or otherwise interfere with your ability to commence employment with the Company and perform your duties hereunder.  You further represent and warrant that you will not disclose or use in connection with your employment with the Company any information or trade secrets which constitute ‘confidential information’ or ‘proprietary information’ (or any similar term) as defined in any agreement, covenant or other obligation that you are a party to or bound by with any other person or entity, including, without limitation, your previous employers, to the extent, if any, that you are in possession of such information.

Miscellaneous. This offer letter will be governed by, and interpreted in accordance with, the laws of the state of New York, without regard to the conflict of law provisions of any jurisdiction which would cause the application of any law other than that of the state of New York.  Any controversy or claim arising out of or relating to this offer letter (other than with

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respect to any restrictive covenants to which you are subject), or the breach thereof, will be settled by arbitration administered by one arbitrator of the American Arbitration Association in accordance with its Commercial Arbitration Rules then in effect.  Unless otherwise awarded by the arbitrator, each party will be responsible for its own fees and expenses.

It is the intention of the parties that the severance payments and benefits are not construed as “deferred compensation” (as defined under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)) and that the restrictions and possible delays in payment that could be imposed under Section 409A should not apply.  However, notwithstanding the foregoing, if the Company reasonably concludes that it is reasonably necessary to avoid additional or accelerated taxation pursuant to Section 409A in respect of the severance payments and benefits to which you may become entitled hereunder, then you shall not receive such payments or benefits until the first regular payroll date which occurs at least six months following the date of your termination of employment, at which time you shall receive a single lump sum payment for all amounts that would have been payable in respect of the period preceding such date but for the delay imposed on account of Section 409A, and the remainder of such payments shall thereafter be paid in equal installments on the original schedule.  In furtherance of the intent of this paragraph, each severance payment or installment shall be treated as a separate payment in order to maximize the application of payments during the “short term deferral period” under Section 409A.  Any payment or benefit due upon a termination of your employment that represents a “deferral of compensation” within the meaning of Section 409A shall commence to be paid or provided to you 31 days following a “separation from service” as defined in Treas. Reg. § 1.409A-1(h), unless earlier commencement is otherwise permitted by Section 409A.  Notwithstanding anything to the contrary in Agreement, any payment or benefit under this Agreement or otherwise that is exempt from Section 409A pursuant to Treas. Reg. § 1.409A-1(b)(9)(v)(A) or (C) (relating to certain reimbursements and in-kind benefits) shall be paid or provided to you only to the extent that the expenses are not incurred, or the benefits are not provided, beyond the last day of the second calendar year following  the calendar year in which your “separation from service” occurs; and provided further that such expenses are reimbursed no later than the last day of the third calendar year following the calendar year in which your “separation from service” occurs.  To the extent any indemnification payment, expense reimbursement, or the provision of any in-kind benefit is determined to be subject to Section 409A (and not exempt pursuant to the prior sentence or otherwise), the amount of any such indemnification payment or expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the indemnification payment or provision of in-kind benefits or expenses eligible for reimbursement in any other calendar year (except for any life-time or other aggregate limitation applicable to medical expenses), and in no event shall any indemnification payment or expenses be reimbursed after the last day of the calendar year following the calendar year in which you incurred such indemnification payment or expenses, and in no event shall any right to indemnification payment or reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit

This offer letter is intended to memorialize the offer of employment provided by the Company and if these terms are acceptable, to create an at-will employment relationship under these terms until such time as a mutually agreeable definitive employment agreement is entered into by you and the Company reflecting the terms of this offer letter and other customary terms. 

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Nothing in this offer letter is intended or shall have the effect of modifying or amending the terms, conditions or requirements of any benefit plan, retirement plan or welfare plan or arrangement offered by the Company.  During your employment, you will remain subject to, and be required to abide by, all terms, conditions and requirements of the policies and practices dictated by the Company for executive employees.

We all look forward to you joining our team in the near future.  Please do not hesitate to call me if you have any questions.

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