EXHIBIT 10.1

MASTER SEPARATION AGREEMENT

BETWEEN

RETAIL VENTURES, INC.

AND

DSW INC.

ARTICLE I DOCUMENTS AND ITEMS TO BE DELIVERED ON THE IPO DATE ..........................................         4

   Section 1.1    DOCUMENTS TO BE DELIVERED BY RETAIL VENTURES .........................................         4

   Section 1.2    DOCUMENTS TO BE DELIVERED BY DSW .....................................................         5

ARTICLE II THE IPO AND ACTIONS PENDING THE IPO; DISTRIBUTION ...........................................         5

   Section 2.1    TRANSACTIONS PRIOR TO THE IPO ........................................................         5

   Section 2.2    COOPERATION ..........................................................................         6

   Section 2.3    DEBT REORGANIZATION EVENTS ...........................................................         6

   Section 2.4    CONDITIONS PRECEDENT TO CONSUMMATION OF THE IPO ......................................         7

   Section 2.5    DISTRIBUTION .........................................................................         8

ARTICLE III COVENANTS AND OTHER MATTERS ................................................................         9

   Section 3.1    OTHER AGREEMENTS .....................................................................         9

   Section 3.2    FURTHER INSTRUMENTS ..................................................................         9

   Section 3.3    AGREEMENT FOR EXCHANGE OF INFORMATION ................................................         9

   Section 3.4    AUDITORS AND AUDITS; FINANCIAL STATEMENTS; ACCOUNTING MATTERS ........................        11

   Section 3.5    CONFIDENTIALITY ......................................................................        14

   Section 3.6    PRIVILEGED MATTERS ...................................................................        16

   Section 3.7    MAIL AND OTHER COMMUNICATIONS ........................................................        18

   Section 3.8    EMPLOYMENT MATTERS ...................................................................        18

   Section 3.9    PAYMENT OF EXPENSES ..................................................................        18

   Section 3.10   DISPUTE RESOLUTION ...................................................................        19

   Section 3.11   GOVERNMENTAL APPROVALS ...............................................................        20

   Section 3.12   NO REPRESENTATION OR WARRANTY ........................................................        20

   Section 3.13   COMPLIANCE WITH LEGAL POLICIES .......................................................        21

   Section 3.14   DEBT REORGANIZATION RELATED DOCUMENTS ................................................        22

   Section 3.15   NORTHLAND ............................................................................        22

   Section 3.16   GUARANTEES ...........................................................................        23

   Section 3.17   RUN-OFF OF ACCOUNTS ..................................................................        23

ARTICLE IV REGISTRATION RIGHTS .........................................................................        23

   Section 4.1    DEMAND REGISTRATION ..................................................................        23

   Section 4.2    PIGGYBACK REGISTRATION ...............................................................        25

   Section 4.3    EXPENSES .............................................................................        27

   Section 4.4    BLACKOUT PERIOD ......................................................................        28

   Section 4.5    SELECTION OF UNDERWRITERS ............................................................        28

   Section 4.6    OBLIGATIONS OF DSW ...................................................................        28

   Section 4.7    OBLIGATIONS OF SELLING HOLDERS .......................................................        30

   Section 4.8    UNDERWRITING; DUE DILIGENCE ..........................................................        30

   Section 4.9    INDEMNIFICATION AND CONTRIBUTION .....................................................        31

   Section 4.10   RULE 144 AND FORM S-3 ................................................................        35

   Section 4.11   HOLDBACK AGREEMENT ...................................................................        35

   Section 4.12   TERM .................................................................................        36

ARTICLE V MUTUAL RELEASES; INDEMNIFICATION .............................................................        36

   Section 5.1    RELEASE OF PRE-IPO DATE CLAIMS .......................................................        36

   Section 5.2    INDEMNIFICATION BY DSW ...............................................................        37

   Section 5.3    INDEMNIFICATION BY RETAIL VENTURES ...................................................        38

   Section 5.4    ANCILLARY AGREEMENT LIABILITIES ......................................................        38

   Section 5.5    OTHER AGREEMENTS EVIDENCING INDEMNIFICATION OBLIGATIONS ..............................        38

   Section 5.6    REDUCTIONS FOR INSURANCE PROCEEDS AND OTHER RECOVERIES ...............................        38

   Section 5.7    PROCEDURES FOR DEFENSE, SETTLEMENT AND INDEMNIFICATION OF THIRD PARTY CLAIMS .........        40

   Section 5.8    ADDITIONAL MATTERS ...................................................................        41

   Section 5.9    SURVIVAL OF INDEMNITIES ..............................................................        42

ARTICLE VI INSURANCE MATTERS ...........................................................................        42

   Section 6.1    DSW INSURANCE COVERAGE DURING THE INSURANCE TRANSITION PERIOD ........................        42

   Section 6.2    DSW INSURANCE COVERAGE AFTER THE INSURANCE TRANSITION PERIOD .........................        42

ARTICLE VII MISCELLANEOUS ..............................................................................        42

   Section 7.1    LIMITATION OF LIABILITY ..............................................................        42

   Section 7.2    ENTIRE AGREEMENT .....................................................................        43

   Section 7.3    GOVERNING LAW AND JURISDICTION .......................................................        43

   Section 7.4    TERMINATION; AMENDMENT ...............................................................        43

   Section 7.5    NOTICES ..............................................................................        43

   Section 7.6    COUNTERPARTS .........................................................................        44

   Section 7.7    BINDING EFFECT; ASSIGNMENT ...........................................................        44

   Section 7.8    SEVERABILITY .........................................................................        45

   Section 7.9    FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE ................................        45

   Section 7.10   AUTHORITY ............................................................................        45

   Section 7.11   INTERPRETATION .......................................................................        45

   Section 7.12   CONFLICTING AGREEMENTS ...............................................................        45

   Section 7.13   THIRD PARTY BENEFICIARIES ............................................................        46

ARTICLE VIII DEFINITIONS ...............................................................................        46

   Section 8.1    DEFINED TERMS ........................................................................        46

Exhibit A         IP License
Schedule 1.1(c)   Certain Officers and/or Directors of Retail Ventures
Schedule 1.2(b)   Certain Officers and/or Directors of DSW
Schedule 2.3(g)   Cross-Factor Guaranty Agreements

MASTER SEPARATION AGREEMENT

This Master Separation Agreement is dated as of the 5th day of July, 2005, between Retail Ventures, Inc., an Ohio corporation ("Retail Ventures"), and DSW Inc., an Ohio corporation ("DSW," with Retail Ventures, each a "Party," and together, the "Parties"). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article VIII hereof.

RECITALS

WHEREAS, Retail Ventures is the beneficial owner of all the issued and outstanding common shares of DSW;

WHEREAS, Retail Ventures, through its wholly-owned subsidiary, DSW, is engaged in the business of retailing specialty branded footwear (the "DSW Business"), as more completely described in a Registration Statement on Form S-1 (File No. 333-123289) filed with the Securities and Exchange Commission ("Commission") under the Securities Act, as amended (the "IPO Registration Statement");

WHEREAS, Retail Ventures and DSW currently contemplate that DSW will make an initial public offering ("IPO") pursuant to the IPO Registration Statement of an amount of its Class A common shares that will reduce Retail Ventures' ownership of the combined voting power of the Class A common shares and Class B common shares, voting together as a single class, to not less than 80.1%; and

WHEREAS, the Parties intend in this Agreement, including the Exhibits and Schedules hereto, to set forth the principal arrangements between them regarding the separation of the DSW Business from Retail Ventures.

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, Retail Ventures and DSW mutually covenant and agree as follows:

ARTICLE I
DOCUMENTS AND ITEMS TO BE
DELIVERED ON THE IPO DATE

Section 1.1 DOCUMENTS TO BE DELIVERED BY RETAIL VENTURES. On or prior to the closing of the IPO (the "IPO Date"), Retail Ventures will deliver, or will cause its appropriate Subsidiaries to deliver, to DSW all of the following items and agreements:

(a) A duly executed Tax Separation Agreement substantially in the form attached to the IPO Registration Statement as Exhibit 10.28 (the "Tax Separation Agreement");

(b) A duly executed Shared Services Agreement, substantially in the form attached to the IPO Registration Statement as Exhibit 10.27 (the "Shared Services Agreement");

(c) The resignations of certain officers and/or directors of Retail Ventures and/or any member of the Retail Ventures Group who will become officers and/or directors of DSW and who are identified on Schedule 1.1(c);

(d) A duly executed agreement governing the continuing use of United States Patent No. D495,172 and any patent that issues from Patent Application No. 29/205,562 substantially in the form attached hereto as Exhibit A (the "IP License");

(e) A duly executed Exchange Agreement substantially in the form attached to the IPO Registration Statement as Exhibit 4.4 (the "Share Exchange Agreement"); and

(f) Such other agreements, documents or instruments as the Parties may agree are necessary or desirable in order to achieve the purposes hereof.

Section 1.2 DOCUMENTS TO BE DELIVERED BY DSW. On or prior to the IPO Date, DSW will deliver, or will cause its appropriate Subsidiaries to deliver, to Retail Ventures all of the following items and agreements:

(a) In each case where DSW is a party to any agreement or instrument referred to in Section 1.1, a duly executed counterpart of such agreement or instrument;

(b) The resignations of certain officers and/or directors of DSW and/or its Subsidiary who will become officers and/or directors of Retail Ventures and/or any member of the Retail Ventures Group and who are identified on Schedule 1.2 (b); and

(c) Such other agreements, documents or instruments as the Parties may agree are necessary or desirable in order to achieve the purposes hereof.

ARTICLE II
THE IPO AND ACTIONS PENDING THE IPO; DISTRIBUTION

Section 2.1 TRANSACTIONS PRIOR TO THE IPO. Subject to the occurrence of the events described in this Article II, Retail Ventures and DSW intend to consummate the IPO and to take, or cause to be taken, the actions specified in this Section 2.1.

(a) REGISTRATION STATEMENT. DSW has filed the IPO Registration Statement, and intends to file such amendments or supplements thereto as may be necessary in order to cause the same to become and remain effective as required by law or by the managing underwriters for the IPO (the "Underwriters"), including, without limitation, filing such amendments or supplements to the IPO Registration

Statement as may be required by the underwriting agreement to be entered into among DSW and the Underwriters (the "Underwriting Agreement"), the Commission or federal, state or foreign securities laws. Retail Ventures and DSW also intend to cooperate in preparing, filing with the Commission and causing to become effective a registration statement registering the Class A common shares of DSW under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and any registration statements or amendments thereof which are required to reflect the establishment of, or amendments to, any employee benefit and other plans necessary or appropriate in connection with the IPO or the other transactions contemplated by this Agreement.

(b) UNDERWRITING AGREEMENT. DSW shall enter into the Underwriting Agreement, in form and substance reasonably satisfactory to DSW and comply with its obligations thereunder.

(c) NYSE LISTING. DSW intends to prepare, file and make effective, an application for listing of its Class A common shares issued in the IPO on the New York Stock Exchange ("NYSE"), subject to official notice of issuance.

Section 2.2 COOPERATION. DSW shall consult with, and cooperate in all respects with, Retail Ventures in connection with the pricing of the Class A common shares of DSW to be offered in the IPO and shall, at Retail Ventures' direction, promptly take any and all actions necessary or desirable to consummate the IPO as contemplated by the IPO Registration Statement and the Underwriting Agreement.

Section 2.3 DEBT REORGANIZATION EVENTS. Prior to, or concurrently with, the IPO Date, Retail Ventures and DSW shall cause the following events to occur (collectively, the "Debt Reorganization Events"), as more fully described in the IPO Registration Statement:

(a) Retail Ventures will amend and restate the Loan and Security Agreement, as amended, entered into with National City Commercial Finance, Inc. (n/k/a National City Business Credit, Inc.), as administrative agent, and the other parties named therein, dated June 11, 2002, and DSW and its wholly-owned subsidiary, DSW Shoe Warehouse, Inc., a Missouri corporation ("DSWSW"), will be released from their obligations thereunder;

(b) Retail Ventures will amend the Financing Agreement, as amended, among Cerberus Partners L.P., or Cerberus, as agent and lender, Schottenstein Stores Corporation, an Ohio corporation ("SSC"), as lender, and the other parties named therein, dated June 11, 2002;

(c) Retail Ventures will enter into a Second Amended and Restated Senior Loan Agreement amending and restating the Amended and Restated Senior Subordinated Convertible Loan Agreement, as amended, entered into with Cerberus, as agent and lender, SSC, as lender, and the other parties named therein, dated June 11, 2002; and DSW will be released from its obligations thereunder;

(d) Pursuant to the Second Amended and Restated Senior Loan Agreement, Retail Ventures will amend and restate the outstanding warrants dated as of September 26, 2002 ("Term Loan Warrants") and will issue "Conversion Warrants" (as defined in the Second Amended and Restated Senior Loan Agreement) (the Term Loan Warrants and the Conversion Warrants being referred to collectively as the "Warrants");

(e) Retail Ventures will enter into a Second Amended and Restated Registration Rights Agreement amending the Registration Rights Agreement dated June 11, 2002;

(f) DSW will enter into a Registration Rights Agreement with Cerberus and SSC;

(g) Retail Ventures and DSW will terminate the cross-factor guaranty agreements listed on Schedule 2.3(g); and

(h) DSW will enter into a new five-year $150 million secured revolving credit facility with National City Business Credit, Inc., as administrative agent (the "DSW Credit Facility").

Section 2.4 CONDITIONS PRECEDENT TO CONSUMMATION OF THE IPO. The obligations of the Parties to consummate the IPO shall be conditioned on the satisfaction of the following conditions (collectively, the "IPO Conditions"):

(a) DEBT REORGANIZATION EVENTS. Retail Ventures and DSW shall have consummated the Debt Reorganization Events;

(b) REGISTRATION STATEMENT. The IPO Registration Statement shall have been filed and declared effective by the Commission, and there shall be no stop-order in effect with respect thereto;

(c) BLUE SKY. The actions and filings with regard to applicable securities and blue sky laws of any state (and any comparable laws under any foreign jurisdictions) shall have been taken and, where applicable, have become effective or been accepted;

(d) NYSE LISTING. The Class A common shares of DSW to be issued in the IPO shall have been accepted for listing on the NYSE, on official notice of issuance;

(e) UNDERWRITING AGREEMENT. DSW shall have entered into the Underwriting Agreement and all conditions to the obligations of DSW and the Underwriters shall have been satisfied or waived by the party that is entitled to the benefit thereof;

(f) STOCK OWNERSHIP. Retail Ventures shall be satisfied, in its sole discretion, that it will own at least 80.1% of the combined voting power of the outstanding Class A common shares and Class B common shares, voting together as a

single class, and that DSW will have no class of DSW Capital Stock other than the Common Shares outstanding, immediately following the IPO;

(g) NO LEGAL RESTRAINTS. No order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the IPO or any of the other transactions contemplated by this Agreement shall be in effect;

(h) DELIVERIES. Each Party shall have made the deliveries required pursuant to Section 1.1 and Section 1.2, respectively; and

(i) OTHER ACTIONS. Such other actions as the Parties hereto may, based upon the advice of counsel, reasonably request to be taken prior to the IPO in order to assure the successful completion of the IPO, shall have been taken.

Retail Ventures and DSW shall each use their reasonable best efforts to satisfy, or cause to be satisfied, the IPO Conditions.

Section 2.5 DISTRIBUTION.

(a) DISTRIBUTION GENERALLY. At any time after the IPO Date, if Retail Ventures, in its sole and absolute discretion, advises DSW that Retail Ventures intends to pursue a Distribution, DSW agrees to take all action reasonably requested by Retail Ventures to facilitate the Distribution.

(b) RETAIL VENTURES' SOLE DISCRETION. Retail Ventures shall, in its sole and absolute discretion, determine whether to proceed with all or part of a Distribution, the date of the consummation of the Distribution and all terms of the Distribution, including, without limitation, the form, structure and terms of any transaction(s) and/or offering(s) to effect the Distribution and the timing of and conditions to the consummation of the Distribution. In addition, Retail Ventures may at any time and from time to time until the completion of the Distribution, modify or change the terms of the Distribution, including, without limitation, by accelerating or delaying the timing of the consummation of all or part of the Distribution. DSW shall cooperate with Retail Ventures in all respects to accomplish the Distribution and shall, at Retail Ventures' direction, promptly take any and all actions that Retail Ventures deems reasonably necessary or desirable to effect the Distribution. Without limiting the generality of the foregoing, DSW shall, at Retail Ventures' direction, cooperate with Retail Ventures, and execute and deliver, or use its best efforts to cause to have executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all consents, approvals or authorizations of, any domestic or foreign governmental or regulatory authority requested by Retail Ventures in order to consummate and make effective the Distribution. If, in connection with any Distribution, Retail Ventures makes a Request (as defined herein) for a Demand Registration (as defined herein), the terms and the conditions set forth in Article IV hereof shall govern.

ARTICLE III
COVENANTS AND OTHER MATTERS

Section 3.1 OTHER AGREEMENTS. Retail Ventures and DSW agree to execute or cause to be executed by the appropriate parties and deliver, as appropriate, such other agreements, instruments and other documents as may be necessary or desirable in order to effect the purposes of this Agreement and the Inter-Company Agreements.

Section 3.2 FURTHER INSTRUMENTS. At the request of DSW, and without further consideration, Retail Ventures will execute and deliver, and will cause its applicable Subsidiaries to execute and deliver, to DSW such other instruments of transfer, conveyance, assignment, substitution and confirmation and take such action as DSW may reasonably deem necessary or desirable in order to transfer, convey and assign to DSW and confirm DSW's title to any assets, rights and other things of value used in the operation of the DSW Business prior to the IPO Date or to be transferred to DSW pursuant to this Agreement, the Inter-Company Agreements or any document referred to therein, to put DSW in actual possession and operating control thereof and to permit DSW to exercise all rights with respect thereto (including, without limitation, rights under contracts and other arrangements as to which the consent of any third party to the transfer thereof shall not have previously been obtained); provided, however, that any such assets, rights or other things of value not reflected on the DSW Balance Sheet shall only be transferred against payment by DSW to Retail Ventures or its applicable Subsidiary of an amount equal to the book value thereof. At the request of Retail Ventures and without further consideration, DSW will execute and deliver to Retail Ventures and its Subsidiaries all instruments, assumptions, novations, undertakings, substitutions or other documents and take such other action as Retail Ventures may reasonably deem necessary or desirable in order to have DSW fully and unconditionally assume and discharge the DSW Liabilities. Except as hereinabove provided, neither Retail Ventures nor DSW shall be obligated, in connection with the foregoing, to expend money other than reasonable out-of-pocket expenses, attorneys' fees and recording or similar fees, unless reimbursed by the other Party. Furthermore, each Party, at the request of the other Party hereto, shall execute and deliver such other instruments and do and perform such other acts and things as may be necessary or desirable for effecting completely the consummation of the transactions contemplated hereby.

Section 3.3 AGREEMENT FOR EXCHANGE OF INFORMATION.

(a) GENERALLY. Each of Retail Ventures and DSW agrees to provide, or cause to be provided, to the other, at any time, as soon as reasonably practicable after written request therefor, all reports and other Information regularly provided by one Party to the other Party to Retail Ventures prior to the IPO Date and any Information in the possession or under the control of such Party that the requesting Party reasonably needs (i) to comply with reporting, disclosure, filing or other requirements imposed on the requesting Party (including under applicable securities laws) by a Governmental Authority having jurisdiction over the requesting Party, (ii) for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy audit,

accounting, claims, regulatory, litigation or other similar requirements, (iii) to comply with its obligations under this Agreement, any Inter-Company Agreement or the Warrants or (iv) during the period from the IPO Date until the Distribution Date (the "Pre-Distribution Period") and thereafter to the extent such Information and cooperation is necessary to comply with such reporting, filing and disclosure obligations, for the preparation of financial statements or completing an audit, and as reasonably necessary to conduct the ongoing businesses of Retail Ventures or DSW, as the case may be; PROVIDED, HOWEVER, that in the event that any Party determines that any such provision of Information could be commercially detrimental, violate any law or agreement, or waive any attorney-client privilege, the Parties shall take all reasonable measures to permit the compliance with such obligations in a manner that avoids any such harm or consequence. Each of Retail Ventures and DSW agree to make their respective personnel available to discuss the Information exchanged pursuant to this Section 3.3.

(b) INTERNAL ACCOUNTING CONTROLS; FINANCIAL INFORMATION. Except as otherwise provided in the Shared Services Agreement, after the IPO Date, (i) each Party shall maintain in effect at its own cost and expense adequate systems and controls for its business to the extent necessary to enable the other Party to satisfy its reporting, tax return, accounting, audit and other obligations, and (ii) each Party shall provide, or cause to be provided, to the other Party and its Subsidiaries in such form as such requesting Party shall request, at no charge to the requesting Party, all financial and other data and information as the requesting Party determines necessary or advisable in order to prepare its financial statements and reports or filings with any Governmental Authority. After the expiration of Retails Ventures' obligations to provide internal auditing and related services pursuant to the Shared Services Agreement, DSW shall be responsible its obligations under this Section 3.3(b).

(c) OWNERSHIP OF INFORMATION. Any Information owned by a Party that is provided to a requesting Party pursuant to this Section 3.3 shall be deemed to remain the property of the providing Party. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such Information.

(d) RECORD RETENTION. To facilitate the possible exchange of Information pursuant to this Section 3.3 and other provisions of this Agreement after the Distribution Date, each Party agrees to use its best efforts until the Distribution Date to retain all Information in its respective possession or control substantially in accordance with its respective record retention policies and/or practices as in effect on the IPO Date. However, except as set forth in the Tax Separation Agreement, at any time after the Distribution Date, each Party may amend its respective record retention policies at such Party's discretion; PROVIDED, HOWEVER, that if a Party desires to effect the amendment within three (3) years after the Distribution Date, the amending Party must give thirty (30) days prior written notice of such change in the policy to the other Party to this Agreement. No Party will destroy, or permit any of its Subsidiaries to destroy, any Information that exists on the IPO Date (other than Information that is permitted to be destroyed under the current respective record retention policies of each Party) and that

falls under the categories listed in Section 3.3(a), without first notifying the other Party of the proposed destruction and giving the other Party the opportunity to take possession or make copies of such Information prior to such destruction.

(e) LIMITATION OF LIABILITY. Each Party will use its best efforts to ensure that Information provided to the other Party hereunder is accurate and complete; PROVIDED, HOWEVER, no Party shall have any liability to any other Party in the event that any Information exchanged or provided pursuant to this Section 3.3 is found to be inaccurate, in the absence of gross negligence or willful misconduct by the party providing such Information. No Party shall have any liability to any other Party if any Information is destroyed or lost after the relevant Party has complied with the provisions of
Section 3.3(d).

(f) OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF INFORMATION. The rights and obligations granted under this Section 3.3 are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of Information set forth in this Agreement and any Inter-Company Agreement.

(g) PRODUCTION OF WITNESSES; RECORDS; COOPERATION. After the IPO Date, except in the case of a legal or other proceeding by one Party against another Party, each Party hereto shall use its commercially reasonable efforts to make available to each other Party, upon written request, the former, current and future directors, officers, employees, other personnel and agents of such Party as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available, to the extent that any such person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any legal, administrative or other proceeding in which the requesting Party may from time to time be involved, regardless of whether such legal, administrative or other proceeding is a matter with respect to which indemnification may be sought hereunder. The requesting Party shall bear all costs and expenses in connection therewith.

Section 3.4 AUDITORS AND AUDITS; FINANCIAL STATEMENTS; ACCOUNTING MATTERS.

Each Party agrees that:

(a) SELECTION OF AUDITORS. Until the first Retail Ventures fiscal year end occurring after the Distribution Date, DSW shall provide Retail Ventures as much prior notice as reasonably practical of any change in its independent certified public accountants as of the Distribution Date ("DSW's Auditors") for purposes of providing an opinion on its consolidated financial statements.

(b) DATE OF AUDITORS' OPINION AND QUARTERLY REVIEWS. Until the first Retail Ventures fiscal year end occurring after the Distribution

Date and thereafter to the extent necessary for the purpose of preparing financial statements or completing a financial statement audit, DSW shall use its best efforts to enable the DSW Auditors to complete their audit such that they will date their opinion on DSW's audited annual financial statements on the same date that Retail Ventures' independent certified public accountants ("Retail Ventures' Auditors") date their opinion on Retail Ventures' audited annual financial statements, and to enable Retail Ventures to meet its timetable for the printing, filing and public dissemination of Retail Ventures' annual financial statements. Until the first Retail Ventures fiscal year end occurring after the Distribution Date and thereafter to the extent necessary for the purpose of preparing financial statements or completing a financial statement audit, DSW shall use its best efforts to enable the DSW Auditors to complete their annual audit and quarterly review procedures such that they will provide clearance on DSW's annual and quarterly financial statements on the same date that Retail Ventures' Auditors provide clearance on Retail Ventures' annual and quarterly financial statements.

(c) ANNUAL AND QUARTERLY FINANCIAL STATEMENTS. Until the Distribution Date, DSW shall not change its fiscal year and, until the Retail Ventures fiscal year end first occurring after the Distribution Date and thereafter to the extent necessary for the purpose of preparing financial statements or completing a financial statement audit, shall provide to Retail Ventures on a timely basis all Information that Retail Ventures reasonably requires to meet its schedule for the preparation, printing, filing, and public dissemination of Retail Ventures' annual, quarterly and monthly financial statements. Without limiting the generality of the foregoing, DSW will provide all required financial Information with respect to DSW to DSW's Auditors in a sufficient and reasonable time and in sufficient detail to permit DSW's Auditors to take all steps and perform all reviews necessary to provide sufficient assistance to Retail Ventures' Auditors with respect to financial Information to be included or contained in Retail Ventures' annual, quarterly and monthly financial statements. Similarly, Retail Ventures shall provide to DSW on a timely basis all financial Information that DSW reasonably requires to meet its schedule for the preparation, printing, filing, and public dissemination of DSW's annual, quarterly and monthly financial statements. Without limiting the generality of the foregoing, Retail Ventures will provide all required financial Information with respect to Retail Ventures and its Subsidiaries to DSW's Auditors in a sufficient and reasonable time and in sufficient detail to permit DSW's Auditors to take all steps and perform all reviews necessary to provide sufficient assistance to DSW's Auditors with respect to Information to be included or contained in DSW's annual and quarterly financial statements.

(d) CERTIFICATIONS AND ATTESTATIONS. Until the first Retail Ventures fiscal year end occurring after the Distribution Date and thereafter to the extent necessary for the timely filing by Retail Ventures of annual and quarterly reports under the Exchange Act, DSW shall cause its appropriate officers and employees to provide to Retail Ventures on a timely basis any certificates reasonably requested by Retail Ventures as support for the certifications and attestations required by Sections 302, 906 and 404 of the Sarbanes-Oxley Act of 2002 to be filed with such annual and quarterly reports. For so long as Retail Ventures is providing accounting and financial services pursuant to the Shared Services Agreement and thereafter to the extent necessary

for the timely filing by DSW of annual and quarterly reports under the Exchange Act, Retail Ventures shall cause its appropriate officers and employees to provide to DSW on a timely basis any certificates reasonably requested by DSW as support for the certifications and attestations required by Sections 302, 906 and 404 of the Sarbanes-Oxley Act of 2002 to be filed with such annual and quarterly reports.

(e) COMPLIANCE WITH LAWS, POLICIES AND REGULATIONS. Until the Distribution Date, DSW shall comply with all financial accounting and reporting rules, policies and directives of Retail Ventures, and fulfill all timing and reporting requirements, applicable to Retail Ventures' Subsidiaries that are consolidated with Retail Ventures for financial statement purposes. Without limiting the foregoing, DSW shall comply with all financial accounting and reporting rules and policies, and fulfill all timing and reporting requirements, under applicable federal securities laws and NYSE rules.

(f) IDENTITY OF PERSONNEL PERFORMING THE ANNUAL AUDIT AND QUARTERLY REVIEWS. Until the Distribution Date and thereafter to the extent such information and cooperation is necessary for the preparation of financial statements or completing a financial statements audit, DSW shall authorize DSW's Auditors to make available to Retail Ventures' Auditors both the personnel who performed or will perform the annual audits and quarterly reviews of DSW and work papers related to the annual audits and quarterly reviews of DSW, in all cases within a reasonable time prior to DSW's Auditors' opinion date, so that Retail Ventures' Auditors are able to perform the procedures they consider necessary to take responsibility for the work of DSW's Auditors as it relates to Retail Ventures' Auditors' report on Retail Ventures' financial statements, all within sufficient time to enable Retail Ventures to meet its timetable for the printing, filing and public dissemination of Retail Ventures' annual and quarterly statements. Similarly, Retail Ventures shall authorize Retail Ventures' Auditors to make available to DSW's Auditors both the personnel who performed or will perform the annual audits and quarterly reviews of Retail Ventures and work papers related to the annual audits and quarterly reviews of Retail Ventures, in all cases within a reasonable time prior to Retail Ventures' Auditors' opinion date, so that DSW's Auditors are able to perform the procedures they consider necessary to take responsibility for the work of Retail Ventures' Auditors as it relates to DSW's Auditors' report on DSW's statements, all within sufficient time to enable DSW to meet its timetable for the printing, filing and public dissemination of DSW's annual and quarterly financial statements.

(g) ACCESS TO BOOKS AND RECORDS. Until the Distribution Date and thereafter to the extent such information and cooperation is necessary for the preparation of financial statements or completing a financial statements audit, all governmental audits are complete and the applicable statute of limitations for tax matters has expired, DSW shall provide Retail Ventures' internal auditors, counsel and other designated representatives of Retail Ventures access during normal business hours to (i) the premises of DSW and all Information (and duplicating rights) within the knowledge, possession or control of DSW and (ii) the officers and employees of DSW, so that Retail Ventures may conduct reasonable audits relating to the financial statements provided by DSW pursuant hereto as well as to the internal accounting controls and

operations of DSW. Similarly, Retail Ventures shall provide DSW's internal auditors, counsel and other designated representatives of DSW access during normal business hours to (i) the premises of Retail Ventures and its Subsidiaries and all Information (and duplicating rights with respect thereto) within the knowledge, possession or control of Retail Ventures and its Subsidiaries and (ii) the officers and employees of Retail Ventures and its Subsidiaries, so that DSW may conduct reasonable audits relating to the financial statements provided by Retail Ventures pursuant hereto as well as to the internal accounting controls and operations of Retail Ventures and its Subsidiaries.

(h) NOTICE OF CHANGE IN ACCOUNTING PRINCIPLES. Until the Distribution Date and thereafter if a change in accounting principles by a Party hereto would affect the historical financial statements of the other Party, neither Party shall make or adopt any significant changes in its accounting estimates or accounting principles from those in effect on the IPO Date without first consulting with the other Party, and if requested by the other Party, such Party's independent public accountants with respect thereto. Retail Ventures shall give DSW as much prior notice as reasonably practical of any proposed determination of, or any significant changes in, its accounting estimates or accounting principles from those in effect on the IPO Date. Retail Ventures will consult with DSW and, if requested by DSW, Retail Ventures will consult with DSW's independent public accountants with respect thereto.

(i) CONFLICT WITH THIRD-PARTY AGREEMENTS. Nothing in Section 3.3 or Section 3.4 shall require DSW to violate any agreement with any third party regarding the confidentiality of confidential and proprietary information relating to that third party or its business; PROVIDED, HOWEVER, that in the event that DSW is required under Section 3.3 or Section 3.4 to disclose any such Information, DSW shall use its best efforts to seek to obtain such third party's consent to the disclosure of such information.

Section 3.5 CONFIDENTIALITY.

(a) For a period beginning on the IPO date and continuing until the second anniversary of the Distribution Date, Retail Ventures and DSW shall hold and shall cause each of their respective Subsidiaries to hold, and shall each cause their respective officers, employees, agents, consultants and advisors to hold, in strict confidence and not to disclose or release without the prior written consent of the other Party, any and all Confidential Information (as defined herein) concerning the other Party; PROVIDED, that the Parties may disclose, or may permit disclosure of, Confidential Information (i) to their respective Affiliated Companies, auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such information and are informed of their obligation to hold such information confidential to the same extent as is applicable to the Parties hereto and in respect of whose failure to comply with such obligations, DSW or Retail Ventures, as the case may be, will be responsible or (ii) if the Parties or any of their respective Affiliated Companies are compelled to disclose any such Confidential Information by judicial or administrative process or, in the opinion of independent legal counsel, by other requirements of law. Notwithstanding the foregoing, in the event that any demand or

request for disclosure of Confidential Information is made pursuant to clause
(ii) above, Retail Ventures or DSW, as the case may be, shall promptly notify the other of the existence of such request or demand and shall provide the other a reasonable opportunity to seek an appropriate protective order or other remedy, which both Parties will cooperate in obtaining. In the event that such appropriate protective order or other remedy is not obtained, the Party whose Confidential Information is required to be disclosed shall or shall cause the other Party to furnish, or cause to be furnished, only that portion of the Confidential Information that is legally required to be disclosed. As used in this Section 3.5:

(i) "Confidential Information" shall mean Confidential Business Information and Confidential Operational Information concerning one Party which, prior to or following the IPO Date, has been disclosed by Retail Ventures or its Subsidiaries on the one hand, or DSW or its Subsidiaries, on the other hand, in written, oral (including by recording), electronic, or visual form to, or otherwise has come into the possession of, the other, including pursuant to the access provisions of
Section 3.3 or Section 3.4 hereof or any other provision of this Agreement
(except to the extent that such Information can be shown to have been (x) in the public domain through no fault of such Party (or any Party's Subsidiary) or (y) later lawfully acquired from other sources by the Party (or any Party's Subsidiary) to which it was furnished; PROVIDED, HOWEVER, in the case of (y) that such sources did not provide such Information in breach of any confidentiality obligations).

(ii) "Confidential Operational Information" shall mean all proprietary operational information, data or material including, without limitation, (a) specifications, ideas and concepts for products and services, (b) quality assurance policies, procedures and specifications, (c) customer information, (d) computer software and derivatives thereof, (e) training materials and information and (f) all other know-how, methodology, procedures, techniques and trade secrets related to design and development.

(iii) "Confidential Business Information" shall mean all proprietary information, data or material other than Confidential Operational Information, including, but not limited to (a) proprietary earnings reports and forecasts, (b) proprietary macro-economic reports and forecasts, (c) proprietary business plans, (d) proprietary general market evaluations and surveys and (e) proprietary financing and credit-related information.

(b) Notwithstanding anything to the contrary set forth herein,
(i) Retail Ventures and its Subsidiaries, on the one hand, and DSW and its Subsidiary, on the other hand, shall be deemed to have satisfied their obligations hereunder with respect to Confidential Information if they exercise the same degree of care (but no less than a reasonable degree of care) as they take to preserve confidentiality for their own similar

Information and (ii) confidentiality obligations provided for in any agreement between Retail Ventures or its Subsidiaries, or DSW or any of its Subsidiaries, on the one hand, and any employee of Retail Ventures or any of its Subsidiaries, or DSW or any of its Subsidiaries, on the other hand shall remain in full force and effect. Confidential Information of Retail Ventures and its Subsidiaries, on the one hand, or DSW, on the other hand, in the possession of and used by the other as of the IPO Date may continue to be used by such Person in possession of the Confidential Information in and only in the operation of the business of Retail Ventures or the DSW Business, as the case may be, and may be used only so long as the Confidential Information is maintained in confidence and not disclosed in violation of Section 3.5(a). Such continued right to use may not be transferred to any third party unless the third party purchases all or substantially all of the business and assets in one transaction or in a series of related transactions for which or in which the relevant Confidential Information is used or employed. In the event that such right to use is transferred in accordance with the preceding sentence, the transferring Party shall not disclose the source of the relevant Confidential Information.

Section 3.6 PRIVILEGED MATTERS.

(a) Retail Ventures and DSW agree that their respective rights and obligations to maintain, preserve, assert or waive any or all privileges belonging to either corporation or their Subsidiaries with respect to the DSW Business or the business of Retail Ventures, including but not limited to the attorney-client and work product privileges (collectively, "Privileges"), shall be governed by the provisions of this Section 3.6. With respect to Privileged Information of Retail Ventures (as defined below), Retail Ventures shall have sole authority in perpetuity to determine whether to assert or waive any or all Privileges, and DSW shall take no action (nor permit any of its Subsidiaries to take action) without the prior written consent of Retail Ventures that could result in any waiver of any Privilege that could be asserted by Retail Ventures or any of its Subsidiaries under applicable law and this Agreement. With respect to Privileged Information of DSW (as defined below) arising after the IPO Date, DSW shall have sole authority in perpetuity to determine whether to assert or waive any or all Privileges, and Retail Ventures shall take no action (nor permit any of its Subsidiaries to take action) without the prior written consent of DSW that could result in any waiver of any Privilege that could be asserted by DSW or any of its Subsidiaries under applicable law and this Agreement. The rights and obligations created by this Section 3.6 shall apply to all Information as to which Retail Ventures or DSW or their respective Subsidiaries would be entitled to assert or has asserted a Privilege without regard to the effect, if any, of the Distribution ("Privileged Information"). Privileged Information of Retail Ventures includes but is not limited to (i) any and all Information regarding the business of Retail Ventures and its Subsidiaries (other than the DSW Business; PROVIDED that DSW has assumed and will be liable on or after the IPO Date for any liability or claim arising with respect to such Information), whether or not it is in the possession of DSW or any of its Subsidiaries; (ii) all communications subject to a Privilege between counsel for Retail Ventures (including in-house counsel) and any person who, at the time of the communication, was an employee of Retail Ventures, regardless of whether such employee is or becomes an employee of DSW or any of its Subsidiaries and
(iii) all Information generated, received or arising after the IPO Date that refers or relates to

Privileged Information of Retail Ventures generated, received or arising prior to the IPO Date. Privileged Information of DSW includes but is not limited to
(x) any and all Information regarding the DSW Business, whether or not it is in the possession of Retail Ventures or any of its Subsidiaries; PROVIDED that DSW has assumed and will be liable on or after the IPO Date for any liability or claim arising with respect to such Information; (y) all communications subject to a Privilege occurring after the IPO Date between counsel for the DSW Business (including in-house counsel and former in-house counsel who are employees of Retail Ventures) and any person who, at the time of the communication, was an employee of DSW, regardless of whether such employee was, is or becomes an employee of Retail Ventures or any of its Subsidiaries and (z) all Information generated, received or arising after the IPO Date that refers or relates to Privileged Information of DSW generated, received or arising after the IPO Date.

(b) Upon receipt by Retail Ventures or DSW, as the case may be, of any subpoena, discovery or other request from any third party that actually or arguably calls for the production or disclosure of Privileged Information of the other or if Retail Ventures or DSW, as the case may be, obtains knowledge that any current or former employee of Retail Ventures or DSW, as the case may be, has received any subpoena, discovery or other request from any third party that actually or arguably calls for the production or disclosure of Privileged Information of the other, Retail Ventures or DSW, as the case may be, shall promptly notify the other of the existence of the request and shall provide the other a reasonable opportunity to review the Information and to assert any rights it may have under this Section 3.6 or otherwise to prevent the production or disclosure of Privileged Information. Retail Ventures or DSW, as the case may be, will not produce or disclose to any third party any of the other's Privileged Information under this Section 3.6 unless (a) the other has provided its express written consent to such production or disclosure or (b) a court of competent jurisdiction has entered an order not subject to interlocutory appeal or review finding that the Information is not entitled to protection from disclosure under any applicable privilege, doctrine or rule.

(c) Retail Ventures' transfer of books and records pertaining to the DSW Business and other Information to DSW, if any, Retail Ventures' agreement to permit DSW to obtain Information existing prior to the IPO Date, DSW's transfer of books and records and other Information pertaining to Retail Ventures, if any, and DSW's agreement to permit Retail Ventures to obtain Information existing prior to the IPO Date are made in reliance on Retail Ventures' and DSW's respective agreements, as set forth in Section 3.5 and this
Section 3.6, to maintain the confidentiality of such Information and to take the steps provided herein for the preservation of all Privileges that may belong to or be asserted by Retail Ventures or DSW, as the case may be. The access to Information, witnesses and individuals being granted pursuant to Section 3.3 and
Section 3.4 and the disclosure to DSW and Retail Ventures of Privileged Information relating to the DSW Business or the business of Retail Ventures pursuant to this Agreement shall not be asserted by Retail Ventures or DSW to constitute, or otherwise deemed, a waiver of any Privilege that has been or may be asserted under this Section 3.6 or otherwise. Nothing in this Agreement shall operate to reduce, minimize or condition the rights granted to Retail Ventures and DSW in, or the obligations imposed upon Retail Ventures and DSW by, this
Section 3.6.

Section 3.7 MAIL AND OTHER COMMUNICATIONS. After the IPO Date, each of Retail Ventures and DSW may receive mail, facsimiles, packages and other communications properly belonging to the other. Accordingly, at all times after the IPO Date, each of Retail Ventures and DSW authorizes the other to receive and open all mail, telegrams, packages and other communications received by it and not unambiguously intended for the other Party or any of the other Party's officers or directors, and to retain the same to the extent that they relate to the business of the receiving Party or, to the extent that they do not relate to the business of the receiving Party, the receiving Party shall promptly deliver such mail, telegrams, packages or other communications, including, without limitation, notices of any liens or encumbrances on any asset transferred to DSW in connection with its separation from Retail Ventures, (or, in case the same relate to both businesses, copies thereof) to the other Party as provided for in
Section 7.5 hereof. The provisions of this Section 3.7 are not intended to, and shall not, be deemed to constitute an authorization by either Retail Ventures or DSW to permit the other to accept service of process on its behalf and neither Party is or shall be deemed to be the agent of the other for service of process purposes.

Section 3.8 EMPLOYMENT MATTERS.

(a) For a period of two years following the IPO Date, neither the Retail Ventures Group nor the DSW Group will, directly or indirectly, solicit active employees of the other without its consent; PROVIDED that each Party agrees to give such consent if it believes, in good faith, that consent is necessary to avoid the resignation of an employee from one Party that the other Party would wish to employ.

(b) All outstanding options to purchase shares of Retail Ventures and all other Retail Ventures equity awards held by DSW Group employees at the IPO Date will continue to be outstanding until the earlier of (i) the date the option or award is exercised or expires under the terms of the award agreement or (ii) the date the DSW Group employee is deemed to have "terminated" as defined in the plan under which the award was granted or, if later, the end of any post-termination exercise period specified in the award agreement or by the plans' administrative committees.

Section 3.9 PAYMENT OF EXPENSES. Except as otherwise provided in this Agreement, the Inter-Company Agreements or any other agreement between the Parties relating to the IPO or the Distribution, (i) all costs and expenses of the Parties hereto in connection with the IPO (including costs associated with drafting this Agreement, the Inter-Company Agreements and the documents relating to the formation of DSW) shall be paid by DSW; (ii) all costs and expenses of the Parties hereto in connection with the Distribution shall be paid by DSW; and
(iii) all costs and expenses of the Parties hereto in connection with any matter not relating to the IPO or the Distribution shall be paid by the Party which incurs such cost or expense. Notwithstanding the foregoing, DSW and Retail Ventures shall each be responsible for their own internal fees, costs and expenses (e.g., salaries of personnel) incurred in connection with the IPO and the Distribution.

Section 3.10 DISPUTE RESOLUTION.

(a) Any dispute, controversy or claim arising out of or relating to this Agreement or the Inter-Company Agreements, other than the Tax Separation Agreement, or the breach, termination or validity thereof ("Dispute") which arises between the Parties shall first be negotiated between appropriate senior executives of each Party who shall have the authority to resolve the matter. Such executives shall meet to attempt in good faith to negotiate a resolution of the Dispute prior to pursuing other available remedies, within ten
(10) days of receipt by a Party of notice of a Dispute, which date of receipt shall be referred to herein as the "Dispute Resolution Commencement Date." Discussions and correspondence relating to trying to resolve such Dispute shall be treated as confidential information developed for the purpose of settlement and shall be exempt from discovery or production and shall not be admissible in any subsequent proceeding between the Parties.

(b) If the senior executives are unable to resolve the Dispute within sixty (60) days from the Dispute Resolution Commencement Date, then, the Dispute will be submitted to the Board of Directors of each Party. Representatives of each Board shall meet as soon as practicable to attempt in good faith to negotiate a resolution of the Dispute.

(c) If the representatives of the Boards of Directors are unable to resolve the Dispute within one hundred twenty (120) days from the Dispute Resolution Commencement Date, on the request of any Party, the Dispute will be mediated by a mediator appointed pursuant to the mediation rules of the American Arbitration Association ("AAA"). Both Parties will share the administrative costs of the mediation and the mediator's fees and expenses equally, and each Party shall bear all of its other costs and expenses related to the mediation, including but not limited to attorney's fees, witness fees, and travel expenses. The mediation shall take place in Franklin County, Ohio or in whatever alternative forum on which the Parties may agree.

(d) Any Dispute which the Parties cannot resolve through mediation within forty-five days of the appointment of the mediator, shall at the request of any Party be submitted to final and binding arbitration under the then current Commercial Arbitration Rules of the AAA in Franklin County, Ohio. There shall be three (3) neutral arbitrators of whom Retail Ventures shall appoint one and DSW shall appoint one within 30 days of the receipt by the respondent of the demand for arbitration. The two arbitrators so appointed shall select the chair of the arbitral tribunal within 30 days of the appointment of the second arbitrator. If any arbitrator is not appointed within the time limit provided herein, such arbitrator shall be appointed by the AAA by using a list striking and ranking procedure in accordance with its rules. Any arbitrator appointed by the AAA shall be a retired judge or a practicing attorney with no less than fifteen (15) years of experience and an experienced arbitrator. The prevailing Party in such arbitration shall be entitled to be awarded its expenses, including its share of administrative and arbitrator fees and expenses and reasonable attorneys' and other professional fees, incurred in connection with the arbitration (but excluding any costs and fees associated with prior negotiation or mediation). The decision of the arbitrators shall

be final and binding on the Parties and may be enforced in any court of competent jurisdiction.

(e) By agreeing to arbitration, the Parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and the enforcement of any award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies or modify or vacate any temporary or preliminary relief issued by a court, to issue an award for temporary or permanent injunctive relief (including specific performance) and to award damages for the failure of any Party to respect the arbitral tribunal's orders to that effect.

(f) Unless otherwise agreed in writing, the Parties will continue to provide service and honor all other commitments under this Agreement and each Inter-Company Agreement during the course of dispute resolution pursuant to the provisions of this Section 3.10 with respect to all matters not subject to such dispute, controversy or claim.

Section 3.11 GOVERNMENTAL APPROVALS. To the extent that any of the transactions contemplated by this Agreement requires any Governmental Approvals, the Parties will use their best efforts to obtain any such Governmental Approvals.

Section 3.12 NO REPRESENTATION OR WARRANTY.

(a) Retail Ventures does not, in this Agreement or any other agreement, instrument or document contemplated by this Agreement, make any representation as to, warranty of or covenant with respect to:

(i) the value of any asset or thing of value transferred, or to be transferred, to DSW;

(ii) the freedom from encumbrance of any asset or thing of value transferred, or to be transferred, to DSW; PROVIDED, HOWEVER, that Retail Ventures agrees to notify DSW promptly in the event Retail Ventures receives any notice or claim of any encumbrance on or against any asset or thing of value transferred, or to be transferred, to DSW;

(iii) the absence of defenses or freedom from counterclaims with respect to any claim transferred, or to be transferred, to DSW; PROVIDED, HOWEVER, that neither Retail Ventures nor its Subsidiaries have any counterclaims with respect to any claim transferred, or to be transferred, to DSW; or

(iv) the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any asset or thing of value upon its execution, delivery and filing.

Except as may expressly be set forth herein or in any Inter-Company Agreement, all assets transferred, or to be transferred, to DSW have been, or shall be, as the case may be, transferred "AS IS, WHERE IS" and DSW shall bear the economic and legal risk that any conveyance shall prove to be insufficient to vest in DSW good and marketable title, free and clear of any lien, claim, equity or other encumbrance.

(b) DSW does not, in this Agreement or any other agreement, instrument or document contemplated by this Agreement, make any representation as to, warranty of or covenant with respect to:

(i) the value of any asset or thing of value transferred, or to be transferred, to Retail Ventures:

(ii) the freedom from encumbrance of any asset or thing of value transferred, or to be transferred, to Retail Ventures; PROVIDED, HOWEVER, that DSW agrees to notify Retail Ventures promptly in the event DSW receives any notice or claim of any encumbrance on or against any asset or thing of value transferred, or to be transferred, to Retail Ventures;

(iii) the absence of defenses or freedom from counterclaims with respect to any claim transferred, or to be transferred, to Retail Ventures; PROVIDED, HOWEVER, that neither DSW nor its Subsidiaries have any counterclaims with respect to any claim transferred, or to be transferred, to Retail Ventures; or

(iv) the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any asset or thing of value upon its execution, delivery and filing.

Except as may expressly be set forth herein or in any Inter-Company Agreement, all assets transferred, or to be transferred, to Retail Ventures have been, or shall be, as the case may be, transferred "AS IS, WHERE IS" and Retail Ventures shall bear the economic and legal risk that any conveyance shall prove to be insufficient to vest in Retail Ventures good and marketable title, free and clear of any lien, claim, equity or other encumbrance.

Section 3.13 COMPLIANCE WITH LEGAL POLICIES

(a) For so long as Retail Ventures is providing legal services under the Shared Services Agreement, DSW shall comply with all policies and directives identified by Retail Ventures as critical to legal and regulatory compliance; PROVIDED, HOWEVER, that nothing contained herein shall require compliance with policies or directives that, in the opinion of counsel to DSW, do nor comply with then applicable

law. Until the Distribution Date, DSW shall not adopt policies or directives relating to legal or regulatory compliance that are inconsistent with the policies and directives identified by of Retail Ventures as critical to legal and regulatory compliance PROVIDED, HOWEVER, that nothing contained herein shall prevent adoption of policies or directives that, in the opinion of counsel to DSW, are necessary or desirable to comply with then applicable law.

(b) For so long as Retail Ventures is providing services under the Shared Services Agreement, it will take reasonable steps to assure that the employees providing such services comply with all policies and directives identified by DSW as critical to legal and regulatory compliance that are applicable to such employees.

Section 3.14 DEBT REORGANIZATION RELATED DOCUMENTS. For so long as any of the Warrants are outstanding, DSW will not, except with the prior written consent of Retail Ventures, take any action that would: (a) result in an adjustment of the DSW Stock Exercise Amount or the DSW Stock Purchase Price (as defined in the Warrants) or (b) reduce Retail Ventures' ownership below fifty-five percent (55%) of the value of the issued and outstanding Common Shares.

Section 3.15 NORTHLAND. Retail Ventures is a party to a certain lease agreement dated as of September 30, 2003 (but effective February 1, 2004), between Northland Associates LLC, as landlord, and Retail Ventures, as tenant (the "Lease") and to a certain sublease dated April 1, 2005, between Retail Ventures as sublessor and the State of Ohio acting by and through the Department of Administrative Services as sublessee (the "Sublease"). Both the Lease and Sublease relate to property located at 1649 Morse Road, Columbus, Ohio ("Northland"), which, at one time, was intended to serve as new corporate offices for DSW. Retail Ventures expended significant sums at Northland, primarily in anticipation of its use by DSW, which sums are capitalized on the books and records of Retail Ventures and will not be transferred to DSW. Retail Ventures is and will remain liable for each and every obligation of the tenant under the Lease and the sublessor under the Sublease and such obligations are not DSW Liabilities. The foregoing notwithstanding, for so long as the Lease is in effect:

(a) Retail Ventures shall prepare a monthly and annual accounting of the revenues and expenses associated with Northland, the Lease and the Sublease (the "Northland Accounting"), on the basis of generally accepted accounting principles consistent with past Retail Ventures' practices; and the net profit or loss so determined will be allocated two-thirds (2/3) to DSW and one third (1/3) to Retail Ventures.

(b) Not later than ten (10) days after the end of each month and ninety (90) days after the end of each fiscal year, Retail Ventures will deliver a copy of the Northland Accounting to DSW, together with payment of an amount equal to the profit allocated to DSW or an invoice for reimbursement of an amount equal to the loss allocated to DSW, as the case may be. The fiscal year end Northland Accounting will reflect monthly settlements during the preceding accounting periods.

(c) The foregoing notwithstanding, Retail Ventures may, at its option, set off an amount equal to the profit or loss allocated to DSW against any amounts owed to Retail Ventures by DSW or to DSW by Retail Ventures, as the case may be, under any of the Inter-Company Agreements.

(d) The provisions of the second sentence of Section 3.4(g) hereof shall continue to apply to the extent necessary for DSW to conduct reasonable audits of the Northland Accounting.

Section 3.16 GUARANTEES. Each Party agrees that it will not renew or extend any lease, contract or agreement guaranteed by the other party without the consent of the guaranteeing Party.

Section 3.17 RUN-OFF OF ACCOUNTS. The Parties recognize that certain accrued expenses, accounts payable and other Liabilities reflected on the DSW Balance Sheet that were incurred in the ordinary course of business prior to the IPO will continue to be billed to Retail Ventures after the IPO Date. Retail Ventures will pay all such DSW Liabilities in a manner substantially similar to and consistent with the payment practices used prior to the Offering Date and will invoice or notify DSW, on a weekly basis in a manner substantially similar to and consistent with the billing practices used prior to the Offering Date (except as otherwise agreed), of the amounts so paid. DSW agrees to promptly reimburse Retail Ventures for all such payments in a manner substantially similar to and consistent with the payment practices used prior to the Offering Date.

ARTICLE IV
REGISTRATION RIGHTS

Section 4.1 DEMAND REGISTRATION.

(a) The Holders shall have the right after the IPO Date to request in writing (a "Request") (which request shall specify the Registrable Securities intended to be disposed of by such Holders and the intended method of distribution thereof, including in a Rule 415 Offering, if DSW is then eligible to register such Registrable Securities on Form S-3 (or a successor form) for such offering) that DSW register such portion of such Holders' Registrable Securities as shall be specified in the Request (a "Demand Registration") by filing with the Commission, as soon as practicable thereafter, but not later than the 30th day (or the 45th day if the applicable registration form is other than Form S-3) after the receipt of such a Request by DSW, a registration statement (a "Demand Registration Statement") covering such Registrable Securities, and DSW shall use its best efforts to have such Demand Registration Statement declared effective by the Commission as soon as practicable thereafter, but in no event later than the 75th day (or the 90th day if the applicable registration form is other than Form S-3) after the receipt of such a Request, and to keep such Demand Registration Statement Continuously Effective for a period of at least twenty-four (24) months, in the case of a Rule 415 Offering, or, in

all other cases, for a period of at least 180 days following the date on which such Demand Registration Statement is declared effective (or for such shorter period which will terminate when all of the Registrable Securities covered by such Demand Registration Statement shall have been sold pursuant thereto), including, if necessary, by filing with the Commission a post-effective amendment or a supplement to the Demand Registration Statement or the related prospectus or any document incorporated therein by reference or by filing any other required document or otherwise supplementing or amending the Demand Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by DSW for such Demand Registration Statement or by the Securities Act, the Exchange Act, any state securities or blue sky laws, or any rules and regulations thereunder; PROVIDED that such period during which the Demand Registration Statement shall remain Continuously Effective shall, in the case of an Underwritten Offering, be extended for such period (if any) as the underwriters shall reasonably require, including to satisfy, in the judgment of counsel to the underwriters, any prospectus delivery requirements imposed by applicable law.

(b) DSW shall not be obligated to effect more than one (1) Demand Registration in any calendar year. For purposes of the preceding sentence, a Demand Registration shall not be deemed to have been effected (and, therefore, not requested for purposes of paragraph (a) above), (i) unless a Demand Registration Statement with respect thereto has become effective, (ii) if after such Demand Registration Statement has become effective, the offer, sale or distribution of Registrable Securities thereunder is prevented by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable to any Holder and such effect is not thereafter eliminated or (iii) if the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied or waived other than by reason of a failure on the part of any Holder. If DSW shall have complied with its obligations under ARTICLE IV, a right to a Demand Registration pursuant to this Section 4.1 shall be deemed to have been satisfied upon the earlier of (x) the date as of which all of the Registrable Securities included therein shall have been sold to the underwriters or distributed pursuant to the Demand Registration Statement and (y) the date as of which such Demand Registration shall have been Continuously Effective for a period of at least twenty-four (24) months, in the case of a Rule 415 Offering, or, in all other cases, for a period of at least 180 days following the effectiveness of such Demand Registration Statement.

(c) Any request made pursuant to this Section 4.1 shall be addressed to the attention of the secretary of DSW, and shall specify (i) the number of Registrable Securities to be registered (which shall be not less than the lesser of (x) 5% of the total number of Registrable Securities outstanding or (y) the remaining balance of the Registrable Securities then held by the Holders.

(d) DSW may not include in a Demand Registration pursuant to
Section 4.1 hereof shares of DSW Capital Stock for the account of DSW or any subsidiary of DSW, but, if and to the extent required by a contractual obligation, may, subject to compliance with Section 4.1(e), include shares of DSW Capital Stock for the

account of any other Person who holds shares of DSW Capital Stock entitled to be included therein; PROVIDED, HOWEVER, that if the Underwriters' Representative of any offering described in this Section 4.1 shall have informed DSW in writing that in its judgment there is a Maximum Number of shares of DSW Capital Stock that all Holders and any other Persons desiring to participate in such Registration may include in such offering, then DSW shall include in such Demand Registration all Registrable Securities requested to be included in such registration by the Holders together with up to such additional number of shares of DSW Capital Stock that any other Persons entitled to participate in such registration desire to include in such registration up to the Maximum Number that the Underwriters' Representative has informed DSW may be included in such registration without materially and adversely affecting the success or pricing of such offering; PROVIDED that the number of shares of DSW Capital Stock to be offered for the account of all such other Persons participating in such registration shall be reduced in a manner determined by DSW in its sole discretion.

(e) No Holder may participate in any Underwritten Offering under Section 4.1 hereof and no other Person shall be permitted to participate in any such offering pursuant to Section 4.1 hereof unless it completes and executes all customary questionnaires, powers of attorney, custody agreements, underwriting agreements and other customary documents required under the customary terms of such underwriting arrangements. In connection with any Underwritten Offering under Section 4.1 hereof, each participating Holder and DSW and, except in the case of a Rule 415 Offering hereof, each other Person shall be a party to the underwriting agreement with the underwriters and may be required to make certain customary representations and warranties and provide certain customary indemnifications for the benefits of the underwriters; PROVIDED that the Holders shall not be required to make representations and warranties with respect to DSW or their business and operations and shall not be required to agree to any indemnity or contribution provisions less favorable to them than as are set forth herein.

Section 4.2 PIGGYBACK REGISTRATION.

(a) In the event that DSW at any time after the IPO Date proposes to register any of its DSW Capital Stock, any other of its equity securities or securities convertible into or exchangeable for its equity securities (collectively, including DSW Capital Stock, "Other Securities") under the Securities Act, either in connection with a primary offering for cash for the account of DSW, a secondary offering or a combined primary and secondary offering, DSW will each time it intends to effect such a registration, give written notice (a "Company Notice") to all Holders of Registrable Securities at least ten (10) business days prior to the initial filing of a registration statement with the Commission pertaining thereto, informing such Holders of its intent to file such registration statement and of the Holders' right to request the registration of the Registrable Securities held by the Holders. Upon the written request of the Holders made within seven (7) business days after any such Company Notice is given (which request shall specify the Registrable Securities intended to be disposed of by such Holder and, unless (i) the Registrable Securities intended to be disposed of are Class A Common Shares and
(ii) the applicable registration is intended to effect a primary

offering of Class A common shares for cash for the account of DSW, the intended distribution thereof), DSW will use its best efforts to effect the registration under the Securities Act of all Registrable Securities which DSW has been so requested to register by the Holders to the extent required to permit the disposition (in accordance with the intended methods of distribution thereof or, in the case of a registration which is intended to effect a primary offering for cash for the account of DSW, in accordance with DSW's intended method of distribution) of the Registrable Securities so requested to be registered, including, if necessary, by filing with the Commission a post-effective amendment or a supplement to the registration statement filed by DSW or the related prospectus or any document incorporated therein by reference or by filing any other required document or otherwise supplementing or amending the registration statement filed by DSW, if required by the rules, regulations or instructions applicable to the registration form used by DSW for such registration statement or by the Securities Act, any state securities or blue sky laws, or any rules and regulations thereunder; PROVIDED, HOWEVER, that if, at any time after giving written notice of its intention to register any Other Securities and prior to the Effective Date of the registration statement filed in connection with such registration, DSW shall determine for any reason not to register or to delay such registration of the Other Securities, DSW shall give written notice of such determination to each Holder of Registrable Securities and, thereupon, (i) in the case of a determination not to register, DSW shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses incurred in connection therewith or from DSW's obligations with respect to any subsequent registration) and (ii) in the case of a determination to delay such registration, DSW shall be permitted to delay registration of any Registrable Securities requested to be included in such registration statement for the same period as the delay in registering such Other Securities.

(b) If, in connection with a Registration Statement pursuant to this Section 4.2, the Underwriters' Representative of the offering registered thereon shall inform DSW in writing that in its opinion there is a Maximum Number of shares of DSW Capital Stock that may be included therein and if such Registration Statement relates to an offering initiated by DSW of Common Shares being offered for the account of DSW, DSW shall include in such registration:
(i) first, the number of shares DSW proposes to offer ("Company Securities"),
(ii) second, up to the full number of Registrable Securities held by Holders of Registrable Securities that are requested to be included in such registration (Registrable Securities that are so held being sometimes referred to herein as "Retail Ventures Securities") to the extent necessary to reduce the respective total number of shares of DSW Capital Stock requested to be included in such offering to the Maximum Number recommended by such Underwriters' Representative (and in the event that such Underwriters' Representative advises that less than all of such Retail Ventures Securities may be included in such offering, the Holders of Registrable Securities may withdraw their request for registration of their Registrable Securities under this Section 4.2 and not less than 90 days subsequent to the Effective Date of the registration statement for the registration of such Other Securities request that such registration be effected as a registration under Section 4.1 to the extent permitted thereunder) and
(iii) third, up to the full number of the Other Securities (other than Company Securities), if any, in excess of the number of Company Securities and Retail Ventures Securities to be

sold in such offering to the extent necessary to reduce the respective total number of shares of DSW Capital Stock requested to be included in such offering to the Maximum Number recommended by such Underwriters' Representative (and, if such number is less than the full number of such Other Securities, such number shall be allocated pro rata among the holders of such Other Securities (other than Company Securities) on the basis of the number of securities requested to be included therein by each such holder).

(c) If, in connection with a Registration Statement pursuant to this Section 4.2, the Underwriters' Representative of the offering registered thereon shall inform DSW in writing that in its opinion there is a Maximum Number of shares of DSW Capital Stock that may be included therein and if such Registration Statement relates to an offering initiated by any Person other than DSW (the "Other Holders"), DSW shall include in such registration the number of securities (including Registrable Securities) that such underwriters advise can be so sold without adversely affecting such offering, allocated pro rata among the Other Holders and the Holders of Registrable Securities on the basis of the number of securities (including Registrable Securities) requested to be included therein by each Other Holder and Holder of Registrable Securities.

(d) No Holder may participate in any Underwritten Offering under Section 5.2 hereof and no other Person shall be permitted to participate in any such offering pursuant to Section 5.2 hereof unless it completes and executes all customary questionnaires, powers of attorney, custody agreements, underwriting agreements and other customary documents required under the customary terms of such underwriting arrangements. In connection with any Underwritten Offering under Section 5.2 hereof, each participating Holder and DSW and each other Person shall be a party to the underwriting agreement with the underwriters and may be required to make certain customary representations and warranties and provide certain customary indemnifications for the benefits of the underwriters; PROVIDED that the Holders shall not be required to make representations and warranties with respect to DSW or their business and operations and shall not be required to agree to any indemnity or contribution provisions less favorable to them than as are set forth herein.

(e) DSW shall not be required to effect any registration of Registrable Securities under this Section 4.2 incidental to the registration of any of its securities in connection with DSW's issuance of registered shares of DSW Capital Stock in mergers, acquisitions, reorganizations, exchange offers, subscription offers, dividend reinvestment plans or stock option or other executive or employee benefit or compensation plans.

(f) The registration rights granted pursuant to the provisions of this Section 4.2 shall be in addition to the registration rights granted pursuant to Section 4.1. No registration of Registrable Securities effected under this Section 4.2 shall relieve DSW of its obligation to effect a registration of Registrable Securities pursuant to Section 4.1.

Section 4.3 EXPENSES. Except as provided herein, DSW shall pay all Registration Expenses in connection with all registrations of Registrable Securities.

Notwithstanding the foregoing, each Holder of Registrable Securities and DSW shall be responsible for its own internal administrative and similar costs, which shall not constitute Registration Expenses.

Section 4.4 BLACKOUT PERIOD. DSW shall be entitled to elect that a Registration Statement not be usable, or that the filing thereof be delayed beyond the time otherwise required, for a reasonable period of time (a "Blackout Period"), if DSW determines in good faith that the registration and distribution of Registrable Securities (or the use or filing of the IPO Registration Statement or related prospectus) would interfere with any pending material financing, merger, acquisition, consolidation, recapitalization, corporate reorganization or any other material corporate development involving DSW or any of its Subsidiaries or would require premature disclosure thereof that would be detrimental to DSW and promptly gives the Holders of Registrable Securities written notice of such determination, and if requested by Holders and to the extent such action would not violate applicable law, DSW will promptly deliver to the Holders a general statement of the reasons for such postponement or restriction on use and to the extent practicable an approximation of the anticipated delay.

Section 4.5 SELECTION OF UNDERWRITERS. If any Rule 415 Offering or any offering pursuant to a Demand Registration Statement is an Underwritten Offering, Retail Ventures will select a managing underwriter or underwriters to administer the offering, which managing underwriter shall be reasonably satisfactory to DSW. DSW shall have the right to select a managing underwriter or underwriters to administer any Underwritten Offering contemplated by Section 5.2.

Section 4.6 OBLIGATIONS OF DSW. If and whenever DSW is required to effect the registration of any Registrable Securities under the Securities Act as provided in this ARTICLE IV, DSW shall as promptly as practicable:

(a) prepare, file and use its best efforts to cause to become effective a registration statement under the Securities Act relating to the Registrable Securities to be offered;

(b) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities until the earlier of (i) such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition set forth in such registration statement and
(ii) the expiration of one hundred eighty (180) days after such registration statement becomes effective; PROVIDED, that such one hundred eighty (180) day period shall be extended for such number of days that equals the number of days elapsing from (x) the date the written notice contemplated by paragraph (f) below is given by DSW to (y) the date on which DSW delivers to Holders of Registrable Securities the supplement or amendment contemplated by paragraph (f) below;

(c) furnish to Holders of Registrable Securities and to any underwriter of such Registrable Securities such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act, such documents incorporated by reference in such registration statement or prospectus, and such other documents, as Holders of Registrable Securities or such underwriter may reasonably request, and a copy of any and all transmittal letters or other correspondence to or received from the Commission or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering;

(d) use its best efforts to register or qualify all Registrable Securities covered by such registration statement under the securities or blue sky laws of such jurisdictions as the Holders of such Registrable Securities or any underwriter to such Registrable Securities shall request, and use its best efforts to obtain all appropriate registrations, permits and consents in connection therewith, and do any and all other acts and things which may be necessary or advisable to enable the Holders of Registrable Securities or any such underwriter to consummate the disposition in such jurisdictions of its Registrable Securities covered by such registration statement; PROVIDED, that DSW shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any such jurisdiction wherein it is not so qualified or to consent to general service of process in any such jurisdiction;

(e) (i) use its best efforts to furnish to each Holder of Registrable Securities included in such registration (each, a "Selling Holder") and to any underwriter of such Registrable Securities an opinion of counsel for DSW addressed to each Selling Holder and dated the date of the closing under the underwriting agreement (if any) (or if such offering is not underwritten, dated the Effective Date of the registration statement) and (ii) use its best efforts to furnish to each Selling Holder a "cold comfort" letter addressed to each Selling Holder and signed by the independent public accountants who have audited the financial statements of DSW included in such registration statement, in each such case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to underwriters in underwritten public offerings of securities and such other matters as the Selling Holders may reasonably request and, in the case of such accountants' letter, with respect to events subsequent to the date of such financial statements;

(f) as promptly as practicable, notify the Selling Holders in writing (i) at any time when a prospectus relating to a registration made pursuant to Section 4.1 or Section 4.2 contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading due to the occurrence of any event and (ii) of any request by the Commission or any other regulatory body or other body having jurisdiction for any amendment of or supplement to

any registration statement or other document relating to such offering, and in either such case, at the request of the Selling Holders prepare and furnish to the Selling Holders a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading;

(g) if reasonably requested by the lead or managing underwriters, use its best efforts to list all such Registrable Securities covered by such registration on each securities exchange and automated inter-dealer quotation system on which a class of common equity securities of DSW is then listed;

(h) to the extent reasonably requested by the lead or managing underwriters, send appropriate officers of DSW to attend any "road shows" scheduled in connection with any such registration, with all out-of-pocket costs and expense incurred by DSW or such officers in connection with such attendance to be paid by DSW;

(i) furnish or cause to be furnished for delivery in connection with the closing of any offering of Registrable Securities pursuant to a registration effected pursuant to Section 4.1 or Section 4.2 unlegended certificates representing ownership of the Registrable Securities being sold in such denominations as shall be requested by the Selling Holders or the underwriters; and

(j) use its best efforts to take all other reasonable and customary steps typically taken by issuers to effect the registration and disposition of such Registrable Securities as contemplated hereby.

Section 4.7 OBLIGATIONS OF SELLING HOLDERS. Each Selling Holder agrees by having its securities treated as Registrable Securities hereunder that, upon receipt of written notice from DSW specifying that the prospectus relating to a registration made pursuant to Section 4.1 or Section 4.2 contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading due to the occurrence of any event, such Selling Holder will forthwith discontinue disposition of Registrable Securities until such Selling Holder is advised by DSW that the use of the prospectus may be resumed and is furnished with a supplemented or amended prospectus as contemplated by Section 4.6(f) hereof, and, if so directed by DSW, such Selling Holder will deliver to DSW all copies of the prospectus covering such Registrable Securities then in such Selling Holder's possession at the time of receipt of such notice.

Section 4.8 UNDERWRITING; DUE DILIGENCE.

(a) If requested by the underwriters for any Underwritten Offering of Registrable Securities pursuant to a registration requested under this ARTICLE IV, DSW shall enter into an underwriting agreement in a form reasonably

satisfactory to DSW with such underwriters for such offering, which agreement will contain such representations and warranties by DSW and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 4.9, and agreements as to the provision of opinions of counsel and accountants' letters to the effect and to the extent provided in Section 4.6(e). The Selling Holders on whose behalf the Registrable Securities are to be distributed by such underwriters shall be a party to any such underwriting agreement and the representations and warranties by, and the other agreements on the part of, DSW to and for the benefit of such underwriters, shall also be made to and for the benefit of such Selling Holders. Such underwriting agreement shall also contain such representations and warranties by such Selling Holders and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 4.9.

(b) In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act pursuant to this ARTICLE IV, DSW shall give the Holders of such Registrable Securities and the underwriters, if any, and their respective counsel and accountants, such reasonable and customary access to its books and records and such opportunities to discuss the business of DSW with its officers and the independent public accountants who have certified the financial statements of DSW as shall be necessary, in the opinion of such Holders and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act; PROVIDED, that such Holders and the underwriters and their respective counsel and accountants shall use their reasonable best efforts to coordinate any such investigation of the books and records of DSW and any such discussions with DSW's officers and accountants so that all such investigations occur at the same time and all such discussions occur at the same time.

Section 4.9 INDEMNIFICATION AND CONTRIBUTION.

(a) In the case of each offering of Registrable Securities made pursuant to this ARTICLE IV, DSW agrees to indemnify and hold harmless, to the extent permitted by law, each Selling Holder, each underwriter of Registrable Securities so offered and each Person, if any, who controls any of the foregoing Persons within the meaning of the Securities Act and the officers, directors, affiliates, employees and agents of each of the foregoing, against any and all losses, liabilities, costs (including reasonable attorney's fees and disbursements), claims and damages, joint or several, to which they or any of them may become subject, under the Securities Act or otherwise, including any amount paid in settlement of any litigation commenced or threatened, insofar as such losses, liabilities, costs, claims and damages (or actions or proceedings in respect thereof, whether or not such indemnified Person is a party thereto) arise out of or are based upon any untrue statement by DSW or alleged untrue statement by DSW of a material fact contained in the registration statement (or in any preliminary or final prospectus included therein) or in any offering memorandum or other offering document relating to the

offering and sale of such Registrable Securities prepared by DSW or at its direction, or any amendment thereof or supplement thereto, or in any document incorporated by reference therein, or any omission by DSW or alleged omission by DSW to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; PROVIDED, that DSW shall not be liable to any Person in any such case to the extent that any such loss, liability, cost, claim or damage arises out of or relates to any untrue statement or alleged untrue statement, or any omission, if such statement or omission shall have been made in reliance upon and in conformity with information relating to a Selling Holder or another holder of securities included in such registration statement furnished to DSW by or on behalf of such Selling Holder or underwriter, as the case may be, specifically for use in the registration statement (or in any preliminary or final prospectus included therein), offering memorandum or other offering document, or any amendment thereof or supplement thereto. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Selling Holder or any other holder and shall survive the transfer of such securities. The foregoing indemnity agreement is in addition to any liability that DSW may otherwise have to each Selling Holder, or other holder or underwriter of the Registrable Securities or any controlling person of the foregoing and the officers, directors, affiliates, employees and agents of each of the foregoing; PROVIDED, further, that, in the case of an offering with respect to which a Selling Holder has designated the lead or managing underwriters (or a Selling Holder is offering Registrable Securities directly, without an underwriter), this indemnity does not apply to any loss, liability, cost, claim or damage arising out of or relating to any untrue statement or alleged untrue statement or omission or alleged omission in any preliminary prospectus or offering memorandum if a copy of a final prospectus or offering memorandum was not sent or given by or on behalf of any underwriter (or such Selling Holder or other holder, as the case may be) to such Person asserting such loss, liability, cost, claim or damage at or prior to the written confirmation of the sale of the Registrable Securities as required by the Securities Act and such untrue statement or omission had been corrected in such final prospectus or offering memorandum.

(b) In the case of each offering made pursuant to this Agreement, each Selling Holder, by exercising its registration rights hereunder, agrees to indemnify and hold harmless, and to cause each underwriter of Registrable Securities included in such offering (in the same manner and to the same extent as set forth in Section 4.9(a)) to agree to indemnify and hold harmless to the extent permitted by law, DSW, each other underwriter who participates in such offering, each other Selling Holder or other holder with securities included in such offering and in the case of an underwriter, such Selling Holder or other holder, and each Person, if any, who controls any of the foregoing within the meaning of the Securities Act and the officers, directors, affiliates, employees and agents of each of the foregoing, against any and all losses, liabilities, costs, claims and damages to which they or any of them may become subject, under the Securities Act or otherwise, including any amount paid in settlement of any litigation commenced or threatened, insofar as such losses, liabilities, costs, claims and damages (or actions or proceedings in respect thereof, whether or not such indemnified Person is a party thereto) arise out of or are based upon any untrue statement or alleged untrue statement by such Selling Holder or underwriter, as the case may be, of a material fact contained in the

registration statement (or in any preliminary or final prospectus included therein) or in any offering memorandum or other offering document relating to the offering and sale of such Registrable Securities prepared by DSW or at its direction, or any amendment thereof or supplement thereto, or any omission by such Selling Holder or underwriter, as the case may be, or alleged omission by such Selling Holder or underwriter, as the case may be, of a material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that such untrue statement of a material fact is contained in, or such material fact is omitted from, information relating to such Selling Holder or underwriter, as the case may be, furnished to DSW by or on behalf of such Selling Holder or underwriter, as the case may be, specifically for use in such registration statement (or in any preliminary or final prospectus included therein), offering memorandum or other offering document. The foregoing indemnity is in addition to any liability which such Selling Holder or underwriter, as the case may be, may otherwise have to DSW, or controlling persons and the officers, directors, affiliates, employees, and agents of each of the foregoing; PROVIDED, that, in the case of an offering made pursuant to this Agreement with respect to which DSW has designated the lead or managing underwriters (or DSW is offering securities directly, without an underwriter), this indemnity does not apply to any loss, liability, cost, claim, or damage arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission in any preliminary prospectus or offering memorandum if a copy of a final prospectus or offering memorandum was not sent or given by or on behalf of any underwriter (or DSW, as the case may be) to such Person asserting such loss, liability, cost, claim or damage at or prior to the written confirmation of the sale of the Registrable Securities as required by the Securities Act and such untrue statement or omission had been corrected in such final prospectus or offering memorandum.

(c) Each party indemnified under paragraph (a) or (b) above shall, promptly after receipt of notice of a claim or action against such indemnified party in respect of which indemnity may be sought hereunder, notify the indemnifying party in writing of the claim or action; PROVIDED, that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party on account of the indemnity agreement contained in paragraph (a) or (b) above except to the extent that the indemnifying party was actually prejudiced by such failure, and in no event shall such failure relieve the indemnifying party from any other liability that it may have to such indemnified party. If any such claim or action shall be brought against an indemnified party, and it shall have notified the indemnifying party thereof, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified party and indemnifying parties may exist in respect of such claim, the indemnifying party shall be entitled to participate therein, and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 4.9 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation. Any indemnifying party against whom indemnity may be sought under this Section 4.9

shall not be liable to indemnify an indemnified party if such indemnified party settles such claim or action without the consent of the indemnifying party. The indemnifying party may not agree to any settlement of any such claim or action, other than solely for monetary damages for which the indemnifying party shall be responsible hereunder, the result of which any remedy or relief shall be applied to or against the indemnified party, without the prior written consent of the indemnified party, which consent shall not be unreasonably withheld. In any action hereunder as to which the indemnifying party has assumed the defense thereof with counsel satisfactory to the indemnified party, the indemnified party shall continue to be entitled to participate in the defense thereof, with counsel of its own choice, but the indemnifying party shall not be obligated hereunder to reimburse the indemnified party for the costs thereof.

(d) If the indemnification provided for in this Section 4.9 shall for any reason be unavailable (other than in accordance with its terms) to an indemnified party in respect of any loss, liability, cost, claim or damage referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, cost, claim or damage (i) as between DSW and the Selling Holders on the one hand and the underwriters on the other, in such proportion as shall be appropriate to reflect the relative benefits received by DSW and the Selling Holders on the one hand and the underwriters on the other hand or, if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of DSW and the Selling Holders on the one hand and the underwriters on the other with respect to the statements or omissions which resulted in such loss, liability, cost, claim or damage as well as any other relevant equitable considerations and (ii) as between DSW on the one hand and each Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of DSW and of each Selling Holder in connection with such statements or omissions as well as any other relevant equitable considerations. The relative benefits received by DSW and the Selling Holders on the one hand and the underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by DSW and the Selling Holders bear to the total underwriting discounts and commissions received by the underwriters, in each case as set forth in the table on the cover page of the prospectus. The relative fault of DSW and the Selling Holders on the one hand and of the underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by DSW and the Selling Holders or by the underwriters. The relative fault of DSW on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, but not by reference to any indemnified party's stock ownership in DSW. The amount paid or payable by an indemnified party as a result of the loss, cost, claim, damage or liability, or action in respect thereof, referred to above in this paragraph (d) shall be deemed to include, for purposes of this paragraph (d), any legal or other expenses reasonably incurred by such

indemnified party in connection with investigating or defending any such action or claim. DSW and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 4.9 were determined by pro rata allocation (even if the underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. Notwithstanding any other provision of this Section 4.9, no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities of such Selling Holder were offered to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(e) Indemnification and contribution similar to that specified in the preceding paragraphs of this Section 4.9 (with appropriate modifications) shall be given by DSW, the Selling Holders and any underwriters with respect to any required registration or other qualification of securities under any state law or regulation or governmental authority.

(f) The obligations of the parties under this Section 4.9 shall be in addition to any liability which any party may otherwise have to any other party.

Section 4.10 RULE 144 AND FORM S-3. Commencing ninety (90) days after the IPO Date, DSW shall use its best efforts to ensure that the conditions to the availability of Rule 144 set forth in paragraph (c) thereof shall be satisfied. Upon the request of any Holder of Registrable Securities, DSW will deliver to such Holder a written statement as to whether it has complied with such requirements. DSW further agrees to use its best efforts to cause all conditions to the availability of Form S-3 (or any successor form) under the Securities Act for the filing of registration statements under this Agreement to be met as soon as practicable after the IPO Date.

Section 4.11 HOLDBACK AGREEMENT.

(a) If so requested by the Underwriters' Representative in connection with an offering of securities covered by a registration statement filed by DSW, whether or not Registrable Securities of the Holders are included therein, each Holder shall agree not to effect any sale or distribution of the Shares, including any sale under Rule 144, without the prior written consent of the Underwriters' Representative (otherwise than through the registered public offering then being made), within seven (7) days prior to or ninety (90) days (or such lesser period as the Underwriters' Representative may permit) after the Effective Date of the registration statement (or the commencement of the offering to the public of such Registrable Securities in the case of Rule 415 Offerings). The Holders shall not be subject to the restrictions set forth in this Section 4.11 for longer than ninety-seven (97) days during any 12-month period and a Holder shall no longer be subject to such restrictions at such time as such Holder shall own less than 10% of the then-outstanding Registrable Securities on a fully-diluted basis.

(b) If so requested by the Underwriters' Representative in connection with an offering of any Registrable Securities, DSW shall agree not to effect any sale or distribution of DSW Capital Stock, without the prior written consent of the Underwriters' Representative (otherwise than through the registered public offering then being made or in connection with any acquisition or business combination transaction and other than in connection with stock options and employee benefit plans and compensation), within seven (7) days prior to or ninety (90) days (or such lesser period as the Underwriters' Representative may permit) after the Effective Date of the registration statement (or the commencement of the offering to the public of such Registrable Securities in the case of Rule 415 Offerings) and shall use its best efforts to obtain and enforce similar agreements from any other Persons if requested by the Underwriters' Representative; PROVIDED that DSW or such Persons shall not be subject to the restrictions set forth in this Section 4.11 for longer than ninety-seven (97) days during any twelve (12) month period.

(c) Notwithstanding anything else in this Section 4.11 to the contrary, no Holder shall be precluded from distributing to any or all of its stockholders any or all of the Registrable Securities.

Section 4.12 TERM. This ARTICLE IV shall remain in effect until all Registrable Securities held by Holders have been transferred by them to other Persons.

ARTICLE V
MUTUAL RELEASES; INDEMNIFICATION

Section 5.1 RELEASE OF PRE-IPO DATE CLAIMS.

(a) DSW RELEASE. Except as provided in Section 5.1(c), as of the IPO Date, DSW does hereby, for itself and as agent for each member of the DSW Group, remise, release and forever discharge the Retail Ventures Indemnitees from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any past acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the IPO Date, including in connection with the transactions and all other activities to implement the IPO.

(b) RETAIL VENTURES RELEASE. Except as provided in Section 5.1(c), as of the IPO Date, Retail Ventures does hereby, for itself and as agent for each member of the Retail Ventures Group, remise, release and forever discharge the DSW Indemnitees from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any past acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the IPO Date, including in connection with the transactions and all other activities to implement the IPO.

(c) NO IMPAIRMENT. Nothing contained in Section 5.1(a) or
Section 5.1(b) shall limit or otherwise affect any Party's rights or obligations pursuant to or contemplated by this Agreement or any Inter-Company Agreement, in each case in accordance with its terms, including, without limitation, any obligations relating to indemnification, including indemnification pursuant to
Section 5.2 and Section 5.3 of this Agreement, and any Insurance Proceeds under any Retail Ventures Insurance Policies relating to the DSW Business which DSW is entitled to be paid.

(d) NO ACTIONS AS TO RELEASED PRE-IPO DATE CLAIMS. DSW agrees, for itself and as agent for each member of the DSW Group, not to make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Retail Ventures or any member of the Retail Ventures Group, or any other Person released pursuant to
Section 5.1(a), with respect to any Liabilities released pursuant to Section
5.1(a). Retail Ventures agrees, for itself and as agent for each member of the Retail Ventures Group, not to make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against DSW or any member of the DSW Group, or any other Person released pursuant to Section 5.1(b), with respect to any Liabilities released pursuant to Section 5.1(b).

(e) FURTHER INSTRUMENTS. At any time, at the request of any other Party, each Party shall cause each member of its respective Retail Ventures Group or DSW Group, as applicable, to execute and deliver releases reflecting the provisions hereof.

Section 5.2 INDEMNIFICATION BY DSW. Except as otherwise provided in this Agreement, DSW shall, for itself and as agent for each member of the DSW Group, indemnify, defend (or, where applicable, pay the defense costs for) and hold harmless the Retail Ventures Indemnitees from and against, and shall reimburse such Retail Ventures Indemnitees with respect to, any and all Losses that any third party seeks to impose upon the Retail Ventures Indemnitees, or which are imposed upon the Retail Ventures Indemnitees, and that relate to, arise or result from, whether prior to or following the IPO Date, any of the following items (without duplication):

(a) any DSW Liability;

(b) any breach by DSW or any member of the DSW Group of this Agreement or any of the Inter-Company Agreements; and

(c) any IPO Liabilities, other than the Retail Ventures Portions.

In the event that any member of the DSW Group makes a payment to the Retail Ventures Indemnitees hereunder, and any of the Retail Ventures Indemnitees subsequently diminishes the Liability on account of which such payment was made, either directly or through a third-party recovery (other than a recovery indirectly from Retail Ventures), Retail Ventures will promptly repay (or will procure Retail Ventures Indemnitee to promptly repay) such member of the DSW Group the amount by which the payment

made by such member of the DSW Group exceeds the actual cost of the associated indemnified Liability.

Section 5.3 INDEMNIFICATION BY RETAIL VENTURES. Except as otherwise provided in this Agreement, Retail Ventures shall, for itself and as agent for each member of the Retail Ventures Group, indemnify, defend (or, where applicable, pay the defense costs for) and hold harmless the DSW Indemnitees from and against, and shall reimburse such DSW Indemnitee with respect to, any and all Losses that any third party seeks to impose upon the DSW Indemnitees, or which are imposed upon the DSW Indemnitees, and that relate to, arise or result from, whether prior to or following the IPO Date, with any of the following items (without duplication):

(a) any Liability of the Retail Ventures Group and all Liabilities arising out of the operation or conduct of the Retail Ventures Business (in each case excluding the DSW Liabilities);

(b) any breach by Retail Ventures or any member of the Retail Ventures Group of this Agreement or any of the Inter-Company Agreements; and

(c) any IPO Liabilities with respect to the Retail Ventures Portions only.

In the event that any member of the Retail Ventures Group makes a payment to the DSW Indemnitees hereunder, and any of the DSW Indemnitees subsequently diminishes the Liability on account of which such payment was made, either directly or through a third-party recovery (other than a recovery indirectly from DSW), DSW will promptly repay (or will procure a DSW Indemnitee to promptly repay) such member of the Retail Ventures Group the amount by which the payment made by such member of the Retail Ventures Group exceeds the actual cost of the indemnified Liability.

Section 5.4 ANCILLARY AGREEMENT LIABILITIES. Notwithstanding any other provision in this Agreement to the contrary, any Liability specifically assumed by, or allocated to, a Party in any of the Inter-Company Agreements shall be governed exclusively by the terms of such Inter-Company Agreement.

Section 5.5 OTHER AGREEMENTS EVIDENCING INDEMNIFICATION OBLIGATIONS. Retail Ventures hereby agrees to execute, for the benefit of any DSW Indemnitee, such documents as may be reasonably requested by such DSW Indemnitee, evidencing Retail Ventures' agreement that the indemnification obligations of Retail Ventures set forth in this Agreement inure to the benefit of and are enforceable by such DSW Indemnitee. DSW hereby agrees to execute, for the benefit of any Retail Ventures Indemnitee, such documents as may be reasonably requested by such Retail Ventures Indemnitee, evidencing DSW's agreement that the indemnification obligations of DSW set forth in this Agreement inure to the benefit of and are enforceable by such Retail Ventures Indemnitee.

Section 5.6 REDUCTIONS FOR INSURANCE PROCEEDS AND OTHER RECOVERIES.

(a) INSURANCE PROCEEDS. The amount that any Indemnifying Party is or may be required to provide indemnification to or on behalf of any Indemnitee pursuant to Section 5.2 or Section 5.3, as applicable, shall be reduced (retroactively or prospectively) by any Insurance Proceeds or other amounts actually recovered from third parties by or on behalf of such Indemnitee in respect of the related Loss. The existence of a claim by an Indemnitee for monies from an insurer or against a third party in respect of any indemnifiable Loss shall not, however, delay any payment pursuant to the indemnification provisions contained herein and otherwise determined to be due and owing by an Indemnifying Party. Rather, the Indemnifying Party shall make payment in full of the amount determined to be due and owing by it against an assignment by the Indemnitee to the Indemnifying Party of the entire claim of the Indemnitee for Insurance Proceeds or against such third party. Notwithstanding any other provisions of this Agreement, it is the intention of the Parties that no insurer or any other third party shall be (i) entitled to a benefit it would not be entitled to receive in the absence of the foregoing indemnification provisions, or (ii) relieved of the responsibility to pay any claims for which it is obligated. If an Indemnitee has received the payment required by this Agreement from an Indemnifying Party in respect of any indemnifiable Loss and later receives Insurance Proceeds or other amounts in respect of such indemnifiable Loss, then such Indemnitee shall hold such Insurance Proceeds or other amounts in trust for the benefit of the Indemnifying Party (or Indemnifying Parties) and shall pay to the Indemnifying Party, as promptly as practicable after receipt, a sum equal to the amount of such Insurance Proceeds or other amounts received, up to the aggregate amount of any payments received from the Indemnifying Party pursuant to this Agreement in respect of such indemnifiable Loss (or, if there is more than one Indemnifying Party, the Indemnitee shall pay each Indemnifying Party, its proportionate share (based on payments received from the Indemnifying Parties) of such Insurance Proceeds).

(b) TAX COST/TAX BENEFIT. The amount that any Indemnifying Party is or may be required to provide indemnification to or on behalf of any Indemnitee pursuant to Section 5.2 or Section 5.3, as applicable, shall be (i) increased to take account of any net Tax cost incurred by the Indemnitee arising from the receipt or accrual of an indemnification payment hereunder (grossed up for such increase) and (ii) reduced to take account of any net Tax benefit realized by the Indemnitee arising from incurring or paying such loss or other liability. In computing the amount of any such Tax cost or Tax benefit, the Indemnitee shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt or accrual of any indemnification payment hereunder or incurring or paying any indemnified Loss. Any indemnification payment hereunder shall initially be made without regard to this Section 5.6(b) and shall be increased or reduced to reflect any such net Tax cost (including gross-up) or net Tax benefit only after the Indemnitee has actually realized such cost or benefit. For purposes of this Agreement, an Indemnitee shall be deemed to have "actually realized" a net Tax cost or a net Tax benefit to the extent that, and at such time as, the amount of Taxes payable by such Indemnitee is increased above or reduced below, as the case may be, the amount of Taxes that such Indemnitee would be required to pay but for the receipt or accrual of the indemnification payment or the incurrence or payment of such Loss, as the case may be. The amount of any increase or

reduction hereunder shall be adjusted to reflect any Final Determination with respect to the Indemnitee's liability for Taxes, and payments between such indemnified parties to reflect such adjustment shall be made if necessary. Notwithstanding any other provision of this Agreement, to the extent permitted by applicable law, the Parties hereto agree that any Indemnity Payment made hereunder shall be treated as a capital contribution or dividend distribution, as the case may be, immediately prior to the IPO Date and, accordingly, not includible in the taxable income of the recipient or deductible by the payor.

Section 5.7 PROCEDURES FOR DEFENSE, SETTLEMENT AND INDEMNIFICATION OF THIRD PARTY CLAIMS.

(a) NOTICE OF CLAIMS. If an Indemnitee shall receive notice or otherwise learn of the assertion by a Person (including any Governmental Authority) who is not a member of the Retail Ventures Group or the DSW Group of any claim or of the commencement by any such Person of any Action (collectively, a "Third Party Claim") with respect to which an Indemnifying Party may be obligated to provide indemnification, Retail Ventures and DSW (as applicable) will ensure that such Indemnitee shall give such Indemnifying Party written notice thereof within thirty (30) days after becoming aware of such Third Party Claim. Any such notice shall describe the Third Party Claim in reasonable detail. Notwithstanding the foregoing, the delay or failure of any Indemnitee or other Person to give notice as provided in this Section 5.7(a) shall not relieve the related Indemnifying Party of its obligations under this ARTICLE V, except to the extent that such Indemnifying Party is actually and substantially prejudiced by such delay or failure to give notice.

(b) DEFENSE BY INDEMNIFYING PARTY. An Indemnifying Party shall be entitled to participate in the defense of any Third Party Claim and, to the extent that it wishes, at its cost, risk and expense, to assume the defense thereof, with counsel reasonably satisfactory to the party seeking indemnification. After timely notice from the Indemnifying Party to the Indemnitee of such election to so assume the defense thereof, the Indemnifying Party shall not be liable to the party seeking indemnification for any legal expenses of other counsel or any other expenses subsequently incurred by Indemnitee in connection with the defense thereof. The Indemnitee agrees to cooperate in all reasonable respects with the Indemnifying Party and its counsel in the defense against any Third Party Claim. The Indemnifying Party shall be entitled to compromise or settle any Third Party Claim as to which it is providing indemnification, which compromise or settlement shall be made only with the written consent of the Indemnitee, such consent not to be unreasonably withheld.

(c) DEFENSE BY INDEMNITEE. If an Indemnifying Party fails to assume the defense of a Third Party Claim within thirty (30) calendar days after receipt of notice of such claim, Indemnitee will, upon delivering notice to such effect to the Indemnifying Party, have the right to undertake the defense, compromise or settlement of such Third Party Claim on behalf of and for the account of the Indemnifying Party subject to the limitations as set forth in this Section 5.7; PROVIDED, HOWEVER, that such Third Party Claim shall not be compromised or settled without the

written consent of the Indemnifying Party, which consent shall not be unreasonably withheld. If the Indemnitee assumes the defense of any Third Party Claim, it shall keep the Indemnifying Party reasonably informed of the progress of any such defense, compromise or settlement. The Indemnifying Party shall reimburse all such costs and expenses of the Indemnitee in the event it is ultimately determined that the Indemnifying Party is obligated to indemnify the Indemnitee with respect to such Third Party Claim. In no event shall an Indemnifying Party be liable for any settlement effected without its consent, which consent will not be unreasonably withheld.

Section 5.8 ADDITIONAL MATTERS.

(a) COOPERATION IN DEFENSE AND SETTLEMENT. With respect to any Third Party Claim that implicates both DSW and Retail Ventures in a material fashion due to the allocation of Liabilities, responsibilities for management of defense and related indemnities set forth in this Agreement or any of the Inter-Company Agreements, the Parties agree to cooperate fully and maintain a joint defense (in a manner that will preserve the attorney-client privilege, joint defense or other privilege with respect thereto) so as to minimize such Liabilities and defense costs associated therewith. The Party that is not responsible for managing the defense of such Third Party Claims shall, upon reasonable request, be consulted with respect to significant matters relating thereto and may, if necessary or helpful, associate counsel to assist in the defense of such claims.

(b) PRE-IPO DATE ACTIONS. Except with respect to matters pertaining solely to, or solely in connection with, the DSW Business, Retail Ventures may, in its sole discretion, have exclusive authority and control over the investigation, prosecution, defense and appeal of all Actions pending at the IPO Date relating to or arising in connection with, in any manner, the DSW assets or the DSW Liabilities if Retail Ventures or a member of the Retail Ventures Group is named as a party thereto; PROVIDED, HOWEVER, that Retail Ventures must obtain the written consent of DSW, such consent not to be unreasonably withheld, to settle or compromise or consent to the entry of judgment with respect to such Action. After any such compromise, settlement, consent to entry of judgment or entry of judgment, Retail Ventures shall reasonably and fairly allocate to DSW and DSW shall be responsible for DSW's proportionate share of any such compromise, settlement, consent or judgment attributable to the DSW Business, the DSW assets or the DSW Liabilities, including its proportionate share of the costs and expenses associated with defending same.

(c) SUBSTITUTION. In the event of an Action in which the Indemnifying Party is not a named defendant, if either the Indemnitee or the Indemnifying Party shall so request, the Parties shall endeavor to substitute the Indemnifying Party for the named defendant. If such substitution or addition cannot be achieved for any reason or is not requested, the rights and obligations of the Parties regarding indemnification and the management of the defense of claims as set forth in this ARTICLE V shall not be altered.

(d) SUBROGATION. In the event of payment by or on behalf of any Indemnifying Party to or on behalf of any Indemnitee in connection with any Third Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee, in whole or in part based upon whether the Indemnifying Party has paid all or only part of the Indemnitee's Liability, as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third Party Claim against any claimant or plaintiff asserting such Third Party Claim or against any other person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

Section 5.9 SURVIVAL OF INDEMNITIES. Subject to Section 5.5, the rights and obligations of the members of the Retail Ventures Group and the DSW Group under this ARTICLE V shall survive the sale or other transfer by any Party of any assets or businesses or the assignment by it of any Liabilities or the sale by any member of the Retail Ventures Group or the DSW Group of the capital stock or other equity interests of any Subsidiary to any Person.

ARTICLE VI
INSURANCE MATTERS

Section 6.1 DSW INSURANCE COVERAGE DURING THE INSURANCE TRANSITION PERIOD. As more fully provided in the Shared Services Agreement, Retail Ventures shall maintain policies of insurance, including policies for the benefit of DSW or any of its Subsidiaries, directors, officers, employees or other covered parties (collectively, the "DSW Covered Parties"), and DSW and the DSW Covered Parties shall promptly pay or reimburse Retail Ventures for premium expenses, deductibles or retention amounts which Retail Ventures may incur in connection with such insurance coverages.

Section 6.2 DSW INSURANCE COVERAGE AFTER THE INSURANCE TRANSITION PERIOD. From and after expiration of the Shared Services Agreement, DSW shall be responsible for obtaining and maintaining insurance programs for its risk of loss and such insurance arrangements shall be separate and apart from Retail Ventures' insurance programs.

ARTICLE VII
MISCELLANEOUS

Section 7.1 LIMITATION OF LIABILITY. IN NO EVENT SHALL ANY MEMBER OF THE RETAIL VENTURES GROUP OR DSW GROUP BE LIABLE TO ANY OTHER MEMBER OF THE RETAIL VENTURES GROUP OR DSW GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER,

THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY'S INDEMNIFICATION OBLIGATIONS FOR LIABILITIES AS SET FORTH IN THIS AGREEMENT OR IN ANY ANCILLARY AGREEMENT.

Section 7.2 ENTIRE AGREEMENT. This Agreement, the Inter-Company Agreements and the Exhibits and Schedules referenced or attached hereto and thereto, constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and shall supersede all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof and thereof.

Section 7.3 GOVERNING LAW AND JURISDICTION. This Agreement shall be construed in accordance with and all Disputes hereunder shall be governed by the laws of the State of Ohio, excluding its conflict of law rules. The Parties agree that the court of common pleas of Franklin County, Ohio, shall have exclusive jurisdiction over all actions between the Parties for preliminary relief in aid of arbitration pursuant to Section 3.10 herein, and non-exclusive jurisdiction over any action for enforcement of an arbitral award.

Section 7.4 TERMINATION; AMENDMENT. This Agreement and all Inter-Company Agreements may be terminated or amended by and in the sole discretion of Retail Ventures, without the approval of DSW, at any time prior to the IPO. This Agreement and any applicable Inter-Company Agreements may be terminated or amended at any time after such date and before the Distribution Date by mutual consent of Retail Ventures and DSW, evidenced by an instrument in writing signed on behalf of each of the Parties. In the event of termination pursuant to this Section 7.4, no Party shall have any liability of any kind to the other Party.

Section 7.5 NOTICES. Notices, offers, requests or other communications required or permitted to be given by either party pursuant to the terms of this Agreement shall be given in writing to the respective Parties to the following addresses:

if to Retail Ventures:

Retail Ventures, Inc.
3241 Westerville Road
Columbus, OH 43223

Attention: James A. McGrady, Chief Financial Office Fax: (614) 473-2721

with a copy to:

Julia A. Davis, General Counsel 3241 Westerville Road
Columbus, OH 43223
Fax: (614) 337-4682

if to DSW:

DSW Inc.
4150 East 5th Avenue
Columbus, OH 43219

Attention: Peter Z. Horvath, Chief Operating Officer Fax: (614) 238-4133

with a copy to:

Julia A. Davis, General Counsel 3241 Westerville Road
Columbus, OH 43223
Fax: (614) 337-4682

or to such other address or facsimile number as the party to whom notice is given may have previously furnished to the other in writing as provided herein. Any notice involving non-performance, termination, or renewal shall be sent by hand delivery, recognized overnight courier or, within the United States, may also be sent via certified mail, return receipt requested. All other notices may also be sent by facsimile, confirmed by first class mail. All notices shall be deemed to have been given when received, if hand delivered; when transmitted, if transmitted by facsimile or similar electronic transmission method; one working day after it is sent, if sent by recognized overnight courier; and three days after it is postmarked, if mailed first class mail or certified mail, return receipt requested, with postage prepaid.

Section 7.6 COUNTERPARTS. This Agreement, including the Inter-Company Agreement and the Exhibits and Schedules hereto and thereto and the other documents referred to herein or therein, may be executed in counterparts, each of which shall be deemed to be an original but all of which shall constitute one and the same agreement.

Section 7.7 BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective legal representatives and successors, and nothing in this Agreement, express or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Agreement. This Agreement may be enforced separately by each member of the Retail Ventures Group and each member of the DSW Group. Neither party may assign this Agreement or any rights or obligations hereunder, without the prior written consent of the other party, and any such assignment shall be void; PROVIDED, HOWEVER, either party may assign this Agreement to a successor entity in conjunction with such party's reincorporation in another jurisdiction or into another business form.

Section 7.8 SEVERABILITY. If any term or other provision of this Agreement or the Exhibits or Schedules attached hereto is determined by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible.

Section 7.9 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of either party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right. All rights and remedies existing under this Agreement or the Exhibits or Schedules attached hereto are cumulative to, and not exclusive of, any rights or remedies otherwise available.

Section 7.10 AUTHORITY. Each of the Parties hereto represents to the other that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary corporate or other actions, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and general equity principles.

Section 7.11 INTERPRETATION. The headings contained in this Agreement, in any Exhibit or Schedule hereto and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized term used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning assigned to such term in this Agreement. When a reference is made in this Agreement to an Article or a Section, Exhibit or Schedule, such reference shall be to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated.

Section 7.12 CONFLICTING AGREEMENTS. None of the provisions of this Agreement are intended to supersede any provision in any Inter-Company Agreement or any other agreement with respect to the respective subject matters thereof. In the event of conflict between this Agreement and any Inter-Company Agreement or other agreement executed in connection herewith, the provisions of such other agreement shall prevail.

Section 7.13 THIRD PARTY BENEFICIARIES. None of the provisions of this Agreement shall be for the benefit of or enforceable by any third party, including any creditor of any Person. No such third party shall obtain any right under any provision of this Agreement or shall by reasons of any such provision make any claim in respect of any Liability (or otherwise) against either Party hereto.

ARTICLE VIII
DEFINITIONS

Section 8.1 DEFINED TERMS. The following capitalized terms shall have the meanings given to them in this Section 8.1:

"AAA" has the meaning set forth in Section 3.10(c) of this Agreement.

"Action" means any demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any federal, state, local, foreign or international governmental authority or any arbitration or mediation tribunal, other than any demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation relating to Taxes.

"Affiliated Company" of any Person means any entity that controls, is controlled by, or is under common control with such Person. As used herein, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities or other interests, by contract or otherwise.

"Agreement" shall mean this Master Separation Agreement, together with the Schedules and Exhibits hereto, as the same may be amended from time to time in accordance with the provisions hereof.

"Blackout Period" shall have the meaning set forth in Section 4.4 of this Agreement.

"Class A common shares" shall mean the Class A common shares, without par value, of DSW.

"Class B common shares" shall mean the Class B common shares, without par value, of DSW.

"Code" means the Internal Revenue Code of 1986 (or any successor statute), as amended from time to time, and the regulations promulgated thereunder.

"Commission" shall have the meaning set forth in the preamble of this Agreement.

"Common Shares" means the Class A and Class B common shares of DSW.

"Company Notice" shall have the meaning set forth in Section 4.2(a) of this Agreement.

"Company Securities" shall have the meaning set forth in Section 4.2(b) of this Agreement.

"Confidential Business Information" shall have the meaning set forth in
Section 3.5(a)(iii) of this Agreement.

"Confidential Information" shall have the meaning set forth in Section 3.5(a)(i) of this Agreement.

"Confidential Operational Information" shall have the meaning set forth in
Section 3.5(a)(ii) of this Agreement.

"Continuously Effective" with respect to a specified registration statement, means that such registration statement shall not cease to be effective and available for transfers of Registrable Securities in accordance with the method of distribution set forth therein for longer than five (5) business days during the period specified in the relevant provision of this Agreement.

"Contract" means any contract, agreement, lease, license, sales order, purchase order, instrument or other commitment that is binding on any Person or any part of its property under applicable law.

"Conversion Warrants" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"Debt Reorganization Events" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"Demand Registration" shall have the meaning set forth in Section 4.1(a) of this Agreement.

"Demand Registration Statement" shall have the meaning set forth in
Section 4.1(a) of this Agreement.

"Dispute" has the meaning set forth in Section 3.10(a) of this Agreement.

"Dispute Resolution Commencement Date" has the meaning set forth in
Section 3.10(a) of this Agreement.

"Distribution" means the divestiture by Retail Ventures of all or a significant portion of the Class B common shares of DSW owned by Retail Ventures, which divestiture may be effected by Retail Ventures as a dividend, an exchange with existing Retail Ventures stockholders for shares of Retail Ventures capital stock, a spin-off or otherwise, as a result of which Retail Ventures is no longer required to consolidate DSW's results of operations and financial position (determined in accordance with generally accepted accounting principles consistently applied).

"Distribution Date" means the date on which Retail Ventures is no longer required to consolidate DSW's results of operations and financial position (determined in accordance with generally accepted accounting principles consistently applied).

"DSW" shall have the meaning set forth in the preamble to this Agreement.

"DSW Affiliate" means any corporation or other entity directly or indirectly controlled by DSW.

"DSW's Auditors" shall have the meaning set forth in Section 3.4(a) of this Agreement.

"DSW Balance Sheet" shall mean DSW's audited Consolidated Balance Sheet included in the IPO Registration Statement on the date it is declared effective by the Commission.

"DSW Business" shall have the meaning set forth in the preamble of this Agreement.

"DSW Capital Stock" means all classes or series of capital stock of DSW.

"DSW Covered Parties" has the meaning set forth in Section 6.1 of this Agreement.

"DSW Credit Facility" has the meaning set forth in Section 6.1 of this Agreement.

"DSW Group" means the affiliated group (within the meaning of Section 1504(a) of the Code), or similar group of entities as defined under corresponding provisions of the laws of other jurisdictions, of which DSW will be the common parent corporation immediately after the Distribution, and any corporation or other entity which may become a member of such group from time to time.

"DSW Indemnitees" means DSW, each member of the DSW Group and each of their respective directors, officers and employees.

"DSW Liabilities" shall mean (without duplication) the following Liabilities:

(i) all Liabilities reflected in the DSW Balance Sheet;

(ii) all Liabilities of Retail Ventures or its Subsidiaries that arise after the date of the DSW Balance Sheet that would be reflected in a DSW balance sheet as of the date of such Liabilities, if such balance sheet was prepared using the same principles and accounting policies under which the DSW Balance Sheet was prepared;

(iii) all Liabilities that should have been reflected in the DSW Balance Sheet but are not reflected in the DSW Balance Sheet due to mistake or unintentional omission;

(iv) all Liabilities (other than Liabilities for Taxes, which are governed by the Tax Separation Agreement), whether arising before, on or after the IPO Date, that relate to, arise or result from:

(1) the operation of the DSW Business, as conducted at any time prior to, on or after the IPO Date (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person's authority)); or

(2) the operation of any business conducted by any member of the DSW Group at any time after the IPO Date (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person's authority));

(v) all Liabilities that relate to, arise or result from the DSW Credit Facility;

(vi) all Liabilities that are expressly contemplated by this Agreement, or any other Inter-Company Agreement (or the Schedules hereto or thereto) as Liabilities to be assumed by DSW or any member of the DSW Group; and

(vii) Liabilities of any member of the DSW Group under this Agreement or any of the Inter-Company Agreements.

After the IPO Date, Retail Ventures and DSW may receive invoices evidencing liabilities jointly incurred by or on behalf of both of them or their respective Affiliates. Accordingly, each of Retail Ventures and DSW agrees that such joint liabilities shall be divided among Retail Ventures, DSW and their respective Affiliates consistent with past practice and "DSW Liabilities" shall include the portion so allocated to DSW.

"DSWSW" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"Effective Date" means the date registration statement filed pursuant to Article IV hereof is declared effective by the Commission.

"Exchange Act" shall have the meaning set forth in Section 2.1(a) of this Agreement.

"Final Determination" has the meaning set forth in the Tax Separation Agreement.

"Governmental Approvals" means any notices, reports or other filings to be made, or any consents, registrations, approvals, permits or authorizations to be obtained from, any Governmental Authority.

"Governmental Authority" shall mean any federal, state, local, foreign or international court, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority.

"Holders" shall mean, collectively, Retail Ventures and its Affiliated Companies (other than DSW) who from time to time own Registrable Securities, each of such entities separately is sometimes referred to herein as a "Holder."

"Indemnifying Party" means any party which may be obligated to provide indemnification to an Indemnitee pursuant to Section 5.2 or Section 5.3 hereof or any other section of this Agreement or any Inter-Company Agreement.

"Indemnitee" means any party which may be entitled to indemnification from an Indemnifying Party pursuant to Section 5.2 or Section 5.3 hereof or any other section of this Agreement or any Inter-Company Agreement.

"Information" means information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.

"Insurance Policies" means insurance policies pursuant to which a Person makes a true risk transfer to an insurer.

"Insurance Proceeds" means those monies: (a) received by an insured from an insurance carrier; or (b) paid by an insurance carrier on behalf of the insured; or (c) from Insurance Policies.

"Insurance Transition Period" shall mean the period beginning on the IPO Date and ending on the Distribution Date.

"Inter-Company Agreements" shall mean the IP License, the Share Exchange Agreement, the Tax Separation Agreement and the Shared Services Agreement.

"IP License" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"IPO" shall have the meaning set forth in the preamble of this Agreement.

"IPO Date" shall have the meaning set forth Section 2.1(c) of this Agreement.

"IPO Conditions" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"IPO Liabilities" means any Liabilities relating to, arising out of or resulting from any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the IPO Registration Statement or any preliminary, final or supplemental prospectus forming a part of the IPO Registration Statement.

"IPO Registration Statement" shall have the meaning set forth in the preamble of this Agreement.

"Lease" has the meaning set forth in Section 3.10(a) of this Agreement.

"Liabilities" means all debts, liabilities, guarantees, assurances, commitments and obligations, whether fixed, contingent or absolute, asserted or unasserted, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due, whenever or however arising (including, without limitation, whether arising out of any Contract or tort based on negligence or strict liability) and whether or not the same would be required by generally accepted principles and accounting policies to be reflected in financial statements or disclosed in the notes thereto.

"Loss and Losses" mean any and all damages, losses, deficiencies, Liabilities, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including, without limitation, the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and expenses of attorneys', accountants', consultants' and other professionals' fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder), including direct and consequential damages, but excluding punitive damages (other than punitive damages awarded to any third party against an indemnified party).

"Maximum Number" when used in connection with an Underwritten Offering, shall mean the maximum number of shares of DSW Capital Stock (or amount of other Registrable Securities) that the Underwriters' Representative has informed DSW may be included as part of such offering without materially and adversely affecting the success or pricing of such offering.

"Northland" has the meaning set forth in Section 3.10(a) of this Agreement.

"Northland Accounting" has the meaning set forth in Section 3.10(a) of this Agreement.

"NYSE" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"Other Holders" shall have the meaning set forth in Section 4.2(c) of this Agreement.

"Other Securities" shall have the meaning set forth in Section 4.2(a) of this Agreement.

"Party" or "Parties" shall have the meaning set forth in the preamble of this Agreement.

"Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

"Pre-Distribution Period" shall have the meaning set forth in Section 3.3(c) of this Agreement.

"Privileges" shall have the meaning set forth in Section 3.6(a) of this Agreement.

"Privileged Information" shall have the meaning set forth in Section 3.6(a) of this Agreement.

"Registrable Securities" means (i) the Class B common shares held by Retail Ventures immediately following the IPO Date (the "Shares"), (ii) any other securities issued or distributed to Retail Ventures in respect of the Class B common shares by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, reorganization, merger, consolidation or otherwise, (iii) any Class A Common Shares or other securities received by Retail Ventures into which or for which Class B common shares are converted or exchanged or are convertible or exchangeable, (iv) any other Class B common shares acquired by Retail Ventures prior to the Distribution Date, and
(v) any other successor securities received by Retail Ventures in respect of any of the forgoing (i) through (iv); PROVIDED that in the event that any Registrable Securities (as defined without giving effect to this proviso) are being registered pursuant hereto, the Holder may include in such registration (subject to the limitations of this Agreement otherwise applicable to the inclusion of Registrable Securities) any Class B common or securities acquired in respect thereof thereafter acquired by such Holder, which shall also be deemed to be "Shares" and accordingly Registrable Securities, for purposes of such registration. As to any particular Registrable Securities, such Registrable Securities shall cease to be Registrable Securities when (w) a registration statement with respect to the sale by Retail Ventures shall have been declared effective under the Securities Act and such Shares shall have been disposed of in accordance with such registration statement, (x) they shall have been distributed to the public in accordance with Rule 144, (y) they shall have been otherwise transferred by Retail Ventures to an entity or Person that is not an Affiliated Company of Retail Ventures, new certificates for them not bearing a legend restricting further transfer shall have been delivered by DSW and subsequent disposition of them shall not require

registration or qualification of them under the Securities Act or any state securities or blue sky law then in effect or (z) they shall have ceased to be outstanding.

"Registration Expenses" means any and all out-of-pocket expenses incident to performance of or compliance with ARTICLE IV of this Agreement, including, without limitation, (i) all Commission registration and filing fees, (ii) all fees and expenses of complying with securities or blue sky laws (including fees and disbursements of counsel for any underwriters in connection with blue sky qualifications of the Registrable Securities) or relating to the National Association of Securities Dealers, Inc., (iii) all printing, messenger and delivery expenses, (iv) all fees and expenses incurred in connection with listing (or authorizing for quotation) the Registrable Securities on a securities exchange or automated inter-dealer Quotation System pursuant to the requirements hereof, (v) the fees and disbursements of counsel for DSW and of its independent public accountants, (vi) all expenses in connection with the preparation, printing and filing of the registration statement, any preliminary prospectus or final prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to any Holders, underwriters and dealers and all expenses incidental to delivery of the Registrable Securities,
(vii) the reasonable fees and disbursements of one firm of counsel, other than DSW's counsel, selected by the Holders of Registrable Securities being registered, (viii) any fees and disbursements of underwriters customarily paid by the issuers or sellers of securities, and the reasonable fees and expenses of any special experts retained in connection with the requested registration, but excluding underwriting discounts and commissions and transfer taxes, if any, and
(ix) the expenses incurred in connection with making "road show" presentations and holding meetings with potential investors to facilitate the distribution and sale of Registrable Securities.

"Request" shall have the meaning set forth in Section 4.1(a) of this Agreement.

"Retail Ventures" shall have the meaning set forth in the preamble to this Agreement.

"Retail Ventures' Auditors" shall have the meaning set forth in Section 3.4(b) of this Agreement.

"Retail Ventures Business" means any business of Retail Ventures other than the DSW Business.

"Retail Ventures Group" means the affiliated group (within the meaning of
Section 1504(a) of the Code), or similar group of entities as defined under corresponding provisions of the laws of other jurisdictions, of which Retail Ventures is the common parent corporation, and any corporation or other entity which may be, may have been or may become a member of such group from time to time, but excluding any member of the DSW Group.

"Retail Ventures Indemnitees" means Retail Ventures, each member of the Retail Ventures Group and each of their respective directors, officers and employees.

"Retail Ventures Portions" means all information set forth in, or incorporated by reference into, the IPO Registration Statement, to the extent such information relates exclusively to (a) Retail Ventures and the Retail Ventures Group and (b) the Retail Ventures Business.

"Retail Ventures Securities" shall have the meaning set forth in Section 4.2(b) of this Agreement.

"Rule 144" means Rule 144 (or any successor rule to similar effect) promulgated under the Securities Act.

"Rule 415 Offering" means an offering on a delayed or continuous basis pursuant to Rule 415 (or any successor rule to similar effect) promulgated under the Securities Act.

"Securities Act" means the Securities Act of 1933, as amended.

"Selling Holder" shall have the meaning set forth in Section 4.6(e) of this Agreement.

"Shared Services Agreement" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"Share Exchange Agreement" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"Shares" shall have the meaning set forth in the definition of Registrable Securities.

"SSC" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"Subsidiary" of any Person means a corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; PROVIDED, HOWEVER, that no Person that is not directly or indirectly wholly-owned by any other Person shall be a Subsidiary of such other Person unless such other Person controls, or has the right, power or ability to control, that Person.

"Sublease" has the meaning set forth in Section 3.10(a) of this Agreement.

"Tax and Taxes" have the meaning set forth in the Tax Separation Agreement.

"Tax Separation Agreement" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"Term Loan Warrants" shall have the meaning set forth in Section 2.1(c) of this Agreement.

"Third Party Claim" has the meaning set forth in Section 5.1(a) of this Agreement.

"Underwritten Offering" shall mean a registration in which securities of DSW are sold to one or more underwriters for reoffering to the public.

"Underwriters" shall have the meaning set forth in Section 2.1(a) of this Agreement.

"Underwriting Agreement" shall have the meaning set forth in Section 2.1(a) of this Agreement.

"Underwriters' Representative" when used in connection with an Underwritten Offering, shall mean the managing underwriter of such offering, or, in the case of a co-managed underwriting, the managing underwriters designated as the Underwriters' Representative by the co-managers.

"Warrants" shall have the meaning set forth in Section 2.1(c) of this Agreement.

WHEREFORE, the Parties have signed this Master Separation Agreement effective as of the date first set forth above.

RETAIL VENTURES, INC.

/s/ James A. McGrady
---------------------------------
Name: James A. McGrady
Title: CFO

DSW, INC.

/s/ Peter Z. Horvath
---------------------------------
Name: Peter Z. Horvath
Title: COO, EVP

EXHIBIT A
IP LICENSE

SCHEDULE 1.1(c)

CERTAIN OFFICERS AND/OR DIRECTORS OF RETAIL VENTURES

SCHEDULE 1.2(b)

CERTAIN OFFICERS AND/OR DIRECTORS OF DSW

SCHEDULE 2.3(g)

1. DSW Inc. (formerly known as Shonac Corporation) and DSW Shoe Warehouse, Inc. are parties to a Guaranty in favor of GMAC Commercial Credit LLC, dated November 26, 2004.

2. DSW Inc. (formerly known as Shonac Corporation) and DSW Shoe Warehouse, Inc. are parties to a Guaranty in favor of Capital Factors, Inc., dated November 26, 2004.

3. DSW Inc. (formerly known as Shonac Corporation) and DSW Shoe Warehouse, Inc. are parties to a Guaranty in favor of The CIT Group/Commercial Services, Inc., dated November 26, 2004.

EXHIBIT 10.2

SHARED SERVICES AGREEMENT

DATED AS OF JANUARY 30, 2005

BETWEEN

DSW INC.

AND

RETAIL VENTURES, INC.

TABLE OF CONTENTS

                                                                                  PAGE
                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.01.    Definitions....................................................    2
SECTION 1.02.    Internal References............................................    5

                                   ARTICLE II
                          PURCHASE AND SALE OF SERVICES

SECTION 2.01.    Purchase and Sale of Retail Venture Services...................    5
SECTION 2.02.    Purchase and Sale of DSW Services..............................    6
SECTION 2.03.    Additional Services............................................    6

                                   ARTICLE III
                          SERVICE COSTS; OTHER CHARGES

SECTION 3.01.    Service Costs Generally........................................    7
SECTION 3.02.    Customary Billing..............................................    7
SECTION 3.03.    Pass-Through Billing...........................................    7
SECTION 3.04.    Percent of Sales Billing.......................................    8
SECTION 3.05.    Benefit Billing................................................    8
SECTION 3.06.    Invoicing and Settlement of Costs..............................    8

                                   ARTICLE IV
                   STANDARD OR PERFORMANCE AND INDEMNIFICATION

SECTION 4.01.    General Standard of Service....................................    9
SECTION 4.02.    Delegation.....................................................    9
SECTION 4.03.    Limitation of Liability........................................   10
SECTION 4.04.    Indemnification Related to Retail Ventures Services............   12
SECTION 4.05.    Indemnification Related to DSW Services........................   12

                                    ARTICLE V
                              TERM AND TERMINATION

SECTION 5.01.    Term...........................................................   13
SECTION 5.02.    Termination....................................................   13
SECTION 5.03.    Effect of Termination..........................................   14

                                   ARTICLE VI
                                INSURANCE MATTERS

SECTION 6.01.    DSW Insurance Coverage During Transition Period................   14
SECTION 6.02.    Cooperation; Payment of Insurance Proceeds to DSW; Agreement
                     not to Release Carriers....................................   15
SECTION 6.03.    DSW Insurance Coverage After the Insurance Transition Period...   15
SECTION 6.04.    Deductibles and Self-Insured Obligations.......................   16
SECTION 6.05.    Procedures with Respect to Insured DSW Liabilities.............   16
SECTION 6.06.    Insufficient Limits of Liability for Retail Ventures
                     Liabilities and DSW Liabilities............................   16
SECTION 6.07.    Cooperation....................................................   17
SECTION 6.08.    No Assignment or Waiver........................................   17
SECTION 6.09.    No Liability...................................................   17
SECTION 6.10.    Additional or Alternate Insurance..............................   17
SECTION 6.11.    Forebearance and Prior Insurance Coverage......................   17
SECTION 6.12.    Further Agreements.............................................   18

                                   ARTICLE VII
                              ADDITIONAL AGREEMENTS

SECTION 7.01.    Annual Budget..................................................   18
SECTION 7.02.    Employment Matters.............................................   18
SECTION 7.03.    Shared Expenses Agreement......................................   18

                                  ARTICLE VIII
                                  MISCELLANEOUS

SECTION 8.01.    Prior Agreements...............................................   19
SECTION 8.02.    Other Agreements...............................................   19
SECTION 8.03.    Future Litigation and Other Proceedings........................   19
SECTION 8.04.    No Agency......................................................   19
SECTION 8.05.    Subcontractors.................................................   19
SECTION 8.06.    Force Majeure..................................................   20
SECTION 8.07.    Entire Agreement...............................................   20
SECTION 8.08.    Information....................................................   20
SECTION 8.09.    Notices........................................................   21
SECTION 8.10.    Governing Law..................................................   21
SECTION 8.11.    Severability...................................................   21
SECTION 8.12.    Amendment......................................................   21
SECTION 8.13.    Counterparts...................................................   22
SECTION 8.14.    Authority......................................................   22

SCHEDULE I:      Services To Be Provided By Retail Ventures, Inc.
SCHEDULE II:     Services To Be Provided By DSW Inc.
SCHEDULE III:    Insurance Policies Maintained by Retail Ventures, Inc.

SHARED SERVICES AGREEMENT

This Shared Services Agreement is entered into to be effective as of January 30, 2005 by and between DSW Inc., an Ohio corporation ("DSW"), and Retail Ventures, Inc. an Ohio corporation ("Retail Ventures"). DSW and Retail Ventures are sometimes being referred to herein separately as a "Party" and together as the "Parties". Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Article I hereof.

RECITALS

WHEREAS, Retail Ventures beneficially owns 100% of the issued and outstanding common shares of DSW;

WHEREAS, the Parties currently contemplate that the Articles of Incorporation of DSW will be amended to authorize 170,000,000 Class A common shares, without par value (the "Class A common shares") and 100,000,000 Class B common shares, without par value (the "Class B common shares"), and to change the currently outstanding DSW common share into 27,702,667 Class B common shares, all of which Class B common shares will be beneficially-owned by Retail Ventures;

WHEREAS, the Parties currently contemplate that DSW will make an initial public offering (the "Offering") of an amount of Class A common shares pursuant to a registration statement on Form S-1 under the Securities Act of 1933, as amended (the "Registration Statement");

WHEREAS, immediately following consummation of the Offering, Retail Ventures will own Class B common shares evidencing at least 80.1% of the combined voting power of the holders of the Class A common shares and the Class B common shares with respect to all shareholder matters;

WHEREAS, Retail Ventures directly or indirectly provides certain administrative, financial, management and other services to the DSW Entities (as defined below), and DSW directly or indirectly provides certain administrative, management and other services to the Retail Ventures Entities (as defined below);

WHEREAS, following consummation of the Offering, Retail Ventures desires to continue to provide certain administrative, financial, management and other services to the DSW Entities, and DSW desires to continue to provide certain administrative, management and other services to the Retail Ventures Entities, as more fully set forth in this Agreement; and

WHEREAS, each Party desires to set forth in this Agreement the principal terms and conditions pursuant to which certain services will be provided by it to, and certain services will be provided to it by, the other Party;

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, for themselves and their respective successors and assigns, hereby covenant and agree as follows:

ARTICLE I DEFINITIONS

SECTION 1.01. Definitions. (a) As used in this Agreement, the following terms shall have the following meanings, applicable both to the singular and the plural forms of the terms described:

"Agreement" means this Shared Services Agreement, together with the schedules and exhibits hereto, as the same may be amended and supplemented from time to time in accordance with the provisions hereof.

"Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York or Columbus, Ohio are authorized or required by law to close.

"Contract" means any contract, agreement, lease, license, sales order, purchase order, instrument or other commitment that is binding on any Person or any part of such Person's property under applicable law.

"Department" means a business section or division of a Party.

"Distribution Date" means the date on which Retail Ventures is no longer required to consolidate DSW's results of operations and financial condition (determined in accordance with generally accepted accounting principles consistently applied) with Retail Ventures' results of operations and financial condition.

"DSW Business" means the specialty branded footwear retail business engaged in by DSW, as more completely described in the Registration Statement, and any businesses added under the control of DSW.

"DSW Entities" means DSW Inc. and its Subsidiaries, and "DSW Entity" means any one of the DSW Entities.

"DSW Liabilities" has the meaning set forth in the Master Separation Agreement.

"DSW Services" means the various services to be provided by DSW on behalf of the Retail Ventures Entities as described in this Agreement and/or in Schedule II.

"Exchange Agreement" means an agreement between the parties relating to the exchange of Class A common shares for Class B common shares.

"Insurance Policies" means insurance policies pursuant to which a Person makes a true risk transfer to an insurer.

"Insurance Proceeds" means those monies: (a) received by an insured from an insurance carrier; or (b) paid by an insurance carrier on behalf of the insured; or (c) from Insurance Policies.

"Insured DSW Liability" means any DSW Liability to the extent that (i) it is covered under the terms of Retail Ventures' Insurance Policies in effect prior to the end of the Insurance Transition Period, and (ii) DSW is not a named insured under, or otherwise entitled to the benefits of, such Insurance Policies.

"Liabilities" means all debts, liabilities, guarantees, assurances, commitments and obligations, whether fixed, contingent or absolute, asserted or unasserted, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due, whenever or however arising (including, without limitation, whether arising out of any Contract or tort based on negligence or strict liability) and whether or not the same would be required by generally accepted principles and accounting policies to be reflected in financial statements or disclosed in the notes thereto.

"Master Separation Agreement" means an agreement to be entered into by the Parties in connection with the Offering to set forth the principal arrangements between them regarding the separation of the DSW business from Retail Ventures.

"Offering Date" means 12:01 a.m., New York City Time, on the date on which the Offering is consummated.

"Person" means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, government (including any department or agency thereof) or other entity.

"Retail Ventures Entities" means Retail Ventures and its Subsidiaries (other than the DSW Entities), and "Retail Venture Entity" means any one of the Retail Venture Entities currently in place on the effective date of the Registration Statement and any businesses added under the control of Retail Ventures.

"Retail Ventures Services" means the various services to be provided by Retail Ventures on behalf of the DSW Entities as described in this Agreement, in Schedule I and/or in Schedule III.

"RVSI" means Retail Ventures Services, Inc., an Ohio corporation and wholly-owned subsidiary of Retail Ventures.

"Schedule I" means the first Schedule attached hereto which lists Services to be provided by Retail Ventures on behalf of or for DSW Entities and sets forth the related Retail Ventures Service Costs and/or billing methodology.

"Schedule II" means the second Schedule attached hereto which lists Services to be provided by DSW on behalf of or for Retail Ventures Entities and sets forth the related DSW Service Costs and/or billing methodology.

"Schedule III" means the third Schedule attached hereto which lists the Insurance Policies to be maintained by Retail Ventures on behalf of or for the DSW Entities and premium expenses and/or the methodology for calculating the premium expenses to be paid by DSW for insurance coverage under such Insurance Policies.

"Schedules" means any one or more of the schedules referred to in and attached to this Agreement.

"Services" means the DSW Services and/or the Retail Ventures Services, as the context may require.

"Subsidiary" means, as to any Person, any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting capital stock or other voting ownership interests is owned or controlled directly or indirectly by such Person or by one or more of the Subsidiaries of such Person or by a combination thereof.

"Tax Separation Agreement" means the Tax Separation Agreement attached as Exhibit A to the Master Separation Agreement.

(b) Each of the following terms is defined in the Section set forth opposite such term:

TERM                                                            SECTION
----                                                            -------
Annual Budget                                                   7.01
Actions                                                         4.04(a)
Applicable Insurance                                            6.11(a)
Benefit Billing                                                 3.01
Benefits Services                                               3.05(b)
Billing Party                                                   3.02
Class A common shares                                           Preamble
Class B common shares                                           Preamble
Coverage Amount                                                 6.06(a)(i)
Customary Billing                                               3.01
DSW Covered Parties                                             6.01(a)
DSW Inc.                                                        Preamble
DSW Indemnified Person                                          4.04(b)
DSW Service Costs                                               3.01
Employee Welfare Plans                                          4.02
Force Majeure                                                   8.06(a)
Initial Term                                                    5.01
Insurance Transition Period                                     6.01(a)
Net Sales Ratio                                                 3.04

Offering                                                        Preamble
Overallocated Party                                             6.06(a)(iii)
Parties                                                         Preamble
Party                                                           Preamble
Pass-Through Billing                                            3.01
Payment Date                                                    3.06(b)
Percent of Sales Billing                                        3.01
Prior Agreements                                                8.01
Receiving Party                                                 3.02
Registration Statement                                          Preamble
Retail Ventures                                                 Preamble
Retail Ventures Indemnified Person                              4.03(a)
Retail Ventures Insurance Policies                              6.01(a)
Retail Ventures Plans                                           3.05(a)
Retail Ventures Service Costs                                   3.01
Service Costs                                                   3.06(a)
Shared Expenses Agreement                                       7.03
Terminated Party                                                5.03(a)
Terminating Party                                               5.03(a)
Underallocated Party                                            6.06(a)(iii)

SECTION 1.02. Internal References. Unless the context indicates otherwise, references to Articles, Sections and paragraphs shall refer to the corresponding articles, sections and paragraphs in this Agreement and references to the parties shall mean the parties to this Agreement.

ARTICLE II
PURCHASE AND SALE OF SERVICES

SECTION 2.01. Purchase and Sale of Retail Ventures Services.

(a) Subject to the terms and conditions of this Agreement and in consideration of the Retail Ventures Service Costs described below, Retail Ventures agrees to provide to the applicable DSW Entities, or to procure the provision to such entities, and DSW agrees to purchase from Retail Ventures, the Retail Ventures Services. Unless otherwise specifically agreed by Retail Ventures and DSW, the Retail Ventures Services shall be substantially similar in scope, quality, and nature to those customarily provided to, or procured on behalf of, the DSW Entities by Retail Ventures and/or its Subsidiaries prior to the Offering Date.

(b) The Parties acknowledge and agree that (i) the Retail Ventures Services to be provided by the applicable Retail Ventures Entities under this Agreement shall, at DSW 's request, be provided directly to Subsidiaries of DSW and (ii) Retail Ventures may satisfy its obligation to provide or to procure the Retail Ventures Services hereunder by causing one or more of its Subsidiaries, including, but not limited to, RVSI, to provide or to procure such services. With respect to the Retail Ventures Services provided to, or procured on behalf of, any

Subsidiary of DSW, DSW agrees to pay on behalf of such Subsidiary all amounts payable by or in respect of such services pursuant to this Agreement.

Section 2.02. Purchase and Sale of DSW Services

(a) Subject to the terms and conditions of this Agreement and in consideration of the DSW Service Costs described below, DSW agrees to provide to the applicable Retail Ventures Entities, or to procure the provision to such entities of, and Retail Ventures agrees to purchase from DSW, the DSW Services. Unless otherwise specifically agreed by Retail Ventures and DSW, the DSW Services shall be substantially similar in scope, quality, and nature to those customarily provided to, or procured on behalf of, the Retail Ventures Entities by DSW and/or its Subsidiaries (and/or the Retail Ventures Departments providing the Services which are now a part of DSW) prior to the Offering Date.

(b) The Parties acknowledge and agree that (i) the DSW Services to be provided by the applicable DSW Entities on behalf of Retail Ventures under this Agreement shall, at Retail Ventures' request, be provided directly to Subsidiaries of Retail Ventures and (ii) DSW may satisfy its obligation to provide or to procure the DSW Services hereunder by causing one or more of its Subsidiaries to provide or to procure such services. With respect to the DSW Services provided to, or procured on behalf of, any Subsidiary of Retail Ventures, Retail Ventures agrees to pay on behalf of such Subsidiary all amounts payable by or in respect of such services pursuant to this Agreement.

SECTION 2.03 Additional Services.

(a) In addition to the Retail Ventures Services to be provided or procured by Retail Ventures in accordance with Section 2.01, if requested by DSW, and to the extent that Retail Ventures and DSW may mutually agree, Retail Ventures shall provide additional services (including services not provided by Retail Ventures to the DSW Entities prior to the Offering Date) to DSW. The scope of any such services, as well as the costs and other terms and conditions applicable to such services, shall be as mutually agreed by Retail Ventures and DSW.

(b) In addition to the DSW Services to be provided or procured by DSW in accordance with Section 2.02, if requested by Retail Ventures, and to the extent that Retail Ventures and DSW may mutually agree, DSW shall provide additional services (including services not provided by DSW to the Retail Ventures Entities prior to the Offering Date) to Retail Ventures. The scope of any such services, as well as the costs and other terms and conditions applicable to such services, shall be as mutually agreed by Retail Ventures and DSW.

ARTICLE III
SERVICE COSTS; OTHER CHARGES

SECTION 3.01. Service Costs Generally. The Schedules hereto indicate, with respect to the DSW Services and the Retail Ventures Services, respectively, listed therein, whether the costs to be charged for Services are to be determined by (i) the customary billing method described in Section 3.02 ("Customary Billing"), (ii) the pass-through billing method described in Section
3.03 ("Pass-Through Billing"), (iii) the percentage of DSW's net sales method described in Section 3.04 ("Percent of Sales Billing"), (iv) a calculation of certain costs related to employee benefit plans and benefit arrangements described in Section 3.05 ("Benefit Billing"), or (v) another specified method. Unless otherwise indicated on the Schedules, the Customary Billing method will apply. The costs to be paid by DSW to Retail Ventures for Retail Venture Services are collectively referred to herein as the "Retail Ventures Service Costs". DSW agrees to pay to Retail Ventures in the manner set forth in Section 3.06 an amount equal to the Retail Ventures Service Costs applicable to each of the Retail Ventures Services provided or procured by Retail Ventures. The costs to be paid by Retail Ventures to DSW for the DSW Services are collectively referred to herein as the "DSW Service Costs". Retail Ventures agrees to pay to DSW in the manner set forth in Section 3.06 an amount equal to the DSW Service Costs applicable to each of the DSW Services provided or procured by DSW.

SECTION 3.02. Customary Billing. The costs of Services as to which the Customary Billing method applies shall be equal to the costs customarily charged and/or allocated by one Party and/or one or more of its Subsidiaries or Departments (the "Billing Party") to the other Party and/or one or more of its Subsidiaries or Departments (the "Receiving Party") immediately prior to the Offering Date (it being understood that from and after the Offering Date such costs may be increased by the Billing Party in a manner consistent with the manner in which such costs were increased from time to time prior to the Offering Date, and consistent with the semi-annual reconciliation described in
Section 7.01).

SECTION 3.03. Pass-Through Billing. The costs of Services as to which the Pass-Through Billing method applies shall be equal to the aggregate amount of third-party, out-of-pocket costs and expenses incurred by a Billing Party on behalf of a Receiving Party (which costs shall include but not be limited to the costs incurred in connection with obtaining the consent of any party to a contract or agreement to which any Billing Party is a party where such consent is related to and reasonably required for the provision of any Service). It is intended that Services provided by third parties will be billed directly to the Receiving Party by the third party; however, if a Billing Party incurs any such costs or expenses on behalf of any Receiving Party as well as businesses operated by the Billing Party, the Billing Party shall allocate any such costs or expenses in good faith between the various businesses on behalf of which such costs or expenses were incurred as set forth on any Schedule hereto or, if not set forth on a Schedule, then as the Billing Party shall determine in the exercise of the Billing Party's reasonable judgment. The Billing Party shall apply usual and accepted accounting conventions in making such allocations, and the Billing Party or its agents shall keep and maintain such books and records as may be reasonably necessary to make such allocations. The Billing Party shall make copies of such books and records available to the Receiving Party upon request and with reasonable notice.

SECTION 3.04. Percent of Sales Billing. Retail Ventures Services for which the billing methodology is the Percent of Sales Billing method shall not be billed individually. Instead, Retail Ventures shall provide all such services for an aggregate annual cost equal to the amount obtained by multiplying (x) Retail Ventures' projected budget for all services which are the same or similar to the applicable Retail Ventures Service which are to be provided to all Retail Ventures Entities and DSW Entities for the relevant year, by (y) the projected net sales for the year of the DSW Entities divided by the aggregate projected net sales of all Retail Ventures Entities and DSW Entities (the "Net Sales Ratio"). At the end of the applicable fiscal year, actual expenses versus budgeted expenses for the relevant Retail Venture Service shall be compared and any overage or shortfall shall be allocated based upon the Net Sales Ratio. Retail Ventures' budget for Retail Venture Services to be provided to DSW as contemplated by this Section 3.04 shall be determined on a basis consistent with the manner in which Retail Ventures determines the similar budgets for the Retail Venture Entities.

SECTION 3.05. Benefit Billing.

(a) Prior to the Offering Date, certain associates of DSW participated in certain benefit plans sponsored by Retail Ventures ("Retail Ventures Plans"). On and after the Offering Date, DSW associates shall continue to be eligible to participate in the Retail Ventures Plans, subject to the terms of the governing plan documents as interpreted by the appropriate plan fiduciaries. On and after the Offering Date, subject to regulatory requirements and the provisions of
Section 4.01 hereof, Retail Ventures shall continue to provide Benefit Services (as hereafter defined) to and in respect of DSW associates with reference to Retail Ventures Plans as administered by Retail Ventures prior to the Offering Date.

(b) The costs payable by DSW for Retail Ventures Services relating to the administration of employee plans and benefit arrangements, which are included in Human Resources in Schedule I ("Benefit Services"), shall be determined and billed as set forth in Schedule I. The Parties acknowledge and agree that some of the costs associated with certain Retail Ventures Plans will be paid principally through DSW employee payroll deductions for such plans as specified in Schedule I. The Parties intend that the Retail Ventures Service Costs relating to the performance of Benefit Services shall not exceed reasonable compensation for such services as defined under applicable law.

(c) Each Party may request changes in the applicable terms of or Retail Ventures Services relating to the Retail Ventures Plans, approval of which shall not be unreasonably withheld; provided, however, that changes in the terms and provisions of any of the Retail Ventures Plans shall be in the sole discretion of Retail Ventures. The Parties agree to cooperate fully with each other in the administration and coordination of regulatory and administrative requirements associated with Retail Ventures Plans.

SECTION 3.06. Invoicing and Settlement of Costs.

(a) Except as otherwise provided in a Schedule to this Agreement or to the extent that Retail Ventures and DSW may mutually agree, each Billing Party shall invoice or notify the

Chief Executive Officer or Chief Financial Officer of the Receiving Party on a monthly basis (not later than the tenth day of each month), in a manner substantially similar to and consistent with the billing practices used in connection with services provided by Retail Ventures to the DSW Entities prior to the Offering Date (except as otherwise agreed), of the Service Costs related to services performed or procured by the Billing Party during the prior calendar month. As used herein, "Service Costs" means the Retail Ventures Service Costs, if Retail Ventures is the Billing Party, and the DSW Service Costs, if DSW is the Billing Party. In connection with the invoicing described in this Section 3.06(a), the Billing Party shall provide to the Receiving Party the same billing data and level of detail as customarily or similar to that provided to the Receiving Party prior to the Offering Date and such other related data as may be reasonably requested by the Receiving Party.

(b) The Receiving Party agrees to pay to the Billing Party, on or before the 30th day after the date on which the Billing Party delivers to the Receiving Party an invoice or notice of Service Costs (or the next Business Day, if such 30th day is not a Business Day) (each, a "Payment Date"), by wire transfer of immediately available funds payable to the order of the Billing Party, all amounts so invoiced or noticed by the Billing Party pursuant to Section 3.06(a). If the Receiving Party fails to pay any monthly payment within 30 days of the relevant Payment Date, the Receiving Party shall be obligated to pay, in addition to the amount due on such Payment Date, interest on such amount at the prime, or best, rate announced by National City Bank, compounded monthly from the relevant Payment Date through the date of payment. Payment can be made via check, ACH or wire and, except as set forth in Section 3.15(c) of the Master Separation Agreement, offsetting is not permitted.

ARTICLE IV
STANDARD OF PERFORMANCE AND INDEMNIFICATION

SECTION 4.01. General Standard of Service. Except as otherwise agreed to in writing by the Parties or as described in this Agreement, and provided that a Party is not restricted by contract with third parties or by applicable law, the Parties agree that the nature, quality, and standard of care applicable to the delivery of the Services hereunder shall be substantially the same as or consistent with that applicable to the similar services provided by a Party to the other Party prior to the Offering Date. Retail Ventures shall use its reasonable efforts to ensure that the nature and quality of Services provided to DSW associates under Retail Ventures Plans, either by Retail Ventures directly or through administrators under contract, shall be undifferentiated as compared with the same services provided to or on behalf of Retail Ventures associates under Retail Ventures Plans.

SECTION 4.02. Delegation. Subject to Section 4.01 above, DSW hereby delegates to Retail Ventures final, binding, and exclusive authority, responsibility, and discretion to interpret and construe the provisions of employee welfare benefit plans in which associates of DSW Entities have elected to participate and which are administered by Retail Ventures under this Agreement (collectively, "Employee Welfare Plans"). Retail Ventures may further delegate such authority to other parties to:

(i) provide administrative and other services;

(ii) reach factually supported conclusions consistent with the terms of the respective Employee Welfare Plans;

(iii) make a full and fair review of each claim denial and decision related to the provision of benefits provided or arranged for under the Employee Welfare Plans pursuant to the requirements of ERISA, if within 60 days after receipt of the notice of denial, a claimant requests in writing a review for reconsideration of such decisions (the party adjudicating the claim shall notify the claimant in writing of its decision on review and such notice shall satisfy all ERISA requirements relating thereto); and

(iv) notify the claimant in writing of its decision on review.

SECTION 4.03. Limitation of Liability.

(a) Retail Ventures Entities

(i) DSW agrees that none of the Retail Ventures Entities and their respective directors, officers, agents, and employees (each, a "Retail Ventures Indemnified Person") shall have any liability, whether direct or indirect, in contract or tort or otherwise, to any DSW Entity or any other Person for or in connection with the Retail Ventures Services rendered or to be rendered by any Retail Ventures Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any Retail Ventures Indemnified Person's actions or inactions in connection with any Retail Ventures Services or such transactions, except for damages which have resulted from such Retail Ventures Indemnified Person's gross negligence or willful misconduct in connection with any Retail Ventures Services, actions or inactions.

(ii) Notwithstanding the provisions of this Section 4.03(a), none of the Retail Venture Entities shall be liable for any special, indirect, incidental, or consequential damages of any kind whatsoever (including, without limitation, attorneys' fees) in any way due to, resulting from or arising in connection with any of the Retail Ventures Services or the performance of or failure to perform Retail Ventures' obligations under this Agreement. This disclaimer applies without limitation (1) to claims arising from the provision of the Retail Ventures Services or any failure or delay in connection therewith; (2) to claims for lost profits; (3) regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise; and (4) regardless of whether such damages are foreseeable or whether Retail Ventures has been advised of the possibility of such damages.

(iii) None of the Retail Venture Entities shall have any liability to any DSW Entity or any other Person for failure to perform Retail Ventures' obligations under this Agreement or otherwise, where (1) such failure to perform is not caused by the gross negligence or willful misconduct of the Retail Venture Entity designated to perform such obligations and (2) such failure to perform similarly affects the Retail Venture Entities

receiving the same or similar services and does not have a disproportionately adverse effect on the DSW Entities, taken as a whole.

(iv) In addition to the foregoing, DSW agrees that, in all circumstances, it shall use commercially reasonable efforts to mitigate and otherwise minimize damages to the DSW Entities, individually and collectively, whether direct or indirect, due to, resulting from or arising in connection with any failure by Retail Ventures to comply fully with Retail Ventures' obligations under this Agreement.

(b) DSW Entities

(i) Retail Ventures agrees that none of the DSW Entities and their respective directors, officers, agents, and employees (each, a "DSW Indemnified Person") shall have any liability, whether direct or indirect, in contract or tort or otherwise, to any Retail Ventures Entity or any other Person for or in connection with the DSW Services rendered or to be rendered by any DSW Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any DSW Indemnified Person's actions or inactions in connection with any DSW Services or such transactions, except for damages which have resulted from such DSW Indemnified Person's gross negligence or willful misconduct in connection with any DSW Services, actions or inactions.

(ii) Notwithstanding the provisions of this Section 4.03(b), none of the DSW Entities shall be liable for any special, indirect, incidental, or consequential damages of any kind whatsoever (including, without limitation, attorneys' fees) in any way due to, resulting from or arising in connection with any of the DSW Services or the performance of or failure to perform DSW's obligations under this Agreement. This disclaimer applies without limitation (1) to claims arising from the provision of the DSW Services or any failure or delay in connection therewith; (2) to claims for lost profits; (3) regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise; and
(4) regardless of whether such damages are foreseeable or whether DSW has been advised of the possibility of such damages.

(iii) None of the DSW Entities shall have any liability to any Retail Ventures Entity or any other Person for failure to perform DSW's obligations under this Agreement or otherwise, where (1) such failure to perform is not caused by the gross negligence or willful misconduct of the DSW Entity designated to perform such obligations and (2) such failure to perform similarly affects the DSW Entities receiving the same or similar services and does not have a disproportionately adverse effect on the Retail Ventures Entities, taken as a whole.

(iv) In addition to the foregoing, Retail Ventures agrees that, in all circumstances, it shall use commercially reasonable efforts to mitigate and otherwise minimize damages to Retail Ventures Entities, individually and collectively, whether direct or indirect, due to, resulting from or arising in connection with any failure by DSW to comply fully with DSW's obligations under this Agreement.

SECTION 4.04. Indemnification Related to Retail Ventures Services.

(a) DSW agrees to indemnify and hold harmless each Retail Ventures Indemnified Person from and against any damages related to, and to reimburse each Retail Ventures Indemnified Person for all reasonable expenses (including, without limitation, attorneys' fees) as they are incurred in connection with investigating, preparing, pursuing, or defending, any claim, action, proceeding, or investigation, whether or not in connection with pending or threatened litigation and whether or not any DSW Indemnified Person or any Retail Ventures Indemnified Person is a party (collectively, "Actions"), arising out of or in connection with Retail Ventures Services rendered or to be rendered by any Retail Ventures Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any Retail Ventures Indemnified Person's actions or inactions in connection with any such Retail Ventures Services or transactions; provided that, DSW shall not be responsible for any damages incurred by any Retail Ventures Indemnified Person that have resulted from such Retail Ventures Indemnified Person's gross negligence or willful misconduct in connection with any of the advice, actions, inactions, or Retail Ventures Services referred to above (it being understood and agreed that the provision by any Retail Venture Entity of any of the Retail Ventures Services contemplated by Schedule I hereof without obtaining the consent of any party to any Contract or agreement to which any Retail Ventures Entity is a party as of the date hereof shall not constitute gross negligence or willful misconduct by any Retail Ventures Entity, provided that, the relevant Retail Ventures Entity has used commercially reasonable efforts to obtain such consent).

(b) Except as set forth in Section 4.04(c), Retail Ventures agrees to indemnify and hold harmless each DSW Indemnified Person from and against any damages related to, and to reimburse each DSW Indemnified Person for all reasonable expenses as they are incurred in connection with investigating, preparing, or defending, any Action arising out of or related to the gross negligence or willful misconduct of any Retail Ventures Indemnified Person in connection with the Retail Ventures Services rendered or to be rendered pursuant to this Agreement.

(c) To the extent that any other Person has agreed to indemnify any Retail Ventures Indemnified Person or to hold a Retail Ventures Indemnified Person harmless and such Person provides services to Retail Ventures or any affiliate of Retail Ventures relating directly or indirectly to any employee plan or benefit arrangement for which Benefit Services are provided under this Agreement, Retail Ventures will exercise reasonable efforts (x) to make such agreement applicable to any DSW Indemnified Person so that each DSW Indemnified Person is held harmless or indemnified to the same extend as any Retail Ventures Indemnified Person and (y) to make available to each DSW Indemnified Person the benefits of such agreement.

SECTION 4.05. Indemnification Related to DSW Services.

(a) Retail Ventures agrees to indemnify and hold harmless each DSW Indemnified Person from and against any damages related to, and to reimburse each DSW Indemnified Person for all reasonable expenses (including, without limitation, attorneys' fees) as they are incurred in connection with investigating, preparing, pursuing, or defending, any Action arising out of or in connection with DSW Services rendered or to be rendered by any DSW Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any DSW Indemnified

Person's actions or inactions in connection with any such DSW Services or transactions; provided that, Retail Ventures shall not be responsible for any damages incurred by any DSW Indemnified Person that have resulted from such DSW Indemnified Person's gross negligence or willful misconduct in connection with any of the advice, actions, inactions, or DSW Services referred to above (it being understood and agreed that the provision by any DSW Entity of any of the DSW Services contemplated by Schedule II hereof without obtaining the consent of any party to any Contract or agreement to which any DSW Entity is a party as of the date hereof shall not constitute gross negligence or willful misconduct by any DSW Entity, provided that, the relevant DSW Entity has used commercially reasonable efforts to obtain such consent).

(b) DSW agrees to indemnify and hold harmless the Retail Ventures Indemnified Persons from and against any damages related to, and to reimburse each Retail Ventures Indemnified Person for all reasonable expenses as they are incurred in connection with investigating, preparing, or defending, any Action arising out of or related to the gross negligence or willful misconduct of any DSW Indemnified Person in connection with the DSW Services rendered or to be rendered pursuant to this Agreement.

ARTICLE V
TERM AND TERMINATION

SECTION 5.01. Term. Except as otherwise provided in this Article V, or in
Section 8.06 or as otherwise agreed in writing by the Parties, (a) this Agreement shall have an initial term from January 30, 2005 through January 31, 2008 (the "Initial Term"), and will be renewed automatically thereafter for successive one-year terms unless either Party elects not to renew this Agreement by notice in writing to the other Party not less than one hundred and eighty
(180) days prior to the end of any term, and (b) a Party's obligation to provide or to procure, and the other Party's obligation to purchase, a Service shall cease as of the applicable date set forth in the applicable Schedules or such earlier date determined in accordance with Section 5.02.

SECTION 5.02. Termination.

(a) Except as otherwise provided herein or in any Schedule hereto, the Parties may by mutual agreement from time to time terminate this Agreement with respect to one or more of the Services, in whole or in part.

(b) Retail Ventures may terminate any DSW Service at any time if DSW shall have failed to perform any of its material obligations under this Agreement relating to such DSW Service, Retail Ventures shall have notified DSW in writing of such failure and such failure shall have continued for a period of at least thirty (30) days after receipt by DSW of written notice of such failure from Retail Ventures.

(c) DSW may terminate any Retail Ventures Service at any time if Retail Ventures shall have failed to perform any of its material obligations under this Agreement relating to such Retail Ventures Service, DSW shall have notified Retail Ventures in writing of such failure, and such failure shall have continued for a period of at least thirty (30) days after receipt by Retail Ventures of written notice of such failure from DSW.

SECTION 5.03. Effect of Termination.

(a) Other than as required by law, upon termination of any Service pursuant to Section 5.02, or upon termination of this Agreement in accordance with its terms, the Party whose Service is terminated (the "Terminated Party") shall have no further obligation to provide the terminated Service (or any Service, in the case of termination of this Agreement) and the Party terminating such Service (the "Terminating Party") shall have no obligation to pay any fees relating to such terminated Services or to make any other payments hereunder; provided that, notwithstanding such termination, (i) the Terminating Party shall remain liable to the Terminated Party for fees owed and payable in respect of Services provided prior to the effective date of the termination; (ii) the Terminated Party shall continue to charge the Terminating Party for administrative and program costs relating to benefits paid after but incurred prior to the termination of any Service and other services required to be provided after the termination of such Service, and the Terminating Party shall be obligated to pay such expenses in accordance with the terms of this Agreement; and (iii) the provisions of Articles 4, 5, and 8 shall survive any such termination indefinitely. All program and administrative costs attributable to associates of any DSW Entity under Retail Ventures Plans that relate to any period after the effective date of any such termination shall be for the account of and paid by DSW.

(b) Following termination of this Agreement with respect to any Service provided or procured by a Party, the Parties agree to cooperate with each other in providing for an orderly transition of such Service to the other Party or to a successor service provider as designated by the other Party. Without limiting the foregoing, Retail Ventures agrees to (i) provide to DSW, within 30 days of the termination of any Benefit Service, in a usable format designated by Retail Ventures, copies of all records relating directly or indirectly to benefit determinations with respect to any and all associates of a DSW Entity, including, but not limited to, compensation and service records, correspondence, plan interpretive policies, plan procedures, administration guidelines, minutes, and any data or records required to be maintained by law and (ii) work with DSW in developing a transition schedule with respect to such terminated Benefit Service.

ARTICLE VI
INSURANCE MATTERS

SECTION 6.01. DSW Insurance Coverage During Transition Period.

(a) As of the Offering Date, Retail Ventures shall maintain insurance coverage under the Insurance Policies listed in Part (a) of Schedule III (the "Retail Ventures Insurance Policies"). Throughout the period beginning on the Offering Date and ending upon the earlier of (i) termination of the Service provided pursuant to this Article VI or (ii) termination or expiration of this Agreement in accordance with its terms (the "Insurance Transition Period"), Retail Ventures shall, subject to insurance market conditions and other factors beyond its control, maintain Insurance Policies covering and for the benefit of the DSW Entities and their respective directors, officers, and employees (collectively, the "DSW Covered Parties") which are comparable to those maintained generally by Retail Ventures covering the DSW Covered Parties prior to the Offering Date; provided, however, that if Retail Ventures determines that
(i) the amount or scope of such insurance coverage will be reduced to a level materially inferior to the level of insurance

coverage in existence immediately prior to the Insurance Transition Period or
(ii) the retention or deductible level applicable to such insurance coverage, if any, will be increased to a level materially greater than the levels in existence immediately prior to the Insurance Transition Period, each other than as a result of the Offering, Retail Ventures shall give DSW notice of such determination as promptly as practicable. Upon notice of such determination, DSW shall be entitled to no less than sixty (60) days to evaluate DSW's options regarding continuance of insurance coverage under said Insurance Policies and DSW may cancel the DSW Entities' interest in all or any portion of such insurance coverage as of any day within such sixty (60) day period.

(b) DSW shall promptly pay or reimburse Retail Ventures, as the case may be, for premium expenses, deductibles or retention amounts, and any other costs and expenses which Retail Ventures may incur in connection with the insurance coverages maintained pursuant to this Section 6.01, including but not limited to any retroactive or subsequent premium adjustments. DSW's share of such costs and expenses shall be calculated as set forth in Part (b) of Schedule III.

SECTION 6.02. Cooperation; Payment of Insurance Proceeds to DSW; Agreement Not to Release Carriers. Each Party shall share such information as is reasonably necessary in order to permit the other Party to manage and conduct its insurance matters in an orderly fashion. Retail Ventures, at the request of DSW, shall cooperate with and use commercially reasonable efforts to assist DSW in recovering Insurance Proceeds under the Retail Ventures Insurance Policies for claims relating to the DSW Business, the assets of DSW or DSW Liabilities, whether such claims arise under any Contract or agreement, by operation of law or otherwise, existing or arising from any past acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed before the Offering Date, on the Offering Date or during the Insurance Transition Period, and Retail Ventures shall promptly pay any such recovered Insurance Proceeds to DSW. Neither Retail Ventures nor DSW, nor any of their respective Subsidiaries, shall take any action which would intentionally jeopardize or otherwise interfere with the other Party's ability to collect any proceeds payable pursuant to any Insurance Policy. Except as otherwise contemplated by this Agreement or any other agreement between the Parties, after the Offering Date, neither Retail Ventures nor DSW (and each Party shall ensure that no affiliate of such Party), without the consent of the other Party, shall provide any insurance carrier with a release, or amend, modify or waive any rights under any such policy or agreement, if such release, amendment, modification or waiver would adversely affect any rights or potential rights of the other Party (or its Subsidiary) thereunder. However, nothing in this Section 6.02 shall (A) preclude any Retail Ventures Entity or any DSW Entity from presenting any claim or from exhausting any policy limit, (B) require any Retail Ventures Entity or any DSW Entity to pay any premium or other amount or to incur any Liability, or (C) require any Retail Ventures Entity or DSW Entity to renew, extend or continue any policy in force.

SECTION 6.03. DSW Insurance Coverage After the Insurance Transition Period. From and after expiration of the Insurance Transition Period, DSW shall be responsible for obtaining and maintaining insurance programs for the DSW Entities' risk of loss and such insurance arrangements shall be separate and apart from Retail Ventures' insurance programs.

SECTION 6.04. Deductibles and Self-Insured Obligations. DSW shall reimburse Retail Ventures for all amounts necessary to exhaust or otherwise to satisfy all applicable self-insured retentions, amounts for fronted policies, deductibles and retrospective premium adjustments and similar amounts not covered by Insurance Policies in connection with DSW Liabilities and Insured DSW Liabilities to the extent that Retail Ventures is required to pay any such amounts.

SECTION 6.05. Procedures with Respect to Insured DSW Liabilities.

(a) DSW shall reimburse Retail Ventures for all amounts incurred to pursue insurance recoveries from Insurance Policies for Insured DSW Liabilities.

(b) The defense of claims, suits or actions giving rise to potential or actual Insured DSW Liabilities shall be managed (in conjunction with Retail Ventures' insurers, as appropriate) by the Party that would have had responsibility for managing such claims, suits or actions had such Insured DSW Liabilities been DSW Liabilities.

SECTION 6.06. Insufficient Limits of Liability for Retail Ventures Liabilities and DSW Liabilities.

(a) In the event that there are insufficient limits of liability available under Retail Ventures' Insurance Policies in effect prior to the Distribution Date to cover the Liabilities of Retail Ventures and/or DSW that would otherwise be covered by such Insurance Policies, then to the extent that other insurance is not available to Retail Ventures and/or DSW for such Liabilities an adjustment will be made in accordance with the following procedures:

(i) To the extent the Parties are able to specifically quantify and verify the actual Liabilities incurred by each Party to the exclusion of the other Party, each Party will be allocated an amount equal to the product of (A) the actual Liabilities incurred by such Party, divided by the total actual Liabilities incurred by the Parties, times (B) the lesser of (1) the available limits of liability under Retail Ventures' Insurance Policies in effect prior to the Distribution Date net of uncollectible amounts attributable to insurer insolvencies and (2) the proceeds received from Retail Ventures' Insurance Policies if the Liabilities are the subject of disputed coverage claims and, following consultation with each other, Retail Ventures and/or DSW agree to accept less than full policy limits from Retail Ventures' and DSW's insurers (such available limits and/or proceeds being referred to as the "Coverage Amount").

(ii) To the extent that the Parties are unable to specifically quantify and verify any such Liabilities or any part of such Liabilities to each Party (to the exclusion of the other Party), each Party will be allocated an amount equal to their shared percentage of the Coverage Amount.

(iii) A Party who receives more than its share of the Coverage Amount (the "Overallocated Party") agrees to reimburse the other Party (the "Underallocated Party") to the extent that the Liabilities of the Underallocated Party that would have been covered under such Insurance Policies is less than the Underallocated Party's share of the Coverage Amount.

(iv) This Section 6.06 shall terminate ten (10) years following the end of the Insurance Transition Period, unless terminated sooner in accordance with the provisions of this Agreement.

SECTION 6.07. Cooperation. Retail Ventures and DSW shall cooperate with each other in all respects, and shall execute any additional documents which are reasonably necessary, to effectuate the provisions of this Article VI.

SECTION 6.08. No Assignment or Waiver. This Agreement shall not be considered as an attempted assignment of any policy of insurance or as a contract of insurance and shall not be construed to waive any right or remedy of any Retail Ventures Entity in respect of any Insurance Policy or any other contract or policy of insurance.

SECTION 6.09. No Liability. DSW does hereby, for itself and as agent for each other DSW Entity, agree that no Retail Ventures Entity or Retail Ventures Indemnified Person shall have any Liability whatsoever as a result of the insurance policies and practices of Retail Ventures and its Subsidiaries as in effect at any time prior to the end of the Insurance Transition Period, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy, or the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

SECTION 6.10. Additional or Alternate Insurance. Notwithstanding any other provision of this Agreement, during the Insurance Transition Period, Retail Ventures and DSW shall work together to evaluate insurance options and secure additional or alternate insurance for DSW and/or Retail Ventures if desired by and cost effective for DSW and Retail Ventures. Nothing in this Agreement shall be deemed to restrict any DSW Entity from acquiring at its own expense any other Insurance Policy in respect of any Liabilities or covering any period.

SECTION 6.11. Forbearance and Prior Insurance Coverage.

(a) From and after the date of this Agreement, Retail Ventures shall not, and shall cause each of its Subsidiaries not to, take or fail to take any action if such action or inaction, as the case may be, would adversely affect the applicability of any insurance in effect on the effective date of this Agreement that covers all or any part of the assets, liabilities, business or employees of any DSW Entity with respect to events occurring prior to the Offering Date ("Applicable Insurance"), it being understood that in no event shall any Retail Venture Entity be obligated to pay premiums with respect to periods after the Offering Date in respect of Applicable Insurance.

(b) Retail Ventures agrees that, from and after the Offering Date, all Applicable Insurance directly or indirectly applicable to any assets, liabilities, business or employees of any DSW Entity shall be for the benefit of the DSW Entity, it being understood that such Applicable Insurance shall also be for the benefit of the Retail Venture Entities to the extent directly or indirectly applicable to any assets, liabilities, business or employees of the Retail Venture Entities. Without limiting the generality of the foregoing, upon DSW's reasonable request, Retail Ventures shall use its reasonable efforts to modify, amend or assign all Applicable Insurance policies and arrangements so that DSW is the direct beneficiary of such Applicable Insurance

with all rights to enforce, obtain the benefit of and take all other action in respect of such Applicable Insurance; provided that, if the modifications, amendments or assignments contemplated by this Section 6.11(b) are not permissible, Retail Ventures shall, and shall cause each of its Subsidiaries to, use its reasonable efforts to enter into such other arrangements as DSW may reasonably request to ensure that DSW and the Subsidiaries of DSW are entitled to the benefit (to the fullest extent set forth in the relevant policies and arrangements) of any Applicable Insurance.

SECTION 6.12. Further Agreements. The Parties acknowledge that they intend to allocate financial obligations without violating any laws regarding insurance, self-insurance or other financial responsibility. If it is determined that any action undertaken pursuant to this Agreement or any related agreement is violative of any insurance, self-insurance or related financial responsibility law or regulation, the Parties agree to work together to do whatever is necessary to comply with such law or regulation while trying to accomplish, as much as possible, the allocation of financial obligations as intended in this Agreement or any such related agreement.

ARTICLE VII
ADDITIONAL AGREEMENTS

SECTION 7.01. Annual Budget. Prior to December 31, 2005 and each subsequent year so long as this Agreement is in effect, the Parties agree to work together and to cooperate with each other in good faith to develop an annual budget ("Annual Budget") to reflect the estimated annual Service Costs to each Party for each of the Services to be provided and/or procured by the other Party as contemplated by this Agreement. In the budgeting process, the Parties agree to use their reasonable efforts to harmonize the interests of the Parties to have quality services at affordable costs and to recover the costs of performing and/or procuring the Services. On or before December 31 of each calendar year, an Annual Budget for the next calendar year shall be submitted to the respective Controller or Chief Financial Officer of each of the Parties for review and approval. Such approval shall constitute approval of the Annual Budget by the Party represented by such person. During the months of July and January of each year so long as this Agreement is in effect, the Parties shall conduct a semi-annual reconciliation of actual Service Costs to budgeted Service Costs to determine if there are any significant discrepancies between such costs and, if so, whether the payments for services should be adjusted accordingly.

SECTION 7.02. Employment Matters. During the Initial Term, neither Party shall, directly or indirectly, solicit active employees of the other Party without the other Party's consent; provided that each Party agrees to give such consent if such Party believes, in good faith, that its consent is necessary to avoid the resignation of an employee from one Party that the other Party would like to employ.

SECTION 7.03. Shared Expenses Agreement. The Parties agree to share certain costs and expenses related to the store facilities located at Four Union Square, New York, New York, pursuant to the terms and conditions set forth in the Shared Expenses Agreement between the Parties dated of even date herewith (the "Shared Expenses Agreement").

ARTICLE VIII
MISCELLANEOUS

SECTION 8.01. Prior Agreements. In the event there is any conflict between the provisions of this Agreement, on the one hand, and the provisions of prior services agreements among any Retail Venture Entity and any DSW Entity (the "Prior Agreements"), on the other hand, the provisions of this Agreement shall govern and such provisions in the Prior Agreements are deemed to be amended so as to conform with this Agreement.

SECTION 8.02. Other Agreements. In the event there is any inconsistency between the provisions of this Agreement and the respective provisions of the Master Separation Agreement, the Tax Separation Agreement and the Exchange Agreement, respectively, the respective provisions of the Master Separation Agreement, the Tax Separation Agreement and the Exchange Agreement shall govern.

SECTION 8.03. Future Litigation and Other Proceedings. In the event that DSW (or any of its Subsidiaries or any of its or their respective officers or directors) or Retail Ventures (or any of its Subsidiaries or any of its or their respective officers or directors) at any time after the date hereof initiates or becomes subject to any litigation or other proceedings before any governmental authority or arbitration panel with respect to which the Parties have no prior agreements (as to indemnification or otherwise), the Party (and its Subsidiaries and its and their respective officers and directors) that has not initiated and is not subject to such litigation or other proceedings shall comply, at the other Party's expense, with any reasonable requests by the other Party for assistance in connection with such litigation or other proceedings (including by way of provision of information and making available of associates or employees as witnesses). In the event that DSW (or any of its Subsidiaries or any of its or their respective officers or directors) and Retail Ventures (or any of its Subsidiaries or any of its or their respective officers or directors) at any time after the date hereof initiate or become subject to any litigation or other proceedings before any governmental authority or arbitration panel with respect to which the Parties have no prior agreements (as to indemnification or otherwise), each Party (and its officers and directors) shall, at their own expense, coordinate their strategies and actions with respect to such litigation or other proceedings to the extent such coordination would not be detrimental to their respective interests and shall comply, at the expense of the requesting Party, with any reasonable requests of the other Party for assistance in connection therewith (including by way of provision of information and making available of employees as witnesses).

SECTION 8.04. No Agency. Nothing in this Agreement shall constitute or be deemed to constitute a partnership or joint venture between the Parties hereto or, except to the extent provided in Section 4.02, constitute or be deemed to constitute any Party the agent or employee of the other Party for any purpose whatsoever, and neither Party shall have authority or power to bind the other Party or to contract in the name of, or create a liability against, the other Party in any way or for any purpose.

SECTION 8.05. Subcontractors. Either Retail Ventures or DSW may hire or engage one or more subcontractors to perform all or any of its obligations under this Agreement; provided that, subject to Section 4.03, Retail Ventures and DSW, as the case may be, shall in all

cases remain primarily responsible for all obligations undertaken by it in this Agreement with respect to the scope, quality and nature of the Services provided to the other Party and, provided further, that, in each case, the use of a subcontractor to perform such Party's obligations would not substantially increase the costs to the other Party without the prior written consent of the other Party.

SECTION 8.06. Force Majeure.

(a) For purposes of this Section 8.06, "Force Majeure" means an event beyond the control of either Party, which by its nature could not have been foreseen by such Party, or, if it could have been foreseen, was unavoidable, and includes without limitation, acts of God, storms, floods, riots, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) and failure of energy sources.

(b) Without limiting the generality of Section 4.03, neither Party shall be under any liability for failure to fulfill any obligation under this Agreement, so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered, or delayed as a consequence of circumstances of Force Majeure; provided that such Party shall have exercised all commercially reasonable due diligence to minimize to the greatest extent possible the effect of Force Majeure on its obligations hereunder.

(c) Promptly on becoming aware of Force Majeure causing a delay in performance or preventing performance of any obligations imposed by this Agreement (and termination of such delay), the Party affected shall give written notice to the other Party giving details of the same, including particulars of the actual and, if applicable, estimated continuing effects of such Force Majeure on the obligations of the Party whose performance is prevented or delayed. If such notice shall have been duly given, and actual delay resulting from such Force Majeure shall be deemed not to be a breach of this Agreement, the period for performance of the obligation to which it relates shall be extended accordingly; provided that if Force Majeure results in the performance of a Party being delayed by more than 60 days, the other Party shall have the right to terminate this Agreement with respect to any Service affected by such delay forthwith by written notice.

SECTION 8.07. Entire Agreement. This Agreement (including the Schedules constituting a part of this Agreement) and any other writing signed by the Parties that specifically references or is specifically related to this Agreement constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the Parties with respect to the subject matter hereof. This Agreement is not intended to confer upon any Person other than the Parties hereto any rights or remedies hereunder.

SECTION 8.08. Information. Subject to applicable law and privileges, each Party hereto covenants with and agrees to provide to the other Party all information regarding itself and transactions under this Agreement that the other Party reasonably believes is required to comply with all applicable federal, state, county and local laws, ordinances, regulations and codes, including, but not limited to, securities laws and regulations.

SECTION 8.09. Notices. Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile transmission, or mail (with postage prepaid), to the following addresses:

(a) If to DSW, to:

Peter Horvath
DSW Inc.
4150 East 5th Avenue
Columbus, OH 43219
Fax: (614) 238-4133

(b) If to Retail Ventures, to:

Jim McGrady
Retail Ventures, Inc.
3241 Westerville Road
Columbus, OH 43224
Fax: 614-337-4682

or to such other addresses or telecopy numbers as may be specified by like notice to the other Party.

SECTION 8.10. Governing Law. This Agreement shall be construed in accordance with and governed by the substantive internal laws of the State of Ohio, excluding its conflict of laws rules.

SECTION 8.11. Severability. If any terms or other provision of this Agreement or the Schedules or exhibits hereto shall be determined by a court, administrative agency or arbitrator to be invalid, illegal or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather, this Agreement shall be construed as if not containing the particular invalid, illegal or unenforceable provision, and all other provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent permitted under applicable law.

SECTION 8.12. Amendment. This Agreement may only be amended by a written agreement executed by both Parties hereto.

SECTION 8.13. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same agreement.

SECTION 8.14. Authority. Each of the Parties represent to the other Party that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary corporate or other actions, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and general equity principles.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their duly authorized representatives.

DSW INC.

By: /s/ Peter Z. Horvath
    ------------------------------
Name: Peter Z. Horvath

Title: EVP, COO

RETAIL VENTURES, INC.

By: /s/ James A. McGrady
    ------------------------------
Name: James A. McGrady

Title: CFO

      SERVICES TO BE PROVIDED BY RETAIL VENTURES, INC. AND RETAIL VENTURES
                                 SERVICES, INC.

DESCRIPTION OF RETAIL VENTURES              RETAIL VENTURES SERVICE COSTS OR
SERVICE                                     BILLING METHODOLOGY TO DSW

1. GENERAL CORPORATE AND FINANCIAL
SERVICES:

   (i) PAYROLL SERVICES (including          Billing pro-rata based upon number
   preparation and distribution of          of DSW employee checks and Form W-2s
   employee checks; payment of payroll      issued by Retail Ventures. To be
   taxes, garnishment and other             billed weekly in arrears.
   deductions to appropriate parties;
   preparation and filing of employer
   tax returns; and preparation of
   annual W-2s for employees)

   (ii) TREASURY SERVICES (including        DSW to pay $1,000.00 per month and
   cash management; processing and          any stand-alone cash management
   paying invoices and purchase orders;     software and corresponding support
   monthly consolidation of financial       costs if added for DSW Services
   statements; and preparation of checks    only.
   for vendor payment and employee
   reimbursement)

   (iii) Sox and AUDITING Fees              Costs to be allocable based on
   (including coordination of external      sales.
   audit services and assistance with
   compliance with Sarbanes-Oxley
   requirements)

   (iii) ACCOUNTS PAYABLE, GENERAL          Overhead costs to be allocated based
   LEDGER, SALES AUDIT, BUDGET SERVICES-    on - time spent by associates, which
   AND INVENTORY CONTROL. GENERAL LEDGER    will be reviewed and determined
   INCLUDES, BUT IS NOT LIMITED TO,         annually.
   PREPARATION OF QUARTERLY,
                                            Sales Audit charges to include fees

                                       1

DESCRIPTION OF RETAIL VENTURES              RETAIL VENTURES SERVICE COSTS OR
SERVICE                                     BILLING METHODOLOGY TO DSW

   ANNUAL AND OTHER SEC REPORTS;            associated with software agreements
   ASSISTANCE WITH THE PREPARATION OF       that support DSW Entities.
   ANNUAL REPORT TO SHAREHOLDERS AND
   EARNINGS RELEASES; AND PREPARATION OF
   ERISA REPORTS.

   (v) TAX SERVICES (including              See Tax Separation Agreement between
   preparation and filing of all            DSW and Retail Ventures.
   federal, state and local tax returns,
   reports and other required filings;
   coordination and management of tax
   audits and other similar proceedings;
   and assistance with tax planning, tax
   strategy and compliance with the Tax
   Separation Agreement)

   (vii) Controller Services                Cost to be shared by DSW and Reta
                                            50/50 basis.

   (viii) SSC Corporate Services            Charges incurred on behalf of DSW
                                            entities will be allocated to DSW.
                                            Charges billed to other cost centers
                                            listed in these Agreement Schedules
                                            will be billed under the applicable
                                            cost center's methodology. General,
                                            unallocable charges to be allocated
                                            based on Percent of Sales billing.

2. INFORMATION TECHNOLOGY (ALL COST         Pass-Through Billing with respect to
CENTERS)                                    costs directly related to DSW
                                            Entities and Percent of Sales
                                            Billing with respect to overhead and
                                            Services shared by DSW Entities and
                                            Retail Ventures Entities.

3. HUMAN RESOURCES (ALL COST CENTERS)       Pass-Through Billing with respect to
                                            costs directly related to DSW
                                            Entities.

                                            DSW to pay pro-rata share of
                                            overhead costs per employee of DSW
                                            Entities, subject to adjustment
                                            semi-annually.

4. IMPORT MANAGEMENT AND COMPLIANCE         Pass-Through Billing with respect to
                                            costs directly related to DSW
                                            Entities. Importing fees (including
                                            U.S. Customs fees, Duties,
                                            Commissions, Ocean Freight,
                                            Excel/APL

DESCRIPTION OF RETAIL VENTURES              RETAIL VENTURES SERVICE COSTS OR
SERVICE                                     BILLING METHODOLOGY TO DSW

                                            Logistic Carrier fees and other
                                            associated expense) are allocated to
                                            the businesses by invoice (which
                                            historically is a one-to-one
                                            relationship to container) to the
                                            ratio of the container contents to
                                            the whole containers/trailer.

                                            DSW to pay 40% of the overhead
                                            costs. The overhead allocation
                                            percentage will be reviewed and
                                            determined annually.

5. CHILDREN'S SHOE MERCHANDISING            DSW to pay 33% of the total payroll
                                            compensation of this department.

6. LEGAL SERVICES (including general        General Counsel compensation to be
legal advice from in-house legal staff;     shared by DSW and Retail Ventures on
preparation and review of SEC filings       a 50/50 basis.
and proxy materials; assistance with
corporate resolutions and preparations      Pass-Through Billing with respect to
for shareholders meetings; overseeing       costs directly related to DSW
and managing legal policy and strategy      Entities.
regarding litigation and regulatory
compliance)                                 Department overhead costs and
                                            general, unallocable professional
                                            fees to be allocated based on
                                            Percent of Sales Billing.

7. RISK MANAGEMENT (including management    a) Insurance premium costs billed as
of insurance and workers compensation       specified in Schedule III.
coverage; administration of claims
services; negotiation and acquisition of    b) - Overhead costs are billed on
insurance coverages including, but not      the weighted value of administrative
limited to, property and business           time directed to DSW entities for
interruption, casualty (including           (i) Workers' Compensation, (ii)
workers compensation), director and         General Liability and (iii) Property
officer liability and other liability       & All Other Lines combined with the
coverages)                                  ratio of the number of claims that
                                            are directly related to DSW Entities
                                            to the total number of claims for
                                            (i) Workers' Compensation, (ii)
                                            General Liability and (iii) Property
                                            & All Other Lines. -

8. LOSS PREVENTION (INCLUDING INTERNAL      Overhead costs to be allocated based
AUDIT)                                      on Percent of Sales Billing.

DESCRIPTION OF RETAIL VENTURES              RETAIL VENTURES SERVICE COSTS OR
SERVICE                                     BILLING METHODOLOGY TO DSW

9. RVI CORPORATE EXECUTIVE OVERHEAD         DSW will pay 35% of the total
ALLOWANCE                                   overheads of this cost center that
                                            are associated with the CFO of RVI.
                                            It will exclude the costs associated
                                            with the CEO of RVI.

10. DISTRIBUTION SERVICES                   DSW will pay 10% of total overhead
                                            costs for this department.

11. DEPRECIATION OF IT OFFICE EQUIPMENT     Service fee charged to DSW for
LOCATED AT THE WESTERVILLE ROAD OFFICE      depreciation expenses associated
FACILITY (COST CENTER 01109)                with IT office equipment located at
                                            the Westerville Road Office. The
                                            billable charge for depreciation
                                            expenses is based on Percent of
                                            Sales Billing

12. LETTERS OF CREDIT ASSOCIATED WITH       DSW to be billed 15% of costs
WORKERS' COMPENSATION AND IBNR              associated with letters of credit
                                            for workers compensation and IBNR.

SCHEDULE II
TO
SHARED SERVICES AGREEMENT
DATED JANUARY 30, 2005
BETWEEN
RETAIL VENTURES, INC.
AND
DSW INC.

SERVICES TO BE PROVIDED BY DSW INC.

DESCRIPTION OF DSW SERVICE DSW SERVICE COSTS OR BILLING

METHODOLOGY TO RETAIL VENTURES

1. SHOE MERCHANDISING:

(i) PLANNING AND ALLOCATION Value City to pay $20,000 per month. SUPPORT for Value City
Department Stores, LLC

(i) DISTRIBUTION SERVICES AND      (i) The fixed distribution costs to be
TRANSPORTATION MANAGEMENT for      charged to RVI are based on the actual
Value City Department Stores,      monthly fixed costs incurred Filene's
LLC and                            Basement at the 4150 East 5th Avenue
                                   Distribution Center (and exclude fixed
                                   costs associated with the Offices at
                                   the 5th Avenue Location) divided by the
                                   maximum case storage capacity of the
                                   5th Avenue Distribution Center times
                                   the average number of cases stored on
                                   behalf of Value City at the 5th Avenue
                                   Distribution Center for that month.
                                   Fixed costs incurred at the 5th Avenue
                                   Location that cannot be directly
                                   identified with either the Distribution
                                   Center or the Offices will be allocated
                                   between the Distribution Center and
                                   Offices by the space occupied by each
                                   in terms of square footage. -

                                   (ii) The variable costs to be charged
                                   to RVI are based on the actual monthly
                                   variable costs incurred at the 4150
                                   East 5th Avenue Distribution Center
                                   times the percentage of handling costs
                                   associated

DESCRIPTION OF DSW SERVICE               DSW SERVICE COSTS OR BILLING
                                         METHODOLOGY TO RETAIL VENTURES

                                         with Value City shoes to the total
                                         handling costs incurred for all shoes
                                         at the 5th Avenue Distribution Center
                                         for that month. Handling cost
                                         categories include Maintenance,
                                         Picking/Putaway, Quality Control,
                                         Receiving, Crossdock Receiving and
                                         Shipping, which are based on actual
                                         prior fiscal year costs per case, and
                                         Solids, Store Stock and Tagging, which
                                         are based on actual prior fiscal year
                                         costs per pair. The relevant per case
                                         and pair costs are calculated
                                         separately for (i) Value City and (ii)
                                         DSW, Steinmart, Gordmans and Filene's
                                         Basement and are based on actual prior
                                         year activity for each handling cost
                                         category. Handling costs are calculated
                                         on the relevant cost per case or pair
                                         times the actual cases or pairs
                                         handled for each relevant category for
                                         that month. Variable costs include
                                         salaries and associated payroll
                                         expenses for exempt and non-exempt
                                         personnel employed at the 5th Avenue
                                         Distribution Center, Rent Equipment,
                                         Repairs & Maintenance, Utilities and
                                         Supplies. They exclude Dues &
                                         Subscriptions, Janitorial Services,
                                         Telephone and Travel.

                                         (iii) Transportation Costs- both
                                         inbound and outbound transportation
                                         costs (inclusive of wages, associated
                                         payroll costs, occupancy expenses and
                                         operating expenses) are allocated to
                                         the respective businesses according to
                                         current month activity, which is based
                                         on merchandise receipts as determined
                                         by dollar value.

                                         (iv) Professional fees to be billed on
                                         the weighted average cost per case of
                                         the pools that Value City Shoes
                                         utilizes.

                                         time spent by associates, which will be
                                         reviewed and determined annually.
                                         Related outside contractors/consultant
                                         costs, including legal services,
                                         allocated based on pass-through
                                         billing.

4.    STORE DESIGN AND CONSTRUCTION      A 5% service fee based on total
      MANAGEMENT                         development costs per project, plus
                                         expenses incurred by DSW on RVI
                                         projects. Overhead costs allocated on
                                         the proportion of RVI projects to total
                                         projects. (extraordinary projects to be
                                         determined on a project by project
                                         basis). Standard American Institute of
                                         Architects (AIA) form of "Agreement
                                         between Owner and Design/Builder" to be
                                         used as design and construction
                                         management agreement between DSW and
                                         Retail Ventures.

SCHEDULE III

TO

SHARED SERVICES AGREEMENT

DATED JANUARY 30, 2005

BETWEEN

RETAIL VENTURES, INC.

AND

INSURANCE POLICIES MAINTAINED BY RETAIL VENTURES

The Insurance Polices described in Part (a) below shall be maintained by Retail Ventures, Inc. ("Retail Ventures") on behalf of DSW Inc. ("DSW") and its Subsidiaries pursuant to the terms of the Shared Services Agreement between Retail Ventures and DSW dated January 30, 2005, of which this Schedule is a part. The insurance premiums related to such policies to be paid by DSW, or for which Retail Ventures shall be reimbursed by DSW, are set forth or described in Part (b) of this Schedule. Capitalized terms not otherwise defined in this Schedule shall have the respective meanings assigned to them in the Shared Services Agreement.

(a) LIST OF INSURANCE POLICIES

(i) Liability:
Steadfast Insurance Co. #SCO3822186-02 - primary - $1MM/occurrence XL Insurance Co. #US00007102LI04A - umbrella - $25MM/occ/agg Ohio Casualty Co. #ECO(05)52976611, excess GL - $25MM/occ/agg American Guarantee # AEC5086837500- excess GL - $50MM/occ/agg Liberty Mutual Ins. #LQ1-B71-078764032 - excess GL - $50MM/occ/agg ACE Ins. Group #HXW776336 - excess GL - $25MM/occ/agg Great American Ins. #TUE357977102 - excess GL - $25MM/occ/agg

(ii) Property FM Global Insurance #NB918 - $1,000,000,000 blanket limit Ace/Westchester #I20651258002 - excess flood - $10MM Great American #CPP5385581 & #ACG4285581 - excess flood - $5MM Arrowhead Group #303219EQ1 - excess earthquake - $3MM North Shore Mgmt. #NSM24310 - excess earthquake - $12MM FM Global #NB918 - Swanson primary earthquake - $1MM

(iii) Automobile

St. Paul Travelers #TC2JCAP393K338 - $2MM combined single limit

(iv) Cargo

Lloyd's #CD044747 - primary cargo - $10MM/conveyance Lloyd's #CD044765 - excess cargo - $5MM/conveyance

(v) Worker Compensation

St. Paul Travelers #TC2JUB466K1644 - statutory limits St. Paul Travelers #TRJUB466K1656 - retro AZ, MA & WI only Ohio - Self-insured under SI20005342 West Virginia - State Fund

(vi) Director and Officer Liability Insurance

Chubb #___ - primary - $10MM XL Specialty #___ - excess D&O - $10MM AWAC US #___ - excess D&O - $10MM RSUI #___ - excess D&O - $10MM AXIS #___ - excess D&O - $10MM Arch Insurance Co. #___ - excess D&O - $10MM Houston Casualty #___ - excess D&O - $10MM Great American #___ - excess D&O - $10MM Liberty Mutual #___ - excess D&O - $10MM National Union (AIG) #___ - excess D&O - $10MM XL Specialty #___ - Side A coverage - $10MM

(vii) Executive Protection Insurance

National Union (AIG) #006082944 - crime - $10MM National Union (AIG) #647-5648 - special crime (K&R) - $10MM

(viii) Other

Fireman's Fund #MXI97900076 - motor truck cargo - $250K/vehicle XL Insurance #XLPUN1502904 - excess punitives - $25MM agg Magna Carta #MCPD201467 - excess punitives - $25MM agg

(b) CALCULATION OF PREMIUM

(i) DSW shall promptly pay or reimburse Retail Ventures 100% of premium expenses, deductibles or retention amounts Retail Ventures may incur in connection with Insurance Policies that relate solely to the DSW Business.

(ii) DSW shall promptly pay or reimburse Retail Ventures 50% of premium expenses, deductibles or retention amounts Retail Ventures may incur in connection with Director and Officer Liability Insurance and Executive Protection Insurance.

(iii) DSW shall promptly pay or reimburse Retail Ventures its proportionate share of premium expenses, deductibles or retention amounts Retail Ventures may incur in connection with Insurance Policies that relate the Retail Ventures Business and the DSW Business. The "Retail Ventures Business" means any business of Retail Ventures other than the DSW Business. DSW's proportionate will be calculated as follows:

(IV) LIABILITY INSURANCE costs shall be prorated based on the ratio of DSW's sales and loss percentage as compared to total sales and loss.
["LOSS PERCENTAGE" IS DEFINED AS TOTAL INCURRED CLAIMS COST FOR THE PRIOR INSURANCE POLICY TERM. "INCURRED CLAIMS COST" EQUALS RESERVES PLUS PAID AMOUNTS.]

(V) PROPERTY INSURANCE costs shall be prorated based on the ratio of the value of DSW property covered by the insurance policy as compared to the total value of all property covered by the insurance policy. ["VALUE OF PROPERTY" IS DEFINED AS RETAIL INVENTORY, FIXTURES, LEASEHOLDS, REAL PROPERTY AND BUSINESS INTERRUPTION.]

(VI) AUTOMOBILE INSURANCE costs shall be charged on each insured vehicle owned or leased by DSW which is covered by the insurance policy.

(VII) CARGO INSURANCE costs shall be prorated based on the ratio of the duties paid for DSW imports covered by the insurance policy as compared to the total duties paid for all imports covered by the insurance policy.

(VIII) WORKERS COMPENSATION costs shall be prorated based on an actual per state rate against projected payrolls plus estimated claims cost per location.

(IX) EXECUTIVE PROTECTION AND OTHERS--Executive Protection Insurance (or crime) and other costs shall be prorated based on the ratio of sales for DSW as compared to the total sales covered by the policy.

Exhibit 10.3

TAX SEPARATION AGREEMENT

by and among

RETAIL VENTURES, INC.

AND ITS AFFILIATES

and

DSW INC.

AND ITS AFFILIATES

Dated

July 5, 2005

TABLE OF CONTENTS

                                                                                     Page
                                                                                     ----
Section 1.   Definitions.                                                              1
Section 2.   Preparation and Filing of Tax Returns.                                    8
             2.01. RVI's Responsibility                                                8
             2.02. DSW's Responsibility                                                8
             2.03. Agent                                                               8
             2.04. Manner of Tax Return Preparation                                    9
             2.05. Tax & Accounting Services Agreement                                10
Section 3.   Liability for Taxes                                                      11
             3.01. DSW's Liability for Taxes                                          11
             3.02. RVI's Liability for Taxes                                          11
             3.03. Taxes, Refunds and Credits.                                        11
             3.04. Payment of Tax Liability.                                          12
             3.05. Computation.                                                       12
Section 4.   Distribution Taxes                                                       12
             4.01. Distribution Taxes                                                 12
             4.02. Carrybacks                                                         14
             4.03. Allocation of Tax Items                                            15
             4.04. Continuing Covenants                                               15
             4.05. Allocation of Tax Assets                                           17
Section 5.   Employee Taxes.                                                          17
             5.01. In General.                                                        17
             5.02. Concurrent Employees.                                              17
             5.03. Leased Employees.                                                  18
Section 6.   Indemnification                                                          18
             6.01. In General                                                         18
             6.02. Inaccurate or Incomplete Information                               18
             6.03. No Indemnification for Tax Items                                   18
Section 7.   Payments.                                                                19
             7.01. Estimated Tax Payments                                             19
             7.02. True-Up Payments                                                   19
             7.03. Redetermination Amounts                                            19
             7.04. Payments of Refunds and Credits                                    19
             7.05. Payments Under This Agreement                                      19

Section 8.   Tax Proceedings.                                                         20
             8.01. In General                                                         20
             8.02. Participation of non-Controlling Party                             21
             8.03. Notice                                                             21
             8.04. Control of Distribution Tax Proceedings                            21
Section 9.   Stock Options and Restricted Stock                                       22
             9.01. In General.                                                        22
             9.02. Notices, Withholding, Reporting.                                   22
             9.03. Adjustments.                                                       22
Section 10.  Miscellaneous Provisions.                                                22
             10.01. Effectiveness                                                     22
             10.02. Cooperation and Exchange of Information                           22
             10.03. Dispute Resolution                                                23
             10.04. Notices.                                                          24
             10.05. Changes in Law                                                    24
             10.06. Confidentiality                                                   24
             10.07. Successors                                                        25
             10.08. Affiliates                                                        25
             10.09. Authorization, Etc                                                26
             10.10. Entire Agreement                                                  26
             10.11. Applicable Law; Jurisdiction                                      26
             10.12. Counterparts                                                      26
             10.13. Severability                                                      26
             10.14. No Third Party Beneficiaries                                      27
             10.15. Waivers, Etc                                                      27
             10.16. Setoff                                                            27
             10.17. Other Remedies                                                    27
             10.18. Amendment and Modification.                                       27
             10.19. Waiver of Jury Trial.                                             27
             10.20. Interpretations.                                                  27

TAX SEPARATION AGREEMENT

THIS TAX SEPARATION AGREEMENT (this "Agreement") dated as of July 5, 2005, by and among Retail Ventures, Inc., an Ohio corporation ("RVI"), each RVI Affiliate (as defined below), DSW Inc., an Ohio corporation and currently an indirect, wholly-owned subsidiary of RVI ("DSW"), and each DSW Affiliate (as defined below) is entered into in connection with the IPO (as defined below).

RECITALS

WHEREAS, as of the date hereof, RVI and its direct and indirect domestic subsidiaries are members of an Affiliated Group (as defined below), of which RVI is the common parent;

WHEREAS, RVI owns all of the issued and outstanding shares of DSW stock;

WHEREAS, RVI intends to cause DSW to complete the DSW Recapitalization (as defined below);

WHEREAS, RVI intends, sometime after the DSW Recapitalization, to effect the initial public offering by DSW of DSW common stock that will reduce RVI's ownership of DSW, on a fully diluted basis, to less than eighty percent (80%) of the value of DSW's common stock (the "IPO"); and

WHEREAS, in contemplation of the IPO pursuant to which DSW (and its direct and indirect domestic subsidiaries) will cease to be members of the Affiliated Group (as defined below) of which RVI is the common parent, the parties hereto have determined to enter into this Agreement, setting forth their agreement with respect to certain tax matters.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS.

As used in this Agreement, capitalized terms shall have the following meanings (such meanings to be equally applicable to both the singular and the plural forms of the terms defined):

"AFFILIATED GROUP" means an affiliated group of corporations within the meaning of section 1504(a)(1) of the Code that files a consolidated return for United States federal Income Tax purposes.

"AFTER TAX AMOUNT" means any additional amount necessary to reflect the hypothetical Tax consequences of the receipt or accrual of any payment required to be made under this

Agreement (including payment of an additional amount or amounts hereunder and the effect of the deductions available for interest paid or accrued and for Taxes such as state and local Income Taxes), determined by using the highest applicable statutory corporate Income Tax rate (or rates, in the case of an item that affects more than one Tax) for the relevant taxable period (or portion thereof).

"AGREEMENT" has the meaning set forth in the preamble hereto.

"AUDIT" means any audit, notice of assessment of Taxes, assessment of Taxes, other examination by any Tax Authority, proceeding, or appeal of such a proceeding relating to Taxes, whether administrative or judicial, including proceedings relating to competent authority determinations.

"CARRYBACK PERIOD" has the meaning set forth in Section 4.02 of this Agreement.

"CODE" means the Internal Revenue Code of 1986, as amended.

"COMBINED RETURN" means any Tax Return, other than with respect to United States federal Income Taxes, filed on a consolidated, combined (including nexus combination, worldwide combination, domestic combination, line of business combination or any other form of combination) or unitary basis wherein DSW or one or more DSW Affiliates join in the filing of such Tax Return (for any taxable period or portion thereof) with RVI or one or more RVI Affiliates.

"CONSOLIDATED RETURN" means any Tax Return with respect to United States federal Income Taxes filed on a consolidated basis wherein DSW or one or more DSW Affiliates join in the filing of such Tax Return (for any taxable period or portion thereof) with RVI or one or more RVI Affiliates.

"CONTROLLING PARTY" has the meaning set forth in Section 8.01 of this Agreement.

"DISTRIBUTION" means any distribution by RVI of all of the issued and outstanding shares of DSW stock that RVI holds at such time to RVI shareholders on a pro rata basis with respect to its outstanding shares of RVI common stock in a transaction intended to qualify as a tax-free distribution under section 355 of the Code.

"DISTRIBUTION TAXES" means any Taxes imposed on, or increase in Taxes incurred by, RVI or any RVI Affiliate, and any Taxes of an RVI shareholder (or former RVI shareholder) that are required (other than pursuant to any contractual indemnification obligation with an RVI shareholder) to be paid or reimbursed by RVI or any RVI Affiliate pursuant to a legal determination, provided that RVI shall have vigorously defended itself in any legal proceeding involving Taxes of an RVI shareholder, (without regard to whether such Taxes are offset or reduced by any Tax Asset, Tax Item, or otherwise) resulting from, or arising in connection with, the failure of a Distribution to qualify as a tax-free transaction under section 355 of the Code (including any Tax resulting from the application of section 355(d) or section 355(e) of the Code to a Distribution)

or corresponding provisions of the laws of any other jurisdictions. Any Income Tax referred to in the immediately preceding sentence shall be determined using the highest applicable statutory corporate Income Tax rate for the relevant taxable period (or portion thereof).

"DSW" has the meaning set forth in the preamble hereto.

"DSW AFFILIATE" means any corporation or other entity directly or indirectly "controlled" by DSW at the time in question, where "control" means the ownership of fifty percent (50%) or more of the ownership interests of such corporation or other entity (by vote or value) or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such corporation or other entity.

"DSW BUSINESS" means the business and operations conducted by DSW and its Subsidiaries as such business and operations will continue after the IPO Date.

"DSW BUSINESS RECORDS" has the meaning set forth in Section 10.02(b) of this Agreement.

"DSW GROUP" means the Affiliated Group, or similar group of entities as defined under corresponding provisions of the laws of other jurisdictions, of which DSW will be the common parent corporation immediately after the IPO and including any corporation or other entity which may become a member of such group from time to time.

"DSW RECAPITALIZATION" means the recapitalization of DSW's stock structure intended to be completed by the (i) cancellation of all of DSW's then authorized, issued and/or outstanding stock, (ii) authorization of two new classes of DSW stock, DSW Class A Common Stock and DSW Class B Common Stock, which will be identical in all respects, except that each share of DSW Class B Common Stock will be entitled to more votes per share than each share of DSW Class A Common Stock, and (iii) issuance of DSW Class B Common Stock to RVI with respect to RVI's ownership of DSW stock.

"DSW SEPARATE TAX LIABILITY" means an amount equal to the Tax liability that DSW and each DSW Affiliate would have incurred if they had filed a consolidated return, combined return (including nexus combination, worldwide combination, domestic combination, line of business combination or any other form of combination), unitary return or a separate return, as the case may be, separate from the members of the RVI Group, for the relevant Tax period, and such amount shall be computed by RVI in a manner consistent with (i) general Tax accounting principles, (ii) the Code and the Treasury regulations promulgated thereunder, and (iii) past practice, if any. For the avoidance of doubt, the DSW Separate Tax Liability shall in no event be less than zero, and nothing in this Agreement shall be construed to require compensation by RVI for any losses of DSW or any DSW Affiliate.

"EMPLOYMENT TAXES" means any and all employment Taxes, including payroll and employee withholding, unemployment insurance, social security, welfare, disability and similar Taxes, fees, duties, levies, customs, tariffs, imposts, assessments, obligations and charges.

"ESTIMATED TAX INSTALLMENT DATE" means, with respect to United States federal Income Taxes, the estimated Tax installment due dates prescribed in section 6655(c) of the Code and, in the case of any other Tax, means any other date on which an installment payment of an estimated amount of such Tax is required to be made.

"FINAL DETERMINATION" shall mean the final resolution of liability for any Tax for any taxable period, by or as a result of: (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction; (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under sections 7121 or 7122 of the Code, or a comparable agreement under the laws of other jurisdictions, which resolves the entire Tax liability for any taxable period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered by the jurisdiction imposing the Tax; or (iv) any other final disposition, including by reason of the expiration of the applicable statute of limitations.

"INCOME TAX" shall mean any federal, state, local or foreign Tax determined (in whole or in part) by reference to net income, net worth, gross receipts or capital, or any such Taxes imposed in lieu of such a Tax. For the avoidance of doubt, the term "Income Tax" includes any franchise Tax, net worth, gross receipts, capital or any such Taxes imposed in lieu of such a Tax.

"INCOME TAX RETURN" means any Tax Return relating to any Income Tax.

"INDEPENDENT FIRM" means a nationally recognized law or accounting firm, which firm is independent of both parties.

"IPO" has the meaning set forth in the recitals hereto.

"IPO DATE" means the close of business on the date which the IPO is effected.

"IRS" means the United States Internal Revenue Service or any successor thereto, including its agents, representatives, and attorneys.

"JOINT RESPONSIBILITY ITEM" means any Tax Item for which the non-Controlling Party's responsibility under this Agreement could exceed three hundred thousand dollars ($300,000), but not a Sole Responsibility Item.

"MARKET VALUATION" means as of the first business day immediately following the date on which the Distribution is effected (i) with respect to DSW, the fair market value of all of its issued and outstanding stock (measured using the mean of the high and low of the public trading price as published in The Wall Street Journal) as of such date, or (ii) with respect to RVI, the fair market value of all of its issued and outstanding stock (measured using the mean of the high and low of the public trading price as published in The Wall Street Journal) as of such date.

"NON-INCOME TAX RETURN" means any Tax Return relating to any Tax other than an Income Tax.

"OFFICER'S CERTIFICATE" means a letter executed by an officer of RVI or DSW and provided to Tax Counsel as a condition for the completion of a Tax Opinion or Supplemental Tax Opinion.

"OPTION" means an option to acquire common stock, or other equity-based incentives the economic value of which is designed to mirror that of an option, including non-qualified stock options, discounted non-qualified stock options, cliff options to the extent stock is issued or issuable (as opposed to cash compensation), and tandem stock options to the extent stock is issued or issuable (as opposed to cash compensation).

"OWED PARTY" has the meaning set forth in Section 7.05 of this Agreement.

"OWING PARTY" has the meaning set forth in Section 7.05 of this Agreement.

"PAYMENT PERIOD" has the meaning set forth in Section 7.05(e) of this Agreement.

"POST-IPO PERIOD" means any taxable period beginning after the IPO Date.

"PRE-IPO PERIOD" means any taxable period beginning on or before the IPO Date.

"RULING" means (i) any private letter ruling issued by the IRS in connection with a Distribution in response to a request for such a private letter ruling filed by RVI (or any RVI Affiliate) prior to the date of a Distribution, and (ii) any similar ruling issued by any other Taxing Authority addressing the application of a provision of the laws of another jurisdiction to a Distribution.

"RULING DOCUMENTS" means (i) the request for a Ruling filed with the IRS, together with any supplemental filings or other materials subsequently submitted on behalf of RVI, its Subsidiaries and shareholders to the IRS, the appendices and exhibits thereto, and any Ruling issued by the IRS to RVI (or any RVI Affiliate) in connection with a Distribution and (ii) any similar filings submitted to, or rulings issued by, any other Taxing Authority in connection with a Distribution.

"RVI" has the meaning set forth in the preamble hereto.

"RVI AFFILIATE" means any corporation or other entity directly or indirectly "controlled" by RVI where "control" means the ownership of fifty percent (50%) or more of the ownership interests of such corporation or other entity (by vote or value) or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such corporation or other entity, but at all times excluding DSW or any DSW Affiliate.

"RVI BUSINESS" means all of the businesses and operations conducted by RVI and its Subsidiaries, excluding the DSW Business, as defined above, at any time, whether prior to, or after the IPO Date.

"RVI GROUP" means the Affiliated Group, or similar group of entities as defined under corresponding provisions of the laws of other jurisdictions, of which RVI is the common parent corporation, and any corporation or other entity which may be, may have been or may become a member of such group from time to time, but excluding any member of the DSW Group.

"SHARED SERVICES AGREEMENT" means the Shared Services Agreement, dated effective as of January 30, 2005, by and between RVI and DSW.

"SOLE RESPONSIBILITY ITEM" means any Tax Item for which the non-Controlling Party has the entire economic liability under this Agreement.

"SUBSIDIARY" whenever used in reference to any person means any corporation or other entity directly or indirectly "controlled" by such person where "control" means the ownership of fifty percent (50%) or more of the ownership interests of such corporation or other entity (by vote or value) or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such corporation or other entity.

"SUPPLEMENTAL RULING" means (i) any ruling (other than the Ruling) issued by the IRS in connection with a Distribution, and (ii) any similar ruling issued by any other Taxing Authority addressing the application of a provision of the laws of another jurisdiction to a Distribution.

"SUPPLEMENTAL RULING DOCUMENTS" means (i) the request for a Supplemental Ruling, together with any supplemental filings or other materials subsequently submitted, the appendices and exhibits thereto, and any Supplemental Rulings issued by the IRS in connection with a Distribution and (ii) any similar filings submitted to, or rulings issued by, any other Taxing Authority in connection with a Distribution.

"SUPPLEMENTAL TAX OPINION" has the meaning set forth in Section 4.04(d) of this Agreement.

"TAXES" means all federal, state, local or foreign taxes, charges, fees, duties, levies, imposts, rates or other assessments, including income, gross receipts, excise, property, sales, use, license, capital stock, transfer, franchise, payroll, withholding, social security, value added or other taxes, (including any interest, penalties or additions attributable thereto) and a "Tax" shall mean any one of such Taxes.

"TAX ASSET" means any Tax Item that has accrued for Tax purposes, but has not been realized during the taxable period in which it has accrued, and that could reduce a Tax in another taxable period, including a net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable deduction or credit related to alternative minimum tax or any other Tax credit.

"TAX BENEFIT" means a reduction in the Tax liability (or increase in refund or credit or any item of deduction or expense) of a taxpayer (or of the Affiliated Group, or similar group of entities as defined under corresponding provisions of the laws of any other jurisdiction, of which it is a member) for any taxable period. Except as otherwise provided in this Agreement, a Tax Benefit shall be deemed to have been realized or received from a Tax Item in a taxable period only if and to the extent that the Tax liability of the taxpayer (or of the Affiliated Group, or similar group of entities as defined under corresponding provisions of the laws of any other jurisdiction, of which it is a member) for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer (or of the Affiliated Group, or similar group of entities as defined under corresponding provisions of the laws of any other jurisdiction, of which it is a member) in the current period and all prior periods, is less than it would have been had such Tax liability been determined without regard to such Tax Item.

"TAX COUNSEL" means a nationally recognized law firm selected by RVI to provide a Tax Opinion.

"TAX DETRIMENT" means an increase in the Tax liability (or reduction in refund or credit or any item of deduction or expense) of a taxpayer (or of the Affiliated Group, or similar group of entities as defined under corresponding provisions of the laws of any other jurisdiction, of which it is a member) for any taxable period. Except as otherwise provided in this Agreement, a Tax Detriment shall be deemed to have been realized or incurred from a Tax Item in a taxable period only if and to the extent that the Tax liability of the taxpayer (or of the Affiliated Group, or similar group of entities as defined under corresponding provisions of the laws of any other jurisdiction, of which it is a member) for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer (or of the Affiliated Group, or similar group of entities as defined under corresponding provisions of the laws of any other jurisdiction, of which it is a member) in the current period and all prior periods, is more than it would have been had such Tax liability been determined without regard to such Tax Item.

"TAX ITEM" means any item of income, gain, loss, deduction, expense or credit, or other attribute that may have the effect of increasing or decreasing any Tax.

"TAX OPINION" means an opinion issued by Tax Counsel as one of the conditions to completing a Distribution addressing certain United States federal Income Tax consequences of a Distribution under section 355 of the Code.

"TAX RETURN" means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, amended tax return, claim for refund or declaration of estimated Tax) required to be supplied to, or filed with, a Taxing Authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.

"TAX & ACCOUNTING SERVICES" has the meaning set forth in Section 2.05(a) of this Agreement.

"TAXING AUTHORITY" means any governmental authority or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS).

SECTION 2. PREPARATION AND FILING OF TAX RETURNS.

2.01. RVI's Responsibility. Subject to the other applicable provisions of this Agreement, RVI shall have sole and exclusive responsibility for the preparation and filing of:

(a) all Consolidated Returns and all Combined Returns for any taxable period;

(b) all Income Tax Returns (other than Consolidated Returns and Combined Returns) with respect to RVI and/or any RVI Affiliate for any taxable period;

(c) all Non-Income Tax Returns with respect to DSW, any DSW Affiliate, or the DSW Business or any part thereof, that are required to be filed (taking into account any extension of time which has been requested or received) on or prior to the IPO Date; and

(d) all Non-Income Tax Returns with respect to RVI, any RVI Affiliate, or the RVI Business or any part thereof for any taxable period.

2.02. DSW's Responsibility. Subject to the other applicable provisions of this Agreement, DSW shall have sole and exclusive responsibility for the preparation and filing of:

(a) all Income Tax Returns (other than Consolidated Returns and Combined Returns) with respect to DSW and/or any DSW Affiliate for any taxable period;

(b) all Non-Income Tax Returns with respect to DSW, any DSW Affiliate, or the DSW Business or any part thereof, that are required to be filed (taking into account any extension of time which has been requested or received) after the IPO Date.

2.03. Agent. Subject to the other applicable provisions of this Agreement, DSW hereby irrevocably designates, and agrees to cause each DSW Affiliate to so designate, RVI as its sole and exclusive agent and attorney-in-fact to take such action (including execution of documents) as RVI, in its sole discretion, may deem appropriate in any and all matters (including Audits) relating to any Tax Return described in Section 2.01 of this Agreement.

2.04. Manner of Tax Return Preparation.

(a) Unless otherwise required by a Taxing Authority, the parties hereby agree to prepare and file all Tax Returns, and to take all other actions, in a manner consistent with (1) this Agreement, (2) any Tax Opinion, (3) any Supplemental Tax Opinion, (4) any Ruling, and (5) any Supplemental Ruling. All Tax Returns shall be filed on a timely basis (taking into account applicable extensions) by the party responsible for filing such returns under this Agreement.

(b) Subject to the other applicable provisions of this Agreement, RVI shall have the exclusive right, in its sole discretion, with respect to any Tax Return described in Section 2.01 of this Agreement, to determine (1) the manner in which such Tax Return shall be prepared and filed, including the elections, method of accounting, positions, conventions and principles of taxation to be used and the manner in which any Tax Item shall be reported, (2) whether any extensions shall be requested, (3) the elections that will be made by RVI, any RVI Affiliate, DSW, and/or any DSW Affiliate on such Tax Return, (4) whether any amended Tax Returns shall be filed, (5) whether any claims for refund shall be made, (6) whether any refunds shall be paid by way of refund or credited against any liability for the related Tax, and (7) whether to retain outside firms to prepare and/or review such Tax Returns. In the case of any Consolidated Return or Combined Return due (with applicable extensions) forty-five (45) days or more after the IPO Date including or reporting a DSW Separate Tax Liability, and any Tax Return due at any time after the IPO Date that reports a DSW Separate Tax Liability in excess of five hundred thousand dollars ($500,000), RVI shall provide to DSW a pro forma draft of the portion of such Tax Return that reflects the DSW Separate Tax Liability and a statement showing in reasonable detail RVI's calculation of the DSW Separate Tax Liability (including copies of all worksheets and other materials used in preparation thereof) at least twenty (20) days prior to the due date (with applicable extensions) for the filing of such Tax Return for DSW's review and comment. DSW shall provide its comments to RVI at least fifteen (15) days prior to the due date (with applicable extensions) for the filing of such Tax Return. Any dispute regarding the reporting of any Tax Item on such Tax Return shall be resolved pursuant to Section 10.03 of this Agreement. The relevant Tax Item shall be reported in the manner that the Independent Firm determines is more appropriate, and such determination shall be final and binding on RVI and DSW. If DSW has not provided its comments on the pro forma draft of the portion of the Tax Return, or in the case of a dispute regarding the reporting of any Tax Item, such dispute has not been resolved by the due date (with applicable extension) for the filing of any Tax Return, RVI shall file such Tax Return reporting all Tax Items in the manner as originally set forth on the pro forma draft of the portion of the Tax Return provided to DSW; provided, however, that RVI agrees that it will thereafter file an amended Tax Return, if necessary, reporting any disputed Tax Item in the manner determined by the Independent Firm, and any other Tax Item as agreed upon by RVI and DSW.

2.05. Tax & Accounting Services Agreement.

(a) In General. RVI shall prepare for DSW any Tax Return described in Section 2.02 of this Agreement and provide other Tax related services to DSW, as set forth on Schedule 2.05(a) attached hereto (the "Tax & Accounting Services"). In consideration for the Tax & Accounting Services, DSW shall (i) pay to RVI fifty percent (50%) of any and all costs associated with the maintenance and operation of RVI's tax department (including any and all overhead expenses) for each month in which the Tax & Accounting Services are to be performed, and (ii) reimburse RVI for fifty percent (50%) of any and all third party fees and expenses incurred by RVI; provided, however, that, (i) DSW shall reimburse RVI for one hundred percent (100%) of any and all third party fees and expenses incurred by RVI solely in connection with the performance of the Tax & Accounting Services, and (ii) DSW shall not be required to reimburse RVI for any portion of any third party fees and expenses incurred by RVI solely for the benefit of RVI or any RVI Affiliate. Payment and reimbursement with respect to Tax & Accounting Services performed in a particular month shall be made within twenty (20) days of the end of such month in immediately available funds as instructed by RVI ; provided, however, that, upon termination of the rights and obligations pursuant to this Section 2.05, payment and reimbursement with respect to all Tax & Accounting Services performed through and including the effective date of the termination shall be made at least two (2) days prior to the effective date of the termination. Either party shall have the right to terminate all rights and obligations pursuant to this Section 2.05 effective upon one hundred and eighty (180) days written notice to the other party of its cancellation of the Tax & Accounting Services.

(b) Right to Review. RVI shall provide DSW with (i) any Income Tax Return to be prepared by RVI for DSW pursuant to the Tax & Accounting Services at least twenty (20) days prior to the due date of such Tax Return or as is otherwise consistent with past practice and (ii) any Non-Income Tax Return to be prepared by RVI for DSW pursuant to the Tax & Accounting Services at least four
(4) days prior to the due date of such Tax Return or as is otherwise consistent with past practice. DSW shall have the right to comment on any such Tax Return and RVI shall reasonably consider all comments made by DSW.

(c) Information. DSW shall timely provide all information reasonably requested by RVI to prepare all Tax Returns, compute all estimated Tax payments (for purposes of Section 7.01 of this Agreement) and perform the Tax & Accounting Services, and all such information shall be provided in a manner reasonably requested by RVI. RVI shall provide DSW with all Tax Returns prepared for DSW pursuant to the Tax & Accounting Services and copies of any notices or communications from any Taxing Authority relating to any Tax or Tax Return of DSW or any DSW Affiliate covered by the Tax & Accounting Services. DSW shall execute and deliver to RVI a power of attorney authorizing the appropriate RVI employees to sign as "paid preparer" any Tax Return prepared by RVI for DSW pursuant to the Tax & Accounting Services.

SECTION 3. LIABILITY FOR TAXES.

3.01. DSW's Liability for Taxes. DSW and each DSW Affiliate shall be jointly and severally liable for the following Taxes, and shall be entitled to receive and retain all refunds of Taxes previously incurred by DSW, any DSW Affiliate, or the DSW Business with respect to such Taxes:

(a) all Taxes with respect to Tax Returns described in Section 2.01(a) of this Agreement to the extent that such Taxes are related to (i) the DSW Separate Tax Liability or (ii) the DSW Business, for any taxable period;

(b) all Taxes with respect to Tax Returns described in Section 2.01(c) of this Agreement;

(c) all Taxes with respect to Tax Returns described in Section 2.02 of this Agreement;

(d) all Taxes imposed by any Taxing Authority with respect to the DSW Business, DSW or any DSW Affiliate (other than in connection with the required filing of a Tax Return described in Sections 2.01(a), 2.01(c) or 2.02 of this Agreement) for any taxable period; and

(e) all franchise or property Taxes imposed by any Taxing Authority determined in whole or in part by reference to the value of DSW or the assets of DSW or any DSW Affiliate for any taxable period (or portion thereof) ending on or before December 31, 2006, but only to the extent that such value is determined by such Taxing Authority to be greater than the amount reported on the last applicable Tax Return filed before the IPO Date.

3.02. RVI's Liability for Taxes. RVI shall be liable for the following Taxes, and shall be entitled to receive and retain all refunds of Taxes previously incurred by RVI, any RVI Affiliate, or the RVI Business with respect to such Taxes:

(a) except as provided in Section 3.01(a) of this Agreement, all Taxes with respect to Tax Returns described in Section 2.01(a) of this Agreement for any taxable period;

(b) all Taxes with respect to Tax Returns described in Sections 2.01(b) or 2.01(d) of this Agreement; and

(c) all Taxes imposed by any Taxing Authority with respect to RVI, any RVI Affiliate, or the RVI Business (other than in connection with the required filing of a Tax Return described in Sections 2.01(a), 2.01(b), or 2.01(d) of this Agreement) for any taxable period.

3.03. Taxes, Refunds and Credits. Notwithstanding Sections 3.01 and 3.02 of this Agreement, (i) RVI shall be liable for all Taxes incurred by any Subsidiary with respect to the RVI Business for all periods and shall be entitled to all refunds and credits of Taxes previously

incurred by any person with respect to such Taxes, and (ii) DSW and each DSW Affiliate shall be jointly and severally liable for all Taxes incurred by any RVI Subsidiary with respect to the DSW Business for all periods and shall be entitled to all refunds and credits of Taxes previously incurred by any person with respect to such Taxes. Nothing in this Agreement shall be construed as to require compensation, by payment, credit, offset or otherwise, by RVI (or any RVI Affiliate) to DSW (or any DSW Affiliate) for any loss, deduction, credit or other Tax attribute arising in connection with, or related to, DSW, any DSW Affiliate, or the DSW Business, that is shown on, or otherwise reflected with respect to, any Tax Return described in Section 2.01 of this Agreement. Notwithstanding anything to the contrary in this Agreement, any Taxes incurred by RVI or RVI Affiliates with respect to the receipt by RVI or RVI Affiliates of some or all of the proceeds derived from the IPO shall be solely the responsibility of RVI. Notwithstanding anything to the contrary in this Agreement (other than Section 4 of this Agreement), DSW shall not be liable for, and shall have no obligation under this Agreement in respect of, any Taxes (other than Distribution Taxes pursuant to Section 4 of this Agreement) arising out of or relating to the exercise by any person of any warrant, option, exchange right, conversion right or similar arrangement contemplated by the letter of intent (and the accompanying term sheet), dated as of March 10, 2005, by and among RVI, each of its Subsidiaries, and Cerberus Partners, L.P.

3.04. Payment of Tax Liability. If one party is liable or responsible for Taxes, under Sections 3.01 through 3.03 of this Agreement, with respect to Tax Returns for which another party is responsible for filing, or with respect to Taxes that are paid by another party, then the liable or responsible party shall pay the Taxes (or a reimbursement of such Taxes) to the other party pursuant to
Section 7.05 of this Agreement.

3.05. Computation. RVI shall provide DSW with a written calculation in reasonable detail (including copies of all work sheets and other materials used in preparation thereof) setting forth the amount of any DSW Separate Tax Liability or estimated DSW Separate Tax Liability (for purposes of Section 7.01 of this Agreement) and any Taxes related to the DSW Business. DSW shall have the right to review and comment on such calculation. Any dispute with respect to such calculation shall be resolved pursuant to Section 10.03 of this Agreement; provided, however, that, notwithstanding any dispute with respect to any such calculation, in no event shall any payment attributable to the amount of any DSW Separate Tax Liability or estimated DSW Separate Tax Liability be paid later than the date provided in Section 7 of this Agreement.

SECTION 4. DISTRIBUTION TAXES AND DECONSOLIDATION.

4.01. Distribution Taxes. Although neither party has any plan or intent to effectuate a Distribution, the parties have set forth how certain Tax matters with respect to a Distribution would be handled in the event that, as a result of changed circumstances, a Distribution is pursued at some future time.

(a) RVI's Liability for Distribution Taxes. In the event of a Distribution, notwithstanding Sections 3.01 through 3.03 of this Agreement, RVI and each RVI Affiliate shall be jointly and severally liable for any Distribution Taxes, to the extent that such Distribution Taxes are attributable to, caused by, or result from, one or more of the following:

(i) any action or omission by RVI (or any RVI Affiliate) inconsistent with any material, information, covenant or representation related to RVI, any RVI Affiliate, or the RVI Business in an Officer's Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling (for the avoidance of doubt, disclosure of any action or fact that is inconsistent with any material, information, covenant or representation submitted to Tax Counsel, the IRS, or other Taxing Authority, as applicable, in connection with an Officer's Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling shall not relieve RVI (or any RVI Affiliate) of liability under this Agreement);

(ii) any action or omission by RVI (or any RVI Affiliate), including a cessation, transfer to affiliates, or disposition of its active trades or businesses, or an issuance of stock, stock buyback or payment of an extraordinary dividend by RVI (or any RVI Affiliate) following a Distribution;

(iii) any acquisition of any stock or assets of RVI (or any RVI Affiliate) by one or more other persons (other than DSW or a DSW Affiliate) prior to or following a Distribution; or

(iv) any issuance of stock by RVI (or any RVI Affiliate), or change in ownership of stock in RVI (or any RVI Affiliate).

(b) DSW's Liability for Distribution Taxes. In the event of a Distribution, notwithstanding Sections 3.01 through 3.03 of this Agreement, DSW and each DSW Affiliate shall be jointly and severally liable for any Distribution Taxes, to the extent that such Distribution Taxes are attributable to, caused by, or result from, one or more of the following:

(i) any action or omission by DSW (or any DSW Affiliate) after a Distribution at any time, that is inconsistent with any written representations of an officer of DSW pursuant to Section 4.04(f) of this Agreement with respect to any material, information, covenant or representation related to DSW, any DSW Affiliate, or the DSW Business in an Officer's Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling (for the avoidance of doubt, disclosure by DSW (or any DSW Affiliate) to RVI (or any RVI Affiliate) of any action or fact that is inconsistent with any material, information, covenant or representation submitted to Tax Counsel, the IRS, or other Taxing Authority, as applicable, in connection with an Officer's Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling shall not relieve DSW (or any DSW Affiliate) of liability under this Agreement);

(ii) any action or omission by DSW (or any DSW Affiliate) after the date of a Distribution (including any act or omission that is in furtherance of, connected to, or part of a plan or series of related transactions (within the meaning of section 355(e) of the Code) occurring on or prior to the date of a Distribution) including a cessation, transfer to affiliates or

disposition of the active trades or businesses of DSW (or any DSW Affiliate), stock buyback or payment of an extraordinary dividend;

(iii) any acquisition of any stock or assets of DSW (or any DSW Affiliate) by one or more other persons (other than RVI or any RVI Affiliate) prior to or following a Distribution; or

(iv) any issuance of stock by DSW (or any DSW Affiliate) after a Distribution, including any issuance pursuant to the exercise of employee stock options or other employment related arrangements or the exercise of warrants, or change in ownership of stock in DSW (or any DSW Affiliate) after a Distribution.

(c) Joint Liability for Remaining Distribution Taxes. RVI shall be liable for a percentage of any Distribution Taxes (not otherwise allocated by Sections 4.01(a) or (b)) equal to the quotient of (i) RVI's Market Valuation, divided by (ii) the sum of (x) RVI's Market Valuation, and (y) DSW's Market Valuation. DSW and each DSW Affiliate shall be jointly and severally liable for a percentage of any Distribution Taxes (not otherwise allocated by Sections 4.01(a) or (b)) equal to the quotient of (i) DSW's Market Valuation, divided by
(ii) the sum of (x) RVI's Market Valuation, and (y) DSW's Market Valuation.

4.02. Carrybacks.

(a) In General. RVI agrees to pay to DSW the United States federal income Tax Benefit from the use in any Pre-IPO Period (the "Carryback Period") of a carryback of any Tax Asset of the DSW Group from a Post-IPO Period (other than a carryback of any Tax Asset attributable to Distribution Taxes for which the liability is borne by RVI or any RVI Affiliate). If subsequent to the payment by RVI to DSW of the United States federal income Tax Benefit of a carryback of a Tax Asset of the DSW Group, there shall be a Final Determination which results in a (1) change to the amount of the Tax Asset so carried back or
(2) change to the amount of such United States federal income Tax Benefit, DSW shall repay to RVI, or RVI shall repay to DSW, as the case may be, any amount which would not have been payable to such other party pursuant to this Section 4.02(a) had the amount of the benefit been determined in light of these events. Nothing in this Section 4.02(a) shall require RVI to file an amended Tax Return or claim for refund of United States federal Income Taxes; provided, however, that RVI shall use its reasonable efforts to use any carryback of a Tax Asset of the DSW Group that is carried back under this Section 4.02(a).

(b) Net Operating Losses. Notwithstanding any other provision of this Agreement, DSW hereby expressly agrees to elect (under section 172(b)(3) of the Code and, to the extent feasible, any similar provision of any state, local or foreign Tax law) to relinquish any right to carryback net operating losses to any Pre-IPO Periods of RVI (in which event no payment shall be due from RVI to DSW in respect of such net operating losses).

4.03. Allocation of Tax Items. All Tax computations for (1) any Pre-IPO Periods ending on the IPO Date and (2) the immediately following taxable period of DSW or any DSW Affiliate, shall be made pursuant to the principles of section 1.1502-76(b) of the Treasury Regulations or of a corresponding provision under the laws of other jurisdictions, as reasonably determined by RVI, taking into account all reasonable suggestions made by DSW with respect thereto.

4.04. Continuing Covenants.

(a) In General. Each of RVI (for itself and each RVI Affiliate) and DSW (for itself and each DSW Affiliate) agrees (1) not to take any action reasonably expected to result in an increased Tax liability to the other, a reduction in a Tax Asset of the other or an increased liability to the other under this Agreement, and (2) to take any action reasonably requested by the other that would reasonably be expected to result in a Tax Benefit or avoid a Tax Detriment to the other, provided, in either such case, that the taking or refraining to take such action does not result in any additional cost not fully compensated for by the other party or any other adverse effect to such party. The parties hereby acknowledge that the preceding sentence is not intended to limit, and therefore shall not apply to, the rights of the parties with respect to matters otherwise covered by this Agreement.

(b) DSW Restrictions. DSW agrees that, until such time as the stock of DSW owned by RVI and RVI Affiliates constitutes fifty percent (50%) or less of the total combined voting power of all of the outstanding stock of DSW, DSW
(1) will not knowingly take or fail to take, or permit any DSW Affiliate to knowingly take or fail to take, any action that could reasonably be expected to preclude RVI's ability to effectuate a Distribution, and (2) will not issue any stock of DSW (or any instrument that is convertible, exercisable or exchangeable into any such stock) in an acquisition or public or private offering if, immediately after such issuance, RVI would, or would reasonably be expected to, not own stock of DSW that, on a fully diluted basis, constitutes "control" (within the meaning of section 368(c) of the Code) of DSW. In the event of a Distribution, DSW agrees that (1) it will take, or cause any DSW Affiliate to take, any action reasonably requested by RVI in order to enable RVI to effectuate a Distribution (including any internal restructuring necessary to satisfy the active trade or business requirement of section 355(b) of the Code) and (2) it will not take or fail to take, or permit any DSW Affiliate to take or fail to take, any action where such action or failure to act would be inconsistent with any written representations of an officer of DSW pursuant to
Section 4.04(f) of this Agreement with respect to any material, information, covenant or representation that relates to facts or matters related to DSW, any DSW Affiliate, or the DSW Business in an Officer's Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling (except where such material, information, covenant or representation was not previously disclosed to DSW) other than as permitted by Section 4.04(d) of this Agreement. For this purpose an action is considered inconsistent with a representation if the representation states that there is no plan or intention to take such action. In the event of a Distribution, DSW agrees that it will not take (and it will cause the DSW Affiliates to refrain from taking) any position on a Tax Return that is inconsistent with the treatment of a Distribution as tax-free transactions under section 355 of the Code.

(c) RVI Restrictions. In the event of a Distribution, RVI agrees that it will not take or fail to take, or permit any RVI Affiliate to take or fail to take, any action where such action or failure to act would be inconsistent with any material, information, covenant or representation that relates to facts or matters related to RVI (or any RVI Affiliate) or within the control of RVI and is contained in an Officer's Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents, Supplemental Ruling Documents, Ruling, or Supplemental Ruling. For this purpose an action is considered inconsistent with a representation if the representation states that there is no plan or intention to take such action. In the event of a Distribution, RVI agrees that it will not take (and it will cause the RVI Affiliates to refrain from taking) any position on a Tax Return that is inconsistent with the treatment of a Distribution as tax-free transactions under section 355 of the Code.

(d) Certain DSW Actions Following a Distribution. In the event of a Distribution, DSW agrees that, during the two (2) year period following a Distribution, without first obtaining, at DSW's own expense, either a supplemental opinion from Tax Counsel that such action will not result in Distribution Taxes (a "Supplemental Tax Opinion") or a Supplemental Ruling that such action will not result in Distribution Taxes, unless in any such case RVI and DSW agree otherwise, DSW shall not (1) sell all or substantially all of the assets of DSW or any DSW Affiliate, (2) merge DSW, or any DSW Affiliate with another entity, without regard to which party is the surviving entity, (3) transfer any assets of DSW in a transaction described in section 351 (other than a transfer to a corporation which files a Consolidated Return with DSW and which is wholly-owned, directly or indirectly, by DSW) or subparagraph (C) or (D) of section 368(a)(1) of the Code, (4) issue stock of DSW or any DSW Affiliate (or any instrument that is convertible or exchangeable into any such stock) in an acquisition or public or private offering, or (5) facilitate or otherwise participate in any acquisition of stock in DSW that would result in any shareholder owning five percent (5%) or more of the outstanding stock of DSW. DSW (or any DSW Affiliate) shall only undertake any of such actions after RVI's receipt of such Supplemental Tax Opinion or Supplemental Ruling and pursuant to the terms and conditions of any such Supplemental Tax Opinion or Supplemental Ruling or as otherwise consented to in writing in advance by RVI. The parties hereby agree that they will act in good faith to take all reasonable steps necessary to amend this Section 4.04(d), from time to time, by mutual agreement, to (i) add certain actions to the list contained herein, or (ii) remove certain actions from the list contained herein, in either case, in order to reflect any relevant change in law, regulation or administrative interpretation occurring after the date of this Agreement.

(e) Notice of Specified Transactions. Not later than thirty (30) days prior to entering into any oral or written contract or agreement, and not later than five (5) days after it first becomes aware of any negotiations, plan or intention (regardless of whether it is a party to such negotiations, plan or intention), regarding any of the transactions described in Section 4.04(d) of this Agreement, DSW shall provide written notice of its intent to consummate such transaction or the negotiations, plan or intention of which it becomes aware, as the case may be, to RVI.

(f) DSW Cooperation. DSW agrees that, at the request of RVI, DSW shall cooperate fully with RVI to take any action necessary or reasonably helpful to effectuate a

Distribution, including seeking to obtain, as expeditiously as possible, a Tax Opinion, Supplemental Tax Opinion, Ruling, and/or Supplemental Ruling. Such cooperation shall include the execution of any documents that may be necessary or reasonably helpful in connection with obtaining any Tax Opinion, Supplemental Tax Opinion, Ruling, and/or Supplemental Ruling (including any (i) power of attorney, (ii) Officer's Certificate, (iii) Ruling Documents, (iv) Supplemental Rulings Documents, and/or (v) reasonably requested written representations confirming that (a) DSW has read the Officer's Certificate, Ruling Documents, and/or Supplemental Ruling Documents and (b) all information and representations, if any, relating to DSW (or any DSW Affiliate) contained in the Officer's Certificate, Ruling Documents, and/or Supplemental Ruling Documents are true, correct and complete in all material respects).

4.05. Allocation of Tax Assets. RVI shall advise DSW in writing within ninety (90) days after the filing of the Consolidated Return for the taxable year that includes the IPO Date of the allocation of any Tax Assets among RVI, each RVI Affiliate, DSW, and each DSW Affiliate. The parties hereby agree that, for purposes of determining such allocation, RVI shall be free to use any legally permissible method of allocation reasonably determined by RVI in its sole discretion. The parties hereby agree that in the absence of controlling legal authority or unless otherwise provided under this Agreement, Tax Assets shall be allocated in a manner reasonably determined by RVI in its sole discretion.

SECTION 5. EMPLOYEE TAXES.

5.01. In General. DSW and each DSW Affiliate shall be jointly and severally liable for any and all Employment Taxes allocable pursuant to this
Section 5 to DSW or any of DSW Affiliate, and RVI and each RVI Affiliate shall be jointly and severally liable for any and all Employment Taxes allocable pursuant to this Section 5 to RVI or any of RVI Affiliate. Except as otherwise provided in Sections 5.02 or 5.03 of this Agreement, (i) any and all Employment Taxes attributable to any employee identified as an employee of DSW or any DSW Affiliate on the applicable Tax Return in connection with state unemployment taxes as filed shall be allocated to DSW, and (ii) any and all Employment Taxes attributable to any employee identified as an employee of RVI or any RVI Affiliate on the applicable Tax Return in connection with state unemployment taxes as filed shall be allocated to DSW.

5.02. Concurrent Employees. For periods after January 29, 2005, any and all Employment Taxes attributable to any employee that provides concurrent services to a member of the RVI Group and a member of the DSW Group shall be allocated between the RVI Group and the DSW Group in the same manner as employee costs for the applicable period are allocated pursuant to the terms of the Shared Services Agreement. Except as otherwise provided in Section 5.03 of this Agreement, for periods prior to January 30, 2005, any and all Employment Taxes attributable to any employee that provided concurrent services to a member of the RVI Group and a member of the DSW Group shall be allocated between the RVI Group and the DSW Group in a manner consistent with the corporate allocation model utilized by RVI for the applicable period.

5.03. Leased Employees. For periods prior to January 1, 2004, any and all Employment Taxes attributable to any employee leased from Value City Department Store Services, Inc. shall be allocated to company that leased such employee; provided, however, that, if such employee provided concurrent services to a member of the RVI Group and a member of the DSW Group, Employment Taxes attributable to such employee shall be borne fifty percent (50%) by the RVI Group and fifty percent (50%) by the DSW Group.

SECTION 6. INDEMNIFICATION.

6.01. In General. RVI and each member of the RVI Group shall jointly and severally indemnify DSW, each DSW Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any and all Taxes for which RVI or any RVI Affiliate is liable under this Agreement and any loss, cost, damage or expense, including reasonable attorneys' fees and costs, that is attributable to, or results from, the failure of RVI, any RVI Affiliate or any director, officer or employee to make any payment required to be made under this Agreement. DSW and each member of the DSW Group shall jointly and severally indemnify RVI, each RVI Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any and all Taxes for which DSW or any DSW Affiliate is liable under this Agreement and any loss, cost, damage or expense, including reasonable attorneys' fees and costs, that is attributable to, or results from, the failure of DSW, any DSW Affiliate or any director, officer or employee to make any payment required to be made under this Agreement.

6.02. Inaccurate or Incomplete Information. RVI and each member of the RVI Group shall jointly and severally indemnify DSW, each DSW Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any cost, fine, penalty, or other expense of any kind attributable to the failure of RVI or any RVI Affiliate in supplying DSW or any DSW Affiliate with inaccurate or incomplete information, in connection with the preparation of any Tax Return. DSW and each member of the DSW Group shall jointly and severally indemnify RVI, each RVI Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any cost, fine, penalty, or other expenses of any kind attributable to the failure of DSW or any DSW Affiliate in supplying RVI or any RVI Affiliate with inaccurate or incomplete information, in connection with the preparation of any Tax Return.

6.03. No Indemnification for Tax Items. Nothing in this Agreement shall be construed as a guarantee of the existence or amount of any loss, credit, carryforward, basis or other Tax Item, whether past, present or future, of RVI, any RVI Affiliate, DSW or any DSW Affiliate. In addition, for the avoidance of doubt, for purposes of determining any amount owed between the parties hereto, all such determinations shall be made without regard to any financial accounting tax asset or liability or other financial accounting items.

SECTION 7. PAYMENTS.

7.01. Estimated Tax Payments. Not later than ten (10) business days prior to each Estimated Tax Installment Date with respect to a taxable period for which a Consolidated Return or a Combined Return will be filed, DSW shall pay to RVI on behalf of the DSW Group an amount equal to the amount of any estimated DSW Separate Tax Liability that DSW otherwise would have been required to pay to a Taxing Authority on such Estimated Tax Installment Date.

7.02. True-Up Payments. Not later than ten (10) business days after completion of a Tax Return, DSW shall pay to RVI, or RVI shall pay to DSW, as appropriate, an amount equal to the difference, if any, between the DSW Separate Tax Liability and the aggregate amount paid by DSW with respect to such period under Section 7.01 of this Agreement.

7.03. Redetermination Amounts. In the event of a redetermination of any Tax Item reflected on any Consolidated Return or Combined Return (other than Tax Items relating to Distribution Taxes), as a result of a refund of Taxes paid, a Final Determination or any settlement or compromise with any Taxing Authority which in any such case would affect the DSW Separate Tax Liability, RVI shall prepare a revised pro forma Tax Return in accordance with Section 2.04(b) of this Agreement for the relevant taxable period reflecting the redetermination of such Tax Item as a result of such refund, Final Determination, settlement or compromise. DSW shall pay to RVI, or RVI shall pay to DSW, as appropriate, an amount equal to the difference, if any, between the DSW Separate Tax liability reflected on such revised pro forma Tax Return and the DSW Separate Tax liability for such period as originally computed pursuant to this Agreement.

7.04. Payments of Refunds and Credits. If one party receives a refund or credit of any Tax to which the other party is entitled pursuant to Section 3.03 of this Agreement, the party receiving such refund or credit shall pay to the other party the amount of such refund or credit pursuant to Section 7.05 of this Agreement.

7.05. Payments Under This Agreement. In the event that one party (the "Owing Party") is required to make a payment to another party (the "Owed Party") pursuant to this Agreement, then such payments shall be made according to this
Section 7.05.

(a) In General. All payments shall be made to the Owed Party or to the appropriate Taxing Authority as specified by the Owed Party within the time prescribed for payment in this Agreement, or if no period is prescribed, within ten (10) days after delivery of written notice of payment owing together with a computation of the amounts due.

(b) Treatment of Payments. Unless otherwise required by any Final Determination, the parties agree that any payments made by one party to another party pursuant to this Agreement (other than (i) payments for Tax Services pursuant to Section 2.05 of this Agreement, (ii) payments for the DSW Separate Tax Liability for any Post-IPO Period, (iii) payments of interest pursuant to
Section 7.05(e) of this Agreement, and (iv) payments of After Tax Amounts pursuant to Section 7.05(d) of this Agreement) shall be treated for all Tax and financial accounting purposes as nontaxable payments (dividend distributions or capital contributions, as the case may be) made immediately prior to the IPO and, accordingly, as not includible in the taxable income of the recipient or as deductible by the payor.

(c) Prompt Performance. All actions required to be taken (including payments) by any party under this Agreement shall be performed within the time prescribed for performance in this Agreement, or if no period is prescribed, such actions shall be performed promptly.

(d) After Tax Amounts. If pursuant to a Final Determination it is determined that the receipt or accrual of any payment made under this Agreement (other than (i) payments for Tax & Accounting Services pursuant to Section 2.05 of this Agreement, and (ii) payments of interest pursuant to Section 7.05(e) of this Agreement) is subject to any Tax, the party making such payment shall be liable for (a) the After Tax Amount with respect to such payment and (b) interest at the rate described in Section 7.05(e) of this Agreement on the amount of such Tax from the date such Tax accrues through the date of payment of such After Tax Amount. A party making a demand for a payment pursuant to this Agreement and for a payment of an After Tax Amount with respect to such payment shall separately specify and compute such After Tax Amount. However, a party may choose not to specify an After Tax Amount in a demand for payment pursuant to this Agreement without thereby being deemed to have waived its right subsequently to demand an After Tax Amount with respect to such payment. The amount that DSW shall be liable for any and all payments for the DSW Separate Tax Liability for any Post-IPO Period shall be increased by the After Tax Amount with respect to such payment and decreased by the corresponding Tax Benefit, if any, to RVI attributable to such DSW Separate Tax Liability.

(e) Interest. Payments pursuant to this Agreement that are not made within the period prescribed in this Agreement (the "Payment Period") shall bear interest for the period from and including the date immediately following the last date of the Payment Period through and including the date of payment at a per annum rate equal to the prime rate as published in The Wall Street Journal on the last day of such Payment Period, plus five percent (5%). Such interest will be payable at the same time as the payment to which it relates and shall be calculated on the basis of a year of three hundred sixty-five (365) days and the actual number of days for which due.

SECTION 8. TAX PROCEEDINGS.

8.01. In General. Except as otherwise provided in this Agreement, (i) with respect to Tax Returns described in Sections 2.01(a), 2.01(b), or 2.01(d) of this Agreement, RVI and (ii) with respect to Tax Returns described in Sections 2.01(c) or 2.02 of this Agreement, DSW (in either case, the "Controlling Party"), shall have the exclusive right, in its sole discretion, to control, contest, and represent the interests of RVI, any RVI Affiliate, DSW, and/or any DSW Affiliate in any Audit relating to such Tax Return and to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Audit. The Controlling Party's rights shall extend to any matter pertaining to the management and control of an Audit, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item. Any costs incurred in handling, settling, or contesting an Audit shall be borne by the Controlling Party.

8.02. Participation of non-Controlling Party. Except as otherwise provided in Section 8.04 of this Agreement, the non-Controlling Party shall, at its own expense, have control over decisions to resolve, settle or otherwise agree to any deficiency, claim or adjustment with respect to any Sole Responsibility Item. Except as otherwise provided in Section 8.04 of this Agreement, the Controlling Party, at its own expense, and the non-Controlling Party, at its own expense, shall have joint control over decisions to resolve, settle or otherwise agree to any deficiency, claim or adjustment with respect to any Joint Responsibility Item. Except as otherwise provided in Section 8.04 of this Agreement, the Controlling Party shall not settle any Audit it controls concerning a Tax Item on a basis that would reasonably be expected to adversely affect the non-Controlling Party by at least one hundred and fifty thousand dollars ($150,000) without obtaining such non-Controlling Party's consent, which consent shall not be unreasonably withheld, conditioned or delayed if failure to consent would adversely affect the Controlling Party.

8.03. Notice. Within ten (10) days after a party becomes aware of the existence of a Tax issue that may give rise to an indemnification obligation under this Agreement, such party shall give notice to the other party of such issue (such notice shall contain factual information, to the extent known, describing any asserted tax liability in reasonable detail), and shall forward to the other party copies of all notices and material communications with any Taxing Authority relating to such issue. Notwithstanding any provision in
Section 10.15 of this Agreement to the contrary, if a party to this Agreement fails to provide the other party notice as required by this Section 8.03, and the failure results in a detriment to the other party then any amount which the other party is otherwise required to pay pursuant to this Agreement shall be reduced by the amount of such detriment.

8.04. Control of Distribution Tax Proceedings. In the event of a Distribution, RVI shall have the exclusive right, in its sole discretion, to control, contest, and represent the interests of RVI, any RVI Affiliate, DSW, and/or any DSW Affiliate in any Audits relating to Distribution Taxes and to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Audit; provided, however, that RVI shall not settle any such audit with respect to Distribution Taxes with a Taxing Authority in exchange for a settlement on an issue or issues unrelated to such Distribution Taxes that would reasonably be expected to result in a material Tax cost to DSW or any DSW Affiliate (including as a result of an indemnification obligation pursuant to this Agreement), without the prior consent of DSW, which consent shall not be unreasonably withheld, conditioned or delayed. RVI's rights shall extend to any matter pertaining to the management and control of such Audit, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item; provided, however, that to the extent that DSW is obligated to bear at least fifty percent (50%) of the liability for any Distribution Taxes under
Section 4.01 of this Agreement, RVI and DSW shall have joint control over decisions to resolve, settle or otherwise agree to any deficiency, claim or adjustment. DSW may assume sole control of any Audits relating to Distribution Taxes if it acknowledges in writing that it has sole liability for any Distribution Taxes under Section 4.01(b) of this Agreement that might arise in such Audit and can demonstrate to the reasonable satisfaction of RVI that it can satisfy its liability for any such Distribution Taxes. If DSW is unable to demonstrate to the reasonable satisfaction of RVI that it will be able to satisfy

its liability for such Distribution Taxes, but acknowledges in writing that it has sole liability for any Distribution Taxes under Section 4.01(b) of this Agreement, DSW and RVI shall have joint control over the Audit.

SECTION 9. STOCK OPTIONS AND RESTRICTED STOCK.

9.01. In General. The parties hereto agree that RVI shall be entitled to any Tax Benefit arising by reason of exercises of Options to purchase shares of RVI stock, and that DSW shall be entitled to any Tax Benefit arising by reason of exercises of Options to purchase shares of DSW stock. In addition, RVI shall be entitled to any Tax Benefit arising by reason of the lapse of any restrictions with respect to shares of RVI stock subject to a substantial risk of forfeiture (within the meaning of section 83 of the Code), and DSW shall be entitled to any Tax Benefit arising by reason of the lapse of any restrictions with respect to shares of DSW stock subject to a substantial risk of forfeiture (within the meaning of section 83 of the Code). The parties hereto agree to report all Tax deductions with respect to Options and other equity issued to their employees consistently with this Section 9.01, to the extent permitted by the Tax law.

9.02. Notices, Withholding, Reporting. RVI shall promptly notify DSW of any post-IPO Date event giving rise to income to any DSW Group employees or former employees in connection with exercises of Options to purchase shares of RVI stock or the lapse of any restrictions with respect to shares of RVI stock subject to a substantial risk of forfeiture (within the meaning of section 83 of the Code). If required by the Tax law, DSW shall withhold applicable Taxes and satisfy applicable Tax reporting obligations in connection therewith.

9.03. Adjustments. If DSW or any DSW Affiliate as a result of a Final Determination or any settlement or compromise with any Taxing Authority receives any Tax Benefit to which RVI is entitled under Section 9.01 of this Agreement, DSW shall pay the amount of such Tax Benefit to RVI. If RVI or any RVI Affiliate as a result of a Final Determination or any settlement or compromise with any Taxing Authority receives any Tax Benefit to which DSW is entitled under Section 9.01 of this Agreement, RVI shall pay the amount of such Tax Benefit to DSW.

SECTION 10. MISCELLANEOUS PROVISIONS.

10.01. Effectiveness. This Agreement shall become effective upon execution by the parties hereto.

10.02. Cooperation and Exchange of Information.

(a) Cooperation. DSW and RVI shall each cooperate fully (and each shall cause its respective affiliates to cooperate fully) with all reasonable requests from another party for information and materials not otherwise available to the requesting party in connection with the preparation and filing of Tax Returns, claims for refund, and Audits concerning issues or other matters covered by this Agreement or in connection with the determination of a liability for Taxes or a right to a refund of Taxes. Such cooperation shall include:

(i) the retention until the expiration of the applicable statute of limitations, and the provision upon reasonable request, of copies of all Tax Returns, books, records (including information regarding ownership and Tax basis of property), documentation and other information relating to the Tax Returns, including accompanying schedules, related work papers, and documents relating to rulings or other determinations by Taxing Authorities;

(ii) the execution of any document that may be necessary or reasonably helpful in connection with any Tax Proceeding, or the filing of a Tax Return or refund claim by a member of the RVI Group or the DSW Group, including certification, to the best of a party's knowledge, of the accuracy and completeness of the information it has supplied; and

(iii) the use of the party's reasonable best efforts to obtain any documentation that may be necessary or reasonably helpful in connection with any of the foregoing. Each party shall make its employees and facilities available on a reasonable and mutually convenient basis in connection with the foregoing matters.

(b) Retention of Records. Any party that is in possession of documentation of RVI (or any RVI Affiliate) or DSW (or any DSW Affiliate) relating to the DSW Business, including books, records, Tax Returns and all supporting schedules and information relating thereto (the "DSW Business Records") shall retain such DSW Business Records for a period of seven (7) years following the IPO Date. Thereafter, any party wishing to dispose of DSW Business Records in its possession (after the expiration of the applicable statute of limitations), shall provide written notice to the other party describing the documentation proposed to be destroyed or disposed of sixty (60) business days prior to taking such action. The other party may arrange to take delivery of any or all of the documentation described in the notice at its expense during the succeeding sixty (60) day period.

10.03. Dispute Resolution. In the event that RVI and DSW disagree as to the amount or calculation of any payment to be made under this Agreement, or the interpretation or application of any provision under this Agreement, the parties shall attempt in good faith to resolve such dispute. If such dispute is not resolved within sixty (60) business days following the commencement of the dispute, RVI and DSW shall jointly retain an Independent Firm, to resolve the dispute. The Independent Firm shall act as an arbitrator to resolve all points of disagreement and its decision shall be final and binding upon all parties involved. Following the decision of the Independent Firm, RVI and DSW shall each take or cause to be taken any action necessary to implement the decision of the Independent Firm. The fees and expenses relating to the Independent Firm shall be borne equally by RVI and DSW, except that if the Independent Firm determines that the position advanced by either party is frivolous, has not been asserted in good faith or for which there is not substantial authority, one hundred percent (100%) of the fees and expenses of the Independent Firm shall be borne by such party. Notwithstanding anything in this Agreement to the contrary, the dispute resolution provisions set forth in this Section 10.03 shall not be applicable to any disagreement between the parties relating to Distribution Taxes and any such dispute shall be settled in a court of law or as otherwise agreed to by the parties.

10.04. Notices. All notices and other communications required or permitted to be given hereunder shall be in writing and shall be deemed given upon (a) a transmitter's confirmation of a receipt of a facsimile transmission (but only if followed by confirmed delivery of a standard overnight courier the following business day or if delivered by hand the following business day), (b) confirmed delivery of a standard overnight courier or when delivered by hand or (c) the expiration of five (5) business days after the date mailed by certified or registered mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):

If to RVI or any RVI Affiliate, to the Vice President of Corporate Tax of RVI, with a copy to the General Counsel of RVI and the Controller of RVI, at:

Retail Ventures, Inc.
3241 Westerville Road
Columbus, OH 43224

If to DSW or any DSW Affiliate, to the Chief Financial Officer of DSW, with a copy to the General Counsel of DSW and the Controller of DSW, at:

DSW, Inc.
4150 East 5th Avenue
Columbus, OH 43219

Either party may, by written notice to the other parties, change the address or the party to which any notice, request, instruction or other documents is to be delivered.

10.05. Changes in Law.

(a) Any reference to a provision of the Code or a law of another jurisdiction shall include a reference to any applicable successor provision or law.

(b) If, due to any change in applicable law or regulations or their interpretation by any court of law or other governing body having jurisdiction subsequent to the date of this Agreement, performance of any provision of this Agreement or any transaction contemplated thereby shall become impracticable or impossible, the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision.

10.06. Confidentiality. Each party shall hold and cause its directors, officers, employees, advisors and consultants to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all information (other than any such information relating solely to the business or affairs of such party) concerning the other parties hereto furnished it by such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) in the public domain through no fault of such party or (2) later lawfully acquired from other sources not under a duty of confidentiality by the party to which it was furnished), and each

party shall not release or disclose such information to any other person, except its directors, officers, employees, auditors, attorneys, financial advisors, bankers and other consultants who shall be advised of and agree to be bound by the provisions of this Section 10.06. Each party shall be deemed to have satisfied its obligation to hold confidential information concerning or supplied by the other party if it exercises the same care as it takes to preserve confidentiality for its own similar information.

10.07. Successors. This Agreement shall be binding on and inure to the benefit and detriment of any successor, by merger, acquisition of assets or otherwise, to any of the parties hereto, to the same extent as if such successor had been an original party.

10.08. Affiliates. RVI shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any RVI Affiliate, and DSW shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any DSW Affiliate; provided, however, that
(1) if it is contemplated that a DSW Affiliate may cease to be a DSW Affiliate as a result of a transfer of its stock or other ownership interests to a third party then (a) DSW shall request in writing no later than thirty (30) days prior to such cessation that RVI consent (such consent not to be unreasonably withheld, conditioned or delayed) to the execution of a release of such DSW Affiliate from its obligations under this Agreement effective as of such transfer provided that DSW shall have confirmed in writing its obligations and the obligations of its remaining DSW Affiliates with respect to their own obligations and those of the departing DSW Affiliate and that such departing DSW Affiliate shall have executed a release of any rights it may have against RVI or any RVI Affiliate by reason of this Agreement, or (b) DSW shall acknowledge in writing no later than thirty (30) days prior to such cessation that it shall bear one hundred percent (100%) of the liability for the obligations of DSW and each DSW Affiliate (including the departing DSW Affiliate) under this Agreement, and (2) if it is contemplated that an RVI Affiliate may cease to be an RVI Affiliate as a result of a transfer of its stock or other ownership interests to a third party then (a) RVI shall request in writing no later than thirty (30) days prior to such cessation that DSW consent (such consent not to be unreasonably withheld, conditioned or delayed) to the execution of a release of such RVI Affiliate from its obligations under this Agreement effective as of such transfer provided that RVI shall have confirmed in writing its obligations and the obligations of its remaining RVI Affiliates with respect to their own obligations and the obligations of the departing RVI Affiliate and that such departing RVI Affiliate shall have executed a release of any rights it may have against DSW or any DSW Affiliate by reason of this Agreement, or (b) RVI shall acknowledge in writing no later than thirty (30) days prior to such cessation that it shall bear one hundred percent (100%) of the liability for the obligations of RVI and each RVI Affiliate (including the departing RVI Affiliate) under this Agreement. If at any time (1) RVI shall, directly or indirectly, obtain beneficial ownership of more than fifty percent (50%) of the total combined voting power of any other entity, RVI shall cause such entity to become a party to this Agreement by executing together with DSW an agreement in substantially the same form as set forth in Schedule 10.08 and such entity shall have all rights and obligations of an RVI Affiliate under this Agreement, and
(2) DSW shall, directly or indirectly, obtain beneficial ownership of more than fifty percent (50%) of the total combined voting power of any other entity, DSW shall cause such entity to become a party to this Agreement by executing together with RVI an agreement in substantially the same

form as set forth in Schedule 10.08 and such entity shall have all rights and obligations of an DSW Affiliate under this Agreement.

10.09. Authorization, Etc. Each of the parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such party, that this Agreement constitutes a legal, valid and binding obligation of each such party and that the execution, delivery and performance of this Agreement by such party does not contravene or conflict with any provision of law or of its charter or bylaws or any agreement, instrument or order binding on such party.

10.10. Entire Agreement. This Agreement contains the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes any prior tax sharing agreements between RVI (or any RVI Affiliate) and DSW (or any DSW Affiliate) and such prior tax sharing agreements shall have no further force and effect. If, and to the extent, the provisions of this Agreement conflict with any agreement entered into in connection with the Distribution, the provisions of this Agreement shall control.

10.11. Applicable Law; Jurisdiction. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY (i) AGREES THAT THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND ALL DISPUTES, CONTROVERSIES OR CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH, TERMINATION OR VALIDITY HEREOF SHALL BE GOVERNED BY THE LAWS OF THE STATE OF OHIO, EXCLUDING ITS CONFLICTS OF LAW RULES, (ii) AGREES TO BE SUBJECT TO, AND HEREBY CONSENTS AND SUBMITS TO, THE JURISDICTION OF THE COURTS OF THE STATE OF OHIO AND OF THE FEDERAL COURTS SITTING IN THE STATE OF OHIO, (iii) TO THE EXTENT SUCH PARTY IS NOT OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF OHIO, HEREBY APPOINTS THE CORPORATION TRUST COMPANY, AS SUCH PARTY'S AGENT IN THE STATE OF OHIO FOR ACCEPTANCE OF LEGAL PROCESS AND (iv) AGREES THAT SERVICE MADE ON ANY SUCH AGENT SET FORTH IN (iii) ABOVE SHALL HAVE THE SAME LEGAL FORCE AND EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE STATE OF OHIO.

10.12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.

10.13. Severability. If any term, provision, covenant, or restriction of this Agreement is held by a court of competent jurisdiction (or an arbitrator or arbitration panel) to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions set forth herein shall remain in full force and effect, and shall in no way be affected, impaired, or invalidated. In the event that any such term, provision, covenant or restriction is held to be invalid, void or unenforceable, the parties hereto shall use their best efforts to find and employ an alternate means to achieve the same or substantially the same result as that contemplated by such terms, provisions, covenant, or restriction.

10.14. No Third Party Beneficiaries. This Agreement is solely for the benefit of RVI, the RVI Affiliates, DSW and the DSW Affiliates. This Agreement should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other rights in excess of those existing without this Agreement.

10.15. Waivers, Etc. No failure or delay on the part of a party in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power. No modification or waiver of any provision of this Agreement nor consent to any departure by the parties therefrom shall in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

10.16. Setoff. All payments to be made by any party under this Agreement may be netted against payments due to such party under this Agreement, but otherwise shall be made without setoff, counterclaim or withholding, all of which are hereby expressly waived.

10.17. Other Remedies. DSW recognizes that any failure by it or any DSW Affiliate to comply with its obligations under Section 4 of this Agreement would, in the event of a Distribution, result in Distribution Taxes that would cause irreparable harm to RVI, RVI Affiliates, and their stockholders. Accordingly, RVI shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which RVI is entitled at law or in equity.

10.18. Amendment and Modification. This Agreement may be amended, modified or supplemented only by a written agreement signed by all of the parties hereto.

10.19. Waiver of Jury Trial. Each of the parties hereto irrevocably and unconditionally waives all right to trial by jury in any litigation, claim, action, suit, arbitration, inquiry, proceeding, investigation or counterclaim (whether based in contract, tort or otherwise) arising out of or relating to this Agreement or the actions of the parties hereto in the negotiation, administration, performance and enforcement thereof.

10.20. Interpretations. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement they shall be deemed to be followed by the words "without limitation." The words "hereof," "herein" and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless otherwise specified. The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term, and words denoting any gender shall include all genders. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning. The

parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by a duly authorized officer as of the date first above written.

RETAIL VENTURES, INC.
on behalf of itself and each of the RVI Affiliates

By: /s/ James A. McGrady
    ----------------------------------------------
Name: James A. McGrady
Title: Executive Vice President, Chief Financial
       Officer, Treasurer and Secretary

DSW INC.
on behalf of itself and each of the DSW Affiliates

By: /s/ Douglas J. Probst
    ----------------------------------------------
Name: Douglas J. Probst
Title: Senior Vice President, Chief Financial
       Officer and Treasurer

SCHEDULE 10.08

WHEREAS, [RVI/DSW], an Ohio corporation ("[RVI/DSW]"), owns, directly or indirectly, [all/more than 50%] of the outstanding stock or interests in the undersigned;

WHEREAS, the undersigned is not a party to that certain Tax Separation Agreement, dated as of [DATE], by and among RVI, each RVI Affiliate, DSW and each DSW Affiliate (as defined therein) (the "Agreement"); and

WHEREAS, the undersigned, RVI and DSW desire to have the undersigned become a party to the Agreement and to have all rights and obligations of a party to the Agreement.

NOW, THEREFORE, in consideration of mutual obligations and undertakings contained in the Agreement, the parties agree that the undersigned shall become a party to the Agreement and shall have all rights and obligations of a party to the Agreement.

IN WITNESS WHEREOF, the parties have executed this agreement on the dates accompanying their respective signatures, but effective as of ___.

RETAIL VENTURES, INC.

By: ________________________________
Title: ________________________________
Dated: ________________________________

DSW
INC.

By: ________________________________
Title: ________________________________
Dated: ________________________________

[NAME]

By: ________________________________
Title: ________________________________
Dated: ________________________________

Exhibit 10.4

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT, dated as of July 5, 2005 (this "Agreement"), is made and entered into by and between Retail Ventures, Inc., an Ohio corporation (the "Company"), and DSW Inc., an Ohio corporation ("DSW"). Capitalized terms used herein and not defined shall have the respective meanings ascribed to such terms in the Master Separation Agreement between the Company and DSW, dated as of July 5, 2005 (the " Separation Agreement").

RECITALS

WHEREAS, the Company is the beneficial owner of all the issued and outstanding common shares of DSW;

WHEREAS, the Company and DSW currently contemplate that DSW will make an initial public offering ("IPO") of an amount of its Class A common shares, no par value per share, pursuant to a registration statement on Form S-1 pursuant to the Securities Act of 1933, as amended (the "IPO Registration Statement");

WHEREAS, the Company and DSW currently contemplate that DSW will amend its articles of incorporation prior to the IPO so that the 410.09 outstanding common shares of DSW will be changed into 27,702,667 Class B common shares of DSW;

WHEREAS, the Company and DSW will derive mutual benefit from the IPO;

WHEREAS, in order to consummate the IPO, the Company will need to obtain the consent of Cerberus Partners, L.P. ("Cerberus");

WHEREAS, in exchange for Cerberus' consent to the IPO, Cerberus requires that certain warrants held by it, Schottenstein Stores Corporation ("SSC") and Back Bay Capital Funding LLC ("Back Bay" and, together with Cerberus and SSC, the "Lenders") be amended to provide the Lenders the right from time to time, either to (i) acquire common shares of the Company or (ii) acquire from the Company Class A common shares of DSW at the price of shares to the public in the IPO (the "Amended Warrants");

WHEREAS, in exchange for Cerberus' consent to the IPO, Cerberus requires that new warrants be issued by the Company to SSC and Cerberus under which SSC and Cerberus have, from time to time, the right either to (i) acquire common shares of the Company or (ii) acquire from the Company Class A common shares of DSW at a strike price equal to the price of the shares offered and sold to the public in the IPO (the "New Warrants");

WHEREAS, in order to enable the Company to fulfill its obligations under the terms of the Amended Warrants and the New Warrants and for other purposes of the Company unrelated to the exercise of the Amended Warrants and the New Warrants, DSW shall be required to deliver Class A common shares to the Company upon receipt

of an Exchange Request (as hereinafter defined) made by the Company on the terms and conditions set forth herein; and

WHEREAS, the Company and DSW intend in this Agreement to set forth the principal arrangements between them regarding the mechanism by which, after the IPO, the Company can exchange with DSW all, or a portion of, the Class B common shares of DSW held by the Company for Class A common shares of DSW;

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, the Company and DSW mutually covenant and agree as follows:

I. Issuance of Common Stock upon Exchange. In the event that the Company makes a request to DSW (such request, an "Exchange Request"), to exchange all, or a portion of its Class B common shares of DSW for Class A common shares of DSW, DSW covenants and agrees to issue, at the time of such exchange, a number of Class A common shares sufficient to satisfy the terms of the exchange as set forth in this Agreement. Such request shall be in writing and state the number of Class B common shares to be exchanged.

II. Exchange. The Company may exchange with DSW the Company's Class B common shares of DSW, in whole or in part, at the option of the Company, at any time, for an equal number of duly authorized, validly issued, fully paid and nonassessable Class A common shares of DSW. The Company shall not be limited in the number of Exchange Requests it is entitled to make.

III. Procedure for Exchange. In order to exercise the exchange right provided in Section II of this Agreement, the Company shall surrender the certificate or certificates representing the shares of Class B common shares to be exchanged, duly endorsed in blank, to the Secretary of DSW, accompanied by written notice addressed to DSW specifying the number (in whole shares) of such Class B common shares evidenced by such certificate or certificates to be exchanged and the name or names in which the Company wishes the certificate or certificates for the Class A common shares to be issued. Each exercise of this exchange right shall be deemed to have been effected immediately prior to the close of business on the business day on which such notice and the certificates representing the shares of Class B common shares to be exchanged shall have been surrendered to the Secretary of DSW and, to the extent permitted by law, at such time the person or persons in whose name or names any certificate or certificates for the Class A common shares are to be issued shall be deemed to have become the holder or holders of record thereof for all purposes. As promptly as practicable after the surrender of such Class B common shares as aforesaid, but in any event not later than the second business day after such surrender, DSW shall deliver or cause to be delivered to the Company or to such person as may be designated by the Company, a certificate or certificates for the number of whole Class A common shares issuable upon the exchange of such shares of Class B common shares in accordance with the provisions hereof and any cash payment

in lieu of any fractional shares of Class A common shares, as provided in
Section IV. DSW shall issue certificates for the balance of any remaining Class B common shares in any case in which fewer than all of the Class B common shares represented by a certificate are exchanged.

IV. Fractional Shares. No fractional Class A common shares or securities representing fractional Class A common shares shall be issued upon exchange of Class B common shares. Instead of any fractional Class A common shares which would otherwise be deliverable upon the exchange of a share of Class B common shares, DSW shall pay to the person or persons to whom any such share would otherwise be delivered a cash adjustment in respect of such fractional interest in an amount (computed to the nearest cent) equal to the value of such fractional Class A common shares based upon the current market price.

V. Accredited Investor. At any time Class A common shares of DSW are issued pursuant to an Exchange Request, the Company or such person as may be designated by the Company to receive such Class A common shares shall be an "accredited investor" as such term is defined in Regulation D promulgated under the Securities Exchange Act of 1933, as amended (the "Act") and all of the terms and conditions of Rule 502 promulgated under the Act shall be satisfied.

VI. Certificates to be Legended. The Company understands and agrees that each certificate representing Class A common shares issued pursuant to this Agreement will bear a legend on the face thereof (or on the reverse thereof with a reference to such legend on the face thereof) in substantially the form set forth below:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE ENCUMBERED, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO DSW AND CONCURRED IN BY DSW'S COUNSEL TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR SUCH TRANS-ACTION COMPLIES WITH RULES PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER SAID ACT.

VII. Authorization and Reservation of Class A common shares. DSW has taken all action to authorize the issuance and reserve for issuance the number of Class A common shares of DSW sufficient to cover the Class A common shares that may be is-

sued upon the exchange of the Class B common shares of DSW, with all such Class A Common Shares issued upon conversion of such Class B common shares to be fully paid and non-assessable Class A common shares of DSW.

VIII. Notices. Notices, offers, requests or other communications required or permitted to be given by either party pursuant to the terms of this Agreement shall be given in writing to the respective Parties to the following addresses:

if to Retail Ventures:

Retail Ventures, Inc.
3241 Westerville Road
Columbus, OH 43223
Attention: James A. McGrady, Chief Financial Officer Fax: (614) 473-2721

with a copy to:

Julia A. Davis, General Counsel
3241 Westerville Road
Columbus, OH 43223
Fax: (614) 337-4682

if to DSW:

DSW Inc.
4150 East 5th Avenue
Columbus, OH 43219
Attention: Peter Z. Horvath, Chief Operating Officer Fax: (614) 238-4207

with a copy to:

Julia A. Davis, General Counsel
3241 Westerville Road
Columbus, OH 43223
Fax: (614) 337-4682

or to such other address or facsimile number as the party to whom notice is given may have previously furnished to the other in writing as provided herein. Any notice involving non-performance, termination, or renewal shall be sent by hand delivery, recognized overnight courier or, within the United States, may also be sent via certified mail, return

receipt requested. All other notices may also be sent by facsimile, confirmed by first class mail. All notices shall be deemed to have been given when received, if hand delivered; when transmitted, if transmitted by facsimile or similar electronic transmission method; one working day after it is sent, if sent by recognized overnight courier; and three days after it is postmarked, if mailed first class mail or certified mail, return receipt requested, with postage prepaid.

IX. Amendments. This Agreement may only be amended by a written agreement executed by both the Company and DSW.

X. Further Assurances. Each of the parties hereto shall use its reasonable best efforts to do all things necessary or advisable to make effective the transactions contemplated hereby and shall cooperate and take such action as may be reasonably requested by the other party in order to carry out fully the provisions and purposes of this Agreement and the transactions contemplated hereby.

XI. Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

XII. Entire Agreement. This Agreement and any other writing signed by the Company and DSW that specifically references or is specifically related to this Agreement constitute the entire agreement between the Company and DSW with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the Company and DSW with respect to the subject matter hereof. This Agreement is not intended to confer upon any person other than the Company and DSW as or remedies hereunder.

XIII. Governing Law. This Agreement shall be construed in accordance with and governed by the substantive internal laws of the State of Ohio applicable to contracts to be wholly performed in the State of Ohio.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first written above.

Retail Ventures, Inc., an Ohio corporation

By: /s/ James A. McGrady
    --------------------------------
Name: James A. McGrady
Title: Executive Vice President,
       Chief Financial Officer,
       Treasurer and Secretary

DSW Inc., an Ohio corporation

By: /s/ Douglas J. Probst
    --------------------------------
Name: Douglas J. Probst
Title: Senior Vice President, Chief
       Financial Officer and Treasurer

EXHIBIT 10.5

AMENDMENT TO CORPORATE SERVICES AGREEMENT

The Corporate Services Agreement dated the 11th day of June 2002 (the "Agreement") by and between Value City Department Stores, Inc. and its wholly owned subsidiaries ("VCDS") and Schottenstein Stores Corporation ("SSC") is amended as follows:

1. Name Change. Except as otherwise specifically noted, the reference to Value City Department Stores, Inc. and its wholly owned subsidiaries, throughout the Agreement, is changed to Retail Ventures, Inc. and its subsidiaries ("RVI")

2. Section 3. Legal Advice and Legal Services. Effective January 31, 2004, SSC ceased billing RVI for services provided by SSC's in-house legal staff to RVI. On a going forward basis, the parties may mutually agree to engage the in-house legal staff of SSC for consultation and advice for the performance of legal services at rates agreed upon by the parties.

3. Section 5. Insurance and Risk Management. Effective June 29, 2003, RVI took over all risk management and the insurance administration for RVI, including, but not limited to, property and safety management. SSC continued to administer prior general liability claims and workers' compensation claims under policies for which SSC was the Guarantor until the administration of these prior claims were transferred to RVI by July, 2004.

4. Section 6. Store Planning, Design and Construction. Effective ___, 200_, SSC Store Planning, Design and Construction ceased performing services to RVI

5. Section 7. Import Agency Services. Effective the 3rd day of August, 2003, SSC ceased providing import services to RVI.

6. Section 9. Travel. Effective January 31, 2004, SSC ceased operating a travel department for its subsidiaries, including RVI.

7. Section 11. Offset. Effective as of June 11, 2002, this Section is restated to read as follows:

SSC shall have the right to offset any amounts owed to SSC by RVI against any payments owed to RVI by SSC.

8. Section 15. Indemnity. Effective as of June 11, 2002, this Section is restated to read as follows:

Except for SSC's or Schottenstein Management Company's (SMC's) gross negligence, willful misconduct or fraud in the performance of its duties, SSC or SMC shall not be liable for any losses or damages, including special, incidental or consequential damages incurred by RVI from any claim or dispute arising out of or related to or in connection with any services performed by SSC or SMC under this Agreement. RVI agrees to hold SSC and SMC harmless from such claim or dispute and to indemnify and defend SSC and SMC for all losses and damages including reasonable costs, expenses, charges and legal fees, if any, which SSC or SMC may incur as a result of any such dispute or claim.

Except for RVI's gross negligence, willful misconduct or breach of its obligations in the performance of its duties, RVI shall not be liable for any losses or damages, including special, incidental or consequential damages incurred by SSC or SMC from any claim or dispute arising out of or related to or in connection with any services performed by RVI under this Agreement. SSC and SMC agree to hold RVI harmless for such claim or dispute and to indemnify and defend RVI for all losses and damages including reasonable costs, expenses, charges and legal fees, if any, which RVI may incur as a result of any such dispute or claim.

9. Additional Services. Effective July 5, 2005, the parties agree that, should additional services be desired, they will negotiate in good faith with each other the nature of those services and the payment to be made therefore, provided that before any additional services may be provided to RVI by SSC, the terms thereof must be approved

in advance by the Audit Committee of the Board of Directors of RVI, or if applicable the Audit Committee of the Board of Directors of DSW Inc.

10. Continuance of Liability Under the Agreement. The parties are executing this amendment for the purpose of reflecting the changed responsibilities for the furnishing of the referenced services and not to change the responsibilities which may accrue or may have accrued under the Agreement regardless of the effective date of this amendment.

11. Effective Date. This amendment to the Agreement shall be effective the fifth day of July, 2005. All terms of the Agreement shall remain in full force and effect, except as amended, modified or restated by this amendment.

IN WITNESS WHEREOF, the parties have caused this amendment to the Agreement to be signed by their respective officers, thereunto duly authorized, as of the date first above written.

SCHOTTENSTEIN STORES CORPORATION

By: /s/ Jeffry D. Swanson
    ------------------------------------

RETAIL VENTURES, INC.

By: /s/ James A. McGrady
    ------------------------------------

SCHOTTENSTEIN MANAGEMENT COMPANY

By: /s/ Irwin A. Bain
    ------------------------------------

Schottenstein Stores Corporation
1800 Moler Road
Columbus, Ohio 43207

Ladies and Gentlemen:

Reference is hereby made to that certain Shared Services Agreement effective as of January 31, 2005 (the "Shared Services Agreement"), by and between Retail Ventures, Inc., an Ohio corporation, and DSW Inc., an Ohio corporation, and that certain Corporate Services Agreement dated June 11, 2002, by and between RVI and its subsidiaries ("RVI") and Schottenstein Stores Corporation, a Delaware corporation ("SSC"), as amended (the "Corporate Services Agreement"). We understand that, pursuant to the Corporate Services Agreement, SSC or Schottenstein Management Company ("SMC") may provide certain services for DSW and its subsidiaries (collectively, "DSW") (such services so provided being referred to herein as the "DSW Services").

To induce SSC and SMC to provide the DSW Services, DSW agrees that if RVI fails to pay SSC or SMC for any amounts due for the DSW Services when due and payable under the Corporate Services Agreement, including liabilities incurred on behalf of DSW through RVI's past participation in the SSC self-insurance program, DSW will pay to SSC or SMC all such due and unpaid amounts upon written demand for payment of the same by SSC or SMC to DSW at its address set forth in the signature block of this letter (or to such other address as DSW may specify in writing to SSC and SMC).

Notwithstanding the foregoing, DSW reserves to itself all defenses that RVI is or may be entitled to that arise out of the Corporate Services Agreement, with respect to the DSW Services only, except for any of such defenses that are based upon the insolvency, bankruptcy, or reorganization of RVI. By executing a copy of this letter agreement below, SSC, SMC, RVI and DSW agree that, with respect to the DSW Services only, (i) DSW shall be entitled to exercise against SSC and SMC all rights of RVI against SSC and SMC under the Corporate Services Agreement, including but not limited to all rights of indemnification and (ii) SSC and SMC shall be entitled to exercise against DSW all rights of SSC and SMC against RVI under the Corporate Services Agreement, including but not limited to all rights of indemnification and any defenses. To be clear, this reservation of indemnification rights relates only to DSW Services, and not to any services provided directly by RVI to DSW. This letter agreement shall be governed by and construed in accordance with the laws of the State of Ohio, applicable to agreements made and performed entirely in such state.

DSW INC.

                                           By: /s/ Peter Z. Horvath
                                               ----------------------------
                                              Name: Peter Z. Horvath
                                              Title: COO, EVP
                                              Address:  4150 East 5th Avenue
                                                        Columbus, OH 43219


ACKNOWLEDGED AND AGREED TO:               ACKNOWLEDGED AND AGREED TO:

SCHOTTENSTEIN STORES CORPORATION          RETAIL VENTURES, INC.

By: /s/ Jeffry D. Swanson                 By: /s/ James A. McGrady
    ---------------------------               ----------------------------
   Name:                                     Name: James A. McGrady
   Title:                                    Title: CFO

ACKNOWLEDGED AND AGREED TO:

SCHOTTENSTEIN MANAGEMENT COMPANY

By: /s/ Irwin A. Bain
    --------------------------
   Name: Irwin A. Bain
   Title: Senior Vice-President and Secretary

Exhibit 10.6

SUPPLY AGREEMENT

THIS SUPPLY AGREEMENT (this "Agreement") is made to be effective as of January 30, 2005 ("Effective Date"), by and between DSW Inc. (f.k.a. Shonac Corporation), an Ohio corporation with a business address at 4150 East Fifth Ave, Columbus, Ohio 43219 (the "Supplier"), and Filene's Basement Inc., a Delaware corporation with a business address at 12 Gill Street, Suite 1600, Woburn, MA 01801 ("Filene's").

BACKGROUND

The following facts constitute the background for this Agreement:

A. Filene's currently owns and operates certain retail stores ("Store(s)") and Supplier is a distributor of shoes and related merchandise.

B. Filene's desires to have Supplier supply Merchandise (as defined herein) for footwear departments in its Stores by obtaining Merchandise from Supplier who will select the Merchandise, be the sole owner of the same, and place Merchandise in such Stores with Filene's retaining a portion of the sales price of all Merchandise sold as provided herein.

C. Filene's and Supplier are parties to an Agreement dated April 1, 2000 ("the Original Agreement") relating to Supplier's supply of Merchandise to Filene's. Filene's and Supplier wish to amend and restate the Original Agreement as it related to Covered Stores (as defined herein). Contemporaneously herewith, Filene's and Supplier have also executed a Combo Store Supply Agreement (as defined herein) to amend and restate the Original Agreement as it related to Combo Stores (as defined herein).

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto, each intending to be legally bound hereby, agree as follows:

1. DEFINITIONS.

In addition to the other terms defined herein, capitalized terms shall have the meanings given to them as follows:

1.1. "Combo Store" means a Covered Store which has 10,000 square feet or more of sales floor space dedicated to the Shoe Department.

1.2. "Combo Store Supply Agreement" means the Supply Agreement (Combo Stores), dated the same date hereof, between Supplier and Filene's covering Combo Stores.

1.3. "Consignment Property" means, collectively, the following described property whether now consigned, owned or existing or in the future consigned, acquired or arising: (i) all Merchandise which has been, is now or in the future consigned or delivered, directly or indirectly, by Supplier to, or for the benefit of, Filene's; (ii) all replacements, additions, accessions, substitutions, returns, repossessions and exchanges of any and all Merchandise;
(iii) all records of the foregoing (whether the records are maintained in written or electronic form); and (iv) all products and proceeds of the foregoing described property (such proceeds being in whatever form, including, without limitation, additional Merchandise, accounts, inventory, instruments, documents, chattel paper, general intangibles, money, bank accounts

and deposits, cash and all insurance proceeds payable by reason of any loss or damage of any or all of the foregoing described property).

1.4. "Consignment Obligations" means, as of any date, the total unpaid Supplier Proceeds owed to Supplier for Merchandise which has been, is now, or in the future will be, delivered by Supplier to Filene's.

1.5. "Covered Stores" means all of the Stores operated by Filene's that include Shoe Departments and which Supplier has agreed to supply hereunder, each of which have less than 10,000 square feet of sales floor dedicated to the Shoe Department for each such Store, which number of Stores may change, increase or decrease to reflect additional or closed Store locations from time to time during the term of this Agreement.

1.6. "Covered Store Schedule" means that schedule attached as Exhibit A hereto of twenty-three (23) Stores in which Shoe Departments will be supplied under this Agreement. Exhibit A may be updated from time to time by written agreement of the parties. The Covered Store Schedule shall be amended from time to time to include any new Covered Stores which include a Shoe Department.

1.7. "Force Majeure" means an event which shall prevent Supplier from performing, or causes a delay in, the performance of, any obligation required hereunder by reason of strikes, lock-outs, labor troubles, inability to procure goods, failure of power, riots, insurrection, fires, floods, explosions, vandalism, acts of a governmental authority, failure of transportation not under the reasonable control of Supplier, acts of terrorism, whether foreign or domestic, war, armed conflict, or other reasons of a like nature which are beyond the control of Supplier.

1.8. "Gross Sales" means the gross proceeds from all sales of Merchandise, including (i) the entire sales price of all Merchandise sold, (ii) the amount of all credit sales, whether or not collected, (iii) the amount of all deposits not refunded to customers, and (iv) any sales, excise or similar tax chargeable with respect to sales of Merchandise and collected from customers.

1.9. "Merchandise" means shoes, sneakers, boots, sandals, specialty dance footwear, cleated shoes and other sports shoes, skates, shoe care products (e.g. polish, cleaners and water proofers), and laces.

1.10. "Net Sales" means the Gross Sales from the sale of Merchandise less the value of (i) voided sales, cash or credit refunds or adjustments made with respect to Merchandise sold and returned, (ii) all returns to manufacturers or shippers, or returns so damaged they must be written off, (iii) transfers, sales and exchanges among Shoe Departments to other locations as requested by Supplier, (iv) sales not in the ordinary course of business, (v) employee discounts actually allowed by Supplier, and (vi) sales tax or excise tax chargeable with respect to Merchandise sales and collected from customers.

1.11. "Shoe Department" means the area in the Covered Stores in which Filene's will offer for sale the Merchandise.

1.12. "SKU" means the stock keeping unit number assigned to each separate item of Merchandise supplied by Supplier.

1.13. "Supplier's Supervisor" means an individual or individuals employed by Supplier, at Supplier's cost to provide supervision and recommendations as to the Shoe Departments of multiple Covered Stores.

2. GRANT OF SUPPLY RIGHT. Filene's hereby grants to the Supplier an exclusive supply right (the "Supply Right") to supply Merchandise to the Shoe Departments of all Covered Stores. Subject to Section 3, all Merchandise shall be owned by Supplier with Filene's having the right to sell such Merchandise for the benefit of Supplier and Filene's as provided in this Agreement. Filene's shall give Supplier the first right of refusal to supply Merchandise pursuant to this Agreement to any Store that will open a Shoe Department and which Store is not on the Covered Store Schedule at the time the decision is made by Filene's to open a Shoe Department in that Store. Filene's shall provide Supplier ninety
(90) days advance written notice of its intention to open a new footwear department in any Store that is not a Covered Store or to add a Covered Store and Supplier shall have thirty (30) days after the date of such notice to agree, in Supplier's sole discretion, to supply Merchandise to the new Shoe Department. If Supplier does not so agree, Filene's may supply Merchandise to the new department itself or through a third party. In the event that Filene's intends to open a significant number of Shoe Departments within a short time period and Supplier agrees to supply such Shoe Departments as provided above, Supplier shall have a reasonable amount of time, under the circumstances, to supply such Shoe Departments. Notwithstanding anything to the contrary herein, Filene's and Supplier agree that the Filene's Basement Store # 51 located at 426 Washington Street, Boston, MA 02101 will not be subject to this Agreement.

3. SUPPLY OF MERCHANDISE. Supplier will supply Merchandise for each Covered Store on the Covered Store Schedule. Filene's shall acquire no ownership rights in and to the Merchandise supplied by the Supplier hereunder and title to Merchandise shall remain in and with Supplier until actually sold, except that title to Merchandise sold to Filene's customers shall pass to Filene's at the instant the sale of such Merchandise is effected. In the event that Merchandise is returned by the customer to a Store, title shall automatically re-vest in Supplier.

4. MERCHANDISING AND PRICE PRACTICES.

4.1. Merchandise Supplied. Supplier shall determine the quantity and mix of the Merchandise to be sold at the Covered Stores. Supplier shall continuously provide the Covered Stores with a complete line of salable inventory of current season Merchandise in appropriate quantities and of a quality in keeping with the quality of other merchandise sold by Filene's and targeted to Filene's normal customer. The Merchandise supplied will generally be shipped in pre-assorted case packs typical in the footwear industry, and Supplier will not replenish pairs sold at a size level. Supplier will coordinate with Filene's to provide Merchandise with scannable bar codes which are readily readable by Filene's normal ticket scanning equipment.

4.2. Compliance with Law. Supplier shall be responsible to assure that no Merchandise will be supplied, and no Merchandise will be offered at any price or in any manner, that violates any applicable Federal, state or other applicable statute or regulation. If a Filene's store manager or officer becomes aware of any actual or suspected violation, Filene's will immediately advise Supplier of that violation. Filene's agrees to comply with all applicable laws and regulations in the performance of this Agreement and in the operation of the Covered Stores.

4.3. Delivery Responsibility. Supplier shall arrange to deliver Merchandise, at Supplier's cost, to Filene's distribution center, and Filene's employees shall be responsible for receiving the Merchandise, accounting for the Merchandise received, shipping the Merchandise to the Covered Stores and stocking the Merchandise in or on the display case or fixture at each of the Covered Stores. Filene's and Supplier may mutually agree from time to time that Supplier will ship Merchandise directly to a Covered Store at Supplier's expense. Filene's will maintain the Shoe Departments in a normal and neat condition consistent with other departments in the Store. Mismates, defective or damaged Merchandise received from Supplier will be noted and set aside for inspection by Supplier's Supervisor and for disposition at Supplier's direction within a reasonable time. Supplier shall be exempt from Filene's distribution center, vendor and data exchange requirements.

4.4. Transfers of Refunded Merchandise in non-Covered Stores. Filene's will make good faith efforts to ensure that Merchandise returned to Stores which are not Covered Stores will be transferred or shipped to a Covered Store at Supplier's expense.

4.5. Prices and Discounts. Supplier will set the prices at which its Merchandise will be sold and put in force reasonable discounting policies designed to clear stale Merchandise. Except as provided below, Supplier shall have the only authority to markdown Merchandise. Nevertheless, Supplier agrees
(i) to participate in limited, selected promotional events in the Covered Stores as agreed upon in advance by Supplier, and (ii) to maintain a policy of periodic markdowns based on length of time Merchandise has been on the selling floor. Supplier shall offer to employees who receive a discount from Filene's own departments under Filene's policies the same discount on all sales of Merchandise as is normally received by them under Filene's then current policies in effect from time to time. Notwithstanding the foregoing, discounts for sales to Filene's employees shall only be in accordance with Filene's normal policies in effect from time to time and shall in no event exceed 30% of the otherwise applicable price for the Merchandise.

4.6. Supervisors. Supplier shall provide, at its expense, a sufficient number of trained Supplier's Supervisors who will coordinate and make recommendations as to arrangement, presentation and organization of the Shoe Departments in the Covered Stores.

4.7. Space. Filene's, at its expense, shall make available an amount of space for the Shoe Department in a size and location as listed on the Covered Store Schedule, which space is not to be less than the greater of (i) the existing Shoe Department space in each Shoe Department on the date of this Agreement, or (ii) 1,000 square feet. Filene's shall make available for Supplier's use a minimum of 200 square feet of storage space in each Covered Store. Any relocation or renovation of a Shoe Department must be at Filene's sole expense and any proposed new location for the Shoe Department must be approved in advance by Supplier.

4.8. Utilities and Personnel. Filene's, at its expense, will provide all utilities and personnel to operate the Shoe Department in each Covered Store. Filene's will be responsible for all store staffing and all decisions relating to hiring and termination of such personnel related to the Covered Stores (including all sales and stocking personnel), and will bear all expenses relating thereto including without limitation, the cost of all employee salaries, payroll taxes and employee benefits. Filene's shall use commercially reasonable efforts to assure that the quality of the personnel in the Shoe Department is consistent with the quality of its personnel in other departments in the same Covered Store. Supplier at its expense shall provide Merchandise-related training for Filene's personnel serving the Shoe Department. Filene's agrees to indemnify Supplier from all damages, costs of defense and expenses (including attorneys' fees) relating to claims based on wrongdoing by Filene's employees, agents or contractors unless caused by Supplier or its agents', contractors', or employees' active negligence (not including negligence by omission or inaction), gross negligence or willful wrongdoing.

4.9 Advertising. Supplier will, upon request, provide to Filene's information related to Merchandise to be advertised in newspapers or other public media. Filene's will be responsible for producing the advertising copy and placing it with the appropriate media according to Filene's normal procedures for its own merchandise. Supplier will not be obligated to pay any advertising expenses relating to the Shoe Departments of the Covered Stores.

4.10 Premium Location Fee. Supplier agrees to pay to Filene's for each Covered Store existing on the Effective Date of this Agreement, a monthly fee ("Location Fee") in the amount set forth opposite of each Covered Store on Exhibit B, attached hereto and incorporated herein. In the event that a Store listed on Exhibit B is no longer a Covered Store under this Agreement, Supplier will not be

required to pay the Location Fee attributable to that Store and any such Location Fee will be prorated for the actual number of days the Shoe Department operated in that Store.

5. FIXTURES, EQUIPMENT, LOCATION AND LAYOUT. Filene's shall at its sole cost provide the fixtures and equipment to display Supplier's Merchandise in the Covered Stores or as needed to replace existing fixtures. The fixtures and equipment decisions with respect to design, type, color, material, layout, and location (subject to Section 4.7) within each Covered Store and related matters for new fixtures shall be made jointly by Supplier and Filene's. Filene's shall maintain at its expense all displays and fixtures in good repair and condition, ordinary wear and tear excepted. Supplier shall, subject to Filene's approval, provide individual Merchandise "case talkers" for depicting the style, price, and any other pertinent information that Supplier deems appropriate. Title to all fixtures paid for by Filene's shall remain in Filene's name and title to all fixtures paid for by Supplier shall remain in Supplier's name. Upon termination of this Agreement, and at Filene's request, Supplier will remove such fixtures not owned by Filene's. Absent a continuing Event of Default, no fixtures or equipment belonging to Supplier or any patented fixtures of Supplier shall be transferred or removed from a Store without the consent of Supplier; and, further, in no event will Filene's sell, transfer or otherwise dispose of any fixtures patented by Supplier without Supplier's express written consent.

6. SALES REVENUE SHARING; ACCOUNTING PROCEDURES.

6.1 Sales. All sales of Merchandise will be identified with the Shoe Department and shall be made through Filene's normal cash registers or point-of-sale systems and by use of Filene's normal sales recording equipment. Net Sales from sales of Merchandise shall be split 80% to Supplier and 20% to Filene's. Supplier's 80% portion of the Net Sales ("Supplier's Proceeds") shall be held in trust for the benefit of Supplier and Supplier's Lender; provided however, that prior to receiving written notice to the contrary from Supplier's Lender, Filene's shall deliver all of Supplier's Proceeds directly to Supplier and shall be released from any claim by Supplier's Lender for all such funds turned over to Supplier.

6.2 Reports. The reporting of all sales of Merchandise shall be made in conformity with the methods established by Filene's from time to time. The costs of such methods and point-of-sale equipment and maintenance thereof shall be borne by Filene's. Filene's also agrees to provide and make accessible to Supplier information, statistics and reports available within Filene's existing merchandise processing system which relate to the Merchandise. Any special reports or enhancements required by the Supplier will be subject to Filene's approval. Filene's hereby agrees to cooperate and coordinate with Supplier the implementation of electronic exchange and communication between Filene's computer system and Supplier's computer system in connection with point-of-sale, receiving and shipping and inventory information related to the Merchandise, including Merchandise returns at any Stores which are not Covered Stores.

6.3. Books & Records. Supplier shall maintain and preserve the records required to be maintained hereunder for the length of time required by applicable law. Supplier shall have the right to obtain from Filene's all statements, data or explanations reasonably necessary to validate each Accounting Statement (as defined in Section 6.5) provided by Filene's to Supplier. Filene's shall keep true and correct books of accounts in accordance with Filene's regular accounting practices related to the Merchandise, which entries shall be open to examination and inspection by Supplier upon reasonable advance notice during all normal business hours during the term of this Agreement and for three (3) years thereafter. Such examination and inspection will not occur more than twice in any twelve (12) month period.

6.4. Filene's Fee. In consideration of granting the Supply Right, Filene's shall be entitled to twenty percent (20%) of Net Sales of Merchandise ("Filene's Fee").

6.5. Accounting. No later than Friday of each week Filene's shall send to Supplier a written statement (the "Accounting Statement") by electronic mail or by personal delivery setting forth with respect to the immediately preceding week the following:

(i) the total amount of Gross Sales and Net Sales, and

(ii) the amount of Filene's Fee.

6.6. Settlement. Contemporaneously with the submission of the Accounting Statement, Filene's shall pay to Supplier in immediately available funds or by another method agreed to by the parties, subject to the provisions of Section 13, an amount equal to Net Sales in or from the Shoe Department during the immediately preceding week less the amount identified in clause (ii) of Section
6.5. Supplier may, by notice to Filene's given no later than ninety (90) days following the date of an Accounting Statement, question the accuracy of such Accounting Statement. Filene's and Supplier shall make diligent, good faith efforts to resolve the disagreement within thirty (30) days following such notice. If Filene's does not receive a notice of dispute from Supplier within one hundred twenty (120) days after the date of the applicable Accounting Statement, Supplier will be deemed to have accepted such Accounting Statement, subject to any adjustment required as permitted herein.

7. TERM AND TERMINATION.

7.1. Basic Term and Renewals. The original term of this Agreement shall commence on January 30, 2005, and continue through and include January 29, 2010, unless previously terminated in accordance with the provisions of this Agreement. This Agreement shall be automatically extended for additional periods of one (1) year each. If either party chooses not to renew this Agreement at the end of the original term or any successive renewal term, it shall deliver a written termination notice to the other party not less than one hundred eighty
(180) days prior to the end of the then effective term.

7.2. Termination for Breach. Either party may terminate the Supply Right and obligations related thereto as to a particular Shoe Department in an individual Covered Store or as to all Covered Stores at any time for any Event of Default hereunder by the other party hereto by giving ninety (90) days prior written notice to the defaulting party. In addition, an individual Store shall no longer be a Covered Store, and this Agreement shall terminate as to such individual Store, if at any time that Store ceases for any reason to be operated by Filene's. Filene's shall provide to Supplier written notice no later than ninety (90) days prior to the date when any Covered Store will no longer be operated by Filene's.

7.3. Supplier Special Termination Rights. Supplier shall have the right, upon sixty (60) days prior written notice, to terminate the Supply Right and obligations related thereto as to all Covered Stores whether or not there has been any breach or default by Filene's if at any time the number of Covered Stores of Filene's, in the aggregate, is reduced to less than four Covered Stores, or (b) Filene's has defaulted under the Combo Store Supply Agreement and Supplier has given Filene's notice of termination thereunder.

7.4. [Intentionally deleted.]

7.5. Effect of Termination. Except as otherwise provided in Section 13 hereof, upon the termination of the Supply Right and obligations related hereto for any reason permitted herein as to a particular Covered Store, individually, or as to all Covered Stores (a) Supplier shall have the option to liquidate existing inventory of the Merchandise; provided, however, that such right to continue selling shall not extend beyond the date upon which this Agreement shall formally terminate unless agreed in writing by the parties, (b) Filene's shall be entitled to offer for sale Merchandise not obtained from Supplier for a period of thirty (30) days prior to the effective date of any such termination, and (c) Filene's will continue to display the remaining inventory of Merchandise in a manner consistent with such displays prior to such termination although the space allocated to that remaining inventory of Merchandise will be reduced as

the quantity of that inventory of Merchandise is reduced. Except as otherwise provided in Section 13, Supplier shall remove, at Supplier's expense within ninety (90) days following such termination: (y) all Merchandise supplied by Supplier located in any Filene's Store, and (z) if demanded by Filene's in writing, and except as otherwise provided herein, all fixtures provided by Supplier (if any) which Filene's demands be removed. Supplier may purchase from Filene's any patented fixtures installed in the Shoe Departments at a price equal to 100% of the unamortized costs of such fixtures with those costs being amortized on a straight-line basis over five (5) years; provided however, the purchase price of such patented fixtures shall not be less than 5% of the original cost of such fixtures. Supplier will promptly pay all costs associated with the repair of any damage to a Store caused by such removal. Except as otherwise provided in Section 13 hereof, any Merchandise or fixtures not removed by Supplier as provided above will be deemed abandoned and Filene's may take such actions (including destroying) with respect to such items without liability.

8. SHORTAGES AND DAMAGES. Supplier will maintain complete and accurate records of the inventory of its Merchandise at each Store and make that information available to Filene's. At the time of each Annual Inventory (as defined below), Filene's, at Supplier's expense, shall arrange for having an inventory to be taken of Supplier's Merchandise at the same time of Filene's scheduled year-end physical inventory (the "Annual Inventory"). Supplier, at its expense, may have a representative observe the taking of the Annual Inventory. In the event that the Annual Inventory shows shrinkage in Merchandise in excess of two and seven-tenths percent (2.7%) of annual Net Sales ("Allowable Shrink"), Filene's will pay to Supplier 50% of the retail value (as listed in Supplier's inventory retail stock ledger) of that shrinkage amount which exceeds the Allowable Shrink
(less any insurance proceeds payable to Supplier with respect to such loss) within thirty (30) days of the date of the Annual Inventory.

9. IDENTITY, INDEMNITY AND RELATIONSHIP TO PARTIES.

9.1. No Agency. Each party to this Agreement agrees that in performing its respective duties and obligations hereunder, and in exercising any of the rights or benefits granted hereunder, neither shall at any time hold itself out to be the agent, servant, or employee of the other party, in any manner whatsoever, and it is expressly understood that it is the intention of this Agreement that neither party hereto shall at any time be or act as the agent, servant or employee of the other.

9.2. Indemnity of Filene's. Supplier will indemnify Filene's and save it harmless from and against any and all claims, actions, damages, liability and expense (including attorneys' fees) in connection with loss of life, personal injury and/or damage to property arising from or out of any occurrence caused by Supplier, by its agents, contractors, or employee negligence, omission or deliberate acts. In case Filene's shall, without fault on its part, be made a party to any litigation commenced by or against Supplier and relating to any of the foregoing matters, then Supplier shall protect and hold Filene's harmless and shall pay all costs, expenses and reasonable attorneys' fees that may be incurred or paid by Filene's in defending such action.

9.3. Indemnity of Supplier. Filene's will indemnify Supplier and save it harmless from and against any and all claims, actions, damages, liability and expense in connection with loss of life, personal injury and/or damage to property rising from or out of any occurrence caused by Filene's or its agents, contractors, or employees' negligence, omission or deliberate acts. In case Supplier shall, without fault on its part, be made a party to any litigation commenced by or against Filene's and relating to any of the foregoing matters, then Filene's shall protect and hold Supplier harmless and shall pay all costs, expenses and reasonable attorneys' fees that may be incurred or paid by Supplier in defending such action.

9.4. Indemnification Procedure

9.4.1. Notice. If any third party makes a claim for which Supplier or Filene's, as the case may be, (the "Indemnified Party") seeks indemnity from the other party hereto

("Indemnitor"), the Indemnified Party shall as soon as practicable notify Indemnitor of the details of the claim ("Claim Notice").

9.4.2. Defense of Admitted Indemnified Claim. After receiving a Claim Notice, Indemnitor may elect, by written notice to the Indemnified Party, to assume the defense of such claim by using counsel selected by Indemnitor, acting reasonably. If Indemnitor assumes such defense and admits that the claim is subject to the Indemnitor's indemnity obligations, then: (i) the claim shall be deemed to be a claim indemnified by the Indemnitor; (ii) the Indemnified Party may, at its election, participate in the defense of the claim, but Indemnitor will have no obligation to pay for any defense costs including attorneys" fees of the Indemnified Party after Indemnitor assumes the defense of the claim; and
(iii) Indemnitor will have the right, without cost to Indemnified Party, to compromise and settle the claim on any basis believed reasonable, in good faith, by Indemnitor, and Indemnified Party shall be bound thereby.

9.4.3. Disputed Indemnity. After receiving a Claim Notice, if Indemnitor either does not assume the defense thereof, or does so under a reservation of rights without admitting that the claim is subject to the Indemnitor's indemnity obligations, then: (i) the claim shall not be deemed to be a claim indemnified by the Indemnitor and neither party shall have waived any rights to assert that the claim is or is not properly a claim subject to the Indemnitor's indemnity obligations; (ii) both Indemnitor and Indemnified Party may, at their individual election, participate in the defense of such claim but Indemnitor will remain responsible for the costs of defense, including reasonable attorneys" fees of the Indemnified Party should the claim ultimately be determined to be subject to Indemnitor's indemnity obligation; and (iii) the Indemnified Party shall have the right to compromise and settle the claim on any basis believed reasonable, in good faith, by the Indemnified Party, and the Indemnitor will be bound thereby should the claim ultimately be determined to be subject to Indemnitor's indemnity obligation.

10. INSURANCE DAMAGE.

10.1. Supplier Liability Insurance. Supplier shall maintain commercial general and product liability insurance coverage against any loss or liability for damages which may result from Supplier's operations or Supplier's Merchandise either to persons or property with limits of not less than $2 million for injury to one person; and not less than $500,000 for property damage or occurrence in each location (subject to normal deductibles and retentions). Supplier's liability insurance shall name Filene's as an additional insured and shall contain provisions waiving subrogation against Filene's; provided however, that this provision shall not cover claims provided for in the indemnity clauses of Section 4.8 and/or 9.3.

10.2. Supplier Casualty Insurance. Supplier agrees to keep, at its own cost and expense, all of its property and its Merchandise and all fixtures provided by it in the Store adequately insured against loss by fire and all other casualties covered by broad form extended coverage and sprinkler leakage insurance policies (or Supplier may self-insure the same). Supplier shall bear the entire risk of a casualty to its Merchandise and other property and all fixtures located in the Stores; provided, however, that this provision shall not cover claims provided for in the indemnity clauses Sections 4.8 and/or 9.3.

10.3. Filene's Liability Insurance. Filene's shall provide broad form comprehensive commercial general liability insurance coverage insuring Filene's and Supplier against any loss or liability for damages which may result from Filene's operations or Supplier's operations within the Covered Stores with limits of not less than $2 million for injury to one person, and for property damage or occurrence in each location (subject to normal deductibles and retentions); provided, however, that this provision shall not cover claims provided for in the indemnity clause of Section 9.2 for injuries to persons or damage to property. The limits indicated herein may be satisfied by a primary policy and umbrella liability policy showing the primary liability policy as an underlying policy. A certificate of insurance naming Supplier, as an additional insured shall evidence the insurance required herein. The primary liability policy shall contain provisions waiving subrogation against Supplier.

10.4. Filene's Worker Compensation Insurance. Filene's shall provide to Supplier proof of insurance for worker compensation insurance for all Covered Stores which insurance shall meet or exceed the regulatory requirements of the state in which Covered Stores are located. Filene's agrees to indemnify and defend Supplier for all claims brought by employees of Filene's.

11. LIENS AND TAXES. Supplier agrees to pay all ad valorem, personal property, excise, use or other taxes and assessments and licenses of every description assessed against it, in respect of or measured by the Merchandise or other property of Supplier and all fixtures provided by Supplier. Filene's shall be responsible for the payment of all sales taxes resulting from sales of the Merchandise under this Agreement.

12. DEFAULT.

12.1. Any one of the following shall constitute an event of default ("Event of Default") hereunder:

12.1.1. Either party fails to comply with or perform as and when required or to observe any of the terms, conditions, or covenants of this Agreement, and such failure continues for a period of (a) ten (10) days after notice thereof to the defaulting party with respect to monetary defaults, and (b) thirty (30) days after notice thereof to the defaulting party with respect to non-monetary defaults; or

12.1.2. Any proceeding under the United States Bankruptcy Code or any successor law or any law of the United States or of any state relating to insolvency, receivership, or debt adjustment is instituted by either party; any such proceeding is instituted against either party and is consented to by the respondent or remains undismissed for sixty (60) days; an order for relief is entered under the United States Bankruptcy Code or any successor law against either party; either party is adjudicated a bankrupt; a trustee, receiver or similar fiduciary is appointed to administer any substantial part of the property of either party; or either party makes an assignment for the benefit of creditors, admits in writing an inability to pay debts generally as they become due or becomes insolvent; or

12.2. Upon the occurrence of an Event of Default hereunder, the non-defaulting party may terminate this Agreement as provided in Section 7.2, and/or exercise any other remedy provided by law or equity. An Event of Default under Section 12.1.2 above shall be effective without notice or the taking of any action by the non-defaulting party.

13. SUPPLIER'S LENDER. If at any time during the term of this Agreement Supplier and Lender shall no longer both be "Loan Parties" (as defined in the credit facilities existing on the date hereof) to the same credit facilities, or if Supplier's supplying of Merchandise hereunder would otherwise constitute a default under any such credit facility, Supplier's obligations to supply Merchandise hereunder shall cease until consent therefor has been obtained from Supplier's Lender. Upon the obtaining of such consent, Filene's and Supplier hereby agree, for the benefit of such commercial lender(s) which from time to time provide Supplier's principal credit facilities ("Supplier's Lender"), to the following:

13.1. Security Interest/Consignment.

13.1.1. All Merchandise delivered by Supplier from time to time to Filene's under this Agreement is made on a consignment sales basis. Filene's acknowledges that Supplier is the sole owner of, and holds sole title to, the Merchandise.

13.1.2. Filene's hereby acknowledges that Supplier has granted to Supplier's Lender a security interest in substantially all of its assets, including, without limitation, all Merchandise,

fixtures, equipment and other personal property owned by Supplier and the proceeds thereof now or hereafter held by, shipped to or otherwise in possession of or controlled by Filene's, and unremitted Supplier's Proceeds (collectively, the "Collateral", and as to the Merchandise, the "Collateral Merchandise"), and Filene's waives and relinquishes any lien rights or claims of any kind against the Collateral. Filene's authorizes Supplier to file UCC-1 financing statements covering the Merchandise supplied as part of this Agreement, such UCC-1 financing statements to be in a form reasonably acceptable to Filene's and Supplier's Lender to acknowledge Supplier's and/or Supplier's Lender's interest in the Collateral. Upon Supplier's Lender's request, Filene's will execute any documents reasonably required to perfect or acknowledge Supplier's Lender's security interest or other rights in the Collateral; Filene's will execute any documents in a form reasonably acceptable to Filene's which indicate that the Merchandise has been consigned to Filene's or that Filene's has not granted to any party a lien upon the Collateral, other than any liens which have been expressly subordinated to the interests of Supplier and Supplier's Lender. Notwithstanding the foregoing, the security interests acknowledged under this Agreement and, to the extent permitted by the Bankruptcy Code, in any order of the Bankruptcy Court approving the agreement are to be deemed perfected without the necessity of filing any documents otherwise required under non-bankruptcy law for the perfection of security interests in real or personal property, with such perfection being binding upon any subsequently appointed trustee either under Chapter 11 or any other chapter of the Bankruptcy Code and upon all creditors of the debtor.

13.1.3. It is the intent of Supplier and Filene's to create a true consignment arrangement with regard to Supplier's supply of Merchandise to Filene's with Supplier as consignor and Filene's as consignee. Supplier's ownership of the Merchandise notwithstanding, as a precaution and without affecting the intention of the parties to create a true consignment arrangement, Filene's, by this Agreement, grants to, and creates in favor of, Supplier a continuing security interest in the Consignment Property to secure the Consignment Obligations. It is the intention of the parties that the precautionary security interest granted by Filene's to Supplier hereby is and will be a first priority security interest in the Consignment Property.

13.2. Notice of Identity. Supplier will give written notice to Filene's from time to time of the identity of the Supplier's Lender, and Filene's shall be under no obligation hereunder to any party unless and until Filene's shall have received such notice, and then Filene's sole obligation to Supplier's Lender are only as expressly provided in Section 13 hereof and to follow such instructions as to remitting Supplier's Proceeds. Upon receipt by Filene's of such notice from the Supplier, Filene's will acknowledge only the party specifically named by Supplier in such notice as Supplier's Lender. Any notice subsequently given by Supplier and signed by the lender named in the preceding notice shall revoke any previous notice given by Supplier hereunder. Upon receipt by Filene's of such subsequent notice, Filene's shall have no obligation to any party previously named by Supplier as Supplier's Lender.

13.3. Collateral.

13.3.1. Filene's agrees that upon receipt of written notice from Supplier's Lender referring to this Section 13, Filene's will hold Supplier's Proceeds from the Collateral for the account of Supplier's Lender and subject to Supplier's Lender's instructions and shall release such proceeds only to Supplier's Lender or as otherwise directed by a court. Any such payments shall be made free of any set-off, reduction, or counterclaim, (including, without limitation, any set-off, reduction or counterclaim based upon any alleged breach by Supplier of this Agreement). Supplier agrees to indemnify and hold harmless Filene's for complying with any notice purporting to be the written notice of Supplier's Lender.

13.3.2. Upon receipt of Lender's Default Notice (as defined below), Filene's agrees to provide Supplier's Lender with all reasonably requested reporting regarding the Collateral that it would otherwise provide to Supplier.

13.3.3. Filene's agrees that, in addition to its obligations under this Section 13, upon receipt of written notice from Supplier's Lender ("Lender's Default Notice") referring to this Section 13.3 that represents to Filene's that there is the occurrence and continuance of a default under the financing arrangements between Supplier and Supplier's Lender and stating the intent of Supplier's Lender to exercise its remedies as a result of the occurrence of such default, such Lender's Default Notice shall constitute a termination of the Supply Right and Filene's shall hold the Supplier's Proceeds for the account of Supplier's Lender and subject to the instructions of Supplier's Lender. In that regard, Supplier's Lender may elect to immediately remove the Collateral or it may sell the then existing inventory of Collateral Merchandise subject to Section 7.5 for a period of up to ninety (90) days after Filene's receipt of Lender's Default Notice (but in no event later than the then current termination date of this Agreement) and in connection with such sale, Filene's shall comply with its obligations under this Agreement to the same extent as if Supplier's Lender were the Supplier. At the end of such sale, and subject to the provisions of Section 5 hereof, the Supplier's Lender may repossess and remove any remaining Collateral from the Filene's locations, as Supplier's Lender in its discretion may elect; provided, however, that Supplier's Lender agrees to the removal of such Collateral only in accordance with such reasonable limitations on the time and manner of such removal as Filene's shall require which limitations are intended to avoid disruption of Filene's normal operations or any possible confusion in the mind of the public as to whether any of Filene's assets are being removed. In connection with any sale of the Collateral Merchandise from Filene's premises, all advertising with respect to such sale shall be subject to the prior approval of Filene's (which approval shall not be unreasonably withheld and given promptly so as not to unreasonably delay the exercise of Supplier's Lender's rights). Filene's shall not be deemed to have failed to have acted in good faith or unreasonably withheld approval by refusing to approve any advertising which refers to any "going out of business sale", "liquidation" or similar terms or which could create any possible confusion in the mind of the public as to whether any of Filene's assets are being liquidated. Upon any removal of the Collateral in accordance with this Agreement, Supplier's Lender shall not be liable for any diminution in the value of Filene's business which is caused by the termination of the Supply Right or the removal or absence of the Collateral; provided however, Supplier's Lender does hereby agree to indemnify and hold harmless Filene's from (i) all damages and costs of defense (including reasonable attorneys" fees) arising from the claims of any and all third parties, including, without limitation, Supplier, against Filene's for complying with any directions of Supplier's Lender, except to the extent Filene's is finally determined by a court of competent jurisdiction to have committed willful misconduct or to have acted in a grossly negligent manner or in actual bad faith; and (ii) any costs, damages or expenses to Filene's tangible property or third party claims for personal injury arising as a result of Supplier's Lender exercising its rights hereunder.

13.3.4. Nothing contained herein shall obligate Supplier's Lender to undertake any such action, nor shall anything contained herein constitute the Supplier's Lender's assumption of any obligations of the Supplier under this Agreement. However, to the extent and during the period of Supplier's Lender's exercise of control over the Collateral while in Filene's stores, Supplier's Lender agrees to abide by the terms hereof as they relate to the Collateral and Filene's right to its 20% split of the Net Sales.

13.3.5. Filene's will provide to the Supplier's Lender, as and when forwarded or furnished to the Supplier, a copy of any formal notice of any breach by Supplier (with the same degree of particularity as Filene's provides Supplier) of this Agreement given by Filene's to the Supplier and any notice of termination of this Agreement. Filene's acknowledges that Supplier's Lender shall have the right but not the obligation to cure any such breach within the time frames and/or conditions set forth in this Agreement which are otherwise applicable to Supplier.

13.3.6. Filene's acknowledges and agrees that the Supplier's Lender has no obligation to make any loan or advance to the Supplier for the purpose of assisting the Supplier in the performance of its obligations under this Agreement, including, without limitation, for paying any

amounts due from the Supplier to Filene's. Filene's is not a beneficiary of the financing agreements and shall have no right to enforce the terms thereof or assert any claims thereunder.

14. MISCELLANEOUS.

14.1. Indulgences, Etc. Neither the failure nor any delay on the part of either party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

14.2. Confidentiality. The terms of this Agreement are confidential to the parties hereto and each party agrees not to make any public announcement related to this Agreement or the relationship of the parties without prior notice to the other party hereto except as may be required by law.

14.3. Controlling Law. This Agreement and all questions relating to its validity, interpretation, performance and enforcement (including, without limitation, provisions concerning limitations of actions), shall be governed by and construed in accordance with the laws of the State of Ohio.

14.4. Notices. All notices, requests, demands and other communications, required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received when delivered (personally, by courier service such as Federal Express, or by other messenger) against receipt or upon actual receipt of registered or certified mail, postage prepaid, return receipt requested, addressed as set forth below:

To Filene's:               Filene's Basement Inc.
                           12 Gill Street, Suite 1600
                           Woburn, MA 01801
                           Attn:  Jim Rudd

                           and

with a copy to:            General Counsel
                           3241 Westerville Road
                           Columbus, OH  43224

If to Supplier:            DSW Inc.
                           4150 East Fifth Avenue
                           Columbus, OH  43219
                           Attn: Doug Probst

                           and

                           General Counsel
                           3241 Westerville Road
                           Columbus, OH 43224

Any party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this paragraph for the giving of notice.

14.5. Arbitration.

14.5.1. The parties agree that arbitration is the sole and exclusive remedy for each of them to resolve and redress any dispute, claim or controversy involving the interpretation of this Agreement or the terms, conditions or termination of this Agreement. The arbitrator will be mutually agreed upon by the parties, and the arbitration will be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The parties will have the right to conduct discovery for such arbitration pursuant to the Federal Rules of Civil Procedure; provided, however, that the arbitrator will have the authority to establish an expedited discovery schedule and discovery cut-off point, and to resolve any discovery disputes. The arbitrator will have no jurisdiction or authority to change any provision of this Agreement by alterations of, additions to or subtractions from the terms of this Agreement. The arbitrator's sole authority will be to interpret or apply any provision(s) of this Agreement or any public law alleged to have been violated. The arbitrator will be limited to awarding compensatory damages, but, to the extent allowed by law, will have no authority to award punitive, exemplary or similar-type damages. The parties intend that any arbitration award will be final and binding on them, and that a judgment on the award may be entered in any court of competent jurisdiction, and enforcement may be had according to the terms of that award. This Section will survive the termination or expiration of this Agreement.

14.5.2. The parties shall share equally the arbitrator's fee and other costs associated with any arbitration.

14.5.3. The parties acknowledge that, because arbitration is the exclusive remedy for resolving issues arising under this Agreement, neither party may resort to any federal, state or local court or administrative agency concerning breaches of this Agreement or any other matter subject to arbitration under this Section, and that the decision of the arbitrator will be a complete defense to any suit, action or proceeding instituted in any federal, state or local court or before any administrative agency with respect to any arbitrable claim or controversy.

14.5.4. The parties each waive the right to have a claim or dispute with one another decided in a judicial forum or by a jury.

14.6. Binding Nature of Agreement. Subject to the provisions hereof relating to assignments, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assign.

14.7. Execution of Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

14.8. Provisions Separable. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

14.9. Entire Agreement. This Agreement contains the entire understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understanding, inducements or conditions, express or implied, oral or written, except as herein contained. The express terms hereof control and supersede any course of performance and/or

usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing.

14.10. Paragraph Headings. The paragraph headings in this Agreement are for convenience only; they form no part of this Agreement and shall not affect its interpretation.

14.11. Gender, Etc. Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate.

14.12. Number of Days. In computing the number of days for purposes of any payments due under this Agreement, all days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if the final day of any time period falls on a Saturday, Sunday or holiday on which federal banks are or may elect to be closed, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or such holiday.

14.13. Assignment. Except as provided in Section 14.16, neither the Supplier nor Filene's may assign or in any other manner transfer by voluntary act, operation of law or otherwise, its rights hereunder without the written consent of the other party hereto, provided, however, that Filene's may assign this Agreement to an affiliate or any entity which acquires substantially all of its assets.

14.14. No Conflict. Each party hereto represents to the other that the entering into of this Agreement and the carrying out of the terms hereof does not conflict with the terms of any other agreement by which the representing party is bound.

14.15. Amendment/Waiver. This Agreement may be modified or amended only in writing signed by an officer of Filene's and by Supplier. No failure by any party to enforce any provision of this Agreement or to exercise any right or remedy resulting from a breach thereof, no acceptance of full or partial payment or acceptance of performance with the knowledge of the breach of any provision of this Agreement, and no custom or practice of the parties at variance with the terms of this Agreement shall be construed as a waiver of such breach, any provision of this Agreement or other right of such party under this Agreement. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom such waiver is charged. Further, except to add or delete one or more Covered Stores to the coverage of this Agreement, this Agreement shall not be amended, revised, supplemented, or otherwise changed without prior written notice to Supplier's Lender, and, if such modifications affect Supplier's Lender's rights under this Agreement, such modifications shall not be effective without the consent of the Supplier's Lender, which consent shall not unreasonably be withheld or delayed.

14.16. Third Party Beneficiaries. Filene's acknowledges that Supplier's Lender is an intended beneficiary of this Agreement, has been collaterally assigned and granted a security interest in all of Supplier's rights hereunder and, upon the terms and conditions specified herein, shall have the right to directly enforce the provisions hereof as though Supplier's Lender stood in Supplier's shoes. By accepting any of the benefits of this Agreement, Supplier's Lender agrees to be bound by the provisions hereof relating to Supplier's Lender.

14.17. Force Majeure. If an event of Force Majeure prevents Supplier from carrying out its responsibilities in any Covered Store, Supplier shall not be deemed in default under this Agreement.

15. AMENDMENT AND RESTATEMENT. The parties agree that this Agreement amends and restates the Original Agreement and shall replace the Original Agreement for all Shoe Departments which are less than 10,000 square feet. For all Shoe Departments which are equal to or exceed 10,000 square feet, the Combo Store Supply Agreement, executed contemporaneously herewith as between Supplier and Filene's, shall control. Notwithstanding the foregoing, nothing herein shall be deemed to

release or terminate any obligations of the parties which accrued under the Original Agreement with respect to the Covered Stores subject to this Agreement.

[remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement by their duly authorized officers as of the date first above written.

DSW INC.

By: /s/ Peter Z. Horvath
    ------------------------------------
Printed Name: Peter Z. Horvath
              --------------------------
Title:        Executive Vice President
       ---------------------------------

FILENE'S BASEMENT INC.

By: /s/ James A. McGrady
    ------------------------------------
Printed Name: James A. McGrady
              --------------------------
Title:        Executive Vice President
       ---------------------------------

 UNIT            NAME                    STREET ADDRESS                          CITY          STATE          ZIP        SQ. FEET
 ----            ----                    --------------                          ----          -----          ---        --------
51000     Connecticut Ave.    1133 Connecticut Avenue                        Washington D.C.     DC          20036         1,333
51100     Towson              1238 Putty Hill Ave.                           Towson              MD          21286         2,266
51200     Rockville           11840 Rockville Pike                           Rockville           MD          20852         1,370
51300     Mazza               5300 Wisconsin Avenue (Mazza Gallery)          Washington D.C.     DC          20015         1,586
51500     Broadway            2222 Broadway                                  New York            NY          10024         1,770
51600     Watertown           485 Arsenal Street - Arsenal Mall              Watertown           MA          02172         1,020
51700     Northshore          Northshore Mall - Routes 114 & 128             Peabody             MA          01960           965
51800     Framingham          341 Cochituate Road                            Framingham          MA          01701         1,940
52500     Hyannis             768 Ivanough Road - Capetown Plaza             Hyannis             MA          02601         1,555
52600     Newton              215-227 Needham Street                         Newton              MA          02164         2,588
54000     Manhasset           1400 Northern Boulevard                        Manhasset           NY          11030         2,908
54300     Fresh Meadows       187-04 horace Harding Expressway               Fresh Meadows       NY          11365         1,198
54400     White Plains        13 City Place                                  White Plains        NY          10601         4,636
54700     Union Square        4 Union Square South                           New York            NY          10003         4,291
55700     Braintree           250 Granite Street (South Shore Plaza)         Braintree           MA          02184         1,236
56400     Homestead           280 East Waterfront Drive                      Homestead           Pa          15120         3,228
57000     Chelsea             620 Sixth Avenue (Chelsea)                     New York            NY          10011         2,650
57100     Lenox               3535 Peachtree Rd                              Atlanta             GA          30326         2,970
58000     State Street        One North State Street                         Chicago             IL          60602         3,314
                              Woodfield Villiage Green Shopping Center,
58300     Schaumburg          1470 E Golf Road                               Shaumburg           IL          60173         2,255
58800     N. Michigan Avenue  830 North Michigan Avenue                      Chicago             IL          60611         3,265
59100     Saugus              Square One Mall - Route 1                      Saugus              MA          01906         1,853
                              14th Street N.W. (Space T-3 National Press
59300     National Press      Bld)                                           Washington D.C.     DC          20045         1,147

FILENE'S BASEMENT INC.                  DSW INC.


By:                                     By:
    -----------------------------           ------------------------------------
Name:  James A. McGrady                 Name:  Peter Z. Horvath
      ---------------------------             ----------------------------------
Title: Executive Vice President         Title: Executive Vice President
       --------------------------              ---------------------------------

                                             ANNUAL           MONTHLY
 UNIT                 NAME                    FEE              FEE
 ----                 ----                   ------           -------
51000     Connecticut Ave.                  $149,000         $12,417
51100     Towson                             $75,000          $6,250
51200     Rockville                         $147,000         $12,250
51300     Mazza                             $127,000         $10,583
51500     Broadway                          $178,000         $14,833
51600     Watertown                          $54,000          $4,500
51700     Northshore                         $41,000          $3,417
51800     Framingham                         $76,000          $6,333
52500     Hyannis                            $97,000          $8,083
52600     Newton                            $143,000         $11,917
54000     Manhasset                         $115,000          $9,583
54300     Fresh Meadows                      $77,000          $6,417
54400     White Plains                       $97,000          $8,083
54700     Union Square                      $316,000         $26,333
55700     Braintree                          $66,000          $5,500
56400     Homestead                          $84,000          $7,000
57000     Chelsea                           $197,000         $16,417
57100     Lenox                             $124,000         $10,333
58000     State Street                      $211,000         $17,583
58300     Schaumburg                         $72,000          $6,000
58800     N. Michigan Avenue                $278,000         $23,167
59100     Saugus                             $63,000          $5,250
59300     National Press                    $115,000          $9,583
                                          ----------        --------
                                          $2,902,000        $241,833
                                          ==========        ========

ARTICLE 1 - DEFINITIONS:.....................................................       2


Article 2 - The Revolving Credit:............................................      40

  2.1.   Establishment of  Revolving Credit..................................      40
  2.2.   Advances in Excess of Borrowing Base (OverLoans)....................      41
  2.3.   Risks of Value of Collateral........................................      41
  2.4.   Commitment to Make Revolving Credit Loans and Support Letters of
         Credit..............................................................      41
  2.5.   Revolving Credit Loan Requests......................................      42
  2.6.   Suspension of Revolving Credit......................................      43
  2.7.   Making of Revolving Credit Loans....................................      44
  2.8.   SwingLine Loans.....................................................      44
  2.9.   The Loan Account....................................................      45
  2.10.  The Revolving Credit Notes..........................................      46
  2.11.  Payment of The Loan Account.........................................      46
  2.12.  Interest on Revolving Credit Loans..................................      48
  2.13.  Underwriting Fee; Collateral Monitoring Fee.........................      49
  2.14.  Unused Line Fee.....................................................      49
  2.15.  Concerning Fees.....................................................      49
  2.16.  Agent's and Revolving Credit Lenders' Discretion....................      49
  2.17.  Procedures For Issuance of L/Cs and Banker's Acceptances............      49
  2.18.  Fees For L/Cs and Banker's Acceptances..............................      51
  2.19.  Concerning L/C's and Banker's Acceptances...........................      53
  2.20.  Changed Circumstances...............................................      54
  2.21.  Designation of Lead Borrower as Borrowers' Agent....................      55
  2.22.  Revolving Credit Lenders' Commitments...............................      56
  2.23.  Payments............................................................      57

Article 3 - Conditions Precedent:............................................      58

  3.1.   Corporate Due Diligence.............................................      58
  3.2.   Opinions............................................................      58
  3.3.   Additional Documents................................................      58
  3.4.   Officers' Certificates..............................................      58
  3.5.   Representations and Warranties......................................      58
  3.6.   Minimum Day One Availability........................................      58
  3.7.   Senior Non-convertible facility; Intercreditor Agreement............      58
  3.8.   DSW Initial public offering.........................................      59
  3.9.   Repayment of Existing Indebtedness..................................      59
  3.10.  Consents............................................................      59
  3.11.  Appraisals and Commercial Finance Examinations......................      59
  3.12.  Financial Information...............................................      59
  3.13.  Material Agreements.................................................      59
  3.14.  Litigation..........................................................      59
  3.15.  Perfection of Encumbrances..........................................      59
  3.16.  All Fees and Expenses Paid..........................................      60
  3.17.  Cash Management.....................................................      60

  3.18.  Insurance...........................................................      60
  3.19.  No Loan Party in Default............................................      60
  3.20.  No Adverse Change...................................................      60
  3.21.  Certain Changes.....................................................      60
  3.22.  Benefit of Conditions Precedent.....................................      60

Article 4 - General Representations and Warranties:..........................      61

  4.1.   Due Organization. Authorization. No Conflicts.......................      61
  4.2.   Trade Names.........................................................      62
  4.3.   Intellectual Property...............................................      62
  4.4.   Locations...........................................................      62
  4.5.   Encumbrances........................................................      62
  4.6.   Indebtedness........................................................      63
  4.7.   Insurance...........................................................      63
  4.8.   Licenses............................................................      63
  4.9.   Leases..............................................................      63
  4.10.  Requirements of Law.................................................      63
  4.11.  Labor Relations.....................................................      63
  4.12.  Taxes...............................................................      64
  4.13.  No Margin Stock.....................................................      65
  4.14.  Investment and Holding Company Status...............................      65
  4.15.  ERISA...............................................................      66
  4.16.  Hazardous Materials.................................................      66
  4.17.  Litigation..........................................................      67
  4.18.  Adequacy of Disclosure..............................................      67
  4.19.  Unrestricted Subsidiaries...........................................      67
  4.20.  No Bankruptcy Filing................................................      67
  4.21.  Patriot Act.........................................................      67
  4.22.  Foreign Asset Control Regulations...................................      68

Article 5 - GENERAL COVENANTS:...............................................      68

  5.1.   Payment and Performance of Liabilities..............................      68
  5.2.   Due Organization. Authorization. No Conflicts.......................      68
  5.3.   Trade Names.........................................................      69
  5.4.   Locations...........................................................      69
  5.5.   Encumbrances........................................................      70
  5.6.   Indebtedness........................................................      70
  5.7.   Insurance...........................................................      70
  5.8.   Licenses............................................................      71
  5.9.   Requirements of Law.................................................      71
  5.10.  Labor Relations.....................................................      71
  5.11.  Maintain Properties.................................................      71
  5.12.  Taxes...............................................................      72
  5.13.  No Margin Stock.....................................................      72
  5.14.  ERISA...............................................................      72
  5.15.  Hazardous Materials.................................................      72
  5.16.  Dividends. Investments. Corporate Action............................      73

  5.17.  Loans...............................................................      74
  5.18.  Protection of Assets................................................      75
  5.19.  Line of Business; Conduct of Business...............................      76
  5.20.  Affiliate Transactions..............................................      76
  5.21.  Additional Subsidiaries.............................................      77
  5.22.  Further Assurances..................................................      77
  5.23.  Adequacy of Disclosure..............................................      78
  5.24.  No Restrictions on Liabilities......................................      78
  5.25.  Restrictions on Payment of Senior Non-Convertible Facility..........      78
  5.26.  Unrestricted Subsidiaries...........................................      79
  5.27.  Parent's Line of Business...........................................      79

Article 6 - Financial Reporting and Performance Covenants:...................      79

  6.1.   Maintain Records....................................................      79
  6.2.   Access to Records...................................................      80
  6.3.   Prompt Notice to Administrative Agent...............................      81
  6.4.   Weekly Reports......................................................      82
  6.5.   Monthly Reports.....................................................      83
  6.6.   Quarterly Reports...................................................      83
  6.7.   Annual Reports......................................................      83
  6.8.   Officers' Certificates..............................................      84
  6.9.   Inventories, Appraisals, and Audits.................................      84
  6.10.  Additional Financial Information....................................      85
  6.11.  Information Delivered Pursuant to Article 6.........................      86

Article 7 - USE OF COLLATERAL:...............................................      86

  7.1.   Use of  Inventory Collateral........................................      86
  7.2.   Inventory Quality...................................................      87
  7.3.   Adjustments and Allowances..........................................      87
  7.4.   Validity of Accounts................................................      87
  7.5.   Notification to Account Debtors.....................................      87

Article 8 - CASH MANAGEMENT. PAYMENT OF LIABILITIES:.........................      87

  8.1.   Depository Accounts.................................................      87
  8.2.   Credit Card Receipts................................................      88
  8.3.   The Administrative Agent's, Collection, and Operating Accounts .....      89
  8.4.   Proceeds and Collections ...........................................      89
  8.5.   Payment of Liabilities..............................................      90
  8.6.   The Operating Account...............................................      91

Article 9 - GRANT OF SECURITY INTEREST:......................................      91

  9.1.   Grant of Security Interest..........................................      91
  9.2.   Extent and Duration of Security Interest............................      93

Article 10 - COLLATERAL AGENT AS BORROWERS' ATTORNEY-IN-FACT:................      93

  10.1.  Appointment as Attorney-In-Fact.....................................      93
  10.2.  No Obligation to Act................................................      94

Article 11 - Events of Default:..............................................       94

  11.1.  Failure to Pay the Revolving Credit.................................       94
  11.2.  Failure To Make Other Payments......................................       94
  11.3.  Failure to Perform Covenant or Liability (No Grace Period)..........       94
  11.4.  Financial Reporting Requirements....................................       95
  11.5.  Failure to Perform Covenant or Liability (Grace Period).............       95
  11.6.  Misrepresentation...................................................       95
  11.7.  Acceleration of Other Debt. Breach of Lease.........................       95
  11.8.  Default Under Other Agreements......................................       96
  11.9.  Uninsured Casualty Loss.............................................       96
  11.10. Attachment. Judgment. Restraint of Business.........................       96
  11.11. Business Failure....................................................       96
  11.12. Bankruptcy..........................................................       96
  11.13. Termination of Guaranty.............................................       97
  11.14. Challenge to Loan Documents.........................................       97
  11.15. Change in Control...................................................       97

Article 12 - RIGHTS AND REMEDIES UPON DEFAULT:...............................       97

  12.1.  Acceleration........................................................       97
  12.2.  Rights of Enforcement...............................................       97
  12.3.  Sale of Collateral..................................................       98
  12.4.  Occupation of Business Location.....................................       99
  12.5.  Grant of Nonexclusive License.......................................       99
  12.6.  Assembly of Collateral..............................................       99
  12.7.  Rights and Remedies.................................................       99

Article 13 - REVOLVING CREDIT FUNDINGS AND DISTRIBUTIONS:....................       99

  13.1.  Revolving Credit Funding Procedures.................................       99
  13.2.  SwingLine Loans.....................................................      100
  13.3.  Administrative Agent's Covering of Fundings.........................      101
  13.4.  Ordinary Course Distributions.......................................      103

Article 14 - ACCELERATION AND LIQUIDATION:...................................      103

  14.1.  Acceleration Notices................................................      103
  14.2.  Acceleration........................................................      104
  14.3.  Initiation of Liquidation...........................................      104
  14.4.  Actions At and  Following Initiation of Liquidation.................      104
  14.5.  Collateral Agent's Conduct of Liquidation...........................      104
  14.6.  Distribution of Liquidation Proceeds................................      105
  14.7.  Relative Priorities To Proceeds of Liquidation......................      105

Article 15 - THE AGENT:......................................................      106

  15.1.  Appointment of The Agent............................................      106
  15.2.  Responsibilities of Agent...........................................      106
  15.3.  Concerning Distributions By the Agent...............................      107
  15.4.  Dispute Resolution..................................................      108
  15.5.  Distributions of Notices and of Documents...........................      108

  15.6.  Confidential Information............................................      108
  15.7.  Reliance by Agent...................................................      109
  15.8.  Non-Reliance on Agent and Other Revolving Credit Lenders............      109
  15.9.  Indemnification.....................................................      110
  15.10. Resignation of Agent................................................      110
  15.11. Lead Arranger.......................................................      111

Article 16 - ACTION BY AGENT - CONSENTS - AMENDMENTS - WAIVERS:..............      111

  16.1.  Administration of Credit Facilities.................................      111
  16.2.  Actions Requiring or On Direction of Majority Lenders...............      111
  16.3.  Actions Requiring or On Direction of SuperMajority Lenders..........      111
  16.4.  Action Requiring Certain Consent....................................      112
  16.5.  Actions Requiring or Directed By Unanimous Consent..................      113
  16.6.  Actions Requiring SwingLine Lender Consent..........................      114
  16.7.  Actions Requiring Agent's Consent...................................      114
  16.8.  Miscellaneous Actions...............................................      114
  16.9.  Actions Requiring Lead Borrower's Consent...........................      115
  16.10. NonConsenting Revolving Credit Lender...............................      116

Article 17 - ASSIGNMENTS BY REVOLVING CREDIT LENDERS:........................      117

  17.1.  Assignments and Assumptions.........................................      117
  17.2.  Assignment Procedures...............................................      118
  17.3.  Effect of Assignment................................................      118

Article 18 - NOTICES:........................................................      119

  18.1.  Notice Addresses....................................................      119
  18.2.  Notice Given........................................................      120
  18.3.  Wire Instructions. Notice Given.....................................      120

Article 19 - TERM:...........................................................      121

  19.1.  Termination of Revolving Credit.....................................      121
  19.2.  Actions On Termination..............................................      121

Article 20 - GENERAL:........................................................      121

  20.1.  Protection of Collateral............................................      121
  20.2.  Publicity...........................................................      122
  20.3.  Confidentiality.....................................................      122
  20.4.  Successors and Assigns..............................................      122
  20.5.  Severability........................................................      123
  20.6.  Amendments.  Course of Dealing......................................      123
  20.7.  Power of Attorney...................................................      123
  20.8.  Application of Proceeds.............................................      124
  20.9.  Increased Costs.....................................................      124
  20.10. Replacement of Revolving Credit Lender..............................      124
  20.11. Costs and Expenses of the Agent and Issuer..........................      125
  20.12. Copies and Facsimiles...............................................      126
  20.13. Ohio Law............................................................      126
  20.14. Consent to Jurisdiction.............................................      126

20.15. Indemnification.....................................................      126
20.16. Rules of Construction...............................................      127
20.17. Agent's Consent.....................................................      128
20.18. Participations......................................................      128
20.19. Right of Set-Off....................................................      129
20.20. Pledges To Federal Reserve Banks....................................      129
20.21. Maximum Interest Rate...............................................      129
20.22. Waivers.............................................................      129
20.23. Additional Waivers..................................................      130
20.24. Patriot Act Notices.................................................      131
20.25. Existing Loan Agreement Amended and Restated........................      131

1.1         :     Existing L/Cs and Banker's Acceptances
1.3         :     Intercompany Notes
1.4         :     Exempt DDA
1.5         :     Unrestricted Subsidiaries
1.6         :     Existing Investments
1.7         :     Permitted Dispositions
2.5         :     Form of Loan Request
2.8(c)      :     SwingLine Note
2.10        :     Revolving Credit Note
2.22        :     Revolving Credit Lenders' Commitments
3.3         :     Additional Documents
4.1         :     Corporate Information
4.2         :     Trade Names
4.4         :     Locations, Leases, and Landlords
4.5(a)      :     Encumbrances
4.5(b)      :     Consigned Property
4.6         :     Indebtedness
4.7         :     Insurance Policies
4.8         :     Licenses
4.9         :     Capital Leases
4.11        :     Labor Contracts
            :     Taxes
4.16        :     Hazardous Materials
4.17        :     Litigation
5.17(e)     :     Existing Loans
5.17(f)     :     Intercompany Loans
6.4         :     Borrowing Base Certificate
6.5         :     Monthly Financial Reporting Requirements
8.1         :     DDA's.
            :     Credit Card Arrangements
8.3         :     Administrative Agent's Accounts; Collection
                  Account Banks; Operating Accounts
17.2        :     Assignment / Assumption

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

As of 12:01 a.m. July 5, 2005

THIS AGREEMENT is made between

National City Business Credit, Inc., an Ohio corporation with offices at 1965 E. Sixth Street, Cleveland, Ohio 44114, as administrative agent (in such capacity, herein the "ADMINISTRATIVE AGENT"), for the ratable benefit of the "REVOLVING CREDIT LENDERS", who are, at present, those financial institutions identified on the signature pages of this Agreement and who in the future are those Persons (if any) who become "Revolving Credit Lenders" in accordance with the provisions hereof;

National City Business Credit, Inc., as Collateral Agent (in such capacity, herein the "COLLATERAL AGENT"), for the ratable benefit of the Revolving Credit Lenders,

and

The Revolving Credit Lenders;

and

Value City Department Stores LLC (in such capacity, the "LEAD BORROWER"), an Ohio limited liability company with its principal executive offices at 3241 Westerville Road, Columbus, Ohio 43224-3751, as agent for the following (individually, a "BORROWER" and collectively, the "BORROWERS"):

Said Value City Department Stores LLC; and

Gramex Retail Stores, Inc. ("GRAMEX"), a Delaware corporation with its principal executive offices at 3241 Westerville Road, Columbus, Ohio 43224; and

Filene's Basement, Inc. ("FILENE'S"), a Delaware corporation with its principal executive offices at 3241 Westerville Road, Columbus, Ohio 43224-3751; and

Value City of Michigan, Inc. ("VC MICHIGAN"), a Michigan corporation with its principal executive offices at 36901 Warren Road, Westland, Michigan 48185; and

GB Retailers, Inc. ("GBR"), a Delaware corporation with its principal executive offices at 3241 Westerville Road, Columbus, Ohio 43224; and

Retail Ventures Jewelry, Inc. ("JEWELRY"), an Ohio corporation with its principal executive offices at 3241 Westerville Road, Columbus, Ohio 43224

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

WITNESSETH:

WHEREAS, the Lead Borrower and certain other affiliated Persons have entered into a Loan and Security Agreement dated as of June 11, 2002 with the Administrative Agent, the Revolving Credit Lenders party thereto and National City Business Credit, Inc. and Fleet Retail Group, Inc., as collateral agents for the Revolving Credit Lenders (as amended and in effect through the Effective Date, the "EXISTING LOAN AGREEMENT"); and

WHEREAS, in connection with an initial public offering of the capital stock of DSW, the Revolving Credit Lenders have agreed to release DSW and DSW Shoe from their respective obligations under the Existing Loan Agreement and to otherwise amend the provisions of the Existing Loan Agreement; and

WHEREAS, the Borrowers, the Revolving Credit Lenders and the Agent desire to amend and restate the Existing Loan Agreement as provided herein.

NOW THEREFORE, it is hereby agreed that the Existing Loan Agreement is hereby amended and restated as follows:

ARTICLE 1 - DEFINITIONS:

As used herein, the following terms have the following meanings or are defined in the section of this Agreement so indicated:

"ACCELERATION": The making of demand or declaration that any Indebtedness, not otherwise due and payable, is due and payable. Derivations of the word "Acceleration" (such as "Accelerate") are used with like meaning in this Agreement.

"ACCELERATION NOTICE": Written notice as follows:

(a) From the Administrative Agent to the Revolving Credit Lenders, as provided in Section 14.1(a).

(b) From the SuperMajority Lenders to the Administrative Agent, as provided in Section 14.1(b).

"ACCOUNT DEBTOR": Has the meaning given that term in the UCC.

"ACCOUNTS": Include, without limitation, "accounts" as defined in the UCC, and also all: accounts, accounts receivable, receivables, and rights to payment (whether or not earned by performance) for: property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of; services rendered or to be rendered; a policy of insurance issued or to be issued; a secondary obligation incurred or to be incurred; arising out of the use of a credit or charge card or information contained on or used with that card; winnings in a lottery or other game of chance; and also all Inventory which gave rise thereto, and all rights associated with such Inventory, including the right of stoppage in transit; all reclaimed,

returned, rejected or repossessed Inventory (if any) the sale of which gave rise to any Account.

"ACH": Automated clearing house.

"ACQUISITION": The purchase or acquisition of all or substantially all of the assets of any Person, the purchase of a controlling equity interest in any Person, or the merger or consolidation of any Person with any other Person, in any transaction or group of transactions which are part of a common plan.

"ADMINISTRATIVE AGENT": NCBC, or its successors or assigns, in its capacity as administrative agent for the Revolving Credit Lenders hereunder.

"ADMINISTRATIVE AGENT'S ACCOUNT": Is defined in Section 8.3.

"ADMINISTRATIVE AGENT'S COVER": Is defined in Section 13.3(c)(i).

"AFFILIATE": The following:

(a) With respect to any Person, any other Person that directly or, alone or with a group of related Persons whose interests taken as a whole, indirectly through one of more intermediaries, Controls, is Controlled by, or is under common Control with, such Person. Notwithstanding anything to the contrary herein contained, in no event shall the Agent, the Issuer, or any Revolving Credit Lender be considered an "Affiliate" of a Loan Party.

(b) Any Person: which is a parent, brother-sister or Subsidiary, of a Borrower; whose enterprise's tax returns or financial statements are consolidated with those of a Borrower; which is a member of the same controlled group of corporations (within the meaning of Section 1563(a)(1), (2) and (3) of the Internal Revenue Code of 1986, as amended from time to time) of which any Borrower is a member; or Controls or is Controlled by any Borrower.

(c) With respect to the Loan Parties, without limiting the provisions of clauses (a) and (b) hereof, "Affiliate" includes Schottenstein Stores Corporation.

"AGENT": Collectively, the Administrative Agent and the Collateral Agent.

"AGENT'S RIGHTS AND REMEDIES": Is defined in Section 12.7.

"APPLICABLE LAW": As to any Person: (i) All statutes, rules, regulations, orders, or other requirements having the force of law and (ii) all court orders and injunctions, arbitrator's decisions, and/or similar rulings, in each instance ((i) and (ii)) of or by any federal, state, municipal, and other governmental authority, or court, tribunal, panel, or other body which has or claims jurisdiction over such Person, or any property of such Person, or of any other Person for whose conduct such Person would be responsible.

"APPLICABLE MARGIN": The following percentages for Base Margin Loans and LIBOR Loans based upon the following criteria:

LEVEL       EXCESS AVAILABILITY          APPLICABLE       APPLICABLE MARGIN
                                         MARGIN FOR       FOR LIBOR LOANS
                                         BASE MARGIN
                                         LOANS
-----       -------------------          ----------       -----------------
1           Greater than $160,000,000    0%               1.50%
2           Greater than $100,000,000,   0%               1.75%
            but less than or equal to
            $160,000,000
3           Greater than $60,000,000,    0.25%            2.00%
            but less than or equal to
            $100,000,000
4           Less than or equal to        0.50%            2.25%
            $60,000,000

The Applicable Margin shall initially be established at Level 2. Thereafter, the Applicable Margin shall be adjusted quarterly on the first day of each calendar quarter, commencing January 1, 2006, based upon the Average Excess Availability during the prior quarter, provided that in no event shall the Applicable Margin be established at Level 1 during the first six (6) months subsequent to the Effective Date. Upon the occurrence and during the continuance of a Specified Event of Default, the Applicable Margin may, at the option of the Agent, be immediately increased to the percentages set forth in Level 4 (even if the Excess Availability requirements for another Level have been met) and interest shall be determined in the manner set forth in Section 2.12(g).

"APPRAISED INVENTORY LIQUIDATION VALUE": The product of (a) the Cost of Eligible Inventory (net of Inventory Reserves) multiplied by (b) that percentage, determined from the then most recent appraisal of each Division's Inventory undertaken initially at the Lead Borrower's request, and subsequently at the request of the Collateral Agent, to reflect the appraiser's estimate of the net recovery on such Division's Inventory in the event of an in-store liquidation of that Inventory.

"APPRAISED INVENTORY PERCENTAGE": 87.5%.

"ASSIGNING REVOLVING CREDIT LENDER": Is defined in Section 17.1(a).

"ASSIGNMENT AND ACCEPTANCE": Is defined in Section 17.2.

"AUTHORIZED OFFICER": Is defined in Section 6.8.

"AVAILABILITY": Gross Availability Minus the Excess Availability Reserve.

"AVAILABILITY RESERVES": Without duplication, such reserves as the Collateral Agent from time to time determines in the Collateral Agent's reasonable, good faith discretion as being appropriate to reflect the impediments to the Collateral Agent's ability to realize upon the Collateral. The Collateral Agent shall furnish the Lead Borrower with written notice two (2) Business Days prior to imposing or changing any Availability Reserve (unless a Specified Event of Default then exists and is continuing, in which event no prior notice shall be required). Without limiting the generality of the foregoing, Availability Reserves may include (but are not limited to) reserves based on the following:

(i) rent (but only if a landlord's waiver, acceptable to the Collateral Agent, has not been received by the Collateral Agent).

(ii) Customer Credit Liabilities.

(iii) taxes and other governmental charges, including, ad valorem, personal property, and such other taxes which are reasonably likely to have priority over the Collateral Interests of the Collateral Agent in the Collateral.

(iv) L/C Landing Costs.

(v) Hedge Agreements.

Without limiting the rights of the Collateral Agent to establish or modify Availability Reserves, the initial Availability Reserves on the Effective Date shall be the following:

(a) gift certificates and merchandise credits (in an amount equal to fifty percent (50%) of the outstanding gift certificates and merchandise credits reflected in the Borrowers' financial statements (which amount shall be updated no less frequently than every thirty (30) days and which financial statements will be maintained consistently with past practices)).

(b) landlord lien reserve equal to two months' rent for all stores located in Pennsylvania and Virginia.

(c) layaway deposits (in an amount equal to one hundred percent (100%) of the outstanding layaway deposits reflected in the Borrowers' financial statements (which amount shall be updated no less frequently than every thirty (30) days and which financial statements will be maintained consistently with past practices)).

(d) Hedge Agreements.

"AVERAGE EXCESS AVAILABILITY": For any period, the sum of Excess Availability for each day comprising such period divided by the number of days in such period.

"BANKER'S ACCEPTANCE": A time draft or bill of exchange relating to a documentary letter of credit which has been accepted by the Issuer. Without limitation, Existing Banker's Acceptances shall be deemed to be Banker's Acceptances issued under this Agreement and shall be entitled to all of the benefits hereof.

"BANKER'S ACCEPTANCE FEES": The fees payable in respect of Banker's Acceptances pursuant to Section 2.18.

"BANKRUPTCY CODE": Title 11, U.S.C., as amended from time to time.

"BASE": For any day, a rate per annum equal to the higher of (a) the rate of interest which is established from time to time by NCB at its principal office in Cleveland, Ohio as its "prime rate" in effect, such rate to be adjusted automatically, without notice, as of the opening of business on the effective date of any change in such rate (it being agreed that (i) such rate is not necessarily the lowest rate of interest then available from NCB on fluctuating rate loans, and (ii) such rate may be established by NCB by public announcement or otherwise), and (b) the Federal Funds Effective Rate in effect on such day plus one-half of one percent (0.50%) per annum.

"BASE MARGIN LOAN": Each Revolving Credit Loan while bearing interest at the Base Margin Rate.

"BASE MARGIN RATE": That per annum rate which is the aggregate of the Base plus the Applicable Margin for Base Margin Loans.

"BORROWER" and "BORROWERS": Is defined in the Preamble.

"BORROWING BASE": The aggregate of the following with respect to all Borrowers:

(a) The face amount of Eligible Credit Card Receivables multiplied by the Credit Card Advance Rate.

Plus

(b) The lesser of (a) the Cost of Eligible Inventory (net of Inventory Reserves) multiplied by the Inventory Advance Rate or (b) the Appraised Inventory Percentage of the Appraised Inventory Liquidation Value.

"BORROWING BASE CERTIFICATE": Is defined in Section 6.4.

"BUSINESS DAY": Any day other than (a) a Saturday or Sunday; (b) any day on which banks in Cleveland, Ohio, generally are not open to the general public for the purpose of conducting commercial banking business; (c) a day on which the

principal office of the Administrative Agent is not open to the general public to conduct business; or (d) when used in connection with a LIBOR Loan, any day on which banks are not open for dealings in dollar deposits in the London interbank market.

"BUSINESS PLAN": The business plan for the Loan Parties fiscal years 2005 through and including 2010 dated April 19, 2005, as set forth in that certain confidential side letter from the Lead Borrower to the Administrative Agent.

"CAPITAL EXPENDITURES": The expenditure of funds or the incurrence of liabilities which may be capitalized in accordance with GAAP.

"CAPITAL LEASE": Any lease which may be capitalized in accordance with
GAAP.

"CASH CONTROL EVENT": Either (i) an Event of Default has occurred and is continuing, or (ii) the Average Excess Availability for any five (5) consecutive Business Days is less than Forty-Five Million Dollars ($45,000,000). For purposes hereof, the occurrence of a Cash Control Event shall be deemed continuing notwithstanding that Average Excess Availability may thereafter exceed the amount set forth in the preceding sentence unless and until Average Excess Availability exceeds such amounts for ninety (90) consecutive Business Days, in which case a Cash Control Event shall no longer be deemed to be continuing for purposes hereof; provided that a Cash Control Event shall be deemed continuing (even if Average Excess Availability exceeds the required amounts for ninety (90) consecutive Business Days) if a Cash Control Event has occurred and been discontinued on one (1) occasion during the preceding twelve month period.

"CCM": Cerberus Partners, L.P., a Delaware limited partnership with its principal office at 450 Park Avenue, New York, New York 10022.

"CCM TERM LOAN FACILITIES": The term loan facilities entered into among the Borrowers and CCM, as agent, pursuant to a Financing Agreement dated June 11, 2002, in the aggregate principal amount of $100,000,000.00, as amended and in effect.

"CHANGE IN CONTROL": The occurrence of any of the following:

(a) The acquisition, by any group of Persons (within the meaning of the Securities Exchange Act of 1934, as amended) or by any Person (other than by (x) a Person Controlled by Schottenstein Stores Corporation, or (y) one or more Family Trusts) of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission) of 25% or more of the issued and outstanding capital stock of the Parent having the right, under ordinary circumstances, to vote for the election of directors of the Parent, excluding from the foregoing any acquisition pursuant to warrants issued under the exercise of conversion rights under the Senior Non-Convertible Facility.

(b) Other than as a result of the exercise by CCM of board representation rights under the Senior Non-Convertible Facility, more than thirty percent (30%) of the Persons who were directors of the Parent on the first day of any period consisting of twelve (12) consecutive calendar months (the first of which twelve (12) month periods commencing with the first day of May, 2005), cease to be directors of the Parent for any reason, other than death, disability, or replacement (in the ordinary course of business and not as a result of any change in the equity ownership of the Parent) by other Persons nominated by the nominating committee of the board of directors of the Parent.

(c) The failure of the Parent to own, directly or indirectly, 95% of the capital stock of each of the other Loan Parties.

(d) The failure of Schottenstein Stores Corporation or one or more Family Trusts to possess, directly or indirectly, the power to cause the direction of the management and policies of the Parent and the Borrowers.

"CHATTEL PAPER": Has the meaning given that term in the UCC.

"CLASS A COMMON SHARES" has the meaning set forth for such term in the Articles of Incorporation of DSW as in effect on the Effective Date.

"CLASS B COMMON SHARES" has the meaning set forth for such term in the Articles of Incorporation of DSW as in effect on the Effective Date.

"CLOSING DATE": June 11, 2002.

"COLLATERAL": Is defined in Section 9.1.

"COLLATERAL AGENT": NCBC, or its successors or assigns, in its capacity as Collateral Agent for the Revolving Credit Lenders hereunder.

"COLLATERAL INTEREST": Any interest in property to secure an obligation, including, without limitation, a security interest, mortgage, and deed of trust.

"COLLATERAL MONITORING FEE": Is defined in Section 2.13.

"COLLECTION ACCOUNT": Any DDA into which the proceeds of Collateral are transferred and concentrated, including, without limitation, transfers from other DDAs, credit card processors, checks, and accounts receivables. The Collection Accounts as of the Effective Date are set forth on EXHIBIT 8.3 hereto.

"COLLECTION ACCOUNT AGREEMENT": An agreement, in form satisfactory to the Collateral Agent, which agreement recognizes the Collateral Agent's Collateral Interest in the contents of the DDA which is the subject of such agreement and agrees that, after and during the continuance of a Cash Control Event, such contents shall be transferred only to the Administrative Agent's Account or as otherwise instructed by the Administrative Agent.

"COMMERCIAL TORT CLAIM": Has the meaning given that term in the UCC.

"COMPETITIVE BUSINESS": Any business or enterprise consisting of any of the following:

(a) Operation of off-price discount department stores.

(b) Operation of retail furniture stores and related accessories.

(c) Operation of designer and name brand shoe stores.

(d) Operation of licensed shoe departments.

(e) Furniture manufacturing.

(f) Bedding manufacturing.

"CONSENT": Actual consent given by the Revolving Credit Lender from whom such consent is sought; or the passage of seven (7) Business Days from receipt of written notice to a Revolving Credit Lender from the Agent of a proposed course of action to be followed by the Agent without such Revolving Credit Lender's giving the Agent written notice of that Revolving Credit Lender's objection to such course of action, provided that the Agent may rely on such passage of time as consent by a Revolving Credit Lender only if such written notice states that consent will be deemed effective if no objection is received within such time period.

"CONSOLIDATED": When used to modify a financial term, test, statement, or report, refers to the application or preparation of such term, test, statement or report (as applicable) based upon the consolidation, in accordance with GAAP, of the financial condition or operating results of the Parent and its Subsidiaries.

"CONTROL": The possession, direct or indirect, of the power to cause the direction of the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise. A Person shall be deemed to have control of another Person if it is a "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 of the Securities Exchange Act of 1934, as amended) or a member of a "group" that is the beneficial owner, directly or indirectly, of 20% or more of the voting stock or equity interest in such Person. The terms "Controlled" and "Controlling" as used herein are intended to have the same meaning as "Control."

"COST": The lower of cost or market, determined in each case in accordance with GAAP.

"COSTS OF COLLECTION": Includes, without limitation, all reasonable attorneys' fees and reasonable out-of-pocket expenses incurred by the Agent's and Issuer's attorneys, and all reasonable out-of-pocket costs incurred by the Agent and the Issuer in the administration of the Liabilities and/or the Loan Documents, including, without limitation, reasonable costs and expenses associated with travel on behalf of the Agent and Issuer, where such costs and expenses are related to or

in respect of the Agent's and Issuer's: administration and management of the Liabilities; negotiation, documentation, and amendment of any Loan Document; or efforts to preserve, protect, collect, or enforce the Collateral, the Liabilities, and/or the Agent's Rights and Remedies and/or any of the rights and remedies of the Agent and Issuer against or in respect of any guarantor or other Person liable in respect of the Liabilities (whether or not suit is instituted in connection with such efforts). "Costs of Collection" also includes the reasonable fees and expenses of Lenders' Special Counsel. The Costs of Collection are Liabilities, and at the Administrative Agent's option may bear interest at the then effective Base Margin Rate after such time as they have been added to the Loan Account.

"CREDIT CARD ADVANCE RATE": 85%

"CUSTOMER CREDIT LIABILITY": Gift certificates, customer deposits, merchandise credits, layaway obligations, frequent shopping programs, and similar liabilities of any Borrower to its retail customers and prospective customers.

"DDA": Any checking or other demand daily depository account maintained by any Borrower other than any Exempt DDA.

"DEFAULT": Any occurrence, circumstance, or state of facts with respect to a Borrower which (a) is an Event of Default; or (b) would become an Event of Default if any requisite notice were given and/or any requisite period of time were to run and such occurrence, circumstance, or state of facts were not cured within any applicable grace period.

"DELINQUENT REVOLVING CREDIT LENDER": Is defined in Section 13.3(c).

"DEPOSIT ACCOUNT": Has the meaning given that term in the UCC and also includes all demand, time, savings, passbook, or similar accounts maintained with a bank.

"DIVISION(S)": The various business segments of the Borrowers, such being the Filene's Business and the Value City Business.

"DOCUMENTS": Has the meaning given that term in the UCC.

"DOCUMENTS OF TITLE": Has the meaning given that term in the UCC.

"DSW": DSW Inc., an Ohio corporation with its principal executive offices at 4150 East Fifth Avenue, Columbus, Ohio 43219.

"DSW COMMON STOCK" means the Capital Stock of DSW consisting of Class A Common Shares and Class B Common Shares.

"DSW SHOE": DSW Shoe Warehouse, Inc., a Missouri corporation with its principal executive offices at 4150 East Fifth Avenue, Columbus, Ohio 43219.

"EFFECTIVE DATE": The date upon which the conditions precedent set forth in Article 3 hereof have been satisfied or waived and the first Revolving Credit Loans are to be made and L/Cs to be issued hereunder.

"ELIGIBLE ASSIGNEE": A bank, insurance company, or company engaged in the business of making commercial loans having a combined capital and surplus in excess of $500,000,000 or any domestic Affiliate of any Revolving Credit Lender, or any Person to whom a Revolving Credit Lender assigns its rights and obligations under this Agreement as part of a programmed assignment and transfer of such Revolving Credit Lender's rights in and to a material portion of such Revolving Credit Lender's portfolio of asset based credit facilities. In no event shall an "Eligible Assignee" include a Person who is engaged in a Competitive Business with any Loan Party, and as long as Schottenstein Stores Corporation remains in Control of the Borrowers, an "Eligible Assignee" shall in no event include a Person which is engaged in a Competitive Business or a Related Business with Schottenstein Stores Corporation.

"ELIGIBLE CREDIT CARD RECEIVABLES": Accounts due on a non-recourse basis from major or private label credit card processors, which have been outstanding for less than five (5) Business Days.

"ELIGIBLE INVENTORY": Such of the Borrowers' Inventory, inclusive of Eligible L/C Inventory, at such locations, and of such types, character, qualities and quantities, as the Collateral Agent in its reasonable, good faith discretion from time to time determines to be acceptable for borrowing, as to which Inventory, the Collateral Agent has a perfected security interest which is prior and superior to all security interests, claims, and Encumbrances. Without limiting the foregoing, Inventory acquired in a Permitted Acquisition (other than a Permitted Acquisition involving the merger of one or more Loan Parties) shall not be deemed Eligible Inventory unless the Collateral Agent otherwise agrees.

"ELIGIBLE L/C INVENTORY": Without duplication of other Eligible Inventory, Inventory not yet delivered to the Borrowers, the purchase of which is supported by a documentary L/C or Banker's Acceptance then having an initial expiry of sixty (60) or less days, provided that

(a) Such Inventory is of such types, character, qualities and quantities (net of Inventory Reserves) as the Collateral Agent in its reasonable, good faith discretion from time to time determines to be eligible for borrowing and it would otherwise constitute Eligible Inventory; and

(b) The documentary L/C supporting such purchase names the Collateral Agent as consignee of the subject Inventory or the Collateral Agent has control over the documents which evidence ownership of the subject Inventory (such as by the providing to the Collateral Agent of a customs brokers agreement in form reasonably satisfactory to the Collateral Agent).

"EMPLOYEE BENEFIT PLAN": An employee pension benefit plan that is covered by Title IV of ERISA or is subject to the minimum finding standards under Section 412 of the Internal Revenue Code of 1986, as amended from time to time, and as to which a Borrower or any ERISA Affiliate may have any liability.

"ENCUMBRANCE": Each of the following:

(a) A Collateral Interest or agreement to create or grant a Collateral Interest; a security interest; the interest of a lessor under a Capital Lease; conditional sale or other title retention agreement; sale of accounts receivable or chattel paper; or other arrangement pursuant to which any Person is entitled to any preference or priority with respect to the property or assets of another Person or the income or profits of such other Person; each of the foregoing whether consensual or non-consensual and whether arising by way of agreement, operation of law, legal process or otherwise.

(b) The filing of any financing statement under the UCC or comparable law of any jurisdiction, unless such financing statement is terminated promptly upon any Loan Party's knowledge thereof.

"END DATE": The date upon which all of the following conditions are met:
(a) all payment Liabilities described in Section 19.2(a) have been paid in full (b) satisfactory arrangements with respect to L/Cs and Banker's Acceptances have been made in accordance with the provisions of Section 19.2(b), and (c) all obligations of any Revolving Credit Lender to make loans and advances and to provide other financial accommodations to the Borrowers hereunder shall have been irrevocably terminated.

"ENVIRONMENTAL ACTIONS": Any complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other communication from any Person or Governmental Authority involving violations of Environmental Laws or Releases of Hazardous Materials (i) from any assets, properties or businesses owned or operated by any Loan Party or any of its Subsidiaries or any predecessor in interest; or (ii) onto any facilities which received Hazardous Materials generated by any Loan Party or any of its Subsidiaries or any predecessor in interest.

"ENVIRONMENTAL LAWS": The Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.Section 9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C.Section 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C.Section 6901, et seq.), the Federal Clean Water Act (33 U.S.C.Section 1251 et seq.), the Clean Air Act (42 U.S.C.Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.Section 2601 et seq.) and the Occupational Safety and Health Act (29 U.S.C.Section 651 et seq.), as such laws may be amended or otherwise modified from time to time, and any other present or future federal, state, local or foreign statute, ordinance, rule, regulation, order, judgment, decree, permit, license or other binding determination of any Governmental Authority imposing liability or establishing standards of conduct

for protection of the environment or other government restrictions relating to the protection of the environment or the Release, deposit or migration of any Hazardous Materials into the environment.

"ENVIRONMENTAL LIABILITIES AND COSTS": All liabilities, monetary obligations, remedial actions, losses, damages, punitive damages, consequential damages, treble damages, reasonable costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and consultants and costs of investigations and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any Governmental Authority or any third party, and which relate to any environmental condition or a Release of Hazardous Materials from or onto (i) any property presently or formerly owned by any Loan Party or any of its Subsidiaries or (ii) any facility which received Hazardous Materials generated by any Loan Party or any of its Subsidiaries.

"ENVIRONMENTAL LIEN": Any Lien in favor of any Governmental Authority for Environmental Liabilities and Costs.

"EQUIPMENT": Includes, without limitation, "equipment" as defined in the UCC, and also all furniture, store fixtures, motor vehicles, rolling stock, machinery, office equipment, plant equipment, tools, dies, molds, and other goods, property, and assets which are used and/or were purchased for use in the operation or furtherance of a Borrowers' business, and any and all accessions or additions thereto, and substitutions therefor.

"ERISA": The Employee Retirement Income Security Act of 1974, as amended.

"ERISA AFFILIATE": Any Person which is under common control with a Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes any Borrower and which would be treated as a single employer under Section 414 of the Internal Revenue Code of 1986, as amended from time to time.

"EUROCURRENCY RESERVE PERCENTAGE": For any Interest Period with respect to a LIBOR Loan, as of any date of determination, the aggregate of the then stated maximum reserve percentages (including any marginal, special, emergency or supplemental reserves), expressed as a decimal, applicable to such Interest Period (if more than one such percentage is applicable, the daily average of such percentages for those days in such Interest Period during which any such percentages shall be so applicable) by the Board of Governors of the Federal Reserve System, any successor thereto, or any other banking authority, domestic or foreign, to which the Administrative Agent or any Revolving Credit Lender may be subject in respect of eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board) or in respect of any other category of liabilities including deposits by reference to which the rate of interest on LIBOR Loans is determined or any category or extension of credit or other assets that include LIBOR Loans, as defined in such regulations. For purposes hereof, such reserve requirements shall include, without limitation, those imposed under Regulation D of the Federal Reserve Board and

the LIBOR Loans shall be deemed to constitute Eurocurrency Liabilities subject to reserve requirements without benefit of credits for proration, exceptions or offsets which may be available to any Revolving Credit Lender under Regulation D.

"EVENTS OF DEFAULT": Is defined in Article 11. An "Event of Default" shall be deemed to have occurred and to be continuing unless and until that Event of Default has been duly waived by the Administrative Agent in writing or cured to the satisfaction of the Administrative Agent.

"EXCESS AVAILABILITY": As of any date of determination, Gross Availability less all then held checks, accounts payable which are beyond customary payment terms consistent with past practice (other than accounts payable which are being disputed in good faith and for which the Borrowers have adequate reserves), and overdrafts (other than daylight overdrafts, as defined in the Federal Reserve Daylight Credit Policies in effect from time to time).

"EXCESS AVAILABILITY RESERVE": $27,500,000.

"EXCLUDED PROPERTY": Shall mean the following:

(a) the Equipment that is subject to a "purchase money security interest", as such term is now or hereafter defined in the UCC, which (x) constitutes a Permitted Encumbrance under this Agreement and (y) prohibits the creation by a Loan Party of a junior security interest therein, unless the holder thereof has consented to the creation of such a junior security interest; or

(b) any General Intangibles, other than Payment Intangibles, if and only to the extent that (i) in the case of any such General Intangible, (x) any contract evidencing such General Intangible contains a valid and effective contractual restriction or limitation which prohibits the grant or creation of a security interest therein, or (y) a valid and effective restriction or limitation imposed by applicable law, regulation, rule, order or other directive of any governmental body, agency or authority, or the order of any court of competent jurisdiction, prohibits the grant or creation of a security interest in such General Intangible, or (ii) in the case of any such General Intangible, such General Intangible would be subject to loss or forfeiture upon the grant or creation of a security interest therein by reason of (x) a valid and effective contractual restriction or limitation contained in any contract evidencing such General Intangible, or (y) a valid and effective restriction or limitation imposed by applicable law, regulation, rule, order or other directive of any governmental body, agency or authority, or the order of any court of competent jurisdiction; or

(c) Inventory or other property held pursuant to consignment (other than between Loan Parties) arrangements in which a Borrower is the consignee to the extent that the consignor has properly perfected its interest therein; or

(d) all motor vehicles owned by any Loan Party;

(e) any Exempt DDA; or

(f) all capital stock of DSW, DSW Shoe or any Subsidiary of either of the foregoing,

provided that the Proceeds realized from any of the foregoing shall not be deemed Excluded Property but shall constitute Collateral.

"EXEMPT DDA": Those depository accounts described on EXHIBIT 1.4 hereto, and, in addition, any depository account maintained by any Borrower, the only contents of which may be transfers from the Operating Account and actually used solely (i) for petty cash purposes; (ii) for payroll; (iii) for charitable contributions; or (iv) for medical, pension, benefits, VEBA, employees, taxes, stock options and like special purpose accounts.

"EXISTING BANKER'S ACCEPTANCES": Those Banker's Acceptances described on EXHIBIT 1.1 hereto which have been issued by NCB under the Borrowers' existing credit facility with, among others, NCB.

"EXISTING L/CS": Those letters of credit described on EXHIBIT 1.1 hereto which have been issued by NCB under the Borrowers' Existing Loan Agreement with, among others, NCB.

"EXISTING LOAN AGREEMENT": Is defined in the Recitals.

"FACILITY GUARANTEE": The Amended and Restated Guaranty executed by the Facility Guarantors in favor of the Agent, the Issuer and the Revolving Credit Lenders.

"FACILITY GUARANTORS": The Parent, each Borrower, and all other Subsidiaries of the Parent now existing or hereafter created, other than DSW, DSW Shoe, any direct or indirect Subsidiary of DSW or DSW Shoe, and the Unrestricted Subsidiaries.

"FACILITY GUARANTORS COLLATERAL DOCUMENTS": All security agreements, mortgages, pledge agreements, deeds of trust, and other instruments, documents or agreements executed and delivered by any Facility Guarantor to secure the Facility Guarantee.

"FAMILY TRUST": One or more trusts established for the benefit of any of Jay L. Schottenstein, Susan S. Diamond, Ann S. Deshe, Lori Schottenstein, Geraldine Schottenstein, any of their respective spouses, children or lineal descendants, or any Person Controlled by any such trust or trusts.

"FARM PRODUCTS": Has the meaning given that term in the UCC.

"FEDERAL FUNDS EFFECTIVE RATE": For any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the

Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (i) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the immediately preceding Business Day as so published on the next succeeding Business Day, and (ii) if such rate is not so published for any Business Day, the Federal Funds Effective Rate for such day shall be the average of quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by the Administrative Agent.

"FEE LETTER": That letter dated ____________, 2005 and styled "Fee Letter" between the Lead Borrower and the Administrative Agent, as such letter may from time to time be amended.

"FILENE'S": Has the meaning given that term in the Preamble hereto.

"FILENE'S AVAILABILITY": The lesser of:

(a) the result of the following:

(i) The lesser of

(A) The Revolving Credit Ceiling

or

(B) The Filene's Borrowing Base

Minus

(ii) The aggregate unpaid balance of the Loan Account attributable to Revolving Credit Loans made to Filene's.

Minus

(iii) The aggregate undrawn Stated Amount of all then outstanding L/Cs and Banker's Acceptances issued for the account of Filene's.

Minus

(iv) The aggregate of the Availability Reserves attributable to Filene's.

or

(b) Availability.

"FILENE'S BORROWING BASE": The aggregate of the following:

(a) The face amount of Eligible Credit Card Receivables of Filene's multiplied by the Credit Card Advance Rate.

Plus

(b) The lesser of (a) the Cost of Eligible Inventory (net of Inventory Reserves) of Filene's multiplied by the Inventory Advance Rate or (b) the Appraised Inventory Percentage of the Appraised Inventory Liquidation Value of the Inventory of Filene's.

"FILENE'S BUSINESS": The businesses operated by Filene's Basement, Inc.

"FISCAL": When followed by "month", "quarter" or "year", the relevant fiscal period based on the Borrowers' fiscal year and accounting conventions.

"FIXTURES": Has the meaning given that term in the UCC.

"GAAP": Generally accepted accounting principles in effect from time to time in the United States, applied on a consistent basis, provided that "GAAP" shall mean generally accepted accounting principles consistent with those used in the preparation of the financial statements described herein.

"GBR": Has the meaning given that term in the Preamble hereto.

"GENERAL INTANGIBLES": Includes, without limitation, "general intangibles" as defined in the UCC; and also all: rights to payment for credit extended; deposits (other than DDAs); amounts due to any Borrower; credit memoranda in favor of any Borrower; warranty claims; tax refunds and abatements; insurance refunds and premium rebates; all means and vehicles of investment or hedging, including, without limitation, options, warrants, and futures contracts; records; customer lists; telephone numbers; goodwill; causes of action; judgments; payments under any settlement or other agreement; literary rights; rights to performance; royalties; license and/or franchise fees; rights of admission; licenses; franchises; license agreements, including all rights of any Borrower to enforce same; permits, certificates of convenience and necessity, and similar rights granted by any governmental authority; patents, patent applications, patents pending, and other intellectual property; internet addresses and domain names; developmental ideas and concepts; proprietary processes; blueprints, drawings, designs, diagrams, plans, reports, and charts; catalogs; manuals; technical data; computer software programs (including the source and object codes therefor), computer records, computer software, rights of access to computer record service bureaus, service bureau computer contracts, and computer data; tapes, disks, semi-conductors chips and printouts; trade secrets rights, copyrights, mask work rights and interests, and derivative works and interests; user, technical reference, and other manuals and materials; trade names, trademarks, service marks, and all goodwill relating thereto; applications for registration of the foregoing; and all other general intangible property of any Borrower in the nature of intellectual property; proposals; cost estimates, and reproductions on paper, or otherwise, of any and all

concepts or ideas, and any matter related to, or connected with, the design, development, manufacture, sale, marketing, leasing, or use of any or all property produced, sold, or leased, by any Borrower or credit extended or services performed, by any Borrower, whether intended for an individual customer or the general business of any Borrower, or used or useful in connection with research by any Borrower.

"GOODS": Has the meaning given that term in the UCC, and also includes all things movable when a security interest therein attaches and also all computer programs embedded in goods and any supporting information provided in connection with a transaction relating to the program if (i) the program is associated with the goods in such manner that it customarily is considered part of the goods or (ii) by becoming the owner of the goods, a Person acquires a right to use the program in connection with the goods.

"GOVERNMENTAL AUTHORITY": Any nation or government, any federal, state, city, town, municipality, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

"GRAMEX": Has the meaning given that term in the Preamble hereto.

"GROSS AVAILABILITY": The result of the following in the aggregate with respect to all Borrowers:

(i) The lesser of

(A) The Revolving Credit Ceiling

or

(B) The Borrowing Base

Minus

(ii) The aggregate unpaid balance of the Loan Account.

Minus

(iii) The aggregate undrawn Stated Amount of all then outstanding L/Cs and Banker's Acceptances.

Minus

(v) The aggregate of the Availability Reserves.

"HAZARDOUS MATERIALS": (a) Any element, compound or chemical that is defined, listed or otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or

hazardous substance, extremely hazardous substance or chemical, hazardous waste, special waste, or solid waste under Environmental Laws or that is reasonably likely to cause immediately, or at some reasonably foreseeable future time, harm to or have an adverse effect on, the environment or risk to human health or safety, including, without limitation, any pollutant, contaminant, waste, hazardous waste, toxic substance or dangerous good which is defined or identified in any Environmental Law and which is present in the environment in such quantity or state that it contravenes any Environmental Law; (b) petroleum and its refined products; (c) polychlorinated biphenyls; (d) any substance exhibiting a hazardous waste characteristic, including, without limitation, corrosivity, ignitability, toxicity or reactivity as well as any radioactive or explosive materials; and (e) any raw materials, building components (including, without limitation, asbestos-containing materials) and manufactured products containing hazardous substances listed or classified as such under Environmental Laws.

"HEDGEAGREEMENTS": All obligations of any Person in respect of interest rate swap agreements, currency swap agreements and other similar agreements designed to hedge against fluctuations in interest rates or foreign exchange rates.

"INDEBTEDNESS": Without duplication, all obligations, contingent and otherwise, that in accordance with GAAP should be classified upon the balance sheet of any Borrower and/or the consolidated balance sheet of the Parent as liabilities, other than trade payables, deferred rent, or accrued expenses incurred in the ordinary course of business or to which reference should be made by footnotes thereto, including in any event and whether or not so classified:

(a) All obligations in respect of money borrowed (including any indebtedness which is non-recourse to the credit of such Person but which is secured by an Encumbrance on any asset of such Person) whether or not evidenced by a promissory note, bond, debenture or other written obligation to pay money.

(b) All obligations evidenced by bonds, notes, debentures or other similar instruments.

(c) All obligations in connection with Hedge Agreements.

(d) All obligations in connection with any letter of credit or acceptance transaction (including, without limitation, the face amount of all letters of credit and acceptances issued for the account of such Person or reimbursement on account of which such Person would be obligated).

(e) All obligations in connection with the sale or discount of accounts receivable or chattel paper of such Person.

(f) All obligations on account of deposits or advances other than deferred rent incurred in the ordinary course of business.

(g) All obligations as lessee under Capital Leases; and

(h) All obligations in connection with any sale and leaseback transaction.

"Indebtedness" also includes:

(x) Indebtedness of others secured by an Encumbrance on any asset of such Person, whether or not such Indebtedness is assumed by such Person.

(y) Any guaranty, endorsement, suretyship or other undertaking pursuant to which that Person may be liable in respect of Indebtedness of any third party; and

(z) The Indebtedness of a partnership or joint venture for which such Person is liable as a general partner or joint venturer.

"INDEMNIFIED PERSON": Is defined in Section 20.15.

"INFORMATION": Is defined in Section 20.3.

"INSTRUMENTS": Has the meaning given that term in the UCC.

"INTERCOMPANY NOTES": The promissory notes and other evidences of Indebtedness among the Loan Parties outstanding from time to time. The Intercompany Notes outstanding as of the Effective Date are set forth on EXHIBIT 1.3 hereto.

"INTERCREDITOR AGREEMENT": The Amended and Restated Intercreditor and Lien Subordination Agreement dated as of the Effective Date entered into among the Agent, on behalf of the Revolving Credit Lenders, and CCM, as agent under the Senior Non-Convertible Facility.

"INTEREST PAYMENT DATE": With reference to:

Each LIBOR Loan: The last day of the Interest Period relating thereto (and on the last day of the third month for any such loan which has a six month Interest Period); the Termination Date; and the End Date.

Each Base Margin Loan: The first day of each [August, November, February and May]; the Termination Date; and the End Date.

"INTEREST PERIOD": The following:

(a) With respect to each LIBOR Loan: Subject to Subsection
(c), below, the period commencing on the date of the making or continuation of, or conversion to, the subject LIBOR Loan and ending one, two, three, or six months thereafter, as the Lead Borrower may elect by notice (pursuant to Section 2.5) to the Administrative Agent

(b) With respect to each Base Margin Loan: Subject to Subsection (c), below, the period commencing on the date of the making or continuation of or conversion to such Base Margin Loan and ending on that date (i) as of which the subject Base Margin Loan is converted to a LIBOR Loan, as the Lead Borrower may elect by notice (pursuant to Section 2.5) to the Administrative Agent, or (ii) on which the subject Base Margin Loan is paid by the Borrowers.

(c) The setting of Interest Periods is in all instances subject to the following:

(i) Any Interest Period for a Base Margin Loan which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day.

(ii) Any Interest Period for a LIBOR Loan which would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day, unless that succeeding Business Day is in the next calendar month, in which event such Interest Period shall end on the last Business Day of the month during which the Interest Period ends.

(iii) Subject to Subsection (iv), below, any Interest Period applicable to a LIBOR Loan, which Interest Period begins on a day for which there is no numerically corresponding day in the calendar month during which such Interest Period ends, shall end on the last Business Day of the month during which that Interest Period ends.

(iv) Any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date.

(v) The number of Interest Periods in effect at any one time is subject to Section 2.12(e) hereof.

"INVENTORY": Includes, without limitation, "inventory" as defined in the UCC and also all: (a) Goods which are leased by a Person as lessor; are held by a Person for sale or lease or to be furnished under a contract of service; are furnished by a Person under a contract of service; or consist of raw materials, work in process, or materials used or consumed in a business; (b) Goods of said description in transit; (c) Goods of said description which are returned, repossessed and rejected; (d) packaging, advertising, and shipping materials related to any of the foregoing; (e) all names, marks, and General Intangibles affixed or to be affixed or associated thereto; and (f) Documents and Documents of Title which represent any of the foregoing.

"INVENTORY ADVANCE RATE": As to any Borrower, the following percentages of the Cost of Eligible Inventory of such Borrower specified below for the periods indicated:

Borrower                    Period                        Inventory Advance Rate
--------                    ------                        ----------------------
Filene's Basement, Inc.     December 15 through           68%
                            August 31 of each year

                            September 1 through           78%
                            December 14 of each year

All other Borrowers         December 15 through           67%
                            October 31 of each year

                            November 1 through            78%
                            December 14 of each year

Any Inventory Advance Rate may be increased by the Collateral Agent from time to time in its sole discretion by an amount not to exceed two percent (2%) from the rates set forth above. Without limiting the generality of the Collateral Agent's discretion, the increase of an Inventory Advance Rate by the Collateral Agent shall not obligate the Collateral Agent to maintain such increased Inventory Advance Rate for any specific period of time and the Collateral Agent may reduce the Inventory Advance Rate (but not below the levels set forth in the above table) at any time in their sole discretion. The increase of the Inventory Advance Rate by the Collateral Agent on any one occasion shall not obligate them to increase the Inventory Advance Rate on any other occasion.

"INVENTORY RESERVES": Without duplication, such Reserves as may be established from time to time by the Collateral Agent in the Collateral Agent's reasonable, good faith discretion with respect to the determination of the saleability, at retail, of the Eligible Inventory or which reflect such other factors as affect the market value of the Eligible Inventory. The Collateral Agent shall furnish the Lead Borrower with notice two (2) Business Days prior to imposing or changing any Inventory Reserve (unless a Specified Event of Default then exists and is continuing, in which event no prior notice shall be required). Without limiting the rights of the Collateral Agent to establish or modify Inventory Reserves, the initial Inventory Reserves on the Effective Date shall be the following:

(a) shrinkage;

(b) consigned Inventory; and

(b) damaged Goods.

"INVESTMENT PROPERTY": Has the meaning given that term in the UCC.

"IPO" means the proposed initial public offering of Class A Common Shares
      of DSW under the Securities Act, completed substantially as
      described in DSW's Form S-1 Registration Statement, as filed with
      the SEC on March 14, 2005, as amended from time to time, which
      offering shall be completed as a primary offering by DSW.

"IPO EFFECTIVE DATE" means the date on which the IPO is consummated in accordance with the terms of the Underwriting Agreement in the form attached to the Form S-1 Registration Statement as filed with the SEC on March 14, 2005, as amended from time to time.

"IPO PRICE" means the price at which each Class A Common Share is offered to the public in a Qualifying IPO as set forth on the cover page to the prospectus in such IPO.

"ISSUER": The issuer of any L/C or Banker's Acceptance. The Issuer shall be NCB or such other Revolving Credit Lender (or Affiliate of a Revolving Credit Lender) as the Lead Borrower (with the consent of the Administrative Agent, which consent shall not be unreasonably withheld) may select.

"JEWELRY": Retail Ventures Jewelry, Inc., an Ohio corporation.

"L/C":Any letter of credit issued pursuant to this Agreement. Without limitation, Existing L/Cs shall be deemed to be L/Cs issued under this Agreement and shall be entitled to all of the benefits hereof.

"L/C LANDING COSTS": To the extent not included in the Stated Amount of an L/C or a Banker's Acceptance, customs, duty, freight, and other out-of-pocket costs and expenses which will be expended to "land" the Inventory, the purchase of which is supported by such L/C or Banker's Acceptance.

"L/C FEES": The fees payable in respect of L/Cs pursuant to Section 2.18.

"LEAD ARRANGER": NCB.

"LEAD BORROWER": Defined in the Preamble.

"LEASE": Any lease or other agreement, no matter how styled or structured, pursuant to which a Borrower is entitled to the use or occupancy of any space.

"LEASEHOLD INTEREST": Any interest of a Borrower as lessee under any Lease.

"LENDERS' SPECIAL COUNSEL": A single counsel, selected by the Majority Lenders following the occurrence of an Event of Default, to represent the interests of the Revolving Credit Lenders in connection with the enforcement, attempted enforcement, or preservation of any rights and remedies under this, or any other Loan Document, as well as in connection with any "workout", forbearance, or restructuring of the credit facility contemplated hereby.

"LETTER-OF-CREDIT RIGHT": Has the meaning given that term in UCC and also refers to any right to payment or performance under an L/C, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance.

"LIABILITIES": Includes, without limitation, the following:

(a) All and each of the following, arising under this Agreement or under any of the other Loan Documents, whether now existing or hereafter arising:

(i) Any and all direct and indirect liabilities, debts, and obligations of each Borrower to the Agent or any Revolving Credit Lender, each of every kind, nature, and description.

(ii) Each obligation to repay any loan, advance, indebtedness, note, obligation, overdraft, or amount now or hereafter owing by any Borrower to the Agent or any Revolving Credit Lender (including all future advances whether or not made pursuant to a commitment by the Agent or any Revolving Credit Lender), whether or not any of such are liquidated, unliquidated, primary, secondary, secured, unsecured, direct, indirect, absolute, contingent, or of any other type, nature, or description, or by reason of any cause of action which the Agent or any Revolving Credit Lender may hold against any Borrower.

(iii) All notes and other obligations of each Borrower now or hereafter assigned to or held by the Agent or any Revolving Credit Lender, each of every kind, nature, and description.

(iv) All interest, fees, and charges and other amounts which may be charged by the Agent or any Revolving Credit Lender to any Borrower and/or which may be due from any Borrower to the Agent or any Revolving Credit Lender from time to time.

(v) All reasonable costs and expenses incurred or paid by the Agent or any Revolving Credit Lender in respect of any agreement between any Borrower and the Agent or any Revolving Credit Lender or instrument furnished by any Borrower to the Agent or any Revolving Credit Lender (including, without limitation, Costs of Collection, reasonable attorneys' fees, and all court and litigation costs and expenses).

(vi) Any and all covenants of each Borrower to or with the Agent or any Revolving Credit Lender and any and all obligations of each Borrower to act or to refrain from acting in accordance with any agreement between that Borrower and the Agent or any Revolving Credit Lender or instrument furnished by that Borrower to the Agent or any Revolving Credit Lender.

(vii) Each of the foregoing as if each reference to the "the Agent or any Revolving Credit Lender" were to each Affiliate of the Agent.

(b) Any and all direct or indirect liabilities, debts, and obligations of each Borrower to the Agent or any Affiliate of the Agent, each of every kind, nature, and description owing on account of any service or accommodation provided to, or for the account of any Borrower pursuant to this or any other Loan

Document, including cash management services, Hedge Agreements, and the issuances of L/C's and Banker's Acceptances.

"LIBOR BUSINESS DAY": Any day which is both a Business Day and a day on which the London interbank market in which NCB participates is open for dealings in United States Dollar deposits.

"LIBOR LOAN": Any Revolving Credit Loan which bears interest at a LIBOR Rate.

"LIBOR MARGIN": The Applicable Margin for LIBOR Loans.

"LIBOR OFFER RATE": For any Interest Period for LIBOR Loans, the quotient
(rounded upwards, if necessary, to the next 1/100 of 1%) of : (x)
the per annum rate of interest determined by the Administrative Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) as of approximately 11:00
a.m. (London time) two LIBOR Business Days prior to the beginning of such Interest Period pertaining to such LIBOR Loan, as provided by Bloomberg's or Reuters (or any other similar company or service that provides rate quotations comparable to those currently provided by such companies as the rate in the London interbank market) as the rate in the London interbank market for deposits in U.S. Dollars in immediately available funds with a maturity comparable to such Interest Period divided by (y) a number equal to 1.00 minus the Eurocurrency Reserve Percentage. In the event that such rate quotation is not available for any reason, then the rate (for purposes of clause (x) hereof) shall be the rate, determined by the Administrative Agent as of approximately 11:00 a.m. (London time) two LIBOR Business Days prior to the beginning of such Interest Period pertaining to such LIBOR Loan, to be the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the per annum rates at which deposits in U.S. Dollars in immediately available funds in an amount comparable to NCBC's Revolving Credit Commitment Percentage of such LIBOR Loan and with a maturity comparable to such Interest Period are offered to the prime banks by leading banks in the London interbank market. The LIBOR Offer Rate shall be adjusted automatically on and as of the effective date of any change in the Eurocurrency Reserve Percentage.

"LIBOR RATE": That per annum rate which is the aggregate of the LIBOR Offer Rate plus the LIBOR Margin.

"LIQUIDATION": The exercise, by the Collateral Agent, of those rights accorded to the Collateral Agent under the Loan Documents as a creditor of the Borrowers following and on account of the occurrence and continuance of an Event of Default looking towards the realization on the Collateral. Derivations of the word "Liquidation" (such as "Liquidate") are used with like meaning in this Agreement.

"LOAN ACCOUNT": Is defined in Section 2.9.

"LOAN COMMITMENT": With respect to each Revolving Credit Lender, that respective Revolving Credit Lender's Revolving Credit Dollar Commitment.

"LOAN DOCUMENTS": This Agreement, the Facility Guarantee, the Facility Guarantors Collateral Documents, the Intercreditor Agreement, and each other instrument or document from time to time executed and/or delivered in connection with the arrangements contemplated hereby or in connection with any transaction with the Agent or any Affiliate of the Agent related to this Agreement, including, without limitation, any transaction which arises out of any cash management, depository, investment, banker's acceptance, letter of credit, interest rate protection, Hedge Agreement, or other services provided by the Agent or any Affiliate of the Agent, as each may be amended from time to time.

"LOAN PARTY OR LOAN PARTIES": Collectively, the Borrowers and the Facility Guarantors.

"MAJORITY LENDERS": (a) If there are two or fewer Revolving Credit Lenders who are not Delinquent Revolving Credit Lenders: All Revolving Credit Lenders who are not Delinquent Revolving Credit Lenders.

(b) If there are three or more Revolving Credit Lenders who are not Delinquent Revolving Credit Lenders: Revolving Credit Lenders (other than Delinquent Revolving Credit Lenders) holding at least 51% of the Revolving Credit Commitment Percentages of the Revolving Credit Dollar Commitments of Revolving Credit Lenders who are not Delinquent Revolving Credit Lenders.

"MATERIAL ACCOUNTING CHANGE": Any change in GAAP applicable to accounting periods subsequent to the Parent's fiscal year most recently completed prior to the execution of this Agreement, which change has a material effect on the Parent's Consolidated financial condition or operating results, as reflected on financial statements and reports prepared by or for the Parent and its Subsidiaries, when compared with such condition or results as if such change had not taken place.

"MATERIAL ADVERSE EFFECT": A material adverse effect on (a) the business, operations, property, assets, or financial condition of (i) the Loan Parties taken as a whole, or (ii) the Value City Business taken as a whole, or (b) the validity or enforceability of this Agreement or any of the other Loan Documents or any of the material rights or remedies of the Agent or the Revolving Credit Lenders hereunder or thereunder.

"MATURITY DATE": The earlier of (a) July 5, 2009, or (b) the day which is 91 days prior to the maturity date under the Senior Non-Convertible Facility.

"NCB": National City Bank, a national banking association.

"NCBC": National City Business Credit, Inc., an Ohio corporation.

"NOMINEE": A business entity (such as a corporation or limited partnership) formed by the Collateral Agent to own or manage any Post Foreclosure Asset.

"NON-CONVERTIBLE SENIOR COLLATERAL": All assets of the Loan Parties other than Accounts (excluding any right to payment arising from any license by a Borrower or any other Loan Party of any intellectual property and excluding any insurance proceeds of any real estate or Equipment); Inventory; Chattel Paper, Instruments, and Documents related to any Accounts or Inventory; Payment Intangibles (including tax refunds, but excluding any Payment Intangibles that are proceeds of the Non-Convertible Senior Collateral); marketable securities; licenses related to department store concessions and the fees associated therewith; all Intercompany Notes of the Borrowers and Loan Parties other than those described in the Intercreditor Agreement; Collection Accounts, DDAs, and credit card proceeds of the Borrowers; books and records of the Borrowers and the Loan Parties relating to any of the foregoing; and all products and Proceeds of the foregoing, including, without limitation, proceeds of insurance policies to the extent such proceeds relate to any of the foregoing.

"OPERATING ACCOUNT": Is defined in Section 8.3.

"OVERLOAN": A loan, advance, or providing of credit support (such as the issuance of any L/C) to the extent that, immediately after its having been made, Availability, Filene's Availability or VC Availability, as applicable, is less than zero.

"PARENT": Retail Ventures, Inc., an Ohio corporation.

"PARTICIPANT": Is defined in Section 20.18, hereof.

"PAYMENT INTANGIBLE": As defined in the UCC and also any general intangible under which the Account Debtor's primary obligation is a monetary obligation.

"PERMITTED ACQUISITION": (i) Any Acquisition the cash consideration for which is less than $3,000,000 in the aggregate in any fiscal year of the Parent and its Subsidiaries and which satisfies the conditions set forth in clauses (f), (g), (h), and (i) below, and (ii) any other Acquisition in which each of the following conditions are satisfied:

(a) No Default or Event of Default then exists or would arise from the consummation of such Acquisition.

(b) Such Acquisition shall have been approved by the Board of Directors of the Person (or similar governing body if such Person is not a corporation) which is the subject of such Acquisition and such Person shall not have announced that it will oppose such Acquisition or shall not have commenced any action which alleges that such Acquisition will violate applicable law.

(c) The Lead Borrower shall have furnished the Collateral Agent with ten (10) days prior notice of such intended Acquisition and shall have furnished

the Collateral Agent with a current draft of the acquisition agreement and other acquisition documents, a summary of any due diligence undertaken by the Parent and/or the Borrowers in connection with such Acquisition, appropriate financial statements of the Person which is the subject of such Acquisition, pro forma projected financial statements for the twelve month period following such Acquisition after giving effect to such Acquisition (including balance sheets, cash flows and income statements by month for the acquired Person, individually, and on a consolidated basis with all Loan Parties), and such other information as the Collateral Agent may reasonably require, each of which shall be reasonably satisfactory to the Collateral Agent.

(d) The structure of the Acquisition shall be acceptable to the Collateral Agent in its reasonable judgment. If an Acquisition of capital stock or other equity interests, after consummation of such Acquisition, the Parent or a Borrower shall own directly or indirectly a majority of the equity interests in the Person being acquired and shall control a majority of any voting interests, and/or shall otherwise Control the Person being acquired.

(e) The Collateral Agent shall have received (i) the results of appraisals of the assets (or the assets of the Person) to be acquired in such Acquisition and of a commercial finance examination of the Person which is (or whose assets are) being acquired, and
(ii) such other due diligence as the Collateral Agent may reasonably require, all of the results of the foregoing to be reasonably satisfactory to the Collateral Agent.

(f) Any assets acquired shall be utilized in, and if the Acquisition involves a merger, consolidation or stock acquisition, the Person which is the subject of such Acquisition shall be engaged in, only those businesses permitted under Section 5.19, below.

(g) If the Person which is the subject of such Acquisition is a Subsidiary of the Parent or a Borrower, such Subsidiary shall have executed such documents as may be necessary to be joined as a "Borrower" or "Facility Guarantor" hereunder , as determined by the Collateral Agent, and the Collateral Agent shall have received a first priority security and mortgage interest (subject to Permitted Encumbrances) in such Subsidiary's capital stock, inventory, accounts, equipment, real estate, leaseholds, and other property of the same nature as constitutes Collateral under this Agreement in order to secure the Liabilities.

(h) The total consideration paid for all Acquisitions (whether in cash, tangible property, notes or other property (other than capital stock of the Parent)) after the Effective Date, shall not exceed in the aggregate the sum of $20,000,000.

(i) Excess Availability immediately prior to such Acquisition, immediately after giving effect thereto, and projected Excess Availability on a pro forma projected basis for the twelve months immediately following such Acquisition, shall not be less than $70,000,000.

"PERMITTED DISPOSITION": Shall mean any of the following:

(a) Licenses of intellectual property or licensed or leased departments of a Loan Party or any of its Subsidiaries in the ordinary course of business or to any other Loan Party;

(b) Leases or subleases of Leases, to the extent at any point in time such Lease or subleases have anticipated minimum fixed annual rental payments of not more than $3,000,000 in the aggregate;

(c) Sales, assignments, transfers, conveyances or other dispositions of any or all of the property specified in EXHIBIT 1.7 hereof; provided that in connection with a sale or similar disposition of any such property, if a Loan Party receives a note or similar obligations as all or part of the consideration therefor, such Loan Party shall secure such note or obligation with a mortgage or similar Lien on such property and pledge such note or other obligation to the Collateral Agent as security for the Liabilities pursuant to the terms of the Loan Documents;

(d) Sales of Inventory and Equipment in connection with store closures permitted in accordance with the provisions of Section 5.4(c) hereof, provided that all sales of Inventory in connection with store closings (1) after the occurrence and during the continuance of an Event of Default, or (2) consisting of more than fifteen (15) retail stores at the same time, shall be in accordance with liquidation agreements and with liquidators reasonably acceptable to the Collateral Agent;

(e) the sale, lease or transfer of any property to the Parent or to any Loan Party;

(f) as long as no Event of Default then exists or would arise therefrom, the dividend, distribution or other transfer of the capital stock of DSW owned by the Parent to the stockholders of the Parent;

(g) as long as no Event of Default then exists or would arise therefrom, the sale or other transfer of the capital stock of DSW owned by the Parent in order to pay taxes of the Parent and its Subsidiaries then due (or resulting from such sale) or to pay the Indebtedness owed by the Parent to the Lead Borrower pursuant to the promissory note date January 1, 2005, made by the Parent payable to the order of the Lead Borrower in the principal amount of $240,000,000 (the "RVI Note"), with such payments to be applied by the Lead Borrower first, to the payment of amounts owed under the Senior Non-Convertible Facility, and then, after all such amounts under the Senior Non-Convertible Facility have been paid in full, to the payment of the Liabilities hereunder; and

(h) (i) the sale of any property, land or building (including any related receivables or other intangible assets) to DSW, DSW Shoe or any Person which is not a Subsidiary of the Parent, or (ii) in addition to the transfers

described in clauses (f) and (g) of this definition, the sale of the entire capital stock (or other equity interests) and Indebtedness of any Subsidiary owned by a Loan Party to any Person which is not a Subsidiary of a Borrower, or (iii) the consummation of any other asset sale with a Person who is not a Subsidiary of a Borrower, provided that, in each case ((i)-(iii)):

A. the consideration for such transaction represents fair value, and at least 90% of such consideration consists of cash, provided that in connection with a sale or similar disposition of any such Property, if a Loan Party receives a note or similar obligations as all or part of the consideration therefor, such Loan Party shall secure such note or obligation with a mortgage or similar Lien on such Property and pledge such note or other obligation to the Collateral Agent as security for the Liabilities pursuant to the terms of the Loan Documents;

B. the aggregate consideration for all such transactions completed in any fiscal year does not exceed $500,000,

C. the aggregate consideration for all such transactions completed after the Effective Date does not exceed $1,500,000, and

D. other than in connection with a transaction, the aggregate consideration for which is equal to an amount less than $500,000, at least five (5) Business Days prior to the date of completion of such transaction such Loan Party shall have delivered to the Agent an officer's certificate executed on behalf of such Loan Party by an Authorized Officer of such Loan Party, which certificate shall contain a description of the proposed transaction, the date such transaction is scheduled to be consummated, the estimated purchase price or other consideration for such transaction, financial information pertaining to compliance with the preceding clause (A), and which shall (if requested by the Agent) include a certified copy of the draft or definitive documentation pertaining thereto.

"PERMITTED ENCUMBRANCES": Shall mean any of the following:

(a) Encumbrances for taxes not yet delinquent or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrowers in accordance with GAAP, and provided further that, no notice of tax lien has been filed with respect thereto;

(b) Encumbrances in respect of property or assets imposed by law in the ordinary course of business, such as carrier's, warehousemen's, mechanics', materialmen's, repairmen's, landlord's or similar Encumbrances arising in the ordinary course of business which (i) are not overdue in accordance with customary business practices and consistent with the applicable Loan Party's prior

practices, and do not in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Loan Parties, or
(ii) are being contested in good faith by a Loan Party, by appropriate proceedings diligently instituted and conducted and without danger of any material risk to the Collateral and adequate reserves or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor;

(c) Encumbrances, pledges or deposits in connection with workers' compensation, unemployment insurance and other types of social security;

(d) Deposits to secure the performance of tenders, bids, sales, trade and government contracts, leases, statutory obligations, surety, appeal, and supersedeas bonds, warranty, advance payment, customs, performance and return-of-money bonds and other obligations of a like nature in the ordinary course of business (exclusive of obligations in respect of the payment of borrowed money) whether pursuant to statutory requirements, common law or consensual arrangements;

(e) Easements, rights of way, leases, zoning or deed restrictions, licenses, covenants, building, restrictions, minor defects or irregularities in title and other similar real estate encumbrances incurred in the ordinary course of business that in the aggregate do not materially interfere with the conduct of the business of the Loan Parties; defects and irregularities in titles, survey exceptions, encumbrances, easements or reservations of others for rights-of-way, roads, pipelines, railroad crossings, services, utilities or other similar purposes; outstanding mineral rights or reservations (including rights with respect to the removal of material resource) which do not materially diminish the value of the surface estate, assuming usage of such surface estate similar to that being carried on by any Loan Party as of the effective date;

(f) Any interest or title of a lessor under any lease entered into by any Loan Party in the ordinary course of business not in violation of the Loan Documents;

(g) Any interest or title of any lessee under any leases or subleases of real property of a Loan Party not in violation of the requirements of the Loan Documents, provided that all such Encumbrances do not in the aggregate materially detract from the value of such Loan Party's property or materially impair the use thereof in the operation of such Loan Party's business;

(h) Encumbrances arising from financing statements regarding property subject to Capital Leases not in violation of the requirements of the Loan Documents, provided that such Encumbrances are only in respect of the property subject to, and secure only, the respective lease;

(i) Rights of consignors of goods to a Loan Party as consignee;

(j) Encumbrances arising from judgments, decrees or attachments in existence less than 30 days after the entry thereof, with respect to which execution has been stayed and with respect to which payment in full above any applicable deductible is covered by insurance or a bond, or in circumstances not constituting an Event of Default under Section 11.10(a);

(k) Encumbrances created by this Agreement or the other Loan Documents;

(l) Encumbrances (i) listed on EXHIBIT 4.5(A), annexed hereto, or (ii) arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any such Encumbrances, provided that the principal amount of such Indebtedness is not increased and such Indebtedness is not secured by any additional assets;

(m) Encumbrances which are placed upon Equipment or improvements to real property (including the associated real property) used in the ordinary course of business of a Loan Party or any Subsidiary (other than DSW, DSW Shoe and their Subsidiaries) (i) at the time of (or within 90 days after) the acquisition of such Equipment or the completion of such improvements by such Loan Party or any such Subsidiary (other than DSW, DSW Shoe and their Subsidiaries) to secure Indebtedness incurred to pay or finance all or a portion of the purchase price or other cost thereof, provided that the Encumbrance on the Equipment so acquired or the real property so improved does not encumber any other asset of such Loan Party or any such Subsidiary; or (ii) are existing on Equipment or real property at the time acquired by a Loan Party or any Subsidiary or on assets of a Person at the time such Person first becomes a Subsidiary of the Borrower; provided that (A) any such Encumbrances were not created at the time of or in contemplation of the acquisition of such assets or Person by a Loan Party or any Subsidiaries; (B) in the case of any such acquisition of a Person, any such Encumbrance attaches only to the Equipment or real estate, as applicable, of such Person; and (C) in the case of any such acquisition of Equipment or real estate by a Loan Party or any Subsidiary, any such Encumbrance attaches only to the property and assets so acquired and not to any other property or assets of such Loan Party or any such Subsidiary; provided that the Encumbrances outstanding from time to time under this clause (m) shall not secure any Indebtedness other than Permitted Indebtedness described in clause (c) of such definition;

(n) Encumbrances securing Indebtedness assumed in connection with, or continuing to exist after, but not incurred in connection with, or contemplation of, a Permitted Acquisition, which Encumbrances were in effect prior to the consummation of the Permitted Acquisition, provided that such Encumbrances may not extend to any Accounts, Inventory, or General Intangibles of the Loan Parties or of the Person so acquired;

(o) An Encumbrance granted by any Loan Party in connection with the Senior Non-Convertible Facility; and

(p) An Encumbrance granted by the Parent in favor of the Lead Borrower on the capital stock of DSW and Filene's.

The inclusion of the foregoing as "Permitted Encumbrances" shall not limit or impair the right of the Collateral Agent to impose Reserves on account thereof in accordance with the provisions of this Agreement.

"PERMITTED INDEBTEDNESS": Shall mean any of the following:

(a) Indebtedness incurred under this Agreement and the other Loan Documents including any Indebtedness on account of the Revolving Credit.

(b) Any Indebtedness incurred under the Senior Non-Convertible Facility.

(c) Indebtedness on account of Equipment or improvements to real property acquired in compliance with the requirements of subparagraph (m) of the definition of Permitted Encumbrances, the incurrence of which would not otherwise be prohibited by this Agreement; provided that such Indebtedness shall not exceed $10,000,000 in the aggregate at any time outstanding for all Loan Parties and, with respect to the Parent only, shall not exceed $5,000,000 in the aggregate outstanding at any time;

(d) (i) Indebtedness consisting of all obligations of a Loan Party or any Subsidiary (other than DSW, DSW Shoe and their Subsidiaries) as lessee under Capital Leases, and

(ii) Indebtedness consisting of all obligations of a Loan Party or any Subsidiary (other than DSW, DSW Shoe and their Subsidiaries) under any lease (i) which is accounted for by the lessee as an operating lease and (ii) under which the lessee is intended to be the "owner" of the leased property for Federal income tax purposes;

provided that (A) at the time of any incurrence thereof after the date hereof, and after giving effect thereto, no Event of Default shall have occurred and be continuing or would result therefrom; and (B) the aggregate outstanding principal amount (using the obligations in lieu of principal amount, in the case of any Capital Lease, or present value, based on the implicit interest rate, in lieu of principal amount, in the case of any lease described above in part (ii)) of Indebtedness permitted by this clause (d) shall not exceed $10,000,000 in the aggregate principal amount outstanding at any time for all Loan Parties and, with respect to the Parent only, shall not exceed $5,000,000 in the aggregate principal amount outstanding at any time.

(e) Indebtedness of the Loan Parties and any Subsidiary (other than DSW, DSW Shoe and their Subsidiaries) under Hedge Agreements other than for speculative purposes with any Revolving Credit Lender or an Affiliate of a Revolving Credit Lender to which the agent under the Senior Non-Convertible

Facility has consented in accordance with agreements evidencing the Senior Non-Convertible Facility.

(f) The Indebtedness listed on EXHIBIT 4.6, annexed hereto;

(g) Indebtedness to sellers in connection with Permitted Acquisitions;

(h) Intercompany indebtedness between and among the Loan Parties (other than the Parent) pursuant to loans and advances permitted in accordance with Subsection 5.17(f), below, and intercompany Indebtedness due to the Parent by any other Loan Party to the extent permitted hereunder;

(i) Indebtedness with respect to indemnities, warranties, statutory obligations, and surety, appeal and supersedeas bonds incurred in the ordinary course of business;

(j) Indebtedness in respect of overdraft protections and otherwise in connection with deposit accounts;

(k) Indebtedness arising out of the refinancing, extension, renewal or refunding of any Indebtedness permitted under this Agreement, provided that the principal amount of such Indebtedness is not increased from the amount outstanding at the time of such refinancing;

(l) Indebtedness owed by the Parent to any of the other Loan Parties in an amount not to exceed $5,000,000 (less amounts paid under Section 5.16(a) hereof) in the aggregate at any time outstanding; and

(m) Intercompany Indebtedness between and among the Loan Parties, as evidenced by the Intercompany Notes.

"PERMITTED INVESTMENTS": Shall mean each of the following:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing not more than one year from the date of acquisition thereof;

(b) investments in commercial paper maturing not more than one year from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from Standard & Poors or from Moody's Investment Services, Inc.;

(c) investments in certificates of deposit, banker's acceptances and time deposits maturing not more than one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any financial institution organized under the laws of the United States of America or any State thereof that

has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above (without regard to the limitation on maturity contained in such clause) and entered into with a financial institution satisfying the criteria described in clause (c) above;

(e) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poors or from Moody's Investment Services, Inc.;

(f) investments in money market funds, substantially all the assets of which are comprised of securities of the types described in clauses (a) through (e) above;

(g) investments acquired by a Loan Party or any of its Subsidiaries (i) in exchange for any other investment held by such Loan Party or any such Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other investment, or (ii) as a result of a foreclosure by such Loan Party or any of its Subsidiaries with respect to any secured investment or other transfer of title with respect to any secured investment in default;

(h) investments by a Loan Party in the capital of any wholly-owned Subsidiary of such Loan Party, including without limitation, any Permitted Acquisitions, provided that such Loan Party has complied with the provisions of Section 5.21 hereof with respect to such Subsidiary;

(i) to the extent not permitted by the foregoing clauses, existing investments in any Subsidiaries (and any increases thereof attributable to increases in retained earnings);

(j) to the extent not permitted by the foregoing clauses, the existing investments described on EXHIBIT 1.6 hereto;

(k) investments of a Loan Party and any Subsidiary in Hedge Agreements other than for speculative purposes, to which the agent under the Senior Non-Convertible Facility has consented in accordance with agreements evidencing the Senior Non-Convertible Facility;

(l) investments of any Person which are outstanding at the time such Person becomes a Subsidiary of a Loan Party as a result of a Permitted Acquisition, but not any increase in the amount thereof unless otherwise permitted by this Agreement;

(m) any other investments (whether in the form of cash or contribution of property, and if in the form of a contribution of property, such property shall be valued for purposes of this clause at the fair value thereof) in any corporation, partnership, limited liability company, joint venture or other business entity, which is not itself a Subsidiary of the Parent or a Borrower or owned or Controlled by any director, officer or employee of the Parent or a Borrower or any of its Subsidiaries, not otherwise permitted by the foregoing clauses, made after the Effective Date, shall be permitted to be incurred if (i) no Event of Default shall have occurred and be continuing, or would result therefrom, and (ii) the aggregate cumulative amount of such investments (together with any loans and advances permitted under Sections 5.6 and 5.17) does not exceed $6,000,000; and

(n) investments by the Parent in the capital stock of DSW existing on the Effective Date and increases thereof due to retained earnings;

provided that, except for Excluded Property and loans to officers and directors, all such Permitted Investments are subject to a perfected Encumbrance in favor of the Collateral Agent.

"PERSON": Any natural person, and any corporation, limited liability company, trust, partnership, joint venture, or other enterprise or entity.

"POST FORECLOSURE ASSET": All or any part of the Collateral, ownership of which is acquired by the Collateral Agent or a Nominee on account of the "bidding in" at a disposition as part of a Liquidation or by reason of a "deed in lieu" type of transaction.

"PROTECTIVE OVERADVANCES": Revolving Credit Loans which are OverLoans, but as to which each of the following conditions is satisfied: (a) when aggregated with all other Revolving Credit Loans, SwingLine Loans, Protective OverAdvances and the Stated Amount of L/Cs and Banker's Acceptances, the Revolving Credit Ceiling is not exceeded; and (b) when aggregated with all other Protective OverAdvances, such Revolving Credit Loans do not aggregate more than $13,750,000; (c) such Protective OverAdvances shall not remain outstanding for more than forty-five (45) days in any period of one hundred eighty (180) consecutive days, and (d) such Revolving Credit Loans are made or undertaken in the Administrative Agent's reasonable, good faith discretion (or as directed by the Collateral Agent) to protect and preserve the interests of the Revolving Credit Lenders. Overadvances on account of circumstances beyond the control of the Agent (such as a drop in collateral value) shall not be deemed "Protective Overadvances" and shall not be subject to the limitations contained herein.

"PROCEEDS": Includes, without limitation, "Proceeds" as defined in the
UCC.

"QUALIFYING IPO": means an IPO that satisfies each of the following conditions:

(a) Not more than 40% of the value (as of the IPO Effective Date calculated by reference to the IPO Price) of all issued and outstanding DSW Common Stock shall be sold in connection with the IPO;

(b) Immediately following the IPO and the application of the net cash proceeds thereof, DSW Common Stock having not less than 60% of the value (as of the IPO Effective Date calculated by reference to the IPO Price) of all issued and outstanding DSW Common Stock, shall be held (directly or indirectly) by Parent, free and clear of all Encumbrances, other than (i) Encumbrances in favor of the agent under the Senior Non-Convertible Facility, and (ii) Encumbrances permitted by clause (p) of the definition of Permitted Encumbrances;

(c) The sale price of the Class A Common Shares sold in the IPO shall reflect the fair market value of such Class A Common Shares on the IPO Effective Date;

(d) The Net Cash Proceeds from the IPO shall be sufficient to repay in full in cash all obligations outstanding under the CCM Term Loan Facilities; and

(e) The IPO Effective Date shall be on or prior to December 31, 2005.

"RECEIPTS": All cash, cash equivalents, money, checks, credit card slips, receipts and other Proceeds from any sale of the Collateral.

"RECEIVABLES COLLATERAL": That portion of the Collateral which consists of Accounts, Payment Intangibles, Chattel Paper, Instruments, Documents of Title, Documents, Investment Property, Payment Intangibles, Letter-of-Credit Rights, bankers' acceptances, and all other rights to payment.

"RELATED BUSINESS": Any business or enterprise consisting of any of the following:

(a) asset maximization services; or

(b) asset valuation services.

"RELEASE": Any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Material) into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through or in the ambient air, soil, surface or ground water, or property, which is in violation of any Environmental Laws.

"REGISTER": Is defined in Section 17.2(c).

"REQUIREMENTS OF LAW": As to any Person:

(a) Applicable Law.

(b) That Person's organizational documents.

(c) That Person's by-laws and/or other instruments which deal with corporate or similar governance, as applicable.

"RESERVES": The following: Availability Reserves and Inventory Reserves.

"REVOLVING CREDIT": Is defined in Section 2.1.

"REVOLVING CREDIT CEILING": $275,000,000.00.

"REVOLVING CREDIT DOLLAR COMMITMENT": As set forth on EXHIBIT 2.22,

annexed hereto (as such amounts may change in accordance with the provisions of this Agreement).

"REVOLVING CREDIT LENDERS": Each Revolving Credit Lender to which reference is made in the Preamble of this Agreement and any other Person who becomes a "Revolving Credit Lender" in accordance with the provisions of this Agreement.

"REVOLVING CREDIT LOANS": Loans made under the Revolving Credit, except that where the term "Revolving Credit Loan" is used with reference to available interest rates applicable to the loans under the Revolving Credit, it refers to so much of the unpaid principal balance of the Loan Account as bears the same rate of interest for the same Interest Period. (See Section 2.12(d)).

"REVOLVING CREDIT NOTE": Is defined in Section 2.10.

"REVOLVING CREDIT COMMITMENT PERCENTAGE": As set forth on EXHIBIT 2.22,

annexed hereto (as such amounts may change in accordance with the provisions of this Agreement).

"RVI NOTE": Has the meaning set forth in clause (g) of the definition of Permitted Dispositions.

"SEC": The Securities and Exchange Commission.

"SENIOR NON-CONVERTIBLE FACILITY": The credit facility set forth in the Senior Subordinated Convertible Loan Agreement dated as of March 15, 2000, amended from time to time prior to the Effective Date and as amended and restated June 11, 2002, in the present principal amount of $75,000,000.00, and as most recently amended and restated on the Effective Date.

"SPECIFIED EVENT OF DEFAULT": An Event of Default arising under any of the following sections of this Agreement:

(a) SECTION 11.1.

(b) SECTION 11.2.

(c) SECTION 11.3 (with respect to Sections 5.16, 5.17, 5.20, and Article 8 only).

(d) SECTION 11.5 (with respect to a breach of Sections 4.5, and 5.26 only).

(e) SECTION 11.6.

(f) SECTION 11.11.

(g) SECTION 11.12.

(h) SECTION 11.15.

"STATED AMOUNT": The maximum amount for which an L/C or Banker's Acceptance may be honored.

"SUBSIDIARY": Any corporation, association, partnership, limited liability company, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes or Controlling interests) of the outstanding voting interests.

"SUPERMAJORITY LENDERS": Revolving Credit Lenders (other than Delinquent Revolving Credit Lenders) holding 66-2/3% or more of the Revolving Credit Commitment Percentages (calculated without regard to any Revolving Credit Commitment Percentage of any Delinquent Revolving Credit Lender).

"SUPPORTING OBLIGATION": Has the meaning given that term in the UCC and also refers to a Letter-of-Credit Right or secondary obligation which supports the payment or performance of an Account, Chattel Paper, a Document, a General Intangible, an Instrument, or Investment Property.

"SWINGLINE": The facility pursuant to which the SwingLine Lender may advance Revolving Credit Loans aggregating up to the SwingLine Loan Ceiling.

"SWINGLINE LENDER": NCBC.

"SWINGLINE LOAN CEILING": $25,000,000.00 (subject to increase as provided in Section 16.4(e)).

"SWINGLINE LOANS": Defined in Section 2.8.

"TERMINATION DATE": The earliest of (a) the Maturity Date; or (b) the date of the occurrence of any event described in Section , below; or (c) the date designated as the Termination Date in the Administrative Agent's notice to the Lead Borrower setting the Termination Date on account of the occurrence of any Event of Default other than as described in Section , below; or (d) that date designated as the Termination Date, thirty (30) days irrevocable written notice of which is provided by the Lead Borrower to the Administrative Agent.

"TRANSFER": Wire transfer pursuant to the wire transfer system maintained by the Board of Governors of the Federal Reserve Board, or as otherwise may be agreed to

from time to time by the Administrative Agent making such Transfer and the subject Revolving Credit Lender. Wire instructions may be changed in the same manner that Notice Addresses may be changed (Section 18.1), except that no change of the wire instructions for Transfers to any Revolving Credit Lender shall be effective without the consent of the Administrative Agent.

"UCC": The Uniform Commercial Code as in effect from time to time in the State of Ohio.

"UNANIMOUS CONSENT": Consent of Revolving Credit Lenders (other than Delinquent Revolving Credit Lenders) holding 100% of the Loan Commitments (other than Loan Commitments held by a Delinquent Revolving Credit Lender).

"UNDERWRITING FEE": Is defined in Section 2.13.

"UNRESTRICTED SUBSIDIARY": Those Subsidiaries of the Lead Borrower described on EXHIBIT 1.5 hereto.

"UNUSED LINE FEE": As defined in Section 2.14.

"VALUE CITY BUSINESS": The Borrowers' business other than the Filene's Business.

"VALUE CITY ENTITIES": VCDS LLC, Gramex, VC Michigan, GBR and Jewelry.

"VC AVAILABILITY": The lesser of:

(a) the result of the following:

(i) The lesser of

(A) The Revolving Credit Ceiling

or

(B) The VC Borrowing Base

Minus

(ii) The aggregate unpaid balance of the Loan Account attributable to Revolving Credit Loans made to the Value City Entities.

Minus

(iii) The aggregate undrawn Stated Amount of all then outstanding L/Cs and Banker's Acceptances issued for the account of the Value City Entities.

Minus

(iv) The aggregate of the Availability Reserves attributable to the Value City Entities.

or

(b) Availability.

"VC BORROWING BASE": The aggregate of the following:

(a) The face amount of Eligible Credit Card Receivables of the Value City Entities multiplied by the Credit Card Advance Rate.

Plus

(b) The lesser of (a) the Cost of Eligible Inventory (net of Inventory Reserves) of the Value City Entities multiplied by the Inventory Advance Rate or (b) the Appraised Inventory Percentage of the Appraised Inventory Liquidation Value of the Inventory of the Value City Entities.

"VC MICHIGAN": Has the meaning given that term in the Preamble hereto.

"VCDS LLC": Value City Department Stores LLC, an Ohio limited liability company.

ARTICLE 2 - THE REVOLVING CREDIT:

2.1. ESTABLISHMENT OF REVOLVING CREDIT.

(a) The Revolving Credit Lenders hereby establish a revolving line of credit (the "REVOLVING CREDIT") in the Borrowers' favor pursuant to which each Revolving Credit Lender, subject to, and in accordance with, this Agreement, acting through the Administrative Agent, shall make loans and advances and otherwise provide financial accommodations to and for the account of the Borrowers as provided herein.

(b) Loans, advances, and financial accommodations under the Revolving Credit shall be made (i) with respect to Filene's, with reference to the Filene's Borrowing Base and shall be subject to Filene's Availability, and
(ii) with respect to the Value City Entities, with reference to the VC Borrowing Base and shall be subject to VC Availability, and (iv) with respect to all Borrowers, with reference to Availability. The Borrowing Base, the Filene's Borrowing Base, the VC Borrowing Base, Availability, Filene's Availability and VC Availability shall be determined by the Administrative Agent by reference to Borrowing Base Certificates furnished as provided in Section 6.4, below, and shall be subject to the following:

(A) Such determination shall take into account such Reserves as the Administrative Agent may determine as being applicable thereto.

(B) The Cost of Eligible Inventory will be determined in a manner consistent with current tracking practices of the Borrowers as in effect on the date hereof and as previously disclosed to the Administrative Agent, based on the Borrowers' stock ledgers inventory.

(c) The commitment of each Revolving Credit Lender to provide such loans, advances, and financial accommodations is subject to Section 2.22.

(d) The proceeds of borrowings under the Revolving Credit shall be used for the Borrowers' working capital and general corporate purposes (including, intercompany loans), all solely to the extent permitted by this Agreement. No proceeds of a borrowing under the Revolving Credit may be used, nor shall any be requested, with a view towards the accumulation of any general fund or funded reserve of the Borrowers other than in the ordinary course of the Borrowers' business and consistent with the provisions of this Agreement.

2.2. ADVANCES IN EXCESS OF BORROWING BASE (OVERLOANS).

(a) Except as provided in Section 16.3(a), no Revolving Credit Lender has any obligation to any Borrower to make any loan or advance, or otherwise to provide any credit to or for the benefit of any Borrower where the result of such loan, advance, or credit is an OverLoan.

(b) The Revolving Credit Lenders' obligations, among themselves, are subject to (among other provisions of this Agreement) Section 13.3(a) (which relates to each Revolving Credit Lender's making amounts available to the Administrative Agent) and (which relates to Protective OverAdvances).

(c) The Revolving Credit Lenders' providing of an OverLoan on any one occasion does not affect the obligations of each Borrower hereunder (including each Borrower's obligation to immediately repay any amount which otherwise constitutes an OverLoan) nor obligate the Revolving Credit Lenders to do so on any other occasion.

2.3. RISKS OF VALUE OF COLLATERAL. The Agent's reference to a given asset in connection with the making of loans, credits, and advances and the providing of financial accommodations under the Revolving Credit and/or the monitoring of compliance with the provisions hereof shall not be deemed a determination by the Agent or any Revolving Credit Lender relative to the actual value of the asset in question. All risks concerning the value of the Collateral are and remain upon the Borrowers. All Collateral secures the prompt, punctual, and faithful performance of the Liabilities whether or not relied upon by the Administrative Agent in connection with the making of loans, credits, and advances and the providing of financial accommodations under the Revolving Credit.

2.4. COMMITMENT TO MAKE REVOLVING CREDIT LOANS AND SUPPORT LETTERS OF CREDIT. Subject to the provisions of this Agreement, the Revolving Credit Lenders shall make a loan or advance under the Revolving Credit and the Administrative Agent shall endeavor to have an L/C or Banker's Acceptance issued for the account of one or more of the Loan Parties, in each instance if duly and timely requested by the Lead Borrower as provided herein provided that:

(a) No OverLoan is then outstanding and none will result therefrom.

(b) No Borrower is then in Default and none will thereby become in Default.

(c) Notwithstanding anything to the contrary contained in this Agreement, L/C's and Bankers Acceptances issued for the account of the Parent shall be limited to those L/Cs required to support the workman's compensation obligations of the Parent and its Subsidiaries (other than DSW, DSW Shoe and their Subsidiaries) and for no other purpose.

2.5. REVOLVING CREDIT LOAN REQUESTS.

(a) Requests for loans and advances under the Revolving Credit or for the continuance or conversion of an interest rate applicable to a Revolving Credit Loan may be requested by the Lead Borrower in accordance with the provisions of Sections 2.5(b) through and including 2.5(d) hereof, by written or telephonic notice (in the case of telephonic notice, promptly confirmed in writing if so requested by the Administrative Agent). Such notice of borrowing shall be substantially in the form of EXHIBIT 2.5 hereto, signed by the Lead Borrower and transmitted to the Administrative Agent by telecopier. Each such notice shall be irrevocable and shall specify (i) the proposed Borrower (i.e. Filene's or one of the Value City Entities, as applicable), (ii) the amount of the proposed borrowing and the date thereof (which shall be a Business Day) and
(iii) whether the borrowing then being requested is to be a borrowing of Base Margin Loans or LIBOR Loans and, if LIBOR Loans, the Interest Period with respect thereto. If no election is made as to the type of Loan or no election of Interest Period is specified in any such notice for a borrowing of LIBOR Loans, such notice shall be deemed a request for borrowing of Base Margin Loans. The Administrative Agent may rely on any telephonic request for a borrowing to the same extent that the Administrative Agent may rely on a written request. The Borrowers shall bear all risks related to the giving of borrowing requests telephonically.

(b) Subject to the provisions of this Agreement, the Lead Borrower may, on behalf of any Borrower, request a Revolving Credit Loan and elect an interest rate and Interest Period to be applicable to that Revolving Credit Loan by giving notice to the Administrative Agent by no later than the following:

(i) If such Revolving Credit Loan is to be or is to be converted to a Base Margin Loan: By 2:00 p.m. on the Business Day on which the subject Revolving Credit Loan is to be made or is to be so converted (provided that if notice is furnished after 12:00 noon on any Business Day, the Revolving Credit Loan so requested shall be deemed a request for a SwingLine Loan). Base Margin Loans requested by the Lead Borrower, other than those resulting from the conversion of a LIBOR Loan, shall not be less than $250,000 and in increments of $10,000 in excess of such minimum.

(ii) If such Revolving Credit Loan is to be, or is to be continued as, or converted to, a LIBOR Loan: By 2:00 p.m. three (3) LIBOR Business Days before the commencement of any new Interest Period or the end of the then applicable Interest Period. LIBOR Loans and conversions to LIBOR Loans shall each be not less than $3,000,000 and in increments of $1,000,000 in excess of such minimum.

(iii) Any LIBOR Loan which matures while any Borrower is in Default shall be converted, at the option of the Administrative Agent, to a Base Margin Loan notwithstanding any notice from the Lead Borrower that such Loan is to be continued as a LIBOR Loan.

(iv) LIBOR Loans may not be converted or continued as LIBOR Loans at any time other than the end of the Interest Period applicable thereto unless the Borrowers shall pay, upon demand, any amounts due pursuant to Section 2.11(f) hereof.

(c) Any request for a Revolving Credit Loan or for the continuance or conversion of an interest rate applicable to a Revolving Credit Loan which is made after the applicable deadline therefor, as set forth above, shall be deemed to have been made at the opening of business on the then next Business Day or LIBOR Business Day, as applicable.

(d) The Lead Borrower may, on behalf of any Loan Party, request that the Administrative Agent cause the issuance by the Issuer of L/Cs or Banker's Acceptances for the account of the Borrowers as provided in Section 2.17. Notwithstanding anything to the contrary contained in this Agreement, L/C's and Bankers Acceptances issued for the account of the Parent shall be limited to those L/Cs required to support the workman's compensation obligations of the Parent and its Subsidiaries (other than DSW, DSW Shoe and their Subsidiaries) and for no other purpose.

(e) The Administrative Agent may rely on any request for a loan or advance, or other financial accommodation under the Revolving Credit which the Administrative Agent, in good faith, believes to have been made by a Person duly authorized to act on behalf of the Lead Borrower and may decline to make any such requested loan or advance, or issuance, or to provide any such financial accommodation pending the Administrative Agent's being furnished with such documentation concerning that Person's authority to act as may be satisfactory to the Administrative Agent.

(f) A request by the Lead Borrower for loan or advance, or other financial accommodation under the Revolving Credit shall be irrevocable and shall constitute certification by each Borrower that as of the date of such request, each of the following is true and correct:

(i) There has been no material adverse change in the Borrowers' financial condition from the most recent financial information furnished the Agent or any Revolving Credit Lender pursuant to this Agreement.

(ii) Each representation which is made herein or in any of the Loan Documents is then true and complete in all material respects as of and as if made on the date of such request except to the extent that any of the same relates expressly to a different date.

(iii) Unless accompanied by a written certificate of the Lead Borrower's President or its Chief Financial Officer describing (in reasonable detail) the facts and circumstances of any Default then existing and the steps (if any) being taken to remedy such condition, that no Default has occurred and is continuing.

2.6. SUSPENSION OF REVOLVING CREDIT. If, at any time or from time to time, any Borrower is in Default:

(a) The Administrative Agent may, and at the direction of the SuperMajority Lenders shall, suspend the Revolving Credit immediately, in which event, neither the

Administrative Agent nor any Revolving Credit Lender shall be obligated, during such suspension, to make any loans or advance to any Borrower, or to provide any financial accommodation hereunder or to seek the issuance of any L/C or of any Banker's Acceptance for the account of any Loan Party. Nothing contained herein shall limit the right of the Administrative Agent to make Protective OverAdvances or the obligation of the Revolving Credit Lenders with respect to SwingLine Loans, Protective OverAdvances, L/Cs and Banker's Acceptances during such suspension period.

(b) The Administrative Agent may, and at the direction of the SuperMajority Lenders shall, suspend the right of the Lead Borrower to request any LIBOR Loan or to convert any Base Margin Loan to a LIBOR Loan.

2.7. MAKING OF REVOLVING CREDIT LOANS.

(a) A loan or advance under the Revolving Credit shall be made by the transfer of the proceeds of such loan or advance to the Operating Account of the applicable Division. The proceeds of any Revolving Credit Loan shall be made available before 3:00 p.m. on the date requested in accordance with Section 2.5 hereof.

(b) A loan or advance shall be deemed to have been made under the Revolving Credit (and the Borrowers shall be indebted to the Administrative Agent and the Revolving Credit Lenders for the amount thereof immediately) at the following:

(i) The Administrative Agent's initiation of the transfer of the proceeds of such loan or advance in accordance with the Lead Borrower's instructions (if such loan or advance is of funds requested by the Lead Borrower).

(ii) The charging of the amount of such loan to the Loan Account (in all other circumstances).

(c) Absent gross negligence, bad faith or willful misconduct, there shall not be any recourse to or liability of the Administrative Agent or any Revolving Credit Lender, on account of:

(i) Any delay in the making of any loan or advance requested under the Revolving Credit.

(ii) Any delay by any bank or other depository institution in treating the proceeds of any such loan or advance as collected funds.

(iii) Any delay in the receipt, and/or any loss, of funds which constitute a loan or advance under the Revolving Credit, the wire transfer of which was properly initiated by the Administrative Agent in accordance with wire instructions provided to the Administrative Agent by the Lead Borrower.

2.8. SWINGLINE LOANS.

(a) For ease of administration, Base Margin Loans may be made by the SwingLine Lender (in the aggregate, the "SWINGLINE LOANS") in accordance with the procedures

set forth in this Agreement for the making of loans and advances under the Revolving Credit. The aggregate unpaid principal balance of the SwingLine Loans shall not, as to all Borrowers, at any one time be in excess of the lesser of
(i) as to all Borrowers, the SwingLine Loan Ceiling, or (ii) as to any Division, Filene's Availability, or VC Availability, as applicable. The SwingLine Lender shall not make a SwingLine Loan if the SwingLine Lender has received notice from the Administrative Agent that the Administrative Agent has suspended, or the Administrative Agent has received written notice from the SuperMajority Lenders instructing the Administrative Agent to suspend, the Revolving Credit in accordance with the terms hereof. Absent such notification, the SwingLine Lender
(x) shall not otherwise be required to determine whether the conditions precedent to such SwingLine Loan have been satisfied or whether the requested borrowing would cause Availability, Filene's Availability or VC Availability, as applicable, to be exceeded, and (y) shall be entitled in all cases to have each Revolving Credit Lender make Revolving Credit Loans in settlement of such SwingLine Loans in accordance with the provisions of Section 13.2 hereof.

(b) The aggregate unpaid principal balance of SwingLine Loans shall bear interest at the rate applicable to Base Margin Loans (or a money market based rate quoted by the Agent and accepted by the Lead Borrower) and shall be repayable as a loan under the Revolving Credit.

(c) The Borrowers' obligation to repay SwingLine Loans shall be evidenced by a Note in the form of EXHIBIT 2.8(C), annexed hereto, executed by the Borrowers, and payable to the SwingLine Lender. Neither the original nor a copy of that Note shall be required, however, to establish or prove any Liability. Upon receipt of an affidavit of an officer of, and a customary indemnity from, a SwingLine Lender as to the loss, theft, destruction or mutilation of the SwingLine Note, the Borrowers will issue in lieu thereof a replacement SwingLine Note in the same principal amount thereof and of like tenor.

(d) For all purposes of this Loan Agreement, the SwingLine Loans and the Borrowers' obligations to the SwingLine Lender constitute Revolving Credit Loans and are secured as "Liabilities".

(e) SwingLine Loans shall be subject to periodic settlement with the Revolving Credit Lenders as provided in this Agreement.

2.9. THE LOAN ACCOUNT.

(a) An account ("LOAN ACCOUNT") shall be opened on the books of the Administrative Agent in which a record shall be kept of all loans and advances made under the Revolving Credit (including, without limitation, Swingline Loans). The Loan Account shall also contain separate entries for loans and advances made to each Division.

(b) The Administrative Agent shall also keep a record (either in the Loan Account or elsewhere, as the Administrative Agent may from time to time elect) of all interest, fees, service charges, costs, expenses, and other debits owed to the Agent and each Revolving Credit Lender on account of the Liabilities from each Borrower and from each Division and of all credits against such amounts so owed.

(c) All credits against the Liabilities shall be conditional upon final payment to the Administrative Agent for the account of the Agent or Revolving Credit Lender entitled thereto of the items giving rise to such credits. The amount of any item credited against the Liabilities which is charged back against the Agent or any Revolving Credit Lender or is disgorged for any reason or is not so paid shall be a Liability and shall be added to the Loan Account, whether or not the item so charged back or not so paid is returned.

(d) Except as otherwise provided herein, all fees, service charges, costs, and expenses for which any Borrower is obligated hereunder are payable on demand.

(e) The Administrative Agent, without the request of the Lead Borrower, may advance under the Revolving Credit any interest, fee, service charge, or other payment to which the Agent or any Revolving Credit Lender is entitled from any Borrower pursuant hereto and may charge the same to the Loan Account notwithstanding that an OverLoan may result thereby; provided that the Administrative Agent shall not charge the Loan Account for any third-party expenses incurred by the Agent (such as fees for attorneys, appraisers and commercial finance examinations) without first having furnished the Lead Borrower with a copy of the invoice therefor two (2) Business Days prior to the date that the Loan Account is to be so charged.. Any such advance shall be deemed a Base Margin Loan. Such action on the part of the Administrative Agent shall not constitute a waiver of the Administrative Agent's rights and each Borrower's obligations under Section 2.11(b). Any amount which is added to the principal balance of the Loan Account as provided in this Section shall bear interest at the interest rate then and thereafter applicable to Base Margin Loans. The Administrative Agent shall promptly furnish the Lead Borrower with a detailed statement itemizing any amounts so charged to the Loan Account.

(f) Any statement rendered by the Administrative Agent or any Revolving Credit Lender to the Lead Borrower concerning the Liabilities shall be considered correct and accepted by each Borrower and shall, absent manifest error, be conclusively binding upon each Borrower unless the Lead Borrower provides the Administrative Agent with written objection thereto within twenty
(20) days from the receipt by the Lead Borrower of such statement, which written objection shall indicate, with particularity, the reason for such objection. The Loan Account and the Administrative Agent's books and records concerning the loan arrangement contemplated herein and the Liabilities shall be prima facie evidence and proof of the items described therein.

2.10. THE REVOLVING CREDIT NOTES. The Borrowers' obligation to repay loans and advances under the Revolving Credit, with interest as provided herein, shall be evidenced by Notes (each, a "REVOLVING CREDIT NOTE") in the form of EXHIBIT 2.10, annexed hereto, executed by each Borrower, one payable to each Revolving Credit Lender. Neither the original nor a copy of any Revolving Credit Note shall be required, however, to establish or prove any Liability. Upon receipt of an affidavit of an officer of, and a customary indemnity from, a Revolving Credit Lender as to the loss, theft, destruction or mutilation of the Revolving Credit Note, the Borrowers will issue in lieu thereof a replacement Revolving Credit Note in the same principal amount thereof and of like tenor.

2.11. PAYMENT OF THE LOAN ACCOUNT.

(a) The Borrowers may repay all or any portion of the principal balance of the Loan Account from time to time until the Termination Date.

(b) Each Borrower, without notice or demand from the Administrative Agent or any Revolving Credit Lender, shall immediately pay the Administrative Agent that amount, from time to time, which is necessary so that there is no OverLoan outstanding.

(c) Subject to Section 8.4, during the continuance of a Cash Control Event, the Borrowers shall repay the Revolving Credit:

(i) subject to the terms of the Intercreditor Agreement, in an amount equal to the proceeds realized from the sale, refinancing, or other disposition of, or realization upon, any Collateral; and

(ii) in accordance with the provisions of Article 8 hereof.

All amounts prepaid under this Section 2.11 may be reborrowed under the Revolving Credit, subject to and in accordance with, the terms of this Agreement.

(d) The Borrowers shall repay the then entire unpaid balance of the Loan Account and all other Liabilities on the Termination Date.

(e) The Administrative Agent shall endeavor to cause the application of payments (if any), pursuant to Sections 2.11(a) and 2.11(b) against LIBOR Loans then outstanding in such manner as results in the least cost to the Borrowers, but shall not have any affirmative obligation to do so nor liability on account of the Administrative Agent's failure to have done so. In no event shall action or inaction taken by the Administrative Agent excuse any Borrower from any indemnification obligation under Section 2.11(f).

(f) The Borrowers shall indemnify the Administrative Agent and each Revolving Credit Lender and hold the Administrative Agent and each Revolving Credit Lender harmless from and against any loss, cost or expense (including loss of anticipated profits and amounts payable by the Administrative Agent or such Revolving Credit Lender on account of "breakage fees" (so-called)) which the Administrative Agent or such Revolving Credit Lender may sustain or incur (including, without limitation, by virtue of acceleration after the occurrence of any Event of Default) as a consequence of the following:

(i) Failure by any Borrower to pay any of the principal amount of or any interest on any LIBOR Loan as and when due and payable, including any such loss or expense arising from interest or fees payable by such Revolving Credit Lender in order to maintain its LIBOR Loans.

(ii) Failure by any Borrower to make a borrowing or conversion after the Lead Borrower has given (or is deemed to have given) a request for a Revolving Credit Loan or a request to convert a Revolving Credit Loan from one applicable interest rate to another.

(iii) The making of any payment on a LIBOR Loan or the making of any conversion of any such Loan to a Base Margin Loan on a day that is not the last day of the applicable Interest Period with respect thereto.

(g) Upon at least two (2) Business Days' prior written notice to the Administrative Agent, the Borrowers may at any time in whole permanently terminate, or from time to time in part permanently reduce, the Revolving Credit Dollar Commitments. Each such reduction shall be in the principal amount of $5,000,000 or any integral multiple thereof. Each such reduction or termination shall (i) be applied ratably to the Revolving Credit Dollar Commitments of each Revolving Credit Lender and (ii) be irrevocable when given. At the effective time of each such termination, the Borrowers shall pay to the Administrative Agent for application as provided herein any amount by which the unpaid balance of the Loan Account and aggregate undrawn Stated Amount of all then outstanding L/Cs and Banker's Acceptances outstanding on such date exceeds the amount to which the Revolving Credit Dollar Commitments are so reduced. Any such reduction or termination of the Revolving Credit Dollar Commitments may not be reinstated.

2.12. INTEREST ON REVOLVING CREDIT LOANS.

(a) Each Revolving Credit Loan shall bear interest at the Base Margin Rate unless timely notice is given (as provided in Section 2.5) that the subject Revolving Credit Loan (or a portion thereof) is, or is to be converted to, a LIBOR Loan.

(b) Each Revolving Credit Loan which consists of a LIBOR Loan shall bear interest at the applicable LIBOR Rate.

(c) Subject to, and in accordance with, the provisions of this Agreement, the Lead Borrower may cause all or a part of the unpaid principal balance of the Loan Account to bear interest at the Base Margin Rate or the LIBOR Rate as specified from time to time by the Lead Borrower by notice to the Administrative Agent.

(d) For ease of reference and administration, each part of the Loan Account which bears interest at the same rate of interest and for the same Interest Period is referred to herein as if it were a separate "Revolving Credit Loan".

(e) The Lead Borrower shall not select, renew, or convert any interest rate for a Revolving Credit Loan such that, in addition to interest at the Base Margin Rate, there are more than ten (10) Interest Periods for LIBOR Loans in the aggregate for all Borrowers applicable to the Revolving Credit Loans at any one time.

(f) The Borrowers shall pay accrued and unpaid interest on each Revolving Credit Loan to its Division in arrears as follows:

(i) On the applicable Interest Payment Date for that Revolving Credit Loan.

(ii) On the Termination Date and on the End Date.

(iii) Following the occurrence of any Event of Default, with such frequency as may be determined by the Administrative Agent.

(g) Following the occurrence of any Event of Default (and whether or not the Agent exercises its rights on account thereof), all Revolving Credit Loans shall bear interest, at the option of the Administrative Agent or at the instruction of the SuperMajority Lenders, at a rate which is the aggregate of the applicable rate (including the Applicable Margin) for Base Margin Loans and/or LIBOR Loans, as applicable, plus two percent (2%) per annum.

2.13. UNDERWRITING FEE; COLLATERAL MONITORING FEE. In addition to any other fee or expense to be paid by the Borrowers on account of the Revolving Credit, the Borrowers shall pay the Administrative Agent the "UNDERWRITING FEE", THE "STRUCTURING FEE" and the "COLLATERAL MONITORING FEE" at the times and in the amounts as set forth the Fee Letter.

2.14. UNUSED LINE FEE. In addition to any other fee to be paid by the Borrowers on account of the Revolving Credit, the Borrowers shall pay the Administrative Agent, for the account of the Revolving Credit Lenders, the "UNUSED LINE FEE" (so referred to herein) of 0.25% per annum of the average difference, during the month just ended (or relevant period with respect to the payment being made on the Termination Date) between the Revolving Credit Ceiling and the aggregate of the unpaid principal balance of the Loan Account and the undrawn Stated Amount of L/Cs and Banker's Acceptances outstanding during the relevant period. The Unused Line Fee shall be paid in arrears, on the first day of each month after the execution of this Agreement and on the Termination Date.

2.15. CONCERNING FEES. The Borrowers shall not be entitled to any credit, rebate or repayment of any fee earned by the Administrative Agent or any Revolving Credit Lender pursuant to this Agreement or any Loan Document notwithstanding any termination of this Agreement or suspension or termination of the Administrative Agent's and any Revolving Credit Lender's respective obligation to make loans and advances hereunder.

2.16. AGENT'S AND REVOLVING CREDIT LENDERS' DISCRETION.

(a) Each reference in the Loan Documents to the exercise of reasonable, good faith discretion or the like by the Agent or any Revolving Credit Lender shall be to such Person's exercise of its judgment, in good faith, based upon such information of which that Person then has actual knowledge.

(b) The burden of establishing the failure of the Agent or any Revolving Credit Lender to have acted in a reasonable manner in such Person's exercise of such discretion shall be the Borrowers'.

2.17. PROCEDURES FOR ISSUANCE OF L/CS AND BANKER'S ACCEPTANCES.

(a) The Lead Borrower may request, either directly or, as provided in Section 2.21(a), through Retail Ventures Imports, Inc., that an Issuer cause the issuance of L/Cs or Banker's Acceptances for the account of any Loan Party. Requests for L/Cs and Banker's Acceptances shall be given by the Lead Borrower to the Administrative Agent and the Issuer not later than 2:00 p.m. three (3) Business Days prior to the specified date for the issuance of the

requested L/C or Banker's Acceptance. Requests for L/Cs and Banker's Acceptances may be requested by the Lead Borrower by written or telephonic notice (in the case of telephonic notice, promptly confirmed in writing if so requested by the Administrative Agent or the Issuer). Each such notice shall be irrevocable and shall specify with respect to each L/C and Banker's Acceptance requested (i) the Borrower which is to be the account party for whose benefit the L/C or Banker's Acceptance is being issued, (ii) the face amount of the proposed L/C or Banker's Acceptance, which shall be denominated in dollars and the intended date of issuance thereof (which shall be a Business Day), (iii) the beneficiary, and
(iv) the terms (including the anticipated expiry date) of the L/C or Banker's Acceptance. The Administrative Agent and the Issuer may rely on any telephonic request for the issuance of a L/C or Banker's Acceptance to the same extent that the Administrative Agent and the Issuer may rely on a written request. The Borrowers shall bear all risks related to the giving of requests for the issuance of L/Cs or Banker's Acceptances telephonically. Notwithstanding anything to the contrary contained in this Agreement, (i) L/C's and Bankers Acceptances issued for the account of the Parent shall be limited to those L/Cs required to support the workman's compensation obligations of the Parent and its Subsidiaries (other than DSW, DSW Shoe and their Subsidiaries) and for no other purpose, and (ii) no L/C or Banker's Acceptance shall be issued by any Issuer which is not also the Administrative Agent unless such Issuer shall have received notice from the Administrative Agent that the conditions to such issuance have been met. Any Issuer shall notify the Administrative Agent in writing on each Business Day of all L/Cs or Bankers Acceptances issued on the prior Business Day by such Issuer.

(b) The Administrative Agent and/or the applicable Issuer will, subject to the terms of this Agreement, issue any L/C or Banker's Acceptance so requested by the Lead Borrower from and including the Effective Date until the thirtieth (30th) Business Day prior to the Maturity Date, provided that, at the time that the request is made, the Revolving Credit has not been suspended as provided in Section 2.6 and if so issued:

(i) The aggregate Stated Amount of all L/Cs and Banker's Acceptances then outstanding, does not exceed $75,000,000;

(ii) The expiry of the L/C or Banker's Acceptance is not later than the earlier of thirty (30) days prior to the Maturity Date or the following:

(A) As to standby L/Cs: one (1) year from initial issuance (or in the case of renewal or extension thereof, one year after such renewal or extension), provided that each standby L/C may, upon the request of the Lead Borrower, include a provision whereby, subject to the approval of the Issuer, such standby L/C may be renewed for additional consecutive periods of twelve (12) months or less (but not beyond the date that is thirty Business Days prior to the Maturity Date) unless the Issuer notifies the beneficiary thereof at least 30 days prior to the then applicable expiration date that such L/C will not be renewed.

(B) As to documentary L/Cs: ninety (90) days from issuance.

(C) As to Banker's Acceptances: ninety (90) days from issuance.

(iii) If, notwithstanding the foregoing, the Administrative Agent causes the issuance of an L/C or Banker's Acceptance, the expiry of which is later than the Maturity Date, it shall be 105% cash collateralized at its issuance; and

(iv) An OverLoan will not result from the issuance of the subject L/C or Banker's Acceptance.

(c) Concurrently with requesting the issuance of a L/C or a Banker's Acceptance, the applicable Borrower shall execute and deliver to the Issuer in respect of such requested L/C or Banker's Acceptance a reimbursement or similar agreement in the Issuer's then standard form of application for and reimbursement agreement with respect to letters of credit and banker's acceptances; provided however that in the event of any conflict between the provisions of such reimbursement agreement and this Agreement, the provisions of this Agreement shall govern.

(d) Absent gross negligence, bad faith or willful misconduct, there shall not be any recourse to, nor liability of, the Administrative Agent or any Revolving Credit Lender on account of

(i) Any delay or refusal by an Issuer to issue an L/C or a Banker's Acceptance;

(ii) Any action or inaction of an Issuer on account of or in respect to, any L/C or any Banker's Acceptance.

(e) Immediately upon the issuance of any L/C or any Banker's Acceptance by the Issuer (or the amendment of a L/C or Banker's Acceptance increasing the amount thereof), and without any further action on the part of the Issuer, the Issuer shall be deemed to have sold to each Revolving Credit Lender, and each such Revolving Credit Lender shall be deemed unconditionally and irrevocably to have purchased from the Issuer, without recourse or warranty, an undivided interest and participation, to the extent of such Revolving Credit Lender's Revolving Credit Commitment Percentage, in such L/C and Banker's Acceptance, each drawing thereunder and the obligations of the Borrowers under this Agreement and the other Loan Documents with respect thereto. In consideration thereof, each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent for the account of the Issuer its Revolving Credit Commitment Percentage of each disbursement made by the Issuer with respect to a L/C or Banker's Acceptance which is not reimbursed by the Borrowers. Each Revolving Credit Lender acknowledges and agrees that its obligations hereunder are absolute and unconditional and shall not be effected by any event or circumstance whatsoever, including the existence of a Default or the suspension of the Revolving Credit. Any action taken or omitted by the Issuer under or in connection with a L/C or Banker's Acceptance, if taken or omitted in the absence of gross negligence, actual bad faith, or willful misconduct, shall not create for the Issuer any resulting liability to any Revolving Credit Lender.

(f) The Borrowers shall reimburse the Issuer for the amount of any honoring of a drawing under an L/C or Banker's Acceptance on the same day on which such honoring takes place in immediately available funds in U.S. dollars. The Administrative Agent, without the request of any Borrower, may advance under the Revolving Credit (and charge to the Loan

Account) the amount of any honoring of any L/C or Banker's Acceptance and other amount for which any Borrower, the Issuer, or the Revolving Credit Lenders become obligated on account of, or in respect to, any L/C or Banker's Acceptance. Such advance shall be a Base Margin Loan and shall be made whether or not any Borrower is in Default or such advance would result in an OverLoan. Such action shall not constitute a waiver of the Administrative Agent's rights under Section 2.11(b) hereof.

2.18. FEES FOR L/CS AND BANKER'S ACCEPTANCES.

(a) The applicable Borrowers shall pay the Administrative Agent, for the account of the Revolving Credit Lenders, on the first day of each calendar month, in arrears, a fee (each, an "L/C Fee") equal to the following per annum percentages of the average Stated Amount of the following categories of L/Cs outstanding during the subject month for such Borrowers' Division:

(i) As to standby L/Cs: the Applicable Margin for LIBOR Loans.

(ii) As to documentary L/Cs: the Applicable Margin for LIBOR Loans minus 0.50%.

(iii) After the occurrence and during the continuance of an Event of Default, at the option of the Administrative Agent (or at the instruction of the SuperMajority Lenders), the L/C Fee shall be increased for any L/Cs which from time to time are not cash collateralized in the amounts required in accordance with the provisions of this Agreement by an amount equal to two percent (2%) per annum.

(b) The applicable Borrowers shall pay the Administrative Agent, for the account of the Revolving Credit Lenders, on the first day of each month, in arrears, a fee (each, a "BANKER'S ACCEPTANCE FEE") equal to the Applicable Margin for LIBOR Loans minus 0.50% of the average Stated Amount of the Banker's Acceptances outstanding during the subject month for such Borrowers' Division. After the occurrence and during the continuance of an Event of Default, at the option of the Administrative Agent (or at the instruction of the SuperMajority Lenders), the Banker's Acceptance Fee shall be increased for any Banker's Acceptances which from time to time are not cash collateralized in the amounts required in accordance with the provisions of this Agreement by an amount equal to two percent (2%) per annum.

(c) In addition to the fees to be paid as provided in Subsections 2.18(a) and 2.18(b), above, the Borrowers shall pay to the Administrative Agent (or to the Issuer, if so requested by Administrative Agent), on demand, all issuance, processing, negotiation, amendment, and administrative fees and other amounts charged by the Issuer on account of, or in respect to, any L/C or Banker's Acceptance issued for its Division.

(d) If any change in Applicable Law shall either:

(i) impose, modify or deem applicable any reserve, special deposit or similar requirements against letters of credit heretofore or hereafter issued by any Issuer or with respect to which any Revolving Credit Lender or any Issuer has an obligation to lend to fund drawings under any L/C or any Banker's Acceptance; or

(ii) impose on any Issuer any other condition or requirements relating to any such letters of credit or banker's acceptance;

and the result of any event referred to in Section 2.18(d)(i) or 2.18(d)(ii), above, shall be to increase the cost to any Revolving Credit Lender or to any Issuer of issuing or maintaining any L/C or Banker's Acceptance (which increase in cost shall be the result of such Issuer's reasonable allocation among that Revolving Credit Lender's or Issuer's letter of credit customers of the aggregate of such cost increases resulting from such events), then, upon demand by the Administrative Agent and delivery by the Administrative Agent to the Lead Borrower of a certificate of an officer of the subject Revolving Credit Lender or the subject Issuer describing such change in law, executive order, regulation, directive, or interpretation thereof, its effect on such Revolving Credit Lender or such Issuer, and the basis for determining such increased costs and their allocation, the Borrowers shall immediately pay to the Administrative Agent, from time to time as specified by the Administrative Agent, such amounts as shall be sufficient to compensate the subject Revolving Credit Lender or the subject Issuer for such increased cost. Any Revolving Credit Lender's or any Issuer's determination of costs incurred under Section 2.18(d)(i) or 2.18(d)(ii), above, and the allocation, if any, of such costs among the Borrowers and other letter of credit customers of such Revolving Credit Lender or such Issuer, if done in good faith and made on an equitable basis and in accordance with such officer's certificate, shall, absent manifest error, be presumed to be accurate.

2.19. CONCERNING L/C'S AND BANKER'S ACCEPTANCES.

(a) None of the Issuer, the Issuer's correspondents, any Revolving Credit Lender, the Administrative Agent, or any advising, negotiating, or paying bank with respect to any L/C or Banker's Acceptance shall be responsible in any way for:

(i) The performance by any beneficiary under any L/C or Banker's Acceptance of that beneficiary's obligations to any Borrower.

(ii) The form, sufficiency, correctness, genuineness, authority of any Person signing; falsification; or the legal effect of; any documents called for under any L/C or Banker's Acceptance if (with respect to the foregoing) such documents on their face appear to be in order.

(b) The Issuer may honor, as complying with the terms of any L/C or any Banker's Acceptance and of any drawing thereunder, any drafts or other documents otherwise in order, but signed or issued by an administrator, executor, conservator, trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, liquidator, receiver, or other legal representative of the party authorized under such L/C or Banker's Acceptance to draw or issue such drafts or other documents.

(c) The Issuer may reject any drafts and documents presented under any L/C or any Banker's Acceptance which are discrepant in any manner, notwithstanding any prior course of dealing by the Issuer in honoring drafts under L/Cs or Banker's Acceptances.

(d) Unless otherwise agreed to, in the particular instance, each Borrower hereby authorizes any Issuer to:

(i) Select an advising bank, if any.

(ii) Select a paying bank, if any.

(iii) Select a negotiating bank.

(e) All directions, correspondence, and funds transfers relating to any L/C or any Banker's Acceptance are at the risk of the Borrowers. The Issuer shall have discharged the Issuer's obligations under any L/C or Banker's Acceptance which, or the drawing under which, includes payment instructions, by the initiation of the method of payment called for in, and in accordance with, such instructions (or by any other commercially reasonable and comparable method). None of the Administrative Agent, any Revolving Credit Lender, or the Issuer shall have any responsibility for any inaccuracy, interruption, error, or delay in transmission or delivery by post, telegraph or cable, or for any inaccuracy of translation.

(f) The Administrative Agent's, each Revolving Credit Lender's, and the Issuer's rights, powers, privileges and immunities specified in or arising under this Agreement are in addition to any heretofore or at any time hereafter otherwise created or arising, whether by statute or rule of law or contract.

(g) Except to the extent otherwise expressly provided hereunder or agreed to in writing by the Issuer and the Lead Borrower, documentary L/Cs will be governed by the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce, Publication No. 500, and standby L/Cs will be governed by International Standby Practices ISP98 (adopted by the International Chamber of Commerce on April 6, 1998) and any respective subsequent revisions thereof.

(h) The obligations of the Borrowers under this Agreement with respect to L/Cs and Banker's Acceptances are absolute, unconditional, and irrevocable and shall be performed strictly in accordance with the terms hereof under all circumstances, whatsoever including, without limitation, the following:

(i) Any lack of validity or enforceability or restriction, restraint, or stay in the enforcement of this Agreement, any L/C, any Banker's Acceptance, or any other agreement or instrument relating thereto.

(ii) Any Borrower's consent to any amendment or waiver of, or consent to the departure from, any L/C or any Banker's Acceptance.

(iii) The existence of any claim, set-off, defense, or other right which any Borrower may have at any time against the beneficiary of any L/C or Banker's Acceptance.

(iv) Any good faith honoring of a drawing under any L/C or Banker's Acceptance, which drawing possibly could have been dishonored based upon a strict construction of the terms of the L/C or Banker's Acceptance.

2.20. CHANGED CIRCUMSTANCES.

(a) The Administrative Agent may advise the Lead Borrower that the Administrative Agent has made the good faith determination (which determination shall be final and conclusive) of any of the following:

(i) Adequate and fair means do not exist for ascertaining the rate for LIBOR Loans.

(ii) The continuation of or conversion of any Revolving Credit Loan to a LIBOR Loan has been made impracticable or unlawful by the occurrence of a contingency that materially and adversely affects the applicable market or the compliance by the Administrative Agent or any Revolving Credit Lender in good faith with any Applicable Law.

(iii) The indices on which the interest rates for LIBOR Loans are based shall no longer represent the effective cost to the Administrative Agent or any Revolving Credit Lender for U.S. dollar deposits in the interbank market for deposits in which it regularly participates.

(b) In the event that the Administrative Agent advises the Lead Borrower of an occurrence described in Section 2.20(a), then, until the Administrative Agent notifies the Lead Borrower that the circumstances giving rise to such notice no longer apply:

(i) The obligation of the Administrative Agent or each Revolving Credit Lender to make loans of the type affected by such changed circumstances or to permit the Lead Borrower to select the affected interest rate as otherwise applicable to any Revolving Credit Loans shall be suspended.

(ii) Any notice which the Lead Borrower had given the Administrative Agent with respect to any LIBOR Loan, the time for action with respect to which has not occurred prior to the Administrative Agent's having given notice pursuant to Section 2.20(a), shall be deemed at the option of the Administrative Agent to not having been given.

2.21. DESIGNATION OF LEAD BORROWER AS BORROWERS' AGENT.

(a) Each Borrower hereby irrevocably designates and appoints the Lead Borrower as that Borrower's agent to obtain loans and advances under the Revolving Credit, the proceeds of which shall be available to each Borrower for those uses as those set forth in Section 2.1(d) and to request the issuance of L/Cs and Banker's Acceptances for such Borrower. The Value City Entities and Filene's further irrevocably designate and appoint Retail Ventures Imports, Inc. as their agent to request the issuance of L/Cs and Banker's Acceptances for such Borrower (to the extent that the Lead Borrower does not make such request). As the disclosed principal for its agent, each Borrower shall be obligated to the Agent and each Revolving Credit Lender on account of loans and advances so made to, and L/Cs and Banker's Acceptances so issued for, its Division under the Revolving Credit as if made directly by the Revolving Credit Lenders to that Borrower, notwithstanding the manner by which such loans and advances are recorded on the books and records of the Lead Borrower and of any Borrower.

(b) Each Borrower recognizes that credit available to it under the Revolving Credit is in excess of and on better terms than it otherwise could obtain on and for its own account and that one of the reasons therefor it is joining in the credit facility contemplated herein with all other Borrowers. Consequently, each Borrower hereby assumes and agrees to fully, faithfully, and punctually discharge all Liabilities of all of the Borrowers and hereby guarantees the payment and performance of all Liabilities of all other Borrowers. In any action or proceeding with respect to any Borrower involving any Applicable Law, including, without limitation, state or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of such Borrower as a guarantor hereunder would otherwise be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability hereunder, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Borrower, any Lender, the Agent or any other Person, be automatically limited and reduced to the highest amount which is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding after taking into account such Borrower's right of indemnification and contribution from each other Borrower under Section 20.23(d) hereof.

(c) The proceeds of each loan and advance provided under the Revolving Credit which is requested by the Lead Borrower shall be deposited into the Operating Account of the applicable Division. Neither the Administrative Agent nor any Revolving Credit Lender shall have any obligation to see to the application of such proceeds.

2.22. REVOLVING CREDIT LENDERS' COMMITMENTS.

(a) Subject to Section 17.1 (which provides for assignments and assumptions of commitments), each Revolving Credit Lender's "REVOLVING CREDIT COMMITMENT PERCENTAGE", and "REVOLVING CREDIT DOLLAR COMMITMENT" (respectively so referred to herein) is set forth on EXHIBIT 2.22, annexed hereto.

(b) The obligations of each Revolving Credit Lender are several and not joint. No Revolving Credit Lender shall have any obligation to make any loan under the Revolving Credit in excess of either of the following:

(i) That Revolving Credit Lender's Revolving Credit Commitment Percentage of the subject loan or advance or of Availability, Filene's Availability or VC Availability, as applicable.

(ii) Any loan which, when aggregated with all other loans made by that Revolving Credit Lender under the Revolving Credit and then outstanding, exceed that Revolving Credit Lender's Revolving Credit Dollar Commitment.

(c) No Revolving Credit Lender shall have any liability to the Borrowers on account of the failure of any other Revolving Credit Lender to provide any loan or advance under the Revolving Credit nor any obligation to make up any shortfall which may be created by such failure.

(d) The Revolving Credit Dollar Commitments, Revolving Credit Commitment Percentages, and identities of the Revolving Credit Lenders may be changed, from time to time by the reallocation or assignment of Revolving Credit Dollar Commitments and Revolving Credit Commitment Percentages among the Revolving Credit Lenders or with other Persons who determine to become "Revolving Credit Lenders", provided, however unless an Event of Default has occurred and is continuing (in which event, no consent of any Borrower is required) any assignment to a Person (other than to another Lender or to any domestic Affiliate of any Lender) shall be subject to the prior consent of the Lead Borrower (not to be unreasonably withheld or delayed), which consent will be deemed given unless the Lead Borrower provides the Administrative Agent with written objection, not more than five (5) Business Days after the Administrative Agent shall have given the Lead Borrower written notice of a proposed assignment), provided that the Lead Borrower's consent shall in no event be required with respect to the following: (i) an assignment to another Revolving Credit Lender; or (ii) an assignment to a transferee of a Revolving Credit Lender's rights in and to a material portion of such Revolving Credit Lender's portfolio of asset based credit facilities.

(e) Upon written notice given the Lead Borrower from time to time by the Administrative Agent, of any assignment or allocation referenced in Section 2.22(d):

(i) Each Borrower shall execute one or more replacement Revolving Credit Notes to reflect such changed Revolving Credit Dollar Commitments, Revolving Credit Commitment Percentages, and identities and shall deliver such replacement Revolving Credit Notes to the Administrative Agent (which promptly thereafter shall deliver to the Lead Borrower the Revolving Credit Notes so replaced) provided however, in the event that a Revolving Credit Note is to be exchanged following its acceleration or the entry of an order for relief under the Bankruptcy Code with respect to any Borrower, the Administrative Agent, in lieu of causing the Borrowers to execute one or more new Revolving Credit Notes, may issue the Administrative Agent's certificate confirming the resulting Revolving Credit Dollar Commitments and Revolving Credit Commitment Percentages.

(ii) Such change shall be effective from the effective date specified in such written notice and any Person added as a Revolving Credit Lender shall have all rights and privileges of a Revolving Credit Lender hereunder thereafter as if such Person had been a signatory to this Agreement and any other Loan Document to which a Revolving Credit Lender is a signatory and any Person removed as a Revolving Credit Lender shall be relieved of any obligations or responsibilities of a Revolving Credit Lender hereunder thereafter.

2.23. PAYMENTS.

(a) The Borrowers shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest, fees or reimbursement of drawings under L/Cs, Banker's Acceptances, or otherwise) prior to 2:00 p.m. on the date when due, in immediately available funds, without setoff or counterclaim. Any amounts received after such time on any date may, in the reasonable, good faith discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative

Agent at its offices at 1965 East Sixth Street, Cleveland, Ohio (or such other address as to which the Lead Borrower shall have been advised by the Administrative Agent), except payments to be made directly to the Issuer as expressly provided herein. If any payment under any Loan Document shall be due on a day that is not a Business Day, except with respect to LIBOR Loans, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments under each Loan Document shall be made in dollars.

(b) If and to the extent that any payment owed by the Borrowers to the Administrative Agent, any Revolving Credit Lender or the Issuer is not made when due, each Borrower authorizes the Administrative Agent, the Revolving Credit Lenders and the Issuer, as the case may be, to charge from time to time against any or all of the deposit accounts of the Borrowers any amount so due. Notice of such charge shall be given promptly to the Lead Borrower.

ARTICLE 3 - CONDITIONS PRECEDENT:

As a condition to the effectiveness of this Agreement, the establishment of the Revolving Credit, and the making of the first loan under the Revolving Credit, each of the documents respectively described in Sections 3.1 through and including 3.4, (each in form and substance satisfactory to the Administrative Agent) shall have been delivered to the Administrative Agent, and the conditions respectively described in Sections 3.5 through and including 3.21, shall have been satisfied:

3.1. CORPORATE DUE DILIGENCE.

(a) Certificates of corporate good standing or full force and effect, as applicable, for each Loan Party, respectively issued by the Secretary of State for the state in which that Loan Party is incorporated.

(b) Certificates of due qualification, in good standing, issued by the Secretary(ies) of State of each State for each Borrower reasonably required by the Administrative Agent.

(c) Certificates of each Loan Party's Secretary of the due adoption, continued effectiveness, and setting forth the texts of, each corporate resolution adopted in connection with the establishment of the loan arrangement contemplated by the Loan Documents and attesting to the true signatures of each Person authorized as a signatory to any of the Loan Documents.

3.2. OPINIONS. Opinions of counsel to the Loan Parties in form and substance satisfactory to the Administrative Agent.

3.3. ADDITIONAL DOCUMENTS. Such additional instruments and documents as the Agent or its counsel may reasonably require or request including, without limitation, the documents described on EXHIBIT 3.3 hereto.

3.4. OFFICERS' CERTIFICATES. Certificates executed by the Chief Executive Officer and the Chief Financial Officer of the Lead Borrower in form and substance satisfactory to the Administrative Agent.

3.5. REPRESENTATIONS AND WARRANTIES. Each of the representations made by or on behalf of each Loan Party in this Agreement or in any of the other Loan Documents or in any other report, statement, document, or paper provided by or on behalf of each Loan Party shall be true and complete as of the date as of which such representation or warranty was made.

3.6. MINIMUM DAY ONE AVAILABILITY. After giving effect to the first funding under the Revolving Credit, any charges to the Loan Account made in connection with the establishment of the credit facility contemplated hereby, L/Cs and Banker's Acceptances to be issued at, or immediately subsequent to, such establishment, Excess Availability shall not be less than $90,000,000.00.

3.7. SENIOR NON-CONVERTIBLE FACILITY; INTERCREDITOR AGREEMENT. The Senior Non-Convertible Facility shall be fully funded on the Effective Date. All documentation entered into with respect to the Senior Non-Convertible Facility shall be satisfactory to the Lead Arranger, in its sole reasonable, good faith discretion. The Agent shall have entered into the Intercreditor Agreement on terms reasonably satisfactory to the Lead Arranger.

3.8. DSW INITIAL PUBLIC OFFERING.

A Qualifying IPO of the Class A Common Shares of DSW shall have been consummated and proceeds sufficient to repay in full all Indebtedness outstanding under the CCM Term Loan Facilities shall have been received and applied to such Indebtedness pursuant to Section 3.9 below, all of which shall be satisfactory in form and substance to the Agent.

3.9. REPAYMENT OF EXISTING INDEBTEDNESS. The Administrative Agent shall have received a payoff letter from CCM as agent under the CCM Term Loan Facilities as well as a tender of releases and discharges of all collateral security for the CCM Term Loan Facilities, each in form and substance satisfactory to the Administrative Agent. Such Indebtedness shall be repaid on the Effective Date.

3.10. CONSENTS. All necessary consents and approvals to the transactions contemplated hereby shall have been obtained and shall be satisfactory to the Administrative Agent.

3.11. APPRAISALS AND COMMERCIAL FINANCE EXAMINATIONS. The Collateral Agent shall have received (a) appraisals of the Borrowers' Inventory by a third party appraiser acceptable to the Collateral Agent, and (b) a commercial finance examination with respect to the Lead Borrower and its Subsidiaries, including a review of the Borrowers' books and records, each in form and substance satisfactory to the Collateral Agent.

3.12. FINANCIAL INFORMATION.

The Administrative Agent shall have received such financial information and projections as the Agent may reasonably request, including, without limitation, monthly financial projections

of the Borrowers for the subsequent three fiscal years and annual financial projections of the Borrowers through the Maturity Date. All such financial information shall be reasonably satisfactory to the Agent and shall reflect the Borrowers' ability to perform their obligations hereunder.

3.13. MATERIAL AGREEMENTS. The consummation of the transactions contemplated hereby shall not (a) violate any applicable law, statute, rule or regulation or (b) conflict with, or result in a default or event of default under, any material agreement of any Loan Party. There shall not have occurred any default of any material contract or agreement of any Loan Party. The Agent shall be satisfied with the corporate structure and organizational documents of the Borrowers and the Parent.

3.14. LITIGATION. There shall not be pending any litigation or other proceeding, the result of which could reasonably be expected to have a Material Adverse Effect.

3.15. PERFECTION OF ENCUMBRANCES.

(a) The Collateral Agent shall have received results of searches or other evidence reasonably satisfactory to the Collateral Agent (in each case dated as of a date reasonably satisfactory to the Collateral Agent) indicating the absence of Encumbrances, except for Permitted Encumbrances, on the assets of the Loan Parties, except for which termination statements and releases reasonably satisfactory to the Collateral Agent are being tendered concurrently with such extension of credit.

(b) The Collateral Agent shall have received all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create or perfect the first priority Encumbrances intended to be created under the Loan Documents (subject to Permitted Encumbrances having priority over the Encumbrance of the Collateral Agent pursuant to operation of law) and all such documents and instruments shall have been so filed (or provision made therefor), registered or recorded to the satisfaction of the Collateral Agent.

3.16. ALL FEES AND EXPENSES PAID. All fees due at or immediately after the first funding under the Revolving Credit and all costs and expenses incurred by the Agent and the Lead Arranger in connection with the establishment of the credit facility contemplated hereby (including the fees and expenses of counsel to the Agent and the Lead Arranger) shall have been paid in full.

3.17. CASH MANAGEMENT. The Loan Parties shall have established cash management systems reasonably acceptable to the Agent, including, without limitation, compliance with the provisions of Sections 8.1(b), 8.2(b), and 8.3(a).

3.18. INSURANCE. The Agent shall be reasonably satisfied with the insurance maintained by the Loan Parties and the Agent shall have received an endorsement to such insurance policies naming the Agent as loss payee and/or additional insured and otherwise satisfactory in form and substance to the Agent.

3.19. NO LOAN PARTY IN DEFAULT. No Loan Party is in Default.

3.20. NO ADVERSE CHANGE. The Agent shall be reasonably satisfied that any financial statements delivered to it fairly present the business and financial condition of the Borrowers and their Subsidiaries, and that there has been no material adverse change in the assets, business, financial condition, or income of the Borrowers and their Subsidiaries since the April, 2005 financial information delivered to the Agent.

3.21. CERTAIN CHANGES.

(a) No material changes in governmental regulations or policies affecting the Loan Parties, the Agent, the Lead Arranger or any Revolving Credit Lender involved in this transaction shall have occurred prior to the Effective Date.

(b) There shall not have occurred prior to the Efective Date any disruption or material adverse change in the financial or capital markets in general that would, in the reasonable opinion of the Administrative Agent, have a material adverse effect on the market for loan syndications or adversely affecting the syndication of the Revolving Credit Loans.

3.22. BENEFIT OF CONDITIONS PRECEDENT. The conditions set forth in this Article 3 are for the sole benefit of the Agent and each Revolving Credit Lender and may be waived by the Administrative Agent in whole or in part without prejudice to the Agent or any Revolving Credit Lender.

No document shall be deemed delivered to the Agent or any Revolving Credit Lender until received and accepted by the Administrative Agent at its offices in Cleveland, Ohio. Under no circumstances shall this Agreement take effect until executed and accepted by the Agent.

ARTICLE 4 - GENERAL REPRESENTATIONS AND WARRANTIES:

To induce each Revolving Credit Lender to establish the credit facility contemplated herein and to induce the Revolving Credit Lenders to provide loans and advances under the Revolving Credit (each of which loans shall be deemed to have been made in reliance thereupon) the Loan Parties, in addition to all other representations and warranties made by any Loan Party in any other Loan Document, make those representations and warranties set forth below.

4.1. DUE ORGANIZATION. AUTHORIZATION. NO CONFLICTS.

(a) Each Loan Party presently is in good standing as a corporation or other entity under the laws of the state in which it is organized, and, except as described on EXHIBIT 4.1, annexed hereto, is duly qualified and in good standing in every other state in which, by reason of the nature or location of each Loan Parties' assets or operation of each of their respective business, such qualification may be necessary, except where the failure to so qualify would not have a Material Adverse Effect.

(b) Each Loan Party's respective organizational identification number assigned to it by the state of its incorporation and its respective federal employer identification number, as of the Effective Date, is listed on EXHIBIT 4.1, annexed hereto.

(c) Each Loan Party has all requisite power and authority to execute and deliver all Loan Documents to which that Loan Party is a party and has all requisite power to perform all Liabilities.

(d) The execution and delivery by each Loan Party of each Loan Document to which it is a party; each Loan Party's consummation of the transactions contemplated by such Loan Documents (including, without limitation, the creation of Collateral Interests by that Loan Party to secure the Liabilities); and each Loan Party's performance under those of the Loan Documents to which it is a party:

(i) Have been duly authorized by all necessary action.

(ii) Do not contravene in any material respect any provision of any Requirement of Law or obligation of that Loan Party.

(iii) Will not result in the creation or imposition of, or the obligation to create or impose, any Encumbrance upon any assets of that Loan Party pursuant to any Requirement of Law or obligation, except pursuant to the Loan Documents.

(e) The Loan Documents have been duly executed and delivered by each Loan Party and are the legal, valid and binding obligations of each Loan Party, enforceable against each Loan Party in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally or by equitable principles relating to enforceability.

4.2. TRADE NAMES.

(a) EXHIBIT 4.2, annexed hereto, is a listing as of the Effective Date, of:

(i) All names under which, to the knowledge of the Lead Borrower, any Loan Party has conducted its business in the past five (5) years.

(ii) All Persons with whom any Loan Party has consolidated or merged, or from whom any Loan Party has acquired in a single transaction or in a series of related transactions substantially all of such Person's assets in the past five (5) years.

4.3. INTELLECTUAL PROPERTY.

(a) Each Loan Party owns and possesses, or has the right to use all material patents, industrial designs, trademarks, trade names, trade styles, brand names, service marks, logos, copyrights, trade secrets, know-how, confidential information, and other intellectual or proprietary property of any third Person necessary for that Loan Party's conduct of that Loan Party's business.

(b) The conduct by each Loan Party of that Loan Party's business does not, to the knowledge of the Loan Parties, presently infringe (nor will any Loan Party conduct its business in the future so as to infringe) the patents, industrial designs, trademarks, trade names, trade styles, brand names, service marks, logos, copyrights, trade secrets, know-how,

confidential information, or other intellectual or proprietary property of any third Person, except where such infringement is not reasonably likely to have a Material Adverse Effect.

4.4. LOCATIONS.

(a) The Collateral, and the books, records, and papers of the Loan Parties pertaining thereto, are kept and maintained solely (i) at those locations which are listed on EXHIBIT 4.4, annexed hereto (or as supplemented pursuant to the terms of this Agreement), which Exhibit includes, with respect to each such location, the name and address of the landlord on the Lease which covers such location (or an indication that a Loan Party owns the subject location) and of all service bureaus with which any such records are maintained or (ii) at such other locations as to which the Lead Borrower has provided ten
(10) days prior written notice to the Administrative Agent of the intended location of the Collateral, books, records, and papers thereat.

(b) No tangible personal property of any Loan Party is in the care or custody of any third party or stored or entrusted with a bailee or other third party, except (i) as otherwise disclosed pursuant to, or permitted by, this Section 4.4, or (ii) for Inventory in an amount not to exceed $1,000,000 at Cost in the aggregate at any time in the ordinary course of business.

4.5. ENCUMBRANCES.

(a) The Loan Parties are the owners of the Collateral free and clear of all Encumbrances other than any Permitted Encumbrance.

(b) No Loan Party has possession of any property on consignment to that Loan Party from a third party that is not a Loan Party except (i) as of the Effective Date, those listed on EXHIBIT 4.5(B), annexed hereto and (ii) those as to which the Loan Parties notify the Administrative Agent in accordance with the provisions of Section 6.3 hereof.

4.6. INDEBTEDNESS. The Loan Parties do not have any Indebtedness other than:

(a) Permitted Indebtedness; and

(b) A Loan Party's guaranty of Permitted Indebtedness of another Loan Party.

4.7. INSURANCE.

EXHIBIT 4.7, annexed hereto, is a schedule of all insurance policies owned by the Loan Parties or under which any Loan Party is the named insured as of the Effective Date. Each of such policies is in full force and effect. To the best of such Loan Party's knowledge, neither the issuer of any such policy nor any Loan Party is in default or violation of any such policy.

4.8. LICENSES. Each material license, distributorship, franchise, and similar agreement issued to, or to which any Loan Party is a party is in full force and effect. Each material license agreement to which a Loan Party is a party as of the Effective Date is listed on EXHIBIT 4.8, annexed hereto. No party to any such license or agreement is in default or violation thereof, except where such default or failure is not reasonably likely to have a Material

Adverse Effect. No Loan Party has received any notice or threat of cancellation of any such license or agreement.

4.9. LEASES. EXHIBIT 4.9, annexed hereto, is a schedule of all presently effective Capital Leases as of the Effective Date. (EXHIBIT 4.4 includes a list of all other presently effective Leases). Each of such Leases and Capital Leases is in full force and effect. No Loan Party, to the best of its knowledge, is in default or violation of any such Lease or Capital Lease, except where such violation is not reasonably likely to have a Material Adverse Effect. No Loan Party has received any notice or threat of cancellation of any such Lease or Capital Lease, which cancellation (together with all other similar cancellations) is reasonably likely to have a Material Adverse Effect.

4.10. REQUIREMENTS OF LAW. Each Loan Party and each of its Subsidiaries is in compliance with all Requirements of Law except where the failure of such compliance will not have a Material Adverse Effect. No Loan Party has received any notice of any violation of any Requirement of Law (other than of a violation which does not have a Material Adverse Effect), which violation has not been cured or otherwise remedied.

4.11. LABOR RELATIONS.

(a) As of the Effective Date, no Loan Party is a party to any collective bargaining or other labor contract except as listed on EXHIBIT 4.11, annexed hereto.

(b) There is not presently pending and, to any Loan Party's knowledge, there is not threatened any of the following except to the extent any of the following is not reasonably likely to have a Material Adverse Effect:

(i) Any strike, slowdown, picketing, work stoppage, or employee grievance process.

(ii) Except as described on EXHIBIT 4.17 annexed hereto, any proceeding against or affecting any Loan Party relating to the alleged violation of any Applicable Law pertaining to labor relations or before National Labor Relations Board, the Equal Employment Opportunity Commission, or any comparable governmental body, organizational activity, or other labor or employment dispute against or affecting any Loan Party, which, if determined adversely to that Loan Party is reasonably likely to have a Material Adverse Effect on that Loan Party.

(iii) Any lockout of any employees by any Loan Party (and no such action is contemplated by any Loan Party).

(iv) Any application for the certification of a collective bargaining agent.

(c) No event has occurred or circumstance exists which could provide the basis for any work stoppage or other labor dispute which would be reasonably likely to have a Material Adverse Effect.

(d) Each Loan Party:

(i) Has complied with all Applicable Law relating to employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar taxes, occupational safety and health, and plant closing, except where such non-compliance is not reasonably likely to have a Material Adverse Effect.

(ii) Is not liable for the payment of compensation, damages, taxes, fines, penalties, or other amounts, however designated, for that Loan Party's failure to comply with any Applicable Law referenced in
Section 4.11(d)(i) which is reasonably likely to have a Material Adverse Effect.

4.12. TAXES.

(a) With respect to the Loan Parties' federal, state, and local tax liability and obligations:

(i) To the best of its knowledge, the Lead Borrower, in compliance with all Applicable Law, has properly filed all material returns due to be filed up to the date of this Agreement.

(ii) Except as described on EXHIBIT :

(A) Currently, no Loan Party has received from any taxing authority any request to perform any examination of or with respect to any Loan Party nor any other written or verbal notice in any way relating to any claimed failure by any Loan Party to comply with all Applicable Law concerning payment of any taxes or other amounts in the nature of taxes in excess of $500,000 in any one instance.

(B) No agreement exists which waives or extends any statute of limitations applicable to the right of any taxing authority to assert a deficiency or make any other claim for or in respect to federal income taxes.

(C) No issue has been raised in any tax examination of any Loan Party which reasonably could be expected to result in the assertion of a deficiency for any fiscal year open for examination, assessment, or claim by any taxing authority in excess of $500,000 in the aggregate for all Loan Parties.

(b) The Loan Parties have paid, as they become due and payable, all taxes and unemployment contributions and other charges of any kind or nature levied, assessed or claimed against any Loan Party or the Collateral by any Person whose claim could result in an Encumbrance upon any asset of any Loan Party or by any governmental authority except for (i) taxes, contributions and charges which are being contested in good faith by such Loan Party, by appropriate proceedings diligently instituted and conducted, without danger to any material risk to the Collateral, and adequate reserves or appropriate provision, if any, as shall be required in conformity with GAAP, shall have been made therefor, and provided that no Encumbrance has been filed on account thereof, and (ii) taxes, contributions, and other charges which the Loan Parties have inadvertently not paid when due as long as (A) the aggregate amount thereof does

not exceed $500,000, and (B) no Encumbrance has been filed on account thereof, and (C) promptly upon the date an Authorized Officer obtains knowledge or should have obtained knowledge thereof, the Borrowers make payment of such taxes, contributions or charges; has properly exercised any trust responsibilities imposed upon any Loan Party by reason of withholding from employees' pay or by reason of any Loan Parties' receipt of sales tax or other funds for the account of any third party; has timely made all contributions and other payments as may be required pursuant to any Employee Benefit Plan now or hereafter established by any Loan Party; and has timely filed all tax and other returns and other reports with each Governmental Authority to whom any Loan Party is obligated to so file, except for such returns or reports which the Loan Parties have inadvertently not paid when due as long as (A) the aggregate amount of taxes, assessments or charges with respect to such returns does not exceed $500,000, and (B) no Encumbrance has been filed on account thereof, and (C) promptly upon the date an Authorized Officer obtains knowledge or should have obtained knowledge thereof, the Borrowers file such returns and/or reports and make payment of any amounts required to be paid on account thereof.

4.13. NO MARGIN STOCK. No Loan Party is engaged in the business of extending credit for the purpose of purchasing or carrying any margin stock (within the meaning of Regulations U, T, and X of the Board of Governors of the Federal Reserve System of the United States).

4.14. INVESTMENT AND HOLDING COMPANY STATUS. No Loan Party is (a) an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935.

4.15. ERISA. Except to the extent that such action is not reasonably likely to have a Material Adverse Effect, neither any Loan Party nor any ERISA Affiliate has within the past three (3) years:

(i) Violated or failed to be in full compliance with any Loan Party's Employee Benefit Plan.

(ii) Failed timely to file all reports and filings required by ERISA to be filed by any Loan Party.

(iii) Engaged in any nonexempt "prohibited transactions" or "reportable events" (respectively as described in ERISA).

(iv) Engaged in, or committed, any act such that a tax or penalty reasonably could be imposed upon any Loan Party on account thereof pursuant to ERISA.

(v) Incurred any material accumulated funding deficiency within the meaning of ERISA.

(vi) Terminated any Employee Benefit Plan such that a lien could be asserted against any assets of any Loan Party on account thereof pursuant to ERISA.

(vii) Failed to make any required contribution or payment to, or made a complete or partial withdrawal from, any Employee Benefit Plan which is a multiemployer plan within the meaning of Section 4001(a) of ERISA.

4.16. HAZARDOUS MATERIALS. Except as set forth on EXHIBIT 4.16 hereto, (i) the operations of each Loan Party are in material compliance with all Environmental Laws; (ii) to the best of each Loan Party's knowledge, there has been no Release at any of the properties owned or operated by any Loan Party or a predecessor in interest, or at any disposal or treatment facility which received Hazardous Materials generated by any Loan Party or any predecessor in interest which is reasonably likely to have a Material Adverse Effect; (iii) no Environmental Action has been asserted against any Loan Party or any predecessor in interest nor does any Loan Party have knowledge or notice of any threatened or pending Environmental Action against any Loan Party or any predecessor in interest which is reasonably likely to have a Material Adverse Effect; (iv) no Loan Party has knowledge of any Environmental Actions that have been asserted against any facilities that may have received Hazardous Materials generated by any Loan Party or any predecessor in interest which are reasonably likely to have a Material Adverse Effect; (v) to the best of such Loan Party's knowledge, no property now or formerly owned or operated by a Loan Party has been used as a treatment or disposal site for any Hazardous Material; (vi) no Loan Party has failed to report to the proper Governmental Authority any Release which is required to be so reported by any Environmental Laws which is reasonably likely to have a Material Adverse Effect; (vii) each Loan Party holds all licenses, permits and approvals required under any Environmental Laws in connection with the operation of the business carried on by it, except for such licenses, permits and approvals as to which a Loan Party's failure to maintain or comply with is not reasonably likely to have a Material Adverse Effect; and (viii) no Loan Party has received any notification pursuant to any Environmental Laws that (A) any work, repairs, construction or Capital Expenditures are required to be made in respect as a condition of continued compliance with any Environmental Laws, or any license, permit or approval issued pursuant thereto or (B) any license, permit or approval referred to above is about to be reviewed, made, subject to limitations or conditions, revoked, withdrawn or terminated, in each case, except as is not reasonably likely to have a Material Adverse Effect.

4.17. LITIGATION. Except as described in EXHIBIT 4.17, annexed hereto, there is not presently pending or threatened by or against any Loan Party any suit, action, proceeding, or investigation which, if determined adversely to any Loan Party, would have a Material Adverse Effect. As of the Effective Date, no Loan Party is the holder of any Commercial Tort Claim other than as described on EXHIBIT 4.17.

4.18. ADEQUACY OF DISCLOSURE.

(a) All quarterly and annual financial statements furnished to the Administrative Agent and to each Revolving Credit Lender by the Loan Parties on a consolidated basis have been prepared in accordance with GAAP consistently applied (provided however, that unaudited financial statements are subject to normal year end adjustments and to the absence of footnotes). All financial statements furnished to the Administrative Agent and to each Revolving Credit Lender by the Loan Parties present fairly the condition of the Loan Parties at the date(s) thereof and the results of operations and cash flows for the period(s) covered (provided however, that unaudited financial statements are subject to normal year end adjustments and to the absence of footnotes). There has been no change in the Consolidated financial condition, results of

operations, or cash flows of the Loan Parties since the date(s) of such financial statements, other than changes which are not reasonably likely to have a Material Adverse Effect.

(b) No Loan Party has any material contingent obligation or material obligation under any Lease or Capital Lease which is not noted in the Loan Parties' annual Consolidated financial statements furnished to the Administrative Agent and to each Revolving Credit Lender prior to the execution of this Agreement.

(c) No document, instrument, agreement, or paper given to the Agent or to any Revolving Credit Lender by or on behalf of each Loan Party or any guarantor of the Liabilities in connection with the execution of this Agreement by the Agent and to each Revolving Credit Lender contains any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements therein not misleading. There is no fact known to any Loan Party which has, or which, in the foreseeable future is reasonably likely to have a Material Adverse Effect.

4.19. UNRESTRICTED SUBSIDIARIES. Each of the Unrestricted Subsidiaries is inactive or in the process of being liquidated or dissolved.

4.20. NO BANKRUPTCY FILING. No Loan Party is contemplating, or has any knowledge of any other Person contemplating, taking any of the actions described in Section 11.11 or 11.12 hereof. No Loan Party is contemplating the liquidation of all or a major portion of such Loan Party's assets.

4.21. PATRIOT ACT. Each Borrower is in compliance, in all material respects, with the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot Act"). No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

4.22. FOREIGN ASSET CONTROL REGULATIONS. Neither of the advance of the Loans nor the use of the proceeds of any thereof will violate the Trading With the Enemy Act (50 U.S.C. Section 1 et seq., as amended) (the "Trading With the Enemy Act") or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) (the "Foreign Assets Control Regulations") or any enabling legislation or executive order relating thereto (which for the avoidance of doubt shall include, but shall not be limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the "Executive Order") and (b) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)). Furthermore, none of the Borrowers or their Affiliates (a) is or will become a "blocked person" as described in the Executive Order, the Trading With the Enemy Act or the Foreign Assets Control Regulations or (b) engages or will engage in any dealings or transactions, or be otherwise associated, with any such "blocked person" or in any manner violative of any such order.

ARTICLE 5 - GENERAL COVENANTS:

5.1. PAYMENT AND PERFORMANCE OF LIABILITIES. The Loan Parties shall pay each payment Liability when due (or when demanded, if payable on demand) and shall promptly, punctually, and faithfully perform each other Liability.

5.2. DUE ORGANIZATION. AUTHORIZATION. NO CONFLICTS.

(a) Each Loan Party shall remain in good standing as a corporation or other entity under the laws of the state in which it is organized, and shall hereafter remain duly qualified and in good standing in every other state in which, by reason of the nature or location of each Loan Parties' assets or operation of each of their respective business, such qualification may be necessary, except where the failure to so qualify would not have a Material Adverse Effect.

(b) No Loan Party shall change its state of organization; any organizational identification number assigned to that Loan Party by that state; or that Loan Party's federal taxpayer identification number, without the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld.

(c) Except where the failure to observe, maintain, or perform the following is not reasonably likely to have a Material Adverse Effect:

(i) All customary formalities regarding the corporate existence of each Loan Party will be observed.

(ii) In accordance with its present practices, each Loan Party will accurately maintain its organizational documents separate from those of any Affiliate of such Loan Party and any other Person.

5.3. TRADE NAMES.

The Lead Borrower will provide the Administrative Agent with not less than ten (10) days prior written notice (with reasonable particularity) of any change to any Loan Party's name from that under which that Loan Party is conducting its business at the execution of this Agreement and will not effect such change unless each Loan Party is then in compliance with all provisions of this Agreement.

5.4. LOCATIONS.

(a) The Collateral, and the books, records, and papers of the Loan Parties pertaining thereto, will be kept and maintained solely (i) at those locations which are listed on Exhibit 4.4, annexed hereto (or as supplemented pursuant to the terms of this Agreement), which Exhibit includes, with respect to each such location, the name and address of the landlord on the Lease which covers such location (or an indication that a Loan Party owns the subject location) and of all service bureaus with which any such records are maintained or (ii) at such other locations as to which the Lead Borrower has provided ten
(10) days prior written notice to the Administrative Agent of the intended location of the Collateral, books, records, and papers thereat.

(b) No Loan Party shall remove any of the Collateral from those locations described in Section 4.4(a) except for the following purposes:

(i) To accomplish sales of Inventory in the ordinary course of business.

(ii) To move Inventory or other Collateral from one such location to another such location.

(iii) To utilize such of the Collateral as is removed from such locations in the ordinary course of business.

(c) No Loan Party will:

(i) Alter, modify, or amend any Lease in a manner which is reasonably likely to have a Material Adverse Effect.

(ii) Other than leased departments and similar arrangements with third parties, commit to open or close, or open or close, any location at which any Loan Party maintains, offers for sales, or stores any of the Collateral, in any fiscal year such that the actual number of stores of all Borrowers in the aggregate (A) exceeds by ten (10) the number of stores reflected on the Business Plan for such fiscal year, or (B) is more than ten (10) fewer than the number of stores reflected on the Business Plan for such fiscal year (without giving effect to any new stores which the Business Plan projected to be opened or closed, but which have not in fact been opened or closed)

(d) No tangible personal property of any Loan Party shall hereafter be placed under such care, custody, storage, or entrustment, except (i) as otherwise disclosed pursuant to, or permitted by, this Section 5.5, or (ii) for Inventory in an amount not to exceed $1,000,000 at Cost in the aggregate at any time in the ordinary course of business.

5.5. ENCUMBRANCES.

(a) The Loan Parties shall remain, the owners of the Collateral free and clear of all Encumbrances other than any Permitted Encumbrance.

(b) No Loan Party shall have possession of any property on consignment to that Loan Party from a third party that is not a Loan Party except (i) those listed on EXHIBIT 4.5(B), annexed hereto and (ii) those as to which the Loan Parties notify the Administrative Agent in accordance with the provisions of Section 6.3 hereof.

5.6. INDEBTEDNESS. The Loan Parties shall not hereafter have any Indebtedness other than:

(a) Permitted Indebtedness; and

(b) A Loan Party's guaranty of Permitted Indebtedness of another Loan Party.

5.7. INSURANCE.

(a) The Lead Borrower shall provide the Administrative Agent with prompt written notice of any change in the insurance policies owned by the Loan Parties or under which any Loan Party is the named insured from those in effect as of the Closing Date.

(b) The Loan Parties shall have and maintain at all times insurance covering such risks, in such amounts, containing such terms, in such form, for such periods, and written by the companies presently providing such insurance, or such other companies as may be selected by the Lead Borrower and are satisfactory to the Agent (whose consent shall not be unreasonably withheld).

(c) All insurance carried by the Loan Parties shall provide for a minimum of thirty (30) days' prior written notice of cancellation to the Administrative Agent and all such insurance which covers the Collateral shall

(i) Include an endorsement in favor of the Collateral Agent, which endorsement shall provide that the insurance, to the extent of the Collateral Agent's interest therein, shall not be impaired or invalidated, in whole or in part, by reason of any act or neglect of any Loan Party or by the failure of any Loan Party to comply with any warranty or condition of the policy.

(ii) Not include an endorsement in favor of any other Person (other than the agents for the holders of the Senior Non-Convertible Facility, those Persons intended as beneficiaries of any builder's risk insurance, and the holder of any Permitted Encumbrances).

(d) The Lead Borrower shall furnish the Collateral Agent from time to time, upon request of the Collateral Agent, with certificates or other evidence satisfactory to the Collateral Agent regarding compliance by the Loan Parties with the foregoing requirements.

(e) In the event of the failure by the Loan Parties to maintain insurance as required herein, the Agent, at its option and the Loan Parties' expense, may obtain such insurance at the expense of the Loan Parties, provided, however, the Agent's obtaining of such insurance shall not constitute a cure or waiver of any Event of Default occasioned by the Loan Parties' failure to have maintained such insurance.

5.8. LICENSES. The Loan Parties shall (a) with respect to existing licensors and licensees, use its best efforts to, and (b) with respect to license agreements entered into after the Effective Date, shall, cause the licensors and licensees to enter into such tri-party or estoppel agreements as the Agent may reasonably request.

5.9. REQUIREMENTS OF LAW. Each Loan Party shall and shall cause its Subsidiaries to be in compliance with, and shall hereafter comply with and use its assets in compliance with, all Requirements of Law except where the failure of such compliance will not have a Material Adverse Effect.

5.10. LABOR RELATIONS.

The Lead Borrower shall provide the Administrative Agent with prompt written notice of any additional or amended collective bargaining or other labor contract entered into after the Effective Date.

5.11. MAINTAIN PROPERTIES. The Loan Parties shall:

(a) Keep the Collateral in good order and repair (ordinary reasonable wear and tear and insured casualty excepted).

(b) Not suffer or cause the waste or destruction of any material part of the Collateral.

(c) Not use any of the Collateral in violation of any policy of insurance thereon.

(d) Not sell, lease, or otherwise dispose of any of the Collateral, other than the following:

(i) The use of Inventory in compliance with this Agreement.

(ii) The disposal of Equipment which is obsolete, worn out, or damaged beyond repair, or no longer useful in the Loan Parties' businesses.

(iii) Permitted Dispositions.

(iv) The turning over to the Administrative Agent of all Receipts as provided herein.

(v) The use of the Collateral to pay Liabilities arising in the ordinary course.

5.12. TAXES.

The Loan Parties shall: pay, as they become due and payable, all taxes and unemployment contributions and other charges of any kind or nature levied, assessed or claimed against any Loan Party or the Collateral by any Person whose claim could result in an Encumbrance upon any asset of any Loan Party or by any governmental authority, provided, however, that (i) no such taxes, contributions and charges are required to be paid if being contested in good faith by such Loan Party, by appropriate proceedings diligently instituted and conducted, without danger to any material risk to the Collateral, and adequate reserves or appropriate provision, if any, as shall be required in conformity with GAAP, shall have been made therefor, and provided that no Encumbrance has been filed on account thereof, and (ii) the inadvertent failure of a Loan Party to pay any such taxes, contributions, and other charges when due shall not constitute an Event of Default hereunder as long as (A) the aggregate amount thereof does not exceed $500,000, and (B) no Encumbrance has been filed on account thereof, and (C) promptly upon the date an Authorized Officer obtains knowledge or should have obtained knowledge thereof, the Borrowers make payment of such taxes, contributions or charges; properly exercise any trust responsibilities imposed upon any Loan Party by reason of withholding from employees' pay or by reason of any Loan Parties' receipt of sales tax or other funds for the account of any third party; timely make all contributions and other payments as may be required pursuant to any Employee Benefit Plan now or hereafter established by any Loan Party; and timely file all tax and other returns and other reports with each Governmental Authority to whom any Loan Party is obligated to so file, provided that the inadvertent failure of a Loan Party to file any such returns or reports when due shall not constitute an Event of Default hereunder as long as (A) the aggregate amount of taxes, assessments or charges with respect to such returns does not exceed $500,000, and (B) no Encumbrance has been filed on account thereof, and (C) promptly upon the date an Authorized Officer obtains knowledge or should have obtained knowledge thereof, the Borrowers file such returns and/or reports and make payment of any amounts required to be paid on account thereof.

5.13. NO MARGIN STOCK. No part of the proceeds of any borrowing hereunder will be used at any time to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock.

5.14. ERISA.

Neither any Loan Party nor any ERISA Affiliate shall ever engage in any action of the type described in Section 4.15, if as a result thereof, such Loan Party or ERISA Affiliate will, or could reasonably be expected to, incur liability that could reasonably likely have a Material Adverse Effect.

5.15. HAZARDOUS MATERIALS.

(a) Each Loan Party shall, except where a violation or failure is not reasonably likely to have a Material Adverse Effect: (i) keep any property either owned or operated by it or any of its Subsidiaries free of any Environmental Liens; (ii) comply, and cause each of its Subsidiaries to comply, in all material respects with Environmental Laws and provide to the Collateral Agent any documentation of such compliance which the Collateral Agent may reasonably request; (iii) provide the Collateral Agent written notice within five (5) days of any

Release of a Hazardous Material in excess of any reportable quantity from or onto property at any time owned or operated by it or any of its Subsidiaries and take any remedial actions required to abate said Release; (iv) provide the Collateral Agent with written notice within ten (10) days of the receipt of any of the following: (A) notice that an Environmental Lien has been filed against any property of any Loan Party or any of its Subsidiaries; (B) commencement of any Environmental Action or notice that an Environmental Action will be filed against any Loan Party or any of its Subsidiaries; and (C) notice of a violation, citation or other administrative order which, to the extent that any of the foregoing are reasonably likely to have a Material Adverse Effect and (v) defend, indemnify and hold harmless the Agent and the Revolving Credit Lenders and their transferees, and their respective employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs or expenses (including, without limitation, attorney and consultant fees, investigation and laboratory fees, court costs and litigation expenses) arising out of (A) the generation, presence, disposal, Release or threatened Release of any Hazardous Materials on, under, in, originating or emanating from any property at any time owned or operated by any Loan Party or any of its Subsidiaries (or its predecessors in interest or title), (B) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to the presence or Release of such Hazardous Materials, (C) any request for information, investigation, lawsuit brought or threatened, settlement reached or order by a Governmental Authority relating to the presence or Release of such Hazardous Materials, (D) any violation of any Environmental Law and/or (E) any Environmental Action filed against the Agent or any Revolving Credit Lender, to the extent that any of the foregoing is reasonably likely to have a Material Adverse Effect.

(b) No Loan Party shall knowingly or negligently permit the use, handling, generation, storage, treatment, Release or disposal of Hazardous Materials at any property owned or leased by it or any of its Subsidiaries, except in compliance with Environmental Laws and so long as such use, handling, generation, storage, treatment, Release or disposal of Hazardous Materials is not reasonably likely to result in a Material Adverse Effect.

5.16. DIVIDENDS. INVESTMENTS. CORPORATE ACTION. No Loan Party shall:

(a) Pay any cash dividend or make any other distribution in respect of any class of that Loan Party's capital stock (other than dividends payable to another Loan Party or payable solely in the capital stock of such paying Loan Party). Notwithstanding anything to the contrary contained herein, dividends
(other than dividends payable solely in the capital stock of another Loan Party) shall only be payable to the Parent by any other Loan Party to the extent not otherwise in violation of the Loan Documents and in any event in an amount not to exceed $5,000,000 (less loans and advances to the Parent made under clause
(l) of the definition of Permitted Indebtedness) in the aggregate after the date hereof.

(b) Own, redeem, retire, purchase, or acquire any of any Loan Party's capital stock; provided that the Loan Parties may make cash payments for any such purposes if:

(i) no Default or Event of Default shall have occurred and be continuing at the time of declaration or payment thereof; and

(ii) after giving effect to the making any such cash payment, the aggregate amount so expended for such purposes subsequent to the Closing Date does not exceed $1,500,000; and

(iii) after giving effect to the making any such cash payment, the aggregate amount so expended for such purposes in any fiscal year of the Borrowers does not exceed $500,000.

(c) Invest in or purchase any stock or securities or rights to purchase any such stock or securities, of any Person other than a Permitted Investment, or a Permitted Acquisition.

(d) Merge or consolidate or be merged or consolidated with or into any other corporation or other entity, other than in connection with a Permitted Acquisition (provided that a Loan Party is the surviving, continuing or resulting corporation) or of one Loan Party into another Loan Party; provided that, if no Default or Event of Default shall have occurred and be continuing or would result therefrom, the following shall be permitted:

(i) With the prior written consent of the agent under the Senior Non-Convertible Facility, the merger, consolidation or amalgamation of any wholly-owned Subsidiary with or into a Borrower or with or into another wholly-owned Subsidiary of a Borrower, so long as in any merger, consolidation or amalgamation involving a Borrower, the Borrower is the surviving, continuing or resulting corporation;

(ii) The liquidation or dissolution of any Unrestricted Subsidiary.

(iii) Any acquisition which is a Permitted Acquisition, provided that all of the applicable conditions contained in the definition of the term Permitted Acquisition are satisfied.

Notwithstanding the foregoing, the Parent may not merge or consolidate or be merged or consolidated with or into any other Person without the prior written consent of the Administrative Agent.

(e) Subordinate any debts or obligations owed to that Loan Party by any third party to any other debts owed by such third party to any other Person.

(f) Enter into leases of property or assets not constituting Permitted Acquisitions, unless such leases are not otherwise in violation of this Agreement.

(g) Organize or create any Affiliate other than in connection with a Permitted Acquisition or in compliance with the provisions of Section 5.21 hereof with respect to such Subsidiary.

(h) Acquire any assets other than in the ordinary course and conduct of that Loan Party's business as conducted at the execution of this Agreement, other than in connection with a Permitted Acquisition or as otherwise permitted in this Agreement.

5.17. LOANS. No Loan Party shall make any loans or advances to, nor acquire the Indebtedness of, any Person, provided, however, the foregoing does not prohibit any of the following:

(a) Advance payments made to that Loan Party's suppliers in the ordinary course;.

(b) Advances to that Loan Party's officers, employees, and salespersons with respect to reasonable expenses to be incurred by such officers, employees, and salespersons for the benefit of that Loan Party, which expenses are properly substantiated by the Person seeking such advance and properly reimbursable by that Loan Party;

(c) Loans and advances to employees for business-related moving expenses, costs of replacement homes, business machines or supplies, automobiles and other similar expenses, in each case incurred in the ordinary course of business not to exceed (together with loans and advances under Section 5.17(d) and investments permitted under clause (m) of the definition of Permitted Investments) $6,000,000 in the aggregate outstanding to all employees at any one time;

(d) Loans and advances to that Loan Party's officers, employees, and salespersons in connection with any employment agreements or arrangements, or any stock options or option plans not to exceed $6,000,000 (together with loans and advances under Section 5.17(c) and investments permitted under clause (m) of the definition of Permitted Investments) in the aggregate outstanding to all employees at any one time;

(e) To the extent not permitted by the foregoing clauses, the existing loans and advances, described on EXHIBIT 5.17(E) hereto;

(f) Intercompany loans and advances or other intercompany Indebtedness (i) existing on the date hereof and described on EXHIBIT 5.17(F) hereof, (ii) hereafter made among any Loan Parties within the same Division,
(iii) hereafter made by any Borrower to any other Borrower, (iv) hereafter made by any Loan Party to any of its wholly owned Subsidiaries which are also Loan Parties; and (v) hereafter made to the Parent by any other Loan Party to the extent any of the same constitutes Permitted Indebtedness under clause (l) of the definition of Permitted Indebtedness or to any Loan Party by the Parent, provided that (x) such intercompany loans shall be evidenced by such documentation as the Collateral Agent may require, and (y) after the occurrence of a Cash Control Event, no such intercompany loans may be made under clause
(iii) hereof unless there is no VC Availability or Filene's Availability, as applicable, immediately prior to the making of such loan to the Division to whom such loan is being made.

(g) Loans and advances of a Person outstanding at the time such Person becomes a Subsidiary as a result of a Permitted Acquisition, provided that any such loans or advances were not made at the time of or in contemplation of the acquisition of such Person by a Loan Party or any Subsidiaries.

(h) Any other loans and advances to or for the benefit of any Person which (i) is not itself a Loan Party, (ii) are not otherwise permitted by the foregoing clauses, and (iii) are

made after the Effective Date, which loans and advances have been approved in advance by the Administrative Agent.

5.18. PROTECTION OF ASSETS. The Administrative Agent, in the Administrative Agent's reasonable, good faith discretion, and from time to time, may discharge any tax or Encumbrance on any of the Collateral, or take any other action which the Administrative Agent may deem reasonably necessary or desirable to repair, insure, maintain, preserve, collect, or realize upon any of the Collateral. The Administrative Agent shall not have any obligation to undertake any of the foregoing and shall have no liability on account of any action so undertaken except where there is a specific finding in a judicial proceeding (in which the Administrative Agent has had an opportunity to be heard), from which finding no further appeal is available, that the Administrative Agent had acted in actual bad faith, in willful misconduct, or in a grossly negligent manner. The Loan Parties shall pay to the Administrative Agent, on demand, or the Administrative Agent, in its reasonable, good faith discretion, may add to the Loan Account, all amounts paid or incurred by the Administrative Agent pursuant to this Section 5.18.

5.19. LINE OF BUSINESS; CONDUCT OF BUSINESS.

(a) No Loan Party shall engage in any business other than the business in which it is currently engaged or a business reasonably related thereto, or any retail lease department operation.

(b) The Loan Parties shall conduct their business substantially in accordance with the Business Plan, or as otherwise approved by the Administrative Agent pursuant to Section 6.10, below. The foregoing shall not obligate the Borrowers to achieve any specific financial performance and no financial performance covenants are intended to be imposed thereby.

5.20. AFFILIATE TRANSACTIONS.

(a) Except as set forth in that certain confidential side letter from the Lead Borrower to the Administrative Agent and for loans which may be made between Loan Parties permitted pursuant to Section 5.17, above, no Loan Party shall make any payment, nor give any value to any Affiliate except for leases, goods and services with such Affiliate for a price and on terms which shall be in the ordinary course of business at prices and on terms and conditions no less favorable to that Loan Party than those which would have been charged and imposed in an arms length transaction from unrelated third parties, except (i) sales of goods to an Affiliate for use or distribution outside of the United States of America which complies with the any applicable legal requirements of the Internal Revenue Code of 1986 and the Treasury Regulations, each as amended from time to time, provided that such sales shall not exceed $500,000 in the aggregate in any fiscal year of the Borrowers, (ii) loans, advances and other payments to officers and directors as part of their compensation which are entered into in the ordinary course of business and which are not otherwise prohibited under the Loan Documents, (iii) other dividends and distributions to officers, directors and shareholders otherwise permitted under this Agreement, or (iv) transactions between or among the Loan Parties not prohibited hereunder and not involving any other Affiliate.

(b) The Loan Parties shall not (i) without the prior written consent of the Administrative Agent, amend, modify or waive any of the provisions of the instruments, documents or agreements described in the confidential side letter referred to in clause (a) above, the effect of which is to increase the payments or value to be furnished by a Loan Party to any Affiliate (other than for ordinary increases under such instruments, documents and agreements in the ordinary course of business, for which the Loan Parties are presently obligated to make payment in such instrument, document or agreement as in effect on the Effective Date) or which would cause such instruments, documents or agreements to be at prices and on terms and conditions less favorable to that Loan Party than those which would have been charged and imposed in an arms length transaction from unrelated third parties, or (ii) make any payments under such instruments, documents or agreements in advance of the date when due (other than payments made to Affiliates to fund obligations or anticipated claims under workers' compensation, medical plans, employee benefit plans or agreements, and other similar plans, all in accordance with current practices).

(c) The Borrowers shall use their best efforts to cause their Affiliates to execute and deliver to the Agent and the Revolving Credit Lenders such documentation as the Administrative Agent may reasonably require to evidence the Affiliates' agreement with the provisions of this Section 5.20.

5.21. ADDITIONAL SUBSIDIARIES. If any additional Subsidiary (other than of DSW, DSW Shoe and their Subsidiaries) is formed or acquired after the Effective Date, the Lead Borrower will notify the Collateral Agent thereof and (a) the Loan Parties will cause such Subsidiary to become a Borrower or Facility Guarantor hereunder, as determined by the Collateral Agent, within three (3) Business Days after such Subsidiary is formed or acquired and promptly take such actions to create and perfect Encumbrances on such Subsidiary's assets to secure the Liabilities as the Collateral Agent or the Majority Lenders shall reasonably request and (b) if any shares of capital stock or Indebtedness of such Subsidiary are owned by or on behalf of any Loan Party, the Loan Parties will cause such shares and promissory notes evidencing such Indebtedness to be pledged within three (3) Business Days after such Subsidiary is formed or acquired. Nothing contained herein shall be deemed a modification of any other provisions of this Agreement restricting the formation or acquisition of Subsidiaries by the Loan Parties.

5.22. FURTHER ASSURANCES.

(a) No Loan Party will hereafter acquire any asset or any interest in property (other than Leasehold Interests not required to be pledged under the Senior Non-Convertible Facility) which is not, immediately upon such acquisition, subject to such a perfected Collateral Interest in favor of the Collateral Agent to secure the Liabilities (subject only to Permitted Encumbrances).

(b) Each Loan Party shall execute and deliver to the Collateral Agent such instruments, documents, and papers, and shall do all such things from time to time hereafter as the Collateral Agent may reasonably request to carry into effect the provisions and intent of this Agreement; to protect and perfect the Collateral Agent's Collateral Interests in the Collateral; and to comply with all applicable statutes and laws, and facilitate the collection of the Receivables Collateral. Each Loan Party shall execute all such instruments as may be reasonably

required by the Collateral Agent with respect to the recordation and/or perfection of the Collateral Interests created or contemplated herein.

(c) Each Loan Party hereby designates the Collateral Agent as and for that Loan Party's true and lawful attorney, with full power of substitution, to sign and file any financing statements in order to perfect or protect the Collateral Agent's Collateral Interests in the Collateral.

(d) This Agreement constitutes an authenticated record which authorizes the Collateral Agent to file such financing statements as the Collateral Agent determine as appropriate to perfect or protect the Collateral Interests created by this Agreement.

5.23. ADEQUACY OF DISCLOSURE.

No document, instrument, agreement, or paper hereafter given to the Agent or to any Revolving Credit Lender by or on behalf of each Loan Party or any guarantor of the Liabilities in connection with the execution of this Agreement by the Agent and to each Revolving Credit Lender contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements therein not misleading.

5.24. NO RESTRICTIONS ON LIABILITIES. No Loan Party shall enter into or directly or indirectly become subject to any agreement which prohibits or restricts, in any manner, any Loan Party's:

(a) Creation of, and granting of Collateral Interests in favor of the Collateral Agent.

(b) Incurrence of Liabilities.

5.25. RESTRICTIONS ON PAYMENT OF SENIOR NON-CONVERTIBLE FACILITY.

(a) The Senior Non-Convertible Facility may be paid only as follows:

(i) Except as permitted pursuant to clauses (i)(B) and (ii)(B) hereof, interest and fees on the Senior Non-Convertible Facility may be paid in cash in the ordinary course in accordance with the terms of the documents evidencing the Senior Non-Convertible Facility as long as (A) no Specified Event of Default has occurred and is continuing, and (B) Average Excess Availability for the thirty (30) day period prior to the making of such payment is equal to or greater than Thirty-Five Million Dollars ($35,000,000.00), plus the amount of the proposed payment, and Excess Availability immediately after giving effect to such payment is equal to or greater than Thirty-Five Million Dollars ($35,000,000.00). If such Excess Availability requirements are not satisfied, no interest or fee payments may be made on the Senior Non-Convertible Facility in cash (i.e. partial payments of interest or fees on the Senior Non-Convertible Facility in cash shall not be permitted);

(ii) Subject to the terms of the Intercreditor Agreement, principal on the Senior Non-Convertible Facility may be paid only as follows:

(A) From the net cash proceeds of the Non-Convertible Senior Collateral; or

(B) So long as no Event of Default then exists or would arise therefrom, from payments made on account of the RVI Note in accordance with the provisions of clause (g) of the definition of Permitted Dispositions; or

(C) Upon satisfaction of each of the following conditions and only to the extent that the following conditions are not breached as a result of such payment:

(I) The Borrowers shall have achieved at least 85% of Consolidated EBITDA set forth in the most receipt forecasts furnished pursuant to Section 5.10(b) hereof for the twelve months ending on the last day of the month immediately preceding such payment; and

(II) After giving effect to such payment, Excess Availability shall be at least $90,000,000, as determined by the Collateral Agent; and

(III) After giving effect to such payment, pro forma projected Excess Availability for each of the ninety
(90) days subsequent to the date of such payment must be at least $90,000,000, as determined by the Collateral Agent;

(IV) Prior to, at the time of, and after giving effect to such payment, no Specified Event of Default then exists; or

(D) On the scheduled maturity date of the Senior Non-Convertible Facility (but not any accelerated maturity date).

(b) The Loan Parties shall not hereafter effect or permit any changes in or amendment to (i) the terms relating to the repayment of the Senior Non-Convertible Facility, or (ii) except as provided in the Intercreditor Agreement, any of the instruments, documents or agreements evidencing the Senior Non-Convertible Facility. If, notwithstanding the foregoing, CCM, as agent under the Senior Non-Convertible Facility, hereafter imposes any additional or more restrictive covenants (financial or otherwise) or events of default with respect to the Senior Non-Convertible Facility (including by amendment or an existing covenant or event of default, by waiver, consent or otherwise) than is imposed on the Effective Date under this Agreement or any Loan Party grants to CCM, as agent under the Senior Non-Convertible Facility, a new covenant or event of default that is not contained in this Agreement as of the Effective Date, the Lead Borrower shall promptly notify, and furnish a copy thereof to the Administrative Agent.

5.26. UNRESTRICTED SUBSIDIARIES.No Unrestricted Subsidiary shall, at any time, have assets in excess of $500,000 in the aggregate.

5.27. PARENT'S LINE OF BUSINESS. The Parent shall not engage in any business, and shall not own any property or assets, other than acquiring and owning (a) the capital stock of any

other Loan Party, DSW or the Unrestricted Subsidiaries, and (b) any investments permitted to be made by the Parent hereunder, and (c) otherwise incidental to the operation of the business of a holding company.

ARTICLE 6 - FINANCIAL REPORTING AND PERFORMANCE COVENANTS:

6.1. MAINTAIN RECORDS. The Loan Parties shall:

(a) At all times, keep proper books of account, in which full, true, and accurate entries shall be made of all of the Loan Parties' financial transactions, all in accordance with GAAP applied consistently with prior periods to fairly reflect the Consolidated financial condition of the Loan Parties at the close of, and its results of operations for, the periods in question.

(b) Timely provide the Administrative Agent with those financial reports, statements, and schedules required by this Article 6 or otherwise, each of which reports, statements and schedules shall be prepared, to the extent applicable, in accordance with GAAP applied consistently with prior periods to fairly reflect the Consolidated financial condition of the Loan Parties at the close of, and the results of operations for, the period(s) covered therein.

(c) At all times, keep accurate current records of the Collateral including, without limitation, accurate current stock, cost, and sales records of its Inventory for each Division, accurately and sufficiently itemizing and describing the kinds, types, and quantities of Inventory and the cost and selling prices thereof.

(d) At all times, retain (i) Deloitte and Touche, LLP, or such other nationally recognized independent certified public accountants who are reasonably satisfactory to Schottenstein Stores Corporation (as long as it remains in Control of the Borrowers) or (ii) or such other independent certified public accountants who are reasonably satisfactory to Schottenstein Stores Corporation (as long as it remains in Control of the Borrowers) and the Administrative Agent, and instruct such accountants, subject to the terms of such accountants' internal policies, and subject to the confidentiality provisions of this Agreement, to fully cooperate with, and be available to, the Administrative Agent to discuss the Loan Parties' financial performance, financial condition, operating results, controls, and such other matters, within the scope of the retention of such accountants, as may be raised by the Administrative Agent.

(e) Not change any Loan Party's fiscal year.

6.2. ACCESS TO RECORDS.

(a) Each Loan Party shall accord the Agent with reasonable access during normal business hours from time to time as each Agent may require to all properties owned by or over which any Loan Party has control. The Agent shall have the right, and each Loan Party will permit the Agent from time to time as the Agent may request, to examine, inspect, copy, and make extracts from any and all of the Loan Parties' books, records, electronically stored data, papers, and files. Each Loan Party shall make that Loan Party's copying facilities available to the Agent.

(b) Each Loan Party hereby authorizes the Agent to:

(i) Inspect, copy, duplicate, review, cause to be reduced to hard copy, run off, draw off, and otherwise use any and all computer or electronically stored information or data which relates to any Loan Party. Each Loan Party shall request full cooperation with the Agent from any service bureau, contractor, accountant, or other Person.

(ii) Verify at any time the Collateral or any portion thereof, including verification with Account Debtors, and/or with each Loan Party's computer billing companies, collection agencies, and accountants.

(c) The Agent from time to time may designate one or more representatives to exercise the Agent's rights under this Section 6.2 as fully as if the Agent were doing so, provided that the Agent shall not designate a Person which is in a Competitive Business.

6.3. PROMPT NOTICE TO ADMINISTRATIVE AGENT.

(a) The Lead Borrower shall provide the Administrative Agent with written notice promptly upon the occurrence of any of the following events, which written notice shall be with reasonable particularity as to the facts and circumstances in respect of which such notice is being given:

(i) Any change in any Loan Party's President, chief executive officer, chief operating officer, and chief financial officer (without regard to the title(s) actually given to the Persons discharging the duties customarily discharged by officers with those titles).

(ii) Any ceasing of any Loan Party's payment of the debts of that Loan Party generally as they mature, in the ordinary course, to its creditors (other than its ceasing of making of such payments on account of a dispute which, if adversely determined to the Loan Parties is not reasonably likely to have a Material Adverse Effect).

(iii) Any failure by any Loan Party to pay rent at any of that Loan Party's locations, which failure continues for more than three (3) days following the last day on which such rent was payable unless such failure is not reasonably likely to have a Material Adverse Effect.

(iv) Any material adverse change in the business, operations, or financial affairs of any Borrower.

(v) The occurrence of any Default.

(vi) Any intention on the part of any Loan Party to discharge that Loan Party's present independent accountants or any withdrawal or resignation by such independent accountants from their acting in such capacity (as to which, see Subsection 6.1(d)).

(vii) Any litigation which, if determined adversely to any Loan Party, is reasonably likely to have a Material Adverse Effect.

(viii) Any intention of a Borrower to enter into a consignment arrangement or licensing or other similar agreement (whether for intellectual property, leased departments in stores or otherwise) with any other Person (other than a Loan Party).

(ix) Any Material Accounting Changes.

(x) Any event, occurrence or circumstance not specifically described herein which is reasonably likely to have a Material Adverse Effect.

(xi) Any Loan Party's entering into a license agreement after the Effective Date.

(xii) Any Loan Party's entering into a Capital Lease after the Effective Date.

(b) The Lead Borrower shall:

(i) Provide the Administrative Agent, when so distributed, with copies of any materials distributed to all shareholders of the Lead Borrower (qua such shareholders).

(ii) Provide the Administrative Agent:

(A) When filed, copies of all filings with the SEC. Such copies may be provided in electronic format.

(B) When received, copies of all correspondence from the SEC, other than routine general communications from the SEC.

(C) Should any of the information on any of the Exhibits hereto become misleading in any material respect, the Borrower shall promptly advise the Administrative Agent in writing with such revisions or updates as may be necessary or appropriate to update or correct the same; provided however that no such Exhibit shall be deemed to have been amended, modified or superseded by any such correction or update, nor shall any breach of representation or warranty resulting from the inaccuracy or incompleteness of such Exhibit be deemed to have been cured or waived, unless and until the Administrative Agent, in its discretion shall have accepted in writing such revisions.

(iii) At the request of the Administrative Agent, from time to time, provide the Administrative Agent with copies of all advertising (including copies of all print advertising and duplicate tapes of all video and radio advertising).

(iv) Provide the Administrative Agent, when received by any Loan Party, with a copy of any management letter or similar communications from any independent accountant of any Loan Party.

6.4. WEEKLY REPORTS. Weekly, on Friday of each week (as of the then immediately preceding Saturday) the Lead Borrower shall provide the Administrative Agent with borrowing base certificates (each, a "BORROWING BASE CERTIFICATE") in the form of EXHIBIT 6.4 annexed hereto (as such form may be revised from time to time by the Administrative Agent), prepared separately for each Division and combined for all Borrowers, and sales audit reports and flash collateral reports (each in such form as may be specified from time to time by the Collateral Agent) prepared separately for each Division and combined for all Borrowers. Such reports may be sent to the Administrative Agent by facsimile transmission, provided that the original thereof is forwarded to the Administrative Agent on the date of such transmission.

6.5. MONTHLY REPORTS. Monthly, the Lead Borrower shall provide the Administrative Agent with those financial statements and reports described in EXHIBIT 6.5, annexed hereto, at the times set forth in such exhibit.

6.6. QUARTERLY REPORTS. Quarterly, within forty-five (45) days following the end of each of the Loan Parties' fiscal quarters, the Lead Borrower shall provide the Administrative Agent with the following:

(a) An original counterpart of a management prepared financial statement (which shall be prepared in the same manner and using the same assumptions as set forth in the forecasts furnished to, and approved by, the Administrative Agent pursuant to the provisions of Section 6.10(c) hereof) for
(i) the Loan Parties on a consolidated basis, (ii) the Filene's Business, and
(iii) the Value City Business, in each case for the fiscal quarter most recently ended, and for the period from the beginning of the Loan Parties' then current fiscal year through the end of the subject quarter, with comparative information for the same period of the previous fiscal year, which statement shall include a balance sheet, statement of operations, and cash flows and comparisons for the corresponding quarter of the then immediately previous year, as well as to the Loan Party's forecast.

(b) The officer's compliance certificate described in Section 6.8.

6.7. ANNUAL REPORTS.

(a) Annually, within ninety (90) days following the end of the Loan Parties' fiscal year, the Lead Borrower shall furnish the Administrative Agent with the following:

(i) An original signed counterpart of the Loan Parties' Consolidated annual financial statement, which statement shall have been prepared by, and bear the unqualified opinion of, the Lead Borrower's independent certified public accountants (i.e. said statement shall be "certified" by such accountants) and shall include, at a minimum (with comparative information for the then prior fiscal year) a balance sheet, statement of operations, statement of changes in shareholders' equity, and cash flows.

(ii) A consolidating annual financial statement for (i) the Filene's Business, and (ii) the Value City Business which shall include (with comparative information for the then prior fiscal year) a balance sheet and statement of operations.

(iii) The officer's compliance certificate described in
Section 6.8.

(b) No later than fifteen (15) days prior to the end of each of the Loan Parties' fiscal years, the Lead Borrower shall give written notice to such independent certified accountants (with a copy of such notice, when sent, to the Administrative Agent) that such annual financial statement will be delivered by the Lead Borrower to the Administrative Agent (for subsequent distribution to each Revolving Credit Lender), and that the Lead Borrower has been advised that the Administrative Agent and each Revolving Credit Lender will rely thereon with respect to the administration of, and transactions under, the credit facility contemplated by this Agreement.

6.8. OFFICERS' CERTIFICATES. The Lead Borrower shall cause either the Lead Borrower's Chief Executive Officer, President, Executive Vice President, Chief Financial Officer, Controller, or Treasurer (collectively, an "AUTHORIZED OFFICER"), in each instance, to provide such Person's certificate with the monthly, quarterly and annual financial statements to be provided pursuant to this Agreement, which certificate shall:

(a) Indicate that (i) with respect to the Consolidated financial statement, the subject statement was prepared in accordance with GAAP consistently applied, and (ii) with respect to all financial statements, presents fairly the financial condition of the applicable Loan Parties at the close of, and the results of the applicable Loan Parties' operations and cash flows (where such cash flows are required to be provided) for, the period(s) presented, subject, however to the following:

(A) Usual year end adjustments (this exception shall not be included in the certificate which accompanies such annual statement).

(B) Material Accounting Changes (in which event, such certificate shall include a schedule (in reasonable detail) of the effect of each such Material Accounting Change.

(b) Indicate either that (i) no Default has occurred and is continuing, or (ii) if such an event has occurred, its nature (in reasonable detail) and the steps (if any) being taken or contemplated by the Loan Parties to be taken on account thereof.

6.9. INVENTORIES, APPRAISALS, AND AUDITS.

(a) The Collateral Agent, at the reasonable expense of the Loan Parties, may participate in and/or observe each scheduled physical count of Inventory which is undertaken on behalf of any Loan Party.

(b) The Loan Parties, at their own expense, shall cause not less than one (1) physical inventory of each of Division to be undertaken in each twelve (12) month period during which this Agreement is in effect conducted by such inventory takers as are reasonably

satisfactory to the Collateral Agent and following such methodology as may be reasonably satisfactory to the Collateral Agent.

(i) The Lead Borrower, within forty-five (45) days following the completion of such inventory, shall provide the Collateral Agent with a reconciliation of the results of each such inventory (as well as of any other physical inventory undertaken by any Loan Party) and shall post such results to the Loan Parties' stock ledger and, as applicable to the Loan Parties' other financial books and records .

(ii) The Collateral Agent, in their reasonable, good faith discretion, if any Event of Default has occurred and is continuing, may cause such additional inventories to be taken as the Collateral Agent determine (each, at the expense of the Loan Parties).

(c) The Collateral Agent may obtain appraisals of the Collateral (copies of which, subject to the approval of the appraiser, shall be provided to the Lead Borrower promptly upon receipt thereof), from time to time (in all events, at the Loan Parties' expense) conducted by Hilco Appraisal Services, LLC or such appraisers as are satisfactory to the Collateral Agent. The Collateral Agent may conduct up to two (2) appraisals (in each event, at the Loan Parties' expense) of the Collateral during any twelve (12) month period during which this Agreement is in effect, but in their reasonable, good faith discretion, during the occurrence and continuance of an Event of Default, may undertake additional such appraisals (likewise at the Loan Party's expense) during such period.

(d) The Collateral Agent may conduct up to two (2) commercial finance field examinations (in each event, at the Loan Parties' expense) of the Loan Parties' books and records during any twelve (12) month period during which this Agreement is in effect, but in their reasonable, good faith discretion during the occurrence and continuance of an Event of Default, may undertake additional such audits (likewise at the Loan Party's expense) during such period.

(e) Notwithstanding anything to the contrary herein contained, upon the occurrence of any event or circumstance which is reasonably likely to have a material adverse effect on the business, operations, property, assets, or financial condition of any Division, the limitations set forth in clauses (c) and (d) on the number of appraisals and commercial finance examinations which the Agent may cause to be undertaken for such Division only shall be inapplicable and the Agent may undertake as many appraisals and commercial finance examinations of such Division with such frequency as the Agent may deem reasonably appropriate and necessary (none of which shall be included in determining the number of appraisals and commercial finance examinations the Agent may undertake with respect to other Divisions).

(f) Pursuant to the terms of the Intercreditor Agreement, CCM, as agent under the Senior Non-Convertible Facility, may require the Collateral Agent to undertake appraisals of the Collateral by appraisers selected in accordance with the provisions of Section 6.9(c) hereof. Any such appraisals undertaken by the Collateral Agent at the requirement of CCM shall not reduce the number of appraisals permitted to be undertaken by the Collateral Agent under Section 6.9(c) hereof. To the extent that the results of any such appraisal reflect a reduction in the Appraised Inventory Liquidation Value, the Collateral Agent may in their reasonable, good

faith discretion reduce the Inventory Advance Rates in a manner consistent with the reduced Appraised Inventory Liquidation Value. In no event shall such Inventory Advance Rates be subject to increase as a result of such appraisals, provided that nothing contained herein shall impair the right of the Collateral Agent to increase the Inventory Advance Rate as set forth in the definition of such term..

(g) The Collateral Agent from time to time may undertake "mystery shopping" (so-called) visits to all or any of the Loan Parties' business premises.

6.10. ADDITIONAL FINANCIAL INFORMATION.

(a) In addition to all other information required to be provided pursuant to this Article 6, the Lead Borrower promptly shall provide the Agent with such other and additional information concerning the Loan Parties, the Collateral, the operation of the Loan Parties' business, and the Loan Parties' financial condition, including original counterparts of financial reports and statements, as the Agent may from time to time reasonably request from the Lead Borrower.

(b) The Lead Borrower shall, upon the Administrative Agent's request, provide the Administrative Agent, from time to time hereafter, with updated forecasts of the Loan Parties' anticipated performance and operating results for the current fiscal year. Such forecasts shall be in a format consistent with the format previously provided to the Administrative Agent.

(c) In all events, the Lead Borrower, no sooner than ninety (90) nor later than sixty (60) days prior to the end of each of the Loan Parties' fiscal years, shall provide the Administrative Agent with an updated and extended forecast which shall go out at least through the end of the then next fiscal year and shall include a statement of operations, balance sheet, and statement of cash flow, by month, each Consolidated (with consolidating schedules by Division) and each prepared in conformity with GAAP and consistent with the Loan Parties' then current accounting practices.

(d) When available the "Annual Budget", as approved by the Lead Borrowers' Board of Directors, shall be provided to the Administrative Agent. The Annual Budget shall be subject to the approval of the Administrative Agent (whose approval shall not be unreasonably withheld) only if the Annual Budget varies in a material way from the Business Plan for such fiscal year.

(e) Each Loan Party recognizes that all commercial finance examinations, inventories, analysis, financial information, and other materials which the Agent may obtain, develop, or receive with respect to the Loan Parties (other than appraisals and inventories received from third parties) are confidential to the Agent and that, except as otherwise provided herein, no Loan Party is entitled to receipt of any of such commercial finance examinations, inventories, analysis, financial information, and other materials, nor copies or extracts thereof or therefrom.

6.11. INFORMATION DELIVERED PURSUANT TO ARTICLE 6.

All information required to be delivered pursuant to Article 6 may be delivered by and in electronic format.

ARTICLE 7 - USE OF COLLATERAL:

7.1. USE OF INVENTORY COLLATERAL.

(a) No Loan Party shall engage in any of the following with respect to its Inventory:

(i) Any sale other than for fair consideration in the conduct of the Loan Parties' business in the ordinary course.

(ii) Sales or other dispositions to creditors, except returns in the ordinary course of business.

(iii) Sales or other dispositions in bulk except in the ordinary course of business consistent with past practices.

(iv) Sales in breach of any provision of this Agreement.

(v) Sales other than in connection with Permitted Dispositions.

(b) Without the prior written consent of the Collateral Agent, no sale of Inventory shall be on consignment (other than between Loan Parties), approval, or under any other circumstances such that, with the exception of the Loan Parties' customary return policy applicable to the return of inventory purchased by the Loan Parties' retail customers in the ordinary course, such Inventory may be returned to a Loan Party without the consent of the Collateral Agent.

7.2. INVENTORY QUALITY. All Inventory now owned or hereafter acquired by each Loan Party is and will be of good and merchantable quality, consistent with past practices.

7.3. ADJUSTMENTS AND ALLOWANCES. Each Loan Party may grant such allowances or other adjustments to that Loan Party's Account Debtors as that Loan Party may reasonably deem to accord with sound business practice and which are normal and customary extensions and adjustments in the ordinary course of business, provided, however, the authority granted the Loan Parties pursuant to this
Section 7.3 may be limited or terminated by the Administrative Agent at any time in the Administrative Agent's reasonable, good faith discretion after the occurrence and during the continuance of an Event of Default.

7.4. VALIDITY OF ACCOUNTS.

(a) Except for adjustments and disputes in the ordinary course of business, the amount of each Account shown on the books, records, and invoices of the Loan Parties represented as owing by each Account Debtor is the correct amount actually owing by such Account Debtor and shall have been fully earned by performance by the Loan Parties.

(b) No Loan Party has any knowledge of any impairment of the validity or collectibility of any of the Accounts, other than returns, reserves, unauthorized use of credit cards, bad checks, adjustments and disputes which occur in the ordinary course of business. The Lead Borrower shall notify the Administrative Agent of any such impairment immediately after any Loan Party becomes aware of any such impairment.

(c) No Loan Party shall post any bond to secure any Loan Party's performance under any agreement to which any Loan Party is a party nor cause any surety, guarantor, or other third party obligee to become liable to perform any obligation of any Loan Party (other than to the Collateral Agent) in the event of any Loan Party's failure so to perform, if, as a result of the surety, guarantor or third party obligee's performance, such Person would obtain a Encumbrance on any Collateral having priority to the Encumbrance of the Collateral Agent.

7.5. NOTIFICATION TO ACCOUNT DEBTORS. The Collateral Agent shall have the right (after the occurrence of a Cash Control Event) to notify any of the Loan Parties' Account Debtors to make payment directly to the Administrative Agent and to collect all amounts due on account of the Collateral.

ARTICLE 8 - CASH MANAGEMENT. PAYMENT OF LIABILITIES:

8.1. DEPOSITORY ACCOUNTS.

(a) Annexed hereto as EXHIBIT 8.1 is a listing of all present DDA's, which listing includes, with respect to each depository of the Loan Parties, the following: (i) the name and address of that depository; (ii) the account number(s) of the account(s) maintained with such depository; and (iii) a contact person at such depository.

(b) The Lead Borrower shall deliver the following to the Administrative Agent, as a condition to the effectiveness of this Agreement:

(i) Notifications, executed on behalf of each Borrower, to each depository institution with which any DDA is maintained (other than any Exempt DDA and the Collection Accounts), in form satisfactory to the Administrative Agent of the Collateral Agent's interest in such DDA. Such Notifications shall be held in escrow by the Administrative Agent until the occurrence of a Cash Control Event at which time they may be delivered to the applicable depositary institutions.

(ii) A Collection Account Agreement with any depository institution at which a Collection Account is maintained, including those listed on EXHIBIT 8.1.

(c) No Borrower will establish any DDA hereafter (other than an Exempt DDA) unless, contemporaneous with such establishment, the Lead Borrower delivers the following to the Administrative Agent:

(i) A notification for the depository at which such DDA is established if the same would have been required pursuant to Section 8.1(b)(i) if the subject DDA were open at the execution of this Agreement.

(ii) A Collection Account Agreement executed on behalf of the depository at which such DDA is established if the same would have been required pursuant to Section 8.1(b)(ii) if the subject DDA were open at the execution of this Agreement.

8.2. CREDIT CARD RECEIPTS.

(a) Annexed hereto as EXHIBIT 8.2 is a Schedule which describes all arrangements to which any Borrower is a party with respect to the payment to that Borrower of the proceeds of credit card charges for sales by that Borrower.

(b) The Lead Borrower shall deliver to the Administrative Agent, as a condition to the effectiveness of this Agreement, an agreement executed on behalf of each Borrower with each of each Borrower's credit card clearinghouses and processors (in form satisfactory to the Administrative Agent), which agreement provides that, during the existence of a Cash Control Event, payment of all credit card charges submitted by that Borrower to that clearinghouse or other processor and any other amount payable to that Borrower by such clearinghouse or other processor shall be directed to the Administrative Agent's Account or as otherwise designated from time to time by the Administrative Agent. No Borrower shall change such direction or designation except upon and with the prior written consent of the Administrative Agent and no Borrower will enter into any agreements with a new credit card clearinghouse or processor hereafter unless, contemporaneous with such establishment, the Lead Borrower delivers to the Administrative Agent an agreement with such credit card clearinghouse or processor of like terms to those required hereunder on the Closing Date.

8.3. THE ADMINISTRATIVE AGENT'S, COLLECTION, AND OPERATING ACCOUNTS.

(a) The following checking accounts have been or will be established (and are so referred to herein):

(i) The "ADMINISTRATIVE AGENT'S ACCOUNT(S)" (so referred to herein): Established by the Administrative Agent with NCB for each Division as more specifically described on EXHIBIT 8.3 hereto.

(ii) The "COLLECTION ACCOUNTS" (so referred to herein):
Established by the Lead Borrower with those financial institutions described on EXHIBIT 8.3 hereof.

(iii) The "OPERATING ACCOUNTS" (so referred to herein):
Established by each Division with NCB as more specifically described on EXHIBIT 8.3 hereto.

(b) The contents of each DDA and of each Collection Account constitutes Collateral and Proceeds of Collateral. The contents of each Administrative Agent's Account constitutes the Administrative Agent's property.

(c) The Borrowers shall pay all fees and charges of, and maintain such impressed balances as may be required by the depository in which any account is opened as required hereby (even if such account is opened by and/or is the property of the Agent).

8.4. PROCEEDS AND COLLECTIONS.

(a) All Receipts constitute Collateral and proceeds of Collateral.

(b) Absent a Cash Control Event, the Borrowers may collect all Receipts and use such Receipts in the ordinary course of business.

(c) During a Cash Control Event, the Borrowers for each Division shall cause all Receipts to be deposited or transferred to the Administrative Agent's Account for such Division.

(d) Subject to this Section 8.4, upon notice from the Administrative Agent to the Lead Borrower that a Cash Control Event has occurred:

(i) All Receipts:

(A) Shall be held in trust by the Borrowers for the Collateral Agent.

(B) Shall not be commingled with any of any Borrower's other funds.

(C) Shall be deposited and/or transferred only to a Collection Account or the applicable Administrative Agent's Accounts, and the Borrowers shall not have any authority to withdraw any amounts from such accounts and the Administrative Agent shall have no obligation to deposit such Receipts in the applicable Operating Account.

(ii) The Lead Borrower shall cause the ACH transfer or wire transfer to the Collection Account or the applicable Administrative Agent's Account (except in those instances in which such transfer is not within the control of the Lead Borrower or any other Borrower), no less frequently than daily (and whether or not there is then an outstanding balance in the Loan Account) of the following:

(A) The then contents of each DDA (other than any Exempt DDA), each such transfer to be net of any minimum balance, not to exceed $2,000.00, as may be required to be maintained in the subject DDA by the bank at which such DDA is maintained.

(B) The proceeds of all credit card charges not otherwise provided for pursuant hereto.

(iii) In the event that, notwithstanding the provisions of this Section 8.4(d), any of the Borrowers receives or otherwise has dominion and control of any Receipts, or any proceeds or collections of any Collateral, such Receipts, proceeds, and collections shall be held in trust by that Borrower for the Agent and shall not be commingled with any of that Borrower's other funds or deposited in any account of any Borrower other than as instructed by the Administrative Agent.

(iv) The Borrowers shall not disburse any funds in the DDAs, Collection Accounts or other deposit accounts (other than Exempt DDAs and the

Operating Accounts in the ordinary course of business consistent with past practices) other than in accordance with the provisions of this Section 8.4.

8.5. PAYMENT OF LIABILITIES.

(a) On each Business Day after the occurrence and during the continuance of a Cash Control Event, the Administrative Agent shall apply the then collected balance of each Administrative Agent's Account (net of fees charged, and of such impressed balances as may be required by the bank at which such Administrative Agent's Account is maintained) First, towards the SwingLine Loans of the applicable Division, Second, towards the unpaid balance of the Loan Account for such Division, and Third, to all other Liabilities in such order as the Administrative Agent may determine.

(b) The following rules shall apply to deposits and payments under and pursuant to this Section 8.5:

(i) Funds shall be deemed to have been deposited to an Administrative Agent's Account on the Business Day on which deposited, provided that notice of such deposit is available to the Administrative Agent by 1:00PM on that Business Day.

(ii) Funds paid to the Administrative Agent, other than by deposit to an Administrative Agent's Account, shall be deemed to have been received on the Business Day when they are good and collected funds, provided that notice of such payment is available to the Administrative Agent by 1:00PM on that Business Day.

(iii) If notice of a deposit to an Administrative Agent's Account (Section 8.5(b)(i)) or payment (Section 8.5(b)(ii)) is not available to the Administrative Agent until after 1:00PM on a Business Day, such deposit or payment shall be deemed to have been made at 9:00AM on the then next Business Day.

(iv) All deposits to an Administrative Agent's Account and other payments to the Administrative Agent are subject to clearance and collection.

(c) The Administrative Agent shall transfer to the Operating Account of the applicable Division any surplus in the Administrative Agent's Account for such Division remaining after the application towards the Liabilities referred to in Section 8.5(a), above (less those amounts which are to be netted out, as provided therein) provided, however, in the event that

(i) any Default has occurred and is continuing; and

(ii) one or more L/Cs and Banker's Acceptances are then outstanding,

then the Administrative Agent may, and at the direction of the SuperMajority Lenders shall, establish a funded reserve of up to 105% of the aggregate Stated Amounts of such L/C's and such Banker's Acceptances. Such funded reserve shall either be (i) returned to the applicable Borrower provided that no Borrower is in Default or (ii) applied towards the Liabilities in the manner set forth herein following the occurrence of any Event of Default described in Section or acceleration following the occurrence of any other Event of Default.

8.6. THE OPERATING ACCOUNT.

(a) Except as otherwise specifically provided in, or permitted by, this Agreement, funds in the Operating Account of each Division shall be utilized to fund disbursements made by such Division, including, without limitation, from any expense accounts maintained by such Division, provided that funds in the Operating Account for the Filene's Business may be distributed to the Lead Borrower in the ordinary course to the extent necessary in order that the Lead Borrower may pay the expenses of the Filene's Business consistent with the parties' prior practices.

(b) After the occurrence and during the continuance of any Event of Default or at any time that Average Excess Availability for any five (5) consecutive Business Days is less than $48,000,000.00, NCB shall not be obligated to permit any outgoing ACH transfers unless the amount of the proposed transfer is fully prefunded in accordance with the requirements and practices of NCB.

ARTICLE 9 - GRANT OF SECURITY INTEREST:

9.1. GRANT OF SECURITY INTEREST. To secure the Borrowers' prompt, punctual, and faithful performance of all and each of the Liabilities, each Borrower hereby grants to the Collateral Agent, for the ratable benefit of the Revolving Credit Lenders, the Issuer, the Agent, and the Affiliates of each of them, a continuing security interest in and to, and assigns to the Collateral Agent, for the ratable benefit of the Revolving Credit Lenders, the following, and each item thereof, whether now owned or now due, or in which that Borrower has an interest, or hereafter acquired, arising, or to become due, or in which that Borrower obtains an interest, and all products, Proceeds, substitutions, and accessions of or to any of the following, but excluding the Excluded Property (all of which, together with any other property in which the Collateral Agent may in the future be granted a security interest, is referred to herein as the "COLLATERAL"):

(a) All Accounts.

(b) All Inventory.

(c) All General Intangibles.

(d) All Equipment.

(e) All Goods.

(f) All Farm Products.

(g) All Fixtures.

(h) All Chattel Paper.

(i) All Letter-of-Credit Rights.

(j) All Payment Intangibles.

(k) All Supporting Obligations.

(l) The Commercial Tort Claim described on EXHIBIT 4.17 hereto.

(m) All books, records, and information relating to the Collateral and/or to the operation of each Borrowers' business, and all rights of access to such books, records, and information, and all property in which such books, records, and information are stored, recorded, and maintained.

(n) All Leasehold Interests (other than Leasehold Interests not required to be pledged under the Senior Non-Convertible Facility).

(o) All Investment Property, Instruments, Documents, Deposit Accounts, money, policies and certificates of insurance, deposits, impressed accounts, compensating balances, cash, or other property.

(p) All insurance proceeds, refunds, and premium rebates, including, without limitation, proceeds of fire and credit insurance, whether any of such proceeds, refunds, and premium rebates arise out of any of the foregoing. (9.1 through 9.1(o)) or otherwise.

(q) All liens, guaranties, rights, remedies, and privileges pertaining to any of the foregoing (9.1 through 9.1(p)), including the right of stoppage in transit.

9.2. EXTENT AND DURATION OF SECURITY INTEREST.

(a) The security interest created and granted herein is in addition to, and supplemental of, any security interest previously granted by any Borrower to the Collateral Agent (including, without limitation, under any mortgages and deeds of trust) and shall continue in full force and effect applicable to all Liabilities until

(i) the Termination Date has occurred; and

(ii) all Liabilities have been paid or satisfied in full in cash and satisfactory arrangements with respect to L/Cs and Banker's Acceptances as provided in Section 19.2 hereof have been made; and

(iii) the security interest created herein is specifically terminated in writing by duly authorized officers of the Collateral Agent as provided in Section 19.2(d) hereof.

(b) It is intended that the Collateral Interests created herein extend to and cover all assets of each Borrower, except for Excluded Property.

(c) If a Borrower shall at any time acquire a Commercial Tort Claim, the Lead Borrower shall promptly notify the Administrative Agent in writing of the details thereof and the Borrowers shall take such actions as the Collateral Agent shall request in order to grant to the Collateral Agent, for the ratable benefit of the Revolving Credit Lenders, the Issuer, the Agent, and the Affiliates of each of them, a perfected and first priority security interest therein and in the Proceeds thereof.

ARTICLE 10 - COLLATERAL AGENT AS BORROWERS' ATTORNEY-IN-FACT:

10.1. APPOINTMENT AS ATTORNEY-IN-FACT. Each Borrower hereby irrevocably constitutes and appoints the Collateral Agent (acting through any officer of the Collateral Agent) as that Borrower's true and lawful attorney, with full power of substitution, following the occurrence of an Event of Default, to convert the Collateral into cash at the sole risk, cost, and expense of that Borrower, but for the sole benefit of the Agent and the Revolving Credit Lenders. The rights and powers granted the Collateral Agent by this appointment include but are not limited to the right and power to:

(a) Prosecute, defend, compromise, or release any action relating to the Collateral.

(b) Sign change of address forms to change the address to which each Borrowers' mail is to be sent to such address as the Collateral Agent shall designate (after which copies of all such mail shall be promptly furnished to the Lead Borrower); receive and open each Borrowers' mail; remove any Receivables Collateral and Proceeds of Collateral therefrom and turn over the balance of such mail either to the Lead Borrower or to any trustee in bankruptcy or receiver of the Lead Borrower, or other legal representative of a Borrower whom the Collateral Agent determine to be the appropriate Person to whom to so turn over such mail.

(c) Endorse the name of the relevant Borrower in favor of the Collateral Agent upon any and all checks, drafts, notes, acceptances, or other items or instruments; sign and endorse the name of the relevant Borrower on, and receive as secured party, any of the Collateral, any invoices, schedules of Collateral, freight or express receipts, or bills of lading, storage receipts, warehouse receipts, or other documents of title respectively relating to the Collateral.

(d) Sign the name of the relevant Borrower on any notice to that Borrowers' Account Debtors or verification of the Receivables Collateral; sign the relevant Borrowers' name on any Proof of Claim in Bankruptcy against Account Debtors, and on notices of lien, claims of mechanic's liens, or assignments or releases of mechanic's liens securing the Accounts.

(e) Take all such action as may be necessary to obtain the payment of any letter of credit and/or banker's acceptance of which any Borrower is a beneficiary.

(f) Repair, manufacture, assemble, complete, package, deliver, alter or supply goods, if any, necessary to fulfill in whole or in part the purchase order of any customer of each Borrower.

(g) Use, license or transfer any or all General Intangibles of each Borrower.

10.2. NO OBLIGATION TO ACT. The Collateral Agent shall not be obligated to do any of the acts or to exercise any of the powers authorized by Section 10.1 herein, but if the Collateral Agent elect to do any such act or to exercise any of such powers, they shall not be accountable for more than they actually receive as a result of such exercise of power, and shall not be responsible to any Borrower for any act or omission to act except for any act or omission to act as to which there is a final determination made in a judicial proceeding (in which

proceeding the Collateral Agent have had an opportunity to be heard) which determination includes a specific finding that the subject act or omission to act had been grossly negligent or in actual bad faith, or willful misconduct.

ARTICLE 11 - EVENTS OF DEFAULT:

The occurrence of any event described in this Article 11 respectively shall constitute an "EVENT OF DEFAULT" herein. The occurrence of any Event of Default shall also constitute, without notice or demand, a default under all other agreements between the Agent or any Revolving Credit Lender and any Loan Party and instruments and papers heretofore, now, or hereafter given the Agent or any Revolving Credit Lender by any Loan Party in connection with any of the Loan Documents.

11.1. FAILURE TO PAY THE REVOLVING CREDIT. The failure by any Loan Party to pay when due any principal of, interest on, or fees in respect of, the Revolving Credit.

11.2. FAILURE TO MAKE OTHER PAYMENTS. The failure by any Loan Party to pay when due (or upon demand, if payable on demand) any payment Liability other than any payment liability on account of the principal of, or interest on, or fees in respect of, the Revolving Credit.

11.3. FAILURE TO PERFORM COVENANT OR LIABILITY (NO GRACE PERIOD). The failure by any Loan Party to promptly, punctually, faithfully and timely perform, discharge, or comply with any covenant or Liability included in any of the following provisions hereof:

Section           Relates to:
-------           -----------
5.6               Indebtedness
5.12              Pay taxes
5.16              Dividends. Investments. Other Corporate Actions
5.17              Loans and Advances
5.18              Affiliate Transactions
5.26              Parent's Line of Business
Article 6         Reporting Requirements (except as set forth in Section 11.4, below)
Article 8         Cash Management

11.4. FINANCIAL REPORTING REQUIREMENTS. The failure by the Borrower to promptly, punctually, faithfully and timely perform, discharge, or comply with the financial reporting requirements included in Section 6.4, subject, however, to the following limited number of grace periods applicable to certain of those requirements:

REPORT / STATEMENT      REQUIRED BY    GRACE PERIOD       NUMBER OF GRACE
                        SECTION                           PERIODS
------------------      -----------    ------------       ---------------
Weekly Report           5.4            Two (2) Business   Twice in any twelve
                                       Days               (12) consecutive months

11.5. FAILURE TO PERFORM COVENANT OR LIABILITY (GRACE PERIOD). The failure by any Loan Party, within twenty (20) days following the earlier of any Authorized Officer's knowledge of a breach of any covenant or Liability not described in any of Sections 11.1, 11.2, 11.3, or 11.4 or of its receipt of written notice from the Administrative Agent of the breach of any of such covenants or Liabilities, provided that if such failure cannot be reasonably cured within such twenty (20) day period and the Loan Parties have diligently proceeded, and continue to diligently proceed, to effectuate a cure of such failure, such failure shall not be an Event of Default hereunder unless (a) such failure is not cured within twenty (20) days after the expiration of such initial twenty (20) day period, or (b) such failure, in the reasonable judgment of the Collateral Agent, is reasonably likely to have a Material Adverse Effect.

11.6. MISREPRESENTATION. The determination by the Administrative Agent that any representation or warranty at any time made by any Loan Party to the Agent or any Revolving Credit Lender was not true or complete in all material respects when given.

11.7. ACCELERATION OF OTHER DEBT. BREACH OF LEASE. The occurrence and continuance of any event of default or other event, which with the giving of notice, the passage of time or both, would be an event of default under (i) the Senior Non-Convertible Facility, or (ii) any other Indebtedness of any Loan Party equal to or in excess of One Million Dollars ($1,000,000.00) to any creditor other than the Agent or any Revolving Credit Lender, (whether or not such Indebtedness has been accelerated), or, Leases aggregating more than five percent (5%) of all Leases of the Loan Parties existing from time to time could be terminated due to a default by a Loan Party thereunder (whether or not the subject creditor or lessor takes any action on account of such occurrence).

11.8. DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any breach of any covenant or Liability imposed by, or of any default under, any agreement between the Agent or any Revolving Credit Lender and any Loan Party or instrument given by any Loan Party to the Agent or any Revolving Credit Lender relating to Indebtedness of any Loan Party in excess of $1,000,000 in the aggregate and the expiration, without cure, of any applicable grace period (notwithstanding that the Agent or Revolving Credit Lender may not have exercised all or any of its rights on account of such breach or default).

11.9. UNINSURED CASUALTY LOSS. The occurrence of any uninsured loss, theft, damage, or destruction of or to any material portion of the Collateral.

11.10. ATTACHMENT. JUDGMENT. RESTRAINT OF BUSINESS.

(a) The entry of any judgment in excess of Two Million Five Hundred Thousand Dollars ($2,500,000.00) against any Loan Party, which judgment (i) is not covered by insurance (as to which the insurer has not notified the applicable Loan Party of the insurer's reservation of rights) or (ii) is not satisfied, stayed (if a money judgment) or appealed from (with execution or similar process stayed) within thirty (30) days of its entry.

(b) The entry of any order or the imposition of any other process having the force of law, the effect of which is to restrain the conduct by any Borrower of its business in the ordinary course and which is reasonably likely to have a Material Adverse Effect.

11.11. BUSINESS FAILURE. Any act by, against, or relating to any Loan Party, or its property or assets, which act constitutes the determination, by any Loan Party, to initiate a program of substantial or total self-liquidation; application for, consent to, or sufferance of the appointment of a receiver, trustee, or other Person, pursuant to court action or otherwise, over all, or any part of any Loan Party's property; the granting of any trust mortgage or execution of an assignment for the benefit of the creditors of any Loan Party, or the occurrence of any other voluntary or involuntary liquidation or extension of debt agreement for any Loan Party; the offering by or entering into by any Loan Party of any composition, extension, or any other arrangement seeking relief generally from or extension of the debts of any Loan Party; or the initiation of any judicial or non-judicial proceeding or agreement by, against, or including any Loan Party which seeks or intends to accomplish a reorganization or arrangement with creditors; and/or the initiation by or on behalf of any Loan Party of the liquidation or winding up of all or any part of any Loan Party's business or operations except that any of the foregoing actions which are commenced against a Loan Party shall not be deemed an Event of Default hereunder as long as such action is timely contested in good faith by that Loan Party by appropriate proceedings and is dismissed within sixty (60) days of the institution of the foregoing.

11.12. BANKRUPTCY. The failure by any Loan Party to generally pay the debts of that Loan Party as they mature; adjudication of bankruptcy or insolvency relative to any Loan Party; the entry of an order for relief or similar order with respect to any Loan Party in any proceeding pursuant to the Bankruptcy Code or any other federal bankruptcy law; the filing of any complaint, application, or petition by any Loan Party initiating any matter in which any Loan Party is or may be granted any relief from the debts of that Loan Party pursuant to the Bankruptcy Code or any other insolvency statute or procedure; the filing of any complaint, application, or petition against any Loan Party initiating any matter in which that Loan Party is or may be granted any relief from the debts of that Loan Party pursuant to the Bankruptcy Code or any other insolvency statute or procedure, which complaint, application, or petition is not timely contested in good faith by that Loan Party by appropriate proceedings or, if so contested, is not dismissed within sixty (60) days of when filed.

11.13. TERMINATION OF GUARANTY. The termination or attempted termination of any Facility Guarantee by any Facility Guarantor.

11.14. CHALLENGE TO LOAN DOCUMENTS.

(a) Any challenge by or on behalf of any Loan Party to the validity of any Loan Document or the applicability or enforceability of any Loan Document strictly in accordance with the subject Loan Document's terms or which seeks to void, avoid, limit, or otherwise adversely affect any security interest created by or in any Loan Document or any payment made pursuant thereto.

(b) Any determination by any court or any other judicial or government authority that any Loan Document is not enforceable strictly in accordance with the subject Loan Document's terms or which voids, avoids, limits, or otherwise adversely affects any security interest created by any Loan Document or any payment made pursuant thereto.

11.15. CHANGE IN CONTROL. Any Change in Control.

ARTICLE 12 - RIGHTS AND REMEDIES UPON DEFAULT:

12.1. ACCELERATION. Upon the occurrence of any Event of Default as described in Section , all Indebtedness of the Loan Parties to the Revolving Credit Lenders shall be immediately due and payable. Upon the occurrence and continuance of any Event of Default other than as described in Section , the Administrative Agent may (and on the issuance of Acceleration Notice(s) requisite to the causing of Acceleration, the Administrative Agent shall) declare all Indebtedness of the Borrowers to the Revolving Credit Lenders to be immediately due and payable and the Agent may exercise all of the Agent's Rights and Remedies as the Agent from time to time thereafter determine as appropriate.

12.2. RIGHTS OF ENFORCEMENT. Subject to the terms of the Intercreditor Agreement, the Collateral Agent shall have all of the rights and remedies of a secured party upon default under the UCC, in addition to which the Collateral Agent shall have all and each of the following rights and remedies:

(a) To give notice to any bank at which any DDA or Collection Account is maintained and in which Proceeds of Collateral are deposited, to turn over such Proceeds directly to the Agent.

(b) To give notice to any customs broker of any of the Borrowers to follow the instructions of the Collateral Agent as provided in any written agreement or undertaking of such broker in favor of the Collateral Agent.

(c) To collect the Receivables Collateral with or without the taking of possession of any of the Collateral.

(d) To take possession of all or any portion of the Collateral.

(e) To sell, lease, or otherwise dispose of any or all of the Collateral, in its then condition or following such preparation or processing as the Collateral Agent deems advisable and with or without the taking of possession of any of the Collateral.

(f) To conduct one or more going out of business sales which include the sale or other disposition of the Collateral.

(g) To apply the Receivables Collateral or the Proceeds of the Collateral towards (but not necessarily in complete satisfaction of) the Liabilities.

(h) To exercise all or any of the rights, remedies, powers, privileges, and discretions under all or any of the Loan Documents.

12.3. SALE OF COLLATERAL.

After the occurrence and during the continuance of an Event of Default:

(a) Any sale or other disposition of the Collateral may be at public or private sale upon such terms and in such manner as the Collateral Agent deem advisable, having due

regard to compliance with any statute or regulation which might affect, limit, or apply to the Collateral Agent' disposition of the Collateral.

(b) The Collateral Agent, in the exercise of the Collateral Agent's rights and remedies upon default, may conduct one or more going out of business sales, in the Collateral Agent's own right or by one or more agents and contractors. Such sale(s) may be conducted upon any premises owned, leased, or occupied by any Borrower. The Collateral Agent and any such agents or contractors, in conjunction with any such sale, may augment the Inventory with other goods (all of which other goods shall remain the sole property of the Collateral Agent or such agents or contractors). Any amounts realized from the sale of such goods which constitute augmentations to the Inventory (net of an allocable share of the costs and expenses incurred in their disposition) shall be the sole property of the Collateral Agent or such agents or contractors and neither any Borrower nor any Person claiming under or in right of any Borrower shall have any interest therein. Upon request of the Lead Borrower, the Collateral Agent shall promptly furnish, or cause to be furnished, to the Lead Borrower a reconciliation of the amounts received from the augmentation of the Inventory and the allocation of costs and expenses thereto.

(c) Unless the Collateral is perishable or threatens to decline speedily in value, or is of a type customarily sold on a recognized market (in which event the Collateral Agent shall provide the Lead Borrower such notice as may be practicable under the circumstances), the Collateral Agent shall give the Lead Borrower at least ten (10) days prior notice, by authenticated record, of the date, time, and place of any proposed public sale, and of the date after which any private sale or other disposition of the Collateral may be made. Each Borrower agrees that such written notice shall satisfy all requirements for notice to that Borrower which are imposed under the UCC or other applicable law with respect to the exercise of the Collateral Agent's rights and remedies upon default.

(d) The Agent and any Revolving Credit Lender may purchase the Collateral, or any portion of it at any sale held under this Article.

(e) The Collateral Agent shall deliver the proceeds of the Collateral Agent' exercise of its rights and remedies upon default to the Administrative Agent for application pursuant to Section 14.6 hereof.

12.4. OCCUPATION OF BUSINESS LOCATION. In connection with the Collateral Agent's exercise of the Collateral Agent's rights under this Article 12, the Collateral Agent may enter upon, occupy, and use any premises owned or occupied by each Borrower, and may exclude each Borrower from such premises or portion thereof as may have been so entered upon, occupied, or used by the Collateral Agent. The Collateral Agent shall not be required to remove any of the Collateral from any such premises upon the Collateral Agent's taking possession thereof, and may render any Collateral unusable to the Borrowers. In no event shall the Collateral Agent be liable to any Borrower for use or occupancy by the Collateral Agent of any premises pursuant to this Article 12, nor for any charge (such as wages for any Borrowers' employees and utilities) incurred in connection with the Collateral Agent's exercise of the Agent's Rights and Remedies.

12.5. GRANT OF NONEXCLUSIVE LICENSE. In connection with the Collateral Agent's exercise of the Collateral Agent's rights under this Article 12, each Borrower hereby grants to

the Collateral Agent a royalty free nonexclusive irrevocable license to use, apply, and affix any trademark, trade name, logo, or the like in which any Borrower now or hereafter has rights, such license being with respect to the Collateral Agent's exercise of the rights hereunder including, without limitation, in connection with any completion of the manufacture of Inventory or sale or other disposition of Inventory.

12.6. ASSEMBLY OF COLLATERAL. In connection with the Collateral Agent's exercise of the Collateral Agent's rights under this Article 12, the Collateral Agent may require any Borrower to assemble the Collateral and make it available to the Collateral Agent at the Borrowers' sole risk and expense at a place or places which are reasonably convenient to both the Collateral Agent and the Lead Borrower.

12.7. RIGHTS AND REMEDIES. The rights, remedies, powers, privileges, and discretions of the Agent hereunder (herein, the "AGENT'S RIGHTS AND REMEDIES") shall be cumulative and not exclusive of any rights or remedies which it would otherwise have. No delay or omission by the Agent in exercising or enforcing any of the Agent's Rights and Remedies shall operate as, or constitute, a waiver thereof. No waiver by the Agent of any Event of Default or of any default under any other agreement shall operate as a waiver of any other default hereunder or under any other agreement. No single or partial exercise of any of the Agent's Rights or Remedies, and no express or implied agreement or transaction of whatever nature entered into between the Agent and any Person, at any time, shall preclude the other or further exercise of the Agent's Rights and Remedies. No waiver by the Agent of any of the Agent's Rights and Remedies on any one occasion shall be deemed a waiver on any subsequent occasion, nor shall it be deemed a continuing waiver. The Agent's Rights and Remedies may be exercised at such time or times and in such order of preference as the Agent may determine. The Agent's Rights and Remedies may be exercised without resort or regard to any other source of satisfaction of the Liabilities.

ARTICLE 13 - REVOLVING CREDIT FUNDINGS AND DISTRIBUTIONS:

13.1. REVOLVING CREDIT FUNDING PROCEDURES. Subject to Section 13.2:

(a) The Administrative Agent shall advise each Revolving Credit Lender, no later than 12:30 p.m. on a date on which any Revolving Credit Loan (other than a SwingLine Loan) is to be made on that date. Such advice, in each instance, may be by telephone or facsimile transmission, provided that if such advice is by telephone, it shall be confirmed in writing. Advice of a Revolving Credit Loan shall include the amount of and interest rate applicable to the subject Revolving Credit Loan.

(b) Subject to that Revolving Credit Lender's Revolving Credit Dollar Commitment, each Revolving Credit Lender, by no later than 3:00 p.m. on the day on which the subject Revolving Credit Loan is to be made, shall Transfer that Revolving Credit Lender's Revolving Credit Commitment Percentage of the subject Revolving Credit Loan to the Administrative Agent in immediately available funds.

13.2. SWINGLINE LOANS.

(a) In the event that, when a Base Margin Rate Revolving Credit Loan is requested, the aggregate unpaid balance of the SwingLine Loan is less than the SwingLine Loan

Ceiling, then the SwingLine Lender may advise the Administrative Agent that the SwingLine Lender has determined to include up to the amount of the requested Revolving Credit Loan as part of the SwingLine Loan. In such event, the SwingLine Lender shall Transfer the amount of the requested Revolving Credit Loan to the Administrative Agent.

(b) The SwingLine Loan shall be converted to a Revolving Credit Loan in which all Revolving Credit Lenders participate as follows:

(i) At any time and from time to time, but no less frequently than once during each five (5) Business Day period, the SwingLine Lender may advise the Administrative Agent that all, or any part of the SwingLine Loan is to be converted to a Revolving Credit Loan in which all Revolving Credit Lenders participate.

(ii) At the times set forth in Section 13.4, the then entire unpaid principal balance of the SwingLine Loan shall be converted to a Revolving Credit Loan in which all Revolving Credit Lenders participate.

(iii) At the initiation of a Liquidation, the then entire unpaid principal balance of the SwingLine Loan shall be converted to a Revolving Credit Loan in which all Revolving Credit Lenders participate.

In either such event, the Administrative Agent shall advise each Revolving Credit Lender of such conversion as if, and with the same effect as if such conversion were the making of a Revolving Credit Loan as provided in Section 9.1.

(c) The SwingLine Lender, in separate capacities, may also be the Administrative Agent and a Revolving Credit Lender.

(d) The SwingLine Lender, in its capacity as SwingLine Lender, is not a "Revolving Credit Lender" for any of the following purposes:

(i) Except as otherwise specifically provided in the relevant Section, any distribution pursuant to Section 14.6.

(ii) Determination of whether the requisite Loan Commitments have Consented to action requiring such Consent.

13.3. ADMINISTRATIVE AGENT'S COVERING OF FUNDINGS.

(a) Each Revolving Credit Lender shall make available to the Administrative Agent, as provided herein, that Revolving Credit Lender's Revolving Credit Commitment Percentage of the following:

(i) Each Revolving Credit Loan, up to the maximum amount of that Revolving Credit Lender's Revolving Credit Dollar Commitment of the Revolving Credit Loans.

(ii) Up to the maximum amount of that Revolving Credit Lender's Revolving Credit Dollar Commitment of each drawing under a L/C and Banker's

Acceptance (to the extent that such drawing under a L/C or Banker's Acceptance is not "covered" by a Revolving Credit Loan as provided herein).

(b) In all circumstances, the Administrative Agent may:

(i) Assume that each Revolving Credit Lender, subject to
Section 13.3(a), timely shall make available to the Administrative Agent that Revolving Credit Lender's Revolving Credit Commitment Percentage of each Revolving Credit Loan, notice of which is provided pursuant to
Section 9.1 and shall make available, to the extent not "covered" by a Revolving Credit Loan, that Revolving Credit Lender's Revolving Credit Commitment Percentage of any honoring of an L/C or a Banker's Acceptance.

(ii) In reliance upon such assumption, make available the corresponding amount to the Borrowers (but the Administrative Agent shall not be obligated to make such amount available to the Borrowers until actual receipt thereof from the Revolving Credit Lenders).

(iii) Assume that each Revolving Credit Lender timely shall pay, and shall make available, to the Administrative Agent all other amounts which that Revolving Credit Lender is obligated to so pay and/or make available hereunder or under any of the Loan Documents.

(c) In the event that, in reliance upon any of such assumptions, the Administrative Agent makes available a Revolving Credit Lender's Revolving Credit Commitment Percentage of one or more Revolving Credit Loans, or any other amount to be made available hereunder or under any of the Loan Documents, which amount a Revolving Credit Lender (a "DELINQUENT REVOLVING CREDIT LENDER") fails to provide to the Administrative Agent within one (1) Business Day of written notice of such failure, then:

(i) The amount which had been made available by the Administrative Agent is an "ADMINISTRATIVE AGENT'S COVER" (and is so referred to herein).

(ii) All interest paid by the Borrowers on account of the Revolving Credit Loan or coverage of the subject drawing of a L/C or Banker's Acceptance which consist of the Administrative Agent's Cover shall be retained by the Administrative Agent until the Administrative Agent's Cover, with interest, has been paid.

(iii) The Delinquent Revolving Credit Lender shall pay to the Administrative Agent, on demand, interest at a rate equal to the prevailing Federal Funds Effective Rate on any Administrative Agent's Cover in respect of that Delinquent Revolving Credit Lender.

(iv) The Administrative Agent shall have succeeded to all rights to payment to which the Delinquent Revolving Credit Lender otherwise would have been entitled hereunder in respect of those amounts paid by or in respect of the Borrowers on account of the Administrative Agent's Cover together with interest until it is repaid. Such payments shall be deemed made first towards the amounts in respect of which the Administrative Agent's Cover was provided and only then towards amounts in which the

Delinquent Revolving Credit Lender is then participating. For purposes of distributions to be made pursuant to Section 13.4(a) (which relates to ordinary course distributions) or Section 14.6 (which relates to distributions of proceeds of a Liquidation) below, amounts shall be deemed distributable to a Delinquent Revolving Credit Lender (and consequently, to the Administrative Agent to the extent to which the Administrative Agent is then entitled) at the highest level of distribution (if applicable) at which the Delinquent Revolving Credit Lender would otherwise have been entitled to a distribution.

(v) Subject to Subsection 13.3(c)(iv), the Delinquent Revolving Credit Lender shall be entitled to receive any payments from the Borrowers to which the Delinquent Revolving Credit Lender is then entitled, provided however there shall be deducted from such amount and retained by the Administrative Agent any interest to which the Administrative Agent is then entitled on account of Section 13.3(c)(ii), above.

(d) A Delinquent Revolving Credit Lender shall not be relieved of any obligation of such Delinquent Revolving Credit Lender hereunder (all and each of which shall constitute continuing obligations on the part of any Delinquent Revolving Credit Lender).

(e) A Delinquent Revolving Credit Lender may cure its status as a Delinquent Revolving Credit Lender by paying the Administrative Agent the aggregate of the following:

(i) The Administrative Agent's Cover (to the extent not previously repaid by the Borrowers and retained by the Administrative Agent in accordance with Subsection 13.3(c)(iv), above) with respect to that Delinquent Revolving Credit Lender.

Plus

(ii) The aggregate of the amount payable under Subsection 13.3(c)(iii), above (which relates to interest to be paid by that Delinquent Revolving Credit Lender).

Plus

(iii) All such costs and expenses as may be incurred by the Administrative Agent in the enforcement of the Administrative Agent's rights against such Delinquent Revolving Credit Lender.

13.4. ORDINARY COURSE DISTRIBUTIONS. (This Section 13.4 applies unless the provisions of Section 14.6 (which relates to distributions in the event of a Liquidation) becomes operative).

(a) Weekly, on each Thursday (or more frequently at the Administrative Agent's option) the Administrative Agent and each Revolving Credit Lender shall settle up on amounts advanced under the Revolving Credit and payments received on account of the Revolving Credit (including, without limitation, collected funds received in the Administrative Agent's Accounts and not released to the Operating Accounts as provided herein).

(b) The Administrative Agent shall distribute to the SwingLine Lender and to each Revolving Credit Lender, such Person's respective pro-rata share of payments of interest and fees on account of the Revolving Credit when actually received and collected by the

Administrative Agent. For purposes of calculating interest due to a Revolving Credit Lender, that Revolving Credit Lender shall be entitled to receive interest on the actual amount contributed by that Revolving Credit Lender towards the principal balance of the Revolving Credit Loans outstanding during the applicable period covered by the interest payment made by the Borrowers. Any net principal reductions to the Revolving Credit Loans received by the Administrative Agent in accordance with the Loan Documents during such period shall not reduce such actual amount so contributed, for purposes of calculation of interest due to that Revolving Credit Lender, until the Administrative Agent has distributed to that Revolving Credit Lender its pro-rata share thereof.

(c) No Revolving Credit Lender shall have any interest in, or right to receive any part of, the Underwriting Fee, the Structuring Fee or the Collateral Monitoring Fee to be paid by the Borrowers to the Administrative Agent pursuant to this Agreement.

(d) Any amount received by the Administrative Agent as reimbursement for any cost or expense (including without limitation, reasonable attorneys' fees) shall be distributed by the Administrative Agent to that Person which is entitled to such reimbursement as provided in this Agreement (and if such Person(s) is (are) the Revolving Credit Lenders, pro-rata based upon their respective Revolving Credit Commitment Percentages at the date on which the expense, in respect of which such reimbursement is being made, was incurred).

(e) Each distribution pursuant to this Section 13.4 is subject to
Section 13.3(c), above.

ARTICLE 14 - ACCELERATION AND LIQUIDATION:

14.1. ACCELERATION NOTICES.

(a) The Administrative Agent may give the Revolving Credit Lenders an Acceleration Notice at any time following the occurrence of an Event of Default.

(b) The SuperMajority Lenders may give the Administrative Agent an Acceleration Notice at any time following the occurrence of an Event of Default. Such notice may be by multiple counterparts, provided that counterparts executed by the requisite Revolving Credit Lenders are received by the Administrative Agent within a period of five (5) consecutive Business Days.

14.2. ACCELERATION. Unless stayed by judicial or statutory process, the Administrative Agent shall Accelerate the Liabilities on account of the Revolving Credit within a commercially reasonable time following:

(a) The Administrative Agent's giving of an Acceleration Notice to the Revolving Credit Lenders as provided in Section 14.1(a).

(b) The Administrative Agent's receipt of an Acceleration Notice from the SuperMajority Lenders, in compliance with Section 14.1(b).

14.3. INITIATION OF LIQUIDATION. Unless stayed by judicial or statutory process, a Liquidation shall be initiated by the Administrative Agent within a commercially reasonable time following Acceleration of Liabilities on account of the Revolving Credit.

14.4. ACTIONS AT AND FOLLOWING INITIATION OF LIQUIDATION.

(a) At the initiation of a Liquidation:

(i) The unpaid principal balance of the SwingLine Loan (if any) shall be converted, pursuant to Section 13.2(b)(iii), to a Revolving Credit Loan in which all Revolving Credit Lenders participate.

(ii) The Administrative Agent and the Revolving Credit Lenders shall "net out" each Revolving Credit Lender's respective contributions towards the Revolving Credit Loans, so that each Revolving Credit Lender holds that Revolving Credit Lender's Revolving Credit Commitment Percentage of the Revolving Credit Loans and advances.

(b) Following the initiation of a Liquidation, each Revolving Credit Lender shall contribute, towards any L/C and Banker's Acceptance thereafter honored and not immediately reimbursed by the Borrowers, that Revolving Credit Lender's Revolving Credit Commitment Percentage of such honoring.

14.5. COLLATERAL AGENT'S CONDUCT OF LIQUIDATION.

(a) Any Liquidation shall be conducted by the Collateral Agent, subject to the direction of the SuperMajority Lenders.

(b) The Collateral Agent may establish one or more Nominees to "bid in" or otherwise acquire ownership to any Post Foreclosure Asset.

(c) The Collateral Agent shall manage the Nominee and manage and dispose of any Post Foreclosure Assets with a view towards the realization of the economic benefits of the ownership of the Post Foreclosure Assets and in such regard, the Collateral Agent and/or the Nominee may operate, repair, manage, maintain, develop, and dispose of any Post Foreclosure Asset in such manner as the Collateral Agent determine as appropriate under the circumstances.

(d) The Collateral Agent may decline to undertake or to continue taking a course of action or to execute an action plan (whether proposed by the Collateral Agent or any Revolving Credit Lender) unless indemnified to the Collateral Agent's satisfaction by the Revolving Credit Lenders against any and all liability and expense which may be incurred by the Collateral Agent by reason of taking or continuing to take that course of action or action plan.

(e) Each Revolving Credit Lender shall execute all such instruments and documents not inconsistent with the provisions of this Agreement as the Collateral Agent and/or the Nominee reasonably may request with respect to the creation and governance of any Nominee, the conduct of the Liquidation, and the management and disposition of any Post Foreclosure Asset.

14.6. DISTRIBUTION OF LIQUIDATION PROCEEDS.

(a) The Collateral Agent may establish one or more reasonably funded reserve accounts into which proceeds of the conduct of any Liquidation may be deposited in anticipation of future expenses which may be incurred by the Collateral Agent in the exercise of rights as a secured creditor of the Borrowers and prior claims which the Collateral Agent anticipate may need to be paid.

(b) The Collateral Agent shall distribute the net proceeds of Liquidation to the Administrative Agent for application in accordance with the relative priorities set forth in Section 14.7, but subject to the terms of the Intercreditor Agreement.

(c) Each Revolving Credit Lender, on the written request of the Collateral Agent and/or any Nominee, not more frequently than once each month, shall reimburse the Collateral Agent and/or any Nominee, pro-rata, for any cost or expense reasonably incurred by the Collateral Agent and/or the Nominee in the conduct of a Liquidation, which amount is not covered out of current proceeds of the Liquidation, which reimbursement shall be paid over to and distributed by the Collateral Agent.

14.7. RELATIVE PRIORITIES TO PROCEEDS OF LIQUIDATION.

(a) All distributions of proceeds of a Liquidation shall be net of payment over to the Collateral Agent as reimbursement for all reasonable third party costs and expenses incurred by the Collateral Agent and to Lenders' Special Counsel and to any funded reserve established pursuant to Section 14.6(a).

(b) Subject to the terms of the Intercreditor Agreement and the provisions of Section 14.7(c) below, the proceeds of a Liquidation, net of those amounts described in Section 13.3(c)(iv), shall be distributed based on the following priorities:

(i) To the SwingLine Lender, on account of any SwingLine loans not converted to Revolving Credit Loans pursuant to Section 14.4(a)(i); and then

(ii) To the Revolving Credit Lenders (other than any Delinquent Revolving Credit Lender), pro-rata, to the unpaid principal balance of the Revolving Credit; and then

(iii) To the Revolving Credit Lenders (other than any Delinquent Revolving Credit Lender), pro-rata, to accrued interest on the Revolving Credit; and then

(iv) To the Revolving Credit Lenders (other than any Delinquent Revolving Credit Lender), pro-rata, to those fees distributable hereunder to the Revolving Credit Lenders; and then

(v) To the Collateral Agent, an amount equal to 105% of the Stated Amount of all L/Cs and Bankers' Acceptances then outstanding; and then

(vi) To any Delinquent Revolving Credit Lenders, pro-rata to amounts to which such Delinquent Revolving Credit Lenders otherwise would have been entitled pursuant to Sections 14.7(b)(ii), 14.7(b)(iii), 14.7(b)(iv); and then

(vii) To any other Liabilities, including any obligations due on account of Hedge Agreements.

(c) Notwithstanding anything to the contrary herein contained, all proceeds received from the Collateral of a Division shall first be applied to the Revolving Credit Loans, L/Cs, Banker's Acceptances, interest, fees and other Liabilities of such Division before application to any other Liabilities.

ARTICLE 15 - THE AGENT:

15.1. APPOINTMENT OF THE AGENT.

(a) Each Lender appoints and designates NCBC as the "Administrative Agent" hereunder and under the Loan Documents.

(b) Each Lender appoints and designates NCBC as the "Collateral Agent" hereunder and under the Loan Documents.

(c) Each Revolving Credit Lender authorizes the Agent:

(i) To execute those of the Loan Documents and all other instruments relating thereto to which the Agent is a party.

(ii) To take such action on behalf of the Revolving Credit Lenders and to exercise all such powers as are expressly delegated to the Agent hereunder and in the Loan Documents and all related documents, together with such other powers as are reasonably incident thereto.

15.2. RESPONSIBILITIES OF AGENT.

(a) The Agent shall not have any duties or responsibilities to, or any fiduciary relationship with, any Revolving Credit Lender except for those expressly set forth in this Agreement.

(b) Neither the Agent nor any of its Affiliates shall be responsible to any Revolving Credit Lender for any of the following:

(i) Any recitals, statements, representations or warranties made by any Borrower or any other Person.

(ii) Any appraisals or other assessments of the assets of any Borrower or of any other Person responsible for or on account of the Liabilities.

(iii) The value, validity, effectiveness, genuineness, enforceability, or sufficiency of the Loan Agreement, the Loan Documents or any other document referred to or provided for therein.

(iv) Any failure by any Borrower or any other Person (other than the Agent) to perform its respective obligations under the Loan Documents.

(c) The Agent may employ attorneys, accountants, and other professionals and agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such attorneys, accountants, and other professionals or agents or attorneys-in-fact selected by the Agent with reasonable care. No such attorney, accountant, other professional, agents, or attorney-in-fact shall be responsible for any action taken or omitted to be taken by any other such Person.

(d) Neither the Agent, nor any of its directors, officers, or employees shall be responsible for any action taken or omitted to be taken or omitted to be taken by any other of them in connection herewith in reliance upon advice of its counsel nor, in any other event except for any action taken or omitted to be taken as to which a final judicial determination has been or is made (in a proceeding in which such Person has had an opportunity to be heard) that such Person had acted in a grossly negligent manner, in actual bad faith, or in willful misconduct.

(e) The Agent shall not have any responsibility in any event for more funds than the Agent actually receives and collects.

(f) The Agent, in its separate capacity as a Lender, shall have the same rights and powers hereunder as any other Lender.

15.3. CONCERNING DISTRIBUTIONS BY THE AGENT.

(a) The Administrative Agent in its reasonable discretion based upon the Agent's determination of the likelihood that additional payments will be received, expenses incurred, and/or claims made by third parties to all or a portion of such proceeds, may delay the distribution of any payment received on account of the Liabilities.

(b) The Administrative Agent may disburse funds prior to determining that the sums which the Agent expects to receive have been finally and unconditionally paid to the Agent. If and to the extent that the Administrative Agent does disburse funds and it later becomes apparent that the Agent did not then receive a payment in an amount equal to the sum paid out, then any Revolving Credit Lender to whom the Administrative Agent made the funds available, on demand from the Administrative Agent, shall refund to the Administrative Agent the sum paid to that Person.

(c) If, in the opinion of the Agent, the distribution of any amount received by the Agent might involve the Agent in liability, or might be prohibited hereby, or might be questioned by any Person, then the Administrative Agent may refrain from making distribution until the Agent's right to make distribution has been adjudicated by a court of competent jurisdiction.

(d) The proceeds of any Revolving Credit Lender's exercise of any right of, or in the nature of, set-off shall be deemed, First, to the extent that a Revolving Credit Lender is entitled to any distribution hereunder, to constitute such distribution and Second, shall be shared with the other Revolving Credit Lenders as if distributed pursuant to (and shall be deemed as distributions under) Section 14.7.

(e) Each Revolving Credit Lender recognizes that the crediting of the Borrowers with the "proceeds" of any transaction in which a Post Foreclosure Asset is acquired is a non-cash transaction and that, in consequence, no distribution of such "proceeds" will be made by the Administrative Agent to any Revolving Credit Lender.

(f) In the event that (x) a court of competent jurisdiction shall adjudge that any amount received and distributed by the Agent is to be repaid or disgorged or (y) those Lenders adversely affected thereby determine to effect such repayment or disgorgement, then each Revolving Credit Lender to which any such distribution shall have been made shall repay, to the Agent which had made such distribution, that Revolving Credit Lender's pro-rata share of the amount so adjudged or determined to be repaid or disgorged.

15.4. DISPUTE RESOLUTION. Any dispute among the Revolving Credit Lenders and/or the Agent concerning the interpretation, administration, or enforcement of the financing arrangements contemplated by this or any other Loan Document or the interpretation or administration of this or any other Loan Document which cannot be resolved amicably shall be resolved in the United States District Court for the District of Ohio, sitting in Cleveland, Ohio, or in the courts of Cuyahoga County, Ohio, to the jurisdiction of which courts each Revolving Credit Lender hereto hereby submits.

15.5. DISTRIBUTIONS OF NOTICES AND OF DOCUMENTS. The Administrative Agent will forward to each Revolving Credit Lender, promptly after the Administrative Agent's receipt thereof, a copy of each notice or other document furnished to the Administrative Agent pursuant to this Agreement, including monthly, quarterly, and annual financial statements received from the Lead Borrower pursuant to Article 6 of this Agreement, other than any of the following:

(a) Routine communications associated with requests for Revolving Credit Loans and/or the issuance of L/Cs and Banker's Acceptances.

(b) Routine or nonmaterial communications.

(c) Any notice or document required by any of the Loan Documents to be furnished directly to the Revolving Credit Lenders by the Lead Borrower.

(d) Any notice or document of which the Administrative Agent has knowledge that such notice or document had been forwarded to the Revolving Credit Lenders other than by the Administrative Agent.

15.6. CONFIDENTIAL INFORMATION.

(a) Each Revolving Credit Lender will maintain, as confidential in accordance with the provisions of Section 20.3 hereof, all of the following:

(i) Proprietary approaches, techniques, and methods of analysis which are applied by the Agent in the administration of the credit facility contemplated by this Agreement.

(ii) Proprietary forms and formats utilized by the Agent in providing reports to the Revolving Credit Lenders pursuant hereto, which forms or formats are not of general currency.

(b) Nothing included herein shall prohibit the disclosure of any such information as may be required to be provided by judicial process or by regulatory authorities having jurisdiction over any party to this Agreement.

15.7. RELIANCE BY AGENT. The Agent shall be entitled to rely upon any certificate, notice or other document (including any cable, telegram, telex, or facsimile) reasonably believed by the Agent to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of attorneys, accountants and other experts selected by the Agent. As to any matters not expressly provided for in this Agreement, any Loan Document, or in any other document referred to therein, the Agent shall in all events be fully protected in acting, or in refraining from acting, in accordance with the applicable Consent required by this Agreement. Instructions given with the requisite Consent shall be binding on all Revolving Credit Lenders.

15.8. NON-RELIANCE ON AGENT AND OTHER REVOLVING CREDIT LENDERS.

(a) Each Revolving Credit Lender represents to all other Revolving Credit Lenders and to the Agent that such Revolving Credit Lender:

(i) Independently and without reliance on any representation or act by the Agent or by any other Revolving Credit Lender, and based on such documents and information as that Revolving Credit Lender has deemed appropriate, has made such Revolving Credit Lender's own appraisal of the financial condition and affairs of the Borrowers and decision to enter into this Agreement.

(ii) Has relied upon that Revolving Credit Lender's review of the Loan Documents by that Revolving Credit Lender and by counsel to that Revolving Credit Lender as that Revolving Credit Lender deemed appropriate under the circumstances.

(b) Each Revolving Credit Lender agrees that such Revolving Credit Lender, independently and without reliance upon the Agent or any other Revolving Credit Lender, and based upon such documents and information as such Revolving Credit Lender shall deem appropriate at the time, will continue to make such Revolving Credit Lender's own appraisals of the financial condition and affairs of the Borrowers when determining whether to take or not to take any discretionary action under this Agreement.

(c) The Agent, in the discharge of the Agent's duties hereunder, shall not be required to make inquiry of, or to inspect the properties or books of, any Person.

(d) Except for notices, reports, and other documents and information expressly required to be furnished to the Revolving Credit Lenders by the Administrative Agent hereunder (as to which, see Section 15.5), the Agent shall have no affirmative duty or responsibility to provide any Lender with any credit or other information concerning any Person, which information may come into the possession of the Agent or any Affiliate of the Agent.

(e) Each Revolving Credit Lender, at such Revolving Credit Lender's request, shall have reasonable access to all nonprivileged documents in the possession of the Agent, which documents relate to the Agent's performance of its respective duties hereunder.

15.9. INDEMNIFICATION. Without limiting the liabilities of the Borrowers under this Agreement or any of the other Loan Documents, each Revolving Credit Lender shall indemnify the Agent, pro-rata, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including attorneys' reasonable fees and expenses and other out-of-pocket expenditures) which may at any time be imposed on, incurred by, or asserted against the Agent and in any way relating to or arising out of this Agreement or any other Loan Document or any documents contemplated by or referred to therein or the transactions contemplated thereby or the enforcement of any of terms hereof or thereof or of any such other documents, provided, however, no Revolving Credit Lender shall be liable for any of the foregoing to the extent that any of the foregoing arises from any action taken or omitted to be taken by the Agent as to which a final judicial determination has been or is made (in a proceeding in which the Agent has had an opportunity to be heard) that the Agent had acted in a grossly negligent manner, in actual bad faith, or in willful misconduct.

15.10. RESIGNATION OF AGENT.

(a) The Agent may resign at any time by giving 30 days prior written notice thereof to the Revolving Credit Lenders. Upon receipt of any such notice of resignation, the SuperMajority Lenders shall have the right to appoint a successor to the Agent (and if no Event of Default has occurred and is continuing, with the consent of the Lead Borrower, not to be unreasonably withheld and, in any event, deemed given by the Lead Borrower if no written objection is provided by the Lead Borrower to the (resigning) Agent within ten
(10) Business Days notice of such proposed appointment). If a successor Agent shall not have been so appointed and accepted such appointment within 30 days after the giving of notice by the resigning Agent, then the resigning Agent may appoint a successor Agent, which shall be a financial institution having a combined capital and surplus in excess of $500,000,000. The consent of the Lead Borrower otherwise required by this Section 15.10(a) shall not be required if an Event of Default has occurred and is continuing.

(b) Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor shall thereupon succeed to, and become vested with, all the rights, powers, privileges, and duties of the (resigning) Agent so replaced, and the (resigning) Agent shall be discharged from the (resigning) Agent's duties and obligations hereunder, other than on account of any responsibility for any action taken or omitted to be taken by the (resigning) Agent as to which a final judicial determination has been or is made (in a proceeding in which the (resigning) Person has had an opportunity to be heard) that such Person had acted in a grossly negligent manner or in bad faith, or in willful misconduct.

(c) After any retiring Agent's resignation, the provisions of this Agreement and of all other Loan Documents shall continue in effect for the retiring Person's benefit in respect of any actions taken or omitted to be taken by it while it was acting as Agent.

15.11. LEAD ARRANGER, CO-SYNDICATION AGENTS AND CO-DOCUMENTATION AGENTS.

Notwithstanding the provisions of this Agreement or any of the other Loan Documents, none of the Lead Arranger, the Co-Syndication Agents or the Co-Documentation Agents shall have any powers, rights, duties, responsibilities or liabilities with respect to this Agreement and the other Loan Documents other than confidentiality provisions contained herein.

ARTICLE 16 - ACTION BY AGENT - CONSENTS - AMENDMENTS - WAIVERS:

16.1. ADMINISTRATION OF CREDIT FACILITIES.

(a) Except as otherwise specifically provided in this Agreement, the Agent may take any action with respect to the credit facility contemplated by the Loan Documents as the Agent determines to be appropriate, provided, however, the Agent is under no affirmative obligation to take any action which it is not required by this Agreement or the Loan Documents specifically to so take.

(b) Except as specifically provided in the following Sections of this Agreement, whenever a Loan Document or this Agreement provides that action may be taken or omitted to be taken in the Agent's reasonable, good faith discretion, the Agent shall have the sole right to take, or refrain from taking, such action without, and notwithstanding, any vote of the Revolving Credit Lenders:

Actions Described in Section Required        Type of Consent
-------------------------------------        ---------------
16.2                                         Majority Lenders
16.3                                         SuperMajority Lenders
16.4                                         Certain Consent
16.5                                         Unanimous Consent
16.6                                         Consent of SwingLine Lender
16.7                                         Consent of the Agent

(c) The rights granted to the Revolving Credit Lenders in those sections referenced in Section 16.1(b) shall not otherwise limit or impair the Agent's exercise of its reasonable, good faith discretion under the Loan Documents.

16.2. ACTIONS REQUIRING OR ON DIRECTION OF MAJORITY LENDERS.

Except as otherwise provided in this Agreement, the Consent or direction of the Majority Lenders is required for any amendment, waiver, or modification of any Loan Document.

16.3. ACTIONS REQUIRING OR ON DIRECTION OF SUPERMAJORITY LENDERS.

The Consent or direction of the SuperMajority Lenders is required as follows:

(a) The SuperMajority Lenders may direct the Administrative Agent to permit Protective OverAdvances to be outstanding for more than 45 consecutive Business Days or more than twice in any twelve month period (the Revolving Credit Lenders recognizing that, except as described in this Section , any loan or advance under the Revolving Credit which results in a Protective OverAdvance may be made by the Administrative Agent in its reasonable, good faith discretion without the Consent of the Revolving Credit Lenders, whether or not a Default exists, and that each Revolving Credit Lender shall be bound thereby).

(b) The SuperMajority Lenders may direct the Administrative Agent to suspend the Revolving Credit, if any Default is then occurring, following which direction, and for as long as a Default is then occurring, the only Revolving Credit Loans which may be made are the following:

(i) Protective OverAdvances not otherwise prohibited as provided in.

(ii) Revolving Credit Loans made to "cover" the honoring of L/C's and Banker's Acceptances.

(iii) Revolving Credit Loans made with Consent of the SuperMajority Lenders.

(c) The SuperMajority Lenders may undertake the following if an Event of Default has occurred and is continuing:

(i) Give the Administrative Agent an Acceleration Notice in accordance with Section 14.1(b).

(ii) Direct the Administrative Agent to increase the rate of interest to the default rate of interest as provided in, and to the extent permitted by, this Agreement.

16.4. ACTION REQUIRING CERTAIN CONSENT. The Consent or direction of the following is required for the following actions:

(a) Any forgiveness of all or any portion of any payment Liability:
All Revolving Credit Lenders whose payment Liability is being so forgiven:
(other than any Delinquent Revolving Credit Lender).

(b) Any decrease in any interest rate or fee payable under any of the Loan Documents (other than any fee payable to the Administrative Agent (for which the consent of the Administrative Agent shall be required): All Revolving Credit Lenders adversely affected thereby (other than any Delinquent Revolving Credit Lender).

(c) Any postponement of the scheduled time for payment of any amount payable under any of the Loan Documents: All Revolving Credit Lenders adversely affected thereby (other than any Delinquent Revolving Credit Lender).

(d) Volitional Disgorgement as described in 15.3(f): Each Revolving Credit Lender (other than any Delinquent Revolving Credit Lender) which is adversely affected thereby.

(e) Increase in the SwingLine Ceiling: The consent of the SwingLine Lender and the Majority Lenders.

16.5. ACTIONS REQUIRING OR DIRECTED BY UNANIMOUS CONSENT. None of the following may take place except with Unanimous Consent:

(a) Any release of a material portion of the Collateral, but such Consent to such release is not required if any of the following conditions is satisfied:

(i) Such release is otherwise required or provided for in the Loan Documents.

(ii) Such release is being made to facilitate a Liquidation.

(iii) No OverLoan exists immediately after giving effect to the application to the Loan Account of the net proceeds received on account of the transaction in which such release is made (but such release shall require the consent of the Majority Lenders).

(b) Any amendment of the Definitions of "Borrowing Base", "Filene's Borrowing Base", "VC Borrowing Base", "Excess Availability Reserve", "Availability", "Filene's Availability" or "VC Availability" or of any Definition of any component thereof, such that more credit would be available to a Borrower, based on the same assets, as would have been available to such Borrower immediately prior to such amendment , it being understood, however, that:

(i) The foregoing shall not limit the adjustment by the Collateral Agent of any Reserve (other than the Excess Availability Reserve) or the Inventory Advance Rate in the Collateral Agent's administration of the Revolving Credit as otherwise permitted by this Agreement.

(ii) The foregoing shall not prevent the Administrative Agent, in its administration of the Revolving Credit, from restoring any component of the Borrowing Base, Filene's Borrowing Base, or VC Borrowing Base which had been lowered by the Administrative Agent back to the value of such component, as stated in this Agreement or to an intermediate value.

(c) Any waiver, amendment, or modification which has the effect of increasing any Revolving Credit Dollar Commitment, Revolving Credit Commitment Percentage, or the Revolving Credit Ceiling, except that no Consent shall be required for any such increase which is the result of the application of the following Sections of this Agreement:

(i) Section 16.10 (which relates to NonConsenting Revolving Credit Lenders).

(ii) Section 17.1 (which relates to assignments and assumptions).

(d) Any release of any Person obligated on account of the Liabilities.

(e) The making of any Revolving Credit Loan which, when made, exceeds Availability and is not a Protective OverAdvance, subject, however, to the following:

(i) No Consent is required in connection with the making of any Revolving Credit Loan to "cover" any honoring of a drawing under any L/C or any Banker's Acceptance.

(ii) Each Lender recognizes that subsequent to the making of a Revolving Credit Loan which does not constitute a Protective OverAdvance, the unpaid principal balance of the Loan Account may exceed Borrowing Base on account of changed circumstances beyond the control of the Agent (such as a drop in collateral value).

(f) Any amendment which has the effect of modifying the Administrative Agent's right or ability to make Protective OverAdvances.

(g) The waiver of the obligation of the Borrowers to reduce the unpaid principal balance of loans under the Revolving Credit to an amount so that no OverLoan (other than a Protective OverAdvance) is outstanding.

(h) Any amendment of this Article 16.

(i) Any subordination of the Liabilities to any material obligation of any Borrower, unless such subordination is otherwise required pursuant to this or is permitted by this Agreement.

(j) Amendment of any of the following Definitions:

"Majority Lender" "Maturity Date"
"Protective OverAdvance" "SuperMajority Lenders "Unanimous Consent"

16.6. ACTIONS REQUIRING SWINGLINE LENDER CONSENT. No action, amendment, or waiver of compliance with, any provision of the Loan Documents or of this Agreement which affects the SwingLine Lender may be undertaken without the Consent of the SwingLine Lender.

16.7. ACTIONS REQUIRING AGENT'S CONSENT.

No action referenced herein which modifies the rights, duties, and obligations of the Agent shall be effective without the written consent of the Agent.

16.8. MISCELLANEOUS ACTIONS.

(a) Notwithstanding any other provision of this Agreement, no single Revolving Credit Lender independently may exercise any right of action or enforcement against or with respect to any Borrower.

(b) The Agent shall be fully justified in failing or refusing to take action under this Agreement or any Loan Document on behalf of any Revolving Credit Lender unless the Agent shall first

(i) receive such clear, unambiguous, written instructions as the Agent deem appropriate; and

(ii) be indemnified to the Agent's satisfaction by the Revolving Credit Lenders against any and all liability and expense which may be incurred by the Agent by reason of taking or continuing to take any such action, unless such action had been grossly negligent, in willful misconduct, or in bad faith.

(c) The Agent may establish reasonable procedures for the providing of direction and instructions from the Revolving Credit Lenders to the Agent, including its reliance on multiple counterparts, facsimile transmissions, and time limits within which such direction and instructions must be received in order to be included in a determination of whether the requisite Lenders have provided their direction, Consent, or instructions.

16.9. ACTIONS REQUIRING LEAD BORROWER'S CONSENT.

(a) The Lead Borrower's consent is required for any amendment of this Agreement, except that each of the following Articles of this Agreement may be amended without the consent of the Lead Borrower:

Article     Title of Article
-------     ----------------
13          Revolving Credit Fundings and Distributions

14          Acceleration and Liquidation (other than any
            modifications to the requisite percentage of Revolving
            Credit Lenders which may furnish an Acceleration Notice
            under Section 14.1(b))

15.1        The Agent (provided that the provisions of Section
            15.10(a) relating to the Lead Borrower's consent to a
            successor Agent in certain circumstances may not be
            amended without the Lead Borrower's consent).

16          Action By Agent - Consents - Amendments - Waivers
            (other than as provided in Section 16.9(b))

17          Assignments and Participations (provided that the
            provisions of Section 17.1(a)(i) relating to the Lead
            Borrower's consent to an assignment in certain
            circumstances may not be amended without the Lead
            Borrower's consent).

(b) Subject to Section 16.9(c), the following Sections of Article 16 may not be amended without the consent of the Lead Borrower:

Actions Described in Section        Type of Consent Required
----------------------------        ------------------------
16.3                                SuperMajority Lenders
16.5                                Unanimous Consent
16.9                                Actions Requiring Lead Borrower's Consent

and further provided that no provision of any Article listed in Section 16.9(a) that (i) obligates the Agent to exercise reasonable, good faith discretion, or
(ii) imposes liability on any Person for acting in a grossly negligent manner, in actual bad faith or willful misconduct, or (iii) imposes any confidentiality obligation under this Agreement on any Person, may be amended without the consent of the Lead Borrower.

(c) The Lead Borrower's consent to the amendment of those provisions referenced in Section 16.9(b)

(i) Shall be deemed given unless written objection is made, within seven (7) Business Days following the Administrative Agent's giving notice to the Lead Borrower of the proposed amendment; and

(ii) shall not be required following the occurrence of any Event of Default.

16.10. NONCONSENTING REVOLVING CREDIT LENDER.

(a) In the event that a Revolving Credit Lender (in this Section 16.10, a "NONCONSENTING REVOLVING CREDIT LENDER") does not provide its Consent to a proposal by the Agent to take action which requires consent under this Article 16, then one or more Revolving Credit Lenders who provided Consent to such action may require the assignment, without recourse and in accordance with the procedures outlined in Section 17.1, below, of the NonConsenting Revolving Credit Lender's Loan Commitment hereunder on fifteen (15) days written notice to the Administrative Agent and to the NonConsenting Revolving Credit Lender.

(b) At the end of such fifteen (15) days, and provided that the NonConsenting Revolving Credit Lender delivers the Revolving Credit Note held by the NonConsenting Revolving Credit Lender to the Administrative Agent (or a lost note affidavit and indemnity reasonably acceptable to the Administrative Agent), the Revolving Credit Lenders who have given such written notice shall Transfer the following to the NonConsenting Revolving Credit Lender:

(i) Such NonConsenting Revolving Credit Lender's pro-rata share of the principal and interest of the Revolving Credit Loans to the date of such assignment.

(ii) All fees distributable hereunder to the NonConsenting Revolving Credit Lender to the date of such assignment.

(iii) Any out-of-pocket costs and expenses for which the NonConsenting Revolving Credit Lender is entitled to reimbursement from the Borrowers.

(c) In the event that the NonConsenting Revolving Credit Lender fails to deliver to the Administrative Agent the Revolving Credit Note held by the NonConsenting

Revolving Credit Lender (or a lost note affidavit and indemnity) as provided in Section 16.10(b), then:

(i) The amount otherwise to be Transferred to the NonConsenting Revolving Credit Lender shall be Transferred to the Administrative Agent and held by the Administrative Agent, without interest, to be turned over to the NonConsenting Revolving Credit Lender upon delivery of the Revolving Credit Note held by that NonConsenting Revolving Credit Lender (or a lost note affidavit and indemnity).

(ii) The Revolving Credit Note held by the NonConsenting Revolving Credit Lender shall have no force or effect whatsoever.

(iii) The NonConsenting Revolving Credit Lender shall cease to be a "Revolving Credit Lender".

(iv) The Revolving Credit Lender(s) which have Transferred the amount to the Administrative Agent as described above shall have succeeded to all rights and become subject to all of the obligations of the NonConsenting Revolving Credit Lender as "Revolving Credit Lender".

(d) In the event that more than one (1) Revolving Credit Lender wishes to require such assignment, the NonConsenting Revolving Credit Lender's Loan Commitment hereunder shall be divided among such Revolving Credit Lenders, pro-rata based upon their respective Revolving Credit Commitment Percentages, with the Administrative Agent coordinating such transaction.

(e) The Administrative Agent shall coordinate the retirement of the Revolving Credit Note held by the NonConsenting Revolving Credit Lender and the issuance of Revolving Credit Notes to those Revolving Credit Lenders which "take-out" such NonConsenting Revolving Credit Lender, provided, however, no processing fee otherwise to be paid as provided in Section 17.2(b) shall be due under such circumstances.

ARTICLE 17 - ASSIGNMENTS BY REVOLVING CREDIT LENDERS:

17.1. ASSIGNMENTS AND ASSUMPTIONS.

(a) Except as provided herein, each Revolving Credit Lender (in this
Section 17.1(a), an "ASSIGNING REVOLVING CREDIT LENDER") may assign to one or more Eligible Assignees (in this Section 17.1(a), each an "ASSIGNEE REVOLVING CREDIT LENDER") all or a portion of that Revolving Credit Lender's interests, rights and obligations under this Agreement and the Loan Documents (including all or a portion of its Revolving Credit Dollar Commitment) and the same portion of the Revolving Credit Loans at the time owing to it, and of the Revolving Credit Note held by the Assigning Revolving Credit Lender, provided that:

(i) The Administrative Agent and, subject to the provisions of
Section 2.22(d) hereof, the Lead Borrower, shall have given its prior written consent to such assignment, which consent shall not be unreasonably withheld, but need not be given if the proposed assignment would result in any resulting Revolving Credit Lender's having

a Revolving Credit Dollar Commitment of less than the "minimum hold" amount specified in Section 17.1(a)(iii).

(ii) Each such assignment shall be of a constant, and not a varying, percentage of all the Assigning Revolving Credit Lender's rights and obligations under this Agreement.

(iii) Following the effectiveness of such assignment, the Assigning Revolving Credit Lender's Revolving Credit Dollar Commitment (if not an assignment of all of the Assigning Revolving Credit Lender's Loan Commitment) shall not be less than $5,000,000.00.

17.2. ASSIGNMENT PROCEDURES. (This Section 17.2 describes the procedures to be followed in connection with an assignment effected pursuant to this Article 17 and permitted by Section 17.1).

(a) The parties to such an assignment shall execute and deliver to the Administrative Agent, for recording in the Register, an Assignment and Acceptance substantially in the form of EXHIBIT 17.2, annexed hereto (each, an "ASSIGNMENT AND ACCEPTANCE").

(b) The Assigning Revolving Credit Lender shall deliver to the Administrative Agent, with such Assignment and Acceptance, the Revolving Credit Note held by the subject Assigning Revolving Credit Lender and the Administrative Agent's processing fee of $3,500.00.

(c) The Administrative Agent shall maintain a copy of each Assignment and Acceptance delivered to it and a register or similar list (the "REGISTER") for the recordation of the names and addresses of the Revolving Credit Lenders and of the Revolving Credit Dollar Commitment and Revolving Credit Commitment Percentage of each Revolving Credit Lender. The Register shall be available for inspection by the Revolving Credit Lenders at any reasonable time and from time to time upon reasonable prior notice. In the absence of manifest error, the entries in the Register shall be conclusive and binding on all Revolving Credit Lenders. The Administrative Agent and the Revolving Credit Lenders may treat each Person whose name is recorded in the Register as a "Revolving Credit Lender" hereunder for all purposes of this Agreement.

(d) The Assigning Revolving Credit Lender and Assignee Revolving Credit Lender, directly between themselves, shall make all appropriate adjustments in payments for periods prior to the effective date of an Assignment and Assumption.

17.3. EFFECT OF ASSIGNMENT.

(a) From and after the effective date specified in an Assignment and Acceptance which has been executed, delivered, and recorded (which effective date the Administrative Agent may delay by up to five (5) Business Days after the delivery of such Assignment and Acceptance):

(i) The Assignee Revolving Credit Lender:

(A) Shall be a party to this Agreement and the Loan Documents (and to any amendments thereof) as fully as if the Assignee Revolving Credit Lender had executed each..

(B) Shall have the rights of a Revolving Credit Lender hereunder to the extent of the Revolving Credit Dollar Commitment and Revolving Credit Commitment Percentage assigned by such Assignment and Acceptance.

(ii) The Assigning Revolving Credit Lender shall be released from the Assigning Revolving Credit Lender's obligations under this Agreement and the Loan Documents to the extent of the Loan Commitment assigned by such Assignment and Acceptance.

(iii) The Administrative Agent shall undertake to obtain and distribute replacement Revolving Credit Notes to the subject Assigning Revolving Credit Lender and Assignee Revolving Credit Lender.

(b) By executing and delivering an Assignment and Acceptance, the parties thereto confirm to and agree with each other and with all parties to this Agreement as to those matters which are set forth in the subject Assignment and Acceptance.

ARTICLE 18 - NOTICES:

18.1. NOTICE ADDRESSES. All notices, demands, and other communications made in respect of any Loan Document (other than a request for a loan or advance or other financial accommodation under the Revolving Credit) shall be made to the following addresses, each of which may be changed upon seven (7) days written notice to all others given by certified mail, return receipt requested:

If to the Administrative Agent:

National City Business Credit, Inc.
1965 E. Sixth Street
Cleveland, Ohio 44114

Attention : Joseph Kwasny Fax : (216) 222-9555

With a copy to:

Riemer & Braunstein LLP Three Center Plaza
Boston, Massachusetts 02108 Attention : David S. Berman, Esquire Fax : (617) 880-3456

If to the Lead Borrower
And All Borrowers:

Value City Department Stores LLC 3241 Westerville Road
Columbus, Ohio 43224
Attention : James. A. McGrady Fax : (614) 473-2721

With a copy to:

Schottenstein Stores Corporation 1800 Moler Road
Columbus, Ohio 43207
Attention : Irwin A. Bain, Esquire Fax : (614) 443-0972

With a copy to:

Vorys, Sater, Seymour and Pease LLP 52 East Gay Street
Columbus, Ohio 43215
Attention :John B. Weimer, Esquire Fax : (614) 719-5086

18.2. NOTICE GIVEN.

(a) Except as otherwise specifically provided herein, notices shall be deemed made and correspondence received, as follows (all times being local to the place of delivery or receipt):

(i) By certified mail, return receipt requested: the date when actually received.

(ii) By recognized overnight express delivery: the Business Day following the day when sent.

(iii) By Hand: If delivered on a Business Day after 9:00 AM and no later than three (3) hours prior to the close of customary business hours of the recipient, when delivered. Otherwise, at the opening of the then next Business Day.

(iv) By Facsimile transmission (which must include a header on which the party sending such transmission is indicated): If sent on a Business Day after 9:00 AM and no later than three (3) hours prior to the close of customary business hours of the recipient, one (1) hour after being sent. Otherwise, at the opening of the then next Business Day.

18.3. WIRE INSTRUCTIONS. NOTICE GIVEN. Subject to change in the same manner that a notice address may be changed (as to which, see Section 18.1), wire transfers to the Administrative Agent shall be made in accordance with the following wire instructions:

Account Name      : National City Business Credit, Inc.
Account Number    : 3790116
Reference         : Value City

ARTICLE 19 - TERM:

19.1. TERMINATION OF REVOLVING CREDIT. The Revolving Credit shall remain in effect (subject to suspension as provided in Section 2.6 hereof) until the Termination Date.

19.2. ACTIONS ON TERMINATION.

(a) On the Termination Date, the Borrowers shall pay the Administrative Agent (whether or not then due), in immediately available funds, all Liabilities including, without limitation: the following:

(i) The entire balance of the Loan Account (including the unpaid principal balance of the Revolving Credit Loans, and the SwingLine Loan ).

(ii) Any then remaining installments of the Collateral Monitoring Fee.

(iii) Any payments due on account of the indemnification obligations included in Section 2.11(f).

(iv) Any accrued and unpaid Unused Line Fee.

(v) All unreimbursed costs and expenses of the Agent and of Lenders' Special Counsel for which each Borrower is responsible.

(vi) All other Liabilities.

(b) On the Termination Date, the Borrowers shall also shall make such arrangements concerning any L/Cs and Banker's Acceptances then outstanding as are reasonably satisfactory to the Administrative Agent.

(c) Until such payment (Section 19.2(a)) and arrangements concerning L/Cs and Banker's Acceptances (Section 19.2(b)), all provisions of this Agreement, other than those included in Article 2 which place any obligation on the Administrative Agent or any Revolving Credit Lender to make any loans or advances or to provide any financial accommodations to any Borrower shall remain in full force and effect until all Liabilities shall have been paid in full.

(d) On the Termination Date, and upon satisfaction by the Loan Parties of the terms of Section 19.2(a) and (b), above, the Collateral Agent shall release the Collateral Interests granted the Collateral Agent by the Borrowers hereunder, which may be upon such conditions and indemnifications as the Collateral Agent may reasonably require.

ARTICLE 20 - GENERAL:

20.1. PROTECTION OF COLLATERAL. The Agent has no duty as to the collection or protection of the Collateral beyond the safe custody of such of the Collateral as may come into the possession of the Agent.

20.2. PUBLICITY. Subject to the prior approval of the Lead Borrower (which approval shall not be unreasonably withheld or delayed), the Administrative Agent may issue a "tombstone" notice of the establishment of the credit facility contemplated by this Agreement and may make reference to each Borrower (and may utilize any logo or other distinctive symbol associated with each Borrower) in connection with any advertising, promotion, or marketing (including reference in any "case study" of the creditor facility contemplated hereby) undertaken by the Administrative Agent.

20.3. CONFIDENTIALITY. Each of the Agent, the Issuer, the Lead Arranger, the Revolving Credit Lenders, the SwingLine Lender, and any Person subject to this Section 20.3 by the terms of this Agreement (or behalf of itself, and each of its directors, officers, and employees) agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement and any actual or prospective counterparty or advisors to any swap or derivative transactions relating to the Loan Parties and the Liabilities (subject to an agreement executed for the benefit of the Lead Borrower which contains provisions substantially the same as those of this Section 20.3, (g) with the consent of the Loan Parties or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes legally available to the Agent, the Issuer, the Lead Arranger or any Revolving Credit Lender on a nonconfidential basis from a source other than the Loan Parties. For the purposes of this Section, the term "Information" means all information received from the Loan Parties relating to their business, other than any such information that is available to the Agent, the Issuer, the Lead Arranger or any Revolving Credit Lender on a nonconfidential basis prior to disclosure by the Loan Parties, provided that, in the case of information received from the Loan Parties after the date hereof, such information is identified at the time of delivery as confidential or of the type of information, such as business plans or financial information as is customarily confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information that is of a similar nature. The confidentiality provisions contained in this Agreement shall survive the termination, assignment or invalidation of this Agreement, or of any of the rights and obligations contained herein or therein.

20.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the Borrowers and their respective representatives, successors, and assigns and shall enure to the benefit of the Agent and each Revolving Credit Lender and their respective successors and assigns, provided, however, no trustee or other fiduciary appointed with respect to any Borrower shall have any rights hereunder. In the event that the Agent or any Revolving Credit Lender assigns or transfers its rights under this Agreement, the assignee shall thereupon succeed to and become vested with all rights, powers, privileges, and duties of such assignor hereunder and such assignor shall thereupon be discharged and relieved from its duties and obligations hereunder.

20.5. SEVERABILITY. Any determination that any provision of this Agreement or any application thereof is invalid, illegal, or unenforceable in any respect in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality, or enforceability of any other provision of this Agreement.

20.6. AMENDMENTS. COURSE OF DEALING.

(a) This Agreement and the other Loan Documents incorporate all discussions and negotiations between each Borrower and the Agent and each Revolving Credit Lender, either express or implied, concerning the matters included herein and in such other instruments, any custom, usage, or course of dealings to the contrary notwithstanding. No such discussions, negotiations, custom, usage, or course of dealings shall limit, modify, or otherwise affect the provisions hereof or thereof. No failure by the Agent or any Revolving Credit Lender to give notice to the Lead Borrower of any Borrower's having failed to observe and comply with any warranty or covenant included in any Loan Document shall constitute a waiver of such warranty or covenant or the amendment of the subject Loan Document. No change made by the Agent to the manner by which Borrowing Base is determined shall obligate the Agent to continue to determine Borrowing Base in that manner.

(b) Each Borrower may undertake any action otherwise prohibited hereby, and may omit to take any action otherwise required hereby, upon and with the express prior written consent of the Administrative Agent. Subject to Article 16, no consent, modification, amendment, or waiver of any provision of any Loan Document shall be effective unless executed in writing by or on behalf of the party to be charged with such modification, amendment, or waiver (and if such party is the Administrative Agent then by a duly authorized officer thereof). Any modification, amendment, or waiver provided by the Administrative Agent shall be in reliance upon all representations and warranties theretofore made to the Administrative Agent by or on behalf of the Borrowers (and any guarantor, endorser, or surety of the Liabilities) and consequently may be rescinded in the event that any of such representations or warranties was not true and complete in all material respects when given.

20.7. POWER OF ATTORNEY. In connection with all powers of attorney included in this Agreement (which may be exercised only after the occurrence and during the continuance of an Event of Default), each Borrower hereby grants unto the Administrative Agent (acting through any of its officers) full power to do any and all things necessary or appropriate in connection with the exercise of such powers as fully and effectually as that Borrower might or could do, hereby ratifying all that said attorney shall do or cause to be done by virtue of this Agreement. No power of attorney set forth in this Agreement shall be affected by any disability or incapacity suffered by any Borrower and each shall survive the same. All powers conferred upon the Agent

by this Agreement, being coupled with an interest, shall be irrevocable until this Agreement is terminated by a written instrument executed by a duly authorized officer of the Agent. The Administrative Agent, as agent for the Borrowers under any power of attorney included in this Agreement and the other Loan Documents, is not a fiduciary for any Borrower, but instead, in exercising any one or more rights with respect to such powers of attorney, may do so for the sole and exclusive benefit of the Revolving Credit Lenders, and not for the benefit of any Borrower. The Borrowers acknowledge and agree that the provisions of Title 20, Pennsylvania Consolidated Statutes Section 5601 et seq., as amended (including, without limitation, Act 39 of 1999) shall not be applicable to any one or more powers of attorney contained in any Loan Document previously, concurrently or in the future executed and delivered by the Borrowers.

20.8. APPLICATION OF PROCEEDS. The proceeds of any collection, sale, or disposition of the Collateral, or of any other payments received hereunder, shall be applied towards the Liabilities in such order and manner as the Administrative Agent determines in its sole reasonable, good faith discretion, consistent, however, with Sections 14.6 and 14.7 and any other applicable provisions of this Agreement. The Borrowers shall remain liable for any deficiency remaining following such application.

20.9. INCREASED COSTS. If, after the date hereof, as a result of any change in any Requirement of Law, or change of the interpretation or application thereof by any court or by any governmental or other authority or entity charged with the administration thereof, whether or not having the force of law, which:

(a) subjects any Revolving Credit Lender to any taxes or changes the basis of taxation, or increases any existing taxes, on payments of principal, interest or other amounts payable by any Borrower to the Agent or any Revolving Credit Lender under this Agreement (except for taxes on the Agent or any Revolving Credit Lender based on net income or capital imposed by the jurisdiction in which the principal or lending offices of the Agent or that Revolving Credit Lender are located);

(b) imposes, modifies or deems applicable any reserve, cash margin, special deposit or similar requirements against assets held by, or deposits in or for the account of or loans by or any other acquisition of funds by the relevant funding office of any Revolving Credit Lender;

(c) imposes on any Revolving Credit Lender any other condition with respect to any Loan Document; or

(d) imposes on any Revolving Credit Lender a requirement to maintain or allocate capital in relation to the Liabilities;

and the result of any of the foregoing, in such Revolving Credit Lender's reasonable opinion, is to increase the cost to that Revolving Credit Lender of making or maintaining any loan, advance or financial accommodation or to reduce the income receivable by that Revolving Credit Lender in respect of any loan, advance or financial accommodation by an amount which that Revolving Credit Lender deems to be material, then upon written notice from the Administrative Agent, from time to time, to the Lead Borrower (such notice to set out in reasonable detail the facts giving rise to and a summary calculation of such increased cost or reduced income), the

Borrowers shall forthwith pay to the Administrative Agent, for the benefit of the subject Revolving Credit Lender, upon receipt of such notice, that amount which shall compensate the subject Revolving Credit Lender for such additional cost or reduction in income.

20.10. REPLACEMENT OF REVOLVING CREDIT LENDER. If (a) any Revolving Credit Lender incurs increased costs and requests compensation under Section 2.18(d) or
Section 20.9, (b) any Revolving Credit Lender is a Delinquent Revolving Credit Lender, then the Lead Borrower may

(a) request such Revolving Credit Lender or Issuer to use reasonable efforts to designate a different lending office for funding or booking its loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches, or Affiliates, if in the judgment of such Revolving Credit Lender or Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.18(d) or Section 20.9 hereof, and (ii) would not subject such Revolving Credit Lender or Issuer to any unreimbursed cost or expense, and would not otherwise be disadvantageous to such Revolving Credit Lender or Issuer. The Lead Borrower shall pay all reasonable costs and expenses incurred by such Revolving Credit Lender or Issuer in connection with any such designation of assignment; and

(b) at its sole expense and effort, upon notice to such Revolving Credit Lender and the Administrative Agent, require such Revolving Credit Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Article 17), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Revolving Credit Lender, if a Revolving Credit Lender accepts such assignment), provided that (i) if such assignee is not an existing Revolving Credit Lender, the Lead Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Revolving Credit Lender shall have received payment of an amount equal to the outstanding principal of its Revolving Credit Loans and participations in unreimbursed drawings under L/Cs and Banker's Acceptances and SwingLine Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Lead Borrower (in the case of all other amounts) and (iii) such assignment will result in a reduction in such compensation, payments or costs. A Revolving Credit Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Revolving Credit Lender or otherwise, the circumstances entitling the Lead Borrower to require such assignment and delegation cease to apply.

20.11. COSTS AND EXPENSES OF THE AGENT AND ISSUER.

(a) The Borrowers shall pay from time to time on demand all Costs of Collection and all reasonable costs, expenses, and disbursements (including reasonable attorneys' fees and expenses) which are incurred by the Agent or the Issuer in connection with the preparation, negotiation, execution, and delivery of this Agreement and of any other Loan Documents, and all other reasonable costs, expenses, and disbursements which may be incurred in connection with or in respect to the credit facility contemplated hereby or which otherwise are incurred with respect to the Liabilities.

(b) The Borrowers shall pay from time to time on demand all reasonable costs and expenses (including reasonable attorneys' fees and expenses) incurred, following the occurrence of any Event of Default, by the Revolving Credit Lenders to Lenders' Special Counsel.

(c) Each Borrower authorizes the Administrative Agent to pay all such fees and expenses and in the Administrative Agent's reasonable, good faith discretion, to add such fees and expenses to the Loan Account.

(d) The undertaking on the part of each Borrower in this Section 20.11 shall survive payment of the Liabilities and/or any termination, release, or discharge executed by the Agent in favor of any Borrower, other than a termination, release, or discharge which makes specific reference to this
Section 20.11.

20.12. COPIES AND FACSIMILES. Each Loan Document and all documents and papers which relates thereto which have been or may be hereinafter furnished the Agent or any Revolving Credit Lender may be reproduced by that Revolving Credit Lender or by the Agent by any photographic, microfilm, xerographic, digital imaging, or other process, and such Person making such reproduction may destroy any document so reproduced. Any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made in the regular course of business). Any facsimile which bears proof of transmission shall be binding on the party which or on whose behalf such transmission was initiated and likewise shall be so admissible in evidence as if the original of such facsimile had been delivered to the party which or on whose behalf such transmission was received.

20.13. OHIO LAW. This Agreement and all rights and obligations hereunder, including matters of construction, validity, and performance, shall be governed by the law of State of Ohio.

20.14. CONSENT TO JURISDICTION.

(a) Each Borrower agrees that any legal action, proceeding, case, or controversy against any Borrower with respect to any Loan Document may be brought in the courts of Franklin County, Ohio or in the United States District Court, District of Ohio, sitting in Columbus, Ohio, as the Administrative Agent may elect in the Administrative Agent's sole reasonable, good faith discretion. By execution and delivery of this Agreement, each Borrower, for itself and in respect of its property, accepts, submits, and consents generally and unconditionally, to the jurisdiction of the aforesaid courts.

(b) Each Borrower WAIVES any objection based on forum non conveniens and any objection to venue of any action or proceeding instituted under any of the Loan Documents and consents to the granting of such legal or equitable remedy as is deemed appropriate by the Court.

(c) Nothing herein shall affect the right of the Agent to bring legal actions or proceedings in any other competent jurisdiction.

(d) Each Borrower agrees that any action commenced by any Borrower asserting any claim arising under or in connection with this Agreement or any other Loan Document shall be brought solely in the courts of Franklin County, Ohio or in the United States District Court, District of Ohio, sitting in Columbus, Ohio, and that such Courts shall have exclusive jurisdiction with respect to any such action.

20.15. INDEMNIFICATION. Each Borrower shall indemnify, defend, and hold the Agent, the Issuer, and each Revolving Credit Lender and any Participant and any of their respective employees, officers, agents, Subsidiaries, and Affiliates (each, an "INDEMNIFIED PERSON") harmless of and from any claim brought or threatened against any Indemnified Person by any Borrower, any guarantor or endorser of the Liabilities, or any other Person (as well as from reasonable attorneys' fees, expenses, and disbursements in connection therewith) on account of the relationship of the Borrowers or of any guarantor or endorser of the Liabilities, including all costs, expenses, liabilities, and damages as may be suffered by any Indemnified Person in connection with (x) the Collateral;
(y) the occurrence of any Event of Default; or (z) the exercise of any rights or remedies under any of the Loan Documents (each of claims which may be defended, compromised, settled, or pursued by the Indemnified Person with counsel of the Lender's selection, but at the expense of the Borrowers) other than any claim as to which a final determination is made in a judicial proceeding (in which the Agent and any other Indemnified Person has had an opportunity to be heard), which determination includes a specific finding that the Indemnified Person seeking indemnification had acted in a grossly negligent manner or in actual bad faith or in willful misconduct. This indemnification shall survive payment of the Liabilities and/or any termination, release, or discharge executed by the Agent in favor of the Borrowers, other than a termination, release, or discharge duly executed on behalf of the Agent which makes specific reference to this
Section 20.15.

20.16. RULES OF CONSTRUCTION. The following rules of construction shall be applied in the interpretation, construction, and enforcement of this Agreement and of the other Loan Documents:

(a) Unless otherwise specifically provided for herein (and then only to the extent so provided), interest and any fee or charge which is stated as a per annum percentage shall be calculated based on a 360 day year and actual days elapsed for LIBOR Loans and based on a 365/366 day year and actual days elapsed for Base Margin Loans.

(b) Words in the singular include the plural and words in the plural include the singular.

(c) Unless otherwise specifically provided for herein or in a specific Loan Document (and then only to the extent so provided), as between the parties hereto or to any Loan Document, the definitions of the following terms, as included in the UCC, are deemed to be as follows for purposes of the performance of obligations arising under or in respect of any Loan Document:

(i) "Authenticate" means "signed".

(ii) "Record" means written information in a tangible form.

(d) Titles, headings (indicated by being underlined or shown in SMALL CAPITALS) and any Table of Contents are solely for convenience of reference; do not constitute a part of the instrument in which included; and do not affect such instrument's meaning, construction, or effect.

(e) The words "includes" and "including" are not limiting.

(f) Text which follows the words "including, without limitation" (or similar words) is illustrative and not limitational.

(g) Text which is shown in italics (except for parenthesized italicized text), shown in BOLD, shown IN ALL CAPITAL LETTERS, or in any combination of the foregoing, shall be deemed to be conspicuous.

(h) The words "may not" are prohibitive and not permissive.

(i) Any reference to a Person's "knowledge" (or words of similar import) are to such Person's knowledge assuming that such Person has undertaken reasonable and diligent investigation with respect to the subject of such "knowledge" (whether or not such investigation has actually been undertaken).

(j) Terms which are defined in one section of any Loan Document are used with such definition throughout the instrument in which so defined.

(k) The term "Dollars" and the symbol "$" each refers to United States Dollars.

(l) Unless limited by reference to a particular Section or provision, any reference to "herein", "hereof", or "within" is to the entire Loan Document in which such reference is made.

(m) References to "this Agreement" or to any other Loan Document is to the subject instrument as amended to the date on which application of such reference is being made.

(n) Except as otherwise specifically provided, all references to time are to Cleveland, Ohio time.

(o) In the determination of any notice, grace, or other period of time prescribed or allowed hereunder:

(i) Unless otherwise provided (A) the day of the act, event, or default from which the designated period of time begins to run shall not be included and the last day of the period so computed shall be included unless such last day is not a Business Day, in which event the last day of the relevant period shall be the then next Business Day and (B) the period so computed shall end at 5:00 PM on the relevant Business Day.

(ii) The word "from" means "from and including".

(iii) The words "to" and "until" each mean "to, but excluding".

(iv) The word "through" means "to and including".

(p) The Loan Documents shall be construed and interpreted in a harmonious manner and in keeping with the intentions set forth in Section 20.17 hereof, provided, however, in the event of any inconsistency between the provisions of this Agreement and any other Loan Document, the provisions of this Agreement shall govern and control.

20.17. AGENT'S CONSENT. Unless otherwise explicitly provided herein, the Agent's or any Revolving Credit Lender's consent to any action of any Borrower which is prohibited unless such consent is given may be given or refused by the Agent or such Revolving Credit Lender in its sole reasonable, good faith discretion and without reference to Section 2.16 hereof.

20.18. PARTICIPATIONS. Each Revolving Credit Lender may sell participations to one or more financial institutions (each, a "PARTICIPANT") in that Revolving Credit Lender's interests herein provided that no such participation shall include any provision which accords that Participant with any rights, vis a vis the Agent, with respect to any requirement herein for approval by a requisite number or proportion of the Revolving Credit Lenders. No such sale of a participation shall relieve a Revolving Credit Lender from that Revolving Credit Lender's obligations hereunder nor obligate the Agent to any Person other than a Revolving Credit Lender.

20.19. RIGHT OF SET-OFF. Any and all deposits or other sums at any time credited by or due to any Borrower from the Agent or any Revolving Credit Lender or any Participant or from any Affiliate of any of the foregoing, and any cash, securities, instruments or other property of any Borrower in the possession of any of the foregoing (other than in Exempt DDA accounts), whether for safekeeping or otherwise (regardless of the reason such Person had received the same) shall at all times constitute security for all Liabilities and for any and all obligations of each Borrower to the Agent and such Revolving Credit Lender or any Participant or such Affiliate, and (a) after the occurrence and during the continuance of an Event of Default, or (b) after the service of process upon the Agent or any Revolving Credit Lender or any Participant seeking to attach, by trustee, mesne, or other process, any funds of any Loan Party on deposit with, or assets of any Loan Party in the possession of, the Agent or that Revolving Credit or such Participant, in excess of Five Hundred Thousand Dollars ($500,000.00), may be applied or set off against the Liabilities and against such obligations at any time, whether or not such are then due and whether or not other collateral is then available to the Agent or that Revolving Credit Lender.

20.20. PLEDGES TO FEDERAL RESERVE BANKS. Nothing included in this Agreement shall prevent or limit any Revolving Credit Lender, to the extent that such Revolving Credit Lender is subject to any of the twelve Federal Reserve Banks organized under Section 4 of the Federal Reserve Act (12 U.S.C. Section 341) from pledging all or any portion of that Lender's interest and rights under this Agreement, provided, however, neither such pledge nor the enforcement thereof shall release the pledging Revolving Credit Lender from any of its obligations hereunder or under any of the Loan Documents.

20.21. MAXIMUM INTEREST RATE. Regardless of any provision of any Loan Document, neither the Agent nor any Revolving Credit Lender shall be entitled to contract for, charge, receive, collect, or apply as interest on any Liability, any amount in excess of the maximum rate

imposed by Applicable Law. Any payment which is made which, if treated as interest on a Liability would result in such interest's exceeding such maximum rate shall be held, to the extent of such excess, as additional collateral for the Liabilities as if such excess were "Collateral."

20.22. WAIVERS.

(a) Each Borrower (and all guarantors, endorsers, and sureties of the Liabilities) make each of the waivers included in Section 20.22(b), below, knowingly, voluntarily, and intentionally, and understands that the Agent and each Revolving Credit Lender, in establishing the facilities contemplated hereby and in providing loans and other financial accommodations to or for the account of the Borrowers as provided herein, whether not or in the future, is relying on such waivers.

(b) EACH BORROWER, AND EACH SUCH GUARANTOR, ENDORSER, AND SURETY RESPECTIVELY WAIVES THE FOLLOWING:

(i) Except as otherwise specifically required hereby, notice of non-payment, demand, presentment, protest and all forms of demand and notice, both with respect to the Liabilities and the Collateral.

(ii) Except as otherwise specifically required hereby, the right to notice and/or hearing prior to the Agent's exercising of the Agent's rights upon default.

(iii) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN WHICH THE AGENT OR ANY REVOLVING CREDIT LENDER IS OR BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE AGENT OR ANY REVOLVING CREDIT LENDER OR IN WHICH THE AGENT OR ANY REVOLVING CREDIT LENDER IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF OR IS IN RESPECT OF, ANY RELATIONSHIP AMONG OR BETWEEN ANY BORROWER OR ANY OTHER PERSON AND THE AGENT AND EACH REVOLVING CREDIT LENDER LIKEWISE WAIVES THE RIGHT TO A JURY IN ANY TRIAL OF ANY SUCH CASE OR CONTROVERSY).

(iv) Any defense, counterclaim, set-off, recoupment, or other basis on which the amount of any Liability, as stated on the books and records of the Agent, could be reduced or claimed to be paid otherwise than in accordance with the tenor of and written terms of such Liability.

(v) Any claim to consequential, special, or punitive damages.

20.23. ADDITIONAL WAIVERS.

(a) The Liabilities are the joint and several obligations of each Loan Party. To the fullest extent permitted by applicable law, the obligations of each Loan Party hereunder shall not be affected by (i) the failure of the Agent or any Revolving Credit Lender to assert any claim or demand or to enforce or exercise any right or remedy against any other Loan Party under the

provisions of this Agreement, any other Loan Document or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, this Agreement, any other Loan Document, or any other agreement, including with respect to any other Borrower of the Liabilities, or
(iii) the failure to perfect any security interest in, or the release of, any of the security held by or on behalf of the Collateral Agent or any Revolving Credit Lender.

(b) The obligations of each Loan Party hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Liabilities), including any claim of waiver, release, surrender, alteration or compromise of any of the Liabilities, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Liabilities or otherwise. Without limiting the generality of the foregoing, the obligations of each Loan Party hereunder shall not be discharged or impaired or otherwise affected by the failure of the Agent or any Revolving Credit Lender to assert any claim or demand or to enforce any remedy under this Agreement, any other Loan Document or any other agreement, by any waiver or modification of any provision of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Liabilities, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Loan Party or that would otherwise operate as a discharge of any Loan Party as a matter of law or equity (other than the indefeasible payment in full in cash of all the Liabilities).

(c) To the fullest extent permitted by applicable law, each Loan Party waives any defense based on or arising out of any defense of any other Loan Party or the unenforceability of the Liabilities or any part thereof from any cause, or the cessation from any cause of the liability of any other Loan Party, other than the indefeasible payment in full in cash of all the Liabilities. The Agent and the Revolving Credit Lenders may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Liabilities, make any other accommodation with any other Loan Party, or exercise any other right or remedy available to them against any other Loan Party, without affecting or impairing in any way the liability of any Loan Party hereunder except to the extent that all the Liabilities have been indefeasibly paid in full in cash. Pursuant to applicable law, each Loan Party waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Loan Party against any other Loan Party, as the case may be, or any security.

(d) Upon payment by any Loan Party of any Liabilities, all rights of such Loan Party against any other Loan Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior indefeasible payment in full in cash of all the Liabilities, as more particularly set forth in an Indemnity, Subrogation and Contribution Agreement to be entered into among the Loan Parties. In addition, any indebtedness of any Loan Party now or hereafter held by any other Loan Party is hereby subordinated in right of payment to the prior payment in full of the Liabilities. None of the Loan Parties will demand, sue for, or otherwise attempt to collect any such indebtedness. If any amount shall erroneously be paid to

any Loan Party on account of (a) such subrogation, contribution, reimbursement, indemnity or similar right or (b) any such indebtedness of any Loan Party, such amount shall be held in trust for the benefit of the Agent and the Revolving Credit Lenders and shall forthwith be paid to the Administrative Agent to be credited against the payment of the Liabilities, whether matured or unmatured, in accordance with the terms of the Loan Documents.

20.24. PATRIOT ACT NOTICES. Each Lender hereby notifies the Borrowers that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of each Borrower and other information that will allow such Lender to identify such Borrower in accordance with the Patriot Act.

20.25. EXISTING LOAN AGREEMENT AMENDED AND RESTATED. This Agreement shall amend and restate the Existing Loan Agreement in its entirety. On the Effective Date, the rights and obligations of the parties under the Existing Loan Agreement shall be subsumed within and be governed by this Agreement; provided, however, that, except as specifically provided herein, each of the "Revolving Credit Loans" (as such term is defined in the Existing Loan Agreement) outstanding under the Existing Loan Agreement on the Effective Date shall, for purposes of this Agreement, be included as Revolving Credit Loans hereunder and each of the "L/Cs" and "Bankers Acceptances" (as such terms are defined in the Existing Loan Agreement) outstanding under the Existing Loan Agreement on the Effective Date shall, for purposes of this Agreement, be included as L/Cs and Bankers Acceptances hereunder.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as a sealed instrument as of the day and year first above written.

VALUE CITY DEPARTMENT STORES LLC
("LEAD BORROWER")

By: /s/ James A. McGrady
    -------------------------------
Name: James A. McGrady
Title: Vice President

"OTHER BORROWERS":

GRAMEX RETAIL STORES, INC.

By: /s/ James A. McGrady
    -------------------------------
Name: James A. McGrady
Title: Chief Financial Officer

FILENE'S BASEMENT, INC.

By: /s/ James A. McGrady
    -------------------------------
Name: James A. McGrady
Title: Chief Financial Officer

VALUE CITY OF MICHIGAN, INC.

By: /s/ James A. McGrady
    -------------------------------
Name: James A. McGrady
Title: Chief Financial Officer

GB RETAILERS, INC.

By: /s/ James A. McGrady
    -------------------------------
Name: James A. McGrady
Title: Chief Financial Officer

RETAIL VENTURES JEWELRY, INC.

By: /s/ James A. McGrady
    --------------------------------
Name: James A. McGrady
Title: Chief Financial Officer

VCDS-1

NATIONAL CITY BUSINESS CREDIT, INC.
(ADMINISTRATIVE AGENT, COLLATERAL AGENT
AND REVOLVING CREDIT LENDER)

By: /s/
    --------------------------------
Name: Joseph L. Kwasny
Title: Director

VCDS-2

NATIONAL CITY BANK
(ISSUER AND LEAD ARRANGER)

By: /s/
    --------------------------------
Name: ______________________________
Title: _______________________________

VCDS-3

BANK OF AMERICA, N.A. (CO-SYNDICATION AGENT
AND REVOLVING CREDIT LENDER)

By: /s/
    --------------------------------
Name: ______________________________
Title: _______________________________

VCDS-4

WELLS FARGO RETAIL FINANCE II, LLC
(CO-DOCUMENTATION AGENT AND REVOLVING
CREDIT LENDER)

By: /s/
    --------------------------------
Name:________________________________
Title:________________________________

VCDS-5

THE CIT GROUP/BUSINESS CREDIT, INC.
(CO-SYNDICATION AGENT AND REVOLVING
CREDIT LENDER)

By: /s/
    --------------------------------
Name:_______________________________
Title:________________________________

VCDS-6

GENERAL ELECTRIC CAPITAL CORPORATION
(CO-DOCUMENTATION AGENT AND REVOLVING
CREDIT LENDER)

By: /s/
    --------------------------------
Name:_______________________________
Title:________________________________

VCDS-7

LASALLE BANK NATIONAL ASSOCIATION
(REVOLVING CREDIT LENDER)

By: /s/
    --------------------------------
Name:_______________________________
Title:________________________________

VCDS-8

WACHOVIA CAPITAL FINANCE CORPORATION
(CENTRAL) (REVOLVING CREDIT LENDER)

By: /s/
    --------------------------------
Name:_______________________________
Title:________________________________

VCDS-9

HSBC BUSINESS CREDIT (USA) INC.
(REVOLVING CREDIT LENDER)

By: /s/
    --------------------------------
Name:_______________________________
Title:________________________________

VCDS-10

EXHIBIT 10.8

FOURTH AMENDMENT
TO FINANCING AGREEMENT

FOURTH AMENDMENT, dated as of July 5, 2005 (this "Amendment"), by and among Value City Department Stores LLC, an Ohio limited liability company ("Value City" or "VCDS"), DSW, Inc., an Ohio corporation (formerly known as Shonac Corporation ("DSW"), DSW Shoe Warehouse, Inc., a Missouri corporation ("DSWSW"), Gramex Retail Stores, Inc., a Delaware corporation ("Gramex"), Filene's Basement, Inc., a Delaware corporation ("Filene's"), GB Retailers, Inc. a Delaware corporation ("GB"), Value City of Michigan, Inc., a Michigan corporation ("VC Michigan", and together with Value City, DSW, DSWSW, Gramex, Filene's and GB, each a "Borrower" and collectively, the "Borrowers"), J.S. Overland Delivery, Inc. ("Overland"), Value City Department Stores Services, Inc. ("Services"), Retail Ventures, Inc., an Ohio corporation (the "Parent"), Retail Ventures Jewelry, Inc., an Ohio corporation ("RV Jewelry"), Retail Ventures Services, Inc., an Ohio corporation ("RV Services"), and Retail Ventures Imports, Inc. (formerly known as VC Acquisition, Inc.), an Ohio corporation ("Imports", and together with Overland, Services, the Parent, RV Jewelry and RV Services, each a "Guarantor" and collectively, the "Guarantors", and together with the Borrowers, each a "Loan Party", and collectively, the "Loan Parties"), the lenders currently party to the Financing Agreement (as defined below) (each a "Lender" and collectively, the "Lenders") and Cerberus Partners, L.P., a limited partnership formed under the laws of the State of Delaware ("CPLP"), as agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the "Agent").

RECITALS

WHEREAS, the Loan Parties and certain of their affiliates, the Lenders and the Agent are parties to that certain Financing Agreement dated as of June 11, 2002, as amended by the First Amendment to Financing Agreement, dated as of October 7, 2003, by the Second Amendment to Financing Agreement, dated as of July 29, 2004 and by the Third Amendment to Financing Agreement, dated as of December 29, 2004 (as amended, supplemented, restated or otherwise modified through the date hereof, the "Financing Agreement");

WHEREAS, the Loan Parties have advised the Agent that DSW intends to consummate an IPO (as hereinafter defined), subject to the consent of the Agent and the Lenders;

WHEREAS, the Loan Parties have requested that the Agent and the Lenders (i) consent to the consummation of the IPO, and (ii) make certain related amendments to the Financing Agreement;

WHEREAS, subject to the terms and conditions contained herein, the Lenders have agreed to (i) consent to the IPO, provided that among other things, the IPO is a Qualifying IPO (as hereinafter defined), and (ii) modify and amend certain provisions of the Financing Agreement as provided herein, provided that among other things, the Loan Parties execute and deliver this Amendment.

NOW THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto hereby agree as follows:

1. Definitions. All capitalized terms used herein and not otherwise defined herein are used herein as defined in the Financing Agreement.

2. Amendments to Financing Agreement.

(a) New Definitions. (i) The following new definitions are hereby added to Section 1.01 of the Financing Agreement (in appropriate alphabetical order) to read in their entirety as follows:

"Class A Common Shares" has the meaning set forth for such term in the Articles of Organization of DSW.

"Class B Common Shares" has the meaning set forth for such term in the Articles of Organization of DSW.

"DSW Common Stock" means the Capital Stock of DSW consisting of Class A Common Shares and Class B Common Shares.

"DSW Note" means (a) the promissory note dated March 10, 2005, made by DSW to the order of the Parent, in the original principal amount of $165,000,000, and (b) the promissory note dated May 27, 2005, made by DSW to the order of the Parent in the original principal amount of $25,000,000.

"DSWSW Guarantee" means the guarantee, dated as of March 10, 2005, made by DSWSW in favor of the Parent, guaranteeing the obligations of DSW under the DSW Note.

"Extension Fee" has the meaning specified therefor in Section 2.06(c).

"Extension Option" has the meaning specified therefor in Section 2.03(d).

"Extension Option Deadline" has the meaning specified therefor in
Section 2.03(d).

"Fourth Amendment" means the Fourth Amendment to this Agreement, dated as of July 5, 2005, by and among the Borrowers, the Guarantors, the Lenders and the Agent.

"Fourth Amendment Effective Date" has the meaning specified therefor in Section 4 of the Fourth Amendment.

"IPO" means the proposed initial public offering of Class A Common Shares of DSW under the Securities Act, completed substantially as described in DSW's Form S-1 Registration Statement, as filed with the SEC on June 15, 2005, as amended

from time to time, which offering shall be completed as a primary offering by DSW.

"IPO Effective Date" means the date on which the IPO is consummated in accordance with the terms set forth in (i) Section 3 of the Fourth Amendment, and (ii) the Form S-1 Registration Statement, as filed with the SEC on June 15, 2005, as amended from time to time.

"IPO Price" means the price at which each Class A Common Share is offered to the public in a Qualifying IPO as set forth on the cover page to the prospectus in such IPO.

"Qualifying IPO" means an IPO that satisfies each of the following conditions:

(a) Not more than 45% of the value (as of the IPO Effective Date calculated by reference to the IPO Price) of all issued and outstanding DSW Common Stock shall be sold in connection with the IPO;

(b) Immediately following the IPO and the application of the Net Cash Proceeds thereof, DSW Common Stock having not less than 55% of the value (as of the IPO Effective Date calculated by reference to the IPO Price) of all issued and outstanding DSW Common Stock shall be held (directly or indirectly) by Parent, free and clear of all Liens, other than (i) Liens in favor of the Convertible Loan Agent, and (ii) Liens granted by the Parent in favor of Value City solely with respect to the DSW Common Stock owned by the Parent and solely to secure the Parent's obligations to Value City under the RVI Note, subject to the terms of the RVI Note and the RVI Pledge;

(c) The sale price of the Class A Common Shares sold in the IPO shall reflect the fair market value of such Class A Common Shares on the IPO Effective Date;

(d) The Net Cash Proceeds from the IPO shall be sufficient to repay (i) in full in cash all Obligations outstanding under this Agreement, and (ii) $25,000,000 in cash of the obligations outstanding under the Convertible Loan Agreement; and

(e) The IPO Effective Date shall occur on or prior to December 31, 2005.

"RVI Note" means the promissory note, dated January 1, 2005, as amended and restated as of the IPO Effective Date, satisfactory in form and substance to the Agent, made by Parent to the order of Value City, in the original principal amount of $240,000,000.

"RVI Pledge" means the pledge agreement, dated January 1, 2005. as amended and restated as of the IPO Effective Date, satisfactory in form and substance to the Agent, made by the Parent in favor of Value City, securing the obligations of the Parent under the RVI Note.

(i) The definition of each of the following terms is hereby deleted in its entirety and the following substituted in its stead:

"Convertible Loan Agreement" means the Senior Convertible Loan Agreement dated as of June 11, 2002, among the Loan Parties, the Convertible Loan Agent and the Convertible Loan Lenders, as amended and restated by the Second Amended and Restated Senior Loan Agreement, dated as of the date hereof, and effective upon the Effective Date specified therein.

"Final Maturity Date" means the earlier to occur of (a) June 11, 2006 (or such later date to which the Term Loan Maturity Date may be extended under Section 2.03(d) hereof), or (b) the date on which any Loan shall become due and payable in accordance with the terms of this Agreement and the other Loan Documents.

(c) Extension of Final Maturity Date. Section 2.03 of the Financing Agreement is hereby amended by adding a new clause (d) thereto to read in its entirety as follows:

(d) The Borrowers shall have the option to extend the date specified in clause (a) of the definition of the term "Final Maturity Date" from June 11, 2006 to June 11, 2007 (the "Extension Option"), subject to the satisfaction, by not later than 5:00 p.m., New York City time, on July 31, 2005 (the "Extension Option Deadline"), of each of the following extension conditions:

(i) The Administrative Borrower shall have delivered written notice to the Agent, in form and substance satisfactory to the Agent, on or prior to the Extension Option Deadline of the election by the Borrowers to exercise the Extension Option;

(ii) The Borrowers shall have paid to the Agent, in immediately available funds, the Extension Fee described in Section 2.06(c) on the date the Extension Option is exercised.

(iii) As of the date the Extension Option is exercised (A) the representations and warranties contained in Article V of this Agreement and in each other Loan Document, certificate or other writing delivered to the Agent or any Lender pursuant hereto or thereto on or prior to such date are true and correct on and as of the date the Extension Option is exercised as though made on and as of such date, and (B) no Default or Event of Default shall have occurred and be continuing.

(iv) On the date the Extension Option is exercised, the Agent shall have received (A) an opinion of Simpson Thacher & Bartlett LLP, counsel to the Loan Parties (or such other counsel as shall be reasonably acceptable to the Agent) in the form substantially similar to Exhibit D-1 to the Convertible Loan Agreement (as amended and restated by the Second Amended and Restated Senior Loan Agreement, dated as of the date hereof) with respect to the Loan Documents, and (B) a certificate of an Authorized Officer of the Administrative Borrower certifying that each of the conditions set forth in this Section 2.03(d) have been satisfied on or prior to the Extension Option Deadline.

(b) Mandatory Prepayments. Section 2.05(b)(iii) of the Financing Agreement is hereby amended and restated to read in its entirety as follows:

(iii) Upon the issuance or incurrence by any Loan Party or any of its Subsidiaries of any Indebtedness (other than Permitted Indebtedness), or the sale or issuance by any Loan Party or any of its Subsidiaries of any shares of its Capital Stock (other than pursuant to stock option plans for employees, officers and directors), and subject to the terms of the Intercreditor Agreement, the Borrowers shall prepay the outstanding amount of the Loans in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection therewith; provided, however, that, following the Fourth Amendment Effective Date and subject to the conditions specified in Section 3 of the Fourth Amendment, in the case of the IPO, the Loan Parties shall apply the Net Cash Proceeds of the IPO in accordance with the terms set forth in Section 3(d)(i) and 3(d)(ii) of the Fourth Amendment prior to making the prepayments required pursuant to this subsection (iii); provided, that Value City pays in full all Obligations outstanding under this Agreement and $25,000,000 of the obligations outstanding under the Convertible Loan Agreement, in each case, on the IPO Effective Date. The provisions of this subsection (iii) shall not be deemed to be implied consent to any such issuance, incurrence or sale otherwise prohibited by the terms and conditions of this Agreement.

(d) Section 2.06 of the Financing Agreement is hereby amended by adding a new clause (c) thereto to read in its entirety as follows:

(c) Term Loan Extension Fee. As a condition to exercising the Extension Option pursuant to Section 2.03(d), the Borrowers shall pay to the Agent, for the account of the Lenders in accordance with their Pro Rata Shares, an extension fee (the "Extension Fee") in an amount equal to 3.00% of the outstanding principal balance of the Loans on the date the Extension Option is exercised.

(b) Events of Default. Section 9.01 of the Financing Agreement is hereby amended by adding a new clause (q) thereto to read in its entirety as follows:

(q) the failure of the holder of the DSW Note, the DSWSW Guarantee, the RVI Note or the RVI Pledge to comply in any respect with any subordination provision or any other intercreditor provision contained therein;

3. Consent to IPO. The Agent and the Lenders hereby consent, as of the Fourth Amendment Effective Date, to the consummation of the IPO; provided that:

(a) The Borrowers have paid on or before the IPO Effective Date, all fees, costs, expenses and taxes then payable pursuant to the Financing Agreement;

(b) The IPO shall constitute a Qualifying IPO;

(c) On the IPO Effective Date, the Net Cash Proceeds of the IPO shall be immediately applied (i) by DSW to repay to Parent in full the obligations outstanding under the DSW Note, (ii) by Parent to repay to Value City a portion of the obligations outstanding under the RVI Note, and (iii) by Value City to repay in full (x) all Obligations outstanding under the Financing Agreement and (y) $25,000,000 of the obligations outstanding under the Convertible Loan Agreement, in each case, in immediately available funds;

(d) the Second Amended and Restated Senior Loan Agreement, dated as of July 5, 2005, among the Loan Parties, the lenders party thereto and the Agent, shall have become effective in accordance with its terms and shall be in full force and effect, and each of the conditions precedent to the effectiveness thereof shall have been (or contemporaneously with the IPO shall be) satisfied or waived, as determined by the Agent in its sole discretion, exercised reasonably;

(e) The IPO shall be consummated in accordance with all requirements of Applicable Law and on terms and conditions reasonably satisfactory to Agent, (it being acknowledged that the terms of the IPO set forth in the Form S1 filed with the SEC on June 15, 2005 (without giving effect to any subsequent amendments thereto) are satisfactory to the Agent) and all consents, authorizations and approvals of, and filings and registrations with, and all other actions in respect of, any Governmental Authority or other Person required in connection with the IPO shall have been obtained and shall be in full force and effect; and

(f) The Agent shall have received, immediately prior to the consummation of the IPO, a certificate of an Authorized Officer of each Loan Party, in form and substance satisfactory to the Agent, certifying that each of the conditions set forth in this Section 3 has been, or concurrently with the consummation of the IPO will be, satisfied.

4. Termination. Following payment by Value City in full of all of the Obligations outstanding under the Financing Agreement, the Financing Agreement shall be terminated (other than with respect to the provisions thereof that expressly survive the termination thereof) and all liens and security interests securing the Obligations shall be irrevocably released and discharged and the Loan Parties are hereby authorized to file UCC-3 termination statements and such other documents, instruments and releases with respect to any mortgages, liens, encumbrances or other security interests on any property of the Loan Parties to reflect such termination, release and discharge. Upon satisfaction of each of the conditions set forth in Sections 3 and 5 hereof, the Agent (at the expense of the Parent) hereby agrees (A) to execute and deliver to the Loan Parties such instruments and documents in form and substance reasonably satisfactory to the Parent and the Agent, which are reasonably requested by the Parent, for the purpose of effecting the intent of this Section 4 including, without limitation, to release of record any and all Liens and security interests with respect to the Collateral and to terminate any and all control agreements, lockbox agreements, landlord's or similar waivers and like documents, except to the extent such agreements, waivers and like documents secure the obligations of the Loan Parties to other lenders, in which case, such agreements, waivers and like documents shall be amended to the extent agreed between the Agent and the Loan Parties solely to reflect the termination of the Financing Agreement and the repayment of the Obligations thereunder, (B) to return to the Loan Parties (or at the direction of the Loan Parties deliver to the agent under the Second Amended and Restated Senior Loan Agreement, which direction is hereby given with respect to each Loan Party other than DSW and DSWSW) all certificates, stock powers, pledged promissory notes and other physical collateral provided by the Loan Parties to, and held by, the Agent pursuant to the Loan Documents, and (C) to return to the Parent any certificate representing the Capital Stock of DSW or DSWSW (together with any applicable stock powers) held by the Agent prior to the IPO.

5. Conditions to Effectiveness. This Amendment shall become effective upon satisfaction or waiver in full of the following conditions precedent (the date on which such conditions are satisfied, the "Fourth Amendment Effective Date"):

(a) Both before and immediately after giving effect to this Amendment, (i) the representations and warranties contained in this Amendment and Article V of the Financing Agreement shall be correct on and as of the date of this Amendment as though made on and as of such date (except where such representations and warranties relate to an earlier date in which case such representations and warranties shall be true and correct as of such earlier date); and (ii) no Default or Event of Default shall have occurred and be continuing on the date of this Amendment or result from this Amendment becoming effective in accordance with its terms.

(b) The Agent shall have received, on or before the Fourth Amendment Effective Date, each of the following documents, in form and substance satisfactory to the Agent and dated the Fourth Amendment Effective Date (unless otherwise specified herein or in such document), and all conditions precedent to the effectiveness of such documents (where applicable) shall have been satisfied or waived:

(i) this Amendment, duly executed by the Loan Parties, the Lenders and the Agent;

(ii) a certificate of an Authorized Officer of each Loan Party, certifying the names and true signatures of the representatives of such Person authorized to sign each Loan Document to which such Person is or will be a party and the other documents to be executed and delivered by such Person in connection herewith and therewith, together with evidence of the incumbency of such Authorized Officers; and

(iii) a copy of the resolutions of each Loan Party, certified as of the date hereof by an Authorized Officer thereof, authorizing (A) the transactions contemplated hereby, and (B) the execution, delivery and performance by such Person of each Loan Document to which such Person is or will be a party, included as amended hereby or by the documents contemplated hereby, and the execution and delivery of the other documents to be delivered by such Person in connection herewith and therewith, and (C) the IPO, and each of the documents contemplated thereby.

6. Loan Parties' Representations and Warranties. Each Loan Party represents and warrants to the Agent and the Lenders as follows:

(a) Such Loan Party (i) is duly organized, validly existing and in good standing under the laws of the state of its organization and (ii) has all requisite power, authority and legal right to execute, deliver and perform this Amendment and to perform the Financing Agreement, as amended hereby.

(b) The execution, delivery and performance by such Loan Party of this Amendment and the performance by such Loan Party of the Financing Agreement, as amended hereby and the consummation of the IPO (i) have been duly authorized by all necessary action, (ii) do not and will not violate or create a default under such Loan Party's organizational

documents, any applicable law or any contractual restriction binding on or otherwise affecting such Loan Party or any of such Loan Party's properties (including, without limitation, any Leases) except where such violation of default is not reasonably likely to have a Material Adverse Effect, and (iii) except as provided in the Loan Documents, do not and will not result in or require the creation of any Lien, upon or with respect to such Loan Party's property.

(c) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required in connection with the due execution, delivery and performance by such Loan Party of this Amendment or the performance by such Loan Party of the Financing Agreement, as amended hereby, except to the extent that the failure to obtain the same would not have a Material Adverse Effect.

(d) This Amendment and the Financing Agreement, as amended hereby, constitute the legal, valid and binding obligations of such Loan Party, as the case may be, enforceable against such Loan Party, in accordance with their terms except to the extent the enforceability thereof may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws from time to time in effect affecting generally the enforcement of creditors' rights and remedies and by general principles of equity.

(e) Both before and immediately after giving effect to this Amendment, (i) the representations and warranties contained in Article V of the Financing Agreement are correct on and as of the date hereof as though made on and as of the date hereof (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date), and (ii) no Default or Event of Default has occurred and is continuing on and as of the date hereof.

7. Continued Effectiveness of Financing Agreement. Each Loan Party hereby (a) confirms and agrees that the Financing Agreement and each other Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and after July 5, 2005, all references in any such Loan Document to "the Financing Agreement", the "Agreement", "hereto", "hereof", "hereunder", "thereto", "thereof", "thereunder" or words of like import referring to the Financing Agreement shall mean the Financing Agreement as amended by this Amendment, (b) confirms and agrees that to the extent that any such Loan Document purports to assign or pledge to the Agent, for the ratable benefit of the Lenders, or to grant to the Agent, for the ratable benefit of the Lenders a security interest in or Lien on, any Collateral as security for the Obligations of the Loan Parties, or any of their respective Subsidiaries from time to time existing in respect of the Financing Agreement and the Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby ratified and confirmed in all respects, and (c) confirms and agrees that no amendment of any terms or provisions of the Financing Agreement or the amendments granted hereunder shall relieve any Loan Party from complying with such terms and provisions other than as expressly amended hereby or from complying with any other term or provision thereof or herein.

8. Reaffirmation by Guarantors. Each Guarantor hereby (a) consents to the transactions contemplated by the Amendment; (b) acknowledges and reaffirms its obligations owing to the Agent and the Lenders under any Loan Documents to which it is a party; and (c) agrees that each of the Loan Documents to which it is a party is and shall remain in full force and

effect. Although each of the Guarantors has been informed of the matters set forth herein and has acknowledged and agreed to same, it understands that neither the Agent nor any Lender has any obligation to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendments, and nothing herein shall create such a duty.

9. Miscellaneous.

(a) This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Amendment.

(b) Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

(c) This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties to this Amendment hereby irrevocably waives all rights to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Amendment.

(d) This Amendment is a Loan Document executed pursuant to the Financing Agreement and shall be construed, administered and interpreted in accordance with the terms thereof.

10. JURY TRIAL WAIVER. THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION, OR IN ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AMENDMENT (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment, to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

BORROWERS:                      VALUE CITY DEPARTMENT STORES LLC,
                                an Ohio limited liability company

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Vice President

                                DSW, INC.,
                                an Ohio corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                DSW SHOE WAREHOUSE, INC.,
                                a Missouri corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                GRAMEX RETAIL STORES, INC.,
                                a Delaware corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                FILENE'S BASEMENT, INC.,
                                a Delaware corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                VALUE CITY OF MICHIGAN, INC.,
                                a Michigan corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                GB RETAILERS, INC.,
                                a Delaware corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

GUARANTORS:                     J.S. OVERLAND DELIVERY, INC.
                                a Delaware corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                VALUE CITY DEPARTMENT STORES
                                SERVICES, INC.
                                a Delaware corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                RETAIL VENTURES, INC.
                                an Ohio corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                RETAIL VENTURES JEWELRY, INC.
                                an Ohio corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                RETAIL VENTURES SERVICES, INC.
                                an Ohio corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                RETAIL VENTURES IMPORTS, INC.
                                (formerly known as VC Acquisition, Inc.),
                                an Ohio corporation

                                By: /s/ James A. McGrady
                                    -------------------------------
                                   Name: James A. McGrady
                                   Title: Chief Financial Officer

                                AGENT AND LENDER:

                                CERBERUS PARTNERS, L.P.,
                                a Delaware limited partnership, on behalf
                                of itself and its affiliate assigns

                                By:  CERBERUS ASSOCIATES, L.L.C.

                                By: /s/
                                    ------------------------------------
                                   Name:
                                   Title:

                                LENDER:

                                SCHOTTENSTEIN STORES CORPORATION
                                a Delaware limited partnership

                                By: /s/ Jeffry D. Swanson
                                    ------------------------------------
                                   Name: Jeffry D. Swanson
                                   Title: SVP

EXHIBIT 10.9

$50,000,000

SECOND AMENDED AND RESTATED
SENIOR LOAN AGREEMENT

DATED AS OF JUNE __, 2005

BY AND AMONG

VALUE CITY DEPARTMENT STORES LLC

AS BORROWER,

RETAIL VENTURES, INC.
GRAMEX RETAIL STORES, INC.,
FILENE'S BASEMENT, INC.,
GB RETAILERS, INC.,
VALUE CITY OF MICHIGAN, INC.,
J.S. OVERLAND DELIVERY, INC.
VALUE CITY DEPARTMENT STORES SERVICES, INC.
RETAIL VENTURES JEWELRY, INC.,
RETAIL VENTURES SERVICES, INC., AND
RETAIL VENTURES IMPORTS, INC.

AS GUARANTORS,

THE LENDERS FROM TIME TO TIME PARTY HERETO,

AS LENDERS,

AND

CERBERUS PARTNERS, L.P.

AS AGENT

TABLE OF CONTENTS

                                                                                                                    Page
                                                                                                                    ----
ARTICLE I DEFINITIONS; CERTAIN TERMS...........................................................................       1

         SECTION 1.01          DEFINITIONS.....................................................................       2
         SECTION 1.02          TERMS GENERALLY.................................................................      25
         SECTION 1.03          ACCOUNTING AND OTHER TERMS......................................................      25
         SECTION 1.04          TIME REFERENCES.................................................................      25

ARTICLE II THE LOAN............................................................................................      26

         SECTION 2.01          THE LOAN........................................................................      26
         SECTION 2.02          NOTES; REPAYMENT OF LOAN........................................................      26
         SECTION 2.03          INTEREST........................................................................      27
         SECTION 2.04          PREPAYMENT OF LOAN..............................................................      27
         SECTION 2.05          TAXES...........................................................................      28

ARTICLE III FEES, PAYMENTS AND OTHER COMPENSATION..............................................................      30

         SECTION 3.01          AUDIT AND COLLATERAL MONITORING FEES............................................      30
         SECTION 3.02          PAYMENTS; COMPUTATIONS AND STATEMENTS...........................................      30
         SECTION 3.03          SHARING OF PAYMENTS, ETC........................................................      31
         SECTION 3.04          APPORTIONMENT OF PAYMENTS.......................................................      31
         SECTION 3.05          INCREASED COSTS AND REDUCED RETURN..............................................      32

ARTICLE IV CONDITIONS TO EFFECTIVENESS; consent to ipo.........................................................      34

         SECTION 4.01          CONDITIONS PRECEDENT TO EFFECTIVENESS...........................................      34
         SECTION 4.02          CONSENT TO IPO..................................................................      37
         SECTION 4.03          RELEASE OF DSW AND DSWSW........................................................      38

ARTICLE V REPRESENTATIONS AND WARRANTIES.......................................................................      38

         SECTION 5.01          REPRESENTATIONS AND WARRANTIES..................................................      38

ARTICLE VI COVENANTS OF THE LOAN PARTIES.......................................................................      49

         SECTION 6.01          AFFIRMATIVE COVENANTS...........................................................      49
         SECTION 6.02          NEGATIVE COVENANTS..............................................................      54

ARTICLE VII REPORTING REQUIREMENTS.............................................................................      64

         SECTION 7.01          MAINTAIN RECORDS................................................................      64
         SECTION 7.02          ACCESS TO RECORDS...............................................................      65
         SECTION 7.03          PROMPT NOTICE TO ADMINISTRATIVE AGENT...........................................      65
         SECTION 7.04          WEEKLY REPORTS..................................................................      66

         SECTION 7.05          MONTHLY REPORTS.................................................................      66
         SECTION 7.06          QUARTERLY REPORTS...............................................................      66
         SECTION 7.07          ANNUAL REPORTS..................................................................      67
         SECTION 7.08          OFFICER'S CERTIFICATES..........................................................      67
         SECTION 7.09          INVENTORY, APPRAISALS AND AUDITS................................................      68
         SECTION 7.10          ADDITIONAL FINANCIAL INFORMATION................................................      68
         SECTION 7.11          FORMAT OF INFORMATION...........................................................      69

ARTICLE VIII USE OF COLLATERAL.................................................................................      69

         SECTION 8.01          USE OF INVENTORY CONTROL........................................................      69
         SECTION 8.02          INVENTORY QUALITY...............................................................      70
         SECTION 8.03          ADJUSTMENTS AND ALLOWANCES......................................................      70
         SECTION 8.04          VALIDITY OF ACCOUNTS............................................................      70
         SECTION 8.05          NOTIFICATION TO ACCOUNT DEBTORS.................................................      70
         SECTION 8.06          APPOINTMENT AS ATTORNEY-IN-FACT.................................................      70
         SECTION 8.07          NO OBLIGATION TO ACT............................................................      71

ARTICLE IX EVENTS OF DEFAULT...................................................................................      72

         SECTION 9.01          EVENTS OF DEFAULT...............................................................      72

ARTICLE X AGENT................................................................................................      76

         SECTION 10.01         APPOINTMENT.....................................................................      76
         SECTION 10.02         NATURE OF DUTIES................................................................      77
         SECTION 10.03         RIGHTS; EXCULPATION, ETC........................................................      77
         SECTION 10.04         RELIANCE........................................................................      78
         SECTION 10.05         INDEMNIFICATION.................................................................      78
         SECTION 10.06         AGENT INDIVIDUALLY..............................................................      78
         SECTION 10.07         SUCCESSOR AGENT.................................................................      79
         SECTION 10.08         COLLATERAL MATTERS..............................................................      79
         SECTION 10.09         AGENCY FOR PERFECTION...........................................................      80

ARTICLE XI GUARANTY............................................................................................      81

         SECTION 11.01         GUARANTY........................................................................      81
         SECTION 11.02         GUARANTY ABSOLUTE...............................................................      81
         SECTION 11.03         WAIVER..........................................................................      82
         SECTION 11.04         CONTINUING GUARANTY; ASSIGNMENTS................................................      82
         SECTION 11.05         SUBROGATION.....................................................................      82

ARTICLE XII MISCELLANEOUS......................................................................................      83

         SECTION 12.01         NOTICES, ETC....................................................................      83
         SECTION 12.02         AMENDMENTS, ETC.................................................................      84
         SECTION 12.03         NO WAIVER; REMEDIES, ETC........................................................      84
         SECTION 12.04         EXPENSES; TAXES; ATTORNEYS' FEES................................................      85

         SECTION 12.05         RIGHT OF SET-OFF................................................................      86
         SECTION 12.06         SEVERABILITY....................................................................      86
         SECTION 12.07         ASSIGNMENTS AND PARTICIPATIONS..................................................      86
         SECTION 12.08         COUNTERPARTS....................................................................      89
         SECTION 12.09         GOVERNING LAW...................................................................      89
         SECTION 12.10         CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE...........................      89
         SECTION 12.11         WAIVER OF JURY TRIAL, ETC.......................................................      90
         SECTION 12.12         CONSENT BY THE AGENT AND LENDERS................................................      90
         SECTION 12.13         NO PARTY DEEMED DRAFTER.........................................................      90
         SECTION 12.14         REINSTATEMENT; CERTAIN PAYMENTS.................................................      90
         SECTION 12.15         INDEMNIFICATION.................................................................      91
         SECTION 12.16         [INTENTIONALLY OMITTED.]........................................................      92
         SECTION 12.17         RECORDS.........................................................................      92
         SECTION 12.18         BINDING EFFECT..................................................................      92
         SECTION 12.19         MAXIMUM INTEREST................................................................      92
         SECTION 12.20         CONFIDENTIALITY.................................................................      93
         SECTION 12.21         INTEGRATION.....................................................................      94

ARTICLE XIII ISSUANCE OF EQUITY INTERESTS TO LENDERS...........................................................      94

         SECTION 13.01         AUTHORIZATION AND ISSUANCE OF WARRANTS..........................................      94
         SECTION 13.02         SECURITIES ACT MATTERS..........................................................      94
         SECTION 13.03         CERTAIN TAXES...................................................................      96
         SECTION 13.04         CANCELLATION AND ISSUANCE.......................................................      96

ARTICLE XIV TRANSACTIONS WITH AFFILIATES.......................................................................      96

         SECTION 14.01         TRANSACTION APPROVAL............................................................      96
         SECTION 14.02         BUYOUT OPTION...................................................................      97
         SECTION 14.03         CPLP TRANSACTION................................................................      98

ARTICLE XV REAFFIRMATION AND CONSENT...........................................................................      98

         SECTION 15.01         REAFFIRMATION AND CONFIRMATION..................................................      98

SECOND AMENDED AND RESTATED SENIOR
LOAN AGREEMENT

Second Amended and Restated Senior Loan Agreement, dated as of June __, 2005 (the "Agreement"), among Value City Department Stores LLC, an Ohio limited liability company (the "Borrower"), Retail Ventures, Inc., an Ohio corporation (the "Parent"), Gramex Retail Stores, Inc., a Delaware corporation ("Gramex"), Filene's Basement, Inc., a Delaware corporation ("Filene's"), GB Retailers, Inc., a Delaware corporation ("GB"), Value City of Michigan, Inc., a Michigan corporation ("VC Michigan"), J.S. Overland Delivery, Inc., a Delaware corporation ("Overland"), Value City Department Stores Services, Inc. ("Services"), Retail Ventures Jewelry, Inc., an Ohio corporation ("RV Jewelry"), Retail Ventures Services, Inc., a Delaware corporation ("RV Services"), Retail Ventures Imports, Inc. (formerly known as VC Acquisition, Inc.), an Ohio corporation ("Imports", and together with Parent, Gramex, Filene's, GB, VC Michigan, Overland, Services, RV Jewelry and RV Services, each a "Guarantor", and collectively, the "Guarantors"), the lenders from time to time party hereto (each a "Lender" and collectively, the "Lenders"), and Cerberus Partners, L.P., a Delaware limited partnership ("CPLP"), as agent for itself and the other Lenders (in such capacity, together with its successors, if any, the "Agent").

RECITALS

WHEREAS, the Borrower, the Guarantors and certain of their affiliates, the Lenders and the Agent are parties to the Amended and Restated Senior Convertible Loan Agreement, dated as of June 11, 2002 (as amended by (a) Amendment No. 1 to Amended and Restated Senior Convertible Loan Agreement, dated June 11, 2002, (b) Amendment No. 2 to Amended and Restated Senior Convertible Loan Agreement, dated October 7, 2003, and (c) Amendment No. 3 to the Amended and Restated Senior Convertible Loan Agreement, dated December 29, 2004, the "Original Agreement");

WHEREAS, the Borrower, the Guarantors and certain of their affiliates have undergone certain corporation reorganizations;

WHEREAS, the parties hereto have agreed to remove the conversion feature contained under the Original Agreement and issue to the Lenders warrants, the exercise price of which may be paid with the Loan (as hereinafter defined) on all the same terms as if the Loan (as defined in the Original Agreement) were converted;

WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent desire to amend and restate the Original Agreement, effective upon the Effective Date (as hereinafter defined).

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS; CERTAIN TERMS

Section 1.01 Definitions. As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:

"Account Debtor" means each debtor, customer or obligor in any way obligated on or in connection with any Accounts Receivable.

"Accounts Receivable" means, with respect to any Person, any and all rights of such Person to payment for goods sold and/or services rendered, including accounts, general intangibles and any and all such rights evidenced by chattel paper, instruments or documents, whether due or to become due and whether or not earned by performance, and whether now or hereafter acquired or arising in the future, and any proceeds arising therefrom or relating thereto.

"Action" has the meaning specified therefor in Section 12.12.

"Acquisition" means the purchase or acquisition of all or substantially all of the assets of any Person, the purchase of a controlling equity interest in any Person, or the merger or consolidation of any Person with any other Person, in any transaction or group of transactions which are part of a common plan.

"Affiliate" means (i) with respect to any Person, any other Person that directly or, alone or with a group of related Persons whose interests taken as a whole, indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person; (ii) any Person which is a parent, brother-sister or Subsidiary of a Key Loan Party, whose enterprise's tax returns or financial statements are consolidated with those of a Key Loan Party, which is a member of the same controlled group of corporations (within the meaning of Section 1563(a)(1), (2) and (3) of the Internal Revenue Code or 1986, as amended from time to time) of which any Key Loan Party is a member, or Controls or is Controlled by any Key Loan Party; and (iii) with respect to the Loan Parties, without limiting the provisions of clauses (i) and
(ii) hereof, "Affiliate" includes SSC, DSW and DSWSW. Notwithstanding anything to the contrary contained herein, in no event shall the Agent or any Lender be considered an "Affiliate" of a Loan Party as a result of being party to this Agreement or the transactions contemplated hereby

"Agent" has the meaning specified therefor in the preamble hereto.

"Agent Advances" has the meaning specified therefor in section 10.08(a).

"Agent's Account" means an account at a bank designated by the Agent from time to time as the account into which the Loan Parties shall make certain payments to the Agent for the benefit of the Agent and the Lenders under this Agreement and the other Loan Documents.

"Agreement" means this Second Amended and Restated Senior Loan Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to the Agreement as the same may be in effect at the time such reference becomes operative.

"Applicable Law" means, as to any Person, (i) all statutes, rules, regulations, orders or other requirements having the force of law, and (ii) all court orders and injunctions, arbitrator's

decisions and/or similar rulings, in each instance ((i) and (ii)) of or by any Federal, state, municipal or other governmental authority, or court, tribunal, panel or other body which has or claims jurisdiction over such Person, or any property of such Person, or of any other Person for whose conduct such Person would be responsible.

"Approved Existing Transaction" has the meaning specified therefor in Section 14.01.

"Assignment and Acceptance" means an assignment and acceptance entered into by an assigning Lender and an assignee, and accepted by the Agent, in accordance with Section 12.07 hereof and substantially in the form of Exhibit I to the Original Agreement or such other form acceptable to the Agent.

"Authorized Officer" means, with respect to any Person, the chief executive officer, chief financial officer, president, executive vice president, controller or treasurer of such Person.

"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.
Section 101, et seq.), as amended from time to time, and any successor statute.

"Board" means the Board of Governors of the Federal Reserve System of the United States.

"Board of Directors" means the board of directors of the Parent.

"Borrower" has the meaning specified therefor in the preamble hereto.

"Borrowing Base Certificate" has the meaning set forth in the Revolving Credit Facility as in effect from time to time.

"Business Day" means any day other than (i) a Saturday or Sunday,
(ii) any day on which banks in New York City generally are not open to the general public for the purpose of conducting commercial banking business, or
(iii) a day on which the principal office of the Agent is not open to the general public to conduct business.

"Business Plan" means the business plan for the Loan Parties for the fiscal years 2005 through and including 2006, in form and substance reasonably satisfactory to the Agent and the Lenders and delivered to the Agent prior to the Effective Date.

"Buyout Exercise Notice" has the meaning specified therefor in
Section 14.02(a).

"Buyout Option" has the meaning specified therefor in Section 14.02(a).

"Buyout Securities" has the meaning specified therefor in Section 14.02(c).

"Capital Guideline" means any law, rule, regulation, policy, guideline or directive (whether or not having the force of law and whether or not the failure to comply therewith would be unlawful) of any central bank or Governmental Authority (i) regarding capital adequacy, capital ratios, capital requirements, the calculation of a bank's capital or similar matters, or (ii)

affecting the amount of capital required to be obtained or maintained by any Lender, any Person controlling any Lender or the manner in which any Lender, any Person controlling any Lender, allocates capital to any of its contingent liabilities (including letters of credit), advances, acceptances, commitments, assets or liabilities.

"Capital Stock" means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock; and (ii) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person.

"Capitalized Lease" means, with respect to any Person, any lease of real or personal property by such Person as lessee which is (i) required under GAAP to be capitalized on the balance sheet of such Person; or (ii) a transaction of a type commonly known as a "synthetic lease" (i.e. a lease transaction that is treated as an operating lease for accounting purposes but with respect to which payments of rent are intended to be treated as payments of principal and interest on a loan for Federal income tax purposes).

"Capitalized Lease Obligations" means, with respect to any Person, obligations of such Person and its Subsidiaries under Capitalized Leases, and, for purposes hereof, the amount of any such obligation shall be the capitalized amount thereof determined in accordance with GAAP.

"Change in Control" means the occurrence of any of the following:
(i) the acquisition, by any person or group (other than (A) a Person controlled by SSC or (B) one or more Family Trusts) (within the meaning of Section 13(d)(3) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of 25% or more of the issued and outstanding capital stock of the Parent having the right, under ordinary circumstances, to vote for the election of directors of the Parent, excluding from the foregoing any acquisition pursuant to the issuance of the Warrants or the Conversion Warrants or the exercise of such Warrants or Conversion Warrants by the holder thereof to acquire Warrant Stock; (ii) more than thirty percent (30%) of the Persons who were directors of the Parent on the first day of any period consisting of twelve
(12) consecutive calendar months (the first of which twelve (12) month periods commencing with the first day of August 2003), cease to be directors of the Parent, for any reason other than death, disability, or replacement (in the ordinary course of business and not as a result of any change in the equity ownership of the Parent) by other Persons nominated by a nominating committee of the Board of Directors of the Parent; (iii) the failure of the Parent to own, directly or indirectly, 95% of the capital stock of each of the other Loan Parties; or (iv) the failure of SSC to possess or one or more Family Trusts to possess, directly or indirectly, the power to cause the direction of the management and policies of the Parent.

"Class A Common Shares" has the meaning set forth for such term in the Articles of Organization of DSW as in effect on the Effective Date.

"Class B Common Shares" has the meaning set forth for such term in the Articles of Organization of DSW as in effect on the Effective Date.

"Collateral" means all of the property and assets and all interests therein and proceeds thereof now owned or hereafter acquired by any Loan Party upon which a Lien is

granted or purported to be granted by such Loan Party as security for all or any part of the Obligations.

"Common Stock" means the common stock, no par value, of the Parent.

"Competitive Business" means any business or enterprise consisting of (i) operation of off-price discount department stores; (ii) operation of retail furniture stores and related accessories; (iii) operation of designer and name-brand shoe stores; (iv) operation of licensed shoe departments; (v) furniture manufacturing; or (vi) bedding manufacturing.

"Contingent Obligation" means, with respect to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, (i) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor; (ii) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement (other than such agreements to purchase goods in the ordinary course of business); (iii) any obligation of such Person, whether or not contingent, (A) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (B) (other than such agreements to purchase goods in the ordinary course of business) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (C) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (D) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof (other than such agreements to purchase goods in the ordinary course of business); provided, however, that the term "Contingent Obligation" shall not include (1) any product warranties or
(2) obligations, warranties and indemnities not relating to Indebtedness which have been made or undertaken, in each case, extended in the ordinary course of business.

"Control", "Controls", "Controlled by", or "under common Control with" means the possession, direct or indirect of the power to cause the direction of the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise. A Person shall be deemed to have control of another Person if it is a "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13-d-5 under the Exchange Act) or a member of a "group" that is the beneficial owner, directly or indirectly, of 20% or more of the voting stock of or equity interest in such Person.

"Control Agreement" means the Collection Account Agreements (as defined in the Revolving Credit Facility) made by a Loan Party and the financial institutions maintaining Collection Accounts (as defined in the Revolving Credit Facility) in favor of the Revolving Credit Facility Agent for the benefit of the Lenders (among others) securing the Obligations (and the obligations owing to certain other lenders).

"Conversion Warrantholders" means the Lenders party hereto on the Effective Date, and any subsequent holders of the Conversion Warrants.

"Conversion Warrants" means any of the warrants issued to the Conversion Warrantholders on the Effective Date pursuant to the terms hereof, substantially in the form of Exhibit A-1 hereto.

"CPLP" has the meaning specified therefore in the preamble hereto.

"Current Market Price" means, on any date specified herein, the average of the daily Market Price during the ten consecutive trading days before such date, except that, if on any such date the shares of Common Stock or Class A Common Shares, as applicable, are not listed or admitted for trading on any national securities exchange or quoted in the over-the-counter market, the Current Market Price shall be the Market Price on such date.

"Default" means an event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

"Disposition" means any transaction, or series of related transactions, pursuant to which any Person or any of its Subsidiaries sells, assigns, transfers or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any other Person, in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person, excluding any sales of Inventory in the ordinary course of business on ordinary business terms.

"Division(s)" means the various business segments of the Key Loan Parties, being the Filene's Business and the Value City Business.

"Dollar," "Dollars" and the symbol "$" each means lawful money of the United States of America.

"DSW" means DSW Inc. (formerly known as Shonac Corporation), an Ohio corporation.

"DSW Common Stock" means the Capital Stock of DSW consisting of Class A Common Shares and Class B Common Shares.

"DSW Note" means (a) the promissory note dated March 10, 2005, made by DSW to the order of the Parent, in the original principal amount of $165,000,000 and (b) the promissory note dated May 27, 2005, made by DSW to the order of the Parent in the original principal amount of $25,000,000.

"DSW Registration Rights Agreement" means the registration rights agreement, substantially in the form of Exhibit E-2 hereto, by and among DSW, the Warrantholders and the Conversion Warrantholders with respect to the matters covered thereby.

"DSWSW" means DSW Shoe Warehouse, Inc. (formerly known as DSW, Inc.), an Ohio corporation.

"DSWSW Guarantee" means the guarantee, dated as of March 10, 2005, made by DSWSW in favor of the Parent, guaranteeing the obligations of DSW under the DSW Note.

"Effective Date" means the date, on or before December 31, 2005, on which all of the conditions precedent set forth in Section 4.01 are satisfied or waived.

"Eligible Assignee" means any Federal, state or foreign banking institution, or any private entity or commercial institution primarily engaged in the business of making commercial loans, and shall in no event include a Person that is engaged in a Competitive Business with any Loan Party, and as long as SSC remains in Control of the Key Loan Parties, an "Eligible Assignee" shall in no event include a Person which is engaged in a Competitive Business or a Related Business with SSC.

"Employee Benefit Plan" means an employee benefit pension benefit plan that is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Internal Revenue Code of 1986, as amended from time to time, and as to which a Key Loan Party or any ERISA Affiliate may have any liability.

"Environmental Actions" means any complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other communication from any Person or Governmental Authority involving violations of Environmental Laws or Releases of Hazardous Materials (i) from any assets, properties or businesses owned or operated by any Loan Party or any of its Subsidiaries or any predecessor in interest; or (ii) onto any facilities which received Hazardous Materials generated by any Loan Party or any of its Subsidiaries or any predecessor in interest.

"Environmental Laws" means the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.), the Federal Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.) and the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.), as such laws may be amended or otherwise modified from time to time, and any other present or future Federal, state, local or foreign statute, ordinance, rule, regulation, order, judgment, decree, permit, license or other binding determination of any Governmental Authority imposing liability or establishing standards of conduct for protection of the environment or other government restrictions relating to the protection of the environment or the Release, deposit, or migration of any Hazardous Materials into the environment.

"Environmental Liabilities and Costs" means all liabilities, monetary obligations, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, reasonable costs, and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, and consultants and costs of investigations and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any Governmental Authority or any third party, and which relate to any environmental condition or a Release of Hazardous Materials from or onto (i) any property presently or formerly owned by

any Loan Party or any of its Subsidiaries; or (ii) any facility which received Hazardous Materials generated by any Loan Party or any of its Subsidiaries.

"Environmental Lien" means any Lien in favor of any Governmental Authority for Environmental Liabilities and Costs.

"Equipment" means, without limitation, "equipment" as defined in the UCC, and also all furniture, store fixtures, motor vehicles, rolling stock, machinery, office equipment, plant equipment, tools, dies, molds, and other goods, property, and assets which are used and/or were purchased for use in the operation or furtherance of a Loan Party's business, and any and all accessions or additions thereto, and substitutions therefor.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.

"ERISA Affiliate" means any Person which is under common control with a Key Loan Party within the meaning of Section 4001 of ERISA or is part of a group which includes any Key Loan Party and which would be treated as a single employer under Section 414 of the Internal Revenue Code of 1986, as amended from time to time.

"Event of Default" means any of the events set forth in Section
9.01. An "Event of Default" shall be deemed to have occurred and to be continuing unless and until that Event of Default has been duly waived by the Agent or cured to the satisfaction of the Agent.

"Excess Availability" has the meaning specified in the Revolving Credit Facility.

"Excess Availability Reserve" has the meaning specified in the Revolving Credit Facility.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as amended, modified, succeeded or replaced from time to time.

"Fairness Committee" has the meaning specified therefor in Section 14.02(b).

"Family Trust" means one or more trusts established for the benefit of any of Jay L. Schottenstein, Susan S. Diamond, Ann S. Deshe, Lori Schottenstein, Geraldine Schottenstein, any of their respective spouses, children or lineal descendants, or any Person controlled by any such trust or trusts.

"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal to, for each day during such period, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

"Filene's Business" means the businesses operated by Filene's.

"Final Maturity Date" means June 10, 2009, or such earlier date on which the Loan shall become due and payable in accordance with the terms of this Agreement and the other Loan Documents.

"Financial Statements" means (i) the audited consolidated balance sheet of the Parent and its Subsidiaries for the Fiscal Year ended January 29, 2005, and the related consolidated statement of operations, shareholders' equity and cash flows for the Fiscal Year then ended; and (ii) the unaudited consolidated balance sheet of the Parent and its Subsidiaries for the three months ended April 30, 2005, and the related consolidated statement of operations, shareholder's equity and cash flows for the three months then ended.

"Fiscal Year" means the fiscal year of the Parent and its Subsidiaries ending on the Saturday nearest January 31st of each year.

"GAAP" means generally accepted accounting principles in effect from time to time in the United States, applied on a consistent basis; provided, that for the purpose of Article VII hereof and the definitions used therein, "GAAP" shall mean generally accepted accounting principles in effect on the date hereof and consistent with those used in the preparation of the Financial Statements; provided, further, that if there occurs after the date of this Agreement any change in GAAP that affects in any respect the calculation of any covenant contained in Article VII hereof, the Agent and the Borrower shall negotiate in good faith amendments to the provisions of this Agreement that relate to the calculation of such covenant with the intent of having the respective positions of the Lenders and the Borrower after such change in GAAP conform as nearly as possible to their respective positions as of the date of this Agreement.

"Governmental Authority" means any nation or government, any Federal, state, city, town, municipality, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

"Guaranteed Obligations" has the meaning specified therefor in
Section 11.01.

"Guarantor" means the Parent and each Subsidiary of the Parent, now existing or hereafter created or acquired (other than the Borrower and the Unrestricted Subsidiaries). For the avoidance of doubt, it is hereby agreed that none of DSW, DSWSW or any of their respective Subsidiaries shall be a "Guarantor" hereunder.

"Guaranty" means (i) the Guaranty of each Guarantor party hereto contained in Article XI hereof; and (ii) each Guaranty, made by any other Guarantor in favor of the Agent for the benefit of the Lenders, pursuant to
Section 6.01(a) or otherwise, which Guaranty shall be reasonably satisfactory, in form and substance to the Agent and the Lenders.

"Hazardous Material" means (i) any element, compound or chemical that is defined, listed or otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous substance, extremely hazardous substance or chemical, hazardous waste, special

waste, or solid waste under Environmental Laws or that is reasonably likely to cause immediately, or at some reasonably foreseeable future time, harm to or have an adverse effect on, the environment or risk to human health or safety, including, without limitation, any pollutant, contaminant, waste, hazardous waste, toxic substance or dangerous good which is defined or identified in any Environmental Law and which is present in the environment in such quantity or state that it contravenes any Environmental Law; (ii) petroleum and its refined products; (iii) polychlorinated biphenyls; (iv) any substance exhibiting a hazardous waste characteristic, including, without limitation, corrosivity, ignitability, toxicity or reactivity as well as any radioactive or explosive materials; and (v) any raw materials, building components (including, without limitation, asbestos-containing materials) and manufactured products containing hazardous substances listed or classified as such under Environmental Laws.

"Hedging Agreement" means any interest rate, foreign currency, commodity or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity or equity values (including, without limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.

"Highest Lawful Rate" means, with respect to the Agent or any Lender, the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Obligations under laws applicable to the Agent or such Lender which are currently in effect or, to the extent allowed by law, under such Applicable Laws which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than Applicable Laws now allow.

"Indebtedness" means, without duplication, all obligations, including Contingent Obligations, that in accordance with GAAP should be classified upon the balance sheet of any Key Loan Party and/or the consolidated balance sheet of the Parent as liabilities, other than trade payables, deferred rent, or accrued expenses incurred in the ordinary course of business or to which reference should be made by footnotes thereto, including, in any event and whether or not so classified, (i) all obligations in respect of money borrowed (including any indebtedness which is non-recourse to the credit of such Person but which is secured by a Lien on any asset of such Person) whether or not evidenced by a promissory note, bond, debenture or other written obligation to pay money; (ii) all obligations evidenced by bonds, notes, debentures or other similar instruments; (iii) all obligations in connection with Hedging Agreements; (iv) all obligations in connection with any letter of credit or acceptance transaction (including, without limitation, the face amount of all letters of credit and acceptances issued for the account of such Person or reimbursement on account of which such Person would be obligated); (v) all obligations in connection with the sale or discount of accounts receivable or chattel paper of such Person; (vi) all obligations on account of deposits or advances other than deferred rent incurred in the ordinary course of business;
(vii) all obligations as lessee under Capitalized Leases; and (viii) all obligations in connection with any sale and leaseback transaction. "Indebtedness" also includes: (x) Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; (y) any guaranty, endorsement, suretyship or other undertaking pursuant to which that Person may be liable in respect of Indebtedness of any

third party; and (z) the Indebtedness of a partnership or joint venture for which such Person is liable as a general partner or joint venturer.

"Indemnified Matters" has the meaning specified therefor in Section 12.15.

"Indemnitees" has the meaning specified therefor in Section 12.15.

"Initial DSW Stock Exercise Amount" means that number of Class A Common Shares obtained by dividing the outstanding principal amount of the Loan by the IPO Price.

"Insolvency Proceeding" means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, or extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

"Intercreditor Agreement" means the Amended and Restated Intercreditor and Lien Subordination Agreement, substantially in the form of Exhibit B, as amended or otherwise modified from time to time in accordance with its terms, by and between the Agent, on behalf of itself and the Lenders and the Revolving Credit Facility Agent, on behalf of itself and the Revolving Facility Lenders and acknowledged and agreed by the Borrower and the Guarantors.

"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended from time to time, (or any successor statute thereto) and the regulations thereunder.

"Inventory" means, with respect to any Person, all goods and merchandise of such Person, including, without limitation, all raw materials, work-in-process, packaging, supplies, materials and finished goods of every nature used or usable in connection with the shipping, storing, advertising or sale of such goods and merchandise, whether now owned or hereafter acquired, and all such other property the sale or other disposition of which would give rise to Accounts Receivable or cash.

"IPO" means the proposed initial public offering of Class A Common Shares of DSW under the Securities Act, completed substantially as described in DSW's Form S-1 Registration Statement, as filed with the SEC on June 15, 2005, as amended from time to time, which offering shall be completed as a primary offering by DSW.

"IPO Effective Date" means the date on which the IPO is consummated in accordance with the terms set forth in (i) Section 4.02 hereof, and (ii) the Form S-1 Registration Statement as filed with the SEC on June 15, 2005 as amended from time to time.

"IPO Price" means the price at which each Class A Common Share is offered to the public in a Qualifying IPO as set forth on the cover page to the prospectus in such IPO.

"Key Loan Parties" means, collectively, the Borrower, the Parent, Gramex, Filene's, GB, VC Michigan and RV Jewelry.

"Landlord's Agreement" means a landlord's agreement consenting to the recording of the Mortgages, in form and substance satisfactory to the Agent, made by the fee owner (or ground or prime lessee with the consent of the fee owner) of the real property secured by a Mortgage in favor of the Agent (or the Agent's representative) for the benefit of the Lenders (among others) and delivered to the Agent pursuant to Sections 4.01(d) and 6.01(a) and (i) or pursuant to the Original Agreement.

"Lease" means any lease of real property to which any Loan Party or any of its Subsidiaries is a party as lessor or lessee.

"Leasehold Mortgage Status Report" means a monthly report that reflects the Loan Parties' efforts to obtain leasehold Mortgages on substantially all Leases of the Loan Parties, such report to contain sufficient detail to enable the Agent to evaluate the status of the Loan Parties' efforts on a property-by-property basis.

"Lenders" means the financial institutions listed on the signature pages hereof, and each assignee that shall become a party hereto pursuant to
Section 12.07.

"Lender's Account" means, with respect to each Lender, an account at a bank designated by each Lender from time to time into which the Loan Parties shall make certain payments to such Lender under this Agreement.

"Lien" means any mortgage, deed of trust, pledge, lien (statutory or otherwise), security interest, charge or other encumbrance or security or preferential arrangement of any nature, including, without limitation, any conditional sale or title retention arrangement, any Capitalized Lease and any assignment, deposit arrangement or financing lease intended as, or having the effect of, security.

"Loan" means the loan made by Lenders to the Borrower pursuant to Article II hereof.

"Loan Document" means this Agreement, any Guaranty, any Security Agreement, any Pledge Agreement, any Mortgage, any Landlord's Agreement, any Control Agreement, the Intercreditor Agreement and any other agreement, instrument or other document executed and delivered pursuant hereto or thereto or otherwise evidencing or securing any Loan or any other Obligation and at any time a Lender is a holder of (i) the Warrants, the Warrants, the Registration Rights Agreement, and the DSW Registration Rights Agreement, and/or (ii), the Convertible Warrants, the Convertible Warrants, the Registration Rights Agreement and the DSW Registration Rights Agreement.

"Loan Party" means the Borrower or any Guarantor.

"Market Price" means, on any date specified herein, the amount per share of the Common Stock or Class A Common Shares, as applicable, equal to (i) the last reported sale price of such Common Stock or Class A Common Shares, as applicable, regular way, on such date or, in case no such sale takes place on such date, the average of the closing bid and asked prices thereof regular way on such date, in either case as officially reported on the principal national securities exchange on which such Common Stock or Class A Common Shares, as applicable, is

then listed or admitted for trading, (ii) if such Common Stock or Class A Common Shares, as applicable, is not then listed or admitted for trading on any national securities exchange but is designated as a national market system security by the NASD, the last reported trading price of the Common Stock or Class A Common Shares, as applicable, on such date, (iii) if there shall have been no trading on such date or if the Common Stock or Class A Common Shares, as applicable, is not so designated, the average of the closing bid and asked prices of the Common Stock or Class A Common Shares, as applicable, on such date as shown by the NASD automated quotation system, (iv) if trading in such Common Stock or Class A Common Shares, as applicable, is quoted in the over-the-counter market, the average of the closing bid and asked prices of the Common Stock or Class A Common Shares, as applicable, on such date as shown on the OTC Bulletin Board, or (v) if such Common Stock or Class A Common Shares, as applicable, is not then listed or admitted for trading on any national exchange or quoted in the over-the-counter market, the fair value thereof (as of a date which is within 20 days of the date as of which the determination is to be made) determined in good faith by a committee of the Parent's Board of Directors consisting of directors who are not Affiliates of the Parent or SSC; provided, however, that at the request of CPLP, the Market Price shall be determined in good faith by an independent investment banking firm selected by the Parent, SSC and CPLP or, if that selection cannot be made within 10 days, by an independent investment banking firm selected by the American Arbitration Association in accordance with its rules, and provided, further, that the Borrower shall pay all of the reasonable fees and expenses of any third parties incurred in connection with determining the Market Price.

"Material Accounting Change" means any change in GAAP applicable to accounting periods subsequent to the Parent's fiscal year most recently completed prior to the execution of this Agreement, which change has a material effect on the Parent's Consolidated financial condition or operating results, as reflected on financial statements and reports prepared by or for the Parent and its Subsidiaries, when compared with such condition or results as if such change had not taken place.

"Material Adverse Effect" means a material adverse effect on (i) the business, operations, property, assets or financial condition of (x) the Loan Parties taken as a whole or (y) the Value City Business taken as a whole or (ii) the validity or enforceability of this Agreement or any of the other Loan Documents or any of the material rights or remedies of the Agent or the Lenders hereunder or thereunder.

"Material Contract" means, with respect to any Person, (i) each contract or agreement (other than Leases, intercompany agreements benefit and pension plans, stock option plans and labor and employment contracts) to which such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary of $1,000,000 or more annually (other than purchase orders in the ordinary course of the business of such Person or such Subsidiary and other than contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than 60 days' notice without penalty or premium) and (ii) all other contracts or agreements material to the business, operations, condition (financial or otherwise), performance, prospects or properties of such Person or such Subsidiary.

"Moody's" means Moody's Investors Service, Inc. and any successor thereto.

"Mortgage" means a mortgage (including, without limitation, a leasehold mortgage, deed of trust or deed to secure debt), in form and substance satisfactory to the Agent, made by a Loan Party in favor of the Agent for the benefit of the Lenders (among others), securing the Obligations and the obligations owing to certain other lenders, and delivered to the Agent pursuant to Section 4.01(d), Section 6.01(a), Section 6.01(i) or otherwise, including under the Original Agreement.

"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has contributed to, or has been obligated to contribute, at any time during the preceding six (6) years.

"Note" means a promissory note of the Borrower, substantially in the form of Exhibit A to the Original Agreement, made payable to the order of each Lender requesting a Note, and evidencing the Indebtedness resulting from the making by such Lender of its Pro Rata Share of the Loan.

"Notice of Election" has the meaning specified therefore in Section 2.03(c).

"Notification Date" has the meaning specified therefor in Section 14.01.

"Objection Date" has the meaning specified therefor in Section 14.01.

"Objection Notice" has the meaning specified therefor in Section 14.01.

"Obligations" means all present and future indebtedness, obligations, and liabilities of each Loan Party to the Agent and the Lenders under the Loan Documents, whether or not the right of payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured, unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 9.01. Without limiting the generality of the foregoing, the Obligations of each Loan Party under the Loan Documents include (i) the obligation to pay principal, interest, including any PIK Interest, charges, expenses, fees, attorneys' fees and disbursements, indemnities and other amounts payable by such Person under the Loan Documents; and (ii) the obligation of such Person to reimburse any amount in respect of any of the foregoing that the Agent may elect in accordance with the terms thereof to pay or advance on behalf of such Person.

"Old Notes" has the meaning specified in Section 2.01.

"Original Agreement" has the meaning specified therefore in the preamble.

"Other Taxes" has the meaning specified therefor in Section 2.05.

"Parent" has the meaning specified therefor in the preamble.

"Participant Register" has the meaning specified therefor in Section 12.07(b)(v).

"Payment Office" means the Agent's office located at 299 Park Avenue, New York, New York, 10171, or at such other office or offices of the Agent as may be designated in writing from time to time by the Agent to the Borrower.

"PBGC" means the Pension Benefit Guaranty Corporation or any successor thereto.

"Permitted Acquisition" means (i) any Acquisition the cash consideration for which is less than $3,000,000 in the aggregate in any fiscal year of the Parent and its Subsidiaries and which satisfies the conditions set forth in clauses (f), (g), (h) and (i) below; (ii) an Acquisition in which each of the following conditions are satisfied: (a) no Default or Event of Default then exists or would arise from the consummation of such Acquisition; (b) such Acquisition shall have been approved by the Board of Directors of the Person (or similar governing body if such Person is not a corporation) which is the subject of such Acquisition and such Person shall not have announced that it will oppose such Acquisition or shall not have commenced any action which alleges that such Acquisition will violate Applicable Law; (c) the Borrower shall have furnished the Agent with ten (10) days' prior notice of such intended Acquisition and shall have furnished the Agent with a current draft of the Acquisition agreement and other Acquisition documents, a summary of any due diligence undertaken by the Parent and/or the Key Loan Parties in connection with such Acquisition, appropriate financial statements of the Person which is the subject of such Acquisition, pro forma projected financial statements for the twelve (12) month period following such Acquisition after giving effect to such Acquisition (including balance sheets, cash flows and income statements by month for the acquired Person, individually, and on a consolidated basis with all Loan Parties), and such other information as the Agent may reasonably require, each of which shall be reasonably satisfactory to the Agent; (d) the structure of the Acquisition shall be acceptable to the Agent in its reasonable judgment; if an Acquisition of capital stock or other equity interests, after consummation of such Acquisition, a Key Loan Party shall own directly or indirectly a majority of the equity interests in the Person being acquired and shall Control a majority of any voting interests, and/or shall otherwise Control the governance of the Person being acquired; (e) the Agent shall have received (i) the results of appraisals of the assets (or the assets of the Person) to be acquired in such Acquisition and of a commercial finance examination of the Person that is (or whose assets are) being acquired, and (ii) such other due diligence as the Agent may reasonably require, all of the results of the foregoing to be reasonably satisfactory to the Agent; (f) any assets acquired shall be utilized only in, and if the Acquisition involves a merger, consolidation or stock acquisition, the Person which is the subject of such Acquisition shall be engaged only in, a Permitted Business; (g) if the Person which is the subject of such Acquisition will be maintained as a Subsidiary of a Key Loan Party, such Subsidiary shall have executed such documents as may be necessary to be joined as a "Guarantor" hereunder, and the Agent shall have received subject to the terms of the Intercreditor Agreement a first priority security and mortgage interest (subject to Permitted Liens) in such Subsidiary's capital stock, inventory, accounts, equipment, real estate, leaseholds, and other property of the same nature as constitutes Collateral under this Agreement in order to secure the Obligations;
(h) the total consideration paid for all Acquisitions (whether in cash, tangible property, notes or other property (other than capital stock of the Parent)) after June 11, 2002, shall not exceed in the aggregate the sum of $20,000,000; and (i) Excess Availability immediately prior to such Acquisition, immediately after giving effect thereto, and projected Excess Availability on a pro forma projected basis for

the twelve (12) months immediately following such Acquisition, shall not be less than $70,000,000.

"Permitted Business" means the business of owning and operating a chain of retail department stores selling clothing apparel, housewares, home furnishings, toys, sporting goods, jewelry, shoes, health and beauty care items or any of the foregoing, and engaging in certain related licensing and other retail and wholesale businesses reasonably related thereto, including, but not limited to, any retail lease department operation.

"Permitted Disposition" means any of the following: (i) licenses of intellectual property or licensed or leased departments of a Loan Party or any of its Subsidiaries in the ordinary course of business or to any other Loan Party (other than the Parent); (ii) Leases or subleases of Leases, to the extent at any point in time such Leases or subleases have, in the aggregate, anticipated minimum fixed annual rental payments of not more than $3,000,000;
(iii) sales, assignments, transfers, conveyances or other dispositions of any or all of the Property specified in Schedule 6.02(c) hereof; provided that in connection with a sale or similar disposition of any such Property, if a Loan Party receives a note or similar obligation as all or part of the consideration therefor, such Loan Party shall secure such note or obligation with a Mortgage or similar Lien on such Property and pledge such note or other obligation to the Agent as security for the Obligations pursuant to the terms of the Loan Documents; (iv) sales of Inventory and Equipment in connection with store closures permitted in accordance with the provisions of Section 6.02(c)(vii) hereof, provided that all sales of Inventory in connection with store closings
(x) after the occurrence and during the continuance of an Event of Default or
(y) consisting of more than fifteen (15) retail stores at the same time, shall be in accordance with liquidation agreements and with liquidators reasonably acceptable to the Agent; and (v) (x) the sale of any property, land or building (including any related receivables or other intangible assets) to any Person which is not a Subsidiary of the Parent, DSW or DSWSW, or (y) the sale of the entire Capital Stock (or other equity interests) and Indebtedness of any Subsidiary owned by a Loan Party to any Person which is not a Subsidiary of the Parent, DSW or DSWSW, or (z) the consummation of any other asset sale with a Person who is not a Subsidiary of the Parent, provided that: (A) the consideration for such transaction represents fair value, and at least 90% of such consideration consists of cash, provided that in connection with a sale or similar disposition of any such Property, if a Loan Party receives a note or similar obligations as all or part of the consideration therefor, such Loan Party shall secure such note or obligation with a Mortgage or similar Lien on such property and pledge such note or other obligation to the Agent as security for the Obligations pursuant to the terms of the Loan Documents; (B) the aggregate consideration for all such transactions completed in any fiscal year does not exceed $500,000; (C) the aggregate consideration for all such transactions completed after June 11, 2002 does not exceed $1,500,000; and (D) other than in connection with a transaction, the aggregate consideration for which is equal to an amount less than $500,000, at least five (5) Business Days prior to the date of completion of such transaction such Loan Party shall have delivered to the Agent an officer's certificate executed on behalf of such Loan Party by an Authorized Officer of such Loan Party, which certificate shall contain a description of the proposed transaction, the date such transaction is scheduled to be consummated, the estimated purchase price or other consideration for such transaction, financial information pertaining to compliance with the preceding clause (A), and which shall (if requested by the Agent) include a certified copy of the draft or definitive documentation pertaining thereto.

"Permitted DSW Stock Sale" means a sale by the Parent of Capital Stock of DSW generating Net Cash Proceeds at the time of such sale in an amount sufficient to pay all Obligations hereunder in full.

"Permitted Indebtedness" means any of the following: (i) Indebtedness incurred under this Agreement and the other Loan Documents; (ii) any Indebtedness incurred under the Revolving Credit Facility; (iii) Indebtedness on account of Equipment or improvements to real property acquired in compliance with the requirements of subparagraph (xiii) of the definition of Permitted Liens, the incurrence of which would not otherwise be prohibited by this Agreement; provided, that such Indebtedness shall not exceed $10,000,000 in the aggregate principal amount at any time outstanding for all Loan Parties and, with respect to the Parent only, shall not exceed $5,000,000 in the aggregate principal amount outstanding at any time; (iv) (a) Indebtedness consisting of all obligations of a Loan Party or any Subsidiary as lessee under Capitalized Leases, and (b) Indebtedness consisting of all obligations of a Loan Party or any Subsidiary under any lease (x) that is accounted for by the lessee as an operating lease and (y) under which the lessee is intended to be the "owner" of the leased property for Federal income tax purposes; provided, that (A) at the time of any incurrence thereof after the date hereof, and after giving effect thereto, no Event of Default shall have occurred and be continuing or would result therefrom, and (B) the aggregate outstanding principal amount (using the obligations in lieu of principal amount, in the case of any Capitalized Lease, or present value, based on the implicit interest rate, in lieu of principal amount, in the case of any lease described above in part (b)) of Indebtedness permitted by this clause (iv) shall not exceed $10,000,000 in the aggregate at any time outstanding for all Loan Parties and, with respect to the Parent only, shall not exceed $5,000,000 in the aggregate outstanding at any time; (v) Indebtedness of the Loan Parties and any Subsidiary under the Hedging Agreements with any Revolving Credit Lender or an Affiliate of a Revolving Credit Lender; provided that (1) such agreement is non-speculative in nature, and (2) the Loan Parties have received the written consent of the Agent (which consent shall not be unreasonably withheld) prior to entering into such agreement; (vi) the Indebtedness listed on Schedule 6.02(b), annexed hereto; (vii) Indebtedness to sellers in connection with Permitted Acquisitions; (viii) intercompany Indebtedness between and among the Loan Parties (other than the Parent) pursuant to loans and advances permitted in accordance with Subsection 6.02(e)(F), below, and intercompany Indebtedness due to the Parent by any other Loan Party to the extent permitted hereunder; (ix) Indebtedness to creditors of the former Filene's incurred in connection with the acquisition of Filene's, such Indebtedness not to exceed $6,000,000; (x) Indebtedness with respect to indemnities, warranties, statutory obligations, and surety, appeal and supersedeas bonds incurred in the ordinary course of business; (xi) Indebtedness in respect of overdraft protections and otherwise in connection with deposit accounts; (xii) Indebtedness arising out of the refinancing, extension, renewal or refunding of any Indebtedness permitted under this Agreement, provided that the principal amount of such Indebtedness is not increased from the amount outstanding at the time of such refinancing; (xiii) Indebtedness owed by the Parent to any of the other Loan Parties in an amount not to exceed $5,000,000 (less amounts paid under Section 6.02(g) hereof) in the aggregate at any time outstanding; and (xiv) Indebtedness owing by the Parent to the Borrower pursuant to the RVI Note, provided that such Indebtedness is subject to the subordination provisions contained therein as in effect on the Effective Date.

"Permitted Investments" means each of the following: (i) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United

States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing not more than one year from the date of acquisition thereof; (ii) investments in commercial paper maturing not more than one year from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from Standard & Poor's or from Moody's; (iii) investments in certificates of deposit, banker's acceptances and time deposits maturing not more than one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any financial institution organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000; (iv) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (i) above (without regard to the limitation on maturity contained in such clause) and entered into with a financial institution satisfying the criteria described in clause (iii) above; (v) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's or from Moody's; (vi) investments in money market funds, substantially all the assets of which are comprised of securities of the types described in clauses (i) through (vi) above; (vii) investments acquired by a Loan Party or any of its Subsidiaries (x) in exchange for any other investment held by such Loan Party or any such Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other investment, or (y) as a result of a foreclosure by such Loan Party or any of its Subsidiaries with respect to any secured investment or other transfer of title with respect to any secured investment in default; (viii) investments by a Loan Party in the capital of any wholly-owned Subsidiary of such Loan Party, including without limitation, any Permitted Acquisitions, provided that the provisions of Section 6.01(a) hereof have been complied with respect to such Subsidiary; (ix) investments by the Parent in the Capital Stock of DSW; (x) to the extent not permitted by the foregoing clauses, existing investments in any Subsidiaries (and any increases thereof attributable to increases in retained earnings); (xi) to the extent not permitted by the foregoing clauses, the existing investments described on Schedule 6.02(e) hereto; (xii) investments of a Loan Party and any Subsidiary in Hedging Agreements permitted by clause (v) of the definition of Permitted Indebtedness; (xiii) investments of any Person which are outstanding at the time such Person becomes a Subsidiary of a Loan Party as a result of a Permitted Acquisition, but not any increase in the amount thereof unless otherwise permitted by this Agreement; (xiv) investments by Value City in the Parent pursuant to the RVI Note, and investments by the Borrower pursuant to the DSW Note and the DSWSW Guarantee, provided, that in each case, such investment is subject to the subordination terms contained therein as in effect on the Effective Date; and (xv) any other investments (whether in the form of cash or contribution of property, and if in the form of a contribution of property, such property shall be valued for purposes of this clause at the fair value thereof) in any corporation, partnership, limited liability company, joint venture or other business entity, which is not itself a Subsidiary of a Key Loan Party or owned or Controlled by any director, officer or employee of a Key Loan Party or any of its Subsidiaries, not otherwise permitted by the foregoing clauses, made after June 11, 2002, shall be permitted to be incurred if (a) no Event of Default shall have occurred and be continuing, or would result therefrom, and (b) the aggregate cumulative amount of such investments (together with any loans and advances permitted under Sections

6.02(e)(vi)(D) and (E)) does not exceed $6,000,000, provided, that except for loans to officers and directors, all such Permitted Investments are subject to a perfected first priority Lien in favor of the Agent (subject to the terms of the Intercreditor Agreement).

"Permitted Liens" means any of the following: (i) Liens for taxes not yet delinquent or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of a Loan Party in accordance with GAAP, and provided further that, no notice of tax lien has been filed with respect thereto; (ii) Liens in respect of property or assets imposed by law in the ordinary course of business, such as carrier's, warehousemen's, mechanics', materialmen's, repairmen's, landlord's or similar Liens arising in the ordinary course of business which (x) are not overdue in accordance with customary business practices and consistent with the applicable Loan Party's prior practices, and do not in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Loan Parties, or (y) are being contested in good faith by a Loan Party, by appropriate proceedings diligently instituted and conducted and without danger of any material risk to the Collateral and adequate reserves or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor; (iii) Liens, pledges or deposits in connection with workers' compensation, unemployment insurance and other types of social security; (iv) deposits to secure the performance of tenders, bids, sales, trade and government contracts, leases, statutory obligations, surety, appeal, and supersedeas bonds, warranty, advance payment, customs, performance and return-of-money bonds and other obligations of a like nature in the ordinary course of business (exclusive of obligations in respect of the payment of borrowed money) whether pursuant to statutory requirements, common law or consensual arrangements; (v) easements, rights of way, leases, zoning or deed restrictions, licenses, covenants, building restrictions, minor defects or irregularities in title and other similar real estate encumbrances incurred in the ordinary course of business that in the aggregate do not materially interfere with the conduct of the business of the Loan Parties; defects and irregularities in titles, survey exceptions, encumbrances, easements or reservations of others for rights-of-way, roads, pipelines, railroad crossings, services, utilities or other similar purposes; outstanding mineral rights or reservations (including rights with respect to the removal of material resource) which do not materially diminish the value of the surface estate, assuming usage of such surface estate similar to that being carried on by any Loan Party as of the Effective Date; (vi) any interest or title of a lessor under any lease entered into by any Loan Party in the ordinary course of business not in violation of the Loan Documents; (vii) any interest or title of any lessee under any leases or subleases of real property of a Loan Party not in violation of the requirements of the Loan Documents, provided that all such Liens do not in the aggregate materially detract from the value of such Loan Party's property or materially impair the use thereof in the operation of such Loan Party's business; (viii) Liens arising from financing statements regarding property subject to Capitalized Leases not in violation of the requirements of the Loan Documents, provided that such Liens are only in respect of the property subject to, and secure only, the respective lease; (ix) rights of consignors of goods to a Loan Party as consignee; (x) Liens arising from judgments, decrees or attachments in existence less than 30 days after the entry thereof, with respect to which execution has been stayed and with respect to which payment in full above any applicable deductible is covered by insurance or a bond, or in circumstances not constituting an Event of Default under Section 9.01(j)(i); (xi) Liens created by this Agreement or the other Loan Documents; (xii) Liens (x) listed on Schedule 6.02(a), annexed hereto, or (y) arising out of the refinancing, extension, renewal or refunding of any Indebtedness

secured by any such Lien, provided that the principal amount of such Indebtedness is not increased and such Indebtedness is not secured by any additional assets; (xiii) Liens which are placed upon Equipment or improvements to real property (including the associated real property) used in the ordinary course of business of a Loan Party or any Subsidiary (x) at the time of (or within 90 days after) the acquisition of such Equipment or the completion of such improvements by such Loan Party or any such Subsidiary to secure Indebtedness incurred to pay or finance all or a portion of the purchase price or other cost thereof, provided that the Lien on the Equipment so acquired or the real property so improved does not encumber any other asset of such Loan Party or any such Subsidiary; or (y) are existing on Equipment or real property at the time acquired by a Loan Party or any Subsidiary or on assets of a Person at the time such Person first becomes a Subsidiary of a Loan Party; provided, that (A) any such Lien was not created at the time of or in contemplation of the acquisition of such assets or Person by a Loan Party or any Subsidiaries, (B) in the case of any such acquisition of a Person, any such Lien attaches only to the Equipment or real estate, as applicable, of such Person, and (C) in the case of any such acquisition of Equipment or real estate by a Loan Party or any Subsidiary, any such Lien attaches only to the property and assets so acquired and not to any other property or assets of such Loan Party or any such Subsidiary; provided, that the Liens outstanding from time to time under this clause (xiii) shall not secure any Indebtedness other than Permitted Indebtedness described in clause (iii) of such definition; (xiv) Liens securing Indebtedness assumed in connection with, or continuing to exist after, but not incurred in connection with, or contemplation of, a Permitted Acquisition, which Liens were in effect prior to the consummation of the Permitted Acquisition; provided, that such Liens may not extend to any Collateral of the Loan Parties, or the Inventory, Accounts Receivable or General Intangibles of the Person so acquired; (xv) a Lien granted by any Loan Party in connection with the Revolving Credit Facility; (xvi) Liens granted by the Parent in favor of the Borrower solely with respect to the DSW Common Stock owned by the Parent to secure the Parent's obligations to the Borrower under the RVI Note, subject to the terms of the RVI Note and the RVI Pledge as in effect on the Effective Date. Notwithstanding anything to the contrary contained herein, no Lien shall be permitted to exist on the DSW Common Stock held by the Parent, other than Liens in favor of the Agent and Liens in favor of the Borrower to the extent permitted by clause (xvi) of the definition of Permitted Liens.

"Person" shall have the meaning given to such term as defined in
Section 13(d)(3) of the Securities Exchange Act.

"PIK Interest" means, as at any date of determination, the amount of all interest accrued with respect to the Loan that has been paid-in-kind by being added to the outstanding principal balance thereof on a monthly basis in accordance with Section 2.03.

"Pledge Agreement" means a Pledge and Security Agreement (including any amendments or joinders thereto) made by a Loan Party in favor of the Agent for the benefit of the Lenders, whether delivered pursuant to the Original Agreement and reaffirmed pursuant to Section 15.01(b) of this Agreement or delivered pursuant to Section 6.01(a) of this Agreement, and, in each case, securing the Obligations and delivered to the Agent.

"Post-Default Rate" means a rate of interest per annum equal to the rate of interest otherwise in effect from time to time pursuant to the terms of this Agreement plus 3%.

"Pro Rata Share" means the percentage obtained by dividing (i) the aggregate unpaid principal amount of such Lender's portion of the Loan, by (ii) the aggregate unpaid principal amount of the Loan.

"Property" means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

"Qualifying IPO" means an IPO that satisfies each of the following conditions:

(a) Not more than 45% of the value (as of the IPO Effective Date calculated by reference to the IPO Price) of all issued and outstanding DSW Common Stock shall be sold in connection with the IPO;

(b) Immediately following the IPO and the application of the Net Cash Proceeds thereof, DSW Common Stock having not less than 55% of the value (as of the IPO Effective Date calculated by reference to the IPO Price) of all issued and outstanding DSW Common Stock shall be held (directly or indirectly) by Parent, free and clear of all Liens, other than (i) Liens in favor of the Agent, and (ii) Liens permitted by clause (xvi) of the definition of Permitted Liens;

(c) The sale price of the Class A Common Shares sold in the IPO shall reflect the fair market value of such Class A Common Shares on the IPO Effective Date;

(d) The Net Cash Proceeds from the IPO shall be sufficient to repay (i) in full in cash all obligations outstanding under the Term Loan Agreement and (ii) in cash, $25,000,000 of the principal amount of the Old Notes under the Original Agreement; and

(e) The IPO Effective Date shall be on or prior to December 31, 2005.

"Reference Bank" means JPMorgan Chase Bank, its successors or any other commercial bank designated by the Agent to the Borrower from time to time.

"Reference Rate" means the rate of interest publicly announced by the Reference Bank in New York, New York from time to time as its reference rate, base rate or prime rate. The reference rate, base rate or prime rate is determined from time to time by the Reference Bank as a means of pricing some loans to its borrowers and neither is tied to any external rate of interest or index nor necessarily reflects the lowest rate of interest actually charged by the Reference Bank to any particular class or category of customers. Each change in the Reference Rate shall be effective from and including the date such change is publicly announced as being effective.

"Referral Notice" has the meaning specified therefor in Section 14.02(b).

"Referred SSC Transaction" has the meaning specified therefor in
Section 14.02(b).

"Register" has the meaning specified therefor in Section 12.07(b)(ii).

"Registered Loan" has the meaning specified therefor in Section 12.07(b)(ii).

"Registered Note" has the meaning specified therefor in Section 2.02(c).

"Registration Rights Agreement" means the Second Amended and Restated Registration Rights Agreement, substantially in the form of Exhibit E-1 hereto, by and between the Parent, the Conversion Warrantholders and the Warrantholders with respect to the matters covered thereby.

"Regulation T", "Regulation U" and "Regulation X" mean, respectively, Regulations T, U and X of the Board or any successor, as the same may be amended or supplemented from time to time.

"Related Business" means any business or enterprise consisting of asset maximization services or asset valuation services.

"Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Material) into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through or in the ambient air, soil, surface or ground water, or property which is in violation of any Environmental Laws.

"Remedial Action" means all actions taken to (i) clean up, remove, remediate, contain, treat, monitor, assess, evaluate or in any other way address Hazardous Materials in the indoor or outdoor environment; (ii) prevent or minimize a Release or threatened Release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (iii) perform pre-remedial studies and investigations and post-remedial operation and maintenance activities; or (iv) perform any other actions authorized by 42 U.S.C. Section 9601.

"Reportable Event" means an event described in Section 4043 of ERISA (other than an event not subject to the provision for 30-day notice to the PBGC under the regulations promulgated under such Section).

"Required Lenders" means CPLP and any of its affiliates to whom it assigns all or any portion of its rights and obligations under this Agreement or any of the Loan Documents.

"Revolving Credit Facility" means the $275,000,000 working capital facility, dated as of June __, 2005, as amended, restated, supplemented or otherwise modified from time to time, among the Loan Parties, the Revolving Credit Facility Agent and the Revolving Credit Facility Lenders.

"Revolving Credit Facility Agent" means National City Business Credit, Inc. ("NCBC"), as Administrative Agent and as Collateral Agent for the Revolving Credit Facility Lenders, and each of its respective successors and assigns.

"Revolving Credit Facility Documents" means any agreement, instrument or other document executed and delivered pursuant to the Revolving Credit Facility or otherwise securing or evidencing any loan or obligation thereunder.

"Revolving Credit Facility Lenders" means the financial institutions party to the Revolving Credit Facility.

"RVI Note" means the promissory note, dated January 1, 2005, as amended by the First Amendment to Promissory Note and First Amendment to Stock Pledge Agreement dated as of the Effective Date, substantially in the form of Exhibit C-1 hereto, made by the Parent to the order of the Borrower, in the original principal amount of $240,000,000.

"RVI Pledge" means the pledge agreement, dated as of January 1, 2005, as amended by the First Amendment to Promissory Note and First Amendment to Stock Pledge Agreement dated as of the Effective Date, substantially in the form of Exhibit C-2 hereto, securing the obligations under the RVI Note.

"SEC" means the Securities and Exchange Commission or any other similar or successor agency of the Federal government administering the Securities Act.

"Securities Act" means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect from time to time.

"Security Agreement" means a Security Agreement (including any amendments or joinders thereto) made by a Loan Party in favor of the Agent for the benefit of the Lenders, whether delivered pursuant to the Original Agreement and reaffirmed pursuant to Section 15.01(b) of this Agreement, or delivered pursuant to Section 6.01(a) of this Agreement, in each case, securing the Obligations and delivered to the Agent.

"Solvent" means, with respect to any Person on a particular date, that on such date (i) the fair value of the property of such Person is not less than the total amount of the liabilities of such Person; (ii) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its existing debts as they become absolute and matured; (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, Contingent Obligations and other commitments as they mature in the normal course of business; (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital. The determination of whether a Person is Solvent shall take into account all such Person's properties and liabilities regardless of whether, or the amount at which, any such property or liability is included on a balance sheet of such Person prepared in accordance with GAAP, including properties such as contingent contribution or subrogation rights, business prospects, distribution channels and goodwill. The determination of the sum of a Person's properties at a fair valuation or the present fair saleable value of a Person's properties shall be made on a going concern basis unless, at the time of such determination, the liquidation of the

business in which such properties are used or useful is in process or is demonstrably imminent. In computing the amount of contingent or unrealized properties or contingent or unliquidated liabilities at any time, such properties and liabilities will be computed at the amounts which, in light of all the facts and circumstances existing at such time, represent the amount that reasonably can be expected to become realized properties or matured liabilities, as the case may be. In computing the amount that would be required to pay a person's probable liability on its existing debts as they become absolute and matured, reasonable valuation techniques, including a present value analysis, shall be applied using such rates over such periods as are appropriate under the circumstances, and it is understood that, in appropriate circumstances, the present value of Contingent Liabilities may be zero.

"Standard & Poor's" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.

"SSC" means Schottenstein Stores Corporation.

"SSC Transaction" has the meaning specified therefor in Section 14.01.

"Subsidiary" means, with respect to any Person at any date, any corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or other business entity (i) the accounts of which would be consolidated with those of such Person in such Person's consolidated financial statements if such financial statements were prepared in accordance with GAAP or (ii) of which more than 50% of (A) the outstanding Capital Stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such Person, (B) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (C) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such Person; provided, however, that notwithstanding anything to the contrary contained herein, following the Effective Date, none of DSW, DSWSW or any of their respective Subsidiaries shall be, or be deemed to be "Subsidiaries" of any Loan Party for purposes of this Agreement or any other Loan Document.

"Taxes" has the meaning set forth in Section 2.05.

"Term Loan Agreement" means the Financing Agreement dated as of June 11, 2002, as amended, restated, supplemented or otherwise modified from time to time, among the Loan Parties, the lenders party thereto and CPLP as agent for the lenders, which Financing Agreement shall be paid in full and terminated on the Effective Date.

"Uniform Commercial Code" has the meaning specified therefor in
Section 1.03.

"Unrestricted Subsidiary" has the meaning specified therefor in
Section 5.01(kk).

"Value City Business" means the Key Loan Parties' business other than the Filene's Business.

"Warrantholders" means the holders of the Warrants.

"Warrants" means the warrants dated as of September 26, 2002, and amended and restated as of the Effective Date, substantially in the form of Exhibit A-1 hereto, issued by the Parent in favor of the Warrantholders.

"Warrant Stock" means the shares of Common Stock of the Parent and/or the Class A Common Shares of DSW issuable upon the exercise of the Warrants and/or the Conversion Warrants.

Section 1.02 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. References in this Agreement to "determination" by the Agent include good faith estimates by the Agent (in the case of quantitative determinations) and good faith beliefs by the Agent (in the case of qualitative determinations).

Section 1.03 Accounting and Other Terms. Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given it under GAAP applied on a basis consistent with those used in preparing the Financial Statements.

Section 1.04 Time References. Unless otherwise indicated herein, all references to time of day refer to Eastern Standard Time or Eastern daylight saving time, as in effect in New York City on such day. For purposes of the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding"; provided, however, that with respect to a computation of fees or interest payable to the Agent or any Lender, such period shall in any event consist of at least one full day.

ARTICLE II

THE LOAN

Section 2.01 The Loan. (a) The Lenders have made a Loan (as defined in the Original Agreement) to the Borrower under the Original Agreement, of which $50,000,000 of the original principal amount remains outstanding on the Effective Date (immediately prior to the effectiveness of this Agreement but after giving effect to the payment described in clause (d)(ii) of the definition of the term "Qualifying IPO"). The Borrower acknowledges and agrees that upon the effectiveness of this Agreement, the aggregate principal amount of such Loan shall automatically and immediately be deemed to constitute the "Loan" to the Borrower by the Lenders under this Agreement. It is the intention of the parties hereto that this Agreement and the consolidation and substitution of the Notes for the existing "Notes" referred to in the Original Agreement (the "Old Notes") shall not in any way constitute (i) a forgiveness of the indebtedness of the Borrower under the Old Note, (ii) a release of the Borrower from such obligations, or (iii) a novation of the Old Notes.

(b) Any principal amount of the Loan which is prepaid or repaid may not be reborrowed.

Section 2.02 Notes; Repayment of Loan.

(a) The obligations of the Borrower to repay the Loan and interest thereon shall, upon the request of any Lender, be evidenced by Notes, duly executed on behalf of the Borrower, and delivered to and made payable to the order of each such Lender requesting a Note in a principal amount equal to such Lender's Pro Rata Share of the Loan as set forth on Schedule 1.01A.

(b) The Borrower shall repay the principal amount of the Loan (including all PIK Interest added thereto) on the Final Maturity Date together with all such other amounts as may be necessary to pay in full, in cash, all Obligations to the Lenders.

(c) The Loan may not be evidenced by promissory notes other than a Note which is a Registered Note. Upon the registration of the Loan, any promissory note (other than a Registered Note) evidencing the same shall be null and void and shall be returned to the Borrower. The Borrower agrees, at the request of the Agent, to execute and deliver to each Lender, a promissory note in registered form (a "Registered Note") to evidence such Registered Loan and registered as provided in Section 12.07. Once recorded in the Register, the Loan evidenced by such Note may not be removed from the Register so long as it remains outstanding and a Registered Note may not be exchanged for a promissory note that is not a Registered Note.

(d) Upon the delivery by a Conversion Warrantholder to the Borrower of a Note or a portion of a Note as payment of the Purchase Price (as such term is defined in the Conversion Warrant) under the Conversion Warrant, in addition to satisfying each of its obligations under the Conversion Warrant with respect to the exercise thereof, the Borrower shall pay to such Conversion Warrantholder all accrued and unpaid interest (including all accrued and unpaid PIK interest thereon) and fees (if any) on the principal amount of the Note so delivered as

payment of such Purchase Price.

Section 2.03 Interest. (a) Rate. Pursuant to the Original Agreement, the Loan has borne interest on the principal amount thereof from time to time outstanding, from July 11, 2002, and, pursuant to this Agreement, shall continue to bear interest on the principal amount thereof from time to time outstanding, until such principal amount becomes due, at an interest rate per annum equal to 10%.

(b) Default Interest. To the extent permitted by law, upon the occurrence and during the continuance of an Event of Default, the principal of, and all accrued and unpaid interest on, the Loan and all fees, indemnities or any other Obligations of the Loan Parties under this Agreement and the other Loan Documents, shall bear interest, from the date such Event of Default occurred until the date such Event of Default is cured or waived in writing in accordance herewith, at a rate per annum equal at all times to the Post-Default Rate.

(c) Interest Payment. Interest on the Loan shall be payable quarterly in arrears, on the last day of January, April, July and October in each year (commencing, as to this Agreement, on July 31, 2005, which payment shall include unpaid interest accrued under the Original Agreement through the Effective Date) and on the Final Maturity Date (whether upon demand, by acceleration or otherwise), at the option of the Borrower, either (i) entirely in cash, or (ii) in a combination of cash and PIK Interest (the amount of any such PIK Interest shall be accrued and added to the outstanding principal amount of the Loan quarterly in arrears and shall be payable at Final Maturity), provided, however, that at least 50% of the interest payable at any time shall be paid in cash. The Borrower shall give the Agent and each of the Lenders prior telephonic notice (immediately confirmed in writing in substantially the form of Exhibit C to the Original Agreement (a "Notice of Election")) not later than two
(2) Business Days prior to any date on which a payment of interest is required pursuant to this Section 2.03(c), specifying the amount of interest to be paid in cash and the amount to be paid in PIK Interest. Such Notice of Election shall be irrevocable. Notwithstanding anything to the contrary contained herein, interest at the Post-Default Rate shall be payable in cash on demand.

(d) General. All interest shall be computed on the basis of a year of 360 days for the actual number of days, including the first day but excluding the last day, elapsed.

Section 2.04 Prepayment of Loan.

(a) (i) Optional Prepayment. Prior to June 10, 2007, the Borrower shall not have any right to prepay the Loan. After June 10, 2007, and subject in all respects to the limitations contained in the Revolving Credit Facility and the Intercreditor Agreement as in effect on the Effective Date, the Borrower may, upon at least 30, but not more than 60 Business Days' written notice to the Agent (such notice being irrevocable), stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given, the Borrower shall, prepay the Loan, in whole or in part, together with accrued interest to the date of such prepayment on the principal amount prepaid and any amounts owing in connection therewith; provided, however, that each partial prepayment shall be in an aggregate principal amount not less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof. Any portion of the

Loan that is prepaid may not be reborrowed, in whole or in part.

(ii) Mandatory Prepayment. Immediately upon the occurrence of a Permitted DSW Stock Sale pursuant to Section 6.02(c), the Borrower shall prepay the outstanding principal amount of the Loan and all other Obligations then outstanding hereunder in full in cash. Nothing contained in this subsection (ii) shall permit the Parent to dispose of any DSW Common Stock or shall permit any Loan Party or any of its Subsidiaries to make a Disposition of any property other than in accordance with Section 6.02(c).

(b) Interest and Fees. Any prepayment made pursuant to this
Section 2.04 shall be accompanied by accrued interest on the principal amount being prepaid to the date of prepayment, and if such prepayment would reduce the amount of the outstanding Loan to zero, such prepayment shall be accompanied by the payment of all fees accrued to such date pursuant to the terms of this Agreement.

(c) Cumulative Prepayments. Except as otherwise expressly provided in this Section 2.04, payments with respect to any subsection of this
Section 2.04 are in addition to payments made or required to be made under any other provision of this Agreement.

Section 2.05 Taxes. (a) All payments made by any Loan Party hereunder or under any other Loan Document shall be made without set-off, counterclaim, deduction or other defense. All such payments shall be made free and clear of and without deduction for any present or future income, franchise, sales, use, excise, stamp or other taxes, levies, imposts, deductions, charges, fees, withholdings, restrictions or conditions of any nature now or hereafter imposed, levied, collected, withheld or assessed by any jurisdiction (whether pursuant to Federal, state, local or foreign law) or by any political subdivision or taxing authority thereof or therein, and all interest, penalties or additional amounts, excluding taxes on the net income of any Lender or the Agent imposed by the jurisdiction in which such Lender or such Agent is organized or any political subdivision thereof or taxing authority thereof or any jurisdiction in which such Person's principal office is located or any political subdivision thereof or taxing authority thereof (such nonexcluded taxes, levies, imposts, deductions, charges, fees, withholdings, restrictions, conditions, interest, penalties and additional amounts being hereinafter collectively referred to as "Taxes"). If any Loan Party shall be required to deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any other Loan Document:

(i) the amount so payable shall be increased so that after making all required deductions and withholdings (including Taxes on amounts payable pursuant to this sentence) the Lenders or the Agent, as the case may be, receive an amount equal to the sum they would have received had no such deduction or withholding been made;

(ii) such Loan Party shall make such deduction or withholding;

(iii) such Loan Party shall pay the full amount deducted or withheld to the relevant taxation authority in accordance with Applicable Law; and

(iv) whenever any Taxes are payable by any Loan Party, as promptly as possible thereafter, such Loan Party shall send the Lenders and the Agent an official receipt (or, if an official receipt is not available, such other documentation as shall be satisfactory

to the Lenders or the Agent, as the case may be) evidencing payment of the amount or amounts so deducted or withheld. In addition, each Loan Party agrees to pay any present or future taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery, performance, recordation or filing of, or otherwise with respect to, this Agreement or any other Loan Document other than the foregoing excluded taxes (hereinafter referred to as "Other Taxes").

(b) The Loan Parties hereby jointly and severally agree to indemnify and hold the Lenders and the Agent harmless from and against Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.05) paid by any Lender or the Agent and any liability (including penalties, interest and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. Such indemnification shall be paid within 10 days from the date on which any the Agent, on behalf of the Lenders, makes written demand therefor, which demand shall identify in reasonable detail the nature and amount of such Taxes or Other Taxes.

(c) Each Lender that is organized in a jurisdiction outside the United States hereby agrees that it shall, no later than the Effective Date or, in the case of a Lender which becomes a party hereto pursuant to Section 12.07 hereof after the Effective Date, the date upon which such Lender becomes a party hereto (and from time to time thereafter upon the reasonable request of the Borrower or the Agent, but only if such Lender is legally able to do so), deliver to the Borrower and the Agent either (i) two accurate, complete and signed copies of either (x) U.S. Internal Revenue Service Form W-8ECI or successor form, or (y) U.S. Internal Revenue Service Form W-8BEN or successor form, in each case, indicating that such Lender is on the date of delivery thereof entitled to receive payments of interest hereunder free from, or subject to a reduced rate of, withholding of United States Federal income tax or (ii) in the case of such a Lender that is entitled to claim exemption from withholding of United States Federal income tax under Section 871(h) or Section 881(c) of the Internal Revenue Code, (x) a certificate to the effect that such Lender is (A) not a "bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (B) not a "10 percent shareholder" of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code and (C) not a controller foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Internal Revenue Code and (y) two accurate, complete and signed copies of U.S. Internal Revenue Service Form W-8BEN or successor form.

(d) If any Loan Party fails to perform any of its obligations under this Section 2.05, the Loan Parties shall indemnify the Lenders and the Agent for any taxes, interest or penalties that may become payable as a result of any such failure. The obligations of the Loan Parties under this Section 2.05 shall survive the termination of this Agreement and the payment of the Loan and all other amounts payable hereunder.

ARTICLE III

FEES, PAYMENTS AND OTHER COMPENSATION

Section 3.01 Audit and Collateral Monitoring Fees. The Key Loan Parties acknowledge that representatives of the Agent may visit any or all of the Loan Parties and/or conduct audits, inspections and valuations of any or all of the Loan Parties in accordance with the terms and conditions set forth in Sections 7.02 and 7.09. The Borrower agrees to pay the costs and expenses of such visits, audits, inspections and valuations, whether conducted by the Agent itself or by third-party representatives of the Agent.

Section 3.02 Payments; Computations and Statements. (a) The Borrower will make each payment under this Agreement not later than 12:00 noon (New York City time) on the day when due, in lawful money of the United States of America and in immediately available funds, in the manner set forth in clause (b) below. All payments received after 12:00 noon (New York City time) on any Business Day will be credited on the next succeeding Business Day. All payments shall be made by the Borrower without set-off, counterclaim, deduction or other defense to the Agent and the Lenders. Whenever any payment to be made under any such Loan Document shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall in such case be included in the computation of interest or fees, as the case may be. All computations of fees shall be made by the Agent on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such fees are payable. Each determination by the Agent of an interest payment amount or fees hereunder shall be rebuttably presumed to be accurate, in the absence of manifest error.

(b) (i) Other than during the continuance of an Event of Default, the Borrower shall make each payment relating to the payment of principal and interest in respect of the Loan directly to the Lender's Account of each Lender to whom payment is required to be made, in like funds and in accordance with each Lender's Pro Rata Share of such payment. The Borrower shall make all other payments under this Agreement to the Agent's Account for distribution to the Lenders in accordance with clause (iii) below.

(ii) Upon the occurrence and during the continuance of an Event of Default, the Borrower shall make all payments under this Agreement to the Agent's Account for distribution to the Lenders in accordance with clause
(iii) below.

(iii) Upon the receipt of any payment under this Agreement, the Agent will promptly (and in any case, not later than five (5) Business Days) thereafter, cause to be distributed to the Lenders to whom payment is required to be made, (A) in the case of payments relating to principal and interest, in like funds in accordance with their Pro Rata Shares, and (B) in the case of the payment of any other amount payable to any Lender, in like funds; provided, however, that this clause shall not apply to any payment made under this Agreement that is solely for the account of the Agent.

(c) The Agent shall provide the Borrower, promptly after the end of each calendar month, a summary statement (in the form from time to time used by the Agent) of

the amounts and dates of all payments on account of the Loan to the Borrower during such month, the amount of interest accrued on the Loan to the Borrower during such month, the amount of PIK Interest added to the principal of the Loan during such month, and the amount and nature of any other fees, commissions, expenses and other Obligations incurred during such month. All entries on any such statement shall be presumed to be correct and, thirty (30) days after the same is sent, shall be rebuttably presumed to be accurate, absent manifest error. For purposes of such statement, the Agent shall have the right to conclude, absent evidence to the contrary (i) that no payments have been made by the Borrower and no requests for payments have been made to the Borrower by any Lender other than in accordance with this Agreement, and (ii) all payments of principal and interest required to be made directly to any Lender's Account have been made pursuant to the terms of this Agreement.

Section 3.03 Sharing of Payments, Etc. Except as provided in Sections 2.02 and 3.02(b) hereof, if any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of any Obligation in excess of its ratable share of payments on account of similar obligations obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in such similar obligations held by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender of any interest or other amount paid by the purchasing Lender in respect of the total amount so recovered). The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this
Section 3.03 may, to the fullest extent permitted by law, exercise all of its rights (including the Lender's right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.

Section 3.04 Apportionment of Payments. Subject to Section 2.02 hereof and to any written agreement among the Agent and/or the Lenders:

(a) All payments of principal, interest and PIK Interest in respect of the outstanding portion of the Loan, all payments of fees and all other payments in respect of any other Obligations, shall be allocated by the Agent among such of the Lenders as are entitled thereto, in proportion to their respective Pro Rata Shares or otherwise as provided herein or, in respect of payments not made on account of the Loan, as designated by the Person making payment when the payment is made.

(b) After the occurrence and during the continuance of an Event of Default, the Agent may apply all payments in respect of any Obligations and all proceeds of the Collateral, subject to the provisions of this Agreement,
(i) first, ratably to pay the Obligations in respect of any fees, expense reimbursements, indemnities and other amounts then due to the Agent until paid in full; (ii) second, ratably to pay the Obligations in respect of any fees and indemnities then due to the Lenders until paid in full; (iii) third, ratably to pay interest due in respect of the Loan until paid in full; (iv) fourth, ratably to pay PIK Interest due in respect of the

Loan until paid in full; (v) fifth, ratably to pay the principal of the Loan until paid in full; and (viii) sixth, to the ratable payment of all other Obligations then due and payable.

(c) In each instance, so long as no Event of Default has occurred and is continuing, Section 3.04(b) shall not be deemed to apply to any payment by the Borrower specified by the Borrower to the Agent to be for the prepayment of all or part of the principal of the Loan in accordance with the terms and conditions of Section 2.04.

(d) For purposes of Section 3.04(b), "paid in full" with respect to interest shall include interest accrued after the commencement of any Insolvency Proceeding irrespective of whether a claim for such interest is allowable in such Insolvency Proceeding.

(e) In the event of a direct conflict between the priority provisions of this Section 3.04 and other provisions contained in any other Loan Document, it is the intention of the parties hereto that both such priority provisions in such documents shall be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 3.04 shall control and govern.

Section 3.05 Increased Costs and Reduced Return. (a) If any Lender or the Agent shall have determined that the adoption or implementation of, or any change in, any law, rule, treaty or regulation, or any policy, guideline or directive of, or any change in, the interpretation or administration thereof by, any court, central bank or other administrative or Governmental Authority, or compliance by any Lender or the Agent or any Person controlling any such Lender or the Agent with any directive of, or guideline from, any central bank or other Governmental Authority or the introduction of, or change in, any accounting principles applicable to any Lender or the Agent or any Person controlling any such Lender or the Agent (in each case, whether or not having the force of law), shall (i) subject any Lender or the Agent, or any Person controlling any such Lender or the Agent to any tax, duty or other charge with respect to this Agreement or any Loan made by such Lender or the Agent, or change the basis of taxation of payments to any Lender or the Agent or any Person controlling any such Lender or the Agent of any amounts payable hereunder (except for taxes on the overall net income of any Lender or the Agent or any Person controlling any such Lender or the Agent), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against any Loan, or against assets of or held by, or deposits with or for the account of, or credit extended by, any Lender or the Agent or any Person controlling any such Lender or the Agent or
(iii) impose on any Lender or the Agent or any Person controlling any such Lender or the Agent or any other condition regarding this Agreement or any Loan, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to any Lender or the Agent of making any Loan, or agreeing to make any Loan, or to reduce any amount received or receivable by any Lender or the Agent hereunder, then, within ten (10) days after demand and receipt of a detailed calculation and statement of cause by the Agent, on behalf of the affected Lenders, the Borrower shall pay to the Agent, for the benefit of the affected Lenders, such additional amounts as will compensate such Lenders for such increased costs or reductions in amount.

(b) If any Lender or the Agent shall have determined that any Capital Guideline or the adoption or implementation of, or any change in, any Capital Guideline by the

Governmental Authority charged with the interpretation or administration thereof, or compliance by any Lender or the Agent or any Person controlling such Lender or the Agent with any Capital Guideline or with any request or directive of any such Governmental Authority with respect to any Capital Guideline, or the implementation of, or any change in, any applicable accounting principles (in each case, whether or not having the force of law), either (i) affects or would affect the amount of capital required or expected to be maintained by any Lender or the Agent or any Person controlling such Lender or the Agent, and any Lender or the Agent determines that the amount of such capital is increased as a direct or indirect consequence of any Loan made or maintained, or any guaranty or participation with respect thereto, any Lender's or the Agent's or any such other controlling Person's other obligations hereunder; or (ii) has or would have the effect of reducing the rate of return on any Lender's or the Agent's any such other controlling Person's capital to a level below that which such Lender or the Agent or such controlling Person could have achieved but for such circumstances as a consequence of any Loan made or maintained, or any guaranty or participation with respect thereto or any agreement to make Loan, or such Lender's or the Agent's or such other controlling Person's other obligations hereunder (in each case, taking into consideration, such Lender's, Agent's or other controlling Person's policies with respect to capital adequacy), then, within ten (10) days after demand and receipt of a detailed calculation and statement of cause by the Agent, on behalf of the affected Lenders, the Borrower shall pay to the Agent, for the benefit of such affected Lenders, from time to time such additional amounts as will compensate such Lenders for such cost of maintaining such increased capital or such reduction in the rate of return on such Lender's or the Agent's or such other controlling Person's capital.

(c) All amounts payable under this Section 3.05 shall bear interest from the date that is ten (10) days after the date of demand by any Lender or the Agent until payment in full to such Lender or the Agent at the Reference Rate. A certificate of the Agent, on behalf of the affected Lenders, claiming compensation under this Section 3.05, specifying the event herein above described and the nature of such event shall be submitted by the Agent, on behalf of the affected Lenders, to the Borrower, setting forth the additional amount due and an explanation of the calculation thereof, and the Agent's reasons for invoking the provisions of this Section 3.05, and shall be rebuttably presumed to be correct, absent manifest error.

(d) If any Lender incurs increased costs and requests compensation under this Section 3.05, then the Borrower may (i) request such Lender use reasonable efforts to designate a different lending office for booking its loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches, or Affiliates, if in the judgment of such Lender, such designation or assignment (A) would eliminate or reduce amounts payable pursuant to Section 3.05 hereof, and (B) would not subject such Lender to any unreimbursed cost or expense, and would not otherwise be disadvantageous to such Lender. The Borrower shall pay all reasonable costs and expenses incurred by such Lender in connection with any such designation of assignment; and (ii) at its sole expense and effort, upon notice to such Lender and the Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 12.07), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that (A) if such assignee is not an existing Lender, the Borrower shall have received the prior written consent of the Agent, which consent shall not unreasonably be withheld, (B) such Lender shall have received payment of an

amount equal to the outstanding principal of its Pro Rata Share of the Loan, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts, which shall be paid to the Agent for distribution to such Lender) and (C) such assignment will result in a reduction in such compensation, payments or costs. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

ARTICLE IV

CONDITIONS TO EFFECTIVENESS; CONSENT TO IPO

Section 4.01 Conditions Precedent to Effectiveness. This Agreement shall become effective as of the Business Day (the "Effective Date") when each of the following conditions precedent shall have been satisfied (or waived) in a manner satisfactory to the Agent:

(a) Payment of Fees, Etc. The Borrower shall have paid to the Agent and the Lenders on or before the date of this Agreement, in immediately available funds, all fees, costs, expenses and taxes (including, without limitation, fees, costs, expenses and taxes incurred in connection with the IPO) then payable pursuant to the Original Agreement and pursuant to this Agreement.

(b) Representations and Warranties; No Event of Default. The following statements shall be true and correct: (i) the representations and warranties contained in Article V and in each other Loan Document, certificate or other writing delivered to the Agent or any Lender pursuant hereto or thereto on or prior to the Effective Date are true and correct on and as of the Effective Date as though made on and as of such date; and (ii) no Default or Event of Default shall have occurred and be continuing on the Effective Date or would result from this Agreement or the other Loan Documents becoming effective in accordance with its or their respective terms.

(c) Legality. Amending and restating this Agreement and maintaining of the Loan shall not contravene any law, rule or regulation applicable to the Agent or any Lender.

(d) Delivery of Documents. The Agent shall have received on or before the Effective Date, the following, each in form and substance reasonably satisfactory to the Agent and the Lenders, and, unless indicated otherwise, dated the Effective Date, and all conditions precedent to the effectiveness of such documents (where applicable) shall have been satisfied or waived:

(i) the Warrants, issued in favor of each Warrantholder and duly executed by the Parent (which shall be exchanged for the existing Warrants held by each such Warrantholder);

(ii) the Conversion Warrants, issued in favor of each Conversion Warrantholder and duly executed by the Parent;

(iii) the Registration Rights Agreement, duly executed by the Parent, the Warrantholders and the Conversion Warrantholders;

(iv) the DSW Registration Rights Agreement, duly executed by DSW, the Warrantholders and the Conversion Warrantholders;

(v) to the extent not already held by the Agent, the original stock certificates or other certificated securities or instruments representing all of the Capital Stock of such Loan Parties' Subsidiaries, the Capital Stock of DSW held by the Parent following the IPO and all intercompany promissory notes of such Loan Parties (including the RVI Note and the DSW Note), accompanied by undated stock powers executed in blank and other proper instruments of transfer;

(vi) to the extent required, amendments to Control Agreements, duly executed by each of the parties thereto;

(vii) Intercreditor Agreement, duly executed by the Agent and the Revolving Credit Agent, and acknowledged by the Loan Parties;

(viii) opinions of Simpson Thacher & Bartlett LLP and the General Counsel of the Loan Parties and DSW, dated as of the Effective Date, substantially in the form of Exhibit E-1 and Exhibit E-2 respectively;

(ix) copies of the Revolving Credit Facility Documents, the RVI Note and the RVI Pledge, in each case, duly executed by each of the parties thereto, reasonably satisfactory in form and substance to the Agent, and certified as true and correct copies thereof by an Authorized Officer of the Parent;

(x) a copy of the resolutions of each Loan Party and DSW, certified by an Authorized Officer thereof, authorizing (A) the transactions contemplated by the Loan Documents to which such Person is or will be a party, (B) the execution, delivery and performance by such Person of each Loan Document to which such Person is or will be a party and the execution and delivery of the other documents to be delivered by such Person in connection herewith and therewith, and (C) the IPO and the transactions contemplated thereby;

(xi) a certificate of the appropriate official(s) of the state of organization and each state of foreign qualification of each Loan Party, DSW and DSWSW, certifying as to the subsistence in good standing of, and the payment of taxes by, such Person in such states;

(xii) a true and complete copy of the charter, certificate of formation, certificate of limited partnership or other publicly filed organizational document of each Loan Party, DSW and DSWSW, certified as of a recent date not more than thirty (30) days prior to the Effective Date (except as otherwise agreed by the Agent) by an appropriate official of the state of organization of such Person, which shall set forth the same complete name of such Person as is set forth herein and the organizational number, if an organizational number is issued in such jurisdiction, and Federal employee identification number as of the Effective Date of such Person;

(xiii) a copy of the by-laws, limited liability company agreement, operating agreement, agreement of limited partnership or other organizational document of each Loan Party, DSW and DSWSW, together with all amendments thereto, certified as of the Effective Date by an Authorized Officer of such Person;

(xiv) a certificate of an Authorized Officer of each Loan Party and DSW, certifying the names and true signatures of the representatives of such Person authorized to sign each Loan Document to which such Person is or will be a party and the other documents to be executed and delivered by such Person in connection herewith and therewith, together with evidence of the incumbency of such Authorized Officers;

(xv) a certificate of an Authorized Officer of the Parent certifying that each of the Material Contracts remains in full force and effect in all material respects and that none of the Loan Parties has breached or defaulted on, or is reasonably likely to breach or default on, any of its obligations under such agreements in any material respect, as a result of the IPO or otherwise;

(xvi) certificate of the chief financial officer of each Loan Party, certifying as to the Solvency of the Loan Parties taken as a whole, both before and after giving effect to the IPO and the transactions contemplated hereby and thereby, which certificate shall be satisfactory in form and substance to the Agent;

(xvii) a certificate of an Authorized Officer of each Loan Party, certifying as to the matters set forth in subsection (b) of this
Section 4.01 and the satisfaction of each of the conditions set forth in Section 4.02 hereof;

(xviii) evidence of the insurance coverage required by
Section 6.01 and the terms of each Security Agreement and each Mortgage and such other insurance coverage with respect to the business and operations of the Loan Parties as the Agent may reasonably request, in each case, where requested by the Agent, with such endorsements as to the named insureds or loss payees thereunder as the Agent may reasonably request and providing that such policy may be terminated or canceled (by the insurer or the insured thereunder) only upon thirty (30) days' prior written notice to the Agent and each such named insured or loss payee, together with evidence of the payment of all premiums due in respect thereof for such period as the Agent may request;

(xix) release documents, duly executed by the Revolving Credit Agents, accompanied by appropriate UCC financing statement amendments, in form and substance satisfactory to the Agent, evidencing the release of the Lien granted in favor of the Revolving Credit Agents with respect to the Capital Stock of DSW;

(xx) a copy of the Business Plan, certified as true and correct by an Authorized Officer of the Borrower; and

(xxi) such other agreements, instruments, approvals, opinions and other documents, each satisfactory to the Agent in form and substance, as the Agent deems, in its reasonable business judgment, to be necessary hereunder.

(e) Material Adverse Effect. The Agent shall have determined, in its sole judgment (acting reasonably), that no event or development shall have occurred since January 29, 2005 which could reasonably be expected to have a Material Adverse Effect.

(f) Approvals. All consents, authorizations and approvals of, and filings and registrations with, and all other actions in respect of, any Governmental Authority or other Person (i) required in connection with amending this Agreement or the maintaining of the Loan, or (ii) materially required in connection with the conduct of the Loan Parties' business, shall have been obtained and shall be in full force and effect.

(g) Warrant Stock. DSW shall have reserved, out of its authorized and unissued Class A Shares, solely for the purpose of permitting the Parent to comply with its obligations under the Warrants and the Conversion Warrants, _____ Class A Shares issuable upon the exercise of the Warrants or the Conversion Warrants to provide for the issuance of the Warrant Stock in accordance with the terms of the Warrants and the Conversion Warrants. The Common Stock and, following, the IPO, the Class A Common Shares shall have been listed on the New York Stock Exchange.

(h) Senior Indebtedness. The Obligations under this Agreement and the other Loan Documents rank at least pari passu in right of payment to all existing and future senior Indebtedness and senior to all other Indebtedness of each Loan Party.

(i) Consummation of IPO. The IPO shall have been consummated in accordance with each of the conditions set forth in Section 4.02 below, as determined by the Agent in its sole discretion, exercised reasonably.

Section 4.02 Consent to IPO. The Agent and the Lenders hereby consent to the consummation of the IPO; provided that each of the following conditions has been satisfied or waived:

(a) The IPO shall constitute a Qualifying IPO;

(b) On the IPO Effective Date, the Net Cash Proceeds of the IPO shall be immediately applied (i) by DSW to repay to Parent in full the obligations outstanding under the DSW Note, (ii) by Parent to repay to the Borrower a portion of the obligations outstanding under the RVI Note, and (iii) by the Borrower to repay in full (x) all Obligations (as defined in the Term Loan Agreement) outstanding under the Term Loan Agreement and (y) $25,000,000 of the principal amount of the Old Notes under the Original Agreement, in each case, in immediately available funds;

(c) Following prepayment by the Borrower in full of all of the Obligations (as defined in the Term Loan Agreement) outstanding under the Term Loan Agreement, the Term Loan Agreement shall be terminated (other than with respect to the provisions thereof that expressly survive the termination thereof);

(d) Each of the conditions precedent to the effectiveness of
(i) this Agreement set forth in Section 4.01 hereof shall be satisfied or waived, as determined by the Agent in its sole discretion, exercised reasonably, and (ii) the amendment of the Revolving Loan

Documents shall be satisfied to the satisfaction of the Agent and the agents and the lenders thereunder;

(e) The IPO shall be consummated in accordance with all requirements of Applicable Law and on terms and conditions reasonably satisfactory to Agent, (it being acknowledged that the terms of the IPO set forth in the Form S-1 filed with the SEC on June 15, 2005 (without giving effect to any subsequent amendments thereto), are satisfactory to the Agent) and all consents, authorizations and approvals of, and filings and registrations with, and all other actions in respect of, any Governmental Authority or other Person required in connection with the IPO shall have been obtained and shall be in full force and effect; and

(f) The Agent shall have received, immediately prior to the consummation of the IPO, a certificate of an Authorized Officer of each Loan Party, in form and substance satisfactory to the Agent, certifying that each of the conditions set forth in this Section 4.02 has been, or concurrently with the consummation of the IPO will be, satisfied.

Section 4.03 Release of DSW and DSWSW. Following the satisfaction (or waiver) of each of the conditions set forth in Sections 4.01 and 4.02 hereof, DSW and DSWSW shall be released and discharged from any liability under the Original Agreement and each of the other Loan Documents to which it is a party pursuant to the Original Agreement, other than liabilities under such Loan Documents that expressly survive the termination thereof and all liens and security interests granted by DSW and DSWSW to secure the Obligations shall be released and discharged and the Parent, DSW and DSWSW are hereby authorized, in the Agent's name, to file UCC-3 termination statements and such other documents, instruments and releases with respect to any mortgages, liens, encumbrances or other security interests on any property of DSW and DSWSW to evidence the release provided by this Section 4.03. Upon satisfaction of each of the conditions set forth in Sections 4.01 and 4.02 hereof, the Agent (at the expense of the Parent) hereby agrees (A) to execute and deliver to the Parent, DSW and DSWSW such instruments and documents in form and substance reasonably satisfactory to the Parent and the Agent, which are reasonably requested by the Parent, for the purpose of effecting the intent of this Section 4.03 including, without limitation, to release of record any and all liens and security interests and collateral and to terminate with respect to DSW and DSWSW any and all control agreements, lockbox agreements, landlord's or similar waivers and like documents (B) to return to DSW and DSWSW all certificates of and stock powers with respect to DSWSW, pledged promissory notes of DSW and DSWSW and other physical collateral provided by DSW and DSWSW to, and held by, the Agent pursuant to the Loan Documents, and (C) to return to the Parent any certificate representing the Capital Stock of DSW permitted to be sold pursuant to the IPO (together with any applicable stock power). This release does not and shall not affect (a) any of the obligations or liabilities of the other Loan Parties under this Agreement, the Original Agreement or any other Loan Document, or (b) any of the obligations of DSW under any of the Loan Documents to which it is a party under this Agreement.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Section 5.01 Representations and Warranties. Each Loan Party hereby

represents and warrants to the Agent and the Lenders as follows:

(a) Organization; Good Standing, Etc. Each of the Loan Parties, DSW and DSWSW (i) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the state or jurisdiction of its organization; (ii) has all requisite power and authority to conduct its business as now conducted and as presently contemplated and, to execute and deliver each Loan Document to which it is a party, and to consummate the transactions contemplated thereby; and
(iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except where the failure to so qualify is not reasonably likely to have a Material Adverse Effect.

(b) Authorization, Etc. The execution, delivery and performance by each Loan Party and DSW of each Loan Document to which it is or will be a party (i) have been duly authorized by all necessary action; (ii) do not and will not contravene in any material respect its charter or by-laws, its limited liability company or operating agreement or its certificate of partnership or partnership agreement, as applicable, or any Applicable Law or any contractual restriction binding on or otherwise affecting it or any of its properties; (iii) do not and will not result in or require the creation of any Lien upon or with respect to any of its properties; and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to its operations or any of its properties.

(c) Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required in connection with (i) the due execution, delivery and performance by any Loan Party or DSW of any Loan Document to which it is or will be a party, or
(ii) in connection with the IPO.

(d) Enforceability of Loan Documents. This Agreement is, and each other Loan Document to which any Loan Party or DSW is or will be a party, when delivered hereunder, will be, a legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or limiting creditors' rights generally or by equitable principles relating to enforceability.

(e) Capitalization; Subsidiaries. On the Effective Date, after giving effect to the transactions contemplated hereby to occur on the Effective Date, the authorized Capital Stock of the Parent and DSW and the issued and outstanding Capital Stock of the Parent and DSW are as set forth on Schedule
5.01(e)(i). All of the issued and outstanding shares of Capital Stock of the Parent and DSW have been validly issued and are fully paid and nonassessable, and the holders thereof are not entitled to any preemptive, first refusal or other similar rights. With respect to the Parent, there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Warrant Stock, except for anti-dilution provisions which have been validly waived on or prior to the date hereof in respect of the issuance of the Warrant Stock. The Warrant Stock has been duly authorized and reserved (or in the case of the DSW Common Stock, has been issued) for issuance upon the

exercise of the Warrants and the Conversion Warrants, and upon such exercise, will be validly issued, fully paid and non-assessable, free from all taxes, liens and charges with respect to the issue thereof, and will not be subject to preemptive rights or other similar rights of stockholders of the Parent, DSW or any other Person.

(i) Except as described on Schedule 5.01(e)(i), as of the Effective Date, there are no outstanding debt or equity securities of the Parent, DSW or any of their respective Subsidiaries and no outstanding obligations of the Parent, DSW or any of their respective Subsidiaries convertible into or exchangeable for, or warrants, options or other rights for the purchase or acquisition from the Parent, DSW or any of their respective Subsidiaries, or other obligations of the Parent, DSW or any of their respective Subsidiaries to issue, directly or indirectly, any shares of Capital Stock of the Parent, DSW or any of their respective Subsidiaries.

(ii) Schedule 5.01(e)(ii) is a complete and correct description of the name, jurisdiction of incorporation and ownership of the outstanding Capital Stock of each of the Subsidiaries of the Parent and DSW in existence on the Effective Date. All of the issued and outstanding shares of Capital Stock of the Subsidiaries of the Parent have been validly issued and are fully paid and nonassessable, and the holders thereof are not entitled to any preemptive, first refusal or other similar rights. Except as indicated on such Schedule, all such Capital Stock is owned by the Parent, DSW or one or more of their respective wholly-owned Subsidiaries, free and clear of all Liens other than in the case of the DSW Common Stock held by the Parent, Liens permitted pursuant to clause (xvi) of the definition of Permitted Liens, and in the case of the Capital Stock of Subsidiaries of DSW, such Liens as may exist from time to time.

(f) Litigation; Commercial Torts Claims. Schedule 5.01(f) sets forth all material actions, suits or proceedings affecting any Loan Party, DSW or DSWSW before any court or other Governmental Authority or any arbitrator as of the Effective Date. There is no pending or, to the best knowledge of any Loan Party, threatened action, suit or proceeding affecting any Loan Party, DSW or DSWSW before any court or other Governmental Authority or any arbitrator that (A) if adversely determined, could reasonably be expected to have a Material Adverse Effect, (B) relates to this Agreement or any other Loan Document or any transaction contemplated hereby or thereby or (C) relates to the IPO or any transaction contemplated thereby, including, in each case, those items set forth on Schedule 5.01(f). Except as set forth on Schedule 5.01(f), as of the Effective Date, none of the Loan Parties holds any Commercial tort claims in respect of which a claim has been filed in a court of law or a written notice by an attorney has been given to a potential defendant.

(g) Except as set forth in Schedule 5.01(f), (i) there is no pending or, to the best knowledge of any Loan Party, threatened action, suit or proceeding affecting any Loan Party, DSW or DSWSW before any court or other Governmental Authority or any arbitrator that (A) if adversely determined, could have a Material Adverse Effect, (B) relates to this Agreement or any other Loan Document or any transaction contemplated hereby or thereby and (ii) as of the Effective Date, none of the Loan Parties holds any commercial tort claims in respect of which a claim has been filed in a court of law or a written notice by an attorney has been given to a potential defendant, or (C) relates to the IPO or any transaction contemplated thereby.

(h) Financial Condition.

(i) All financial statements furnished to the Agent and to each Lender by the Loan Parties on a consolidated basis have been prepared in accordance with GAAP consistently applied (provided, however, that unaudited financial statements are subject to normal year-end adjustments and to the absence of footnotes). All financial statements furnished to the Agent and to each Lender by the Loan Parties present fairly the condition of the Loan Parties at the date(s) thereof and the results of operations and cash flows (to the extent cash flows are required to be prepared) for the period(s) covered (provided, however, that unaudited financial statements are subject to normal year end adjustments and to the absence of footnotes). There has been no change in the consolidated financial condition, results of operations, or cash flows of the Loan Parties since the date(s) of such financial statements, other than changes in the ordinary course of business, which changes have not been materially adverse, either singularly or in the aggregate.

(ii) No Loan Party has any material Contingent Obligations or material obligation under any Lease or Capitalized Lease which is not noted in the Loan Parties' Consolidated financial statements furnished to the Agent and to each Lender prior to the execution of this Agreement.

(iii) The prospectus and the registration statement filed with the SEC in connection with the IPO (A) conform in all material respects to the requirements of the Securities Act and (B) do not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(i) Compliance with Law, Etc. None of DSW, DSWSW or any Loan Party is, or as a result of the consummation of the transactions contemplated by the IPO, will be, in violation or has received notice of any violation of its organizational documents, any law, rule, regulation, judgment or order of any Governmental Authority applicable to it or any of its property or assets, or any material term of any agreement or instrument (including, without limitation, any Material Contract) binding on or otherwise affecting it or any of its properties, except where such violation is not reasonably likely to have a Material Adverse Effect and no default or event of default has occurred and is continuing.

(j) ERISA. Except to the extent that such action is not reasonably likely to have a Material Adverse Effect, none of DSW, DSWSW, any Loan Party or any of their respective ERISA Affiliates has within the past three
(3) years, or as a result of the consummation of the transactions contemplated by the IPO, will have:

(i) violated or failed to be in full compliance with any Loan Party's Employee Benefit Plan;

(ii) failed timely to file all reports and filings required by ERISA to be filed by any Loan Party;

(iii) engaged in any nonexempt "prohibited transactions" or "reportable events" (respectively as described in ERISA);

(iv) engaged in, or committed, any act such that a tax or penalty reasonably could be imposed upon any Loan Party on account thereof pursuant to ERISA;

(v) incurred any material accumulated funding deficiency within the meaning of ERISA;

(vi) terminated any Employee Benefit Plan such that a Lien could be asserted against any assets of any Loan Party on account thereof pursuant to ERISA; or

(vii) failed to make any required contribution or payment to, or made a complete or partial withdrawal from, any Employee Benefit Plan which is a multiemployer plan within the meaning of Section 4001(a) of ERISA.

(k) Taxes, Etc.

(i) To the best knowledge of the Loan Parties, all Federal and all material state and local tax returns and other reports required by Applicable Law to be filed by any Loan Party have been filed, or extensions have been obtained, and all taxes, assessments and other governmental charges imposed upon any Loan Party or any property of any Loan Party and which have become due and payable on or prior to the date hereof have been paid, except to the extent contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof on the Financial Statements in accordance with GAAP.

(ii) Except as described on Schedule 5.01(j):

(A) currently no Loan Party has received from any taxing authority any request to perform any examination of or with respect to any Loan Party nor any other written or verbal notice in any way relating to any claimed failure by any Loan Party to comply with all Applicable Law concerning payment of any taxes or other amounts in the nature of taxes in excess of $500,000 in any one instance;

(B) no agreement exists which waives or extends any statute of limitations applicable to the right of any taxing authority to assert a deficiency or make any other claim for or in respect to Federal income taxes; and

(C) no issue has been raised in any tax examination of any Loan Party which reasonably could be expected to result in the assertion of a deficiency for any fiscal year open for examination, assessment, or claim by any taxing authority in excess of $500,000 in the aggregate for all Loan Parties.

(iii) No material Federal, state or local tax liability will be imposed upon any Loan Party as a result of the IPO, or the transactions contemplated thereby.

(l) Regulations T, U and X. No Loan Party is or will be engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation T, U or X), and no proceeds of the Loan have been or will be used to

purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.

(m) Nature of Business. No Loan Party is engaged in any business other than a Permitted Business.

(n) Adverse Agreements, Etc. To the best of such Loan Party's knowledge, no Loan Party is a party to any agreement or instrument, or subject to any charter, limited liability company agreement, partnership agreement or other corporate, partnership or limited liability company restriction or any judgment, order, regulation, ruling or other requirement of a court or other Governmental Authority, which is reasonably likely to have a Material Adverse Effect.

(o) Permits, Etc. Each Loan Party has, and is in compliance with, all permits, licenses, authorizations, approvals, entitlements and accreditations required for such Person lawfully to own, lease, manage or operate, or to acquire, each business currently owned, leased, managed or operated, or to be acquired, by such Person except where failure to so have or to so comply is not reasonably likely to have a Material Adverse Effect. No condition exists or event has occurred or as a result of the IPO, will occur, which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of any such permit, license, authorization, approval, entitlement or accreditation, and there is no claim that any of the foregoing are not in full force and effect.

(p) Properties. (i) Each Loan Party has, and following the IPO, will have, good and marketable title to, valid leasehold interests in, or valid licenses to use, all property and assets material to its business, free and clear of all Liens, except Permitted Liens. All such properties and assets are in good working order and condition, ordinary wear and tear excepted. No Loan Party has possession of any property on consignment to that Loan Party from a third party that is not a Loan Party, except as listed on Schedule 5.01(o)(i), and those as to which the Loan Parties notify the Agent in accordance with the provisions of Section 7.03.

(ii) Schedule 5.01(o)(ii) sets forth a complete and accurate list, as of the Effective Date, of the location, by state and street address, of all real property owned or leased by each Loan Party and the name and address of the landlord with respect thereto. As of the Effective Date, each Loan Party has valid leasehold interests in the Leases described on Schedule 5.01(o)(ii) to which it is a party. Except as otherwise indicated on Schedule 5.01(o)(ii), there are no Leases for which any Affiliate of any Loan Party is the lessor. Each such Lease is and following the IPO will be, valid and enforceable in accordance with its terms in all material respects and is in full force and effect. No consent or approval of any landlord or other third party in connection with any material Lease is necessary for any Loan Party to enter into and execute the Loan Documents to which it is a party, except as set forth on Schedule 5.01(o)(ii) or to consummate the transactions contemplated by the IPO. No Loan Party and to the best knowledge of any Loan Party, no other party to any material Lease is or will be, as a result of the transactions contemplated by the IPO, in material default of its obligations thereunder, and no Loan Party (or any other party to any such Lease) has at any time delivered or received any notice of default which remains uncured under any material Lease and, as of the Effective Date,

no event has occurred or will occur as a result of the IPO which, with the giving of notice or the passage of time or both, would constitute a material default under any material Lease.

(q) Full Disclosure. Each Loan Party has disclosed to the Agent all agreements, instruments and corporate or other restrictions to which it is subject, and all other matters known to it, that, individually or in the aggregate, is reasonably likely to result in a Material Adverse Effect. None of the documents, instruments, agreements, other reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Agent in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which it was made, not misleading; provided, that, with respect to projected financial information, each Loan Party represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. There is no contingent liability or fact that is reasonably likely to have a Material Adverse Effect which has not been set forth in a footnote included in the Financial Statements or a Schedule hereto.

(r) Leases. Schedule 5.01(q), annexed hereto, sets forth as of the Effective Date a schedule of all presently effective Capitalized Leases. (Schedule 5.01(o)(ii) includes a list of all other presently effective Leases). Each of such Leases and Capitalized Leases is or will be, as a result of the consummation of the IPO, in full force and effect. No Loan Party, to the best of its knowledge, is or will be, as a result of the consummation of the IPO, in default or violation of any such Leases or Capitalized Leases, except where such violation is not reasonably likely to have a Material Adverse Effect. No Loan Party has received any notice or threat of cancellation of any such Lease or Capitalized Lease, which cancellation (together with all other similar cancellations) is reasonably likely to have a Material Adverse Effect. Without limiting the foregoing, no default or violation shall arise under any Lease solely as a result of the assignment and transfer of such Lease in connection with the IPO, except where such default or violation is not reasonably likely to have a Material Adverse Effect.

(s) Environmental Matters. Except as set forth on Schedule 5.01(r), (i) the operations of each Loan Party are in material compliance with all Environmental Laws; (ii) to the best of each Loan Party's knowledge, there has been no Release at any of the properties owned or operated by any Loan Party or a predecessor in interest, or at any disposal or treatment facility which received Hazardous Materials generated by any Loan Party or any predecessor in interest which is reasonably likely to have a Material Adverse Effect; (iii) no Environmental Action has been asserted against any Loan Party or any predecessor in interest nor does any Loan Party have knowledge or notice of any threatened or pending Environmental Action against any Loan Party or any predecessor in interest which is reasonably likely to have a Material Adverse Effect; (iv) no Loan Party has knowledge of any Environmental Actions that have been asserted against any facilities that may have received Hazardous Materials generated by any Loan Party or any predecessor in interest which are reasonably likely to have a Material Adverse Effect; (v) to the best of each Loan Party's knowledge, no property now or formerly owned or operated by a Loan Party has been used as a treatment or disposal site for any Hazardous Material; (vi) no Loan Party has failed to report to the proper Governmental Authority any Release which is required to be so reported by any Environmental Laws which is reasonably likely to have a Material Adverse Effect; (vii) each Loan Party holds all licenses, permits and approvals required

under any Environmental Laws in connection with the operation of the business carried on by it, except for such licenses, permits and approvals as to which a Loan Party's failure to maintain or comply with is not reasonably likely to have a Material Adverse Effect; and (viii) no Loan Party has received any notification pursuant to any Environmental Laws that (A) any work, repairs, construction or capital expenditures are required to be made as a condition of continued compliance with any Environmental Laws, or any license, permit or approval issued pursuant thereto or (B) any license, permit or approval referred to above is about to be reviewed, made, subject to limitations or conditions, revoked, withdrawn or terminated, in each case, except as is not reasonably likely to have a Material Adverse Effect.

(t) Insurance. Schedule 5.01(s) sets forth a list of all insurance maintained by each Loan Party or under which any Loan Party is the named insured on the Effective Date. Each of such policies is in full force and effect and meets each of the requirements set forth in Section 6.01(e). To the best of such Loan Party's knowledge, neither the issuer of any such policy nor any Loan Party is in default or violation of such policy.

(u) [Intentionally Omitted]

(v) Solvency. After giving effect to the transactions contemplated by this Agreement and the IPO and before and after giving effect to each Loan and the IPO, each Loan Party is, and the Loan Parties on a consolidated basis are, Solvent.

(w) Location of Bank Accounts. Schedule 5.01(v) sets forth a complete and accurate list as of the Effective Date of all deposit, checking and other bank accounts, all securities and other accounts maintained with any broker dealer and all other similar accounts maintained by each Loan Party, together with a description thereof (i.e., the bank or broker dealer at which such deposit or other account is maintained, the account number and a contact person at such bank or broker dealer).

(x) Intellectual Property. Except as set forth on Schedule 5.01(w), each Loan Party both before and after giving effect to the IPO owns or licenses or otherwise has the right to use all material licenses, permits, patents, patent applications, trademarks, trademark applications, service marks, tradenames, copyrights, copyright applications, franchises, authorizations, non-governmental licenses and permits and other intellectual property rights that are necessary for the operation of its business, without infringement upon or conflict with the rights of any other Person with respect thereto, except for such infringements and conflicts which, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect. Set forth on Schedule 5.01(w) is a complete and accurate list as of the Effective Date of all such material licenses, permits, patents, patent applications, trademarks, trademark applications, service marks, tradenames, copyrights, copyright applications, franchises, authorizations, non-governmental licenses and permits and other intellectual property rights of each Loan Party. To the best knowledge of each Loan Party, both before and after giving effect to the IPO, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Loan Party infringes upon or conflicts with any rights owned by any other Person, and no claim or litigation regarding any of the foregoing is pending or threatened, except for such infringements and conflicts which are not reasonably likely to have a Material Adverse Effect. To the best knowledge of each Loan

Party, both before and after giving effect to the IPO, no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code is pending or proposed, which is reasonably likely to have a Material Adverse Effect.

(y) Material Contracts and Licenses. Schedule 5.01(x) sets forth a complete and accurate list as of the Effective Date of all Material Contracts and all material licenses of each Loan Party, showing the parties and subject matter thereof. Each such Material Contract and license both before and after giving effect to the IPO (i) is in full force and effect and is binding upon and enforceable against each Loan Party that is a party thereto and, to the best knowledge of such Loan Party, all other parties thereto in accordance with its terms, and (ii) is not in default due to or has not been violated by, the action of any Loan Party or, to the best knowledge of any Loan Party, any other party thereto, except where such default is not reasonably likely to have a Material Adverse Effect. Without limiting the foregoing, no default or violation shall arise under any such license or agreement solely as a result of the assignment and transfer of such license or agreement in connection with the IPO. No Loan Party has received any notice or threat of cancellation of any such Material Contract or license which cancellation (together with all similar cancellations) is reasonably likely to have a Material Adverse Effect.

(z) Holding Company and Investment Company Acts. None of the Loan Parties is (i) a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" of a "holding company", as such terms are defined in the Public Utility Holding Company Act of 1935, as amended; or (ii) an "investment company" or an "affiliated person" or "promoter" of, or "principal underwriter" of or for, an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended.

(aa) Labor Relations.

(i) As of the Effective Date, no Loan Party has been, and none is presently a party to any collective bargaining or other labor contract except as listed on Schedule 5.01(z), annexed hereto.

(ii) There is not presently pending and, to any Loan Party's knowledge, there is not threatened any of the following, except to the extent any of the following is not reasonably likely to have a Material Adverse Effect:

(A) any strike, slowdown, picketing, work stoppage, or employee grievance process;

(B) any proceeding against or affecting any Loan Party relating to the alleged violation of any Applicable Law pertaining to labor relations or before the National Labor Relations Board, the Equal Employment Opportunity Commission, or any comparable governmental body, organizational activity, or other labor or employment dispute against or affecting any Loan Party, which, if determined adversely to that Loan Party, is reasonably likely to have a Material Adverse Effect on that Loan Party;

(C) any lockout of any employees by any Loan Party (and no such action is contemplated by any Loan Party); or

(D) any application for the certification of a collective bargaining agent.

(iii) No event has occurred or circumstance exists which could provide the basis for any work stoppage or other labor dispute that would be reasonably likely to have a Material Adverse Effect.

(iv) Each Loan Party:

(A) has complied in all material respects with all Applicable Law relating to employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar taxes, occupational safety and health, and plant closing; and

(B) is not liable for the payment of compensation, damages, taxes, fines, penalties, or other amounts, however designated, for that Loan Party's failure to comply with any Applicable Law referenced in Section 5.01(z)(iv)(A) which is reasonably likely to have a Material Adverse Effect.

(bb) No Bankruptcy Filing. No Loan Party is contemplating either an Insolvency Proceeding or the liquidation of all or a major portion of such Loan Party's assets or property, and no Loan Party has any knowledge of any Person contemplating an Insolvency Proceeding against it.

(cc) Separate Existence. Except where the failure to observe, maintain or perform the following is not reasonably likely to have a Material Adverse Effect, all customary formalities regarding the corporate existence of each Loan Party will be observed.

(dd) Name; Jurisdiction of Organization; Organizational ID Number; Chief Place of Business; Chief Executive Office; FEIN. Schedule 5.01(cc) sets forth a complete and accurate list as of the Effective Date of (i) the exact legal name of each Loan Party; (ii) the jurisdiction of organization of each Loan Party; (iii) the organizational identification number of each Loan Party as of the Effective Date (or indicates that such Loan Party has no organizational identification number); (iv) each place of business of each Loan Party; (v) the chief executive office of each Loan Party; and (vi) the Federal employer identification number of each Loan Party as of the Effective Date.

(ee) Tradenames. Schedule 5.01(dd) hereto sets forth a complete and accurate list as of the Effective Date of (i) all names under which, to the knowledge of the Borrower, any Loan Party has conducted its business in the past five (5) years; and (ii) all Persons with whom any Loan Party has consolidated or merged, or from whom any Loan Party has acquired in a single transaction or in a series of related transactions substantially all of such Person's assets in the past five (5) years.

(ff) Location of Collateral. Except as permitted by Section 6.02(r), there is no location at which any Loan Party has any Collateral or the books, records and papers of the Loan Parties pertaining thereto other than (i) those locations listed on Schedule 5.01(ee) and (ii) at such other locations as to which the Borrower has provided ten (10) days prior written

notice to the Agent of the intended location of the Collateral, books, records and papers thereat. Schedule 5.01(ee) hereto contains a true, correct and complete list, as of the Effective Date, of the legal names and addresses of each warehouse at which Collateral of each Loan Party is stored and/or the name and address of the landlord on the Lease which covers such location and of all service bureaus with which such records are maintained. None of the receipts received by any Loan Party from any warehouse states that the goods covered thereby are to be delivered to bearer or to the order of a named Person or to a named Person and such named Person's assigns. No tangible personal property of any Loan Party is in the care or custody of any third party or stored or entrusted with a bailee or other third party, except (x) as otherwise disclosed pursuant to, or permitted by this Section, or (y) for Inventory in an amount not to exceed $1,000,000 at Cost (as defined in the Revolving Credit Facility) in the aggregate at any time in the ordinary course of business.

(gg) Security Interests. Each Security Agreement creates in favor of the Agent, for the benefit of the Lenders, a legal, valid and enforceable security interest in the Collateral secured thereby. Upon the filing of the UCC financing statements described in the Original Agreement and the amendments thereto, and the recording of the Collateral Assignments for Security referred to in each Security Agreement entered into pursuant to the Original Agreement in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, such security interests in and Liens on the Collateral granted thereby were perfected security interests to the extent such security interests may be perfected by such filings, and no further recordings or filings were or will be required in connection with the creation of, the continued perfection of or the enforcement of such security interests and Liens, other than (i) the filing of continuation statements in accordance with Applicable Law, (ii) the recording of the Collateral Assignments for Security pursuant to each Security Agreement in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, with respect to after-acquired U.S. patent and trademark applications and registrations and U.S. copyrights, (iii) the recordation of appropriate evidence of the security interest in the appropriate foreign registry with respect to all foreign intellectual property, and (iv) control agreements for deposit accounts, liens on titles and similar items. Subject to Permitted Liens, such security interests in, and Liens on the Collateral are and shall continue to be first-priority security interests; provided, however, that any security interest in and Lien on Collateral that is Revolving Lender Primary Collateral (as defined in the Intercreditor Agreement) are and shall continue to be perfected, second-priority Liens and security interests (subject only to Permitted Liens and the prior Lien on and security interest in favor of the Revolving Credit Facility Agent for the benefit of the Revolving Credit Facility Lenders).

(hh) Liens in Favor of Agent. Other than the Excluded Property (as defined in the Security Agreement), no Loan Party is the owner of, nor has any interest in, any property or asset which is not subject to a Lien in favor of the Agent (subject only to Permitted Liens) to secure the Obligations.

(ii) Schedules. All of the information which is required to be scheduled to this Agreement is set forth on the Schedules attached hereto, is correct and accurate in all material respects and does not omit to state any information material thereto.

(jj) Representations and Warranties in Documents; No Default. All

representations and warranties set forth in this Agreement and the other Loan Documents are true and correct in all material respects at the time as of which such representations were made and on the Effective Date (except where such representations and warranties relate to an earlier date in which case such representations and warranties shall be true and correct as of such earlier date). No Event of Default has occurred and is continuing or will occur as a result of the IPO or otherwise, and no condition exists, or will exist as a result of the IPO, which constitutes a Default or an Event of Default.

(kk) Indebtedness. The Loan Parties do not have any Indebtedness other than (i) Permitted Indebtedness, and (ii) a Loan Party's guaranties of Permitted Indebtedness.

(ll) Unrestricted Subsidiaries. Each Subsidiary of the Parent that is not a party to this Agreement is set forth on Schedule 5.01(kk) (each, an "Unrestricted Subsidiary"). Each Unrestricted Subsidiary is inactive or in the process of being liquidated or dissolved and the Unrestricted Subsidiaries do not, in the aggregate, have assets in excess of $500,000.

(mm) Voting Requirements. No vote of the holders of any class or series of the Parent's or DSW's Capital Stock or other securities of the Parent or DSW is necessary under Applicable Law or stock exchange (or similar self-regulatory organization) regulations to approve the issuance of the Warrants, the Conversion Warrants or the Warrant Stock.

(nn) Consummation of IPO. On the IPO Effective Date, the IPO will have been consummated in accordance with each of the conditions set forth in Section 4.02 hereof.

ARTICLE VI

COVENANTS OF THE LOAN PARTIES

Section 6.01 Affirmative Covenants. So long as any principal or interest on the Loan or any other Obligation (whether or not due) shall remain unpaid, each Loan Party shall, from and after the Effective Date:

(a) Additional Guaranties and Collateral Security. Cause (i) each Subsidiary of any Loan Party not in existence on the Effective Date, or any Unrestricted Subsidiary that at any time fails to meet the requirements for an Unrestricted Subsidiary, to execute and deliver to the Agent promptly and in any event within three (3) Business Days after the formation, acquisition or change in status thereof (A) a Guaranty guaranteeing the Obligations, (B) a Security Agreement, (C) if such Subsidiary has any Subsidiaries, a Pledge Agreement together with (x) certificates evidencing all of the Capital Stock of any Person owned by such Subsidiary, (y) undated stock powers executed in blank with signature guaranteed, and (z) such opinion of counsel and such approving certificate of such Subsidiary as the Agent may reasonably request in respect of complying with any legend on any such certificate or any other matter relating to such shares, (D) one or more Mortgages creating on any real property having a book value in excess of $1,000,000, or leased property having an annual minimum fixed rent in excess of $750,000 (if the lease term (including extensions) is less than five years) or $250,000

(if the lease term (including extensions) is equal to or greater than five years) of such Subsidiary a perfected, Lien on such real property subject only to Permitted Liens, a Title Insurance Policy covering such owned real property, a current ALTA survey thereof and a surveyor's certificate, each in form and substance satisfactory to the Agent, together with such other agreements, instruments and documents as the Agent may reasonably require whether comparable to the documents required under Section 6.01(i) or otherwise (it being understood that the Loan Parties shall use their reasonable best efforts (which shall not include the payment of additional sums (other than incidental expenses)) to obtain such Mortgage and other documents) , and (E) such other agreements, instruments, approvals, legal opinions or other documents reasonably requested by the Agent in order to create, perfect, establish the first priority of or otherwise protect any Lien purported to be covered by any such Security Agreement, Pledge Agreement or Mortgage or otherwise to effect the intent that such Subsidiary shall become bound by all of the terms, covenants and agreements contained in the Loan Documents and that all property and assets of such Subsidiary shall become Collateral for the Obligations; and (ii) each owner of the Capital Stock of any such Subsidiary to execute and deliver promptly and in any event within three (3) Business Days after the formation or acquisition of such Subsidiary a Pledge Agreement, together with (A) certificates evidencing all of the Capital Stock of such Subsidiary, (B) undated stock powers or other appropriate instruments of assignment executed in blank with signature guaranteed, (C) such opinion of counsel and such approving certificate of such Subsidiary as the Agent may reasonably request in respect of complying with any legend on any such certificate or any other matter relating to such shares and (D) such other agreements, instruments, approvals, legal opinions or other documents requested by the Agent; provided, however, that nothing contained herein shall be deemed a modification of any other provisions of this Agreement restricting the formation or Acquisition of Subsidiaries by the Loan Parties, or the requirements applicable to Unrestricted Subsidiaries.

(b) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to comply, and use its assets in compliance with all Applicable Laws, rules, regulations and orders (including, without limitation, all Environmental Laws) except where the failure of such compliance will not have a Material Adverse Effect. Without limiting the foregoing such compliance shall include (i) paying before the same become delinquent all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or upon any of its properties, and (ii) paying all lawful claims, making all required withholdings, and filing all required reports and returns with Governmental Authorities which if unpaid, not withheld or unfiled might become a Lien or charge upon any of its properties, except (x) to the extent contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP, or (y) for the inadvertent failure of a Loan Party to pay such lawful claims, make such withholdings or file such returns or reports so long as (A) the aggregate amount thereof does not exceed $500,000, (B) no Lien has been filed on account thereof and (C) promptly upon the date an Authorized Officer obtains knowledge or should have obtained knowledge thereof, the Loan Parties pay such claims, make such withholdings or file such returns or reports.

(c) Preservation of Existence, Etc. Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good

standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary except where the failure to so qualify would not have a Material Adverse Effect.

(d) Maintenance of Properties and Leases, Etc. (i)Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve the Collateral in good working order and condition (ordinary wear and tear and insured casualty excepted); and

(ii) comply, and cause each of its Subsidiaries to comply, in all material respects, at all times with the provisions of all Leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.

(e) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance (including, without limitation, comprehensive general liability, hazard, rent and business interruption insurance) with responsible and reputable insurance companies or associations (which shall include the companies presently providing such insurance, or such other companies as may be selected by the Borrower with the consent of the Agent, whose consent shall not be unreasonably withheld) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts, in such form, for such periods and covering such risks as is required by any Governmental Authority having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and in any event in amount, adequacy and scope reasonably satisfactory to the Agent. All policies covering the Collateral are to be made payable to the Agent for the benefit of the Lenders, as its interests may appear, in case of loss, under a standard non-contributory "lender" or "secured party" clause and shall provide that the insurance, to the extent of the Agent's interest therein, shall not be impaired or invalidated, in whole or in part, by reason of any act or neglect of any Loan Party or by the failure of any Loan Party to comply with any warranty or condition of the policy and are to contain such other provisions as the Agent may reasonably require to fully protect the Lenders' interest in the Collateral and to obtain any payments to be made under such policies. Such policy shall not include an endorsement in favor of any other Person (other than the Revolving Credit Agent, the holder of any Permitted Liens and those Persons intended as beneficiaries of any builder's risk insurance). All certificates of insurance are to be delivered to the Agent and the policies are to be premium prepaid or with customary payment terms (which shall be complied with in a timely fashion by such Loan Parties), with the loss payable and additional insured endorsement in favor of the Agent and such other Persons as the Agent may designate from time to time, and shall provide for not less than thirty (30) days' prior written notice to the Agent of the exercise of any right of cancellation. The Key Loan Parties shall furnish the Agent with certificates or other evidence satisfactory to the Agent regarding compliance by the Loan Parties with the foregoing requirements. If any Loan Party or any of its Subsidiaries fails to maintain such insurance, the Agent may arrange for such insurance, but at the Key Loan Parties' expense and without any responsibility on the Agent's part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims; provided, however, that the Agent's obtaining such insurance shall not constitute a waiver of any Event of Default occasioned by the Loan Parties' failure to have maintained such insurance. Upon the occurrence and during the continuance of an Event of Default and subject to the terms of the Intercreditor Agreement, the Agent shall have the sole right, in the name of the Lenders, any

Loan Party or any of its Subsidiaries, to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies. The Borrower shall provide the Agent with prompt written notice of any change in the insurance policies owned by the Loan Parties, or under which any Loan Party is the named insured, from those in effect as of the Effective Date.

(f) Obtaining of Permits, Etc. Obtain, maintain and preserve, and cause each of its Subsidiaries to obtain, maintain and preserve, and take, and cause each of its Subsidiaries to take, all necessary action to timely renew, all permits, licenses, authorizations, approvals, entitlements and accreditations which are necessary or useful in the proper conduct of its business, except where the failure to do so is not reasonably likely to have a Material Adverse Effect.

(g) Environmental. Except where a violation or failure is not reasonably likely to have a Material Adverse Effect, (i) keep any material property either owned or operated by it or any of its Subsidiaries free of any Environmental Liens; (ii) comply, and cause each of its Subsidiaries to comply, in all material respects with Environmental Laws and provide to the Agent any documentation of such compliance which the Agent may reasonably request; (iii) provide the Agent with written notice within five (5) days of any Release of a Hazardous Material in excess of any reportable quantity from or onto property at any time owned or operated by it or any of its Subsidiaries and take any Remedial Actions required to abate said Release; (iv) provide the Agent with written notice within ten (10) days of the receipt of any of the following: (A) notice that a material Environmental Lien has been filed against any property of any Loan Party or any of its Subsidiaries; (B) commencement of any Environmental Action or notice that an Environmental Action will be filed against any Loan Party or any of its Subsidiaries which is reasonably likely to have a Material Adverse Effect; and (C) notice of a violation, citation or other administrative order to the extent that any of the foregoing are reasonably likely to have a Material Adverse Effect; and (v) defend, indemnify and hold harmless the Agent and the Lenders and their transferees, and their respective employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs or expenses (including, without limitation, attorney and consultant fees, investigation and laboratory fees, court costs and litigation expenses) arising out of (A) the generation, presence, disposal, Release or threatened Release of any Hazardous Materials on, under, in, originating or emanating from any property at any time owned or operated by any Loan Party or any of its Subsidiaries (or its predecessors in interest or title), (B) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to the presence or Release of such Hazardous Materials, (C) any request for information, investigation, lawsuit brought or threatened, settlement reached or order by a Governmental Authority relating to the presence or Release of such Hazardous Materials, (D) any violation of any Environmental Law and/or (E) any Environmental Action filed against the Agent or any Lender to the extent that any of the foregoing is reasonably likely to have a Material Adverse Effect.

(h) Further Assurances. Take such action and execute, acknowledge and deliver, and cause each of its Subsidiaries to take such action and execute, acknowledge and

deliver, at its sole cost and expense, such agreements, instruments or other documents as the Agent may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement and the other Loan Documents, (ii) to subject to valid and perfected first priority Liens (subject to Permitted Liens) any of the Collateral of any Loan Party and its Subsidiaries, (iii) to establish and maintain the validity and effectiveness of any of the Loan Documents and the validity, perfection and priority of the Liens intended to be created thereby, and (iv) to better assure, convey, grant, assign, transfer and confirm unto the Agent and each Lender the rights now or hereafter intended to be granted to it under this Agreement or any other Loan Document. In furtherance of the foregoing, to the maximum extent permitted by Applicable Law, each Loan Party (x) authorizes the Agent to execute any such agreements, instruments or other documents deemed reasonably necessary by the Agent in connection with this Agreement in such Loan Party's name and to file such agreements, instruments or other documents in any appropriate filing office, (y) authorizes the Agent to file any financing statement required hereunder or under any other Loan Document, and any continuation statement or amendment with respect thereto, in any appropriate filing office without the signature of such Loan Party, and (z) ratifies the filing of any financing statement, and any continuation statement or amendment with respect thereto, filed without the signature of such Loan Party prior to the date hereof.

(i) After Acquired Real Property. Upon the acquisition by it or any of its Subsidiaries after the date hereof of any interest (whether fee or leasehold) in any real property (wherever located) (each such interest being an "After Acquired Property") (x) with a Current Value (as defined below) in excess of $1,000,000 in the case of a fee interest, or (y) requiring, in the case of a leasehold interest, the payment of annual minimum fixed rent exceeding in the aggregate $750,000 (if the Lease term (including extensions) is less than five years) or $250,000 (if the Lease term (including extensions) is equal to or greater than five years), immediately so notify the Agent, setting forth with specificity a description of the interest acquired, the location of the real property, any structures or improvements thereon and either an appraisal or such Loan Party's good-faith estimate of the current value of such real property (for purposes of this Section, the "Current Value"). The Agent shall notify such Loan Party whether it intends to require a Mortgage and the other documents referred to below or in the case of leasehold, a leasehold Mortgage or Landlord's Agreement (pursuant to Section 6.01(i) hereof). Upon receipt of such notice requesting a Mortgage, the Person which has acquired such After Acquired Property shall promptly furnish to the Agent the following, each in form and substance satisfactory to the Agent: (i) a Mortgage with respect to such real property and related assets located at the After Acquired Property, each duly executed by such Person and in recordable form; (ii) evidence of the recording of the Mortgage referred to in clause (i) above in such office or offices as may be necessary or, in the reasonable good faith opinion of the Agent, desirable to create and perfect a valid and enforceable first priority lien on the property purported to be covered thereby or to otherwise protect the rights of the Agent and the Lenders thereunder; (iii) in the case of a fee interest, a title insurance policy, a survey of such real property, certified to the Agent and to the issuer of the Title Insurance Policy by a licensed professional surveyor reasonably satisfactory to the Agent and a Phase I Environmental Site Assessment with respect to such real property, certified to the Agent by a company reasonably satisfactory to the Agent; (iv) in the case of a leasehold interest, a certified copy of the lease between the landlord and such Person with respect to such real property in which such Person has a leasehold interest, and the certificate of occupancy with respect thereto; (v) in the case of a leasehold interest, an attornment

and nondisturbance agreement between the landlord (and any fee mortgagee) with respect to such real property and the Agent; and (vi) such other documents or instruments (including, without limitation, guarantees and opinions of counsel) as the Agent may reasonably require, provided, however, that nothing contained herein shall be deemed a modification of any other provisions of this Agreement restricting Acquisitions or investments by the Loan Parties. The Key Loan Parties shall pay all reasonable fees and expenses, including reasonable attorneys' fees and expenses, and all title insurance charges and premiums, in connection with each Loan Party's obligations under this Section 6.01(i).

(j) Conduct of Business. Conduct their business substantially in accordance with the Business Plan, or as otherwise approved by the Agent pursuant to Section 7.10 hereof. The foregoing shall not obligate the Loan Parties to achieve any specific financial performance and no financial covenants are intended to be imposed thereby.

(k) Maintenance of Listing. Maintain and cause to be quoted at all times, the Common Stock of the Parent and the Class A Common Shares of DSW on a national securities exchange registered under the Exchange Act (a "National Securities Exchange") or the NASDAQ Stock Market;

(l) SEC. Maintain, at all times, the Parent's and DSW's status as reporting company under the Exchange Act, and make timely filings thereunder;

(m) Leasehold Mortgages. Each of the Loan Parties shall use their reasonable best efforts to obtain leasehold Mortgages on substantially all Leases of the Loan Parties it being understood that reasonable best efforts shall require a bona fide request be made in writing to the appropriate parties with a copy to the Agent (or in lieu thereof, a short memorandum describing a telephone request made in respect thereof, which memorandum shall include the date of the conversation and the name of the person with whom the Loan Party spoke) with appropriate follow-up as reasonably required by the Agent, which in each case shall be included in the Leasehold Mortgage Status Report; provided, that no Loan Parties shall be required to pay any money (other than incidental expenses), agree to amended Lease terms (unless such amendments are immaterial in the reasonable judgment of the Key Loan Parties), or commence any legal action.

(n) Board of Director Observer Rights. At all times that CPLP (and/or one or more of its Affiliates or related funds) is at such time a Warrantholder holding not less than 50% of the Warrants and/or Conversion Warrants held by CPLP on the Effective Date, the Parent shall allow two representatives designated by CPLP to attend all meetings, including telephonic meetings, of the Parent's Board of Directors in a non-voting capacity. The Parent will give such representatives written notice of each meeting of its Board of Directors in advance and at the same time and in the same manner as notice is given to the directors. Such representatives shall also be provided with all written materials and other information (including minutes of meetings) given to directors in connection with such meetings at the same time such materials and information are given to the directors. If the Parent proposes to take any action by written consent in lieu of a meeting of its Board of Directors, the Parent shall give written notice thereof to such representatives promptly following the effective date of such consent describing in reasonable detail the nature and substance of such action. In the event the Parent establishes

separate committees of the Board of Directors, the right to representatives granted hereunder shall extend to meetings of such committees.

Section 6.02 Negative Covenants. So long as any principal of or interest on the Loan, or any other Obligation (whether or not due) shall remain unpaid, each Loan Party shall not:

(a) Liens, Etc. (i) Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien upon or with respect to any of its properties (including, without limitation, the Capital Stock of DSW held by the Parent), whether now owned or hereafter acquired; file or suffer to exist under the Uniform Commercial Code or any similar law or statute of any jurisdiction, a financing statement (or the equivalent thereof) that names it or any of its Subsidiaries as debtor; sign or suffer to exist any security agreement authorizing any secured party thereunder to file such financing statement (or the equivalent thereof); sell any of its property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable) with recourse to it or any of its Subsidiaries or assign or otherwise transfer, or permit any of its Subsidiaries to assign or otherwise transfer, any account or other right to receive income; other than, as to all of the above, Permitted Liens, or (ii) have possession of any property on consignment to that Loan Party from a third party that is not a Loan Party, except as of the Effective Date as set forth on Schedule 5.01(o)(i), and after the Effective Date, those as to which the Loan Parties have notified the Agent, in accordance with Section 7.03.

(b) Indebtedness. Create, incur, assume, guarantee or suffer to exist, or otherwise become or remain liable with respect to, or permit any of its Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise become or remain liable with respect to, any Indebtedness other than
(i) Permitted Indebtedness and (ii) guaranties of Permitted Indebtedness of another Loan Party.

(c) Fundamental Changes; Dispositions. (i) Wind-up, liquidate or dissolve, or permit any of its Subsidiaries to wind-up, liquidate or dissolve; (ii) merge, consolidate or amalgamate with any Person, or permit any of its Subsidiaries to merge, consolidate or amalgamate with any Person; (iii) purchase or otherwise acquire, whether in one transaction or a series of related transactions, all or substantially all of the assets of any Person (or any division thereof), or permit any of its Subsidiaries to do any of the foregoing;
(iv) suffer or cause, or permit any of its Subsidiaries to suffer or cause the waste or destruction of any material part of the Collateral; (v) use or permit any of its Subsidiaries to use, any of the Collateral in violation of any policy of insurance thereon; (vi) sell, lease, sublease, convey, transfer or otherwise dispose of, or permit any of its Subsidiaries to sell, lease, sublease, convey, transfer or otherwise dispose of any of the Collateral; and (vii) other than leased departments and similar arrangements with third parties, commit to open or close any location at which any Loan Party maintains, offers for sale, or stores any of the Collateral, in any fiscal year such that the actual number of stores of all Key Loan Parties in the aggregate (x) exceeds by ten (10) the number of stores reflected on the Business Plan for such fiscal year, or (y) is more than ten (10) fewer than the number of stores reflected on the Business Plan for such fiscal year (without giving effect to any new stores which the Business Plan projected to be opened or closed, but which have not in fact been opened or closed); provided, however, that each of the following

shall be permitted:

(A) if no Default or Event of Default shall have occurred and be continuing or would result therefrom, with the prior written consent of the Agent (which consent shall not be unreasonably withheld) any wholly-owned Subsidiary may merge, consolidate or amalgamate with or into the Borrower or with or into another wholly-owned Subsidiary of the Parent, so long as in any merger, consolidation or amalgamation involving the Borrower, the Borrower is the surviving, continuing or resulting corporation. Notwithstanding the foregoing, the Parent may not merge or consolidate or be merged or consolidated with or into any other Person without the prior written consent of the Agent;

(B) if no Default or Event of Default shall have occurred and be continuing or would result therefrom, any Loan Party may liquidate or dissolve any Unrestricted Subsidiary;

(C) if no Default or Event of Default shall have occurred and be continuing or would result therefrom, any Loan Party may engage in any Acquisition which is a Permitted Acquisition, provided that all of the conditions contained in the definition of the term Permitted Acquisition are satisfied;

(D) any Loan Party may engage in (1) the use or sale of Inventory (including, without limitation, in leased departments) in compliance with this Agreement; (2) the disposal of Equipment which is obsolete, worn out, or damaged beyond repair, or no longer useful in the Loan Parties' businesses;
(3) Permitted Dispositions; (4) the turning over to the Agent of certain Collateral as provided herein, or to the Revolving Credit Agent of all Receipts (as defined in the Revolving Credit Facility) as provided in the Revolving Credit Facility; and (5) the use of the Collateral to pay obligations arising in the ordinary course; and

(E) in the event of an exercise of the Conversion Warrants or Warrants for Class A Common Shares of DSW (but not for Common Stock of the Parent), the Parent may sell, in exchange for cash, up to that number of Class A Common Shares of DSW as shall provide Net Cash Proceeds to the Parent equal to the sum of (x) the Tax liability, if any, actually incurred by the Parent as a result of the exercise of the Conversion Warrants or the Warrants, less (y) the Net Cash Proceeds (if any) received by the Parent upon such exercise of the Conversion Warrants or the Warrants; provided that (1) no Default or Event of Default shall have occurred and be continuing at the time of such sale, (2) the average closing sale price of the Class A Common Shares on the New York Stock Exchange (or other exchange on which such shares are listed) for the 30 days prior to such sale, times the number of Class A Common Shares owned (or which could be received by the Parent in exchange for its Class B Common Shares) by the Parent after giving effect to such sale would be equal to at least two times the outstanding principal amount of the Loan (including all PIK Interest added thereto) at such time, and (3) after giving effect to such sale, the Parent shall own a number of Class A Common Shares (or Class B Common Shares exchangeable into Class A Common Shares) sufficient to permit the exercise in full, for Class A Common Shares, of the Conversion Warrants and Warrants held by the Warrantholders and Conversion Warrantholders thereof at such time.

Notwithstanding anything to the contrary contained herein, no Loan Party shall have any right to sell, lease, convey, transfer or otherwise dispose of any of the Capital Stock of DSW, other than pursuant to (w) the IPO, subject to the conditions set forth in Section 4.02 hereof, (x) Clause (E) of this
Section 6.02(c), (y) the transfer of Warrant Stock to the Warrantholders and the Conversion Warrantholders upon the exercise of the Warrants and the Conversion Warrants and (z) a Permitted DSW Stock Sale provided that the Net Cash Proceeds thereof are sufficient to repay and are actually and immediately used to repay the Obligations in full in cash in accordance with Section 2.04(a)(ii).

(d) Line of Business. Engage in any business other than the business in which it is currently engaged or a business reasonably related thereto, or any retail lease department operation.

(e) Loans; Advances; Investments, Etc. (i) Make or commit or agree to make any loan, advance guarantee of obligations, other extension of credit or capital contributions to, or hold or invest in or commit or agree to hold or invest in, or purchase or otherwise acquire any shares of the Capital Stock, bonds, notes, debentures or other securities of, or make or commit or agree to make any other investment in, any other Person; (ii) purchase or own any futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract; (iii) subordinate any debts or obligations owed to that Loan Party by any third party (but not by another Loan Party) to any other debts owed by such third party to any other Person; (iv) enter into leases of property or assets not constituting Permitted Acquisitions, unless such leases are not otherwise in violation of this Agreement; (v) organize or create any Affiliate other than in connection with a Permitted Acquisition; or (vi) acquire any assets other than in the ordinary course and conduct of that Loan Party's business as conducted at the execution of this Agreement, other than in connection with a Permitted Acquisition, or as otherwise permitted in this Agreement, or permit any of its Subsidiaries to do any of the foregoing, except for:

(A) Permitted Investments and investments directly related to Permitted Acquisitions;

(B) advance payments made to that Loan Party's suppliers in the ordinary course;

(C) advances to that Loan Party's officers, employees, and salespersons with respect to reasonable expenses to be incurred by such officers, employees, and salespersons for the benefit of that Loan Party, which expenses are properly substantiated by the Person seeking such advance and properly reimbursable by that Loan Party;

(D) loans and advances to employees for business-related moving expenses, costs of replacement homes, business machines or supplies, automobiles and other similar expenses, in each case incurred in the ordinary course of business not to exceed (together with loans and advances under Section 6.02(e)(E) and investments permitted under clause (xiii) of the definition of Permitted Investment) $6,000,000 in the aggregate outstanding to all employees at any one time;

(E) loans and advances to that Loan Party's officers, employees, and salespersons in connection with any employment agreements or arrangements, or any stock options or option plans not to exceed $6,000,000 (together with loans and advances under Section 6.02(e)(D) and investments permitted under clause (xiii) of the definition of Permitted Investments) in the aggregate outstanding to all employees at any one time;

(F) intercompany loans and advances (1) existing on the date hereof and described on Schedule 6.02(e)(vi)(F) hereof, (2) hereafter made amongst any Loan Parties pursuant to the terms of the Revolving Credit Facility, (3) hereafter made to the Parent by any other Loan Party to the extent any of the same constitutes Permitted Indebtedness under clause (viii) of the definition of Permitted Indebtedness, and (4) to any Loan Party by the Parent;

(G) loans and advances of a Person outstanding at the time such Person becomes a Subsidiary as a result of a Permitted Acquisition, provided, that any such loans or advances were not made at the time of or in contemplation of the acquisition of such Person by a Loan Party or any Subsidiaries;

(H) to the extent not permitted by the foregoing clauses, the existing loans and advances described on Schedule 6.02(e)(vi)(H) hereto;

(I) any other loans and advances to or for the benefit of any Person which (1) is not itself a Loan Party, (2) are not otherwise permitted by the foregoing clauses, and (3) are made after the Effective Date, which loans and advances have been approved in advance by the Agent.

(f) Capitalized Lease Obligations. Create, incur or suffer to exist, or permit any of its Subsidiaries to create, incur or suffer to exist, any Capitalized Lease Obligations which would cause the aggregate amount of all obligations under Capitalized Leases entered into after June 11, 2002 owing by all Loan Parties and their Subsidiaries in any Fiscal Year to exceed the amount set forth in clause (iv) of the definition of Permitted Indebtedness.

(g) Restricted Payments.

(i) Pay any cash dividend or other distribution, in respect of any class of such Loan Party's or any of its Subsidiaries' Capital Stock, other than dividends payable to another Loan Party or payable solely in the Capital Stock of such paying Loan Party;

(ii) make any repurchase, redemption, retirement, defeasance, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Capital Stock of any Loan Party or any direct or indirect parent of any Loan Party, now or hereafter outstanding; provided that the Loan Parties may make cash payments for any such purposes if:

(A) no Default or Event of Default shall have occurred and be continuing at the time of declaration or payment thereof;

(B) after giving effect to the making of any such cash

payment, the aggregate amount so expended for such purposes subsequent to June 11, 2002 does not exceed $1,500,000; and

(C) after giving effect to the making of any such cash payment, the aggregate amount so expended for such purposes in any Fiscal Year of the Key Loan Parties does not exceed $500,000.

Notwithstanding anything to the contrary contained herein, dividends
(other than dividends payable solely in capital stock of another Loan Party)
shall be payable to the Parent by any other Loan Party only to the extent not otherwise in violation of the Loan Documents and in any event, not to exceed $5,000,000 (less loans and advances to the Parent made under clause (viii) of the definition of Permitted Indebtedness) in the aggregate after June 11, 2002.

(h) Federal Reserve Regulations. Permit any Loan or the proceeds of any Loan under this Agreement to be used for any purpose that would cause such Loan to be a margin loan under the provisions of Regulation T, U or X of the Board.

(i) Transactions with Affiliates. (i) Except as set forth in that certain confidential side letter from the Borrower to the Agent and for loans which may be made between Loan Parties permitted pursuant to Section 6.02(e) above, make any payment, nor give any value to any Affiliate except for leases, goods and services with such Affiliate for a price and on terms which shall be in the ordinary course of business at prices and on terms and conditions no less favorable to that Loan Party than those which would have been charged and imposed in an arm's-length transaction from unrelated third parties, except (A) sales of goods to an Affiliate for use or distribution outside of the United States of America which complies with the any applicable legal requirements of the Internal Revenue Code of 1986 and the Treasury Regulations, each as amended from time to time, provided, that such sales shall not exceed $500,000 in the aggregate in any Fiscal Year of the Parent, (B) loans, advances and other payments to officers and directors as part of their compensation which are entered into in the ordinary course of business and which are not otherwise prohibited under the Loan Documents, (C) other dividends and distributions to officers, directors and shareholders otherwise permitted under this Agreement, or (D) transactions between or among the Loan Parties not prohibited hereunder and not involving any other Affiliate; (ii) (A) without prior written consent of the Agent, amend, modify or waive any of the provisions of the instruments, documents or agreements described in the confidential side letter referred to in clause (i) above, the effect of which is to increase the payments or value to be furnished by a Loan Party to any Affiliate (other than for ordinary increases under such instruments, documents and agreements in the ordinary course of business, for which the Loan Parties are presently obligated to make payment in such instrument, document or agreement as in effect on the Effective Date) or which would cause such instruments, documents or agreements to be at prices and on terms and conditions no less favorable to that Loan Party than those which would have been charged and imposed in an arm's-length transaction from unrelated third parties, or (B) make any payments under such instruments, documents or agreements in advance of the date when due other than payments made to Affiliates to fund obligations or anticipated claims under medical claims, employee benefit plans or agreements, and other similar plans, all in accordance with current practice; and (iii) fail to use its best efforts to cause its Affiliates to execute and deliver to the Agent and the Lenders such documentation as the Agent may reasonably require to evidence the Affiliates'

agreement with the provisions of this Section 6.02(i), provided, however, that notwithstanding anything to the contrary contained in this Section 6.02(i), no Loan Party may (x) engage in any SSC Transaction or CPLP Transaction except in accordance with the terms of Article XIV, or (y) make any payment to, provide any value to, or enter into any transaction with, DSW or DSWSW, except (1) those transactions set forth on Schedule 6.02(i) hereto, and (2) transactions for leases, goods and services provided to or by DSW or DSWSW for a price and on terms which shall be in the ordinary course of business at prices and on terms and conditions no less favorable to that Loan Party than those which would have been charged and imposed in an arm's-length transaction from unrelated third parties.

(j) Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries and Restrictions on Obligations. Create or otherwise cause, incur, assume, suffer or permit to exist or become effective any consensual encumbrance or restriction of any kind on the ability of (i) any Loan Party to create or grant liens in favor of the Agent or to incur Obligations or
(ii) any Subsidiary of any Loan Party (A) to pay dividends or to make any other distribution on any shares of Capital Stock of such Subsidiary owned by any Loan Party or any of its Subsidiaries, (B) to pay or prepay or to subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries, (C) to make loans or advances to any Loan Party or any of its Subsidiaries or (D) to transfer any of its property or assets to any Loan Party or any of its Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing; provided, however, that nothing in any of clauses (A) through (D) of this
Section 6.02(j) shall prohibit or restrict compliance with:

(1) this Agreement and the other Loan Documents or the Revolving Credit Facility Documents;

(2) any agreements in effect on the date of this Agreement and described on Schedule 6.02(j);

(3) any Applicable Law, rule or regulation (including, without limitation, applicable currency control laws and applicable state corporate statutes restricting the payment of dividends in certain circumstances);

(4) in the case of clause (D) any agreement setting forth customary restrictions on the subletting, assignment or transfer of any property or asset that is a lease, license, conveyance or contract of similar property or assets; or

(5) in the case of clause (D), any agreement, instrument or other document evidencing a Permitted Lien from restricting on customary terms the transfer of any property or assets subject thereto.

(k) Limitation on Issuance of Capital Stock. Issue or sell or enter into any agreement or arrangement for the issuance and sale of, or permit any of its Subsidiaries to issue or sell or enter into any agreement or arrangement for the issuance and sale of, any shares of its Capital Stock, any securities convertible into or exchangeable for its Capital Stock or any warrants, provided, that (i) Parent may issue since the Effective Date (as defined in the Original Agreement) (A) the Warrant Stock, and (B) the Warrants and the Conversion Warrants, and (ii)

the Parent may issue (A) up to 5,000,000 shares of Common Stock (and following June 11, 2007, up to an additional 5,000,000 shares of Common Stock) that are issued to Persons other than Affiliates of the Parent, including (1) shares of Common Stock or options exercisable therefor, issued or to be issued under the Parent's 2000 Stock Option Plan as in effect on June 11, 2002 or under any other employee stock option or purchase plan or plans, or pursuant to compensatory or incentive agreements, for officers, employees or consultants of the Parent or any of its Subsidiaries , in each case adopted or assumed after such date by the Parent's Board of Directors; provided in each case that the exercise or purchase price for any such share shall not be less than 95% of the fair market value (determined in good faith by the Parent's Board of Directors) of the Common Stock on the date of the grant, and such additional number of shares as may become issuable pursuant to the terms of any such plans by reason of adjustments required pursuant to antidilution provisions applicable to such securities in order to reflect any subdivision or combination of Common Stock, by reclassification or otherwise, or any dividend on Common Stock payable in Common Stock, (2) shares of restricted stock issued by the Parent to executive officers of the Parent, and (3) shares of Common Stock issued by the Parent as charitable gifts, and (B) up to an additional 2,153,000 shares of Common Stock issued pursuant to options that are granted to executive officers of the Parent or its Subsidiaries under the Parent's 2000 Stock Option Plan as in effect on June 11, 2002, at an exercise price of no less than $4.50 per share and such additional number of shares as may become issuable pursuant to the terms of any such options under the terms of such plan by reason of adjustments required pursuant to antidilution provisions applicable to such securities in order to reflect any subdivision or combination of Common Stock, by reclassification or otherwise, or any dividend on Common Stock payable in Common Stock; and provided, that all options that are issued and expire unexercised because the vesting requirements thereof are not satisfied shall not be included in the issued shares pursuant to this clause (B).

(l) Modifications of Indebtedness, Organizational Documents and Certain Other Agreements, Etc. (i) Amend, modify or otherwise change (or permit the amendment, modification or other change) in any manner of any of the provisions of any of its or its Subsidiaries' Indebtedness or of any instrument or agreement (including, without limitation, any purchase agreement, indenture, loan agreement or security agreement) relating to any such Indebtedness if such amendment, modification or change (A) would shorten the final maturity or average life to maturity of, or require any payment to be made earlier than the date originally scheduled on, such Indebtedness, or would increase the interest rate applicable to such Indebtedness unless (x) Excess Availability, both immediately prior to, immediately after giving effect to and on a pro forma projected basis for the 12 months immediately following such amendment, modification or change, is at least $100 million, or (y) the total amount of such Indebtedness so amended, modified or changed since the Effective Date (together with the amounts permitted under clause (ii) hereof), does not exceed $500,000 in any Fiscal Year of the Borrower; (B) would change the subordination provision, if any, of such Indebtedness, or (C) would otherwise be adverse to the Lenders in any respect; (ii) except for the Obligations and except as otherwise explicitly permitted herein, make any voluntary or optional payment, prepayment, redemption, defeasance, sinking fund payment or other acquisition for value of any of its or its Subsidiaries' Indebtedness (including, without limitation, by way of depositing money or securities with the trustee therefor before the date required for the purpose of paying any portion of such Indebtedness when due), or refund, refinance, replace or exchange any other Indebtedness for any such Indebtedness (except to the extent such Indebtedness is otherwise

expressly permitted by the definition of "Permitted Indebtedness"), or make any payment, prepayment, redemption, defeasance, sinking fund payment or repurchase of any outstanding Indebtedness as a result of any asset sale, change of control, issuance and sale of debt or equity securities or similar event, or give any notice with respect to any of the foregoing unless (x) Excess Availability, both immediately prior to, immediately after giving effect to and on a pro forma projected basis for the 12 months immediately following such event is at least $100 million, or (y) the total amount of such Indebtedness so paid since June 11, 2002 (together with the amounts permitted under clause
(i)(A) hereof), does not exceed $500,000 in any Fiscal Year of the Parent; (iii) except as permitted by Section 6.02(c), amend, modify or otherwise change its name, jurisdiction of organization, organizational identification number or FEIN; (iv) amend, modify or otherwise change its certificate of incorporation or bylaws (or other similar organizational documents), including, without limitation, by the filing or modification of any certificate of designation, or any agreement or arrangement entered into by it, with respect to any of its Capital Stock (including any shareholders' agreement), or enter into any new agreement with respect to any of its Capital Stock, except any such amendments, modifications or changes or any such new agreements or arrangements pursuant to this clause (iv) that either individually or in the aggregate, could not have a Material Adverse Effect; (v) amend, modify, waive or otherwise change (or permit the amendment, modification, waiver or other change in any manner) of any provisions in the Revolving Credit Facility Documents relating to (A) Availability, Excess Availability, Excess Availability Reserve, Gross Availability or the Borrowing Base (as each is defined in the Revolving Credit Facility) which amendment has or could have the effect of increasing Availability, Excess Availability, Gross Availability or the Borrowing Base or decreasing the Availability Reserve, (B) the Credit Card Advance Rate, the Inventory Advance Rate, the Appraised Inventory Percentage or the Appraised Inventory Liquidation Value (as each is defined in the Revolving Credit Facility), in each case, to an amount in excess of the rates set forth in the Revolving Credit Facility as in effect on the date hereof, (C) the definition of Cash Control Event and the related provisions contained in Article VII of the Revolving Credit Agreement or (D) any covenants or Events of Default contained in the Revolving Credit Agreement, if such amendments imposes any additional or more restrictive representations, covenants (financial or otherwise) or events of default than is contained in the Revolving Credit Agreements in effect on the date hereof, and, if, notwithstanding the foregoing, such amendment is made, the Borrower shall promptly notify, and furnish a copy thereof to the Agent; (vi) agree to any material amendment or other material change to or waiver of any of its rights under any Material Contract without the consent of the Agent (which consent shall not be unreasonably withheld); or (vii) alter, modify or amend any Lease in a manner which is reasonably likely to have a Material Adverse Effect.

(m) Investment Company Act of 1940. Engage in any business, enter into any transaction, use any securities or take any other action or permit any of its Subsidiaries to do any of the foregoing, that would cause it or any of its Subsidiaries to become subject to the registration requirements of the Investment Company Act of 1940, as amended, by virtue of being an "investment company" or a company "controlled" by an "investment company" not entitled to an exemption within the meaning of such Act.

(n) Properties. Other than in the ordinary course of business, permit any property to become a fixture with respect to real property or to become an accession with respect to other personal property with respect to which real or personal property the Agent does

not have a valid and perfected first priority Lien.

(o) ERISA. Do or permit any ERISA Affiliate to do any of the following, if as a result thereof, such Loan Party or ERISA Affiliate will, or could reasonably be expected to, incur liability that is reasonably likely to have a Material Adverse Effect:

(i) violate or fail to be in full compliance with any Loan Party's Employee Benefit Plan;

(ii) fail timely to file all reports and filings required by ERISA to be filed by any Loan Party;

(iii) engage in any nonexempt "prohibited transactions" or "reportable events" (respectively as described in ERISA);

(iv) engage in, or commit any act such that a tax or penalty reasonably could be imposed upon any Loan Party on account thereof pursuant to ERISA;

(v) incur any material accumulated funding deficiency within the meaning of ERISA;

(vi) terminate any Employee Benefit Plan such that a Lien could be asserted against any assets of any Loan Party on account thereof pursuant to ERISA; or

(vii) fail to make any required contribution or payment to, or make a complete or partial withdrawal from, any Employee Benefit Plan which is a multiemployer plan within the meaning of Section 4001(a) of ERISA.

(p) Environmental. Knowingly or negligently permit the use, handling, generation, storage, treatment, Release or disposal of Hazardous Materials at any property owned or leased by it or any of its Subsidiaries, except in compliance with Environmental Laws and so long as such use, handling, generation, storage, treatment, Release or disposal of Hazardous Materials is not reasonably likely to result in a Material Adverse Effect.

(q) Excess Availability Reserve. Permit the Excess Availability Reserve at any time to be less than the sum of $27,500,000.

(r) Location of Collateral. (i) Remove any Collateral from locations described in Schedule 5.01(ee) except for the following purposes:

(A) to accomplish sales of Inventory in the ordinary course of business;

(B) to move Inventory or other Collateral from one such location to another such location; or

(C) to utilize such of the Collateral as is removed from such locations in the ordinary course of business.

(ii) place any tangible personal property of any Loan Party in the care or custody of any third party, or store or entrust any such personal property with a bailee or other third party, except (A) as otherwise disclosed to the Agent pursuant to Section 5.01(ee), or permitted by this
Section 6.02(r), or (B) for Inventory in an amount not to exceed $1,000,000 at Cost (as defined in the Revolving Credit Facility) in the aggregate at any time in the ordinary course of business;

(s) Unrestricted Subsidiaries . Permit any Unrestricted Subsidiary at any time to carry on any business activity or have any assets in excess of $500,000 in the aggregate.

(t) Intellectual Property. Conduct its business so as to infringe the patents, industrial designs, trademarks, trade names, trade styles, brand names, service marks, logos, copyrights, trade secrets, know-how, confidential information, or other intellectual or proprietary property of any third Person, except where such infringement is not reasonably likely to have a Material Adverse Effect.

(u) Parent's Line of Business. The Parent shall not engage in any business, and shall not own any property or assets, other than acquiring and owning (a) the capital stock of any other Loan Party, DSW or the Unrestricted Subsidiaries, and (b) any investments permitted to be made by the Parent hereunder, and (c) otherwise incidental to the operation of the business of a holding company. In addition, notwithstanding anything to the contrary contained herein, L/C's and Bankers Acceptances (each as defined in the Revolving Credit Facility) issued for the account of the Parent shall be limited to those L/Cs required to support the workman's compensation obligations of the Parent and its Subsidiaries and for no other purpose.

ARTICLE VII

REPORTING REQUIREMENTS

Section 7.01 Maintain Records. The Loan Parties shall:

(a) At all times, keep proper books of account, in which full, true, and accurate entries shall be made of all of the Loan Parties' financial transactions, all in accordance with GAAP applied consistently with prior periods to fairly reflect the consolidated financial condition of the Loan Parties at the close of, and its results of operations for, the periods in question.

(b) Timely provide the Agent with those financial reports, statements, and schedules required by this Article VII or otherwise, each of which reports, statements and schedules shall be prepared, to the extent applicable, in accordance with GAAP applied consistently with prior periods to fairly reflect the Consolidated financial condition of the Loan Parties at the close of, and the results of operations for, the period(s) covered therein.

(c) At all times, keep accurate current records of the Collateral including, without limitation, accurate current stock, cost, and sales records of its Inventory for each Division, accurately and sufficiently itemizing and describing the kinds, types, and

quantities of Inventory and the cost and selling prices thereof.

(d) At all times, retain (i) Deloitte and Touche, LLP, or such other nationally recognized independent certified public accountants who are reasonably satisfactory to SSC (as long as it remains in Control of the Key Loan Parties) and the Agent, and instruct such accountants, subject to the terms of such accountants' internal policies, and subject to the confidentiality provisions of this Agreement, to fully cooperate with, and be available to, the Agent to discuss the Loan Parties' financial performance, financial condition, operating results, controls, and such other matters, within the scope of the retention of such accountants, as may be raised by the Agent.

(e) Not change any Loan Party's Fiscal Year.

Section 7.02 Access to Records.

(a) Each Loan Party shall accord the Agent with reasonable access during normal business hours from time to time as the Agent may require to all properties owned by or over which any Loan Party has control. The Agent shall have the right, and each Loan Party will permit the Agent from time to time as the Agent may request, to examine, inspect, copy, and make extracts from any and all of the Loan Parties' books, records, electronically stored data, papers, and files. Each Loan Party shall make that Loan Party's copying facilities available to the Agent.

(b) Each Loan Party hereby authorizes the Agent to (i) inspect, copy, duplicate, review, cause to be reduced to hard copy, run off, draw off, and otherwise use any and all computer or electronically stored information or data which relates to any Loan Party. Each Loan Party shall request full cooperation with the Agent from any service bureau, contractor, accountant, or other Person; and (ii) verify at any time the Collateral or any portion thereof, including verification with Account Debtors, and/or with each Loan Party's computer billing companies, collection agencies, and accountants.

(c) The Agent from time to time may designate one or more representatives to exercise the Agent's rights under this Section 7.02 as fully as if the Agent were doing so; provided, that the Agent shall not designate a Person which is in a Competitive Business.

Section 7.03 Prompt Notice to Administrative Agent.

(a) The Borrower shall provide the Agent with written notice promptly upon the occurrence of any of the following events, which written notice shall be with reasonable particularity as to the facts and circumstances in respect of which such notice is being given (i) any change in any Loan Party's president, chief executive officer, chief operating officer, and chief financial officer (without regard to the title(s) actually given to the Persons discharging the duties customarily discharged by officers with those titles);
(ii) any ceasing of any Loan Party's payment of the debts of that Loan Party generally as they mature, in the ordinary course, to its creditors (other than its ceasing of making of such payments on account of a dispute which, if adversely determined to the Loan Parties is not reasonably likely to have a Material Adverse Effect); (iii) any failure by any Loan Party to pay rent at any of that Loan Party's locations,

which failure continues for more than three (3) days following the last day on which such rent was payable unless such failure is not reasonably likely to have a Material Adverse Effect; (iv) any material adverse change in the business, operations, or financial affairs of the Borrower; (v) the occurrence of any Default; (vi) any intention on the part of any Loan Party to discharge that Loan Party's present independent accountants or any withdrawal or resignation by such independent accountants from their acting in such capacity (as to which, see
Section 7.01(d)); (vii) any litigation which, if determined adversely to any Loan Party, is reasonably likely to have a Material Adverse Effect; (viii) any intention of a Key Loan Party to enter into a consignment arrangement or licensing or other similar agreement (whether for intellectual property, leased departments in stores or otherwise) with any other Person (other than a Loan Party); (ix) any additional or amended collective bargaining or other labor contract entered into after the Effective Date; (x) any Material Accounting Changes; (xi) any material adverse change relating to the type, quantity or quality of the Collateral or the Lien granted thereon; (xii) any event, occurrence or circumstance not specifically described herein that is reasonably likely to have a Material Adverse Effect; (xiii) any Loan Party's entering into a license agreement after the Effective Date; (xiv) any Loan Party's entering into a Capitalized Lease after the Effective Date; and (xv) any Loan Party's entering into a Lease after the Effective Date.

(b) The Borrower shall (i) provide the Agent, when so distributed, with copies of any materials distributed to the shareholders of the Borrower; (ii) provide the Agent (A) when filed, copies of all filings with the SEC. Such copies may be provided in electronic format; (B) when received, copies of all correspondence from the SEC, other than routine general communications from the SEC; and (C) should any of the information on any of the Schedules hereto become misleading in any material respect, promptly advise the Agent in writing with such revisions or updates as may be necessary or appropriate to update or correct the same; provided, however, that no such Schedule shall be deemed to have been amended, modified or superseded by any such correction or update, nor shall any breach of any representation or warranty resulting from the inaccuracy or incompleteness of such Schedule be deemed to have been cured or waived, unless and until the Agent, in its discretion shall have accepted in writing such revisions; (iii) at the request of Agent, from time to time, provide the Agent with copies of all advertising (including copies of all print advertising and duplicate tapes of all video and radio advertising); and
(iv)provide the Agent, when received by and Loan Party, with a copy of any management letter or similar communications from any independent accountant of any Loan Party.

Section 7.04 Weekly Reports. Weekly, on Friday of each week (as of the then immediately preceding Saturday) the Borrower shall provide the Agent with Borrowing Base Certificates (in the form of Exhibit 6.4 to the Revolving Credit Facility, as such form may be revised from time to time by the Revolving Credit Agent) prepared separately for each Division and combined for all Key Loan Parties, and sales audit reports and flash collateral reports (each in such form as may be specified from time to time by the Collateral Agents) prepared separately for each Division and combined for all Key Loan Parties. Such reports may be sent to the Agent by facsimile transmission, provided that the original thereof is forwarded to the Agent on the date of such transmission.

Section 7.05 Monthly Reports. Monthly, the Borrower shall provide the Agent with those financial statements and reports described on Schedule 7.05, annexed hereto, at the

times set forth in such Schedule and a Leasehold Mortgage Status Report.

Section 7.06 Quarterly Reports. Quarterly, within forty-five (45) days following the end of each of the Loan Parties' fiscal quarters, the Borrower shall provide the Agent with the following:

(a) An original counterpart of a management prepared financial statement (which shall be prepared in the same manner and using the same assumptions as set forth in the forecasts furnished to, and approved by, the Agent pursuant to the provisions of Section 7.10(c) hereof) for (A) the Loan Parties on a consolidated basis, (B) the Filene's Business, and (C) the Value City Business, in each case for the fiscal quarter most recently ended, and for the period from the beginning of the Loan Parties' then current fiscal year through the end of the subject quarter, with comparative information for the same period of the previous fiscal year, which statement shall include a balance sheet, statement of operations and cash flows and comparisons for the corresponding quarter of the then immediately previous year, as well as to the Loan Party's forecast;

(b) A list of all leases entered into or terminated during such quarter; and

(c) The officer's compliance certificate described in Section 7.08.

Section 7.07 Annual Reports.

(a) Annually, within ninety (90) days following the end of the Parent's fiscal year, the Borrower shall furnish the Agent with the following:
(i) an original signed counterpart of the Parent's consolidated annual financial statement, which statement shall have been prepared by, and bear the unqualified opinion of, the Borrower's independent certified public accountants (i.e. said statement shall be "certified" by such accountants) and shall include, at a minimum (with comparative information for the then prior fiscal year) a balance sheet, statement of operations, statement of changes in shareholders' equity, and cash flows; (ii) a consolidating annual financial statement for (x) the Filene's Business, and (y) the Value City Business which shall include (with comparative information for the then prior fiscal year) a balance sheet, statement of changes in shareholders' equity, and cash flows; and (iii) the officer's compliance certificate described in Section 7.08.

(b) No later than fifteen (15) days prior to the end of the Parent's fiscal years, the Borrower shall give written notice to such independent certified accountants (with a copy of such notice, when sent, to the Agent) that such annual financial statement will be delivered by the Borrower to the Agent and that the Borrower has been advised that the Agent and each Lender will rely thereon with respect to the administration of, and transactions under, the credit facilities contemplated by this Agreement.

Section 7.08 Officer's Certificates.The Borrower shall cause either the Parent's chief executive officer, president, executive vice president, chief financial officer, controller, or treasurer (each, an "Authorized Officer"), in each instance, to provide such Person's Certificate with those monthly financial statements to be provided within thirty (30) days of the end of each month and with those to be provided quarterly and annual statements to be furnished pursuant to

this Agreement, which Certificate shall:

(a) Indicate that (i) with respect to the Consolidated financial statement, the subject statement was prepared in accordance with GAAP consistently applied, and (ii) with respect to all financial statements, presents fairly the financial condition of the applicable Loan Parties at the close of, and the results of the applicable Loan Parties' operations and cash flows (where such cash flows are required to be provided) for, the period(s) presented, subject, however, to the following: (x) usual year end adjustments (this exception shall note be included in the Certificate which accompanies such annual statement); and (y) Material Accounting Changes, in which event, such Certificate shall include a schedule (in reasonable detail) of the effect of each such Material Accounting Change.

(b) Indicate either that (i) no Default has occurred and is continuing, or (ii) if such an event has occurred, its nature (in reasonable detail) and the steps (if any) being taken or contemplated by the Loan Parties to be taken on account thereof.

Section 7.09 Inventory, Appraisals and Audits.

(a) The Agent, at the reasonable expense of the Loan Parties, may participate in and/or observe each scheduled physical count of Inventory which is undertaken on behalf of any Loan Party.

(b) The Loan Parties, at their own expense, shall cause not less than one (1) physical inventory of each of Division to be undertaken in each twelve (12) month period during which this Agreement is in effect; (i) the Borrower, within forty-five (45) days following the completion of such inventory, shall provide the Agent with a reconciliation of the results of each such inventory (as well as of any other physical inventory undertaken by any Loan Party) and shall post such results to the Loan Parties' stock ledger and, as applicable to the Loan Parties' other financial books and records; and (ii) the Agent, in its reasonable, good faith discretion, if any Event of Default has occurred and is continuing, may cause such additional inventories to be taken as the Agent determines (each, at the expense of the Loan Parties).

(c) The Agent may require the Collateral Agents (as defined in the Revolving Credit Facility) to obtain appraisals of the Collateral (copies of which, subject to the approval of the appraiser, shall be provided to the Borrower promptly upon receipt thereof), at any time (i) after the occurrence and during the continuance of an Event of Default, (ii) that Excess Availability (as defined in the Revolving Credit Facility) is equal to or less than $48,000,000, or (iii) after an Inadvertent Overadvance (as defined in the Intercreditor Agreement) has occurred (in all events, at the Loan Parties' expenses) conducted by Hilco Appraisal Services, LLC or such appraisers as are satisfactory to the Agent and the Revolving Credit Agent, in addition to those appraisals permitted to be obtained by the Collateral Agents (as defined in the Revolving Credit Facility) pursuant to Section 5.9 of the Revolving Credit Facility. Following the termination of the Revolving Credit Facility, the Agent shall be entitled to conduct appraisals independently on the same terms granted to the Collateral Agents under the terms of the Revolving Credit Facility in effect on the Effective Date.

(d) If made available to any Loan Party, the Agent shall receive copies

of the results of any commercial finance field examination of the Loan Parties' books and records conducted during any period in which this Agreement is in effect.

(e) The Agent from time to time may undertake "mystery shopping" (so-called) visits to all or any of the Loan Parties' business premises.

Section 7.10 Additional Financial Information.

(a) In addition to all other information required to be provided pursuant to this Article VII, the Loan Parties promptly shall provide the Agent with such other and additional information concerning the Loan Parties, the operation of the Loan Parties' business, and the Loan Parties' financial condition, including original counterparts of financial reports and statements, as the Agent may from time to time reasonably request from the Borrower.

(b) The Parent and the Borrower shall, upon the Agent's request, provide the Agent, from time to time hereafter, with updated forecasts of the Loan Parties' anticipated performance and operating results for the current fiscal year. Such forecasts shall be in a format consistent with the format previously provided to the Agent.

(c) In all events, the Parent and the Borrower, no sooner than ninety (90) nor later than sixty (60) days prior to the end of each of the Loan Parties' fiscal years, shall provide the Agent with an updated and extended forecast which shall go out at least through the end of the then next fiscal year and shall include a statement of operations, balance sheet, and statement of cash flow, by month, each consolidated (with consolidating schedules by Division) and each prepared in conformity with GAAP and consistent with the Loan Parties' then current accounting practices.

(d) When available the "Annual Budget", as approved by the Parent's Board of Directors, shall be provided to the Agent. The Annual Budget shall be subject to the approval of the Agent (whose approval shall not be unreasonably withheld) only if the Annual Budget varies in a material way from the Business Plan for such fiscal year.

(e) Each Loan Party recognizes that all commercial finance examinations, inventories, analysis, financial information, and other materials which the Agent may obtain, develop, or receive with respect to the Loan Parties (other than appraisals and inventories received from third parties) are confidential to the Agent and that, except as otherwise provided herein, no Loan Party is entitled to receipt of any of such commercial finance examinations, inventories, analysis, financial information, and other materials, nor copies or extracts thereof or therefrom.

Section 7.11 Format of Information. All information required to be delivered pursuant to this Article VII may be delivered by and in electronic format.

ARTICLE VIII

USE OF COLLATERAL

Section 8.01 Use of Inventory Control.

(a) No Loan Party shall engage in any of the following with respect to its Inventory: (i) any sale, other than for fair consideration in the conduct of the Loan Parties' business in the ordinary course; (ii) sales or other dispositions to creditors, except returns in the ordinary course of business; (iii) sales or other dispositions in bulk, except in the ordinary course of business consistent with past practices; (iv) sales in breach of any provision of this Agreement; and (v) sales other than sales in connection with Permitted Dispositions.

(b) Without the prior consent of the Agent, no sale of Inventory shall be on consignment (other than between Loan Parties), approval, or under any other circumstances such that, with the exception of the Loan Parties' customary return policy applicable to the return of inventory purchased by the Loan Parties' retail customers in the ordinary course, such Inventory may be returned to a Loan Party without the consent of the Agent.

Section 8.02 Inventory Quality. All Inventory now owned or hereafter acquired by each Loan Party is and will be of good and merchantable quality, consistent with past practices.

Section 8.03 Adjustments and Allowances. Each Loan Party may grant such allowances or other adjustments to that Loan Party's Account Debtors as that Loan Party may reasonably deem to accord with sound business practice and which are normal and customary extensions and adjustments in the ordinary course of business, provided, however, the authority granted the Loan Parties pursuant to this Section 8.03 may be limited or terminated by the Agent at any time in the Agent's reasonable, good faith discretion after the occurrence and during the continuance of an Event of Default.

Section 8.04 Validity of Accounts.

(a) Except for adjustments and disputes in the ordinary course of business, the amount of each of the Accounts Receivable shown on the books, records, and invoices of the Loan Parties represented as owing by each Account Debtor is the correct amount actually owing by such Account Debtor and shall have been fully earned by performance by the Loan Parties.

(b) No Loan Party has any knowledge of any impairment of the validity or collectibility of any of the Accounts Receivable, other than returns, reserves, unauthorized use of credit cards, bad checks, adjustments and disputes which occur in the ordinary course of business. The Borrower shall notify the Agent of any such impairment immediately after any Loan Party becomes aware of any such impairment.

(c) No Loan Party shall post any bond to secure any Loan Party's performance under any agreement to which any Loan Party is a party nor cause any surety,

guarantor, or other third party obligee to become liable to perform any obligation of any Loan Party (other than to the Agent) in the event of any Loan Party's failure so to perform, if, as a result of the surety, guarantor or third party obligee's performance, such Person would obtain a Lien on any Collateral having priority to the Lien of the Agent.

Section 8.05 Notification to Account Debtors. The Agent shall have the right (after the occurrence of a Cash Control Event (as defined in the Revolving Credit Facility)) to notify any of the Loan Parties' Account Debtors to make payment directly to the Agent and to collect all amounts due on account of the Collateral, in each case, subject to the terms of the Intercreditor Agreement.

Section 8.06 Appointment as Attorney-In-Fact. Each Loan Party hereby irrevocably constitutes and appoints the Agent (acting through any officer of the Agent) as that Loan Party's true and lawful attorney, with full power of substitution, following the occurrence and during the continuance of an Event of Default and subject to the terms of the Intercreditor Agreement, to convert the Collateral into cash at the sole risk, cost, and expense of that Loan Party, but for the sole benefit of the Agent and the Lenders. The rights and powers granted the Agent by this appointment include but are not limited to the right and power to:

(a) Prosecute, defend, compromise, or release any action relating to the Collateral;

(b) Sign change of address forms to change the address to which each Loan Parties' mail is to be sent to such address as the Agent shall designate (after which copies of all such mail shall be promptly furnished to the Borrower); receive and open each Loan Parties' mail; remove any Collateral and proceeds of Collateral therefrom and turn over the balance of such mail either to the Loan Party or to any trustee in bankruptcy or receiver of the Borrower, or other legal representative of the Borrower whom the Agent determines to be the appropriate Person to whom to so turn over such mail;

(c) Endorse the name of the relevant Loan Party in favor of the Agent upon any and all checks, drafts, notes, acceptances, or other items or instruments; sign and endorse the name of the relevant Loan Party on, and receive as secured party, any of the Collateral, any invoices, schedules of Collateral, freight or express receipts, or bills of lading, storage receipts, warehouse receipts, or other documents of title respectively relating to the Collateral;

(d) Sign the name of the relevant Loan Party on any notice to that Loan Parties' Account Debtors or verification of the Collateral; sign the relevant Loan Parties' name on any proof of claim in bankruptcy against Account Debtors, and on notices of lien, claims of mechanic's liens, or assignments or releases of mechanic's liens securing the Accounts Receivable;

(e) Take all such action as may be necessary to obtain the payment of any letter of credit and/or banker's acceptance of which any Loan Party is a beneficiary;

(f) Repair, manufacture, assemble, complete, package, deliver, alter or supply goods, if any, necessary to fulfill in whole or in part the purchase order of any customer

of each Loan Party; and

(g) Use, license or transfer any or all General Intangibles of each Loan Party.

Section 8.07 No Obligation To Act. The Agent shall not be obligated to do any of the acts or to exercise any of the powers authorized by Section 8.06 herein, but if the Agent elects to do any such act or to exercise any of such powers, it shall not be accountable for more than it actually receives as a result of such exercise of power, and shall not be responsible to any Loan Party or any other Person for any act or omission to act except for any act or omission to act as to which there is a final determination made in a judicial proceeding (in which proceeding the Agent has had an opportunity to be heard) which determination includes a specific finding that the subject act or omission to act had been grossly negligent or in actual bad faith, or willful misconduct.

ARTICLE IX

EVENTS OF DEFAULT

Section 9.01 Events of Default. The occurrence of any event described in this Article IX respectively shall constitute an Event of Default herein. The occurrence of any Event of Default shall also constitute, without notice or demand, a default under all other agreements between the Agent or any Lender and any Loan Party and instruments and papers heretofore, now, or hereafter given the Agent or any Lender by any Loan Party in connection with any of the Loan Documents. An Event of Default shall occur upon:

(a) The failure by any Loan Party to pay when due any principal of, interest on, or fees in respect of, the Loan;

(b) The failure by any Loan Party or so long as any Lender holds any Warrants or Conversion Warrants, DSW to pay when due (or upon demand, if payable on demand) any payment Obligation other than any payment Obligation on account of the principal of, or interest on, or fees in respect of the Loan;

(c) The failure by (i) any Loan Party to promptly, punctually, faithfully and timely perform, discharge, or comply with any covenant or Obligation included in any of the following provisions hereof:

6.02(b)                         Indebtedness
6.01(b)                         Pay Taxes
6.02(g)                         Dividends. Investments. Other
                                   Corporate Actions
6.02(e)                         Loans and Advances
6.02(i)                         Affiliate Transactions
6.02(q)                         Excess Availability Reserve
6.02(u)                         Parent's Line of Business
Article VII                     Reporting Requirements (except as
                                   set forth in Section 9.01(d))
5(k) of the Security            Cash Management
   Agreement

or (ii) if at such time any Warrants or Conversion Warrants are held by a Lender, DSW to promptly, punctually, faithfully and timely perform, discharge or comply with any covenant or obligation contained in the Loan Documents to which it is a party;

(d) the failure by the Key Loan Parties to promptly, punctually, faithfully and timely perform, discharge, or comply with the financial reporting requirements included in Section 7.04, subject, however, to the following limited number of grace periods applicable to certain of those requirements:

                                                               NUMBER OF
REPORT/STATEMENT  REQUIRED BY SECTION    GRACE PERIOD        GRACE PERIODS
----------------  -------------------   ---------------   ------------------
 Weekly Report            7.04          2 Business Days      Twice any 12
                                                          consecutive months

(e) the failure by any Loan Party, within twenty (20) days following the earlier of any Authorized Officer's knowledge of a breach of any covenant or Obligation not described in any of clauses (a) through (d) above, or of its receipt of written notice from the Agent of the breach of any of such covenants or Obligations, provided that if such failure cannot be reasonably cured within such twenty (20) day period and the Loan Parties have diligently proceeded, and continue to diligently proceed, to effectuate a cure of such failure, such failure shall not be an Event of Default hereunder unless (i) such failure is not cured within twenty (20) days after the expiration of such initial twenty (20) day period, or (b) such failure, in the reasonable judgment of the Agent, is reasonably likely to have a Material Adverse Effect;

(f) the determination by the Agent that any representation or warranty at any time made by any Loan Party or DSW to the Agent or any Lender was not true or complete in all material respects when given;

(g) the occurrence and continuance of any Event of Default or other event, which with the giving of notice, the passage of time or both, would be an Event of Default under (i) the Revolving Credit Facility, or (ii) any other Indebtedness of any Loan Party equal to

or in excess of One Million Dollars ($1,000,000.00) to any creditor other than the Agent or any Lender, (whether or not such Indebtedness has been accelerated), or, Leases aggregating more than five percent (5%) of all Leases of the Loan Parties existing from time to time could be terminated due to a default by a Loan Party thereunder (whether or not the subject creditor or lessor takes any action on account of such occurrence);

(h) the occurrence of any breach of any covenant or Obligation imposed by, or of any default under, any agreement between the Agent or any Lender and any Loan Party or instrument given by any Loan Party to any Agent or any Lender relating to Indebtedness of any Loan Party in excess of $1,000,000 in the aggregate and the expiration, without cure, of any applicable grace period (notwithstanding that the Agent or Lender may not have exercised all or any of its rights on account of such breach or default);

(i) the occurrence of any uninsured loss, theft, damage, or destruction of or to any material portion of the Collateral;

(j) (i) the entry of any judgment in excess of Two Million Five Hundred Thousand Dollars ($2,500,000.00) against any Loan Party, which judgment (A) is not covered by insurance (as to which the insurer has not notified the applicable Loan Party of the insurer's reservation of rights) or (B) is not satisfied, stayed (if a money judgment) or appealed from (with execution or similar process stayed) within thirty (30) days of its entry;

(ii) the entry of any order or the imposition of any other process having the force of law, the effect of which is to restrain the conduct by any Key Loan Party of its business in the ordinary course and which is reasonably likely to have a Material Adverse Effect;

(k) any act by, against, or relating to any Loan Party, DSW or DSWSW, or their respective properties or assets, which act constitutes the determination, by such Person, to initiate a program of substantial or total self-liquidation; application for, consent to, or sufferance of the appointment of a receiver, trustee, or other Person, pursuant to court action or otherwise, over all, or any part of any Loan Party's, DSW's or DSWSW's property; the granting of any trust mortgage or execution of an assignment for the benefit of the creditors of any Loan Party, DSW or DSWSW, or the occurrence of any other voluntary or involuntary liquidation or extension of debt agreement for such Person; the offering by or entering into by any Loan Party, DSW or DSWSW of any composition, extension, or any other arrangement seeking relief generally from or extension of the debts of such Person; or the initiation of any judicial or non-judicial proceeding or agreement by, against, or including any Loan Party, DSW or DSWSW which seeks or intends to accomplish a reorganization or arrangement with creditors; and/or the initiation by or on behalf of any Loan Party, DSW or DSWSW of the liquidation or winding up of all or any part of such Person's business or operations except that any of the foregoing actions which are commenced against a Loan Party, DSW or DSWSW shall not be deemed an Event of Default hereunder as long as such action is timely contested in good faith by such Person by appropriate proceedings and is dismissed within 60 days of the institution of the foregoing;

(l) the failure by any Loan Party, DSW or DSWSW to generally pay

its debts as they mature; adjudication of bankruptcy or insolvency relative to any Loan Party, DSW or DSWSW; the entry of an order for relief or similar order with respect to any Loan Party, DSW or DSWSW in any proceeding pursuant to the Bankruptcy Code or any other Federal bankruptcy law; the filing of any complaint, application, or petition by any Loan Party, DSW or DSWSW initiating any matter in which such Person is or may be granted any relief from its debts pursuant to the Bankruptcy Code or any other insolvency statute or procedure; the filing of any complaint, application, or petition against any Loan Party, DSW or DSWSW initiating any matter in which such Person is or may be granted any relief from its debts pursuant to the Bankruptcy Code or any other insolvency statute or procedure, which complaint, application, or petition is not timely contested in good faith by such Person by appropriate proceedings or, if so contested, is not dismissed within 60 days of when filed;

(m) the termination or attempted termination of any Guaranty by any Guarantor;

(n) (i) any challenge by or on behalf of any Loan Party or DSW to the validity of any Loan Document or the applicability or enforceability of any Loan Document strictly in accordance with the subject Loan Document's terms or which seeks to void, avoid, limit, or otherwise adversely affect any security interest created by or in any Loan Document or any payment made pursuant thereto;

(ii) any determination by any court or any other judicial or Government Authority that any Loan Document is not enforceable strictly in accordance with the subject Loan Document's terms or which voids, avoids, limits, or otherwise adversely affects any security interest created by any Loan Document or any payment made pursuant thereto;

(o) the occurrence of any Change in Control;

(p) an event or development occurs which, as determined by the Agent in its discretion, has, or could reasonably be expected to have, a Material Adverse Effect;

(q) (i) the failure of the Parent to own, directly or indirectly, DSW Common Stock having at least 55% (except to the extent permitted by clauses (x) and (y) of the last sentence of Section 6.02(c)) of the value (calculated by reference to the Market Price) of all issued and outstanding DSW Common Stock (except to the extent permitted by clauses (x) and (y) of the last sentence of Section 6.02(c)), free and clear of all Liens (except Liens in favor of the Agent and to the extent permitted by the last sentence of the definition of the term "Permitted Liens"), (ii) the failure of the Agent to have a valid, perfected, first priority Lien on DSW Common Stock having at least 55% of the value (calculated by reference to the Market Price) of all issued and outstanding DSW Common Stock, except to the extent such failure results solely from the willful or intentional misconduct of the Agent, as determined by a final judgment of a court of competent jurisdiction) or (iii) the failure of DSW to own 100% of the Capital Stock of DSWSW;

(r) the failure of the holder of the DSW Note, the DSWSW Guarantee, the RVI Note or the RVI Pledge to comply in any respect with any subordination provision or any other intercreditor provision contained therein or in any pledge agreement related thereto; or

(s) (i) the failure of the Borrower to release its Lien on the Capital Stock of DSW upon exercise by the Warrantholders or the Conversion Warrantholders of the Warrants or the Conversion Warrants, as the case may be, to the extent necessary to permit such exercise (whether or not a default or event of default has then occurred under the RVI Note), (ii) the exercise by the Borrower of any right or remedy with respect to its Lien on the Capital Stock of DSW (A) at any time prior to the date on which the Parent has received written notice from the Senior Lenders that the Senior Obligations have been Paid in Full (each as defined in the RVI Note as in effect on the Effective Date), and (B) thereafter, without 90 days' prior written notice to the Warrantholders and the Conversion Warrantholders, and (iii) the consent by the Borrower or RVI to any modification of the terms of the RVI Note (except for Non Adverse Changes (as such term is defined therein as in effect on the Effective Date)) or any of the related documentation without the consent of the Lenders;

then, and in any such event, the Agent may, with the consent or at the direction of the Required Lenders, by notice to the Borrower, (i) declare all or any portion of the Loan and other Obligations then outstanding to be due and payable, whereupon all or such portion of the aggregate principal of the Loan and other Obligations, all accrued and unpaid interest thereon, all fees and all other amounts payable under this Agreement and the other Loan Documents shall become due and payable immediately, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party and (ii) exercise any and all of its other rights and remedies under Applicable Law, hereunder and under the other Loan Documents; provided, however, that upon the occurrence and during the continuance of any Event of Default described in subsection (k) or (l) of this Section 9.01, without any notice to any Loan Party or any other Person or any act by the Agent or any Lender, and the Loan, together with all accrued and unpaid interest and PIK Interest thereon, all fees and all other amounts due under this Agreement and the other Loan Documents shall become due and payable automatically and immediately, without presentment, demand, protest or notice of any kind, all of which are expressly waived by each Loan Party.

ARTICLE X

AGENT

Section 10.01 Appointment. Each Lender (and each subsequent maker of any Loan by its making thereof) hereby irrevocably appoints and authorizes the Agent to perform the duties of the Agent as set forth in this Agreement including: (i) to receive on behalf of each Lender any payment of principal of or interest on the Loan outstanding hereunder and all other amounts accrued hereunder for the account of the Lenders and paid to the Agent, and, subject to Sections 2.02 and 3.02 of this Agreement, to distribute promptly to each Lender its Pro Rata Share of all payments so received; (ii) to distribute to each Lender copies of all material notices and agreements received by the Agent and not required to be delivered to each Lender pursuant to the terms of this Agreement, provided that the Agent shall not have any liability to the Lenders for the Agent's inadvertent failure to distribute any such notices or agreements to the Lenders; (iii) to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Loan, and related matters and to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Collateral and related matters; (iv) to execute or file any and all financing or similar statements

or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to this Agreement or any other Loan Document; (v) to make Agent Advances, for the Agent or on behalf of the applicable Lenders as provided in this Agreement or any other Loan Document; (vi) to perform, exercise, and enforce any and all other rights and remedies of the Lenders with respect to the Loan Parties, the Obligations, or otherwise related to any of same to the extent reasonably incidental to the exercise by the Agent of the rights and remedies specifically authorized to be exercised by the Agent by the terms of this Agreement or any other Loan Document, or as directed by the Required Lenders; (vii) to incur and pay such fees necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to this Agreement or any other Loan Document; and
(viii) subject to Section 10.03 of this Agreement, to take such action as the Agent deems appropriate on its behalf to administer the Loan and the Loan Documents and to exercise such other powers delegated to the Agent by the terms hereof or the other Loan Documents (including, without limitation, the power to give or to refuse to give notices, waivers, consents, approvals and instructions and the power to make or to refuse to make determinations and calculations) together with such powers as are reasonably incidental thereto to carry out the purposes hereof and thereof. As to any matters not expressly provided for by this Agreement and the other Loan Documents (including, without limitation, enforcement or collection of the Loan), the Agent shall not be required to exercise any discretion or take any action, which, in the reasonable opinion of the Agent, exposes the Agent to liability or which is contrary to this Agreement or any other Loan Document or Applicable Law. The Lenders hereby agree that the Required Lenders shall make all decisions concerning (A) waivers, (B) amendments, (C) remedial action, including, without limitation, the right to call a default, accelerate take action to realize upon the Collateral, and (D) performance by the Lenders or enforcement of the rights of the Lenders hereunder and under the Intercreditor Agreement; provided, however, that the foregoing shall not limit the rights of all Lenders under Section 12.02 hereof.

Section 10.02 Nature of Duties. The Agent shall have no duties or responsibilities except those expressly set forth in this Agreement or in the other Loan Documents. The duties of the Agent shall be mechanical and administrative in nature. Neither the Agent nor the Lenders shall have by reason of this Agreement or any other Loan Document any fiduciary relationship. Nothing in this Agreement or any other Loan Document, express or implied, is intended to or shall be construed to impose upon the Agent or the Required Lenders any obligations in respect of this Agreement or any other Loan Document except as expressly set forth herein or therein. Each Lender shall make its own independent investigation of the financial condition and affairs of the Loan Parties in connection with the making and the continuance of the Loan hereunder and shall make its own appraisal of the creditworthiness of the Loan Parties and the value of the Collateral, and neither the Agent nor the Required Lenders shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the initial Loan hereunder or at any time or times thereafter; provided, that, upon the reasonable request of a Lender, the Agent shall provide to such Lender any documents or reports delivered to the Agent by the Loan Parties pursuant to the terms of this Agreement or any other Loan Document.

Section 10.03 Rights; Exculpation, Etc. Neither the Agent nor the Lenders, nor any of their respective directors, officers, agents or employees shall be liable for any action taken

or omitted to be taken by them under or in connection with this Agreement or the other Loan Documents, except for their own gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. Without limiting the generality of the foregoing, the Agent and the Lenders (i) may treat the payee of any Loan as the owner thereof until the Agent receives written notice of the assignment or transfer thereof, pursuant to
Section 12.07 hereof, signed by such payee and in form satisfactory to the Agent; (ii) may consult with legal counsel (including, without limitation, counsel to the Agent or counsel to the Loan Parties), independent public accountants, and other experts selected by any of them and shall not be liable for any action taken or omitted to be taken in reasonable good faith by any of them in accordance with the advice of such counsel or experts; (iii) make no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, certificates, warranties or representations made in or in connection with this Agreement or the other Loan Documents; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the other Loan Documents on the part of any Person, the existence or possible existence of any Default or Event of Default, or to inspect the Collateral or other property (including, without limitation, the books and records) of any Person; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto. Neither the Agent nor the Required Lenders shall be liable for any apportionment or distribution of payments made in good faith pursuant to Section 3.04; and (vi) shall not be deemed to have made any representation or warranty regarding the existence, value or collectibility of the Collateral, the existence, priority or perfection of the Agent's Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Agent or the Required Lenders be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral. The Agent may at any time (but shall not be required to) request instructions from the Required Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the other Loan Documents the Agent is permitted or required to take or to grant, and if such instructions are promptly requested, the Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval under any of the Loan Documents until it shall have received such instructions from the Required Lenders. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Agent as a result of the Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Required Lenders, or against the Required Lenders on the same basis for which a right of action could be brought against the Agent in connection with such acting or refraining from acting, except to the extent such action, lack of action or instruction is determined by a court of competent jurisdiction, pursuant to a final judgment, to have constituted gross negligence or willful misconduct.

Section 10.04 Reliance. The Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message believed by it in reasonable good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement or any of the other Loan Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.

Section 10.05 Indemnification. To the extent that the Agent is not reimbursed and indemnified by any Loan Party, the Lenders will reimburse and indemnify the Agent from

and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any of the other Loan Documents (it being understood that the foregoing shall not be deemed to include principal, interest or fees owed by a Loan Party to the Agent) or any action taken or omitted by the Agent under this Agreement or any of the other Loan Documents, in proportion to each Lender's Pro Rata Share, including, without limitation, advances and disbursements made pursuant to Section 10.08; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements for which there has been a final judicial determination that such liability resulted from the Agent's gross negligence or willful misconduct. The obligations of the Lenders under this
Section 10.05 shall survive the payment in full of the Loan and the termination of this Agreement.

Section 10.06 Agent Individually. With respect to its Pro Rata Share of the Loan made by it, the Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender or maker of a Loan. The term "Lenders" or "Required Lenders" or any similar terms shall, unless the context clearly otherwise indicates, include the Agent in its individual capacity as a Lender. The Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, trust or other business with any Key Loan Party as if it were not acting as the Agent pursuant hereto without any duty to account to the other Lenders.

Section 10.07 Successor Agent. (a) The Agent may resign from the performance of all its functions and duties hereunder and under the other Loan Documents at any time by giving at least thirty (30) Business Days' prior written notice to the Borrower and each Lender. Such resignation shall take effect upon the acceptance by a successor Agent of appointment pursuant to clauses (b) and (c) below or as otherwise provided below.

(b) Upon any such notice of resignation, the Borrower shall appoint a successor Agent acceptable to SSC. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the Agent, and the Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. After the Agent's resignation hereunder as the Agent, the provisions of this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Agent under this Agreement and the other Loan Documents.

(c) If a successor Agent shall not have been so appointed within said thirty (30) Business Day period, the Agent shall then appoint a successor Agent who shall serve as the Agent until such time, if any, as the Borrower (with the consent of SSC) appoints a successor Agent as provided above.

Section 10.08 Collateral Matters.

(a) The Agent may from time to time make such disbursements and advances ("Agent Advances") which the Agent, in its sole discretion, deems reasonably

necessary or desirable to preserve, protect, prepare for sale or lease or dispose of the Collateral or any portion thereof, to enhance the likelihood or maximize the amount of repayment by the Borrower of the Loan and other Obligations or to pay any other amount chargeable to the Key Loan Parties pursuant to the terms of this Agreement, including, without limitation, costs, fees and expenses as described in Section 12.04. The Agent Advances shall be repayable on demand and be secured by the Collateral. The Agent Advances shall constitute Obligations hereunder. The Agent shall notify each Lender and the Borrower in writing of each such Agent Advance, which notice shall include a description of the purpose of such Agent Advance. Without limitation to its obligations pursuant to Section 10.05, each Lender agrees that it shall make available to the Agent, upon the Agent's demand, in Dollars in immediately available funds, the amount equal to such Lender's Pro Rata Share of each such Agent Advance. If such funds are not made available to the Agent by such Lender, the Agent shall be entitled to recover such funds on demand from such Lender, together with interest thereon for each day from the date such payment was due until the date such amount is paid to the Agent, at the Federal Funds Rate for three Business Days and thereafter at the Reference Rate.

(b) The Lenders hereby irrevocably authorize the Agent, at its option and in its discretion, to release any Lien granted to or held by the Agent upon any Collateral upon payment and satisfaction of the Loan and all other Obligations which have matured and which the Agent has been notified in writing are then due and payable; or constituting property being sold or disposed of in compliance with the terms of this Agreement and the other Loan Documents; or constituting property in which the Loan Parties owned no interest at the time the Lien was granted or at any time thereafter; or if approved, authorized or ratified in writing by the Lenders. Upon request by the Agent at any time, the Lenders will confirm in writing the Agent's authority to release particular types or items of Collateral pursuant to this Section 10.08(b).

(c) Without in any manner limiting the Agent's authority to act without any specific or further authorization or consent by the Lenders (as set forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon request by the Agent, the authority to release Collateral conferred upon the Agent under Section 10.08(b). Upon receipt by the Agent of confirmation from the Lenders of its authority to release any particular item or types of Collateral, and upon prior written request by any Loan Party, the Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Agent for the benefit of the Lenders upon such Collateral; provided, however, that (i) the Agent shall not be required to execute any such document on terms which, in the Agent's opinion, would expose the Agent to liability or create any obligations or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Lien upon (or obligations of any Loan Party in respect of) all interests in the Collateral retained by any Loan Party.

(d) The Agent shall have no obligation whatsoever to any Lender to assure that the Collateral exists or is owned by the Loan Parties or is cared for, protected or insured or has been encumbered or that the Lien granted to the Agent pursuant to this Agreement or any other Loan Document has been properly or sufficiently or lawfully created, perfected, protected or enforced or is entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any

of the rights, authorities and powers granted or available to the Agent in this
Section 10.08 or in any other Loan Document, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Agent may act in any manner it may deem appropriate, in its sole discretion, given the Agent's own interest in the Collateral as one of the Lenders and that the Agent shall have no duty or liability whatsoever to any other Lender, except as otherwise provided herein.

Section 10.09 Agency for Perfection. Each Lender hereby appoints the Agent and each other Lender as agent and bailee for the purpose of perfecting the security interests in and liens upon the Collateral in assets which, in accordance with Article 9 of the Uniform Commercial Code, can be perfected only by possession or control (or where the security interest of a secured party with possession or control has priority over the security interest of another secured party) and each Agent and each Lender hereby acknowledges that it holds possession of or otherwise controls any such Collateral for the benefit of the Agent and the Lenders as secured party. Should any Lender obtain possession or control of any such Collateral, such Lender shall notify the Agent thereof, and, promptly upon the Agent's request therefor shall deliver such Collateral to the Agent or in accordance with the Agent's instructions. Each Loan Party by its execution and delivery of this Agreement hereby consents to the foregoing.

ARTICLE XI

GUARANTY

Section 11.01 Guaranty. Each Guarantor hereby unconditionally and irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all Obligations of the Borrower and the Parent, now or hereafter existing under any Loan Document, whether for principal, interest (including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding of the Borrower or the Parent), fees, commissions, indemnifications or otherwise (such obligations, to the extent not paid by the Borrower or the Parent, as applicable, being the "Guaranteed Obligations"), and agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Agent and the Lenders in enforcing any rights under the Guaranty set forth in this Article XI. Without limiting the generality of the foregoing, each Guarantor's liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Borrower or the Parent, as applicable, to the Agent and the Lenders under any Loan Document but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving the Borrower or the Parent, as applicable.

Section 11.02 Guaranty Absolute. Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Agent or the Lenders with respect thereto. The Obligations of each Guarantor under this Article XI are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce such Obligations, irrespective of whether any action is brought against any Loan Party or any other Person or whether any Loan Party or any other Person is joined in any such action or actions. The liability of each Guarantor under this Article XI shall be

irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following:

(a) Any lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto;

(b) Any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or otherwise;

(c) Any taking, exchange, release or non-perfection of any Collateral, or any taking, release or amendment or waiver of or consent to departure from any other Guaranty, for all or any of the Guaranteed Obligations;

(d) Any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Loan Party; or

(e) Any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Agent or the Lenders that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other Guarantor or surety.

This Article XI shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the Agent, the Lenders or any other person upon the insolvency, bankruptcy or reorganization of the Borrower or the Parent or otherwise, all as though such payment had not been made.

Section 11.03 Waiver. Each Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Article XI and any requirement that the Agent or the Lenders exhaust any right or take any action against any Loan Party or any other Person or any Collateral. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 11.03 is knowingly made in contemplation of such benefits. Each Guarantor hereby waives any right to revoke this Article XI, and acknowledges that this Article XI is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

Section 11.04 Continuing Guaranty; Assignments. This Article XI is a continuing guaranty and shall (a) remain in full force and effect until the later of the cash payment in full of the Guaranteed Obligations (other than indemnification obligations as to which no claim has been made) and all other amounts payable under this Article XI and the Final Maturity Date, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Agent and the Lenders and their successors, pledgees, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Lender may pledge, assign or otherwise transfer all or any portion of its rights and obligations under this

Agreement (including, without limitation, all or any portion of its Pro Rata Share of the Loan owing to it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted such Lender herein or otherwise, in each case as provided in Section 12.07.

Section 11.05 Subrogation. No Guarantor will exercise any rights that it may now or hereafter acquire against any Loan Party or any other Guarantor that arise from the existence, payment, performance or enforcement of such Guarantor's obligations under this Article XI, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Agent and the Lenders against any Loan Party or any other Guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Loan Party or any other Guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under this Article XI shall have been paid in full in cash and the Final Maturity Date shall have occurred. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the later of the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Article XI and the Final Maturity Date, such amount shall be held in trust for the benefit of the Agent and the Lenders and shall forthwith be paid to the Agent and the Lenders to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Article XI, whether matured or unmatured, in accordance with the terms of this Agreement or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Article XI thereafter arising. If (i) any Guarantor shall make payment to the Agent and the Lenders of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Article XI shall be paid in full in cash and (iii) the Final Maturity Date shall have occurred, the Agent and the Lenders will, at such Guarantor's request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.

ARTICLE XII

MISCELLANEOUS

Section 12.01 Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, postage, prepaid and return receipt requested), telecopied or delivered, if to any Loan Party, at the following address:

Value City Department Stores LLC 3241 Westerville Road
Columbus, OH 43224
Attention: General Counsel
Telephone: (614) 478-3424
Telecopier: (614) 473-4682

with a copy to:

Simpson Thacher & Bartlett LLP 425 Lexington Avenue
New York, New York 10017
Attention: David Mack, Esq./Alan Brenner, Esq.

Telephone: 212-455-2518/3378

Telecopier: 212-455-2502

if to the Agent, to it at the following address:

Cerberus Partners, L.P.
299 Park Avenue
New York, New York 10171
Attention: Lenard Tessler
Telephone: (212) 909-1464
Telecopier: (212) 755-3009

with a copy to:

Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention: Nancy Finkelstein, Esq.

Telephone: 212-756-2419

Telecopier: 212-593-5955

or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties complying as to delivery with the terms of this Section 12.01. All such notices and other communications shall be effective, (i) if sent by certified mail, return receipt requested, the date when actually received, (ii) if sent by recognized overnight express delivery, the Business Day following the day when sent, (iii) if delivered by hand on a Business Day after 9:00 AM and no later than three (3) hours prior to the close of customary business hours of the recipient, when delivered (otherwise, at the opening of the then next Business Day), and (iv) by telecopier and sent on a Business Day after 9:00 AM and no later than three (3) hours prior to the close of customary business hours of the recipient, one (1) hour after being sent (otherwise, at the opening of the then next Business Day).

Section 12.02 Amendments, Etc. No amendment or waiver of any provision of this Agreement, and no consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent, the Borrower and the Guarantors, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given, provided, however, that no amendment, waiver or consent shall (i) reduce the principal of, or interest on, the Loan, reduce the amount of any fee payable for the account of any Lender, or postpone or extend any date fixed for any payment of principal of, or interest or fees on the Loan payable to any Lender, in each case without the written consent of any Lender affected thereby, (ii) amend the definition of "Pro Rata Share",

(iii) release all or a substantial portion of the Collateral (except as otherwise provided in this Agreement and the other Loan Documents), subordinate any Lien granted in favor of the Agent for the benefit of the Lenders, or release the Borrower or any Guarantor or (iv) amend, modify or waive Section 3.04, Article XII or this Section 12.02 of this Agreement in each case, without the written consent of each Lender. Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in writing and signed by the Agent, affect the rights or duties of the Agent (but not in its capacity as a Lender) under this Agreement or the other Loan Documents.

Section 12.03 No Waiver; Remedies, Etc. No failure on the part of the Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Agent and the Lenders provided herein and in the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Agent and the Lenders under any Loan Document against any party thereto are not conditional or contingent on any attempt by the Agent and the Lenders to exercise any of their rights under any other Loan Document against such party or against any other Person.

Section 12.04 Expenses; Taxes; Attorneys' Fees. The Borrower will pay within ten (10) days after demand therefor (which demand shall include a statement of the nature thereof), all costs and expenses incurred by or on behalf of the Agent and each Lender, regardless of whether the transactions contemplated hereby are consummated, including, without limitation, reasonable fees, costs, client charges and expenses of counsel for the Agent and each Lender), accounting, due diligence, periodic field audits, physical counts, valuations, investigations, searches and filings, monitoring of assets, appraisals of Collateral, title searches and reviewing environmental assessments, miscellaneous disbursements, examination, travel, lodging and meals, arising from or relating to the following: (a) the negotiation, preparation, execution, delivery, performance and administration of this Agreement and the other Loan Documents (including, without limitation, the preparation of any additional Loan Documents pursuant to Section 6.01(b) or the review of any of the agreements, instruments and documents referred to in
Section 6.01(f)); (b) any requested amendments, waivers or consents to this Agreement or the other Loan Documents whether or not such documents become effective or are given; (c) the preservation and protection of any of the Lenders' rights under this Agreement or the other Loan Documents; (d) the defense of any claim or action asserted or brought against the Agent or any Lender by any Person that arises from or relates to this Agreement, any other Loan Document, the Agent's or the Lenders' claims against any Loan Party, or any and all matters in connection therewith; (e) the commencement or defense of, or intervention in, any court proceeding arising from or related to this Agreement or any other Loan Document; (f) the filing of any petition, complaint, answer, motion or other pleading by the Agent or any Lender, or the taking of any action in respect of the Collateral or other security, in connection with this Agreement or any other Loan Document; (g) the protection, collection, lease, sale, taking possession of or liquidation of, any Collateral or other security in connection with this Agreement or any other Loan Document; (h) any attempt to enforce any Lien or security interest in any Collateral or other security in connection with this Agreement or any other Loan Document; (i) any attempt to collect from any Loan Party; (j) all liabilities and costs arising from or in connection with the past, present or future operations of any Loan Party involving any

damage to real or personal property or natural resources or harm or injury alleged to have resulted from any Release of Hazardous Materials on, upon or into such property; (k) any Environmental Liabilities and Costs incurred in connection with the investigation, removal, cleanup and/or remediation of any Hazardous Materials present or arising out of the operations of any facility of any Loan Party; (l) any Environmental Liabilities and Costs incurred in connection with any Environmental Lien; or (m) the receipt by the Agent or any Lender of any advice from professionals with respect to any of the foregoing; provided that with respect to clauses (d), (e) and (f) above, such costs and expenses shall not include those costs and expenses that have been determined by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Lender or Agent, as the case may be. Without limitation of the foregoing or any other provision of any Loan Document: (x) the Borrower agree to pay all stamp, document, transfer, recording or filing taxes or fees and similar impositions now or hereafter determined by the Agent or any Lender to be payable in connection with this Agreement or any other Loan Document, and the Borrower agrees to save the Agent and each Lender harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any such taxes, fees or impositions unless such omission is the result of the gross negligence or willful misconduct of any Lender; (y) the Borrower agrees to pay all broker and investment banking fees that may become due in connection with the transactions contemplated by this Agreement and the other Loan Documents (the Agent and the Lenders represent and warrant that no brokers have been engaged or retained by any of them in connection with the transactions evidenced by the Loan Documents); and (z) if the Borrower fails to perform any covenant or agreement contained herein or in any other Loan Document, the Agent may itself perform or cause performance of such covenant or agreement, and the expenses of the Agent incurred in connection therewith shall be reimbursed on demand by the Borrower.

Section 12.05 Right of Set-off. Upon the occurrence and during the continuance of any Event of Default, the Agent or any Lender may, and is hereby authorized to, at any time and from time to time, without notice to any Loan Party (any such notice being expressly waived by the Loan Parties) and to the fullest extent permitted by law, set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by the Agent or such Lender to or for the credit or the account of any Loan Party against any and all obligations of the Loan Parties either now or hereafter existing under any Loan Document, irrespective of whether or not the Agent or such Lender shall have made any demand hereunder or thereunder and although such obligations may be contingent or unmatured. The Agent and each Lender agree to notify such Loan Party promptly after any such set-off and application made by the Agent or such Lender provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Agent and the Lenders under this Section 12.05 are in addition to the other rights and remedies (including other rights of set-off) which the Agent and the Lenders may have under this Agreement or any other Loan Documents of law or otherwise.

Section 12.06 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

Section 12.07 Assignments and Participations. (a) This Agreement and the other Loan Documents shall be binding upon and inure to the benefit of each Loan Party and the Agent and each Lender and their respective successors and assigns; provided, however, that none of the Loan Parties may assign or transfer any of its rights hereunder without the prior written consent of each Lender and any such assignment without the Lenders' prior written consent shall be null and void.

(b) Each Lender may, with the written consent (which consent shall not be unreasonably withheld) of SSC (so long as SSC is the Agent or a Lender under this Agreement) and the Borrower (so long as no Event of Default has occurred and is continuing), assign to one or more other Lenders or other Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of the Loan made by it); provided, however, that (i) such assignment is in an amount which is at least $5,000,000 or a multiple of $1,000,000 in excess thereof (or the remainder of such Lender's Pro Rata Share of the Loan) (except such minimum amount shall not apply to an assignment by a Lender to an Affiliate of such Lender or a fund or account managed by such Lender or an Affiliate of such Lender or, in the case of SSC, a shareholder of such Lender), (ii) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance, an Assignment and Acceptance, together with any promissory note subject to such assignment and such parties shall deliver to the Agent a processing and recordation fee of $5,000 (except the payment of such fee shall not be required in connection with an assignment by a Lender to an Affiliate of such Lender or a fund or account managed by such Lender or an Affiliate of such Lender, or, in the case of SSC, a shareholder of such Lender) and (iii) no written consent of the SSC and the Borrower shall be required in connection with any assignment by a Lender to an Affiliate of such Lender or a fund or account managed by such Lender or an Affiliate of such Lender, or in the case of SSC, a shareholder of such Lender. Upon such execution, delivery and acceptance, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least three (3) Business Days after the delivery thereof to the Agent (or such shorter period as shall be agreed to by the Agent and the parties to such assignment), (A) the assignee thereunder shall become a "Lender" hereunder and, in addition to the rights and obligations hereunder held by it immediately prior to such effective date, have the rights and obligations hereunder that have been assigned to it pursuant to such Assignment and Acceptance and (B) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

(i) By executing and delivering an Assignment and Acceptance, the assigning Lender and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (A) other than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto provided that such assigning Lender's obligations and responsibilities under the confidentiality provisions of this Agreement shall continue despite any assignment by

such assigning Lender; (B) the assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or any of its Subsidiaries or the performance or observance by any Loan Party of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto; (C) such assignee confirms that it has received a copy of this Agreement and the other Loan Documents, together with such other documents and information it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (D) such assignee will, independently and without reliance upon the assigning Lender, the Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents; (E) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Agent by the terms hereof and thereof, together with such powers as are reasonably incidental hereto and thereto; and (F) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and the other Loan Documents are required to be performed by it as a Lender.

(ii) The Borrower authorizes the Agent, and the Agent agrees, to maintain, or cause to be maintained at the Payment Office, a copy of each Assignment and Acceptance delivered to and accepted by it and a register (the "Register") for the recordation of the names and addresses of the Lenders, and the principal amount of the Loan (the "Registered Loans") owing to each Lender from time to time. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Agent and the Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(iii) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee, together with any promissory notes subject to such assignment, the Agent shall, if the Agent consents to such assignment and if such Assignment and Acceptance has been completed (A) accept such Assignment and Acceptance and (B) record the information contained therein in the Register.

(iv) In addition to the other requirements contained in this Section 12.07, a Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each registered note shall expressly so provide). Any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s). Prior to the registration of assignment or sale of any Registered Loan (and the registered note, if any, evidencing the same), the Agent shall treat the Person in whose name such Registered Loan (and the registered note, if any, evidencing the same) is

registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary.

(v) In the event that any Lender sells participations in a Registered Loan, such Lender shall maintain a register on which it enters the name of all participants in the Registered Loans held by it (the "Participant Register"). A Registered Loan (and the registered note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide). Any participation of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register.

(vi) Any foreign Person who purchases or is assigned or participates in any portion of such Registered Loan shall provide the Agent and the assigning or selling Lender with a completed Internal Revenue Service Form W-8BEN (Certificate of Foreign Status) or a substantially similar form for such purchaser, participant or any other affiliate who is a holder of beneficial interests in the Registered Loan.

(c) Each Lender may, with the written consent (which consent shall not be unreasonably withheld) of SSC (so long as SSC is the Agent or a Lender under this Agreement) and the Borrower (so long as no Event of Default has occurred and is continuing), sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or a portion of its Pro Rata Share of the Loan made by it); provided, that (i) such Lender's obligations under this Agreement (including without limitation, its Commitments hereunder) and the other Loan Documents shall remain unchanged;
(ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and the Borrower, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Loan Documents; (iii) a participant shall not be entitled to require such Lender to take or omit to take any action hereunder except (A) action directly effecting an extension of the maturity dates or decrease in the principal amount of the Loan, (B) action directly effecting an extension of the due dates or a decrease in the rate of interest payable on the Loan or the fees payable under this Agreement, or (C) actions directly effecting a release of any Loan Party (except as provided otherwise by this Agreement or any other Loan Document); and (iv) no consent of SSC or the Borrower will be required for the sale by a Lender to an Affiliate of such Lender or a fund or account managed by such Lender or an Affiliate of such Lender.

Section 12.08 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by telecopier shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telecopier also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.

SECTION 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.

SECTION 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT AND THE LENDERS TO SERVICE OF PROCESS IN ANY MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

SECTION 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, THE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS

AGREEMENT.

Section 12.12 Consent by the Agent and Lenders. Except as otherwise expressly set forth herein to the contrary, if the consent, approval, satisfaction, determination, judgment, acceptance or similar action (an "Action") of the Agent shall be permitted or required pursuant to any provision hereof or any provision of any other agreement to which any Loan Party is a party and to which the Agent or any Lender has succeeded thereto, such Action shall be required to be in writing and may be withheld or denied by the Agent, in its sole good faith discretion.

Section 12.13 No Party Deemed Drafter. Each of the parties hereto agrees that no party hereto shall be deemed to be the drafter of this Agreement.

Section 12.14 Reinstatement; Certain Payments. If any claim is ever made upon the Agent or any Lender for repayment or recovery of any amount or amounts received by the Agent or such Lender in payment or on account of any of the Obligations, the Agent or such Lender shall give prompt notice of such claim to each other Lender and the Borrower, and if the Agent or such Lender repays all or part of such amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over the Agent or such Lender or any of its property, or (ii) any good faith settlement or compromise of any such claim effected by the Agent or such Lender with any such claimant, then and in such event each Loan Party agrees that (A) any such judgment, decree, order, settlement or compromise shall be binding upon it notwithstanding the cancellation of any Indebtedness hereunder or under the other Loan Documents or the termination of this Agreement or the other Loan Documents, and (B) it shall be and remain liable to the Agent or such Lender hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the Agent or such Lender.

Section 12.15 Indemnification.

(a) General Indemnity. In addition to each Loan Party's other Obligations under this Agreement, each Loan Party agrees to, jointly and severally, defend, protect, indemnify and hold harmless the Agent and each Lender and all of their respective officers, directors, employees, attorneys, consultants and agents (collectively called the "Indemnitees") from and against any and all losses, damages, liabilities, obligations, penalties, reasonable fees, costs and expenses (including, without limitation, reasonable attorneys' fees, costs and expenses) incurred by such Indemnitees, whether prior to or from and after the Effective Date, whether direct, indirect or consequential, as a result of or arising from or relating to or in connection with any of the following: (i) the negotiation, preparation, execution or performance or enforcement of this Agreement, any other Loan Document or of any other document executed in connection with the transactions contemplated by this Agreement;
(ii) the Agent's or any Lender's furnishing of funds to the Borrower under this Agreement or the other Loan Documents, including, without limitation, the management of the Loan; (iii) any matter relating to the financing transactions contemplated by this Agreement or the other Loan Documents or by any document executed in connection with the transactions contemplated by this Agreement or the other Loan Documents; or (iv) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto (collectively, the "Indemnified Matters"); provided, however, that the Loan Parties shall not have

any obligation to any Indemnitee under this subsection (a) for any Indemnified Matter caused by the gross negligence or willful misconduct of such Indemnitee, as determined by a final judgment of a court of competent jurisdiction.

(b) Environmental Indemnity. Without limiting Section 12.15(a) hereof, each Loan Party agrees to, jointly and severally, defend, indemnify, and hold harmless the Indemnitees against any and all Environmental Liabilities and Costs and all other claims, demands, penalties, fines, liability (including strict liability), losses, damages, costs and expenses (including without limitation, reasonable legal fees and expenses, consultant fees and laboratory fees), arising out of (i) any Releases or threatened Releases (A) at any property presently or formerly owned or operated by any Loan Party or any Subsidiary of any Loan Party, or any predecessor in interest, or (B) of any Hazardous Materials generated and disposed of by any Loan Party or any Subsidiary of any Loan Party, or any predecessor in interest; (ii) any violations of Environmental Laws; (iii) any Environmental Action relating to any Loan Party or any Subsidiary of any Loan Party, or any predecessor in interest;
(iv) any personal injury (including wrongful death) or property damage (real or personal) arising out of exposure to Hazardous Materials used, handled, generated, transported or disposed by any Loan Party or any Subsidiary of any Loan Party, or any predecessor in interest; and (v) any breach of any warranty or representation regarding environmental matters made by the Loan Parties in
Section 6.01(g) or the breach of any covenant made by the Loan Parties in
Section 5.01(r). Notwithstanding the foregoing, the Loan Parties shall not have any obligation to any Indemnitee under this subsection (b) regarding any potential environmental matter covered hereunder which is caused by the gross negligence or willful misconduct of such Indemnitee, as determined by a final judgment of a court of competent jurisdiction.

(c) To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section 12.15 may be unenforceable because it is violative of any law or public policy, each Loan Party shall, jointly and severally, contribute the maximum portion which it is permitted to pay and satisfy under Applicable Law, to the payment and satisfaction of all Indemnified Matters incurred by the Indemnitees. The indemnities set forth in this Section 12.15 shall survive the repayment of the Obligations and discharge of any Liens granted under the Loan Documents.

Section 12.16 [Intentionally Omitted.]

Section 12.17 Records. The unpaid principal of and interest on the Loan, the interest rate or rates applicable to such unpaid principal and interest, the duration of such applicability, and the accrued and unpaid fees shall at all times be ascertained from the records of the Agent, which shall be rebuttably presumed to be correct, absent manifest error.

Section 12.18 Binding Effect. This Agreement shall become effective when it shall have been executed by each Loan Party, the Agent and each Lender and when the conditions precedent set forth in Section 4.01 hereof have been satisfied or waived in writing by the Agent, and thereafter shall be binding upon and inure to the benefit of each Loan Party, the Agent and each Lender, and their respective successors and assigns, except that the Loan Parties shall not have the right to assign their rights hereunder or any interest herein without the prior written consent of each Lender, and any assignment by any Lender shall be governed by

Section 12.07 hereof.

Section 12.19 Maximum Interest. It is the intention of the parties hereto that the Agent and each Lender shall conform strictly to usury laws applicable to it. Accordingly, if the transactions contemplated hereby or by any other Loan Document would be usurious as to the Agent or any Lender under laws applicable to it (including the laws of the United States of America and the State of New York or any other jurisdiction whose laws may be mandatorily applicable to the Agent or such Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in this Agreement or any other Loan Document or any agreement entered into in connection with or as security for the Obligations, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under law applicable to the Agent or any Lender that is contracted for, taken, reserved, charged or received by the Agent or such Lender under this Agreement or any other Loan Document or agreements or otherwise in connection with the Obligations shall under no circumstances exceed the maximum amount allowed by such applicable law, any excess shall be canceled automatically and if theretofore paid shall be credited by the Agent or such Lender on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by the Agent or such Lender, as applicable, to the Borrower); and (ii) in the event that the maturity of the Obligations is accelerated by reason of any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to the Agent or any Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically by the Agent or such Lender, as applicable, as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by the Agent or such Lender, as applicable, on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by the Agent or such Lender to the Borrower). All sums paid or agreed to be paid to the Agent or any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to the Agent or such Lender, be amortized, prorated, allocated and spread throughout the full term of the Loan until payment in full so that the rate or amount of interest on account of the Loan hereunder does not exceed the maximum amount allowed by such applicable law. If at an time and from time to time (x) the amount of interest payable to the Agent or any Lender on any date shall be computed at the Highest Lawful Rate applicable to the Agent or such Lender pursuant to this Section 12.19 and (y) in respect of any subsequent interest computation period the amount of interest otherwise payable to the Agent or such Lender would be less than the amount of interest payable to the Agent or such Lender computed at the Highest Lawful Rate applicable to the Agent or such Lender, then the amount of interest payable to the Agent or such Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to the Agent or such Lender until the total amount of interest payable to the Agent or such Lender shall equal the total amount of interest which would have been payable to the Agent or such Lender if the total amount of interest had been computed without giving effect to this Section 12.19.

For purposes of this Section 12.19, the term "applicable law" shall mean that law in effect from time to time and applicable to the loan transaction between the Borrower, on the one hand, and the Agent and the Lenders, on the other, that lawfully permits the charging and

collection of the highest permissible, lawful non-usurious rate of interest on such loan transaction and this Agreement, including laws of the State of New York and, to the extent controlling, laws of the United States of America.

The right to accelerate the maturity of the Obligations does not include the right to accelerate any interest that has not accrued as of the date of acceleration.

Section 12.20 Confidentiality. The Agent and each Lender agrees (on behalf of itself and each of its affiliates, directors, officers, employees and representatives) to use reasonable precautions to keep confidential, in accordance with its customary procedures for handling confidential information of this nature and in accordance with safe and sound practices of comparable commercial finance companies, any non-public information supplied to it by the Loan Parties pursuant to this Agreement or the other Loan Documents which is identified in writing by the Loan Parties as being confidential at the time the same is delivered to such Person (or consists of information (such as business plans and financial information) which is customarily confidential information) (and which at the time is not, and does not thereafter become, publicly available or legally available to such Person from another source (other than the Loan Parties) on a nonconfidential basis), provided, that nothing herein shall limit the disclosure of any such information (i) to the extent required by statute, rule, regulation or judicial process, (ii) to counsel for the Agent or any Lender, (iii) to examiners, auditors, accountants or Securitization Parties, so long as such Person first agrees, in writing, to be bound by confidentiality provisions similar in substance to this Section 12.20, (iv) in connection with any litigation to which the Agent or any Lender is a party or (v) to any assignee or participant (or prospective assignee or participant) so long as such assignee or participant (or prospective assignee or participant) first agrees, in writing, to be bound by confidentiality provisions similar in substance to this Section 12.20. The Agent and each Lender agrees that, upon receipt of a request or identification of the requirement for disclosure pursuant to clause
(iv) hereof, it will make reasonable efforts to keep the Loan Parties informed of such request or identification; provided, that the each Loan Party acknowledges that the Agent and each Lender may make disclosure as required or requested by any Governmental Authority or representative thereof and that the Agent and each Lender may be subject to review by Securitization Parties or other regulatory agencies and may be required to provide to, or otherwise make available for review by, the representatives of such parties or agencies any such non-public information.

Section 12.21 Integration. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.

ARTICLE XIII
ISSUANCE OF EQUITY INTERESTS TO LENDERS

Section 13.01 Authorization and Issuance of Warrants. On the Effective Date, the Parent shall issue to the Lenders one or more warrant certificates covering the purchase of shares of Common Stock and Class A Common Shares substantially in the form of Exhibit B-2 hereto (such certificates, together with the rights to purchase Common Stock and Class A Common Shares provided thereby and all warrant certificates covering such stock issued upon

transfer, division or combination of, or in substitution for, any thereof, being herein called the "Conversion Warrants") in an aggregate amount equal to, on the Effective Date, in the case of an exercise of the Conversion Warrants for Common Stock, the Common Stock Exercise Amount (as defined in the Conversion Warrant), and in the case of an exercise of the Conversion Warrants for Class A Common Shares, an amount equal to the Initial DSW Stock Exercise Amount. It is understood and agreed that the Conversion Warrants contain provisions affecting the number of shares of Common Stock and Class A Common Shares for which the Conversion Warrants may be exercised and the exercise price of the Conversion Warrants, and that such provisions are set forth in the Conversion Warrants.

Section 13.02 Securities Act Matters.

(a) Each of the Lenders severally represents and warrants to the Parent and for the benefit of DSW as of the date hereof and as of the date of the issuance of the Conversion Warrants that:

(i) Such Lender is acquiring the Conversion Warrants hereunder for its own account, without a view to, or sale in connection with, the distribution thereof. Such Lender has no present agreement, undertaking, arrangement, commitment or obligation providing for the disposition of the Conversion Warrant or the Warrant Shares, all without prejudice, however, to the right of such Lender at any time, in accordance with this Agreement, lawfully to sell or otherwise to dispose of all or any part of the Conversion Warrants or Warrant Stock held by it.

(ii) Such Lender is an "accredited investor" within the meaning of Regulation D under the Securities Act. Such Lender has not retained, utilized or been represented by any broker or finder in connection with the transactions contemplated by this Agreement.

(iii) Such Lender acknowledges that, subject to the Registration Rights Agreement and the DSW Registration Rights Agreement (A) the Conversion Warrants and the Warrant Stock have not been registered under the Securities Act, in reliance on the non-public offering exemption contained in
Section 4(2) of the Securities Act and Regulation D thereunder; (B) because the Conversion Warrants and the Warrant Stock are not so registered, such Lender must bear the economic risk of holding the Conversion Warrants and the Warrant Stock for an indefinite period of time unless the Conversion Warrants and the Warrant Stock are subsequently registered under the Securities Act or an exemption from such registration is available with respect thereto; (C) Rule 144 under the Securities Act may or may not be available for resales of the Conversion Warrants or the Warrant Stock in the future and, if so, may only be available for sales in limited amounts; (D) there is presently no trading market for the Conversion Warrants and there is no assurance that such market will exist in the future; and (E) while there is presently a trading market for the Warrant Stock, there is no assurance that such market will be in existence in the future.

(iv) If such Lender decides to dispose of the Conversion Warrants or the Warrant Stock, which it does not now contemplate, that such Lender can do so only in accordance and in compliance with the Securities Act and Rule 144 or another exemption

from the registration requirements of the Securities Act, as then in effect or through an effective registration statement under the Securities Act.

(b) The Parent represents and warrants to each of the Lenders as of the date hereof and as of the date of the issuance of the Conversion Warrants that assuming the truth and accuracy of such Lender's representations and warranties contained in Section 13.02(a), the issuance of the Conversion Warrants hereunder and the issuance of shares of Common Stock and Class A Common Shares to such Lender pursuant to the Conversion Warrants are exempt from the registration and prospectus delivery requirements of the Securities Act.

(c) The Parent agrees that other than under or in connection with the IPO, neither it nor any Person acting on its behalf has offered or will offer the Conversion Warrants or Warrant Stock or any part thereof or any similar securities for issue or sale to, or has solicited or will solicit any offer to acquire any of the same from, any Person which to its knowledge, is or will be integrated with the issuance of the Conversion Warrants.

Section 13.03 Certain Taxes. The Parent shall pay all transfer taxes, if any, which may be payable in connection with the execution and delivery of this Agreement or the issuance of the Conversion Warrants or Warrant Stock hereunder or in connection with any modification of this Agreement or the Conversion Warrants and shall hold the Lenders harmless without limitation as to time against any and all liabilities with respect to all such taxes. The obligations of the Parent under this Section 13.03 shall survive any redemption, repurchase or acquisition of Conversion Warrants or Warrant Stock by the Parent, any termination of this Agreement, and any cancellation or termination of the Conversion Warrants. The parties hereto agree that for income tax purposes, the purchase price to be attributed to the Conversion Warrants issued to the Lenders hereunder on the date hereof shall be agreed, in writing, among the Loan Parties and the Lenders as soon as possible following the Effective Date, but in any event not later than thirty (30) days following the Effective Date.

Section 13.04 Cancellation and Issuance. If any Lender assigns or otherwise transfers all or any of its Loan (including by selling participations therein) to any Person, such Lender may request (upon 10 days' prior notice to the Parent) that (a) a number of Conversion Warrants held by such Lender be canceled on the date of such assignment and transfer and (b) a like number of Conversion Warrants be issued by the Parent to the Person to whom such Loan is being assigned or otherwise transferred. Upon the date specified in such request:

(i) the Parent shall issue, and such Lender shall surrender (or cause to be surrendered) for cancellation, such number of Conversion Warrants as aforesaid, provided that such issuance shall not violate the Securities Act or any applicable state securities laws and, if requested, Parent receives an opinion of counsel as to such matters, satisfactory to it; and

(ii) each Person that receives Conversion Warrants will deliver a certificate to the Parent affirming the representations and warranties contained in Section 13.02(a) hereof as of such date.

ARTICLE XIV

TRANSACTIONS WITH AFFILIATES

Section 14.01 Transaction Approval. Unless the Buyout Option (as defined below) has been exercised, neither the Parent nor any of its Subsidiaries shall enter into an SSC Transaction (as defined below) without the prior written consent of CPLP. In the event that the Parent, SSC or any of their Subsidiaries propose to enter into an SSC Transaction, Parent shall promptly notify CPLP in writing of the proposed SSC Transaction (the "Notification Date") which notice shall (i) describe the proposed SSC Transaction in reasonable detail and (ii) be accompanied by such information as Parent reasonably believes that a third party investor would reasonably require in order to determine the fairness of the proposed SSC Transaction. The Parent shall promptly provide such additional information (and make personnel available to discuss the same) as CPLP may reasonably request regarding the SSC Transaction during the three (3) Business Days following the Notification Date. Within five (5) Business Days of the Notification Date, CPLP shall deliver to the Parent and SSC a written notice (an "Objection Notice") stating that it objects to such SSC Transaction (the "Objection Date"). If CPLP does not deliver an Objection Notice with respect to an SSC Transaction on or prior to the Objection Date, it shall be deemed (subject to the provisions of Section 14.02(b)) to have consented to such SSC Transaction.

An "SSC Transaction" means any transaction, agreement, arrangement, lease, guaranty, loan or advance of money (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) or a series of related transactions or the material amendment or modification of any existing or previously approved transaction, between (i) the Parent or any of its Subsidiaries and (ii) SSC or any Affiliate of SSC (other than the Parent and its Subsidiaries but including, for purposes of this definition, any Person to whom SSC transfers any of the Common Stock that was owned by SSC on the Effective Date) unless: (x) the transaction, or series of related transactions, has a value of at less than $500,000, (y) such transactions and other prior transactions of the Parent and its Subsidiaries in any Fiscal Year of the Parent have a value of less than $5,000,000 in the aggregate, or (iii) the transaction is an Approved Existing Transaction.

An "Approved Existing Transaction" means a transaction, agreement, arrangement, lease, guaranty, loan or advance of money (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) described in the confidential side letter between the Borrower (as successor to Value City Department Stores, Inc.) and the Agent of June 11, 2002 on the terms in effect as of the date hereof and excluding any material modification or amendment thereto.

Section 14.02 Buyout Option. (a) In the event that CPLP delivers an Objection Notice, SSC shall have the right exercisable by delivering a written notice, not more that five (5) Business Days after the Objection Date, to CPLP stating that it elects to exercise its Buyout Option (a "Buyout Exercise Notice") to purchase all but not less than all of the Buyout Securities (as defined below) for a cash purchase price equal to all principal and interest due to CPLP with respect to the Loan and CPLP's pro rata portion of any fees payable to it under this Agreement (the "Buyout Option"). If SSC does not deliver a Buyout Exercise Notice in accordance with the

terms of this Section 14.02, then SSC shall be deemed to have waived its Buyout Option as to the transactions stated in the Buyout Exercise Notice, and the parties may not proceed with the SSC Transaction that is the subject of such Objection Notice.

(b) If a Buyout Exercise Notice is delivered, CPLP, within five (5) Business Days of delivery of such Buyout Exercise Notice, may request by written notice to the Parent and SSC (a "Referral Notice") that a committee comprised of all of the independent directors of the Borrower not affiliated with SSC, CPLP or the Parent's management (the "Fairness Committee") review and approve the SSC Transaction that is the subject of the Buyout Exercise Notice (a "Referred SSC Transaction") as to its fairness to the Parent and its unaffiliated shareholders. The Parent shall cause a Fairness Committee to be appointed within five (5) Business Days of its receipt of a Referral Notice. In the event that the Fairness Committee reviews and approves as fair to Parent and its unaffiliated shareholders the Referred SSC Transaction as proposed by SSC or if the Fairness Committee modifies the Referred SSC Transaction, and as modified approves the Referred SSC Transaction as fair to the Parent and its unaffiliated shareholders, CPLP shall be deemed to have consented to the SSC Transaction as so approved. In the event that CPLP requests that an SSC Transaction be reviewed by a Fairness Committee, such request shall be irrevocable, SSC shall not have any rights to exercise a Buyout Option in connection with such Referred SSC Transaction, and Section 14.03 shall not apply to such Referred SSC Transaction.

(c) If SSC elects to exercise the Buyout Option and CPLP does not timely deliver a Referral Notice pursuant to Section 14.02(b), then the closing of the Buyout Option shall occur on the 30th day following the delivery of the Buyout Exercise Notice.

"Buyout Securities" means (i) amounts payable to CPLP under this Agreement.

Section 14.03 CPLP Transaction. Neither the Parent nor any of its Subsidiaries will enter into any transaction with CPLP or its Affiliates, other than the transactions contemplated by this Agreement and the other Loan Documents, without the prior written consent of the Parent's Board of Directors and SSC unless the transaction, or series of related transactions, is valued at less than $500,000.

ARTICLE XV

REAFFIRMATION AND CONSENT

Section 15.01 Reaffirmation and Confirmation.

(a) Each of the Loan Parties hereby (i) acknowledges and reaffirms its respective obligations under the Loan Documents executed pursuant to the Original Agreement set forth in Schedule 15.01(a), (ii) acknowledges and agrees that Loan Documents under the Original Agreement are made in favor of the Agent, for the benefit of itself and the Lenders under this Agreement, (iii) agrees to continue to comply with, and be subject to, all of the terms, provisions, conditions, covenants, agreements and obligations applicable to it set forth in such Loan Documents from the Original Agreement, each of which remains in full force and effect except as the same may be amended or restated by or in connection with this Agreement.

(b) With respect to each of the Security Agreement and the Pledge Agreement, each of the undersigned Loan Parties hereby (i) acknowledges and reaffirms its respective obligations, (ii) acknowledges and agrees that the Security Agreement and the Pledge Agreement is made in favor of the Agent, for the benefit of itself and the Lenders, (iii) agrees to continue to comply with, and be subject to, all of the terms, provisions, conditions, covenants, agreements and obligations contained therein applicable to it, each of which remains in full force and effect, (iv) reaffirms its grant, assignment, conveyance, mortgage, pledge and hypothecation to Agent, for the benefit of itself and the Lenders, of a Lien upon all of its right, title and interest in, to and under all now owned or hereafter acquired or arising Collateral (as defined in the Security Agreement) in order to secure the prompt payment of all of the Obligations and the Guaranteed Obligations, as the case may be, (v) confirms, ratifies and reaffirms that the Lien granted to Agent, for the benefit of itself and the Lenders, pursuant to the Security Agreement in all of its respective right, title, and interest in all then existing and thereafter acquired or arising Collateral in order to secure prompt payment and performance of the Obligations and the Guaranteed Obligations, as the case may be, is continuing and is and shall remain unimpaired and continue to constitute a first priority security interest (subject to the terms of the Intercreditor Agreement) in favor of Agent, for the benefit of itself and Lenders, with the same force, effect and priority in effect both immediately prior to and after entering into this Agreement and the other Loan Documents entered into on or as of the date hereof, and (vi) confirms, ratifies and reaffirms that the security interest granted to Agent, for the benefit of itself and the Lenders, pursuant to the Pledge Agreement in all of its respective right, title, and interest in all then existing and thereafter acquired or arising Pledged Collateral in order to secure prompt payment and performance of the Obligations is continuing and is and shall remain unimpaired and continue to constitute a first priority security interest (subject to the terms of the Intercreditor Agreement) in favor of Agent, for the benefit of itself and Lenders, with the same force, effect and priority in effect both immediately prior to and after entering into this Agreement and the other Loan Documents entered into on or as of the date hereof.

(c) Schedule I and Schedule II to the Pledge Agreement are hereby amended and restated in their entirety in the forms of Annex I and Annex II, respectively, attached hereto.

(d) Schedule I through Schedule VIII to the Security Agreement are hereby amended and restated in their entirety in the forms of Annex III through Annex X, respectively, attached hereto.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

BORROWER:

VALUE CITY DEPARTMENT STORES LLC,
an Ohio limited liability company

By: ___________________________
Name:
Title:

GUARANTORS:

RETAIL VENTURES, INC.,
an Ohio corporation

By: ___________________________
Name:
Title:

GRAMEX RETAIL STORES, INC.,
a Delaware corporation

By: ___________________________
Name:
Title:

FILENE'S BASEMENT, INC.,
a Delaware corporation

By: ___________________________
Name:
Title:

GB RETAILERS, INC.,
a Delaware corporation

By: ___________________________
Name:
Title:

VALUE CITY OF MICHIGAN, INC.,
a Michigan corporation

By: ___________________________
Name:
Title:

J.S. OVERLAND DELIVERY, INC.,
a Delaware corporation

By: ___________________________
Name:
Title:

VALUE CITY DEPARTMENT STORES
SERVICES, INC.,
a Delaware corporation

By: ___________________________
Name:
Title:

RETAIL VENTURES JEWELRY, INC.
an Ohio corporation

By: ___________________________
Name:
Title:

RETAIL VENTURES SERVICES, INC.,
a Delaware corporation

By: ___________________________
Name:
Title:

RETAIL VENTURES IMPORTS, INC.,
an Ohio corporation

By: ___________________________
Name:
Title:

RETAIL VENTURES LICENSING, INC.,
a Delaware corporation

By: ___________________________
Name:
Title:

AGENT AND LENDER:

CERBERUS PARTNERS, L.P.
a Delaware limited partnership, as Agent,
on behalf of itself and its affiliate assigns

By: CERBERUS ASSOCIATES, L.L.C.

By: ___________________________
Name:
Title:

LENDER:

SCHOTTENSTEIN STORES CORPORATION,
a Delaware corporation

By: ___________________________
Name:
Title: