Exhibit 10.91
SUPPLY AGREEMENT
(Combo Stores)
     THIS SUPPLY AGREEMENT (Combo Stores) (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 certain of 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 Licensed Department Supply Agreement
(as defined herein) to amend and restate the Original Agreement as it related to
Licensed Departments (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. “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).

 

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     1.2. “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.
     1.3. “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 10,000 or more 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.
     1.4. “Covered Store Schedule” means that schedule attached as Exhibit A
hereto of two (2) 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.
     1.5. “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.
     1.6. “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.
     1.7. “Licensed Department” means a store which has less than 10,000 square
feet of sales floor dedicated to the Shoe Department and which is the subject of
the Licensed Department Supply Agreement.
     1.8. “Licensed Department Supply Agreement” means the Supply Agreement
dated the same date hereof, between Supplier and Filene’s covering Licensed
Departments.
     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.

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     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 Covered Stores, and Filene’s employees shall
be responsible for receiving the Merchandise, accounting for the Merchandise
received, and stocking the Merchandise in or on the display case or fixture at
each of the Covered Stores. 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

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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) 15,000 square feet, unless a smaller space is agreed to by
Supplier. Filene’s shall make available for Supplier’s use with a Shoe
Department a minimum of 1,000 square feet of storage space in each Covered
Store. Filene’s may, at Filene’s expense, relocate or renovate the Shoe
Department of at any time and from time to time, upon reasonable notice to
Supplier and upon prior approval from Supplier for relocations.
     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; License. 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.
Supplier hereby grants to Filene’s, a non-exclusive and non-assignable,
indivisible right and license to use the DSW name and logo (“License”) as
necessary solely for the purposes of operating the Covered Stores and producing
advertising copy for

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Covered Stores. Prior to the use of the DSW name or logo Filene’s shall submit
to Supplier any and all advertising copy and related information for review and
approval by Supplier. Commencing with the first payment which shall be due on
January 30, 2005, and continuing on the first day of Filene’s fiscal year
thereafter, providing (i) Filene’s maintains a 52-53 week fiscal year as
traditionally done in the retail industry, or (ii) if Filene’s does not use the
52-53 week fiscal year, the first day of the traditional retail year as provided
by the National Retail Federation 4-5-4 Merchandising Calendar, Filene’s shall
pay to Supplier $100,000 per Covered Store, in advance, as consideration for the
use of the License for the fiscal year of this Agreement then commencing. The
payment shall be prorated for any Covered Store closed during the year covered
by such payment, based upon the number of days such Covered Store was open, with
the balance refunded to Filene’s within thirty (30) days of such Covered Store’s
closing. Supplier and Filene’s shall both use their best efforts to maintain,
and to cause its employees and agents to maintain, the high standard, image and
prestige of the name, trademarks, service marks, symbols or logos associated
with the other party hereto.
     4.10. Standards of Operation. The following standards of operation shall be
applicable to the operation of Covered Stores. In the event this Section 4.10
conflicts with other provisions of this Agreement, this Section 4.10 shall
control.
     4.10.1. Filene’s shall install, maintain and replace at Filene’s expense
the DSW sign on the outside of Covered Stores and at such other locations in the
interior of the Covered Store in such number, size and location as agreed to by
Filene’s and Supplier. Supplier shall provide at Supplier’s expense specialty
and basic visual merchandising and signage in the Shoe Department, which
merchandising and signage will be subject to Filene’s reasonable approval.
     4.10.2. The department manager of the Shoe Department shall be an employee
of Supplier and will report to Supplier’s Supervisor, but will comply with all
applicable Filene’s policies. Supplier will pay the salary, applicable employer
payroll taxes, employer benefits, workmen’s compensation and expenses of such
department manager.
     4.10.3. Filene’s shall notify Supplier in writing no less than 180 days
prior to the expiration, non-renewal or termination of any Covered Store’s lease
and provide to Supplier all pertinent facts relating to such expiration,
non-renewal or termination. In the event that Filene’s fails to provide such
notice and that failure causes Supplier lost revenue or damages, Filene’s shall
indemnify Supplier for such lost revenue or damages.
     4.10.4. Filene’s shall not operate any “going out of business sale”,
“liquidation” or the like which could create any possible confusion with the
public as to whether any of Supplier’s assets are being liquidated.
     4.10.5. Filene’s shall not display any merchandise in the Shoe Department
other than Merchandise without the consent of Supplier and shall immediately
remove any merchandise from the Shoe Department upon request by Supplier.
Supplier shall not display any Merchandise outside of the Shoe Department
without the consent of Filene’s and shall immediately remove any merchandise
outside of the Shoe Department upon request by Filene’s.
     4.10.6. Filene’s shall use best efforts to accept returns of Merchandise
which are returned under conditions that would be permitted by the return policy
as in effect in DSW stores from time to time.
     4.10.7. Filene’s shall accept for return at any Covered Store any footwear
merchandise purchased from a store operated by Supplier as a DSW store.
     4.10.8. Filene’s shall accept from customers for discounted purchases of
Merchandise the DSW Reward Your Style program (or other similar program operated
by Supplier in DSW

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stores) and transmit information related to customer’s use of such program to
DSW. Filene’s shall not take any action which may discourage the enrollment in
or use of the DSW Reward Your Style program. Filene’s shall accept other
promotions by Supplier unless the promotion would interfere with Filene’s
business.
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”).

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     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. [Intentionally deleted.]
     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

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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 one percent
(1%) 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

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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

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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
     12.1.3 Any failure by Filene’s to comply with the provisions of
Section 4.10 and such failure is not cured within ten (10) days after notice
thereof is given by Supplier to Filene’s.
     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

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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

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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

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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

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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.

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     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 equal or exceed 10,000 square feet. For all Shoe
Departments which are less than 10,000 square feet, the Licensed Department
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]

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     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  
 

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     Date: January 30, 2005
Amendment:                      
EXHIBIT A
Covered Store Schedule
Filene’s Basement
Covered Stores
Combo Stores

                                                  Unit   Name   Street Address  
City   State   Zip   Sq. Feet
53800
  SAWMILL   3700 W. Dublin-Granville Rd.   Columbus   OH     43235       22,201
 
56000
  JERSEY GARDENS   651 Kapkowski Rd   Elizabeth   NJ     07021       13,652  

                      Filene’s Basement Inc.       DSW Inc.    
 
                   
By:
  /s/ James A. McGrady       By:   /s/ Peter Z. Horvath    
 
 
 
         
 
    Name: James A. McGrady       Name: Peter Z. Horvath     Title: Executive
Vice President       Title: Executive Vice President