Exhibit 10.1
TRANSFER AND ASSIGNMENT AGREEMENT
          TRANSFER AND ASSIGNMENT AGREEMENT (“Agreement”), dated as of March 17,
2008 (the “Effective Date”), by and among DSW Inc., an Ohio corporation (“Buyer”
or “DSW”), and Retail Ventures, Inc., an Ohio corporation (“RVI”), Retail
Ventures Services, Inc., an Ohio corporation (“RVSI”) and wholly owned
subsidiary of RVI, and Filene’s Basement, Inc., a Delaware corporation (“FB”)
and wholly owned subsidiary of RVI (RVI, RVSI, and FB, collectively, “Seller” or
“RVI Entities”).
          WHEREAS, Seller currently provides certain services on behalf of or
for DSW and its subsidiaries, including (i) General Corporate and Financial
Services and (ii) Human Resources Services (collectively, the “Provided
Services”), pursuant to an Amended and Restated Shared Services Agreement
entered into effective as of October 29, 2006, by and between DSW and RVI (the
“Shared Services Agreement”);
          WHEREAS, pursuant to the Shared Services Agreement, Buyer or its
wholly owned subsidiary, Brand Technology Services LLC, an Ohio limited
liability company (“BTS”), provide certain information technology services to
the RVI Entities as well as to Value City Department Stores LLC, an Ohio limited
liability company (“VC”) and J.S. Overland, Inc. and Retail Ventures Jewelry,
Inc., previously wholly owned by RVI;
          WHEREAS, RVI transferred all of the issued and outstanding units of
the membership interests of VC to Value City Holdings, Inc. (“VCHI”) and
subsequently sold, as of January 23, 2008, 81% of its ownership in VCHI to VCHI
Acquisition Co. (“VCHIA”) (the “VC Sale”);
          WHEREAS, (i) Seller desires to transfer certain assets and contracts
related to the Provided Services to Buyer, and Buyer desires to acquire such
assets and assume such contracts, (ii) Buyer desires to employ certain employees
of Sellers currently engaged in providing the Provided Services, (iii) following
the consummation of the transactions contemplated by this Agreement, Buyer
desires to provide the Provided Services on behalf of or for the RVI Entities,
(iv) Buyer has agreed to provide Transition Services to VCHI and VC as provided
in the Purchase Agreement, dated as of January 23, 2008 entered into by and
between RVI and VCHIA and (v) Buyer and RVI desire to amend the Shared Services
Agreement to reflect the foregoing transactions;
          WHEREAS, capitalized terms used herein without definition have the
respective meanings assigned thereto in Section 21;

 

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          NOW, THEREFORE, Buyer, Seller and RVI agree as follows:
1. ASSIGNMENT OF ASSETS AND CONTRACTS; ASSUMPTION OF LIABILITIES
     1.1. Assignment of Assets and Contracts; Assumption of Liabilities
          (a) (i) On the terms and subject to the conditions herein expressed,
Seller agrees to transfer, assign and deliver to Buyer, and Buyer agrees to
acquire and accept from Seller, on and as of the Effective Date, all of Seller’s
right, title and interest in and to the assets described on Schedule 1.1(a)(i)
(the “Acquired Assets”) Buyer shall pay Seller the net book value for the
Acquired Assets.
               (ii) On the terms and subject to the conditions herein expressed,
Seller agrees to transfer, assign and deliver to Buyer, and Buyer agrees to
acquire and accept from Seller, on and as of January 31, 2009, all of Seller’s
right, title and interest in and to the assets described on Schedule 1.1(a)(ii)
(the “IT Acquired Assets”) Buyer shall pay Seller the net book value for the
Acquired Assets as of January 31, 2009.
          (b) As of the Effective Date, Buyer shall assume only the liabilities
and obligations of Seller set forth below:
               (i) The debts, liabilities and obligations of Seller to be
performed after the Effective Date under the contracts, agreements, arrangements
and understandings set forth and described on Schedule 2 (the “Assigned
Contracts”), other than in each case debts, liabilities and obligations on
account of breaches or violations by Seller that occurred on or prior to the
Effective Date).
               (ii) The executive employment agreements listed on
Schedule 1.1(b), including the debts, liabilities and obligations of Seller to
be performed after the Effective Date under such executive employment
agreements.
               (iii) The debts, liabilities and obligations incurred after the
Effective Date by Buyer with respect to the New Buyer Employees (provided that
Buyer shall also assume the liabilities relating to vacation pay accrued prior
to the Effective Date as provided in Section 10.1.1(a) below).
Except as specified in this Section 1, Buyer shall not assume or be deemed to
assume any debts, liabilities or obligations of Seller, including, without
limitation, any debts, liabilities or obligations of Seller for acts or
omissions of Seller on or before the Effective Date with respect to the Acquired
Assets or the New Buyer Employees.

 

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     1.2. Restricted Contracts
          The parties understand and agree that, without limiting any
representation, warranty, condition, covenant or indemnification contained in
this Agreement, if, as of the Closing, Seller shall not have effectively
obtained any or all consents of any third party(ies) to the assignment of the
Assigned Contracts (each a “Restricted Contract”), in respect of which such
third party’s consent to assign is required in order to preserve the value of
such Restricted Contract for Seller or otherwise, then (a) the assignment by
Seller and the assumption by Buyer of such Restricted Contract shall not become
effective at Closing or thereafter until Seller shall have obtained the
requisite consent to assign (which Seller shall use commercially reasonable
efforts to obtain, together with the cooperation of Buyer), (b) such assignment
and assumption shall become effective as aforesaid subsequent to Closing
pursuant to such documentation as shall be reasonably acceptable to Buyer and
Seller, and (c) Seller shall not take nor permit any action which would impair
the full force and effect of such Restricted Contract, or otherwise cause or
permit the modification, amendment, or termination of such Restricted Contract
(except insofar as consented to by Buyer, which consent shall not be
unreasonably withheld or delayed) until the effective assignment thereof as
aforesaid. The parties understand and agree that Seller, subsequent to the
Closing, shall not be entitled to any of the rights and privileges under any
Restricted Contract, all of which shall accrue to the benefit of Buyer, and
Seller shall be deemed to hold such Restricted Contract in trust for Buyer. To
the extent that Buyer is able to receive the economic rights and privileges
under any Restricted Contract, Buyer shall be responsible for the liabilities
assumed by Buyer pursuant to Section 1.1 arising under such Restricted Contract.
2. REPRESENTATIONS AND WARRANTIES BY RVI ENTITIES
          The RVI Entities, jointly and severally, represent and warrant to
Buyer as follows:
     2.1. Organization and Standing
          (a) RVSI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio. RVSI has all the requisite
corporate power and authority to enter into and perform the terms of this
Agreement, the other Seller Documents to which it is a party and the
transactions contemplated hereby and thereby.
          (b) RVI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio. RVI has all the requisite
corporate power and authority to enter into and perform the terms of this
Agreement, the other Seller Documents to which it is a party and the
transactions contemplated hereby and thereby.
          (c) FB is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. FB has all the requisite
corporate power and authority to enter into and perform the terms of this
Agreement, the other Seller Documents to which it is a party and the
transactions contemplated hereby and thereby.

 

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     2.2. Authorization
          (a) The execution, delivery and performance of this Agreement and of
the other Seller Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary actions of Seller (none of which actions has been
modified or rescinded and all of which actions are in full force and effect).
This Agreement constitutes, and upon execution and delivery of each other Seller
Document to which it is a party will constitute, a valid and binding agreement
and obligation of Seller, enforceable in accordance with their respective terms.
Except as specified in Section 2.3, the execution, delivery and performance by
Seller of this Agreement and of the other Seller Documents to which it is a
party will not require the consent, approval or authorization of any person,
entity or governmental authority.
          (b) The execution, delivery and performance of this Agreement and of
the other Seller Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary actions of RVI (none of which actions has been
modified or rescinded and all of which actions are in full force and effect).
This Agreement constitutes, and upon execution and delivery of each other Seller
Document to which it is a party will constitute, a valid and binding agreement
and obligation of RVI, enforceable in accordance with their respective terms.
Except as specified in Section 2.3, the execution, delivery and performance by
RVI of this Agreement and of the other Seller Documents to which it is a party
will not require the consent, approval or authorization of any person, entity or
governmental authority.
     2.3. Conflicts and Consents
     Except as set forth on Schedule 2.3, the execution and delivery of this
Agreement and the other Seller Documents to which it is a party, the fulfillment
of and the compliance with the respective terms and provisions of each, and the
consummation of the transactions described in each, do not and will not conflict
with or violate any law, ordinance, regulation, order, award, judgment,
injunction or decree applicable to any of the RVI Entities, or conflict with or
result in a breach of or constitute a default under any of the terms, conditions
or provisions of each of the RVI Entities’ respective articles of incorporation
or bylaws, or any contract, agreement, lease, commitment, or understanding to
which any of the RVI Entities is a party or by which any of the RVI Entities is
bound.
     2.4 Assets; Contracts and Agreements
          (a) Seller has, and pursuant to this Agreement will convey, transfer
and assign to Buyer, good and marketable title to the Acquired Assets and IT
Acquired Assets, free and clear of Encumbrances.
          (b) Schedule 2 contains a complete list, as of the date hereof, of
each Assigned Contracts. All of the Assigned Contracts are fully and validly
executed by one of the RVI Entities and have been executed by the other parties
thereto, and all of the Assigned

 

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Contracts are in full force and effect, constitute legal, valid and binding
obligations of the respective parties thereto, and are enforceable in accordance
with their respective terms. Seller has performed in all material respects all
of the obligations required to be performed by it to date under each such
Assigned Contract. No event has occurred which, with or without notice or the
passage of time or both, constitutes or would constitute a material breach or
default by Seller or any other party under any Assigned Contract or permit any
other party to accelerate, terminate, cancel or modify such Assigned Contract.
There have been no threatened cancellations by any third person of any Assigned
Contract.
     2.5 Disclosure
     No representation or warranty or other statement made by Seller any of the
RVI Entites in this Agreement, the Schedules or otherwise in connection with the
transactions contemplated by this Agreement contains any untrue statement or
omits to state a material fact necessary to make any of them, in light of the
circumstances in which it was made, not misleading.
3. REPRESENTATIONS AND WARRANTIES BY BUYER
          Buyer represents and warrants to the RVI Entities as follows:
     3.1. Organization and Standing
           Buyer is an Ohio corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio. Buyer has all the requisite
corporate power and authority to enter into and perform the terms of this
Agreement and the other Buyer Documents and to carry out the transactions
contemplated hereby and thereby.
     3.2. Authorization
          The execution, delivery and performance of this Agreement and of the
other Buyer Documents, and the consummation of the transactions contemplated
hereby and thereby, have been duly and validly authorized by all necessary
actions of Buyer (none of which actions has been modified or rescinded and all
of which actions are in full force and effect). This Agreement constitutes, and
upon execution and delivery each such other Buyer Document will constitute, a
valid and binding agreement and obligation of Buyer, enforceable in accordance
with their respective terms. The execution, delivery and performance by Buyer of
this Agreement and the other Buyer Documents will not require the consent,
approval or authorization of any person, entity or governmental authority.
     3.3. Conflicts and Consents
          The execution and delivery of this Agreement and the other Buyer
Documents, the fulfillment of and the compliance with the respective terms and
provisions of each, and the consummation of the transactions described in each,
do not and will not conflict with or violate

 

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any law, ordinance, regulation, order, award, judgment, injunction or decree
applicable to Buyer, or conflict with or result in a breach of or constitute a
default under any of the terms, conditions or provisions of Buyer’s
organizational documents, or any contract, agreement, lease, commitment, or
understanding to which Buyer is a party or by which Buyer is bound.
4. COVENANTS OF SELLER
          Seller covenants and agrees with Buyer that Seller will use
commercially reasonable efforts to obtain all third party consents required to
assign to Buyer the Acquired Assets and Assigned Contracts set forth on
Schedule 2.3. Buyer shall cooperate with Seller with respect to obtaining all
such third party consents. All costs incurred or relating to the obtaining of
all such third party consents or otherwise arising from the assignment of the
Acquired Assets and Assigned Contracts shall be considered an expense and
treated as a shared expensed pursuant to the terms of the Shared Services
Agreement.
5. CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE
          The obligations of Buyer to proceed with the Closing are subject to
the satisfaction (or waiver by Buyer) at or prior to the Closing of each of the
following conditions:
     5.1. Representations and Covenants
          The representations and warranties of the RVI Entities made in this
Agreement shall have been true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing Date as
though such representations and warranties were made on and as of the Closing
Date; and the RVI Entities shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by the RVI Entities prior to the Closing.
     5.2. Consents
          The parties shall have obtained prior to the Closing all consents
necessary to effect valid assignments to Buyer of all of the Acquired Assets
specified in Schedule 2.3 and all other consents necessary to consummate the
transactions contemplated hereby.
     5.3. Delivery by the RVI Entities
          The RVI Entities shall have delivered to Buyer all consents,
agreements and instruments required to be delivered to Buyer pursuant to
Section 7.2.
     5.4. Legal Proceedings
          No action or proceeding by or before any governmental authority shall
have been instituted or threatened (and not subsequently dismissed, settled or
otherwise terminated) that

 

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might restrain, prohibit or invalidate the transactions contemplated by this
Agreement or any other Seller Document, other than an action or proceeding
instituted or threatened by Buyer or DSW.
6. CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE
          The obligations of Seller to proceed with the Closing are subject to
the satisfaction (or waiver by Seller) at or prior to the Closing of each of the
following conditions:
     6.1. Representations and Covenants
          The representations and warranties of Buyer made in this Agreement or
in any other Buyer Document shall have been true and correct in all material
respects when made, and shall be true and correct in all material respects on
the Closing Date as though such representations and warranties were made on and
as of the Closing Date; and Buyer shall have performed and complied in all
material respects with all covenants and agreements required to be performed or
complied with by Buyer prior to the Closing.
     6.2. Delivery by Buyer
          Buyer shall have delivered to the RVI Entities all agreements and
instruments required to be delivered to the RVI Entities pursuant to
Section 7.3.1.
     6.3. Legal Proceedings
          No action or proceeding by or before any governmental authority shall
have been instituted or threatened (and not subsequently dismissed, settled or
otherwise terminated) that might restrain, prohibit or invalidate the
transactions contemplated by this Agreement or any other Buyer Document, other
than an action or proceeding instituted or threatened by Seller or RVI.
7. THE CLOSING
     7.1. Closing
          The Closing hereunder shall be held on the date hereof (the “Closing
Date”).
     7.2. Delivery by the RVI Entities
          At or before the Closing, the RVI Entities shall deliver to Buyer:

 

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          7.2.1. Agreements and Instruments
          The following documents, dated as of the Closing Date, in form
satisfactory to Buyer:
               (i) Bill of Sale and the Assumption Agreement; and
               (ii) such other instruments or documents as Buyer may reasonably
request in order to effect and document the transactions contemplated hereby.
          7.2.2. Consents
          Copies of all consents listed on Schedule 2.3.
          7.2.3. Amendment No. 1 to Shared Services Agreement
          Executed Amendment No.1 to Shared Services Agreement.
          7.2.4. Release of Encumbrances
          Evidence of release of Encumbrances, if any, in form and substance
reasonably acceptable to Buyer.

           7.3. Delivery by Buyer

          At or before the Closing, Buyer shall deliver to the RVI Entities:
          7.3.1. Agreements and Instruments
          The following agreements and instruments:
               (i) Amendment No. 1 to Shared Services Agreement;
               (ii) the Assumption Agreement; and
               (iii) such other instruments or documents as Seller may
reasonably request in order to effect and document the transactions contemplated
hereby.
8. SURVIVAL; INDEMNIFICATION
     8.1. Survival of RVI Entities’ Representations
          The representations and warranties made by the RVI Entities in this
Agreement or pursuant hereto shall survive the Closing Date for a period of one
(1) year.

 

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     8.2. Indemnification by Seller
          Subject to the conditions and provisions of Section 8.5, Seller agrees
to indemnify, defend and hold harmless Buyer and its affiliates from and against
any and all demands, claims, complaints, actions or causes of action, suits,
proceedings, investigations, arbitrations, assessments, losses, damages,
liabilities, costs and expenses, including, but not limited to, interest,
penalties and reasonable attorneys’ fees and disbursements, asserted against,
imposed upon or incurred by Buyer and/or its affiliates, directly or indirectly,
by reason of or resulting from (a) any debt, liability or obligation of or claim
against Seller (whether absolute, accrued, contingent or otherwise and whether a
contractual, tax or any other type of liability or obligation or claim) not
expressly assumed by Buyer pursuant to Section 1.1, (b) any misrepresentation or
breach of the representations and warranties of the RVI Entities contained in or
made pursuant to this Agreement or any other Seller Document, or (c) any
noncompliance by the RVI Entities with any covenants, agreements or undertakings
of Seller or RVI contained in or made pursuant to this Agreement or any other
Seller Document.
     8.3. Survival of Buyer’s Representations
          The representations and warranties made by Buyer in this Agreement or
pursuant hereto shall survive the Closing Date for a period of one (1) year.
     8.4. Indemnification by Buyer
          Subject to the conditions and provisions of Section 8.5, Buyer agrees
to indemnify, defend and hold harmless Seller and its affiliates from and
against any and all demands, claims, complaints, actions or causes of action,
suits, proceedings, investigations, arbitrations, assessments, losses, damages,
liabilities, costs and expenses, including, but not limited to, interest,
penalties and reasonable attorneys’ fees and disbursements, asserted against,
imposed upon or incurred by Seller and/or its affiliates, directly or
indirectly, by reason of or resulting from (a) any debt, liability or obligation
of or claim against Seller (whether absolute, accrued, contingent or otherwise
and whether a contractual, tax or any other type of liability or obligation or
claim) expressly assumed by Buyer pursuant to Section 1.1, (b) any
misrepresentation or breach of the representations and warranties of Buyer
contained in or made pursuant to this Agreement or any other Buyer Document, or
(c) any noncompliance by Buyer with any covenants, agreements or undertakings of
Buyer contained in or made pursuant to this Agreement or any other Buyer
Document.
     8.5. Conditions of Indemnification
          The obligations and liabilities of Seller and Buyer hereunder with
respect to their respective indemnities pursuant to this Section 8, resulting
from any claim or other assertion of liability by third parties (hereinafter
called collectively, “Claims”), shall be subject to the following terms and
conditions:
          (a) The party seeking indemnification (the “Indemnified Party”) must
give the other party or parties, as the case may be (the “Indemnifying Party”),
notice of any such Claim

 

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promptly after the Indemnified Party receives notice thereof; provided, however,
that failure to give such notice promptly shall not relieve the Indemnifying
Party of its obligations under this Section 8 except to the extent that the
Indemnifying Party is prejudiced thereby.
          (b) The Indemnifying Party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense of such Claim.
          (c) In the event that the Indemnifying Party shall elect not to
undertake such defense, or within a reasonable time after notice of any such
Claim from the Indemnified Party shall fail to defend, the Indemnified Party
(upon further written notice to the Indemnifying Party) shall have the right to
undertake the defense, compromise or settlement of such Claim, by counsel or
other representatives of its own choosing, on behalf of and for the account and
risk of the Indemnifying Party (subject to the right of the Indemnifying Party
to assume defense of such Claim at any time prior to settlement, compromise or
final determination thereof).
          (d) Anything in this Section 8.5 to the contrary notwithstanding, if
there is a reasonable probability that a Claim may materially and adversely
affect the Indemnified Party other than as a result of money damages or other
money payments, (i) the Indemnified Party shall have the right, at its own cost
and expense, to participate in the defense, compromise or settlement of the
Claim, (ii) the Indemnifying Party shall not, without the Indemnified Party’s
written consent, settle or compromise any Claim or consent to entry of any
judgment which does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Indemnified Party of a release from all
liability in respect of such Claim, and (iii) in the event that the Indemnifying
Party undertakes defense of any Claim, the Indemnified Party, by counsel or
other representative of its own choosing and at its sole cost and expense, shall
have the right to consult with the Indemnifying Party and its counsel or other
representatives concerning such Claim and the Indemnifying Party and the
Indemnified Party and their respective counsel or other representatives shall
cooperate with respect to such Claim.
9. ADDITIONAL COVENANTS OF THE PARTIES
     9.1. Mutual Covenants
          9.1.1. Additional Actions and Documents
          Each of the parties hereto agrees that it will, at any time, prior to,
at or after the Closing Date, take or cause to be taken such further actions,
and execute, deliver and file or cause to be executed, delivered and filed such
further documents and instruments, and obtain such consents, as may be necessary
or reasonably requested in connection with the consummation of the purchase and
sale contemplated by this Agreement or in order to fully effectuate the
purposes, terms and conditions of this Agreement.

 

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          9.1.2. Public Announcements
          Each of Seller and Buyer agrees that it shall consult with the other
before issuing any press release or making any public announcement with respect
to the sale of the Acquired Assets and shall not issue any such press release or
make any such public announcements (either before or after the Closing Date)
prior to such consultation unless otherwise required by any applicable laws or
stock listing requirements.
     9.2. Covenants of RVI Entities
          9.2.1. Certain Third Party Warranties
          If Seller shall have recourse to a warranty, representation or
indemnity or similar contractual protective provision made by a third party to
Seller that relates to the transactions contemplated by this Agreement, Seller
shall use its commercially reasonable efforts from and after the Closing to
provide the benefit of such warranty, representation or indemnity or similar
provision, to Buyer upon Buyer’s request.
     9.3 Northland Furniture
          Buyer shall pay to Seller $110,000 as full settlement of its share of
the allocated depreciation for the furniture associated with the Northland
building (cost center 01109).
10. EMPLOYEES AND EMPLOYEE BENEFITS
     10.1.1. Employment of New Buyer Employees
          (a) As of the Effective Date, the employees listed on Schedule 3 (the
“New Buyer Employees”) shall become employees of Buyer. Buyer shall be
responsible for the payment of all wages and other remuneration due to New Buyer
Employees with respect to their services as employees of Buyer from and after
the Effective Date; provided, however that Buyer shall also be responsible for
any accrued vacation pay of a New Buyer Employee earned prior to the Effective
Date but not payable prior to the Effective Date. Nothing in this Agreement
establishes any right in the New Buyer Employees to payments of any kind
relating to termination of employment.
          (b) Seller shall be responsible for the payment of all wages and other
remuneration due to New Buyer Employees with respect to their services as
employees of Seller until the Effective Date (excluding pro rata bonus payments,
if any) and all accrued vacation pay earned and due to be paid prior to the
Effective Date.
          (c) Seller or, as applicable, the appropriate employee benefit plans
shall be liable for any claims made or incurred by New Buyer Employees and their
beneficiaries through the Effective Date under any employee benefit plans in
which the New Buyer Employees

 

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participate. For purposes of the immediately preceding sentence, a charge will
be deemed incurred, in the case of hospital, medical or dental benefits, when
the services that are the subject of the charge are performed and, in the case
of other benefits (such as disability or life insurance), when an event has
occurred or when a condition has been diagnosed that entitles the employee to
the benefit.
          (d) It is the intent of the parties that any equity awards granted
(stock options, SARs, etc.) by the RVI Entities to the New Buyer Employees prior
to the Effective Date shall remain outstanding, and New Buyer Employees will
remain subject to the terms and conditions of those awards and underlying plans.
          (e) Immediately following the transactions contemplated hereby, all
reasonable efforts will be made to quickly transition payroll records and
systems from Seller to Buyer, so that all applicable payments are made on
Buyer’s behalf. 
          10.1.2. Retirement and Welfare Plans
          Following the Effective Date, to the extent permitted by law and
applicable tax qualification requirements, and subject to any generally
applicable break in service or similar rule, and the approval of any insurance
carrier, third party provider or the like with commercially reasonable efforts
of the RVI Entities and Buyer, each New Buyer Employee shall continue to
participate in retirement and welfare benefit plans in which he or she was
participating prior to the Closing Date and shall receive service credit for
purposes of eligibility to participate and vesting (but not for benefit accrual
purposes) for employment, compensation, and employee benefit plan purposes with
the Seller prior to the Effective Date. Notwithstanding any of the foregoing to
the contrary, none of the provisions contained herein shall operate to duplicate
any benefit provided to any New Buyer Employees or the funding of any such
benefit. The RVI Entities and Buyer will also cause all (a) pre-existing
conditions and proof of insurability provisions, for all conditions that all New
Buyer Employees and their covered dependents have as of the Effective Date, and
(b) waiting periods under each plan that would otherwise be applicable to newly
hired employees to be waived in the case of clause (a) or clause (b) with
respect to New Buyer Employees to the same extent waived or satisfied under the
RVI Entities’ employee benefit plans; provided that nothing in this sentence
shall limit the ability of the RVI Entities or the Buyer from amending or
entering into new or different employee benefit plans or arrangements provided
such plans or arrangements treat the New Buyer Employees in a substantially
similar manner as employees of Buyer are treated.
          10.1.3. General Employee Provisions
          (a) Buyer will set its own initial terms and conditions of employment
for the New Buyer Employees and others it may hire, including work rules,
benefits and salary and wage structure, all as permitted by law; provided,
however, that Buyer shall not reduce the job title or compensation of any New
Buyer Employee for a period of eighteen (18) months from the Effective Date
unless such change is related to a request by a New Buyer Employee in job
scope/responsibility. Buyer shall provide Seller with advance notice of the
termination of employment by Buyer of any New Buyer Employee employed at a
director level or higher who provides shared services.

 

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          (b) Seller and Buyer shall give any notices required by applicable law
and take whatever other actions with respect to the plans, programs and policies
described in this Section 10 as may be necessary to carry out the arrangements
described in this Section 10.
          (c) Seller and Buyer shall provide each other with such plan documents
and summary plan descriptions, employee data or other information as may be
reasonably required to carry out the arrangements described in this Section 10.
          (d) With respect to any claims arising based on acts by Seller in the
time period prior to the Effective Date, Buyer shall not have any
responsibility, liability or obligation, whether to New Buyer Employees, former
employees, their beneficiaries or to any other person, with respect to any
employee benefit plans, practices, programs or arrangements (including the
establishment, operation or termination thereof and the notification and
provision of COBRA coverage extension) maintained by Seller.
          10.1.4. Employee Severance Costs
          Except as otherwise expressly set forth herein, Seller and Buyer shall
share equally (50/50) with respect to any claim or liability relating to the
termination of an employee (not including New Buyer Employees) from any of the
RVI Entities as the result of the VC Sale and subsequent transfer of New Buyer
Employees to Buyer.
11. SALES, TRANSFER AND OTHER TAXES
          Buyer and Seller shall pay all sales, transfer or other taxes, if any,
arising from the transactions contemplated by this Agreement, regardless of the
person on whom any such taxes are imposed by law. Such payment will be
apportioned based upon the Percent of Sales Billing ratio (as outlined in the
Shared Services Agreement) existing at the date of Closing.
12. TERMINATION
          The parties may terminate this Agreement by mutual written agreement
at any time prior to the Closing. In addition, either Buyer, on the one hand, or
Seller and RVI, on the other hand, may terminate this Agreement if the Closing
shall not have occurred on or before June 30, 2008. In the event that this
Agreement is terminated pursuant to this Section 12, such termination shall be
without any liability or obligation to any party or parties and all further
obligations of the parties hereunder shall terminate.
13. NOTICES
          All notices, demands, requests or other communications which may be or
are required to be given or made by any party to any other party pursuant to
this Agreement shall be in writing and shall be hand delivered, mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, delivered by overnight air courier, or transmitted by telegram, telex
or facsimile transmission addressed as follows:

 

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               (i) If to Buyer:
DSW Inc.
810 DSW Drive
Columbus, Ohio 43219
Attn: Chief Financial Officer
Telecopier Number: 614/872-1475
               with a copy (which shall not constitute notice) to:
DSW Inc.
810 DSW Drive
Columbus, Ohio 43219
Attn: General Counsel
Telecopier Number: 614/872-1475
               (ii) If to Seller or RVI:
Retail Ventures, Inc.
3241 Westerville Road
Columbus, Ohio 43224
Attn: Chief Financial Officer
Telecopier Number: 614/473-2721
               with a copy (which shall not constitute notice) to:
Retail Ventures, Inc.
3241 Westerville Road
Columbus, Ohio 43224
Attn: General Counsel
Telecopier Number: 614/337-4682
or such other address as the addressee may indicate by written notice to the
other party.
          Each notice, demand, request or communication which shall be given or
made in the manner described above shall be deemed sufficiently given or made
for all purposes at such time as it is delivered to the addressee (with the
return receipt, the delivery receipt, the affidavit of messenger or (with
respect to a telex) the answerback being deemed conclusive but not exclusive
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.
14. WAIVER
          No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Agreement or under any other instrument or
document given in connection with or pursuant to this Agreement shall impair any
such right, power or privilege or

 

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be construed as a waiver of any default or any acquiescence therein. No single
or partial exercise of any such right, power or privilege shall preclude the
further exercise of such right, power or privilege, or the exercise of any other
right, power or privilege. No waiver shall be valid against any party hereto
unless made in writing and signed by the party against whom enforcement of such
waiver is sought and then only to the extent expressly specified therein.
15. BENEFIT AND ASSIGNMENT
          Except as hereinafter specifically provided in this Section 15, no
party hereto shall assign this Agreement, in whole or in part, whether by
operation of law or otherwise, without the prior written consent of Seller (if
the assignor is Buyer) or Buyer (if the assignor is Seller or RVI); and any
purported assignment contrary to the terms hereof shall be null, void and of no
force and effect. In no event shall any assignment by Seller or RVI of its
rights and obligations under this Agreement, whether before or after the
Closing, release Seller or RVI from its liabilities hereunder. Notwithstanding
the foregoing, Buyer or any permitted assignee of Buyer may assign this
Agreement and any and all rights hereunder, in whole or in part, to any direct
or indirect subsidiary of DSW.
          This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns as permitted
hereunder. No person or entity other than the parties hereto is or shall be
entitled to bring any action to enforce any provision of this Agreement against
any of the parties hereto, and the covenants and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by,
the parties hereto or their respective successors and assigns as permitted
hereunder.
16. REMEDIES CUMULATIVE
          Except as specifically provided herein, the remedies provided herein
shall be cumulative and shall not preclude the assertion by a party of any other
rights or the seeking of any other remedies against the other parties, or their
successors or assigns. Nothing contained herein shall preclude a party from
seeking equitable relief, where appropriate.
17. ENTIRE AGREEMENT; AMENDMENT
          This Agreement, including the Schedules and Exhibits hereto and the
other instruments and documents referred to herein or delivered pursuant hereto,
contains the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior oral or written agreements, commitments
or understandings with respect to such matters. No amendment, modification or
discharge of this Agreement shall be valid or binding unless set forth in
writing and duly executed by the party against whom enforcement of the
amendment, modification or discharge is sought.

 

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18. SEVERABILITY
          If any part of any provision of this Agreement or any other agreement,
document or writing given pursuant to or in connection with this Agreement shall
be invalid or unenforceable under applicable law, such part shall be ineffective
to the extent of such invalidity or unenforceability only, without in any way
affecting the remaining parts of such provisions or the remaining provisions of
said agreement.
19. HEADINGS
          The headings of the sections and subsections contained in this
Agreement are inserted for convenience only and do not form a part or affect the
meaning, construction or scope thereof.
20. GOVERNING LAW
          This Agreement, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed
under and in accordance with the laws of the State of Ohio, excluding the choice
of law rules thereof.
21. DEFINITIONS AND REFERENCES
          As used herein, the following terms shall have the meanings set forth
below, unless the context otherwise requires:
          “Agreement” shall have the meaning set forth in the Preamble.
          “Amendment No. 1 to Amended and Restated Shared Services Agreement”
means that certain Amendment No. 1 to Amended and Restated Shared Services
Agreement, dated as of the Closing Date and executed by DSW and RVI,
substantially in the form attached hereto as Exhibit B.
          “Acquired Assets” shall have the meaning set forth in Section 1.1.
          “Assigned Contracts” shall have the meaning set forth in Section 1.1.
          “Assumption Agreement” means that certain Assumption Agreement, dated
as of the Closing Date and executed by Buyer and Seller, substantially in the
form attached hereto as Exhibit A.
          “Bill of Sale” shall mean a bill of sale in such form as is mutually
agreed upon by the parties to evidence the transfer of the Acquired Assets.
          “Buyer” shall have the meaning set forth in the Preamble.

 

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          “Buyer Documents” shall mean, together, this Agreement and the
Assumption Agreement.
          “Claims” shall have the meaning set forth in Section 8.5.
          “Closing” means the closing of the transactions contemplated
hereunder.
          “Closing Date” means the time and date on which the Closing takes
place, as established by Section 7.1.
          “DSW” shall have the meaning set forth in the Preamble.
          “Encumbrances” shall mean any mortgages, pledges, liens, claims,
security interests, restrictions, defects in title, easements, taxes,
encumbrances or charges.
          “Indemnified Party” and “Indemnifying Party” shall have the respective
meanings set forth in Section 8.5(a).
          “New Buyer Employees” shall have the meaning set forth in
Section 10.1.1(a).
          “Restricted Contract” shall have the meaning set forth in Section 1.2.
          “RVI” shall have the meaning set forth in the Preamble.
          “RVI Entities” shall have the meaning set forth in the Preamble.
          “Seller” shall have the meaning set forth in the Preamble.
          “Seller Documents” shall mean, collectively, this Agreement, the Bill
of Sale, and the Assumption Agreement.
          “Shared Services Agreement” shall have the meaning set forth in the
Preamble.
          All references to clauses, Sections, Exhibits and Schedules are to
Sections of, and Exhibits and Schedules to, this Agreement. For purposes of this
Agreement, DSW and its subsidiaries shall not be deemed to be “affiliates” of
RVI or Seller.
22. SIGNATURE IN COUNTERPARTS
          This Agreement may be executed in separate counterparts, none of which
need contain the signatures of all parties, each of which shall be deemed to be
an original, and all of which taken together constitute one and the same
instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.

 

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          IN WITNESS WHEREOF, each of the parties hereto has executed and
delivered this Agreement, or has caused this Agreement to be duly executed and
delivered in its name on its behalf, all as of the day and year first above
written.

          DSW INC.    
 
       
By:
  /s/ William L. Jordan
 
    Name: William L. Jordan     Title: Senior Vice President, General Counsel  
 
 
        RETAIL VENTURES, INC.    
 
       
By:
  /s/ James A. McGrady
 
    Name: James A. McGrady     Title: Executive Vice President, Chief Financial
Officer    
 
        RETAIL VENTURES SERVICES, INC.    
 
       
By:
  /s/ James A. McGrady
 
    Name: James A. McGrady     Title: Executive Vice President, Chief Financial
Officer    
 
        FILENE’S BASEMENT, INC.    
 
       
By:
  /s/ James A. McGrady
 
    Name: James A. McGrady     Title: Executive Vice President, Chief Financial
Officer