<PAGE>   1

                                                                   Exhibit 10(p)

                       COMPREHENSIVE SETTLEMENT AGREEMENT
                       ----------------------------------



         THIS COMPREHENSIVE SETTLEMENT AGREEMENT (this "Agreement") is entered
into as of December 30, 1997 by and among the Parties (as defined below). Any
capitalized terms not defined herein have the meanings assigned to them in the
Third Amended Joint Plan of Reorganization of The Elder-Beerman Stores Corp. and
Its Subsidiaries, dated November 17, 1997, as modified (the "Plan").

                                   THE PARTIES
                                   -----------

         The "Parties" to this Agreement are as follows:

                  1. The Debtors: The Elder-Beerman Stores Corp., an Ohio
corporation ("Elder- Beerman"); The El-Bee Chargit Corp., an Ohio corporation
("Chargit"); The Bee-Gee Shoe Corp., an Ohio corporation ("Bee-Gee"); Margo's
LaMode, Inc., a Texas corporation ("Margo's"); McCook Wholesale Corp., an Ohio
corporation ("McCook"); E-B Community Urban Redevelopment Corp., an Ohio
corporation ("E-B"); and EBA, Inc., an Ohio corporation ("EBA"). Elder-Beerman,
Chargit, Bee-Gee, Margo's, McCook, E-B, and EBA are referred to in this
Agreement collectively as the "Debtors."

                  2. The ESOP and the ESOP Committee: The Elder-Beerman Stores
Corp. Profit Sharing and Stock Ownership Plan (the "ESOP"), as represented by
The Elder Beerman Stores Corp. Profit Sharing and Stock Ownership Plan
Administration Committee (the "ESOP Committee").

                  3.       The Shareholders of Elder-Beerman:

                           a.       Beerman-Peal Holdings, Inc., an Ohio
                                    corporation ("Beerman-Peal"), the holder of
                                    all Old Common Stock of Elder-Beerman;


<PAGE>   2



                           b.       Indirect Shareholders of Elder-Beerman

                                    (1)     as shareholders of Beerman-Peal and
                                            former directors of Elder-Beerman,
                                            Barbara B. Weprin ("BBW"), William
                                            S. Weprin ("WSW"), and Leonard B.
                                            Peal ("LBP"), collectively referred
                                            to as the "Equity Directors";

                                    (2)     family members of and subsidiary or
                                            affiliated entities wholly or
                                            partially owned or controlled by the
                                            Equity Directors (collectively with
                                            the Equity Directors, the "Beerman
                                            Family Entities").

                                    RECITALS
                                    --------

                              THE CHAPTER 11 CASES
                              --------------------

         A. The Debtors filed their respective petitions for relief under
chapter 11 of the Bankruptcy Code, 11 U.S.C. ss.ss. 101-1330 (the "Bankruptcy
Code"), in the United States Bankruptcy Court for the Southern District of Ohio
(the "Bankruptcy Court") on October 17, 1995 (the "Petition Date"). During their
chapter 11 cases, the Debtors operated and managed their respective businesses
as debtors in possession in accordance with sections 1107 and 1108 of the
Bankruptcy Code.

         B. The Bankruptcy Court entered an order on __________, 1997 confirming
the Plan under section 1129 of the Bankruptcy Code. It is a condition to the
consummation of the Plan and occurrence of the Effective Date that each of the
Parties execute and deliver this Agreement.

                           REAL PROPERTY LEASE ISSUES

         C. Twenty of the Debtors' locations are or were governed by leases
under which various Beerman Family Entities are or were the landlords. Exhibit A
to this Agreement lists these Beerman


                                        2

<PAGE>   3



Family Entities and the corresponding Elder-Beerman or Bee-Gee locations.
Certain Beerman Family Entities have asserted claims against the Debtors'
estates for amounts allegedly due under such leases and allegedly arising both
before and after the Petition Date. A schedule of these claims (collectively,
the "Beerman Family Lease Claims"), including the holders of such claims and the
nature and amount of such claims, is part of Exhibit A.

         D. Elder-Beerman is a tenant under two real property lease agreements
(collectively, the "Zane Leases") for retail space located in the Zane Plaza
Shopping Center ("Zane Plaza") in Chillicothe, Ohio. The first lease, dated
December 30, 1980 (the "1980 Agreement") and amended by agreement dated
September 29, 1992 (the "1992 Agreement"), is between Elder-Beerman as tenant
and Zane Development Co. In 1985, a Beerman Family Entity, Beerman-Chillicothe
Limited Partnership ("BCLP") acquired Zane Plaza and succeeded to Zane
Development Co.'s interest in the 1980 Agreement. The Beerman Corporation and
BBW each served as both general and limited partners of BCLP. In 1991, another
Beerman Family Entity, The Abco Land Development Corp. ("Abco"), and The Beerman
Corporation acquired Zane Plaza and became the lessors under the 1980 Agreement.
The 1992 Agreement amended the 1980 Agreement by terminating a then-existing
lease with Bee-Gee for a parcel contiguous with Elder-Beerman's store. The
second lease, dated November 8, 1990 (the "1990 Agreement"), was between BCLP as
landlord and Elder-Beerman as tenant. For purposes of the Zane Leases, Abco and
BCLP are referred to collectively as the "Zane Lessors."

         E. The 1980 Agreement, as amended, contains options to extend the term
of the lease, exercised by Elder-Beerman giving the lessor written notice of its
intent to renew the lease at least six months before the current lease term
expired. The 1990 Agreement contains substantially similar language. The Zane
Leases were set to expire by their terms on January 31, 1996. Because Elder-



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<PAGE>   4


Beerman gave no written notice to the Zane Lessors of its intention to renew the
Zane Leases, the Zane Lessors have asserted that the Zane Leases have expired.
Elder-Beerman disputes such assertion in light of, among other things,
Elder-Beerman's unequivocal oral representations to the Zane Lessors of its
intent to renew the Zane Leases and the Zane Lessors' continued acceptance of
Elder-Beerman's rental payments.

                       MISCELLANEOUS BEERMAN FAMILY CLAIMS
                       -----------------------------------

         F. In addition to the Beerman Family Lease Claims, certain of the
Beerman Family Entities assert various claims in respect of contribution or
reimbursement, indemnification, and other miscellaneous matters. Exhibit B lists
these Beerman Family Entities and the corresponding claims asserted by these
entities (the "Miscellaneous Beerman Family Claims"). Conversely, Elder-Beerman
asserts claims against certain of the Beerman Family Entities in respect of
personal use of company aircraft and credit card charges. Exhibit C lists these
Beerman Family Entities and the corresponding claims asserted by Elder-Beerman
against these entities (collectively, the "Elder-Beerman Claims").

                 CLAIMS ARISING OUT OF EQUITY DIRECTORS' ACTIONS
                 -----------------------------------------------

         G. During the course of the Reorganization Cases, Elder-Beerman learned
of previous communications between the Equity Directors and several competitor
retailers and one potential financial investor. The disclosures by the Equity
Directors to these entities included disclosure of confidential, proprietary
information concerning Elder-Beerman -- made without the knowledge or consent of
Elder-Beerman management -- in an effort by the Equity Directors to locate a
purchaser of the Debtors' assets and operations. The Debtors believe that such
actions may have constituted a breach of the Equity Directors' fiduciary duties
and violated certain confidentiality agreements between the Equity Directors and
Elder-Beerman. All potential claims arising from such actions,


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including equitable subordination claims, are referred to collectively in this
Agreement as the "Disclosure Claims."

                          FAIRBORN DISTRIBUTION CENTER
                     PURCHASE OPTION/RIGHT OF FIRST REFUSAL
                     --------------------------------------

         H. Elder-Beerman also claims to hold a purchase option and a right of
first refusal (collectively, the "Fairborn Right") with respect to the purchase
of an approximately 18-acre parcel of real property adjacent to Elder-Beerman's
Fairborn distribution center. The principal terms of the Fairborn Right are set
forth in Exhibit D.

                     PREVIOUSLY RESOLVED CLAIMS BETWEEN THE
                    BEERMAN FAMILY ENTITIES AND ELDER-BEERMAN
                    -----------------------------------------

         I. In addition to the Beerman Family Lease Claims, the dispute
regarding renewal of the Zane Leases, the Miscellaneous Beerman Family Claims,
the Elder-Beerman Claims, and the Disclosure Claims, Elder-Beerman and certain
of the Beerman Family Entities faced disputes regarding: (1) entitlement to
approximately $12.0 million of federal tax refunds and interest earned thereon;
(2) the repayment to Elder-Beerman of more than $600,000 in respect of an
unexercised option to acquire from Centerville Associates III Limited
Partnership the fee simple ownership of the Elder-Beerman department store in
Centerville, Ohio; and (3) the timeliness of a proof of claim filed by certain
Beerman Family Entities asserting rejection damage claims arising from
Elder-Beerman's rejection of its lease for its former Fairborn furniture store
(collectively, the "Previously Resolved Claims"). The Previously Resolved Claims
have been compromised and settled pursuant to orders of the Bankruptcy Court
entered on November 17, 1997 and are not affected by this Agreement.




                                       5
<PAGE>   6


                         THE ESOP CLAIMS AND APPLICATION
                         -------------------------------

         J. The ESOP holds its participants' interests in the Old Preferred
Stock of Elder- Beerman. In connection with its interests in the Old Preferred
Stock, the ESOP asserted prepetition claims (collectively, the "ESOP Prepetition
Claims") of approximately $16 million, as follows: (1) a claim of approximately
$14 million against each of the Debtors based on the Debtors' alleged
obligations to provide a "guaranteed minimum return" on the Old Preferred Stock
held by the ESOP and (2) a claim of approximately $2 million against each of the
Debtors based on the Debtors' alleged obligations to make a so-called
"retirement security contribution" for 1995. The Debtors dispute their alleged
liability under the ESOP Prepetition Claims.

         K. On June 27, 1996, the ESOP filed an Application for Payment of
Administrative Expenses (the "ESOP Application") in which it sought payment of
expenses related to (1) Elder- Beerman's alleged obligation to make a
postpetition retirement security contribution to the ESOP and (2) the fees and
expenses of the ESOP's professional advisors incurred in connection with the
Debtors' chapter 11 cases. In response to an objection by the Institutional
Lenders' Committee, the Bankruptcy Court vacated its own prior order granting
certain relief regarding the ESOP Application, and the parties have since been
unable to reach a resolution of the ESOP Application.

         L. Although not formally asserted, the ESOP may also have certain
claims or causes of action against either (1) Elder-Beerman, (2) the present and
former directors and officers of Elder- Beerman, or (3) Beerman-Peal, arising
out of the creation of the ESOP or the failure to make retirement security
contributions for 1996 or 1997 (collectively, the "Potential ESOP Claims").
These Potential ESOP Claims are defined as broadly as possible to include all
possible claims, rights, and causes of action, in law or equity, of any nature
and accruing at any time, arising out of or in any way related to the ESOP.


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<PAGE>   7


    SETTLEMENT AND RELEASE OF POTENTIAL CLAIMS AND DISPUTES AMONG THE PARTIES
    -------------------------------------------------------------------------

         M. Litigation of the factual and legal issues underlying the various
claims and disputes set forth above would prevent an efficient and feasible
reorganization of the Debtors' businesses and would inure to the detriment of
all Parties, as well as all of the creditors of the Debtors. Accordingly, to
avoid the possibility of costly and lengthy litigation, with its attendant risks
and uncertainties, in connection with various claims and disputes set forth
above, the Parties desire to enter into this Agreement to settle and release all
potential claims and disputes without admitting liability of any kind and to any
extent.

         IN CONSIDERATION OF THE FOREGOING, the consideration provided under
this Agreement and under the Plan, each Party's execution and delivery of this
Agreement, and the mutual promises, settlements, releases, and other agreements
set forth below (the receipt, performance, and sufficiency of which are
acknowledged), the Parties agree as follows:

                                  THE AGREEMENT
                                  -------------

         Section 1. AFFIRMATIVE OBLIGATIONS, WAIVERS, AND PROVISIONS. All
consideration for the mutual promises, settlements, releases, and other
agreements set forth below are provided in this Section 1 and the Plan. If any
provision in this Agreement directly conflicts with any provision of the Plan or
Disclosure Statement, the applicable provision in this Agreement governs.

                  Section 1.1. Tax Indemnification Obligations. The Debtors'
membership, before the Effective Date, in a consolidated group of companies of
which Beerman-Peal was the common parent requires a determination of the rights
and obligations of Beerman-Peal and its direct and indirect shareholders on the
one hand, and Reorganized Elder-Beerman and its surviving subsidiaries on the
other, with respect to certain federal income tax matters, including the filing
of returns, the conducting of audits, and the preservation and orderly
utilization of Reorganized Elder-Beerman's


                                       7
<PAGE>   8


tax attributes in accordance with applicable laws and regulations. The nature
and extent of these rights and obligations are fully set forth in the New Tax
Indemnification Agreement (an Exhibit to the Plan), which is incorporated herein
by reference. On the Effective Date, each of the Reorganized Debtors and the
Beerman Family Entities named therein shall execute and deliver the New Tax
Indemnification Agreement. The rights and obligations set forth in the New Tax
Indemnification Agreement provide certain consideration for certain of the
releases set forth below.

                  Section 1.2. Renewal of the Zane Leases. Notwithstanding the
merits of any theory or theories in law or equity regarding Elder-Beerman's
alleged failure to exercise the renewal option contained in the Zane Leases, the
Zane Lessors agree to waive any claims of any kind based on such theory or
theories. Accordingly, this Section 1.2 (the "Zane Leases Renewal") effects the
binding renewal by Elder-Beerman of the Zane Leases and the Zane Lessors'
consent to such renewal on the terms set forth in Exhibit E as though the
renewal option were duly and timely exercised in accordance with the Zane
Leases. Nothing in this Section 1.2 affects the validity of any Beerman Family
Lease Claims or any amounts with respect to the Zane Leases set forth on Exhibit
A hereto.

                  Section 1.3. Beerman Family Lease Claims. The Debtors and the
Beerman Family Entities agree that all Beerman Family Lease Claims are
disallowed or allowed in the stipulated, agreed amount set forth in Exhibit A in
the column labeled "Resolved Amount." Nothing in this Section 1.3 should be
construed to alter the respective rights of the lessors or lessees under the
leases set forth on Exhibit A, the treatment of such leases under the applicable
provisions of the Plan, or the rights of such lessors to assert (and the lessees
to dispute) claims for administrative rent and other obligations as provided for
in such leases accruing between the Petition Date and the Effective Date, except
as provided in Exhibit A with respect to the allowance or disallowance of any
postpetition amounts.


                                       8
<PAGE>   9


                  Section 1.4. Miscellaneous Beerman Family Claims. The Debtors
and the Beerman Family Entities agree that all Miscellaneous Beerman Family
Claims are disallowed, or allowed in the stipulated, agreed amount set forth in
Exhibit B in the column labeled "Resolved Amount."

                  Section 1.5. Elder-Beerman Claims. The Debtors and the Beerman
Family Entities agree that all Elder-Beerman Claims are compromised in the
stipulated, agreed amount set forth in Exhibit C in the column labeled "Resolved
Amount." The Debtors and the Beerman Family Entities acknowledge that the
compromised and stipulated, agreed amounts set forth in the columns labeled
"Resolved Amount" in Exhibits B and C reflect the net amount of the particular
claims after applying appropriate setoffs of corresponding claims asserted
between Elder-Beerman and certain corresponding Beerman Family Entities.
Accordingly, the Resolved Amount on either Exhibit B or Exhibit C is in full
satisfaction of both the claim to which it refers and the corresponding claim
between the same parties reflected on the other Exhibit.

                  Section 1.6. ESOP Prepetition Claims and ESOP Application. On
account of, and in complete satisfaction of, the ESOP Prepetition Claims, the
ESOP Application, and the ESOP's Old Preferred Stock Interests, the ESOP will
receive the consideration set forth in the Plan.

                  Section 1.7. Acknowledgment of Fairborn Right. Beerman-Peal
acknowledges the existence and enforceability of the Fairborn Right and agrees
that Reorganized Elder-Beerman may exercise the Fairborn Right on the terms set
forth in Exhibit D.

         Section 2.        EXCHANGE OF RELEASES AMONG THE PARTIES

                  Section 2.1. Releases Among the Debtors and the Beerman Family
Entities. In consideration of (a) the Equity Directors' execution and
performance of the New Tax Indemnification Agreement, (b) the allowance, in
accordance with the Plan, of certain claims as set forth on Exhibits A, B, and
C, (c) the distributions provided under the Plan in respect of Class E-2
Interests of


                                       9
<PAGE>   10


Beerman-Peal, and (d) the settlement of all Beerman Family Lease Claims, the
Miscellaneous Beerman Family Claims, and the Elder-Beerman Claims set forth in
Exhibits A, B, and C, except as may be provided in the Plan or in this
Agreement, each of the Debtors and each of the Debtors' respective predecessors,
successors, estates, assigns, directors, officers, managers, employees,
professionals, agents and other representatives (in such capacities), on the one
hand, and each of the Beerman Family Entities and their respective estates,
assigns, predecessors, successors, partners, directors, officers, employees,
professionals, agents, and other representatives (in such capacities), on the
other hand, releases and forever discharges one another from all claims,
remedies, debts, liabilities, obligations, demands, damages, rights, actions,
causes of action, agreements, and claims for attorneys' fees whether known or
unknown, now existing or that may arise in the future arising from, involving,
or relating to the Disclosure Claims, the Beerman Family Lease Claims, the
Miscellaneous Beerman Family Claims, the Elder-Beerman Claims, the Debtors'
chapter 11 cases, or any transaction, act, or omission related to Elder-Beerman
or the Debtors' chapter 11 cases occurring before the Effective Date.

                  Section 2.2. Releases Among the Debtors, the ESOP, and the
ESOP Committee. In consideration of the settlement of the ESOP Prepetition
Claims, the ESOP Application, and the Potential ESOP Claims as set forth above
and in the Plan at Section III.B.2.c., except as may be provided expressly in
the Plan or in this Agreement, each of the Debtors and each of the Debtors'
respective predecessors, successors, estates, assigns, directors, officers,
employees, professionals, agents, and other representatives, and the ESOP, and
each of the members of the ESOP Committee, and their respective estates,
assigns, predecessors, successors, directors, officers, employees,
professionals, agents, and other representatives releases and forever discharges
one another from all claims, remedies, debts, liabilities, obligations, demands,
damages, rights, actions, causes of action,


                                       10
<PAGE>   11


agreements, and claims for attorneys' fees whether known or unknown, now
existing or that may arise in the future arising from, involving or relating to
the ESOP Prepetition Claims, the ESOP Application, the Potential ESOP Claims,
the Debtors' chapter 11 cases, or any transaction, action or omission occurring
before the Effective Date.

         Section 3.        REPRESENTATIONS AND WARRANTIES

                  Section 3.1. Representations and Warranties of Debtors.
Elder-Beerman represents and warrants to the other Parties that (a) it is a
corporation duly organized, validly existing, and in good standing under the
laws of the state of Ohio and (b) entry of the order of the Bankruptcy Court
confirming the Plan under section 1129 of the Bankruptcy Code (the "Confirmation
Order") authorizes Elder-Beerman's execution and delivery of this Agreement and
authorizes Elder-Beerman to perform its obligations under this Agreement.

                  Section 3.2. Representations and Warranties of the ESOP. The
ESOP represents and warrants to the other Parties that (a) it is an employee
stock ownership plan qualified under section 401(a) of the Internal Revenue Code
and as defined in section 4975(e)(7) of the Internal Revenue Code and (b) is
authorized to execute, deliver, and perform its obligations under this
Agreement.

                  Section 3.3. Representations and Warranties of the ESOP
Committee. The ESOP Committee represents and warrants to the other Parties that
it is authorized to execute, deliver, and perform its obligations under this
Agreement on behalf of the ESOP. The members of the ESOP Committee each
represent and warrant to the other Parties that the ESOP Committee is authorized
to execute, deliver, and perform the ESOP Committee's obligations under this
Agreement.

                  Section 3.4. Representations and Warranties of Beerman-Peal.
Beerman-Peal represents and warrants to the other Parties that (a) it is a
corporation duly organized, validly existing


                                       11
<PAGE>   12


and in good standing under the laws of the state of Ohio and (b) is authorized
to execute, deliver, and perform its obligations under this Agreement.

                  Section 3.5. Representations and Warranties of the Beerman
Family Entities. The Beerman Family Entities, including, the Beerman
Corporation, the Zane Lessors, and all lessors listed on Exhibit A hereto, each
represent and warrant to the other Parties that (a) it is a business entity
(corporation, partnership, limited partnership, or trust) duly organized,
validly existing, and in good standing under the laws of the state of Ohio, or
is a competent individual and (b) is authorized to execute, deliver, and perform
his, her, or its obligations under this Agreement. Each Beerman Family Entity
further represents and warrants that he, she, or it is authorized to execute
this Agreement, if it does so, on behalf of its respective subsidiaries and
affiliates, predecessors, and successors in interest, partners, officers,
directors, managers, agents, and employees.

                  Section 3.6. Representations and Warranties of the Equity
Directors. BBW, WSW, and LBP each represents and warrants to the other Parties
that he or she has all requisite power and authority to execute, deliver, and
perform his or her obligations under this Agreement. BBW, WSW, and LBP each
further represents and warrants that he or she is authorized to execute this
Agreement, if he or she does so, on behalf of any Beerman Family Entity.

         Section 4. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT.
The effectiveness of this Agreement is expressly conditioned on the Bankruptcy
Court's approval of this Agreement by entry of an order (which may be, but does
not have to be, part of the Confirmation Order) not subject to any stay
authorizing the Debtors to enter into, implement, and consummate this Agreement
in accordance with Bankruptcy Rule 9019.

         Section 5. REORGANIZED DEBTORS AS SUCCESSORS IN INTEREST TO THE
DEBTORS. From and after the Effective Date, Reorganized Elder-Beerman,
Reorganized Chargit, and Reorganized Bee- 


                                       12
<PAGE>   13



Gee (as defined in Article I of the Plan), as successors in interest to the
Debtors, will perform all of the obligations of each of the Debtors under this
Agreement and succeed to the Debtors rights under this Agreement.

         Section 6.        MISCELLANEOUS PROVISIONS

                  Section 6.1. Scope of Agreement. This Agreement does not
affect any rights or obligations under the Plan or any contract, instrument,
release, indenture, or other agreement or document delivered under the Plan.

                  Section 6.2. Entire Agreement; Modification; Waiver. This
Agreement constitutes the entire agreement among the Parties and, subject to the
provisions of Section 6.1 above, supersedes any prior or contemporaneous
agreements, representations, warranties, and understandings of the Parties,
whether oral, written or implied, as to the subject matter of this Agreement. No
amendment or modification of this Agreement or any of its provisions is binding
unless executed in writing by all Parties affected by such amendment or
modification and agreed to unanimously by the Parties. No waiver is binding
unless executed in writing by the Party making such waiver. No waiver of any of
the provisions of this Agreement constitutes or is to be deemed a waiver of any
other provision, whether or not similar to the provision waived, nor does any
waiver constitute a continuing waiver.

                  Section 6.3. Assignment. This Agreement is binding on, and
inures to the benefit of, the Parties and their respective predecessors,
successors, estates, heirs, and assigns, including all Reorganized Debtors as
successors in interest to the Debtors.

                  Section 6.4. Further Documents. Each of the Parties agrees to
execute all contracts, instruments, releases, agreements, or other documents and
to perform all acts necessary or appropriate to implement or further evidence
the provisions of this Agreement.


                                       13
<PAGE>   14


                  Section 6.5. No Representations or Warranties. Except as
expressly set forth in this Agreement, none of the Parties makes, or is deemed
to have made, any representation or warranty, written or oral, express or
implied, to any other Party.

                  Section 6.6. Severability. If any term or provision of this
Agreement is held by the Bankruptcy Court or any other court or tribunal of
competent jurisdiction to be invalid, void, or unenforceable, the Bankruptcy
Court or such court or tribunal may alter and interpret such term or provision
to make it valid or enforceable to the maximum extent possible, consistent with
the original purpose of the term or provision held to be invalid, void, or
unenforceable, and such term or provision will then be applicable as so altered
or interpreted. Notwithstanding such holding, alteration, or interpretation, the
remainder of this Agreement remains in full force and will in no way be
affected, impaired, or invalidated by such holding, alteration, or
interpretation.

                  Section 6.7. Consent to Entry of Bankruptcy Court Orders. Each
of the Parties consents to the jurisdiction of the Bankruptcy Court to resolve
any cases, controversies, suits, or disputes arising in connection with the
implementation, interpretation, reformation, modification, remediation of any
defect in, or rescission of this Agreement or any portion of it and
determination or declaration of the rights or obligations of any Party arising
under this Agreement.

                  Section 6.8. No Admissions. Neither this Agreement or any of
its terms, nor any negotiations, proceedings, or other actions taken or not
taken by any Party in connection with this Agreement constitute or may be deemed
to evidence an admission on the part of any Party of any liability or wrongdoing
or the truth or falsity, merit, or lack of merit of any claim released by this
Agreement or any defense to such claim. If any claim similar to any claim
released by this Agreement arises after this Agreement becomes effective, this
Agreement may not be deemed a waiver or release of such later arising claim or
any evidence as to the legitimacy of such later arising claim or the


                                       14
<PAGE>   15


propriety or legitimacy of the transactions, acts, omissions, proceedings,
matters, events, or dealings providing the basis for such later arising claim.

                  Section 6.9. Applicable Law. This Agreement is governed in all
respects by the law of the State of Ohio, without giving effect to Ohio's
principles of conflict of laws.

                  Section 6.10. Notices. All notices, requests, demands, and
other communications in connection with this Agreement must be in writing and be
delivered personally or by facsimile transmission on the first business day
after mailing (if sent by overnight courier service) or on the third business
day after mailing (if mailed by first class mail, postage prepaid, or by
registered or certified mail) addressed as follows:


<TABLE>
<S>                                                        <C>
THE ELDER-BEERMAN STORES CORP.                             Kevin E. Irwin                                    
3155 El-Bee Road                                           KEATING, MUETHING & KLEKAMP                       
Dayton, Ohio 45439                                         1800 Provident Tower                              
(937) 296-2700                                             One East Fourth Street                            
Attn:  General Counsel                                     Cincinnati, Ohio 45402                            
                                                           (513) 579-6427                                    
                                                                                                             
Richard M. Cieri                                           (Counsel to the ESOP Committee)                   
JONES, DAY, REAVIS & POGUE                                                                                   
North Point                                                Shawn M. Riley                                    
901 Lakeside Avenue                                        McDONALD, HOPKINS, BURKE & HABER CO. LPA          
Cleveland, Ohio 44114                                      2100 Bank One Center                              
(216) 586-3939                                             600 Superior Avenue, NE                           
                                                           Cleveland, Ohio 44114                             
(Counsel to the Debtors and Reorganized Debtors)           (216) 348-5400                                    
                                                                                                             
                                                           (Counsel to the Beerman Family Entities, including
                                                           Equity Directors and Zane Lessors)                
</TABLE>



                  Section 6.11. Counterparts. This Agreement may be executed in
several counterparts, each of which is to be deemed an original, but all of
which together constitute one instrument.

                  Section 6.12. Headings. The descriptive headings in this
Agreement are inserted for convenience of reference only and do not constitute
substantive provisions of this Agreement.


                                       15
<PAGE>   16


                  IN WITNESS WHEREOF, the Parties have duly executed this
Agreement as of the date set forth above.

<TABLE>
<S>                                                                   <C>
THE ELDER-BEERMAN STORES CORP.                                        LEONARD B. PEAL                                            
On behalf of itself and all Debtors                                   In his individual capacity ("LBP"); as 31% owner of        
                                                                      Beerman and 11% owner of Abco Land Development             
                                                                      Corp. ("ALD"); as trustee for LPST and TWT; as             
By: /s/ John A. Muskovich                                             beneficiary of the Rhea Peal Trust; and on behalf of all   
    ------------------------------------------                        Beerman Family Entities wholly or partially owned and/or   
     John A. Muskovich                                                controlled by LBP                                          
     Executive Vice President - Administration                                                                                   
                                                                                                                                 
THE ELDER-BEERMAN STORES CORP.                                        /s/ Leonard B. Peal                                        
Profit Sharing and Stock Ownership Plan                               ------------------------------------------                 
                                                                                                                                 
                                                                                                                                 
By: /s/ Patricia L. Gifford                                           BEERMAN-PEAL HOLDINGS, INC.                                
    ------------------------------------------                        On its behalf and that of its wholly-owned                 
                                                                      subsidiary, The Beerman-Peal Corporation                   
                                                                                                                                 
THE ELDER-BEERMAN STORES CORP.                                                                                                   
Profit Sharing and Stock Ownership Plan                               By: /s/ William S. Weprin                                  
Administration Committee                                                  ------------------------------------------             
                                                                           William S. Weprin                                     
                                                                           President                                             
By: /s/ Patricia L. Gifford                                                                                                      
    ------------------------------------------                        THE BEERMAN CORPORATION                                    
                                                                                                                                 
                                                                                                                                 
BARBARA B. WEPRIN                                                     By: /s/ William S. Weprin                                  
In her individual capacity ("BBW"); as 50% owner of The                   ------------------------------------------             
Beerman Corporation ("Beerman"); trustee for The                           William S. Weprin                                     
Leonard Peal Stock Trust ("LPST"), The Todd Weprin                         President                                             
Trust ("TWT"), and Barbara B. Weprin, Trustee                                                                                    
("BWTr"); and on behalf of all Beerman Family Entities                BEERMAN INVESTMENTS, INC.                                  
wholly or partially owned and/or controlled by BBW                                                                               
                                                                                                                                 
                                                                      By: /s/ William S. Weprin                                  
/s/ Barbara B. Weprin                                                     ------------------------------------------             
------------------------------------------                                 William S. Weprin                                     
                                                                           President                                             
                                                                                                                                 
WILLIAM S. WEPRIN                                                     THE LEONARD PEAL STOCK TRUST                               
In his individual capacity ("WSW"), and on behalf of all                                                                         
Beerman Family Entities wholly or partially owned and/or                                                                         
controlled by WSW                                                     By: /s/ Barbara B. Weprin                                  
                                                                          ------------------------------------------             
                                                                           Barbara B. Weprin                                     
/s/ William S. Weprin                                                      Trustee                                               
------------------------------------------                            
</TABLE>



                                       16
<PAGE>   17


<TABLE>
<S>                                               <C>
BARBARA B. WEPRIN, TRUSTEE                        POINT WEST III LIMITED PARTNERSHIP    
                                                                                        
                                                                                        
By: /s/ Barbara B. Weprin                         By: /s/ Barbara B. Weprin             
    ------------------------------                    ------------------------------    
     Barbara B. Weprin                                 Barbara B. Weprin                
                                                       General Partner                  
ABCO LAND DEVELOPMENT CORP.                                                             
                                                  UNIVERSITY MALL ASSOCIATES            
                                                  PARTNERSHIP                           
By:  /s/ William S. Weprin                                                              
    ------------------------------                                                      
     William S. Weprin                            By: /s/ William S. Weprin             
     President                                        ------------------------------    
                                                       William S. Weprin                
WILDCAT DEVELOPMENT LIMITED                            General Partner                  
PARTNERSHIP                                                                             
                                                  FAIRBORN COMMERCE CENTER II           
                                                  LIMITED PARTNERSHIP                   
By: /s/ Barbara B. Weprin                                                               
    ------------------------------                                                      
     Barbara B. Weprin                            By: /s/ Barbara B. Weprin             
     General Partner                                  ------------------------------    
                                                       Barbara B. Weprin                
CENTERVILLE ASSOCIATES LTD.                            General Partner                  
                                                                                        
                                                  LIVE OAK ASSOCIATES LIMITED           
By: /s/ Barbara B. Weprin                         PARTNERSHIP                           
    ------------------------------                                                      
     Barbara B. Weprin                                                                  
     Trustee of BWTr, General Partner             By: /s/ Barbara B. Weprin             
                                                      ------------------------------    
CENTERVILLE ASSOCIATES III LIMITED                     Barbara B. Weprin                
PARTNERSHIP                                            General Partner                  
                                                  

By: /s/ Barbara B. Weprin
    ------------------------------
     Barbara B. Weprin
     Trustee of BWTr, General Partner
</TABLE>



                                       17
<PAGE>   18


                    EXHIBIT A -- BEERMAN FAMILY LEASE CLAIMS



<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                                     AMOUNT               RESOLVED
      CLAIMANT              DEBTOR                       BASIS                       CLAIMED               AMOUNT
------------------------------------------------------------------------------------------------------------------------
<S>                   <C>                  <C>                                       <C>                 <C>
BWTr                  Elder-Beerman        Broadmoor Plaza
                                                a. Prepetition Real Estate
                                                  ("R/E") Taxes                      $    24,000.71      $    24,000.71
                                                b. Lease Rejection Damages               147,333.10          147,333.10
                                                c. Postpetition R/E Taxes                  7,639.15            7,639.15
                                                                                        -----------            --------
                                                                                     $   179,026.96      $   179,026.96
                                           TOTAL
------------------------------------------------------------------------------------------------------------------------
BC                    Elder-Beerman        Van Buren Shopping Center
                                                a. Prepetition R/E Taxes             $    38,638.64      $    38,638.64
                                                b. Percentage Rent                       109,847.75          109,847.75
                                                c. Postpetition R/E Taxes                  5,364.80            5,364.80
                                                                                         ----------          ----------
                                           TOTAL                                     $   153,851.19      $   153,851.19
------------------------------------------------------------------------------------------------------------------------
The Beerman-Peal      Elder-Beerman        1. Westgate Shopping Center
Corp.                                           a. Prepetition R/E Taxes             $   106,558.83
                                                b. Postpetition R/E Taxes                  7,835.20
                                           2. Woodville Mall                                          To be addressed
                                                a. Prepetition R/E Taxes                  32,528.17   by Toledo Stores
                                                b. Postpetition R/E Taxes                  4,273.07     Modification
                                           3. North Towne Shopping Center                                Agreements
                                                a. Prepetition R/E Taxes                 152,163.53
                                                b. Postpetition R/E Taxes                 11,188.50
                                                                                         ----------
                                           TOTAL                                     $   314,547.30
------------------------------------------------------------------------------------------------------------------------
Centerville           Elder-Beerman        Centerville Place Shopping Center
Associates III                                  a. Prepetition R/E Taxes             $    76,387.91      $          -0-
Limited                                         b. Postpetition R/E Taxes                 10,606.12           10,606.12
Partnership
                                           TOTAL                                     $    86,994.03      $    10,606.12
------------------------------------------------------------------------------------------------------------------------
BC and ALD            Elder-Beerman        Zane Plaza Shopping Center
                                           1. Dept. Store
                                                a. Prepetition R/E Taxes             $     6,864.00      $     6,864.00
                                                b. Percentage Rent                        73,050.42           73,050.42
                                                c. Repairs                                   491.57              491.57
                                                d. Postpetition R/E Taxes                    953.04              953.04
                                           2. Home Store
                                                a. Prepetition R/E Taxes                   5,667.20            5,667.20
                                                b. Postpetition R/E Taxes                    786.86              786.86
                                                                                         ----------           ---------
                                           TOTAL                                     $    87,813.09      $    87,813.09
------------------------------------------------------------------------------------------------------------------------
Fairborn              Elder-Beerman        Elder-Beerman Distribution Center
Commerce Center                                 Prepetition R/E Taxes                $   101,623.19      $   101,623.19
II Limited
Partnership
------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       1
<PAGE>   19


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                                     AMOUNT               RESOLVED
      CLAIMANT              DEBTOR                       BASIS                       CLAIMED               AMOUNT
------------------------------------------------------------------------------------------------------------------------
<S>                   <C>                  <C>                                       <C>                 <C>
BBW, LBP, and         Elder-Beerman        Skyway Plaza Shopping Center
BC                                              a. Insurance                         $     2,407.14      $     2,407.14
                                                b. Lease Rejection Damages               339,376.08          339,376.08
                                                c. Contingent Claim                    unliquidated                 -0-
                                                d. Rent for 11/96-1/97                    31,958.50           31,958.50
                                                e. Prepetition R/E Taxes                  22,523.23           22,523.23
                                                f. Postpetition R/E Taxes                 37,666.82           37,666.82
                                                g. Damage to Premises                     27,550.00           13,775.00
                                                                                         ----------
                                           TOTAL                                     $   461,481.77      $   447,706.77
------------------------------------------------------------------------------------------------------------------------
University Mall       Elder-Beerman        University Mall Shopping Center
Associates                                      a. Prepetition R/E Taxes             $    31,134.21      $    31,134.21
Partnership                                     b. Prepetition Insurance                   1,888.59            1,888.59
                                                c. Postpetition R/E Taxes                  4,322.89            4,322.89
                                                d. Postpetition Insurance                  1,575.40            1,575.40
                                                                                         ----------          ----------
                                           TOTAL                                     $    38,921.09      $    38,921.09
------------------------------------------------------------------------------------------------------------------------
Wildcat               Elder-Beerman        North Park Center
Development                                     a. Prepetition R/E Taxes             $    76,658.91      $    76,658.91
Limited                                         b. Prepetition Insurance                   4,464.54            4,464.54
Partnership                                     c. Prepetition Disposal Charge               859.78              859.78
                                                d. Postpetition R/E Taxes                 18,472.41           18,472.41
                                                e. Prepetition Water Charge                  390.86              390.86
                                                f. Prepetition Late Charges                1,633.67            1,633.67
                                                                                         ----------          ----------
                                           TOTAL                                     $   102,480.17      $   102,480.17
------------------------------------------------------------------------------------------------------------------------
BWTr                  Bee-Gee              Eastown Strip Center
                                                Postpetition Insurance               $       235.86      $       235.86
------------------------------------------------------------------------------------------------------------------------
BC                    Bee-Gee              Van Buren Shopping Center
                                                Percentage Rent                      $     3,668.85      $     3,668.85
------------------------------------------------------------------------------------------------------------------------
Centerville           Bee-Gee              Centerville Place Shopping Center         $         0.00
Associates Ltd.
------------------------------------------------------------------------------------------------------------------------
Point West III        Bee-Gee              Bee-Gee Corporate Offices
Limited                                         a. 10/95 Rent                        $     8,252.75      $     8,252.75
Partnership                                     b. Lease Rejection Damages               159,465.64          153,276.00
                                                c. Repairs                                17,566.53            8,783.27
                                                d. Lost Access Card                            5.00                5.00
                                                e. 3/96, 4/96 Rent                        16,505.50           16,505.50
                                                f. Maintenance Billing                       612.20              612.20
                                                                                         ----------
                                           TOTAL                                     $   202,407.62      $   187,434.72
------------------------------------------------------------------------------------------------------------------------
BBW, LBP, and         Bee-Gee              Skyway Plaza Shopping Center
BC                                              Lease Rejection Damages              $    41,292.00      $    41,292.00
------------------------------------------------------------------------------------------------------------------------
University Mall       Bee-Gee              University Mall Shopping Center
Associates                                      a. Prepetition R/E Taxes             $        85.56      $        85.56
Partnership                                     b. Utilities                                 137.19              137.19
                                                c. Claim                               unliquidated                0.00
                                                                                         ----------            --------
                                           TOTAL                                     $       222.75      $       222.75
------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                        2

<PAGE>   20



<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                                     AMOUNT               RESOLVED
      CLAIMANT              DEBTOR                       BASIS                       CLAIMED               AMOUNT
------------------------------------------------------------------------------------------------------------------------
<S>                   <C>                  <C>                                       <C>                <C>
Wildcat               Bee-Gee              North Park Center
Development                                     a. Postpetition Disposal Charges     $        39.35     $         39.35
Limited                                         b. Prepetition Water                         287.10              287.10
Partnership                                     c. Postpetition Water                        229.91              229.91
                                                d. Claim                               unliquidated                0.00
                                                                                         ----------          ----------
                                           TOTAL                                     $       556.36     $        556.36
------------------------------------------------------------------------------------------------------------------------
Live Oak              Margo's              Margo's Headquarters
Associates Limited                              a. Prepetition Rent                  $     4,383.52     $      4,383.52
Partnership                                     b. Prepetition Taxes                      10,340.42           10,340.42
                                                                                         ----------          ----------
                                           TOTAL                                     $    14,723.94     $     14,723.94
------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                        3

<PAGE>   21



                EXHIBIT B -- MISCELLANEOUS BEERMAN FAMILY CLAIMS



<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                               AMOUNT                        RESOLVED
        CLAIMANT                         BASIS                                 CLAIMED                        AMOUNT
------------------------------------------------------------------------------------------------------------------------
<S>                      <C>                                               <C>                              <C>
LBP                      Indemnification                                     unliquidated                   $     0.00
                         Guaranty                                          $ 1,800,000.00                         0.00
                         Deferred Compensation                               unliquidated                         0.00
                         Wages                                                       0.00                         0.00
                                                                               ----------
                         TOTAL                                             $ 1,800,000.00                   $     0.00
------------------------------------------------------------------------------------------------------------------------
BBW                      Indemnification                                     unliquidated                   $     0.00
                         Guarantee                                         $ 1,800,000.00                         0.00
                         ESOP (as former employee)                           unliquidated                         0.00
                         Van Buren Shopping Center Parking
                         Lot                                                       965.80                       965.80
                              a. Prepetition R/E Taxes                             133.10                       133.10
                              b. Postpetition R/E Taxes                              0.00                         0.00
                         Wages                                                 __________
                                                                           $ 1,801,098.90                   $ 1,098.90
                         TOTAL
------------------------------------------------------------------------------------------------------------------------
WSW                      Indemnification                                     unliquidated                   $     0.00
                         Guarantee                                         $ 1,800,000.00                         0.00
                                                                               ----------
                         TOTAL                                             $ 1,800,000.00                   $     0.00
------------------------------------------------------------------------------------------------------------------------
The Beerman Realty       937 Patterson Boulevard
Co.                           a. Repairs                                   $     4,857.45                   $ 4,857.45
                              b. Claim                                           8,636.90                     8,636.90
                              c. Environmental Remediation                      86,000.00                    76,739.34
                                                                               ----------                   ----------
                         TOTAL                                             $    99,494.35                   $90,233.69
------------------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>   22



                        EXHIBIT C -- ELDER-BEERMAN CLAIMS




<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                                     AMOUNT                  RESOLVED
         AFFILIATE                             BASIS                                 CLAIMED                  AMOUNT
------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                                                 <C>                     <C>
LBP                         Personal Use of Company Airplane                    $     14,552.49         $     14,552.49
                            Credit Card Balance                                       82,046.74               76,548.95
                                                                                     ----------              ----------
                            TOTAL                                               $     96,599.23         $     91,101.44
------------------------------------------------------------------------------------------------------------------------
BBW                         Personal Use of Company Airplane                    $     39,954.11         $     39,954.11
------------------------------------------------------------------------------------------------------------------------
The Beerman Realty Co.      Personal Use of Company Airplane                    $      1,947.91         $      1,947.91
                            Credit Card Balance                                      192,379.27              192,379.27
                                                                                     ----------              ----------
                            TOTAL                                               $    194,327.18         $    194,327.18
------------------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>   23



                        EXHIBIT D -- FAIRBORN RIGHT TERMS



Subject Real Property:                         All of the real property 
                                               contiguous to the real property
                                               currently leased (the "Leased
                                               Parcel") to Elder-Beerman by
                                               Fairborn Commerce Center II Ltd.
                                               and east of Exchange Court (being
                                               approximately 13.6 acres) and
                                               north of the Leased Parcel (being
                                               approximately 4.3 acres).

Option to Purchase:                            At any time during the term (or 
                                               any extension thereof) of the
                                               lease for the Elder-Beerman
                                               Fairborn Distribution Center,
                                               Elder-Beerman will have the
                                               option to purchase the Subject
                                               Real Property at a per acre cost
                                               calculated at fair market value.
                                               If the parties cannot agree on a
                                               fair market value, the
                                               determination of fair market
                                               value will be made in binding
                                               arbitration. 

Right of First Refusal:                        1.   At any time during the term 
                                                    (or any extension thereof)
                                                    of the lease for the
                                                    Elder-Beerman Fairborn
                                                    Distribution Center, if
                                                    Beerman Realty receives a
                                                    bona fide offer to purchase
                                                    all or a portion of the
                                                    Subject Real Property (the
                                                    "Triggering Offer"), Beerman
                                                    Realty shall provide notice
                                                    of the Triggering Offer to
                                                    Elder-Beerman within five
                                                    days of receipt of the
                                                    Triggering Offer and
                                                    Elder-Beerman shall have 30
                                                    days from receiving notice
                                                    of the Triggering Offer in
                                                    which to purchase the
                                                    Subject Real Property under
                                                    the terms and conditions of
                                                    such offer, subject to the
                                                    purchase price provision set
                                                    forth in 2 below.

                                               2.   The Elder-Beerman offer and
                                                    sale must be for all of the
                                                    Subject Real Estate,
                                                    provided that if the
                                                    Triggering Offer is for less
                                                    than all of the Subject Real
                                                    Estate, the purchase price
                                                    to be paid by Elder-Beerman
                                                    shall be at a per acre cost
                                                    calculated at fair market
                                                    value for all of the Subject
                                                    Real Estate. If the parties
                                                    cannot agree on a fair
                                                    market value, the
                                                    determination of fair market
                                                    value will be made in
                                                    binding arbitration.




<PAGE>   24


                           EXHIBIT E--ZANE LEASE TERMS

                                CHILLICOTHE, OHIO



<TABLE>
------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>
Size:                                   55,940 sq. ft. plus 3,000 sq. ft. Men's Store and 17,609 sq. ft. Furniture Store.
--------------------------------------- --------------------------------------------------------------------------------------
Expansion:                              Tenant has the right to expand the existing 55,940 sq. ft. department store up to
                                        100,000 sq. ft.
--------------------------------------- --------------------------------------------------------------------------------------
Term:                                   40 years with a base term of 20 years and two 10 year options.
--------------------------------------- --------------------------------------------------------------------------------------
Rent                                    $4.50/sq. ft. First 10 years (on 55,940 sq. ft. only).
                                        $5.00/sq. ft. Second 10 years (on 55,940 sq. ft. only).
--------------------------------------- --------------------------------------------------------------------------------------
Percentage Rent:                        First 10 years--2% over $12,586,500 and 1 1/2% over $14,586,500.  Then adjusted
                                        each 10 years.
--------------------------------------- --------------------------------------------------------------------------------------
Common Area Maintenance:                Five years $.40/sq. ft. with an increase of $.05 every five years.
--------------------------------------- --------------------------------------------------------------------------------------
Taxes:                                  Pro rata share.
--------------------------------------- --------------------------------------------------------------------------------------
Insurance:                              Pro rata.
--------------------------------------- --------------------------------------------------------------------------------------
Maintenance:                            Roof and structure by landlord.  All other maintenance by tenant including glass and
                                        doors.
--------------------------------------- --------------------------------------------------------------------------------------
Operating Covenant:                     Ten years as "Elder-Beerman."
--------------------------------------- --------------------------------------------------------------------------------------
Recapture by Landlord:                  Tenant to turn over 17,609 sq. ft. Home Store space and 3,000 sq. ft. Men's Store
                                        space to landlord if tenant exercises right to expand.
--------------------------------------- --------------------------------------------------------------------------------------
Construction:                           Tenant to build expansion.  Estimated cost:  $70/sq. ft.
                                        Landlord to raze existing Goodyear building and compact soil for tenant's building.
--------------------------------------- --------------------------------------------------------------------------------------
Land Purchase:                          Landlord to cover the $25,000 expense to acquire adequate land to accommodate the
                                        building expansion.
--------------------------------------- --------------------------------------------------------------------------------------
Timing:                                 Tenant has the right to expand the existing department store from the current 55,940
                                        sq. ft. to between 80,000 and 100,000 sq. ft. during the first 36 months of the
                                        primary term of the lease.  The tenant will pay any increase in land cost over the
                                        current $25,000 price caused by the timing of the expansion.
------------------------------------------------------------------------------------------------------------------------------
</TABLE>