PURCHASE AND SALE AGREEMENT


 
  
 

   

 

  

  

 Exhibit 10.10

  

 PURCHASE AND SALE AGREEMENT

 

 Dated as of March 10, 2000

  

 effective as of January 31, 2000

 

 by and between

 

 BLUE STAR IMPORTS, L. P. 

 

 And

 

 SCHOTTENSTEIN STORES CORPORATION

 

  

  

  PURCHASE AND SALE AGREEMENT

  

         THIS PURCHASE AND SALE
   AGREEMENT (this "Agreement") is dated as of March 10, 2000,
   effective as of the 31st day of January, 2000, by and between SCHOTTENSTEIN
   STORES CORPORATION, a Delaware corporation ("Seller") and BLUE STAR
   IMPORTS, L.P., a Pennsylvania    limited partnership ("Buyer
   "). 

  BACKGROUND

  

         A.    
       The Value City Imports Division of Seller (the
   "Division") is engaged in    the business of importing into the
   United States goods and merchandise for resale    for the account of Buyer
   and certain of its affiliates as well as certain other    retail store
   chains and affiliates of Seller.

 

         B.    
       Buyer desires to acquire from Seller, and Seller
   desires to transfer to Buyer, all of the Division's assets and business that
   pertain to the importation into the United States, for the account of Buyer,
   American Eagle Outfitters, Inc., a Delaware corporation and an affiliate of
   Buyer ("AEOI") and any and all other subsidiaries of Buyer
   or AEOI (Buyer, AEOI and their subsidiaries are hereinafter collectively
   referred to as the "AEO Companies"), of goods and
   merchandise for resale by any of the AEO Companies (collectively,
   "AEO Merchandise") which merchandise may include but shall
   not be limited to wearing apparel, textile goods, shoes and other goods and
   accessories, all in accordance with and subject to the terms of this
   Agreement.

 

  PROVISIONS

 

          In consideration of
   the foregoing premises and of the mutual covenants hereinafter contained and
   intending to be legally bound hereby, the parties covenant and agree as
   follows:

 

  ARTICLE I
 

 DEFINITIONS

  

         Section 1.01.
   Definitions. As used herein, the following terms have the meanings
   assigned to them below, unless the context in which any such term is used
   requires otherwise:

         "AAA"
   means American Arbitration Association.

         "AEO Companies" has
   the meaning ascribed to such term in the second recital to this
   Agreement.

         "AEOI" has the
   meaning    ascribed to such term in the second recital to this Agreement.

         "AEO Merchandise
   " has the meaning ascribed to such term in the second recital to
   this Agreement.

         "Agreement
   " means this Purchase and Sale Agreement as amended from time to
   time.

         "Assignment and
   Assumption Agreement" means the agreement, substantially in the
   form of Exhibit A hereto, pursuant to which (i) Buyer will assume and
   undertake to perform, satisfy and discharge the Assumed Liabilities and (ii)
   subject to the provisions of Section 3.04 hereof, Seller will assign the
   Assumed Contracts and the Prepaid Expenses to Buyer.

         "Assumed Contracts
   " means all rights and interests of the Division and/or Seller
   under all contracts, agreements, deposits, bonds, manifests, and open
   purchase and sale orders of the Business, including but not limited to those
   other contracts, etc. identified on Schedule 1 hereto.

         "Assumed Liabilities
   " has the meaning ascribed to such term in Section 3.04 hereof.

         "Bill of Sale
   " means a bill of sale from Seller to Buyer in substantially the
   form attached hereto as Exhibit B.

         "Board of Directors
   " means the Board of Directors of AEOI.

         "Books and Records
   " means all books, records, logs, customer lists and other
   commercial records or documents of Seller relating to the Business.

         "Business"
   means the business of the Division relating to the importation of AEO
   Merchandise for the AEO Companies, the document production and
   administration arising from or relating to the importation of the AEO
   Merchandise and all assets, goodwill and relationships with customers,
   suppliers, shippers and customs agents associated therewith.

         "Buyer"
   has the meaning described to such term in the preamble to this Agreement.

         "Buyer's Accountants
   " means Buyer's in-house accounting personnel and such other
   accountants as may be selected by Buyer.

         "Closing"
   has the meaning ascribed to such term in Section 6.01 hereof.

         "Closing Balance
   Sheet" has the meaning ascribed to such term in Section 3.03
   hereof.

         "Closing Date
   " has the meaning ascribed to such term in Section 6.01 hereof.

         "Closing Financial
   Statements"    has the meaning ascribed to such term in Section 3.03
   hereof.

         "Closing Profit and Loss
   Statement" has the meaning ascribed to such term in Section 3.03
   hereof.

         "Committee
   " means the Independent Committee of the Board of Directors of AEOI.

         "Default" means any
   default or breach that arises out of or results from the Closing or any act,
   omission or occurrence prior to the Closing.

         "Detailed Accounting
   " has the meaning ascribed to such term in Section 3.03 hereof.

         "Dispute"
   is used as defined in Section 3.06 hereof.

         "Division"
   is used as defined in the first recital to this Agreement.

         "Employee Benefit
   Plan"    means any "employee benefit plan", as such term is defined in
   Section 3(3) of    ERISA, and all other employee compensation and benefit
   plans of Seller that    relate to the employees engaged in the Business
   (including all bonus, profit    sharing, incentive compensation and deferred
   compensation plans maintained by    Seller or to which Seller contributes or
   has contributed that relate to the    Business).

         "Employment
   Agreements" means the Employment Agreements between Buyer and Guy
   Bradford and Hank Shechtman, and pursuant to which Buyer shall hire Messrs.
   Bradford and Shechtman effective as of the Closing Date. 

         "Employment
   Practices and Shared Services Agreement" means the Employment
   Practices and Shared Services Agreement between Seller and Buyer
   substantially in the form of Exhibit C hereto, pursuant to which Buyer and
   Seller will undertake to address the allocation of cost and expense of
   certain shared services, and the use of the Software and Intellectual
   Property by Buyer, following the Closing Date and to observe certain
   prohibitions with respect to hiring current employees of each other with
   respect to the Business.

         "Encumbrance" means
   any lien, claim, charge, security interest, restriction or encumbrance of
   any    nature or kind, other than Permitted Encumbrances.

         "ERISA" means
   the Employee Income Security Act of 1974, as amended.

         "ERISA Affiliate"
   means    any trade or business, whether or not incorporated, which is part
   of a controlled    group as determined under ERISA Section 4001(a)(14).

         "Excluded
   Liabilities"    has the meaning ascribed to such term in Section 3.05
   hereof.

         "Fairness
   Opinion" means the opinion of Houlihan Lokey Howard & Zukin
   Financial Advisors, Inc. dated March 9, 2000 to the Committee, in which such
   firm opined as to the fairness of the Purchase Price to be paid by Buyer in
   exchange for the Purchased Assets and the Business.

         "Financial
   Statements"    means, collectively, the Year-End Financial Statements
   and the Monthly Financial    Statements of the Business.

         "Good Standing
   Certificate"    means one or more certificates from the secretary of the
   state and/or the department    of revenue or taxation of a jurisdiction to
   the effect that the corporation    that is the subject of such certificate
   is a corporation presently subsisting    in good standing under the laws of
   such jurisdiction and has paid all franchise    and/or capital stock taxes
   required to be paid by such corporation to such jurisdiction.

         "Insurance Policies"
   has the meaning ascribed to such term in Section 4.01(r) hereof.

         "Intellectual
   Property"    means all United States and foreign patents and patent
   applications, the inventions    claimed in said patents and patent
   applications, all related trade secrets,    know-how, methods and processes,
   and all copyrights, technology and proprietary    information necessary for,
   relating to, or used or useful in connection with,    the Business, the
   Contracts and/or the Work in Process.

         "Law" means any
   presently    existing law, statute, ordinance, rule, regulation or code
   adopted, enacted    or promulgated by any government or governmental
   agency.

         "Material Adverse
   Effect"    means a material adverse effect on the results of operations
   or financial condition    of any of the Business or the Purchased Assets.

         "Monthly Financial
   Statements"    means Seller's interim financial statements for the
   Division as of the following    dates and for the periods then ended:
   October, 1999 and December, 1999, copies    of which have been provided to
   Buyer.

         "Officers'
   Certificate"    means a certificate signed by the Chairman of the Board
   of Directors, the President    or Vice President and by the Treasurer, an
   Assistant Treasurer, the Secretary    or an Assistant Secretary of any
   corporation delivering such certificate, or    by the same such officers of
   the corporate general partner of any partnership    delivering such
   certificate.

         "OSHA" means the
   Occupational    Safety and Health Act.

  

         "Other Seller
   Documents"    has the meaning ascribed to in Section 3.05(a) hereof.

         "Permits and
   Licenses"    means all of the licenses and permits, certificates of
   authority and other approvals    and authorizations of Seller, governmental
   or otherwise, that relate to or are    necessary for or used in connection
   with the Business or the Purchased Assets    including, without limitation,
   those identified on Schedule 2 hereto.

         "Permitted
   Encumbrances"    means, collectively, mechanics', carriers', workmen's,
   repairmen's or other    like liens arising or incurred in the ordinary
   course of conduct of the Business,    liens for taxes, assessments and other
   governmental charges that are not due    and payable or that may thereafter
   be paid without penalty and other imperfections    of title or encumbrances,
   if any, that do not materially (i) detract from the    value of the property
   subject thereto or (ii) impair the operation of the Business.

         "Personal Property"
   means all machinery, equipment, software, systems, and all other personal
   property,    tangible and intangible, of Seller that are listed or referred
   to on Schedule    3 hereto.

         "Pre-Closing
   Adjustment" has the meaning ascribed to such term in Section 3.02
   hereof.

         "Pre-Closing
   Liabilities" means all liabilities arising out of ownership of the
   Purchased Assets and conduct of the Business by Seller prior to the Closing
   Date.

         "Prepaid Expenses"
   means    all prepaid expenses and deposits in connection with the
   Business.

         "Purchase Price" has
   the meaning ascribed to such term in Section 3.01 hereof.

         "Purchased Assets"
   has    the meaning ascribed to such term in Section 2.01 hereof.

         "Seller" has the
   meaning    ascribed to such term in the preamble to this Agreement.

         "Seller Operational
   Liabilities" means all Pre-Closing Liabilities arising in whole or
   in substantial part out of the actions of a Seller Responsible Party.

         "Seller Responsible
   Party" means the Seller, its officers, directors, contractors,
   agents and/or employees

         "Seller Transfer
   Documents"    means, collectively, the Assignment and Assumption
   Agreement, and the Bill of    Sale.

         "Seller's
   Accountants"    means Seller's in-house accounting personnel and/or such
   other accountants as    Seller may select.

         "Software"
   means all computer programs and licenses therefor (including user manuals,
   bug fixes, corrections, enhancements, updates, or other modifications to
   such programs or manuals) used or useful in connection with, or otherwise
   relating to, the Business, including without limitation the software
   identified on Schedule 4 hereto.

         "Year-End Financial
   Statements"    means the Division's unaudited financial statements as of
   July 31, 1999, 1998,    1997 and for the years then ended, copies of which
   have been provided to Buyer.  

  ARTICLE II
 

 PURCHASE AND SALE; DESCRIPTION OF ASSETS

          Section 2.01.
   Purchased Assets. In accordance with, and subject to the terms and
   conditions of, this Agreement, Buyer shall purchase from Seller, and Seller
   shall sell, assign, convey, transfer and deliver to Buyer, free and clear of
   any and all Encumbrances, the Business including, without limitation, the
   following assets and properties (collectively, the "Purchased
   Assets"):

         (a)    
       the Personal Property;

         (b)    
       the Assumed Contracts (provided that where Seller is
   required to continue to be a party to such contracts or where Seller will
   continue to require or perform services under such contracts, Seller shall
   use its best efforts to add Buyer as an additional party, rather than the
   sole transferee, of such contracts);

         (c)    
       the right to use the Intellectual Property and
   Software pursuant to the Employment Practices and Shared Services
   Agreement;

         (d)    
       the Permits and Licenses; 

         (e)    
       the Books and Records as identified on Schedule 14
   (which listed items identified on Schedule 14 are to be delivered to Buyer
   at Closing; and Buyer shall have access to and the right to copy all other
   Books and Records);

         (f)    
       the Prepaid Expenses.

         Seller acknowledges and
   agrees that, with respect to any Assumed Contracts, which are, in their
   nature, by law, by their terms or otherwise, nonassignable, or which contain
   a covenant against assignment, this instrument shall, notwithstanding
   anything elsewhere herein contained, be construed as an assignment to Buyer
   of the equitable interest in the same insofar as is legally permissible
   without violation of law or breach of the terms or condition thereof, with
   the right in Buyer or its successors and assigns (i) to have said claims,
   contracts, commitments or other agreement, if any, held in trust by Seller
   so as to enable Buyer or its successors and assigns to use and enjoy the
   full
 benefit thereof, (ii) to have transferred to Buyer or its successors or
   assigns any and all such property or rights which shall become assignable as
   soon as the same shall become assignable, and (iii) to take and have taken
   any action which may be taken without violation of law and without any
   breach as aforesaid which is necessary or appropriate to make such contract,
   property or rights assignable. Seller agrees that in any instance in which
   nonassignability of any such contract, property or rights may be removed by
   the consent of any party or parties, Seller will use its best efforts to
   obtain the consent of all such parties to the assignment of the property or
   rights in question to Buyer. If such a consent is not obtained, or if an
   attempted assignment would be ineffective or would affect Seller's rights so
   that Buyer or its successors and assigns in fact would not receive such
   contract, property or rights, Seller will cooperate with Buyer or its
   successors and assigns on any reasonable arrangement, not contrary to law,
   designed to provide for Buyer or its successors and assigns the benefit
   under any such Assumed Contracts and enforcement thereof, and for the
   benefit of Buyer or its successors and assigns, of any and all rights of
   Seller against any party thereto arising out of breach or cancellation by
   such party or otherwise.

 ARTICLE III
 

 PURCHASE PRICE

         Section 3.01.
   Purchase Price. In exchange for the Business and the Purchased
   Assets, Buyer shall deliver to Seller, by wire transfer of immediately
   available funds at the Closing the sum of Eight Million Five Hundred
   Thousand Dollars ($8,500,000) (the "Purchase Price"), plus or minus
   customary prorations. 

         Section 3.02.
   Pre-Closing Adjustment. On the day immediately prior to Closing,
   Seller shall apply any deposits and sums previously received from the AEO
   Companies as of such date, in the following manner: First to billed accounts
   receivable balances, then to any unbilled receivables relating to the
   importation of AEO Merchandise for any AEO Companies. Seller acknowledges
   and agrees that after January 31, 2000 no profit shall be charged by Seller
   to Buyer for importing or other services provided by Seller after January
    31, 2000 to Buyer in connection with the Business. The adjustment as
   described in this Section 3.02 is called the "Pre-Closing
   Adjustment".

         Section 3.03.
   Post Closing Adjustment. Within forty-five (45) days following the
   Closing, Seller shall prepare and deliver to Buyer a balance sheet for the
   Division dated as of the Closing Date (the "Closing Balance Sheet"),
   a profit and loss    statement for the Division for the period commencing
   August 1, 1999 and ending    on the Closing Date (the "Closing Profit and
   Loss Statement"), a detailed    accounting of all prepaid expenses and
   accounts payable of the Business and    all unbilled costs and expenses paid
   by Seller prior to Closing for Buyer's    account with respect to
   importation of AEO Merchandise by Seller (the "Detailed
   Accounting") (the Closing Balance Sheet, the Closing Profit and
   Loss Statement and Detailed Accounting being collectively called the
   "Closing Financial Statements"), each of which shall be prepared in a
   manner consistent    with the Financial Statements and in accordance with
   generally accepted accounting    principles. Following the Closing, Buyer's
   Accountants and Seller's
 Accountants shall have the right to review and audit the Closing Financial
   Statements. Buyer's Accountants shall notify Seller of their disagreement
   with any amount shown on or underlying the Closing Financial Statements
   within ninety (90) days following delivery thereof. In the event that
   Buyer's Accountants deliver notice of any disagreement, Buyer's Accountants
   and Seller and/or Seller's Accountants shall meet and attempt to resolve
   such disagreement and to agree upon a mutually acceptable presentation of
   such statements and/or schedule. Should Buyer's Accountants and Seller
   and/or Seller's Accountants be unable to reach such an agreement within
   thirty (30) days after delivery by Buyer's Accountants of a notice of
   disagreement, the matter shall be submitted within five (5) business
   days following expiry of such thirty (30) day period to a "Big Five"
   accounting firm selected by Seller and Buyer or, if Buyer and Seller are
   unable to agree on such accounting firm within such five (5) business day
   period, the matter shall be submitted by the parties to Price Waterhouse
   Coopers on the first business day following expiry of such five (5) business
   day period, and the parties agree to use their best efforts to cause the
   decision of such third accounting firm to be rendered within thirty (30)
   days following such submission. The decision of such third accounting firm
   shall be conclusive and binding on the parties. The parties agree to effect
   appropriate adjustments between them based upon the Closing Financial
   Statements as they exist following resolution of any disagreement in
   accordance with the foregoing.

         Seller shall bear the costs
   and expenses of Seller's Accountants, Buyer shall bear the cost and expenses
   of Buyer's Accountants and, in the event of any referral of a dispute to a
   third accounting firm in accordance with the foregoing, Seller and Buyer
   agree to share equally the costs and expenses of such third accounting
   firm.

         Section 3.04.
   Assumption of Liabilities. At the Closing, Buyer and Seller shall
   execute and deliver the Assignment and Assumption Agreement pursuant to
   which Buyer shall assume, undertake to perform, satisfy and discharge only
   the following liabilities and obligations of Seller and/or the Division
   (collectively, the "Assumed Liabilities"):

         (a)    
       the liabilities arising out of ownership of the
   Purchased Assets and conduct of the Business by Buyer (and not caused by a
   Seller Responsible Party) as arise out of events first occurring or
   conditions first existing after the Closing Date; and

         (b)    
       those Pre-Closing Liabilities (other than Seller
   Operational Liabilities) arising with respect to the importation of AEO
   Merchandise prior to the Closing Date which were not caused by a Seller
   Responsible Party (such as, for example, a customs audit liability of the
   Seller following Closing Date that resulted from incomplete or inaccurate
   information provided by Buyer, or another party other than a Seller
   Responsible Party, to the Seller).

         Buyer shall be solely
   responsible for all liabilities, demands, damages, costs and expenses
   (including reasonable attorney's fees), and shall indemnify, defend and hold
   harmless the Seller and its affiliates and their respective officers and
   directors,
 shareholders and representatives, from and against the Assumed Liabilities and
   all liabilities, claims, demands, damages, costs and expenses (including
   reasonable attorney fees) arising from the conduct, actions, inactions or
   omissions of Buyer, its officers, directors, contractors, agents or
   employees (and not caused by a Seller Responsible Party) after the Closing
   Date.

             
       Section 3.05. Excluded Liabilities.
   Anything in this Agreement to the contrary notwithstanding, Buyer shall not
   assume (other than only the Assumed Liabilities expressly agreed to be
   assumed by Buyer pursuant to the provisions of paragraph 3.04 of this
   Agreement) and shall not undertake to pay, perform, satisfy or discharge any
   liability or obligation of Seller, the Business or the Division or any other
   person or entity of any kind, absolute or contingent, known or unknown
   (collectively, the "Excluded Liabilities"),  including without
   limitation the following:

         (a)    
       any liability or obligation of Seller that arises
   out of the transactions contemplated to occur pursuant to this Agreement or
   that results from any breach or default by Seller under this
   Agreement, the Seller Transfer Documents or any other agreement,
   certificate, assignment, document or instrument that may be executed or
   delivered in connection with this Agreement or the transactions contemplated
   to occur hereunder (the Seller Transfer Documents and such other documents
   being sometimes collectively referred to as the "Other Seller
   Documents");

         (b)    
       any liability or obligation relating to income,
   franchise, sales, use, payroll, unemployment, withholding real or personal
   property or any other taxes of Seller or the Division, including any
   interest or penalties related thereto; 

         (c)    
       any liability or obligation of Seller or the
   Division relating to indebtedness for borrowed money; 

         (d)    
       any liability or obligation relating to any Default
   by Seller under any of the Assumed Contracts or the Permits and Licenses;

         (e)    
       Reserved. 

         (f)    
       any liability or obligation of Seller or the
   Division relating to any illness, injury, occupational or other disease or
   other health or safety risk that arises out of or results from any act,
   omission or occurrence prior to the Closing, including without limitation
   those arising under Section 7.04 hereof;

         (g)    
       any liability or obligation relating to the
   employees of Seller or the Division (other than only accrued vacation pay
   and sick pay for Guy Bradford, Hank Shechtman, and for any other employee of
   Seller who Buyer hires effective as of the Closing Date), including any
   severance obligation and any compensation required to be paid and benefits
   required to be provided under any of the Employee Benefit Plans;

         (h)    
       any liability or obligation as shown on the
   Financial Statements (other than
 those liabilities mutually agreed to by Seller and Buyer (or as determined by
   the dispute resolution procedures) in accordance with the post-Closing
   adjustments contemplated pursuant to Section 3.03 hereof) or otherwise
   relating to any services performed by Seller or the Division prior to the
   Closing; 

         (i)    
       that portion of any liability or obligation relating
   to the violation of any Law relating to the Business or the Division that
   arises out of or results from any act, omission or occurrence of a Seller
   Responsible Party prior to the Closing;

         (a)    
       any liability or obligation of the Division to any
   of affiliates of Seller, except as expressly set forth in this Agreement;
   and

         (b)    
       any Pre-Closing Liability (other than only the
   Assumed Liabilities).

         Seller shall be solely
   responsible for all liabilities, demands, damages, costs and expenses
   (including reasonable attorney's fees), and shall indemnify, defend and hold
   harmless the AEO Companies and their respective officers, directors,
   shareholders and representatives, from and against all liabilities, claims,
   demands, damages, costs and expenses (including reasonable attorney's fees)
   arising or resulting from the Excluded Liabilities and/or the conduct,
   actions, inactions or omissions of a Seller Responsible Party prior to the
   Closing Date. To the extent that a third party, not Buyer or a Seller
   Responsible Party, is responsible for such liabilities, damages, costs or
   expenses being imposed against Buyer, then the Seller and Buyer will use
   their best efforts to pursue such third party and obtain a recovery
   therefrom. 

         Section 3.06.
   Disputes as to Assumed Liabilities or Excluded Liabilities. In the
   event that a dispute or controversy (each a "Dispute")
   arises between Seller and Buyer as to whether and/or to what extent Buyer, a
   Seller Responsible Party, or another party is responsible (as a result of
   the conduct, actions, inactions or omissions of Buyer, such Seller
   Responsible Party, or such other party) for a liability, loss, damage,
   demand, cost or expense, and if the Dispute cannot be settled through direct
   discussions, then Seller and Buyer shall resolve the Dispute by binding
   arbitration administered by the American Arbitration Association (
   "AAA") in Pittsburgh, PA in accordance with its Commercial
   Arbitration Rules and judgment on the award rendered by the arbitrator may
   be entered in any court having jurisdiction. The arbitration proceedings
   shall be conducted on an expedited basis before a neutral arbitrator (to be
   selected by Seller and Buyer, or if they cannot agree, then by the chairman
   of the Pittsburgh office of the AAA) who has been actively engaged in the
   practice of law for at least fifteen (15) years, specializing in commercial
   transactions with substantial experience in customs and importation matters.
   The cost of any arbitration proceedings shall be split equally between
   Seller and Buyer. 

         Section 3.07.
   Purchase Price Allocation. The Purchase Price shall be allocated
   among the Purchased Assets in accordance with Schedule 5 hereto and the
   parties hereto shall use such allocations in preparing all income tax
   returns and related reports

 (including Form 8594) required to be filed with the Internal Revenue
   Service and any state or local tax authority.

 ARTICLE IV
 

 REPRESENTATIONS AND WARRANTIES

 

         Section 4.01.
   Seller's Representations and Warranties. Seller hereby represents and
   warrants to Buyer that:

         (a)    
       Organization and Standing. Seller is a
   corporation duly organized, validly existing and in good standing under the
   laws of the State of Delaware. Seller has all requisite power and authority
   to own and operate the Division and the Business. Seller is duly qualified
   to do business and is in good standing in the jurisdictions of Ohio,
   Delaware and Pennsylvania as listed on Schedule 6. Such jurisdictions are
   the only jurisdictions where the character of the properties owned or leased
   by Seller in its conduct of the Business, or the nature of the activities
   conducted by it in connection therewith, makes such qualification necessary,
   except where the failure to be so qualified would not, individually or in
   the aggregate, have a Material Adverse Effect.

         (b)    
       Due Authorization and Execution, etc. Seller
   has all requisite power and authority (corporate or otherwise) to enter into
   and perform this Agreement and to consummate the transactions contemplated
   hereby; this Agreement has been duly authorized, executed and delivered by
   Seller and constitutes a valid, binding and legal obligation of Seller,
   enforceable against Seller in accordance with its terms; and, when executed
   and delivered by Seller, each of the Other Seller Documents shall be duly
   authorized, executed and delivered by Seller and shall constitute a valid,
   binding and legal obligation of Seller, enforceable against Seller in
   accordance with its terms.

         (c)    
       Absence of Conflict. The execution,
   delivery and performance of this Agreement and the Other Seller Documents,
   and the consummation of the transactions contemplated to occur pursuant
   hereto and thereto (i) do not violate or conflict with the articles of
   incorporation or by-laws of Seller, (ii) to the best of Seller's knowledge
   (after due inquiry by Seller of Guy Bradford, Hank Shechtman and Mort Love
   of the Division) do not violate, conflict with, result in a breach of or a
   default under, or give any person or entity any right to terminate or
   modify, any right or obligation of Seller applicable to the Division, the
   Business or the Purchased Assets, (iii) do not violate, conflict with, or
   result in a breach of or a default under, any governmental or court-issued
   order, writ, judgment, decree, license, permit, approval or authorization of
   any kind applicable to the Division, the Business or the Purchased Assets,
   (iv) to the best of Seller's knowledge (after due inquiry by Seller of Guy
   Bradford, Hank Shechtman and Mort Love of the Division) do not and will not
   violate or conflict with any Law, and (v) to the best of Seller's knowledge
   (after due inquiry by Seller of Guy Bradford, Hank Shechtman and Mort Love
   of the Division) do not result in the loss of, or the creation or imposition
   of any Encumbrance against or with respect to, any of the rights, properties
   or assets of the Division, the Business or the Purchased Assets, other than
   such violations, conflicts,
 breaches or defaults in the case of any and all of the foregoing clauses (i)
   through (v) that, individually or in the aggregate, would not have a
   Material Adverse Effect.

         (d)    
       Title; Condition of Purchased Assets. Seller
   has good and valid title to all of the Purchased Assets. The execution and
   delivery of the Seller Transfer Documents at the Closing shall convey,
   transfer to and vest in Buyer good and valid title to all of the Purchased
   Assets, free and clear of any and all Encumbrances. The Purchased Assets
   constitute, in the aggregate, all of the property necessary for the
   operation of the Business in the manner in which and to the extent that it
   is currently being operated by Seller. All of the tangible Purchased Assets
   are in good operating condition and repair, subject to normal wear and
   maintenance, and are usable in the ordinary course of business as heretofore
   conducted by Seller.

         (e)    
       Financial Statements and Budget. Seller has
   furnished to Buyer the Financial Statements and the Budget for the Division.
   The Financial Statements were prepared in conformity with generally accepted
   accounting principles applied on a consistent basis and the Financial
   Statements present fairly the financial condition of the Division as of the
   dates thereof, and the results of its operations for the periods therein
   indicated (subject, in the case of the Monthly Financial Statements, to
   periodic and year-end adjustments). Except as disclosed in the Financial
   Statements, the results of operations of the Division reflected therein were
   not affected to a material extent by changes or inconsistencies in
   accounting policies or by the inclusion of extraordinary or exceptional
   items. The Financial Statements include as an accrued liability adequate
   provision for payments not yet due as of the date of the Financial
   Statements relating to the importation of merchandise for the Business. The
   Budget was prepared on the basis of good faith assumptions concerning the
   future prospects of the Business and in a manner consistent with prior
   results of operations.

         (f)    
       Absence of Material Adverse Change, etc.
   Except as set forth on Schedule 7, since July 31, 1999, (i) there has been
   no material adverse change with respect to the rights, properties, assets,
   liabilities, financial condition or operations of Seller in respect of the
   Division, (ii) the Business has been carried on and conducted in the
   ordinary and usual course in all material respects, (iii) Seller has
   preserved and maintained in all material respects each of the Permits and
   Licenses and the relationship of the Business with each of its material
   customers, customs agents, suppliers, shippers, and employees, (iv)
   reserved, (v) Seller has not on account of or with respect to the Business
   made any capital commitment or expenditure, or any unusual or extraordinary
   commitment or expenditure, or incurred or become liable for any debt or
   other obligation or liability (except for liabilities incurred in the
   ordinary course of business), or, except in the ordinary course of business,
   entered into any guaranty or agreement for the production or manufacture of
   goods or equipment or the providing of services, other than such commitments
   or expenditures that, individually or in the aggregate, would not have a
   Material Adverse Effect, (vi) Seller has not disposed of any of the Personal
   Property other than in the ordinary course of conduct of the Business and
   which disposition would not have a Material Adverse Effect, (vii) Seller has
   maintained the Personal Property in good repair (ordinary wear and tear
   excepted)
 and the Personal Property is in good operating condition, (viii) Seller is not
   in breach of or default under any contract or agreement relating to the
   Division or the Business, other than breaches or defaults that, individually
   or in the aggregate, would not have a Material Adverse Effect and, to the
   best of Seller's knowledge, no third party to any contract or agreement is
   in breach of or default under any such contract or agreement, other than any
   such breaches or defaults that, individually or in the aggregate, would not
   have a Material Adverse Effect, and (ix) except in the ordinary course of
   business, there have been no intercompany transactions or creations of
   payables among Seller or any of its affiliates relating to the Business.

         (g)    
       Intellectual Property. Except as set forth on
   Schedule 8 hereto, Seller owns and has good and valid title to, or has a
   valid and effective license to use, all patents, applications therefor,
   inventions, trade secrets, trademarks, service marks and applications
   therefor, trade names, copyrights and copyright registrations and
   applications therefor that cover any processes that are material to the
   Business, Seller has not been charged with (or threatened to be charged
   with) the infringement of, and, to the best of Seller's knowledge, Seller is
   not infringing on, any unexpired patent, common law or registered trademark,
   trade name or copyright (whether registered or not), trade secret or other
   proprietary right of any party in the United States or in any foreign
   country which is material to the Business. 

         (h)    
       Taxes, Duties and Tariffs. All duties,
   tariffs, import/export charges and fees and all required federal, state and
   local tax returns of Seller and the Division as it relates to the Business
   have been prepared and duly filed, and all duties, tariffs, import/export
   charges and fees and all federal, state and local taxes required to be paid
   with respect to the periods covered by such filings and returns as related
   in any manner to the Business have been paid or are being contested in good
   faith. Any such material good faith contests are correctly identified on
   Schedule 9 hereto. Seller shall timely file all returns and shall pay as and
   when due all taxes imposed on the sale of the Purchased Assets hereunder,
   and shall timely file all returns and pay as and when due all tax
   liabilities incurred in connection with the ownership and operation of the
   Business by Seller. Neither Seller nor the Division has received any notice
   (relating to the Business) that it is delinquent in the payment of any duty,
   tariff, import charge or fee, tax, assessment or government charge, and
   neither is liable for the payment of any assessed charge or penalty in
   respect of any duty, tariff, import/export charge, fee, tax or tax
   deficiency.

         (i)    
       Governmental Consents. To the best of
   Seller's knowledge (after due inquiry by Seller of Guy Bradford, Hank
   Shechtman and Mort Love of the Division), no authorization, consent, order,
   permit or approval of, or filing with, any governmental agency is necessary
   for the consummation by Seller of the transactions contemplated by this
   Agreement.

         (j)    
       Contracts, Agreements and Commitments, etc.
   Except for the Assumed Contracts, Seller is not a party to any material
   lease, contract, agreement or commitment of any kind, oral or written,
   relating to the conduct of the Business, nor are
 there any material leases, contracts, agreements or commitments of any kind,
   oral or written, that directly relate to the conduct of the Business or the
   Purchased Assets. All of the Assumed Contracts are valid, binding and
   enforceable obligations of Seller and in full force and effect in accordance
   with their terms (except to the extent that enforcement may be limited by
   applicable bankruptcy, insolvency, moratorium and other similar laws
   affecting creditors' rights generally and except to the extent that
   enforcement may be limited by general equitable principles). Seller is not
   in breach of or default under any of the Assumed Contracts other than any
   breaches or defaults that, individually or in the aggregate, would not have
   a Material Adverse Effect and, to the best of Seller's knowledge, no
   other party to any of the Assumed Contracts is in breach thereof or default
   thereunder, other than any breaches or defaults that, individually or in the
   aggregate, would not have a Material Adverse Effect.

         (k)    
       Permits, Licenses, Certificates of Authority,
   etc. To the best of Seller's knowledge (after due inquiry by Seller of
   Guy Bradford, Hank Shechtman and Mort Love of the Division), the Permits and
   Licenses constitute all of the permits, licenses, franchises, authorizations
   and concessions required by law and necessary to operate the Business, other
   than such permits, licenses, franchises, authorizations and concessions that
   the failure to obtain would not have, individually or in the aggregate, a
   Material Adverse Effect; the Permits and Licenses are valid and in full
   force and effect in accordance with their terms; and Seller is not in breach
   of or default under any of the Permits and Licenses other than any breaches
   or defaults that, individually or in the aggregate, would not have a
   Material Adverse Effect and, to the best of Seller's knowledge, no
   other party to any of the Permits and Licenses is in breach thereof or
   default thereunder, other than any breaches or defaults that, individually
   or in the aggregate, would not have a Material Adverse Effect.

         (l)    
       Litigation, Arbitration Proceedings, etc.
   Except as disclosed on Schedule 10 hereto or otherwise disclosed in writing
   to Buyer, (i) no litigation or investigation is pending or, to the best of
   Seller's knowledge, threatened against Seller in connection with or that
   might affect the Business, the Division (relating in any way to the
   importation of the AEO Merchandise) or the Purchased Assets and that is
   reasonably likely to have a Material Adverse Effect nor, to the best of
   Seller's knowledge, is there any basis therefor; (ii) to the best of
   Seller's knowledge, no litigation or investigation has been asserted against
   any third party with respect to the Business, the Division (relating in any
   way to the importation of the AEO Merchandise) or the Purchased Assets,
   whether by Seller, any affiliate of Seller or any third party, and that is
   reasonably likely to have a Material Adverse Effect; and (iii) no litigation
   or investigation has been asserted, instituted or threatened by Seller
   against any third party that affects or relates in any manner to the
   Business, the Division (relating in any way to the importation of the AEO
   Merchandise) or the Purchased Assets. Set forth on Schedule 10 is a true,
   correct and complete list of all litigation and claims made by or against
   Seller against or by customers and/or suppliers of the Business during the
   three year period immediately preceding the date hereof which would have a
   Material Adverse Effect on the Business or the Purchased Assets. Seller has
   made available to Buyer access to Seller's complete files with respect to
   each such litigation or claim.

         (m)    
       Compliance with Laws. To the best of Seller's
   knowledge (after due inquiry by Seller of Guy Bradford, Hank Shechtman and
   Mort Love of the Division), the Business and the Purchased Assets are in
   compliance with and, since July 31, 1999, have been conducted or used in
   conformity with all applicable Laws including, without limitation, labor and
   wage Laws, Laws relating to the health and safety of employees and consumers
   (including any applicable "right-to-know" Laws and OSHA Laws), Laws
   relating to the labeling, delivery, and operation of products, materials,
   machinery and equipment, Laws relating to the exportation and importation of
   the AEO Merchandise and all environmental Laws; except for such instances of
   noncompliance with any of the foregoing that, individually or in the
   aggregate, would not have a Material Adverse Effect. Except as to existing
   claims under forms CF28 and CF29 - none of which individually and in the
   aggregate would have a Material Adverse Effect, and except as otherwise
   disclosed in writing to Buyer, Seller has received no notices of any
   violation of Laws with respect to the Business, Division (relating to
   importation of AEO Merchandise), or the Purchased Assets which, following
   receipt of such notice, have not been fully and timely cured by Seller.
   Seller is not the subject of any outstanding OSHA citations or pending
   abatements based on any such citation which relate to the Business or the
   Purchased Assets; and none of the rights, properties, assets, liabilities,
   businesses or operations of the Division or the Business is subject to any
   judicial, regulatory or governmental order, writ, judgment, investigation,
   audit or decree of any kind directed to Seller or any of its affiliates.

         (n)    
       Employee Benefit Plans. Seller has delivered
   to Buyer complete and accurate copies of all Employee Benefit Plans. Seller
   has made on a timely basis all required contributions to all "employee
   benefit plans", as defined in Section 3(3) of ERISA, that relate to the
   Business. None of Seller or any of its ERISA Affiliates has incurred or will
   incur as of the Closing Date, or as a consequence of events occurring prior
   to the Closing Date, any of the following that relates to the Division or
   the Business: (i) any liability to the Pension Benefit Guaranty Corporation
   (other than for the payment of required premiums), (ii) any liability under
   Sections 4041, 4062, 4063, 4064 or 4069 of ERISA, (iii) any "withdrawal
   liability" to any "multi-employer pension plan", as defined in ERISA or (iv)
   any "accumulated funding deficiency", as defined in Section 302 of ERISA.

         (o)    
       Relations with Employees. Seller is not a
   party to nor is it bound by any collective bargaining or other union
   agreement with respect to the Business. Seller has made all payments it is
   contractually obligated to make in respect of persons employed by it with
   respect to the Business (other than payments not yet due for the current
   payroll period). No employee claim or grievance is pending against Seller
   with respect to those key employees of the Business identified on Schedule
   11 hereto and, with respect to all other persons who are in the Seller's
   employment with respect to the Business, no claims or grievances are pending
   against Seller, other than such claims or grievances that, individually or
   in the aggregate, would not have a Material Adverse Effect.

         (p)    
       Full Disclosure. No representation or
   warranty made by Seller in this Agreement, or in any Other Seller Document
   or exhibit provided to Buyer in connection with the transactions
   contemplated by this Agreement, contains any untrue statement of a material
   fact or omits to state a material fact necessary to make the statements made
   therein, taken as a whole, not misleading.

         (q)    
       Reserved. 

         (r)    
       Insurance Policies. Set forth on Schedule
    13 hereto is a true, correct and complete listing of all insurance
   policies applicable to the Business including, without limitation, those
   relating to product liability and comprehensive general liability
   (collectively, the "Insurance Policies").  The Insurance Policies are
   in full force and effect  in accordance with their terms and no premium
   payable thereunder which relates to any period prior to the Closing is
   unpaid or outstanding as of the date of this Agreement, or will be  unpaid
   or outstanding as of the Closing Date.  Set forth on Schedule 13 is a true,
   correct and complete listing of all claims relating to the Business as made
   by Seller under the Insurance  Policies in respect of any claims of
   customers and/or suppliers of the Business during the three year period
   immediately preceding the date hereof.  Seller has made available to Buyer
   access to Seller's complete files with respect to each such claim.

         (s)    
       Location of Business and Names. During the
   one (1) year-period immediately preceding the Closing (i) the Division has
   operated exclusively under the names Value City Imports, (ii) the Division's
   principal place of business has been and continues to be at 1800 Moler Road,
   Columbus, OH 43207 and/or at 2025 Corvair Avenue, Columbus, Ohio 43207 and
   (iii) all of the Personal Property has been located exclusively at 1800
   Moler Road, Columbus, OH 43207 and/or at 2025 Corvair Avenue, Columbus, Ohio
   43207.

         (t)    
       Liabilities. Except for such claims, debts
   and liabilities as are reflected in the Financial Statements or as otherwise
   disclosed in writing to Buyer, to the best of Seller's knowledge (after due
   inquiry by Seller of Guy Bradford, Hank Shechtman and Mort Love) neither the
   Division (as related in any manner to the importation of the AEO
   Merchandise) nor the Business has any outstanding indebtedness and is not
   subject to any claims, investigations or liabilities, pending or threatened,
   contingent or otherwise, (and Seller has received no notice of any such
   matters) other than trade obligations incurred in the ordinary course of
   business in amounts that are usual and normal, both individually and in the
   aggregate. Seller has provided to Buyer a true, accurate and complete list
   of the Assumed Liabilities (known to Seller as of the date of Closing) to be
   assumed by Buyer pursuant to the Assignment and Assumption Agreement as of
   the most recent practicable date prior to the date of this Agreement. 

         (u)    
       No Broker or Finder. Seller has not directly
   or indirectly retained or hired any broker, finder, financial adviser or
   other similar agent or representative in connection with this Agreement or a
   of the transactions contemplated hereby.

         Section 4.02.
   Buyer's Representations and Warranties. Buyer hereby represents and
   warrants to Seller as follows: 

         (a)    
       Organization and Standing. Buyer is a Limited
   Partnership duly organized, validly existing and in good standing under the
   laws of the Commonwealth of Pennsylvania. Buyer has all requisite power and
   authority to own and operate its property and assets and to conduct its
   business as now conducted.

         (b)    
       Due Authorization and Execution, etc. Buyer
   has all requisite power and authority to enter into and perform this
   Agreement and to consummate the transactions contemplated hereby; this
   Agreement has been, and the Assignment and Assumption Agreement, when
   executed, will be, duly authorized, executed and delivered by Buyer and
   constitutes, or when executed, will constitute, valid, binding and legal
   obligations of Buyer, enforceable in accordance with their terms.

         (c)    
       Absence of Conflict. The execution, delivery
   and performance of this Agreement and the Assignment and Assumption
   Agreement and the consummation of the transactions contemplated to occur
   pursuant hereto and thereto (i) do not and will not violate or conflict with
   the Limited Partnership Agreement of Buyer, (ii) to the best of Buyer's
   knowledge do not and will not violate, conflict with, result in a breach of
   or default under, or give any person or entity any right to terminate or
   modify, any material contract or agreement applicable to Buyer or any of the
   rights, properties, assets, liabilities, operations or businesses of Buyer,
   (iii) do not and will not violate, conflict with, result in a breach of or
   default under, or give any person or entity any right to terminate or
   modify, any governmental or court-issued order, writ, judgment, decree,
   license, permit, approval or authorization of any kind applicable to Buyer
   or any of the rights, properties, assets, liabilities, operation or
   businesses of Buyer, and (iv) to the best of Buyer's knowledge, do not and
   will not violate or conflict with any Law applicable to Buyer.

         (d)    
       No Broker or Finder. Buyer has not directly
   or indirectly retained or hired any broker, finder, financial advisor or
   other similar agent or representative in connection with the transactions
   contemplated hereby.

         (e)    
       Governmental Consents. No authorization,
   consent, order, permit or approval of, or filing with, any governmental
   agency is necessary for the consummation by Buyer of the transactions
   contemplated by this Agreement. 

         (f)    
       Full Disclosure. No representation or
   warranty made by Buyer in this Agreement, or in any exhibit provided to
   Seller in connection with the transactions contemplated by this Agreement,
   contains any untrue statement of a material fact or omits to state a
   material fact necessary to make the statements made therein, taken as a
   whole, not misleading.

 ARTICLE V
 

 CONDUCT OF BUSINESS PRIOR TO CLOSING

 

 Section 5.01. Preservation of Business Relationships and Conduct of
   Business. Seller hereby covenants to Buyer that, during the period from
   the date hereof through the Closing Date, (i) Seller shall conduct the
   Business in the ordinary and usual course in all respects; and (ii) Seller
   shall, except as mutually agreed, use its best efforts to preserve and
   maintain the Business organization intact, to keep available the services of
   the Business' current employees, to perform its obligations under the
   contracts to comprise the Assumed Contracts, to preserve its existing
   relationships with its customers, suppliers, customs brokers, and others
   having business relationships with it and to maintain the goodwill enjoyed
   by Seller with such persons for the benefit of Buyer. Buyer and Seller will
   cooperate with each other and proceed to prepare and file any necessary
   governmental or third party consents required to complete the transaction
   contemplated to occur pursuant hereto.

         Section 5.02.
   Other Pre-Closing Actions of Seller. Seller covenants and agrees
   that, pending the Closing, (i) Seller shall not take any action that is
   inconsistent with the satisfaction of any condition set forth in Section
   6.02 hereof; (ii) Seller shall furnish Buyer, as promptly as practicable,
   with such documents and information relating to the Business and the
   Purchased Assets as Buyer may from time to time reasonably request; (iii)
   Seller shall provide Buyer and its representatives with such access to the
   Business and the Purchased Assets as Buyer may from time to time reasonably
   request during normal business hours to conduct one or more inspections and
   investigations thereof; provided, that such inspections shall not
   unreasonably interfere with Seller's conduct of the Business; (iv) Seller
   shall pay and perform all of the debts, obligations and liabilities of the
   Business as and when they become due in the ordinary course; (v) cooperate
   with Buyer and its counsel in providing such other information (financial
   and otherwise) as Buyer or such counsel determines to be necessary or
   appropriate to prepare any filing with the Securities and Exchange
   Commission or other governmental authority as necessitated by this
   transaction (and the Seller agrees that, upon request by Buyer, it shall
   make available such of its officers, employees, agents and consultants,
   including its independent public accountants, as are reasonably necessary to
   assist Buyer in preparing such filings); and (vi) Seller shall use its best
   efforts to obtain the consents, which shall be reasonably satisfactory in
   form and substance to Buyer's counsel, of all parties whose consents are
   necessary to the conveyance, assignment, delivery and transfer of the
   Purchased Assets and/or the Buyer's operation of the Business following the
   Closing.

         Section 5.03.
   Pre-Closing Actions of Buyer. Buyer covenants and agrees that,
   pending the Closing, Buyer shall not take any action that is inconsistent
   with the satisfaction of any condition set forth in Section 6.02 hereof.

 ARTICLE VI
 

 CLOSING DATE; CONDITIONS AND TRANSACTIONS

         Section 6.01.
   Closing Date. Subject to the satisfaction or waiver of each of the
   conditions set forth in Section 6.02 hereof, the closing of the purchase and
   sale transactions contemplated to occur pursuant to this Agreement (the
   "Closing") shall be effective as of January 31, 2000 (the date
   on which the Closing is effective is hereafter  referred to as the
   "Closing Date"). 

         Section 6.02.
   Conditions to Closing. 

         (a)    
       All Parties. The obligations of each party
   hereto to consummate the purchase and sale transactions contemplated by this
   Agreement are subject to the following condition: no judicial, governmental
   or other action or proceeding shall have been instituted or be threatened
   that materially challenges this Agreement or any of the transactions
   contemplated hereby.

         (b)    
       Seller. In addition to the condition set
   forth in Section 6.02(a) hereof, the obligations of Seller to consummate the
   purchase and sale transactions contemplated by this Agreement are subject to
   the following conditions:

         (i)   
        Each of the warranties and representations
   made by Buyer in Section 4.02 hereof shall be true and correct in all
   material respects as of the Closing as if made on and as of the Closing
   Date;

         (ii)    
       Buyer shall have performed all of the obligations
   and satisfied all of the conditions required to be performed or satisfied by
   it at or prior to the Closing in connection with this Agreement and the
   transactions contemplated to occur pursuant hereto in all material
   respects;

         (iii)   
       At the Closing, Seller shall have received an
   Officers' Certificate from Buyer confirming the satisfaction of the
   conditions set forth in clauses (i) and (ii) of this Section 6.02(b);

         (iv)    
      Any and all consents, authorizations, approvals, waivers,
   estoppel certificates and releases from third parties that may, in the
   reasonable opinion of Seller or its legal counsel, be necessary to carry out
   and complete all of the transactions contemplated to occur pursuant to this
   Agreement shall have been obtained and be in full force and effect as of the
   Closing;

         (v)    
       RESERVED;

         (vi)    
       Buyer shall have delivered to Seller (A) a Good
   Standing Certificate from the State of Pennsylvania, (B) copies of Buyer's
   Certificate of Limited Partnership as currently in effect and all
   resolutions of Buyer's general partner adopted in connection with this
   Agreement and the transactions
 contemplated to occur pursuant hereto, each of which shall be certified by the
   general partner of Buyer to be true, correct and complete copies thereof and
   (C) an incumbency certificate of the general partner of Buyer;

         (vii)  
         Buyer shall have executed and delivered
   to Seller the Assignment and Assumption Agreement and the Employment
   Practices and Shared Services Agreement; and

         (viii)   
        Buyer shall have paid to Seller the Purchase
   Price.

 
         (c)    
       Buyer. In addition to the conditions set
   forth in Section 6.02(a) hereof, the obligations of Buyer to consummate the
   purchase and sale transactions contemplated by this Agreement are
   subject to the following conditions:

         (i)   
        Each of the representations and warranties
   made by Seller in Section 4.01 hereof shall be true and correct in all
   material respects as of the Closing as if made on and as of the Closing
   Date;

         (ii)    
       Seller shall have made all Pre-Closing Adjustments
   and performed all of the obligations and satisfied all of the conditions
   required to be performed or satisfied by it at or prior to the Closing in
   connection with this Agreement and the transactions contemplated to occur
   pursuant hereto in all material respects;

         (iii)   
        At the Closing, Buyer shall have received an
   Officers' Certificate from Seller confirming the satisfaction of the
   conditions set forth in clauses (i) and (ii) of this Section 6.02(c);

         (iv)    
       Any and all consents, authorizations, approvals,
   waivers, estoppel certificates and releases from third parties that may, in
   the reasonable opinion of Buyer hereto or its legal counsel, be necessary to
   carry out and complete all of the transactions contemplated to occur
   pursuant to this Agreement shall have been obtained and be in full force and
   effect as of the Closing;

         (v)    
       RESERVED;

         (vi)    
       Seller shall have delivered to Buyer (A) a Good
   Standing Certificate from Ohio, Delaware and Pennsylvania, dated as of a
   recent date, (B) copies of all documents evidencing Seller's authority to
   enter into this Agreement adopted in connection with this Agreement and the
   transactions contemplated to occur pursuant hereto, each of which shall be
   certified by a duly authorized officer or agent of Seller to be true,
   correct and complete copies of such resolutions, and (C) an incumbency
   certificate of Seller;

 
          (vii)  
        Seller shall have executed and delivered the
   Seller Transfer Documents and the Employment Practices and Shared Services
   Agreement;

         (viii)   
       Buyer shall have entered into the Employment
   Agreements with those individuals whose names are listed on Schedule 11
   hereto;

         (ix)    
       The Buyer and the Committee shall have received the
   Fairness Opinion, and any other written opinions requested by Buyer or the
   Committee, in form and content acceptable to Buyer and the Committee in
   their respective sole discretion, regarding the valuation of the Purchased
   Assets and the Business and the entering into and consummation of the
   transactions set forth in this Agreement;

         (x)    
       The Board of Directors (including a majority of the
   Committee) shall have approved the transactions contemplated to occur
   pursuant hereto; 

         (xi)    
       The obtaining by the Buyer of all third party
   consents and governmental approvals, licenses and permits necessary for the
   Buyer to consummate the transaction set forth in this Agreement and to
   operate the Business as it was operated by Seller prior to the Closing; and
   

         (xii)   
       There shall have occurred no material adverse change
   in or to the financial condition, results of operations, assets or employees
   of the Division, or to Seller, or any of their affiliates to the extent that
   such material adverse change would have a Material Adverse Effect, since
   July 31, 1999 including, without limitation, any bankruptcy, liquidation,
   dissolution, creditor standstill agreement, material Default, or other
   similar event. No suit, action or other proceeding shall be threatened or
   pending before any court or governmental agency which seeks to restrain,
   enjoin or otherwise prohibit this transaction, or seeks the payment of
   significant damages from the AEO Companies in the event that the
   transactions contemplated by this Agreement are consummated. 

 
         The failure of any
   condition set forth in this Article VI, unless waived by Seller with respect
   to any condition set forth in Section 6.02(b) above, or waived by Buyer with
   respect to any condition set forth in Section 6.02(c) above, or waived by
   both Seller and Buyer with respect to any condition set forth in Section
   6.02(a) above, shall cause this Agreement to terminate, in which event
   Seller and Buyer shall have no liability or obligation to each other.

 ARTICLE VII
 

 POST CLOSING COVENANTS

          Section 7.01.
   Transition Period. If so requested by Buyer, Seller will, to the
   extent permitted by applicable law, perform services and process matters
   that constitute
 all or part of the conduct of the Business for and on behalf of Buyer for a
   transition period of one year after the Closing. To the extent that Buyer
   requests any such services be provided by Seller after the Closing, Buyer
   will reimburse Seller for its actual, reasonable cost (as mutually agreed to
   by Seller and Buyer in the Employment Practices and Shared Services
   Agreement) to provide such requested services, and all profits earned with
   respect to the operation of the Business and/or use of the Purchased Assets
   following the Closing shall belong to Buyer. 

         Section 7.02.
   Protection of Business and Purchased Assets. Without in any way
   limiting the rights and remedies available to Buyer for any actual or
   threatened violation of any covenant or agreement of Seller contained in
   Sections 5.01 and 5.02 above, Seller acknowledges and agrees that such other
   rights and remedies cannot fully compensate Buyer, and Buyer shall be
   entitled to injunctive relief to prevent or remedy any actual or threatened
   violation of any covenant or agreement of Seller contained in Sections 5.01
   and 5.02 above.

         Section 7.03.
   Books and Records. Following the Closing, Seller shall make available
   to Buyer, upon reasonable notice during normal business hours, for review
   and copying for the purpose of preparing tax returns and related reports and
   any other proper purpose, any and all of the books and records relating to
   the Business, the Division or the Purchased Assets that may then be in the
   possession or control of Seller, and to provide to Buyer-original copies
   thereof where such originals are necessary. Seller shall not willfully and
   knowingly destroy any of such books and records for a period of five (5)
   years after the Closing without first offering to deliver such books and
   records to be destroyed to Buyer.

         Section 7.04.
   Workmen's Compensation Claims. In the event that any workers
   compensation claim is asserted after the Closing Date for a claim occurring
   prior the Closing Date by any person who was employed with the Division at a
   time prior to the Closing Date, Seller agrees to accept all liability for
   those workers compensation claims under the workers compensation laws of the
   State of Ohio. In the event that any workers compensation claim is asserted
   after the Closing Date for a claim occurring after the Closing Date by any
   person who was employed with the Division at a time prior to the Closing
   Date and who is hired by the Buyer, Buyer agrees to accept all liability for
   those workers compensation claims under the workers compensation laws of the
   State in which the claimant is employed for those claims occurring after the
   Closing Date. In the event that any workers compensation claim is asserted
   after the Closing Date by any person who was employed with the Division at a
   time prior to the Closing Date and who is hired by the Buyer, and the date
   of the occurrence giving rise to the claim cannot readily be determined as
   being either before or after the Closing Date, all liabilities and
   obligations in respect of such claim shall be handled; in compliance with
   the Worker's Compensation laws of the state governing the employer (either
   Buyer or Seller) who ultimately is determined, either through discovery or
   otherwise, to have employed the person at the time of the occurrence giving
   rise to the claim. 

         Section 7.05.
   Reserved.

         Section 7.06.
   Further Assurances. If at any time after the Closing, either party
   hereto should determine that any further instruments of sale, assignment,
   conveyance, transfer or delivery, instruments of assumption, security
   documents, releases of security interests, consents to assignment, or other
   documents and instruments are necessary or desirable to carry out more
   effectively and complete the transactions contemplated to occur pursuant to
   this Agreement, each party hereto shall (i) execute and deliver any and all
   such further documents and instruments as the other party hereto may
   reasonably request, and (ii) use its best efforts to obtain the execution
   and delivery of any such further documents and instruments from any third
   party as either party hereto may reasonably request. 

 ARTICLE VIII
 

 REMEDIES

         Section 8.01.
   The parties agree that, in the event of a breach by either party of any of
   the terms hereof or of any of the other documents or instruments executed
   and delivered pursuant to this Agreement or in connection with the
   transactions contemplated to occur pursuant hereto, which breach becomes the
   basis for any claim or lawsuit among the parties, then, in such event, the
   prevailing party in any such claim or lawsuit shall be entitled, as part of
   its proper damages, to reimbursement for its reasonable attorneys' fees and
   expenses incurred in connection with such claim or litigation.

 ARTICLE IX
 

 MISCELLANEOUS PROVISIONS

         Section 9.01.
   Survival of Warranties, Representations, Agreements, etc. All of the
   warranties, representations, and agreements of the parties hereto shall
   survive the Closing and the consummation of the transactions contemplated by
   this Agreement for a period of two (2) years, except for the representations
   and warranties contained in Sections 4.01(h) and 4.01(u) which shall survive
   the Closing until the applicable statute of limitations has expired,
   regardless of any investigations made by, any party, either prior to or
   after the Closing; provided, however, that (i) nothing contained in the
   foregoing provision shall limit or modify the obligations of the parties to
   indemnify each other pursuant to Sections 3.04 and 3.05, and (ii) if any
   customs duty is owed for the importation of AEO Merchandise (notwithstanding
   Seller's representation set forth in Section 4.01(h) hereof), the amount of
   the duty itself (as opposed to any penalty or other charges) shall be
   payable by Buyer. The rights and remedies of the parties hereto with respect
   to any inaccuracy in any warranty or representation or with respect to any
   breach or default under any covenant or agreement shall not be limited or
   restricted by the fact that the act, omission, occurrence or other state of
   facts giving rise to such inaccuracy or such breach or default is also the
   subject of another warranty or representation as to which there is no
   inaccuracy or another covenant or agreement as to which there is no breach
   or default.

         Section 9.02.
   Third Party Actions. If any third party should institute or assert
   any
 claim, action or proceeding against any party hereto with respect to which
   such party determines it may seek to be indemnified, held harmless and/or
   defended, pursuant to the assumption or exclusion of liabilities set forth
   in Sections 3.03 and 3.04 hereof, the party hereto against whom such claim,
   action or proceeding has been instituted or asserted (the "indemnified
   party") shall promptly    notify each party hereto by whom it may seek
   to be indemnified, held harmless    and/or defended (an "indemnifying
   party") of the institution or assertion    of such claim, action or
   proceeding, and, if so requested by an indemnifying    party, shall promptly
   furnish such indemnifying party with a copy of any written    claim,
   complaint, notice of violation or other similar document the indemnified
   party may have received from the third party instituting or asserting such
   claim,    action or proceeding. An indemnified party shall have the right
   (but not the    obligation) (i) to direct and control, through legal counsel
   of its own choosing,    the defense of any third party claim, action or
   proceeding and (ii) to compromise    and settle any third party claim,
   action or proceeding on any basis and in any    manner such indemnified
   party deems necessary or appropriate; provided, however, that
   (a) each indemnifying party shall have the right to participate, at its own
   cost and expense, through legal counsel of its own choosing, subject to the
   control of the indemnified party and its legal counsel, in the defense of
   any third-party claim, action or proceeding with respect to which indemnity
   is sought hereunder, (b) prior to compromising or settling any third-party
   claim, action or proceeding with respect to which indemnity is sought
   hereunder, the indemnified party shall notify such indemnifying party of the
   proposed terms and conditions of the compromise or settlement and (c) in the
   case of any third-party claim, action or proceeding with respect to which
   indemnity is sought hereunder that involves only the payment of money
   damages by the indemnified party, such indemnifying party may assume
   (jointly with any and all other indemnifying parties), at its own cost and
   expense, through legal counsel of its own choosing reasonably acceptable to
   the indemnified party, the direction and control of the defense of such
   third-party claim if, but only if (i) such indemnifying party acknowledges
   that it is obligated to indemnify and hold harmless the indemnified party
   with respect to all judgments, settlements, compromises and other losses,
   damages, costs and expenses in connection with such third-party claim,
   action or proceeding and (2) such third-party claim, action or proceeding
   continues to involve only the payment of money damages by the indemnified
   party.

         Section 9.03.
   Miscellaneous Provisions.

         (a)   
        Entire Agreement. This Agreement,
   together with all Exhibits, Transfer Documents and Other Documents,
   constitutes the entire agreement and understanding of the parties hereto
   with respect to the transactions contemplated hereby and supersedes any and
   all prior negotiations, discussions, agreements and understandings, oral or
   written, among the parties hereto, or any of them, with respect to this
   Agreement or the transactions contemplated hereby.

         (b)    
       Amendment. This Agreement may be amended,
   superseded, extended or modified only by an instrument or instruments in
   writing signed by each of the parties hereto (or their respective successors
   in interest or permitted assigns), and no waiver or
 consent with respect to this Agreement or any of the transactions contemplated
   hereby shall be effective against any party hereto unless and until such
   waiver or consent is set forth in any instrument or instruments in writing
   signed by such party (or its successor in interest or permitted assign).

         (c)    
       No Waiver. No delay by any party hereto in
   exercising any right or remedy shall operate as a waiver of such right or
   remedy, and no waiver of any right or remedy by any party shall operate to
   waive future compliance with such right or future exercise of such remedy or
   affect any other right or remedy.

         (d)    
       Remedies Cumulative. The rights and remedies
   of the parties hereto are cumulative, and the rights and remedies granted to
   the parties pursuant to this Agreement are not exclusive of, but are in
   addition to, any and all other rights and remedies that the parties hereto
   may have at law or in equity or under any other contract, agreement or other
   document or instrument.

         (e)    
       Severability. The provisions of this
   Agreement are severable and the invalidity or unenforceability of any
   provision of this Agreement as to one or more parties shall not affect the
   validity or enforceability of such provision as to any other party or the
   validity or enforceability of any other provision of this Agreement.

         (f)    
       Exhibits and Headings. The exhibits and
   schedules hereto and the Other Seller Documents constitute an integral part
   of this Agreement. The captions and headings in the articles, sections and
   subsections of this Agreement and the exhibits and schedules hereto are for
   purposes of convenience only and are not intended to affect the
   interpretation of this Agreement.

         (g)    
       Notices, etc. All notices, demands, requests,
   consents, approvals, and other communications required or permitted
   hereunder shall be in writing and, unless otherwise specified herein, shall
   be (i) personally served, (ii) deposited in the mail, registered or
   certified, return receipt requested, postage prepaid, (iii) delivered by
   reputable air courier service with charges prepaid, or (iv) transmitted by
   hand delivery, telegram, or facsimile, addressed as set forth below or to
   such other address as such party shall have specified most recently by
   written notice. Any notice or other communication required or permitted to
   be given hereunder shall be deemed effective (a) upon hand delivery or
   delivery by facsimile, with accurate confirmation generated by the
   transmitting facsimile machine, at the address or number designated below
   (if delivered on a business day during normal business hours where such
   notice is to be received), or the first business day following such delivery
   (if delivered other than on a business day during normal business hours
   where such notice is to be received) or (b) on the second business day
   following the date of mailing by reputable courier service, fully prepaid,
   addressed to such address, or upon actual receipt of such mailing, whichever
   shall first occur. The addresses for such communications shall be:

        


 	  	If to Seller:	Schottenstein Stores Corporation
   

   1800 Moler Road
   

   Columbus, OH 43207
   

   Attention: Jeffrey Swanson


             
               
           

         

 	 	with a copy to:	 Irwin Bain, Esquire
   

   1800 Moler Road
   

   Columbus, OH 43207        


  

 	 	If to Buyer: 	 Blue Star Imports, L.P
   

   150 Thorn Hill Drive
   

   Warrendale, PA 15095
   

   Attention: George Kolber

   


  

 	 	with a copy to: 	Sable, Pusateri, Rosen, Gordon & Adams, LLC
   

   437 Grant Street
   

   7th
   Floor, Frick Building
   

   Pittsburgh, PA 15219
   

   Attn.: Alan B. Gordon, Esquire


         (h)    
       Counterparts. This Agreement may be executed
   in two or more counterparts and shall become effective as of the date first
   above written when each party hereto has signed at least one counterpart
   hereof.

         (i)    
       Governing Law. This Agreement shall be
   governed by and construed in accordance with the laws of the Commonwealth of
   Pennsylvania, without regard to conflicts of law principles.

         (j)    
       Parties Bound and Benefited. This Agreement
   shall be binding upon and enforceable against, and shall inure to the
   benefit of, the parties hereto and their respective successors in interest
   and permitted assigns; provided, however, that neither this Agreement, nor
   any of the rights, privileges or obligations hereunder shall be assignable
   by any of the parties without the other parties' prior written consent;
   provided, however, that Seller may not withhold its consent to any
   assignment of this Agreement or Buyer's rights and obligations hereunder by
   Buyer to any entity controlled by or under common control with the Buyer.
   Nothing contained in this Agreement, express or implied, shall or is
   intended to confer on any person or entity other than the parties hereto and
   their successors in interest, any rights or remedies under or by reason of
   this Agreement unless so stated expressly to the contrary.

  

         IN WITNESS WHEREOF, each of
   the parties hereto has executed and delivered this Agreement as of the day
   and year first above written.

             
               
               
              

 


 	 	SELLER:
	 	SCHOTTENSTEIN STORES CORPORATION
	 	 
	 	  By: /s/ Jeffrey Swanson

   
	 	 

   
 
	 	  BUYER;
	 	 
	 	BLUE STAR IMPORTS, L.P.
	 	 By: BSI IMPORTS CO., LLC, general partner
	 	 
	 	 By: /s/ Dale E. Clifton
	 	 
 


  

 LIST OF EXHIBITS

   

 	 Description  
              

   	 	 Designation	 
	Assignment and Assumption Agreement   
      	 	 A

   	 
	Bill of Sale and Assignment 	 	 B

   	 
	Employment Practices and Shared Services Agreement 	 	 C

   	 


 LIST OF SCHEDULES

   

 	Description 	 Designation	 
	List of Assumed Contracts	 1

   	 
	List of Permits and Licenses	 2

   	 
	List of Personal Property   	 3

   	 
	List of Software	 4

   	 
	Purchase Price Allocation   	 5

   	 
	List of Jurisdictions	 6

   	 
	Material Adverse Changes	 7

   	 
	Intellectual Property	 8

   	 
	Taxes, Duties and Tariffs  	 9

   	 
	Schedule of Litigation    	 10

   	 
	Key Employees 	 11

   	 
	List of Inventory  	 12

   	 
	Insurance Policies  	 13

   	 
	List of Books and Records being delivered to Buyer 	 14

   	 


  

  

 ASSIGNMENT AND ASSUMPTION AGREEMENT

         This Assignment and
   Assumption Agreement (this "Agreement") is made as of this
   10th day of March, 2000, effective as of the 31st day of January, 2000, by
   and between SCHOTTENSTEIN STORES CORPORATION, a Delaware corporation
   ("Assignor"), and BLUE STAR IMPORTS, L.P., a Pennsylvania limited
   partnership    ("Assignee"), pursuant to that certain Purchase and
   Sale Agreement (the    "Purchase Agreement") of even date
   herewith made by and between Assignor and Assignee. Capitalized terms used
   but not defined herein are used as defined in the Purchase Agreement.

 

 ASSIGNMENT AND ASSUMPTION AGREEMENT

         This Assignment and
   Assumption Agreement (this "Agreement") is made as of this
   10th day of March, 2000, effective as of the 31st day of January, 2000, by
   and between SCHOTTENSTEIN STORES CORPORATION, a Delaware corporation
   ("Assignor"), and BLUE STAR IMPORTS, L.P., a Pennsylvania limited
   partnership ("Assignee"), pursuant to that certain  Purchase and Sale
   Agreement (the "Purchase Agreement") of even date herewith
   made by and between Assignor and Assignee. Capitalized terms used but not
   defined herein are used as defined in the Purchase Agreement.

         For and in consideration of
   the sum of Ten and No/100 Dollars ($10.00) and other good and valuable
   consideration, the receipt and sufficiency of which are hereby acknowledged,
   and intending to be legally bound hereby, as of the date hereof, (i)
   Assignor does hereby transfer and assign to Assignee all of Assignor's
   right, title and interest in and to the Assumed Contracts (provided that
   where Assignor is required to continue to be a party to such contracts or
   where Assignor will continue to require or perform services under such
   contracts, Assignor shall use its best efforts to add Assignee as an
   additional party, rather than the sole transferee, of such contracts), the
   Permits and Licenses, and the Prepaid Expenses, (ii) Assignee does hereby
   accept such transfer and assignment, and (iii) Assignee does hereby (a)
   undertake and assume all of the Assumed Liabilities and (b) disclaims any
   liability or obligation under the Excluded Liabilities. 

         Without in any way
   affecting any of Assignee's or Assignor's respective obligations under the
   Purchase Agreement, Assignee and Assignor each hereby specifically confirm
   to the other their indemnification obligations under and pursuant to the
   Purchase Agreement.

         Each party hereto agrees,
   at any time and from time to time, upon the request of the other party, to
   forthwith execute and deliver such instruments of assignment, release,
   endorsement, direction and authorization as will be sufficient, requisite or
   advisable, in the reasonable opinion of Assignor, Assignee or their
   respective counsel, to effect the assignment hereunder, but the parties
   specifically agree that this instrument and these presents are intended to
   and shall be, and the same hereby are, declared to be sufficient in all
   respects to, and the same do hereby, effect the assignment hereunder.

         Assignor acknowledges and
   agrees that, with respect to any Assumed Contracts, which are, in their
   nature, by law, by their terms or otherwise, nonassignable, or which contain
   a covenant against assignment, this instrument shall, notwithstanding
   anything elsewhere herein contained, be construed as an assignment to
   Assignee of the equitable interest in the same insofar as is legally
   permissible without violation of law or breach of the terms or condition
   thereof, with the right in Assignee or its successors and assigns (i) to
   have said claims, contracts, commitments or other agreement, if any, held
 in trust by Assignor so as to enable Assignee or its successors and assigns to
   use and enjoy the full benefit thereof, (ii) to have transferred to Assignee
   or its successors or assigns any and all such property or rights which shall
   become assignable as soon as the same shall become assignable, and (iii) to
   take and have taken any action which may be taken without violation of law
   and without any breach as aforesaid which is necessary or appropriate to
   make such contract, property or rights assignable. Assignor agrees that in
   any instance in which nonassignability of any such contract, property or
   rights may be removed by the consent of any party or parties, Assignor will
   use its best efforts to obtain the consent of all such parties to the
   assignment of the property or rights in question to Assignee. If such a
   consent is not obtained, or if an attempted assignment would be ineffective
   or would affect Assignor's rights so that Assignee or its successors and
   assigns in fact would not receive such contract, property or rights,
   Assignor will cooperate with Assignee or its successors and assigns on any
   reasonable arrangement, not contrary to law, designed to provide for
   Assignee or its successors and assigns the benefit under any such Assumed
   Contracts and enforcement thereof, and for the benefit of Assignee or its
   successors and assigns, of any and all rights of Assignor against any party
   thereto arising out of breach or cancellation by such party or otherwise.
   

         Nothing in this Agreement
   shall preclude or prohibit Assignee from contesting in good faith the
   legality, validity or enforceability of any debt, liability, obligation
   under any Assumed Contract, provided that the foregoing shall not affect the
   legality, validity or enforceability of the terms and provisions of this
   Agreement.

        This Agreement shall be binding
   upon and inure to the benefit of Assignor and Assignee and their respective
   heirs, successors and assigns. 

         IN WITNESS WHEREOF,
   Assignor and Assignee have executed this Assignment and Assumption of
   Agreements effective as of January 31, 2000.


 	ATTEST: 	ASSIGNOR:
   

   Schottenstein Stores Corporation, a Delaware
   

   corporation 	 
	 	 	 
	By: /s/ Tod Friedman 
   

   ATTEST:  	By: /s/ Jeffrey Swanson
   

   ASSIGNEE:
   

   Blue Star Imports, L.P., a Pennsylvania limited
   

   partnership
   

   By:  BSI Imports Company, LLC, a
   

          Delaware limited liability
   

   company and its sole General Partner    	 
	 	 	 
	By: /s/ William P. Tait  	 By: /s/ Dale E. Clifton	 


  

 BILL OF SALE AND ASSIGNMENT

 

         This Bill of Sale and
   Assignment (this "Instrument") is made this 10th day of
   March, 2000, effective as of the 31st day of January, 2000, by SCHOTTENSTEIN
   STORES CORPORATION, a Delaware corporation ("Assignor"), in favor of
   BLUE STAR IMPORTS, L.P., a Pennsylvania limited partnership
   ("Assignee"), pursuant to that certain Purchase  and Sale Agreement
   (the "Purchase Agreement") of even date herewith made by
   and between Assignor and Assignee. Capitalized terms used but not defined
   herein are used as defined in the Purchase Agreement.

         For and in consideration of
   the sum of Ten and No/100 ($10.00) Dollars cash in hand paid and other good
   and valuable consideration, the receipt and sufficiency of which are hereby
   acknowledged, and intending to be legally bound hereby, Assignor does hereby
   transfer and assign the Personal Property to Assignee and Assignee does
   hereby accept such assignment and transfer.

         Assignor warrants that it
   is the owner of the Personal Property and that its right, title and interest
   in and to the Personal Property is hereby transferred and assigned to
   Assignee free and clear of all liens, security interests and
   encumbrances.

 

         Assignee hereby agrees to
   perform, execute and/or deliver, or cause to be performed, executed and/or
   delivered, any and all such further acts and assurances as Assignee may
   reasonably require to perfect Assignee's interest in the Personal Property
   hereby transferred, but Assignee and Assignor agree that this Instrument and
   these presents shall be, and the same hereby are, declared to be sufficient
   in all respects to, and the same do hereby, effect the transfer and
   assignment made hereunder. 

         This Bill of Sale and
   Assignment shall be binding upon and inure to the benefit of Assignor and
   Assignee, and their respective successors and assigns. 

         IN WITNESS WHEREOF,
   Assignor has duly executed and delivered this Bill of Sale and Assignment,
   and Assignee has accepted this Bill of Sale and Assignment, effective as of
   the 31st
 day of January, 2000.


 	 	          
      ASSIGNOR:
   

   SCHOTTENSTEIN STORES CORPORATION, a Delaware
   

             corporation
	 	 
	 	By: /s/ Jeffrey Swanson
   

   Name:
   

   Title:  President


  

 [signatures continued on following page]


 	 	ASSIGNEE
   

   BLUE STAR IMPORTS, L.P., a
   

   Pennsylvania limited partnership      
      
	 	 
	 	 By:   BSI Imports Company, LLC, a
   

           Delaware limited liability
   

   company and its sole General Partner     

   
	 	 
	 	By: /s/ Dale E. Clifton
   

         Name: Dale E. Clifton
   

         Title: VP, Controller, and Chief
     Accounting
   

         Office


 EMPLOYMENT PRACTICES AND SHARED SERVICES AGREEMENT

 

  

         THIS AGREEMENT is dated as
   of the 10th day of March, 2000, effective as of January 31, 2000, between
   SCHOTTENSTEIN STORES CORPORATION, a Delaware corporation, (
   "Schottenstein") and BLUE STAR IMPORTS, L.P., a Pennsylvania
   Limited Partnership ("Blue Star").

 R E C I T A L

         A.    
       Blue Star and Schottenstein have entered into a
   Purchase and Sale Agreement effective as of January 31, 2000 ("Purchase
   Agreement") whereby Blue Star is purchasing the Purchased Assets and
   the Business of Value City Imports, a division of Schottenstein, relating to
   the importation of the AEO Merchandise (as such capitalized terms are
   defined in the Purchase Agreement). All capitalized terms not otherwise
   defined herein shall have the meaning given to such terms in the Purchase
   Agreement.

         B.    
       Blue Star desires to receive, on a transitional
   basis, certain services currently provided by Schottenstein for the
   Purchased Assets and the Business on the terms and conditions contained
   herein.

         C.    
       Schottenstein is willing to provide, on a
   transitional basis, at reasonable times and upon reasonable prior notice,
   certain services currently provided by Schottenstein for the Purchased
   Assets and the Business on the terms and conditions contained herein.

         D.    
       In connection with its acquisition of the Purchased
   Assets and the Business from Schottenstein, Blue Star has hired certain
   employees, Guy Bradford and Hank Shechtman (the "Blue Star Employees
   "), who formerly were employed by Schottenstein.

         E.    
       Schottenstein desires to receive, on a transitional
   basis, certain services to be provided by the Blue Star Employees in
   connection with the importation of merchandise for Value City Department
   Stores and Value City Furniture stores, on the terms and conditions
   contained herein. 

         F.    
       Blue Star is willing to provide, on a transitional
   basis, at reasonable times and upon reasonable prior notice, the services of
   the Blue Star Employees to assist Schottenstein in connection with its
   importation of merchandise, on the terms and conditions contained herein.

  

         NOW THEREFORE, for good and
   valuable consideration, the sufficiency of which is hereby acknowledged, and
   intending to be legally bound, the parties agree that the transitional
   services shall be provided in accordance with the following:

         1.    
       Supply of Services.

             
       a.       
    Schottenstein shall, upon the request of Blue Star, supply to Blue
   Star the services (at the cost) as described in Attachment A hereto (the
   "Defined Services) according to the terms of this Agreement. In
   addition, to the extent Blue Star needs services historically provided by
   Schottenstein in addition to the Defined Services, the parties agree to
   amend Attachment A to add such services (the "New Services"). The
   New Services and the Defined Services are collectively referred to as the
   "Services". Schottenstein shall furnish Blue Star with such
   current merchandise in transit, orders and other reports and documents that
   it has normally produced with respect to its provision of the Services. All
   Services provided hereunder shall be performed in compliance with all
   applicable laws and regulations and in substantially the same manner as
   historically performed by Schottenstein and as revised from time to time by
   Schottenstein consistent with the methods used for the importation of
   Schottenstein's own merchandise. Blue Star may, at its discretion, decrease
   or discontinue any of the Services to be provided hereunder. The parties
   hereto also agree that Blue Star shall have no obligation to order any
   Services whatsoever. Schottenstein shall provide Blue Star with reasonable
   access to its facility and the Purchased Assets. During the Transition
   Period and the Extended Term, Blue Star may elect to remove the Purchased
   Assets from the Facility for the purpose of relocating such assets to
   facilities owned or operated by Blue Star or its affiliates.

             
       b.       
    Blue Star shall, upon the request of Schottenstein, supply to
   Schottenstein, at reasonable times, the services of the Blue Star Employees
   (and any other current employee of Blue Star who had previously worked for
   Schottenstein in connection with the importation of its merchandise and its
   customs compliance program) in order to assist Schottenstein in connection
   with the importation of merchandise and customs compliance program for
   Schottenstein and its affiliated entities (the "Blue Star Employees'
   Services"). The Blue Star Employees' Services shall be performed in
   compliance with all applicable laws and regulations, and in substantially
   the same manner as historically performed by the Blue Star Employees, and as
   revised from time to time by Blue Star consistent with past practice. The
   Blue Star Employees' Services shall be the same services as have
   historically been provided to Schottenstein by such employees prior to the
   Closing, and shall also include reasonable training of any of
   Schottenstein's remaining or newly hired employee(s). Schottenstein shall
   use its best efforts to hire, as soon as is reasonably practical, its own
   employee(s) to perform the services that are now being provided to it by the
   Blue Star Employees hereunder. The Blue Star Employees' Services shall be
   provided to Schottenstein in accordance with the terms of this Agreement and
   at the costs as set forth on Attachment B hereto.

             
       c.       
    Schottenstein hereby perpetually and irrevocably licenses or
   sublicenses, as the case may be, to Blue Star and its affiliates (on a
   non-exclusive basis) the Software and Intellectual Property used or useful
   in connection with the ownership and/or operation of the Business. The
   license and/or sublicense granted by Schottenstein to Blue Star and its
   affiliates herein shall be considered a fully paid
 license and/or sublicense, and no license fee, royalty or other fee shall be
   due for the privilege of exercising the rights licensed or sublicensed
   herein. Schottenstein shall maintain the Software in an operating condition
   and will timely and fully pay all charged license or sublicense fees and
   maintenance fees necessary to enable Blue Star and its affiliates to fully
   access, use, and enter and retrieve data in connection with the Software.
   Schottenstein shall make available to Blue Star and its affiliates all
   Software and all currently existing and future associated technical
   information regarding the Software which might be reasonably necessary,
   useful or helpful to Blue Star and its affiliates in the exercise of the
   rights licensed, sublicensed or otherwise granted. There shall be no fees or
   other charges associated with providing the documents and materials
   contemplated by this Subparagraph c.      
     

         

         2.     
       Term.

         This Agreement shall
   commence upon the date hereof and continue in effect for a term of one year
   (the "Transition Period") ending on (the "Original  Termination
   Date") January 31, 2001, subject to extension in accordance with this
   Section 2. Either party may, at its option and by notice given to the other
   party at least 30 days prior to the Original Termination Date (and 30 days
   prior to the expiration of the initial 3 month extension period, if
   applicable), extend such term of this Agreement, for a total of up to two
   additional periods of three months each (the "Extended Term"). 

         

         3.    
       Termination.

             
       a.       
    Blue Star may terminate this Agreement as to any one or more Services
   at any time upon 10 days' prior written notice. Blue Star shall not
   terminate this Agreement during the Transition Period and the Extended Term
   with respect to its obligation to make available the Blue Star Employees and
   provide the Blue Star Employees' Services to Schottenstein except in the
   event that Schottenstein fails to make any payment due hereunder within five
   (5) days after delivery of written notice by Blue Star, or if Schottenstein
   breaches any nonmonetary obligation hereunder and such breach is not cured
   within thirty (30) days after delivery of written notice by Blue Star unless
   Schottenstein has undertaken a course of action reasonably calculated to
   cure such nonmonetary breach and continuously pursues the same until
   cured.

             
       b.       
    Schottenstein may terminate this Agreement as to its use of the Blue
   Star Employees or the providing of any of the Blue Star Employees' Services
   at any time upon 10 days' prior written notice. Schottenstein shall not
   terminate this Agreement during the Transition Period and the Extended Term
   for any Service except in the event that Blue Star fails to make any payment
   due hereunder within five (5) days after delivery of written notice by
   Schottenstein, or if Blue Star breaches any nonmonetary obligation hereunder
   and such breach is not cured within thirty (30) days after delivery of
   written notice by Schottenstein unless Blue Star has undertaken a course of
   action reasonably calculated to cure such nonmonetary breach and
   continuously pursues the same until cured.

         4.     
       Price.

             
       a.       
    The price for each Defined Service shall be its cost as described on
   Attachment A hereto. The price for each New Service shall be set forth on
   Attachment A and shall be calculated by Schottenstein and agreed to by Blue
   Star in the same manner as the cost (with no corporate overhead charges) for
   each Defined Service was calculated for this Agreement.

             
       b.       
    The price for each Blue Star Employee and the Blue Star Employees'
   Services shall be as described on Attachment B hereto. If Schottenstein
   desires to utilize any additional employees of Blue Star, the price for each
   additional employee shall be calculated by Blue Star and agreed to by
   Schottenstein in the same manner as the cost for the Blue Star Employees was
   calculated for this Agreement. To the extent that a cost for a particular
   service included in the Blue Star Employees' Services is not specifically
   listed on Attachment B, the cost to be charged by Blue Star shall be its
   actual cost (with no corporate overhead charges) for such service. 

         

         5.    
       Past Practice.

         Schottenstein has been
   supplying importation services to the American Eagle Outfitters, parent of
   Blue Star, for several years. To the extent that questions arise as to the
   nature of a particular Service or a Blue Star Employees' Service, the manner
   in which Services or Blue Star Employees' Service are to be provided, or any
   responsibilities of Schottenstein or Blue Star hereunder, the parties shall
   be guided by past reasonable practices of Schottenstein or American Eagle
   Outfitters.

         6.    
       Invoicing and Payment.

             
       a.       
    Schottenstein shall invoice Blue Star monthly for the Services
   supplied hereunder. Schottenstein may use one or more invoices. Payment
   shall be due 30 days after the invoice(s) are sent. The provisions of this
   Section 6 shall survive the termination of this Agreement.

             
       b.       
    Blue Star shall invoice Schottenstein monthly for the Blue Star
   Employees and Blue Star Employees' Services supplied hereunder. Blue Star
   may use one or more invoices. Payment shall be due 30 days after the
   invoice(s) are sent. The provisions of this Section 6 shall survive the
   termination of this Agreement.

         7.    
       Right to Audit.

         For purposes of verifying
   the accuracy of charges for the Services supplied hereunder and to verify
   the proper performance of the Services by Schottenstein and its affiliates
   and assignees hereunder, Blue Star shall be entitled, prior or subsequent to
   any payment of charges hereunder, to have access at all reasonable times
   during normal business hours at the Facility, to the Books and Records of
   Schottenstein (and its affiliates providing the Services) relating to the
   Division hereunder as may be
 reasonably related to such inquiry, all at Blue Star's sole expense. Blue Star
   shall maintain the confidentiality of information supplied to it in the
   course of performing such audit and shall not disclose such information to
   persons who do not have a need to know. Schottenstein shall have the right
   to audit the charges for the Blue Star Employees and Blue Star Employees'
   Services in accordance with the same terms and conditions which govern Blue
   Star's right to audit as set forth hereinabove.

         8.    
       Independent Contractor Status.

         a.    
       Schottenstein shall be an independent contract with
   respect to the Services. Blue Star shall be an independent contractor with
   respect to the Blue Star Employees' Services. Each party shall be
   responsible for its own employees, and employees of each party shall not be
   deemed to have an employment relationship with the other party. Upon Buyer's
   request, Schottenstein shall use its best efforts to make available to Blue
   Star the Schottenstein employees engaged in the Business (regardless of
   whether or not Blue Star shall have extended offers of employment to such
   persons) to provide reasonable assistance in the training of Blue Star's
   employees to enable such employees to operate and utilize the Purchased
   Assets and to deliver Services of a quality at least similar to the quality
   of such Services as were provided by Schottenstein with such Purchased
   Assets and the Business. Blue Star shall have, for a period of ninety (90)
   days following the Closing, the right to extend offers of employment to, and
   hire, those of Schottenstein's employees as listed on Attachment C attached
   hereto who are presently engaged in providing the Services with respect to
   the Business, and Schottenstein will not engage in conduct or actions
   (including, but not limited to, the offering of additional incentives or
   compensation to such employees) with the intention or for the purpose of
   deterring such employees from accepting offers from Blue Star. Schottenstein
   further agrees that it will not, for a period of two years following the
   date of the Closing, solicit, offer to hire, or rehire any employees whom
   Blue Star hires to assist Blue Star in the operation of the Business. Blue
   Star further agrees that it will not, for a period of two years following
   the date of the Closing, solicit, or offer to hire any employees of
   Schottenstein who are not listed on Attachment C to assist Blue Star in the
   operation of the Business. This Paragraph 8 shall survive the expiration or
   earlier termination of this Agreement.

         b.    
       Blue Star shall be solely responsible for all
   liabilities, demands, damages, costs and expenses (including reasonable
   attorney's fees), and shall indemnify, defend and hold harmless the
   Schottenstein and its affiliates and their respective officers and
   directors, shareholders and representatives, from and against all
   liabilities, claims, demands, damages, costs and expenses (including
   reasonable attorney fees) arising from the conduct, actions, inactions or
   omissions of the Blue Star Employees (and not caused by Schottenstein, its
   employees or contractors) in connection with the Blue Star Employees'
   Services hereunder.

         c.    
       Schottenstein shall be solely responsible for all
   liabilities, demands, damages, costs and expenses (including reasonable
   attorney's fees), and shall indemnify, defend and hold harmless Blue Star
   and its affiliates and their respective
 officers and directors, shareholders and representatives, from and against all
   liabilities, claims, demands, damages, costs and expenses (including
   reasonable attorney fees) arising from the conduct, actions, inactions or
   omissions of Schottenstein (and not caused by Blue Star, its employees or
   contractors) in connection with the Services hereunder.

         9.    
       Negotiation of Contracts. 

             
       a.       
    For a period of five (5) years following the Closing Date,
   Schottenstein agrees, upon request of the Blue Star, to use its best efforts
   to negotiate any number or all freight, shipping and transportation rates in
   combination with Blue Star for the importation of similar merchandise by
   Schottenstein and its affiliates, including but not limited to Value City
   Department Stores (so as to take full advantage of all volume and other
   discounts available by combining Schottenstein's importation volume with
   Blue Star's importation volume). Schottenstein will advise Blue Star of all
   scheduled negotiation sessions. Blue Star may or may not choose to have a
   representative present at the negotiations. . Schottenstein will make
   available the use of the negotiated contracted rates to Blue Star. Blue Star
   shall have the right to accept or decline those contracted rates. If Blue
   Star accepts those contracted rates, Schottenstein may charge a mutually
   agreed upon fee. Schottenstein and Blue Star shall split equally the
   reasonable out-of-pocket costs incurred by Mort Love (as shown on Attachment
   A) in the negotiation of such freight, transportation and shipping
   contracts. The provisions of this Section 9 shall survive the expiration or
   termination of this Agreement.

         10.    
       Assignment and Delegation.

             
       a.       
    This Agreement and any rights pursuant hereto to utilize the Blue Star
   Employees shall be assignable by Schottenstein to (i) any of its business
   units, subsidiaries or affiliates without the consent of Blue Star, or (ii)
   any third party entity which acquires, is acquired by, merges or otherwise
   consolidates with, purchases or otherwise acquires a majority of shares or
   other interests, or acquires a portion of the assets or business of,
   Schottenstein, or any of their subsidiaries or affiliates, without the
   consent of Blue Star. Any other assignment or transfer of this Agreement
   shall require the prior written consent of Blue Star, which consent shall
   not be unreasonably withheld. Schottenstein shall have the right to delegate
   its duties to perform Services hereunder to any of its business units,
   subsidiaries or affiliates without the prior consent of Blue Star. In no
   event shall any such delegation of duties hereunder release Schottenstein
   from liability to Blue Star for the performance of the Services provided
   hereunder.

             
       b.       
    Blue Star may assign or delegate all or a portion of this Agreement to
   (i) any parent, subsidiaries or affiliated entities of Blue Star or American
   Eagle Outfitters, Inc., or (ii) any third party entity which acquires, is
   acquired by, merges or otherwise consolidates with, purchases or otherwise
   acquires a majority of shares or other interests, or acquires a portion of
   the assets or business of, Blue Star or American
 Eagle Outfitters, Inc. or any of their subsidiaries or affiliates, without the
   consent of Schottenstein.

         11.    
       Force Majeure.

         Neither Schottenstein nor
   Blue Star shall be liable for any failure to perform hereunder arising from
   causes or events beyond the reasonable control and without the fault or
   negligence of the party failing to perform including, without limitation,
   labor disputes of any kind. If it appears to either party that an event is
   likely to occur which would interfere with such party's performance
   hereunder, such party shall notify the other party immediately of the event
   and of its likely duration. In the event of such failure, the obligation of
   the party shall be suspended until the cause of such suspension shall have
   been removed. 

         12.    
       Governing Law.

         This Agreement shall be
   governed by and construed in accordance with the laws of the Commonwealth of
   Pennsylvania, without regard to conflicts of law principles.

         13.    
       Notices.

         Any notice, request,
   consent, approval, waiver and other communication to a party hereunder shall
   be in writing and shall be deemed duly given when sent by first class mail,
   postage prepaid, or delivered by hand, or by telex or facsimile transmission
   to such party. Unless changed by written notice to the other hereunder, all
   notices shall be addressed sent to the address shown below:

 As to Blue Star Imports, L.P.:

          Blue Star Imports,
   L.P.
 

         150 Thorn Hill Drive
 

         Warrendale, PA 15086
 

         Attention of George Kolber

 As to Schottenstein Stores Corporation:

         Schottenstein Stores
   Corporation
 

         1800 Moler Road
 

         Columbus, OH 43207
 

         Attention of Jeffrey
   Swanson

         14.    
       Dispute Resolution.

             
       a.        In
   the event of any dispute arising in connection with this Agreement, the
   parties shall endeavor to resolve such dispute amicable by discussion and
   mutual accord. Such discussions shall include face-to-face meetings at
   senior managerial levels of Blue Star and Schottenstein. In the event that
   the parties are unable to mutually resolve such dispute within thirty (30)
   days after the initial face to face meeting referred to above, then either
   party may submit any unresolved controversy or claim arising out of or
   relating to this contract, or the breach thereof, to be settled by
   arbitration in accordance with the Commercial Arbitration Rules of the
   American Arbitration Association, in Pittsburgh, Pennsylvania, and judgment
   upon the award rendered by the arbitrator(s) may be entered in any court
   having jurisdiction thereof. The parties shall split equally the cost of the
   arbitrators. Any award rendered by the Arbitrator(s) may include
   compensatory damages and costs but under no circumstances shall either party
   be liable for nor shall the arbitrator(s) award any incidental,
   consequential or special (including punitive or multiple) damages.

             
       b.       
    Notwithstanding anything herein to the contrary, the existence of a
   dispute (other than payment of the price) shall not reduce the obligation of
   Schottenstein to continue to provide Services (or the obligation of Blue
   Star to make available the Blue Star Employees or to provide the Blue Star
   Employees' Services) hereunder during the pendency of the dispute resolution
   procedure, or following the resolution of such dispute, unless the
   resolution of the dispute contains a finding of a material default by Blue
   Star or Schottenstein as the case may be; provided, however, the foregoing
   shall in no way limit the amount of damages or type of relief (whether
   monetary or injunctive) to which Blue Star or Schottenstein is entitled
   under law or the provisions of this Agreement.

         

         15.    
       Integration.

         This Agreement supersedes
   all prior negotiations, commitments and writings pertaining to the subject
   matter hereof. Except as otherwise provided in this Agreement, this
   Agreement may be amended only by a written instrument duly executed by both
   Schottenstein and Blue Star.

         16.    
       Waiver.

         Any waiver at any time, by
   either Schottenstein or Blue Star, of its rights with respect to the other
   party to this Agreement, or with respect to any other matter arising in
   connection with this Agreement, shall not be considered waived with respect
   to any subsequent default or matter.

         17.    
       No Third Party Beneficiaries. 

         Nothing in this Agreement,
   whether express or implied, is intended to confer any rights or remedies
   under or by reason of this Agreement on any person other than the parties
   and their respective successors and assigns, nor is anything in this
   Agreement intended to relieve or discharge the obligation or liability of
   any third persons to a party to this Agreement, nor shall any provision
   hereof give any third persons any right or subrogation or action against any
   party to this Agreement.

         IN WITNESS WHEREOF, the
   parties hereto have caused this Agreement to be executed as of the date
   first above written.


 	BLUE STAR IMPORTS, L.P.
   

   By: BSI Imports Co., LLC
   

         General Partner	SCHOTTENSTEIN STORES
   

   CORPORATION	 
	 	 	 
	By /s/ Dale E. Clifton 	By /s/ Jeffrey Swanson	 


  

 Attachment A 

 The Price of each Defined Service will be equal to the
   total expense recorded on Division's books in each month during the term of
   the Agreement for the Defined Services listed below multiplied by a Percent
   Allocation determined according to the methods described below.

 For purposes of this Schedule, the following terms have the
   meanings assigned to them below:

 	Headcount Allocation Percentage shall be the percentage of time
   worked that each employee devotes to Blue Star Imports Matters;



 	Payroll Allocation Expense shall be an employee's Headcount Allocation
   Percentage times his annualized earnings.

Blue Star may audit the calculations used to determine the
   Percent Allocations at any time upon reasonable notice to Schottenstein. The
   parties agree to use the Percent Allocations listed below; however, either
   party may request a change to a Percent Allocation for any Defined Service
   at any time, and the parties agree to negotiate in good faith to determine
   whether a change in any of the percentages is required. In the event that
   the parties cannot agree on whether a change to a Percent Allocation is
   required, or as to the amount of any such change, then the disagreement will
   be resolved in accordance with the provisions for Dispute Resolution as set
   forth in Paragraph 14 of the Agreement.

 

 	 Defined Service 
	 Percent Allocation 
	 	
     Method 

	 Payroll and
     Related Expenses 
	 35.86% 
	 	 Equal to the
     total of all Payroll Allocation Expenses divided by Value City Imports
     total annualized earnings. 

	 Classification
     Fees 
	 60.90% 
	 	 Equal to the
     number of entries processed for BSI as a % of total entries processed by
     VCI 

	 Data Processing
     
	 60.90% 
	 	 Equal to the
     number of entries processed for BSI as a % of total entries processed by
     VCI 

	 Delivery 
	 60.90% 
	 	 Equal to the
     number of entries processed for BSI as a % of total entries processed by
     VCI 

	 Depreciation
     (See Note 1 Below) 
	 

   	 	 See Note 1
     Below 

	 Dues &
     Subscriptions, Fees & Licenses 
	 37.84% 
	 	 Equal to the
     total of all Headcount Allocation Percentages divided by Value City
     Imports total headcount. 

	 Equipment
     Rental 
	 37.84% 
	 	 Equal to the
     total of all Headcount Allocation Percentages divided by Value City
     Imports total headcount. 


   



  Office Supplies 
  	 37.84% 
	 	 Equal to the
    total of all Headcount Allocation Percentages divided by Value City Imports
    total headcount. 



 


	 Defined Service 
	 Percent Allocation 
	 	 Method
    

	 Outside Services
    (brokers) 
	 

  	 	 Based on actual
    direct expenses related to the Business 

	 Professional
    fees 
	 

  	 	 Based on actual
    direct expenses related to the Business 

	 Rent 
	 37.84% 
	 	 Equal to the
    total of all Headcount Allocation Percentages divided by Value City Imports
    total headcount. 

	 Repairs &
    Maint. 
	 37.84% 
	 	 Equal to the
    total of all Headcount Allocation Percentages divided by Value City Imports
    total headcount. 

	 Taxes - Personal
    Property (Exclusive of PPT on Software) 
	 60.90% 
	 	 Equal to the
    number of entries processed for BSI as a % of total entries processed by
    VCI 

	 Telephone 
	 37.84% 
	 	 Equal to the
    total of all Headcount Allocation Percentages divided by Value City Imports
    total headcount. 

	 Travel 
	 

  	 	 Based on actual
    direct expenses related to the Business 

	 Other 
	 

  	 	 Based on actual
    direct expenses related to the Business 



 



	Note 1:
    Calculation of Monthly Depreciation Charge to Blue Star
	

  
	

  	

  
	Total
    Depreciation/Month (Division)
	14,260.00

	CFP Software
    Related
	(10,510.00)

	Automobile
    Depreciation
	(278.00)

	Estimate for
    GB/HS Hdware Depr.
	(63.00)

	

  	
	Net
    Depreciation/Month (Division)
	3,409.00

	

  	

  
	Total of all
    Headcount Allocation Percentages divided by Value City Imports total
    headcount
	37.84%

	

  	

  
	Initial Monthly
    Allocation of Depreciation to Blue Star
	1,289.97



 

Schedule B

Allocation of costs for Shared Services provided by Blue Star Imports as it
  relates to the importation business of Schottenstein Stores Corporation or
  its affiliates:

 


	 Costs
	 Method of Allocations

	 Salaries
	 Salaries will be allocated based upon time
    spent on services provided to Schottenstein Stores Corporation or its
    affiliates, with the exception of Guy Bradford. Initially Guy Bradford
    wages will be allocated based upon the number of custom entries related to
    Schottenstein Stores Corporation or its affiliates. On a monthly or
    quarterly basis Guy Bradford's allocation will be reviewed as his duties
    change. 

	 Other costs
	Based on actual expenses related to services
    provided to Schottenstein Stores Corporation or its affiliates.