Document:

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                                                                   Exhibit 10.12

                               SOURCING AGREEMENT

        This SOURCING AGREEMENT (this "Agreement"), dated as of July 31, 1998,
by and among Federated Department Stores, Inc., a Delaware corporation
("Federated"), Specialty Acquisition Corporation, a Delaware corporation
("Specialty"), and MSS-Delaware, Inc., a Delaware corporation ("MSS" and,
together with Specialty, the "Company"),

                                    RECITALS:

        A. Federated Specialty Stores, Inc. and Specialty are parties to an
Acquisition Agreement, dated as of July 22, 1998 (the "Acquisition Agreement"),
pursuant to which Federated Specialty Stores, Inc. has agreed to sell to
Specialty all of the issued and outstanding shares of capital stock of MSS.

        B. The Company conducts the retail sale of men's and women's apparel and
accessories ("Merchandise") at retail locations throughout the United States.

        C. The execution and delivery of this Agreement is a condition to the
consummation of the closing under the Acquisition Agreement, and Federated has
agreed to enter into this Agreement to provide certain services to the Company
under and subject to the terms and conditions set forth in this Agreement.

        NOW, THEREFORE, the parties hereto agree as follows:

        1. Sourcing and Purchasing Services. The Company hereby engages
Federated, and Federated hereby accepts such engagement, solely as an
independent contractor, to provide the following services during the Term:

        (a) Agreement to Provide Sourcing and Purchasing Services. Federated
will provide purchasing, facilitation and importation services hereunder to the
extent and in a manner substantially similar to the manner in which it provides
such services in connection with the sourcing of merchandise for sale in its own
stores. Specifically, Federated will purchase Merchandise for resale to the
Company pursuant to orders placed with Federated by the Company (such
Merchandise being, when ordered by the Company from Federated hereunder,
"Products"). From the commencement of the Term to the first anniversary of the
date of this Agreement (such anniversary, the "First Anniversary," and the
period then ended, the "Exclusive Period"), the Company will engage Federated as
its exclusive importer of record of Merchandise from foreign sources at cost
F.O.B. foreign port and, in connection therewith, will order Products from
Federated in a manner and in a dollar volume (as compared to Merchandise ordered
from third parties) substantially consistent with the Company's practice during
the 12-month period immediately preceding the date of this Agreement. During the
remainder of the Term, the services to be provided by Federated hereunder will
be non-exclusive and the Company will have the right to source Merchandise from
any person; provided that, in such instances, Federated will not have any duty
or responsibility whatsoever with respect to such Merchandise sourced from such
other persons.

        (b) Purchasing Procedure. The Company will, at its sole cost and
expense: prepare and deliver reasonably detailed Product specifications in
writing to the appropriate Federated

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overseas office; negotiate the terms of the manufacture and delivery of such
Products with vendors (including without limitation the price and quality
standards thereof), except that, at the request of the Company, Federated will
participate in such negotiations to the extent consistent with its practice
prior to the date hereof, and authorize, by means of purchase orders in
substantially the form then used by Federated for purchases of merchandise for
its own stores, Federated to purchase such Products from vendors designated by
the Company. Federated will then promptly confirm such orders in writing and
timely place its corresponding purchase orders with the vendors designated by
the Company for such Products. Federated will use commercially reasonable
efforts to cause such vendors to comply with the Company's specifications and
timing requirements, including by visiting and inspecting the vendors'
facilities. The Company may, at its sole cost and expense and to the extent it
deems appropriate, cause its employees and representatives to travel to
Federated's overseas offices and vendors' facilities in connection with its
negotiations for the purchase of Merchandise. Federated will test and inspect
the Products at no additional charge to the extent and in a manner substantially
consistent with the procedures applied to merchandise purchased by Federated for
sale in its own stores. Any additional testing or inspection will be performed
as reasonably requested by the Company at the Company's sole cost and expense.

        (c) Standard of Care of Federated. Federated will use commercially
reasonable efforts to perform its duties and responsibilities hereunder, which
efforts will be deemed to have been taken to the extent that Federated uses the
same standard of care as it applies with respect to the sourcing of merchandise
for sale in its own stores.

        (d) Limitations on Federated's Duties. Attached hereto as Exhibit is
Federated's policy as of the date hereof with respect to the purchase of private
label merchandise for its own stores (the "Vendor Policy"). The Vendor Policy,
as amended from time to time, with respect to the application for the purchase
of private label merchandise for its own stores will apply to purchases of
Products hereunder. Federated reserves the right, in its sole discretion, to
refuse to source or procure Products should Federated determine that performance
may violate any applicable law or the Vendor Policy. In such cases, Federated
will notify the Company in writing as soon as reasonably practicable, but no
later than the date that Federated's own divisions and subsidiaries are so
notified. In addition, Federated will notify the Company in writing of any
change in the Vendor Policy as far in advance as is reasonably possible under
the circumstances. Notwithstanding the foregoing, Federated may not apply any
change in the Vendor Policy to orders which are outstanding on the date such
change is instituted. The Company may purchase Merchandise from a third party
following Federated's written refusal to procure such Merchandise and no
compensation will be payable to Federated for such purchases; provided, however,
that the Product Cost of any such Merchandise purchased by the Company directly
or indirectly from the vendor designated by the Company, and on the same terms
and specifications contained in the purchase order submitted to Federated, will
be applied for all purposes of this Agreement towards satisfying the Minimum
Quantity (as defined in Section 3) for purposes of Section 3.

        (e) Forecasts by the Company. In order to facilitate Federated's
sourcing of Products, the Company will provide Federated from time to time and
as reasonably requested by Federated with forecasts of the quantity and type of
Merchandise the Company intends to purchase in the reasonably foreseeable
future, but in no event more than six months ahead of placing orders.

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        (f) Maintenance of Records by Federated. Federated will provide to the
Company the summary and detailed invoice information with respect to each
purchase order and maintain reasonably complete and accurate records of all
Products ordered, in process, finished and/or in transit sufficient to support
such invoices and, at the request of the Company, provide reasonable access to,
or copies of, such records.

        (g) Post-Order, Responsibility. Once a purchase order has been submitted
to Federated, such order may not be modified or canceled by the Company (unless
the vendor fails to comply with the terms of such purchase order, in which case
the rights of the Company will be governed by the terms of the purchase order
submitted to Federated) without Federated's prior written consent, which
Federated will be obligated to give only if, upon the application of
commercially reasonable efforts, the corresponding order placed by Federated
with the vendor is so modified or canceled. In any event, all costs and expenses
incurred by Federated and paid to third parties resulting from any Company
modification or cancellation will be borne solely by the Company. Federated will
promptly advise the Company of all anticipated problems or delays in production
and/or delivery and will use commercially reasonable efforts to resolve any such
problems with its vendors. Federated will process any claims or disputes over
the quality, quantity or delivery of Products in accordance with Section 4(d)
and credit the Company with any financial settlement, payment or other financial
concession by a vendor actually effected in connection therewith.

        (h) Delivery of Products. Delivery of Products by Federated will be
deemed complete, and the risk of loss for such Products will pass to the
Company, upon delivery to (i) the distribution center located at Carlstadt, New
Jersey, which is the distribution center currently being used by the Company,
(ii) any other distribution center located within 50 miles of Carlstadt, New
Jersey used hereafter by the Company, provided that the Company reimburses
Federated for any additional out-of-pocket costs incurred in connection with the
delivery thereto not included in the Loaded Landed Cost (as defined in Section
4(b)) for such Products, or (iii) if the Company hereafter uses a distribution
center at a different location 50 miles or more from Carlstadt, New Jersey (or
if the Company hereafter uses a distribution center located less than 50 miles
from Carlstadt, New Jersey and the Company refuses to reimburse Federated for
any additional out-of-.pocket costs incurred by Federated in connection with the
delivery thereto), a consolidator or freight forwarder designated by the
Company. Upon such delivery to a consolidator or freight forwarder pursuant to
clause (iii), the consolidator or freight forwarder will be responsible for any
further delivery at the Company's expense. Notwithstanding the forgoing, the
clearance of Products through customs in foreign and domestic ports will be the
responsibility of Federated, and Federated's out-of-pocket costs to third
parties associated therewith will be included in the Loaded Landed Cost for such
Products.

        2. Involvement by Federated Personnel. Federated will provide dedicated
personnel and other resources to the provision of services hereunder to the
extent provided by Federated immediately prior to the date hereof, subject to
adjustment as Federated reasonably determines to be appropriate as a result of
changes in technology and the volume of Products ordered by the Company
hereunder.

        3. Minimum Quantity. Unless this Agreement is terminated on the First
Anniversary pursuant to Section6(b)(ii), during the period commencing on the
first calendar day following the

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Exclusive Period and ending on the second anniversary thereof (the
"Non-Exclusive Period"), the Company will order Products having not less than
$30,000,000 (the "Minimum Quantity") in aggregate Product Cost. For purposes of
this Agreement, "Product Cost" means Federated's actual, direct cost charged by
third-party vendors for the manufacture of Products, but does not include the
cost of any letter of credit or other credit support required in connection with
the purchase of Products by Federated on behalf of the Company hereunder, which
cost will be borne by Federated ("Credit Cost").

        4. Commissions: Method of Payment. (a) Commissions. In consideration for
the services provided by Federated hereunder, the Company will pay Federated in
accordance with this Section 4 a commission (the "Commission") equal to the
following percentage of the aggregate Product Cost ordered during each 12-month
period commencing on the date hereof-

<TABLE>
<CAPTION>

Product Cost                                                     Percentage
------------                                                     ----------
<S>                                                              <C>
Up to $40 million                                                    8%

$40-50 million                                                       7%

$50-60 million                                                       6%

Greater than $60 million                                             5%
</TABLE>

In the above table, each applicable percentage is applied only to the amount
ordered in excess, of the prior threshold and below the ceiling applicable to
such level, but not to the total amount of shipments to the Company in such
12-month period.

        (b) Loaded Landed Cost. The price charged by Federated to the Company
for Products will be Federated's Loaded Landed Cost for the Products. The
"Loaded Landed Cost" for each shipment of Products will be the Product Cost plus
all costs associated with importing the Products into the United States,
including but not limited to the cost of duty, taxes, warehousing, assessments,
freight, inland transportation, insurance, consolidation and deconsolidation
and the actual, out-of-pocket administrative costs and expenses paid to third
parties in connection with the Products, but will not include Credit Cost.
Federated will use commercially reasonable efforts to obtain the most favorable
rates for the foregoing third-party costs.

        (c) Payments for Products. On the later of (i) the date on which
Products are delivered to a loading vessel for shipment to the Company and (ii)
the date designated in the purchase order for delivery of such Products,
Federated will notify the Company of the total amount due to Federated for the
Loaded Landed Cost for such Products. Payment of the Loaded Landed Cost for
Products plus all Commissions due and payable thereon by the Company will be due
upon Federated's presentation to the Company of Federated's invoice therefor and
will be made within two business days of such presentation (the end of such two
business day period being the "Payment Deadline") by wire transfer of
immediately available funds to an account designated by Federated, without any
set-off or deduction of any kind whatsoever. Any amounts not paid by the Payment
Deadline ("Arrearages") will accrue interest daily from such date until paid in
full

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at an annual rate equal to the lesser of (i) the prime rate announced by
BancBoston, N.A. ("BancBoston") from time to time plus 0.5% and (ii) the maximum
rate allowed by law. At any time that Arrearages aggregate $250,000 or more,
Federated will be entitled, upon five calendar days' written notice to the
Company, to suspend its services under this Agreement (including without
limitations delivery of any Products), without any liability therefor, until
such Arrearages are paid in full. Title for Products will pass to the Company
upon payment in full to Federated of the Loaded Landed Cost for such Products
plus all Commissions and interest due thereon pursuant to this Section 4.

        (d) Claims Procedure. The Company acknowledges that its sole recourse
for all claims, whether for shortages, nonconformance, defects, delays or
otherwise, will be governed by Federated's standard claims policy for its own
divisions and subsidiaries (which policy as of the date hereof is set forth on
Exhibit B), as amended from time to time. Federated will notify the Company in
writing as far in advance as reasonably possible under the circumstances of any
change in such claims policy; provided, however, that no such change will be
effective with respect to Products shipped to the Company prior to the date any
such change is instituted.

        (e) Stand-by Letters of Credit. The Company will furnish, or will cause
to be furnished, to Federated, at the same time that it provides its quarterly
financial statements to BancBoston or any other lender of the Company, but in no
event later than 45 calendar days after the end of each fiscal quarter, a
consolidated balance sheet of the Company as of the end of such fiscal quarter
and consolidated statements of income, stockholders' equity and cash flow of the
Company for such fiscal quarter, in reasonable detail and certified by the chief
financial or accounting officer of the Company (i) stating that such balance
sheet and statements fairly present, in all material respects, the financial
condition of the Company as of the date indicated and the results of its
operations and its cash flows for the periods indicated and that such balance
sheet and statements were prepared in conformity with U.S. generally accepted
accounting principles (other than the absence of footnotes and year-end
adjustments and other than for dates prior to the date hereof) and (ii)
demonstrating in reasonable detail the calculation of the Company's EBITDA for
purposes of this Section 4(e). The Company will notify Federated within one
business day of any breach or violation of, or default under, the minimum EBITDA
financial covenant contained in, and calculated pursuant to, the Company's loan
and security agreement with BancBoston (as provided to Federated on the date
hereof) (the "BancBoston Loan Agreement") or any loan agreement which replaces,
refunds or refinances the indebtedness under the BancBoston Loan Agreement (a
"Replacement Loan Agreement"). In the event that BancBoston or the senior lender
under any Replacement Loan Agreement does not waive in writing its rights under
the applicable loan agreement arising as a result of such breach, violation or
default (an "Unwaived EBITDA Event") within ten business days after the Company
delivers its quarterly financial statements to BancBoston or such other senior
lender pursuant to the BancBoston Loan Agreement or such Replacement Loan
Agreement, as applicable, the Company will obtain for Federated's benefit
irrevocable stand-by letters of credit. Such letters of credit will be obtained
from a nationally or regionally recognized commercial banking institution having
a combined capital stock, undivided profits and surplus of at least $500 million
and an office in New York City (a "Qualified Bank") and reflect a face amount
equal to 100% of the Loaded Landed Cost for all Product orders outstanding at
the time of such Unwaived EBITDA Event. Thereafter, for the duration of the
Unwaived EBITDA Event, the Company will adjust, the aggregate amount of such
letters of credit at the end of each month to reflect any increase or

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decrease in the Loaded Landed Cost for Product orders then outstanding (each
such adjustment, a "Monthly LC Adjustment").

        5. Term. This Agreement will be effective from the date of its execution
and will remain in effect for two years, unless earlier terminated as provided
herein (the "Term").

        6. Termination. (a) Termination by Mutual Agreement. This Agreement may
be terminated at any time by the mutual agreement of Federated and the Company.

        (b) Termination by Federated or the Company. Either Federated or the
Company may terminate this Agreement, (i) effective immediately upon giving the
other written notice of termination, if the other party breaches in any material
respect this Agreement or fails to perform any material obligation hereunder and
such breach or failure is not curable or, if curable, is not cured within 10
calendar days after written notice thereof from the non-breaching party (a
"Material Breach") or (ii) effective as of the First Anniversary, upon giving
the other written notice of termination between February 1 and February 28, 1999
(inclusive of such dates) (a "Six-Month Termination"). For purposes of this
Agreement, (A) the failure of the Company to pay any amount in excess of
$250,000 which is due Federated under this Agreement (including in determining
the $250,000 amount interest due under Section 4) and which has not been paid
within ten calendar days after written notice thereof from Federated will be
deemed a Material Breach and (B) the sole recourse and remedy of any party with
respect to a Material Breach by another will be termination of this Agreement
pursuant to Section 6(b).

        (c) Termination by Federated. Federated may also terminate this
Agreement, (i) effective immediately upon giving the Company written notice of
termination, (A) if the Company ceases, or admits in writing its intention to
cease, the conduct of its business or (B) if a Bankruptcy Event has occurred, or
(ii) in any event on 60 calendar days prior written notice from Federated if the
Company fails to provide irrevocable stand-by letters of credit to Federated
from one or more Qualified Banks as required pursuant to Section 3(e) hereof
unless the Company provides such required letters of credit within five calendar
days of such written notice from Federated. As used herein, "Bankruptcy Event"
means (1) if the Company makes any involuntary assignment of either its assets
or its business for the benefit of creditors, (2) if a trustee or receiver is
appointed to administer or conduct the Company's business affairs, (3) if the
Company is adjudged in any legal proceeding to be a debtor in bankruptcy, or (4)
if any insolvency proceedings are commenced against the Company and not
terminated or dismissed within 60 calendar days.

        (d) Effects of Termination. In the event of the expiration or
termination of this Agreement for any reason, Federated will have no further
liability or obligation to the Company under this Agreement except as otherwise
provided herein. Notwithstanding the foregoing, the provisions of this Agreement
will govern the rights and obligations of the parties with respect to all orders
for Products placed prior to the termination of this Agreement and in no event
will the termination of this Agreement relieve any party hereto of any
obligation hereunder which existed prior to such termination with respect to
such orders that were placed prior thereto. in the event this Agreement is
terminated on or after the First Anniversary except (i) pursuant to a six-month
Termination or (ii) by reason of a Material Breach by Federated, and the Company
has not paid to Federated Commissions for the Minimum Quantity since the First
Anniversary, the Company

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will be obligated to pay Federated, provided that Federated is not then in
Material Breach hereunder, as liquidated damages, the Commission (i.e., 8% of
the Product Cost) on the amount by which the total Product Cost for which the
Company has paid (including amounts ultimately paid with respect to outstanding
orders) Federated a Commission since the First Anniversary, in addition to all
sums due and payable for Products which have been ordered from Federated and not
paid for. In the event this Agreement is terminated by Federated at any time
during the Term pursuant to Section 6(b)(i) or Section 6(c) and the Company has
not paid to Federated Commissions for the Minimum Quantity during the Exclusive
Period, if this Agreement is so terminated therein (an "Exclusive Period
Termination"), or during the Non-Exclusive Period, if this Agreement is so
terminated therein (a "Non-Exclusive Period Termination"), the Company will be
obligated to pay Federated, so long as Federated is not then in Material Breach
hereunder, as liquidated damages, the Commission (i.e., 8% of the Product Cost)
on the amount by which the total Product Cost for which the Company has paid
(including amounts ultimately paid with respect to outstanding orders) Federated
a Commission during the Exclusive Period, in the event of an Exclusive Period
Termination, or during the Non-Exclusive Period, in the event of a Non-Exclusive
Period Termination, is less than the Minimum Quantity, within 30 calendar days
of the termination date, in addition to all sums due and payable for Products
which have been ordered from Federated and not paid for. The Company will not be
liable for liquidated damages hereunder to the extent that a credit to the
Minimum Quantity has been made pursuant to Section I(d) or an Act of God (as
defined in Section 11(b)) has prevented the Company from ordering Merchandise
and, following such Act of God, the Company has not ordered Merchandise through
any sourcing agent as an importer of record other than Federated. The parties
acknowledge that the provisions of Section 3 and this Section 6(d) are essential
terms of the transactions contemplated by this Agreement and the Acquisition
Agreement and that, without such terms, the parties would not enter into this
Agreement or the Acquisition Agreement. The parties further acknowledge that
payment of such liquidated damages pursuant to this Section 6(d) is compensation
for the loss suffered by Federated as a result of the failure of the Company to
perform its obligations under this Agreement and to avoid the difficulty of
determining damages under such circumstances. Such liquidated damages will be
the exclusive damages and remedy of Federated for breaches of Section 3 hereof.

        (e) Return of Materials. In the event of the expiration or any
termination of this Agreement for whatever reason, all samples, books, records,
designs and materials of any kind, and all copies thereof of either party held
by the other party, will be returned to the owner thereof within 15 calendar
days following sale or other disposition of all Products delivered pursuant to
this Agreement.

        7. License of Fed Brands System. (a) Grant of License. Federated hereby
grants to the Company a limited, non-exclusive and non-transferable license to
use during the Term, in the course of the Company's business, Federated's
merchandising system known as the "Fed Brands System" pursuant to and as set
forth in this Section 7.

        (b) Permitted Use. Pursuant to the License granted hereby, the Fed
Brands System may be used only at the locations of the Company approved in
advance by Federated and then only by employees of the Company and persons hired
by the Company as independent contractors, and Federated hereby approves such
use at the corporate headquarters of the Company, wherever located from time to
time within the continental United States, provided that the Company gives

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written notice to Federated at least 30 calendar days prior to any relocation of
its corporate headquarters. Notwithstanding any other provision hereof, the
Company may not (i) copy or duplicate the Fed Brands System except as necessary
to utilize the same as specifically permitted herein, (ii) remove any
proprietary or copyright legend from the Fed Brands System, (iii) create, or
authorize any other party to create, the source code to the Fed Brands System by
reverse engineering, decompiling or otherwise, or (iv) permit access to or use
of the Fed Brands System by any person other than a person employed by the
Company or hired by the Company as an independent contractor, with each such
person being required to sign a confidentiality agreement, in substantially the
form attached hereto as Exhibit C, pursuant to which such user agrees to
maintain the confidentiality of the Fed Brands System and any other confidential
information or trade secrets (as defined in Section 9) obtained as a result of
the use of the Fed Brands System, to comply with the terms of this Section 7 and
to protect the confidentiality of the sign-on code or password of such
individual. To the extent that Federated requires the Company to utilize the Fed
Brands System, Federated will provide reasonable support services, including
sufficient copies of the Fed Brands System software and software updates for the
Company to efficiently use the system, provided that any updates so provided
will be deemed to be part of the Fed Brands System and will be treated as such
under this Agreement.

        (c) Properly Rights. The Company acknowledges that the Fed Brands System
has been created for and licensed to Federated and contains confidential,
proprietary and trade secret information of Federated and that Federated would
be irreparably harmed and would have no adequate remedy at law if the Company
failed to perform any obligation under this Section 7. Accordingly, the parties
agree that, in addition to any other remedies which may be available at law or
in equity, Federated will have the fight to obtain injunctive relief to restrain
a breach or threatened breach, or otherwise obtain specific performance, of the
Company's covenants and agreements contained in this Section 7.

        8. License to Use Company Trademarks. The Company hereby grants
Federated a limited and non-exclusive license to use, during any period in which
the Company is in default of its obligations hereunder (including without
limitation to timely make any payment) and this Agreement has been terminated as
a result thereof in accordance with the terms hereof, the names "Aeropostale"
and "Chelsea Cambell" and any other names then utilized for any Products,
together with the trademarks, labels and all other legally protectable design
elements related thereto (collectively, the "Marks"), all in connection with
Federated's advertising and sale of Products bearing such Marks which are the
subject of outstanding orders at the time of such termination.

        9. Mutual Confidentiality. No party will disclose to any third party any
trade secret or confidential information that belongs to any other party that
was disclosed pursuant to this Agreement. For purposes of this Agreement, the
terms "confidential information" and "trade secrets" will include all
information of any nature and in any form which is owned by Federated or the
Company (or their affiliates) and which is not publicly available or generally
known to persons engaged in businesses similar to that of Federated and the
Company (either on or after the date of this Agreement), including but not
limited to the Federated materials referenced in Section 6(e), the Fed Brands
System and all practices, processes, methods, know-how and other facts related
to sales, advertising, promotions, financial matters, suppliers, supplier lists,
customers, customer lists, or customers' purchases of goods or services from
Federated or the

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Company, and all other secrets and information of a confidential and proprietary
nature; provided, however, that "confidential information" and "trade secrets"
will not include (i) information that is or becomes publicly known through no
fault of the receiving party and (ii) information that any party is required to
disclose under applicable law or the rules of any exchange on which the
securities of such party are traded. Upon the expiration of the Term, each party
will cease to use the other party's confidential information and trade secrets
(including without limitation the use by the Company of the Fed Brands System),
and all tangible confidential information and trade secrets that have been
provided to a party by another party (including without limitation all manuals,
documents, software and other materials and information relating to the Fed
Brands System) will be returned to the party that provided such information or
trade secrets.

        10. Copyright, Patent and Trademark Rights. Each of the parties hereto
reserves all property, including copyright, patent, and trademark, rights in all
of their respective materials, publications, research, software, data, devices,
designs, concepts and trade names in connection with the services provided to
the Company.

        11. Federated Indemnification; Limitation of Liability. (a)
Notwithstanding any other provision hereof, Federated will have no liability
for, and the Company hereby agrees to indemnify, defend and hold Federated
harmless from, any loss, claim, damage, liability, cost or expense
(collectively, "Damages") arising out of or relating to the performance of its
services hereunder, including without limitation liability with respect to (i)
design, development, supply, production, quality or performance of Products
purchased by the Company (and the Company will pay all costs and infringement
relating to defective Products and the return thereof to ultimate resources);
(ii) infringement of any trademark, copyright or other fights of third parties;
(iii) any violation of the laws of any state, the United States or any other
country; (iv) injury to person or damage to property caused by or associated
with Products purchased by the Company; or (v) failure of any such Products to
comply with specifications or with any express or implied warranties, unless in
the case of clause (i), (ii), (iii), (iv) or (v) it is demonstrated by the
Company that such Damages were occasioned by Federated's gross negligence or
willful misconduct; provided, however, that the Company will not be obligated to
demonstrate gross negligence or willful misconduct on the part of Federated in
order to establish a Material Breach by Federated for purposes of Section 6(b).

        (b) Neither the Company nor Federated will be liable for any delays in
the performance of this Agreement due to force majeure and causes beyond such
party's reasonable control (each, an "Act of God"), including without limitation
fires, strikes, disputes, war, civil commotion, epidemics, floods, accidents,
delays, shortages and laws, regulations, or requests of the government of any
state, the United States or any other government. If such is the case, the
Company will not be relieved of its obligations to make timely payments or to
provide stand-by letters of credit in accordance with this Agreement. However,
either the Company or Federated may terminate this Agreement upon prior written
notice in the event that performance of this Agreement is rendered impossible
for 90 consecutive calendar days due to any Act of God; provided, however, that
this Section will not apply to the Company's obligations to purchase from
Federated the Minimum Quantity in the event that this Agreement is so terminated
by reason of the Company's inability to perform its obligations hereunder and,
following any such

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Act of God, the Company continues to order Merchandise through sourcing agents,
as importers of record, other than Federated.

        (b) FEDERATED EXPRESSLY DISCLAIMS ALL WARRANTIES, INCLUDING WITHOUT
LIMITATION WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

        12. Status of Relationship. Federated's relationship with the Company
under this Agreement is solely that of an independent contractor, and nothing
contained in this Agreement will be deemed or construed (a) to create a
partnership or joint venture between the Company and Federated, (b) to cause
Federated to be responsible in any way for the debts, liabilities or obligations
of the Company, or (c) to give any party the authority to bind or act for the
other in any respect, except as specifically set forth herein.

        13. General Provisions. (a) Assignment. Neither this Agreement nor any
of the fights, interests or obligations hereunder may be assigned or delegated
by any party without the prior written consent of the other parties; provided,
however, that (i) consent of the Company will not be required prior to an
assignment, by Federated of its fights and duties hereunder to a subsidiary or
affiliate thereof to which all or substantially all of the assets and operations
of the Federated merchandising group for all of Federated are transferred, in
which event Federated will have no further obligations hereunder, and (ii)
consent of Federated will not be required prior to an assignment by the Company
of its rights and duties hereunder to a holder of senior indebtedness of the
Company (including without limitation those lenders under the Loan and Security
Agreement dated the date hereof) in the event that such holder or holders become
a creditor in possession of the Company's business.

        (b) Notices. All notices that are required or may be given pursuant to
this Agreement must be in writing and delivered personally, by a recognized
courier service, by a recognized overnight delivery service, by fax or by
registered or certified mail, postage prepaid, to the parties at the following
addresses (or to the attention of such other person or such other address as any
party may provide to the other parties by notice in accordance with this Section
13):

                If to Federated:

                        Federated Merchandising Group
                        11 Penn Plaza
                        New York, New York 10001
                        Fax: (212) 494-6822
                        Attention: Harry Frenkel

                With a copy to:

                        Federated Department Stores, Inc.
                        7 West Seventh Street
                        Cincinnati, Ohio 45202
                        Fax: (513) 579-7354
                        Attention: General Counsel

                                       10
<PAGE>

                If to the Company:

                        Specialty Acquisition Corporation
                        11 Penn Plaza - 6th Floor
                        New York, New York 10001
                        Fax: (212) 494-6818
                        Attention: Julian R, Geiger, President

Any such notice or other communication will be deemed to have been given and
received (whether actually received or not) on the day it is personally
delivered or delivered by courier or overnight delivery service or sent by fax
or, if mailed, when actually received; provided that if such notice or other
communication is sent by fax, a copy of such notice or communication is received
by the intended recipient by courier, overnight delivery or mail within ten
calendar days following the receipt of the facsimile transmission.

        (c) Binding Effect. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their successors, legal representatives and
permitted assigns.

        (d) Third-Party Beneficiaries. This Agreement is made solely and
specifically between and for the benefit of the parties hereto and their
respective successors and assigns, subject to the express provisions hereof
relating to successors and assigns. Except for such parties, no other person
whatsoever will have any fights, interest or claims hereunder or be entitled to
any benefits under or on account of this Agreement as a third-party beneficiary
or otherwise.

        (e) Waiver. No failure by any party to insist upon the strict
performance of any duty, agreement or condition of this Agreement or to exercise
any fight or remedy consequent upon a breach thereof will constitute a waiver of
any such breach or any other duty, agreement or condition.

        (f) Counterparts. This Agreement may be executed in one or more
counterparts, all of which together will constitute one agreement binding on all
the parties hereto, notwithstanding that all such parties are not signatories to
the original or the same counterpart.

        (g) Entire Agreement; Amendment. This Agreement contains the entire
understanding of the parties relating to the subject matter hereof and
supersedes all prior written or oral and all contemporaneous oral agreements and
understandings relating to the subject matter hereof. This Agreement cannot be
terminated, modified or amended, except in writing signed by all parties hereto.

        (h) Governing Law. This Agreement will be governed by and construed and
interpreted in accordance with the laws of the State of New York applicable to
contracts made and to be performed in that State, without giving effect to the
principles of conflict of laws thereof.

        (i) Significance of Headings. Section headings contained herein are
solely for the purpose of aiding in speedy location of the subject matter of
this Agreement and are not in any sense to be given weight in the construction
of this Agreement. Accordingly, in case of any

                                       11
<PAGE>

questions in the construction of this Agreement, this Agreement is to be
construed as though such section heading had been omitted.

                                       12
<PAGE>

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

                                          FEDERATED DEPARTMENT STORES, INC.

                                          By:/s/ Dennis J. Br. Derick
                                             -----------------------------------
                                             Name:Dennis J. Br. Derick
                                             Title:Senior Vice President,
                                                   General Counsel and
                                                   Secretary

                                          SPECIALTY ACQUISITION CORPORATION

                                          By:/s/Julian R. Geiger
                                             -----------------------------------
                                             Name:Julian R. Geiger
                                             Title:President

                                          MSS-DELAWARE,INC.

                                          By:Julian R. Geiger
                                             -----------------------------------
                                             Name:Julian R. Geiger
                                             Title:President

                                       13

<PAGE>

                                                 EXHIBIT B TO SOURCING AGREEMENT

                         FMG CLAIM POLICY AND PROCEDURE
                                   CONTRACTS(1)

<TABLE>
<CAPTION>
ACCOUNTING                    SYSM ID                               TELEPHONE
----------                    -------                               ---------
<S>                             <C>                    <C>        <C>
 V/P FINANCE                     JUDITH DALY            NJAD       212-494-6054
 MANAGEMENT/ACCOUNTING           JILL MALEH             NJVM       212-494-6553
 ACCOUNT-A/R                     LISSETTE MIRANDA       NLYM       212-494-6055
</TABLE>

<TABLE>
<CAPTION>
FINANCE                       SYSM ID                               TELEPHONE
-------                       -------                               ---------
<S>                             <C>                    <C>        <C>
 S. V/P FINANCE                  HARRY FRENKEL          NXHF       212-494-6300
</TABLE>

<TABLE>
<CAPTION>
LOGISTICS/IMPORT              SYSM ID                               TELEPHONE
----------------              -------                               ---------
<S>                             <C>                    <C>        <C>
 VICE PRESIDENT-                 LYNNE JERGENSEN        NLXJ       212-494-6100
 DIRECTOR-                       BARBARA SOLOMON        NXBS       212-494-6110
 MANAGER-                        RUDYRAMPERTAB          NXRR       212-494-6104
</TABLE>

                    INVOICE RELATED CLAIMS-FOREIGN SHIPMENTS
                                PURCHASER CLAIMS

Federated Merchandising Group will process for payment valid Purchaser Claims
for shortages and damages, as long as the following conditions are met:

1.      The claim has a landed cost value of more than $200.00 for concealed
        shortages, full carton shortages, pilferage's, damages, etc.

2.      We received a COMPLETED Proof Of Loss/Damage Form no later than 15 days
        after receipt of the merchandise at your receiving facility.

3.      The following instructions must be strictly complied with in preparing
        a Proof of Loss/Damage Claims.

        A.     For concealed shortages and damages you must:

               i.    Identify the style and carton number(s)

               ii.   Attach to the Proof of Loss/Damage Claims Form copies of
                     (1) trucker's delivery document and (2) Federated billing
                     invoice.

        B.     For damage claims, provide photograph(s) showing the damage.

        C.     All other documentation you may have to support your claim.

4.      Send completed claim form to the FMG Accounting Department, directed to
        the attention of Lissette Miranda, Accountant. Upon receipt of the
        completed claim, Federated Merchandising Group Claim Department will
        process all properly communicated and completed claims within 60 days.

IF ANY OF THE ABOVE INFORMATION IS MISSING FROM PROOF OF LOSS/DAMAGE CLAIM FORM,
IT WILL BE IMMEDIATELY REJECTED.

----------------------
(1) Note that contracts information is provided for convenience only and
Federated reserves the right to modify any information provided in respect of
identified individuals and/or areas of responsibility.

                               Exhibit B - Page 1

<PAGE>

                    INVOICE RELATED CLAIMS-FOREIGN SHIPMENTS
                                  INSTRUCTIONS

Listed below are the procedures that should be followed at your receiving
facility when receiving and processing foreign merchandise.

1.      Cartons

All carton markings should be checked and verified against the trucker's
delivery order to insure that the correct order and number of cartons is being
delivered. All cartons should be checked for signs of tampering, carton
re-taping, holes and damages (water stains, cartons crushed, rattling etc.).

If any discrepancies are detected, carton number(s) that are missing must be
noted. In order to process the claim against the vendor/carrier, we must have
the style and carton number(s). In addition, on cartons which are received
damaged, photos must be taken. These photos must be attached to the Proof of
Loss/Damage Claim Form.

2.      Concealed Shortages

When the shipment is processed, the contents of each carton should be checked
against the vendor's packing list and any discrepancy must be noted. In order to
process the claim against the vendor, we must have the style and carton
number(s) from which shortage occurred. Without this the vendor will not
consider the claim.

3.      Garments on Hangers (GOH)

On merchandise received as GOH, the receiving facility must verify that the
correct order and number of pieces are being received.

Each piece being received should be checked for signs of soilage, stains, water
damage, cuts, etc.

Any shortages must be noted on the trucker's delivery document. Photos must be
taken of garments that show signs of soilage, stains, water damage, cuts, etc.
These photos should be attached to the Proof of Loss/Damage Claim Form.

ALL ABOVE INSTRUCTIONS MUST BE FOLLOWED AND ALL INFORMATION PROVIDED OR CLAIM
CAN NOT BE PROCESSED.

                               Exhibit B - Page 2
<PAGE>

                    INVOICE RELATED CLAIMS-FOREIGN SHIPMENTS
                                PURCHASER CLAIMS

                    PURCHASER PROOF OF LOSS/DAMAGE CLAIM FORM

Listed below are the instructions that should be followed in filling out the
attached Proof Of Loss/Damage Claim Form For Foreign Shipments.

THE PROOF OF LOSS FORM IS CREATED AS AN E-FORM IN EMAIL 4.4 UNDER CLAIMS1.(2)

1.      Issue a Claim Number
2.      Write the Purchaser's Identification Number
3.      Write the Department Number
4.      Write the Order Number
5.      Write the Shipment Number
6.      Write the date carton(s) Received
7.      Write the date the carton(s) Opened
8.      Write the date GOH Received
9.      Write the date Loss was Discovered
10.     Write the date Loss was Verified
11.     Write the number of Pieces Short
12.     List Style and Carton Number Missing
13.     List Style and Carton Number Damaged
14.     List Style Number for Missing GOH
15.     List Style Number for Damaged GOH
16.     Check the box that indicates why you are filing this Proof Of
        Loss/Damage Claim.
        -   Non delivery-full carton(s) never received.
        -   Shortage-pieces are missing from within a carton.
        -   Damage-if wearing apparel or carpets are soiled, ripped, wet or
            otherwise mutilated or if other types of cargo are broken, chipped,
            scratched, etc.
17.     Unit Landed Cost-the amount you were charged per piece.
18.     The Total Landed Cost-Multiply the number of pieces short or damaged and
        multiply by the unit landed cost.
19.     Description-write in the full description including color and size where
        applicable.
20.     The Shortage Claims-Check yes or no for each of the three questions
        asked.
21.     Give Brief Explanation of Damage.
22.     For Import Claim Use Only.

-------------------
(2) References to "Syamail," "E-Mai'l" the "WAN" and other methods of electronic
communication should be construed as applicable to the electronic transmission
system then providing a communications link between the Purchaser and FMG.

                               Exhibit B - Page 3
<PAGE>

                 INVOICE RELATED CLAIMS-FOREIGN SHIPMENTS CONT'D
        CLAIM FOR CONTAINER FREIGHT STATIONS AND ACI DISTRIBUTION CENTER

CONTAINER OUTTURN REPORT

        -  EFFECTIVE 5/1/98 CONTAINER OUTTURN REPORT IS REQUIRED TO BE SENT BY
           EMAIL USING AN E-FORM UNDER DC/OTR (DC OUTTURN REPORT), WITHIN 2
           WORKING DAYS AFTER CONTAINER UNLOAD DATE ONLY IF THERE IS A
           DISCREPANCY AND THE FOLLOWNIG INFORMATION IS REQUIRED:

        -       SHIPMENT NUMBER(S)
        -       CONTAINER #
        -       ORIGINAL SEAL #
        -       B/L #(S)
        -       # OF CARTONS/GOH MANIFESTED IN CONTAINER
        -       # OF CARTONS/GOH ACTUALLY RECEIVED IN CONTAINER.
FOR SHORTAGES:
        -       LIST FMG SHIPMENT NUMBER AND BILL OF LADING ("BOL")
        -       LIST FMG PURCHASE ORDER NUMBER
        -       LIST PURCHASER PURCHASE ORDER NUMBER
        -       TOTAL NUMBER OF CARTON(S) / GOH MANIFESTED
        -       TOTAL NUMBER OF CARTON(S) / GOH RECEIVED
        -       CARTON NUMBER(S) MISSING
        -       GOH UNITS MISSING
        -       STYLE NUMBER (EITHER CARTON OR GOH) MISSING
FOR DAMAGES:
        -       LIST FMG SHIPMENT NUMBER AND BOL
        -       LIST FMG PURCHASE ORDER NUMBER
        -       LIST PURCHASER PURCHASE PO NUMBER
        -       TOTAL NUMBER OF CARTON(S) / GOH MANIFESTED
        -       TOTAL NUMBER OF CARTON(S) / GOH RECEIVED
        -       TOTAL CARTON NUMBER(S) MISSING
        -       TOTAL NUMBER RECEIVED DAMAGED
        -       LIST STYLE NUMBER(S) (EITHER CARTON OR GOH) DAMAGED
        -       3 SETS PHOTOGRAPHS ARE REQUIRED
FOR OVERAGES:
        -       LIST FMG SHIPMENT NUMBER AND BOL
        -       LIST PURCHASE ORDER NUMBER
        -       TOTAL NUMBER OF CARTON(S) / GOH MANIFESTED
        -       TOTAL NUMBER OF CARTON(S) / GOH RECEIVED
        -       TOTAL NUMBER OF OVERAGES
        -       LIST CARTON NUMBER(S) AND STYLE NUMBER(S) FOR OVERAGES
THIS PROCEDURE MUST BE FOLLOWED FOR ALL FMG ORDERS. FAILURE TO COMPLY IN GIVING
ALL REQUESTED INFORMATION WILL RESULT IN DENIAL OF ANY CLAIM BEING MADE FOR
SHORTAGES OR DAMAGES TO GOODS.

                               Exhibit B - Page 4
<PAGE>

                           NON INVOICE RELATED CLAIMS

All non invoice related claims must be pre-approved by FMG.

                      FMG RTV & VENDOR ALLOWANCE PROCEDURE

RETURN TO VENDOR
Return of merchandise will not be allowed unless an authorization number has
been obtained from the Accounting Department.

Adherence to the below procedure is essential to obtain full credit for a return
to vendor claim:

1.      The Purchaser must contact the FMG Accounting Department prior to
        returning any merchandise.
2.      The Purchaser and FMG will coordinate the return with the Vendor.
3.      The following information must be provided:
        -       Vendor Name.
        -       Purchaser's Department #
        -       Estimated cost to Purchaser
        -       Style #'s
        -       FMG PO # (if available)
        -       Brief description of reason for return
        -       Written confirmation from the Vendor (on vendor letterhead)
                authorizing the return and referencing method of payment. (i.e.,
                deduction from future payment to vendor or vendor will send
                check within 30 days of receipt of goods.).

4.      The Accounting Department will determine collectivity of claim and if
        appropriate issue an authorization number.
5.      The Purchaser must reference the FMG authorization number on the RTV
        document and ensure that a copy of the document is forwarded to FMG
        Accounting Department, 6th floor, 11 Penn Plaza, New York, NY 10001
6.      Upon receipt of the Purchaser's RTV document, FMG will prepare a charge
        (see attached) to the vendor and credit the Purchaser.

                               Exhibit B - Page 5

<PAGE>

VENDOR ALLOWANCES/REBATES

Credit for Vendor allowances and/or rebates will only be processed upon receipt
of the Vendors check or successful deduction from payment. Upon receipt of the
check or deduction, FMG will credit the Purchaser and provide a written,
numbered authorization for a deduction from payment. NO DEDUCTION MAY BE MADE
WITHOUT REFERENCING THE CORRECT AUTHORIZATION NUMBER.

FMG POLICY AND PROCEDURE FOR NON-VENDOR MARKDOWN ALLOWANCES

MARKDOWN ALLOWANCES
Credit for allowances may be processed at the discretion of FMG management who
will forward a request to Accounting for processing. Under no circumstance
should any deductions be taken prepared until an authorization number is issued
by Accounting. NO DEDUCTION MAY BE MADE WITHOUT REFERENCING THE CORRECT
AUTHORIZATION NUMBER.

                               Exhibit B - Page 6<PAGE>
                                                                   Exhibit 10.13

                              EMPLOYMENT AGREEMENT

                                     PARTIES

        This Employment Agreement (this "Agreement") dated and effective as of
August 3, 1998 (the "Effective Date"). is entered into by and between
MSS-Delaware, Inc., a Delaware corporation (the "Company"), and Julian R. Geiger
("Executive").

                               TERMS OF AGREEMENT

        In consideration of the mutual covenants in this Agreement the parties
agree as follows:

        1.      Definitions. For purposes of this Agreement the terms listed
below shall be defined as indicated.

        Acquisition Agreement: See definition of Management Certificate.

        Affiliate: A domestic or foreign business entity controlled by,
controlling, under common control with or in joint venture with, the Company,
including The Bear Stearns Companies, Inc. and its Affiliates.

        Annual Bonus: See Section 3.2

        Annual Bonus Pool: the "Annual Bonus Pool" for a period shall be 10% of
EBITDA in excess of the EBITDA Target for such period;

        Base Salary: See Section 3.1

        Board: The Board of Directors of the Company.

        Cause: See Section 5. 1.

        Company Sale: A transaction, whether in a single transaction or in a
series of related transactions pursuant to which a person or group of persons
independent of the Sponsor (a) acquires, whether by merger, stock purchase,
recapitalization, reorganization, redemption, issuance of capital stock or
otherwise, more than 50% of the outstanding Common Stock (on a fully diluted
basis as of the date of the Company Sale) or (b) acquires assets (whether by
purchase, lease or otherwise) constituting all or substantially all of the
assets of the Company or its Subsidiaries.

        Common Stock: The $.01 par value common stock of the Company.

        Confidential Information: All secret proprietary information of the
Company and its Subsidiaries, not otherwise publicly disclosed (except if
disclosed by the Executive in violation of this Agreement), whether or not
discovered or developed by Executive, known by Executive as a consequence of
Executive's employment with the Company at any time (including prior to the
commencement of this Agreement) as an employee or agent. Without limiting the

<PAGE>

generality of the foregoing, such proprietary information shall include (a)
customer lists; (b) acquisition, expansion, marketing, financial and other
business information and plans; (c) research and development; (d) computer
programs; (e) sources of supply; (f) identity of specialized consultants and
contractors and confidential information developed by them for the Company and
its Subsidiaries, (g) purchasing, operating and other cost data; (h) special
customer needs, cost and pricing data; (i) manufacturing methods; (j) quality
control information. (k) inventory techniques; (l) employee information; any of
which information is not generally known in the industries in which the Company
and its Subsidiaries are conducting business or shall at any time during
Executive Employment conduct business including (without limitation) the apparel
retailing industry. Confidential Information also includes the overall business,
Financial, expansion and acquisition plans of the Company and its Subsidiaries,
and includes information contained in manuals, memoranda, projections, minutes,
plans, drawings, designs, formula books, specifications, computer programs and
records, whether or not legended or otherwise identified by the Company and its
Subsidiaries as Confidential Information, as well as information which is the
subject of meetings and discussions and not so recorded.

              Cumulative EBITDA: As of the last day of a given period, the total
of EBITDA from the Effective Date to such last day.

              Cumulative EBITDA Achievement Ratio: As of the last day of a given
period, the ratio of Cumulative EBITDA to the Cumulative EBITDA Target as of
such date, provided that (A) if such ratio is less than 0.95, the Cumulative
EBITDA Achievement Ratio for the period shall be 0 and (B) the Cumulative EBITDA
Achievement Ratio shall not exceed 1.0.

              Cumulative EBITDA Target: As of the last day of a given period,
the total of EBITDA Targets from the Effective Date to such last day.

              Cumulative Vested Options: As of the last day of a given Vesting
Period, the total Options which have vested as of such date pursuant to Section
3.5.

              Deemed Bonus: As of a given date during a Fiscal Year, Deemed
Bonus shall mean the product of

              (a)    the ratio of:

                     (i)    the sum of the Annual Bonuses paid or payable to the
              Executive with respect to all prior Fiscal Years since the
              Effective Date (but including the Gap Period), to

                     (ii)   the sum of all the Base Salary amounts paid or
              payable to the Executive with respect to all prior Fiscal Years
              since the Effective Date (but including the Gap Period), and

              (b)    the sum of the Base Salary payments paid or payable to the
      Executive for the then current Fiscal Year through such date.

Notwithstanding the foregoing, the Deemed Bonus for any termination of the
Employment Period which occurs during the Gap Period shall be a pro-rated (based
upon the number of days

                                       2
<PAGE>

of the Cap Period during which Executive was employed) portion of the Annual
Bonus that would otherwise have been payable for the Gap Period and shall be
calculated following the Gap Period.

              Disability: The absence of the Executive from the Executive's
duties to the Company on a full-time basis for a total of 120 days during any 12
month period as a result of incapacity due to mental or physical illness which
is determined to be permanent by a physician selected by the Company and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably).

              EBITDA. EBITDA for a given period shall mean the Company's
consolidated earnings before interest. taxes, depreciation and amortization and
other non-cash charges, before management fees payable for such period to
Sponsor (or its designees) pursuant to the management agreement between the
Company and Sponsor and before any and all payments for the Prior Period Bonus
for each member of the Executive Group (as provided in Section 3.3 hereof and in
Section 3.3 of the other Employment Agreements execute d-contemporaneously
herewith) or from any and all Annual Bonus Pools and for each payment to
employees of the Company based upon the accrual therefor on the Working Capital
Balance Sheet.

              EBITDA Achievement Ratio: The EBITDA Achievement Ratio for a given
period shall be equal to the ratio of EBITDA for such period to the EBITDA
Target for such period, provided that (A) if such ratio for any period is less
than 0.95, the EBITDA Achievement Ratio for such period shall be 0 and (B) for
purposes of Section 3.5, the EBITDA Achievement Ratio for any such period shall
not exceed 1.0

              EBITDA Target: See Exhibit A.

              Employment Period: Unless earlier terminated as provided in
Section 5 hereof, the Employment Period shall be the period commencing on the
Effective Date and terminating on the last day of the 2001 Fiscal Year, provided
that the Employment Period shall automatically be extended for successive
one-year periods unless either party hereto gives notice of non-extension to the
other no later than six months prior to the end of the otherwise applicable
Employment Period.

              Executive Group: Julian R. Geiger, David R. Geltzer and John S.
Mills.

              Fair Market Value: The "Fair Market Value" of a share of Common
Stock as of a given date shall be (a) if such stock has first become publicly
traded on such date, the mean between the final bid and asked prices on the
principal exchange (or NASDAQ if applicable) on which such shares are traded on
such date as reported in the Wall Street Journal, (b) if such stock was publicly
traded prior to such date, the average over the last 20 trading days (or such
smaller number of days as follow the day prior to the day on which such stock
was first publicly traded) prior to the date of determination of the mean
between the final bid and asked prices on the principal exchange (or NASDAQ if
applicable) on which such shares are traded, as reported in the Wall Street
Journal, or (c) if such stock is not publicly traded, on the basis of an
enterprise value of the Company equal to 5 times trailing twelve month EBITDA.

                                       3
<PAGE>

              Fiscal Year: The 52 or 53 week period ending on the Saturday
closest to January 31 of each calendar year. Fiscal Years shall be referred to
herein on the basis of the calendar year which contains 11 months of such Fiscal
Year. (For example, "1998 Fiscal Year" means the twelve-month period ending
January 30, 1999).

              Gap Period: The period beginning on the Effective Date and ending
on January 30, 1999.

              Internal Rate of Return: The internal rate of return of 40% or
more per annum (taking into account of all dividends, distributions, fees and
all other amounts received by the Sponsor and its Affiliates with respect to its
investment in the equity of the Company) on the entirety of the Sponsor's
investment in the equity of the Company calculated by valuing the Common Stock
at its Fair Market Value and the Series B Preferred Stock at its stated
liquidation value, plus accumulated and accrued but unpaid dividends.

              Inventions: Those discoveries, developments. concepts and ideas,
whether or not patentable, relating to the present, future and prospective
activities and Products and Services of the Company and its Subsidiaries, which
such activities and Products and Services are known to Executive by virtue of
Executive's employment with the Company and its Subsidiaries.

              IPO: shall mean the first public offering by the Company of its
Common Stock which brings the total amount raised by the Company and sold by
stockholders of the Company in such public offerings to at least $20 million.

              Key Man Insurance: See Section 3. 8.

              Options: See Section 3.5.

              Management Certificate: shall mean those certificates delivered to
Federated Specialty Stores ("FSS") pursuant to the Acquisition Agreement dated
July 22, 1998 among FSS, Federated Department Stores and Specialty Acquisition
Corp. (the "Acquisition Agreement").

              Products-and Services: All products or services sold, rented,
leased, rendered or otherwise made available to its customers by the Company and
its Subsidiaries, or otherwise the subject of the business of the Company and
its Subsidiaries.

              Restricted Period: The period beginning on the Effective Date and
ending on the later of the termination of Executive's employment or the date all
payments to Executive under Section 6 have ceased.

              Special Bonus: See Section 3.4.

              Sponsor: MSS Acquisition Corp. II, a wholly owned subsidiary of
The Bear Stearns Companies Inc.

              Stock Option Plan: The 1998 Stock Option Plan of MSS - Delaware,
Inc.

                                       4
<PAGE>

              Stockholders Agreement: shall mean that certain "Stockholders
Agreement" dated as of the date hereof to which the Company, MSS Acquisition
Corp. II, FSS and the Executive Group are parties.

              Subsidiary: Any entity of which the Company owns, directly, or
indirectly, 50% or more of the aggregate voting power of the voting securities.

              Vested Options: Options which become vested pursuant to Sections
3.5(c) or (d).

              Vesting Period: The twelve consecutive month periods beginning,
respectively, on the first day of the first Fiscal Year following the date of
grant of Options and the first, second and third anniversaries of such first
date.

              Working Capital Balance Sheet: shall mean that "Closing Date
Balance Sheet" as such term as defined in the Acquisition Agreement.

              2.     Employment.

                     (a)    Subject to the terms and conditions of this
       Agreement, the Company hereby agrees to employ and the Executive hereby
       accepts employment in the position of Chief Executive Officer and
       Chairman of the Board of the Company and agrees during the Employment
       Period to perform to the best of Executive's ability, experience and Went
       those acts and duties and to furnish those services to the Company and
       its Subsidiaries in connection with and related to such positions as the
       Board shall from time to time direct, provided such acts and directives
       are consistent with the duties of Chief Executive Officer and Chairman of
       the Board. Executive shall, during the Employment Period, use Executive's
       best efforts to promote the interests of the Company and its
       Subsidiaries.

                     (b)    During the Employment Period, subject to Section
       5.2(c) hereof, Executive's principal place of employment shall be located
       at one of the Company's principal places of business or principal
       executive office, wherever located as designated from time to time by the
       Board, and Executive shall be provided with secretarial services, an
       office and similar support services and facilitates as appropriate to
       Executive's position and responsibilities and of at least substantially
       the same quality as provided to Executive on the Effective Date.

                     (c)    During the Employment Period, Executive shall devote
       his full business time and best efforts to the business affairs of the
       Company; however, the Executive may devote reasonable time and attention
       to:

                            (i)    serving as a director of, or member of a
              committee of the directors of. any not-for-profit organization or
              engaging in other charitable or community activities, and

                            (ii) serving as a director of, or member of a
              committee of the directors of, the corporations or organizations
              for which the Executive presently

                                       5
<PAGE>

              serves in such capacity, and such other corporations and
              organizations that the Board may from time to time approve in the
              future,

                            (iii)  from and after any date that the Company
              gives Executive a notice of non-extension described in the
              definition of "Employment Period," seeking alternative employment
              so long as such time and attention do not unreasonably detract
              from his duties hereunder,

        provided that, except as specified above, the Executive may not accept
        employment with any other individual or other entity, or engage in any
        other venture which is, indirectly or directly in conflict or
        competition with the then existing business of the Company.

              3.     Compensation and Benefits: Disability.

              3.1.   Base Salary. During the Employment Period, the Company
shall pay Executive a Base Salary at the initial annual rate of $360,000.
Provided the Cumulative EBITDA Achievement Ratio through the end of the Gap
Period is at least 1.0, Executive's Base Salary shall be increased for the 1999
Fiscal Year to $372,500. Provided the Cumulative EBITDA Achievement Ratio
through the end of the 1999 Fiscal Year is at least 1.0, Executive's Base Salary
shall be increased for the 2000 Fiscal Year to $385,000. Provided the Cumulative
EBITDA Achievement Ratio through the end of the 2000 Fiscal Year is at least
1.0, Executive's Base Salary shall be increased for the 2001 Fiscal Year to
$410,000. Any such increase in Base Salary shall only be reflected in regular
salary payments after the applicable EBITDA has been calculated, based on the
audited financial statements for the applicable fiscal period. The amount of any
increased Base Salary which has not been paid pending completion of such audited
financial statements shall be paid in a single lump sum payment at the time of
such salary payment adjustment. Except as described in the prior sentence, the
Base Salary shall be payable in equal installments pursuant to the Company's
customary payroll policies in force at the time of payment (but in no event less
frequently than monthly), less required payroll deductions. The Base Salary
shall be subject to cost of living or other increases in the sole discretion of
the Board.

              3.2.   Annual Bonus. In addition to Executive's Base Salary,
during the Employment Period the Company shall pay Executive, as soon as
reasonably practicable but in no event later than 30 days following the
Company's receipt of its audited financial statements for the applicable Fiscal
Year, an Annual Bonus in cash for each Fiscal Year which is

                     (a)    For the 1998 Fiscal Year, the sum of

                             (i)    the percentage of his Base Salary actually
               paid for the Gap Period as indicated on Exhibit A with respect to
               the EBITDA Achievement Ratio for such period; and

                             (ii)   the product of

                                   (A)    the Annual Bonus Pool for the Gap
                     Period, and

                                       6
<PAGE>

                                   (B)    the ratio of Executive's Base Salary
                     actually paid for the Gap Period to the total Base Salary
                     actually paid for the Gap Period to the Executive Group
                     (provided, however, that for purposes of this calculation
                     each member of the Executive Group shall be deemed to have
                     received no less than the Base Salary set forth for him in
                     the Employment Agreement executed by him contemporaneously
                     herewith).

                     (b)    For the 1999 Fiscal Year and each Fiscal Year
       thereafter the sum of:

                             (i)    the percentage of his Base Mary actually
              paid for such Fiscal Year indicated on Exhibit A with respect to
              the EBITDA Achievement Ratio for such period; and

                             (ii)   the product of:

                                   (A)    the Annual Bonus Pool, and

                                   (B)    the ratio of Executive's Base Salary
                     actually paid for such Fiscal Year to the total Base Salary
                     actually paid for such Fiscal Year to the Executive Group
                     (provided, however, that for purposes of this calculation
                     each member of the Executive Group shall be deemed to have
                     received no less than the Base Salary set forth for him in
                     the Employment Agreement executed by him contemporaneously
                     herewith).

An example of the operation of this Section 3.2 is set forth in Exhibit B.

              3.3.   Prior Period Bonus. Within five days following the
Effective Date, the Company shall pay to Executive in cash a bonus of $47,688.

              3.4.   Special Bonus. Whether or not Executive is employed by the
Company or its Subsidiaries, the Company shall pay to Executive, in cash upon
the first consummation of an IPO or Company Sale, a Special Bonus equal to
$82,286.

              3.5.   Stock Options. As of the Effective Date, Executive shall be
granted options (the "Options") to purchase 2,480 shares of Common Stock
pursuant to the Stock Option Plan. The Options shall be granted pursuant a
separate stock option agreement containing the following terms and other
customary terms:

                     (a)    The Options shall be exercisable at the price of
       $11.50 per share of Common Stock.

                     (b)    (i)   So long as Executive remains employed
       hereunder, Vested Options shall be exercisable upon the earlier of

                                 (A)    the fourth anniversary of the Effective

                     Date, or

                                       7
<PAGE>

                                  (B)    an IPO or Company Sale with respect to
                     which, in either case, the Internal Rate of Return on the
                     entirety of the Sponsor's investment in the equity of the
                     Company as of the Closing Date is at least equal to 35% per
                     annum,

and shall remain exercisable until the day following the eighth anniversary of
the Effective Date.

                            (ii)   Options shall not be exercisable on or
              following Executive's termination of employment pursuant to
              Section 5.1 and shall be exercisable following any other
              termination of employment only as follows:

                                  (A)    If Executive's employment is terminated
                     on or prior to the fourth anniversary of the date of grant
                     of Options, Executive (or his estate) may exercise Vested
                     Options for the 60 day period following the fourth
                     anniversary of the date of grant of such Options.

                                  (B)    If Executive's employment is terminated
                     later than the fourth anniversary of the date of grant of
                     Options, Executive (or his estate) may exercise Vested
                     Options within 60 days of the date of termination.

              (c)    So long as Executive is employed hereunder, the number of
       Options which shall vest as of the end of each Vesting Period shall be
       the greater of:

                            (i)    the product of 826 2/3 and the EBITDA
              Achievement Ratio for such year, and

                            (ii)   the excess of:

                                  (A)    the product of

                                        (1)    826 2/3,

                                        (2)    the Cumulative EBITDA Achievement
                            Ratio as of the end of such Vesting Period and

                                        (3)    the number of Vesting Periods (up
                            to three) elapsed since the date of grant; over

                                  (B)    the Cumulative Vested Options as of the
                     end of the prior Vesting Period.

Notwithstanding the preceding sentence, at the end of the Gap Period a number of
Options equal to the product of 275 5/9 and the EBITDA Achievement Ratio for the
Gap Period shall also vest and the number of Options that would have vested as
of the end of the 1999 Fiscal Year pursuant to the preceding sentence shall be
reduced by the number of Options that vest at the end of the Gap Period pursuant
to this sentence.

                                       8
<PAGE>

              (d)    Notwithstanding the foregoing, so long as Executive remains
       employed hereunder, all Options shall become vested upon the earlier of
       (i) the eighth anniversary of the date such Options were granted, or (ii)
       an IPO or Company Sale with respect to which, in either case, the
       Internal Rate of Return on the entirety of the Sponsor's investment is at
       least equal to 35% per annum.

              (e)    Upon termination of Executive's employment all unvested
       Options shall lapse. Upon the day following the last day upon which any
       Vested Option may be exercised, such Option shall lapse.

An example of the operation of this Section 3.5 is set forth in Exhibit C.

       3.6.   Other Benefits. Executive shall be entitled, during the Employment
Period, to Participate, on the same basis and to the same extent as other
executive employees of the Company, in any pension, life insurance, health
insurance, short-term disability or hospital plans or other fringe benefits or
benefit plans presently in effect and hereafter maintained or created by the
Company. In addition, Executive shall receive an automobile allowance in the
amount of $8,500 per year, payable monthly and reimbursement for actual housing
expenses incurred by Executive up to $3,000 per month, payable monthly. During
the Employment Period, Company agrees not to reduce the benefits provided to
Executive except for a reduction that is part of a Company-wide reduction in
benefits. Service with the Company, any Subsidiary, or Federated Department
Stores, Inc. ("Federated") or any affiliate of Federated shall be recognized for
vesting purposes under any benefit plan of the Company (except for the Stock
Option Plan).

       3.7.   Vacation. Executive may take such vacation period or periods
during each year as shall be consonant with Executive's responsibilities and (in
the Company's judgment) with the Company's vacation schedule and policies for
senior officers, which vacation shall be at least four weeks per calendar year.

       3.8.   Key Man Insurance; Put Option.

              (a)    During the Employment Period, the Company shall maintain
       "Key Man" term life insurance with respect to the Executive with a face
       amount equal to the lesser of (a) $4 million and (b) the amount of such
       insurance which may be purchased for an annual premium of $10,600. The
       Company shall be the beneficiary of such insurance and agrees not to
       pledge or otherwise encumber the policies or the proceeds therefrom.

              (b)    By notice to the Company given within 90 days of
       Executive's death, Executive's estate shall have the right to sell to the
       Company, and the Company shall be obligated to so purchase, at Fair
       Market Value (as of the date of Executive's death), all or such portion
       of the Common Stock owned by Executive on the date of his death as may be
       purchased with the proceeds of Executive's Key Man Insurance. The Company
       shall take any and all actions necessary promptly to collect the proceeds
       of such insurance and comply with its purchase obligation hereunder.

              (c)    At the time Executive is no longer employed by the Company
       or any of its Subsidiaries, the Company shall use its commercially
       reasonable best efforts to

                                       9
<PAGE>

       transfer such life insurance policy to Executive at the sole cost of the
       Executive and to name Executive as the beneficiary thereof.

              3.9.   Expenses. Pursuant to the Company's customary policies in
force at the time of payment, Executive shall be promptly reimbursed. against
presentation of vouchers or receipts therefor, for a authorized expenses
properly incurred by Executive on the Company's behalf in the performance of
Executive's duties hereunder. In addition, Company shall reimburse Executive for
all reasonable legal fees incurred by Executive and charged by Kirkland & Ellis
in connection with the negotiation and preparation of this Agreement.

              3.10.  Exclusive Compensation. In respect of services rendered to
the Company, Executive shall receive only the compensation set forth in this
Section 3 and Sections 5 and 6.

              4.     Termination of Employment Period. The Employment Period
shall continue as described in Section 1 unless earlier terminated by reason of
(a) Executive's discharge for Cause pursuant to Section 5.1, (b) Executive's
discharge without Cause pursuant to Section 5.4, (c) Executive's death or
Disability pursuant to Section 5.3 or (d) termination of this Agreement by
Executive pursuant to Section 5.2. In all events, the post employment provisions
of Section 7 shall survive termination of the Employment Period for the periods
provided therein.

              5.     Termination.

              5.1.   By Company for Cause. The Company may discharge Executive
and terminate the Employment Period for Cause. As used in this Section 5. 1,
"Cause" shall mean any one or more than one of the following:

                     (a)    Gross negligence or gross or willful misconduct of
       Executive in the performance of his duties hereunder during the
       Employment Period;

                     (b)    Executive's conviction of a fraud, felony or crime
       of moral turpitude during the Employment Period;

                     (c)    Willful failure to follow instructions of the Board
       which instructions are material, legal and not inconsistent with the
       duties assigned to Executive hereunder and which failure is not cured
       within 3 days after written notice of such is delivered to Executive by
       the Board with respect to failures which are curable ;or

                     (d)    any breach of any of the material terms of this
       Agreement by Executive which is not cured within 3 days after written
       notice of breach is delivered to Executive by the Board with respect to
       breaches which are curable.

Upon discharge of Executive for Cause, the Company stall be relieved and
discharged of all obligations to make payments to Executive which would
otherwise be due under this Agreement except as to salary, benefits and bonuses
earned for actual services rendered prior to the date of termination, any
payment under Section 3.4 and otherwise reimbursable expenses under Section 3.9.

                                       10
<PAGE>

              5.2.   By Executive For Good Reason. Executive may terminate the
Employment Period upon the occurrence of any of the following:

                     (a)    any breach of any of the material terms of this
       Agreement by the Company;

                     (b)    without the consent of Executive, a material
       reduction in the authorities, powers, functions and/or duties attached to
       Executive's position-,

                     (c)    without the consent of Executive, the Company
       relocates die principal location of Executive's employment to a location
       more than 25 miles from its current location, unless such relocation is
       proposed by the Chief Executive Officer.

              5.3. On Executive's Death or Disability. The Employment Period
shall terminate, and the Company shall be relieved and discharged of all
obligations to make further payment to Executive after the date of the death or
Disability of Executive, except as to salary earned for actual services rendered
prior to the date of the death or Disability of Executive, reimbursement of
expenses, payments under Section 3.4, and a pro-rata portion of Executive's
Annual Bonus for the full applicable Fiscal Year calculated following such year
and pro-rated for the number of days Executive was actually employed in such
Fiscal Year.

              5.4.   By Company Without Cause. The Company may, on 30 days'
written notice to Executive, terminate the Employment Period without Cause at
any time during the Employment Period.

              5.5.   By Executive Without Good Reason. The Executive may
terminate the Employment Period.

                     (a)    in connection with a Company Sale, or

                     (b)    at any other time,

upon ten days prior written notice to the Company. In such event described in
Section 5.5(b), the Company shall be relieved and discharged of all obligations
to make further payment to Executive after the date as of which the Employment
Period terminates, except as to salary earned for actual services rendered prior
such date, reimbursement of expenses and payments under Section 3.4.

              6.     Severance. Upon termination of employment pursuant to
Sections 5.2, 5.4 or 5.5(a) (but not upon termination of the Employment Period
pursuant to Sections 5.1, 5.3, 5.5(b) or upon expiration of the Employment
Period pursuant to notice of non-extension (as described in the definition of
"Employment Period") or otherwise), and so long as the Executive executes a
release in the Company's customary form and the Executive has not breached any
of his representations set forth in Section 8, the Company shall, in accordance
with its regular payroll practices

                     (a)    continue payment to Executive of his Base Salary
       until the latest of: (i) six months following the termination of
       Executive's employment hereunder, (ii)

                                       11
<PAGE>

       other than for terminations pursuant to Section 5.5(a), six months prior
       to the end of the otherwise applicable Employment Period (i.e., January
       26. 2002 in the case of the initial term hereof and each anniversary
       thereafter, as applicable), or (iii) if the termination is in connection
       with a Company Sale, such time as the Company elects which is not later
       than 18 months following such termination of Executive's employment, and

                     (b)    for the period of such Fiscal Year prior to the
       termination of his employment, pay Executive a Deemed Bonus.

              7.     Inventions, Confidential Information and Related-Matters.

              7.1.   Assignment of Inventions. All Inventions which are at any
time made by Executive, acting alone or in conjunction with others,

                     (a)    during the Employment Period, or

                     (b)    if based on or related to any Confidential
       Information, made by Executive within one year after the termination of
       the Employment Period,

shall be the property of the Company. Executive agrees that Executive shall, at
the cost and expense of the Company, execute formal application for U.S. and
other patents, and also do an other acts and things (including, among others,
the execution and delivery of instruments of further assurance or confirmation)
deemed by the Company to be necessary or desirable at any time to perfect the
full assignment to the Company of Executive's right and title (if any) to such
Inventions.

              7.2.   Restrictions on Use and Disclosure. Except as required by
Executive's duties hereunder, Executive shall never, directly or indirectly,
use, publish, disseminate or otherwise disclose any Confidential Information or
Inventions which are the subject of Section 7.1 without the prior written
consent of the Board, except as required by law. Nothing in this Section shall
prevent disclosure of information which has been completely disclosed in a
published patent or other integrated publication of general circulation nor
shall this Section govern the right to use Inventions for which a patent may
have been issued.

              7.3.   Return of Documents and Materials. Upon termination of the
Employment Period, Executive shall forthwith deliver to the Company all
procedural manuals, guides, specifications, formulas, plans, drawing, designs
and similar materials, records, notebooks and similar repositories of or
containing Confidential Information and Inventions which are the subject of
Section 7.1, including all copies, then in Executive's possession or control,
whether prepared by Executive or others, as well as all other Company property
in Executive's possession or control.

              7.4.   Competitive Activities. During the -Restricted Period,
Executive shall not, without the prior written approval of the Board, directly
or indirectly, within the United states, become an employee or consultant or
otherwise render services to, lend funds to, serve on the board of, invest in
(other than as a 1% or less shareholder of a publicly-traded corporation) or
guarantee the debts of, any business organization that competes with the Company
in those businesses in which the Company and its Subsidiaries are engaged on the
date the Employment

                                       12
<PAGE>

Period is terminated. The Company may in its sole discretion give Executive
written approval to engage in such activities or render such services after
termination of the Employment Period if Executive and such prospective firm or
business organization gives the Company written assurances, satisfactory to the
Board in its sole discretion, that the integrity of the Confidential
Information, the Inventions and the good will of the Company and its
Subsidiaries will not be jeopardized by such employment. Executive shall, during
the Restricted Period, notify the Company of any change in address and identify
each subsequent employment or business activity in which Executive shall engage
during such Restricted Period, stating the name and address of the employer or
business organization and the nature of Executive's position.

              7.5.   Solicitation of Employees. During the Restricted Period and
for a period of 12 months thereafter, Executive shall not, without the prior
written approval of the Board, directly or indirectly, solicit, raid, entice or
induce any person who presently is or at any time during the term hereof shall
be an employee, of the Company or any of its Subsidiaries to become employed by
any other person, firm or corporation in any business in competition with the
Company.

              8.     No Other Contracts. Executive represents and warrants that
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of Executive's obligations hereunder, shall constitute
a default under or a breach of the terms of any other agreement, indenture or
contract to which Executive is a party or by which Executive is bound. nor shall
the execution and delivery of this Agreement by Executive or the performance of
Executive's duties and obligations hereunder give rise to any claim or charge
against either Executive or the Company based upon any other contract, indenture
or agreement to which Executive is a party or by which Executive is bound.

              9.     Notices. Any notices or communication given by any party
hereto to the other part), shall be in writing, and personally delivered or
mailed by registered or certified mail, return receipt requested, postage
prepaid at the following addresses.

                             If to the Company:

                             11 Penn Plaza
                             6th Floor
                             New York, NY 10001

                             If to the Executive:

                             Julian R. Geiger
                             7 Chowning Drive
                             Malverne, PA 19355

        Mailed notices shall be deemed given when received. Any person entitled
to receive notice may designate in writing, by notice to the others, such other
address to which notices to such party shall thereafter be sent.

                                       13
<PAGE>

              10.    Indemnification and Insurance; Legal Expenses.

                     (a)    The Company shall indemnify the Executive to the
       fullest extent permitted by the laws of the State of Delaware, as in
       effect at the time of the subject act or omission, and shall advance to
       the Executive reasonable attorney's fees and expenses as such fees and
       expenses arc incurred (subject to an undertaking from the Executive to
       repay such advances if it shall be finally determined by a judicial
       decision which is not subject to further appeal that the Executive was
       not entitled to the reimbursement of such fees and expenses) and he will
       be entitled to the protection of any insurance policies the Company may
       elect to maintain generally for the benefit of its directors and officers
       (Directors and Officers Insurance) against all costs, charges and
       expenses incurred or sustained by him in connection with any action, suit
       or proceeding to which he may be made a party by reason of his being or
       having, been a director, officer or employee of the Company or any of its
       Subsidiaries or his serving or having served any other enterprise as a
       director, officer or employee at the request of the Company (other than
       any dispute, claim or controversy arising under or relating to this
       Agreement or to the extent a result of a breach by Executive of his
       representations in Section 8). The Company covenants to maintain during
       the Employment Period for the benefit of the Executive (in his capacity
       as an officer and director of the Company) Directors and Officers
       Insurance providing customary benefits to the Executive; provided,
       however, that the Board may elect to terminate Directors and Officers
       Insurance for all officers and directors, including the Executive, if a
       majority of the Board (excluding employee directors) determines in good
       faith that such insurance is not available or is available only at
       unreasonable expense.

                     (b)    Company shall indemnify Executive for any claims
       brought against Executive in respect of the Management Certificate and.
       subject to the following sentence, shall, at the request of the
       Executive, advance reasonable legal fees for Executive's defense thereof.
       Company's obligation shall be conditioned upon Executive's written
       agreement to repay all of such fees if he should ultimately be found
       liable in connection with any such claim and further conditioned upon
       Executive's pledging his interest in the equity of the Company (pursuant
       to documents containing customary terms) as security for such repayment
       obligation, unless Executive demonstrates to tile reasonable satisfaction
       of the Board his ability to repay such amounts without such security
       interest.

                     (c)    After the Employment Period, each party to this
       Agreement shall bear its own costs and expenses in connection with any
       claim or action with respect to acts and omissions.

              11.    Miscellaneous.

              11.1.  Entire Agreement. This Agreement, together with thc
Options, the Stock Option Plan, and the Stockholders Agreement contains the
entire understanding of the parties in respect of its subject matter and
supersedes all prior oral and written agreements and understandings between the
parties with respect to such subject matter.

                                       14
<PAGE>

              11.2.  Amendment; Waiver. This Agreement may not be amended,
supplemented, canceled or discharged, except by written instrument executed by
the Executive and the Company. No failure to exercise, and no delay in
exercising, any right, power or privilege hereunder shall operate as a waiver
thereof. No waiver of any preceding breach of this Agreement shall operate as a
waiver of a succeeding breach of this Agreement.

              11.3.  Binding Effect; Assignment. The rights and obligations of
this Agreement shall bind and inure to the benefit of any successor or
successors of the Company by reorganization, merger or consolidation, or any
assignee of all or substantially all of the Company's business and properties;
Executive's rights or obligations under this Agreement may not be assigned by
Executive.

              11.4.  Headings. The headings contained in this Agreement (except
those in Section 1) are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.

              11.5.  Governing Law; Interpretation. This Agreement shall be
construed in accordance with and governed for all purposes by the laws and
public policy of the State of New York applicable to contracts executed and to
be wholly performed within such State. Service of process in any dispute shall
be effective (a) upon the Company, if served on any senior officer of the
Company (other than Executive); (b) upon Executive, if served at Executive's
residence last known to the Company. Executive acknowledges that breach of
Sections 7.1 through 7.5 would entail irreparable injury and that, in addition
to the Company's other express and implied remedies, the Company shall be
entitled to injunctive and other equitable relief to prevent any actual intended
or likely such breach.

              11.6.  Dispute Resolution. All controversies, claims and disputes
arising out of or relating to this Agreement including without limitation any
alleged violation of its terms, shall be resolved by final and binding
arbitration before a single arbitrator in New York, New York in accordance with
the Commercial Arbitration Rules of the American Arbitration Association
("AAA"). The arbitration shall be commenced by filing a demand for arbitration
with the AAA within sixty days after the filing party has given notice of such
breach to the other party. The subject matter of the arbitration shall be
limited to the conduct of the parties hereto and their employees. The arbitrator
shall award the prevailing party attorneys' fees. as well as the costs and
expenses of the arbitration, including expert fees, if any.

              11.7.  Further Assurances. Each party agrees at any time, and from
time-to-time, to execute, acknowledge, deliver and perform, and/or cause to be
executed, acknowledged, delivered and performed, all such further acts, deeds
assignments, transfers, conveyances, powers of attorney and/or assurances as may
be necessary, and/or proper to carry out the provisions and/or intent of this
Agreement.

              11.8.  Gender-Singular/Plural. In this Agreement, the use of one
genders (e.g., "he", "she" and "it") shall mean each other gender; and the
singular shall mean the plural, and vice versa, all as the context may require.

                                       15
<PAGE>

              11.9.  Severability. The parties acknowledge that the terms of
this Agreement are fair and reasonable at the date signed by them, However, in
light of the possibility of a change of conditions or differing interpretations
by a court of what i3 fair and reasonable, the parties stipulate as follows: if
any one or more of the terms, provisions, covenants restrictions of this
Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms. provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected impaired or invalidated; further, if any
one or more of the provisions contained in this Agreement shall for any reason
be determined by a court of competent jurisdiction to be excessively broad as to
duration, geographical scope, activity or subject, it shall be construed, by
limiting or reducing it, so as to be enforceable to the extent compatible with
then applicable law.

              11.10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.

                                    EXECUTION

              IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year above first written.

                                        EXECUTIVE

                                        /s/ Julian Geiger
                                        ------------------------------------
                                        JULIAN R. GEIGER

                                        MSS-DELAWARE, INC.
                                        a Delaware Corporation

                                        By: /s/ David Geltzer
                                           ---------------------------------

                                       16
<PAGE>

                                    EXHIBIT A

                                 EBITDA TARGETS
                                   (IN '000'S)

<TABLE>
<CAPTION>
                    FISCAL YEAR                   TARGET
               -----------------------   ------------------------
             <S>                              <C>
               Gap Period                        $10,993
               1999                              $ 8,842
               2000                              $13,952
               2001                              $20,726
               2002                              $26,486
               2003 and thereafter, as determined by the Board.
</TABLE>

<TABLE>
<CAPTION>

                                   ANNUAL BONUS
             ------------------------------------------------------------
               EBITDA ACHIEVEMENT RATIO     PERCENTAGE OF BASE SALARY
             ---------------------------  -------------------------------

                      <S>                                 <C>
                         0.95                               10%
                         0.955                              11%
                         0.96                               12%
                         0.965                              13%
                         0.97                               14%
                         0.975                              15%
                         0.98                               16%
                         0.985                              17%
                         0.99                               18%
                         0.995                              19%
                         1.0                                20%
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}]]