10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 28, 2006

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 1-32545

DSW INC.

(Exact name of registrant as specified in its charter)

Ohio	31-0746639
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)
4150 East 5th Avenue Columbus, Ohio	43219
(Address of principal executive offices)	(Zip Code)

(614) 237-7100Registrant’s telephone number, including area code

Not applicable(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes þ No

The number of outstanding Class A Common Shares, without par value, as of November 30, 2006 was 16,221,950 and Class B Common Shares, without par value, as of November 30, 2006 was 27,702,667.

DSW INC.

TABLE OF CONTENTS

		Page No.
Part I. Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets at October 28, 2006 and January 28, 2006		3
	Condensed Consolidated Statements of Income for the three and nine months ended October 28, 2006 and October 29, 2005		4
	Condensed Consolidated Statements of Shareholders’ Equity for the nine months ended October 28, 2006 and October 29, 2005		5
	Condensed Consolidated Statements of Cash Flows for the nine months ended October 28, 2006 and October 29, 2005		6
	Notes to the Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		31
Item 4.	Controls and Procedures		31
Part II. Other Information
Item 1.	Legal Proceedings		32
Item 1A.	Risk Factors		33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		34
Item 3.	Defaults Upon Senior Securities		35
Item 4.	Submission of Matters to a Vote of Security Holders		35
Item 5.	Other Information		35
Item 6.	Exhibits		35
Signature			36
Index to Exhibits			37
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-10.5
EX-10.6
EX-10.7
EX-31.1
EX-31.2
EX-32.1
EX-32.2

-2-

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

DSW INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(unaudited)

	October 28,		January 28,
	2006		2006
ASSETS
Cash and equivalents	$	97,191	$	124,759
Short-term investments		75,350
Accounts receivable, net		3,735		4,039
Receivables from related parties		5,829		49
Inventories		235,047		216,698
Prepaid expenses and other assets		15,487		13,981
Deferred income taxes		19,740		18,591
Total current assets		452,379		378,117
Property and equipment, net		102,793		95,921
Goodwill		25,899		25,899
Tradenames and other intangibles, net		5,568		6,216
Deferred income taxes and other assets		2,681		1,562
Total assets	$	589,320	$	507,715
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	86,499	$	78,889
Accounts payable to related parties		8,705		6,631
Accrued expenses:
Compensation		11,175		9,933
Taxes		18,095		9,557
Advertising		11,409		8,586
Other		24,155		25,993
Total current liabilities		160,038		139,589
Noncurrent liabilities		72,244		63,410
Commitments and contingencies
Shareholders’ equity:
Class A Common Shares, no par value; 170,000,000 authorized; 16,221,950 and 16,190,088 issued and outstanding, respectively		282,170		281,119
Class B Common Shares, no par value; 100,000,000 authorized; 27,702,667 and 27,702,667 issued and outstanding, respectively
Preferred Shares, no par value; 100,000,000 authorized; no shares issued or outstanding
Retained earnings		74,868		26,007
Deferred compensation				(2,410	)
Total shareholders’ equity		357,038		304,716
Total liabilities and shareholders’ equity	$	589,320	$	507,715

The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.

-3-

DSW INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)

	Three months ended						Nine months ended
	October 28,			October 29,			October 28,			October 29,
	2006			2005			2006			2005
Net sales	$	332,219		$	302,240		$	950,008		$	860,257
Cost of sales		(233,544	)		(219,221	)		(672,944	)		(618,077	)
Gross profit		98,675			83,019			277,064			242,180
Operating expenses		(73,451	)		(65,292	)		(200,854	)		(188,712	)
Operating profit		25,224			17,727			76,210			53,468
Non-related parties interest expense		(145	)		(140	)		(428	)		(2,161	)
Related parties interest expense											(6,592	)
Total interest expense		(145	)		(140	)		(428	)		(8,753	)
Interest income		1,708			289			5,290			369
Interest income (expense), net		1,563			149			4,862			(8,384	)
Earnings before income taxes		26,787			17,876			81,072			45,084
Income tax provision		(10,786	)		(6,965	)		(32,211	)		(17,942	)
Net income	$	16,001		$	10,911		$	48,861		$	27,142
Basic and diluted earnings per share:
Basic	$	0.36		$	0.25		$	1.11		$	0.78
Diluted	$	0.36		$	0.25		$	1.11		$	0.77
Shares used in per share calculations:
Basic		43,922			43,891			43,909			34,994
Diluted		44,226			44,066			44,193			35,080

The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.

4

DSW INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands)
(unaudited)

	Number of
	Class A		Class B		Class A			Class B						Deferred
	Common		Common		Common			Common			Retained			Compensation
	Shares		Shares		Shares			Shares			Earnings			Expense			Total
Balance, January 29, 2005				27,703				$	101,442		$	77,384					$	178,826
Sale of stock		16,172			$	277,937												277,937
Net income												27,142						27,142
Dividend to parent									(101,442	)		(88,558	)					(190,000	)
Restricted stock units granted						1,887								$	(1,887	)
Amortization of deferred compensation expense															158			158
Stock units granted		16				422												422
Exercise of stock options		1				23												23
Balance, October 29, 2005		16,189		27,703	$	280,269		$	0		$	15,968		$	(1,729	)	$	294,508
Balance, January 28, 2006		16,190		27,703	$	281,119		$	0		$	26,007		$	(2,410	)	$	304,716
Net income											$	48,861						48,861
Reclassification of unamortized deferred compensation					$	(2,410	)							$	2,410
Stock units granted		10				291												291
Exercise of stock options		22				416												416
Tax benefit related to stock options exercised						93												93
Stock based compensation expense, before related tax effects						2,661												2,661
Balance, October 28, 2006		16,222		27,703	$	282,170		$	0		$	74,868		$	0		$	357,038

The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.

5

DSW INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Nine months ended
	October 28,			October 29,
	2006			2005
Cash flows from operating activities:
Net income	$	48,861		$	27,142
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		14,201			14,229
Amortization of debt issuance costs		88			582
Amortization of deferred compensation expense					158
Stock based compensation expense		2,661
Deferred income taxes		(2,077	)		2,223
Loss on disposal of assets		1,346			250
Grants of director stock units		291			422
Change in working capital, assets and liabilities:
Accounts receivable		304			(14,985	)
Accounts receivable from related parties		(5,780	)		(14,779	)
Inventories		(18,349	)		(21,372	)
Prepaid expenses and other assets		(1,785	)		(6,962	)
Advances to/from affiliates					23,676
Accounts payable		7,982			(3,789	)
Proceeds from lease incentives		4,315			8,972
Other noncurrent liabilities		4,519			2,100
Accrued expenses		10,677			18,293
Net cash provided by operating activities		67,254			36,160
Cash flows from investing activities:
Cash paid for property and equipment		(19,981	)		(19,850	)
Proceeds from sale of assets					26
Purchases of available-for-sale investments		(150,400	)
Maturities and sales from available-for-sale investments		75,050
Net cash used in investing activities		(95,331	)		(19,824	)
Cash flows from financing activities:
Proceeds from sale of stock					277,937
Proceeds from exercise of stock options		416			23
Excess tax benefit — related to stock option exercises		93
Payment of note to parent					(190,000	)
Net decrease in revolving credit facility					(55,000	)
Debt issuance costs					(570	)
Net cash provided by financing activities		509			32,390
Net (decrease) increase in cash and equivalents		(27,568	)		48,726
Cash and equivalents, beginning of period		124,759			8,339
Cash and equivalents, end of period	$	97,191		$	57,065

The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.

6

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. BUSINESS OPERATIONS

DSW Inc. (“DSW”) and its wholly-owned subsidiaries, including DSW Shoe Warehouse, Inc. (“DSWSW”) and Brand Technology Services LLC (“BTS”), are herein referred to collectively as DSW or the “Company”. Prior to December 2004, DSW was a wholly-owned subsidiary of Value City Department Stores, Inc., a wholly-owned subsidiary of Retail Ventures, Inc. (“RVI” or “Retail Ventures”). In December 2004, RVI completed a corporate reorganization whereby Value City Department Stores, Inc. merged with and into Value City Department Stores, LLC (“Value City”), another wholly-owned subsidiary of RVI. In turn, Value City transferred all of the issued and outstanding shares of DSW to RVI in exchange for a promissory note. On June 29, 2005, DSW commenced an initial public offering (“IPO”) that closed on July 5, 2005. DSW’s Class A Common Stock is listed on the New York Stock Exchange trading under the symbol “DSW”.

DSW operates in two segments (DSW stores and leased departments) and sells branded footwear in both. DSW stores also sell accessories. As of October 28, 2006, DSW operated a total of 215 stores located throughout the United States as a segment. DSW stores offer a wide selection of brand name and designer dress, casual and athletic footwear for men and women. DSW also operates leased shoe departments for three non-affiliated retailers and one affiliated retailer in its leased department segment. DSW entered into supply agreements to merchandise the non-affiliated shoe departments in Stein Mart, Inc. (“Stein Mart”), Gordmans, Inc. (“Gordmans”) and Frugal Fannie’s Fashion Warehouse (“Frugal Fannie’s”). DSW has operated leased shoe departments for Filene’s Basement, Inc. (“Filene’s Basement”), a wholly-owned subsidiary of RVI, since its acquisition by RVI in March 2000. DSW owns the merchandise until the merchandise is sold, records sales of merchandise net of returns and sales tax, owns the fixtures (except for Filene’s Basement) and provides supervisory assistance in these covered locations. DSW receives a percentage of the net revenue generated from the sales of the merchandise. Stein Mart, Gordmans, Frugal Fannie’s and Filene’s Basement provide the sales associates. DSW pays a percentage of net sales as rent. As of October 28, 2006, DSW supplied 162 leased departments for Stein Mart, 62 for Gordmans, 29 for Filene’s Basement and one for Frugal Fannie’s. During the nine months ended October 28, 2006, DSW opened 20 new DSW stores, closed four stores, ceased operations in five leased departments, and added 21 new leased departments.

On May 30, 2006, the Company entered into an Amended and Restated Supply Agreement (the “Agreement”) to supply shoes to Stein Mart. Under the terms of the Agreement, the Company will be the exclusive supplier of shoes to all Stein Mart stores that have shoe departments. Under the Agreement, DSW will be supplying shoes to an additional 102 Stein Mart stores by the end of the fiscal fourth quarter of 2006.

2. OWNERSHIP

On July 5, 2005, DSW closed on its initial public offering (“IPO”) of 16,171,875 Class A Common Shares raising net proceeds of $285.8 million, net of the underwriters’ commission and before expenses of approximately $7.8 million. DSW used the net proceeds of the offering to repay $196.6 million of intercompany indebtedness, including interest, owed to RVI and for working capital and general corporate purposes, including the paying down of $20.0 million outstanding on RVI’s old secured revolving credit facility and a $10.0 million

7

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

intercompany advance. The 410.09 common shares of DSW held by RVI outstanding at January 29, 2005 were changed to 27,702,667 Class B Common Shares. It is the 27,702,667 Class B Common Shares which are being used in the prior period’s calculation of earnings per share. Subsequent to the IPO, the transactions between DSW and RVI and its other subsidiaries are settled in accordance with a shared services agreement and result in the advances from affiliates being classified as a current receivable or payable, as appropriate. On October 28, 2006, RVI owned approximately 63.1% of DSW’s outstanding Common Shares, representing approximately 93.2% of the combined voting power of DSW’s outstanding Common Shares.

     Premium Income Exchangeable Securities^SM (PIES)

On August 10, 2006, RVI announced the pricing of its 6.625% Mandatorily Exchangeable Notes due September 15, 2011, or PIES (Premium Income Exchangeable Securities^SM) in the aggregate principal amount of $143,750,000. The closing of the transaction took place during the third quarter of fiscal 2006.

Except to the extent RVI exercises its cash settlement option, the PIES are mandatorily exchangeable, on the maturity date, into Class A Common Shares of DSW, no par value per share, which are issuable upon exchange of DSW Class B Common Shares, no par value per share, beneficially owned by RVI. On the maturity date, each holder of the PIES will receive a number of DSW Class A Common Shares per $50 principal amount of PIES equal to the “exchange ratio” described in the offering prospectus, or if RVI elects, the cash equivalent thereof or a combination of cash and DSW Class A Common Shares. The settlement of the PIES will not change the number of DSW Common Shares outstanding.

3. BASIS OF PRESENTATION

The accompanying unaudited interim financial statements should be read in conjunction with DSW’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on April 13, 2006 (the “2005 Annual Report”).
In the opinion of management, the unaudited interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the consolidated financial position and results of operations for the periods presented.

4. ADOPTION OF ACCOUNTING STANDARDS

The Financial Accounting Standards Board (“FASB”) periodically issues Statements of Financial Accounting Standards (“SFAS”), some of which require implementation by a date falling within or after the close of the fiscal year.

In December 2004, the FASB issued SFAS No. 123 (revised 2004) Share-Based Payment (“SFAS No. 123R”). This statement revised SFAS No. 123, Accounting for Stock-Based Compensation, (“SFAS No. 123”) and requires a fair value measurement of all stock-based payments to employees, including grants of employee stock options and recognition of those expenses in the statements of operations. SFAS No. 123R establishes standards for the

8

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

accounting for transactions in which an entity exchanges its equity instruments for goods and services and focuses on accounting for transactions in which an entity obtains employee services in share-based payment transactions. In addition, SFAS No. 123R requires the recognition of compensation expense over the period during which an employee is required to provide service in exchange for an award. Effective January 29, 2006, DSW adopted SFAS No. 123R. The impact of adoption to DSW’s results of operations is presented in Note 5.

In May 2005, the FASB issued FASB Statement No. 154, Accounting Changes and Error Corrections — a replacement of APB Opinion No. 20 and FASB Statement No. 3 (“SFAS No. 154”). SFAS No. 154 changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The adoption of this new pronouncement in fiscal 2006 was not material to DSW’s financial condition, results of operations or cash flows.

In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (“FIN 48”) which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No.109, Accounting for Income Taxes. The evaluation of a tax position in accordance with FIN 48 is a two step process. The first step is recognition: The enterprise determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is measurement: A tax position that meets the more likely than not recognition threshold is measured to determine that amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. FIN 48 provides for a cumulative effect of a change in accounting principle to be recorded upon the initial adoption. This interpretation is effective for fiscal years beginning after December 15, 2006. DSW does not believe the interpretation will have a material impact on its consolidated financial statements.

In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. The intent of this standard is to ensure consistency and comparability in fair value measurements and enhanced disclosures regarding the measurements. This statement is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. DSW is currently evaluating the impact this statement may have on its consolidated financial statements.

In September 2006, the FASB issued FASB Statement No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans- an amendment of FASB Statements No. 87, 88, 106, and 132(R), (“SFAS No. 158”) which requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded statues in the year in which the changes occur through comprehensive income of a business entity. This statement also requires the employer to measure the funded status of the plan as of the date of its year-end statement of financial position. The employer still must disclose any additional information about certain affects of net periodic benefit cost for the

9

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation in the notes to the financial statements. This statement is effective for fiscal years beginning after December 15, 2006. DSW is currently evaluating the impact this interpretation may have on its consolidated financial statements.

In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 provides guidance on how prior year misstatements should be taken into consideration when quantifying misstatements in current year financial statements for purposes of determining whether the current year’s financial statements are materially misstated. SAB 108 is effective for fiscal years ending after November 15, 2006. DSW is currently assessing the potential impact that the adoption of SAB No. 108 will have on its financial statements; the impact is not expected to be material.

5. STOCK BASED COMPENSATION

DSW has a 2005 Equity Incentive Plan that provides for the issuance of equity awards to purchase up to 4,600,000 common shares, including stock options and restricted stock units to management, key employees of DSW and affiliates, consultants (as defined in the plan), and directors of DSW. Options generally vest 20% per year on a cumulative basis from the date of grant. Options granted under the 2005 Equity Incentive Plan generally remain exercisable for a period of ten years from the date of grant. Prior to fiscal 2005, DSW did not have a stock option plan or any equity units outstanding.

On January 29, 2006, DSW adopted the fair value recognition provisions of SFAS No. 123R relating to its stock-based compensation plans. Prior to January 29, 2006, DSW had accounted for stock-based compensation in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations (“APB 25”). In accordance with APB 25, compensation expense for employee stock options was generally not recognized for options granted that had an exercise price equal to the market value of the underlying common shares on the date of grant.

Under the modified prospective method of SFAS No. 123R, compensation expense was recognized during the nine months ended October 28, 2006, for all unvested stock options, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and for all stock based payments granted after January 29, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123R. Stock-based compensation expense of approximately $1.1 million and $2.7 million, respectively, was recorded in operating expenses in the condensed consolidated statements of income for the three and nine month periods ending October 28, 2006. DSW’s financial results for the prior periods have not been restated as a result of this adoption.

Prior to the adoption of SFAS No. 123R, DSW presented all tax benefits of deductions resulting from the exercise of stock options as operating cash flows in the condensed consolidated statements of cash flows. During the nine months ended October 29, 2005, the tax benefits were less than $0.1 million. Beginning in fiscal 2006 with the adoption of SFAS

10

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

No. 123R, the cash flows resulting from the tax benefits resulting from tax deductions in excess of compensation expense recognized for those options (excess tax benefits) are classified as financing cash flows.

Consistent with the valuation method used for the disclosure only provisions of SFAS No. 123, DSW uses the Black-Scholes option-pricing model to value stock-based compensation expense. This model assumes that the estimated fair value of options is amortized over the options’ vesting periods and the compensation costs are included in operating expenses in the condensed consolidated statements of income. DSW recognizes compensation expense for stock option awards granted subsequent to the adoption of SFAS No. 123R and time-based restricted stock awards on a straight-line basis over the requisite service period of the award. Compensation expense for stock option awards granted prior to the adoption of SFAS No. 123R is recorded based upon the accrual basis.

The following table illustrates the pro forma effect on net income and income per share for the three and nine months ended October 29, 2005 if the Company had applied the fair value recognition of SFAS No. 123.

	Three months ended			Nine months ended
	October 29, 2005			October 29, 2005
	(in thousands, except per share amounts)
Net income, as reported	$	10,911		$	27,142
Add: Stock-based employee compensation expense included in reported net income, net of tax		70			94
Deduct: Total stock-based employee compensation benefit (expense) determined under fair value based method for all awards, net of tax		(628	)		(839	)
Pro forma net income	$	10,353		$	26,397
Income per share:
Basic as reported	$	0.25		$	0.78
Diluted as reported	$	0.25		$	0.77
Basic pro forma	$	0.24		$	0.75
Diluted pro forma	$	0.23		$	0.75

     Stock Options

Forfeitures of options are estimated at the grant date based on historical rates of RVI’s stock option activity and reduce the compensation expense recognized. The expected term of options granted is derived from historical data of RVI’s stock options due to the limited historical data on DSW stock activity. The risk-free interest rate is based on the yield for U.S. Treasury securities with a remaining life equal to the five year expected term of the options at the grant date. Expected volatility is based on the historical volatility of the DSW Common Shares combined with the historical volatility of three similar companies’ common shares, due to the relative short historical trading history of the DSW Common Shares. The expected dividend yield curve is zero, which is based on DSW’s intention of not declaring dividends to shareholders combined with the limitations on declaring dividends as set forth in DSW’s credit facility.

The following table illustrates the weighted-average assumptions used in the option-pricing model for options granted in each of the periods presented.

	Nine months ended
	October 28,			October 29,
	2006			2005
Assumptions
Risk-free interest rate		4.6	%		4.4	%
Expected volatility of DSW common stock		40.5	%		37.7	%
Expected option term	5 years			5 years

The weighted-average fair value of each option granted for the three months ended October 28, 2006 and October 29, 2005 was $11.76 and $9.56 per share, respectively, and for the nine months ended October 28, 2006 and October 29, 2005 was $12.93 per share and $8.14 per share, respectively.

The following table summarizes DSW’s stock option plans and related Weighted Average Exercise Prices (“WAEP”) for the three and nine months ended October 28, 2006 (shares and aggregate intrinsic value in thousands):

11

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

	Three months ended					Nine months ended
	October 28, 2006					October 28, 2006
	Shares			WAEP		Shares			WAEP
Outstanding beginning of period		1,042		$	21.48		914		$	19.54
Granted		71		$	27.99		254		$	29.77
Exercised		(3	)	$	19.00		(22	)	$	19.00
Forfeited		(4	)	$	20.08		(40	)	$	19.11
Outstanding end of period		1,106		$	21.91		1,106		$	21.91

	As of October 28, 2006
					Weighted
					Average	Aggregate
					Remaining	Intrinsic
	Shares		WAEP		Contract Life	Value
Options outstanding		1,106	$	21.91	9 Years	$	14,417
Options exercisable		146	$	19.05	9 Years	$	2,317
Shares available for additional grants		3,300

The aggregate intrinsic value is calculated as the amount by which the fair value of the underlying common shares exceeds the option exercise price. The total intrinsic value of options exercised during the three and nine months ended October 28, 2006 was less than $0.1 million and $0.3 million, respectively.

As of October 28, 2006, the total compensation cost related to nonvested options not yet recognized was approximately $5.1 million with a weighted average expense recognition period remaining of 4.0 years. The total fair value of options that vested during the three and nine months ended October 28, 2006 was less than $0.1 million and $1.1 million, respectively.

The following table summarizes information about options outstanding as of October 28, 2006 (shares in thousands):

	Options Outstanding					Options Exercisable
			Weighted
			Average
			Remaining
			Contract
Range of Exercise Prices	Shares		Life	WAEP		Shares		WAEP
$19.00—$20.00		768	9 years	$	19.00		144	$	19.00
$20.01—$25.00		73	9 years	$	24.52		2	$	23.58
$25.01—$30.00		168	10 years	$	27.94
$30.01—$35.00		67	10 years	$	31.16
$35.01—$36.00		30	10 years	$	35.79

12

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Restricted Stock Units

Restricted stock units generally cliff vest at the end of four years from the date of grant and are settled immediately upon vesting. Restricted stock units granted to employees that are subject to the risk of forfeiture are not included in the computation of basic earnings per share.

Compensation cost is measured at fair value on the grant date and recorded over the vesting period. Fair value is determined by multiplying the number of units granted by the grant date market price. The total aggregate intrinsic value of nonvested restricted stock units at October 28, 2006 was $5.0 million and the weighted average remaining contractual life was three years. As of October 28, 2006, the total compensation cost related to nonvested restricted stock units not yet recognized was approximately $2.2 million with a weighted average expense recognition period remaining of 2.6 years.

The following table summarizes DSW’s restricted stock units and related WAEP for the three and nine months ended October 28, 2006 (shares in thousands):

	Three months ended				Nine months ended
	October 28, 2006				October 28, 2006
	Shares		WAEP		Shares			WAEP
Outstanding beginning of period		144	$	21.80		131		$	20.46
Granted						20		$	30.34
Exercised Forfeited						(7	)	$	19.00
Outstanding end of period		144	$	21.80		144		$	21.80

     Director Stock Units

DSW issues stock units to directors who are not employees of DSW or RVI. During the three and nine months ended October 28, 2006, DSW granted 394 and 9,982 director stock units, respectively, and expensed less than $0.1 million and $0.3 million respectively, related to these grants. During the three and nine months ended October 29, 2005, DSW granted 1,003 and 16,503 director stock units, respectively, and expensed less than $0.1 million and $0.4 million, respectively, related to these grants. Stock units are automatically granted to each director who is not an employee of DSW or RVI on the date of each annual meeting of shareholders for the purpose of electing directors. The number of stock units granted to each non-employee director is calculated by dividing one-half of the director’s annual retainer (excluding any amount paid for service as the chair of a board committee) by the fair market value of a share of the DSW Class A Common Shares on the date of the meeting. In addition, each director eligible to receive compensation for board service may elect to have the cash portion of such directors compensation paid in the form of stock units. Stock units granted to directors vest immediately and are settled upon the director terminating service from the board. Stock units granted to directors which are not subject to forfeiture are considered to be outstanding for the purposes of computing basic earnings per share. As of October 28, 2006, 26,995 director stock units had been issued and no director stock units had been settled.

13

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

6. EARNINGS PER SHARE

Basic earnings per share are based on net income and a simple weighted average of Class A and Class B Common Shares and director stock units outstanding. Diluted earnings per share reflect the potential dilution of Class A Common Shares related to outstanding stock options and restricted stock units. The numerator for the diluted earnings per share calculation is net income. The denominator is the weighted average diluted shares outstanding.

	Three months ended				Nine months ended
	October 28,		October 29,		October 28,		October 29,
	2006		2005		2006		2005
	(in thousands)
Weighted average shares outstanding		43,922		43,891		43,909		34,994
Assumed exercise of dilutive stock options		160		76		148		41
Assumed exercise of dilutive restricted stock units		144		99		136		45
Number of shares for computation of dilutive earnings per share		44,226		44,066		44,193		35,080

For the three and nine months ended October 28, 2006 and October 29, 2005, all potentially dilutive stock options were dilutive.

7. INVESTMENTS

Short-term investments include investment grade variable-rate debt obligations and auction rate securities and are classified as available-for-sale securities. These securities are recorded at cost, which approximates fair value due to their variable interest rates, which typically reset every 7 to 182 days, and despite the long-term nature of their stated contractual maturities, DSW has the intent and ability to quickly liquidate these securities. Because the fair value approximates the cost, there are no accumulated unrealized holding gains or losses in other comprehensive income from these investments. All income generated from these investments is recorded as interest income.

During the three and nine months ended October 28, 2006, $81.4 million and $150.4 million of cash, respectively, was used to purchase available-for-sale securities while $53.0 million and $75.1 million of cash, respectively, was generated by the sale of available-for-sale securities. As of October 28, 2006, DSW held $75.4 million in short-term investments and at January 28, 2006, DSW had no short-term investments.

The table below details the short-term investments classified as available-for-sale securities outstanding at October 28, 2006 (in thousands):

	October 28, 2006
	Maturity of
	Less Than 1 Year
Aggregate fair value	$	75,350
Net gains in accumulated other comprehensive income
Net losses in accumulated other comprehensive income
Net carrying amount	$	75,350

14

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

8.  LONG-TERM OBLIGATIONS

     DSW $150 Million Credit Facility

In July 2005, upon the consummation of DSW’s IPO, RVI and the lenders thereunder amended or terminated the existing credit facilities and other debt obligations of Value City and its other affiliates, including certain facilities under which DSW had rights and obligations as a co-borrower and co-guarantor and released DSW and DSWSW from their obligations as co-borrowers and co-guarantors. At the same time, DSW entered into a new $150 million secured revolving credit facility (“DSW Revolving Loan”) with a term of five years.

Under this new facility, DSW and DSWSW are named as co-borrowers. The new secured revolving credit facility has borrowing base restrictions and provides for borrowings at variable interest rates based on London Interbank Offered Rate (“LIBOR”), the prime rate and the Federal Funds effective rate, plus a margin. DSW’s obligations under its new secured revolving credit facility are collateralized by a lien on substantially all of DSW’s and its subsidiary’s personal property and a pledge of all of its shares of DSWSW. In addition, this facility contains usual and customary restrictive covenants relating to DSW’s management and the operation of its business. These covenants will, among other things, restrict DSW’s ability to grant liens on its assets, incur additional indebtedness, open or close stores, pay cash dividends and redeem its stock, enter into transactions with affiliates and merge or consolidate with another entity. In addition, if at any time DSW utilizes over 90% of its borrowing capacity under this facility, it must comply with a fixed charge coverage ratio test set forth in the facility documents. At October 28, 2006 and January 28, 2006, $134.2 million and $136.4 million, respectively, were available under the DSW Revolving Loan and no direct borrowings were outstanding. At October 28, 2006 and January 28, 2006, $15.8 million and $13.6 million, respectively, in letters of credit were issued and outstanding. The maturity of the DSW Revolving Loan is July 5, 2010.

     Credit Facilities Under Which DSW is No Longer Obligated

In March 2005, DSW and RVI and certain of their affiliates increased the ceiling under their then-existing revolving credit facility from $350 million to $425 million. The increase of $75 million to the revolving credit facility was accomplished by amendment under substantially the same terms as the then-existing revolving credit agreement.

In March 2005, DSW declared a dividend and issued an intercompany note to RVI in the amount of $165 million. The indebtedness evidenced by this note was scheduled to mature in March 2020 and bore interest at a rate equal to LIBOR, plus 850 basis points per year.

In May 2005, DSW declared an additional dividend and issued an intercompany note to RVI in the amount of $25 million. The indebtedness evidenced by this note was scheduled to mature in May 2020 and bore interest at a rate equal to LIBOR, plus 950 basis points per year.

15

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

In July 2005, subsequent to the IPO, DSW prepaid in full, without penalty, the principal balance of both the $165 million and $25 million dividend notes, plus accrued interest of approximately $6.6 million.

9. SEGMENT REPORTING

DSW is managed in two operating segments: DSW stores and leased departments. All of the operations are located in the United States. DSW has identified such segments based on internal management reporting and management responsibilities and measures segment profit as gross profit, which is defined as net sales less cost of sales. The tables below present segment information:

	DSW		Leased
	Stores		Departments		Total
	(in thousands)
Three months ended October 28, 2006:
Net sales	$	298,618	$	33,601	$	332,219
Gross profit		92,708		5,967		98,675
Capital expenditures		9,117		192		9,309
Nine months ended October 28, 2006:
Net sales	$	852,809	$	97,199	$	950,008
Gross profit		260,067		16,997		277,064
Capital expenditures		21,434		364		21,798
As of October 28, 2006:
Total assets	$	558,376	$	30,944	$	589,320

	DSW		Leased
	Stores		Departments		Total
	(in thousands)
Three months ended October 29, 2005:
Net sales	$	270,536	$	31,704	$	302,240
Gross profit		78,361		4,658		83,019
Capital expenditures		5,630		110		5,740
Nine months ended October 29, 2005:
Net sales	$	768,721	$	91,536	$	860,257
Gross profit		229,070		13,110		242,180
Capital expenditures		21,008		240		21,248
As of January 28, 2006:
Total assets	$	479,364	$	28,351	$	507,715

16

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

10. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

	Nine months ended
	October 28,			October 29,
	2006			2005
	(in thousands)
Cash paid during the period for:
Interest to non-related parties		$	7		$	1,544
Interest to related parties		$	0		$	6,592
Income taxes		$	28,336		$	13,678
Noncash investing and operating activities —
Changes in accounts payable due to asset purchases		$	1,702		$	1,398

11. COMMITMENTS AND CONTINGENCIES

As previously reported, on March 8, 2005, Retail Ventures announced that it had learned of the theft of credit card and other purchase information from a portion of DSW customers. On April 18, 2005, Retail Ventures issued the findings from its investigation into the theft. The theft covered transaction information involving approximately 1.4 million credit cards and data from transactions involving approximately 96,000 checks.

DSW and Retail Ventures contacted and continue to cooperate with law enforcement and other authorities with regard to this matter. DSW is involved in several legal proceedings arising out of this incident, including two putative class action lawsuits, which seek unspecified monetary damages, credit monitoring and other relief. Each of the two lawsuits seeks to certify a different class of consumers. One of the lawsuits seeks to certify a nationwide class that would include every consumer who used a credit card, debit card, or check to make purchases at DSW between November 2004 and March 2005 and whose transaction data was taken during the data theft incident. The other lawsuit seeks to certify a class of consumers that is limited geographically to consumers who made purchases at certain stores in Ohio.

In connection with this matter, DSW entered into a consent order with the Federal Trade Commission (“FTC”), which has jurisdiction over consumer protection matters. The FTC published the final order on March 14, 2006, and copies of the complaint and consent order are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

DSW has not admitted any wrongdoing or that the facts alleged in the FTC’s proposed unfairness complaint are true. Under the consent order, DSW will pay no fine or damages. DSW has agreed, however, to maintain a comprehensive information security program and to undergo a biannual assessment of such program by an independent third party.

There can be no assurance that there will not be additional proceedings or claims brought against DSW in the future. DSW has contested and will continue to vigorously contest the

17

DSW INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

claims made against DSW and will continue to explore its defenses and possible claims against others.

DSW estimates that the potential exposure for losses related to this theft, including exposure under currently pending proceedings, ranges from approximately $6.5 million to approximately $9.5 million. Because of many factors, including the early development of information regarding the theft and recoverability under insurance policies, there is no amount in the estimated range that represents a better estimate than any other amount in the range. Therefore, in accordance with Financial Accounting Standard No. 5, Accounting for Contingencies, DSW accrued a charge to operations in the first quarter of fiscal 2005 equal to the low end of the range set forth above, or $6.5 million. As the situation develops and more information becomes available, the amount of the reserve may increase or decrease accordingly. The amount of any such change may be material. As of October 28, 2006, the balance of the associated accrual for potential exposure was $3.1 million.

Although difficult to quantify, since the announcement of the theft, DSW has not discerned any material negative effect on sales trends it believes is attributable to the theft. However, this may not be indicative of the long-term developments regarding this matter.

DSW is involved in various other legal proceedings that are incidental to the conduct of its business. DSW estimates the range of liability related to pending litigation where the amount and range of loss can be estimated. DSW records its best estimate of a loss when the loss is considered probable. Where a liability is probable and there is a range of estimated loss, DSW records the minimum estimated liability related to the claim. In the opinion of management, the amount of any liability with respect to these legal proceedings will not be material. As additional information becomes available, DSW assesses the potential liability related to its pending litigation and revises the estimates. Revisions in DSW’s estimates and potential liability could materially impact its results of operations and financial condition.

12.   SUBSEQUENT EVENTS

On December 5, 2006, RVI, Retail Ventures Services, Inc., Value City and Filene’s Basement, collectively the “RVI Entities”, entered into an IT Transfer and Assignment Agreement (the “IT Transfer Agreement”) with BTS. Under the terms of the IT Transfer Agreement, the RVI Entities will transfer certain information technology contracts to BTS. The IT transfer Agreement is effective as of October 29, 2006.

Additionally, on December 5, 2006, DSW and RVI entered into an Amended and Restated Shared Services Agreement, effective as of October 29, 2006 (the “Amended Shared Services Agreement”). Under the terms of the Amended Shared Services Agreement, DSW, through BTS, will provide information technology services to RVI and its subsidiaries, including Value City and Filene’s Basement. RVI information technology associates are now employed by BTS. Additionally, DSW and RVI agreed to include other non-material changes in the Amended Shared Services Agreement.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

As used in this Quarterly Report on Form 10-Q (this “Report”) and except as the context otherwise may require, “Company”, “we”, “us”, and “our” refers to DSW Inc. (“DSW”) and its wholly owned subsidiaries, including DSW Shoe Warehouse, Inc. (“DSWSW”) and Brand Technology Services LLC (“BTS”).

Company Overview

DSW is a leading U.S. specialty branded footwear retailer operating 215 DSW stores in 33 states as of October 28, 2006. We offer in our DSW stores a combination of selection, convenience and value that we believe differentiates us from our competitors such as mall-based department stores, national chains and independent shoe retailers and appeals to consumers from a broad range of socioeconomic and demographic backgrounds. In addition to operating DSW stores, as of October 28, 2006, we operated a total of 225 leased shoe departments for three non-affiliated retailers, including 162 leased shoe departments for Stein Mart, Inc. (“Stein Mart”); 62 for Gordman’s, Inc. (“Gordmans”); and one for Frugal Fannie’s Fashion Warehouse (“Frugal Fannie’s”). As of October 28, 2006, we also operated 29 leased shoe departments for Filene’s Basement, a wholly-owned subsidiary of Retail Ventures. We plan to further strengthen our position as a leading specialty branded footwear retailer by pursuing three primary strategies for growth — expanding our store base, driving sales through enhanced merchandising and continuing to improve profitability.

Forward-Looking Statements

Some of the statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Quarterly Report on Form 10-Q, including information incorporated by reference herein, may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this Quarterly Report on Form 10-Q are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include but are not limited to those described under “Risk Factors” in our Annual Report for the fiscal year ended January 28, 2006, on Form 10-K, as filed with the Securities and Exchange Commission on April 13, 2006, as supplemented by Item 1A, Part II of this Report. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Report. We do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we may have projected. Any forward-looking statements you read in this Quarterly Report on Form 10-Q reflect our current views with respect to future events and are subject to these and other risks, uncertainties and

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assumptions relating to our operations, results of operations, financial condition, growth strategy and liquidity.

Critical Accounting Policies

The preparation of our consolidated financial statements in conformity with generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates and judgments, including, but not limited to, those related to inventory valuation, depreciation, amortization, recoverability of long-lived assets (including intangible assets), estimates for self insurance reserves for health and welfare, workers’ compensation and casualty insurance, customer loyalty program, income taxes, contingencies, litigation and revenue recognition. We base these estimates and judgments on our historical experience and other factors we believe to be relevant, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The process of determining significant estimates is fact-specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and in some cases, actuarial and appraisal techniques. We constantly re-evaluate these significant factors and make adjustments where facts and circumstances dictate.

While we believe that our historical experience and other factors considered provide a meaningful basis for the accounting policies applied in the preparation of the consolidated financial statements, we cannot guarantee that our estimates and assumptions will be accurate. As the determination of these estimates requires the exercise of judgment, actual results inevitably will differ from those estimates, and such differences may be material to our financial statements.

We believe the following represent the most significant accounting policies, critical estimates and assumptions, among others, used in the preparation of our consolidated financial statements:

• Revenue Recognition. Revenues from merchandise sales are recognized at the point of sale and are net of returns and exclude sales tax. Revenue from stored value cards, which include gift cards and returned merchandise credits, are deferred and recognized when the cards are redeemed. The liability associated with outstanding stored value cards was $8.1 million and $9.1 million at October 28, 2006 and January 28, 2006, respectively, and these amounts are included in the accompanying consolidated balance sheets within accrued expenses — other. We did not recognize income from unredeemed stored value cards during the three and nine months ending October 28, 2006 and October 29, 2005.

• Cost of Sales and Merchandise Inventories. Merchandise inventories are stated at the lower of cost, determined using the first-in, first-out basis, or market, using the retail inventory method. The retail inventory method is widely used in the retail industry due to its practicality. Under the retail inventory method, the valuation of inventories at cost and the resulting gross profit are calculated by applying a calculated cost to retail ratio to the retail value of inventories. The cost of the inventory reflected on our consolidated balance sheet is decreased by charges to cost of sales at the time the retail value of the inventory is lowered through the use of markdowns. Hence, earnings are negatively impacted as merchandise is marked down prior to sale. Reserves to value inventory at the lower of cost or market were $21.9 million on October 28, 2006 and $19.2 million at January 28, 2006.

20

	Inherent in the calculation of inventories are certain significant management judgments and estimates, including setting the original merchandise retail value or mark-on, markups of initial prices established, reductions in prices due to customers’ perception of value (known as markdowns), and estimates of losses between physical inventory counts, or shrinkage, which, combined with the averaging process within the retail inventory method, can significantly impact the ending inventory valuation at cost and the resulting gross profit.
	We include in the cost of sales expenses associated with warehousing, distribution and store occupancy. Warehousing costs are comprised of labor, benefits and other labor-related costs associated with the operations of the warehouse, which are primarily payroll-related taxes and benefits. The non-labor costs associated with warehousing include rent, depreciation, insurance, utilities and maintenance and other operating costs that are passed to us from the landlord. Distribution costs include the transportation of merchandise to the warehouse and from the warehouse to our stores. Store occupancy costs include rent, utilities, repairs, maintenance, insurance and janitorial costs and other costs associated with licenses and occupancy-related taxes, which are primarily real estate taxes passed to us by our landlords. Redemption for customer loyalty certificates are included in cost of sales. (See Customer Loyalty Program below for more details)
•	Short-Term Investments. Short-term investments include investment grade variable-rate debt obligations and auction rate securities and are classified as available-for-sale securities. These securities are recorded at cost, which approximates fair value due to their variable interest rates, which reset every 7 to 182 days. Despite the long-term nature of their stated contractual maturities, we have the intent and ability to quickly liquidate these securities. As a result of the resetting variable rates, there are no cumulative gross unrealized or realized holding gains or losses from these investments. All income generated from these investments is recorded as interest income. As of October 28, 2006, we held $75.4 million in short-term investments and at January 28, 2006, we had no short-term investments.
•	Asset Impairment and Long-lived Assets. We must periodically evaluate the carrying amount of our long-lived assets, primarily property and equipment, and finite life intangible assets when events and circumstances warrant such a review to ascertain if any assets have been impaired. The carrying amount of a long-lived asset is considered impaired when the carrying value of the asset exceeds the expected future cash flows (undiscounted and without interest) from the asset. Our reviews are conducted at the lowest identifiable level, which includes a store. The impairment loss recognized is the excess of the carrying amount of the asset over its fair value, estimated on discounted cash flow. Should an impairment loss be realized, it will be included in cost of sales. We recorded zero and $0.8 million in impairment losses during the three and nine months ended October 28, 2006. The amount of impairment losses recorded in fiscal 2005 was $0.2 million, all of which was recorded in the fourth quarter.

We believe at this time that the long-lived assets’ carrying values and useful lives continue to be appropriate. To the extent these future projections or our strategies change, our conclusion regarding asset impairment may differ from our current estimates.

• Store Closing Reserves. During the nine months ending October 28, 2006, we recorded reserves associated with the closing of four DSW stores in the amount of $0.5 million. Expenses related to closed stores are recorded as operating expenses. These estimates are monitored on at least a quarterly basis for changes in circumstances.

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The table below sets forth the significant components and activity related to these closing reserves:

	Balance at January									Balance at October
	28, 2006		Related Charges		Payments			Adjustments		28, 2006
	(in thousands)
Employee severance and termination benefits			$	19	$	(19	)			$	—
Lease Costs	$	282		431		(838	)	$	233		108
Other				64							64
Total	$	282	$	514	$	(857	)	$	233	$	172

	Balance at January									Balance at October
	29, 2005		Related Charges		Payments			Adjustments		29, 2005
	(in thousands)
Employee severance and termination benefits
Lease Costs	$	532	$	—	$	(209	)	$	—	$	323
Other
Total	$	532	$	—	$	(209	)	$	—	$	323

• Self-insurance Reserves. We record estimates for certain health and welfare, workers’ compensation and casualty insurance costs that are self-insured programs. Self insurance reserves include actuarial estimates of both claims filed, carried at their expected ultimate settlement value, and claims incurred but not yet reported. Our liability represents an estimate of the ultimate cost of claims incurred as of the balance sheet date. Health and welfare estimates are calculated monthly, based on a historical analysis for the average of the previous two months claims cost and the number of associates employed. Workers’ compensation and casualty insurance estimates are calculated semi-annually, with the assistance of an actuary, utilizing claims development estimates based on historical experience and other factors. We have purchased stop loss insurance to limit our exposure to any significant exposure on a per person basis for health and welfare and on a per claim basis for workers’ compensation and casualty insurance. Although we do not anticipate the amounts ultimately paid will differ significantly from our estimates, self-insurance reserves could be affected if future claim experience differs significantly from the historical trends and the actuarial assumptions. For example, for workers’ compensation and liability claims estimates, a 1% increase or decrease to the assumptions for claims costs and loss development factors would increase or decrease our self-insurance accrual by less than $0.1 million. The self-insurance reserves were $1.9 million and $0.9 million at October 28, 2006 and January 28, 2006, respectively.

• Customer Loyalty Program. We maintain a customer loyalty program for our DSW stores in which program members receive a future discount on qualifying purchases. Upon reaching the target-earned threshold, our members receive certificates for these discounts which must be redeemed within six months. During the third quarter of fiscal 2006 we re-launched our loyalty program, which included changing: the name from “Reward Your Style” to “DSW Rewards”, the point’s threshold to receive a certificate and the certificate amounts. The

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changes were designed to improve customer awareness, customer loyalty and our ability to communicate with our customers. We accrue the anticipated redemptions of the discount earned at the time of the initial purchase. To estimate these costs, we are required to make assumptions related to customer purchase levels and redemption rates based on historical experience. As these certificates are redeemed, the charge is to cost of sales. The accrued liability as of October 28, 2006 and January 28, 2006 was $10.7 million and $8.3 million, respectively. Substantially all certificates under the “Reward Your Style” program will expire on or before January 31, 2007.

Income Taxes. We are required to determine the aggregate amount of income tax expense to accrue and the amount which will be currently payable based upon tax statutes of each jurisdiction we do business in. In making these estimates, we adjust income based on a determination of generally accepted accounting principles for items that are treated differently by the applicable taxing authorities. Deferred tax assets and liabilities, as a result of these differences, are reflected on our balance sheet for temporary differences that will reverse in subsequent years. A valuation allowance is established against deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. If management had made these determinations on a different basis, our tax expense, assets and liabilities could be different.

Results of Operations

As of October 28, 2006, we operated 215 DSW stores in 33 states, and leased shoe departments in 162 Stein Mart stores, 62 Gordmans stores, 29 Filene’s Basement stores and one Frugal Fannie’s store. We manage our operations in two segments, defined as DSW stores and leased departments. The leased departments are comprised of leased shoe departments in Stein Mart, Gordmans, Frugal Fannie’s and Filene’s Basement stores. The following table represents selected components of our historical consolidated results of operations, expressed as percentages of net sales:

	Three months ended						Nine months ended
	October 28,			October 29,			October 28,			October 29,
	2006			2005			2006			2005
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales		(70.3	)		(72.5	)		(70.8	)		(71.9	)
Gross profit		29.7			27.5			29.2			28.1
Operating expenses		(22.1	)		(21.6	)		(21.2	)		(21.9	)
Operating profit		7.6			5.9			8.0			6.2
Interest expense					(0.1	)					(0.9	)
Interest income		0.5			0.1			0.5
Interest income (expense), net		0.5			0.0			0.5			(0.9	)
Earnings before income taxes		8.1			5.9			8.5			5.3
Income tax provision		(3.3	)		(2.3	)		(3.4	)		(2.1	)
Net income		4.8	%		3.6	%		5.1	%		3.2	%

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THREE MONTHS ENDED OCTOBER 28, 2006 COMPARED TO THREE MONTHS ENDED
OCTOBER 29, 2005

Net Sales. Net sales for the thirteen week period ended October 28, 2006 increased by 9.9%, or $30.0 million, to $332.2 million from $302.2 million in the thirteen week period ended October 29, 2005. Our comparable store sales in the third quarter of fiscal 2006 improved 2.6% compared to the third quarter of fiscal 2005. The increase in DSW sales includes a net increase of 18 DSW stores, four affiliated leased shoe departments and 14 non-affiliated leased shoe departments. The DSW store locations opened subsequent to October 29, 2005 added $17.2 million in sales for the quarter ended October 28, 2006, while the leased shoe departments opened subsequent to October 29, 2005 added $1.9 million in sales for the quarter ended October 28, 2006. Leased shoe department sales comprised 10.1% of total net sales in the third quarter of fiscal 2006, compared to 10.5% in the third quarter of fiscal 2005.

For the third quarter of fiscal 2006, DSW comparable store sales increased in women’s by 3.3% and athletic by 8.2%. Comparable store sales decreased in the men’s category by 0.4% and in accessories by 3.4%. Sales increases in the women’s category were driven by increases in the casual class, while the fashion class continues to be the best performing class in the athletic category. The decrease in the accessories category was due to the transition to a consignment program for shoe care products.

Gross Profit. Gross profit increased $15.7 million to $98.7 million in the third quarter of fiscal 2006 from $83.0 million in the third quarter of fiscal 2005, and increased as a percentage of net sales from 27.5% in the third quarter of fiscal 2005 to 29.7% in the third quarter of fiscal 2006. The margin for the third quarter of fiscal 2006 was positively affected by an increased initial markup, a reduction in the markdown rate, and a decrease in warehouse expense. Improved inventory management and procurement lead to the favorable initial markup and the improved markdown rate. The decrease in warehouse expense is the result of improved operational efficiencies achieved through the use of electronic shipping information and increased unit volumes.

Operating Expenses. For the third quarter of fiscal 2006, operating expenses increased $8.2 million to $73.5 million from $65.3 million in the third quarter of fiscal 2005, which represented 22.1% and 21.6% of net sales, respectively. The increase in the percent of net sales was the result of increased personnel related expense in the home office and the marketing expense related to the change in the loyalty program. This unfavorable expense was offset in part by the leveraging of store expenses, a reduction in pre-opening costs and a favorable adjustment related to the loyalty program redemption liability. Included in operating expenses are costs, excluding pre-opening costs, associated with 18 new DSW stores and 18 new leased shoe departments opened subsequent to October 29, 2005 of $3.0 million for the three months ended October 28, 2006. Pre-opening costs are expensed as incurred and therefore do not necessarily reflect expenses for the stores opened in a given fiscal period. Included in operating expenses is the related operating cost, excluding occupancy, associated with operating the leased shoe departments.

Operating Profit. Operating profit was $25.2 million in the third quarter of fiscal 2006 compared to $17.7 million in the third quarter of fiscal 2005, and increased as a percentage of net sales from 5.9% in the third quarter of fiscal 2005 to 7.6% in the third quarter of fiscal 2006. Operating profit as a percentage of net sales was impacted by the increase in gross profit offset by the increased operating expenses.

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Interest Income (Expense), Net. Net interest income for the third quarter of fiscal 2006 was $1.6 million as compared to $0.1 million of net interest income for the third quarter of fiscal 2005. The increase in interest income over the prior year is from a combined increase in cash and equivalents and short-term investments which increased due to cash from operations.

Income Taxes. Our effective tax rate for the third quarter of fiscal 2006 was 40.3%, compared to 39.0% for the third quarter of fiscal 2005.

Net Income. For the third quarter of fiscal 2006, net income increased $5.1 million, or 46.7%, over the third quarter of fiscal 2005 and represented 4.8% and 3.6% of net sales, respectively. This increase was primarily the result of the increase in operating profit and interest income during the period.

NINE MONTHS ENDED OCTOBER 28, 2006 COMPARED TO NINE MONTHS ENDED OCTOBER 29, 2005

Net Sales. Net sales for the nine-month period ended October 28, 2006 increased by 10.4%, or $89.7 million, to $950.0 million from $860.3 million in the nine-month period ended October 29, 2005. Our comparable store sales in the nine-month period of fiscal 2006 improved 3.0%. The increase in DSW sales includes a net increase of 18 DSW stores, four affiliated leased shoe departments and 14 non-affiliated leased shoe departments. The DSW store locations opened subsequent to October 29, 2005 added $31.2 million in sales in fiscal 2006 over the comparable nine-month period in fiscal 2005, while the leased shoe departments opened subsequent to October 29, 2005 added $3.1 million in sales in fiscal 2006 over the comparable nine-month period in fiscal 2005. Leased shoe department sales comprised 10.2% of total net sales in fiscal 2006, compared to 10.6% in fiscal 2005.

For the nine-month period ended October 28, 2006, as compared with the same nine-month period in fiscal 2005, DSW comparable store sales increased in women’s by 4.0%, athletic by 4.0%, men’s by 0.2%, and accessories by 0.8%. Sales increases in the women’s category were driven by increases in the casual class, while the increase in the athletic category was the result of an increase in the women’s and men’s fashion classes. The increase in men’s was driven by the young men’s class. The increase in the accessories category was driven by an increase in sales of handbags, partially offset by the transition to a consignment program for shoe care products.

Gross Profit. Gross profit increased $34.9 million to $277.1 million in fiscal 2006 from $242.2 million in fiscal 2005, and increased as a percentage of net sales from 28.1% in fiscal 2005 to 29.2% in fiscal 2006. The increase is attributable to an increased initial markup, a reduction in the markdown rate and a decrease in warehouse expense. The decrease in warehouse expense is the result of improved operational efficiencies achieved through the use of electronic shipping information and increased unit volumes. A reduction of the internal shrink accrual rate resulted in an increase in gross profit of $1.0 million in the nine month period ended October 28, 2006 over the comparable prior year period. Those positive factors were partially offset by an increase in occupancy expense. Store occupancy expense increased from 13.1% of net sales in fiscal 2005 to 13.3% of net sales in fiscal 2006 which is the result of increases in lease expense for new stores and an impairment charge of $0.8 million.

Operating Expenses. For the nine-month period ended October 28, 2006, operating expenses increased $12.1 million to $200.8 million from $188.7 million in the nine-month period ended October 29, 2005, which represented 21.2% and 21.9% of net sales, respectively. Operating costs for fiscal 2005 included a charge of $6.5 million related to an estimate for potential losses related to

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the theft of credit card and other purchase information. Included in operating expenses are costs, excluding pre-opening costs, associated with 18 new DSW stores and 18 new leased shoe departments opened subsequent to October 29, 2005 of $5.4 million for the nine months ended October 28, 2006. Pre-opening costs are expensed as incurred and therefore do not necessarily reflect expenses for the stores opened in a given fiscal period. Operating expenses for stores that had not opened as of October 28, 2006 were $0.9 million. Favorable changes in operating expenses during the period included reductions in marketing and pre-opening costs of $3.3 million and $1.7 million, respectively. Those positive factors were offset by an increase in personnel related expense in both the stores and home office. Included in operating expenses is the related operating cost, excluding occupancy, associated with operating the leased shoe departments.

Operating Profit. Operating profit was $76.2 million in fiscal 2006 compared to $53.5 million in the fiscal 2005, and increased as a percentage of net sales from 6.2% in fiscal 2005 to 8.0% in fiscal 2006. Operating profit as a percentage of net sales was impacted by the improved gross profit, the leveraging of operating expenses and the estimate for potential losses related to the theft of credit card and other purchase information that was incurred in the prior fiscal year.

Interest Income (Expense), Net. Net interest income for the nine-month period ended October 28, 2006 was $4.9 million as compared to $8.4 million of net interest expense for the nine-month period ended October 29, 2005. Interest income for the period was the result of investment activity from funds generated by the IPO and from operations. The interest expense incurred in fiscal 2005 includes $6.6 million of interest due to RVI relating to $190.0 million of indebtedness incurred to fund dividends and $1.9 million of interest on direct borrowings under the Value City Revolving Credit Facility.

Income Taxes. Our effective tax rate for the nine-month period ended October 28, 2006 was 39.7%, compared to 39.8% for the nine-month period ended October 29, 2005.

Net Income. For the nine-month period ended October 28, 2006, net income increased $21.7 million, or 80.0%, over the nine-month period ended October 29, 2005 and represented 5.1% and 3.2% of net sales, respectively. This increase was primarily the result of increased gross profit, the $6.5 million charge in the prior fiscal year for estimated potential losses related to the theft of credit card and other purchase information and the interest income during the period as opposed to having interest expense in the prior fiscal year.

Seasonality

Our business, measured in terms of net sales, is subject to seasonal trends. Our net sales, measured on a comparable stores basis, have typically been higher in spring and early fall, when our customers’ interest in new seasonal styles increases. Unlike many other retailers, we have not historically experienced a large increase in net sales during our fourth quarter associated with the winter holiday season.

Liquidity and Capital Resources

Our primary ongoing cash requirements are for seasonal and new store inventory purchases, capital expenditures in connection with our expansion, the remodeling of existing stores and infrastructure growth. Since our IPO in July 2005, we have funded our expenditures with cash flows from operations. Prior to the IPO, we funded our expenditures with cash flows from operations and borrowings under the Value City credit facilities to which we had been a party, as described below. Our working capital and inventory levels typically build seasonally. We believe that we will be able to continue to fund our operating requirements and the expansion of our

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business pursuant to our growth strategy in the future with existing cash and short-term investments, cash flows from operations and borrowings under our secured revolving credit facility, if necessary.

For the thirty nine week period ended October 28, 2006, our net cash provided by operations was $67.3 million, compared to $36.2 million provided by operations for the thirty nine week period ended October 29, 2005. The $31.1 million increase in cash provided by operations over the comparable period is primarily due to increased net income.

Net working capital increased $53.8 million to $292.3 million at October 28, 2006 from $238.5 million at January 28, 2006, primarily due to increased short-term investments and inventory related to new stores opened in fiscal 2006, partially offset by decreases in cash and cash equivalents. Our current ratio at October 28, 2006 and January 28, 2006 were 2.8 and 2.7, respectively.

Our future capital expenditures will depend primarily on the number of new stores we open, the number of existing stores we remodel and the timing of these expenditures. In fiscal 2005, we opened 29 new DSW stores. We plan to open approximately 30 stores per year in each of the next four fiscal years. During fiscal 2005, the average investment required to open a typical new DSW store was approximately $1.4 million. Of this amount, gross inventory typically accounted for approximately $680,000, fixtures and leasehold improvements typically accounted for approximately $460,000 (prior to tenant allowances) and pre-opening advertising and other pre-opening expenses typically accounted for approximately $280,000. In addition, we expect to invest in inventory and fixtures during the fiscal fourth quarter of 2006 related to the restated supply agreement with Stein Mart to operate 102 additional locations. Subsequent to the end of the quarter, we have signed a lease for additional office space, in which we are expecting to incur capital expense of approximately $10 million, the majority of which we expect to incur during the fiscal fourth quarter of 2006. We expect this subsequent event, along with the additional Stein Mart locations, to bring our annual capital expense to approximately $40 million for the year. We plan to finance these investments with existing cash and cash flows from operating activities.

$150 Million Secured Revolving Credit Facility. Simultaneously with the amendment and restatement of the Value City revolving credit facility described below, we entered into a new $150 million secured revolving credit facility with a term of five years. Under this facility, we and our subsidiary, DSWSW, are named as co-borrowers. Our facility has borrowing base restrictions and provides for borrowings at variable interest rates based on LIBOR, the prime rate and the Federal Funds effective rate, plus a margin. Our obligations under the secured revolving credit facility are secured by a lien on substantially all of our and our subsidiary’s personal property and a pledge of our shares of DSWSW. In addition, our secured revolving credit facility contains usual and customary restrictive covenants relating to our management and the operation of our business. These covenants will, among other things, restrict our ability to grant liens on our assets, incur additional indebtedness, open or close stores, pay cash dividends and redeem our stock, enter into transactions with affiliates and merge or consolidate with another entity. In addition, if at any time we utilize over 90% of our borrowing capacity under this facility, we must comply with a fixed charge coverage ratio test set forth in the facility documents. At October 28, 2006 and January 28, 2006, $134.2 million and $136.4 million was available under the $150 million secured revolving credit facility and no direct borrowings were outstanding. At October 28, 2006 and January 28, 2006, $15.8 million and $13.6 million in letters of credit were issued and outstanding.

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Contractual Obligations

We had outstanding letters of credit that totaled approximately $15.8 million at October 28, 2006 and $13.6 million at January 28, 2006. If certain conditions are met under these arrangements, we would be required to satisfy the obligations in cash. Due to the nature of these arrangements and based on historical experience, we do not expect to make any significant payment outside of terms set forth in these arrangements.

As of October 28, 2006, we have entered into various construction commitments, including capital items to be purchased for projects that were under construction, or for which a lease has been signed. Our obligations under these commitments aggregated to approximately $3.9 million as of October 28, 2006. In addition, as of October 28, 2006, we have signed lease agreements for 29 new store locations with annual rent of approximately $10.7 million. In connection with the new lease agreements, we will receive approximately $7.5 million of tenant allowances, which will reimburse us for expenditures at these locations.

Transactions with Retail Ventures

Union Square Store Guaranty by Retail Ventures. In January 2004, we entered into a lease agreement with 40 East 14 Realty Associates, L.L.C., an unrelated third party, for our Union Square store in Manhattan, New York. In connection with the lease, Retail Ventures has agreed to guarantee payment of our rent and other expenses and charges and the performance of our other obligations.

Intercompany Accounts. Prior to the completion of our initial public offering in July 2005, we and Retail Ventures used intercompany transactions in the conduct of our operations. Under this arrangement, Retail Ventures acted as a central processing location for payments for the acquisition of merchandise, payroll, outside services, capital additions and expenses by controlling the payroll and accounts payable activities for all Retail Ventures’ subsidiaries, including DSW. We transferred cash received from sales of merchandise to cash accounts controlled by Retail Ventures. The concentration of cash and the offsetting payments for merchandise, expenses, capital assets and accruals for future payments were accumulated on our balance sheet in advances to affiliates. The balance of advances to affiliates fluctuated based on our activities with Retail Ventures.

Following completion of our initial public offering, our intercompany activities have been limited to those arrangements set forth in the shared services agreement and the other agreements between us and Retail Ventures. We no longer concentrate our cash from the sale of merchandise into Retail Ventures’ accounts but into our own DSW accounts. We pay for our own merchandise, expenses and capital additions from newly established disbursement accounts. Any intercompany payments are made pursuant to the terms of the shared services agreement and other agreements between us and Retail Ventures. The amount of payables and receivables with Retail Ventures are now recorded in accounts payable to related parties and accounts receivables from related parties.

Our Separation from Retail Ventures

Upon completion of our initial public offering in July 2005, Retail Ventures amended or terminated the existing credit facilities and other debt obligations of Value City and its other affiliates, including certain facilities under which we had rights and obligations as a co-borrower and/or co-guarantor. We are no longer a party to any of these agreements.

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The Value City Revolving Credit Facility. Prior to completion of our initial public offering in July 2005, we were party to a Loan and Security Agreement, as amended, entered into with National City, as administrative agent, and the other parties named therein, originally entered into in June 2002. Upon the completion of our initial public offering, this revolving credit agreement was amended and restated and we were released from our obligations as a party thereto.

The Value City Term Loan Facility. Prior to completion of our initial public offering in July 2005, we were party to a Financing Agreement, as amended, among Cerberus Partners L.P. (“Cerberus”), as agent and lender, and Schottenstein Stores Corporation (“SSC”) as lender, and the other parties named as co-borrowers therein, originally entered into in June 2002. Upon the completion of our initial public offering, this term loan agreement was amended and restated and we were released from our obligations as a party thereto.

Under the terms of this term loan agreement, SSC and Cerberus each provided us, Value City and the other Retail Ventures affiliates named as co-borrowers with a separate $50 million term loan comprised of two tranches with initial three-year terms. In July 2004, the maturity dates of these loans were extended until June 11, 2006. In connection with the second tranche of these term loans, Retail Ventures issued to each of Cerberus and SSC warrants to purchase 1,477,396 common shares of Retail Ventures at a purchase price of $4.50 per share, subject to adjustment. In September 2002, Back Bay Capital Funding LLC (“Back Bay”) bought from each of Cerberus and SSC a $1.5 million interest in each of the tranches of their term loans for an aggregate $6.0 million interest, and Back Bay received from each of Cerberus and SSC a corresponding portion of the warrants to purchase Retail Ventures common shares originally issued in connection with the second tranche of their term loans. Effective November 23, 2005, Millennium Partners, L.P. (“Millennium”) purchased from Back Bay term loan warrants to purchase an aggregate of 177,288 of Retail Ventures common shares, subject to adjustment. The term loans’ stated rate of interest per annum through June 11, 2004 was 14% if paid in cash and 15% if the co-borrowers elected a paid-in-kind, or PIK, option. During the first two years of the term loans, the co-borrowers could elect to pay all interest in PIK. During the final year of the term loans, the stated rate of interest was 15.0% if paid in cash or 15.5% if by PIK, and the PIK option was limited to 50% of the interest due. All interest was paid under the cash election.

In connection with the amendment of this term loan agreement, Retail Ventures amended the outstanding warrants to provide SSC, Cerberus and Millennium the right, from time to time, in whole or in part, to (i) acquire Retail Ventures common shares at the then current conversion price (subject to the anti-dilution provisions), (ii) acquire from Retail Ventures Class A Common Shares of DSW at an exercise price of $19.00 per share (subject to anti-dilution provisions) or (iii) acquire a combination thereof.

As of October 28, 2006, assuming an exercise price per share of $19.00, SSC and Cerberus would each receive 328,915 Class A Common Shares, and Millennium would receive 41,989 Class A Common Shares, if they exercised these warrants in full exclusively for DSW Common Shares. The warrants expire in June 2012. Although Retail Ventures has informed us that it does not currently intend or plan to undertake a spin-off of DSW Common Shares to Retail Ventures’ shareholders, in the event that Retail Ventures effects a spin-off of its DSW Common Shares to its shareholders in the future, the holders of outstanding unexercised warrants will receive the same number of DSW Common Shares that they would have received had they exercised their warrants in full for Retail Ventures common shares immediately prior to the record date of the spin-off, without regard to any limitations on exercise in the warrants. Following the completion of any such spin-off, the warrants will be exercisable solely for Retail Ventures common shares.

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We have entered into an exchange agreement with Retail Ventures whereby, upon the request of Retail Ventures, we will be required to exchange some or all of the Class B Common Shares of DSW held by Retail Ventures for Class A Common Shares.

The Value City Senior Subordinated Convertible Loan Facility. Prior to completion of our initial public offering in July 2005, we were a co-guarantor under the Amended and Restated Senior Subordinated Convertible Loan Agreement, entered into by Value City, as borrower, Cerberus, as agent and lender, SSC, as lender, and DSW and the other parties named as guarantors, originally entered into in June 2002. Upon the completion of our initial public offering, this convertible loan agreement was amended and restated and we are no longer a party thereto.

In connection with the amendment and restatement of this convertible loan agreement, the $75 million convertible loan was converted into a $50 million non-convertible loan. In addition, Retail Ventures agreed to issue to SSC and Cerberus convertible warrants which will be exercisable from time to time until the later of June 11, 2007 and the repayment in full of Value City’s obligations under the amended and restated loan agreement. Under the convertible warrants, SSC and Cerberus will have the right, from time to time, in whole or in part, to (i) acquire Retail Ventures common shares at the conversion price referred to in the convertible loan (subject to antidilution provisions), (ii) acquire from Retail Ventures Class A Common Shares of DSW at an exercise price of $19.00 per share (subject to antidilution provisions) or (iii) acquire a combination thereof. Although Retail Ventures has informed us that it does not currently intend or plan to undertake a spin-off of Common Shares to Retail Ventures’ shareholders, in the event that Retail Ventures effects a spin-off of its DSW Common Shares to its shareholders in the future, the holders of outstanding unexercised warrants will receive the same number of DSW Common Shares that they would have received had they exercised their warrants in full for Retail Ventures common shares immediately prior to the record date of the spin-off, without regard to any limitation on exercise contained in the warrants. Following the completion of any such spin-off, the warrants will be exercisable solely for Retail Ventures common shares.

SSC and Cerberus may acquire upon exercise of the warrants Class A Common Shares of DSW from Retail Ventures. As of October 28, 2006, assuming an exercise price per share of $19.00, SSC and Cerberus would receive 1,973,684 and 315,790 Class A Common Shares, respectively, without giving effect to anti-dilution adjustments, if any, if they exercised these warrants exclusively for DSW Common Shares.

Value City Intercompany Note. The capital stock of DSW held by Retail Ventures secures a $240 million Value City intercompany note made payable by Retail Ventures to Value City, which was executed and delivered on January 1, 2005 in connection with the transfer of all the capital stock of DSW and Filene’s Basement by Value City to Retail Ventures on that date. The lien granted to Value City on the DSW capital stock held by Retail Ventures will be released upon written notice that warrants held by Cerberus, SSC and Millennium are to be exercised in exchange for DSW capital stock held by Retail Ventures and to be delivered by Retail Ventures upon the exercise of such warrants. The note was paid in full during the third quarter of 2006 and the lien was released upon repayment of the note in full.

The $165.0 Million Intercompany Note. In March 2005, we incurred intercompany indebtedness to fund a $165.0 million dividend to Retail Ventures. We repaid this note in full in July 2005.

The $25.0 Million Intercompany Note. In May 2005, we incurred intercompany indebtedness to fund a $25.0 million dividend to Retail Ventures. We repaid this note in full in July 2005.

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Cross-Corporate Guarantees. We previously entered into cross-corporate guarantees with various financing institutions pursuant to which we, Retail Ventures, Filene’s Basement and Value City, jointly and severally, guaranteed payment obligations owed to these entities under factoring arrangements they had entered into with vendors who provided merchandise to some or all of Retail Ventures’ subsidiaries. In July 2005, we terminated these cross-corporate guarantees and no amounts remain guaranteed by us.

We operate all our stores, warehouses and corporate office space from leased facilities. Lease obligations are accounted for either as operating leases or as capital leases based on lease by lease review at lease inception. We have no capital leases outstanding as of October 28, 2006.

On July 5, 2005, subsequent to the IPO, we paid in full the principal balance of both the $165.0 million and $25.0 million dividend notes plus accrued interest of approximately $6.6 million to RVI, $20.0 million outstanding on our old secured revolving credit facility and a $10.0 million intercompany advance from RVI used to pay down on the outstanding old credit facility borrowing.

Off-Balance Sheet Arrangements

We do not intend to participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as special purpose entities or variable interest entities, which would facilitate off-balance sheet arrangements or other limited purposes. As of October 28, 2006, we have not entered into any “off-balance sheet” arrangements, as that term is described by the SEC.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our cash and cash equivalents are maintained only with maturities of 90 days or less. Our short-term investments have interest reset periods of 182 days or less. These financial instruments may be subject to interest rate risk through lost income should interest rates increase during their limited term to maturity or resetting of interest rates. As of October 28, 2006 and January 28, 2006, there was no long-term debt outstanding. Future borrowings, if any, would bear interest at negotiated rates and would be subject to interest rate risk. Because we have no outstanding debt, we do not believe that a hypothetical adverse change of 1.0% in interest rates would have a material effect on our financial position.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded, as of the end of the period covered by this report, that such disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

No change was made in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

As previously reported, on March 8, 2005, Retail Ventures announced that it had learned of the theft of credit card and other purchase information from a portion of DSW customers. On April 18, 2005, Retail Ventures issued the findings from its investigation into the theft. The theft covered transaction information involving approximately 1.4 million credit cards and data from transactions involving approximately 96,000 checks.

We and Retail Ventures contacted and continue to cooperate with law enforcement and other authorities with regard to this matter. We are involved in several legal proceedings arising out of this incident, including two putative class action lawsuits, which seek unspecified monetary damages, credit monitoring and other relief. Each of the two lawsuits seeks to certify a different class of consumers. One of the lawsuits seeks to certify a nationwide class that would include every consumer who used a credit card, debit card, or check to make purchases at DSW between November 2004 and March 2005 and whose transaction data was taken during the data theft incident. The other lawsuit seeks to certify a class of consumers that is limited geographically to consumers who made purchases at certain stores in Ohio.

In connection with this matter, we entered into a consent order with the Federal Trade Commission (“FTC”), which has jurisdiction over consumer protection matters. The FTC published the final order on March 14, 2006, and copies of the complaint and consent order are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

We have not admitted any wrongdoing or that the facts alleged in the FTC’s proposed unfairness complaint are true. Under the consent order, we will pay no fine or damages. We have agreed, however, to maintain a comprehensive information security program and to undergo a biannual assessment of such program by an independent third party.

There can be no assurance that there will not be additional proceedings or claims brought against us in the future. We have contested and will continue to vigorously contest the claims made against us and will continue to explore our defenses and possible claims against others.

We estimate that the potential exposure for losses related to this theft, including exposure under currently pending proceedings, ranges from approximately $6.5 million to approximately $9.5 million. Because of many factors, including the early development of information regarding the theft and recoverability under insurance policies, there is no amount in the estimated range that represents a better estimate than any other amount in the range. Therefore, in accordance with Financial Accounting Standard No. 5, Accounting for Contingencies, we accrued a charge to operations in the first quarter of fiscal 2005 equal to the low end of the range set forth above, or $6.5 million. As the situation develops and more information becomes available, the amount of the reserve may increase or decrease accordingly. The amount of any such change may be material. As of October 28, 2006, the balance of the associated accrual for potential exposure was $3.1 million.

Although difficult to quantify, since the announcement of the theft, we have not discerned any material negative effect on sales trends we believe is attributable to the theft. However, this may not be indicative of the long-term developments regarding this matter.

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We are involved in various other legal proceedings that are incidental to the conduct of our business. We estimate the range of liability related to pending litigation where the amount of the range of loss can be estimated. We recorded our best estimate of a loss when the loss is considered probable. Where a liability is probable and there is a range of estimated loss, we recorded the most likely estimated liability related to the claim. In the opinion of management, the amount of any liability with respect to these proceedings will not be material. As additional information becomes available, we will assess the potential liability related to our pending litigation and revise the estimates. Revisions in our estimates and potential liability could materially impact our results of operations and financial condition.

ITEM 1A. Risk Factors.

We caution that information in this Form 10-Q, particularly information regarding future economic performance and finances, and plans, expectations and objectives of management, is forward-looking (as such term is defined in the Private Securities Litigation Reform Act of 1995) and is subject to change based on various important factors. The following risks and uncertainties, in addition to those previously disclosed under the caption “Risk Factors” in our last Annual Report on Form 10-K for the fiscal year-ended January 28, 2006, and additional risks and uncertainties not presently known to us or that are not currently believed to be material, if they occur, could affect our actual results and cause such results to differ materially from those expressed in forward-looking statements.

We are dependent on Retail Ventures to provide us with many key services for our business.

From 1998 until our initial public offering in July 2005, we were operated as a wholly-owned subsidiary of Value City Department Stores, Inc. or Retail Ventures, and many key services required by us for the operation of our business are currently provided by Retail Ventures and its subsidiaries. We have entered into agreements with Retail Ventures related to the separation of our business operations from Retail Ventures including, among others, a master separation agreement and a shared services agreement. Under the terms of the shared services agreement, which was effective as of January 30, 2005, Retail Ventures provides us with key services relating to import administration, risk management, information technology, tax, logistics, legal services, financial services, shared benefits administration and payroll. Additionally, Retail Ventures maintains insurance for us and for our directors, officers, and employees. In turn, we provide several subsidiaries of Retail Ventures with services relating to planning and allocation support, distribution services and transportation management, information technology, lease negotiation, store design and construction management. The initial term of the shared services agreement will expire at the end of fiscal 2007 and will be extended automatically for additional one-year terms unless terminated by one of the parties. We expect some of these services to be provided for longer or shorter periods than the initial term. We believe it is necessary for Retail Ventures to provide these services for us under the shared services agreement to facilitate the efficient operation of our business as we transition to becoming an independent public company. We, as a result, are dependent on our relationship with Retail Ventures for shared services.

Once the transition periods specified in the shared services agreement have expired and are not renewed, or if Retail Ventures does not or is unable to perform its obligations under the shared services agreement, we will be required to provide these services ourselves or to obtain substitute arrangements with third parties. We may be unable to provide these services because of financial or other constraints or be unable to timely implement substitute arrangements on terms that are favorable to us, or at all, which could have an adverse effect on our business, financial condition and results of operations.

We face security risks related to our electronic processing and transmission of confidential customer information. On March 8, 2005, Retail Ventures announced the theft of credit card and other purchase information relating to DSW customers. The security breach could materially adversely affect our reputation and business and subject us to liability.

As previously reported, on March 8, 2005, Retail Ventures announced that it had learned of the theft of credit card and other purchase information from a portion of DSW customers. On April 18, 2005, Retail Ventures issued the findings from its investigation into the theft. The theft covered transaction information involving approximately 1.4 million credit cards and data from transactions involving approximately 96,000 checks.

We and Retail Ventures contacted and continue to cooperate with law enforcement and other authorities with regard to this matter. We are involved in several legal proceedings arising out of this incident, including two putative class action lawsuits, which seek unspecified monetary damages, credit monitoring and other relief. Each of the two lawsuits seeks to certify a different class of consumers. One of the lawsuits seeks to certify a nationwide class that would include every consumer who used a credit card, debit card, or check to make purchases at DSW between November 2004 and March 2005 and whose transaction data was taken during the data theft incident. The other lawsuit seeks to certify a class of consumers that is limited geographically to consumers who made purchases at certain stores in Ohio.

In connection with this matter, we entered into a consent order with the Federal Trade Commission (“FTC”), which has jurisdiction over consumer protection matters. The FTC published the final order on March 14, 2006, and copies of the complaint and consent order are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

We have not admitted any wrongdoing or that the facts alleged in the FTC’s proposed unfairness complaint are true. Under the consent order, we will pay no fine or damages. We

33

have agreed, however, to maintain a comprehensive information security program and to undergo a biannual assessment of such program by an independent third party.

There can be no assurance that there will not be additional proceedings or claims brought against us in the future. We have contested and will continue to vigorously contest the claims made against us and will continue to explore our defenses and possible claims against others.

We estimate that the potential exposure for losses related to this theft, including exposure under currently pending proceedings, ranges from approximately $6.5 million to approximately $9.5 million. Because of many factors, including the early development of information regarding the theft and recoverability under insurance policies, there is no amount in the estimated range that represents a better estimate than any other amount in the range. Therefore, in accordance with Financial Accounting Standard No. 5, Accounting for Contingencies, we accrued a charge to operations in the first quarter of fiscal 2005 equal to the low end of the range set forth above, or $6.5 million. As the situation develops and more information becomes available, the amount of the reserve may increase or decrease accordingly. The amount of any such change may be material. As of October 28, 2006, the balance of the associated accrual for potential exposure was $3.1 million.

Although difficult to quantify, since the announcement of the theft, we have not discerned any material negative effect on sales trends we believe is attributable to the theft. However, this may not be indicative of the long-term developments regarding this matter.

The PIES (Premium Income Exchangeable Securities^SM) issued by Retail Ventures may adversely affect the market price for DSW Class A Common Shares.

The market price of our Class A Common Shares is likely to be influenced by the PIES issued by Retail Ventures. For example, the market price of our Class A Common Shares could become more volatile and could be depressed by (a) investors’ anticipation of the potential resale in the market of a substantial number of additional DSW Class A Common Shares received upon exchange of the PIES, (b) possible sales of our Class A Common Shares by investors who view the PIES as a more attractive means of equity participation in us than owning our Class A Common Shares and (c) hedging or arbitrage trading activity that may develop involving the PIES and our Class A Common Shares.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a)	Recent sales of unregistered securities. Not applicable.
(b)	Use of Proceeds. Not applicable.
(c)	Purchases of equity securities by the issuer and affiliated purchasers

We have not made purchases of our Common Shares during the quarter ended October 28, 2006. We do not anticipate paying cash dividends on our Common Shares in the foreseeable future. Presently, we expect that all of our future earnings will be retained for development of our business. The payment of any future dividends will be at the discretion of our board of directors and will depend upon, among other things, future earnings, operations, capital requirements, our general financial condition and general business conditions. Our credit facility restricts the payment of dividends by us or our subsidiaries, other than dividends paid in stock, and cash

34

dividends can only be paid to Retail Ventures by us up to the aggregate amount of $5.0 million, less the amount of any loan advances made to Retail Ventures by us or our subsidiaries.

Item 3. Defaults Upon Senior Securities. None.

Item 4. Submission of Matters to a Vote of Security Holders. None

Item 5. Other Information.

On December 5, 2006, Retail Ventures, Retail Ventures Services, Inc., Value City and Filene’s Basement, collectively the “RVI Entities”, entered into an IT Transfer and Assignment Agreement (the “IT Transfer Agreement”) with BTS. Under the terms of the IT Transfer Agreement, the RVI Entities will transfer certain information technology contracts to BTS. The IT Transfer Agreement is effective as of October 29, 2006.

Additionally, on December 5, 2006, DSW and Retail Ventures entered into an Amended and Restated Shared Services Agreement, effective as of October 29, 2006 (the “Amended Shared Services Agreement”). Under the terms of the Amended Shared Services Agreement, DSW, through BTS, will provide information technology services to Retail Ventures and its subsidiaries, including Value City and Filene’s Basement. Retail Ventures information technology associates are now employed by BTS. Additionally, DSW and Retail Ventures agreed to include other non-material changes in the Amended Shared Services Agreement.

On December 5, 2006, we entered into a Lease with 4300 Venture 34910, an affiliate of Schottenstein Stores Corporation, for a new corporate headquarters to be located in Columbus, Ohio. A copy of the Lease, a related lease for trailer parking and amendment to our existing home office lease, are attached hereto as Exhibits 10.3, 10.4 and 10.5, respectively.

Item 6. Exhibits. See Index to Exhibits on page 37.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DSW INC. (Registrant)
Date: December 6, 2006	By:	/s/ Douglas J. Probst
		Douglas J. Probst
		Chief Financial Officer (duly authorized officer and chief financial officer)

36

INDEX TO EXHIBITS

Exhibit Number	Description
10.1	Lease, dated June 30, 2006 between JLPK — Levittown NY LLC, an affiliate of Schottenstein Stores Corporation and DSW Inc., re: Levittown, NY DSW store
10.2	Lease, dated November 27, 2006 between JLP — Lynnhaven VA LLC, an affiliate of Schottenstein Stores Corporation and DSW Inc., re: Lynnhaven, Virginia DSW store
10.3	Lease, dated November 30, 2006 between 4300 Venture 34910 LLC, an affiliate of Schottenstein Stores Corporation, and DSW Inc., re: Home office
10.4	Lease, dated November 30, 2006 between 4300 East Fifth Avenue LLC, an affiliate of Schottenstein Stores Corporation, and DSW Inc., re: Trailer Parking spaces for home office.
10.5	Lease Amendment, dated November 30, 2006 between 4300 Venture 6729 LLC, an affiliate of Schottenstein Stores Corporation, and DSW Inc., re: warehouse and corporate headquarters
10.6	IT Transfer and Assignment Agreement dated October 29, 2006
10.7	Amended and Restated Shared Services Agreement between DSW Inc. and Retail Ventures, Inc., dated October 29, 2006.
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer
32.2	Section 1350 Certification of Chief Financial Officer

37

EX-10.1

Exhibit 10.1

L E A S E

LANDLORD:	JLPK – LEVITTOWN NY, LLC
	1800 Moler Road
	Columbus, Ohio 43207
TENANT:	DSW INC.
	4150 East Fifth Avenue
	Columbus, Ohio 43219
PREMISES:	Approximately 17,050 square feet at
	Caldor Shopping Center,
	Levittown, New York

TABLE OF CONTENTS

	Page
SECTION 1. PREMISES		1
SECTION 2. TERM		1
SECTION 3. COMMENCEMENT DATE		2
SECTION 4. RENEWAL OPTIONS		3
SECTION 5. MINIMUM RENT		3
SECTION 6. PERCENTAGE RENT		4
SECTION 7. TITLE ENCUMBRANCES		6
SECTION 8. RIGHT TO REMODEL		6
SECTION 9. UTILITIES		6
SECTION 10. GLASS		7
SECTION 11. PERSONAL PROPERTY		7
SECTION 12. RIGHT TO MORTGAGE		7
SECTION 13. SUBLEASE OR ASSIGNMENT		7
SECTION 14. COMMON AREAS		7
SECTION 15. OPERATION OF COMMON AREAS		8
SECTION 16. COMMON AREA MAINTENANCE, TENANT’S SHARE		8
SECTION 17. EMINENT DOMAIN		9
SECTION 18. TENANT’S TAXES		10
SECTION 19. RISK OF GOODS		10
SECTION 20. USE AND OCCUPANCY		10
SECTION 21. NUISANCES		12
SECTION 22. WASTE AND REFUSE REMOVAL		12
SECTION 23. DESTRUCTION OF PREMISES		12
SECTION 24. LANDLORD REPAIRS		13
SECTION 25. TENANT’S REPAIRS		13
SECTION 26. COVENANT OF TITLE AND PEACEFUL POSSESSION		14
SECTION 27. TENANT’S AND LANDLORD’S INSURANCE; INDEMNITY		15
SECTION 28. REAL ESTATE TAXES		17
SECTION 29. TENANT’S INSURANCE CONTRIBUTION		18
SECTION 30. FIXTURES		18
SECTION 31. SURRENDER		18
SECTION 32. HOLDING OVER		18

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	Page
SECTION 33. NOTICE		19
SECTION 34. DEFAULT		19
SECTION 35. WAIVER OF SUBROGATION		21
SECTION 36. LIABILITY OF LANDLORD; EXCULPATION		21
SECTION 37. RIGHTS CUMULATIVE		22
SECTION 38. MITIGATION OF DAMAGES		22
SECTION 39. SIGNS		22
SECTION 40. ENTIRE AGREEMENT		22
SECTION 41. LANDLORD’S LIEN – DELETED BY INTENTION		23
SECTION 42. BINDING UPON SUCCESSORS		23
SECTION 43. HAZARDOUS SUBSTANCES		23
SECTION 44. TRANSFER OF INTEREST		24
SECTION 45. ACCESS TO PREMISES		24
SECTION 46. HEADINGS		24
SECTION 47. NON-WAIVER		24
SECTION 48. SHORT FORM LEASE		24
SECTION 49. ESTOPPEL CERTIFICATE		24
SECTION 50. MASTER LEASE CONTINGENCIES		25
SECTION 51. PROVISIONS WITH RESPECT TO MASTER LEASE		25
SECTION 52. BROKER		25
SECTION 53. UNAVOIDABLE DELAYS		26
SECTION 54. TIMELY EXECUTION OF LEASE		26
SECTION 55. ACCORD AND SATISFACTION		26
SECTION 56. WAIVER OF JURY TRIAL		26
SECTION 57. LEASEHOLD FINANCING		26
SECTION 58. TENANT ALLOWANCE		27

LIST OF EXHIBITS:

EXHIBIT “A-1” SITE PLAN
EXHIBIT “A-2” LEGAL DESCRIPTION
EXHIBIT “B” INTENTIONALLY OMITTED
EXHIBIT “C” TENANT’S WORK
EXHIBIT “C-1” ASBESTOS ABATEMENT CONTRACT
EXHIBIT “D” EXISTING USE EXCLUSIVES AND PROHIBITED USES
EXHIBIT “E” TENANT PROTOTYPICAL SIGNAGE

ii

L E A S E

     THIS AGREEMENT OF LEASE, made effective the 30^th day of June, 2006 (the “Effective Date”), by and between JLPK – Levittown NY, LLC, a Delaware limited liability company (hereinafter referred to as “Landlord”), with offices at c/o Schottenstein Management Company, 1800 Moler Road, Columbus, Ohio 43207, and DSW INC., an Ohio corporation (hereinafter referred to as “Tenant”) with offices at 4150 East Fifth Avenue, Columbus, Ohio 43219.

W I T N E S S E T H:

SECTION 1. PREMISES

     (a) Landlord, in consideration of the rents to be paid and covenants and agreements to be performed by Tenant, does hereby lease unto Tenant approximately 17,050 square feet of leasable space (hereinafter referred to as the “premises” or “demised premises”) on the ground floor of an existing multi-tenant building (the “Building”) in the shopping center commonly known as Caldor Shopping Center on Route 24, City of Levittown, County of Nassau and State of New York (hereinafter referred to as the “Shopping Center” or “Center”). The location, size, and area of the demised premises and of the Shopping Center shall be substantially as shown on Exhibit “A-1” attached hereto and made a part hereof. A legal description of the Shopping Center is shown on Exhibit “A-2”, attached hereto and made a part hereof. Landlord shall not change the configuration of the Shopping Center so as to materially adversely affect access to, visibility of or parking for the premises without the prior written consent of Tenant, nor to the extent that it has the authority to do so under the Master Lease (as hereinafter defined), shall Landlord consent to or permit any such change in configuration.

     (b) Landlord holds a leasehold interest in the Building and the premises pursuant to the Master Lease. For purposes hereof, the “Master Lease” is that certain Lease dated May 5, 1970, by and between Miller Associates, a New York partnership (“Master Landlord”) and Children’s Town, U.S.A., Inc. Landlord is the successor-in-interest to the interest of Children’s Town U.S.A., Inc. in and to said Master Lease. This Lease is subject and subordinate to the Master Lease.

     (c) Landlord covenants and agrees that Landlord shall at all times comply with and fully perform all of its obligations under the Master Lease. Landlord shall not, during the term hereof, (i) do or suffer or permit anything to be done which would constitute a default under the Master Lease or would cause the Master Lease to be canceled, terminated or forfeited as to the demised premises by virtue of any rights of cancellation, termination, or forfeiture reserved or vested in Master Landlord under the Master Lease, (ii) exercise any right reserved or vested in Landlord to cancel, terminate or forfeit the Master Lease, including, without limitation, any termination rights for casualty or condemnation or (iii) modify, amend or terminate the Master Lease. Notwithstanding the foregoing, Tenant acknowledges that the Master Lease contains a recapture right in favor of the Master Landlord allowing the Master Landlord to terminate the Master Lease as to any space within the Building which ceases to be actively occupied and operated for business for a continuous period of eighteen (18) months and recapture that vacant space. Landlord shall not be required by virtue of this paragraph or any other provision of this Lease to prevent such a recapture from occurring with respect to any space in the Building other than the demised premises, or with respect to the demised premises in the event Tenant elects under Section 20 hereof to cease operation (go dark).

     (d) Landlord agrees to forward to Tenant, upon receipt thereof from Master Landlord, a copy of each notice of default received by Landlord in its capacity as tenant under the Master Lease.

SECTION 2. TERM

     The term of this Lease shall be for a period of fifteen (15) years beginning on the commencement date (as hereinafter defined), unless earlier terminated or extended as herein provided.

SECTION 3. COMMENCEMENT DATE

     (a) As herein used, the phrase “commencement date” shall mean the earlier of: (i) the day Tenant opens for business in the demised premises or (ii) one hundred fifty (150) days after Landlord has delivered possession of the demised premises to Tenant in the condition required by the terms of Section 3(b) of this Lease (the “Required Condition”). Landlord agrees to deliver the demised premises to Tenant in the Required Condition within thirty (30) days after the Effective Date (the “Delivery Date”). If Landlord does not deliver the demised premises to Tenant as required herein within three (3) days after the Delivery Date, Tenant may terminate this Lease or defer delivery until January 2, 2007. If Tenant defers delivery and Landlord does not thereafter deliver the demised premises to Tenant on or before January 2, 2007, Tenant may terminate this Lease. In the event that the demised premises are not delivered to Tenant in the Required Condition on or before the Delivery Date, the minimum rent due hereunder shall be adjusted so that, after the Rent Commencement Date, the Tenant shall receive a credit against minimum rent thereafter due Landlord equal to one (1) day of minimum rent for each day after the Delivery Date until delivery of the demised premises is made to Tenant consistent with the terms of this Lease. Time is of the essence regarding all dates set forth in this Section 3.

     (b) Possession of the demised premises shall not be deemed to have been given to Tenant until Landlord has, at its sole cost and expense, delivered actual possession of the premises to Tenant (i) in a water-tight, structurally sound condition, (ii) free of all Hazardous Substances, except those to be removed/abated by Tenant as set forth in Section 3(e) below, (iii) with a new roof, roof decking and roof system for the entire Building and (iv) free of any violation of laws, ordinances, regulations and building restrictions (collectively, the “Required Condition”). All work performed by Landlord to put the demised premises in the Required Condition and all Tenant’s Work shall be performed in compliance with all applicable federal, state and local laws, rules, regulations and code requirements.

     (c) Subject to the provisions of Section 53 hereof, Tenant shall, at its sole cost and expense, (i) promptly after the demised premises has been delivered to Tenant in the Required Condition, commence performance of the work described on Exhibit “C”, attached hereto and made a part hereof (“Tenant’s Work”) and (ii) within one hundred fifty (150) days after such delivery, cause Tenant’s Work to be completed. Landlord represents that all approvals of the Master Landlord required under the Master Lease have been obtained and that all building and other governmental permits necessary to perform Tenant’s Work can be obtained in the ordinary course of business from the applicable governmental authority. In the event that Master Landlord takes any action, or fails to take any necessary action, and as a result, necessary approvals/permits for the performance of Tenant’s Work cannot be obtained, or additional costs are incurred as a result thereof, or in the event that necessary governmental permits and approvals for Tenant’s Work cannot be obtained, Tenant shall have the right to terminate this Lease by written notice to Landlord, in which event Tenant shall have no further liability hereunder and Landlord shall reimburse Tenant for all costs incurred by Tenant in connection therewith.

Tenant’s Work shall be performed lien free by Tenant, in a good and workmanlike manner (employing materials of good quality) in compliance with all governmental requirements. In the event a mechanic’s lien is filed against the demised premises or the Shopping Center on account of Tenant’s Work, Tenant shall discharge or bond off same within thirty (30) days from the filing thereof. If Tenant fails to discharge said lien, Landlord may bond off or pay same without inquiring into the validity or merits of such lien, and all sums so advanced shall be paid on demand by Tenant as additional rent. Prior to the date on which possession of the demised premises is delivered to Tenant as aforesaid, Tenant shall have the right to enter the demised premises at its own risk rent-free for the purpose of preparing for its occupancy, provided that it does not unreasonably interfere with Landlord’s efforts to put the demised premises in the Required Condition.

     (d) From the date upon which the demised premises are delivered to Tenant for its work or such earlier time that Tenant enters the demised premises to prepare for its occupancy until the commencement date of the lease term, Tenant shall observe and perform all of its obligations under this Lease (except Tenant’s obligation to operate and pay minimum rent, percentage rent and additional rent.) In the event Tenant fails to open for business within one hundred eighty (180) days after the date possession of the demised premises has been delivered

to Tenant, Landlord, in addition to any and all other available remedies, may require Tenant to pay to Landlord, in addition to all other rent and charges herein, as liquidated damages and not as a penalty, an amount equal to one day’s minimum rent for each day such failure to open continues.

     (e) The parties acknowledge that asbestos is present in the premises, as revealed in that certain Pre-Demolition Asbestos Survey Report more fully described in Section 43(b) hereof. Based thereon, Tenant has entered into a contract for the abatement of asbestos at the premises, as more fully set forth on Exhibit C-1, attached hereto. At such time as Tenant is invoiced for such Report and/or for such abatement work, Tenant shall submits copies thereof to Landlord and Landlord shall pay to Tenant the amount of such invoice(s) within ten (10) days thereafter. Such payments by Landlord shall be in addition to payment of the Tenant Allowance as set forth in Section 58 hereof. Notwithstanding anything to the contrary contained herein, including Section 36 hereof, in the event Landlord does not timely pay the amount of such invoice(s) to Tenant, (a) Landlord shall pay to Tenant interest on such unpaid amounts at eighteen percent (18%) per annum and (b) Tenant shall have the right to deduct any and all such amounts owed Tenant against all minimum rent and all percentage rental (but no other additional rent components) thereafter due Landlord until such time as Tenant has been credited the full amount of the invoice(s) plus applicable interest.

SECTION 4. RENEWAL OPTIONS

     (a) Provided Tenant has fully complied with all of the terms, provisions, and conditions on its part to be performed under this Lease and is not in default under this Lease, Tenant may, by giving written notice to the Landlord at least six (6) months on or before the expiration of the initial term of this Lease, extend such term for a period of five (5) years upon the same covenants and agreements as are herein set forth, except that the minimum rent during the first renewal term shall be increased to Forty-five Thousand One Hundred Eleven and 46/100^th Dollars ($45,111.46) each month.

     (b) Provided Tenant has fully complied with all of the terms, provisions and conditions on its part to be performed under this Lease, is not in default under this Lease and has exercised its first option to renew hereunder, Tenant may, by giving written notice to the Landlord at least six (6) months on or before the expiration of the first extended term of this Lease, extend such term for an additional period of five (5) years upon the same covenants and agreements as the first extended term except that the minimum rent (as increased pursuant to Section 4(a) above) during this second renewal term shall be further increased to Fifty-two Thousand Two Hundred Fifteen and 63/100^th Dollars ($52,215.63) each month.

     (c) Provided Tenant has fully complied with all of the terms, provisions and conditions on its part to be performed under this Lease, is not in default under this Lease and has exercised its second option to renew hereunder, Tenant may, by giving written notice to the Landlord at least six (6) months on or before the expiration of the second extended term of this Lease, extend such term for an additional period of five (5) years upon the same covenants and agreements as the second extended term except that the minimum rent (as increased pursuant to Section 4(b) above) during this third renewal term shall be further increased to Sixty Thousand Thirty and 21/100^th Dollars ($60,030.21) each month. The initial term and any renewal term(s) are hereinafter collectively referred to as the “term”.

     (d) Landlord agrees that it shall timely exercise any and all options under the Master Lease so as to extend the term thereof for a period of time equal to or greater than the term hereof, as extended by the exercise by Tenant of any of its rights under this Section 3.

SECTION 5. MINIMUM RENT

     (a) Tenant agrees to pay to Landlord, as minimum rent for the demised premises, equal consecutive monthly installments of Twenty-Nine Thousand Four Hundred Eighty-two and 29^/100^th Dollars ($29,482.29), commencing on the commencement date, and continuing on the first day of each calendar month during years one (1) through five (5) of the initial term of this Lease, monthly installments of Thirty-four Thousand Four Hundred Fifty-five and 21/100^th

Dollars ($34,455.21) each calendar month during years six (6) through ten (10), and monthly installments of Thirty-Nine Thousand Four Hundred Twenty-eight and 13/100^th Dollars ($39,428.13) each calendar month during years eleven (11) through fifteen (15) of the initial term of this Lease. All such rental shall be payable to Landlord in advance, without prior written notice or demand and without any right of deduction, abatement, counterclaim or offset whatsoever (unless specifically permitted in this Lease). Except as expressly set forth herein to the contrary, in no event shall Tenant have the right to offset more than twenty-five percent (25%) of minimum rent in any calendar month, and Tenant shall have no right to offset against any additional rent other than any percentage rent payable hereunder. As used in this Lease, the terms “minimum rent” and “minimum rental” mean the minimum rental set forth in this Section 5(a). As used in this Lease, the terms “rent and “rental” mean minimum rental, percentage rental, additional rental and all other sums due and owing from Tenant to Landlord under this Lease.

     (b) If the Lease term shall commence on a day other than the first day of a calendar month or shall end on a day other than the last day of a calendar month, the minimum rental for such first or last fractional month shall be such proportion of the monthly minimum rental as the number of days in such fractional month bears to the total number of days in such calendar month.

     (c) In addition to minimum rent as set forth in this Section 5, Tenant shall initially pay to Landlord, as additional rental, simultaneously with the payment of minimum rental called for under Section 5(a) above, (i) the estimated monthly amount of Tenant’s Proportionate Share of Maintenance Costs (provided for in Section 16 hereof), as reasonably estimated by Landlord, (ii) Nine and 35/100 Dollars ($9.35) per square foot, payable in equal monthly installments of Thirteen Thousand Two Hundred Eighty-Four and 79/100 Dollars ($13,284.79) as the estimated monthly amount of Tenant’s Proportionate Tax Share (provided for in Section 28 hereof) and (iii) Fifteen Cents ($0.15) per square foot, payable in equal monthly installments of Two Hundred Thirteen and 13/100 Dollars ($213.13), as the estimated monthly amount of Tenant’s Proportionate Insurance Share (provided for in Section 29 hereof).

     (d) Until further notice to Tenant, all rental payable under this Lease shall be payable to Landlord and mailed to Landlord at c/o Schottenstein Management Company, 1800 Moler Road, Columbus, Ohio 43207.

     (e) In the event any sums required under this Lease to be paid are not received when due, then all such amounts shall bear interest from the due date thereof until the date paid at the rate of interest equal to two percent (2%) over the prime rate in effect from time to time as established by National City Bank, Columbus, Ohio (the “Interest Rate”), and shall be due and payable by Tenant without notice or demand, Tenant shall pay the foregoing interest thereon in addition to all default remedies of Landlord pursuant to Section 34 below.

SECTION 6. PERCENTAGE RENT

     (a) Beginning with the first lease year, Tenant shall pay to the Landlord, in addition to minimum rent, upon the conditions and at the times hereinafter set forth, percentage rent equal to two percent (2%) of Tenant’s gross sales (as hereinafter defined) in excess of the number obtained by dividing (a) minimum rent for the applicable lease year by (b) the number .04. The annual percentage rent shall be paid by Tenant to the Landlord within ninety (90) days after the end of each lease year. Each such payment shall be accompanied by a statement signed by an authorized representative of Tenant setting forth Tenant’s gross sales for such lease year. For purposes of permitting verification by the Landlord of the gross sales reported by Tenant, the Landlord shall have the right, not more than one (1) time per lease year, upon not less than five (5) business days notice to Tenant, to audit during normal business hours in Tenant’s corporate office, Tenant’s books and records relating to Tenant’s gross sales for a period of two (2) years after the end of each lease year. Landlord agrees that no contingency fee auditor shall be employed by Landlord for the purpose of conducting any such audit. If such an audit reveals that Tenant has understated its gross sales by more than three percent (3%) for any lease year, Tenant, in addition to paying the additional percentage rent due, shall pay the reasonable cost of the audit within thirty (30) days of Tenant’s receipt of Landlord’s demand for the same and copies of all bills or invoices on which such cost is based.

     (b) For purposes hereof, a lease year shall consist of a consecutive twelve (12) calendar month period commencing on the commencement of the term of this Lease; provided, however, that if this Lease commences on a day other than the first day of a calendar month, then the first lease year shall consist of such fractional month plus the next succeeding twelve (12) full calendar months, and the last lease year shall consist of the period commencing from the end of the preceding lease year and ending with the end of the term of the Lease, whether by expiration of term or otherwise. In the event percentage rental shall commence to accrue on a day other than the first day of a lease year, the percentage rental for such lease year shall be adjusted on a pro rata basis, based upon the actual number of days in such lease year.

     (c) Each lease year shall constitute a separate accounting period, and the computation of percentage rental due for any one period shall be based on the gross sales for such lease year.

     (d) The term “gross sales” as used in this Lease is hereby defined to mean the gross dollar aggregate of all sales or rental or manufacture or production of merchandise and all services, income and other receipts whatsoever of all business conducted in, at or from any part of the demised premises, whether for cash, credit, check, charge account, gift or merchandise certificate purchased or for other disposition of value regardless of collection. Should any departments, divisions or parts of Lessee’s business be conducted by any subleases, concessionaires, licensees, assignees or others, then there shall be included in Lessee’s gross sales, all “gross sales” of such department, division or part, whether the receipts be obtained at the demised premises or elsewhere in the same manner as if such business had been conducted by Lessee. Gross sales shall exclude the following: (i) any amount representing sales, use, excise or similar taxes; (ii) the amount of refunds, exchanges or returns by customers or allowances to customers.

     (e) The percentage rental, if any, shall be paid within ninety (90) days after the end of each lease year, accompanied by a statement in writing signed by Tenant setting forth its gross sales from the sale of all items for such lease year. Tenant shall keep at its principal executive offices, where now or hereafter located, true and accurate accounts of all receipts from the demised premises. Landlord, its agents and accountants, shall have access to such records at any and all times during regular business hours for the purpose of examining or auditing the same. Tenant shall also furnish to Landlord any and all supporting data in its possession relating to gross sales and any deductions therefrom as Landlord may reasonably require. Landlord agrees to keep any information obtained therefrom confidential, except as may be required for Landlord’s tax returns, or in the event of litigation or arbitration where such matters are material, or required to be provided to the Master Landlord under the Master Lease.

     (f) Tenant shall at all times maintain accurate records which shall be available for Landlord’s inspection at any reasonable time.

     (b) If Landlord, for any reason, questions or disputes any statement of percentage rental prepared by Tenant, then Landlord, at its own expense, may employ such accountants as Landlord may select to audit and determine the amount of gross sales for the period or periods covered by such statements. If the report of the accountants employed by Landlord shall show any additional percentage rental payable by Tenant, then Tenant shall pay to Landlord such additional percentage rental plus interest at one (1) point over the prime rate, commencing on the date such percentage rentals should have been paid, within thirty (30) days after such report has been forwarded to Tenant, unless Tenant shall, within said thirty (30) day period, notify Landlord that Tenant questions or disputes the correctness of such report. In the event that Tenant questions or disputes the correctness of such report, the accountants employed by Tenant and the accountants employed by Landlord shall endeavor to reconcile the question(s) or dispute(s) within thirty (30) days after the notice from Tenant questioning or disputing the report of Landlord’s accountants. In the event that it is finally determined by the parties that Tenant has understated percentage rent for any Lease year by three percent (3%) or more, Tenant shall pay the cost of the audit. Furthermore, if Tenant’s gross sales cannot be verified due to the insufficiency or inadequacy of Tenant’s records, then Tenant shall pay the cost of the audit. The cost of any audit resulting from failure to report percentage rent after written notification of default shall be at the sole cost of Tenant.

SECTION 7. TITLE ENCUMBRANCES

     Tenant’s rights under this Lease are subject and subordinate to those title matters set forth in Landlord’s owner’s title insurance commitment issued by First American Title Insurance Company of New York, being Title No.NCS-209129-CHI1, dated January 15, 2006, specifically including but not limited to the terms and conditions of a certain Agreement made as of July 30, 1970 among Nassau Mall, Inc., Miller Associates, and Supermarkets General Corporation recorded in Liber 8163, Page 85 of Nassau County, New York real estate records (“OEA”). Tenant agrees that it shall abide by the terms and conditions of the OEA.

SECTION 8. RIGHT TO REMODEL

     (a) Tenant may, at Tenant’s expense, make repairs and alterations to the interior non-structural portions of the demised premises and remodel the interior of the demised premises, in such manner and to such extent as may from time to time be deemed necessary by Tenant for adapting the demised premises to the requirements and uses of Tenant and for the installation of its fixtures, appliances and equipment. Any structural or exterior alteration may only be made by Tenant with the prior written approval of Landlord and Master Landlord, to the extent required by the provisions of the Master Lease, which approval may be granted or withheld in Landlord’s sole discretion. All plans for any structural alterations shall be submitted to Landlord for endorsement of its approval prior to commencement of work. Upon Landlord’s request, Tenant shall be obligated, if it remodels and/or alters the demised premises, to restore the demised premises upon vacating the same. Tenant will indemnify and save harmless the Landlord from and against all mechanics liens or claims by reason of repairs, alterations or improvements which may be made by Tenant to the demised premises. Inasmuch as any such alterations, additions or other work in or to the demised premises may constitute or create a hazard, inconvenience or annoyance to the public and other tenants in the Shopping Center, Tenant shall, if so directed in writing by Landlord, erect barricades, temporarily close the demised premises, or affected portion thereof, to the public or take whatever measures are necessary to protect the building containing the demised premises, the public and the other tenants of the Shopping Center for the duration of such alterations, additions or other work. If Landlord determines, in its sole judgment, that Tenant has failed to take any of such necessary protective measures, and Tenant fails to cure same within ten (10) days after notice thereof, Landlord may do so and Tenant shall reimburse Landlord for the cost thereof within ten (10) days after Landlord bills Tenant therefor.

     (b) All such work, including Tenant’s Work pursuant to Exhibit “C” shall be performed lien free by Tenant. In the event a mechanic’s lien is filed against the premises or the Shopping Center, Tenant shall discharge or bond off same within thirty (30) days from the filing thereof. If Tenant fails to discharge said lien, Landlord may bond off or pay same without inquiring into the validity or merits of such lien, and all sums so advanced shall be paid on demand by Tenant as additional rent.

SECTION 9. UTILITIES

     (a) The Tenant agrees to be responsible and pay for all public utility services rendered or furnished to the demised premises during the term hereof, including, but not limited to, heat, water, gas, electric, steam, telephone service and sewer services, together with all taxes, levies or other charges on such utility services when the same become due and payable. Landlord will separately meter or submeter utilities prior to delivery. Landlord shall provide, or cause to be provided, all such utility services to the premises during the term of this Lease. Tenant shall be responsible for all utility services and costs inside the premises. Landlord shall not be liable for the quality or quantity of or interference involving such utilities unless due directly to Landlord’s negligence.

     (b) During the term hereof, whether the demised premises are occupied or unoccupied, Tenant agrees to maintain heat sufficient to heat the demised premises so as to avert any damage to the demised premises on account of cold weather.

SECTION 10. GLASS

     The Tenant shall maintain the glass part of the demised premises, promptly replacing any breakage and fully saving the Landlord harmless from any loss, cost or damage resulting from such breakage or the replacement thereof.

SECTION 11. PERSONAL PROPERTY

     The Tenant further agrees that all personal property of every kind or description that may at any time be in or on the demised premises shall be at the Tenant’s sole risk, or at the risk of those claiming under the Tenant, and that the Landlord shall not be liable for any damage to said property or loss suffered by the business or occupation of the Tenant caused in any manner whatsoever.

SECTION 12. RIGHT TO MORTGAGE

     (a) Landlord reserves the right to subject and subordinate this Lease at all times to the lien of any leasehold deed of trust, mortgage or mortgages now or hereafter placed upon Landlord’s interest in the Master Lease; provided, however, that no default by Landlord, under any deed of trust, mortgage or mortgages, shall affect Tenant’s rights under this Lease, so long as Tenant performs the obligations imposed upon it hereunder and is not in default hereunder, and Tenant attorns to the holder of such deed of trust or mortgage, its assignee or the purchaser at any foreclosure sale. Any such subordination shall be contingent upon Tenant receiving a commercially reasonable non-disturbance agreement. It is a condition, however, to the subordination and lien provisions herein provided, that Landlord shall procure from any such mortgagee an agreement in writing, which shall be delivered to Tenant or contained in the aforesaid subordination agreement, providing in substance that so long as Tenant shall faithfully discharge the obligations on its part to be kept and performed under the terms of this Lease and is not in default under the terms hereof, its tenancy will not be disturbed nor this Lease affected by any default under such mortgage.

     (b) Wherever notice is required to be given to Landlord pursuant to the terms of this Lease, Tenant will likewise give such notice to any mortgagee of Landlord’s interest in the Master Lease upon notice of such mortgagee’s name and address from Landlord. Furthermore, such mortgagee shall have the same rights to cure any default on the part of Landlord that Landlord would have had.

SECTION 13. SUBLEASE OR ASSIGNMENT

     (a) Subject to the provisions of the Master Lease, Tenant may assign Tenant’s interest in this Lease or sublet all or any portion of the demised premises for any lawful retail use.

     Tenant may grant licenses and/or concessions within the demised premises. Any such assignee or Tenant shall be bound by the terms of this Lease. Tenant shall deliver to Landlord in the ordinary course of its business an instrument whereby the assignee or entity succeeding to Tenant’s interest hereunder agrees to be bound by the terms of this Lease.

     In the event of any assignment of this Lease or subletting of the demised premises, in whole or in part, Tenant shall remain fully and primarily liable hereunder.

     (b) Landlord may assign Landlord’s interest in this Lease without the consent of Tenant (a) to any entity to which Landlord transfers its Master Lease leasehold interest in the Master Lease provided such entity (i) agrees in writing to be bound by all the terms of this Lease and (ii) such assignment is pursuant to a bona fide arm’s length transaction not designed to reduce Landlord’s liability or to otherwise exempt Landlord from any provision of this Lease or (b) subject to Section 12, as security for any indebtedness undertaken by Landlord.

SECTION 14. COMMON AREAS

     Common areas means all areas and facilities in the Shopping Center which are designated as “Common Facilities” under the Master Lease or otherwise provided and so designated by

Master Landlord and made available by Master Landlord, or Landlord to the extent Landlord has the right to do so under the Master Lease, in the exercise of good business judgment for the common use and benefit of tenants of the Shopping Center and their customers, employees and invitees. Common areas shall include (to the extent the same are constructed), but not be limited to, the parking areas, sidewalks, landscaped areas, corridors, stairways, boundary walls and fences, incinerators, truckways, service roads, and service areas not reserved for the exclusive use of Tenant or other tenants.

SECTION 15. OPERATION OF COMMON AREAS

     (a) Subject to the provisions of the Master Lease, Landlord shall at all times have exclusive control of the common areas and may at any time and from time to time: (i) promulgate, modify and amend reasonable rules and regulations for the use of the common areas, which rules and regulations shall be binding upon the Tenant upon delivery of a copy thereof to the Tenant; (ii) temporarily close any part of the common areas, including but not limited to closing the streets, sidewalks, road or other facilities to the extent necessary to prevent a dedication thereof or the accrual of rights of any person or of the public therein; (iii) exclude and restrain anyone from the use or occupancy of the common areas or any part thereof except bona fide customers and suppliers of the tenants of the Shopping Center who use said areas in accordance with the rules and regulations established by Landlord; and (iv) engage others to operate and maintain all or any part of the common areas, on such terms and conditions as Landlord shall, in its sole judgment, deem reasonable and proper.

     (b) Subject to the rights granted in the Master Lease to conduct sidewalk sales and otherwise use the common areas for sales purposes, Tenant shall keep all common areas free of obstructions created or permitted by Tenant. Except as aforesaid, Tenant shall permit the use of the common areas only for normal parking and ingress and egress by its customers and suppliers to and from the demised premises. If in Landlord’s opinion unauthorized persons are using any of the common areas by reason of Tenant’s occupancy of the demised premises, Landlord shall have the right at any time to remove any such unauthorized persons from said areas or to restrain unauthorized persons from said areas. Landlord, Tenant, and others constructing improvements or making repairs or alterations in the Shopping Center shall have the right to make reasonable use of portions of the common areas.

SECTION 16. COMMON AREA MAINTENANCE, TENANT’S SHARE

     (a) Tenant shall pay as additional rental, simultaneously with the payment of minimum rental called for under Section 5(a), the monthly amount reasonably estimated by Landlord as Tenant’s Proportionate Share of the “Maintenance Costs” (as defined in Section 16(c) below) for the operation and maintenance of the common areas as set forth in Section 5(c).

     (b) The Maintenance Costs for the common areas shall be computed on an accrual basis, under generally accepted accounting principles, and shall include all costs of operating, maintaining, repairing and replacing the common areas, including by way of example but not limitation: (i) cost of labor (including worker’s compensation insurance, employee benefits and payroll taxes); (ii) materials, and supplies used or consumed in the maintenance or operation of the common area; (iii) the cost of operating and repairing of the lighting; (iv) cleaning, painting, removing of rubbish or debris, snow and ice, private security services, and inspecting the common areas; (v) the cost of repairing and/or replacing paving, curbs, walkways, markings, directional or other signs; landscaping, and drainage and lighting facilities; (vi) rental paid for maintenance of machinery and equipment; (vii) cost of commercial general liability insurance and property insurance for property in the common areas which are not part of the building and/or demised premises; and (viii) a reasonable allowance to Landlord for Landlord’s supervision, which allowance shall not in an accounting year exceed fifteen percent (15%) of the total of all Maintenance Costs for such accounting year (all of the foregoing are collectively referred to herein as “Maintenance Costs”). Notwithstanding the foregoing, costs of a capital nature, including all capital improvements, alterations, repairs and/or replacements, shall not be included in Maintenance Costs, except for repaving costs as set forth in (v) above, and the cost of all roof repairs and replacements to the Building, for which the yearly depreciation, calculated on a straight-line basis and amortized over the useful life of such item in accordance with IRS code guidelines, shall be included as a Maintenance Cost, but in no event shall such amortization be over less than five (5) years.

     (c) Landlord shall maintain accurate and detailed records of all Maintenance Costs for the common areas in accordance with generally accepted accounting principles. For purposes of this section, “Tenant’s Proportionate Share of Maintenance Costs” shall be the product of the applicable cost or expense, multiplied by a fraction, the numerator of which shall be the gross leasable area (expressed in square feet) of the demised premises and the denominator of which shall be the gross leasable area (expressed in square feet) of all leasable space in the Building. Tenant’s Proportionate Share is presently Thirty-six and 11/100^th Percent (36.11%), which amount is subject to change from time to time during the term of this Lease. Tenant acknowledges that, notwithstanding the fact that there are other tenants of the Shopping Center, Tenant and the other occupants of the Building (or, if any portion of the Building is not occupied, Landlord) shall, in the aggregate, be responsible for one hundred percent (100%) of the Maintenance Costs for the Center.

     (d) The actual amount of Tenant’s Proportionate Share of all Maintenance Costs shall be computed by Landlord within one hundred eighty (180) days after the end of each accounting year (which Landlord may change from time to time). At this time Landlord shall furnish to Tenant a statement showing in reasonable detail the actual Maintenance Costs incurred during such accounting year and Tenant’s Proportionate Share thereof (prorated for any partial Lease year, with appropriate adjustments to reflect any change in the floor area of the premises or the gross leasable area of the Building occurring during such accounting year). Any excess payments from Tenant shall be applied to the next installments of the Maintenance Costs hereunder, or refunded by Landlord. Any underpayments by Tenant shall be paid to Landlord within thirty (30) days after receipt of such reconciliation statement. Tenant’s estimated monthly Maintenance Cost hereunder may be adjusted by written notice from Landlord.

     (e) If Tenant, for any reason in the exercise of good business judgment, questions or disputes any statement of Maintenance Costs prepared by Landlord, then Tenant, at its own expense, may employ such accountants as Tenant may select to review Landlord’s books and records solely with respect to Maintenance Costs during the prior two Lease years and to determine the amount of Maintenance Costs for the period or periods covered by such statements. If the report of the accountants employed by Tenant shall show any overcharge paid by Tenant, then Tenant shall receive a credit from Landlord for such difference. Any underpayment shall be paid by Tenant. Tenant agrees that no contingency fee auditors shall be employed by Tenant for the purpose of conducting any such audit. In the event that Landlord questions or disputes the correctness of such report, the accountants employed by Tenant and the accountants employed by Landlord shall endeavor to reconcile the question(s) or dispute(s) within thirty (30) days after the notice from Tenant questioning or disputing the report of Landlord’s accountants. In the event that it is finally determined by the parties that Landlord has overstated Maintenance Costs for any Lease year by three percent (3%) or more, Landlord shall pay the reasonable cost of the audit. Furthermore, if Landlord’s Maintenance Costs cannot be verified due to the insufficiency or inadequacy of Landlord’s records, then Landlord shall pay the cost of the audit.

SECTION 17. EMINENT DOMAIN

     (a) In the event the entire premises or any part thereof shall be taken or condemned either permanently or temporarily for any public or quasi-public use or purpose by any competent authority in appropriation proceedings or by any right of eminent domain, the entire compensation or award therefore, including leasehold, reversion and fee, shall belong to the Landlord and Tenant hereby assigns to Landlord all of Tenant’s right, title and interest in and to such award.

     (b) In the event that only a portion of the demised premises, not exceeding twenty percent (20%) of same, shall be so taken or condemned, and the portion of the demised premises not taken can be repaired within ninety (90) days from the date of which possession is taken for the public use so as to be commercially fit for the operation of Tenant’s business, the Landlord at its own expense shall so repair the portion of the demised premises not taken and there shall be an equitable abatement of rent for the remainder of the term and/or extended terms. The entire award paid on account thereof shall be paid to the Landlord. If the portion of the demised premises not taken cannot be repaired within ninety (90) days from the date of which possession is taken so as to be commercially fit for the operation of Tenant’s business, then this Lease shall terminate and become null and void from the time possession of the portion taken is required for

public use, and from that date on the parties hereto shall be released from all further obligations hereunder except as herein stated and Tenant shall have no claim for any compensation on account of its leasehold interest. No other taking, appropriation or condemnation shall cause this Lease to be terminated. Any such appropriation or condemnation proceedings shall not operate as or be deemed an eviction of Tenant or a breach of Landlord’s covenant of quiet enjoyment and Tenant shall have no claim for any compensation on account of its leasehold interest.

     (c) In the event that more than 20% of the demised premises shall at any time be taken by public or quasi-public use or condemned under eminent domain, then at the option of the Landlord or Tenant upon the giving of thirty (30) days written notice (after such taking or condemnation), this Lease shall terminate and expire as of the date of such taking and any prepaid rental shall be prorated as of the effective date of such termination.

     (d) The rights of Landlord and Tenant set forth in this Section 17 are subject to the rights of the Master Landlord to terminate the Master Lease, as therein provided, in which event this Lease shall terminate simultaneously.

SECTION 18. TENANT’S TAXES

     Tenant further covenants and agrees to pay promptly when due all taxes assessed against Tenant’s fixtures, furnishings, equipment and stock-in trade placed in or on the demised premises during the term of this Lease.

SECTION 19. RISK OF GOODS

     All personal property, goods, machinery, and merchandise in said demised premises shall be at Tenant’s risk if damaged by water, fire, explosion, wind or accident of any kind, and Landlord shall have no responsibility therefore or liability for any of the foregoing and Tenant hereby releases Landlord from such liability.

SECTION 20. USE AND OCCUPANCY

     (a) Tenant agrees to initially open and operate a DSW for the retail sales of shoes and other footwear in the demised premises, fully staffed and stocked and equivalent to other DSW stores operated by Tenant in the State of New York (the “Permitted Use”). Tenant may thereafter change its use to any other lawful retail use, subject to (i) any restriction on use imposed by the Master Lease, (ii) those exclusives and prohibited uses set forth on Exhibit “D”, attached hereto and made a part hereof, which are the exclusives and prohibited uses in effect for the Building as of the date hereof, for so long as and to the extent said exclusives and prohibited uses are still in full force and effect, and (iii) exclusives and prohibited uses hereafter granted for tenants leasing more than 20,000 square feet of space elsewhere within the Building, for so long as and to the extent said exclusives are still in full force and effect.

     Landlord represents and warrants to Tenant that there is no restriction in the OEA, Master Lease or otherwise on the use of the demised premises by Tenant for the Permitted Use. Notwithstanding the foregoing, however, Tenant acknowledges that a claim may be asserted under the OEA that a restriction currently exists against the operation of a department store or discount department store in the Shopping Center. In the event that such a claim is asserted Landlord shall not be in default of the foregoing representation, but nevertheless agrees that it shall indemnify, defend and hold Tenant harmless in the event that Tenant incurs any loss, cost, damage or expense (including reasonable attorney’s fees and expenses) on account of any claim which is or may be asserted that Tenant’s use of the demised premises for the Permitted Use is not permitted or is restricted in any material manner by the terms of the OEA.

     (b) For so long as Tenant is continuously and regularly operating its business in the demised premises, Landlord will not lease any space within the Building or permit any space within the Building to be used by any person, persons, partnership or entity who devotes five percent (5%) or more of its selling area to the sale of footwear (the “Exclusive Use”). The foregoing limitation shall not apply to typical shoe departments found in department stores, junior department stores, general merchandise and discount stores, and clothing retailers, such as

Target, Marshalls and similar type stores. Tenant acknowledges that this Section 20(b) applies only to the Building and that Master Landlord is not restricted by the terms hereof.

     (c) Tenant shall at all times conduct its operations on the demised premises in a lawful manner and shall, at Tenant’s expense, comply with all laws, rules, orders, ordinances, directions, regulations, and requirements of all governmental authorities, now in force or which may hereafter be in force, which shall impose any duty upon Landlord or Tenant with respect to the business of Tenant and the use, occupancy or alteration of the demised premises. Tenant shall comply with all requirements of the Americans with Disabilities Act, and shall be solely responsible for all alterations within the demised premises in connection therewith. Tenant covenants and agrees that the demised premises shall not be abandoned or left vacant and that only minor portions of the demised premises shall be used for office or storage space in connection with Tenant’s business conducted in the demised premises.

     Without being in default of this Lease, Tenant shall have the right to cease operating (go dark) at any time and for whatever reason after the first day of operations. Notwithstanding the foregoing, Tenant’s right to vacate (go dark), shall not release or excuse the Tenant from any obligations or liabilities, including the payment of minimum rent and additional rent and other charges, under this Lease without the express written consent of Landlord. In the event Tenant fails to (i) open and operate within ninety (90) days after delivery of the demised premises or (ii) operate for one hundred twenty (120) or more consecutive days, Landlord shall have the right, effective upon thirty (30) days prior written notice to Tenant, to terminate the Lease as Landlord’s sole remedy, provided that if Tenant recommences operating fully stocked in substantially all of the premises within such thirty (30) days, Landlord’s termination shall be null and void. In the event Tenant fails to open and operate as provided above or shall cease operating as provided above, Landlord’s sole remedy on account thereof shall be limited to the right to elect to recapture the premises and terminate the Lease, whereupon there shall be no further liability of the parties hereunder. Such termination shall be effective upon written notice to Tenant any time prior to Tenant reopening for business in the demised premises. Provided, however, in the event Landlord has not so elected to recapture, Tenant shall have right to notify Landlord of Tenant’s intention to reopen for business in the demised premises within sixty (60) days, followed by Tenant’s actually reopening for business fully stocked in substantially all of the demised premises within such sixty (60) day period, which notice and actual reopening shall toll Landlord’s right to recapture. Tenant acknowledges that if it ceases operating at the demised premises for a continuous period of eighteen (18) months, the Master Landlord may terminate the Master Lease as to the demised premises, and that if the Master Landlord exercises that right, this Lease shall automatically terminate.

     (d) Landlord and Tenant each agree that during the term of this Lease, it shall not use or permit to be used any space in the Building for any use prohibited by the Master Lease or for the operation of a bingo parlor, bar, tavern, restaurant, cocktail lounge, adult book or adult video store (defined for the purposes hereof as a store devoting ten percent (10%) or more of its floor space to offering books and/or video materials for sale or for rent which are directed to or restricted to adult customers due to sexually explicit subject matter or for any other reason making it inappropriate for general use), adult theater or “strip-tease” establishment, automotive maintenance or automotive repair facility, warehouse, car wash, pawn shop, check cashing service, establishment selling second hand goods, flea market, entertainment or recreational facility (as defined below), training or educational facility (as defined below); the renting, leasing, selling or displaying of any boat, motor vehicle or trailer; industrial or manufacturing purposes; a carnival, circus or amusement park; a gas station, facility for the sale of paraphernalia for use with illicit drugs, funeral home, blood bank or mortuary, gambling establishment, banquet hall, auditorium or other place of public assembly, second-hand or surplus store, gun range; the sale of fireworks; a veterinary hospital or animal raising facility; the storage of goods not intended to be sold from the Center; a video rental store, karate center, central laundry or dry cleaning plant, supermarket or any facility which is illegal or dangerous, constitutes a nuisance, emits offensive odors, fumes, dust or vapors or loud noise or sounds or is inconsistent with community oriented shopping centers. For the purposes of this Section 20(d), the phrase “entertainment or recreational facility” shall include, without limitation, a movie or live theater or cinema, bowling alley, skating rink, gym, health spa or studio, dance hall or night club, billiard or pool hall, massage parlor, health club, game parlor or video arcade (which shall be defined as any store containing more than five (5) electronic games) or any other facility operated solely for entertainment purposes (such as a “laser tag” or “virtual reality” theme

operation). For the purposes of this Section 20(d), the phrase “training or educational facility” shall include, without limitation, a beauty school, nail salon, barber college, reading room, place of instruction or any other operation catering primarily to students or trainees as opposed to customers.

SECTION 21. NUISANCES

     Tenant shall not perform any acts or carry on any practice which may injure the demised premises or be a nuisance or menace to other tenants in the Shopping Center.

SECTION 22. WASTE AND REFUSE REMOVAL

     Tenant covenants that it will use, maintain and occupy said demised premises in a careful, safe, lawful and proper manner and will not commit waste therein. Landlord or its agent shall have access at all reasonable times to the demised premises for purposes of inspecting and examining the condition and maintenance of the demised premises. Tenant agrees to remove all refuse from the demised premises in a timely, clean and sanitary manner. Tenant shall provide a refuse collection container at the rear of the demised premises to accommodate Tenant’s refuse and Tenant shall routinely clean up around trash containers. Tenant shall contract with a licensed and insured refuse collection contractor to timely remove refuse therefrom and the location of the container shall be approved by Landlord.

SECTION 23. DESTRUCTION OF PREMISES

     (a) Landlord shall at all times during the term of this Lease carry property insurance on the Building, including the “Structural Portions” (defined in Section 24(a) below) and common utility lines up to the point they serve individual tenant’s premises. Landlord shall be under no obligation to maintain insurance on any improvements installed by or for the benefit of Tenant’s use of the premises or otherwise owned by Tenant. Landlord may elect to self-insure its obligations hereunder and/or use whatever deductibles as Landlord deems appropriate, in its sole discretion.

     (b) If the demised premises shall be damaged, destroyed, or rendered untenantable, in whole or in part, by or as the result or consequence of fire or other casualty during the term hereof, Landlord shall repair and restore the same to a good tenantable condition with reasonable dispatch. During such period of repair, the rent herein provided for in this Lease shall abate (i) entirely in case all of the demised premises are untenantable; and (ii) proportionately if only a portion of the demised premises is untenantable and Tenant is able to economically conduct its business from the undamaged portion of the demised premises. The abatement shall be based upon a fraction, the numerator of which shall be the square footage of the damaged and unusable area of the demised premises and the denominator shall be the total square footage of the demised premises. Said abatement shall cease at such time as the demised premises shall be restored to a tenantable condition.

     (c) In the event the demised premises, because of such damage or destruction, cannot be repaired and restored to a tenantable condition with reasonable dispatch within one hundred fifty (150) days from the date of receipt of insurance proceeds for such damage or destruction, as reasonably determined by an independent contractor selected by Landlord, Tenant or Landlord may, at their option, terminate this Lease within sixty (60) days following receipt of such contractor’s determination; further, in the event that this Lease is not terminated as above provided, but the premises are not restored within one hundred fifty (150) days from the date of receipt of insurance proceeds, Tenant may terminate this Lease by notice given to Landlord after the expiration of such one hundred fifty (150) day period but prior to the repair and restoration of same and thereupon Landlord and Tenant shall be released from all future liability and obligations under this Lease.

     (d) If one-third (1/3) or more of the ground floor area of the demised premises are damaged or destroyed during the last two (2) years of the original or any extended term of this Lease, Landlord shall have the right to terminate this Lease by written notice to Tenant within sixty (60) days following such damage or destruction, unless Tenant shall, within thirty (30) days following receipt of such notice, offer to extend the term of this Lease for an additional period of five (5) years from the date such damage or destruction is repaired and restored. If Tenant

makes said offer to extend, Landlord and Tenant shall determine the terms and conditions of said extension within thirty (30) days thereafter or Tenant’s offer shall not be deemed to prevent Landlord from canceling this Lease. If such terms and conditions have been mutually agreed to by the parties, then Landlord shall accept Tenant’s offer and shall repair and restore the demised premises with reasonable dispatch thereafter.

     (e) If Landlord is required or elects to repair and restore the demised premises as herein provided, Tenant shall repair or replace its stock in trade, trade fixtures, furniture, furnishings and equipment and other improvements including floor coverings, and if Tenant has closed, Tenant shall promptly reopen for business. Anything contained in this Section 23 to the contrary notwithstanding, Landlord’s restoration and repair obligations under Section 23 shall in no event include restoration or repair of Tenant’s Work or improvements.

     (f) The rights of Landlord and Tenant under this Section 23 are subject to the rights of Master Landlord to terminate the Master Lease pursuant to the provisions thereof, in which event this Lease shall terminate simultaneously therewith.

SECTION 24. LANDLORD REPAIRS

     (a) Landlord shall keep in good order, condition, and repair the following: (i) structural portions of the demised premises and/or the Building; (ii) downspouts; (iii) gutters; (iv) the roof of the Building of which the demised premises forms a part; and (v) the plumbing and sewage system serving the demised premises but located outside of the demised premises, except (as to all items) for damage caused by any negligent act or omission of Tenant or its customers, employees, agents, invitees, licensees or contractors, which shall be repaired or replaced as necessary, at the sole cost and expense of Tenant. “Structural Portions” shall mean only the following: (vi) foundations; (vii) exterior walls (except for interior faces); (viii) concrete slabs; (ix) the beams and columns bearing the main load of the roof; and (x) the floors (but not floor coverings).

     (b) Notwithstanding the provisions of Section 24(a) above, Landlord shall not be obligated to repair the following: (i) the exterior or interior of any doors, windows, plate glass, or showcases surrounding the demised premises or the store front; (ii) HVAC unit(s), equipment and systems (including all components thereof) in the demised premises; or (iii) damage to Tenant’s improvements or personal property caused by any casualty, burglary, break-in, vandalism, acts of terrorism, war or act of God. Landlord shall, in any event, have ten (10) days after notice from Tenant stating the need for repairs to complete same, or commence and proceed with due diligence to complete same. Nevertheless, during the term of this Lease, Landlord shall be obligated to replace all HVAC components as and when necessary so long as Tenant has fulfilled its obligations under Section 25(a) (ii) below, and provided such replacements did not arise from (x) repairs, installations, alterations, or improvements made by or for Tenant or anyone claiming under Tenant, or (y) the fault or misuse of Tenant or anyone claiming under Tenant. Except as specifically set forth in this Lease, Tenant expressly hereby waives the provisions of any law permitting repairs by a tenant at Landlord’s expense.

     (c) The provisions of this Section 24 shall not apply in the case of damage or destruction by fire or other casualty or a taking under the power of eminent domain in which events the obligations of Landlord shall be controlled by Section 23 and Section 17 respectively.

     (d) Landlord shall assign to Tenant all warranties covering all matters required by the terms hereof to be repaired and maintained by Tenant.

SECTION 25. TENANT’S REPAIRS

     (a) Tenant shall keep and maintain, at Tenant’s expense, all and every other part of the demised premises in good order, condition and repair, including, by way of example but not limitation: (i) all leasehold improvements; (ii) all HVAC unit(s), equipment and systems (including all components thereof) serving the demised premises; (iii) interior plumbing and sewage facilities; (iv) all interior lighting; (v) electric signs; (vi) all interior walls; (vii) floor coverings; (viii) ceilings; (ix) appliances and equipment; (x) all doors, exterior entrances, windows and window moldings; (xi) plate glass; (xii) signs and showcases surrounding and

within the demised premises; (xiii) the store front; (xiv) sprinkler systems including supervisory alarm service in accordance with National Fire Protection Association standards and current local and state fire protection standards to ensure property operation, and as required by Section 27(b) below.

     (b) Sprinkler systems, if any, located in Tenant’s area shall be maintained in accordance with National Fire Protection Association standards to ensure proper operation. Sprinkler control valves (interior and exterior) located in Tenant’s area shall be monitored by supervisory alarm service. In the event local or state codes do not require alarm systems, Tenant shall provide alarm service on all sprinkler systems to detect water flow and tampering with exterior and interior main control valves of the sprinkler system servicing Tenant’s premises. Moreover, it shall be Tenant’s responsibility to contact the Landlord’s property manager, Chuck Seal, at (614) 449-6853, in the event the sprinkler system in the demised premises is ever shut off for any reason, and advise same of any damage occasioned or caused by the actions of Tenant, its agents, invitees, or employees, and/or as a result of Tenant’s repair obligations hereunder. In the event fifty percent (50%) or more of the total number of sprinkler heads require replacement at any one time as part of ordinary maintenance, but excluding repairs or replacements that arise from (x) repairs, installations alterations, or improvements made by or for Tenant or anyone claiming under Tenant, or (y) the fault or misuse of Tenant or anyone claiming under Tenant, such cost shall be fifty percent (50%) borne by Landlord and fifty percent (50%) borne by Tenant. Tenant, at Tenant’s sole cost and expense, shall replace all sprinkler heads due to repairs, installations, alterations, or improvements made by or for Tenant or anyone claiming under Tenant, the fault or misuse of Tenant or anyone claiming under Tenant, painting or environmental exposure from Tenant’s operations. All other costs of maintaining the sprinkler system in the demised premises shall be paid by Tenant.

     (c) If Landlord deems any repair which Tenant is required to make hereunder to be necessary, Landlord may demand that Tenant make such repair immediately. If Tenant refuses or neglects to make such repair and to complete the same with reasonable dispatch, Landlord may make such repair and Tenant shall, on demand, immediately pay to Landlord the cost of said repair, together with annual interest at the Interest Rate, unless it is thereafter determined that such repair was not necessary. Landlord shall not be liable to Tenant for any loss or damage that may accrue to Tenant’s stock or business by reason of such work or its results.

     (d) Neither Tenant nor any of its contractors are permitted access to or permitted to perform alterations of any kind to the roof of the building.

     (e) Tenant shall pay promptly when due the entire cost of work in the demised premises undertaken by Tenant under this Lease (including, but not limited to, Tenant’s Work and/or alterations permitted under Section 8 of this Lease) so that the demised premises and the Shopping Center shall at all times be free of liens for labor and materials arising from such work; to procure all necessary permits before undertaking any such work; to do all of such work in a good and workmanlike manner, employing materials of good quality; to perform such work only with contractors previously reasonably approved of in writing by Landlord; to comply with all governmental requirements; and save Landlord and its agents, officers, employees, contractors and invitees harmless and indemnified from all liability, injury, loss, cost, damage and/or expense (including reasonable attorneys’ fees and expenses) in respect of any injury to, or death of, any person, and/or damage to, or loss or destruction of, any property occasioned by or growing out of any such work.

SECTION 26. COVENANT OF TITLE AND PEACEFUL POSSESSION

     So long as Tenant is not in default hereunder beyond applicable notice and cure periods, but subject to the terms and conditions of this Lease, Tenant shall have quiet and peaceful possession of the premises from and against anyone acting by, through or under Landlord, and, except for such obligations which are to be performed by Tenant under this Lease, Landlord shall perform all of its obligations under the Master Lease. Landlord expressly warrants and represents to Tenant that: (i) the Master Lease is a valid and binding lease agreement which is in full force and effect and is enforceable against Landlord and Master Landlord in accordance with its terms; (ii) Landlord has a good and valid leasehold interest in the premises pursuant to the Master Lease; (iii) no event has occurred, which with the giving of notice or the passage of time would constitute a default by either Master Landlord or Landlord under the Master Lease; (iv) a

true, correct and complete copy of the Master Lease has been provided to Tenant; and (v) Landlord has the right to enter into this Lease.

SECTION 27. TENANT’S AND LANDLORD’S INSURANCE; INDEMNITY

     (a) Tenant’s Property Insurance. Tenant agrees to procure and maintain during the demised term a property insurance policy written on the causes of loss-special form (also referred to as the special extended coverage form), or the most broad property insurance form then available, insuring against loss of, or damage to, Tenant’s property, in, on or about the demised premises. Such property insurance shall include coverage (whether by additional policies, endorsements or otherwise): (i) against earthquake and flood; (ii) for plate glass; (iii) in an amount equal to the full insurable replacement cost, without deduction for depreciation; (iv) with an agreed valuation provision in lieu of, or in an amount sufficient to satisfy, any co-insurance clause; (v) against inflation (also known as inflation guard); (vi) for any costs due to ordinances or laws; and (vii) as Landlord may from time to time reasonably require Tenant to procure and maintain. Landlord shall not be liable for any damage to Tenant’s property in, on or about the demised premises caused by fire or other insurable hazards regardless of the nature or cause of such fire or other casualty, and regardless of whether any negligence of Landlord or Landlord’s employees or agents contributed thereto. Tenant expressly releases Landlord of and from all liability for any such damage and Tenant agrees that its property insurance policies required hereunder shall include a waiver of subrogation recognizing this release from liability.

     (b) Boiler and Machinery Insurance. Tenant agrees to maintain a comprehensive boiler and machinery policy on a full repair and replacement cost basis, and further in accordance with the requirements of Section 27(a)(iii)-(vi) above, with an admitted, reputable insurance carrier covering property damage as a result of a loss from boiler(s), pressure vessel(s), HVAC equipment, or other electrical or mechanical apparatus within or servicing the demised premises, furniture, fixtures, equipment and inventory together with property of others in the care, custody and control of Tenant. The deductible for property damage under such policy shall not exceed Five Thousand Dollars ($5,000.00) per occurrence.

     (c) Additional Tenant Insurance. Tenant’s insurance required under Section (27(a) and (b) above shall also include business income coverage against any interruption (including utility interruption) in Tenant’s business (whether direct, indirect, contingent or interdependent), including, but not limited to, coverage for Tenant’s leasehold interests and obligations to continue paying all rental amounts hereunder, lost revenues and income, and extra expense. Such coverage should be for a period of at least twelve (12) months, with an extended period of indemnity of at least thirty (30) days. The deductible for such coverage may not exceed twenty-four (24) hours.

     (d) Tenant’s Commercial General Liability Insurance. Tenant agrees to procure and maintain during the demised term commercial general liability insurance by a responsible insurance company or companies, with policy limits of not less than the greater of any requirement imposed on Landlord under the Master Lease or $1,000,000.00 per occurrence and $2,000,000.00 annual aggregate, and $500,000.00 limits for fire and legal liability, insuring against liability for losses, claims, demands or actions for bodily injury (including death) and property damage arising from Tenant’s conduct and operation of its business in and Tenant’s use, maintenance and occupancy of, the demised premises and any areas adjacent thereto, or the acts or omissions of Tenant’s employees and agents. Such commercial general liability policy may be written on a blanket basis to include the demised premises in conjunction with other premises owned or operated by Tenant but shall be written such that the required policy limits herein specifically apply on a per location basis to the demised premises. Tenant’s commercial general liability insurance policy shall further provide: (i) coverage for defense costs (in excess of policy limits); (ii) contractual liability coverage; (iii) cross-liability coverage; and, (iv) that Landlord, its shareholders, officers, directors, employees, and agents, Master Landlord, and Master Landlord’s mortgagee, if any, are named as additional insureds such that (Y) Tenant’s policy shall be the primary source of insurance for such additional insured and (Z) any liability policy carried by such additional insureds shall be in excess of, and will not contribute with or to, Tenant’s commercial general liability insurance required to be maintained hereunder. At the time this Lease is executed and thirty (30) days prior to the expiration of such insurance policy, Tenant shall furnish to Landlord, Master Landlord, and Master Landlord’s mortgagee, if any, certificates of insurance evidencing the continuous existence during the term of this Lease of

Tenant’s commercial general liability insurance coverage, which certificates shall include attachment of additional insured endorsement, name any and all non-standard exclusions or limitations, and provide not less than thirty (30) days notice of cancellation or termination to Landlord (and any other additional insured, if applicable). All insurance companies must be licensed to do business in the state where the premises are located. Tenant shall further procure and maintain other liability insurance (including, but not limited to, liquor and pollution insurance) as Landlord may from time to time reasonably require.

     (e) Worker’s Compensation. Tenant agrees to provide and keep in force at all times worker’s compensation insurance complying with the law of the state in which the premises are located. Tenant agrees to defend, indemnify and hold harmless Landlord from all actions or claims of Tenant’s employees or employee’s family members. Tenant agrees to provide a certificate as evidence of proof of worker’s compensation coverage.

     If Tenant hires contractors to do any improvements on the demised premises, each contractor must provide proof of worker’s compensation coverage on its employees and agents to Landlord.

     (f) Contingent Liability and Builder’s Risk Insurance. With respect to any alterations or improvements by Tenant, Tenant shall maintain contingent liability and builder’s risk coverage naming Landlord as an additional insured, in compliance with the additional insured requirements set forth in Section 27(d).

     (g) Landlord’s Property Insurance. Commencing as of the Commencement Date, and thereafter throughout the term of this Lease, Landlord shall, at Landlord’s sole cost and expense, provide and maintain or cause to be provided and maintained a property insurance policy insuring the Building (including any permanent improvements to the demised premises paid for by the Tenant Reimbursement but excluding those items insured by Tenant as required under this Section 27) for all the hazards and perils normally covered by the Causes of Loss-Special Form. Said property insurance policy shall include endorsements for coverage against: (i) earthquake and flood (including, but not limited to, mud slide, flood hazard or fault area(s), as designated on any map prepared or issued for such purpose by any governmental authority); and (ii) increased costs of construction and demolition due to law and ordinance. The foregoing property coverage shall be provided in amounts sufficient to provide one hundred percent (100%) of the full replacement cost of all buildings (and building additions) and other improvements in the Center and in the demised premises and Tenant’s store building (including any permanent improvements to the demised premises paid for by Tenant Reimbursement but excluding those items insured by Tenant as required under this Section 27). If for any reason the Causes of Loss-Special Form is not customarily used in the insurance industry, then the property insurance policy then in effect shall at least provide coverage for the following perils: fire, lightning, windstorm and hail, explosion, smoke, aircraft and vehicles, riot and civil commotion, vandalism and malicious mischief, sprinkler leakage, sinkhole and collapse, volcanic action, earthquake or earth movement, and flood, and increased costs of construction and demolition due to law, ordinance and inflation. Neither Tenant nor any of its affiliates or subtenants shall be liable to Landlord for any loss or damage (including loss of income), regardless of cause, resulting from fire, flood, act of God or other casualty.

     (h) Landlord’s Commercial General Liability Insurance. Commencing as of the Commencement Date, and thereafter throughout the term of this Lease, Landlord shall, at Landlord’s sole cost and expense, provide and maintain or cause to be provided and maintained a commercial general liability policy, naming Landlord as an insured (and naming Tenant as an additional insured, said additional insured’s coverage under Landlord’s commercial general liability policy to be primary), protecting Landlord, the business operated by Landlord, and any additional insureds (including Tenant) against claims for bodily injury (including death) and property damage occurring upon, in or about the Center (other than the demised premises and those areas insured by other tenants at the Center), including Common Areas. Such insurance shall afford protection to the limits of not less than the greater of any requirement imposed upon Landlord by the Master Lease or One Million Dollars ($1,000,000.00) per occurrence, Two Million Dollars ($2,000,000.00) annual aggregate, and Five Hundred Thousand Dollars ($500,000.00) with respect to property damage for fire legal liability. All liability policies shall be written on an occurrence form unless such form is no longer customarily used in the insurance industry. Landlord may use commercially reasonable deductibles Landlord customarily carries

in the conduct of its business; however, the amount of such deductibles which may be charged to Tenant pursuant to Section 12.09 below may not exceed $0.20 per square foot of gross leasable area of the demised premises in any lease year.

     (i) Landlord’s Umbrella. Commencing as of the Commencement Date, and thereafter throughout the term of this Lease, Landlord shall, at Landlord’s sole cost and expense, provide and maintain or cause to be provided and maintained an umbrella liability insurance policy with a Ten Million Dollar ($10,000,000.00) minimum annual aggregate, which umbrella policy (or policies) shall list Landlord’s commercial general liability policy required under this Section 27 and any other liability policy or policies carried by, or for the benefit of, Landlord as underlying policies. Said umbrella liability policy shall also name Tenant as an additional insured (said additional insured’s coverage under Landlord’s umbrella liability policy to be primary). All liability policies shall be written on an occurrence form unless such form is no longer customarily used in the insurance industry.

     (j) Tenant Indemnity. Tenant shall indemnify Landlord, Landlord’s agents, employees, officers or directors, against all damages, claims and liabilities arising from any alleged products liability or from any accident or injury whatsoever caused to any person, firm or corporation during the demised term in the demised premises, unless such claim arises from a breach or default in the performance by Landlord of any covenant or agreement on its part to be performed under this Lease or, to the extent not required to be insured hereunder, the negligence of Landlord. The indemnification herein provided shall include all reasonable costs, counsel fees, expenses and liabilities incurred in connection with any such claim or any action or proceeding brought thereon.

     (k) Landlord Indemnity. Landlord shall indemnify Tenant, Tenant’s officers, directors, employees and agents against all damages, claims and liabilities arising from any accident or injury whatsoever caused to any person, firm or corporation during the demised term in the common areas of the Shopping Center, unless such claim arises from a breach or default in the performance by Tenant of any covenant or agreement on Tenant’s part to perform under this Lease or, to the extent not required to be insured hereunder, the negligence of Tenant. The indemnification herein provided shall include all reasonable costs, counsel fees, expenses and liabilities incurred in connection with any such claim or any action or proceeding brought thereon.

SECTION 28. REAL ESTATE TAXES

     (a) Tenant shall pay Tenant’s Proportionate Tax Share of any “real estate taxes” (defined in Section 16(b) above) for which Landlord has a payment or reimbursement obligation pursuant to the Master Lease. Tenant’s Proportionate Tax Share shall be equal to the real estate taxes payable by Landlord to Master Landlord, multiplied by a fraction, the numerator of which shall be the leasable square feet in the demised premises and the denominator of which shall be the leasable square feet in the Building. Tenant shall initially pay to Landlord as additional rental, simultaneously with the payment of minimum rental called for under Section 5(a), the estimated monthly amount of Tenant’s Proportionate Tax Share of real estate taxes as set forth in Section 5(c) of Nine and 35/100 Dollars ($9.35) per square foot, payable in equal monthly installments of Thirteen Thousand Two Hundred Eighty-Four and 79/100 Dollars ($13,284.79), as the estimated amount of Tenant’s Proportionate Tax Share. Within one hundred twenty (120) days after the end of each accounting year (which Landlord may change from time to time), Landlord shall provide Tenant with an annual reconciliation of real estate taxes and a statement of the actual amount of Tenant’s Proportionate Share thereof. Any excess payments from Tenant shall be applied to the next installments of real estate taxes hereunder, or refunded by Landlord. Any underpayments by Tenant shall be paid to Landlord within thirty (30) days after receipt of such reconciliation statement. Tenant’s estimated monthly installment of real estate taxes payable hereunder may be adjusted by written notice from Landlord.

     (b) For the purpose of this Lease, the term “real estate taxes” shall include “Impositions” as defined in the Master Lease.

     (c) The real estate taxes for any lease year shall be the real estate taxes for which Landlord has a payment or reimbursement obligation pursuant to the Master Lease during such lease year.

     (d) Upon request, Landlord shall submit to Tenant true copies of the real estate tax bills submitted to Landlord by Master Landlord for each tax year or portion of a tax year included within the term of this Lease and shall bill Tenant for the amount to be paid by Tenant hereunder. Said bill shall be accompanied by a computation of the amount payable by Tenant and such amount shall be paid by Tenant within thirty (30) days after receipt of said bill.

SECTION 29. TENANT’S INSURANCE CONTRIBUTION

     Tenant shall pay as additional rent, Tenant’s Proportionate Insurance Share of (i) the premiums for the insurance maintained by Landlord on the Building pursuant to Section 27(g) hereof and (ii) the insurance premiums for the liability insurance maintained by Landlord or the Center pursuant to Section 27(h) for each lease year during the term of this Lease, less any amounts reimbursed to Landlord by Master Landlord pursuant to the Master Lease (collectively, the “Insurance Charges”). Tenant’s Proportionate Insurance Share shall be equal to the Insurance Charges multiplied by a fraction, the numerator of which shall be the leasable square feet in the demised premises and the denominator of which shall be the leasable square feet in the Building. The premiums for the first and last lease years shall be prorated. Tenant shall pay Tenant’s Proportionate Share of such premiums annually upon demand for such payment by Landlord. Tenant’s Proportionate Share thereof shall be paid by Tenant within thirty (30) days after Landlord’s demand therefore. Tenant shall initially pay to Landlord as additional rental, simultaneously with the payment of minimum rental called for under Section 5(a), the estimated monthly amount of Tenant’s Proportionate Share of such insurance premiums as set forth in Section 5(c), of Fifteen Cents ($0.15) per square foot, payable in equal monthly installments of Two Hundred Thirteen and 13/100 Dollars ($213.13) , as the estimated amount of Tenant’s Proportionate Share of such insurance premiums. Within one hundred twenty (120) days after the end of each accounting year (which Landlord may change from time to time), Landlord shall provide Tenant with a reconciliation of the premiums for the insurance maintained by Landlord hereunder and a statement of the actual amount of Tenant’s Proportionate Share thereof. Any excess payments from Tenant shall be applied to the next installments of insurance premiums payable by Tenant hereunder, or refunded by Landlord. Any underpayments by Tenant shall be paid to Landlord within thirty (30) days after receipt of such reconciliation statement. Tenant’s monthly installment of insurance premiums payable hereunder may be adjusted by written notice from Landlord.

SECTION 30. FIXTURES

     Provided that Tenant shall repair any damage caused by removal of its property and provided that the Tenant is not in default under this Lease, Tenant shall have the right to remove from the demised premises all of its signs, shelving, electrical, and other fixtures and equipment, window reflectors and backgrounds and any and all other trade fixtures which it has installed in and upon the demised premises.

SECTION 31. SURRENDER

     The Tenant covenants and agrees to deliver up and surrender to the Landlord the physical possession of the demised premises upon the expiration of this Lease or its termination as herein provided in as good condition and repair as the same shall be at the commencement of the initial term, loss by fire and/or ordinary wear and tear excepted, and to deliver all of the keys to Landlord or Landlord’s agents.

SECTION 32. HOLDING OVER

     There shall be no privilege of renewal hereunder (except as specifically set forth in this Lease) and any holding over after the expiration by the Tenant shall be from day to day on the same terms and conditions (with the exception of rental which shall be prorated on a daily basis at twice the daily rental rate of the most recent expired term) at Landlord’s option; and no acceptance of rent by or act or statement whatsoever on the part of the Landlord or his duly authorized agent in the absence of a written contract signed by Landlord shall be construed as an extension of the term or as a consent for any further occupancy.

SECTION 33. NOTICE

     Whenever under this Lease provisions are made for notice of any kind to Landlord, it shall be deemed sufficient notice and sufficient service thereof if such notice to Landlord is in writing, addressed to Landlord at c/o Schottenstein Management Company, 1800 Moler Road, Columbus, Ohio 43207, or at such address as Landlord may notify Tenant in writing, and deposited in the United States mail by certified mail, return receipt requested, with postage prepaid or Federal Express, Express Mail or such other expedited mail service as normally results in overnight delivery, with a copy of same sent in like manner to President, Real Estate, 1800 Moler Road, Columbus, Ohio 43207. Notice to Tenant shall be sent in like manner to 4150 East Fifth Avenue, Columbus, Ohio 43219, with copies of same sent to (i) General Counsel, 3241 Westerville Road, Columbus, Ohio 43224-3751 and (ii) Randall S. Arndt, Esq., Schottenstein Zox & Dunn, 250 West Street, Columbus, Ohio 43215. All notices shall be effective upon receipt or refusal of receipt. Either party may change the place for service of notice by notice to the other party.

SECTION 34. DEFAULT

     (a) Elements of Default: The occurrence of any one or more of the following events shall constitute a default of this Lease by Tenant:

     1. Tenant fails to pay any monthly installment of rent within ten (10) days after the same shall be due and payable, except for the first two (2) times in any consecutive twelve (12) month period, in which event Tenant shall have five (5) days after receipt of written notice of such failure to pay before such failure shall constitute a default;

     2. Tenant fails to perform or observe any term, condition, covenant or obligation required to be performed or observed by it under this Lease for a period of twenty (20) days after notice thereof from Landlord; provided, however, that if the term, condition, covenant or obligation to be performed by Tenant is of such nature that the same cannot reasonably be cured within twenty (20) days and if Tenant commences such performance or cure within said twenty (20) day period and thereafter diligently undertakes to complete the same, then such failure shall not be a default hereunder if it is cured within a reasonable time following Landlord’s notice, but in no event later than forty-five (45) days after Landlord’s notice.

     3. If Tenant refuses to take possession of the demised premises as required pursuant to this Lease or abandons the demised premises for a period of thirty (30) days or substantially ceases to operate its business or to carry on its normal activities in the demised premises as required pursuant to this Lease.

     4. A trustee or receiver is appointed to take possession of substantially all of Tenant’s assets in, on or about the demised premises or of Tenant’s interest in this Lease (and Tenant or any guarantor of Tenant’s obligations under this Lease does not regain possession within sixty (60) days after such appointment); Tenant makes an assignment for the benefit of creditors; or substantially all of Tenant’s assets in, on or about the demised premises or Tenant’s interest in this Lease are attached or levied upon under execution (and Tenant does not discharge the same within sixty (60) days thereafter).

     5. A petition in bankruptcy, insolvency, or for reorganization or arrangement is filed by or against Tenant or any guarantor of Tenant’s obligations under this Lease pursuant to any Federal or state statute, and, with respect to any such petition filed against it, Tenant or such guarantor fails to secure a stay or discharge thereof within sixty (60) days after the filing of the same.

     (b) Landlord’s Remedies: Upon the occurrence of any event of default, Landlord shall have the following rights and remedies, any one or more of which may be exercised without further notice to or demand upon Tenant:

     1. Landlord may re-enter the demised premises and cure any default of Tenant, in which event Tenant shall reimburse Landlord for any cost and expenses which Landlord may incur to cure such default; and Landlord shall not be liable to Tenant for any loss or damage which Tenant may sustain by reason of Landlord’s action.

     2. Landlord may terminate this Lease or Tenant’s right to possession under this Lease as of the date of such default, without terminating Tenant’s obligation to pay rent due hereunder, in which event (A): neither Tenant nor any person claiming under or through Tenant shall thereafter be entitled to possession of the demised premises, and Tenant shall immediately thereafter surrender the demised premises to Landlord; (B) Landlord may re-enter the demised premises and dispose Tenant or any other occupants of the demised premises by force, summary proceedings, ejectment or otherwise, and may remove their effects, without prejudice to any other remedy which Landlord may have for possession or arrearages in rent; and (C) notwithstanding a termination of this Lease, Landlord may re-let all or any part of the demised premises for a term different from that which would otherwise have constituted the balance of the term of this Lease and for rent and on terms and conditions different from those contained herein, whereupon Tenant shall immediately be obligated to pay to Landlord as liquidated damages the difference between the rent provided for herein and that provided for in any lease covering a subsequent re-letting of the demised premises, for the period which would otherwise have constituted the balance of the term of this Lease, together with all of Landlord’s costs and expenses for preparing the demised premises for re-letting, including all repairs, tenant finish improvements, broker’s and attorney’s fees, and all loss or damage which Landlord may sustain by reason of such termination, re-entry and re-letting, it being expressly understood and agreed that the liabilities and remedies specified herein shall survive the termination of this Lease. Notwithstanding a termination of this Lease by Landlord, Tenant shall remain liable for payment of all rentals and other charges and costs imposed on Tenant herein, in the amounts, at the times and upon the conditions as herein provided. Landlord shall credit against such liability of the Tenant all amounts received by Landlord from such re-letting after first reimbursing itself for all reasonable costs incurred in curing Tenant’s defaults and re-entering, preparing and refinishing the demised premises for re-letting, and re-letting the demised premises.

     3. Upon termination of this Lease pursuant to Section 34(b)2, Landlord may recover possession of the demised premises under and by virtue of the provisions of the laws of the State of New York, or by such other proceedings, including reentry and possession, as may be applicable.

     4. If the Tenant shall not remove all of Tenant’s property from said demised premises as provided in this Lease, Landlord, at its option, may remove any or all of said property in any manner that Landlord shall choose and store same without liability for loss thereof, and Tenant will pay the Landlord, on demand, any and all reasonable expenses incurred in such removal and storage of said property for any length of time during which the same shall be in possession of Landlord or in storage, or Landlord may, upon thirty (30) days prior notice to Tenant, sell any or all of said property in such manner and for such price as the Landlord may reasonably deem best and apply the proceeds of such sale upon any amounts due under this Lease from the Tenant to the Landlord, including the reasonable expenses of removal and sale.

     5. Any damage or loss of rent sustained by Landlord may be recovered by Landlord, at Landlord’s option, at the time of the reletting, or in separate actions, from time to time, as said damage shall have been made more easily ascertainable by successive relettings, or at Landlord’s option in a single proceeding deferred until the expiration of the term of this Lease (in which event Tenant hereby agrees that the cause of action shall not be deemed to have accrued until the date of expiration of said term) or in a single proceeding prior to either the time of reletting or the expiration of the term of this Lease.

     6. In the event of a breach by Tenant of any of the covenants or provisions hereof, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity as if reentry, summary proceedings, and other remedies were not provided for herein. Mention in this Lease of any particular remedy shall not preclude Landlord from any other remedy, in law or in equity. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Tenant being evicted or dispossessed for any cause, or in the event of Landlord obtaining possession of the demised premises by reason of the violation by Tenant of any of the covenants and conditions of this Lease or other use.

     7. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws, in the event of eviction or dispossession of Tenant by Landlord under any provision of this Lease. No receipt of monies by Landlord from or for the account of

Tenant or from anyone in possession or occupancy of the demised premises after the termination of this Lease or after the giving of any notice shall reinstate, continue or extend the term of this Lease or affect any notice given to the Tenant prior to the receipt of such money, it being agreed that after the service of notice or the commencement of a suit, or after final judgment for possession of said demised premises, the Landlord may receive and collect any rent or other amounts due Landlord and such payment shall not waive or affect said notice, said suit or said judgment.

     (c) Additional Remedies and Waivers: The rights and remedies of Landlord set forth herein shall be in addition to any other right and remedy now or hereinafter provided by law and/or equity and all such rights and remedies shall be cumulative and shall not be deemed inconsistent with each other, and any two or more or all of said rights and remedies may be exercised at the same time or at different times and from time to time without waiver thereof of any right or remedy provided or reserved to Landlord. No action or inaction by Landlord shall constitute a waiver of a default and no waiver of default shall be effective unless it is in writing, signed by the Landlord.

     (d) Default by Landlord. Any failure by Landlord to observe or perform any provision, covenant or condition of this Lease to be observed or performed by Landlord, if such failure continues for thirty (30) days after written notice thereof from Tenant to Landlord, shall constitute a default by Landlord under this Lease, provided, however, that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, Landlord shall not be deemed to be in default if it shall commence such cure within such thirty (30) day period and thereafter rectify and cure such default with due diligence.

     (e) Interest on Past Due Obligations: All monetary amounts required to be paid by Tenant or Landlord hereunder which are not paid on or before the due date thereof shall, from and after such due date, bear interest at the Interest Rate, and shall be due and payable by such party without notice or demand.

     (f) Tenant’s Remedies. In the event of default by the Landlord with respect to the demised premises, Tenant shall have the option to cure said default. Landlord shall reimburse Tenant for the reasonable costs incurred by Tenant in curing such default within thirty (30) days after invoice thereof by Tenant, together with reasonable evidence supporting such invoiced amount. Tenant shall also have any and all rights available under the laws of the state in which the demised premises are situated; provided, however, that any right of offset available to Tenant shall be subject to the provisions of Section 36 below.

SECTION 35. WAIVER OF SUBROGATION

     Landlord and Tenant, and all parties claiming under each of them, mutually release and discharge each other from all claims and liabilities arising from or caused by any casualty or hazard covered or required hereunder to be covered in whole or in part by insurance coverage required to be maintained by the terms of this Lease on the demised premises or in connection with the Shopping Center or activities conducted with the demised premises, and waive any right of subrogation which might otherwise exist in or accrue to any person on account thereof. All policies of insurance required to be maintained by the parties hereunder shall contain waiver of subrogation provisions so long as the same are available.

SECTION 36. LIABILITY OF LANDLORD; EXCULPATION

     (a) Except with respect to any damages resulting from the gross negligence of Landlord, its agents, or employees, or resulting from the breach of Landlord’s obligations hereunder, Landlord shall not be liable to Tenant, its agents, employees, or customers for any damages, losses, compensation, accidents, or claims whatsoever. The foregoing notwithstanding, it is expressly understood and agreed that nothing in this Lease contained shall be construed as creating any liability whatsoever against Landlord personally, and in particular without limiting the generality of the foregoing, there shall be no personal liability to pay any indebtedness accruing hereunder or to perform any covenant, either express or implied, herein contained, or to keep, preserve or sequester any property of Landlord and that all personal liability of Landlord to the extent permitted by law, of every sort, if any, is hereby expressly

waived by Tenant, and by every person now or hereafter claiming any right or security hereunder.

     (b) If the Tenant obtains a money judgment against Landlord, any of its officers, directors, shareholders, partners, members or their successors or assigns under any provisions of or with respect to this Lease or on account of any matter, condition or circumstance arising out of the relationship of the parties under this Lease, Tenant’s occupancy of the Building or Landlord’s ownership of the leasehold estate created by the Master Lease, Tenant shall be entitled to have execution upon any such final, unappealable judgment only upon Landlord’s leasehold estate in the Shopping Center and not out of any other assets of Landlord, or any of its officers, directors, shareholders, members or partners, or their successor or assigns; and Landlord shall be entitled to have any such judgment so qualified as to constitute a lien only on said fee simple or leasehold estate.

     Notwithstanding the above, Tenant shall have the right to offset any final, unappealable judgment against twenty five percent (25%) of all minimum rent and all percentage rental (but no other additional rent components) if not paid to Tenant by Landlord within thirty (30) days thereafter.

     (c) It is expressly agreed that nothing in this Lease shall be construed as creating any personal liability of any kind against the assets of any of the officers, directors, members, partners or shareholders of Tenant, or their successors and assigns.

SECTION 37. RIGHTS CUMULATIVE

     Unless expressly provided to the contrary in this Lease, each and every one of the rights, remedies and benefits provided by this Lease shall be cumulative and shall not be exclusive of any other of such rights, remedies and benefits or of any other rights, remedies and benefits allowed by law.

SECTION 38. MITIGATION OF DAMAGES

     Notwithstanding any of the terms and provisions herein contained to the contrary, Landlord and Tenant shall each have the duty and obligation to mitigate, in every reasonable manner, any and all damages that may or shall be caused or suffered by virtue of defaults under or violation of any of the terms and provisions of this Lease agreement committed by the other.

SECTION 39. SIGNS

     No signs shall be placed on the demised premises by Tenant except as shall comply with all applicable governmental codes, restrictions of record in accordance with Section 7 above, sign criteria established by Landlord or Master Landlord for the Shopping Center, and with the prior written consent of Landlord (not to be unreasonably withheld) after sign drawings have been submitted to Landlord by Tenant. Subject to the foregoing, Tenant shall have the right to install its prototypical signage and awnings on the front of the demised premises as described on Exhibit “E” attached hereto and made a part hereof. Tenant shall be entitled to pylon, monument or other freestanding signage as shown on Exhibit “E” (and any future replacement signage therefore).

SECTION 40. ENTIRE AGREEMENT

     This Lease shall constitute the entire agreement of the parties hereto; all prior agreements between the parties, whether written or oral, are merged herein and shall be of no force and effect. This Lease cannot be changed, modified, or discharged orally but only by an agreement in writing signed by the party against whom enforcement of the change, modification or discharge is sought.

SECTION 41. LANDLORD’S LIEN – DELETED BY INTENTION

SECTION 42. BINDING UPON SUCCESSORS

     The covenants, conditions, and agreements made and entered into by the parties hereto shall be binding upon and inure to the benefit of their respective heirs, representatives, successor and assigns.

SECTION 43. HAZARDOUS SUBSTANCES

     (a) During the term of this Lease, Tenant shall not suffer, allow, permit or cause the generation, accumulation, storage, possession, release or threat of release of any hazardous substance or toxic material, as those terms are used in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, and any regulations promulgated thereunder, or any other present or future federal, state or local laws, ordinances, rules, and regulations. Tenant shall indemnify and hold Landlord harmless from any and all liabilities, penalties, demands, actions, costs and expenses (including without limitation reasonable attorney fees), remediation and response costs incurred or suffered by Landlord directly or indirectly arising due to the breach of Tenant’s obligations set forth in this Section. Such indemnification shall survive expiration or earlier termination of this Lease. At the expiration or sooner termination hereof, Tenant shall return the demised premises to Landlord in substantially the same condition as existed on the date of commencement hereof free of any hazardous substances in, on or from the demised premises.

     (b) Landlord hereby represents and warrants that, except as set forth in that certain Pre-Demolition Asbestos Survey Report of “Former” Toys R’ Us, 3501 Hempstead Turnpike, Levittown, New York, CNS Job #: A26887, dated April 27, 2006, prepared by CNS Management Corp.: (i) it has not used, generated, discharged, released or stored any hazardous substances on, in or under the Shopping Center and has received no notice and has no knowledge of the presence in, on or under the Shopping Center of any such hazardous substances; (ii) to Landlord’s knowledge there have never been any underground storage tanks at the Shopping Center, whether owned by the Landlord or its predecessors in interest; (iii) to Landlord’s knowledge there have never been accumulated tires, spent batteries, mining spoil, debris or other solid waste (except for rubbish and containers for normal scheduled disposal in compliance with all applicable laws) in, on or under the Shopping Center; (iv) to Landlord’s knowledge it has not spilled, discharged or leaked petroleum products other than de minimis quantities in connection with the operation of motor vehicles on the Shopping Center; (v) to Landlord’s knowledge there has been no graining, filling or modification of wetlands (as defined by federal, state or local law, regulation or ordinance) at the Shopping Center; and (vi) to Landlord’s knowledge there is no asbestos or asbestos-containing material in the demised premises. The representations and warranties set forth in this subparagraph shall apply to any contiguous or adjacent property owed by the Landlord. Landlord hereby indemnifies Tenant for any and all loss, cost, damage or expense to Tenant resulting from any misrepresentation or breach of the foregoing representations and warranties. .

     (c) It is acknowledged by the parties that Tenant is causing to be performed removal/abatement of asbestos as specifically set forth in Section 3(e) hereof, but at Landlord’s expense, as set forth in Section 3(e); Landlord shall be responsible to cause the demised premises to be free of any other hazardous substances not specifically included in the description of such abatement work described in Section 3(e). Except as set forth in the preceding sentence, if any hazardous substances are discovered at the Shopping Center (unless introduced by the Tenant, its agents or employees) or if any asbestos or asbestos containing material is discovered in the demised premises (unless introduced by the Tenant, its agents or employees), and removal, encapsulation or other remediation is required by applicable laws, the Landlord immediately and with all due diligence and at no expense to the Tenant shall take all measures necessary to comply with all applicable laws and to remove such hazardous substances or asbestos from the Shopping Center and/or encapsulate or remediate such hazardous substances or asbestos, which removal and/or encapsulation or remediation shall be in compliance with all environmental laws and regulations, and the Landlord shall repair and restore the Shopping Center at its expense. From the date such encapsulation, remediation and restoration is complete, the rent due hereunder shall be reduced by the same percentage as the percentage of the demised premises which, in the Tenant’s reasonable judgment, cannot be safely, economically or practically used

for the operation of the Tenant’s business. Anything herein to the contrary notwithstanding, if in the Tenant’s reasonable judgment, such removal, encapsulation, remediation and restoration cannot be completed within one hundred eighty (180) days or the same is not actually completed by Landlord within such one hundred eighty (180) day period following the date such hazardous substances or asbestos are discovered and such condition materially adversely affects Tenant’s ability to conduct normal business operations in the premises, then the Tenant may terminate this Lease by written notice to the Landlord within thirty (30) days after such 180 day period, which notice shall be effective on Landlord’s receipt thereof. Landlord shall comply with OSHA 29 CFR 1910.1001 (j) to notify tenants, including Tenant, of asbestos related activities in the demised premises and the Shopping Center including, but not limited to, selection of the certified/licensed asbestos abatement contractor, scope of the abatement work, and final clearance testing procedures and results.

SECTION 44. TRANSFER OF INTEREST

     If Landlord should sell or otherwise transfer its interest in the demised premises, upon an undertaking by the purchaser or transferee to be responsible for all the covenants and undertakings of Landlord accruing subsequent to the date of such sale or transfer, Tenant agrees that Landlord shall thereafter have no liability to Tenant under this Lease or any modifications or amendments thereof, or extensions thereof, except for such liabilities which might have accrued prior to the date of such sale or transfer of its interest by Landlord.

SECTION 45. ACCESS TO PREMISES

     Landlord and its representatives shall have free access to the demised premises at all reasonable times for the purpose of: (a) examining the same or to make any alterations or repairs to the demised premises that Landlord may deem necessary for its safety or preservation; (b) exhibiting the demised premises for sale or mortgage financing; (c) during the last three (3) months of the term of this Lease, for the purpose of exhibiting the demised premises and putting up the usual notice “for rent” which notice shall not be removed, obliterated or hidden by Tenant, provided, however, that any such action by Landlord shall cause as little inconvenience as reasonably practicable and such action shall not be deemed an eviction or disturbance of Tenant nor shall Tenant be allowed any abatement of rent, or damages for an injury or inconvenience occasioned thereby.

SECTION 46. HEADINGS

     The headings are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope or intent of this Lease.

SECTION 47. NON-WAIVER

     No payment by Tenant or receipt by Landlord or its agents of a lesser amount than the rent in this Lease stipulated shall be deemed to be other than on account of the stipulated rent nor shall an endorsement or statement on any check or any letter accompanying any check or payment of rent be deemed an accord and satisfaction and Landlord or its agents may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent or pursue any other remedy in this Lease provided.

SECTION 48. SHORT FORM LEASE

     This Lease shall not be recorded, but a short form lease, which describes the property herein demised, gives the term of this Lease and refers to this Lease, shall be executed by the parties hereto, upon demand of either party and such short form lease may be recorded by Landlord or Tenant at any time either deems it appropriate to do so. The cost and recording of such short form lease shall belong to the requesting party.

SECTION 49. ESTOPPEL CERTIFICATE

     Each party agrees that at any time and from time to time on ten (10) days prior written request by the other, it will execute, acknowledge and deliver to the requesting party a statement in writing stating that this Lease is unmodified and in full force and effect (or, if there have been

modifications, stating the modifications, and that the Lease as so modified is in full force and effect, and the dates to which the rent and other charges hereunder have been paid, and such other information as may reasonably re requested, it being intended that any such statements delivered pursuant to this Section may be relied upon by any current or prospective purchaser of or any prospective holder of a mortgage or a deed of trust upon or any interest in the fee or any leasehold or by the mortgagee, beneficiary or grantee of any security or interest, or any assignee of any thereof or under any mortgage, deed of trust or conveyance for security purposes now or hereafter done or made with respect to the fee of or any leasehold interest in the demised premises.

SECTION 50. MASTER LEASE CONTINGENCIES

     This Lease and the liability of Tenant hereunder is and shall be wholly contingent upon Tenant obtaining, on or before___, 2006, the following:

(i)	a copy of a Subordination, Non-disturbance and Attornment Agreement in form and substance reasonably acceptable to Tenant duly executed by the holder of any mortgage or deed of trust on the Shopping Center, pursuant to which the lender agrees to recognize the leasehold rights created by the Master Lease in the event that Master Landlord shall default under such mortgage or deed of trust; and
(ii)	such other consents, approvals or information that Tenant may reasonably require pursuant to its review of the Master Lease.

SECTION 51. PROVISIONS WITH RESPECT TO MASTER LEASE

     (a) Consents and Approvals. Wherever pursuant to the Master Lease and this Lease the consent and/or approval of the Master Landlord and Landlord is required, Landlord’s refusal to consent to or approve any matter or thing shall be deemed reasonable if the consent or approval of Master Landlord is required, and despite Landlord’s commercially reasonable efforts, such consent or approval has not been obtained from Master Landlord. In the event that Tenant seeks the consent or approval of Master Landlord, Tenant shall submit such request to Landlord and Landlord shall promptly thereafter submit such request to Master Landlord and use commercially reasonable efforts to obtain on behalf of Tenant such consent or approval of Master Landlord, but at no cost or expense to Landlord.

     (b) Master Landlord Default and Remedy. If Master Landlord fails to perform any obligation which it has under the Master Lease and such failure materially adversely effects the rights of Tenant hereunder or its ability to use, operate and maintain its business in the premises, then Tenant shall prepare and deliver to Landlord a written notice specifying such failure to perform in reasonable detail. Landlord shall promptly thereafter transmit such notice to Master Landlord and shall use commercially reasonable efforts to cause Master Landlord to perform such obligation. If, despite Landlord’s reasonable efforts, Master Landlord fails to timely perform such obligation as required by the Master Lease, Landlord hereby assigns to Tenant the right, at Landlord’s expense, to enforce such obligations against Master Landlord on behalf of Landlord. Landlord agrees to cooperate with Tenant in such enforcement efforts, at no expense to Tenant, and shall permit Tenant to undertake such efforts in Landlord’s name, if necessary in order to effectively prosecute such enforcement actions. The foregoing is in addition to any and all other remedies available to Tenant under this Sublease or at law or in equity, including but not limited to, exercise of “self-help” remedies.

SECTION 52. BROKER

     Landlord and Tenant each represent to the other that they have not entered into any agreement or incurred any obligation in connection with this transaction which might result in the obligation to pay a brokerage commission to any broker other than E.M.B. Associates, Inc. Landlord agrees to be solely responsible for any and all commission due to such broker pursuant to a separate written agreement between Landlord and such broker. Each party shall indemnify and hold the other party harmless from and against any claim or demand by any broker or other person for bringing about this Lease who claims to have dealt with such indemnifying party, including all expenses incurred in defending any such claim or demand (including reasonable attorney’s fees).

SECTION 53. UNAVOIDABLE DELAYS

     In the event either party hereto (the “Delayed Party”) shall be delayed or hindered in or prevented from the performance of any act required under this Lease by reason of strikes, lockouts, labor troubles, inability to procure materials, failure of power, the unforeseen application of restrictive governmental laws or regulations, riots, insurrection, war, acts of terrorism or other reason of a like nature not the fault of the Delayed Party in performing work or doing acts required under the terms of this Lease, then performance of such act shall be excused for the period of the delay, and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay, provided that the Delayed Party notified the other party within fifteen (15) days of the Delayed Party being informed of the occurrence of the event causing such delay. The provisions of this Section 53 shall not operate to excuse either party from the payment of any rental or other monetary sums due under the terms of this Lease.

SECTION 54. TIMELY EXECUTION OF LEASE

     Landlord and Tenant agree that this Lease, and the parties’ obligations hereunder, shall automatically be null and void and this Lease shall terminate automatically without further action of the parties if both parties do not execute this Lease and both parties have not received an original thereof within sixty (60) days after the date of execution hereof by the first party to execute this Lease.

SECTION 55. ACCORD AND SATISFACTION

     No payment by Tenant or receipt by Landlord of a lesser amount than the entire rent and all other additional rents and charges hereunder shall be deemed to be other than payment on account of the earliest stipulated rent and other additional rents and charges hereunder, nor shall any endorsement or statement on any check or any letter accompanying any check or payment for rent or other additional rent and charges be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent and other additional rents and charges or pursue any other right or remedy available to the Landlord.

SECTION 56. WAIVER OF JURY TRIAL

     The Landlord and Tenant do hereby knowingly, voluntarily and intentionally waive the right to a trial by jury of any and all issues either now or hereinafter provided by law in any action or proceeding between the parties hereto, or their successors, arising directly or indirectly out of or in any way connected with this Lease or any of its provisions, the Tenant’s use or occupancy of said premises and/or any claim for personal injury or property damage including, without limitation, any action to rescind or cancel this Lease, and any claim or defense asserting that this Lease was fraudulently induced or is otherwise void or voidable. It is intended that said waiver shall apply to any and all defenses, rights and/or counterclaims in any action or proceeding at law or in equity. This waiver is a material inducement for Landlord and Tenant to enter into this Lease.

SECTION 57. LEASEHOLD FINANCING

     (a) Tenant’s Financing Rights. Landlord acknowledges and agrees that Tenant may from time to time during the term, without the consent of Landlord, mortgage or otherwise finance and encumber, whether by leasehold deed of trust or mortgage, collateral assignment of this Lease, lease/sublease-back, and/or assignment/leaseback, any and/or all of its leasehold estate hereunder, and property and rights in and to the Leased Premises granted to it under this Lease, as security for the payment of an indebtedness (any and all of which are herein referred to as a “Leasehold Mortgage” and the holder thereof is herein referred to as “Leasehold Mortgagee”). Any such Leasehold Mortgage shall be a lien only upon Tenant’s leasehold estate hereunder and Tenant’s interests in this Lease. Leasehold Mortgagee or its assigns may enforce such Leasehold Mortgage and acquire title to the leasehold estate and Tenant’s interest in the Leased Premises in any lawful way, and in connection therewith Leasehold Mortgagee may take possession of and rent the Leased Premises.

     (b) Cooperation with Leasehold Mortgagee. Tenant shall notify Landlord (and any Fee Mortgagee, as hereinafter defined in Section 57(c) below), in the manner hereinafter provided for the giving of notice, of the execution of such Leasehold Mortgage and the name and place for service of notice upon Leasehold Mortgagee. Upon such notification of Landlord that Tenant has entered into a Leasehold Mortgage, Landlord hereby agrees for the benefit of such Leasehold Mortgagee, and upon written request by Tenant, to execute and deliver to Tenant and Leasehold Mortgagee: (i) a commercially reasonable “Landlord’s Agreement” and (ii) a commercially reasonable “Landlord’s Waiver”, as described in Section 57(d) below. Landlord further agrees that it will comply with all of the covenants and obligations contained in said documents.

     (c) Tenant shall notify Landlord (and any Landlord Mortgagee, as hereinafter defined in Section 57(e) below), in the manner hereinafter provided for the giving of notice, of the execution of such Leasehold Mortgage and the name and place for service of notice upon Leasehold Mortgagee. Upon such notification of Landlord that Tenant has entered into a Leasehold Mortgage, Landlord hereby agrees for the benefit of such Leasehold Mortgagee, and upon written request by Tenant, to execute and deliver to Tenant and Leasehold Mortgagee a “Landlord’s Agreement” whereby Landlord agrees to recognize the interest of Leasehold Mortgagee and any Successor-Tenant hereunder, on commercially reasonable terms and conditions acceptable to Leasehold Mortgagee.

     (d) Landlord does hereby waive any statutory or other lien of the Landlord in Tenant’s present and after-acquired assets, including among other things, Tenant’s inventory and equipment. To evidence such waiver for the benefit of any lender of Tenant, Landlord shall, upon request, execute and deliver to Tenant a commercially reasonable “Landlord’s Waiver”.

     (e) Landlord Mortgagee. Landlord represents to Tenant that as of the date of this Lease there is no mortgage encumbering Landlord’s leasehold interest in the Building or common areas, and that there will not be such a mortgage for at least sixty (60) days after the date this Lease is fully executed by Landlord and Tenant.

SECTION 58. TENANT ALLOWANCE

     Provided Tenant is not in default under any of the terms and conditions contained herein, Landlord shall reimburse Tenant for a portion of the cost of Tenant’s Work within the demised premises, in the amount and manner hereinafter provided. The amount of such reimbursement shall hereinafter be referred to as “Tenant’s Allowance.” It is understood and agreed that Tenant’s Allowance shall be a reimbursement for a portion of the actual cost incurred by Tenant to complete Tenant’s Work within the demised premises as detailed on Exhibit C. Tenant’s Allowance shall be equal to One Million Ninety-two Thousand Dollars ($1,092,000.00).

     Landlord shall pay Tenant’s Allowance to Tenant when Tenant has opened for business in the Premises, paid the minimum rent and additional rent under Section 5(c) of this Lease for the first month of the term of this Lease and furnished to Landlord the following:

(1)	An original notarized affidavit of Tenant’s general contractor stating that (i) Tenant’s Work has been fully completed in accordance with the plans and specifications described on Exhibit C, subject, however, to Landlord’s verification thereof, and (ii) all subcontractors, laborers and material suppliers have been paid in full;
(2)	An original notarized waiver of liens with respect to the Premises, executed by Tenant’s general contractor; and
(3)	A certificate of use and occupancy for the Premises issued by the appropriate governmental authority.

     Notwithstanding anything to the contrary contained herein, including Section 36 hereof, in the event Landlord does not timely pay the Tenant Reimbursement to Tenant, (a) Landlord shall pay to Tenant interest on such unpaid amounts at eighteen percent (18%) per annum and (b) Tenant shall have the right to deduct any and all such amounts owed Tenant against all minimum rent and all percentage rental (but no other additional rent components) thereafter due Landlord

until such time as Tenant has been credited the full amount of the Tenant Reimbursement plus applicable interest.

     Notwithstanding anything to the contrary contained herein, Landlord reserves the right to offset against Tenant’s Allowance any delinquent amounts due to Landlord by Tenant accrued hereunder. In the event this Lease shall be terminated for any reason prior to the natural expiration of the term of this Lease, Tenant shall pay to Landlord the unamortized portion of Tenant’s Allowance, said amortization to be computed based upon a fifteen (15) year term commencing on the commencement date, and an annual interest of eighteen percent (18%). All tenant improvements and fixtures which are not personal property paid for with the Tenant’s Allowance (“Tenant Improvement Fixtures”) shall, at all times during the term of the Lease and upon the expiration or earlier termination of the Lease, be the property of Landlord. Tenant shall not acquire any interest, equitable or otherwise, in any Tenant Improvement Fixtures.

EX-10.2

Exhibit 10.2

L E A S E

LANDLORD:	JLP-LYNNHAVEN VA LLC
	1798 FREBIS AVENUE
	COLUMBUS OH 43206-0410
TENANT:	DSW INC.
	4150 EAST FIFTH AVENUE
	COLUMBUS, OHIO 43219
PREMISES:	Approximately 20,660 square feet at
	Lynnhaven East Shopping Center
	Virginia Beach, Virginia

TABLE OF CONTENTS

	Page
SECTION 1. PREMISES		3
SECTION 2. LANDLORD’S AND TENANT’S WORK		3
SECTION 3. TERM		5
SECTION 4. MINIMUM RENT		6
SECTION 5. PERCENTAGE RENT		8
SECTION 6. TITLE ENCUMBRANCES; LANDLORD REPRESENATATIONS, WARRANTIES AND COVENANTS		9
SECTION 7. RIGHT TO REMODEL		10
SECTION 8. UTILITIES		11
SECTION 9. GLASS		11
SECTION 10. PERSONAL PROPERTY		11
SECTION 11. RIGHT TO MORTGAGE		12
SECTION 12. SUBLEASE OR ASSIGNMENT		12
SECTION 13. COMMON AREAS		13
SECTION 14. OPERATION OF COMMON AREAS		13
SECTION 15. COMMON AREA MAINTENANCE, TENANT’S SHARE		14
SECTION 16. EMINENT DOMAIN		15
SECTION 17. TENANT’S TAXES		16
SECTION 18. RISK OF GOODS		16
SECTION 19. USE AND OCCUPANCY		16
SECTION 20. NUISANCES		18
SECTION 21. WASTE AND REFUSE REMOVAL		19
SECTION 22. DAMAGE AND DESTRUCTION OF PREMISES		19
SECTION 23. LANDLORD REPAIRS		20
SECTION 24. TENANT’S REPAIRS		20
SECTION 25. COVENANT OF TITLE AND PEACEFUL POSSESSION		21
SECTION 26. TENANT’S AND LANDLORD’S INSURANCE; INDEMNITY		21
SECTION 27. REAL ESTATE TAXES		24
SECTION 28. TENANT’S INSURANCE CONTRIBUTION		25
SECTION 29. FIXTURES		25
SECTION 30. SURRENDER		25
SECTION 31. HOLDING OVER		26
SECTION 32. NOTICE		26
SECTION 33. DEFAULT		26
SECTION 34. WAIVER OF SUBROGATION		28
SECTION 35. LIABILITY OF LANDLORD; EXCULPATION		29
SECTION 36. RIGHTS CUMULATIVE		29
SECTION 37. MITIGATION OF DAMAGES		29
SECTION 38. SIGNS		29
SECTION 39. ENTIRE AGREEMENT		30
SECTION 40. TENANT’S PROPERTY		30
SECTION 41. BINDING UPON SUCCESSORS		30
SECTION 42. HAZARDOUS SUBSTANCES		30
SECTION 43. TRANSFER OF INTEREST		31
SECTION 44. ACCESS TO PREMISES		31
SECTION 45. HEADINGS		32

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	Page
SECTION 46. NON-WAIVER		32
SECTION 47. SHORT FORM LEASE		32
SECTION 48. ESTOPPEL CERTIFICATE		32
SECTION 49. TENANT’S REIMBURSEMENT		32
SECTION 50. TENANT’S TERMINATION RIGHT		33
SECTION 51. NO BROKER		33
SECTION 52. UNAVOIDABLE DELAYS		33
SECTION 53. TIMELY EXECUTION OF LEASE		33
SECTION 54. ACCORD AND SATISFACTION		33
SECTION 55. WAIVER OF JURY TRIAL		34
SECTION 56. LEASEHOLD FINANCING		34

LIST OF EXHIBITS:

EXHIBIT “A” SITE PLAN
EXHIBIT “B” LEGAL DESCRIPTION
EXHIBIT “C” LANDLORD’S WORK
EXHIBIT “D” TENANT’S WORK
EXHIBIT “E” EXISTING USE EXCLUSIVES AND PROHIBITED USES
EXHIBIT “F” SIGNAGE
EXHIBIT “G” TENANT IMPROVEMENTS
EXHIBIT “H” INTENTIONALLY DELETED
EXHIBIT “I” SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

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L E A S E

     THIS AGREEMENT OF LEASE, made this 27^th day of November, 2006, by and between JLP-LYNNHAVEN VA LLC, a Virginia limited liability company (hereinafter referred to as “Landlord”), with offices at 1798 Frebis Avenue, Columbus, Ohio 43206-3764, and DSW INC., an Ohio corporation (hereinafter referred to as “Tenant”) with offices at 4150 East Fifth Avenue, Columbus, Ohio 43219.

W I T N E S S E T H:

SECTION 1. PREMISES

     (a) Landlord, in consideration of the rents to be paid and covenants and agreements to be performed by Tenant, does hereby lease unto Tenant premises comprised of approximately 20,660 square feet of leasable space with an address of 2701 North Mall Drive, # 102, Virginia Beach, Virginia 23452 (the “Premises”) in the shopping center owned by Landlord containing approximately 100,000 square feet of leasable space on approximately 15 acres and commonly known as Lynnhaven East Shopping Center, in the City of Virginia Beach, Boroughs of Lynnhaven and Princess Anne and State of Virginia (the “Center”). The location, size, and area of the Premises and of the Center are substantially as shown on Exhibit “A” attached hereto and made a part hereof (the “Site Plan”). A legal description of the Center is attached hereto as Exhibit “B” and made a part hereof. The approximate dimensions of the Premises shall be 100’ x 200’ plus any additional square footage for Tenant’s loading dock and/or receiving area.

     (b) The square footage specified in Section 1(a) shall be certified to Tenant by Landlord’s architect prior to the Rent Commencement Date (defined in Section 3(b) below). Tenant shall have ninety (90) days from the receipt of such certification to verify or object to Landlord’s measurement. If Tenant objects to Landlord’s measurement within said ninety (90) day period, the parties shall work together in good faith to resolve the differing square footage calculations. In computing the square footage of the Premises, the Premises shall be measured from the exterior surface of exterior walls and the middle of interior walls, excluding the square footage of any mechanical and utility rooms, escalators, elevators, stairs and any other common area space located within the Premises. If the square footage of the Premises as verified and confirmed by Tenant pursuant to this Section 1(b) is less than the size specified in Section 1(a), Base Rent (defined in Section 4(a) below) and other charges shall be proportionately adjusted, but the foregoing shall not be construed as permitting a material variance in dimensions or area.

     (c) Landlord covenants that the Center is or shall be developed in accordance with the Site Plan and that it shall be used as a retail shopping center throughout the term of this Lease. Landlord shall not take or consent to any action which materially adversely affects access to, visibility of, parking for or use of the Premises. Notwithstanding the foregoing, no modification or replacement to the Center shall (i) reduce the ratio of parking spaces (for standard size American cars) to gross leasable area of buildings in the Center below five (5) spaces per 1,000 square feet of leasable space, (ii) alter or make any changes, including any reduction or rearrangement of parking spaces, to that portion of the Center indicated on the Site Plan as the “Protected Area”, (iii) interfere with truck access to the loading doors of the Premises, (iv) materially adversely interfere with customer access to the Premises, (v) materially adversely interfere with the visibility of the Premises from the roads providing direct access to the Center, or (vi) result in the construction of any buildings in the area designated “No Build Area” on the Site Plan. In performing any construction work, repairs or maintenance in the Center permitted under this Lease after Tenant has taken physical possession of the Leased Premises, Landlord shall use good faith, commercially reasonable efforts to prevent any interference with parking for, access to or visibility or use of the Premises or the business of Tenant or any subtenant or licensee of Tenant.

SECTION 2. LANDLORD’S AND TENANT’S WORK

     (a) Prior to delivery of possession of the Premises to Tenant, Landlord shall construct, at its expense, the improvements to the Premises described on Exhibit “C” attached hereto and made a part hereof consistent with plans and specifications approved by Tenant as set

forth in Section 2(e) below (the “Landlord’s Work”). Landlord agrees to deliver the Premises to Tenant with Landlord’s Work substantially completed (as defined in Section 2(c)) on or before June 1, 2007 (the “Delivery Date”). Landlord shall give Tenant notice (the “Estimated Delivery Notice”) no later than March 1, 2007 of the status of Landlord’s construction and the estimated date that Landlord shall deliver the Premises to Tenant with Landlord’s Work substantially completed (the “Estimated Delivery Date”). Landlord may revise the Estimated Delivery Date any time prior to April 1, 2006 (the “Final Delivery Notice Date”), by which time Landlord shall have given Tenant a final notice (the “Final Delivery Notice”) of a firm delivery date (the “Final Delivery Date”) upon which the Landlord’s Work shall be substantially completed and the Leased Premises delivered to Tenant. Upon the sending of the Final Delivery Notice, Landlord shall have no further right to modify the Final Delivery Date. Neither the Estimated Delivery Date nor the Final Delivery Date shall be (y) earlier than (i) thirty (30) days after the date Tenant receives the Estimated Delivery Notice or the Final Delivery Notice, as applicable. If Landlord does not provide a Final Delivery Notice on or before the earlier of the Final Delivery Notice Date and thirty (30) days prior to the Estimated Delivery Date or if the date provided for in such Final Delivery Notice does not comply with the requirements of this Section 2, the Estimated Delivery Date shall be deemed to be the Final Delivery Date, provided such date complies with the requirements of this Section 2. If Landlord does not provide an Estimated Delivery Date on or before the Final Delivery Notice Date or if such date does not comply with the requirements of this Section 2, then the Final Delivery Date shall be deemed to be the Delivery Date.

     (b) In the event that the Premises and Landlord’s Work are not substantially completed and delivered to Tenant on or before the Final Delivery Date, the Base Rent due hereunder shall be adjusted so that, after the Rent Commencement Date, Tenant shall receive a credit against Base Rent thereafter due Landlord equal to one (1) day of Base Rent for each day after the Final Delivery Date until delivery of the Premises is made to Tenant consistent with the terms of this Lease, including substantial completion of the Landlord’s Work. Tenant shall not be obligated to accept possession of the Premises prior to the later of (a) substantial completion of Landlord’s Work and (b) the Final Delivery Date. Time is of the essence regarding all dates set forth in this Section 2.

     (c) For purposes of this Lease, the Landlord’s Work shall be deemed “substantially completed” when (i) all of the Landlord’s Work has been completed except for “punch list items” that do not affect the Tenant’s use of or the appearance of the Premises or Tenant’s ability to perform Tenant’s Work (as defined in Section 2(f) below), (ii) Landlord has satisfied the requirements of Section 2(g), and (iii) Tenant has been furnished with a fully executed non-disturbance agreement from the holder(s) of any then existing Mortgages, which agreement is consistent with Section 11 of this Lease. Landlord shall complete the punch list items within thirty (30) days of the date Tenant notifies Landlord of same. Upon performance of such punch list, Tenant shall promptly acknowledge Landlord’s completion thereof. Punch list items shall not be deemed completed until an authorized representative of Tenant has provided Landlord written acknowledgment of same. Landlord agrees that any and all work performed by Landlord after delivery of the Leased Premises to Tenant shall not unreasonably interfere with Tenant’s performance of Tenant’s Work, and Landlord shall be responsible for any and all costs resulting from any such unreasonable interference.

     (d) Actual possession of the Premises shall have been delivered to Tenant water-tight, free of Hazardous Substances, in a good, structurally sound condition, with all of Landlord’s Work substantially completed, which substantial completion shall be evidenced by Landlord’s architect to Tenant.

     (e) The Landlord’s Work and Tenant’s Work shall be performed (i) in a good and workmanlike manner and in accordance with plans and specifications approved by the other party, which approval shall not be unreasonably withheld or delayed and (ii) in compliance with all applicable governmental codes, laws, ordinances and regulations.

     (f) Landlord and Tenant agree that they shall conduct a joint walk through of the Premises approximately two (2) weeks prior to the Final Delivery Date to ascertain the status of Landlord’s construction. Tenant agrees to provide, at its expense, upon delivery of the Premises to Tenant, the improvements to the Premises described on Exhibit “D” attached hereto and made a part hereof (the “Tenant’s Work”).

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     (g) Completion of Construction of Leased Premises. Prior to the Final Delivery Date, Landlord shall satisfy the following conditions:

1. Landlord shall furnish Tenant with a temporary certificate of occupancy and other necessary approvals which must be issued by the appropriate governmental authorities prior to the commencement of Tenant’s Work and the occupancy and use of the Premises as contemplated. Landlord agrees to provide a permanent certificate of occupancy prior to Tenant’s merchandising and, if required by the issuing authority, the setting of fixtures for the Premises, and otherwise as soon as available in the ordinary course of the issuing authority’s practice.

2. The architect engaged by Landlord shall execute a certificate of completion that the Premises has been constructed in a good and workmanlike manner in accordance with the plans and specifications approved by Tenant and the other requirements for Landlord’s Work hereunder.

3. Tenant shall have been furnished with a fully executed original of a commercially reasonable non-disturbance and attornment agreement pursuant to Section 11 hereof.

4. Tenant shall have been notified no later than one hundred twenty (120) days prior to the Final Delivery Date of all applicable local governmental authority code requirements, if any, for the installation of Tenant’s fixtures at the Premises and for low voltage electrical work in connection with the installation of Tenant’s music, telephone and security systems at the Premises.

5. Tenant shall have been furnished with a list of all subcontractors who performed work on the Premises, along with direct contact information for, the work discipline of, and the work performed by each.

6. Tenant shall have been furnished with two (2) copies of all contractors’, subcontractors’ and suppliers’ warranties relating to the Premises.

7. Tenant shall have been furnished with two (2) copies of all operations and maintenance manuals relating to materials and systems used or installed in the construction of the Premises.

8. Tenant shall have been furnished with two (2) copies of the record drawings for the construction of the Premises, marked to reflect actual locations of all components of the Premises.

     (h) In addition to any guarantees provided to Tenant elsewhere in this Lease, Landlord hereby unconditionally guarantees all of Landlord’s Work against defective workmanship and materials for one (1) year from the Commencement Date (as defined in Section 3(a)).

     (i) Landlord shall perform any additional work not required to be performed by Tenant under this Lease in order for Landlord to obtain a permanent certificate of occupancy for the Premises, whether such work relates to the Premises or other portions of the Center.

SECTION 3. TERM

     (a) The “Commencement Date” of this Lease shall be the later of (i) the date actual, physical possession of the Premises is delivered to Tenant with the Landlord’s Work substantially completed and (ii) the Final Delivery Date.

     (b) The initial term (the “Initial Term”) of the Lease shall commence on the earlier of (i) the date on which the Tenant opens for business in the Premises, and (ii) ninety (90) days after the Commencement Date (the “Rent Commencement Date”) and end on the last day of the fifteenth (15^th) full Lease Year. The term “Lease Year” shall mean a period of twelve (12) consecutive calendar months. The first Lease Year during the term hereof shall commence on the first day of the first February following the Rent Commencement Date. Each subsequent

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Lease Year shall begin on the anniversary of the first Lease Year. The period from the Rent Commencement Date to the first day of the first February following the Rent Commencement Date (the “Initial Period”) shall be a partial Lease Year.

     (c) If for any reason, the Commencement Date has not occurred by September 1, 2007, Tenant shall have the right and option to either (i) terminate this Lease or (ii) elect that the Commencement Date not occur, and, thereby defer delivery of the Leased Premises, until January 2, 2008. The remedies set forth in this paragraph shall be in addition to any and all other rights and remedies provided for Tenant in the Lease or available to Tenant in law or at equity.

     (d) Tenant shall have three (3) consecutive separate options to extend the term of this Lease for successive renewal terms of five (5) Lease Years each. Tenant may exercise each such renewal option by giving written notice to Landlord at least one-hundred eighty (180) days prior to the end of the then current term or renewal term.

     (e) The Initial Term and any renewal terms are hereinafter collectively referred to as the “term”.

     (f) Beginning on the date of this Lease and ending on the Commencement Date, Tenant, its employees and agents shall have the right to enter the Premises or any part thereof at reasonable times during regular business hours for the purpose of making such inspections as Tenant may deem reasonably necessary. In consideration of Tenant’s right to inspect the Premises, Tenant agrees to indemnify, defend and hold Landlord harmless from any and all loss, damage, claims, costs, demands or expenses (including reasonable attorney’s fees) resulting from such entry on the Premises by Tenant or its agents.

     (g) From the date upon which the Premises are delivered to Tenant for its work until the Commencement Date of the lease term, Tenant shall observe and perform all of its obligations under this Lease (except Tenant’s obligation to operate and pay Base Rent, percentage rent and Tenant’s Proportionate Share (defined in Section 15(c) below) of “Maintenance Costs” (defined and provided for in Section 15(b) hereof Real Estate Taxes (defined and provided for in Section 27(b) hereof) and insurance (provided for in Section 28 hereof). In the event Tenant fails to open for business within one hundred twenty (120) days after the date possession of the Premises has been delivered to Tenant, Landlord, in addition to any and all other available remedies, may require Tenant to pay to Landlord, in addition to all other rent and charges herein, as liquidated damages and not as a penalty, an amount equal to one-three hundred sixty five thousandths (1/365) of the annual Base Rent for each day such failure to open continues.

SECTION 4. MINIMUM RENT

     From and after the Rent Commencement Date, Tenant covenants and agrees to pay on a monthly basis during the term “Base Rent” in the following amounts to Landlord at the address listed above or such other place as Landlord may by thirty (30) days’ prior written notice to Tenant direct:

     (a) For the Initial Term of the Lease Tenant agrees to pay to Landlord, as Base Rent for the Premises, equal consecutive monthly installments of Twenty-five Thousand Dollars ($25,000.00) [which is calculated at Twenty Dollars ($20.00) per square foot using 15,000 square feet as the size of the Premises], commencing on the Rent Commencement Date, and continuing on the first day of each calendar month during the Initial Term of the Lease. Notwithstanding the foregoing, in the event Tenant’s annual gross sales from the Premises reach Four Million One-hundred Forty Thousand Dollars ($4,140,000.00) in any Lease Year during the Initial Term hereof (the “Gross Sales Threshold”), then Tenant agrees to pay to Landlord, as Base Rent for the Premises in each lease year thereafter, equal consecutive monthly installments of Thirty Thousand Dollars ($30,000,00) [which is calculated at Twenty Dollars ($20.00) per square foot using 18,000 square feet as the size of the Premises], commencing on the first month of the Lease Year following Tenant’s annual statement of gross sales evidencing the Gross Sales Threshold which statement shall provided to Landlord in accordance with Section 6 (e) below. Notwithstanding the foregoing, in the event Tenant’s annual gross sales from the Premises reach Four Million Seven Hundred Fifty-one Thousand Eight Hundred Dollars ($4,751,800.00) in any Lease Year during the Initial Term hereof (the “Second Gross Sales Threshold”) then Tenant

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agrees to pay to Landlord in each Lease Year thereafter, as Base Rent for the Premises, equal monthly installments of Thirty-four Thousand Four Hundred Thirty-three and 33/100 Dollars ($34,433.33) [which is calculated at Twenty Dollars ($20.00) per square foot using 20,660 square feet as the size of the Premises], commencing on the first month of the Lease Year following Tenant’s annual statement of gross sales evidencing the Second Gross Sales Threshold which statement shall be provided to Landlord in accordance with Section 6 (e) below. The square feet figures set forth above which are used to calculate Base Rent payments under this Section 4(a) shall be referred to as “Rentable Square Feet”. The monthly installments of Base Rent payable under this Section 4 shall be paid in advance on or before the first day of each calendar month from and after the Rent Commencement Date during the term hereof without notice or demand therefor and without any offsets or deductions whatsoever except as otherwise provided in this Lease. Base Rent for any partial month shall be prorated based upon a thirty (30) day month. Base Rent for any Initial Period shall be the same as the Base Rent for the first Lease Year. As used in this Lease, “Rent” shall mean Base Rent in addition to all other sums due and owing from Tenant to Landlord under this Lease.

     (b) Provided Tenant has fully complied with all of the terms, provisions, and conditions on its part to be performed under this Lease and is not in default under this Lease, Tenant may, by giving written notice to the Landlord at least six (6) months on or before the expiration of the Initial Term of this Lease, extend such term for a period of five (5) years upon the same covenants and agreements as are herein set forth. The Base Rent during the first renewal term shall be the same as the Base Rent paid by Tenant in Lease Year fifteen (15) of the Initial Term hereof unless Tenant’s annual gross sales from the Premises reach Five Million Dollars ($5,000,000.00), whereupon Base Rent shall be increased by ten percent (10%) for the Lease Years remaining in such first renewal term.

     (c) Provided Tenant has fully complied with all of the terms, provisions, and conditions on its part to be performed under this Lease and is not in default under this Lease, Tenant may, by giving written notice to the Landlord at least six (6) months on or before the expiration of the first renewal term of this Lease, extend such term for a period of five (5) years upon the same covenants and agreements as are herein set forth. The Base Rent during the second renewal term shall be the same as the Base Rent paid by Tenant in the last Lease Year of the first renewal term unless Tenant’s annual gross sales from the Premises reach Five Million Dollars ($5,000,000.00), whereupon Base Rent shall be increased by ten percent (10%) for the Lease Years remaining in such second renewal term.

     (d) Provided Tenant has fully complied with all of the terms, provisions, and conditions on its part to be performed under this Lease and is not in default under this Lease, Tenant may, by giving written notice to the Landlord at least six (6) months on or before the expiration of the second renewal term of this Lease, extend such term for a period of five (5) years upon the same covenants and agreements as are herein set forth. The Base Rent during the third renewal term shall be the same as the Base Rent paid by Tenant in the last Lease Year of the second renewal term unless Tenant’s annual gross sales from the Premises reach Five Million Dollars ($5,000,000.00), whereupon Base Rent shall be increased by ten percent (10%) for the Lease Years remaining in such third renewal term. The initial term and any renewal term(s) are hereinafter collectively referred to as the “term”.

     (e) In the event any sums required under this Lease to be paid are not received when due, then all such amounts shall bear interest from the due date thereof until the date paid at the rate of interest equal to two percent (2%) over the prime rate in effect from time to time as established by National City Bank, Columbus, Ohio (the “Interest Rate”), and shall be due and payable by Tenant without notice or demand, Tenant shall pay the foregoing interest thereon in addition to all default remedies of Landlord pursuant to Section 33 below.

     (f) Notwithstanding anything herein contained to the contrary, Tenant shall initially pay to Landlord as additional Rent, simultaneously with the payment of Base Rent, payable in equal monthly installments, the estimated monthly amount of Tenant’s Proportionate Share of Maintenance Costs (provided for in Section 15 hereof), Real Estate Taxes (provided for in Section 27 hereof) and insurance (provided for in Section 28 hereof).

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SECTION 5. PERCENTAGE RENT

     (a) Beginning with the first Lease Year, Tenant shall pay to Landlord, in addition to Base Rent, upon the conditions and at the times hereinafter set forth, percentage rent equal to two percent (2%) of Tenant’s gross sales (as hereinafter defined) in excess of the number obtained by dividing (a) Base Rent for the applicable lease year by (b) the number .02. The annual percentage rent shall be paid by Tenant to Landlord within ninety (90) days after the end of each Lease Year. Each such payment shall be accompanied by a statement signed by an authorized representative of Tenant setting forth Tenant’s gross sales for such Lease Year. For purposes of permitting verification by Landlord of the gross sales reported by Tenant, Landlord shall have the right, not more than one (1) time per Lease Year, upon not less than five (5) business days notice to Tenant, to audit during normal business hours in Tenant’s corporate office, Tenant’s books and records relating to Tenant’s gross sales for a period of two (2) years after the end of each Lease Year. Landlord agrees that no contingency fee auditor shall be employed by Landlord for the purpose of conducting any such audit. If such an audit reveals that Tenant has understated its gross sales by more than three percent (3%) for any Lease Year, Tenant, in addition to paying the additional percentage rent due, shall pay the reasonable cost of the audit within thirty (30) days of Tenant’s receipt of Landlord’s demand for the same and copies of all bills or invoices on which such cost is based.

     (b) Each Lease Year shall constitute a separate accounting period, and the computation of percentage rental due for any one period shall be based on the gross sales for such Lease Year.

     (c) The term “gross sales” as used in this Lease is hereby defined to mean the gross dollar aggregate of all sales or rental or manufacture or production of merchandise and all services, income and other receipts whatsoever of all business conducted in, at or from any part of the Premises, whether for cash, credit, check, charge account, gift or merchandise certificate purchased or for other disposition of value regardless of collection. Should any departments, divisions or parts of Lessee’s business be conducted by any subleases, concessionaires, licensees, assignees or others, then there shall be included in Lessee’s gross sales, all “gross sales” of such department, division or part, whether the receipts be obtained at the Premises or elsewhere in the same manner as if such business had been conducted by Lessee. Gross sales shall exclude the following: (i) all credit, refunds, and allowances granted to customers; (ii) all excise taxes, sales taxes, and other taxes levied or imposed by any governmental authority upon or in connection with such sales; (iii) bulk sales of goods in connection with the sale of Tenant’s business; (iv) sales of fixtures, furniture, equipment and other items not made in the ordinary course of business; (v) salvage sales of damaged merchandise; (vi) discount sales made to employees of the Tenant and Tenant’s subsidiaries and affiliated corporations, if any; (vii) exchanges of merchandise between Tenant’s warehouse or other stores and other similar movements of merchandise; (viii) returns to suppliers; (ix) the proceeds from vending machines and coin operated telephones and commissions on such proceeds to the extent such proceeds and commissions are less than five percent (5%) of Gross Sales exclusive of such proceeds and commissions; (x) uncollectible customer charges and bad checks; (xi) disallowed credit card amounts and credit card service charges or fees retained by the credit card company; (xii) delivery charges; and (xiii) customer credit insurance.

     (d) The percentage rental, if any, shall be paid within ninety (90) days after the end of each lease year, accompanied by a statement in writing signed by Tenant setting forth its gross sales from the sale of all items for such lease year. Tenant shall keep at its principal executive offices, where now or hereafter located, true and accurate accounts of all receipts from the Premises. Landlord, its agents and accountants, shall have access to such records at any and all times during regular business hours for the purpose of examining or auditing the same. Tenant shall also furnish to Landlord any and all supporting data in its possession relating to gross sales and any deductions therefrom as Landlord may reasonably require. Landlord agrees to keep any information obtained therefrom confidential, except as may be required for Landlord’s tax returns, or in the event of litigation or arbitration where such matters are material.

     (e) Tenant shall at all times maintain accurate records which shall be available for Landlord’s inspection at any reasonable time.

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     (f) If Landlord, for any reason, questions or disputes any statement of percentage rental prepared by Tenant, then Landlord, at its own expense, may employ such non-contingency fee accountants as Landlord may select to audit and determine the amount of gross sales for the period or periods covered by such statements. If the report of the accountants employed by Landlord shall show any additional percentage rental payable by Tenant, then Tenant shall pay to Landlord such additional percentage rental plus interest at one (1) point over the prime rate, commencing on the date such percentage rentals should have been paid, within thirty (30) days after such report has been forwarded to Tenant, unless Tenant shall, within said thirty (30) day period, notify Landlord that Tenant questions or disputes the correctness of such report. In the event that Tenant questions or disputes the correctness of such report, the accountants employed by Tenant and the accountants employed by Landlord shall endeavor to reconcile the question(s) or dispute(s) within thirty (30) days after the notice from Tenant questioning or disputing the report of Landlord’s accountants. In the event that it is finally determined by the parties that Tenant has understated percentage rent for any Lease year by three percent (3%) or more, Tenant shall pay the cost of the audit. Furthermore, if Tenant’s gross sales cannot be verified due to the insufficiency or inadequacy of Tenant’s records, then Tenant shall pay the cost of the audit. The cost of any audit resulting from failure to report percentage rent after written notification of default shall be at the sole cost of Tenant.

SECTION 6. TITLE ENCUMBRANCES; LANDLORD REPRESENATATIONS, WARRANTIES AND COVENANTS

     (a) Tenant’s rights under this Lease are subject and subordinate to those title matters set forth in Landlord’s owner’s title policy issued by First American Title Insurance Company, being Policy No. 104036716 VMDO, dated April 19, 2006, a copy of which has been provided to Tenant, specifically including but not limited to the terms and conditions of a certain Total Site Agreement by and between Lynnhaven Mall Company, a Virginia limited partnership and the Estate of Jack Stein, Arthur H. Stein, Edward S. Stein, Robert M. Stein and Barbara S. Feldman, First & Merchants National Bank as Trustee under Trust Agreement dated December 8, 1978 and known as Trust No. 1, Carrie M. Stein, Joanne F. Stein and Jane P. Stein, recorded December 21, 1978, in Book 1856, Page 335, Circuit Court of Virginia Beach, Virginia as amended by that certain Declaration by and between Arthur H. Stein, Edward S. Stein, Robert M. Stein and Barbara F. Fischer, Carrie M. Stein, Joanne P. Stein and Jane P. Stein, recorded February 15, 1985 in Book 2392, Page 171, Circuit Court of Virginia Beach, Virginia along with that certain Declaration of Protective Covenants and Restrictions by and between the City of Virginia Beach Development Authority and Robert M. Stein, Barbara S. Feldman, Arthur H. Stein, Carrie M. Stein, Robert M. Stein, Joanne F. Stein, Edward S. Stein, Jane P. Stein, Annette K Stein and Robert M. Stein recorded on December 21, 1978, in Book 1856, Page 186, Circuit Court of Virginia Beach, Virginia (collectively the “REA”) Tenant agrees that it shall abide by the terms and conditions of the REA.

     (b) Landlord covenants, represents and warrants to Tenant that: (i) the REA has not been modified, amended or terminated except as set forth above; (ii) the REA is currently in full force and effect; (iii) to its actual knowledge as of the date hereof, no default under the REA exists thereunder beyond any applicable notice and cure period; and (iv) the REA is, and shall remain, superior in lien to all mortgages and related liens affecting the Center and all other land which is encumbered by the REA. Tenant shall comply with the terms and conditions of the REA to the extent same affects the Premises (it being agreed that Tenant shall not be obligated to expend any sums in connection with such compliance).

     (c) Landlord shall, during the term: (i) perform and observe all of the terms, covenants, provisions and conditions of the REA on Landlord’s part to be performed and observed; (ii) defend, indemnify and hold harmless Tenant from and against and all claims, demands, causes of action, suits, damages, liabilities and expenses of any nature arising out of or in connection with the enforcement of, or a claimed breach by, Landlord of any covenant, term, condition or provision of the REA; and (iii) diligently enforce, at its sole expense, the covenants, agreements and obligations of the REA.

     (d) Whenever, pursuant to the REA, the consent or approval of Landlord shall be required by or requested, and such consent or approval could diminish the rights or increase the obligations of Tenant thereunder or under this Lease, or could adversely affect Tenant’s use or occupancy of the Premises, or the conduct of Tenant’s business therein, such consent or approval

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shall not be granted without the prior written consent of Tenant, which consent may be withheld in its sole and absolute discretion.

     (e) Landlord shall not amend, or modify the REA if such amendment or modification could diminish the rights or increase the obligations of Tenant thereunder of under this Lease, or could adversely affect Tenant’s use or occupancy of the Premises or the conduct of Tenant’s business therein, nor shall Landlord terminate the REA.

     (f) Landlord further represents, warrants and/or covenants:

1. That it has the right to enter into this Lease and that the person(s) signing this Lease on its behalf has authority to enter into this Lease and to bind Landlord to the terms, covenants and conditions contained herein.

2. That it has good and marketable fee simple title to the Premises and the Center is free and clear of all easements, restrictions, liens and encumbrances except as described in Section 6(a) above.

3. That the Premises, including without limitation, the roof and HVAC system, are or as of the Commencement Date shall be, in good condition and repair.

4. That the Premises is, or as of the Commencement Date shall be, properly zoned for use by the Tenant as a retail footwear location and there are no restrictive covenants or other title encumbrances which restrict in any way the use of the Premises as a retail footwear location.

5. That Landlord has, or as of the Commencement Date shall have, obtained all necessary approvals and permits from appropriate governmental authorities for the development of the Center in accordance with the Site Plan and for the construction and occupancy of the Premises by Tenant as a retail footwear location.

6. That Landlord has not entered into, and shall not hereafter prior to the expiration or termination of this Lease enter into, any leases, agreements or restrictive covenants that would prohibit or interfere with the use of the Premises by the Tenant as a retail footwear location.

7. In the event the legal description of the Center described on Exhibit “B” hereto indicates that the Center is composed of more than one (1) parcel or lot, there exists no strips or gores between such parcels or lots which are not owned by Landlord.

8. No third-party consents or approvals are required in order for Landlord to enter into this Lease, or for the performance of Landlord’s Work.

9. The Center now has, and on the Commencement Date shall have, access to and from Lynnhaven Parkway and North Mall Drive, as shown on the Site Plan, for the passage of vehicular traffic.

10. As of the date of this Lease, there are no sign ordinances, restrictive covenants, uniform sign plans or other signage restrictions which would prevent the Premises from having the signage (including, without limitation, the square foot area and size of letters) as depicted on Exhibit “F” hereof.

SECTION 7. RIGHT TO REMODEL

     (a) Tenant may, at Tenant’s expense, make repairs and alterations to the interior non-structural portions of the Premises and remodel the interior of the Premises, excepting structural and exterior changes, in such manner and to such extent as may from time to time be deemed necessary by Tenant for adapting to the Premises to the requirements and uses of Tenant and for the installation of its fixtures, appliances and equipment. Any structural or exterior alteration may only be made by Tenant with the prior written approval of Landlord, which approval may be granted or withheld in Landlord’s sole discretion. All plans for any structural alterations shall

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be submitted to Landlord for endorsement of its approval prior to commencement of work. Upon Landlord’s request, Tenant shall be obligated, if it remodels and/or alters the Premises, to restore the Premises upon vacating the same. Tenant will indemnify and save harmless the Landlord from and against all mechanics liens or claims by reason of repairs, alterations or improvements which may be made by Tenant to the Premises. Inasmuch as any such alterations, additions or other work in or to the Premises may constitute or create a hazard, inconvenience or annoyance to the public and other tenants in the Center, Tenant shall, if so directed in writing by Landlord, erect barricades, temporarily close the Premises, or affected portion thereof, to the public or take whatever measures are necessary to protect the building containing the Premises, the public and the other tenants of the Center for the duration of such alterations, additions or other work. If Landlord determines, in its sole judgment, that Tenant has failed to take any of such necessary protective measures, and Tenant fails to cure same within ten (10) days after notice thereof, Landlord may do so and Tenant shall reimburse Landlord for the cost thereof within ten (10) days after Landlord bills Tenant therefor.

     (b) All such work, including Tenant’s Work pursuant to Exhibit “D” shall be performed lien free by Tenant. In the event a mechanic’s lien is filed against the premises or the Center, Tenant shall discharge or bond off same within ten (10) days from the filing thereof. If Tenant fails to discharge said lien, Landlord may bond off or pay same without inquiring into the validity or merits of such lien, and all sums so advanced shall be paid on demand by Tenant as additional rent.

SECTION 8. UTILITIES

     (a) Prior to the Commencement Date, Landlord shall provide, at Landlord’s expense, by separate meter, electric, water, sewer, and other utilities to the Premises sufficient to meet Tenant’s requirements. Landlord shall further provide, or cause to be provided, all such utility services to the Premises during the term of this Lease. Tenant agrees to be responsible and pay for all public utility services rendered or furnished to the Premises during the term hereof, including, but not limited to, heat, water, gas, electric, steam, telephone service and sewer services, together with all taxes, levies or other charges on such utility services when the same become due and payable. Tenant shall be responsible for all utility services and costs inside the premises. Landlord shall not be liable for the quality or quantity of or interference involving such utilities unless due directly to Landlord’s negligence.

     (b) During the term hereof, whether the Premises are occupied or unoccupied, Tenant agrees to maintain heat sufficient to heat the Premises so as to avert any damage to the Premises on account of cold weather.

     (c) Tenant agrees to be responsible for its rubbish removal from the Premises. Tenant shall be permitted to maintain and operate, at no extra charge: (i) a trash compactor in the portion of the Common Areas designated on Site Plan as “Trash Compactor Pad”; and (ii) a trash container(s) in the portion(s) of the Common Areas designated on Site Plan as “Trash Container Pad”. Tenant, at its sole cost and expense, shall keep the trash compactor and containers neat and clean and repair any damage caused by use and storage of such compactor and containers.

SECTION 9. GLASS

     The Tenant shall maintain the glass part of the Premises, promptly replacing any breakage and fully saving the Landlord harmless from any loss, cost or damage resulting from such breakage or the replacement thereof.

SECTION 10. PERSONAL PROPERTY

     The Tenant further agrees that all personal property of every kind or description that may at any time be in or on the Premises shall be at the Tenant’s sole risk, or at the risk of those claiming under the Tenant, and that the Landlord shall not be liable for any damage to said property or loss suffered by the business or occupation of the Tenant caused in any manner whatsoever.

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SECTION 11. RIGHT TO MORTGAGE

     (a) Landlord reserves the right to subject and subordinate this Lease at all times to the lien of any deed of trust, mortgage or mortgages now or hereafter placed upon Landlord’s interest in the Premises; provided, however, that no default by Landlord, under any deed of trust, mortgage or mortgages, shall affect Tenant’s rights under this Lease, so long as Tenant performs the obligations imposed upon it hereunder and is not in default hereunder, and Tenant attorns to the holder of such deed of trust or mortgage, its assignee or the purchaser at any foreclosure sale. Any such subordination shall be contingent upon Tenant receiving a commercially reasonable subordination, non-disturbance and attornment agreement (“SNDA”). It is a condition, however, to the subordination and lien provisions herein provided, that Landlord shall procure from any such mortgagee an agreement in writing, which shall be delivered to Tenant or contained in an SNDA, providing in substance that so long as Tenant shall faithfully discharge the obligations on its part to be kept and performed under the terms of this Lease and is not in default under the terms hereof, its tenancy will not be disturbed nor this Lease affected by any default under such mortgage. The parties acknowledge that the SNDA attached hereto as Exhibit “I” is commercially reasonable. Landlord represents and warrants that, as of the date of this Lease and the Commencement Date, there are no mortgages, ground leases or other encumbrances that could dispossess Tenant’s leasehold interest hereunder (collectively, “Mortgages”) on Landlord’s fee title to the Center other than that certain Deed of Trust, Assignment of Rents and Security Agreement granted by Landlord in favor of Key Bank National Association and recorded on September 6, 2006 in the City of Virginia Beach Recorder’s Office as Document Number 20060906001348180 (the “Mortgage”). Landlord agrees that Tenant’s obligations under this Lease shall be contingent upon Tenant entering into an SNDA with the holder of such Mortgage on or before the Commencement Date.

     (b) Wherever notice is required to be given to Landlord pursuant to the terms of this Lease, Tenant will likewise give such notice to any mortgagee of Landlord’s interest in the Premises upon notice of such mortgagee’s name and address from Landlord. Furthermore, such mortgagee shall have the same rights to cure any default on the part of Landlord that Landlord would have had.

SECTION 12. SUBLEASE OR ASSIGNMENT

     (a) Tenant may assign Tenant’s interest in this Lease or sublet all or any portion of the Premises to a nationally or regionally recognized retailer without Landlord’s consent. Any other assignment or subletting not specifically provided for in this Section 12 shall be subject to Landlord’s prior written consent, which consent shall not be unreasonably withheld. Landlord’s review of the proposed assignee or subtenant shall be limited to business reputation, business experience, a retail use compatible with then existing tenant mix of the Center, and financial ability to perform its obligations under this Lease or the proposed sublease, as the case may be. In any such event, Tenant shall remain fully and primarily liable hereunder. Tenant’s right to assign or sublet shall be subject to any then existing exclusives or primary use exclusives for tenants leasing more than 15,000 square feet of space in the Center.

     Tenant may, without the consent of Landlord, (i) grant licenses and/or concessions within the Premises or (ii) assign or sublet all or any portion of the Premises to (a) any parent, affiliate or subsidiary corporation of Tenant; (b) a transferee or successor by merger, consolidation or acquisition of Tenant or its parent or subsidiary; or (c) a transferee with a good business reputation who is acquiring all or substantially all of the stores of Tenant in the State of Virginia or the assets of Tenant, its parent or subsidiary. Any such assignee or sublessee shall be bound by the terms of this Lease. Tenant shall deliver to Landlord in the ordinary course of its business an instrument whereby the assignee or entity succeeding to Tenant’s interest hereunder agrees to be bound by the terms of this Lease.

     (b) Landlord may assign Landlord’s interest in this Lease without the consent of Tenant (a) to any entity to which Landlord transfers its fee interest in the Premises provided such entity (i) agrees in writing to be bound by all the terms of this Lease and (ii) such assignment is pursuant to a bona fide arm’s length transaction not designed to reduce Landlord’s liability or to otherwise exempt Landlord from any provision of this Lease or (b) subject to Section 12, as security for any indebtedness undertaken by Landlord.

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SECTION 13. COMMON AREAS

     Landlord grants to Tenant and its customers, agents, employees, licensees, invitees and subtenants, a non-exclusive easement in common with the other tenants of the Center for the use of all Common Areas. Landlord hereby covenants and agrees that Landlord shall not grant any party other than tenants of the Center and their customers, agents, employees, licensees, invitees and subtenants a right to utilize the parking areas in the Center, and Landlord shall use commercially reasonable efforts to restrict the use of the parking areas to such parties. “Common Areas” means all areas and facilities in the Center provided and so designated by Landlord and made available by Landlord in the exercise of good business judgment for the common use and benefit of tenants of the Center and their customers, employees and invitees. Common Areas shall include (to the extent the same are constructed), but not be limited to, the parking areas, sidewalks, landscaped areas, corridors, stairways, boundary walls and fences, incinerators, truckways, service roads, and service areas not reserved for the exclusive use of Tenant or other tenants.

SECTION 14. OPERATION OF COMMON AREAS

     (a) From and after the Commencement Date, Landlord, at its cost and expense, shall operate the Center and maintain the Common Areas and the Center in a clean and safe condition and repair so that Tenant and its customers, guests, invitees, licensees, officers and employees can use and enjoy the same. The obligations of Landlord pursuant hereto shall include, without limitation, the maintenance of the Center and any pylon structure(s) (excluding therefrom Tenant’s advertising panels), regular cleaning of the Common Areas, removal of trash and debris from the Common Areas, repairing the asphalt and concrete portions of the Common Areas (including potholes, curbs and sidewalks), repairing common utility lines and facilities, repairing storm drains, repairing parking lot lights, maintaining the landscaped portion of the Common Areas (including regular grass cutting), maintaining floodlights and other necessary means of illumination sufficient to illuminate the Common Areas during twilight and evening hours that Tenant’s store is open for business and in operation, prompt removal of snow and ice on every occasion where safety of the Common Areas or access to the Premises is impeded, and periodic restriping of the parking area. Landlord covenants that such maintenance and repair shall be planned and preventative maintenance undertaken in order to maintain the Common Areas in a good and usable condition and so as to avoid any breakdown of maintenance and avoidable costly repairs. Landlord shall at all times have exclusive control of the Common Areas and may at any time and from time to time: (i) promulgate, modify and amend reasonable rules and regulations for the use of the Common Areas, which rules and regulations shall be binding upon Tenant upon delivery of a copy thereof to Tenant; (ii) temporarily close any part of the Common Areas, including but not limited to closing the streets, sidewalks, road or other facilities to the extent necessary to prevent a dedication thereof or the accrual of rights of any person or of the public therein; (iii) exclude and restrain anyone from the use or occupancy of the Common Areas or any part thereof except bona fide customers and suppliers of the tenants of the Center who use said areas in accordance with the rules and regulations established by Landlord; and (iv) engage others to operate and maintain all or any part of the Common Areas, on such terms and conditions as Landlord shall, in its sole judgment, deem reasonable and proper; and (v) make such changes in the Common Areas as in its opinion are in the best interest of the Center, including but not limited to changing the location of walkways, service areas, driveways, entrances, existing automobile parking spaces and other facilities, changing the direction and flow of traffic and establishing prohibited areas; provided, however, that any such change shall be subject to the terms and conditions of Section 1(c) of this Lease.

     (b) Tenant shall keep all Common Areas free of obstructions created or permitted by Tenant. Tenant shall permit the use of the Common Areas only for normal parking and ingress and egress by its customers and suppliers to and from the Premises. If in Landlord’s opinion unauthorized persons are using any of the Common Areas by reason of Tenant’s occupancy of the Premises, Landlord shall have the right at any time to remove any such unauthorized persons from said areas or to restrain unauthorized persons from said areas. Landlord, Tenant, and others constructing improvements or making repairs or alterations in the Center shall have the right to make reasonable use of portions of the Common Areas.

     (c) Throughout the term, Landlord shall keep the Common Areas fully lighted and open to the customers of the Center seven (7) days a week from dusk until 11:00 p.m. Monday

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through Saturday and until 7:00 p.m. on Sunday (“Normal Hours”). Upon request of Tenant, Landlord shall keep the Common Areas lighted for as long as after Normal Hours as Tenant shall request, provided Tenant shall pay for a share of the reasonable cost of said requested lighting, which share shall be equal to the product of (i) such costs, and (ii) a fraction, the numerator of which shall be the number of square feet of leasable space within the Premises and the denominator of which shall be the aggregate number of square feet of leasable space of all premises within the Center (including the Premises) open later than Normal Hours (excluding, however, those tenants and occupants who separately control and pay for their own Common Area lighting). In addition to the foregoing, Landlord shall provide for low level security lighting from one (1) hour after the close of business in the Premises until dawn.

SECTION 15. COMMON AREA MAINTENANCE, TENANT’S SHARE

     (a) Tenant shall initially pay to Landlord as additional rental, simultaneously with the payment of Base Rent called for under Section 4(a), the estimated monthly amount of Tenant’s Proportionate Share of the “Maintenance Costs” (as defined in Section 15(b) below) for the operation and maintenance of the Common Areas as set forth in Section 4(c), One and 75/100 Dollars ($1.75) per square foot based on the Rentable Square Feet then in effect under Section 5(a) above.

     (b) The Maintenance Costs for the common areas shall be computed on an accrual basis, under generally accepted accounting principles, and shall include all costs of operating, maintaining, repairing and replacing the common areas, including by way of example but not limitation: (i) cost of labor (including worker’s compensation insurance, employee benefits and payroll taxes); (ii) materials, and supplies used or consumed in the maintenance or operation of the common area; (iii) the cost of operating and repairing of the lighting; (iv) cleaning, painting, removing of rubbish or debris, snow and ice, private security services, and inspecting the common areas; (v) the cost of repairing and/or replacing paving, curbs, walkways, markings, directional or other signs; landscaping, and drainage and lighting facilities; (vi) rental paid for maintenance of machinery and equipment; and (vii) a reasonable allowance to Landlord for Landlord’s supervision, which allowance shall not in an accounting year exceed five percent (5%) of the total of all Maintenance Costs (excluding insurance costs) for such accounting year (all of the foregoing are collectively referred to herein as “Maintenance Costs”). Notwithstanding the foregoing, the following shall be excluded, deducted or credited from Maintenance Costs when computing Tenant’s Proportionate Share of same: (a) Net recoveries received by Landlord from tenants as a result of any act, omission, default or negligence or as the result of breaches by tenants of the provisions of their leases and/or other amounts received by Landlord from third parties, which recoveries and/or amounts reimburse Landlord for or reduce Maintenance Costs; (b) Gross revenues from charges, if any, made for the use of the parking facilities and other Common Areas or facilities of the Center (including, without limitation, the sale or rental of advertising space); (c) The cost of the land underlying and the construction of the Center, whether initially or in connection with any replacement or expansion thereof and whether mandated by law or otherwise, including, without limitation, costs of correcting (I) defective conditions in the Center resulting from defects in or inadequacy of the initial design or construction of the same, or (II) code violations, including the payment of fines or citations in connection therewith; (d) The depreciation or amortization of the Center or any part thereof or any equipment or other property used in connection therewith; (e) the initial cost of the installation of the parking areas or facilities or the amortization or depreciation of such initial cost; (f) The cost of providing or performing improvements, work or repairs to or within (I) any portion of the premises of any other tenants or occupants in the Center, (II) any other building which is not part of the Common Areas or (III) any portion of the Center the use of which is not available to Tenant; (g) Any reserves for future expenditures or liabilities which would be incurred subsequent to the then current accounting year; (h) Any bad debt loss, rent loss or reserves for bad debt or rent loss; (i) Legal fees, audit fees, leasing commissions, advertising expenses and other costs incurred in connection with (I) the original development or original leasing of the Center, (II) the future re-leasing of the Center, (III) any advertising or promotion of the Center or any part thereof, and (IV) disputes with other tenants or third parties; (j) Costs of repairing or restoring any portion of the Center damaged or destroyed by any casualty or peril whether insured, uninsured or uninsurable; (k) Costs in connection with the cleanup or removal of hazardous materials; (l) The cost of compliance with the Americans with Disabilities Act of 1990, as amended, and all regulations promulgated pursuant thereto; (m) Net

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recoveries from insurance policies taken out by Landlord to the extent that the proceeds reimburse Landlord for expenses which have previously been included or which would otherwise be included in Maintenance Costs; (n) Contributions to Maintenance Costs by tenants or occupants whose space is permitted by provisions in the Lease to be excluded from the denominator of the Tenant’s Proportionate Share; (o) Costs associated with repairs or improvements the need for which arose prior to the date of this Lease; (p) Any otherwise permissible fees or costs to the extent in excess of prevailing and competitive rates; (q) Costs of a capital nature, including all capital improvements, alterations, repairs and/or replacements (for purposes of this Lease, “costs of a capital nature” shall mean the cost of any item or service the useful life of which exceeds 36 months); (r) Costs relating to the negligence of Landlord or its contractors, agents or employees or the payment of any claims or damages relating to the same; (s) Any insurance costs.

     (c) Landlord shall maintain accurate and detailed records of all Maintenance Costs for the common areas in accordance with generally accepted accounting principles. For purposes of this Lease, “Tenant’s Proportionate Share” shall be the product of the applicable cost or expense multiplied by a fraction, the numerator of which shall be the gross leasable area (expressed in square feet) of the Premises and the denominator of which shall be the gross leasable area (expressed in square feet) of all leasable space in the Center. Tenant’s Proportionate Share of that portion of the Center owned by Landlord is estimated to be fifteen percent (15%), during the first Lease Year.

     (d) The actual amount of Tenant’s Proportionate Share of all Maintenance Costs shall be computed by Landlord within one hundred eighty (180) days after the end of each accounting year (which Landlord may change from time to time). At this time Landlord shall furnish to Tenant a statement showing in reasonable detail the actual Maintenance Costs incurred during such accounting year and Tenant’s Proportionate Share thereof (prorated for any partial Lease year, with appropriate adjustments to reflect any change in the floor area of the premises or the gross leasable area of a building occurring during such accounting year). Any excess payments from Tenant shall be applied to the next installments of the Maintenance Costs hereunder, or refunded by Landlord. Any underpayments by Tenant shall be paid to Landlord within thirty (30) days after receipt of such reconciliation statement. Tenant’s estimated monthly Maintenance Cost hereunder may be adjusted by written notice from Landlord. Notwithstanding anything contained in this Section 15 to the contrary, Landlord and Tenant agree that the actual amount of Tenant’s Proportionate Share of Maintenance Costs, excluding costs for snow and ice removal, shall not increase by more than five percent (5%) in any lease year over the previous Lease Year, and that Tenant’s Proportionate Share of Maintenance Costs for the first lease year, excluding costs for snow and ice removal, shall not exceed One and 75/100 Dollars ($1.75) per square foot.

     (e) If Tenant, for any reason in the exercise of good business judgment, questions or disputes any statement of Maintenance Costs prepared by Landlord, then Tenant, at its own expense, may employ such accountants as Tenant may select to review Landlord’s books and records solely with respect to Maintenance Costs during the prior two Lease years and to determine the amount of Maintenance Costs for the period or periods covered by such statements. If the report of the accountants employed by Tenant shall show any overcharge paid by Tenant, then Tenant shall receive a credit from Landlord for such difference. Any underpayment shall be paid by Tenant. Tenant agrees that no contingency fee auditors shall be employed by Tenant for the purpose of conducting any such audit. In the event that Landlord questions or disputes the correctness of such report, the accountants employed by Tenant and the accountants employed by Landlord shall endeavor to reconcile the question(s) or dispute(s) within thirty (30) days after the notice from Tenant questioning or disputing the report of Landlord’s accountants. In the event that it is finally determined by the parties that Landlord has overstated Maintenance Costs for any Lease year by three percent (3%) or more, Landlord shall pay the reasonable cost of the audit. Furthermore, if Landlord’s Maintenance Costs cannot be verified due to the insufficiency or inadequacy of Landlord’s records, then Landlord shall pay the cost of the audit.

SECTION 16. EMINENT DOMAIN

     (a) In the event the entire premises or any part thereof shall be taken or condemned either permanently or temporarily for any public or quasi-public use or purpose by any

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competent authority in appropriation proceedings or by any right of eminent domain, the entire compensation or award therefore, including leasehold, reversion and fee, shall belong to the Landlord and Tenant hereby assigns to Landlord all of Tenant’s right, title and interest in and to such award.

     (b) In the event that only a portion of the Premises, not exceeding twenty percent (20%) of same, shall be so taken or condemned, and the portion of the Premises not taken can be repaired within ninety (90) days from the date of which possession is taken for the public use so as to be commercially fit for the operation of Tenant’s business, the Landlord at its own expense shall so repair the portion of the Premises not taken and there shall be an equitable abatement of rent for the remainder of the term and/or extended terms. The entire award paid on account thereof shall be paid to the Landlord. If the portion of the Premises not taken cannot be repaired within ninety (90) days from the date of which possession is taken so as to be commercially fit for the operation of Tenant’s business, then this Lease shall terminate and become null and void from the time possession of the portion taken is required for public use, and from that date on the parties hereto shall be released from all further obligations hereunder except as herein stated and Tenant shall have no claim for any compensation on account of its leasehold interest. No other taking, appropriation or condemnation shall cause this Lease to be terminated. Any such appropriation or condemnation proceedings shall not operate as or be deemed an eviction of Tenant or a breach of Landlord’s covenant of quiet enjoyment and Tenant shall have no claim for any compensation on account of its leasehold interest.

     (c) In the event that more than twenty percent (20%) of the Premises shall at any time be taken by public or quasi-public use or condemned under eminent domain, then at the option of the Landlord or Tenant upon the giving of thirty (30) days written notice (after such taking or condemnation), this Lease shall terminate and expire as of the date of such taking and any prepaid rental shall be prorated as of the effective date of such termination.

SECTION 17. TENANT’S TAXES

     Tenant further covenants and agrees to pay promptly when due all taxes assessed against Tenant’s fixtures, furnishings, equipment and stock-in trade placed in or on the Premises during the term of this Lease.

SECTION 18. RISK OF GOODS

     All personal property, goods, machinery, and merchandise in said Premises shall be at Tenant’s risk if damaged by water, fire, explosion, wind or accident of any kind, and Landlord shall have no responsibility therefore or liability for any of the foregoing and Tenant hereby releases Landlord from such liability.

SECTION 19. USE AND OCCUPANCY

     (a) Tenant agrees to initially open and operate a DSW for the retail sales of shoes and other footwear in the Premises, fully staffed and stocked and equivalent to other DSW stores operated by Tenant in the State of Virginia. The Premises during the term of this Lease shall be occupied for the operating and conducting therein of a retail shoe store or any other lawful retail purpose. Any use other than a retail shoe store shall be consistent with the then existing character of the Center, and shall not violate those exclusives and prohibited uses set forth on Exhibit “E” attached hereto and made a part hereof, which are the exclusives and prohibited uses in effect for the Center as of the date hereof, for so long as and to the extent said exclusives and prohibited uses are still in full force and effect, as well as exclusives and prohibited uses hereafter granted for tenants leasing more than 15,000 square feet of space elsewhere within the Center, for so long as and to the extent said exclusives are still in full force and effect.

     (b) For so long as Tenant is continuously and regularly operating its business in the Premises, Landlord will not hereafter lease any space within the Center or permit any space within the Center to be used by any person, persons, partnership or entity who devotes ten percent (10%) or more of its selling area to the sale of footwear (the “Exclusive Use”). The foregoing limitation shall not apply to typical shoe departments found in department stores, junior department stores, general merchandise and discount stores, and clothing retailers, such as Filene’s Basement, Marshalls, TJ Maxx and similar type stores so long as such tenants are

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operating their prototypical shoe department. Any portion of the Center which is sold by Landlord during the term shall contain a deed restriction incorporating the foregoing Exclusive Use.

     In the event an owner of an existing leasehold interest at the Center who has the right as of the date hereof to engage in the Exclusive Use (an “Excluded Leasehold”), and such owner desires to assign or sublet its leasehold interest in the Center, or any part thereof, and in connection therewith Landlord’s consent is required or requested, whether with respect to such assignment or subletting or any modification of such Excluded Leasehold in connection therewith, then Landlord agrees that it shall condition its consent thereto to such owner of the Excluded Leasehold agreeing to thereafter being subject to the Exclusive Use. In the event any such third party contests Landlord’s right to condition its consent to such Excluded Leasehold thereafter being subject to the Exclusive Use, Landlord agrees to use commercially reasonable efforts to satisfy the provisions of this paragraph. In the event Landlord fails to exercise commercially reasonable efforts to cause such Excluded Leasehold to be subject to the Exclusive Use, Tenant shall be entitled to a reduction in minimum rent in accordance with the provisions of the immediately following paragraph.

     Landlord acknowledges that in the event of a breach or an attempted or prospective breach of this Section 19(b), Tenant’s remedies at law would be inadequate. Therefore, in any such event, if such breach is not cured within thirty (30) days after written notice from Tenant to Landlord, Tenant shall be entitled, at its option and without limitation of any other remedy permitted by law or equity or by this Lease, (i) to elect to pay in lieu of Base Rent and percentage rent due under this Lease two percent (2%) of Tenant’s gross sales calculated according to Tenant’s standard procedures in accordance with generally accepted accounting principles, (ii) to cancel this Lease on thirty (30) days written notice to Landlord, and/or (iii) to full and adequate relief by temporary or permanent injunction. Notwithstanding the foregoing, the remedy of lease cancellation shall not be applicable if the violation of this Section 19(b) is due to the breach of another tenant’s lease and Landlord is, in Tenant’s good faith judgment, diligently pursuing appropriate legal proceedings to halt the violation and such violation is so halted within sixty (60) days of Landlord’s receipt of Tenant’s notice.

     (c) Tenant shall at all times conduct its operations on the Premises in a lawful manner and shall, at Tenant’s expense, comply with all laws, rules, orders, ordinances, directions, regulations, and requirements of all governmental authorities, now in force or which may hereafter be in force, which shall impose any duty upon Landlord or Tenant with respect to the business of Tenant and the use, occupancy or alteration of the Premises. Tenant shall comply with all requirements of the Americans with Disabilities Act, and shall be solely responsible for all alterations within the Premises in connection therewith. Tenant covenants and agrees that the Premises shall not be abandoned or left vacant and that only minor portions of the Premises shall be used for office or storage space in connection with Tenant’s business conducted in the Premises.

     Without being in default of this Lease, Tenant shall have the right to cease operating (go dark) at any time and for whatever reason after the first (1^st) lease year. Notwithstanding the foregoing, Tenant’s right to vacate (go dark), shall not release or excuse the Tenant from any obligations or liabilities, including the payment of minimum rent and additional rent and other charges, under this Lease without the express written consent of Landlord. In the event Tenant fails to (i) open and operate within ninety (90) days after delivery of the Premises or (ii) operate for one hundred twenty (120) or more consecutive days, Landlord shall have the right, effective upon thirty (30) days prior written notice to Tenant, to terminate the Lease as Landlord’s sole remedy, provided that if Tenant recommences operating fully stocked in substantially all of the premises within such thirty (30) days, Landlord’s termination shall be null and void. In the event Tenant fails to open and operate as provided above or shall cease operating as provided above, Landlord’s sole remedy on account thereof shall be limited to the right to elect to recapture the premises and terminate the Lease, whereupon there shall be no further liability of the parties hereunder. Such termination shall be effective upon written notice to Tenant any time prior to Tenant reopening for business in the Premises. Provided, however, in the event Landlord has not so elected to recapture, Tenant shall have right to notify Landlord of Tenant’s intention to reopen for business in the Premises within sixty (60) days, followed by Tenant’s actually reopening for business fully stocked in substantially all of the Premises within such sixty (60) day period, which notice and actual reopening shall toll Landlord’s right to recapture.

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     (d) Landlord and Tenant agree that no space in the Center, including the Premises, shall be used as a bowling alley, deep discount retailer, theater showing either film, television or the like or live entertainment, health club, bar, games/amusement room, indoor playground, adult bookstore, flea market, bingo parlor, bar, tavern, restaurant, cocktail lounge, adult book or adult video store (defined for the purposes hereof as a store devoting ten percent (10%) or more of its floor space to offering books and/or video materials for sale or for rent which are directed to or restricted to adult customers due to sexually explicit subject matter or for any other reason making it inappropriate for general use), adult theater or “strip-tease” establishment, automotive maintenance or automotive repair facility, warehouse, car wash, pawn shop, check cashing service, establishment selling second hand goods, flea market, entertainment or recreational facility (as defined below), training or educational facility (as defined below); the renting, leasing, selling or displaying of any boat, motor vehicle or trailer; industrial or manufacturing purposes; a carnival, circus or amusement park; a gas station, facility for the sale of paraphernalia for use with illicit drugs, funeral home, blood bank or mortuary, gambling establishment, banquet hall, auditorium or other place of public assembly, second-hand or surplus store, gun range; the sale of fireworks; a veterinary hospital or animal raising facility; the storage of goods not intended to be sold from the Center; a video rental store, karate center, central laundry or dry cleaning plant, supermarket or any facility which is illegal or dangerous, constitutes a nuisance, emits offensive odors, fumes, dust or vapors or loud noise or sounds or is inconsistent with community oriented shopping centers. For the purposes of this Section 19(d), the phrase “entertainment or recreational facility” shall include, without limitation, a movie or live theater or cinema, bowling alley, skating rink, gym, health spa or studio, dance hall or night club, billiard or pool hall, massage parlor, health club, game parlor or video arcade (which shall be defined as any store containing more than five (5) electronic games) or any other facility operated solely for entertainment purposes (such as a “laser tag” or “virtual reality” theme operation). For the purposes of this Section 19(d), the phrase “training or educational facility” shall include, without limitation, a beauty school, nail salon, barber college, reading room, place of instruction or any other operation catering primarily to students or trainees as opposed to customers. Notwithstanding the foregoing, Landlord may lease any premises in the Center for use as a restaurant or supermarket provided that no part of the Center within two hundred feet (200’) of the Premises shall be used for such uses. The total floor area of all restaurants and medical, dental, professional and business offices located within the Center shall not exceed ten percent (10%) of the gross leasable area of the Center. Any portion of the Center which is sold by Landlord during the term shall contain a deed restriction incorporating the foregoing restrictions.

     Landlord acknowledges that in the event of a breach or an attempted or prospective breach of this Section 19(d), Tenant’s remedies at law would be inadequate. Therefore, in any such event, if such breach is not cured within sixty (60) days after written notice from Tenant to Landlord, Tenant shall be entitled, at its option and without limitation of any other remedy permitted by law or equity or by this Lease, (i) to elect to pay in lieu of Base Rent and percentage rent due under this Lease two percent (2%) of Tenant’s gross sales calculated according to Tenant’s standard procedures in accordance with generally accepted accounting principles, and/or (ii) to full and adequate relief by temporary or permanent injunction. Notwithstanding the foregoing, the remedy of lease cancellation shall not be applicable if the violation of this Section 19(d) is due to the breach of another tenant’s lease and Landlord is, in Tenant’s good faith judgment, diligently pursuing appropriate legal proceedings to halt the violation and such violation is so halted within one hundred twenty (120) days of Landlord’s receipt of Tenant’s notice.

     (e) Landlord and Tenant agree that (a) no auction, fire or going-out-of-business sales shall be conducted in the Center except a going-out-of-business sale conducted during the last thirty (30) days of an existing retail operation, (b) no exterior identification signs attached to any building in the Center shall be (i) flashing, moving or audible signs or (ii) signs employing exposed neon tubes, exposed ballast boxes or exposed transformers, and (c) no sidewalk sales shall be allowed in the Center.

SECTION 20. NUISANCES

     Tenant shall not perform any acts or carry on any practice which may injure the Premises or be a nuisance or menace to other tenants in the Center.

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SECTION 21. WASTE AND REFUSE REMOVAL

     Tenant covenants that it will use, maintain and occupy said Premises in a careful, safe, lawful and proper manner and will not commit waste therein. Landlord or its agent shall have access at all reasonable times to the Premises for purposes of inspecting and examining the condition and maintenance of the Premises. Tenant agrees to remove all refuse from the Premises in a timely, clean and sanitary manner. Tenant shall provide a refuse collection container at the rear of the Premises to accommodate Tenant’s refuse and Tenant shall routinely clean up around trash containers. Tenant shall contract with a licensed and insured refuse collection contractor to timely remove refuse therefrom and the location of the container shall be approved by Landlord.

SECTION 22. DAMAGE AND DESTRUCTION OF PREMISES

     (a) Landlord shall at all times during the term of this Lease carry property insurance on the building containing the Premises, including the “Structural Portions” (defined in Section 24(a) below) and common utility lines up to the point they serve individual tenant’s premises. Landlord shall be under no obligation to maintain insurance on any improvements installed by or for the benefit of Tenant’s use of the premises or otherwise owned by Tenant. Landlord may elect to self-insure its obligations hereunder and/or use whatever deductibles as Landlord deems appropriate, in its sole discretion.

     (b) If the Premises shall be damaged, destroyed, or rendered untenantable, in whole or in part, by or as the result or consequence of fire or other casualty during the term hereof, Landlord shall repair and restore the same to a good tenantable condition with reasonable dispatch. During such period of repair, the rent herein provided for in this Lease shall abate (i) entirely in case all of the Premises are untenantable; and (ii) proportionately if only a portion of the Premises is untenantable and Tenant is able to economically conduct its business from the undamaged portion of the Premises. The abatement shall be based upon a fraction, the numerator of which shall be the square footage of the damaged and unusable area of the Premises and the denominator shall be the total square footage of the Premises. Said abatement shall cease at such time as the Premises shall be restored to a tenantable condition.

     (c) In the event the Premises, because of such damage or destruction, are not repaired and restored to a tenantable condition with reasonable dispatch within one hundred fifty (150) days from the date of receipt of insurance proceeds for such damage or destruction, Tenant or Landlord may, at their option, terminate this Lease within sixty (60) days following such one hundred fifty (150) day period but prior to the repair and restoration of same by giving prior written notice to the other party and thereupon Landlord and Tenant shall be released from all future liability and obligations under this Lease.

     (d) If one-third (1/3) or more of the ground floor area of the Premises are damaged or destroyed during the last two (2) years of the original or any extended term of this Lease, Landlord shall have the right to terminate this Lease by written notice to Tenant within sixty (60) days following such damage or destruction, unless Tenant shall, within thirty (30) days following receipt of such notice, offer to extend the term of this Lease for an additional period of five (5) years from the date such damage or destruction is repaired and restored. If Tenant makes said offer to extend, Landlord and Tenant shall determine the terms and conditions of said extension within thirty (30) days thereafter or Tenant’s offer shall not be deemed to prevent Landlord from canceling this Lease. If such terms and conditions have been mutually agreed to by the parties, then Landlord shall accept Tenant’s offer and shall repair and restore the Premises with reasonable dispatch thereafter.

     (e) If Landlord is required or elects to repair and restore the Premises as herein provided, Tenant shall repair or replace its stock in trade, trade fixtures, furniture, furnishings and equipment and other improvements including floor coverings, and if Tenant has closed, Tenant shall promptly reopen for business. Anything contained in this Section 22 to the contrary notwithstanding, Landlord’s restoration and repair obligations under Section 22 shall in no event include restoration or repair of Tenant’s Work or improvements.

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SECTION 23. LANDLORD REPAIRS

     (a) Landlord shall keep in good order, condition, and repair, maintain and replace, as necessary, the following: (i) structural portions of the Premises; (ii) downspouts; (iii) gutters; (iv) the roof of the Building of which the Premises forms a part; and (v) any utility and other systems or lines serving the Premises but located outside of the Premises, except (as to all items) for damage caused by any negligent act or omission of Tenant or its customers, employees, agents, invitees, licensees or contractors, which shall be repaired or replaced as necessary, at the sole cost and expense of Tenant. “Structural Portions” shall mean only the following: (vi) foundations; (vii) exterior walls except for interior faces); (viii) concrete slabs; (ix) the beams and columns bearing the main load of the roof; and (x) the floors (but not floor coverings).

     (b) Notwithstanding the provisions of Section 23(a) above, Landlord shall not be obligated to repair the following: (i) the exterior or interior of any doors, windows, plate glass, or showcases surrounding the Premises or the store front or (ii) damage to Tenant’s improvements or personal property caused by any casualty, burglary, break-in, vandalism, acts of terrorism, war or act of G-d. Landlord shall, in any event, have ten (10) days after notice from Tenant stating the need for repairs to complete same, or commence and proceed with due diligence to complete same. Landlord shall be obligated to replace all HVAC components as and when necessary so long as Tenant has fulfilled its obligations under Section 24(a)(ii) below. Except as specifically set forth herein, Tenant expressly hereby waives the provisions of any law permitting repairs by a tenant at Landlord’s expense.

     (c) The provisions of this Section 23 shall not apply in the case of damage or destruction by fire or other casualty or a taking under the power of eminent domain in which events the obligations of Landlord shall be controlled by Section 22 and Section 16 respectively.

     (d) Landlord shall assign to Tenant all warranties covering all matters required by the terms hereof to be repaired and maintained by Landlord.

     (e) If Landlord fails to make any of the repairs required to be made under this Lease within thirty (30) days after written notice from Tenant, Tenant, in addition to any other rights it may have hereunder or at law or in equity, shall have the right to make said repairs on behalf of Landlord and to bill Landlord for the reasonable cost thereof. Landlord shall have thirty (30) days to reimburse Tenant. In the event of an emergency or if any such repairs are immediately necessary for the proper use and enjoyment of the Premises, no prior thirty (30) days notice shall be required, Tenant, after diligent effort to first notify Landlord, forthwith make said repairs on behalf of Landlord and bill Landlord for the reasonable cost thereof. Tenant has not received reimbursement for any repairs permitted to be made under this Section 23(e) within such thirty (30) day period, Tenant shall have the right to deduct the cost of repairs from Rent otherwise due Landlord.

SECTION 24. TENANT’S REPAIRS

     (a) Tenant shall keep and maintain, at Tenant’s expense, all and every other part of the Premises in good order, condition and repair, including, by way of example but not limitation: (i) all leasehold improvements; (ii) all HVAC unit(s), equipment and systems (including all components thereof) serving the Premises; (iii) interior plumbing and sewage facilities; (iv) all interior lighting; (v) electric signs; (vi) all interior walls; (vii) floor coverings; (viii) ceilings; (ix) appliances and equipment; (x) all doors, exterior entrances, windows and window moldings; (xi) plate glass; (xii) signs and showcases surrounding and within the Premises; (xiii) the store front; (xiv) sprinkler systems including supervisory alarm service in accordance with National Fire Protection Association standards and current local and state fire protection standards to ensure property operation.

     (b) Sprinkler systems, if any, located in Tenant’s area shall be maintained in accordance with National Fire Protection Association standards to ensure proper operation. Sprinkler control valves (interior and exterior) located in Tenant’s area shall be monitored by supervisory alarm service. In the event local or state codes do not require alarm systems, Tenant shall provide alarm service on all sprinkler systems to detect water flow and tampering with exterior and interior main control valves of the sprinkler system servicing Tenant’s premises.

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Moreover, it shall be Tenant’s responsibility to contact Chuck Seall, VP Property Management at 614-449-6890, in the event the sprinkler system in the Premises is ever shut off for any reason, and advise same of any damage occasioned or caused by the actions of Tenant, its agents, invitees, or employees, and/or as a result of Tenant’s repair obligations hereunder. In the event fifty percent (50%) or more of the total number of sprinkler heads require replacement at any one time as part of ordinary maintenance, but excluding repairs or replacements that arise from (x) repairs, installations alterations, or improvements made by or for Tenant or anyone claiming under Tenant, or (y) the fault or misuse of Tenant or anyone claiming under Tenant, such cost shall be fifty percent (50%) borne by Landlord and fifty percent (50%) borne by Tenant. Tenant, at Tenant’s sole cost and expense, shall replace all sprinkler heads due to repairs, installations, alterations, or improvements made by or for Tenant or anyone claiming under Tenant, the fault or misuse of Tenant or anyone claiming under Tenant, painting or environmental exposure from Tenant’s operations. All other costs of maintaining the sprinkler system in the Premises shall be paid by Tenant.

     (c) If Landlord deems any repair which Tenant is required to make hereunder to be necessary, Landlord may demand that Tenant make such repair immediately. If Tenant refuses or neglects to make such repair and to complete the same with reasonable dispatch, Landlord may make such repair and Tenant shall, on demand, immediately pay to Landlord the cost of said repair, together with annual interest at the Interest Rate. Landlord shall not be liable to Tenant for any loss or damage that may accrue to Tenant’s stock or business by reason of such work or its results.

     (d) Neither Tenant nor any of its contractors are permitted access to or permitted to perform alterations of any kind to the roof of the Premises.

     (e) Tenant shall pay promptly when due the entire cost of work in the Premises undertaken by Tenant under this Lease (including, but not limited to, Tenant’s Work and/or alterations permitted under Section 7 of this Lease) so that the Premises and the Center shall at all times be free of liens for labor and materials arising from such work; to procure all necessary permits before undertaking any such work; to do all of such work in a good and workmanlike manner, employing materials of good quality; to perform such work only with contractors previously reasonably approved of in writing by Landlord; to comply with all governmental requirements; and save Landlord and its agents, officers, employees, contractors and invitees harmless and indemnified from all liability, injury, loss, cost, damage and/or expense (including reasonable attorneys’ fees and expenses) in respect of any injury to, or death of, any person, and/or damage to, or loss or destruction of, any property occasioned by or growing out of any such work.

SECTION 25. COVENANT OF TITLE AND PEACEFUL POSSESSION

     Subject to the provisions of Section 11 hereof, Landlord shall, on or before the date on which Tenant is permitted to install its merchandise and fixtures in the Premises, have good and marketable title to the Premises in fee simple and the right to make this Lease for the term aforesaid. At such time, Landlord shall put Tenant into complete and exclusive possession of the Premises, and if Tenant shall pay the rental and perform all the covenants and provisions of this Lease to be performed by the Tenant, Tenant shall, during the term hereby demised, freely, peaceably, and quietly enjoy and occupy the full possession of the Premises and the common facilities of the Center, subject, however, to the terms and conditions of this Lease.

SECTION 26. TENANT’S AND LANDLORD’S INSURANCE; INDEMNITY

     (a) Tenant’s Commercial General Liability Insurance. Commencing as of the Commencement Date, and thereafter throughout the term of this Lease, Tenant shall, at Tenant’s sole cost and expense, provide and maintain or cause to be provided and maintained a commercial general liability policy (including coverage for product and contractual liability), naming Tenant as an insured (and naming Landlord as an additional insured, said additional insured’s coverage under Tenant’s commercial general liability policy to be primary), protecting Tenant, the business operated by Tenant, and any additional insureds (including Landlord) against claims for bodily injury (including death) and property damage occurring within the Premises. Such insurance shall afford protection to the limits of not less than One Million Dollars ($1,000,000.00) per occurrence and Five Hundred Thousand Dollars ($500,000.00) with

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respect to property damage for fire legal liability. Tenant may use commercially reasonable deductibles Tenant customarily carries in the conduct of its business; however, Tenant shall be responsible for all such deductibles or self-insured retention level. All liability policies shall be written on an occurrence form.

     (b) Worker’s Compensation. Commencing as of the Commencement Date, and thereafter throughout the term of this Lease, Tenant shall, at Tenant’s sole cost and expense, provide and maintain or cause to be provided and maintained workers’ compensation insurance (meeting the requirements of the state workers’ compensation laws) and employer liability insurance covering all of Tenant’s employees at the Premises. Tenant shall also use good faith efforts to ensure all contractors, sub-contractors, vendors, leased employees, and temporary employees are properly insured for workers’ compensation.

     (c) Tenant’s Umbrella. Commencing as of the Commencement Date, and thereafter throughout the term of this Lease, Tenant shall, at Tenant’s sole cost and expense, provide and maintain or cause to be provided and maintained an umbrella liability insurance policy with a Ten Million Dollar ($10,000,000.00) policy limits, which umbrella policy (or policies) shall list the commercial general liability, product liability, contractual liability and employer liability policies required hereunder, and any other liability policy or policies carried by, or for the benefit of, Tenant as underlying policies. Said umbrella liability insurance policy shall also name Landlord as an additional insured (said additional insured’s coverage under Tenant’s umbrella liability policy to be primary). All liability policies shall be written on an occurrence form.

     (d) Tenant’s Property Insurance. Commencing as of the Commencement Date, and thereafter throughout the term of this Lease, Tenant shall, at Tenant’s sole cost and expense, provide and maintain or cause to be provided and maintained a property insurance policy insuring Tenant’s contents, fixtures, equipment and personal property located within the Premises and/or owned by Tenant for all the hazards and perils normally covered by the Causes of Loss-Special Form. Said property insurance policy shall include endorsements for coverage against: (i) earthquake and flood (including, but not limited to, mud slide, flood hazard or fault area(s), as designated on any map prepared or issued for such purpose by any governmental authority); and (ii) increased costs of construction and demolition due to law and ordinance. The foregoing property coverage shall be provided in amounts sufficient to provide one hundred percent (100%) of the full replacement cost of Tenant’s contents, fixtures, equipment and personal property located within the Premises and/or owned by Tenant. If for any reason the Causes of Loss-Special Form is not customarily used in the insurance industry, then the property insurance policy then in effect shall at least provide coverage for the following perils: fire, lightning, windstorm and hail, explosion, smoke, aircraft and vehicles, riot and civil commotion, vandalism and malicious mischief, sprinkler leakage, sinkhole and collapse, volcanic action, earthquake or earth movement, and flood, and increased costs of construction and demolition due to law, ordinance and inflation. The property insurance policy required to be maintained by Tenant under this Section 26(d) shall: (y) not provide coverage for Tenant’s Improvements (defined in Section 49 below), which Tenant’s Improvements shall be insured by Landlord as required under Section 26(a);

     (e) Landlord’s Property Insurance. Commencing as of the Commencement Date, and thereafter throughout the term of this Lease, Landlord shall, at Landlord’s sole cost and expense, provide and maintain or cause to be provided and maintained a property insurance policy insuring all buildings (and building additions) and other improvements in the Center, Tenant’s store building, and Tenant Improvements (but excluding those items insured by Tenant as required under Section 26(d)) for all the hazards and perils normally covered by the Causes of Loss-Special Form. Said property insurance policy shall include endorsements for coverage against: (i) earthquake and flood (including, but not limited to, mud slide, flood hazard or fault area(s), as designated on any map prepared or issued for such purpose by any governmental authority); and (ii) increased costs of construction and demolition due to law and ordinance. The foregoing property coverage shall be provided in amounts sufficient to provide one hundred percent (100%) of the full replacement cost of all buildings (and building additions) and other improvements in the Center, Tenant’s store building, and Tenant Improvements (but excluding those items insured by Tenant as required under Section 26(d)). If for any reason the Causes of Loss-Special Form is not customarily used in the insurance industry, then the property insurance policy then in effect shall at least provide coverage for the following perils: fire, lightning, windstorm and hail, explosion, smoke, aircraft and vehicles, riot and civil commotion, vandalism

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and malicious mischief, sprinkler leakage, sinkhole and collapse, volcanic action, earthquake or earth movement, and flood, and increased costs of construction and demolition due to law, ordinance and inflation. Neither Tenant nor any of its affiliates or subtenants shall be liable to Landlord for any loss or damage (including loss of income), regardless of cause, resulting from fire, flood, act of G-d or other casualty.

     (f) Landlord’s Commercial General Liability Insurance. Commencing as of the Commencement Date, and thereafter throughout the term of this Lease, Landlord shall, at Landlord’s sole cost and expense, provide and maintain or cause to be provided and maintained a commercial general liability policy (including coverage for contractual liability), naming Landlord as an insured (and naming Tenant as an additional insured, said additional insured’s coverage under Landlord’s commercial general liability policy to be primary), protecting Landlord, the business operated by Landlord, and any additional insureds (including Tenant) against claims for bodily injury (including death) and property damage occurring upon, in or about the Center (other than the Premises and those areas insured by other tenants at the Center), including Common Areas. Such insurance shall afford protection to the limits of not less than One Million Dollars ($1,000,000.00) per occurrence and Five Hundred Thousand Dollars ($500,000.00) with respect to property damage for fire legal liability. All liability policies shall be written on an occurrence form. Landlord may use commercially reasonable deductibles Landlord customarily carries in the conduct of its business; however, Landlord shall be responsible for all such deductibles or self-insured retention levels.

     (g) Landlord’s Umbrella. Commencing as of the Commencement Date, and thereafter throughout the term of this Lease, Landlord shall, at Landlord’s sole cost and expense, provide and maintain or cause to be provided and maintained an umbrella liability insurance policy with a Ten Million Dollar ($10,000,000.00) minimum annual aggregate, which umbrella policy (or policies) shall list Landlord’s commercial general liability and contractual liability policies required hereunder, and any other liability policy or policies carried by, or for the benefit of, Landlord as underlying policies. Said umbrella liability policy shall also name Tenant as an additional insured (said additional insured’s coverage under Landlord’s umbrella liability policy to be primary). All liability policies shall be written on an occurrence form.

     (h) All insurance provided for in this Section 26 shall be effected under standard form policies issued by insurers of recognized responsibility authorized to do business in the state in which the Premises are located; provided, however, that Landlord or Tenant may self-insure any of the amounts herein stated pursuant to a bona fide self-insurance retention program so long as the amounts so self-insured by such party do not exceed ten percent (10%) of such party’s net worth as computed in accordance with generally accepted accounting principles consistently applied by such party.

     (i) Prior to the Commencement Date, and thereafter during the term hereof within fifteen (15) days after request therefor by either party, and within fifteen (15) days after each policy renewal date, Tenant and Landlord shall furnish the other party with certificates of insurance evidencing all insurance coverage required herein. All such certificates shall: (i) evidence the continuous existence during the term hereof of the insurance required hereunder; (ii) include attachment of an additional insured endorsement; (iii) name any and all non-standard exclusions or limitations; and (iv) contain a provision that the insurance carrier shall not cancel or modify the insurance coverage without giving at least ten (10) days prior written notice thereof to both Landlord and Tenant at their last known address as provided for herein. Current certificates of insurance shall be delivered to both Landlord and Tenant in time sufficient to assure that both Landlord and Tenant shall always possess certificates of insurance evidencing current insurance coverage. All insurance carriers shall be licensed to do business in the state in which the Premises is located and shall have a Best’s Key Rating Guide rating of A^- VIII.

     (j) Landlord and Tenant shall neither do nor suffer anything to be done whereby any of the insurance required by the provisions of this Section 26 shall or may be invalidated in whole or in part. Landlord shall not permit or suffer to be done in any part of the Center any activities which shall increase the rate of any insurance to be maintained by Tenant over that rate normal and customary for Tenant’s type of business or which shall increase the rate on any insurance maintained by Landlord for which Tenant is required to reimburse Landlord pursuant to Section 28 hereof. Should such occur, Landlord shall pay, without reimbursement from Tenant, all costs and expenses of such insurance over the base rate. Tenant shall not permit or

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suffer to be done in any part of the Premises any activities which shall increase the rate of any insurance to be maintained by Landlord over the base rate. Should such occur, Tenant shall pay all costs and expenses of such insurance over the base rate.

     (k) Notwithstanding anything to the contrary hereinabove contained, Tenant or Landlord, may, at its option, include any of the insurance coverage hereinabove set forth in general or blanket policies of insurance. All insurance required hereunder shall be consistent with sound insurance practices.

     (l) Tenant and Landlord shall cooperate with each other in connection with the collection of any insurance monies that may be due in the event of loss and Landlord shall execute and deliver to Tenant such proofs of loss and other instruments which may be required for the purpose of obtaining the recovery of any such insurance monies.

     (m) Tenant Indemnity. Subject to Section 34 of this Lease, Tenant shall indemnify Landlord, Landlord’s agents, employees, officers or directors, against all damages, claims and liabilities arising from any alleged products liability or from any accident or injury whatsoever caused to any person, firm or corporation during the demised term in the Premises, unless such claim arises from a breach or default in the performance by Landlord of any covenant or agreement on its part to be performed under this Lease or, to the extent not required to be insured hereunder, the negligence of Landlord. The indemnification herein provided shall include all reasonable costs, counsel fees, expenses and liabilities incurred in connection with any such claim or any action or proceeding brought thereon.

     (n) Landlord Indemnity. Subject to Section 34 of this Lease, Landlord shall indemnify Tenant, Tenant’s officers, directors, employees and agents against all damages, claims and liabilities arising from any accident or injury whatsoever caused to any person, firm or corporation during the demised term in the Center (excluding therefrom the Premises), unless such claim arises from a breach or default in the performance by Tenant of any covenant or agreement on Tenant’s part to perform under this Lease or, to the extent not required to be insured hereunder, the negligence of Tenant. The indemnification herein provided shall include all reasonable costs, counsel fees, expenses and liabilities incurred in connection with any such claim or any action or proceeding brought thereon.

SECTION 27. REAL ESTATE TAXES

     (a) Tenant shall pay Tenant’s Proportionate Share (as defined in Section 15(c) above) of any “Real Estate Taxes” (defined in Section 27(b) below) imposed upon the Center that become due and payable during each lease year included within the period commencing with the Commencement Date and ending with the expiration of the term of this Lease. Tenant shall initially pay to landlord as additional rental, simultaneously with the payment of Base Rent called for under Section 4(a), the estimated monthly amount of Tenant’s Proportionate Share of Real Estate Taxes as set forth in Section 4(c) of One Dollar ($1.00) per square foot based on the Rentable Square Feet in effect under Section 5(a) above. Within one hundred twenty (120) days after the end of each accounting year (which Landlord may change from time to time), Landlord shall provide Tenant with an annual reconciliation of Real Estate Taxes and a statement of the actual amount of Tenant’s Proportionate Share thereof. Any excess payments from Tenant shall be applied to the next installments of Real Estate Taxes hereunder, or refunded by Landlord. Any underpayments by Tenant shall be paid to Landlord within thirty (30) days after receipt of such reconciliation statement. Tenant’s estimated monthly installment of Real Estate Taxes payable hereunder may be adjusted by written notice from Landlord.

     (b) For the purpose of this Lease, the term “Real Estate Taxes” shall include any special and general assessments, water and sewer rents and other governmental impositions imposed upon or against the Center of every kind and nature whatsoever, extraordinary as well as ordinary, foreseen and unforeseen and each and every installment thereof, which shall or may during the lease term be levied, assessed or imposed upon or against such Center and of all expenses, including reasonable attorneys’ fees, administrative hearing and court costs incurred in contesting or negotiating the amount, assessment or rate of any such real estate taxes, minus any refund received by Landlord.

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     (c) Notwithstanding any provision of this Lease to the contrary, Tenant shall not be obligated to pay for any assessment for special improvements heretofore installed or in the process of installation in connection with the initial development of the Center, and Landlord hereby agrees to pay for the same.

     (d) The real estate taxes for any lease year shall be the real estate taxes that become due and payable during such lease year. If any lease year shall be greater than or less than twelve (12) months, or if the real estate tax year shall be changed, an appropriate adjustment shall be made. If there shall be more than one taxing authority, the real estate taxes for any period shall be the sum of the real estate taxes for said period attributable to each taxing authority. If, upon the assessment day for real estate taxes for any tax year fully or partly included within the term of this Lease, a portion of such assessment shall be attributable to buildings in the process of construction, a fair and reasonable adjustment shall be made to carry out the intent of this Section 27.

     (e) Upon request, Landlord shall submit to Tenant true copies of the real estate tax bill for each tax year or portion of a tax year included within the term of this Lease and shall bill Tenant for the amount to be paid by Tenant hereunder. Said bill shall be accompanied by a computation of the amount payable by Tenant and such amount shall be paid by Tenant within thirty (30) days after receipt of said bill.

     (f) Should the State of Virginia or any political subdivision thereof or any governmental authority having jurisdiction thereof, impose a tax and/or assessment (other than an income or franchise tax) upon or against the rentals payable hereunder, in lieu of or in addition to assessments levied or assessed against the Premises, or Center, then such tax and/or assessment shall be deemed to constitute a tax on real estate for the purpose of this Section 27.

SECTION 28. TENANT’S INSURANCE CONTRIBUTION

     Tenant shall pay as additional rent, Tenant’s Proportionate Share (as defined in Section 15(c) above) of the premiums for the insurance maintained by Landlord on all buildings and improvements, as well as liability insurance, for the Center, including the Common Areas, as set forth above in Section 28, for each Lease Year during the term of this Lease. The premiums for the first and last Lease Years shall be prorated. Tenant shall pay Tenant’s Proportionate Share of such premiums annually upon demand for such payment by Landlord. Tenant’s Proportionate Share thereof shall be paid by Tenant within thirty (30) days after Landlord’s demand therefore. Tenant shall initially pay to Landlord as additional rental, simultaneously with the payment of Base Rent called for under Section 4(a), the estimated monthly amount of Tenant’s Proportionate Share of such insurance premiums as set forth in Section 4(c), of Twenty-Five Cents ($0.25) per square foot based on the Rentable Square Feet in effect under Section 5(a) above. Within one hundred twenty (120) days after the end of each accounting year (which Landlord may change from time to time), Landlord shall provide Tenant with a reconciliation of the premiums for the insurance maintained by Landlord hereunder and a statement of the actual amount of Tenant’s Proportionate Share thereof. Any excess payments from Tenant shall be applied to the next installments of insurance premiums payable by Tenant hereunder, or refunded by Landlord. Any underpayments by Tenant shall be paid to Landlord within thirty (30) days after receipt of such reconciliation statement. Tenant’s monthly installment of insurance premiums payable hereunder may be adjusted by written notice from Landlord.

SECTION 29. FIXTURES

     Provided that Tenant shall repair any damage caused by removal of its property and provided that the Tenant is not in default under this Lease, Tenant shall have the right to remove from the Premises all of its signs, shelving, electrical, and other fixtures and equipment, window reflectors and backgrounds and any and all other trade fixtures which it has installed in and upon the Premises.

SECTION 30. SURRENDER

     The Tenant covenants and agrees to deliver up and surrender to the Landlord the physical possession of the Premises upon the expiration of this Lease or its termination as herein provided in as good condition and repair as the same shall be at the commencement of the initial term, loss

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by fire and/or ordinary wear and tear excepted, and to deliver all of the keys to Landlord or Landlord’s agents.

SECTION 31. HOLDING OVER

     There shall be no privilege of renewal hereunder (except as specifically set forth in this Lease) and any holding over after the expiration by the Tenant shall be from day to day on the same terms and conditions (with the exception of rental which shall be prorated on a daily basis at one hundred twenty-five percent (125%) the daily rental rate of the most recent expired term) at Landlord’s option; and no acceptance of rent by or act or statement whatsoever on the part of the Landlord or his duly authorized agent in the absence of a written contract signed by Landlord shall be construed as an extension of the term or as a consent for any further occupancy.

SECTION 32. NOTICE

     Any consent, waiver, notice, demand, request or response thereto or other instrument required or permitted to be given under this Lease shall be given by overnight courier or by certified United States mail, return receipt requested, postage prepaid: (a) if to Landlord, at the address set forth in Section 1; and (b) if to Tenant, at the address set forth in Section 1 with duplicate copies to (i) Sr. Vice President — Real Estate, 4150 East Fifth Avenue, Columbus, Ohio 43219 and (ii) General Counsel, 4150 East Fifth Avenue, Columbus, Ohio 43219. Either party may change its address for notices by notice in the manner set forth above, given at least thirty (30) days in advance. All such consents, waivers, notices, demands, requests or other instruments shall be deemed given upon receipt thereof or upon the refusal of the addressee to receive the same.

SECTION 33. DEFAULT

     (a) Elements of Default: The occurrence of any one or more of the following events shall constitute a default of this Lease by Tenant:

1. Tenant fails to pay any monthly installment of rent within ten (10) days after the same shall be due and payable, except for the first two (2) times in any consecutive twelve (12) month period, in which event Tenant shall have five (5) days after receipt of written notice of such failure to pay before such failure shall constitute a default;

2. Tenant fails to perform or observe any term, condition, covenant or obligation required to be performed or observed by it under this Lease for a period of twenty (20) days after notice thereof from Landlord; provided, however, that if the term, condition, covenant or obligation to be performed by Tenant is of such nature that the same cannot reasonably be cured within twenty (20) days and if Tenant commences such performance or cure within said twenty (20) day period and thereafter diligently undertakes to complete the same, then such failure shall not be a default hereunder if it is cured within a reasonable time following Landlord’s notice, but in no event later than forty-five (45) days after Landlord’s notice.

3. A trustee or receiver is appointed to take possession of substantially all of Tenant’s assets in, on or about the Premises or of Tenant’s interest in this Lease (and Tenant or any guarantor of Tenant’s obligations under this Lease does not regain possession within sixty (60) days after such appointment); Tenant makes an assignment for the benefit of creditors; or substantially all of Tenant’s assets in, on or about the Premises or Tenant’s interest in this Lease are attached or levied upon under execution (and Tenant does not discharge the same within sixty (60) days thereafter).

4. A petition in bankruptcy, insolvency, or for reorganization or arrangement is filed by or against Tenant or any guarantor of Tenant’s obligations under this Lease pursuant to any Federal or state statute, and, with respect to any such petition filed against it, Tenant or such guarantor fails to secure a stay or discharge thereof within sixty (60) days after the filing of the same.

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     (b) Landlord’s Remedies: Upon the occurrence of any event of default, Landlord shall have the following rights and remedies, any one or more of which may be exercised without further notice to or demand upon Tenant:

1. Landlord may re-enter the Premises and cure any default of Tenant, in which event Tenant shall reimburse Landlord for any reasonable out-of-pocket cost and expenses which Landlord may incur to cure such default; and Landlord shall not be liable to Tenant for any loss or damage which Tenant may sustain by reason of Landlord’s action.

2. Landlord may terminate this Lease or Tenant’s right to possession under this Lease as of the date of such default, without terminating Tenant’s obligation to pay rent due hereunder, in which event (A): neither Tenant nor any person claiming under or through Tenant shall thereafter be entitled to possession of the Premises, and Tenant shall immediately thereafter surrender the Premises to Landlord; (B) Landlord may re-enter the Premises and dispose Tenant or any other occupants of the Premises by force, summary proceedings, ejectment or otherwise, and may remove their effects, without prejudice to any other remedy which Landlord may have for possession or arrearages in rent; and (C) notwithstanding a termination of this Lease, Landlord shall use good faith efforts to re-let all or any part of the Premises for at least the balance of the term of this Lease for commercially reasonable rent, whereupon Tenant shall be obligated to pay to Landlord as liquidated damages the difference between the rent provided for herein and that provided for in any lease covering a subsequent re-letting of the Premises, such deficiency to be computed and paid monthly at the times that Rent is payable hereunder, together with all of Landlord’s reasonable costs and expenses for preparing the Premises for re-letting, including all repairs which are Tenant’s obligations hereunder, reasonable broker’s and attorney’s fees, and all loss or damage which Landlord may sustain by reason of such termination, re-entry and re-letting, it being expressly understood and agreed that the liabilities and remedies specified herein shall survive the termination of this Lease. Notwithstanding a termination of this Lease by Landlord, Tenant shall remain liable for payment of all rentals and other charges and costs imposed on Tenant herein, in the amounts, at the times and upon the conditions as herein provided. Landlord shall credit against such liability of the Tenant all amounts received by Landlord from such re-letting after first reimbursing itself for all reasonable costs incurred in curing Tenant’s defaults and re-entering, preparing and refinishing the Premises for re-letting, and re-letting the Premises.

3. Upon termination of this Lease pursuant to Section 33(b)2, Landlord may recover possession of the Premises under and by virtue of the provisions of the laws of the State of Virginia, or by such other proceedings, including reentry and possession, as may be applicable.

4. If the Tenant shall not remove all of Tenant’s property from said Premises as provided in this Lease, Landlord, at its option, may remove any or all of said property in any manner that Landlord shall choose and store same without liability for loss thereof, and Tenant will pay the Landlord, on demand, any and all reasonable expenses incurred in such removal and storage of said property for any length of time during which the same shall be in possession of Landlord or in storage, or Landlord may, upon thirty (30) days prior notice to Tenant, sell any or all of said property in such manner and for such price as the Landlord may reasonably deem best and apply the proceeds of such sale upon any amounts due under this Lease from the Tenant to the Landlord, including the reasonable expenses of removal and sale.

5. Any damage or loss of rent sustained by Landlord may be recovered by Landlord, at Landlord’s option, at the time of the reletting, or in separate actions, from time to time, as said damage shall have been made more easily ascertainable by successive relettings, or at Landlord’s option in a single proceeding deferred until the expiration of the term of this Lease (in which event Tenant hereby agrees that the cause of action shall not be deemed to have accrued until the date of

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expiration of said term) or in a single proceeding prior to either the time of reletting or the expiration of the term of this Lease.

6. In the event of a breach by Tenant of any of the covenants or provisions hereof, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity as if reentry, summary proceedings, and other remedies were not provided for herein. Mention in this Lease of any particular remedy shall not preclude Landlord from any other remedy, in law or in equity. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Tenant being evicted or dispossessed for any cause, or in the event of Landlord obtaining possession of the Premises by reason of the violation by Tenant of any of the covenants and conditions of this Lease or other use.

7. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws, in the event of eviction or dispossession of Tenant by Landlord under any provision of this Lease. No receipt of monies by Landlord from or for the account of Tenant or from anyone in possession or occupancy of the Premises after the termination of this Lease or after the giving of any notice shall reinstate, continue or extend the term of this Lease or affect any notice given to the Tenant prior to the receipt of such money, it being agreed that after the service of notice or the commencement of a suit, or after final judgment for possession of said Premises, the Landlord may receive and collect any rent or other amounts due Landlord and such payment shall not waive or affect said notice, said suit or said judgment.

     (c) Additional Remedies and Waivers: The rights and remedies of Landlord set forth herein shall be in addition to any other right and remedy now or hereinafter provided by law and/or equity and all such rights and remedies shall be cumulative and shall not be deemed inconsistent with each other, and any two or more or all of said rights and remedies may be exercised at the same time or at different times and from time to time without waiver thereof of any right or remedy provided or reserved to Landlord. No action or inaction by Landlord shall constitute a waiver of a default and no waiver of default shall be effective unless it is in writing, signed by the Landlord.

     (d) Default by Landlord. Any failure by Landlord to observe or perform any provision, covenant or condition of this Lease to be observed or performed by Landlord, if such failure continues for thirty (30) days after written notice thereof from Tenant to Landlord, shall constitute a default by Landlord under this Lease, provided, however, that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, Landlord shall not be deemed to be in default if it shall commence such cure within such thirty (30) day period and thereafter rectify and cure such default with due diligence.

     (e) Interest on Past Due Obligations: All monetary amounts required to be paid by Tenant or Landlord hereunder which are not paid on or before the due date thereof shall, from and after such due date, bear interest at the Interest Rate, and shall be due and payable by such party without notice or demand.

     (f) Tenant’s Remedies. In the event of default by the Landlord with respect to the Premises, Tenant shall have the option to cure said default. Landlord shall reimburse Tenant for the reasonable costs incurred by Tenant in curing such default within thirty (30) days after invoice thereof by Tenant, together with reasonable evidence supporting such invoiced amount. Tenant shall also have any and all rights available under the laws of the state in which the Premises are situated; provided, however, that any right of offset available to Tenant shall be subject to the provisions of Section 35 below.

SECTION 34. WAIVER OF SUBROGATION

     Landlord and Tenant, and all parties claiming under each of them, mutually release and discharge each other from all claims and liabilities arising from or caused by any casualty or hazard covered or required hereunder to be covered in whole or in part by insurance coverage required to be maintained by the terms of this Lease on the Premises or in connection with the

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Center or activities conducted with the Premises, and waive any right of subrogation which might otherwise exist in or accrue to any person on account thereof. All policies of insurance required to be maintained by the parties hereunder shall contain waiver of subrogation provisions so long as the same are available.

SECTION 35. LIABILITY OF LANDLORD; EXCULPATION

     (a) Except with respect to any damages resulting from the gross negligence of Landlord, its agents, or employees, Landlord shall not be liable to Tenant, its agents, employees, or customers for any damages, losses, compensation, accidents, or claims whatsoever. The foregoing notwithstanding, it is expressly understood and agreed that nothing in this Lease contained shall be construed as creating any liability whatsoever against Landlord personally, and in particular without limiting the generality of the foregoing, there shall be no personal liability to pay any indebtedness accruing hereunder or to perform any covenant, either express or implied, herein contained, or to keep, preserve or sequester any property of Landlord and that all personal liability of Landlord to the extent permitted by law, of every sort, if any, is hereby expressly waived by Tenant, and by every person now or hereafter claiming any right or security hereunder; and that so far as the parties hereto are concerned, the owner of any indebtedness or liability accruing hereunder shall look solely to the Premises and the Center for the payment thereof.

     (b) If the Tenant obtains a money judgment against Landlord, any of its officers, directors, shareholders, partners, members or their successors or assigns under any provisions of or with respect to this Lease or on account of any matter, condition or circumstance arising out of the relationship of the parties under this Lease, Tenant’s occupancy of the building or Landlord’s ownership of the Center, Tenant shall be entitled to have execution upon any such final, unappealable judgment only upon Landlord’s fee simple or leasehold estate in the Center (whichever is applicable) and not out of any other assets of Landlord, or any of its officers, directors, shareholders, members or partners, or their successor or assigns; and Landlord shall be entitled to have any such judgment so qualified as to constitute a lien only on said fee simple or leasehold estate.

     Notwithstanding the above, Tenant shall have the right to offset any final, unappealable judgment against twenty five percent (25%) of all minimum rent and all percentage rental (but no other additional rent components) if not paid to Tenant by Landlord within thirty (30) days thereafter.

     (c) It is expressly agreed that nothing in this Lease shall be construed as creating any personal liability of any kind against the assets of any of the officers, directors, members, partners or shareholders of Tenant, or their successors and assigns.

SECTION 36. RIGHTS CUMULATIVE

     Unless expressly provided to the contrary in this Lease, each and every one of the rights, remedies and benefits provided by this Lease shall be cumulative and shall not be exclusive of any other of such rights, remedies and benefits or of any other rights, remedies and benefits allowed by law.

SECTION 37. MITIGATION OF DAMAGES

     Notwithstanding any of the terms and provisions herein contained to the contrary, Landlord and Tenant shall each have the duty and obligation to mitigate, in every reasonable manner, any and all damages that may or shall be caused or suffered by virtue of defaults under or violation of any of the terms and provisions of this Lease agreement committed by the other.

SECTION 38. SIGNS

     (a) Landlord shall, at its sole cost and expense, construct, erect and maintain at the location shown on the Site Plan a pylon sign upon which Tenant’s advertising panel shall be installed. Tenant’s prototypical advertising panel for such pylon sign, which is hereby approved by Landlord, is as shown on Exhibit “F” attached hereto and made a part hereof. Thereafter, throughout the term of this Lease, Tenant shall have continuous representation on (a) such pylon

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sign and any replacement pylon sign consistent with Exhibit “F” and (b) any new pylon signs erected at the Center, and Tenant shall have no worse representation on any such new pylon sign(s) than any other tenant of the Center leasing the same or less square feet of leasable space as Tenant.

     (b) Tenant shall have the right to install its standard signs and awnings on the exterior of the Leased Premises provided that the same are in compliance with local code. Landlord agrees to provide an adequate building facia for Tenant’s signs. Tenant shall also have the right to place signs or banners in the windows of the Premises provided the same have been professionally prepared.

     (c) Tenant shall have the right to alter its exterior and pylon signs with Landlord’s consent, which consent shall not be unreasonably withheld; provided, however, Tenant shall have no obligation to obtain Landlord’s consent to any change in Tenant’s signage if such signage is consistent with Tenant’s then prototypical signage.

SECTION 39. ENTIRE AGREEMENT

     This Lease shall constitute the entire agreement of the parties hereto; all prior agreements between the parties, whether written or oral, are merged herein and shall be of no force and effect. This Lease cannot be changed, modified, or discharged orally but only by an agreement in writing signed by the party against whom enforcement of the change, modification or discharge is sought.

SECTION 40. TENANT’S PROPERTY

     All equipment, inventory, trade fixtures and other property owned by the Tenant and located in the Premises shall remain the personal property of the Tenant and shall be exempt from the claims of the Landlord or any mortgagee or lienholder of the Landlord without regard to the means by which they are installed or attached specifically not including, however, the Tenant Improvements (defined in Section 49(a) below) which throughout the term and upon the expiration of this Lease shall be and remain the property of Landlord. The Landlord expressly waives any statutory or common law landlord’s lien and any and all rights granted under any present or future laws to levy or distrain for rent (whether in arrears or in advance) against the aforesaid property of the Tenant on the Premises and further agrees to execute any reasonable instruments evidencing such waiver, at any time or times hereafter upon the Tenant’s request including the “Landlord’s Waiver” described in Section 56(c) hereof. The Tenant shall have the right, at any time or from time to time, to remove such trade fixtures or equipment. If such removal damages any part of the Premises, the Tenant shall repair such damages. Tenant is expressly authorized to finance, pledge, and encumber its own trade fixtures, equipment, and inventory for purposes of financing such trade fixtures, equipment and inventory.

SECTION 41. BINDING UPON SUCCESSORS

     The covenants, conditions, and agreements made and entered into by the parties hereto shall be binding upon and inure to the benefit of their respective heirs, representatives, successor and assigns.

SECTION 42. HAZARDOUS SUBSTANCES

     (a) During the term of this Lease, Tenant shall not suffer, allow, permit or cause the generation, accumulation, storage, possession, release or threat of release of any hazardous substance or toxic material, as those terms are used in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, and any regulations promulgated thereunder, or any other present or future federal, state or local laws, ordinances, rules, and regulations. Tenant shall indemnify and hold Landlord harmless from any and all liabilities, penalties, demands, actions, costs and expenses (including without limitation reasonable attorney fees), remediation and response costs incurred or suffered by Landlord directly or indirectly arising due to the breach of Tenant’s obligations set forth in this Section. Such indemnification shall survive expiration or earlier termination of this Lease. At the expiration or sooner termination hereof, Tenant shall return the Premises to Landlord in

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substantially the same condition as existed on the date of commencement hereof free of any hazardous substances in, on or from the Premises.

     (b) Landlord hereby represents and warrants that, except as set forth in that certain Phase I Environmental Site Assessment dated February 2006, prepared by Craig A. Edgerley of Mostardi Platt Environmental: (i) it has not used, generated, discharged, released or stored any hazardous substances on, in or under the Center and has received no notice and has no knowledge of the presence in, on or under the Center of any such hazardous substances; (ii) to Landlord’s knowledge there have never been any underground storage tanks at the Center, whether owned by the Landlord or its predecessors in interest; (iii) to Landlord’s knowledge there have never been accumulated tires, spent batteries, mining spoil, debris or other solid waste (except for rubbish and containers for normal scheduled disposal in compliance with all applicable laws) in, on or under the Center; (iv) to Landlord’s knowledge it has not spilled, discharged or leaked petroleum products other than de minimis quantities in connection with the operation of motor vehicles on the Center; (v) to Landlord’s knowledge there has been no graining, filling or modification of wetlands (as defined by federal, state or local law, regulation or ordinance) at the Center; and (vi) to Landlord’s knowledge there is no asbestos or asbestos-containing material in the Premises. The representations and warranties set forth in this subparagraph shall apply to any contiguous or adjacent property owed by the Landlord. Landlord hereby indemnifies Tenant for any and all loss, cost, damage or expense to Tenant resulting from any misrepresentation or breach of the foregoing representations and warranties.

     (c) If any such hazardous substances are discovered at the Center (unless introduced by the Tenant, its agents or employees) or if any asbestos or asbestos containing material is discovered in the Premises (unless introduced by the Tenant, its agents or employees), and removal, encapsulation or other remediation is required by applicable laws, the Landlord immediately and with all due diligence and at no expense to the Tenant shall take all measures necessary to comply with all applicable laws and to remove such hazardous substances or asbestos from the Center and/or encapsulate or remediate such hazardous substances or asbestos, which removal and/or encapsulation or remediation shall be in compliance with all environmental laws and regulations, and the Landlord shall repair and restore the Center at its expense. From the date such encapsulation, remediation and restoration is complete, the rent due hereunder shall be reduced by the same percentage as the percentage of the Premises which, in the Tenant’s reasonable judgment, cannot be safely, economically or practically used for the operation of the Tenant’s business. Anything herein to the contrary notwithstanding, if in the Tenant’s reasonable judgment, such removal, encapsulation, remediation and restoration cannot be completed within one hundred eighty (180) days or the same is not actually completed by Landlord within such one hundred eighty (180) day period following the date such hazardous substances or asbestos are discovered and such condition materially adversely affects Tenant’s ability to conduct normal business operations in the premises, then the Tenant may terminate this Lease by written notice to the Landlord within thirty (30) days after such 180 day period, which notice shall be effective on Landlord’s receipt thereof. Landlord shall comply with OSHA 29 CFR 1910.1001 (j) to notify tenants, including Tenant, of asbestos related activities in the Premises and the Center including, but not limited to, selection of the certified/licensed asbestos abatement contractor, scope of the abatement work, and final clearance testing procedures and results.

SECTION 43. TRANSFER OF INTEREST

     If Landlord should sell or otherwise transfer its interest in the Premises, upon an undertaking by the purchaser or transferee to be responsible for all the covenants and undertakings of Landlord accruing subsequent to the date of such sale or transfer, Tenant agrees that Landlord shall thereafter have no liability to Tenant under this Lease or any modifications or amendments thereof, or extensions thereof, except for such liabilities which might have accrued prior to the date of such sale or transfer of its interest by Landlord.

SECTION 44. ACCESS TO PREMISES

     Landlord and its representatives shall have free access to the Premises at all reasonable times for the purpose of: (a) examining the same or to make any alterations or repairs to the Premises that Landlord may deem necessary for its safety or preservation; (b) exhibiting the Premises for sale or mortgage financing; (c) during the last three (3) months of the term of this

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Lease, for the purpose of exhibiting the Premises and putting up the usual notice “for rent” which notice shall not be removed, obliterated or hidden by Tenant, provided, however, that any such action by Landlord shall cause as little inconvenience as reasonably practicable and such action shall not be deemed an eviction or disturbance of Tenant nor shall Tenant be allowed any abatement of rent, or damages for an injury or inconvenience occasioned thereby.

SECTION 45. HEADINGS

     The headings are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope or intent of this Lease.

SECTION 46. NON-WAIVER

     No payment by Tenant or receipt by Landlord or its agents of a lesser amount than the rent in this Lease stipulated shall be deemed to be other than on account of the stipulated rent nor shall an endorsement or statement on any check or any letter accompanying any check or payment of rent be deemed an accord and satisfaction and Landlord or its agents may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent or pursue any other remedy in this Lease provided.

SECTION 47. SHORT FORM LEASE

     This Lease shall not be recorded, but a short form lease, which describes the property herein demised, gives the term of this Lease and refers to this Lease, shall be executed by the parties hereto, upon demand of either party and such short form lease may be recorded by Landlord or Tenant at any time either deems it appropriate to do so. The cost and recording of such short form lease shall belong to the requesting party.

SECTION 48. ESTOPPEL CERTIFICATE

     Each party agrees that at any time and from time to time on ten (10) days prior written request by the other, it will execute, acknowledge and deliver to the requesting party a statement in writing stating that this Lease is unmodified and in full force and effect (or, if there have been modifications, stating the modifications, and that the Lease as so modified is in full force and effect, and the dates to which the rent and other charges hereunder have been paid, and such other information as may reasonably re requested, it being intended that any such statements delivered pursuant to this Section may be relied upon by any current or prospective purchaser of or any prospective holder of a mortgage or a deed of trust upon or any interest in the fee or any leasehold or by the mortgagee, beneficiary or grantee of any security or interest, or any assignee of any thereof or under any mortgage, deed of trust or conveyance for security purposes now or hereafter done or made with respect to the fee of or any leasehold interest in the Premises

SECTION 49. TENANT’S REIMBURSEMENT

     (a) Landlord shall pay Tenant One Hundred Eighty Thousand Dollars ($180,000.00) (the “Tenant Reimbursement”), as payment for all costs incurred on behalf of Tenant for the purchase, erection, and installation of Tenant Improvements on or within the Premises. “Tenant Improvements” shall consist of the work described in the attached Exhibit “G”. The Tenant Reimbursement shall be paid by Landlord to Tenant within ten (10) days of the later of (i) Tenant opening for business in the Premises and (ii) Tenant providing to Landlord a lien waiver from Tenant’s general contractor. In the event Landlord does not timely pay the Tenant Reimbursement to Tenant, (a) Landlord shall pay to Tenant interest on such unpaid amounts the Interest Rate and (b) Tenant shall have the right to deduct any and all such amounts owed Tenant against payments of Rent thereafter due Landlord until such time as Tenant has been credited the full amount of the Tenant Reimbursement plus applicable interest.

     (b) Notwithstanding anything to the contrary contained in this Lease, the Tenant Improvements shall, at all times during the term of this Lease and upon the expiration or earlier termination of this Lease, be the property of Landlord. Tenant shall not acquire any interest, equitable or otherwise, in any Tenant Improvement.

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SECTION 50. TENANT’S TERMINATION RIGHT

     In the event (i) that Tenant’s gross sales (as defined in Section 5 of this Lease) shall be less than Four Million Seven Hundred Fifty-one Thousand Eight Hundred Dollars ($4,751,800.00) in either of the eighth or ninth Lease Years of the initial term hereof, and (ii) Tenant was open and operating for business for the Permitted Use during the Center’s standard business days and hours during the eighth and ninth Lease Years (unless Tenant was not open and operating on account of casualty or condemnation), Tenant shall have the right, at Tenant’s sole election, provided that Tenant is not then in default of the terms of this Lease beyond any applicable notice and cure periods, on or before the date (the “Last Termination Notice Date”) which is thirty (30) days after the end of the ninth Lease Year, to send to Landlord a notice terminating this Lease (“Termination Notice”) as of the last day of the tenth Lease Year (the “Tenant’s Termination Date”). In the event that Tenant shall so terminate this Lease in accordance with the provisions of this Section 50, then the term of this Lease shall terminate and expire on Tenant’s Termination Date with the same force and effect as though said date was the scheduled expiration date of the term under this Lease. Notwithstanding the giving of such Termination Notice and Tenant’s exercise of its termination right under this Section 50, Tenant shall perform and observe all of Tenant’s obligations under this Lease through and including the Tenant’s Termination Date and Tenant shall pay to Landlord, simultaneous with the delivery of the Termination Notice, the sum of One Hundred Thousand Dollars ($100,000.00). In the event Tenant exercises the termination right provided for in this Section 50, Landlord shall have the right, upon ten (10) days prior written notice, at Tenant’s corporate headquarters, to examine Tenant’s books and records relating to gross receipts at the Premises, provided such right shall expire sixty (60) days after Tenant notifies Landlord of Tenant’s exercise of Tenant’s election to terminate the Lease pursuant to the provisions of this Section 50.

SECTION 51. NO BROKER

     Landlord and Tenant each represent to the other that they have not entered into any agreement or incurred any obligation in connection with this transaction which might result in the obligation to pay a brokerage commission to any broker. Each party shall indemnify and hold the other party harmless from and against any claim or demand by any broker or other person for bringing about this Lease who claims to have dealt with such indemnifying party, including all expenses incurred in defending any such claim or demand (including reasonable attorney’s fees).

SECTION 52. UNAVOIDABLE DELAYS

     In the event either party hereto (the “Delayed Party”) shall be delayed or hindered in or prevented from the performance of any act required under this Lease by reason of strikes, lockouts, labor troubles, inability to procure materials, failure of power, the unforeseen application of restrictive governmental laws or regulations, riots, insurrection, war, acts of terrorism or other reason of a like nature not the fault of the Delayed Party in performing work or doing acts required under the terms of this Lease, then performance of such act shall be excused for the period of the delay, and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay, provided that the Delayed Party notified the other party within fifteen (15) days of the Delayed Party being informed of the occurrence of the event causing such delay. The provisions of this Section 52 shall not operate to excuse either party from the payment of any rental or other monetary sums due under the terms of this Lease.

SECTION 53. TIMELY EXECUTION OF LEASE

     Landlord and Tenant agree that this Lease, and the parties’ obligations hereunder, shall automatically be null and void and this Lease shall terminate automatically without further action of the parties if both parties do not execute this Lease and both parties have not received an original thereof within sixty (60) days after the date of execution hereof by the first party to execute this Lease.

SECTION 54. ACCORD AND SATISFACTION

     No payment by Tenant or receipt by Landlord of a lesser amount than the entire rent and all other additional rents and charges hereunder shall be deemed to be other than payment on

33

account of the earliest stipulated rent and other additional rents and charges hereunder, nor shall any endorsement or statement on any check or any letter accompanying any check or payment for rent or other additional rent and charges be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent and other additional rents and charges or pursue any other right or remedy available to the Landlord.

SECTION 55. WAIVER OF JURY TRIAL

     Landlord and Tenant do hereby knowingly, voluntarily and intentionally waive the right to a trial by jury of any and all issues either now or hereinafter provided by law in any action or proceeding between the parties hereto, or their successors, arising directly or indirectly out of or in any way connected with this Lease or any of its provisions, Tenant’s use or occupancy of said premises and/or any claim for personal injury or property damage including, without limitation, any action to rescind or cancel this Lease, and any claim or defense asserting that this Lease was fraudulently induced or is otherwise void or voidable. It is intended that said waiver shall apply to any and all defenses, rights and/or counterclaims in any action or proceeding at law or in equity. This waiver is a material inducement for Landlord and Tenant to enter into this Lease.

SECTION 56. LEASEHOLD FINANCING

     (a) Landlord acknowledges and agrees that Tenant may from time to time during the term, without the consent of Landlord, mortgage or otherwise finance and encumber, whether by leasehold deed of trust or mortgage, collateral assignment of this Lease, lease/sublease-back, and/or assignment/leaseback, any and/or all of its leasehold estate hereunder, and property and rights in and to the Leased Premises granted to it under this Lease, as security for the payment of an indebtedness (any and all of which are herein referred to as a “Leasehold Mortgage” and the holder thereof is herein referred to as “Leasehold Mortgagee”). Any such Leasehold Mortgage shall be a lien only upon Tenant’s leasehold estate hereunder and Tenant’s interests in this Lease and shall not encumber Landlord’s fee simple title to the Center or the Leased Premises. Pursuant to any such Leasehold Mortgage, the Leasehold Mortgagee or another person or entity (a “Successor-Tenant”) may acquire title to Tenant’s interest in the leasehold estate in the Leased Premises in any lawful way, including but not limited to, through foreclosure, assignment in lieu of foreclosure, or otherwise. In such event, the Successor-Tenant shall succeed to the rights of Tenant under this Lease, including the right to possession of the Leased Premises, in which event Landlord shall recognize the Successor-Tenant as the tenant under this Lease, the same as if such Successor-Tenant were the original tenant hereunder.

     (b) Tenant shall notify Landlord (and any Fee Mortgagee, as hereinafter defined in Section 56(d) below), in the manner hereinafter provided for the giving of notice, of the execution of such Leasehold Mortgage and the name and place for service of notice upon Leasehold Mortgagee. Upon such notification of Landlord that Tenant has entered into a Leasehold Mortgage, Landlord hereby agrees for the benefit of such Leasehold Mortgagee, and upon written request by Tenant, to execute and deliver to Tenant and Leasehold Mortgagee a “Landlord’s Agreement” whereby Landlord agrees to recognize the interest of Leasehold Mortgagee and any Successor-Tenant hereunder, on commercially reasonable terms and conditions acceptable to Leasehold Mortgagee.

     (c) Landlord does hereby waive any statutory or other lien of the Landlord in Tenant’s present and after-acquired assets, including among other things, Tenant’s inventory and equipment. To evidence such waiver for the benefit of a lender of Tenant, Landlord agrees execute and deliver to Tenant and any such lender a commercially reasonable “Landlord’s Waiver” whereby Landlord agrees to waive any lien on Tenant’s assets including its inventory and equipment.

     (d) In the event that, at any time prior to the execution of this Lease and the recordation of a memorandum of lease in accordance with Section 47 hereof, Landlord has mortgaged or otherwise encumbered the fee simple title to the Premises, Landlord shall deliver to Tenant a commercially reasonable SNDA (as defined in Section 11) containing terms substantially similar to the terms of the document so entitled attached hereto and made a part hereof as Exhibit “I”, duly executed by the holder of any such mortgage or encumbrance (the “Fee Mortgagee”). Landlord agrees that Tenant’s obligations hereunder shall be contingent upon

34

delivery by Landlord to Tenant of an SNDA executed by the Fee Mortgagee on or before the Commencement Date, as more fully set forth in Section 11.

(SIGNATURES ON FOLLOWING PAGE)

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EX-10.3

Exhibit 10.3

OFFICE SPACE LEASE — NET

LANDLORD:	4300 Venture 34910 LLC
	1798 Frebis Avenue
	Columbus, Ohio 43206-0410
TENANT:	DSW Inc,
	4150 East Fifth Avenue
	Columbus, Ohio 43219
LEASED PREMISES:	147,771 square feet in
	Building 4
	4030 East Fifth Avenue
	Columbus International Aircenter
	Columbus, Ohio 43219

OFFICE SPACE LEASE — NET

TABLE OF CONTENTS

				Page
I.	GRANT, TERM, DEFINITIONS AND BASIC LEASE PROVISIONS				2
		1.1	Grant		2
		1.2	Delivery		2
		1.3	Term		2
		1.4	Tenant’s Pro Rata Share		3
		1.5	Agent		3
		1.6	Basic Lease Provisions		3
II.	POSSESSION				4
		2.1	Possession		4
		2.2	Tenant’s Work		4
III.	PURPOSE				5
		3.1	Purpose		5
		3.2	Use of Real Estate		5
IV.	RENT				6
		4.1	Annual Rent		6
		4.2	Interest on Late Payments		6
		4.3	Additional Rent		6
V.	IMPOSITIONS				7
		5.1	Payment by Tenant		7
		5.2	Alternative Taxes		8
		5.3	Other Taxes		8
VI.	RISK ALLOCATION AND INSURANCE				8
		6.1	Allocation of Risks		8
		6.2	Tenant’s Insurance		9
		6.3	Landlord’s Insurance		10
		6.4	Form of Insurance		11
		6.5	Insurance Premiums		11
		6.6	Fire Protection		11
		6.7	Waiver of Subrogation		12
		6.8	Disclaimer of Liability		12
VII.	DAMAGE OR DESTRUCTION				12
		7.1	Landlord’s Obligation to Rebuild		12
		7.2	Tenant’s Rights After Casualty		13
VIII.	CONDEMNATION				13
		8.1	Taking of Whole		13
		8.2	Partial Taking		13
		8.3	Temporary Taking		14
		8.4	Payment to Tenant		14
IX.	MAINTENANCE AND ALTERATIONS				14
		9.1	Landlord’s Maintenance		14
		9.2	Tenant’s Maintenance		14

(i)

				Page
		9.3	Alterations		15
X.	ASSIGNMENT AND SUBLETTING				16
		10.1	Consent Not Required		16
		10.2	Other Transfer of Lease		17
XI.	LIENS AND ENCUMBRANCES				17
		11.1	Encumbering Title		17
		11.2	Liens and Right to Contest		17
XII.	UTILITIES				17
		12.1	Utilities		17
XIII.	INDEMNITY				18
		13.1	Indemnity		18
XIV.	RIGHTS RESERVED TO LANDLORD				18
		14.1	Rights Reserved to Landlord		18
		14.2	Maintenance Costs		19
XV.	QUIET ENJOYMENT				20
		15.1	Quiet Enjoyment		20
XVI.	SUBORDINATION OR SUPERIORITY				21
		16.1	Subordination or Superiority		21
XVII.	SURRENDER				21
		17.1	Surrender		21
		17.2	Removal of Tenant’s Property		22
		17.3	Holding Over		22
XVIII.	ENVIRONMENTAL CONDITIONS				22
		18.1	“Environmental Condition” Defined		22
		18.2	Compliance by Tenant		23
		18.3	Environmental Indemnity		23
		18.4	Testing and Remedial Work		24
XIX.	REMEDIES				24
		19.1	Defaults		24
		19.2	Remedies		25
		19.3	Remedies Cumulative		26
		19.4	No Waiver		26
		19.5	Intentionally Deleted		26
		19.6	Delinquent Rent		26
XX.	SECURITY DEPOSIT [INTENTIONALLY DELETED]				27
XXI.	MISCELLANEOUS				27
		21.1	Intentionally Deleted		27
		21.2	Estoppel Certificates		27
		21.3	Landlord’s and Tenant’s Right to Cure/Landlord Default		27
		21.4	Amendments Must Be in Writing		28
		21.5	Notices		28

(ii)

		Page
21.6	Short Form Lease		28
21.7	Time of Essence		28
21.8	Relationship of Parties		28
21.9	Captions		28
21.10	Severability		28
21.11	Law Applicable		29
21.12	Covenants Binding on Successors		29
21.13	Brokerage		29
21.14	Landlord Means Owner		29
21.15	Lender’s Requirements		29
21.16	Signs		30
21.17	Parking Areas		30
21.18	Force Majeure		30
21.19	Landlord’s and Tenant’s Expenses		31
21.20	Execution of Lease by Landlord		31
21.21	Intentionally Deleted		31
21.22	Exculpatory Clause		31
21.23	Airport Access		32
21.24	Intentionally Deleted		32
21.25	Consent		32

Exhibit A — Legal Description
Exhibit B — Site Plan
Exhibit C — Footprint of Premises
Exhibit D — Subordination, Non-Disturbance and Attornment Agreement
Exhibit E — Tenant Parking Area Plan
Exhibit F — Notice of Commencement
Exhibit G — Memorandum of Lease

(iii)

OFFICE SPACE LEASE — NET

     THIS LEASE is made this 30^th day of November, 2006 (the “Effective Date”), by and between 4300 Venture 34910 LLC, a Delaware limited liability company (hereinafter sometimes referred to as “Landlord”), with offices at 1798 Frebis Avenue, Columbus, Ohio 43206-0410, and DSW Inc., an Ohio corporation (hereinafter sometimes referred to as “Tenant”), with offices at 4150 East Fifth Avenue, Columbus, Ohio 43219, who hereby mutually covenant and agree as follows:

     I. GRANT, TERM, DEFINITIONS AND BASIC LEASE PROVISIONS

     1.1 Grant.

     Landlord, for and in consideration of the rents herein reserved and of the covenants and agreements herein contained on the part of Tenant to be performed, hereby leases to Tenant, and Tenant hereby lets from Landlord, premises consisting of approximately 147,771 square feet of area in Building No. 4 of the Columbus International Aircenter, which premises are commonly known as 4030 East Fifth Avenue, Columbus, Ohio 43219. The Columbus International Aircenter comprises approximately 2,819,647 square feet of leasable space on 171 acres, more or less, of real property in Franklin County, Ohio, which real property is legally described on Exhibit A, attached hereto and made a part hereof (hereinafter sometimes referred to as the “Real Estate”). The premises are outlined on the site plan attached hereto as Exhibit B and made a part hereof (the “Site Plan”). Said premises, together with all improvements now located or to be located on said premises during the term of this Lease, shall collectively be referred to herein as the “Leased Premises”. A footprint of the Leased Premises is delineated on Exhibit C, attached hereto and made a part hereof.

     Tenant shall also have the non-exclusive right to use all common areas of the Real Estate, as the same may be modified, altered and reduced from time to time during the term hereof. Said common areas include all taxiways and airplane parking and servicing areas designated from time to time by Landlord. Tenant acknowledges that Landlord may promulgate reasonable rules and regulations in connection with the use of all such common areas, and Tenant’s use thereof shall not unreasonably interfere with the use of said common areas by Landlord or other tenants, occupants or users of the Real Estate, as well as their respective customers, employees, agents, licensees, contractors, subcontractors and invitees (hereinafter collectively the “Permitted Parties”), so long as Landlord has provided a copy of same to Tenant, nor shall Tenant’s use interfere with the environmental remediation activities of the United States of America, as hereinafter set forth. Tenant acknowledges that this Lease is subject to the terms and conditions of the Declaration of Restrictions and Easements, dated October 17, 1997, and recorded as Instrument No. 199710170122036, Recorder’s Office, Franklin County, Ohio and Tenant agrees to comply with all provisions thereof.

     1.2 Delivery.

     Landlord agrees to deliver the Leased Premises in its existing condition to Tenant on the Effective Date (the “ Delivery Date”). In the event that the Leased Premises are not delivered to Tenant on or before the Delivery Date, the rent due hereunder shall be adjusted so that, after the Rent Commencement Date, the Tenant shall receive a credit against rent thereafter due Landlord equal to one (1) day of rent for each day after the Delivery Date until delivery of the Leased Premises is made to Tenant consistent with the terms of this Lease.

     1.3 Term.

     The term of this Lease shall commence on the Delivery Date (hereinafter sometimes referred to as “Commencement Date”) and shall end on December 31, 2021, unless sooner terminated as herein set forth. The term “Lease Year” shall be defined as each successive period of twelve (12) consecutive calendar months, with the first Lease Year commencing on January 1, 2007.

2

     Landlord hereby grants to Tenant the option to extend the Term of this Lease for three (3) consecutive option terms of five (5) years each, referred to herein as “First Option Term”, “Second Option Term”, and “Third Option Term”. The First Option Term shall commence at the end of the original Term of this Lease, the Second Option Term shall commence at the end of the First Option Term, and the Third Option Term shall commence at the end of the Second Option Term. So long as Tenant is then in possession of the Leased Premises and is not in default hereunder, Tenant may elect to exercise each option by giving the Landlord written notice at least one (1) year prior to the expiration of the original Term or the then existing Option Term. Said Option Terms shall be upon the same terms, covenants and agreements as are herein set forth, including, without limitation, increases in annual rent as set forth in Section 1.5(b)(ii) below.

     1.4 Tenant’s Pro Rata Share.

     As used in this Lease, “Tenant’s Pro Rata Share” shall initially be Five and Twenty-Four Hundredths percent (5.24%). Tenant’s Pro Rata Share shall be based upon a fraction, the numerator of which is the number of leasable square feet in the Leased Premises, and the denominator of which is the number of leasable square feet of building space on the Real Estate, which is approximately Two Million Eight Hundred Nineteen Thousand Six Hundred Forty-seven (2,819,647) square feet as of the date hereof, as the same shall be adjusted, from time to time, during the Term hereof to reflect the then existing number of leasable square feet on the Real Estate.

     1.5 Agent.

     As used in this Lease, the term “Agent” shall mean the agent of Landlord. Until otherwise designated by notice in writing from Landlord, Agent shall be Schottenstein Management Company, 1800 Moler Road, Columbus, Ohio 43207, Attn: President, Real Estate. Tenant may rely upon any consent or approval given in writing by Agent or upon notice from Agent or from the attorneys for Agent or Landlord.

     1.6 Basic Lease Provisions.

     These basic lease provisions are intended for convenience only, and any conflict between these provisions and the body of the Lease shall be resolved in favor of the body of the Lease.

(a)

Purpose (See Section 3.1): The Leased Premises shall initially be used as executive offices, general office and ancillary uses thereto for Tenant, including but not limited to food service, exercise facilities and/or other employee amenities and for a facility or facilities for the retail sale of goods to Tenant’s employees but not to the general public. The Leased Premises may thereafter be used for any general office use, and for no other purpose whatsoever without the prior written consent of Landlord, which consent shall not be unreasonably withheld.

(b)

Annual Rent (See Section 4.1): Annual Rent shall commence upon the earlier of: (i) Tenant’s opening for business in the Leased Premises; or (ii) March 1, 2007 (“Rent Commencement Date”). Annual Rent shall be as follows:

Period:	Annual Rent:		Monthly Installments
Years 1-5	$	1,477,710.00	$	123,142.50
Years 6-10	$	1,625,481.00	$	135,456.75
Years 11-15	$	1,773,252.00	$	147,771.00
Years 16-20 (1st option)	$	1,625,481.00	$	135,456.75
Years 21-25 (2nd option)	$	1,773,252.00	$	147,771.00
Years 26-30 (3rd option)	$	1,921,023.00	$	160,085.25

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(c)	Payee (See Section 4.1): 4300 Venture 34910 LLC.
(d)	Payee’s Address (See Sections 4.1 and 4.2): 1798 Frebis Avenue, Columbus, Ohio 43206-0410.
(e)	Form of Insurance (See Article VI): The insurance specified in Section 6.1 shall comply with the provisions of Section 6.2. Initial Tenant’s Monthly Pro Rata Share of Insurance Premiums (See Sections 4.3 and 6.5): $1,847.14 ($0.15/s.f.).
(f)	Initial Monitoring Service Charge (See Sections 4.3 and 6.6): to be paid by Landlord.
(g)	Water and Sewerage Charge (See Sections 4.3 and 12.1): to be paid by Landlord.
(h)	Initial Tenant’s Pro Rata Share of Monthly Impositions (See Sections 4.3 and 5.1): $3,078.56 ($0.25/s.f.).
(i)	Initial Tenant’s Pro Rata Share of Monthly Maintenance Costs (See Sections 4.3, 9.1 and 14.2): $4,925.70 ($0.40/s.f.).
(j)	Tenant’s Address (for notices) (See Section 21.5): Sr. Vice President — Real Estate, 4150 East Fifth Avenue, Columbus, Ohio 43219, with a copy to General Counsel, 4150 East Fifth Avenue, Columbus, Ohio 43219.
(k)	Landlord’s Address (for notices) (See Sections 21.5 regarding notices and 16.1(c) regarding notices to Landlord’s lender): 1800 Moler Road, Columbus, Ohio 43207, Attn: Law Department, and to 1798 Frebis Avenue, Columbus, Ohio 43206.
(l)	Broker(s) (See Section 21.13): None.
(m)	Guarantor’s Name and Address: None
(n)	Rider: List any Riders that are attached: None.

II. POSSESSION

     2.1 Possession.

     Except as otherwise expressly provided herein, Landlord shall deliver possession of the Leased Premises to Tenant upon full execution of this Lease in their condition as of the execution and delivery hereof, reasonable wear and tear and damage by casualty excepted. Additionally, Landlord shall perform the improvements to the common areas, as set forth and in accordance with Section 21.17 below and shall replace the roof to the Leased Premises promptly upon notification by Tenant to Landlord of completion of all Tenant’s Work which impacts the roof.

     2.2 Tenant’s Work

     Upon delivery of possession to Tenant, Tenant agrees to make the improvements to the Leased Premises described in this Section 2.2 (the “Tenant’s Work”). In consideration for the construction allowance payable by Landlord pursuant to this Section 2.2, Tenant hereby represents and warrants to Landlord that it will spend no less than Four Million Four Hundred Thirty-three Thousand One Hundred Thirty Dollars ($4,433,130.00) for Tenant’s Work. In the event Tenant spends less than said amount, Landlord and Tenant agree to equally share in said savings. The Tenant’s Work shall be done in a good and workmanlike manner under a build to suit contract in accordance with the plans and specifications prepared by Ford Architects and engineered by McMullen Engineering, and approved by Landlord, which approval shall not be unreasonably withheld (upon approval, the “Approved Plans”). Tenant’s Work shall comply with applicable federal, state and local laws, rules, regulations and code requirements. Any structural or exterior changes to the Approved

4

Plans by Tenant shall be approved in advance by Landlord, which approval shall not be unreasonably withheld or delayed, and shall be in compliance with all applicable building codes, laws ordinances and regulations.

     Landlord shall pay Tenant Four Million Four Hundred Thirty-three Thousand and One Hundred and Thirty Dollars ($4,433,130.00) (the “Tenant Reimbursement”), as payment for all costs incurred by or on behalf of Tenant for furnishing, constructing and installing the work comprising Tenant’s Work (“Tenant Improvements”). The Tenant Reimbursement shall be paid by Landlord to Tenant in twenty-five percent (25%) installments as portions of Tenant’s Work is completed and billed to Tenant by its contractor, as approved by Tenant’s architect. Upon Tenant receiving an invoice from its contractor evidencing completion of twenty-five percent (25%), fifty percent (50%) and seventy-five percent (75%) of the Tenant’s Work, Tenant shall submit: (i) a request for payment; and (ii) a copy of such invoice to Landlord, and Landlord shall pay Tenant twenty-five percent (25%) of the Tenant Reimbursement within ten (10) days of receipt thereof. The final twenty-five percent (25%) installment shall be paid by Landlord to Tenant within ten (10) days of the later of: (i) receipt by Landlord of Tenant’s request for payment; (ii) substantial completion of the Tenant Improvements; (iii) Tenant opening for business in the Leased Premises; (iv) Tenant providing to Landlord a lien waiver from Tenant’s general contractor; and (v) Tenant paying the first installment of rent due hereunder. In the event Landlord does not timely pay any installment of the Tenant Reimbursement to Tenant, (a) Landlord shall pay to Tenant interest on such unpaid amounts at a rate of interest equal to four percent (4%) over the prime rate in effect from time to time as established by National City Bank, Columbus, Ohio and (b) Tenant shall have the right to deduct any and all such amounts owed Tenant against payments of rent thereafter due Landlord until such time as Tenant has been credited the full amount of the Tenant Reimbursement plus applicable interest.

     Notwithstanding anything to the contrary contained in this Lease, the Tenant Improvements shall, at all times during the term of this Lease and upon the expiration or earlier termination of this Lease, be the property of Landlord. Tenant shall not acquire any interest, equitable or otherwise, in any Tenant Improvements. Tenant agrees that the Tenant Reimbursement shall be used for improvements to the Leased Premises, which shall be affixed to the Real Estate and the improvements constructed thereon, and shall not be used for the purchase of Tenant’s personal property.

III. PURPOSE

     3.1 Purpose.

     The Leased Premises shall be used and occupied only for the Purpose set forth in Section 1.6(a) hereof, except that no such use shall (a) violate any certificate of occupancy or law, ordinance or other governmental regulation in effect from time to time affecting the Leased Premises or the use thereof, including all recorded instruments of record, (b) cause injury to the improvements, (c) cause the value or usefulness of the Real Estate or any part thereof to diminish, (d) constitute a public or private nuisance or waste, (e) authorize Tenant to use, treat, store or dispose of hazardous or toxic materials on the Real Estate, or (f) render the insurance on the Leased Premises void or the insurance risk more hazardous, provided, however, that if Tenant’s use of the Leased Premises does make the insurance risk more hazardous then, without prejudice to any other remedy of Landlord for such breach, Tenant shall pay to Landlord, on demand, the amount by which Landlord’s insurance premiums are increased as a result of such use, which payment shall be in addition to the payment by Tenant for premiums as provided in Section 6.3 hereof. Tenant shall not use or occupy the Leased Premises contrary to any statute, rule, order, ordinance, requirement or regulation applicable thereto.

     3.2 Use of Real Estate.

     Tenant acknowledges that the Real Estate is adjacent to the Columbus International Airport (the “Airport”) and that portions of the Real Estate may be used for storage, repair, loading and unloading of airplanes and other services associated with the Airport and airplanes. To the extent applicable to either Landlord or Tenant the parties agree to the

5

following: (i) Tenant’s operations as a general office at the Real Estate and the Airport, including the hiring of employees or contractors, shall be in full compliance with all security, safety and other regulations of the Federal Aviation Administration, United States State Department or other applicable governmental or quasi-governmental authorities having jurisdiction over the Real Estate and/or the Airport; (ii) Landlord hereby represents to Tenant that, as of the date of execution hereof, Landlord is not aware of any such regulations or restrictions which would be violated by Tenant’s operation of the Leased Premises as a general office and Landlord further agrees that it shall promptly advise Tenant at such time as Landlord becomes aware of any such regulations or restrictions; (iii) Tenant further acknowledges that these uses generate substantial noise and other emissions and covenants that Tenant will not interfere with these uses of the Real Estate; (iv) Tenant consents to the above uses of the Real Estate and agrees that such use shall not interfere with its use of the Leased Premises nor shall Tenant permit any use of the Leased Premises which shall be inconsistent with the use of the Real Estate and the adjacent Airport; and (v) Tenant acknowledges and consents to any expansion of the Airport, including without limitation one which includes a major runway, or a portion thereof, between the current Airport runways and the Leased Premises.

IV. RENT

     4.1 Annual Rent.

     Beginning with the Rent Commencement Date, Tenant shall pay, without demand, annual rent as set forth in Section 1.6(b) hereof payable monthly in advance on or before the first day of each month during the term of this Lease in installments as set forth in said Section. Rent shall be paid to or upon the order of Payee at the Payee’s Address. Landlord shall have the right to change the Payee or the Payee’s Address by giving written notice thereof to Tenant. All payments of rent shall be made in lawful money of the United States without any deduction, set off, discount or abatement whatsoever except as specifically set forth herein.

     4.2 Interest on Late Payments.

     Each and every installment of rent and each and every payment of other charges hereunder which shall not be paid when due and not paid within five (5) days after notice thereof shall bear interest at the highest rate then payable by Tenant in the state in which the Leased Premises are located or, in the absence of such a maximum rate, at a rate per annum equal to four percent (4%) in excess of the announced prime rate of interest of National City Bank, Columbus, in effect on the due date of such installment(s), from the date when the same is payable under the terms of this Lease until the same shall be paid; provided that payment of such interest shall not excuse default in the payment of rent or other sums due hereunder.

     4.3 Additional Rent.

     Beginning with the Rent Commencement Date, Tenant shall also pay to Landlord as additional rent the sum of Tenant’s Pro Rata Share of Impositions (defined in Section 5.1), Landlord’s insurance (pursuant to Article 6), Common Area utility charges (pursuant to Section 12.1, below), and Landlord’s Maintenance Costs (defined in Section 14.2). The amounts payable pursuant to the preceding sentence shall be paid to Landlord each month on the dates and at the place specified for the payment of annual rent, unless Landlord notifies Tenant in writing of a different address therefor.

     During the Term of this Lease, including any and all Option Terms, Tenant’s Pro Rata Share of Landlord’s Maintenance Costs (defined in Section 14.2) (excluding costs of snow and ice removal and Common Area utility charges) shall not increase by more than ten percent (10%) in any Lease Year over the previous Lease Year.

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V. IMPOSITIONS

     5.1 Payment by Tenant.

(a)

Definition of Impositions. Tenant shall pay to Landlord, as additional rent for the Leased Premises, Tenant’s Pro Rata Share of all (i) taxes and assessments, general and special, water rates and all other impositions, ordinary and extraordinary, of every kind and nature whatsoever, which are payable during the term of this Lease upon the Real Estate or any part thereof or upon any improvements at any time situated thereon, (ii) any assessment by any association of owners of property in the complex of which the Real Estate is a part which is payable during the term of this Lease and (iii) all fees and costs incurred by Landlord during the Lease term for the purpose of contesting or protesting tax assessments or rates (“Impositions”). For the purpose of determining the amount of Impositions payable by Landlord during any year, there shall be added and or credited, as applicable, to the amount of Impositions paid or payable by Landlord an amount equal to any tax abatements or comparable credits allowed to Landlord by the City of Columbus or other applicable governmental jurisdiction for such year. Tenant’s Pro Rata Share of such Impositions shall be prorated between Landlord and Tenant for the first Lease Year and as of the expiration date of the Lease term for the last year of the Lease term (on the basis of Landlord’s reasonable estimate thereof). Landlord may take the benefit of the provisions of any statute or ordinance permitting any assessment to be paid over a period of years, in which event Tenant shall be obligated to pay its Pro Rata Share of only those installments paid during the term of this Lease and any extensions thereof. There shall be excluded from Impositions all federal income taxes, state and local net income taxes, federal excess profit taxes, franchise, capital stock and federal or state estate or inheritance taxes of Landlord.

(b)

Calculation of Tenant’s Pro Rata Share of Impositions. Tenant’s Pro Rata Share of such Impositions shall be determined by (i) multiplying Tenant’s Pro Rata Share (as set forth in Section 1.3 hereof) by the amount of Impositions (as defined in Section 5.1(a) above) paid or payable in a Lease Year and (ii) subtracting from the result thereof the amount of any tax abatement or comparable credit specifically applicable to the Leased Premises. If any such tax abatement or other credit includes the Leased Premises and other portions of the Real Estate, the amount of such abatement or credit to be subtracted in (ii) above shall be the amount of such tax abatement or credit, multiplied by a fraction, the numerator of which shall be the number of square feet of leasable space in the Leased Premises and the denominator of which shall be the number of square feet of leasable space in the portion of the Real Estate for which the tax abatement or credit was given. Tenant’s Pro Rata Share of Impositions shall be paid by Tenant to Landlord within thirty (30) days after Landlord bills Tenant therefore (but in no event earlier than twenty-one (21) days prior to the due date thereof) or, at Landlord’s election in monthly installments in amounts reasonably estimated by Landlord. Tenant’s Pro Rata Share of all Impositions shall be computed by Landlord within ninety (90) days after the end of each accounting year (which Landlord may change from time to time). Landlord shall furnish to Tenant a statement showing in reasonable detail the actual Impositions incurred during such accounting year and Tenant’s Pro Rata Share thereof. To the extent Tenant’s Pro Rata Share of such costs is greater than the sums paid by Tenant for such year, the difference shall be billed to and paid by Tenant within thirty (30) days after Tenant’s receipt of said bill. Any excess payment made by Tenant shall be credited against future installments of such Pro Rata Share of Impositions. Tenant’s estimated monthly Pro Rata Share of Impositions may thereafter be adjusted by written notice from Landlord. Landlord estimates Tenant’s initial Pro Rata Share of the Impositions to be Twenty-five cents ($0.25) per square foot per annum.

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(c) Real Estate Tax Appeals. Tenant shall have the right to compel Landlord to appeal Impositions if Tenant notifies Landlord in writing that Tenant has made a good faith determination that Impositions exceed an amount which Tenant believes are consistent with the fair market value of the Real Estate. In the event Landlord receives such notice, Landlord shall contest such Impositions by counsel reasonably satisfactory to Landlord. The cost to contest the Impositions shall be added to Impositions and Tenant shall pay its pro rata share thereof; provided, however, that Tenant shall receive a pro rata share of any reduction in Impositions based upon the leasable square footage of those tenant’s leasing portions of the Real Estate which is the subject of such appeal of Impositions, prorated to reflect the term of the Lease.

     5.2 Alternative Taxes.

     If at any time during the term of this Lease the method of taxation prevailing at the commencement of the term hereof shall be altered so that any new tax, assessment, levy, imposition, or charge, or any part thereof, shall be measured by or be based in whole or in part upon the Lease, or the Leased Premises, or the Real Estate, or the rent, additional rent or other income therefrom and shall be imposed upon Landlord, in lieu of or in substitution for previously existing Impositions, then all such taxes, assessments, levies, impositions or charges, or the part thereof, to the extent that they are so measured or based, shall be deemed to be included within the term “Impositions” for the purpose hereof, to the extent that such Impositions would be payable if the Real Estate were the only property of Landlord subject to such Impositions, and Tenant shall pay its Pro Rata Share of Impositions as so defined.

     5.3 Other Taxes.

     Tenant further covenants and agrees to pay promptly when due all taxes assessed against Tenant’s fixtures, furnishings, equipment and stock-in trade placed in or on the Leased Premises during the term of this Lease.

VI. RISK ALLOCATION AND INSURANCE

     6.1 Allocation of Risks.

     The parties desire, to the extent permitted by law, to allocate certain risks of personal injury, bodily injury or property damage, and risks of loss of real or personal property by reason of fire, explosion or other casualty, and to provide for the responsibility for insuring those risks. It is the intent of the parties that, to the extent any event is required by the terms hereof to be covered by insurance, any loss, cost, damage or expense, including, without limitation, the expense of defense against claims or suits, be covered by insurance, without regard to the fault of Tenant, its officers, employees, agents, contractors and customers (“Tenant Protected Parties”), and without regard to the fault of Landlord, Agent, their respective members, officers, directors, employees, agents and contractors (“Landlord Protected Parties”). As between Landlord Protected Parties and Tenant Protected Parties, such risks are allocated as follows:

(a)

Tenant shall bear the risk of bodily injury, personal injury or death, or damage to property, or to third persons, occasioned by events occurring within, on or about the Leased Premises, regardless of the party at fault, if any. Said risks shall be insured as provided in Section 6.2(a).

(b)

Landlord shall bear the risk of bodily injury, personal injury, or death or damage to property, or to third persons, occasioned by events occurring on or about the Real Estate (other than premises leased to tenants), regardless of the party at fault, if any; provided, however, Landlord shall not bear the risk for the Ramp Area, including but not limited to all aircraft thereon and the loading dock area, as such area is designated on the Tenant Parking Area Plan (defined in Section 21.17 below). Said risk shall be insured against as provided in Section 6.3(a).

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(c)	Tenant shall bear the risk of bodily injury, personal injury, or death or damage to property, or to third persons, occasioned by any event occurring on or about the Ramp Area and the loading dock area as designated on the Tenant Parking Area Plan (defined in Section 21.17 below) provided that as to the Ramp Area only, such event is occasioned by the wrongful act or omission of any of Tenant Protected Parties. Said risk shall be insured against as provided in Section 6.2(a).
(d)	Tenant shall bear the risk of damage to contents, trade fixtures, machinery, equipment, furniture, furnishings and property of Tenant, Tenant’s Protected Parties and property in Tenant’s control, care and custody in the Leased Premises arising out of loss by all events required to be insured against pursuant to Section 6.2(b)
(e)	Landlord shall bear the risk of damage to the building on the Real Estate arising out of loss by events required to be insured against pursuant to Section 6.3(b).

Notwithstanding the foregoing, provided the party required to carry insurance under Section 6.2(a) or Section 6.3(a) hereof does not default in its obligation to do so, if and to the extent that any loss occasioned by any event of the type described in Section 6.1(a) or Section 6.1(b) exceeds the coverage or amount of insurance actually carried, or results from an event not required to be insured against and not actually insured against, the party at fault shall pay the amount not actually covered under these respective policies.

     6.2 Tenant’s Insurance.

     Tenant shall procure and maintain policies of insurance, at its own cost and expense, insuring:

(a)

The Landlord Protected Parties as “additional insureds”, and Landlord’s mortgagee, if any, of which Tenant is given written notice, and Tenant Protected Parties, from all claims, demands or actions made by or on behalf of any person or persons, firm, corporation or entity and arising from, related to or connected with the Leased Premises, Tenant’s use thereof or operations therein for bodily injury to or personal injury to or death of any person, or more than one (1) person, or for damage to property in an amount of not less than One Million Dollars ($1,000,000.00) per occurrence and not less than Two Million Dollars ($2,000,000.00) policy aggregate limit. Said insurance shall be written on an “occurrence” basis and not on a “claims made” basis, and such liability policies shall include products and completed operations liability insurance. If at any time during the term of this Lease, Tenant owns or rents more than one location, the policy shall contain an endorsement to the effect that the aggregate limit in the policy shall apply separately to each location owned or rented by Tenant. Landlord shall have the right, exercisable by giving written notice thereof to Tenant, to require Tenant to increase such limit if, in Landlord’s reasonable judgment, the amount thereof is insufficient to protect the Landlord Protected Parties and Tenant Protected Parties from judgments which might result from such claims, demands or actions. Tenant shall cause its liability insurance to include contractual liability coverage fully covering the indemnity set forth above and in Section 13.1 below.

(b)

All contents and Tenant’s trade fixtures, machinery, equipment, furniture and furnishings in the Leased Premises to the extent of at least ninety percent (90%) of their replacement cost under Standard Fire and Extended Coverage Policy and all other risks of direct physical loss as insured against under Special Form (“all risk” coverage). Said insurance shall contain an endorsement waiving the insurer’s right of subrogation against any Landlord Protected Party.

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(c)	Tenant Protected Parties from all worker’s compensation claims, including employer’s liability with minimum limits of $500,000.00 per occurrence.
(d)	Landlord and Tenant against breakage of all plate glass utilized in the improvements on the Leased Premises.
(e)	Tenant agrees to maintain, at its own expense, for the benefit of itself, Tenant’s Protected Parties and Landlord’s Protected Parties, excess and/or umbrella liability insurance of such types and with limits not less than Twenty Five Million Dollars ($25,000,000.00) as may be approved by Landlord, insuring against liability for damage or loss to property, and against liability for personal injury or death, arising from acts or omissions of Tenant, its agents, employees or invitees. Said excess and/or umbrella policies shall include all liability policies in Section 6.2(a), employer’s liability in Section 6.2(c) and hangar liability in Section 6.2(e) as underlying policies.

     Tenant agrees to provide Landlord with notice of any self-insurance programs and Landlord shall have the right to approve any such programs. Any insurance deductibles or self-insurance amounts shall be the responsibility of Tenant, and any deductibles or self-insurance amounts in excess of $250,000 shall be approved in advance by Landlord.

     6.3 Landlord’s Insurance.

     Landlord shall procure and maintain policies of insurance insuring:

(a)	Commercial general liability (including products and completed operations) or other policy forms which would provide similar coverages on behalf of Landlord and Landlord’s Protected Parties for those claims of bodily injury or property damage arising from the Real Estate (including all common areas and the parking lots therein) and the operations of the Landlord and Landlord’s Protected Parties. Said liability insurance policy shall be written on an “occurrence” basis with a combined single limit of One Million Dollars ($1,000,000.00) per occurrence and not less than Two Million Dollars ($2,000,000.00) policy aggregate limit, and One Million Dollars ($1,000,000.00) limit for products and completed operations.
	Umbrella liability insurance providing a minimum of Fifty Million Dollars ($50,000,000.00) limit naming the commercial general liability policy (Section 6.3(a)(i)) as an underlying policy.
(b)	The building containing the Leased Premises, and any improvements therein, including Tenant Improvements, against loss or damage by fire, lightning, wind storm, hail storm, aircraft, vehicles, smoke, explosion, riot or civil commotion as provided by the Standard Fire and Extended Coverage Policy and all other risks of direct physical loss as insured against under Special Form (“all risk” coverage). The insurance coverage shall be for not less than 90% of the full replacement cost of the Leased Premises for an agreed amount basis with the insurance carrier, with sufficient limits to replace the Leased Premises of similar utility purpose. . Landlord shall be named as the insured and all proceeds of insurance shall be payable to Landlord. Said insurance shall contain an endorsement waiving the insurer’s right of subrogation against any Tenant Protected Party.
(c)	Landlord’s business income, protecting Landlord from loss of rents and other charges during the period while the Leased Premises are untenantable due to fire or other casualty (for the period reasonably determined by Landlord).
(d)	Flood or earthquake insurance whenever, in the reasonable judgment of Landlord, such protection is necessary and it is available at commercially reasonable cost.

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     6.4 Form of Insurance.

     All of the aforesaid insurance shall be in reputable companies licensed to do business in the State of Ohio with a minimum A.M. Best rating of “A”. Landlord shall have the right to self-insure and use high deductibles or self-insured retention levels to help control the cost of insurance premiums. As to Tenant’s insurance, the insurer and the form, substance and amount (where not stated above) shall be satisfactory from time to time to Landlord and any mortgagee of Landlord, and shall unconditionally provide that it is not subject to cancellation or non-renewal except after at least thirty (30) days prior written notice to Landlord and any mortgagee of Landlord. Originals of Tenant’s insurance policies (or certificates thereof satisfactory to Landlord), together with satisfactory evidence of payment of the premiums thereon, shall be deposited with Landlord at the Commencement Date and renewals thereof not less than thirty (30) days prior to the end of the term of such coverage. Landlord shall have the right, from time to time, to increase the occurrence limits and/or policy limits of Landlord and/or Tenant hereunder, as Landlord may reasonably determine.

     6.5 Insurance Premiums.

     Tenant shall pay to Landlord, as additional rent for the Leased Premises, Tenant’s Pro Rata Share of any premiums for all property, boiler and machinery, worker’s compensation, crime insurance, business income and liability insurance (with all endorsements) paid annually by Landlord with respect to the Real Estate (collectively, “Insurance Premiums”). Tenant shall be obligated to pay its Pro Rata Share of only those annual premiums which relate to insurance coverage during the term of this Lease. Tenant’s Pro Rata Share of such premiums shall be paid by Tenant to Landlord in monthly installments in amounts estimated by Landlord. Tenant’s proportionate share of all insurance costs shall be computed by Landlord within ninety (90) days after the end of each accounting year (which Landlord may change from time to time). Landlord shall furnish to Tenant a statement showing in reasonable detail the actual insurance costs incurred during such accounting year and Tenant’s Pro Rata Share thereof. To the extent Tenant’s Pro Rata Share of such costs is greater than the sums paid by Tenant for such year, the difference shall be billed to and paid by Tenant within thirty (30) days after Tenant’s receipt of said bill. Any shortfall shall be credited against future installments of rent. Tenant’s estimated monthly insurance costs thereafter may be adjusted by written notice from Landlord. Landlord estimates Tenant’s initial Pro Rata Share of Insurance Premiums to be Fifteen Cents ($0.15) per square foot per annum.

     6.6 Fire Protection.

     Tenant shall conform the Leased Premises with all applicable fire codes of any governmental authority, and with the rules and regulations of Landlord’s fire underwriters and their fire protection engineers, including, without limitation, the installation and maintenance of adequate fire extinguishers, and/or any other unique requirements based on Tenant’s occupancy. Landlord agrees to coordinate the installation and/or modification of the sprinkler systems, alarms and/or special hazards fire protection for the Leased Premises provided that Tenant shall be responsible for any additional cost caused solely on account of Tenant’s particular use of the Leased Premises. Landlord is providing a sprinkler monitoring system with a direct connection to the local fire department or monitoring service. In the event of impairment of the sprinkler system, the party discovering such impairment shall immediately notify the other party hereto. During the period of any such impairment or shutdown of the fire protection system(s), Tenant shall cease any operations which may create any form of flame, spark, combustible risk or explosive atmosphere.

     In addition to the Monitoring Service Charge payable by Tenant as set forth in the preceding paragraph (if any), Tenant shall, upon invoice therefor, reimburse Landlord for Landlord’s costs incurred in maintaining and repairing any sprinkler or other fire suppression system, such costs to be prorated based upon Tenant’s proportionate share of the floor space in the Building in which the Leased Premises is situated. Landlord and Tenant hereby agree that all maintenance and repair on the sprinkler systems, alarms and/or special hazard fire protection shall be the responsibility of the Tenant for those systems affording protection to the Leased Premises.

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     6.7 Waiver of Subrogation.

     Landlord and Tenant, and all parties claiming under each of them, mutually release and discharge each other from all claims and liabilities arising from or caused by any casualty or hazard covered or required hereunder to be covered in whole or in part by insurance coverage required to be maintained by the terms of this Lease on the Leased Premises or in connection with the Real Estate or activities conducted thereon or therewith, and waive any right of subrogation which might otherwise exist in or accrue to any person on account thereof, including all other tenants of the Building. All policies of insurance required to be maintained by the parties hereunder shall contain waiver of subrogation provisions in accordance with the foregoing so long as the same are available.

     6.8 Disclaimer of Liability.

     To the extent of the insurance carried by Tenant or required by the terms of this Lease to be carried by Tenant, Tenant hereby disclaims, and releases Landlord and Landlord’s Protected Parties from any and all liability, whether in contract or tort (including strict liability and negligence), for any loss, damage, or injury of any nature whatsoever sustained by Tenant and Tenant’s Protected Parties, during the term of this Lease. The parties hereby agree that under no circumstances shall Landlord be liable for indirect, consequential, special, or exemplary damages, whether in contract or tort (including strict liability and negligence), such as, but not limited to, loss of revenue or anticipated profits or other damage related to the leasing of the Premises under this Lease. Tenant shall also hold Landlord and Landlord’s Protected Parties harmless from and against any and all liability, fines, or other charges incurred as a result of alleged violations of airport security regulations (FAR parts 107 and 139) by Tenant and Tenant’s Protected Parties.

     To the extent of the insurance carried by Landlord or required by the terms of this Lease to be carried by Landlord, Landlord hereby disclaims, and releases Tenant from any and all liability, whether in contract or tort (including strict liability and negligence), for any loss, damage, or injury of any nature whatsoever sustained by Landlord and Landlord’s Protected Parties, during the term of this Lease. The parties hereby agree that under no circumstances shall Tenant be liable for indirect, consequential, special, or exemplary damages, whether in contract or tort (including strict liability and negligence), such as, but not limited to, loss of revenue or anticipated profits or other damage related to this Lease. Landlord shall also hold Tenant and Tenant’s Protected Parties harmless from and against any and all liability, fines, or other charges incurred as a result of alleged violations of airport security regulations (FAR parts 107 and 139) by Landlord and Landlord’s Protected Parties.

VII. DAMAGE OR DESTRUCTION

     7.1 Landlord’s Obligation to Rebuild.

     In the event the Leased Premises are damaged by fire, explosion or other casualty, Landlord shall commence the repair, restoration or rebuilding thereof within sixty (60) days after such damage and shall complete such restoration, repair or rebuilding within one hundred fifty (150) days after the commencement thereof, provided that if construction is delayed because of changes, deletions, or additions in construction requested by Tenant, strikes, lockouts, casualties, acts of God, war, material or labor shortages, governmental regulation or control or other causes beyond the control of Landlord, the period for restoration, repair or rebuilding shall be extended for the amount of time Landlord is so delayed. If the casualty or the repair, restoration or rebuilding caused thereby shall render the Leased Premises untenantable, in whole or in part, rent shall be equitably abated during the period of untenantability and Tenant shall have no liability for the abated rent. If such a fire, explosion or other casualty damages the building in which the Leased Premises are located in a material or substantial way during the last two (2) years of the original Term or the then applicable Option Term, then unless Tenant exercises an outstanding option for an Option Term, Landlord may, in lieu of repairing, restoring or rebuilding the same, terminate this Lease within sixty (60) days after the occurrence of the event causing the damage by notice to Tenant. In such event, the obligation of Tenant to pay rent and other charges hereunder shall end as of the date when the damage occurred.

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     7.2 Tenant’s Rights After Casualty.

     In the event of any substantial damage or destruction to the Leased Premises, Landlord shall notify Tenant within thirty (30) days thereafter of the anticipated time to complete the repair, restoration or rebuilding thereof. In the event the anticipated time is greater than one hundred fifty (150) days from the date of such casualty, then in such event Tenant shall have the right to elect to terminate this Lease by notice to Landlord within thirty (30) days after receipt of Landlord’s estimate of the anticipated time to restore the Leased Premises. Additionally, in the event any damage or destruction to the Leased Premises is not repaired, restored or rebuilt, as the case may be, within one hundred fifty (150) days after such damage or destruction, then in such event Tenant shall have the right and option to elect to terminate this Lease by notice to Landlord at any time prior to substantial completion of such work by Landlord; provided, however, that upon receipt of any such notice, Landlord shall have the right to nullify such election by notice to Tenant so long as Landlord substantially completes the repair, restoration or rebuilding of the Leased Premises within thirty (30) days after receipt of Tenant’s notice.

VIII. CONDEMNATION

     8.1 Taking of Whole.

     If the whole of the Leased Premises shall be taken or condemned for a public or quasi-public use or purpose by a competent authority, or if such a portion of the Leased Premises shall be so taken that as a result thereof the balance cannot be used for the same purpose and with substantially the same utility to Tenant as immediately prior to such taking, then in either of such events, the Lease term shall terminate upon delivery of possession to the condemning authority, and any award, compensation or damages (hereinafter sometimes called the “Award”) shall be paid to and be the sole property of Landlord whether the Award shall be made as compensation for diminution of the value of the leasehold estate or the fee of the Real Estate or otherwise except that Tenant shall be entitled to the unamortized portion of the cost of Tenant’s Work (exclusive of Tenant’s construction allowance), as set forth in Section 2.2, as a portion of such Award in an amount not to exceed fifty percent (50%) of the Award (i.e. if the existing balance of the unamortized portion of the cost of Tenant’s Work (exclusive of Tenant’s construction allowance) is Four Million Dollars ($4,000,000.00), but the total amount of the Award is only Six Million Dollars ($6,000,000.00), Tenant shall only be entitled to fifty percent (50%) of such Award or Three Million Dollars ($3,000,000.00) even though such amount does not fully reimburse Tenant for the unamortized portion of the cost contributed by Tenant for Tenant’s Work (exclusive of Tenant’s construction allowance)). In connection with the forgoing, Tenant shall certify to Landlord the exact amount of the cost of Tenant’s Work (exclusive of Tenant’s construction allowance) amortized over the original Term of the Lease and Landlord shall reimburse Tenant for the unamortized portion remaining thereof (subject to the foregoing limitations) upon receiving the Award. Tenant shall continue to pay rent and other charges hereunder until the Lease term is terminated and any Impositions and premiums prepaid by Tenant, or which accrue prior to the termination, shall be adjusted between the parties.

     8.2 Partial Taking.

     If only a part of the Leased Premises shall be so taken or condemned, but the Lease is not terminated pursuant to Section 8.1 hereof, Landlord shall repair and restore the Leased Premises and all improvements thereon, to the extent reasonably practicable, provided that Landlord shall not hereby be required to expend for repair and restoration any sum in excess of the Award. Any portion of the Award which has not been expended by Landlord for such repairing or restoration shall be retained by Landlord as Landlord’s sole property. The rent shall be equitably abated following delivery of possession to the condemning body. If the portion of the building within which the Leased Premises are located shall be so taken or condemned in a material or substantial way, Landlord may terminate this Lease by giving written notice thereof to Tenant within sixty (60) days after such taking. In such event, the Award shall be paid to and be the sole property of Landlord except that Tenant shall be entitled to the unamortized portion of the cost of Tenant’s Work in the same manner and under the same conditions as set forth in Section 8.1 above.

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     8.3 Temporary Taking.

     If the whole or a part of the Leased Premises shall be taken or condemned for a public or quasi-public use or purpose by a competent authority, but only on a temporary basis, then in such event this Lease shall continue in full force and effect, without any abatement of rent whatsoever, but the Award paid on account of such temporary taking shall be paid to Tenant in full satisfaction of all claims of Tenant on account thereof.

     8.4 Payment to Tenant.

     Notwithstanding the provisions of this Article VIII, in the event of a termination of this Lease on account of a taking, then in such event Landlord agrees that Tenant may prosecute a claim in such condemnation proceeding for (a) the reasonable relocation and moving costs incurred by Tenant on account thereof, (b) the unamortized balance of Tenant’s leasehold improvements to the Leased Premises (less the construction allowance paid by Landlord hereunder), which balance shall be calculated by amortizing such costs on a straight-line basis over the initial fifteen (15) year Lease term, and (c) the value of the remaining leasehold interest of Tenant for the then existing term of this Lease. Tenant agrees that it shall not have the right to claim any other compensation in such proceeding.

IX. MAINTENANCE AND ALTERATIONS

     9.1 Landlord’s Maintenance.

(a)

Landlord shall perform all maintenance, repairs and replacements of the roof (excluding any maintenance, repair or replacement to the skylights installed by Tenant), the utility lines (as the same may be upgraded by Tenant) leading to the Leased Premises up to the point of entry and the exterior and structural components of the Leased Premises (unless caused by Tenant’s use of or alterations to the Leased Premises). Tenant shall pay to Landlord Tenant’s Pro Rata Share of the costs and expenses incurred by Landlord in fulfilling its obligations under this Section 9.1 pursuant to the reimbursement provisions set forth in Section 14.2 below, except that, subject to Section 6.1(d) hereof, if the necessity for any such maintenance, repairs or replacements results from any act or omission or negligence of Tenant, its agents, employees, contractors, customers or invitees, Tenant shall pay to Landlord all of the costs and expenses incurred by Landlord in performing such work. Such payment shall be additional rent hereunder and shall be paid to Landlord within thirty (30) days after Landlord bills Tenant therefor.

(b)

Notwithstanding the provisions of Paragraph (a) above, Landlord shall not be obligated to repair the following: (i) the exterior or interior of any doors, windows and plate glass surrounding the Leased Premises; (ii) heating, ventilating or air-conditioning equipment in the Leased Premises; and (iii) damage to Tenant’s improvements or personal property caused by any casualty, burglary, break-in, vandalism, war or act of God. Landlord shall, in any event, have ten (10) days after notice from Tenant stating the need for repairs to commence such repairs (unless an emergency in which event Landlord shall proceed forthwith), and Landlord shall thereafter proceed with due diligence to complete same.

     9.2 Tenant’s Maintenance.

(a) Except as provided in Section 9.1 hereof, Tenant shall keep and maintain the entire interior of the Leased Premises, specifically including, without limitation, all the heating, ventilating and air conditioning equipment (“HVAC”), pipes and conduits in good condition and repair and all interior utility systems exclusively serving the Leased Premises. Landlord shall assign to Tenant any existing warranties covering all matters to be repaired and maintained by Tenant. Tenant acknowledges and agrees that it will install a new HVAC system and skylights on the ceiling of the Leased Premises as part of Tenant’s Work and in connection therewith Tenant will be

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responsible for the repair, maintenance and replacement of same throughout the term of the Lease. Tenant shall keep the Leased Premises from falling out of repair or deteriorating and shall keep the same safe, secure and clean and in full compliance with all health and safety regulations in force. Nothing in Section 1.5(a) shall be deemed to limit Tenant’s obligation under this Section 9.2(a). Tenant shall promptly remove any debris left by Tenant, its employees, agents, contractors or invitees in the parking area or other exterior areas of the Real Estate. Tenant agrees to cooperate with any other tenants on the Real Estate in connection with exterior maintenance and repairs not performed by Landlord hereunder to the end that any exterior repairs and maintenance will be performed in a uniform manner acceptable to Landlord. In connection therewith, Tenant and such other tenants may agree among themselves as to the allocation of costs and responsibilities.

     9.3 Alterations.

(a)

Subsequent to the completion of Tenant’s Work, Tenant shall thereafter make all additions, improvements and alterations on the Leased Premises, and on and to the appurtenances and equipment thereof, required on account of Tenant’s particular use of the Leased Premises and required by any governmental authority or which may be made necessary by the act or neglect of Tenant, its employees, agents or contractors, or any persons, firm or corporation claiming by, through or under Tenant. Tenant shall also be entitled to construct non-load bearing partition walls without Landlord’s consent. Except as provided in the immediately preceding sentences, Tenant shall not create any openings in the roof or exterior walls, or make any other exterior or structural alterations to the Leased Premises (hereinafter “Alterations”) without Landlord’s prior written consent, which consent shall not be unreasonably withheld by Landlord. Any alterations or improvements by Tenant which alter the location of partition walls, fire walls or other fire protection shall require the prior written consent of the Landlord, which consent shall not be unreasonably withheld.

(b)

As to any Alterations which Tenant is required hereunder to perform or to which Landlord consents and as to work performed pursuant to Article XVIII hereof, such work shall be performed with new materials, in a workman-like manner, strictly in accordance with plans and specifications therefor first approved in writing by Landlord, which approval shall not be unreasonably withheld, and in accordance with all applicable laws and ordinances. Tenant shall, prior to the commencement of such work, deliver to Landlord copies of all required permits, and builders risk (or installation floater) insurance coverage to the extent of the cost of the Alterations. Tenant shall permit Landlord to monitor construction operations in connection with such work, and to restrict, as may reasonably be required, the passage of manpower and materials, and the conducting of construction activity in order to avoid unreasonable disruption, hazard or inconvenience to Landlord or other tenants of the Real Estate or to Permitted Parties or damage to the Real Estate or the Leased Premises. Upon completion of any such work by or on behalf of Tenant, Tenant shall provide Landlord with such documents as Landlord may reasonably require (including, without limitation, sworn contractors’ statements and supporting lien waivers) evidencing payment in full for such work, and “as built” working drawings or final working drawings marked by the general contractor to show changes made in the field. In the event Tenant performs any work not in compliance with the provisions of this Section 9.3(b), Tenant shall, upon written notice from Landlord, immediately remove such work and restore the Leased Premises to their condition immediately prior to the performance thereof. If Tenant fails so to remove such work and restore the Leased Premises as aforesaid, Landlord may, at its option, and in addition to all other rights or remedies of Landlord under this Lease, at law or in equity, enter the Leased Premises and perform said obligation of Tenant and Tenant shall reimburse Landlord for the cost to the

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Landlord thereof, immediately upon being billed therefor by Landlord. Such entry by Landlord shall not be deemed an eviction or disturbance of Tenant’s use or possession of the Leased Premises nor render Landlord liable in any manner to Tenant.

(c)	In no event shall Tenant be entitled to use the roof of the Leased Premises or any other roof on the Real Estate without the prior written consent of Landlord, which consent may be granted or withheld in Landlord’s sole discretion. In the event Tenant obtains Landlord’s consent to utilize the roof of the Leased Premises or any other roof of a building on the Real Estate, Tenant shall only use Landlord’s roofing contractor for all purposes for which Landlord has consented.
(d)	All improvements and Alterations made to the Leased Premises by Tenant shall, immediately upon attachment to the Leased Premises or installation thereof, be deemed the property of Landlord and Tenant shall have no further right or claim to the title thereof.
(e)	Tenant shall have the right upon written notice to Landlord to install satellite equipment upon the roof of the Leased Premises, subject to Landlord’s approval of the equipment and the manner of installation, which approval shall not be unreasonably withheld or delayed. Tenant agrees to indemnify and hold harmless Landlord and Landlord’s Protected Parties from any loss, cost or expense (including damage to property and injury to person) arising out of the installation, maintenance, operation, repair, replacement and removal of such equipment. Tenant further agrees that such equipment shall not (i) violate any governmental laws, rules and regulations, including, without limitation, those promulgated by the Federal Aviation Administration (“FAA”), (ii) interfere with any other tenants located at the Columbus International Aircenter, or (iii) result in an unsightly condition. Tenant shall be fully responsible for the maintenance and repair of such equipment and shall remove such equipment at the expiration or early termination of the Term of the Lease.

X. ASSIGNMENT AND SUBLETTING

     10.1 Consent Not Required.

(a)

Tenant may assign, sublet, convey or mortgage its leasehold interest in the Leased Premises without the consent of Landlord, provided Tenant shall remain fully liable hereunder. If Tenant assigns the Lease or enters into any sublease of the Leased Premises, Tenant shall deliver written notice thereof to Landlord within thirty (30) days after the effective date thereof. Any proposed assignment or sublease shall be expressly subject to the terms, conditions and covenants of this Lease and the use of such sublessee or assignee shall be compatible with the general character of the Real Estate. Any proposed assignment shall contain a written assumption by assignee of all of Tenant’s obligations under this Lease. Any sublease shall (i) provide that the sublease is subject and subordinate to this Lease; (ii) provide that the sublessee shall procure and maintain the insurance required of Tenant in accordance with the terms of Section 6.2(b) and Section 9.3(b) hereof, and (iii) provide for a copy to Landlord of notice of default by either party.

(b)

No permitted assignment shall be effective and no permitted sublease shall commence unless and until any default by Tenant hereunder shall have been cured. No permitted assignment or subletting shall relieve Tenant from Tenant’s obligations and agreements hereunder and Tenant shall continue to be liable as a principal and not as a guarantor or surety to the same extent as though no assignment or subletting had been made.

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     10.2 Other Transfer of Lease.

     Tenant shall not allow or permit any transfer of this Lease, or any interest hereunder, by operation of law, or convey, mortgage, pledge, or encumber this Lease or any interest therein.

XI. LIENS AND ENCUMBRANCES

     11.1 Encumbering Title.

     Tenant shall not do any act which shall in any way encumber the title of Landlord in and to the Leased Premises or the Real Estate, nor shall the interest or estate of Landlord in the Leased Premises or the Real Estate be in any way subject to any claim by way of lien or encumbrance, whether by operation of law or by virtue of any express or implied contract by Tenant. Any claim to, or lien upon, the Leased Premises or the Real Estate arising from any act or omission of Tenant shall accrue only against the leasehold estate of Tenant and shall be subject and subordinate to the paramount title and rights of Landlord in and to the Leased Premises and the Real Estate. Tenant shall have the option to record a Notice of Commencement, similar in substance and form to that attached hereto as Exhibit F, approved in advance by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed.

     11.2 Liens and Right to Contest.

     Tenant shall not permit the Leased Premises or the Real Estate to become subject to any mechanics’, laborers’ or materialmen’s lien on account of labor or material furnished to Tenant or claimed to have been furnished to Tenant in connection with work of any character performed or claimed to have been performed on the Leased Premises by, or at the direction or sufferance of Tenant. In the event a mechanic’s lien is filed against the Leased Premises or the Real Estate due to work performed by or on behalf of Tenant, Tenant shall discharge or bond off same within fifteen (15) days from Tenant’s receipt of written evidence of the filing thereof. If Tenant fails to discharge or bond off said lien, Landlord may bond off or pay same without inquiring into the validity or merits of such lien, and all sums so advanced shall be paid on demand by Tenant as additional rent. Tenant hereby agrees to indemnify and hold Landlord harmless for any liability, cost, damage and expense occasioned by any mechanic’s lien filed against the Leased Premises or the Real Estate on account of labor or material furnished to Tenant or claimed to have been furnished to Tenant in connection with the Leased Premises or the Real Estate.

XII. UTILITIES

     12.1 Utilities.

(a)

Prior to the Commencement Date, Landlord shall provide, at Landlord’s expense, by separate meter, electric and gas service to the Leased Premises. The utility provider or its representative for gas and electric service to the Leased Premises shall invoice Tenant for its usage of such utilities and Tenant shall pay any and all amounts due directly to Landlord. Tenant acknowledges that water and sewer utilities for the Leased Premises are provided by Landlord and billed by Landlord to Tenant based upon Tenant’s proportionate share of same. Simultaneous with the billing to Tenant of its water and sewer charges for the Leased Premises, Landlord shall provide Tenant with details regarding the calculations used by Landlord in computing Tenant’s proportionate share of same. Landlord shall not be liable for the quality or quantity of or interference involving any such utilities. During the term hereof, whether the Leased Premises are occupied or unoccupied, Tenant agrees to maintain heat sufficient to heat the Leased Premises so as to avert any damage to the Leased Premises on account of cold weather.

(b)

Except as provided herein, Landlord shall not be liable in damages or otherwise for any failure or interruption of any utility service being furnished

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to the Leased Premises. In the event any utility service to the Leased Premises shall be interrupted (a) for seventy-two (72) hours or more or (b) due to the negligent act or omission of the Landlord, its agents, contractors, or employees, rent and all charges payable hereunder shall equitably abate until such services are fully restored.

(c) Tenant agrees to be responsible for its rubbish removal for the Leased Premises. The location and placement of Tenant’s refuse container(s) shall be as shown on Exhibit B, which location and placement is hereby approved by Landlord.

XIII. INDEMNITY

     13.1 Indemnity.

     Tenant will protect, indemnify and save harmless Landlord Protected Parties (as defined in Section 6.1) from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including without limitation, reasonable attorneys’ fees and expenses) imposed upon or incurred by or asserted against Landlord by reason of (i) any failure on the part of Tenant to perform or comply with any of the terms of this Lease; (ii) performance of any labor or services or the furnishing of any materials or other property in respect of the Leased Premises or any part thereof; (iii) any violations or alleged violations of airport security regulations by Tenant and all Permitted Parties of Tenant; (iv) any use of the Leased Premises by Tenant, including but not limited to, the use of electronic or radar monitoring or transmission equipment or related transmissions; or (v) any and all liability, fines or other charges incurred as a result of alleged violations of airport or aviation security regulations by Tenant and its Permitted Parties. In case any action, suit or proceeding is brought against Landlord by reason of any occurrence described in this Section 13.1, Tenant will, at Tenant’s expense, by counsel approved by Landlord, resist and defend such action, suit or proceeding, or cause the same to be resisted and defended. The costs indemnified against hereunder and assumed under Article VI include, without limitation, any claims due to loss suffered by the Landlord, Landlord’s other tenants, the Permitted Parties, the Columbus Airport Authority, the tenants of the Columbus Airport Authority, or the City of Columbus, Ohio. The obligations of Tenant under this Section 13.1 shall survive the expiration or earlier termination of this Lease.

     Landlord will protect, indemnify and save harmless Tenant Protected Parties (as defined in Section 6.1) from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including without limitation, reasonable attorneys’ fees and expenses) imposed upon or incurred by or asserted against Tenant by reason of (i) any failure on the part of Landlord to perform or comply with any of the terms of this Lease, (ii) performance of any labor or services or the furnishing of any materials or other property in respect of the Leased Premises or any part thereof by Landlord, or (iii) any violations or alleged violations of airport security regulations by Landlord and all Permitted Parties of Landlord. In case any action, suit or proceeding is brought against Tenant by reason of any occurrence described in this Section 13.1, Landlord will, at Landlord’s expense, by counsel approved by Tenant, resist and defend such action, suit or proceeding, or cause the same to be resisted and defended. The costs indemnified against hereunder and assumed under Article VI include, without limitation, any claims due to loss suffered by the Tenant, the Permitted Parties, the Columbus Airport Authority, the tenants of the Columbus Airport Authority, or the City of Columbus, Ohio. The obligations of Landlord under this Section 13.1 shall survive the expiration or earlier termination of this Lease.

XIV. RIGHTS RESERVED TO LANDLORD

     14.1 Rights Reserved to Landlord.

     Without limiting any other rights reserved or available to Landlord under this Lease, at law or in equity, Landlord, on behalf of itself and Agent reserves the following rights to be exercised at Landlord’s election:

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(a)	Upon reasonable advance notice to inspect the Leased Premises;
(b)	Upon reasonable advance notice and with appropriate supervision, to show the Leased Premises to prospective purchasers, mortgagees, or other persons having a legitimate interest in viewing the same, and, at any time within one (1) year prior to the expiration of the Lease term, to persons wishing to rent the Leased Premises;
(c)	During the last year of the Lease term, to place and maintain the usual “For Rent” sign on the Real Estate (but not in or on the Leased Premises), and at any time during the Lease term to place and maintain “For Sale” signs on the Real Estate (but not in or on the Leased Premises); and
(d)	If Tenant shall theretofore have vacated the Leased Premises (but not earlier than during the last ninety (90) days of the Lease term), to decorate, remodel, repair, alter or otherwise prepare the Leased Premises for new occupancy.
(e)	To promulgate rules and regulations for the operation and use of the common areas, including the parking areas for the common use and benefit of the tenants of the Real Estate and their customers and invitees. Landlord shall at all times have exclusive control of the common areas and may at any time and from time to time: (i) modify and amend reasonable rules and regulations for the use of the common areas, which rules and regulations shall be binding upon the Tenant upon delivery of a copy thereof to the Tenant; (ii) temporarily close any part of the common areas, including but not limited to closing the streets, sidewalks, road or other facilities to the extent necessary to prevent a dedication thereof or the accrual of rights of any person or of the public therein; (iii) exclude and restrain anyone from the use or occupancy of the common areas or any part thereof except bona fide employees, invitees, guests, customers and suppliers of the tenants of the Real Estate who use said areas in accordance with the rules and regulations established by Landlord; (iv) engage others to operate and maintain all or any part of the common areas, on such terms and conditions as Landlord shall, in its sole judgment, deem reasonable and proper; and (v) make such changes in the common areas as in its opinion are in the best interest of the Real Estate, including but not limited to changing the location of walkways, service areas, driveways, entrances, existing automobile parking spaces and other facilities, changing the direction and flow of traffic and establishing prohibited areas. Provided, however, that in no event shall any such changes under this paragraph: (i) materially modify parking to the north and west of the Leased Premises, (ii) materially modify truck access to the west of the Leased Premises; or (iii) materially adversely affect parking, ingress, egress or access to the Leased Premises.
(f)	Remove any obstructions in the common areas created or permitted by Tenant, including towing vehicles parked in restricted parking zones at Tenant’s sole cost and expense.

Upon reasonable advance notice and with appropriate supervision, Landlord may enter upon the Leased Premises for any and all of said purposes and may exercise any and all of the foregoing rights hereby reserved, during normal business hours unless an emergency exists, without being deemed guilty of any eviction or disturbance of Tenant’s use or possession of the Leased Premises, and without being liable in any manner to Tenant.

     14.2 Maintenance Costs.

(a) Tenant shall pay to Landlord, as additional rental, in monthly installments based on Landlord’s estimates, from time to time, simultaneously with payment of minimum rental called for under Section 5, Tenant’s Pro Rata Share of the “maintenance cost” for the operation, maintenance, repair and replacement of the common areas and those costs incurred by Landlord

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pursuant to Section 9.1 above.

(b)	The maintenance costs for the common areas shall be computed on an accrual basis, and shall include all costs incurred by Landlord in connection with operating, securing, maintaining, repairing and replacing the common areas, including by way of example but not limitation: (i) cost of labor (including workmen’s compensation insurance, employee benefits and payroll taxes); (ii) materials, and supplies used or consumed in the maintenance or operation of the common area; (iii) to the extent not included in Section 12.1(b), the cost of operating and repairing of the lighting; (iv) cleaning, painting, removing of rubbish or debris, snow and ice, private security services, and inspecting the common areas; (v) the cost of repairing and/or replacing paving, curbs, walkways, parking lots, markings, directional or other signs; landscaping, and drainage and lighting facilities; (vi) rental paid for maintenance of machinery and equipment; (vii) to the extent not included in Section 6.5, cost of insurance for public liability and property insurance and boiler and machinery insurance for property in the common areas which are not part of the building, and crime insurance; (viii) one-half (1/2) of all costs properly chargeable to a capital account and (ix) a reasonable allowance to Landlord for Landlord’s supervision, which allowance shall not in an accounting year exceed ten percent (10%) of the total of all maintenance costs (excluding item (vii) above) for such accounting year (all of the foregoing are collectively referred to herein as “Maintenance Costs.” Maintenance Costs shall not include greater than one-half (1/2) of any costs incurred by Landlord properly chargeable to a capital account.
(c)	Landlord shall maintain accurate and detailed records of all Maintenance Costs for the common areas.
(d)	Tenant’s Pro Rata Share of all Maintenance Costs shall be computed by Landlord within ninety (90) days after the end of each accounting year (which Landlord may change from time to time). Landlord shall furnish to Tenant a statement showing in reasonable detail the actual Maintenance Costs incurred during such accounting year and Tenant’s Pro Rata Share thereof. To the extent Tenant’s Pro Rata Share of such costs is greater than the sums paid by Tenant for such year, the difference shall be billed to and paid by Tenant within thirty (30) days after Tenant’s receipt of said bill. Any shortfall shall be credited against future installments of rent. Tenant’s estimated monthly Maintenance Costs thereafter may be adjusted by written notice from Landlord.
(e)	Notwithstanding anything to the contrary contained herein, Tenant’s Pro Rata share of Maintenance Costs shall not exceed Fifty Cents (50¢) per square foot per year during the first Lease Year. In addition, during the Term of this Lease, including any and all Option Terms, Tenant’s Pro Rata Share of Maintenance Costs (excluding costs of snow and ice removal and Common Area utility charges) shall not increase by more than ten percent (10%) in any Lease Year over the previous Lease Year.

XV. QUIET ENJOYMENT

     15.1 Quiet Enjoyment.

     So long as Tenant is not in default under the covenants and agreements of this Lease, Tenant’s quiet and peaceable enjoyment of the Leased Premises shall not be disturbed or interfered with by Landlord or by any person claiming by, through or under Landlord.

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XVI. SUBORDINATION OR SUPERIORITY

     16.1 Subordination or Superiority.

(a)	This Lease is subject and subordinate to the lien of any deed of trust, mortgage or mortgages now placed upon Landlord’s interest in the Real Estate. Landlord shall use good faith efforts to obtain a commercially reasonable non-disturbance agreement for Tenant from its existing lender, Deutsche Bank, on or before the Rent Commencement Date. The parties agree that the non-disturbance agreement attached hereto as Exhibit D is commercially reasonable. In the event Tenant has not received a fully executed commercially reasonable non-disturbance agreement from Deutsche Bank within six (6) months from the date of this Lease, Tenant’s obligation to pay Annual Rent (but not Additional Rent) hereunder shall be deferred commencing upon the expiration of such six (6) month period until such time as said non-disturbance agreement is executed by Deutsche Bank and delivered to Tenant.
(b)	Landlord reserves the right to subject and subordinate this Lease at all times to the lien of any deed of trust, mortgage or mortgages hereafter placed upon Landlord’s interest in the Leased Premises; provided, however, that no default by Landlord, under any deed of trust, mortgage or mortgages, shall affect Tenant’s rights under this Lease, so long as Tenant performs the obligations imposed upon it hereunder and is not in default hereunder, and Tenant attorns to the holder of such deed of trust or mortgage, its assignee or the purchaser at any foreclosure sale. Tenant shall execute a commercially reasonable instrument presented to Tenant for the purpose of effecting such subordination so long as the subordination is substantially in the form attached as Exhibit D. It is a condition, however, to the subordination and lien provisions herein provided, that Landlord shall procure from any such mortgagee an agreement in writing, which shall be delivered to Tenant or contained in the aforesaid subordination agreement, providing in substance that so long as Tenant shall faithfully discharge the obligations on its part to be kept and performed under the terms of this Lease and is not in default under the terms hereof, its tenancy will not be disturbed nor this Lease affected by any default under such mortgage.
(c)	Wherever notice is required to be given to Landlord pursuant to the terms of this Lease, Tenant will likewise give such notice to any mortgagee of Landlord’s interest in the Leased Premises upon notice of such mortgagee’s name and address from Landlord. Furthermore, such mortgagee shall have the same rights to cure any default on the part of Landlord that Landlord would have had.

XVII. SURRENDER

     17.1 Surrender.

     Upon the termination of this Lease, whether by forfeiture, lapse of time or otherwise, or upon termination of Tenant’s right to possession of the Leased Premises, Tenant will at once surrender and deliver up the Leased Premises, together with all improvements thereon, to Landlord, in good condition and repair, reasonable wear and tear and loss by fire or other casualty excepted; conditions existing because of Tenant’s failure to perform maintenance, repairs or replacements as required herein, or because of Tenant’s particular use of the Leased Premises (even if permitted pursuant to Section 1.5(a) hereof), shall not be deemed “reasonable wear and tear.” Tenant shall deliver to Agent all keys to all doors therein. As used herein, the term “improvements” shall include, without limitation, all plumbing, lighting, electrical, heating, cooling and ventilating fixtures and equipment, and all Alterations (as said term is defined in Section 9.3 hereof) whether or not permitted under said Section 9.3. All alterations, including the Alterations, improvements and additions, temporary or permanent, made in or upon the Leased Premises by Tenant, or made by Landlord on Tenant’s behalf, shall become Landlord’s property immediately upon

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installation thereof and shall remain upon the Leased Premises on any such termination without compensation, allowance or credit to Tenant; provided, however, that Landlord shall have the right to require Tenant to remove any alterations, including the Alterations, and to restore the Leased Premises to their condition prior to the making of any such alterations, repairing any damage occasioned by such removal and restoration, unless Landlord has consented to the installation thereof, in which event no such removal may be required by Landlord. For purposes of this Section 17.1, Tenant’s Work is hereby deemed approved by Landlord. If Landlord requires removal of any alterations and Tenant does not make such removal in accordance with this Section at the time of such termination, or within thirty (30) days after such request, whichever is later, Landlord may remove the same (and repair any damage occasioned thereby), and dispose thereof or, at its election, deliver the same to any other place of business of Tenant or warehouse the same. Tenant shall pay the reasonable costs of such removal, repair, delivery and warehousing to Landlord on demand.

     17.2 Removal of Tenant’s Property.

     Upon the termination of this Lease by lapse of time, Tenant shall remove Tenant’s articles of personal property incident to Tenant’s business (“Trade Fixtures”); provided, however, that Tenant shall repair any damage to the Leased Premises which may result from such removal, and shall restore the Leased Premises to the same condition as prior to the installation thereof. If Tenant does not remove Tenant’s Trade Fixtures from the Leased Premises prior to the expiration or earlier termination of the Lease Term, Landlord, may, at its option, remove the same (and repair any damage occasioned thereby) and dispose thereof or deliver the same to any other place of business of Tenant or warehouse the same, and Tenant shall pay the cost of such removal, repair, delivery and warehousing to Landlord on demand, or Landlord may treat such Trade Fixtures as having been conveyed to Landlord with this Lease as a bill of sale, without further payment or credit by Landlord to Tenant.

     17.3 Holding Over.

     Tenant shall have no right to occupy the Leased Premises or any portion thereof after the expiration of the Lease or after termination of the Lease or of Tenant’s right to possession pursuant to Section 19.2 hereof. In the event Tenant or any party claiming by, through or under Tenant holds over, Landlord may exercise any and all remedies available to it at law or in equity to recover possession of the Leased Premises. For each month or partial month that Tenant or any party claiming by, through or under Tenant remains in occupancy of all or any portion of the Leased Premises after the expiration of the Lease or after termination of the Lease or Tenant’s right to possession, Tenant shall pay monthly rental at a rate equal to 125% of the rate of rent and other charges payable by Tenant hereunder immediately prior to the expiration or other termination of the Lease or of Tenant’s right to possession. The acceptance by Landlord of any lesser sum shall be construed as a payment on account and not in satisfaction of damages for such holding over.

XVIII. ENVIRONMENTAL CONDITIONS

     18.1 “Environmental Condition” Defined.

     As used in this Lease, the phrase “Environmental Condition” shall mean: (a) any adverse condition relating to surface water, ground water, drinking water supply, land, surface or subsurface strata or the ambient air, and includes, without limitation, air, land and water pollutants, noise, vibration, light and odors, or (b) any condition which may result in a claim of liability under the Comprehensive Environment Response Compensation and Liability Act, as amended (“CERCLA”), or the Resource Conservation and Recovery Act (“RCRA”), or any claim of violation of the Clean Air Act, the Clean Water Act, the Toxic Substance Control Act (“TOSCA”), or any claim of liability or of violation under any federal statute hereafter enacted dealing with the protection of the environment or with the health and safety of employees or members of the general public, or under any rule, regulation, permit or plan under any of the foregoing, or under any law, rule or regulation now or hereafter promulgated by the state in which the Leased Premises are located, or any

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political subdivision thereof, relating to such matters (collectively “Environmental Laws”). Landlord hereby represents and warrants to Tenant that there is no Environmental Condition known to Landlord which would prevent the use of the Building by Tenant as office space.

     18.2 Compliance by Tenant.

     Tenant shall, at all times during the Lease term, comply with all Environmental Laws applicable to the Leased Premises and shall not, in the use and occupancy of the Leased Premises, cause or contribute to, or permit or suffer any other party to cause or contribute to any Environmental Condition on or about the Leased Premises. Tenant shall not, however, be responsible for environmental conditions existing prior to Tenant’s possession of the Leased Premises except for Tenant’s acts or omissions that worsen, in any way, said conditions, and only to the extent of the worsening. Landlord shall use its best efforts to cause its predecessor in interest, the United States of America, to be responsible for all monitoring, remediation or other obligations regarding the pre-existing Environmental Conditions which it is to perform. Landlord shall be responsible for all pre-existing Environmental Conditions other than those which the United States of America is to perform. In the event that the United States of America fails to perform as provided above, Landlord agrees that Landlord and not Tenant shall be responsible for said pre-existing Environmental Conditions. Without limiting the generality of the foregoing, Tenant shall not, without the prior written consent of Landlord, receive, keep, maintain or use on or about Leased Premises any substance as to which a filing with a local emergency planning committee, the State Emergency Response Commission or the fire department having jurisdiction over the Leased Premises is required pursuant to ‘311 and/or ‘312 of the Comprehensive Environmental Response, Compensation or Liability Act of 1980, as amended by the Superfund Amendment and Reauthorization Act of 1986 (“SARA”) (which latter Act includes the Emergency Planning and Community Right-To-Know Act of 1986); in the event Tenant makes a filing pursuant to SARA or maintains substances as to which a filing would be required, Tenant shall simultaneously deliver copies thereof to Agent, or notify Agent in writing of the presence of those substances.

     18.3 Environmental Indemnity.

     Tenant shall protect, indemnify and save harmless Landlord, Agent and all of their respective members, directors, officers, employees and agents from and against all liabilities, obligations, claims damages, penalties, causes of action, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) of whatever kind or nature, contingent or otherwise, known or unknown, incurred or imposed, based upon any Environmental Laws or resulting from any Environmental Condition on or about the Leased Premises which occurs due to the acts or omissions of Tenant or the Permitted Parties of Tenant (“Tenant Contamination”). In case any action, suit or proceeding is brought against any of the parties indemnified herein by reason of any Tenant Contamination, Tenant will, at Tenant’s expense, by counsel reasonably approved by Landlord, resist and defend such action, suit or proceeding, or cause the same to be resisted and defended. The obligations of Tenant under this Section 18.3 shall survive the expiration or earlier termination of this Lease, and Tenant shall, notwithstanding a termination of this Lease, continue to pay rent for the Leased Premises in the same amount paid during the last year of the term hereof until such time as all remediation work required to cure such matter has been completed.

     Landlord shall protect, indemnify and save harmless Tenant and all of its respective members, directors, officers, employees and agents from and against all liabilities, obligations, claims damages, penalties, causes of action, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) of whatever kind or nature, contingent or otherwise, known or unknown, incurred or imposed, based upon any Environmental Laws or resulting from any Environmental Condition on or about the Leased Premises which occurs due to the acts or omissions of Landlord or the Permitted Parties of Landlord (“Landlord Contamination”). In case any action, suit or proceeding is brought against any of the parties indemnified herein by reason of any Landlord Contamination, Landlord will, at Landlord’s expense, by counsel reasonably approved by Tenant, resist and defend such action, suit or proceeding, or cause the same to be resisted and defended. During any remediation necessitated of any Landlord Contamination, the rent payable

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hereunder shall be equitably adjusted to the extent of any material adverse interference with Tenant’s use and occupancy of the Leased Premises. The obligations of Landlord under this Section 18.3 shall survive the expiration or earlier termination of this Lease.

     18.4 Testing and Remedial Work.

     Landlord may conduct tests and routine audits on or about the Leased Premises for the purpose of determining the presence of any Environmental Condition. If such tests and/or audits indicate the presence of an Environmental Condition on or about the Leased Premises which occurs due to the acts or omissions of Tenant or its Permitted Parties, Tenant shall, in addition to its other obligations hereunder, reimburse Landlord for the cost of conducting such tests. Without limiting Tenant’s liability under Section 18.3 hereof, in the event of any such Environmental Condition, Tenant shall promptly and at its sole cost and expense, take any and all steps necessary to remedy the same, complying with all provisions of applicable law and with Section 9.3(b) hereof. If Tenant fails to promptly remedy same, then Tenant shall deposit with Landlord an amount sufficient to cause the remediation of same, based upon Landlord’s reasonable estimate of the cost thereof, and upon completion of such work by Landlord, Tenant shall pay to Landlord any shortfall promptly after Landlord bills Tenant therefor, or Landlord shall promptly refund to Tenant any excess deposit, as the case may be. Additionally, pursuant to a deed filed for record on October 17, 1997 as Instrument Number 199710170122033, Recorder’s Office, Franklin County, Ohio (“Deed”), it is the obligation of the United States of America to undertake certain environmental remediation on the Real Estate, which obligation may interfere with Tenant’s use of the Leased Premises. Tenant agrees to make no claim against the United States of America as a result of such interference so long as such remediation is in accordance with the terms of the Deed.

XIX. REMEDIES

     19.1 Defaults.

     Tenant agrees that any one or more of the following events shall be considered events of default as said term is used herein:

(a)	Tenant shall be adjudged an involuntary bankrupt, or a decree or rider approving, as properly filed, a petition or answer filed against Tenant asking reorganization of Tenant under the Federal bankruptcy laws as now or hereafter amended, or under the laws of any state, shall be entered, and any such decree or judgment or order shall not have been vacated or set aside within sixty (60) days from the date of entry or granting thereof; or
(b)	Tenant shall file or admit the jurisdiction of the court and the material allegations contained in any petition in bankruptcy or any petition pursuant to or purporting to be pursuant to the Federal bankruptcy laws as now or hereafter amended, or Tenant shall institute any proceeding or shall give its consent to the institution of any proceedings for any relief of Tenant under any bankruptcy or insolvency laws or any laws relating to the relief of debtors, readjustment of indebtedness, reorganization, arrangements, composition or extension; or
(c)	Tenant shall make any assignment for the benefit of creditors or shall apply for or consent to the appointment of a receiver for Tenant or any of the property of Tenant; or
(d)	The Leased Premises are levied upon by any revenue officer or similar officer on account of the actions of Tenant; or
(e)	A decree or order appointing a receiver of the property of Tenant shall be made and such decree or order shall not have been vacated or set aside within sixty (60) days from the date of entry or granting thereof;
(f)	Tenant shall abandon the Leased Premises during the term hereof; or

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(g)	Tenant shall default in any payment of rent or in any other payment required to be made by Tenant hereunder when due as herein provided (all of which other payments shall be deemed “additional rent” payable hereunder), or shall default under Sections 6.1 or 6.2 hereof, and any such default shall continue for five (5) business days after notice thereof in writing to Tenant; or
(h)	Tenant shall fail to contest the validity of any lien or claimed lien and give security to Landlord to assure payment thereof, or, having commenced to contest the same and having given such security, shall fail to prosecute such contest with diligence, or shall fail to have the same released and satisfy any judgment rendered thereon, and such default continues for ten (10) days after notice thereof in writing to Tenant; or
(i)	Tenant shall default in keeping, observing or performing any of the other covenants or agreements herein contained to be kept, observed and performed by Tenant, and such default shall continue for thirty (30) days after notice thereof in writing to Tenant, provided, however, that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, Tenant shall not be deemed to be in default if it shall commence such cure within such thirty (30) day period and thereafter rectify and cure such default with due diligence; or
(j)	Tenant shall default under any agreement with the Columbus Airport Authority, the Federal Aviation Administration, the Ohio Environmental Protection Agency, or with any other governmental entity with respect to its operation and use of the Leased Premises.
(k)	Tenant shall violate any provision of the Declaration of Restrictions and Easements and such violation shall continue for fifteen (15) days after notice thereof from Landlord to Tenant.

     19.2 Remedies.

     Upon the occurrence of any one or more of such events of default, Landlord may at its election terminate this Lease or terminate Tenant’s right to possession only, without terminating the Lease. Upon termination of the Lease, or upon any termination of Tenant’s right to possession without termination of the Lease, Tenant shall surrender possession and vacate the Leased Premises immediately, and deliver possession thereof to Landlord, and hereby grants to Landlord the full and free right, without demand or notice of any kind to Tenant except as hereinabove expressly provided for, to enter into and upon the Leased Premises in such event with or without process of Law and to repossess the Leased Premises by force, self-help or otherwise without process of law as Landlord’s former estate and to expel or remove Tenant and any other who may be occupying or within the Leased Premises without being deemed in any manner guilty of trespass, eviction, or forcible entry or detainer, without incurring any liability for any damages resulting therefrom and without relinquishing Landlord’s rights to rent or any other right given to Landlord hereunder or by operation of law. Upon termination of the Lease, Landlord shall be entitled to recover as damages all rent and other sums due and payable by Tenant on the date of termination, plus (a) an amount equal to the value of the rent and other sums provided herein to be paid by Tenant for the residue of the stated term hereof, less the fair rental value of the Leased Premises for the residue of the stated term (taking into account the time and expenses necessary to obtain a replacement tenant or tenants, including expenses hereinafter described relating to recovery of the Leased Premises, preparation for reletting and for reletting itself), and (b) the cost of performing any other covenants to be performed by Tenant. If Landlord elects to terminate Tenant’s right to possession only without terminating the Lease, Landlord may, at Landlord’s option, enter into the Leased Premises, remove Tenant’s signs and other evidences of tenancy, and take and hold possession thereof as hereinabove provided, without such entry and possession terminating the Lease or releasing Tenant, in whole or in part, from Tenant’s obligations to pay the rent hereunder for the full term or from any other of its obligations under this Lease. Landlord may relet all or any part of the Leased Premises for such rent and upon such terms as shall be satisfactory to Landlord (including the right to relet the Leased Premises

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for a term greater or lesser than that remaining under the Lease term, and the right to relet the Leased Premises as a part of a larger area, and the right to change the character or use made of the Leased Premises). For the purpose of such reletting, Landlord may decorate or make any repairs, changes, alterations or additions in or to the Leased Premises that may be necessary or convenient. If Landlord does not relet the Leased Premises, notwithstanding good faith efforts to do so, Tenant shall continue to pay to Landlord on demand the monthly rent due hereunder, and other sums provided herein to be paid by Tenant. If the Leased Premises are relet and a sufficient sum shall not be realized from such reletting after paying all of the expenses of such decorations, repairs, changes, alterations, additions, the expenses of such reletting and the collection of the rent accruing therefrom (including, but not by way of limitation, attorneys’ fees and brokers’ commissions), to satisfy the rent and other charges herein provided to be paid for the remainder of the Lease term, Tenant shall pay to Landlord on demand any deficiency and Tenant agrees that Landlord shall use reasonable efforts to mitigate its damages arising out of Tenant’s default; Landlord shall not be deemed to have failed to use such reasonable efforts by reason of the fact that Landlord has leased or sought to lease other vacant premises owned by Landlord, whether on the Real Estate or not, in preference to reletting the Leased Premises, or by reason of the fact that Landlord has sought to relet the Leased Premises at a rental rate higher than that payable by Tenant under the Lease (but not in excess of the then current market rental rate). If Tenant shall default under Section 19.1(i) and if such default cannot with due diligence be cured within said period of thirty (30) days after notice in writing shall have been given to Tenant, and if Tenant promptly commences to eliminate such default, and vigorously pursues such cure to completion thereafter, then Landlord shall not have the right to declare said term ended by reason of such default or to repossess without terminating the Lease so long as Tenant is proceeding diligently and with reasonable dispatch to take all steps and do all work required to cure such default, and does so cure such default, provided, however, that the curing of any default in such manner shall not be construed to limit or restrict the right of Landlord to declare the said term ended or to repossess without terminating the Lease, and to enforce all of its rights and remedies hereunder for any other default not timely cured.

     19.3 Remedies Cumulative.

     No remedy herein or otherwise conferred upon or reserved to Landlord shall be considered to exclude or suspend any other remedy but the same shall be cumulative and shall be in addition to every other remedy given hereunder, or now or hereafter existing at law or in equity or by statute, and every power and remedy given by this Lease to Landlord may be exercised from time to time and so often as occasion may arise or as may be deemed expedient.

     19.4 No Waiver.

     No delay or omission of Landlord to exercise any right or power arising from any default shall impair any such right or power to be construed to be a waiver of any such default or any acquiescence therein. No waiver of any breach of any of the covenants of this Lease shall be construed, taken or held to be a waiver of any other breach, or as a waiver, acquiescence in or consent to any further or succeeding breach of the same covenant. The acceptance by Landlord of any payment of rent or other charges hereunder after the termination by Landlord of this Lease or of Tenant’s right to possession hereunder shall not, in the absence of agreement in writing to the contrary to Landlord, be deemed to restore this Lease or Tenant’s right to possession hereunder, as the case may be, but shall be construed as a payment on account, and not in satisfaction of damages due from Tenant to Landlord.

     19.5 Intentionally Deleted.

     19.6 Delinquent Rent.

     In the event Tenant shall be late in the payment of rent or other charges required to be paid hereunder more than two (2) times in any twelve (12) calendar month period (provided notice of such payment or other monetary default shall have been given to Tenant, but regardless of whether Tenant shall have timely cured any such payment or

26

other defaults of which notice was given), and in addition to the other remedies set forth herein, Tenant shall pay to Landlord, as liquidated damages, ten percent (10%) of such delinquent amount, together with such delinquent amount.

XX. SECURITY DEPOSIT
[INTENTIONALLY DELETED]

XXI. MISCELLANEOUS

     21.1 Intentionally Deleted.

     21.2 Estoppel Certificates.

     Landlord and Tenant shall, at any time and from time to time upon not less than ten (10) days’ prior written request from the other, execute, acknowledge and deliver to the requesting party, in form reasonably satisfactory to the requesting party, a written statement certifying (if true) that Tenant has accepted the Leased Premises, that this Lease is unmodified and in full force and effect (or, if there have been modifications, that the same is in full force and effect as modified and stating the modifications), that the other party is not in default hereunder, the date to which the rental and other charges have been paid in advance, if any, whether Tenant has any rights of setoff or self-help under this Lease, and such other accurate certifications as may reasonably be required by the requesting party or its mortgagee, agreeing to give copies to any mortgagee of all notices required under this Lease and agreeing to afford the requesting party’s mortgagee a reasonable opportunity to cure any default. It is intended that any such statement delivered pursuant to this subsection may be relied upon by any prospective purchaser or mortgagee of the Leased Premises or Real Estate and their respective successors and assigns.

     21.3 Landlord’s and Tenant’s Right to Cure/Landlord Default.

     Landlord may, but shall not be obligated to, cure any default by Tenant (specifically including, but not by way of limitation, Tenant’s failure to obtain insurance, make repairs, or satisfy lien claims); and whenever Landlord so elects, all costs and expenses paid by Landlord in curing such default, including without limitation reasonable attorneys’ fees, shall be so much additional rent due on the next rent date after such payment together with interest (except in the case of said attorneys’ fees) at the highest rate then payable by Tenant in the State of Ohio, or, in the absence of such a maximum rate, at a rate per annum equal to four percent (4%) in excess of the announced prime rate of interest of National City Bank of Columbus, Columbus, Ohio in effect on the date of such advance, from the date of the advance to the date of repayment by Tenant to Landlord.

     Any failure by Landlord to observe or perform any provision, covenant or condition of this Lease to be observed or performed by Landlord, if such failure continues for thirty (30) days after written notice thereof from Tenant to Landlord, shall constitute a default by Landlord under this Lease, provided, however, that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, Landlord shall not be deemed to be in default if it shall commence such cure within such thirty (30) day period and thereafter rectify and cure such default with due diligence.

     Tenant may, but shall not be obligated to, cure any default by Landlord solely with respect to the Leased Premises (specifically including, but not by way of limitation, Landlord’s failure to obtain insurance or make repairs); and whenever Tenant so elects, all reasonable costs and expenses are paid by Tenant in curing such default, including without limitation reasonable attorney’s fees, shall be reimbursed by Landlord to Tenant within thirty (30) days after demand therefor, together with copies of all invoices evidencing such expenditures, together with interest (except in the case of said attorneys’ fees) at the highest rate then payable by Landlord in the State of Ohio, or, in the absence of such a maximum rate, at a rate per annum equal to four percent (4%) in excess of the announced prime rate of interest of National City Bank of Columbus, Columbus, Ohio in effect on the date of such advance, from the date of the advance to the date of repayment by Landlord to Tenant. In the event Landlord fails to reimburse Tenant within such thirty (30) days, Tenant shall have the option to deduct the reasonable cost of the cure from twenty-five

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percent (25%) of the rent and charges otherwise due hereunder. Tenant shall also have any and all rights available under the laws of the state in which the Leased Premises are situated.

     21.4 Amendments Must Be in Writing.

     This document contains the entire agreement between the parties hereto with respect to the subject matter hereof. None of the covenants, terms or conditions of this Lease, to be kept and performed by either party, shall in any manner be altered, waived, modified, changed or abandoned except by a written instrument, duly signed and delivered by both parties hereto.

     21.5 Notices.

     Whenever under this Lease provisions are made for notice of any kind to Landlord, it shall be deemed sufficient notice and sufficient service thereof if such notice to Landlord is in writing, addressed to Landlord at 1798 Frebis Avenue, Columbus, Ohio 43206-0410, or at such address as Landlord may notify Tenant in writing, and deposited in the United States mail by certified mail, return receipt requested, with postage prepaid or Federal Express, Express Mail or such other expedited mail service as normally results in overnight delivery, with a copy of same sent in like manner to (i) President, Real Estate, 1800 Moler Road, Columbus, Ohio 43207, and (ii) Law Department, 1800 Moler Road, Columbus, Ohio 43207. Notice to Tenant shall be sent in like manner to: General Counsel, 4150 East Fifth Avenue, Columbus, Ohio 43219, with a copy to Sr. Vice President — Real Estate, 4150 East Fifth Avenue, Columbus, Ohio 43219. All notices shall be effective upon receipt or refusal of receipt. Either party may change the place for service of notice by notice to the other party.

     21.6 Short Form Lease.

     This Lease shall not be recorded, but the parties agree, at the request of either of them, to execute a Short Form Lease for recording, containing the names of the parties, the legal description and the term of the Lease, similar in form and substance to that attached hereto as Exhibit G.

     21.7 Time of Essence.

     Time is of the essence of this Lease, and all provisions herein relating thereto shall be strictly construed.

     21.8 Relationship of Parties.

     Nothing contained herein shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or of partnership, or of joint venture, by the parties hereto, it being understood and agreed that no provision contained in this Lease or any acts of the parties hereto shall be deemed to create any relationship other than the relationship of Landlord and Tenant.

     21.9 Captions.

     The captions of this Lease are for convenience only and are not to be construed as part of this Lease and shall not be construed as defining or limiting in any way the scope or intent of the provisions hereof.

     21.10 Severability.

     If any term or provision of this Lease shall to any extent be held invalid or unenforceable, the remaining terms and provisions of this Lease shall not be affected thereby, but each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

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     21.11 Law Applicable.

     This Lease shall be construed and enforced in accordance with the laws of the state where the Leased Premises are located.

     21.12 Covenants Binding on Successors.

     All of the covenants, agreements, conditions, and undertakings contained in this Lease shall extend and inure to and be binding upon the heirs, executors, administrators, successors and assigns of the respective parties hereto, the same as if they were in every case specifically named, and wherever in this Lease reference is made to either of the parties hereto, it shall be held to include and apply to, wherever applicable, the heirs, executors, administrators, successors and assigns of such party. Nothing herein contained shall be construed to grant or confer upon any person or persons, firm, corporation or governmental authority, other than the parties hereto, their heirs, executors, administrators, successors and assigns, any right, claim or privilege by virtue of any covenant, agreement, condition or undertaking in this Lease contained.

     21.13 Brokerage.

     Landlord and Tenant each represent to the other that they have not entered into any agreement or incurred any obligation in connection with this transaction which might result in the obligation to pay a brokerage commission. Landlord and Tenant hereby covenant to pay, hold harmless, indemnify and defend the other party from and against any and all costs, expenses or liability for any compensation, commissions and charges claimed by any broker or agent with respect to this Lease or the negotiation thereof on account of the actions of the indemnifying party.

     21.14 Landlord Means Owner.

     The term “Landlord” as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner or owners at the time in question of the fee of the Real Estate, and in the event of any transfer or transfers of the title to such fee, Landlord herein named (and in case of any subsequent transfer or conveyances, the then grantor) shall be automatically freed and relieved, from and after the date of such transfer or conveyance, of all liability as respects the performance of any covenants or obligations on the part of Landlord contained in this Lease thereafter to be performed; provided that any funds in the hands of such Landlord or the then grantor at the time of such transfer, in which Tenant has an interest, shall be turned over to the grantee, and any amount then due and payable to Tenant by Landlord or the then grantor under any provisions of this Lease shall be paid to Tenant.

     21.15 Lender’s Requirements.

     If any mortgagee or committed financier of Landlord should require, as a condition precedent to the closing of any loan or the disbursal of any money under any loan, that this Lease be amended or supplemented in any manner (other than in the description of the Leased Premises, the term, the purpose or the rent or other changes hereunder, or in any other regard as will substantially or materially affect the rights of Tenant under this Lease), Landlord shall give written notice thereof to Tenant, which notice shall be accompanied by a Lease Supplement Agreement embodying such amendments and supplements. Tenant shall, within ten (10) days after the effective date of Landlord’s notice, either consent to such amendments and supplements (which consent shall not be unreasonably withheld) and execute the tendered Lease Supplement Agreement, or deliver to Landlord a written statement of its reason or reasons for refusing to so consent and execute. Failure of Tenant to respond within said ten (10) day period shall be a default under this Lease without further notice.

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     21.16 Signs.

     Tenant shall be responsible for obtaining all permissions, approvals, permits and licenses required or deemed necessary by Tenant relating to the signs desired by Tenant and described below. Landlord shall reasonably cooperate with Tenant’s efforts; provided however, all such cooperation shall be at Tenant’s expense. Tenant shall have the right to alter its exterior and monument signage with Landlord’s consent, which consent shall not be unreasonably withheld, conditioned or delayed.

(a)

Tenant shall have the right to install a sign identifying Tenant on each of the north and east exterior facade of the Leased Premises provided that the same are in compliance with local code and subject to Landlord’s consent, which consent shall not be unreasonably withheld, conditioned or delayed.

(b)

Tenant shall be permitted (provided it is permitted by local code), at its sole cost and expense, to construct, erect and maintain a monument sign near the intersection of Old James Road and Aircenter Drive for Tenant’s identification. In the construction of any such monument sign Tenant shall comply with any and all laws, ordinances, statutes and regulations (including those of the Federal Aviation Administration) relating thereto. If the desired location of Tenant’s monument sign is not within the Leased Premises or on a portion of the Real Estate which is owned by Landlord, then only to the extent that Landlord or an affiliate of Landlord has rights permitting the placement and construction of the monument sign, Landlord shall grant to Tenant or act in good faith to cause to be granted to Tenant, at Tenant’s expense, permission to construct such monument sign. Tenant acknowledges and agrees that there is no representation by Landlord or any guarantee on Landlord’s part that such monument sign will be permitted by local code or by any other municipal or governmental entity having jurisdiction over same.

     21.17 Parking Areas.

     It is understood by and between the parties hereto that parking on the Real Estate, unless as otherwise specifically designated by Landlord as exclusive parking, is allocated to the tenants thereof on an unreserved basis. Tenant, its employees and invitees may use the parking areas identified on the “Tenant Parking Area Plan”, defined below, for Tenant’s use. If Tenant uses parking in excess of that provided for herein, and if such excess use occurs on a regular basis, and if Tenant fails, within thirty (30) days after written notice from Landlord, to reduce its excess use of parking area, then such excess use shall constitute a default under this Lease.

     Prior to the Rent Commencement Date, Landlord shall repave and restripe the parking areas to the immediate north and west of the Leased Premises in accordance with the plan attached hereto as Exhibit E (the “Tenant Parking Area Plan”). Landlord agrees that (i) Tenant shall have the right to use the areas identified on the Tenant Parking Area Plan; (ii) Tenant shall have continuous truck access to the loading dock on the west side of the Leased Premises; (iii) Landlord shall not make any changes to Tenant accessways identified as “Tenant Accessways” on Exhibit E; and (iv) the parking areas to the immediate north and west of the Leased Premises shall have lighting not less than a minimum foot candle level of one (1) foot candle per square foot.

     Landscaping (including plant material, sidewalks and curbing) as depicted on Exhibit E shall be irrigated, all of which shall be at Tenant’s expense to install and thereafter at Landlord’s expense to maintain.

     21.18 Force Majeure.

     In the event either party hereto (the “Delayed Party”) shall be delayed or hindered in or prevented from the performance of any act required under this Lease by reason of strikes, lockouts, labor troubles, inability to procure materials, failure of power, the unforeseen application of restrictive governmental laws or regulations, riots, insurrection,

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war, acts of terrorism or other reason of a like nature not the fault of the Delayed Party in performing work or doing acts required under the terms of this Lease, then performance of such act shall be excused for the period of the delay, and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay, provided that the Delayed Party notified the other party within fifteen (15) days of the Delayed Party being informed of the occurrence of the event causing such delay. The provisions of this section shall not operate to excuse either party from the payment of any monetary sums due under the terms of this Lease.

     21.19 Landlord’s and Tenant’s Expenses.

     Tenant agrees to pay on demand Landlord’s expenses, including reasonable attorneys’ fees, expenses and administrative hearing and court costs incurred either directly or indirectly in enforcing any obligation of Tenant under this Lease, in curing any default by Tenant as provided in Section 19.2 hereof or in connection with appearing, defending or otherwise participating in any action or proceeding arising from the filing, imposition, contesting, discharging or satisfaction of any lien or claim for lien, in defending or otherwise participating in any legal proceedings initiated by or on behalf of Tenant wherein Landlord is not adjudicated to be in default under this Lease, or in connection with any investigation or review of any conditions or documents in the event Tenant requests Landlord’s agreement, approval or consent to any action of Tenant which may be desired by Tenant or required of Tenant hereunder.

     Landlord agrees to pay on demand Tenant’s expenses, including reasonable attorneys’ fees, expenses and administrative hearing and court costs incurred either directly or indirectly in enforcing any obligation of Landlord under this Lease, in curing any default by Landlord in the Leased Premises or in connection with appearing, defending or otherwise participating in any action or proceeding arising from the filing, imposition, contesting, discharging or satisfaction of any lien or claim for lien, in defending or otherwise participating in any legal proceedings initiated by or on behalf of Landlord wherein Tenant is not adjudicated to be in default under this Lease, or in connection with any investigation or review of any conditions or documents in the event Landlord requests Tenant’s agreement, approval or consent to any action of Landlord which may be desired by Landlord or required of Landlord hereunder.

     21.20 Execution of Lease by Landlord.

     The submission of this document for examination and negotiation does not constitute an offer to lease, or a reservation of, or option for, the Leased Premises and this document shall become effective and binding only upon the execution and delivery hereof by Landlord and by Tenant. All negotiations, considerations, representations and understandings between Landlord and Tenant are incorporated herein.

     21.21 Intentionally Deleted.

     21.22 Exculpatory Clause.

     Except with respect to any damages resulting from the gross negligence of Landlord, its agents, or employees, Landlord shall not be liable to Tenant, its agents, employees, or customers for any damages, losses, compensation, accidents, or claims whatsoever. The foregoing notwithstanding, it is expressly understood and agreed that nothing in this Lease contained shall be construed as creating any liability whatsoever against Landlord personally, its members, officers, directors, shareholders or partners, and in particular without limiting the generality of the foregoing, there shall be no personal liability to pay any indebtedness accruing hereunder or to perform any covenant, either express or implied, herein contained, or to keep, preserve or sequester any property of Landlord, and that all personal liability of Landlord of every sort, if any, is hereby expressly waived by Tenant, to the extent permitted by law, and by every person now or hereafter claiming any right or security hereunder; and that so far as the parties hereto are concerned, the owner of any indebtedness or liability accruing hereunder shall look solely to the Leased Premises for the payment thereof.

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     If the Tenant obtains a money judgment against Landlord, any of its officers, directors, shareholders, partners, or their successors or assigns under any provisions of or with respect to this Lease or on account of any matter, condition or circumstance arising out of the relationship of the parties under this Lease, Tenant’s occupancy of the building or Landlord’s ownership of the Leased Premises, Tenant shall be entitled to have execution upon any such final, unappealable judgment only upon Landlord’s fee simple estate in the Real Estate and the rents and profits thereof, and not out of any other assets of Landlord, or any of its members, officers, directors, shareholders or partners, or their successor or assigns; and Landlord shall be entitled to have any such judgment so qualified as to constitute a lien only on said fee simple estate and the rents and profits thereof.

     21.23 Airport Access.

     Tenant acknowledges that it shall have no right of access to Port Columbus International Airport by virtue of this Lease. Any such access shall be pursuant to the terms of a separate agreement between Tenant and the Columbus Airport Authority. In the event Tenant enters into such an agreement with the Columbus Airport Authority, Tenant agrees to abide by all of the terms and conditions thereof, and Tenant shall indemnify Landlord in the event of any liability to Landlord on account of Tenant’s non-compliance therewith.

     21.24 Intentionally Deleted.

     21.25 Consent.

     Whenever this Lease requires the consent of either party hereto, such consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that this provision shall not apply where a specific standard is otherwise set forth for granting or withholding consent in this Lease.

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EX-10.4

Exhibit 10.4

TRAILER PARKING LOT LEASE AGREEMENT

LANDLORD:	4300 East Fifth Avenue LLC
	1798 Frebis Avenue
	Columbus, Ohio 43206-0410
TENANT:	DSW Inc.
	4150 East Fifth Avenue
	Columbus, Ohio 43219
LEASED PREMISES:	220 Trailer Parking Spaces
	Columbus International Aircenter Columbus, Ohio

TABLE OF CONTENTS

		Page
1.	DESCRIPTION OF LEASED PREMISES		1
2.	TERM		1
3.	DELIVERY		2
4.	RENT		2
5.	USE		2
6.	TENANT’S WORK		2
7.	TENANT’S DUTY TO MAINTAIN		3
8.	UTILITIES		3
9.	ALTERATIONS		3
10.	ASSIGNMENT AND SUBLEASES		3
11.	ENCUMBERING TITLE/MECHANICS’ LIENS		4
12.	REAL ESTATE TAXES		4
13.	ALLOCATION OF RISKS		4
14.	INSURANCE		5
15.	WAIVER OF SUBROGATION		6
16.	DISCLAIMER OF LIABILITY		6
17.	LIABILITY FOR DAMAGES		7
18.	DAMAGE OR DESTRUCTION OF PREMISES		7
19.	COMDEMNATION		7
20.	SIGNAGE		7
21.	ENVIRONMENTAL CONDITION:		8
22.	DEFAULT		10
23.	REMEDIES		11
24.	DEFAULT OF LANDLORD		11
25.	SUBORDINATION		12
26.	SURRENDER		12
27.	QUIET ENJOYMENT		12
28.	HOLDING OVER		12
29.	AMENDMENT MUST BE IN WRITING		12
30.	NOTICES		13
31.	LAW APPLICABLE		13
32.	COVENANTS BINDING ON SUCCESSORS		13
33.	BROKERAGE		13
34.	FORCE MAJEURE		13
35.	EXCULPATION OF LANDLORD		14
36.	AIRPORT ACCESS		14
37.	CONSENT		14
38.	SHORT FORM LEASE		14
39.	TIME OF ESSENCE		14
40.	RELATIONSHIP OF THE PARTIES		14
41.	CAPTIONS		15
42.	SEVERABILITY		15
43.	LANDLORD MEANS OWNER		15
44.	LANDLORD’S AND TENANT’S EXPENSES		15
45.	EXECUTION OF LEASE BY LANDLORD		16
46.	EXHIBITS		16

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TRAILER PARKING LOT LEASE AGREEMENT

     This Trailer Parking Lot Lease Agreement (the “Lease”) is made this 30th day of November, 2006 (the “Effective Date”) by and between 4300 East Fifth Avenue LLC, an Ohio limited liability company (hereinafter referred to as “Landlord”), with offices located at 1798 Frebis Avenue, Columbus, Ohio 43206-0410 and DSW Inc., an Ohio corporation (hereinafter referred to as “Tenant”), with offices located at 4150 East Fifth Avenue, Columbus, Ohio 43219, who hereby mutually covenant and agree as follows:

     1. DESCRIPTION OF LEASED PREMISES: Landlord, for and in consideration of the covenants and agreements herein contained on the part of Tenant to be performed, hereby leases to Tenant, and Tenant hereby lets from Landlord, premises consisting of approximately 10.06 acres and which will contain approximately 220 trailer parking spaces located in the Columbus International Aircenter. The Columbus International Aircenter comprises approximately 2,819,647 square feet of leasable space on 171 acres, more or less, of real property in Franklin County, Ohio, which real property is illustrated on Exhibit A attached hereto and made a part hereof. The portion of the Columbus International Aircenter owned in fee simple by Landlord shall for purposes of this Lease be referred to as the “Real Estate”. The demised premises are outlined on the site plan attached hereto as Exhibit B and made a part hereof (the “Site Plan”). Said demised premises, together with all improvements now located or to be located on said premises during the term of this Lease, shall collectively be referred to herein as the “Leased Premises”. The Leased Premises will be adjacent to a trailer parking area comprising approximately 6.36 acres and which will contain approximately 144 trailer parking spaces which area is included within the Real Estate and is as shown on the Site Plan and hereinafter referred to as the “Adjacent Trailer Lot”. Tenant acknowledges and agrees that the Adjacent Trailer Lot may be used by other tenants of the Real Estate and for purposes not limited to trailer parking and hereby consents to such use, provided that any such use will not inhibit or interfere with Tenant’s access to or from, use and/or occupancy of the Leased Premises as contemplated herein.

     2. TERM: The term of this Lease shall be co-terminus with that certain Lease Agreement by and between Tenant (successor-in-interest to Shonac Corporation, an Ohio corporation) and 4300 Venture 6729 LLC, a Delaware limited liability company (successor-in-interest to 4300 East Fifth Avenue LLC, an Ohio limited liability company) dated March 22, 2000 as amended by that certain Modification Letter dated June 1, 2001 and as further amended by that certain First Amendment to Industrial Space Lease (collectively referred to as the “Industrial Space Lease”) such that any and all of Tenant’s rights to extend the term of the Industrial Space Lease shall be applicable to extend the term of this Lease including any and all option rights provided therein. In the event the Industrial Space Lease terminates for any reason, the term of this Lease shall terminate simultaneous with same and all parties not in default shall be released from any and all obligations or liabilities hereunder (subject to the reimbursement obligations of Landlord set forth below). Notwithstanding the foregoing, Tenant shall have the right, in Tenant’s sole discretion to terminate this Lease for any reason by written notice to Landlord, which termination shall be effective on the date stated in such notice and all parties not in default shall be released from any and all obligations or liabilities hereunder (subject to the reimbursement obligations of Landlord below). In the event Landlord or Tenant terminates the Lease pursuant to this Section 2 and provided that Tenant is not in default beyond any applicable notice or cure period, Landlord shall reimburse Tenant, for the unamortized value of the unreimbursed leasehold improvements

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included in Tenant’s Work within fifteen (15) days after receipt of a request and invoice from Tenant itemizing such amount.

     3. DELIVERY: Landlord agrees to deliver possession of the Leased Premises to Tenant in its existing condition on the Effective Date.

     4. RENT: Tenant shall not be obligated to pay annual rent in connection with its use and occupancy of the Leased Premises.

     5. USE: Tenant shall be entitled to the exclusive use of the Leased Premises. The Leased Premises shall be used for the parking of Tenant’s trailers and for no other purpose, without the written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.

     6. TENANT’S WORK: Tenant agrees to make the improvements to the Leased Premises and the Adjacent Trailer Lot described on the scope of work attached hereto and made a part hereof as Exhibit C (the “Tenant’s Work”). The cost and expense of such renovation shall be paid as follows:

     a. Tenant shall pay for any and all costs and expenses resulting from the renovation to the Leased Premises and Adjacent Trailer Lot which are not “Infrastructure Costs,” which are hereby defined as drainage, water retention (basins) and grading work further identified and designated on Exhibit C.

     b. Landlord shall pay thirty-six percent (36%) and Tenant shall pay sixty-four percent (64%) of any and all costs and expenses resulting from the renovation to the Leased Premises and Adjacent Trailer Lot which are Infrastructure Costs (the “Tenant Reimbursement”).

     The Tenant’s Work shall be done in a good and workmanlike manner and shall comply with applicable federal, state and local laws, rules, regulations and code requirements pertaining thereto, and Tenant shall be responsible for obtaining any and all consents required in connection thereto. In connection with Tenant’s Work, Landlord hereby grants to Tenant a temporary license providing access to and permission to perform the portion of Tenant’s Work on the Adjacent Trailer Lot, which license shall terminate upon the completion of Tenant’s Work and Landlord’s reimbursement of the Tenant Reimbursement as set forth below. Notwithstanding the foregoing plans for renovation, Tenant accepts the Leased Premises in its existing condition and agrees that it shall be responsible for maintaining and repairing same (as set forth below) and complying with all applicable laws, regulations and ordinances pertaining to its use and occupancy of same, all at Tenant’s expense.

     The Tenant Reimbursement shall be paid by Landlord to Tenant upon completion of Tenant’s Work and within ten (10) days of receipt of an invoice from Tenant requesting payment with a copy of Tenant’s contractor’s invoice and Tenant providing to Landlord a lien waiver from Tenant’s general contractor. In the event Landlord does not timely pay the Tenant Reimbursement to Tenant, Landlord shall pay to Tenant interest on such unpaid amounts at a rate of interest equal to four percent (4%) over the prime rate in effect from time to time as established by National City Bank, Columbus, Ohio.

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     Notwithstanding anything to the contrary contained in this Lease, the Tenant improvements shall, at all times during the term of this Lease and upon the expiration or earlier termination of this Lease, be the property of Landlord. Tenant shall not acquire any interest, equitable or otherwise, in any Tenant improvements, except the leasehold described herein. Tenant agrees that the Tenant Reimbursement shall be used for improvements to the Leased Premises, which shall be affixed to the Real Estate and the improvements constructed thereon, and shall not be used for the purchase of Tenant’s personal property.

     7. TENANT’S DUTY TO MAINTAIN: It is agreed that Tenant shall, during the term of this Lease, be responsible at its sole cost and expense, for maintaining, repairing and replacing the Leased Premises, including but not limited to, resurfacing, resealing, restriping and repairing any portion of the Leased Premises.

     8. UTILITIES: As part of Tenant’s Work, Tenant shall install lighting for the Leased Premises as set forth on Exhibit C. Upon completion of Tenant’s Work and installation of such lighting, Tenant shall be responsible for electric service to the Leased Premises on account of such lighting. In the event the utility provider or its representative for electric service to the Leased Premises shall invoice Tenant for its usage directly then Tenant shall pay any and all amounts due directly to such utility provider. In the event the utility provider or its representative for electric service to the Leased Premises shall invoice Landlord for the total utility usage applicable to the Leased Premises and the Adjacent Trailer Lot (or any other portion of the Real Estate), then Tenant shall pay to Landlord Tenant’s proportionate share of same. Simultaneous with the billing to Tenant of its utility charges for the Leased Premises, Landlord shall provide Tenant with details regarding the calculations used by Landlord in computing Tenant’s proportionate share of same. Tenant shall have the right at all times during the term hereof to submeter such electric service at Tenant’s expense. Landlord shall not be liable for the quality or quantity of electric service to the Leased Premises and Landlord shall not be liable in damages or otherwise for any failure or interruption of any such electric service being furnished to the Leased Premises unless due to the negligence or willful act or omission of the Landlord, its agents, contractors, or employees.

     9. ALTERATIONS: Tenant shall make and shall be entitled to make without Landlord’s prior consent, any and all additions, improvements and alterations in the Leased Premises required on account of Tenant’s particular use of the Leased Premises and as required by any governmental authority.

     10. ASSIGNMENT AND SUBLEASES: Tenant agrees not to assign or sublease the Leased Premises, any part thereof, or any right or privilege connected therewith or to allow any other person, except Tenant’s agents and employees to occupy the Leased Premises or any part thereof, without first obtaining Landlord’s written consent, which consent shall not be unreasonably withheld. One consent by Landlord shall not be consent to subsequent assignment, sublease or occupation by other persons. Any unauthorized assignment or sublease by Tenant shall be void and shall terminate this Lease at Landlord’s option. Tenant’s interest in the Lease is not assignable by operation of law, nor is any assignment of its interest herein, without Landlord’s written consent, which consent shall not be unreasonably withheld. Notwithstanding anything herein to the contrary, Tenant shall be permitted without Landlord’s consent to sublease or assign all or part of the Leased Premises to a subsidiary, parent or affiliate entity; provided that Tenant shall remain fully liable hereunder.

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     11. ENCUMBERING TITLE/MECHANICS’ LIENS: Tenant shall not do any act which shall in any way encumber the title of Landlord in and to the Leased Premises or the Real Estate, nor shall the interest or estate of Landlord in the Leased Premises or the Real Estate be in any way subject to any claim by way of lien or encumbrance, whether by operation of law or by virtue of any express or implied contract by Tenant. Any claim to, or lien upon, the Leased Premises or the Real Estate arising from any act or omission of Tenant shall accrue only against the leasehold estate of Tenant and shall be subject and subordinate to the paramount title and rights of Landlord in and to the Leased Premises and the Real Estate. Tenant shall have the option to record a Notice of Commencement in substance and form approved in advance by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed.

     Tenant shall not permit the Leased Premises or the Real Estate to become subject to any mechanics’, laborers’ or materialmen’s lien on account of labor or material furnished to Tenant or claimed to have been furnished to Tenant in connection with work of any character performed or claimed to have been performed on the Leased Premises by, or at the direction or sufferance of Tenant. In the event a mechanic’s lien is filed against the Leased Premises or the Real Estate due to work performed by or on behalf of Tenant, Tenant shall discharge, cause to be discharged or bond off same within twenty (20) days from Tenant’s receipt of written evidence of the filing thereof. If Tenant fails to discharge or bond off said lien, Landlord may bond off or pay same without inquiring into the validity or merits of such lien, and all sums so advanced shall be paid on demand by Tenant. Tenant hereby agrees to indemnify and hold Landlord harmless for any liability, cost, damage and expense occasioned by any mechanic’s lien filed against the Leased Premises or the Real Estate on account of labor or material furnished to Tenant or claimed to have been furnished to Tenant in connection with the Leased Premises.

     12. REAL ESTATE TAXES: The responsibility for the payment of any and all real estate taxes and/or assessments applicable to the Leased Premises and the Adjacent Trailer Lot during the term of the Lease shall be upon Landlord. Tenant shall reimburse to Landlord, on a semi-annual basis, Tenant’s proportionate share of real estate taxes and/or assessments which have accrued during the term hereof, within thirty (30) days after Tenant’s receipt of a statement from Landlord setting forth the calculation of Tenant’s proportionate share accompanied by the tax bill on which such statement is rendered.

     13. ALLOCATION OF RISKS: The parties desire, to the extent permitted by law, to allocate certain risks of personal injury, bodily injury or property damage, and risks of loss of real or personal property by reason of fire, explosion or other casualty, and to provide for the responsibility for insuring those risks. It is the intent of the parties that, to the extent any event is required by the terms hereof to be covered by insurance, any loss, cost, damage or expense, including, without limitation, the expense of defense against claims or suits, be covered by insurance, without regard to the fault of Tenant, its officers, employees, agents, contractors and customers (“Tenant Protected Parties”), and without regard to the fault of Landlord, Agent, their respective members, officers, directors, employees, agents and contractors (“Landlord Protected Parties”). As between Landlord Protected Parties and Tenant Protected Parties, such risks are allocated as follows:

     a. Tenant shall bear the risk of personal injury, bodily injury or death, or damage to property, or to third persons, occasioned by events occurring within, on or about

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the Leased Premises, regardless of the party at fault, if any.

     b. Landlord shall bear the risk of personal injury, bodily injury or death or damage to property, or to third persons, occasioned by events occurring on or about the Real Estate, other than the Leased Premises, regardless of the party at fault, if any.

     c. Tenant shall bear the risk of damage to contents, trade fixtures, machinery, equipment, furniture, furnishings and property of Tenant, Tenant’s Protected Parties and property in Tenant’s control, care and custody in the Leased Premises.

     Notwithstanding the foregoing, provided the party required to carry insurance hereof does not default in its obligation to do so, if and to the extent that any loss occasioned exceeds the coverage or amount of insurance actually carried, or results from an event not required to be insured against and not actually insured against, the party at fault shall pay the amount not actually covered under these respective policies.

     14. INSURANCE: Tenant shall procure and maintain policies of insurance, at its own cost and expense, insuring:

     a. The Landlord Protected Parties as any “additional insured”, and Landlord’s mortgagee, if any, of which Tenant is given written notice, and Tenant Protected Parties, from all claims, demands or actions made by or on behalf of any person or persons, firm, corporation or entity and arising from, related to or connected with the Leased Premises, Tenant’s use thereof or operations therein for bodily injury to or personal injury to or death of any person, or more than one (1) person, or for damage to property in an amount of not less than One Million Dollars ($1,000,000.00) per occurrence and not less than Two Million Dollars ($2,000,000.00) policy aggregate limit. Said insurance shall be written on an “occurrence” basis and not on a “claims made” basis, and such liability policies shall include products and completed operations liability insurance. If at any time during the term of this Lease, Tenant owns or rents more than one location, the policy shall contain an endorsement to the effect that the aggregate limit in the policy shall apply separately to each location owned or rented by Tenant. Landlord shall have the right, exercisable by giving written notice thereof to Tenant, to require Tenant to increase such limit to coverage limites generally required by industrial landlords in central Ohio if, in Landlord’s reasonable judgment, the amount thereof is insufficient to protect the Landlord Protected Parties and Tenant Protected Parties from judgments which might result from such claims, demands or actions. Tenant shall cause its liability insurance to include contractual liability coverage for the indemnity set forth above and in Section 16 below.

     b. Tenant Protected Parties from all worker’s compensation claims, including employer’s liability with minimum limits of $500,000.00 per occurrence.

     c. For the benefit of itself and Landlord’s Protected Parties and Landlord’s mortgagee, if any, excess and/or umbrella liability insurance of such types and with limits not less than Twenty Five Million Dollars ($25,000,000.00), insuring against liability for damage or loss to property, and against liability for personal injury, bodily injury or death, arising from acts or omissions of Tenant, its agents, employees or invitees.

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     Tenant agrees to provide Landlord with notice of any self-insurance programs and Landlord shall have the right to approve any such programs. Any insurance deductibles or self-insurance amounts shall be the responsibility of Tenant, and any deductibles or self-insurance amounts in excess of $250,000 shall be approved in advance by Landlord.

     Landlord shall procure and maintain policies of insurance insuring:

     a. Commercial general liability (including products and completed operations) or other policy forms which would provide similar coverages on behalf of Landlord and Landlord’s Protected Parties for those claims of bodily injury or property damage arising from the Real Estate and the operations of the Landlord and Landlord’s Protected Parties. Said liability insurance policy shall be written on an “occurrence” basis with a combined single limit of One Million Dollars ($1,000,000.00) per occurrence and not less than Two Million Dollars ($2,000,000.00) policy aggregate limit, and One Million Dollars ($1,000,000.00) limit for products and completed operations.

     b. Umbrella liability insurance providing a minimum of Fifty Million Dollars ($50,000,000.00) limit naming the above commercial general liability policy as an underlying policy.

     15. WAIVER OF SUBROGATION: Landlord and Tenant, and all parties claiming under Landlord and Tenant, mutually release and discharge the other from all claims and liabilities arising from or caused by any casualty or hazard covered or required hereunder to be covered in whole or in part by insurance coverage required to be maintained by the terms of this Lease on the Leased Premises, the Real Estate or activities conducted thereon or therewith, and waive any right of subrogation which might otherwise exist in or accrue to any person on account thereof. All policies of insurance required to be maintained by the parties hereunder shall contain waiver of subrogation provisions in accordance with the foregoing so long as the same are available.

     16. DISCLAIMER OF LIABILITY: To the extent of the insurance carried by Tenant or required by the terms of this Lease to be carried by Tenant, Tenant hereby disclaims, and releases Landlord and Landlord’s mortgagee, if any, from any and all liability, whether in contract or tort (including strict liability and negligence), for any loss, damage, or injury of any nature whatsoever sustained by Tenant, during the term of this Lease. The parties hereby agree that under no circumstances shall Landlord be liable for indirect, consequential, special, or exemplary damages, whether in contract or tort (including strict liability and negligence), such as, but not limited to damage related to the leasing of the Leased Premises under this Lease. Tenant shall also hold Landlord and Landlord Protected Parties harmless from and against any and all liability, fines, or other charges incurred as a result of alleged violations of airport security regulations (FAR parts 107 and 139) by Tenant and Tenant Protected Parties.

     To the extent of the insurance carried by Landlord or required by the terms of this Lease to be carried by Landlord, Landlord hereby disclaims, and releases Tenant from any and all liability, whether in contract or tort (including strict liability and negligence), for any loss, damage, or injury of any nature whatsoever sustained by Landlord and Landlord’s Protected Parties, during the term of this Lease. The parties hereby agree that under no circumstances shall Tenant be liable for

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indirect, consequential, special, or exemplary damages, whether in contract or tort (including strict liability and negligence), such as, but not limited to damage related to this Lease. Landlord shall also hold Tenant and Tenant’s Protected Parties harmless from and against any and all liability, fines, or other charges incurred as a result of alleged violations of airport security regulations (FAR parts 107 and 139) by Landlord and Landlord’s Protected Parties.

     17. LIABILITY FOR DAMAGES: Tenant shall indemnify, defend and save harmless Landlord from all liability for injuries and damages to persons or property sustained on the Leased Premises or because of Tenant’s occupancy thereof. Tenant, as party in possession, shall be responsible for injuries, damages, or losses occurring on the Leased Premises from any cause whatsoever. However, it is agreed and understood that Tenant shall not indemnify and save Landlord harmless from liability or injuries or damages to persons or property sustained on the Leased Premises by the reason of the occupancy of the Adjacent Trailer Lot by another tenant or occupant thereof.

     Landlord shall indemnify, defend and save harmless Tenant from all liability for injuries and damages to persons or property sustained on the Real Estate. Landlord, as the party with fee simple ownership, shall be responsible for injuries, damages, or losses occurring on the Real Estate from any cause whatsoever. However, it is agreed and understood that Landlord shall not indemnify and save Tenant harmless from liability or injuries or damages to persons or property sustained on the Leased Premises.

     18. DAMAGE OR DESTRUCTION OF PREMISES: If at any time during the term of the Lease, the Leased Premises is destroyed or damaged so that it is unusable by Tenant by fire, Act of G-d, or other casualty, then Tenant shall have the right to elect whether or not the Leased Premises will be repaired or restored for occupancy under the terms hereof. Tenant shall exercise such election by giving to Landlord, notice in writing of Tenant’s election, at any time within thirty (30) days from the time of such injury or destruction. If Tenant shall elect to repair or restore the Leased Premises, it shall do so at its sole cost and expense, except that the cost associated with any such repairs that are considered Infrastructure Costs shall be paid for and reimbursed in accordance with Section 6 hereof, provided that Tenant is not in default beyond any applicable notice or cure period. If Tenant elects not to repair or restore the Leased Premises in accordance with the foregoing, than Landlord may terminate the Lease.

     19. COMDEMNATION: If any material portion of the Leased Premises shall be taken or condemned by any competent authority for any public, quasi-public use or purpose, then in that event, Tenant may terminate this Lease, at its sole discretion, on the date when the possession of the part or interest so taken shall be required for such use or purpose or at Tenant’s option, on a date thirty (30) days or less prior to such taking. Any and all award, compensation or damages in connection with such taking, shall be paid to and be the sole property of Landlord except that Tenant shall be entitled to the unamortized value of the unreimbursed leasehold improvements as itemized or included in Tenant’s Work.

     20. SIGNAGE: Tenant desires to construct a monument sign near the intersection of Stelzer Road and Aircenter Drive, which sign shall replace the existing “Aircenter” monument sign. Tenant’s replacement monument sign shall combine the Aircenter identification with Tenant’s identification, subject to Landlord’s reasonable approval of the location and design of

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such replacement monument sign. Tenant shall be responsible for obtaining all consents, approvals, permits, variances and/or licenses deemed necessary by Tenant relating to the replacement monument sign. Landlord shall reasonably cooperate with Tenant’s efforts; provided however, all such cooperation shall be at Tenant’s expense. In the event such replacement monument sign is constructed, it shall at all times during the term of this Lease and thereafter, remain the property of Landlord and Landlord shall be responsible, at its sole cost and expense, for any and all repair and maintenance obligations relating to same. Tenant agrees that upon removal of the existing monument sign, Tenant shall deliver such existing monument sign to Landlord at a location reasonably designated by Landlord. Landlord and Tenant acknowledge and agree that there is no representation by Landlord or any guarantee on Landlord’s part that any such replacement sign will be permitted or that Tenant will be able to obtain Tenant representation on same. Notwithstanding the foregoing, to the extent that Landlord has rights permitting the use, location and/or existence of the existing monument sign, Landlord shall grant to Tenant or act in good faith to cause to be granted to Tenant permission to use and/or replace such monument sign.

     21. ENVIRONMENTAL CONDITION:

     a. “Environmental Condition” Defined. As used in this Lease, the phrase “Environmental Condition” shall mean: (a) any adverse condition in violation of Environmental Laws (defined below) relating to surface water, ground water, drinking water supply, land, surface or subsurface strata or the ambient air, and includes, without limitation, air, land and water pollutants, noise, vibration, light and odors, or (b) any condition which may result in (i) a claim of liability under the Comprehensive Environment Response Compensation and Liability Act, as amended (“CERCLA”), or the Resource Conservation and Recovery Act (“RCRA”), or any claim of violation of the Clean Air Act, the Clean Water Act, the Toxic Substance Control Act (“TOSCA”), or (ii) any claim of liability or of violation under any federal statute hereafter enacted dealing with the protection of the environment or with the health and safety of employees or members of the general public, or under any rule, regulation, permit or plan under any of the foregoing, or under any law, rule or regulation now or hereafter promulgated by the state in which the Leased Premises are located, or any political subdivision thereof, relating to such matters (collectively “Environmental Laws”). Landlord hereby represents and warrants to Tenant that there is no Environmental Condition known to Landlord which would prevent the use of the Leased Premises by Tenant as a trailer parking lot.

     b. Compliance by Tenant. Tenant shall, at all times during the Lease term, comply with all Environmental Laws applicable to Tenant’s use and occupancy of the Leased Premises and shall not, in the use and occupancy of the Leased Premises, cause or contribute to, or permit or suffer any other party to cause or contribute to any Environmental Condition on or about the Leased Premises. Tenant shall not, however, be responsible for Environmental Conditions existing prior to Tenant’s possession of the Leased Premises except for Tenant’s acts or omissions that worsen, in any way, said conditions, and only to the extent of the worsening. Landlord shall use its best efforts to cause its predecessor in interest, the United States of America, to be responsible for all monitoring, remediation or other obligations regarding the pre-existing Environmental Conditions which it is to perform. Landlord shall be responsible for all pre-existing

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Environmental Conditions other than those which the United States of America is to perform. In the event that the United States of America fails to perform as provided above, Landlord agrees that Landlord and not Tenant shall be responsible for said pre-existing Environmental Conditions. Without limiting the generality of the foregoing, Tenant shall not, without the prior written consent of Landlord, receive, keep, maintain or use on or about Leased Premises any substance as to which a filing with a local emergency planning committee, the State Emergency Response Commission or the fire department having jurisdiction over the Leased Premises is required pursuant to ‘311 and/or ‘312 of the Comprehensive Environmental Response, Compensation or Liability Act of 1980, as amended by the Superfund Amendment and Reauthorization Act of 1986 (“SARA”) (which latter Act includes the Emergency Planning and Community Right-To-Know Act of 1986); in the event Tenant makes a filing pursuant to SARA or maintains substances as to which a filing would be required, Tenant shall simultaneously deliver copies thereof to Agent, or notify Agent in writing of the presence of those substances.

     c. Environmental Indemnity. Tenant shall protect, indemnify and save harmless Landlord and all of its respective members, directors, officers, employees and agents from and against all liabilities, obligations, claims damages, penalties, causes of action, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) of whatever kind or nature, contingent or otherwise, known or unknown, incurred or imposed, based upon any Environmental Laws or resulting from any Environmental Condition on or about the Leased Premises which occurs due to the acts or omissions of Tenant and all of its respective members, directors, officers, employees and agents for whom it is responsible (“Tenant Contamination”). In case any action, suit or proceeding is brought against any of the parties indemnified herein by reason of any Tenant Contamination, Tenant will, at Tenant’s expense, by counsel reasonably approved by Landlord, resist and defend such action, suit or proceeding, or cause the same to be resisted and defended. The obligations of Tenant under this Section 21 shall survive the expiration or earlier termination of this Lease.

     d. Landlord shall protect, indemnify and save harmless Tenant and all of its respective members, directors, officers, employees and agents from and against all liabilities, obligations, claims damages, penalties, causes of action, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) of whatever kind or nature, contingent or otherwise, known or unknown, incurred or imposed, based upon any Environmental Laws or resulting from any Environmental Condition on or about the Leased Premises which occurs due to the acts or omissions of Landlord and all of its respective members, directors, officers, employees and agents for whom it is responsible (“Landlord Contamination”). In case any action, suit or proceeding is brought against any of the parties indemnified herein by reason of any Landlord Contamination, Landlord will, at Landlord’s expense, by counsel reasonably approved by Tenant, resist and defend such action, suit or proceeding, or cause the same to be resisted and defended. The obligations of Landlord under this Section 21 shall survive the expiration or earlier termination of this Lease.

     e. Testing and Remedial Work. Landlord may conduct tests and routine audits on or about the Leased Premises for the purpose of determining the presence of any Environmental Condition. If such tests and/or audits indicate the presence of an

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Environmental Condition on or about the Leased Premises which occurs due to the acts or omissions of Tenant or its respective members, directors, officers, employees and agents for whom it is responsible, Tenant shall, in addition to its other obligations hereunder, reimburse Landlord for the cost of conducting such tests. Without limiting Tenant’s liability hereof, in the event of any such Environmental Condition, Tenant shall promptly and at its sole cost and expense, take any and all steps necessary to remedy the same, complying with all provisions of applicable law hereof. Additionally, pursuant to a deed filed for record on October 17, 1997 as Instrument Number 199710170122033, Recorder’s Office, Franklin County, Ohio (“Deed”), it is the obligation of the United States of America to undertake certain environmental remediation on the Real Estate, which obligation may interfere with Tenant’s use of the Leased Premises. Tenant agrees to make no claim against the United States of America as a result of such interference so long as such remediation is in accordance with the terms of the Deed.

     22. DEFAULT: Tenant agrees that any one or more of the following events shall be considered events of default as said term is used herein:

     a. Tenant shall be adjudged an involuntary bankrupt, or a decree approving, as properly filed, a petition or answer filed against Tenant asking reorganization of Tenant under the Federal bankruptcy laws as now or hereafter amended, or under the laws of any state, shall be entered, and any such decree or judgment or order shall not have been vacated or set aside within sixty (60) days from the date of entry or granting thereof; or

     b. Tenant shall file or admit the jurisdiction of the court and the material allegations contained in any petition in bankruptcy or any petition pursuant to or purporting to be pursuant to the Federal bankruptcy laws as now or hereafter amended, or Tenant shall institute any proceeding or shall give its consent to the institution of any proceedings for any relief of Tenant under any bankruptcy or insolvency laws or any laws relating to the relief of debtors, readjustment of indebtedness, reorganization, arrangements, composition or extension; or

     c. Tenant shall make any assignment for the benefit of creditors or shall apply for or consent to the appointment of a receiver for Tenant or any of the property of Tenant; or

     d. The Leased Premises are levied upon by any revenue officer or similar officer on account of the actions of Tenant; or

     e. A decree or order appointing a receiver of the property of Tenant shall be made and such decree or order shall not have been vacated or set aside within sixty (60) days from the date of entry or granting thereof;

     f. Tenant shall abandon the Leased Premises during the term hereof; or

     g. Tenant shall default in keeping, observing or performing any of the other covenants or agreements herein contained to be kept, observed and performed by Tenant, and such default shall continue for thirty (30) days after notice thereof in writing to Tenant, provided, however, that if the nature of such default is such that the same cannot reasonably

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be cured within a thirty (30) day period, Tenant shall not be deemed to be in default if it shall commence such cure within such thirty (30) day period and thereafter rectify and cure such default with due diligence; or

     h. Tenant shall default under the Industrial Space Lease.

     23. REMEDIES: Upon the occurrence of any one or more of such events of default, Landlord may at its election terminate this Lease or terminate Tenant’s right to possession only, without terminating the Lease. Upon termination of the Lease, or upon any termination of Tenant’s right to possession without termination of the Lease, Tenant shall surrender possession and vacate the Leased Premises immediately, and deliver possession thereof to Landlord, and hereby grants to Landlord the full and free right, without demand or notice of any kind to Tenant except as hereinabove expressly provided for, to enter into and upon the Leased Premises in such event with or without process of Law and to repossess the Leased Premises by force, self-help or otherwise without process of law as Landlord’s former estate and to expel or remove Tenant and any other who may be occupying or within the Leased Premises without being deemed in any manner guilty of trespass, eviction, or forcible entry or detainer, without incurring any liability for any damages resulting therefrom the cost of performing any other covenants. Landlord may relet all or any part of the Leased Premises for such rent and upon such terms as shall be satisfactory to Landlord. Notwithstanding the foregoing, in the event that Landlord terminates this Lease or Tenant’s right to possession of the Leased Premises due to a Tenant default under Section 22(h), Landlord shall reimburse Tenant, for the unamortized value of the unreimbursed leasehold improvements included in Tenant’s Work within fifteen (15) days after receipt of a request and invoice from Tenant itemizing such amount provided that any such default is cured.

     In addition to the foregoing, Landlord agrees that if Tenant is in default under this Lease due to a default under the Industrial Space Lease, the Landlord’s remedies exercised under this Lease shall be the same as the Landlord’s remedies exercised under the Industrial Space Lease; i.e. Landlord shall not declare Tenant in default under the Industrial Space Lease but permit Tenant to subsequently remain in possession of the premises described therein and simultaneously declare Tenant in default under this Lease due to the default under the Industrial Space Lease and elect to terminate Tenant’s right to possession of the Leased Premises. The parties agree that the intent of the foregoing, is that the purpose of Tenant’s leasing of the Leased Premises is to support its operations and activities at the premises described in the Industrial Space Lease so that if Tenant is operating and in possession of the premises described in the Industrial Space Lease it shall be entitled to use the trailer parking spaces which comprise the Leased Premises. Notwithstanding the foregoing, in the event that Tenant’s right to operate and possess the premises described in the Industrial Space Lease is terminated then Tenant’s right to operate and possess the Leased Premises shall terminate simultaneous with same.

     24. DEFAULT OF LANDLORD: Any failure by Landlord to observe or perform any provision, covenant or condition of this Lease to be observed or performed by Landlord, if such failure continues for thirty (30) days after written notice thereof from Tenant to Landlord, shall constitute a default by Landlord under this Lease, provided, however, that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, Landlord shall not be deemed to be in default if it shall commence such cure within such thirty (30) day period and thereafter rectify and cure such default with due diligence.

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     Tenant may, but shall not be obligated to, cure any default by Landlord solely with respect to the Leased Premises (specifically including, but not by way of limitation, Landlord’s failure to pay the real estate taxes applicable to the Leased Premises); and whenever Tenant so elects, all reasonable costs and expenses are paid by Tenant in curing such default, including without limitation reasonable attorney’s fees, shall be reimbursed by Landlord to Tenant within thirty (30) days after demand therefor, together with copies of all invoices evidencing such expenditures, together with interest (except in the case of said attorneys’ fees) at the highest rate then payable by Landlord in the State of Ohio, or, in the absence of such a maximum rate, at a rate per annum equal to four percent (4%) in excess of the announced prime rate of interest of National City Bank of Columbus, Columbus, Ohio in effect on the date of such advance, from the date of the advance to the date of repayment by Landlord to Tenant. In the event Landlord fails to reimburse Tenant, Tenant shall also have any and all rights available under the laws of the state in which the Leased Premises are situated.

     25. SUBORDINATION: This Lease is subject and subordinate to the lien of any deed of trust, mortgage or mortgages now placed upon Landlord’s interest in the Real Estate. Landlord reserves the right to subject and subordinate this Lease at all times to the lien of any deed of trust, mortgage or mortgages hereafter placed upon Landlord’s interest in the Leased Premises; provided, however, that no default by Landlord, under any deed of trust, mortgage or mortgages, shall affect Tenant’s rights under this Lease, so long as Tenant performs the obligations imposed upon it hereunder and is not in default hereunder, and Tenant attorns to the holder of such deed of trust or mortgage, its assignee or the purchaser at any foreclosure sale. Tenant shall execute a commercially reasonable instrument presented to Tenant for the purpose of effecting such subordination. It is a condition, however, to the subordination and lien provisions herein provided, that Landlord shall procure from any such mortgagee an agreement in writing, which shall be delivered to Tenant or contained in the aforesaid subordination agreement, providing in substance that so long as Tenant shall faithfully discharge the obligations on its part to be kept and performed under the terms of this Lease and is not in default under the terms hereof, its tenancy will not be disturbed nor this Lease affected by any default under such mortgage.

     26. SURRENDER: Upon the termination of this Lease, whether by forfeiture, lapse of time or otherwise, or upon termination of Tenant’s right to possession of the Leased Premises, Tenant will at once surrender and deliver up the Leased Premises in good condition and repair, reasonable wear and tear and loss by fire or other casualty excepted.

     27. QUIET ENJOYMENT: So long as Tenant is not in default under the covenants and agreements of this Lease, Tenant’s quiet and peaceable enjoyment of the Leased Premises shall not be disturbed or interfered with by Landlord or by any person claiming by, through or under Landlord.

     28. HOLDING OVER: Tenant shall have no right to occupy the Leased Premises or any portion thereof after the expiration of the Lease or after termination of the Lease or of Tenant’s right to possession.

     29. AMENDMENT MUST BE IN WRITING: This document contains the entire agreement between the parties hereto with respect to the subject matter hereof. None of the covenants, terms or conditions of this Lease, to be kept and performed by either party, shall in any

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manner be altered, waived, modified, changed or abandoned except by a written instrument, duly signed and delivered by both parties hereto.

     30. NOTICES: Whenever under this Lease provisions are made for notice of any kind to Landlord, it shall be deemed sufficient notice and sufficient service thereof if such notice to Landlord is in writing, addressed to Landlord at 1798 Frebis Avenue, Columbus, Ohio 43206-0410, or at such address as Landlord may notify Tenant in writing, and deposited in the United States mail by certified mail, return receipt requested, with postage prepaid or Federal Express, Express Mail or such other expedited mail service as normally results in overnight delivery, with a copy of same sent in like manner to (i) President, Real Estate, 1800 Moler Road, Columbus, Ohio 43207, and (ii) Law Department, 1800 Moler Road, Columbus, Ohio 43207. Notice to Tenant shall be sent in like manner to: General Counsel, 4150 East Fifth Avenue, Columbus, Ohio 43219, with a copy to Sr. Vice President — Real Estate, 4150 East Fifth Avenue, Columbus, Ohio 43219. All notices shall be effective upon receipt or refusal of receipt. Either party may change the place for service of notice by notice to the other party.

     31. LAW APPLICABLE: This Lease shall be construed and enforced in accordance with the laws of the state where the Leased Premises are located.

     32. COVENANTS BINDING ON SUCCESSORS: All of the covenants, agreements, conditions, and undertakings contained in this Lease shall extend and inure to and be binding upon the heirs, executors, administrators, successors and assigns of the respective parties hereto, the same as if they were in every case specifically named, and wherever in this Lease reference is made to either of the parties hereto, it shall be held to include and apply to, wherever applicable, the heirs, executors, administrators, successors and assigns of such party. Nothing herein contained shall be construed to grant or confer upon any person or persons, firm, corporation or governmental authority, other than the parties hereto, their heirs, executors, administrators, successors and assigns, any right, claim or privilege by virtue of any covenant, agreement, condition or undertaking in this Lease contained.

     33. BROKERAGE: Landlord and Tenant each represent to the other that they have not entered into any agreement or incurred any obligation in connection with this transaction which might result in the obligation to pay a brokerage commission. Landlord and Tenant hereby covenant to pay, hold harmless, indemnify and defend the other party from and against any and all costs, expenses or liability for any compensation, commissions and charges claimed by any broker or agent with respect to this Lease or the negotiation thereof on account of the actions of the indemnifying party.

     34. FORCE MAJEURE: In the event either party hereto (the “Delayed Party”) shall be delayed or hindered in or prevented from the performance of any act required under this Lease by reason of strikes, lockouts, labor troubles, inability to procure materials, failure of power, the unforeseen application of restrictive governmental laws or regulations, riots, insurrection, war, acts of terrorism or other reason of a like nature not the fault of the Delayed Party in performing work or doing acts required under the terms of this Lease, then performance of such act shall be excused for the period of the delay, and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay, provided that the Delayed Party notified the other party within fifteen (15) days of the Delayed Party being informed of the occurrence of the event

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causing such delay. The provisions of this section shall not operate to excuse either party from the payment of any monetary sums due under the terms of this Lease.

     35. EXCULPATION OF LANDLORD: It is expressly understood and agreed that nothing in this Lease contained shall be construed as creating any liability whatsoever against Landlord personally, its members, officers, directors, shareholders or partners, and in particular without limiting the generality of the foregoing, there shall be no personal liability to pay any indebtedness accruing hereunder or to perform any covenant, either express or implied, herein contained, or to keep, preserve or sequester any property of Landlord, and that all personal liability of Landlord of every sort, if any, is hereby expressly waived by Tenant, to the extent permitted by law, and by every person now or hereafter claiming any right or security hereunder; and that so far as the parties hereto are concerned, the owner of any indebtedness or liability accruing hereunder shall look solely to the Leased Premises for the payment thereof.

     If the Tenant obtains a money judgment against Landlord, any of its officers, directors, shareholders, partners, or their successors or assigns under any provisions of or with respect to this Lease or on account of any matter, condition or circumstance arising out of the relationship of the parties under this Lease, Tenant’s occupancy of the building or Landlord’s ownership of the Leased Premises, Tenant shall be entitled to have execution upon any such final, unappealable judgment only upon Landlord’s fee simple estate in the Real Estate and the rents and profits thereof, and not out of any other assets of Landlord, or any of its members, officers, directors, shareholders or partners, or their successor or assigns; and Landlord shall be entitled to have any such judgment so qualified as to constitute a lien only on said fee simple estate and the rents and profits thereof.

     36. AIRPORT ACCESS: Tenant acknowledges that it shall have no right of access to Port Columbus International Airport by virtue of this Lease. Any such access shall be pursuant to the terms of a separate agreement between Tenant and the Columbus Airport Authority, if any. In the event Tenant enters into such an agreement with the Columbus Airport Authority, Tenant agrees to abide by all of the terms and conditions thereof, and Tenant shall indemnify Landlord in the event of any liability to Landlord on account of Tenant’s non-compliance therewith.

     37. CONSENT: Whenever this Lease requires the consent of either party hereto, such consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that this provision shall not apply where a specific standard is otherwise set forth for granting or withholding consent in this Lease.

     38. SHORT FORM LEASE. This Lease shall not be recorded, but the parties agree, at the request of either of them, to execute a Short Form Lease for recording, containing the names of the parties, the legal description and the term of the Lease.

     39. TIME OF ESSENCE. Time is of the essence of this Lease, and all provisions herein relating thereto shall be strictly construed.

     40. RELATIONSHIP OF THE PARTIES. Nothing contained herein shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or of partnership, or of joint venture, by the parties hereto, it being understood and

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agreed that no provision contained in this Lease or any acts of the parties hereto shall be deemed to create any relationship other than the relationship of Landlord and Tenant.

     41. CAPTIONS. The captions of this Lease are for convenience only and are not to be construed as part of this Lease and shall not be construed as defining or limiting in any way the scope or intent of the provisions hereof.

     42. SEVERABILITY. If any term or provision of this Lease shall to any extent be held invalid or unenforceable, the remaining terms and provisions of this Lease shall not be affected thereby, but each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

     43. LANDLORD MEANS OWNER. The term “Landlord” as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner or owners at the time in question of the fee of the Real Estate, and in the event of any transfer or transfers of the title to such fee, Landlord herein named (and in case of any subsequent transfer or conveyances, the then grantor) shall be automatically freed and relieved, from and after the date of such transfer or conveyance, of all liability as respects the performance of any covenants or obligations on the part of Landlord contained in this Lease thereafter to be performed; provided that any funds in the hands of such Landlord or the then grantor at the time of such transfer, in which Tenant has an interest, shall be turned over to the grantee, any amount then due and payable to Tenant by Landlord or the then grantor under any provisions of this Lease shall be paid to Tenant and such successor Landlord or the then grantor shall be obligated to assume Landlord’s obligations under this Lease.

     44. LANDLORD’S AND TENANT’S EXPENSES. Tenant agrees to pay on demand Landlord’s expenses, including reasonable attorneys’ fees, expenses and administrative hearing and court costs incurred either directly or indirectly in enforcing any obligation of Tenant under this Lease, in curing any default by Tenant or in connection with appearing, defending or otherwise participating in any action or proceeding arising from the filing, imposition, contesting, discharging or satisfaction of any lien or claim for lien, in defending or otherwise participating in any legal proceedings initiated by or on behalf of Tenant wherein Landlord is not adjudicated to be in default under this Lease, or in connection with any investigation or review of any conditions or documents in the event Tenant requests Landlord’s agreement, approval or consent to any action of Tenant which may be desired by Tenant or required of Tenant hereunder.

     Landlord agrees to pay on demand Tenant’s expenses, including reasonable attorneys’ fees, expenses and administrative hearing and court costs incurred either directly or indirectly in enforcing any obligation of Landlord under this Lease, in curing any default by Landlord in the Leased Premises or in connection with appearing, defending or otherwise participating in any action or proceeding arising from the filing, imposition, contesting, discharging or satisfaction of any lien or claim for lien, in defending or otherwise participating in any legal proceedings initiated by or on behalf of Landlord wherein Tenant is not adjudicated to be in default under this Lease, or in connection with any investigation or review of any conditions or documents in the event Landlord requests Tenant’s agreement, approval or consent to any action of Landlord which may be desired by Landlord or required of Landlord hereunder.

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     45. EXECUTION OF LEASE BY LANDLORD. The submission of this document for examination and negotiation does not constitute an offer to lease, or a reservation of, or option for, the Leased Premises and this document shall become effective and binding only upon the execution and delivery hereof by Landlord and by Tenant. All negotiations, considerations, representations and understandings between Landlord and Tenant are incorporated herein.

     46. EXHIBITS.

A.	Illustration of Columbus International Aircenter
B.	Site Plan of Leased Premises
C.	Tenant’s Work

(SIGNATURES ON FOLLOWING PAGE)

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EX-10.5

Exhibit 10.5

FIRST AMENDMENT TO INDUSTRIAL SPACE LEASE

     THIS FIRST AMENDMENT TO INDUSTRIAL SPACE LEASE (this “First Amendment”) is dated as of November 30, 2006, by and between 4300 Venture 6729 LLC, a Delaware limited liability company (“Landlord”) and DSW Inc., an Ohio corporation (“Tenant”).

RECITALS:

     A. By that certain Lease Agreement dated as of March 22, 2000 (the “Original Lease”) as amended by that certain Modification Letter dated June 1, 2001 (the “Modification Letter”) (collectively hereinafter referred to as the “Lease”), between 4300 East Fifth Avenue LLC, an Ohio limited liability company (“4300 East Fifth Avenue”) and Shonac Corporation, an Ohio corporation (“Shonac”), 4300 East Fifth Avenue leased to Shonac and Shonac leased from 4300 East Fifth Avenue that certain space consisting of approximately 707,092 square feet of area in Building No. 6 (the “Premises”) of the Columbus International Aircenter, which Premises are commonly known as 4150 East Fifth Avenue, Columbus, Ohio 43219.

     B. Shonac changed its name to DSW Inc., an Ohio corporation.

     C. 4300 East Fifth Avenue assigned all of its rights, title and interest in and to the Lease to 4300 Venture 6729 LLC, a Delaware limited liability company.

     D. Landlord and Tenant desire to extend the term of the Lease and to amend the Lease in certain other particulars, as more specifically set forth herein.

     E. The Lease and this First Amendment are hereinafter collectively referred to as the “Lease”. Unless otherwise provided herein, all capitalized words and terms in this First Amendment shall have the same meanings ascribed to such words and terms as in the Lease.

     NOW THEREFORE, for and in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

     1. Term. Pursuant to Section 1.2 of the Original Lease, Tenant hereby elects to exercise the First Option Term of the Lease upon the same terms, covenants and agreement as are set forth in the Lease including, without limitation the Annual Rent set forth in Section 1.5(b)(ii) of the Lease and second paragraph of the Modification Letter, so as to extend its current term until December 31, 2021. In consideration of the foregoing, Landlord grants to Tenant the right to exercise a Fourth Option Term (Lease Years 31-35) upon the same terms, covenants and agreement as are set forth in the Lease, except that the Annual Rent for such Fourth Option Term shall be as follows:

          Annual Rent: $3,181,914.00 Monthly Installments: $265,159.50 ($4.50/s.f.)

     2. Trailer Parking.

     Upon execution of this First Amendment and until such time permanent trailer parking spaces are available to Tenant, Landlord shall cooperate in good faith with Tenant to secure temporary trailer parking spaces for Tenant’s use, which may include other property leased by Landlord or its affiliates. Any and all costs associated with Landlord’s cooperation or Tenant’s use of any such temporary trailer parking spaces shall be at Tenant’s expense.

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     Landlord and Tenant agree that Section 21.17 of the Original Lease shall be amended by deleting the second, third and fourth sentences of the second paragraph which relate to Tenant’s right to use the parking lot located across Fifth Avenue.

     3. Parking Renovation and Signage.

     Tenant is constructing extensive improvements to property immediately adjacent to the Premises that is owned by an affiliate of Landlord. As a part of Tenant’s construction, Tenant shall have the right to renovate and improve the portion of the Premises comprising the parking area located to the immediate west of the Premises, subject to Landlord’s reasonable approval of Tenant’s plans and specifications for such work. Tenant’s renovations and improvements may include work to the parking areas, landscaping and the construction and placement of a monument sign. All such improvements shall be at Tenant’s sole cost and expense. Landlord shall reasonably cooperate with Tenant in Tenant’s efforts and in obtaining any approvals or consents desired by Tenant; provided however, all cooperation shall be at Tenant’s cost.

     4. Expansion Area. Landlord and Tenant agree that Section 21.24 of the Original Lease shall be deleted in its entirety.

     5. This First Amendment contains the entire agreement between the parties with respect to the subject matter herein contained and all preliminary negotiations with respect to the subject matter herein contained are merged into and incorporated in this First Amendment and all prior documents and correspondence between the parties with respect to the subject matter herein contained are superseded and of no force or effect, other than the Lease.

     6. Except as specifically set forth in this First Amendment, all provisions of the Lease shall remain in full force and effect and are not modified by this First Amendment, and the parties hereby ratify and confirm each and every provision thereof.

     7. This First Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(Signatures on following page)

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EX-10.6

Exhibit 10.6

TRANSFER AND ASSIGNMENT AGREEMENT

          TRANSFER AND ASSIGNMENT AGREEMENT (this “Agreement”), dated as of October 29, 2006, by and among Brand Technology Services LLC, an Ohio limited liability company (“Buyer”) and wholly owned subsidiary of DSW Inc. (“DSW”), and Retail Ventures, Inc., an Ohio corporation (“RVI”), Retail Ventures Services, Inc., an Ohio corporation (“RVSI”) and wholly owned subsidiary of Retail Ventures Inc., Filene’s Basement, Inc., a Delaware corporation (“FB”) and wholly owned subsidiary of RVI, and Value City Department Stores LLC, an Ohio limited liability company (“VC”) and a wholly owned subsidiary of RVI (RVI, RVSI, FB, and VC, collectively, “Seller” or “RVI Entities”).

          WHEREAS, Sellers currently provide certain services on behalf of or for DSW and its subsidiaries, including information technology services, pursuant to a Shared Services Agreement entered into effective as of January 30, 2005, by and between DSW and RVI (the “Shared Services Agreement”);

          WHEREAS, Sellers desire to transfer certain information technology agreements to Buyer and Buyer desires to assume such information technology contracts;

          WHEREAS, Sellers desire to employ certain employees of Sellers currently engaged in providing information technology services;

          WHEREAS, following the consummation of the transactions contemplated by this Agreement, Buyer desires to provide certain information technology services on behalf of or for RVI and its subsidiaries;

          WHEREAS, the RVI Entities have the expectation that Buyer will make investments into information technology services and to more efficiently operate such assets, such that the RVI Entities and Buyer will receive enhanced information technology services; and

          WHEREAS, capitalized terms used herein without definition have the respective meanings assigned thereto in Section 22;

          NOW, THEREFORE, Buyer, Seller and RVI agree as follows:

1. ASSIGNMENT OF CONTRACTS; ASSUMPTION OF LIABILITIES

     1.1. Assignment of Contracts; Assumption of Liabilities

          As of the Effective Date, Buyer shall assume only the liabilities and obligations of Seller set forth below:

     (a) The debts, liabilities and obligations of Seller to be performed after the Effective Date under the contracts, agreements, arrangements and understandings set forth and

described on Schedule 2 or entered into after the date hereof (other than in each case debts, liabilities and obligations on account of breaches or violations by Seller that occurred on or prior to the Effective Date).

          (b) The executive employment agreements listed on Schedule 1.1(b), including the debts, liabilities and obligations of Seller to be performed after the Effective Date under such executive employment agreements.

          (c) The debts, liabilities and obligations incurred after the Effective Date by Buyer with respect to the New Buyer IT Employees.

          Except as specified in this Section 1, Buyer shall not assume or be deemed to assume any debts, liabilities or obligations of Seller, including, without limitation, any debts, liabilities or obligations of Seller for acts or omissions of Seller on or before the Effective Date with respect to the Information Technology Assets or the New Buyer IT Employees.

     1.2. Restricted Contracts

          The parties understand and agree that, without limiting any representation, warranty, condition, covenant or indemnification contained in this Agreement, if, as of the Closing, Seller shall not have effectively obtained any or all consents of any third party(ies) to the assignment of the contracts, agreements, arrangements and understandings set forth and described on Schedule 2 or entered into after the date hereof as provided in the definition of Information Technology Assets (each a “Restricted Contract”) contemplated to be assigned to Buyer hereunder, in respect of which such third party’s consent to assign is required in order to preserve the value of such Restricted Contract for Seller or otherwise, then (a) the assignment by Seller and the assumption by Buyer of such Restricted Contract shall not become effective at Closing or thereafter until Seller shall have obtained the requisite consent to assign (which Seller shall use commercially reasonable efforts to obtain, together with the cooperation of Buyer), (b) such assignment and assumption shall become effective as aforesaid subsequent to Closing pursuant to such documentation as shall be reasonably acceptable to Buyer and Seller, and (c) Seller shall not take nor permit any action which would impair the full force and effect of such Restricted Contract, or otherwise cause or permit the modification, amendment, or termination of such Restricted Contract (except insofar as consented to by Buyer, which consent shall not be unreasonably withheld or delayed) until the effective assignment thereof as aforesaid. The parties understand and agree that Seller, subsequent to the Closing, shall not be entitled to any of the rights and privileges under any Restricted Contract, all of which shall accrue to the benefit of Buyer, and Seller shall be deemed to hold such Restricted Contract in trust for Buyer. To the extent that Buyer is able to receive the economic rights and privileges under any Restricted Contract, Buyer shall be responsible for the liabilities assumed by Buyer pursuant to Section 1.3 arising under such Restricted Contract.

2. REPRESENTATIONS AND WARRANTIES BY RVI ENTITIES

          Sellers, jointly and severally, represent and warrant to Buyer as follows:

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     2.1. Organization and Standing

          (a) RVSI is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio. RVSI has all the requisite corporate power and authority to enter into and perform the terms of this Agreement, the other Seller Documents to which it is a party and the transactions contemplated hereby and thereby.

          (b) RVI is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio. RVI has all the requisite corporate power and authority to enter into and perform the terms of this Agreement, the other Seller Documents to which it is a party and the transactions contemplated hereby and thereby.

          (c) FB is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. FB has all the requisite corporate power and authority to enter into and perform the terms of this Agreement, the other Seller Documents to which it is a party and the transactions contemplated hereby and thereby.

          (d) VC is an Ohio limited liability company duly organized and in good standing under the laws of the State of Ohio. VC has all the requisite limited liability company power and authority to enter into and perform the terms of this Agreement, the other Seller Documents to which it is a party and the transactions contemplated hereby and thereby.

     2.2. Authorization

          (a) The execution, delivery and performance of this Agreement and of the other Seller Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary actions of Seller (none of which actions has been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes, and upon execution and delivery of each other Seller Document to which it is a party will constitute, a valid and binding agreement and obligation of Seller, enforceable in accordance with their respective terms. Except as specified in Section 2.3, the execution, delivery and performance by Seller of this Agreement and of the other Seller Documents to which it is a party will not require the consent, approval or authorization of any person, entity or governmental authority.

          (b) The execution, delivery and performance of this Agreement and of the other Seller Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary actions of RVI (none of which actions has been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes, and upon execution and delivery of each other Seller Document to which it is a party will constitute, a valid and binding agreement and obligation of RVI, enforceable in accordance with their respective terms. Except as specified in Section 2.3, the execution, delivery and performance by RVI of this Agreement and of the other Seller Documents to which it is a party will not require the consent, approval or authorization of any person, entity or governmental authority.

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     2.3. Conflicts and Consents

     Except as set forth on Schedule 2.3, the execution and delivery of this Agreement and the other Seller Documents to which it is a party, the fulfillment of and the compliance with the respective terms and provisions of each, and the consummation of the transactions described in each, do not and will not conflict with or violate any law, ordinance, regulation, order, award, judgment, injunction or decree applicable to Seller, or conflict with or result in a breach of or constitute a default under any of the terms, conditions or provisions of Seller’s articles of incorporation or bylaws, or any contract, agreement, lease, commitment, or understanding to which Seller is a party or by which Seller is bound.

     2.4 Contracts and Agreements

     Schedule 2 contains a complete list, as of the date hereof, of each contract, agreement, arrangement and understanding that will be assigned by Sellers to Buyer (collectively, the “IT Contracts”). With the exception of so-called “shrink-wrap” and electronic on-screen end-user licenses for mass-market computer software, all of the IT Contracts are fully and validly executed by Seller and/or its affiliates and have been executed by the other parties thereto, and all of the IT Contracts are in full force and effect, constitute legal, valid and binding obligations of the respective parties thereto, and are enforceable in accordance with their respective terms. Seller has performed in all material respects all of the obligations required to be performed by it to date under each such IT Contract. No event has occurred which, with or without notice or the passage of time or both, constitutes or would constitute a material breach or default by Seller or any other party under any IT Contract or permit any other party to accelerate, terminate, cancel or modify such IT Contract. There have been no threatened cancellations by any third person of any IT Contract.

     2.5 Disclosure

     No representation or warranty or other statement made by Seller or RVI in this Agreement, the Schedules or otherwise in connection with the transactions contemplated by this Agreement contains any untrue statement or omits to state a material fact necessary to make any of them, in light of the circumstances in which it was made, not misleading.

3. REPRESENTATIONS AND WARRANTIES BY BUYER

          Buyer represents and warrants to the RVI Entities as follows:

     3.1. Organization and Standing

          Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Ohio. Buyer has all the requisite limited liability company power and authority to enter into and perform the terms of this Agreement and the other Buyer Documents and to carry out the transactions contemplated hereby and thereby.

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     3.2. Authorization

          The execution, delivery and performance of this Agreement and of the other Buyer Documents, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary actions of Buyer (none of which actions has been modified or rescinded and all of which actions are in full force and effect). This Agreement constitutes, and upon execution and delivery each such other Buyer Document will constitute, a valid and binding agreement and obligation of Buyer, enforceable in accordance with their respective terms. The execution, delivery and performance by Buyer of this Agreement and the other Buyer Documents will not require the consent, approval or authorization of any person, entity or governmental authority.

     3.3. Conflicts and Consents

          The execution and delivery of this Agreement and the other Buyer Documents, the fulfillment of and the compliance with the respective terms and provisions of each, and the consummation of the transactions described in each, do not and will not conflict with or violate any law, ordinance, regulation, order, award, judgment, injunction or decree applicable to Buyer, or conflict with or result in a breach of or constitute a default under any of the terms, conditions or provisions of Buyer’s organizational documents, or any contract, agreement, lease, commitment, or understanding to which Buyer is a party or by which Buyer is bound.

4. COVENANTS OF SELLER

Seller covenants and agrees with Buyer that Seller willuse commercially reasonable efforts to obtain all third party consents required to assign to Buyer the Information Technology Assets set forth on Schedule 2.3. Buyer shall cooperate with Seller with respect to obtaining all such third party consents. All costs incurred or relating to the obtaining of all such third party consents or otherwise arising from the assignment of the contracts, agreements, arrangements and understandings set forth and described on Schedule 2 or entered into after the date hereof as contemplated by this Agreement shall be considered an expense and treated as a shared expensed pursuant to the terms of the Shared Services Agreement.

5. CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE

          The obligations of Buyer to proceed with the Closing are subject to the satisfaction (or waiver by Buyer) at or prior to the Closing of each of the following conditions:

     5.1. Representations and Covenants

          The representations and warranties of the RVI Entities made in this Agreement or in any other Seller Document shall have been true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date as though such representations and warranties were made on and as of the Closing Date; and the RVI Entities shall have performed and complied in all material respects with all covenants and agreements

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required by this Agreement or any other Seller Document to be performed or complied with by the RVI Entities prior to the Closing.

     5.2. Consents

          The parties shall have obtained prior to the Closing all consents necessary to effect valid assignments to Buyer of all of the Information Technology Assets specified in Schedule 2.3 and all other consents necessary to consummate the transactions contemplated hereby.

     5.3. Delivery by the RVI Entities

          The RVI Entities shall have delivered to Buyer all consents, agreements and instruments required to be delivered to Buyer pursuant to Section 7.2.

     5.4. Legal Proceedings

          No action or proceeding by or before any governmental authority shall have been instituted or threatened (and not subsequently dismissed, settled or otherwise terminated) that might restrain, prohibit or invalidate the transactions contemplated by this Agreement or any other Seller Document, other than an action or proceeding instituted or threatened by Buyer or DSW.

6. CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE

          The obligations of Seller to proceed with the Closing are subject to the satisfaction (or waiver by Seller) at or prior to the Closing of each of the following conditions:

     6.1. Representations and Covenants

          The representations and warranties of Buyer made in this Agreement or in any other Buyer Document shall have been true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date as though such representations and warranties were made on and as of the Closing Date; and Buyer shall have performed and complied in all material respects with all covenants and agreements required to be performed or complied with by Buyer prior to the Closing.

     6.2. Delivery by Buyer

          Buyer shall have delivered to the RVI Entities all agreements and instruments required to be delivered to the RVI Entities pursuant to Section 7.3.2.

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     6.3. Legal Proceedings

          No action or proceeding by or before any governmental authority shall have been instituted or threatened (and not subsequently dismissed, settled or otherwise terminated) that might restrain, prohibit or invalidate the transactions contemplated by this Agreement or any other Buyer Document, other than an action or proceeding instituted or threatened by Seller or RVI.

7. THE CLOSING

     7.1. Closing

          The Closing hereunder shall be held on the date hereof (the “Closing Date”).

     7.2. Delivery by the RVI Entities

          At or before the Closing, the RVI Entities shall deliver to Buyer:

          7.2.1. Agreements and Instruments

          The following documents, dated as of the Closing Date, in form satisfactory to Buyer:

               (i) the Assumption Agreement; and

               (ii) such other instruments or documents as Buyer may reasonably request in order to effect and document the transactions contemplated hereby.

          7.2.2. Consents

          Copies of all consents listed on Schedule 2.3.

          7.2.3. Amendment No. 1 to Shared Services Agreement

          Executed Amendment No. 1 to Shared Services Agreement.

          7.2.4. Release of Encumbrances

          Evidence of release of Encumbrances set forth in Schedule 2.4(a) in form and substance reasonably acceptable to Buyer.

     7.3. Delivery by Buyer

          At or before the Closing, Buyer shall deliver to the RVI Entities:

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          7.3.1. Agreements and Instruments

          The following agreements and instruments:

               (i) Amendment No. 1 to Shared Services Agreement;

               (ii) the Assumption Agreement; and

               (iii) such other instruments or documents as Seller may reasonably request in order to effect and document the transactions contemplated hereby.

8. SURVIVAL; INDEMNIFICATION

     8.1. Survival of RVI Entities’ Representations

          The representations and warranties made by the RVI Entities in this Agreement or pursuant hereto shall survive the Closing Date for a period of one (1) year.

     8.2. Indemnification by Seller

          Subject to the conditions and provisions of Section 8.5, Seller agrees to indemnify, defend and hold harmless Buyer and its affiliates from and against any and all demands, claims, complaints, actions or causes of action, suits, proceedings, investigations, arbitrations, assessments, losses, damages, liabilities, costs and expenses, including, but not limited to, interest, penalties and reasonable attorneys’ fees and disbursements, asserted against, imposed upon or incurred by Buyer and/or its affiliates, directly or indirectly, by reason of or resulting from (a) any debt, liability or obligation of or claim against Seller (whether absolute, accrued, contingent or otherwise and whether a contractual, tax or any other type of liability or obligation or claim) not expressly assumed by Buyer pursuant to Section 1.3, (b) any misrepresentation or breach of the representations and warranties of the RVI Entities contained in or made pursuant to this Agreement or any other Seller Document, or (c) any noncompliance by the RVI Entities with any covenants, agreements or undertakings of Seller or RVI contained in or made pursuant to this Agreement or any other Seller Document.

     8.3. Survival of Buyer’s Representations

          The representations and warranties made by Buyer in this Agreement or pursuant hereto shall survive the Closing Date for a period of one (1) year.

     8.4. Indemnification by Buyer

          Subject to the conditions and provisions of Section 8.5, Buyer agrees to indemnify, defend and hold harmless Seller and its affiliates from and against any and all demands, claims, complaints, actions or causes of action, suits, proceedings, investigations, arbitrations, assessments, losses, damages, liabilities, costs and expenses, including, but not

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limited to, interest, penalties and reasonable attorneys’ fees and disbursements, asserted against, imposed upon or incurred by Seller and/or its affiliates, directly or indirectly, by reason of or resulting from (a) any debt, liability or obligation of or claim against Seller (whether absolute, accrued, contingent or otherwise and whether a contractual, tax or any other type of liability or obligation or claim) expressly assumed by Buyer pursuant to Section 1.3, (b) any misrepresentation or breach of the representations and warranties of Buyer contained in or made pursuant to this Agreement or any other Buyer Document, or (c) any noncompliance by Buyer with any covenants, agreements or undertakings of Buyer contained in or made pursuant to this Agreement or any other Buyer Document.

8.5. Conditions of Indemnification

          The obligations and liabilities of Seller and Buyer hereunder with respect to their respective indemnities pursuant to this Section 8, resulting from any claim or other assertion of liability by third parties (hereinafter called collectively, “Claims”), shall be subject to the following terms and conditions:

          (a) The party seeking indemnification (the “Indemnified Party”) must give the other party or parties, as the case may be (the “Indemnifying Party”), notice of any such Claim promptly after the Indemnified Party receives notice thereof; provided, however, that failure to give such notice promptly shall not relieve the Indemnifying Party of its obligations under this Section 8 except to the extent that the Indemnifying Party is prejudiced thereby.

          (b) The Indemnifying Party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense of such Claim.

          (c) In the event that the Indemnifying Party shall elect not to undertake such defense, or within a reasonable time after notice of any such Claim from the Indemnified Party shall fail to defend, the Indemnified Party (upon further written notice to the Indemnifying Party) shall have the right to undertake the defense, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the Indemnifying Party (subject to the right of the Indemnifying Party to assume defense of such Claim at any time prior to settlement, compromise or final determination thereof).

          (d) Anything in this Section 8.5 to the contrary notwithstanding, if there is a reasonable probability that a Claim may materially and adversely affect the Indemnified Party other than as a result of money damages or other money payments, (i) the Indemnified Party shall have the right, at its own cost and expense, to participate in the defense, compromise or settlement of the Claim, (ii) the Indemnifying Party shall not, without the Indemnified Party’s written consent, settle or compromise any Claim or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party of a release from all liability in respect of such Claim, and (iii) in the event that the Indemnifying Party undertakes defense of any Claim, the Indemnified Party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the Indemnifying Party and its counsel or other representatives concerning such

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Claim and the Indemnifying Party and the Indemnified Party and their respective counsel or other representatives shall cooperate with respect to such Claim.

9. ADDITIONAL COVENANTS OF THE PARTIES

     9.1. Mutual Covenants

          9.1.1. Additional Actions and Documents

          Each of the parties hereto agrees that it will, at any time, prior to, at or after the Closing Date, take or cause to be taken such further actions, and execute, deliver and file or cause to be executed, delivered and filed such further documents and instruments, and obtain such consents, as may be necessary or reasonably requested in connection with the consummation of the purchase and sale contemplated by this Agreement or in order to fully effectuate the purposes, terms and conditions of this Agreement.

          9.1.2. Public Announcements

          Each of Seller and Buyer agrees that it shall consult with the other before issuing any press release or making any public announcement with respect to the sale of the Information Technology Assets and shall not issue any such press release or make any such public announcements (either before or after the Closing Date) prior to such consultation unless otherwise required by any applicable laws or stock listing requirements.

     9.2. Covenants of RVI Entities

          9.2.1. Certain Third Party Warranties

          If Seller shall have recourse to a warranty, representation or indemnity or similar contractual protective provision made by a third party to Seller that relates to the transactions contemplated by this Agreement, Seller shall use its commercially reasonable efforts from and after the Closing to provide the benefit of such warranty, representation or indemnity or similar provision, to Buyer upon Buyer’s request.

     9.3 Guarantees.

          9.3.1 RVI, for itself and its successors in interest and assigns, hereby irrevocably and unconditionally guarantees the full and faithful performance and observation by Seller under this Agreement of all representations, warranties, covenants, conditions, indemnities and agreements set forth in this Agreement provided to be performed and observed by Seller. RVI does hereby waive notice of acceptance of this guaranty, notice of protest or compliance with the terms and provisions of this Agreement and notice of non-performance or non-observance hereof. Each default in payment or performance of any obligations hereunder shall

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give rise to a separate cause of action under this Section 9 and separate suits may be brought hereunder as each cause of action arises.

          9.3.2 DSW, for itself and its successors in interest and assigns, hereby irrevocably and unconditionally guarantees the full and faithful performance and observation by Buyer under this Agreement of all representations, warranties, covenants, conditions, indemnities and agreements set forth in this Agreement provided to be performed and observed by Buyer. DSW does hereby waive notice of acceptance of this guaranty, notice of protest or compliance with the terms and provisions of this Agreement and notice of non-performance or non-observance hereof. Each default in payment or performance of any obligations hereunder shall give rise to a separate cause of action under this Section 9 and separate suits may be brought hereunder as each cause of action arises.

10. EMPLOYEES AND EMPLOYEE BENEFITS

          10.1.1. Employment of IT Employees

          (a) As of the Effective Date, the employees listed on Schedule 3 (the “New Buyer IT Employees”) shall become employees of Buyer. Buyer shall be responsible for the payment of all wages and other remuneration due to New Buyer IT Employees with respect to their services as employees of Buyer from and after the Effective Date. Nothing in this Agreement establishes any right in the New Buyer IT Employees to payments of any kind relating to termination of employment.

          (b) Seller shall be responsible for the payment of all wages and other remuneration due to New Buyer IT Employees with respect to their services as employees of Seller until the Effective Date, including pro rata bonus payments and all vacation pay earned prior to the Effective Date.

          (c) Seller or, as applicable, the Plans shall be liable for any claims made or incurred by New Buyer IT Employees and their beneficiaries through the Effective Date under any employee benefit plans in which the New Buyer IT Employees participate. For purposes of the immediately preceding sentence, a charge will be deemed incurred, in the case of hospital, medical or dental benefits, when the services that are the subject of the charge are performed and, in the case of other benefits (such as disability or life insurance), when an event has occurred or when a condition has been diagnosed that entitles the employee to the benefit.

          (d) It is the intent of the parties that any equity awards granted (stock options, SARs, etc.) by the RVI Entities to the New Buyer IT Employees prior to the Effective Date shall remain outstanding, and New Buyer IT Employees will remain subject to the terms and conditions of those awards and underlying plans.

          (e) Immediately following the transactions contemplated hereby, all reasonable efforts will be made to quickly transition payroll records and systems from Sellers to

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Buyer, so that all applicable payments are made on Buyer’s behalf, with such transition to be concluded no later than thirty days following the Effective Date.

          10.1.2. Retirement and Welfare Plans

          Following the Effective Date, to the extent permitted by law and applicable tax qualification requirements, and subject to any generally applicable break in service or similar rule, and the approval of any insurance carrier, third party provider or the like with commercially reasonable efforts of the RVI Entities and Buyer, each New Buyer IT Employee shall continue to participate in retirement and welfare benefit plans in which he or she was participating prior to the Closing Date and shall receive service credit for purposes of eligibility to participate and vesting (but not for benefit accrual purposes) for employment, compensation, and employee benefit plan purposes with the Seller prior to the Effective Date. Notwithstanding any of the foregoing to the contrary, none of the provisions contained herein shall operate to duplicate any benefit provided to any New Buyer IT Employees or the funding of any such benefit. The RVI Entities and Buyer will also cause all (a) pre-existing conditions and proof of insurability provisions, for all conditions that all New Buyer IT Employees and their covered dependents have as of the Effective Date, and (b) waiting periods under each plan that would otherwise be applicable to newly hired employees to be waived in the case of clause (a) or clause (b) with respect to New Buyer IT Employees to the same extent waived or satisfied under the RVI Entities’ employee benefit plans; provided that nothing in this sentence shall limit the ability of the RVI Entities or the Buyer from amending or entering into new or different employee benefit plans or arrangements provided such plans or arrangements treat the New Buyer IT Employees in a substantially similar manner as employees of Buyer are treated.

          10.1.3. General Employee Provisions

          (a) Buyer will set its own initial terms and conditions of employment for the New Buyer IT Employees and others it may hire, including work rules, benefits and salary and wage structure, all as permitted by law.

          (b) Seller and Buyer shall give any notices required by applicable law and take whatever other actions with respect to the plans, programs and policies described in this Section 10 as may be necessary to carry out the arrangements described in this Section 10.

          (c) Seller and Buyer shall provide each other with such plan documents and summary plan descriptions, employee data or other information as may be reasonably required to carry out the arrangements described in this Section 10.

(d) Buyer shall not have any responsibility, liability or obligation, whether to New Buyer IT Employees, former employees, their beneficiaries or to any other person, with respect to any employee benefit plans, practices, programs or arrangements (including the establishment, operation or termination thereof and the notification and provision of COBRA coverage extension) maintained by Seller.

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11. SALES, TRANSFER AND OTHER TAXES

          Buyer and Seller shall pay all sales, transfer or other taxes, if any, arising from the transactions contemplated by this Agreement, regardless of the person on whom any such taxes are imposed by law. Such payment will be apportioned based upon the Percent of Sales Billing ratio existing at the date of Closing.

12. TERMINATION

          The parties may terminate this Agreement by mutual written agreement at any time prior to the Closing. In addition, either Buyer, on the one hand, or Seller and RVI, on the other hand, may terminate this Agreement if the Closing shall not have occurred on or before December 31, 2006. In the event that this Agreement is terminated pursuant to this Section 12, such termination shall be without any liability or obligation to any party or parties and all further obligations of the parties hereunder shall terminate.

13. NOTICES

     All notices, demands, requests or other communications which may be or are required to be given or made by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, or transmitted by telegram, telex or facsimile transmission addressed as follows:

(i) If to Buyer:

Brand Technology Services LLC
4150 East Fifth Avenue
Columbus, Ohio 43219
Attn: Chief Technology Officer
Telecopier Number: 614/872-1464

with a copy (which shall not constitute notice) to:

DSW Inc.
4150 East Fifth Avenue
Columbus, Ohio 43219
Attn:  General Counsel
Telecopier Number: 614/872-1464

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(ii) If to Seller or RVI:

Retail Ventures, Inc.
3241 Westerville Road
Columbus, Ohio 43224
Attn: Chief Financial Officer
Telecopier Number: 614/473-2721

with a copy (which shall not constitute notice) to:

Retail Ventures, Inc.
3241 Westerville Road
Columbus, Ohio 43224
Attn: General Counsel
Telecopier Number: 614/337-4682

or such other address as the addressee may indicate by written notice to the other party.

          Each notice, demand, request or communication which shall be given or made in the manner described above shall be deemed sufficiently given or made for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, the affidavit of messenger or (with respect to a telex) the answerback being deemed conclusive but not exclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

14. WAIVER

          No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement or under any other instrument or document given in connection with or pursuant to this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein.

15. BENEFIT AND ASSIGNMENT

          Except as hereinafter specifically provided in this Section 15, no party hereto shall assign this Agreement, in whole or in part, whether by operation of law or otherwise, without the prior written consent of Seller (if the assignor is Buyer) or Buyer (if the assignor is Seller or RVI); and any purported assignment contrary to the terms hereof shall be null, void and of no force and effect. In no event shall any assignment by Seller or RVI of its rights and obligations under this Agreement, whether before or after the Closing, release Seller or RVI from its liabilities hereunder. Notwithstanding the foregoing, Buyer or any permitted assignee of

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Buyer may assign this Agreement and any and all rights hereunder, in whole or in part, to any direct or indirect subsidiary of DSW.

          This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns as permitted hereunder. No person or entity other than the parties hereto is or shall be entitled to bring any action to enforce any provision of this Agreement against any of the parties hereto, and the covenants and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto or their respective successors and assigns as permitted hereunder.

16. REMEDIES CUMULATIVE

          Except as specifically provided herein, the remedies provided herein shall be cumulative and shall not preclude the assertion by a party of any other rights or the seeking of any other remedies against the other parties, or their successors or assigns. Nothing contained herein shall preclude a party from seeking equitable relief, where appropriate.

17. ENTIRE AGREEMENT; AMENDMENT

          This Agreement, including the Schedules and Exhibits hereto and the other instruments and documents referred to herein or delivered pursuant hereto, contains the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, commitments or understandings with respect to such matters. No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by the party against whom enforcement of the amendment, modification or discharge is sought.

18. SEVERABILITY

          If any part of any provision of this Agreement or any other agreement, document or writing given pursuant to or in connection with this Agreement shall be invalid or unenforceable under applicable law, such part shall be ineffective to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of such provisions or the remaining provisions of said agreement.

19. HEADINGS

          The headings of the sections and subsections contained in this Agreement are inserted for convenience only and do not form a part or affect the meaning, construction or scope thereof.

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20. GOVERNING LAW

          This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed under and in accordance with the laws of the State of Ohio, excluding the choice of law rules thereof.

21. DEFINITIONS AND REFERENCES

          As used herein, the following terms shall have the meanings set forth below, unless the context otherwise requires:

          “Agreement” shall have the meaning set forth in the Preamble.

          “Amendment No. 1 to Shared Services Agreement” means that certain Amendment No. 1 to Shared Services Agreement, dated as of the Closing Date and executed by DSW and RVI, substantially in the form attached hereto as Exhibit B.

          “Assumption Agreement” means that certain Assumption Agreement, dated as of the Closing Date and executed by Buyer and Seller, substantially in the form attached hereto as Exhibit A.

          “Buyer” shall have the meaning set forth in the Preamble.

          “Buyer Documents” shall mean, together, this Agreement and the Assumption Agreement.

          “Claims” shall have the meaning set forth in Section 8.5.

          “Closing” means the closing of the assignment and sale of the IT Contracts contemplated hereunder.

          “Closing Date” means the time and date on which the Closing takes place, as established by Section 7.1.

          “DSW” shall have the meaning set forth in the Preamble.

          “Encumbrances” shall mean any mortgages, pledges, liens, claims, security interests, restrictions, defects in title, easements, taxes, encumbrances or charges.

          “Indemnified Party” and “Indemnifying Party” shall have the respective meanings set forth in Section 8.5(a).

          “IT Contracts” shall have the meaning set forth in Section 2.5(a).

          “IT Employees” shall mean those employees of RVI and its affiliates set forth on Schedule 3, which Schedule 3 includes the job title, date of hire, current compensation paid or payable, and the employee benefit plans in which such individuals participate.

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          “New Buyer IT Employees” shall have the meaning set forth in Section 10.1.1(a).

          “Restricted Contract” shall have the meaning set forth in Section 1.4.

          “RVI” shall have the meaning set forth in the Preamble.

          “RVI Entities” shall have the meaning set forth in the Preamble.

          “Seller” shall have the meaning set forth in the Preamble.

          “Seller Documents” shall mean, collectively, this Agreement and the Assumption Agreement.

          “Shared Services Agreement” shall have the meaning set forth in the Preamble.

          All references to clauses, Sections, Exhibits and Schedules are to Sections of, and Exhibits and Schedules to, this Agreement. For purposes of this Agreement, DSW and its subsidiaries shall not be deemed to be “affiliates” of RVI or Seller.

22. SIGNATURE IN COUNTERPARTS

          This Agreement may be executed in separate counterparts, none of which need contain the signatures of all parties, each of which shall be deemed to be an original, and all of which taken together constitute one and the same instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than the number of counterparts containing the respective signatures of, or on behalf of, all of the parties hereto.

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

BRAND TECHOLOGY SERVICES, LLC
By:	/s/Peter Z. Horvath
Name: Peter Z. Horvath Title: President
RETAIL VENTURES, INC.
By:	/s/James A. McGrady
Name: James A. McGrady Title: Chief Financial Officer
RETAIL VENTURES SERVICES, INC.
By:	/s/James A. McGrady
Name: James A. McGrady Title: Chief Financial Officer
FILENE’S BASEMENT, INC.
By:	/s/James A. McGrady
Name: James A. McGrady Title: Chief Financial Officer
VALUE CITY DEPARTMENT STORES LLC
By:	/s/James A. McGrady
Name: James A. McGrady Title: Chief Financial Officer
Agreed Solely for Purposes of Section 9.3.2: DSW INC.
By:	/s/Peter Z. Horvath
Name: Peter Z. Horvath Title: President

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EX-10.7 8 l23543aexv10w7.htm EX-10.7

Exhibit 10.7

AMENDED AND RESTATED

SHARED SERVICES AGREEMENT

DATED AS OF October 29, 2006

BETWEEN

DSW INC.

AND

RETAIL VENTURES, INC.

TABLE OF CONTENTS

	Page
ARTICLE I DEFINITIONS		1
SECTION 1.01. Definitions		1
SECTION 1.02. Internal References		5
ARTICLE II PURCHASE AND SALE OF SERVICES		5
SECTION 2.01. Purchase and Sale of Retail Ventures Services		5
SECTION 2.02. Purchase and Sale of DSW Services		5
SECTION 2.03 Additional Services		5
ARTICLE III SERVICE COSTS; OTHER CHARGES		6
SECTION 3.01. Service Costs Generally		6
SECTION 3.02. Customary Billing		6
SECTION 3.03. Pass-Through Billing		6
SECTION 3.04. Percent of Sales Billing		7
SECTION 3.05. Benefit Billing		7
SECTION 3.06. Invoicing and Settlement of Costs		7
ARTICLE IV STANDARD OF PERFORMANCE AND INDEMNIFICATION		8
SECTION 4.01.		8
(i)General Standard of Service		8
SECTION 4.02. Delegation		9
SECTION 4.03. Limitation of Liability		9
SECTION 4.04. Indemnification Related to Retail Ventures Services		10
SECTION 4.05. Indemnification Related to DSW Services		11
ARTICLE V TERM AND TERMINATION		12
SECTION 5.01. Term		12
SECTION 5.02. Termination		12
SECTION 5.03. Effect of Termination		12
ARTICLE VI INSURANCE MATTERS		13
SECTION 6.01. DSW Insurance Coverage During Transition Period		13
SECTION 6.02. Cooperation; Payment of Insurance Proceeds to DSW; Agreement Not to Release Carriers		13
SECTION 6.03. DSW Insurance Coverage After the Insurance Transition Period		14
SECTION 6.04. Deductibles and Self-Insured Obligations		14
SECTION 6.05. Procedures with Respect to Insured DSW Liabilities		14

- i - 

	Page
SECTION 6.06. Insufficient Limits of Liability for Retail Ventures Liabilities and DSW Liabilities		14
SECTION 6.07. Cooperation		15
SECTION 6.08. No Assignment or Waiver		15
SECTION 6.09. No Liability		15
SECTION 6.10. Additional or Alternate Insurance		15
SECTION 6.11. Forbearance and Prior Insurance Coverage		15
SECTION 6.12. Further Agreements		16
ARTICLE VII INFORMATION TECHNOLOGY EXECUTIVE STEERING COMMITTEE		16
SECTION 7.01. Formation		16
SECTION 7.02. Meetings		16
SECTION 7.03. Purpose; Agenda; Minutes		16
SECTION 7.04. Budget/Proposals		17
SECTION 7.05. Information Technology Capital Expenditures		17
ARTICLE VIII ADDITIONAL AGREEMENTS		18
SECTION 8.01. Annual Budget		18
SECTION 8.02. Employment Matters		18
SECTION 8.03. Shared Expenses Agreement		18
ARTICLE VIII MISCELLANEOUS		18
SECTION 9.01. Prior Agreements		18
SECTION 9.02. Other Agreements		19
SECTION 9.03. Future Litigation and Other Proceedings		19
SECTION 9.04. No Agency		19
SECTION 9.05. Subcontractors		19
SECTION 9.06. Force Majeure		19
SECTION 9.07. Entire Agreement		20
SECTION 9.08. Information		20
SECTION 9.09. Notices		20
SECTION 9.10. Governing Law		21
SECTION 9.11. Severability		21
SECTION 9.12. Amendment		21
SECTION 9.13. Counterparts		21
SECTION 9.14. Authority		21

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SCHEDULES

SCHEDULE I:	Services To Be Provided By Retail Ventures, Inc.
SCHEDULE II:	Services To Be Provided By DSW Inc.
SCHEDULE III:	Insurance Policies Maintained by Retail Ventures, Inc.

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AMENDED AND RESTATED
SHARED SERVICES AGREEMENT

     This Amended and Restated Shared Services Agreement is entered into to be effective as of October 29, 2006 by and between DSW Inc., an Ohio corporation (“DSW”), and Retail Ventures, Inc. an Ohio corporation (“Retail Ventures”). DSW and Retail Ventures are sometimes being referred to herein separately as a “Party” and together as the “Parties”. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Article I hereof.

RECITALS

     WHEREAS, the Articles of Incorporation of DSW authorize 170,000,000 Class A common shares, without par value (the “Class A common shares”) and 100,000,000 Class B common shares, without par value (the “Class B common shares”);

     WHEREAS, DSW made an initial public offering (the “Offering”) of an amount of Class A common shares pursuant to a registration statement on Form S-1 under the Securities Act of 1933, as amended (the “Registration Statement”);

     WHEREAS, immediately following consummation of the Offering, Retail Ventures owned and continues to own Class B common shares evidencing at least 80.1% of the combined voting power of the holders of the Class A common shares and the Class B common shares with respect to all shareholder matters;

     WHEREAS, prior to the consummation of the Offering, Retail Ventures directly or indirectly provided certain financial, management and other services to the DSW Entities (as defined below), and DSW directly or indirectly provided certain administrative, management and other services to the Retail Ventures Entities (as defined below);

     WHEREAS, in connection with the consummation of the Offering, each Party set forth in the Initial Agreement (as defined below) the principal terms and conditions pursuant to which certain services were to be provided by it to, and certain services were to be provided to it by, the other Party; and

     WHEREAS, the Parties now wish to amend and restate the Initial Agreement for purposes of (a) transferring responsibility for certain Information Technology Services (as defined below) from Retail Ventures to DSW;(b) modifying certain terms applicable to the Shoe Processing Services (as defined below); and (c) other amendments to reflect agreed upon changes in shared services, all in accordance with the terms of this Agreement;

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, for themselves and their respective successors and assigns, hereby covenant and agree as follows:

ARTICLE I DEFINITIONS

     SECTION 1.01. Definitions. (a) As used in this Agreement, the following terms shall have the following meanings, applicable both to the singular and the plural forms of the terms described:

     “Agreement” means this Amended and Restated Shared Services Agreement, together with the schedules and exhibits hereto, as the same may be amended and supplemented from time to time in accordance with the provisions hereof.

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     “Agreement Date” means the effective date of this Agreement first set forth above.

     “Billing Party Entities” means (a) with respect to Services for which DSW is the Billing Party, DSW Entities, and (b) with respect to Services for which Retail Ventures is the Billing Party, Retail Ventures Entities.

     “Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York or Columbus, Ohio are authorized or required by law to close.

     “Contract” means any contract, agreement, lease, license, sales order, purchase order, instrument or other commitment that is binding on any Person or any part of such Person’s property under applicable law.

     “Department” means a business section or division of a Party.

     “Distribution Date” means the date on which Retail Ventures is no longer required to consolidate DSW’s results of operations and financial condition (determined in accordance with generally accepted accounting principles consistently applied) with Retail Ventures’ results of operations and financial condition.

     “DSW Business” means the specialty branded footwear retail business engaged in by DSW, as more completely described in the Registration Statement, and any businesses added under the control of DSW.

     “DSW Entities” means DSW Inc. and its Subsidiaries, and “DSW Entity” means any one of the DSW Entities.

     “DSW Liabilities” has the meaning set forth in the Master Separation Agreement.

     “DSW Services” means the various services to be provided by DSW on behalf of or for the Retail Ventures Entities as described in this Agreement and/or in Schedule II.

     “Exchange Agreement” means an agreement between the parties relating to the exchange of Class A common shares for Class B common shares.

     “Information Technology Services” means those services referenced on Schedule II that were provided by or on behalf of Retail Ventures before the Information Technology Services Transfer Date and will be provided by DSW after the Information Technology Services Transfer Date.

     “Information Technology Services Transfer Date” shall mean the date that is mutually agreed upon by the Parties for transfer of responsibility for performance of the Information Technology Services from Retail Ventures to DSW.

     “Initial Agreement” means the Shared Services Agreement between DSW and Retail Ventures, dated as of January 30, 2005, together with the schedules and exhibits thereto.

     “Insurance Policies” means insurance policies pursuant to which a Person makes a true risk transfer to an insurer.

     “Insurance Proceeds” means those monies: (a) received by an insured from an insurance carrier; or (b) paid by an insurance carrier on behalf of the insured; or (c) from Insurance Policies.

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     “Insured DSW Liability” means any DSW Liability to the extent that (i) it is covered under the terms of Retail Ventures’ Insurance Policies in effect prior to the end of the Insurance Transition Period, and (ii) DSW is not a named insured under, or otherwise entitled to the benefits of, such Insurance Policies.

     “Liabilities” means all debts, liabilities, guarantees, assurances, commitments and obligations, whether fixed, contingent or absolute, asserted or unasserted, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due, whenever or however arising (including, without limitation, whether arising out of any Contract or tort based on negligence or strict liability) and whether or not the same would be required by generally accepted principles and accounting policies to be reflected in financial statements or disclosed in the notes thereto.

     “Master Separation Agreement” means an agreement entered into by the Parties in connection with the Offering that sets forth the principal arrangements between them regarding the separation of the DSW business from Retail Ventures.

     “Offering Date” means 12:01 a.m., New York City Time, on June 28, 2005.

     “Person” means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, government (including any department or agency thereof) or other entity.

     “Receiving Party Entities” means (a) with respect to Services for which DSW is the Billing Party, Retail Ventures Entities, and (b) with respect to Services for which Retail Ventures is the Billing Party, DSW Entities.

     “Retail Ventures Entities” means Retail Ventures and its Subsidiaries (other than the DSW Entities), and “Retail Venture Entity” means any one of the Retail Venture Entities currently in place on the effective date of the Registration Statement and any businesses added under the control of Retail Ventures.

     “Retail Ventures Services” means the various services to be provided by Retail Ventures on behalf of or for the DSW Entities as described in this Agreement, in Schedule I and/or in Schedule III.

     “RVSI” means Retail Ventures Services, Inc., an Ohio corporation and wholly-owned subsidiary of Retail Ventures.

     “Schedule I” means the first Schedule attached hereto which lists Services to be provided by Retail Ventures on behalf of or for DSW Entities and sets forth the related Retail Ventures Service Costs and/or billing methodology.

     “Schedule II” means the second Schedule attached hereto which lists Services to be provided by DSW on behalf of or for Retail Ventures Entities and sets forth the related DSW Service Costs and/or billing methodology.

     “Schedule III” means the third Schedule attached hereto which lists the Insurance Policies to be maintained by Retail Ventures on behalf of or for the DSW Entities and premium expenses and/or the methodology for calculating the premium expenses to be paid by DSW for insurance coverage under such Insurance Policies.

     “Schedules” means any one or more of the schedules referred to in and attached to this Agreement.

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     “Services” means the DSW Services and/or the Retail Ventures Services, as the context may require.

     “Shoe Processing Services” means the shoe processing services for Value City Department Stores LLC that are included in the DSW Services described in Section 2 of Schedule II.

     “Subsidiary” means, as to any Person, any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting capital stock or other voting ownership interests is owned or controlled directly or indirectly by such Person or by one or more of the Subsidiaries of such Person or by a combination thereof.

     “Tax Separation Agreement” means the Tax Separation Agreement attached as Exhibit A to the Master Separation Agreement.

     (b) Each of the following terms is defined in the Section set forth opposite such term:

TERM	SECTION
Annual Budget	8.01
Actions	4.04(a)
Applicable Insurance	6.11(a)
Benefit Billing	3.01
Benefits Services	3.05(b)
Billing Party	3.02
Class A common shares	Preamble
Class B common shares	Preamble
Committee	7.01
Coverage Amount	6.06(a)(i)
Customary Billing	3.01
DSW Covered Parties	6.01(a)
DSW Inc.	Preamble
DSW Indemnified Person	4.03(b)
DSW/RVI Shared Asset	7.05
RVI Dedicated Asset	7.05
RVI Shared Asset	7.05
DSW Service Costs	3.01
Employee Welfare Plans	4.02
Force Majeure	9.06(a)
Initial Term	5.01
Insurance Transition Period	6.01(a)
Net Sales Ratio	3.04
Offering	Preamble
Overallocated Party	6.06(a)(iii)
Parties	Preamble
Party	Preamble
Pass-Through Billing	3.01
Payment Date	3.06(b)
Percent of Sales Billing	3.01
Prior Agreements	9.01
Receiving Party	3.02
Registration Statement	Preamble
Retail Ventures	Preamble
Retail Ventures Indemnified Person	4.03(a)
Retail Ventures Insurance Policies	6.01(a)
Retail Ventures Plans	3.05(a)
Retail Ventures Service Costs	3.01
RVI Dedicated Asset	7.05
RVI Shared Asset	7.05
Service Costs	3.06(a)
Shared Expenses Agreement	8.03
Terminated Party	5.03(a)
Terminating Party	5.03(a)
Underallocated Party	6.06(a)(iii)

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     SECTION 1.02. Internal References. Unless the context indicates otherwise, references to Articles, Sections and paragraphs shall refer to the corresponding articles, sections and paragraphs in this Agreement and references to the parties shall mean the parties to this Agreement.

ARTICLE II
PURCHASE AND SALE OF SERVICES

     SECTION 2.01. Purchase and Sale of Retail Ventures Services.

     (a) Subject to the terms and conditions of this Agreement and in consideration of the Retail Ventures Service Costs described below, Retail Ventures agrees to provide to the applicable DSW Entities, or to procure the provision to such entities, and DSW agrees to purchase from Retail Ventures, the Retail Ventures Services. Unless otherwise specifically agreed by Retail Ventures and DSW, the Retail Ventures Services shall be substantially similar in scope, quality, and nature to those customarily provided to, or procured on behalf of, the DSW Entities by Retail Ventures and/or its Subsidiaries prior to the Offering Date.

     (b) The Parties acknowledge and agree that (i) the Retail Ventures Services to be provided by the applicable Retail Ventures Entities under this Agreement shall, at DSW’s request, be provided directly to Subsidiaries of DSW and (ii) Retail Ventures may satisfy its obligation to provide or to procure the Retail Ventures Services hereunder by causing one or more of its Subsidiaries, including, but not limited to, RVSI, to provide or to procure such services. With respect to the Retail Ventures Services provided to, or procured on behalf of, any Subsidiary of DSW, DSW agrees to pay on behalf of such Subsidiary all amounts payable by or in respect of such services pursuant to this Agreement.

     SECTION 2.02. Purchase and Sale of DSW Services

     (a) Subject to the terms and conditions of this Agreement and in consideration of the DSW Service Costs described below, DSW agrees to provide to the applicable Retail Ventures Entities, or to procure the provision to such entities of, and Retail Ventures agrees to purchase from DSW, the DSW Services. Unless otherwise specifically agreed by Retail Ventures and DSW, (i) the DSW Services (other than the Information Technology Services) shall be substantially similar in scope, quality, and nature to those customarily provided to, or procured on behalf of, the Retail Ventures Entities by DSW and/or its Subsidiaries prior to the Offering Date, and (ii) the Information Technology Services shall be, at a minimum, substantially similar in scope, quality, and nature to those customarily provided to, or procured on behalf of, the Retail Ventures Entities by Retail Ventures and/or its Subsidiaries prior to the Information Technology Services Transfer Date.

     (b) The Parties acknowledge and agree that (i) the DSW Services to be provided by the applicable DSW Entities on behalf of Retail Ventures under this Agreement shall, at Retail Ventures’ request, be provided directly to Subsidiaries of Retail Ventures and (ii) DSW may satisfy its obligation to provide or to procure the DSW Services hereunder by causing one or more of its Subsidiaries to provide or to procure such services. With respect to the DSW Services provided to, or procured on behalf of, any Subsidiary of Retail Ventures, Retail Ventures agrees to pay on behalf of such Subsidiary all amounts payable by or in respect of such services pursuant to this Agreement.

     SECTION 2.03 Additional Services.

     (a) In addition to the Retail Ventures Services to be provided or procured by Retail Ventures in accordance with Section 2.01, if requested by DSW, and to the extent that Retail Ventures and DSW may mutually agree, Retail Ventures shall provide additional services (including services not provided by

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Retail Ventures to the DSW Entities prior to the Offering Date) to DSW. The scope of any such services, as well as the costs and other terms and conditions applicable to such services, shall be as mutually agreed by Retail Ventures and DSW.

     (b) In addition to the DSW Services to be provided or procured by DSW in accordance with Section 2.02, if requested by Retail Ventures, and to the extent that Retail Ventures and DSW may mutually agree, DSW shall provide additional services (including services not provided by DSW to the Retail Ventures Entities prior to the Offering Date) to Retail Ventures. The scope of any such services, as well as the costs and other terms and conditions applicable to such services, shall be as mutually agreed by Retail Ventures and DSW.

ARTICLE III
SERVICE COSTS; OTHER CHARGES

     SECTION 3.01. Service Costs Generally. The Schedules hereto indicate, with respect to the DSW Services and the Retail Ventures Services, respectively, listed therein, whether the costs to be charged for Services are to be determined by (i) the customary billing method described in Section 3.02 (“Customary Billing”), (ii) the pass-through billing method described in Section 3.03 (“Pass-Through Billing”), (iii) the percentage of net sales method described in Section 3.04 (“Percent of Sales Billing”), (iv) a calculation of certain costs related to employee benefit plans and benefit arrangements described in Section 3.05 (“Benefit Billing”), or (v) another specified method. Unless otherwise indicated on the Schedules, the Customary Billing method will apply. The costs to be paid by DSW to Retail Ventures for Retail Venture Services are collectively referred to herein as the “Retail Ventures Service Costs”. DSW agrees to pay to Retail Ventures in the manner set forth in Section 3.06 an amount equal to the Retail Ventures Service Costs applicable to each of the Retail Ventures Services provided or procured by Retail Ventures. The costs to be paid by Retail Ventures to DSW for the DSW Services are collectively referred to herein as the “DSW Service Costs”. Retail Ventures agrees to pay to DSW in the manner set forth in Section 3.06 an amount equal to the DSW Service Costs applicable to each of the DSW Services provided or procured by DSW.

     SECTION 3.02. Customary Billing. The costs of Services as to which the Customary Billing method applies shall be equal to the costs customarily charged and/or allocated by one Party and/or one or more of its Subsidiaries or Departments (the “Billing Party”) to the other Party and/or one or more of its Subsidiaries or Departments (the “Receiving Party”) immediately prior to the Information Technology Services Transfer Date (it being understood that from and after the Information Technology Services Transfer Date such costs may be increased by the Billing Party in a manner consistent with the manner in which such costs were increased from time to time prior to the Information Technology Services Transfer Date, and consistent with the semi-annual reconciliation described in Section 8.01).

     SECTION 3.03. Pass-Through Billing. The costs of Services as to which the Pass-Through Billing method applies shall be equal to the aggregate amount of third-party, out-of-pocket costs and expenses incurred by a Billing Party on behalf of a Receiving Party (which costs shall include but not be limited to the costs incurred in connection with obtaining the consent of any party to a contract or agreement to which any Billing Party is a party where such consent is related to and reasonably required for the provision of any Service). It is intended that Services provided by third parties will be billed directly to the Receiving Party by the third party; however, if a Billing Party incurs any such costs or expenses on behalf of any Receiving Party as well as businesses operated by the Billing Party, the Billing Party shall allocate any such costs or expenses in good faith between the various businesses on behalf of which such costs or expenses were incurred as set

6

forth on any Schedule hereto or, if not set forth on a Schedule, then as the Billing Party shall determine in the exercise of the Billing Party’s reasonable judgment. The Billing Party shall apply usual and accepted accounting conventions in making such allocations, and the Billing Party or its agents shall keep and maintain such books and records as may be reasonably necessary to make such allocations. The Billing Party shall make copies of such books and records available to the Receiving Party upon request and with reasonable notice.

     SECTION 3.04. Percent of Sales Billing. Services for which the billing methodology is the Percent of Sales Billing method shall not be billed individually. Instead, the Billing Party shall provide all such services for an aggregate annual cost equal to the amount obtained by multiplying (x) the Billing Party’s projected budget for all services which are the same or similar to the applicable Services which are to be provided to all Retail Ventures Entities and DSW Entities for the relevant year, by (y) the projected net sales for the year of the Receiving Party Entities divided by the aggregate projected net sales of all Retail Ventures Entities and DSW Entities (the “Net Sales Ratio”). At the end of the applicable fiscal year, actual expenses versus budgeted expenses for the relevant Service shall be compared and any overage or shortfall shall be allocated based upon the Net Sales Ratio. The Billing Party’s budget for Services to be provided to the Receiving Party Entities as contemplated by this Section 3.04 shall be determined on a basis consistent with the manner in which the Billing Party determines the similar budgets for the Billing Party Entities.

     SECTION 3.05. Benefit Billing.

     (a) Prior to the Offering Date, certain associates of DSW participated in certain benefit plans sponsored by Retail Ventures (“Retail Ventures Plans”). On and after the Offering Date, DSW associates shall continue to be eligible to participate in the Retail Ventures Plans, subject to the terms of the governing plan documents as interpreted by the appropriate plan fiduciaries. On and after the Offering Date, subject to regulatory requirements and the provisions of Section 4.01 hereof, Retail Ventures shall continue to provide Benefit Services (as hereafter defined) to and in respect of DSW associates with reference to Retail Ventures Plans as administered by Retail Ventures prior to the Offering Date.

     (b) The costs payable by DSW for Retail Ventures Services relating to the administration of employee plans and benefit arrangements, which are included in Human Resources in Schedule I (“Benefit Services”), shall be determined and billed as set forth in Schedule I. The Parties acknowledge and agree that some of the costs associated with certain Retail Ventures Plans will be paid principally through DSW employee payroll deductions for such plans as specified in Schedule I. The Parties intend that the Retail Ventures Service Costs relating to the performance of Benefit Services shall not exceed reasonable compensation for such services as defined under applicable law.

     (c) Each Party may request changes in the applicable terms of or Retail Ventures Services relating to the Retail Ventures Plans, approval of which shall not be unreasonably withheld; provided, however, that changes in the terms and provisions of any of the Retail Ventures Plans shall be in the sole discretion of Retail Ventures. The Parties agree to cooperate fully with each other in the administration and coordination of regulatory and administrative requirements associated with Retail Ventures Plans.

     SECTION 3.06. Invoicing and Settlement of Costs.

     (a) Except as otherwise provided in a Schedule to this Agreement or to the extent that Retail Ventures and DSW may mutually agree, each Billing Party shall invoice or notify the Chief Executive Officer or Chief Financial Officer of the Receiving Party on a monthly basis (not later than the tenth day of

7

each month), in a manner substantially similar to and consistent with the billing practices used in connection with services provided by Retail Ventures to the DSW Entities prior to the Offering Date and, as applicable, the Information Technology Services Transfer Date (except as otherwise agreed), of the Service Costs related to services performed or procured by the Billing Party during the prior calendar month. As used herein, “Service Costs” means the Retail Ventures Service Costs, if Retail Ventures is the Billing Party, and the DSW Service Costs, if DSW is the Billing Party. In connection with the invoicing described in this Section 3.06(a), the Billing Party shall provide to the Receiving Party the same billing data and level of detail as customarily or similar to that provided to the Receiving Party prior to the Offering Date and, as applicable, the Information Technology Services Transfer Date and such other related data as may be reasonably requested by the Receiving Party.

     (b) The Receiving Party agrees to pay to the Billing Party, on or before the 30th day after the date on which the Billing Party delivers to the Receiving Party an invoice or notice of Service Costs (or the next Business Day, if such 30th day is not a Business Day) (each, a “Payment Date”), by wire transfer of immediately available funds payable to the order of the Billing Party, all amounts so invoiced or noticed by the Billing Party pursuant to Section 3.06(a). If the Receiving Party fails to pay any monthly payment within 30 days of the relevant Payment Date, the Receiving Party shall be obligated to pay, in addition to the amount due on such Payment Date, interest on such amount at the prime, or best, rate announced by National City Bank, compounded monthly from the relevant Payment Date through the date of payment. Payment can be made via check, ACH or wire and, except as set forth in Section 3.15(c) of the Master Separation Agreement, offsetting is not permitted.

ARTICLE IV
STANDARD OF PERFORMANCE AND INDEMNIFICATION

     SECTION 4.01.

     (i)General Standard of Service. Except as otherwise agreed to in writing by the Parties or as described in this Agreement, and provided that a Party is not restricted by contract with third parties or by applicable law, the Parties agree that (i) the nature, quality, and standard of care applicable to the delivery of the Services hereunder (other than the Information Technology Services) shall be substantially the same as or consistent with that applicable to the similar services provided by a Party to the other Party prior to the Offering Date, and (ii) the nature, quality, and standard of care applicable to the delivery of the Information Technology Services hereunder shall be, at a minimum, substantially the same as or consistent with that applicable to the similar services provided by or on behalf of Retail Ventures prior to the Information Technology Services Transfer Date. Retail Ventures shall use its reasonable efforts to ensure that the nature and quality of Services provided to DSW associates under Retail Ventures Plans, either by Retail Ventures directly or through administrators under contract, shall be undifferentiated as compared with the same services provided to or on behalf of Retail Ventures associates under Retail Ventures Plans.

     (ii) Service Level Partnership Agreements. Within ninety (90) days of the date of this Agreement, DSW will enter into Service Level Partnership Agreements with RVI and/or each RVI entity, with such agreements to include a description of Information Technology Services provided to each entity and address minimum standards of service each entity should expect.

     SECTION 4.02. Delegation. Subject to Section 4.01 above, DSW hereby delegates to Retail Ventures final, binding, and exclusive authority, responsibility, and discretion to interpret and construe the provisions of employee welfare benefit plans in which associates of DSW Entities have

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elected to participate and which are administered by Retail Ventures under this Agreement (collectively, “Employee Welfare Plans”). Retail Ventures may further delegate such authority to other parties to:

          (i) provide administrative and other services;

          (ii) reach factually supported conclusions consistent with the terms of the respective Employee Welfare Plans;

          (iii) make a full and fair review of each claim denial and decision related to the provision of benefits provided or arranged for under the Employee Welfare Plans pursuant to the requirements of ERISA, if within 60 days after receipt of the notice of denial, a claimant requests in writing a review for reconsideration of such decisions (the party adjudicating the claim shall notify the claimant in writing of its decision on review and such notice shall satisfy all ERISA requirements relating thereto); and

          (iv) notify the claimant in writing of its decision on review.

     SECTION 4.03. Limitation of Liability.

     (a) Retail Ventures Entities

          (i) DSW agrees that none of the Retail Ventures Entities and their respective directors, officers, agents, and employees (each, a “Retail Ventures Indemnified Person”) shall have any liability, whether direct or indirect, in contract or tort or otherwise, to any DSW Entity or any other Person for or in connection with the Retail Ventures Services rendered or to be rendered by any Retail Ventures Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any Retail Ventures Indemnified Person’s actions or inactions in connection with any Retail Ventures Services or such transactions, except for damages which have resulted from such Retail Ventures Indemnified Person’s gross negligence or willful misconduct in connection with any Retail Ventures Services, actions or inactions.

          (ii) Notwithstanding the provisions of this Section 4.03(a), none of the Retail Venture Entities shall be liable for any special, indirect, incidental, or consequential damages of any kind whatsoever (including, without limitation, attorneys’ fees) in any way due to, resulting from or arising in connection with any of the Retail Ventures Services or the performance of or failure to perform Retail Ventures’ obligations under this Agreement. This disclaimer applies without limitation (1) to claims arising from the provision of the Retail Ventures Services or any failure or delay in connection therewith; (2) to claims for lost profits; (3) regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise; and (4) regardless of whether such damages are foreseeable or whether Retail Ventures has been advised of the possibility of such damages.

          (iii) None of the Retail Venture Entities shall have any liability to any DSW Entity or any other Person for failure to perform Retail Ventures’ obligations under this Agreement or otherwise, where (1) such failure to perform is not caused by the gross negligence or willful misconduct of the Retail Venture Entity designated to perform such obligations and (2) such failure to perform similarly affects the Retail Venture Entities receiving the same or similar services and does not have a disproportionately adverse effect on the DSW Entities, taken as a whole.

          (iv) In addition to the foregoing, DSW agrees that, in all circumstances, it shall use commercially reasonable efforts to mitigate and otherwise minimize damages to the DSW Entities, individually and collectively,

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whether direct or indirect, due to, resulting from or arising in connection with any failure by Retail Ventures to comply fully with Retail Ventures’ obligations under this Agreement.

     (b) DSW Entities

          (i) Retail Ventures agrees that none of the DSW Entities and their respective directors, officers, agents, and employees (each, a “DSW Indemnified Person”) shall have any liability, whether direct or indirect, in contract or tort or otherwise, to any Retail Ventures Entity or any other Person for or in connection with the DSW Services rendered or to be rendered by any DSW Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any DSW Indemnified Person’s actions or inactions in connection with any DSW Services or such transactions, except for damages which have resulted from such DSW Indemnified Person’s gross negligence or willful misconduct in connection with any DSW Services, actions or inactions.

          (ii) Notwithstanding the provisions of this Section 4.03(b), none of the DSW Entities shall be liable for any special, indirect, incidental, or consequential damages of any kind whatsoever (including, without limitation, attorneys’ fees) in any way due to, resulting from or arising in connection with any of the DSW Services or the performance of or failure to perform DSW’s obligations under this Agreement. This disclaimer applies without limitation (1) to claims arising from the provision of the DSW Services or any failure or delay in connection therewith; (2) to claims for lost profits; (3) regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise; and (4) regardless of whether such damages are foreseeable or whether DSW has been advised of the possibility of such damages.

          (iii) None of the DSW Entities shall have any liability to any Retail Ventures Entity or any other Person for failure to perform DSW’s obligations under this Agreement or otherwise, where (1) such failure to perform is not caused by the gross negligence or willful misconduct of the DSW Entity designated to perform such obligations and (2) such failure to perform similarly affects the DSW Entities receiving the same or similar services and does not have a disproportionately adverse effect on the Retail Ventures Entities, taken as a whole.

          (iv) In addition to the foregoing, Retail Ventures agrees that, in all circumstances, it shall use commercially reasonable efforts to mitigate and otherwise minimize damages to Retail Ventures Entities, individually and collectively, whether direct or indirect, due to, resulting from or arising in connection with any failure by DSW to comply fully with DSW’s obligations under this Agreement.

     SECTION 4.04. Indemnification Related to Retail Ventures Services.

     (a) DSW agrees to indemnify and hold harmless each Retail Ventures Indemnified Person from and against any damages related to, and to reimburse each Retail Ventures Indemnified Person for all reasonable expenses (including, without limitation, attorneys’ fees) as they are incurred in connection with investigating, preparing, pursuing, or defending, any third party claim, action, proceeding, or investigation, whether or not in connection with pending or threatened litigation and whether or not any DSW Indemnified Person or any Retail Ventures Indemnified Person is a party (collectively, “Actions”), arising out of or in connection with Retail Ventures Services rendered or to be rendered by any Retail Ventures Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any Retail Ventures Indemnified Person’s actions or inactions in connection with any such Retail Ventures Services or transactions; provided that, DSW shall not be responsible for any damages incurred by any Retail Ventures Indemnified Person that have resulted from such Retail Ventures Indemnified Person’s gross negligence or willful misconduct in connection with any of the advice, actions, inactions,

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or Retail Ventures Services referred to above (it being understood and agreed that the provision by any Retail Venture Entity of any of the Retail Ventures Services contemplated by Schedule I hereof without obtaining the consent of any party to any Contract or agreement to which any Retail Ventures Entity is a party as of the date hereof shall not constitute gross negligence or willful misconduct by any Retail Ventures Entity, provided that, the relevant Retail Ventures Entity has used commercially reasonable efforts to obtain such consent).

     (b) Except as set forth in Section 4.04(c), Retail Ventures agrees to indemnify and hold harmless each DSW Indemnified Person from and against any damages related to, and to reimburse each DSW Indemnified Person for all reasonable expenses as they are incurred in connection with investigating, preparing, or defending, any third party Action arising out of or related to the gross negligence or willful misconduct of any Retail Ventures Indemnified Person in connection with the Retail Ventures Services rendered or to be rendered pursuant to this Agreement.

     (c) To the extent that any other Person has agreed to indemnify any Retail Ventures Indemnified Person or to hold a Retail Ventures Indemnified Person harmless and such Person provides services to Retail Ventures or any affiliate of Retail Ventures relating directly or indirectly to any employee plan or benefit arrangement for which Benefit Services are provided under this Agreement, Retail Ventures will exercise reasonable efforts (x) to make such agreement applicable to any DSW Indemnified Person so that each DSW Indemnified Person is held harmless or indemnified to the same extent as any Retail Ventures Indemnified Person and (y) to make available to each DSW Indemnified Person the benefits of such agreement.

     SECTION 4.05. Indemnification Related to DSW Services.

     (a) Retail Ventures agrees to indemnify and hold harmless each DSW Indemnified Person from and against any damages related to, and to reimburse each DSW Indemnified Person for all reasonable expenses (including, without limitation, attorneys’ fees) as they are incurred in connection with investigating, preparing, pursuing, or defending, any third party Action arising out of or in connection with DSW Services rendered or to be rendered by any DSW Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any DSW Indemnified Person’s actions or inactions in connection with any such DSW Services or transactions; provided that, Retail Ventures shall not be responsible for any damages incurred by any DSW Indemnified Person that have resulted from such DSW Indemnified Person’s gross negligence or willful misconduct in connection with any of the advice, actions, inactions, or DSW Services referred to above (it being understood and agreed that the provision by any DSW Entity of any of the DSW Services contemplated by Schedule II hereof without obtaining the consent of any party to any Contract or agreement to which any DSW Entity is a party as of the date hereof shall not constitute gross negligence or willful misconduct by any DSW Entity, provided that, the relevant DSW Entity has used commercially reasonable efforts to obtain such consent).

     (b) DSW agrees to indemnify and hold harmless the Retail Ventures Indemnified Persons from and against any damages related to, and to reimburse each Retail Ventures Indemnified Person for all reasonable expenses as they are incurred in connection with investigating, preparing, or defending, any third party Action arising out of or related to the gross negligence or willful misconduct of any DSW Indemnified Person in connection with the DSW Services rendered or to be rendered pursuant to this Agreement.

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ARTICLE V
TERM AND TERMINATION

     SECTION 5.01. Term. The Initial Agreement was in effect from January 30, 2005 through the Agreement Date. Except as otherwise provided in this Article V, or in Section 9.06 or as otherwise agreed in writing by the Parties, (a) this Agreement, (i) as it relates to all Services other than the Shoe Processing Services, shall have an initial term from the Agreement Date through January 31, 2008, and (ii) as it relates to the Shoe Processing Services, shall have an initial term from the Agreement Date through January 31, 2011 (in each case, the “Initial Term”), and will be renewed automatically after the applicable Initial Terms for successive one-year terms unless either Party elects not to renew this Agreement by notice in writing to the other Party not less than one hundred and eighty (180) days prior to the end of any term, and (b) a Party’s obligation to provide or to procure, and the other Party’s obligation to purchase, a Service shall cease as of the applicable date set forth in the applicable Schedules or such earlier date determined in accordance with Section 5.02.

     SECTION 5.02. Termination.

     (a) Except as otherwise provided herein or in any Schedule hereto, the Parties may by mutual agreement from time to time terminate this Agreement with respect to one or more of the Services, in whole or in part.

     (b) Retail Ventures may terminate any DSW Service at any time if DSW shall have failed to perform any of its material obligations under this Agreement relating to such DSW Service, Retail Ventures shall have notified DSW in writing of such failure and such failure shall have continued for a period of at least thirty (30) days after receipt by DSW of written notice of such failure from Retail Ventures.

     (c) DSW may terminate any Retail Ventures Service at any time if Retail Ventures shall have failed to perform any of its material obligations under this Agreement relating to such Retail Ventures Service, DSW shall have notified Retail Ventures in writing of such failure, and such failure shall have continued for a period of at least thirty (30) days after receipt by Retail Ventures of written notice of such failure from DSW.

     (d) On or after October 1, 2007, either Retail Ventures or DSW may terminate the Shoe Processing Services by giving written notice of such termination to the other Party. Termination of the Shoe Processing Services shall be effective not less than nine (9) months after the date of any such termination notice or on any later date that may be specified in such notice.

     SECTION 5.03. Effect of Termination.

     (a) Other than as required by law, upon termination of any Service pursuant to Section 5.02, or upon termination of this Agreement in accordance with its terms, the Party whose Service is terminated (the “Terminated Party”) shall have no further obligation to provide the terminated Service (or any Service, in the case of termination of this Agreement) and the Party terminating such Service (the “Terminating Party”) shall have no obligation to pay any fees relating to such terminated Services or to make any other payments hereunder; provided that, notwithstanding such termination, (i) the Terminating Party shall remain liable to the Terminated Party for fees owed and payable in respect of Services provided prior to the effective date of the termination; (ii) the Terminated Party shall continue to charge the Terminating Party for administrative and program costs relating to benefits paid after but incurred prior to the termination of any Service and other services required to be provided after the termination of such Service, and the Terminating Party shall be obligated to pay such expenses in accordance with the terms of this Agreement; and (iii) the provisions of Articles 4, 5,

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and 9 shall survive any such termination indefinitely. All program and administrative costs attributable to associates of any DSW Entity under Retail Ventures Plans that relate to any period after the effective date of any such termination shall be for the account of and paid by DSW.

     (b) Following termination of this Agreement with respect to any Service provided or procured by a Party, the Parties agree to cooperate with each other in providing for an orderly transition of such Service to the other Party or to a successor service provider as designated by the other Party. Without limiting the foregoing, Retail Ventures agrees to (i) provide to DSW, within 30 days of the termination of any Benefit Service, in a usable format designated by Retail Ventures, copies of all records relating directly or indirectly to benefit determinations with respect to any and all associates of a DSW Entity, including, but not limited to, compensation and service records, correspondence, plan interpretive policies, plan procedures, administration guidelines, minutes, and any data or records required to be maintained by law and (ii) work with DSW in developing a transition schedule with respect to such terminated Benefit Service.

ARTICLE VI
INSURANCE MATTERS

     SECTION 6.01. DSW Insurance Coverage During Transition Period.

     (a) As of the Offering Date, Retail Ventures shall maintain insurance coverage under the Insurance Policies listed in Part (a) of Schedule III (the “Retail Ventures Insurance Policies”). Throughout the period beginning on the Offering Date and ending upon the earlier of (i) termination of the Service provided pursuant to this Article VI or (ii) termination or expiration of this Agreement in accordance with its terms (the “Insurance Transition Period”), Retail Ventures shall, subject to insurance market conditions and other factors beyond its control, maintain Insurance Policies covering and for the benefit of the DSW Entities and their respective directors, officers, and employees (collectively, the “DSW Covered Parties”) which are comparable to those maintained generally by Retail Ventures covering the DSW Covered Parties prior to the Offering Date; provided, however, that if Retail Ventures determines that (i) the amount or scope of such insurance coverage will be reduced to a level materially inferior to the level of insurance coverage in existence immediately prior to the Insurance Transition Period or (ii) the retention or deductible level applicable to such insurance coverage, if any, will be increased to a level materially greater than the levels in existence immediately prior to the Insurance Transition Period, each other than as a result of the Offering, Retail Ventures shall give DSW notice of such determination as promptly as practicable. Upon notice of such determination, DSW shall be entitled to no less than sixty (60) days to evaluate DSW’s options regarding continuance of insurance coverage under said Insurance Policies and DSW may cancel the DSW Entities’ interest in all or any portion of such insurance coverage as of any day within such sixty (60) day period.

     (b) DSW shall promptly pay or reimburse Retail Ventures, as the case may be, for premium expenses, deductibles or retention amounts, and any other costs and expenses which Retail Ventures may incur in connection with the insurance coverages maintained pursuant to this Section 6.01, including but not limited to any retroactive or subsequent premium adjustments. DSW’s share of such costs and expenses shall be calculated as set forth in Part (b) of Schedule III.

     SECTION 6.02. Cooperation; Payment of Insurance Proceeds to DSW; Agreement Not to Release Carriers. Each Party shall share such information as is reasonably necessary in order to permit the other Party to manage and conduct its insurance matters in an orderly fashion. Retail Ventures, at the request of DSW, shall cooperate with and use commercially reasonable efforts to assist DSW in recovering Insurance Proceeds under the Retail Ventures

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Insurance Policies for claims relating to the DSW Business, the assets of DSW or DSW Liabilities, whether such claims arise under any Contract or agreement, by operation of law or otherwise, existing or arising from any past acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed before the Offering Date, on the Offering Date or during the Insurance Transition Period, and Retail Ventures shall promptly pay any such recovered Insurance Proceeds to DSW. Neither Retail Ventures nor DSW, nor any of their respective Subsidiaries, shall take any action which would intentionally jeopardize or otherwise interfere with the other Party’s ability to collect any proceeds payable pursuant to any Insurance Policy. Except as otherwise contemplated by this Agreement or any other agreement between the Parties, after the Offering Date, neither Retail Ventures nor DSW (and each Party shall ensure that no affiliate of such Party), without the consent of the other Party, shall provide any insurance carrier with a release, or amend, modify or waive any rights under any such policy or agreement, if such release, amendment, modification or waiver would adversely affect any rights or potential rights of the other Party (or its Subsidiary) thereunder. However, nothing in this Section 6.02 shall (A) preclude any Retail Ventures Entity or any DSW Entity from presenting any claim or from exhausting any policy limit, (B) require any Retail Ventures Entity or any DSW Entity to pay any premium or other amount or to incur any Liability, or (C) require any Retail Ventures Entity or DSW Entity to renew, extend or continue any policy in force.

     SECTION 6.03. DSW Insurance Coverage After the Insurance Transition Period. From and after expiration of the Insurance Transition Period, DSW shall be responsible for obtaining and maintaining insurance programs for the DSW Entities’ risk of loss and such insurance arrangements shall be separate and apart from Retail Ventures’ insurance programs.

     SECTION 6.04. Deductibles and Self-Insured Obligations. DSW shall reimburse Retail Ventures for all amounts necessary to exhaust or otherwise to satisfy all applicable self-insured retentions, amounts for fronted policies, deductibles and retrospective premium adjustments and similar amounts not covered by Insurance Policies in connection with DSW Liabilities and Insured DSW Liabilities to the extent that Retail Ventures is required to pay any such amounts.

     SECTION 6.05. Procedures with Respect to Insured DSW Liabilities.

     (a) DSW shall reimburse Retail Ventures for all amounts incurred to pursue insurance recoveries from Insurance Policies for Insured DSW Liabilities.

     (b) The defense of claims, suits or actions giving rise to potential or actual Insured DSW Liabilities shall be managed (in conjunction with Retail Ventures’ insurers, as appropriate) by the Party that would have had responsibility for managing such claims, suits or actions had such Insured DSW Liabilities been DSW Liabilities.

     SECTION 6.06. Insufficient Limits of Liability for Retail Ventures Liabilities and DSW Liabilities.

     (a) In the event that there are insufficient limits of liability available under Retail Ventures’ Insurance Policies in effect prior to the Distribution Date to cover the Liabilities of Retail Ventures and/or DSW that would otherwise be covered by such Insurance Policies, then to the extent that other insurance is not available to Retail Ventures and/or DSW for such Liabilities an adjustment will be made in accordance with the following procedures:

          (i) To the extent the Parties are able to specifically quantify and verify the actual Liabilities incurred by each Party to the exclusion

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of the other Party, each Party will be allocated an amount equal to the product of (A) the actual Liabilities incurred by such Party, divided by the total actual Liabilities incurred by the Parties, times (B) the lesser of (1) the available limits of liability under Retail Ventures’ Insurance Policies in effect prior to the Distribution Date net of uncollectible amounts attributable to insurer insolvencies and (2) the proceeds received from Retail Ventures’ Insurance Policies if the Liabilities are the subject of disputed coverage claims and, following consultation with each other, Retail Ventures and/or DSW agree to accept less than full policy limits from Retail Ventures’ and DSW’s insurers (such available limits and/or proceeds being referred to as the “Coverage Amount”).

     (ii) To the extent that the Parties are unable to specifically quantify and verify any such Liabilities or any part of such Liabilities to each Party (to the exclusion of the other Party), each Party will be allocated an amount equal to their shared percentage of the Coverage Amount.

     (iii) A Party who receives more than its share of the Coverage Amount (the “Overallocated Party”) agrees to reimburse the other Party (the “Underallocated Party”) to the extent that the Liabilities of the Underallocated Party that would have been covered under such Insurance Policies is less than the Underallocated Party’s share of the Coverage Amount.

     (iv) This Section 6.06 shall terminate ten (10) years following the end of the Insurance Transition Period, unless terminated sooner in accordance with the provisions of this Agreement.

     SECTION 6.07. Cooperation. Retail Ventures and DSW shall cooperate with each other in all respects, and shall execute any additional documents which are reasonably necessary, to effectuate the provisions of this Article VI.

     SECTION 6.08. No Assignment or Waiver. This Agreement shall not be considered as an attempted assignment of any policy of insurance or as a contract of insurance and shall not be construed to waive any right or remedy of any Retail Ventures Entity in respect of any Insurance Policy or any other contract or policy of insurance.

     SECTION 6.09. No Liability. DSW does hereby, for itself and as agent for each other DSW Entity, agree that no Retail Ventures Entity or Retail Ventures Indemnified Person shall have any Liability whatsoever as a result of the insurance policies and practices of Retail Ventures and its Subsidiaries as in effect at any time prior to the end of the Insurance Transition Period, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy, or the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

     SECTION 6.10. Additional or Alternate Insurance. Notwithstanding any other provision of this Agreement, during the Insurance Transition Period, Retail Ventures and DSW shall work together to evaluate insurance options and secure additional or alternate insurance for DSW and/or Retail Ventures if desired by and cost effective for DSW and Retail Ventures. Nothing in this Agreement shall be deemed to restrict any DSW Entity from acquiring at its own expense any other Insurance Policy in respect of any Liabilities or covering any period.

     SECTION 6.11. Forbearance and Prior Insurance Coverage.

     (a) From and after the date of this Agreement, Retail Ventures shall not, and shall cause each of its Subsidiaries not to, take or fail to take any action if such action or inaction, as the case may be, would adversely affect

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the applicability of any insurance in effect on the effective date of this Agreement that covers all or any part of the assets, liabilities, business or employees of any DSW Entity with respect to events occurring prior to the Offering Date (“Applicable Insurance”), it being understood that in no event shall any Retail Venture Entity be obligated to pay premiums with respect to periods after the Offering Date in respect of Applicable Insurance.

     (b) Retail Ventures agrees that, from and after the Offering Date, all Applicable Insurance directly or indirectly applicable to any assets, liabilities, business or employees of any DSW Entity shall be for the benefit of the DSW Entity, it being understood that such Applicable Insurance shall also be for the benefit of the Retail Venture Entities to the extent directly or indirectly applicable to any assets, liabilities, business or employees of the Retail Venture Entities. Without limiting the generality of the foregoing, upon DSW’s reasonable request, Retail Ventures shall use its reasonable efforts to modify, amend or assign all Applicable Insurance policies and arrangements so that DSW is the direct beneficiary of such Applicable Insurance with all rights to enforce, obtain the benefit of and take all other action in respect of such Applicable Insurance; provided that, if the modifications, amendments or assignments contemplated by this Section 6.11(b) are not permissible, Retail Ventures shall, and shall cause each of its Subsidiaries to, use its reasonable efforts to enter into such other arrangements as DSW may reasonably request to ensure that DSW and the Subsidiaries of DSW are entitled to the benefit (to the fullest extent set forth in the relevant policies and arrangements) of any Applicable Insurance.

     SECTION 6.12. Further Agreements. The Parties acknowledge that they intend to allocate financial obligations without violating any laws regarding insurance, self-insurance or other financial responsibility. If it is determined that any action undertaken pursuant to this Agreement or any related agreement is violative of any insurance, self-insurance or related financial responsibility law or regulation, the Parties agree to work together to do whatever is necessary to comply with such law or regulation while trying to accomplish, as much as possible, the allocation of financial obligations as intended in this Agreement or any such related agreement.

ARTICLE VII
INFORMATION TECHNOLOGY EXECUTIVE STEERING COMMITTEE

     SECTION 7.01. Formation. Not later than 10 business days after the Agreement Date, the Parties shall appoint members to an information technology executive steering committee (the “Committee”) which shall consist of: three (3) members appointed by DSW; three (3) members appointed by Retail Ventures; and the Chairman of each of DSW and RVI and his or her designee. A member appointed by DSW shall chair the Committee. If either Party decides at any time to replace an appointed Committee member, it may do so by written notice to the other Party.

     SECTION 7.02. Meetings. The Committee shall meet, in person and/or by telephone, at such times and places as it may select but, in any event, it shall meet at least twice per year thereafter. Reasonable notice must be given in advance of all meeting dates. The first such meeting shall be held as soon as practicable, but in no event later than ninety (90) days after the Information Technology Services Transfer Date. To constitute a quorum for purposes of Committee decisions, each Party must be represented by at least two of the three members appointed by each Party. Committee members can give their proxy for voting on Committee decisions to other Committee members.

     SECTION 7.03. Purpose; Agenda; Minutes. As of the Information Technology Services Transfer Date, the Committee shall be responsible for identifying and reaching agreement on annual and interim proposed changes to

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the information technology infrastructure and information technology services to be maintained and provided by DSW, and, as necessary, the billing methodologies . Minutes of each Committee meeting shall be recorded.

     SECTION 7.04. Budget/Proposals. Prior to December 31, 2006 and each subsequent year so long as this Agreement is in effect, the Parties agree to work together and to cooperate with each other in good faith to develop an annual budget (“IT Annual Budget”) to reflect the estimated annual Service Costs to each Party for each of the Information Technology Services to be provided and/or procured by the other Party as contemplated by this Agreement. In the budgeting process, the Parties agree to use their reasonable efforts to harmonize the interests of the Parties to have quality services at affordable costs and to recover the costs of performing and/or procuring the Services. On or before December 31 of each calendar year, an Annual Budget for the next calendar year shall be submitted to the Committee for review and approval. The Committee may make exceptions to the billing methodologies described on Schedule II and in Article III. Additionally, either Party may present to the Committee an interim proposal for a specific change to DSW’s information technology infrastructure, and any such proposal shall include, at a minimum, (a) a statement of the anticipated outcomes of the proposed change, (b) an identification of the human resources, facilities and equipment that would be required to implement the proposed change, (c) a budget for the proposed change and a proposed allocation of the cost of the proposed change between the Parties, and (d) an estimated time schedule for implementation of the proposed change. The Committee may request additional information, accept a proposal as presented, accept a proposal subject to mutually agreed upon modifications, or reject a proposal. If a Party’s proposal is rejected, then the proposing Party shall nevertheless be free to implement the proposal independently so long as such implementation has no cost or material adverse impact on the other Party.

     SECTION 7.05. Information Technology Capital Expenditures. Before DSW shall be obligated to acquire any new or replacement information technology asset (equipment, computer software, etc.) that will be used for the benefit of any Retail Ventures Entity, the Committee shall determine whether such asset is a shared asset to be used for the benefit of one or more of the Retail Ventures Entities and one or more of the DSW Entities (each, a “DSW/RVI Shared Asset”), a shared asset that will be used primarily for the benefit of two or more of the Retail Ventures Entities (each, an “RVI Shared Asset”) or a dedicated asset that will be used primarily for the benefit of a single Retail Ventures Entity (each, an “RVI Dedicated Asset”).

     (a) DSW shall retain title to each DSW/RVI Shared Asset and to each RVI Shared Asset and shall recover the cost of each such asset in accordance with Sections 5 and 6 of Schedule II hereto. Retail Ventures hereby gives DSW the guarantee set forth in Schedule IV of timely payment by each of the Retail Ventures Entities of the amounts described in Sections 5 and 6 of Schedule II hereto that are applicable to each DSW/RVI Shared Asset and each RVI Shared Asset.

     (b) Each RVI Dedicated Asset will be treated as follows:

     (i) Promptly upon acquisition by DSW of an RVI Dedicated Asset that is to be used at a facility of a Retail Ventures Entity (e.g., a point-of-sale device) or an RVI Dedicated Asset that is to be provided to an employee of a Retail Ventures Entity (e.g., a laptop computer), DSW shall transfer title to such RVI Dedicated Asset to the applicable Retail Ventures Entity, and the applicable Retail Ventures Entity shall reimburse DSW for the purchase price, license fee and/or other consideration paid by DSW for such asset not later than thirty (30) days after acquisition of such asset. Retail Ventures hereby gives to DSW the guarantee set forth in Schedule IV of timely payment to DSW by the applicable Retail Ventures Entity of the purchase price, license fee and/or other consideration paid by DSW for each RVI Dedicated Asset; and

     (ii) DSW shall retain title to any RVI Dedicated Asset that is to be used at a DSW data center or other DSW facility and shall recover the cost of such RVI Dedicated Asset in accordance with Sections 5 and 6 of Schedule II hereto. Retail Ventures hereby gives to DSW the guarantee set forth in Schedule IV of timely payment to DSW by the applicable Retail Ventures Entity of such amounts, and Retail Ventures hereby agrees to purchase each RVI Dedicated Asset from DSW, for an amount equal to the net book value of such RVI Dedicated Asset on the date of purchase by Retail Ventures, on the earliest date that such RVI Dedicated Asset is no longer used for the benefit of the Retail Ventures Entity due to the sale of the equity or of all or substantially all of the assets of such Retail Ventures Entity, the cessation of operations of such Retail Ventures Entity or a strategic decision by such Retail Ventures Entity to cease use of such RVI Dedicated Asset.

ARTICLE VIII
ADDITIONAL AGREEMENTS

     SECTION 8.01. Annual Budget. Prior to December 31, 2006 and each subsequent year so long as this Agreement is in effect, the Parties agree to work together and to cooperate with each other in good faith to develop an annual budget (“Annual Budget”) to reflect the estimated annual Service Costs to each Party for each of the Services to be provided and/or procured by the other Party as contemplated by this Agreement. In the budgeting process, the Parties agree to use their reasonable efforts to harmonize the interests of the Parties to have quality services at affordable costs and to recover the costs of performing and/or procuring the Services. On or before December 31 of each calendar year, an Annual Budget for the next calendar year shall be submitted to the respective Controller or Chief Financial Officer of each of the Parties for review and approval. Such approval shall constitute approval of the Annual Budget by the Party represented by such person. During the months of July and January of each year so long as this Agreement is in effect, the Parties shall conduct a semi-annual reconciliation of actual Service Costs to budgeted Service Costs to determine if there are any significant discrepancies between such costs and, if so, whether the payments for services should be adjusted accordingly.

     SECTION 8.02. Employment Matters. During the Initial Term, neither Party shall, directly or indirectly, solicit active employees of the other Party without the other Party’s consent; provided that each Party agrees to give such consent if such Party believes, in good faith, that its consent is necessary to avoid the resignation of an employee from one Party that the other Party would like to employ.

     SECTION 8.03. Shared Expenses Agreement. The Parties agree to share certain costs and expenses related to the store facilities located at Four

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Union Square, New York, New York, pursuant to the terms and conditions set forth in the Shared Expenses Agreement between the Parties (the “Shared Expenses Agreement”).

ARTICLE VIII
MISCELLANEOUS

     SECTION 9.01. Prior Agreements. In the event there is any conflict between the provisions of this Agreement, on the one hand, and the provisions of prior services agreements among any Retail Venture Entity and any DSW Entity (the “Prior Agreements”), on the other hand, the provisions of this Agreement shall govern and such provisions in the Prior Agreements are deemed to be amended so as to conform with this Agreement.

     SECTION 9.02. Other Agreements. In the event there is any inconsistency between the provisions of this Agreement and the respective provisions of the Master Separation Agreement, the Tax Separation Agreement and the Exchange Agreement, respectively, the respective provisions of the Master Separation Agreement, the Tax Separation Agreement and the Exchange Agreement shall govern.

     SECTION 9.03. Future Litigation and Other Proceedings. In the event that DSW (or any of its Subsidiaries or any of its or their respective officers or directors) or Retail Ventures (or any of its Subsidiaries or any of its or their respective officers or directors) at any time after the date hereof initiates or becomes subject to any litigation or other proceedings before any governmental authority or arbitration panel with respect to which the Parties have no prior agreements (as to indemnification or otherwise), the Party (and its Subsidiaries and its and their respective officers and directors) that has not initiated and is not subject to such litigation or other proceedings shall comply, at the other Party’s expense, with any reasonable requests by the other Party for assistance in connection with such litigation or other proceedings (including by way of provision of information and making available of associates or employees as witnesses). In the event that DSW (or any of its Subsidiaries or any of its or their respective officers or directors) and Retail Ventures (or any of its Subsidiaries or any of its or their respective officers or directors) at any time after the date hereof initiate or become subject to any litigation or other proceedings before any governmental authority or arbitration panel with respect to which the Parties have no prior agreements (as to indemnification or otherwise), each Party (and its officers and directors) shall, at their own expense, coordinate their strategies and actions with respect to such litigation or other proceedings to the extent such coordination would not be detrimental to their respective interests and shall comply, at the expense of the requesting Party, with any reasonable requests of the other Party for assistance in connection therewith (including by way of provision of information and making available of employees as witnesses).

     SECTION 9.04. No Agency. Nothing in this Agreement shall constitute or be deemed to constitute a partnership or joint venture between the Parties hereto or, except to the extent provided in Section 4.02, constitute or be deemed to constitute any Party the agent or employee of the other Party for any purpose whatsoever, and neither Party shall have authority or power to bind the other Party or to contract in the name of, or create a liability against, the other Party in any way or for any purpose.

     SECTION 9.05. Subcontractors. Either Retail Ventures or DSW may hire or engage one or more subcontractors to perform all or any of its obligations under this Agreement; provided that, subject to Section 4.03, Retail Ventures and DSW, as the case may be, shall in all cases remain primarily responsible for all obligations undertaken by it in this Agreement with respect to the scope, quality and nature of the Services provided to the other Party and, provided further, that, in each case, the use of a subcontractor to perform

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such Party’s obligations would not substantially increase the costs to the other Party without the prior written consent of the other Party.

     SECTION 9.06. Force Majeure.

     (a) For purposes of this Section 9.06, “Force Majeure” means an event beyond the control of either Party, which by its nature could not have been foreseen by such Party, or, if it could have been foreseen, was unavoidable, and includes without limitation, acts of God, storms, floods, riots, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) and failure of energy sources.

     (b) Without limiting the generality of Section 4.03, neither Party shall be under any liability for failure to fulfill any obligation under this Agreement, so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered, or delayed as a consequence of circumstances of Force Majeure; provided that such Party shall have exercised all commercially reasonable due diligence to minimize to the greatest extent possible the effect of Force Majeure on its obligations hereunder.

     (c) Promptly on becoming aware of Force Majeure causing a delay in performance or preventing performance of any obligations imposed by this Agreement (and termination of such delay), the Party affected shall give written notice to the other Party giving details of the same, including particulars of the actual and, if applicable, estimated continuing effects of such Force Majeure on the obligations of the Party whose performance is prevented or delayed. If such notice shall have been duly given, and actual delay resulting from such Force Majeure shall be deemed not to be a breach of this Agreement, the period for performance of the obligation to which it relates shall be extended accordingly; provided that if Force Majeure results in the performance of a Party being delayed by more than 60 days, the other Party shall have the right to terminate this Agreement with respect to any Service affected by such delay forthwith by written notice.

     SECTION 9.07. Entire Agreement. This Agreement (including the Schedules constituting a part of this Agreement) and any other writing signed by the Parties that specifically references or is specifically related to this Agreement constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the Parties with respect to the subject matter hereof. This Agreement is not intended to confer upon any Person other than the Parties hereto any rights or remedies hereunder.

     SECTION 9.08. Information. Subject to applicable law and privileges, each Party hereto covenants with and agrees to provide to the other Party all information regarding itself and transactions under this Agreement that the other Party reasonably believes is required to comply with all applicable federal, state, county and local laws, ordinances, regulations and codes, including, but not limited to, securities laws and regulations.

     SECTION 9.09. Notices. Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile transmission, or mail (with postage prepaid), to the following addresses:

(a)	If to DSW, to:
	Peter Horvath DSW Inc. 4150 East 5th Avenue Columbus, OH 43219 Fax: (614) 872-1464

19

	With a copy to:
	DSW Inc. Attn: General Counsel
	4150 East 5th Avenue Columbus, Ohio 43219 Fax: (614) 872-1464
(b)	If to Retail Ventures, to:
	Jim McGrady Retail Ventures, Inc. 3241 Westerville Road Columbus, OH 43224 Fax: 614-473-2721
	With a copy to:
	Retail Ventures, Inc. Attn: General Counsel 3241 Westerville Road Columbus, Ohio 43224 Fax: 614-337-4682

or to such other addresses or telecopy numbers as may be specified by like notice to the other Party.

     SECTION 9.10. Governing Law. This Agreement shall be construed in accordance with and governed by the substantive internal laws of the State of Ohio, excluding its conflict of laws rules.

     SECTION 9.11. Severability. If any terms or other provision of this Agreement or the Schedules or exhibits hereto shall be determined by a court, administrative agency or arbitrator to be invalid, illegal or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather, this Agreement shall be construed as if not containing the particular invalid, illegal or unenforceable provision, and all other provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent permitted under applicable law.

     SECTION 9.12. Amendment. This Agreement may only be amended by a written agreement executed by both Parties hereto.

     SECTION 9.13. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same agreement.

     SECTION 9.14. Authority. Each of the Parties represent to the other Party that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary corporate or other actions, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles.

20

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their duly authorized representatives.

DSW INC.
By:	/s/ Peter Z. Horvath
Name: Peter Z. Horvath
Title: President
RETAIL VENTURES, INC.
By:	/s/ James A. McGrady
Name: James A. McGrady
Title: Chief Financial Officer

21

SCHEDULE I
TO
AMENDED AND RESTATED
SHARED SERVICES AGREEMENT
DATED October 29, 2006
BETWEEN
RETAIL VENTURES, INC.
AND
DSW INC.

SERVICES TO BE PROVIDED BY RETAIL VENTURES, INC. AND RETAIL VENTURES
SERVICES, INC.

DESCRIPTION OF RETAIL VENTURES SERVICE		RETAIL VENTURES SERVICE COSTS OR BILLING METHODOLOGY TO DSW
1.	GENERAL CORPORATE AND FINANCIAL SERVICES:
	(i) PAYROLL SERVICES (including preparation and distribution of employee checks; payment of payroll taxes, garnishment and other deductions to appropriate parties; preparation and filing of employer tax returns; and preparation of annual W-2s for employees)	Billing pro-rata based upon number of DSW employee checks and Form W-2s issued by Retail Ventures. To be billed weekly in arrears.
	(ii) TREASURY SERVICES (including cash management; processing and paying invoices and purchase orders; monthly consolidation of financial statements; and preparation of checks for vendor payment and employee reimbursement)	DSW to pay $1,000.00 per month and any stand-alone cash management software and corresponding support costs if added for DSW Services only.
	(iii) Sox and AUDITING Fees (including coordination of external audit services and assistance with compliance with Sarbanes-Oxley requirements)	Shared costs to be allocable based on Percent of Sales Billing.
	(iv) ACCOUNTS PAYABLE, GENERAL LEDGER, SALES AUDIT, BUDGET SERVICES- AND INVENTORY CONTROL. GENERAL LEDGER INCLUDES, BUT IS NOT LIMITED TO, PREPARATION OF QUARTERLY,	Overhead costs to be allocated based on time spent by associates, which will be reviewed and determined annually.
		Sales Audit charges to include fees
	ANNUAL AND OTHER SEC REPORTS; ASSISTANCE WITH THE PREPARATION OF ANNUAL REPORT TO SHAREHOLDERS AND EARNINGS RELEASES; AND PREPARATION OF ERISA REPORTS.	associated with software agreements that support DSW Entities.

1

DESCRIPTION OF RETAIL VENTURES SERVICE		RETAIL VENTURES SERVICE COSTS OR BILLING METHODOLOGY TO DSW
	(v) TAX SERVICES (including preparation and filing of all federal, state and local tax returns, reports and other required filings; coordination and management of tax audits and other similar proceedings; and assistance with tax planning, tax strategy and compliance with the Tax Separation Agreement)	See Tax Separation Agreement between DSW and Retail Ventures.
	(vi) Controller Services	Cost to be shared by DSW and Retail Ventures on a 50/50 basis.
	(vii) SSC Corporate Services	Charges incurred on behalf of DSW entities will be allocated to DSW. Charges billed to other cost centers listed in these Agreement Schedules will be billed under the applicable cost center’s methodology. General, unallocable charges to be allocated based on Percent of Sales billing.
2.	HUMAN RESOURCES (ALL COST CENTERS)	Pass-Through Billing with respect to costs directly related to DSW Entities.
		DSW to pay pro-rata share of overhead costs per employee of DSW Entities, subject to adjustment semi-annually.
3.	IMPORT MANAGEMENT AND COMPLIANCE	Pass-Through Billing with respect to costs directly related to DSW Entities. Importing fees (including U.S. Customs fees, Duties, Commissions, Ocean Freight, Excel/APL Logistic Carrier fees and other associated expense) are allocated to the businesses by invoice (which historically is a one-to-one relationship to container) to the ratio of the container contents to the whole containers/trailer.
		DSW to pay a percentage of the overhead costs based upon percentage of usage. The overhead allocation percentage will be reviewed and determined annually.

2

DESCRIPTION OF RETAIL VENTURES SERVICE	RETAIL VENTURES SERVICE COSTS OR BILLING METHODOLOGY TO DSW
4. LEGAL SERVICES (including general legal advice from in-house legal staff; preparation and review of SEC filings and proxy materials; assistance with corporate resolutions and preparations for shareholders meetings; overseeing and managing legal policy and strategy regarding litigation and regulatory compliance)	Pass-Through Billing with respect to costs directly related to DSW Entities. Department overhead costs and general, unallocable professional fees to be allocated based on Percent of Sales Billing.
5. RISK MANAGEMENT (including management of insurance and workers compensation coverage; administration of claims services; negotiation and acquisition of insurance coverages including, but not limited to, property and business interruption, casualty (including workers compensation), director and officer liability and other liability coverages)	a) Insurance premium costs billed as specified in Schedule III. b) Overhead costs are billed on the weighted value of administrative time directed to DSW entities for (i) Workers’ Compensation, (ii) General Liability and (iii) Property & All Other Lines combined with the ratio of the number of claims that are directly related to DSW Entities to the total number of claims for (i) Workers’ Compensation, (ii) General Liability and (iii) Property & All Other Lines.
6. INTERNAL AUDIT	Overhead costs to be allocated based on Percent of Sales Billing.
7. RVI CORPORATE EXECUTIVE OVERHEAD ALLOWANCE	DSW will pay 35% of the total overhead of this cost center that is associated with the CFO of RVI. It will exclude the costs associated with the CEO of RVI.
8. DISTRIBUTION SERVICES	DSW will pay 10% of total overhead costs for this department.
9. LETTERS OF CREDIT ASSOCIATED WITH WORKERS’ COMPENSATION AND IBNR	DSW to be billed 15% of costs associated with letters of credit for workers compensation and IBNR.
10. DEPRECIATION OF IT ASSETS (CURRENT COST CENTERS including 01109, 01321, 01325, 01326, 01328, 01329, 01330, 01331, 01332, 01333)	Service fee charged to DSW for depreciation expenses associated with IT Assets used to provide shared service. The billable charge for depreciation expenses is based on Percent of Sales Billing, unless otherwise agreed by the Parties or determined by the Information Technology Executive Steering Committee.

3

SCHEDULE II
TO

AMENDED AND RESTATED
SHARED SERVICES AGREEMENT
DATED October 29, 2006
BETWEEN
RETAIL VENTURES, INC.
AND
DSW INC.

SERVICES TO BE PROVIDED BY DSW INC.

DESCRIPTION OF DSW SERVICE		DSW SERVICE COSTS OR BILLING METHODOLOGY TO RETAIL VENTURES
1.	SHOE MERCHANDISING:
	(i) PLANNING AND ALLOCATION SUPPORT for Value City Department Stores, LLC	Value City to pay the amount per month reflecting the agreed value of the use of DSW systems services.
2.	DISTRIBUTION
	(i) DISTRIBUTION SERVICES AND TRANSPORTATION MANAGEMENT for Value City Department Stores, LLC and Filene’s Basement	(i) Retroactive to October 1, 2006, Value City to pay 60¢ per pair to process shoes during the term of the Agreement, with no extra charge for overhead variances or any other cost associated with processing Value City’s shoes. In the event that the “Reasonable Expectation Program” installed at DSW, or any other cost reduction realized by DSW, results in an actual cost to process Value City shoes that is less than 60¢ per pair, the cost per pair to process shoes for Value City shall be reduced based on quarterly actual cost. The per-pair cost set forth herein shall remain in effect through January 30, 2011 or any earlier date on which Retail Ventures or DSW terminates shoe processing services for Value City in accordance with the Agreement. (ii) Transportation Costs- both inbound and outbound transportation costs (inclusive of wages, associated payroll costs, occupancy expenses and operating expenses) are allocated to the respective businesses according to current month activity, which is based on merchandise receipts as determined by dollar value. Value City may use its own carriers for inbound transportation. In the event that Value City uses its own carriers for inbound transportation, such merchandise receipts shall be excluded from the allocation of expenses and

1

DESCRIPTION OF DSW SERVICE		DSW SERVICE COSTS OR BILLING METHODOLOGY TO RETAIL VENTURES
		DSW shall have no responsibility or accountability for the merchandise until it is received at the DSW distribution center.
		(iii) Professional fees to be billed on the weighted average cost per case of the pools that Value City Shoes utilizes.
3.	PROPERTY MANAGEMENT	Overhead costs to be allocated based on time spent by associates, which will be reviewed and determined annually. Related outside contractors/consultant costs, including legal services, allocated based on pass-through billing.
4.	STORE DESIGN AND CONSTRUCTION MANAGEMENT	A 5% service fee based on total development costs per project, plus expenses incurred by DSW on RVI projects. Overhead costs allocated on the proportion of RVI projects to total projects (extraordinary projects to be determined on a project by project basis). Standard American Institute of Architects (AIA) form of “Agreement between Owner and Design/Builder” to be used as design and construction management agreement between DSW and Retail Ventures.
5.	INFORMATION TECHNOLOGY (ALL COST CENTERS)	Pass-Through Billing with respect to costs directly related to Retail Ventures Entities. Percent of Sales Billing with respect to overhead and Services shared by DSW Entities and Retail Ventures Entities, unless otherwise agreed by the Parties or determined by the Information Technology Executive Steering Committee.
6.	DEPRECIATION OF IT ASSETS	Service fee charged to Retail Ventures for depreciation expenses associated with IT Assets used to provide shared service. The billable charge for depreciation expenses is based on Percent of Sales Billing, unless otherwise agreed by the Parties or determined by the Information Technology Executive Steering Committee.

2

DESCRIPTION OF DSW SERVICE		DSW SERVICE COSTS OR BILLING METHODOLOGY TO RETAIL VENTURES
7.	Legal Services	Pass-Through Billing with respect to costs directly related to RVI Entities.
		Professional fees related to shared services provided by DSW to be allocated based upon Percent of Sales Billing unless otherwise agreed.
		Any overhead costs for time spent on matters performed on behalf of RVI Entities shall be at an agreed upon price.

3

SCHEDULE III
TO
AMENDED AND RESTATED
SHARED SERVICES AGREEMENT
DATED October 29, 2006
BETWEEN
RETAIL VENTURES, INC.
AND
DSW INC.

INSURANCE POLICIES MAINTAINED BY RETAIL VENTURES

     The Insurance Polices described in Part (a) below shall be maintained by Retail Ventures, Inc. (“Retail Ventures”) on behalf of DSW Inc. (“DSW”) and its Subsidiaries pursuant to the terms of the Amended and Restated Shared Services Agreement between Retail Ventures and DSW dated October 29, 2006, of which this Schedule is a part. The insurance premiums related to such policies to be paid by DSW, or for which Retail Ventures shall be reimbursed by DSW, are set forth or described in Part (b) of this Schedule. Capitalized terms not otherwise defined in this Schedule shall have the respective meanings assigned to them in the Amended and Restated Shared Services Agreement.

(a) LIST OF INSURANCE POLICIES

(i)

Liability: Steadfast Insurance Co. #SCO3822186-02 – primary – $1MM/occurrence XL Insurance Co. #US00007102LI04A – umbrella — $25MM/occ/agg Ohio Casualty Co. #ECO(05)52976611, excess GL – $25MM/occ/agg American Guarantee # AEC5086837500 – excess GL – $50MM/occ/agg Liberty Mutual Ins. #LQ1-B71 –078764032 – excess GL – $50MM/occ/agg ACE Ins. Group #HXW776336 — excess GL – $25MM/occ/agg Great American Ins. #TUE357977102 – excess GL – $25MM/occ/agg

(ii)

Property FM Global Insurance #NB918 — $1,000,000,000 blanket limit Ace/Westchester #I20651258002 – excess flood – $10MM Great American #CPP5385581 & #ACG4285581 – excess flood – $5MM Arrowhead Group #303219EQ1 – excess earthquake – $3MM North Shore Mgmt. #NSM24310 – excess earthquake – $12MM FM Global #NB918 – Swanson primary earthquake – $1MM Federal Flood Policies – various locations & policy numbers — $500K

1

(iii)	Automobile St. Paul Travelers #TC2JCAP393K338 – $2MM combined single limit
(iv)	Cargo Lloyd’s #CD044747 – primary cargo – $10MM/conveyance Lloyd’s #CD044765 – excess cargo – $5MM/conveyance
(v)	Worker Compensation St. Paul Travelers #TC2JUB466K1644 – statutory limits St. Paul Travelers #TRJUB466K1656 – retro AZ, MA & WI only Ohio –Self-insured under S120005342 West Virginia – Self-insured (effective no later than 1/1/07)
(vi)	Director and Officer Liability Insurance Chubb #6802-9501 – primary — $10MM XL Specialty #ELU09312106___– excess D&O – $10MM AWAC US #___AW6294743 – excess D&O – $10MM RSUI #___NHS621943 – excess D&O – $10MM AXIS #___RAN714919012006 – excess D&O – $10MM Arch Insurance Co. #___DOX0007876-01 – excess D&O – $10MM Houston Casualty #___14_MGU-06-A12538 – excess D&O – $10MM Great American #___NSX5236478 – excess D&O – $10MM Liberty Mutual #___D03AT366109002 – excess D&O – $10MM National Union (AIG) #___6726927 – excess D&O – $10MM XL Specialty #___ELU09312206 – Side A coverage – $10MM
(vii)	Executive Protection Insurance National Union (AIG) #006082944 – crime – $10MM National Union (AIG) #647-5648 – special crime (K&R) – $10MM
(viii)	Other Fireman’s Fund #MXI97900076 – motor truck cargo – $250K/vehicle XL Insurance #XLPUN1502904 – excess punitives – $25MM agg Magna Carta #MCPD201467 – excess punitives – $25MM agg National Union #006731374 – fiduciary Continental Insurance Company #PST283529925 – foreign package — $1MM/occ

(b)	CALCULATION OF PREMIUM
	(i) DSW shall promptly pay or reimburse Retail Ventures 100% of premium expenses, deductibles or retention amounts Retail Ventures may incur in connection with Insurance Policies that relate solely to the DSW Business.

2

(ii) DSW shall promptly pay or reimburse Retail Ventures 50% of premium expenses, deductibles or retention amounts Retail Ventures may incur in connection with Retail Ventures’ Director and Officer Liability Insurance and Executive Protection Insurance.

(iii) DSW shall promptly pay or reimburse Retail Ventures its proportionate share of premium expenses, deductibles or retention amounts Retail Ventures may incur in connection with Insurance Policies that relate the Retail Ventures Business and the DSW Business. The “Retail Ventures Business” means any business of Retail Ventures other than the DSW Business. DSW’s proportionate will be calculated as follows:

     (A) LIABILITY INSURANCE costs shall be prorated based on the ratio of DSW’s sales as compared to total sales.

     (B) PROPERTY INSURANCE costs shall be prorated based on the ratio of the value of DSW property covered by the insurance policy as compared to the total value of all property covered by the insurance policy. [“VALUE OF PROPERTY” IS DEFINED AS RETAIL INVENTORY, FIXTURES, LEASEHOLDS, REAL PROPERTY, RENTAL INCOME AND BUSINESS INTERRUPTION.]

     (C) AUTOMOBILE INSURANCE costs shall be charged on each insured vehicle owned or leased by DSW which is covered by the insurance policy.

     (D) CARGO INSURANCE costs shall be prorated based on the ratio of the duties paid for DSW imports covered by the insurance policy as compared to the total duties paid for all imports covered by the insurance policy.

     (E) WORKERS COMPENSATION costs shall be prorated based on an actual per state rate against projected payrolls plus estimated claims cost per location.

     (F) EXECUTIVE PROTECTION AND OTHERS—Executive Protection Insurance (or crime), and foreign package coverage shall be prorated based on the ratio of sales for DSW as compared to the total sales covered by the policy. Fiduciary coverage for benefit plans shall be allocated based on 401K deposit percentages. Federal Flood Program policies are allocated to each location for which a policy is required to be purchased based on its Federal Flood Zone determination.

3

SCHEDULE IV
TO
AMENDED AND RESTATED
SHARED SERVICES AGREEMENT
DATED October 29, 2006
BETWEEN
RETAIL VENTURES, INC.
AND
DSW INC.

GUARANTEE

THIS GUARANTEE is made by RETAIL VENTURES, INC. (the “Guarantor”) in favor of DSW, INC. (“DSW”) in respect of the obligations of any one or more of the subsidiaries of the Guarantor other than DSW or any DSW subsidiary (the “Obligor(s)”) that may arise under that certain Amended and Restated Shared Services Agreement between the Guarantor and DSW, dated as of October 29, 2006 (the “Shared Services Agreement”) to pay to DSW certain amounts that may become due under and in accordance with Section 7.05 of the Shared Services Agreement (each, an “Obligation”).

In consideration of DSW acquiring certain information technology assets (equipment, computer software, etc.) for the benefit of one or more Obligors, the receipt and sufficiency of which are hereby acknowledged by the Guarantor, the Guarantor hereby agrees as follows:

1)	To the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, the Guarantor hereby absolutely, irrevocably and unconditionally guarantees to DSW and its assignees the timely payment to DSW or its assignees of all Obligations. Without limiting the generality of the foregoing, DSW may at any time and from time to time, without notice to or consent of the Guarantor and without impairing or releasing the obligations of the Guarantor, (a) agree with any Obligor to make any change in the terms of any obligation or liability of such Obligor to DSW, (b) take or fail to take any action of any kind in respect of any security for any obligation or liability of any Obligor to DSW, (c) exercise or refrain from exercising any rights against any Obligor, or (d) compromise or subordinate any obligation or liability of any Obligor to DSW, including any security therefor.
2)	In the event that an Obligor shall fail to make timely payment to DSW of all or any portion of an Obligation when due, the Guarantor shall remit to DSW, on the business day immediately following DSW’s request, payment of the full amount of such Obligation. The Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement for DSW to pursue or exhaust any of its rights or remedies against the Obligor with respect to performance of any of the Obligations, and the Guarantor hereby waives any right to require that DSW seek enforcement of any performance against an Obligor or any other person, prior to any action against the Guarantor under the terms of this Guarantee.
3)	DSW shall not be obligated to file any claim relating to an Obligation in the event that an Obligor becomes subject to any insolvency, bankruptcy, receivership, assignment for the benefit of creditors or reorganization of such Obligor, or any similar proceedings by or against such Obligor or the assets of such Obligor, in order to maintain DSW’s rights under this Guarantee, and the failure of DSW to so file shall not affect the Guarantor’s obligations hereunder. The liability of the Guarantor shall not be released, reduced, impaired or affected by or as a result of any insolvency, bankruptcy, receivership, assignment for the benefit of creditors or reorganization of an Obligor, or any similar proceedings instituted by or against an Obligor or the assets of an Obligor. The obligations of the Guarantor hereunder shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Obligor in respect of an Obligation is rescinded or must be otherwise restored by DSW, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and the Guarantor agrees that it will indemnify DSW on demand for all reasonable costs and expenses (including, without limitation, fees and expenses of counsel) incurred by DSW in connection with such rescission or restoration, including any such costs and expenses

4

	incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.
4)	This Guarantee is a guarantee of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations whenever arising.
5)	This Guarantee shall remain in effect for the entire term of the Shared Services Agreement and thereafter until all Obligations of each Obligor have been indefeasibly satisfied in full.
6)	This Guarantee shall inure to the benefit of and be enforceable by DSW and its successors, assign(s) or other transferee(s) and shall be deemed to have been made under, and shall be governed by, the laws of the State of Ohio, excluding its conflicts of laws rules. None of the terms of this Guarantee may be waived, altered, modified or amended except in writing signed by the Guarantor and DSW.
7)	All notices or other communications to the Guarantor or DSW shall be in writing and shall be given in the same manner and with the same effect as set forth in Section 9.09 of the Shared Services Agreement. The address of Guarantor is as follows:
	Retail Ventures, Inc. 3241 Westerville Road Columbus, Ohio 43224

IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed and delivered by its duly authorized officers effective as of the 29^th day of October, 2006.

RETAIL VENTURES, INC.
By:	/s/ James A. McGrady
Name: Title:	James A. McGrady Chief Financial Officer

5

EX-31.1 9 l23543aexv31w1.htm EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Jay L. Schottenstein, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of DSW Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	[Reserved];
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the

registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 6, 2006	/s/ Jay L. Schottenstein
	Jay L. Schottenstein
	Chief Executive Officer and Chairman of the Board

EX-31.2 10 l23543aexv31w2.htm EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Douglas J. Probst, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of DSW Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	[Reserved];
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the

registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 6, 2006	/s/ Douglas J. Probst
	Douglas J. Probst
	Chief Financial Officer

EX-32.1 11 l23543aexv32w1.htm EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

     In connection with the Quarterly Report of DSW Inc. (the “Company”) on Form 10-Q for the period ending October 28, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jay L. Schottenstein, Chief Executive Officer and Chairman of the Board of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

          (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

December 6, 2006	/s/ Jay L. Schottenstein
	Jay L. Schottenstein
	Chief Executive Officer and Chairman of the Board

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2 12 l23543aexv32w2.htm EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

     In connection with the Quarterly Report of DSW Inc. (the “Company”) on Form 10-Q for the period ending October 28, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Douglas J. Probst, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

          (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

December 6, 2006	/s/ Douglas J. Probst
	Douglas J. Probst
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.7

Exhibit 10.7

AMENDED AND RESTATED

SHARED SERVICES AGREEMENT

DATED AS OF October 29, 2006

BETWEEN

DSW INC.

AND

RETAIL VENTURES, INC.

TABLE OF CONTENTS

	Page
ARTICLE I DEFINITIONS		1
SECTION 1.01. Definitions		1
SECTION 1.02. Internal References		5
ARTICLE II PURCHASE AND SALE OF SERVICES		5
SECTION 2.01. Purchase and Sale of Retail Ventures Services		5
SECTION 2.02. Purchase and Sale of DSW Services		5
SECTION 2.03 Additional Services		5
ARTICLE III SERVICE COSTS; OTHER CHARGES		6
SECTION 3.01. Service Costs Generally		6
SECTION 3.02. Customary Billing		6
SECTION 3.03. Pass-Through Billing		6
SECTION 3.04. Percent of Sales Billing		7
SECTION 3.05. Benefit Billing		7
SECTION 3.06. Invoicing and Settlement of Costs		7
ARTICLE IV STANDARD OF PERFORMANCE AND INDEMNIFICATION		8
SECTION 4.01.		8
(i)General Standard of Service		8
SECTION 4.02. Delegation		9
SECTION 4.03. Limitation of Liability		9
SECTION 4.04. Indemnification Related to Retail Ventures Services		10
SECTION 4.05. Indemnification Related to DSW Services		11
ARTICLE V TERM AND TERMINATION		12
SECTION 5.01. Term		12
SECTION 5.02. Termination		12
SECTION 5.03. Effect of Termination		12
ARTICLE VI INSURANCE MATTERS		13
SECTION 6.01. DSW Insurance Coverage During Transition Period		13
SECTION 6.02. Cooperation; Payment of Insurance Proceeds to DSW; Agreement Not to Release Carriers		13
SECTION 6.03. DSW Insurance Coverage After the Insurance Transition Period		14
SECTION 6.04. Deductibles and Self-Insured Obligations		14
SECTION 6.05. Procedures with Respect to Insured DSW Liabilities		14

- i - 

	Page
SECTION 6.06. Insufficient Limits of Liability for Retail Ventures Liabilities and DSW Liabilities		14
SECTION 6.07. Cooperation		15
SECTION 6.08. No Assignment or Waiver		15
SECTION 6.09. No Liability		15
SECTION 6.10. Additional or Alternate Insurance		15
SECTION 6.11. Forbearance and Prior Insurance Coverage		15
SECTION 6.12. Further Agreements		16
ARTICLE VII INFORMATION TECHNOLOGY EXECUTIVE STEERING COMMITTEE		16
SECTION 7.01. Formation		16
SECTION 7.02. Meetings		16
SECTION 7.03. Purpose; Agenda; Minutes		16
SECTION 7.04. Budget/Proposals		17
SECTION 7.05. Information Technology Capital Expenditures		17
ARTICLE VIII ADDITIONAL AGREEMENTS		18
SECTION 8.01. Annual Budget		18
SECTION 8.02. Employment Matters		18
SECTION 8.03. Shared Expenses Agreement		18
ARTICLE VIII MISCELLANEOUS		18
SECTION 9.01. Prior Agreements		18
SECTION 9.02. Other Agreements		19
SECTION 9.03. Future Litigation and Other Proceedings		19
SECTION 9.04. No Agency		19
SECTION 9.05. Subcontractors		19
SECTION 9.06. Force Majeure		19
SECTION 9.07. Entire Agreement		20
SECTION 9.08. Information		20
SECTION 9.09. Notices		20
SECTION 9.10. Governing Law		21
SECTION 9.11. Severability		21
SECTION 9.12. Amendment		21
SECTION 9.13. Counterparts		21
SECTION 9.14. Authority		21

- ii -

SCHEDULES

SCHEDULE I:	Services To Be Provided By Retail Ventures, Inc.
SCHEDULE II:	Services To Be Provided By DSW Inc.
SCHEDULE III:	Insurance Policies Maintained by Retail Ventures, Inc.

- iii -

AMENDED AND RESTATED
SHARED SERVICES AGREEMENT

     This Amended and Restated Shared Services Agreement is entered into to be effective as of October 29, 2006 by and between DSW Inc., an Ohio corporation (“DSW”), and Retail Ventures, Inc. an Ohio corporation (“Retail Ventures”). DSW and Retail Ventures are sometimes being referred to herein separately as a “Party” and together as the “Parties”. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Article I hereof.

RECITALS

     WHEREAS, the Articles of Incorporation of DSW authorize 170,000,000 Class A common shares, without par value (the “Class A common shares”) and 100,000,000 Class B common shares, without par value (the “Class B common shares”);

     WHEREAS, DSW made an initial public offering (the “Offering”) of an amount of Class A common shares pursuant to a registration statement on Form S-1 under the Securities Act of 1933, as amended (the “Registration Statement”);

     WHEREAS, immediately following consummation of the Offering, Retail Ventures owned and continues to own Class B common shares evidencing at least 80.1% of the combined voting power of the holders of the Class A common shares and the Class B common shares with respect to all shareholder matters;

     WHEREAS, prior to the consummation of the Offering, Retail Ventures directly or indirectly provided certain financial, management and other services to the DSW Entities (as defined below), and DSW directly or indirectly provided certain administrative, management and other services to the Retail Ventures Entities (as defined below);

     WHEREAS, in connection with the consummation of the Offering, each Party set forth in the Initial Agreement (as defined below) the principal terms and conditions pursuant to which certain services were to be provided by it to, and certain services were to be provided to it by, the other Party; and

     WHEREAS, the Parties now wish to amend and restate the Initial Agreement for purposes of (a) transferring responsibility for certain Information Technology Services (as defined below) from Retail Ventures to DSW;(b) modifying certain terms applicable to the Shoe Processing Services (as defined below); and (c) other amendments to reflect agreed upon changes in shared services, all in accordance with the terms of this Agreement;

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, for themselves and their respective successors and assigns, hereby covenant and agree as follows:

ARTICLE I DEFINITIONS

     SECTION 1.01. Definitions. (a) As used in this Agreement, the following terms shall have the following meanings, applicable both to the singular and the plural forms of the terms described:

     “Agreement” means this Amended and Restated Shared Services Agreement, together with the schedules and exhibits hereto, as the same may be amended and supplemented from time to time in accordance with the provisions hereof.

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     “Agreement Date” means the effective date of this Agreement first set forth above.

     “Billing Party Entities” means (a) with respect to Services for which DSW is the Billing Party, DSW Entities, and (b) with respect to Services for which Retail Ventures is the Billing Party, Retail Ventures Entities.

     “Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York or Columbus, Ohio are authorized or required by law to close.

     “Contract” means any contract, agreement, lease, license, sales order, purchase order, instrument or other commitment that is binding on any Person or any part of such Person’s property under applicable law.

     “Department” means a business section or division of a Party.

     “Distribution Date” means the date on which Retail Ventures is no longer required to consolidate DSW’s results of operations and financial condition (determined in accordance with generally accepted accounting principles consistently applied) with Retail Ventures’ results of operations and financial condition.

     “DSW Business” means the specialty branded footwear retail business engaged in by DSW, as more completely described in the Registration Statement, and any businesses added under the control of DSW.

     “DSW Entities” means DSW Inc. and its Subsidiaries, and “DSW Entity” means any one of the DSW Entities.

     “DSW Liabilities” has the meaning set forth in the Master Separation Agreement.

     “DSW Services” means the various services to be provided by DSW on behalf of or for the Retail Ventures Entities as described in this Agreement and/or in Schedule II.

     “Exchange Agreement” means an agreement between the parties relating to the exchange of Class A common shares for Class B common shares.

     “Information Technology Services” means those services referenced on Schedule II that were provided by or on behalf of Retail Ventures before the Information Technology Services Transfer Date and will be provided by DSW after the Information Technology Services Transfer Date.

     “Information Technology Services Transfer Date” shall mean the date that is mutually agreed upon by the Parties for transfer of responsibility for performance of the Information Technology Services from Retail Ventures to DSW.

     “Initial Agreement” means the Shared Services Agreement between DSW and Retail Ventures, dated as of January 30, 2005, together with the schedules and exhibits thereto.

     “Insurance Policies” means insurance policies pursuant to which a Person makes a true risk transfer to an insurer.

     “Insurance Proceeds” means those monies: (a) received by an insured from an insurance carrier; or (b) paid by an insurance carrier on behalf of the insured; or (c) from Insurance Policies.

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     “Insured DSW Liability” means any DSW Liability to the extent that (i) it is covered under the terms of Retail Ventures’ Insurance Policies in effect prior to the end of the Insurance Transition Period, and (ii) DSW is not a named insured under, or otherwise entitled to the benefits of, such Insurance Policies.

     “Liabilities” means all debts, liabilities, guarantees, assurances, commitments and obligations, whether fixed, contingent or absolute, asserted or unasserted, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due, whenever or however arising (including, without limitation, whether arising out of any Contract or tort based on negligence or strict liability) and whether or not the same would be required by generally accepted principles and accounting policies to be reflected in financial statements or disclosed in the notes thereto.

     “Master Separation Agreement” means an agreement entered into by the Parties in connection with the Offering that sets forth the principal arrangements between them regarding the separation of the DSW business from Retail Ventures.

     “Offering Date” means 12:01 a.m., New York City Time, on June 28, 2005.

     “Person” means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, government (including any department or agency thereof) or other entity.

     “Receiving Party Entities” means (a) with respect to Services for which DSW is the Billing Party, Retail Ventures Entities, and (b) with respect to Services for which Retail Ventures is the Billing Party, DSW Entities.

     “Retail Ventures Entities” means Retail Ventures and its Subsidiaries (other than the DSW Entities), and “Retail Venture Entity” means any one of the Retail Venture Entities currently in place on the effective date of the Registration Statement and any businesses added under the control of Retail Ventures.

     “Retail Ventures Services” means the various services to be provided by Retail Ventures on behalf of or for the DSW Entities as described in this Agreement, in Schedule I and/or in Schedule III.

     “RVSI” means Retail Ventures Services, Inc., an Ohio corporation and wholly-owned subsidiary of Retail Ventures.

     “Schedule I” means the first Schedule attached hereto which lists Services to be provided by Retail Ventures on behalf of or for DSW Entities and sets forth the related Retail Ventures Service Costs and/or billing methodology.

     “Schedule II” means the second Schedule attached hereto which lists Services to be provided by DSW on behalf of or for Retail Ventures Entities and sets forth the related DSW Service Costs and/or billing methodology.

     “Schedule III” means the third Schedule attached hereto which lists the Insurance Policies to be maintained by Retail Ventures on behalf of or for the DSW Entities and premium expenses and/or the methodology for calculating the premium expenses to be paid by DSW for insurance coverage under such Insurance Policies.

     “Schedules” means any one or more of the schedules referred to in and attached to this Agreement.

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     “Services” means the DSW Services and/or the Retail Ventures Services, as the context may require.

     “Shoe Processing Services” means the shoe processing services for Value City Department Stores LLC that are included in the DSW Services described in Section 2 of Schedule II.

     “Subsidiary” means, as to any Person, any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting capital stock or other voting ownership interests is owned or controlled directly or indirectly by such Person or by one or more of the Subsidiaries of such Person or by a combination thereof.

     “Tax Separation Agreement” means the Tax Separation Agreement attached as Exhibit A to the Master Separation Agreement.

     (b) Each of the following terms is defined in the Section set forth opposite such term:

TERM	SECTION
Annual Budget	8.01
Actions	4.04(a)
Applicable Insurance	6.11(a)
Benefit Billing	3.01
Benefits Services	3.05(b)
Billing Party	3.02
Class A common shares	Preamble
Class B common shares	Preamble
Committee	7.01
Coverage Amount	6.06(a)(i)
Customary Billing	3.01
DSW Covered Parties	6.01(a)
DSW Inc.	Preamble
DSW Indemnified Person	4.03(b)
DSW/RVI Shared Asset	7.05
RVI Dedicated Asset	7.05
RVI Shared Asset	7.05
DSW Service Costs	3.01
Employee Welfare Plans	4.02
Force Majeure	9.06(a)
Initial Term	5.01
Insurance Transition Period	6.01(a)
Net Sales Ratio	3.04
Offering	Preamble
Overallocated Party	6.06(a)(iii)
Parties	Preamble
Party	Preamble
Pass-Through Billing	3.01
Payment Date	3.06(b)
Percent of Sales Billing	3.01
Prior Agreements	9.01
Receiving Party	3.02
Registration Statement	Preamble
Retail Ventures	Preamble
Retail Ventures Indemnified Person	4.03(a)
Retail Ventures Insurance Policies	6.01(a)
Retail Ventures Plans	3.05(a)
Retail Ventures Service Costs	3.01
RVI Dedicated Asset	7.05
RVI Shared Asset	7.05
Service Costs	3.06(a)
Shared Expenses Agreement	8.03
Terminated Party	5.03(a)
Terminating Party	5.03(a)
Underallocated Party	6.06(a)(iii)

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     SECTION 1.02. Internal References. Unless the context indicates otherwise, references to Articles, Sections and paragraphs shall refer to the corresponding articles, sections and paragraphs in this Agreement and references to the parties shall mean the parties to this Agreement.

ARTICLE II
PURCHASE AND SALE OF SERVICES

     SECTION 2.01. Purchase and Sale of Retail Ventures Services.

     (a) Subject to the terms and conditions of this Agreement and in consideration of the Retail Ventures Service Costs described below, Retail Ventures agrees to provide to the applicable DSW Entities, or to procure the provision to such entities, and DSW agrees to purchase from Retail Ventures, the Retail Ventures Services. Unless otherwise specifically agreed by Retail Ventures and DSW, the Retail Ventures Services shall be substantially similar in scope, quality, and nature to those customarily provided to, or procured on behalf of, the DSW Entities by Retail Ventures and/or its Subsidiaries prior to the Offering Date.

     (b) The Parties acknowledge and agree that (i) the Retail Ventures Services to be provided by the applicable Retail Ventures Entities under this Agreement shall, at DSW’s request, be provided directly to Subsidiaries of DSW and (ii) Retail Ventures may satisfy its obligation to provide or to procure the Retail Ventures Services hereunder by causing one or more of its Subsidiaries, including, but not limited to, RVSI, to provide or to procure such services. With respect to the Retail Ventures Services provided to, or procured on behalf of, any Subsidiary of DSW, DSW agrees to pay on behalf of such Subsidiary all amounts payable by or in respect of such services pursuant to this Agreement.

     SECTION 2.02. Purchase and Sale of DSW Services

     (a) Subject to the terms and conditions of this Agreement and in consideration of the DSW Service Costs described below, DSW agrees to provide to the applicable Retail Ventures Entities, or to procure the provision to such entities of, and Retail Ventures agrees to purchase from DSW, the DSW Services. Unless otherwise specifically agreed by Retail Ventures and DSW, (i) the DSW Services (other than the Information Technology Services) shall be substantially similar in scope, quality, and nature to those customarily provided to, or procured on behalf of, the Retail Ventures Entities by DSW and/or its Subsidiaries prior to the Offering Date, and (ii) the Information Technology Services shall be, at a minimum, substantially similar in scope, quality, and nature to those customarily provided to, or procured on behalf of, the Retail Ventures Entities by Retail Ventures and/or its Subsidiaries prior to the Information Technology Services Transfer Date.

     (b) The Parties acknowledge and agree that (i) the DSW Services to be provided by the applicable DSW Entities on behalf of Retail Ventures under this Agreement shall, at Retail Ventures’ request, be provided directly to Subsidiaries of Retail Ventures and (ii) DSW may satisfy its obligation to provide or to procure the DSW Services hereunder by causing one or more of its Subsidiaries to provide or to procure such services. With respect to the DSW Services provided to, or procured on behalf of, any Subsidiary of Retail Ventures, Retail Ventures agrees to pay on behalf of such Subsidiary all amounts payable by or in respect of such services pursuant to this Agreement.

     SECTION 2.03 Additional Services.

     (a) In addition to the Retail Ventures Services to be provided or procured by Retail Ventures in accordance with Section 2.01, if requested by DSW, and to the extent that Retail Ventures and DSW may mutually agree, Retail Ventures shall provide additional services (including services not provided by

5

Retail Ventures to the DSW Entities prior to the Offering Date) to DSW. The scope of any such services, as well as the costs and other terms and conditions applicable to such services, shall be as mutually agreed by Retail Ventures and DSW.

     (b) In addition to the DSW Services to be provided or procured by DSW in accordance with Section 2.02, if requested by Retail Ventures, and to the extent that Retail Ventures and DSW may mutually agree, DSW shall provide additional services (including services not provided by DSW to the Retail Ventures Entities prior to the Offering Date) to Retail Ventures. The scope of any such services, as well as the costs and other terms and conditions applicable to such services, shall be as mutually agreed by Retail Ventures and DSW.

ARTICLE III
SERVICE COSTS; OTHER CHARGES

     SECTION 3.01. Service Costs Generally. The Schedules hereto indicate, with respect to the DSW Services and the Retail Ventures Services, respectively, listed therein, whether the costs to be charged for Services are to be determined by (i) the customary billing method described in Section 3.02 (“Customary Billing”), (ii) the pass-through billing method described in Section 3.03 (“Pass-Through Billing”), (iii) the percentage of net sales method described in Section 3.04 (“Percent of Sales Billing”), (iv) a calculation of certain costs related to employee benefit plans and benefit arrangements described in Section 3.05 (“Benefit Billing”), or (v) another specified method. Unless otherwise indicated on the Schedules, the Customary Billing method will apply. The costs to be paid by DSW to Retail Ventures for Retail Venture Services are collectively referred to herein as the “Retail Ventures Service Costs”. DSW agrees to pay to Retail Ventures in the manner set forth in Section 3.06 an amount equal to the Retail Ventures Service Costs applicable to each of the Retail Ventures Services provided or procured by Retail Ventures. The costs to be paid by Retail Ventures to DSW for the DSW Services are collectively referred to herein as the “DSW Service Costs”. Retail Ventures agrees to pay to DSW in the manner set forth in Section 3.06 an amount equal to the DSW Service Costs applicable to each of the DSW Services provided or procured by DSW.

     SECTION 3.02. Customary Billing. The costs of Services as to which the Customary Billing method applies shall be equal to the costs customarily charged and/or allocated by one Party and/or one or more of its Subsidiaries or Departments (the “Billing Party”) to the other Party and/or one or more of its Subsidiaries or Departments (the “Receiving Party”) immediately prior to the Information Technology Services Transfer Date (it being understood that from and after the Information Technology Services Transfer Date such costs may be increased by the Billing Party in a manner consistent with the manner in which such costs were increased from time to time prior to the Information Technology Services Transfer Date, and consistent with the semi-annual reconciliation described in Section 8.01).

     SECTION 3.03. Pass-Through Billing. The costs of Services as to which the Pass-Through Billing method applies shall be equal to the aggregate amount of third-party, out-of-pocket costs and expenses incurred by a Billing Party on behalf of a Receiving Party (which costs shall include but not be limited to the costs incurred in connection with obtaining the consent of any party to a contract or agreement to which any Billing Party is a party where such consent is related to and reasonably required for the provision of any Service). It is intended that Services provided by third parties will be billed directly to the Receiving Party by the third party; however, if a Billing Party incurs any such costs or expenses on behalf of any Receiving Party as well as businesses operated by the Billing Party, the Billing Party shall allocate any such costs or expenses in good faith between the various businesses on behalf of which such costs or expenses were incurred as set

6

forth on any Schedule hereto or, if not set forth on a Schedule, then as the Billing Party shall determine in the exercise of the Billing Party’s reasonable judgment. The Billing Party shall apply usual and accepted accounting conventions in making such allocations, and the Billing Party or its agents shall keep and maintain such books and records as may be reasonably necessary to make such allocations. The Billing Party shall make copies of such books and records available to the Receiving Party upon request and with reasonable notice.

     SECTION 3.04. Percent of Sales Billing. Services for which the billing methodology is the Percent of Sales Billing method shall not be billed individually. Instead, the Billing Party shall provide all such services for an aggregate annual cost equal to the amount obtained by multiplying (x) the Billing Party’s projected budget for all services which are the same or similar to the applicable Services which are to be provided to all Retail Ventures Entities and DSW Entities for the relevant year, by (y) the projected net sales for the year of the Receiving Party Entities divided by the aggregate projected net sales of all Retail Ventures Entities and DSW Entities (the “Net Sales Ratio”). At the end of the applicable fiscal year, actual expenses versus budgeted expenses for the relevant Service shall be compared and any overage or shortfall shall be allocated based upon the Net Sales Ratio. The Billing Party’s budget for Services to be provided to the Receiving Party Entities as contemplated by this Section 3.04 shall be determined on a basis consistent with the manner in which the Billing Party determines the similar budgets for the Billing Party Entities.

     SECTION 3.05. Benefit Billing.

     (a) Prior to the Offering Date, certain associates of DSW participated in certain benefit plans sponsored by Retail Ventures (“Retail Ventures Plans”). On and after the Offering Date, DSW associates shall continue to be eligible to participate in the Retail Ventures Plans, subject to the terms of the governing plan documents as interpreted by the appropriate plan fiduciaries. On and after the Offering Date, subject to regulatory requirements and the provisions of Section 4.01 hereof, Retail Ventures shall continue to provide Benefit Services (as hereafter defined) to and in respect of DSW associates with reference to Retail Ventures Plans as administered by Retail Ventures prior to the Offering Date.

     (b) The costs payable by DSW for Retail Ventures Services relating to the administration of employee plans and benefit arrangements, which are included in Human Resources in Schedule I (“Benefit Services”), shall be determined and billed as set forth in Schedule I. The Parties acknowledge and agree that some of the costs associated with certain Retail Ventures Plans will be paid principally through DSW employee payroll deductions for such plans as specified in Schedule I. The Parties intend that the Retail Ventures Service Costs relating to the performance of Benefit Services shall not exceed reasonable compensation for such services as defined under applicable law.

     (c) Each Party may request changes in the applicable terms of or Retail Ventures Services relating to the Retail Ventures Plans, approval of which shall not be unreasonably withheld; provided, however, that changes in the terms and provisions of any of the Retail Ventures Plans shall be in the sole discretion of Retail Ventures. The Parties agree to cooperate fully with each other in the administration and coordination of regulatory and administrative requirements associated with Retail Ventures Plans.

     SECTION 3.06. Invoicing and Settlement of Costs.

     (a) Except as otherwise provided in a Schedule to this Agreement or to the extent that Retail Ventures and DSW may mutually agree, each Billing Party shall invoice or notify the Chief Executive Officer or Chief Financial Officer of the Receiving Party on a monthly basis (not later than the tenth day of

7

each month), in a manner substantially similar to and consistent with the billing practices used in connection with services provided by Retail Ventures to the DSW Entities prior to the Offering Date and, as applicable, the Information Technology Services Transfer Date (except as otherwise agreed), of the Service Costs related to services performed or procured by the Billing Party during the prior calendar month. As used herein, “Service Costs” means the Retail Ventures Service Costs, if Retail Ventures is the Billing Party, and the DSW Service Costs, if DSW is the Billing Party. In connection with the invoicing described in this Section 3.06(a), the Billing Party shall provide to the Receiving Party the same billing data and level of detail as customarily or similar to that provided to the Receiving Party prior to the Offering Date and, as applicable, the Information Technology Services Transfer Date and such other related data as may be reasonably requested by the Receiving Party.

     (b) The Receiving Party agrees to pay to the Billing Party, on or before the 30th day after the date on which the Billing Party delivers to the Receiving Party an invoice or notice of Service Costs (or the next Business Day, if such 30th day is not a Business Day) (each, a “Payment Date”), by wire transfer of immediately available funds payable to the order of the Billing Party, all amounts so invoiced or noticed by the Billing Party pursuant to Section 3.06(a). If the Receiving Party fails to pay any monthly payment within 30 days of the relevant Payment Date, the Receiving Party shall be obligated to pay, in addition to the amount due on such Payment Date, interest on such amount at the prime, or best, rate announced by National City Bank, compounded monthly from the relevant Payment Date through the date of payment. Payment can be made via check, ACH or wire and, except as set forth in Section 3.15(c) of the Master Separation Agreement, offsetting is not permitted.

ARTICLE IV
STANDARD OF PERFORMANCE AND INDEMNIFICATION

     SECTION 4.01.

     (i)General Standard of Service. Except as otherwise agreed to in writing by the Parties or as described in this Agreement, and provided that a Party is not restricted by contract with third parties or by applicable law, the Parties agree that (i) the nature, quality, and standard of care applicable to the delivery of the Services hereunder (other than the Information Technology Services) shall be substantially the same as or consistent with that applicable to the similar services provided by a Party to the other Party prior to the Offering Date, and (ii) the nature, quality, and standard of care applicable to the delivery of the Information Technology Services hereunder shall be, at a minimum, substantially the same as or consistent with that applicable to the similar services provided by or on behalf of Retail Ventures prior to the Information Technology Services Transfer Date. Retail Ventures shall use its reasonable efforts to ensure that the nature and quality of Services provided to DSW associates under Retail Ventures Plans, either by Retail Ventures directly or through administrators under contract, shall be undifferentiated as compared with the same services provided to or on behalf of Retail Ventures associates under Retail Ventures Plans.

     (ii) Service Level Partnership Agreements. Within ninety (90) days of the date of this Agreement, DSW will enter into Service Level Partnership Agreements with RVI and/or each RVI entity, with such agreements to include a description of Information Technology Services provided to each entity and address minimum standards of service each entity should expect.

     SECTION 4.02. Delegation. Subject to Section 4.01 above, DSW hereby delegates to Retail Ventures final, binding, and exclusive authority, responsibility, and discretion to interpret and construe the provisions of employee welfare benefit plans in which associates of DSW Entities have

8

elected to participate and which are administered by Retail Ventures under this Agreement (collectively, “Employee Welfare Plans”). Retail Ventures may further delegate such authority to other parties to:

          (i) provide administrative and other services;

          (ii) reach factually supported conclusions consistent with the terms of the respective Employee Welfare Plans;

          (iii) make a full and fair review of each claim denial and decision related to the provision of benefits provided or arranged for under the Employee Welfare Plans pursuant to the requirements of ERISA, if within 60 days after receipt of the notice of denial, a claimant requests in writing a review for reconsideration of such decisions (the party adjudicating the claim shall notify the claimant in writing of its decision on review and such notice shall satisfy all ERISA requirements relating thereto); and

          (iv) notify the claimant in writing of its decision on review.

     SECTION 4.03. Limitation of Liability.

     (a) Retail Ventures Entities

          (i) DSW agrees that none of the Retail Ventures Entities and their respective directors, officers, agents, and employees (each, a “Retail Ventures Indemnified Person”) shall have any liability, whether direct or indirect, in contract or tort or otherwise, to any DSW Entity or any other Person for or in connection with the Retail Ventures Services rendered or to be rendered by any Retail Ventures Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any Retail Ventures Indemnified Person’s actions or inactions in connection with any Retail Ventures Services or such transactions, except for damages which have resulted from such Retail Ventures Indemnified Person’s gross negligence or willful misconduct in connection with any Retail Ventures Services, actions or inactions.

          (ii) Notwithstanding the provisions of this Section 4.03(a), none of the Retail Venture Entities shall be liable for any special, indirect, incidental, or consequential damages of any kind whatsoever (including, without limitation, attorneys’ fees) in any way due to, resulting from or arising in connection with any of the Retail Ventures Services or the performance of or failure to perform Retail Ventures’ obligations under this Agreement. This disclaimer applies without limitation (1) to claims arising from the provision of the Retail Ventures Services or any failure or delay in connection therewith; (2) to claims for lost profits; (3) regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise; and (4) regardless of whether such damages are foreseeable or whether Retail Ventures has been advised of the possibility of such damages.

          (iii) None of the Retail Venture Entities shall have any liability to any DSW Entity or any other Person for failure to perform Retail Ventures’ obligations under this Agreement or otherwise, where (1) such failure to perform is not caused by the gross negligence or willful misconduct of the Retail Venture Entity designated to perform such obligations and (2) such failure to perform similarly affects the Retail Venture Entities receiving the same or similar services and does not have a disproportionately adverse effect on the DSW Entities, taken as a whole.

          (iv) In addition to the foregoing, DSW agrees that, in all circumstances, it shall use commercially reasonable efforts to mitigate and otherwise minimize damages to the DSW Entities, individually and collectively,

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whether direct or indirect, due to, resulting from or arising in connection with any failure by Retail Ventures to comply fully with Retail Ventures’ obligations under this Agreement.

     (b) DSW Entities

          (i) Retail Ventures agrees that none of the DSW Entities and their respective directors, officers, agents, and employees (each, a “DSW Indemnified Person”) shall have any liability, whether direct or indirect, in contract or tort or otherwise, to any Retail Ventures Entity or any other Person for or in connection with the DSW Services rendered or to be rendered by any DSW Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any DSW Indemnified Person’s actions or inactions in connection with any DSW Services or such transactions, except for damages which have resulted from such DSW Indemnified Person’s gross negligence or willful misconduct in connection with any DSW Services, actions or inactions.

          (ii) Notwithstanding the provisions of this Section 4.03(b), none of the DSW Entities shall be liable for any special, indirect, incidental, or consequential damages of any kind whatsoever (including, without limitation, attorneys’ fees) in any way due to, resulting from or arising in connection with any of the DSW Services or the performance of or failure to perform DSW’s obligations under this Agreement. This disclaimer applies without limitation (1) to claims arising from the provision of the DSW Services or any failure or delay in connection therewith; (2) to claims for lost profits; (3) regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise; and (4) regardless of whether such damages are foreseeable or whether DSW has been advised of the possibility of such damages.

          (iii) None of the DSW Entities shall have any liability to any Retail Ventures Entity or any other Person for failure to perform DSW’s obligations under this Agreement or otherwise, where (1) such failure to perform is not caused by the gross negligence or willful misconduct of the DSW Entity designated to perform such obligations and (2) such failure to perform similarly affects the DSW Entities receiving the same or similar services and does not have a disproportionately adverse effect on the Retail Ventures Entities, taken as a whole.

          (iv) In addition to the foregoing, Retail Ventures agrees that, in all circumstances, it shall use commercially reasonable efforts to mitigate and otherwise minimize damages to Retail Ventures Entities, individually and collectively, whether direct or indirect, due to, resulting from or arising in connection with any failure by DSW to comply fully with DSW’s obligations under this Agreement.

     SECTION 4.04. Indemnification Related to Retail Ventures Services.

     (a) DSW agrees to indemnify and hold harmless each Retail Ventures Indemnified Person from and against any damages related to, and to reimburse each Retail Ventures Indemnified Person for all reasonable expenses (including, without limitation, attorneys’ fees) as they are incurred in connection with investigating, preparing, pursuing, or defending, any third party claim, action, proceeding, or investigation, whether or not in connection with pending or threatened litigation and whether or not any DSW Indemnified Person or any Retail Ventures Indemnified Person is a party (collectively, “Actions”), arising out of or in connection with Retail Ventures Services rendered or to be rendered by any Retail Ventures Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any Retail Ventures Indemnified Person’s actions or inactions in connection with any such Retail Ventures Services or transactions; provided that, DSW shall not be responsible for any damages incurred by any Retail Ventures Indemnified Person that have resulted from such Retail Ventures Indemnified Person’s gross negligence or willful misconduct in connection with any of the advice, actions, inactions,

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or Retail Ventures Services referred to above (it being understood and agreed that the provision by any Retail Venture Entity of any of the Retail Ventures Services contemplated by Schedule I hereof without obtaining the consent of any party to any Contract or agreement to which any Retail Ventures Entity is a party as of the date hereof shall not constitute gross negligence or willful misconduct by any Retail Ventures Entity, provided that, the relevant Retail Ventures Entity has used commercially reasonable efforts to obtain such consent).

     (b) Except as set forth in Section 4.04(c), Retail Ventures agrees to indemnify and hold harmless each DSW Indemnified Person from and against any damages related to, and to reimburse each DSW Indemnified Person for all reasonable expenses as they are incurred in connection with investigating, preparing, or defending, any third party Action arising out of or related to the gross negligence or willful misconduct of any Retail Ventures Indemnified Person in connection with the Retail Ventures Services rendered or to be rendered pursuant to this Agreement.

     (c) To the extent that any other Person has agreed to indemnify any Retail Ventures Indemnified Person or to hold a Retail Ventures Indemnified Person harmless and such Person provides services to Retail Ventures or any affiliate of Retail Ventures relating directly or indirectly to any employee plan or benefit arrangement for which Benefit Services are provided under this Agreement, Retail Ventures will exercise reasonable efforts (x) to make such agreement applicable to any DSW Indemnified Person so that each DSW Indemnified Person is held harmless or indemnified to the same extent as any Retail Ventures Indemnified Person and (y) to make available to each DSW Indemnified Person the benefits of such agreement.

     SECTION 4.05. Indemnification Related to DSW Services.

     (a) Retail Ventures agrees to indemnify and hold harmless each DSW Indemnified Person from and against any damages related to, and to reimburse each DSW Indemnified Person for all reasonable expenses (including, without limitation, attorneys’ fees) as they are incurred in connection with investigating, preparing, pursuing, or defending, any third party Action arising out of or in connection with DSW Services rendered or to be rendered by any DSW Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any DSW Indemnified Person’s actions or inactions in connection with any such DSW Services or transactions; provided that, Retail Ventures shall not be responsible for any damages incurred by any DSW Indemnified Person that have resulted from such DSW Indemnified Person’s gross negligence or willful misconduct in connection with any of the advice, actions, inactions, or DSW Services referred to above (it being understood and agreed that the provision by any DSW Entity of any of the DSW Services contemplated by Schedule II hereof without obtaining the consent of any party to any Contract or agreement to which any DSW Entity is a party as of the date hereof shall not constitute gross negligence or willful misconduct by any DSW Entity, provided that, the relevant DSW Entity has used commercially reasonable efforts to obtain such consent).

     (b) DSW agrees to indemnify and hold harmless the Retail Ventures Indemnified Persons from and against any damages related to, and to reimburse each Retail Ventures Indemnified Person for all reasonable expenses as they are incurred in connection with investigating, preparing, or defending, any third party Action arising out of or related to the gross negligence or willful misconduct of any DSW Indemnified Person in connection with the DSW Services rendered or to be rendered pursuant to this Agreement.

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ARTICLE V
TERM AND TERMINATION

     SECTION 5.01. Term. The Initial Agreement was in effect from January 30, 2005 through the Agreement Date. Except as otherwise provided in this Article V, or in Section 9.06 or as otherwise agreed in writing by the Parties, (a) this Agreement, (i) as it relates to all Services other than the Shoe Processing Services, shall have an initial term from the Agreement Date through January 31, 2008, and (ii) as it relates to the Shoe Processing Services, shall have an initial term from the Agreement Date through January 31, 2011 (in each case, the “Initial Term”), and will be renewed automatically after the applicable Initial Terms for successive one-year terms unless either Party elects not to renew this Agreement by notice in writing to the other Party not less than one hundred and eighty (180) days prior to the end of any term, and (b) a Party’s obligation to provide or to procure, and the other Party’s obligation to purchase, a Service shall cease as of the applicable date set forth in the applicable Schedules or such earlier date determined in accordance with Section 5.02.

     SECTION 5.02. Termination.

     (a) Except as otherwise provided herein or in any Schedule hereto, the Parties may by mutual agreement from time to time terminate this Agreement with respect to one or more of the Services, in whole or in part.

     (b) Retail Ventures may terminate any DSW Service at any time if DSW shall have failed to perform any of its material obligations under this Agreement relating to such DSW Service, Retail Ventures shall have notified DSW in writing of such failure and such failure shall have continued for a period of at least thirty (30) days after receipt by DSW of written notice of such failure from Retail Ventures.

     (c) DSW may terminate any Retail Ventures Service at any time if Retail Ventures shall have failed to perform any of its material obligations under this Agreement relating to such Retail Ventures Service, DSW shall have notified Retail Ventures in writing of such failure, and such failure shall have continued for a period of at least thirty (30) days after receipt by Retail Ventures of written notice of such failure from DSW.

     (d) On or after October 1, 2007, either Retail Ventures or DSW may terminate the Shoe Processing Services by giving written notice of such termination to the other Party. Termination of the Shoe Processing Services shall be effective not less than nine (9) months after the date of any such termination notice or on any later date that may be specified in such notice.

     SECTION 5.03. Effect of Termination.

     (a) Other than as required by law, upon termination of any Service pursuant to Section 5.02, or upon termination of this Agreement in accordance with its terms, the Party whose Service is terminated (the “Terminated Party”) shall have no further obligation to provide the terminated Service (or any Service, in the case of termination of this Agreement) and the Party terminating such Service (the “Terminating Party”) shall have no obligation to pay any fees relating to such terminated Services or to make any other payments hereunder; provided that, notwithstanding such termination, (i) the Terminating Party shall remain liable to the Terminated Party for fees owed and payable in respect of Services provided prior to the effective date of the termination; (ii) the Terminated Party shall continue to charge the Terminating Party for administrative and program costs relating to benefits paid after but incurred prior to the termination of any Service and other services required to be provided after the termination of such Service, and the Terminating Party shall be obligated to pay such expenses in accordance with the terms of this Agreement; and (iii) the provisions of Articles 4, 5,

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and 9 shall survive any such termination indefinitely. All program and administrative costs attributable to associates of any DSW Entity under Retail Ventures Plans that relate to any period after the effective date of any such termination shall be for the account of and paid by DSW.

     (b) Following termination of this Agreement with respect to any Service provided or procured by a Party, the Parties agree to cooperate with each other in providing for an orderly transition of such Service to the other Party or to a successor service provider as designated by the other Party. Without limiting the foregoing, Retail Ventures agrees to (i) provide to DSW, within 30 days of the termination of any Benefit Service, in a usable format designated by Retail Ventures, copies of all records relating directly or indirectly to benefit determinations with respect to any and all associates of a DSW Entity, including, but not limited to, compensation and service records, correspondence, plan interpretive policies, plan procedures, administration guidelines, minutes, and any data or records required to be maintained by law and (ii) work with DSW in developing a transition schedule with respect to such terminated Benefit Service.

ARTICLE VI
INSURANCE MATTERS

     SECTION 6.01. DSW Insurance Coverage During Transition Period.

     (a) As of the Offering Date, Retail Ventures shall maintain insurance coverage under the Insurance Policies listed in Part (a) of Schedule III (the “Retail Ventures Insurance Policies”). Throughout the period beginning on the Offering Date and ending upon the earlier of (i) termination of the Service provided pursuant to this Article VI or (ii) termination or expiration of this Agreement in accordance with its terms (the “Insurance Transition Period”), Retail Ventures shall, subject to insurance market conditions and other factors beyond its control, maintain Insurance Policies covering and for the benefit of the DSW Entities and their respective directors, officers, and employees (collectively, the “DSW Covered Parties”) which are comparable to those maintained generally by Retail Ventures covering the DSW Covered Parties prior to the Offering Date; provided, however, that if Retail Ventures determines that (i) the amount or scope of such insurance coverage will be reduced to a level materially inferior to the level of insurance coverage in existence immediately prior to the Insurance Transition Period or (ii) the retention or deductible level applicable to such insurance coverage, if any, will be increased to a level materially greater than the levels in existence immediately prior to the Insurance Transition Period, each other than as a result of the Offering, Retail Ventures shall give DSW notice of such determination as promptly as practicable. Upon notice of such determination, DSW shall be entitled to no less than sixty (60) days to evaluate DSW’s options regarding continuance of insurance coverage under said Insurance Policies and DSW may cancel the DSW Entities’ interest in all or any portion of such insurance coverage as of any day within such sixty (60) day period.

     (b) DSW shall promptly pay or reimburse Retail Ventures, as the case may be, for premium expenses, deductibles or retention amounts, and any other costs and expenses which Retail Ventures may incur in connection with the insurance coverages maintained pursuant to this Section 6.01, including but not limited to any retroactive or subsequent premium adjustments. DSW’s share of such costs and expenses shall be calculated as set forth in Part (b) of Schedule III.

     SECTION 6.02. Cooperation; Payment of Insurance Proceeds to DSW; Agreement Not to Release Carriers. Each Party shall share such information as is reasonably necessary in order to permit the other Party to manage and conduct its insurance matters in an orderly fashion. Retail Ventures, at the request of DSW, shall cooperate with and use commercially reasonable efforts to assist DSW in recovering Insurance Proceeds under the Retail Ventures

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Insurance Policies for claims relating to the DSW Business, the assets of DSW or DSW Liabilities, whether such claims arise under any Contract or agreement, by operation of law or otherwise, existing or arising from any past acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed before the Offering Date, on the Offering Date or during the Insurance Transition Period, and Retail Ventures shall promptly pay any such recovered Insurance Proceeds to DSW. Neither Retail Ventures nor DSW, nor any of their respective Subsidiaries, shall take any action which would intentionally jeopardize or otherwise interfere with the other Party’s ability to collect any proceeds payable pursuant to any Insurance Policy. Except as otherwise contemplated by this Agreement or any other agreement between the Parties, after the Offering Date, neither Retail Ventures nor DSW (and each Party shall ensure that no affiliate of such Party), without the consent of the other Party, shall provide any insurance carrier with a release, or amend, modify or waive any rights under any such policy or agreement, if such release, amendment, modification or waiver would adversely affect any rights or potential rights of the other Party (or its Subsidiary) thereunder. However, nothing in this Section 6.02 shall (A) preclude any Retail Ventures Entity or any DSW Entity from presenting any claim or from exhausting any policy limit, (B) require any Retail Ventures Entity or any DSW Entity to pay any premium or other amount or to incur any Liability, or (C) require any Retail Ventures Entity or DSW Entity to renew, extend or continue any policy in force.

     SECTION 6.03. DSW Insurance Coverage After the Insurance Transition Period. From and after expiration of the Insurance Transition Period, DSW shall be responsible for obtaining and maintaining insurance programs for the DSW Entities’ risk of loss and such insurance arrangements shall be separate and apart from Retail Ventures’ insurance programs.

     SECTION 6.04. Deductibles and Self-Insured Obligations. DSW shall reimburse Retail Ventures for all amounts necessary to exhaust or otherwise to satisfy all applicable self-insured retentions, amounts for fronted policies, deductibles and retrospective premium adjustments and similar amounts not covered by Insurance Policies in connection with DSW Liabilities and Insured DSW Liabilities to the extent that Retail Ventures is required to pay any such amounts.

     SECTION 6.05. Procedures with Respect to Insured DSW Liabilities.

     (a) DSW shall reimburse Retail Ventures for all amounts incurred to pursue insurance recoveries from Insurance Policies for Insured DSW Liabilities.

     (b) The defense of claims, suits or actions giving rise to potential or actual Insured DSW Liabilities shall be managed (in conjunction with Retail Ventures’ insurers, as appropriate) by the Party that would have had responsibility for managing such claims, suits or actions had such Insured DSW Liabilities been DSW Liabilities.

     SECTION 6.06. Insufficient Limits of Liability for Retail Ventures Liabilities and DSW Liabilities.

     (a) In the event that there are insufficient limits of liability available under Retail Ventures’ Insurance Policies in effect prior to the Distribution Date to cover the Liabilities of Retail Ventures and/or DSW that would otherwise be covered by such Insurance Policies, then to the extent that other insurance is not available to Retail Ventures and/or DSW for such Liabilities an adjustment will be made in accordance with the following procedures:

          (i) To the extent the Parties are able to specifically quantify and verify the actual Liabilities incurred by each Party to the exclusion

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of the other Party, each Party will be allocated an amount equal to the product of (A) the actual Liabilities incurred by such Party, divided by the total actual Liabilities incurred by the Parties, times (B) the lesser of (1) the available limits of liability under Retail Ventures’ Insurance Policies in effect prior to the Distribution Date net of uncollectible amounts attributable to insurer insolvencies and (2) the proceeds received from Retail Ventures’ Insurance Policies if the Liabilities are the subject of disputed coverage claims and, following consultation with each other, Retail Ventures and/or DSW agree to accept less than full policy limits from Retail Ventures’ and DSW’s insurers (such available limits and/or proceeds being referred to as the “Coverage Amount”).

     (ii) To the extent that the Parties are unable to specifically quantify and verify any such Liabilities or any part of such Liabilities to each Party (to the exclusion of the other Party), each Party will be allocated an amount equal to their shared percentage of the Coverage Amount.

     (iii) A Party who receives more than its share of the Coverage Amount (the “Overallocated Party”) agrees to reimburse the other Party (the “Underallocated Party”) to the extent that the Liabilities of the Underallocated Party that would have been covered under such Insurance Policies is less than the Underallocated Party’s share of the Coverage Amount.

     (iv) This Section 6.06 shall terminate ten (10) years following the end of the Insurance Transition Period, unless terminated sooner in accordance with the provisions of this Agreement.

     SECTION 6.07. Cooperation. Retail Ventures and DSW shall cooperate with each other in all respects, and shall execute any additional documents which are reasonably necessary, to effectuate the provisions of this Article VI.

     SECTION 6.08. No Assignment or Waiver. This Agreement shall not be considered as an attempted assignment of any policy of insurance or as a contract of insurance and shall not be construed to waive any right or remedy of any Retail Ventures Entity in respect of any Insurance Policy or any other contract or policy of insurance.

     SECTION 6.09. No Liability. DSW does hereby, for itself and as agent for each other DSW Entity, agree that no Retail Ventures Entity or Retail Ventures Indemnified Person shall have any Liability whatsoever as a result of the insurance policies and practices of Retail Ventures and its Subsidiaries as in effect at any time prior to the end of the Insurance Transition Period, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy, or the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

     SECTION 6.10. Additional or Alternate Insurance. Notwithstanding any other provision of this Agreement, during the Insurance Transition Period, Retail Ventures and DSW shall work together to evaluate insurance options and secure additional or alternate insurance for DSW and/or Retail Ventures if desired by and cost effective for DSW and Retail Ventures. Nothing in this Agreement shall be deemed to restrict any DSW Entity from acquiring at its own expense any other Insurance Policy in respect of any Liabilities or covering any period.

     SECTION 6.11. Forbearance and Prior Insurance Coverage.

     (a) From and after the date of this Agreement, Retail Ventures shall not, and shall cause each of its Subsidiaries not to, take or fail to take any action if such action or inaction, as the case may be, would adversely affect

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the applicability of any insurance in effect on the effective date of this Agreement that covers all or any part of the assets, liabilities, business or employees of any DSW Entity with respect to events occurring prior to the Offering Date (“Applicable Insurance”), it being understood that in no event shall any Retail Venture Entity be obligated to pay premiums with respect to periods after the Offering Date in respect of Applicable Insurance.

     (b) Retail Ventures agrees that, from and after the Offering Date, all Applicable Insurance directly or indirectly applicable to any assets, liabilities, business or employees of any DSW Entity shall be for the benefit of the DSW Entity, it being understood that such Applicable Insurance shall also be for the benefit of the Retail Venture Entities to the extent directly or indirectly applicable to any assets, liabilities, business or employees of the Retail Venture Entities. Without limiting the generality of the foregoing, upon DSW’s reasonable request, Retail Ventures shall use its reasonable efforts to modify, amend or assign all Applicable Insurance policies and arrangements so that DSW is the direct beneficiary of such Applicable Insurance with all rights to enforce, obtain the benefit of and take all other action in respect of such Applicable Insurance; provided that, if the modifications, amendments or assignments contemplated by this Section 6.11(b) are not permissible, Retail Ventures shall, and shall cause each of its Subsidiaries to, use its reasonable efforts to enter into such other arrangements as DSW may reasonably request to ensure that DSW and the Subsidiaries of DSW are entitled to the benefit (to the fullest extent set forth in the relevant policies and arrangements) of any Applicable Insurance.

     SECTION 6.12. Further Agreements. The Parties acknowledge that they intend to allocate financial obligations without violating any laws regarding insurance, self-insurance or other financial responsibility. If it is determined that any action undertaken pursuant to this Agreement or any related agreement is violative of any insurance, self-insurance or related financial responsibility law or regulation, the Parties agree to work together to do whatever is necessary to comply with such law or regulation while trying to accomplish, as much as possible, the allocation of financial obligations as intended in this Agreement or any such related agreement.

ARTICLE VII
INFORMATION TECHNOLOGY EXECUTIVE STEERING COMMITTEE

     SECTION 7.01. Formation. Not later than 10 business days after the Agreement Date, the Parties shall appoint members to an information technology executive steering committee (the “Committee”) which shall consist of: three (3) members appointed by DSW; three (3) members appointed by Retail Ventures; and the Chairman of each of DSW and RVI and his or her designee. A member appointed by DSW shall chair the Committee. If either Party decides at any time to replace an appointed Committee member, it may do so by written notice to the other Party.

     SECTION 7.02. Meetings. The Committee shall meet, in person and/or by telephone, at such times and places as it may select but, in any event, it shall meet at least twice per year thereafter. Reasonable notice must be given in advance of all meeting dates. The first such meeting shall be held as soon as practicable, but in no event later than ninety (90) days after the Information Technology Services Transfer Date. To constitute a quorum for purposes of Committee decisions, each Party must be represented by at least two of the three members appointed by each Party. Committee members can give their proxy for voting on Committee decisions to other Committee members.

     SECTION 7.03. Purpose; Agenda; Minutes. As of the Information Technology Services Transfer Date, the Committee shall be responsible for identifying and reaching agreement on annual and interim proposed changes to

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the information technology infrastructure and information technology services to be maintained and provided by DSW, and, as necessary, the billing methodologies . Minutes of each Committee meeting shall be recorded.

     SECTION 7.04. Budget/Proposals. Prior to December 31, 2006 and each subsequent year so long as this Agreement is in effect, the Parties agree to work together and to cooperate with each other in good faith to develop an annual budget (“IT Annual Budget”) to reflect the estimated annual Service Costs to each Party for each of the Information Technology Services to be provided and/or procured by the other Party as contemplated by this Agreement. In the budgeting process, the Parties agree to use their reasonable efforts to harmonize the interests of the Parties to have quality services at affordable costs and to recover the costs of performing and/or procuring the Services. On or before December 31 of each calendar year, an Annual Budget for the next calendar year shall be submitted to the Committee for review and approval. The Committee may make exceptions to the billing methodologies described on Schedule II and in Article III. Additionally, either Party may present to the Committee an interim proposal for a specific change to DSW’s information technology infrastructure, and any such proposal shall include, at a minimum, (a) a statement of the anticipated outcomes of the proposed change, (b) an identification of the human resources, facilities and equipment that would be required to implement the proposed change, (c) a budget for the proposed change and a proposed allocation of the cost of the proposed change between the Parties, and (d) an estimated time schedule for implementation of the proposed change. The Committee may request additional information, accept a proposal as presented, accept a proposal subject to mutually agreed upon modifications, or reject a proposal. If a Party’s proposal is rejected, then the proposing Party shall nevertheless be free to implement the proposal independently so long as such implementation has no cost or material adverse impact on the other Party.

     SECTION 7.05. Information Technology Capital Expenditures. Before DSW shall be obligated to acquire any new or replacement information technology asset (equipment, computer software, etc.) that will be used for the benefit of any Retail Ventures Entity, the Committee shall determine whether such asset is a shared asset to be used for the benefit of one or more of the Retail Ventures Entities and one or more of the DSW Entities (each, a “DSW/RVI Shared Asset”), a shared asset that will be used primarily for the benefit of two or more of the Retail Ventures Entities (each, an “RVI Shared Asset”) or a dedicated asset that will be used primarily for the benefit of a single Retail Ventures Entity (each, an “RVI Dedicated Asset”).

     (a) DSW shall retain title to each DSW/RVI Shared Asset and to each RVI Shared Asset and shall recover the cost of each such asset in accordance with Sections 5 and 6 of Schedule II hereto. Retail Ventures hereby gives DSW the guarantee set forth in Schedule IV of timely payment by each of the Retail Ventures Entities of the amounts described in Sections 5 and 6 of Schedule II hereto that are applicable to each DSW/RVI Shared Asset and each RVI Shared Asset.

     (b) Each RVI Dedicated Asset will be treated as follows:

     (i) Promptly upon acquisition by DSW of an RVI Dedicated Asset that is to be used at a facility of a Retail Ventures Entity (e.g., a point-of-sale device) or an RVI Dedicated Asset that is to be provided to an employee of a Retail Ventures Entity (e.g., a laptop computer), DSW shall transfer title to such RVI Dedicated Asset to the applicable Retail Ventures Entity, and the applicable Retail Ventures Entity shall reimburse DSW for the purchase price, license fee and/or other consideration paid by DSW for such asset not later than thirty (30) days after acquisition of such asset. Retail Ventures hereby gives to DSW the guarantee set forth in Schedule IV of timely payment to DSW by the applicable Retail Ventures Entity of the purchase price, license fee and/or other consideration paid by DSW for each RVI Dedicated Asset; and

     (ii) DSW shall retain title to any RVI Dedicated Asset that is to be used at a DSW data center or other DSW facility and shall recover the cost of such RVI Dedicated Asset in accordance with Sections 5 and 6 of Schedule II hereto. Retail Ventures hereby gives to DSW the guarantee set forth in Schedule IV of timely payment to DSW by the applicable Retail Ventures Entity of such amounts, and Retail Ventures hereby agrees to purchase each RVI Dedicated Asset from DSW, for an amount equal to the net book value of such RVI Dedicated Asset on the date of purchase by Retail Ventures, on the earliest date that such RVI Dedicated Asset is no longer used for the benefit of the Retail Ventures Entity due to the sale of the equity or of all or substantially all of the assets of such Retail Ventures Entity, the cessation of operations of such Retail Ventures Entity or a strategic decision by such Retail Ventures Entity to cease use of such RVI Dedicated Asset.

ARTICLE VIII
ADDITIONAL AGREEMENTS

     SECTION 8.01. Annual Budget. Prior to December 31, 2006 and each subsequent year so long as this Agreement is in effect, the Parties agree to work together and to cooperate with each other in good faith to develop an annual budget (“Annual Budget”) to reflect the estimated annual Service Costs to each Party for each of the Services to be provided and/or procured by the other Party as contemplated by this Agreement. In the budgeting process, the Parties agree to use their reasonable efforts to harmonize the interests of the Parties to have quality services at affordable costs and to recover the costs of performing and/or procuring the Services. On or before December 31 of each calendar year, an Annual Budget for the next calendar year shall be submitted to the respective Controller or Chief Financial Officer of each of the Parties for review and approval. Such approval shall constitute approval of the Annual Budget by the Party represented by such person. During the months of July and January of each year so long as this Agreement is in effect, the Parties shall conduct a semi-annual reconciliation of actual Service Costs to budgeted Service Costs to determine if there are any significant discrepancies between such costs and, if so, whether the payments for services should be adjusted accordingly.

     SECTION 8.02. Employment Matters. During the Initial Term, neither Party shall, directly or indirectly, solicit active employees of the other Party without the other Party’s consent; provided that each Party agrees to give such consent if such Party believes, in good faith, that its consent is necessary to avoid the resignation of an employee from one Party that the other Party would like to employ.

     SECTION 8.03. Shared Expenses Agreement. The Parties agree to share certain costs and expenses related to the store facilities located at Four

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Union Square, New York, New York, pursuant to the terms and conditions set forth in the Shared Expenses Agreement between the Parties (the “Shared Expenses Agreement”).

ARTICLE VIII
MISCELLANEOUS

     SECTION 9.01. Prior Agreements. In the event there is any conflict between the provisions of this Agreement, on the one hand, and the provisions of prior services agreements among any Retail Venture Entity and any DSW Entity (the “Prior Agreements”), on the other hand, the provisions of this Agreement shall govern and such provisions in the Prior Agreements are deemed to be amended so as to conform with this Agreement.

     SECTION 9.02. Other Agreements. In the event there is any inconsistency between the provisions of this Agreement and the respective provisions of the Master Separation Agreement, the Tax Separation Agreement and the Exchange Agreement, respectively, the respective provisions of the Master Separation Agreement, the Tax Separation Agreement and the Exchange Agreement shall govern.

     SECTION 9.03. Future Litigation and Other Proceedings. In the event that DSW (or any of its Subsidiaries or any of its or their respective officers or directors) or Retail Ventures (or any of its Subsidiaries or any of its or their respective officers or directors) at any time after the date hereof initiates or becomes subject to any litigation or other proceedings before any governmental authority or arbitration panel with respect to which the Parties have no prior agreements (as to indemnification or otherwise), the Party (and its Subsidiaries and its and their respective officers and directors) that has not initiated and is not subject to such litigation or other proceedings shall comply, at the other Party’s expense, with any reasonable requests by the other Party for assistance in connection with such litigation or other proceedings (including by way of provision of information and making available of associates or employees as witnesses). In the event that DSW (or any of its Subsidiaries or any of its or their respective officers or directors) and Retail Ventures (or any of its Subsidiaries or any of its or their respective officers or directors) at any time after the date hereof initiate or become subject to any litigation or other proceedings before any governmental authority or arbitration panel with respect to which the Parties have no prior agreements (as to indemnification or otherwise), each Party (and its officers and directors) shall, at their own expense, coordinate their strategies and actions with respect to such litigation or other proceedings to the extent such coordination would not be detrimental to their respective interests and shall comply, at the expense of the requesting Party, with any reasonable requests of the other Party for assistance in connection therewith (including by way of provision of information and making available of employees as witnesses).

     SECTION 9.04. No Agency. Nothing in this Agreement shall constitute or be deemed to constitute a partnership or joint venture between the Parties hereto or, except to the extent provided in Section 4.02, constitute or be deemed to constitute any Party the agent or employee of the other Party for any purpose whatsoever, and neither Party shall have authority or power to bind the other Party or to contract in the name of, or create a liability against, the other Party in any way or for any purpose.

     SECTION 9.05. Subcontractors. Either Retail Ventures or DSW may hire or engage one or more subcontractors to perform all or any of its obligations under this Agreement; provided that, subject to Section 4.03, Retail Ventures and DSW, as the case may be, shall in all cases remain primarily responsible for all obligations undertaken by it in this Agreement with respect to the scope, quality and nature of the Services provided to the other Party and, provided further, that, in each case, the use of a subcontractor to perform

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such Party’s obligations would not substantially increase the costs to the other Party without the prior written consent of the other Party.

     SECTION 9.06. Force Majeure.

     (a) For purposes of this Section 9.06, “Force Majeure” means an event beyond the control of either Party, which by its nature could not have been foreseen by such Party, or, if it could have been foreseen, was unavoidable, and includes without limitation, acts of God, storms, floods, riots, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) and failure of energy sources.

     (b) Without limiting the generality of Section 4.03, neither Party shall be under any liability for failure to fulfill any obligation under this Agreement, so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered, or delayed as a consequence of circumstances of Force Majeure; provided that such Party shall have exercised all commercially reasonable due diligence to minimize to the greatest extent possible the effect of Force Majeure on its obligations hereunder.

     (c) Promptly on becoming aware of Force Majeure causing a delay in performance or preventing performance of any obligations imposed by this Agreement (and termination of such delay), the Party affected shall give written notice to the other Party giving details of the same, including particulars of the actual and, if applicable, estimated continuing effects of such Force Majeure on the obligations of the Party whose performance is prevented or delayed. If such notice shall have been duly given, and actual delay resulting from such Force Majeure shall be deemed not to be a breach of this Agreement, the period for performance of the obligation to which it relates shall be extended accordingly; provided that if Force Majeure results in the performance of a Party being delayed by more than 60 days, the other Party shall have the right to terminate this Agreement with respect to any Service affected by such delay forthwith by written notice.

     SECTION 9.07. Entire Agreement. This Agreement (including the Schedules constituting a part of this Agreement) and any other writing signed by the Parties that specifically references or is specifically related to this Agreement constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the Parties with respect to the subject matter hereof. This Agreement is not intended to confer upon any Person other than the Parties hereto any rights or remedies hereunder.

     SECTION 9.08. Information. Subject to applicable law and privileges, each Party hereto covenants with and agrees to provide to the other Party all information regarding itself and transactions under this Agreement that the other Party reasonably believes is required to comply with all applicable federal, state, county and local laws, ordinances, regulations and codes, including, but not limited to, securities laws and regulations.

     SECTION 9.09. Notices. Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile transmission, or mail (with postage prepaid), to the following addresses:

(a)	If to DSW, to:
	Peter Horvath DSW Inc. 4150 East 5th Avenue Columbus, OH 43219 Fax: (614) 872-1464

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	With a copy to:
	DSW Inc. Attn: General Counsel
	4150 East 5th Avenue Columbus, Ohio 43219 Fax: (614) 872-1464
(b)	If to Retail Ventures, to:
	Jim McGrady Retail Ventures, Inc. 3241 Westerville Road Columbus, OH 43224 Fax: 614-473-2721
	With a copy to:
	Retail Ventures, Inc. Attn: General Counsel 3241 Westerville Road Columbus, Ohio 43224 Fax: 614-337-4682

or to such other addresses or telecopy numbers as may be specified by like notice to the other Party.

     SECTION 9.10. Governing Law. This Agreement shall be construed in accordance with and governed by the substantive internal laws of the State of Ohio, excluding its conflict of laws rules.

     SECTION 9.11. Severability. If any terms or other provision of this Agreement or the Schedules or exhibits hereto shall be determined by a court, administrative agency or arbitrator to be invalid, illegal or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather, this Agreement shall be construed as if not containing the particular invalid, illegal or unenforceable provision, and all other provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent permitted under applicable law.

     SECTION 9.12. Amendment. This Agreement may only be amended by a written agreement executed by both Parties hereto.

     SECTION 9.13. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same agreement.

     SECTION 9.14. Authority. Each of the Parties represent to the other Party that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary corporate or other actions, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles.

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     IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their duly authorized representatives.

DSW INC.
By:	/s/ Peter Z. Horvath
Name: Peter Z. Horvath
Title: President
RETAIL VENTURES, INC.
By:	/s/ James A. McGrady
Name: James A. McGrady
Title: Chief Financial Officer

21

SCHEDULE I
TO
AMENDED AND RESTATED
SHARED SERVICES AGREEMENT
DATED October 29, 2006
BETWEEN
RETAIL VENTURES, INC.
AND
DSW INC.

SERVICES TO BE PROVIDED BY RETAIL VENTURES, INC. AND RETAIL VENTURES
SERVICES, INC.

DESCRIPTION OF RETAIL VENTURES SERVICE		RETAIL VENTURES SERVICE COSTS OR BILLING METHODOLOGY TO DSW
1.	GENERAL CORPORATE AND FINANCIAL SERVICES:
	(i) PAYROLL SERVICES (including preparation and distribution of employee checks; payment of payroll taxes, garnishment and other deductions to appropriate parties; preparation and filing of employer tax returns; and preparation of annual W-2s for employees)	Billing pro-rata based upon number of DSW employee checks and Form W-2s issued by Retail Ventures. To be billed weekly in arrears.
	(ii) TREASURY SERVICES (including cash management; processing and paying invoices and purchase orders; monthly consolidation of financial statements; and preparation of checks for vendor payment and employee reimbursement)	DSW to pay $1,000.00 per month and any stand-alone cash management software and corresponding support costs if added for DSW Services only.
	(iii) Sox and AUDITING Fees (including coordination of external audit services and assistance with compliance with Sarbanes-Oxley requirements)	Shared costs to be allocable based on Percent of Sales Billing.
	(iv) ACCOUNTS PAYABLE, GENERAL LEDGER, SALES AUDIT, BUDGET SERVICES- AND INVENTORY CONTROL. GENERAL LEDGER INCLUDES, BUT IS NOT LIMITED TO, PREPARATION OF QUARTERLY,	Overhead costs to be allocated based on time spent by associates, which will be reviewed and determined annually.
		Sales Audit charges to include fees
	ANNUAL AND OTHER SEC REPORTS; ASSISTANCE WITH THE PREPARATION OF ANNUAL REPORT TO SHAREHOLDERS AND EARNINGS RELEASES; AND PREPARATION OF ERISA REPORTS.	associated with software agreements that support DSW Entities.

1

DESCRIPTION OF RETAIL VENTURES SERVICE		RETAIL VENTURES SERVICE COSTS OR BILLING METHODOLOGY TO DSW
	(v) TAX SERVICES (including preparation and filing of all federal, state and local tax returns, reports and other required filings; coordination and management of tax audits and other similar proceedings; and assistance with tax planning, tax strategy and compliance with the Tax Separation Agreement)	See Tax Separation Agreement between DSW and Retail Ventures.
	(vi) Controller Services	Cost to be shared by DSW and Retail Ventures on a 50/50 basis.
	(vii) SSC Corporate Services	Charges incurred on behalf of DSW entities will be allocated to DSW. Charges billed to other cost centers listed in these Agreement Schedules will be billed under the applicable cost center’s methodology. General, unallocable charges to be allocated based on Percent of Sales billing.
2.	HUMAN RESOURCES (ALL COST CENTERS)	Pass-Through Billing with respect to costs directly related to DSW Entities.
		DSW to pay pro-rata share of overhead costs per employee of DSW Entities, subject to adjustment semi-annually.
3.	IMPORT MANAGEMENT AND COMPLIANCE	Pass-Through Billing with respect to costs directly related to DSW Entities. Importing fees (including U.S. Customs fees, Duties, Commissions, Ocean Freight, Excel/APL Logistic Carrier fees and other associated expense) are allocated to the businesses by invoice (which historically is a one-to-one relationship to container) to the ratio of the container contents to the whole containers/trailer.
		DSW to pay a percentage of the overhead costs based upon percentage of usage. The overhead allocation percentage will be reviewed and determined annually.

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DESCRIPTION OF RETAIL VENTURES SERVICE	RETAIL VENTURES SERVICE COSTS OR BILLING METHODOLOGY TO DSW
4. LEGAL SERVICES (including general legal advice from in-house legal staff; preparation and review of SEC filings and proxy materials; assistance with corporate resolutions and preparations for shareholders meetings; overseeing and managing legal policy and strategy regarding litigation and regulatory compliance)	Pass-Through Billing with respect to costs directly related to DSW Entities. Department overhead costs and general, unallocable professional fees to be allocated based on Percent of Sales Billing.
5. RISK MANAGEMENT (including management of insurance and workers compensation coverage; administration of claims services; negotiation and acquisition of insurance coverages including, but not limited to, property and business interruption, casualty (including workers compensation), director and officer liability and other liability coverages)	a) Insurance premium costs billed as specified in Schedule III. b) Overhead costs are billed on the weighted value of administrative time directed to DSW entities for (i) Workers’ Compensation, (ii) General Liability and (iii) Property & All Other Lines combined with the ratio of the number of claims that are directly related to DSW Entities to the total number of claims for (i) Workers’ Compensation, (ii) General Liability and (iii) Property & All Other Lines.
6. INTERNAL AUDIT	Overhead costs to be allocated based on Percent of Sales Billing.
7. RVI CORPORATE EXECUTIVE OVERHEAD ALLOWANCE	DSW will pay 35% of the total overhead of this cost center that is associated with the CFO of RVI. It will exclude the costs associated with the CEO of RVI.
8. DISTRIBUTION SERVICES	DSW will pay 10% of total overhead costs for this department.
9. LETTERS OF CREDIT ASSOCIATED WITH WORKERS’ COMPENSATION AND IBNR	DSW to be billed 15% of costs associated with letters of credit for workers compensation and IBNR.
10. DEPRECIATION OF IT ASSETS (CURRENT COST CENTERS including 01109, 01321, 01325, 01326, 01328, 01329, 01330, 01331, 01332, 01333)	Service fee charged to DSW for depreciation expenses associated with IT Assets used to provide shared service. The billable charge for depreciation expenses is based on Percent of Sales Billing, unless otherwise agreed by the Parties or determined by the Information Technology Executive Steering Committee.

3

SCHEDULE II
TO

AMENDED AND RESTATED
SHARED SERVICES AGREEMENT
DATED October 29, 2006
BETWEEN
RETAIL VENTURES, INC.
AND
DSW INC.

SERVICES TO BE PROVIDED BY DSW INC.

DESCRIPTION OF DSW SERVICE		DSW SERVICE COSTS OR BILLING METHODOLOGY TO RETAIL VENTURES
1.	SHOE MERCHANDISING:
	(i) PLANNING AND ALLOCATION SUPPORT for Value City Department Stores, LLC	Value City to pay the amount per month reflecting the agreed value of the use of DSW systems services.
2.	DISTRIBUTION
	(i) DISTRIBUTION SERVICES AND TRANSPORTATION MANAGEMENT for Value City Department Stores, LLC and Filene’s Basement	(i) Retroactive to October 1, 2006, Value City to pay 60¢ per pair to process shoes during the term of the Agreement, with no extra charge for overhead variances or any other cost associated with processing Value City’s shoes. In the event that the “Reasonable Expectation Program” installed at DSW, or any other cost reduction realized by DSW, results in an actual cost to process Value City shoes that is less than 60¢ per pair, the cost per pair to process shoes for Value City shall be reduced based on quarterly actual cost. The per-pair cost set forth herein shall remain in effect through January 30, 2011 or any earlier date on which Retail Ventures or DSW terminates shoe processing services for Value City in accordance with the Agreement. (ii) Transportation Costs- both inbound and outbound transportation costs (inclusive of wages, associated payroll costs, occupancy expenses and operating expenses) are allocated to the respective businesses according to current month activity, which is based on merchandise receipts as determined by dollar value. Value City may use its own carriers for inbound transportation. In the event that Value City uses its own carriers for inbound transportation, such merchandise receipts shall be excluded from the allocation of expenses and

1

DESCRIPTION OF DSW SERVICE		DSW SERVICE COSTS OR BILLING METHODOLOGY TO RETAIL VENTURES
		DSW shall have no responsibility or accountability for the merchandise until it is received at the DSW distribution center.
		(iii) Professional fees to be billed on the weighted average cost per case of the pools that Value City Shoes utilizes.
3.	PROPERTY MANAGEMENT	Overhead costs to be allocated based on time spent by associates, which will be reviewed and determined annually. Related outside contractors/consultant costs, including legal services, allocated based on pass-through billing.
4.	STORE DESIGN AND CONSTRUCTION MANAGEMENT	A 5% service fee based on total development costs per project, plus expenses incurred by DSW on RVI projects. Overhead costs allocated on the proportion of RVI projects to total projects (extraordinary projects to be determined on a project by project basis). Standard American Institute of Architects (AIA) form of “Agreement between Owner and Design/Builder” to be used as design and construction management agreement between DSW and Retail Ventures.
5.	INFORMATION TECHNOLOGY (ALL COST CENTERS)	Pass-Through Billing with respect to costs directly related to Retail Ventures Entities. Percent of Sales Billing with respect to overhead and Services shared by DSW Entities and Retail Ventures Entities, unless otherwise agreed by the Parties or determined by the Information Technology Executive Steering Committee.
6.	DEPRECIATION OF IT ASSETS	Service fee charged to Retail Ventures for depreciation expenses associated with IT Assets used to provide shared service. The billable charge for depreciation expenses is based on Percent of Sales Billing, unless otherwise agreed by the Parties or determined by the Information Technology Executive Steering Committee.

2

DESCRIPTION OF DSW SERVICE		DSW SERVICE COSTS OR BILLING METHODOLOGY TO RETAIL VENTURES
7.	Legal Services	Pass-Through Billing with respect to costs directly related to RVI Entities.
		Professional fees related to shared services provided by DSW to be allocated based upon Percent of Sales Billing unless otherwise agreed.
		Any overhead costs for time spent on matters performed on behalf of RVI Entities shall be at an agreed upon price.

3

SCHEDULE III
TO
AMENDED AND RESTATED
SHARED SERVICES AGREEMENT
DATED October 29, 2006
BETWEEN
RETAIL VENTURES, INC.
AND
DSW INC.

INSURANCE POLICIES MAINTAINED BY RETAIL VENTURES

     The Insurance Polices described in Part (a) below shall be maintained by Retail Ventures, Inc. (“Retail Ventures”) on behalf of DSW Inc. (“DSW”) and its Subsidiaries pursuant to the terms of the Amended and Restated Shared Services Agreement between Retail Ventures and DSW dated October 29, 2006, of which this Schedule is a part. The insurance premiums related to such policies to be paid by DSW, or for which Retail Ventures shall be reimbursed by DSW, are set forth or described in Part (b) of this Schedule. Capitalized terms not otherwise defined in this Schedule shall have the respective meanings assigned to them in the Amended and Restated Shared Services Agreement.

(a) LIST OF INSURANCE POLICIES

(i)

Liability: Steadfast Insurance Co. #SCO3822186-02 – primary – $1MM/occurrence XL Insurance Co. #US00007102LI04A – umbrella — $25MM/occ/agg Ohio Casualty Co. #ECO(05)52976611, excess GL – $25MM/occ/agg American Guarantee # AEC5086837500 – excess GL – $50MM/occ/agg Liberty Mutual Ins. #LQ1-B71 –078764032 – excess GL – $50MM/occ/agg ACE Ins. Group #HXW776336 — excess GL – $25MM/occ/agg Great American Ins. #TUE357977102 – excess GL – $25MM/occ/agg

(ii)

Property FM Global Insurance #NB918 — $1,000,000,000 blanket limit Ace/Westchester #I20651258002 – excess flood – $10MM Great American #CPP5385581 & #ACG4285581 – excess flood – $5MM Arrowhead Group #303219EQ1 – excess earthquake – $3MM North Shore Mgmt. #NSM24310 – excess earthquake – $12MM FM Global #NB918 – Swanson primary earthquake – $1MM Federal Flood Policies – various locations & policy numbers — $500K

1

(iii)	Automobile St. Paul Travelers #TC2JCAP393K338 – $2MM combined single limit
(iv)	Cargo Lloyd’s #CD044747 – primary cargo – $10MM/conveyance Lloyd’s #CD044765 – excess cargo – $5MM/conveyance
(v)	Worker Compensation St. Paul Travelers #TC2JUB466K1644 – statutory limits St. Paul Travelers #TRJUB466K1656 – retro AZ, MA & WI only Ohio –Self-insured under S120005342 West Virginia – Self-insured (effective no later than 1/1/07)
(vi)	Director and Officer Liability Insurance Chubb #6802-9501 – primary — $10MM XL Specialty #ELU09312106___– excess D&O – $10MM AWAC US #___AW6294743 – excess D&O – $10MM RSUI #___NHS621943 – excess D&O – $10MM AXIS #___RAN714919012006 – excess D&O – $10MM Arch Insurance Co. #___DOX0007876-01 – excess D&O – $10MM Houston Casualty #___14_MGU-06-A12538 – excess D&O – $10MM Great American #___NSX5236478 – excess D&O – $10MM Liberty Mutual #___D03AT366109002 – excess D&O – $10MM National Union (AIG) #___6726927 – excess D&O – $10MM XL Specialty #___ELU09312206 – Side A coverage – $10MM
(vii)	Executive Protection Insurance National Union (AIG) #006082944 – crime – $10MM National Union (AIG) #647-5648 – special crime (K&R) – $10MM
(viii)	Other Fireman’s Fund #MXI97900076 – motor truck cargo – $250K/vehicle XL Insurance #XLPUN1502904 – excess punitives – $25MM agg Magna Carta #MCPD201467 – excess punitives – $25MM agg National Union #006731374 – fiduciary Continental Insurance Company #PST283529925 – foreign package — $1MM/occ

(b)	CALCULATION OF PREMIUM
	(i) DSW shall promptly pay or reimburse Retail Ventures 100% of premium expenses, deductibles or retention amounts Retail Ventures may incur in connection with Insurance Policies that relate solely to the DSW Business.

2

(ii) DSW shall promptly pay or reimburse Retail Ventures 50% of premium expenses, deductibles or retention amounts Retail Ventures may incur in connection with Retail Ventures’ Director and Officer Liability Insurance and Executive Protection Insurance.

(iii) DSW shall promptly pay or reimburse Retail Ventures its proportionate share of premium expenses, deductibles or retention amounts Retail Ventures may incur in connection with Insurance Policies that relate the Retail Ventures Business and the DSW Business. The “Retail Ventures Business” means any business of Retail Ventures other than the DSW Business. DSW’s proportionate will be calculated as follows:

     (A) LIABILITY INSURANCE costs shall be prorated based on the ratio of DSW’s sales as compared to total sales.

     (B) PROPERTY INSURANCE costs shall be prorated based on the ratio of the value of DSW property covered by the insurance policy as compared to the total value of all property covered by the insurance policy. [“VALUE OF PROPERTY” IS DEFINED AS RETAIL INVENTORY, FIXTURES, LEASEHOLDS, REAL PROPERTY, RENTAL INCOME AND BUSINESS INTERRUPTION.]

     (C) AUTOMOBILE INSURANCE costs shall be charged on each insured vehicle owned or leased by DSW which is covered by the insurance policy.

     (D) CARGO INSURANCE costs shall be prorated based on the ratio of the duties paid for DSW imports covered by the insurance policy as compared to the total duties paid for all imports covered by the insurance policy.

     (E) WORKERS COMPENSATION costs shall be prorated based on an actual per state rate against projected payrolls plus estimated claims cost per location.

     (F) EXECUTIVE PROTECTION AND OTHERS—Executive Protection Insurance (or crime), and foreign package coverage shall be prorated based on the ratio of sales for DSW as compared to the total sales covered by the policy. Fiduciary coverage for benefit plans shall be allocated based on 401K deposit percentages. Federal Flood Program policies are allocated to each location for which a policy is required to be purchased based on its Federal Flood Zone determination.

3

SCHEDULE IV
TO
AMENDED AND RESTATED
SHARED SERVICES AGREEMENT
DATED October 29, 2006
BETWEEN
RETAIL VENTURES, INC.
AND
DSW INC.

GUARANTEE

THIS GUARANTEE is made by RETAIL VENTURES, INC. (the “Guarantor”) in favor of DSW, INC. (“DSW”) in respect of the obligations of any one or more of the subsidiaries of the Guarantor other than DSW or any DSW subsidiary (the “Obligor(s)”) that may arise under that certain Amended and Restated Shared Services Agreement between the Guarantor and DSW, dated as of October 29, 2006 (the “Shared Services Agreement”) to pay to DSW certain amounts that may become due under and in accordance with Section 7.05 of the Shared Services Agreement (each, an “Obligation”).

In consideration of DSW acquiring certain information technology assets (equipment, computer software, etc.) for the benefit of one or more Obligors, the receipt and sufficiency of which are hereby acknowledged by the Guarantor, the Guarantor hereby agrees as follows:

1)	To the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, the Guarantor hereby absolutely, irrevocably and unconditionally guarantees to DSW and its assignees the timely payment to DSW or its assignees of all Obligations. Without limiting the generality of the foregoing, DSW may at any time and from time to time, without notice to or consent of the Guarantor and without impairing or releasing the obligations of the Guarantor, (a) agree with any Obligor to make any change in the terms of any obligation or liability of such Obligor to DSW, (b) take or fail to take any action of any kind in respect of any security for any obligation or liability of any Obligor to DSW, (c) exercise or refrain from exercising any rights against any Obligor, or (d) compromise or subordinate any obligation or liability of any Obligor to DSW, including any security therefor.
2)	In the event that an Obligor shall fail to make timely payment to DSW of all or any portion of an Obligation when due, the Guarantor shall remit to DSW, on the business day immediately following DSW’s request, payment of the full amount of such Obligation. The Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement for DSW to pursue or exhaust any of its rights or remedies against the Obligor with respect to performance of any of the Obligations, and the Guarantor hereby waives any right to require that DSW seek enforcement of any performance against an Obligor or any other person, prior to any action against the Guarantor under the terms of this Guarantee.
3)	DSW shall not be obligated to file any claim relating to an Obligation in the event that an Obligor becomes subject to any insolvency, bankruptcy, receivership, assignment for the benefit of creditors or reorganization of such Obligor, or any similar proceedings by or against such Obligor or the assets of such Obligor, in order to maintain DSW’s rights under this Guarantee, and the failure of DSW to so file shall not affect the Guarantor’s obligations hereunder. The liability of the Guarantor shall not be released, reduced, impaired or affected by or as a result of any insolvency, bankruptcy, receivership, assignment for the benefit of creditors or reorganization of an Obligor, or any similar proceedings instituted by or against an Obligor or the assets of an Obligor. The obligations of the Guarantor hereunder shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Obligor in respect of an Obligation is rescinded or must be otherwise restored by DSW, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and the Guarantor agrees that it will indemnify DSW on demand for all reasonable costs and expenses (including, without limitation, fees and expenses of counsel) incurred by DSW in connection with such rescission or restoration, including any such costs and expenses

4

	incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.
4)	This Guarantee is a guarantee of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations whenever arising.
5)	This Guarantee shall remain in effect for the entire term of the Shared Services Agreement and thereafter until all Obligations of each Obligor have been indefeasibly satisfied in full.
6)	This Guarantee shall inure to the benefit of and be enforceable by DSW and its successors, assign(s) or other transferee(s) and shall be deemed to have been made under, and shall be governed by, the laws of the State of Ohio, excluding its conflicts of laws rules. None of the terms of this Guarantee may be waived, altered, modified or amended except in writing signed by the Guarantor and DSW.
7)	All notices or other communications to the Guarantor or DSW shall be in writing and shall be given in the same manner and with the same effect as set forth in Section 9.09 of the Shared Services Agreement. The address of Guarantor is as follows:
	Retail Ventures, Inc. 3241 Westerville Road Columbus, Ohio 43224

IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed and delivered by its duly authorized officers effective as of the 29^th day of October, 2006.

RETAIL VENTURES, INC.
By:	/s/ James A. McGrady
Name: Title:	James A. McGrady Chief Financial Officer

5

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Jay L. Schottenstein, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of DSW Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	[Reserved];
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the

registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 6, 2006	/s/ Jay L. Schottenstein
	Jay L. Schottenstein
	Chief Executive Officer and Chairman of the Board

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Douglas J. Probst, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of DSW Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	[Reserved];
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the

registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 6, 2006	/s/ Douglas J. Probst
	Douglas J. Probst
	Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

     In connection with the Quarterly Report of DSW Inc. (the “Company”) on Form 10-Q for the period ending October 28, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jay L. Schottenstein, Chief Executive Officer and Chairman of the Board of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

          (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

December 6, 2006	/s/ Jay L. Schottenstein
	Jay L. Schottenstein
	Chief Executive Officer and Chairman of the Board

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

     In connection with the Quarterly Report of DSW Inc. (the “Company”) on Form 10-Q for the period ending October 28, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Douglas J. Probst, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

          (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

December 6, 2006	/s/ Douglas J. Probst
	Douglas J. Probst
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.