BY AND AMONG

Exhibit 2.1

STOCK PURCHASE AGREEMENT

BY AND AMONG

MR. RAGS ACQUISITION, INC.

CLAIRE'S STORES, INC.,

AND

LUX CORPORATION (D/B/A MR. RAGS)

DATED MAY 17, 2002

TABLE OF CONTENTS

Page No.
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SECTION 1. DEFINITIONS ...................................................................................1
1.1. Defined Terms .................................................................................1
1.2. Other Definitional and Interpretive Provisions ................................................8

SECTION 2. SALE OF STOCK .................................................................................9
2.1. Purchase and Sale .............................................................................9

SECTION 3. PURCHASE PRICE AND OTHER PAYMENT OBLIGATIONS ..................................................9
3.1. Initial Purchase Price ........................................................................9
3.2. Additional Consideration ......................................................................9
3.3. Inventory Payment ............................................................................10
3.4. Access to Books and Records ..................................................................11
3.5. Security .....................................................................................11
3.6. Trial Balance Sheet ..........................................................................12
3.7. Ordinary Course ..............................................................................12
3.8. Interest .....................................................................................12
3.9 Lockbox Account ..............................................................................12
3.10. Tenant Improvement Allowances ................................................................12

SECTION 4. CLOSING ......................................................................................13
4.1. Closing ......................................................................................13

SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND COMPANY .........................................13
5.1. Authorization ................................................................................13
5.2. Organization, Power and Qualification ........................................................13
5.3. Capital Stock of the Company .................................................................13
5.4. Subsidiaries .................................................................................14
5.5. Permits and Intangibles ......................................................................14
5.6. Taxes ........................................................................................14
5.7. Assets and Properties ........................................................................15
5.8. Material Contracts ...........................................................................15
5.9. No Violations ................................................................................15
5.10. Government Contracts .........................................................................15
5.11. Litigation ...................................................................................15
5.12. Compliance with Laws .........................................................................16
5.13. Intellectual Property ........................................................................16
5.14. Employment Matters; Benefits .................................................................16
5.15. Property .....................................................................................16
5.16. Insurance ....................................................................................17
5.17. Officers and Directors .......................................................................17

5.18. Bank Accounts and Powers of Attorney ........................................................17
5.19. Consents ....................................................................................17
5.20. Intercompany Loans; Perfected Liens .........................................................17
5.21. No Additional Representations ...............................................................17

SECTION 6. REPRESENTATIONS AND WARRANTIES OF PURCHASER .................................................18
6.1. Organization, Power and Qualifications ......................................................18
6.2. Authorization ...............................................................................18
6.3. Consents ....................................................................................18
6.4. Litigation ..................................................................................18
6.5. No Violations ...............................................................................18
6.6. Stock Acquired For Investment ...............................................................19
6.7. Information .................................................................................19
6.8. No Liabilities ..............................................................................19
6.9 Permits and Intangibles .....................................................................19
6.10 Capitalization ..............................................................................19
6.11. Ownership Information .......................................................................19

SECTION 7. DELIVERIES AT CLOSING .......................................................................20
7.1. Deliveries by Seller ........................................................................20
7.2. Deliveries by Purchaser .....................................................................20

SECTION 8. POST-CLOSING COVENANTS ......................................................................21
8.1. Employee Matters ............................................................................21
8.2. Transitional Services Agreement .............................................................21
8.3. Defense of Litigation .......................................................................21
8.4. Section 338(h)(10) Election .................................................................21
8.5. Guaranties...................................................................................22
8.6. Use of Claire's Name ........................................................................22
8.7. Delivery of Bank Documents ..................................................................22
8.8. Cooperation for Cancellation of Purchase Orders .............................................22

SECTION 9. INDEMNIFICATION .............................................................................23
9.1. Survival ....................................................................................23
9.2. Indemnification by Seller ...................................................................23
9.3. Indemnification by Purchaser and Shareholders ...............................................24
9.4. Third Party Claims ..........................................................................24
9.5. Limitation of Recourse ......................................................................24
9.6. Punitive Damages ............................................................................25

SECTION 10. MISCELLANEOUS ...............................................................................25
10.1. Severability ................................................................................25
10.2. Counterparts ................................................................................25
10.3. Headings ....................................................................................25
10.4. Expenses ....................................................................................25
10.5. Taxes .......................................................................................25

10.6. Publicity ...................................................................................25
10.7. Law Governing; Arbitration ..................................................................25
10.8. Indemnification for Broker Fees .............................................................26
10.9. Binding on Successors and Assigns ...........................................................26
10.10. Entire Agreement ............................................................................26
10.11. Access to Records ...........................................................................26
10.12. Notices .....................................................................................27
10.13. Confidentiality .............................................................................27
10.14. Attorneys' Fees .............................................................................27
10.15. Section 338(h)(10) Election Filing ..........................................................28

iii

LIST OF EXHIBITS

Exhibit A - Assumption Agreement

Exhibit B - Non-Compete Agreement

Exhibit C - Security Agreement

Exhibit D - Transitional Services Agreement

Exhibit E - Agreement to Assign Lease

Exhibit F - Irrevocable Bank Instructions

LIST OF SCHEDULES

1.1 Equipment Leases
1.2 Leasehold Improvement Leases
1.3 Tenant Improvement Allowances
3.6 Trial Balance Sheet and Preliminary Proration Schedule
5.2 List of States Qualified to do Business
5.8 Material Contracts
5.11 Litigation; Workers Compensation Claims
5.13 Intellectual Property
5.14(b) Other Employee Matters
5.16 Insurance
5.17 Officers and Directors
5.18 Bank Accounts
6.11 Ownership Information of Purchaser

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT is dated this 17th day of May, 2002 by
and among MR. RAGS ACQUISITION, INC. ("Purchaser"), a California corporation,
CLAIRE'S STORES, INC., a Florida corporation ("Seller"), and LUX CORPORATION, a
Washington corporation (the "Company").

W I T N E S S E T H

WHEREAS, the Company is in the business (the "Business") of
distributing and selling urban, surf, snow and skate apparel at the stores
(collectively the "Stores") located at the Leased Real Property locations; and

WHEREAS, the respective board of directors of Purchaser and Seller have
determined that it is advisable and in the best interests of the respective
entities and their shareholders, that Purchaser purchase all of the outstanding
capital stock of the Company; and

WHEREAS, Seller owns 100% of the issued and outstanding capital stock
of the Company (the "Stock"); and

WHEREAS, Purchaser, Shareholders, Seller and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the consummation of the transactions contemplated under this Agreement.

NOW, THEREFORE, in consideration of the recitals herein before stated
and the mutual representations, warranties, covenants and agreements hereinafter
set forth, the receipt and sufficiency of which are hereby acknowledged,
Purchaser, Shareholders, Seller and the Company do hereby represent, warrant,
covenant and agree as follows:

SECTION 1.
DEFINITIONS

1.1 DEFINED TERMS. In addition to terms defined elsewhere in this
Agreement, the following terms when utilized in this Agreement, unless the
context otherwise requires, shall have the meanings indicated, which meanings
shall be equally applicable to both the singular and plural forms of such terms:

"ACCOUNTING STANDARDS" means the accounting policies and procedures of
the Seller as described in Seller's Fiscal 2001 Annual Report on Form 10-K,
which policies and procedures comply with GAAP.

"ADDITIONAL FINANCIAL INFORMATION" is defined in Section 6.7 of this
Agreement.

"ADDITIONAL STORES" means any additional stores opened by the Company,
Purchaser or any Affiliate of Purchaser after the Closing Date that relate to
the Business.

"AFFILIATE OF PURCHASER" means any Person "controlled by" or "under
common control" of the Purchaser, as such terms are generally used under the
securities laws.

"AGREEMENT" means this Stock Purchase Agreement together with all
exhibits and schedules contemplated hereby.

"AGREEMENT TO ASSIGN LEASE" means the Agreement to Assign Lease
attached hereto as EXHIBIT E that obligates Seller to guarantee the lease
obligations for the real property located at 000 Xxxx Xxxxxx, Xxxxx Xxx. 350 and
000, Xxxx Xxxxx, Xxxxxxxxxx.

"ALLOCATION" is defined in Section 8.4(d) of this Agreement.

"ALLOCATION AGREEMENT" is defined in Section 8.4(d) of this Agreement.

"ASSUMPTION AGREEMENT" means the Assumption Agreement attached hereto
as EXHIBIT A that obligates Purchaser and the Company to assume the obligations
of Seller under the Leasehold Improvement Leases and Equipment Leases to which
Seller is a party and that relate to the Business, and to hold Seller harmless
from any liability of any character arising out of, or relating to, the
Leasehold Improvement Leases and Equipment Leases.

"BANK DEBT" shall mean debt incurred by the Company after the Closing
Date for the purpose of financing future inventory purchases for the Stores.

"BENEFIT PLANS" is defined in Section 5.14. of this Agreement.

"BUSINESS" is defined in the preamble of this Agreement.

"CHANGE IN CONTROL" means the occurrence of any event whereby (i) at
least one the Purchaser Shareholders cease to own and control at least 50% of
the economic or voting interest in the Purchaser, (ii) the current partners of
International Retail LTD, an Australian company, cease to own or control at
least 50% of the economic or voting interest in such entity, (iii) the current
members of Xxxxx Apparel LLC, a California limited liability company, cease to
own or control at least 50% of the economic or voting interest in such entity,
(iv) the current members of Xxxx Apparel LLC, a California limited liability
company, cease to own or control at least 50% of the economic or voting interest
in such entity, or (v) the current directors of the Purchaser cease to control
the board of directors of the Purchaser.

"CLOSING DATE" shall mean May 17, 2002.

"CLOSING DATE INVENTORY" shall mean the inventory set forth on the
Closing Date Inventory List, less any inventory reflected on the Closing Date
Inventory List that is not delivered to the Stores after the Closing Date as a
result of the cancellation of the purchase order by the Seller after the Closing
Date and which inventory Seller has not paid (nor is obligated to pay) for.

"CLOSING DATE INVENTORY LIST" is defined in Section 3.3 of this
Agreement.

"CLOSING DATE INVENTORY RETAIL PRICE" is defined in Section 3.3 of this
Agreement.

"CODE" means the Internal Revenue Code of 1986, as amended.

"COMPANY" is defined in the preamble of this Agreement.

"CONFIDENTIALITY AGREEMENT" means that certain Confidentiality
Agreement previously executed between the Purchaser (or related parties) and
Seller.

"DATE OF REDUCTION" shall mean the day following the date that the
value of the unsold Closing Date Inventory, valued at the Closing Date Inventory
Retail Prices, is less than $15 million; provided, that, the Inventory Payment
for the Closing Date Inventory sold prior to such date has been paid to Seller
in accordance with the terms of this Agreement.

"DEDUCTIBLE" is defined in Section 9.2 of this Agreement.

"DEFERRED PAYMENT" is defined in Section 3.2 of this Agreement.

"EMPLOYEE BENEFIT PLAN" means any (i) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (ii) defined contribution retirement plan or arrangement which is
an Employee Pension Benefit Plan intended to be qualified under Section 401(a)
of the Code, (iii) defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan intended to be qualified under Section 401(a) of
the Code, or (iv) Employee Welfare Benefit Plan.

"EMPLOYEES" is defined in Section 5.14(a) of this Agreement.

"EQUIPMENT LEASES" shall mean the equipment leases set forth on
Schedule 1.1 to which Seller is a party and that include equipment used in the
Business.

"EQUITABLE EXCEPTIONS" is defined in Section 5.1 of this Agreement.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.

"EXCESS INVENTORY AMOUNT" shall mean the Closing Date Inventory for
which Seller has received the Inventory Payment, valued at the Closing Date
Inventory Retail Price and as determined by Seller based on perpetual sales
records in the Stores.

"FULL INVENTORY PAYMENT" means the product of (x) .48, TIMES (y) the
aggregate Closing Date Inventory Retail Price for the Closing Date Inventory as
set forth on the list referenced in Section 3.3(b) hereof, less applicable sales
taxes.

"GAAP" means generally accepted accounting principles as in effect in
the United States of America at the time of application thereof.

"GROSS SALES" means the cash or credit card receipts for merchandise
sold in the Stores or any Additional Stores, after the Closing Date.

"INITIAL INVENTORY PAYMENT" is defined in Section 3.3(a) of this
Agreement.

"INITIAL PURCHASE PRICE" is defined in Section 3.1 of this Agreement.

"INSURED LOSSES" means all claims filed against the Company or the
Seller after the Closing Date that relate to events from February 2, 2002 until
the Closing Date with respect to the Business that are covered by the Seller
Insurance Policies.

"INTELLECTUAL PROPERTY" is defined in Section 5.13 of this Agreement.

"IRS" means the Internal Revenue Service.

"INVENTORY PAYMENT" is defined in Section 3.3(a) of this Agreement.

"LATEST BALANCE SHEET DATE" means February 2, 2002.

"LEASEHOLD IMPROVEMENT LEASES" shall mean the leasehold improvement
leases listed on Schedule 1.2 to which Seller is a party and that relate to the
Business.

"LEASED REAL PROPERTY" is defined in Section 5.15 of this Agreement.

"LEASES" is defined in Section 5.15 of this Agreement.

"LICENSED SOFTWARE" is defined in Section 5.13 of this Agreement.

"LIEN" means any lien, charge, claim, restriction, encumbrance,
security interest or pledge of any kind whatsoever.

"LOCKBOX ACCOUNT" means the bank account established for the benefit of
the Company where all proceeds of the Net Sales shall be deposited, and pursuant
to which the Company and Purchaser have irrevocably authorized the bank where
such account has been established, pursuant to the bank instructions set forth
on Exhibit F, to allow Seller to sweep the Inventory Payment, the Deferred
Payment, the payments due under the Leasehold Improvement Leases, Equipment
Leases and Transitional Services Agreement.

"LOSSES" is defined in Section 9.2 of this Agreement.

"MARKDOWN RESTRICTIONS" is defined Section 3.3 of this Agreement.

"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, assets, properties, results of operations or financial condition of
the Business taken as a whole (excluding economic and general market
conditions).

"MATERIAL ADVERSE EFFECT ON PURCHASER" means (i) a material adverse
effect on the business, assets, properties, results of operations or financial
condition of Purchaser related to the Purchaser's acquisition of the Stock or
(ii) a material adverse effect on the Company's or any Shareholder's ability to
enter into or perform its obligations under this Agreement or the Related
Agreements, including, but not limited to, the obligations to make the Deferred
Payment, Inventory Payment and payments under the Equipment Leases, Leasehold
Improvement Leases and Transitional Services Agreement.

"MATERIAL CONTRACTS" means any written contract or agreement relating
to the Business to which the Company or the Seller is a party, and which (i)
relates to indebtedness in excess of $100,000 for money borrowed from others,
purchase money indebtedness or capitalized lease obligations, (ii) relates to
the purchase, maintenance or acquisition, or sale or furnishing of materials,
supplies, merchandise, machinery, equipment, parts or any other property or
services (excluding any such contract made in the Ordinary Course and which is
expected to be fully performed within 90 days of the date hereof or which
involves revenues or expenditures of less than $100,000), (iii) is a collective
bargaining agreement, (iv) obligates the Company not to compete with any
business (excluding customary restrictive covenants contained in agreements
entered into in the Ordinary Course or restrictive covenants contained in the
Leases), (v) relates to (a) employment, compensation, severance, or consulting
between the Company and any of its executive officers, or (b) other employees or
consultants who are entitled to compensation thereunder in excess of $100,000
per annum (vi) is a lease or sublease of real property, or a lease, sublease or
other title retention agreement or conditional sales agreement involving annual
payments in excess of $100,000 individually or $200,000 in the aggregate for any
machinery, equipment, vehicle or other tangible personal property (whether the
Company is a lessor or lessee), (vii) is a contract for capital expenditures or
the acquisition or construction of fixed assets for or in respect of any real
property involving payments in excess of $100,000, or (viii) is a contract
granting any Person a Lien on any of the assets of the Company, in whole or in
part (other than Permitted Liens).

"MATERIAL PERMITS" is defined in Section 5.5 of this Agreement.

"NET FUNDS" shall mean the remainder of (x) the gross retail sales
price (subject to the Markdown Restrictions) received by Purchaser from the sale
of the Closing Date Inventory, minus (y) the Inventory Payment due to Seller
under the terms of this Agreement.

"NET SALES" shall mean the remainder of (A) Gross Sales, MINUS (B) the
sum of (x) sales tax actually collected by Purchaser and remitted to the
appropriate state agency in accordance with applicable law, plus (y) Returns.

"NON-COMPETE AGREEMENT" means the agreement attached hereto as
EXHIBIT B.

"OBLIGATIONS" is defined in Section 3.5 of this Agreement.

"ORDINARY COURSE" shall mean the ordinary course of business consistent
with custom and practice (including with respect to quantity and frequency)
typical to the apparel industry, consistent with the past practices of the
Company or the Seller.

"PERMITTED LIENS" means (i) Liens for taxes not yet due and payable or
being contested in good faith by appropriate proceedings, (ii) easements,
covenants, conditions and restrictions of record, (iii) easements, covenants,
conditions and restrictions not of record as to which no material violation or
encroachment exists or, if such violation or encroachment exists, as to which
the cure of such violation or encroachment would not materially interfere with
the conduct of the business of the Company, (iv) any zoning or other
governmentally established restrictions or encumbrances, (v) workers or
unemployment compensation Liens arising in the Ordinary Course securing amounts
which are not delinquent, (vi) mechanic's, materialman's, supplier's,

vendor's or similar Liens arising in the Ordinary Course securing amounts which
are not delinquent, (vii) railroad trackage agreements, utility, slope and
drainage easements, right-of-way easements and leases regarding signs, and
(viii) other immaterial imperfections of title, easements, covenants,
conditions, restrictions or encumbrances.

"PERSON" means any natural person, corporation, limited liability
company, unincorporated organization, partnership, association, joint-stock
company, joint venture, trust or government, or any agency or political
subdivision of any government.

"PHYSICAL INVENTORY" shall mean the physical inventory conducted by the
Company on June 30, 2002 and delivered to the Seller for Seller's review and
approval by July 5, 2002.

"POST-CLOSING DATE INVENTORY BY SELLER" means the Closing Date
Inventory in the Stores on the 180th day after the Closing Date (as determined
by an inventory taken by the Seller), valued at the Closing Date Inventory
Retail Price.

"POST-CLOSING DATE INVENTORY PAYMENT" is defined in Section 3.3 hereof.

"PRORATED AMOUNT" is defined in Section 3.6 hereof.

"PURCHASE PRICE" means the sum of (x) the Initial Purchase Price, plus
(y) the Deferred Payment actually received by Seller, plus (z) the Inventory
Payment actually received by Seller.

"PURCHASER" is defined in the preamble of this Agreement.

"PURCHASER SHAREHOLDERS" is defined in Section 6.11 hereof.

"PURCHASER'S APPRAISAL" is defined in Section 8.4(d) of this Agreement.

"RELATED AGREEMENTS" is defined as those other agreements to be entered
into by the parties in connection with this Agreement and set forth as exhibits
hereto.

"RETURNS" means any merchandise sold by the Purchaser at the Stores or
any Additional Stores that relates to the Gross Sales that are returned to
Purchaser by the customer for a refund, excluding any returns that relate to
merchandise not included in the calculation of Gross Sales or for which the
Deferred Payment or Inventory Payment has not been paid to Seller for any
reason.

"RULES OF ARBITRATION" is defined in Section 10.7 of this Agreement.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SECTION 338 FORMS" is defined in Section 8.4(e) of this Agreement.

"SECTION 338(H)(10) ELECTION" is defined in Section 8.4(f) of this
Agreement.

"SECURITY AGREEMENT" is defined in Section 3.5 hereof.

"SELLER" is defined in the preamble of this Agreement.

"SELLER ENTITIES" is defined in Section 10.13 of this Agreement.

"SELLER INSURANCE POLICIES" means the insurance policies of the Company
(or the Seller that cover claims against the Company) in effect as of the
Closing Date.

"SELLER'S KNOWLEDGE" means the actual knowledge, without independent
investigation, of the chief financial officer of the Seller.

"SHAREHOLDERS" shall mean Xxxxx Xxxxxxxx and Xxxx Xxxxxx.

"SHRINKAGE AMOUNT" shall mean the remainder, if any, of (x) the Closing
Date Inventory (provided, that the Closing Date Inventory for purposes of this
calculation shall be reduced for any shrinkage that occurred from February 2,
2002 until the Closing Date based on the Physical Inventory), minus (y) the
Closing Date Inventory for which Seller has received the Inventory Payment
(excluding the Post-Closing Date Inventory Payment) as required under Section 3
hereof, in each case of (x) and (y) valued at the Closing Date Inventory Retail
Price

"SHRINKAGE AMOUNT ALLOWED" shall mean the product of (x) five percent
(5%), times (y) the Closing Date Inventory valued at the Closing Date Inventory
Retail Price.

"SHRINKAGE AMOUNT DISALLOWED" shall mean the remainder of (A) the
Shrinkage Amount minus (B) the Shrinkage Amount Allowed.

"SHRINKAGE PAYMENT" is defined in Section 3.3(a) of this Agreement.

"STOCK" is defined in the preamble of this Agreement.

"STORES" is defined in the preamble of this Agreement.

"SUBSIDIARIES" means any corporation in which the Company owns 50% or
more of the issued and outstanding capital stock of such corporation.

"TAX LOSSES" is defined in Section 9.2 of this Agreement.

"TAX REPRESENTATIONS" is defined in Section 9.1(a) of this Agreement.

"TAXES" shall mean all taxes, charges, fees, levies or other
assessments including, without limitation, income, excise, property,
withholding, sales and franchise taxes, imposed by the United States, or any
state, county, local or foreign government or subdivision or agency thereof.

"TENANT IMPROVEMENT ALLOWANCES" means the tenant improvement allowances
relating to various Leases described on Schedule 1.3.

"TRADE SECRETS" is defined in Section 10.13 of this Agreement.

"TRANSITIONAL SERVICES AGREEMENT" is defined in Section 8.2 of this
Agreement.

"TRIAL BALANCE SHEET" is defined in Section 3.6 of this Agreement.

"TRIGGERING EVENT" shall mean (a) the sale by Purchaser or the Company
of all or substantially all of its assets, (b) a Change in Control, (c) the
closing of an underwritten public offering by the Company (or any Affiliate of
Purchaser or the Company that includes the operations of the Business) pursuant
to an effective registration statement under the Securities Act, (d) if
Purchaser or the Company makes an assignment for the benefit of creditors
generally, is the subject of any proceeding under any bankruptcy or insolvency
laws, seeks statutory or court protection from its creditors, takes steps to
wind up or terminate its legal existence, or if a liquidator, trustee, receiver,
manager or other officer with similar power shall be appointed of or for
Purchaser or the Company, provided, that, if such bankruptcy proceeding is
involuntary, the Purchaser or the Company, as the case may be, shall have 90
days to dismiss such proceeding, provided that the Company or Purchaser, as the
case may be, takes diligent actions (within at least three days of such filing
and continues such diligent actions during such 90-day period), as determined in
Seller's discretion, to dismiss such proceeding, (e) a default or breach of the
Bank Debt that is not cured by Purchaser or the Company within any applicable
cure period as set forth therein, (f) a final judgment or judgments for payment
of money in excess of $ 250,000 is rendered against the Purchaser or the Company
that is not discharged or paid within 30 days of entry thereof, (g) Purchaser or
the Company fails to timely satisfy its obligations to make any Deferred Payment
or Inventory Payment to Seller in accordance with Section 3 of this Agreement,
(h) an event shall occur, whether or not insured, which results in a decrease in
Gross Sales of more than 50% on an annualized basis, (i) the Purchaser or the
Company merges with, consolidates with, acquires all or substantially all of the
assets or capital stock of, or otherwise combines with or acquires any Person,
(j) a default or an event of default (as such terms are used in the respective
agreement and subject to the cure periods provided for therein) occurs under the
Security Agreement, Assumption Agreement, Transitional Services Agreement or any
agreement relating to the Lockbox Account, (k) Purchaser, the Company or the
Shareholders fail to satisfy any indemnification claim made by Seller within 15
days of final determination that Seller has sustained a Loss pursuant to Section
9 hereof, or (l) the failure of the Company to keep in full force and effect the
insurance policies as set forth in the certificates of insurance delivered by
Purchaser on the Closing Date pursuant to Section 7.2 hereof until the
obligations of Section 3 have been satisfied.

1.2 OTHER DEFINITIONAL AND INTERPRETIVE PROVISIONS.

(a) Unless otherwise defined herein, all terms defined in this
Agreement shall have the defined meanings when used in any certificate, report
or other document made or delivered pursuant hereto.

(b) The words "hereof," "herein," "hereunder" and "hereto" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.

(c) The inclusion of any information on any schedule to this
Agreement shall not be deemed to be an admission or acknowledgment by Seller or
the Company, in and of itself, that such information is required to be listed on
such schedule or is material to or outside the Ordinary Course. Any disclosure
made in any schedule to this Agreement which should, based on the substance of
such disclosure, be applicable to another schedule to this Agreement shall be

deemed to be made with respect to such other schedule regardless of whether or
not a specific reference is made thereto.

(d) The specification of any dollar amount in the
representations and warranties or otherwise in this Agreement or in the
schedules hereto is not intended and shall not be deemed to be an admission or
acknowledgment of the materiality of such amounts or items, nor shall the same
be used in any dispute or controversy between the parties to determine whether
any obligation, item or matter (whether or not described herein or included in
any schedule) is or is not material for purposes of this Agreement.

SECTION 2.
SALE OF STOCK

2.1. PURCHASE AND SALE. Seller hereby sells to Purchaser, and Purchaser
hereby purchases from Seller, all of the right, title and interest of Seller in
and to the Stock, on the terms and subject to the conditions set forth in this
Agreement. The parties agree that the closing shall be effective as of 12:01
a.m. EDT on May 18, 2002.

SECTION 3.
PURCHASE PRICE AND OTHER PAYMENT OBLIGATIONS

3.1. INITIAL PURCHASE PRICE. On the Closing Date, the Purchaser shall
pay to the Seller by wire transfer of immediately available funds to an account
designated by Seller prior to the Closing Date, the sum of (x) Five Million
Dollars ($5,000,000) (the "Initial Purchase Price"), plus (y) the Prorated
Amount.

3.2. ADDITIONAL CONSIDERATION.

(a) In addition to the Initial Purchase Price, the Seller
shall be entitled to receive additional payments from Purchaser of Ten Million
Dollars ($10,000,000) (the "Deferred Payment").

(b) The Deferred Payment shall be paid by Purchaser to Seller
by wire transfer of immediately available funds to an account designated by
Seller prior to such date (or if not so designated, to the account designated
for the payment of the Initial Purchase Price or the account designated for the
immediately preceding prior Deferred Payment, if different) within twenty (20)
days of the last date of each month, commencing with the month ending May 31,
2002. Subject to the provisions of Section 3.2(d) hereof, for the first 12
months after the Closing Date, the monthly installments of the Deferred Payment
shall be equal to one percent (1%) of the Net Sales for each month (including
any partial month). Thereafter, subject to the provisions of Section 3.2(d)
hereof, the monthly installments of the Deferred Payment shall be equal to two
percent (2%) of the Net Sales for each month (including any partial month),
until the Deferred Payment is paid in full.

(c) Until such time as the Deferred Payment is paid in full to
Seller, Purchaser shall sell the inventory in the Stores at retail prices usual
and customary for the Business, subject to the provisions of Section 3.3 (c)
hereof.

(d) Notwithstanding anything to the contrary contained herein,
the Seller shall be entitled to receive the Deferred Payment (less any amounts
of Deferred Payment actually paid to Seller prior to such date) within five
business days of a Triggering Event. Any payment due to Seller as a result of a
Triggering Event shall be paid by Purchaser to Seller by wire transfer in
immediately available funds in accordance with the procedures set forth in
Section 3.2(b) hereof.

(e) The Deferred Payment shall be allocated in the manner set
forth on Schedule 3.2(e).

3.3. INVENTORY PAYMENT.

(a) In addition to the Initial Purchase Price and Deferred
Payment, Seller shall be entitled to receive an amount (the "Inventory Payment")
equal to the sum of (x) forty-eight percent (48%) of the Net Sales on the
Closing Date Inventory sold during the 180-day period after the Closing Date
("Initial Inventory Payment"), plus (y) ten percent (10%) of the Post-Closing
Date Inventory by Seller (the "Post-Closing Date Inventory Payment"), plus (z)
forty-eight percent (48%) of the Shrinkage Amount Disallowed (the "Shrinkage
Payment").

(b) As soon as practicable after the Closing Date, but in no
event more than ten (10) business days after the Closing Date, Seller shall
deliver to Buyer a retail inventory ledger that lists all of the Company's
inventory, whether purchased or on-order, as of the Closing Date (the "Closing
Date Inventory List"), including the stated retail prices (the "Closing Date
Inventory Retail Price") and the approximate date that the Closing Date
Inventory was shipped from the distribution center to the Store.

(c) The sales price of the Closing Date Inventory may not be
reduced by more than the percentages set forth below from the Closing Date
Inventory Retail Price without the prior written approval of Seller (the
"Markdown Restrictions").

If the Closing Date Inventory has not been sold by the Then the Company can reduce the Closing
by the Company: Date Inventory Retail Price by no more
than the following percentage:

On or before the 90th day after the date the Closing Date 0%
Inventory was originally placed in the Store for retail
sale

After the 90th day but prior to the 121st following the 30%
date the Closing Date Inventory was originally placed in
the Store for retail sale

After the 120th day but prior to the 151st following the 50%
date the Closing Date Inventory was originally placed in
the Store for retail sale

After the 150th day but prior to the 181st following the 70%
date the Closing Date Inventory was originally placed in
the Store for retail sale

Additionally, (i) during the first 60 days following the
Closing Date, no more than ten percent (10%) of the inventory (valued at the
retail price therefor) in the Stores shall consist of inventory other than the
Closing Date Inventory (valued at the Closing Date Inventory Retail Price), and
(ii) after the 60th day following the Closing Date and until the Date of
Reduction, the inventory in the Stores shall consist only of the Closing Date
Inventory and inventory that does not exceed the Excess Inventory Amount. Any
new inventory allowed to be placed in the Stores pursuant to subsections (i) and
(ii) hereof shall not be placed in the retail space that occupies the front
one-third of the retail space of the Store (and the front one-third of the
retail space shall be used exclusively for the placement of the Closing Date
Inventory) during the 60-day period following the Closing Date, and thereafter,
until the Date of Reduction, may not occupy more than 50% of the retail space
that occupies the front one-third of the retail space of the Store.

(d) Notwithstanding anything to the contrary contained herein,
the Seller shall be entitled to receive the Full Inventory Payment (less any
amounts of Inventory Payment actually paid to Seller prior to such date) within
five business days of a Triggering Event.

3.4. ACCESS TO BOOKS AND RECORDS. Seller shall be provided access to
the books and records of Purchaser as such books and records relate to the
calculation of Net Sales for purposes of calculating the Deferred Payment and
Inventory Payment, including, but not limited to, access to (i) copies of sales
tax returns relating to the Gross Sales, and verification of payment therefor,
(ii) records relating to Returns, including evidence that a refund has been paid
to the customer and that the Return relates to Gross Sales for which the Seller
has received the Deferred Payment or Inventory Payment relating thereto, (iii)
register receipts, (iv) cash reports of sales in the Stores and Additional
Stores, (v) monthly income statements for each Store and Additional Store, (vi)
monthly financial statements (including a balance sheet and income statement on
a consolidated basis) for the Company, and (vii) other records that Seller deems
reasonably necessary or desirable to verify the accuracy of the Deferred Payment
or Inventory Payment due to Seller hereunder.

3.5. SECURITY. As security for the Company's and Purchaser's
obligations (collectively, the "Obligations") under this Agreement, including
the Deferred Payment, Inventory Payment, the obligations under the Leasehold
Improvement Leases, Equipment Leases and Transitional Services Agreement, and
the indemnification obligations of Purchaser, Company and the Shareholders, the
Purchaser and the Company hereby grants to Seller a first priority lien in (i)
all of the Closing Date Inventory (including the proceeds thereof, whether or
not such proceeds are deposited into the Lockbox Account), (ii) the proceeds in
the Lockbox Account (provided, that, Seller acknowledges that such lien shall be
subordinated to the lien of any future lender that makes advances to the Company
on a formula basis or otherwise in reliance upon inventory, but only with
respect to proceeds derived from sales of inventory that are financed by such
lender, and (iii) the Company's leasehold interests in the Leases, in each case
pursuant to the terms and conditions of the Security Agreement attached hereto
as EXHIBIT C (the "Security Agreement"). The lien granted hereby shall be
evidenced by the filing of applicable UCC-1 Financing Statement(s) for the
benefit of Seller.

3.6. TRIAL BALANCE SHEET. Attached hereto as Schedule 3.6 is a trial
balance sheet (the "Trial Balance Sheet") prepared by Seller that sets forth a
trial balance sheet of the Company as of April 6, 2002. The Seller and Purchaser
have indicated on the attached Trial Balance Sheet the liabilities that will be
assumed by Seller and the assets that will be credited to the Seller after the
Closing Date. Seller and Purchaser agree that certain income and expenses shall
be prorated through the Closing Date. Specifically, Purchaser shall, in addition
to payment of the Initial Purchase Price, pay to the Seller on the Closing Date,
by wire transfer in immediately available funds, an amount (the "Prorated
Amount") equal to the net amount set forth on Schedule 3.6 as the "Net Amount
due to Seller". In the event Purchaser or Seller receives invoices for amounts
related to line items on the Trial Balance Sheet that have been identified as
the responsibility of the other party, the receiving party shall forward such
invoice to the responsible party, and the responsible party shall satisfy such
obligation in accordance with the due date set forth in the invoice; provided,
that Seller shall have no obligation to make any payments assumed by Seller
under this Section 3.6 in the event of a Triggering Event. In the event
Purchaser or the Company fails to timely satisfy an obligation that is the
responsibility of the Purchaser or the Company pursuant to the terms of this
Agreement, Seller shall be authorized to deduct such payment from the Lockbox
Account and remit such payment to the respective payee set forth on the invoice.

3.7. ORDINARY COURSE. Until the Deferred Payment and Inventory Payment
shall be paid to Seller in full, Purchaser shall conduct the Business in the
Ordinary Course.

3.8. INTEREST. Any amounts under this Section 3 not paid by Purchaser
or the Company when due, whether upon demand or otherwise, shall bear interest
from the day when due until such amount is paid in full at a rate of prime plus
three (3)% (but in no event in excess of the maximum rate permitted by
applicable law).

3.9. LOCKBOX ACCOUNT. All sales proceeds from the Stores and Additional
Stores, including sales proceeds that relate to Returns, shall be paid into the
Lockbox Account until the later to occur of (x) one year from the Closing Date
or (y) the date that the Transitional Services Agreement has been terminated by
the parties pursuant to the terms thereof. The Seller shall sweep the Lockbox
Account twice a week for the Initial Inventory Payment due to Seller, the
beginning of the month for the payments due under the Leasehold Improvement
Leases and Equipment Leases, the 20th day of the month for the Deferred Payment,
the first day of each week for the payments due (prorated on a weekly basis)
under the Transitional Services Agreement, and on the 180th day after the
Closing Date for the Post-Closing Inventory Payment and Shrinkage Payment. The
Company shall not make distributions from the Lockbox Account other than with
respect to payment of the Bank Debt, to satisfy obligations of the Company in
the ordinary course of business, or to satisfy the Obligations.

3.10. TENANT IMPROVEMENT ALLOWANCES. Purchaser acknowledges that all
Tenant Improvement Allowances shall be for the benefit of the Seller. Any Tenant
Improvement Allowance received by the Company or the Purchaser that is the
property of the Seller shall be held in trust for Seller and shall be endorsed
over to Seller and remitted to Seller within three business days of receipt
thereof. Purchaser authorizes Seller to instruct the landlords under the Leases
to which the Tenant Improvement Allowances relate to pay the Tenant Improvement
Allowances directly to Seller rather than the Company.

SECTION 4.
CLOSING

4.1. CLOSING. The execution and delivery of the Agreement and
RelatedAgreements shall occur at the offices of Seller at 0 X.X. 000 Xxxxxx,
Xxxxxxxx Xxxxx, XX 00000 (or at such other place as is mutually agreed upon by
the parties) on May 17, 2002.

SECTION 5.
REPRESENTATIONS AND WARRANTIES OF SELLER AND COMPANY

Except as otherwise disclosed to Purchaser in the schedules to this
Agreement, Seller and Company hereby represent and warrant the following to
Purchaser:

5.1. AUTHORIZATION. This Agreement has been duly executed and delivered
by the Company and the Seller and constitutes the valid and binding obligation
of each such party, enforceable against each such party in accordance with its
terms, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, (ii) the remedy of specific performance, injunctive relief and
other equitable remedies are subject to certain equitable defenses and to the
discretion of the court before which any proceedings may be brought and (iii)
rights to indemnification hereunder may be limited under applicable securities
laws (the "Equitable Exceptions"). The Company has full corporate power,
capacity and authority to execute this Agreement and all other agreements and
documents contemplated hereby.

5.2. ORGANIZATION, POWER AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation with all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. The Company is duly qualified or licensed as a foreign
corporation or other applicable entity and in good standing in each jurisdiction
in which the character or location of the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification
necessary, except where the failure to be so duly qualified or licensed would
not have a Material Adverse Effect. Set forth on Schedule 5.2 is a list of the
jurisdictions in which the Company is qualified or licensed to do business as a
foreign corporation. True, complete and correct copies of the Articles of
Incorporation of the Company certified by the Secretary of State of the
applicable state of incorporation as of the date not more than 20 business days
prior to the Closing Date and of the Bylaws of the Company have been delivered
to Purchaser. The minute books of the Company, as heretofore made available to
Purchaser, are correct and complete in all material respects. Since 1999, the
Company has not conducted business under any name other than Lux Corporation or
Mr. Rags.

5.3. CAPITAL STOCK OF THE COMPANY. The Company's authorized capital
stock consists of 5,000 shares of Class A voting common stock, no par value per
share and 5,000 shares of Class B non-voting shares of common stock, no par
value. Seller owns all of the issued and outstanding stock of the Company. All
of the Stock owned by Seller has been validly issued and is fully paid and
nonassessable and is not subject to any preemptive rights (except any statutory
preemptive rights, which the Seller hereby waives). There are no outstanding
conversion or exchange rights, subscriptions, options, warrants or other
arrangements or commitments obligating the Company to issue any shares of
capital stock or other securities or to purchase,

redeem or otherwise acquire any shares of capital stock or other securities, or
to pay any dividend or make any distribution in respect thereof. The Seller (i)
owns of record and beneficially and has good and marketable title to all of the
Stock, free and clear of any and all liens, mortgages, security interests,
encumbrances, pledges, charges, adverse claims, options, buy-sell agreements,
voting rights of any other person, right of first refusal agreements, rights or
restrictions of any character whatsoever other than standard state and federal
securities law private offering legends and restrictions and the Permitted
Liens, and (ii) has the right to vote the Stock on any matters as to which any
shares of the Stock are entitled to be voted under the laws of the state of
incorporation of the Company and the Company's Articles of Incorporation and
Bylaws.

5.4. SUBSIDIARIES. The Company does not presently own, of record or
beneficially, or control directly or indirectly, any capital stock, securities
convertible into capital stock or any other equity interest in any corporation,
association or business entity, nor is the Company, directly or indirectly, a
participant in any joint venture, partnership or other non-corporate entity.

5.5. PERMITS AND INTANGIBLES. The Company holds all licenses,
franchises, permits and other governmental authorizations required for the
conduct of the Business, including motor vehicle titles, the absence of which
would have a Material Adverse Effect (the "Material Permits"). To Seller's
Knowledge, the Material Permits are valid, and the Company has not received any
notice that any governmental authority intends to cancel, terminate or not renew
any such Material Permit. Since 1999, the Company has conducted its business in
compliance with the requirements of the Material Permits, except where such
noncompliance would not have a Material Adverse Effect.

5.6. TAXES. All federal, state and other tax returns of the Company
required by law to be filed have been duly filed, except for such returns the
failure of which to file would not have a Material Adverse Effect. All Taxes on
such tax returns shown to be due and payable have been paid or have been
reserved for by the Company. All such tax returns are accurate in all material
respects. Except with respect to sales tax audits, to Seller's Knowledge, (i) no
action or proceeding for the assessment or collection of any Taxes is pending
against the Company and no notice of any claim for Taxes, whether pending or
threatened, has been received; (ii) no deficiency, assessment or other formal
claim for any Taxes has been asserted or made against the Company that has not
been fully paid or finally settled; and (iii) no issue has been formally raised
by any taxing authority in connection with an audit or examination of any return
of Taxes. Since 1999, no federal, state or foreign income tax returns of the
Company have been examined, and there are no outstanding agreements or waivers
extending the applicable statutory periods of limitation for such Taxes for any
period. All Taxes that the Company has been required to withhold or collect have
been duly withheld or collected, and have been paid to the appropriate taxing
authority, except where the failure to withhold, collect or pay would not have a
Material Adverse Effect. None of the assets of the Company constitutes
tax-exempt bond financed property or tax-exempt use property, within the meaning
of Section 168 of the Code. The Company is not, and has not been at any time, a
"United States real property holding corporation" within the meaning of Section
897(c)(2) of the Code. To Seller's Knowledge, the Company is not a party to any
joint venture, partnership or other arrangement that is treated as a partnership
for Federal income tax purposes. Since 1999, the Company has made no accounting
method change that has resulted in an adjustment under Section 481 of the Code.

5.7. ASSETS AND PROPERTIES. The Company does not own any real property.
Except for inventory, supplies and other personal property disposed of or
consumed, and accounts receivable collected or written off, and cash utilized,
all in the ordinary course of business, the Company owns all of its inventory,
equipment and other personal property (both tangible and intangible) reflected
on the Latest Balance Sheet, free and clear of any Liens, except for Permitted
Liens. The leasehold estates that are the subject of the Leased Real Property
and the tangible personal property owned or leased by the Company are in good
operating condition and repair, ordinary wear and tear excepted.

5.8. MATERIAL CONTRACTS. Schedule 5.8 sets forth all Material
Contracts, other than the Leases. The Material Contracts are, to Seller's
Knowledge, valid, binding, enforceable and existing agreements, in full force
and effect against the Company, except as such enforcement may be affected by
bankruptcy, moratorium or other laws affecting creditor's rights generally or
general principles of equity. The Company is not in default in any material
respect under any of the Material Contracts (nor has it received notice of the
default of any other party to any of the Material Contracts, and to Seller's
Knowledge, no condition exists which with notice or lapse of time or both would
constitute default thereunder); provided, that, this representation specifically
excludes any default under the Leases that might arise as a result of the
transactions contemplated under this Agreement. All of the Material Contracts
were entered into in the ordinary course of business. None of the Closing Date
Inventory consists of merchandise purchased on consignment.

5.9. NO VIOLATIONS. The execution, delivery and performance of this
Agreement and the other agreements and documents contemplated hereby by the
Company and the Seller and the consummation of the transactions contemplated
hereby will not, (i) violate any provision of the charter documents of the
Company or the Seller, (ii) to Seller's Knowledge, violate any statute, rule,
regulation, order or decree of any public body or authority by which the Company
or the Seller or its or their respective properties or assets are bound, or
(iii) result in a violation or breach of, or constitute a default under, or
result in the creation of any encumbrance upon any Material Contract; other than
violations, breaches, defaults or encumbrances that would not have a Material
Adverse Effect, and provided further, that, notwithstanding anything to the
contrary herein, no representation is made under this Section 5.9 with respect
to the Leased Real Property.

5.10. GOVERNMENT CONTRACTS. The Company is not a party to any
governmental contract.

5.11. LITIGATION. Except as disclosed on Schedule 5.11, there is no
outstanding order, judgment, injunction, award or decree of any court,
governmental or regulatory body or arbitration tribunal against or involving the
Company with respect to the Business which, if adversely determined, would
result in a Material Adverse Effect. Except as disclosed on Schedule 5.11, there
is no action, suit, or claim or legal, administrative or arbitration proceeding
or any investigation (whether or not the defense thereof or liabilities in
respect thereof are covered by insurance) pending, or to Seller's Knowledge,
threatened, against or involving the Company with respect to the Business which,
if adversely determined, would result in a Material Adverse Effect. Attached as
Schedule 5.11 is a list provided by the Company's or Seller's insurance carrier
to the Seller of all worker's compensation claims submitted to such insurance

carrier by the Seller or the Company during the 12-month period ended December
31, 2001 with respect to the employees of the Company.

5.12. COMPLIANCE WITH LAWS. To Seller's Knowledge, the Company is not
operating the Business in violation of any applicable federal, state or
municipal laws, regulations or ordinances, the violation of which would have a
Material Adverse Effect.

5.13. INTELLECTUAL PROPERTY. Set forth on Schedule 5.13 is a list of
all material (i) patents, patent rights, patent applications, trademarks,
trademark applications, service marks, service xxxx applications, trade names
and copyrights (collectively, "Intellectual Property"), and all applications for
such that are in the process of being prepared, owned by or registered in the
name of the Company, or of which the Company is a licensor or licensee or in
which the Company has any right which relates and is material to the Business
and (ii) software licensed by the Company and used exclusively in the Business
(the "Licensed Software"). To Seller's Knowledge, the Company owns or possesses
adequate licenses or other rights to use all Intellectual Property and Licensed
Software to conduct the Business as presently conducted, except to the extent
that any lack of ownership or possession would not have a Material Adverse
Effect or except to the extent to be provided by Seller under the Transitional
Services Agreement. Except as disclosed on Schedule 5.11, no claim is pending
or, to Seller's Knowledge, threatened to the effect that the operations of the
Company infringe upon or conflict with the asserted rights of any other person
under any Intellectual Property or Licensed Software. During the past two (2)
years, no litigation has been filed against the Company by any person alleging
an infringement with respect to the Intellectual Property.

5.14. EMPLOYMENT MATTERS; BENEFITS. The Company maintains no Employee
Benefit Plans in effect as of the date hereof in which only the employees solely
dedicated to the Business (the "Employees") are eligible to participate.

(a) Since 1999, there has been no material work stoppage
against the Company nor, to Seller's Knowledge, is any such stoppage threatened.
The Company has not been involved in or, to Seller's Knowledge, threatened with
any collective bargaining dispute, arbitration, lawsuit or administrative
proceeding relating to a collective bargaining matter involving the Employees
(excluding routine workers' compensation claims) that, if adversely determined,
would have a Material Adverse Effect.

(b) The Company has not made advances to any employees (other
than routine travel and entertainment advances), other than in the ordinary
course of business. Attached as Schedule 5.14(b) is a list all accrued but
unpaid vacation pay owing to any officer or employee of the Company as of May
10, 2002. Also set forth on Schedule 5.14(b) is a list of all employees that
have written agreements entitling such employee to severance pay in excess of
$25,000 in the event such employee is terminated by the Company.

5.15. PROPERTY. True and correct copies of the leases (the "Leases")
for each parcel of real property leased by the Company with respect to the
Business (the "Leased Real Property") have been delivered to Purchaser. To
Seller's Knowledge, (a) there are no violations of any applicable deed
restriction, building code, zoning ordinance, covenant or other law or
regulation with respect to the Leased Real Property, except for violations that
would not have a

Material Adverse Effect, and (b) the Company has not received written notice
that any landlord under the Leases intends to terminate the Lease to which it is
a party (provided, that, this representation specifically excludes any
termination of the Leases that might arise as a result of the transactions
contemplated under this Agreement). No default or breach exists under any of the
terms, covenants, conditions, or restrictions set forth in the Leases, except
defaults or breaches which would not have a Material Adverse Effect, or defaults
that will arise as a result of the transactions contemplated by this Agreement.
The Company has not assigned its rights or obligations under the Leases to any
third party. To Seller's Knowledge, (a) the premises leased under the Leases are
supplied with utilities and other services necessary for the operation of the
Business as currently conducted, and (b) the Company has obtained all necessary
government approvals with respect to alterations made at the Leased Real
Property, other than where the failure to obtain such approvals would not have a
Material Adverse Effect.

5.16. INSURANCE. Schedule 5.16 contains a list of the policies and
contracts for fire, casualty, liability and other forms of insurance maintained
by, or for the benefit of, the Company. All such policies are in full force and
effect and shall remain in full force and effect through the Closing Date and
are reasonably adequate for the business engaged in by the Company.

5.17. OFFICERS AND DIRECTORS. Set forth on Schedule 5.17 is a list of
the current officers and directors of the Company.

5.18. BANK ACCOUNTS AND POWERS OF ATTORNEY. Schedule 5.18 sets forth
each bank, savings institution and other financial institution with which the
Company has an account or safe deposit box and the names of all persons
authorized to draw thereon or to have access thereto. Each person holding a
power of attorney or similar grant of authority on behalf of the Company is
identified on Schedule 5.18.

5.19. CONSENTS. With the exception of applicable securities or New York
Stock Exchange rules and regulations, no consent, approval or authorization of,
or designation, declaration or filing with, any governmental authority on the
part of the Company or the Seller is required in connection with the valid
execution and delivery of this Agreement or any of the Related Agreements,
except where the failure to obtain such consent would not have a Material
Adverse Effect.

5.20. INTERCOMPANY LOANS; PERFECTED LIENS. Any loans owed to Seller by
the Company as of the Closing Date will be contributed to the capital of the
Seller, and will not be obligations of the Company after the Closing Date. To
Seller's Knowledge, no lender that has loaned money to the Seller or the Company
has filed a Form UCC-1 against the Company to secure such loan (excluding any
Form UCC-1s that may have been filed against the Company with respect to any
real or personal property leased by the Company) that is in effect as of the
Closing Date.

5.21. NO ADDITIONAL REPRESENTATIONS. Neither Seller nor the Company is
making any representation or warranty, express or implied, of any nature
whatsoever, with respect to Company, the Subsidiaries, the Business or the
Stock, except for the representations and warranties in this Section 5. It is
understood that any cost estimates, projections or other predictions contained
or referred to in the schedules hereto and any cost estimates, projections or

predictions or any other information contained or referred to in other materials
that have been or shall hereafter be provided to Purchaser or any of its
representatives are not and shall not be deemed to be representations or
warranties of Seller.

SECTION 6.
REPRESENTATIONS AND WARRANTIES OF PURCHASER

Except as otherwise disclosed to Seller or the Company in the schedules
to this Agreement, Purchaser hereby represents and warrants to Seller and the
Company, the following:

6.1. ORGANIZATION, POWER AND QUALIFICATIONS. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California, with all requisite corporate power and authority to own,
lease and operate its properties and to carry on the Business. The Purchaser is
not required to be qualified or licensed as a foreign corporation in any foreign
jurisdiction. True, complete and correct copies of the Articles of Incorporation
of the Purchaser certified by the Secretary of State of the applicable state of
incorporation as of the date not more than 20 business days prior to the Closing
Date and of the Bylaws of the Purchaser have been delivered to Seller.

6.2. AUTHORIZATION. This Agreement has been duly executed and delivered
by the Purchaser and the Shareholders and constitutes the valid and binding
obligation of each such party, enforceable against each such party in accordance
with its terms, except the Equitable Exceptions. The Purchaser has full
corporate power, capacity and authority to execute this Agreement and all other
agreements and documents contemplated hereby.

6.3. CONSENTS. No consent, approval or authorization of, or
designation, declaration or filing with, any governmental authority on the part
of the Purchaser or the Shareholders is required in connection with the valid
execution and delivery of this Agreement or any of the Related Agreements,
except where the failure to obtain such consent would not have a Material
Adverse Effect on Purchaser.

6.4. LITIGATION. There is no outstanding order, judgment, injunction,
award or decree of any court, governmental or regulatory body or arbitration
tribunal against or involving the Purchaser or the Shareholders which, if
adversely determined, would result in a Material Adverse Effect on Purchaser.
There is no action, suit, or claim or legal, administrative or arbitration
proceeding or any investigation (whether or not the defense thereof or
liabilities in respect thereof are covered by insurance) pending, or to
Purchaser's knowledge, threatened, against or involving the Purchaser or the
Shareholders which, if adversely determined, would result in a Material Adverse
Effect on Purchaser.

6.5. NO VIOLATIONS. The execution, delivery and performance of this
Agreement and the other agreements and documents contemplated hereby by the
Purchaser and the Shareholders and the consummation of the transactions
contemplated hereby will not, (i) violate any provision of the charter documents
of the Purchaser, (ii) to Purchaser's knowledge, violate any statute, rule,
regulation, order or decree of any public body or authority by which the
Purchaser or the Shareholders or their respective properties or assets are
bound, or (iii) result in a violation or breach of, or constitute a default
under, or result in the creation of any encumbrance upon any

material contract of the Purchaser or the Shareholders; other than violations,
breaches, defaults or encumbrances that would not have a Material Adverse Effect
on Purchaser.

6.6. STOCK ACQUIRED FOR INVESTMENT. Purchaser represents, covenants and
warrants that it is acquiring the Stock for its own account for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof. Purchaser further represents and warrants that it is an
"accredited investor" within the meaning of Regulation D under the Securities
Act. Purchaser will not offer to sell or otherwise transfer any of the Stock in
violation of any federal or state securities law. Purchaser acknowledges that
the sale of the Stock to it has not been registered pursuant to any federal or
state securities laws and that a legend to that effect may be placed on all
certificates representing such Stock unless and until a registration statement
under the Securities Act has become effective with respect to such Stock.

6.7. INFORMATION. Purchaser has been given access to information
concerning the condition, properties, operations and prospects of the Business.
Purchaser has had an opportunity to ask questions of and to receive information
from Seller and persons acting on its behalf concerning the Business. Purchaser
acknowledges that it has undertaken an independent investigation and
verification of the Business and the assets, including without limitation the
Business's financial condition. As part of its investigation, Purchaser may be
given certain forecasts, projections and opinions prepared or furnished by or on
behalf of Seller with respect to the Business (the "Additional Financial
Information"). Purchaser has taken responsibility for evaluating the adequacy of
the Additional Financial Information. Purchaser is familiar with the
uncertainties inherent in attempting to make such forecasts, projections and
opinions and has taken such uncertainties into account in its evaluation of the
Additional Financial Information. Purchaser expressly acknowledges and agrees
that it is not relying on Seller with respect to any matter in connection with
Purchaser's investigation or evaluation of the Business or the assets,
including, but not limited to, any Additional Financial Information provided by
Seller with respect to the Business, except for the representations of Seller
set forth in Section 5 of this Agreement.

6.8. NO LIABILITIES. The Purchaser has no liabilities as of the Closing
Date, other than liabilities incurred in connection with its formation.
Immediately after the Closing Date, the Company will have no liabilities, other
than the liabilities that existed immediately prior to the Closing Date and
liabilities incurred by Purchaser on behalf of the Company directly related to
the transactions contemplated under this Agreement.

6.9. PERMITS AND INTANGIBLES. The Purchaser has caused the Company to
obtain all licenses, franchises, permits and other governmental authorizations
required for the conduct of the Business as of the Closing Date, the absence of
which would have a Material Adverse Effect on the Purchaser.

6.10. CAPITALIZATION. The minimum cash of the Purchaser is $2 million
as of the Closing Date (after giving effect to the payment of the Initial
Purchase Price to Seller under this Agreement).

6.11. OWNERSHIP INFORMATION. Schedule 6.11 sets forth all of the
shareholders of the Purchaser, including the percentage ownership held by such
shareholder in the Purchaser

(collectively the "Purchaser Shareholders"). Schedule 6.11 also sets forth the
members and partners, as the may be, of the Purchaser Shareholders, including
the percentage ownership owned by such member or partner in the Purchaser
Shareholder. Each of the Purchaser Shareholders is duly organized, validly
existing and in good standing under the laws of its state or country of
organization. The Purchaser Shareholders own all of the shares of the Purchaser,
free and clear of all Liens.

SECTION 7.
DELIVERIES AT CLOSING

7.1. DELIVERIES BY SELLER. On the Closing Date, Seller shall deliver
(or cause delivery) to Purchaser all of the following:

(a) the stock certificate issued to Seller representing the
Stock, duly endorsed for transfer or accompanied by duly executed stock power;

(b) the Company's minute books, stock transfer records, stock
certificates, corporate seal and other materials related to its corporate
administration;

(c) resignations (effective as of the Closing Date) from all
of the Company's officers and members of board of directors;

(d) a certificate of good standing of the Company from the
Secretary of State of its state of incorporation;

(e) a certified copy of the resolutions adopted by Seller's
board of directors authorizing the execution, delivery and performance of this
Agreement and the consummation of all of the transactions contemplated by this
Agreement; and

(f) the Related Agreements to which it is a party.

7.2. DELIVERIES BY PURCHASER. On the Closing Date, Purchaser shall
deliver (or cause delivery) to Seller all of the following:

(a) a certificate of good standing of Purchaser from the
Secretary of State of the state of its formation;

(b) a certified copy of the resolutions adopted by Purchaser's
board of directors authorizing the execution, delivery and performance of this
Agreement and the consummation of all of the transactions contemplated by this
Agreement;

(d) the Related Agreements to which it is a party;

(e) certificates of insurance evidencing the insurance
coverage for fire, casualty, liability, worker's compensation and other forms of
insurance to be maintained by the Company, effective as of the Closing Date; and

(f) an executed copy of the Form 8023 relating to the
Section 338(h)(10) Election (reference is made to Section 10.15 hereof).

SECTION 8.
POST-CLOSING COVENANTS

8.1. EMPLOYEE MATTERS. The Company shall assume and be solely
responsible for all liabilities and obligations whatsoever in connection with
claims made by or on behalf of employees of the Company after the Closing Date
in respect of severance pay, salary continuation and similar obligations
relating to the termination or alleged termination of any employee's employment
with the Company after the Closing Date. Purchaser or the Company shall be
responsible for providing any continued coverage required pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") with respect to
any employee benefit plans or arrangements maintained by the Company, if the
qualifying event resulting in such coverage occurred on or after the Closing
Date.

8.2. TRANSITIONAL SERVICES AGREEMENT. Seller will provide the services
under the Transitional Services Agreement, attached hereto as Exhibit D (the
"Transitional Services Agreement").

8.3. DEFENSE OF LITIGATION. The Purchaser agrees to cause the Company
to assume the defense of any litigation that arises after the Closing Date.

8.4. SECTION 338(H)(10) ELECTION. (a) With respect to the sale of the
Stock, Seller and Purchaser shall jointly make a Section 338(h)(10) Election in
accordance with applicable laws. Seller and Purchaser agree to cooperate in good
faith with each other in the preparation and timely filing of that Form 8023 and
any other Section 338 Forms in connection with the making of a Section
338(h)(10) Election. Purchaser and Seller agree to report the transfers under
this Agreement in a manner consistent with the Section 338(h)(10) Election and
shall take no position contrary thereto unless required to do so by applicable
law.

(b) Other than the Form 8023 to be prepared and filed as set
forth in Section 8.4(a) hereof, Seller shall be responsible for the preparation
and timely filing of all Section 338 Forms in accordance with applicable tax
laws and the terms of this Agreement. Purchaser shall provide Seller with such
information as Seller reasonably requests in order to prepare the Section 338
Forms no later than 30 days after Seller's request for that information. Seller
shall prepare and deliver the Section 338 Forms to Purchaser at least 45 days
prior to the date the Section 338 Forms are required to be filed. Purchaser
shall execute and deliver the Section 338 Form to Seller no later than 30 days
after Seller delivered the forms to Purchaser. Purchaser shall properly file any
Section 338 Forms that are required to be filed by Purchaser.

(c) Purchaser and Seller agree that they shall negotiate
in good faith to enter into an agreement (the "Allocation Agreement"), as soon
as practicable after the Closing, to allocate the Purchase Price among the
properties of the Company in accordance with Section

338(b)(5) of the Code and the Treasury Regulations thereunder (the
"Allocation"). Purchaser and Seller agree that the Allocation shall be made
pursuant to the following procedure: Purchaser shall deliver to Seller an
allocation of the Purchase Price ("Purchaser's Appraisal"). Seller shall be
deemed to have accepted and agreed to the allocation based upon Purchaser's
Appraisal, in which case Purchaser's Appraisal becomes the Allocation Agreement,
unless Seller delivers written notice to Purchaser to the contrary within 30
days after Seller's receipt of Purchaser's Appraisal. If (i) Seller so objects
to the allocation based upon Purchaser's Appraisal, and Purchaser and Seller are
unable to resolve all their differences within 15 days, or (ii) Purchaser fails
to deliver Purchaser's Appraisal, Seller and Purchaser shall prepare separate
allocations. All fees and expenses relating to Purchaser's Appraisal shall be
borne by Purchaser. In the event any taxing authority questions the allocation
agreed to by Seller and Purchaser, if any, Seller or Purchaser, as appropriate,
shall promptly notify the other of such event and shall inform and consult with
the other as to any such inquiry as it progresses.

(d) "Form 8023" means Internal Revenue Service Form 8023 and
any related schedules and attachments.

(e) "Section 338 Forms" means all forms, returns,
documents, statements, schedules and other documents that are required to be
submitted to any federal, state or local taxing authority in connection with a
Section 338(h)(10) Election.

(f) "Section 338(h)(10) Election" means an election
described in Section 338(h)(10) of the Code (as well as all elections under any
comparable provisions of state or local law under which a separate election is
permissible) with respect to Purchaser's acquisition of the Stock pursuant to
this Agreement.

8.5. GUARANTIES. In addition to Purchaser's obligations under the
Assumption Agreement, Purchaser shall use its best efforts to cause itself or
one or more of its affiliates to be substituted in all respects for Seller or a
Seller Entity (other than the Company), effective as of the Closing, in respect
of all obligations of Seller or a Seller Entity (other than the Company or the
Subsidiaries) under the guaranties for the Leased Real Property for which Seller
is a guarantor. As a result of the substitution contemplated by this Section
8.5, Seller and the Seller Entities (other than the Company or the Subsidiaries)
shall from and after the Closing cease to have any obligation whatsoever arising
from or in connection with the guaranties.

8.6. USE OF CLAIRE'S NAME. Purchaser agrees that neither the Purchaser
nor the Company shall use the name "Claire's" with respect to its operations of
the Business.

8.7. DELIVERY OF BANK DOCUMENTS. Purchaser shall deliver executed
copies of the documents for the Bank Debt within three (3) business days of
execution by the parties thereto.

8.8. COOPERATION FOR CANCELLATION OF PURCHASE ORDERS. The Purchaser and
Company agree to cooperate with Seller with regard to the cancellation of any
purchase orders for inventory of the Business that are outstanding as of the
Closing Date. Purchaser and the Company authorize Seller to cancel such purchase
orders on behalf of the Company and to negotiate the terms of such cancellation
with the vendors on behalf of the Company.

SECTION 9.
INDEMNIFICATION

9.1. SURVIVAL. (a) All representations and warranties of the parties
contained in this Agreement or in any schedule hereto shall survive the Closing
only until nine months from the Closing Date; provided, that, the
representations set forth in Sections 5.6 (the "Tax Representations") shall
survive for a period of two years after the Closing Date. No action or
proceeding may be brought with respect to any of the representations or
warranties set forth in this Agreement, unless written notice thereof, setting
forth in reasonable detail the claimed misrepresentation or breach of warranty
shall have been delivered to the party alleged to have breached such
representation or warranty prior to the expiration of the survival terms set
forth for such representation or warranty in the preceding sentence.

(b) The remaining covenants or agreements (including but
not limited to the indemnities and Purchaser's obligations under Section 3
hereof) contained in this Agreement shall survive the execution and delivery
hereof and the completion of the transactions contemplated herein.

9.2. INDEMNIFICATION BY SELLER. Seller agrees to indemnify Purchaser
with respect to, and hold Purchaser harmless from, any loss, liability or
expense, including, but not limited to, reasonable legal fees) ("Losses") which
Purchaser may incur or suffer by reason of, or which results, arises out of or
is based upon (a) the inaccuracy of any representation or warranty made by
Seller in this Agreement, or (b) the failure of Seller to comply with any
covenants or other commitments made by Seller in this Agreement; provided,
however, (i) the Purchaser shall not be entitled to indemnification until all
such Losses (which individually shall be at least $250,000) exceed, in the
aggregate $5 million, in which case the Purchaser shall be entitled to
indemnification only to the extent such Losses exceed $5 million (referred to as
the "Deductible"); provided, that, (A) Losses that relate to breaches of the Tax
Representations that result in an assessment of Federal or state income Taxes
against the Company for the period prior to the Closing Date (the "Tax Losses")
shall not be subject to the Deductible, (B) with respect to Losses that relate
to breaches of the Tax Representations that result in an assessment of Taxes
against the Company (other than the Tax Losses) for the period prior to the
Closing Date, the Purchaser shall not be entitled to indemnification until all
such Losses exceed, in the aggregate, $150,000, in which case the Purchaser
shall be entitled to indemnification only to the extent such Losses exceed
$150,000, and (C) with respect to Losses that relate to Insured Losses,
Purchaser shall not be entitled to indemnification until the Losses exceed the
$250,000 "deductible" under the Seller Insurance Policy providing coverage for
such Loss, subject to a cap of $5 million, (ii) the Purchaser shall not be
entitled to indemnification with respect to any breach of any representation or
warranty under Section 5 hereof if Seller can prove by a preponderance of the
evidence that any Member, officer or manager of the Purchaser had actual
knowledge at any time on or prior to the Closing Date of the events or
conditions constituting or resulting in such breach of representation or
warranty, (iii) in no event shall Seller be required to pay in excess of the
lesser of (A) $10 million, or (B) the Purchase Price, in each case minus any
amount of Losses incurred by the Seller and not satisfied by the Company or the
Purchaser in accordance with the terms of this Section 9, (iv) Losses shall be
net of any insurance proceeds payable or tax benefits realizable to the
indemnified party with respect to the Loss, and (v)

Purchaser's sole recourse for Losses shall be limited to recourse against the
Deferred Payment by way of setoff equal to the amount of any such claim for
Losses.

9.3. INDEMNIFICATION BY PURCHASER AND SHAREHOLDERS. (a) Each of
Purchaser and the Company, jointly and severally, agrees to indemnify Seller
with respect to, and hold Seller harmless from, any Losses which Seller may
incur or suffer by reason of, or which results, arises out of or is based upon
(a) the inaccuracy of any representation or warranty made by Purchaser in this
Agreement, (b) the failure of Purchaser or the Company to comply with any
covenants or other commitments made by Purchaser or the Company in this
Agreement, including, but not limited to, the failure of the Company or
Purchaser to satisfy the obligations under the Leases and Equipment Leases, (c)
any litigation relating to the Business, (d) the operation of the Business after
the Closing Date, and (e) any Insured Loss that is subject to the $250,000
"deductible" under the Seller Insurance Policy providing coverage for such Loss.

(b) Each of the Shareholders, jointly and severally, agrees to
indemnify Seller with respect to, and hold Seller harmless from, any Losses
which Seller may incur or suffer by reason of, or results, arises or is based
upon the inaccuracy of any representation or warranty made by Purchaser or the
Shareholders in Sections 6.1, 6.2, 6.3, 6.4, 6.5 and 6.6 of this Agreement.

9.4. THIRD PARTY CLAIMS. In the event that Purchaser or Seller become
involved in any third party claims which may result in indemnification claims
hereunder, such party shall promptly notify the other party in writing and
provide the full details of the filing and the nature of such claim. The other
party may, at its option and expense, defend any such proceeding if the claim
could give rise to an indemnification obligation hereunder. It shall be a
necessary condition of any claim by any indemnitee for indemnification with
respect to any third party claim, or for such third party claim to be taken into
account for purposes of the dollar thresholds under Section 9.2, that such
indemnitee notify the indemnitor prior to the time when the indemnitor's ability
to contest the third party claim would be materially impaired by lack of notice.
If any party elects to defend any claim, such party shall have full control over
the conduct of such proceeding, although the party being indemnified shall have
the right to approve any settlement of any dispute giving rise to such claim,
provided that such approval may not be withheld unreasonably by the party being
indemnified. The party being indemnified shall reasonably cooperate with the
indemnifying party in such claim. If there is a material conflict of interest
between the indemnitor and the indemnitee with respect to a third party claim,
neither group shall be entitled to assume the defense thereof. In that event,
the indemnitor and the indemnitee each shall be entitled to conduct their own
respective investigations and defenses, but they shall cooperate to conduct such
investigation and defense as efficiently as possible. If the indemnitor is
required to indemnify the indemnitee with respect to such third party claim, it
shall pay the reasonable attorneys' fees and expenses of one individual or firm
representing the indemnitee. Purchaser and Seller shall make available to each
other, their counsel and other representatives, all information and documents
reasonably available to them which relate to any third party claim, and
otherwise cooperate as may reasonably be required in connection with the
investigation and defense thereof.

9.5 LIMITATION OF RECOURSE. The rights of the Purchaser and
Shareholders for indemnification relating to this Agreement or the transactions
contemplated hereby shall be

strictly limited to those contained in Section 9 hereof, and such
indemnification rights shall be the exclusive remedies of Purchaser and
Shareholders subsequent to the Closing Date with respect to any matter in any
way relating to this Agreement or arising in connection herewith.

9.6. PUNITIVE DAMAGES. No party to this Agreement shall seek or be
entitled to punitive, exemplary and/or consequential damages with respect to any
claim other than a third party claim.

SECTION 10.
MISCELLANEOUS

10.1. SEVERABILITY. Should any part of this Agreement for any reason be
declared invalid, such decision shall not affect the validity of any remaining
portion, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated and
it is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including thereon any
such part, parts, or portion which may, for any reason, be hereafter declared
invalid.

10.2. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which, taken together,
shall constitute one Agreement.

10.3. HEADINGS. Section and article headings used in this Agreement
have no legal significance and are used solely for convenience of reference.

10.4. EXPENSES. Each party shall pay for its own legal, accounting and
other similar expenses incurred in connection with the transactions contemplated
by this Agreement, whether or not such transactions are consummated.

10.5. TAXES. Any income, sales, transfer, use or excise taxes payable
in connection with these transactions shall be paid by the party responsible
therefor under applicable local law.

10.6. PUBLICITY. Neither Purchaser or Purchaser Shareholders shall make
any public announcements regarding this Agreement or the transactions
contemplated thereby without the prior written consent of Seller. Unless
otherwise required by law, Seller shall not make any public announcements
relating to the partners of International Retail LTD and, to the extent
practical, shall provide Purchaser with a copy the press release relating to the
signing or closing of this Agreement prior to issuing such press release.

10.7. LAW GOVERNING; ARBITRATION. This Agreement shall be deemed to
have been entered into under the laws of the State of Florida, and the rights
and obligations of the parties hereunder shall be governed and determined
according to the laws of said state without giving any effect to conflict of
laws. All disputes arising after the Closing in connection with this Agreement
shall be finally settled under the Rules of the American Arbitration Association
(the "Rules of Arbitration") by three (3) arbitrators appointed in accordance
with the Rules of Arbitration. Any such arbitration shall be held in Miami-Dade
County pursuant to the Laws of the State of Florida unless the parties hereto
mutually agree in writing upon some other location for arbitration. The
arbitrators shall not be empowered to award punitive, exemplary and/or
consequential damages to any party. There shall be no consolidation of this
arbitration with any

other dispute or proceeding involving third parties. The provisions of this
Agreement shall prevail in case of inconsistency between the Rules of
Arbitration and this Agreement.

10.8. INDEMNIFICATION FOR BROKER FEES. The Seller agrees to indemnify
and save harmless the Purchaser, and the Purchaser agrees to indemnify and save
harmless the Seller, and their respective partners, officers, directors,
employees and agents, from and against any and all actions, causes of action,
suits, losses, liabilities and damages, and expenses (including, without
limitation, reasonable attorneys' fees and disbursements in connection
therewith) for any brokers or finders fees arising with respect to brokers or
finders engaged by the non-indemnifying party.

10.9. BINDING ON SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and bind the respective successors and assigns of the parties
hereto; provided, that, the Purchaser may not assign its rights or obligations
under this Agreement without the prior written consent of the Seller. Other than
as specifically provided in this Agreement, nothing expressed or referred to in
this Agreement is intended or shall be construed to give any person other than
the parties to this Agreement or their respective successors or permitted
assigns any legal or equitable right, remedy or claim under or in respect of
this Agreement, or any provision contained herein, it being the intention of the
parties to this Agreement or the Related Agreements that this Agreement shall be
for the sole and exclusive benefit of such parties or such successors and
assigns and not for the benefit of any other person. The agreements attached
hereto as exhibits shall be binding and subject to the assignment provisions as
set forth in such agreements.

10.10. ENTIRE AGREEMENT. This Agreement, the Confidentiality Agreement
and the schedules, exhibits and documents delivered pursuant hereto constitute
the entire contract between the parties hereto pertaining to the subject matter
hereof and supersede all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether written or oral. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party or parties to be bound thereby. No delay in the exercise of
any rights by any party hereunder shall operate as a waiver of any rights of
such party.

10.11. ACCESS TO RECORDS. For a period of five (5) years after the
Closing Date, Seller shall have the right, at its expense, and during normal
business hours upon prior written notification, to inspect and copy any of the
records relating to the operation of the Business delivered to Purchaser in
connection with this transaction, for the purposes of (a) preparing and/or
defending tax returns for the period prior to the Closing Date, (b) obtaining
information relating to claims arising from the operation of the Business prior
to the Closing Date or (c) any other commercially reasonable purpose. During
such five (5) year period Purchaser shall not destroy or discard such records
without giving Seller ninety (90) days' prior written notice of its intentions
and giving Seller the right, at its expense, to remove from Purchaser's premises
any such financial records. For a period of five (5) years after the Closing
Date, Purchaser shall have the right, at its expense, and during normal business
hours upon prior written notification, to inspect and copy any of the records
relating to the operation of the Business in the possession of the Seller that
relate to the Business, for the purposes of (a) preparing and/or defending tax
returns for the period prior to the Closing Date, (b) obtaining information
relating to claims arising from the operation of the Business or (c) any other
commercially reasonable purpose. During such five (5) year period Seller shall
not destroy or discard such records in the possession of the Seller without
giving Purchaser ninety (90) days' prior written notice of its intentions and

giving Purchaser the right, at its expense, to remove from Seller's premises any
such financial records.

10.12. NOTICES. All notices, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered in
person, mailed by certified mail, postage prepaid, or sent via telecopier:

If to Purchaser: With a copy to:

Mr. Rags Acquisition, Inc. Buchalter, Nemer, Fields & Younger P.A.
00000 Xxx Xxxx Xxxxxx 000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Floor
Suite 58 N Los Angeles, CA 90017
Xxxxxx, XX 00000 Attention: Xxxxxxx Xxxxx

Attention: Xxxx Xxxxx Xxxxxxxx Xxxxxxxx
00000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx

If to Seller: With a copy to:

Claire's Stores, Inc. Xxxxxxxxx Traurig, P.A.
3 S.W. 129 Avenue 0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxx 00000 Xxxxx, Xxxxxxx 00000
Attn: Xxx X. Xxxxxx, Senior Vice President Attn: Xxxx X. Xxxxxxx, Esq.

or to such other address as Seller or Purchaser may designate by notice to the
other.

10.13. CONFIDENTIALITY. Purchaser understands that in connection with
the transactions contemplated hereby and after the Closing, Purchaser may come
in contact with means and methods by which Seller, the Company and its
subsidiaries/affiliates (collectively, "Seller Entities") conduct and operate
their businesses (other than the Business), including, but not limited to,
contract terms, lease terms, methods of operation, levels of costs, store
displays, promotional procedures, pricing strategies, software, systems,
utilization and profits, any other operating and procedure methods developed by
Seller Entities, together with any other materials prepared or provided by, or
on behalf of Seller Entities (collectively, the "Trade Secrets"). Purchaser
understands that the Trade Secrets are confidential and proprietary materials of
Seller Entities. Purchaser agrees to keep the Trade Secrets confidential and not
to use the Trade Secrets or reveal the Trade Secrets to any other person or
entity, unless required by law. Purchaser shall also obligate each of its
employees and agents to a level of care sufficient to protect the Trade Secrets
from unauthorized use or disclosure. Upon the request of Seller Entities,
Purchaser shall return the Trade Secrets to Seller Entities.

10.14. ATTORNEYS' FEES. In the event that a suit for the collection of
any damages resulting from, or for the injunction of any action constituting, a
breach of any of the terms or

provisions of this Agreement, then the non-prevailing party shall pay all
reasonable costs, fees (including reasonable attorneys' fees) and expenses of
the prevailing party.

10.15. SECTION 338(h)(10) ELECTION FILING. Prior to completion of the
Closing, Purchaser and Seller shall prepare, and properly deliver to the U.S.
Postal Service an envelope for mailing by Certified Mail, Return Receipt
Requested, with the return receipt addressed to Purchaser, containing, a
properly executed Form 8023 (albeit without an allocation of the purchase price
in Sections E and F thereof) as well as two copies of the Form 8023 for stamping
to record receipt thereof by the Internal Revenue Service and postage prepaid
envelopes for return of one copy each to Seller and Purchaser. Prior to
completion of the Closing, Seller shall receive a copy of the envelope, of the
postal card to be signed by the Internal Revenue Service evidencing its receipt
of the envelope and of the receipt stamped by the U.S. Postal Service evidencing
its receipt of the envelope. Promptly following its receipt of the postal card
to be signed by the Internal Revenue Service evidencing its receipt of the
envelope, Purchaser shall deliver a copy thereof to Seller.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, all as of the day and year first above written.

CLAIRE'S STORES, INC.

By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chairman of the Board
LUX CORPORATION

By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chairman of the Board
MR. RAGS ACQUISITION, INC.

By: /s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxx Xxxxxx
Title: Chief Executive Officer

The undersigned agree to be bound by the terms of Section 9.3(b) of
this Agreement.

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XXXXX XXXXXXXX

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